U.S. Department of
Homeland Security
United States
Coast Guard
FINANCIAL RESOURCE
MANAGEMENT MANUAL
(FRMM)
COMDTINST M7100.3F
June 2019
Commandant
United States Coast Guard
US Coast Guard Stop 7618
2703 Martin Luther King Jr Ave SE
Washington, DC 20593-7618
Staff Symbol: CG-8
Phone: (202) 372-3470
Fax: (202) 372-8389
DISTRIBUTION – SDL No. 170
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NON-STANDARD DISTRIBUTION:
COMDTINST M7100.3F
26 June 2019
COMMANDANT INSTRUCTION M7100.3F
Subj: FINANCIAL RESOURCE MANAGEMENT MANUAL (FRMM)
1. PURPOSE. This revision removes all financial procedures from Coast Guard policy for all
financial resource management matters and related issues. These procedures can now be
found in the Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4A.
2. ACTION. All Coast Guard unit commanders, commanding officers, officers-in-charge,
deputy/assistant commandants, and chiefs of Headquarters staff elements shall comply with
the provisions of this Manual. Internet release is authorized.
3. DIRECTIVES AFFECTED. Financial Resource Management Manual (FRMM),
COMDTINST M7100.3E is cancelled.
4. DISCUSSION. This revision includes only Coast Guard financial policy in accordance with
Coast Guard rules, Federal Government regulations, generally accepted accounting principles
(GAAP), and generally accepted auditing standards (GAAS).
5. DISCLAIMER. This guidance is not a substitute for applicable legal requirements, nor is it
itself a rule. It is not intended to nor does it impose legally binding requirements on any
party outside the Coast Guard. It represents the Coast Guard’s current thinking on this topic
and may assist industry, mariners, the general public, and the Coast Guard, as well as other
Federal and State agencies, in applying statutory and regulatory requirements. All Coast
Guard personnel are required to ensure that current business practices are accomplished
within the guidelines of this policy.
COMDTINST M7100.3F
2
6. MAJOR CHANGES. Significant changes include: All Coast Guard financial procedures in
each of the ten chapters have been moved to The Financial Resource Management Manual -
Procedures (FRMM-P), COMDTINST M7100.4 (series).
In accordance with the DHS Common Appropriations Structure (CAS) implementation, CG
appropriation name changes and changes within/between appropriations have been updated
in this Manual.
7. ENVIRONMENTAL ASPECT AND IMPACT CONSIDERATIONS.
a. The development of this Manual and the general policies contained within it have been
thoroughly reviewed by the originating office in conjunction with the Office of
Environmental Management, Commandant (CG-47). This Manual is categorically
excluded under current Department of Homeland Security (DHS) categorical exclusion
(CATEX) A3 from further environmental analysis in accordance with the U.S. Coast
Guard Environmental Planning Policy, COMDTINST 5090.1, Environmental Planning
Implementing Procedures, and DHS Instruction Manual 023-01-001-01 (series).
b. This Manual will not have any of the following: significant cumulative impacts on the
human environment; substantial controversy or substantial change to existing
environmental conditions; or inconsistencies with any Federal, State, or local laws or
administrative determinations relating to the environment. All future specific actions
resulting from the general policy in this Manual must be individually evaluated for
compliance with the National Environmental Policy Act (NEPA) and Environmental
Effects Abroad of Major Federal Actions, Executive Order 12114, DHS NEPA policy,
Coast Guard Environmental Planning policy, and all other applicable environmental
mandates.
8. DISTRIBUTION. No paper distribution will be made of this Manual. An electronic version
will be located on the following Commandant (CG-612) websites. Internet:
http://www.dcms.uscg.mil/directives, and CGPortal:
https://cgportal.uscg.mil/library/directives/SitePages/Home.aspx
9. RECORDS MANAGEMENT CONSIDERATIONS. This Manual has been
thoroughly reviewed during the directives clearance process, and it has been determined
there are further records scheduling requirements, in accordance with Federal Records Act,
44 USC 3101 et seq., NARA requirements, and Information and Life Cycle Management
Manual, COMDTINST M5212.12 (series). This policy creates significant or substantial
change to existing records management requirements.
10. FORMS/REPORTS. The forms referenced in this Manual are available on the Internet:
http://www.dcms.uscg.mil/directives; and
CG Portal at https://cg.portal.uscg.mil/library/forms/SitePages/Forms.aspx. Department of
Defense forms are located here:
http://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.htm. Department of
Homeland Security forms are located here: https://www.dhs.gov/dhs-forms-portal..
COMDTINST M7100.3F
3
Note: The Apportionment and Reapportionment Schedule, Form SF 132, and Report on
Budget Execution and Budgetary Resources, Form SF 133, have been incorporated into the
Federal Government’s electronic budgetary system; consequently, these forms are no longer
available as hard copies. The Apportionment and Reapportionment Schedule, Form SF 132,
is submitted using OMB’s secure web-based apportionment application system, and the
Report on Budget Execution and Budgetary Resources, Form SF 133, must be submitted
electronically through the Treasury’s Federal Agencies’ Governmentwide Treasury Account
Symbol Adjusted Trial Balance System (GTAS). For illustrative formats of these forms and
their proper use, see OMB Circular A-11, Sections 121 and 130, at the following website:
https://www.whitehouse.gov/omb/information-for-agencies/circulars/. In addition, guidance
for GTAS reporting can be found at:
https://www.fiscal.treasury.gov/fsservices/gov/acctg/gtas/gtas_home.htm.
11. REQUESTS FOR CHANGES. Units and individuals may recommend changes by writing
via the chain of command to:
COMMANDANT (CG-843)
ATTN: FINANCIAL MANAGEMENT POLICY DIVISION
US COAST GUARD STOP 7618
2703 MARTIN LUTHER KING JR AVE SE
WASHINGTON DC 20593-7618
T. G. ALLAN, JR. /s/
Rear Admiral, U.S. Coast Guard
Assistant Commandant for Resources
Chief Financial Officer
COMDTINST M7100.3F
RECORD OF CHANGES
CHANGE
NUMBER
DATE OF
CHANGE
DATE
ENTERED
BY
WHOM ENTERED
COMDTINST M7100.3F
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COMDTINST M7100.3F
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Table of Contents
Chapter 1. Introduction to Financial Resource Management 1-1
1.1 Purpose and Scope of this Manual ..................................................................................... 1-1
1.2 Financial Resource Management ....................................................................................... 1-1
1.2.1 Internal Controls .......................................................................................................... 1-1
1.2.2 Consideration of Fraud ................................................................................................ 1-4
1.2.3 Coast Guard Fraud Response Plan (FRP) .................................................................... 1-5
1.3 Financial Management Accounting Oversight Board (FMAOB) ................................... 1-5
1.3.1 Overview ...................................................................................................................... 1-5
1.3.2 Authorities ................................................................................................................... 1-6
1.3.3 Responsibilities ............................................................................................................ 1-6
1.3.4 Policy ........................................................................................................................... 1-8
1.4 The Budget Process ............................................................................................................. 1-9
1.4.1 Budget Formulation ................................................................................................... 1-10
1.4.2 Budget Execution ....................................................................................................... 1-11
1.5 Trademarks ........................................................................................................................ 1-11
Chapter 2. Coast Guard Budget Authority and Structure 2-1
2.1 Federal Agency Authority to Spend Funds ....................................................................... 2-1
2.2 Coast Guard Budget Authority .......................................................................................... 2-1
2.2.1 Regular Appropriations ................................................................................................ 2-2
2.2.2 Supplemental Appropriations ...................................................................................... 2-5
2.2.3 Continuing Resolutions ................................................................................................ 2-5
2.2.4 Operating with No Appropriations .............................................................................. 2-5
2.2.5 Revolving Funds .......................................................................................................... 2-6
2.2.6 General Gift Fund ........................................................................................................ 2-6
2.2.7 Sales, Fees, Fines, and Other Collections .................................................................... 2-6
2.2.8 Reimbursable Activities ............................................................................................... 2-7
2.2.9 Imprest Funds............................................................................................................... 2-7
2.2.10 Nonappropriated Funds (NAFs)................................................................................. 2-8
2.2.11 Cash and Property Recovered or Seized .................................................................... 2-8
2.2.12 Other Budget Authority ............................................................................................. 2-8
2.3 Subappropriation Accounts .............................................................................................. 2-25
2.3.1 Apportionment ........................................................................................................... 2-25
2.4 Operations & Support (O&S) Allowance Fund Control Codes .................................... 2-26
2.4.1 AFC-01 Military Pay ................................................................................................. 2-26
2.4.2 AFC-08 Civilian Pay.................................................................................................. 2-27
2.4.3 AFC-20 and AFC 21 Permanent Change of Station (PCS) ....................................... 2-27
2.4.4 AFC-30 Operating and Maintenance ......................................................................... 2-27
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2.4.5 AFC-34 Training and Recruiting Centers .................................................................. 2-27
2.4.6 AFC-36 Central Accounts .......................................................................................... 2-28
2.4.7 AFC-40 Other Activities ............................................................................................ 2-28
2.4.8 AFC-41 Aeronautical Engineering ............................................................................ 2-28
2.4.9 AFC-42 Command, Control, Communications, and Electronics Engineering .......... 2-28
2.4.10 AFC-43 Civil Engineering ....................................................................................... 2-28
2.4.11 AFC-45 Naval Engineering ..................................................................................... 2-28
2.4.12 AFC-56 Training ...................................................................................................... 2-29
2.4.13 AFC-57 Health, Safety, and Work-Life ................................................................... 2-29
2.4.14 AFC-75 Reimbursable/Refund Program .................................................................. 2-29
2.4.15 AFC-77 Reimbursable Execution Account .............................................................. 2-29
2.4.16 AFC-80 Reimbursements ......................................................................................... 2-29
2.5 Reserve Training (RT) Allowance Fund Control Codes ................................................ 2-30
2.6 Retired Pay (RP) Allowance Fund Control Codes ......................................................... 2-31
2.7 Coast Guard Supply Fund ................................................................................................ 2-31
2.7.1 Authorities ................................................................................................................. 2-32
2.7.2 Responsibilities .......................................................................................................... 2-33
2.8 PC&I Project Identification System ................................................................................ 2-35
2.9 Transfers ............................................................................................................................ 2-36
2.9.1 Refunds ...................................................................................................................... 2-36
2.9.2 Reimbursements ......................................................................................................... 2-36
2.10 The Investment Board ..................................................................................................... 2-36
2.10.1 The Resource Group ................................................................................................ 2-37
2.11 The Budget Review Board .............................................................................................. 2-37
2.11.1 Headquarters Unit – Financial Management Staff ................................................... 2-37
2.11.2 Field Unit – Commanding Officers ......................................................................... 2-37
2.11.3 Field Unit – Executive Officers ............................................................................... 2-38
2.11.4 Field Unit – Financial Managers .............................................................................. 2-38
Chapter 3. Administrative Control of Funds 3-1
3.1 Purpose ................................................................................................................................. 3-1
3.1.1 Policy Review .............................................................................................................. 3-1
3.2 Authority for Funds Control .............................................................................................. 3-1
3.3 Scope of Funds Control ....................................................................................................... 3-2
3.4 Responsibilities .................................................................................................................... 3-2
3.4.1 DHS Under Secretary for Management (DHS USM) .................................................. 3-3
3.4.2 DHS Chief Financial Officer (DHS CFO) ................................................................... 3-3
3.4.3 DHS Director, Office of Financial Management (OFM) ............................................. 3-3
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3.4.4 DHS Director, Budget Office....................................................................................... 3-3
3.4.5 Commandant (CG-00) ................................................................................................. 3-4
3.4.6 Assistant Commandant and Deputy Assistant Commandant for Resources
(CG-8/8D) ................................................................................................................... 3-4
3.4.7 Director of Financial Operations/Comptroller (CG-8C) .............................................. 3-5
3.4.8 Office of Financial Policy, Reporting, and Property (CG-84) ..................................... 3-5
3.4.9 Office of Resource Management (CG-83) ................................................................... 3-6
3.4.10 Funds Control Division (CG-831) ............................................................................. 3-6
3.4.11 Office of Procurement Policy & Oversight (CG-913) ............................................... 3-7
3.5 Antideficiency Act ............................................................................................................... 3-8
3.5.1 Violations of the Antideficiency Act ........................................................................... 3-9
3.5.2 Violations of Limitations That Do Not Per Se Violate the Antideficiency Act ........... 3-9
3.5.3 Antideficiency Act Employee Restrictions ................................................................ 3-10
3.5.4 Penalties ..................................................................................................................... 3-10
3.5.5 Antideficiency Act Violations Discovered by Coast Guard Employees.................... 3-10
3.5.6 ADA Violations Uncovered During Audits ............................................................... 3-11
3.5.7 Examples of ADA Violations .................................................................................... 3-11
3.5.8 Training of Financial Managers and Investigating Officials ..................................... 3-13
3.5.9 Reporting Violations .................................................................................................. 3-14
3.6 Apportionments ................................................................................................................. 3-14
3.6.1 Anticipated Reimbursements ..................................................................................... 3-14
3.6.2 Deficiency Apportionments ....................................................................................... 3-15
3.7 Policy on Allotments and Suballotments ......................................................................... 3-15
3.7.1 Restrictions ................................................................................................................ 3-15
3.8 Administrative Control of Funds Policy .......................................................................... 3-16
3.8.1 Administrative Control of Funds ............................................................................... 3-16
3.8.2 Formal Delegation of Budget Authority .................................................................... 3-17
3.8.3 Responsibility for Administrative Control of Funds .................................................. 3-17
3.8.4 Delegation of Authority within the Chain of Command ............................................ 3-17
3.8.5 Segregation of Duties ................................................................................................. 3-18
3.8.6 Accounting Support for Fund Control Systems ......................................................... 3-18
3.8.7 Allotment/Suballotment Managers ............................................................................ 3-19
3.8.8 Allowance Managers ................................................................................................. 3-19
3.8.9 Administrative Target Unit Commander, Commanding Officer, Director, or
Superintendent ........................................................................................................... 3-20
3.8.10 Program Element Managers ..................................................................................... 3-20
3.8.11 Civilian Employee Financial Resource Official (CEFRO) formerly
Performance Incentive Pay Officials (PIPO) ............................................................ 3-21
3.8.12 Civilian Resource Coordinators (CRC) ................................................................... 3-21
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Chapter 4. Budget Formulation 4-1
4.1 Overview ............................................................................................................................... 4-1
4.2 The Stages and Format of the Budget ............................................................................... 4-1
4.2.1 Budget Stages............................................................................................................... 4-2
4.2.2 Budget Format ............................................................................................................. 4-2
4.2.3 Budget Preparation – Participants ................................................................................ 4-2
4.2.4 Congressional Stage ..................................................................................................... 4-2
4.3 Public Disclosure ................................................................................................................. 4-3
4.3.1 Release or Withholding of Information ....................................................................... 4-3
4.3.2 Questions on Public Disclosure ................................................................................... 4-3
4.4 Preparation of the Congressional Stage Budget – President’s Budget
(Appendix) ....................................................................................................................... 4-3
Chapter 5. Budget Execution 5-1
5.1 Overview ............................................................................................................................... 5-1
5.1.1 Purpose ......................................................................................................................... 5-1
5.1.2 Scope ............................................................................................................................ 5-2
5.2 Authorities ............................................................................................................................ 5-3
5.3 Responsibilities .................................................................................................................... 5-6
5.3.1 Coast Guard Financial Management Organizations .................................................... 5-6
5.3.2 Coast Guard Central Management Organizations Other Than Financial .................... 5-8
5.3.3 All Coast Guard Employees Committing and Obligating Funds ................................. 5-9
5.4 Actions Taken Prior to the Start of the Fiscal Year ....................................................... 5-10
5.4.1 Updating and Synchronizing Coast Guard Budget and Accounting Coding
Structure .................................................................................................................... 5-10
5.4.2 Preparing Apportionments Required Prior to the Start of the Year ........................... 5-10
5.4.3 Monitoring the Status of Appropriation Bills ............................................................ 5-11
5.5 Actions Taken at the Start of the Fiscal Year ................................................................. 5-12
5.5.1 Establishing Funding under a Continuing Resolution ............................................... 5-12
5.5.2 Managing Operations under a Continuing Resolution ............................................... 5-12
5.5.3 Managing Operations in the Absence of Appropriations – Funding Hiatus .............. 5-14
5.5.4 Preparing Apportionment and Reapportionment Actions upon the Enactment
of Appropriations ...................................................................................................... 5-14
5.5.5 Establishing and Recording Apportionments, Allotments, and Suballotments ......... 5-15
5.5.6 Preparing the Final Financial Management Operation Plan (FMOP) ........................ 5-16
5.5.7 Meeting OMB Financial Plan Requirements ............................................................. 5-16
5.5.8 Meeting DHS Operating Plan Requirements ............................................................. 5-17
5.5.9 Establishing Operating Plans within the Coast Guard Funds Control Structure ........ 5-18
5.5.10 Coordinating Legal Requirements from Appropriations Language with the
Judge Advocate General & Chief Counsel (CG-094) ............................................... 5-20
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5.5.11 Statutory and Administrative Ceilings – Ceilings in the Authorization Process ..... 5-21
5.5.12 Formulating and Establishing the Financial Management Operation Plan
(FMOP) ..................................................................................................................... 5-23
5.5.13 Revolving Funds ...................................................................................................... 5-25
5.6 Actions Taken during the Fiscal Year ............................................................................. 5-26
5.6.1 Availability of Funds by Purpose............................................................................... 5-26
5.6.2 Commitments – By Document Type and/or Object Class ......................................... 5-34
5.6.3 Recording, Monitoring, Validating, and Certifying Obligations ............................... 5-36
5.6.4 Reporting Violations of Informal Subdivisions of Budget Authority ........................ 5-43
5.6.5 Internal Controls for Budgetary Resource Management ........................................... 5-44
5.6.6 Reimbursable Programs (Coast Guard as Seller) ....................................................... 5-50
5.6.7 Refund Programs (Adjustments between Appropriations, 31 USC 1534)................. 5-63
5.6.8 Operating Expenses – Military and Civilian Pay/Cost of Living (COL) ................... 5-64
5.6.9 Operations & Support (O&S) – Adjustments and Miscellaneous ............................. 5-66
5.6.10 Use of Operations & Support (O&S) Funds ............................................................ 5-73
5.6.11 Research & Development (R&D) – Financial Management Operation Plan
(FMOP) ..................................................................................................................... 5-88
5.6.12 Procurement, Construction, and Improvement (PC&I) – Purpose .......................... 5-94
5.6.13 Reserve Training (RT) – General Responsibilities .................................................. 5-97
5.6.14 Environmental Compliance and Restoration (EC&R) ............................................. 5-97
5.6.15 Oil Spill Liability Trust Fund (OSLTF) ................................................................. 5-104
5.6.16 Alteration of Bridges (AB) – Reprogramming Guidelines .................................... 5-104
5.6.17 Retired Pay (RP) .................................................................................................... 5-104
5.6.18 Industrial Bases – Responsibilities ........................................................................ 5-104
5.6.19 Reprogramming ..................................................................................................... 5-106
5.6.20 Supply Fund ........................................................................................................... 5-110
5.6.21 Special Deposits, Funds, and Receipts ................................................................... 5-110
5.6.22 Accepting Gifts Offered by Non-Federal Sources ................................................. 5-110
5.6.23 Managing Changes in the Amounts of Budgetary Resources in an
Appropriation .......................................................................................................... 5-111
5.6.24 Managing Changes in the Application of Budgetary Resources Within an
Appropriation .......................................................................................................... 5-116
5.6.25 Monitoring the Status of Funds in Operating Plans and Financial Reporting ....... 5-122
5.6.26 Monitoring and Reporting Treasury Appropriation Fund Symbols (TAFSs) ........ 5-122
5.7 Actions Taken at the End of the Fiscal Year................................................................. 5-125
5.7.1 Managing Expired and Cancelled Accounts ............................................................ 5-125
5.7.2 Year-end Reporting and Closeout ............................................................................ 5-133
Chapter 6. Continuing Operations without Appropriations 6-1
6.1 Situation ............................................................................................................................... 6-1
6.2 Policy..................................................................................................................................... 6-1
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Chapter 7. Accounting Policies and Standards 7-1
7.1 Required Use of the U.S. Standard General Ledger ........................................................ 7-1
7.1.1 Overview ...................................................................................................................... 7-1
7.1.2 Authorities ................................................................................................................... 7-2
7.1.3 Responsibilities ............................................................................................................ 7-2
7.1.4 Policy ........................................................................................................................... 7-3
7.2 Obligations – By Document Type and/or Object Class .................................................... 7-4
7.2.1 Purpose ......................................................................................................................... 7-5
7.2.2 Responsibilities ............................................................................................................ 7-6
7.2.3 Policy ........................................................................................................................... 7-7
7.3 Fund Balance with Treasury (FBWT) ............................................................................. 7-28
7.3.1 Overview .................................................................................................................... 7-28
7.3.2 Authorities ................................................................................................................. 7-30
7.3.3 Overall Policy ............................................................................................................ 7-31
7.3.4 Reconciliation of Fund Balance with Treasury (FBWT) ........................................... 7-32
7.3.5 Edit Check Reconciliation ......................................................................................... 7-34
7.3.6 Analysis and Reconciliation of GL Account Relationships and Abnormal
Balances .................................................................................................................... 7-35
7.3.7 Analysis and Reconciliation of GL Control Accounts to Subsidiary and/or
Supporting Records ................................................................................................... 7-36
7.4 Reliance on Financial Data from Other Government Agencies .................................... 7-38
7.4.1 Overview .................................................................................................................... 7-38
7.4.2 Purpose ....................................................................................................................... 7-38
7.4.3 Scope .......................................................................................................................... 7-38
7.4.4 Authorities ................................................................................................................. 7-38
7.4.5 Responsibilities .......................................................................................................... 7-39
7.4.6 Policy ......................................................................................................................... 7-40
7.5 Financial Policy for Real and Personal Property ........................................................... 7-41
7.5.1 Authorities ................................................................................................................. 7-41
7.5.2 Responsibilities .......................................................................................................... 7-43
7.5.3 Recognition and Valuation of Real and Personal Property ........................................ 7-46
7.5.4 Asset Disposal Policy ................................................................................................ 7-48
7.5.5 Impaired Assets .......................................................................................................... 7-48
7.5.6 Oracle Asset Systems ................................................................................................. 7-49
7.5.7 Inventory – Capital Assets ......................................................................................... 7-49
7.5.8 Real Property ............................................................................................................. 7-49
7.5.9 Personal Property ....................................................................................................... 7-49
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7.6 Financial Policy for Operating Materials and Supplies ................................................. 7-50
7.6.1 Authorities ................................................................................................................. 7-50
7.6.2 Responsibilities .......................................................................................................... 7-51
7.6.3 Policy ......................................................................................................................... 7-52
7.7 Financial Accounting and Reporting of INV and OM&S for Coast Guard ICPs ....... 7-52
7.7.1 Purpose ....................................................................................................................... 7-53
7.7.2 Scope .......................................................................................................................... 7-53
7.7.3 Procedures Modifications and Changes ..................................................................... 7-53
7.7.4 Authorities ................................................................................................................. 7-53
7.7.5 Responsibilities .......................................................................................................... 7-54
7.7.6 Policy ......................................................................................................................... 7-57
7.8 Accounting for Coast Guard Internal Use Software ...................................................... 7-62
7.8.1 Overview .................................................................................................................... 7-62
7.8.2 Authorities ................................................................................................................. 7-63
7.8.3 Responsibilities .......................................................................................................... 7-63
7.8.4 Recognition and Valuation ........................................................................................ 7-64
7.9 Financial Policy for Revenue and Accounts Receivable ................................................ 7-69
7.9.1 Overview .................................................................................................................... 7-69
7.9.2 Authorities ................................................................................................................. 7-70
7.9.3 Responsibilities .......................................................................................................... 7-72
7.9.4 Revenue Policy .......................................................................................................... 7-75
7.9.5 Accounts Receivable Policy ...................................................................................... 7-79
7.10 Reimbursable Agreements ............................................................................................ 7-107
7.10.1 Reimbursable Agreements – Coast Guard as Buyer .............................................. 7-107
7.10.2 Reimbursable Agreements – Coast Guard as Seller .............................................. 7-108
7.11 Accounts Payable and Disbursements ......................................................................... 7-113
7.11.1 Overview ................................................................................................................ 7-113
7.11.2 Authorities ............................................................................................................. 7-114
7.11.3 Responsibilities ...................................................................................................... 7-116
7.11.4 Accounts Payable ................................................................................................... 7-117
7.11.5 Accruals ................................................................................................................. 7-119
7.11.6 Disbursements ........................................................................................................ 7-119
7.11.7 Advances and Prepayments ................................................................................... 7-127
7.11.8 Authorized Certifying Officers and Payment Approving Officials ....................... 7-131
7.11.9 Vendor and Contract Payments.............................................................................. 7-133
7.11.10 Purchase Cards ..................................................................................................... 7-136
7.11.11 DHS Fleet Cards .................................................................................................. 7-140
7.11.12 Government Travel Charge Cards ....................................................................... 7-143
7.11.13 Coast Guard Investigative Service (CGIS) Debit Cards ...................................... 7-144
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7.11.14 Imprest Funds....................................................................................................... 7-146
7.11.15 Grant Liabilities ................................................................................................... 7-149
7.11.16 Reimbursable Agreements ................................................................................... 7-151
7.11.17 Revolving Funds .................................................................................................. 7-154
7.11.18 Coast Guard Trust Funds ..................................................................................... 7-157
7.12 Intragovernmental Payment and Collection (IPAC) ................................................. 7-159
7.12.1 Authorities ............................................................................................................. 7-160
7.12.2 Policy ..................................................................................................................... 7-160
7.13 Accrual Policy ................................................................................................................ 7-161
7.13.1 Purpose ................................................................................................................... 7-162
7.13.2 Authorities ............................................................................................................. 7-162
7.13.3 Responsibilities ...................................................................................................... 7-163
7.13.4 Policy ..................................................................................................................... 7-164
7.14 Imputed Costs ................................................................................................................ 7-167
7.15 Unclaimed Monies ......................................................................................................... 7-167
7.15.1 Authority ................................................................................................................ 7-167
7.15.2 Responsibilities ...................................................................................................... 7-167
7.15.3 Policy ..................................................................................................................... 7-168
7.16 Actuarial Liabilities – Military Entitlement Programs .............................................. 7-168
7.16.1 Overview ................................................................................................................ 7-168
7.16.2 Authorities ............................................................................................................. 7-170
7.16.3 Responsibilities ...................................................................................................... 7-174
7.16.4 Policy ..................................................................................................................... 7-175
7.17 Contingent Legal Liabilities ......................................................................................... 7-178
7.17.1 Overview ................................................................................................................ 7-178
7.17.2 Authorities ............................................................................................................. 7-178
7.17.3 Responsibilities ...................................................................................................... 7-179
7.17.4 Policy ..................................................................................................................... 7-180
7.18 Environmental Liabilities ............................................................................................. 7-181
7.18.1 Overview ................................................................................................................ 7-181
7.18.2 Authorities ............................................................................................................. 7-182
7.18.3 Responsibilities ...................................................................................................... 7-183
7.18.4 Policy ..................................................................................................................... 7-185
7.19 Treasury Information Maintenance Process .............................................................. 7-185
7.19.1 Overview ................................................................................................................ 7-185
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7.20 Treasury Payment Confirmation Process ................................................................... 7-186
7.20.1 Overview ................................................................................................................ 7-186
7.20.2 Purpose ................................................................................................................... 7-186
7.20.3 Authorities ............................................................................................................. 7-186
7.20.4 Responsibilities ...................................................................................................... 7-188
7.20.5 Policy ..................................................................................................................... 7-188
7.21 Management of the CAS Outbox Holding Queue in FPD ......................................... 7-189
7.21.1 Overview ................................................................................................................ 7-189
7.21.2 Scope ...................................................................................................................... 7-190
7.21.3 Authorities ............................................................................................................. 7-190
7.21.4 Responsibilities ...................................................................................................... 7-190
Chapter 8. Financial Reporting 8-1
8.1 Monthly, Quarterly, and Year-End Reporting ................................................................. 8-1
8.1.1 Overview ...................................................................................................................... 8-1
8.1.2 Authorities ................................................................................................................... 8-2
8.1.3 Responsibilities ............................................................................................................ 8-3
8.1.4 General Policy .............................................................................................................. 8-6
8.2 Adjustments, Eliminations, and Other Special Intragovernmental
Reconciliations ................................................................................................................. 8-6
8.2.1 Overview ...................................................................................................................... 8-6
8.2.2 CG TIER Adjustments Responsibilities ...................................................................... 8-6
8.2.3 Authorities ................................................................................................................... 8-7
8.2.4 Responsibilities ............................................................................................................ 8-8
8.2.5 Access to CG TIER ...................................................................................................... 8-8
Chapter 9. Coast Guard Financial and Mixed Systems 9-1
9.1 Overview ............................................................................................................................... 9-1
9.1.1 Purpose ......................................................................................................................... 9-1
9.1.2 Scope ............................................................................................................................ 9-1
9.1.3 Definitions ................................................................................................................... 9-2
9.2 Authorities ............................................................................................................................ 9-2
9.3 Responsibilities .................................................................................................................... 9-3
9.3.1 Contracting & Procurement Directorate (CG-91) ........................................................ 9-3
9.3.2 Assistant Commandant for Resources (CG-8) ............................................................. 9-4
9.3.3 Assistant Commandant for Command, Control, Communications, Computers
and Information Technology (C4IT) (CG-6) .............................................................. 9-6
9.3.4 Headquarters, Area, and District Programs ................................................................. 9-8
9.3.5 Coast Guard Training Center Petaluma ....................................................................... 9-8
9.3.6 Coast Guard Training Center Yorktown ...................................................................... 9-8
9.3.7 All Coast Guard Units .................................................................................................. 9-8
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9.4 CFO and CIO Cooperation ................................................................................................ 9-9
9.5 Financial and Mixed Systems Requirements .................................................................... 9-9
9.5.1 Financial Management Data Integrity .......................................................................... 9-9
9.5.2 Financial Systems ...................................................................................................... 9-11
9.5.3 Mixed Systems ........................................................................................................... 9-12
9.5.4 FPD Authorized for Service-Wide Use ..................................................................... 9-13
9.5.5 Inventory of Finance and Procurement Systems ........................................................ 9-13
9.5.6 Data Entry Transmission ............................................................................................ 9-13
9.5.7 Commercial Off-the-Shelf/Government Off-the-Shelf (COTS/GOTS) .................... 9-13
9.5.8 Standard Products ...................................................................................................... 9-13
9.5.9 Comparability and Consistency ................................................................................. 9-14
9.5.10 Integrated Financial Management Systems ............................................................. 9-14
9.5.11 U.S. Standard General Ledger at the Transaction Level .......................................... 9-14
9.5.12 Federal Accounting Standards ................................................................................. 9-14
9.5.13 Financial Reporting .................................................................................................. 9-15
9.5.14 Budget Reporting ..................................................................................................... 9-15
9.5.15 Functional Requirements ......................................................................................... 9-15
9.5.16 Computer Security Act Requirements ..................................................................... 9-15
9.5.17 Documentation ......................................................................................................... 9-15
9.5.18 Internal Controls ...................................................................................................... 9-16
9.5.19 Training and User Support ....................................................................................... 9-16
9.5.20 Licenses ................................................................................................................... 9-16
9.5.21 Maintenance ............................................................................................................. 9-17
9.5.22 Centralized User Administration (CUA) of the Finance and Procurement
Desktop (FPD) .......................................................................................................... 9-17
Chapter 10. Property, Plant, and Equipment (PP&E) 10-1
10.1 Introduction ..................................................................................................................... 10-1
10.2 Financial Accounting and Reporting of Capitalized Real Property ........................... 10-2
10.2.1 Purpose ..................................................................................................................... 10-3
10.2.2 Scope ........................................................................................................................ 10-3
10.2.3 Authorities ............................................................................................................... 10-3
10.2.4 Responsibilities ........................................................................................................ 10-4
10.2.5 Recognition and Valuation of Real Property (including CIP) ................................. 10-6
10.2.6 Improvements .......................................................................................................... 10-7
10.2.7 Costing Methodology ............................................................................................... 10-7
10.2.8 Project Establishment ............................................................................................... 10-8
10.2.9 Project Execution ..................................................................................................... 10-9
10.2.10 Asset Receipt, Acceptance, and Enrollment - Real Property (CIP) ....................... 10-9
10.2.11 Capitalization of Real Property Assets .................................................................. 10-9
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10.2.12 Asset Identification .............................................................................................. 10-11
10.2.13 CIP Project Closeout ............................................................................................ 10-11
10.2.14 Exchange of Nonmonetary Assets ....................................................................... 10-12
10.3 Financial Accounting and Reporting of Capitalized Personal Property .................. 10-12
10.3.1 Purpose ................................................................................................................... 10-13
10.3.2 Scope ...................................................................................................................... 10-13
10.3.3 Modifications to Policy .......................................................................................... 10-14
10.3.4 Authorities ............................................................................................................. 10-14
10.3.5 Responsibilities ...................................................................................................... 10-16
10.3.6 Policy ..................................................................................................................... 10-26
10.4 Deferred Maintenance and Repairs of Assets ............................................................. 10-60
10.4.1 Purpose ................................................................................................................... 10-61
10.4.2 Scope ...................................................................................................................... 10-61
10.4.3 Authorities ............................................................................................................. 10-61
10.4.4 Responsibilities ...................................................................................................... 10-62
10.4.5 General Policy ........................................................................................................ 10-63
10.4.6 Reporting of Deferred Maintenance and Repairs................................................... 10-64
10.4.7 Aviation (AFC-41) Depot-Level Deferred Maintenance ....................................... 10-64
10.4.8 Electronics (AFC-42) Depot-Level Deferred Maintenance ................................... 10-65
10.4.9 Shore Facility (AFC-43) Depot-Level Deferred Maintenance .............................. 10-65
10.4.10 Naval (AFC-45) Depot-Level Deferred Maintenance ......................................... 10-65
10.5 Cost Decision Table and Notes ..................................................................................... 10-66
10.6 Financial Accounting and Reporting of Capital and Operating Leases ................... 10-75
10.6.1 Overview ................................................................................................................ 10-75
10.6.2 Purpose ................................................................................................................... 10-76
10.6.3 Scope ...................................................................................................................... 10-76
10.6.4 Authorities ............................................................................................................. 10-76
10.6.5 Responsibilities ...................................................................................................... 10-77
10.6.6 Policy ..................................................................................................................... 10-80
10.7 Stewardship PP&E ........................................................................................................ 10-86
10.7.1 Overview ................................................................................................................ 10-86
10.7.2 Authorities ............................................................................................................. 10-87
10.7.3 Heritage Assets ...................................................................................................... 10-87
10.7.4 Stewardship Land................................................................................................... 10-88
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Glossary .......................................................................................................................................... i
Acronyms ....................................................................................................................................... i
Forms .............................................................................................................................................. i
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List of Tables
Table 1.1 Control Activities ...................................................................................................................... 1-3
Table 1.2 Timetable of the Congressional Budget Process ..................................................................... 1-10
Table 2.1 Submission of Super Surplus Proposals to Congressional Appropriations Timeline ............. 2-22
Table 2.2 Deliverable Timeline .............................................................................................................. 2-24
Table 2.3 Supply Fund Accounts ............................................................................................................ 2-32
Table 2.4 Explanation of PC&I Product Identification Numbers ........................................................... 2-36
Table 5.1 AFC Codes and Corresponding Managers.............................................................................. 5-72
Table 5.2 Appropriation Matrix .............................................................................................................. 5-90
Table 7.1 Classification of ICP Stock Items ........................................................................................... 7-57
Table 7.2 Required Valuation Documentation by Acquisition Type ...................................................... 7-59
Table 7.3 Accounting Treatment for Software Project Phases ............................................................... 7-65
Table 7.4 Delegations of Authority to Sign Reimbursable Agreements ............................................... 7-111
Table 7.5 Transaction Life Cycle for the Use of Budgetary Resources ................................................ 7-161
Table 7.6 Reporting Periods for Financial Events Requiring Accruals ................................................ 7-164
Table 7.7 Reconciliation of FBWT – ALC ........................................................................................... 7-192
Table 7.8 Reconciliation of FBWT – CG TIER ................................................................................... 7-192
Table 7.9 Reconciliation of FBWT – FINCEN .................................................................................... 7-193
Table 7.10 Reconciliation of FBWT – PPC .......................................................................................... 7-193
Table 7.11 Reconciliation of FBWT – Yard/SFLC .............................................................................. 7-194
Table 7.12 Edit Check Reconciliation – ALC ...................................................................................... 7-195
Table 7.13 Edit Check Reconciliation – CG TIER ............................................................................... 7-196
Table 7.14 Edit Check Reconciliation – FINCEN ................................................................................ 7-197
Table 7.15 Edit Check Reconciliation – Yard/SFLC ............................................................................ 7-198
Table 7.16 Reconciliation of GL Account Relationships and Abnormal Balances – ALC .................. 7-199
Table 7.17 Reconciliation of GL Account Relationships and Abnormal Balances – CG TIER ........... 7-201
Table 7.18 Reconciliation of GL Account Relationships and Abnormal Balances – FINCEN ............ 7-203
Table 7.19 Reconciliation of GL Account Relationships and Abnormal Balances – PPC ................... 7-205
Table 7.20 Reconciliation of GL Account Relationships and Abnormal Balances – Yard/SFLC ....... 7-207
Table 7.21 Reconciliation of GL Control Accounts to Subsidiary Records – ALC ............................. 7-208
Table 7.22 Reconciliation of GL Control Accounts to Subsidiary Records – CG TIER ...................... 7-209
Table 7.23 Reconciliation of GL Control Accounts to Subsidiary Records – FINCEN ....................... 7-210
Table 7.24 Reconciliation of GL Control Accounts to Subsidiary Records – PPC .............................. 7-211
Table 7.25 Reconciliation of GL Control Accounts to Subsidiary Records – Yard/SFLC................... 7-212
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Table 7.26 Required Accruals by Document Type ............................................................................... 7-213
Table 10.1 Capitalization Thresholds – Real Property ......................................................................... 10-10
Table 10.2 Useful Life of Real Property ............................................................................................... 10-11
Table 10.3 Capitalization Thresholds – Personal Property ................................................................... 10-28
Table 10.4 Support Documentation for Asset Receipt and Acceptance ............................................... 10-34
Table 10.5 Documentation Required for Valuation of CIP Assets ....................................................... 10-36
Table 10.6 Initial Useful Life of New Assets for Existing Classes of Aircraft ..................................... 10-39
Table 10.7 Initial Useful Life of New Assets for Existing Classes of Vessels ..................................... 10-40
Table 10.8 Initial Useful Life (in years) of New Assets for Existing Classes of Boats ........................ 10-42
Table 10.9 Estimates of Useful Life for Other Boat Types .................................................................. 10-43
Table 10.10 Initial Useful Life of New Electronics Assets .................................................................. 10-43
Table 10.11 Initial Useful Life of New Assets of Other Personal Property.......................................... 10-44
Table 10.12 Tagging and Identification Requirements for Various Asset Types ................................. 10-44
Table 10.13 Asset Categories and Corresponding OPCOM/Program Offices ..................................... 10-52
Table 10.14 Cost Decision Table for Real and Personal Property Categories ...................................... 10-66
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List of Figures
Figure 5.1 Typical Coast Guard Business Card ...................................................................................... 5-75
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Chapter 1. Introduction to Financial Resource Management
1.1 Purpose and Scope of this Manual
This Manual, Financial Resource Management Manual (FRMM-F), COMDTINST M7100.3
(series), prescribes Coast Guard financial resource management policy. It sets forth
responsibilities, guidelines, timetables, and some procedures for Headquarters (HQ) staffs, areas,
districts, logistics and service center commands, and Headquarters units involved in financial
resource management and administration.
Note: The procedures manual, Financial Resource Management Manual-Procedures (FRMM-
P), COMDTINST M7100.4 (series), was promulgated to provide enterprise-level procedures and
prevent the absence of documented procedures and misalignment of procedures across the Coast
Guard. Financial Resource Management Manual-Procedures (FRMM-P), COMDTINST
M7100.4 (series), includes detailed responsibilities and procedures and definitions.
There are chapters/sections in both the policy and procedure manuals that include duplicate
financial information. The language is placed in both manuals because it is deemed critical to the
process being discussed and/or is considered necessary to properly describe the respective policy
and procedures discussed.
1.2 Financial Resource Management
Financial resource management includes the diligent oversight of all actions that affect the use of
Coast Guard funds. These efforts include:
1. Obtaining funding to carry out the missions, duties, and responsibilities of the Coast
Guard;
2. Exercising good stewardship over the funds provided, by ensuring that they are used for
the purposes for which they were intended and in accordance with applicable laws, rules,
regulations, and policies; and
3. Maintaining audit-ready documentation in accordance with the Information and Life
Cycle Management Manual, COMDTINST M5212.12 (series).
1.2.1 Internal Controls
Management is fundamentally responsible for developing and maintaining effective internal
controls, as prescribed by Office of Management and Budget (OMB), Circular A-123,
Management’s Responsibility for Internal Control. The proper stewardship of Coast Guard
resources is an essential responsibility of financial managers and staff. Coast Guard employees
must ensure that programs operate and resources are used efficiently and effectively to achieve
desired objectives. Programs must operate and resources must be used consistent with the Coast
Guard’s missions, in compliance with laws and regulations, and with minimal potential for
waste, fraud, and mismanagement. Effective internal controls provide assurance that significant
weaknesses in the design or operation of internal controls, that could adversely affect the Coast
Guard’s ability to meet its objectives, would be prevented or detected in a timely manner.
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Internal controls include the policies, procedures, activities, and ethical values designed to
enhance and strengthen existing financial reporting, and ensure that actions are taken to address
risks. Internal control is a process affected by an entity’s oversight body, management, and other
personnel that provides reasonable assurance that the objectives of an entity will be achieved.
These objectives and related risks can be broadly classified into one or more of the following
three categories:
1. Operations - Effectiveness and efficiency of operations
2. Reporting - Reliability of reporting for internal and external use
3. Compliance - Compliance with applicable laws and regulations
Coast Guard’s internal controls are designed to address the following five areas:
1. Control Environment relates to the control consciousness of the people within the
organization.
2. Risk Assessment refers to the organization's identification, analysis, and management of
the risks that are related to financial statement preparation, in order to ensure the financial
statements are presented fairly and in accordance with generally accepted accounting
principles.
3. Information and Communication focus on the nature and quality of information needed
for effective control, the systems used to develop such information, and reports necessary
to communicate it effectively.
4. Monitoring involves assessing the quality and effectiveness of the organization’s internal
control process over time.
5. Control Activities are the policies and procedures that help ensure that management
directives are carried out and that management's assertions in its financial reporting are
valid. They help to ensure that necessary actions are taken to address risks to the
achievement of the entity’s objectives. Control activities (also known as process level
controls) include:
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Table 1.1 Control Activities
Process Level Controls Explanation/Example
Management review
Ensures documentation/information is complete, accurate, appropriate,
consistent, and compliant and provides feedback on errors or uncertain issues.
Example: Review of expenditure transaction supporting an accurate
reconciliation.
Authorization
Ensures that the permission granted for financial decisions and transactions were
granted by the appropriate personnel.
Example: List of authorized approvers agree with the approval signature/sign-
off.
Approvals
Indicates the documents have been reviewed, approved, and considered accurate,
appropriate, and compliant.
Example: Signature/sign-off demonstrating approval of a properly processed
transaction.
Segregation of duties
Ensures that no one person controls a transaction or process from beginning to
end without the review or involvement of at least another person.
Example: One person should not process, approve and reconcile expenditures.
The approval and reconciliation duties should be segregated.
Interface controls
Ensures that data agree after being sent from one system to another.
Example: Verifying that account balances that interface with each other agree.
System configuration
Ensures that a system is correctly performing its features and functions as
designed.
Example: System totaling ledger account balances correctly.
Access controls
Prevents unauthorized access. Ensures that individuals obtain unique, individual
log-in credentials.
Example: Common Access Card coupled with a username and password for
computer log-in.
Reconciliation
Comparison of sources, a financial record and an independently controlled
record, which should result in an explained or zero difference.
Example: Account balances should be compared to control account balances.
Edit Checks
Prevents inappropriate data entry in data fields.
Example: Entering characters in a numeric field will prevent the user from
moving forward when recording the dollar value of a transaction.
Internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting. Reliability of financial reporting means that
management can reasonably make the following assertions:
1. All reported transactions actually occurred during the reporting period and all assets and
liabilities exist as of the reporting date (existence and occurrence);
2. All assets, liabilities, and transactions that should be reported have been included and no
unauthorized transactions or balances are included (completeness);
3. All assets are legally owned by the agency and all liabilities are legal obligations of the
agency (rights and obligations);
4. All assets and liabilities have been properly valued, and where applicable, all costs have
been properly allocated (valuation);
5. The financial report is presented in the proper form and any required disclosures are
present (presentation and disclosure);
6. The transactions are in compliance with applicable laws and regulations (compliance);
7. All assets have been safeguarded against fraud, waste, and abuse; and
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8. Documentation for internal control, all transactions, and other significant events is readily
available for examination.
1.2.2 Consideration of Fraud
Fraud is an intentional act by one or more individuals among management, those charged with
governance, employees, or third parties, involving the use of deception that results in a
misstatement in financial statements that are the subject of an audit. Management has overall
responsibility for the design and implementation of a fraud risk management program, including:
1. Setting the tone at the top for the rest of the organization. An organization’s culture plays
an important role in preventing, detecting, and deterring fraud. Management creates a
culture through words and actions where it is clear that fraud is not tolerated, that any
such behavior is dealt with swiftly and decisively, and that whistleblowers will not suffer
retribution.
2. Implementing adequate internal controls — including documenting fraud risk
management policies and procedures and evaluating their effectiveness — aligned with
the organization’s fraud risk assessment.
3. All Coast Guard personnel should report to their superiors any witnessed or suspected
fraudulent or corrupt activity in accordance with The Coast Guard Fraud Response Plan
promulgated May 2015.
https://cg.portal.uscg.mil/units/cg84/Financial%20Management%20Policies%20%20Proc
edures/Forms/AllItems.aspx?RootFolder=%2Funits%2Fcg84%2FFinancial%20Managem
ent%20Policies%20%20Procedures%2FInterim%20Policies%20and%20Procedures%2F
Risk%20Management&FolderCTID=0x0120001FE18D38AD0A2D43AF058C48325C7
246&View={796C7D03-23B5-4873-B3D6-9F2E1F05B6F5}
Financial managers should obtain the financial staff’s knowledge and understanding of and
viewpoint on fraud. The financial manager should consider the following:
1. Whether the financial staff has knowledge of any fraud or suspected fraud affecting the
Coast Guard;
2. Whether the financial staff is aware of allegations of fraud or suspected fraud affecting
the Coast Guard, for example, received in communications from employees, former
employees, analysts, regulators, or others;
3. The financial staff's understanding about the risks of fraud in the Coast Guard, including
any specific fraud risks the Coast Guard has identified or account balances or classes of
transactions for which a risk of fraud may be likely to exist;
4. Programs and controls the Coast Guard has established to mitigate specific fraud risks the
Coast Guard has identified, or that otherwise help to prevent, deter, and detect fraud, and
how the financial staff monitors those programs and controls;
5. Whether (a) the nature and extent of monitoring of operating locations or business
segments, and (b) there are particular operating locations or business segments for which
a risk of fraud may be more likely to exist;
6. Whether and how the financial staff communicates to employees its views on business
practices and ethical behavior; and
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7. Whether the financial staff has reported to those charged with governance on how the
Coast Guard's internal control serves to prevent, deter, or detect material misstatements
due to fraud.
1.2.3 Coast Guard Fraud Response Plan (FRP)
Federal laws and regulation require Federal agencies to establish internal controls over financial
management systems and business processes. The Coast Guard has developed a Fraud Response
Plan (FRP) which:
1. Enhances internal controls;
2. Provides the guidance necessary to ensure all Coast Guard personnel are equipped with
the tools and resources needed to assist in meeting Coast Guard’s fiduciary duties;
3. Fosters an anti-fraud culture, that protects the integrity of the Coast Guard; and,
4. Requires the reporting of any suspected fraud to appropriate personnel as an essential
requirement in maintaining effective internal controls.
For classification of fraudulent activity and safeguards, detailed definitions, responsibilities, and
procedures on the reporting of actual, alleged, or suspected incidents of fraud, waste or abuse of
Government funds or property, refer to Financial Resource Management Manual-Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 1 (Introduction to Financial Resource
Management).
1.3 Financial Management Accounting Oversight Board (FMAOB)
1.3.1 Overview
In 2009 the Coast Guard established a professional oversight board – the Financial Management
Accounting Oversight Board (FMAOB) – to help ensure consistent and compliant accounting
treatment throughout the Coast Guard. Consistent application of Federal accounting and related
financial management standards across the Coast Guard is an essential task in fulfilling the
agency’s duty to be publicly accountable. The FMAOB will provide guidance to the Chief
Financial Officer (CFO) relating to the appropriate accounting treatment of complex accounting
issues, including providing guidance on interpretation, application, and compliance relating to
Federal laws and regulations, including generally accepted accounting principles (GAAP) and
Department of Homeland Security (DHS) financial management policies.
The FMAOB will institutionalize an enhanced governance structure for financial management
and accounting policy decision-making in support of enterprise-wide Coast Guard financial
management transformation goals in accordance with Federal standards. The FMAOB will
establish oversight and achieve audit readiness by providing authoritative guidance in the
development and updating of financial management and accounting policies to ensure consistent
accounting treatment throughout the Coast Guard.
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1.3.2 Authorities
1. Chief Financial Officers Act of 1990.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Department of Homeland Security Financial Accountability Act. PL 108-330.
https://www.gpo.gov/fdsys/pkg/PLAW-108publ330/content-detail.html
3. Federal Managers’ Financial Integrity Act of 1982 (FMFIA).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
4. Office of Management and Budget (OMB), Circular A-123, Management’s
Responsibility for Internal Control.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
5. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM).
http://cfo-policy.dhs.gov/default.aspx
6. The Coast Guard Directives System, COMDTINST M5215.6 (series).
http://www.dcms.uscg.mil/directives
1.3.3 Responsibilities
1.3.3.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO receives all policy and technical recommendations from the FMAOB
for review, comment, and final approval on the accounting matters presented.
1.3.3.2 Director of Financial Operations/Comptroller (CG-8C)
Commandant (CG-8C):
1. Acts as FMAOB Chair and establishes the direction for the Board, in conjunction with
the Commandant (CG-8)/CFO.
2. Approves the appointment of FMAOB members and maintains the membership roster.
3. Sets each meeting’s agenda, date, and location.
4. Directs the recording of meeting minutes and disseminates the minutes to the Senior
Management Council (SMC) and the Senior Assessment Team (SAT).
5. Reports directly to the CFO on elevated risks, FMAOB recommendations, issue
resolution, task progress, and outstanding issues.
6. Provides final dispute resolution and tie-breaking decision approval authority, in
consultation with the CFO and the SMC.
7. Provides final approval authority on all financial management and accounting policies
forwarded to the CFO for review and comment.
8. Provides a quarterly briefing to the Coast Guard and DHS CFOs and the Coast Guard
SMC on the progress and outputs of the FMAOB.
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9. Provides a technical review of all financial and accounting policies presented to the
FMAOB and forwards the Board’s recommendations to the CFO for review and
approval.
10. Invites the independent audit team to a FMAOB meeting each quarter in order to gain
their perspective on proposed financial management and accounting policies; specifically,
how proposed policies could impact the effectiveness and efficiency of the financial
statement audit.
1.3.3.3 FMAOB Members
FMAOB members:
1. Review and approve:
a. The master inventory list of existing financial management and accounting policies
compiled by Commandant (CG-843); and
b. The priority list of policies being developed, updated, or disputed, compiled by
Commandant (CG-843).
2. Define a standard format for all policies.
3. Review and approve newly developed policies and updated policies.
4. Review and adjudicate policies being disputed for a valid business reason.
5. Delegate authority, as appropriate, for the development of policies, the revision of
policies resulting from dispute resolution decisions, and the training of personnel to
execute approved policies.
6. Review all DHS financial statements and Office of Inspector General and Government
Accountability Office (GAO) audit reports to determine how existing policies can be
strengthened to address audit findings.
7. Contribute to the quarterly briefing of the Coast Guard and DHS CFOs and the Coast
Guard SMC on the progress and outputs of the FMAOB.
8. Serve as advisors to the CFO on financial management and accounting policy matters.
9. Act as liaison between the Coast Guard and the DHS policy group on financial
management and accounting policy issues.
10. Maintain liaison with OMB, the Treasury Department, GAO, and other Federal agencies
on financial management and accounting policy matters.
1.3.3.4 Financial Management Policy Division (CG-843)
Commandant (CG-843):
1. Compiles and maintains a master inventory list of existing financial management and
accounting policies.
2. Compiles and prioritizes a list of policies considered for development or updating, along
with policies being disputed for a valid business reason.
COMDTINST M7100.3F
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3. Meets with key process owners in accounting and financial management areas to obtain
information on new policies to be developed and existing policies to be revised.
4. Reviews the independent auditors’ “Notice of Findings and Recommendations (NFR),”
“Report on Internal Control,” and “Report on Compliance with Laws and Other Matters”
to determine which policies are affected by the issues noted.
5. Reviews Coast Guard Mission Action Plans (MAPs) and the Financial Strategy for
Transformation and Audit Readiness (FSTAR) plan quarterly to determine whether the
MAPs have changed and are still consistent with the issues noted in the reports listed in
Paragraph 4 above.
6. Prepares a task execution schedule recommending the assignment of subject matter
experts (SMEs) and expected timelines to policies approved by the FMAOB for
development, update, or revision resulting from disputes.
7. Coordinates training of Coast Guard personnel to effectively execute all approved
policies.
8. Ensures Commandant (CG-843) attendance at FMAOB meetings. Creates a detailed
record of events regarding policies in the review and approval process, including each
member’s argument for or against the policy under consideration.
9. Maintains a repository of all approved policies in this Manual or other approved
repository, supported by all applicable documentation detailing the development, review,
and approval process. This repository shall be appropriately cross-referenced to the DHS
policy area noted in its repository.
10. Establishes a schedule for annual review of the policies in the repository to evaluate the
continued relevance of all existing policies.
11. Provides a quarterly briefing to the FMAOB on potential new policies to be developed,
progress of on-going policy drafts, problems being encountered in the delivery schedule,
etc.
12. Liaises with representatives from the DHS Office of Financial Management (OFM)
Policy Division and other DHS components in order to learn best practices in technical
accounting policy development.
1.3.4 Policy
1. The FMAOB shall consist of seven members and shall be chaired by the Comptroller or
designated official who will provide advice and direction to the Board on Coast Guard
financial management accounting policy.
2. FMAOB membership shall include:
a. Chair: Office of Director of Financial Operations/Comptroller (CG-8C);
b. Vice chair: Deputy Assistant Commandant for Resources (CG-8D);
c. Member: Director, DHS Office of Financial Management (OFM);
d. Member: Division Chief, Financial Information and Control (FINCEN);
e. Member: professional staff, Audit Remediation Division (CG-845);
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f. Member: professional staff, Mission Support Resources Directorate (DCMS-8); and
g. Member: Judge Advocate General and Chief Counsel (CG-094).
3. Every professional staff member of the FMAOB shall be one of the following: a Certified
Public Accountant (CPA), a licensed attorney, a Certified Government Financial
Manager (CGFM), or a Certified Defense Financial Manager (CDFM).
4. The FMAOB Chair shall schedule all meetings. Regular meetings shall be held on a
monthly basis (or other interval as agreed by the members). Special meetings may be
scheduled at the discretion of the Chair. The meeting agenda shall be determined by the
Chair.
5. FMAOB members shall vote when adopting recommendations or taking action on
matters before the Board. Each member has one vote. A quorum of four members must
be present to vote, and a majority vote of the members present and voting is required to
approve any recommendation or action. Any member sending an alternate shall ensure
that the alternate has the requisite skill set required to address FMAOB issues and the
same final approval authority as the member. The Chair shall forward recommended
policies approved by the Board to the CFO for review and comment.
6. Issues that cannot be resolved by the FMAOB or that require the attention of the Coast
Guard Leadership may be addressed to the CFO or Deputy CFO for further escalation
and/or resolution. Any issue elevated outside the FMAOB shall be recorded in the
meeting minutes and shall be tracked through an issues log.
7. Meeting minutes and action items shall be documented at each meeting, including each
member’s argument for or against the policies under consideration.
8. The FMAOB Charter shall be reviewed by the Board on an annual basis. Proposed
changes shall be forwarded to the CFO and Deputy CFO for approval.
9. The FMAOB may develop or recommend financial policies and procedures in
compliance with GAAP and The Coast Guard Directives System, COMDTINST
M5215.6 (series).
1.4 The Budget Process
Budgeting is a planned, disciplined approach to funds management and is a cornerstone of
financial resource management. To ensure resource allocation and execution decisions are best
aligned with National, Department of Homeland Security (DHS) and Coast Guard priorities, the
Coast Guard uses the Planning, Programming, Budgeting, Execution and Evaluation (PPB&E)
process. It is the process by which planned operations and objectives are translated into their
related financial requirements for purposes of estimating and executing those plans. The budget
provides base levels or standards of performance from which to evaluate results. It is a tool that
best serves its purpose when it is founded on sound financial and management principles
supported by the organization and its people.
The budget process is a general term used to describe how the Coast Guard obtains funding using
PPB&E and the rules it must live by in using the funding provided. This Manual addresses two
major phases of the budget process:
1. Budget formulation (Chapter 4); and
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2. Budget execution (Chapter 5).
1.4.1 Budget Formulation
Budget formulation begins with the preparation of estimated Coast Guard funding requirements
as an operating administration of the DHS. There are two initial stages of the formulation
process, the Forecast Stage and the DHS Stage. The resulting budget estimates are then
incorporated into the Office of Management and Budget (OMB) Stage.
The final product of these efforts becomes part of the President’s Budget, which is submitted to
Congress in late January or early February, thus entering the Congressional Stage of budget
formulation. The budget estimates reflect the missions, programs, and responsibilities assigned
to the Coast Guard, and the policies of the President in carrying out these missions. OMB acts as
the President’s immediate staff in dealing with executive agencies on matters of budget
formulation and, following Congressional action on the budget, on budget execution.
The Congressional budget process is outlined in 2 USC 631. The timetable for any fiscal year is
as follows:
Table 1.2 Timetable of the Congressional Budget Process
On or Before Action to be Completed
First Monday in
February
President submits budget.
15 February Congressional Budget Office submits report to Budget Committees.
Six weeks after
President submits
budget
Committees submit views and estimates to Budget Committees.
1 April Senate Budget Committee reports concurrent resolution on the budget.
15 April Congress completes action on concurrent resolution on the budget.
15 May Annual appropriation bills may be considered in the House.
10 June House Appropriations Committee reports last annual appropriation bill.
15 June Congress completes action on reconciliation legislation.
30 June House completes action on annual appropriation bills.
1 October Fiscal year begins.
Although this schedule is designed to provide appropriations prior to the start of the fiscal year
(1 October), conflicting perspectives of national goals and economic conditions frequently delay
approval beyond that date. In this situation, Congress usually enacts a continuing resolution to
provide interim funding until required appropriations are passed. See Subsections 5.5.1
(Establishing Funding under a Continuing Resolution) and 5.5.2 (Managing Operations under a
Continuing Resolution) of this Manual for additional details.
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1.4.2 Budget Execution
Budget execution and planning for execution begins some eight months prior to the beginning of
the fiscal year, immediately after the President’s Budget is submitted.
1.5 Trademarks
Many of the designations used by manufacturers and vendors to distinguish their products are
claimed as trademarks. The following are some of the trademarks cited this Manual:
1. CheckFree is a trademark of Fiserv, Inc.
2. Cognos is a trademark of Cognos, Inc.
3. Dun & Bradstreet is a trademark of Dun & Bradstreet Corporation.
4. Oracle is a trademark of Oracle Corporation.
5. Microsoft Excel, Microsoft Office 2007, and Windows Vista are trademarks of Microsoft
Corporation.
6. PRISM is a trademark of Compusearch Software Systems, Inc.
7. Sunflower is a trademark of Sunflower Systems.
All other trademarks are the property of their respective owners.
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Chapter 2. Coast Guard Budget Authority and Structure
2.1 Federal Agency Authority to Spend Funds
Federal agencies obtain their authority to “spend” Federal funds via a statute called an
appropriation. Appropriations, as a type of budget authority, permits an agency to incur
obligations and expenditures. Congress usually enacts appropriations in annual appropriations
acts and other laws. An appropriation may make funds available from the General Fund, special
funds, or trust funds, or it may authorize the spending of offsetting collections, which are
credited to expenditure accounts (including revolving funds).
By contrast, authorization acts usually precede appropriation acts, setting a limit by Congress
on itself as to what it may later appropriate for a given purpose. Authorization acts generally do
not make any funds available to an agency. It is not unusual for Congress to skip this
preliminary authorization step.
Authorization acts are the primary source of permanent enabling legislation for agency missions
and functions. Appropriations are needed to execute authorized missions and functions.
See the Financial Resource Management Manual-Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 2 (Coast Guard Budget Authority and Structure) for responsibilities
and procedures detailing the Coast Guard’s authority to spend funds.
2.2 Coast Guard Budget Authority
Coast Guard budget authority comes from a wide variety of statutes. The most common
authorities for funding the Coast Guard’s programs and missions are:
1. The annual DHS appropriations act;
2. Supplemental appropriations;
3. Continuing resolutions; and
4. Revolving funds, special funds, and trust funds.
In addition to these, the Coast Guard is authorized by law to collect monies for goods and
services, fines, and fees. For some of these collections, Coast Guard has Budget Authority
referred to as Offsetting Receipts and Collections. This permits the Coast Guard to obligate and
expend some of the proceeds authorized by law as offsetting receipts and collections. Various
statutes authorize the Coast Guard to safeguard and seize property, including cash, in the course
of conducting operations. Authority to establish and use nonappropriated funds (NAFs) may be
authorized by law, or by agency sanction, policy, and regulation.
In the absence of appropriations (per Office of Management and Budget (OMB), Circular A-11,
Preparation, Submission, and Execution of the Budget):
1. Federal officers may not incur any obligations that cannot lawfully be funded from prior
appropriations unless such obligations are otherwise authorized by law.
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2. Federal officers may incur obligations as necessary for orderly termination of an agency’s
functions, but funds may not be disbursed.
2.2.1 Regular Appropriations
Regular appropriations provide funding for:
1. Operations & Support (O&S).
2. Procurement, Construction, and Improvement (PC&I).
3. Research & Development (R&D).
4. Alteration of Bridges (AB).
5. Retired Pay (RP).
6. Oil Spill Liability Trust Fund (OSLTF). Amounts are derived from the OSLTF for the
O&S, PC&I, and R&D appropriation. The President may apportion up to $50 million per
fiscal year from the OSLTF.
7. Boat Safety (BS). Amounts for Boat Safety are transferred to the Coast Guard from the
Sport Fish Restoration and Boating Trust Fund through the Department of Treasury
Governmentwide Accounting system.
These appropriations are described in the Subsections that follow.
2.2.1.1 Operations & Support (O&S)
The O&S appropriation provides for the operation and maintenance of all authorized Coast
Guard programs and facilities not otherwise specifically provided for in other appropriations or
funds. Unless otherwise directed by Congress in the appropriations language, O&S is typically
an annual appropriation that is available for obligations for one fiscal year.
2.2.1.1.1 Reserve Training (RT)
Effective FY 2019, RT is a PPA within the O&S appropriation that provides for the operation,
recruiting, training, administration, and management of the Coast Guard Reserve Program.
The Director of the Coast Guard Reserve is the official within the Coast Guard who, subject to
the authority, direction, and control of the Secretary of Homeland Security and the Commandant,
is responsible for preparation, justification, and execution of the personnel, operation and
maintenance, and construction budgets for the Coast Guard Reserve. As such, the Director of the
Coast Guard Reserve is the director and functional manager of appropriations made for the Coast
Guard Reserve in those areas.
Per 14 USC 309, the Director of the Coast Guard Reserve shall submit to the Secretary of
Homeland Security and the Secretary of Defense an annual report on the state of the Coast Guard
Reserve and the ability of the Coast Guard Reserve to meet its missions. The report shall be
prepared in conjunction with the Commandant and may be submitted in classified and
unclassified versions.
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2.2.1.1.2 Environmental Compliance and Restoration (EC&R)
Effective FY 2019 EC&R is no longer a standalone appropriation but a part of O&S. EC&R
provides for environmental compliance and restoration of contamination from hazardous
substances and pollutants at all current and former Coast Guard facilities. It provides for
identification, investigation, and cleanup, and also physical changes to Coast Guard buildings
and structures, in order to comply with Federal, State, and local environmental laws and
regulations. Prior to fiscal year 2012, EC&R funds were available until expended (no-year
funds). However, recent appropriation language states that EC&R funds are to remain available
for five years.
2.2.1.2 Procurement, Construction, and Improvement (PC&I)
The PC&I appropriation provides for the acquisition, construction, rebuilding, and improvement
of vessels, aircraft, shore facilities, aids to navigation (ATON) systems and facilities, and
command, control, Command, Control Communications, Computers and Information
Technology (C4IT) systems and related equipment. PC&I funds are normally available for
obligation as follows:
1. Acquisition, repair, renovation, and improvement of vessels: typically five fiscal years.
2. Acquisition, repair, renovation, rebuilding, and improvement of shore facilities and
ATON: typically five fiscal years.
3. Acquisition, repair, renovation, and improvement of new aircraft and increases in aircraft
capability: typically five fiscal years, but can be three fiscal years.
4. Acquisition, construction, replacement, or improvement of capital equipment related to
the above categories or for other specific purposes: typically five fiscal years.
5. Personnel and administrative expenses: typically one fiscal year.
2.2.1.3 Research & Development (R&D)
The R&D appropriation provides funding for applied scientific research and development. This
includes funds for pay, allowances, and related personnel support costs, as well as the
maintenance, rehabilitation, lease, and operation of related facilities and equipment. Prior to
Fiscal Year 2012, R&D funds were typically available until expended (no-year funds). In Fiscal
Years 2012 and 2013 R&D funds were appropriated to remain available for five years. In Fiscal
Years 2014 through 2016, R&D funds were appropriated to remain available for three years.
2.2.1.4 Alteration of Bridges (AB)
Pursuant to the Truman-Hobbs Act (54 Stat. 497, 33 USC 511-523) governing bridge alterations,
and in accordance with the Coast Guard Authorization Act of 1996, permanent authority exists in
49 USC 104(e) to transfer funds from the Federal-Aid Highways discretionary bridge program to
the Coast Guard to finance alteration of obstructive highway bridges.
The AB appropriation provides for the Government’s share of altering or removing railroads and
publicly owned bridges that obstruct navigable waterways in the United States. The
administrative costs associated with this appropriation are funded under the O&S appropriation.
AB funds are normally available until expended (no-year funds).
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2.2.1.5 Retired Pay (RP)
The RP appropriation provides for the pay of former military members of the Coast Guard, the
Coast Guard Reserve. It also funds survivor annuity payments under the Retired Serviceman’s
Family Protection Plan and the Survivor Benefit Plan (SBP), as well as medical benefits for
retirees and their dependents. RP is an annual appropriation and generally remains available until
expended. In other words, these funds are known as no-year funds as opposed to most annual
appropriations that expire at the end of one year.
RP is also designated as a mandatory appropriation not subject to 31 U.S.C. § 1341 the
Antideficiency Act. RP may make obligations in excess of available budget authority as this
appropriation supports statutory entitlement programs. However, obligations made in excess of
available budgetary authority may only be liquidated once new appropriations are enacted.
2.2.1.6 Oil Spill Liability Trust Fund (OSLTF)
Title 1 of the Oil Pollution Act (OPA) of 1990 (33 USC 2701 et. seq.) includes authorization
language governing the uses of the OSLTF. Title 6 (33 USC 2752) includes special provisions
authorizing permanent definite and permanent indefinite appropriations for specific purposes, as
well as a requirement that all other OSLTF funds be subject to annual appropriations.
The Energy Policy Act of 2005, PL 109-58, reinstated a five-cent per barrel tax on oil received at
a U.S. refinery or petroleum product entering U.S. ports, to be deposited into the OSLTF to be
used to finance oil pollution prevention, response, and enforcement activities of various Federal
agencies.
2.2.1.6.1 OSLTF Spending
The Coast Guard uses the OSLTF for:
1. Operation & Support – Congress may appropriate not more than $25 million dollars from
the OSLTF for operations and support of the Coast Guard. This annual appropriation is
available for administrative, operation, and personnel costs and other expenses necessary
and incidental to carry out OPA 90 with respect to prevention, removal, and enforcement.
2. Oil spill response (Emergency Fund) – A permanent definite (no-year) appropriation of
$50 million per year (not all of which may be apportioned by OMB for any given year),
administered by the National Pollution Funds Center (NPFC), for immediate response to
oil spills and substantial threats of such spills by Coast Guard and Environmental
Protection Agency (EPA) Federal On-Scene Coordinators (FOSCs) in accordance with
the National Contingency Plan (40 CFR 300). To the extent that $50 million is
inadequate, the Coast Guard may obtain an additional advance of up to $100 million,
unless otherwise provided by law.
3. Oil spill claims (Claims Fund) – A permanent indefinite warrant authority extended to the
Coast Guard National Pollution Funds Center to pay all valid claims for oil spill response
costs and damages authorized by OPA to injured parties resulting from oil spills.
Note: Recent annual appropriation acts have provided funds derived from the OSLTF for R&D
expenses. These funds are available for R&D administrative, operation, and personnel costs and
other expenses necessary to carry out the purposes of Section 1012(a)(5) of the Oil Pollution Act
of 1990.
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2.2.1.6.2 OSLTF Receipts
Two categories of receipts are deposited back into the OSLTF:
1. Cost recovery from liable responsible parties for the costs of Federal response to oil spills
and for claims paid from the OSLTF for oil spill response costs and damages.
2. Certain civil and criminal fines and penalties, including administrative and judicial fines
or penalties for violations of Sections 309 and 311 of the Clean Water Act, penalties
under the Deepwater Port Act of 1974, and penalties under Section 207 of the Trans-
Alaska Pipeline Authorization Act. Clean Water Act administrative fines and penalties
may be collected by the Coast Guard or the EPA, since both agencies have enforcement
authority under the Clean Water Act. Judicial fines or penalties are collected by the
Department of Justice or local U.S. attorneys.
2.2.1.7 Boat Safety (BS)
There are appropriations and transfers from the Sport Fish Restoration and Boating Trust Fund to
carry out the provisions of Title 16 of the U.S. Code (USC) Chapter 10B–Fish Restoration and
Management Projects. This provision of 16 USC includes funding for a boat safety account.
The Boat Safety account is also governed by 46 USC Chapter 131–Recreational Boating Safety,
which provides the use of funding for the development and implementation of a coordinated
national recreational boating safety program. Current provisions of the law provide for the
transfer of highway trust fund revenue derived from the motorboat fuel tax, and certain other
taxes, to the Sport Fish Restoration and Boating Trust Fund. Congress authorizes appropriations
and transfers from this fund for Coast Guard and State recreational boating safety assistance, and
other programs specified by law. The Boat Safety funds are available until expended (no-year
funds).
2.2.2 Supplemental Appropriations
Supplemental appropriations are legislatively funded adjustments to the Coast Guard budget
authority. These appropriations are provided in various statutes and are outside the normal
annual budgeting process in order to address funding needs that are often emergent in nature.
Examples of supplemental funding are annual pay increases, Operation Desert Shield/Storm, the
Midwest floods of 1993, and Hurricane Sandy.
2.2.3 Continuing Resolutions
Continuing resolutions are stopgap legislation enacted to continue operations whenever Congress
and the President have not completed action on appropriations acts by the beginning of the fiscal
year. A continuing resolution generally covers a short period of time (i.e., one to three weeks).
Several continuing resolutions may be needed at the beginning of the fiscal year before the
regular appropriations are enacted. However, continuing resolutions have, on occasion, provided
budget or spending authority and limitations for an entire fiscal year.
2.2.4 Operating with No Appropriations
Occasionally a fiscal year will begin with neither a regular appropriation nor a continuing
resolution in place. In the absence of appropriations (per OMB Circular A-11):
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1. Federal officers may not incur any obligations that cannot lawfully be funded from prior
appropriations unless such obligations are otherwise authorized by law.
2. Federal officers may incur obligations as necessary for orderly termination of an agency’s
functions, but funds may not be disbursed.
Chapter 6 (Continuing Operations without Appropriations) provides specific instructions and
policies for continuing operations without appropriations.
2.2.5 Revolving Funds
Specific provisions of law for self-financing operations authorize revolving funds. Funds are
obtained by charging customers for services or materials furnished. The income from such
operations is available in its entirety for meeting authorized expenses.
Once capitalized, annual appropriations are not normally made for revolving funds (they are
meant to be self-sufficient), though an appropriation may be made to increase the total capital
structure, if necessary.
2.2.5.1 Supply Fund (SF)
The Coast Guard Supply Fund is authorized by 14 USC 941. It finances the procurement of
uniform clothing, subsistence provisions, general stores, technical material, and fuel for specified
facilities. The fund is normally financed by reimbursements from the sale of goods, unless
otherwise provided for by statute or an appropriation.
2.2.5.2 Yard Fund (YF)
The Coast Guard is authorized to finance industrial activities with a revolving fund by
14 USC 939. The Coast Guard used this authority to create the Yard Fund, which finances the
industrial operations of the Coast Guard Yard. The Yard provides services such as construction,
repairs, and alteration of vessels and boats; and fabrication of buoys and other special items for
the Coast Guard and other Government agencies (OGAs). The Government customers pay the
Yard for these services from their respective appropriations. The charges to the customer by the
Yard are based upon recovery of its total industrial cost because the statute requires that amounts
in excess of the actual cost be returned to the customers.
2.2.6 General Gift Fund
The Coast Guard General Gift Fund is authorized by 10 USC 2601 and is maintained to account
for gifts, devises, and bequests. The Coast Guard uses the money in the Gift Fund as specified
by the donor in the devise or bequest. This fund is financed by gifts, bequests, and proceeds
from interest and dividends. The fund is not financed by Congressional appropriations.
2.2.7 Sales, Fees, Fines, and Other Collections
The Coast Guard is authorized by law to collect monies for goods and services that it provides
and specific fines collected and recovery of expenses. Sources include:
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1. Goods and services provided to Coast Guard personnel (e.g., sale of meals at Coast
Guard dining facilities (CGDFs));
2. Goods and services provided to other agencies (e.g., issues of electronic parts from the
SFLC to a DOD command);
3. User fees from goods and services provided to the public (e.g., Marine Safety User Fees);
4. Fines and judgments collected (e.g., boating safety violations);
5. Miscellaneous fees collected (e.g., FOIA requests);
6. Recovery of Federal funds used to clean up oil spills;
7. Sales of excess property, including military housing and lighthouses; and
8. Collections for the repair or replacement of CG property damaged or destroyed by a
private person.
Funds collected may only be used as authorized by law – they cannot be automatically used to
fund the operations and maintenance (O&M) of Coast Guard units.
Units that receive or collect funds must safeguard them handle them in accordance with
established procedures, and ensure that they are only used for purposes provided by law.
Note: Safeguarding collections means placing under lock and key in a secure location with
limited access and, if cash or check, deposit into Coast Guard/U.S. Government Treasury
accounts as soon as possible.
Establishing detailed policies and procedures for all types of funds collected by the Coast Guard
(i.e., user fees, fines and penalties, etc.) is not included in this Manual. For detailed policy see
References in Section 7.9 (Financial Policy for Revenue and Accounts Receivable) of this
Manual.
2.2.8 Reimbursable Activities
1. Interagency Agreements (IAA): Reimbursable activities describe those activities wherein
the Coast Guard acts as a seller (provider) of goods or services and is entitled to
reimbursement of all or part of the costs of its performance. The annual budget submitted
to Congress develops costs and funds required for programs to be carried out through
appropriations made directly to the Coast Guard. However, to ensure that the budget
presents a complete picture of the Coast Guard’s operations and to ensure there is
sufficient and anticipated reimbursable authority apportioned, the estimated costs of the
reimbursable activities are included in the OMB and Congressional Stage budgets.
2. User Fees: The Coast Guard has specific legislated authority to be reimbursed for costs
related to the collection of user fees and the annual costs of providing vessel
documentation services to recreational vessel owners. Reimbursement of these costs
related to collections are credited to the Appropriation from which originally expended.
2.2.9 Imprest Funds
An imprest fund is a fixed cash fund in the form of currency, coin, or Government check. The
fund is advanced to a duly authorized cashier for cash disbursement when other methods of
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payment are not feasible (e.g., cash purchase of fuel at a foreign port). See U.S. Coast Guard
Certifying and Disbursing Manual, COMDTINST M7210.1 (series).
2.2.10 Nonappropriated Funds (NAFs)
NAFs are typically used for morale, well-being, and recreation (MWR) programs, and also by
the Coast Guard Exchange System (CGES). Policies and procedures governing NAFs may be
found in Coast Guard Morale, Well-Being, and Recreation Manual, COMDTINST M1710.13
(series), and Coast Guard Nonappropriated Fund Instrumentalities (NAFI) Manual,
COMDTINST M7010.5 (series).
A portion of nonappropriated MWR funds, known as Extraordinary Expense Funds (XXFs), are
set aside annually into the Coast Guard Trust Fund Operating Account to provide a nominal
allocation to flag officers and other members of senior leadership to be used to further the
welfare of the Coast Guard family. If funds are available, a portion of the XXF funds may also
be budgeted for other Commandant-approved uses, such as flag officer change of command,
flowers for Arlington funerals, and other centrally funded activities for the benefit of the Coast
Guard family. Questions regarding the use of these funds should be referred to Commandant
(CG-81).
2.2.11 Cash and Property Recovered or Seized
Coast Guard units sometimes recover or seize property, including cash, in the course of
conducting operations. All cash and property thus obtained must be safeguarded and used only
for the purposes authorized by law. Policies and procedures for handling such property are
specified in U.S. Coast Guard Personal Property Management Manual (PPMM), COMDTINST
M4500.5 (series), and also in the directives governing the activity being conducted at the time
that the property is recovered or seized.
2.2.12 Other Budget Authority
The basic forms of budget authority provided by federal law include appropriations, borrowing
authority, contract authority, and authority to obligate and expend offsetting receipts and
collections.
2.2.12.1 Overview
The Department of Homeland Security (DHS) receives the majority of its funding through the
regular annual discretionary DHS appropriations act; however, a significant portion of its
resources are obtained through other budget authority. These other funding mechanisms include
fees, resources from the Treasury Forfeiture Fund (TFF), and National Intelligence Program
funding. In addition, pursuant to 21 USC 173(b)(8), the Secretary of DHS is required to submit
drug control budgets to the Office of National Drug Control Policy (ONDCP) for those DHS
components that expend budgetary resources on counterdrug activities. This is referred to as the
“drug control” budget and a description of that process is also included in this Subsection of
policy.
The largest of these other sources is fees. For example, at DHS, approximately 97 percent of the
U.S. Citizenship and Immigration Service’s (USCIS) budget is fee-funded. While the USCIS
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budget is an anomaly within the Department, U.S. Customs and Border Protection (CBP),
Transportation Security Administration, National Protection and Programs Directorate (NPPD),
and U.S. Immigration and Customs Enforcement (ICE) also are resourced partially through the
collection of fees.
Another source of funding is the TFF administered by the Treasury Executive Office for Asset
Forfeiture (TEOAF). The TFF is the receipt account for deposit of nontax forfeitures (TFF is
comprised of forfeited cash, proceeds from the sale of forfeited property and amounts remitted in
lieu of forfeiture) made pursuant to laws enforced or administered by participating Treasury and
DHS agencies (CBP, ICE, Coast Guard, and USSS). The availability of funds from the TFF
varies from year to year based on the amount of forfeited funds recovered and priorities set by
TEOAF. The TFF is available to reimburse participating agencies’ costs of seizure and forfeiture
of assets and other law enforcement-related expenses.
Policy covered in this Section includes;
1. DHS Fee Proposal Framework
2. Treasury Asset Forfeiture Fund
3. National Intelligence Program
4. Office of National Drug Control Policy
2.2.12.2 Purpose
The purpose of this Section is to provide guidance to the Coast Guard concerning other budget
authorities that includes user fees, Treasury Asset Forfeiture Fund, National Intelligence
Program, and Office of National Drug Control Policy.
2.2.12.3 Scope
All Coast Guard units that execute budget authority are subject to the provisions of this policy.
2.2.12.4 Modifications
It may be necessary to periodically update this policy to reflect changes in life cycle events, as
well as changes in laws, regulations, accounting standards, DHS-specific guidance, or
management objectives. Program managers shall review and oversee the policy implementation
changes in local desk guides or procedures, as appropriate.
2.2.12.5 Definitions
appropriation – A provision of law authorizing the expenditure of funds for a given purpose.
Usually, but not always, an appropriation provides budget authority. An authorization by act of
Congress to incur obligations for specified purposes and to make disbursements from the U.S.
Treasury Department.
budget authority - Authority provided by law to enter into obligations, which result in
immediate or future outlays involving Government funds. The basic forms of budget authority
are appropriations, contract authority, and borrowing power.
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budget execution - The process by which the financial resources made available to an agency
are directed and controlled toward achieving the purposes and objectives for which the resources
were approved.
Budget Justification - The documents that an agency submits to the appropriations committees
in support of its budget request. OMB prescribes justification materials, which typically explain
changes between the current appropriation and the amounts requested for the next fiscal year.
expenditure - A payment made to liquidate an obligation.
obligations - The legal requirement to pay orders placed, contracts awarded, services received,
and similar transactions. Any act that legally binds the Government to make payment creates an
obligation.
program, project, or activity (PPA) - An element within a budget account. For annually
appropriated accounts, the Office of Management and Budget (OMB) and agencies identify
PPAs by reference to committee reports and budget justifications; for permanent appropriations,
OMB and agencies identify PPAs by the program and financing schedules that the President
provides in the “Detailed Budget Estimates” in the budget submission for the relevant fiscal year.
Program activity structures are intended to provide a meaningful representation of the operations
financed by a specific budget account—usually by project, activity, or organization.
Resource Allocation Decision - The Secretary's formal approval of component RAPs at the
close of the Program Review. The RAD is issued after the Program Review Board deliberates on
the RAP. RADs will set resource allocation guidance for components for the Future Years
Homeland Security Program and become the basis for the budget submission to OMB.
Resource Allocation Plan - DHS components annually develop proposed programs consistent
with the Integrated Planning Guidance. These programs, expressed in the RAP, reflect
systematic allocation of resources required to achieve missions, objectives, and priorities, and
potential alternative methods of accomplishing them. Resource requirements reflected in RAPs
are translated into time-phased funding requirements. RAPs must account for long-term
requirements and resources including human capital, construction and investments, operating and
maintenance, and potential disposal or termination costs, and program performance goals. RAPs
are submitted to PA&E in late March and initiate the annual Program Review.
Super Surplus - The Super Surplus Fund is available for obligations or expenditures in
connection with law enforcement activities of any Federal agency or of a Department of the
Treasury law enforcement organization.
User fee - A fee assessed to users for goods or services provided by the Federal Government.
User fees generally apply to federal programs or activities that provide special benefits to
identifiable recipients above and beyond what is normally available to the public. User fees
normally are related to the cost of the goods or services provided. Once collected, they must be
deposited into the general fund of the Treasury, unless the agency has specific authority to
deposit the fees into a special fund of the Treasury. An agency may not obligate against fees
collected without specific statutory authority.
zero-based budget - A budget technique that attempts to analyze budget requests without an
implicit commitment to sustaining past levels of funding. Under this system, programs and
activities are organized and budgeted in a detailed plan that focuses review, evaluation, and
analysis on all proposed operations rather than on increases above current levels of operations, as
in incremental budgeting. Programs and activities are analyzed in terms of successively
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increasing levels of performance and funding, starting from zero, and then evaluated and ranked
in priority order. The purpose is to determine the level, if any, at which each program or activity
should be conducted.
2.2.12.6 Authorities
1. The Public Law 101-576, Chief Financial Officers Act of 1990.
https://www.congress.gov/bill/101st-congress/house-bill/5687/text
2. Public Law 109-469, ONDCP Reauthorization Act of 2006.
https://www.congress.gov/109/plaws/publ469/PLAW-109publ469.pdf
3. Title 21, U.S. Code Section 1703, “Appointment and duties of Director and Deputy
Directors”.
https://www.law.cornell.edu/uscode/text/21/1703
4. Title 31 U.S. Code Section 902, “Authority and functions of agency Chief Financial
Officers”.
https://www.law.cornell.edu/uscode/text/31/902
5. Title 31, U.S. Code, Section 9703, “Department of the Treasury Forfeiture Fund”.
https://www.law.cornell.edu/uscode/text/31/9705
6. Government Accountability Office, A Glossary of Terms Used in the Federal Budget
Process (GAO-05-734SP) (September 2005).
http://www.gao.gov/new.items/d05734sp.pdf
7. Office of Management and Budget (OMB), Circular A-19, Legislative Coordination and
Clearance.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
8. Office of Management and Budget (OMB), Circular A-25, User Charges.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
9. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 2.4, “Budget Execution”.
http://cfo-policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section
%202.4%20Budget%20Execution.pdf
2.2.12.7 Responsibilities
The following are the offices and their respective responsibilities for other budget authority.
2.2.12.7.1 DHS Budget Director
1. Coordinates, reviews, and approves the proposal with DHS counsel, budget, finance,
policy legislative affairs, operational programs, public affairs, and industry engagement
offices.
2. Prioritizes all DHS fee proposals department-wide.
3. Submits proposals to OMB and the necessary Congressional committees; DHS Budget
Director will act as the liaison between the component, OMB, and Congressional
committees to respond to any questions or arrange for required meetings.
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4. Provides final resolution on the proposal to the component.
5. Ensures the proposals are reviewed and cleared by the Office of General Counsel, Office
of Policy, and Office of the Chief Information Officer (OCIO) for information
technology-related requests.
6. Officially submits material to TEOAF and providing copies of final submissions to the
Components.
7. Maintains a list of proposals submitted to DHS Office of the Chief Financial Officer
(OCFO) as part of the TEOAF Super Surplus process.
2.2.12.7.2 DHS Budget Division
Modifies all Congressional Justification table templates to ensure column headers do not
inappropriately use the word “request”.
2.2.12.7.3 Department of Homeland Security (DHS)
Distributes guidance on the process and priorities for Super Surplus funding to the Components.
2.2.12.7.4 DHS OCFO
Compiles all components’ requests for Super Surplus funding into a consolidated package.
2.2.12.7.5 CFO, in coordination with the Office of Policy (PLCY)
Seeks guidance from the Office of the Secretary concerning specific DHS-wide priorities that
should be considered in component submissions.
2.2.12.7.6 Steering Committee
1. Reviews, vets, and ranks Super Surplus proposals to ensure that the proposals are aligned
with, and are grouped by, secretarial and departmental priorities.
2. Develops the criteria and assessment instrument used to review, vet, and rank Super
Surplus proposals.
3 Provides the CFO Council with its recommended consolidated and prioritized package of
Super Surplus proposals.
2.2.12.7.7 CFO Council
Provides its recommendations and, if necessary, identifying any outstanding issues that need to
be taken to the Deputy Secretary for final resolution.
2.2.12.7.8 Office of the Chief Financial Officer (OCFO)
1. Submits the consolidated and prioritized package to OMB for review before submission
to TEOAF.
2. Adjusts the proposals to the funding guidelines in the Super Surplus Plan and clearing the
revised packet through DHS Clearance.
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3. Ensures the revised packet of proposals conforms to articulated departmental priorities
and operational need.
2.2.12.7.9 Treasury Executive Office for Asset Forfeiture (TEOAF)
Calculates the funds available for the Super Surplus and developing a Super Surplus Plan
commensurate with the available funding.
2.2.12.7.10 DHS OCFO Budget Division
Distributes additional guidance and templates for specific drug budget deliverables to the
relevant components.
2.2.12.8 Policy
2.2.12.8.1 DHS Fee Proposal Framework
Much of the DHS mission is accomplished with collections from user fees. DHS’s Fiscal Year
(FY) 2015 budget includes approximately $9 billion in user fee collections to fund agency
programs. There exists considerable variation across the Components relating to the authorities
for user fees and the development and budgeting of user fees. With appropriate authorities, user
fees may offer opportunities to leverage funding beyond that which Congress provides through
the discretionary annual appropriations process to support critical Departmental operations.
For additional guidance on user fees policy, see Chapter 7, Section 7.9.5.5 (User Fees) of this
Manual.
This framework is intended to allow components latitude in operations and recognizes the
variations in authorities for user fee while also providing structure and guidance in future user
fee efforts. The framework provides guidance to developing fee proposals while promoting
information sharing Department-wide. It is a Department-wide attempt to establish governance
policies for user fees.
Components should adopt the following standards in the development of fee proposals:
1. Applicability. This framework applies to any user fee proposals that will result in new or
changes to existing fees.
2. Timing of Proposals. User fee proposals, including proposals to establish a new fee and
revise or update an existing fee, should be submitted to DHS once the proposal is clearly
defined and approved by the component head and, where feasible, at the same time as the
Resource Allocation Plan (RAP) submission. Fee proposals must be in accordance with the
requirements in OMB Circular A-19. The items in the checklist found in Section 5 (Fee
Proposal Checklist) below should be submitted to the DHS OCFO Budget Division and
Program Analysis and Evaluation (PA&E) as part of the RAP submission. This will allow
for consideration with all the other new initiatives.
3. Legislative Jurisdiction.
a. In order to have the best chance of success for adoption, fee proposals that require
legislative action should fully consider legislative jurisdiction and should include, in
coordination with the component’s office of congressional relations, the development
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of an enactment strategy. When necessary, component and DHS resources should be
engaged as part of this strategy in order to optimize the potential for success.
b. When necessary, if legislative changes are part of the proposal, legislative language
must be approved by the component’s chief counsel office, coordinated with the
component’s office of congressional relations, and included with the fee proposal.
4. Funding strategies. When the authority exists to use fee revenue, user fees may allow DHS
to increase performance or capacity, which is beneficial to DHS components, other federal
agencies, the private sector, and the public at large. In many cases, specific user fees have
their own budget submission requirements and Treasury Account Fund Symbols. Office of
Management and Budget (OMB), Circular A-25, User Charges provides general policy on
determining the amount of user charges to assess.
5. Budget Presentation of Fees. DHS develops justifications for most, but not all, of the
Department’s fee programs. Standard exhibits and templates must be used to ensure that
there is consistency as to what information about the fee programs is included in
Congressional Justifications.
The following Subsections detail policy for DHS Fee Proposal Framework.
1. Timing of Proposals
a. Purpose. The purpose of this Section is to discuss the timing of when a component
within DHS should submit a proposal to adjust its fees. User fee proposals should be
submitted to DHS once the proposal is clearly defined and approved by the component
head and at the same time as the RAP submission. The attached checklist details the
information that must be included in the packet that is submitted to the DHS Budget
Division and DHS PA&E as part of the RAP submission. This will allow for
consideration with all the other new initiatives.
b. Background. Any component within DHS that has user fees must conform to the
requirements of the Chief Financial Officers Act of 1990 (CFO Act). Section 205 of
the CFO Act, specifically 31 U.S.C. 902(a)(8), requires each agency's Chief Financial
Officer to “review, on a biennial basis, the fees, royalties, rents, and other charges
imposed by the agency for services and things of value it provides, and make
recommendations on revising those charges to reflect costs incurred by it in providing
those services and things of value.” If, after completing a review, the Component
recommends adjusting user fees, the appropriate official must provide this information
to the DHS Office of the Chief Financial Officer (OCFO) and the Office of General
Counsel in sufficient time to introduce this adjustment into the federal budgeting
process.
c. Discussion. Components need to sufficiently plan to incorporate the impact of
establishing a new fee or adjusting existing fees into the budget formulation process.
The component must estimate when a new fee or fee adjustment is likely to occur,
including any administrative and regulatory time required. Budget projections based
on a current operating plan (or spending plan) also must be available for the time
period. If the biennial period is FY 2018/2019, the component normally will use FY
2018 as the base for a 3-year budget projection. However, based on the particular fee
program being analyzed, a zero-based budget for the 2-year biennium may be
appropriate instead of using the year before the biennium as a base. The intent is to
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inform DHS that a fee adjustment or establishment is being considered for its
program. In some instances, the component may be required to show how much
additional fee revenue is needed.
The component should utilize its existing processes to conduct fee reviews in order to
determine how much additional revenue is needed or to what extent fees will change
as a result of a biennial review. If the component is denied the request to propose a fee
adjustment, its next request should reflect this decision. For example, if the adjustment
is a critical need, but is denied in the FY 2018-2022 Resource Allocation Decision
(RAD), the component should resubmit its request in the subsequent budget cycle.
The nature of a biennial fee review is to identify trends in anticipated workloads, costs
to handle those workloads, and the anticipated necessary fee levels. Due to this nature,
if a component is conducting a fee review, according to the requirements discussed in
OMB Circular A-25, the fee review should be planned such that the review will be
complete and the fee adjustment will be vetted with DHS, OMB, and Congress (as
necessary) in time for DHS to publicize the fee adjustment (e.g., through a notice of
proposed rulemaking) on the same day as the President’s Budget is delivered to
Congress. This will allow adequate time for public comment (if required) and
implementation planning so that the new fee schedule will be in place on the first day
of the appropriate fiscal year.
Fee proposals that require new or modified statutory authority should be submitted
along with other DHS legislative proposals. Components should not include funds
associated with new or modified fee proposals in their RAPs, OMB Submissions, or
Congressional Justifications until statutory changes have been enacted into law.
2. Legislative Jurisdiction
a. Purpose. The purpose of this Section is to establish a DHS-wide governance policy for
user fee proposals that provides component latitude, Department-wide guidance, and
promotes information sharing. Specifically this discussion will focus on providing
DHS with an outline that may be used for implementing Department-wide policy for
drafting user fee proposals. The discussion will only focus on legislative jurisdiction
and legislative language aspects.
b. Background. Currently, user fee proposals are developed mostly within respective
DHS components. DHS has not established Department-wide user fee proposal
guidance and thus, there is little information sharing across the Department regarding
such proposals. Each DHS component has developed its own unique process to draft,
prioritize, and implement user fee proposals.
c. Discussion. In establishing Department-wide user fee proposal guidance, DHS can
better leverage opportunities to attain the necessary fee resources to achieve important
aspects of the DHS mission. Increased commonality and information sharing across
the Department can help to fully integrate and prioritize user fee proposals consistent
with the budget formulation process.
Legislative jurisdiction and legislative language are components of any DHS user fee
proposal policy. Department-wide guidance in these areas is intended to provide
components with sufficient latitude to promote a cohesive budget formulation process
for both discretionary and mandatory resources.
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DHS policy regarding legislative jurisdiction and legislative language is that:
1) Components are responsible for maintaining a detailed knowledge of existing user
fee authorizations.
2) When possible, components should fully utilize existing fee authorizations to
establish or maintain user fees.
3) When current authorizations are insufficient, components are responsible for
identifying integrated internal teams to develop new or revised fee authorities.
Subject matter experts from component counsel, budget, finance, policy legislative
affairs, congressional relations, operational programs, public affairs, and industry
engagement offices should be considered for team membership.
4) Components are responsible for full coordination and approval of each proposal
within the component and submission to DHS.
5) At a minimum the proposal should include:
(1) legislative language that is necessary to impose a new fee or to alter an
existing fee;
(2) Congressional committee(s) that are required (if applicable) to take action
regarding the proposed legislation;
(3) integration into the budget formulation process as required.
6) DHS Budget Director is responsible for coordination, review, and approval of the
proposal with DHS counsel, budget, finance, policy legislative affairs, operational
programs, public affairs, and industry engagement offices.
7) DHS Budget Director is responsible for Department-wide prioritization of all DHS
fee proposals.
8) DHS Budget Director is responsible for proposal submission to OMB.
9) DHS Budget Director is responsible for proposal submission to the necessary
Congressional committees.
10) DHS Budget Director will act as the liaison between the component, OMB, and
Congressional committees to respond to any questions or arrange for required
meetings.
11) DHS Budget Director will provide final resolution on the proposal to the
component.
3. Funding Strategies
a. Funding Sources. The main source of funding that allows DHS to finance federal
programs or activities is funding from annual and other appropriations. However,
funding may be authorized in the form of user fees, user charges, or excise taxes. User
fees recover part or all of the costs of these programs and activities – the cost of
providing a benefit that is beyond what is normally available to or consumed by the
general public – from the identifiable users/beneficiaries of those programs and
activities. Since user fees represent a charge for a service provided by the government
or for a benefit from a government program, payers expect and deserve a well-defined
correlation between the fees imposed and the cost of providing the services or
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benefits, and they have expectations about the quality of the related services or
benefits.
Statutes dictate whether the user fee collections may be dedicated to a specific
program or, alternatively, whether they must be deposited into the General Fund of the
Treasury where the collections remain available to fund general Government
expenditures. Where the governing statute is silent on the disposition of fee
collections, they must be deposited as miscellaneous receipts into the general fund (see
31 U.S.C. 3302(b)).
User fees are collected either directly by DHS Components or by an outside party,
such as a Department of Treasury lockbox service provider, and then are deposited in
the appropriate Treasury account.
b. Use of Funding. User fee operating plans include estimated collections and allocate
these amounts to fund eligible expenses as defined by the fee’s statutory authorities on
use of the funding.
4. Budget Presentation of Fees
a. Purpose. The purpose of this Section is to establish a DHS-wide governance policy for
presenting user fees in budget documentation, such as Congressional Justifications.
This Section focuses on what information should be included in budget
documentation. In addition, this Section presents the factors that should be considered
whether Congressional Justifications should be developed for individual fee programs.
b. Background. DHS develops Congressional Justifications for most of the Department’s
fee programs. However, there are some significant fee programs for which DHS does
not develop Congressional Justifications, such as the Merchandise Processing Fee.
c. Discussion. At a minimum, the Congressional Justifications should include the
following information for all fee programs:
1) Statutory authority. The legislative language authorizing the fee along with a plain
language description of what the legislative language authorizes.
2) Uses. A description of what the statute authorizes in terms of activities and
expenditures.
3) Change mechanism. A discussion of how changes can be made to the fee program.
If changes can be made through a regulatory process, the Congressional
Justifications should provide details of the time frames and necessary stages
associated with the regulatory process. If changes can be made only through the
statutory process, provide the names of the congressional committees that would
have jurisdiction over such legislation.
4) Previous changes. A discussion of the last time that changes were made to the fee
program and how that change was attained.
5) Recovery rate. The Congressional Justification should include a discussion of
whether or not the fee is designed to recover the full cost of the program services
provided and whether or not those fees that are designed to achieve full-cost
recovery actually are achieving it. Additionally, for those fee programs that are not
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achieving full-cost recovery, an estimate should be provided of the actual recovery
rate.
Congressional Justifications should be developed for all discretionary fee
programs. Congressional Justifications also should be developed for all mandatory
fee programs that generate more than $10 million in revenue annually. In addition,
components should consider developing Congressional Justifications for
mandatory fee programs that generate less than $10 million in revenue where the
program could be considered of particular interest or priority to the congressional
appropriations committees.
For mandatory fees or other fees over which the appropriations committees have
no jurisdiction, Congressional Justifications should avoid the terminology “Budget
Request.” The word “request” implies that the committee has jurisdiction in setting
fee levels and is misleading and inaccurate. Use of the term “request” in
mandatory fee budget documents has caused displeasure with members of the
appropriations committee staffs in the past. Budget documents should use the
terminology “Budget Estimate” in lieu of “Budget Request.” The DHS Budget
Division will modify all Congressional Justification table templates to ensure that
column headers do not inappropriately use the word “request.”
5. Fee Proposal Checklist
a. At a minimum, any fee proposal should include the following information and provide
answers to the following questions:
1) Name of Fee
2) Administration or DHS objective that fee supports
3) Existing or proposed fee rate
4) Proposed change (if any)
5) Background on who currently is charged the fee and discussion of any proposed
changes
6) Are there any other DHS Fees charged to the same industry segment? (Have you
done an economic impact analysis that factors in other fees assessed against the
same user population?)
7) What is the duration of the fee?
8) What congressional committee will have (or has) jurisdiction?
9) What is the problem/challenge that you are trying to address?
10) What is the proposed legislation (if applicable)?
11) What is your strategy for gaining support on behalf of the fee proposal?
12) Has there been any OMB, congressional, or public feedback/support on the
possibility of this fee increase?
13) Coordination, if any, with other Executive Branch departments for free
implementation matters (e.g., collection and reimbursement mechanisms)
14) Contact person for further information
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15) Nominating official
2.2.12.8.2 Treasury Asset Forfeiture Fund
The TEOAF oversees the TFF (See 31 U.S.C. § 9703), which is the receipt account for the
deposit of nontax forfeitures made pursuant to laws enforced or administered by Department of
the Treasury and DHS law enforcement agencies. The TFF was established in 1992 as the
successor to what was then the Customs Forfeiture Fund. The TFF participating agencies are:
1. Internal Revenue Service Criminal Investigations Division (IRS-CI), U.S. Department of
the Treasury;
2. ICE, DHS;
3. CBP, DHS;
4. U.S. Secret Service, DHS; and
5. Coast Guard, DHS.
The TFF is a special fund. Special funds are federal fund collections that are earmarked by law
for a specific purpose. These funds can be allocated and used without the enactment of an annual
appropriation by Congress. Expenses of the TFF are set in a relative priority so that unavoidable
costs, known as mandatory expenses, are met first.
The enabling legislation for TFF (Title 31 U.S.C. § 9703) defines those purposes for which
Treasury forfeiture revenue may be used. In addition to the agencies listed above, the funds can
be allocated to other law enforcement entities that do not have forfeiture authority, such as the
Financial Crimes Enforcement Network, Federal Law Enforcement Training Center (FLETC),
and the Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau.
The statutory authority requires that available funding is used to meet mandatory expenses of the
TFF, including:
1. Storing and maintaining seized and forfeited assets. Investigative expenses incurred in
pursuing a seizure.
2. Certain costs of local police agencies incurred in joint law enforcement operations.
3. Following deposits of forfeited cash, proceeds from forfeited property sales, and amounts
remitted in lieu of forfeiture, funds may be paid to:
a. reimburse participating agencies’ costs of seizure and forfeiture of assets;
b. pay expenses to include costs of investigation and satisfaction of liens;
c. pay for training, promote cooperation among Federal, state, and local law enforcement
agencies;
d. reimburse expenses related to expenses of sale/destruction of contraband;
e. pay informant awards and expert services;
f. reimburse persons for costs incurred in their cooperation; and
g. serve as a source of funding for international asset sharing.
The following Subsections detail policy for Treasury Asset Forfeiture Fund.
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1. Super Surplus Fund
After mandatory expenses are accounted for, the remaining unobligated balance can be
distributed through the Super Surplus process. Unlike the mandatory funding that is strictly
designed to support forfeiture-related law enforcement activities, the Super Surplus Fund is
available for obligations or expenditures in connection with law enforcement activities of
any Federal agency or of a Department of the Treasury law enforcement organization.
a. Components that wish to submit proposals for Super Surplus funding through the TFF
must submit a package, including all of their proposals for the following fiscal year,
no later than mid-April to DHS OCFO. DHS OCFO compiles all components’
requests into a consolidated package that will be cleared internally and through OMB
before submission to TEOAF on or before early June.
b. Although the authority governing the use of Super Surplus funds is very broad,
making Super Surplus funds available for obligations or expenditures in connection
with law enforcement activities of any Federal agency, as a matter of policy, Treasury
tends to support proposals that are likely to provide a return on investment to the fund.
Super Surplus funds cannot be requested for programmatic activities or equipment
appropriated by Congress.
c. Other components (other than those identified in Section 3.2 of this Policy) may
submit requests, as long as they fund law enforcement activities of U.S. Federal law
enforcement agencies, have a law enforcement agency or component designated as
fiscal agent, and address TEOAF and DHS priorities.
1) Components may work together to develop joint proposals.
2) Components requesting Super Surplus funding should work with the appropriate
DHS Budget Division Desk Officer to ensure that proposals address TEOAF and
DHS priorities.
2. Super Surplus Funding Proposal Process
The DHS process for preparing, reviewing, and submitting Super Surplus funding proposals
is as follows:
a. DHS distributes guidance on the process and priorities for Super Surplus funding to
the Components. As part of preparing the guidance, the CFO, in coordination with the
Office of Policy (PLCY), will seek guidance from the Office of the Secretary
concerning specific DHS-wide priorities that should be considered in component
submissions.
b. The components send this information to the program offices along with submission
deadlines and other elements that the component may require.
c. Each component compiles its proposals into a prioritized submission that reflects the
strategic and tactical priorities of the component, as well as DHS as a whole.
Components are responsible for ensuring that proposals undergo a thorough internal
clearance process including clearance from component headquarters budget, legal,
policy, and information technology staff.
d. The Component forwards the approved submission to the DHS CFO at least 6 weeks
before the submission due date to TEOAF, with a written indication (email is
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acceptable) that the Component’s senior leadership (Chief of Staff or higher) has
cleared the submission. This should be received by DHS OCFO no later than mid-
April based on the Request for Proposals sent by OCFO Budget Division.
e. By late April, a Steering Committee made up of personnel from OCFO, PLCY, and
relevant DHS Components will be convened to review, vet, and rank Super Surplus
proposals to ensure that the proposals are aligned with, and are grouped by, secretarial
and departmental priorities; this maximizes the impact of any funding received.
f. DHS Budget Director is responsible for ensuring that the proposals are reviewed and
cleared by the Office of General Counsel, Office of Policy, and Office of the Chief
Information Officer (OCIO) for information technology-related requests.
g. The Steering Committee develops the criteria and assessment instrument used to
review, vet, and rank Super Surplus proposals.
h. By early May, the Steering Committee provides the CFO Council with its
recommended consolidated and prioritized package of Super Surplus proposals and is
prepared to discuss the methodology behind the recommendations.
i. By late May, the CFO Council, guided by a strategic priorities framework and any
other applicable integrated planning guidance, provides its recommendations and, if
necessary, identifies any outstanding issues that need to be taken to the Deputy
Secretary for final resolution.
j. By early June, OCFO submits the consolidated and prioritized package to OMB for
review before submission to TEOAF.
k. By late June, the DHS Budget Division officially submits the material to TEOAF and
provides copies of final submissions to the Components.
l. The DHS Budget Division maintains a list of proposals submitted to DHS OCFO as
part of the TEOAF Super Surplus process, and Components provide updates as needs,
priorities, and costs change.
m. At the end of the fiscal year, TEOAF calculates the funds available for the Super
Surplus and develops a Super Surplus Plan commensurate with the available funding.
n. DHS OCFO works with the Components to adjust the proposals to the funding
guidelines in the Super Surplus Plan and clears the revised packet through DHS
Clearance.
o. DHS OCFO works with Components and the CFO Council, as needed, to ensure that
the revised packet of proposals conforms to articulated departmental priorities and
operational need.
p. Once approved, the revised Super Surplus proposals are transmitted to OMB and then
to the House and Senate Appropriations Committees for approval. Congressional
approval often comes in March/April.
3. Timeline for Submission of Super Surplus Proposals to Congressional Appropriations
Committees:
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Table 2.1 Submission of Super Surplus Proposals to Congressional Appropriations Timeline
Month Process Step
Mid-February
DHS CFO sends guidance to Components for Super Surplus
proposals
Mid-March
Formal call for Super Surplus proposals from Components to their
program offices
Early April
Super Surplus proposals due to Components from program offices
Mid-April
Super Surplus proposals due to DHS Budget Director from
Components
Late April
DHS Budget Director convenes a Steering Committee made up of
personnel from OCFO, PLCY, and relevant DHS Components to
review, vet, and rank Super Surplus proposals
Early May
The Steering Committee provides the CFO Council with its
recommended consolidated and prioritized package of Super Surplus
proposals
Late May
The CFO Council provides its recommendations and, if necessary,
identifies any outstanding issues that need to be taken to the Deputy
Secretary for final resolution
Early-June
DHS Budget Director transmits consolidated package of proposals to
OMB for clearance
Late June
Consolidated package of proposals submitted to TEOAF by DHS
September 30
Once the fiscal year is over, TEOAF calculates the funds available
for the Super Surplus and develops a Super Surplus Plan
Late Fall-Early
Spring
DHS Budget Director works with Components and CFO Council to
adjust the proposals to the funding guidelines in the Super Surplus
Plan
The Budget Director puts the revised packet of proposals into DHS
Clearance for final review and clearance
Once the revised packet of proposals is cleared, the Budget Director
sends it to OMB for clearance
Once cleared by OMB, the Budget Director transmits the packet of
proposals to the House and Senate Appropriations Committees for
approval
Congressional approval of the Super Surplus proposals often comes
in March-April
2.2.12.8.3 National Intelligence Program
The U.S. intelligence budget has two major components: the National Intelligence Program
(NIP) and the Military Intelligence Program. The NIP includes all programs, projects, and
activities of the intelligence community as well as any other intelligence community-related
programs designated jointly by the Director of National Intelligence (DNI) and the head of a
department or agency, or the DNI and the President. The NIP provides authority to spend
intelligence program funds for activities in several Federal departments, including DHS’s Office
of Intelligence and Analysis (I&A), Coast Guard, and OCIO.
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The majority of I&A’s budget and a small part of the Coast Guard and OCIO budgets are
authorized to be funded in the NIP. As the Department’s Chief Intelligence Officer, the Under
Secretary for I&A works with the Office of the Director of National Intelligence (ODNI) to
develop its annual NIP budget request. ODNI budget execution reporting requirements are
described in FMPM 2.4, Budget Execution. See Chapter 5, Subsection 5.6.19.1.3
(Reprogramming of National Intelligence Program (NIP) Funding) of this Manual for guidance
related to reprogramming requests of funding for the NIP.
2.2.12.8.4 Office of National Drug Control Policy
ONDCP advises the President on drug-control issues, coordinates drug-control activities and
related funding across the Federal Government, and produces the annual National Drug Control
Strategy, which outlines Administration efforts to reduce illicit drug use, manufacturing, and
trafficking; drug-related crime and violence; and drug-related health consequences.
Pursuant to 21 U.S.C. § 1703, each fiscal year, the head of each department, agency, or program
of the Federal Government with responsibilities under the National Drug Control Program
Strategy shall transmit to the Director of National Drug Control Policy a proposed drug control
budget request. The Secretary of DHS shall ensure timely development and submission of
proposed drug control budget requests for those components who expend budget resources on
counter-drug activities. The DHS Components that participate in this process are CBP, the
Federal Emergency Management Agency (FEMA), FLETC, ICE, and Coast Guard.
Under the authority of the ONDCP Reauthorization Act of 2006, ONDCP produced three budget
circulars (similar to OMB Circulars). The following three budget circulars include:
1. Budget Formulation. Provides instructions in preparing drug control budget proposals for
submission, certification, and inclusion in the National Drug Control Budget.
2. Budget Execution. This circular contains procedures for reprogramming requests, transfers,
and the guidance for submission of the Annual Financial Plan.
See Chapter 5, Subsection 5.6.19.1.2 (Reprogramming of National Drug Control Policy
(NDCP) Funding) in this Manual for guidance related to reprogramming of National Drug
Control Policy funding.
3. Drug Control Accounting and Performance. Agencies are required to conduct an annual
detailed accounting of all funds expended for National Drug Control Activities. The report
is authenticated by the DHS Office of Inspector General (OIG) if the component’s total
drug budget exceeds $50 million. If the Drug Budget is less than $50 million, this falls
under the unreasonable burden exception and the component produces the Accounting and
Performance report directly.
The following Subsections detail policy for Office of National Drug Control Policy.
1. Content of Drug Control Budget Requests
Each year around June, the ONDCP Director sends a letter to the DHS Secretary stating
ONDCP’s priorities for the DHS Components as it relates to the drug budget. The DHS
OCFO Budget Division will distribute additional guidance and templates for specific drug
budget deliverables to the relevant components.
Components then will begin drafting their drug control budget requests. These shall include
all requests for funds for any drug control activity undertaken, including demand reduction,
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supply reduction, and any drug law enforcement activities. If an activity has both drug
control and nondrug control purposes or applications, the program shall estimate by a
documented calculation the total funds requested for that activity that would be used for
drug control, and shall set forth in its request the basis and method for making the estimate.
Component drug budgets shall include a narrative summary and a table displaying detailed
funding and personnel resources. The narrative program summary is a high-level overview
of the agency’s mission and a description of the agency’s approach to counter-drug
activities. Components shall populate a Resource Summary table that mirrors the 3-year
budget profile of the Department’s OMB submissions. The table details drug resources by
function displayed for both appropriations and programs, projects, or activities. The table
also should list the total amount of full-time equivalents dedicated to counter-drug
activities.
After the submission of the Fall Drug Budget, the ONDCP Director will issue a letter to the
DHS Secretary certifying the Department’s Drug Budget for the coming President’s Budget
Submission.
2. Deliverables and Timeline
The following table displays the deliverable, timeline, and a brief description of the
deliverable. Note that additional information regarding budget execution deliverables can
be found in Department of Homeland Security, Financial Management Policy Manual
(FMPM) Section 2.4 (Budget Execution).
Table 2.2 Deliverable Timeline
Deliverable Name
Timeline
Description
Summer Budget
Submission
Due prior to the
OMB Budget
Submission
ONDCP reviews the requested topline
funding levels and performance to determine
if the request addresses the National Drug
Control Strategy and the annual funding
guidance.
Fall Budget Certification
With the OMB
Budget Submission
Components submit funding levels and
performance goals for counter-drug
activities. ONDCP analyzes the submission
and issues Fall Budget Certification Letter to
the DHS Secretary.
Accounting and
Performance Summary
Reporting
Due around
February 1st each
year
Handled by OIG (with the exception of
FEMA and FLETC because they are under
the $50 million unreasonable burden
threshold).
Budget and Performance
Summary
Late
December/Early
January
The Budget Summary presents resources and
performance as part of the National Drug
Control Strategy.
Financial/Execution Plan
45 days after
enactment
A comparison of the request to enacted
levels as it relates to the Drug Submission.
Reprogramming/Transfer
Notification
Prior to
Congressional
Notification
ONDCP must approve
reprogramming/transfers in excess of
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Deliverable Name
Timeline
Description
$1,000,000 that are included as part of the
Drug Budget methodology
2.3 Subappropriation Accounts
Subappropriation accounts break down appropriations, apportionments, or allotments into
smaller accounts and functional categories that serve as tools for funds control, and for assigning
responsibilities for funds management. Subappropriation accounts for specific appropriations,
earmarks, and allowance fund codes are subdivisions of budget authority used to assign
responsibility for obligations and expenditures.
2.3.1 Apportionment
Funding is provided to an agency through an appropriation or fund account. The Coast Guard
then must receive an apportionment from OMB before it can “spend” funds (i.e., incur
obligations). Apportionments typically divide the funds available for obligation by time periods
(usually quarters for O&S) or lump sum for PC&I.
2.3.1.1 Allotments and Suballotments
Allotments or suballotments are formal subdivisions of budget authority made by DHS or the
Coast Guard, which allows authorized officials to incur obligations not to exceed a specified
amount.
Each appropriation (or project for PC&I), revolving fund, trust fund, and special fund must be
allocated to a single allotment or suballotment (i.e., a formal subdivision of budget authority).
For direct appropriations and special funds, Coast Guard issues suballotments to Deputy
Commandants, Assistant Commandants, or Directors of Headquarters-managed programs,
projects, or activities (PPAs) in accordance with the approved Financial Management Operation
Plan (FMOP), not to exceed the amounts apportioned by OMB.
2.3.1.2 Program, Project, or Activity Category (PPA)
A PPA is a major category within an appropriation. The Government Accountability Office has
defined a PPA as an element within a budget account. For annually appropriated accounts, the
Office of Management and Budget (OMB) and agencies identify PPAs by reference to
committee reports and budget justifications; for permanent appropriations, OMB and agencies
identify PPAs by the program and financing schedules that the President provides in the
“Detailed Budget Estimates” in the budget submission for the relevant fiscal year. Program
activity structures are intended to provide a meaningful representation of the operations financed
by a specific budget account—usually by project, activity, or organization. Examples of a PPA
would be Military Pay and Allowances PPA in the Operations & Support or National Security
Cutter PPA in the Procurement, Construction and Improvement (PC&I) appropriation.
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2.3.1.3 Allowance Fund Control Code (AFC)
AFCs represent the next sub-division of funding below the sub-allotment level for O&S. AFCs
represent administrative operating targets for specified purposes. PPAs are subdivided into one
or more AFCs.
2.3.1.4 Administrative Target Unit (ATU)
ATUs consist of logistics and service center commands, districts, areas, Headquarters staffs, and
Headquarters units that are authorized to receive funding authority. An ATU receives a funding
allocation from an AFC.
2.3.1.5 Target (Funding)
Targets are amounts established at each level of funds distribution for the obligation of funds
within program areas or projects.
2.3.1.6 Project Targets (PTs)
PTs represent the planned obligation ceilings for project-oriented efforts in the PC&I, AB, and
R&D appropriations, in EC&R (a PPA within the O&S appropriation), and in some of the
project-oriented special funds. The appropriation manager normally issues project targets to the
Headquarters staffs, areas, logistics and service center commands, districts, and Headquarters
units for administration at their respective levels.
2.3.1.7 Program Element (PE)
A program element represents a source of funds under the command or oversight of an ATU.
PEs are used to fund a particular unit or effort. Allowance managers or ATU budget officers are
authorized to distribute this funding.
2.4 Operations & Support (O&S) Allowance Fund Control Codes
The O&S allowance fund control codes (AFCs) are described in the Subsections that follow. For
more detailed explanations of how to use the O&S AFCs refer to the Financial Resource
Management Manual - Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 2,
Appendices 2-1 through 2-20.
2.4.1 AFC-01 Military Pay
AFC-01 is a parent term that refers to the combination of AFC-10, AFC-11, and AFC-12. AFC-
01 includes compensation, subsistence rations, and entitlements for active duty members, cadets.
Specifically, AFC-10 is used for all payroll expenses such as basic pay, basic housing allowance,
and basic subsistence allowances. AFC-11 is used for non-payroll direct expenditure expenses to
include Auxiliary orders meal reimbursement, basic daily food allowance (BDFA), and recruit
uniform issue. AFC-12 is used for other non-payroll expenses such as galley contracts, leased
housing, and transit benefits.
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2.4.2 AFC-08 Civilian Pay
Compensation, benefits, and costs associated with civilian salaried employees, Permanent
Change of Station (PCS), and reimbursable positions in the Coast Guard.
2.4.3 AFC-20 and AFC 21 Permanent Change of Station (PCS)
Travel and transportation expenses incident to PCS orders for military personnel and their
dependents. AFC-20 is used for advances and tax payments associated with PCS moves. AFC-
21 includes the remainder of PCS costs, and non-standard travel for decedent affairs, dependent
students, early return of dependents, and environmental morale leave.
2.4.4 AFC-30 Operating and Maintenance
General unit-level operating and maintenance (O&M) expenses, including ordnance.
Travel, per diem, and tuition for formal training intended for field execution of training that is
not approved nor funded through the class convening schedule for Coast Guard class “A” and
“C” resident and exportable training courses.
2.4.5 AFC-34 Training and Recruiting Centers
General operating and maintenance expenses associated with the following training and
recruiting centers:
1. Aviation Technical Training Center (ATTC), Elizabeth City, NC;
2. Aviation Training Center (ATC), Mobile, AL;
3. Coast Guard Academy, New London, CT;
4. Coast Guard Institute, Oklahoma City, OK;
5. Coast Guard Recruiting Command (CGRC), Arlington, VA;
6. Container Inspection Training and Assistance Team (CITAT), Oklahoma City, OK;
7. FORCECOM, Norfolk, VA;
8. Leadership Development Center, New London, CT;
9. Maritime Law Enforcement (MLE) Academy, Charleston, SC;
10. Personnel Service Center (PSC), Arlington, VA;
11. Special Missions Training Center (SMTC), Camp LeJeune, NC;
12. Training Center (TRACEN) Cape May, Cape May, NJ;
13. TRACEN Petaluma, Petaluma, CA;
14. TRACEN Yorktown, Yorktown, VA; and
15. Training Quota Management Center (TQC), Chesapeake, VA.
This allowance fund control code allows the Coast Guard to segregate operating and
maintenance expenses specific to the training and recruiting centers, and facilitates accurate
reporting of that information. AFC-34 funds support the operating and maintenance expenses for
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Coast Guard training and recruiting centers in the same way AFC-30 supports other units. Also,
because AFC-34 funds are a subdivision of PPA #3 (Program Project and Activity) for Training
and Recruiting, AFC-34 funds may be used for tuition, formal training, and other costs without
reprogramming actions.
2.4.6 AFC-36 Central Accounts
General Coast Guard accounts for centralized bill payment that is managed at Headquarters.
Accounts include Ammunition (AMMO), Buoys, Enterprise Communication/Network Services,
enterprise Cyber network defenses, GSA (Rent and Security), Medals, Postal charges, Standard
Workstations (SWS), and certain depot-level maintenance of IT systems—not specifically
provided for by AFC-42 or other AFCs, Industrial Recapitalizations, and Working Capital
Funds. Each account has a direct manager, but the overall management of AFC-36 is performed
by Commandant (CG-83).
2.4.7 AFC-40 Other Activities
Funds for operating projects or expenses approved by Commandant (CG-8). AFC-40 is also
commonly used to centrally hold funds that are not restricted in use at a PPA level until they are
distributed. A common example of unrestricted funding is Overseas Contingency Operations
(OCO) funding.
2.4.8 AFC-41 Aeronautical Engineering
Depot-level maintenance expenses incurred in support of the Aviation Logistics Support
Program.
2.4.9 AFC-42 Command, Control, Communications, and Electronics
Engineering
Depot-level maintenance expenses incurred in support of standard electronics Command,
Control Communications, Computers and Information Technology (C4IT) systems. General
expenses related to inventory, repair, alteration, modification, services directly related to depot-
level maintenance of support of Command, Control Communications, Computers and
Information Technology (C4IT). These general expenses cannot significantly add to the
underlying assets capacity or capability.
2.4.10 AFC-43 Civil Engineering
Depot-level maintenance expenses incurred in support of the Shore Infrastructure Logistics
Center (SILC). General expenses related to the maintenance of real property (land, buildings,
and structures) to preserve and maintain capability. Costs include nonrecurring major
maintenance and repairs, alterations, code compliance, demolition, direct project support cost
(i.e., travel, engineering design services, permits, inspections, etc.), and minor improvements
within the minor construction authority.
2.4.11 AFC-45 Naval Engineering
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Depot-level maintenance expenses incurred in support of the Naval Engineering Logistics
Support Program.
2.4.12 AFC-56 Training
Formal training performed as a temporary assignment duty (TAD) for civilian, military
personnel, reserve members, and auxiliarists.
Note: For reserve members, AFC-56 (later refunded through the Reserve Training (RT) to O&S
refund process) is used for the costs of anticipated Class A and C School training quotas in
support of Reserve Component readiness as well as to address training costs for personnel filling
military and civilian Full Time Support (FTS) positions.
2.4.13 AFC-57 Health, Safety, and Work-Life
General expenses to support health care for military members and their dependents.
2.4.14 AFC-75 Reimbursable/Refund Program
A “contra” reimbursable account administered by the Office of Resource Management (CG-83)
in conjunction with an associated AFC-80 parent account facilitates reimbursement for approved
reimbursable activity which can occur outside of dedicated AFC-80 accounts (i.e., AFC-01, 08,
30, etc.). This account ensures the associated obligation and subsequent expenditure is captured
within the parent AFC-80 reimbursement account and provides accounts receivable notification
for a valid Uncollected Order Amount (UCO). (A contra account provides a more detailed
presentation of an account balance. For example, “accumulated depreciation” is a contra account
for fixed assets and highlights the depreciation that reduces the book value of such assets. The
account and its related contra account are combined to show the net balance of the fixed asset.)
2.4.15 AFC-77 Reimbursable Execution Account
This reimbursable budget authority account is managed by Commandant (CG-83). This account
collects an administrative fee charged for processing reimbursable agreements.
2.4.16 AFC-80 Reimbursements
This general account is used for establishing and identifying reimbursable agreements and
reimbursements from user fees for services to the public. A purpose of AFC-80 is to accept and
expend funds in the Coast Guard accounting system for reimbursable work for other Government
agencies and non-Government entities in accordance with specific legislative authority. The
account is also used to manage user fee transactions in the Coast Guard’s accounting system both
for budget execution and for reimbursement for allowable expenses associated with providing
services to the public and in accordance with specific legislative authority. AFC-80 is managed
and controlled by Commandant (CG-83).
2.4.16.1 AFC-80 Reimbursable CERCLA Accounts
The Coast Guard and the EPA are parties to a Memorandum of Understanding (MOU) that
provides the Coast Guard with access to funding from the Hazardous Substance Superfund, the
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trust fund established under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA) (42 USC 9604). Each fiscal year one or more interagency agreements
(IAAs) transfer CERCLA funds from the EPA to the Coast Guard. The Coast Guard establishes
AFC-80 reimbursable accounts to enable spending of the funds and then bills EPA for
reimbursement of expenditures against the accounts.
2.4.16.2 Incident-Specific Funds
The Coast Guard uses CERCLA AFC-80 incident-specific funds for Coast Guard Federal On-
Scene Coordinators (FOSCs) to respond to hazardous-substance incidents in the Coastal Zone
(including costs for contractors) and for National Strike Force (NSF) operations nationwide in
support of specifically designated hazardous substance incidents. Procedures for the use of these
funds are set by the NPFC. Guidance for the use of incident-specific CERCLA funds can be
found in the National Pollution Funds Center User Reference Guide, located at
http://www.dcms.uscg.mil/directives and in the National Contingency Plan (40 CFR 300),
located at http://www.access.gpo.gov/nara/cfr/waisidx_02/40cfr300_02.html.
2.4.16.3 Management and Support Funds
AFC-88 is the management and support (M&S) account, also known as the ongoing activities
account, used to support the Coast Guard’s capability to respond to external hazardous substance
releases, not EC&R actions for internal Coast Guard pollution issues. These funds are limited in
application, and some procedures for their use are different from the procedures for standard
Coast Guard O&S funds. Procedures for the use of these funds are set by the National Pollution
Funds Center.
The Coast Guard’s M&S funds are used for the personnel, functions, activities, training, and
equipment/property purchases needed to build or maintain the Coast Guard’s hazardous
substance response capability. There are two cost centers responsible for these funds:
1. Commandant (CG-MER) – Office of Environmental Response Policy; and
2. National Pollution Funds Center (NPFC) CF-2.
In addition, there are six designated ATU users for these funds:
1. Sector District Response Advisory Teams (DRATs);
2. National Strike Force (Atlantic, Pacific, Gulf);
3. Training Center Yorktown;
4. Commandant (CG-113) HSWL (medical);
5. National Response Center; and
6. Coast Guard Academy.
2.5 Reserve Training (RT) Allowance Fund Control Codes
The RT AFCs are established as follows:
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1. AFC-90 Reserve Training Program – provides funding for recruiting, training,
administration, and management of the reserve component. This includes compensation,
commuted rations, and entitlements for all Reserve inactive duty and active duty
including: active duty for operational Support-Reserve component (ADOS-RC); Reserve
initial active duty training (IADT) (i.e. Reserve Officer Candidate Indoctrination (ROCI)
program, Direct Entry Petty Officer Training (DEPOT) program and Selected Reserve
(SELRES) Boot Camp attendance), and pay/travel requirements for Class A and C
School attendance.
2. AFC-91 Full Time Support (FTS) Military Pay Reserve Training (RT) Personnel – used
for compensation, subsistence rations, entitlements, and special and incentive pay for
Reserve Training Full Time Support (FTS) active duty in the Operations & Support
(O&S) appropriation.
3. AFC-92 Civilian Pay for Full Time Support (FTS) Reserve Training (RT) Personnel –
used for compensation, benefits, and costs associated with RT civilian pay in the RT PPA
within the O&S appropriation.
4. AFC-94 Reserve Reimbursable Program – used for all reimbursable programs to the
Coast Guard Reserve, to include the Selective Service System, DOD, and other agencies.
5. AFC-97 Reserve Training to Operations and Support (RT to O&S) – used to refund
certain other program costs charged to AFC-20, AFC-30, AFC-56, and AFC-57. Such
adjustments between/within appropriations are administered through the Coast Guard
Refund Program under the authority of 31 USC 1534. (For Headquarters use only.)
For a more detailed explanation of how to use the RT AFCs refer to Financial Resource
Management Manual - Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 2,
Appendix 2-18 through 2-20.
2.6 Retired Pay (RP) Allowance Fund Control Codes
The RP AFCs are established as follows:
1. AFC-72 Retired Pay – provides compensation and entitlements for Coast Guard military
retirees and their survivors.
2. AFC-73 Retired Medical – used for medical expenses to support health care for Coast
Guard retired members and their dependents.
