Sample - Not an Official USAMEDDC&S Lesson Plan

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					          UNITED STATES ARMY
            FINANCE SCHOOL




     U.S. ARMY SOLDIER SUPPORT INSTITUTE

Functional Area 45 Intermediate Level Education

              Obligation Management
                                        Obligation Management
                                       AJE45105LP / Version 1.0
                                              8 April 2005


SECTION I.       ADMINISTRATIVE DATA

All Courses       Course Number                     Course Title
Including This
Lesson               7D-FA45                     FA 45 Intermediate Level Education (ILE)

Task(s)               Task Number              Task Title
Taught (*) or           Individual
Supported
                     None

Reinforced        Task Number                  Task Title
Task(s)
                     None

Academic          The academic hours required to teach this lesson are as follows:
Hours
                                            Resident
                                         Hours/Methods
                                         8 hr/Conference
                                         0 hr/Practical Exercise (Performance)
                  Test                   0 hrs
                  Test Review            0 hrs
                  Total Hours:           8 hr 0 mins

Test Lesson                                      Hours                 Lesson No.
Number
                  Testing
                                                                      st
                  (to include test review)          2                1 Interim Module Test

Prerequisite      Lesson Number               Lesson Title
Lesson(s)
                  AJE45101                   Values & Ethics

                  AJE45102                   Business Skills

                  AJE45103                   Disbursing Operations

                  AJE45104                   Managerial Programs

Clearance         Security Level: Unclassified
Access            Requirements: There are no clearance or access requirements for the lesson.

Foreign           FD5. This product/publication has been reviewed by the product developers in
Disclosure        coordination with Fort Jackson/Soldier Support Institute foreign disclosure
Restrictions      authority. This product is releasable to students from all requesting foreign
                  countries without restrictions.




                                                       2
References

                  Number                Title                       Date                      Additional
                                                                                             Information

                  DoD FMR               Department of Defense       Jan 2001
                  7000.14-R Vol 3       Financial Management
                                        Regulation

                  DFAS-IN REG           Finance and Accounting      Sep 2000
                  37-1, Chapter 8       Policy Implementation,
                                        Obligation Management



Student Study     None
Assignments

Instructor        One primary instructor
Requirements
                  The Instructor:

                           a. Must be of the grade authorized by TDA series

                           b.   Must meet physical qualifications IAW AR 600-9

                           c.   Must have served as a comptroller at the tactical or operational level

                           d. Must be Functional Area (FA) 44/45 qualified and a graduate of the
                              Command and General Staff Officer Course (CGSC) or the FA 45 ILE
                              course

                           e. Must have completed the Planning, Programming, Budgeting, and
                              Execution System (PPBES) Course; the Resource Management
                              Budget Course (RMBC); and the Resource Management Tactical
                              Course (RMTC).

                           f.   Must have attended the SSI staff and faculty course (or equivalent
                                TRADOC approved course) within the past five years.

Additional        Name                                                 Stu       Qty     Man Hours
Support                                                                Ratio
Personnel         None
Requirements
Equipment         ID                                                 Stu       Instr   Spt     Qty         Exp
Required          Name                                               Ratio     Ratio
for Instruction   None
                  Erasable Marker Board                                                        1           NO

                                                                                               1           NO
                  Overhead Projector Semi-Portable
                                                                                               1           NO
                  Computer Preloaded with Windows 2000 (or
                  higher) Operating System



                                                      3
                                                                                        1      NO
                 Internet Access
                                                                                        1      NO
                 PowerPoint or PowerPoint Viewer Software
                                                                                        1      NO
                 LCD Projector


Materials        Instructor Materials:
Required
                 Instructor Guide

                 Slides (Appendix A)

                 Practical Exercise (Appendix C)

                 Handouts (Appendix D)
                 Student Materials:
                 Student Guide

Classroom,       Classroom for 24 personnel with arm chairs and tables
Training Area,
and Range        The classroom will be set up in a general purpose seminar configuration.
Requirements

Ammunition       Id     Name                                       Exp      Stu       Instr     Spt
Requirements                                                               Ratio      Ratio     Qty
                 None



Instructional    NOTE: Before presenting this lesson, instructors must thoroughly prepare by
Guidance               studying this lesson and identified reference material.

                         Instructors should also ensure that all required equipment and materials
                         are available prior to the start of the class.

Proponent        Name                     Rank         Position                Date
Lesson Plan
Approvals




                                                   4
SECTION II.      INTRODUCTION


                 Method of Instruction: Lecture/Conference              .
                 Instructor to Student Ratio is: 1:21
                 Time of Instruction: 10 Mins.
                 Media: Slides

Motivator         NOTE: Show Slide #1 – FA 45 Intermediate Level Education (ILE) – Obligation
                  Management

                  NOTE: Show Slide #2 – Terminal Learning Objective
                  NOTE: Refer to the slide as you tell the students:

Terminal          NOTE: Inform the students of the following Terminal Learning Objective
Learning          requirements.
Objective
                  At the completion of this lesson, you [the student] will:

                  Action:         Use basic obligation documents and funding reports to illustrate the
                                  review process between fund managers and accounting personnel.

                  Conditions:     In the classroom environment, using reading assignments,
                                  classroom discussion and a variety of situation scenarios.

                  Standards:      Correctly answer 70% of questions asked in an end-of-course
                                  examination in accordance with instructional material presented.

Safety            None
Requirements

Risk              Low
Assessment
Level

Environmental     NOTE: It is the responsibility of all soldiers and DA civilians to protect the
Considerations    environment from damage.

Evaluation        NOTE: Questions related to this lesson will be included in the first interim module
                  exam.


Instructional     NOTE: Show Slide #3 and #4 – Enabling Learning Objectives
Lead-In
                  NOTE: Refer to the slide as you tell the students:

                  There are six ELOs that support the Terminal Learning Objective for this lesson.
                  They are:

                      Define obligation management.

                      Identify the stages of funding and the key agencies involved in the funding
                      process.




                                                     5
    Process an obligation or commitment document.

    Calculate key obligation rates (practice exercise).

    Interpret data on STANFINS funding reports to provide information on fund
    usage (practice exercise).

    Describe the joint review and reconciliation process

NOTE: Show Slide #5 – Acronyms And Terms

Transition: Before we begin, there are several acronyms and terms that you will
encounter in this lesson. You need to be able to recognize them and know what
they mean.
Refer to the Student Guide as we progress through this lesson and take it with you
when you leave. It will be a valuable tool for you to use in the future.




                                  6
SECTION III.       PRESENTATION


NOTE:     Inform the students of the Enabling Learning Objective requirement.

A.        ENABLING LEARNING OBJECTIVE

           ACTION:               Define Obligation Management

           CONDITIONS:           In a classroom environment, given an interim module examination
                                 without notes.

           STANDARDS:            Correctly answer 70% of questions asked in an end-of-course
                                 examination in accordance with instructional material presented.



1.       Learning Step / Activity 1. Obligation Management
                 Method of Instruction: Lecture/Conference
           Instructor to Student Ratio: 1:21
                   Time of Instruction: 40 minutes
                                Media: Slides

         a. General. Execution is the last phase of the Army’s Planning, programming, Budgeting, and
            Execution System (PPBES). It begins when funding authorization documents are received
            at the installation. Execution is made up of many functions including fund control, obligation
            management, reimbursement management, and cash/debt management. We are going to
            concentrate on obligation management. Budget execution requires that activity directors
            continuously monitor actual performance to determine the current status of each job, revise
            resource estimates as needed, and determine if remaining uncommitted resources are
            sufficient to meet the year’s mission requirements. It requires extensive accountant
            involvement in processing financial data, generating accounting reports, analyzing
            execution results, and advising resource managers of current and potential trends and
            problems.

NOTE:          Show Slide #6 Definition.


NOTE:          Refer to the slide as you tell the students:

         b. Obligation management is the systematic process of managing obligations by accountants
            and resource managers using all available resources.

NOTE:          Show Slide #7 Responsibilities.


NOTE:          Refer to the slide as you tell the students:

         c.     Responsibilities:

                (1) Service activity or fund managers are primarily responsible for managing obligations by:

                    (a) Reviewing obligation documents for compliance.




                                                         7
    (b) Ensuring that the accounting classification cited on the obligation document is
        appropriate for the stated purpose of the obligation.

    (c) Ensuring the amount obligated meets statutory and regulatory provisions.

    (d) Ensuring the obligation is recorded timely and accurately.

(2) Accounting activities are responsible for ensuring the integrity and accuracy of all
    obligation information. Accounting activities will not accept, process, or maintain
    obligation documentation that fails to satisfy applicable statutory and regulatory
    guidance. In no instance will the accounting activity fail to record a valid obligation.

(3) Whether appropriations are legally available for obligation and expenditure depends
    upon the following:

    (a) The purpose of the obligation must be one for which the appropriation was made.

    (b) The obligation must be incurred within the time that the appropriation was made
        available for new obligations.

    (c) The obligation may not exceed the amount appropriated by stature, nor may it be
        incurred before the appropriation becomes law, unless otherwise provided by law.

(4) A Continuing Resolution Authority (CRA) is an interim appropriation, enacted to provide
    authority for specific ongoing activities in the event that regular appropriations have not
    been enacted by the beginning of the fiscal year or the expiration of the previous CRA.
    A CRA has a fixed life and provides the authority necessary to allow operations to
    continue in the absence of appropriations. Unless the Office of the Secretary of
    Defense (OSD) issues other instructions, a CRA provides for the following:

    (a) Rate of execution generally will not exceed the amount contained in the President’s
        budget, the previous year’s rate of execution, or the amount recommended by the
        House and Senate Appropriations Committees, whichever is the lowest or most
        restrictive.

    (b) No new starts may be initiated. Operations & Maintenance, Army (OMA)-funded
        minor construction is not considered a new start.

    (c) No increase in scope of ongoing programs is permitted.

    (d) No new multiyear procurements are permitted.

(5) In the event that neither an Appropriation Act nor a CRA has been enacted, a funding
    gap exists. Obligations may continue during the new fiscal year for minimum mission
    essential business. Prior year unexpired funds or multi-year appropriations are not
    impacted by the absence of a new appropriation or a CRA. Revolving funds are also
    not impaired.




                                        8
CHECK ON LEARNING: Conduct a check on learning and summarize the ELO.

Q: What is Obligation Management?
A: The systemic process of managing obligations by accountants and resource managers using
   all available resources.

Q: When does the execution phase of the PPBES begin?
A: When funding authorization documents are received at the installation.

SUMMARY:

         During this learning activity, you learned:

         (1)   The definition of obligation management.

         (2)   The primary responsibilities of service activity or fund managers, and accountants for
               managing obligations.




                                                       9
B.      ENABLING LEARNING OBJECTIVE

         ACTION:            Identify the stages of funding and the key agencies involved in the
                            funding process.

         CONDITIONS:        In a classroom environment, given an interim module examination
                            without notes.

         STANDARDS:         Correctly answer 70% of questions asked in an end-of-course
                            examination in accordance with instructional material presented.

1.      Learning Step / Activity 1.Flow of funds.
                Method of Instruction: Conference
          Instructor to Student Ratio: 1:21
                  Time of Instruction: 1 hour
                               Media: Slides
        a. Overview of the funds distribution process. Congress appropriates funds, which are
           statutory authorities to incur obligations and make payments out of the U.S. Treasury for
           specified purposes. Apportionments are distributions made by the Office of Management &
           Budget (OMB). Apportionments make amounts available based on time periods, programs,
           activities, objects, or combinations thereof.

NOTE:     Show Slide #8 Fund Flow Process


NOTE:     Refer to the slide as you tell the students:

        b. Appropriations are the statutory authorities to incur obligations and make payments from
           the U. S. Treasury for specified purposes.

            (1) Congress is supposed to pass 13 major appropriations bills annually that provide the
                budget authority to operate the entire government. When the President signs an
                appropriations bill it becomes an act or law. This is the most common means of
                providing budget authority to Federal agencies. Budget authority has the following
                characteristics:

                (a) Period of Availability. Budget authority may be made available for obligation for
                    varying periods.

                    i     One-Year (Annual) Authority. Budget authority that is available for obligation
                          only during a specified fiscal year and expires at the end of that period.

                    ii    Multiple-Year Authority. Budget authority that is available for obligation for a
                          specified period of time in excess of one fiscal year.

                    iii   No-Year Authority. Budget authority that remains available for obligation for
                          an indefinite period of time.

                (b) Determination of Amount. Budget authority may be granted for varying amounts.

                    i     Definite Authority is authority 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.



                                                   10
                       ii    Indefinite Authority is 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.

              (2) The Army receives most of its funds through two annual Appropriation Acts:

                  (a) The Department of Defense Appropriation Act (funding for military Personnel;
                      Operation and Maintenance (O&M); Procurement, and Research; Development;
                      Test; and Evaluation (RDT&E) and

                  (b) The Military Construction Appropriation Act (funding for Military Construction and
                      Family Housing).

NOTE:        Show Slide #9 Funding Flow


NOTE:        Refer to the slide as you tell the students:

        c.    The Program Budget Accounting System (PBAS) is the automated system used by the
              Army and other DoD financial managers, to control the distribution of DoD funding from
              inception through its period of availability. The system’s process for recording data and the
              actual flow of documentation are basically the same. PBAS provides official funding data to
              installation and department level accounting systems. At this level, some of the system
              fields of input would be the requested amounts from the President’s Budget, amounts
              approved by Congress and amounts that are available to be released. PBAS also is used
              to control the realignment, or reprogramming of funding within the statutory constraints
              when funding is needed for purposes other than originally appropriated. PBAS provides
              customers with interactive/real time processing, online access via Internet Web browsers
              for more than 2,100 users from over 1,100 sites worldwide. PBAS is used by the DoD,
              Defense Agencies, Army, Navy and Air Force financial managers to distribute funding
              appropriated for the use by the DoD through the various DoD fiscal networks to responsible
              commanders, where the funding is used to achieve assigned missions.

NOTE:        Show Slide #10 - Fund Flow Process


NOTE:        Refer to the slide as you tell the students:

        d. Allocations from the Office of the Under Secretary of Defense (OUSD).

              (1) The OUSD (Comptroller) or designee shall make allocations of apportioned amounts, in
                  writing, to heads of DoD Components. The secretary of a Military Department, or
                  designee, shall make further allocations of apportioned amounts, in writing, to the
                  heads of operating agencies.

                  (a) The original signed document or an authenticated copy bearing a signature or an
                      electronic equivalent of a signature is forwarded to the recipient of the allocation.
                      This does not preclude the use of an automated system to communicate and record
                      fund subdivisions as long as a confirmation copy bearing an authenticated
                      signature or an electronic equivalent of a signature is available to the recipient via
                      the automated system.

                  (b) Amounts allocated may be sub-allocated to major subordinate operating
                      commands.




                                                      11
           (2) Allocations shall not exceed the amount available for use for each apportionment
               period.

           (3) The use of an electronically reproduced equivalent of an original signature is
               considered an acceptable implementation of the requirement for a document containing
               an authenticated signature. However, in accomplishing electronic transmission of fund
               authorizations through linked computer systems, internal controls for electronically
               transmitted allocations and sub-allocations shall have the following minimum
               characteristics:

               (a) Fund control systems shall provide validation of fund authorities by use of access
                   codes and lockout techniques.

               (b) One set of access codes shall be used to issue fund authorizations.

               (c) Other controlled access codes shall be used to process a signature section of fund
                   control documents for transmissions to funded activities.

               (d) The authentication, signature element, and symbol shall be included as part of
                   electronically produced funding documents.

           (4) Anticipated transfers or other items of anticipated receipts may be allocated only when
               realized.

           (5) Allocations, sub-allocations, or portions of an allocation, that are not required to be
               subdivided further may be treated and recorded as allotments.

           (6) DoD Components do not authorize or incur an obligation, or make a disbursement
               against apportioned anticipated transfer authorizations until they are received. Such
               actions must be delayed until the completed Standard Form (SF) 1151, Non-
               expenditure Transfer Authorization, is received and the resources realized.

           (7) DoD Components do not authorize or incur an obligation or make a disbursement
               against apportioned anticipated reimbursements. Such actions must be delayed until
               the applicable customer order is received in the case of the Federal Government
               activities and funds are collected in the case of other customers.

NOTE:     Show Slide #11 Fund Flow from DA.


NOTE:     Refer to the slide as you tell the students:

        e. Allocations from DA.

           (1) Allocations/Allowances are subdivisions of funds made by Headquarters, Department of
               the Army (HQDA) to Special Operating Agencies and General Operating Agencies at
               the Major Army Commands (MACOMs) level. DA Form 1323, Funding Authorization
               Document, is used for the formal allocation of funds. The Funding Authorization
               Document (FAD) identifies major programs and subprograms, administrative and
               statutory restrictions, and management date on a single document.

           (2) Fund controls for allowances are established in PBAS based on approved
               apportionments, OSD program/fund releases, and Treasury Warrants. After these
               authorities are loaded in PBAS, HQDA appropriation/fund managers and sponsors will
               initiate Funding Allowance System (FAS)/FAD to MACOMs. In addition, the Fund



                                                   12
                  Control Officer, in coordination with appropriation/fund managers and sponsors will
                  establish administrative and statutory controls within appropriations. These, within
                  appropriation, controls are generally included on the FAS/FAD along with footnotes
                  providing detailed explanations of statutory or administrative limitations. The completed
                  FAS/FAD is automatically approved in PBAS.

NOTE:        Show Slide #12 Allotments.


NOTE:        Refer to the slide as you tell the students:

        f.    Allotments.

              (1) The recipients of allocations and sub-allocations, or their designees, make allotments in
                  specific amounts to the heads of installations or organizational units of DoD
                  Components, as required. The total of the amounts allotted are not to exceed the
                  amount of the allocation available for each period.

              (2) The recipients of allotments may make sub-allotments to the heads of other
                  organizational units, including those of other DoD Components, as required. The total
                  of the amounts sub-allotted is not to exceed the amount of the allotment available for
                  use for each period.

              (3) Allotments and sub-allotments are made in writing and the recipient’s copy either is
                  signed by the fund-issuing authority or is an authenticated copy bearing an authorized
                  authenticated signature or an electronic equivalent of a signature. The document
                  contains at least the following basic information:

                  (a) Name or title of the allottee.

                  (b) Amount of the allotment and the period of availability.

                  (c) Legal restrictions or limitations on the obligation and disbursement of the allotted
                      funds.

                  (d) The amount of anticipated reimbursements, specified to the organizational level
                      responsible for receiving the reimbursable orders.

              (4) General Operating Agencies (GOAs) may distribute funds, informally as allowances or
                  formally as allotments. Each allowance or allotment must be designated in PBAS by
                  establishing Allotment Serial Numbers (ASNs) for activities.

                  (a) Allowances are informal distributions of funds made by GOAs and Special
                       Operating Agencies (SOAs) to installation commanders or activities through use of
                       targets, which may be restricted to execute specific missions. Incurring obligations
                       and disbursements in excess of this target will not result in a statutory violation if
                       the OA has sufficient funds available in its allocation or sub allocation. HQDA Form
                       1323 is used to distribute allowances under FAS in PBAS. This document is
                       identical to the FAD except for its name and a footnote explaining the implications if
                       the target is exceeded. Activities receiving allowances must abide by all
                       administrative procedures established by the activity, which issued the FAS
                       document. Once funds are issued as allowances, they must remain as informal
                       distributions to all activities in the funding chain.

                       i     Designated SOA officials:



                                                       13
     (i) Serve as the head of an organizational unit within a MACOM
         headquarters, HQDA staff element, or other agency/command.

     (ii) Receive allowances and funding and/or cash authority from the HQDA
          Fund Control Officer or a defense agency.

     (iii) Notify subordinate GOAs of all administrative and statutory restrictions
           received from HQDA.

     (iv) Determine whether allocations received are informally controlled
          (allowance) or formally subdivided (sub allocation) to subordinate GOAs.

     (v) Issue allowances/sub allocations to subordinate GOAs.

     (vi) Issue initial quarterly allowances or sub allocations seven calendar days
          before the start of each quarter. Make the allowances or sub allocations
          effective on the first day of the quarter.

     (vii) Adhere to fund control requirements.

     (viii) Initiate requests for unexpired funds subject to the one percent limitation,
           based upon valid requests received from subordinate activities. Include
           information required by appropriation/fund managers and sponsors.

ii   Designated GOA officials:

     (i) Serve as the head of an organizational unit within a MACOM
         headquarters, HQDA staff element, or other agency or command.

     (ii) Receive funds by allowance or allotment from the HQDA Fund Control
          Officer or a defense agency, or by allowance and sub allocation from an
          SOA.

     (iii) Receive cash authority from an SOA or the HQDA Fund Control Officer.

     (iv) Inform subordinate activities about all administrative and statutory
          restrictions received from HQDA or SOAs.

     (v) Determine whether the allocation or sub allocation received will be
         informally controlled (allowance), formally subdivided (allotment), or
         maintained by Centrally Managed Allotments (CMAs). See paragraph
         040301.B this regulation and the DoDFMR, Volume 14, Appendix A for
         information regarding CMAs.

     (vi) Initiate requests for customer funding documents from the Order Control
          Module of PBAS (for GOAs functioning as Customer Order Control
          Points).

     (vii) Initiate requests for additional funding, and issue allowances and
           allotments to subordinate activities. This includes requests for unexpired
           funds subject to the one percent limitation based upon valid requests
           received from subordinate activities. Include information required by
           appropriation/fund managers and sponsors.




                              14
              (viii) Issue funding documents at the highest level practicable with only one
                    allowance or allotment per appropriation, per activity.

              (ix) Account for allocations and sub-allocations received that will not be
                   further subdivided as allotments (including CMAs).

              (x) Issue initial quarterly allowances or allotments five calendar days before
                  the start of each quarter. Make the allowances or allotments effective on
                  the first day of the quarter.

              (xi) Establish procedures for administrative control of funds issued to
                   subordinate activities.

              (xii) Administer CMAs and ensure that they remain solvent.

              (xiii) Adhere to fund control requirements.

              (xiv) Determine whether centralized, decentralized, or a hybrid combination of
                   fund control procedures will be used.

              (xv) Perform commitment accounting.

              (xvi) Adhere to fund control requirements.

    (b) Allotments are formal subdivisions of funds made by GOAs to installation
        commanders or activities, which may be restricted to execute specific missions. A
        statutory violation occurs if obligations or disbursements exceed the amount of the
        allotment. Allotments are issued on DA Form 1323 through PBAS.

    (c) The level and intensity of fund controls remain the same whether funds are
        distributed formally or informally. If allowances are exceeded, appropriate actions
        must be taken to resolve the funding problem and prevent an anti deficiency
        violation from occurring. This includes reprogramming, recoveries (formerly de-
        obligations) scrubs, reviewing order performance, modifying existing
        contracts/orders, and requesting additional funding through normal budgetary
        channels. Any resultant anti deficiency violation may name the individuals
        responsible for exceeding their allowances as being responsible for the violation.

(5) In emergency circumstances, it may not be possible to provide a formal allotment or
    sub allotment document before incurring obligations. Under such emergency
    conditions, it may be necessary to use expedited means of communication pending
    formal confirmation.

(6) The head of an operating agency, which has specific written approval of the Head of a
    DoD Component, may establish centrally-managed allotments. These allotments are
    established only when it is impractical to administer decentralized allotments under
    normal operating procedures.

(7) Internal Fund Distribution. All subsequent distributions made by recipients of
    FAS/FADs are informal and outside of PBAS control. This includes targets or ceilings
    to installation activity directors, satellites, and other activities. Document and control of
    these distributions uses local procedures.




                                        15
CHECK ON LEARNING: Conduct a check on learning and summarize the ELO.

Q. What is the automated system used by the Army and other DoD financial managers to control the
   distribution of DoD funding called?
A. The Program Budget Accounting System (PBAS).

Q. What are allotments?
A. Allotments are formal subdivisions of funds made by GOAs to installation commanders or
   activities, which may be restricted to execute specific missions.