2.7 Coast Guard Supply Fund
Authorized by 14 USC 941, the Supply Fund finances the procurement of uniform clothing,
subsistence provisions, O&M stores, technical material, and fuel for specified facilities. Items
authorized for supply fund stockage are consumable low-cost commodities having a high
demand. The fund is reimbursed by charging customers for inventory sold, and the income from
these sales is then used to repurchase inventory and to meet authorized fund expenses.
Subsistence provisions, supply account 82 (see below), may be reimbursed per 37 USC 1011(d)
for meals sold below cost at Coast Guard dining facilities. The Supply Fund may be increased
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by the value of usable materials transferred in from other Coast Guard accounts. In addition, the
Supply Fund may be increased by appropriations or transfers approved by Congress.
Supply Fund accounts are summarized in the following table:
Table 2.3 Supply Fund Accounts
Supply Account
Sub-
Appropriation
Short Code
Inventory Type
81.00xx XU6 Clothing and accessories
82.00xx XS6 Subsistence provisions
83.01xx XG6 General inventory
83.03xx XE6 Electronics inventory
83.04xx XB6 Buoy appendages inventory
85.00xx XF6 Fuel inventory
Supply account (SA) 81.00: Clothing and Accessories. This inventory consists of fabric,
uniform items, and accessories (both OGA and commercial) for sale to eligible uniform patrons.
Members of other branches of the Armed Services may purchase common clothing items subject
to inventory availability.
SA 82.00: Subsistence Provisions. This inventory supplies authorized CGDFs throughout the
Coast Guard. However, it does not support contracted (A-76) dining facilities. Inventory
management and general stocking criteria is found in Coast Guard Food Service Manual,
COMDTINST M4061.5 (series).
SA 83.00: Operations and Maintenance. This inventory is broken into subaccounts:
1. SA 83.01: General Inventory. Hull, mechanical, and electrical inventory, general parts,
paint, lube oil, tools, and general supplies.
2. SA 83.03: Electronics Inventory. Electronics parts and materials to support the
Management Information of Combined Allowance (MICA).
3. SA 83.04: Buoy Appendages and Parts. Supplies and parts to support buoys and related
ATON.
4. SA 85.00: Fuel Inventory. This consists of fuel purchased for selected shore facilities
(i.e., Kodiak fuel farm).
2.7.1 Authorities
1. 14 USC Subtitle I, Chapter 9, Section 941, Coast Guard Supply Fund.
http://uscode.house.gov/
2. 37 USC 1011, Mess operation: reimbursement of expenses.
https://www.gpo.gov/fdsys/search/pagedetails.action?collectionCode=USCODE&search
Path=Title+2&granuleId=USCODE-2011-title37-chap19-
sec1011&packageId=USCODE-2011-
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title37&oldPath=Title+37%2FChapter+19%2FSec.+1011&fromPageDetails=true&colla
pse=true
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 3, Accounting for Inventory and Related Property,
October 1993.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
4. Coast Guard Food Service Manual, COMDTINST M4061.5 (series).
http://www.dcms.uscg.mil/directives
5. Coast Guard Uniform Supply Operations Manual, COMDTINST M4121.4 (series).
http://www.dcms.uscg.mil/directives
6. Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19 (series).
http://www.dcms.uscg.mil/directives
7. Energy Management Policy, COMDTINST M4100.2 (series).
http://www.dcms.uscg.mil/directives
2.7.2 Responsibilities
The Subsections that follow list the offices and their respective responsibilities for Supply Fund
accounting.
2.7.2.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO:
1. Establishes policy on executing financial management within the Supply Fund.
2. Monitors controls over Supply Fund operations and verifies that corrective actions are
initiated and completed whenever process or reporting errors are noted.
3. Reviews and approves material transfers-in to the Supply Fund.
4. Coordinates at the budget formulation and budget execution stages the respective budgets
of the Supply Fund and the appropriation accounts from which the Supply Fund derives
its annual income, as provided in Subsection 5.5.12 (Formulating and Establishing the
Financial Management Operation Plan (FMOP)) of this Manual.
2.7.2.2 Office of Resource Management (CG-83)
Commandant (CG-83) is designated the Coast Guard Supply Fund officer and is responsible for
financial and inventory management of the Supply Fund.
2.7.2.3 Budget Execution Division (CG-831)
Commandant (CG-831) is designated the Coast Guard Supply Fund management officer, and is
responsible for:
1. Developing and implementing Supply Fund financial management and reporting policy
and procedures.
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2. Establishing and reviewing Capital Authorization (CA) levels.
3. Gathering and analyzing financial and logistics data to oversee fund performance, and
recommending logistics improvements to Commandant (CG-44).
4. Implementing financial controls to ensure that obligations and inventories do not exceed
Supply Fund CA levels.
5. Providing guidance and oversight as necessary.
6. Delegating authority and responsibility for local management of supply accounts (SAs),
when appropriate.
7. Financial systems and CFO oversight of FINCEN operations.
2.7.2.4 Office of Military Personnel (CG-122)
Commandant (CG-122) is the designated program manager for the Supply Fund Account 81.00
(Clothing and Accessories), and is responsible for:
1. Developing and implementing clothing (uniforms) policy and procedures.
2. Ensuring that standard operating procedures (SOPs) exist for daily operations, internal
control, budgeting, procurement, inventory, sales, and storage.
2.7.2.5 Office of Work-Life (CG-111)
Commandant (CG-111) is the designated program manager for the Supply Fund Account 82.00
(Subsistence Provisions), and is responsible for:
1. Issuing instructions regarding subsistence policy and procedures.
2. Administering Supply Fund Account 82.00 on a service-wide basis.
3. Delegating authority and responsibility for management of dining facilities to area and
district commanders, logistics and service center commands, and commanding officers
(COs) of Headquarters units.
2.7.2.6 Finance Center (FINCEN)
FINCEN is responsible for general accounting and reporting for the Supply Fund. It is also
responsible for:
1. Establishing and promulgating accounting procedures for the Supply Fund.
2. Maintaining accounting records in accordance with Information and Life Cycle
Management Manual, COMDTINST M5212.12 (series), and submitting accounting and
financial reports for all units within the Coast Guard.
3. Providing financial statements to the Supply Fund manager that reflects the service-wide
status of the Supply Fund.
4. Providing reconciliation reports to Supply Fund activities on a monthly basis.
2.7.2.7 Office of Energy Management (CG-46)
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Commandant (CG-46) is the designated program manager for Supply Fund Account 85.00
(Fuel Inventory), and is responsible for:
1. Issuing instructions regarding fuel inventory policy and procedures.
2. Administering Supply Fund Account 85.00 on a service-wide basis.
3. Delegating authority and responsibility for the management of fuel inventory distribution
activities to area and district commanders, logistics and service center commands, and
commanding officers (COs) of Headquarters units.
2.7.2.8 Activities or Units with SA 81, SA 83, or SA 85 Accounts
Activities or units with SA 81, SA 83, or SA 85 accounts are responsible for:
1. Establishing and maintaining a local Supply Fund program.
2. Identifying a Supply Fund manager.
3. Safeguarding Supply Fund inventory.
4. Ensuring that the CA is used effectively, is not breached, and is returned after unit
analysis determines that an excess exists.
5. Stocking only inventory items that meet prescribed customer demand.
6. Maintaining accounting and inventory records and providing reports and financial
statements in accordance with established policies and guidelines.
7. Reconciling accounting records against inventory records and making appropriate
adjustments.
8. Reconciling local financial records with FINCEN accounting records and reporting all
material unreconciled balances on a monthly basis.
9. Identifying and removing excess, obsolete, or unserviceable (EOU) inventory from the
Supply Fund.
10. Reporting EOU inventory to the Supply Fund manager on a quarterly basis.
11. Maintaining a listing of inventory on hand as of 30 September for recordkeeping and
audit purposes. At a minimum, the listing shall contain National Stock Number (NSN),
quantity on hand, unit price, and total value.
12. Reviewing and reconciling undelivered orders, accounts payable, accounts receivable,
price variance, and surcharge accounts monthly.
13. Reviewing surcharge rates annually and requesting approval from Commandant
(CG-831) to update.
14. Providing performance measurement data as requested by the Supply Fund manager in
Commandant (CG-831).
2.8 PC&I Project Identification System
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Each PC&I project is assigned a four-digit identification number which relates to the appropriate
PC&I program area (budget activity). The following table defines the meaning of each digit in
the identification number:
Table 2.4 Explanation of PC&I Product Identification Numbers
Budget Activity
Number
Fiscal Year
(Note 1)
Project Number
(Note 2) Major Category
1 X XX Vessels
2 X XX Aircraft
3 X XX Shore Facilities and Aids to Navigation
4 X XX Other Acquisition including Equipment
5 X XX Integrated Deepwater System (Note 3)
6 X XX Reimbursable
Note 1: The second digit indicates the last fiscal year in which funds can be obligated.
Note 2: The third and fourth digits indicate the specific project serial number.
Note 3: Budget Activity Number 5 (Integrated Deepwater System) is no longer authorized. The
Coast Guard's Integrated Deepwater System (IDS) was only used for FY2002-FY2011
appropriations. IDS assets are now included as part of Coast Guard’s current recapitalization
investment portfolio, managed by Commandant (CG-9).
2.9 Transfers
A transfer is the shifting of budgetary resources from one budget account (appropriation) to
another. The basic rule with respect to transfers per 31 USC 1532 is: Transfer is prohibited
without statutory authority. Two exceptions to this rule are refunds and reimbursements. These
are addressed in the Subsections that follow.
2.9.1 Refunds
The Government Accountability Office (GAO) and OMB identify refund transactions as
bookkeeping adjustments to correct errors such as overpayments and incorrect disbursements,
and to fund common services provided by one appropriation to another.
2.9.2 Reimbursements
Reimbursement transactions are repayments for commodities or services provided by one agency
or appropriation to another, and authorized by law to be credited directly to specific
appropriation and fund accounts.
2.10 The Investment Board
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The purpose of the Investment Board (IB) is to provide Commandants (CG-09) and (CG-8) with
sound and reliable information on matters relating to resource allocation. The IB looks at a wide
variety of issues, from budget-year priorities to current-year targets and projected deficiencies in
a given appropriation, and makes recommendations to Commandant (CG-09).
2.10.1 The Resource Group
The primary role of the Resource Group is to act as an advisory body to the IB concerning the
prioritization of all investment, divestment, and research alternatives. In doing so, the Resource
Group must make significant contributions to Coast Guard planning. The Resource Group shall
provide the following deliverables to the IB:
1. Prioritization list of all investment, divestment, and research alternatives;
2. Recommended Proposed Reduction List with the prioritized alternatives; and
3. Validated Agency Capital Plan.
2.11 The Budget Review Board
The executive officer (XO)/deputy director of a Headquarters unit, under the direction of the unit
commanding officer, supervises and coordinates the budgetary program of the unit, ensures the
efficient management and use of unit funds, and makes recommendations to the unit
commanding officer when program adjustments are necessary to ensure effective use of those
funds. This individual shall serve as chairperson of the Budget Review Board.
2.11.1 Headquarters Unit – Financial Management Staff
Organization of Headquarters units varies widely; however, Headquarters units fall under one of
the following Resource Management Offices (RMOs): Commandants (CG-81), (CG-DCO), and
(CG-DCMS); PACAREA; and LANTAREA. Each should have a designated financial
management staff. This staff is responsible for coordinating with Headquarters unit COs in all
aspects of the Headquarters unit’s financial budget process, including the issuance of funding
targets to subordinate Headquarters units and staffs, and developing financial guidance that
aligns with Headquarters unit missions, requirements, and directives to foster good stewardship
over the funds provided. RMOs are also responsible for coordinating with Headquarters unit
COs to ensure financial management duties and responsibilities are clearly outlined in
Headquarters unit directives.
2.11.2 Field Unit – Commanding Officers
As the end user of funding provided to the administrative operating target at an area
(administrative target unit (ATU)), logistics center command, service center command, or district
unit, the individual unit commanding officer is responsible for the efficient and economical
expenditure of available funds to carry out the unit’s mission. The unit commanding officer
must ensure that the unit’s funds are used only for the purposes for which they were provided
and in accordance with established laws, rules, and regulations; and ensure adherence to
obligation lifecycle management policies and procedures.
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2.11.3 Field Unit – Executive Officers
The executive officer, deputy commander, or executive petty officer (under the direction of the
officer-in-charge) supervises and coordinates the budgetary program of the unit, ensures the
efficient management and use of unit funds, and makes recommendations to the unit
commanding officer or officer-in-charge when program adjustments are necessary to ensure
effective use of those funds.
2.11.4 Field Unit – Financial Managers
Like Headquarters units, field units are also aligned under one of the following RMOs:
Commandants (CG-81), (CG-DCO), and (CG-DCMS); PACAREA; and LANTAREA. RMOs
are responsible for coordinating overarching guidance to field units, and shall coordinate with
field unit COs to designate personnel to administer field unit funding and to ensure financial
management duties are clearly outlined in field unit directives. Designated financial managers of
field unit funding will be responsible for coordinating all aspects of the field unit’s budget
process, including the issuance of field unit funding targets to subordinate staff, and developing
directives and other guidance to foster good stewardship over the funds provided. These financial
management duties and responsibilities shall be clearly outlined in field unit directives.
In order to enhance the effective use of funds (i.e., AFC-30, AFC-34, AFC-36, and others)
distributed down to the unit level and allow unit commanding officers more flexibility to manage
recurring expenses, funds are passed to the lowest level bearing both the operational and funding
responsibility. Therefore, in general, all funds should be programmed to the unit level whenever
possible for efficient and effective management.
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Chapter 3. Administrative Control of Funds
Note: The Coast Guard, as a component of DHS, follows DHS’s Administrative Control of
Funds policy. If there is any ambiguity or inconsistency between DHS funds control policy and
the Coast Guard’s policy, the DHS policy will control.
See the Financial Resource Management Manual - Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 3 (Administrative Control of Funds) for funds control definitions and
procedures
3.1 Purpose
This Chapter prescribes funds control policy to follow in the execution of the budget. It includes
an administrative control of funds policy designed to restrict, to the amount available, obligations
and expenditures against each appropriation account. This restricts both obligations and
expenditures from each appropriation to the lessor of the amount apportioned by the Office of
Management and Budget (OMB) and the amount made available in the appropriation language.
This will enable the Coast Guard to determine responsibility for preventing the overobligation
and overdisbursement of appropriations and other administrative subdivisions of funds. Finally,
this Chapter provides the policy for dealing with violations of the Antideficiency Act (ADA), as
well as any administrative violations of limitations imposed by the Coast Guard, including
reporting requirements.
3.1.1 Policy Review
Per OMB requirements, the following situations specifically trigger review of this policy:
1. OMB, GAO, FASAB, or the Department of Homeland Security (DHS) issues revised
guidance on budget execution.
2. The Coast Guard is reorganized.
3. Staff members violate the Antideficiency Act.
4. GAO, FASAB, or another Federal Government regulatory agency issues new regulations.
Coast Guard policies will be reviewed and updated based on the results of investigations of
current Antideficiency Act violations.
Any changes to this Chapter of this Manual require the approval of the DHS CFO.
3.2 Authority for Funds Control
Statutory authority for the policies in this Chapter is provided in the following regulations:
1. 31 USC, Money and Finance:
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a. Sections 1341-1342, 1349-1351, 1511-1519, Antideficiency Act, as amended.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-
title31.pdf
b. Sections 1101, 1104-1108, 3324 (part of the Budget and Accounting Act, 1921, as
amended).
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-
title31.pdf
c. Sections 1501-1502 (part of the Supplemental Appropriations Act of 1950).
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-
title31.pdf
d. Sections 1112, 1531, 3511-3512, 3524 (part of the Budget and Accounting
Procedures Act of 1950).
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-
title31.pdf
2. 2 USC 681-688 Public Law 93-344, Title X.
https://www.gpo.gov/fdsys
3. OMB Circular A-11 and related guidelines.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
4. Organizational Elements, DHS Delegation Number: 0160.1.
http://dhsconnect.dhs.gov/policies/Documents/0160.1_Organizational_Elements.pdf
5. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 2.5, “Administrative Control of Funds.”
http://cfo-policy.dhs.gov/default.aspx
3.3 Scope of Funds Control
All Coast Guard entities that execute budget authority are subject to the provisions of this
chapter.
3.4 Responsibilities
This Section identifies those individuals and offices within the agency charged with funds
control responsibilities by title or position. It specifies:
1. The positions and describes the funds control responsibilities of each; and
2. Each position’s responsibilities with regard to investigating, reporting, and following up
on Antideficiency Act violations, as well as violations of agency limitations that are not
violations of the Antideficiency Act.
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3.4.1 DHS Under Secretary for Management (DHS USM)
The DHS Under Secretary for Management (DHS USM) has the authority and responsibility to
establish and oversee the implementation of policies within the Department and, except as
otherwise provided by law, carry out the functions of the agency regarding the budget,
appropriations, expenditures of funds (including grant monies), accounting, internal controls, and
finance, in conjunction with the exercise of the statutory duties of the Chief Financial Officer
under the Chief Financial Officers Act of 1990 (Public Law 101-576 (as amended); see
31 USC Chapter 9).
3.4.2 DHS Chief Financial Officer (DHS CFO)
The DHS Chief Financial Officer (DHS CFO) is responsible for all aspects of the administrative
control of funds within DHS. The DHS CFO directs, issues policy about, and provides guidance
on and oversight of the financial management process in accordance with Federal law and OMB.
The DHS CFO:
1. Establishes department-wide policies on administrative control of funds and ADA
reporting.
2. Appoints an independent investigator to conduct a formal investigation of any potential
ADA violations.
3. Reviews and approves reports of investigations.
3.4.3 DHS Director, Office of Financial Management (OFM)
The DHS Director of Financial Management (OFM) develops, publishes, and oversees financial
management policy, and is responsible for reporting Coast Guard information at the consolidated
level.
3.4.4 DHS Director, Budget Office
The DHS Director, Budget Office, manages the DHS budget formulation and execution
processes. This includes the following:
1. Provides guidance to the Coast Guard on how to monitor and distribute resources.
2. Provides service, advice, and assistance to the Coast Guard’s Assistant Commandant for
Resources on the management and execution of budgetary resources.
3. Provides guidance on formulating adequate budget estimates in line with DHS missions
and priorities.
4. Advises executive staff on budget and finance issues.
5. Recommends actions that may be necessary to ensure that DHS does not exceed its
available budgetary resources.
6. Monitors apportionments and allotments.
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3.4.5 Commandant (CG-00)
The Commandant has overall responsibility for governance of the Coast Guard. The
Commandant is assisted by the Vice Commandant (CG-09). The Secretary has delegated
authority to the Commandant to incur obligations and make expenditures within the budgetary
resources available to the Coast Guard, consistent with applicable Office of Management and
Budget (OMB) apportionments and reapportionments and other authority to make funds
available for obligation; and issue suballotments or allocations of funds to components,
activities, or units of the Coast Guard.
3.4.6 Assistant Commandant and Deputy Assistant Commandant for
Resources (CG-8/8D)
Commandant (CG-8), assisted by the Deputy Assistant Commandant for Resources, is the Coast
Guard’s Senior Financial Officer. Commandant (CG-8) is responsible for the overall financial
management of the Coast Guard. Subject to the oversight of the Vice Commandant,
Commandant (CG-8) has been delegated authority to control and manage obligations and
expenditures within budgetary resources available to the Coast Guard, consistent with applicable
Office of Management and Budget (OMB) apportionments and reapportionments and other
authority to make funds available for obligation; and to issue suballotments or allocations
(allowances) of funds to components, activities, or units of the Coast Guard. This includes the
authority to make allotments, suballotments, and allowances of funds to Deputy/Assistant
Commandants, Commands, and other Coast Guard officials, in writing.
Commandant (CG-8):
1. In consultation with legal counsel, ensures that the overall administration and processing
of violations within the Coast Guard, as well as the Coast Guard’s internal control of
appropriations and funds, are evaluated annually.
2. Develops and implements financial control systems.
3. Provides financial advice to the Commandant (CG-00) on the status of resources and
other financial management issues.
4. Identifies potential ADA violations within the Coast Guard, and notifies the DHS CFO.
At a minimum, Commandant (CG-8) must:
a. Notify the DHS CFO of potential ADA violations.
b. Identify the cause(s).
c. Take corrective action.
d. Determine responsibility and culpability.
e. Ensure appropriate disciplinary action is taken against those persons found to be
responsible, and report such actions to the DHS CFO.
f. Ensure that reports of investigations and reports of violations under reference are:
1) Prepared in accordance with policies and procedures prescribed by the DHS CFO
in Section 2.5 of the DHS Financial Management Policy Manual (FMPM) and
guidance provided by OMB.
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2) Prepared in accordance with the Coast Guard’s Administrative Investigations
Manual, COMDTINST M5830.1 (series).
3) Reviewed and approved by the DHS CFO.
g. Implement appropriate internal controls to prevent recurrence of the same type of
ADA violation.
h. Establish and maintain accounting systems and internal controls in accordance with
DHS policies and procedures and Office of Management & Budget (OMB),
Memorandum M-13-23, Appendix D to Circular No. A-123, Compliance with the
Federal Financial Management Improvement Act of 1996, September 2013.
i. Monitor allotments and suballotments.
5. Ensures that Coast Guard financial managers and the supporting workforce are
adequately trained in the use of the Coast Guard’s designated financial accounting
system.
3.4.7 Director of Financial Operations/Comptroller (CG-8C)
Commandant (CG-8C) will oversee all financial management, accounting, and financial
reporting functions; direct, manage, and provide policy guidance and oversight for the Coast
Guard’s financial management organization; and monitor the financial execution of the budget in
relation to actual obligations, unliquidated obligations, and expenditures.
Commandant (CG-8C) provides direct oversight of the Coast Guard Finance Center (FINCEN).
FINCEN is responsible for the coordination of all Coast Guard accounting information.
3.4.8 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84) serves as the Coast Guard’s office of financial management; assists
Commandants (CG-8C) and (CG-8) by providing technical control over the Coast Guard’s
accounting support for fund control, development, publication, and oversight of financial
management policy; and is responsible for reporting Coast Guard information to DHS.
This includes the following:
1. Overseeing Coast Guard internal control policies, including funds control.
2. Ensuring that the Coast Guard accounting system of record supports the Coast Guard’s
funds control policy. The accounting system of record should provide for:
a. Recording all financial transactions affecting apportionments; reapportionments;
allotments; agency restrictions; financial plans; program operating plans; obligations;
expenditures; and anticipated, earned, and collected reimbursements; and
b. Preparing and reconciling financial reports that display cumulative obligations and
the remaining unobligated balance by appropriation and allotment, and cumulative
obligations by budget activity and object class.
3. Coordinates closely with executives responsible for the administrative control of budget
authority and their staffs responsible for day-to-day account management and use of the
accounting system of record, paying particular attention to Headquarters units that carry
out accounting functions in Coast Guard systems for the administrative control of funds.
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4. Accounts for Coast Guard property and adherence to policy.
3.4.9 Office of Resource Management (CG-83)
Commandant (CG-83) serves as the Coast Guard’s budget office and assists Commandant
(CG-8) by providing technical control over the budget execution process. This includes the
following:
1. Requests and manages apportionments; and makes allotments, allowances, and other
allocations of budget authority for programs, projects and activities, as required by law,
to execute the budget.
2. Provides oversight and management of the Coast Guard system of funds control.
3. Provides guidance to Deputy and Assistant Commandants on funds control and the
distribution of resources.
4. In cooperation with Commandant (CG-84), provides guidance and direction to financial
management personnel on systems, activities, operations, and reporting.
5. Provides service, advice, and assistance to Deputy and Assistant Commandant budget
officers on the management and execution of their budgetary resources.
6. Provides guidance on formulating adequate budget estimates in line with DHS mission
and priorities.
7. Advises executive staff on budget and finance issues.
8. Recommends action, when necessary, to ensure the Coast Guard does not obligate in
excess of available budgetary resources.
3.4.10 Funds Control Division (CG-831)
Commandant (CG-831) serves as the Coast Guard’s appropriation manager; assists Commandant
(CG-8); and is responsible for overseeing allotments, suballotments, and allowances of budget
authority by program, project, or activity, that are fixed in amount, as specified in Appropriations
Acts and OMB Apportionments, and that are consistent with the President’s Budget, and, in
some cases, other evidence of Congressional intent.
1. Commandant (CG-831) is responsible for the oversight of all Coast Guard allotments,
suballotments, and allowances of amounts available in the following illustrative
appropriation and fund accounts:
a. Operations & Support (O&S);
b. Procurement, Construction, and Improvement (PC&I);
c. Research & Development (R&D);
d. Alteration of Bridges (AB);
e. Retired Pay (RP);
f. Oil Spill Liability Trust Fund (OSLTF);
g. Boat Safety (BS);
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h. Coast Guard Gift Fund;
i. Coast Guard Supply Fund;
j. Yard Fund;
k. Commissary Stores Surcharge Fund; and
l. Medicare Eligible Retiree Health Care Fund.
Note: Commandant (CG-831) is also responsible for any appropriation and/or fund accounts
not otherwise specifically assigned.
2. Commandant (CG-831) assigns an appropriation manager to monitor each allotment and
suballotment. The appropriation manager’s responsibilities include:
a. Preparing documentation authorizing the distribution of budget authority at levels
specified in appropriation acts and conference/committee reports, within the
limitations of apportionments or reapportionments approved by OMB.
b. Advising allotment, suballotment, and AFC managers when obligations and
expenditures are approaching the amount available in their allotment or suballotment.
However, allotment, suballotment, and AFC managers are primarily responsible for
obligations and expenditures from their accounts.
c. Determining that the allotment and suballotment of budget authority is at the highest
level practical.
d. Ensuring that all OMB apportionments are properly entered into the accounting
system of record.
e. Developing apportionment schedules for submission to OMB, and developing
secondary financial plans for orderly and systematic execution of the approved
financial plan and apportionment.
f. Management and coordination of the procedure for reprogramming and transfer of
budget authority between programs, projects, and activities or appropriation accounts.
Determining when shifting or transfers between accounts requires notice of
reprogramming or transfer to OMB and the Appropriations Committees.
g. Ensuring that reimbursable agreements are properly executed and that costs are
recovered.
h. Evaluating actual closeout results against a resource/allowance manager’s closeout
projections, and taking corrective action where necessary.
i. Ensuring that disbursements relating to cancelled (closed) accounts (i.e., unobligated
funds for antecedent liabilities) are treated in accordance with 31 USC 1553(b).
j. Managing funds that have expired for obligation purposes (i.e., upward/downward
adjustment).
3.4.11 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913) is responsible for establishing and enforcing policies to ensure that the
Coast Guard procurement personnel achieve accurate and timely recording of obligations
resulting from the issuance of contracts, purchase orders (POs), and Military Interdepartmental
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Purchase Requests (MIPRs) (document types 23, 24, and 28, respectively). Coast Guard
contracting officers are to ensure that proper and adequate funding is available before making or
adjusting any contract obligation.
Sound funds control practices require an interdependent relationship and a shared responsibility
between contracting officers, allotment managers, allowance managers, business managers,
resource managers, project managers, and other officials who have the authority and
responsibility for making, recording, and adjusting obligations. In the final analysis, however, it
is the Contracting Officer who makes and records the contract obligation.
3.5 Antideficiency Act
The Antideficiency Act (ADA) was enacted by Congress to prevent the incurrence of obligations
or the making of expenditures (outlays) in excess of amounts available in appropriations or
funds. Personnel authorized to administer and control funds are responsible for seeing that funds
obligated or expended do not exceed the amount allotted to them. This requirement is
specifically spelled out by law and requires reporting action, as well as corrective action, in the
event of a violation.
The Antideficiency Act applies to current, expired, and cancelled appropriations; unrealized
anticipated budgetary resources; and nonappropriated funds such as revolving funds. The
investigation of a violation may involve an assessment of the extent to which a number of
individuals authorized, approved, and certified the transaction(s) that led to the violation; and the
official(s) charged with administering and monitoring the various levels of funds controls
impacted by the actions of the administrative unit that caused the violation. However,
responsibility for the overobligation or overexpenditure of funds will be assigned to one or more
individuals.
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3.5.1 Violations of the Antideficiency Act
It is important for all Coast Guard personnel with budget authority and all financial management
supporting staff to recognize the importance of preventing violations of the Antideficiency Act.
A violation will occur if an employee of the Coast Guard makes or authorizes an expenditure or
creates or authorizes an obligation against any funds in excess of the amount available in an
appropriation, apportionment, or designated allotment or suballotment. Violations also include
obligations or expenditures in excess of a congressionally imposed limitation contained in an
authorization or appropriation act restricting the amount for a particular program or activity.
ADA violations are divided into the following specific categories:
1. Amount limitation. 31 USC 1341 stipulates (in part) that any officer or employee of the
U.S. Government or of the District of Columbia government may not:
a. Make or authorize an expenditure or obligation exceeding an amount available in an
appropriation or fund for the expenditure or obligation; or
b. Involve the Government in a contract or obligation for the payment of money before
an appropriation is made unless authorized by law.
2. Voluntary services limitation. 31 USC 1342 stipulates (in part) that an officer or
employee of the U.S. Government or of the District of Columbia government may not
accept voluntary services for either government or employ personal services exceeding
that authorized by law, except for emergencies involving the safety of human life or the
protection of property.
3. Administrative control of funds, amount limitation. 31 USC 1517 stipulates (in part)
that an officer or employee of the U.S. Government or of the District of Columbia
government may not make or authorize an expenditure or obligation exceeding
a. An apportionment; or
b. The amount permitted by regulations prescribed under Section 1514(a).
4. Purpose Statute. 31 USC 1301(a) stipulates that appropriations shall be applied only to
the objects for which the appropriations were made, except as otherwise provided by law.
5. Time limitation. 31 USC 1502(a) stipulates (in part) that the balance of an appropriation
or fund limited for obligation to a definite period is available only for payment of
expenses properly incurred during the period of availability or to complete contracts
properly made within that period of availability and obligated with 31 USC 1501.
6. Miscellaneous Receipts Statute. 31 USC 3302(b) stipulates that an official or agent of
the Government who receives money for the Government from any source shall deposit
the money in the Treasury as soon as practicable without deduction for any charge or
claim, except as provided in 31 USC 3718(b).
3.5.2 Violations of Limitations That Do Not Per Se Violate the
Antideficiency Act
Nonstatutory Violations: Violation of Coast Guard-approved funds distribution plans will be
reported to the appropriations manager setting forth the same information as required for a
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statutory violation. Procedures for allowance managers, ATUs, and program elements to report
overobligation or overexpenditure of their accounts are provided in Subsection 5.6.4 (Reporting
Violations of Informal Subdivisions of Budget Authority). Overobligation of a fund can result in
administrative discipline. It is important for financial managers to recognize that overobligation
or overexpenditure of an allowance, ATU, or program element’s funds will result in a violation
of the act if it results in overobligation or overexpenditure of an allotment or suballotment.
3.5.3 Antideficiency Act Employee Restrictions
The ADA states that an officer or employee of the U.S. Government cannot do the following:
1. Make or authorize expenditures or obligate funds in excess of the available amounts
appropriated for such expenditures or obligations;
2. Involve the Government in contracts or obligations for payment of funds prior to an
appropriation unless specifically authorized by law;
3. Accept voluntary services or employ personal services for amounts exceeding those
authorized by law except in the case of emergencies involving the safety of human life or
the protection of property;
4. Incur any obligation or make any expenditure in excess of an apportionment or
reapportionment or in excess of other subdivisions established pursuant to
31 USC 1513-1514; and
5. Make or authorize an expenditure or obligation or involve the Government in a contract
for payment of funds required to be sequestered.
3.5.4 Penalties
Administrative Penalties: The Antideficiency Act provides that any officer or employee of the
United States who violates the prohibitions of 31 USC 1341(a), 1342, or 1517 will be subject to
appropriate administrative discipline. Administrative discipline may consist of:
1. A letter of reprimand or censure for the official personnel record of the officer or
employee;
2. Unsatisfactory performance rating;
3. Transfer to another position;
4. Suspension from duty without pay;
5. Removal from office.
Criminal Penalties: 31 USC 1350 provides that “An officer or employee of the United States
Government or of the District of Columbia government knowingly and willfully violating
Section 1341(a) or 1342 of this title shall be fined not more than $5,000, imprisoned for not more
than two years, or both.”
3.5.5 Antideficiency Act Violations Discovered by Coast Guard Employees
Suspected ADA violations are initially investigated under the oversight of the Coast Guard Chief
Financial Officer (CFO). The results of this investigation are presented in a preliminary report.
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If the initial investigation indicates that an ADA violation has occurred, the preliminary report is
forwarded to the Department of Homeland Security (DHS) for formal investigation by the DHS
CFO.
Formal ADA investigation procedures are specified in DHS Financial Management Policy
Manual (FMPM).
3.5.6 ADA Violations Uncovered During Audits
If a GAO or OIG audit or investigation identifies an ADA violation, the Coast Guard will notify
the DHS CFO and issue a preliminary report on the violation. The DHS CFO, in coordination
with OGC, will review the notification letters prior to transmission to the DHS Secretary for
signature.
3.5.7 Examples of ADA Violations
All Antideficiency Act violations must be reported. The following are examples of ADA
violations:
1. Overobligation or overexpenditure of an appropriation or fund. This occurs when an
officer or employee of the United States Government makes or authorizes an expenditure
or obligation against an appropriation or fund in excess of the amount available in the
account.
2. Creating a contract or obligation in advance of an appropriation. A violation occurs
when an officer or employee of the United States Government involves the Government
in a contract or other obligation for payment for any purpose in advance of appropriations
made for such purpose, unless such contract or obligation is authorized by law. If
authorized by law, but not yet financed by an appropriation, the budget authority required
to cover such transactions is known as contract authority. If the contract authority is
provided in anticipation of receipts, then obligations incurred against such contract
authority cannot be liquidated unless either the receipts are collected and credited to the
account or an appropriation has been enacted.
3. Acceptance of voluntary service. This occurs when an officer or employee of the
United States Government accepts voluntary service on behalf of the United States
Government or employs personal services in excess of that authorized by law, except in
cases such as these:
a. Emergencies involving the safety of human life or the protection of property;
b. Use of student volunteers under an agreement between the Department and the
school, as provided by OMB regulations; and
c. Permitted specifically by law.
4. Overobligation or overexpenditure of an apportionment or reapportionment.
This occurs when an officer or employee of the United States Government makes or
authorizes an expenditure or obligation in excess of an apportionment or reapportionment
described in an Apportionment and Reapportionment Schedule, Form SF 132, including
any restrictions within the Apportionment and Reapportionment Schedule, Form SF 132
COMDTINST M7100.3F
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footnotes of the respective apportionment or reapportionment. This provision also
applies to obligations or expenditures in a credit financing account.
5. Overobligation or overexpenditure of an allotment or suballotment. This occurs
when an officer or employee of the United States Government makes or authorizes an
expenditure or obligation in excess of the amount permitted by the prescribed and
approved component funds control system.
6. Overobligation or overexpenditure of an agency limitation. This occurs when an
officer or employee of the United States Government makes or authorizes an expenditure
or obligation in excess of the amount permitted under an agency limitation, which results
in the overobligation or overexpenditure of an appropriation, apportionment, allotment,
or suballotment.
7. Overobligation or overexpenditure of a credit limitation. This occurs when an officer
or employee of the United States Government makes or authorizes an expenditure or
obligation exceeding a credit limitation contained in an appropriation or authorization act.
For additional information on credit limitations, see OMB Circular A-11, Section 185,
“Federal Credit.” These overages include, but are not limited to:
a. Making or authorizing a direct loan obligation or loan guarantee commitment that
requires a subsidy cost obligation or expenditure in excess of amounts appropriated
and/or apportioned for such purposes in a credit program;
b. Modifying direct loans or loan guarantees resulting in obligations or expenditures in
excess of amounts appropriated and apportioned for the cost of modifying direct loans
or guarantees in a credit program;
c. Making or authorizing a direct loan obligation or loan guarantee commitment that is
in excess of the level specified by law and apportioned by OMB;
d. Making or authorizing an expenditure or obligation in excess of the amount
appropriated or apportioned for administrative expenses in a credit program;
e. Making or authorizing an expenditure or obligation, including a commitment, against
unobligated subsidy balances in a credit program after the period of availability of
funds has expired; and
f. Making or authorizing an expenditure or obligation in excess of available and
apportioned resources (including borrowing authority) in a financing account.
8. Creating obligations against unrealized anticipated budgetary resources. This
occurs when an officer or employee of the United States Government makes or
authorizes an obligation against anticipated budgetary resources before they are realized,
even though the resources have been apportioned.
9. Creating new obligations in expired and closed accounts. This occurs when an officer
or employee of the United States Government makes or authorizes an expenditure or
obligation against an expired or closed account. This includes adjustments that cause
obligations in expired or closed accounts to exceed the original appropriation,
apportionment, allotment, or suballotment issued before the account had expired. Funds
typically expire on 30 September of the fiscal year in which the period of availability of
funds ends.
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a. Expired accounts shall remain available for legitimate obligation adjustments but not
for new obligations. Five years after the expiration of an account, all obligated and
unobligated balances must be cancelled, and the expired account must be closed.
b. Although no disbursements may be made from cancelled accounts, any legitimate
obligations or adjustments chargeable to the cancelled account may be paid from
another unexpired appropriation available for the same purpose as the cancelled
account, subject to certain limitations. For example, the cumulative total of old
obligations payable from current appropriations may not exceed the lesser of
1 percent of the current appropriation or the remaining balance (whether obligated or
unobligated) cancelled when the appropriation account is closed (31 USC 1553(b)).
10. Charging the wrong account. This occurs when the wrong appropriation or Treasury
account is charged. The charge may be deliberate (e.g., for purposes of expediency or
administrative convenience, with the intent to rectify the situation by transferring the
funds to the proper account at a later date), or accidental (e.g., an error when posting a
disbursement to prior year as opposed to current year). If the receiving appropriation,
apportionment, allotment, or suballotment is exceeded at any time, a deficiency exists
and the ADA is violated.
11. Creating open-ended liabilities. Signing an agreement that contains indemnification
clauses and that creates open-ended liabilities is an ADA violation even when the
circumstance requiring the expense is never triggered. These clauses obligate the
Department (or any operating unit) to indemnify another party for loss or injury, or
otherwise commit the Department or operating unit to an open-ended (and therefore
potentially unlimited) liability or expense. Such clauses must be amended as appropriate
or negotiated out of the agreement before the agreement may be signed.
12. Obligation or expenditure of funds required to be sequestered. The Antideficiency
Act requires that, in the absence of appropriations (e.g., sequestration), no obligations
may be incurred, including salary expenses, unless authorized by law. In very limited
circumstances, 41 USC 6301 allows the Coast Guard to enter into obligations, but not
disburse funds, for clothing, subsistence, forage, fuel, quarters, transportation, or
medical and hospital supplies, which, however, shall not exceed the necessities for the
current year.
3.5.8 Training of Financial Managers and Investigating Officials
1. Commandant (CG-8) and the Resource Management Offices shall take leadership roles in
providing appropriate training for financial managers and program managers throughout
the Coast Guard. This training will cover:
a. Appropriations law;
b. Funds control;
c. The ADA statute;
d. The types of ADA violations that can occur, and their causes;
e. Requisite training, supervision, and oversight of personnel who perform financial
management or programmatic functions; and
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f. Methods for preventing ADA violations.
2. Coast Guard personnel directly involved in the investigation and reporting of potential
ADA violations must have received adequate training. At a minimum, these personnel
must possess the following training prerequisites:
a. Completion of an Appropriations Law course within the last three years;
b. Knowledge of regulatory requirements and Agency policy related to the ADA; and
c. Ability to interview witnesses, gather evidence, establish facts, document findings,
prepare reports of violation, meet the timeframes established for the completion of an
investigation, and recommend corrective action.
3.5.9 Reporting Violations
Antideficiency Act violations must be reported to the President, the Congress, and the
Comptroller General via the DHS CFO. Procedures for investigating and reporting ADA
violations are specified in the DHS Financial Management Policy Manual (FMPM). The
Commandant shall report suspected violations to the DHS CFO immediately after it has been
established that a potential violation has occurred.
All violations must be reported immediately upon discovery. Any individual with knowledge of
a possible violation has the responsibility to report it. Action taken to correct the cause of a
violation does not eliminate the requirement to report it. Any employee of the Coast Guard
having knowledge of an apparent violation shall be responsible for initiating a written report
through the appropriate channels.
3.6 Apportionments
Funds appropriated by Congress will not be available for allotment or obligation until after they
have been apportioned by OMB. The apportionment of funds is required for all unexpired
budgetary resources including appropriated funds, reimbursements, estimated carryover
amounts, and recoveries of prior-year obligations.
Additional guidance on the apportionment process, covering apportionment action in connection
with supplemental, reprogramming, and transfer between accounts, is included in Chapter 5.
3.6.1 Anticipated Reimbursements
The system of apportionment provided by OMB Circular A-11 permits the inclusion of
anticipated reimbursements from other Government agencies or the public in determining the
amounts available for apportionment. Once an apportionment is established, anticipated
reimbursements will not be allotted unless there is reasonable assurance that such items will be
collected. Furthermore, even though these estimates have been apportioned and allotted, they
will not be considered budgetary resources available for obligation unless they meet one of the
following criteria:
1. Valid orders between Federal entities, including written agreements, have been received.
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2. Accounts receivable has been earned based on goods or services furnished to Federal
entities.
3. In the case of orders from the public, advance payment has been received, unless such
receipt has been exempted by law.
Proper procedures for including anticipated budgetary resources on Apportionment and
Reapportionment Schedule, Form SF 132, and Report on Budget Execution and Budgetary
Resources, Form SF 133, are included in OMB Circular A-11.
3.6.2 Deficiency Apportionments
Apportionments that anticipate the need for a deficiency appropriation or a supplemental under
31 USC 1515 will be specifically identified on the apportionment request, as discussed in OMB
Circular A-11, Section 120.41.
To qualify as a deficiency apportionment, the request must be required by:
1. Laws enacted subsequent to the transmittal of the annual budget for the year to Congress;
2. Emergencies involving human life, the protection of property, or the immediate welfare
of individuals; or
3. Specific authorization by law.
The approval of a deficiency apportionment by OMB and its transmittal to Congress merely
notifies the Congress. It does not authorize the use of any amounts not yet provided.
3.7 Policy on Allotments and Suballotments
In general, allotments and suballotments should be established at the highest practical level. To
the extent possible, each Coast Guard operating facility (OPFAC) will be financed from no more
than one subdivision for each appropriation or fund. The Coast Guard will assign allotments for
each appropriation listed in Subsection 3.4.10 (Funds Control Division) above. Quarterly
apportionments are required to be designated as allotments or suballotments separately from
annual apportionments.
3.7.1 Restrictions
The following restrictions apply to allotments:
1. The sum of allotment amounts issued shall not exceed the apportionment, including any
applicable footnotes.
2. The sum of suballotment amounts shall not exceed the allotment amount.
3. Allotments or other administrative subdivisions shall be fixed in amount and only
changed when authorized by Commandant (CG-09).
4. Congressional restrictions contained in the appropriation will be enforced.
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3.8 Administrative Control of Funds Policy
3.8.1 Administrative Control of Funds
Administrative Control is the direction or exercise of authority over subordinate or other
organizations with respect to administration and support including organization of Coast Guard
forces, control of resources and equipment, personnel management, unit logistics, individual and
unit training, readiness, mobilization, demobilization, discipline, and other matters not included
in the operational missions of the subordinate or other organizations (Coast Guard Organization
Manual, COMDTINST M5400.7 (series); Unified Action Armed Forces (UNAAF), JP 0-2).
Administrative Control of Funds restricts both obligations and expenditures from each
appropriation or fund account to the lower of either the amount apportioned by OMB or the
amount available for obligation and or expenditure in the appropriation or fund account. This
enables the Commandant (CG-8) to determine responsibility for the obligations or expenditures
in excess of appropriations, apportionments, allotments, and suballotments and to promptly
investigate and report those actions as violations if they cannot be properly adjusted.
Administrative Control should not be confused with the term ‘Administrative Support.’
Administrative Support is often used to describe the support one unit provides to another under
the terms of a formal or informal agreement, such as an intra-service support agreement.
Administrative Support can be provided and received among units at a variety of command
levels regardless of their organizational relationships.
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3.8.2 Formal Delegation of Budget Authority
DHS and the Coast Guard must formally make allotments and suballotments of budget authority
to the chain of command before it is legally available for obligation or expenditure. In addition,
Coast Guard also makes allowances for funds control. The Financial Management Operation
Plan (FMOP) subdivides budget authority into allotments, suballotments, and allowances. The
following rules shall be used by the Coast Guard’s budget office when subdividing
appropriations:
1. All budget authority shall be formally allotted or suballotted by program, project, or
activity to the responsible Deputy Commandants, Assistant Commandants, or Directors
of Headquarters-managed programs, projects, or activities (PPAs).
2. All budget authority provided in specific appropriations shall be a suballotment to the
responsible flag officer or executive.
3. Any further subdivision of budget authority shall be an informal distribution.
3.8.3 Responsibility for Administrative Control of Funds
An allotment or suballotment in the FMOP is the formal subdivision of an apportionment. It is a
delegation of the authority received from the DHS Under Secretary of Management to incur
obligations and make expenditures. The first formal subdivision of an apportionment shall be
made to an Allotment Manager at the highest practical level in the chain of command responsible
for obligations.
The senior-most officer or executive responsible for the administrative control of obligations will
generally be a Deputy Commandant, Assistant Commandant or a Director. These officials shall
ensure that obligations made by personnel under their command, control or supervision do not
exceed the amount of budget authority that they have been delegated in order to prevent
violations of the Antideficiency Act.
Allotments and suballotments of obligation authority will typically be accompanied by
“allowances” of obligation authority. (A specific appropriation must, however, be the object of
an allotment before it may be divided into allowances.) Although “allowances” are informal
subdivisions of budget (obligation) authority, they are essential components of programs,
projects, and activities (PPAs) for budget planning, programming and activities. Some
“allowances” constitute entire PPAs. Allowances are, or are critical components of, PPAs for
reprogramming purposes. Funds control at the allowance level is essential since obligations in
excess of allowances can result in obligations in excess of allotments.
While the authority to incur obligations may be delegated in the Chain of Command, and a
resource management staff may be assigned responsibility for day-to-day account management,
the formal responsibility for administrative control of allotments or suballotments cannot be
delegated.
3.8.4 Delegation of Authority within the Chain of Command
An organization functions best when the authority to enter into obligations is placed as close as
possible to the need for goods or services. Therefore, Allotment Managers delegate budget
authority within the Chain of Command. Allotment Managers, Allowance Managers, and
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Administrative Target Unit (ATU) Commanders, Commanding Officers, Directors, and
Superintendents may delegate obligation authority within the Chain of Command. However,
formal responsibility for administrative control of obligation authority cannot be delegated.
Budget authority shall be delegated in writing as a suballotment, and obligation authority shall be
delegated in writing as an allowance to an organizational title or position (as opposed to an
individual), specifically stating any restrictions or conditions on authorization such as:
1. The purpose of the allowance;
2. The time period of availability; and
3. The amount available.
3.8.5 Segregation of Duties
Administrative control of funds requires a balance between three delegated authorities; program
authority, obligation authority, and certification of fund availability authority. In order to
maintain the proper segregation of duties, program authority, obligation authority, and
certification of fund availability authority must be performed by different individuals to reduce
risk of error, misuse, or fraud. Certification of fund availability is the authority to assign proper
funding citations on obligating documents before obligations are incurred and approve the
validity and accuracy of the accounting information. This is a “certification of fund availability”
in support of the fund control system; it is not a certification for payment. Allotment Managers,
Allowance Managers, Commanders, Commanding Officers, Directors and Superintendents of
Administrative Target Units must ensure adequate internal controls are in place for funds control.
This should be accomplished as part of the periodic monitoring and control process.
3.8.6 Accounting Support for Fund Control Systems
Pursuant to 31 USC 3512(b), the Coast Guard fully supports internal management and
administrative control of funds, and establishes and maintains systems of accounting and internal
controls that provide complete disclosure, adequate financial information needed for
management purposes, and effective control over assets for which the Coast Guard is
responsible. This provides for:
1. Assistance to responsible officials in restricting the authorization or incurrence of
obligations to the amount for which obligation authority is available.
2. Sufficient information for responsible officials to determine the availability of funds for
commitments and obligations by appropriation, allotment, and suballotment.
3. Recording all financial transactions affecting apportionments, reapportionments,
allotments, suballotments, agency restrictions, financial plans, program operating plans,
obligations, and expenditures, as well as anticipated, earned, and collected
reimbursements.
4. Complete, accurate, and timely budgetary and financial information that allows for the
preparation and reconciliation of financial reports displaying cumulative obligations and
remaining unobligated balances by appropriation, allotment, suballotments, and object
class.
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3.8.7 Allotment/Suballotment Managers
An allotment or suballotment is a formal delegation of the authority to incur obligations and
make expenditures. This authority may be delegated in writing by an Allotment Manager to a
Suballotment Manager. By statute, allotments and suballotments are made to finance operations,
programs, projects and activities at the highest practical level. All budget authority that has been
limited to a specific time, purpose and amount shall be a suballotment to the responsible flag
officer or executive. These Allotment Managers will generally be Deputy Commandants,
Assistant Commandants, or Directors of Headquarters-managed programs, projects, and
activities (PPAs), or those who are responsible for the administration and execution of allotments
and suballotments. Allotment Managers are responsible for obligations and are accountable to
Commandant (CG-8), and through that position, to Commandants (CG-83) and (CG-831)
Appropriation Managers. The senior manager for a revolving fund is also considered to be an
Allotment Manager, and is subject to the same requirements and responsibilities.
Allotment Managers have a shared responsibility with the senior-most officer or executive in
their administrative control (ADCON) chain of command to ensure that obligations do not
exceed the amount of budget authority that they have been delegated, thereby preventing
violations of the Antideficiency Act. Allotment Managers are responsible for managing
obligations within the approved Coast Guard Financial Management Operation Plan (FMOP).
Any changes to allotments and allowances in the distribution of obligation authority must be
formally approved and in writing.
Allotment Managers may be assisted by resource managers that are responsible for day-to-day
management of an allotment or suballotment. Resource managers share responsibility for funds
control with their Allotment Manager.
The administrative subdivision of obligation authority by an Allotment Manager is an informal
subdivision. The authority to incur obligations may be delegated to Allowance Managers as an
“allowance.” Allotment Managers are responsible for performing all Administrative Target Unit
(ATU) functions and duties for any obligation authority that is not delegated.
Allotment Managers may delegate obligation authority to Allowance Managers within the Chain
of Command. However, the overall responsibility to ensure that obligations do not exceed an
allotment or suballotment cannot be delegated.
3.8.8 Allowance Managers
Allowance Managers are responsible to an Allotment Manager for the day-to-day management
of an allowance. An allowance is authority to incur obligations. This authority must be
delegated in writing by an Allotment or Suballotment Manager. Allowance Managers have a
shared responsibility with their Allotment/Suballotment Manager to ensure that obligations do
not exceed the amount available in an allowance, an allotment, an apportionment or an
appropriation to prevent violations of the Antideficiency Act.
The majority of Allowance Managers are subordinate to Deputy and Assistant Commandants for
Headquarters directorates who are responsible for programs, projects and activities. However,
Allowance Managers for certain revolving accounts are assigned to the Commanding Officer of
the Coast Guard Yard, the Superintendent of the Coast Guard Academy, and the Director of the
National Pollution Funds Center.
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Allowance Managers may be assisted by resource managers that are responsible for day-to-day
management of an allowance. Resource managers share responsibility for funds control with
their Allowance Manager.
Allowance Managers may administratively subdivide their allowance. Administrative
subdivision of obligation authority by an Allowance Manager is informal in nature. Obligation
authority may be delegated to ATU Officers as an allowance. Allowance Managers are
responsible for performing all Administrative Target Unit (ATU) functions and duties for any
obligation authority that is not delegated.
3.8.9 Administrative Target Unit Commander, Commanding Officer,
Director, or Superintendent
A target allowance may be delegated to the Commander, Commanding Officer, Director, or
Superintendent of an Administrative Target Unit (ATU) in the Financial Management Operation
Plan (FMOP). ATUs may include: Area Commanders; Logistics or Service Center
Commanders/Directors; District Commanders; and Unit Commanding
Officers/Directors/Superintendents. These Commanders, Commanding Officers, Directors, and
Superintendents have a primary responsibility for managing an allowance of obligation authority
delegated by an Allotment Manager or Allowance Manager. Although ATU Commanders,
Commanding Officers, Directors, and Superintendents rely on comptrollers, budget officers, and
other financial resource managers with a shared responsibility for day-to-day account
management, the overall responsibility for target allowances received cannot be delegated.
A target allowance from an Allotment Manager or an Allowance Manager cannot be exceeded.
If needed, the ATU Commander, Commanding Officer, Director, or Superintendent will contact
the appropriate Allowance Manager or Allotment Manager for additional funding.
The ATU Commander, Commanding Officer, Director, or Superintendent is authorized to further
divide their target allowance for control by staff elements and units supported by the ATU.
These staff elements and units supported by the ATU Commander, Commanding Officer,
Director, or Superintendent are designated as program elements.
3.8.10 Program Element Managers
Program Element Managers share responsibility for managing obligation authority with their
ATU Commander, Commanding Officer, Director or Superintendent. While the ATU
Commander, Commanding Officer, Director or Superintendent may rely on Program Element
Managers for day-to-day account management, the overall responsibility for allowances received
cannot be delegated.
Program Element Managers shall ensure proper segregation of duties. They shall ensure that all
individuals seeking to exercise the obligation authority delegated to the program element have
been authorized in writing by their chain of command. In addition, they must ensure that fund
certifiers and funds approvers understand the roles and responsibilities assigned to them, as well
as the personal liabilities that arise from those roles and responsibilities. Failure to follow
procedures for fund certification and approval may lead to a potential Antideficiency Act (ADA)
violation, which may have both civil and criminal penalties.
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3.8.11 Civilian Employee Financial Resource Official (CEFRO) formerly
Performance Incentive Pay Officials (PIPO)
The Civilian Employee Financial Resource Official (CEFRO) responsibility resides at the Flag,
(SES) Logistics/Service Center and Director, Commander or Commanding Officer level. A
CEFRO cannot be less than a SES. The CEFRO appoints a dedicated CRC to facilitate their
authority, oversees the CRC duties and approves CRC actions. A CEFRO’s area of responsibility
cannot be less than 20 employees.
3.8.12 Civilian Resource Coordinators (CRC)
As a part of internal controls, Civilian Resource Coordinators (CRCs) are considered the
designated points of contact between the Civilian Pay and Benefits Manager and their respective
units or areas of responsibility—generally an ATU. CRC performance of duties and policy
issues include RMO oversight to ensure resource chain-of-command continuity.
CRC functions cannot be delegated. In the event of occasional absences for leave or temporary
duty of less than 60 days, CRC duties shall be covered by the RMO CRC. The Civilian Pay
Manager shall be advised by the impacted CRCs when this occurs. CRC absences of greater
than 60 days require assignment of a new CRC. RMOs may assign a backup CRC to cover
extended absences of the primary RMO CRC, consistent with the 60-day rule.
CRCs shall have suitable financial management experience and understand funds management
and appropriation law principles. Military grade O3 and above, and civilian GS-11 and above
are the minimum seniority requirements to be assigned CRC duties. The funding delegation
authority by Civilian Pay Manager (Commandant (CG-832)) to CEFROs and CRCs may be
withdrawn at the discretion of the Civilian Pay Manager (Commandant (CG-832)).
For detailed procedures refer to Financial Resource Management Manual - Procedures (FRMM-
P), COMDTINST M7100.4 (series), Chapter 3 (Administrative Control of Funds).
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Chapter 4. Budget Formulation
4.1 Overview
In accordance with USC Title 14 and other applicable laws (e.g., USC Title 10, which authorizes
the Gift Fund), the Coast Guard has 9 appropriations (5 discretionary and 4 mandatory) that
specify the purposes for which the appropriation is authorized. The following appropriations
form the basis for the budget formulation process.
Discretionary appropriations:
Operations & Support (O&S);
Procurement, Construction, and Improvement (PC&I);
Alteration of Bridges (AB);
Research & Development (R&D); and
Medicare-Eligible Retiree Health Care Fund (MERHCF).
Mandatory appropriations:
Retired Pay (RP);
Boating Safety (BS);
Oil Spill Liability Trust Fund (OSLTF); and
Gift Fund.
See Section 2.2 (Coast Guard Budget Authority) for information regarding these appropriations
and funds.
See the Financial Resource Management Manual - Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 4 (Budget Formulation) for detailed responsibilities and procedures.
Note: Effective FY 2019, Reserve Training (RT) and Environmental Compliance and
Restoration (EC&R) are within the O&S appropriation.
4.2 The Stages and Format of the Budget
The budget formulation process is essentially a continuous effort, with a gradual change in focus
from broad program to specific line-item requests. There are, however, discrete actions which
serve to divide the process into several “stages.”
Prior to commencement of the budget formulation stages, Coast Guard program managers
submit individual budget requests by project via the Electronic Resource Proposal (ERP)
System. These electronic resource proposals are commonly referred to as “RPs”.
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4.2.1 Budget Stages
Budget formulation begins with the consideration of strategic plans, operational and supports
requirements, planning inputs, and external influences. In essence, the process consists of the
following stages:
1. Coast Guard Stage
2.
DHS Stage
3.
OMB Stage
4.
Congressional Stage
5. Drug Budget Submission
4.2.2 Budget Format
In FY 2004, the Administration directed Federal agencies to submit a performance-based budget,
a process that changed the format for DHS’s OMB submission. The presentations may be
incremental or zero-based, depending upon the nature of the appropriation being addressed. The
annual reissuance of OMB Circular A-11 prescribes instructions for the preparation and
submission of the annual budget estimates. The Circular also prescribes instruction on the
execution of the budget.
4.2.3 Budget Preparation – Participants
All program managers, LANTAREA, and PACAREA are involved in the Coast Guard budget
formulation process via the ERP system. The Office of Budget and Programs, Commandant
(CG-82), is responsible for the internal Coast Guard preparation, review, prioritized ranking
process, and overall formulation and development of the budget schedules. The finalized list is
presented to the Investment Board (IB) at Headquarters.
4.2.4 Congressional Stage
The Coast Guard prepares the Congressional Stage submission using an incremental basis for its
“annual” or “one-year” appropriation; i.e., the narrative justification is geared toward explaining
changes to the previous year’s level. For its “multi-year” and “no-year” appropriations, the
format shifts to a “zero-based” presentation; i.e., the narrative justification is geared toward
explaining all proposed budget-year project requirements.
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4.3 Public Disclosure
OMB has issued strict guidelines in Circular A-11, Section 22, “Communication with the
Congress and the public and clearance requirements,” governing the classification of budget
estimates, which are considered confidential. All agencies must treat budget material as pre-
decisional communication until the President delivers his budget message to Congress. This
means that Coast Guard personnel must not disclose the contents of either the RAP submission
or the DHS and OMB Stages to the public or to congressmen, congressional committees, or
congressional staff without first reviewing the guidelines in OMB Circular A-11. Even after
publication of the President’s Budget message, Coast Guard personnel may only disclose the
identification of line items in earlier stages of the budget in response to direct Congressional
inquiry.
4.3.1 Release or Withholding of Information
The provisions for the release or withholding of information in response to Freedom of
Information Act requests are stated in the Freedom of Information Act (5 USC 552).
4.3.2 Questions on Public Disclosure
All Coast Guard personnel shall refer questions concerning matters of public disclosure of
budget or program material to Commandants (CG-82) and (CG-83) for resolution via the chain
of command.
4.4 Preparation of the Congressional Stage Budget – President’s
Budget (Appendix)
After receiving OMB’s settlement, Commandant (CG-82) begins to make appropriate revisions
to the resource levels contained in the technical budget schedules, which comprise the Coast
Guard’s input into the MAX A-11 data entry system. The MAX A-11 system is an OMB-
controlled database that agencies use to enter the data required for the Budget of the United
States Government (President’s Budget). The President submits this document to Congress on or
before the first Monday in February, following the annual State of the Union address in January.
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Chapter 5. Budget Execution
5.1 Overview
The budget execution process is the application of all available funds to Coast Guard missions
and programs. The process requires the integration of nearly all Government administrative
functions and financial management disciplines whose collaboration and interaction are required
to effectively carry out Coast Guard missions while meeting financial management
responsibilities.
These budget execution policies reflect the movement of the Coast Guard toward a fully
integrated financial management system. In this system, the accounting functionality places all
financial resources in a single system under administrative and general ledger (GL) controls from
which financial management information is obtained for decision-making and the management
of funds.
This Chapter provides policies governing the budget execution processes that are followed each
fiscal year (FY). The Chapter is organized to provide a chronology of the major budgetary
events in order to illustrate the sequence and relationship of these processes. This chronology is
not meant to be prescriptive of each FY’s processes, since the timing of congressional action on
appropriations may have a major impact on the timing of certain budget execution activities.
Rather, the Chapter is organized to describe the general alignment of budgetary resource
management (BRM) activities in a typical FY – from the preparations needed to establish funds
control objectives to the closing of appropriation accounts.
BRM is a critical set of policies designed to support a successful budget execution process.
These policies prescribe the application of management controls within this process to provide
reasonable assurance of high data quality when entering, summarizing and reporting budgetary
information. Further, the controls provide reasonable assurance that Coast Guard budget
execution transactions and processes comply with laws and regulations in all material respects.
Governmentwide Treasury Account Symbol Adjusted Trial-Balance System (GTAS) has
replaced the Federal Agencies’ Centralized Trial Balance System (FACTS) I and II.
For detailed responsibilities and procedures on the appropriate management controls and
activities for the recording, distributing, and reporting of budgetary actions taken prior to, at the
start of, during, and at the end of the FY, refer to Financial Resource Management Manual -
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 5 (Budget Execution).
5.1.1 Purpose
This Chapter defines Coast Guard funds control objectives and specifies the policies necessary to
meet those objectives. It prescribes a system for positive administrative control of funds
designed to restrict obligations and expenditures against each appropriation or fund to the
amount available therein and for the purposes authorized. It also provides the basis for
compliance with statutory requirements and central agency regulatory authorities throughout the
Coast Guard. These instructions supplement the budget execution and management control
regulations found in the Office of Management and Budget (OMB) Circular A-11.
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This Chapter consolidates current legal, regulatory, and administrative policies applicable to the
Coast Guard and provides guidelines and appropriate management controls for recording,
distributing, managing, reporting budget authority and reviewing the status of funds. It identifies
the key BRM processes, the point within the FY when the activities defining those processes are
carried out, and the individuals responsible for meeting the standards established within each
process. It also prescribes the activities that shall be followed to fully execute the Coast Guard’s
annual operating budget responsibilities.
5.1.2 Scope
This Chapter prescribes BRM policies required to comply with laws and regulations pertaining
to all Coast Guard funds. All appropriations or funds, regardless of their purpose or source,
available for obligation and expenditure to the Coast Guard, whether apportioned or
unapportioned, are subject to these requirements.
Control of funds requires the exercise of procedural restraints to prevent the incurring of
obligations and expenditures beyond established periods of availability, in excess of authorized
amounts, or for other than authorized purposes. The Coast Guard shall establish administrative
controls at the highest practicable organizational level consistent with assigned responsibilities
for carrying out authorized programs. These administrative controls are initiated through the
formal distribution of funds to the position or individual designated in writing to fulfill this
responsibility. This individual is also responsible for the subsequent issuance of funding
authority to Coast Guard operating officials.
These general policies also apply, to the extent applicable, to funds transferred to other Federal
agencies under specific legislative transfer authorities, and to funds transferred to other Federal
agencies under the Economy Act.
These provisions apply to all transactions, transaction processing, and data summarizations
needed to meet reporting requirements prescribed in regulation and statute that pertain to the
budgetary accounts of the U.S. Standard General Ledger (USSGL). All Coast Guard
organizations and officials involved in the transactions identified in these budgetary accounts are
subject to these policies.
These policies do not apply to nonappropriated fund instrumentalities (NAFIs) that are covered
in other Coast Guard financial policies.
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5.2 Authorities
1. Antideficiency Act, as amended. 31 USC 1341-1342, 1349-1351, 1511-1519.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Budget and Accounting Act of 1921, as amended. 31 USC 1101, 1104-1108, 3324.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
3. Budget and Accounting Procedures Act of 1950. 31 USC 1112, 1531-1533, 1536,
3511-3512, 3524.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
4. Chief Financial Officers Act of 1990.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
5. Department of Homeland Security Financial Accountability Act. PL 108-330.
https://www.gpo.gov/fdsys/pkg/PLAW-108publ330/content-detail.html
6. Economy Act of June 30, 1932. 31 USC 1535-1536.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1535.pdf
7. Federal Financial Management Improvement Act of 1996 (FFMIA).
https://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
8. Federal Managers’ Financial Integrity Act of 1982 (FMFIA).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
9. Government Management Reform Act of 1994 (GMRA).
https://govinfo.library.unt.edu/npr/library/misc/s2170.html
10. Government Performance and Results Act of 1993 (GPRA).
https://www.whitehouse.gov/omb/information-for-agencies
11. Impoundment Control Act of 1974. PL 93-344.
https://www.gpo.gov/fdsys/pkg/STATUTE-88/pdf/STATUTE-88-Pg297.pdf
12. Oil Pollution Act of 1990. 33 USC 2701-2761.
https://www.gpo.gov/fdsys/pkg/STATUTE-104/pdf/STATUTE-104-Pg484.pdf
13. Paperwork Reduction Act, as amended. 44 USC 3501-3520.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title44/html/USCODE-2008-title44.htm
14. Supplemental Appropriations Act of 1950. 31 USC 1501-1502.
https://www.gpo.gov/fdsys/pkg/USCODE-2005-title31/pdf/USCODE-2005-title31-
subtitleII-chap15-subchapI.pdf
15. 10 USC 2601. General gift funds.
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https://www.gpo.gov/fdsys/pkg/USCODE-2012-title10/pdf/USCODE-2012-title10-
subtitleA-partIV-chap155-sec2601.pdf
16. 14 USC 712. Contracts with Government-owned establishments for work and material.
http://uscode.house.gov/
17. 14 USC 1901. Administration of Academy.
http://uscode.house.gov/
18. 14 USC 1927. Cadets; initial clothing allowance.
http://uscode.house.gov/
19. 14 USC 939. Accounting for industrial work.
http://uscode.house.gov/
20. 14 USC 941. Coast Guard Supply Fund.
http://uscode.house.gov/
21. 14 USC 2946. Coast Guard Housing Fund.
http://uscode.house.gov/
22. 31 USC 1551-1557. Appropriation Accounting -- Closing Accounts.
https://www.gpo.gov/fdsys/pkg/USCODE-2010-title31/pdf/USCODE-2010-title31-
subtitleII-chap15-subchapIV.pdf
23. 41 USC Chapter 7. Public Contracts -- Office of Federal Procurement Policy.
https://www.gpo.gov/fdsys/pkg/USCODE-2009-title41/html/USCODE-2009-title41-
chap7.htm
24. 48 CFR Chapter 1. Federal Acquisition Regulation (FAR).
https://www.gpo.gov/fdsys/pkg/CFR-2003-title48-vol1/pdf/CFR-2003-title48-vol1.pdf
25. Government Accountability Office, Principles of Federal Appropriations Law.
http://www.gao.gov/legal/red-book/current-edition
26. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov/greenbook/overview
27. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
28. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
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29. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 7, Accounting for Revenue and Other Financing
Sources and Concepts for Reconciling Budgetary and Financial Accounting, May 1996.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
30. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, Part 4, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
31. Office of Management and Budget, Circular A-25, Transmittal Memorandum No. 1, User
Charges, July 1993.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
32. Office of Management and Budget, Circular A-97, Rules and Regulations Permitting
Federal Agencies to Provide Specialized or Technical Services to State and Local Units
of Government Under Title III of the Intergovernmental Cooperation Act of 1968, August
1969.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
33. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
34. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
35. Office of Management and Budget, Circular A-130, Transmittal Memorandum No. 4,
Management of Federal Information Resources, November 2000.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
36. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
37. Office of Federal Financial Management, Federal Financial Management Systems
Requirements (FFMSR), Core Financial System Requirements, OFFM-NO-0106,
January 2006.
https://www.whitehouse.gov/omb/information-for-agencies
38. Financial Systems Integration Office (FSIO), Financial Management Systems Standard
Business Processes for US Government Agencies, July 2008.
39. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual.
http://tfm.fiscal.treasury.gov/
40. Department of the Treasury, Bureau of the Fiscal Service, U.S. Government Standard
General Ledger, Supplement No. S2 Treasury Financial Manual [series].
https://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm
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41. Department of Homeland Security, Department of Homeland Security Acquisition
Manual (HSAM), October 2009.
https://www.dhs.gov/xlibrary/assets/opnbiz/cpo_hsam.pdf
42. Department of Homeland Security, Designation as Responsible Party for ICOFR Key
Process Ownership - Budgetary Resource Management.
43. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 2.4, “Budget Execution.”
http://cfo-policy.dhs.gov/default.aspx
44. Department of Homeland Security, Office of Financial Management, Component
Requirements Guide for Financial Reporting (series).
http://cfo-policy.dhs.gov/default.aspx
45. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
46. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
47. Management’s Responsibility for Internal Control, COMDTINST 5200.10 (series).
http://www.dcms.uscg.mil/directives
48. Reimbursable Standard Rates, COMDTINST 7310.1 (series).
http://www.dcms.uscg.mil/directives
49. U.S. Coast Guard, COCO Alert 08-48, “Quarterly Certification of Undelivered Orders
(UDOs).”
http://www.dcms.uscg.mil/directives
50. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
51. Major Systems Acquisition Manual (MSAM), COMDTINST M5000.10 (series).
http://www.dcms.uscg.mil/directives
5.3 Responsibilities
The Subsections that follow specify general roles and responsibilities of Coast Guard managers.
5.3.1 Coast Guard Financial Management Organizations
5.3.1.1 Commandant (CG-00)
1. Commandant (CG-00) has overall responsibility for the BRM process, including proper
funds control and the reporting of violations of such controls.
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2. Commandant (CG-00) has delegated the authority to carry out the funds control
provisions to Commandant (CG-8).
5.3.1.2 Assistant Commandant for Resources (CG-8)/Chief Financial Officer
(CFO)
Commandant (CG-8), assisted by the Deputy Assistant Commandant (CG-8D), handles the day-
to-day management of appropriated funds, and is responsible for:
1. Overseeing the Coast Guard planning and programming process and, where appropriate,
directing the planning processes pertaining to the Coast Guard’s financial resources. The
budget formulation and execution process is the purview of Commandant (CG-8) and tied
to strategic planning and performance.
2. Complying with laws and regulations pertaining to financial management. This
responsibility includes the authority to enforce accountability for resource and financial
funds control violations, to include personal performance documentation, Uniform Code
of Military Justice enforcement, and appointment of an Administrative Investigator for
potential Antideficiency Act (ADA) violations.
3. Establishing and maintaining a robust internal audit function over all three areas of
internal control identified in OMB Circular A-123: effectiveness and efficiency of
operations, reliability of financial reporting, and compliance with applicable laws and
regulations. As a result, Commandant (CG-8) has authority to set Coast Guard policy for
the establishment, operation, evaluation, and improvement of management controls
(internal controls).
4. Overseeing the status of all appropriations and funds, and reporting on the financial
condition of the Coast Guard to Commandant (CG-00) and other executive staff.
5. Establishing configuration controls over data quality, data assurance, and data
architecture for all Coast Guard financial performance data.
6. Implementing financial management policy, procedures, and internal controls, including
the establishment of appropriate funds control limits and other budgetary transactions.
5.3.1.3 Office of Resource Management (CG-83)
Commandant (CG-83) assists Commandant (CG-8) through the oversight of all Coast Guard
appropriations and is responsible for:
1. Establishing, implementing, and managing Coast Guard BRM policies and procedures.
2. Managing the Coast Guard budget execution processes.
3. Reviewing and transmitting appropriate budget-related communications to DHS and
OMB, including required budgetary data and analyses.
4. Providing oversight over Finance Center (FINCEN) budgetary accounting.
5.3.1.4 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84) is responsible for:
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1. Developing, issuing, and updating this Manual.
2. Overseeing Coast Guard internal control policies, including funds control.
3. Supporting the Coast Guard’s funds control objectives by overseeing the establishment of
compliant financial management systems.
4. Overseeing the development and implementation of financial management training plans
that address the needs of all Coast Guard employees with financial management
responsibilities.
5. Providing oversight over FINCEN’s implementation of this Manual’s policies and
procedures.
5.3.1.5 FINCEN
FINCEN is responsible for:
1. Compiling, developing, and reporting Coast Guard budgetary and proprietary accounting
information.
2. Implementing budgetary and proprietary policies and establishing related procedures to
carry out budgetary and accounting functions.
3. Providing accounting support for Coast Guard units and staff.
4. Documenting and maintaining the process for entering and supervising the processing of
approved transactions into the Coast Guard’s accounting system of record.
5.3.2 Coast Guard Central Management Organizations Other Than Financial
5.3.2.1 Assistant Commandant for Human Resources (CG-1)
Commandant (CG-1) directs the hiring and management of the Coast Guard workforce, and is
responsible for:
1. Planning and coordinating midyear pay, benefit, and entitlement legislative or policy
changes with Commandant (CG-83).
2. Coordinating at each stage of the budget cycle with Commandant (CG-83) to identify the
budgetary requirements of the Supply Fund.
5.3.2.2 Engineering and Logistics Directorate (CG-4)
Commandant (CG-4) is responsible for:
1. Coordinating at each stage of the budget cycle with Commandant (CG-83) to identify the
budgetary requirements of the Supply Fund and Yard Fund.
2. Executing Procurement, Construction, and Improvement (PC&I) contracts within the
boundaries of established appropriation definitions.
3. Working with Commandant (CG-84) and FINCEN to verify that all real property asset
transactions are properly recorded into the accounting system of record.
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5.3.2.3 Assistant Commandant for Command, Control, Communications,
Computers and Information Technology (CG-6)
Commandant (CG-6) is responsible for:
1. Establishing, maintaining, monitoring, and improving general computer controls for
financial and mixed systems, which process budget and related transactions.
2. Responding to Commandant (CG-83) system requirements to establish, maintain, and
improve application controls for all financial systems.
3. Coordinating financial management improvement projects with Commandant (CG-83)
that result in financial systems compliant with the Financial Systems Integration Office
(FSIO) Governmentwide financial system standards.
5.3.2.4 Director of Contracting and Procurement (CG-91)
Commandant (CG-91) is responsible for:
1. Advising Commandant (CG-8) of Coast Guard procurement plans and plan changes that
impact the Coast Guard’s Financial Management Operation Plan (FMOP).
2. Supporting funds control through the accurate and timely recording of commitments,
obligations, and expenditures.
3. Verifying that appropriate and adequate funding is available before signing any
contractual document.
5.3.2.5 Judge Advocate General (JAG) and Chief Counsel (CG-094)
Commandant (CG-094) is responsible for:
1. Providing advice and counsel to Commandant (CG-8) and all subordinate offices on the
availability of appropriations; the interpretation and application of laws and regulations
governing budget preparation and resource proposals; the administration, execution,
documentation, and reporting of appropriations; and budget and spending authority.
2. Providing advice and counsel to Commandant (CG-8) in support of communications with
Congress, Government Accountability Office (GAO), OMB, Department of Homeland
Security Office of the Inspector General (DHS OIG), and other third parties.
3. Providing advice and counsel to Commandant (CG-00) in the identification,
investigation, and reporting of potential ADA violations.
4. Providing advice and counsel to Commandant (CG-00) and the senior staff on the
availability of appropriated and nonappropriated funds (NAFs).
5. Facilitating coordination and cooperation with the DHS Office of General Counsel
(OGC).
5.3.3 All Coast Guard Employees Committing and Obligating Funds
Upon completion of the fund distribution process, administrative control responsibilities fall
upon all Coast Guard employees given authority to request the obligation of funds and to enter
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into the obligation. No official shall request, approve, or authorize any obligation, or make any
expenditure, beyond the total amount available within that individual’s funding authority as
recorded within the official GL, or exceed any statutory limitation that modifies or restricts the
availability of funds. Special or recurring statutory limitations on Coast Guard funds are
frequently imposed by authorization or appropriations acts, or may be imposed by other
legislation.
5.4 Actions Taken Prior to the Start of the Fiscal Ye a r
5.4.1 Updating and Synchronizing Coast Guard Budget and Accounting
Coding Structure
Budget execution responsibilities begin with the monitoring of congressional action and likely
OMB apportionment restrictions for the current year in order to identify prospective changes to
the Coast Guard’s budget and accounting structures. To carry out budget execution in a manner
consistent with the formulation of the budget, the Coast Guard shall establish a uniform method
of coordinating the development of instructions to identify and classify financial activity for
budgeting, internal/external accounting, and reporting purposes within their standard policies and
procedures.
FINCEN shall issue the official reference for classification and coding of all financial activity
used in the generation of management reports. The reference shall establish the detailed internal
coding required to develop reports that accommodate the classifications used by OMB, the
Department of the Treasury (Treasury), and the Congress.
Commandant (CG-84) shall exercise functional supervision over the application of the coding
structure to all financial systems and operations. A change approval process shall provide for
specific forms and levels of approval in order that coding changes and the establishment of new
entities are consistent with the control objectives established in the FMOP, and the availability of
the recommended codes within the current structure.
5.4.2 Preparing Apportionments Required Prior to the Start of the Year
By 21 August of each FY, OMB requires DHS to request the apportionment of estimated
resources to be carried forward in the ensuing FY for each Treasury Appropriation Fund Symbol
(TAFS). (See OMB Circular A-11.) The Coast Guard is required to submit these apportionment
requests to OMB through DHS, as prescribed in annual guidance, in advance of 21 August for
the FY to begin on 1 October. These apportionment requirements apply if any part of the
budgetary resources for a TAFS is not determined by current action of the Congress. For
example, these include:
1. Multi-year and no-year TAFS anticipated prior-year unobligated balances to be carried
forward in the ensuing FY;
2. TAFS with new budget authority that will become available in the ensuing FY under
permanent appropriations, such as permanent budget authority in trust funds; and
3. Anticipated and realized collections to be credited to revolving funds.
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As required by 31 USC 1513, these initial apportionments are to include estimates for permanent
appropriations in trust funds, balances in revolving funds, and other income, such as recoveries
of obligations made in the prior year and balances of prior-year budget authority in multi-year
and no-year appropriation accounts (OMB Circular A-11, lines 1-6 on the Apportionment and
Reapportionment Schedule, Form SF 132).
These initial apportionments shall also provide the estimated full-year obligational authority to
be established for revolving and trust funds, i.e., the income anticipated for the entire FY. The
amounts apportioned, allotted, and issued as allowances shall be in place and recorded in the
accounting system of record by 1 October. Commandant (CG-83) shall establish appropriate
controls to ensure that no obligations are incurred against these budgetary resources prior to the
receipt of OMB-approved apportionments and corresponding DHS-approved allotments.
OMB policy provides that estimated resources apportioned prior to the start of the FY be made
available within an agency’s funds control system only to the extent that these resources are
realized. Procedures shall be established to guide appropriation managers who are tasked with
the development of estimates of the budgetary resources in these initial appropriation and fund
accounts.
Reapportionments in the revolving funds may also be necessitated by substantial changes in
those appropriations that provide the income to the funds. Since the initial apportionments may
be made prior to the time congressional action is completed, the estimates of collections to be
realized by the funds may be impacted. Higher or lower than anticipated appropriations to the
Operations & Support (O&S) account or the Acquisition, Construction, & Improvements (PC&I)
account, for example, could result in comparable changes in obligations needed by the Supply
Fund and Yard Fund to support those appropriations.
New apportionment actions for the current FY are independent of all previous apportionment
actions. Subsequent reapportionments supersede previous apportionment actions taken during
the year and will cover all transactions from the beginning of the current year.
5.4.3 Monitoring the Status of Appropriation Bills
At the start of each FY, there is normally some period of uncertainty as to the final level of
funding that will be available for current-year operations. Appropriations may be delayed and,
even if enacted, further actions may be contemplated by the Administration or the Congress that
changes the level of funding for programs planned in the initial budget request. Timing
requirements for the first apportionment of funds for all resources available in the entire FY is
dependent on the date of enactment of appropriations. Appropriate guidance on the status of
funds shall be issued prior to the start of the FY by Commandant (CG-8) to all Coast Guard
employees with budget execution responsibilities.
Commandant (CG-83) shall submit recommendations to Commandant (CG-8) that will provide
general guidance on what obligations may be incurred at the start of year and what measures
shall be taken to establish funds controls in the accounting system of record e.g., the point at
which to turn on hard funds controls (those automated systems controls that prevent the
recording of an obligation), and soft funds controls (those automated system controls that
provide advisory warnings that fund limitations will be breached).
Commandant (CG-83) shall be prepared to advise Commandant (CG-8) well in advance of
circumstances or events that provide advisory warnings that funds limitations will be breached.
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The following Subsections provide general guidance, which may be superseded by more specific
guidance for the current year that might be issued by OMB and DHS related to operations under
a continuing resolution and a shutdown of certain operations.
5.5 Actions Taken at the Start of the Fiscal Year
5.5.1 Establishing Funding under a Continuing Resolution
When annual appropriations have not been enacted by the first day of the FY, Congress usually
provides interim financing in the form of a continuing resolution for the continued operation of
ongoing programs. In the language of the continuing resolution, Congress prohibits the
financing of new programs before the enactment of the regular appropriation for the year. When
a continuing resolution has been enacted, DHS sends an allocation table of the amount for each
appropriation which, under the terms of the resolution, shall be the basis for fund distribution and
funds control over the period covered by the continuing resolution.
5.5.2 Managing Operations under a Continuing Resolution
Congress usually enacts a continuing resolution to cover a limited period of time, such as a
month or a calendar quarter. Rarely, Congress enacts a continuing resolution that covers the
remainder of a FY. Usually, continuing resolutions do not appropriate specific amounts.
Instead, they provide guidance for the rate of operation for continuing programs at minimal
levels (this is addressed in more detail below). The continuing resolution usually specifies that
appropriated amounts will cease to be available when one of the following conditions is met
(whichever occurs first):
1. If the activity is later funded by a regular appropriation;
2. If Congress intends to end the activity by enacting an applicable appropriation act
without providing for the activity; or
3. As of the fixed cutoff date of the continuing resolution.
Normally, OMB does not require agencies to submit apportionment requests (Apportionment and
Reapportionment Schedule, Form SF 132) under a continuing resolution. Instead, OMB issues a
bulletin that automatically apportions resources based on the formulas outlined in the bulletin.
The Coast Guard shall submit written apportionment requests if, for reasons such as seasonality,
the normal pattern of obligations is expected to exceed the prorated level calculated under the
automatic apportionment.
For mandatory appropriations under continuing resolutions, there is generally a provision
requiring entitlement programs to continue operations at a rate necessary to maintain program
levels under current law. A written exception apportionment may be necessary from OMB to
ensure obligations during the period will not exceed the amount automatically apportioned.
Treasury generally does not issue warrants under a continuing resolution. Treasury warrants are
normally issued only upon enactment of the regular appropriation. Exceptions may be made and
the Coast Guard may request warrants from Treasury through DHS:
1. When the continuing resolution covers specific mandatory Federal payments;
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2. On a case-by-case basis after the second quarter of the FY; or
3. If the continuing resolution covers the entire year.
The wording of each continuing resolution is unique and designed to cover the specific
circumstances in effect at the time that it is enacted. A continuing resolution generally, but not
always, specifies that interim obligating authority is provided at a rate equal to the lesser of:
amounts contained in the President’s Budget; the lowest amount provided by congressional
action to the date of the resolution (House action, Senate action, or conference committee
action); or the current rate.
For an annual appropriation, the “current rate” is normally estimated as the amount appropriated
for the program in the preceding year. For programs financed from multi-year and no-year
appropriations in the preceding year, the current rate has been defined as an amount equal to the
total funds appropriated for the previous FY, plus the total of unobligated budget authority
carried over from prior years, less the total of unobligated budget authority carried over to the
current FY. OMB will issue specific guidance covering these and other terms that are contained
in continuing resolutions.
During periods funded by continuing resolutions, obligations shall be restricted to those
necessary to carry out essential operations and establish a level of program operations that will
be consistent with the likely outcome of congressional action on appropriations for the current
year.
Commandant (CG-83) shall issue guidelines whenever funding is temporarily available under
continuing authority to cover the many unique conditions and limitations that may be contained
in appropriation acts under continuing resolutions. The issued guidance will supplement the
following general guidelines that are normally contained in OMB and DHS guidance:
1. Obligations shall be limited to those necessary to maintain and avoid disruption of
operations.
2. Obligations shall not be deferred in situations in which they are needed to preserve life
and property, or situations in which the delay in obligations causes greater utilization of
funds at a later time.
3. Excessive rates of obligation shall be avoided in sensitive policy areas in which
deliberations over final funding levels are still being actively pursued by the
Administration and the Congress so as to pre-empt appropriation decisions.
4. Prior-year balances and reimbursable authority shall not be used to increase the rate of
obligation for a program or project above the annualized levels prescribed in the
continuing resolution.
5. Obligations in the new FY shall not be incurred at an increased rate for levels of effort
proposed in the pending President’s submission, or in anticipation of congressional
increases pending the annual appropriation acts, without the approval of Commandant
(CG-83).
6. Program initiatives or new projects scheduled to begin in the current year shall not begin
until appropriations are enacted.
7. No hiring, contract awards, or other actions representing program increases shall be taken
in anticipation of funding.
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Upon enactment of regular, annual appropriations, unobligated balances of budget authority
provided under a continuing resolution do not remain available for obligation. Appropriations
bills enacted after the start of the FY contain provisions that ratify obligations made in
continuing resolutions in anticipation of the regular act, and direct that those obligations be
charged to the regular appropriation.
OMB guidance in Circular A-11 for the conduct of operations under a continuing resolution may
be found in Section 123. In addition, OMB may issue more specific guidance in a bulletin. DHS
most likely will also issue guidance.
When Congress enacts the regular appropriation bill, Treasury will issue warrants for the
amounts of the enacted appropriations. Generally, the warrant prepared for the enacted
appropriation bill requires no special action by or letter from the agency. Normal procedures for
warranting regular appropriations apply.
Treasury will handle programs exempted from the normal provisions of a continuing resolution
individually (for example, a specific amount appropriated separately or the appropriation of an
amount not based on the specified rate). Amounts provided under continuing resolutions are
subject to apportionment. Each FY, Treasury will monitor the progress of the appropriation bills
through the second quarter and will advise agencies when the continuing resolution process will
be invoked.
5.5.3 Managing Operations in the Absence of Appropriations – Funding
Hiatus
A funding hiatus occurs when there are no budgetary resources available for an activity, because
neither regular appropriations nor a continuing resolution has been enacted for the FY, and funds
that do not require current action by Congress, such as unobligated balances, are not available.
At the onset of a funding hiatus, the Coast Guard shall execute plans to shut down operations.
During an absence of appropriations, the Coast Guard must limit obligations to those essential to
maintain the minimum level of essential activities necessary to protect life and property.
Exceptions to this requirement may be made through guidance issued by DHS to support a
planned number of personnel who are military, law enforcement, direct health care providers, or
personnel identified as essential.
Additional information on this subject may be found in Chapter 6 (Continuing Operations
without Appropriations).
5.5.4 Preparing Apportionment and Reapportionment Actions upon the
Enactment of Appropriations
OMB Circular A-11, Section 120.48, requires the submission of apportionment requests from
DHS within 10 calendar days from the enactment of appropriations. OMB provides for the
expediting of apportionments in unusual circumstances in advance of the statutory requirements
given OMB to apportion funds. DHS normally issues guidelines for submission requirements
that establish submission timelines and requirements for supporting information. The Coast
Guard’s Financial Management Operation Plan (FMOP), and its companion summary, the
Monthly Execution Report, has served as the primary source of supporting information.
COMDTINST M7100.3F
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5.5.5 Establishing and Recording Apportionments, Allotments, and
Suballotments
Commandant (CG-83) shall record the Coast Guard’s apportionments, allotments and
suballotments, as budgetary accounting transactions using the U.S. Standard General Ledger
(USSGL) accounts and related transaction coding to conform to the applicable Treasury
Financial Manual (TFM) as required by the Federal Financial Management Improvement Act of
1996 (FFMIA). The receipt and recording of apportioned budgetary resources by Commandant
(CG-83) establishes requirements and restrictions for budget execution and shall occur before
recording the allotments and suballotments of budgetary resources. Normally, the amounts
allotted will equal the amounts apportioned since DHS has determined that the apportionment
schedule shall be considered the allotment of funds to the Coast Guard. Under no circumstances
shall allotments issued within an account exceed the apportioned funds.
In preparing Apportionment and Reapportionment Schedule, Form SF 132, Commandant
(CG-831) and funds managers will follow the guidance provided in OMB Circular A-11 in
Sections 120, 121 and 122 and supplemental guidance provided by the DHS Financial
Management Policy Manual (FMPM). Additionally, for each line item amount reported on the
Apportionment and Reapportionment Schedule, Form SF 132, Commandant (CG-831) will
provide any supporting documentation prescribed by Commandant (CG-83). For many line
items, this supporting documentation will be recognized and recorded as new budget authority as
provided in the appropriation acts, and appropriation warrants issued by the Treasury. Treasury
warrants shall be checked to establish that the appropriate funding sources agree with the
amounts contained in the final appropriation act. In particular, Commandant (CG-831) shall
confirm that Treasury does not include amounts from the Oil Spill Liability Trust Fund in O&S,
PC&I, and Research & Development (R&D) Treasury warrants. The General Fund warrants for
these appropriations should exclude the trust fund amounts to be transferred to the accounts
when the appropriation language specifies a total that includes the trust fund transfers.
As required by OMB and/or DHS, Commandant (CG-831) shall allocate its available budgetary
resources within Apportionment and Reapportionment Schedule, Form SF 132, Section 8
(“Application of Budgetary Resources”) to Category A and Category B divisions. Category A
apportionments are by time period, e.g., quarter. Category B represents divisions by major
programs, projects, or activities (PPAs), as provided within the President’s Budget request, or
PPAs specified within Congressional Report language. Either DHS or OMB may amend the
Apportionment and Reapportionment Schedule, Form SF 132, during the process as DHS
reviews and OMB approves the document. When approved, the apportionment and its
accompanying allotment provide the Coast Guard with authority to obligate.
Since the DHS Financial Management Policy Manual (FMPM) states that OMB-approved
apportionments shall serve as DHS-approved allotment advice documentation to the Coast
Guard, DHS allotments to the Coast Guard will generally be in the same amount as the OMB-
approved apportionment. Therefore, the total amount of apportioned budget resources for each
Apportionment and Reapportionment Schedule, Form SF 132, shall serve as the allotment
amount for that appropriation or fund for the period of the apportionment unless DHS has issued
an allotment at variance with the apportionment.
Commandant (CG-831) shall provide date-stamped copies of the Apportionment and
Reapportionment Schedule, Form SF 132, to FINCEN for the posting of USSGL allotment
transactions. These postings shall be made immediately upon receipt. This standard also applies
COMDTINST M7100.3F
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to later reapportionments. The exception to this policy shall be if DHS has issued specific signed
allotment advice to the Coast Guard for an apportioned TAFS; in this case, the DHS allotment
advice document serves as the Coast Guard’s allotment.
In some cases, an account may require the establishment of suballotments to enhance
management controls and to meet specific legal limitations and ceilings. When allotments are
further subdivided to control specific legal limitations within an apportionment, those
subdivisions will be clearly established through the issuance of appropriate documents to support
the recordation by FINCEN.
5.5.6 Preparing the Final Financial Management Operation Plan (FMOP)
The Coast Guard’s FMOP defines its financial management objectives. The FMOP guides and
informs senior managers at the start of each FY of resource levels available to carry out their
program missions. As the plan is modified throughout the year, many of the changes to the plan
are documented to form the budget base for the following FY’s budget submission. Thus, the
FMOP represents the bridge between the Budget Formulation and Budget Execution processes.
5.5.6.1 Coordinating with the Budget Formulation Function
The compilation of the FMOP and the formulation of the budget documents for the next FY
reflect a continuum of activity within the Commandant (CG-8) organization. The effective
coordination of these budget execution and budget formulation functions is essential to
maintaining the integrity of the Coast Guard’s financial management operations. These policies
and related procedures, when strictly observed, shall provide the assurances to DHS, OMB, and
Congress that:
1. The Coast Guard budget submitted in each FY reflects an accurate depiction of the
budgetary resources obligated and spent for the various PPAs in the prior-year column
for each appropriation.
2. The execution of the budget in the prior year was carried out within the same structural
framework and within the amounts appropriated within that framework for that year.
3. The current-year amounts represent the distribution of budgetary resources to the PPAs in
the current FMOP as provided for in the most recently enacted appropriation bill.
4. The budget base and proposed labor and non-labor pricing increases represented for each
PPA in the latest budget submission reflect the necessary adjustments to the current-year
amounts reflected in the current FMOP to maintain the PPAs at generally the same
program levels in the budget year.
5. The FMOP for the current year reflects the distribution of congressional increases and
decreases to PPAs in a manner consistent with committee reports and directions.
5.5.7 Meeting OMB Financial Plan Requirements
OMB Circular A-11, Section 120.42, prescribes that Federal agencies are to develop financial
plans that support apportionment requests. The distribution of apportioned amounts is based
upon a careful forecast of obligations to be incurred under the project plans and operations
during the year.
COMDTINST M7100.3F
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The general requirements have been established in OMB Circular A-11 policy but may be
amended by the OMB examining division staff that reviews and approves the Coast Guard’s
apportionment requests.
5.5.8 Meeting DHS Operating Plan Requirements
DHS budget execution policies prescribe that the Coast Guard prepare and maintain annual
operating plans for submission to DHS. DHS’s annual guidance on budget execution should be
reviewed, and these policies and procedures updated to reflect changes.
The Coast Guard plan should be structured to reflect the entities used to implement congressional
decisions made in the latest DHS appropriations act. The plans must list the programs as
approved in the appropriations process (e.g., the PPA structure in DHS appropriations
conference committee reports), the number of full-time equivalent (FTE) personnel funded, the
available amount and sources of required funds, the phased implementation of programs, and the
financing during the FY.
The DHS Budget Division will meet with Commandant (CG-831) to review operating plans.
During the course of the year, the Budget Division will be responsible for the review of annual
obligations in conjunction with the operating plan. DHS normally conducts formal reviews for
first quarter results in February and mid-year results in May.
The focus of the reviews will be to analyze the obligation of resources to judge whether funds
are being administered in accordance with the purposes for which they were authorized and
appropriated. Staffing levels, including onboard strength and vacancies, and progress on
achieving performance metrics will be included in the review. The Monthly Execution Report is
a valuable tool for analyzing current agency operations and the status of funds shall reflect the
most current data. The framework for this report is discussed below.
The DHS Budget Division, with input from Commandant (CG-831), will review the obligations
to date and the projected surplus or deficit for each Coast Guard appropriation and PPA.
Funding projections will include the planned carryover of funds into the current FY, as displayed
in the financial plan. These analyses will be reported to DHS’s senior leadership. If significant
deviations from the plan materialize (usually an underutilization of funds greater than
10 percent) and cannot be justified to DHS Budget Division staff, the DHS CFO may initiate
formal correspondence or meetings with Coast Guard leadership to resolve any potential
differences and, where necessary, initiate the reprogramming or appropriation transfer
notification process to divert funds to programs in greater need of available funding.
DHS policies prescribe that the Coast Guard review its operating plans and provide updates as
necessary that reflect significant changes. General Coast Guard policies for managing and
controlling FMOP changes are provided in Subsection 5.6.24 (Managing Changes in the
Application of Budgetary Resources within an Appropriation).
The Coast Guard operating plan submission (currently referred to as the “Monthly Execution and
Staffing Report”) shall represent a summary of the FMOP. The appropriations to be included in
the plan shall be determined by DHS.
DHS is required to submit periodic reports to OMB on Federal outlays to assist in the monitoring
of spending and to improve Treasury Department forecasts of the Government’s daily cash
operating balances, borrowing requirements, and debt subject to legal limits, including trust and
special fund investment activity. This requirement is discussed in Section 135 of OMB Circular
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A-11 and is supplemented by periodic DHS guidance. Realistic outlay estimates, particularly for
the immediate six-month period, enable Treasury to borrow only amounts needed to finance
Government activities, thus reducing interest costs and overall cash balances maintained in the
Treasury. DHS is required to report a CG-wide total of outlays by month for all appropriations.
5.5.9 Establishing Operating Plans within the Coast Guard Funds Control
Structure
The Coast Guard’s funds control hierarchy below the appropriation level includes the allowance,
target, and program element levels. Appropriation level controls are established through OMB’s
issuance of apportionments of budgetary resources and DHS’s issuance of allotments at the
appropriation level to the Commandant of the Coast Guard. These control points are prescribed
in law and OMB/DHS regulations. Below the appropriation level, the Coast Guard has
considerable flexibility in establishing the funds control structure within each appropriation.
(See Principles of Appropriations Law, Third Edition, Volume II, Page 6-142.)
Commandant (CG-831) for each appropriation or fund is hereby given the authority to determine
the specific elements of funds control needed to meet Coast Guard funds control objectives. In
most cases, Commandant (CG-831) is carrying out the budget decisions made by Commandant
(CG-8) in deliberations with the executive staff of the Coast Guard. These elements shall also
serve as the basis for defining the structure of the FMOP (at the allowance level) and the various
operating plans derived from the FMOP document (“spend” plans developed at the target and
program element levels). Commandant (CG-831) shall maintain documentation of the funds
control structure and delegate the funds control responsibilities in writing to a designated
allowance manager. In exercising this authority, Commandant (CG-831) shall observe the
following general guidelines in establishing and applying the following elements of funds
control:
5.5.9.1 Allowances
1. Commandant (CG-831) has the authority to withhold and reserve amounts from the
allowances in order to meet unforeseen requirements of the appropriation that are not
covered by the allowances, or to provide for contingencies within the appropriation. For
example, highly volatile price fluctuations for certain goods and services, e.g., fuel, may
require the reservation of funds from other object classes of expenditure to meet year-end
requirements for fuel.
2. Groupings of allowances may be used to define these limitations and other funds control
entities required to improve the management of funds.
5.5.9.2 Targets
1. Allowance managers, in consultation with and at the direction of Commandant (CG-831),
shall establish the targets that represent appropriate organizational and geographical
groupings within each allowance. The establishment and definition of targets is dictated
largely by the executive staff of the Coast Guard in the budget formulation and other
management processes. Allowance managers shall transmit target amounts to a specific
individual within the target entity to carry out the numerous responsibilities outlined for
target managers in this and related Coast Guard policies. The allowance manager, in the
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delegation of authority to the target manager, shall convey the authority to redistribute
funds from one target manager covered by the allowance to another target manager.
Such delegations shall establish certain thresholds for the redistribution of those amounts
and establish any other terms and conditions governing the movement of funds.
2. Funding is generally provided to targets when a project, facility, program, or requirement
is first established. For districts, a system of budget forecasting – the Operations Budget
Model – may be applied to determine the distribution of funds. In subsequent years this
funding generally becomes a part of the target base. (The base is automatically provided
each year at the same level as in previous years, unless significant changes to
requirements, including cost of living adjustments, occur). When a facility is
decommissioned or a requirement is no longer needed, funding is withdrawn from the
base. Each major Headquarters (HQ) unit, as defined and documented by Commandant
(CG-831), shall be treated in much the same manner as a target.
3. When issuing target amounts, allowance managers shall inform target managers of any
special limitations that apply to the target. For example, target managers should be
advised specifically when portions of the amount distributed to the target may pertain to
certain suballotments of funds for a certain purpose (e.g., PPAs funded in specific
amounts in language within the appropriation) that is subject to the ADA.
4. Allowance managers shall allocate amounts to each target so that the totals allocated do
not exceed the amounts provided to the allowance within the FMOP, the related funds
controls entered into the accounting system of record, related Monthly Expenditure and
Staffing Reports, and other reports prepared for the purpose of monitoring the status of
funds.
5. Smaller appropriations may not require a target level of funds control to provide adequate
safeguards over the rate of obligation and application of budgetary resources.
6. Allowance managers, in consultation with Commandant (CG-831), shall direct the
development of appropriate target operating plans, e.g., a distribution of main object
classes by quarter, to support the funds control requirements established within the
allowances reflected in the FMOP.
5.5.9.3 Program Elements
1. Target managers, in consultation with and at the direction of related appropriation and
allowance managers, shall establish program elements to serve as the basic building
blocks within the funds control hierarchy.
2. All appropriations and funds covered by these BRM guidelines shall establish at least one
program element within each TAFS.
3. All obligations managed within the FMOP shall be made from a program element that is
clearly linked to a related target and allowance within the appropriation.
4. The authority to establish program elements may be delegated by Commandant (CG-831)
and allowance managers to the target manager.
5. The target manager shall require that program elements be executed with a positive
balance and that no financial transaction shall be approved which causes a negative
balance.
COMDTINST M7100.3F
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6. The target manager may require the development of program element operating plans.
For example, planning by “object class codes,” including expenditure by quarter, and
monitoring expenditure rates to the extent necessary to keep the target’s obligations
within its funds control limits.
7. Care should be exercised in establishing only those program elements required to execute
the budget efficiently and effectively. The establishment of excessive numbers of
program elements can result in a highly fragmented budget execution plan for the
appropriation because it can result in numerous small balances at year-end that require
excessive time to properly manage.
5.5.10 Coordinating Legal Requirements from Appropriations Language
with the Judge Advocate General & Chief Counsel (CG-094)
5.5.10.1 Appropriations Language Review Process
Prior to the enactment of Coast Guard appropriations, Commandant (CG-831) shall continually
monitor and review the specific versions of appropriations language coming out of the House,
Senate, and conference committee reports. The review shall focus on structural changes in
appropriation language from the appropriations enacted in the prior year.
As changes are reviewed and developed further in the appropriations process, Commandant
(CG-831) should consult informally with Commandant (CG-094) legal staff to determine the
effects of enactment of the provisions on the Coast Guard’s funds control system. For example,
certain changes made in the appropriation language may impose a new condition or limitation
subject to the ADA’s provisions. FINCEN and other financial systems staff should be kept
apprised of these developments to make systems changes and publish classification structure
changes required to support funds control. These actions should be taken in a timely fashion
after enactment of the Coast Guard’s appropriations.
These language changes should also be reviewed to determine whether the language changes
might require a modification to the apportionment request to OMB. For example, specific
earmarks of amounts for specific programs, projects, or activities that were previously only
contained in conference appropriation reports – and not in the language of the appropriation act
itself – should generally be treated as separate Category B apportionments within the TAFS of
that appropriation. This change will provide the necessary breakout of obligations related to the
Category B limitations and the status of obligations against those limitations in the external
Report on Budget Execution and Budgetary Resources, Form SF 133, reports. The obligation of
funds in excess of the earmarks prescribed in language and/or the comparable amount
established in the Apportionment and Reapportionment Schedule, Form SF 132, constitute
violations of the ADA.
After completing the appropriations language review, Commandant (CG-831) shall issue an
analysis of all appropriations language changes (other than changes to amounts). In many
instances, some appropriations language may contain nonmonetary limitations on fund use. For
example, a limitation on the purchase of certain numbers of passenger vehicles may be included.
The appropriations language review shall identify the types of procurement or other
administrative controls that will be used to meet these and similar legislative provisions, and the
individual or organization that will be responsible for compliance. The appropriation language
COMDTINST M7100.3F
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review shall also include any special provisions contained in the DHS general provisions that
apply to the Coast Guard and any Governmentwide general provisions contained in Treasury’s
appropriation.
On occasion, an appropriation act provision may establish a floor on spending for a specific line
item in the Coast Guard budget. These provisions are generally considered to preclude the use of
the designated funds for any other purpose. The FMOP should identify these and similar
circumstances that apply to the funding distributions contained in the plan.
The appropriations language review shall be incorporated as an integral part of the FMOP and
distributed to Coast Guard component organizations to increase awareness of the legislative
framework in which the budget must be executed.
5.5.10.2 Delineating Appropriations Language and Reprogramming Limitations
in FMOP Documents
Commandant (CG-831) shall take the opportunity, upon the release of the FMOP, to remind
allowance managers of the general requirements of the ADA as discussed in Chapter 3
(Administrative Control of Funds). Allowance managers may be fully aware that they could be
held responsible for an ADA violation if an overobligation of authority in their allowance causes
the overobligation of amounts apportioned and/or allotted to the appropriation as a whole.
However, these managers may not be aware of potential violations of the act that pertains to
special limitations passed by the Congress. Therefore, Commandant (CG-831) shall clearly
delineate in its portion of the FMOP any special limitations that may apply to the distribution of
funds to the allowances within the appropriation. Allowance managers should be constructively
notified in the plan when there are special limitations subject to the ADA within the
appropriation. When, for example, a provision of the appropriation act identified in the
appropriation language review establishes a ceiling on a specific project, program, activity,
object class, etc., the FMOP shall identify, in the body of the plan or in a footnote, those
allowances whose funding is subject to those provisions. See Subsection 5.5.11 (Statutory and
Administrative Ceilings – Ceilings in the Authorization Process) in this Manual for additional
information on statutory and administrative ceilings.
5.5.11 Statutory and Administrative Ceilings – Ceilings in the Authorization
Process
For example, the Coast Guard authorization acts generally contain specific levels for end-of-year
active duty military strength as a statutory and administrative ceiling. The Assistant
Commandant for Human Resources (CG-1) manages the active duty strength based on the
section of the act that specifies authorized levels of military strength and training. In addition,
the Selected Reserve strength is also a statutory and administrative ceiling as enacted in the DOD
authorization act and identified as the “maximum” authorized strength of the Coast Guard
Selected Reserve. It requires Commandant (CG-1) to maintain the selected reserve strength
(within that maximum) at a number that can be fully trained at the funding level appropriated.
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5.5.11.1 Civilian Employment Ceilings
Coast Guard budget allowances for the budget year usually include FTE ceilings on full-time
permanent civilian employment. Increases to the FTE ceiling for part-time and temporary
employment can come from the full-time FTE ceiling.
An FTE ceiling represents the total number of work years that an agency may incur in each
category. The OMB and Congressional Stage allowances normally include an update of the
current-year ceiling. The Office of the Secretary for DHS issues this ceiling to the Programs
Division. DHS and their Office of Personnel receive a monthly report detailing civilian
employment.
5.5.11.1.1 Interim Ceilings and Hiring Constraints
In addition to the OMB-imposed 30 September ceiling, it is possible that the Secretary might
wish to impose more restrictive controls. This may be in the form of hiring constraints (e.g.,
three-for-four) or total employment targets for other than 30 September. As far as the Coast
Guard is concerned, both ceilings are equally binding, but the opportunity for relief from
departmental-imposed ceilings is obviously greater.
5.5.11.2 Cash Outlay Ceilings
Cash outlay ceilings are additional administrative controls that OMB can impose. This is
normally received as a total ceiling for all appropriations and funds. Updates occur upon receipt
of budget-year allowances, and after Congressional action on pay, supplemental, and regular
appropriations.
Outlay ceilings are a subdivision of a statutory ceiling imposed on the executive branch by
Congress.
5.5.11.3 Other Ceilings in Appropriation Language – Passenger Vehicles
Appropriation language limits the number of passenger vehicles the Coast Guard may purchase
or lease each year. Recent appropriation language limited passenger motor vehicle purchase or
lease to be for replacement only. The definition of passenger vehicles includes sedans, station
wagons, ambulances, and buses. A vehicle transferred from another Federal Government
department constitutes a purchase. A detailed explanation of the Coast Guard vehicle program is
located in the Motor Vehicle Manual, COMDTINST M11240.9 (series).
5.5.11.3.1 Operation of Aircraft
The number of aircraft, including helicopters, which the Coast Guard may operate during a fiscal
year, comes from the prior authorization or appropriation language. This limitation does not
include aircraft in storage, but it does include those “support” aircraft that are used to replace
aircraft withdrawn from air units for overhaul or other purposes.
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5.5.11.4 Dependent Schooling Overseas – DOD Ceiling
14 USC 2946 includes a provision authorizing payment of tuition for overseas dependents in
primary and secondary schools under specified conditions at costs not greater than those of the
DOD for the same area. DOD administratively determines this ceiling.
5.5.11.5 Federal Debt Ceiling Restrictions
31 USC 3101 establishes the maximum amount that the Federal Government may borrow to
discharge its obligations (commonly referred to as the “debt ceiling”). When this maximum
amount has been reached, the Federal Government may not borrow additional money to meet its
payment obligations. This may affect the Coast Guard’s ability to make payments, incur
obligations, or hire employees. Should such a situation exist, Commandant (CG-8)/CFO will
issue an ALCOAST directing appropriate action.
5.5.11.6 Travel and Other Ceilings
Administrative ceilings frequently govern travel and other administrative costs. Policies and
procedures related to ceilings will be provided, usually by FINCEN or by Commandant (CG-84),
in conjunction with the Directive establishing the ceiling.
5.5.12 Formulating and Establishing the Financial Management Operation
Plan (FMOP)
An FMOP shall be prepared for every Coast Guard appropriation or fund, unless that entity is
exempted by Commandant (CG-83). Commandant (CG-831), in consultation with the
counterpart budget analyst from Commandant (CG-82), shall develop an appropriate format that
is commensurate with the size, scope, and complexity of each appropriation.
In some cases, the congressional action may reflect an “undistributed” increase or decrease in
funding outside the resource proposal line items. The FMOP shall serve as the definitive
authority for the distribution of those amounts (either increases or decreases) to the allowances
(and/or lower levels in the funds control hierarchy where appropriate) established for the
appropriation. The FMOP distribution shall serve as the basis for establishing the amounts to be
recorded in the accounting system of record for allowances.
5.5.12.1 Reimbursables
The Reimbursables Section of the FMOP identifies the obligation authority anticipated for the
entire year from reimbursement agreements that will be concluded with other Government
agencies and from reimbursements from user fees for services provided to the public. A
Reimbursable Section shall be provided in the plan for every appropriation that anticipates
reimbursable funding. Estimates for anticipated reimbursements shall never be issued in the
funds control system until a valid reimbursable agreement (RA) has been concluded or
requirements for user fee anticipated reimbursements have been met. Thus, the FMOP related to
reimbursables is divided into two parts:
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1. The Realized Reimbursements Section identifies the amounts concluded in RAs with
other Government agencies that will be added to the appropriations and other budgetary
resources available to each appropriation.
2. The Anticipated Reimbursements Section identifies RAs that are expected to be
concluded with other Government agencies. This Section shall include all
reimbursements that have not been formally signed by both the Coast Guard and the
ordering agency, whether or not the value of the reimbursable work has been determined.
The amounts shown in this portion of the FMOP represent placeholders for planning
purposes. These amounts are not available to allowance managers as obligational
authority, but only represent estimates of additional obligational authority to be added to
that allowance when an RA is concluded.
Section 7.10 (Reimbursable Agreements) in this Manual identifies the conditions for accepting
reimbursable work. One of these conditions requires the determination that the reimbursable
work can be performed without adversely affecting regular, direct Coast Guard programs. The
inclusion of an anticipated RA in this portion of the FMOP and the scope of work as reflected in
the amount represents the policy approval of the item. Agreements added to the FMOP, or
agreements whose scope is increased by adding substantially to the amounts reflected in the
FMOP, shall require policy approval prior to the establishment of the RA.
The amounts reflected in both the Realized and Anticipated Reimbursements Section are
normally equivalent to – but should never be greater than – the combined realized and
anticipated reimbursements lines on the most recent apportionment approved by OMB. If
reimbursable work is anticipated in excess of the total amounts provided in the latest
apportionment schedule, a reapportionment request to increase the anticipated amounts should be
made as soon as possible.
5.5.12.2 Unobligated Balances
The FMOP shall provide, for each appropriation containing multi-year and no-year Treasury
Appropriation Fund Symbols, the latest estimated amounts of unobligated balances from prior
years. These estimates shall be distributed in the plan to the allowance level, and in some
appropriations, to lower levels where necessary to identify distributions by project, program, or
activity.
5.5.12.3 Recoveries
Recoveries of prior-year appropriations may represent significant resource levels in some multi-
year and no-year appropriations. The FMOP shall provide a distribution of these amounts to the
allowance levels in each appropriation to the extent that they are estimated in the apportionment
request to OMB. These resources shall be controlled in the same manner as the anticipated and
realized reimbursements discussed above. Commandant (CG-831) shall maintain appropriate
supporting information of the estimated recoveries likely to materialize within each allowance.
For example, historical rates of recoveries of obligated balances and the canvassing of allowance
managers and procurement officials to identify circumstances in individual major contractual
agreements that may result in recoveries. These amounts shall be incorporated into the resource
base of the FMOP.
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5.5.13 Revolving Funds
Managers of revolving funds shall prepare financial management operation plans (operating
plans) for the Supply Fund and the Yard Fund to reflect decisions made during budget
formulation for these revolving funds. Each of these funds shall identify the anticipated level of
obligational authority needed in the current year to fund each of its main business lines as
defined by Commandant (CG-831) for the fund, e.g.:
1. Supply Fund: uniforms, commissary provisions, general stores, and fuel.
2. Yard Fund: ship construction, materials, supplies, equipment, civilian labor, overhead,
maintenance, weapons, electronics, and other expenses.
The obligations established shall reflect the obligational authority requested in the latest OMB
apportionment for the funds and shall serve as a ceiling on obligations to be incurred throughout
the current fiscal year. The level of obligations reflected in the plan – and the related
apportionment issued by OMB and allotment issued by DHS – may only be increased when
covered by an approved reapportionment and re-allotment.
The operating plan for each revolving fund shall identify the sources of funding, from both Coast
Guard and external funding sources, which comprise the anticipated levels of obligations. Those
sources of funding from Coast Guard appropriations shall identify the amounts within each
allowance within each appropriation that will transfer obligational authority into the funds to
support the operating and business plans of these revolving funds.
For those business lines funded primarily from offsetting collections from Coast Guard
personnel, the operating plan shall be based upon budget models established to forecast business
volumes and changes in the costs of goods and services provided (e.g., commissary provisions
and uniforms).
The sum of each revolving fund’s total obligational authority for the current FY identified in the
plan shall equal:
offsetting collections anticipated for orders placed by the individual Coast Guard
allowances, plus
reimbursable income from other Federal agencies and the public (including collections of
unexpired Federal sources from prior-year orders), plus
income received from the sale of surplus equipment and materials (to the extent that such
sales are authorized to be credited to the fund), plus
unobligated fund balances carried forward in the fund from the prior FY, plus
estimated recoveries of amounts obligated in prior FYs, less
estimated carry-over of unobligated amounts into the next FY as retained earnings to
cover future obligations.
The amounts contained in the reimbursables sections of the fund’s operating plans may not be
consistent with the related entries in the full-year apportionment request submitted prior to the
start of the FY as provided in Subsection 5.4.2 (Preparing Apportionments Required Prior to the
Start of the Year) above. These differences are due to the varied timing of final congressional
action on appropriations. The level of obligations set forth in the operating plan shall be
consistent with the obligational authority established in the revolving fund apportionments.
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5.6 Actions Taken during the Fiscal Year
5.6.1 Availability of Funds by Purpose
This Subsection provides general principles, authorities, and guidelines governing the proper use
of appropriations. These principles are derived from several sources, including general
appropriations law, provisions contained in the language for each appropriation, general
provisions in certain appropriation acts, and other regulatory policies. See Subsection 5.6.1.1.1
(Authorities) below.
The policies stated in this Subsection are derived from the basic “purpose” statute found at
31 USC 1301(a), which states, “Appropriations shall be applied only to the objects for which the
appropriations were made except as otherwise provided by law.” Thus, appropriations have
conditions and rules that must be followed if funds are to be legally expended and obligated.
Purpose is one of the three basic elements in determining whether appropriations are legally
available for obligation or expenditure. In order for an obligation or expenditure to be legal,
each of these three elements must be met:
1. Purpose – The purpose of the obligation or expenditure must make a direct contribution
to an authorized Coast Guard function.
2. Time – The obligation shall occur within the time limits applicable to the appropriation.
3. Amount – The obligation and expenditure shall be within the amounts Congress has
established.
If funds are not spent according to these principles, the Coast Guard risks an Antideficiency Act
(ADA) violation.
5.6.1.1 Overview of the Proper Use of Coast Guard Funds
5.6.1.1.1 Authorities
Following are sources that provide guidance related to the purpose principle on the use of funds.
All Coast Guard officials with authority over funds shall be aware of these sources and shall
make frequent reference to them when questions arise on the appropriateness of certain
obligations in each appropriation.
1. Financial Services and General Government Appropriation Act.
Each year, this appropriation act includes Governmentwide general provisions that
govern how funds provided in all appropriation acts can be spent. These provisions
include Governmentwide restrictions on the use of funds that must be followed by all
Federal agencies. While many of the restrictions are re-enacted each year, they are
subject to change and shall be reviewed each year.
https://www.congress.gov/bill/113th-congress/house-bill/5016
2. Department of Homeland Security Appropriation Act.
Each year, this appropriation act contains general provisions that all DHS agencies are
required to follow. These provisions, and any related departmental budget execution
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guidance shall be reviewed annually to confirm that the Coast Guard is following these
requirements.
https://www.congress.gov/114/plaws/publ4/PLAW-114publ4.pdf
3. Individual Coast Guard Appropriations.
The Coast Guard appropriations prescribe additional rules and restrictions on how funds
can be expended.
4. Government Accountability Office, Principles of Federal Appropriations Law (“Red
Book”). Volume I, Section 4 of this source provides guidance and case studies on the
general principles.
http://www.gao.gov/legal/red-book/current-edition
5. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM).
DHS provides guidance on budget execution. Included are DHS-wide policies and
procedures.
http://cfo-policy.dhs.gov/default.aspx
In addition to the above sources, individual appropriations have legislation and authorities that
guide in the proper and improper use of funds. Subsection 5.6.1.2 (General Purpose by
Appropriation) in this Manual includes a breakdown by appropriation of the legislation that
governs their use.
5.6.1.1.2 General Policies Regarding Purpose
The Coast Guard’s system of funds control provides a framework for ensuring that funds are
spent correctly with respect to the principles of purpose, time, and amount.
5.6.1.1.2.1 “Necessary Expense” Doctrine
Appropriations made for a specific purpose (e.g., altering a bridge) are available for expenses
necessary to accomplish the project goals.
When applying the necessary expense doctrine, obligations and expenditures can be justified
after meeting a three-part test:
1. The expenditure shall bear a logical relationship to the appropriation sought to be
charged. In other words, it shall make a direct contribution to carrying out either a
specific appropriation or an authorized agency function for which more general
appropriations are available.
2. The expenditure shall not be prohibited by law.
3. The expenditure shall not be otherwise provided for; that is, it shall not be an item that
falls within the scope of some other appropriation or statutory funding scheme.
For questions on the necessary expense doctrine, refer to the GAO “Red Book”, Volume I,
Chapter 4, Section B.
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5.6.1.1.2.2 Time – Bona Fide Needs Rule
An appropriation is only available for the needs of the current year; it is not available for the
needs of a prior or future year, unless otherwise prescribed. The bona fide needs rule states that
a fiscal year appropriation may be obligated only to meet a legitimate or bona fide need arising
in the fiscal year for which the appropriation was made. This principle addresses problems
related to end-of-year spending, when excessive obligations are made for goods or services that
extend far beyond the current year (e.g., excessive stockpiles of inventories).
This rule also applies to multi-year funds. An agency may use a multiple-year appropriation for
needs arising at any time during the period of availability.
The rule does not apply to no-year funds. Without a prescribed period of availability, there is no
fixed period during which the bona fide need must arise for which the funds must be obligated
and expended.
The GAO “Red Book”, Volume I, Chapter 5, Section B has an in-depth discussion of the bona
fide needs rule.
5.6.1.1.2.3 Appropriations Available for the Same Purpose
There may be situations where two appropriations (or formal subdivisions of budget authority)
can possibly be available for the same purpose, but neither can reasonably be called the more
specific of the two.
In this circumstance, the Coast Guard may exercise reasonable discretion to select which
appropriation (or other formal subdivision of budget authority) to charge for the expenditure in
question. Once the decision has been made, the Coast Guard shall continue to use the same
appropriation for that purpose unless, at the beginning of the fiscal year, the agency informs
Congress of its intent to change for the next fiscal year.
5.6.1.2 General Purpose by Appropriation
This Subsection provides an understanding of each appropriation and how it is to be used. It also
provides general guidance on the purpose principle.
The Coast Guard has many different appropriations, some of which can easily overlap each
other. It is important to have a clear understanding of the purpose of each appropriation and how
Congress intends for the funds to be spent. Furthermore, in reports accompanying most Coast
Guard appropriations, Congress details informal program structures to express its intent to the
Coast Guard for the use of funds. These structures allow for less rigid mandates on the
application of budgetary resources, and avoid specific legislative provisions. These categories,
programs, projects, or activities (PPAs) are subject to reprogramming guidelines contained in
DHS appropriations acts. The PPA structure, established within some appropriations, shall be
followed as obligations are incurred to meet Congressional expectations on the use of funds for
more specific purposes within an appropriation.
5.6.1.2.1 Appropriations and Related Allowances
1. Operations & Support (O&S) – The O&S appropriation provides for the operation and
maintenance of all authorized Coast Guard programs and facilities (not otherwise
specifically provided for in other appropriations or funds). O&S is typically an annual
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appropriation that is available for one year. O&S appropriations are broken down by
PPA subdivisions and by the allowance. Definitions by allowance are provided below.
Financial Resource Management Manual - Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 2, Appendix 2-4 (AFC-30 Operating and
Maintenance/Commandant (CG-83)) and Appendix 2-5 (AFC-36 Central Accounts)
provides additional detail on the uses of the O&S appropriation.
a. PPA 1 – Military Pay and Benefits
1) AFC-01 Military Pay – compensation, subsistence rations, and entitlements for
active duty members, cadets.
2) AFC-20 Permanent Change of Station (PCS) – travel and transportation expenses
incident to PCS orders for military personnel and their dependents.
3) AFC-57 Health, Safety, and Work-Life – general expenses to support health care
for military members and their dependents.
b. PPA 2 – Civilian Pay and Benefits
AFC-08 Civilian Pay – compensation, benefits, and costs associated with civilian
working capital funds, PCS, legal settlements, temporary (detail) assignments on
reimbursable basis and reimbursable positions in the Coast Guard.
c. PPA 3 – Training and Recruiting
1) AFC-56 Training – formal training performed as a temporary assignment duty
(TAD) for civilian, military personnel, reserve members, and auxiliarists. AFC-56
is funded by Reserve Training (RT) for the cost of quotas for reserve personnel
recruited with no prior military service through the RT-to-O&S refund.
2) AFC-34 Training and Recruiting Centers – operating and maintenance expenses
for training and recruiting centers and facilities.
d. PPA 4 – Operating and Maintenance
1) AFC-30 Operating and Maintenance – general operating and maintenance
expenses, including ordnance. Travel, per diem, and tuition for formal training
intended for field execution of training that is not approved nor funded through
the class convening schedule for Coast Guard class “A” and “C” resident and
exportable training courses.
2) AFC-40 Other Activities – funds for operating projects or expenses approved by
Commandant (CG-8).
e. PPA 5 – Central Accounts
AFC-36 Central Accounts – general Coast Guard accounts that are centrally managed
at Headquarters. Accounts include Ammunition (AMMO), Enterprise
Communication/Network Services (formerly FTS), GSA (Rent and Security),
Medals, Postal, Standard Workstation, Work-Life, and Working Capital Fund. Each
account has a direct manager, but the overall management of AFC-36 is performed by
Commandant (CG-83).
f. PPA 6 – Depot-Level Maintenance
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1) AFC-41 Aeronautical Engineering – depot-level maintenance expenses incurred
in support of the Aviation Logistics Support Program.
2) AFC-42 Command, Control, Communications, Computers, and Information
Technology (C4IT) – depot-level maintenance expenses incurred in support of the
Electronic Systems Logistics Support Program.
3) AFC-43 Civil Engineering – depot-level maintenance expenses incurred in
support of the Shore Infrastructure Logistics Center (SILC). General expenses
related to the maintenance of real property (land, buildings, and structures) to
preserve and maintain capability. Costs include nonrecurring major maintenance
and repairs, alterations, code compliance, demolition, direct project support cost
(i.e., travel, engineering design services, permits, inspections, etc.), and minor
improvements within the minor construction authority.
4) AFC-45 Naval Engineering – depot-level maintenance expenses incurred in
support of the Naval Engineering Logistics Support Program.
g. No PPA
1) AFC-75 Reimbursable/Refund Program – This contra reimbursable account
allows tracking of reimbursable obligations, and is administered by the Office of
Resource Management (CG-83). (A contra account provides a more detailed
presentation of an account balance. For example, “accumulated depreciation” is a
contra account for fixed assets, and highlights the depreciation that reduces the
original cost of purchasing the asset. The account and its related contra account
are combined to show the net balance of the fixed asset.)
2) AFC-77 Reimbursable Execution Accounts – This account funds O&M purchases
made at the ATU and field level with reimbursable budget authority managed by
Commandant (CG-83).
3) AFC-80 Reimbursements – This general account is used for establishing and
identifying reimbursable agreements. The sole purpose of AFC-80 is to accept
funds in the Coast Guard accounting system for reimbursable work for other
Government agencies and non-Government entities in accordance with specific
legislative authority. AFC-80 is managed and controlled by Commandant
(CG-83).
4) AFC-90 Reserve Training Program – provides funding for recruiting, training,
administration, and management of the reserve component. This includes
compensation, commuted rations, and entitlements for all Reserve inactive duty
and active duty including: active duty for operational Support-Reserve component
(ADOS-RC); Reserve initial active duty training (IADT) (i.e. Reserve Officer
Candidate Indoctrination (ROCI) program, Direct Entry Petty Officer Training
(DEPOT) program and Selected Reserve (SELRES) Boot Camp attendance), and
pay/travel requirements for Class A and C School attendance.
5) AFC-91 Full Time Support (FTS) Military Pay Reserve Training (RT) Personnel
– used for compensation, subsistence rations, entitlements, and special and
incentive pay for Reserve Training Full Time Support (FTS) active duty in the
Operations & Support (O&S) appropriation.
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6) AFC-92 Civilian Pay for Full Time Support (FTS) Reserve Training (RT)
Personnel – used for compensation, benefits, and costs associated with RT
civilian pay in the RT PPA within the O&S appropriation.
7) AFC-94 Reserve Reimbursable Program – used for all reimbursable programs to
the Coast Guard Reserve, to include the Selective Service System, DOD, and
other agencies.
8) AFC-97 Reserve Training to Operations and Support (RT to O&S) – used to
refund certain other program costs charged to AFC-20, AFC-30, AFC-56, and
AFC-57. Such adjustments between appropriations are administered through the
Coast Guard Refund Program under the authority of 31 USC 1534. (For
Headquarters use only)
2. Procurement, Construction, and Improvement (PC&I) – The PC&I appropriation
provides for the acquisition, construction, renovation, and improvement of vessels,
aircraft, shore facilities, aids to navigation (ATON) systems and facilities, Command,
Control Communications, Computers and Information Technology (C4IT) systems, and
related equipment. PC&I funds are typically available for obligation as follows:
a. Acquisition, repair, renovation, and improvement of vessels: typically five fiscal
years.
b. Acquisition, repair, renovation, and improvement of shore facilities and ATON:
typically five fiscal years but can be two or three fiscal years.
c. Acquisition, construction, renovation, and improvement of new aircraft and increases
in aviation capability: typically five fiscal years but can be three fiscal years.
d. Acquisition, construction, replacement, or improvement of capital equipment not
included in the above categories: typically five fiscal years but can be three fiscal
years.
e. Personnel and administrative expenses: typically, one fiscal year.
3. Research & Development (R&D) – The R&D appropriation provides funding for
applied scientific research and development. This includes the maintenance,
rehabilitation, lease, and operation of related facilities and equipment. Prior to Fiscal
Year 2012, R&D funds were typically available until expended (no-year funds). In fiscal
years 2012 and 2013, R&D funds were appropriated to remain available for five years.
In fiscal years 2014 through 2016, R&D funds were appropriated to remain available for
three years.
4. Environmental Compliance and Restoration (EC&R) – The EC&R Program, Project,
or Activity (PPA) provides for environmental compliance and restoration of
contamination from hazardous substances and pollutants at all current and former Coast
Guard facilities. It provides for identification, investigation, and cleanup, and also
physical changes to Coast Guard buildings and structures, to comply with Federal, State,
and local environmental laws and regulations. Prior to fiscal year 2012, EC&R funds
were available until expended (no-year funds). However, recent appropriations have
stated that EC&R funds are to remain available for five years.
5. Alteration of Bridges (AB) – The AB appropriation provides for the Government’s
share of altering or removing railroads and publicly owned bridges that obstruct
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navigable waterways in the United States. The AB program also receives funding from
transfer authority for highway bridges and supplemental appropriations for specific
bridge projects in accordance with public laws (e.g., Federal Aid Highway Bridge
Program, American Recovery and Reinvestment Act of 2009). The administrative costs
associated with AB are funded under the O&S appropriation. AB funds are normally
available until expended (no-year funds). The authorization of this appropriation is found
in the Truman Hobbs Act.
6. Reserve Training (RT) – The RT PPA is a PPA that provides for the operation,
recruiting, training, administration, and management of the reserve program. Other
administrative costs chargeable to RT are executed in O&S and are reimbursed through
the RT to O&S refund program.
7. Retired Pay (RP) – The RP appropriation provides for the pay of former military
members of the Coast Guard, the Coast Guard Reserve. It also funds survivor annuity
payments under the Retired Serviceman’s Family Protection Plan and the Survivor
Benefit Plan, as well as medical benefits for retirees and their dependents. RP funds are
available until expended (no-year funds).
8. Boat Safety (BS) – The BS appropriation provides funding for the development and
implementation of a coordinated national recreational boating safety program. The
provisions of the law provide for the transfer of Highway Trust Fund revenue derived
from the motorboat fuel tax, and certain other taxes, to the Sport Fish Restoration and
Boating Trust Fund. Congress authorizes appropriations from this fund for Coast Guard
and state recreational boating safety assistance and other programs specified by law. BS
account funds are available until expended (no-year funds).
5.6.1.3 Responsibilities for the Proper Use of Funds
5.6.1.3.1 Appropriation Managers
Appropriation managers:
1. Distribute funds to allowance managers for the purpose intended by Congress.
2. Provide guidance to allowance managers on the appropriate use of funds for their
appropriation.
3. Monitor the status of allowances ensuring that:
a. Funds are obligated and expended according to their purpose; and
b. Obligations and expenditures do not exceed the appropriation or an apportionment.
4. Notification for reprogramming funds between PPAs is initiated and redistribution of
funds between allowances is authorized.
5.6.1.3.2 Allowance Managers
Allowance managers:
1. Distribute and manage subdivisions of allowance amounts.
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2. Monitor and control obligations and expenditures of an allowance according to its
availability regarding purpose, time, and amount.
3. Monitor rates of obligation within each allowance.
4. Make requests for redistribution between allowances or reprogramming between PPAs,
and subsequently manage within reprogramming thresholds.
5.6.1.3.3 Target Managers
Target managers:
1. Distribute and manage subdivisions of target amounts, and monitor obligations and
expenditures of targets according to availability regarding purpose, time, and amount.
2. Ensure obligations and expenditures do not exceed target distributions.
3. Coordinate target management with allowance managers.
5.6.1.3.4 Program Element Managers
Program element managers:
1. Distribute and manage subdivisions of program element amounts, and monitor
obligations and expenditures of program elements according to availability regarding
purpose, time, and amount.
2. Ensure obligations and expenditures do not exceed target distributions.
3. Coordinate target management with target managers.
5.6.1.3.5 Authorized Certifying Officers
Authorized Certifying Officers:
1. Certify the legality and accuracy of proposed payments.
2. Are liable for the amount of illegal or improper payments resulting from their
certifications.
3. Deny the payment of an obligation or expenditure if it is prohibited by law, or if it is not a
legal obligation under the appropriation or fund involved.
5.6.1.4 Procedure for Questions on the Availability of Funds as to Purpose
As questions arise on the appropriate use of funds, the following policy will be followed to allow
clarification on the availability of funds and to confirm that there is no violation of the purpose
statute, general provisions, or provisions in appropriation language.
1. Procurement officials will resolve all questions prior to obligating funds on behalf of the
Coast Guard. All questions and decisions will be thoroughly documented.
2. For questions on the purpose of an appropriation, procurement officials should seek
counsel from the Office of Procurement Law or Legal Support Command.
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3. If the Coast Guard is unable to determine the legality of the use of funds, it may seek an
opinion from the DHS Office of General Counsel (OGC), or it may seek an outside
advisory opinion from the Comptroller General.
5.6.2 Commitments – By Document Type and/or Object Class
A commitment is an administrative reservation of allotted funds in anticipation of an obligation.
While not legally binding, commitments are made with the anticipation that funds will be
obligated, thus reducing the amount of funds available for future spending.
A commitment is a financial management tool to be used as a part of a comprehensive and
integrated commitment, obligation, accrual, and disbursement process, providing funds control
and status of funds for management, reporting and oversight.
The commitment accounting policy described in this document is the first step in funds
management and control of Coast Guard budgetary resources. Commitments reserve specific
funds and link the budgetary resource to a document and an accounting line.
5.6.2.1 Purpose
This policy establishes the use of commitment accounting to provide funds control and funds
management. The policy provides reasonable assurance that:
1. The Coast Guard establishes the use of commitment accounting to provide funds control
and funds management.
2. Commitments are recorded in the proper amount, account, and period, and only valid
transactions are recorded in the financial system.
3. Funds are reserved and available to meet operating requirements and to provide a fund-
control structure to meet regulatory and legal requirements as prescribed by OMB
Circular A-11 and the Antideficiency Act.
4. A management technique is made available and used to meet the requirements set out by
this policy.
5. Responsibilities are specified within the funds control system for the use of commitment
accounting standards.
6. A system for positive administrative control of funds is designed to restrict obligations
and expenditures against the amount available in allotments or other subdivisions of
funds.
7. The commitment process is described, and related operating procedures are defined.
8. Key internal controls are identified to maintain the reliability of the process.
5.6.2.2 Responsibilities
This Subsection addresses responsibilities from a budget execution organizational level for the
commitment process. Key roles involved in creating, authorizing, and certifying the availability
of funds for a commitment document are identified in the definitions and policies. These roles
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are not organization-specific. General roles and responsibilities of Coast Guard financial
managers are specified in Section 5.3 (Responsibilities).
5.6.2.2.1 Office of Resource Management (CG-83)
Commandant (CG-83) is responsible for:
1. Monitoring and improving the Coast Guard’s compliance with this commitment policy so
that it effectively supports funds control.
2. Monitoring the execution of the commitment policy.
3. Initiating and overseeing corrective actions to improve the effectiveness of the policy.
4. Providing sufficient training to financial managers regarding the execution and
importance of commitment transactions.
5.6.2.2.2 Funds Control Division (CG-831)
Commandant (CG-831) is responsible for:
1. Developing and implementing the commitment policy and system of internal controls to
execute, monitor, and measure the performance of the commitment control policy.
2. Establishing, implementing, and testing internal controls related to obligation validations.
3. Establishing and maintaining the funds control process and the system of controls, in
coordination with Commandant (CG-84).
4. Implementing improvements to the commitment policy, procedures, and process, as
needed.
5.6.2.2.3 Allowance Managers, Target Managers, and Program Element Managers
With respect to the funds assigned to them, allowance managers, target managers, and program
element managers (PEMs) are responsible for:
1. Identifying purchase request (PR) authorizers and certifying officials who are delegated
the authority to initiate, authorize, and certify commitments.
2. Implementing, maintaining, and monitoring the execution of this commitment policy.
5.6.2.2.4 Certifying Official (Funds Manager)
Funds managers are responsible for:
1. Maintaining administrative control of funds.
2. Certifying the availability of funds by purpose, time, and amount before the transaction is
recorded in the financial data system.
3. Supporting all required reviews and quarterly validations of open commitments.
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5.6.2.3 Policy
1. The Coast Guard shall use commitment accounting based on document types specified by
Commandant (CG-83) and delineated in their procedures.
2. The Coast Guard shall use a system of either manual or automated controls to detect and
deter the commitment of funds in excess of the availability of funds.
3. Segregation of duties is a key control within the commitment process. Effective internal
control procedures depend largely on eliminating opportunities to conceal errors or
irregularities. Commitments shall be authorized by separate individuals within the
organization who have received appropriate training. An individual shall only be
authorized to perform a single function within the commitment process for each
individual procurement request.
4. FINCEN, SFLC, and ALC shall maintain a list of all individuals responsible for
authorizing and certifying purchase requests. This list shall be updated on an annual
basis or upon change in status, and shall be maintained in a location where the document
is readily available for review. All individuals on the list must be current on all training
as required by position and duties. This includes ADA training.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Section 5.6, Procedure No. 5.6.1 (Commitments –
By Document Type and/or Object Class) for detailed procedures and guidelines related to the
following:
Step
Topic
5.1
General
5.2
Initiating a Purchase Request (Requester)
5.3
Authorizing a Purchase Request (Supervisor)
5.4
Certifying Funds Availability (Funds Manager)
5.5
Recording Commitments
5.6
Monitoring Commitments
5.6.3 Recording, Monitoring, Validating, and Certifying Obligations
5.6.3.1 Overview
The formal award of a purchase order, requisition, or contract represents a legal obligation.
Sometimes the award is “subject to availability of funds,” in which case the obligation is
deferred until the funds are available.
This Subsection prescribes the general requirements applicable to the management of obligations
(including the recording, monitoring, and validating of obligations), along with the periodic
certification of obligation accounts.
Obligation management plays an important role in the budget execution process, even after an
appropriation has expired. Upon the expiration of each appropriation with a fixed period of
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availability, a five-year period is allowed under statute for the appropriation’s existing
obligations to be adjusted and liquidated. After the five-year period, appropriation accounts are
closed and the balances are cancelled.
According to Section 130.14 of OMB Circular A-11, legitimately incurred obligations that have
not been disbursed (i.e., paid) at the time that a Treasury Appropriation Fund Symbol (TAFS) is
cancelled cannot be disbursed from the cancelled obligated or unobligated balances of the
cancelled TAFS. After an appropriation is cancelled, any obligations or adjustments to
obligations that would have been properly chargeable to that TAFS may be disbursed from an
unexpired TAFS that is available for obligation for the same purpose as the closed TAFS,
provided that:
1. The obligation or adjustment is not already chargeable to another unexpired
appropriation.
2. Payment of obligations against cancelled TAFSs from unexpired TAFSs is limited to one
percent of the appropriation in the unexpired TAFS. No more than one percent of an
unexpired TAFS may be used to pay any combination of cancelled obligations. This is a
single, cumulative limit. It applies to one percent of the annual appropriation (not total
budgetary resources) for annual TAFSs and to unexpired appropriations for multi-year
TAFSs.
3. The authority to pay obligations against closed TAFSs from one percent of unexpired
TAFSs cannot be used to exceed the original appropriation.
Thus the budget execution process, or life cycle, for an appropriation made in a given fiscal year
can extend well into the future. Management and oversight of obligations is needed at each stage
in the cycle to maintain effective and efficient budget execution.
5.6.3.1.1 Purpose
The purpose of this policy is to require obligations (and any modifications to obligations) entered
into the financial systems to be appropriate, authorized, documented, and processed accurately
and completely. This policy also provides guidelines to ensure that the Coast Guard monitors all
obligations on a continual basis and validates them within established timelines.
This policy also outlines the financial manager’s requirement to certify account balances in
accordance with scheduled timelines. It provides guidelines for the determination of variances
between the official financial system obligation amounts and the source documents to identify
valid obligations that have not yet been recorded. This variance is referred to as the “pipeline
amount.” It is calculated to support the adjustment of undelivered order (UDO) accruals on the
financial statement for Treasury Information Executive Repository (TIER) reporting.
This policy provides guidance for:
1. The recording of all obligations posted to the financial systems;
2. Continual monitoring of all obligations;
3. Quarterly validation of obligation balances for all appropriations, until closed;
4. Timely deobligation of obligation balances;
5. Periodic reviews of the validation of obligation balances, to be conducted every 30 days
for any obligation no longer needed, until the obligation is deobligated; and
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6. Periodic account certifications to determine pipeline adjustment for TIER, to include:
a. Certification of account balances;
b. Verification and validation of obligated fund balances;
c. Maintenance and monitoring of all obligation document files;
d. Reconciliation requirements for account balance certification; and
e. Account certification schedules and responsibilities determined by appropriate
authority.
5.6.3.1.2 Scope
This policy applies to, but is not limited to, all units and financial managers that use any Coast
Guard financial system as the primary means of managing obligations within the Coast Guard’s
financial structure.
5.6.3.2 Authorities
1. Antideficiency Act, as amended. 31 USC 1341-1342, 1349-1351, 1511-1519.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Budget and Accounting Act of 1921, as amended. 31 USC 1101, 1104-1108, 3324.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
3. Budget and Accounting Procedures Act of 1950, as amended. 31 USC 1112, 1531-1536,
3511-3512, 3524.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
4. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
5. Federal Financial Management Improvement Act of 1996 (FFMIA). PL 104-208.
https://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
6. Paperwork Reduction Act, as amended. 44 USC 3501-3520.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title44/html/USCODE-2008-title44.htm
7. 18 USC 286 and 641. Crimes and Criminal Procedures.
https://www.gpo.gov/fdsys/pkg/USCODE-2011-title18/pdf/USCODE-2011-title18.pdf
8. 31 USC 1501. Documentary Evidence Requirement for Government Obligations,
January 2007.
https://www.gpo.gov/fdsys/pkg/USCODE-2010-title31/pdf/USCODE-2010-title31-
subtitleII-chap15-subchapI-sec1501.pdf
9. 31 USC 1552, 1555, and 1557. Appropriation Accounting, as amended.
https://www.gpo.gov/fdsys/pkg/USCODE-2010-title31/pdf/USCODE-2010-title31-
subtitleII-chap15-subchapIV.pdf
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10. 41 USC Chapter 7. Public Contracts -- Office of Federal Procurement Policy.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title41/html/USCODE-2009-title41-
chap7.htm
11. General Services Administration, Federal Acquisition Regulation (FAR), as amended.
https://www.acquisition.gov/?q=browsefar
12. Government Accountability Office, Principles of Federal Appropriations Law.
http://www.gao.gov/legal/red-book/current-edition
13. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov/greenbook/overview
14. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
15. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
16. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
17. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
18. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual.
http://tfm.fiscal.treasury.gov/
19. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
5.6.3.3 Responsibilities
5.6.3.3.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO:
1. Ensures that financial statements accurately reflect obligated balances in accordance with
DHS and other reporting requirements.
2. Establishes and enforces the requirements, principles, standards, systems, procedures, and
practices necessary to comply with statutory and regulatory finance and accounting laws
and regulations.
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3. Provides financial policy for the creation, approval, modification, monitoring, and
validation of obligations and the certification of account balances.
4. Directs the consolidation, standardization, and integration of finance and accounting
requirements, functions, procedures, operations, and systems, and ensures their proper
relationship with other Coast Guard functional areas.
5. Develops and maintains effective internal controls pertaining to the creation, approval,
monitoring, and validation of obligations, and the certification of account balances.
6. Develops and maintains effective internal controls to provide for the accurate entry of
obligating documents and/or expenditure documents into the financial systems; and the
scanning of source documents into the current imaging system, in accordance with the
Paperwork Reduction Act.
5.6.3.3.2 Office of Resource Management (CG-83)
Commandant (CG-83):
1. Serves as the CFO’s primary source for the establishment and implementation of
management policies and procedures pertaining to the validation and review of
obligations.
2. Maintains a proactive funds control system, ensuring that obligation policy and
procurement policy are aligned.
3. Establishes, implements, and tests internal controls related to obligation validations and
automatic deobligations.
4. Implements, reviews, and updates policies and procedures for validating and reviewing
Coast Guard obligations.
5. Establishes system requirements and provides developmental guidance to ensure
compliance with all applicable laws and Federal regulations.
5.6.3.3.3 Appropriation Managers
Appropriation managers:
1. Provide oversight and management at the applicable appropriation level.
2. Consider prior adherence to this policy by allowance managers and ATUs when
determining ATU budget authority.
5.6.3.3.4 Allowance Managers and Administrative Target Units (ATUs)
Allowance managers and ATUs:
1. Ensure that all personnel authorized to obligate funds adhere to this policy.
2. Ensure that the total obligation balance is validated in accordance with this policy.
3. Provide training and support necessary to ensure compliance with this policy.
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5.6.3.3.5 Program Element Managers (PEMs)
PEMs:
1. Ensure accurate entry of valid obligation and/or expenditure documents into the financial
systems.
2. Validate all obligations within their respective PEs in accordance with this policy.
3. Continually monitor all obligations to ensure that the obligated balances recorded in the
financial statements are accurate.
4. Certify each account in accordance with published schedules and applicable guidance.
5.6.3.3.6 Finance Center (FINCEN)
FINCEN personnel:
1. Establish and enforce procedures and practices necessary to comply with statutory and
regulatory financial management and accounting requirements.
2. Execute statutory and regulatory financial reporting requirements and render financial
statements.
5.6.3.3.7 Director of Contracting and Procurement (CG-91)
Commandant (CG-91):
1. Develops, implements, and maintains Coast Guard acquisition policy directives and
procedures including Coast Guard Acquisition Procedures (CGAP) and Head of
Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases Using
Simplified Acquisition Procedures, October 2016.
2. Develops, implements, oversees, and evaluates Coast Guard acquisition, contracting and
procurement policy, directives, and procedures consistent with the policies outlined in
Major Systems Acquisition Manual (MSAM), COMDTINST M5000.10 (series).
3. Coordinates alignment of procurement policies with the obligation policies.
4. Oversees the conduct of studies, pilots, and other analyses to improve business practices,
internal controls, and effectiveness in Coast Guard contracting activities.
5.6.3.3.8 Chief of the Contracting Office (COCO)
The COCO ensures that KOs coordinate with and assist funds managers with the monitoring and
validation of contract obligations.
5.6.3.3.9 Contracting Officers (KOs), Purchasing Agents, Cardholders, or Other
Obligating Authorities
These individuals:
1. Obligate funds within their respective procurement authority.
2. Ensure that obligations conform to applicable statutory and regulatory requirements.
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3. Ensure that adjustments to obligations conform to applicable statutory and regulatory
requirements.
4. Ensure that obligations are recorded in the Coast Guard financial system.
5. Ensure proper validation, execution, recording, and receipt of goods and services, and
the proper liquidation of obligations.
6. Monitor and validate obligations as directed by the funds manager in accordance with
this policy.
5.6.3.3.10 Management Review Officials (MROs)
MROs:
1. Conduct independent verification of compliance with established policy and procedures,
including any applicable interim policy outlined in ALCGFINANCE messages.
2. Ensure PEM compliance with the responsibilities as set forth in this policy (see
Subsection 5.6.3.3.5 (Program Element Managers (PEMs)) in this Manual).
5.6.3.3.11 Reconcilers
Reconcilers monitor obligations within their respective PEs in accordance with this policy.
5.6.3.3.12 Assistant Commandant for Engineering and Logistics (CG-4)
Commandant (CG-4) ensures that subordinate units (Aviation Logistics Center, Surface Forces
Logistics Center, and Coast Guard Yard) establish and enforce the procedures and practices
necessary to comply with statutory and regulatory finance and accounting requirements.
5.6.3.4 Policy
5.6.3.4.1 General Requirements for the Recording of Obligations
1. Only individuals who have proper written delegation of authority may incur obligations
on behalf of the Coast Guard. Unauthorized individuals who incur obligations may be
subject to personal liability.
2. The requirements for an obligation are stated in 31 USC 1501. For the Coast Guard, an
obligation is typically a binding agreement that will result in an outlay (or multiple
outlays), immediately or in the future. All Coast Guard personnel committing and
obligating funds shall ensure that all approvals and authorizations align with their
corresponding orders or contracts for goods or services. Funds must be available within
the limits of appropriations, apportionments, allowances, and other subdivisions of
budget authority. The availability of funds must be documented and signed. (Electronic
documents must contain an approved electronic signature.) The documentation of an
obligation will consist of a complete record of the transaction, and will be in accordance
with all Coast Guard policies and procedures before the obligation may be recorded.
3. All obligations shall be recorded promptly and accurately when incurred.
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4. An obligation must satisfy a bona fide need during the period for which the appropriation
is available.
5. All obligations shall be entered into the Coast Guard financial system prior to any
disbursement being made against the obligation.
Note: For prize competitions, an obligation must be recorded at the time the competition is
announced in accordance with 31 USC 1501(a)
5.6.3.4.2 General Requirements for the Monitoring of Obligations
All obligations shall be continually monitored to ensure that obligated balances are accurately
reflected in the Coast Guard financial statements.
5.6.3.4.3 General Requirements for the Validation of Obligations
1. All obligations shall be validated and verified quarterly for all appropriations.
2. Funds shall be deobligated when it is determined that they are no longer needed for the
purposes for which they were obligated.
5.6.3.4.4 General Requirements for Periodic Certification of Valid Obligations
The certifications of obligations in Coast Guard accounts are conducted in order to maintain
proactive funds control and to act as a tool to mitigate errors and possible misstatement of
obligation balances. These certifications support (1) the monthly submission of the Report on
Budget Execution and Budgetary Resources, Form SF 133; (2) the determination of quarterly
obligation rate requirements; and (3) the annual submission of the Year-end Closing Statement,
Form FMS 2108.
It is the Coast Guard’s responsibility to review and provide certification that all obligations are
authorized and have been executed in accordance with this policy and other policies, rules and
regulations.
5.6.3.4.5 Other Requirements
All units and financial managers that use any Coast Guard financial system as the primary means
of managing obligations shall ensure that internal controls are in place and that proper
procedures are followed.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Section 5.6, Procedure No. 5.6.2, Step 5.4 (Internal
Management Controls) for guidelines.
5.6.4 Reporting Violations of Informal Subdivisions of Budget Authority
When obligations incurred exceed the annual allowances, targets, and/or program elements, and
local actions to reduce obligations are insufficient, the financial manager of the administrative
target unit is responsible for prompt reporting to the allowance and appropriation managers. The
unit financial manager shall prepare the report within 10 working days after it has been
established that this condition exists.
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The report shall be based on the documents and accounting records on file at the ATU and shall
include:
1. A description of the administrative operating allowances, targets, program elements or
project target;
2. Related details and the amount involved;
3. An explanation of all pertinent facts concerning the excess and the principal reason or
cause; and
4. A statement on the adequacy of the control system or recommendations for changing the
control system.
Note: Temporarily exceeding administrative operating allowances, targets, program elements or
project targets, while necessitating disciplinary action if the circumstances warrant, may not
constitute a violation of the Antideficiency Act. See Section 3.5, Antideficiency Act, for
information about the Act and the reporting of statutory violations.
5.6.5 Internal Controls for Budgetary Resource Management
The Coast Guard is responsible for establishing and maintaining internal controls to achieve the
objectives of effective and efficient operations, reliable financial reporting, and compliance with
applicable laws and regulations.
Commandant (CG-83) provides assurance on the effectiveness of internal controls over BRM in
support of the Commandant’s Annual Assurance Statement.
5.6.5.1 Purpose
This Subsection establishes the internal control framework for BRM, providing reasonable
assurance that the transactions within this financial process meet the general assertions outlined
below:
Existence or occurrence: Recorded transactions and events occurred during the given period,
are properly classified, and pertain to the Coast Guard’s assets, liabilities, and net position exist
at a given date.
Completeness: All transactions and events that should have been recorded are recorded in the
proper period. All assets, liabilities, and net position that should have been recorded have been
recorded in the proper period and properly included in the financial statements.
Rights and obligations: The Coast Guard holds or controls the rights to its assets; and its
liabilities represent Coast Guard’s valid obligations at a given date.
Accuracy/valuation or allocation: Amounts and other data relating to recorded transactions and
events have been recorded appropriately. Assets, liabilities, and net position are included in the
financial statements at appropriate amounts, and any resulting valuation or allocation
adjustments are properly recorded. Financial and other information is disclosed fairly and at
appropriate amounts.
Presentation and disclosure: The financial and other information in the financial statements is
appropriately presented and described and disclosures are clearly expressed. All disclosures that
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should have been included in the financial statements have been included. Disclosed events and
transactions have occurred and pertain to the Coast Guard.
Key internal controls of BRM include:
1. Are properly recorded, processed, and summarized in conformity with generally accepted
accounting principles (GAAP) to permit the preparation of the:
a. Statement of Budgetary Resources (SBR);
b. Year-end Closing Statement, Form FMS 2108;
c. Apportionment and Reapportionment Schedule, Form SF 132; and
d. Report on Budget Execution and Budgetary Resources, Form SF 133.
2. Are executed in accordance with:
a. Laws governing the use of budget authority, and other laws and regulations that could
have a direct and material effect on the SBR; and
b. Any other laws, regulations, and Governmentwide policies identified in OMB
guidance.
This Subsection also prescribes policies and areas of responsibility over the processing of BRM
transactions. The policies and responsibilities are designed to provide reasonable assurance
regarding the reliability of financial reporting and budget execution that is compliant with laws
and regulations. Reliability of financial reporting means that Commandant (CG-8) can
reasonably make the following assertions on the Statement of Budgetary Resources:
1. Existence and Occurrence – All reported transactions actually occurred during the
reporting period, and all assets and liabilities exist as of the reporting date. For example:
a. Recorded new budget authority was made available for obligation and was recorded
in the proper accounts.
b. Recorded unobligated balances from prior periods remain available for obligation.
c. Recorded obligations represent valid orders, contracts, or other events that will
require future payment.
d. Obligated balances represent amounts for orders placed, contracts awarded, and
similar obligating transactions for which goods and services have not been paid.
e. Appropriate goods and services were properly receipted.
2. Completeness – All transactions that shall be reported have been included, and no
unauthorized transactions or balances are included. For example:
a. All new budget authority that was made available for obligation was recorded in the
proper accounts for appropriation, apportionment, and allotment.
b. All commitments, obligations, and receiving reports are properly recorded.
c. All available and authorized spending authority is recorded.
d. All payments made are recorded in the proper accounts and for the correct year.
3. Compliance – Recorded transactions are in compliance with applicable laws and
regulations.
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5.6.5.2 Responsibilities
5.6.5.2.1 Office of Resource Management (CG-83)
Commandant (CG-83), as the key process owner for BRM, is responsible for implementing,
maintaining, executing, and monitoring internal controls for each of the BRM subprocesses:
budget authority, funds distribution, funds control, and fund status. Commandant (CG-83):
1. Implements, maintains, and monitors the execution of this internal control policy and
maintains current and accurate process documentation.
2. Reviews the results of the assessment of the subprocesses and provides an aggregate
assurance on the effectiveness of internal controls in support of the Commandant’s
Annual Assurance Statement and the annual management representation letter.
3. Provides supporting documentation during the annual financial statement audit to support
the assertions of completeness and existence of material line items on the Report on
Budget Execution and Budgetary Resources, Form SF 133, and also on the Year-end
Closing Statement, Form FMS 2108.
4. Coordinates, with Commandant (CG-85), the annual assessment of internal controls in
accordance with Coast Guard policy (plan, document, test, evaluate, and report).
5. Monitors and reports to Commandant (CG-8) and the Senior Assessment Team on the
effectiveness of internal controls and progress with remediation using the Mission Action
Plan and report results.
6. Establishes and maintains an effective internal control process/system to include:
a. Complete and compliant policies and procedures;
b. Accurate process documentation; and
c. The written assignment of subprocess owners.
7. Implements improvements to the internal control policy, procedures, and process, as
needed.
5.6.5.2.2 Subprocess Owners
Subprocess owners:
1. Implement, maintain, and monitor the execution of this internal control policy.
2. Plan, conduct testing, evaluate, and report the results of the annual internal control
assessment for their respective subprocess in order to determine the effectiveness of
controls, support assertions of its financial reporting, and ensure compliance with laws
and regulations.
3. Implement and report on remediation activities.
4. Regularly monitor control activities and take corrective action as necessary.
5. Report the results of monitoring activities, assessments, and completed corrective actions.
6. Identify personnel training needed to effectively operate the subprocess, and either
prepare or obtain and deliver appropriate training to process personnel.
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5.6.5.2.3 Coast Guard Personnel
Coast Guard personnel:
1. Execute policies and procedures that initiate, review, approve, and record transactions
within BRM policies.
2. Maintain proficiency in knowledge and the skills to implement this policy.
3. Report broken or ineffective control activities.
5.6.5.2.4 Office of Internal Controls (CG-85)
Commandant (CG-85):
1. Schedules and coordinates the annual assessment process.
2. Provides detailed instruction and guidance to effectively conduct the annual assessment
of internal controls.
5.6.5.2.5 Office of Financial Policy, Reporting, and Property (CG-84) and FINCEN
Commandant (CG-84) and FINCEN:
1. Coordinate with Commandant (CG-83) the development and execution of transaction-
level controls.
2. Prepare and promulgate budget resource management reports.
5.6.5.2.6 Assistant Commandant for Command, Control, Communications, Computers
and Information Technology (CG-6)
Commandant (CG-6)/Chief Information Officer (CIO):
1. Implements and maintains the application controls for BRM processes.
2. Maintains application integrity.
3. Implements and maintains general computer controls, including access controls, as
necessary to comply with this policy.
4. Monitors and assesses the effectiveness of application or general computer controls over
budgetary resources management processes, and reports these results to Commandant
(CG-83).
5.6.5.3 Policy
1. Commandant (CG-83) shall establish a system of internal controls that provide
reasonable assurance that the following objectives are achieved:
a. Field commanders and program managers have timely and accurate information
regarding available funds to accomplish Coast Guard missions.
b. Budgetary resources, status of funds, and outlays are accurately and reliably reported.
c. Coast Guard budget execution fully complies with laws and regulations.
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d. Coast Guard financial managers are organized, trained, and properly directed and
supervised to accomplish these objectives for budget execution.
2. Commandant (CG-83) shall establish and maintain the following controls to meet the
above objectives:
a. A strong control environment;
b. Periodic risk assessments;
c. Focused control activities;
d. Regular monitoring and clear communication;
e. Frequent reporting of both budgetary resources information and information
regarding the effectiveness of internal controls; and
f. Maintain audit readiness materials related to annual CFO audit.
3. In establishing a strong control environment, Commandant (CG-83) shall establish and
maintain an organizational structure while providing organizational support for effective
internal control that:
a. Clearly defines areas of authority and responsibility, delegates the authority and
responsibility, and establishes a reporting hierarchy.
b. Demonstrates a commitment to excellence for hiring, training, evaluating, advancing,
and disciplining personnel; and upholds the need for personnel to possess and
maintain the proper knowledge and skills to perform their assigned duties.
c. Sets and maintains values and standards for ethical behavior that permeate the
organization and aid the successful implementation of internal control systems.
4. Commandant (CG-83) shall also closely coordinate with FINCEN and Commandant
(CG-84) to clearly define roles and responsibilities for transactions and processes that
overlap organizational boundaries. In order to provide all members of the organization
with timely information, Commandant (CG-83) shall provide written procedural updates
and appropriate instruction when a process change is required.
5. Early in each fiscal year, Commandant (CG-83) shall perform an annual risk assessment
that:
a. Identifies material accounts and confirms the establishment of key controls.
Commandant (CG-83) shall use materiality (as determined by Commandants (CG-85)
and (CG-83) staff qualitative evaluations) to identify the budgetary accounts that have
a material effect on the Statement of Budgetary Resources (SBR), and shall establish
and maintain reasonable controls for these accounts. This assessment will confirm
those processes, transactions, and controls which will be most important to financial
reporting during the next year. Also, this assessment will support Commandant
(CG-83) in designating important controls as key controls for annual budgetary
resources internal control assessment.
b. Identifies high-risk compliance areas and establishes control objectives.
Commandant (CG-83) shall develop a prioritized list of compliance risks based upon
a review of annual appropriation acts and other laws, OMB circulars and other
guidance, DHS policy, procedures and directives, the current operational and budget
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environment, and previous findings (e.g., auditor-identified, GAO audit, internal
management review). This assessment shall define high, medium, and low-risk areas.
For each high and medium risk area, it shall provide control objectives, means and
measurements for monitoring, and thresholds for reporting, along with a designated
individual to monitor and report risks. Commandant (CG-83) shall use this
assessment to support the administrative system of funds control and other
Commandant (CG-83) monitoring processes.
6. Commandant (CG-83) shall establish and maintain control activities for each subprocess
and for appropriate transaction events in order to direct accurate, reliable, and compliant
budget execution. Among these control activities, Commandant (CG-83) shall:
a. Maintain internal control policies and procedures for managing and controlling the
use of appropriated funds and other forms of budget authority.
b. Establish and maintain an organizational structure that supports the proper
segregation of duties (separate personnel with authority to authorize a budgetary
transaction, process or record the transaction, and review and approve the
transaction).
c. Establish appropriate supervision of reviews and approvals for important transactions.
d. Update all process documentation, including flowcharts, and perform an evaluation of
the effectiveness of the controls using the control evaluation matrix.
e. Maintain and publish a roster of individuals who are authorized to execute
transactions in accordance with laws, regulations, and management policy (e.g., the
Unit Approved Plan (UAP) for FPD – see Subsection 9.5.22.3.3 (Unit Approved Plan
(UAP)/Separation of Duties) in this Manual).
f. Retain documentation supporting budgetary authority, obligations, and outlays, and
control access to the documentation.
g. Establish IT application controls requiring that all transactions be properly authorized
before processing, that they be processed accurately and completely, and that the data
processed is valid and complete.
h. Maintain audit readiness Documentation Support Matrix and UNIT/COCO POC List
for additions, deletions and modifications as needed. These documents are used
during the audit for contacting and requesting support documentation and providing
the guidance on what support documentation is valid to provide to the auditors.
7. Monitoring is an essential part of the budgetary resources internal control framework. In
order to support the annual FMFIA assurance statement for budgetary resources to the
Commandant, the assertions contained in the annual management representation letter,
and the assertions regarding the SBR during the annual financial reporting audit,
Commandant (CG-83) shall:
a. Conduct an annual assessment of key controls.
b. In planning this assessment, Commandant (CG-83) shall:
1) Follow Coast Guard policy and coordinate the details and timing of this
evaluation with Commandant (CG-85);
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2) Monitor the progress of the assessment, and
3) Report results of the assessment to Commandant (CG-8) and the Senior
Assessment Team.
8. As a critical part of any control framework, Commandant (CG-83) shall promote the
regular development, distribution, and use of reports and information regarding:
a. Budget execution and BRM process performance;
b. The effectiveness of internal controls; and
c. Compliance with laws and regulations.
5.6.6 Reimbursable Programs (Coast Guard as Seller)
This Subsection establishes the policy relating to intragovernmental and other reimbursable
programs covering goods and services provided by the Coast Guard to other DHS components,
other Federal agencies, and non-Federal entities except for services provided to the public. This
Subsection does not apply to instances where the Coast Guard procures goods or services from
other Federal agencies. Such situations involve Inter/intra Agency Acquisitions or Reimbursable
Work and will be processed through procurement channels accomplished by warranted
contracting officers or designated obligation officials.
1. The Economy Act (31 USC 1535) provides the basic authority for an agency or major
organizational unit within an agency to place an order with a major organizational unit
within the same agency or another agency for goods or services if (1) amounts are
available, (2) it is in the best interest of the government, (3) the agency to fill the order is
able to provide or get by contract the ordered goods and services, and (4) the agency
determines goods or services cannot be provided by contract as conveniently or cheaply
by commercial enterprise. Lacking a more specific statutory authority, the Economy Act
will govern Interagency transactions. When the Coast Guard procures goods and services
through another Federal agency the transaction shall be processed using the ordering
procedures set forth in Subpart 17.5 of the Federal Acquisition Regulations (FAR), Coast
Guard Acquisition Procedures (CGAP), or Revised Interagency Reimbursable Work
(Financial Transactions) Agreements (IRWA).
2. 14 USC 701 states, “The Coast Guard may, when so requested by proper authority,
utilize its personnel and facilities … to assist any Federal agency, State, Territory,
possession, or political subdivision thereof, or the District of Columbia, to perform any
activity for which such personnel and facilities are especially qualified. The
Commandant may prescribe conditions, including reimbursement, under which personnel
and facilities may be provided under this Subsection.”
3. Generally, when the assistance rendered falls within the specific functional
responsibilities of the Coast Guard, the services are performed without charge.
Reimbursable cooperative agreements under 14 USC 701 shall be in writing, in a way
and form, and for a purpose authorized by law. Amounts received from the assisted
agency, government, or political subdivision shall be credited to the appropriation which
bore the expense of the assistance.
Note: The authority only applies to cooperation with other governmental agencies, State or
Federal, and not to private organizations. Reimbursable agreements for services to foreign
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governments are typically with the State Department under that Department’s unique statutory
authority. They are executed by authorized representatives of the Department of State and
coordinated with the Coast Guard International Affairs Staff.
5.6.6.1 Reimbursable Agreements – Policies
Program managers shall establish reimbursable programs on the basis of written agreements.
Reimbursable agreements shall be prepared, approved, and accepted by both parties prior to
providing goods or services in accordance with applicable standards. Such written agreements
are also required for all reimbursable activities performed for other DHS operating agencies;
however, reimbursable activities are not applicable to general working agreements or orders
placed with the DHS Working Capital Fund.
Reimbursable agreements shall meet the following conditions:
1. The nature of the reimbursable work shall be for authorized purposes, and consistent with
the purpose and policies of the Coast Guard; and
2. Program managers shall negotiate reimbursable agreements within the framework of the
Coast Guard’s appropriations structure.
5.6.6.1.1 Finance Services
Program managers will finance services rendered and goods furnished from reimbursable
appropriations, allowances, program elements, or targets subject to reimbursement from both
Federal and non-Federal activities, unless circumstances warrant financing through advance of
funds. To the extent authorized by law, they will apply the same method of financing to
non-Federal activities; however, program managers shall require advance payments when there
is any doubt concerning the collectability of the reimbursable charges.
5.6.6.1.2 Reimbursable Work/Intrinsic Value
The nature of the reimbursable work must have intrinsic value to the Coast Guard at least
equivalent to that which Coast Guard appropriations would otherwise be used. In this respect, it
should be kept in mind that diversion for reimbursable work may deny the use of those personnel
or resources for Coast Guard work.
5.6.6.1.3 Recovery of Costs
The Economy Act anticipates the recovery of actual costs incurred in furnishing goods or
services under a reimbursable agreement. Generally, it is Coast Guard policy to recover actual
costs under all reimbursable agreements, unless it is otherwise reasonable to waive certain costs
(See Subsection 5.6.6.1.5 (Waiver of Costs) below).
5.6.6.1.4 Identification of Costs
Program managers shall identify costs wherever possible through the accounting system. Where
the accounting system is not readily adaptable to identifying costs, program managers shall
establish a simplified procedure to identify costs.
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5.6.6.1.5 Waiver of Costs
Program managers shall not waive the costs of providing goods and services, except as
authorized by law. Only officials authorized to approve reimbursable agreements have the
authority to waive costs.
5.6.6.2 Preparation and Coordination of Agreements
All Coast Guard reimbursable agreements shall be guided by DHS and Coast Guard policies and
procedures.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Section 5.6, Procedure No. 5.6.8, Step 5.5
(Preparation and Coordination of Agreements) for guidelines related to the draft and clearance of
agreements.
5.6.6.3 Reimbursement to the O&S Appropriation
The reimbursable programs which are carried out under the O&S appropriation are generally
those concerned with the operation or maintenance of facilities which are of benefit to another
agency. Maintenance of Navy-owned equipment on Coast Guard units is one example.
5.6.6.3.1 Sponsoring Agencies
Prior to distribution of the draft FMOP, the sponsoring agency for each reimbursable account
develops reimbursable programs through conferences, individual discussions, and
correspondence, in order to fix decisions, agreements, and estimates of costs. Finally, the
sponsoring agency forwards an IPR or the equivalent to the Coast Guard. The Coast Guard must
return the IPR showing signed acceptance under the conditions and amount stated. Signature
authority will comply with the provisions of Coast Guard Acquisition Procedures (CGAP),
Subchapter 3017.501.
The process of developing, inaugurating, and changing these programs requires extensive staff
coordination to ensure that cognizant offices are kept aware of the negotiating process. Toward
this end, responsibilities at Headquarters for negotiating and managing the several reimbursable
programs are assigned as described in the following Subsections.
5.6.6.3.1.1 Established Operating Programs
This Subsection applies to established operating programs, carried out from year to year, which
involve AFC managers in different offices. The program manager will assume responsibility for
drafting correspondence external to the Coast Guard via Commandant (CG-8).
5.6.6.3.1.2 Operating/Support Program Managers
Operating/support program managers responsible for the reimbursable programs shall identify
and develop base-level resources and provide guidance to the ATUs. The ATUs shall in turn
submit detailed funding requests for the reimbursable field programs per Civil Engineering
Manual, COMDTINST M11000.11 (series).
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5.6.6.3.1.3 The Budget Office
Commandant (CG-83) shall solicit both quarterly and annual AFC distributions for each
reimbursable account prior to distribution of the FMOP draft in the spring, and again prior to the
approval of the final FMOP. Commandant (CG-83) will publish the specific amounts in the
FMOP.
5.6.6.3.1.4 Program Managers of Established Operating Programs
Program managers of established operating programs that are carried out from year to year and
that involve only one AFC manager, such as medical supplies and maintenance of Navy-owned
electronic equipment, have the responsibility for drafting correspondence external to the Coast
Guard relative to funds or other requirements.
5.6.6.3.1.5 Interdepartmental Procurement Requests
The office having primary responsibility for one-time programs requiring engineering evaluation
(e.g., joint oceanographic surveys) will assume responsibility for drafting correspondence
external to the Coast Guard relative to funds or other requirements.
Programs receiving IPR advanced billing reimbursable agreements from other agencies, which
indicate the work requested of the Coast Guard, as a servicing agency, and funds available for
such work, should transmit them to Commandant (CG-83). Commandant (CG-83) will verify
the request against previous correspondence, coordinate with other offices concerned to adjust
the financial plan, accept the work order for the Coast Guard, and furnish copies of
correspondence with the signed IPR agreement to permit the rendering of proper bills to the
requesting agency. It is the responsibility of the Headquarters program or Headquarters unit to
return copies of the accepted agreements to the external parties and to initiate any CIFPs
necessary to execute the agreement.
5.6.6.3.2 Cost Estimates
When cost estimates have been agreed on, they are consolidated by Commandant (CG-83), and
the appropriation manager adds an estimate for anticipated yet unconfirmed reimbursements.
The total estimated reimbursement to O&S is entered in the OMB Stage budget as a separate
item from the direct appropriation requested from Congress. Commandant (CG-83) revises this
estimate at the Congressional budget stage and in preparation of the FMOP. Note that the
estimated reimbursable program shown in the budget document does not have to be justified in
that document since it is not in itself a request for funds. The reimbursable funds are justified in
the sponsoring agencies’ budgets.
5.6.6.3.3 Budget Office Reimbursement
Commandant (CG-83) distributes the O&S reimbursements to the O&S AFCs, which will incur
expenses in carrying out the reimbursable programs. Program managers may submit a Change in
Financial Plan (CIFP) or Funds Transfer Authority (FTA) reflecting an AFC distribution when
they establish a new reimbursable program. The apportionment request submitted to OMB by
Commandant (CG-83) does not specifically itemize or identify the reimbursable portion of the
quarterly apportionments. A copy of the signed, accepted reimbursable agreement must be on
file in Commandant (CG-83) and be referenced on any related CIFP submitted for approval.
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5.6.6.3.4 Reimbursement to AFC-80
Obligation authority for reimbursable work for other Government agencies and non-Government
entities is requested and received from OMB during the apportionment process. Once approved
by OMB, these funds are set up in AFC-80 in the amount of the anticipated annual
reimbursement. Unlike other AFCs, AFC-80 does not consist of direct appropriated funds.
Rather, it contains the value of anticipated or actual reimbursement for work authorized to be
done for others on a reimbursable basis.
5.6.6.4 Reimbursements to Other Appropriations
The reimbursable programs under the PC&I appropriation usually involve the construction of
facilities or other assets for the benefit of other agencies and the application of proceeds from the
sale of personal property to acquire its replacement.
R&D reimbursements usually represent cooperative research programs involving Government or
nonprofit civil agencies.
5.6.6.4.1 PC&I Reimbursements
Commandant (CG-83) develops estimates for reimbursable programs under the PC&I
appropriation. These estimates are included in the OMB Stage of the budget as an item separate
from the direct appropriation request. Commandant (CG-83) revises these estimates as required
at subsequent budget stages.
5.6.6.4.2 Research and Development Staff
The research and development staff, Commandant (CG-926) for R&D and Commandant
(CG-83) for PC&I, maintain the reimbursable programs as separate projects. Accordingly, the
office developing a reimbursable agreement under these appropriations prepares a financial plan
and quarterly obligation schedule for each reimbursable project. From these schedules,
Commandant (CG-83) prepares the apportionment request for submission to OMB. Both
directly appropriated funds and reimbursable funds are listed on the apportionment request as
separate line items.
5.6.6.4.3 Establishing Accounts
Commandant (CG-83) establishes an account titled “Anticipated Reimbursements” for the total
amount of reimbursement expected throughout the year for each appropriation. Commandant
(CG-83) provides project account numbers for each reimbursable agreement. To establish
separate project accounts from which obligations may be made, Commandant (CG-83) prepares
a Change in Financial Plan (CIFP), or FTA showing an amount to be decreased in the
“Anticipated Reimbursements” account and increased under the reimbursable project account.
Commandant (CG-83) must approve all reimbursable CIFPs. A copy of the signed, accepted
reimbursable agreement must be uploaded to the CIFP and/or FTA.
5.6.6.5 Financing and Billing Arrangements
In order to assure that the agreement is in sufficient detail for the accounting office to perform
the billing, the agreement shall:
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1. Identify the accounting office serving the performing activity as the billing office;
2. Contain a “BILL TO” address in sufficient detail to allow the accounting office to send
bills for collection;
3. Indicate the specific goods or services to be furnished;
4. Identify the charges, the method of computation, the billing period, and the estimated
cost;
5. Establish beginning and ending dates;
6. Provide for an advance of funds;
7. Identify the documentation required by the user agency as a condition of payment;
8. Establish the activity responsible for the accomplishment of the project; and
9. In the event multiple items are to be furnished, provide for separate identification of each
item.
5.6.6.5.1 In Doubt of Paying Ability
Whenever the servicing activity intends to fund a program on a reimbursable basis and doubts
the paying ability of the requesting activity (non-Federal organization), the servicing activity will
indicate on the agreement that an advance of funds is necessary for the entire cost of the project.
An advance installment basis of payments may also be satisfactory, depending on the
circumstances.
5.6.6.5.2 Agreements between DHS and Operating Elements
Agreements between DHS and operating elements are normally done on a reimbursable basis.
Activities entering into agreements are encouraged to obtain assistance from their accounting and
budget offices to establish a mutually acceptable and simple arrangement.
5.6.6.5.3 Servicing Activity
1. The servicing activity shall furnish its accounting office a listing of all organizations
authorized to provide goods and services under the specific agreement. Servicing
activities must list the applicable agreement number and the name and telephone number
of the project officer of the servicing activity.
2. Lead and collateral organizations will prepare and furnish cost estimates to the
appropriate accounting office. These estimates shall include but are not limited to lists of
such items as number of work hours, kinds of contractual services, purchases of
equipment, and identification of each element of overhead.
3. During the course of the agreement, the servicing activity shall review all documentation
developed by it or furnished to it by collateral organizations prior to submission to the
accounting office, to ensure that reference to the agreement number is included.
4. Within 10 workdays after completion of work, the servicing activity shall furnish
notification in writing via close out memo and/or agreement if applicable, stating that the
terms of the agreement have been satisfied. If feasible, this notification shall be furnished
concurrently with the submission of the final documentation.
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5. The accounting office of the servicing activity shall develop and assign numbers to the
agreements. Assignment of numbers shall be performed after the agreement is signed
and prior to the distribution of the agreements. A consecutive numbering system is
required.
6. The accounting office of the servicing activity will expedite final billings (including any
adjustments necessary to conform to the terms of the agreement) and collections. It will
be the responsibility of the servicing activity to notify its accounting office and furnish
documentation immediately upon completion of work.
5.6.6.6 Distribution of Agreements
In addition to local distribution of agreements, the program manager will forward executed
copies to Commandant (CG-83) and to FINCEN (OGQ).
5.6.6.7 Revisions and Amendments
Requesting agencies will prepare written amendments to agreements if there are any changes in
the goods and services provided. The nature of the changes should be explained in detail.
Program managers will prepare CIFPs to reflect any changes in the amount of the agreement.
The agreement shall specify a date of expiration, or indicate that it remains effective indefinitely.
Program managers will review reimbursable MOAs/MOUs annually for accuracy. In addition,
program managers shall renew MOAs and MOUs every five years and renegotiate, as required,
with the partner agency.
5.6.6.8 FEMA Mission Assignments
5.6.6.8.1 Overview
Following a Presidential declaration of disaster or emergency, the Coast Guard may operate
under the Stafford Act and its implementing framework, the National Response Framework
(NRF). The law provides for the Federal Emergency Management Agency (FEMA) to
coordinate employment of Federal agencies and resources in support of the disaster relief efforts
of State and local governments.
The NRF groups the types of Federal assistance most likely to be needed under 15 Emergency
Support Functions (ESFs). Under the NRF, a primary Federal agency may require the assistance
of a support Federal agency to accomplish the assigned Mission Assignment (MA). If a primary
Federal agency determines that the services of a support Federal agency are needed to complete
the MA, the primary Federal agency may subtask another Federal agency to perform the
requirement necessary to complete the MA. For example, the Environmental Protection Agency
(EPA) and the Coast Guard are both assigned as primary agencies for ESF-10, Oil and
Hazardous Materials Response. While FEMA may assign an ESF-10 MA directly to the Coast
Guard if both agencies are involved, the normal practice is for FEMA to assign the ESF-10 MA
to EPA, which then divides the MA with the Coast Guard so that Coast Guard units can assist
with disaster response involving hazardous materials in the marine environment.
It is possible for a Coast Guard unit to be simultaneously supporting several ESFs, as when an air
station launches a helicopter to locate propane tanks adrift in a river (ESF-10) and launches a
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second helicopter to provide logistics and resource support (ESF-7) for disaster relief personnel,
and then diverts the helicopter to perform inland search and rescue under ESF-9.
The Stafford Act provides that the Director of FEMA may issue MAs to any Federal agency,
with or without reimbursement, to utilize its authorities and the resources granted to it under
Federal law in support of disaster relief efforts. The MA is a directive or work order issued by
FEMA directing an agency to complete a specified task and providing a specified amount of
reimbursable funding for that purpose. MAs can be issued by FEMA’s National Resource
Coordination Center (NRCC), one of its Regional Resource Coordination Centers (RRCC), or a
joint field office (JFO) established after a Presidential Disaster Declaration has been issued. The
Coast Guard may receive tasking under several different ESFs for multiple MAs in each State
affected by the natural disaster.
Note: Section 304 of the Stafford Act (42 USC 5147) requires reimbursement for supplies and
services furnished to be deposited to the credit of the appropriation or appropriations currently
available when it is received. Reimbursements may not be received until a follow-on fiscal year.
Lessons learned from Hurricanes Katrina and Rita emphasizes the importance of avoiding
account deficiencies during disasters that occur near the end of a fiscal year. Reimbursements
may not be processed or received until the next fiscal year. A legislative change proposal has
been submitted to address this issue.
In execution of an MA, the Coast Guard must:
1. Accept the MA for operational purposes (the Coast Guard will do the mission).
2. Accept the MA for financial purposes. This involves:
a. Monitoring expenditures to avoid deficiencies;
b. Monitoring costs under non-reimbursable MAs to support supplemental requests;
c. Establishing reimbursable accounts whenever possible;
d. Assigning funds to those units performing the mission(s);
e. Assigning cost documentation responsibilities to those units performing the
mission(s);
f. Procuring goods and services to complete assigned MAs;
g. Actively monitoring actual expenses/burn rates against MA funding provided and
advising FEMA (NRCC, RRCC, JFO) if additional funds will be required to complete
the MA;
h. Making all payments to Government or private vendors for all costs; and
i. Gathering information, for justification purposes, if the costs of the MA will exceed
existing enabling authority (scope) or remaining available fiscal year budget authority
for normal operations.
3. Recover Coast Guard costs incurred under the MA from FEMA or the ESF Lead Agency
under the regulations in 44 CFR 206.8 and rules and conditions established in the
Financial Annex of the National Response Framework (NRF).
Because of the large number of agencies involved in disaster relief operations, requests for Coast
Guard assistance may come from a wide variety of sources.
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FEMA encourages all ESF agencies to develop Pre-Scripted Mission Assignments (PSMAs) to
expedite the MA acceptance process. PSMAs provide a template “statement of work” language
and estimated costs for work typically performed by a Federal agency. The PSMA identifies
services that the Coast Guard may perform; however, a PSMA does not obligate the Coast Guard
to complete the MA. The Office of Environmental Response Policy (CG-MER) develops the
PSMAs based on input from the National Pollution Funds Center (NPFC), Headquarters
National Preparedness Integration Team, logistics and service center commands, supporting
units, and areas.
5.6.6.8.1.1 Purpose
This Subsection specifies the policy for reimbursement to the Coast Guard for disaster relief
services provided pursuant to tasking by FEMA under the Stafford Act. Two major processes
are outlined:
1. Distribution of the reimbursable funds authorized as a result of the MA process; and
2. Submitting a reimbursement request.
The flow of each process is summarized below.
1. Reimbursable Budget Authority/Funds Distribution Process
a. Asset Operational Costs
FEMA → Field Unit → ATU/NPFC/Commandant (CG-831) → FINCEN.
b. Other Costs Incurred
Field Unit → ATU/NPFC → Commandant (CG-831) → FINCEN → FEMA.
2. Reimbursable Request Process
Field Unit → ATU/NPFC → FINCEN/Commandant (CG-831) → FEMA.
5.6.6.8.1.2 Scope
This Subsection applies to all Coast Guard units of activities that receive and execute FEMA
Mission Assignments.
5.6.6.8.2 Authorities
1. Robert T. Stafford Disaster Relief and Emergency Assistance Act, 1974, PL 93-288, as
amended. 42 USC 5121-5207.
http://www.fema.gov/robert-t-stafford-disaster-relief-and-emergency-assistance-act-
public-law-93-288-amended
2. 42 USC 5147. [Reimbursement of Federal agencies (Permissive) {Sec. 304}]
Federal agencies may be reimbursed for expenditures under this act from funds
appropriated for the purposes of this act. Any funds received by Federal agencies as
reimbursement for services or supplies furnished under the authority of this act shall be
deposited to the credit of the appropriation or appropriations currently available for such
services or supplies.
https://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-
chap68-subchapIII-sec5147.pdf
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3. 42 USC 5170a. [General Federal Assistance (Permissive reimbursement) {Sec. 402}]
In any major disaster, the President may direct any Federal agency, with or without
reimbursement, to utilize its authorities and the resources granted to it under Federal law
(including personnel, equipment, supplies, facilities, and managerial, technical, and
advisory services) in support of State and local assistance efforts.
https://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/pdf/USCODE-2010-title42-
chap68-subchapIV-sec5170a.pdf
4. Homeland Security Act of 2002. PL 107-296, 116 Stat. 2135.
https://www.gpo.gov/fdsys/pkg/PLAW-107publ296/pdf/PLAW-107publ296.pdf
5. Post-Katrina Emergency Management Reform Act of 2006, enacted as Title VI of the
DHS Appropriations Act, 2007. PL 109-295, 120 Stat. 1355 (2006).
https://www.gpo.gov/fdsys/pkg/PLAW-109publ295/pdf/PLAW-109publ295.pdf
6. 44 CFR 206.8. [Reimbursement of other Federal agencies]
https://www.gpo.gov/fdsys/pkg/CFR-2011-title44-vol1/pdf/CFR-2011-title44-vol1-
part206.pdf
7. Purchase Card Program, Department of Homeland Security, Management
Directive 0760.1.
https://www.dhs.gov/xlibrary/assets/foia/mgmt_directive_0760_1_purchase_card_progra
m.pdf
8. National Response Framework, Department of Homeland Security, May 2013.
http://www.fema.gov/media-library-data/20130726-1914-25045-
1246/final_national_response_framework_20130501.pdf
9. Disaster Related Pollution Response Activities under the Federal Response Plan (FRP)
and Cost Reimbursement from the Stafford Act, COMDTINST 16451.1 (series).
http://www.dcms.uscg.mil/directives
10. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
11. Marine Safety Manual, Volume VI, Ports and Waterways Activities, COMDTINST
M16000.11 (series).
http://www.dcms.uscg.mil/directives
12. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
13. Reimbursable Standard Rates, COMDTINST 7310.1 (series).
http://www.dcms.uscg.mil/directives
5.6.6.8.3 Responsibilities
Following are the offices and their respective responsibilities for FEMA-related reimbursements
to the Coast Guard.
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5.6.6.8.3.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) shall develop, promulgate, and implement Coast Guard financial
management policy for documentation of MA expenses; submission of MA claims; acceptance,
distribution, and accounting documentation for reimbursable funding, followed by subsequent
reimbursement of appropriate accounts for disaster relief activities performed pursuant to FEMA
tasking under the Stafford Act.
5.6.6.8.3.2 Financial Management Policy Division (CG-843)
Commandant (CG-843) shall review policy annually and incorporate, as appropriate, any newly
enacted or revised laws and regulations from higher authority.
5.6.6.8.3.3 Funds Control Division (CG-831)
Commandant (CG-831) shall:
1. Request apportionments of reimbursable authority from the Office of Management and
Budget (OMB).
2. Establish funds control: hard controls for all reimbursable program elements.
3. Serve as Headquarters liaison with the FEMA Finance Center and other Coast Guard
elements regarding FEMA reimbursement policy issues.
4. Conduct periodic audits and reviews of Coast Guard unit reimbursement packages to
monitor compliance with Coast Guard financial management policy.
5.6.6.8.3.4 Financial Analysis & Execution Division (CG-832)
Commandant (CG-832) shall:
1. Provide the current standard rates for resources per Reimbursable Standard Rates,
COMDTINST 7310.1 (series).
2. Determine which current Coast Guard accounts are appropriately credited with FEMA
reimbursements using the Reimbursable Standard Rates, COMDTINST 7310.1 (series)
5.6.6.8.3.5 Finance Center (FINCEN)
FINCEN shall:
1. Certify in the billing to FEMA that the reimbursement request is in the correct accounting
format.
2. Ensure that certifications made by the submitting organization (ATU or NPFC) are
included in the billing to FEMA.
5.6.6.8.3.6 Deputy for Operations Policy & Capabilities (CG-DCO-D)
Commandant (CG-DCO-D) develops, promulgates, and implements Coast Guard policy for the
operational acceptance of FEMA MAs pursuant to the Stafford Act.
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5.6.6.8.3.7 Office of Environmental Response Policy (CG-MER)
Commandant (CG-MER) shall:
1. Establish policy governing operational acceptance of FEMA MAs.
2. Oversee the development of Pre-Scripted Mission Assignments and coordinate review by
FEMA.
5.6.6.8.3.8 National Pollution Funds Center (NPFC)
National Pollution Funds Center (NPFC) shall:
1. Serve as manager for all ESF-10 funds provided to the CG for pollution responses by CG
operational units.
2. Act as liaison with EPA for FEMA reimbursements related to oil spills or hazardous
materials.
3. Determine when Stafford Act funding is to be used for oil spill or hazardous material
responses.
4. Generate billings for cost recovery for oil spill or hazardous material responses.
5.6.6.8.4 Policy for FEMA Reimbursement
5.6.6.8.4.1 General Policy
1. Coast Guard units shall use the appropriate base funding when operating under specific
contingent, disaster, or emergent authority and no MA is in place. Once a MA is issued
and budget authority is distributed, execution shall occur from an AFC-80 line of
accounting.
2. The Coast Guard shall seek appropriate and timely reimbursement for all expenses
incurred in support of an authorized Stafford Act disaster relief effort. The Coast Guard
may only bill FEMA for the costs incurred for personnel, services, and materiel as the
result of FEMA tasking.
3. An MA is required in all cases involving Coast Guard assistance to FEMA, or to the
primary agency for ESF acting for FEMA. (An MA may not be reimbursed when the
Coast Guard is performing duties under its own authorities for which it receives
appropriations.)
4. Units are authorized to incur expenses based upon a verbal request for assistance from the
authorized ESF/FEMA representative, provided that the request is followed up by a
written MA not more than 24 hours later. Units shall obtain all information normally
contained in the written MA when the verbal request is received, in order to avoid
confusion at a later date. Every effort must be made to ensure that a valid MA is
obtained from FEMA prior to submitting a request for reimbursement.
5. Special care shall be taken throughout the emergency response period to maintain
abstracts of operations, logs, formal records, and file copies of all expenditures in order to
show clear and reasonable, detailed documentation to support reimbursement requests for
each distinct assignment.
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6. Funds reimbursed from FEMA shall be credited to the Coast Guard appropriation for use
in the fiscal year actually received, regardless of when the services were provided.
Reimbursements received in a follow-on fiscal year for MA performance in a prior fiscal
year shall not be credited to a prior-year account. The Stafford Act states
(42 USC 5147):
“Any funds received by Federal agencies as reimbursement for services or supplies
furnished under the authority of this Chapter shall be deposited to the credit of the
appropriation or appropriations currently available for such services or supplies”.
7. Commanding officers/officers-in-charge are authorized to exceed normal operating
budgets for their assigned program elements in order to comply with a particular MA.
They shall, as soon as practicable, follow up with an emergency request for supplemental
funding to the district and/or logistics/service center command via message. The
recipient of the emergency request shall follow up with Commandant (CG-831).
8. ATUs (e.g., districts, logistics/service center commands, and HQ units) are authorized to
exceed normal operating targets in order to comply with requests for disaster relief
services. ATUs shall notify Commandant (CG-831) by the most rapid means as soon as
it becomes apparent that targets have been exceeded or are projected to be exceeded.
9. If Coast Guard contracting officers (KOs) are not available, the General Services
Administration (GSA) has primary responsibility for providing procurement support to
Coast Guard units responding under the Stafford Act. The decision regarding KO
support is made by the local servicing Chief of Contracting Office (COCO). The
Governmentwide commercial purchase card shall be used in accordance with the policy
and procedures described in Head of Contracting Activity Governance Memorandum
(HCA-GM 13.0-0) Purchases Using Simplified Acquisition Procedures, October 2016
and Purchase Card Program, DHS Management Directive 0760.1.
10. All documentation used to support FEMA MAs shall be maintained in accordance with
Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
11. The Assistant Commandant for Response (CG-5R) has the overall oversight and
management of the implementation of the NRF. However, the Assistant Commandant
for Resources (CG-8) is responsible for developing and implementing financial
management policy for subsequent reimbursement for disaster relief activities performed
pursuant to FEMA tasking under the Stafford Act.
5.6.6.8.4.2 Property Accountability Policy
1. All items purchased with FEMA reimbursable funds (but not requiring capitalization)
shall be considered loaned accountable property. Examples include cameras, generators,
cell phones, and walkie-talkies.
2. All accountable and capitalized property acquired with MA funding must be recorded and
tracked in the Coast Guard property tracking system from its acquisition and use during
disaster response through either its transfer to FEMA or its disposition by the Coast
Guard.
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5.6.7 Refund Programs (Adjustments between Appropriations, 31 USC 1534)
5.6.7.1 Policy
1. General
Each appropriation shall be charged with all of the costs (including pay, allowances, and
certain related support costs) necessary to carry out the purpose of the appropriation
unless otherwise provided for in another appropriation. “Cross subsidizing” of one
appropriation by another is strictly prohibited.
2. Fully Fund Coast Guard Facilities
Coast Guard appropriations may fully fund Coast Guard facilities necessary to support
the purpose of the appropriation. For example, the R&D appropriation supports the
Research and Development Center (RDC).
3. Appropriations Fund Coast Guard Facilities
Appropriations will fund Coast Guard facilities which carry out the purpose of two or
more appropriations (such as Training Centers) according to their proportional use of the
facility. Affected appropriation managers will negotiate the basis of the funding split.
Parties to this agreement will review and renegotiate it every two years as necessary.
4. Provision for Charges
The PC&I, BS, EC&R, O&S, R&D, and RT budgets will request and justify funds for
pay, allowances, and related personnel support costs of personnel assigned to authorized
billets/positions charged to that appropriation. Where possible, these costs will be
charged directly to the cognizant appropriation.
5. Intra-Coast Guard Refund Account
When a direct charge is not possible, an adjustment or refund to the O&S appropriation is
executed through the Intra-Coast Guard Refund Account. Unless actual costs can be
determined, program managers will base personnel estimates on standard personnel costs
(SPC) or similar methods. Appropriation managers will make onetime nonrecurring
refunds to the O&S appropriation equal to the applicable SPC for newly acquired
billets/positions
5.6.7.2 Military Pay and Allowances
1. FINCEN will charge all military and civilian pay and allowances to the applicable
appropriation.
2. Personnel support costs (PSC) - The non-O&S appropriations shall fund personnel-
related support costs on the basis of published SPC. SPC costs shall be reimbursed
annually to AFC-01 (indirect costs), AFC-08 (indirect costs), AFC-20, AFC-30, AFC-56,
and AFC-57 based on the encumbered Personnel Allowance List (PAL) except where the
parent appropriation will make direct payments for support costs. In this case, when
specific items within the SPCs do not apply for particular units or categories of
personnel, the amount of the refund will be adjusted to account for direct payments as
mutually agreed upon by the impacted appropriation managers.
3. Documentation
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a. When the level of the refund program changes during the fiscal year due to changes
in SPCs or changes in authorized billet levels, the pay manager executing a refund
shall initiate a CIFP reflecting the proper adjustment and fund distribution. CIFPs
that affect any refund allowance fund control (AFC) accounts must be routed through
Commandant (CG-831) in addition to the affected appropriation and AFC managers.
b. Commandant (CG-831) will review all CIFPs to ensure consistency between their
funding and O&S appropriations financial plans.
c. Program managers should complete the process for pay and allowances adjustments
for quarters one through three based on the estimate for encumbered PAL. A final
CIFP based on updated encumbered PAL data should be completed in quarter four
but no later than 1 August to record any remaining pay and allowances adjustments.
5.6.8 Operating Expenses – Military and Civilian Pay/Cost of Living (COL)
No funds are provided directly to ATUs for AFC-01, Military Pay and Allowances; AFC-08,
Civilian Salaried Personnel; or multi-year appropriation pay accounts. Funding for military
personnel is managed and processed through Commandant (CG-8), FINCEN, and the Pay and
Personnel Center (PPC). Funding for civilian personnel is managed and processed through
Commandant (CG-8), FINCEN, and the National Finance Center (NFC).
5.6.8.1 Responsibilities
5.6.8.1.1 Financial Analysis and Execution Division (CG-832)
Commandant (CG-832) with respect to the civilian pay account (AFC-08) shall:
1. Set budget limits for civilian employees.
2. Establishes the necessary funding controls to fill civilian positions in the
Coast Guard to include hires, accretions, reassignments, and conversion of
students.
3. Develop innovative methods to improve management's access to
information that will assist in the process of monitoring and controlling
expenditures.
4. Support payroll transactions (PACS records at transitional level) transferred
to and returned by NFC were properly processed, transactions returned and
recorded in the general ledger actually occurred, and were complete and
accurate.
5. Ensure errors are detected and are properly follow up on and worked to
resolution.
6. Review and reconcile chargeback billings for Workers Compensation
(FECA) payments made by the Department of Labor (DOL) to ensure that
injured employees are former or current employee of the Coast Guard and
that amounts charged for compensation costs are reasonable.
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5.6.8.1.2 Civilian Resource Coordinators (CRCs)
Civilian Resource Coordinators (CRCs), as a part of internal controls, are considered the
designated points of contact between Commandant (CG-832) and their respective units or areas of
responsibility—generally an ATU.
CRCs are responsible for pre-approving and authorizing non-
centrally funded pay expenditures within budgetary constraints. Only the approved Civilian Pay
Manager (Commandant (CG-832)) report is authorized for CRC use. ATUs must comply with
annual AFC-08 overtime ceilings. Failure to comply will subject an ATU to ratification, a
withdrawal, or reduction of funds. CRC should perform bi-weekly pay calculation for non-
centrally managed overtime and address all related issues to Commandant (CG-832).
Note: Commandant (CG-121) Human Resource (HR) Specialist shall not process payments
(such as awards, overtime) unless funds certified by the civilian pay manager (Commandant
(CG-832)) or the appropriate CRC supporting the Civilian Employee Financial Resource Official
(CEFRO).
5.6.8.2 Upgrade of Positions
ATUs desiring to upgrade military or civilian positions are required to provide offsetting AFC-
01 (military positions) or AFC-08 (civilian positions) costs. Approvals are subject to stakeholder
review per the Personnel Resources and Reprogramming Manual, COMDTINST M5312.13
(series).
5.6.8.3 Overtime for Civilian Employees
Civilian Resource Coordinators (CRCs) are responsible for approving and authorizing non-
centrally funded overtime within budgetary constraints, provided by the civilian pay manager.
Civilian personnel in reimbursable, revolving fund, or non-O&S appropriation positions (i.e.,
Boating Safety, EC&R, R&D, RT) are subject to overtime budget limitations established by the
civilian pay manager.
ATUs must comply with annual AFC-08 overtime ceilings. Failure to comply will subject an
ATU to a withdrawal or reduction of funds.
Fiscal year payroll expenditures are measured on the same basis as used by the Federal
Government for reporting Full-Time Equivalency (FTE) consumption. The "FTE" fiscal
year begins with the start of the first biweekly pay period closest to, but not later than 1
October. As a result, it may begin and end up to 13 calendar days earlier than the
"standard" fiscal year.
5.6.8.4 Non-Pay Cost of Living (COL) Funding
Non-pay COL funds are received in appropriations from Congress to cover price increases
affecting non-pay items. These funds are provided to fund increased costs of current operations.
Increases above these amounts must be absorbed from available funds. COL is computed by
applying the Bureau of Labor Statistics index measuring the cost of Federal goods and services
to the non-pay portion of the Coast Guard O&S appropriation.
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5.6.8.4.1 Cost of Living Funds
COL funds must be carefully matched with price increases over the long term. There have been
fiscal years when no price increases were incurred for such items as fuel and TAD, followed by
years when price increases for these items far exceeded the annual COL funding level. COL
funds should be managed over the multi-year period to allow for these fluctuations. Further,
AFC managers should note that the index is a “market basket” measurement such that higher
inflationary increases in certain commodities are offset by below average increases in others.
COL funds are not intended for and should not be used to fund new or expanded programs of a
recurring nature.
5.6.9 Operations & Support (O&S) – Adjustments and Miscellaneous
5.6.9.1 Adjustments to Initial Funding – Purpose
It is normal and appropriate that, during the course of a fiscal year or project life, circumstances
change or more information becomes available, necessitating a change in the initial distribution
of funds made by FMOP and subsequent sources of funds.
Procedures and approval authority for adjustments to initial funding have been developed in an
attempt to balance the need for centralized oversight and decentralized management. Within the
O&S appropriation, there are two types of adjustments to initial funding:
1. The first type of adjusting document is a Change in Financial Plan (CIFP). A CIFP is
used to shift funds between two or more AFCs. An example would be funds allocated for
electronic support in AFC-42 that need to be shifted to AFC-30 in order to support an
AFC-30-funded electronics support contract. Appendix 5-1 (Summary of Change in
Financial Plan Signature Authority) provides the signature authorities necessary to
approve a CIFP.
Note: A CIFP that shifts funds between AFCs within the same PPA is a “realignment”.
If a CIFP shifts funds between AFCs within different PPAs, it is a “reprogramming”
which is subject to Section 503 of the general provisions within appropriation acts; for
further guidance see Section 5.6.19 (Reprogramming).
2. The second type of adjusting document is a Financial Transfer Authorization (FTA),
which distributes funds from one ATU or account to another within an AFC. For
instance, if supplemental AFC-30 funds were to be provided by a Headquarters office to
a district for cleanup after a hurricane, the transfer would be accomplished with an FTA.
Both CIFPs and FTAs can be executed on a recurring basis, in which case they are annualized
into the funding base of the ATUs/AFCs involved.
It is the responsibility of the originating office to have on file the proper approval/signatures of
all offices affected allowing for electronic processing. By placing a person’s name on the
automated funds transfer entry, the initiating office is indicating that the person has approved the
funds transfer. Upon completion of processing, copies of the completed FTA will be
electronically sent to all programs providing and receiving funds.
Note: The Coast Guard Yard will not accept cash advances for customer project orders via FTA.
The Yard will only accept customer project orders that cite valid obligation documents on the
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Project Order, Form CGY-75. The Yard will continue its normal practice of collecting the cash
advance from the customer against the customer’s established obligation via the
Intragovernmental Payment and Collection (IPAC) system through FINCEN. This policy does
not affect the Yard’s ability to receive FTAs for internal Yard projects, such as AFC-43-funded
projects at the Yard. It only applies to projects for work performed by the Yard for other Coast
Guard customers (e.g., repair availability projects or marine environmental protection (MEP)
recapitalization projects).
5.6.9.2 Financial Plan Adjustment Authority
The approved FMOP forms the basis for the Coast Guard’s annual obligation plan. The FMOP
reflects the Commandant’s resource allocation decisions from the budget formulation stage,
endorsement of these decisions by DHS and OMB in the budget submission process, and
approval by the President and Congress through enactment of appropriations. Changes to the
FMOP must be consistent with these decisions. Significant changes in scope or cancellation of a
program, project, or activity require approval from the Commandant, and in some instances,
concurrence by Congress. In addition, funds for certain programs or projects are “earmarked” by
Congress and cannot be reprogrammed without specific advance approval. Transfer
authorization procedures, designed to provide a framework for making changes to the FMOP, are
intended to provide internal flexibility while responding to external constraints.
5.6.9.3 Adjustments between a Target
O&S financial plan funds are allocated by AFC in the FMOP and are summarized by office in an
annual Source of Funds. The appropriation manager must approve all adjustments between
AFCs. In general, the AFC manager reviews adjustments between program elements within the
same AFC.
Recurring and nonrecurring adjustments are to be submitted by program managers to
Commandant (CG-83) on a Change in Financial Plan, Form CG-3319, via the relevant
appropriation manager for annotation of serial number and approval. A copy of the approved
form shall be forwarded by Commandant (CG-83) to Commandant (CG-82).
5.6.9.4 ATU Funding Adjustments/New Initiatives or Requirements
New initiatives or requirements should be funded by analyzing current spending plans,
reprioritizing activities, and reallocating funds from within the ATU’s base whenever possible.
Contingency funds should be used solely for unanticipated requirements.
5.6.9.4.1 Additional AFC-30 Funding
If additional AFC-30 funding is required to continue reasonable operations, the necessary
amount can only be obtained by adjusting annual spending plans and/or using funds from other
AFCs. These efforts should be coordinated with the responsible AFC or the appropriation
manager. Only after all funds available to the administrative target unit have been critically
examined should a request for additional funds be made to Headquarters. Appendix 5-2, Fund
Request Formats shows a sample funding request.
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5.6.9.4.2 Coordination
Appropriation managers will coordinate correspondence from areas, logistics and service center
commands, districts, and Headquarters units involving the management or adequacy of funds.
Offices to which correspondence is referred will coordinate the appropriate reply, which will be
routed for signature to the appropriation manager or designee. Where a request for funds is
granted, the reply should take the form of a FTA. It is expected that the reply will be released
within 10 working days after receipt by the action office. Types of requests include the
following:
1. Appeals to Initial Target – A full detailed analysis and response should be prepared for
each appeal.
2. Letter Requests for Additional Funds – The appropriation manager will forward these
letters to the action office for preparation of a letter response and/or FTA.
3. Message Requests for Additional Funds – All message requests for funds will be sent for
action to the appropriation manager. The cognizant AFC and program manager will
receive an information copy.
5.6.9.5 Adjustments between ATUs
During the fiscal year, changed conditions may require fund adjustments between different
ATUs. Shifts between ATUs and recurring base changes between all AFCs (except intra-Coast
Guard refund and reimbursables) shall be processed as described below.
5.6.9.5.1 Adjustments between ATUs if between AFCs
1. The requester on a CIFP, if between AFCs, shall originate adjustments between ATUs.
2. The CIFP must display the approval of all AFC managers involved and shall be
submitted with full justifications (background documentation and references) to
Commandant (CG-83). CIFPs that do not clearly provide full justification will be
returned to the originator for resubmission.
3. The target manager releasing the funds under an FTA shall submit a memo to the AFC
manager requesting the adjustment of funds.
5.6.9.5.2 Minimum Field Requests
Field ATUs will absorb fund requirements under $500. Headquarters will normally not process
requests for amounts below this amount unless the ATU fully justifies the need and an inability
to absorb that amount.
5.6.9.6 Target Modification
Target modification preparation. Headquarters divisions desiring to adjust field targets shall
complete a Financial Transfer Authorization, Form CGHQ-3200.1, and route it to the AFC
managers.
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5.6.9.6.1 Target Modification Restrictions
Frequent modification of field targets is discouraged. Maximum distribution of available funds
after publication of the final FMOP should result in minimum follow-on adjustment.
5.6.9.6.2 Minimum Target Modification
The minimum target modification that will be processed is $500. AFC managers may
accumulate adjustments for lesser amounts and issue one consolidated FTA.
5.6.9.6.3 Alternatives to FTAs
Administrative alternatives to FTAs should be used in lieu of frequent target adjustments. For
example, assignment of a travel order number chargeable to a Headquarters account is a less
complex procedure than issuance of a FTA to accomplish the same objective.
5.6.9.7 Additional Funds Requirements
When a requirement for additional funds in an ATU arises because of emergencies or program
changes, the following actions shall be taken in sequence.
5.6.9.7.1 Adjust Financial Plans
Review the elements or programs under the ATU in which a change in requirements arise and, if
possible, rearrange priorities for accomplishment. This review and realignment should first be
made within the AFC.
5.6.9.7.2 Reallocating Funds between AFCs
If needed funds are not available within the AFC, the ATU budget officer, based upon guidance
from the Budget Review Board, shall review and recommend revisions to programs within other
AFCs. The ATU must request authorization from the AFC and appropriation managers to
reallocate funds between AFCs. All reallocations will be effected via a CIFP, approved as
outlined earlier in this Subsection.
5.6.9.7.3 Unfunded O&S Requirements under $10,000
ATU budgets have expanded in size to the point that unfunded O&S requirements up to $10,000
can and should be absorbed in the current year within available funds at the district. Therefore,
funding requests submitted to Headquarters under $10,000 in each O&S AFC will not be
processed. For Headquarters ATUs, requirements up to $5,000 can and should be absorbed in
the current year within available funds at the Headquarters unit.
5.6.9.7.4 Fund Requests to Headquarters
If a review indicates that no items can be deferred or reduced in scope, the ATU may request
additional funds from the cognizant program manager. A program manager who is unable to
fund the request from within the existing funding base will seek the funding from Commandant
(CG-8)/CFO.
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5.6.9.8 Permanently Switching Funds
Although the vast majority of adjustments between AFCs are nonrecurring, occasions may arise
when it is desirable to permanently change the method of supporting a program by permanently
switching funds between AFCs.
5.6.9.8.1 Recurring Base Changes
Requested recurring base changes between AFCs will be treated as a nonrecurring change during
the current and subsequent fiscal year. The RMO should submit a request to make the change
permanent during the next technical adjustment cycle. If approved, it will be submitted to
Commandant (CG-821) for inclusion in the budget request.
5.6.9.9 Transfer of Units between Districts
When operating units are permanently transferred, ATUs should take the following action to
permit adjustment of allotted funds:
1. Action by Losing ATU – Determine the amount of unobligated funds remaining in the
current year and the annualized amount for operation and maintenance of the unit being
transferred. Submit a letter to Commandant (CG-83), via the gaining ATU (with an
information copy to the cognizant Headquarters program manager), stating the amount of
funds available for release by AFC and quarter.
2. Action by Gaining ATU – Endorse the letter from the losing ATU, indicating the
sufficiency of the proposed funds transfer, both current-year and annualized.
Commandant (CG-83) will adjust the targeted funds of the losing and gaining ATUs
based upon this letter, after consultation with appropriate Headquarters AFC and program
managers.
5.6.9.10 Reporting Excess Funds in O&S
Operating support managers responsible for executing specific line items in the FMOP shall
immediately inform the appropriation manager of any circumstances precluding total obligation
of available funds for the project in the current fiscal year. The appropriation manager will
inform Commandant (CG-8)/CFO that funds cannot be obligated within the appropriation.
5.6.9.11 Carryover Criteria/Execution of the Financial Plan
It is important that financial plans be executed to meet obligation criteria. Not meeting the
quarterly obligation target reflects poorly on sound management.
Failure to meet the obligation criteria at the end of the third quarter places a large burden on the
procurement system, increases the possibility that the funds will not be obligated before the end
of the fiscal year, and may violate OMB obligation guidance which requires that fourth quarter
obligations not exceed obligations for the third quarter (see OMB Circular A-11).
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5.6.9.11.1 Obligation Criteria
Unobligated balances less than the following for non-pay funds are considered excessive, unless
the appropriation manager has granted an exemption. The only exceptions to these obligation
rates are for pay and depot-level maintenance accounts.
1. Twenty-five percent of the cumulative ATU’s non-pay fiscal year funding level at the
end of the first quarter;
2. Fifty percent of the cumulative ATU’s non-pay fiscal year funding level at the end of the
second quarter;
3. Seventy-five percent of the cumulative ATU’s non-pay fiscal year funding level at the
end of the third quarter.
5.6.9.11.2 Depot-Level Maintenance Accounts
Unobligated balances less than the following are considered excessive, unless an exemption has
been granted by the appropriation manager:
1. Fifteen percent of the cumulative ATU’s non-pay fiscal funding level at the end of the
first quarter;
2. Thirty five percent of the cumulative ATU’s non-pay fiscal year funding level at the end
of the second quarter;
3. Fifty five percent of the cumulative ATU’s non-pay fiscal year funding level at the end of
the third quarter.
Anticipated carryovers greater than these amounts shall be reported to the appropriation manager
at least 30 days prior to the end of the quarter with a request that they be allocated. On the
advice of the appropriation manager, Commandant (CG-8) may direct the withdrawal of actual
carryover funds greater than these amounts, and reprogram the funds elsewhere. Should OMB
choose to apportion Coast Guard funds in such a way that execution of the obligation rates
contained herein is not practical, the appropriation manager may issue alternate obligation
guidance through the applicable AFC managers.
5.6.9.11.3 Formal Administrative Commitments
Formal administrative commitments are not legal obligations and, if not converted to a formal
obligation by the end of the quarter, represent a carryover of funds.
5.6.9.12 Report of Unobligated Balances
As soon as possible after the end of each quarter, Commandant (CG-83) will prepare a report of
unobligated balances by AFC. This report will be used by the appropriation manager as the
management tool for supervising timely use of funds and deciding on disposition of excess
carryover.
5.6.9.13 Operating Expenses Closeout
Review the status of AFC accounts and ensure that all Program Element Status (PES) reports
are reconciled.
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Table 5.1 AFC Codes and Corresponding Managers
AFC Manager
AFC-20 and 57
Commandant
(CG-1)
AFC-56
FORCECOM
(FC)
AFC-01, 08, 30, 34,
and 36
Commandant
(CG-8)
AFC-41, 43, and 45
Commandant
(CG-4)
AFC-42
Commandant
(CG-6)
If errors are occurring within PES of over $1,000 as of 30 August, they must be reconciled and
forwarded to FINCEN NLT close of business (COB) on 15 September. Ensure that
commitments in the pipeline are executable and that obligations are valid, and cancel obligations
or commitments where necessary. Provide updates through 30 September of the current fiscal
year for any material changes. If there are any questions, or if you are in need of assistance,
contact Commandant (CG-832) and/or FINCEN.
Ensure that all procurements during the fourth quarter reflect the highest priority needs for your
ATU. Return unused funds for other Coast Guard top priorities. Returning funds at the end of
the current fiscal year will not affect future sources of funds.
All ATUs and Headquarters offices shall report anticipated end-of-year balances by the second
Friday in September to the relevant AFC manager who will make a consolidated report to the
respective appropriation managers in Commandant (GG-831). (refer to Table 5.1 above).
Funds transfers will be suspended as of COB on the second Friday in September.
Contact Headquarters programs if any transfers will need to occur after that date.
Transactions to include the following procurement types must be obligated by COB
30 September and included in the FPD submission sent by 1500 EDT 1 October:
1. Contracts;
2. MIPRs;
3. ISSAs;
4. Travel orders;
5. Fuel purchases; and
6. Any other purchase orders.
Funds managers must manage funds that have expired for obligation purposes. Program element
managers will be required to reconcile the previous fiscal year’s PES reports until the account is
closed, and should ensure that all PES reports are reviewed until all UDOs and ATUs have been
expended or cancelled. PES reports for FY99 and later are available via the FINCEN website at
http://www.dcms.uscg.mil/directives.
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5.6.9.14 Pipeline Management
Headquarters Offices, ATUs, and units must maintain appropriate documentation to support
year-end certification reports filed with FINCEN. DHS will audit the Coast Guard’s legal
obligations that were executed on or before 30 September but were not recorded in CGOF when
the books were closed on 30 September. Documentation must be kept locally for review by the
audit team as part of an unqualified opinion as required by the CFO Act.
5.6.10 Use of Operations & Support (O&S) Funds
Many questions arise concerning the propriety of using funds (both appropriated and
nonappropriated) to accomplish the various missions of the Coast Guard. Procurement officials
and those in supervisory and command positions must be aware that the consequence of using
Coast Guard funds inappropriately could lead to a member or employee being held personally
responsible for commitments and purchases made by them. For this reason, any question of
whether a contemplated action is appropriate must be resolved prior to entering any agreement
that commits (or appears to commit) the Coast Guard to payment.
Based upon the frequency of field units requesting guidance from Headquarters regarding certain
Use of O&S funds questions, Coast Guard has developed seven procedures that can be found in
the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series) as follows:
Procedure No. 5.6.21.1: Use of O&S Funds General
Procedure No. 5.6.21.2: Use of O&S Funds for Awards and Recognition
Procedure No. 5.6.21.3: Use of O&S Funds for Command Coins
Procedure No. 5.6.21.4: Use of O&S Funds for Emergency Evacuations
Procedure No. 5.6.21.5: Use of O&S Funds for General Kitchen and Coffee Mess
Equipment and Supplies
Procedure No. 5.6.21.6: Use of O&S Funds for Organizational Clothing
Procedure No. 5.6.21.7: Use of O&S Funds for Traditional Ceremonies
In addition, the remainder of this Use of O&S Funds Subsection provides brief Coast Guard
policy decisions on diverse procurement questions that do not require a formal procedure but
simply list prohibitions and any related exceptions and requirements. Please note this Subsection
is in no way meant to be all-inclusive. For any questionable procurement requests, members and
employees should follow the Financial Resource Management Manual – Procedures (FRMM-
P), COMDTINST M7100.4 (series), Procedure No. 5.6.21.1 (Use of O&S Funds General).
5.6.10.1 Bottled Water
Bottled or potable water cannot be purchased using appropriated funds unless a local health
official or the applicable safety and environmental health officer (SEHO) determines that the
water is unfit due to noncompliance with recommended maximum contaminant levels (MCL)
from the EPA Primary Drinking Water Regulations. All water testing must be completed at an
accredited laboratory. Tainted, discolored, or odorous water (including EPA Secondary
Drinking Water Regulations) is not a basis for authorizing the purchase of bottled water.
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Useful guidance may be found in Comp Gen B-147622 12/7/61; i.e., bottled water may be
purchased with appropriated funds only on the grounds of necessity which include:
1. No potable water is available within 200 feet of the place where people normally work.
2. The water is contaminated (described above).
3. There is an urgent need for water that could not otherwise be met.
Conditions may exist where drinking water is not unfit based on primary drinking water
standards, but it may not be palatable due to maintenance or repairs to a water system. Under
these conditions, temporary (not to exceed 60 days) authorization to purchase bottled water may
be requested, provided that the SEHO or Commandant (CG-113) provide written justification
supporting the necessity to temporarily provide a suitable water source to maintain mission
effectiveness.
Units shall actively pursue permanent solutions to ensure that adequate drinking water is
available for employees. Units are required to revalidate all bottled water requests quarterly.
5.6.10.2 Breastfeeding
5.6.10.2.1 Authorities
Pregnancy in the Coast Guard, COMDTINST 1000.9 (series).
http://www.dcms.uscg.mil/directives
5.6.10.2.2 Policy
The Coast Guard recognizes the importance and benefits of breastfeeding and the fact that many
women will return to work with the desire to continue nursing. Service members and civilian
employees should obtain information from their health care provider relating to breastfeeding
education, care, counseling, and support during the pregnancy, after delivery, and upon returning
to work. If the woman opts to breastfeed after returning to duty or work, the member and the
command should communicate to address any concerns or issues. Challenges in the workplace
may include a lack of adequate facilities and limited time during the workday for expressing
milk. These challenges can be reduced with a small investment of time and flexibility.
Unit Commanders, Commanding Officers, and Officers-in-Charge, to the extent practical and
within resource limitations, shall:
1. Provide for an adequate lactation facility. This is a private, clean room for expressing
breast milk during the workday. The facility shall be equipped with electrical outlets,
include a table and chair, and be located as close as possible to a water source for
washing hands and rinsing equipment. A bathroom may be used if a lounge area is
available within the space. When space is limited, a multi-purpose room (e.g. duty
room), stateroom, or berthing space may be used as long as there is an inside lock or
other measures to ensure privacy.
2. Provide for adequate storage. Access to cool storage (ideally, refrigeration) for expressed
breast milk is important. Breast milk should be contained and labeled to avoid accidental
contamination by other items. If no refrigerator space is available, the servicewoman or
employee must supply cold packs for storing milk.
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Therefore, with respect to the use of appropriated funds, it is Coast Guard policy that using
appropriated funds to provide reasonable accommodations for nursing mother employees is a
reasonable and proper use of funds. This would depend upon existing space, size of unit, etc.,
but may include purchasing furniture and a small refrigerator, separate from kitchen facilities.
5.6.10.3 Business Cards and Information Cards
Printing business cards, either commercially or by utilizing the Government Printing Office
(GPO), is not authorized except in those rare cases where a specific statutory authority exists
(e.g., recruiters, and Academy admissions officials).
5.6.10.3.1 In-House Produced Cards
Business cards may be produced in-house when a CO has determined that the cards are
necessary to perform official duties and to facilitate mission-related business communications (as
distinct from social or business courtesy).
5.6.10.3.2 Locally Produced Cards
Local production of cards will use Coast Guard standard computer hardware and software on
perforated card stock that may be obtained with unit appropriated funds using standard unit
procurement procedures and policies.
All locally produced cards will comply with the following standards. Deviations are not
authorized.
Figure 5.1 Typical Coast Guard Business Card
1. White or ivory card stock, 50–110 pound, nonglossy
(NSN 7530-01-425-6754 or 7530-01-449-6946 or equiv.);
2. No matte finish;
3. Finish size of 3½ by 2 inches;
4. Print one side only; and
5. No additional artwork, symbols, or information.
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5.6.10.3.3 Personally Procured Cards
Business cards purchased with personal funds may be of any design that conveys favorably upon
the Coast Guard as a professional Government agency. The cost of cards purchased with
personal funds may not be reimbursed with appropriated funds.
5.6.10.3.4 DHS Logo
Any business cards that contain the DHS logo shall comply with Use of the Department of
Homeland Security Seal, DHS Management Directive 0030, and Acquisition of Department of
Homeland Security Employee Business Cards, DHS Management Directive 0570.
5.6.10.4 Cable/Satellite Television Service and Satellite Radio Service
This Subsection specifies policy for the use of appropriated funds to purchase cable or satellite
television services or satellite radio services.
5.6.10.4.1 Definitions
basic service – the collection of channels offered for the minimum price.
premium service – those channels that are not included in the most basic service agreement.
Premium service includes movie channels, channels of special interest (e.g., children’s
programming, history- or technology-related programming, and sports programming), and sports
packages that include all games within a season or other expanded sports coverage. Specific
examples of premium service include:
1. Movie services such as Cinemax, HBO, and Showtime. In some cases, these services
may include more than one channel. For example, Showtime premium service may
include Showtime, Showtime 2, Showtime Unlimited, the Movie Channel, Flix, and the
Sundance Channel.
2. A “specialty pack” of channels not part of a basic service. Examples include Sports
Packs consisting of several sports channels and/or regional sports channels.
3. A sports subscription that is not part of a basic service. Examples include NFL Sunday
Ticket, MLB Extra Innings, and ESPN GamePlan.
5.6.10.4.2 Policy for Television Service
1. The use of appropriated funds to pay for subscriptions to cable or satellite television
service is permissible only under the following circumstances:
a. The service may only be installed in the following general access areas:
1) Recreational decks
2) Lounges
3) Wardrooms (only those wardrooms that are general access spaces for all crew
members)
4) Crew mess decks
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5) Medical waiting areas
All other areas are deemed individual spaces and not allowed to have televisions or
related cable or satellite subscription feeds or service.
b. The subscription must be limited to basic service and three premium services as
defined above. (Basic plus extended basic counts as one “basic” service; and a
bundle or “specialty pack” consisting of several non-basic channels is considered to
be one premium service.)
Note: General access areas must be accessible by all personnel not limited to an office or
department spaces furnished as a lounge, not a formal conference room, and space has
24-hour accessibility except when bona fide meetings are being held.
2. The following stations/services are not authorized to be purchased with O&S funds:
a. Movie and special event viewing paid per event or on a daily basis; and/or
b. Adult entertainment stations where the content is sexually related.
3. Advance payment for cable and satellite services is not authorized, and units shall
exercise care to ensure compliance with 31 USC 3324(a) (Comp Gen B 237789
12/10/99).
4. The following are examples related to use of appropriated funds to pay for subscriptions
to cable or satellite television service:
a. Permitted – an agreement with a cable provider for 265 basic channels plus HBO
(7 channels), Starz (12 channels), and Sports Pack (35 channels).
b. Permitted – an agreement with a cable provider for 200 basic channels plus HBO,
Starz, and Showtime.
c. Not permitted – an agreement with a cable provider for 200 basic channels plus
HBO, Starz, Showtime, Cinemax, and Sports Pack.
5.6.10.4.3 Policy for Satellite Radio Service
The use of appropriated funds to procure satellite radio service is authorized if the following
conditions are met:
1. The service must only be used in general areas (e.g., rec decks, lounges, wardrooms) and
not in individual offices or group and individual berthing areas.
2. The subscription must be limited to only the basic service package. Premium packages
(if available) are not authorized. Premium packages are defined as those stations or
broadcasts that are not included in the most basic package offered.
3. In keeping with CG Core Values, satellite radio receivers must contain locking devices to
ensure that adult entertainment stations that broadcast sexually explicit material are
filtered from use via the provider filtering controls. It is the responsibility of the
command cadre to ensure that inappropriate content is blocked.
4. Satellite receivers will not be installed in any Government vehicles.
5. Advance payment for satellite radio service is not authorized, and units will exercise care
to ensure compliance with 31 USC 3324(a). Payment will be made monthly. Lifetime,
annual, and multiple-year purchase service packages are NOT authorized for payment.
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6. Satellite radio receivers and associated products are highly desirable, and as such, it is
highly recommended that these items be reported as General Purpose Property in
accordance with U.S. Coast Guard Personal Property Management Manual (PPMM),
COMDTINST M4500.5 (series).
5.6.10.5 Change of Command Expenses
See the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Procedure No. 5.6.21.7 (Use of O&S Funds for Traditional Ceremonies) for
guidance on the use of appropriated funds for change of command expenses. Additional
guidance associated with the mailing of items may be found in U.S. Coast Guard Postal Manual,
COMDTINST M5110.1 (series).
5.6.10.6 Chaplain Support
The Coast Guard is obligated to support the chaplains that are assigned to the service and the
valuable work that they accomplish. Religious Ministries within the Coast Guard,
COMDTINST M1730.4 (series) provides applicable guidance concerning support of the Coast
Guard Chaplain Corps.
5.6.10.7 Conference Planning
5.6.10.7.1 Authorities
The following are important conference planning authorities to consider:
1. 41 CFR 301-74, Conference Planning
https://www.gpo.gov/fdsys/granule/CFR-2003-title41-vol4/CFR-2003-title41-vol4-
part301-id488
2. Joint Travel Regulations (JTR).
http://www.defensetravel.dod.mil/site/travelreg.cfm
3. Federal Travel Regulations (FTR).
http://www.gsa.gov/portal/content/104790
4. OMB Memorandum 11-35- Eliminating Excess Conference Spending and Promoting
Efficiency in Government, issued 21 September 2011.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
5. OMB Memorandum 12-12- Promoting Efficient Spending to Support Agency Operations,
issued 11 May 2012.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
5.6.10.7.2 Policy
Planning for a conference must be done correctly in order to avoid improper use of appropriated
funds. Conferences have come under increased scrutiny and OMB has issued 2 recent
memorandums requiring agencies to thoroughly review policies and controls associated with
conference-related activities and expenses and also requiring the permission of Deputy
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Secretaries or their equivalents to approve spending for all proposed new conferences to be
sponsored or hosted by Coast Guard.
Planners will ensure that they are familiar with all aspects of the conference, such as attendees,
subject matter, agenda, etc., as well as the rules and regulations surrounding conference
planning. Commandant (CG-81) has created a webpage with the latest policy at
http://www.dcms.uscg.mil/directives. Related forms and procedures are located online at
http://www.dcms.uscg.mil/directives.
All conference planners will ensure that the following policies are adhered to:
1. Attendees at a conference held within the attendee’s permanent duty station (PDS) are
ineligible for per diem for lodging and meals.
2. The cost of Government-contracted meals (if any) shall not exceed the applicable per
diem rate. See the Joint Travel Regulations (JTR) for military members or the Federal
Travel Regulation (FTR) for civilian employees.
3. Document efforts to reduce costs by seeking less-costly facilities. See the Joint Travel
Regulations (JTR) for military members or the Federal Travel Regulation (FTR) for
civilian employees.
4. Lodging, in conjunction with a conference, may not be procured by Government contract
within the confines of Washington D.C. Attendees may, however, rent rooms and
receive reimbursement by filing a travel voucher. See the Joint Travel Regulations (JTR)
for military members or the Federal Travel Regulation (FTR) for civilian employees.
(See 40 USC 34.)
Note: See Subsection 5.6.10.10.3 (Internal Coast Guard Business Meetings and Conferences) in
this Manual concerning internally organized meetings, conferences, and workshops.
5.6.10.8 Federal Executive Board (FEB)
Public Law 109-15 indirectly authorizes Federal agencies to use federally appropriated funds to
support Federal Executive Boards (FEBs), but it does not permit transfers. This support is
accomplished by participating in the various programs provided by the local boards, such as
recognition and training programs. This authority does not allow the Coast Guard to make grants
or donations to a local FEB without receiving some tangible benefit or service in return.
5.6.10.9 Seasonal Decorations & Flowers
1. Seasonal decorations qualify as necessary expenses to the extent that they relate to and
improve the working environment. The decorations cannot be for personal use (they
must be displayed in public areas, not individual offices), and they must be nonsectarian.
Note: Purchase of religious cards and religious articles with appropriated funds is
prohibited, except as provided for by Religious Ministries within the Coast Guard,
COMDTINST M1730.4 (series) (Comp Gen B-226011 11/17/87).
2. Floral centerpieces may be purchased for traditional ceremonies. See Procedure No.
5.6.18 (Use of O&S Funds for Traditional Ceremonies) in the Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series) for the
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list of approved ceremonies. The purchase of a wreath for National Veteran
Commemorations is also authorized.
3. Receptions held in conjunction with traditional ceremonies are separate events, and XXF
funds (which are only available to a small number of units) or personal funds must be
used to fund most items for them. Flowers used as decoration at a reception held in
conjunction with a traditional ceremony, or flowers given to participants or their family
members, are not allowed.
4. Federal Property Management Regulations (41 CFR 101-26.103-2) permits the purchase
of pictures, objects of art, plants, flowers (both artificial and real), and other similar items
as decorative items when furnishing Federal buildings. Such items may be purchased for
general use areas and may not be purchased solely for personal convenience or to satisfy
the personal desire of an employee.
5.6.10.10 Food – Meals and Refreshments
For the purposes of this Subsection, the following definitions apply:
meals – one of the regular occasions during the day when food is taken, as breakfast, lunch,
or dinner. This includes items commonly referred to as hors-d’oeuvres (light or heavy).
refreshments – light fare for morning, afternoon, or evening breaks. Defined to include, but
not be limited to, coffee, tea, milk, juice, soft drinks, donuts, bagels, fruit, pretzels, cookies,
chips, and muffins.
5.6.10.10.1 Meals and Refreshments
1. Meals or refreshments may not be furnished to Government employees and military
personnel without charge, except as noted.
2. If meals or refreshments are to be provided under the circumstances described below,
written justification will be submitted via the chain of command to the appropriate
authority listed below for prior approval. The justification will include all information
necessary to determine compliance with this guidance.
a. Office chief at HQ;
b. Commander LANT-8/FORCECOM-8/PAC-8;
c. Base Comptroller;
d. Commanding Officer (CO) of HQ unit.
5.6.10.10.2 External Non-Coast Guard Meetings
Meals and refreshments may be funded at Government expense during meetings and conferences
given for the purpose of enhancing employee proficiency or qualifying employees for other
duties only under the following circumstances:
1. Charges for meals and refreshments may be paid when the cost is a mandatory
inseparable element of the registration fee.
2. Where charges for meals and refreshments are separable, the following requirements
must be met (Comp Gen B-160579 4/26/78):
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a. Essential business relating to the official duties of the CG participant must be
discussed during meal time; and
b. The presence of the CG participant during mealtime is absolutely necessary if the
purpose and goal of the CG for authorizing the participant to attend the meeting is to
be realized by the CG; and
c. The employee is not free to take the meals elsewhere without being absent from
essential formal discussions; and
d. The meal must be incident to the meeting and not the other way around; that is, the
conference must extend significantly beyond the meal itself.
5.6.10.10.3 Internal Coast Guard Business Meetings and Conferences
1. Meals and refreshments may not be funded at Government expense during:
a. Day-to-day business meetings organized to principally deal with CG issues;
b. Meetings relating to CG operations; or
c. Meetings dealing with internal agency functions.
2. Refreshments may be provided to Federal conference attendees in a nontravel status if an
authorizing official listed in Subsection 5.6.10.10.1 of this Manual makes an
administrative determination that:
a. Attendance was authorized under 5 USC 4110;
b. The refreshments are incidental to the meeting;
c. Attendance of the employee during the periods the refreshments will be offered is
necessary for full participation in the conference; and
d. The employee is not free to obtain refreshments elsewhere without being absent from
essential formal discussions, lectures, or speeches concerning the purpose of the
conference.
The decisions of the Comptroller General at B-198471, May 1, 1980, and 64 Comp
Gen 406, 1985, provide useful guidance to make this determination.
3. Federal employees in a travel status must deduct meals funded by the Government from
the M&IE allowance when filing their travel claim. Refreshments furnished at nominal
or no cost to the Government need not be deducted (41 CFR 301-74.21). As a matter of
policy, “nominal” cost is considered an amount less than or equal to the daily amount
allowed for breakfast per attendee under applicable travel regulations, unless an
authorizing official listed in Subsection 5.6.10.10.1 or a KO determines the amount to be
unreasonably low based on local hotel or conference center rates. The authorizing
official or KO will determine an allowable cost that is nominal and reasonable based on
average local market rates.
4. Internal business meetings do not meet the criteria of training as described below (Comp
Gen B-270199 8/06/1996).
5. Conferences are gatherings that are not routine in nature and that are intended to cover
topical matters of general interest that might appeal to governmental and
nongovernmental participants. Meals and refreshments at a conference may be funded
for Federal employees in a travel status.
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6. Federal attendees in a nontravel status may not be provided with Government-funded
meals.
5.6.10.10.4 Non-Federal Attendees at Meetings Organized by Coast Guard Units
Meals and/or refreshments may not be funded at Government expense for non-Federal attendees
during meetings, conferences, or workshops sponsored by CG units (31 USC 1345). If
non-Federal employees will be present during CG conducted events, food and/or refreshments
will not be procured (Comp Gen B-247966 6/16/1993).
5.6.10.10.5 Training
For the purposes of this Subsection, training is defined as an instruction given for the purpose of
enhancing employee proficiency, or qualifying employees for other duties. Training sessions are
primarily given to materially enhance the student’s ability, or to modify the student’s
professional qualifications so as to enable him to assume different or enhanced duties.
5.6.10.10.5.1 Meals in Lieu of Per Diem
Meals may be provided during training sessions for attendees who are authorized per diem, if the
following provision is followed: Meals provided to an attendee within the attendee’s PDS must
be paid by the attendee.
The procurement of meals to be served during a CG training session is authorized only under
very limited circumstances (Comp Gen B-244473 1/13/92; also JTR C4552.H). In order for the
purchase of meals to be authorized, documentation must exist that:
1. The meal is incidental to the training meeting; that is, the meeting is not completely
conducted at the meal table;
2. The provision of food must be necessary to obtain the full benefit of the training;
3. The employees are not free to take meals elsewhere without missing vital information
relative to the training;
4. The amount to be contracted for the meal will not exceed the applicable proportional per
diem rate; and
5. The event must be a training event dealing with contingency operations and not day-to-
day operations of the service.
5.6.10.10.5.2 Refreshments
Refreshments will not be provided for during training sessions organized by the Coast Guard.
This policy is adopted due to the potentially extraordinary total costs that could be incurred
service-wide due to the numerous and varied types of formal and informal training regularly
conducted in the Coast Guard.
5.6.10.10.6 Cultural Awareness Programs
Appropriated funds may be used to purchase samples of ethnic food not readily available in
the community, to be served to Government employees for the purpose of promoting cultural
awareness.
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The Leadership, Excellence and Diversity (LEAD) Council should request items that will
promote the program and provide workers with a broader understanding of the group that it is
promoting (Comp Gen B-199387 3/23/82). In addition, the LEAD Council will obtain guidance
and approval from the Civil Rights/EEO Office in their area, district, logistics/service center
command, or from Commandant (CG-00H), on appropriate historical or cultural food samples or
other forms of entertainment to promote cultural awareness. The decision of the Comptroller
General in B-301184, U.S. Army Corps of Engineers, North Atlantic Division, provides an
extensive discussion of the guidance required for cultural awareness programs and the criteria for
determining whether food offered at a cultural awareness event is a “meal” or a “sampling”.
The term “sample” is defined to mean of minimal portions and separate from any meal. The
intent of offering the samples is to provide attendees at such observances with an awareness of
the culture or ethnic history being celebrated, and is limited to circumstances in which the
serving of food samples advances the agency’s equal employment opportunity (EEO) objectives.
The term “not readily available in the community” is intended to exclude items that are mass-
produced and mass-consumed in urban areas. Thus, if a unit were celebrating Italian heritage,
ordering pizza would not be appropriate. If a unit were celebrating Hispanic heritage, purchasing
fast food tacos or burritos would not be appropriate.
5.6.10.10.7 Emergency
Expenditures for food are authorized when the purchase of food is incidental to an extreme
emergency requiring the protection of Government property or the protection of human life.
Law enforcement officials and their immediate family members may be quartered in temporary
quarters and fed when their lives are threatened. (Comp Gen B-177900 8/2/1973; 5 USC 5706a).
Sound planning and fiscal stewardship must be used when determining the amount of supplies to
be acquired. Emergency supplies will also be limited by the type of emergency (e.g., weather-
related, shelter-in-place).
For shelter-in-place emergencies, it is the employee’s responsibility to have food and water
available. Coast Guard members and employees should have personal safety kits containing
their nonperishable food, water, and other items. These items are not authorized to be purchased
with appropriated funds.
The use of appropriated funds for the purchase of emergency food supplies is authorized when
the employees are required to remain at the unit and may not leave because of danger to their life
(Comp Gen B-189003 7/5/1977).
For natural disaster preparedness (e.g., hurricanes or earthquakes) one key point to remember is
that the food supplies are for the duty section only, not the entire crew. Most if not all of the
crew should be evacuated from the unit. Only a minimal number of critical personnel should
remain.
According to FEMA guidance, the suggested period to plan for residential emergencies is three
days. However, when preparing for emergencies involving Coast Guard facilities, the
anticipated risks should be assessed and actions appropriate for those risks should be taken. For
water, one gallon per day per person is the recommended amount to be stored. During extremely
hot weather, additional water per person may be needed based on the work being performed.
Food supplies should also be sufficient to last for a minimum of three days and must be
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nonperishable. The use of meals, ready-to-eat (MREs) for this purpose is recommended because
they have a long shelf life and are easy to store.
All emergency supplies shall be stored and secured to prevent pilferage or loss. Emergency
supplies shall be inventoried at least semiannually to ensure that adequate supplies are on hand
and that expiration dates have not passed.
5.6.10.10.8 Uncompensated Volunteers
14 USC 504 authorizes the Commandant to enter into cooperative agreements to accept
voluntary services for the maintenance and improvement of natural and historic resources on, or
to benefit natural and historic research on, Coast Guard facilities. The same statute requires the
parties to contribute funds or services on a matching basis to defray the costs of such programs,
projects, or activities.
While there is no express statutory authority to offer meals to volunteers, units may justify
furnishing meals to uncompensated volunteers working on projects for the maintenance and
improvement of natural and historic resources on, or to benefit natural and historic research on,
CG facilities, when their scheduled assignment extends over a meal period.
5.6.10.10.9 Vessel Availability
Appropriated funds may be used to procure meals during emergency yard periods when the
ship’s mess is temporarily unusable or unavailable as a result of the yard period. The general
principles contained in the Federal Acquisition Regulation (FAR) concerning reasonableness of
price and full and open competition provide the appropriate limitations on issuing contracts for
meals.
5.6.10.11 Gifts
In general, there is no statutory authorization to use appropriated funds to purchase gifts, with the
exception of Reception and Representation Funds. This prohibition results from the application
of the necessary expense rule. The use of appropriated funds for the purchase of gifts to foster
goodwill is not permitted unless expressly authorized by Congress. See the Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST 7100.4 (series), Procedure No.
5.6.21.2 (Use of O&S Funds for Awards and Recognition). (Comp Gen B-260260 12/28/95)
5.6.10.12 Insurance
The Federal Government is essentially a self-insurer. Therefore, in the absence of express
statutory authority to the contrary, appropriated funds are not available for the purchase of
insurance to cover loss or damage to Government property or personnel.
The following exceptions to this policy are allowed:
1. Rental vehicle insurance – Members and employees may be reimbursed for the cost of
collision damage waiver insurance, if it is determined that purchase of such insurance is
required by law or procedure in certain foreign countries. The Joint Travel Regulations
(JTR) and the Federal Travel Regulation (FTR) are the principal directives in this area
and must be consulted.
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2. Contractor-required insurance – The FAR and Coast Guard Acquisition Procedures
(CGAP) require contractors to carry minimum amounts of insurance under certain
conditions against the loss of or damage to Government property when in the possession
of contractors.
3. Professional liability insurance – Coast Guard Professional Liability Insurance
Reimbursement (PLIR) Policy, COMDTINST 12800.1 (series), provides the policy
concerning reimbursement of liability insurance for certain Government employees.
4. Liability insurance for child development center operations – Appropriated funds may be
used to obtain liability insurance to protect its nonappropriated assets in the event that an
adverse judgment or settlement is to be paid from NAFs.
5.6.10.13 Kitchen and Coffee Mess Equipment and Supplies
The use of appropriated funds to procure coffee makers, microwave ovens, and refrigerators for
centralized kitchen areas is authorized if the primary benefit of such equipment is for the
Government, and not simply for the personal convenience of the employees.
For 24 hour operations when no Coast Guard Dining Facilities are available and kitchen facilities
are essential for the effective execution of Coast Guard missions, effective immediately,
procurement of kitchen equipment and supplies to include pots, pans, cooking utensils and
tableware with O&S funds, may be authorized if it is necessary for: 1) the efficient performance
of agency activity, and 2) to ensure continual operational status of the Coast Guard.
See Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 5, Procedure No. 5.6.21.5 (Use of O&S Funds for General Kitchen and Coffee
Mess Equipment and Supplies) for proper implementation of this expanded authorized use of
funds. Please note that units must meet a stringent three-part test and document the justification
for these procurements.
5.6.10.14 Lease of Real Property
Periodic payments for real property (including space inside buildings and structures), either
monthly or annually, pursuant to lease agreements (i.e., rent) are made with O&S funds. Such
periodic or rental payments are subject to Coast Guard policy and the availability of
appropriations.
A lease is an agreement conveying the right to use property from one entity (lessor) to another
(the lessee) for a specified period of time in return for payment or a series of payments. Leases
are categorized for the lessee as either a capital or operating lease. The Office of Management
and Budget establishes criteria for which leases are scored for budgetary purposes. If a lease is
scored as a capital lease, the unit shall engage Commandants (CG-831) and (CG-845) for proper
accounting and recording.
Note: The lessor is always a non-Federal entity. Federal agencies cannot “lease” property to
each other and cannot charge another agency “rent”.
One-time, or nonrecurring, expenses associated with the build-out portion of leased facilities are
subject to the availability of appropriations for minor construction in O&S and for the
acquisition, construction, renovation, and improvement of shore facilities. There are several
funding alternatives for executing leasehold build-outs. Commands and planners shall seek the
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advice of their servicing CEU and legal offices prior to entering into leases or contracts which
include leasehold improvements (build-outs). Real property leases shall only be entered into by
a warranted real property specialist. Any leasehold improvements (build-outs) must be
submitted to the servicing CEU/SILC for endorsement and approved by Commandant (CG-43).
Outside of the alternatives available in the GSA Lease Program, the availability of the O&S
appropriation for leasehold build-outs is very limited.
See Section 10.6 (Financial Accounting and Reporting of Capital and Operating Leases) in this
Manual for additional information on leases.
5.6.10.15 Luggage
In very limited and highly unusual instances, the Coast Guard may use appropriated funds to
pay for luggage to be used by its members and employees in the performance of their official
duties. The luggage in question must remain the property of the Coast Guard, and must be
assigned to the user and returned when not in use.
1. The following circumstances must be present and documented prior to any purchase of
this equipment (Comp Gen B-200154 2/12/81):
a. The luggage must be necessary in order for the individual or unit to perform their
mission.
b. The individual or unit must travel extensively in the performance of their duties in
order to carry out its mission.
c. The individuals or team members cannot travel without luggage.
2. For the purpose of this Subsection, the term “travel extensively” is defined by the number
of travel days and the reoccurrence of travel trips. These two together must be
considered prior to authorizing a purchase for luggage. At a minimum, the member must
travel:
a. A minimum of 20 trips per year, and
b. In excess of 140 days per year.
3. Examples of units that may be authorized under this provision are:
a. Training Teams;
b. SAT Teams;
c. STAN Teams.
4. The use of this authority will be certified by a member of the senior command staff and
incorporated into the procurement file.
5.6.10.16 Mascots
While station and unit mascots are a great tradition within the CG, providing support for these
animals does not qualify as a necessary expense that may be charged to O&S funds. All support
costs (e.g., food, veterinary fees) for unit mascots must be borne by individual members of the
unit on a voluntary basis, and must not be charged to appropriated funds.
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5.6.10.17 Membership Fees including recreational memberships
5.6.10.17.1 Membership Fees
Memberships in private and professional organizations may be purchased in the Coast Guard’s
name if:
1. The membership primarily benefits the Coast Guard, and
2. The membership is necessary to carry out an authorized function.
Generally, the benefit to the Coast Guard results from access to publications or information, as in
the case of professional or civic organizations (Comp Gen B-221569 6/2/1986 and
B-240371 1/18/91).
All memberships are subject to the review and approval of HQ office chiefs, district chiefs of
staff, area chiefs of staff, or CO of HQ units, as applicable. The final approving authority will
determine if the membership is necessary in support of the CG mission.
5.6.10.17.2 Recreational Memberships
The purchase of recreational memberships is authorized to provide eligible personnel access to
fitness-center-type equipment when it is not reasonably available at the installation. Eligibility is
defined in Coast Guard Morale, Well-Being, and Recreation Manual, COMDTINST M1710.13
(series).
Memberships in the name of the command are authorized for use by eligible patrons of the
MWR program, considering the prioritized eligible patron listing as contained in Coast Guard
Morale, Well-Being, and Recreation Manual, COMDTINST M1710.13 (series).
Advance payment for gym memberships is not authorized. Units should exercise care to ensure
compliance with 31 USC 3324(a). For further reference, see Comp Gen B-237789 12/10/99;
Comp Gen B-288013 12/11/01; and the GAO “Red Book”, Volume I, Chapter 4, Section 12a.
Memberships will be approved in the same manner and using the same criteria as memberships
to professional or civic organizations previously discussed in Subsection 5.6.10.17 (Membership
Fees including recreational memberships) of this Manual.
Golf memberships will not be purchased with O&S funds, except as noted in
Subsection 5.6.10.17 (Membership Fees including recreational memberships) of this Manual.
5.6.10.18 Military Exchange Facilities as Sources of Supply
Coast Guard units are authorized to consider Coast Guard and DOD exchanges as a possible
source of supply for purchases (14 USC 713). The requirements regarding distribution of micro-
purchasing as outlined in FAR 13.202 must still be followed.
5.6.10.19 Personal Expenses and Furnishings
Items that are personal expenses or personal furnishings may not be purchased with appropriated
funds. Examples include, but are not limited to:
1. Business cards (except for designated recruiters);
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2. Nonessential medical care;
3. Personal qualification expenses;
4. Seasonal greeting cards; and
5. Coffee cups (except for authorized CGDFs).
Personnel are encouraged to review 4.C.13 of Principles of Federal Appropriations Law
(commonly referred to as the GAO “Red Book”) for additional guidance.
5.6.10.20 Promotional Items
As a matter of Coast Guard Policy, the purchase of promotional items is prohibited with
appropriated dollars except when Coast Guard has specific statutory authority to do so. For
example, U.S Code Title 14 § 468 allows for the Coast Guard to expend O&S funds for
recruiting activities in order to obtain recruits for the Service and cadet applicants. The general
policy is that Coast Guard units cannot expend appropriated funds for promotional items and
give these items to members of the public. This prohibition includes whistles, key rings, t-shirts,
books, hats and other items even if they are marked with Coast Guard emblems safety messages
and/or slogans.
5.6.10.21 Savings Bonds
Although Commandant (CG-0944) has determined that the purchase of savings bonds falls
within the legal parameters of 14 USC 2747, recent guidance from DHS and the Department of
Treasury’s new requirement to only allow savings bond purchases through Treasury Direct has
required CG to rewrite the policy. Effective immediately, our “Enlisted Person of the Quarter”,
“Sailor of the Quarter”, and other award programs will no longer be allowed to be awarded
savings bonds.
5.6.10.22 Traditional Ceremonies
Nonpersonal expenses that are customarily incurred incident to traditional ceremonies are
payable from appropriated funds. The charges allowed for change of command ceremonies must
be linked directly to the ceremony itself and not any reception that follows.
All expenses related to a reception are considered personal expenses and are not payable
with appropriated funds.
5.6.11 Research & Development (R&D) – Financial Management Operation
Plan (FMOP)
The R&D appropriation provides funding for applied scientific research & development. This
includes funds for pay, allowances, and related personnel support costs, as well as the
maintenance, rehabilitation, lease, and operation of related facilities and equipment. Prior to
Fiscal Year 2012, R&D funds were typically available until expended (no-year funds). In Fiscal
Years 2012 and 2013, R&D funds were appropriated to remain available for five years. Starting
in Fiscal Year 2014 R&D funds were appropriated to remain available for three years.
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The R&D appropriation account may also be credited with receipt from State and local
governments, other public authorities, private sources and foreign countries for the expenses
incurred for research & development.
Since the obligation of significant amounts of R&D funds is dependent upon the timing of
research contract awards and associated upper-level management review and approval, close
attention must be given to the anticipated award dates of these procurements when the financial
plan is developed so that end-of-year carryovers are minimized.
5.6.11.1 Function of the Research & Development (R&D) Program
The R&D Program is the Coast Guard resource for scientific knowledge and capabilities that
provides adaptive research, development, testing, analysis, and technology solutions for the
maritime environment to enhance asset acquisition and mission execution.
5.6.11.2 Research & Development (R&D) Appropriation
The R&D Appropriation was established and authorized by Congress as a specific appropriation
for research & development of technologies, materials, and human factors directly relating to
improving the performance of the Coast Guard's missions. The purpose of the R&D Program is
to help identify and examine existing or impending problems in the Coast Guard’s operational,
regulatory, and support programs; and make improvements through solutions based on
scientific and technological advances. R&D funding also supports risk-reduction expertise and
services in the pre-acquisition process for acquisition projects. The majority of R&D funds are
executed by the Research and Development Center ( RDC).
It is important to distinguish between R&D and other more general appropriations because the
R&D appropriation is a specific appropriation. Federal Appropriations Law specifies that if a
federal agency has a specific appropriation (such as R&D) for a particular budget item and also
has a general Appropriation (such as O&S), which is broad enough to cover the same budget
item, the specific appropriation must be used exclusively. As provided for by Congress, R&D
activities include the RDC’s formulation and oversight of cooperative agreements
(Cooperative Research Agreements, Academic Research Agreements, Interagency
Agreements, and MOUs) with relevant professionals in the public and private sectors, such as
University Affiliated Research Centers (UARC) and Federally Funded Research and
Development Centers (FFRDC). R&D funding provides for all Coast Guard salaries
associated with this type of work.
In addition to entering into reimbursable agreements with other agencies, the RDC can also
execute projects in support of other Coast Guard appropriations when the specific R&D
appropriation is not required. The RDC staff includes O&S, PC&I, and Reimbursable funded
billets to support work benefiting these particular appropriations. This allows the Coast Guard
enterprise to leverage the unique scientific and subject matter expertise that resides at the RDC
for certain non-R&D projects. Table 5.2 (Appropriation Matrix) provides guidelines to ensure
proper use of R&D funds and to assist in making the determinations of how projects should be
funded. The appropriate use of funding is determined by RDC’s Resource Board and is
documented in a memo, and endorsed by a Commandant (CG-LGL) designated attorney for
each project. This documentation is commonly referred to as a “Determination and
Findings” memorandum.
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Externally funded RDC projects require a technical and cost proposal be submitted to the
non-R&D Sponsor. The Sponsor has to agree to the work to be completed and the amount of
funding they will be required to provide. They are also required to certify the purpose of the
funding being appropriate for the defined work. It is the responsibility of each of the fund
managers to ensure the appropriate use (appropriation) for every project executed by the RDC.
These non-R&D projects are considered reimbursable agreements and must follow the
Economy Act and Commandant (CG-8) reimbursable guidance.
The table that follows is the guideline to be used by RDC’s Resource Board to recommend
if R&D or another appropriation should fund a project. As stated above, the R&D
appropriation is a specific appropriation and must be used if the project falls into the
defined purpose for the appropriation. Therefore, the general approach to using the table is
to determine if the project is appropriate for R&D funding first. If not, then the appropriate
type of funds to be used is determined.
Table 5.2 Appropriation Matrix
Purpose of Work Appropriation
Adding to general R&D knowledge base.
Assessing state of technology in broad areas.
Future technology investigation type activities.
Knowledge for knowledge sake.
R&D
R&D research to gain fundamental knowledge of
scientific/engineering principles & phenomena.
R&D
R&D exploratory development to evaluate/demonstrate
feasibility & practicality of a technology to meet
mission needs. Effort yields rudimentary “proof of
concept” systems, methods to support decisions to
pursue further development.
R&D
Research, development and testing of concepts,
technology, analytical tools or methods for the
purpose of determining potential for use as an
improvement in addressing requirements.
R&D
Testing to support acquisition programs.
O&S or PC&I
Supporting Operational Requirements Development
(ORD) for the purpose of identifying operational
mission performance gaps.
O&S
Supporting Mission Analysis Report (MAR)
development including modeling and simulation,
metrics development, etc.
O&S or PC&I
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Purpose of Work Appropriation
Supporting acquisition document development such
as Alternative Analyses, Independent Cost Estimates,
etc.
PC&I
5.6.11.3 Administration of R&D Funds
R&D funds are administered by Commandant (CG-926) at two locations: Headquarters and the
RDC.
The R&D program manager of resources at Headquarters oversees all R&D funds. The
administration and execution of the funds are performed at the RDC.
5.6.11.4 Authorized Uses of R&D Funds
R&D funds, as elaborated in the Table 5.2 (Appropriation Matrix) above, may be used for the
following specifically defined purposes:
1. R&D technology-base building – This involves technology scans, forecasts, or
assessments that produce a base of agency knowledge to support applied R&D efforts
5-15 years hence. This category facilitates the R&D Program’s obligation to
systematically develop and maintain knowledge that can bring the latest technological
advances to the attention of sponsors. All such efforts must align with the Coast Guard’s
R&D strategy and goals.
2. R&D applied research – Applied science with the systematic expansion and application
of knowledge to develop useful materials, devices, and systems or methods. It may be
oriented, ultimately, toward the design, development, and improvement of prototypes and
new processes to meet general mission areas. An example is research to determine the
physiological effects leading to boat crew fatigue.
3. R&D exploratory development – The systematic use of the knowledge of scientific or
engineering phenomena/principles in the initial stages of producing or adapting
technology new to an intended Coast Guard application. This is performed to establish
some confidence that the proposed technology can address the pertinent mission
requirement. Its distinguishing characteristic is the goal of evaluating and demonstrating
the feasibility and practicality of the technology in meeting the mission requirement.
Specific activities include analytical modeling, simulation, or the minor-scale production
of methods, procedures, or systems. The effort produces relatively low cost,
rudimentary, or “proof of concept” systems, methods, or procedures to support decisions
as to whether the technology shows sufficient promise to warrant the additional cost of
advanced development. An example is the exploration of a new lamp technology for
short-range aids that promises to produce the same amount of light at lower power
requirements.
4. R&D advanced development – This begins once the proposed technology’s feasibility
and practicality have been sufficiently established to warrant further development for
experimental use within an actual or simulated operational environment. Specific
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activities include extensions or upgrades of the analytical modeling or simulation, or the
fuller production of methods, procedures, or system hardware/software. The
distinguishing characteristic of this category is the goal of further evaluating and
demonstrating technology for test or experimentation, rather than producing technology
designed and engineered for eventual service use. R&D advanced development is a
follow-on activity to exploratory development. In advanced development, the level of
effort is established so that at completion of this effort, uncertainty regarding the
functional capability of the new technology has been eliminated. An example is the
adaptation of solar power technology to the rigors of the marine environment typical to
lighted ATON, especially buoys.
5. R&D test and evaluation (T&E) – This is performed to confirm the results of the
research and/or development stages of a program, project, or activity (PPA), and to verify
that the effects on the Coast Guard will be those desired. Rather than comprising a
separate category of research and development, T&E is an inherent part of all of the
categories defined above – it is a logical outflow of the work performed in each.
Research T&E involves the systematically planned establishment of conditions from
which data can be collected, assembled, and analyzed. Exploratory Development T&E
involves the collection and analysis of data to determine feasibility and practicality.
Advanced Development T&E involves the collection and analysis of data to establish
suitability for Coast Guard uses.
6. Personnel compensation, benefits, and related administrative costs for R&D billets
and positions – This provides the support structure required to execute the entire Coast
Guard R&D Program. It provides the strategic planning, programming, management,
and support personnel, material, resources, and leased facilities for the execution of the
Coast Guard R&D Program, including:
a. Military and civilian personnel compensation and benefits;
b. Travel and transportation of persons and transportation of materiel;
c. Rental/lease payments;
d. Communications, utilities, and miscellaneous charges;
e. Printing and reproduction;
f. Advisory, assistance, and other services;
g. Research and development contracts;
h. Subsistence and support of persons (military dependents);
i. Supplies and materials; and
j. Equipment.
5.6.11.5 R&D Funding Responsibilities
R&D Program authority for funding research areas is established as part of the budget
formulation process. Once research areas are identified and included in DHS’ Resource
Allocation Plan (RAP) and placed in the DHS Stage R&D budget, they are deemed appropriate
areas for use of R&D funding.
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5.6.11.5.1 Completed R&D Products
Procedures for formal operational delivery of R&D products are contained in the Strategic
Project Portfolio Alignment (SPPA) Standard Operating Procedure. Pending formal product
delivery, R&D retains funding responsibility for the project. Funding shortfalls must be covered
by R&D funds and may not be supplemented from other appropriations without a
Congressionally approved transfer from another appropriation in accordance with the most
recent appropriations act.
5.6.11.6 Project Targets
Project targets are provided to the RDC and any other administrative target field unit performing
R&D support. Funds are transmitted for each effort assigned, or as needed to support ongoing
field activity. Despite the multi-year character of prior year R&D funds, field ATU management
of R&D resources shall ensure timely obligation of funds consistent with R&D plans. ATUs
should note delays, scheduling problems, and/or insufficient funding early, so that adjustments
may be made and funds reallocated as necessary.
5.6.11.6.1 Research and Development Center (RDC)
Funds earmarked for specific project efforts and administrative expenses are provided to the
RDC by project targets, with modifications based on a yearly RDC allocation. Plans are
approved by Commandant (CG-92) for funds budgeted toward RDC salaries and administrative
expenses.
The RDC shall report to Commandant (CG-926) and Commandant (CG-831) on anticipated
year-end unobligated balances, funds greater than needs, and additional funds needed for project
(including administrative expenses). Accompanying each report shall be a brief explanation of
the variance and corrective action recommended.
5.6.11.7 Funding Basis for R&D
For purposes of these guidelines, the R&D appropriation is considered one budget line item;
however, the R&D Section of the Coast Guard Congressional Stage Budget may contain several
project or performance areas.
5.6.11.8 Shared Costs
Coast Guard appropriations (e.g., O&S and PC&I) can fund common or shared requirements
with the R&D appropriation. This includes mutually beneficial items like rental of equipment
and procurement of materials.