SUMMARY:

         During this learning activity, you learned:

         (1)   The various stages of the funding process and who the key players are throughout the
               funding process.

         (2)   That the recipients of allocations and sub-allocations or their designees, make allotments
               in specific amounts to the heads of installations or organizational units of DoD
               components. The total of the amounts allotted are not to exceed the amount of the
               allocations available for any given period. Exceeding the given amounts could trigger an
               Anti-deficiency Act violation.




                                                       16
C.      ENABLING LEARNING OBJECTIVE

         ACTION:            Process an obligation or commitment document.

         CONDITIONS:        In a classroom environment, given an interim module examination
                            without notes.

         STANDARDS:         Correctly answer 70% of questions asked in an end-of-course
                            examination in accordance with instructional material presented.

1.      Learning Step / Activity 1.Processing an obligation or commitment document.
                Method of Instruction: Conference
          Instructor to Student Ratio: 1:21
                  Time of Instruction: 1 hour
                               Media: Slides

        a. General. Before we discuss the processing of an obligation or commitment document, we
           need to look at the stages of accounting and how each of these stages are integral in the
           process.

NOTE:     Show Slide #13 Stages of Accounting.


NOTE:     Refer to the slide as you tell the students:

           (1) Authority Received is the authorization to incur obligations. Congress appropriates,
               OMB apportions, and DoD and agencies provide allotments or sub-allotments funds to
               their subordinates. The normal method of transmittal/receipt of funds is via the Funding
               allowance/authorization document. Funding authority is further broken down into Direct
               Obligation Authority, Funded Reimbursement Authority, and Automatic Reimbursement
               Authority.

           (2) Commitment is the administrative reservations of funds. Fund certification takes place
               in this stage. A bonafide need is required to purchase items; this is done by processing
               a DA 3953 Purchase Request & Commitment (PR&C) or stockfund requisition. The DA
               3953 is initiated by a unit supply person who processes it through the funds manager
               for that unit. The funds manager must ensure that sufficient funds are available in the
               specific category for which the request is being made. This is also the time that the
               specific line of accounting is established for this requisition.

           (3) Obligation is the legal reservation of funds. Liability to the government is established
               here. Obligations occur when documents are signed, not when the information is
               entered into the accounting system. An example is a contract - DD 1155. The
               obligation phase involves the resource management office and the
               contracting/procurement office as they take the DA 3953 data and prepare a
               purchasing/contracting document. Once a vendor has been identified and the purchase
               order or contract signed, liability to the government has been established.

           (4) Accrued Expenditure/Expense is the term used for the credits entered into the
               budgetary accounts to recognize liabilities incurred for:

               (a) Services performed by employees, contractors, other Government accounting
                   entities, vendors, carriers, grantees, lessors, etc.;



                                                   17
               (b) Goods and other tangible property received; and

               (c) Items such as annuities or insurance claims for which no current service is required.
                   Accrued expenditures are categorized as either paid or unpaid. This occurs upon
                   the actual receipt of goods and/or services at the unit level is normally
                   acknowledged on a DD Form 250, Receiving/Acceptance Report. Sometimes
                   goods are received as partial shipments, and this will be evident on the DD Form
                   250. A partial shipment has an impact on the accrued expenditure as well as the
                   obligation amount. These shipments must be monitored to ensure the remainder of
                   the obligation is adjusted if the goods do not arrive. Occurrences of this nature are
                   what make obligation management more than just incurring the obligation. The key
                   players in this phase include the receiving unit representative (DD 250) and the
                   supporting accounting office to record this as an accrued expenditure unpaid.

           (5) Disbursement is the payment of the government’s legal liability. Payment is made after
               certification for payment is made by the contract/vendor pay office in DFAS. This
               certification is performed upon their receipt of an invoice from the vendor, the
               receiving/acceptance report from the receiving unit , the contract, and prevalidation with
               accounting to ensure that sufficient fund have be obligated to cover the cost. A
               disbursement liquidates an obligation, and is then posted in the accounting system as
               an accrued expenditure paid.

        b. Processing an Obligation:

           (1) The unit or organization supply personnel will process a DA 3953, Purchase Request &
               Commitment, or a stockfund requisition.

NOTE:      Refer to Student Handouts #1 and 2: DA Form 3953, Purchase Request and Commitment

               (a) When using the DA Form 3953 to order supplies or services, the unit personnel
                   must ensure that it is completed correctly. Some of the more critical areas of the
                   form are the proper addresses of who is ordering and whom it must go through for
                   approval. In block 2, the unit establishes the requisition number based on the unit
                   log. This number will follow the purchase of the supplies or services from order to
                   final payment and posting to the accounting system. It is the Standard Document
                   Number (SDN) in the line of accounting. Blocks 14, 15, 16, 17, and 18 establish
                   exactly what the unit is ordering, the quantity, and the estimated total cost. Blocks
                   19, 20, 21, and 22 are for fund certification. This is where the appropriate line of
                   accounting is established, and the certifying officer attest that sufficient funds are
                   available to commit for this purchase. The upper part of the backside of the form is
                   designed for maintaining a record of obligations incurred, and determining the
                   balance of the un-obligated commitment when partial obligations are involved. The
                   bottom part is designed for the contracting officer to record procurement data.

               (b) The DA Form 3953 is normally processed through the resource management office
                   where the availability of funds is again verified and passed on to the
                   procurement/contracting personnel. It is at this stage in the process that we change
                   from commitment (administrative reservation of funds) to obligation. Once a
                   contract or procurement document has been executed and signed by both a
                   vendor/supplier and the contracting officer that we now have obligation (legal
                   reservation of funds). Some of the more common forms use are:

                   i     DA 1155, Order for Supply or Services

                   ii    SF 1449, Solicitation/Contract/Order for Commercial Items



                                                 18
        iii    SF 44, Purchase Order-Invoice-Voucher

        iv     DD 2406, Miscellaneous Obligation Document

        v      DD 1610, Request and Authorization for TDY Travel of DoD Personal

        vi     SF 1164, Claim for Reimbursement for Expenditures on Official Business

        vii    SF 1034, Public Voucher for Purchases and Services Other Than Personal

        viii   SF 1169, U.S. Government Transportation Request

        ix     SF 33, Solicitation, Offer, and Award

        x      SF 23, Construction Contracts

        xi     DD 1556, Request, Authorization, Agreement, Certification of Training and
               Reimbursement.

(2) Detailed instructions on processing of forms for commitments and obligations are found
    in the DoDFMR, Volume 3, Chapter 8, and in DFAS-IN Regulation 37-1, Chapter 8.

(3) There are three methods of recording obligations: on-line input, electronic interface, and
    hardcopy documentation. The Database Commitment Accounting System (dbCAS) is a
    PC-based commitment ledger system for recording and managing Fiscal Year
    committed funds and funding data. STANFINS and dbCAS exchange obligation
    information by uploading the Obligation Candidate File. Serviced activities that do not
    have access to automated obligation systems have to send required obligating
    documents to the servicing accounting activity immediately after the documents are
    completed.

(4) When obligating officials make direct input to automated accounting files, the
    transactions are entered not later than the following day, or if at month-end, by the
    established cut off date.

(5) At the same time that obligations are sent to the supporting accounting service, these
    same documents are sent by Procurement/Contracting Office to the supporting Vendor
    Pay Office for their use in certifying payments.




                                       19
CHECK ON LEARNING: Conduct a check on learning and summarize the ELO.

Q. What is the stage called when we commit funds?
A. It is the administrative reservation of funds.

Q. What is the stage called when we obligate funds?
A. It is the legal reservation of funds .

SUMMARY:

         During this learning activity, you learned:

         (1)   The various stages of accounting and how they relate to the processing of commitment
               and obligation documents.

         (2)   How a commitment document flow in the system to initiate an obligation document.




                                                       20
D.       ENABLING LEARNING OBJECTIVE

          ACTION:            Calculate key obligation rates.

          CONDITIONS:        In a classroom environment, given an interim module examination
                             without notes.

          STANDARDS:         Correctly answer 70% of questions asked in an end-of-course
                             examination in accordance with instructional material presented.

1.       Learning Step / Activity 1. Calculating key obligation rates.
                 Method of Instruction: Lecture
           Instructor to Student Ratio: 1:21
                   Time of Instruction: 1 hr
                                Media: Slides

NOTE:      Show Slide #14 - Obligation Rates.


NOTE:      Refer to the slide as you tell the students:

         a. Key obligation rate calculation.

             (1) Obligation rates can be computed as daily, weekly, monthly, quarterly, and end of year.
                 This provide fund managers with a tool to track the expenditure of their funds and assist
                 them in the decision making process on funds management.

             (2) Past emphasis has focused on obligation rates at fiscal year-end. Expand this
                 emphasis to evaluate true execution performance which is more meaningful in
                 subsequent fiscal years when disbursements are recorded.

             (3) The true obligation rate is defined as the obligation rate at the end of the appropriation’s
                 life (end of the expired state). This is also known as the Closed State.
                 (a) Final Obligation statistics for the appropriation can’t be determined until five years
                                                                   st
                     later when the appropriation closes. The 1 year (budget year) the appropriation is
                     available for obligations, disbursements, and adjustments.

                 (b) Since the final statistics are not determined for five years, the budget year doesn’t
                     give a true picture of the obligation rate. The final obligation statistics measure the
                     true performance of fund managers and discrepancies are not necessarily the fund
                     manager’s fault. The statistics can’t be used in violation of the Anti-deficiency Act.


NOTE:    Refer to Student Handouts # 3: Computing Obligation Rates.


NOTE:    Refer to the following formula for computing obligation rates.

                           ORIGINAL        CUMULATIVE
        OBLIGATION RATE = OBLIGATIONS + ADJUSTMENTS
                                     INITIAL FUNDING




                                                    21
          b. This formula is used when computing obligation rates as daily, weekly, monthly, quarterly,
             end of year or true (end of life cycle of the fund).

NOTE:     Refer to the table matrix when discussing setting up for the frequency type rate.

          c.   Use the following illustration from Student Handout #3 on computing obligation rates.

 FISCAL         TOTAL          OBLIGATION           CUMULATIVE               FORMULA           OBLIGATION
  YEAR         FUNDING                             ADJUSTMENTS                                   RATE
  FY00           1,000              999                 0                      999 + 0           99.9%
                                                                                1,000

  FY01           1,000              999              -99ADJ (99)              999+(99)            90.0%
                                                                               1,000

  FY02           1,000              999               +50ADJ                   999 +(199)         80.0%
                                                    -150 ADJ (199)             1,000
  FY03           1,000              999              00 ADJ (199)              999 +(199)         80.0%
                                                                               1,000

  FY04           1,000              999              00 ADJ (199)              999 +(199)         80.0%
                                                                               1,000

  FY05           1,000              999             -100 ADJ (299)             999 +(299)         70.0%
                                                                               1,000

  FY06         CLOSED                                                     TRUE OBL RTE            70.0%

The 70% represents the true obligation rate.

          d. Obligation Adjustments.

               (1) Analyze current year obligation adjustments created by final receipt and expenditure
                   processing. This will identify and correct obligation estimation problems and allow
                   reuse of resources prior to expiration. This analysis should be at the program director
                   level, by type of obligation, and focus on differences between obligation estimates and
                   actual receipts and disbursements. Accountants suggest ways to improve obligation
                   estimates based on these analyses.
               (2) The reason for poor estimates is due to individuals preparing the estimate being
                   improperly trained. The indicators of improper training are as follows:

               (3) Consistent difference in estimated obligations and actual obligations.

               (4) Duplicate, unusual or questionable obligations.

          e. Liquidation Performance Ratio.

NOTE:     Refer to Student Handouts # 4: Computing Obligation Rates (Cont)




                                                     22
             (1) The liquidation performance ratio is the relationship of disbursements to obligations.
                 The Resource Manager should strive to maximize disbursements during the
                 appropriations unexpired state.

NOTE:   Refer to the following illustration from Student Handout #4.



                                                      FY DISBURSEMENTS
               LIQUIDATION PERFORMANCE =                 FY OBLIGATIONS


                                                                                           GOAL
OBLIGATION              DISBURSEMENT                 POTENTIAL
LIQUIDATION
Activity 1                                           RECOVERIES
PERFORMANCE
FY 00      999      -          333          =        666     333/999                                33.3%
Activity 2
FY 00      999      -          820          =         179    820/999                              82.0%
                                                            We have disbursed 82% of obligations.