5.6.11.9 Billet/Positions Related to RDC Reimbursable Projects
RDC has a detailed system that is used for project billing, accounting, and staff/workforce
management that specifically includes member/employee's time spent per project (commonly
referred to as labor costs). RDC shall manage total labor cost across all projects to ensure it
approximately reflects the funding structure of all RDC billets. This allows personnel with
specific expertise to work across all projects types without regard to billet/project funding
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mismatches. For example, labor costs associated with reimbursable agreements shall make up
approximately 10 percent of the total RDC labor costs if reimbursable funded billets make up 10
percent of the total RDC billets. When it is not initially evident, labor costs for determination and
findings shall be counted as R&D funded work.
Actual labor cost and billet funding structure shall be reviewed periodically to ensure
approximate alignment with anticipated workload.
R&D funded billets and positions at Coast Guard Headquarters are allowed to expend time on
projects funded by other appropriations during their normal management oversight duties. If
R&D funded members/employees have any concerns on the amount of time spent on a project
funded by another appropriation they should contact Commandant (CG-83) and Commandant
(CG-LGL) for advice.
5.6.12 Procurement, Construction, and Improvement (PC&I) – Purpose
The PC&I capital investment program provides funding for the procurement, construction,
rebuilding, or improvement of the Coast Guard’s vessels; Command, Control Communications,
Computers and Information Technology (C4IT); ATON; related equipment; and shore plant.
The term “shore plant” includes real property under the control of another Federal agency. This
Subsection outlines guidelines for the execution of the PC&I appropriation.
In the event that an urgent operational requirement project, which should be properly funded
with PC&I, is deemed by Commandant (CG-00) to be higher in priority than projects in the
current FY PC&I budget, the Commandants (CG-4), (CG-7), (CG-8), and (CG-9) staffs will
explore all lawful means to fund this operational requirement. These strategies may include, but
are not limited to: deferring other budgeted PC&I projects, requesting authority to reprogram
funds within the PC&I appropriation, or requesting authority to transfer funds from another CG
appropriation.
5.6.12.1 PC&I Appropriation
Congress typically authorizes and makes a lump sum appropriation for necessary expenses of
acquisition, construction, renovation, and improvement of aids to navigation, shore facilities,
vessels, and aircraft, including equipment related thereto. Congress further makes specific
appropriations within the PC&I lump sum based upon specific purpose, amount, and period of
availability. The historic specific PC&I appropriation structure has included:
1. Vessels;
2. Aviation capability;
3. Shore facilities and ATON;
4. Other equipment;
5. Personnel compensation and benefits; and
6. The Integrated Deepwater System program. (The Coast Guard's Integrated Deepwater
System (IDS) was only used for FY2002-FY2011 appropriations. IDS assets are now
included as part of Coast Guard’s current $27 billion recapitalization investment
portfolio, which includes more than 20 major acquisition programs and projects managed
by Commandant (CG-9).)
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Specific PC&I appropriations made in recent appropriation acts have included amounts provided
to:
1. Acquire, repair, renovate, or improve vessels, and related equipment;
2. Other equipment;
3. Shore facilities and aids to navigation facilities;
4. Personnel compensation and benefits and related costs; and
5. The Integrated Deepwater System program.
Although Congress has historically made independent specific appropriations for vessels and for
aviation capability, in recent years it has instead made further specific appropriations under the
Integrated Deepwater System appropriation for aircraft and for surface ships.
Congress may choose to return to the historic structure in any fiscal year.
Every attempt is made to comply with Congressional intent within the limits of existing fiscal,
acquisition, and other laws. Once funds are appropriated through an appropriations act,
Commandant (CG-83) coordinates with OMB to distribute the PC&I funds to individual project
accounts. Supplemental appropriations often have different formats and execution guidelines
than annual appropriations and must be carefully reviewed before obligating the funds.
5.6.12.2 PC&I Category Definitions
PC&I category definitions (e.g., Vessels, Aircraft, Shore, and Other Equipment) are used to
make correct PC&I – O&S funding determinations. O&S, to include AFC-30 and AFC-4X
funding streams, fundamentally differs from PC&I funding. O&S funds are expressly designated
to support current assets or to make relatively minor adjustments to them (unless otherwise
authorized by law). AFC-30 covers unit-level operations and maintenance. AFC-4X specifically
provides nonrecurring maintenance, repair, alterations, and renewal to assets in order to achieve
their full economic life. The PC&I program primarily supports the acquisition of assets, or
major construction and improvements that increase the capacity/capability of an asset.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.6 (Procurement, Construction,
and Improvement (PC&I)) for detailed PC&I category definitions.
5.6.12.3 General PC&I Terms
The following terms provide general guidance when determining whether to use funds from the
PC&I or the O&S appropriation. The Shore PC&I program provides more specific guidance,
due to project complexities which require a detailed breakdown by work category. Where more
specific definitions exist, PC&I/O&S funding determinations must reflect these more rigorous
standards.
5.6.12.3.1 Maintenance
Maintenance is the act of keeping fixed assets in usable condition. It includes preventive
maintenance, normal repairs, replacement of parts and structural components, and other activities
such as programmed depot-level maintenance (PDM) needed to preserve the asset so that it
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continues to provide acceptable service and achieves its expected life. Maintenance excludes
activities aimed at expanding the capacity of an asset or otherwise upgrading it to serve needs
different from, or significantly greater than, those originally intended. See SFFAS No. 6,
Accounting for Property, Plant, and Equipment.
Note: To determine if work expands an assets capability or capacity the asset recorded in the
accounting system of record must be considered. For example, if the parent asset is a Coast
Guard aircraft, then a $1.4 million aircraft engine assembly is a spare part and used in
maintenance, therefore the purchase of the engine would be classified as operating materials and
supplies and could be properly procured with O&S funds.
5.6.12.3.2 Improvement
An improvement is an increase in capacity, capability, or useful and service life of an existing
vessel, aircraft, ATON, C4IT higher level assemblies (HLA), or real property facility or other
asset.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.6 (Procurement, Construction,
and Improvement (PC&I)) for a breakdown of PC&I work categories and procedures and
requirements related to the following:
Step
Topic
5.1
PC&I Work Categories – Vessels
5.2
PC&I Work Categories – Aircraft
5.3
PC&I Work Categories – Other Equipment Related to Vessels, Aircraft, Shore
Facilities, ATON, and Electronic Systems
5.4
PC&I Work Categories – Shore Facilities/Aids to Navigation (ATON)
5.6.12.4 Concurrent PC&I and O&S Projects
In order to maintain a clear distinction between funding sources and avoid the mixing of
appropriations, concurrent PC&I- and O&S funded construction, renovation, and improvement
projects should normally not be undertaken in the same structure, vessel, or contiguous area.
When it is believed that the execution of concurrent projects may be beneficial to the Coast
Guard, project managers will obtain approval from Commandant (CG-8), or its designee, prior to
execution. As a general rule, O&S improvement or renovation projects in shore facilities should
not be started within the 12 month period following the completion of an PC&I project.
5.6.12.5 PC&I Payroll Expenses
PC&I has a specific annual appropriation to fund “personnel compensation and benefits and
related costs.” For this reason, the annual PC&I personnel compensation appropriation, rather
than multi-year project funds, must be used to fund all PC&I-related personnel costs, including
other temporary personnel augmentations related to project execution.
Commandant (CG-8) may approve the use of project funds from a supplemental appropriation to
pay for personnel costs relating to a specific unplanned project mandated by Congress. This
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approval will only cover personnel costs from the time the supplemental is enacted until the
personnel costs can be factored into the next budget formulation cycle.
5.6.13 Reserve Training (RT) – General Responsibilities
RT funds (AFC-90) provide for the operation, recruiting, training, administration, and
management of the Reserve Component in accordance with the Reserve Policy Manual,
COMDTINST M1001.28 (series), to include costs associated with:
1. Active Duty for Training (pay and travel);
2. All Inactive Duty training to include berthing as required;
3. Active duty operational support in support of the reserve component (ADOS-RC);
4. All SELRES accession training (i.e. ROCI, DEPOT, and Boot Camp);
5. Reserve authorizations to receive health care (e.g. ADHC or NOE);
6. Short-term Medical Hold orders linked to Reserve Training orders;
7. Incapacitation pay (INCAP); and
8. Enlisted bonuses.
Administrative costs for RT-funded military and civilian Full-Time Support (FTS) positions are
covered by Personnel Support Cost (PSCR) and Selected Reserve members are covered by
Personnel Support Cost– Reserve (PSC-R) distributed via AFC-30. ATUs are provided PSCR
funding by RT apportioned at the Headquarters level and specified in annual targets. Upon
receipt of the annual targets, the quarterly operating guide is established by program element in
the system of accounts. Drill pay, and other inactive duty allowances for initial uniform issuance
and benefit programs are administered at the Headquarters level. RT funds necessary to cover
certain other program costs chargeable to AFC-01 and AFC-08 are charged to the RT
appropriation while AFC-20, AFC-30, AFC-56, and AFC-57 are reimbursed to the O&S
appropriation through the RT to O&S refund administered through the Coast Guard Refund
Program under the authority of 31 USC 1534. The Reserve Training program will refund the
O&S appropriation according to Non-Pay Refund policy and procedures.
5.6.14 Environmental Compliance and Restoration (EC&R)
The Coast Guard Authorization Act of 1989 (PL 101-225) created the Coast Guard
Environmental Compliance and Restoration Program and Appropriation (14 USC 318). The
Consolidated Appropriations Act, 2019 (PL 116-6) changed EC&R from a standalone
appropriation to a program/project/activity (PPA) within the Operations and Support (O&S)
appropriation. The purpose of the EC&R PPA is to carry out a program of environmental
compliance and restoration at all current and former Coast Guard facilities. The program
involves the identification, investigation, and cleanup of contamination from hazardous
substances and pollutants on Coast Guard buildings and structures, for the purpose of complying
with environmental laws to prevent contamination or to preclude an environmental liability.
14 USC 318 states that the Secretary shall carry out a program of EC&R at current and former
Coast Guard facilities, and those EC&R Program goals include:
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1. Identifying, investigating, and cleaning up contamination from hazardous substances and
pollutants.
2. Correcting other environmental damage that poses an imminent and substantial danger to
the public health or welfare or to the environment.
3. Demolishing and removing unsafe buildings and structures, including buildings and
structures at former Coast Guard facilities.
4. Preventing contamination from hazardous substances and pollutants at current Coast
Guard facilities.
The goals above provide the framework within which the Coast Guard’s EC&R program
functions. In addition, 14 USC 318 also provides definitions to guide the Coast Guard in
application of its EC&R activities. For example, the definition of “facilities” specifically
excludes “vessels”; therefore, Coast Guard expenses related to vessel environmental compliance
should not be charged to the EC&R PPA but rather are properly charged to other PPAs within
O&S. This is wholly consistent with the legislative history of the EC&R program which focused
onshore facilities. However, although Congress recognized a “vessel” exclusion, 14 USC 318
specifically states that the Coast Guard must respond to releases of hazardous substances and
pollutants on vessels.
5.6.14.1 Definitions
environment – means (A) the navigable waters, the waters of the contiguous zone, and the
ocean waters of which the natural resources are under the exclusive management authority of
the United States under the Magnuson-Stevens Fishery Conservation and Management Act
[16 USC 1801 et seq.], and (B) any other surface water, groundwater, drinking water supply,
land surface or subsurface strata, or ambient air within the United States or under the jurisdiction
of the United States.
environmental cleanup, closure, and/or disposal costs – for financial statement reporting
purposes and EC&R management, the term “environmental cleanup costs” includes costs
associated with environmental restoration of environmental sites, corrective actions, and
environmental costs associated with the future closure of operations, including closure and
disposal of property, plant, and equipment (PP&E). These costs include the costs of researching
and determining the existence of hazardous waste; removing, containing, and/or disposing of
hazardous waste from personal or real property; and/or personal or real property that consist of
hazardous waste at the time of shutdown or disposal. Cleanup costs may include, but are not
limited to, decontamination, decommissioning, site restoration, site monitoring, closure, and
post-closure costs related to Coast Guard operations that result in hazardous waste. This is
consistent with the definition of environmental cleanup costs per SFFAS No. 6, Accounting for
Property, Plant, and Equipment.
facility – means (A) any building, structure, installation, equipment, pipe or pipeline (including
any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment,
ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or (B) any site or area
where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise
come to be located; but does not include any consumer product in consumer use or any vessel
[CERCLA Section 101 (9)].
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hazardous substance – 1.) means (A) any substance designated pursuant to Section
311(b)(2)(A) of the Federal Water Pollution Control Act, (B) any element, compound, mixture,
solution, or substance designated pursuant to Section 102 of this Act, (C) any hazardous waste
having the characteristics identified under or listed pursuant to Section 3001 of the Solid Waste
Disposal Act (but not including any waste the regulation of which under the Solid Waste
Disposal Act has been suspended by Act of Congress), (D) any toxic pollutant listed under
Section 307(a) of the Federal Water Pollution Control Act, (E) any hazardous air pollutant listed
under Section 112 of the Clean Air Act, and (F) any imminently hazardous chemical substance
or mixture with respect to which the Administrator has taken action pursuant to Section 7 of the
Toxic Substances Control Act. The term does not include petroleum, including crude oil or any
fraction thereof which is not otherwise specifically listed or designated as a hazardous substance
under Subparagraphs (A) through (F) of this Paragraph, and the term does not include natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of
natural gas and such synthetic gas) [CERCLA Section 101 (14)].
hazardous substance – 2.) also means oil of any kind or in any form, including, but not limited
to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil
from the definitions of the Clean Water Act codified at 33 USC § 1321.
hazardous waste – per SFFAS No. 6, Accounting for Property, Plant, and Equipment, the
definition of hazardous waste used in conjunction with environmental cleanup costs defined
above is: a solid, liquid, or gaseous waste, or combination of these wastes, which because of its
quantity, concentration, or physical, chemical, or infectious characteristics, may cause or
significantly contribute to an increase in mortality or an increase in serious irreversible, or
incapacitating reversible, illness or pose a substantial present or potential threat to human health
or the environment when improperly treated, stored, transported, disposed of, or otherwise
managed. As noted in Technical Bulletin 2006-1, the term “hazardous waste” as defined in
SFFAS No. 6, Accounting for Property, Plant, and Equipment, was developed by consulting
environmental laws such as the Resource Conservation Recovery Act (RCRA); however, the
general use of the term in Federal accounting standards should not be construed as limiting the
application of the standards solely to those materials meeting the definition of “hazardous waste”
under RCRA.
pollutant or contaminant – 1.) shall include, but not be limited to, any element, substance,
compound, or mixture, including disease-causing agents, which after release into the
environment and upon exposure, ingestion, inhalation, or assimilation into any organism, either
directly from the environment or indirectly by ingestion through food chains, will or may
reasonably be anticipated to cause death, disease, behavioral abnormalities, cancer, genetic
mutation, physiological malfunctions (including malfunctions in reproduction) or physical
deformations, in such organisms or their offspring; except that the term "pollutant or
contaminant" shall not include petroleum, including crude oil or any fraction thereof which is not
otherwise specifically listed or designated as a hazardous substance under Subparagraphs (A)
through (F) of Paragraph (14) and shall not include natural gas, liquefied natural gas, or synthetic
gas of pipeline quality (or mixtures of natural gas and such synthetic gas) [CERCLA Section 101
(33)].
pollutant – 2.) also means dredged spoil, solid waste, incinerator residue, sewage, garbage,
sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, heat,
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wrecked or discarded equipment, rock, sand, cellar dirt and industrial, municipal, and
agricultural waste discharged into water. This term does not mean (A) “sewage from vessels or a
discharge incidental to the normal operation of a vessel of the Armed Forces” within the
meaning of 33 USC § 1322; or (B) water, gas, or other material which is injected into a well to
facilitate production of oil or gas, or water derived in association with oil or gas production and
disposed of in a well, if the well-used either to facilitate production or for disposal purposes is
approved by authority of the State in which the well is located, and if such State determines that
such injection or disposal will not result in the degradation of ground or surface water resources,
from the definitions of the Clean Water Act codified at 33 USC § 1321.
preventing contamination – the Coast Guard ED&R PPA is used for those actions necessary to
prevent contamination from hazardous substance, hazardous waste and other pollutants or
contaminants that could create environmental liabilities at current Coast Guard facilities.
release – means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing into the environment (including the
abandonment or discarding of barrels, containers, and other closed receptacles containing any
hazardous substance or pollutant or contaminant), but excludes (A) any release which results in
exposure to persons solely within a workplace, with respect to a claim which such persons may
assert against the employer of such persons, (B) emissions from the engine exhaust of a motor
vehicle, rolling stock, aircraft, vessel, or pipeline pumping station engine, (C) release of source,
byproduct, or special nuclear material from a nuclear incident, as those terms are defined in the
Atomic Energy Act of 1954 [42 USC 2011 et seq.], if such release is subject to requirements
with respect to financial protection established by the Nuclear Regulatory Commission under
Section 170 of such Act [42 USC 2210], or, for the purposes of Section 9604 of this title or any
other response action, any release of source byproduct, or special nuclear material from any
processing site designated under Section 7912(a)(1) or 7942(a) of this title, and (D) the normal
application of fertilizer.
5.6.14.2 Policy
The EC&R PPA is the proper source of funding for the following Coast Guard remedial actions:
responding to contamination, correcting environmental damage, and demolishing and removing
structures due to contamination i.e. “restoration” work on current or former Coast Guard
properties and structures (facilities) contaminated by Coast Guard releases of hazardous
substances and pollutants.
Specifically, the EC&R PPA shall be used for:
1. Actions required to cleanup contamination from hazardous substances and pollutants,
correct environmental damage and otherwise reduce or eliminate real property
environmental liabilities including:
a. Site investigations and other similar studies for the purpose of confirming and
characterizing contamination and developing potential remedial action strategies;
b. Development of Engineering Evaluations and Cost Analysis (EE/CA);
c. Site cleanup and removal actions;
d. Reporting and record generation;
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e. Long-term monitoring (LTM); and
f. All other efforts and initiatives required to satisfy the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA), including efforts to satisfy
any applicable or relevant and appropriate requirements (ARARs), relating to the
Resource Conservation and Recovery Act (RCRA), other Federal statutes, or any
State or local requirements which are legally applicable to the proposed restoration.
2. Responding to releases of hazardous substances and pollutants at Coast Guard facilities
or on Coast Guard vessels.
3. Demolition and removal of unsafe buildings and structures, including buildings and
structures at current and former Coast Guard facilities where there is an existing or
impending release of a hazardous substance or contaminant; the sole purpose of the
demolition and removal actions is to meet or maintain environmental compliance and
prevent pollution; and the demolition is not part of a larger Procurement, Construction,
and Improvement (PC&I) appropriation funded action such as the demolition of a
building to install a new building.
4. Projects and activities required to prevent contamination (this refers to achieving
compliance as opposed to maintaining compliance) from hazardous substances and
pollutants including:
a. Costs for legally required asbestos remediation and lead-based paint abatement
“released or in danger of being released” into the environment, for the sole purpose of
complying with the environmental law.
b. Hard engineering fixes (physical changes) that encompass a four-part test:
i. The expense must be for a physical change to an asset, including the cost of any
study or design necessary to effect the change;
ii. The physical change must be driven by a new (less than 5 years old) Federal,
State, or local environmental law, regulation, or executive order;
iii. Compliance with the environmental law, regulation, or executive order must be
the main reason for undertaking the project at the time of executing the work; and
iv. The hard engineering fix must not be part of or linked to a larger PC&I funded
initiative, where EC&R funding is used to supplement the PC&I project funding
5. Salaries, benefits, and related costs for EC&R billets.
6. Support and management costs required solely for the purpose of executing specific
EC&R funded actions (e.g., training, travel, regulatory agency review & support costs,
and statutory/regulatory required reporting).
7. TEST: What is the primary purpose of the action?
The foundation underlying Coast Guard EC&R policy is the distinction between
expenses to bring Coast Guard facilities into compliance vice regular or routine expenses
to maintain Coast Guard facility compliance with environmental laws, regulations,
executive orders, and Departmental and Organizational environmental directives and
policies. It is important to note that there are many recurring “compliance” activities that
the Coast Guard performs on a regular or routine basis that do not rise to the level of the
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EC&R program goals. For example, managing and disposing of “as-generated”
hazardous waste (that is, hazardous waste derived from Coast Guard’s on-going industrial
processes) and universal and other regulated waste - including solid waste, maintaining,
creating, and submitting environmental data and reports, permit compliance activities,
such as sampling, testing and analysis of discharges of air and water, monitoring and
inspection of unit operational activities, recycling and similar waste reduction and
pollution prevention activities, and similar regular and recurring unit activities and
initiatives required to sustain regulatory compliance on a continual basis. However, there
are similar environmental compliance actions that should be appropriately charged to the
EC&R PPA and not to the O&S appropriation. For example, costs for legally required
asbestos remediation and lead-based paint abatement “released or in danger of being
released” into the environment, for the sole purpose of complying with the environmental
law.
8. For practical application of the policy above, the following test question must be applied:
What is the primary purpose of the action?
If it is a program, project or activity “solely” to achieve compliance with a new (less than
five years old) Federal, State, tribal, territorial, or local environmental requirements it
must be charged to the EC&R PPA. However, if the program, project or activity is to
achieve compliance with a more than five-year-old Federal, State, tribal, territorial, or
local environmental requirement or compliance with environmental requirements is
incidental to the primary purpose of normal maintenance and repair (or lack of
maintenance and repair) of real and personal property, and/or replacement of equipment,
the EC&R PPA shall not be charged. For example, if abatement (e.g., asbestos removal)
is performed as part of, or in conjunction with, a maintenance, repair, or construction
project, or if an a Spill Prevention, Control, and Countermeasure (SPCC) plan is required
because of the installation of a new storage tank, the PPA funding for the project shall be
used. If equipment is being replaced because it has reached the end of its service life,
even though the replacement equipment may result in a reduction of the amount of
regulated waste generated, the elimination of an ozone-depleting substance, or otherwise
assist with meeting environmental regulatory requirements, the equipment replacement
shall be funded from PC&I or another PPA within the O&S appropriation, depending on
the requirements and costs. However, if the equipment is being replaced solely to meet
new environmental regulatory requirements, it shall be funded from EC&R.
9. All Coast Guard offices and employees charged with managing appropriated funds shall
adhere to this policy.
10. All Coast Guard units and personnel are responsible for proper stewardship of the
public’s money. There are a wealth of resources for units unsure of the proper funding
source for a particular action. Contact subject matter experts in the Shore Infrastructure
Logistics Center Environmental Management Division, the Coast Guard Office of
Environmental Management (CG-47), or the supporting legal office. If doubt still exists,
a determination of funds request should be submitted to Commandant (CG-83, CG-84,
CG-LGL).
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5.6.14.3 Releases and Environmental Emergencies
1. Initial spill response and containment, including clean-up, disposal, and reporting
requirements is a unit operational responsibility funded under an O&S PPA other than
EC&R.
2. Emergency response/removal actions beyond the technical capabilities of the unit would
be handled via Depot-Level mission support and would be funded with EC&R.
3. Any residual remediation and/or long-term management (LTM) resulting from spills and
releases (i.e. additional or long-term soil remediation, groundwater monitoring) would be
managed as depot-level activity funded with EC&R.
5.6.14.4 Contamination at PC&I Project Sites
1. For PC&I funded actions project work, all costs associated with determining whether a
proposed project site may be potentially contaminated (e.g., borings, sampling, and
analysis) shall be funded from PC&I Survey and Design (S&D) PPA as part of the
normal PC&I project planning process. Upon receipt of the PC&I project funds, any non-
time critical environmental remediation requirements shall then be funded as part of the
project costs. This would include CERCLA remedial design and action requirements (or
Resource Conservation & Recovery Act (RCRA) equivalent) within the project footprint
shall then be funded as part of the project costs. Site remediation work funded by PC&I
project funding shall be limited to the footprint of the PC&I project work (i.e., that
remediation necessary to proceed with the project work). Any identified site
contamination that extends beyond the footprint of the PC&I project work (i.e., not
required to proceed with the PC&I project work) would be funded with EC&R funding,
either concurrent with/in conjunction with the PC&I funded remediation work and/or via
separate/ follow on remediation work funded with EC&R.
2. If PC&I project planning (survey & design initiatives) identifies site remediation that is
time-critical or otherwise cannot be deferred (i.e., until PC&I project funding becomes
available), then EC&R funding shall be utilized to address any required removal actions,
provided that the site is a current or former Coast Guard site.
3. Any long term management (LTM) requirements resulting from site removal/site
remediation at PC&I project sites discussed above (e.g., monitoring and sampling of
groundwater, monitoring of in situ soil remediation), shall be funded with EC&R.
4. Any required site remediation discovered or encountered during the execution of
Intermediate & Depot Level Maintenance PPA O&S (AFC-43) funded shore facilities or
infrastructure project work (i.e., unforeseen conditions) would be funded with EC&R.
This would typically be addressed via a modification to the existing AFC-43 project work
if contractually allowable/possible. Alternatively, a new stand-alone EC&R scope of
work could be developed to execute any required remediation work that may be impeding
the progress of the Intermediate & Depot Level Maintenance PPA AFC-43 work.
5. Notwithstanding project schedules, compliance with all environmental laws and
regulations is required.
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5.6.14.5 Other Guidance
1. See Commandant (CG-47) if there is a question as to whether EC&R is appropriate.
2. Actual construction of prototypes for major acquisitions shall be funded using the same
appropriation from which the project originated. In most cases, this would be the PC&I
appropriation.
3. Congressionally directed projects may require special consideration as to funding source,
and will be handled on a case-by-case basis.
4. Refer to Policy on Environmental Compliance and Restoration Program, COMDTINST
5090.12 (series) and Civil Engineering Manual, COMDTINST M11000.11 (series) for
additional EC&R guidance.
5.6.15 Oil Spill Liability Trust Fund (OSLTF)
1. The National Pollution Funds Center (NPFC) has responsibility for control of obligations
and overall OSLTF management. Coast Guard units designated as Federal On-Scene
Coordinators (FOSCs) may make charges against the OSLTF when a Federal response
meets the requirements of the Clean Water Act (33 USC 1321).
2. Where the polluter is a Coast Guard vessel or facility, the OSLTF is not available. Those
cleanup expenses are chargeable to AFC-30 or to the EC&R appropriation.
5.6.16 Alteration of Bridges (AB) – Reprogramming Guidelines
The specific amounts of AB funds earmarked for each bridge alteration project are set forth in
the Congressional Stage budget justification, and later in the Conference report language
accompanying the annual appropriations act. The project funding basis is defined as the sum of
all funding earmarked by Congress for that particular project. The following guidelines apply:
Any reprogramming that involves a new (unbudgeted) project, or involves a project termination
(other than completion) shall be considered for congressional reprogramming. Prior to executing
a congressional reprogramming, the Transportation Appropriations Subcommittee chairmen in
the House and Senate must be informed of the proposed action in a letter signed by the Secretary
of Homeland Security, and the chairmen must be allowed at least 30 days in which to respond.
The AB appropriation manager shall submit the required correspondence via the chain of
command.
5.6.17 Retired Pay (RP)
The RP appropriation follows the same reprogramming guidelines as those specified for the
O&S appropriation.
5.6.18 Industrial Bases – Responsibilities
1. Management of industrial activities involves the cooperation of four separate elements:
a. Logistics and service center commands;
b. Supply and purchasing divisions;
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c. Operational units; and
d. The industrial support activity.
2. Due to the importance of the industrial objective (i.e., providing depot-level maintenance,
repair, and operational services to assist operational needs), the applicable
logistics/service center commander shall require the maximum coordination among these
organizations.
3. The industrial manager, in cooperation with the logistics center engineering staff and the
chief of the applicable finance division, shall follow the Coast Guard’s procedures for:
a. Developing the industrial budget;
b. Establishing/modifying the industrial “overhead” rate; and
c. Conducting the review, audit, and analysis of the industrial accounting reports.
5.6.18.1 Industrial Budget Operating Plan
An industrial budget operating plan shall be prepared for each industrial facility. The industrial
budget shall reflect the coordinated efforts of the logistics center engineering staff; the chief of
the applicable finance division; and the industrial manager.
The industrial budget operating plan provides a yardstick against which the actual billable costs
can be compared. The budget operating plan functions as the basis for allocating resource
dollars and baseline routine project planning. Reviewers must keep in mind that cost
fluctuations due to emergent and casualty response w
ill impact the operating plan. Reviewers must consider the practical applications of Coast Guard
mission responses in determining the effectiveness of the planned budget.
Revision of the industrial budget operating plan may be required during the course of the fiscal
year, particularly when analysis reveals the need to adjust the overhead rate being charged.
Reviewers often fall into the trap of judging effectiveness purely by the overhead rate. If an
industrial manager is judged by the overhead rate, the result may be an overhead rate reduced by
cutting short-term expenditures necessary for long-term effectiveness, such as equipment and
training. Before raising overhead rates, every effort shall be made to reduce overhead costs.
Revised budget operating plans shall be forwarded to Commandant (CG-44) with footnoted
explanations of changes.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.14 (Standard Personnel Costs
(SPC)) for a detailed discussion related to standard personnel costs (SPC) and guidelines for the
following:
Step
Topic
5.1
General
5. 2
Personnel Salary Costs
5.3
Distribution
5.4
Estimates
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5.6.19 Reprogramming
A reprogramming is the shifting of budget authority from one program, project or activity (PPA)
to another within the same appropriation. It also includes any significant change in the scope of
a PPA as described in a Congressional Stage budget justification or Congressional Report
language. Reprogramming receive significant scrutiny both internally and externally.
Reprogramming guidelines for the Coast Guard are set forth by the DHS Appropriation Acts.
In the Consolidated Appropriations Act of 2016, the reprogramming guidance within Section
503 of Division F was amended by Congress. Under the new guidance, up to 10 percent can be
programmed out of a PPA; however, only the lesser of $5 million or 10 percent can be put into a
PPA. This guidance is cited and explained below.
5.6.19.1 General Provisions
The 2016 DHS Appropriations Act includes the following general provision 503 which addresses
reprogramming. General provision 503 states verbatim:
(a) None of the funds provided by this Act, provided by previous appropriations Acts to
the agencies in or transferred to the Department of Homeland Security that remain
available for obligation or expenditure in fiscal year 2016, or provided from any
accounts in the Treasury of the United States derived by the collection of fees
available to the agencies funded by this Act, shall be available for obligation or
expenditure through a reprogramming of funds that:
(1) creates a new program, project, or activity;
(2) eliminates a program, project, office, or activity;
(3) increases funds for any program, project, or activity for which funds have been
denied or restricted by the Congress;
(4) proposes to use funds directed for a specific activity by either of the Committees
on Appropriations of the Senate or the House of Representatives for a different
purpose; or
(5) contracts out any function or activity for which funding levels were requested
for Federal full-time equivalents in the object classification tables contained in
the fiscal year 2016 Budget Appendix for the Department of Homeland
Security, as modified by the report accompanying this Act, unless the
Committees on Appropriations of the Senate and the House of Representatives
are notified 15-days in advance of such reprogramming of funds.
(b) None of the funds provided by this Act, provided by previous appropriations Acts to
the agencies in or transferred to the Department of Homeland Security that remain
available for obligation or expenditure in fiscal year 2016, or provided from any
accounts in the Treasury of the United States derived by the collection of fees or
proceeds available to the agencies funded by this Act, shall be available for obligation
or expenditure for programs, projects, or activities through a reprogramming of funds
in excess of $5,000,000 or 10 percent, whichever is less, that:
(1) augments existing programs, projects, or activities;
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(2) reduces by 10 percent funding for any existing program, project, or activity;
(3) reduces by 10 percent the numbers of personnel approved by the Congress; or
(4) results from any general savings from a reduction in personnel that would result
in a change in existing programs, projects, or activities as approved by the
Congress, unless the Committees on Appropriations of the Senate and the
House of Representatives are notified 15-days in advance of such
reprogramming of funds.
(c) Not to exceed 5 percent of any appropriation made available for the current fiscal
year for the Department of Homeland Security by this Act or provided by previous
appropriations Acts may be transferred between such appropriations, but no such
appropriation, except as otherwise specifically provided, shall be increased by more
than 10 percent by such transfers: Provided, That any transfer under this Section shall
be treated as a reprogramming of funds under Subsection (b) and shall not be
available for obligation unless the Committees on Appropriations of the Senate and
the House of Representatives are notified 15 days in advance of such transfer.
(d) Notwithstanding Subsections (a), (b), and (c) of this Section, no funds shall be
reprogrammed within or transferred between appropriations based upon an initial
notification provided after June 30, except in extraordinary circumstances that
imminently threaten the safety of human life or the protection of property.
(e) The notification thresholds and procedures set forth in this Section shall apply to any
use of deobligated balances of funds provided in previous Department of Homeland
Security Appropriations Acts.
Note 1: The O&S appropriation has an exemption to the deadline under 503 (d) written within
the appropriation language.
Note 2: The baseline is based on the annual original appropriated amount less any prior internal
reprogramming, Congressional reprogramming, and Congressional enacted across-the-board
rescissions (i.e., it does not include cumulative multi-year or no-year money).
Note 3: Congressional reprogramming requires a 15-day advance notification to the committees,
and identical responses are required from both the House and Senate committees in order for a
reprogramming or transfer request to be considered approved. Reconciliation of differences
between the House and Senate is the responsibility of Coast Guard/Department of Homeland
Security.
5.6.19.1.1 Congressional Reprogramming Criteria
As shown above, the Appropriations Committees’ reprogramming requirements are enacted in
the DHS appropriations act for each fiscal year (e.g., Section 503 of the Department of
Homeland Security Appropriations Act, 2016).
In addition, the Appropriation Committee reports provide important details of congressional
intent and the purpose of various funds. These reports refer to the funding of programs, projects,
and/or activities that may not be so designated in the actual appropriation act. Section 503 of the
typical appropriation act, dealing with reprogramming, has restrictions on creating, eliminating,
or increasing programs, projects, or activities above certain amounts or percentages without
notifying the respective Appropriation Committees of the House and Senate. Therefore,
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Commandant (CG-831) staff will review these underlying reports to better support
reprogramming efforts and to meet the requirements of Section 503 and congressional intent.
The Appropriations Committees have stated that the reprogramming language in Section 503 of
the FY 2016 DHS appropriations act is designed to require congressional notification of any
significant policy changes and/or workload shifts, regardless of whether the technical
requirements of reprogramming notification are met. For example, reprogramming between
object classes do not, per se, constitute reportable actions; however, large object-class shifts may
be indications of fundamental changes in the method of operating, which may be of interest to
DHS, the Administration, and the Appropriations Committees. Further, the reprogramming
criteria apply to the annual aggregate effect of moving funds from one purpose to another,
rather than an individual action, or a series of actions, that do not meet the criteria.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.11 (Congressional Transfers and
Reprogramming Budgetary Resources within an Appropriation) for detailed procedures and
requirements related to the following:
Step
Topic
5.1
Establishing Reprogramming Guidelines for Fund Transfers
5.2
Congressional Reprogramming Criteria
5.3
Justification for Reprogramming Requests
5.4
Reprogramming Decision
5.6.19.1.2 Reprogramming of National Drug Control Policy (NDCP) Funding
In accordance with the Office of National Drug Control Policy (ONDCP) circular, Budget
Execution, released on January 18, 2013:
A National Drug Control Program agency, in accordance with 21 USC 1703(c)(4)(A), shall not
… submit to Congress a reprogramming or transfer request with respect to any amount of
appropriated funds in an amount exceeding $1,000,000 that is included in the National Drug
Control Program budget unless the request has been approved by the Director [of National Drug
Control Policy].
For a change in a financial plan to accomplish a single purpose, agencies or bureaus shall not
structure multiple reprogramming or transfer transactions of less than $1 million in order to limit
ONDCP’s opportunity to review such proposals. If prior reprogramming of less than $1 million
has been sent to the Congress, any additional reprogramming that brings the reprogramming sum
total for a given appropriation over the $1 million level shall be sent to ONDCP for approval,
regardless of the individual total of that new reprogramming.
5.6.19.1.3 Reprogramming of National Intelligence Program (NIP) Funding
All reprogramming requests of funding designated for the National Intelligence Program (NIP),
formerly the National Foreign Intelligence Program (NFIP), require notification to the Office of
the Director of National Intelligence (ODNI), and must adhere to classification markings and
procedures as determined by the DHS Office of Security.
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5.6.19.2 Sample Reprogramming Problems
Problem 1: A program wants to reprogram $900,000 from a FY2015 Fast Response Cutter
acquisition project to a FY2016 Offshore Patrol Cutter acquisition project. Neither project has
previously reprogrammed funds from the FY identified. Below are the appropriated amounts:
1. FY2015 vessel category
Fast Response Cutter: $110 million
2. FY2016 vessel category
Offshore Patrol Cutter: $89 million
Solution: The reprogramming cannot be approved because the projects were funded in different
fiscal years. Funds can only be reprogrammed between projects in the same category and the
same fiscal year.
Problem 2: A program wants to reprogram $900,000 from a FY2015 HH-65 Conversion &
Sustainment project to a FY2015 Cutter Boat acquisition project. Neither project has previously
reprogrammed funds from the FY identified. Below are the appropriated amounts:
1. FY2015 aircraft category
HH-65 Conversion & Sustainment: $30 million
2. FY2015 vessel category
Cutter Boat: $4 million
Solution: The reprogramming cannot be approved because the projects were funded in different
categories, or specific appropriations (i.e., aircraft and vessels). Funds can only be
reprogrammed between projects in the same category and the same fiscal year. Any shift of
funds between categories requires a change in legislation.
Problem 3: A program wants to reprogram $2,000,000 from a FY2015 HC-144 Conversion &
Sustainment acquisition project to another FY2015 HC-27J Conversion & Sustainment
acquisition project in the same specific appropriation for Aircraft. Neither project has previously
reprogrammed funds from the FY identified. Below is the appropriated amount:
FY2015 aircraft category
HC-144 Conversion & Sustainment: $15 million
HC-27J Conversion & Sustainment: $20M
Solution: The reprogramming cannot be approved without congressional notification. The
Coast Guard can only reprogram up to $1,500,000 from the HC-144 Conversion & Sustainment
project (no more than 10 percent).
Problem 4: A program wants to reprogram $3,000,000 from the FY2016 C4ISR acquisition
project into the FY2016 CG Logistics Information Management System (CG LIMS) acquisition
project (both are projects under the Other Acquisitions appropriation). Neither project has
previously reprogrammed funds from these categories in the FY identified. Below are the
appropriated amounts:
FY2016 Other Acquisitions category
C4ISR: $36.6 million
CG LIMS: $8.5 million
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Solution: The reprogramming cannot be approved without congressional notification. The CG
LIMS project cannot be increased by more than 10 percent or $850K without notifying
Congress.
5.6.20 Supply Fund
The Supply Fund is a revolving fund which maintains itself by selling supplies to Coast Guard
appropriation accounts. The Supply Fund was authorized and established by law to provide
financing for the continuing cycle of inventory operations, involving clothing, food, fuel, and
general stores items. Generally, the Supply Fund inventory includes low-cost, high-turnover
consumable items and other designated repetitive-use items.
Note: Refer to Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 2 (Coast Guard Budget Authority and Structure)
Procedure No. 2.7.1, for detailed procedures on the Supply Fund; and Chapter 2 (Coast Guard
Budget Authority and Structure) and Chapter 5 (Budget Execution), in this Manual for guidelines
on the use of the Supply Fund Capital Authorization (CA)
Funding of the operations of the various unit activities under the Supply Fund stores account is
accomplished by means of a CA that is granted directly to the unit commander maintaining the
stores account. Continued financing of the stores account is accomplished by the sale of material
held in inventory. This produces revenue with which to restock inventory, either by replacement
in kind or with other required and authorized material. CAs constitute dollar limitations on the
total value of inventory that may be maintained under the applicable stores account.
5.6.20.1 Funds Management
Commandant (CG-83) shall determine CAs and shall develop procedures for evaluating the use
of these authorizations by the area commanders and Headquarters units in terms of the objectives
for which the Supply Fund was established. Changes in CAs will be processed using an FTA.
5.6.20.2 Surcharge Rates
Commandant (CG-83) is charged with conducting an annual review of appropriate surcharge
rates to be charged on Supply Fund commodities.
5.6.21 Special Deposits, Funds, and Receipts
The servicing accounting office (FINCEN in most cases) shall be responsible for the
development of procedures to supplement Headquarters instructions concerning the receipt and
handling of miscellaneous monies. These monies constitute the funds received from various
Coast Guard operations, including fines, penalties, forfeitures, seizure of property, user fees, and
sales. Such procedures shall also cover the monies payable to the Supply Fund as a result of the
credit sales of fuel and the cash sale of clothing and commissary supplies.
5.6.22 Accepting Gifts Offered by Non-Federal Sources
The rules regarding Coast Guard personnel accepting personal gift offers from non-Federal
sources are covered by 5 CFR Part 2635, Subpart B. The rules regarding the Coast Guard
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accepting agency gift offers from non-Federal sources are covered by Acceptance and
Accounting for Special Projects and Other Gifts to the Coast Guard from Non-Federal Sources,
COMDTINST 5760.14 (series). Contact your servicing legal office regarding all personal gift
and agency gift questions.
5.6.23 Managing Changes in the Amounts of Budgetary Resources in an
Appropriation
5.6.23.1 Changes in Budget Authority – Appropriations, Rescissions, Deferrals,
Appropriation Transfers, and Reimbursements
5.6.23.1.1 Supplemental Appropriations
Supplemental appropriations are appropriations enacted subsequent to a regular annual
appropriations act, when the need for funds is too urgent to be postponed until the next regular
annual appropriations act (as defined in OMB Circular A-11, Section 20). After the President’s
Budget has been transmitted to Congress, the President proposes changes in the budget by
transmitting appropriation requests to revise the original budget request for the current year
(supplemental) or budget year (amendment), including proposed appropriation language for
legislative initiatives (e.g., items included in the budget as legislative proposals).
Supplemental appropriation requests may be for additional amounts or proposed changes in
appropriation language that do not affect amounts previously requested, such as technical
corrections or changes in a limitation on the use of funds that are identified in appropriation
language in the annual appropriation act. These requests may be either supplemental or
amendments, depending upon when they are transmitted (see Section 110.2 of Circular A-11).
Every effort should be made to postpone actions that require supplemental appropriations.
OMB policy is to only consider requests for supplementals and amendments when:
1. Existing law requires payments within the fiscal year (e.g., pensions and entitlements).
2. An unforeseen emergency situation occurs (e.g., a natural disaster requiring expenditures
for the preservation of life or property). In these cases, the Coast Guard shall propose a
deficiency apportionment that allows the use of funds currently available at a rate that
anticipates the need for a supplemental appropriation. (See OMB Circular A-11,
Section 120.41).
3. New legislation enacted after the submission of the annual budget requires additional
funds within the fiscal year.
4. Increased workload is uncontrollable, except by statutory change.
5. Liability accrues under the law, and it is in the Government’s interest to liquidate the
liability as soon as possible (e.g., claims on which interest is payable). It generally takes
a minimum of three weeks for OMB and the White House to consider agency proposals
for supplemental appropriations or amendments that are not transmitted in the annual
budget. Allow for this timing when making requests.
Supplemental appropriations are transmitted after completion of action on an annual
appropriations bill by the Appropriations Committees of both Houses. They may be transmitted
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prior to, with, or subsequent to transmittal of the succeeding annual budget document.
Supplemental requests that are known at the time the budget is prepared are normally transmitted
to the Congress with the budget, rather than later as separate transmittals. However, each case
will be decided separately. OMB representatives will inform DHS which supplemental
appropriation requests will be transmitted with the budget so the necessary information can be
submitted. These supplementals may be:
1. Requesting additional amounts not previously anticipated; or
2. Requesting changes in appropriations language that do not affect amounts previously
appropriated.
5.6.23.1.2 Emergency Operations and Deficiency Apportionment Requests
Agencies are generally prohibited from obligating funds in a manner that would result in a
deficiency of budgetary resources and require a supplemental appropriation to continue
operations later in the fiscal year. Coast Guard managers shall maintain operating plans that
reflect a rate of obligation consistent with the latest apportionment of existing resources.
Operations at a higher rate of obligation that anticipate the need for a supplemental appropriation
are not authorized unless a deficiency apportionment has been approved by OMB and Congress
has been notified of the deficiency apportionment. See OMB Circular A-11, Section 120.41.
In instances of natural disasters, man-made disasters, armed conflict, and other operational
exigencies of national security or national sovereignty, the Coast Guard may need to assume
operational postures which will require an immediate response and a higher rate of obligation
that will exhaust current obligational authority.
DHS will be immediately notified that the Coast Guard is responding to the emergency. The
Coast Guard will advise DHS of its response and, as soon as practicable, advise DHS of the
estimated amounts required to meet the emergency and the approximate time that the
appropriation will be exhausted and additional appropriations will be required. The Coast Guard
will immediately exhaust all alternatives to fund the emergency response. In some
circumstances, the Coast Guard may be able to receive one or more transfers from existing
appropriations to cover the emergency response (e.g., from the transfer authorities granted to
DHS, FEMA, or the President). If transfer authority is available and approved, a deficiency
apportionment may not be needed for the Coast Guard appropriation, but a normal
reapportionment for the Coast Guard appropriation requiring the fund transfers needs to be
expedited through the Department and OMB. The Coast Guard will arrange for the transfer of
funds to coincide with the receipt of the reapportionment.
If no transfers of authority from other appropriations are available, the deficiency apportionment
will be developed and submitted as promptly as possible to notify OMB and DHS of the need for
an emergency supplemental appropriation to sustain a national maritime or other emergency
operations response. The deficiency apportionment will calculate the amount of additional
funding required to respond to the operational emergency during the appropriations period, and
the estimated date when all available funds will be exhausted. The apportionment will be
immediately forwarded to DHS and OMB. While awaiting the receipt of the deficiency
apportionment, Commandant (CG-83) will provide frequent updates on the status of available
funds and the emergency response operations. The approval of a deficiency apportionment does
not authorize the obligation and expenditure of funds in excess of amounts currently
appropriated and apportioned.
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5.6.23.1.3 Rescissions and Deferrals
The Impoundment Control Act of 1974 requires the President to notify Congress whenever an
official of the Executive Branch impounds funds. An impoundment is any executive action or
inaction that temporarily or permanently withholds, delays, or precludes the obligation or
expenditure of budgetary resources. There are two types of impoundments – rescissions and
deferrals – with differing requirements. The President transmits proposed rescissions and
deferrals in a special message to Congress. Proposed rescissions and deferrals are usually
reflected in the Apportionment and Reapportionment Schedule, Form SF 132, and Report on
Budget Execution and Budgetary Resources, Form SF 133, for the account involved.
Rescissions
Rescissions are reductions in budgetary resources (either new budget authority or unobligated
balances) proposed by the President and enacted by Congress under the Impoundment Control
Act. Rescissions are usually permanent, although they may be temporary under some
circumstances. The term is sometimes used more broadly to refer to any law enacted by
Congress to reduce budgetary resources.
When the President submits a rescission proposal to Congress, the budgetary resources that are
proposed for rescission must be withheld from obligation for 45 days of continuous session of
Congress (excluding an adjournment of more than three days on which either House is not in
session). These amounts are placed in “reserve” in a Category C apportionment. During this
time the following actions will be taken, as appropriate:
1. A determination is made regarding the level of detail in the funds control system in which
obligational authority will be reduced. If the likelihood of congressional enactment of
proposed rescissions is small, the funds proposed for rescission should be reduced within
the allowances, but not removed from targets or PEs. This action obviates the need to
modify numerous fund allocations made available in targets and PEs. Program officials
managing funds at these lower levels of funds control should be advised of potential
reductions to the current amounts allocated to their targets and PEs and asked to reduce
their rates of obligation as a contingency. They should also be asked to identify
reductions they would take if the rescission is enacted.
2. Reductions to specific allowances are taken when a reapportionment reserves amounts
proposed for rescission. The creation of a new allowance in a negative amount should
not be established as an expediency to reflect the net amount of available authority.
Allowance managers affected by the reductions should increase the monitoring of targets
and PEs to maintain appropriate rates of obligation at the reduced amounts available
within the related allowance.
3. Congressional action on the proposed rescission is carefully monitored to determine the
likelihood of enactment within the 45-day review period provided under the
Impoundment Control Act. Appropriate actions should be taken to withhold money at
target and PE levels if a rescission appears imminent, including prompt notification of
affected managers prior to the establishment of reduced funding levels in the funds
control system itself.
4. Budget execution staff prepares to return any funds removed temporarily from the
allowances within the funds control system immediately after the funds are required to be
released under the Impoundment Control Act.
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5. Any reapportionment requests that might be needed to restore obligational authority that
was identified as temporarily unavailable in the latest apportionment schedule (a
Category C apportionment) are immediately initiated.
The Coast Guard must make the funds fully available for obligation upon the expiration of the
45-day period if Congress has not enacted the rescission.
Deferrals
A deferral is any action or inaction that temporarily withholds, delays, or effectively precludes
the obligation or expenditure of budgetary resources with the intent of using the funds before
they expire. Deferrals cannot be used to withhold funds until they expire. In such cases, a
rescission must be proposed. Deferrals are only permitted to provide for contingencies, to
achieve savings made possible through changes in requirements or greater efficiency of
operations, or as specifically provided in law. Contrary to rescission proposals, deferrals remain
in effect unless Congress enacts legislation to disapprove them.
Programmatic delays are not impoundments and are not required to be reported as deferrals. As
long as an agency is making a good faith effort to implement a program, it is not required to
report delays in which operational factors unavoidably impede the obligation of budget authority.
For example, unavoidable delays in the contracting process would not be cause for a deferral.
Deferred amounts are normally reported on the deferral lines of the Apportionment and
Reapportionment Schedule, Form SF 132, and Report on Budget Execution and Budgetary
Resources, Form SF 133. As such, they are not available for obligation. Commandant (CG-831)
should review any active deferrals to ensure that they are not inadvertently deferred beyond the
point that they can be prudently obligated before the budgetary resource expires.
5.6.23.1.4 Appropriations Transfers
Appropriations transfers – movements of funds from one appropriation to another – can only be
made if authorized in law and when the Department of the Treasury has formally approved in
writing. The written nonexpenditure transfer authorizations must include a citation to the
authorizing law that supports the transfer. Laws may provide transfer authority for a specific
purpose or from one designated appropriation to another. They may also provide broader
transfer authority. For example, the DHS appropriations act for each fiscal year provides general
appropriation transfer authority to the Secretary of Homeland Security.
Funds that have been transferred into an account are subject to the same requirements as direct
appropriations. Together with the other budgetary resources of the account, transferred amounts
must be apportioned and are subject to the requirements regarding allotment, allowances, targets,
and program elements. Nonexpenditure transfers reflect specific legal authority in an agency’s
appropriation language, and both are reflected in the Treasury Department’s Governmentwide
Accounting System as amounts available for obligation to the recipient organization.
Nonexpenditure transfer represents amounts to be moved from one appropriation account to
another, and on occasion, from one Federal agency to another.
OMB policy in Circular A-11, Section 120.29, provides that a consolidated apportionment shall
be made by the transferring appropriation. The OMB policy further provides that receiving
agencies will not prepare an apportionment request for allocation accounts unless required by
OMB. The Coast Guard shall prepare apportionment requests for all budget authority received
via Nonexpenditure Transfer Authorization, Form SF 1151, and submit them to DHS. The Coast
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Guard shall request the allotment of those transferred funds by DHS and shall distribute
appropriate allowances, targets and PE amounts in the same manner as prescribed above for
regular appropriations.
5.6.23.1.5 Reimbursements
As a matter of general law, any collections that an agency receives must be deposited into the
General Fund of the Treasury. However, specific laws authorize agencies to perform work and
to receive reimbursements that are credited to the servicing account and are available to be used
as budgetary resources. The Economy Act (31 USC 1535) provides general authority for
agencies to perform certain kinds of reimbursable work.
Likewise, 14 USC 701 (the Coast Guard Cooperative Agreement Statute) provides that the
Commandant may prescribe conditions, including reimbursement, under which personnel and
facilities may be provided to assist any Federal agency, State, Territory, possession, political
subdivision thereof, or the District of Columbia as may be helpful in the performance of its
duties. This is permissive authority.
Commandant (CG-831), which executes appropriations and funds that are financed in whole or
in part by reimbursable resources, must maintain constant and careful oversight to ensure that
these reimbursements are earned as planned and that the costs of providing the goods and
services are in line with the cost estimates established in the reimbursable agreements. This
requirement applies equally to General Fund appropriations and to the Coast Guard revolving
funds, including the Supply and Yard Funds.
OMB permits agencies to include anticipated reimbursements in the apportionment request for
an account. However, apportioned anticipated reimbursements are not available for obligation
until they have been realized. Commandant (CG-831), for reimbursable programs, shall limit the
issuance of allowances in appropriations or funds with reimbursable resources to those amounts
realized through the establishment of bona fide reimbursable agreements, as provided in Section
7.11 of this Manual. Appropriate action must be taken, including funding reductions of the
allowances related to reimbursable income, and/or related reapportionment, if actual earnings are
projected at year-end to be less than the amounts anticipated in the latest Apportionment and
Reapportionment Schedule, Form SF 132.
The management and reporting of anticipated and realized reimbursements is covered on the
Apportionment and Reapportionment Schedule, Form SF 132, and on the Report on Budget
Execution and Budgetary Resources, Form SF 133, found throughout OMB Circular A-11
beginning at Section 20.13.
5.6.23.2 Changes in Other Budgetary Resources – Unobligated Balances and
Prior-Year Recoveries
The Coast Guard is required to estimate the amounts of unobligated balances carried over from
the prior fiscal year, and anticipated recoveries from cancellation or downward adjustments to
prior-year obligations prior to the start of each fiscal year. This obligational authority is
requested from OMB in an apportionment of those resources before final accounting results are
established and the FMOP is formulated, compiled, and issued. In most years, the unobligated
balances and recoveries available within the PEs will remain in and be fully liquidated in those
PEs. Commandant (CG-831) and FINCEN shall establish the controls necessary to prevent the
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obligation of these amounts until the receipt of an apportionment from OMB and their allotment
by DHS. However, PEMs shall be advised, when appropriate, that certain events may dictate the
need to transfer those resources to other funds control entities after the start of the fiscal year.
Examples include:
1. When the project or activity funded by the PE has been completed, and no further work is
anticipated;
2. When decisions on the budget request in the current year require a redetermination of
how unobligated balances will be applied;
3. When Congress has passed or the President has proposed a rescission of unobligated
balances, and the amounts to be rescinded have to be applied to the various PEs; and
4. When DHS is considering the transfer of obligational authority to other DHS agency
appropriations, and the Coast Guard has identified carry-over funding that can meet
DHS’s needs.
5.6.24 Managing Changes in the Application of Budgetary Resources Within
an Appropriation
The budget process is dynamic and requires flexibility and rapid responses to changing
circumstances. Budget estimates are prepared eighteen months prior to the start of each fiscal
year. Although the budget reviewers in the executive and legislative branches are given
additional information in the course of enactment of appropriations, circumstances may change
as the budget execution phase of the fiscal cycle is carried out. For example, missions may
change as a result of unforeseeable events and require a redirection of resources, or unanticipated
economic conditions may change the pricing of many objects of expenditure and require a
redirection of resources within object classifications. These and other changes require a
disciplined approach in redirecting existing resources to the programs and objects in most need,
and managing these changes within a specific legislative framework.
This Subsection covers changes in the amounts allocated to various levels within the funds
control hierarchy. The definitions for the types of changes in the application of budgetary
resources must be clearly understood and used precisely to facilitate clear communication and
execution of the movement of funds authorized in this policy. Failure to observe fund transfer
guidelines can result in the overobligation of funds in an appropriation having multiple
Category B apportionments. This could result in a violation of the Antideficiency Act or lead to
a misapplication of resources in a manner inconsistent with reprogramming criteria established
by Congress. Furthermore, the management of these changes is an important element in the
FMOP process. The various changes to the FMOP that may occur through the transfer of funds
discussed below shall be identified in the course of the year as recurring changes that will be
incorporated into the following year’s base for those appropriations with multiple allowances, or
nonrecurring changes applicable only to the current fiscal year. Regardless of whether the
movement of funds is meant to be a permanent change within the appropriation or is of a
temporary one-time nature, the transfer should be reviewed carefully to establish that the
transaction is consistent with the various funds control limitations in the FMOP.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.11 (Congressional Transfers and
Reprogramming Budgetary Resources within an Appropriation) for procedures and guidelines
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related to delegating the authority to move funds within the established funds control hierarchy
of an appropriation.
5.6.24.1 Upward/Downward Adjustments to Prior-Year Obligations
Obligations must be recorded when supported by documentary evidence of certain transactions
described by statute. See 31 USC 1501 and Subsection 5.6.24.1.4 (Policy). Funds appropriated
by Congress are made available for new obligations for either a fixed period of time (e.g., one-
year or multi-year) or until expended (no-year). Once the fixed period of availability for one-
year and multi-year appropriations expires, the obligated funds remain available for
disbursement for five years, and the unobligated funds remain available to cover any required
adjustments to the obligated balances for the same five-year period. When the five-year period
expires, the funds are cancelled, and the remaining unobligated balance returned to the Treasury
General Fund.
OMB now requires agencies to report downward adjustments (e.g., deobligations and vendor
refunds) separately from upward adjustments (e.g., increases to pre-existing obligations or
expenditures in excess of the obligation) by Treasury Appropriation Fund Symbol (TAFS) to
verify that Federal entities are not using expired funds for new spending. Federal agencies must
report adjustments to prior-year obligations separately from adjustments to current-year
obligations, since adjustments to prior-year obligations are required to be re-apportioned by
OMB before they are available for use.
Upward or downward adjustments to prior-year obligations occur when a change in requirements
or circumstances changes or modifies an order for goods or services, agreement, or other
obligating document. The following are examples of activities that trigger adjustments to
obligations:
1. The amount of a purchase order or contract is modified after the initial award and
obligation of funds (e.g., increasing the order quantity under a blanket purchase order).
2. A final bill or invoice is received from a vendor for an order, and the total amount billed
for the order is different from the amount obligated (e.g., cost increases due to inflation or
actual shipping charges exceeded estimated shipping charges resulting in an upward
adjustment).
3. An administrative closeout of a contract occurs, and the remaining unliquidated
obligation is deobligated and cancelled.
When the amount charged for a delivered order is less than the original obligation amount from a
prior year, a downward adjustment (deobligation) to the obligated balance is recognized.
Conversely, charges for more than the original obligation amount from a prior year are
recognized as an upward adjustment to the obligated balance. Adjustments to current-year
obligations are netted against total obligations incurred in the current fiscal year.
5.6.24.1.1 Purpose
This Subsection prescribes Coast Guard policy for recognizing and reporting upward and
downward adjustments to prior-year obligations. OMB has issued specific requirements for
reporting prior-year obligations and adjustments, and the Coast Guard shall accurately record
and report these prior-year adjustments to properly reflect budget authority available to it.
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5.6.24.1.2 Scope
This Subsection prescribes policies for recognizing and reporting adjustments to prior-year
obligations in the Coast Guard by:
1. Identifying the requirements and limitations for prior-year adjustments to obligations;
2. Describing the process for reviewing and adjusting obligations;
3. Identifying internal controls that are key to the integrity of the process; and
4. Assigning specific responsibility to Coast Guard personnel for the review, approval,
recording, and monitoring of adjustments to prior-year obligations.
The policy guidance in this Subsection applies to all Coast Guard offices and units, with specific
responsibilities assigned as follows:
5.6.24.1.3 Responsibilities
1. Office of Resource Management, Commandant (CG-83):
a. Develops and implements the policy and system of internal controls to initiate,
approve, execute, and monitor adjustments to prior-year obligations.
b. Implements, maintains, and monitors the execution of this policy for adjustments to
prior-year obligations.
c. Establishes and maintains the funds control process/system of controls for the Coast
Guard, in coordination with Commandant (CG-84).
2. Funds Control Division, Commandant (CG-831):
a. Monitors downward adjustments to prior-year obligations and prepares requests for
apportionment of recoveries of prior-year obligations from OMB.
b. Monitors and reports on the performance metrics established for tracking adjustments
to prior-year obligations.
3. Allowance, Target, and Program Element Managers:
a. Implement, maintain, and monitor the execution of this policy for adjustments to
prior-year obligations.
b. Review and monitor prior-year adjustments to obligations.
c. Ensure the monetary threshold for the Category II auto‐reconciliation function in FD
shall not exceed $50.00 when conducting PES reconciliations.
5.6.24.1.4 Policy
The formal award of a purchase order, requisition, or contract represents a legal obligation and a
bona fide need of the fiscal year of the obligation. When the ordering document is issued, the
estimated amount of the order shall be recorded as an obligation in the official accounting system
of record. Upward and downward adjustments to prior-year obligations result in either an
increase or decrease to budgetary resources and are based on the facts evidenced in the official
Coast Guard obligating documents used for orders placed, contracts awarded, services received,
and similar transactions. For all appropriations (annual, no-year, and multi-year), upward and
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downward adjustments affecting current-year unexpired funds are netted against total obligations
incurred in the current fiscal year.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.9 (Upward/Downward
Adjustments to Prior-Year Obligations) for detailed procedures and requirements related to the
following:
Step
Topic
5.1
Review and Validate Prior Year Obligations
5.2
Upward Adjustments to Prior-Year Obligations
5.3
Downward Adjustments to Prior-Year Obligations
Note 1: Cancelled TAFS of Prior-Year Obligations Cannot Be Upwardly Adjusted - Funds
in cancelled TAFS are not available for new obligations, adjustments to prior obligations, or
payment of legitimately incurred obligations that have not been disbursed. After a TAFS is
cancelled (closed), any obligations or adjustments to obligations that would have been properly
chargeable to that account, both as to purpose and in amount, before closing and that are not
otherwise chargeable to any current appropriation account of the agency may be charged to any
current appropriation account of the agency available for the same purpose. The total amount of
charges to a current account may not exceed an amount equal to 1 percent of the total
appropriations for that account. See the provisions detailed in Subsection 5.7.1 (Managing
Expired and Cancelled Accounts) of this Manual.
Note 2: Downward Adjustments to Obligations - Downward adjustments to obligations occur
when the amount due upon delivery of goods or services received is less than the original
obligation amount. Downward adjustments to obligations are considered a recovery of
budgetary resources; however, there are various limits to the availability of recovered
obligations, as discussed in Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.9, Step 5.3 (Downward
Adjustments to Prior-Year Obligations).
5.6.24.2 Adjustments between Appropriations
The Coast Guard uses adjustments between appropriations to procure central services through
the O&S appropriation (or other servicing appropriation) and to assign costs and expenditures to
a benefiting appropriation. This enables Coast Guard programs funded by appropriations other
than the O&S appropriation to receive certain core services (e.g., active-duty military payroll and
benefits, IT workstations, and GSA rent) which are executed within the O&S appropriation.
These accounting adjustments are supported by a documented, approved methodology that is
consistently applied and monitored.
5.6.24.2.1 Purpose
This Subsection establishes policy for the use of adjustments between appropriations to provide
central services from the O&S appropriation (or another servicing appropriation) to Coast Guard
programs financed through other appropriations.
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This policy provides reasonable assurance that:
1. The operations are compliant with the requirements identified in 31 USC 1534 and
OMB Circular A-11, Section 130.8.
2. The methodology for calculating the estimated cost and for accumulating and assigning
cost is compliant with FASAB standards.
3. The cost methodology is approved, monitored, documented, and consistently applied.
4. The approved adjustments between appropriations are applied to the receiving
organization’s appropriation and are concluded at year-end.
5. The central services are provided in a manner that prevents one appropriation from
augmenting another.
5.6.24.2.2 Scope
These policies do not apply to orders placed within the Supply Fund and the Yard Fund.
5.6.24.2.3 Responsibilities
1. Office of Resource Management, Commandant (CG-83):
a. Reviews the design and execution of the central services procurement program to
ensure that it meets financial management standards.
b. Assigns officials to monitor, execute, and report the business operations supporting
central services.
2. Funds Control Division Commandant (CG-831):
a. Implements, maintains, and monitors the execution of this policy for adjustment
between appropriations.
a. Implements improvements to the policy, procedures, and process for adjustment
between appropriations, as needed.
3. Financial Analysis & Execution Division, Commandant (CG-832):
a. Establishes and maintains standard costs for the Coast Guard.
b. Reviews and approves cost methodologies as compliant with the principles of SFFAS
No. 4, Managerial Cost Accounting Standards and Concepts, for servicing program
costs for which standard rates are not available.
5.6.24.2.4 Policy
This policy covers the following aspects of the central services procurement program:
1. Program review and approval;
2. The central services agreement (CSA);
3. Executing a CSA – recording adjustments between appropriations;
4. Year-end closeout; and
5. Monitoring and reporting.
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Program Review and Approval
1. All organizations and appropriations using central services shall be reviewed and
approved every three years to verify need.
2. Program approval documentation shall be maintained in a central location and shall be
readily available for review.
The Central Services Agreement (CSA)
Each CSA shall be developed by the servicing program appropriation, with input from the
benefiting program appropriation and Commandants (CG-831) and (CG-832).
Executing a CSA – Recording Adjustments between Appropriations
Failure to fully assign costs results in the augmentation of appropriations, as the unauthorized
expenditures by the servicing appropriation create a potential violation of the Antideficiency Act.
This potential violation is related to the underreporting of assigned services, since the servicing
appropriation, without reimbursement, has incurred obligations and expenditures that are outside
the lawful purpose of the appropriation. For these reasons, it is important to carefully plan,
execute, and document all appropriation adjustments.
Year-end Closeout
1. All costs are assigned at year-end with the amount obligated adjusted (if necessary) to
reflect the actual cost assigned.
2. All adjustments between appropriations shall be completed by closeout of each fiscal
year.
Monitoring and Reporting
Commandant (CG-831) shall monitor the adjustment-between-appropriation process to verify
that the planning, cost estimation, cost assignment, and execution of the adjustment between
appropriations is fully compliant with laws and regulations.
5.6.24.3 Organizational Changes
When major organizational changes necessitate the restructuring of the Coast Guard budget and
the reassignment of funds control responsibilities, Commandants (CG-831) and (CG-832) shall
coordinate the establishment of a new budget formulation and budget execution structure. The
new budget being formulated shall provide a crosswalk in the transition year between the old and
the new structure to maintain comparability for the reviewers of the budget. The execution of
the budget under the new organizational structure (e.g., the restructuring of targets under the new
organization) shall require the transfer of obligational authority and related obligations to the
individual charged with managing resources in the new organization.
5.6.24.4 Changes in Means of Financing
Management decisions may necessitate changes in the way a particular program, project, or
activity is being funded. For example:
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1. Certain expenses borne by one appropriation may be determined to be more appropriately
borne by another.
2. Expenses once funded from a direct appropriation may be determined to be more
appropriately funded by one of the revolving funds.
3. Changes in legislative authority may require the movement of expenses from one
appropriation or TAFS to another.
When circumstances require a change in the means of financing, the budget formulation and
budget execution functions shall be coordinated to reflect the new financial structure in budget
formulation presentations and the restructuring of the funds control structure to execute the new
budget. These changes in the means of financing shall require the transfer of funds control
responsibilities for the management of balances of obligational authority and the related
obligations to another individual.
5.6.25 Monitoring the Status of Funds in Operating Plans and Financial
Reporting
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.6.18 (Monitoring the Status of
Funds in Operating Plans and Financial Reporting) for detailed procedures related to proactively
managing, controlling, and maximizing the use of budgetary resources.
5.6.26 Monitoring and Reporting Treasury Appropriation Fund Symbols
(TAFSs)
Monitoring TAFSs for the BRM key process is an important financial management activity for
several reasons:
1. The BRM process impacts both the Fund Balance with Treasury (FBWT) financial
process and the general ledger management (GLM) financial management key process,
since BRM supports the accuracy and reliability of the FBWT process and provides a
means of assuring the reliability and compliance of the Coast Guard’s USSGL in the
GLM process.
2. Monitoring TAFSs supports the accuracy and reliability of financial reports drawn from
the BRM process, such as the Report on Budget Execution and Budgetary Resources,
Form SF 133; the Year-end Closing Statement, Form FMS 2108; and the Statement of
Budgetary Resources; which are all subject to audit.
3. The DHS Component Requirements Guide for Financial Reporting requires several
specific monitoring activities that are to be conducted at the beginning of the year,
monthly, and quarterly.
5.6.26.1 Purpose
This Subsection establishes monitoring and reporting requirements for BRM at the TAFS level
for all Coast Guard funds as a means to improve and maintain the accuracy and reliability of
budgetary information. This policy guides FINCEN and Commandant (CG-83) in reporting and
monitoring the Coast Guard’s TAFSs for the following objectives:
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1. Verifying that the TAFSs executed by the Coast Guard are the same ones which Congress
has approved and Treasury has provided to the Coast Guard, and that beginning-year
balances for each of the TAFSs is equal to the ending balances for TAFSs that have not
been cancelled at year-end.
2. Confirming that all approved budgetary resources recognized by the budget office are
equal to those budgetary resources recorded in the Coast Guard’s general ledger and at
Treasury.
3. Reviewing appropriate GLM analytics, abnormal balances within the USSGL 400000
series accounts, and adjusting entries for the 400000 series accounts to detect process
control weaknesses.
4. Conducting analytical procedures over the Report on Budget Execution and Budgetary
Resources, Form SF 133, and the monthly Statement of Budgetary Resources to detect
anomalous BRM activity in month-to-month and month-to-same-month-last-year
analysis.
5. Confirming the successful validation of obligations (undelivered or delivered orders)
against criteria for both recognition and valuation.
This policy is not intended to provide monitoring for funds control (which is discussed in
Chapter 3 (Administrative Control Funds)) or monitoring of annual operating plans (which is
discussed in Subsections 5.6.25 (Monitoring the Status of Funds in Operating Plans and
Financial Reporting); 5.5.8 (Meeting DHS Operating Plan Requirements) and 5.5.9 (Establishing
Operating Plans within the Coast Guard Funds Control Structure)).
5.6.26.2 Scope
This policy applies to, but is not limited to, all Coast Guard offices and units that monitor/report
TAFSs. Specific responsibilities are assigned in the following Subsections.
5.6.26.3 Responsibilities
The following offices have designated responsibilities for reporting and monitoring BRM
activities at the TAFS level.
5.6.26.3.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO:
1. Establishes policy on reporting and monitoring Coast Guard funds at the TAFS level.
2. Verifies that corrective actions are initiated and completed whenever process or reporting
errors are noted.
5.6.26.3.2 Office of Resource Management, Commandant (CG-83)
Commandant (CG-83):
1. Receives and reviews standard Federal accounting reports to identify information which
could indicate anomalous financial activity or errant financial reporting.
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2. Receives and reviews Coast Guard accounting reports to identify information which
could indicate that policies and procedures are not being fully or accurately executed.
3. Researches and prepares nonstandard reports and analyses to support TAFS monitoring.
4. Confirms and verifies the integrity of budgetary financial reports by assessing the data
quality of budgetary transactions (e.g., budgetary authority, obligations, and outlays),
evaluating results, and taking prompt and effective corrective action.
5.6.26.3.3 FINCEN
FINCEN personnel:
1. Confirm and verify the integrity of budgetary financial reports by confirming that the
reports meet the form and content standards prescribed by OMB, Treasury, and DHS.
2. Take necessary steps to complete corrective actions to ensure that procedures are
completed timely and accurately.
5.6.26.4 Policy
5.6.26.4.1 Office of Resource Management (CG-83)
1. Commandant (CG-83) shall monitor Coast Guard funds at the TAFS level to support the
CFO in obtaining the following agency-level objectives:
a. Timely and accurate information to support decision making;
b. Accurate and reliable financial reports (e.g., Report on Budget Execution and
Budgetary Resources, Form SF 133; Year-end Closing Statement, Form FMS 2108;
Statement of Budgetary Resources; Open Document listings for obligations and
payables; Statement of Transactions, Form FMS 224);
c. Compliance with laws and regulations (e.g., CFO Act, OMB Circulars A-11 and
OMB, Memorandum M-13-23, Appendix D to Circular No. A-123, Compliance with
the Federal Financial Management Improvement Act of 1996, FFMIA); and
d. Improved internal controls that, when effectively implemented and monitored, assist
management in providing reasonable assurance regarding effective operation of
internal controls for financial processes.
5.6.26.4.2 FINCEN
FINCEN personnel shall:
1. Document and report to Commandants (CG-83) and (CG-84) those transaction, process,
and system issues which need to be resolved outside of FINCEN in order to improve the
reliability and accuracy of the reports.
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5.7 Actions Taken at the End of the Fiscal Yea r
5.7.1 Managing Expired and Cancelled Accounts
All appropriated funds provided by Congress are restricted to a specified purpose, dollar amount,
and period of availability. Budget authority provided in annual appropriation acts (including
supplemental appropriation acts, continuing resolutions, and omnibus appropriations acts) is
available for new obligations during only one fiscal year, unless the appropriation language
expressly provides otherwise. Once the period of availability for new obligations expires,
Federal agencies have five years to make any adjustments to existing obligations and to disburse
funds to liquidate existing obligations before the funds are cancelled and returned to the U.S.
Treasury.
Expired and cancelled funds relate only to annual and multi-year appropriations. If the
appropriation language makes the budget authority “available until expended” (no-year
appropriations), the funds are available indefinitely, and the TAFS will remain open until all
funds are disbursed or when the purpose of the appropriation has been achieved. An account
available for an indefinite period (no-year account) is cancelled if:
1. The head of the agency concerned or the President determines that the purposes for which
the appropriation was made have been carried out; and
2. No disbursement has been made against the appropriation for two consecutive fiscal
years.
For detailed responsibilities and procedures for properly recording and reporting expired and
cancelled appropriations, refer to the Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 5, Procedure No. 5.7 (Actions Taken at the
End of the Fiscal Year).
5.7.1.1 Purpose
This Subsection prescribes policies for properly recording and reporting expired and cancelled
appropriations to comply with the provisions of 31 USC Chapter 15, “Appropriation
Accounting”, and corresponding regulations relating to expired and cancelled accounts (e.g.,
31 USC 1552, “Procedure for appropriation accounts available for definite periods”).
This Subsection has four major objectives:
1. Identifying the requirements and limitations for expired and cancelled appropriations;
2. Describing the process for recording and monitoring expired and cancelled accounts;
3. Identifying key internal controls over the management of expired and cancelled funds;
and
4. Assigning specific responsibility to Coast Guard personnel for the proper management
and reporting of expired and cancelled funds.
Adherence to the provisions of this Subsection will allow the Coast Guard to provide reasonable
assurance that expired and cancelled funds are properly recorded in the accounting system of
record and reported in accordance with applicable statutes and regulations.
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5.7.1.2 Scope
The guidance in this Subsection applies to all Coast Guard offices and units, with specific
responsibilities assigned in the following Subsection.
5.7.1.3 Responsibilities
5.7.1.3.1 Office of Congressional Affairs (CG-0921)
Commandant (CG-0921) provides staff the timely, accurate, and detailed information needed to
fulfill their Constitutional duties.
5.7.1.3.2 Office of Resource Management (CG-83)
Commandant (CG-83):
1. Provides funds control for all current and expired appropriations.
2. Prepares requests for apportionment and reapportionment of funds.
5.7.1.3.3 Funds Control Division (CG-831)
Commandant (CG-831) ensures that appropriated funds are used in accordance with
appropriations law, congressional intent, and Coast Guard policy.
5.7.1.3.4 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84) develops and issues policies and procedures for managing and reporting
of expired and closed appropriation accounts.
5.7.1.3.5 Appropriation, Allowance, Target, and Program Element Managers
1. Monitor expired fund balances and take action to preclude Antideficiency Act violations
for the appropriation and overobligation of funds.
2. Assist assigned Coast Guard financial managers in closing out all outstanding
receivables, payables, and obligations in expired TAFSs.
5.7.1.3.6 FINCEN
FINCEN personnel:
1. Exercise direct supervision over the review, control, follow-up and reconciliation of
documents in support of general ledger control account balances.
2. Maintain proper general ledger controls for expired and cancelled accounts.
3. Establishes procedures and IT controls to accurately and timely record and report activity
and balances in expired and closed TAFSs in accordance with central agency
requirements applicable to Federal agencies.
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5.7.1.3.7 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913) provides expert procurement policy and organization advisement to
senior level Coast Guard officials.
5.7.1.4 Policy
This Subsection provides some general requirements and establishes the policy related to expired
and cancelled appropriation TAFSs.
5.7.1.4.1 Period of Availability
Budget authority is available for new obligations for a fixed period of time, after which no new
obligations may be incurred. Appropriations are available for one year unless otherwise
specified in the appropriation language. Reimbursable authority from orders with other Federal
agencies is limited to the same period of availability as the funds obligated by the ordering
agency.
For five years after the time an appropriation expires for incurring new obligations, both the
obligated and unobligated balances remain available for recording, adjusting, and liquidating
obligations. The caveat for this availability is that the adjustments shall be properly chargeable
to the appropriation and are not new obligations. On 30 September of the fifth fiscal year after
the period of availability for obligation ends, the account is closed and any remaining balance
(whether obligated or unobligated) in the account is cancelled. Once cancelled, it is no longer
available for obligation or expenditure for any purpose.
5.7.1.4.2 Official Accounting Records
31 USC 1554(a) stipulates that any audit requirement, limitation on obligations, or reporting
requirement applicable upon inception of an appropriation shall continue to apply to that
appropriation following expiration of the period of availability for that appropriation. Thus, if an
appropriation act contains a limitation on the obligation of funds for a program, project, activity,
or other purpose, that limitation shall continue to apply during the five-year expired period
following the period of availability for obligation of that appropriation. Additionally, the
limitation shall continue after the appropriation has been cancelled.
Upon enactment of an appropriation, the Department of the Treasury establishes a unique TAFS
to track the availability and use of funds. FINCEN shall establish a corresponding appropriation
code in the accounting system of record for each TAFS established by the Department of the
Treasury. Proper general ledger controls shall be maintained for each appropriation code so that:
1. The assigned appropriation code reflects the same period of availability and other
limitations as the official TAFS.
2. The status of funds for unexpired, expired, and cancelled is tracked and maintained by
appropriation code.
3. System controls are in place to restrict obligations, expenditures, and outlays from
exceeding available funds.
4. New obligations cannot be recorded against expired funds.
5. No obligations, expenditures, or outlays can be recorded against cancelled funds.
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6. General ledger balances are maintained for closed accounts to track cancelled
unobligated balances, unpaid obligated balances, unpaid accounts payable balances, and
uncollected accounts receivable balances.
7. The controls continue until all remaining obligations are paid and accounts receivable
collected.
5.7.1.5 Expired Accounts
5.7.1.5.1 Availability of Expired Funds
No new obligations may be incurred using expired funds.
For five years after the time an appropriation expires for incurring new obligations, both the
obligated and unobligated balances are available for recording, adjusting, and liquidating
obligations properly chargeable to the expired account. Expired funds are also available to cover
unrecorded obligations that shall be properly charged to the expired account and which were
incurred before the funds expired. Upward adjustments to obligations decrease the amount of
expired budget authority, while downward adjustments result in the recovery of budget authority.
See Subsection 5.6.24.1 (Upward/Downward Adjustments to Prior-Year Obligations) for further
guidance on accounting for and reporting adjustments to prior-year obligations.
5.7.1.5.2 Extending the Period of Availability for Disbursements
Unless there is an exception in law, expired authority may be used to make adjustments to
obligations or disbursements only during the five-year period following the last unexpired year.
Some programs have a legitimate need to make disbursements over a longer period than five
years. For example, construction projects may dictate that funds shall not be disbursed until
various project stages are satisfactorily completed, and this may take ten years or longer.
Extended authority to liquidate obligations may be granted through specific legislation which
allows the obligated balance for an annual year or multi-year account to remain on the books and
available for disbursement purposes for a specified period of years. For those funds with
extended authority, after the original fifth expired period of availability, only the obligated
balances shall remain on the books for these accounts and any amounts deobligated shall be
cancelled at the end of the fiscal year in which they are deobligated.
5.7.1.5.3 Replacement Contracts
Where it becomes necessary to terminate a contract because of the contractor’s default or for the
convenience of the Government, the funds obligated under the original contract are available
beyond the original period of the obligation’s availability for the purpose of engaging another
contractor to complete the unfinished work. (See Principles of Federal Appropriations Law
(GAO “Red Book”), Third Edition, Volume I, Chapter 5, Section 6.) For funds to remain
available beyond expiration for a replacement contract, the following conditions shall be met:
1. A bona fide need for the work, supplies, or services shall have existed when the original
contract was executed, and it shall continue to exist up to the award of the replacement
contract. If a terminated contract is found to have been improperly made to fulfill a need
of a fiscal year other than the year against which the obligation was recorded, it would
also be improper to charge that same appropriation for obligations incident to a
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replacement contract. In addition, if contracts made in a subsequent fiscal year do not
satisfy a continuing need for the goods and/or services provided under the original
contract from a prior fiscal year, then the subsequent fiscal-year contracts are not
replacements, and those contracts are not chargeable to the prior fiscal-year
appropriation.
2. The replacement contract shall not exceed the scope of the original contract. If it does, it
is a new obligation and shall be charged to the current-year appropriation (funds currently
available for obligation at the time the replacement contract is entered into).
3. The replacement contract shall be awarded within a reasonable time after termination of
the original contract. Excessive delay raises the presumption that the original contract
was not intended to meet a then-existing bona fide need. The same result may follow if
there is unwarranted delay in terminating the original contract.
4. If the original contract was terminated for convenience, the original contract shall have
been made in “good faith” before prior-year appropriations can be used to fund a
replacement contract.
5.7.1.5.4 Offsetting Collections Credited to Expired Accounts
Spending authority from offsetting collections is accounted for in the Treasury account that filled
the order and that was credited with the offsetting collections. The availability of the spending
authority is the same as the Treasury account to which the offsetting collection is credited.
Offsetting collections that are credited to expired accounts do not provide new budget authority;
they are only available to make expenditures needed to cover upward adjustments to obligations
properly incurred in prior years. These payments are only permitted up to the time that the
authority is cancelled.
5.7.1.5.5 Accounting for Expiring Accounts
In addition to the normal pre-closing entries at year-end, there are specific pre-closing entries
that shall be processed for those appropriation accounts where the period available for incurring
new obligations is about to expire:
1. Commitments are an administrative reservation of funds in anticipation of an obligation.
All commitments in expiring accounts shall be reduced to zero. Because expired
accounts are not available for new obligations, no commitments can be recorded in
expired accounts.
2. If the Coast Guard is performing a reimbursable service for a Federal customer, record
the removal of unfilled customer orders without an advance to the extent the
reimbursable authority from unfilled orders exceeds amounts obligated against the orders.
This adjusting entry shall be posted against each individual order or reimbursable
agreement.
3. Similarly, for reimbursable services for a Federal customer where an advance is received,
record the removal of unfilled customer orders with an advance to the extent the
reimbursable authority from unfilled orders exceeds amounts obligated against the orders.
The Coast Guard shall also return any corresponding advance in excess of amounts
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obligated. This adjusting entry shall be posted against each individual order or
reimbursable agreement.
4. Conversely, if the Coast Guard is the ordering agency, then record a reduction of
obligations in excess of the corresponding obligation recorded by the performing Federal
agency.
5.7.1.5.6 Managing Expired Accounts
Coast Guard financial managers shall actively monitor expired accounts to ensure proper
management of expired funds.
5.7.1.5.7 Validating Existing Obligations
Coast Guard managers shall actively review uncompleted contracts, uncollected accounts
receivable, and unpaid obligations maintained in expired accounts to determine the validity of
such items.
5.7.1.5.8 Closing Expired Obligations
Status reports of the progress achieved in meeting the established targets shall be prepared every
quarter. The status reports shall show, for each Coast Guard financial manager, the actual
number and dollar amount of remaining obligations compared to the targeted number and dollar
amount of remaining obligations for the quarter being reported. This requirement differs from
the quarterly obligation validation process in that:
1. It targets obligations in expired funds only.
2. The objective is to close out obligations, not to validate them.
3. It sets specific goals for Coast Guard financial managers to liquidate/deobligate
obligations and holds them accountable to do so.
5.7.1.5.9 Closing Outstanding Receivables, Payables, and Orders in Cancelling Accounts
To prepare for the closing of expired accounts and the cancellation of expired balances, at the
beginning of the fifth year of an expired TAFS, FINCEN shall provide a report to Commandant
(CG-83) detailing accounting activity for this TAFS. This report shall show all uncompleted
contracts, uncollected accounts receivable, obligations, and unpaid accounts payable, by
document identification number, for each expired TAFS that is to close at the end of the fiscal
year. Coast Guard financial managers shall review all open items listed in the report and
determine the status of each open item.
Specific responsibilities shall include aggressive action to collect outstanding receivables, close
out outstanding orders, and pay outstanding bills. Orders that are no longer needed shall be
cancelled, and the funds deobligated. Refer to Subsection 5.7.1.5.2 (Extending the Period of
Availability for Disbursements) in this Manual on the need to made disbursements over a period
longer than the five-year expired period. If there remains a bona fide business or mission need
for the cancelled order, a new order shall be issued, and obligation shall be charged to an
unexpired account having funds available for the same purpose as the cancelled account.
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5.7.1.6 Cancelled Accounts
5.7.1.6.1 Availability of Cancelled Funds
No obligations, expenditures, or outlays may be charged against cancelled funds.
After the last expired year, the appropriation account is closed, and any remaining balances are
cancelled. The authority to disburse is cancelled and is no longer available for any purpose.
Refer to Subsection 5.7.1.5.2 (Extending the Period of Availability for Disbursements) in this
Manual on the need to make disbursements over a period longer than the five-year expired
period.
5.7.1.6.2 Closing of Appropriation Accounts Available for Indefinite Periods
In accordance with 31 USC 1555, an appropriation account available for obligation for an
indefinite period shall be closed and any remaining balance, whether obligated or unobligated, in
that account shall be cancelled and thereafter shall not be available for obligation or expenditure
for any purpose, only if the following two conditions exist:
1. The President of the United States or the Commandant of the Coast Guard determines
that the purposes for which the appropriation was made have been carried out.
2. No disbursement has been made against the appropriation for two consecutive fiscal
years.
5.7.1.6.3 Accounting for Cancelling Accounts
Cancelling accounts are TAFSs which will be closed at year-end by Treasury and the
corresponding budget authority cancelled. Fixed accounts (annual and multi-year) are
considered cancelling accounts in the fifth year following the expiration of the availability of
funds for obligation. No-year accounts are considered cancelling accounts once the decision is
made to close the account.
In addition to the normal pre-closing entries at year-end (i.e., eliminating all balances in
anticipated resources GL accounts), there are specific pre-closing entries that shall be processed
for cancelling accounts.
1. Any outstanding accounts receivable shall be reduced to zero. Cancelled appropriations
have no more budget authority and cannot retain any receipts or collections for use. Any
subsequent collections credited to a closed account are considered miscellaneous receipts
and shall be returned to Treasury.
2. Any outstanding unpaid obligations or accounts payables shall be reduced to zero. Since
the authority to obligate and/or expend is gone, no payables shall remain in the cancelling
account. The Coast Guard shall also record an entry to reinstate the closed accounts
payable balance as an offset to the remaining cancelled authority in the closed account.
This is necessary to identify the unexpended balance in the closed account. This
unexpended balance shall be reduced by the amount of any future bills properly
chargeable against a closed account that are approved for payment from unexpired funds.
3. Any fund balance remaining in the cancelling account shall be returned to Treasury.
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4. Finally, the remaining expired authority shall be cancelled. This is the last entry posted
to all expired accounts – it changes the account from an expired account to a closed
account.
5.7.1.6.4 Payments from Unexpired Funds for Closed Accounts
31 USC 1553 requires that after the closing of an account, obligations and adjustments to
obligations that would have been properly chargeable to that account, both as to purpose and in
amount, before closing and that are not otherwise chargeable to any current appropriation
account of the agency shall be charged to any current appropriation account of the agency
available for the same purpose. This situation typically arises when a valid bill, requiring
expenditure, is submitted by a vendor after the obligated funds have been cancelled. This
scenario also occurs when unrecorded obligations are identified that otherwise would be charged
against a cancelled TAFS. The total of all such payments from a current appropriation shall not
exceed the lesser of the following amounts:
1. The unexpended balance of the cancelled appropriation (the unexpended balance is the
sum of the unobligated balance plus the unpaid obligations of an appropriation at the time
of cancellation, adjusted for obligations and payments which are incurred or made
subsequent to cancellation, and which would otherwise have been properly charged to the
appropriation except for the cancellation of the appropriation);
2. The unexpired unobligated balance of the currently available appropriation; or
3. One percent (1%) of the total original amount appropriated to the current appropriation
being charged.
a. For annual accounts, the one percent limitation is of the annual appropriation for the
applicable account – not total budgetary resources (e.g., reimbursable authority).
b. For multi-year accounts, the one percent limitation applies to the total amount of the
appropriation.
If more than one appropriation is available to pay the bill, Commandant (CG-831) shall decide
which fund to charge. The activity that originally funded the order is not required to be charged;
31 USC 1553 only requires that cancelled obligations be paid from a current appropriation that is
available for the same purpose. Per OMB interpretation of the language we may only use
appropriations made in current year appropriations acts, even if the Coast Guard activity that
requested or funded the original order receives no benefit from the current appropriation being
charged.
5.7.1.6.5 Offsetting Collections Credited to Closed Accounts
Any offsetting collections credited to a closed account shall be transferred to miscellaneous
receipts in the Treasury. Most collections credited to closed accounts result from either the
collection of accounts receivable balances that were outstanding at the time the account was
cancelled, or the return of advances made by the Coast Guard for undelivered orders that were
subsequently cancelled with the appropriation.
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5.7.2 Year-end Reporting and Closeout
Budgetary accounts follow the budget execution cycle through appropriations, apportionments,
allotments, commitments, obligations, expenditures, and outlays. The budget execution process
is reflected on the Report on Budget Execution and Budgetary Resources, Form SF 133, as
defined by OMB Circular A-11.
The closeout of budgetary activity at year-end is accomplished through the use of USSGL budget
accounts (400000 series). Guidance is issued by OMB and the Bureau of the Fiscal Service of
the Department of the Treasury. Compliance with this guidance is required for Government
financial statements and for budgetary reporting to the President and Congress.
5.7.2.1 Purpose
This Subsection specifies policy for the budgetary closeout process and year-end processing
activities, including:
1. Elimination of budgetary account balances cancelled at year-end in accordance with
Treasury Financial Manual;
2. Reporting of budgetary fund balances in accordance with OMB Circular A-11; and
3. Assignment of responsibilities for issuing policy, developing year-end procedures, and
certifying obligation balances.
5.7.2.2 Scope
This Subsection provides policy for the closeout and reporting of budgetary accounts for Coast
Guard appropriations by:
1. Assigning responsibilities of Coast Guard management for budgetary accounts activities
at year-end;
2. Assigning responsibility for the yearly certification of obligations; and
3. Providing information on the required reporting to OMB and Treasury for budgetary
account balances.
5.7.2.3 Responsibilities
5.7.2.3.1 Assistant Commandant for Resources (CG-8)/Deputy CFO (CG-8/8D)
Commandant (CG-8)/Deputy CFO (CG-8/8D):
1. Monitors year-end closing activities and reporting for compliance with applicable laws
and regulations.
2. Maintains oversight of all budgetary resources.
3. Provides direction and support to Commandants (CG-83) and (CG-84) for year-end
closing of budgetary accounts and financial reporting of Coast Guard-controlled
appropriations.
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5.7.2.3.2 Office of Resource Management (CG-83)
Commandant (CG-83):
1. Coordinates the annual certification of obligations.
2. Establishes, implements, and manages budget execution policies for year-end closing.
3. Prepares and distributes Coast Guard-specific year-end closing guidance.
4. Uses Commandant (CG-84) approved on-top adjustments to general ledger data to
prepare the audited financial statements and Governmentwide Treasury Account Symbol
Adjusted Trial Balance System (GTAS) submissions.
5.7.2.3.3 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Implements, maintains, and monitors the execution of the year-end closeout policy.
2. Provides system support in accordance with Coast Guard policies and year-end closing
instructions.
3. Monitors and reports on the established performance metrics for year-end closing.
4. Implements improvements to the closeout policy, procedures, and process, as needed.
5.7.2.3.4 FINCEN
FINCEN personnel:
1. Verify that adequate documentation is available (electronic or paper) to support balances
of obligations in the general ledger and to justify all year-end adjustments to these
balances.
2. Establish and maintain budgetary and financial systems to close the fiscal year with
accurate budgetary information and reporting.
3. Provide accounting support for Coast Guard units and staff that assist with year-end
closeout.
4. Establish policies and procedures to carry out year-end closeout functions. The policies
and procedures related to these functions and promulgated by FINCEN apply to the entire
Coast Guard.
5. Provide reports to managers to enable them to fully carry out the year-end closeout
process and to carry out their management responsibilities.
5.7.2.3.5 Office of Budget Execution (CG-831)
Commandant (CG-831):
1. Assigns all costs accumulated to the requesting organization’s appropriation prior to
year-end.
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2. Provides annual certification of obligated balances to FINCEN to support the Coast
Guard’s compliance with the requirements in the Year-end Closing Statement, Form
FMS 2108.
5.7.2.4 Policy
5.7.2.4.1 Budgetary Closeout Year-End Processing
FINCEN shall close all budgetary general ledger accounts at the end of the fiscal year, as
required by Treasury Financial Manual year-end closing procedures and OMB Circular A-11.
These actions shall take place in accordance with the year-end closing schedule provided by
Treasury, OMB, DHS, and Commandant (CG-83).
For Unexpired Accounts
Managers shall provide FINCEN with year-end delivered orders accruals for recording in the
accounting system of record for inclusion in the budgetary status reports.
For Expiring Accounts
FINCEN shall close outstanding commitments in expiring accounts by the end of the period that
an appropriation is available for obligation. There can be no commitments in expired accounts.
For Cancelling Appropriations
1. In accordance with OMB Circular A-11 and Treasury Financial Manual, Volume I,
Part 2, Chapter 4200, all outstanding accounts receivable, accounts payable, and all
related obligations shall be closed when appropriations are cancelled.
2. Payment for cancelled account liabilities may be approved from current unexpired funds.
Any cash collections attributable to cancelled TAFSs shall be deposited in the Treasury
as miscellaneous receipts.
5.7.2.4.2 Budgetary Closeout Year-End Reporting
1. FINCEN shall produce the required reports for DHS, OMB, and Treasury at year-end.
The Coast Guard shall report year-end accounting data electronically through the
Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS)
using budgetary and certain proprietary U.S. Standard General Ledger (USSGL)
accounts, in accordance with the current Treasury Financial Manual. Differences may
exist due to prior-year adjustments affecting opening balances on the current-year
financial statements. The Department of the Treasury has issued instructions on this
exception, and other exceptions may be permitted in future OMB Circular A-11 policies.
Required reports include:
a. annual certification – The Year-end Closing Statement, Form FMS 2108,
requires an annual certification of obligations. The quarterly obligation review
and year-end pipeline certification are critical activities that support the annual
certification of obligations.
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b. Governmentwide Treasury Account Symbol Adjusted Trial Balance System
(GTAS) – GTAS collects budget execution data from all Federal agencies. This
electronic submission fulfills the requirements of the Year-end Closing Statement,
Form FMS 2108, and the Report on Budget Execution and Budgetary Resources,
Form SF 133. In addition, a significant amount of the data is used to populate the
prior-year data in the Program and Financing (P&F) Schedule of the President’s
Budget.
c. Year-end Closing Statement, Form FMS 2108 – The annual report on
appropriation and funds balances is required pursuant to I TFM, Part 2,
Chapter 4200. The report is used to prepare the Department of the Treasury pre-
closing trial balance of the central appropriation and fund accounts and to prepare
agency analyses of appropriation and fund balances.
d. Report on Budget Execution and Budgetary Resources, Form SF 133 –
OMB Circular A-11 requires the quarterly preparation and submission of the
Report on Budget Execution and Budgetary Resources, Form SF 133. This is
accomplished via GTAS.
The Report on Budget Execution and Budgetary Resources, Form SF 133, is
designed to show, on a consistent basis and in practical detail, the status of
budgetary resources and related financial data. This report, along with other
information, is intended for use by DHS and OMB in reviewing each TAFS’
resources and status of resources, in managing the rate of incurring obligations
and outlays, and as a basis for initiating requests for reapportionments and
transfers.
2. FINCEN shall perform a tie-point reconciliation between proprietary general ledger
accounts and budgetary general ledger accounts. Based on USSGL posting logic,
Treasury requires that certain general ledger accounts or combinations of general ledger
accounts be equal at year-end – these relationships represent tie points.
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Appendix 5-1 Summary of Change in Financial Plan Signature Authority
1. This appendix summarizes the delegation of signature authority for approval of all
Changes in Financial Plan (CIFPs) and reimbursable agreements for the Operations &
Support (O&S) and General Funds (GF) appropriations, including:
a. Procurement, Construction, and Improvement (PC&I);
b. Alteration of Bridges (AB);
c. Boat Safety (BS);
d. Environmental Compliance and Restoration (EC&R);
e. Oil Spill Recovery, Coast Guard (OSR);
f. Research & Development (R&D);
g. Retired Pay (RP);
h. Reserve Training (RT).
Note: The approval levels in this summary do not take the place of appropriate level of
policy approval for these financial transactions. Policy approval must be obtained first.
2. O&S reimbursable agreements:
a. Commandant (CG-83) may sign all O&S reimbursable agreements when the Coast
Guard provides all the services detailed in the FMOP (Distributed Reimbursables),
upon approval of final FMOP, which is signed by Commandant (CG-09).
b. Commandant (CG-83) may also sign all O&S reimbursable agreements listed in the
FMOP (Undistributed Reimbursables), upon approval of the final FMOP and
associated CIFPs. RMOs may approve reimbursable agreements under $l00,000.
c. The reimbursable agreement may require a CIFP if reimbursing any AFC outside of
AFC 80.
3. Change in Financial Plan (CIFP):
The dollar threshold signature authority will be as follows:
a. $1 to $500K:
Reimbursable Budget Analyst, Commandant (CG-831) (O&S) (excludes
reprogramming); and
Reimbursable Budget Analyst, Commandant (CG-831) (GF, less PC&I)
b. Up to $1M:
Asst. O&S Appropriation Manager, Commandant (CG-831) (O&S);
O&S Appropriation Manager, Commandant (CG-831) (O&S);
Senior Budget Analyst, Commandant (CG-831) (GF);
General Funds Appropriation Manager, Commandant (CG-831) (GF); and
Reimbursable Program Team Lead, Commandant (CG-831).
c. Up to $5M:
Commandant (CG-831)
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d. $5M and over:
Commandants (CG-83D), (CG-83), (CG-8D), and (CG-8)
Note: (1) In the absence of Commandant (CG-83) and Commandant (CG-83) deputy,
Commandant (CG-831) is delegated authority for CIFP’s in excess of $5 million. (2) In the
absence of Commandant (CG-831) the Commandant (CG-831) deputy is delegated authority for
CIFP’s in up to $5 million.
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Appendix 5-2 Fund Request Formats
1. Message Format
FM: (ATU)
TO: COMMANDANT//CG- (operating/support manager), CG- (AFC/target manager),
CG- (appn manager)//
INFO (CHAIN OF COMMAND)
BT
UNCLAS //N07l30//
SUBJ: REQUEST FOR (appn) FUNDS (AFC/project)
A. (Ref, if any)
1. (AFC/project) funds of $(amount) are requested (qtr) FY-(YR)
2. Justification, details, etc.
BT
2. Letter Format
Use comparable format. Address to manager/support manager.
Copies to AFC target manager and appropriation (appn) manager.
All requests must clearly state actual amount requested, AFC/project, quarter, and FY with
justification and details.
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Appendix 5-3 Contents of a Typical FEMA Reimbursement Request
1. Basic Requirements:
a. Description of scope of work;
b. Reimbursable “Yes” or “No”, relevant funding limit;
c. The Emergency Support Function Number, if applicable, or the FEMA program
which the MA is supporting;
d. FEMA-assigned disaster number;
e. FEMA Agency Location Code;
f. Mission Assignment number (with a copy of the MA letter and any subsequent
requests for assistance);
g. Brief description of missions conducted;
h. Unit providing support;
i. Accounting classifications used;
j. Point of contact and commercial phone number. This person will serve as the long-
term financial point of contact (POC) for any follow-up action by FINCEN,
Headquarters, or FEMA; and
k. An administrative signature certifying that expenditures claimed have been reviewed
and are relevant to the mission assigned, and that costs are reasonable and supported
by records maintained by the Coast Guard.
2. On a separate sheet in the package, also provide the following:
a. Amount previously submitted for billing to date;
b. Current billing amount, period of billing (i.e., from date…to date), and a statement of
whether this is an interim or final billing;
c. Cumulative amount billed to date;
d. An explanation of charges broken down into the following categories by object class:
1) Personnel services. Summary supporting data will be reported for:
a) Permanent Federal agency personnel to include:
i. Total number of personnel;
ii. Total overtime hours; and
iii. Total overtime wages.
b) Temporary and local-hire personnel to include:
i. Total number of personnel;
ii. Total hours;
iii. Total regular wages; and
iv. Total overtime wages.
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c) Temporary duty travel to include:
i. Total transportation;
ii. Total per diem; and
iii. Total other TAD expenses (e.g., hotel expenses, car rentals, meals, and
taxes). Note: Receipts for expenses of this type must be included in the
reimbursement package.
d) Civilian and military personnel expenses will be listed separately.
2) Transportation expense of materiel. Identify expenses for the transportation of
things and for their care en route.
3) Cost of materials, equipment, and supplies:
a) Total amounts for expendable and nonexpendable materials, equipment, and
supplies will be reported separately.
b) Specify if the costs incurred are from regular stocks or outside vendors.
i. If from regular stock, provide detailed listing as well as the cost per
item. The billing should also address whether items are expendable,
nonexpendable, serviceable, or returned to inventory (reparable item).
ii. If from outside vendors, an inventory list shall be submitted for all items
individually costing over $1,000, along with a detailed description of the
items. The description shall include:
(a) Serial number;
(b) Model number;
(c) Cost per item; and
(d) Disposition of purchased item. Disposition will be identified as
inventory, repairable, or salvage.
c) Specify if nonexpendable goods are in possession of FEMA or the reporting
unit.
d) For reimbursement requests associated with standard fuel and maintenance
costs, report the number of hours of operation for each type of resource, the
appropriate object/subject class for fuel and maintenance, and the costs
associated with the fuel and maintenance portion of facility costs as defined in
Reimbursable Standard Rates, COMDTINST 7310.1 (series).
4) Costs of contracts for services, listed by title with an itemized breakdown of costs
and brief explanation/description of each contract, including the contract number
or purchase order number.
5) Leased equipment. Provide the following information:
a) Item description, cost per item, and number leased;
b) Vendor’s name, address, phone number, and account number (subject to
personal identifiable information (PII) restrictions);
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c) Contract number or purchase order number;
d) Date returned to the vendor.
Note: Leased items billed to FEMA shall have a receiving report attached showing receipt by
the Coast Guard. If, at the end of the MA, the Coast Guard either fails to return an item to the
vendor or decides to continue leasing it for its own use, FEMA shall be billed only for the
charges incurred during the MA period. (FEMA will reject all charges that extend beyond the
MA period.)
6) Agency-provided services. Identify the service provided and the cost.
7) Other costs which are considered eligible or otherwise agreed to by FEMA or the
Federal coordinating officer. Note: Receipts must be included in the
reimbursement package.
8) Receipts for nonexpendable materials, equipment, and/or supplies turned over to a
FEMA project administrator.
3. Submit a completed Mission Assignment Reimbursement Request Transmittal Form,
which is located on the FEMA website at
http://www.fema.gov/pdf/government/transmittal.pdf.
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Appendix 5-4 Expenditures Eligible for FEMA Reimbursement
Only incremental costs directly related to the disaster relief effort or other incident will be billed
to and reimbursed by FEMA. The following types of expenditures are eligible for
reimbursement:
1. Overtime, travel, and per diem of permanent Coast Guard civilian personnel.
2. Wage/salary (regular time and/or overtime), travel, and per diem of temporary Coast
Guard civilian and reserve military personnel assigned, activated, or recalled, as
appropriate, solely to perform services directed and required to provide assistance in
response to emergency operations.
3. Travel and per diem of Coast Guard military personnel assigned solely to perform
services in support of the emergency operations.
4. Cost of work, services, and materials procured under contract to support emergency
response operations. The purchase order becomes part of the billing package. This is an
example of how to determine incremental costs.
5. Cost of materials, equipment, and supplies (including transportation, repair, and
maintenance) from regular Federal stocks used solely to support emergency operations.
In the case of reimbursement for operating costs of Coast Guard facilities (i.e., cutters,
boats, and aircraft), claims shall be limited to the incremental/variable portion of standard
facility costs as outlined in totality in Reimbursable Standard Rates,
COMDTINST 7310.1 (series), and specifically in the included Commandant (CG-83)
memo defining Coast Guard variable rates.
6. All costs incurred which are paid from trust, revolving, or other funds, and whose
reimbursement is required by law.
7. Other costs submitted with written justification or otherwise agreed to in writing by the
FEMA regional director or designated representative.
8. Regular mission costs may be incurred as the result of any event of national significance
before the declaration of (or during) an emergency or a disaster, and before the direction
of MAs by FEMA. In these cases, regular mission costs are not incremental costs that
may be charged to FEMA as directly related to the disaster relief effort or other incident.
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Chapter 6. Continuing Operations without Appropriations
6.1 Situation
This document has been developed to provide policy guidance and instructions for actions to be
taken by the Coast Guard when the failure of Congress to enact either regular appropriations, a
continuing resolution, or needed supplements results in a funding hiatus. (This funding hiatus is
also referred to as a “lapse in appropriations”, or “shutdown”, and those terms are used
interchangeably in this document.) The Antideficiency Act, 31 USC 1341(a)(1), requires that, in
the absence of appropriations, no obligations may be incurred, including salary expenses, unless
authorized by law. In very limited circumstances 41 USC 6301 allows the Coast Guard to enter
into obligations, but not disburse funds, for clothing, subsistence, forage, fuel, quarters,
transportation, or medical and hospital supplies, which, however, shall not exceed the necessities
of the current year. The following plan complies with the guidance provided by the U.S.
Attorney General and Office of Management and Budget (OMB), Circular A-11, Preparation,
Submission, and Execution of the Budget, Section 124.
6.2 Policy
In the absence of appropriations, the Coast Guard will comply with the following provisions of
OMB Circular A-11:
1. Federal officers may not incur any obligations that cannot lawfully be funded from prior
appropriations unless such obligations are otherwise authorized by law.
2. Federal officers may incur obligations as necessary for the orderly termination of an
agency’s functions, but funds may not be disbursed.
To satisfy the provisions above, obligations for orderly termination must be fully documented to
support a bona fide need and be directly tied to an exempt mission described in Financial
Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series),
Chapter 6, Procedure No. 6.2.1, Step 5.1.2 (Activity by Mission). The Finance Center
(FINCEN) or any other Coast Guard payment office will not make payments during a funding
hiatus related to the actions discussed in provisions 1 and 2 above.
Personnel and facility utilization shall be as outlined in Financial Resource Management Manual
– Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 6, Procedure No. 6.2.1,
Steps 5.1.3 (Activity by Category of Personnel) and 5.1.4 (Activity by Facility), respectively.
OMB Circular A-11 states that plans for agency actions during a lapse of appropriations should
describe actions to be taken during a short lapse. This plan guides the Coast Guard for the
duration of the funding hiatus not expected to be greater than seven calendar days. Any lapse
longer than seven days in duration will require a modification of plans and will be the subject of
additional Coast Guard Headquarters or Department of Homeland Security (DHS) direction.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 6 (Continuing Operations without Appropriations) for
detailed procedures on the actions taken by the Coast Guard to orderly terminate activities in the
event of a lapse in appropriations.
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Chapter 7. Accounting Policies and Standards
7.1 Required Use of the U.S. Standard General Ledger
This Section specifies overarching financial policy with the intention of ensuring that the Coast
Guard’s use of the U.S. Standard General Ledger (USSGL) is in compliance with all applicable
laws and regulations.
This Section applies to all units involved in general ledger (GL) accounting for any and all Coast
Guard appropriations and funds.
Note: Financial applications that do not contain a GL must nevertheless be operated in a manner
that conforms to USSGL requirements. For example, a payroll system, which processes
transactions in accordance with USSGL transaction rules, sends summarized data to the core
financial system for appropriate posting, and provides for sufficient traceability from the GL
balances to the source documentation is considered to be in compliance with USSGL
requirements at the transaction level, even though the payroll system is not itself a complete GL.
7.1.1 Overview
The Coast Guard is required by law to implement the USSGL at the transaction level throughout
its financial management systems. Specifically, Section 803 of the Federal Financial
Management Improvement Act of 1996 (FFMIA) states:
Each agency shall implement and maintain financial management systems that
comply substantially with Federal financial management system requirements,
applicable Federal accounting standards and the United States Government
Standard General Ledger at the transaction level.
This includes both financial systems and mixed or feeder system applications.
The USSGL is the basic structure used to support the consistent recording of financial events. It
provides a uniform chart of accounts, account descriptions, transaction codes, transaction
posting, mandatory attributes, report crosswalks, and associated technical guidance to be used in
standardizing Federal agency accounting and reporting. It incorporates both proprietary and
budgetary self-balancing accounts (total debits equal total credits). In addition, the USSGL
facilitates the preparation of the standard external reports required by central agencies such as
OMB and Treasury.
The most recent information on the USSGL may be found at
http://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm.
According to Office of Management & Budget (OMB), Memorandum M-13-23, Appendix D to
Circular No. A-123, Compliance with the Federal Financial Management Improvement Act of
1996, September 2013, agencies may supplement the application of the USSGL to meet specific
information requirements in accordance with the guidance contained in the USSGL supplement
to Treasury Financial Manual. This supplement allows agencies to expand the USSGL
numbering system (including attributes) to as many digits as necessary to accommodate agency-
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specific requirements; however, these subsidiary accounts must summarize or “roll-up” to the 6-
digit USSGL accounts, plus any related attributes.
Since the 6-digit USSGL accounts are classified to include all types of accounting transactions,
all Coast Guard transactions can be accommodated by the USSGL. This flexibility permits the
creation of CG-specific accounts for unique mission and business processes, including
immediate oil-spill response and search-and-rescue missions.
The FFMIA requires that any audit finding of substantial USSGL noncompliance be addressed in
a remediation plan. Coast Guard implementation of this requirement is detailed in Paragraph 10
of the policy that follows.
Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS) has
replaced FACTS I and FACTS II for reporting trial balance data.
See https://www.fiscal.treasury.gov/fsservices/gov/acctg/gtas/gtas_home.htm for additional
information.
7.1.2 Authorities
1. Federal Financial Management Improvement Act of 1996 (FFMIA). Section 803(a),
PL 104-208, Division A, Section 101(f), Title VIII.
http://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
2. Office of Management & Budget (OMB), Memorandum M-13-23, Appendix D to
Circular No. A-123, Compliance with the Federal Financial Management Improvement
Act of 1996, September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
3. Department of the Treasury, Bureau of the Fiscal Service, U.S. Government Standard
General Ledger, Supplement No. S2 Treasury Financial Manual [series], Part 1 and
Part 2, “Fiscal 2015 and 2016 Reporting”.
http://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm
7.1.3 Responsibilities
The following Coast Guard units shall implement the USSGL throughout the Coast Guard’s
financial management systems:
1. Aviation Logistics Center (ALC);
2. Surface Forces Logistics Center/Yard (SFLC/Yard);
3. Finance Center (FINCEN);
4. National Pollution Funds Center (NPFC); and
5. Pay and Personnel Center (PPC).
The Financial Reporting and Analysis Division Commandant (CG-842) general ledger desk
officer shall be responsible for:
1. Utilizing and maintaining (including updates and changes) the master chart of accounts
and transaction codes.
2. Filing all current Coast Guard charts of accounts.
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3. At least annually, accessing the Coast Guard’s GL systems and documenting a
comparison of the GL systems’ charts of accounts with the filed charts of accounts.
4. Researching any discrepancies found between the master chart of accounts and the
financial systems’ chart of accounts, and take all necessary corrective actions and
document them to allow for the Coast Guard’s assertion of compliance with the USSGL.
5. Performing procedures to test internal controls over the Coast Guard’s use of the USSGL.
7.1.4 Policy
1. All Coast Guard financial management systems shall utilize the USSGL to record
financial events in compliance with Federal law.
2. The Coast Guard shall utilize the USSGL Supplement (released annually) by adhering to
the guidance presented in its five major sections:
a. Chart of Accounts;
b. Account Descriptions;
c. Accounting Transactions and Transaction Codes;
d. USSGL Attributes; and
e. Report Crosswalks.
3. The Coast Guard’s Chief Financial Officer (CFO), in collaboration with the responsible
units listed above, shall establish a Coast Guard-wide standard general ledger chart of
accounts. This master chart of accounts shall substantially comply with the USSGL’s
chart of accounts, including account descriptions, and shall incorporate budgetary,
proprietary, and memorandum accounts that link to all typical Coast Guard business
events.
4. The Coast Guard shall process and record transactions consistent with the definitions and
processing rules defined in the USSGL; i.e., there shall be uniform treatment of similar
transactions by Coast Guard units at all levels.
5. The Coast Guard shall utilize the USSGL accounting transactions and codes to identify
the appropriate transaction posting for every Coast Guard business event. Treasury’s
Bureau of the Fiscal Service maintains a USSGL website that includes typical accounting
scenarios, accounting transaction categories, accounting transaction codes, and guidance
on accounting for unique issues. The website address is:
http://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm.
6. Currently, Treasury’s basic six-digit structure of the USSGL consists of:
100000 Assets
200000 Liabilities
300000 Net Position
400000 Budgetary
500000 Revenue and other Financing Sources
600000 Expenses
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700000 Gains/Losses/Miscellaneous Items
800000 Memorandum
The standard USSGL account attributes required for the reporting of proprietary account
information and budgetary account information are defined in USSGL TFM Supplement
No. S2 Section IV of the USSGL, which can be found on Treasury’s Bureau of the Fiscal
Service website: http://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm.
7. In accordance with the stated purpose of the USSGL, resulting detailed transaction
postings, linked to specific business and accounting events, shall facilitate internal and
external reporting, and shall be readily available for research, ad hoc requests, and annual
audit needs.
8. The Coast Guard shall review and update its USSGL accounts whenever the Bureau of
the Fiscal Service updates the USSGL. (USSGL updates are published by Treasury,
which requires agencies to make any necessary changes to remain substantially
compliant.)
9. In addition, the Coast Guard shall review its master chart of accounts, account
descriptions, typical transactions, transaction codes, attributes, and report crosswalks, at
least annually, to ensure Coast Guard compliance with applicable laws and regulations.
10. In accordance with the FFMIA, if the annual CFO audit reveals substantial USSGL
noncompliance, the Coast Guard shall devise a remediation plan designed to bring its
financial management systems into substantial compliance no later than three years after
the audit finding date. If it is determined that the systems cannot be made substantially
compliant within three years, the Commandant shall:
a. Specify the most feasible date for bringing the systems into compliance with the
USSGL; and
b. Designate a Coast Guard official who will be responsible for bringing the systems
into compliance by the most feasible date.
7.2 Obligations – By Document Type and/or Object Class
An obligation is a legally binding agreement that will result in outlays (payments), immediately
or in the future. Obligations incurred are the amounts of orders placed, contracts awarded,
services received, or similar transactions during an accounting period. These amounts include
payments for obligations not previously recorded, adjustments between obligations previously
recorded, and actual payments to liquidate those obligations. Obligating the Government is an
inherently Governmental activity/function and contract employees cannot legally obligate the
Government. This includes all procurement documents that obligate the government, including
contracts, MIPRs, MILSTRIPs, and purchase cards. Obligation management plays an important
role in the budget execution process even after an appropriation has expired. Payments to
liquidate obligations can be made for five years after the appropriation expires. After the five-
year period, appropriation accounts are cancelled and closed. Obligations or adjustments to
obligations that would have been properly chargeable to a cancelled appropriation may be paid
from an unexpired appropriation that is available for obligation for the same purpose as the
cancelled account. However, no more than one percent of current year appropriations are
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authorized to cover valid unrecorded obligations made against closed appropriation accounts
(Office of Management and Budget (OMB) Circular A-11). Consequently, the budget execution
process, or life cycle, for an appropriation made in a given fiscal year can extend well into the
future. Management and oversight of obligations are needed at each stage in the cycle to
maintain effective and efficient budget execution.
Accordingly, this Section addresses the following:
1. Recording financial transactions that result in the Coast Guard’s use of budgetary
resources.
2. Describing the obligation process and defining related operating procedures:
a. Recording obligations into the accounting system of record; and
b. Monitoring and validating obligations.
3. Identifying key internal controls to maintain the reliability of the budgetary resource
management process.
Identifying document types that require obligation of funds (see Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7,
Section 7.2, Procedure No. 7.2.3, Figure 7.1 (Required Obligations by Document Type)).
Note: Accrual policy for budget execution is presented in Section 7.13 (Accrual Policy). For
detailed responsibilities and procedures on the recording, processing, and monitoring of
obligations, refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.2 (Obligations – By Document Type
and/or Object Class).
7.2.1 Purpose
This Section establishes the requirements for proper recording, processing, and monitoring of
obligations (and any modifications to obligations) entered into the accounting system of record.
This policy provides guidelines for the Coast Guard to monitor all obligations on a continual
basis and to validate them within established timelines. This policy also provides guidance to the
effect that:
1. The Coast Guard establishes obligations to provide funds control and funds management.
2. Obligations are recorded in the proper amount, account, and period; and only valid
transactions are recorded in the accounting system of record.
3. Funds are obligated and available to meet Coast Guard operating requirements within a
funds control structure that meets the regulatory and legal requirements prescribed by the
Antideficiency Act and OMB Circular A-11.
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7.2.2 Responsibilities
7.2.2.1 Assistant Commandant for Resources (CG-8)/Chief Financial Officer
(CFO)
Commandant (CG-8)/CFO:
1. Accurately reports obligated balances in the financial statements in accordance with
Department of Homeland Security (DHS) and other reporting requirements.
2. Establishes and enforces the requirements, policies, systems, and procedures necessary to
comply with statutory and regulatory finance and accounting requirements.
3. Provides financial policy for the creation, approval, modification, monitoring, and
validation of obligations, and the certification of account balances.
7.2.2.2 Office of Resource Management (CG-83)
Commandant (CG-83) implements, maintains, and monitors the execution of this obligation
policy.
7.2.2.3 Finance Center (FINCEN)
FINCEN personnel maintain finance and accounting requirements, systems, and functions for all
appropriated, working capital, revolving, and trust fund activities, including security assistance
funds.
7.2.2.4 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913):
1. Develops, implements, and maintains Coast Guard acquisition policy directives and
procedures including Coast Guard Acquisition Procedures (CGAP) and Head of
Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases Using
Simplified Acquisition Procedures, October 2016.
2. Develops, implements, oversees, and evaluates Coast Guard acquisition, contracting, and
procurement policy, directives, and procedures consistent with the policies outlined in
Major Systems Acquisition Manual (MSAM), COMDTINST M5000.10 (series).
3. Assists with aligning the Coast Guard procurement policy with the obligation policy by
serving as a control and review point for external and internal acquisition directives and
publications.
Note: For additional detailed responsibilities on the recording, processing, and monitoring of
obligations for the following Coast Guard personnel and personnel mentioned above, refer to
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.2 (Obligations – By Document Type and/or Object Class):
1. Assistant Commandant for Resources (CG-8)/CFO;
2. Office of Resource Management (CG-83);
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3. Funds Control Division (CG-831);
4. Appropriation Managers;
5. Allowance Managers, Target Managers, and Program Element Managers;
6. FINCEN;
7. Office of Procurement Policy & Oversight (CG-913);
8. Chief of the Contracting Office (COCO);
9. Contracting Officers (KOs), Purchasing Agents, Cardholders, and Other Obligating
Authorities;
10. Contracting Officer’s Representatives (CORs);
11. Management Review Officials (MROs); and
12. Reconcilers.
7.2.3 Policy
This obligation policy is divided into three major Subsections:
1. “General Requirements for Recording Obligations” provides guidance on the definition
of an obligation, the standards for valid obligations, the documentation necessary to
support an obligation, and the requirements for approving and recording obligations.
2. “Obligation Document Requirements” provides more specific policy that guides the
recognition of valid obligations on a document/transaction basis, guidance for when this
obligation shall be recognized, and specific policy for the valuation of the obligation.
3. “Monitoring and Certification” provides direction for monitoring obligations during
budget execution, management controls to support the quarterly certification of
obligations, and executive metrics for monitoring obligations at the agency and Treasury
Appropriation Fund Symbol (TAFS) level.
These policies work together to support the Coast Guard’s budget execution so that obligations
are properly recognized, recorded, summarized, and reported.
7.2.3.1 General Requirements for Recording Obligations
1. All Coast Guard personnel committing and obligating funds shall align all approvals and
authorizations with their corresponding orders or contracts for goods or services.
2. Funds must be available within the limits established in the funds control system, as
evidenced by one or more signed documents. (Approved electronic signature is
permissible.)
3. The Coast Guard shall only record obligations when sufficient documentation (identified
in Paragraph 8 below) is available. The documentation shall comprise a complete record
of the transaction, and shall be in accordance with all Coast Guard policies and
procedures before the obligation may be recorded.
4. All obligations shall be signed, dated, and approved by Coast Guard officials who have
been delegated the authority to obligate Coast Guard funds. Only individuals who have
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proper written delegations of authority may incur obligations on behalf of the Coast
Guard. Unauthorized individuals who incur obligations may be subject to personal
liability.
5. All obligations shall be entered into the Coast Guard accounting system of record by the
appropriate delegated Coast Guard obligation official. The obligation shall be supported
by approved supporting documentation in accordance with the Paperwork Reduction Act.
At a minimum, the obligating document shall have one level of approval prior to its entry
into the Coast Guard accounting system of record.
6. The program element manager shall determine the availability of funds, and shall certify
fund availability before an obligation is incurred and before a change is made to a
contract, purchase order, or other document that increases the amount of the original
obligation. In certain cases, the determination of funds availability for each transaction
prior to the release of obligating documents may not be practical (e.g., the issuance of
numerous minor purchase requests by authorized persons located far away from a
financial management office). In these instances, special procedures (e.g., Government
purchase cards) may be established to meet the particular local requirement, provided that
such procedures include adequate safeguards to confirm the availability of funds to cover
the transactions. A copy of any special procedures developed shall be forwarded to
Commandant (CG-8) for approval.
7. Obligations or expenditures in advance of appropriations, apportionments, and allotments
are not authorized. Unless specifically authorized by law, Coast Guard obligating
authorities shall not incur obligations or expenditures before:
a. The appropriation act is enacted;
b. The amounts are apportioned to the Coast Guard by OMB; and
c. The amounts are allotted to the Coast Guard by DHS.
8. An obligation shall be recorded in the accounting system of record when supported by
documentary evidence of:
a. A binding agreement, in writing, between the parties (including Government
agencies), in a manner and form and for a purpose authorized by law and executed
before the expiration of the period of availability for obligation of the appropriation
concerned. This agreement must be for specific goods to be delivered, real property
to be purchased or leased, or work or services to be performed.
b. A valid loan agreement, showing the amount of the loan to be made and the terms of
repayment.
c. An order required by law to be placed with a Government agency.
d. An order issued pursuant to a law authorizing purchases without advertising when
necessitated by public exigency for perishable subsistence supplies within specific
monetary limitations.
e. A grant or subsidy payable:
1) From appropriations made for payment of, or contributions to, amounts required
to be paid in specific amounts fixed by law or under formulas prescribed by law;
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2) Under an agreement authorized by law; or
3) Under approved plans, consistent with and authorized by law.
f. A liability that may result from pending litigation brought under authority of law.
g. Employment or services of persons, or expenses of travel, in accordance with law.
h. Services performed by public utilities.
i. Any other legal liability of the United States against an appropriation legally available
for that purpose.
9. Coast Guard financial managers shall review obligating documents to determine that a
valid recordable obligation exists. The documents must contain detailed information
allowing the financial manager to make the determination that a valid obligation exists.
While specific details may vary, the following information shall be included:
a. Obligation document number and type of obligating document;
b. Date of the last required signature on the obligating document;
c. Contractor’s or vendor’s name and address;
d. Amount of the obligation;
e. Quantity and description of the supplies or services being procured;
f. Complete accounting classification; and
g. A statement that all required signatures have been obtained.
10. Coast Guard obligating authorities shall record obligations in accordance with the
provisions of these requirements. In recording obligations, the following principles
related to the bona fide needs rule apply (see the Government Accountability Office
(GAO) “Red Book,” Principles of Federal Appropriations Law, Volume I, Chapter 5,
Section B):
a. An obligation must satisfy a bona fide need during the period for which the
appropriation is available.
b. Contracts entered into or orders placed for goods or services shall be executed only
with the intent that the contractor or other performing activity commence work and
perform the contract before the appropriation expires.
c. The balance of an appropriation limited for obligation to a definite period is available
only for payment of expenses properly incurred during the period of availability or to
complete contracts properly executed within that period of availability.
d. Goods or services required pursuant to contracts entered into or orders placed
obligating a one-year appropriation must serve a need existing in that fiscal year,
unless an exception is specifically authorized by law. The Coast Guard’s one-year
appropriation authorizes a period of performance that may occur during the next
fiscal year for contracts for training, investigations, costs associated with personnel
relocation, and other services.
e. A multi-year appropriation for goods or services required pursuant to contracts
entered into or orders placed is available for a definite period in excess of one fiscal
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year. Except for the extended period of availability, multi-year appropriations are
subject to the same principles applicable to annual appropriations.
f. A no-year appropriation for goods or services required pursuant to contracts entered
into or orders placed is available without fiscal-year limitations. All statutory time
limits as to when the funds may be obligated and expended are removed, and the
funds remain available for these original purposes until expended.
11. The provisions of the obligation document and the nature of the transaction involved
shall be carefully considered in determining when an obligation has been incurred and in
what amount.
12. Obligations shall not be made simply for the purpose of extending the life of the
appropriation (i.e., “parking funds”). Commandant (CG-8) and contracting personnel, in
cooperation with FINCEN, shall review the status of funds to avoid excessive fund
balances.
13. In order to record an obligation, the financial manager must be in possession of a valid
written obligating document. However, in limited circumstances (when the obligating
organization is underway), written evidence that a valid obligating document exists is
acceptable until a copy of the document is received. In such cases, immediate action
shall be taken to obtain the required copy of the actual document.
a. The certifying officer shall be in possession of the actual obligating document prior to
payment.
b. The appropriate financial manager shall be in possession of the obligating document
prior to the submission of the year-end certification of obligations (submitted as of
30 September).
c. The following serves as written evidence that the obligating document exists:
1) A letter, facsimile, e-mail, or other written communication from the individual
having physical possession of the valid obligating document; or
2) A record of a telephone conversation with the individual having physical
possession of the valid obligating document, said record being signed by the
individual receiving the communication.
14. All obligations shall be recorded in the accounting system of record at the time a legal
obligation is incurred, or as close as feasible to the time it is incurred. The recording of
valid obligations shall not be delayed under any circumstances, including delays to await
the movement of funds to the entity that incurred the obligation.
15. The exact amount of the Coast Guard’s liability should be recorded as the obligation,
when the amount is known. However, when an obligation is incurred and the exact
amount of the obligation is not known, the obligation shall be recorded with the
obligating authority’s best estimate and shall be noted as such on the obligating
document. When the actual amount of the liability becomes available, the obligation
shall be modified by an authorized individual.
16. A procurement directive, obligation authority, administrative commitment document,
citation-of-funds, or other document which serves only to administratively reserve funds
for specific use does not constitute documentary evidence of an obligation. For
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information on the commitment policy, see Subsection 5.6.2 (Commitments – By
Document Type and/or Object Class).
17. If an obligation was previously recorded as a commitment, reduce or cancel the
commitment and record the obligation in the accounting system of record.
18. An amount is not recordable as an obligation when supported only by a verbal order or
agreement. A verbal order or agreement must be documented in writing and must
conform to the applicable provisions of this Section before the obligation may be
recorded. If goods are received and accepted, the receiving report may be used as the
documentary evidence for recording the obligation, up to the amount of such delivery.
19. When supplies are ordered utilizing automated procedures, the recording of the obligation
may be based on a signed summary printout of the documents, provided other applicable
requirements of this Section are met. The printout shall be in auditable form, verified for
correctness, and approved by an authorized individual.
20. When, after proper authorization, an obligation is executed by a performing entity for
another entity responsible for accounting for the obligation, the performing entity shall
provide the necessary documentation to the financial management office of the
accounting entity in a timely manner so that the transaction can be promptly recorded.
21. All obligations shall be entered into the Coast Guard financial system prior to any
disbursement made against the obligation. Allowed exceptions to this rule relate to the
simultaneous recording of obligations and expenditures (compound transactions).
Examples of compound transactions include purchases using a Government purchase
card, and local travel.
22. An obligation that is established and liquidated simultaneously by a disbursement shall be
recorded in the same manner as an obligation that is recorded prior to recording the
disbursement.