             (2) The liquidation performance ratio is the relationship of disbursements to obligations.
                 The Resource Manager should strive to maximize disbursements during the
                 appropriations unexpired state.
             (3) Seek to maximize the liquidation performance in the current year because the higher it
                 is in the current year, the lower your de-obligations would be in the out-years. If
                 liquidation performance is low then the potential for recoveries is high and could lead to
                 a lower True Obligation Rate.

             (4) There is no standard liquidation rate. It all depends on the mission of the activity and
                 their obligation patterns.

        f.   Plan to Actual. Compare and evaluate actual program director and command performance
             with plans and goals. Compare one program director’s performance to the average
             performance of all other program directors, to the program directors performance of
             previous years, and to the total resources controlled by the program director and the
             installation at the time of account expiration.

        g. Abnormal Conditions. Includes ensuring data file integrity by identifying and correcting
           abnormal transaction balances such as credit obligations, credit accrued expenditures,
           credit disbursements, unusual or questionable entries, and or duplicate obligations.

        h. Timeliness of transaction events. Analyze the timeliness of transactions events (i.e.,
           anticipated delivery and liquidation dates.) Conditions identified outside of the established
           time parameters may be accurate and valid; however, aged records may require additional
           managerial follow-up action. These overdue events require a monthly review by
           accounting. Examples of these include:

             (1) Temporary Miscellaneous Obligation Documents (MODs) over 30 days old.

             (2) Undelivered orders older than the delivery due date.

             (3) Accounts payable over 90 days old.




                                                    23
               (4) Prepaid inventory over 90 days old.

               (5) Transaction suspended over 30 days.

               (6) Unliquidated obligations over 90 days old




2.       Learning Step / Activity 2. Complete PE.
                 Method of Instruction:    Practical Exercise (Performance)
           Instructor to Student Ratio:    1:21
                   Time of Instruction:    1 hr
                                Media:

         a. Provide each student with a copy of PE #1 from Appendix C.

         b. Read instructions to the students.



CHECK ON LEARNING: Conduct a check on learning and summarize the ELO.

Q. What is the definition of the true obligation rate?
A. The true obligation rate is the obligation rate at the end of the appropriation’s life (end of the
   expired state).

Q. What does the liquidation performance ratio measure?
A. The liquidation performance measures the relationship of disbursements to obligations. The
   objective is to have a HIGH RATIO.

Q. What is the formula for computing obligation rates?
A. The formula is to take the original obligations plus or minus cumulative adjustments to date
   divided by the initial funding total.



SUMMARY:

         During this learning activity, you learned:

         (1)    That obligation rates can be computed on a daily, weekly, monthly, quarterly, year-end,
                and true rate. The true rate is computed at the end of the funds life cycle or expired state.
         (2)    How to calculate key obligation rates and perform an analysis of the results.




                                                       24
E.       ENABLING LEARNING OBJECTIVE

            ACTION:            Interpret data on STANFINS funding reports to provide information
                               on fund usage.

            CONDITIONS:        In a classroom environment, given an interim module examination
                               without notes.

            STANDARDS:         Correctly answer 70% of questions asked in an end-of-course
                               examination in accordance with instructional material presented.

1.       Learning Step / Activity 1. Interpreting data on STANFINS funding reports to provide
         information on fund usage.
                 Method of Instruction: Conference
           Instructor to Student Ratio: 1:21
                   Time of Instruction: 45 mins
                                Media: Slides
NOTE:        Show Slide #15 - STANFINS Reports.


NOTE:        Refer to the slide as you tell the students:

         a. Financial reports generated by STANFINS are communication tools used between
            accountants and resource managers. Four of the more commonly used reports are:

              (1) Fund Control and Status Report - (FC & SR).

              (2) Detailed Obligation Report - (DOR).

              (3) Weekly Cost by Approved Operating Budget - (AOB).

              (4) Non-Stock Fund Orders and Payables - (NSFOP).

NOTE:      Refer to the following illustration. Students should refer to the illustration in their Student
           Handout #4.

     REPORT       AUTH. REC’D         COMMIT           OBLIG.           AE/E          DISB.

1. FC & SR          XXX                                 XXX

2. DOR                                   XXX**           XXX

3. AOB                                                      XXX         XXX
4. NSFOP                                                 XXX             XXX          XXX



NOTE:        Show Slide #16 Fund Control and Status Report.


NOTE:        Refer to the slide as you tell the students:




                                                       25
        b. Fund Control and Status Report (FCSR) provides obligation data by Army Management
           Structure (AMS) code for all current year (unexpired) appropriations. Budget and program
           directors use this report as the primary tool for managing obligations on a day-to-day basis.
           Column three should always be less than or equal to column five. Column four should
           never be less than zero.

NOTE:        Show Slide #17 Detailed Obligation Report.


NOTE:        Refer to the slide as you tell the students:

        c.    The detailed obligation report is a weekly report used to reconcile commitment records to
              automated listings. This weekly report shows all obligations processed since the last report
              by Element of Resource (EOR) within each Account Processing Code (APC). Financial
              managers should use this report to reconcile their commitment records to automated
              listings. This information is in terms of obligations (not expenses) which may cause
              confusion to activities who record obligations separately from expenses. The totals on this
              report can also be found on the Fund Control and Status Report in columns one and two.

NOTE:        Show Slide #18 Weekly Cost by AOB.


NOTE:        Refer to the slide as you tell the students:

        d. The Weekly Cost by Annual Operating Budget (AOB) report is one of the primary tools used
           by program directors and activity chiefs in the control of their financial resources. This
           report helps in the maintenance of obligation and expense targets and provides information
           to resource managers on the status of actual obligations and expenses within their area of
           responsibility. The expense targets are not meant to be formal sub-divisions of funds.
           Thus, exceeding a target may not be a violation of Title 31, USC 1517. However, it could
           still contribute to an over obligation of installation funds. This listing provides the means for
           each program director to monitor and make better use of available financial resources.

NOTE:        Show Slide #19 Non-Stock Fund Orders and Payables.


NOTE:        Refer to the slide as you tell the students:

        e. The Non-Stock Fund Orders and Payables (NSFOP) AVK 602 Report is the primary tool
           used to accomplish joint reconciliation and review of unliquidated obligations. This report,
           now in the “as required” cycle, shows the cumulative status, by document reference
           number, of nonstick fund open transactions as of the report date. An open transaction is
           one in which the obligation, accrual, and disbursement are not of equal value. Use this
           listing to verify unliquidated obligations, review erroneous or questionable entries such as
           duplicate input, mismatched Document Reference Numbers (DRN’s), or old transactions.
           The NSFOP is the primary tool used to accomplish joint reconciliation and reviews of
           Unliquidated obligations between the DFAS field site and activities as required by DFAS-IN
           Regulation 37-1. An abnormal condition is defined by seeing any number that is greater
           than a number to its immediate left.




                                                      26
2.        Learning Step / Activity 2. Complete PE.
                  Method of Instruction:   Practical Exercise (Performance)
            Instructor to Student Ratio:   1:21
                    Time of Instruction:   1 hr 15 mins
                                 Media:    slides

          a. Provide each student with a copy of PE #2 from Appendix C.

          b. Read instructions to the students.




CHECK ON LEARNING: Conduct a check on learning and summarize the ELO.

Q    What STANFINS report provides a weekly data used to reconcile commitment records to automated
     listings?
A    The Detailed Obligation Report (DOR).

Q. Which report is the primary tool used to accomplish joint reconciliation and review of Unliquidated
   Obligation?
A. The Non-Stock Fund Orders and Payables (NSFOP) AVK 602 report.

Q. Which report provides obligation data by Army Management Structure (AMS) code?
A. The Fund Control and Status Report.
SUMMARY:

          During this learning activity, you learned:

              (1) How to interpret data on STANFINS funding reports.

              (2) How to provide information on fund usage.




                                                        27
F. ENABLING LEARNING OBJECTIVE

             ACTION:           Describe the joint review and reconciliation process

             CONDITIONS:       In a classroom environment, given an interim module examination
                               without notes.

             STANDARDS:        Correctly answer 70% of questions asked in an end-of-course
                               examination in accordance with instructional material presented.

1.      Learning Step / Activity 1. The Joint Review and Reconciliation Process.
                Method of Instruction: Conference
          Instructor to Student Ratio: 1:21
                  Time of Instruction: 1 hr
                               Media: Slides



NOTE:        Show Slide #20 – The Joint Review


NOTE:        Refer to the slide as you tell the students:

        a. The joint review is an ongoing purification process that assures the financial community that
           the unit is using resources in the most efficient manner. The joint review is similar to the
           preventive maintenance we conduct on vehicles. Operators conduct their checks and
           services, find problems, and correct them. The joint review accomplishes the same tasks.

        b. An effective joint review may yield resources available for reprogramming, detect funding
           shortages, or uncover a major procedural defect. The joint review also assists in the
           reconciliation process by validating the accuracy of documents.

NOTE:        Show Slide #21 – The Joint Review Process


NOTE:        Refer to the slide as you tell the students:

        c.     The Joint Review Process is required by law and regulation. Accountants and budget
               personnel must meet to review ledgers for accuracy and validity and to resolve problems.
               As a result, DFAS-IN Regulation 37-1, Finance and Accounting Policy Implementation,
               requires a formal joint review and reconciliation of un-liquidated obligations and open
               reimbursement transactions three times per fiscal year. The DFAS OPLOC or field site
               conducts the review with the unit comptroller.

        d. Formal reviews are conducted once during each four-month period, with Phase I by 31
           January, Phase II by 31 May, and Phase III by 30 September. Instead of 30 September,
           units often accomplish the Phase III review by 15 August. This gives the unit time to correct
           the deficiencies prior to the year-end closing.

        e. The comptroller should conduct informal reviews continuously.

        f.     The Non Stock Fund Orders and Payables (NSFOP) report, a STANFINS report, is the
               primary management tool reviewers use to identify problems.



                                                      28
        g. Joint reviews ensure:

              (1) Validity. Reviewers validate that obligations relate to true requirements.

              (2) Accuracy. Reviewers make sure data entries are correct.

              (3) Documentation. Documentation helps validate obligations. An obligation should result
                  from a document proving a requirement exists.

              (4) Reconciliation. Reviewers resolve discrepancies they find in open obligations. For
                  example, data may contain errors, omissions, or inconsistencies. The reviewers find
                  solutions to problems like these.

NOTE:        Show Slide #22 – Joint Review Procedures (Preparatory Activities)


NOTE:        Refer to the slide as you tell the students:

        h. There are several preparatory activities that happen in preparation for a joint review.

              (1) The supporting Finance and Accounting Office (FAO) schedules your unit’s joint
                  reviews for the entire year one year in advance.

              (2) Plan to conduct a 100 percent joint review of your records. You may not have to
                  perform a 100 percent joint review if a statistical sample of your records indicates that
                  they are accurate. However, if they are not accurate, you must allow time for a 100
                  percent review. A 100 percent joint review ensures that the reviewers make all
                  necessary corrections to the records.

              (3) One month before the scheduled review, the Finance and Accounting Officer (FAO)
                  sends the comptroller two copies of the General Fund Delinquent Obligations and
                  General Fund Liquidation Indicator listings.

              (4) The comptroller annotates whether delinquent obligations are still valid or not and
                  justifies why.

              (5) On a separate sheet, the comptroller lists the delinquent obligations that he/she cannot
                  justify.

              (6) Two weeks later, which is two weeks before the scheduled review, the comptroller
                  sends the reports back to the FAO.

              (7) The FAO processes the annotated adjustments.

NOTE:        Show Slide #23 – Joint Review Procedures (Conducting the Review)


NOTE:        Refer to the slide as you tell the students:

        i.    Conducting the Joint Review.




                                                      29
           (1) The most recent NSFOP report serves as the main document for conducting the review.
               It contains information about adjustments made during the preparation for the joint
               review.

           (2) The comptroller should bring to the review any pertinent documents supporting problem
               obligations.