23. A contingent liability is generally not recordable as an obligation under the provisions of
this Section.
24. An antecedent liability is generally not recordable as an obligation. These liabilities are
normally contained in contracts providing for obligation of funds contingent upon the
occurrence of an event.
25. A signed, reproduced, or certified true or confirmed copy of the document obligating the
Coast Guard shall be retained in the accounting files to support the obligation. Where
purchase orders or other documents are prepared on a reproducible master, the
reproduced signature is acceptable. Each signed or reproduced copy of the signed
contract or modification, intended to have the same force and effect as the signed
original, shall be marked “Duplicate Original.”
26. Obligations shall be recorded in the accounting system of record to support the actual
status of funds and costs incurred in the financial statements of each reporting period.
7.2.3.2 Obligation Document Requirements
This Subsection discusses events that require the recording of an obligation. It is divided into
twelve topics:
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1. Contracts;
2. Purchase Orders;
3. Travel Orders;
4. Training;
5. Payroll;
6. Government Purchase Cards (Bank Cards);
7. Rents, Communications, and Utilities;
8. Grants;
9. Miscellaneous Obligating Documents;
10. Transportation of Government Property and Supplies;
11. Postage; and
12. Reduction of Existing Obligations.
Each topic covers the elements that are necessary for recognizing and recording an obligation,
the timing for recording the obligation, and the obligated amount to be recorded. The topics also
include policy on events that require adjustments to obligated amounts (e.g., partial versus full
funding).
Recording amounts in a consistent manner assists managers as they monitor accounts and make
funding decisions. Policy prescribing the amount to record allows for the consistent calculation
of the amount, increasing the likelihood of two individuals calculating the same amount, given
the same assumptions.
Following is a list of the various types of obligations:
1. Contracts that are not incrementally funded;
2. Contracts with/through the Small Business Administration (SBA);
3. Cost reimbursable contracts;
4. Firm-fixed-price or cost-reimbursable level-of-effort term;
5. Fixed-price contracts with economic price adjustments;
6. General contract requirements;
7. Government purchase cards;
8. Grants;
9. Incrementally funded contracts;
10. Indefinite delivery contracts;
11. Intragovernmental transactions;
12. Letter contracts;
13. Miscellaneous obligating documents;
14. Payroll;
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15. Postage;
16. Purchase orders;
17. Rents, communications, and utilities;
18. Replacement contracts;
19. Time and material contracts;
20. Training;
21. Transfer of authority to obligate at the TAFS level;
22. Transportation of Government property and supplies; and
23. Travel orders.
7.2.3.2.1 Contracts
7.2.3.2.1.1 General Requirements
1. Services and supplies that are purchased by contract are recorded as obligations at the
time there is a binding agreement, which is usually when the contract is signed. As a
general rule, the amount of the obligation is the maximum liability to the Government.
The maximum liability to the Government is normally limited by the terms of the
contract (e.g., cancellation clauses, limitation of funds clauses).
2. The amount evidenced by a contractual document is not recordable as an obligation until
the document is:
a. Signed by the contractor or other performing agency when required (which may
include electronic signature);
b. Signed by an authorized representative of the Coast Guard (i.e., a Contracting
Officer);
c. Approved administratively when required; and
d. Mailed or otherwise delivered to the contractor or other performing agency.
3. Certain contractual documents provide that performance will begin only upon the
occurrence of a future event. If the event is uncertain (e.g., enactment of the
appropriation for a subsequent fiscal year), the obligation cannot be recorded until the
actual occurrence of the event that causes the agreement to be binding. If the future event
is certain (e.g., issuance of a notice to begin work on an already existing contract), the
obligation shall be recorded at the time that the contract is executed, not when the notice
to proceed is issued.
4. The value of a contractual document that contains specific provisions for termination
prior to performance, without cost or liability to the Government, is not recordable as an
obligation until after the Government’s right to terminate can no longer be exercised.
The obligation is incurred at the time the Government can no longer cancel the contract
without incurring a liability.
5. The dollar amount of an obligation to be recorded for a contractual document payable in
foreign currency shall be computed on the basis of the lowest available legal exchange
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rate on the date the contract is executed, unless the terms of the contract provide for the
use of a different exchange rate. If there is a reasonable basis for expecting a change in
the legal rate of exchange or if a change in the rate subsequently takes place, the
obligation shall be based on the rate anticipated being in effect when payments are to be
made under the contract. The obligation shall be reviewed quarterly and adjusted in
accordance with current rate information.
6. A contractual document with provision for a cash discount to be taken for payment within
a specified time shall initially be recorded as an obligation in the gross amount, rather
than at the net amount after deducting the anticipated discount.
7. The date of mailing or other delivery of the contract determines the date that the
obligation is incurred. For recording purposes, except at the end of the fiscal year,
delivery may be assumed to have occurred on the date of the last required signature.
7.2.3.2.1.2 Contract Type and Characteristics
Contract types are defined in the Federal Acquisition Regulation (FAR) Part 16. Contract type
and other contract characteristics affect the timing and amount to be obligated. The following
Paragraphs describe how the process differs depending on contract type and characteristics.
1. An obligation shall be recorded for a firm-fixed-price or cost-reimbursable level-of-effort
term contract when the contract is executed for the total amount stated.
2. Under fixed-price contracts with economic price adjustments, prospective or retroactive
price redeterminations, or incentive provisions, an obligation shall be recorded when the
contract is executed for the amount of the fixed price stated in the contract (or the target
price when the contract includes an incentive clause), even if the contract contains a
ceiling price in a larger amount. The amount recorded shall be increased or decreased by
amounts provided in contract amendments.
3. Cost-reimbursement contracts include cost-no-fee, cost-sharing, cost-plus-incentive-fee,
cost-plus-award-fee, and cost-plus-fixed-fee contracts. An obligation shall be recorded
when the contract is executed for the amount of the total estimated cost or payment, but
not in excess of the stated maximum liability (e.g., limitations on the Government’s
liability in a cost limitation or incremental funding clause), including fixed fee in the case
of a cost-plus-fixed-fee contract, target fee in the case of a cost-plus- incentive-fee
contract, and base fee plus an amount for award fee not in excess of the stated maximum
fee in the case of a cost-plus-award-fee contract. The amount recorded shall be increased
or decreased by amounts provided by either contract amendments or a unilateral revision
of an award fee estimate made by the contracting office. Any fee awarded in excess of
the target fee in a cost-plus-incentive-fee contract shall be recorded as an obligation at the
time the determination to award the larger fee is mailed or otherwise delivered to the
contractor. The amount of the obligation established for a cost-plus-award-fee contract
shall be adjusted at the time the actual award is determined and the contractor notified.
In any of these cases, if the contract is incrementally funded, the amount obligated shall
always be the funded increments.
4. Indefinite-delivery contracts include definite-quantity contracts, indefinite-quantity
contracts, and requirements contracts. Where the quantity required under a contract is
indefinite, the ultimate amount of the obligation is determined by subsequent orders;
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however, the amount of any required minimum order specified in the contract shall be
recorded as an obligation upon execution of the contract. An order in excess of the
required minimum, which does not have to be accepted by the contractor under the terms
of the agreement and which is placed within the time period specified, shall be recorded
as an obligation when issued in the amount of the price stated in the order. An order in
excess of the required minimum, which has to be accepted by the contractor under the
terms of the agreement, shall be recorded as an obligation upon acceptance of the order in
the amount of the agreed price. In the case of services, written evidence may be a
consolidated periodic (at least monthly) listing of work orders issued to the contractor,
showing the estimated dollar amount of each.
5. A contract for an end item may contain a clause which requires the selection, at a later
date, of specific initial support requirements to maintain the end item during the initial
phase. Contract items that require selection at a later date (“definitization” or
“provisioning”) include spare parts, special tools, test and ground-handling equipment,
and training aids. The obligation for such provisioned items shall be recorded when
evidenced by one of the following documents:
a. An exhibit setting forth the identity, quantity, and price of the items incorporated in
the contract; or
b. A signed provisioning order incorporating by reference the approved list (e.g.,
production list, design-change list, written order of items) that sets forth the identity
and quantity of the provisioned items ordered from the contractor, pending
incorporation in the contract. The provisioning order must state what constitutes final
approval of the work to be performed or the goods to be delivered. The amount
obligated shall be the total estimated cost of the listed items.
6. When contracts specify variations in quantities, regardless of the variation permitted, an
obligation shall be recorded when the contract is executed for the price of the quantity
specified for delivery. The amount so recorded may be increased or decreased to reflect
the quantity actually delivered and accepted.
7. After bids are publicly opened, a notice of award is issued, followed by the formal award.
A notice of award may be a letter, telegram, etc., which documents acceptance of the
offer by the Coast Guard. If the offer (including any other document incorporated by
reference) sets forth the terms that otherwise would be required in a formal contract, the
offer may be accepted by a notice of award. If the acceptance is clear and unqualified, a
binding agreement results. An obligation, in the amount of the offer, arises upon
issuance of the notice of award. The offer and notice of award constitute the
documentary evidence supporting the obligation.
8. A time-and-materials contract provides for acquiring supplies or services on the basis of
direct labor hours at fixed rates (i.e., wages, overhead, general and administrative
expenses) and materials at cost. A labor-hour contract is a variation of the time-and-
materials contract, except that the contractor does not supply materials. An obligation is
recorded when the contract is executed for the amount of the total estimated cost or
payment.
9. The use of a letter contract requires advance Headquarters authorization. If authorized,
the letter contract is signed by the contracting officer and mailed to the contractor for
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acceptance. The obligation is incurred for a letter contract when the contractor accepts
the Coast Guard’s offer by signing the contract and then mailing or otherwise delivering
that acceptance to the Coast Guard. The obligation shall be recorded in the maximum
amount for which the Government will be liable.
10. For purposes of this Subsection, an agreement between the Coast Guard and the SBA,
made pursuant to Section 8(a) of the Small Business Act (15 USC 631 et. seq.) and in
accordance with Federal Acquisition Regulation (FAR) 19.800, shall be treated as a firm
contract and shall be recorded as an obligation in accordance with the criteria set forth
above, as applicable.
7.2.3.2.1.3 Intragovernmental Transactions
An order for specific goods or services placed with another Government agency shall be
recorded as an obligation in accordance with the following:
1. Except for those orders prescribed in Paragraphs 3 through 5 below, a firm and complete
order for goods or services placed on a reimbursable basis by the Coast Guard with
another Government agency shall be obligated in the amount of the order when:
a. Accepted in writing by the performing agency; or
b. Written acceptance cannot be obtained, but evidence is available that the order was
placed by an authorized person and that the goods or services were, or are to be,
delivered.
2. A major authority for interagency agreements is the Economy Act, 31 USC 1535-1536.
An Economy Act agreement is recorded as an obligation as any other contract. Under
31 USC 1535, however, the period of availability of funds transferred pursuant to an
Economy Act agreement may not exceed the period of availability of the source
appropriation. For orders chargeable to those appropriations expiring in the current year
and placed under the authority of the Economy Act, a deobligation is required at the end
of the fiscal year to the extent that the performing agency has not incurred a valid
obligation. If the order is not governed by the act, then the order constitutes an obligation
equal to the work completed or contracts awarded by the performing agency.
3. Certain orders are required by law to be placed with the following Government agencies
and activities:
a. The Federal Prison Industries, Inc. (18 USC 4124);
b. The Committee for Purchase from the Blind and Other Severely Handicapped
(41 USC 46-48c);
c. The Government Printing Office (44 USC 501, 502, 504, and 1121); and
d. The General Services Administration (34 Comp Gen 05).
The amounts of these orders shall be recorded as obligations when the orders are issued.
Those obligations recorded against an expiring appropriation need not be deobligated at
the end of the fiscal year even though the performing agency may not have incurred
supporting obligations under the order. All such orders shall clearly authorize the
performing agency to proceed with a particular task.
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4. The recording of an amount as an obligation, where the order (other than one required by
law to be placed with one of the agencies or activities listed in Paragraph 3 above) is
placed with another Government agency for items procured and normally carried in stock
by such agency, depends on the capacity in which the supplying activity functions with
respect to the particular transaction (see 32 Comp Gen 436).
a. If the order involves common-use standard stock items that the supplying activity has
on hand or on order for prompt delivery at published prices, the obligation is incurred
at the time the order is placed by the requisitioning activity.
b. If the order involves stock items other than those referred to in 4a above, the
obligation is incurred by the requisitioning activity at the time of issuance of a formal
notification from the supplying activity that such items are on hand or on order and
will be released for prompt delivery.
c. If the order requires execution of a specific contract by the supplying activity, the
obligation is incurred by the requisitioning activity at the time the contract is entered
into by the supplying activity.
5. An order placed for an entity (ultimate beneficiary) by another Government agency
chargeable to the Coast Guard shall be recorded as an obligation by the Coast Guard at
the time the specific contract is entered into by the supplying activity which let the
contract (see 31 USC 1535).
7.2.3.2.1.4 Adjustment of Orders, Agreements, and other Contractual Documents
1. An incrementally funded contract provides for performance within an estimated total cost
and fee, and initial funding that is less than the total contract cost (cost and fee). This
type of contract also provides that the liability of the Government is limited to the amount
of funding incrementally placed on the contract. Thus, the Limitation of Funds clause
required by FAR 32.705 2(c) for cost-reimbursable contracts limits the amount to be
recorded as an obligation under an incrementally funded contract. Each increment of
funding added to the contract raises the liability of the Government and creates an
obligation in the amount of the increase, up to, but not exceeding, the amount that would
be recordable as an obligation if the clause were not in the contract. Adjustments of
obligations under incrementally funded contracts are subject to the following
requirements and limitations:
a. An obligation may be recorded for the contract up to the amount of the total estimated
cost and fee;
b. Incremental funding may be added to the contract and recorded as an obligation in
any amount up to the amount of the total estimated cost and fee. Any change order
issued under an incrementally funded contract, which adds funding to the contract,
shall be recorded as an obligation upon issuance;
c. Unless the contract states otherwise, the amount of the funding increment is not
related to any individual item in the contract;
d. At any time when incremental funding on the contract equals the total estimated cost
and fee, the contract is no longer considered to be an incrementally funded contract;
and
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e. During period(s) of continuing resolution or delayed release of full funds availability,
an obligation shall be recorded when the contract is executed for the total amount
stated.
2. An obligation recorded under a contract that is not incrementally funded shall be adjusted
by the amount provided in a bilateral amendment or modification.
3. A written unilateral order or contract change (issued pursuant to a clause, such as the
Changes-Fixed Price clause in FAR 52.243-1), which is binding on the contractor, is a
modification of the contract when issued. Any change in the total estimated cost of the
contract will be indicated on a copy of the order for use in recording the increase or
decrease in the amount of the previously recorded obligation. The amount of the order is
subject to further adjustment for excess costs incurred as a result of termination.
4. The maximum amount for which the Government will be liable under a letter contract
may be increased by the unilateral action of the Government. An obligation will be
recorded when the contractor is notified that the stated amount of the Government’s
maximum liability has been increased.
5. The amount of recorded obligations shall be increased or decreased based on
amendments or supplemental agreements issued for the correction of a mistake or the
formalization of an informal agreement authorized by determinations made pursuant to
50 USC 1431-1435.
6. An obligation resulting from a contingency clause or a clause involving excess costs
incurred as a result of termination shall be recorded on the basis of the contractual
document. If an amendment to the contract is not required, the obligation shall be
recorded when the event fixing the amount of the liability under such contingency
provision occurs and is supported by appropriate documentary evidence.
7. An adjustment due to a contract amendment or modification, even if made in a
subsequent fiscal year, will be charged against the appropriation initially obligated when
the contract was awarded, provided that the amendment or modification:
a. Was specifically authorized in the original contract;
b. Does not increase the quantity of items ordered;
c. Does not cover additional items of services, supplies, or costs not provided in the
original contractual agreement; or
d. Does not otherwise change the scope of the contract and result in a new procurement.
An adjustment of this nature may be based on a price redetermination, a change in
specification, or an engineering or other change necessitating price adjustment. If a
transaction is funded under a one-year appropriation, the adjustment shall be made
against the appropriation initially obligated. If funded under a no-year appropriation, the
adjustment shall be charged or credited to currently available funds. If the transaction is
funded under a multi-year appropriation, however, the adjustment shall be charged or
credited to the balance of the appropriation only for obligations properly incurred during
the period of availability or to complete a contract properly made within that period of
availability.
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8. If a contract, purchase order, or other obligating document is increased in a subsequent
fiscal year by an order, supplement, or amendment that increases the quantity of items
ordered or covers additional items of services, supplies, or costs not provided in the
original contractual agreement, such increase shall be charged to currently available
funds. An obligation for a contingency item shall be evidenced by a signed copy of the
order setting forth the specific service to be performed or item to be provided. In the
event that the order does not contain pricing information, the accounting copy shall be
priced and shall serve as documentary evidence for the recording of the obligation.
9. The amount of an obligation on a fixed-price contract with an economic price adjustment,
price redetermination, or incentive provision may be decreased unilaterally by the Coast
Guard upon a written determination by the contracting officer that the anticipated liability
under the contract can be reduced. A deobligation may also be processed based on a
written joint agreement between the contracting officer and the contractor. When a
contract or agreement is terminated in whole or in part by the Government via a Notice of
Termination to the contractor or other party, the amount obligated under the contract shall
be adjusted to reflect an amount sufficient to cover the settlement costs under the
termination. Obligations shall not be decreased below the estimate of the contracting
officer, based on the best evidence available, of the amount due as a result of the
termination. As termination proceeds, the contracting officer shall periodically re-
determine the Government’s probable liability, based on appropriate documentation, and
shall adjust the amount accordingly.
10. When a contract initially provides that certain items will be procured by the contractor
and it later becomes necessary or advantageous for the Coast Guard to supply the items, a
contract modification shall be executed to reduce the contract amount. The amount of the
obligation shall be reduced accordingly. Loan of equipment by the Coast Guard to a
contractor may require similar action.
11. A liability arising from an indemnification clause shall be recorded as an obligation only
when the Government’s liability is clearly established. If a liability is admitted for a
portion of the claim, an obligation is incurred only for that portion.
12. A contract dispute arising from a claim filed by a contractor must first be submitted to the
contracting officer for consideration under the Contract Disputes Act of 1978
(41 USC 601-613). If the contracting officer denies the claim, a liability arising from an
appeal filed by the contractor shall be recorded as an obligation only when the
Government’s liability is clearly established. The obligation will include simple interest
on the amount of the claim finally determined to be owed by the Government and
payable to the contractor. Such interest shall be at the rate established by the Secretary of
the Treasury pursuant to PL 92-41 from the date the contractor furnishes to the
contracting officer the written appeal pursuant to the disputes clause of the contract to the
date either a final judgment by a court of competent jurisdiction, or the mailing to the
contractor of a supplemental agreement for execution either confirming negotiations
between the parties or carrying out a decision of a board of contract appeals.
13. Although interest is included in the obligation when the Government’s liability has been
established, interest shall be applied only from the date that payment was due, if such
date is later than the filing of the appeal. Furthermore, interest shall not be applied for
any period of time during which the contracting officer determines that the contractor has
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unduly delayed pursuing available remedies before a board of contract appeals or a court
of competent jurisdiction.
7.2.3.2.1.5 Replacement Contracts
A replacement contract results from contract defaults that result in reprocurement contract
actions. A reprocurement action that will result in a replacement contract may be funded from
the same fiscal-year funds as the related obligation if:
1. A bona fide need for the work, supplies, or services must have existed when the original
contract was executed;
2. The Coast Guard has a continuing bona fide need for the goods or services; or
3. The original contract was made in good faith.
4. The original contract was terminated for default or for the convenience of the
Government. If for the convenience of the Government, the termination was the result
of:
a. A court order;
b. A determination by a contracting officer that the contract award was improper, when
there is explicit evidence that the award was erroneous and when the determination is
documented with appropriate findings of fact and of law; or
c. A determination by other competent authority (e.g., the General Accounting Office or
a board of contract appeals) that the contract award was improper.
5. The replacement contract is substantially of the same size and scope as the original
contract and executed without undue delay after the original contract is either terminated
or awarded to a different contractor.
7.2.3.2.2 Purchase Orders
1. A purchase order constitutes an obligation when issued if the purchase order accepts a
binding written offer made by a vendor to sell specific goods or to furnish specific
services at a specific price.
2. A purchase order issued in accordance with FAR Part 13 constitutes an obligation. An
example is an order of $100,000 or less for supplies or services not placed against an
established contract or with Government sources of supply.
3. A purchase order requiring acceptance by the vendor shall be recorded as an obligation
when evidence of written acceptance is received. Delivery of the purchased item shall
constitute acceptance (in lieu of written acceptance) to the extent that the delivery is
accomplished during the period of availability of the appropriation or funding cited on
the purchase order. If delivery is accepted subsequent to the period of availability, a new
or current funding citation must be provided on an amended purchase order. An
inadvertent payment from expired funds shall be adjusted by transferring the charges to
the correct fiscal year on a correction voucher.
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7.2.3.2.3 Travel Orders
When authorized in accordance with Coast Guard travel regulations (see Coast Guard
Supplement to the Joint Federal Travel Regulations (CGS-JFTR), COMDTINST M4600.17
(series)), an obligation shall be recorded for temporary duty (TDY) travel (to include reserve
orders) or permanent change of station (PCS) travel in the full amount of the estimated costs. As
a general rule, however, estimated obligations tentatively recorded for transactions within the
year shall be placed on an actual expense basis at the end of the fiscal year, excluding limited
exempted transactions. Obligations for TDY and PCS travel, transportation, and other
allowances are subject to the following conditions:
1. Travel orders for temporary duty travel shall normally be executed and approved no
earlier than a month prior to expected travel commencement. However, in those
instances where ticket purchases are made to take advantage of special group discounts,
reduced rates, etc., the orders may be executed sooner. Estimated obligations shall be
recorded when the travel orders are approved. At fiscal year end, the rules below shall be
followed to ensure that only obligations applicable to the current fiscal year are recorded.
2. Estimated obligations for PCS allowances for travel, transportation, temporary quarters,
residences transactions, relocation services, relocation income tax allowance, movement
of household goods, and miscellaneous expenses shall be recorded against the
appropriation available within a month of issuance of PCS orders. The same basis should
be utilized to record reimbursable PCS costs to the Department of Defense (DOD) for
military personnel detailed to the Coast Guard.
3. An obligation shall not be recorded for amounts advanced to an employee to cover the
costs of travel since these amounts have already been obligated.
4. The recorded estimated obligations for TDY and PCS travel shall be promptly adjusted to
actual obligations when travel vouchers, airline and automobile rental bills, bills of
lading, relocation services contract billings, or any other substantiating documentation are
paid. Obligations shall also be adjusted after the calculation and payment of each
relocation income-tax allowance transaction.
5. Prior to the certification of obligations, the following fiscal-year adjustments shall be
made when the itinerary for authorized TDY travel covers two fiscal years:
a. Estimated Costs
1) The current fiscal funds shall be obligated for the portion of the estimated cost
that is anticipated to be performed in the current fiscal year.
2) The subsequent fiscal funds shall be obligated for the portion of the estimated cost
that is anticipated to be performed in the subsequent fiscal year.
3) An exception pertains to transportation costs (e.g., airlines, automobile rentals).
The cost of transportation shall be obligated against the fiscal year funds in which
the travel commences.
b. Mileage Costs
1) The current fiscal funds shall be obligated for mileage costs when the travel
begins at a time to enable the traveler to complete a continuous journey before the
close of the current fiscal year.
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2) The succeeding fiscal funds shall be obligated for mileage costs when the travel
begins near the end of the current fiscal year and the major portion of the travel is
performed in the succeeding fiscal year.
c. Per diem and other authorized expenses (e.g., taxi hire, official telegrams, other
public transportation, and baggage charges paid by the traveler) shall be obligated
against the appropriation current at the time that the costs are anticipated to be
incurred.
7.2.3.2.4 Training
The obligation for training frequently stems from a contract for services, and, to that extent, is
recordable as described above under the contract Subsection.
Training tends to be nonseverable (i.e., when a training obligation is incurred in one fiscal year,
the entire cost is chargeable to that year, regardless of the fact that performance may extend into
the following year). For additional information on the rules for training obligations, see the
GAO “Red Book,” Principles of Federal Appropriations Law, Volume I, Chapter 5, Section B.5.
7.2.3.2.5 Payroll
1. An obligation for pay, benefits, and related costs shall be evidenced by payroll
documentation or other documented estimate. The obligation shall be based on personnel
records and shall be recorded in the month that the services are performed.
2. In the event that a payroll period covers portions of two calendar months, the
proportionate amount accruing within each month shall be recorded as an obligation
applicable to that month.
3. Benefits requiring that Federal contributions shall be accrued include:
a. Group life insurance;
b. Health benefits;
c. Federal Insurance Contributions Act (FICA) taxes; and
d. Civil Service and Federal employees’ retirement systems.
4. Accrued annual leave shall be recorded as an obligation in the month that the employee
terminates employment.
5. An obligation for severance pay due former employees is recorded each month.
6. Obligations that require reimbursement to other agencies for civilian employees or
military employees shall be accrued each month, based on the reimbursable agreement
terms.
7.2.3.2.6 Government Purchase Cards (Bank Cards)
Government purchase cards are funded by purchase requests that are recorded as commitments
in the accounting system of record. The amount of approved purchases shall be simultaneously
obligated and paid. For the end of a reporting period, at least quarterly, the amount of the
received but unpaid purchases shall be obligated. Payment for these purchases is generally made
in 48 hours. To accurately report quarterly activity, an obligation is made to reflect costs of
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purchases received where payment has not been made. The obligation amount will reflect
48 hours of purchases/banking activity. See Section 7.13, Accrual Policy, for a more detailed
discussion on estimating and recording accruals.
7.2.3.2.7 Rents, Communications, and Utilities
1. Estimates for obligations shall be in accordance with Subsection 5.6.3 (Recording,
Monitoring, Validating and Certifying Obligations) of this Manual.
2. The amount recorded as an obligation for rents and leases shall be based on the
agreement or lease, or on a written administrative determination of the amount due.
3. Under a rental agreement that may be terminated by the Government at any time without
notice and without incurring any obligation to pay termination costs, the obligation shall
be recorded each month in the amount of the rent for that month.
4. Under a rental agreement providing for termination without cost upon giving a specified
number of days’ notice of termination, an obligation shall be recorded upon execution of
the agreement in the amount of rent payable for the number of days’ notice called for in
the agreement. In addition, an obligation shall be recorded each month in the amount of
the rent payable for that month. When the number of days remaining under the lease
term equals the number of days that advance notice is required for termination, no
additional monthly obligation shall be recorded.
5. Under a rental agreement providing for a specified termination payment (treated as an
operating lease), an obligation amount shall be recorded that is sufficient to cover the
lease payments for the first year plus an amount sufficient to cover the costs associated
with the cancellation of the agreement upon its execution.
6. Obligations for a capitalized lease shall be recorded at the time of the lease’s execution in
the amount of the net present value of the Government’s total estimated legal obligations
over the life of the contract. Obligations for operating leases shall be recorded at the time
of the lease’s execution in the total amount of lease payments specified in the agreement,
or, if the agreement includes a cancellation clause, an amount sufficient to cover the lease
payments for the first year plus an amount sufficient to cover the costs associated with
the cancellation of the contract. Under the latter circumstances, for each subsequent year,
obligations shall be recorded in amounts sufficient to cover the annual lease payment plus
any additional cancellation costs.
7. An obligation for recurring charges for utility services and communications (including
Enterprise Communication/Network Services (formerly Federal Telecommunications
System (FTS)) shall be recorded each month or as required, based on a written
administrative determination of the estimated cost of the service that will be furnished
during the month. The estimated cost must be documented and comply with Section
7.13, Accrual Policy, on estimating budgetary accruals. The obligation shall be adjusted
upon receipt of an invoice, paid voucher, or other documentary evidence indicating the
need for changing the amount recorded.
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7.2.3.2.8 Grants
The amount of a grant, subsidy, or contribution shall be recorded as an obligation when
supported by documentary evidence as follows:
1. A grant requiring the grantee to perform a service or deliver an item shall be recorded
when consummated by mutual agreement. Usually, a grant is signed by a grants officer
and mailed to the grantee for acceptance. The obligation is incurred when the grantee
accepts or approves the Coast Guard’s offer by signing the grant document and mailing
or otherwise delivering the acceptance to the Coast Guard. The grant award is normally
the documentary evidence that the grant has been awarded. Letters of credit are issued
after the grant awards are made and, generally, are not obligating documents.
2. For grants and fixed charges with formulas set in law that automatically fix the amount of
the charges, the amount determined by the formula shall be recorded or, if there is an
appropriation, the amount appropriated shall be recorded, whichever is smaller. The
obligation is reported at the time the grantee is awarded the grant, and is liquidated when
the payment is made to the grantee. To the extent that a grant awarded in a previous year
is no longer valid, a recovery of prior-year obligations is recorded.
3. A grant, subsidy, or contribution not preceded by a contract or agreement shall be
recorded as an obligation at the time payment is made.
7.2.3.2.9 Miscellaneous Obligating Documents
1. Miscellaneous obligating documents are used when a financial event has occurred that
results in an obligation, and there is no contractual or other document in place to record
the obligation.
2. Miscellaneous obligating documents are normally recorded at the end of a reporting
period and reversed at the beginning of the following reporting period.
3. Miscellaneous obligating documents shall meet the same criteria stated in Section 7.2
(Obligations – By Document Type and/or Object Class), Subsection 7.2.3 (Policy) used
for the financial management of all valid obligations.
4. Miscellaneous obligating documents may be used for longer than 30 days when there is
no contract (e.g., for utilities or telephones) and there is a requirement to obligate funds
for this purpose.
5. Funds will not be obligated:
a. Without supporting documentation;
b. For the purpose of reserving funds beyond the period of availability; or
c. To prevent funds from being used by another organization.
6. Obligations are incurred for services when they are rendered. For example, obligations
for General Services Administration (GSA) rental payments are incurred in the year in
which the premises are occupied, whether or not a bill has been rendered.
7. Obligations are incurred for supplies when the order is placed.
8. A cash award given by the Coast Guard shall be recorded as an obligation in the
accounting period in which an authorized official approves the award. A copy of the
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approval document or the document informing the recipient of the award shall be used to
support the obligation.
9. The estimated amount of a legal liability shall be recorded as an obligation if the pending
litigation, for a definite liability of payment, is for the purpose of determining the amount
of the Government’s liability. See Section 7.17, Contingent Legal Liabilities, for
additional information on legal liabilities.
10. The estimated cost of land acquisition under condemnation proceedings shall be recorded
as an obligation at the time that the Attorney General is requested to institute
proceedings. The obligation shall be supported by a written administrative determination
of the estimated amount of liability that will result from the litigation. In the case of a
condemnation suit where a declaration of taking is filed after the issuance of an
administrative determination of liability, the estimated obligation originally recorded
shall be adjusted to the amount set forth in the declaration of taking. Any deficiency
judgment entered subsequent to the declaration of taking shall be recorded as an
obligation of the appropriation current at the time the initial obligation was recorded,
since this is merely a final adjudication of the rights of the parties and does not create a
new obligation (34 Comp Gen 67 and 35 Comp Gen 185).
11. The following types of liabilities shall be recorded as obligations when supported by
appropriate documentary evidence:
a. For tort claims, an obligation shall be recorded for the amount involved on the date
that the tort claim voucher is signed by an authorized Coast Guard designee or, in the
case of a suit settled out of court, by the Attorney General on the date of such
settlement (27 Comp Gen 237). The obligation shall be recorded in the amount
finally approved and certified for payment;
b. An obligation for other claims shall be recorded upon a determination of liability by
appropriate legal authority; and
c. An obligation shall be recorded for any other liability based on a disbursement
document that was not preceded by a recorded obligation.
7.2.3.2.10 Transportation of Government Property and Supplies
1. An obligation incurred for the transportation of Government property and supplies shall
be evidenced by a bill of lading issued to a commercial carrier, a contract for commercial
transportation or truck rental, or an intragovernmental order for specific transportation.
2. The obligation shall be promptly recorded in the amount of the estimated cost of the
transportation to be furnished, based on established rates as transactions occur, and
adjusted upon receipt of evidence of payment of the final bill.
3. The issuance of a bill of lading by the transportation officer constitutes the obligating act.
4. The cost of the transportation is an obligation of the fiscal year in which the
transportation officer issues a bill of lading to a transportation service provider (TSP).
The transportation of property and supplies is an obligation of the same fiscal year in
which the property and supplies are purchased, if the transportation is included in the
purchase price, that is, when the purchase is being made Free on Board (F.O.B.)
destination. As a general rule, if transportation charges are or will be paid separately by
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the Government, the transportation is an obligation of the fiscal year in which the
transportation begins or a bill of lading is issued. This rule also applies if transportation
charges are prepaid by the vendor and billed as a separate item on the invoice, unless the
contractual document clearly indicates that the purchase is being made on a delivered
basis.
7.2.3.2.11 Postage
1. An obligation for postage shall be recorded each month based on an estimate of the
billing to be received and adjusted based on the actual billing received.
2. If advance payment for penalty mail is required, the obligation shall be based on the
advance billing.
3. Purchases of stamps shall be obligated at the time payment is made.
7.2.3.2.12 Reduction of Existing Obligations
Obligations become unsupported when the conditions that substantiated the obligation have
changed, but the recorded obligated amounts have not been changed. Deobligation of funds (the
reduction of existing obligations recorded in the accounting system of record) is needed in order
to preserve the accuracy of obligation information in the accounting system.
For budget execution, the unobligated amounts are defined by the total amounts of funds
available for obligation less obligated funds. Thus, unsupported obligations in the system of
record unnecessarily reserve funds for outlay and misinform program managers of the available
funds to support program requirements. Additionally, since the amount of obligated funds is
essential information for budgetary accounting, unsupported obligations cause unreliable and
inaccurate financial reporting.
1. Financial managers and contracting officers shall deobligate funds when an existing
obligation to the Government to outlay (pay) funds is no longer matched by the recorded
obligation in the system of record. As operational conditions change, orders are
amended, services and goods are provided, and final deliveries are made, remaining
obligations of estimated payments shall be reduced to reflect the Government’s actual
obligation.
2. In promulgated bulletins, the Department of the Treasury requires agencies to annually
review and reconcile their unliquidated obligations. DHS implements this requirement
with additional guidance in its Component Requirements Guide for Financial Reporting.
To meet these external requirements, financial managers shall:
a. Reconcile their obligations with the criteria of valid obligations set forth in
31 USC 1501;
b. Deobligate funds that no longer meet this criteria; and
c. Retain work papers and records on verifications to facilitate future audits.
3. Financial managers shall deobligate funds except for document types 23, 24, 28 (other
than financial transactions), 32, and 37:
a. When the obligation of the Government to outlay funds has been reduced or
cancelled;
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b. When actual costs do not match estimated costs; or
c. When goods and services have been fully delivered and invoices paid, and a residual
obligation remains in the system of record.
4. Contracting officers shall deobligate funds on existing contracts recorded using document
types 23, 24, 28 (other than financial transactions), 32, and 37 in accordance with the
FAR.
5. Financial managers shall deobligate funds during regular reviews and validations.
During these validations, the three criteria, purpose, time, and amount (see Subsection
5.6.3 (Recording, Monitoring, Validating, and Certifying Obligations)), that establish a
legitimate obligation must be reviewed and confirmed. In the course of these reviews,
obligations will be increased, decreased, or eliminated, as appropriate. Financial
managers shall maintain documentation to support the deobligation alongside the
documentation that supported the original obligation transaction.
6. Procedures for reviewing, validating, and deobligating funds shall be coordinated by
Commandant (CG-831) as part of the annual budget execution process. These reviews
implement the Treasury requirement to validate all unliquidated obligations annually and
the DHS requirement to validate and adjust certain classes of obligations quarterly.
During these reviews, financial managers shall validate obligations within current-year
and expired-year appropriations, trust funds, and revolving funds, and shall deobligate
funds as appropriate.
7.2.3.2.13 Quarterly Reviews
1. All Coast Guard obligations shall be validated and verified quarterly, in accordance with
the DHS Component Requirements Guide for Financial Reporting. Proper supporting
documentation shall be maintained for each adjustment to the obligated total.
2. Obligated funds shall be deobligated when a determination is made that the funds are no
longer needed for the purposes for which they were obligated. All obligations that meet
at least one of the following criteria shall be deobligated within 30 days or at fiscal-year
closeout, whichever comes first:
a. Residual balances remain after the vendor has completed delivery and received full
payment;
b. Undelivered items are no longer needed and/or a project order/contract has been
cancelled;
c. Errors in accounting require correction prior to clearing an outstanding balance;
d. An initial obligation is determined to be invalid; or
e. A reduction of previously recorded obligations is warranted.
3. Until the obligations in Paragraph 2 above are deobligated, they are required to be
validated until the balance is zero, regardless of the status of the appropriation.
4. All information supporting obligations shall be retained and readily available for review
upon request.
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5. Individuals shall strictly adhere to the requirements for performing their assigned roles
and responsibilities, and managers shall perform oversight due-diligence functions.
6. Reporting the results of the obligation validation does not relieve individuals of the
responsibility of making corrections to the accounting system of record based on
validation results to accurately report financial activity. For example, the Coast Guard’s
obligating authorities shall take action to deobligate balances if the obligated balance
reflected in the accounting system of record is no longer required.
7.2.3.2.14 Performance Metrics
Commandant (CG-831) shall perform monitoring of obligations at the TAFS and subprocess
level.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.2, Procedure No. 7.2.3 (Monitoring and
Certification Procedure) for detailed procedures relating to the monitoring, certification,
validation, and document retention requirements for obligations.
7.3 Fund Balance with Treasury (FBWT)
7.3.1 Overview
In accordance with 31 USC 3513, Financial Reporting and Accounting System, each executive
agency must provide reports and information about its financial condition and operations to the
Secretary of the Treasury, as the Secretary may require. Treasury requires that agencies
reconcile their Fund Balance with Treasury (FBWT) accounts in a manner that is consistent with
the Department of the Treasury (Treasury), Bureau of the Fiscal Service FBWT reconciliation
guidelines.
The Governmentwide Accounting/Central Accounting Reporting System (GWA/CARS) is the
central accounting system for the Bureau of the Fiscal Service. GWA/CARS replaces the former
legacy system, and is the official system of record to capture and record Treasury Account
Symbol (TAS)/Business Event Type Code (BETC) information for payments, deposits, and
intragovernmental transactions.
Note: Agency requirements to submit the Statement of Transactions, Form FMS 224, and/or the
Statement of Differences (SOD), Form FMS 6652, to Treasury as referenced in the Financial
Resource Management Manual (FRMM), COMDTINST M7100.3 (series), are no longer in
effect.
Coast Guard policy is implemented to meet the required Treasury and Department of Homeland
Security (DHS) guidance for GWA/CARS reconciliation and reporting. This Section specifies
policy for the following topics, each of which is addressed in a separate Subsection:
7.3.4 Reconciliation of Fund Balance with Treasury (FBWT)
7.3.5 Edit Check Reconciliation
7.3.6 Analysis and Reconciliation of GL Account Relationships and Abnormal Balances
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7.3.7 Analysis and Reconciliation of GL Control Accounts to Subsidiary and/or Supporting
Records
Note: The term “Treasury Account Symbol” (TAS) is used throughout this Section with the
understanding that it includes the “Treasury Appropriation Fund Symbol” (TAFS).
Refer to the Glossary for additional information.
This Section applies to all Coast Guard components that report monthly collections and
disbursements to the Treasury’s Bureau of the Fiscal Service in the GWA/CARS, classified
according to Appropriation, Fund and Receipt Account, and Related Control Totals.
This Section has four major objectives:
1. For reconciliation of Fund Balance with Treasury:
a. To ensure that the Coast Guard FBWT account balances and activities reconcile to
the GWA System accounts statements, hereinafter referred to as “GWA reports,” and
to the Treasury’s GWA/CARS FBWT reconciliation, on a monthly basis; and
b. To ensure that the Coast Guard maintains sufficient documentation to adequately
support any resulting reconciling items and that corrections are properly documented
and authorized.
2. For edit check reconciliation:
a. To ensure that edit check reconciliations are appropriate, complete, and accurate, in
accordance with Treasury guidance and DHS Office of Financial Management
(OFM) requirements;
b. To ensure that edit check reconciliations are completed, reviewed, and properly
documented on a monthly basis; and
c. To ensure that the Coast Guard maintains sufficient documentation to support any
resulting variance and that corrections are properly documented and authorized.
3. For analysis and reconciliation of GL account relationships and abnormal balances:
a. To ensure that reconciliations of Coast Guard general ledger (GL) account
relationships are completed accurately and in a timely manner;
b. To ensure that appropriate GL account relationships are maintained and that
adjustments to correct the reconciling items required to maintain those relationships
are complete, accurate, timely, and authorized; and
c. To ensure that all abnormal account balances are identified and either corrected or
adequately explained and documented on a timely basis.
4. For analysis and reconciliation of GL control accounts to subsidiary and/or supporting
records:
a. To ensure that the Coast Guard’s GL control accounts are supported by their
corresponding subsidiary and/or supporting records or suspense accounts activity, in
accordance with Coast Guard and DHS requirements;
b. To ensure that the Coast Guard maintains adequate documentation to support the
analysis and reconciliation processes performed and the investigation of resulting
reconciling items; and
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c. To establish a time frame for the approval and correction of identified reconciling
items.
For detailed responsibilities and procedures for reporting monthly collections and disbursements
to the Treasury’s Bureau of the Fiscal Service, refer to Financial Resource Management Manual
– Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.3 (Fund
Balance with Treasury (FBWT)).
7.3.2 Authorities
1. 31 USC 3513 Financial reporting and accounting system.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Federal Financial Management Improvement Act of 1996 (FFMIA).
http://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
3. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov/products/GAO-14-704G
4. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
5. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
6. Office of Management and Budget, Circular A-130, Management of Federal Information
Resources, November 2000.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
8. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 5100, “Reconciling Fund Balance with Treasury Accounts”,
March 2012.
http://tfm.fiscal.treasury.gov/v1.html
9. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Supplement to I TFM 2-5100, “Fund Balance with Treasury Reconciliation Procedures”,
March 2012.
http://tfm.fiscal.treasury.gov/v1/supplements.html
10. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Bulletin No. 2017-10, “Reporting Suspense Activity Using F3875 and F3885
and Using Default Accounts F3500 and F3502 as a Central Accounting Reporting System
(CARS) Reporter”, July 2017.
http://www.fiscal.treasury.gov
11. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Supplement I to Volume I, Bulletin No. 2017-05, “Federal Account Symbols and Titles
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(FAST) Book I and II”, March 2017.
https://www.fiscal.treasury.gov/fsreports/ref/fastBook/fastbook_march_2017.pdf
12. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 9500, “Revised Federal Financial Management System
Requirements for Fiscal Reporting”.
https://tfm.fiscal.treasury.gov/v1/p6/c950.html
13. Department of Homeland Security, Financial Management Policy Manual (FMPM),
Chapter 4: Financial Reporting, Section 4.3-Reconciling Fund Balance with Treasury.
http://cfo-policy.dhs.gov/default.aspx
14. Department of Homeland Security, Office of Financial Management, Component
Requirements Guide for Financial Reporting (series).
http://cfo-policy.dhs.gov/default.aspx
15. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
7.3.3 Overall Policy
1. Finance Center (FINCEN), Aviation Logistics Center (ALC), Surface Forces Logistics
Center (SFLC), Shore Infrastructure Logistics Center (SILC), and Pay and Personnel
Center (PPC) shall develop standard operating procedures (SOPs) to meet the
requirements of this policy and related Treasury and DHS guidance. The development of
these SOPs will support FBWT reconciliations and reporting requirements (e.g.,
Suspense Accounts, TAS/BETCs) as mandated by Treasury.
2. Analyses and reconciliations of accounts shall be performed in a timely manner.
Effective and efficient analysis and reconciliation processes shall be implemented to
ensure the integrity and accuracy of Coast Guard financial report data and the reliability
of the receipt and disbursement data recorded and reported by the agency.
3. Any resulting reconciling items shall be adequately researched, identified, explained,
supported, and/or corrected.
4. Coast Guard components shall certify all analyses and reconciliations, via a consolidated
certification letter, as to its completeness, accuracy, and appropriateness of the related
supporting documentation, and as to whether the appropriate queries and reports were run
to verify the correctness of the accounts.
5. FINCEN shall certify to Commandant (CG-842), via a signed consolidated certification
letter, the completeness, accuracy, and timeliness of all reconciliations and analyses
prescribed by DHS for the Academy, ALC, PPC (military payroll), Yard/SFLC, and
FINCEN.
6. Analyses and reconciliations shall be documented and made available to agency
management, and all adjustments shall be researched and traceable to supporting
documents.
7. Only authorized officials shall prepare, review, and approve analyses and/or
reconciliations of accounts and the resulting adjustments.
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8. All analysis and/or reconciliation packages shall be reviewed and approved by a level of
management at least one level higher than that of the preparer of the reconciliation.
9. Adequate segregation of duties shall be maintained throughout all analysis and/or
reconciliation processes (i.e., the performance and approval of any analysis and/or
reconciliation activity shall be delegated to separate personnel).
10. Access to systems utilized in the analysis and/or reconciliation processes shall be limited
to authorized personnel, relevant to their reconciliation responsibilities, in accordance
with Coast Guard system access control policies.
11. All information supporting the analyses and reconciliations of accounts shall be kept in a
central location. This information shall be retained in accordance with Information and
Life Cycle Management Manual, COMDTINST M5212.12 (series), and shall be
accessible to support management reviews and audits.
7.3.4 Reconciliation of Fund Balance with Treasury (FBWT)
7.3.4.1 Responsibilities
Following are the offices and their respective responsibilities for the reconciliation of FBWT.
7.3.4.1.1 Financial Reporting Division (CG-842)
Commandant (CG-842):
1. Provides financial oversight and guidance to the program offices and field units.
2. Ensures the complete, accurate, and timely reporting of FBWT reconciliations.
3. Ensures that changes in personnel and duties are recorded.
7.3.4.1.2 Academy, Aviation Logistics Center, PPC (military payroll), Yard/SFLC
Personnel at these entities:
1. Ensure that the FBWT balances are complete and accurate.
2. Maintain supporting documentation.
7.3.4.1.3 FINCEN
FINCEN personnel:
1. Ensure that the Coast Guard’s and Treasury’s variances are reconciled.
2. Ensure that the Coast Guard unit’s reconciliations are complete and submitted in a timely
manner.
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7.3.4.2 Policy for Reconciliation of FBWT
7.3.4.2.1 Reconciliation of FBWT in the GWA/CARS
It is Coast Guard policy to reconcile FBWT using GWA/CARS to capture and record
TAS/BETC information for payments, deposits, and intragovernmental transactions. Refer to
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.3, Procedure No. 7.3.1 (Reconciliation of Fund Balance with
Treasury (FBWT)) for detailed procedures and guidelines.
7.3.4.2.2 Monthly Reconciliation of FBWT to GWA Reports
1. The policy and procedures established in I TFM 2-5100, “Reconciling Fund Balance with
Treasury Accounts,” shall be followed in the monthly reconciliation of FBWT to the
GWA reports.
2. The guidance in the TFM supplement, “Fund Balance with Treasury Reconciliation
Procedures, A Supplement to I TFM 2-5100,” shall be followed in the monthly
reconciliation of FBWT to the GWA reports.
3. All transactions that affect FBWT shall be posted to the USSGL 101000 account in the
GL and reported in the GWA/CARS. On a monthly basis, the USSGL 101000 account
balances for each TAS shall be reconciled with the following GWA reports:
a. Expenditure Transactions Report;
b. Expenditure Activity Report;
c. Available Receipt Account Report;
d. Unavailable Receipt Account Report; and
e. Unappropriated Receipt Account Report.
4. Corrections to the FBWT account shall be supported by appropriate documentation, and
shall be approved, signed, and dated in accordance with the procedures in Financial
Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.3, Procedure No. 7.3.1 (Reconciliation of Fund Balance
with Treasury (FBWT)).
5. Each FINCEN FBWT reconciliation shall be internally certified by the preparer, the
branch chief, and the division chief as to its completeness, accuracy, and appropriateness
of the related supporting documentation, and as to whether the appropriate queries and
reports were run to verify the correctness of the FBWT accounts.
6. All data transfers and downloads shall be verified to the original source data, and
evidence of the verification shall be maintained.
7. An authorized Coast Guard official shall review and sign the monthly reconciliation
documents. The Coast Guard shall make these documents available to auditors of agency
financial statements and the Bureau of the Fiscal Service upon request.
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7.3.5 Edit Check Reconciliation
7.3.5.1 Responsibilities
Following are the offices and their respective responsibilities for edit check reconciliation.
7.3.5.1.1 Financial Reporting Division (CG-842):
Commandant (CG-842):
1. Provides financial oversight and guidance to the program offices and field units.
2. Ensures the complete, accurate, and timely reporting of edit check reconciliations.
3. Ensures that changes in personnel and duties are recorded.
7.3.5.1.2 Aviation Logistics Center; Yard/SFLC
Personnel at these locations:
1. Ensure that all applicable edit check reconciliations and analyses are complete and
accurate.
2. Maintain supporting documentation.
7.3.5.1.3 FINCEN
FINCEN personnel:
1. Verify that all TAS edit checks are accurate, and prepare adjustments, if applicable.
2. Ensure that the Coast Guard’s unit’s edit check reconciliations and analyses are complete
and submitted in a timely manner.
7.3.5.2 Policy for Edit Check Reconciliation
1. The edit check reconciliations shall be performed on a monthly basis in accordance with
Treasury guidance and the requirements specified in Component Requirements Guide for
Financial Reporting. (See Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.3, Procedure No.
7.3.2, Tables 7.1 through 7.4 (Edit Check Reconciliation), for a list of reconciliations to
be done by each Coast Guard component.)
Note: Some components, such as Yard/SFLC, receive guidance from FINCEN in lieu of
direct reference to Component Requirements Guide for Financial Reporting.
2. FINCEN edit check reconciliations shall be internally certified by the preparer, the
preparer’s branch chief, and the preparer’s division chief as to completeness, accuracy,
and appropriateness of the related supporting documentation, and as to whether the
appropriate queries and reports were run to verify the correctness of the edit checks.
3. All extraction data and downloads shall be verified to the original source data, and
evidence of the verification shall be maintained.
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4. The researchable items forms shall be returned to the requesting office within 30 days
after being received, and shall include an explanation of the proposed corrections and/or
actions performed to resolve the reconciling items.
5. Each explanation and/or correction included in the researchable items form shall be
reviewed and approved by a level of management one level higher than the employee
who provided them in the form, as evidenced by the approver’s signature and date on the
form.
6. Explanations and/or corrections of reconciling items shall be analyzed by the requesting
office, if applicable, to ensure that they are appropriate and adequately supported, in
accordance with Component Requirements Guide for Financial Reporting.
7. Corrections to the respective accounts shall be supported by appropriate documentation,
and shall be approved, signed, and dated, in accordance with the procedures in Financial
Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.3, Procedure No. 7.3.2 (Edit Check Reconciliation).
7.3.6 Analysis and Reconciliation of GL Account Relationships and
Abnormal Balances
7.3.6.1 Responsibilities
Following are the offices and their respective responsibilities for the analysis and reconciliation
of GL account relationships and abnormal balances.
7.3.6.1.1 Financial Reporting Division (CG-842):
Commandant (CG-842):
1. Provides financial oversight and guidance to the program offices and field units.
2. Ensures the complete, accurate, and timely reporting of analyses and reconciliations of
GL account relationships and abnormal balances.
3. Ensures that changes in personnel and duties are recorded.
7.3.6.1.2 Aviation Logistics Center; PPC (military payroll); Yard/SFLC
Personnel at these entities:
1. Ensure that all applicable abnormal balance reconciliations and analyses are complete
and accurate.
2. Maintain supporting documentation.
7.3.6.1.3 FINCEN
FINCEN personnel:
1. Verify that all TAS account relationships and abnormal balance analyses are accurate,
and prepare adjustments, if applicable.
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2. Ensure that the Coast Guard unit’s reconciliations and analyses are complete and
submitted in a timely manner.
7.3.6.2 Policy for Analysis and Reconciliation
1. All GL account relationships specified in Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.3, Tables
7.5 through 7.9 (Reconciliation of GL Account Relationships and Abnormal Balances)
shall be reconciled on a monthly basis in accordance with the schedule presented there.
2. All abnormal balances shall be analyzed, supported with appropriate documentation, and
appropriately corrected, if necessary, on a monthly basis in accordance with Component
Requirements Guide for Financial Reporting.
Note: Some components, such as Yard/SFLC, receive guidance from FINCEN in lieu of
direct reference to Component Requirements Guide for Financial Reporting.
3. Each FINCEN GL account relationship reconciliation and abnormal balance analysis
shall be internally certified by the preparer, the branch chief, and the division chief as to
completeness, accuracy, and appropriateness of the related supporting documentation,
and as to whether the appropriate queries and reports were run to verify the correctness of
the accounts.
4. All extraction data and downloads shall be verified to the original source data, and
evidence of the verification shall be maintained.
5. The researchable items forms shall be returned to the requesting office within five days
after being received, and shall include an explanation of the proposed corrections and/or
actions performed to resolve the reconciling items.
6. Each explanation and/or correction included in the researchable items form shall be
reviewed and approved by a level of management at least one level higher than the
employee that provided them in the form, as evidenced by the approver’s signature and
date on the form.
7. Corrections to the respective accounts shall be supported by appropriate documentation,
and shall be approved, signed, and dated in accordance with the procedures in Financial
Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.3, Procedure No. 7.3.3 (Analysis and Reconciliation of GL
Account Relationships and Abnormal Balances).
7.3.7 Analysis and Reconciliation of GL Control Accounts to Subsidiary
and/or Supporting Records
7.3.7.1 Responsibilities
Following are the offices and their respective responsibilities for the analysis and reconciliation
of GL control accounts to subsidiary and/or supporting records.
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7.3.7.1.1 Financial Reporting Division (CG-842):
Commandant (CG-842):
1. Provides financial oversight and guidance to the program offices and field units.
2. Ensures the complete, accurate, and timely reporting of analyses and reconciliations of
GL control accounts to subsidiary and/or supporting records.
3. Ensures that changes in personnel and duties are recorded.
7.3.7.1.2 Aviation Logistics Center; PPC (military payroll); Yard/SFLC
Personnel at these entities:
1. Ensure that all applicable analyses and reconciliations are complete and accurate.
2. Maintain supporting documentation.
7.3.7.1.3 FINCEN
FINCEN personnel:
1. Verify the reconciliation data for the subsidiary and/or supporting records and their
respective GL control accounts, and prepare adjustments, if applicable.
2. Ensure that the Coast Guard unit’s reconciliations and analyses are complete and
submitted in a timely manner.
7.3.7.2 Policy for Analysis and Reconciliation
1. All GL control accounts specified in Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.3, Table
7.10 (Reconciliation of GL Control Accounts to Subsidiary Records) shall be analyzed or
reconciled to their respective subsidiary and/or supporting records or suspense account
activity on a monthly basis in accordance with the schedule included there.
2. Each FINCEN GL control accounts to subsidiary and/or supporting records reconciliation
shall be internally certified by the preparer, the branch chief, and the division chief as to
completeness, accuracy, and appropriateness of the related supporting documentation,
and as to whether the appropriate queries and reports were run to verify the correctness of
the accounts.
3. All extraction data, transfers, and downloads shall be verified to the original source data,
and evidence of the verification shall be maintained.
Corrections to the respective accounts shall be supported by appropriate documentation, and
shall be approved, signed, and dated in accordance with the procedures in Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7,
Section 7.3, Procedure No. 7.3.4 (Analysis and Reconciliation of GL Control Accounts to
Subsidiary and/or Supporting Records).
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7.4 Reliance on Financial Data from Other Government Agencies
When the Coast Guard relies on another Government agency to process and report financial data,
the Coast Guard activity is required to obtain an attestation report, such as an audited financial
statement report, that states whether processes can be relied upon. The financial data, taken as a
whole, must be complete and accurately presented. The attestation report must provide sufficient
evidence that key internal controls are designed and operating effectively in accordance with
generally accepted accounting principles (GAAP).
7.4.1 Overview
This Section establishes policy to be used by the Coast Guard to obtain reasonable assurance
over key controls that are performed by a third-party service provider. The Coast Guard
outsources several of its key business processes to third parties, and obtains attestation reports
from the service provider. To obtain reasonable assurance these controls can be relied upon, the
Coast Guard must obtain sufficient evidence that key internal controls are designed and
operating effectively and that reports provided are in accordance with both generally accepted
attestation standards established by the American Institute of Certified Public Accountants
(AICPA) and GAAP.
Although the Coast Guard typically obtains reasonable assurance internally by documenting and
testing those controls directly, it also obtains reasonable assurance on a service organization’s
internal controls by assessing its service providers’ Service Organization Controls (SOC) 1, Type
II report prepared in accordance with the Statement on Standards for Attestation Engagements
(SSAE) No. 16, Reporting on Controls at a Service Organization attestation report, also known
as an SSAE 16 report. If this report is found to be inadequate, the Coast Guard is required to
perform additional control testing.
See the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Section 7.4 (Reliance on Financial Data from Other Government Agencies) for
detailed definitions, responsibilities, and procedures on obtaining reasonable assurance over key
controls that are performed by a third-party provider.
7.4.2 Purpose
The purpose of this Section is to guide the Coast Guard in identifying and reviewing service
provider reports and, when necessary, performing alternative procedures during the testing and
evaluation phases of the annual assurance statement cycle.
7.4.3 Scope
This policy applies to all Coast Guard entities that rely upon service organizations to process a
significant amount of their transactions, as well as headquarters directorates that rely upon these
processes and the related key controls to prepare the Coast Guard’s financial statement.
Adherence to this policy will support the related financial statement line item assertions.
7.4.4 Authorities
1. Federal Managers’ Financial Integrity Act (FMFIA). 31 USC 3512(c1), January 2001.
COMDTINST M7100.3F
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https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
2. Office of Management and Budget (OMB), Circular A-123, Management’s
Responsibility for Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
3. American Institute of Certified Public Accountants (AICPA), SSAE No. 16, Reporting on
Controls at a Service Organization, AT Section 801, “Reporting on Controls at a Service
Organization”.
http://www.aicpa.org/Research/Standards/AuditAttest/Pages/SSAE.aspx
4. Management’s Responsibility for Internal Control, COMDINST 5200.10 (series).
http://www.dcms.uscg.mil/directives
7.4.5 Responsibilities
The following entities have responsibilities for obtaining reasonable assurance that service
organization’s internal controls can be relied upon to support financial statement line item
assertions.
7.4.5.1 User Organization (Coast Guard)
1. Coast Guard financial and program managers (PMs) have primary responsibilities for
processing Coast Guard transactions. In addition, they have a primary role in planning,
documenting, testing, and evaluating internal controls of these transactions.
2. Commandant (CG-842) desk officers have oversight responsibility for maintaining a list
of all Coast Guard service providers and for coordinating the PM review of service
providers report. They serve as subject matter experts to the PM(s) on business process
activities and information. During the planning phase of the annual assurance statement
cycle, Commandant (CG-842) identifies processes that are significantly outsourced and
determines the level of assurance needed. During the documenting and testing phases,
Commandant (CG-842) ensures that the PM’s assessments are performed timely. During
the evaluation phase, Commandant (CG-842) evaluates the PM’s assessments, and
reports the results to Commandant (CG-84).
3. Commandant (CG-85), Office of Internal Controls, has served as a subject matter expert
in the authorities noted above and in internal control testing.
7.4.5.2 Service Organizations
1. Service organizations have responsibility for processing Coast Guard transactions. In
addition, they share responsibility for documenting and testing both their subservice
organization’s and their own internal controls of these transactions. For instance, they
engage a third-party service auditor to perform an SSAE 16 attestation and provide a
Type II report.
2. Subservice organizations are used by another service organization to perform some of the
services provided to user entities. These services are likely to be relevant to those user
entities' internal control over financial reporting. The subservice organization has
COMDTINST M7100.3F
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responsibilities for processing Coast Guard transactions. In addition, they provide
management assurance statements of their internal controls to the service organization.
7.4.5.3 Service Auditor
A professional, typically a CPA firm, is engaged to provide an independent and objective
opinion on the control activities of servicing organization. Their attestation of control objectives
and control activities is performed in accordance with AT 801.
7.4.5.4 User Auditor
A user auditor examines and reports on the financial statements of a user entity. The DHS OIG
and its contracted independent public accountants perform these roles and responsibilities. For
example, they would follow AU 324 (not AT 801) guidance when relying upon Coast Guard’s
control testing and evaluation as part of their audit and reporting of DHS’s financial statements
in DHS’s Annual Financial Report.
7.4.6 Policy
1. PMs shall:
a. Assess the service auditor’s report and determine whether the scope is sufficient; the
audit period is within 6 months of fiscal year end, the opinion is unmodified, and if
there are any exceptions noted;
b. Determine and perform additional control testing (Test of Design/Test of
Effectiveness) needed to provide that reasonable assurance controls can be relied
upon to support financial statement line item assertions; and
c. Complete/forward SSAE 16 template and action plan (assessment) to Commandant
(CG-842) for evaluation.
2. Commandant (CG-842) shall:
a. Determine if a service organization is being used;
b. Determine if the outsourced activities, processes, and functions are significant to the
Coast Guard’s financial reporting; and
c. Determine if an annual assurance statement (cross-servicing organization) or a SOC 1
Type II report (commercial company) exists and is sufficient in scope. If an annual
assurance statement or SOC 1 Type II report does not exist, determine alternative
procedures needed. Typically, Commandant (CG-842) works with the applicable
PMs to perform these procedures and assess applicable reports.
d. Evaluate the PM’s assessment to determine whether it provides reasonable assurance
that controls can be relied upon to support financial statement line item assertions.
e. Document the evaluation of the assessment.
f. Draft and forward evaluation results to Commandant (CG-84) for review.
3. Commandant (CG-85) shall serve as a subject matter expert in the authorities noted
above and in internal control testing.
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7.5 Financial Policy for Real and Personal Property
This Section establishes policy for the accounting treatment of Coast Guard real and personal
property (general property, plant, and equipment). Real property includes land and
improvements to land; buildings, structures, facilities (improvements/additions), and utility
systems. (For the proper accounting treatment of real property acquired through construction
projects and capital leases see Chapter 10 of this Manual.)
Personal property in this Section is any property except real property with an estimated life of
more than two years and is not intended for sale in the ordinary course of operations or held in
anticipation of physical consumption. Personal property includes equipment, machine tools, test
equipment, vehicles, aircraft, watercraft, temporary improvements to land (e.g., trailers, garages,
modular buildings, and generators). This Section also excludes internal use software, which is
addressed in Section 7.8, Accounting for Coast Guard Internal Use Software, of this Manual.
This policy applies to all real and personal property owned, leased, or otherwise held by the
United States under the Coast Guard’s administrative control, except for weapons and electronic
systems used by the Coast Guard but under Navy control.
For detailed procedures and responsibilities on the accounting treatment of Real and Personal
Property refer to the Financial Resource Management Manual-Procedures (FRMM-P),
COMDTINST M7100.4 (series), Section 7.5 (Financial Procedures for Real and Personal Property).
7.5.1 Authorities
1. Chief Financial Officers Act of 1990 (“CFO Act”), as amended.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Federal Managers Financial Integrity Act of 1982 (FMFIA).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
3. Federal Financial Management Improvement Act of 1996 (FFMIA).
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia
4. Government Management Reform Act of 1994 (GMRA).
http://govinfo.library.unt.edu/npr/library/misc/s2170.html
5. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant and Equipment,
November 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 8, Supplementary Stewardship Reporting, June 1996.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
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7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 35, Estimating the Historical Cost of General
Property, Plant, and Equipment: Amending Statements of Federal Financial Accounting
Standards 6 and 23, October 2009.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
8. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 44, Accounting for Impairment of General Property,
Plant, and Equipment Remaining in Use, January 2013.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
9. Federal Accounting Standards Advisory Board, Technical Release 14, Implementation
Guidance on the Accounting for the Disposal of General Property, Plant, & Equipment,
October 2011.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
10. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, and Appendix B.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
11. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
12. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
13. Department of the Treasury, Treasury Financial Manual, Volume I, Part 2,
Chapter 3300, “Statement of Transactions (FMS 224) Reporting by Agencies for Which
the Treasury Disburses”.
http://tfm.fiscal.treasury.gov/v1.html
14. Department of the Treasury, Treasury Financial Manual, Volume I, Part 2,
Chapter 5100, “Reconciling Fund Balance with Treasury Accounts”, March 2012.
http://tfm.fiscal.treasury.gov/v1.html
15. Department of the Treasury, Treasury Financial Manual, “Fund Balance with Treasury
Reconciliation Procedures, A Supplement to I TFM 2-5100”.
http://tfm.fiscal.treasury.gov/v1/supplements.html
16. Department of Homeland Security (DHS), Financial Management Policy Manual
(FMPM), Chapter 3, Section 3.1, Property, Plant and Equipment.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.1%2
0Property,%20Plant%20and%20Equipment.pdf
17. U.S. General Service Administration (GSA), Federal Management Regulation (FMR).
http://www.gsa.gov/portal/ext/public/site/FMR/file/FMRTOC.html/category/21856/host
Uri/portal
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18. Civil Engineering Manual, COMDTINST M11000.11 (series).
http://www.dcms.uscg.mil/directives
19. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
20. Electronics Manual, COMDTINST M10550.25 (series).
http://www.dcms.uscg.mil/directives
21. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
22. Motor Vehicle Manual, COMDTINST M11240.9 (series).
http://www.dcms.uscg.mil/directives
23. U.S. Coast Guard Personal Property Management Manual (PPMM), COMDTINST
M4500.5 (series).
http://www.dcms.uscg.mil/directives
24. U.S. Coast Guard Real Property Management Manual (RPMM), COMDTINST
M11011.11 (series).
http://www.dcms.uscg.mil/directives
25. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
7.5.2 Responsibilities
The Subsections that follow list the offices and their respective responsibilities for financial
policy concerning Coast Guard real and personal property.
7.5.2.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) develops, promulgates, and implements effective and efficient internal
controls for the valuation and recognition of real and personal property assets for use by
Headquarters program/facility managers, area and district commanders, and field units.
7.5.2.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Oversees the management of Coast Guard personal property and the financial accounting
and reporting of both real and personal property assets.
2. Provides oversight for the development of financial policies and procedures for Coast
Guard property in coordination with the Finance Center (FINCEN) and Commandant
(CG-4).
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3. Coordinates the development and auditing of financial statements required by the Chief
Financial Officers Act of 1990, and coordinates all audit remediation issues.
7.5.2.3 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Provides oversight, analysis, and financial management standards for all categories of
Coast Guard assets.
2. Oversees the capitalization of personal and real property to ensure accounts are accurate
and assets are accurately valued and subsequently reported.
3. Coordinates with FINCEN to ensure completeness, accuracy, and timeliness of real and
personal property data for the submission of quarterly and annual financial reports.
7.5.2.4 Financial Management Policy Division (CG-843)
Commandant (CG-843) develops and promulgates financial policies and procedures for the
accounting treatment of Coast Guard real and personal property.
7.5.2.5 Personal Property Accountability Division (CG-844)
Commandant (CG-844):
1. Establishes and maintains policies and procedures for personal property transactions
including acquisition, management, utilization, reutilization, excess, accounting, and
disposal.
2. Maintains the Coast Guard official system of record including development and
implementation of policies, procedures, and systems necessary to provide effective
property management support for the Coast Guard.
7.5.2.6 Audit Remediation Division (CG-845)
Commandant (CG-845):
1. Coordinates Chief Financial Officer (CFO) audit remediation planning and
implementation including personal and real property.
2. Monitors the weaknesses identified and track remediation efforts associated with audits
conducted by various parties that pertain to real and personal property
accounting/financial systems in the Coast Guard including the annual financial statement
audit.
3. Guides the Coast Guard toward meeting Federal Financial Management Standards and
Policies such as Federal Accounting Standards Advisory Board (FASAB), Treasury and
Office of Management and Budget (OMB) requirements.
4. Manages and oversee the Department of Homeland Security (DHS) corrective action
process, ensuring close coordination between all CFO audit remediation stakeholders.
5. Monitors CFO audit corrective actions to ensure corrective action taken is consistent with
DHS and CG-wide internal control standards.
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6. Coordinates efforts closely with the Internal Control Division (CG-851).
7.5.2.7 Office of Internal Controls (CG-85)
Commandant (CG-85):
1. Provides guidance and procedures to maintain, review, and improve the internal control
program in order to achieve the following objectives:
a. Reliability of internal controls over financial reporting to include real and personal
property transactions; and
b. Compliance with applicable property laws and regulations.
2. Conducts an annual evaluation of the internal control program to ensure:
a. Proper implementation of Coast Guard policy and procedures described in
Management’s Responsibility for Internal Control, COMDTINST 5200.10 (series);
b. Compliance with the Federal Financial Management Improvement Act (FFMIA);
c. Compliance with the Federal Managers Financial Integrity Act (FMFIA);
d. Compliance with the interpretation of OMB Circular A-123, “Management’s
Responsibility for Internal Control”; and
e. Conformity with DHS guidelines in the Financial Accountability Act, PL 108-330.
7.5.2.8 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86):
1. Monitors the development of integrated financial management, asset management,
and accounting systems throughout the Coast Guard.
2. Provides financial management systems oversight for FINCEN and inventory control
points (ICP).
7.5.2.9 Finance Center (FINCEN)
For detailed responsibilities related to FINCEN refer to the Financial Resource Management
Manual-Procedures (FRMM-P), COMDTINST M7100.4 (series), Section 7.5 (Financial
Procedures for Real and Personal Property).
7.5.2.10 Headquarters Offices
Commandants (CG-6, CG-7, CG-84, CG-928, and DCMS-83) are responsible for ensuring
timely, complete, and accurate recording of vessels, aircraft, electronic systems, and other major
systems transferred from other Government agencies (OGAs).
7.5.2.11 Office of Enterprise Infrastructure Management (CG-64)
Commandant (CG-64):
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1. Develops, promulgates, and implements policy and procedures for the management of
electronic systems and equipment.
2. Provides oversight and analysis of policy and procedures for physical inventories of
electronics.
7.5.2.12 Office of Civil Engineering (CG-43)
Commandant (CG-43):
1. Provides oversight and policy for the Coast Guard real property program.
2. Ensures that all established policies and procedures governing the tracking and
accounting for real property construction, acquisitions, and disposals are followed by all
Coast Guard civil engineering organizations.
3. Works closely with Commandant (CG-84) and FINCEN to ensure that all acquisitions,
disposals, and descriptive changes to real property assets are entered into the Coast Guard
fixed asset and financial systems and supported by the proper documentation.
For detailed responsibilities for the following CG personnel refer to the Financial Resource
Management Manual-Procedures (FRMM-P), COMDTINST M7100.4 (series), Section 7.5
(Financial Procedures for Real and Personal Property).
1. Area and District Commanders and HQ Managers
2. Commanders of the Civil Engineering Units (CEUs), Facility Design and Construction
Centers (FD&CCs), and HQ Units (Real Property only)
3. Units (Personal Property only)
4. Acquisition Project Manager
5. Regional Boat Manager
6. Regional Motor Fleet Manager
7.5.3 Recognition and Valuation of Real and Personal Property
Coast Guard real and personal property shall be recorded at historical cost when title passes to
the Coast Guard or when the assets are delivered as follows:
1. When acquiring real and personal property assets from other than Government sources,
purchase costs and costs necessary to bring the asset to an operable condition are
recorded at cost and capitalized or expensed if they do not equal or exceed Coast Guard
capitalization thresholds. All land (except for stewardship land) is capitalized regardless
of value, and all other real and all personal property that meets Coast Guard’s
capitalization thresholds is capitalized. Financial policies for real and personal property
capitalization and depreciation are provided in Chapter 10 of this Manual.
2. Real and personal property assets acquired from another Government agency are to be
recorded at the Net Book Value (NBV) of the transferring agency or at the fair market
value at the time transferred if the NBV is unknown. This value shall be increased by
transfer costs such as freight and shipping charges. The cost of transferred assets shall be
depreciated based on the remaining service life used by the transferring agency. If the
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remaining service life is not known, an estimated service life shall be established and
supporting documentation maintained.
3. Real and personal property assets acquired through an exchange shall be recorded at the
fair market value of the asset surrendered or the fair market value of the asset acquired if
more easily determined. If neither can be determined, the cost recorded shall be the NBV
of the asset surrendered and the difference recorded as a gain or loss after cash
consideration if applicable.
7.5.3.1 Alternate Valuation and Alternate Date-in-Service Documentation
In the event that historical cost information is not available for valuation or date-in-service
determination for Coast Guard owned or leased personal and real property assets, a hierarchy list
can be found in Financial Resource Management Manual - Procedures (FRMM-P),
COMDTINST M7100.4 (series), Procedure No. 10.2.7 (Alternate Valuation and Alternate Date-
In-Service Documentation (Real and Personal Property)). This list ranges from least costly and
least amount of resources (i.e., like item) to most costly and most amount of resources (i.e., third-
party appraisal) to complete.
7.5.3.2 Gifts
1. Real and personal property gifts to the Coast Guard must be accepted through the gift
acceptance procedures found in Acceptance and Accounting for Special Projects and
Other Gifts to the Coast Guard from Non-Federal Sources, COMDTINST 5760.14
(series). Any gifts not approved for retention shall be reported to Commandant (CG-844)
as excess.
2. Gifts of personal property other than cash, checks, negotiable instruments or securities
and real property must be recorded in applicable property records in accordance with the
U.S. Coast Guard Personal Property Management Manual (PPMM), COMDTINST
M4500.5 (series), or the U.S. Coast Guard Real Property Management Manual (RPMM),
COMDTINST M11011.11 (series). Property obtained through the gift process, whether
in-kind or through Coast Guard procurement from a cash gift, must be recorded as Coast
Guard property in applicable property records. The Coast Guard treats gifted property
the same as appropriated property in its accounting records to better meet its fiduciary
and stewardship management duties.
3. Gifts shall be valued at fair market value through appraisal, but if the owner
acknowledges in writing that no appraisal is needed, approximate fair market value shall
be established through historical documents.
7.5.3.3 Condemnation
Real and personal property acquired by condemnation shall be valued in accordance with the
appraisal filed by the Government with the requisite court.
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7.5.3.4 Non-PC&I Projects
1. Acquisitions and improvements to capital assets procured with non-PC&I funds that meet
capitalization thresholds shall be recorded directly into the designated fixed asset system
by the procuring unit.
2. Non-PC&I capital asset additions shall be placed on a “hold” status pending receipt by
FINCEN of all cost documentation to support capitalization and entry into the designated
fixed asset system.
7.5.4 Asset Disposal Policy
1. Real and Personal Property categorized as general property, plant, and equipment
(PP&E) shall be removed from general PP&E accounts, along with associated
accumulated depreciation/amortization upon disposal of the asset.
2. If, prior to disposal, retirement, or permanent removal from service, any capitalized
general PP&E no longer provides service in operations, the value of such property along
with accumulated depreciation shall be removed from the general ledger accounts.
General PP&E may no longer provide service if it suffered damage, became obsolete in
advance of expectations, or was identified as excess.
3. Management must provide documentation as evidence of an asset’s permanent removal
from service; otherwise there will be no change in the reported value of the asset and
depreciation/amortization continues. Assets permanently removed from service shall be
recorded in an appropriate asset account at its expected net realizable value. Upon
completion of the disposal of the asset, it shall be written off and any difference in the
book value of the general PP&E and its expected Net Realizable Value (NRV) shall be
recognized as a gain or a loss in the period of adjustment. However, no additional
depreciation/amortization will be taken once such assets are removed from general PP&E
in anticipation of disposal, retirement, or removal from service. The NRV, if any, must
transfer to an Asset-Pending Disposal account until the asset is disposed.
4. Valuation:
a. Valuation of assets that are to be transferred to another Federal Government agency
shall be valued at NRV, which is generally NBV.
b. Valuation of assets that are to be disposed to an entity outside the Federal
Government agency shall be valued at NRV, which is generally zero.
c. Valuation of assets whose final disposition is unknown shall be valued at NRV,
which is generally NBV.
7.5.5 Impaired Assets
1. Real and personal property assets are considered impaired when there is a significant and
permanent decline in the service utility of the asset. A decline is considered permanent
when management has no expectation that the lost service utility will be replaced or
restored. Recognition of the impairment loss should be limited to the asset’s net book
value at the time of the impairment. Impairment loss is measured as the difference
between the book value and either:
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a. The cost to acquire an asset that would perform similar remaining functions, or
b. The portion of book value attributable to the remaining functional elements of the
asset.
2. The loss shall be recognized upon impairment, and the book value of the asset reduced
accordingly.
3. If neither (1a) nor (1b) can be determined, the book value shall continue to be
depreciated/amortized over the remaining useful life of the asset.
4. If the impaired asset is to be removed from use, the loss due to impairment is measured as
the difference between the book value and the NRV, presumably zero. The NRV, if any,
shall transfer to an Equipment Pending Disposal account until the asset is disposed.
Note: Effective September 2014, Federal agencies will report the effects of general property,
plant, equipment impairments in their financial statements when they occur.
7.5.6 Oracle Asset Systems
The Oracle Fixed Asset Module (FAM) is the official system of record for real and personal
property existence and valuation for all property including that obtained with nonappropriated
funds or through the gift acceptance process.
Oracle Projects does not include detailed costs incurred on the project by ICP activities or the
Coast Guard Yard. These transactions appear in the Oracle FAM as a summary figure for ICP
transactions.
7.5.7 Inventory – Capital Assets
Refer to Chapter 10, for detailed explanation of the annual inventory of Real and Personal
property.
7.5.8 Real Property
The existence of real property assets shall be certified periodically, as determined by
Commandant (CG-84).
7.5.9 Personal Property
1. Property officers, district asset managers, and facility managers shall prepare a year-end
certification of capitalized personal property inventory under their control based on the
assets in the Oracle FAM.
2. Property officers, district asset managers, and facility managers with capitalized personal
property assets under their control shall conduct a complete physical inventory of all
capitalized property in the fourth quarter of the fiscal year and shall provide certification
to Commandant (CG-84).
These year-end capital asset certifications, including requests for changes/corrections shall be
submitted to Commandant (CG-844) in accordance with timeframes established by Commandant
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(CG-844) and corrections will then be made in FAM. All requests for changes/corrections shall
be supported by documentation.
7.6 Financial Policy for Operating Materials and Supplies
This Section applies to all operating materials and supplies (OM&S) owned by the Coast Guard
and under the control of field units.
OM&S are items that typically will be used and/or consumed during normal operations. OM&S
includes consumable and repairable spare parts. There are four categories of OM&S:
1. Held for Use – OM&S non-allowance quantities that are computed using demand that
occurred in a minimum of two years and held within timeframes established, with
predictable usage. Repairable spares in this category are Ready-for-Issue (RFI).
2. Held for Future Use – OM&S allowance quantities are maintenance-significant parts
that are necessary to maintain equipment in operating condition. Usage of allowance
stock is not predictable. Project stock held for a specific period of time for a specific
usage.
3. Excess, Obsolete, or Unserviceable (EOU) – OM&S that exceeds normal allowance
quantities or is no longer usable because of technology, law, or operational changes, or
which cannot be economically repaired.
4. Held for Remanufacture/Repair – Items in the process of (or awaiting) inspection,
disassembly, evaluation, cleaning, rebuilding, refurbishing, and/or restoration to
serviceable or technologically updated/upgraded condition. Items held for remanufacture
may consist of direct material (including repairable spare parts and subassemblies, also
referred to as “carcasses” and work-in-process. Repairable spares in this category are
Not-Ready-for-Issue parts (NRFI) pending repair).
For detailed responsibilities and procedures on the accounting and reporting of operating
materials and Supplies refer to Financial Resource Management Manual – Procedures (FRMM-
P), COMDTINST M7100.4 (series), Chapter 7, Section 7.6 (Financial Procedures for Operating
Materials and Supplies).
7.6.1 Authorities
1. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 3, Accounting for Inventory and Related Property,
October 1993.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
2. Federal Accounting Standards Advisory Board, Interpretation 7, Items Held for
Remanufacture, March 2007.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
3. Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19 (series).
http://www.dcms.uscg.mil/directives
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7.6.2 Responsibilities
7.6.2.1 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86) designates and certifies systems for financial tracking of OM&S.
7.6.2.2 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Provides financial and audit oversight for reporting of OM&S transactions.
2. Analyzes financial statements and reports, and logistics data for OM&S transactions.
7.6.2.3 Office of Logistics (CG-44)
Commandant (CG-44):
1. Ensures that logistics policy is established and maintained.
2. Monitors and conducts field visits to ensure that physical inventories are conducted in
accordance with Coast Guard policy and procedures.
3. Prepares and submits period-end financial reports.
7.6.2.4 Unit Commanding Officer (CO)/Officer-in-Charge (OIC)
The unit CO/OIC:
1. Ensures that OM&S, including repairable spares, are secure and under good physical
control.
2. Ensures that transactions are processed within time standards.
3. Maintains audit-ready records and files.
7.6.2.5 Director of Operational Logistics (DOL)/Inventory Control Points
(ICPs)/Area and District Commanders
The DOL, ICPs, and area and district commanders jointly ensure that units are in compliance
with policy. They also ensure the maintenance of complete, accurate, audit-ready records.
In addition to the responsibilities listed above, the Finance Center (FINCEN) is responsible for
reviewing and monitoring field activities to ensure timely completion, resolution, and
compliance with approved Coast Guard policy and procedures and exercising direct supervision
over the review, control, follow up and reconciliation of documents in support of general ledger
control accounts balances. For detailed responsibilities on the recognition, valuation, and
disclosure of OM&S, refer to Financial Resource Management Manual – Procedures (FRMM-
P), COMDTINST M7100.4 (series), Chapter 7, Section 7.6 (Financial Procedures for Operating
Materials and Supplies).
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7.6.3 Policy
7.6.3.1 Recognition
OM&S purchased and maintained by ICPs shall be accounted for using the consumption method.
In applying the consumption method, OM&S shall be recognized and reported as assets when
produced or purchased. “Purchased” is defined as when the title passes to the purchasing entity.
7.6.3.2 Valuation
1. OM&S Held for Use – Shall be valued at historical cost using a moving-average cost
flow assumption.
Note: Donated OM&S shall be valued at its fair market value at the time of donation.
2. OM&S Held for Future Use – Shall be valued at historical cost using a moving-average
cost flow assumption.
3. OM&S EOU – Shall be valued at expected net realizable value (NRV). The difference
between the carrying amount of the inventory before identification as EOU and its
expected NRV shall be recognized as a loss (or gain).
4. OM&S Held for Remanufacture/Repair – Shall be accounted for using the allowance
method. Under the allowance method, inventory held for repair shall be valued at the
same value as a serviceable item using, an allowance for repairs contra-asset account.
An average repair cost (ARC) methodology shall be used to calculate the total estimated
value of the OM&S repair allowance account.
7.6.3.3 Disclosure
Disclosures of OM&S shall include the following:
1. General composition of OM&S;
2. Basis for determining OM&S;
3. Changes from the prior year’s accounting methods, if any;
4. Balances for each of the categories of operating materials and supplies described above;
5. Restrictions on the use of materials;
6. Decision criteria for identifying the category to which OM&S are assigned; and
7. Changes in the criteria for identifying the category to which OM&S are assigned.
7.7 Financial Accounting and Reporting of INV and OM&S for
Coast Guard ICPs
The Coast Guard manages and maintains financial accountability for a variety of stock items
classified as inventory (INV) and operating materials and supplies (OM&S). These stock items
are managed and controlled by two inventory control points (ICPs): the Aviation Logistics
Center (ALC) in Elizabeth City, North Carolina, and the Surface Forces Logistics Center (SFLC)
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in Baltimore, Maryland. These ICPs store and manage stock items in central warehouses and at
authorized remote locations throughout the United States.
The values of INV and OM&S held at the central warehouses and at the authorized remote
locations are reflected on the ALC and SFLC stock ledgers, general ledgers (GLs), and financial
reports. The ICPs are responsible for the proper safeguarding, management, accounting, and
reporting of stock items at both the ICP and authorized remote locations. ICPs shall ensure that
their accounting records provide accurate and timely financial information for all of the Coast
Guard’s financial statements, and that the records support the financial assertions associated with
the Inventory and Related Material line items.
The ICPs use various funding sources to acquire and manage the stock items they support. The
funding sources are: supply funds; Operations & Support (O&S) funds; reimbursable funds; and
Procurement, Construction, and Improvement (PC&I) funds.
For definitions and detailed responsibilities and procedures relating to the management of
recorded stock items values and related transactions in the appropriate accounts by ICPs refer to
the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.7 (Financial Accounting and Reporting of INV and OM&S for
Coast Guard Inventory Control Points (ICPs)).
7.7.1 Purpose
This policy requires ICPs to manage transactions and recorded values relating to the acquisition,
receipt, sustainment, improvement, usage, and disposition of INV and OM&S owned or
controlled by the Coast Guard. This policy ensures that stock items and the associated
transactions are recorded timely and accurately in the appropriate GL accounts and are properly
reflected in the Coast Guard’s financial statements, notes, and disclosures, in accordance with
generally accepted accounting principles (GAAP).
7.7.2 Scope
This policy applies to all Coast Guard components that provide logistics policy and/or
management oversight to the Coast Guard ICPs, as well as those that manage (e.g., acquire,
receive, sustain, improve, use, and dispose of) ICP-controlled stock items. ICP stock items for
this policy are defined as INV (Supply Fund and Industrial Fund) and OM&S that are managed
(but not necessarily kept) at ICPs. Real property, personal property, fuel, uniforms, and retail
commissary items are not covered by this policy.
7.7.3 Procedures Modifications and Changes
Periodically, it may become necessary for ICP supporting procedures to be updated to reflect
changes in life cycle events. In such situations where necessary updates are deemed appropriate,
it shall be the responsibility of the ICP to ensure that modifications to procedures are in
alignment with this policy.
7.7.4 Authorities
1. Chief Financial Officers Act of 1990. PL 101-576, September 1990.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
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2. Federal Managers’ Financial Integrity Act of 1982 (FMFIA). P.L. 97-255.
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
3. Department of Homeland Security Financial Accountability Act [2004].
http://www.gpo.gov/fdsys/pkg/STATUTE-118/pdf/STATUTE-118-Pg1275.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 3, Accounting for Inventory and Related Property,
October 1993.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards &
Concepts, July 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant, and Equipment,
November 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 48, Opening Balances for Inventory, Operating
Materials and Supplies, and Stockpile Materials, January 2016.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
8. Federal Accounting Standards Advisory Board, Interpretation 7, Items Held for
Remanufacture, March 16, 2007.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
9. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
10. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
11. American Institute of Certified Public Accountants (AICPA), SAS No. 106, Statement of
Auditing Standards, Audit Evidence, December 2006.
http://www.aicpa.org/research/standards/auditattest/pages/sas.aspx
12. Coast Guard Uniform Supply Operations Manual, COMDTINST M4121.4 (series).
http://www.dcms.uscg.mil/directives
13. U.S. Coast Guard Personal Property Management Manual (PPMM), COMDTINST
M4500.5 (series).
http://www.dcms.uscg.mil/directives
7.7.5 Responsibilities
Following are the offices and their respective responsibilities for financial accounting and
reporting of INV and OM&S at the ICPs.
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7.7.5.1 Assistant Commandant for Engineering and Logistics (CG-4)
Commandant (CG-4) maintains overall responsibility for the development, promulgation, and
enforcement of the ICP logistics policy and procedures to ensure that they align with financial
accounting and reporting policy.
7.7.5.2 Office of Aeronautical Engineering (CG-41)
Commandant (CG-41):
1. Maintains overall responsibility for the implementation and management of key controls
in the ALC ICP procedures, which support all financial statement and internal control
assertions related to ALC ICP stock items.
2. Reports to the Assistant Commandant for Resources (CG-8), as requested, on the status
of the ALC ICP financial statement and internal control assertions.
7.7.5.3 Office of Naval Engineering (CG-45)
Commandant (CG-45):
1. Maintains overall responsibility for the implementation and management of key controls
in the SFLC ICP procedures, which support all financial statement and internal control
assertions related to SFLC ICP stock items.
2. Reports to the Assistant Commandant for Resources (CG-8), as requested, on the status
of the SFLC ICP financial statement and internal control assertions.
7.7.5.4 Office of Logistics (CG-44)
Commandant (CG-44):
1. Designs and implements logistics policy for the ICPs that aligns with financial
accounting and reporting policy.
2. Ensures that physical inventories conducted at the ICPs are in accordance with this
policy.
3. Ensures that all ICP reporting (e.g., inventories, financial) is executed in accordance with
this policy.
7.7.5.5 Mission Support Resources Directorate (DCMS-8)
DCMS-8:
1. Ensures that logistics procedures are designed and contain key controls so that financial
statement and internal control assertions can be supported.
2. Designs, executes, and reports on control-based testing for all logistics procedures.
7.7.5.6 Inventory Control Points (ALC and SFLC)
The ICPs (ALC and SFLC):
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1. Maintain physical and financial accountability of INV and OM&S assets under their
control.
2. Ensure that established logistics procedures are maintained and in accordance with
published policy.
3. Ensure that procedures and sub-processes related to ICP stock items are operating as
designed and intended, and that all transactions are fully supported and audit-ready.
4. All documentation must be retained in accordance with Information and Life Cycle
Management Manual, COMDINST M5212.12 (series).
7.7.5.7 Capital Acquisition Program Management Offices
The Capital Acquisition Program Management Offices, Commandants (CG-1), (CG-4), (CG-6),
(CG-7), and (CG-9), ensure that all purchases of ICP stock items using Coast Guard
Headquarters contracts are executed in accordance with this policy.
7.7.5.8 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) maintains overall responsibility for the development, promulgation, and
enforcement of the ICP financial accounting and reporting policy used by all organizational
components.
7.7.5.9 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Provides oversight for the development, and promulgation, of ICP financial accounting
and reporting policy used by all organizational components.
2. Provides oversight for the preparation and performs a review of the financial statements
required by this policy and by Chief Financial Officer (CFO) reporting requirements.
7.7.5.10 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Stipulates GAAP-compliant financial accounting and reporting policy requirements for
all ICP stocked items.
2. Interprets financial accounting and reporting policy for the logistics components, and
reviews logistics component’s standard operating procedures (SOPs) to ensure
compliance with financial accounting and reporting policy.
3. Provides guidance as necessary relating to the development of logistics procedures and
the design of internal controls.
7.7.5.11 Financial Management Policy Division (CG-843)
Commandant (CG-843):
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1. Develops GAAP-compliant financial accounting and reporting policies for INV and
OM&S assets.
2. Updates all Coast Guard ICP accounting policies to coordinate with new Office of
Management and Budget (OMB) bulletins, Department of the Treasury (Treasury)
bulletins, Department of Homeland Security (DHS) directives, and Federal Accounting
Standards Advisory Board (FASAB) rules and regulations.
7.7.5.12 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913) develops and implements policy for Coast Guard acquisition of stock
items (e.g., spare parts) for the ICPs, and ensures that this policy aligns with financial accounting
and reporting policy.
7.7.5.13 SLFC/Yard and ALC Financial Officer
The SFLC/Yard and ALC senior Financial Officers (comptrollers) ensure that all SFLC/Yard
and ALC reporting is timely, accurate, and in accordance with this policy.
7.7.6 Policy
Policy for financial accounting and reporting of INV and OM&S at the ICPs is specified in the
Subsections that follow. Commandant (CG-44) shall ensure that logistics policies and
procedures are in alignment with the policy requirements set forth in this document.
7.7.6.1 Classification of Newly Acquired Stock Items at ICPs
As new stock items are introduced into ICP systems, timely and accurate classification is
essential to ensure that life cycle transactions recorded during the acquisition, receipt,
sustainment, improvement, and disposal phases are maintained in the proper series of GL
accounts.
ICPs shall classify each stock item in one of the categories shown in Table 7.1 (Classification of
ICP Stock Items) below.
Table 7.1 Classification of ICP Stock Items
Classification
Category Description – Classification
General Ledger
Account Series
Financial Statement
Line Item
Inventory
Consumable, reimbursable
stock items that are held for
sale (or held in reserve for
future sale) including inventory
held in the
Supply Fund and
Industrial Fund; held for
repair; or classified as excess,
obsolete, or unserviceable.
Life cycle financial
transactions shall be
recorded in the 152x
series of general ledger
accounts.
Inventory and
Related Property
COMDTINST M7100.3F
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Classification
Category Description – Classification
General Ledger
Account Series
Financial Statement
Line Item
Operating
Materials and
Supplies
Consumable stock items that
are consumed during normal
operations and that are held for
use; held in reserve for future
use; held for
remanufacture/repair; or
classified as excess, obsolete,
or unserviceable.
Life cycle financial
transactions shall be
recorded in the 151x
series of general ledger
accounts.
Inventory and
Related Property
7.7.6.2 Acquisition of Stock Items at ICPs (ICP Acquisitions)
Stock items are acquired by the ICPs using various methods such as formal contracts (major
acquisitions), simplified acquisition procedures (small purchases), Military Interdepartmental
Purchase Requests (MIPRs), Federal Supply System (FSS), Military Standard Requisition
and Issuing Procedures (MILSTRIP), credit card purchases, and transfers-in from various
sources.
7.7.6.3 Acquisition of Stock Items at ICPs (Non-ICP Acquisitions)
Stock items are occasionally acquired for the ICPs by Headquarters (HQ) or other entities,
using formal contracts (major acquisitions) or other methods. Advance ICP approval is
required before items are delivered to the ICPs. These stock items are required to be
purchased and delivered to the ICPs for life cycle support of parent assets (e.g., HC-130J
aircraft).
1. The names of the contract specialist and contracting officer shall be noted in the
transmittal. The acquisition project office shall be the responsible liaison between the
contractor and the ICP to discuss any details or needs related to the shipment. ICPs shall
work with Commandant (CG-9), HQ acquisition project managers (APMs), and other
acquisition entities to resolve discrepancies of unsupported stock items. An unsupported
stock item is any item without full documentation to support quantity, unique item
identification, valuation, and date of delivery.
2. Commandant (CG-9), APMs, other acquisition entities, and ICPs shall proceed with
alternative valuation methods within 15 business days for stock items that cannot be
supported. An unsupported item is one that was received by the ICP without the
completed documentation (e.g., contract, invoice), or a transfer-in without proper support.
Additional costs to support unsupported stock items are the responsibility of the HQ
APM, and can result in additional costs to the acquisition project. Valuation of stock
items does not become the responsibility of the ICP until stock item acceptance, and the
ICP shall not receipt for stock items without acceptable valuation documentation as
required in Subsection 7.7.6.8 (Valuation of Stock Items at ICPs).
3. Stock items lacking complete documentation shall be accepted as frustrated stock items
(see description in Subsection 7.7.6.5 (Frustrated Receipt of Stock Items at ICPs) below).
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7.7.6.4 Receiving of Stock Items at ICPs
Initial physical control begins when title passes to an entity or when the items are delivered and
accepted. The items received and their initial physical condition, whether purchased, donated, or
transferred, are recorded in the inventory system records, both stock and financial. This Section
applies to all stock items received at the ICPs, such as turn-ins, transfers, new items, carcasses,
etc.
7.7.6.5 Frustrated Receipt of Stock Items at ICPs
Stock items occasionally arrive at the ICPs with no advance notice and with little or no
documentation that would identify the items to a pending order or “due in”, or in a non-
conforming condition. These “frustrated receipt” stock items cannot be received or receipted.
They are temporarily stowed in a warehouse location while ICP personnel engage in causative
research to identify the pending order or “due in” information. While in a frustrated receipt
status, the items are not recorded on the ICP stock record, and their valuation is not recorded in a
GL account. Consequently, frustrated receipt stock items are not reflected in Coast Guard
financial statements.
7.7.6.6 Receipt of Stock Items at ICPs
After a thorough inspection of each received and accepted item, the ICP stock records are
updated, and the financial transactions are recorded in the ICP GLs. This event is also the title-
passing point. Evidential matter is gathered to support the receiving-receipting process, and all
ICP systems are updated. Stock items that cannot be receipted are either frustrated or rejected.
7.7.6.7 Stowing of Stock Items at ICPs
Once the receiving-receipting process for ICP stock items is complete, the items are stowed in a
pre-assigned ICP warehouse location, or prepared for delivery as needed. As these items become
warehouse stock, the warehouse records are updated, noting the warehouse shelf or other
location that is reflected in the ICP stock system.
7.7.6.8 Valuation of Stock Items at ICPs
Financial transactions are recorded in the ICP GL and the ICP sub-systems are updated as stock
items are receipted and accepted (passing of title).
Table 7.2 Required Valuation Documentation by Acquisition Type
Acquisition Type Documentation Required for Valuation
Commercial
1. Signed contract itemizing the stock item
2. Receipt document
3. Invoice
4. Proof of payment
MIPR
1. Signed MIPR itemizing the stock item
2. Receipt document
3. Invoice
4. Proof of payment/IPAC
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Acquisition Type Documentation Required for Valuation
MILSTRIP
1. Issue Release/Receipt Document, Form DD 1348-1A,
or current FEDLOG screen print
2. Receipt document (Issue Release/Receipt Document,
Form DD 1348-1A, signed/dated)
3. Proof of payment/IPAC
Credit Card
1. Credit card statement itemizing the stock item
2. Receipt document
3. Proof of payment
Project Order
1. Signed project order itemizing the stock item
2. Receipt document
3. Proof of payment/IPAC
Transfer-in
without ICP
Reimbursement
1. Transfer document itemizing the stock item
and showing fair market value (e.g., Requisition and
Invoice/Shipping Document, Form DD-1149)
2. Receipt document
7.7.6.9 Alternative Valuation of Stock Items at ICPs
Occasionally, ICP stock items are received with inadequate documentation to support valuation.
In those cases, where ICP research reveals that the documentation is inadequate or non-existent,
alternative valuation methodologies are employed after exhausting all practical methods to
obtain the necessary historical cost documentation.
7.7.6.10 Physical Inventories of Stock Items at ICPs
The adequate design, planning, and execution of physical inventories are critical elements in
determining if ICP processes are conforming to management internal controls. Effective
physical inventory programs are also valuable methods for ensuring that ICP stock item values
are accurately reflected in Coast Guard financial statements. Ideally, at least one of the required
physical inventories should be conducted as close to fiscal year-end as possible (but completed
before) to help ensure that the year-end financial statements are accurate and to minimize the
amount of roll-forward work required.
1. Commandant (CG-44) shall ensure that the ICP physical inventory program policy
guidance in Coast Guard Uniform Supply Operations Manual, COMDTINST M4121.4
(series), is designed to support the rights, existence, and completeness of financial
statement assertions, incorporating both record-to-floor and floor-to-record testing.
For example, Navy type/Navy owned (NTNO) items need special consideration to
determine applicable rights/obligations of the Coast Guard.
2. Commandant (CG-44) shall ensure that ICP physical inventories are designed to ensure
that there is a chance of selection for all ICP-managed stock items. Stock items noted as
exceptions to random inventories shall be identified and noted as to why the exception is
granted, and shall contain a note as to how and when subsequent physical inventory
testing will occur.
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7.7.6.11 Periodic Reconciliation of the Stock Ledger (Stock Record) to the
General Ledger for Stock Items at ICPs
Inventory transactions are recorded both to the inventory stock subsidiary ledgers and to the GL.
Certain key processes, such as the statistical-based physical inventories, rely heavily on the
accuracy of both the stock ledger and the GL. For these reasons, it is imperative that the two
ledger systems remain in balance.
7.7.6.12 Periodic Reviews of Classification, and Excess, Obsolete, or
Unserviceable Stock Items at ICPs
During the time that stock items are maintained in the sustainment phase, periodic reviews must
be made to ensure that inventory items are properly classified and valued, and to guarantee the
integrity of the financial statements. Reviews shall be conducted in accordance with the
following criteria to ensure that stock items are appropriately classified as either INV or OM&S,
and also to determine if excess, obsolete, or unserviceable (EOU) stock items exist. These
classifications can affect both the valuation of inventories and the financial statements.
7.7.6.13 Changes in Classification of Stock Items at ICPs
Stock items occasionally require reclassification due to changing factors related to the item itself.
When such events occur, a review of the stock item will be completed, and the item will be
reclassified. Changes in classification can affect both the valuation of the ICP holdings and the
financial statements.
ICPs shall ensure that reclassifications are executed and documented in accordance with
Subsection 7.7.6.1 (Classification of Newly Acquired Stock Items at ICPs) and that all financial
records are updated to reflect the reclassification.
7.7.6.14 Loans, Redistributions, and Mandatory Turn-in of Stock Items at ICPs
Stock items are routinely redistributed between authorized ICP stock points. Stock items are
also regularly loaned or issued to authorized Coast Guard units. For example, consumable items
may be redistributed from the ICP warehouse to an authorized stock point. All transactions of
these types are recorded in both the ICP stock records and the GLs.
7.7.6.15 Issue and Sale of Stock Items at ICPs
Stock items are commonly issued at ICPs; however, if classified as inventory, stock items can be
sold to Coast Guard and other Government agencies. It is imperative that all issues/sales of
stock items be recorded in a timely and accurate manner. ICPs must also maintain the evidential
documentation that supports the authorized issuance or disposition of stock items. On-hand
quantities of stock items in ICP stock systems are systematically decreased at the point of issue
or sale, with corresponding decreases in inventory value and associated revenue recognition that
must be recorded in the ICP financial system in accordance with Treasury financial management
requirements.
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7.7.6.16 Pick-Pack-Ship of Stock Items at ICPs
Stock items issued or sold must be picked from warehouse shelf locations, packed in an
acceptable manner, and shipped to authorized recipients in a manner that meets required
deadlines. Because ICP stock systems decrease the on-hand quantities, it is very important to
pick-pack-ship the items in a timely and accurate manner.
7.7.6.17 Reutilization of Stock Items at ICPs
Stock items (spare parts) are occasionally removed from assets (e.g., cutters), and are refurbished
and restocked at ICPs, Coast Guard units, or other authorized recipients within DHS or
Department of Defense (DOD). Parts that are removed from parent assets must be clearly
identified and accurately valued so that the asset valuation and spare parts valuations can be
executed and supported in a compliant manner in order to sustain key financial statement
assertions.
7.7.6.18 Disposals, Transfers, and Retirement of Stock Items at ICPs
Stock items considered EOU are routinely issued to an authorized disposal activity, transferred,
or issued to an authorized recipient (e.g., foreign military sale).
7.7.6.19 Financial Reporting for ICPs
Accurate and timely reporting of ICP balances to Congress, OMB, Treasury, DHS, and other
agencies is of utmost importance. It is extremely important that ICPs report to FINCEN in a
timely manner to ensure that all financial information and transactions are properly reported in
the Coast Guard consolidated financial statements.
7.8 Accounting for Coast Guard Internal Use Software
This Section establishes the accounting policy for internal use software. It does not include
software procured with nonappropriated funds (NAFs). Accounting policies for NAF-procured
software is the responsibility of Commandant (CG-1).
7.8.1 Overview
This Section implements the requirements of the SFFAS No. 10, Accounting for Internal Use
Software, which requires Federal agencies to capitalize material cost of software. The standard
is applicable to all material internal use software, whether it is procured from a vendor
(commercial off-the-shelf), developed by the Federal entity with or without contractor assistance
(internally developed), or developed in its entirety by a contractor (contractor-developed). Costs
incurred prior to 1 October 2000 (effective date of SFFAS No. 10) will not be capitalized.
The Coast Guard will establish its own capitalization threshold, in accordance with DHS Policy,
as well as guidance on applying the threshold, for bulk purchases of software programs and for
modules or components of a total software system.
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For definitions, detailed responsibilities and procedures on capitalizing material cost of software,
refer to the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 7, Section 7.8 (Accounting for Coast Guard Internal Use Software).
7.8.2 Authorities
1. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
2. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant, and Equipment,
November 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 10, Accounting for Internal Use Software, October
1998.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Federal Accounting Standards Advisory Board, Technical Release 16, Implementation
Guidance for Internal Use Software, January 2016.
http://files.fasab.gov/pdffiles/handbook_tr_16.pdf
6. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.1, “Property, Plant and Equipment.”
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.1%2
0Property,%20Plant%20and%20Equipment.pdf
7.8.3 Responsibilities
The Subsections that follow list the offices and their respective responsibilities for internal use
software accounting.
7.8.3.1 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Provides oversight for developing and promulgating policy regarding accounting for
costs associated with Coast Guard internal use software.
2. Provides subsequent oversight to field units in order to ensure adherence to the software
capitalization policy.
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3. Oversees the capitalization of internal use software, and preparation and submission of
financial statements and reports for internal use software.
7.8.3.2 Finance Center (FINCEN)
FINCEN personnel ensure that internal use software assets meeting capitalization requirements
are accurately recorded in the correct property, plant, and equipment (PP&E) accounts.
7.8.3.3 Office of Enterprise Applications Management (CG-63)
Commandant (CG-63) requires that all internal use software projects approved by Commandant
(CG-63) and having a software budget of $750,000 or greater are reported to FINCEN annually
by the software project manager.
Refer to Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 7, Section 7.8 (Accounting for Coast Guard Internal Use Software) for
detailed responsibilities for the following Coast Guard personnel:
1. Commanders of Logistics and Service Center Commands and HQ Units; HQ Program
Managers
2. Software Project Managers
3. Software Program Managers
7.8.4 Recognition and Valuation
1. Capitalize internal use software having a useful life of five years or more and costing
$750,000 or more to acquire, develop, set up, implement, and/or enhance.
2. For software meeting the above conditions, the following costs related to purchase,
development, or modification shall be initially capitalized in Oracle Projects.
a. Capitalized cost shall include the full cost (direct and indirect) incurred by the Coast
Guard during the software development stage. Such cost shall be limited to costs
incurred after:
1) The completion of conceptual formulation, design, and testing of possible
software project alternatives (the preliminary design stage); and
2) Management authorizes and commits to a computer software product or project,
and believes that it is more likely than not that the project will be completed and
that the software will be used to perform the intended function with an estimated
service life of five or more years.
b. The personnel and related cost of Coast Guard resources expended during the
software development or customization stage shall be capitalized. To facilitate this
process, the personnel hours for programmers and system analysts shall be charged at
the prevailing Standard Personnel Costs (SPC) rate and reported in March and
September to FINCEN.
3. Costs incurred after final acceptance testing has been successfully completed should be
expensed. Where the software is to be installed at multiple sites, capitalization should
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cease at each site after testing is complete at that site. The Coast Guard should identify a
pre-determined agency milestone such as the go-live or in-service date which is
equivalent to a final acceptance test for capitalization cut off purposes.
7.8.4.1 Accounting for Internal Use Software Cost Incurred
The following table gives the appropriate accounting treatment for the costs incurred at each
phase of a software project:
Table 7.3 Accounting Treatment for Software Project Phases
Project Phase Typical Tasks Treatment
Preliminary Design Project evaluation
Concept testing
Evaluation of alternatives
Project approval
Expense all.
Development/
Implementation
Coding
Documentation
Acceptance testing
Installation
Capitalize all.
Post
Implementation/Oper
ational
Training
Data conversion
Maintenance
Enhancement
Impairment/Discontinued
Expense.
Expense.
Expense.
See Subsection
7.8.4.7.
See Subsection
7.8.4.8.
Remove asset.
7.8.4.2 Contractor-Developed Software
1. Capitalized costs shall include the amount paid to a contractor to design, program, install,
and implement the software.
2. Material internal costs incurred by the Coast Guard to implement the contractor-
developed software and otherwise make it ready for use shall also be capitalized.
7.8.4.3 Software Purchased from Vendors
1. Capitalized costs shall include the amount paid to the vendor for the software.
2. Material internal costs incurred by the Coast Guard (including contractor cost to adjust
and implement the software and otherwise make it ready for use) shall also be
capitalized.
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7.8.4.4 Software Licenses
1. If the term of software license(s) is 2 years or more with periodic payments, the license
should be evaluated against lease criteria as stated in SFFAS No. 5, Accounting for
Liabilities of the Federal Government, Paragraphs 43-46 and SFFAS No. 6, Accounting
for Property, Plant, and Equipment, Paragraph 20 to determine if it is a capital or
operating lease. If the license(s) is perpetual with an upfront cost to use the software for
its entire lifetime, then the entity is purchasing IUS and should apply its existing policy
for capitalization thresholds to determine if the license should be capitalized or expensed.
2. A license agreement may include executory costs for maintenance and technical support.
Agency judgment should apply in determining what portions of license fees are
attributable to software capitalizable costs versus executory costs. Assuming lease
capitalization criteria and thresholds are met, software license capitalization amounts may
be derived from the payment schedule contained in the license agreement. As stated in
SFFAS No. 5, Accounting for Liabilities of the Federal Government, if the portion of the
minimum lease payments representing executory cost is not determinable from the lease
provisions, the amount should be estimated. Agencies may also want to consider having
each license agreement specifically identify the various costs throughout the license
lifecycle, for example, initial license, maintenance, and enhancement.
7.8.4.5 Shared Services
1. Shared Service means a mission or support function provided by one business unit to
other business units within or between organizations. The funding and resourcing of the
service is shared and the providing entity effectively becomes an internal/external service
provider. There are three types of shared service structures in the federal government:
intra-agency, interagency and commercial. Intra-agency shared services include those
provided within the boundaries of a specific organization such as a federal department or
agency, to that organization’s internal units. Interagency shared services are those
provided by one federal organization to other federal organizations that are outside of the
provider’s organizational boundaries. Commercial shared services are those provided by
private vendors.
2. For intra-agency shared services, a cost allocation methodology could be developed in
accordance with SFFAS No. 4, Managerial Cost Accounting Standards and Concepts,
Paragraphs 120 through 125. For interagency shared services and commercial shared
services, the service provider entity that owns (receives funding/responsible for
maintaining) the software should account for the software in accordance with SFFAS No.
10, Accounting for Internal Use Software. In the event that the entity receiving the
service (the customer) has the contractual right to take possession of the software at any
time during the hosting period without significant penalty, and it is feasible for the
customer to either run the software on its own hardware or contract with another party
unrelated to the vendor to host the software, then the customer should account for the
software in accordance with SFFAS No. 10, Accounting for Internal Use Software.
3. If the shared service arrangement includes a software license, the customer should
account for the software license element of the arrangement consistent with the
acquisition of their other software licenses, as discussed above.
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Note: SFFAS No. 10, Accounting for Internal Use Software, is not applicable to a shared
service arrangement that does not convey a contractual right to the IUS or to ones that do
not include an IUS license.
7.8.4.6 Amortization
1. Total capitalized cost for a software project shall be amortized over a five-year period. If
it is determined that software is to be replaced, the useful life initially established must be
reduced to the remaining period of use. The unamortized cost of the old software is
expensed when the new software has completed testing. Likewise, when an enhancement
is made that extends the life of the software; the established life must be extended for
amortizing the remaining costs.
2. If the project contains independent/stand-alone modules or components, amortization
shall begin when that module or component has been successfully tested and
implemented.
3. If the use of a module is dependent upon the completion of another module(s), the
amortization of that module shall begin when both that module and the other module(s)
have successfully completed testing/implementation.
7.8.4.7 Enhancements
Enhancements normally require new software specifications and may also require a change of all
or part of the existing software specifications.
1. The acquisition cost of enhancements to existing internal use software (and modules
thereof) shall be capitalized when it is more likely than not that they will result in
significant additional capabilities. Significant additional capabilities are modifications to
existing IUS that result in additional functionality—that is, modifications to enable the
software to perform tasks that it was previously incapable of performing.
2. If one module is dependent upon another to function, then those modules should be
evaluated together as one enhancement. All costs of an enhancement, including any costs
carried over or allocated from the original software, should be amortized over the
enhancement's estimated useful life.
3. The cost of minor enhancements (not meeting the capitalization threshold) resulting from
ongoing systems maintenance shall be expensed in the period incurred. For example,
upgrading to a new operating system (e.g., Windows Vista) purchased in bulk for a
nominal cost. Also, the purchase of enhanced versions of software for a nominal charge
shall be expensed in the period purchased.
4. Costs incurred solely to repair a design flaw or to perform upgrades that may extend the
useful life of the software without adding capabilities/functionality shall be expensed.
7.8.4.8 Impairment
Coast Guard will recognize impairment when discontinuing or removing a portion of the
software from use. The impairment of software requires the following process:
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1. Recognize impairment when discontinuing or removing a portion of the software from
use.
2. Recognize the loss due to impairment in the period the impairment was determined.
Measure the loss due to impairment as the difference between the Net Book Value (NBV)
and either:
a. The cost to acquire software that would perform similar remaining functions; or
b. The portion of NBV attributable to the remaining functional elements of the software.
If neither (a) nor (b) can be determined, continue to amortize the original value over the
remaining useful life of the software.
3. When a developmental software project is suspended pending management’s evaluation
as to whether to resume or terminate the project, the software development cost may
remain capitalized as long as it is more likely than not that the developmental software
project will eventually be completed and the cost incurred or expected to be incurred
meets the capitalization threshold. The status of the project should be reevaluated
periodically and the capitalized cost should be written off if management concludes that
it is more likely than not that the software will not be placed into service in the future.
4. When discontinuing a software project prior to its completion, the project manager must
notify Commandant (CG-84) through its appropriate program office to coordinate project
closeout and adjustments to the general ledger. Generally, the project manager is
responsible for project closeout.
7.8.4.9 Integrated Software
1. Integrated software necessary to operate PP&E rather than execute an application is
considered part of PP&E and capitalized and depreciated accordingly. (An example is
software for the Vessel Traffic System.)
2. The aggregate cost of the hardware and software shall be used to determine whether to
capitalize or expense the costs.
7.8.4.10 Bulk Purchases
A bulk purchase of software is the purchase at one time, and often at a reduced price, of a
quantity of a particular application (e.g., multiple copies of Windows Vista or Office 2007). If
purchased separately, these items would not be significant or material.
1. Bulk purchases of internal use software and modules/components of a total software
system that meet the capitalization threshold of $750,000 shall be capitalized and
systematically amortized over the estimated useful life of the software, or 36 months,
whichever is less. The 36-month period shall be based on the release date of the product
rather than the purchase or acquisition date.
2. If a bulk purchase does not meet the capitalization threshold, it shall be expensed in the
month acquired.
3. Bulk purchases held in the Supply Fund shall be treated as inventory, until sold
(e.g., Oracle Fixed Assets, Entrust Digital Signature).
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7.8.4.11 Post Implementation Cost
1. Excluding capitalizable enhancements, cost incurred after final software acceptance
testing and successful implementation shall be expensed.
2. For projects involving multiple site installation, the costs capitalized for each site shall
accrue only until testing/implementation is completed.
3. See Subsection 7.8.4.8 (Impairment) in this Manual for treatment of post implementation
costs related to impairments.
7.9 Financial Policy for Revenue and Accounts Receivable
7.9.1 Overview
This Section establishes policies for use by the Coast Guard to recognize, record, report, and
manage revenue and receivables in accordance with generally accepted accounting principles
(GAAP) and Federal Accounting Standards Advisory Board (FASAB) standards.
The SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for
Reconciling Budgetary and Financial Accounting, states that revenue is an inflow of resources
that the Government demands, earns, or receives by donation. Revenue comes from two
sources: exchange transactions and non-exchange transactions. Exchange revenue arises when a
Government entity provides goods and services to the public or to another Government entity for
a price. Another term for “exchange revenue” is “earned revenue.” Non-exchange revenue
arises primarily from the exercise of the Government’s power to demand payments from the
public (e.g., taxes, duties, fines, and penalties). Non-exchange revenue also includes donations.
The term “revenue” does not encompass all of the financing sources of Government reporting
entities. For example, revenue does not include most of the appropriations that Government
entities receive.
FASAB accounting standards recognize exchange revenue at the time that a Government entity
provides goods or services to the public or to another Government entity. The revenue is
measured at the price likely to be received.
SFFAS No. 1, Accounting for Selected Assets and Liabilities, states that accounts receivable arise
from claims to cash or other assets, and requires that receivables be recognized when a Federal
entity establishes a claim to cash or other assets against other entities. Such claims can be based
on legal provisions (e.g., a legislative requirement), a payment due date, or goods or services
provided.
For definitions, detailed responsibilities and procedures relating to the recording, maintaining,
and reporting of revenue and receivable values, refer to Financial Resource Management
Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.9
(Revenue and Accounts Receivable).
7.9.1.1 Purpose
The purpose of this Section is to establish compliant policies in support of the revenue and
accounts receivable life cycle.
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7.9.1.2 Scope
The policies in this Section apply to all Coast Guard offices that record, maintain, and report
values relating to revenue and receivables. Adherence to these policies will facilitate the
completeness and accuracy of the revenue and receivables transactions that are recorded and
maintained within the Coast Guard’s three general ledger (GL) and subsidiary ledger systems:
1. Core Accounting System (CAS);
2. Asset Logistics Management Information System (ALMIS); and
3. Naval and Electronics Supply Support System (NESSS).
7.9.2 Authorities
The financial accounting treatment of accounts receivable is contained in the following
directives:
1. Chief Financial Officers Act of 1990 (“CFO Act”), as amended. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Debt Collection Improvement Act of 1996 (DCIA). PL 104-134, Chapter 10, Section
31001.
http://fiscal.treasury.gov/fsservices/gov/debtColl/rsrcsTools/debt_dca.htm
3. Economy Act of 1932. 31 USC 1535, “Agency Agreements.”
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1535.pdf
4. Federal Managers Financial Integrity Act of 1982 (FMFIA). PL 97-255.
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
5. Government Management Reform Act of 1994. PL 103-356.
http://govinfo.library.unt.edu/npr/library/misc/s2170.html
6. Government Performance and Results Act of 1993. PL 103-62.
http://govinfo.library.unt.edu/npr/library/misc/s20.html
7. 31 CFR 285, “Debt Collection Authorities under the Debt Collection Improvement Act of
1996.”
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol2/pdf/CFR-2012-title31-vol2-
part285.pdf
8. 14 USC 946, “User Fees”.
http://uscode.house.gov/
9. 46 USC 2110, “Fees”.
https://www.gpo.gov/fdsys/granule/USCODE-2011-title46/USCODE-2011-title46-
subtitleII-partA-chap21-sec2110/content-detail.html
10. Department of Homeland Security Appropriation Act.
https://www.congress.gov/114/plaws/publ4/PLAW-114publ4.pdf
COMDTINST M7100.3F
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11. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
12. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 7, Accounting for Revenue and Other Financing
Sources and Concepts for Reconciling Budgetary and Financial Accounting, May 1996.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
13. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
14. Office of Management and Budget, Circular A-25, Transmittal Memorandum No. 1, User
Charges, July 1993.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
15. Office of Management and Budget, Circular A-76, Performance of Commercial
Activities, May 2003 and revision of Oct 2006.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
16. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
17. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
18. Office of Management and Budget, Circular A-129, Policies for Federal Credit
Programs and Non-Tax Receivables, January 2013.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
19. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
20. Department of the Treasury, Bureau of the Fiscal Service, Managing Federal
Receivables, March 2015.
http://fiscal.treasury.gov/fsservices/gov/debtColl/rsrcsTools/debt_guidance_mfr.htm
21. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Parts 2, 4, and 6.
http://tfm.fiscal.treasury.gov/v1.html
22. Department of Homeland Security, Chief Financial Officer, Component Requirements
Guide for Financial Reporting (series).
http://cfo-policy.dhs.gov/default.aspx
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23. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Chapter 3, Section 3.13, “Non-Tax Debt Collection, Referral
and Write-Off.”
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.13%
20Non-Tax%20Debt%20Collection,%20Referral%20and%20Write-Off.pdf
24. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Chapter 3, Section 3.14, “Waiver of Claims Against Employees
for Erroneous Payments.”
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.14%
20Waiver%20of%20Claims%20Against%20Employees%20for%20Erroneous%20Payme
nts.pdf
25. Coast Guard Claims and Litigation Manual, COMDTINST M5890.9 (series).
http://www.dcms.uscg.mil/directives
26. Finance Center Standard Operating Procedures, Chapter 9, “Procedures for Receivables,
Collections and Lockbox”.
http://www.dcms.uscg.mil/directives
27. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
7.9.3 Responsibilities
Following are the offices and their respective responsibilities relating to revenue and receivables
policies, and also to the supplemental financial information recorded in Coast Guard GLs and
subsidiary ledger systems.
7.9.3.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8):
1. Directs financial management activities delineated under the CFO Act, which include
accounting, budgeting, procurement, logistics, financial systems, policy, planning, and
audit oversight.
2. Prepares and submits information for the annual Performance Accountability Report
(PAR), which includes the annual financial statements to the Department of Homeland
Security (DHS) Office of the Chief Financial Officer (OCFO).
3. Provides financial analyses; a description of the effectiveness of management controls;
program performance results related to the Coast Guard’s missions, goals, and objectives;
and an assessment of data validity and reliability in support of performance measures.
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7.9.3.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Directs the Financial Reporting and Analysis Division (CG-842) and the Financial
Management Policy Division (CG-843) in the development of financial policies and
internal controls.
2. Ensures that operations adhere to current financial management policies.
3. In coordination with the Office of General Law Commandant (CG-0944), ensures that
financial policies conform to current laws, regulations, and accounting standards.
7.9.3.3 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86) ensures that financial systems comply with applicable external
requirements, including effective internal controls.
7.9.3.4 Office of Resource Management (CG-83)
Commandant (CG-83) monitors receivables established under reimbursable agreements (RAs)
and user fee reimbursement authority, concurrent with budget execution and other duties.
7.9.3.5 Office of Claims and Litigation (CG-0945)
Commandant (CG-0945) manages an extensive claims program under several Federal statutes.
These involve the adjudication of claims made against the Agency and the collection of monies
owed the Government due to penalties assessed for violations of Federal law, damage to Coast
Guard property, and cleanup and recovery costs.
7.9.3.6 Office of Information Management (CG-61)
Commandant (CG-61) develops financial record retention policies and procedures to provide
consistent operational practices among Coast Guard units and ensure compliance with National
Archives and Records Administration (NARA) regulations.
7.9.3.7 Academy, ALC, FINCEN, NPFC, SILC, PPC, and SFLC/Yard
The Coast Guard Academy, Aviation Logistics Center (ALC), Finance Center (FINCEN),
National Pollution Funds Center (NPFC), Shore Infrastructure Logistics Center (SILC), Pay and
Personnel Center (PPC), and Surface Forces Logistic Center (SFLC/Yard), as applicable:
1. Maintain accounting records and documentary support at the transaction level for revenue
and accounts receivable transactions.
2. Maintain and update the CAS, ALMIS, or NESSS GL and subsidiary ledger systems
accounts associated with revenue and accounts receivable.
3. Generate and analyze reports provided by the CAS, ALMIS, and NESSS GL and
subsidiary ledger systems to identify variances.
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4. Prepare and maintain appropriate supporting documentation for all reconciliation and
analysis activities.
5. Research and document all explanations for differences and corrections of accounts
receivable balances in accordance with U.S. Standard General Ledger (USSGL), DHS,
and Commandant (CG-8) requirements.
7.9.3.8 Legal Services Command-West (LSC-West)
LSC-West manages accounts receivable transactions, and coordinates with FINCEN whenever
an enforcement activity requiring Hearing Office involvement or a Notice of Violation (NOV) is
processed through the Maritime Information for Safety and Law Enforcement (MISLE) database.
7.9.3.9 National Pollution Funds Center (NPFC)
In addition to the responsibilities noted in Subsection 7.9.3.7 (Academy, ALC, FINCEN, NPFC,
PPC, and SFLC/Yard) above, NPFC also ensures that accounts receivable transactions associated
with pollution-related funds are reported to FINCEN for inclusion in the GL. Examples include
transactions associated with the Oil Spill Liability Trust Fund (OSLTF); the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA); and Emergency Support
Function (ESF) #10 under the National Response Framework (NRF).
7.9.3.10 FINCEN
FINCEN personnel:
1. Maintain GL balances for accounts receivable in CAS.
2. Require reconciliation of subsidiary records to controlling GL accounts.
3. Maintain receivables/collections for assigned programs.
7.9.3.11 Accounts Receivable Manager
The accounts receivable manager:
1. Exercises effective stewardship over accounts receivable.
2. Ensures that personnel who perform accounts receivable functions have adequate
training.
3. Complies with the receivable policies in this Manual and other applicable guidance.
4. Establishes and implements SOPs in support of prevailing accounts receivable policies.
5. Implements and maintains effective internal controls.
For additional responsibilities on maintaining, recording, and accounting for revenue and
receivables, please refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.9 (Revenue and Accounts Receivable).
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7.9.4 Revenue Policy
The Coast Guard recognizes revenue as actual or anticipated inflows of budgetary resources
made available through appropriations and from exchange and non-exchange transactions that
result from operations approved by Congress.
This Section defines policies used to support the completeness and accuracy of the following
revenue classifications:
1. Entity Non-Exchange Revenue (see Subsection 7.9.4.3);
2. Entity Exchange Revenue (see Subsection 7.9.4.4); and
3. Non-Entity Custodial Revenue (see Subsection 7.9.4.5).
All documentation used to support entity non-exchange, entity exchange, non-entity custodial
revenue values, reconciliations and adjustments, intragovernmental receivable values, and
MILSTRIP messages, receiving reports, and invoices shall be maintained in accordance with
Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
7.9.4.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to revenue:
1. 14 USC 946, “User fees.”
http://uscode.house.gov/
2. 31 USC 9701, “Fees and Charges for Government Services and Things of Value.”
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleVI-chap97-sec9701.pdf
3. 46 USC 2110, “Fees.”
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partA-chap21-sec2110.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 20, Elimination of Certain Disclosures Related to
Tax Revenue Transactions by the Internal Revenue Service, Customs, and Others,
Amending SFFAS 7, Accounting for Revenue and Other Financing Sources, September
2001.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
7.9.4.2 Responsibilities
7.9.4.2.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8):
1. Provides policy and direction for financial management personnel, programs, systems,
activities, operations, and the reporting process.
2. Ensures effective implementation of Coast Guard financial management policy,
procedures, and internal controls.
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7.9.4.2.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84) develops and implements financial policies over the maintenance of GL
and subsidiary ledger accounts associated with entity non-exchange revenue, entity exchange
revenue, and non-entity custodial revenue as required by the DHS Office of Financial
Management (OFM) and other applicable Federal guidance.
7.9.4.2.3 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842) provides guidance and oversight to ensure the accurate and timely
reporting of entity non-exchange revenue, entity exchange revenue, and non-entity custodial
revenue.
7.9.4.2.4 Office of Information Management (CG-61)
Commandant (CG-61) oversees financial records retention policy in order to provide consistent
operational practices among Coast Guard units and ensure compliance with Government
regulations.
7.9.4.2.5 Academy, ALC, FINCEN, NPFC, PPC, and SFLC/Yard
The Coast Guard Academy, ALC, FINCEN, NPFC, PPC, and SFLC/Yard, as applicable:
1. Maintain and update the CAS, ALMIS, or NESSS GL and subsidiary ledger systems
associated with entity non-exchange revenue, entity exchange revenue, and non-entity
custodial revenue.
2. Ensure that the Coast Guard’s GL and subsidiary ledgers at the detail level are reconciled
to supporting source documentation for entity non-exchange revenue, entity exchange
revenue, and non-entity custodial revenue.
3. Support and prepare adjusting journal entries to reflect changes in the values for entity
non-exchange revenue, entity exchange revenue, and non-entity custodial revenue.
4. Reverse accrued revenue in a timely manner, and research any abnormal balance
discovered during the reconciliation of GL and subsidiary ledger accounts at the
summary and detail levels.
7.9.4.3 Entity Non-Exchange Revenue
The Coast Guard receives or recognizes entity non-exchange revenue from fines, penalties,
miscellaneous user fees, and donations from the public. Such revenue should be measured by
the collecting entities but should be recognized by the entities legally entitled to the revenue.
Revenue arising from donations should be recognized as inflows of resources for those assets
that meet recognition criteria and should be measured at the estimated fair value of the
contribution.
7.9.4.3.1 Policy
1. The Coast Guard shall report entity non-exchange revenue based on GL account balances
maintained in the ALMIS, NESSS, and CAS GL systems.
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2. The Coast Guard shall record these revenues in the CAS, NESSS, and ALMIS GL
systems, and include them in the Statement of Budgetary Resources (SBR) and the
Statement of Net Cost (SNC) during the preparation of the financial statements.
3. The Coast Guard shall recognize entity non-exchange revenue whenever one of the
following events occur:
a. The receipt of goods or services from other Government entities without
reimbursement of all related costs;
b. An intergovernmental transfer of cash or capitalized assets without available
reimbursement between both parties;
c. Gains transactions with individuals or another Government entity;
d. Appropriations available for apportionment that have not been fully apportioned;
or
e. The return of equipment procured by a lease or service contract for a refund
during the agreed-upon cancellation period.
4. The Coast Guard shall differentiate entity non-exchange revenue between financial
sources (e.g., cash and securities) and non-financial sources (e.g., land and buildings).
5. The Coast Guard defines donations as contributions to the Government, i.e., voluntary
gifts of resources to a Government entity by a non-Federal entity. The Government does
not give anything of value to the donor, and the donor receives only personal satisfaction.
The donation of cash, other financial resources, or non-financial resources is therefore,
non-exchange revenue.
6. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner.
7. The Coast Guard shall obtain supporting documentation, such as receiving reports (e.g.,
Material Inspection Acceptance and Receiving Report, DHS Form 700-21), appropriation
laws, transfer documents, and contracts to determine the validity and the value of entity
non-exchange revenue before the transactions are entered into the CAS, ALMIS, and
NESSS GLs.
8. The Coast Guard shall reconcile ALMIS, NESSS, and CAS GLs at the detail and
summary levels on a monthly basis.
7.9.4.4 Entity Exchange Revenue
Entity exchange revenue reflects inflows of resources to a Government entity that the entity has
earned by providing goods or services to the public or to another Government entity for a price.
Another term for “exchange revenue” is “earned revenue”—the income resulting from
completing customer orders.
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7.9.4.4.1 Policy
Exchange revenues are inflows that the Coast Guard receives for providing goods and services to
the public or to another Government entity for an agreed-upon price. Exchange revenue
transactions require the Coast Guard to expend resources and provide measurable value in return.
1. The Coast Guard shall recognize entity exchange revenue for each exchange of goods or
services with outside entities in CAS, ALMIS, and NESSS GLs by Treasury Account
Fund Symbol. The values of entity exchange revenue are then reported in the SNC and
the SBR.
2. All values recorded in the CAS, ALMIS, and NESSS GLs shall be supported by proper
documentation, such as RAs or contracts.
3. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner.
4. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates. The packages shall be properly stored for research and
audit purposes.
7.9.4.5 Non-Entity Custodial Revenue
Non-entity custodial revenue consists of amounts that the Coast Guard collects on behalf of the
U.S. Government or other entities. This revenue includes collections arising from the sovereign
and regulatory powers unique to the Federal Government, such as fines, penalties, and
miscellaneous user fees. Congress prohibits the Coast Guard from using non-entity custodial
revenue to pay for current or future liabilities or expenses. Instead, it must be remitted to the
U.S. Treasury’s General Fund, which is used for general Government operations.
7.9.4.5.1 Policy
The Coast Guard is not authorized to use non-entity custodial revenue to incur or offset current
or future expenditures, unless Congress specifically authorizes such use by law.
1. The values for non-entity custodial revenue and related non-entity custodial receivables
and liabilities shall be recorded and maintained in the CAS GL by TAF S based on cash
receipt reports and remittance documentation. These balances are reported on the
Statement of Custodial Activity (SCA).
2. A monthly reconciliation and validation shall be performed using appropriate source
documentation and definitions to support the values of non-entity custodial revenue and
related non-entity custodial receivables and liabilities. The Coast Guard shall prepare
non-entity account reconciliations separately from entity account reconciliations.
3. The sum of non-entity custodial receivables reported in USSGL 131000 (Accounts
Receivable), 134000 (Interest Receivable), 136000 (Penalties and Fines Receivable), and
137000 (Administrative Fees Receivable) less the corresponding Allowances for Loss
(USSGL 131900, 134700, and 136700) equals the Custodial Liability (USSGL 298000)
balance reported on the Balance Sheet.
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4. Reconciliation packages shall be reviewed for accuracy and completeness. The packages
shall contain a report reflecting the values of non-entity custodial revenue and related
receivables and liabilities, any abnormal balances identified, and actions taken to resolve
all discrepancies, along with a letter signed and dated certifying the results of the
reconciliation.
7.9.5 Accounts Receivable Policy
Receivables arise from indebtedness to the Coast Guard for goods and services provided by the
Coast Guard to other Government agencies (OGAs), other entities, and individuals. Receivables
are also generated from fees, leases, fines, penalties, interest, and miscellaneous receivables
relating to overdue travel advances, dishonored checks, and Coast Guard overpayments. The
Coast Guard is authorized by law to collect certain monies from the U.S. public and from
foreign persons and organizations (including nonappropriated fund instrumentalities (NAFIs)
and foreign military sales) for goods and services provided and for various fines, penalties, and
user fees.
7.9.5.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to accounts receivable:
1. 6 CFR 11, “Claims.”
http://www.gpo.gov/fdsys/pkg/CFR-2013-title6-vol1/pdf/CFR-2013-title6-vol1-
part11.pdf
2. 31 CFR 900-904, “Federal Claims Collection Standards.”
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol3/pdf/CFR-2012-title31-vol3-
subtitleB-chapIX.pdf
3. Treasury Financial Manual, Volume I, Part 3, Chapter 7000
https://tfm.fiscal.treasury.gov/v1/p3/c700.html
7.9.5.2 Recognizing, Recording, Monitoring, and Reconciling Accounts
Receivable
1. Accounts receivable shall be recognized when the Coast Guard establishes a claim to
cash or other assets against other entities, based either on legal provisions (such as a
legislative requirement), a payment due date, or goods or services provided. In
accordance with SFFAS No. 1, Accounting for Selected Assets and Liabilities, at the time
a claim is made to cash or other assets and the exact amount of the receivable is
unknown, Coast Guard shall make a reasonable estimate of the amount of the receivable
to be recognized and recorded.
2. The Coast Guard shall bill and record accounts receivable in the GLs and subsidiary
ledger systems when materials are provided, services are rendered, or amounts are owed
but not paid at the time of the transaction.
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3. FINCEN or other applicable unit shall maintain subsidiary ledgers detailing accounts
receivable information, and shall report accounts receivable information for use in Coast
Guard financial statements, footnote disclosures, and other external reporting.
4. All applicable Coast Guard units shall collect contracts, interagency agreements, billings,
signed copies of indebtedness notices, and other appropriate documentation to support
accounts receivable transactions in the accounting systems.
5. All applicable Coast Guard units shall monitor the status of the receivables, including
beginning debt balances, collections, adjustments, current ending balances, and notices of
discontinuance of collection efforts. This information shall be available for monthly
reconciliations and reporting.
6. FINCEN and other applicable units shall record all collections of prior accounts
receivable at summary and detail transaction levels.
7. The Coast Guard shall recognize receivables as delinquent if they have not been paid
after 30 days from the date of the invoice, unless another due date is established by law,
contract provision, or notice of indebtedness.
8. The Coast Guard shall accrue interest when the amount due is not received by the due
date, except when waived as allowed by law. See Subsection 7.9.5.8 (Invoicing and
Billing Policy) for detailed policies relating to interest, penalties, and administrative fees
applicable to delinquent debt. Interest receivable shall be recorded for the amount earned
but not received in the accounting period.
9. The Coast Guard, upon receipt of payment, shall generally apply the amount received
first to outstanding penalty charges, second to administrative charges, third to accrued
interest, and finally to the principal balance (when applicable). See Subsection 7.9.5.8
(Invoicing and Billing Policy) for detailed policies relating to interest, penalties, and
administrative fees applicable to delinquent debt, as well as exceptions to this policy
statement. For example, if debt is legally compromised, partial payment may be applied
to the principal first and interest, penalty, and administrative fees may be written off as an
expense.
10. The Coast Guard shall establish an allowance for loss on accounts receivable,
recognizing that some public collections will not be collected in full. See Subsection
7.9.5.11 (Allowance for Doubtful Accounts (AFDA)).
11. The Coast Guard shall close out a debt when it is determined that further debt collections
are prohibited (e.g., a debtor is released from liability in bankruptcy) or it is decided not
to take any further action to collect the debt because it is not cost-effective to do so. See
Subsection 7.9.5.11 (Allowance for Doubtful Accounts (AFDA)).
12. The Coast Guard shall transfer all public receivables over 120 days delinquent to
Treasury’s Bureau of the Fiscal Service for debt collection action, unless otherwise
provided by law.
13. The Coast Guard shall write off public delinquent debt that has not been collected within
two years of delinquency, unless documented and justified to OMB in consultation with
Treasury. See Subsection 7.9.5.12 (Write-offs).
14. The Coast Guard shall recognize foreign military sales and NAFIs as transactions with
the public, and shall include them in the Treasury Report on Receivables (TROR).
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However, any related delinquent accounts shall not be referred to Treasury’s Debt
Management Office (DMO) for collection assistance. The Coast Guard shall pursue
collection of these receivables using all collection tools allowed by law.
15. FINCEN and other applicable units shall perform monthly reconciliations and validation
at the summary and detail transaction levels between accounts receivable subsidiary
records and the Coast Guard GL accounts receivable balances. The appropriate
collection and receivable personnel shall research and report all identified abnormal
balances to accounts receivable managers.
16. All applicable Coast Guard units shall maintain supporting documentation for the
amounts listed in accounts receivable subsidiary records in order to identify the aging
of the receivables. In addition, they shall maintain reports that detail the groups of
receivables by age (i.e., 0-30 days, 31-60 days, 61-90 days, 91-120 days, and over
120 days).
17. All applicable Coast Guard units shall work to collect any delinquent accounts
receivable, in accordance with due process under the law. As stated in number 7 above, a
debt is considered to be delinquent if it remains unpaid 30 days after the invoice date,
unless another due date has been established by law, contract provision, or notice of
indebtedness.
18. All applicable Coast Guard units shall maintain a separation of records between public
and intragovernmental accounts receivable.
19. All applicable Coast Guard units shall collect data to prepare a consolidated TROR and to
address any variances.
20. All reconciliation packages shall be reviewed and submitted with the appropriate dated
approval signatures. These packages shall be retained for research and audit purposes.
7.9.5.3 Intragovernmental Receivables
Receivables due from DHS components or OGAs are “intragovernmental receivables” and are
reported separately from receivables due from public entities or individuals. Intragovernmental
receivables also include those receivables related to RAs with OGAs by which the Coast Guard
expends assets or incurs liabilities in accordance with its mission. The Coast Guard is
considered the seller of goods and/or services that are provided to OGAs, which are considered
to be buyers. Both buyers and sellers are referred to as “trading partners.”
The Coast Guard recognizes intragovernmental receivables when it establishes a claim to cash or
other assets against OGAs based upon legal provisions or goods/services provided. However,
unlike public receivables, intragovernmental receivables are treated as 100 percent collectible,
and, therefore, the Coast Guard does not use an allowance for doubtful accounts (AFDA) for
receivables between Federal entities.
7.9.5.3.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to intragovernmental receivables:
COMDTINST M7100.3F
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1. Department of the Treasury, Treasury Financial Manual, Volume I, Part 2,
Chapter 4700, Appendix 10, “Intragovernmental Transaction (IGT) Guide”.
http://tfm.fiscal.treasury.gov/v1.html
2. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Chapter 3, Section 3.7, “Intragovernmental Actions,
Transactions, and Reporting”.
http://cfo-policy.dhs.gov/default.aspx
7.9.5.3.2 Policy
1. The Coast Guard, like all U.S. Government departments and agencies, must follow the
“Intragovernmental Transaction (IGT) Guide” promulgated by Treasury. These rules,
along with the overarching Coast Guard policy that follows, assume that trading partners
have valid intragovernmental agreements or orders and that they use the Treasury’s
Intragovernmental Payment and Collection (IPAC) system. However, these business
rules apply regardless of the system used.
2. The Coast Guard must comply with OMB Circular A-136 for the reporting of
intragovernmental transactions.
3. The Coast Guard shall identify records of all intragovernmental transactions in its GLs,
reconcile them with trading partners, and report them to Treasury. The GL balances
resulting from these transactions shall be presented both in the Coast Guard’s financial
statements and to Treasury in compliance with the applicable laws, Treasury guidance,
and OMB management controls.
4. Intragovernmental receivables shall be reported separately from receivables due from
public entities or individuals.
5. The Coast Guard shall recognize intragovernmental receivables when it establishes a
claim to cash or other assets against OGAs based upon legal provisions or goods/services
provided.
6. The Coast Guard, as the selling or performing entity, shall ensure that the obligations and
incurred expenditures for completed performance are promptly recorded, charged, and
collected from the buying or ordering entity.
7. The Coast Guard shall establish a process with all major trading partners to settle and
report intragovernmental performance, including reconciling receivables, payables, any
advances, revenue, expenses, related accruals, and agreement closeout.
8. The Coast Guard shall reconcile intragovernmental receivables with receiving agencies
on an ongoing basis, at least quarterly, in coordination with DHS and in accordance with
Treasury guidance.
9. Data elements shall be included in all intragovernmental agreements and billing
documents. U.S. Treasury Central Accounting Reporting System (CARS) introduced
new requirements for all Government agencies’ financial data elements, including
classification of activities that is reinforced using two key components: an improved
Component Treasury Accounting Symbol (TAS) format and a newly introduced Business
Event Type Code (BETC). These financial data elements requirements and required
funding document are to be used for all intra/interagency agreements, from both the
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buyer and seller perspective, to meet CARS implementation requirements for intra-
governmental transactions. These identifiers, and other required accounting data
elements, include, at a minimum, the Agency Location Code (ALC) and Business Partner
Network (BPN) Number, specific accounting line data, effective dates, trading partner
codes, TAFSs, agreement numbers, and any document reference numbers to allow for
efficient processing, billing, and collection of intragovernmental receivables. Documents
shall also include points of contact with Federal trading partners to facilitate identifying
and reconciling intragovernmental transactions.
10. The Coast Guard shall process all intragovernmental receivables through the U.S.
Treasury Department’s IPAC system whenever possible.
11. For any disputed exchange transactions, the Coast Guard, as the seller, shall provide
documentation supporting the bill within 30 days after the dispute is discovered.
12. In the event that a dispute resolution cannot be reached at the accounting center with the
trading partner, the following escalation actions shall be taken:
a. Within 30 days, a dispute resolution package shall be compiled in accordance with
the TFM “Intragovernmental Transaction (IGT) Guide”. These rules may be found
on Treasury’s Bureau of the Fiscal Service website at:
https://www.fiscal.treasury.gov/fsservices/gov/acctg/ipac/Chapter4700Appendix10Bu
y-Sell.pdf;
b. The dispute resolution package shall be forwarded to Commandant (CG-831)
(Reimbursable Program Manager), with copies to the reimbursable program
manager(s) involved in the service being provided to the other agency;
c. If resolution is not reached at the program manager level within 30 days, the dispute
resolution package shall be forwarded to Commandant (CG-8), with a copy to the
trading partner’s CFO;
d. If resolution is not reached at the Coast Guard CFO level within 30 days, the dispute
resolution package shall be forwarded to the DHS CFO for assistance; and
e. If resolution is not reached at the DHS CFO level within 30 days, the dispute
resolution package shall be forwarded to the Assistant Commissioner, Bureau of the
Fiscal Service - Governmentwide Accounting (GWA), for resolution.
13. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner.
14. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates. The packages shall be properly stored.
7.9.5.4 Revolving Funds
Revolving funds are authorized by law to finance a continuing cycle of business-type operations.
The receipts are credited directly to the revolving fund as offsetting collections and are available
for expenditure without further action by Congress. Therefore, revolving funds do not rely upon
annual appropriations from Congress.
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The revenue earned by revolving funds is used to procure additional goods and services, which
are, in turn, purchased by buyers. Therefore, funding does not come directly from an
appropriation, but indirectly through the buyers. There are two major revolving funds at the
Coast Guard:
1. Supply Fund (SF) – provides financing for a continuous cycle of procurement and sale of
clothing, food, fuel, and general stores items, electronic and buoy items; and
2. Yard Fund (which includes the Industrial Fund) – provides services such as construction,
repair, and alteration of vessels, and fabrication of buoys and other special items for the
Coast Guard and OGAs. These buyers reimburse the Yard for these services from their
respective appropriations. The charges to the buyer by the Yard are based upon recovery
of the total industrial cost of performing the work.
The SF sets prices based on the cost of goods plus surcharge amounts to compensate for loss
and/or obsolescence.
The Yard Fund sets prices for goods or services that include all direct (e.g., raw materials and
labor) and indirect (e.g., employee benefits and overhead) costs and that are planned to result in a
“break-even” financial basis.
This Section specifically addresses policies related to revenue and receivables of revolving
funds.
7.9.5.4.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to revolving funds:
1. 14 USC 939, “Accounting for industrial work.”
http://uscode.house.gov/
2. 14 USC 941, Coast Guard Supply Fund.
http://uscode.house.gov/
3. 31 USC 9701, “Fees and charges for Government services and things of value”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleVI-chap97-sec9701.pdf
4. Department of the Treasury, Treasury Financial Manual, Volume I, Part 2, Chapter
1500, Subsection 1520.45, “Revolving Fund Accounts”.
http://tfm.fiscal.treasury.gov/v1.html
5. Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19 (series).
http://www.dcms.uscg.mil/directives
7.9.5.4.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to revolving funds:
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7.9.5.4.2.1 Office of Logistics (CG-44)
Commandant (CG-44):
1. Establishes procedures related to logistics management.
2. Facilitates the procurement of goods or services using the Military Standard
Requisitioning and Issue Procedure (MILSTRIP) process.
3. Maintains logistics interface with OGAs.
7.9.5.4.2.2 Funds Control Division (CG-831)
Commandant (CG-831):
1. Performs the program manager function for the SF.
2. Establishes procedures for SF units.
3. Facilitates apportionment of SFs with OMB and FINCEN.
4. Facilitates reporting of SF transactions.
7.9.5.4.3 Policy
The Coast Guard establishes revolving fund accounts authorized by specific provisions of law to
support business-type operations related to the procurement and sale of goods and services with
other Coast Guard units, OGAs, and the public.
1. Revolving funds managers shall prepare annual budgets to establish the appropriate rates
to charge buyers.
2. Revolving funds managers shall prepare monthly inventory and accounting reports.
3. Reconciliations shall be submitted to the appropriate program element managers each
month, whether or not there is activity in the revolving fund for that month.
4. Coast Guard shall not incur costs from the SF or the Yard Fund until it receives an RA,
Military Interdepartmental Procurement Request (MIPR), or purchase request (PR)
detailing the goods to be purchased and/or the services to be rendered, in accordance with
Federal, DHS, and Coast Guard policies, rules, and regulations, from the entity
requesting the SF or Yard Fund goods or services. (This does not apply to cash or credit
sales of such things as uniforms and food to individual Coast Guard employees.)
5. The Supply or Yard Fund shall provide the requested goods or services upon receipt of an
RA, MIPR, or PR signed by authorized personnel from the requesting entity and the
Coast Guard.
6. To replenish depleted supply stocks, a MILSTRIP message shall be prepared to initiate
the reorder process with either the Federal Supply System (FSS) or Department of
Defense’s (DOD’s) EMALL. Additional paperwork supporting requisitions shall be
prepared for depot-level reconditioned items, items without national stock numbers
(NSNs), or items not available through FSS or EMALL.
7. AMMIS, NESSS, Configuration Management plus (CMPlus), or the Fleet Logistics
System (FLS) shall be used to prepare and document the MILSTRIP order message with
FSS or EMALL.
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8. All goods received shall be inspected, and the final acceptance shall be documented on
receiving reports.
9. Units with SF accounts are responsible for the establishment, review, revision, and
publication of standard sales prices for SF items stocked within their particular segment
of the Coast Guard Supply System.
10. SF managers shall review standard sales prices a minimum of once per year.
11. All SF units with a surcharge shall review all Operations & Support (O&S) annually to
ensure that the surcharge is sufficient to cover operation costs.
12. All SF units shall submit analyses of surcharge rates and recommendations for changes to
Commandant (CG-831) no later than 31 July of each year.
13. All SF units shall submit Capital Authorization (CA) requests/recommendations for
changes to Commandant (CG-831) no later than 31 July of each year.
14. Uncollected OGA and commercial accounts receivable shall be reported to FINCEN and
Treasury, as required to support a robust collection strategy.
15. Supply units with surcharge accounts shall use those accounts prior to requesting any
appropriated funds.
16. To ensure proper segregation of duties, separate individuals shall be designated in the
supply management, procurement, funds disbursement, funds receivable, and revenue
processes.
7.9.5.5 User Fees
The Coast Guard collects various user fees from the public for services or things of value
provided by the Coast Guard; the most common of which include fees for vessel inspections and
documentation, as well as merchant mariner licensing and documentation.
Amounts collected shall be deposited in the general fund of the U.S. Treasury as proprietary
receipts. As required by FASAB, the Coast Guard does not report these collections as revenue
on the financial statements; however, user fees do impact Coast Guard financial accounting
systems through the accounts receivable process.
This Section establishes the policies for user fee collections received by Coast Guard Units that
collect fees, including Regional Examination Centers, the National Vessel Documentation
Center, and Overseas Vessel Inspection Units. Guidelines for user fees collection audits are set
forth in User Fee Collection Policies and Procedures, COMDINST M7042.1 (series).
7.9.5.5.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to user fees:
1. 14 USC 946, “User fees”.
http://uscode.house.gov/
2. 31 USC 3302, “Custodians of money”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapI-sec3302.pdf
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3. 31 USC 9701, “Fees and charges for Government services and things of value”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleVI-chap97-sec9701.pdf
4. 46 USC 2110, “Fees”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partA-chap21-sec2110.pdf
5. 46 USC 3302, “Exemptions”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partB-chap33-sec3302.pdf
6. 46 USC 3317, “Fees”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partB-chap33-sec3317.pdf
7. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual
(TFM), Volume 1, Part 5, “Deposit Regulations”.
http://tfm.fiscal.treasury.gov/
8. Title 46 User Fee Collection Policies and Procedures, COMDTINST M7042.1 (series).
http://www.dcms.uscg.mil/directives
7.9.5.5.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to user fees:
7.9.5.5.2.1 Assistant Commandant for Resources (CG-8)
1. Discusses the results of the biennial review of user fees and any resultant proposals in the
Chief Financial Officers Annual Report required by the Chief Financial Officers Act of
1990 (CFO Act), as outlined in OMB Circular A-25.
2. Notifies Congress where legislative changes are required to modify user fees or charges.
3. Provides accurate and complete financial information related to user fees and charges.
4. Enforces policies and procedures regarding biennial reviews, including final reviews of
unit prices, and conducts random audits.
5. Maintains records of all information used in the establishment of user fees or charges
presented to OMB.
7.9.5.5.2.2 Office of General Law (CG-0944)
1. Advises Commandant (CG-8) and Coast Guard component officials on matters regarding
the interpretation of user fee laws.
2. Works with programs to draft language for new laws and regulations or changes to laws
and regulations.
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7.9.5.5.2.3 Director of Operations Resource Management (CG-DCO-8)
1. Oversees the development and management of Coast Guard user fees for DCO programs.
2. Provides guidance to FINCEN, Officers in Charge of Marine Inspection, and vessel
owners, including any waivers and exemptions of vessel inspection user fees.
3. Reviews the user charges for DCO programs biennially to include: (1) assurance that full
costs of providing services are known and that appropriate actions are taken by DCO
program offices to adjust fees as needed; and (2) a review of all other DCO programs to
determine whether fees should be assessed for Government services or the user of
Government goods or services.
4. Reviews and reports the results of the biennial review of user fees and any resultant
proposals to Commandant (CG-8) for inclusion in the Chief Financial Officers Annual
Report.
5. Maintains adequate records of the information used to establish user fees or charges, and
provides them upon request to OMB for the evaluation of the schedules; and provides
data on user fees and charges in accordance with the requirements in OMB Circular
A-11.
6. Institutes user fee charges through the promulgation of regulations or submits revisions to
legislation as appropriate.
7.9.5.5.2.4 Finance Center (FINCEN)
1. Manages the user fee collection process.
2. Serves as the primary contact for responding to questions related to the collection process
audits conducted by FINCEN.
3. Maintains Title 46 User Fee Collection Policies and Procedures, COMDTINST M7042.1
(series), audit checklists, cash register operations, credit card processing equipment, and
check scanners.
4. Procures all equipment that is used in the user fee collection process. Updates
maintenance agreements, and directs programming changes to the Coast Guard’s
financial systems.
5. Ensures that all authorized user fees or charges are properly applied and collected, and
that the requirements of OMB Circular A-123 and the appropriate audit standards are
applied to collection.
7.9.5.5.3 Policy
The Coast Guard is required by public law and Federal regulations to charge and collect user fees
for various services provided to specific customers for special benefits beyond those received by
the general public. The Coast Guard’s imposition of user fees is subject to periodic review to
determine if legislative changes are needed.
1. The Coast Guard shall impose a user fee against each identifiable recipient for special
benefits derived from Coast Guard activities beyond those received by the general public.
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2. The Coast Guard user fees shall recover the full cost of providing Government goods and
services, using set rates when the Government is acting in its capacity as sovereign.
3. User fees charged by the Coast Guard shall be fair and based on the costs to the
Government, the value of the service or thing to the recipient, public policy or interest
served, and other relevant facts.
4. The Coast Guard may recover from the person liable for the fee or charge the costs of
collecting delinquent payments of the fee or charge and enforcement costs associated
with delinquent payments of the fees and charges. The term “costs of collecting a fee or
charge” includes the reasonable administrative, accounting, personnel, contract,
equipment, supply, training, and travel expenses of calculating, assessing, collecting,
enforcing, reviewing, adjusting, and reporting on a fee or charge.
5. The Coast Guard shall account for the agency’s costs of collecting a fee or charge as a
reimbursable expense, subject to the availability of appropriations, and those costs shall
be credited to the account from which expended.
6. The Coast Guard shall collect user fees in advance of, or simultaneously with, the
rendering of services unless appropriations and authority are provided in advance to
allow reimbursable services.
7. Whenever possible, user fee charges shall be set as rates rather than fixed dollar amounts
in order to adjust for changes in costs to the Government or changes in market prices of
the good or service provided.
8. The Coast Guard shall institute user fees through the promulgation of regulations and in
accordance with 14 USC 946, 31 USC 9701, 46 USC 2110, 46 USC 3317, and OMB
Circular A-25 (Revised).
9. Inspection user fees shall be exempted or waived by the Coast Guard as outlined in
46 CFR 2.10-5, 46 CFR 2.10-10, 46 USC 2110, OMB Circular A-25, or where otherwise
delineated in law.
10. No charge should be made for a service when the identification of the specific beneficiary
is obscure and the service can be considered primarily as broadly benefiting the general
public.
11. Unless a statute provides otherwise, user fee collections will be credited to the general
fund of the Treasury as miscellaneous receipts, as required by 31 USC 3302. For certain
user fees, e.g., vessel inspections, Coast Guard follows 14 USC 946 and 46 USC 2110,
which requires user fee collections to be deposited in the general fund of the Treasury as
proprietary receipts or as offsetting receipts (if using 46 USC 2110) of the department in
which the Coast Guard is operating and ascribed to Coast Guard activities.
12. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported, in a timely manner.
13. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates and properly stored.
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14. Programs and Units collecting fees are responsible for ensuring amounts deposited and
posted match those sent for deposit and that the amounts are correct for services
provided.
15. Programs and Units collecting fees are responsible for following all appropriate DHS,
CG, Treasury, GAO, OMB laws, regulations and policies for handling cash.
7.9.5.6 Fines and Penalties
Civil fine and penalty action (including the NOV program) is one tool to achieve compliance
with laws and regulations the Coast Guard is empowered to enforce, including marine
environment protection, port safety and security, waterways management, navigation rules,
bridge administration, commercial vessel safety, and recreational boating safety. Fines and
penalties associated with the OSLTF will be addressed in Subsection 7.9.5.7.3.1 (OSLTF Fines
and Penalties).
In some instances, both immediate corrective actions of responsible parties followed by the
initiation of civil penalty cases should be sought. The monetary penalty assessed should be
meaningful, timely, and consistent with the facts of the case and governing statute, and
supportive of field enforcement efforts. It is imperative that penalties exceed the economic
benefits of noncompliance. For this to occur, enforcement activities must be processed in a
timely manner.
Civil fines and penalties collected shall be deposited in the general fund of the U.S. Treasury as
proprietary receipts except as otherwise provided by law. As required by FASAB, the Coast
Guard does not report these collections as revenue on the financial statements; however, user
fees do impact Coast Guard financial accounting systems through the accounts receivable
process.
The financial link between the Coast Guard’s MISLE and CAS ensures proper tracking and
accounting of enforcement actions. To ensure the effectiveness of the civil fines and penalties
program and ensure due process and proper financial management, the Coast Guard must
properly manage civil fines and penalty activities.
7.9.5.6.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, authorities to collect civil fines
and penalties are covered under various titles of the United States Code (USC) and Code of
Federal Regulations (CFR). These specific authorities are outlined in the various enforcement
instructions and guides, including:
1. Civil Penalty Procedures and Administration, COMDTINST 16200.3 (series).
http://www.dcms.uscg.mil/directives
2. Notice of Violation User's Guide, COMDTINST M5582.1 (series).
http://www.dcms.uscg.mil/directives
3. Coast Guard Hearing Officer Procedures, COMDTINST 16200.5 (series).
http://www.dcms.uscg.mil/directives
4. United States Coast Guard Civil Penalty Case Guide.
http://www.dcms.uscg.mil/directives
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5. Finance Center Standard Operating Procedures (SOP).
http://www.dcms.uscg.mil/directives
7.9.5.6.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to user fees:
7.9.5.6.2.1 Office of Investigations and Casualty Analysis (CG-545)
1. Provides centralized oversight, management, and control of MISLE enforcement
activities, from generation to referral to hearing officers, to ensure timely processing of
casework.
2. Reconciles enforcement activity collections and accounts receivable information between
MISLE and the Coast Guard financial system.
7.9.5.6.2.2 Office of General Law (CG-0944)
Commandant (CG-0944) provides centralized oversight, management, and control of the Coast
Guard civil fines and penalty process, from referral to hearing officers through collection, to
ensure timely processing of casework.
7.9.5.6.2.3 Finance Center (FINCEN)
1. Manages the civil fines and penalties collection process.
2. Serves as the primary contact for responding to questions from the field related to the
civil fines and penalties collection process.
3. Maintains instructions and audit checklists.
4. Ensures that all authorized civil fines and penalties charges are properly applied,
collected, and that the requirement of OMB Circular A-123 and the appropriate audit
standards are applied to collection.
5. Supports Commandant (CG-INV) reconciliation of enforcement activity collections and
accounts receivable information between MISLE and the Coast Guard financial system.
7.9.5.6.2.4 Area and District Commanders
Ensure that subordinate unit commanders process civil fine and penalty cases in a timely manner.
7.9.5.6.2.5 Commanding Officers
Ensure enforcement activities and their associated paperwork are properly tracked, completed,
processed, and forwarded for further due process action in a timely manner.
7.9.5.6.2.6 Hearing Officers (LSC-West)
Ensure enforcement activities are properly completed and processed in a timely manner.
COMDTINST M7100.3F
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7.9.5.6.3 Policy
1. Financial data shall be shared and consistent between MISLE and the Coast Guard’s
financial system to ensure proper tracking and accounting of enforcement actions.
2. Units or any Coast Guard individual shall not accept payment for NOVs; nor shall partial
payments be allowed. NOV payment guidance is provided in Notice of Violation User's
Guide, COMDTINST M5582.1 (series).
3. Payment received for civil fines and penalties will be credited, and the activity will be
closed once the full amount is credited.
4. Standard collections policy applies if the party fails to pay the civil fine or penalty, or if
the case is referred to the Department of Justice (DOJ) for criminal proceedings.
7.9.5.7 Oil Pollution Act
The Clean Water Act of 1972 established the Coast Guard’s responsibility for pollution response,
and Section 311(k) of that Act established a trust fund for oil and hazardous substance pollution
cleanup. To the extent cost recovery and penalty revenue were not sufficient, the 311(k) Fund
was dependent on Congressional Appropriations to maintain its viability. The Oil Pollution Act
of 1990 (OPA) authorized the OSLTF. The OSLTF received the assets and assumed the
liabilities of a combination of predecessor funds: the 311(k) Fund, Offshore Oil Pollution Fund,
Deepwater Port Fund, and Trans-Alaska Pipeline Liability Fund. More important, it was funded
through tax revenue on the oil industry. Congress established in OPA several sources of revenue
for the OSLTF:
1. A barrel tax on domestic or imported crude oil and imported refined oil products;
2. Interest earned on the balance of the Fund;
3. Fines and penalties for violations of OPA and various Clean Water Act provisions; and
4. Cost recoveries from parties responsible for oil spills where the OSLTF is spent, whether
for response costs or payment of claims as authorized by OPA.
The latter two revenue streams originate in different parts of the Coast Guard, but both flow
through Coast Guard financial systems and are recorded on the Coast Guard GL. These assets
are recorded and processed in accordance with standard Accounts Receivable policy; however,
receipts are applied to the Treasury Account Symbol (TAFS) 70X8185.4 in lieu of appropriation
codes.
7.9.5.7.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to cost recoveries:
1. 33 USC 2701 et seq., “Oil Pollution Liability and Compensation”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title33/pdf/USCODE-2011-title33-
chap40-subchapI.pdf
2. 26 USC 9509, “Oil Spill Liability Trust Fund”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-
subtitleI-chap98-subchapA.pdf
COMDTINST M7100.3F
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7.9.5.7.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to OSLTF receivables:
7.9.5.7.2.1 National Pollution Funds Center (NPFC)
1. Certifies oil-carrying vessels have the financial ability to pay in the case of an oil spill.
2. Provides funding for National Contingency Plan response by agencies including, but not
limited to, the Coast Guard and the Environmental Protection Agency (EPA).
3. Takes action to recover costs from responsible parties.
4. Reconciles financial expenditures associated with OSLTF accounts receivable to Coast
Guard core financial system records.
7.9.5.7.2.2 Finance Center (FINCEN)
Processes financial transactions related to the OSLTF fines, penalties, and cost recoveries.
7.9.5.7.3 Policy
7.9.5.7.3.1 OSLTF Fines and Penalties
1. Civil and criminal fines and penalties for violations of OPA and various Clean Water Act
provisions are initiated by Coast Guard field units, and shall be submitted through the
MISLE system.
2. OSLTF fines and penalties shall be recognized and recorded as an account receivable due
to the OSLTF, and managed by FINCEN in accordance with FASAB and other guidance
and applicable laws.
7.9.5.7.3.2 OSLTF Cost Recovery
1. When the responsible party does not respond to an oil spill or pay claims to injured
parties, the OSLTF is available to fund the Federal On-Scene Coordinator (FOSC)
response actions and to adjudicate and pay claims.
2. The Director of NPFC is authorized to make OSLTF funding available as provided by
OPA, and to pursue cost recovery actions.
3. The Director of NPFC shall attempt to identify the responsible party/parties in
accordance with NPFC procedures. If the responsible parties can be identified, they are
jointly and severally liable for the ensuing OSLTF and Federal response costs.
4. The Director of NPFC can compromise resulting debt or alternately refer the debt to the
DOJ or Treasury for further collection efforts in accordance with applicable law and
delegations of authority.
5. OSLTF accounts receivable are classified as public exchange-based receivables.
COMDTINST M7100.3F
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7.9.5.8 Invoicing and Billing Policy
A bill is a statement of demand for money due from individuals, commercial vendors, and
OGAs, including other Coast Guard accounting offices and other appropriations. The Coast
Guard bills customers for a number of goods and services (e.g., vessel inspections, oil spill
cleanup/damage claims, aircraft and boat repairs and parts, repair charges for damage to buoys,
Federal Emergency Management Agency (FEMA) reimbursements, civil fines, penalties).
The ALC, Coast Guard Academy (Academy), FINCEN, LSC-West, NPFC, PPC, and
SFLC/Yard all manage parts of the Coast Guard’s billing transactions in accordance with DHS
policy guidance and applicable Federal laws and regulations, enabling the Coast Guard to carry
out statutory mandates such as the OPA and to better protect the Federal Government’s assets
and minimize losses.
7.9.5.8.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authorities apply
specifically to invoicing and billing:
1. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
42 USC 9601 et seq.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title42/pdf/USCODE-2011-title42-
chap103.pdf
2. Oil Pollution Act. 33 USC 40. PL 101 380.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title33/pdf/USCODE-2011-title33-
chap40-subchapI.pdf
3. 31 USC 3301 et seq., “Depositing, Keeping, and Paying Money”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33.pdf
4. 31 USC 3717, “Interest and Penalty on Claims”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap37-subchapII-sec3717.pdf
5. 31 CFR Subtitle B Chapter I, “Monetary Offices, Department of the Treasury”.
http://www.gpo.gov/fdsys/pkg/CFR-2011-title31-vol1/pdf/CFR-2011-title31-vol1-
subtitleB-chapI.pdf
6. Title 46 User Fee Collection Policies and Procedures, COMDTINST M7042.1 (series).
http://www.dcms.uscg.mil/directives
7.9.5.8.2 Policy
1. The Coast Guard shall be responsible for the preparation of invoices to individuals,
OGAs, and organizations outside the U.S. Government. In performing this requirement,
the Coast Guard shall adhere to the following: The Coast Guard shall generate an invoice
or equivalent billing document for actual and estimated amounts, and it shall be
mailed/transmitted within five business days after the day that the goods have been
delivered, the services have been rendered, or the payment is otherwise due. Collection
COMDTINST M7100.3F
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centers may prepare and mail an invoice later than five business days, if it is cost-
effective to do so.
2. The Coast Guard shall include a payment due date on the invoice, and this date shall not
be more than 30 days from the date of the invoice, unless otherwise provided by law.
3. If the value of the goods or services cannot be specifically determined, the Coast Guard
shall prepare a partial invoice equal to at least 75 percent of the estimated value, and shall
mail the partial invoice within five business days after the day that the goods have been
delivered, the services have been rendered, or the payment is otherwise due. The Coast
Guard shall identify this invoice as a partial invoice, and shall note that a final invoice
will be mailed/transmitted within 30 days after the submission of the partial invoice.
4. The bill/invoice shall include other information, such as:
a. Payment terms, lockbox addresses, and instructions that payment shall be made to the
Coast Guard, not to a Coast Guard official.
b. In accordance with TFM instructions, a notification of additional charges that shall be
assessed on payments received after 30 days from the due date, including:
The payment due date is 30 days from the date of this bill. Pursuant to 31 USC 3717,
additional charges will be assessed on payments received after the due date,
including:
1) Interest at the prevailing rate established by the Treasury Department, from the
date the debt is owed;
2) Administrative charges; and
3) Penalties shall not exceed the prevailing percentage rate per year established by
the Treasury Department on any portion of the debt delinquent for more than
90 days, accrued from the date the debt became delinquent.
c. The minimum annual rate of interest to be charged, which is calculated by Treasury
as an average of the current value of funds to Treasury and is published each year in
the Federal Register and also in the TFM bulletin.
d. A statement that interest shall only be assessed on principal (not on interest,
administrative charges, and penalties), except in those cases where a debtor has
defaulted on a previous repayment agreement, or a judgment has been obtained
including such interest.
5. A higher rate of interest shall be assessed if it is determined that a higher rate is necessary
to protect the interest of the U.S. Government. The assessed rate will remain fixed for
the duration of the indebtedness, unless a different rate is prescribed in an agreed-to
repayment schedule, or a rate change is otherwise provided by law.
6. Waivers of interest, administrative charges, or penalties shall be in accordance with all
DHS and Coast Guard policy. Said waivers require the approval of a supervisor and the
Receivable Division chief, and shall include supporting documentation justifying the
reason for the waiver.
7. The Coast Guard shall generate a separate monthly bill for each debtor.
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8. The Coast Guard shall generate an identifiable and traceable numbering system for all
bills presented for collection to allow for efficient research and reporting of uncollected
and collected bills.
9. The Coast Guard shall keep records at the transaction level for all bills issued. These
records shall include the bill date, the bill number, the name of the debtor, the amount of
the bill, and a description sufficient to allow for efficient retrieval for audit/research and
reporting purposes.
10. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner.
11. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates. The packages shall be properly stored.
7.9.5.9 Unbilled Receivables
This category primarily applies to NPFC, but it also includes FINCEN unbilled receivables under
the Merchant Vessel Inspection (MVI) program and the reimbursable program.
1. The revenue standard, SFFAS No. 7, Accounting for Revenue and Other Financing
Sources and Concepts for Reconciling Budgetary and Financial Accounting, requires that
revenue be recorded when it is earned versus collected. Therefore, unbilled accounts
receivable shall be accrued in the accounting period when claims to cash arise.
2. The accounts receivable manager shall prepare documentation to support recording an
unbilled receivable. All unbilled receivables shall be tracked, aged (but reflected as “Not
Delinquent”), and reported to FINCEN in accordance with their guidance.
7.9.5.10 Collection Process
In order to assure maximum collection effectiveness, the accounts receivable manager shall
pursue vigorous follow-up action. This action will include:
1. Adhering to Coast Guard Claims and Litigation Manual, COMDTINST M5890.9
(series);
2. Collecting all non-Federal debts in a timely manner;
3. Aging of billed receivables to facilitate concentration of collection efforts;
4. Referring all non-Federal debts more than 120 days delinquent to Treasury’s Bureau of
the Fiscal Service for offset and cross-servicing, according to the 1996 Debt Collection
Improvement Act and related Bureau of the Fiscal Service guidance. Transmit all
information to the Treasury for debts referred, following the latest regulations in
Treasury Financial Manual and supplements. Copies of referrals shall be sent to
FINCEN;
5. Referring all Federal debts more than 120 days old to FINCEN. FINCEN shall serve as
the Coast Guard central point of contact for resolving amounts owed the Coast Guard
from other Federal agencies. Exception: Cases involving amounts owed the OSLTF will
be resolved by NPFC;
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6. Reviewing delinquent debts continually to identify those items that should be written off
and closed out;
7. Reconciling subsidiary receivable records at least quarterly with the related GL;
8. Processing remittances in accordance with applicable regulations. Timely entry shall be
made to accounts receivable; and
9. For collections involving administrative wage garnishment (AWG), adherence to the
procedure contained in 31 CFR 285 and the DHS Component Requirements Guide for
Financial Reporting.
7.9.5.11 Allowance for Doubtful Accounts
The AFDA is an estimation used to recognize that some accounts receivable transactions will not
be collected. It is implemented when the Bad Debts Expense is recorded in the GL before
knowing the specific accounts receivable deemed uncollectible. The AFDA is calculated using
the following methods:
1. Individual account analysis;
2. Group analysis;
3. Statistical estimation by modeling; and
4. Aging schedule.
This Section presents overarching financial policy and establishes the Coast Guard’s
methodology for calculating the AFDA for Public Receivables in compliance with all applicable
regulations. This allows Commandant (CG-8) to assert that the Coast Guard’s AFDA is properly
recorded and presented in the financial statements.
7.9.5.11.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2, the following authority applies
specifically to the AFDA:
31 CFR 903, “Standards for Suspending or Terminating Collection Activity”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol3/pdf/CFR-2012-title31-vol3-part903.pdf
7.9.5.11.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to the AFDA:
7.9.5.11.2.1 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Monitors the debt collection process and ensures that:
a. Debt collection processes are implemented and enforced at FINCEN and other
accounts receivable offices;
b. Delinquent balances are transferred to Treasury, or are in collection; and
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c. Appropriate receivables are being written off.
2. Reviews the methodology and calculation of the current estimate of the AFDA, and
ensures that the correct adjustments are made to reconcile the AFDA to the current
estimate.
3. Assesses Coast Guard business processes and sub-processes, identifies deficiencies/gaps,
recommends corrective actions, and evaluates progress made toward resolving issues.
4. Monitors and evaluates the effectiveness of controls in place to ensure the propriety of
the process for identifying and recognizing receivables.
7.9.5.11.2.2 Finance Center (FINCEN)
FINCEN personnel:
1. Coordinate with Coast Guard components to accurately record the estimated allowance
amount in conjunction with accounts receivable through CAS.
2. Ensure that adjusting entries are entered into accounts receivable and the AFDA in CAS.
7.9.5.11.2.3 Accounts Receivable Managers
Accounts receivable managers at ALC, FINCEN, LSC-West, NPFC, PPC, and SFLC/Yard, as
applicable:
1. Reconcile subsidiary receivable records on a quarterly basis with the related GL and
subsidiary ledger accounts.
2. Establish the allowance account for loss on accounts receivable that have been
determined uncollectible.
3. Retain documentation supporting the quarterly reviews for future audit and financial
review purposes, as prescribed by law.
4. Review and evaluate the accounts receivable accounts on a quarterly basis.
5. Coordinate with FINCEN to facilitate the internal controls associated with AFDA tasks.
6. Review with FINCEN the accounts receivable quarterly material changes (defined in unit
SOPs) that impact AFDA balances.
7. Ensure that all material changes are taken into consideration to account for adjustments in
the AFDA estimate.
Note: ALC and SFLC/Yard follow the Coast Guard’s overarching accounts receivable policies
and procedures, but because their respective public accounts receivable is immaterial to the
Coast Guard’s total public accounts receivable (generally less than 0.1 percent), they do not
actively participate in the AFDA annual calculation and quarterly reviews. The materiality of
these accounts must be reconsidered at least annually to ensure that ALC and SFLC are not
required to record an AFDA balance in order to properly report their respective net receivable
balances.
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7.9.5.11.3 Policy
AFDA balances are recorded and maintained in the CAS, NESSS, and ALMIS GL systems.
These GLs and subsidiary ledger modules are used to prepare monthly AFDA reports. Coast
Guard policy is to conduct annual and quarterly reviews of public receivables.
In accordance with SFFAS No. 1, Accounting for Selected Assets and Liabilities, the Coast
Guard shall:
1. Recognize losses on receivables when it is more likely than not that the receivables will
not be collected in full;
2. Recognize an allowance for estimated uncollectible amounts to reduce the gross amount
of receivables to its net realizable value. The allowance for uncollectible amounts shall
be re-estimated on each annual financial reporting date, and whenever information
indicates that the latest estimate is no longer current;
3. Measure losses due to uncollectible amounts through a systematic methodology. The
systematic methodology shall be based on an analysis of both individual accounts and a
group of accounts as a whole:
a. Individual account analysis – Accounts that represent significant amounts shall be
individually analyzed to determine the loss allowance. Loss estimation for individual
accounts shall be based on:
1) The debtor’s ability to pay;
2) The debtor’s payment record and willingness to pay; and
3) The probable recovery of amounts from secondary sources, including liens,
garnishments, cross collections, and other applicable collection tools.
b. Group analysis – To determine the loss allowance on a group basis, receivables shall
be separated into groups of homogeneous accounts with similar risk characteristics.
The groups shall reflect the operating environment. For example, accounts receivable
can be grouped by:
1) Debtor category (e.g., business firms, state and local governments, individuals);
2) Reason that gave rise to the receivables (e.g., tax delinquencies, erroneous benefit
payments, trade accounts based on goods and services sold, transfers of defaulted
loans to accounts receivable); or
3) Geographic region (e.g., foreign countries, domestic regions).
Within a group, receivables are further stratified by risk characteristics. Examples of
risk factors include economic stability, payment history, alternative repayment
sources, and aging of the receivables.
4. Disclose the major categories of receivables by amount and type, the methodology used
to estimate the allowance for uncollectible amounts, and the total allowance;
5. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner; and
6. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates. The packages shall be properly stored.
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7.9.5.12 Write-offs
The Coast Guard has the affirmative responsibility to attempt to collect delinquent debts owed
the Federal Government. At some point in the collection process, however, it may become
evident that a debt is “uncollectible.” In such cases, it may be appropriate to terminate collection
action and/or write off the debt.
Write-off of a debt is an accounting action that results in removing the non-Federal (public)
receivable from the accounting records and subsequently reporting on the Coast Guard’s
financial and management reports that the receivable has no value. Write-offs are classified and
reported in two separate and distinct categories: currently not collectible (CNC) and closed-out.
If it is determined that cost-effective collection efforts will continue at a later date, the debt will
be classified as CNC. If it is determined that any additional or future collection attempts would
be unsuccessful, the debt will be classified as closed-out.
This policy assumes that all appropriate collection tools (e.g., demand letters, offsets,
garnishment, cross-servicing, referrals to Treasury) have been properly attempted in accordance
with laws, regulations, and applicable guidance prior to initiating write-off.
7.9.5.12.1 Authorities
In addition to the general authorities listed in Subsection 7.9.2 the following authorities apply
specifically to write-offs:
1. 26 CFR 1.6050P-1, “Information reporting for discharges of indebtedness by certain
entities”.
http://www.gpo.gov/fdsys/pkg/CFR-2011-title26-vol13/pdf/CFR-2011-title26-vol13-
chapI.pdf
2. Office of Management and Budget, Memorandum M-04-10, “Debt Collection
Improvement Act Requirements”.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
3. Internal Revenue Service, “Instructions for Forms 1099-A and 1099-C”.
http://www.irs.gov/instructions/i1099ac/index.html
7.9.5.12.2 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to write-offs:
7.9.5.12.2.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) certifies that all receivables are properly recorded and recognized in
accordance with Federal guidance, and performs the following to facilitate the certification
process:
1. Establishes and updates policies, procedures, and internal controls required to record and
recognize receivables.
2. Monitors internal control effectiveness and compliance with policies and procedures.
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3. Ensures financial information is in compliance with applicable Federal laws, regulations,
accounting standards, and policies.
4. Reviews issues of non-compliance addressed in financial audit reports to ensure that
necessary corrections are implemented.
5. Certifies the completeness and accuracy of receivable balances reported on financial
statements, and reports on the operating effectiveness of internal controls to OMB,
Treasury, and DHS as required.
6. Submits required OMB, Treasury, and DHS reports.
7.9.5.12.2.2 ALC, FINCEN, LSC-West, NPFC, PPC, and SFLC/Yard
These units are responsible for performing the following processes pertinent to the write-off of
receivables:
1. Execute all policies, procedures, and internal controls related to the write-off of
receivables, ensuring that financial reports and reconciliations comply with Federal
guidelines.
2. Collect appropriate source documentation used to support the values for debt to be
written off, and classify the write-off as either CNC) or closed-out.
3. Record and verify the completeness of transaction information.
4. Generate monthly receivables reports at the detail and summary transaction levels and by
classification type.
5. Prepare a monthly reconciliation of receivables reported at the detail level in the CAS
NESSS, and ALMIS GLs.
6. Report write-offs of receivables on applicable accounting and management reports; e.g.,
financial statements, the TROR, and the Debt Collection Improvement Act (DCIA)
Annual Report.
7.9.5.12.3 Policy
The Coast Guard shall adhere to both Federal and DHS policies, regulations, and guidelines for
the write-off of accounts receivable.
1. The Coast Guard defines delinquent receivables as receivables that have not been paid by
the date specified in the initial written demand for payment or applicable agreement or
instrument, unless other satisfactory payment arrangements have been made. For
example, if the initial invoice sent to the debtor requires payment in 30 days, then that
receivable is deemed delinquent if it remains unpaid on the 31st day.
2. The Coast Guard follows the policy specified in OMB Circular A-129, Section V,
“Delinquent Debt Collection”:
a. Generally, write-off is mandatory for delinquent debt older than two years unless
documented and justified to OMB in consultation with Treasury; however,
b. In those cases, where material collections can be documented to occur after two
years, debt cannot be written off until the estimated collections become immaterial.
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3. Write-offs must follow the U.S. Code, along with Treasury, DHS, and Coast Guard
policy relating to delegation of authority, responsibilities, and dollar limits. Specifically:
a. DHS policy states that, for public debts over $10,000, concurrence of the General
Counsel’s Office is required to terminate collection before closeout; and
b. OMB Circular A-129 states that for debts due from the public in the amount of
$100,000 or more, referral to the DOJ for concurrence to terminate collection action,
before closeout, is required.
Therefore, Coast Guard units that have been delegated authority for debt collection
actions from the Coast Guard CFO may write off debts up to and including $10,000, in
accordance with all applicable guidance. For units without delegated authority, requests
for write-offs must be made via the Commandant (CG-842) accounts receivable desk
officer to Commandant (CG-8) and DHS, as appropriate.
In addition, DHS policy specifically states that “No debt of more than $10,000 shall be
suspended or terminated without the concurrence of the Office of General Counsel.”
Therefore, for these types of actions, units must request such concurrence via the
Commandant (CG-842) accounts receivable desk officer to Commandant (CG-8) and the
Office of General Counsel.
4. Once a determination has been made that a receivable should be written off, it must be
classified as one of two types:
a. CNC – which allows for continuing cost-effective collection methods to be utilized;
or
b. Closed-out – which requires the legal procedure of “termination of collection
activity” in accordance with 31 CFR 903.3. Closeout of debts prohibits future
collection activity, and requires the Coast Guard to report to the Internal Revenue
Service (IRS) the forgiveness of the debt as a taxable event to the debtor for all debts
closed out for $600 or more. This report is made via Cancellation of Debt, IRS Form
1099-C. (This form may also be used for debts less than $600 at the discretion of the
Coast Guard.)
5. CNC debts are still reported on the TROR and are still eligible for Treasury’s cross-
servicing and offset programs. Public debt will only be written off and classified as CNC
if all applicable debt collection actions have been pursued and it is cost-effective to
continue collection efforts.
6. If receivables written off do not meet the criteria for CNC, they will be terminated and
closed out. The final action will be the issuance of a Cancellation of Debt, IRS Form
1099-C for all debts of $600 or more, in the hope that the U.S. Government will at least
recoup some of the receivables through tax collections on the forgiveness of the related
debt.
7. Once a debt has been terminated and closed out, the Coast Guard cannot take any further
administrative or legal action to collect the debt. However, the debt may be reactivated
in the event of the debtor’s voluntary subsequent repayment.
8. Write-offs must be auditable and thus supported by documentary evidence showing that
the debt is greater than two years delinquent or, for debt that has not reached that
milestone, a written statement that collection is not likely, based upon the documentary
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history of the debtor and all collection efforts. Any related general or subsidiary ledger
postings to the related account receivable and the AFDA must be made under the same
internal controls as for other Coast Guard accounting entries, such as separation of duties,
reviews, and approvals.
9. It is the Coast Guard’s policy to review public receivables written off and classified as
CNC at least annually for a determination that the respective CNC debt should be:
a. Continued as a CNC subject to collection actions; or
b. Closed out.
7.9.5.13 Accounts Receivable Reporting Requirements
Accounts receivable represent amounts due to the Coast Guard from other Federal agencies and
the public. Intragovernmental accounts receivable arises from the provision of goods and
services to other Federal agencies and are expected to be fully collected. Accounts receivable
due from the public typically results from user fees, fines and penalties, and the provision of
goods and services. Public accounts receivable is presented net of an AFDA, which is based on
the analyses of debtors’ ability to pay, specific identification of probable losses, aging analysis of
past due receivables, and historical collection experience. Interest due on past due receivables is
another type of accounts receivable, and is recorded and reported as required by applicable laws
and regulations.
The Coast Guard shall report all accounts receivable in accordance with DHS and other
applicable regulations and guidance. The amounts of accounts receivable shall be accurate and
valid upon entry into the Coast Guard’s financial accounting systems for presentation in financial
statements and accompanying notes.
7.9.5.13.1 Responsibilities
In addition to the overall responsibilities listed in Subsection 7.9.3, the following specific
responsibilities apply to accounts receivable reporting requirements:
7.9.5.13.1.1 Assistant Commandant for Resources (CG-8)
To facilitate the accounts receivable certification process, Commandant (CG-8):
1. Administers financial management activities delineated under the CFO Act of 1990,
which include accounting, budgeting, procurement, logistics, financial systems, policy,
planning, and audit oversight.
2. Establishes policies, procedures, and internal controls required to record and recognize
receivables.
3. Monitors internal control effectiveness and compliance with policies and procedures at
FINCEN and applicable directorates and offices.
4. Ensures accounts receivable financial information is in compliance with applicable
Federal accounting standards, policies, laws, and regulations.
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7.9.5.13.1.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84) directs the Financial Reporting and Analysis (CG-842) and Financial
Management Policy (CG-843) divisions to facilitate the following:
1. Develop financial policy and procedures for accounts receivable in coordination with
applicable accounting units.
2. Provide oversight and direction to FINCEN for the preparation of accounts receivable
components of the financial statements.
7.9.5.13.1.3 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86) performs the following:
1. Designate, design, and certify all financial systems relating to accounts receivable,
including hardware and software for financial asset management.
2. Ensure that all designed financial systems dealing with accounts receivable provide
adequate internal controls.
7.9.5.13.1.4 Office of Resource Management (CG-83)
Commandant (CG-83) performs all program management functions relating to receivables
established under reimbursable and refund programs.
7.9.5.13.1.5 Office of Information Management (CG-61)
Commandant (CG-61) ensures compliance with governmental regulations relating to accounts
receivable financial records retention.
7.9.5.13.1.6 Finance Center (FINCEN)
FINCEN executes all pertinent policies, procedures, and internal controls related to receivables.
7.9.5.13.1.7 Director of Contracting & Procurement (CG-91)
Commandant (CG-91) processes all Coast Guard agreements related to the sale of goods or
services, and also:
1. Negotiates agreement terms with customers to include quantity, price, and payment plan.
2. Documents all agreements with other Federal agencies.
3. Documents all agreements regarding purchase orders, contracts, and RAs.
4. Forwards copies of all established agreements to applicable units (ALC, FINCEN, NPFC,
SFLC/Yard).
For additional guidance on the requirements for recognizing, recording, reporting, and
documenting accounts receivable amounts, refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.9 (Revenue and
Accounts Receivable).
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7.9.5.13.2 Policy
1. Commandant (CG-8) shall follow all applicable Federal and DHS regulations and
guidelines in the reporting of accounts receivables.
2. Receivables shall be recognized when the Coast Guard establishes a claim to cash or
other assets against other entities, either based on legal provisions (such as a legislative
requirement), a payment due date, or goods or services provided.
3. Commandant (CG-8) has overall responsibility for all accounts receivable, related GL
accounts, and external reporting.
4. FINCEN is responsible for preparing CG-wide reports of accounts receivable for both
internal management and external regulatory requirements.
5. Accounting units that maintain the general and subsidiary ledger accounts shall report
separately:
a. Intragovernmental (Federal) and non-Federal entity accounts receivable; and
b. Billed and unbilled receivables.
6. General and subsidiary ledger information from accounting units (ALC, LSC-West,
NPFC, PPC, and SFLC/Yard) shall be provided to FINCEN in accordance with the
FINCEN SOP for CG-wide reporting.
7. The Coast Guard’s financial statements and accompanying notes shall meet the reporting
requirements of OMB Circular A-136 and FASAB guidance, such as report and
disclosure of:
a. The net realizable value of accounts receivable; and
b. The method(s) of calculating the AFDA and the dollar amount of the allowance.
8. FINCEN shall report receivables due from other Federal agencies separately from
receivables due from the public:
a. Intragovernmental (Federal) receivables – Coast Guard claims against other Federal
Government entities, such as Customs and Border Protection and the Department of
Defense (DOD).
b. Non-Federal (due from the public) receivables – Claims against non-Federal entities
such as State or local governments, businesses, individuals, including NAFIs.
9. A monthly reconciliation and validation shall be performed at the detail and transaction
levels from GL system reports. Any abnormal balances identified shall be researched and
reported in a timely manner.
10. All reconciliation packages shall be reviewed and submitted with the appropriate
approval signatures and dates. The packages shall be properly stored.
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7.9.5.13.2.1 Accounts Receivable Reports
FINCEN and other accounting units shall generate monthly accounting reports and perform
reconciliations through GL and subsidiary ledger systems. The reports produced include:
1. Accounting system reports; and
2. TROR.
7.9.5.13.2.2 Accounting System Reports/General Reports
FINCEN and other accounting units shall utilize the reports generated in the accounting system
to perform monthly reconciliation between the receivable subsidiary ledgers and the GL.
Reconciliations shall include an authorized signature and date certifying that the reconciliation
was performed and that totals reported on the subsidiary ledgers agree with the GL amounts.
Units shall identify any discrepancies found during the reconciliation, and shall research the
differences between the subsidiary ledger and the GL. All root causes, such as manual journal
entries or erroneous postings, shall be documented and corrected. The accounting unit shall then
record an adjustment in the accounting system to correct the discrepancy. Accounting units shall
generate monthly Trial Balance (TB) reports using the GLs. These reports shall include the total
values for all receivables. Additionally, accounting units shall prepare monthly reports that
identify the number of transactions and dollar amounts by receivable type (e.g., Federal and non-
Federal) and by usage (e.g., entity and non-entity). Accounting units shall use the monthly
reports to perform the reconciliation between the subsidiary ledger (detail level) and the GL
(summary level). The total values reported for receivables between these two reports must agree.
7.9.5.13.2.3 Treasury Report on Receivables (TROR)
In accordance with Treasury Financial Manual, Volume 1, Part 3, Chapter 7000, Supplement,
the TROR serves as a management report used to inform Federal decision-makers of the gross
book value of receivables owed to Federal agencies, as well as the status of the Government’s
debt portfolio. The consolidated TROR balances must reconcile to the Coast Guard’s financial
statement balances. If any installment is delinquent more than 120 days, FINCEN shall report the
debt on the TROR as delinquent more than 120 days.
If any part of a debt has been delinquent more than 120 days, and the debt has been accelerated
to be fully due based upon terms of the agreement regarding delinquency, the entire debt will be
reported as delinquent. When a discrepancy exists between the TROR and the GL balances,
FINCEN researches the discrepancy and makes the appropriate adjustments. These adjustments
to correct errors are referred to as “on-top” adjustments. All adjustments must be researched and
traceable to supporting documents. Only authorized officials shall approve adjustments.
FINCEN uses the TROR to report non-delinquent and delinquent receivables due from the
public. The following definitions apply:
1. Non-delinquent – unpaid debt prior to the billed receivable’s due date; and
2. Delinquent – unpaid debt 30 days or more past the due date. FINCEN shall use all legal
collection techniques, such as collection agencies, or transfer to Treasury for collection
attempts for delinquent debts.
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7.10 Reimbursable Agreements
Note: This Manual predominantly covers reimbursable agreements (RA) where Coast Guard is
the seller of goods and services. When Coast Guard is the buyer of goods and services from
other Government agencies it can be an assisted acquisition requiring contracting officer review
and approval or it can be a “financial transaction” RA that can be obligated by certain financial
managers without contracting officer participation. These financial transaction type RAs are
covered in Subsection 7.10.1 (Reimbursable Agreements – Coast Guard as Buyer) of this
Manual.
7.10.1 Reimbursable Agreements – Coast Guard as Buyer
The Economy Act of 1932, as amended, and codified in 31 USC 1535, permits the head of an
agency or major organizational unit within an agency to place an order with a major
organizational unit within the same agency or another agency for goods or services if:
1. the amounts are available;
2. the head of the ordering agency or unit decides the order is in the best interest of the
United States Government;
3. the agency or unit to fill the order is able to provide or get by contract the ordered goods
or services; and
4. the head of the agency decides ordered goods or services cannot be provided by contract
as conveniently or cheaply by a commercial enterprise.
Reimbursable Agreements (RAs) between Federal agencies are called “interagency agreements”
(IAAs), while those between components of the same agency are called “intra-agency
agreements.” Interagency Reimbursable Work Agreements (IRWAs), which are deemed
financial transactions, must be properly established and document a formal relationship between
the parties prior to requesting goods or services. An agreement must be developed and approved
under the appropriate legal authorities with necessary reviews, coordination, and clearances. No
informal arrangements shall be used to request supplies or services, resulting in any kind of
financial commitment or obligation. A written agreement is required by law to record an
obligation per Title 31 U.S.C. § 1501.
U.S. Treasury Central Accounting Reporting System (CARS) introduced new requirements for
all Government agencies’ financial data elements, including classification of activities that is
reinforced using two key components; an improved Component Treasury Accounting Symbol
(TAS) format and a newly introduced Business Event Type Code (BETC). These financial data
elements requirements and required funding document are to be used for all intra/interagency
agreements, from both the buyer and seller perspective, to meet CARS implementation
requirements for intra-governmental transactions. These identifiers, and other required
accounting data elements, include the Agency Location Code (ALC) and Business Partner
Network (BPN) Number.
For definitions, responsibilities and procedures for the recording, processing, and reporting of
Coast Guard intra-governmental transactions, including Military Interdepartmental Purchase
Requests (MIPR) with the Department of Defense (DOD), refer to Financial Resource
COMDTINST M7100.3F
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Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7,
Section 7.10.1 (Reimbursable Agreements – Coast Guard as Buyer).
7.10.2 Reimbursable Agreements – Coast Guard as Seller
7.10.2.1 Overview
The Coast Guard uses reimbursable agreements (RAs) for intragovernmental and other
reimbursable programs covering goods and services provided by the Coast Guard (e.g., the use
of Coast Guard facilities, personnel, expertise, or equipment) to other Department of Homeland
Security (DHS) components, other Federal agencies, and non-Federal entities. RAs are also used
to provide funds from the Oil Spill Liability Trust Fund (OSLTF) to other entities performing oil
spill removal and cleanup activities under the National Contingency Plan. The nature of the
reimbursable work must have real value to the Coast Guard at least equivalent to work for which
Coast Guard appropriations would otherwise be used. In this Section, Commandant (CG-8)
prescribes conditions, including reimbursement, under which personnel and facilities may be
provided.
Reimbursements are amounts earned and collected for goods sold or services furnished as a
result of an RA. Intragovernmental goods sold or services furnished must be authorized and
documented in an RA between the Coast Guard and the ordering entity. The cost of the goods or
services is documented and supported by the Coast Guard, and the entity receiving the goods or
services must subsequently reimburse the Coast Guard. Uncollected amounts earned from
reimbursable sales are recorded as accounts receivable.
Prior to requesting or performing work for any entity other than a Coast Guard operating unit, a
formal relationship between the parties must be properly established. For those situations where
a formal relationship must be documented between the parties, an agreement must be developed
and approved under the appropriate legal and programmatic authorities, along with the necessary
reviews, coordination, and clearances. Coordination and reviews ensure that a properly
formatted RA reflects the appropriate authority for the specific agreement, is consistent with
Coast Guard policies, and does not violate any appropriation laws.
The management and control of reimbursable program resources is an integral part of every
Coast Guard appropriation. Carrying out reimbursable work implicitly authorizes the Coast
Guard to temporarily use its direct appropriations to do the ordering agency’s work.
The apportionment and allotment controls discussed in Subsection 5.5.5 (Establishing and
Recording Apportionments, Allotments, and Suballotments) of this Manual reflect a combination
of direct and reimbursable funding authority. There is only limited exposure to the
Antideficiency Act (ADA) for exceeding reimbursable authority. For example, there is increased
exposure for ADA violations when Office of Management and Budget (OMB) apportions the
reimbursable resources as a separate Category B apportionment. In this situation, overobligation
or overexpenditure of reimbursable resources may result in an ADA violation. In the absence of
a separate Category B apportionment of reimbursable resources, overobligation and
overexpenditure of reimbursable authority would only cause a possible ADA violation if the total
obligations or expenditures from both direct appropriations and reimbursable resources were
exceeded.
COMDTINST M7100.3F
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Coast Guard staff managing reimbursable resources are essentially “borrowing” both
obligational authority and cash from the appropriation performing the work. Thus, the Coast
Guard runs a risk of overobligating its direct appropriations unless reimbursable work
agreements and billings for work completed are done on a timely and consistent basis. To avoid
exposure to the ADA, reimbursable program managers shall promptly establish and conclude
reimbursable agreements as provided below. These agreements represent valid, enforceable
contracts between the Coast Guard and the ordering agency. Without the timely establishment
and recording of these agreements, the Coast Guard is otherwise funding this work from direct
appropriations. Similarly, ordering agencies should be billed promptly for work performed, and
appropriate controls should be established to collect funds promptly from ordering agencies;
otherwise, the Coast Guard is making expenditures against direct appropriations for reimbursable
work.
For definitions, detailed responsibilities and procedures relating to reimbursable programs and
reimbursable agreement requirements, refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.10.2
(Reimbursable Agreements – Coast Guard as Seller).
7.10.2.1.1 Purpose
This Subsection prescribes the reimbursable agreement policies to be followed by Coast Guard
components in obtaining approval, performing work, and billing for organizations outside of the
Coast Guard under the terms of an approved and signed reimbursable agreement. Separate
policies for Federal Emergency Management Agency (FEMA) Mission Assignments (MAs) are
found in Subsection 5.6.6.8 (FEMA Mission Assignments).
7.10.2.1.2 Scope
This Subsection applies to all Coast Guard Headquarters staffs, areas, districts, logistics and
service center commands, and Headquarters units that are involved in reimbursement financial
resource management and administration. Additionally, this policy applies to reimbursable
programs covering goods and services provided by the Coast Guard to other DHS components,
other Federal agencies, and non-Federal agencies.
This Subsection does not apply to instances where the Coast Guard procures goods or services
from other Federal agencies. Also, the policies in this Subsection do not apply to transactions
between Coast Guard entities that are covered by central services agreements nor do they apply
to transactions between the various Coast Guard appropriations and the Supply Fund and Yard
Fund.
7.10.2.2 Authorities
1. Economy Act of 1932. 31 USC 1535, “Agency Agreements”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1535.pdf
2. Intergovernmental Cooperation Act. 31 USC 6505.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleV-chap65-sec6505.pdf
COMDTINST M7100.3F
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3. 31 USC 1536, “Crediting payments from purchases between executive agencies”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1536.pdf
4. 14 USC 701, “Cooperation with other agencies, States, territories, and political
subdivisions”.
http://uscode.house.gov/
5. Federal Acquisition Regulation (FAR), 48 CFR 16.505, “Ordering”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title48-vol1/pdf/CFR-2012-title48-vol1-sec16-
505.pdf
6. Federal Acquisition Regulation (FAR), 48 CFR 17.500, “Interagency Acquisitions”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title48-vol1/pdf/CFR-2012-title48-vol1-sec17-
500.pdf
7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://fasab.gov/pdffiles/2015_fasab_handbook.pdf
8. Office of Management and Budget, Improving the Management and Use of Interagency
Acquisitions, June 2008.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
9. Department of the Treasury, Treasury Financial Manual, Volume I, Part 2, Chapter
4700, Appendix 10, “Intragovernmental Transaction (IGT) Guide”.
http://tfm.fiscal.treasury.gov/v1.html
10. Financial Management Service (FMS) 7600A, United States Government Interagency
Agreement (IAA) – Agreement Between Federal Agencies General Terms and
Conditions (GT&C) Section.
https://www.opm.gov/
11. Financial Management Service (FMS) 7600B, United States Government Interagency
Agreement (IAA) – Agreement Between Federal Agencies Order Requirements and
Funding Information (Order) Section.
https://www.opm.gov/
12. Reimbursable Standard Rates, COMDTINST 7310.1 (series).
http://www.dcms.uscg.mil/directives
13. United States Coast Guard Reimbursable Management Process Guide, Version 2.0.
http://www.dcms.uscg.mil/directives
7.10.2.3 Responsibilities
7.10.2.3.1 Office of Resource Management (CG-83)
Commandant (CG-83):
1. Provides oversight and approval of reimbursable agreements, ensuring the Coast Guard
has available reimbursable budgetary authority to fulfill the commitments of each.
COMDTINST M7100.3F
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2. Advises Assistant/Deputy Commandant for Resources (CG-8/8D) on the execution of
their authority to sign funded and unfunded reimbursable agreements.
3. Delegates authority to sign funded and unfunded reimbursable agreements to the
following Coast Guard officials:
a. Assistant Commandants of Headquarters Programs;
b. Commanding Officers of Headquarters Units; and
c. Office of Resource Management (CG-83) staff, as required.
4. Reviews and approves FEMA MAs. Refer to Subsection 5.6.6.8.3 of this Manual for
additional responsibilities for FEMA MAs.
5. Delegates the authority for signing funding documents as shown in Table 7.4 below.
Note: The limits of reimbursable authority identified in Table 7.4 are based on current
information as of 13 March 2013. Generally, delegation of signature authority and limits
are reviewed and updated on an annual basis; therefore, the Office of Budget Execution
(CG-831) Reimbursable Program Manager should be contacted to confirm delegations of
authority to sign reimbursable agreements. Also, any personnel who have been delegated
authority to sign reimbursable agreements should always refer to their delegation letters
to ensure reimbursable limits are met.
Table 7.4 Delegations of Authority to Sign Reimbursable Agreements
Office
Limit of
Reimbursable Authority
Director, Office of Resource Management (CG-83) No limit
Director, Office of Budget Execution (CG-831) $5 million
Reimbursable program manager (CG-831)
(for all appropriations)
$1 million
Reimbursable regional manager (CG-831) $500,000
Appropriation manager (CG-831)
(for each respective appropriation)
$1 million
Allowance manager
(designated by the appropriation manager)
$100,000
Administrative Target Unit (ATU) manager
(designated by the allowance manager)
$100,000
Program element manager
(designated by the ATU manager)
Limit based on the Unit
Approval Plan level
Exceptions:
OSLTF allowance manager
(designated by the OSLTF appropriation manager)
National Pollution Funds Center (NPFC)
$10 million
$10 million
COMDTINST M7100.3F
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7.10.2.3.2 Judge Advocate General (JAG) & Chief Counsel (CG-094)
JAG and Commandant (CG-094) review all interagency agreements (IAAs), MOAs, MOUs and
letters of offer and acceptance (IAAs) for legal sufficiency, regardless of the amounts in the
agreements, to ensure compliance with the legal authorities being cited by both the ordering and
selling agency.
7.10.2.3.3 Finance Center (FINCEN)
FINCEN personnel establish lines of accounting (LOA), approved by the responsible RMO, to
be consistent with the policies prescribed in OMB Circular A-11.
The Funds Control Division (CG-831) manages reimbursable agreements (where Coast Guard
provides goods or services) and designates a reimbursable program manager who oversees the
overall program and appropriations managers who oversee the reimbursable program within their
respective appropriations. The Financial Analysis & Execution Division (CG-832) performs
analyses to calculate standard rates used to provide goods and services under reimbursable
agreements. The Allowance Fund Code (AFC) managers (including ALC and Yard/SFLC)
coordinate the execution of the reimbursable programs within their organization; the ATU
managers designate program element managers (PEMs) to carry out the responsibilities for
executing reimbursable agreements; and the PEMs monitor approved funding to the program
elements (PE). For additional detailed responsibilities relating to reimbursable programs and
reimbursable agreement requirements refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.10.2
(Reimbursable Agreements – Coast Guard as Seller).
7.10.2.4 General Policy for Reimbursable Programs
1. Commandant (CG-8) shall comply with applicable Federal and DHS policies,
regulations, and guidelines in the financial management of RAs. FINCEN reports all
Coast Guard accounts receivable related to RAs in compliance with internal management
and external regulatory requirements.
2. All Coast Guard RAs shall be guided by applicable procedures, policy, regulations, and
laws as cited above.
3. Before entering into an RA, the Coast Guard (as the seller) shall confirm that the work
requested by the ordering agency (as the buyer) is within the scope of the Coast Guard’s
mission, that the Coast Guard has the authority and capacity to perform the work, and
that the Coast Guard can provide the goods or services, or make an authorized contract
with another source to provide the goods or services, before the ordering agency’s funds
expire.
4. Additionally, before each RA is approved, Commandant (CG-8) shall ensure that all of
the following requirements are satisfied:
a. The estimated full costs of performing the work are analyzed for each proposed
agreement;
b. FINCEN shall obtain alternative funding for the waived incremental cost if the
amount of the price adjustment (or proposed cost waiver on a cost-based agreement)
requires any incremental costs that will be incurred because of the agreement; and
COMDTINST M7100.3F
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c. The pricing applied to the RA shall not result in reimbursable revenue that is in
excess of the full cost of providing the work unless the excess revenue is promptly
deposited into Treasury’s miscellaneous receipts account.
5. The Coast Guard is required to use the Treasury Standard Interagency Agreement (IAA)
forms (U.S. Department of Treasury Financial Management Service (FMS) Form 7600A
and 7600B) for all Coast Guard interagency agreements where the Coast Guard is the
servicing component.
Note: The use of U.S. Department of Treasury Financial Management Service (FMS)
Form 7600A and 7600B for all Interagency Reimbursable Work Agreements (Financial
Transactions) is required except in rare instances where a Federal agency attempts to
impose the use of another form for the agreement (MOA, MOU, or DoD or other agency
specific forms). Should a prospective Federal trading partner initially refuse to use Coast
Guard recommended forms to develop the agreement, every effort should be made to
remind the partner agency of current Coast Guard policy and procedure in using the
forms. Should another form be used (as a last resort) you must ensure all required data
elements from the U.S. Department of Treasury Financial Management Service (FMS)
Form 7600A and 7600B are properly captured within the agreement form used.
7.10.2.5 FEMA Mission Assignments (MAs)
The Stafford Act provides that the Director of FEMA may issue MAs to any Federal agency with
or without reimbursement, to utilize its authorities and the resources granted to it under Federal
law in support of disaster relief efforts. The MA is a directive or work order issued by FEMA
directing an agency to complete a specified task and providing a specified amount of
reimbursable funding for that purpose. MAs can be issued by FEMA’s National Resource
Coordination Center (NRCC), one of its Regional Resource Coordination Centers (RRCC), or a
joint field office (JFO) established after a Presidential Disaster Declaration has been issued. The
Coast Guard may receive tasking under several different Emergency Support Functions (ESFs)
for multiple MAs in each State affected by the natural disaster. For additional policies on FEMA
MAs, please refer to Subsection 5.6.6.8 (FEMA Mission Assignments) of this Manual.
7.11 Accounts Payable and Disbursements
7.11.1 Overview
The proper authorization and processing of purchases, timely recording of receipt of goods and
services, valid and accurate payment, and management of payables and disbursements are
essential to the Coast Guard’s ability to produce reliable and auditable purchases, accounts
payable, and disbursement data. Reliable and auditable financial information improves the Coast
Guard’s management of cash balances, which reduces the frequency of improper payments,
optimizes vendor discounts, and avoids unnecessary interest payments and penalties.
This document provides Coast Guard policy for recording, updating, and maintaining all
transactions related to purchasing, payables, and disbursements within the Coast Guard major
financial management systems.
COMDTINST M7100.3F
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For detailed procedures and responsibilities refer to the Financial Resource Management
Manual-Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.11
(Accounts Payable and Disbursements).
7.11.1.1 Purpose
This document establishes policy for recognizing, recording, and accounting for purchasing,
accounts payable, and disbursement transactions associated with the purchase and use of goods
and services. These policies facilitate the completeness and accuracy of the purchasing and
payable transactions that are recorded and maintained within the three general ledger systems.
7.11.1.2 Scope
This policy applies to all Coast Guard offices, including the NPFC and the Academy, that record,
maintain, and report the values of purchases, accounts payables, and disbursements that are
initially recorded in underlying feeder and subsidiary systems, such as the Commercial
Transportation Approval Payment System (CTAPS), the Finance and Procurement Desktop
(FPD), the Travel Liquidation Control (TLC) module, and the Workflow Imaging Network
System (WINS), and then subsequently reflected in the general ledger (GL) of ALMIS, CAS,
and NESSS. Overall responsibilities are specified for the following offices and units:
1. Assistant Commandant for Resources (CG-8)/CFO;
2. Office of Financial Policy, Reporting, and Property (CG-84);
3. Financial Reporting and Analysis Division (CG-842);
4. Office of Internal Controls (CG-85);
5. Aviation Logistics Center (ALC), Finance Center (FINCEN), and Surface Forces
Logistics Center (SFLC)/Yard; and
6. Coast Guard Field Units and Offices.
Additional responsibilities are detailed for the specific areas in Subsections 7.11.3 through
7.11.16.
7.11.2 Authorities
1. Antideficiency Act, as amended. 31 USC 1341-1342, 1349-1351, 1511-1519.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
3. Department of Homeland Security Financial Accountability Act. PL 108-330.
http://www.gpo.gov/fdsys/pkg/PLAW-108publ330/pdf/PLAW-108publ330.pdf
4. Federal Managers Financial Integrity Act of 1982 (FMFIA). PL 97-255.
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
5. Improper Payments Elimination and Recovery Act of 2010. PL 111-204.
http://www.gpo.gov/fdsys/pkg/PLAW-111publ204/pdf/PLAW-111publ204.pdf
COMDTINST M7100.3F
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6. Improper Payments Information Act of 2002. PL 107-300.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ300/pdf/PLAW-107publ300.pdf
7. Prompt Payment Act. PL 97-177; 31 USC 3901-3907.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap39.pdf
8. 31 USC 1535, “Agency agreements”. [Commonly referred to as the Economy Act of
1932.]
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1535.pdf
9. 48 CFR Chapter 1. Federal Acquisition Regulation (FAR).
https://www.acquisition.gov/
10. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
11. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
12. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
13. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, July 2016.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
14. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
15. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
16. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual
(TFM), Volume I, “Federal Agencies”.
http://tfm.fiscal.treasury.gov/v1.html
17. Chief Financial Officer (CFO) Technical Authority, COMDTINST 5402.3 (series).
http://www.dcms.uscg.mil/directives
18. Management’s Responsibility for Internal Control, COMDTINST 5200.10 (series).
http://www.dcms.uscg.mil/directives
COMDTINST M7100.3F
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7.11.3 Responsibilities
The following offices and units are responsible for the completeness and accuracy of purchasing,
payables, and disbursements that are recorded and maintained within the ALMIS, CAS, and
NESSS GL and subsidiary ledger systems.
7.11.3.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO:
1. Administers financial management activities delineated under the CFO Act of 1990,
which include accounting, budgeting, procurement, logistics, financial systems, policy,
planning, and audit oversight.
2. Provides financial analyses; a description of the effectiveness of management controls;
program performance results related to the Coast Guard’s missions, goals, and objectives;
and an assessment of data validity and reliability in support of performance measures.
7.11.3.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Provides support for FINCEN in its operations and reporting of financial information.
2. Writes and implements financial management policies.
3. Properly accounts for Coast Guard property.
7.11.3.3 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Provides oversight on financial reporting requirements and the accounts payable line item
on the Coast Guard Balance Sheet.
2. Provides financial and accounting guidance to program offices and field units.
7.11.3.4 Office of Internal Controls (CG-85)
Commandant (CG-85):
1. Performs test of design and test of effectiveness over financial management controls and
reporting.
2. Provides management assurance over financial statement balances.
7.11.3.5 ALC, FINCEN, and SFLC/Yard (as applicable)
Personnel at ALC (utilizing ALMIS), FINCEN (utilizing CAS), and SFLC/Yard (utilizing
NESSS):
1. Maintain and update their respective GL, along with any subsidiary ledger or data
management systems associated with purchasing and payables.
2. Provide final review and approval of disbursements to liquidate accounts payable.
COMDTINST M7100.3F
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For detailed responsibilities for Coast Guard Field Units and Offices refer to the Financial
Resource Management Manual-Procedures (FRMM-P), COMDTINST M7100.4 (series),
Chapter 7, Section 7.11 (Accounts Payable and Disbursements).
7.11.4 Accounts Payable
Accounts payable represents claims or obligations for goods or services received from other
Federal and non-Federal entities. These amounts are due for a variety of reasons, such as the
receipt of goods or services in accordance with contract terms, recurring charges, travel claims, a
loan or grant agreement, or progress payments under a construction contract.
The accounts payable policies are the same throughout the Coast Guard, however, the processes
can differ depending on the location of the accounting station (ALC, SFLC/Yard, or FINCEN),
the type of transaction (e.g., contract, purchase order, travel, recurring charge), and the amount
of the transaction. In all cases, however, accounts payable shall be recognized and established
upon the Coast Guard’s acceptance of title for goods or services, regardless of whether the goods
have been delivered or are in transit. Also, when contractors build facilities or equipment to
Government specifications, accounts payable must be recognized for these ongoing projects.
Constructive or de facto acceptance is based upon an estimate of the percentage of the work
completed during the respective accounting period.
Once goods or services have been received and accepted, accounts payable transactions should
be supported by receiving documents, including progress reports and invoices. However, if
invoices for goods and services are not available, the Coast Guard must estimate and report the
amounts owed at the end of accounting periods and accrue such estimates as liabilities.
Accounts payable liabilities are automatically liquidated when invoices and recurring monthly
charges are paid. Payments are made via the USCG disbursement process.
7.11.4.1 Authorities
General authorities relevant to the accounts payable process are listed in Subsection 7.11.2. The
following authorities relate specifically to accounts payable:
1. Improper Payments Elimination and Recovery Act of 2010. PL 111-204.
http://www.gpo.gov/fdsys/pkg/PLAW-111publ204/pdf/PLAW-111publ204.pdf
2. Improper Payments Information Act of 2002. PL 107-300.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ300/pdf/PLAW-107publ300.pdf
3. Prompt Payment Act. PL 97-177; 31 USC 3901-3907.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap39.pdf
4. 26 USC 6611, “Interest on overpayments”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/html/USCODE-2011-title26-
subtitleF-chap67-subchapB-sec6611.htm
5. Federal Acquisition Regulation (FAR), Subpart 13.4, “Fast Payment Procedure”.
http://www.acquisition.gov/
COMDTINST M7100.3F
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6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Concepts (SFFAC) No. 1, Objectives of Federal Financial Reporting,
September 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
7.11.4.2 Responsibilities
Responsibilities relevant to accounts payables and disbursements may be found in Subsection
7.11.3.
7.11.4.3 Accounts Payable Policy
1. Accounts payable shall be recognized:
a. When the Coast Guard accepts title to goods or services, regardless of whether the
goods have been delivered or are in transit. The Coast Guard shall recognize a
liability for the unpaid amount of the goods or services. If invoices are not available
when financial statements are prepared, the amounts owed shall be estimated.
b. When a contractor builds or manufactures facilities or equipment to the
Government’s specifications. Formal acceptance of the products by the Coast Guard
is not the determining factor for recognizing the liability. Constructive or de facto
acceptance is based upon an estimate of the percentage of the work completed during
the respective accounting period. The estimate is based on the Coast Guard’s
engineering and management evaluation of actual performance progress and incurred
costs.
2. Interest payable shall be recorded on late payment of bills by the Coast Guard
(31 USC 3901–3907) and on refunds (26 USC 6611).
3. The Coast Guard shall also disclose accounts payable that are not covered by budgetary
resources.
4. Accounts payable transactions shall be initiated by receiving documents, including
progress reports and invoices. However, if receiving documents and/or invoices for
goods and services are not available, the Coast Guard shall estimate and report the
amounts owed at the end of accounting periods.
5. All values reflected on receiving documents, contracts, and invoices for goods or services
received, accepted, and owed by the Coast Guard shall be recorded in the accounts
payable modules of the ALMIS, CAS, and NESSS GL systems.
6. Accounts payable resulting from intragovernmental transactions shall be recorded
separately in accounts payable subsidiary ledger accounts and reported separately from
accounts payable to the public in all applicable general-purpose financial reports.
7. Amounts recorded in the GL as payables shall be at the gross invoice amount.
COMDTINST M7100.3F
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8. Any liability (amount owed) by the Coast Guard shall be reported to ALC, FINCEN, or
SFLC/Yard so that the liability may be properly recorded as an accounts payable.
9. Accounts payable liabilities shall be automatically liquidated in the accounting system
when invoices are paid. Payments are made via the Coast Guard’s disbursement process
(see Subsection 7.11.6 (Disbursements)).
10. A quarterly estimate of the accrued accounts payable balance shall be calculated, based
upon either current payments that relate to prior periods or a current assessment of goods
and services received but not yet invoiced and paid.
11. Valid supporting documentation shall be used to verify the balances for accounts payable
within the GL and subsidiary ledger systems at the end of each accounting period.
Examples of supporting documentation include invoices, purchase orders, Miscellaneous
Obligation, Form CG-3089, Material Inspection Acceptance and Receiving Report, DHS
Form 700-21, and Travel Voucher or Subvoucher, DD Form 1351-2.
12. A monthly reconciliation and validation shall be performed using appropriate source
documentation to validate and support the accounts payable balances.
13. Account reconciliations shall be performed at the detail and summary levels for all
accounts payable recorded in the ALMIS, CAS, and NESSS GLs. Any abnormal
balances shall be promptly researched, and the root causes shall be identified and
reported for corrective action.
14. Obligations (undelivered orders paid and unpaid), which are recorded in the budgetary
accounts until the goods or services are received, and the related accounts payable, which
are recorded in the proprietary accounts, shall be periodically reviewed to determine if
any transactions are invalid. Invalid transactions and the accompanying obligations shall
be adjusted or deobligated, as appropriate.
7.11.5 Accruals
Federal accounting standards require the Coast Guard to record liabilities for all goods and
services actually or constructively received but not yet paid. Currently, the Coast Guard accrues
liabilities based on quarterly analyses of delivered orders-obligations paid (GL 490200) to
estimate the value of goods and services received and accepted in lieu of invoices or receiving
reports. The Coast Guard records accrued liabilities to the Treasury Information Executive
Repository (TIER) and resulting financial statements.
Note: Refer to Subsection 7.13 (Accrual Policy) of this Manual for a more detailed discussion
of accruals.
7.11.6 Disbursements
A disbursement is a payment to an individual or organization for goods furnished or services
rendered, including payments to other Government agencies using the Intragovernmental
Payment and Collection (IPAC) or Internet Payment Processing (IPP) System. The Coast
Guard’s non-payroll disbursements are processed at FINCEN, with the exception of ALC.
Disbursements for ALC are processed through the GL disbursement module ALMIS. In addition,
SFLC/Yard uses NESSS to record certain IPAC payments as wells as travel disbursement
transactions made on SFLC/Yard’s behalf by FINCEN.
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This Subsection addresses policies relating to disbursements. It prescribes standards to ensure
the reliability of the Coast Guard’s disbursing system. It also provides the policy for establishing
electronic funds transfer (EFT) as the standard method for making Federal payments. Properly
executed electronic documents and official digital signatures are deemed equivalent to paper
documents and manual signatures. Standards for retention of paper payment support documents
at remote field locations are also established. Risk categories for Federal payment, collection,
and collateral transactions, as established by the Department of Treasury, are referenced and
adopted.
7.11.6.1 Authorities
The following authorities relate specifically to disbursements:
1. Cash Management Improvement Act. PL 101-453. 31 USC 3335; 6501; 6503.
a. http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3335.pdf
b. http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleV-chap65-sec6501.pdf
c. http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleV-chap65-sec6503.pdf
2. Debt Collection Improvement Act of 1996. PL 104-134 Section 31001.
http://www.gpo.gov/fdsys/pkg/PLAW-104publ134/pdf/PLAW-104publ134.pdf
3. Improper Payments Elimination and Recovery Act of 2010. PL 111-204.
http://www.gpo.gov/fdsys/pkg/PLAW-111publ204/pdf/PLAW-111publ204.pdf
4. Improper Payments Information Act of 2002. PL 107-300.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ300/pdf/PLAW-107publ300.pdf
5. 31 USC 3321, “Disbursing authority in the executive branch”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3321.pdf
6. 31 USC 3322, “Disbursing officials”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3322.pdf
7. 31 USC 3325, “Vouchers”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3325.pdf
8. 31 USC 3528, “Responsibilities and relief from liability of certifying officials”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap35-subchapIII-sec3528.pdf
9. Cost Principles for State, Local, and Indian Tribal Governments (OMB Circular A-87).
https://www.gpo.gov/fdsys/granule/CFR-2012-title2-vol1/CFR-2012-title2-vol1-
part225/content-detail.html
10. 5 CFR 1315, “Prompt Payment”, Final Rule, September 29, 1999.
http://fms.treas.gov/prompt/regulations.html
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11. 31 CFR 206, “Management of Federal Agency Receipts, Disbursements, and Operation
of the Cash Management Improvements Fund”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol2/pdf/CFR-2012-title31-vol2-
part206.pdf
12. 31 CFR 208, “Management of Federal Agency Disbursements”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol2/pdf/CFR-2012-title31-vol2-
part208.pdf
13. 31 CFR 210, “Federal Government Participation in the Automated Clearing House”.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title31-vol2/pdf/CFR-2012-title31-vol2-
part210.pdf
14. Federal Acquisition Regulation (FAR), Subpart 32.11, “Electronic Funds Transfer”.
http://www.acquisition.gov/
15. Federal Acquisition Regulation (FAR), Subpart 13.4, “Fast Payment Procedure”.
http://www.acquisition.gov/
16. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 3300 “Statement of Transactions (FMS 224) Reporting by
Agencies for Which the Treasury Disburses”.
http://tfm.fiscal.treasury.gov/v1/p2/c330.html
17. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4A, “Payment-Related Activities within the Authority Granted to the U.S.
Chief Disbursing Officer (CDO)”, Chapters 1000 - 3000.
http://tfm.fiscal.treasury.gov/v1.html#Part4A
18. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 5, Chapter 7500, “Fedwire and Automated Clearing House (ACH) Credit
Deposits to the Account of the Bureau of the Fiscal Service”.
http://tfm.fiscal.treasury.gov/v1/p5/c750.html
19. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 4000, “Intra-Governmental Payment and Collection (IPAC)
System”.
http://tfm.fiscal.treasury.gov/v1/p6/c400.html
20. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 8000, Section 8040, “Disbursements”.
http://tfm.fiscal.treasury.gov/v1/p4/c800.pdf
21. Department of Homeland Security, Financial Management Policy (FMP) 011, “General
Disbursements”, September 24, 2007.
http://cfo-
policy.dhs.gov/Documents/Superseded%20Policies%20Archive/FMP%20011%20Genera
l%20Disbursements.pdf
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7.11.6.2 Responsibilities
7.11.6.2.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8)/CFO:
1. Directs and manages Coast Guard financial management personnel.
2. Issues policy and provides guidance and oversight of financial management activities and
operations.
3. Complies with required disbursement reporting and annual certifications.
7.11.6.2.2 FINCEN/ALC/SFLC/NPFC
Personnel at FINCEN, ALC, SFLC, and NPFC:
1. Ensure that the internal controls in place to support the amounts authorized for payment
by the disbursing officers are in accordance with the payment information certified to
them.
2. Ensure disbursements are supported by payment documents (e.g., purchase orders,
contracts, receiving reports, invoices, bills, statements of accounts) that show sufficient
information to adequately account for the disbursements.
7.11.6.3 Documentation and Review
Complete, consistent, and accurate purchase order and contract files and related disbursement
(entitlement) and accounting records are necessary to reduce the potential for Antideficiency Act
violations and minimize the number and dollar value of inaccurate disbursements.
1. Paying and accounting office files:
Contract files shall include the information specified in Paragraph 4.803(c) of Federal
Acquisition Regulation (FAR). Documents shall be accumulated in compliance with this
policy and shall be retained in accordance with the Information and Life Cycle
Management Manual, COMDTINST M5212.12 (series). These documents shall be made
available for internal review and audit upon request.
2. Classified contracts:
When a basic contract is classified with a very restrictive and limited need to know, the
disbursing office may receive a copy containing the minimum information required for
payment. These contracts are sufficient support on which to base payments. Disbursing
offices shall ensure that sensitive and classified information is appropriately safeguarded.
Each payment document shall be processed as if it relates to a “normal” payment, and
before a payment is made, all prescribed documentation necessary for payment shall be
delivered to the disbursing office.
3. Prepayment audit:
Effective control over disbursements requires the pre-audit and approval of vouchers
before they are certified for payment. The Coast Guard shall develop prepayment audit
procedures for invoices, to verify receipt and acceptance, except when using the Fast Pay
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process. Fast Pay defers specific examining steps, usually the verification of receipt and
inspection, on the condition that they are performed after payment is made. See Item 13,
Postpayment Audit, below.
4. Required payment documentation:
To ensure that payments are correct and properly certified, the following documents are
required and must be maintained:
a. Purchase order or contract that includes the vendor’s Federal Tax Identification
Number;
b. Invoice or voucher; and
c. Receiving report, progress report, or electronic equivalent.
This “three-way match” policy prohibits disbursements without evidence of a need for
the goods or services, a valid demand for payment, and documentation that the goods or
services have been received and accepted. Specific requirements for elements of
documentation are also stated in 5 CFR 1315, “Prompt Payment.”
5. Intragovernmental Payment and Collection (IPAC):
For disbursement to other Government agencies, the Coast Guard shall utilize the IPAC
system which provides a standardized interagency fund transfer mechanism for Federal
Program Agencies (FPAs). IPAC facilitates the intragovernmental transfer of funds with
descriptive data from one FPA to another.
6. Certification of vouchers:
All basic vouchers, voucher-schedules, and invoices or bills used as vouchers must be
certified as legal and proper for payment by an ACO. The ACO must be authorized to
certify for the agency location code that the payments will be drawn against. No
payments will be processed by the Treasury Department’s Bureau of the Fiscal Service
without proper certification.
7. Segregation of duties:
Appropriate segregation of duties relating to Coast Guard disbursing functions is
essential to strong financial management. The disbursing function shall be separate from
the following operations and functions (unless justified in writing and with compensating
controls in place to mitigate the increased risk):
a. Purchasing goods and services;
b. Receiving goods and services;
c. Examining invoices and vouchers;
d. Preparing payment vouchers;
e. Certifying payments; and
f. Recording and reconciling payments.
8. Voucher payment:
a. All payment vouchers submitted to FMS shall be signed and certified by a duly
designated ACO and entered in the Secure Payment System (SPS), which
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electronically transmits a certified voucher-schedule to the appropriate Treasury
Department Regional Financial Center (RFC).
b. The Coast Guard may pay an invoice before the due date if the vendor offers a
discount for early payment. Fast payment procedures and EFT payments support this
requirement.
c. Special payment requests shall not be issued unless approved by the RFC’s director
or other high-level official.
d. All disbursements shall be supported by accurate disbursement information, including
accurate line of accounting (LOA) information on the vouchers and on the supporting
documents.
9. Foreign currency:
All requests for disbursement of foreign currency shall be forwarded to the Kansas City
RFC. Requests must be received by the RFC 10 days before the indicated payment date.
Foreign currency disbursements may also be issued using the International Treasury
Services system (ITS.gov).
10. Recurrent payments – fixed amounts:
Payments for services of a continuing nature (e.g., rents, leases, janitorial services),
which are performed under agency-vendor agreements or contracts providing for
payments of definite amounts at fixed periodic intervals, may be made without
submission of invoices or bills by the vendor. The basic voucher prepared by the Coast
Guard to support payments of this nature should show, at a minimum, the contract
number, the period covered by the payment, the name of the vendor, the amount of the
payment, and the account to be charged. Supporting documentation for vouchers and/or
recurring schedules of payment, or other comparable documentation depending on the
payment system used, will be certified for payment in the same manner as are the
vouchers for other types of payments. Administrative controls should be established to
ensure that recurrent payments are:
a. Not on expired contracts or agreements;
b. For the correct amounts;
c. For services actually performed; and
d. Not duplications.
11. Prompt payment:
a. The Coast Guard shall comply with the Prompt Payment Act unless otherwise
authorized by law. Possible exceptions include disbursements governed by the Cash
Management Improvement Act, including grant programs listed in the Catalog of
Federal Domestic Assistance (CFDA). Examples of such grants include State Access
to the Oil Spill Liability Trust Fund and Boating Safety Financial Assistance.
b. If a vendor is not paid in a timely manner, the Coast Guard shall pay a late payment
penalty to the vendor according to the Prompt Payment Act.
c. When a cash discount has been offered for prompt payment, every effort should be
made to process the invoice within the discount period. The invoice must be
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processed according to the specific terms on which the discount has been offered by
the contractor or supplier. Discounts should be taken only on those invoices which
can be paid within the specified discount period and which are cost effective to the
Government.
d. For effective cash management, the voucher covering the payment should be
submitted for payment as near the last day of the prompt payment period as possible.
Prompt Payment Act conditions are met if a check payment is dated and
mailed/deposited within the period, not received by the recipient during the period.
They are met for ACH and Fedwire payments if the settlement date for the payment is
within the prompt pay period.
12. Improper payment:
In order to reduce the potential for Antideficiency Act violations and to minimize the
number and dollar value of any improper or inaccurate disbursement, the Coast Guard
shall maintain complete, consistent, and accurate procurement documentation. Examples
of documentation include purchase orders, contract files, receiving reports, vouchers,
invoices, and related disbursement and accounting records.
13. Postpayment audit:
Components that use the Fast Pay process and Smart Pay process shall develop
postpayment audit procedures for invoices, to verify receipt and acceptance of goods and
services.
14. Reconciliations:
a. The Coast Guard shall reconcile disbursements utilizing:
1) Schedules sent to Treasury;
2) Related confirmation reports, including error reports; and
3) Returned payments from Treasury whenever improper payments are discovered.
4) Completed IPACs should be audited to verify that the payments have been
applied to the correct obligations.
b. All documentation used to support values, reconciliations, and adjustments shall be
maintained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series).
15. Reporting:
a. The Coast Guard shall record disbursements at the transaction level and report them
at the summary level.
b. The total disbursement amount (for the year or quarter) is reported on the
Disbursements line item on the Combined Statement of Budgetary Resources.
c. In addition to the total disbursement amount on the financial statements, the Coast
Guard shall prepare the following reports:
1) Monthly receipts and disbursements information/data via CWA/CARS;
2) Prompt payment reports, as determined by Commandant (CG-8)/CFO; and
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3) An annual report of Improper Payments Information Act activities (part of the
Performance and Accountability Report).
7.11.6.4 Electronic Funds Transfer (EFT)
The Coast Guard must use EFT to the maximum extent feasible when disbursing Federal funds.
Exceptions to EFT include, but are not limited to, the following circumstances:
1. The recipient of Federal funds has certified in writing that the use of EFT would cause a
hardship.
2. The disbursement involves national security interests, wartime needs, national
emergencies, or military operations.
3. The disbursement is made in furtherance of a law enforcement action.
4. The disbursement is required by statute to be in cash.
5. The disbursement is valued at $25.00 or less.
6. There is an emergency or other unusual and compelling urgency.
7. The disbursement is a one-time nonrecurring payment which would not be cost beneficial
if paid by EFT.
7.11.6.5 Fast Pay
The Fast Pay process allows payments under limited conditions to a contractor prior to the
Government’s verification that the goods have been received and accepted.
1. The Coast Guard may use the Fast Pay process for EFT payment whenever it is allowable
and efficient to do so.
2. The Fast Pay process may be employed only when all of the following conditions are
met:
a. Individual purchasing instruments do not exceed $35,000, except that executive
agencies may permit higher dollar limitations for specified activities or items on a
case-by-case basis.
b. Deliveries of supplies are to occur at locations where there is both a geographical
separation and a lack of adequate communications facilities between Government
receiving and disbursing activities that makes it impractical to make timely payment
based on evidence of Government acceptance.
c. Title to the supplies passes to the Government:
1) Upon delivery to a post office or common carrier for mailing or shipment to the
destination; or
2) Upon receipt by the Government, if the shipment is by means other than Postal
Service or common carrier.
d. The supplier agrees to replace, repair, or correct supplies not received at destination,
damaged in transit, or not conforming to purchase requirements.
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e. The purchasing instrument is a firm-fixed-price contract, a purchase order, or a
delivery order for supplies.
f. A system is in place to ensure:
1) Documentation of contractor performance under Fast Pay purchases;
2) Timely feedback to the contracting officer in case of contractor deficiencies; and
3) Identification of suppliers that have a current history of abusing the Fast Pay
procedure.
7.11.6.6 Smart Pay Program
Under the Smart Pay Program, the Coast Guard is authorized to make approved Purchase Order
(document type 23) invoice payments that are $35,000 or less prior to FINCEN receiving a
certified receiving report instead of holding payments that result to the unit’s funds being
charged with an interest penalty. All units are still required to transmit receiving reports
promptly in the Financial and Procurement Desktop (FPD) system to confirm receipt of goods or
services. FINCEN (FI) conducts a post-payment audit to ensure the units received and the
proper amount of goods or services match the payment. The post-payment audit serves as an
internal control process to verify payments without certified receiving reports are valid for goods
and services confirmed received. The units have a responsibility to protect the integrity of this
program.
7.11.7 Advances and Prepayments
Advances are amounts paid prior to the receipt of goods, services, or other assets to Coast Guard
employees, contractors, grantees, or others to cover a part or all of the recipient’s anticipated
expenses, or as advance payments for the cost of goods and services that the Coast Guard
acquires. Advances are ordinarily made only to payees to whom the Coast Guard has an
obligation, and the advance does not exceed the amount of the obligation. Examples include
travel advances to employees, as well as contract, grant, or cooperative agreements made before
goods or services are provided by the contractor or grantee.
Prepayments are payments made by the Coast Guard to cover certain periodic expenses before
those expenses are incurred, or amounts paid for goods and services to provide for future benefits
over a specified time period. Examples include rents, subscriptions, taxes, royalties, insurance,
and maintenance agreements. Prepayments apply when it is generally accepted industry practice
to pay in advance, and the prepayment is authorized by law.
7.11.7.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to advances and prepayments:
1. 31 USC 3324, “Advances”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3324.pdf
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2. Federal Acquisition Regulation (FAR), Subpart 32.4, “Advance Payments for Non-
Commercial Items”.
http://www.acquisition.gov/
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
4. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4a, Chapter 2000, “Overall Disbursing Rules for All Federal Agencies”.
http://www.fms.treas.gov/tfm/vol1/v1p4ac200.html
5. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.4, “Payables and Disbursements”.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.4%2
0Payables%20and%20Disbursements.pdf
6. Department of Homeland Security, Office of Financial Management, Financial
Management Policy Manual (FMPM), Section 3.9, “Cash Management”.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.9%2
0Cash%20Management.pdf
7.11.7.2 Responsibilities
Overall responsibilities relevant to accounts payables, disbursements, and purchases may be
found in Subsection 7.11.3. The following components have additional duties relating to
advances and prepayments.
7.11.7.2.1 Units and Field Offices
Units and field offices ensure that purchase requests or payment vouchers submitted to FINCEN
for advance payments and prepayments include all supporting documentation, and that the
payments comply with all provisions for an advance or prepayment.
7.11.7.2.2 Office of Procurement Policy and Oversight (CG-913)
Commandant (CG-913) ensures that advance payments to contractors are authorized in
accordance with Department of Homeland Security Acquisition Manual (HSAM), Subchapter
3032.4 and Coast Guard Acquisition Procedures (CGAP), Subchapter 3032.4, and are supported
by the contracting officer’s determination in accordance with the Federal Acquisition Regulation
(FAR), Subpart 32.4.
7.11.7.3 Policy
7.11.7.3.1 General
1. Coast Guard units may only advance public monies when authorized by:
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a. A specific appropriation or law; or
b. The President, to be made to a disbursing official.
2. All advances and prepayments shall be in accordance with applicable laws.
3. Coast Guard units authorizing a grant or contract may provide advance financing to
qualifying recipients as part of the grant agreement or contract.
4. A travel advance may be issued to an employee when the employee does not have a
Government travel charge card.
5. Coast Guard units should limit funds advanced for travel expenses to the estimated out-
of-pocket expenses that a traveler is expected to incur for authorized travel purposes prior
to reimbursement.
6. Travel advances will only be issued to travelers based on an approved travel order.
7. Advances of pay and allowances are generally not authorized, but pay and allowances
may be advanced to:
a. Employees assigned to posts in a foreign area; and
b. Uniformed members—for not more than three month’s pay—when the member
1) Has a change of permanent station; or
2) Is on duty at a distant station where pay cannot be disbursed on a regular basis.
8. Advances shall be kept to the minimum amounts necessary for the shortest possible time
periods.
9. Unneeded and unused balances shall be recovered as soon as it is clear that they are not
necessary for the purposes for which originally made.
7.11.7.4 Statutory Exceptions
There are statutory exceptions for the advancing of public monies. The following authorities
specify some of these exceptions.
1. 5 USC 4109, “Expenses of training” – Advances for all or part of the necessary expenses
for training employees under the Government Employees Training Act.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title5/pdf/USCODE-2009-title5-partIII-
subpartC-chap41-sec4109.pdf
2. 5 USC 5524a, “Advance payment for new appointees” – Regulations that allow the head
of each agency to make advance payments of basic pay, covering not more than two pay
periods, to new appointees.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title5/pdf/USCODE-2009-title5-partIII-
subpartD-chap55-subchapIII-sec5524a.pdf
3. 5 USC 5927, “Advances of pay” – Employee pay, up to three months, may be paid in
advance to an employee upon the assignment of the employee to a post in a foreign area.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title5/pdf/USCODE-2009-title5-partIII-
subpartD-chap59-subchapIII-sec5927.pdf
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4. 14 USC 2943, “Leasing and hiring of quarters; rental of inadequate housing” – Advance
payment for rent of housing facilities in foreign countries.
http://uscode.house.gov/
5. 31 USC 501, “Office of Management and Budget”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleI-chap5-subchapI-sec501.pdf
6. 31 USC 3726, “Payment for transportation” – Carrier or freight forwarder presenting a
bill for transporting an individual or property may be paid before an audit is conducted by
the General Services Administration. Payment for transportation ordered, but not
provided, may be recovered by deduction or other means.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title31/pdf/USCODE-2008-title31-
subtitleIII-chap37-subchapIII-sec3726.pdf
7. 33 USC 2712, “Uses of Fund” [in Subchapter I, “Oil Pollution Liability and
Compensation”].
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title33/pdf/USCODE-2008-title33-
chap40-subchapI-sec2712.pdf
8. 37 USC 403, “Basic allowance for housing” – Advance payments for basic allowance for
housing for members of the uniformed service.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title37/pdf/USCODE-2008-title37-chap7-
sec403.pdf
9. 37 USC 1006, “Advance payments” – Advance payments to members of the uniformed
service.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title37/pdf/USCODE-2011-title37-
chap19-sec1006.pdf
10. 49 USC 327, “Administrative working capital fund”.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title49/pdf/USCODE-2008-title49-
subtitleI-chap3-subchapII-sec327.pdf
11. 49 USC 328, “Transportation Systems Center working capital fund”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title49/pdf/USCODE-2011-title49-
subtitleI-chap3-subchapII-sec328.pdf
12. 41 CFR 301 - 304, "Federal Travel Regulation" – Providing travel advances to employees
on official travel.
http://www.gpo.gov/fdsys/pkg/CFR-2012-title41-vol4/pdf/CFR-2012-title41-vol4-
subtitleF.pdf
13. 50 USC 1431, "Authorization; official approval; Congressional action: notification of
committees of certain proposed obligations, resolution of disapproval, continuity of
session, computation of period".
In times of national defense, the President may authorize any agency that exercises
functions in connection with the national defense to make advance payments to
contractors when it is deemed that such action would facilitate the national defense.
Refer to the statute for dollar limits and approval requirements.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title50/pdf/USCODE-2011-title50-
chap29-sec1431.pdf
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7.11.8 Authorized Certifying Officers and Payment Approving Officials
Authorized Certifying Officers (ACOs) and Payment-Approving Officials (PAOs) are
responsible for examining and approving demands for payment in accordance with all applicable
laws and regulations, Coast Guard policies, and Treasury Department guidance. Title 31 USC
3325 assigns the authority to designate a disbursing official to the head of the executive agency
or to an officer or employee of the executive agency having written authorization from the head
of the agency. For the Coast Guard, these individuals have in turn re-delegated that authority to
officials at FINCEN and PPC for the purpose of certifying vouchers.
7.11.8.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to ACOs and PAOs:
1. 31 USC 3325, “Vouchers”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3325.pdf
2. 31 USC 3526, “Settlement of Accounts”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap35-subchapIII-sec3526.pdf
3. 31 USC 3528, “Responsibilities and relief from liability of certifying officials”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap35-subchapIII-sec3528.pdf
4. 5 CFR 1315, “Prompt Payment”.
http://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPayment/promptPayment_hom
e.htm
5. Government Accountability Office, Policy and Procedures Manual for Guidance of
Federal Agencies, Title 7, “Fiscal Guidance,” Chapter 8, “Settlement of Accounts and
Relief of Accountable Officers”.
http://www.gao.gov/products/149099
6. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4A, Chapter 3000, “Requirements for Scheduling Payments Disbursed by
the Bureau of the Fiscal Service”.
http://fms.treas.gov/tfm/vol1/v1p4ac300.html
7. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4A, Chapter 2000, “Overall Disbursing Rules for All Federal Agencies”.
http://fms.treas.gov/tfm/vol1/v1p4ac200.html
8. Department of Homeland Security, Financial Management Policy Manual (FMPM)
Section 3.4, Payables and Disbursements.
http://cfo-policy.dhs.gov/default.aspx
7.11.8.2 Responsibilities
Responsibilities relevant to designating officials, ACOs, PAOs, and SPS data entry operations
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may be found in Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.11 (Accounts Payable and
Disbursements).
7.11.8.3 Policy
7.11.8.3.1 Designation Requirements
1. All ACOs and PAOs shall be designated by FINCEN or PPC designating officials using
the Treasury Department’s designation forms and notification system.
2. All ACO and PAO designation requests shall be submitted for approval prior to the
revocation of the current designation.
3. In order to be considered for ACO designation, a candidate must belong to one of the
following groups:
a. Commissioned or warrant officer;
b. Chief and first class petty officer; or
c. Civilian employee, GS 7 or above.
4. Second class petty officers and above may be designated as PAOs for routine personnel
and military pay transactions; however, a PAO shall not be permitted to sign receiving
reports if he/she is also a procurement officer.
5. PAOs are not eligible for ACO designation.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.11, Procedure No. 7.11.1
(Disbursement Procedures) for detailed procedures related to PCC and FINCEN
designations.
7.11.8.3.2 Certification of Payments
Note: Nominees are prohibited from certifying vouchers prior to designation approval.
1. Prior to certification, payment vouchers shall be examined by an ACO/PAO to verify that
the information contained in each voucher is in agreement with all supporting
documentation.
2. The ACO shall certify vouchers for disbursement by examining transactions for legality
under the statutes and regulations governing various expenditures, and for validity under
general provisions of law.
3. In no instance shall ACOs or PAOs certify a payment to themselves. If an alternate ACO
has not been assigned, the voucher shall be forwarded to a FINCEN ACO for
certification.
4. All certified vouchers and documentation used to support values, reconciliations, and
adjustments shall be maintained in accordance with 5 CFR 1315 and DHS FMP 011.
5. ACOs must be redesignated every two years from the last Treasury acceptance date.
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6. Current authority to act as an ACO or PAO remains in effect until it expires or is
revoked.
7. For non-payroll PAOs only:
By 1 September of each year, commands shall identify to FINCEN those personnel who
are currently designated and will continue to be designated as PAOs for the duration of
the subsequent fiscal year.
8. FINCEN and PPC shall be notified when their respective ACO/PAOs are transferred or
terminated for any reason by commanding officers.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.11, Procedure No. 7.11.1, Step 5.3
(Certification of Payments) for detailed procedures.
7.11.8.3.3 Liability
1. ACOs are responsible and personally liable for the accuracy and legality of all payments
they approve that are made from Federal funds.
a. Accountability for public funds generally rests with the officer certifying vouchers for
payment. Title 31 USC 3528 states that an ACO is held accountable for, and is
required to make good to the United States, the amount of any illegal, improper, or
incorrect payment resulting from any false, inaccurate, or misleading certificate made
by the person, as well as for any payment prohibited by law or which did not
represent a legal obligation under the appropriation or fund involved.
b. If an outstanding liability remains as a result of a loss for which the ACO is liable,
and there is not a request for relief, or if relief is requested and denied, the ACO
becomes indebted to the United States for the amount involved. The Coast Guard
shall then initiate collection action against the ACO in accordance with the law.
c. The ACO’s performance evaluation (e.g., Officer Evaluation Report, Enlisted
Performance Evaluation, Civilian Performance Appraisal) may reflect the collection
action described in item 1b above.
2. PAOs have the same level of financial liability as ACOs. If a PAO erroneously certifies
a document or voucher to an ACO, which then results in an improper or illegal payment,
then the PAO is fully accountable and should expect to be required to reimburse the
Government for any financial loss, unless relief is granted.
7.11.9 Vendor and Contract Payments
The Coast Guard uses various methods to procure the goods and services needed to fulfill its
missions. Examples include contracts, task or delivery orders, purchase orders, Government
multiple award contracts (e.g., GSA Multiple Award Schedule), other Governmentwide
acquisition contracts (GWACs), Interagency Agreements (IAAs), Military Interdepartmental
Purchase Requests (MIPRs), and travel orders.
This Subsection deals specifically with contracts. Policies related to reimbursable agreements
may be found in Section 7.10 (Reimbursable Agreements). Policies related to travel cards may
be found in Subsection 7.11.12 (Government Travel Charge Cards).
COMDTINST M7100.3F
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The procurement process begins with the identification of a need for goods or services. The
requesting unit prepares a procurement request (PR) and a statement of work (SOW) and
forwards these documents to a contracting officer (KO). The KO awards contracts and purchase
documents to those vendors that provide the “best value” to the Federal Government in
accordance with all applicable laws and regulations. The Coast Guard uses COR progress
reports to document the inspection and acceptance of work performed under a contract, and
receiving reports to document the inspection and acceptance of goods or services received.
Note: Federal Acquisition Regulation (FAR) and the authorities listed below are the guiding
policies for the Coast Guard’s contracting and procurement activities. This Subsection is
intended to supplement, not replace, that policy.
7.11.9.1 Authorities
The following authorities relate specifically to vendor and contract payments:
1. Department of Homeland Security, Department of Homeland Security Acquisition
Manual (HSAM).
http://www.dhs.gov/xlibrary/assets/opnbiz/cpo_hsam.pdf
2. Department of Homeland Security, Department of Homeland Security Acquisition
Regulation (HSAR).
http://www.dhs.gov/xlibrary/assets/opnbiz/hsar.pdf
3. Department of Homeland Security, Acquisition Workforce Policy Number: 064-04-011,
Revision Number: 00, “Contracting Officer Warrant Program”.
https://www.dhs.gov/xlibrary/assets/foia/mgmt_directive_0740_2_contracting_officer_w
arrant_program.pdf
4. Department of Homeland Security, Acquisition Workforce Policy No. 064 04 003,
Revision 2, “Federal Acquisition Certification for Contracting Officer’s Representatives
and Appointment and Revocation”.
http://dhsconnect.dhs.gov/org/comp/mgmt/cpo/paw/Documents/AWF%20Training%20D
ocs/Certification-Related%20Docs/COR%20Policy%2006-04-
003%20(updated%20version).pdf
5. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
6. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
7.11.9.2 Responsibilities
7.11.9.2.1 Office of Procurement Policy and Oversight (CG-913)
Commandant (CG-913):
1. Develops, manages, oversees, and evaluates the policy and procedures for Coast Guard
acquisition, contracting, and procurement, including simplified acquisition and micro-
purchases.
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2. Implements the goals and priorities of the Head of the Contracting Activity (HCA),
including socioeconomic and competition goals, acquisition certification, and training.
3. Manages relevant CG-wide programs, including:
a. Acquisition Certification Program;
b. Acquisition Plan (AP);
c. Advance Acquisition Plan (AAP);
d. FPDS-NG Program;
e. Contracting Officer’s Warrant Program;
f. COR Program;
g. Contracting Office Review Program (CORP);
h. Ombudsman Program; and
i. Purchase Card Program.
7.11.9.3 Policy
1. The contracting officer (KO) shall ensure that vendor invoices and supporting
documentation for which they are responsible are captured in the financial system using
centralized invoicing, where the vendor uploads the invoice electronically (see
http://www.dcms.uscg.mil/directives) so they can be processed for payment. The KO can
also mail or e-mail invoices to FINCEN for processing.
2. The KO shall appoint a contracting officer’s representative (COR) who is appropriately
certified and has sufficient technical expertise to effectively monitor contract progress,
perform technical functions, and inspect and accept goods or services.
3. The COR appointment, along with the related roles and responsibilities, shall be
documented in a designation letter and signed by the KO.
4. All written documentation that establishes a vendor’s or contractor’s progress in
completing a contract shall be provided by the COR to the KO prior to approval or
certification of a vendor invoice for payment.
5. All goods and services (regardless of cost) provided by vendors and contractors shall be
inspected and documented in receiving reports and certified progress reports as final
acceptance.
6. All warrant authority for KOs shall be current, and the level of authority to initiate,
administer, and terminate contracts shall be proportional to the KO’s certification level,
work experience, and continuing professional education.
7. Contractors shall not be designated as KOs or CORs.
8. The purchasing officer, the authorizing officer, the KO, the COR, and the receiving clerk
shall maintain segregation of duties.
9. KOs shall obtain the requisite amount of refresher training and continuous professional
education in order to maintain their warrant authority certification as denoted in DHS
acquisition guidance. This applies to Office of Personnel Management General Schedule
COMDTINST M7100.3F
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positions denoted GS-1102, and includes Federal Acquisition Certification in Contracting
(FAC-C) at an appropriate level to support their warrant authority.
10. CORs shall obtain the requisite amount of refresher training and continuous professional
education, and KOs shall verify that their CORs have met these requirements prior to
assigning them a contract, or within 60 days of assigning a contract, as denoted in DHS
Acquisition Workforce Policy No. 064 04 003, Revision 2, “Federal Acquisition
Certification for Contracting Officer’s Representatives and Appointment and
Revocation”.
7.11.10 Purchase Cards
The Governmentwide commercial purchase card is the preferred method for purchases and
payments that do not exceed the micro-purchase threshold of $3,500, as defined in Federal
Acquisition Regulation (FAR) 2.101. Purchases and payments using the purchase card may be
made over the micro-purchase limit when authorized by the Head of the Contracting Activity
(HCA) or the HCA’s designee.
The Coast Guard uses purchase cards to expedite the acquisition of low-cost goods and services.
Purchase cards can be used as the payment mechanism against written task or delivery orders
(under defined conditions) up to the simplified acquisition threshold of $150,000, as defined in
the DHS Financial Management Policy Manual (FMPM). Purchase card use is prohibited as a
payment mechanism for oral orders against General Services Administration (GSA) or
Department of Defense (DOD) Email.
Purchase cards expedite vendor payment and invoice processing, while providing management
with comprehensive monthly reports and a thorough audit trail of all transactions. Vendors who
accept purchase cards process the transactions and receive funds from the purchase card issuer in
a manner similar to personal credit cards. The Coast Guard promptly pays for the purchases
upon receipt of charges from the purchase card issuer.
7.11.10.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to purchase cards:
1. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, Appendix B, “Improving the Management of Government Charge Card
Programs”.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
2. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.2, Part 3.2.2, “Purchase Card Manual”.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.2%2
0Part%203.2.2%20Purchase%20Card%20Manual.pdf
3. Department of Homeland Security, Department of Homeland Security Acquisition
Regulation (HSAR).
http://www.dhs.gov/xlibrary/assets/opnbiz/hsar.pdf
COMDTINST M7100.3F
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4. Department of Homeland Security, Management Directive 0760.1, “Purchase Card
Program”, October 2006.
http://www.dhs.gov/xlibrary/assets/foia/mgmt_directive_0760_1_purchase_card_progra
m.pdf
5. Department of Homeland Security, Management Directive 0740.2, “Contracting Officer
Warrant Program”, March 2004.
https://www.dhs.gov/xlibrary/assets/foia/mgmt_directive_0740_2_contracting_officer_w
arrant_program.pdf
6. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
7. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
7.11.10.2 Responsibilities
7.11.10.2.1 Office of Procurement Policy and Oversight (CG-913)
Commandant (CG-913):
1. Establishes policies, procedures, and training programs related to purchase cards.
2. Determines the appropriate number of purchase cards, cardholders, and purchase cards
per cardholder, and ensures that all transactions comply with the applicable guidance.
3. Ensures that approving officials (AOs) approve no more than 300 transactions per month
on a regular basis.
4. Ensures that no AO oversees more than seven cardholders.
5. Maintains cardholder records related to training, professional certification, and warrant
authority.
6. Enters all refresher training certificates received from cardholders into the Core
Accounting System (CAS).
7.11.10.2.2 Head of the Contracting Activity (HCA) or Designee
The HCA or the HCA’s designee:
1. Ensures that all supplies and services acquired with the purchase card are for official
Coast Guard purposes only; and
2. Establishes and maintains administrative controls to prevent unauthorized use of the
purchase card.
7.11.10.2.3 Cardholders
Cardholders:
1. Use their cards for purchases that are authorized by law or regulation and that are
necessary to accomplish the Coast Guard mission.
COMDTINST M7100.3F
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2. Ensure that the appropriate type and amount of funds are available for the purchase prior
to placing an order.
3. Adhere to the requirements of the DHS FMPM, Part 3.2.2, Appendix B, “Use of
Government Supply Sources,” which requires acquisition of supplies and services from
designated sources if they are capable of providing them at a competitive price and as
needed, and if they represent the best value to the Government.
4. Maintain accurate and complete documentation for all purchase card transactions.
5. Promptly review and reconcile the monthly statements from the purchase card issuer.
6. Formally and promptly dispute all inaccurate or fraudulent charges with the purchase
card issuer.
7.11.10.2.4 Approving Official (AO)
The AO:
1. Reviews and approves all of the transactions made by their designated cardholders. This
includes a detailed review of the supporting documentation (e.g., sales slips, itemized
receipts, and purchase requisitions).
2. Verifies that the Coast Guard has received and accepted the goods or services paid for
with purchase cards.
3. Ensures that their designated cardholders collect and maintain all required supporting
documentation.
4. Certifies the accuracy of each cardholder’s monthly reconciliations.
5. Requests increases or decreases in card purchase limits as needed.
7.11.10.3 Policy
The Coast Guard’s purchase card system is managed by the Office of Procurement Policy and
Oversight, Commandant (CG-913), which establishes policies for the appointment of credit-
worthy cardholders and AOs with appropriate authorization controls.
The Robert T. Stafford Act grants the authority to increase the micro-purchase threshold in
emergency situations such as natural disasters and terrorist acts.
1. Government purchase cards shall only be used in accordance with the DHS Purchase
Card Manual (Chapter 3, Section 3.2, Part 3.2.2 of the DHS Financial Management
Policy Manual (FMPM)) and other guidance, laws, or regulations as appropriate.
2. Purchase cards shall be used for all possible micro-purchases (as defined in
FAR Part 2.101).
3. Individuals with warrant authority shall use purchase cards as a method of payment for
goods or services as authorized by FAR Subpart 13.301(a) and up to their warrant
authority.
4. Large purchases shall not be split into smaller purchases to circumvent procurement
requirements or purchase authority limits.
COMDTINST M7100.3F
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5. Cardholders and AOs shall be Government employees. Specifically, Coast Guard
contractors shall not be designated as cardholders or as AOs.
6. To ensure proper segregation of duties, the same individual shall not be both a cardholder
and an AO within their hierarchy level.
7. A cardholder shall have only one purchase card account open at a time (exceptions to this
policy will be authorized, with DHS approval per DHS FMPM, Chapter 3, Section 3.2,
Part 3.2.2, Purchase Card Manual, by Commandant (CG-913) on a case-by-case basis).
8. A purchase card shall only be used by the cardholder whose name is embossed on the
card.
9. A purchase card shall not be used for unofficial and/or personal purchases.
10. Cardholders shall be held personally liable and/or subject to disciplinary action
(administrative action, restitution, or prosecution) for the use of the purchase card when
such use violates regulations.
11. Cardholders shall immediately notify their designated AO, Field Organization Program
Coordinator (FOPC), and servicing bank whenever their card is lost, stolen, or
compromised. The FOPC must follow established protocol ensuring Headquarters
notification.
12. A limited number of cardholders also have convenience checks. These shall only be used
as a last resort to pay for goods or services from vendors that do not accept purchase
cards. (When a convenience check is used, an additional processing fee is charged
against the cardholder’s account.)
13. Whenever an invoiced item is found to be incorrect, the cardholder shall contact the
vendor immediately and attempt to resolve the problem.
14. The AO shall certify the completeness and accuracy of statement reconciliations and
supporting documents within 14 calendar days of the cycle close date for all transactions.
15. Payments shall be made by Coast Guard in accordance with the Prompt Payment Act
and/or other applicable guidance.
16. All documents supporting the request, delivery, receipt, and final acceptance of goods or
services procured with purchase cards or convenience checks shall be maintained in
accordance with FAR 4.805. Examples of supporting documentation include purchase
requests; Purchase Card Transaction Worksheet, DHS Form 1501; sales slips; itemized
receipts; shipping documents; food service menus; and receiving reports.
17. Cardholders and AOs shall successfully complete all required purchase card training
requirements, including ethics training, stipulated by OMB, GSA, DHS, and the Coast
Guard. Cardholders, AOs, and FOPCs shall provide copies of completion certificates to
Commandant (CG-913).
7.11.10.3.1 GSA Purchase Card Restrictions
Under GSA restrictions, the purchase card may not be used for the following:
1. Long-term rental or lease of land or buildings;
2. Long-term leasing of parking spaces exceeding $2,500 per year;
COMDTINST M7100.3F
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3. Telephone services under GSA authority; (This does not include cell phones or pagers.)
4. Cash advances/transactions, unless specifically allowed by the component; and
5. Meals, beverages, lodging, vehicle rentals/leases, airline/bus/train/boat tickets, or other
travel expenses incurred while traveling under official Government orders. The
Government travel card should be used for these expenses.
7.11.10.3.2 DHS Purchase Card Restrictions
DHS prohibits cardholders from purchasing the following items:
1. Ammunition and weapons;
2. Gasoline, oil, repairs, tires, or other attachments/equipment, vehicle retrofit, and vehicle
maintenance for department-owned or commercially leased vehicles; (These should be
purchased using the Government fleet card.)
3. Legal services;
4. Lodging;
5. Personal convenience items (e.g., parking ticket fees, microwaves, fans, heaters);
6. Postage stamps;
7. Prepaid phone cards;
8. Private-sector temporary employees; and
9. Real estate services.
7.11.11 DHS Fleet Cards
The DHS fleet card is the preferred method of payment for fuel and services necessary to operate
and maintain vehicles, aircraft, boats, cutters, and motorized equipment in accordance with DHS,
Coast Guard, and Federal Acquisition Regulation (FAR) for micro-purchases and payments
when no DLA fuel purchasing program is available.
DHS fleet cards are for official Government business only. Under no circumstances is the card
to be used for personal purchases or as identification for personal purchases.