           (3) Reviewers analyze, reconcile, and adjust un-liquidated obligations, concentrating on
               exceptions such as delinquent obligations.

           (4) They refer to actual obligation documents during their examination.

           (5) Then they annotate needed adjustments for each un-liquidated obligation.

           (6) Both the comptroller and the FAO representative sign and retain a copy of the NSFOP
               report.

NOTE:     Conduct a check on learning and summarize the learning activity.



  Q. How often does the Defense Finance and Accounting Service (DFAS) conduct a joint review?
  A. The Defense Finance and Accounting Service (DFAS) conducts formal joint reviews once
     during each four month period.

  Q. What is the primary management tool reviewer’s use during joint reviews?
  A. The Non-Stock Fund Orders and Payables (NSFOP/L) Listing is the primary management
     tool that reviewers use during joint reviews.

  Q. What percentage of your records should you plan to review?
  A. Plan to conduct a 100 percent review of your records.

  Q. What is the last act that the comptroller and Finance and Accounting Office (FAO) representative
     do once a joint review is complete?
  A. The comptroller and the Finance and Accounting Office (FAO) representative sign and
     retain a copy of the Non-Stock Orders and Payables Listing (NSFOP/L).




                                                 30
SUMMARY


            Method of Instruction: Conference/Discussion
            Instructor to Student Ratio is: 1:21
            Time of Instruction: 10 mins
            Media: Training Aid

Check on     Determine if the students have learned the material presented by soliciting student
Learning
             questions and explanations. Ask the students questions and correct
             misunderstandings.
             QUESTIONS and ANSWERS
             Q: What is Obligation Management?
             A: The systemic process of managing obligations by accountants and
                resource managers using all available resources.


             Q: What is the automated system used by the Army and other DoD financial
                managers to control the distribution of DoD funding called?
             A: The Program Budget Accounting System (PBAS).


             Q: What is the difference between committing and obligating funds.
             A: Committing funds is an administrative reservation, while obligating is the
                legal reservation of funds.


             Q: What is the formula for computing obligation rates?
             A: The formula is to take the original obligation(s) plus or minus cumulative
                adjustments to date and divide by the initial funding total.


             Q: Which STANFINS report is the primary tool used to accomplish joint
                reconciliation and review of Unliquidated Obligations?
             A: The Non-Stock Fund Orders and Payables (NSFOP) AVK 602 report.


             Q: How often does the Defense Finance and Accounting Service (DFAS) conduct
                a joint review?
             A: DFAS conducts formal joint reviews once during each four month period.


             NOTE: Solicit and answer the student’s questions. This is not a graded activity.

Review /     a.   During enabling Learning Objective 1 of this lesson you learned:
Summarize
Lesson               (1)   The definition of obligation management

                     (2) The primary responsibilities of service activity or fund managers, and
                      accountants for managing obligations.




                                         C-31
b.   During enabling Learning Objective 2 of this lesson you learned:

        (1) The various stages of the funding process and who the key players
         are throughout the funding process.

        (2) That the recipients of allocations and sub-allocations or their
         designees, make allotments in specific amounts to the heads of
         installations or organizational units of DoD components. The total of the
         amounts allotted are not to exceed the amount of the allocations available
         for any given period. Exceeding the given amounts could trigger an Anti-
         deficiency Act violation.

c.    During enabling Learning Objective 3 of this lesson you learned:

        (1) The various stages of accounting and how they relate to the
         processing of commitment and obligation documents.

        (2) How a commitment document flows in the system to initiate an
         obligation document.

d.   During enabling Learning Objective 4 of this lesson you learned:

        (1) That obligation rates can be computed on a daily, weekly, monthly,
         quarterly, year-end, and true rate.

        (2) How to calculate key obligation rates and perform an analysis of the
         results.

e.   During enabling Learning Objective 5 of this lesson you learned:

        (1)     How to interpret data on STANFINS funding reports.

         (2)    How to provide information on fund usage.

f.   During enabling Learning Objective 6 of this lesson you learned:

          (1) That the most recent NSFOP report serves as the main document
         for conduction the review.

          (2) That reviewers analyze, reconcile, and adjust un-liquidated
         obligations, concentrating on exceptions such as delinquent obligations.

          (3) That both the comptroller and the FAO representative sign and
         retain a copy of the NSFOP report.

NOTE:          Show slide #24 – Terminal Learning Objective

NOTE: Make sure you repeat the terminal learning objective of the lesson.




                              C-32
SECTION V.     STUDENT EVALUATION

Testing         NOTE: Describe how the student must demonstrate accomplishment of the TLO.
Requirements    Refer student to the Student Evaluation Plan.


Feedback        NOTE: Feedback is essential to effective learning. Schedule and provide
Requirements    feedback on the evaluation and any information to help answer students' questions
                about the test. Provide remedial training as needed.




                                           C-31
                            Appendix A – Viewgraph Masters

                  VIEWGRAPHS FOR LESSON: AJE45105 Slides version 1

                        Slide Masters (Filename: AJE45105PPT.ppt)

1    FA 45 Intermediate Level Education (ILE) Obligation Management

2    Terminal Learning Objective

3    Enabling Learning Objectives

4    Enabling Learning Objectives

5    Acronyms and Terms

6    Definition

7    Responsibilities

8    Fund Flow Process

9    Funding Flow

10   Fund Flow Process

11   Fund Flow from DA

12   Allotments

13   Stages of Accounting

14   Obligation Rates

15   STANFINS Reports

16   Fund Control and Status Report (FCSR)

17   Detailed Obligation Report

18   Weekly Cost by AOB

19   Non-Stock Fund Orders and Payables

20   The Joint Review

21   The Joint Review Process

22   Joint Review Procedures (Preparatory Activities)

23   Joint Review Procedures (Conducting the Review)

24   Terminal Learning Objectives




                                            A-1
Appendix B Test(s) and Test Solution(s) (N/A)




                    B-1
                            Appendix C - Practical Exercises and Solutions

             PRACTICAL EXERCISE(S)/SOLUTION(S) FOR LESSON: AJE45105 version 1

                            PRACTICAL EXERCISE SHEET AJE45105 PE1


Title             Obligation Management

Lesson            AJE45105 version 1 / Obligation Management
Number/Title

Introduction      This practical exercise is designed to measure your ability to Calculate Key
                  Obligation Rates and perform Analysis of the Results.

Motivator         This Practical Exercise will help develop the skills necessary to identify the
                  obligation management process.
Terminal          NOTE: The instructor should inform the students of the following Terminal
Learning          Learning Objective covered by this practical exercise.
Objective
                  At the completion of this lesson, you [the student] will:
                  Action:         Calculate Key Obligation Rates.

                  Conditions:     Given DFAS-IN Regulation 37-1

                  Standards:      IAW DFAS-IN Regulation 37-1


Safety            Normal classroom safety precautions apply.
Requirements
Risk              Low
Assessment
Level
Environmental     Recycle all appropriate courseware materials.
Considerations

Evaluation                                               st
                  This lesson will be evaluated in the 1 Interim Module Test.

Instructional     We are ready to begin our practical exercise on obligation analysis.
Lead-In

Resource          Instructor Materials:
Requirements
                  Dry eraser markers, whiteboards

                  DFAS-IN Regulation 37-1.

                  Student Materials:
                  Practical Exercise

Special           Hand out one practical exercise to each student. Give students 45 minutes to
Instructions      complete this exercise.




                                                   C-1
Procedures          Instructor will monitor students and assist as necessary.

Feedback            Following completion of the practical exercise, allow 15 minutes for a review.
Requirements




                                      OBLIGATION MANAGEMENT
                                       STUDENT INSTRUCTION

OBJECTIVE:

This practical exercise measures your ability to calculate key obligation rates and perform analysis of the
results.

MATERIALS REQUIRED:

Pen/Pencil.

INSTRUCTIONS:

Answer problems IAW DFAS-IN Regulation 37-1. Refer to the VITAL OBLIGATION/EXPENDITURE
STATISTICS sheet.

SITUATION:

A new Commanding General (CG) has been assigned to Fort Stewart. Having attended the Planning,
Program, Budget, and Execution Course as a Major, he remembered all the acronyms as well as
something about obligating and spending monies. He calls you, the Installation DRM and requests a
briefing on the financial posture of Fort Stewart. His main question is, “How have we been performing?”
Further guidance from the CG was to limit the analysis to five years worth of historical data.




                                                    C-2
                                     OBLIGATION MANAGEMENT
                                        Practical Exercise # 1

REQUIREMENT: The Vital Obligation/Expenditure Statistics data on the next page was obtained from
the accounting office. Analyze the data and prepare comments for the CG on three key issues identified
below:

1. What is the true obligation rate? Has the installation’s performance improved over time or gotten
   worse?




2. Obligation adjustments can be classified as good, bad and/or ugly. What could be some of the
   reasons for obligation? Cite some examples.




3. Analyze the liquidation performance for the five-year period. What is your assessment? Is it good or
   bad? Why?




                                                  C-3
                      VITAL OBLIGATION/EXPENDITURE STATISTICS
                                   FORT STEWART
                                     FY*6 - FY *0



                               FY *6        FY *7        FY *8        FY *9        FY *0
                             (2162020)    (2172020)    (2182020)    (2192020)    (2102020)

Funding                      5,699,000    6,905,000    7,829,000    8,253,000    8,665,650

OBLIGATIONS
Execution YR                 5,599,099    6,900,431    7,756,159    8,244,403    8,574,179

OBLIGATION
PERFORMANCE                      98.2%        99.9%        99.1%        99.9%         98.9%
Execution YR



OBLIGATION ADJUSTMENTS
FY *7                         (327,109)
FY *8                         (744,660)   (361,462)
FY *9                          (40,600)   (511,114)        3,556
FY *0                            50,980    (91,750)    (433,798)    (287,842)
FY *1                          (20,000)    (15,389)     (73,450)     (82,683)    (107,480)
FY *2




DISBURSEMENTS
Execution YR                 2,086,202    3,368,416    4,121,319    4,872,859    6,567,773



                # All numbers in the FY *6 Column apply to the FY *6 appropriation.




                                              C-4
                                        SOLUTION FOR
                                PRACTICAL EXERCISE AJE45105 PE1

                                     OBLIGATION MANAGEMENT

                                 PRACTICAL EXERCISE SOLUTIONS

REQUIREMENT: The data on page two was obtained from the accounting office. Analyze the data and
prepare comments for the CG on three key issues identified below:

1. What is the true obligation rate? Has the installation’s performance improved over time or gotten
   worse?

ANSWER:

True Obligation Rate is 97.70%

The overall trend shows an improvement as evidenced by the true obligation rate.




2. Obligation adjustments can be classified as good, bad and/or ugly. What could be some of the
   reasons for obligation? Cite some examples.

ANSWER:

    Obligation adjustments appear high. Cannot say for sure without additional data. However,
    when reviewing the trend, it appears there had been some improvement in the management of
    obligations. This is further evidenced by the liquidation performance ratio.

    Reasons for these obligation adjustments could stem from poor management, untrained
    personnel, change in mission, or poor estimating practices.



3. Analyze the liquidation performance for the five-year period. What is your assessment? Is it good or
   bad? Why?

    The liquidation performance ratio has steadily improved over the past five years. This
    improved performance indicates the installation is making more disbursements in the current
    year of the appropriations life. These increased disbursements result in fewer dollars
    available for downward obligation adjustments during the appropriation’s expired state.




                                                  C-5
                         VITAL OBLIGATION/EXPENDITURE STATISTICS
                                      FORT STEWART
                                        FY*6 - FY *0



                                  FY *6        FY *7        FY *8        FY *9        FY *0
                                (2162020)    (2172020)    (2182020)    (2192020)    (2102020)

Funding                         5,699,000    6,905,000    7,829,000    8,253,000    8,665,650

OBLIGATIONS
Execution YR                    5,599,099    6,900,431    7,756,159    8,244,403    8,574,179

OBLIGATION
PERFORMANCE                         98.2%        99.9%        99.1%        99.9%          98.9%
Execution YR



OBLIGATION ADJUSTMENTS
FY *7                            (327,109)
FY *8                            (744,660)   (361,462)
FY *9                             (40,600)   (511,114)        3,556
FY *0                               50,980    (91,750)    (433,798)    (287,842)
FY *1                             (20,000)    (15,389)     (73,450)     (82,683)    (107,480)
FY *2


Total Cumulative Adj             -1081389      -979715      -503692      -370525         -107480

True Obligation Rate               79.27%      85.75%       92.64%       95.41%          97.70%




DISBURSEMENTS
Execution YR                    2,086,202    3,368,416    4,121,319    4,872,859    6,567,773

Liquidation
Performance Rate                   37.26%      48.81%       53.14%       59.11%          76.60%



                   # All numbers in the FY *6 Column apply to the FY *6 appropriation.




                                                 C-6
                          PRACTICAL EXERCISE SHEET AJE45103 PE2


Title           Obligation Management

Lesson          AJE45105 version 1 / Obligation Management.
Number/Title

Introduction    This practical exercise will measure your ability to interpret data on STANFINS
                funding reports and provide information on fund usage.

Motivator       This Practical Exercise will help develop the skills necessary to interpret data on
                STANFINS funding reports and provide information on fund usage.
Terminal        NOTE: The instructor should inform the students of the following Terminal
Learning        Learning Objective covered by this practical exercise.
Objective
                At the completion of this lesson, you [the student] will:
                Action:         Interpret data on STANFINS report and provide information on fund
                                usage.

                Conditions:     Given DFAS-IN Regulation 37-1.

                Standards:      IAW DFAS-IN Regulation 37-1.


Safety          Normal classroom safety precautions apply.
Requirements
Risk            Low
Assessment
Level
Environmental   Recycle all appropriate courseware materials.
Consideration
s

Evaluation                                              st
                This lesson will be evaluated in the 1 Interim Module Test.

Instructional   We are ready to begin our practical exercise on interpreting data on STANFINS
Lead-In         reports and providing information on fund usage.

Resource        Instructor Materials: Dry eraser markers, whiteboards, and DFAS-IN Regulation
Requirements                         37-1.
                Student Materials: Practical Exercise.

Special         Hand out one practical exercise to each student. Give students 60 minutes to
Instructions    complete this practical exercise.
Procedures      Instructor will monitor students and assist as necessary.
Feedback        Following completion of the practical exercise, allow 15 minutes for a review.
Requirements




                                                  C-7
                                     OBLIGATION MANAGEMENT
                                      STUDENT INSTRUCTION

OBJECTIVE:

This practical exercise measures your ability to interpret data on STANFINS funding reports and provide
information on fund usage.

MATERIALS REQUIRED:

Pen/Pencil.

INSTRUCTIONS:

Answer problems IAW DFAS-IN Regulation 37-1. Refer to the attached reports.

SITUATION:

You have been given the following STANFINS reports, Fund Control and Status Report (FCSR), Detailed
Obligation Report (DOR), Weekly Cost by Approved Operating Budget (AOB) and the Non-Stock Fund
Orders and Payables (NSFOP) report. Review each report and identify any problem areas that must be
addressed. Finally complete the questions in Practical Exercise 2.




                                                  C-8
                                     OBLIGATION MANAGEMENT
                                        Practical Exercise # 2

REQUIREMENT: The reports on the following pages were obtained from the accounting office. Review
and identify any problem areas and provide information on the fund usage.

1. In reviewing the Fund Control and Status Report Part I Direct Oblig Authority (DOA) what problem(s)
   have you identified, if any?




2. In reviewing the Detail Obligation Report what problem(s) have you identified, if any?




3. In reviewing the Weekly Cost by Approved Operating Budget report what problem(s) have you
   identified, if any?




4. In reviewing the Non Stock Fund Orders and Payables, what problem(s) have you identified, if any?




                                                   C-9
FUND CONTROL AND STATUS REPORT PART I Direct Obligation Authority (DOA)

AMS        OR
BAG1/ CC / FY /      (1)          (2)         (3)          (4)          (5)           (6)
RCN

                  OBLI CURR     FYTD        FYTD OBL     UNOBL        ANN OBL      FYTD CSR
                     MO                       CEIL       CEILING        CEIL

131096.BB01*          957.36    21,598.37    95,000.00    73,401.63   160,000.00    14,987.25

131096.BE02*        31,280.00 107,100.00    107,000.00     (100.00)   150,000.00    18,961.60

131096.BH03*         4,597.54   32,598.45    97,000.00    64,401.55   150,000.00    27,739.02

131096.BH04*         9,853.47   38,532.58    41,000.00     2,467.42    55,000.00    15,484.41

131096.BH05*         2,598.36   22,549.36    23,000.00       450.64    30,000.00    27,753.63

131096.BH06*         2,392.54   15,429.36    68,000.00    52,570.64    96,000.00    18,961.60

131096.BH07*         5,498.36   38,954.32    65,000.00    26,045.68    90,000.00    (8,181.33)

131096.BH08*         4,983.28   36,792.34    98,000.00    61,207.66   150,000.00     3,879.45

131096.BH09*        54,268.12 187,965.21    275,000.00    87,034.79   420,000.00   245,879.01

TOTALS             116,429.03 501,519.99    869,000.00   367,480.00 1,301,000.00   365,464.64




                                               C-10
DETAIL OBLIGATION REPORT FOR PERIOD 05 20 TO 05 27 PROGRAM - DIRECT ACTIVITY ACCT CLASS * 2020 76 9505
APC = BKGG AMS 131096.BE

DAY     TAA       FAC    BL   DOCUMENT NR      EOR               YR    CSR       DIRECT-     FUND-   AUTO-       CR-RTN     CIV-MNHRS
                         K                                                         OBL        OBL     OBL
27     211    3         174   SM134100203011   21T2                                 550.00


EOR    TOTA   THIS            PERIOD                    550.00                      550.00
21T1   L      OBLIG           TOTAL                     550.00                      550.00
       MTD    OBLIG           TOTAL                    5800.00                     5800.00
       YTD
27     211    3         174   SM134100203011   21T1                                 350.00

EOR    TOTA   THIS            PERIOD                    350.00                      350.00
21T1   L      OBLIG           TOTAL                     350.00                      350.00
       MTD    OBLIG           TOTAL                    7958.00                     7958.00
       YTD
24     231    3         101   W543BD41100015   25CZ                       3000       3000
26     321    3         150   W543BD41170047   25CZ                      -2000
27     211    3         160   W543BD41210073   25CZ                                  5000

EOR    TOTA             THI   PERIOD                   8000.00         1000.00     8000.00
27CZ   L                S     TOTAL                    8000.00         1000.00     8000.00
                              TOTAL                   29000.00        18961.60    29000.00

25     292    3         000   W543BD41170003   26CB                                  15.60
27     292    3         000   W543BD41060050   26CB                                 202.40
27     292    3         000   W543BD40590049   26CB                                 -51.00                         -51.00

EOR    TOTA   THIS            PERIOD                    167.00                      167.00                         -51.00
26CB   L      OBLIG           TOTAL                     167.00                      167.00                         -51.00
       MTD    OBLIG           TOTAL                   13910.00                    13910.00                        -400.00
       YTD

27     292    3         000   W543BD40590149   26FB                               22213.00

EOR    TOTA   THIS            PERIOD                  22213.00
26FB   L      OBLIG           TOTAL
       MTD    OBLIG           TOTAL
       YTD

PAC    MTD    OBLIG           TOTAL                31280.00            1000.00    31280.00                         -51.00
BKGG   YTD    OBLIG           TOTAL               105240.00           18961.00   105240.00                        -400.00

A/C    MTD    OBLIG           TOTAL                31280.00            1000.00    31280.00              -51.00
       YTD    OBLIG           TOTAL               105240.00           18961.00   105240.00           -10000.00



                                                                        C-11
  PD         ACT         DP          FT   SYMB     LIM       P    OA       ALLT        F/STA              WEEKLY COST BY AOB           OPTION 2     PREPARED XX MAY 27
                                     FY
   3         A           21               2020     0         0     76      9505        S12123

                                                                                                              %         %
                                               A                  B            C          A+B+C            CEILING   CEILING
    AMS            EOR        DATA        DIRECT FYTD        FUNDED FYTD   AUTO FYTD    TOTAL FYTD          ANN        FY      DIRECT C/MO     FUNDED C/MO   AUTO C/MO

131096.BE        21T2         OBL                  5800.00                                      5800.00                               550.00
                              EXP
                              CSR

131096.BE        21T1         OBL                  7958.00                                      7958.00                               350.00
                              EXP                  7958.00                                      7958.00                               350.00
                              CSR                     0.00                                         0.00                                 0.00

                 21**         OBL                 13758.00                                     13758.00                               900.00
                              EXP                 13758.00                                     13758.00                               900.00
                              CSR                     0.00                                         0.00                                 0.00

131096.BE        25CZ         OBL                 29000.00                                     29000.00                              8000.00
                              EXP                 10038.40                                     10038.40                              7000.00
                              CSR                 18961.60                                     18961.60                              1000.00

                 25**         OBL                 29000.00                                     29000.00                              8000.00
                              EXP                 10038.40                                     10038.40                              7000.00
                              CSR                 18961.60                                     18961.60                              1000.00

131096.BE        26CB         OBL                 13910.00                                     13910.00                               167.00
                              EXP                 13910.00                                     13910.00                               167.00
                              CSR                     0.00                                         0.00

                 26FB         OBL                 48572.00                                     48572.00                             22380.00
                              EXP                 48572.00                                     48572.00                             22380.00
                              CSR                     0.00                                         0.00                                 0.00

                 26**         OBL                 62482.00                                     62482.00                             22380.00
                              EXP                 62482.00                                     62482.00                             22380.00
                              CSR                     0.00                                         0.00

131096.BE        TOT          ANN                150000.00                                  150000.00          70%   98%            31280.00
                               FY                107000.00                                  107000.00                               30280.00
                              OBL                105240.00                                  105240.00                                1000.00
                              EXP                 86278.40                                   86278.40
                              CSR                 18961.60                                   18961.60

11*****.**       1010         ANN                150000.00                                  150000.00
                               FY                107000.00                                  107000.00




                                                                                         C-12
PREPARED 99 MAY 20                                            NON STOCK FUND ORDERS AND PAYABLES                                     PCN AVK-60 AS OF 27 MAY 99

 PD      ACT     DP     FT FY        APPN     P          OA    ALLT    F/STA
  3              21          *       2020     0          76    9505    S12123

LIMIT   BAG    APC    EOR     ODC       DOCUMENT NO.          NAME       OBL     ACC AMT    DISB AMT EOC-HR   O-DT   A-DT   D-DT    AF   DF   DF   LI   LC
                                                                         AMT

0000    1000   BMPB   21T2       2      FOY1191TB10018                  450.00     450.00      00.00          3314   3314   0000    F         L    3    01
                                 2      HAR8905TF03031                  400.00     400.00      00.00          4071   4071    0000   F    F    L    3    01
                                 2      MOO4425TF03031                  400.00     400.00     425.00          4071   4071    4078   F         L    3    01
                                 2      HUG2241TF03014                  400.00     400.00      00.00          4071   4071    0000   F         L    3    01
                                 2      SMI3410TH03011                  550.00     550.00      00.00          4147   4147    0000   F         L    3    01
                      21T1       1      DAN4387TC01016                   00.00      00.00     400.00          0000   0000    4015   F         L    3    01
                                 2      DAN4387TC01016                  425.00     425.00      00.00          3360   3360    0000   F         L    3    01
                                 2      HAR8905TF02015                  350.00     350.00      00.00          4071   4071    0000   F         L    3    01
                                 2      MOO4425TF03031                  200.00     200.00      00.00          4071   4071     000   F         L    3    01
                                 2      HUG2241TF03014                  200.00     200.00      00.00          4071   4071    0000   F         L    3    01
                                 2      SMI3410TH03011                  350.00     350.00      00.00          4147   4147    0000   F         L    3    01
                      25CZ       2      W543BD41100015                 3000.00    3000.00      00.00          4144   0000    0000   F         L    3    01
                                 2      W543BD41170047                 2000.00    2000.00      00.00          4089   4146    0000   F         L    3    01
                                 2      W543BD41210073                 5000.00    5000.00      00.00          4147   4147    0000   F         L    3    01
                      4110       2      HUG2241TF03014                   00.00      00.00     240.00          0000   0000    4082   F         L    3    17
                                 2      SMI3410TH03011                   00.00      00.00     360.00          0000   0000    4080   F         L    3    17

                      *2020      0      76 9505 012123                13725.00   12725.00    1425.00




                                                                                 C-13
                                         STANFINS REPORTS
                                         Practical Exercise # 2

Questions 1-3 refer to the Fund Control and Status Report.