DHS fleet cards expedite vendor payment and invoice processing while providing management
with comprehensive monthly reports and a thorough audit trail. Vendors who accept the cards
process the transactions and receive funds from the card issuer in a manner similar to personal
credit cards. Coast Guard pays for the purchases upon receipt of charges from the card issuer.
The policies specified in this Subsection do not apply to expenses related to GSA “wet-leased”
vehicles (i.e., vehicles that come with a GSA lease fleet fuel card). However, these policies do
apply to any GSA “dry-leased” vehicle (i.e., one that does not come with a GSA lease fleet fuel
card) for which a DHS fleet card has been issued.
7.11.11.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to fleet cards.
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1. Prompt Payment Act. PL 97 177; 31 USC 3901-3907.
http://www.gpo.gov/fdsys/pkg/USCODE-2008-title31/pdf/USCODE-2008-title31-
subtitleIII-chap39.pdf
2. Executive Order 13423, “Strengthening Federal Environmental, Energy and
Transportation Management”, January 26, 2007.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
3. Federal Acquisition Regulation (FAR), Subpart 13.003, “Policy”.
http://www.acquisition.gov/
4. Federal Acquisition Regulation (FAR), Subpart 13.2, “Actions At or Below the Micro-
Purchase Threshold”.
http://www.acquisition.gov/
5. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, Appendix B, “Improving the Management of Government Charge Card
Programs”.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.2, Part 3.2.2, Appendix B, “Use of Government
Supply Sources”.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.2%2
0Part%203.2.2%20Purchase%20Card%20Manual.pdf
7.11.11.2 Responsibilities
7.11.11.2.1 Office of Procurement Policy and Oversight (CG-913)
Commandant (CG-913):
1. Ensures that the guidelines stated in the FAR and the Head of Contracting Activity
Governance Memorandum (HCA-GM 13.0-0) Purchases Using Simplified Acquisition
Procedures, October 2016, as they relate to the micro-purchase threshold, are followed.
2. Provides guidance on alternative methods available when a purchase will exceed the
micro-purchase limits.
3. Provides procurement guidance to the Coast Guard’s DHS fleet card program manager,
Commandant (CG-46).
7.11.11.2.2 Office of Energy Management (CG-46)
The Coast Guard’s DHS fleet card program manager, Commandant (CG-46):
1. Establishes policies, procedures, and training programs related to DHS fleet cards.
2. Determines the appropriate number of cards and ensures that all transactions comply with
the applicable guidance.
3. Maintains card records related to authorized card users, approving official delegations,
training, post-payment audit documentation, and warrant authority.
COMDTINST M7100.3F
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4. Ensures that all supplies and services acquired with the DHS fleet card are for official
Coast Guard purposes only.
5. Establishes and maintains administrative controls to prevent unauthorized use of the card.
7.11.11.2.3 Authorized Card Users
Authorized card users:
1. Use their DHS fleet cards for purchases that are authorized by law or regulation and that
are necessary to accomplish the Coast Guard’s mission.
2. Ensure that the appropriate type and amount of funds are available for the purchase prior
to placing an order.
3. Adhere to the requirements of the DHS FMPM, Part 3.2.2, Appendix B, “Use of
Government Supply Sources,” which requires acquisition of supplies and services from
designated sources if they are capable of providing them at a competitive price and as
needed, and if they represent the best value to the Government.
4. Maintain accurate and complete documentation for all card transactions.
7.11.11.2.4 Designated Card Reviewers
Designated card reviewers:
1. Promptly review and reconcile the monthly statements from the card issuer.
2. Formally and promptly, dispute all inaccurate or fraudulent charges with the office of the
fuel card program manager.
7.11.11.2.5 Approving Official (AO)
The AO:
1. Reviews and approves all of the transactions made by their designated DHS fleet card
users. This includes a detailed review of the supporting documentation (e.g., sales slips,
itemized receipts).
2. Certifies the accuracy of each card’s monthly reconciliations.
3. Requests increases or decreases in card limits, as needed, to the Assistant Organization
Program Coordinator (AOPC).
4. Provides documentation to FINCEN for all post-payment audit transactions selected for
audit by DHS.
7.11.11.3 Policy
1. DHS fleet cards shall only be used in accordance with DHS and Coast Guard policy,
along with other laws or regulations related to the Government fleet fuel card.
2. DHS fleet cards are only to be used to procure fuel and services for Government assets.
3. To ensure proper segregation of duties, the same individual shall not be both an
authorized card user, an AO, and/or a designated card reviewer.
COMDTINST M7100.3F
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4. Only one DHS fleet card per asset shall be assigned.
5. DHS fleet cards shall be used for official Government business only.
6. Lost, stolen or compromised cards shall be reported immediately to the issuing bank and
to the organizational program coordinator (OPC).
7. The AO shall certify the completeness and accuracy of statement reconciliations and
supporting documents within 14 calendar days of the statement’s issue date for all DHS
fleet card transactions.
8. Payment for DHS fleet card transactions shall be made by Coast Guard in accordance
with the Prompt Payment Act.
9. Coast Guard personnel requiring a DHS fleet card shall successfully complete all
required training (including ethics training) stipulated by OMB, GSA, DHS, and the
Coast Guard. Card users and AOs shall retain proof of compliance with any mandatory
training requirements for audit purposes.
7.11.12 Government Travel Charge Cards
The Travel and Transportation Reform Act of 1998 stipulates that the Government travel charge
card (GTCC) shall be used by all Federal Government personnel, both military and civilian, to
pay for official travel expenses. The GTCC program was established to reduce the need to
provide Government travelers with transportation tickets and cash travel advances and to
avoiding having travelers use personal funds to pay for items such as lodging, meals, vehicle
rental, and transportation costs. For non-cardholders and for instances where mandatory use of
the GTCC has been exempt, the program provides centrally billed accounts (CBAs) for common
carrier transportation, and a travel advance option to provide funds for official travel expenses.
Official expenses include those related to temporary duty (TDY) and permanent change of
station (PCS). Official travel expenses are authorized for reimbursement in accordance with the
Joint Travel Regulations (JTR) for military members or the Federal Travel Regulation (FTR) for
civilian employees.
In addition to travel charge cards, the Coast Guard has travel debit cards, which are described in
Government Travel Charge Card (GTCC) Program Policies and Procedures, COMDTINST
M4600.18 (series). The purpose of the travel debit card is to provide a means of paying
emergency advance travel funds in cases where the GTCC is not available, time does not allow
for the use of the routine travel advance process, and the lack of a travel advance would cause
financial hardship on the traveler. The travel debit cards replace the Coast Guard traveler checks
and will only be deployed at selected units.
7.11.12.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to the GTCC:
1. Travel and Transportation Reform Act of 1998. PL 105-264.
http://www.gpo.gov/fdsys/pkg/PLAW-105publ264/pdf/PLAW-105publ264.pdf
COMDTINST M7100.3F
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2. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, Appendix B, “Improving the Management of Government Charge Card
Programs”.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
3. Department of Defense, Per Diem, Travel and Transportation Allowance Committee,
Joint Travel Regulations (JTR), Volume 1.
http://www.defensetravel.dod.mil/site/travelreg.cfm
4. General Services Administration, Federal Travel Regulation (FTR).
http://www.gsa.gov/portal/content/102886
5. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Chapter 3, Part 3.2.1, “Travel Card Manual”.
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.2%2
0Part%203.2.1%20Travel%20Card%20Manual.pdf
6. Coast Guard Supplement to the Joint Federal Travel Regulations (CGS-JFTR),
COMDTINST M4600.17 (series).
http://www.dcms.uscg.mil/directives
7. Government Travel Charge Card (GTCC) Program Policies and Procedures,
COMDTINST M4600.18 (series).
http://www.dcms.uscg.mil/directives
8. Government Travel Charge Card (GTCC) Policies, COMDTINST 4600.14 (series).
http://www.dcms.uscg.mil/directives
7.11.12.2 Responsibilities
Commandant (PSC-BOPS-r) has overall program management responsibility for the Coast
Guard travel charge card program.
7.11.12.3 Policy
Government Travel Charge Card (GTCC) Program, COMDTINST 4600.14 (series) is the
guiding policy for Coast Guard travel and debit cards. This Subsection is meant to refer readers
to that policy, not to replace it.
7.11.13 Coast Guard Investigative Service (CGIS) Debit Cards
Title 14, United States Code, Section 944 provides that "not more than $45,000 per annum
appropriated for the operation of the Coast Guard shall be available for investigative expenses of
a confidential character, to be expended on the approval or authority of the Commandant, and
payment to be made on his certificate of necessity for confidential purposes, and his
determination shall be final and conclusive upon the accounting officers of the government."
These confidential investigative (CI) expenses are unique to law enforcement and allow for
CGIS to gather information and evidence during investigations that could not otherwise be
obtained. The following policy and procedures provide a new CI process using debit cards that
COMDTINST M7100.3F
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allows for a clear and repeatable process, providing needed financial and management (internal)
controls, and auditable documentation to properly account for and use this statutory authority.
7.11.13.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to CGIS Debit Cards:
1. Title 14 USC § 944 “Confidential investigative expenses”.
http://uscode.house.gov/
2. Coast Guard Investigations Manual, COMDTINST M5527.1 (series).
http://www.dcms.uscg.mil/directives
3. Department of the Treasury, Bureau of the Fiscal Service, U.S. Debit Card Program
https://www.fiscal.treasury.gov/fsreports/ref/ussgl/approved_scenarios/approved_scenari
os.htm
4. Title 31 USC § 3524 “Auditing expenditures approved without vouchers”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap35-subchapIII-sec3524.pdf
5. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, Section 140 “Reports on Unvouchered Expenditures”.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Memorandum of Understanding between U.S. Department of Treasury, Bureau of the
Fiscal Service, and the U.S. Department of Homeland Security regarding the U.S. Debit
Card Program, dated NOV 2011.
7.11.13.2 Responsibilities
Responsibilities relevant to CGIS Debit Cards may be found in Financial Resource Management
Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.11,
Procedure No. 7.11.2 (CGIS Debit Card Procedures).
7.11.13.3 Policy
CGIS Debit Card Program will only be utilized in accordance with these policies and
procedures—including those authorities incorporated by reference - for approved Confidential
Informant (CI) expenses.
This document is applicable to all of CGIS; including CGIS staff members, debit cardholders,
Debit Card Program administrators and managers.
No debit cards will be funded without confirmation of fund availability, a valid obligation and an
approved and documented CI fund request.
CI-related debit card transactions may only be performed by debit card holders issued the JP
Morgan Chase (JPMC) debit card and authorized to use it.
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7.11.14 Imprest Funds
The Coast Guard establishes imprest funds to pay for goods, services, expenses incurred, and
emergency travel advances in situations where cash is the most practical or only acceptable form
of payment. Imprest funds consist of currency, coins, and checks advanced to designated
custodians for cash disbursements that generally fall into two categories:
1. Small individual purchases of goods or services; and
2. Larger purchases of fuel, subsistence, and port services covered by waiver for cutters
deployed outside the continental United States.
U.S. Coast Guard Certifying and Disbursing Manual, COMDTINST M7210.1 (series), is the
guiding policy for Coast Guard imprest funds. This Subsection is meant to supplement, not
replace, that manual, by emphasizing important policies and procedures and directing financial
managers to the appropriate sources for imprest fund questions.
7.11.14.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2. The
following authorities relate specifically to imprest funds:
1. 31 USC 3321, “Disbursing authority in the executive branch”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap33-subchapII-sec3321.pdf
2. Department of the Treasury, Bureau of the Fiscal Service, “Imprest Funds Policy
Directive”, November 9, 1999.
http://www.fms.treas.gov/imprest/regulations.html
3. Department of the Treasury, Bureau of the Fiscal Service, Manual of Procedures and
Instructions for Cashiers (Cashier’s Manual), April 2001.
http://www.fms.treas.gov/imprest/cashiers_manual.pdf
4. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4A, Chapter 3000, “Requirements for Scheduling Payments Disbursed by
the Bureau of the Fiscal Service”.
http://www.fms.treas.gov/tfm/vol1/v1p4ac300.html
5. Department of Homeland Security, Department of Homeland Security Acquisition
Manual, (HSAM).
http://www.dhs.gov/xlibrary/assets/opnbiz/cpo_hsam.pdf
6. U.S. Coast Guard Certifying and Disbursing Manual, COMDTINST M7210.1 (series).
http://www.dcms.uscg.mil/directives
7. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
8. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
COMDTINST M7100.3F
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7.11.14.2 Responsibilities
7.11.14.2.1 FINCEN
1. The Comptroller Division:
a. Administers the appointment of imprest fund cashiers.
b. Receives the monthly reports (e.g., cash balance/reconciliations) that are scanned into
WINS.
2. The Miscellaneous Team of the Payables Branch:
a. Processes the replenishment of funds.
b. Maintains relevant supporting documentation.
7.11.14.3 Policy
1. Imprest funds shall be used to make cash payments for authorized purchases which will
subsequently be charged to a specific appropriation.
2. Imprest funds are to be routinely established only on behalf of floating units. Shore units
may request the temporary establishment of imprest funds in support of unusual or
unforeseen events, such as disaster relief operations. The need for an imprest fund is
decided on the basis of savings to the Government, not on convenience.
3. Units desiring the establishment of an imprest fund shall notify the Comptroller Division
at FINCEN via a letter signed by the unit commanding officer.
4. When the unit commanding officer, FINCEN, or Commandant (CG-84) determine that an
imprest fund should be closed (e.g., no further need exists for the fund), it must be
disestablished without delay. U.S. Coast Guard Certifying and Disbursing Manual,
COMDTINST M7210.1 (series), provides the guidance and internal controls necessary
for disestablishing the fund.
5. Active imprest funds shall have one principal cashier and one alternate cashier at all
times.
6. Nominations of unit personnel to serve as principal cashiers or alternate cashiers shall be
sent to the Comptroller Division at FINCEN in a letter signed by the unit commanding
officer. Commanding officers must allow 30 days’ notice for requesting a change in
cashier.
7. FINCEN shall approve or reject all imprest fund applications and nominations. Approval
shall be documented by means of a Request for Change or Establishment of Imprest
Fund, OF 211.
8. Persons nominated to be principal cashiers or alternate cashiers shall not perform these
duties until the unit commanding officer has received FINCEN’s formal approval.
9. Imprest funds shall be maintained separately from other funds and shall not be used for
personal purposes (e.g., loans) or to circumvent procurement regulations.
10. An approved Advance of Funds Application and Account, Form SF 1038, must be
obtained before any cash or travelers checks can be disbursed.
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11. Individual imprest fund payments shall not exceed $500, except for:
a. Payments covered by an imprest fund waiver for cutters deployed OCONUS, to allow
for the purchase of fuel, subsistence items, and port services. Waivers are only to be
requested when no other procurement instrument will be accepted by the vendor.
Requests for a waiver must be made in writing to the applicable Chief of Contracting
Office (COCO) through Commandant (CG-913), with copies to FINCEN (CC) and
Commandant (CG-84).
b. Special authorization due to unforeseen or emergency circumstances, issued by the
applicable Chief of Contracting Office (COCO) through Commandant (CG-913),
with copies to FINCEN (CC) and Commandant (CG-84).
12. Principal cashiers and alternate cashiers shall disburse funds for the exact amount noted
on approved documents – up to $500 – unless a waiver or special authorization applies
(see item 10 above).
13. Principal cashiers and alternate cashiers shall record all disbursements and shall maintain
all subvouchers and supporting documentation.
14. Replenishment requests shall require a two-week lead time for cutters. Exceptions may
be made for emergencies.
15. Principal cashiers and alternate cashiers shall be held personally responsible for all losses
resulting from negligence or lack of due diligence.
16. Commanding officers shall appoint an audit board to perform random audits of imprest
funds on a quarterly basis. The audit board shall notify the commanding officer of any
physical losses or deficiencies identified during the audit.
17. To ensure proper segregation of duties, the commanding officer, contracting officer,
principal cashier, alternate cashier, and authorized certifying officer shall be separate
individuals. In addition, none of these individuals shall be members of the audit board.
18. A monthly reconciliation and validation shall be performed for each imprest fund, using
appropriate source documentation, to validate and support the reported asset balances.
Any identified abnormal balances shall be promptly researched and corrected.
19. Reconciliation packages shall be reviewed for completeness and accuracy. The packages
shall include:
a. Documentation, such as the reconciliation coversheet, summary level reports for in-
balance and out-of-balance items, replenishment requests, imprest fund disbursement
support, etc.
b. Reports that support the values of the imprest fund;
c. Any identified abnormal balances, along with actions taken to correct them; and
d. A signed certification letter.
20. All documentation used to support values, reconciliations, and adjustments shall be
maintained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series).
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7.11.15 Grant Liabilities
Grants are a broad form of financial assistance extended to State and local governments and to
non-governmental recipients, including nonprofit organizations. Grants are legal instruments
used when the principal purpose of the financial assistance is the transference of funds to the
recipient (awardee) in order to accomplish a public purpose of support or stimulation authorized
by Federal statute.
Grants are not mechanisms by which the Coast Guard acquires property or services for the direct
benefit of the Coast Guard. Grants are used when the principal purpose of the award is to
support recipient activity when no substantive involvement by the Coast Guard is anticipated.
When grants are employed, the recipients are required to submit certain reports and to follow
certain procedures which are expressly stated as provisions of the grant agreement. The Coast
Guard dictates these provisions and provides oversight and monitoring, but not substantial
involvement.
The Coast Guard grants funds to nonprofit organizations, for-profit enterprises, and Government
entities, when such grants are used to further a Coast Guard mission (i.e., boating safety, port
security, first responders, and environmental preservation). Grants liabilities are recognized
from these grant agreements.
The majority of Coast Guard grant agreements are with U.S. States and Territories, to promote
boating safety. These are funded through appropriations supplemented by fuel excise taxes on
motorboats, small engines and fishing equipment. The Coast Guard also manages grants to
nonprofit entities involved in boating safety endeavors. Finally, the Coast Guard works closely
with DHS to administer its Port Security Grant Program.
Funds for the Boating Safety program are appropriated annually by Congress and transferred
from the Sport Fish Restoration and Boating Trust Fund account. Commandant (CG-831)
prepares and Apportionment and Reapportionment Schedule, Form, SF 132 to make the trust
funds available for obligation. Depending on the specific annual appropriation and transfers, the
amount of project grant funds that may be awarded each year varies. Within the guidelines of
the Federal Boat Safety Act of 1971, funds awarded under the National Nonprofit Organization
Recreational Boating Safety Grant Program are discretionary.
The Code of Federal Regulations (CFR) 2 CFR Part 200, Grants and Agreements, is the primary
guidance for the Coast Guard Boating Safety Grant Program. This Subsection is meant to
supplement, not replace this guidance by emphasizing important policies and procedures for
financial managers."
7.11.15.1 Authorities
The following authorities deal specifically with grants related to Boating Safety:
1. The Federal Boat Safety Act of 1971 (recodified as 46 USC 4301-4311).
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partB-chap43.pdf
2. 2 CFR 200 Uniform Administrative Requirements, Cost Principles, And Audit
Requirements For Federal Awards.
https://www.law.cornell.edu/cfr/text/2/part-200
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3. 2 CFR 225 Cost Principles for State, Local, and Indian Tribal Governments (OMB
Circular A-87).
https://www.gpo.gov/fdsys/granule/CFR-2012-title2-vol1/CFR-2012-title2-vol1-
part225/content-detail.html
4. Federal Accounting Standards Advisory Board, Accounting and Auditing Policy
Committee, Technical Release No. 12, Accrual Estimates for Grant Programs, August
2010.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Office of Management and Budget, Circular A-102, Grants and Cooperative Agreements
with State and Local Governments, August 1997.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Office of Management and Budget, Circular A-133, Audits of States, Local Governments,
and Non-Profit Organizations.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7.11.15.2 Responsibilities
The following offices and personnel have specific responsibilities relating to grants:
1. Office of Resource Management, Commandant (CG-83): delegates budget authority to
program offices to provide funding for grants.
2. Office of Budget Development, Commandant (CG-DCO-82): responsible for budgeting
and execution of funding for State grants.
3. Director of Prevention Policy, Commandant (CG-5P): serves as the director of the
Grants Program.
4. Chief, Boating Safety Division, Commandant (CG-BSX-2): oversees the Office of
Boating Safety.
5. Branch Manager, Grants Management Branch, Commandant (CG-BSX-24): oversees the
management of grants.
6. Grant Program Administrator (GPA): manages the nonprofit grants.
7. Grant Technical Manager (GTM): an expert assigned to the grant who coordinates all
grant activity with the grant recipient.
8. Financial Management Specialist: records and obligates funds for the Office of Boating
Safety and the Grants Management Branch.
9. FINCEN: processes subsequent disbursements per written requests from GPAs.
7.11.15.3 Policy
Commandant (CG-831) prepares for DHS and OMB review and approval an Apportionment and
Reapportionment Schedule, Form SF 132, for the Boating Safety appropriation. A copy of the
Apportionment and Reapportionment Schedule, Form SF 132, is provided to the Grant Program
Administrator.
COMDTINST M7100.3F
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1. The values specified in the appropriation warrants received by Commandant (CG-83)
shall be used to determine the funds available for programs and projects, including
grants.
2. Program offices receiving the warrants from Commandant (CG-83) shall record the
values for these obligations and provide notification to FINCEN for needed
disbursements for grants.
3. Each CG-sponsored grant shall have a grant program administrator (GPA) and a grant
technical manager (GTM) assigned to administer and manage the grant. The GPA and
the GTM shall receive periodic program status and financial status reports from the grant
recipients.
4. The GPA and the GTM shall establish and maintain files to properly store and safeguard
supporting documents for grants awards and grants liabilities. These documents shall be
maintained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series).
5. The Coast Guard shall estimate the accruals for unreported grantee expenditures using
historical disbursement information. Grants liabilities shall be included within the
Accounts Payable line item on the Coast Guard’s Balance Sheet.
6. The Core Accounting System (CAS) general-ledger balance amount for grants liabilities
shall be the difference between the total grants awarded and the grants disbursements at
period end.
7. All documentation used to support values, reconciliations, and adjustments shall be
maintained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series). These documents shall be made available for internal
review and audit upon request.
7.11.16 Reimbursable Agreements
The Economy Act of 1932, as amended, and codified in 31 USC 1535, permits Federal
Government agencies to purchase goods or services from other Federal Government agencies or
from other major organizational units within the same agency.
The term “reimbursable agreement” (RA), also known as “intragovernmental agreement,” refers
to a written agreement between two Federal agencies, or between major organizational units
within an agency, which specifies the goods to be furnished or services to be rendered by one
agency (the servicing agency) in support of the other (the requesting agency). RAs between
Federal agencies are called “interagency agreements” (IAAs), while those between components
of the same agency are called “intra-agency agreements.” IAAs also include Military
Interdepartmental Purchase Requests (MIPRs); Pollution Removal Funding Authorizations
(PRFAs); and mission assignments (MAs), such as those issued by FEMA in times of national
emergency.
This Subsection specifically addresses policies related to RAs in which the Coast Guard acts as
the servicing agency by providing goods or services to a requesting agency that will later
reimburse the Coast Guard. This Subsection does not apply to instances where the Coast Guard
procures goods or services from other Federal agencies. Such situations involve procurement
COMDTINST M7100.3F
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actions and are processed in the same manner as all other procurements involving obligation of
funds by a warranted contracting officer.
Most RAs are funded, meaning that budget authority has been received prior to incurring any
costs related to the RA. In times of national emergency, however, RA-related costs may be
incurred before the corresponding budget authority has been received. During this time, the RA
is said to be “unfunded.”
Once a signed RA is in place, the Coast Guard allocates appropriated funds to obtain the raw
materials and incur the expenses (e.g., labor and travel) associated with the production of goods
or services. The Coast Guard compiles all costs incurred and bills the other entity after their
receipt and final acceptance of the goods and services. For additional guidance on RAs, see
Section 7.10 (Reimbursable Agreements) of this Manual. Also see United States Coast Guard
Reimbursable Management Process Guide, Version 2.0, at the following link:
http://www.dcms.uscg.mil/directives.
7.11.16.1 Authorities
General authorities relevant to payables and disbursements are listed in Subsection 7.11.2. The
following authorities relate specifically to RAs:
1. 31 USC 1535, “Agency agreements”. [Commonly referred to as the Economy Act of
1932.]
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1535.pdf
2. 31 USC 1536, “Crediting payments from purchases between executive agencies”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleII-chap15-subchapIII-sec1536.pdf
3. Federal Acquisition Regulation (FAR), Subpart 17.5, “Interagency Acquisitions,”
Subsection 17.502-2, “The Economy Act”.
https://www.acquisition.gov/sites/default/files/current/far/pdf/FAR.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 30, Inter-Entity Cost Implementation Amending
SFFAS 4, Managerial Cost Accounting Standards and Concepts, August 2005.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
6. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume 1, Part 2, Chapter 4700, Appendix 10, “Intragovernmental Transaction (IGT)
Guide”.
http://tfm.fiscal.treasury.gov/v1.html
7. Department of Homeland Security, Department of Homeland Security Acquisition
Manual (HSAM), Subchapter 3017.5, “Interagency Acquisitions Under the Economy
Act”.
http://www.dhs.gov/xlibrary/assets/opnbiz/cpo_hsam.pdf
COMDTINST M7100.3F
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8. Coast Guard Acquisition Procedures (CGAP), Subchapter 3017.5, “Interagency
Agreements under the Economy Act”.
http://www.dcms.uscg.mil/directives
9. Reimbursable Standard Rates, COMDTINST 7310.1 (series).
http://www.dcms.uscg.mil/directives
10. United States Coast Guard Reimbursable Management Process Guide, Version 2.0.
http://www.dcms.uscg.mil/directives
7.11.16.2 Responsibilities
7.11.16.2.1 Office of Resource Management (CG-83)
Commandant (CG-83) delegates the authority for signing reimbursable agreements.
7.11.16.2.2 Funds Control Division (CG-831)
Commandant (CG-831):
1. Carries out the reimbursable program by designating a reimbursable program manager to
oversee the overall program, along with appropriation managers to oversee the
reimbursable program within their respective appropriations.
2. Estimates the amount of appropriated funds needed for RAs and includes this amount in
the annual Coast Guard budget submission.
3. Analyzes and allocates appropriated funds to approved RA projects.
4. Establishes “hard controls” over appropriated funds used for RAs to ensure that the funds
are properly managed in accordance with laws and regulations (e.g., ensuring that no
costs are incurred in violation of the Antideficiency Act).
5. Ensures adherence to all of the requirements of the appropriate legal authority for the
action (e.g., the Economy Act or other specified act, OMB Circular A-11, other
applicable circulars and directives).
7.11.16.2.3 Financial Analysis & Execution Division (CG-832)
Commandant (CG-832) analyzes historical cost information to calculate standard rates for the
personnel and equipment used to provide goods and services under RAs.
7.11.16.3 Policy
1. Agencies that request Coast Guard goods or services shall prepare a draft RA or IAA,
along with a Statement of Work (SOW) or a Memorandum of Agreement (MOA) and/or
a Memorandum of Understanding (MOU), to allow the Coast Guard to determine if the
proposed RA is appropriate. The RA and SOW (or equivalent) shall outline the terms
and conditions which are to be negotiated and finalized with the responsible Coast Guard
program office.
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Note: Some supply orders such as MILSTRIPs are reimbursable, although MILSTRIPs
are generally not treated as formal RAs or IAAs; however, program managers must still
ensure that the requested supplies are appropriate and in line with Coast Guard
authorities.
2. Directorate officials shall ensure that all IAAs, MOAs, and MOUs are consistent with the
mission and goals of the Coast Guard.
3. The responsible Coast Guard program office shall select a qualified individual to serve as
program manager (PM) to provide oversight and managerial support.
4. Coast Guard contractors shall not be designated as PMs.
5. The resource staff shall prepare a change in financial plan (CIFP) to request an allocation
of budget authority for the RA.
6. Each ATU involved in RAs shall establish procedures that account for and properly
manage all direct and indirect costs.
7. Any re-delegation of responsibility shall be in writing.
8. All documentation used to support RAs shall be maintained in accordance with
Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
7.11.17 Revolving Funds
Revolving funds are authorized by specific provisions of law to finance a continuing cycle of
business-type operations. Once established they are meant to be “self-sustaining” funds,
financed through customer charges for the services or materials provided. Civilian or military
personnel may purchase items from the revolving fund, depending on the purpose and type.
Many revolving funds are initially established by an appropriation and are subsequently managed
so that they break even. Receipts are credited directly to the revolving fund as offsetting
collections and are available for expenditure without further action by Congress. The revenue
earned by a revolving fund is used to procure additional services and materials which are then
purchased by the fund’s customers. Therefore, revolving funds generally do not need annual
appropriations from Congress.
A special type of revolving fund is the trust revolving fund, which is authorized by law as a
revolving fund but also designated as a trust fund. Otherwise, trust revolving funds are the same
as revolving funds.
The Coast Guard maintains two major revolving funds:
1. Supply Fund:
This fund provides financing for a continuous cycle of procurement and sale of clothing,
food, fuel, and general stores items. Supply Fund inventory generally includes low-cost,
high-turnover consumable items and repetitive-use items.
2. Yard Fund (which includes the Industrial Fund):
This fund finances the industrial operations of the Coast Guard Yard. The Yard provides
services such as construction, repair, and alteration of vessels for the Coast Guard and
other Government agencies. The customers pay the Yard for these services from their
COMDTINST M7100.3F
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respective appropriations. Charges to the customer by the Yard are based upon recovery
of the total industrial cost of performing the work.
The Supply and Yard funds set prices for goods and services that include all direct and
indirect costs and ensure a “break even” financial basis. (Direct costs include raw
materials and labor. Indirect costs include depreciation and employee benefits.)
7.11.17.1 Authorities
The following authorities relate specifically to revolving funds:
1. 14 USC 939, “Accounting for industrial work”.
http://uscode.house.gov/
2. 14 USC 941, “Coast Guard Supply Fund”.
http://uscode.house.gov/
3. 31 USC 9701, “Fees and charges for Government services and things of value”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleVI-chap97-sec9701.pdf
4. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 1500, Section 1520.45, “Revolving Fund Accounts”.
http://www.fms.treas.gov/tfm/vol1/v1p2c150.html
5. Department of Defense, Defense Logistics Agency, Military Standard Requisitioning and
Issue Procedures (MILSTRIP), DLM 4000.25 1.
http://www2.dla.mil/j-6/dlmso/elibrary/manuals/dlm/dlm_pubs.asp#MILSTRIP
6. Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19 (series).
http://www.dcms.uscg.mil/directives
7.11.17.2 Responsibilities
The following offices and personnel have specific responsibilities related to revolving funds.
7.11.17.2.1 Office of Logistics Management (CG-44)
Commandant (CG-44) is the program manager for logistics management of the Yard fund
(which includes the Industrial Fund). Responsibilities include:
1. Establishing policies and procedures related to logistics management.
2. Facilitating the procurement of goods or services using Military Standard Requisitioning
and Issue Procedures (MILSTRIP).
3. Maintaining logistics interfaces with other Government agencies.
7.11.17.2.2 Funds Control Division (CG-831)
Commandant (CG-831) is the program manager for the Supply Fund. Responsibilities include:
1. Establishing procedures for Supply Fund units.
2. Facilitating the apportionment of supply funds with OMB and FINCEN.
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3. Facilitating the reporting of Supply Fund transactions.
7.11.17.3 Policy
1. The Supply Fund and the Yard Fund shall establish procedures that account for and
properly manage all procurement and related liability transactions.
2. To ensure proper segregation of duties, different individuals shall be employed in the
supply management, procurement, receiving, and funds disbursement processes.
3. Revolving funds managers shall prepare annual budgets to establish the appropriate rates
to charge customers.
4. Revolving funds managers shall prepare monthly inventory and accounting reports.
5. Reconciliations performed by revolving fund managers shall be submitted each month to
the appropriate financial managers, whether or not there is activity in the revolving fund
for that month.
6. Entities desiring Supply Fund or Yard Fund goods or services shall prepare a
reimbursable agreement (RA), Military Interdepartmental Purchase Request (MIPR),
MILSTRIP (see number 8 below), or purchase requisition detailing the goods to be
purchased and/or services to be rendered, in accordance with Federal, DHS, and Coast
Guard policies, rules, and regulations.
7. The Supply Fund or the Yard Fund shall provide the requested goods or services upon
receipt of an RA, MIPR, MILSTRIP, United States Coast Guard Yard Program Order,
Form CGY-75, or purchase requisition signed by authorized personnel from the
requesting entity and the Coast Guard.
8. A MILSTRIP message shall be prepared with the Federal Supply System (FSS) or DoD’s
Electronic Mall (EMALL) to initiate the reorder process for the replenishment of
depleted supply stocks. Additional paperwork shall be prepared for depot-level
reconditioned items or for items without national stock numbers (NSNs). The
contracting and procurement policies and procedures noted in Chapter 2 of Supply Policy
and Procedures Manual (SPPM), COMDTINST M4400.19 (series), shall be followed for
all procurements.
9. ALMIS, NESSS, Configuration Management plus (CMplus), or the Fleet Logistics
System (FLS) shall be used to prepare MILSTRIP order messages with FSS or EMALL.
10. All goods requested by MILSTRIP messages shall be inspected, and the final acceptance
shall be documented in receiving reports.
11. All MILSTRIP messages, receiving reports, and invoices shall be maintained in
accordance with the certification and disbursement policies and procedures under the
Uniform Material Movement and Issue Priority System (UMMIPS), noted in sections 2-C
and 3-H of the Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19
(series).
12. All documentation used to support revolving fund values, reconciliations, and
adjustments shall be maintained in accordance with Information and Life Cycle
Management Manual, COMDTINST M5212.12 (series).
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7.11.18 Coast Guard Trust Funds
The Coast Guard has been given authority by law, appropriations, or through reimbursable
agreements, to utilize trust fund dollars to respond to oil spills, hazardous substance cleanup
events, and significant disasters. The National Pollution Funds Center (NPFC) has fiduciary
responsibility to manage these trust funds. The NPFC provides up front protection by certifying
that oil-carrying vessels have the financial ability to pay compensation in case of an oil spill.
When spills occur, the NPFC provides funding for quick response, compensates claimants for
cleanup costs and damages, and takes action to recover costs from responsible parties.
In 1990 Congress passed the Oil Pollution Act (OPA) to help address a wide range of issues
associated with preventing, responding to, and paying for oil pollution. Title 1 of OPA
establishes oil spill liability and compensation requirements, including the Oil Spill Liability
Trust Fund (OSLTF) to help facilitate cleanup activities and compensate for damages from oil
spills. The two primary components of the OSLTF are the Principal Fund and the Emergency
Fund. The Principal Fund is the source of funds for third-party claims and annual appropriations
to Federal agencies. The Emergency Fund is financed by a recurring $50 million budget
annually. The President has the authority under OPA Title I to authorize up to $50 million each
year to the Emergency Fund (70X8349) without Congressional appropriation, to fund removal
activities and to initiate natural resource damage assessments (NRDAs).
The NPFC is responsible for administering the Coast Guard’s portion of the Superfund, which
was created by the Comprehensive Environmental Response, Compensation, and Liability Act of
1980 (CERCLA) to fund the cleanup of hazardous substances.
The NPFC also administers pollution-related disaster funds under the Stafford Act, which
provides Federal assistance to State and local governments impacted by a significant disaster or
emergency, such as a hurricane or terrorist act.
7.11.18.1 Authorities
General authorities relevant to purchasing and payables are listed in Subsection 7.11.2.
The following authorities relate specifically to trust funds:
1. Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977.
33 USC 1251-1387, “Water Pollution Prevention and Control”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title33/pdf/USCODE-2011-title33-
chap26.pdf
2. Maritime Transportation Security Act of 2002. PL 107-295.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ295/pdf/PLAW-107publ295.pdf
3. 16 USC 777, “Federal-State Relationships” [in Chapter 10B, “Fish Restoration and
Management Projects”].
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title16/pdf/USCODE-2011-title16-
chap10B-sec777.pdf
4. 26 USC 9504, “Sport Fish Restoration and Boating Trust Fund”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-
subtitleI-chap98-subchapA-sec9504.pdf
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5. 26 USC 9509, “Oil Spill Liability Trust Fund”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title26/pdf/USCODE-2011-title26-
subtitleI-chap98-subchapA-sec9509.pdf
6. 33 USC 2701, et. seq., “Oil Pollution Liability and Compensation”.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title33/pdf/USCODE-2011-title33-
chap40-subchapI.pdf
7. The Federal Boat Safety Act of 1971 (recodified as 46 USC 4301-4311).
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title46/pdf/USCODE-2011-title46-
subtitleII-partB-chap43.pdf
7.11.18.2 Responsibilities
Overall responsibilities relevant to accounts payables, disbursements, and purchases are found in
Subsection 7.11.3.
7.11.18.3 Policy
7.11.18.3.1 Payables
1. Coast Guard/NPFC shall ensure rapid and effective response to oil spills under Coast
Guard authority.
2. Funds from OSLTF may be used to:
a. Provide for immediate removal activities and initiate natural resource damage
assessments (NRDAs); and
b. Recover costs from responsible parties (RPs).
3. Funds authorized in the current fiscal year are available until expended.
4. The Maritime Transportation Security Act of 2002 provides authority to advance up to
$100 million from the Principal Fund to the Emergency Fund as needed.
5. The NPFC Director shall have authority to use funds from the Emergency Fund
(70X8349) for Federal On-Scene Coordinators (FOSCs) to respond to discharges and for
Federal trustees to initiate NRDAs.
6. FOSCs shall have authority to obligate funds and to direct the efforts of Federal, State,
and local organizations.
7. Under the Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, Section 302 (c), OSLTF funds may be authorized to clean up oil discharges or to
prevent or mitigate substantial threats of oil discharge to navigable waters, adjoining
shorelines, and the waters of the exclusive economic zone.
8. NPFC and FINCEN standard operating procedures shall contain procedures for the
execution of oil spill response funding.
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7.11.18.3.2 Claims
1. A third party who has been adversely affected by an oil spill may be eligible for
compensation through the OSLTF Claims Fund (70X8312), provided that supporting
documentation is submitted to NPFC.
2. NPFC processes and adjudicates third party claims including but not limited to natural
resource damage, removal costs, property damage, loss of profits, loss of subsistence,
loss of government revenue, and increased public services.
a. OPA defines the conditions under which third parties may be compensated for OPA
costs and damages.
b. After claims payments are authorized by NPFC, they are expended by FINCEN out of
the OSLTF Claims Fund (70X8312). Upon payment, FINCEN applies to Treasury
for reimbursement transfer of budget authority from OSLTF (70X8185) to OSLTF
Claims account (70X8312). The budget authority transfer is documented with a
CIFP.
c. NPFC and FINCEN standard operating procedures shall contain procedures for the
adjudication of claims and the processing of payments.
3. All documentation used to support values, reconciliations, and adjustments shall be
maintained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series). These documents shall be made available for internal
review and audit upon request.
7.11.18.3.3 Sport Fish Restoration and Boating Trust Fund
Policy for the Sport Fish Restoration and Boating Trust Fund is discussed in Subsection 7.11.15
(Grant Liabilities).
7.12 Intragovernmental Payment and Collection (IPAC)
Intragovernmental Payment and Collection (IPAC) transactions consist of payments or
collections initiated through the Treasury-based IPAC system to settle the exchange of goods and
services between different Government agencies. The primary purpose of the IPAC application
is to provide a standardized interagency fund transfer mechanism for Federal program agencies
(FPAs). IPAC facilitates the intragovernmental transfer of funds, with descriptive data from one
FPA to another. To meet the President’s directives, IPAC should be used as the method of
settling all intergovernmental transactions. This will minimize the need for issuing checks to
other Government agencies in order to settle obligations. The IPAC process only pertains to the
movement of funds between Government agencies, not to private vendors. Any Government
agency with access to the IPAC system can initiate payments, collections, or adjustments.
The IPAC system processes cash disbursements and cash collections between Government
agencies; however, adjustments can only be made by the agency that received the IPAC
transaction. The transaction is only available for adjustment for 90 days. After that time, the
IPAC transaction must be charged back to the originating agency.
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7.12.1 Authorities
1. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Transmittal Letter No. 619.
http://www.fms.treas.gov/tfm/vol1/tl.html
2. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 4000, Intra-Governmental Payment and Collection (IPAC)
System.
http://tfm.fiscal.treasury.gov/v1/p6/c400.pdf
3. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Bulletin No. 2006-09, “Intra-governmental Payment and Collection (IPAC)
System – Treasury Account Symbol (TAS)/Business Event Type Code (BETC)
Reporting”.
https://www.fms.treas.gov/tfm/vol1/06-09.html
4. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume 1, Part 2, Chapter 4700, Appendix 10, “Intragovernmental Transaction (IGT)
Guide”.
http://tfm.fiscal.treasury.gov/v1/p2/c470.pdf
5. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Bulletin No. 2007-06, “Intra-governmental Payment and Collection (IPAC)
System – Treasury Account Symbol (TAS)/Business Event Type Code (BETC)
Reporting”.
http://www.fms.treas.gov/tfm/vol1/07-06.html
7.12.2 Policy
1. When other Government agencies initiate a collection from the Coast Guard’s Agency
Location Code (ALC), the transaction shall be recorded on the Coast Guard’s accounting
records as a credit to cash. Conversely, when the Coast Guard initiates a collection from
another agency’s ALC, the transaction shall be recorded as a debit to cash.
2. When other Government agencies initiate a payment to the Coast Guard’s ALC, the
transaction shall be recorded as a debit to cash. Conversely, when the Coast Guard
initiates a payment to another agency’s ALC, the transaction shall be recorded as a credit
to cash.
3. Coast Guard contracting officers (KOs) shall include in documents authorizing
interagency procurements all information necessary for their accounting and
reconciliation within IPAC. To accomplish this, KOs shall ensure that Military
Interdepartmental Purchase Requests (MIPRs) or other supporting documentation
including Interagency Reimbursable Work Authorizations (IRWAs), Claims, and/or
Interagency Agreements (IAAs) supporting such transactions include all necessary data
for IPAC processing, as discussed in more detail below. In addition, the authorizing
documents shall indicate that the obligation will be settled through the use of IPAC
processing.
4. To minimize confusion, the normal procedure shall be to follow the contracting
document guidelines pertaining to payment. However, in the absence of such guidelines,
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the performing agency will initiate the IPAC collection after approval has been received
from the KO or other approved authorizing official. Initiating IPAC payments to the
performing agency is useful in cases where charges need to be reviewed and/or approved
prior to the transfer of funds. Whether the performing agency is to initiate an IPAC
collection, or the Coast Guard is to initiate an IPAC payment, the procedure should be
clearly stated in the authorizing document.
5. Reimbursable Agreements and MIPRs shall state that the KO will receive and approve a
copy of the vendor’s invoice prior to the processing of the IPAC collection by a
performing agency, or the IPAC payment by a receiving agency. If the authorizing
document states that the receiving agency (Coast Guard) is to initiate the IPAC payment,
the approved bill must be stamped “US Coast Guard to Initiate IPAC Payment” and sent
to the Coast Guard Finance Center. The appropriate ALC (typically FINCEN) must also
be provided on the authorizing document for those documents to be paid from Coast
Guard funds.
6. Any documents which pertain to the IPAC process should be forwarded to the
appropriate ALC. For FINCEN, these documents should be forwarded to the following
address:
COMMANDING OFFICER (OGQ)
US COAST GUARD FINANCE CENTER
1430A KRISTINA WAY
CHESAPEAKE VA 23326-8916
This address should also be included on the authorizing document.
All incoming IPACs undergo a daily quality review process. Any IPAC that does not contain
the data required as outlined in Financial Resource Management Manual – Procedures (FRMM-
P), COMDTINST M7100.4 (series), Chapter 7, Section 7.12, Procedure No. 7.12.1
(Intragovernmental Payment and Collection (IPAC) Procedures) will be immediately charged
back to the initiating agency.
7.13 Accrual Policy
Accrual policies define which transactions require an accrual, when the accruals shall be
recorded, if and when the accruals shall be reversed, and how to prepare and document an
estimated accrual. A simple depiction of the role of accruals in the document transaction cycle is
shown in Table 7.5 below.
Table 7.5 Transaction Life Cycle for the Use of Budgetary Resources
Commitment Obligation Accrual Payment
Procurement Request Obligation Document Receipt of Goods/Services Invoice
USSGL 470000 USSGL 480100 USSGL 490100 USSGL 490200
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Commitment Obligation Accrual Payment
Travel order
Contract
Receiving report
Accrued payroll through
month-end
Completion of travel
although not vouchered
Payment of invoice
Payment of civilian
and military pay
Payment of travel
voucher
Accruals used for financial reporting that do not have a budgetary impact are covered in other
financial policies. Examples include depreciation, contingent liabilities, actuarial liabilities,
unfunded annual leave, and allowances for inventory.
Ongoing, continuous liabilities for civilian pay and benefits are calculated by the organizations
responsible for the processing of various pay and benefits, as well as liabilities associated with
the withholding of payroll for taxes, employee share of benefit costs, or other monies due to the
Government.
See Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.13 (Accrual Policy) for the document types that require an accrual
based on the transaction and the timing of the events.
Note: Refer to Section 7.13 (Accrual Policy) of this Manual for additional information on
accruals.
For detailed responsibilities and procedures for recording accruals of budgetary resources, refer
to Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.13 (Accrual Policy).
7.13.1 Purpose
This Section specifies policy for recording accruals of budgetary resources for all Coast Guard
CG) funds. This policy:
1. Establishes the baseline for entering accruals in the system of record and for the
development of financial statements for each reporting period;
2. Identifies which document types require accruals;
3. Provides documentation requirements to support estimates and actual accrual balances;
and
4. Provides guidelines for developing estimates that will pass reviews resulting from
financial statement audits.
7.13.2 Authorities
1. Federal Financial Management Improvement Act of 1996. PL 104-208.
http://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
2. Improper Payments Elimination and Recovery Act of 2010. PL 111-204.
http://www.gpo.gov/fdsys/pkg/PLAW-111publ204/pdf/PLAW-111publ204.pdf
3. Improper Payments Information Act of 2002. PL 107-300.
http://www.gpo.gov/fdsys/pkg/PLAW-107publ300/pdf/PLAW-107publ300.pdf
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4. PL 84-863, 70 Stat 782, “Amendments to the Budget and Accounting Procedures Act of
1950”.
http://www.gpo.gov/fdsys/pkg/STATUTE-70/pdf/STATUTE-70-Pg782.pdf
5. 31 USC 3512 (e). Mandates accrual accounting for all Federal agencies.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31-
subtitleIII-chap35-subchapII-sec3512.pdf
6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Concepts (SFFAC) No. 5, Definition of Elements and Basic Recognition
Criteria for Accrual-Basis Financial Statements.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
7. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 4200, “Agency Reporting on Unexpended Balances of
Appropriations and Funds (Federal Agencies’ Centralized Trial-Balance System II, FMS
2108: Year-End Closing Statement)”.
http://tfm.fiscal.treasury.gov/v1/p2/c420.html
7.13.3 Responsibilities
7.13.3.1 Assistant Commandant for Resources (CG-8)/Chief Financial Officer
(CFO)
Commandant (CG-8)/CFO:
1. Establishes policy on recording and estimating accruals.
2. Establishes internal controls to verify that accruals are recorded and estimated in
accordance with the established authorities and policies.
7.13.3.2 Office of Resource Management (CG-83)
Commandant (CG-83):
1. Implements, maintains, and monitors the execution of this accrual policy.
2. Implements procedures to verify the reliability of estimated accruals, including accruals
developed by personnel outside of the Commandant (CG-8) organization.
3. Specifies the type of document and its manner of entry into the financial system to record
budgetary accruals.
7.13.3.3 Finance Center (FINCEN)
FINCEN maintains the CG accrual accounting principles, standards, and procedures prescribed
by the Assistant Commandant for Resources (CG-8) to reflect the currency, accuracy and
completeness of the fiscal activities.
7.13.3.4 Allowance, Target, and Program Element Managers:
1. Implement, maintain, and monitor the execution of this accrual policy.
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2. Report accruals in accordance with the authorities and policies in this Section.
7.13.3.5 Program Offices
Program offices implement the proper procedures and ensure reliable computation of accrued
expenses.
For detailed responsibilities on recording accruals of budgetary resources for all Coast Guard
funds, refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 7, Section 7.13 (Accrual Policy).
7.13.4 Policy
1. Accruals shall be recorded based on financial events (e.g., receipt of goods or services,
contract progress performance, rents, or utilities due to others). These transactions shall
move an undelivered order unpaid to a delivered order unpaid in the Coast Guard
accounting system of record, and shall, ultimately, be reflected in the financial
statements.
2. The Coast Guard shall record an accrued liability and Delivered Orders – Obligations,
Unpaid for costs incurred for all document types shown in Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series),
Chapter 7, Section 7.13 (Accrual Policy).
3. Financial events shall be recorded in the official system of record to support the actual
status of funds and costs incurred in the financial statements of each reporting period.
4. The financial events requiring accruals shall be entered for the reporting periods as
shown in the following table:
Table 7.6 Reporting Periods for Financial Events Requiring Accruals
Financial Transaction Quarterly Year-End
Receipt of Goods or Services X X
Pay and Benefits X X
Travel X X
Transportation of Things X X
Rents; Communications; Utilities X X
Interagency Agreements X X
Grants X X
Government Purchase Cards X X
Other Liabilities X X
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5. Whenever possible, accruals shall be based on documents that support the amounts and
timing of the accrual. Coast Guard personnel shall send these documents to the
accounting office in time for normal processing prior to any cutoff dates. The following
guidelines shall be followed for recording accruals:
a. Receipt and acceptance documents shall be used when they are available.
Commandant (CG-83) shall implement procedures to expedite the forwarding of
these documents to the accounting office, the property office (for entry into an
integrated property system), or other responsible organization, such as a project or
program office (for entry into the accounting system).
b. The respective payroll processing offices shall develop payroll accruals based on the
documentation available. Accruals shall be estimated and recorded for the cost of
benefits (both employee and employer portions), accrued leave, and accrued salary
earned but not paid. The payroll processing offices shall use estimates of pay and
benefits, earned but not paid, based on prior period history.
c. The travel office shall use travel orders to enter accruals for travel that has been
completed, but not paid, by the end of a reporting period. If a summary amount is
entered, the travel office shall support the summary amount with individual travel
orders that provide subsidiary support to the entry.
d. Unpaid bills of lading that have been received by a Coast Guard location shall be sent
by the receiving organization to the Coast Guard component funding the action. Each
component shall implement procedures to track these documents and verify that they
have been received.
e. Coast Guard allowance managers, target managers, and program element managers
who manage rental or service provider agreements shall accrue any amounts that are
owed but not paid. Monthly or other periodic payment amounts are typically due the
day after the end of the month (for monthly agreements) or the day after the
performance period as designated in the contract or agreement.
6. Estimates shall be received in time to be entered into the system of record for each
reporting period (quarterly and year-end).
7. Use of government purchase cards (GPCs) shall be limited at year-end to increase the
accuracy of the estimates for accurate charging of goods or services to the appropriate
fiscal-year funds.
8. Documentation of the accuracy of estimates and the results of performance metrics shall
be made available to the independent financial auditors.
7.13.4.1 Estimating Accruals
1. Financial managers shall use estimates whenever the exact amount of the financial event
cannot reasonably be determined and the event will require the use of budgetary
resources (e.g., foreign payments made by the State Department). Estimates shall be
supported by easily accessible documentation. Financial managers shall develop
documentation to state and support the assumptions, analyses, projections, or other basis
(such as expert determined amounts). All estimates shall identify the basic assumptions
used, the controls in place, and the source of the data used to develop the accrual
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amounts. Financial managers shall not develop and post accruals on estimates that are
not based on historical, statistical, or expert determinations. Estimates shall be recorded
in the accounting system and subsequently adjusted when actual information is available.
2. Estimates provided by contractors or subject matter experts shall be used when the
contractor or subject matter experts have access to data that provides a reasonable
assurance as to the amount of the accrual. Contractors shall be held responsible to
provide accurate estimates that are based on a valid historical or statistical basis and as
required in the contract language. All estimates shall be compared to the actual amounts
when they are available in the subsequent period, and the estimation methodology shall
be adjusted to improve accuracy, whenever necessary.
3. Analysis of historical data is acceptable as a method of developing accrual estimates.
The analysis shall account for impacts such as fluctuations in demand, changes in
temperature or climate, changes in mission requirements, or activity life cycle.
4. Projections shall be developed in a structured manner, and shall be based upon
statistically valid samples. Statistical formulas shall be based upon known industry
standards and previously approved methodologies (such as Government Accountability
Office (GAO) tools), or upon an approach that has been verified by comparison to actual
data gathered in a subsequent period.
5. Estimated use of goods or services may be provided by the requester of the goods or
services if the requester or project manager has knowledge of the amount, timing, and
quality of the activity that requires an accrual in the accounting system. The person
developing the estimate shall have programmatic knowledge and/or experience with the
goods or services provided; however, informed opinion may be used as a last resort when
relevant and reliable historical or statistical data is not available. The process used to
develop the estimate shall be documented and retained so that adjustments can be made
to the methodology after the actual amounts have been received.
6. Accruals for contingent liabilities shall be based upon a legal or contractual determination
that a liability has been incurred by a court or legal proceeding, general counsel review,
or direction from an authorized Federal agency (e.g., Equal Opportunity Commission).
Generally, contingent liabilities shall not be recorded unless a payment amount has been
determined to be more likely than not, and budgetary resources shall be used to fund the
payment.
7. Following are criteria for developing estimates when actual costs are not known:
a. Estimates shall only be used when there is an absence of invoices or receiving
reports.
b. Officials responsible for estimated amounts shall document assumptions used for the
estimate. The data used shall be relevant and reliable.
c. Statistically supportable methods for projections shall be used, based on available
data.
d. Subject matter experts shall provide credentials or relevant experience to establish
their competency to develop the estimate and the projection method used.
e. Analysis of historical data and expert opinions shall include a review of improvement
in technologies that affect the accuracy of an estimate.
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f. Estimates shall conform to applicable accounting principles and standards.
g. The accounting principles and standards used and the gathering and analysis of data
relevant to internal controls shall be documented.
h. The office responsible for the accrual shall compare estimates to actual costs in the
subsequent period, and shall make adjustments to the accrual model, as necessary, to
improve accuracy.
7.14 Imputed Costs
SFFAS No. 4, Managerial Cost Accounting Standards and Concepts, requires full cost reporting
for material costs. Accordingly,
1. The Coast Guard shall report the full cost of operations in its financial statements. This
includes recognizing an imputed financing source for the difference between the actual
payment (if any) and the full cost.
2. Commandant (CG-842) shall lead efforts to identify and record imputed costs that need
to be reported in accordance with FASAB standards.
7.15 Unclaimed Monies
The unclaimed monies account, Payment of Unclaimed Moneys (20X6133), was established to
hold such monies in trust for rightful owners (as received by Government agencies from sources
outside the Government). This Section has three major objectives with regard to unclaimed
monies and account 20X6133:
1. To ensure that the Coast Guard analyzes the uninvested trust, revolving, and deposit fund
accounts quarterly to determine whether there are unclaimed monies that may be
refunded to the depositor;
2. To ensure that the Coast Guard maintains subsidiary ledgers in support of monies being
held for rightful owners in account 20X6133; and
3. To ensure that the Coast Guard maintains a file of paid disbursement voucher forms and
supporting documentation for account 20X6133.
This Section applies to all Coast Guard components that handle unclaimed monies belonging to
individuals, businesses, and other entities.
7.15.1 Authority
Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 3000, “Payment of Unclaimed Moneys and Refund of Moneys
Erroneously Received and Covered”, September 2000.
http://tfm.fiscal.treasury.gov
7.15.2 Responsibilities
The following office and personnel have specific responsibilities related to unclaimed monies.
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7.15.2.1 Finance Center (FINCEN)
FINCEN shall initiate action to clear balances that have been held for more than one year in the
uninvested trust, revolving, and deposit fund accounts. These balances represent monies held for
rightful owners whose whereabouts are unknown.
7.15.3 Policy
1. Items cleared from agency uninvested trust, revolving, and deposit fund accounts for
transfer to account 20X6133 must meet all four of the following conditions:
a. The amount is $25.00 or more;
b. A refund, upon claim, would be absolutely justified;
c. There is no doubt as to the legal ownership of the funds; and
d. A named individual, business, or other entity can be identified with the monies.
Refer to the Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial
Manual (TFM), Volume I, Part 6, Chapter 3000, Section 3020 for policy regarding the
quarterly review of Unclaimed Money Accounts.
7.16 Actuarial Liabilities – Military Entitlement Programs
This Section prescribes the accounting principles, policy, and related requirements to record
transactions for entitlement programs established for Coast Guard military personnel.
7.16.1 Overview
Entitlements are legally established benefits available to any person or unit of government
meeting eligibility requirements established by law. Authorizations for entitlements constitute a
binding obligation on the part of the Federal Government, and eligible recipients may have legal
recourse if the obligation is not fulfilled. Legislation authorizing entitlements does not
necessarily include a corresponding appropriation of funds, and, thus, the subsequent enactment
of appropriations may be necessary.
Entitlement programs are divided into three categories according to the events that give rise to
benefit payments:
1. Payments based on individual eligibility.
When the program is administered by a Federal agency, entitlement benefits based on
individuals meeting eligibility requirements of a program shall be recorded as a liability
and as an expense when the eligibility requirements are met (as determined by program
officials). The liability and expense shall cover all payments expected to be made during
the current period of eligibility. Payments made to recipients shall reduce the recorded
liability.
2. Payments required by law.
When payments are authorized (through appropriation and allotment of funds) for
disbursement pursuant to legal requirements with no specific action required of the
recipients, a liability and expense shall be recorded when the funds are appropriated and
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allotted to the applicable program managed. The liability and expense shall cover the
amount to be disbursed. As payments are made, the liability shall be reduced.
3. Reimbursable events.
When payments are based on the occurrence of a specific event for which costs are
reimbursable under an entitlement program, a liability shall be recorded when the event
occurs. If the reimbursement is based on end-of-period reports from program
administrators, an estimated amount shall be accrued at the end of a reporting period.
SFFAS No. 5, Accounting for Liabilities of the Federal Government, requires Federal agencies to
accrue a contingent liability for the existence of past events or transactions that require a
probable future outflow of resources when the amount of the liability can be reasonably
estimated. Also, SFFAS No. 4, Managerial Cost Accounting Standards and Concepts, and
Office of Management and Budget (OMB) Circular A-25, Transmittal Memorandum #1, User
Charges, require Federal agencies to include unfunded expenses in the costs of goods and
services they provide.
The Coast Guard Military Retirement System (MRS) is a non-contributory, defined-benefit plan
that provides 1) pay for retired members of the Coast Guard (both active and reserve
components) and retired lighthouse keepers; 2) annuities for Survivor Benefit Plan (SBP)
beneficiaries; and 3) benefits for retirees, retiree dependents, and eligible survivors of deceased
active duty members and retirees. The plan is a pay-as-you-go system funded through annual
appropriations that remain available until expended (no-year funds). The actuarial unfunded
accrued liability reported on the Balance Sheet is determined by subtracting the sum of the
present value of future employer normal costs, the present value of any expected future
employee contributions, and any plan assets from the present value of the future benefits
expected to be paid to the current members of the plan. Currently, there are no plan assets or
employee contributions required, so the accrued liability is the present value of future benefits
expected to be paid, less the present value of future employer normal costs. The normal cost
(current period expense) is computed using the individual entry age normal actuarial cost
method.
A portion of the accrued MRS liability is for the health care of non-Medicare-eligible and
Medicare-eligible retirees and survivors. The Department of Defense (DOD) is the
administrative entity for the Medicare-Eligible Retiree Health Care Fund (MERHCF), and, in
accordance with SFFAS No. 5, Accounting for Liabilities of the Federal Government, is required
to recognize the liability on the MERHCF’s financial statements.
The Coast Guard makes annual payments to the MERHCF for current active duty and reserve
military members. Benefits for Coast Guard members who retired prior to the establishment of
the MERHCF are provided by payments from the Treasury to the MERHCF. The future cost
and liability of the MERHCF are determined using claim factors and claims cost data developed
by DOD, adjusted for Coast Guard retiree and actual claims experience. The Coast Guard uses
the current-year actual costs to project costs for all future years unless the DoD has released the
following year’s MERHCF rates.
The total value of the Coast Guard’s MRS and Military Health System (MHS) actuarial liabilities
is material to the consolidated financial statements of the Department of Homeland Security
(DHS). An independent auditor, under contract with the DHS Office of Inspector General
(OIG), reviews the Coast Guard’s actuarial liabilities during DHS’s annual financial statements
audit.
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The Coast Guard employs an actuary who, as a member of the American Academy of Actuaries
and an enrolled actuary, has satisfied the qualifications set forth in the regulations of the Joint
Board for the Enrollment of Actuaries and has been approved by the Joint Board to perform
actuarial services under the Employee Retirement Income Security Act (ERISA) of 1974. The
actuary is responsible for analyzing and certifying the accuracy of liability reports and
experience studies and providing audit support services. The Coast Guard also procures an
actuarial services contractor (“consultant”) to assist the actuary in providing actuarial support
services, which include analyzing data, producing reports and studies, and calculating estimated
MRS and MHS liabilities.
For definitions, detailed responsibilities and procedures regarding the calculation, recording, and
reporting of actuarial accrued liabilities, contributed actuarial accrued liability amounts to the
Military Retirement System (MRS) and Military Health System (MHS) programs, and selection
of discount rates and valuation dates, refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.16 (Actuarial
Liabilities).
7.16.2 Authorities
7.16.2.1 Regulations for Contract Solicitation and Administration
1. 5 CFR 1315, “Prompt Payment”, Final Rule, September 29, 1999.
http://fms.treas.gov/prompt/regulations.html
This Federal regulation governs the payment for contractor invoices.
2. 48 CFR Chapter 1, Federal Acquisition Regulation (FAR).
https://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR
The FAR is the basic comprehensive regulation for Federal acquisition management.
3. Department of Homeland Security, Department of Homeland Security Acquisition
Manual (HSAM).
https://www.dhs.gov/sites/default/files/publications/HSAM%20through%20Notice%202
016-01.pdf
This regulation provides uniform procedures for the acquisition of supplies and services
within DHS.
4. Coast Guard Acquisition Procedures (CGAP).
http://www.dcms.uscg.mil/directives
This regulation provides procurement policy and guidance specific to the Coast Guard.
7.16.2.2 Laws that Establish the Pay and Benefits for Coast Guard Military
Personnel
The following laws establish the pay and benefits for Coast Guard military personnel, and are
monitored for changes that might affect the year-end actuarial data files prepared by the Pay and
Personnel Center (PPC).
1. National Defense Authorization Act (NDAA).
www.congress.gov/public-laws
PL 114-92 is the NDAA for Fiscal Year 2016. Changes to armed forces personnel pay
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and benefits in the NDAA are applicable to Coast Guard military personnel, retirees, and
SBP annuitants.
2. Title 10 USC – Armed Forces.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title10/pdf/USCODE-2009-title10.pdf
Sections of this title relating to armed forces personnel policies, pay, and benefits are
applicable to Coast Guard military personnel and SBP annuitants.
3. Title 14 USC – Coast Guard.
http://uscode.house.gov/
This title addresses Coast Guard retirement, including the authorization for retirement
and limitations on retirement and retired pay.
4. Title 37 USC – Pay and Allowances of the Uniformed Services.
http://www.gpo.gov/fdsys/pkg/USCODE-2009-title37/pdf/USCODE-2009-title37.pdf
This title is applicable to Coast Guard officer and enlisted personnel.
7.16.2.3 Guidance for Preparing Actuarial Data Files
The following provides technical guidance for preparing data files for the actuary and the
consultant.
Medical Funds Execution Desk Guide, U.S. Coast Guard.
\\hqs-nas-t-001\DCMS\DCMS-8\DCMS-83\DCMS-831\AFC-57\SOP Desk Guide
This desk guide, promulgated by the Deputy Commandant for Mission Support, Pay & Benefits
Execution Division (DCMS-831), outlines the procedures for preparing and reviewing medical-
related cost data files.
Note: Actuary will coordinate with the Pay and Personnel Center (PPC) who are owners of
Coast Guard’s military payroll system Direct Access to ensure actuarial data files are prepared in
accordance with this guidance and meets laws and regulations.
7.16.2.4 Regulations for Calculating Actuarial Liabilities
The following regulations provide technical guidance for calculating actuarial liabilities.
1. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of The Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
This accounting standard provides the actuary and the consultant with descriptions of
Federal Government pension and ORB benefits and guidance on the use of attribution
methods, assumptions, and accounting treatments.
2. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 33, Pensions, Other Retirement Benefits, and Other
Postemployment Benefits: Reporting the Gains and Losses from Changes in Assumptions
and Selecting Discount Rates and Valuation Dates, October 2008.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
This accounting standard requires the Coast Guard to either make use of a full yield curve
in its measurements of actuarial liabilities or determine that the use of a single discount
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rate will not produce a material difference in those liabilities. A full yield curve displays
multiple discount rates based on the year in which the future cash flow is expected to
occur. In practice, a single discount rate is used that generates the exact same present
value of discounted cash flows as the full yield curve, separately for MRS and MHS.
3. Internal Revenue Service, Revenue Ruling 2003-83.
http://www.irs.gov/pub/irs-irbs/irb03-30.pdf
This ruling discusses whether the aggregate entry age normal method for calculating
actuarial liabilities is a reasonable funding method within the meaning of the Internal
Revenue Code. Coast Guard is not bound by IRS rules but the Revenue Ruling provides
useful guidance.
4. Actuarial Standards Board, Actuarial Standard of Practice (ASOP) No. 4, Measuring
Pension Obligations and Determining Pension Plan Costs or Contributions, December
2013.
http://www.actuarialstandardsboard.org/wp-content/uploads/2013/12/asop004_173-3.pdf
5. Actuarial Standards Board, Actuarial Standard of Practice (ASOP) No. 6, Measuring
Retiree Group Benefits Obligations and Determining Retiree Group Benefits Program
Periodic Costs or Actuarially Determined Contributions, May 2014.
http://www.actuarialstandardsboard.org/wp-content/uploads/2015/04/asop006_177-3.pdf
6. Actuarial Standards Board, Actuarial Standard of Practice (ASOP) No. 23, Data Quality,
December 2004.
http://www.actuarialstandardsboard.org/pdf/asops/asop023_141.pdf
7. Actuarial Standards Board, Actuarial Standard of Practice (ASOP) No. 27, Selection of
Economic Assumptions for Measuring Pension Obligations, September 2013.
http://www.actuarialstandardsboard.org/wp-content/uploads/2014/02/asop027_172.pdf
8. Actuarial Standards Board, Actuarial Standard of Practice (ASOP) No. 35, Selection of
Demographic and Other Noneconomic Assumptions for Measuring Pension Obligations
September 2014.
http://www.actuarialstandardsboard.org/wp-content/uploads/2014/02/asop035_1781.pdf
7.16.2.5 Regulations for Recording and Reporting Actuarial Liabilities
The following regulations provide instructions for recording the Coast Guard’s actuarial
liabilities in the general ledger (GL) and reporting them in the DHS Annual Financial Report
(AFR).
1. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
Paragraphs 56-96 provide guidance for recording and reporting actuarial liabilities for
pension and ORB.
2. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 33, Pensions, Other Retirement Benefits, and Other
Postemployment Benefits: Reporting the Gains and Losses from Changes in Assumptions
and Selecting Discount Rates and Valuation Dates, October 2008.
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http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
This accounting standard requires DHS to separately display the Coast Guard’s gains and
losses from changes in long-term assumptions for pension and ORB on the Statement of
Net Cost. It also requires disclosure of the components of the Coast Guard’s pension and
ORB expenses in the notes to the DHS AFR.
3. Federal Accounting Standards Advisory Board, Interpretation of Federal Financial
Accounting Standards No. 3, Measurement Date for Pension and Retirement Health Care
Liabilities, August 1997.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
This FASAB interpretation requires that pension and health care liabilities reported under
SFFAS No. 5 be measured as of the end of the fiscal year.
4. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
This circular provides form and content guidance for agency and Governmentwide
financial statement reporting.
5. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 4700, “Agency Reporting Requirements for the Financial
Report of the United States Government.”
http://tfm.fiscal.treasury.gov/v1.html#Part%202
This Section details the reporting requirements using Treasury’s Governmentwide
Financial Report System (GFRS) and the Governmentwide Treasury Account Symbol
Adjusted Trial Balance System (GTAS).
6. Department of the Treasury, Bureau of the Fiscal Service, U.S. Government Standard
General Ledger, Supplement No. S2 Treasury Financial Manual (series).
https://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm
Updated annually, this supplement defines the United States Standard General Ledger
(USSGL) accounts and posting logic for Government agency transactions, and provides
USSGL account crosswalks to the financial statements.
7. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Chapter 3, Section 3.5, Part 1-6, “Actuarial Liabilities.”
http://cfo-
policy.dhs.gov/FMPM%20Table%20of%20Contents%20for%20PDFs/Section%203.5%2
0-%20Liabilities.pdf
This Section outlines DHS policies for calculating, reviewing, and reporting actuarial
liabilities.
8. Department of Homeland Security, Chief Financial Officer, Component Requirements
Guide for Financial Reporting (series).
http://cfo-policy.dhs.gov/default.aspx
Updated annually, this guide provides detailed financial reporting guidance to DHS
components.
9. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
This Manual prescribes policies and procedures for the lifecycle management of paper
and electronic documents and data.
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7.16.3 Responsibilities
7.16.3.1 DHS Office of Financial Management (OFM)
1. Provides financial reporting policy and guidance to department components; and
2. Uses the trial balance data submitted by the Coast Guard to produce both the Coast Guard
financial statements and the DHS consolidated financial statements.
7.16.3.2 Assistant Commandant for Acquisition (CG-9)
Commandant (CG-9) is the contracting officer (KO) with Federal Government authority to:
1. Enter into, administer, and terminate the actuarial services task order (TO); and
2. Officially change the scope, pricing, quantity, or delivery schedule of a TO base or
option year.
7.16.3.3 Actuary
The actuary serves as the Coast Guard Chief Financial Officer’s (CFO’s) technical advisor on
actuarial issues, and is also the contracting officer’s representative (COR) for the actuarial
services contract. As COR, the actuary has delegated authority, via memorandum from the KO,
to:
1. Monitor the consultant’s performance.
2. Review and accept the consultant’s deliverables.
3. Approve or reject the consultant’s invoices.
4. Schedule meetings and serve as the general point of contact (POC) and mediator between
the consultant and Coast Guard stakeholders.
7.16.3.4 Actuarial Services Contractor (Consultant)
The consultant is a private firm employing consulting actuaries who meet the qualification
standards published by the American Academy of Actuaries.
7.16.3.5 Assistant Commandant for Resources (CG-8)/CFO
1. Has overall responsibility for financial management activities delineated under the CFO
Act of 1990, including accounting, budgeting, policy, planning, and audit oversight; and
2. Asserts to the validity and reliability of the Coast Guard’s actuarial liabilities reported in
the DHS AFR.
7.16.3.6 Comptroller (CG-8C)
The Comptroller (CG-8C) is the Coast Guard’s Director of Financial Operations, providing
management, oversight, and policy guidance for financial management, accounting, and financial
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reporting functions. Commandant (CG-8C) also manages the actuarial services contract via the
actuary.
7.16.3.7 Office of Resource Management (CG-83)
Commandant (CG-83) oversees the execution of the retired pay appropriation.
7.16.3.8 Budget Formulation Division (CG-822)
Commandant (CG-822) formulates congressional budget requests.
7.16.3.9 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842) approves the actuarial liabilities for entry into the GL.
7.16.3.10 Personnel Service Center (PSC)
Provides personnel support services to Coast Guard military personnel, including active duty and
retirement payroll.
7.16.3.11 Pay and Personnel Center (PPC)
Provides responsive personnel and compensation services for all Coast Guard military personnel.
7.16.3.12 Assistant Commandant for Human Resources (CG-1)
Provides the diverse, effective, force to meet current and future work needs of the Coast Guard.
Refer to Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 7, Section 7.16 (Actuarial Liabilities) for detailed responsibilities
regarding the calculation, recording, and reporting of actuarial accrued liabilities, contributed
actuarial accrued liability amounts to the Military Retirement System (MRS) and Military Health
System (MHS) programs, and selection of discount rates and valuation dates.
7.16.4 Policy
7.16.4.1 General
Amounts to be recorded as the actuarial accrued liability shall be based on determinations by the
actuary as to the amounts necessary to fund present and future benefits payable to military
retirees and their survivors, based as follows:
1. Projected benefits for a given program shall be composed of benefits expected to be paid
to the following:
a. Persons who have met the conditions of the program and will receive benefits in the
future.
b. Persons who have met enough of the conditions of the program to be considered
probable recipients of future benefits.
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c. The surviving beneficiaries of both groups, as applicable.
2. Projected benefits shall be based on participants’ history of earnings, work or service,
projected years of work or service, and other appropriate factors as of the valuation date.
The valuation date is the first day of the fiscal year, but results are then projected to the
last day of the fiscal year, using standard actuarial roll-forward techniques.
3. Automatic benefit increases, specified by the provisions of the program that are expected
to occur after the valuation date, shall be recognized when computing program benefits.
7.16.4.2 MRS Liability
1. The unfunded accrued liability, presented as a component of the liability for military
service and other retirement benefits, shall represent both retired pay and health care
benefits for non-Medicare eligible retirees/survivors.
2. Valuation of the plan’s liability is based on the actuarial present value of future plan
benefits derived from the future payments that are attributable, under the retirement
plan’s provisions, to a participant’s credited service as of the valuation date and to
projected future service from the valuation date to the participant’s separation date.
Credited service is the number of years of service from active duty base date (or
constructive date in the case of active duty reservists) to date of retirement measured in
years and completed months. The present value of future benefits is then converted to an
unfunded accrued liability by subtracting the present value of future employer/employee
normal contributions and any plan assets. Currently, there are no plan assets or employee
contributions required, so the accrued liability is the present value of future benefits
expected to be paid, less the present value of future employer normal costs.
3. Coast Guard plan participants may retire after 20 years of active service at any age with
annual benefits equal to 2.5 percent of retired base pay for each year of credited service.
Personnel who became members after 1 August 1986 may elect to receive a $30,000
lump sum bonus after 15 years of service, reduced cost of living adjustments, and
reduced benefits prior to age 62. The reduction in benefits prior to age 62 is only
applicable in the event of retirement with less than 30 years of service. Effective January
1, 2018, NDAA 2016 eliminated the $30,000 lump sum bonus and corresponding benefit
reductions. In addition, the benefit formula changes from 2.5 percent to 2.0 percent for
members who join on or after January 1, 2018. They also receive a Savings Plan
contribution that is not part of the MRS liability. Members with under 12 years of
service may opt-into the new “blended” retirement plan.
4. The annual disability benefit is equal to the retired pay base multiplied by the larger of:
a. 2.5 percent times years of service (or 2.0 percent for members of the “blended”
retirement plan); or
b. The percent of member disability.
Prior to 1 January 2007, the benefit could not be more than 75 percent of retired pay base.
5. If a Coast Guard member is disabled, the member is entitled to disability benefits,
assuming the disability is at least 30 percent (under a standard schedule of rating
disabilities by Veterans Affairs) and either:
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a. The member has at least eight years of service;
b. The disability results from active duty; or
c. The disability occurred in the line of duty during a time of war or national emergency
or certain other time periods.
6. The significant actuarial assumptions used to compute the MRS accrued liability are:
a. Life expectancy and expected future service are based upon the established DOD
mortality decrement, with a projection scale applied that assumes future mortality
improvements;
b. Actual Coast Guard experience is used for the retirement, withdrawal and disability
assumptions;
c. Salary increases are projected until retirement for all active members;
d. Cost of living increases are projected after retirement; and
e. Projected future payments are discounted to the valuation date, using the discount
rate.
7.16.4.3 Reporting Requirements
As an administrative entity of the MRS providing annuity benefits to eligible participants, the
Coast Guard shall recognize, for reporting purposes, a liability for the actuarial present value of
accumulated benefits. These are benefits earned or accrued as of the valuation date, but which
will not be paid until a later date.
1. The actuarial present value of accumulated benefits is that amount, as of the valuation
date, that results from applying actuarial assumptions to the benefit amounts determined.
The actuarial assumptions are used to adjust the amounts to reflect the time value of
money (through discounts for interest) and the probability of retirement each year in the
future, beginning with the valuation date.
2. The significant assumptions used in determining actuarial present values shall, in the
aggregate, be reasonable and reflect the best estimate of each program’s anticipated
experience.
3. The valuation results shall be rolled forward to the last day of the fiscal year being
reported on. Changes in benefit rules during a year shall be reflected in that year’s
computation of accumulated benefits. (Refer to the PPC’s “Actuarial Data File
Procedures” for the retroactive review and validation procedures.)
4. Changes in the liability each year shall be charged or credited to expense.
5. Footnotes to the financial statements shall disclose the nature and amount of required
agency contributions, if any. The footnotes also shall disclose the administrative entity
for the pension plan, which is the responsible party for reporting the unfunded liability.
6. As the administrative entity that administers the pension plan(s), the Coast Guard shall
comply with requirements and the accounting guidance issued pursuant to that law.
Financial information for the pension plan(s) shall be reported in the annual financial
statements.
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7. The notes to the financial statements shall include a description of the methods and
significant assumptions used in computing the actuarial present value of future program
benefits.
7.17 Contingent Legal Liabilities
This Section defines policies and procedures to support the completeness and accuracy of the
legal data submitted to DHS for the recording and disclosure of contingent legal liabilities
(CLLs) on the quarterly financial statements.
This Section applies to all personnel who use legal claims data to determine the Coast Guard’s
accrued CLLs and associated disclosures.
7.17.1 Overview
A contingent legal liability (CLL) is an actual liability or a potential liability arising from Coast
Guard actions. A CLL may arise from either pending or anticipated litigation in which the Coast
Guard is or may be named as a defendant (or third-party defendant), or from actual/anticipated
claims that have been or may be filed against the Coast Guard or funds managed by the Coast
Guard (e.g., the Oil Spill Liability Trust Fund).Coast Guard attorneys and claim adjustors are
required to submit CLL data on a quarterly basis to Commandant (CG-094) for review by senior
attorneys to ensure the completeness and accuracy of the data. Commandant (CG-094) reviews
the CLL data submissions to determine whether submitted estimates for cases appear reasonable,
and follows up with the submitter or other attorneys knowledgeable in the case area to determine
if estimates need to be adjusted. The senior attorneys review the case, and, based on their
experience and judgment (along with that of loss experts from independent outside sources),
make a recommendation to Commandant (CG-094). Commandant (CG-094) makes the final
determination of the estimate to be reported for each case after any needed follow-up and
consultation with the submitter or other attorneys.
For detailed procedures on the recording and disclosure of contingent legal liabilities, refer to
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 7, Section 7.17 (Contingent Legal Liabilities).
7.17.2 Authorities
1. 44 USC 3101. [Records management by agency heads; general duties]
http://www.gpo.gov/fdsys/
2. Federal Accounting Standards Advisory Board, Interpretation No. 2, Accounting for
Treasury Judgment Fund Transactions: An Interpretation of SFFAS 4 and SFFAS 5,
March 1997.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
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4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
5. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 12, Recognition of Contingent Liabilities Arising
from Litigation: An Amendment to SFFAS No. 5, Accounting for Liabilities of the Federal
Government, February 1999.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
6. Office of Management and Budget, Bulletin No. 06-03, Audit Requirements for Federal
Financial Statements, Section 9, “Legal Letters and Management’s Schedules,”
August 2006.
https://www.whitehouse.gov/omb/information-for-agencies/bulletins/
7. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
8. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 6, Chapter 3100, “Certifying Payments and Recording Corresponding
Intragovernmental Receivables in the Federal Government’s Judgment Fund”.
http://tfm.fiscal.treasury.gov/v1.html
7.17.3 Responsibilities
Following are the offices and their respective responsibilities for CLL accounting.
7.17.3.1 Assistant Commandant for Resources (CG-8)/CFO
Commandant (CG-8) develops, promulgates, and implements Coast Guard financial
management policy for CLL accounting used by Commandant (CG-094) and FINCEN.
7.17.3.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Develops, promulgates, and implements financial policy and procedures for tracking and
accounting for CLLs in coordination with Commandant (CG-094), FINCEN, and DHS
Office of Financial Management (OFM).
2. Quarterly, oversees the CLL report process in preparation for the ending quarterly
financial statements.
3. Provides oversight to FINCEN for preparation of financial statements, required under the
CFO Act, to include accounting of CLLs.
7.17.3.3 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
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1. Develops, promulgates, and implements financial policy and procedures for tracking and
accounting for CLLs in coordination with Commandant (CG-094), FINCEN, and DHS
OFM.
2. Quarterly, reviews and submits to FINCEN the CLL report developed by Commandant
(CG-094) in preparation for the ending quarterly financial statements.
3. Provides oversight to FINCEN for preparation of financial statements, required under the
CFO Act, to include accounting of CLLs.
4. Performs the testing outlined in Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.17, Procedure No.
7.17.1, Step 5.2 (Internal Controls) to support management’s assertions on CLLs.
7.17.3.4 Judge Advocate General (CG-094)
Commandant (CG-094):
1. Quarterly, determines whether submitted estimates for pending cases appear reasonable,
ensures the completeness and accuracy of the data, and develops and submits to
Commandant (CG-842) a CLL report in preparation for the ending quarterly financial
statements.
2. Follows up with the submitter and the attorneys or claim adjustor’s knowledgeable in the
case area to determine if estimates need to be adjusted.
7.17.3.5 Finance Center (FINCEN)
FINCEN personnel:
1. Maintain general ledger balances and supporting documentation for CLL estimates.
2. Prepare quarterly and other applicable adjusting journal entries to trace CLL estimates.
7.17.4 Policy
1. Contingencies shall be recognized as a liability when a past transaction or event has
occurred, a future outflow or other sacrifice of resources is probable, and the related
future outflow or sacrifice of resources is measurable.
2. CLLs shall be recorded as incurred liabilities if the loss is probable and the amount can
be reasonably estimated. CLLs that are judged to have a reasonably possible chance of
occurring or that cannot be estimated shall be included as a footnote on the financial
statements.
3. An estimated liability may be a specific amount or a range of amounts. If some amount
within the range is a better estimate than any other amount within the range, that amount
shall be recognized. If no amount within the range is a better estimate than any other
amount, the minimum amount in the range shall be recognized, and the range and a
description of the nature of the contingency shall be disclosed.
4. A CLL shall be disclosed whenever there is a reasonable possibility that a loss or an
additional loss may have been incurred, even if the conditions for liability recognition are
COMDTINST M7100.3F
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not met. Disclosure shall include the nature of the contingency along with an estimate of
the possible liability, an estimate of the range of the possible liability, or a statement that
such an estimate cannot be made. Management shall not disclose in the financial
statements the amount of any potential liability if such disclosure would compromise the
Government’s position in court or in negotiating a settlement.
7.18 Environmental Liabilities
7.18.1 Overview
For financial reporting purposes, a Coast Guard environmental liability is a future outflow or
expenditure of resources that exists as of the financial reporting date for environmental cleanup,
closure, and/or disposal costs resulting from past transactions or events. A Coast Guard
environmental liability exists when:
1. Contamination is present or likely to be present;
2. Environmental cleanup, closure, and/or disposal is required by lease contracts; Federal,
State, and/or local statute; regulation; or other legal agreement; and
3. The operations that created the liability are Coast Guard-related.
An environmental liability may also exist if environmental contamination is not Coast Guard-
related, but the Coast Guard enters into a binding agreement that formally accepts financial
responsibility for cleanup, closure, and/or disposal.
This Coast Guard Risk Management key process involves the identification of environmental
risks and the estimation of liability for remediation and/or disposal. On a quarterly basis, the
Coast Guard is required to estimate and report its environmental restoration liability. The cost of
environmental restoration is reported in the Environmental and Disposal Liability footnote on the
DHS consolidated financial statement.
The Coast Guard recognizes two types of environmental liabilities:
1. Environmental remediation; and
2. Environmental cleanup and disposal.
The liability for environmental remediation is the amount necessary to bring a known
contaminated asset into compliance with applicable environmental standards. The increase or
decrease in the annual liability is charged to current-year expense. The liability for
environmental cleanup and disposal is the amount necessary to remove, contain, and/or dispose
of hazardous material/waste whenever an environmental site requires remediation.
Commandants (CG-45) and (CG-47) develop the environmental and cleanup costs based on
historical data and approved estimation methodologies. This data includes written assessments
for specific projects and the historical cleanup costs for work performed by the Coast Guard
Yard’s Industrial Department and/or any of the Coast Guard Civil Engineering Units.
For detailed procedures on the accounting and reporting requirements for Coast Guard shore
facility and vessel environmental liability estimation and documentation, refer to Financial
Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series),
Chapter 7, Section 7.18 (Environmental Liabilities).
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7.18.1.1 Purpose
This Section specifies standards for Coast Guard shore facility and vessel environmental liability
estimation and documentation. Policies are defined to ensure the completeness and accuracy of
the environmental liabilities data submitted to DHS for recording and disclosure on the quarterly
financial statements.
7.18.1.2 Scope
This Section applies to all personnel who are involved in calculating and recording the Coast
Guard’s environmental liability cleanup and disposal costs. Responsibilities are specified for the
following offices:
1. Assistant Commandant for Resources (CG-8);
2. Office of Financial Policy, Reporting, and Property (CG-84);
3. Financial Reporting and Analysis Division (CG-842);
4. Office of Naval Engineering (CG-45);
5. Office of Environmental Management (CG-47); and
6. Finance Center (FINCEN).
7.18.2 Authorities
1. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
42 USC 103.
http://www.gpo.gov/fdsys/search/home.action
3. Resource Conservation and Recovery Act (RCRA). 42 USC 82.
http://www.gpo.gov/fdsys/search/home.action
4. Toxic Substances Control Act (TSCA) of 1977. 15 USC 53.
http://www.gpo.gov/fdsys/search/home.action
5. 40 CFR 761, “Polychlorinated Biphenyls (PCBs) Manufacturing, Processing,
Distribution in Commerce, and Use Prohibitions”.
http://www.gpo.gov/fdsys/
6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant & Equipment
(PP&E), November 1995.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
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8. Federal Accounting Standards Advisory Board, Technical Bulletin No. 2006-1,
Recognition and Measurement of Asbestos-Related Cleanup Costs, September 2006.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
9. Federal Accounting Standards Advisory Board, Accounting and Auditing Policy
Committee, Technical Release No. 2, Determining Probable and Reasonably Estimable
for Environmental Liabilities in the Federal Government, March 1998.
http://files.fasab.gov/pdffiles/2016_fasab_handbook.pdf
10. Office of Management and Budget, Bulletin No. 06-03, Audit Requirements for Federal
Financial Statements, August 2006.
https://www.whitehouse.gov/omb/information-for-agencies/bulletins/
11. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
12. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.5, “Other Liabilities”.
http://cfo-policy.dhs.gov/default.aspx
13. Policy on Management of Environmental Liabilities, COMDTINST 5090.11 (series).
http://www.dcms.uscg.mil/directives
7.18.3 Responsibilities
Following are the offices and their respective responsibilities for environmental liabilities
accounting.
7.18.3.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) promulgates Coast Guard financial management policy for environmental
liabilities accounting used by the Chief, Office of Logistics (CG-47); Chief, Office of Naval
Engineering (CG-45); and FINCEN.
7.18.3.2 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Implements financial policy and procedures for tracking and accounting environmental
liabilities in coordination with Commandants (CG-45) and (CG-47), FINCEN, and
DHS Office of Financial Management (OFM).
2. Reviews and submits (quarterly) the Environmental Liabilities Report to FINCEN in
preparation for the ending quarterly financial statements submitted by Commandants
(CG-45) and (CG-47).
3. Provides oversight to FINCEN for preparation of financial statements required under the
CFO Act, to include accounting of environmental liabilities.
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7.18.3.3 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842):
1. Implements financial policy and procedures for tracking and accounting environmental
liabilities in coordination with Commandants (CG-45) and (CG-47), FINCEN, and
DHS OFM.
2. Reviews and submits (quarterly) the environmental liability estimate to FINCEN in
preparation for the ending quarterly financial statements submitted by Commandants
(CG-45) and (CG-47).
3. Provides oversight to FINCEN for preparation of financial statements required under the
CFO Act of 1990, to include accounting of environmental liabilities.
4. Performs testing as outlined in Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.18, Procedure No.
7.18.1 (Environmental Liability Process) to provide a basis for management’s assertions
on environmental liabilities.
7.18.3.4 Office of Naval Engineering (CG-45)
Commandant (CG-45):
1. Determines the reasonableness (quarterly) of the Coast Guard’s estimates for vessels,
ensures the accuracy and completeness of the data, and develops and submits to
Commandant (CG-842) an Environmental Liability Report for vessels in preparation for
the quarterly financial statements.
2. Follows up with the Coast Guard subject matter experts as needed to determine if
estimates need to be adjusted.
7.18.3.5 Office of Environmental Management (CG-47)
Commandant (CG-47):
1. Quarterly, gathers EC&R project information from SILC-EMD places into consolidated
EL quarterly report. Reviews information for reasonableness and accuracy.
2. Quarterly, gathers UDO project information from SILC-EMD and places into
consolidated EL quarterly report. Performs QA/QC of data to ensure the accuracy and
completeness of quarterly data.
3. Quarterly, performs query of the real-property database of record to determine estimated
EL associated with asbestos-containing materials, lead-based paint, and lighthouses.
Develops estimate based on queried data and instructions in EL Process Guide (current
version).
4. Quarterly, gathers the multiple sections of the EL report into consolidated EL report.
Performs validations steps described in EL Process Guide (current version) and
coordinates with various CG offices as appropriate to ensure an accurate EL is recorded.
Completes quarterly report checklist and develops submittal memorandum for delivery of
the consolidated report to Commandant (CG-842).
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7.18.3.6 Finance Center (FINCEN)
FINCEN personnel:
1. Maintain general ledger balances and supporting documentation for environmental
liability estimates.
2. Prepare quarterly and other applicable adjusting journal entries to update the
environmental liability estimates.
7.18.4 Policy
1. Environmental liabilities shall be recognized as a liability when a past transaction or
event has occurred, a future outflow or other sacrifice of resources is probable, and the
related future outflow or sacrifice of resources is measurable.
2. Environmental liabilities shall be recorded as incurred liabilities if the loss is probable
and the amount can be reasonably estimated.
3. Cleanup costs that are judged to have a reasonably possible chance of occurring or that
cannot be estimated shall be included in the Environmental and Disposal Liability
footnote on the financial statements.
4. The estimated liability shall be expressed as a specific amount or a range of amounts. If
some amount within the range is a better estimate than any other amount within the
range, that amount shall be recognized. If no amount within the range is a better estimate
than any other amount, the minimum amount in the range shall be recognized, and both
the range and a description of the nature of the liability shall be disclosed.
5. An environmental liability shall be disclosed in the financial statements if any of the
conditions for liability recognition are not met and there is a reasonable possibility that a
loss or an additional loss may have been incurred. Disclosure shall include the nature of
the cleanup cost and either an estimate of the possible liability, an estimate of the range
of the possible liability, or a statement that such an estimate cannot be made.
7.19 Treasury Information Maintenance Process
7.19.1 Overview
The Treasury Information Maintenance subfunction is a FSIO Core Financial System
Requirement for Federal agencies which ensures that classification structures and valid data
element relationships are in place, in an agencies system, to use, classify, and identify
transactions that affect the Fund Balance with Treasury (FBWT). The future state of Coast
Guard's Treasury Information Maintenance procedures will align with this FSIO structure for
Federal financial management operations.
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7.20 Treasury Payment Confirmation Process
7.20.1 Overview
The Coast Guard disburses payments for the purchase of goods and services from agencies
(Federal and non-federal), organizations, and individuals.
Schedule payments transmitted to the Department of the Treasury (Treasury) through the Secure
Payment System (SPS) and processed by two regional finance centers (RFCs): Kansas City,
Kansas (Code 310) and Philadelphia, Pennsylvania (Code 303) are discussed in this Subsection
as the Treasury payment confirmation process. Following the processing of payments, vendors
receive payments disbursed by Treasury. Agencies download agency confirmation reports
(ACRs) from the Central Accounting Reporting System (CARS) website after the payment
confirmations are posted by Treasury. Agencies visit the CARS website to download the RFC
support listing, which contains all agency payments made by the RFC.
For detailed responsibilities and procedures on the verification and reconciliation of payment
schedules submitted to Treasury, refer to Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.20 (Treasury Payment
Confirmation Process).
7.20.2 Purpose
The purpose of the Treasury payment confirmation process is to provide the Coast Guard with a
mechanism to reconcile and verify the accuracy of payment schedules sent to Treasury.
Verification of the confirmed Treasury schedule payment is an integral part in the reconciliation
of the Coast Guard’s Fund Balance with Treasury (FBWT) account. The verification ensures
that:
1. The schedule dollar amount confirmed by Treasury matches the transmitted schedule
amount; and
2. The transmitted schedule amount is posted to the Coast Guard’s accounting systems.
7.20.2.1 Scope
The Treasury payment confirmation process applies to all Coast Guard agency location codes
(ALCs) that submit payment data to Treasury via the RFCs.
7.20.3 Authorities
The Financial Accounting Standards Advisory Board (FASAB), the Office of Management and
Budget (OMB), Treasury, and the Department of Homeland Security (DHS) have issued specific
requirements relating to accounting systems for Federal agencies. The systems must account for
and record all financial events for disbursements at the transaction level. These Federal agencies
require the Coast Guard to comply with the laws, regulations, policies, and procedures in order to
protect the Federal Government’s assets and to minimize losses. The authoritative guidance
related to the issuance of disbursements is listed below:
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1. Debt Collection Improvement Act (DCIA) of 1996.
http://fiscal.treasury.gov/fsservices/gov/debtColl/rsrcsTools/debt_dca.htm
2. 5 CFR 1315 [Prompt Payment – replaces OMB Circular A-125].
http://www.fiscal.treasury.gov/fsservices/gov/pmt/promptPayment/promptPayment_hom
e.htm
3. 31 CFR 205 [Cash Management Improvement Act (CMIA)].
http://www.gpo.gov/fdsys/pkg/CFR-2011-title31-vol2/pdf/CFR-2011-title31-vol2-
part205.pdf
4. Federal Acquisition Regulation (FAR), Part 51, Use of Government Sources by
Contractors.
https://acquisition.gov/
5. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7. Office of Management and Budget, Office of Federal Financial Management, Core
Financial System Requirements, OFFM-No-0106, January 2006.
https://www.whitehouse.gov/omb/information-for-agencies
8. Department of the Treasury, Bureau of the Fiscal Service, Central Accounting Reporting
System (CARS).
http://www.fiscal.treasury.gov/fsservices/gov/acctg/cars/cars_home.htm
9. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4, Chapter 4500, “Government Purchase Cards”.
http://tfm.fiscal.treasury.gov/v1.html
10. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 4, Chapter 8000, “Designated Depositary Checking Accounts”.
http://tfm.fiscal.treasury.gov/v1.html
11. U.S. Coast Guard Certifying and Disbursing Manual, COMDTINST M7210.1 (series).
http://www.dcms.uscg.mil/directives
12. Supply Policy and Procedures Manual (SPPM), COMDTINST M4400.19 (series).
http://www.dcms.uscg.mil/directives
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7.20.4 Responsibilities
7.20.4.1 Assistant Commandant for Resources (CG-8)/Chief Financial Officer
(CFO)
Commandant (CG-8) is responsible for accounting for all Coast Guard financial management
and resource activities including planning, programming, budgeting, and execution of the Coast
Guard’s appropriations.
7.20.4.2 Finance Center (FINCEN)
FINCEN personnel:
1. Implement and operate accounting systems and fiscal processes.
2. Exercise direct supervision over the maintenance of formal detailed accounting records
for fiscal accounting transactions.
3. Review, reconcile and appraise the accuracy and validity of financial accounting
information to better assist all financial management activities.
4. Review and monitor field activities to ensure timely completion, resolution, and
compliance with approved Coast Guard policy and procedures.
5. Exercise direct supervision over the review, control, follow up, and reconciliation of
documents in support of general ledger control account balances.
6. Maintain a continuing review of procedures utilized in existing accounting systems.
For additional detailed responsibilities on the Treasury payment confirmation process, including
IPAC payment confirmation processes, refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.20 (Treasury
Payment Confirmation Process).
7.20.5 Policy
Because of the high volume of payments, the Coast Guard disburses, the payment confirmation
policy must ensure that the necessary processes are in place to update Treasury confirmation
information in a timely and effective manner. To support the payment confirmation process, the
Coast Guard shall follow the requirements listed below.
1. The Coast Guard shall provide payment schedules to Treasury via RFCs in Kansas City,
Kansas, and Philadelphia, Pennsylvania, which will include the vendor name, amount of
payment, and payment date.
2. The Coast Guard shall download and review all Treasury schedules from the GWA
System that are confirmed (ACR) and paid on behalf of each agency location code
(ALC). Each schedule should support the amount that has been reported to Treasury by
the RFCs’ daily activity support listing.
3. The Coast Guard shall ensure that the ACR payment confirmation data is imported from
the GWA “TDO Payments Reporting Module”.
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4. The Coast Guard shall ensure that the schedule dollar amount confirmed by Treasury
matches the schedule amount that was transmitted and is posted to the accounting system.
5. The Coast Guard shall update payments with paid schedule number, confirmed date, and
check number or trace number upon receipt of confirmation data from the GWA “TDO
Payments Reporting Module”.
6. The Coast Guard shall liquidate disbursements-in-transit transactions and record
confirmed disbursements upon receipt of payment confirmation.
7. The Coast Guard shall assign check numbers to individual payments, based upon the
payment schedule’s check range received from the GWA “TDO Payments Reporting
Module”.
8. The Coast Guard shall correct system-assigned check numbers on payment records that
do not match the actual check number assigned by Treasury.
9. The Coast Guard shall assign check numbers to individual payment records when a
payment schedule has multiple check ranges or a break in check numbers.
10. The Coast Guard shall record disbursement cancellations for individual payments that
have not been negotiated.
11. The Coast Guard shall update its GLs (CAS, NESSS, and Asset Logistics Management
Information System (ALMIS)) with the proper accounting entry to record the
disbursement of funds and to capture information about individual payments that may be
critical in reconciling the FBWT or answering vendors’ questions concerning payments
made.
12. The Coast Guard shall maintain internal payment schedules that support the amounts in
the GWA/CARS, each month for the specific audit month to be cleared. The monthly
activity on these schedules is compared to the activity reported to Treasury and listed on
the IPAC and RFC support listings. Any unmatched items must agree with the Statement
of Difference (SOD) information in GWA/CARS, prepared by Treasury.
13. The Coast Guard shall research each item on the unmatched listing, and initiate and/or
report any necessary adjustments to Treasury to resolve the discrepancy.
7.21 Management of the CAS Outbox Holding Queue in FPD
7.21.1 Overview
This Section describes the general requirements for the management of obligations and other
related transactions during an interface down-time between the Finance and Procurement
Desktop (FPD) and the Core Accounting System (CAS). The purpose of this policy is to ensure
that all obligations and modifications to obligations entered into FPD are appropriate, authorized,
documented, and processed accurately and completely to CAS. This policy also provides
guidelines to ensure that the Coast Guard monitors all obligations on a continual basis and that
validation occurs within established timelines. This includes obligations residing in a holding
queue due to incomplete validation and requiring further action to ensure that transactions are
corrected, processed, or cancelled. The accurate management of these obligations and
COMDTINST M7100.3F
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transactions is paramount to budget execution, financial reporting, future mission capabilities,
and sustainment.
The contents of the CAS Outbox are displayed in FPD as transactions that are not yet shown on
the program element status (PES) report. When real-time integration is restored, the valid
transactions flow into CAS, leaving only the erroneous transactions. These errors, if not
corrected and released from the CAS Outbox holding queue, will cause a difference between
FPD and CAS balances. This variance is normally referred to as the “pipeline amount” and is
used for financial reporting of all appropriations not certified through the Pipeline Certification
Tool (PCT). To avoid unreconciled balances, all CAS Outbox errors should be resolved and the
queue cleared of invalid obligations and related transactions as soon as possible.
7.21.2 Scope
This policy applies to but is not limited to, all units and financial managers that use FPD as the
primary means of managing obligations within the Coast Guard financial structure. This policy
provides guidance for the management of obligations and any related transactions that reside in
the CAS Outbox. In addition, the offices below have these specific responsibilities dealing with
Management of the CAS Outbox Holding Queue in FPD.
7.21.3 Authorities
1. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Federal Financial Management Improvement Act of 1996 (FFMIA). PL 104-208.
http://www.gpo.gov/fdsys/pkg/PLAW-104publ208/pdf/PLAW-104publ208.pdf
3. 31 USC 1501, “Documentary Evidence Requirement for Government Obligations”.
http://www.gpo.gov/fdsys/
4. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov/
5. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
7.21.4 Responsibilities
7.21.4.1 Resource Management Office (CG-83)
Commandant (CG-83):
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1. Establishes, implements, and tests internal controls related to both corrective and
noncorrective actions for CAS Outbox error processing.
2. Implements, reviews, and updates policy for CAS Outbox failures pertaining to Coast
Guard obligations.
3. Reviews the results of corrective efforts and takes appropriate action to address identified
performance gaps.
4. Establishes and monitors performance metrics to determine the success of corrective
actions to CAS Outbox errors.
5. Formulates management reports, and provides feedback to financial managers in order to
evaluate CAS Outbox reconciliation and communicate future expectations.
7.21.4.2 Appropriation Managers
Appropriation managers:
1. Provide oversight and management at the applicable appropriation level.
2. Consider prior adherence to this policy by allowance managers and administrative target
units (ATUs) when determining ATU budget authority.
3. Report identified problems to all financial managers.
4. Report corrective actions taken or recommended to preclude identified problems from
recurring.
7.21.4.3 Finance Center (FINCEN)
FINCEN personnel:
1. Establish, enforce, and maintain system procedures and practices necessary to comply
with this policy and applicable accounting requirements with regards to the CAS Outbox.
2. Provide procedural guidance and assistance via the FINCEN Intranet on the FPD home
page in order to resolve all discrepancies with transactions in the CAS Outbox error
queue and facilitate corrective action within the timeframe outlined in this policy.
Individuals shall strictly adhere to the requirements for performing their assigned roles and
responsibilities, and managers shall perform all oversight functions with due diligence.
Refer to Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 7, Section 7.21 (Management of the CAS Outbox Holding Queue in
FPD) for detailed responsibilities for Allowance Managers, Administrative Target Unit
Managers, Program Element Managers, and Reconcilers.
For detailed procedures and requirements for ensuring that processed obligations are accurate,
timely and complete in FPD and CAS, refer to Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 7, Section 7.21 (Management
of the CAS Outbox Holding Queue in FPD).
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Appendix 7-1 Reconciliation of Fund Balance with Treasury
Table 7.7 Reconciliation of FBWT – ALC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Reconciliation of the Agency’s reported deposit/debit
voucher transactions with Treasury’s Form FMS 6652
Statement of Differences Deposit Transactions by ALC
101000
FOB
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s reported disbursement
and IPAC transactions with Treasury’s Form FMS 6652
Statement of Differences Disbursement Transactions by
ALC
101000
FOB
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s USSGL 101000 accounts
to Treasury’s Form FMS 6653 and Form FMS 6655
reports
101000
N/A
N/A
N/A
N/A
Reconciliation of the monthly and annual activity in the
GL 101000 accounts to Form FMS 224
101000
FOB
ALC
Monthly
20 business days after
month-end
GL Account 101000 Civilian Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
GL Account 101000 Military Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
GL Account 112000 Imprest Funds vs. Treasury Activity
1120
FOB
ALC
Monthly
20 business days after
month-end
FOB = Fiscal Operations Branch
Table 7.8 Reconciliation of FBWT – CG TIER
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Reconciliation of the Agency’s reported deposit/debit
voucher transactions with Treasury’s Form FMS 6652
Statement of Differences Deposit Transactions by ALC
101000
N/A
N/A
N/A
N/A
Reconciliation of the Agency’s reported disbursement
and IPAC transactions with Treasury’s Form FMS 6652
Statement of Differences Disbursement Transactions by
ALC
101000
N/A
N/A
N/A
N/A
Reconciliation of the Agency’s USSGL 101000 accounts
to Treasury’s Form FMS 6653 and Form FMS 6655
reports
101000
N/A
N/A
N/A
N/A
Reconciliation of the monthly and annual activity in the
GL 101000 accounts to Form FMS 224
101000
N/A
N/A
N/A
N/A
GL Account 101000 Civilian Payroll Activity vs. Treasury
Activity
1010
N/A
N/A
N/A
N/A
GL Account 101000 Military Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
GL Account 112000 Imprest Funds vs. Treasury Activity
112000
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-193
Table 7.9 Reconciliation of FBWT – FINCEN
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Reconciliation of the Agency’s reported deposit/debit
voucher transactions with Treasury’s Form FMS 6652
Statement of Differences Deposit Transactions by ALC
101000
OGQ
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s reported disbursement
and IPAC transactions with Treasury’s Form FMS 6652
Statement of Differences Disbursement Transactions by
ALC
101000
OGQ
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s USSGL 101000 accounts
to Treasury’s Form FMS 6653 and Form FMS 6655
reports
101000
FF
TAS
Monthly
20 business days after
month-end
Reconciliation of the monthly and annual activity in the
GL 101000 accounts to Form FMS 224
101000
OGQ
ALC
Monthly
20 business days after
month-end
GL Account 101000 Civilian Payroll Activity vs. Treasury
Activity
101000
SA
TAS & Approp.
Code
Monthly
20 business days after
month-end
GL Account 101000 Military Payroll Activity vs. Treasury
Activity
101000
OGQ
TAS & Approp.
Code
Monthly
20 business days after
month-end
GL Account 112000 Imprest Funds vs. Treasury Activity
112000
OP
TAS & Approp.
Code
Monthly
20 business days after
month-end
FF = Financial Reports and Analysis Branch
OGQ = Reports and Reconciliation Unit
OP = Payables Branch
SA = Core Accounting Systems Branch
Table 7.10 Reconciliation of FBWT – PPC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Reconciliation of the Agency’s reported deposit/debit
voucher transactions with Treasury’s Form FMS 6652
Statement of Differences Deposit Transactions by ALC
101000
RD
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s reported disbursement
and IPAC transactions with Treasury’s Form FMS 6652
Statement of Differences Disbursement Transactions by
ALC
101000
RD
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s USSGL 101000 accounts
to Treasury’s Form FMS 6653 and Form FMS 6655
reports
101000
N/A
N/A
N/A
N/A
Reconciliation of the monthly and annual activity in the
GL 101000 accounts to Form FMS 224
101000
RD
ALC
Monthly
20 business days after
month-end
GL Account 101000 Military Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
RD = Resources Division
COMDTINST M7100.3F
7-194
Table 7.11 Reconciliation of FBWT – Yard/SFLC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Reconciliation of the Agency’s reported deposit/debit
voucher transactions with Treasury’s Form FMS 6652
Statement of Differences Deposit Transactions by ALC
101000
RRB
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s reported disbursement
and IPAC transactions with Treasury’s Form FMS 6652
Statement of Differences Disbursement Transactions by
ALC
101000
RRB
ALC
Monthly
20 business days after
month-end
Reconciliation of the Agency’s USSGL 101000 accounts
to Treasury’s Form FMS 6653 and Form FMS 6655
reports
101000
N/A
N/A
N/A
N/A
Reconciliation of the monthly and annual activity in the
GL 101000 accounts to Form FMS 224
101000
RRB
ALC
Monthly
20 business days after
month-end
GL Account 101000 Civilian Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
GL Account 101000 Military Payroll Activity vs. Treasury
Activity
101000
N/A
N/A
N/A
N/A
GL Account 112000 Imprest Funds vs. Treasury Activity
112000
RRB
ALC
Monthly
20 business days after
month-end
RRB = Reports, Reconciliations, and Budget Division
COMDTINST M7100.3F
7-195
Appendix 7-2 Edit Check Reconciliation
Table 7.12 Edit Check Reconciliation – ALC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Unexpended Appropriations - Cumulative (GL 310000):
Beginning balance = Ending balance
(pre-close from current year)
310000
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Unexpended Appropriations - Cumulative (GL 310000):
Prior year post-close balance = Current year beginning
balance
310000
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Cumulative Results of Operations (GL 331000):
Beginning balance = Current year pre-close ending
balance
331000
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Cumulative Results of Operations (GL 331000):
Prior year post-close ending balance = Current year
beginning balance
331000
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Total Actual Resources Collected (GL 420100):
Beginning balance = Current year pre-close ending
balance
420100
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Total Actual Resources Collected (GL 420100):
Prior year post-close ending balance = Current year
beginning balance
420100
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Prior year post-close balances = Current year beginning
balances
All
FOB
Summary
TAS
Annually
Prior to submitting Trial
Balance
Appropriations Received - CNP (Line 4) = SBR (Line 1a)
(Does not apply to revolving, trust, or special funds.)
(DHS #7)
N/A
FOB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Other Adjustments (CNP Line 6) = Permanently Not
Available (SBR Line 6)
(DHS #8)
N/A
FOB
Summary
TAS
Monthly
Prior to producing Trial
Balance
Spending Authority from Offsetting Collections =
Obligations Incurred Reimbursements
(SBR Line 3 = SBR Line 8B)
N/A
FOB
Summary
TAS
Monthly
Prior to producing Trial
Balance
Cash, A/R, A/P, Unexpended Appropriations, Cumulative
Results of Operations, Expenses Not Requiring
Budgetary Resources = $0
N/A
FOB
Summary
TAS
Monthly
Prior to producing Trial
Balance
Total Budgetary Accounts = $0
N/A
FOB
Summary
TAS
Monthly
Prior to producing Trial
Balance
Unexpended Appropriations = Cash, A/R, A/P
N/A
FOB
Summary
TAS
Monthly
Prior to producing Trial
Balance
FOB = Fiscal Operations Branch
COMDTINST M7100.3F
7-196
Table 7.13 Edit Check Reconciliation – CG TIER
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Unexpended Appropriations - Cumulative (GL 310000):
Beginning balance = Ending balance
(pre-close from current year)
310000
FF
Summary
TAS
Monthly
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Unexpended Appropriations - Cumulative (GL 310000):
Prior year post-close balance = Current year beginning
balance
310000
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Cumulative Results of Operations (GL 331000):
Beginning balance = Current year pre-close ending
balance
331000
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Cumulative Results of Operations (GL 331000):
Prior year post-close ending balance = Current year
beginning balance
331000
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Total Actual Resources Collected (GL 420100):
Beginning balance = Current year pre-close ending
balance
420100
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Total Actual Resources Collected (GL 420100):
Prior year post-close ending balance = Current year
beginning balance
420100
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Prior year post-close balances = Current year beginning
balances
All
FF
Summary
TAS
Annually
60 - 90 days after 1st day
of fiscal year, then by the
15th or 30th
Appropriations Received - CNP (Line 4) = SBR (Line 1a)
(Does not apply to revolving, trust, or special funds.)
(DHS #7)
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Other Adjustments (CNP Line 6) = Permanently Not
Available (SBR Line 6)
(DHS #8)
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Spending Authority from Offsetting Collections =
Obligations Incurred Reimbursements
(SBR Line 3 = SBR Line 8B)
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Cash, A/R, A/P, Unexpended Appropriations, Cumulative
Results of Operations, Expenses Not Requiring
Budgetary Resources = $0
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Total Budgetary Accounts = $0
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Unexpended Appropriations = Cash, A/R, A/P
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
FF = FINCEN Financial Reports and Analysis Branch
F/S = Financial Statement
COMDTINST M7100.3F
7-197
Table 7.14 Edit Check Reconciliation – FINCEN
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Unexpended Appropriations - Cumulative (GL 310000):
Beginning balance = Ending balance
(pre-close from current year)
310000
N/A
N/A
N/A
N/A
Unexpended Appropriations - Cumulative (GL 310000):
Prior year post-close balance = Current year beginning
balance
310000
N/A
N/A
N/A
N/A
Cumulative Results of Operations (GL 331000):
Beginning balance = Current year pre-close ending
balance
331000
N/A
N/A
N/A
N/A
Cumulative Results of Operations (GL 331000):
Prior year post-close ending balance = Current year
beginning balance
331000
N/A
N/A
N/A
N/A
Total Actual Resources Collected (GL 420100):
Beginning balance = Current year pre-close ending
balance
420100
N/A
N/A
N/A
N/A
Total Actual Resources Collected (GL 420100):
Prior year post-close ending balance = Current year
beginning balance
420100
N/A
N/A
N/A
N/A
Prior year post-close balances = Current year beginning
balances
All
N/A
N/A
N/A
N/A
Appropriations Received - CNP (Line 4) = SBR (Line 1a)
(Does not apply to revolving, trust, or special funds.)
(DHS #7)
N/A
N/A
N/A
N/A
N/A
Other Adjustments (CNP Line 6) = Permanently Not
Available (SBR Line 6)
(DHS #8)
N/A
N/A
N/A
N/A
N/A
Spending Authority from Offsetting Collections =
Obligations Incurred Reimbursements
(SBR Line 3 = SBR Line 8B)
N/A
N/A
N/A
N/A
N/A
Cash, A/R, A/P, Unexpended Appropriations, Cumulative
Results of Operations, Expenses Not Requiring
Budgetary Resources = $0
N/A
N/A
N/A
N/A
N/A
Total Budgetary Accounts = $0
N/A
N/A
N/A
N/A
N/A
Unexpended Appropriations = Cash, A/R, A/P
N/A
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-198
Table 7.15 Edit Check Reconciliation – Yard/SFLC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Unexpended Appropriations - Cumulative (GL 310000):
Beginning balance = Ending balance
(pre-close from current year)
310000
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Unexpended Appropriations - Cumulative (GL 310000):
Prior year post-close balance = Current year beginning
balance
310000
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Cumulative Results of Operations (GL 331000):
Beginning balance = Current year pre-close ending
balance
331000
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Cumulative Results of Operations (GL 331000):
Prior year post-close ending balance = Current year
beginning balance
331000
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Total Actual Resources Collected (GL 420100):
Beginning balance = Current year pre-close ending
balance
420100
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Total Actual Resources Collected (GL 420100):
Prior year post-close ending balance = Current year
beginning balance
420100
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Prior year post-close balances = Current year beginning
balances
All
RRB
Summary
TAS
Annually
Prior to submitting Trial
Balance
Appropriations Received - CNP (Line 4) = SBR (Line 1a)
(Does not apply to revolving, trust, or special funds.)
(DHS #7)
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Other Adjustments (CNP Line 6) = Permanently Not
Available (SBR Line 6)
(DHS #8)
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Spending Authority from Offsetting Collections =
Obligations Incurred Reimbursements
(SBR Line 3 = SBR Line 8B)
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Cash, A/R, A/P, Unexpended Appropriations, Cumulative
Results of Operations, Expenses Not Requiring
Budgetary Resources = $0
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Total Budgetary Accounts = $0
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
Unexpended Appropriations = Cash, A/R, A/P
N/A
RRB
Summary
TAS
Monthly
Prior to submitting Trial
Balance
RRB = Reports, Reconciliations, and Budget Division
COMDTINST M7100.3F
7-199
Appendix 7-3 Reconciliation of GL Account Relationships and Abnormal
Balances
Table 7.16 Reconciliation of GL Account Relationships and Abnormal Balances – ALC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Advances and Prepayments =
Undelivered Orders – Paid
141000 vs.
480200, 483200,
487200, 488200
FOB
Summary
TAS
Monthly
15 business days after
month-end
Accounts Payable = Delivered Orders – Unpaid
211000, 212000,
213000, 214000,
219000, 221000,
221100, 221300,
221500 vs.
490100, 493100,
497100, 498100
FOB
Summary
TAS
Monthly
15 business days after
month-end
Advances from Others =
Unfilled Customer Orders with Advance
231000 vs. 422200,
423100
FOB
Summary
TAS
Monthly
15 business days after
month-end
Accounts Receivable Federal = Budgetary Receivables
131000F vs.
425100, 428700,
423300, 423400
FOB
Detail
TAS
Monthly
15 business days after
month-end
Revenue = Reimbursements and Other Income Earned
425100, 425200 vs.
510000, 520000
FOB
Detail
TAS
Monthly
15 business days after
month-end
Expenditures = Budgetary Expenditures
490100, 490200,
497100, 497200,
498100, 498200, vs.
570000
FOB
Detail
TAS
Monthly
15 business days after
month-end
Receivables for Invested Balances =
Budgetary Invested Balances
133000 vs.
408100, 408300,
417100, 412600,
412700
FOB
Summary
TAS
Monthly
15 business days after
month-end
Change in Accumulated Depreciation =
Depreciation, Amortization, and Depletion Expense
171900, 173900,
174900, 175900,
181900, 182900,
183900, 184900,
189900 vs.
671000
FOB
Summary
TAS
Monthly
20 business days after
month-end
Unfilled Customer Orders =
Undelivered Orders – Reimbursable
422100, 422200, vs.
480100R, 480200R
N/A
N/A
N/A
N/A
Appropriation Used = Delivered Orders
490100D, 490200D vs.
310700
FOB
Detail
TAS
Monthly
15 business days after
month-end
Inventory, PP&E, and Unfunded Liabilities =
Cumulative Results of Operations
(does not apply to revolving, trust, or special funds)
151100-152900,
171100-189900;
199000, 222000,
222500, 229000,
26xxxx, 292000,
294000, 299000,
299500 vs.
500000s, 600000s,
700000s, 331000
FOB
Summary
TAS
Monthly
15 business days after
month-end
Budgetary Cash = Proprietary Cash
101000 vs. 4xxxxx
N/A
N/A
N/A
N/A
Anticipated Resources = Anticipated Status
N/A
N/A
N/A
N/A
N/A
Appropriations Received – Proprietary =
Appropriations Received – Budgetary
310100 vs. 411900
N/A
N/A
N/A
N/A
Net Position Analysis - Unexpended Appropriation
300000 series
N/A
N/A
N/A
N/A
Analysis of Abnormal Balances
N/A
FOB
Detail
TAS
Monthly
15 business days after
month-end
Unexpended Appropriations Used (GL 310700) to
Expended Appropriations (GL 570000)
310700 vs. 570000
FOB
Detail
TAS
Monthly
15 business days after
month-end
Delivered Orders-Obligations, Unpaid (GL 490100) &
Delivered Orders-Obligations, Paid (GL 490200) to
Expended Appropriations (GL 570000)
490100, 490200 vs.
570000
N/A
N/A
N/A
N/A
Accounts Receivable (GL 131000) to
Other Expenses Not Requiring Budgetary Resources
(GL 679000)
131000 vs. 679000
N/A
N/A
N/A
N/A
Net Position Accounts (GL 310100-310900) = zero
Only after post-close
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-200
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Revenue and Other Financing Sources (GL 5XXXXX) &
Expenses (GL 6XXXXXX) &
Gains/Losses/Miscellaneous Items (GL 7XXXXX) = zero
Only after post-close
N/A
N/A
N/A
N/A
FOB = Fiscal Operations Branch
COMDTINST M7100.3F
7-201
Table 7.17 Reconciliation of GL Account Relationships and Abnormal Balances – CG
TIER
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Advances and Prepayments =
Undelivered Orders – Paid
141000 vs.
480200, 483200,
487200, 488200
FF
Summary
TAS
Monthly
Prior to producing F/S
Accounts Payable = Delivered Orders – Unpaid
211000, 212000,
213000, 214000,
219000, 221000,
221100, 221300,
221500 vs.
490100, 493100,
497100, 498100
FF
Summary
TAS
Monthly
Prior to producing F/S
Advances from Others =
Unfilled Customer Orders with Advance
231000 vs. 422200,
423100
FF
Summary
TAS
Monthly
Prior to producing F/S
Accounts Receivable Federal = Budgetary Receivables
131000F vs.
425100, 428700,
423300, 423400
FF
Summary
TAS
Monthly
Prior to producing F/S
Revenue = Reimbursements and Other Income Earned
425100, 425200 vs.
510000, 520000
FF
Summary
TAS
Monthly
Prior to producing F/S
Expenditures = Budgetary Expenditures
490100, 490200,
497100, 497200,
498100, 498200, vs.
570000
FF
Summary
TAS
Monthly
Prior to producing F/S
Receivables for Invested Balances =
Budgetary Invested Balances
133000 vs.
408100, 408300,
417100, 412600,
412700
FF
Summary
TAS
Monthly
Prior to producing F/S
Change in Accumulated Depreciation =
Depreciation, Amortization, and Depletion Expense
171900, 173900,
174900, 175900,
181900, 182900,
183900, 184900,
189900 vs.
671000
FR
Summary
TAS
Monthly
Prior to producing F/S
Unfilled Customer Orders =
Undelivered Orders – Reimbursable
422100, 422200, vs.
480100R, 480200R
FF
Summary
TAS
Monthly
Prior to producing F/S
Appropriation Used = Delivered Orders
490100D, 490200D vs.
310700
FF
Summary
TAS
Monthly
Prior to producing F/S
Inventory, PP&E, and Unfunded Liabilities =
Cumulative Results of Operations
(does not apply to revolving, trust, or special funds)
151100-152900,
171100-189900;
199000, 222000,
222500, 229000,
26xxxx, 292000,
294000, 299000,
299500 vs.
500000s, 600000s,
700000s, 331000
FF
Summary
TAS
Monthly
Prior to producing F/S
Budgetary Cash = Proprietary Cash
101000 vs. 4xxxxx
FF
Summary
TAS
Monthly
Prior to producing F/S
Anticipated Resources = Anticipated Status
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Appropriations Received – Proprietary =
Appropriations Received – Budgetary
310100 vs. 411900
FF
Summary
TAS
Monthly
Prior to producing F/S
Net Position Analysis - Unexpended Appropriation
300000 series
FF
Summary
TAS
Monthly
Prior to producing F/S
Analysis of Abnormal Balances
N/A
FF
Summary
TAS
Monthly
Prior to producing F/S
Unexpended Appropriations Used (GL 310700) to
Expended Appropriations (GL 570000)
310700 vs. 570000
FF
Summary
TAS
Monthly
Prior to producing F/S
Delivered Orders-Obligations, Unpaid (GL 490100) &
Delivered Orders-Obligations, Paid (GL 490200) to
Expended Appropriations (GL 570000)
490100, 490200 vs.
570000
N/A
N/A
N/A
N/A
Accounts Receivable (GL 131000) to
Other Expenses Not Requiring Budgetary Resources
(GL 679000)
131000 vs. 679000
N/A
N/A
N/A
N/A
Net Position Accounts (GL 310100-310900) = zero
Only after post-close
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-202
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Revenue and Other Financing Sources (GL 5XXXXX) &
Expenses (GL 6XXXXXX) &
Gains/Losses/Miscellaneous Items (GL 7XXXXX) = zero
Only after post-close
N/A
N/A
N/A
N/A
FF = FINCEN Financial Reports and Analysis Branch
FR = FINCEN Property Branch
F/S = Financial Statement
COMDTINST M7100.3F
7-203
Table 7.18 Reconciliation of GL Account Relationships and Abnormal Balances –
FINCEN
Reconciliation
USSGL
Account No. Office Level Freq Due
Advances and Prepayments =
Undelivered Orders – Paid
141000 vs.
480200, 483200,
487200, 488200
OG
Detail
TAS
Monthly
15 business days after
month-end
Accounts Payable = Delivered Orders – Unpaid
211000, 212000,
213000, 214000,
219000, 221000,
221100, 221300,
221500 vs.
490100, 493100,
497100, 498100
OG
Detail
TAS
Monthly
15 business days after
month-end
Advances from Others =
Unfilled Customer Orders with Advance
231000 vs. 422200,
423100
OG
Detail
TAS
Monthly
15 business days after
month-end
Accounts Receivable Federal = Budgetary Receivables
131000F vs.
425100, 428700,
423300, 423400
OG
Detail
TAS
Monthly
15 business days after
month-end
Revenue = Reimbursements and Other Income Earned
425100, 425200 vs.
510000, 520000
OG
Detail
TAS
Monthly
15 business days after
month-end
Expenditures = Budgetary Expenditures
490100, 490200,
497100, 497200,
498100, 498200, vs.
570000
OG
Detail
TAS
Monthly
15 business days after
month-end
Receivables for Invested Balances =
Budgetary Invested Balances
133000 vs.
408100, 408300,
417100, 412600,
412700
FF
Summary
TAS
Monthly
15 business days after
month-end
Change in Accumulated Depreciation =
Depreciation, Amortization, and Depletion Expense
171900, 173900,
174900, 175900,
181900, 182900,
183900, 184900,
189900 vs.
671000
FR
Summary
TAS
Monthly
20 business days after
month-end
Unfilled Customer Orders =
Undelivered Orders – Reimbursable
422100, 422200, vs.
480100R, 480200R
OG
Detail
TAS
Monthly
15 business days after
month-end
Appropriation Used = Delivered Orders
490100D, 490200D vs.
310700
OG
Detail
TAS
Monthly
15 business days after
month-end
Inventory, PP&E, and Unfunded Liabilities =
Cumulative Results of Operations
(does not apply to revolving, trust, or special funds)
151100-152900,
171100-189900;
199000, 222000,
222500, 229000,
26xxxx, 292000,
294000, 299000,
299500 vs.
500000s, 600000s,
700000s, 331000
OGQ
Summary
TAS
Monthly
15 business days after
month-end
Budgetary Cash = Proprietary Cash
101000 vs. 4xxxxx
OG
Detail
TAS
Monthly
15 business days after
month-end
Anticipated Resources = Anticipated Status
N/A
N/A
N/A
N/A
N/A
Appropriations Received – Proprietary =
Appropriations Received – Budgetary
310100 vs. 411900
N/A
N/A
N/A
N/A
Net Position Analysis - Unexpended Appropriation
300000 series
N/A
N/A
N/A
N/A
Analysis of Abnormal Balances
N/A
OG
Detail
TAS
Monthly
15 business days after
month-end
COMDTINST M7100.3F
7-204
Reconciliation
USSGL
Account No. Office Level Freq Due
Unexpended Appropriations Used (GL 310700) to
Expended Appropriations (GL 570000)
310700 vs. 570000
OG
Detail
TAS
Monthly
15 business days after
month-end
Delivered Orders-Obligations, Unpaid (GL 490100) &
Delivered Orders-Obligations, Paid (GL 490200) to
Expended Appropriations (GL 570000)
490100, 490200 vs.
570000
OG
Detail
TAS
Monthly
15 business days after
month-end
Accounts Receivable (GL 131000) to
Other Expenses Not Requiring Budgetary Resources
(GL 679000)
131000 vs. 679000
OG
Detail
TAS
Monthly
15 business days after
month-end
Net Position Accounts (GL 310100-310900) = zero
Only after post-close
OG
Summary
TAS
Annually
15 business days after
month-end
Revenue and Other Financing Sources (GL 5XXXXX) &
Expenses (GL 6XXXXXX) &
Gains/Losses/Miscellaneous Items (GL 7XXXXX) = zero
Only after post-close
OG
Summary
TAS
Annually
15 business days after
month-end
FF = Financial Reports and Analysis Branch
OG = General Accounting Branch
FR = Property Branch
OGQ = Reports and Reconciliation Unit
COMDTINST M7100.3F
7-205
Table 7.19 Reconciliation of GL Account Relationships and Abnormal Balances – PPC
Reconciliation
USSGL
Account No. Office Level Freq Due
Advances and Prepayments =
Undelivered Orders – Paid
141000 vs.
480200, 483200,
487200, 488200
N/A
N/A
N/A
N/A
Accounts Payable = Delivered Orders – Unpaid
211000, 212000,
213000, 214000,
219000, 221000,
221100, 221300,
221500 vs.
490100, 493100,
497100, 498100
N/A
Summary
TAS
Monthly
15 business days after
month-end
Advances from Others =
Unfilled Customer Orders with Advance
231000 vs. 422200,
423100
N/A
Summary
TAS
Monthly
15 business days after
month-end
Accounts Receivable Federal = Budgetary Receivables
131000F vs.
425100, 428700,
423300, 423400
N/A
Detail
TAS
Monthly
15 business days after
month-end
Revenue = Reimbursements and Other Income Earned
425100, 425200 vs.
510000, 520000
N/A
Detail
TAS
Monthly
15 business days after
month-end
Expenditures = Budgetary Expenditures
490100, 490200,
497100, 497200,
498100, 498200, vs.
570000
N/A
Detail
TAS
Monthly
15 business days after
month-end
Receivables for Invested Balances =
Budgetary Invested Balances
133000 vs.
408100, 408300,
417100, 412600,
412700
N/A
N/A
N/A
N/A
Change in Accumulated Depreciation =
Depreciation, Amortization, and Depletion Expense
171900, 173900,
174900, 175900,
181900, 182900,
183900, 184900,
189900 vs.
671000
N/A
N/A
N/A
N/A
Unfilled Customer Orders =
Undelivered Orders – Reimbursable
422100, 422200, vs.
480100R, 480200R
N/A
N/A
N/A
N/A
Appropriation Used = Delivered Orders
490100D, 490200D vs.