1. What is the purpose of the Fund Control and Status Report?

    1.   Contains open expenditure accounting transactions.
    2.   Compare actual obligation and expense dollars to budget targets.
    3.   Provides fund managers with unobligated ceilings by appropriation/allotment and AMS.
    4.   Reconciles/Updates the program director’s commitment ledger to accounting’s obligations.

4. References AMS 131096.BB, what is the unobligated ceiling?

    1.   $ 957.00.
    2.   $21,598.37.
    3.   $73,401.63.
    4.   $95,000.00.

1. Reference AMS 131096.BB, what is the annual obligation ceiling?

    1.   $ 73,401.63.
    2.   $ 95,000.00.
    3.   $ 160,000.00.
    4.   $1,301,000.00.

Questions 4-5 refer to the Weekly Cost by AOB Report.

4. What is the purpose of the Weekly Cost by AOB Report?

    1.   Contains open expenditures accounting transactions.
    2.   Is used as an aid in clearing the Daily Preliminary Balance Listing.
    3.   Compares actual obligation and expense dollars to budget targets.
    4.   Reconciles/Updates budget’s informal commitment ledgers to accounting’s obligations.

5. Reference AMS 131096.BE, EOR 26FB, what is the FYTD obligation dollar amount?

    1.   $      167.00.
    2.   $   13,910.00.
    3.   $   22,213.00.
    4.   $   48,572.00.

6. Reference AMS 131096.BE, what are the total direct FYTD obligations?

    1.   $ 86,278.40.
    2.   $105,240.00.
    3.   $107,000.00.
    4.   $150,000.00.

7. What is the purpose of the Detail Obligation Report?

    1.   Contains open expenditure accounting transactions.
    2.   Compares actual obligation and expense dollars to budget targets.
    3.   Provides fund managers with unobligated ceilings by appropriational/allotment and AMS.
    4.   Reconciles/Updates the program director’s commitment ledgers to accounting’s obligations.



                                                  C-14
8. Reference APC BKGG, SDN W543BD41100015, what is the amount obligation total?

   1.   $ 100.00.
   2.   $2,000.00.
   3.   $3,000.00.
   4.   $5,000.00.

9. Reference APC BKGG, what is the MTD obligation total?

   1.   $ 1,000.00.
   2.   $ 18,961.60.
   3.   $ 31,280.00.
   4.   $105,240.00.

10. Reference APC BKGG, EOR 26CB, what is the YTD obligation total?

   1.   $    15.60.
   2.   $ 167.00.
   3.   $ 7,000.00.
   4.   $13,910.00.

Questions 11-13 refer to the Non Stock Fund Orders and Payable Listing.

11. What is the primary purpose of the Non Stock Fund Orders and Payable Listing?

   1.   Produces a listing of old obligations.
   2.   Contains open expenditure accounting transactions.
   3.   Contains expenditure ceilings and undeliverable orders by program element and EOR.
   4.   Provides fund managers with unobligated ceiling dollars by appropriation/allotment and AMS

12. Reference APC BMPB, EOR 21T2 SDN M004425TF03031, what is the disbursement amount?

   1.   $ 0.00.
   2.   $201.37.
   3.   $350.00.
   4.   $425.00.

13. Reference APC BMPB, EOR 25CZ, what is the status of SDN W543BD1100015?

   1.   Open.
   2.   Closed.
   3.   Commitment.
   4.   not On Listing.




                                                 C-15
                                        SOLUTION FOR
                                PRACTICAL EXERCISE AJE45105 PE2

                                     OBLIGATION MANAGEMENT
                                        Practical Exercise # 2

REQUIREMENT: The reports on the following pages were obtained from the accounting office. Review
and identify any problem areas and provide information on the fund usage.

1. In reviewing the Fund Control and Status Report Part I Direct Oblig Authority (DOA) what problem(s)
   have you identified, if any?

The Unobl Ceiling in column 4 for AMS 131096.BE02 is a negative number. Research needs to be
completed on why the report shows that the FYTD is 100.00 more than the FYTD Obligation
Ceiling for this period.

The FYTD CSR (Change in selected resources), column 6 for AMS 131096.BH07 is a negative
number. This indicates that the AE/E for this AMS exceeds the current obligation. (Obligation –
AE/E = CSR. This could be a violation of the Anti-Deficiency Act.


2. In reviewing the Detail Obligation Report what problem(s) have you identified, if any?

The CSR for document number W543BD41170047 is negative. Research as to why the CSR is a
negative number. Again as in the second part above this could be a violation of the ADA.



3. In reviewing the Weekly Cost by Approved Operating Budget report what problem(s) have you
   identified, if any?

This report should be used by the program activities chiefs in the control of their financial
resources. Need to compare to their commitment ledger to assist in maintaining their obligation
and expense targets, and provides information on the status of actual obligations and expenses.


4. In reviewing the Non Stock Fund Orders and Payables what problem(s) have you identified, if any?

Document number MOO4425TF03031: The DISB AMT (425.00) is greater than the Obl and ACC
AMT. Need to find out why the disbursement exceeds the original obligation and accounting
amount. Did a vendor deliver and bill for more than was ordered?

Document number DAN4387TC01016: Why is the DISB AMT recorded on a separate line from the
OBL and ACC AMT? Needs to be researched to clear up how it was posted to the incorrect line.

Document numbers HUG2241TF03014 and SMI3410TH03011: Both of these Document numbers
show a disbursement under EOR 4110 (Travel Advance). Both have different amount obligated
and accounted for under EOR 21T1. The travel advances need to be reconciled with the correct
obligations.




                                                  C-16
                                         STANFINS REPORTS
                                         Practical Exercise # 2

Questions 1-3 refer to the Fund Control and Status Report.

1. What is the purpose of the Fund Control and Status Report?

    1.   Contains open expenditure accounting transactions.
    2.   Compare actual obligation and expense dollars to budget targets.
    3.   Provides fund managers with unobligated ceilings by appropriation/allotment and AMS.
    4.   Reconciles/Updates the program director’s commitment ledger to accounting’s obligations.

2. References AMS 131096.BB, what is the unobligated ceiling?

    1.   $ 957.00.
    2.   $21,598.37.
    3.   $73,401.63.
    4.   $95,000.00.

3. Reference AMS 131096.BB, what is the annual obligation ceiling?

    1.   $ 73,401.63.
    2.   $ 95,000.00.
    3.   $ 160,000.00.
    4.   $1,301,000.00.

Questions 4-5 refer to the Weekly Cost by AOB Report.

4. What is the purpose of the Weekly Cost by AOB Report?

    1.   Contains open expenditures accounting transactions.
    2.   Is used as an aid in clearing the Daily Preliminary Balance Listing.
    3.   Compares actual obligation and expense dollars to budget targets.
    4.   Reconciles/Updates budget’s informal commitment ledgers to accounting’s obligations.

5. Reference AMS 131096.BE, EOR 26FB, what is the FYTD obligation dollar amount?

    1.   $      167.00.
    2.   $   13,910.00.
    3.   $   22,213.00.
    4.   $   48,572.00.

6. 6. Reference AMS 131096.BE, what are the total direct FYTD obligations?

    1.   $ 86,278.40.
    2.   $105,240.00.
    3.   $107,000.00.
    4.   $150,000.00.

7. What is the purpose of the Detail Obligation Report?

    1.   Contains open expenditure accounting transactions.
    2.   Compares actual obligation and expense dollars to budget targets.
    3.   Provides fund managers with unobligated ceilings by appropriational/allotment and AMS.
    4.   Reconciles/Updates the program director’s commitment ledgers to accounting’s
         obligations.



                                                  C-17
8. Reference APC BKGG, SDN W543BD41100015, what is the amount obligation total?

   1.   $ 100.00.
   2.   $2,000.00.
   3.   $3,000.00.
   4.   $5,000.00.

9. Reference APC BKGG, what is the MTD obligation total?

   1.   $ 1,000.00.
   2.   $ 18,961.60.
   3.   $ 31,280.00.
   4.   $105,240.00.

10. Reference APC BKGG, EOR 26CB, what is the YTD obligation total?

   1.   $    15.60.
   2.   $ 167.00.
   3.   $ 7,000.00.
   4.   $13,910.00.

Questions 11-13 refer to the Non Stock Fund Orders and Payable Listing.

11. What is the primary purpose of the Non Stock Fund Orders and Payable Listing?

   1.   Produces a listing of old obligations.
   2.   Contains open expenditure accounting transactions.
   3.   Contains expenditure ceilings and undeliverable orders by program element and EOR.
   4.   Provides fund managers with unobligated ceiling dollars by appropriation/allotment and
        AMS

12. Reference APC BMPB, EOR 21T2 SDN M004425TF03031, what is the disbursement amount?

   1.   $ 0.00.
   2.   $201.37.
   3.   $350.00.
   4.   $425.00.

13. Reference APC BMPB, EOR 25CZ, what is the status of SDN W543BD1100015?

   1.   Open.
   2.   Closed.
   3.   Commitment.
   4.   not On Listing.




                                                C-18
                           Appendix D Student Handouts



1. DA Form 3953, Purchase Request and Commitment (Front)

2. DA Form 3953, Purchase Request and Commitment (Back)

3. Computing Obligation Rates

4. Computing Obligation Rates (Cont)

5. STANFIINS Reports




                                       D-1
Student Handout #1 DA Form 3953, Purchase Request and Commitment (Front)




                                  D-2
Student Handout #2 DA Form 3953, Purchase Request and Commitment (Back)




                                  D-3
                           Student Handout #3 Computing Obligation Rates


          Formula for computing the Obligation Rate:

                              ORIGINAL        CUMULATIVE
         OBLIGATION RATE = OBLIGATIONS + ADJUSTMENTS
                                      INITIAL FUNDING


 Note 1         TOTAL          OBLIGATION            CUMULATIVE              FORMULA           OBLIGATION
               FUNDING                              ADJUSTMENTS                                   RATE



Note 1: This can be daily, weekly, monthly, quarterly, fiscal year (year-end), or true (expired state).

                               Computation for the True Obligation Rate

FISCAL          TOTAL          OBLIGATION            CUMULATIVE              FORMULA           OBLIGATION
 YEAR          FUNDING                              ADJUSTMENTS                                   RATE
 FY00            1,000              999                  0                    999 + 0            99.9%
                                                                               1,000

  FY01           1,000              999                -99ADJ (99)            999+(99)             90.0%
                                                                               1,000

  FY02           1,000              999           +50ADJ                     999 +(199)            80.0%
                                                  -150 ADJ (199)               1,000
  FY03           1,000              999              00 ADJ (199)            999 +(199)            80.0%
                                                                               1,000

  FY04           1,000              999              00 ADJ (199)            999 +(199)            80.0%
                                                                               1,000

  FY05           1,000              999             -100 ADJ (299)           999 +(299)            70.0%
                                                                               1,000

  FY06         EXPIRED                                                      TRUE OBL               70.0%
                                                                              RTE

The 70% represents the true obligation rate.




                                                     D-4
                       Student Handout #4 Computing Obligation Rates (Cont)


                                                     FY DISBURSEMENTS
                LIQUIDATION PERFORMANCE =              FY OBLIGATIONS


                                                                                   GOAL
OBLIGATION              DISBURSEMENT             POTENTIAL
LIQUIDATION
Activity 1                                       RECOVERIES
PERFORMANCE
FY 00      999     -          333         =      666    333/999                            33.3%
Activity 2
FY 00      999     -          820         =      179    820/999                              82.0%
                                                       We have disbursed 82% of obligations.


                                      REPORT UNIQUENESS
                 FUNDING       COMMITMENT     OBLIGATION           AE/E       DISBURSEMENT
     1. FCSR       XXX                           XXX

     2. DOR                         XXX                XXX

     3. WOAOB                                          XXX          XXX

     4. NSFOP                                          XXX          XXX             XXX




                                               D-5
                                   Student Handout #5 STANFINS Reports

PURPOSE - BUDGET AND PROGRAM DIRECTOR PERSONNEL USE THIS REPORT AS THE PRIMARY
TOOL FOR MANAGING OBLIGATIONS ON A DAY-TO-DAY BASIS. THIS REPORT PROVIDES
OBLIGATION DATA BY ARMY MANAGEMENT STRUCTURE (AMS) CODE FOR ALL CURRENT YEAR
(UNEXPIRED) APPROPRIATIONS.

FUND CONTROL AND STATUS REPORT PART I Direct Oblig Authority (DOA)

AMS        OR
BAG1/ CC / FY /          (1)           (2)           (3)             (4)            (5)           (6)
RCN

                    OBLI CURR        FYTD        FYTD OBL         UNOBL          ANN OBL        FYTD
                       MO                          CEIL           CEILING          CEIL         CSR

131096.BB***              957.36    21,598.37      95,000.00        73,401.63    160,000.00 14,987.25

131096.BE***           31,280.00 105,240.00       107,000.00         1,760.00    150,000.00 18,961.60

131096.BH**             4,597.54    32,598.45      97,000.00        64,401.55    150,000.00 27,739.02

131096.BH***            9,853.47    38,532.58      41,000.00         2,467.42      55,000.00 15,484.41

131096.BH***            2,598.36    22,549.36      23,000.00           450.64      30,000.00 27,753.63

131096.BH***            2,392.54    15,429.36      68,000.00        52,570.64      96,000.00 18,961.60

131096.BH***            5,498.36    38,954.32      65,000.00        26,045.68      90,000.00    8,181.33

131096.BH***            4,983.28    36,792.34      98,000.00        61,207.66    150,000.00     3,879.45

131096.BH***           54,268.12 187,965.21       275,000.00        87,034.79    420,000.00 245,879.0
                                                                                                    1

TOTALS                116,429.03 499,659.99       869,000.00       369,340.01 1,301,000.00 381,827.3
                                                                                                   0


NOTES:
                  UNOB Ceiling = FYTD OBL Ceil - FYTD          Undel orders = OBL - AE/E

                  A negative CSR indicates that the recorded AE/E is a greater value than the obligation or the
                  AE/E was recorded in the current year but, the obligation was recorded in a previous FY.




                                                       D-6
PURPOSE - THIS WEEKLY REPORT SHOWS ALL OBLIGATIONS PROCESSED SINCE THE LAST REPORT BY ELEMENT OF RESOURCE (EOR)
WITHIN EACH ACCOUNTING PROCESSING CODE (APC) FINANCIAL MANAGERS SHOULD USE THIS REPORT TO RECONCILE THEIR
COMMITMENT RECORDS TO AUTOMATED LISTINGS. INDIVIDUAL TRANSACTIONS BY DRN WILL BE REFLECTED ONLY ONCE AND
THEREAFTER WILL SHOW IN THE CUMULATIVE MONTH-TO-DATE (MTD) AND YEAR-TO-DATE (YTD) TOTALS.

DETAIL OBLIGATION REPORT FOR PERIOD 05 20 TO 05 27 PROGRAM - DIRECT ACTIVITY ACCT CLASS * 2020 76 9505
APC = BKGG AMS 131096.BE

 DAY    TAA        FAC   BLK   DOCUMENT NR        EOR                YR        CSR       DIRECT-OBL    FUND-OBL   AUTO-OBL     CR-RTN     CIV-MNHRS
27     211     3         174   SM134100203011     21T2                                        550.00


EOR    TOTAL   THIS            PERIOD                       550.00                            550.00
21T1   MTD     OBLIG           TOTAL                        550.00                            550.00
       YTD     OBLIG           TOTAL                       5800.00                           5800.00

27     211     3         174   SM134100203011     21T1                                        350.00

EOR    TOTAL   THIS            PERIOD                       350.00                            350.00
21T1   MTD     OBLIG           TOTAL                        350.00                            350.00
       YTD     OBLIG           TOTAL                       7958.00                           7958.00

24     231     3         101   W543BD41100015     25CZ                            3000          3000
26     321     3         150   W543BD41170047     25CZ                           -2000
27     211     3         160   W543BD41210073     25CZ                                          5000

EOR    TOTAL             THI   PERIOD                      8000.00             1000.00       8000.00
27CZ                     S     TOTAL                       8000.00             1000.00       8000.00
                               TOTAL                      29000.00            18961.60      29000.00

25     292     3         000   W543BD41170003     26CB                                         15.60
27     292     3         000   W543BD41060050     26CB                                        202.40
27     292     3         000   W543BD40590049     26CB                                        -51.00                             -51.00

EOR    TOTAL   THIS            PERIOD                       167.00                            167.00                             -51.00
26CB   MTD     OBLIG           TOTAL                        167.00                            167.00                             -51.00
       YTD     OBLIG           TOTAL                      13910.00                          13910.00                            -400.00

27     292     3         000   W543BD40590149     26FB                                      22213.00

EOR    TOTAL   THIS            PERIOD                     22213.00
26FB   MTD     OBLIG           TOTAL
       YTD     OBLIG           TOTAL

PAC    MTD     OBLIG           TOTAL                      31280.00             1000.00      31280.00                             -51.00
BKGG   YTD     OBLIG           TOTAL                     105240.00            18961.00     105240.00                            -400.00

A/C    MTD     OBLIG           TOTAL                      31280.00             1000.00      31280.00                  -51.00
       YTD     OBLIG           TOTAL                     105240.00            18961.00     105240.00               -10000.00




                                                                          7
PURPOSE - THIS COST BY APPROVED OPERATING BUDGET (AOB) REPORT IS ONE OF THE PRIMARY TOOLS USED BY PROGRAM AND ACTIVITY CHIEFS IN
THE CONTROL OF THEIR FINANCIAL RESOURCES. THIS REPORT HELPS IN THE MAINTENANCE OF OBLIGATION AND EXPENSE TARGETS AND PROVIDES
INFORMATION TO RESOURCE MANAGERS ON THE STATUS OF ACTUAL OBLIGATIONS AND EXPENSES WITHIN THEIR AREAS OF RESPONSIBILITIES.

  PD         ACT         DP      FT FY   SYMB     LIM       P     OA       ALLT       F/STA               WEEKLY COST BY AOB           OPTION 2      PREPARED XX MAY 27
   3          A          21              2020     0         0     76       9505       S12123

                                                                                                             %         %
                                              A                  B            C          A+B+C            CEILING   CEILING
    AMS            EOR        DATA       DIRECT FYTD        FUNDED FYTD   AUTO FYTD    TOTAL FYTD          ANN        FY       DIRECT C/MO     FUNDED C/MO   AUTO C/MO

131096.BE      21T2           OBL                 5800.00                                       5800.00                               550.00
                              EXP
                              CSR

131096.BE      21T1           OBL                 7958.00                                       7958.00                               350.00
                              EXP                 7958.00                                       7958.00                               350.00
                              CSR                    0.00                                          0.00                                 0.00

               21**           OBL                13758.00                                      13758.00                               900.00
                              EXP                13758.00                                      13758.00                               900.00
                              CSR                    0.00                                          0.00                                 0.00

131096.BE      25CZ           OBL                29000.00                                      29000.00                              8000.00
                              EXP                10038.40                                      10038.40                              7000.00
                              CSR                18961.60                                      18961.60                              1000.00

               25**           OBL                29000.00                                      29000.00                              8000.00
                              EXP                10038.40                                      10038.40                              7000.00
                              CSR                18961.60                                      18961.60                              1000.00

131096.BE      26CB           OBL                13910.00                                      13910.00                               167.00
                              EXP                13910.00                                      13910.00                               167.00
                              CSR                    0.00                                          0.00

               26FB           OBL                48572.00                                      48572.00                             22380.00
                              EXP                48572.00                                      48572.00                             22380.00
                              CSR                    0.00                                          0.00                                 0.00

               26**           OBL                62482.00                                      62482.00                             22380.00
                              EXP                62482.00                                      62482.00                             22380.00
                              CSR                    0.00                                          0.00

131096.BE      TOT            ANN               150000.00                                  150000.00          70%   98%             31280.00
                               FY               107000.00                                  107000.00                                30280.00
                              OBL               105240.00                                  105240.00                                 1000.00
                              EXP                86278.40                                   86278.40
                              CSR                18961.60                                   18961.60

11*****.**     1010           ANN               150000.00                                  150000.00
                               FY               107000.00                                  107000.00




                                                                                  8
PURPOSE - THIS REPORT, NOW IN THE “AS REQUIRED” CYCLE, SHOWS THE CUMULATIVE STATUS, BY DRN, OF NONSTOCK OPEN
TRANSACTIONS AS OF THE REPORT DATE. AN OPEN TRANSACTION IS ONE IN WHICH THE OBLIGATION, ACCRUAL, AND DISBURSEMENT
ARE NOT OF EQUAL DOLLAR VALUES. THE NSFOP IS THE PRIMARY TOOL USED TO ACCOMPLISH JOINT RECONCILIATION AND REVIEW
OF UNLIQUIDATED OBLIGATIONS BETWEEN THE OPLOC AND ACTIVITIES AS REQUIRED BY DFAS-IN REG 37-1.

PREPARED 99 MAY 20                                              NON STOCK FUND ORDERS AND PAYABLES                                     PCN AVK-60 AS OF 27 MAY 99

  PD       ACT     DP     FT FY        APPN     P          OA    ALLT    F/STA
   3               21          *       2020     0          76    9505    S12123

LIMIT    BAG     APC    EOR     ODC       DOCUMENT NO.          NAME       OBL     ACC AMT    DISB AMT EOC-HR   O-DT   A-DT   D-DT    AF   DF   DF   LI   LC
                                                                           AMT

0000     1000    BMPB   21T2       2      FOY1191TB10018                  450.00     450.00      00.00          3314   3314   0000    F         L    3    01
                                   2      HAR8905TF03031                  400.00     400.00      00.00          4071   4071    0000   F    F    L    3    01
                                   2      MOO4425TF03031                  400.00     400.00     425.00          4071   4071    4078   F         L    3    01
                                   2      HUG2241TF03014                  400.00     400.00      00.00          4071   4071    0000   F         L    3    01
                                   2      SMI3410TH03011                  550.00     550.00      00.00          4147   4147    0000   F         L    3    01
                        21T1       1      DAN4387TC01016                   00.00      00.00     400.00          0000   0000    4015   F         L    3    01
                                   2      DAN4387TC01016                  425.00     425.00      00.00          3360   3360    0000   F         L    3    01
                                   2      HAR8905TF02015                  350.00     350.00      00.00          4071   4071    0000   F         L    3    01
                                   2      MOO4425TF03031                  200.00     200.00      00.00          4071   4071     000   F         L    3    01
                                   2      HUG2241TF03014                  200.00     200.00      00.00          4071   4071    0000   F         L    3    01
                                   2      SMI3410TH03011                  350.00     350.00      00.00          4147   4147    0000   F         L    3    01
                        25CZ       2      W543BD41100015                 3000.00    3000.00      00.00          4144   0000    0000   F         L    3    01
                                   2      W543BD41170047                 2000.00    2000.00      00.00          4089   4146    0000   F         L    3    01
                                   2      W543BD41210073                 5000.00    5000.00      00.00          4147   4147    0000   F         L    3    01
                        4110       2      HUG2241TF03014                   00.00      00.00     240.00          0000   0000    4082   F         L    3    17
                                   2      SMI3410TH03011                   00.00      00.00     360.00          0000   0000    4080   F         L    3    17

                        *2020      0      76 9505 012123                13725.00   12725.00    1425.00


OBL - AE/E =      UNDEL ORDERS - 1,000.00
AE/E - DISB =     ACCTS PAYABLE - 11,300.00
OBL - DISB =      UNLIQ OBLIG   - 12,300.00




                                                                            9

				
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