310700
N/A
Detail
TAS
Monthly
15 business days after
month-end
Inventory, PP&E, and Unfunded Liabilities =
Cumulative Results of Operations
(does not apply to revolving, trust, or special funds)
151100-152900,
171100-189900;
199000, 222000,
222500, 229000,
26XXxx, 292000,
294000, 299000,
299500 vs.
500000s, 600000s,
700000s, 331000
N/A
N/A
N/A
N/A
Budgetary Cash = Proprietary Cash
101000 vs. 4xxxxx
N/A
N/A
N/A
N/A
Anticipated Resources = Anticipated Status
N/A
N/A
N/A
N/A
N/A
Appropriations Received – Proprietary =
Appropriations Received – Budgetary
310100 vs. 411900
N/A
N/A
N/A
N/A
Net Position Analysis - Unexpended Appropriation
300000 series
N/A
N/A
N/A
N/A
Analysis of Abnormal Balances
N/A
N/A
Detail
TAS
Monthly
15 business days after
month-end
Unexpended Appropriations Used (GL 310700) to
Expended Appropriations (GL 570000)
310700 vs. 570000
N/A
Detail
TAS
Monthly
15 business days after
month-end
COMDTINST M7100.3F
7-206
Reconciliation
USSGL
Account No. Office Level Freq Due
Delivered Orders-Obligations, Unpaid (GL 490100) &
Delivered Orders-Obligations, Paid (GL 490200) to
Expended Appropriations (GL 570000)
490100, 490200 vs.
57000
N/A
N/A
N/A
N/A
Accounts Receivable (GL 131000) to
Other Expenses Not Requiring Budgetary Resources
(GL 679000)
131000 vs. 679000
N/A
N/A
N/A
N/A
Net Position Accounts (GL 310100-310900) = zero
Only after post-close
N/A
N/A
N/A
N/A
Revenue and Other Financing Sources (GL 5XXXXX) &
Expenses (GL 6XXXXXX) &
Gains/Losses/Miscellaneous Items (GL 7XXXXX) = zero
Only after post-close
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-207
Table 7.20 Reconciliation of GL Account Relationships and Abnormal Balances –
Yard/SFLC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Advances and Prepayments =
Undelivered Orders – Paid
141000 vs.
480200, 483200,
487200, 488200
RRB
Summary
TAS
Monthly
15 business days after
month-end
Accounts Payable = Delivered Orders – Unpaid
211000, 212000,
213000, 214000,
219000, 221000,
221100, 221300,
221500 vs.
490100, 493100,
497100, 498100
RRB
Summary
TAS
Monthly
15 business days after
month-end
Advances from Others =
Unfilled Customer Orders with Advance
231000 vs. 422200,
423100
RRB
Detail
TAS
Monthly
15 business days after
month-end
Accounts Receivable Federal = Budgetary Receivables
131000F vs.
425100, 428700,
423300, 423400
RRB
Detail
TAS
Monthly
15 business days after
month-end
Revenue = Reimbursements and Other Income Earned
4251000, 425200 vs.
510000, 520000
RRB
Detail
TAS
Monthly
15 business days after
month-end
Expenditures = Budgetary Expenditures
490100, 490200,
497100, 497200,
498100, 498200, vs.
570000
RRB
Detail
TAS
Monthly
15 business days after
month-end
Receivables for Invested Balances =
Budgetary Invested Balances
133000 vs.
408100, 408300,
417100, 412600,
412700
N/A
N/A
N/A
N/A
Change in Accumulated Depreciation =
Depreciation, Amortization, and Depletion Expense
171900, 173900,
174900, 175900,
181900, 182900,
183900, 184900,
189900 vs.
671000
RRB
Summary
TAS
Monthly
20 business days after
month-end
Unfilled Customer Orders =
Undelivered Orders – Reimbursable
422100, 422200, vs.
480100R, 480200R
RRB
Detail
TAS
Monthly
15 business days after
month-end
Appropriation Used = Delivered Orders
490100D, 490200D vs.
310700
RRB
Detail
TAS
Monthly
15 business days after
month-end
Inventory, PP&E, and Unfunded Liabilities =
Cumulative Results of Operations
(does not apply to revolving, trust, or special funds)
151100-152900,
171100-189900;
199000, 222000,
222500, 229000,
26xxxx, 292000,
294000, 299000,
299500 vs.
500000s, 600000s,
700000s, 331000
RRB
Summary
TAS
Monthly
15 business days after
month-end
Budgetary Cash = Proprietary Cash
101000 vs. 4xxxxx
N/A
N/A
N/A
N/A
Anticipated Resources = Anticipated Status
N/A
N/A
N/A
N/A
N/A
Appropriations Received – Proprietary =
Appropriations Received – Budgetary
310100 vs. 411900
N/A
N/A
N/A
N/A
Net Position Analysis - Unexpended Appropriation
300000 series
N/A
N/A
N/A
N/A
Analysis of Abnormal Balances
N/A
RRB
Detail
TAS
Monthly
15 business days after
month-end
Unexpended Appropriations Used (GL 310700) to
Expended Appropriations (GL 570000)
310700 vs. 570000
RRB
Detail
TAS
Monthly
15 business days after
month-end
Delivered Orders-Obligations, Unpaid (GL 490100) &
Delivered Orders-Obligations, Paid (GL 490200) to
Expended Appropriations (GL 570000)
490100, 490200 vs.
570000
N/A
N/A
N/A
N/A
Accounts Receivable (GL 131000) to
Other Expenses Not Requiring Budgetary Resources
(GL 679000)
131000 vs. 679000
N/A
N/A
N/A
N/A
Net Position Accounts (GL 310100-310900) = zero
Only after post-close
N/A
N/A
N/A
N/A
Revenue and Other Financing Sources (GL 5XXXXX) &
Expenses (GL 6XXXXXX) &
Gains/Losses/Miscellaneous Items (GL 7XXXXX) = zero
Only after post-close
N/A
N/A
N/A
N/A
RRB = Reports, Reconciliations, and Budget Division
COMDTINST M7100.3F
7-208
Appendix 7-4 Reconciliation of GL Control Accounts to Subsidiary
Records
Table 7.21 Reconciliation of GL Control Accounts to Subsidiary Records – ALC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Accounts Receivable subsidiary records to the GL
134000 - 136900
133000 - 133500
FOB
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
214000 & 219000
FOB
Transaction level
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
215000 & 215500
FOB
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
261000 - 292000
FOB
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
298000 & 299000
FOB
Transaction level
Monthly
15 business days after
month-end
Payroll subsidiary records (NFC and JUMPS data) to
payroll expense in the GL
610000
N/A
N/A
N/A
N/A
Investment activities and balance to the appropriate
provider (Treasury, non-governmental institution, etc.)
161000 - 161100
N/A
N/A
N/A
N/A
Advances from Others and Deferred Revenue subsidiary
records to the GL
231000 - 232000
N/A
N/A
N/A
N/A
Revenue subsidiary records to the GL
510000, 510900,
520000, 531000,
531100, 532000
FOB
Transaction level
Monthly
Quarterly
20 days after month-end or
quarter-end
Revenue subsidiary records to the GL
575000, 575500,
576000, 576500,
578000
FOB
TAS & Approp.
Code
Quarterly
20 days after quarter-end
Revenue subsidiary records to the GL
590000, 599000,
599100
FOB
Transaction level
Quarterly
20 days after quarter-end
Environmental and Disposal Liability subsidiary records
to the GL
299500
N/A
N/A
N/A
N/A
Advance and Prepayments subsidiary records to the GL
141000
FOB
Transaction level
Monthly
20 days after month-end
Allotments subsidiary record to the GLs
FINCEN: 411900
ALC: 461000
Yard: 461000
FOB
Transaction level
Quarterly
20 days after quarter-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
221000 - 221100 -
221300
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222000
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222500 - 229000
N/A
N/A
N/A
N/A
Detail Aging of Suspense Accounts versus Suspense
Accounts GL control account balances and Treasury
balances
240000
FOB
TAS & Approp.
Code
Monthly
20 business days after
month-end
Unexpended Appropriation - Cumulative and Cumulative
Results of Operations
310000 & 331000
FOB
TAS & Approp.
Code
Annually
20 business days after
year-end
Anticipated Reimbursements and Other Incomes &
Appropriation Trust Fund Expenditure Transfer -
Receivable
421000 & 422500
FOB
TAS & Approp.
Code
Annually
Quarterly
20 business days after
year-end or quarter-end
Expenditures Accounts
610000, 633000,
650000, 672000
FOB
Transaction level
Quarterly
20 business days after
quarter-end
Expenditures Accounts
640000, 673000,
680000
FOB
TAS & Approp.
Code
Quarterly
20 business days after
quarter-end
Gains and Losses
721000, 760000
FOB
Transaction level
Quarterly
20 business days after
quarter-end
FOB = Fiscal Operations Branch
COMDTINST M7100.3F
7-209
Table 7.22 Reconciliation of GL Control Accounts to Subsidiary Records – CG TIER
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Accounts Receivable subsidiary records to the GL
134000 - 136900
133000 - 133500
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
214000 & 219000
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
215000 & 215500
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
261000 - 292000
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
298000 & 299000
N/A
N/A
N/A
N/A
Payroll subsidiary records (NFC and JUMPS data) to
payroll expense in the GL
610000
N/A
N/A
N/A
N/A
Investment activities and balance to the appropriate
provider (Treasury, non-governmental institution, etc.)
161000 - 161100
N/A
N/A
N/A
N/A
Advances from Others and Deferred Revenue subsidiary
records to the GL
231000 - 232000
N/A
N/A
N/A
N/A
Revenue subsidiary records to the GL
510000, 510900,
520000, 531000,
531100, 532000
N/A
N/A
N/A
N/A
Revenue subsidiary records to the GL
575000, 575500,
576000, 576500,
578000
N/A
N/A
N/A
N/A
Revenue subsidiary records to the GL
590000, 599000,
599100
N/A
N/A
N/A
N/A
Environmental and Disposal Liability subsidiary records
to the GL
299500
N/A
N/A
N/A
N/A
Advance and Prepayments subsidiary records to the GL
141000
N/A
N/A
N/A
N/A
Allotments subsidiary record to the GLs
FINCEN: 411900
ALC: 461000
Yard: 461000
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
221000 - 221100 -
221300
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222000
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222500 - 229000
N/A
N/A
N/A
N/A
Detail Aging of Suspense Accounts versus Suspense
Accounts GL control account balances and Treasury
balances
240000
N/A
N/A
N/A
N/A
Unexpended Appropriation -
Cumulative and Cumulative Results of Operations
310000 & 331000
N/A
N/A
N/A
N/A
Anticipated Reimbursements and Other Incomes &
Appropriation Trust Fund Expenditure Transfer -
Receivable
421000 & 422500
N/A
N/A
N/A
N/A
Expenditures Accounts
610000, 633000,
650000, 672000
N/A
N/A
N/A
N/A
Expenditures Accounts
640000, 673000,
680000
N/A
N/A
N/A
N/A
Gains and Losses
721000, 760000
N/A
N/A
N/A
N/A
COMDTINST M7100.3F
7-210
Table 7.23 Reconciliation of GL Control Accounts to Subsidiary Records – FINCEN
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Accounts Receivable subsidiary records to the GL
134000 - 136900
133000 - 133500
OG
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
214000 & 219000
SA
Transaction level
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
215000 & 215500
FF
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
261000 - 292000
FF
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
298000 & 299000
SA
OP
Transaction level
Monthly
15 business days after
month-end
Payroll subsidiary records (NFC and JUMPS data) to
payroll expense in the GL
610000
SA
TAS & Approp.
Code
Quarterly
20 days after quarter-end
Investment activities and balance to the appropriate
provider (Treasury, non-governmental institution, etc.)
161000 - 161100
FF
TAS & Approp.
Code
Monthly
20 days after month-end
Advances from Others and Deferred Revenue subsidiary
records to the GL
231000 - 232000
OGB
Transaction level
Monthly
20 days after month-end
Revenue subsidiary records to the GL
510000, 510900,
520000, 531000,
531100, 532000
SA
Transaction level
Monthly
Quarterly
20 days after month-end or
quarter-end
Revenue subsidiary records to the GL
575000, 575500,
576000, 576500,
578000
FF
TAS & Approp.
Code
Quarterly
20 days after quarter-end
Revenue subsidiary records to the GL
590000, 599000,
599100
SA
Transaction level
Quarterly
20 days after quarter-end
Environmental and Disposal Liability subsidiary records
to the GL
299500
FF
TAS & Approp.
Code
Monthly
20 days after month-end
Advance and Prepayments subsidiary records to the GL
141000
SA
Transaction level
Monthly
20 days after month-end
Allotments subsidiary record to the GLs
FINCEN: 411900
ALC: 461000
Yard: 461000
SA
Transaction level
Quarterly
20 days after quarter-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
221000 - 221100 -
221300
Civ: SA
Mil: SA
TAS & Approp.
Code
Monthly
20 business days after
month-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222000
Civ: SA
Mil: SA
TAS & Approp.
Code
Monthly
20 business days after
month-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222500 - 229000
Civ: FF
Mil: FF
TAS & Approp.
Code
Monthly
20 business days after
month-end
Detail Aging of Suspense Accounts versus Suspense
Accounts GL control account balances and Treasury
balances
240000
OG/SA
TAS & Approp.
Code
Monthly
20 business days after
month-end
Unexpended Appropriation -
Cumulative and Cumulative Results of Operations
310000 & 331000
SA
TAS & Approp.
Code
Annually
20 business days after
year-end
Anticipated Reimbursements and Other Incomes &
Appropriation Trust Fund Expenditure Transfer -
Receivable
421000 & 422500
SA
FF
TAS & Approp.
Code
Annually
Quarterly
20 business days after
year-end or quarter-end
Expenditures Accounts
610000, 633000,
650000, 672000
SA
Transaction level
Quarterly
20 business days after
quarter-end
Expenditures Accounts
640000, 673000,
680000
SA
FF
TAS & Approp.
Code
Quarterly
20 business days after
quarter-end
Gains and Losses
721000, 760000
FR
Transaction level
Quarterly
20 business days after
quarter-end
FF = Financial Reports and Analysis Branch
OGB = Claims and Receivables Section
FR = Property Branch
OP = Payables Branch
OG = General Accounting Branch
SA = Core Accounting Systems Branch
COMDTINST M7100.3F
7-211
Table 7.24 Reconciliation of GL Control Accounts to Subsidiary Records – PPC
Reconciliation
USSGL
Account No.
Office
Level
Freq
Due
Accounts Receivable subsidiary records to the GL
134000 - 136900
133000 - 133500
RD
TAS & Approp.
Code
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
214000 & 219000
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
215000 & 215500
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
261000 – 292000
N/A
N/A
N/A
N/A
Accounts Payable subsidiary records to the GL
298000 & 299000
N/A
N/A
N/A
N/A
Payroll subsidiary records (NFC and JUMPS data) to
payroll expense in the GL
610000
N/A
N/A
N/A
N/A
Advances from Others and Deferred Revenue subsidiary
records to the GL
231000 - 232000
N/A
N/A
N/A
N/A
Environmental and Disposal Liability subsidiary records
to the GL
299500
N/A
N/A
N/A
N/A
Advance and Prepayments subsidiary records to the GL
141000
RD
Transaction level
Monthly
20 days after month-end
Allotments subsidiary record to the GLs
FINCEN: 411900
ALC: 461000
Yard: 461000
RD
Transaction level
Quarterly
20 days after quarter-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
221000 - 221100 -
221300
RD
TAS & Approp.
Code
Monthly
20 days after month-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222000
N/A
N/A
N/A
N/A
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
222500 - 229000
N/A
N/A
N/A
N/A
Detail Aging of Suspense Accounts versus Suspense
Accounts GL control account balances and Treasury
balances
240000
RD
TAS & Approp.
Code
Monthly
20 business days after
month-end
Expenditures Accounts
610000, 633000,
650000, 672000
RD
Transaction level
Quarterly
20 business days after
quarter-end
Expenditures Accounts
640000, 673000,
680000
RD
TAS & Approp.
Code
Quarterly
20 business days after
quarter-end
RD = Resources Division
COMDTINST M7100.3F
7-212
Table 7.25 Reconciliation of GL Control Accounts to Subsidiary Records – Yard/SFLC
Reconciliation
USSGL
Account No.
Office
Freq
Due
Accounts Receivable subsidiary records to the GL
13xxxx
RRB
Monthly
15 business days after
month-end
Accounts Payable subsidiary records to the GL
2xxxxx
RRB
Monthly
15 business days after
month-end
Payroll subsidiary records (NFC and JUMPS data) to
payroll expense in the GL
610000
N/A
N/A
N/A
Investment activities and balance to the appropriate
provider (Treasury, non-governmental institution, etc.)
161000 - 161100
N/A
N/A
N/A
Deferred Revenue subsidiary records to the GL
232000
RRB
N/A
N/A
Revenue subsidiary records to the GL
5xxxxx
RRB
Monthly
20 days after month-end
Environmental and Disposal Liability subsidiary records
to the GL
299500
N/A
N/A
N/A
Advance and Prepayments subsidiary records to the GL
141000
RRB
Monthly
20 days after month-end
Payroll Subsidiary ledger to payroll liabilities and withheld
accounts
Yard Fund only
RRB
Monthly
20 days after month-end
FBWT - Summary Results subsidiary records to the GL
101000
RRB
Monthly
20 days after month-end
PP&E subsidiary records to the GL
17xxxx, 18xxxx
RRB
Monthly
20 days after month-end
Inventory subsidiary records to the GL
15xxxx
RRB
Monthly
20 days after month-end
RRB = Reports, Reconciliations, and Budget Division
.
COMDTINST M7100.3F
7-213
Appendix 7-5 Required Accruals by Document Type
Table 7.26 Required Accruals by Document Type
Document
Type Code Document Title Accrual
11 Travel (Local) Yes
11 Travel (TDY) Yes
11 Travel (Reserve Orders) Yes
12 Travel (PCS) Yes
13 Travel (Continuous) Yes
14 Government Travel Request Yes
14 Citibank Government Travel Account Yes
14 Government Travel Account for MEPS Yes
15 Commercial Bill of Lading – Power Track Yes
15
Government Bill of Lading –
Government-Owned Property Yes
15
Government Bill of Lading –
Personal Property/Household Goods Yes
17
Purchase Order for Household Goods
Shipment Yes
17
Blanket Purchase Agreement for Household
Goods Yes
17 Nontemporary Storage of Household Goods Yes
17 SPM Shipments/PPT Yes
17 Mass Transit Fare Benefit Program Yes
19 Miscellaneous Obligation Yes
20 Cash Purchases (Imprest Fund) No
21 Procurement Requests No
22
Purchase Order Invoice Voucher for
Nonsubsistence Yes
COMDTINST M7100.3F
7-214
Document
Type Code Document Title Accrual
23 Purchase Order/Delivery Order Yes
23 UNICOR/Federal Prison Purchases Yes
23 Modification to Purchase Order Yes
24 Contracts Yes
24 Modification to Contracts Yes
24 Option/Purchase of Real Property Yes
26
Purchase Order Invoice Voucher for
Subsistence Yes
26 Blanket Purchase Agreement for Subsistence Yes
26 Dining Facility Yes
27 Auxiliary Patrol Orders Yes
28 Military Interdepartmental Purchase Request Yes
30 Training Yes
31 Industrial Service Order Yes
32 Government Purchase Card Yes
32
Express and Commercial Small Package
Shipments Yes
32 Government Fleet Card Yes
33 Post Office Box Rental/Renewal Yes
33 Miscellaneous Costs Yes
33 Coast Guard Yard Project Order Yes
33 Volpe National Transportation System Center Yes
33 Meal Ticket Yes
34 Reimbursable Work Authorization Yes
35 Transfer Between Coast Guard Units Yes
35 ARMS/Milstrip Yes
COMDTINST M7100.3F
7-215
Document
Type Code Document Title Accrual
35 Miscellaneous “Z” Requisitions Yes
35 SERVMART Yes
35 GSA Customer Service Yes
35 DLA Disposition Services Hazardous Waste Yes
35 Into-Plane Fuel Bill Yes
35
Multi Service Aviation Into-Plane
Reimbursement Cards Yes
35 U.S. Customs Charges Yes
35 Defense Transportation Bills Yes
35 Multi Service Air Card Yes
35 DESC Bunker Contract Fuel Purchases Yes
37
Non-Federal Invoicing Processing Systems
(NIPS) Medical Payment Yes
37 Superintendent of Documents – Publications Yes
37 Printing DOD Yes
37 Printing GSA Yes
37 Printing GPO Yes
38
Blanket Purchase Agreement for
Nonsubsistence Yes
39
IPAC Debits Posted to V60G and FADO
Suspense V6OP No
39 IPAC (Payments) Posted to V60G No
39
Payments over Cancellation and Limited
Payability. IPAC Posted as Doc Type 39 to
V60G and Moved to V6A6 No
40 Real Property Leases Yes
40 Residential Leases Yes
44 Utilities – Electric Yes
COMDTINST M7100.3F
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Document
Type Code Document Title Accrual
45 Commercial Telephone Bill Yes
46 Utilities – Water Yes
48 GSA Vehicle Billings Yes
49 Utilities – Natural Gas Yes
68 Debit Voucher Yes
78 Travelers Checks Yes
Military Payroll Yes
Civilian Payroll Yes
Reserve Payroll Yes
COMDTINST M7100.3F
8-1
Chapter 8. Financial Reporting
Financial reporting encompasses all activities involved in summarizing and documenting
financial information, including financial reporting for use by Coast Guard managers in
monitoring and controlling programs and operations. It also comprises all financial reports,
whether automated or manual, required by OMB, Treasury, and other central agencies.
8.1 Monthly, Quarterly, and Year-End Reporting
8.1.1 Overview
As required by the Department of Homeland Security (DHS), Components Requirements Guide
for Financial Reporting, the Coast Guard is required to report sufficient, reliable, and timely data
to ensure that DHS meets the financial statement submission deadlines, which are required by
the DHS Financial Accountability Act of 2004. The financial statements are prepared in
accordance with the Office of Management and Budget (OMB), Circular No. A-136, Financial
Reporting Requirements.
To meet the requirements of OMB A-136, Coast Guard and DHS use the Treasury Information
Executive Repository (TIER). The following financial reporting topics must be addressed to
ensure complete and accurate financial data is maintained. The following financial reporting
topics are addressed in Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 8 (Financial Reporting).
1. Period-End Close of CAS Submodules and General Ledger
2. Reconciliation of GL Control Accounts to GL Submodules
3. Manual Journal Voucher/CG TIER On-Top Adjustments
4. Creation of the CG TIER Unadjusted Trial Balance
5. Preparation of the Reconciliation of Net Cost to Budget
6. Analysis of Cumulative Results of Operations
7. Preparation of Automated and Manual Footnotes
8. Submission of Governmentwide Treasury Account Symbol Adjusted Trial Balance
System (GTAS) Data
9. Chief Financial Officer Certifications
10. Preparation of the Annual Performance and Accountability Report and the Data for the
Financial Report of the U.S. Government
11. DHS TIER Analytical Analysis and Report
12. DHS TIER Abnormal Balances
13. DHS TIER Intra-Departmental Eliminations
COMDTINST M7100.3F
8-2
14. Financial Statement Checklist
15. Reconciling the Statement of Budgetary Resources (SBR)
For detailed responsibilities, procedures, and definitions on the period-end financial reporting,
refer to the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 8 (Financial Reporting).
8.1.1.1 Purpose
This Section has two major objectives:
1. To ensure that the Coast Guard’s financial statements, footnotes, and other reports are
accurate, authorized, complete, and presented appropriately.
2. To ensure that the closing and reporting processes are appropriate and standardized for
the Core Accounting System (CAS), the Coast Guard uses the Treasury Information
Executive Repository (CG TIER), and DHS uses the Treasury Information Executive
Repository (DHS TIER).
8.1.1.2 Scope
This Section applies to all Coast Guard components that are involved in period-end financial
reporting.
8.1.2 Authorities
1. Chief Financial Officers Act of 1990. (PL 101-576).
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Department of Homeland Security Financial Accountability Act. (PL 108-330).
http://www.gpo.gov/fdsys/pkg/STATUTE-118/pdf/STATUTE-118-Pg1275.pdf
3. Federal Managers Financial Integrity Act of 1982 (FMFIA). (PL 97-255).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
4. Federal Financial Management Improvement Act of 1996 (FFMIA). (PL 104-208).
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia
5. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Government Management Reform Act of 1994 (GMRA). (PL 103-356).
http://govinfo.library.unt.edu/npr/library/misc/s2170.html
7. Government Performance and Results Act of 1993.
https://www.whitehouse.gov/omb/information-for-agencies
8. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
COMDTINST M7100.3F
8-3
9. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
10. Office of Management and Budget, Circular A-130, Management of Federal Information
Resources, November 2000.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
11. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
12. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
(TFM) Volume I, Part 2, Chapter 4700, “Agency Reporting Requirements for the
Financial Report of the United States Government.”
http://tfm.fiscal.treasury.gov/v1.html
13. Department of the Treasury, Bureau of the Fiscal Service, U.S. Government Standard
General Ledger, Supplement No. S2 Treasury Financial Manual (series), Part 1 and Part
2, “Fiscal [yyyy] Reporting”.
http://www.fms.treas.gov/ussgl/selection_page.html
14. U.S. Department of Homeland Security, Chief Financial Officer, Office of Financial
Management, Component Requirements Guide for Financial Reporting, (series).
http://cfo-policy.dhs.gov/default.aspx
15. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov/
16. Information and Life Cycle Management Manual, COMDTINST M5212.12 (series).
http://www.dcms.uscg.mil/directives
17. Financial Resource Management Manual - Procedures (FRMM-P), COMDTINST
M7100.4 (series).
http://www.dcms.uscg.mil/directives
8.1.3 Responsibilities
8.1.3.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) personnel provide oversight for all Coast Guard financial management and
resource activities including planning, programming, budgeting, and execution of the service’s
appropriations.
8.1.3.2 Director, Financial Operations/Coast Guard Comptroller (CG-8C)
Commandant (CG-8C) personnel:
1. Administers financial management activities delineated under the CFO ACT of 1990,
which include accounting, budgeting, financial systems, policy, planning, and audit
oversight.
COMDTINST M7100.3F
8-4
2. Provides financial analysis; a description of the design and effectiveness of management
controls; program performance results related to the Coast Guard’s missions, goals, and
objectives; and an assessment of data validity and reliability in support of performance
measures.
3. Serves as the technical control official for the Finance Center (FINCEN), and other
finance/accounting service centers, overseeing the operation of FINCEN. Through the
Finance Center, provides Service-wide accounting and financial management services for
the Coast Guard. Maintains the official accounting records for all Coast Guard
appropriated funds.
4. Provide general guidance and direct oversight of the Coast Guard Finance (Center
FINCEN) as well as other service centers that conduct finance and accounting operations.
5. Oversee financial management and accounting policy development, approvals, and
implementation.
6. Assess and maintain appropriate financial management and accounting policies
applicable to all Coast Guard operations.
7. Oversee and direct financial reporting (internal and external).
8. Ensure that accurate, concise, and timely information, including financial reports are
available to the CFO, DHS, and independent auditors. Review all submissions for
substance, conformance with instructions, completeness, accuracy, and authorizations.
8.1.3.3 Chief, Office of Financial Policy, Reporting and Property (CG-84)
Commandant (CG-84) personnel:
1. Develop, publish, and monitor compliance with standards and requirements for the
transmission of financial data.
2. Monitor the integrity of the Coast Guard’s financial data. Initiates management controls
or corrective action when necessary/appropriate.
3. Develop, implement, oversee, and evaluate financial management policy, directives, and
procedures.
4. Provide oversight and support to the journal voucher/on-top adjustment approval process
and reporting of financial data.
8.1.3.4 Financial Reporting and Analysis Division (CG-842)
Commandant (CG-842) personnel:
1. Provide data or information when requested, to assist Coast Guard elements in
responding to financial audits.
2. Coordinate and monitor the preparation/certification of Coast Guard's financial
statements and related disclosures, and providing financial oversight and guidance to the
program offices and field units.
3. Provide a high level review of all Coast Guard Financial Statements submitted to external
agencies.
COMDTINST M7100.3F
8-5
4. Coordinate and prepare verbiage for related manual footnotes for the quarterly and annual
financial statements and reports.
5. Monitor the Finance Center (FINCEN) financial management performance measures and
coordinate development of plans and corrective actions for improvement within
Commandant (CG-842).
8.1.3.5 Finance Center (FINCEN)
FINCEN personnel:
1. Exercise direct supervision over the maintenance of formal detailed accounting records
for fiscal accounting transactions.
2. Based on Commandant (CG-8) policy implementation direction, develop technical
operating procedures. Promulgate as manuals, handbooks, forms, web pages, etc. Provide
training in new systems and techniques.
3. Develop Coast Guard-wide consolidated operating results for all Coast Guard and service
DHS agencies appropriations and funds. Analyze accounting data and obligational trends.
4. Review, reconcile and appraise the accuracy and validity of financial accounting
information to better assist all financial management activities.
5. Maintains appropriate supporting documentation for all reconciliation activities.
8.1.3.6 Office of Performance Management and Assessment (CG-DCO-81)
Commandant (CG-DCO-81) personnel lead and oversee the Coast Guard's operational
performance management and assessment processes across the Coast Guard mission set.
8.1.3.7 Aviation Logistics Center (ALC)
ALC personnel:
1. Leads the reconciliation of GL accounts and certify the ALMIS GL data.
2. Maintains appropriate supporting documentation for all reconciliation activities.
8.1.3.8 Yard/Surface Forces Logistics Center (SFLC)
SFLC personnel:
1. Leads the reconciliation of GL accounts and certify the NESSS GL data.
2. Maintains appropriate supporting documentation for all reconciliation activities.
8.1.3.9 Coast Guard Academy
CG Academy personnel:
1. Certify the Academy GL data.
2. Maintains appropriate supporting documentation for all GL data.
COMDTINST M7100.3F
8-6
8.1.4 General Policy
1. The Financial Reporting and Analysis Division, Commandant (CG-842), shall be
responsible for the completeness, accuracy, timeliness, and quality of reviews pertaining
to the submission of quarterly and annual financial reports.
2. Prior to the Coast Guard CFO’s monthly certification to DHS, all Coast Guard
consolidated reports shall be reviewed by a Commandant (CG-842) senior manager who
is not directly involved in the report preparation. Senior managers at FINCEN and the
ICPs/Yard shall review their reports before submitting them to Commandant (CG-842).
3. All information supporting the various aspects of monthly, quarterly, and year-end
reporting shall be kept in a central location that is physically secured. These files shall be
retained in accordance with Information and Life Cycle Management Manual,
COMDTINST M5212.12 (series), and shall be accessible to support management reviews
and audits.
For detailed procedures on ensuring the accuracy, completeness, and appropriate presentation of
financial statements, footnotes and other reports and closing and reporting processes, refer to
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Chapter 8 (Financial Reporting).
8.2 Adjustments, Eliminations, and Other Special
Intragovernmental Reconciliations
8.2.1 Overview
The overview outlined for Section 8.1 regarding financial reporting requirements also applies to
the adjustments, eliminations, and other special intragovernmental reconciliations. In addition,
the following roles and responsibilities are described below.
8.2.2 CG TIER Adjustments Responsibilities
8.2.2.1 Aviation Logistics Center (ALC)
ALC personnel:
1. Submit an electronic copy of the ALMIS trial balance to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
2. Submit an electronic copy of the trading partner data to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
8.2.2.2 Coast Guard Yard/Surface Forces Logistics Center (SFLC)
Yard/SFLC personnel:
1. Submit an electronic copy of the NESSS trial balance to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
COMDTINST M7100.3F
8-7
2. Submit an electronic copy of the trading partner data to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
8.2.2.3 Financial Center (FINCEN)
FINCEN personnel:
1. Prepare the intragovernmental and intergovernmental elimination journal entries.
2. Record all approved TIER adjustments, to include intragovernmental and
intergovernmental eliminations, into the CG-TIER database.
3. Report Posting Logic Issues to the System Division of FINCEN.
4. CG TIER Change Requests.
5. Access to CG TIER.
6. DHS TIER Change Requests.
7. Access to DHS TIER.
8.2.2.4 Purpose
This Section has three major objectives:
1. To ensure that CG TIER adjustments are appropriate, authorized, documented, and
processed accurately;
2. To ensure that access to CG TIER and DHS TIER is restricted, and that modifications
thereto are appropriate, accurate, authorized, and properly documented; and
3. To ensure that posting logic issues are properly documented and properly communicated
to the Systems Division.
8.2.2.5 Scope
This Section applies to all personnel who process or oversee adjustments, eliminations, and other
special reconciliations required for accurate financial reporting.
8.2.3 Authorities
1. Chief Financial Officers Act of 1990.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Federal Financial Management Improvement Act of 1996 (FFMIA).
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia
3. Federal Information Security Management Act of 2002 (PL107-347).
http://csrc.nist.gov/drivers/documents/FISMA-final.pdf
4. Government Accountability Office, Standards for Internal Control in the Federal
Government, GAO-14-704G, September 2014.
http://www.gao.gov
COMDTINST M7100.3F
8-8
5. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
6. Office of Management and Budget, Circular A-130, Transmittal Memorandum #4,
Management of Federal Information Resources, November 2000.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7. Department of Homeland Security, Office of Financial Management, Component
Requirements Guide for Financial Reporting (series).
http://cfo-policy.dhs.gov/
8.2.4 Responsibilities
8.2.4.1 Aviation Logistics Center (ALC)
ALC personnel:
1. Submit an electronic copy of the ALMIS trial balance to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
2. Submit an electronic copy of the trading partner data to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
8.2.4.2 Coast Guard Yard/Surface Forces Logistics Center (SFLC)
Yard/SFLC personnel:
1. Submit an electronic copy of the NESSS trial balance to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
2. Submit an electronic copy of the trading partner data to the FINCEN Financial Reports
and Analysis Branch on a monthly basis.
8.2.4.3 Finance Center (FINCEN)
FINCEN personnel:
1. Prepares the intragovernmental and intergovernmental elimination journal entries.
2. Records all approved TIER adjustments, to include intragovernmental and
intergovernmental eliminations, into the CG TIER database.
8.2.5 Access to CG TIER
8.2.5.1 Responsibilities
All changes in personnel and duties shall be reported in writing to Commandant (CG-842).
COMDTINST M7100.3F
8-9
8.2.5.1.1 FINCEN
1. Either the Financial Reports and Analysis Branch chief or the Financial Information and
Control Division chief:
a. Approves access to CG TIER.
b. Reviews and monitors a list of users and privileges for the CG TIER database on a
monthly basis.
c. Signs and dates the reviewed user access list.
2. Coast Guard Oracle Financials (CGOF) configuration management team:
a. Provides access to the approved CG TIER tables, once approved.
b. Ensures that Oracle has been configured to require users to change their passwords
every 60 days or less.
3. Core Accounting Systems Branch CG TIER administrator:
Grants access to the CG TIER database, once approved.
8.2.5.2 Policy
1. User requests for access to the CG TIER database and tables shall be approved by either
the Financial Reports and Analysis Branch chief or the Financial Information and Control
Division chief. The approving chief shall sign and date all requests as evidence of
approval.
2. Either the Financial Reports and Analysis Branch chief or the Financial Information and
Control Division chief shall review and monitor a list of users and privileges on a
monthly basis; and sign and date the list as evidence of the review.
3. The CGOF configuration management team shall provide access to the approved
CG TIER tables.
4. The Core Accounting Systems Branch CG TIER administrator shall grant access to the
CG TIER database.
5. Supporting documentation for approved access shall be maintained by the Systems
Division in electronic form in accordance with Information and Life Cycle Management
Manual, COMDTINST M5212.12 (series) and shall be accessible to support management
reviews and audits.
Refer to Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST
M7100.4 (series), Chapter 8 (Financial Reporting), for detailed procedures on adjustments,
eliminations, and other special Intragovernmental reconciliations.
COMDTINST M7100.3F
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COMDTINST M7100.3F
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Chapter 9. Coast Guard Financial and Mixed Systems
9.1 Overview
The executive and legislative branches have led a major movement toward improving
performance, accountability, and financial management of Federal agencies. This legislation,
along with various directives and guidance issued by Office of Management and Budget (OMB),
Federal Accounting Standards Advisory Board (FASAB), and the Financial Systems Integration
Office (FSIO), establishes a comprehensive framework for resource, financial, and asset
management (RFAM), plus information and performance management guidelines within which
Government agencies must operate. Appendix 9-1 Key Legislation and Regulations provides a
summary of key legislation and regulations.
The Director of Finance and Procurement and Internal Security/Chief Financial Officer (CFO),
the Director of Information and Technology/Chief Information Officer (CIO), and the Assistant
Commandant for Acquisitions chartered a task group to study RFAM systems (i.e., financial and
mixed systems) within the Coast Guard. This cross-functional RFAM Task Group studied
RFAM requirements and systems, and presented their findings and recommendations in
May 1999. Although these findings and recommendations are more than 10 years old, they still
represent a valid framework for system accountability and management.
In its report, the RFAM Task Group developed recommended concepts and methodologies,
along with a plan to integrate/improve Coast Guard RFAM systems, that would facilitate
accountability and management, and comply with the CFO Act, the Government Performance
and Results Act (GPRA), and the Clinger-Cohen Act. Many of the recommendations contained
in the RFAM report have been incorporated into the policies outlined in this chapter. Appendix
9-2, Resource, Financial, and Asset Management (RFAM) Task Group, summarizes the goals
and functions of the RFAM Task Group.
For detailed responsibilities and procedures related to the design, integration, use, maintenance,
training, and security of Coast Guard financial and mixed systems, refer to Financial Resource
Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 9
(Coast Guard Financial and Mixed Systems).
9.1.1 Purpose
This Chapter describes policies and responsibilities for the design, integration, use, maintenance,
training, and security of Coast Guard financial and mixed systems.
Key elements relevant to this Chapter are the requirement to comply with various standards
when implementing financial and mixed systems and the authority of the CFO to establish the
financial and mixed systems used by an agency.
9.1.2 Scope
This Chapter applies to all Coast Guard units and staff elements.
COMDTINST M7100.3F
9-2
9.1.3 Definitions
For the purposes of this chapter, the following definitions from OMB Circular A-123, Appendix
D, Compliance with the Federal Financial Management Improvement Act of 1996, apply:
financial event – any activity having financial consequences to the Federal Government related
to the receipt of appropriations or other financial resources; acquisition of goods or services;
payments or collections; recognition of guarantees, benefits to be provided, or other potential
liabilities; distribution of grants; or other reportable financial activities.
financial management system – an agency’s overall financial operation, reflecting the people,
processes, and technology to capture, classify, summarize, and report data in a meaningful
manner to support business decisions. It includes hardware, applications and system software,
personnel, procedures, data, and reporting functions. The financial management system can be
fully integrated with other management information systems (i.e., mixed systems) where
transactions automatically flow into an accounting general ledger. The financial management
system could also include manual processes to post transactions from other management systems
into the accounting general ledger.
financial system – an information system or set of applications that comprise the accounting
portion of the financial management system that maintains all summary or detailed transactions
resulting from budgetary and proprietary financial activity. The financial system encompasses
processes and records that:
1. Identify and record all valid transactions;
2. Describe on a timely basis the transactions in sufficient detail to permit proper
classification of transactions for financial reporting;
3. Measure the value of transactions in a manner that permits recording their proper
monetary value in the financial statements; and
4. Determine the time period in which transactions occurred to permit recording of
transactions in the proper accounting period.
mixed system – a hybrid of financial and non-financial portions of the overall financial
management system. The following are examples of mixed systems: payment and invoice
systems, procurement systems, receivable systems, loan systems, grants systems, payroll
systems, budget formulation systems, billing systems, property management systems, travel
systems, or other mission operational systems that impact a financial system.
9.2 Authorities
1. Chief Financial Officers (CFO) Act of 1990.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Federal Financial Management Improvement Act of 1996 (FFMIA).
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia
3. Government Performance and Results Act of 1993 (GPRA).
https://www.whitehouse.gov/omb/information-for-agencies
COMDTINST M7100.3F
9-3
4. Information Technology Management Reform Act (ITMRA) of 1996 (now known as the
Clinger-Cohen Act).
http://govinfo.library.unt.edu/npr/library/misc/itref.html
5. Chief Financial Officer (CFO) Technical Authority, COMDTINST 5402.3 (series).
http://www.dcms.uscg.mil/directives
6. Coast Guard and Department of Homeland Security Chief Information Officer (CIO)
Review and Approval of Command, Control, Communications, Computers, and
Information Technology (C4&IT) Acquisitions, COMDTINST 5230.77 (series).
http://www.dcms.uscg.mil/directives
7. Command, Control, Communications, Computers and Information Technology (C4&IT)
Configuration Management (CM) Policy, COMDTINST 5230.69 (series).
http://www.dcms.uscg.mil/directives
8. Command, Control, Communications, Computers and Information Technology (C4&IT)
Enterprise Architecture (EA) Policy, COMDTINST 5230.68 (series).
http://www.dcms.uscg.mil/directives
9. Command, Control, Communications, Computers and Information Technology (C4&IT)
Infrastructure Management Policy, COMDTINST 5230.70 (series).
http://www.dcms.uscg.mil/directives
10. Command, Control, Communications, Computers and Information Technology (C4&IT)
Investment Management Policy, COMDTINST 5230.71 (series).
http://www.dcms.uscg.mil/directives
11. U.S. Coast Guard Cybersecurity Manual, COMDTINST M5500.13 (series) (FOUO).
http://www.dcms.uscg.mil/directives
9.3 Responsibilities
This Section specifies the responsibilities of each office with regard to Coast Guard financial and
mixed systems.
9.3.1 Contracting & Procurement Directorate (CG-91)
Commandant (CG-91), the Director of Contracting and Procurement, is the head of the
contracting activity (HCA) for the Coast Guard. Commandant (CG-91) approves all
procurement management policies and procurement management systems and requirements.
9.3.1.1 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913):
1. Facilitates the procurement of goods and services for the Coast Guard. Develops,
coordinates, and administers the Coast Guard procurement program, assuring compliance
with applicable procurement laws, regulations, and policies in all Coast Guard
acquisitions activities.
2. Serves as the program sponsor for electronic acquisitions systems such as Contract
Information Management Systems (CIMS), and promotes technology for electronic
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Governmentwide systems such as Department of Labor Online Wage Determinations
Online (WDOL) http://www.wdol.gov/ and Past Performance Information Retrieval
System (PPIRS) http://www.ppirs.gov.
3. Serves as the training manager/coordinator for CIMS.
4. Develops, implements, oversee, and evaluates requirements for procurement-related
automated systems such as Financial and Procurement Desktop (FPD), Fleet Logistics
Systems (FLS), and CIMS.
5. Develops and implements CG-wide policies for the timely processing of commitments
into legal obligations, consistent with current Federal Acquisition Regulation (FAR)
requirements. Through appropriate management reporting tools, ensures field
compliance with established standards for the processing of purchase requests into legal
obligations.
6. Oversees and monitors field procurement activities to ensure that automated systems for
the processing of procurement actions are being fully and properly utilized. Establishes,
implements, and manages necessary enforcement actions to ensure compliance.
7. Actively assists program element managers with the deobligation of funds that are
identified as no longer needed for their original purpose, and with any other error or issue
requiring a contracting officer’s involvement. Ensures that copies of all contracts,
modifications, or other obligation documents are provided to program element managers
when requested.
9.3.2 Assistant Commandant for Resources (CG-8)
Commandant (CG-8):
1. Establishes Coast Guard financial and internal security system standards.
2. Approves financial and mixed systems and requirements.
3. Approves all energy management systems and requirements.
4. Establishes and maintains websites for finance and internal security.
9.3.2.1 Director of Financial Operations/Comptroller (CG-8C)
Commandant (CG-8C):
1. Oversee a broad portfolio of financial operations support functions, including policy
development and approval; definition of financial and mixed systems functional
requirements, and related systems acquisition and maintenance.
2. Serves as a final approving official for all system change requests (SCRs), and other
system configuration management (SCM) tasks and modifications that have a financial
impact on the financial statements or reports.
3. Serves as a final approving official for all quarterly script lists.
4. Serves as a final approving official for pre-approved scripts that have a financial impact
on the financial statements or reports. Pre-approval of a script is a limited delegation of
final approving official authority to the Commanding Officer, Commander, Director, or
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Superintendent of a Headquarters Unit to run a script only as directed by Commandant
(CG-8C) (e.g., daily, monthly, quarterly, annually, or one-time only).
9.3.2.2 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86):
1. Manage the Coast Guard financial and mixed systems script processes:
a. Develop and implement policy and procedures related to scripts;
b. Review scripts for appropriate audit trail, accuracy, and completeness, as well as
financial statement impact;
c. Ensure script development and execution adhere to Coast Guard configuration
management policies and procedures;
d. Serve as first-level approving official for all script requests (SRs), SCRs, and SCM
requests;
e. Review and, where appropriate, recommend approval or disapproval to the Office of
Financial Policy, Reporting, and Property (CG-84) of (including mixed systems)
script requests;
f. Serve as first-level approving official for pre-approved scripts that have a financial
impact on the financial statements or reports;
g. Serve as first-level approving official for quarterly scripts list; and
h. Review and where appropriate, recommend approval or disapproval to Commandant
(CG-8C) of (including mixed systems) quarterly script list, reports and SCRs.
2. Develop business case for new system initiatives including high-level cost/benefit
analyses, resource change proposals, and performance measurement plans.
3. Define the financial management system goals, objectives, policies, and standards for
financial management and mixed systems based on the analysis and interpretation of
statutory, as well as Department of Homeland Security (DHS), Office of Management
and Budget (OMB), Government Accountability Office (GAO), and Department of the
Treasury requirements.
9.3.2.3 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Leads the Coast Guard toward a clean audit opinion on the Financial Statement Audit,
overseeing the CFO audit remediation planning and implementation. Ensures that
corrective actions are tracked and that follow-up analysis is conducted.
2. Oversees the transformation of Coast Guard financial management necessary to achieve
and sustain future clean CFO Act audit statements. Provides organizational
recommendations to the CFO for ongoing sustainment of the transformation.
3. Develops, implements, oversees, and evaluates financial management policy, directives,
and procedures.
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4. Monitors the integrity of the Coast Guard’s financial data. Initiates management controls
or corrective action when necessary.
5. Monitors and furnishes input for external audit/review activities as they relate to Coast
Guard accounting/financial systems.
6. Serves as a final approving official for all SRs that have a financial impact.
9.3.2.4 Office of Internal Controls (CG-85)
Commandant (CG-85):
1. Serves as the Coast Guard’s single point of contact responsible for internal control within
all Coast Guard directorates, communicating with all applicable external and internal
customers.
2. Develops, implements, and maintains a management control program in accordance with
the Federal Managers’ Financial Integrity Act (FMFIA), OMB Circular A-123, GAO
Internal Control Standards, and DHS Internal Control guidance.
3. Oversees, manages, and integrates management accountability by:
a. Monitoring results from the Coast Guard’s Compliance Inspection Program.
b. Maintaining the management accountability and control systems process per OMB
Circular A-123.
9.3.2.5 Finance Center (FINCEN)
FINCEN:
1. Serves as the data center for finance and procurement information for the Coast Guard
and the conduit/contact point to the U.S. Treasury, unless waived.
2. Monitors and reports to Commandant (CG-8C) on the performance of finance and
procurement systems (e.g., the accuracy and timeliness of FPD).
3. Develops, publishes, implements, and conducts finance and procurement system
certifications and recertification’s in accordance with best business and security practices
(e.g., FPD certifications). Maintains a current list of all certified sites along with
designated site administrators (e.g., FPD sites).
4. Establishes the standards for the Unit Approved Plan (UAP).
9.3.3 Assistant Commandant for Command, Control, Communications,
Computers and Information Technology (C4IT) (CG-6)
Commandant (CG-6):
1. Develops and maintains the information technology (IT) vision and strategy for the Coast
Guard.
2. Builds and fosters partnerships throughout the organization to ensure that all Coast Guard
IT investments support business processes and mission outcomes.
3. Develops and implements IT standards, methods, and policies for the Coast Guard.
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4. Has final approval authority for all IT systems and projects. Responsible for oversight of
IT investment and review process.
5. Is the central authority over IT systems architecture and development, with program
managers executing IT development funds. Certifies key decisions for all major IT
acquisitions. Oversees the development and deployment of CG-wide IT systems.
Coordinates pre-acquisition development of IT systems.
6. Advises senior management on whether to modify or terminate IT projects.
7. Monitors and evaluates the performance of information systems on the basis of specific
IT performance measures and their linkages to Coast Guard outcome measures.
8. Develops and administers service-wide information lifecycle management
policies/procedures, including the creation, use, maintenance, and disposition of records.
Coordinates the scheduling of records contained in IT systems; and ensures that
automated information systems are scheduled in accordance with National Archives and
Records Administration (NARA) requirements.
9. Develops and administers the Coast Guard Information System Security program element
of the Coast Guard Security Program. Provides policy guidance for Coast Guard
Automated Information System (AIS) security.
10. Chairs the Information Technology Management Board.
11. Through the Research, Development, and Technology Management Program, selects,
develops, and manages technology-based solutions for operational, logistical, and
management challenges.
9.3.3.1 Office of Enterprise Architecture and Governance (CG-66)
Commandant (CG-66):
1. Establishes and maintains Coast Guard IT architecture with input from IT program
managers.
2. Monitors configuration management/release control on all systems.
9.3.3.2 Office of Enterprise Applications Management (CG-63)
Commandant (CG-63):
1. Coordinates with Commandant (CG-65) to ensure that systems have security
certifications.
2. Reviews and evaluates all Automated Information System (AIS) proposals. For
financial/mixed systems, works with Commandant (CG-84) to review
RFAM/financial/mixed related AIS proposals prior to approval by the CIO.
9.3.3.2.1 Financial Systems Management Division (CG-632)
Commandant (CG-632):
1. Establishes policy and performs centralized management of all phases of the system
development life cycle (SDLC) for enterprise financial applications CG-wide.
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2. Serves as the customer interface for the introduction of all new financial business
requirements.
3. Manages enterprise architecture (EA) coordination and provides oversight for the design,
development, or acquisition of new financial applications, as well as the operation,
maintenance, and enhancement of legacy applications.
9.3.4 Headquarters, Area, and District Programs
These entities:
1. Use finance and procurement systems authorized by Commandant (CG-8) to conduct
business functions.
2. Cooperate with Commandants (CG-84) and (CG-913) to provide timely information as
required to respond to various external sources, including Q&As from Congress and data
calls from DHS and OMB.
3. Provide information as required to maintain the Financial Management System
Inventory.
9.3.5 Coast Guard Training Center Petaluma
Subject to the availability of funding, TC Petaluma:
1. Hosts FPD Training Team which conducts “C” school for FPD training.
2. Integrates, through SK “A” school, most of the Basic FPD functions and other courses as
needed (e.g., Oracle training for Fixed Assets, FLS, etc.) into their school curriculum as it
applies to an SK3.
9.3.6 Coast Guard Training Center Yorktown
Subject to the availability of funding, TC Yorktown hosts the FPD “C” school training
conducted by the FPD Training Team.
9.3.7 All Coast Guard Units
1. Use approved finance and procurement systems to conduct business.
2. Use Acquiring Microcomputer Resources, COMDTINST 5230.55 (series), located online
at http://www.dcms.uscg.mil/directives, and Standard Workstation III Configuration
Management Policy, COMDTINST 5200.16 (series), located online at
http://www.dcms.uscg.mil/directives, as guides to determine the quantity of SWS
equipment necessary to create, store, and transmit finance and procurement data.
For additional responsibilities related to the design, integration, use, maintenance, training, and
security of Coast Guard financial and mixed systems, refer to Financial Resource Management
Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 9 (Coast Guard
Financial and Mixed Systems).
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9.4 CFO and CIO Cooperation
The CFO Act of 1990 and the Clinger-Cohen Act outline the requirements for cooperation
between the CFO and the CIO.
The CFO and CIO shall work together (under the direction of the agency head) to establish
policies and procedures to ensure that:
1. Accounting, financial, and asset management systems of the executive agency are
designed, developed, maintained, and used effectively to provide financial or program
performance data for the agency’s financial statements.
2. Financial and related program performance data is provided on a reliable, consistent, and
timely basis to executive agency financial management systems.
3. Financial statements support:
a. Assessments and revisions of mission-related processes and administrative processes
of the executive agency; and
b. Measurement of the performance of investments made by the agency in information
systems.
9.5 Financial and Mixed Systems Requirements
Finance functions shall be carried out using systems approved by the Assistant Commandant for
Resources (CG-8).
Unapproved development of financial and mixed systems places an unacceptable burden on
Coast Guard personnel. With a computer on every desk, many people often fall into the trap of
trying to develop their own system to solve/automate a unique business process, ignoring the
benefits that accrue from the integration of common business processes across organizational
units. These efforts usually start off small, but frequently spin out of control with the potential to
waste thousands of dollars and hundreds of staff hours on efforts that ultimately must be
abandoned. Instead, people who see an opportunity to automate or otherwise improve a process
are more productive when they consult with the financial and procurement functional area and
systems experts at Headquarters to discuss their idea for a system. Efforts then can be channeled
to ensure that requirements are met quickly and in a cost-effective manner. In addition,
processes have been put in place to ensure the integrity of data entered into Coast Guard
financial and mixed use systems. For example, the use of data scripts to modify financial data in
Coast Guard systems now must first be approved by Headquarters to ensure the integrity of data
that has a financial impact to CG financial statements or reports.
9.5.1 Financial Management Data Integrity
Federal laws and regulations require Federal agencies to establish internal controls over financial
management systems. Adhering to sound financial policies is an integral part of an
organization’s internal control structure. This policy establishes controls over the Coast Guard’s
management of its financial system configuration, including the use of scripts, and mitigates risk
to financial data integrity through the implementation of high-level review and approval for any
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scripts or changes to financial management and mixed-use systems that result in a financial
impact to financial statements or reports.
The Coast Guard’s senior financial officer serves as the single point of authority, accountability,
and management for Coast Guard financial policy, procedures, processes, and requirements for
systems, including instances serving other bureaus such as the Transportation Security
Administration (TSA). This authority includes the design, configuration management,
development, implementation, operation, and maintenance of financial management and mixed
systems, and the stipulation of data assurance processes. The Coast Guard Director of Financial
Operations/Comptroller, Commandant (CG-8C), acting under technical authority as delegated
from the Assistant Commandant for Resources, is authorized to approve changes to system
configuration that impact the financial integrity of data and all reports that contain financial
information. This includes scripts and system changes that have a financial impact. The
Director of Financial Operations/Comptroller, Commandant (CG-8C), through the Office of
Financial Policy, Reporting, and Property, Commandant (CG-84), reviews and approves data
scripts prior to their use in any Coast Guard financial and/or mixed system.
Further, the Director of Financial Operations/Comptroller, Commandant (CG-8C), is authorized
to pre-approve any scripts deemed necessary to efficiently perform normal operations. Pre-
approval to run a script is generally used when a system limitation creates a recurring need.
For detailed responsibilities and procedures on requesting and approving scripts and system
changes to financial management and mixed-use systems that result in a financial impact to
statements or reports, refer to Financial Resource Management Manual – Procedures (FRMM-
P), COMDTINST M7100.4 (series), Chapter 9, Section 9.5.1 (Financial Management Data
Integrity).
9.5.1.1 Data Scripts (Scripts)
The Coast Guard uses data scripts (hereinafter, simply referred to as “scripts”) to address
functionality and data quality issues with ALMIS, CAS, NESSS, and other mixed-use financial
systems. Scripts are computer programs written in a scripting language that run outside of the
system application to insert, delete, update, or modify data within the system. Scripts
immediately address issues that may also require further development. Typically, scripts are
executed to:
1. Serve as compensating controls for a software deficiency; and
2. Make mass changes to system data when the normal user interface is too inefficient or
time-consuming.
The utilization of scripts is necessary for maintaining normal day-to-day operations. However,
there is an inherent risk each time a script is executed because scripts can change data directly or
indirectly at the operating system level, independent of the software that normally stores and
analyzes the data.
Changing data directly or indirectly at the operating system level of a financial or mixed-use
financial system may result in a financial impact to statements or reports. There are certain
scenarios where a script is executed in the sub-ledger/subsidiary ledgers that would eventually
lead to a financial impact in the general ledger (GL). This would occur when the modified data
is transferred or posted to the GL. The financial impact is defined as a SC or SCR, that:
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1. Alters GL balances or changes the dollar amount on a transaction between the source
document and the GL account transaction (e.g., scripts that correct NFC payroll interface
transactions, resetting flags to allow batches to process, and modifying retirement dates to
the current fiscal year);
2. Changes financial data used to properly assign the dollar amount to the accounting
classification in the GL financial data (e.g., reclassification of transactions to correct cost
centers, object classes, multiple accounting lines affected with net zero dollar change);
3. Changes or adds U.S. Standard General Ledger (USSGL) transaction code (TC) posting
logic (e.g., transaction code table and GL translator changes);
4. Changes the accounting classification or GL accounts posted in the GL; or
5. Changes financial GL account set-ups or rules.
9.5.1.2 Policy
In an effort to reduce the level of risk to financial data integrity, the Coast Guard will only run
scripts with a financial impact when authorized by the Office of Financial Policy, Reporting, and
Property (CG-84) or preapproved by the Director of Financial Operations/Comptroller,
Commandant (CG-8C) as part of the quarterly review process. Coast Guard will only implement
system change requests that have a financial statement impact when authorized by Commandant
(CG-8C).
1. Commandant (CG-8C) shall approve all system change requests (SCRs), and other
system configuration management (SCM) tasks or modifications that have a financial
impact on the financial statements and/or reports.
2. Commandant (CG-84) shall approve all script requests (SRs) with financial impact.
3. Pre-approval for a script is automatically revoked if the singular and cumulative actual
financial impact exceeds $1,000,000 per fiscal year.
4. The Coast Guard provides financial services to TSA using CAS. Therefore, if a script
impacts more than one agency at a time, the dollar value impact to the other agencies will
be included in the calculation of the $1,000,000 threshold. However, Coast Guard
Headquarters (CGHQ) will no longer approve scripts that only impact TSA. TSA will be
responsible for review and approval of all scripts that impact their organization and
maintain the proper internal controls, documentation and management controls over their
script approval process. CGHQ will continue to approve TSA SCRs.
9.5.2 Financial Systems
The Coast Guard’s primary authorized financial systems are:
1. Core Accounting System (CAS) – the primary accounting system for the Coast Guard
and the Transportation Security Agency (TSA), which hosts a suite of applications at the
Coast Guard FINCEN in Chesapeake, VA. The CAS suite includes the following
applications:
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a. Oracle Federal Financials (OFF) – Oracle Corporation’s commercial off-the-shelf
(COTS) product that includes such modules as Accounts Receivable, Assets, Projects,
Inventory, Accounts Payable, Purchasing, and General Ledger;
b. Sunflower – Sunflower Systems’ COTS asset property management system used by
TSA;
c. Finance and Procurement Desktop (FPD) – GOTS enterprise-wide accounting and
procurement system assigned to assist in funds and procurement management;
d. Workflow Imaging Network System (WINS) – 170 Systems’ COTS document
imaging and processing system, which assists with Coast Guard accounts payable and
receivable; and
e. Contract Information Management System (CIMS) – Compusearch Software
Systems’ COTS PRISM procurement management system.
2. Naval and Electronic Supply Support System (NESSS) – the general ledger (GL)
system for the SFLC/Yard. NESSS supports daily business activities, including Supply,
Finance, Procurement, Depot Maintenance, and Provisioning. The primary purpose of
NESSS is to consolidate and adjust the sub-ledger accounts into the GL to report to CG
TIER. The NESSS GL data is imported into CG TIER in a text file format.
3. Asset Logistics Management Information System (ALMIS) – supports the
administration and documentation of all aircraft maintenance, including Fiscal
Accounting, Air Station Supply, Depot Supply, Depot Maintenance, and Engineering
Services. ALMIS maintains a general ledger of these activities. The ALMIS GL data is
imported into CG TIER.
4. Coast Guard Treasury Information Executive Repository (CG TIER) – a financial
data formatting tool containing summarized and consolidated financial data relating to
Coast Guard operations. The data found in this database is rolled up into Department of
Homeland Security (DHS) TIER. This is the general ledger of record for the Coast
Guard.
9.5.3 Mixed Systems
In addition to the primary Coast Guard financial systems, there are also mixed (financial)
systems. The Chief Financial Officer shall approve the use of all mixed systems.
Following is a list of the primary mixed systems. For a complete listing of approved mixed
systems, contact the Office of Financial Policy, Reporting, and Property, Commandant (CG-84).
1. Configuration Management Plus (CMPlus);
2. Direct Access;
3. Direct Access II/GlobalPay;
4. Fleet Logistics System (FLS);
5. NPFC Case Information Management System (NPFC-CIMS); and
6. Shore Asset Management (SAM) system.
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9.5.4 FPD Authorized for Service-Wide Use
FPD is the preferred procurement and funds management software package authorized for
service-wide use. FPD is the Coast Guard Standard Workstation III-compatible version, and
includes enhanced purchasing, funds management, reconciliation, reports, requisitions, and travel
capabilities.
9.5.5 Inventory of Finance and Procurement Systems
OMB Circular A-123 requires the Coast Guard to yearly update the inventory of existing and
proposed financial management systems. This information is necessary to complete the CFO
five-year Financial Management Plan and to manage finance and procurement systems.
Financial management systems shall be included in the Coast Guard’s information systems
inventory, following the information system inventory policies established in OMB Circular
A-130. All cognizant program managers shall provide information to Commandant (CG-84) to
maintain this inventory. This database shall be used to prepare various reports and answer
various data calls.
9.5.6 Data Entry Transmission
Efficient and effective management of finance and procurement requires the electronic
transmission of data between many different people. Critical elements of this are the digital
signature and electronic commerce.
Best practices use of digital signature and electronic commerce capabilities shall be built into all
financial and mixed systems. Finance and procurement data shall be electronically
entered/captured one time at the source. From then on, it shall be moved electronically with
minimal intervention. This makes use of a standard system in order to reduce data entry and
other redundancies and, thus, control costs.
9.5.7 Commercial Off-the-Shelf/Government Off-the-Shelf (COTS/GOTS)
1. Coast Guard personnel shall use COTS/GOTS financial and mixed financial systems, and
shall develop systems only when a COTS solution is unavailable. Where practical,
business processes shall generally be changed to accommodate the COTS/GOTS system.
2. Coast Guard personnel shall not customize COTS/GOTS systems beyond that authorized
by the vendor; e.g., Oracle extensions are allowed, but changes to the code are not.
Changing code in COTS/GOTS products limits the ability to upgrade the packages in the
future. As a result, costs and time needed to maintain systems quickly become
prohibitive.
3. Financial and procurement systems shall be upgraded so that they never become more
than two versions behind the latest release of the COTS/GOTS products.
9.5.8 Standard Products
In order to minimize costs, the Coast Guard shall use a standard database and a standard suite of
applications for financial and mixed systems.
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9.5.9 Comparability and Consistency
1. The design of financial management systems shall conform to the guidelines of FSIO,
reflecting an agency-wide financial information classification structure that is consistent
with the U.S. Standard General Ledger (USSGL), which provides for tracking of specific
program expenditures and covers financial and financially-related information.
2. Financial management system designs shall support agency budget, accounting, and
financial management reporting processes by providing consistent information for budget
formulation, budget execution, programmatic and financial management, performance
measurement, and financial statement preparation.
9.5.10 Integrated Financial Management Systems
1. Financial management systems shall be designed to provide for the effective and efficient
interrelationship between software, hardware, personnel, procedures, controls, and data
contained within the systems. Specific guidance on these requirements is included in
Standard Workstation III Configuration Management Policy, COMDTINST 5200.16
(series).
2. In conforming to these requirements, the systems shall have the following characteristics:
a. Common data elements;
b. Common transaction processing;
c. Consistent internal controls; and
d. Efficient transaction entry; i.e., wherever appropriate, data needed by the systems to
support financial functions shall be entered only once, and other parts of the system
shall be updated through electronic means consistent with the timing requirements of
normal business/transaction cycles.
9.5.10.1 Systems that Do Not Interface with FPD
Program managers who sponsor existing systems that do not interface with FPD and that create
obligations or result in the recording of direct charges on unit program element status (PES)
shall have the electronic transfer of data to FPD as part of any system upgrades. Any such
upgrades shall be reviewed by Commandant (CG-8) prior to development.
9.5.11 U.S. Standard General Ledger at the Transaction Level
Financial events shall be recorded throughout the financial management system, applying the
requirements of the USSGL at the transaction level.
9.5.12 Federal Accounting Standards
Financial management systems shall maintain accounting data to permit reporting in accordance
with the accounting standards recommended by FASAB and issued by the Director of OMB, and
the reporting requirements issued by the Director of OMB or the Secretary of the Treasury.
Where no accounting standards have been recommended by FASAB and issued by the Director
of OMB, the systems shall maintain data in accordance with the applicable accounting standards
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used by the agency for preparation of its financial statements. Agency financial management
systems shall be designed flexibly to adapt to changes in accounting standards.
9.5.13 Financial Reporting
The financial management system shall meet the reporting requirements established by FSIO,
OMB, Treasury, and DHS.
9.5.14 Budget Reporting
Financial management systems shall enable the Coast Guard to prepare, execute, and report on
the budget in accordance with the requirements of OMB Circular A-11, Preparation,
Submission, and Execution of the Budget, and other guidance issued by OMB.
9.5.15 Functional Requirements
Financial management systems shall conform to existing applicable functional requirements for
the design, development, operation, and maintenance of financial management systems.
Functional requirements are defined in a series of publications entitled Federal Financial
Management Systems Requirements issued by FSIO. Additional functional requirements may be
established through OMB circulars and bulletins, and Treasury Financial Manual.
9.5.16 Computer Security Act Requirements
Program managers shall plan for and incorporate security controls in accordance with the
Computer Security Act of 1987 and OMB Circular A-130 for those financial management
systems that contain “sensitive information” as defined by the Computer Security Act.
Specific requirements for system security and accreditation are listed in U.S. Coast Guard
Cybersecurity Manual, COMDTINST M5500.13 (series) (FOUO).
9.5.17 Documentation
1. Financial management systems and processing instructions shall be clearly documented
to allow ready access in accordance with:
a. Requirements contained in the Federal Financial Management Systems Requirements
documents published by FSIO; and
b. Other applicable requirements.
2. All documentation (e.g., software, system, operations, user manuals, operating
procedures) shall be kept up-to-date and be readily available for examination.
3. System user documentation shall provide sufficient detail to permit a person,
knowledgeable of the agency’s programs and of systems in general, to obtain a
comprehensive understanding of the entire operation of each system.
4. Technical systems documentation, such as requirements documents, systems
specifications, and operating instructions, shall be adequate to enable technical personnel
to operate the system in an effective and efficient manner.
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9.5.18 Internal Controls
1. Financial management systems shall include sufficient internal controls to ensure that:
a. Resource use is consistent with laws, regulations, and policies;
b. Resources are safeguarded against waste, loss, and misuse; and
c. Reliable data is obtained, maintained, and disclosed in reports.
2. Appropriate internal controls shall be applied to all system inputs, processing, and
outputs. Such system-related controls form a portion of the management control
structure required by OMB Circular A-123, Management’s Responsibility for Internal
Control.
3. Documentation of internal controls shall be sufficient to satisfy external audit
requirements.
9.5.19 Training and User Support
1. Adequate training and appropriate support shall be provided to all users of financial
management systems to enable them to understand, operate, and maintain the systems to
which they are assigned.
2. Program managers shall ensure that all users are appropriately trained and qualified
before allowing them access to the system. Such training shall assure that users are
adequately versed in the rules of the system’s operation.
3. Because training is expensive, systems shall be designed and training developed with
close attention to training costs.
4. Training shall be an integral part of the system, and shall consist of a blend of:
a. Schools;
b. Helpdesk;
c. On-the-job training (OJT);
d. Help facilities; and
e. Computer-based training.
5. Cost-effective employee qualification standards that follow best business practices shall
be established and adhered to.
9.5.20 Licenses
Most software, including applications, databases, and related tools, have licensing requirements.
1. Software project managers for finance and procurement systems shall develop,
implement, and operate systems only if the required licenses are in place. Pursuant to
this requirement, project managers shall obtain required automated information systems
approval from Commandant (CG-63) prior to obtaining licenses.
2. Planning and budgeting for finance and procurement systems shall include provisions for
applicable licenses. Project managers are responsible for procuring the appropriate
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number of licenses for their projects and shall ensure that this number is not exceeded.
Project managers shall provide license management information to Commandants
(CG-63), (CG-84) and (CG-86).
3. To achieve efficiency and effectiveness, the Coast Guard designates certain pieces of
software as the standard for use throughout the Coast Guard (e.g., Oracle Financials for
accounts receivable applications). For finance and procurement systems, the Coast
Guard CFO, with the advice and consent of the CIO, establishes the standard software to
be used. The list of standard financial software shall be published on the Resources
Directorate website.
4. To implement this software standardization policy, the Coast Guard stocks various
licenses. Existing Coast Guard-owned licenses are mandatory sources of supply for all
development, implementation, and operation of finance and procurement systems.
Commandant (CG-66) is the stocking point for Oracle databases and other Oracle
business products. Commandant (CG-66) shall publish Standard Operating Procedures
(SOPs) on license requisitioning on the Information and Technology Architecture
website. Commandant (CG-66) is authorized to designate distribution points for software
licenses and to establish SOPs for the operation of distribution points. Written
authorization shall be obtained from Commandants (CG-84), (CG-86), and (CG-66) prior
to obtaining Oracle licenses for finance and procurement systems other than the Coast
Guard stocks.
9.5.21 Maintenance
1. Ongoing maintenance of the financial management systems shall be performed to enable
the systems to continue to operate in an effective and efficient manner.
2. Program managers shall periodically evaluate how effectively and efficiently the finance
and procurement management systems support the agency’s changing business practices,
and shall submit recommended changes (modifications) to Commandant (CG-86).
9.5.22 Centralized User Administration (CUA) of the Finance and
Procurement Desktop (FPD)
This Subsection establishes policy for the creation, verification, and maintenance of user
accounts within the Coast Guard’s Finance and Procurement Desktop (FPD) system. It also
stipulates requirements for the establishment of a Unit Approved Plan (UAP) that addresses the
separation of duties to be maintained within the system. Guidance is provided for:
1. The assignment and certification of FPD user accounts;
2. Monitoring and maintenance of FPD user accounts; and
3. The UAP and separation of duties.
For detailed responsibilities and procedures for the creation, verification, and
maintenance of user accounts within the FPD, refer to Financial Resource Management
Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series), Chapter 9, Section
9.5.22 (Centralized User Administration of the Finance and Procurement Desktop).
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9.5.22.1 Authorities
1. Federal Financial Management Improvement Act of 1996 (FFMIA).
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia
2. Federal Information Security Management Act of 2002.
http://csrc.nist.gov/drivers/documents/FISMA-final.pdf
3. Federal Managers’ Financial Integrity Act of 1982 (FMFIA).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
4. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
5. Office of Management and Budget, Memorandum M-13-23, Appendix D to Circular No.
A-123, Compliance with the Federal Financial Management Improvement Act of 1996,
September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
6. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
9.5.22.2 Responsibilities
9.5.22.2.1 Centralized User Administration Help Desk
1. The following roles shall be performed exclusively by the CAS TIER I Help Desk
(hereinafter, referred to as the “Help Desk”), and shall never be assigned to anyone
outside the Help Desk or the FINCEN FPD help/support staff:
a. FPD User Administrator;
b. Integrated Budget System (IBUDS) User Administrator; and
c. Warrant Management User Administrator.
2. The Help Desk shall perform all system administration functions except those delineated
for local account managers in this policy.
9.5.22.2.2 FPD Local Account Manager
FPD Local Account Manager’s role shall contain all of the essential privileges to perform
account manager functions at the local or field unit level.
9.5.22.3 Policy for FPD Management
9.5.22.3.1 Assignment and Certification of FPD User Accounts
1. Users and local account managers shall be centrally managed and assigned to the separate
User Management System (UMS) for the FPD application.
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2. All users (including existing FPD users and system administrators) shall complete and
submit a user request through the online Automated Access Request (AAR) system by
selecting the appropriate job description roles based on their current duties and
responsibilities. AAR is available on the FINCEN Intranet at:
http://www.dcms.uscg.mil/directives.
3. Supervisors shall certify that the requested job description requirements present no
known “separation of duties” conflicts with the access to be granted. The assignment of
roles shall be based upon the selected job description, as validated by the supervisor.
9.5.22.3.2 Monitoring and Maintenance of FPD User Accounts
1. User authorization
a. FPD user authorization contains no implied authorization to access any computer
system of the United States Government and will be revoked on separation,
retirement, reassignment of duties, change of organization, or when determined by the
information system security officer to be in the best interest of the Government.
b. Supervisors must confirm that users are authorized to access the computer systems
and modules identified on the user request form. Supervisors and users must
remember that access for purposes beyond the scope of authorization is a violation of
Federal law (18 USC 1030 et al.). FPD local account managers shall work with users
and supervisors to ensure proper selection of roles and privileges in FPD, based on
current duties.
2. User activity monitoring
a. To protect the Core Accounting System (CAS) from unauthorized use and to ensure
that the system is functioning properly, system administrators shall monitor user
activity.
b. Individuals using the system without authority, or in excess of their authority, are
subject to having all of their activities on the system monitored and recorded by
system personnel.
3. Password maintenance
FPD shall be configured to comply with DHS, Coast Guard, and FINCEN password
protections.
4. Audit trail generation and documentation; periodic internal and external reviews
a. The Automated Access Request system shall provide an audit trail and permanent
record of user access requests, approvals, and modifications for each user account in
the FPD application.
b. The Help Desk and database administrators shall periodically review the applications
and database audit log. Additionally, audit logs shall be reviewed by both the
database administrators and an external party to ensure compliance with security and
user access policies.
c. Audit trail records shall be maintained online for at least 90 days, thereby allowing
rapid access to recent information. Audit trails shall be preserved for a period of
seven years as part of managing records for CAS to allow audit information to be
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placed online for analysis with reasonable ease. Preservation of the audit information
shall be part of the FINCEN IT contingency and disaster recovery plans.
5. User account removal and re-enabling
A user’s account shall be disabled upon the transfer, termination, or reassignment of the
user.
6. Locking/disabling inactive user accounts
a. All accounts shall be locked after 45 days of inactivity.
b. All accounts shall be disabled after 90 days of inactivity.
7. User account maintenance priorities
The online Automated Access Request system shall provide users with priority levels.
9.5.22.3.3 Unit Approved Plan (UAP)/Separation of Duties
Per Office of Management and Budget (OMB), Circular A-123, key duties and responsibilities in
authorizing, processing, recording, and reviewing official agency transactions should be
separated among individuals. Managers should exercise appropriate oversight to ensure
individuals do not exceed or abuse their assigned authorities.
This policy addresses the internal controls to ensure that segregation of duties exists within the
role-based assignment of privileges in the Core Accounting System (CAS) suite of financial and
mixed systems.
1. Each Coast Guard unit, HQ directorate/division, and staff component shall develop and
promulgate a UAP for the management and operation of CAS suite at its location.
2. UAPs shall be specifically designed to address adequate segregation of duties to ensure
that standards for internal controls are designed in accordance with Federal standards for
internal controls contained within OMB Circular A-123.
3. These controls, at a minimum, shall emphasize adequate segregation of duties. Different
roles have various abilities to affect a transaction or business event, such as making
purchases, authorizing purchases and payments, certifying funding, and reviewing and
auditing. No one individual should control all key aspects of a transaction, so it is vital
that proper segregation of duties is established in the UAP and adhered to by all CAS
users of that respective unit (see Subsections 5.6.3.3 (Policy) and 3.8.5 (Segregation of
Duties)). The following guidelines shall be observed in preparing and updating UAPs:
a. A written UAP shall be signed by the Commanding Officer or Officers-in-Charge,
(for field units), the Office Chief (for HQ directorates, areas, and logistics/service
center commands), or the Resource Division Chief or equivalent O-5 in the financial
chain of command (for Districts or other units not captured above). The signature
authority may be delegated in writing to an Executive Officer, Deputy, Logistics
Department Head, or equivalent O-5 in the financial chain of command. The written
delegation of signature authority must accompany the signed submission of the UAP.
Delegated signature on the UAP shall not have privileges/roles assigned in the CAS
suite of financial and mixed systems. Submission of the signed UAP validates that
the UAP is designed to ensure adequate segregation of duties as described in this
Subsection. The UAP must be digitally signed and submitted to FINCEN as a PDF
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document via CGFIXIT. Underway cutters without access to CGFIXIT may submit
their UAPs via email to FIN-SMB-CustomerService@USCG.MIL. Emailed UAPs
from shore based units will not be accepted. UAPs will be stored in Coast Guard
Common Core (CGCC) portal site for a period of at least six years and three months.
b. The UAP shall be updated whenever UAP personnel change duties. At a minimum,
an updated copy of the UAP will be submitted each fiscal year. UAPs shall be
retained by the Unit for three years.
c. The UAP shall be utilized to ensure proper assignment of roles in the CAS suite
based on current duties and responsibilities. UAPs shall be updated whenever an
individual leaves a unit or CAS suite access requirements change.
d. Users shall be removed from financial systems in the CAS suite when determined that
access is no longer required. Removal must be done through the Automated Access
Request (AAR) system as removal from the UAP does not initiate removal from the
system.
e. No user shall be granted access to the CAS suite if they are not current on all training
as required by position and duties, including Antideficiency Act (ADA) training (see
Subsection 5.6.3.3 (Policy)). The UAP signature authority shall verify that ADA
training was completed by all individuals listed in the UAP and include a statement as
such on the UAP submission. FINCEN shall reject all UAPs without this statement.
Signature authorities shall ensure ADA training remains current for all individuals
listed in the UAP and shall update the UAP and initiate AAR action to remove user
access for those individuals with lapsed ADA training.
f. FINCEN shall review UAP submissions upon receipt of any user access request for
that Unit and shall reject any UAP that does not have required signatures.
g. Users shall be assigned the minimum roles necessary to carry out their unit
responsibilities. FINCEN will maintain a crosswalk between member position
responsibilities and corresponding FPD roles.
4. UAPs shall include all CAS suite roles as well as the following minimum elements:
OPFAC, FPD local account manager name, rank/rate, phone number, e-mail address, and
unit mailing address.
5. Although the CAS suite has inherent safeguards and internal controls to preclude fraud
against the Government (e.g., no one user can both create and approve a purchase
request), it is incumbent upon the unit to design internal controls at the unit level to
ensure adequate segregation of duties for all accounts under their control (See
Subsections 5.6.3.3 (Policy) and 3.8.5 (Segregation of Duties)).
6. It is recognized that a single user may be a funds manager, buyer or reconciler to perform
other roles for one or more accounts at a unit. However, a single user may not fill
multiple roles on the same transaction. If a unit is unable to meet the segregation of
duties standards with the personnel in their unit, they must utilize their financial chain of
command.
7. All CAS suite users who approve commitments, or who create or approve obligations,
shall be documented on the UAP for each field unit, HQ directorate, area, or
logistics/service center command. CAS suite users who only create and submit
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procurement requests shall not be included on the UAP. These users will receive partial
Basic User privileges.
8. An incident specific UAP, meeting the requirements of this Section, will be created and
submitted for major incident responses that are supported by personnel from multiple
units.
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Appendix 9-1 Key Legislation and Regulations
This appendix provides information on legislative initiatives and regulations that significantly
influence Coast Guard financial accounting practices.
Appendix 9-1.1 Clinger-Cohen Act/ITMRA
The Clinger-Cohen Act, previously known as the Information Technology Management Reform
Act (ITMRA) of 1996, contains the following aspects/requirements:
1. Establish a Chief Information Officer (CIO).
2. Develop a “capital planning and investment control” process for IT, the primary elements
to include:
a. Selection of IT investments to be made by the Coast Guard, the management of those
investments, and the evaluation of the results of those investments;
b. Integration of this methodology with Coast Guard processes for making budget,
financial, and program decisions; and
c. Development of performance goals/measures for each operating IT System.
3. Develop a “modular contracting” strategy for each IT project under development. This
allows for managing contract deliverables, cost, and insertion of technology advances.
Additional information may be found at the following web address:
https://cio.gov/wp-content/uploads/downloads/2013/01/2012-Learning-Objectives-Final.docx.
Appendix 9-1.2 Chief Financial Officers Act of 1990, as amended
The CFO Act mandates that agency CFOs develop and maintain agency financial management
systems that comply with applicable accounting principles, standards, and requirements; internal
control standards; and the requirements of OMB, the Department of the Treasury, and others.
Additional information may be found at the following web address:
http://www.gao.gov/special.pubs/af12194.pdf.
Appendix 9-1.3 Federal Managers’ Financial Integrity Act (FMFIA)
The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 requires agency heads to
establish controls that provide reasonable assurances that:
1. Obligations and costs comply with applicable law;
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2. Funds, property, and other assets are safeguarded against waste, loss, unauthorized use,
or misappropriation; and
3. Revenues and expenditures are properly recorded and accounted for.
Appendix 9-1.4 Federal Financial Management Improvement Act (FFMIA)
The Federal Financial Management Improvement Act (FFMIA) of 1996 requires each agency to
implement and maintain financial management systems that comply substantially with Federal
requirements, applicable Federal accounting standards, and the USSGL at the transaction level.
Additional information may be found at the following web address:
https://obamawhitehouse.archives.gov/omb/financial_ffs_ffmia.
Appendix 9-1.5 Government Performance Results Act (GPRA)/PL 103-62
The Government Performance Results Act (GPRA) of 1993 requires agencies to develop
strategic plans, set performance goals, and report annually on actual performance compared to
goals. As the Federal Government implements this legislation, these plans and goals should be
integrated into:
1. The budget process;
2. The operational management of agencies and programs; and
3. Accountability reporting to the public on performance results and on the integrity,
efficiency, and effectiveness with which they are achieved.
Appendix 9-1.6 National Institute of Standards and Technology – Special
Publication 800-18
This publication, Guide for Developing Security Plans for Federal Information Systems,
addresses the development of security plans that document the management, technical, and
operational controls for Federal automated information systems. It also provides guidance for
individuals responsible for IT security at both the system level and the organization level. It is
written specifically for individuals with little or no computer security expertise. Auditors,
managers, and IT security officers can also use the document as an auditing tool. The concepts
presented are generic, and can be applied to organizations in private and public sectors.
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Appendix 9-1.7 OMB Circular A-11, Part 7
OMB Circular A-11, Part 7, “Planning, Budgeting, Acquisition, and Management of Capital
Assets,” revised November 2009, provides the annual update of guidance on these issues.
Appendix 9-1.8 OMB Circular A-123
Management’s Responsibility for Internal Control, revised December 21, 2004, provides
guidance to Federal managers on improving the accountability and effectiveness of Federal
programs and operations by establishing, assessing, correcting, and reporting on internal control.
The circular also provides guidance on using the range of tools at the disposal of agency
managers to achieve desired program results and to meet the requirements of the Federal
Managers’ Financial Integrity Act (FMFIA).
Additional information may be found at the following web address:
https://www.whitehouse.gov/omb/information-for-agencies.
Appendix 9-1.9 OMB Circular No. A-123, Appendix D
Appendix D to Circular No. A-123, Compliance with the Federal Financial Management
Improvement Act of 1996, September 20, 2013, prescribes policies and standards for executive
departments and agencies to follow concerning their financial management systems.
It also defines new financial management system requirements for determining compliance with
the FFMIA.
Additional information may be found at the following web address:
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/.
Appendix 9-1.10 OMB Circular A-130
Management of Federal Information Resources, Revised, Transmittal Memorandum No. 4,
November 28, 2000, establishes policy for the management of Federal information resources.
OMB includes procedural and analytic guidelines for implementing specific aspects of these
policies as appendices. Agencies must establish and maintain a capital planning and investment
control process that links mission needs, information, and information technology in an effective
and efficient manner.
Additional information may be found at the following web address:
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
Appendix 9-1.11 FSIO: Framework for Financial Management Systems
Framework for Federal Financial Management Systems sets forth the vision, desired
capabilities, performance outcomes, environment, and other attributes that all Federal financial
management systems must be designed to support. The Framework provides a model for
integrated financial management systems in the Federal Government.
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Appendix 9-1.12 FSIO: Core Financial System Requirements
Core Financial System Requirements, January 2006, contains a list of functional capabilities
(i.e., established Governmentwide requirements) that a qualified system must deliver to be
considered qualified for agency acquisition. The requirements in this document represent a
complete list of functional capabilities deemed mandatory for qualified financial management
systems by the Government.
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Appendix 9-2 Resource, Financial, and Asset Management (RFAM) Task
Group
To meet goals embodied in legislation, the Coast Guard in 1997 established the Resource,
Financial, and Asset Management (RFAM) Task Group and a working group to review energy
conservation and fuel consumption issues pertaining to cutters, aircraft, and facilities. This
appendix summarizes the goals and functions of the RFAM Task Group.
Appendix 9-2.1 Goal of the RFAM Task Group
1. The goal of the RFAM Task Group was to identify major gaps in compliance between
Coast Guard business systems and processes and the existing RFAM requirements. The
objectives included the following:
a. Receipt of an unqualified opinion for the FY99 CFO Act audit. An unqualified
opinion means that the financial statement data accurately reflects the results of
operations, the internal controls are effective, and the prevailing laws are observed.
b. Successful Implementation of GPRA and Federal Cost Accounting Standards. The
implemented solution must conform to the guidelines established by DOT, OMB, and
Congress for FY99, as well as cost standards prescribed by JFMIP (currently known
as FSIO) and FASAB.
c. Successful Resource Management of Multi-year/Multi-account Appropriations.
Success means being able to respond to Coast Guard management needs and to
completely and accurately answer OMB and congressional questions in a timely
manner.
d. Development of an enterprise-wide system architecture and strategic plan to achieve
the Coast Guard technology vision. The enterprise-wide system architecture includes
effective integration of related existing and emerging information systems. Effective
integration means that the systems are implemented and maintained enterprise-wide
in a cost-effective manner consistent with Coast Guard business objectives.
e. Coast Guard Process-Management Model Integration.
f. Implementation Approach (from Coast Guard Functions to Specific Applications to
Coast Guard-wide Systems).
g. Functional statements for the CFO, CIO, and Commandant (CG-8).
2. The key points that were derived from the RFAM Task Group included:
a. The cost of managing, operating, and maintaining redundant systems is high.
b. We must avoid redundant systems in order to provide finance and procurement
services to the Coast Guard at the lowest possible costs.
c. A large number of systems and their diverse interconnections make it difficult to
introduce new, more integrated solutions.
d. Key processes within the family of functions must be fully automated.
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For more information on the contents of the task group, refer to RFAM within the U.S. Coast
Guard Final Report, May 1999.
Appendix 9-2.2 Family of Functions
Based on the Management Model, the Family of Functions was derived for each primary
function. The functions for the general framework of responsibilities are required within the
overall management context. The Family of Functions also contains several subprocesses that
are directly affected by RFAM Systems and management of resources.
1. Planning and Direction, composed of:
a. Strategic Planning;
b. Budgeting (Formulation, Presentation, and Justification);
c. Forecasting; and
d. Analysis.
2. Finance and Procurement, composed of:
a. Budget Execution, Planning, Forecasting, Analysis;
b. Contracting/Procurement;
c. General Ledger; and
d. Cost Accounting.
3. Human Resources, composed of:
a. Payroll/Personnel Records;
b. Medical;
c. Education/Training/Development;
d. Recruiting/Assignment/Travel;
e. Workforce Planning;
f. MWR;
g. CGES;
h. Commissaries; and
i. Work-Life.
4. Engineering and Logistics, composed of:
a. Civil Engineering;
b. Aviation Engineering;
c. Naval Engineering;
d. Electronic Engineering; and
e. Logistic Engineering.
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5. Operations, defined by the CG Performance Goals:
a. Safety;
b. Human and Natural Environment;
c. Mobility;
d. Economic Growth and Trade; and
e. National Security.
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Chapter 10. Property, Plant, and Equipment (PP&E)
10.1 Introduction
This Chapter specifies policy for financial accounting and reporting of property, plant, and
equipment PP&E, including general PP&E and stewardship PP&E (heritage assets and
stewardship land).
PP&E is defined as tangible assets (real or personal) that:
1. Have an estimated useful life of two or more years;
2. Are not intended for sale in the ordinary course of business; and
3. Are intended to be used by or be available for use by the entity.
General PP&E is any property that is primarily used to produce goods or services or to support
the mission of the entity. Other than Heritage Assets or Stewardship Land, all Coast Guard
PP&E shall be categorized as general PP&E and may include, but are not limited to the
following:
1. Real Property – land, buildings and structures, construction in progress, and capital
improvements;
2. Personal Property – furniture and fixtures, equipment, vehicles, internal use software
(IUS), constructed assets, Construction in Progress (CIP), and capital improvements; and
3. Capital Leases.
Coast Guard general PP&E may be funded from any Coast Guard appropriation; however, it is
generally funded with the following appropriations:
1. Operations & Support (O&S) – one-year funds designated for minor acquisitions used in
the purchasing, improvement, rebuilding, and maintenance of assets.
Note: Coast Guard’s 2017 Appropriation language (and presumably all subsequent
appropriations) specifically allows the use of Operations & Support (O&S) funding
ONLY for the purchase, lease, or improvement of other equipment (at a unit cost of no
more than $250,000). Other equipment with a unit cost of greater than $250,000 shall be
purchased with Acquisition, Construction and Improvements (PC&I) funding. This new
authority does not apply to operating materials and supplies or “equipment” items that are
part of a larger asset. These items are not subject to this $250,000 threshold. Other
equipment excludes inventory, operating materials and supplies, and stockpile items as
defined by the Federal Accounting Standards Advisory Board.
2. Procurement, Construction, and Improvement (PC&I) – multi-year funds for the
acquisition of new capital assets, construction of new facilities, and improvements to
existing facilities and capital assets.
3. Industrial (e.g., Yard Fund) – non-expiring funds receiving advances to execute repairs
and improvements to Yard facilities and assets (e.g., vessels and boats) and to purchase
the equipment needed to assist in these activities.
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4. All general PP&E assets acquired by the Coast Guard must be recognized for
accountability and financial reporting purposes by applying the proper accounting
treatment (e.g. capitalization) and the reporting of associated accumulated depreciation or
amortization on the Coast Guard financial statements.
Stewardship PP&E consists of tangible assets classified as heritage assets or stewardship land.
Heritage assets are assets possessing significant educational, cultural, or natural characteristics;
and are generally expected to be preserved indefinitely. Stewardship land is land acquired via
public domain or at no cost; other than that acquired for or in connection with general PP&E.
The remainder of this Chapter is divided into six sections:
10.2 Financial Accounting and Reporting of Capitalized Real Property;
10.3 Financial Accounting and Reporting of Capitalized Personal Property;
10.4 Deferred Maintenance;
10.5 Cost Decision Table and Notes;
10.6 Financial Accounting and Reporting of Capital and Operating Leases; and
10.7 Stewardship PP&E (Heritage Assets and Stewardship Lands).
Note: Sections 7.5 through 7.8 of this Manual establish policy for the accounting treatment of
all personal and real property including OM&S and inventory, but the focus of Chapter 10 is
financial and accounting for general PP&E (e.g., assets acquired via construction in progress and
leased assets) and stewardship PP&E.
10.2 Financial Accounting and Reporting of Capitalized Real
Property
This Section provides policy for the capitalization of real property assets, including those assets
acquired through purchase or resulting from Construction in Progress (CIP) projects.
CIP consists of the costs of the direct materials, direct labor, direct purchased services, and
indirect costs used in producing customized (constructed, fabricated, and/or assembled) real
property, whether fabricated by the Coast Guard or by a non-Coast Guard organization under
contract, including Military Interdepartmental Purchase Request (MIPR).
Examples of construction in progress are the costs of additions, alterations, improvements,
rehabilitations, and replacements of Coast Guard assets. Upon asset delivery/acceptance, these
costs shall be transferred to the proper capital asset account as the acquisition cost of the item.
This policy applies to all capitalizable real property assets (general PP&E) acquired or
constructed by the Coast Guard. This policy is effective for all new real property projects
initiated on or after 1 October 2005. In addition, this policy details the requirements for all life
cycle events within the acquisition, sustainment, and disposition phases of real property. It
requires all real property and associated transactions to be recorded timely and accurately in the
appropriate general ledger accounts and to be reported in the financial statements in accordance
with generally accepted accounting principles (GAAP).
For detailed procedures and responsibilities regarding the financial accounting and reporting of
capitalizable real property assets acquired or CIP recorded and reported costs, refer to Financial
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Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4 (series),
Chapter 10, Section 10.2 (Financial Accounting and Reporting of Capitalized Real Property).
10.2.1 Purpose
The purpose of this Section is to provide policy for the financial accounting and reporting of
capitalized real property assets acquired from purchase, CIP, or another method (e.g., donations,
gifts, or transfers) so that recorded and reported amounts are in compliance with laws, rules and
regulations, including generally accepted accounting principles (GAAP) and FASAB guidance.
This policy also requires that recorded and reported amounts have adequate supporting
documentation at the transaction level.
10.2.2 Scope
Real property includes all land, buildings, and structures, as outlined in the General Services
Administration (GSA) Guidance from the Federal Real Property Council (FRPC) rules. Real
property does not include personal property, which is defined as all expendable and non-
expendable, tangible assets including aircraft, vessels, boats, vehicles (including trailers), and
other mobile assets.
This policy is applicable to all real property owned, leased, under easement, permit, license or
other types of use, or in the "custody and control" of the Coast Guard. Real property may be
US Government-owned real property acquired on behalf of the Coast Guard; lands reserved or
withdrawn from the public domain for Coast Guard purposes; real property permitted from/to
other Federal agencies; Federal properties assigned to Coast Guard; non-US Government-
owned real property leased by or for the Coast Guard using delegated authorities from the
GSA or authorities issued to the Coast Guard by Congress. Similarly, this Manual applies to
real property interests by gift, bequest, or otherwise acquired.
10.2.3 Authorities
1. Chief Financial Officers Act of 1990 (“CFO Act”).
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
2. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards and
Concepts, July 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant and Equipment,
November 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
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5. Financial Accounting Standards Board, Statement of Financial Accounting Standards
No. 153, Exchanges of Nonmonetary Assets.
http://www.fasb.org/cs/BlobServer?blobkey=id&blobnocache=true&blobwhere=117582
0921534&blobheader=application%2Fpdf&blobcol=urldata&blobtable=MungoBlobs
6. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.1, “Property, Plant and Equipment”.
http://cfo-policy.dhs.gov/default.aspx
10.2.4 Responsibilities
The following Subsections list the offices and their respective responsibilities for real property
CIP project accounting.
10.2.4.1 Assistant Commandant for Resources (CG-8)
Commandant (CG-8) develops, promulgates, and implements Coast Guard financial
management policy for real property CIP project accounting used by Headquarters
program/facility managers, FINCEN, area and district commanders, field unit commanding
officers, and officers-in-charge.
10.2.4.2 Funds Control Division (CG-831)
Commandant (CG-831) provides centralized management of the Procurement, Construction, and
Improvement (PC&I) appropriation.
10.2.4.3 Office of Financial Policy, Reporting & Property (CG-84)
Commandant (CG-84):
1. Provides oversight, analysis, and financial management standards for all real property
CIP project accounting.
2. Develops procedures for tracking and accounting for real property CIP projects.
3. Oversees the implementation of internal controls for CIP project accounting.
4. Convenes the CIP Project Group as necessary to evaluate the setup of capitalizable
projects. This group consists of the:
a. Acquisition project manager;
b. Resource manager;
c. Sponsor representative;
d. Independent operational test and evaluation advisor; and
e. Commandant (CG-831) representative.
5. Requires that all project managers (PMs) are designated in writing.
6. Requires consistency between HQ program offices in the treatment of costs and the
application of labor overhead.
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7. Provides guidance to the Aviation Logistics Center (ALC), the Surface Forces Logistics
Center (SFLC)/Yard, and HQ program offices on the development of indirect rates,
including composition, basis for application, and variance analysis.
8. Develops high-level standard operating procedures (SOP) for the creation, monitoring,
and closeout of CIP projects.
10.2.4.4 Office of Financial Systems Business Requirements (CG-86)
Commandant (CG-86)
1. Designates/designs and certifies all financial systems, including hardware and software
for real property CIP projects.
2. Ensures that all designed financial systems provide adequate systematic controls.
10.2.4.5 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913):
1. Provides guidance to Coast Guard contracting officers (KOs) to ensure that KOs
understand the reasons why project/financial managers need to clearly identify the
different types of real property assets (land, buildings, structures) that will be
constructed/purchased via contracts and/or IAAs/MIPRs.
2. Provides guidance to Coast Guard KOs to ensure that they understand why
project/financial managers are requesting the use of separate contract line item numbers
(CLINs) with separate accounting information if the contract will procure different types
of assets (personal or real property) via the same contract.
3. Requires that every contract with the Coast Guard for the development or delivery of
capital assets of $50,000 or greater has the requirement for a signed acceptance report,
such as Material Inspection and Receiving Report, Form DD 250/DHS 700-21;
Solicitation/Contract/Order for Commercial Items, Form SF 1449; or Order for Supplies
or Services, Form OF 347, in order to document the valuation and/or acceptance date of
Coast Guard assets (when applicable to Real Property projects).
10.2.4.6 Finance Center (FINCEN)
FINCEN:
1. Maintains general ledger balances and supporting documentation for valuation of CIP
projects and real property.
2. Monitors construction and improvement projects to ensure that timely capitalization of
completed assets occurs.
3. Assists Commandant (CG-84) in developing a high-level SOP for the creation,
monitoring, and closeout of CIP projects.
4. Creates additional detailed SOPs for CIP processes conducted within FINCEN.
5. Provides financial information and reports pertaining to CIP projects to HQ program
offices.
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10.2.4.7 Headquarters Program Offices
Acquisitions, Commandant (CG-9); Major Acquisition Projects, Commandant (CG-93);
Engineering and Logistics, Commandant (CG-4); and Office of Enterprise Infrastructure
Management, Commandant (CG-64):
1. Provide the PM name and organizational information to Commandant (CG-84) for each
project that can potentially meet the Coast Guard capitalization thresholds.
2. Acts as POC for FINCEN and Commandant (CG-84) for the related financial status of
CIP projects.
3. Ensure that PMs timely, completely, and accurately record capitalized assets.
4. Manage and monitor the distribution of project funds.
10.2.4.8 Districts, FD&CCs, CEUs, and Field Units through SILC
At times, the districts, facility design and construction centers (FD&CCs), Civil Engineering
Units (CEUs), and field units provide support for Coast Guard CIP projects. The work
performed is typically associated with building or improving Coast Guard real property assets.
10.2.4.9 The assistant P/RM at the districts, FD&CC, and CEUs:
1. Retains procurement, acquisition, and transfer documents.
2. Develops, promulgates, and implements local policy and procedures as necessary for the
management of real property CIP projects.
3. Completes timely and accurate review and certification of real CIP projects on a monthly
basis.
4. Coordinates with Commandant (CG-43) to notify FINCEN/Commandant (CG-84) of
upcoming Real Property CIP Projects & submits the Project Management Data Sheet
(PMDS) via SharePoint.
5. Ensures the timely and accurate recording of assets from CIP projects into the appropriate
system, with FINCEN staff as appropriate.
6. Provides the financial status of CIP projects to Commandant (CG-84).
7. Acts as POC for Commandant (CG-43) and Commandant (CG-84) for the related
financial status of CIP projects.
8. Develops any necessary office-level SOPs to support the standardized CIP SOP.
10.2.5 Recognition and Valuation of Real Property (including CIP)
Real Property CIP consists of the costs for direct materials, direct labor, direct purchased
services, and indirect costs used in producing customized (constructed, fabricated, and/or
assembled) real property, whether fabricated by the Coast Guard or by a non-Coast Guard
organization under contract, including Military Interdepartmental Purchase Request (MIPR).
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Examples of construction in progress are the costs of additions, alterations, improvements,
rehabilitations, and replacements of Coast Guard assets. Upon asset delivery/acceptance, these
costs shall be transferred to the proper capital asset account as the acquisition cost of the item.
In general, most costs incurred after the concept development stage (e.g., a feasibility study
completed, if required) that are required to bring an asset to its required form and location are
considered part of the asset’s value. Although these concept development and/or feasibility
study costs are not capitalized as part of the asset costs, most other costs are capitalized.
However, in many large Coast Guard capital projects, there are support-type costs incurred after
the asset has been placed “in service/accepted.” Costs incurred after the asset has been accepted
may be exactly the same in form and function as project costs incurred before the asset is
accepted (e.g., parts used to assemble the asset versus parts used to support operations after the
asset has been accepted). These support costs will be expensed in accordance with the cost
decision table shown in Section 10.5, Cost Decision Table and Notes, 4if they are incurred after
the asset is in service/accepted.
10.2.6 Improvements
Improvements that meet the capitalization threshold for the same asset class shall be capitalized.
Improvements that result from projects that either enlarge a base asset’s capacity or improve its
capability shall be capitalized and depreciated over the remaining useful life of the base asset.
Note: The above policy shall be used for all improvements beginning 1 October 2006 (FY07),
and shall apply to all PP&E categories.
10.2.7 Costing Methodology
The Coast Guard will use one or more of the following methods for establishing the full cost of
its assets. These methods are listed in order of preference:
1. Directly tracing costs wherever economically feasible;
2. Assigning costs on a cause-and-effect basis;
3. Allocating costs on a reasonable and consistent basis.
In general, there are two types of costs, direct and indirect, that must be included, on an accrual
basis, in the full cost of an asset.
10.2.7.1 Direct Costs
Direct costs are those that can be specifically identified with an output (asset) and that do not
require any type of assignment or allocation to drive the cost to an asset. All direct costs shall be
included in the full cost of assets. Typical examples of direct costs are:
1. Salaries and other benefits for employees who work directly on the project;
2. Materials and supplies used in the work;
3. Various costs associated with office space, equipment, facilities, and utilities, that are
used exclusively to produce the asset; and
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4. Costs of goods and services received from other segments or entities that are used to
produce the asset.
10.2.7.2 Indirect Costs
1. One type of indirect cost is PC&I labor costs, which pay for the Coast Guard personnel
who provide project oversight and support services (PC&I project and core billets). In
order to ensure that PC&I labor is adequately allocated to all PC&I-funded projects
during the capitalization process, a Coast Guard-wide PC&I labor rate is developed
during the 4
th
quarter of each fiscal year for the subsequent fiscal year by Commandant
(CG-845) and applied to projects on a monthly basis based on direct costs.
2. Typical examples of indirect costs/cost pools are:
a. General administrative services (PC&I core billets);
b. Security;
c. Rent;
d. Employee health costs;
e. Operating and maintenance costs for buildings, equipment, and utilities;
f. Program/project management services;
g. System integration and testing; and
h. Technical manuals.
10.2.7.3 Indirect Rates and Estimates
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10, Section 10.2 (Financial Accounting and Reporting
of Capitalized Real Property) for detailed procedures related to Indirect Rates and Estimates.
10.2.7.4 Expense Costs
See Cost Decision Table and Notes in Section 10.5 for multiple examples of types of costs that
are expensed.
In addition, refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10.2 (Financial Accounting and Reporting of
Capitalized Real Property) for detailed procedures related to Expense Costs.
10.2.8 Project Establishment
1. A separate six-digit program element shall be established for the direct cost associated
with each type/class of asset.
2. A separate six-digit program element shall be established for the indirect costs associated
with each type/class of asset (other than PC&I labor, which has a yearly allocation rate
for all PC&I expenditures).
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10.2.9 Project Execution
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10.2, Financial Accounting and Reporting of
Capitalized Real Property, Procedure No. 10.2.1 (Establishment of Real Property Projects) for
detailed procedures related to Project Execution.
10.2.10 Asset Receipt, Acceptance, and Enrollment - Real Property (CIP)
Note 1: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10.2, Financial Accounting and Reporting of
Capitalized Real Property, Procedure No. 10.2.1 (Establishment of Real Property Projects) for
detailed procedures related to Real Property Asset Receipt, Acceptance, and Enrollment.
Note 2: Acceptance criteria shall be established as part of the project setup process. These
criteria can be supported by third-party documentation (e.g., titles, Material Inspection and
Receiving Report, Form DD 250/DHS 700-21, release forms), or by Coast Guard documentation
based on testing criteria.
Note 3: Full and complete assets are those that meet the Coast Guard’s initial project
requirements.
Note 4: Less than full and complete assets are those that are not in a state to provide their
anticipated service. These assets shall be analyzed to ensure that incremental capability cannot
be accepted.
Note 5: “Third-party” documentation, such as contractor sign-offs (releases), internal Coast
Guard memorandum, and for real property improvements third party documentation, such as,
final invoices, Material Inspection and Receiving Report, Form DD 250/DHS 700-21, received
from the contractor are the preferred type of documentation to support valuation. In certain
instances, nonthird-party documents (e.g., military messages, internal Coast Guard memoranda,
test plan results, beneficial use documentation) will suffice as support for in-service dates.
10.2.11 Capitalization of Real Property Assets
10.2.11.1 Capitalization Standards – Thresholds
The Coast Guard capitalizes the procurement, construction, or improvement of building,
structure, shore, and waterways projects with a total unit cost (per-asset cost) of $200,000 or
greater, regardless of the appropriation in which the asset was funded. All Coast Guard
capitalization thresholds are applied to individual assets. For example, if two buildings are being
constructed at the same location by the same vendor, and one building costs $100,000 and the
second building costs $250,000, only the $250,000 building will be capitalized; the other
building will be expensed. Any activity resulting in a total unit cost below that threshold will be
expensed. These thresholds are summarized in Table 10.1 below.
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Table 10.1 Capitalization Thresholds – Real Property
Property Type Threshold
Land Capitalize All
Buildings $200,000
Structures $200,000
Note: Fixed ATON are treated as real property structures above.
10.2.11.2 Project Management Data Sheet (PMDS)
The PMDS is a document that gathers information about the projects for establishment of CIP
Project and Capitalization of assets. For example, Line of Accounting information and project
name is required on the PMDS to ensure all project costs are accounted for in the appropriate
account.
10.2.11.3 Useful and Service Lives of Real Property Assets
Coast Guard has previously used “service life” and “useful life” interchangeably in the treatment
of assets from both an accounting and an engineering perspective. However, there are times
when service life and useful life have distinct definitions that may impact both operational and
accounting treatment.
To address these distinctions Coast Guard defines useful life and service life as follows:
useful life – The normal operating life in terms of utility to the Coast Guard. This definition is
for accounting purposes and dictates the period over which an asset will be depreciated and
should always match management’s best estimate of the period the underlying asset will
continue to provide utility to the Coast Guard.
service life – The formal determination of an asset’s expected life based upon the manufacturer
or engineering analysis. The service life does not change unless a service life extending
improvement project occurs or a follow-on engineering analysis is conducted that supports the
amendment of the service life.
When PP&E assets are delivered and accepted by the Coast Guard, the title of ownership passes
to the Coast Guard regardless of any additional work that may be performed to bring the asset to
its intended use. The Material Inspection and Receiving Report, Form DD 250, Beneficial Use
Documentation, or other “title passing” acceptance document signed by a Coast Guard KO (or
designated representative) clearly establishes the date that the Coast Guard owns the asset.
The date that the KO signs the acceptance document will be established as the date-in-service
(DIS) for all Coast Guard assets, except self-constructed assets or when a specific date is stated
in the acceptance document. For self-constructed assets or assets without a Material Inspection
and Receiving Report, Form DD 250, the Coast Guard individual authorized to accept the asset
will use a Coast Guard form/memo to establish the date that the Coast Guard has accepted the
asset from the constructing entity. The asset should be taken out of the CIP account and
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capitalized based on the acceptance document DIS. A copy of the signed acceptance document
must be forwarded to FINCEN (FR).
All improvement costs that meet the base asset’s capitalization threshold will be accumulated in
CIP and added to the capitalized value of the base asset when the improvement is complete. The
base asset will continue to be depreciated during the improvement period since the asset is
technically available for use.
All capitalized real property assets (excluding Yard fund assets for which separate policy
applies) will have initial useful lives in accordance with this Subsection, using the straight-line
depreciation method with no salvage value (except for land).
10.2.11.3.1 Useful Life of Real Property
1. Land is not depreciated.
2. Buildings and structures are depreciated over the useful life of the asset, using the
straight-line method with no salvage value.
3. Changes in the useful life of an asset resulting from improvements shall be determined by
Commandant (CG-43) and reported to Commandant (CG-84) and FINCEN (FR) with
appropriate capitalization documentation, when the improvement is completed.
Table 10.2 Useful Life of Real Property
Property Type Useful Life
Land Indefinite
Buildings 40 years
Structures 20 years
10.2.12 Asset Identification
FINCEN (FR) ensures that all real property assets are identified as either land, buildings, or
structures; and entered into the designated fixed asset system.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10.2, Financial Accounting and Reporting of
Capitalized Real Property, Procedure No. 10.2.3 (Capitalization of Real Property CIP Assets) for
detailed procedures related to Asset Identification.
10.2.13 CIP Project Closeout
FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained to support
the closeout of a CIP project. This documentation includes financial decisions, reporting
requirements, and certifications for a period of three fiscal years.
Note: Refer to Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Chapter 10.2, Financial Accounting and Reporting of
Capitalized Real Property, Procedure No. 10.2.4 (Closeout and Abandonment of CIP Projects)
for detailed procedures related to PC&I Project Closeout.
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10.2.14 Exchange of Nonmonetary Assets
On an infrequent basis, the Coast Guard will exchange general PP&E assets with another entity.
The entity may be Federal or non-Federal. At the time of the exchange, a value must be placed
on the incoming asset to be recorded in the official accounting records. This Subsection provides
the accounting and valuation requirements for these situations.
10.2.14.1 Exchanges with Federal Entities
An exchange between Federal entities is called and accounted for as a transfer. The cost of the
general PP&E transferred is the cost recorded by the transferring entity net of accumulated
depreciation or amortization. If the receiving entity cannot reasonably ascertain these amounts,
the cost of the PP&E is the fair market value at the time of transfer in accordance with
Paragraph 31 of SFFAS No. 4, Managerial Cost Accounting Standards and Concepts.
10.2.14.2 Exchanges with Non-Federal Entities
In an exchange between the Coast Guard and a non-Federal entity, the cost is the fair market
value of the PP&E surrendered at the time of the exchange. If the fair market value of the PP&E
acquired is more readily determinable than that of the PP&E surrendered, the cost is the fair
market value of the PP&E acquired. If neither value is determinable, then the cost recorded for
the PP&E surrendered net of accumulated depreciation or amortization is to be used. Any
difference between the net recorded amount of the PP&E surrendered and the cost of the PP&E
acquired shall be recognized as a gain or loss. In the event that cash consideration is included in
the exchange, the cost shall be increased by the amount of the cash consideration surrendered, or
decreased by the amount of cash consideration received, in accordance with Paragraph 32 of
SFFAS No. 4, Managerial Cost Accounting Standards and Concepts.
10.3 Financial Accounting and Reporting of Capitalized Personal
Property
The Coast Guard manages and maintains financial accountability for a variety of general
property, plant, and equipment (PP&E) assets categorized as “personal property.” These assets
are managed at Coast Guard locations worldwide, and the values of the property are reflected in
the general ledger and financial reports. All unit commands where general PP&E personal
property assets are located are responsible for the proper safeguarding, management, monitoring,
accounting, and reporting of these assets.
Per OMB Circular A-136, examples of major classes of general PP&E may include, but are not
limited to, land, buildings and structures, furniture and fixtures, equipment, vehicles, and
internal use software.
Coast Guard general PP&E may be funded from any Coast Guard appropriation; however, it is
generally funded with the following appropriations:
1. Operations & Support (O&S) – one-year funds designated for minor acquisitions used in
the purchasing, improvement, rebuilding, and maintenance of assets.
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Note: Coast Guard’s 2017 Appropriation language (and presumably all subsequent
appropriations) specifically allows the use of Operations & Support (O&S) funding
ONLY for the purchase, lease, or improvement of other equipment (at a unit cost of no
more than $250,000). Other equipment with a unit cost of greater than $250,000 shall be
purchased with Acquisition, Construction and Improvements (PC&I) funding. This new
authority does not apply to operating materials and supplies or “equipment” items that are
part of a larger asset. These items are not subject to this $250,000 threshold. Other
equipment excludes inventory, operating materials and supplies, and stockpile items as
defined by the Federal Accounting Standards Advisory Board.
2. Procurement, Construction, and Improvement (PC&I) – multi-year funds for the
acquisition of new capital assets, construction of new facilities, and improvements to
existing facilities and capital assets.
3. Industrial (e.g., Yard Fund) – non-expiring funds receiving advances to execute repairs
and improvements to Yard facilities and assets (e.g., vessels and boats) and to purchase
the equipment needed to assist in these activities.
10.3.1 Purpose
This Section provides policy for the financial accounting and reporting of Coast Guard
capitalized personal property. It assists property managers, accounting personnel, and financial
personnel in understanding their roles and responsibilities relating to personal property financial
accountability. This policy requires the Coast Guard to manage transactions and record values
for personal property including:
1. Government-owned personal property acquired on behalf of the Coast Guard;
2. Personal property transferred from and used under permit from other Federal agencies;
and
3. Non-Government-owned personal property leased by or assigned to the Coast Guard.
In addition, this policy details the requirements for all life cycle events within the acquisition,
sustainment, and disposition phases of personal property. It requires all personal property and
associated transactions to be recorded timely and accurately in the appropriate general ledger
accounts and to be reported in the financial statements in accordance with generally accepted
accounting principles (GAAP).
10.3.2 Scope
This policy applies to all Coast Guard personnel and units that control, manage, and oversee
capitalized personal property assets.
This policy applies to all Coast Guard appropriations.
The term “capitalized personal property” means tangible assets having an estimated useful life of
two years or more, not intended for sale in the ordinary course of operations, acquired or
constructed with the intention of being used by or being available for use by the Coast Guard,
and meeting the capitalization thresholds outlined in this policy. Capitalized personal property
includes property owned by the Coast Guard in the hands of others (e.g., Government-furnished
property).
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For the purposes of this policy, capitalized personal property consists of:
1. Aircraft;
2. Vessels;
3. Electronic systems;
4. Electronic equipment;
5. General-purpose property (GPP);
6. Industrial equipment managed in two designated fixed asset applications, Oracle and
NESSS; and
7. Vehicles/Trailers.
Capitalized personal property can be acquired through direct acquisition, conversion, transfer,
donation, or other appropriate means. Construction in Progress (CIP) project assets may be
acquired through direct acquisition, capital lease, or fabrication, either in-house or through
contractual agreements established with external organizations.
Capitalized personal property does not include real property assets (e.g., land, buildings,
structures), inventory, operating materials and supplies (OM&S) in anticipation of physical
consumption (including repairable spares), and non-capitalized personal property. OM&S,
inventory, and internal use software are discussed in Chapter 7 in this Manual. Capitalized
personal property acquired through leases will be discussed in Section 10.6 of this chapter.
10.3.3 Modifications to Policy
It may be necessary to periodically update this policy to reflect changes in life cycle events, as
well as changes in laws, regulations, accounting standards, DHS-specific guidance, or
management objectives. Program managers shall review and oversee the policy implementation
changes in local desk guides or procedures, as appropriate.
10.3.4 Authorities
1. Antideficiency Act, as amended. 31 USC 1341-1342, 1349-1351, 1511-1519.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
3. Department of Homeland Security Financial Accountability Act. PL 108-330.
http://www.gpo.gov/fdsys/pkg/PLAW-108publ330/pdf/PLAW-108publ330.pdf
4. Federal Managers’ Financial Integrity Act of 1982 (FMFIA). PL 97-255 and
31 USC 3512 (c)(1).
https://obamawhitehouse.archives.gov/omb/financial_fmfia1982
5. 41 CFR 102-37. FMR Amendment 2006-02, “Donation of Surplus Personal Property,”
July 2008.
http://www.gsa.gov/graphics/ogp/FMR_Amnd_2006-02_FR_R2-vRB-d_0Z5RDZ-i34K-
pR.pdf
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6. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities,
March 1993.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
7. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 4, Managerial Cost Accounting Standards &
Concepts, July 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
8. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
9. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant & Equipment
(PP&E), November 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
10. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 8, Supplementary Stewardship Reporting, June 1996.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
11. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 14, Amendments to Deferred Maintenance
Reporting, April 1999.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
12. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 40, Definitional Changes Related to Deferred
Maintenance and Repairs: Amending Statement of Federal Financial Accounting
Standards 6, Accounting for Property, Plant, and Equipment, May 2011.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
13. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 23, Eliminating the Category National Defense
Property, Plant, and Equipment, May 2003.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
14. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 35, Estimating the Historical Cost of General
Property, Plant, and Equipment: Amending Statements of Federal Financial Accounting
Standards 6 and 23, October 2009.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
15. Federal Accounting Standards Advisory Board, Technical Release No. 14,
Implementation Guidance on the Accounting for the Disposal of General Property, Plant,
& Equipment, October 2011.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
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16. Office of Management and Budget, Circular A-11, Preparation, Submission, and
Execution of the Budget, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
17. Office of Management and Budget, Capital Programming Guide, Supplement to OMB
Circular A-11, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
18. Office of Management and Budget, Circular A-123, Management’s Responsibility for
Internal Control, December 2004.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
19. Office of Management & Budget (OMB), Memorandum M-13-23, Appendix D to
Circular No. A-123, Compliance with the Federal Financial Management Improvement
Act of 1996, September 2013.
https://www.whitehouse.gov/omb/information-for-agencies/memoranda/
20. Office of Management and Budget, Circular A-130, Management of Federal Information
Resources, November 2000.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
21. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
22. Department of the Treasury, Bureau of the Fiscal Service, Treasury Financial Manual,
Volume I, Part 2, Chapter 4700, “Agency Reporting Requirements for the Financial
Report of the United States Government”.
http://tfm.fiscal.treasury.gov/v1.html
23. Department of the Treasury, Bureau of the Fiscal Service, U.S. Government Standard
General Ledger, Supplement No. S2 Treasury Financial Manual [series].
https://www.fiscal.treasury.gov/fsreports/ref/ussgl/ussgl_home.htm
24. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.1, “Property, Plant and Equipment”.
http://cfo-policy.dhs.gov/default.aspx
25. General Services Administration, Federal Management Regulation (FMR),
Amendment 2008-04, “Disposition of Excess Personal Property,” Part 102-36,
February 2008.
http://www.gsa.gov/graphics/ogp/FMR2008-04.pdf
26. Annuaul AFC-3X Budget Execution and Development Process, COMDTINST 7132.6
(series).
http://www.dcms.uscg.mil/directives
27. U.S. Coast Guard Personal Property Management Manual (PPMM), COMDTINST
M4500.5 (series).
http://www.dcms.uscg.mil/directives
10.3.5 Responsibilities
The following Subsections list the offices and their respective responsibilities for financial
accounting and reporting of capitalized personal property.
COMDTINST M7100.3F
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10.3.5.1 Headquarters Offices and Remote Program Offices
Headquarters offices and remote program offices are located at Coast Guard Headquarters and
other authorized locations. Each office operates under the purview and guidance of its respective
Headquarters directorate. Headquarters directorates have the overall responsibility of ensuring
that program offices carry out their responsibilities in this policy.
The following Headquarters offices and remote program offices are pertinent to financial
accounting and reporting of capitalized personal property:
1. Assistant Commandant for Human Resources (CG-1);
2. Deputy Commandant for Operations (DCO);
3. Assistant Commandant for Engineering and Logistics (CG-4);
4. Assistant Commandant for Command, Control, Communications, Computers and
Information Technology (CG-6);
5. Assistant Commandant for Capability (CG-7);
6. Assistant Commandant for Resources (CG-8);
7. Assistant Commandant for Acquisition (CG-9); and
8. Coast Guard Inventory Controls Points (ALC, SFLC).
Headquarters offices and remote program offices shall:
1. Appoint, in writing, a project manager (PM)/resource manager who is responsible for
setting up and managing the project and project resources. Provide a copy to
Commandant (CG-43) and Commandant (CG-84) for asset capitalization acquisition
projects.
2. Require timely and accurate review of the PC&I and O&S annual budgets, once they are
completed, including Budget Board documentation, decisions, and products identifying
projects that will deliver capitalized personal property assets.
3. Notify Commandant (CG-84) of the completion of the annual budget review identifying
projects with capitalized personal property assets.
4. Manage and monitor the distribution of project funds to Coast Guard units.
5. Review and forward labor overhead rates to Commandant (CG-84) as outlined in this
policy.
6. Ensure that PMs assist with interfacing CIP-associated costs to capitalized asset
accurately and in a timely manner.
7. Ensure all data and supporting documents for capitalizable projects are available to
FINCEN (FR) within 15 calendar days of establishing the line of accounting. This
documentation will ultimately be used to support valuation, rights, useful life, and date in
service for the individual asset being capitalized.
8. Ensure that the ICPs are provided a copy of the CIP Establishment Package (if they are
part of the project – e.g., purchasing assets, receiving spare parts) to ensure that CIP costs
are captured and reported appropriately.
COMDTINST M7100.3F
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9. Ensure timely review of the CIP Analysis Report and provide necessary corrections to
Commandant (CG-84) by the end of the month when the report is received.
10. Review and provide the final CIP Capitalization Package information to Commandant
(CG-84) within 45 days of receipt/acceptance of the capitalized personal property asset.
11. Develop desk procedures to support capitalized personal property policy and procedures.
12. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support HQ program office decisions, reporting requirements, and certifications for the
life cycle of the asset plus three fiscal years.
10.3.5.2 Project Manager (PM)
The project manager shall:
1. Contact and coordinate with Commandant (CG-84) to arrange a CIP project
establishment meeting within 15 days of the receipt of the project funding for new
projects.
2. Prepare the CIP Establishment Package and the CIP Capitalization Package as outlined in
this policy.
3. Update the CIP Establishment Package and the CIP Capitalization Package and
communicate with Commandant (CG-84) as changes occur.
4. Establish and maintain data elements such as PM name, as well as other data fields
contained on the PMDS project initiation form.
5. Provide point of contact (POC) information to Commandant (CG-43) and Commandant
(CG-84) for the related financial status of CIP projects.
6. Prepare and forward labor overhead rates to program offices as outlined in this policy.
7. Provide oversight of CIP projects, including approvals and updates of asset completion
delivery schedules, budget compliance, indirect cost methodologies, asset acceptance
criteria, number and types of assets being delivered. Communicate this information to
Commandant (CG-43) and to Commandant (CG-84).
8. Implement local desktop instructions for management of specific CIP projects and ensure
that they are in alignment with established Coast Guard policies and procedures.
9. Perform timely review of all project transactions in the appropriate reports and provide
updates and corrections to Commandant (CG-84) and FINCEN (FR) by the end of the
month for reports received during the month.
10. Report asset delivery schedule changes to Commandant (CG-43) and Commandant
(CG-84) as they occur.
11. Prepare, analyze, and provide the completed CIP Capitalization Package to Commandant
(CG-84) and the accepting unit’s APO/RPSO, as applicable, within 45 calendar days of
asset receipt/acceptance.
12. Forward the final approved CIP Package to the accepting unit’s APO/RPSO, as
applicable, once it is received from FINCEN
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13. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support PM decisions, reporting requirements, and certifications for the life cycle of
the asset plus three fiscal years.
10.3.5.3 Office of Aeronautical Engineering (CG-41)
Commandant (CG-41) shall:
1. Plan, program, and budget for the acquisition and/or replacement of aircraft as needed to
meet service-wide mission requirements.
2. Determine the service life of new categories of aircraft and report this information to
Commandant (CG-84) and FINCEN (FR) at the time of capitalization of the first asset
within that category.
3. Conduct a formal annual review to document the service lives of aircraft and report this
information to Commandant (CG-84) and FINCEN (FR) to adjust useful life as necessary
in the financial system.
4. Annually review configuration of aircraft and report major configuration changes to
Commandant (CG-84) and FINCEN (FR).
5. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-41) decisions, reporting requirements, and certifications for
the life cycle of the asset plus three fiscal years.
10.3.5.4 Office of Naval Engineering (CG-45)
Commandant (CG-45) shall:
1. Plan, program, and budget for the acquisition and/or replacement of vessels as needed to
meet service-wide mission requirements.
2. Determine the service life of new categories of vessels and report this information to
Commandant (CG-84) and FINCEN (FR) at the time of capitalization of the first asset
within that category.
3. Conduct a formal annual review to document the service lives of vessels and report this
information to Commandant (CG-84) and FINCEN (FR) to adjust useful life as necessary
in the financial system.
4. Annually review configuration of vessels and report major configuration changes to
Commandant (CG-84) and FINCEN (FR).
5. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-45) decisions, reporting requirements and certifications for
the life cycle of the asset plus three fiscal years.
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10.3.5.5 Office of Enterprise Infrastructure Management (CG-64)
Commandant (CG-64) shall:
1. Plan, program, and budget for the acquisition and/or replacement of electronic systems,
stand-alone equipment, and hand-held property as needed to meet service-wide mission
requirements.
2. Determine the service life of new categories of electronics and report this information to
Commandant (CG-84) and FINCEN (FR) at the time of capitalization of the first asset
within that category.
3. Conduct a formal annual review to document the service lives of electronics and report
this information to Commandant (CG-84) and FINCEN (FR) to adjust useful life as
necessary in the financial system.
4. Develop, promulgate, and implement policy and procedures for the management of
electronic systems and equipment.
5. Provide oversight and analysis of policy and procedures for physical inventories of
electronics.
6. Attest to the completeness and existence of all capitalized electronic systems.
7. Maintain configuration property lists of electronic assets and provide annual property
certifications to FINCEN (FR) via Commandant (CG-84).
8. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-64) decisions, reporting requirements, and certifications for
the life cycle of the asset plus three fiscal years.
10.3.5.6 Office of Aviation Forces (CG-711)
Commandant (CG-711) shall:
1. Plan, program, and budget for the acquisition and/or replacement of capitalized aviation
assets as needed to meet service-wide mission requirements.
2. Work collaboratively with Commandant (CG-41) to determine the service life of newly
capitalized aviation assets and report this information to Commandant (CG-84).
3. Work collaboratively with Commandant (CG-41), to conduct a formal annual review to
document the service lives of existing capitalized aviation assets and report this
information to Commandant (CG-84) and FINCEN (FR) to adjust useful life as necessary
in the financial system.
4. Attest, in the fourth quarter of the fiscal year, to the completeness, existence, and status
of capitalized, leased, loaned, and borrowed aviation assets.
5. Account for and provide annual property certification for all capitalized aviation assets to
FINCEN (FR) via Commandant (CG-84).
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-711) decisions (e.g., increases/decreases in project funding,
changes to delivery schedule), reporting requirements, and certifications for the life cycle
of the asset plus three fiscal years.
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10.3.5.7 Office of Cutter Forces (CG-751)
Commandant (CG-751) shall:
1. Plan, program, and budget for the acquisition and/or replacement of capitalized cutter
assets as needed to meet service-wide mission requirements.
2. Work collaboratively with Commandant (CG-45) to determine the service life of newly
capitalized cutter assets and report this information to Commandant (CG-84).
3. Work collaboratively with Commandant (CG-45), to conduct an annual review of service
lives of existing capitalized cutter assets and report this information to Commandant
(CG-84) and FINCEN (FR) to adjust useful life as necessary in the financial system.
4. Attest, in the fourth quarter of the fiscal year, to the completeness, existence, and status
of capitalized, leased, loaned, and borrowed cutter assets.
5. Account for and provide annual property certification for all capitalized cutter assets to
FINCEN (FR) via Commandant (CG-84).
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-751) decisions, reporting requirements, and certifications
for the life cycle of the asset plus three fiscal years.
10.3.5.8 Office of Boat Forces (CG-731)
Commandant (CG-731) shall:
1. Plan, program, and budget for the acquisition and/or replacement of all boats as needed to
meet service-wide mission requirements.
2. Determine the service life of newly capitalized categories of boats and report this
information to Commandant (CG-84) and FINCEN (FR).
3. Conduct a formal review of the service lives of existing capitalized boats and report this
information to Commandant (CG-84) and FINCEN (FR) to adjust useful life as necessary
in the financial system.
4. Attest, in the fourth quarter of the fiscal year, to the completeness, existence, and status
of all boats.
5. Account for and provide annual property certification for all boats to FINCEN (FR) via
Commandant (CG-84).
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-731) decisions, reporting requirements, and certifications
for the life cycle of the asset plus three fiscal years.
10.3.5.9 Office of Budget and Programs (CG-82)
Commandant (CG-82) shall:
1. Review and coordinate current and proposed program priorities involving near term
policies, legislation issues, policy implementation, and resource allocation in support of
program planning and execution and budget formulation.
COMDTINST M7100.3F
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2. Monitor budget rescissions and/or supplemental appropriations Coast Guard-wide.
3. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-82) budget decisions, approvals, reporting requirements,
and certifications for three fiscal years.
10.3.5.10 Office of Resource Management (CG-83)
Commandant (CG-83) shall:
1. Coordinate with directorates to identify and allocate approved Coast Guard budgets to
specific projects and assets.
2. Monitor budget rescissions or supplemental appropriations and redistribute funding
allocations as necessary.
3. Records budget authority (based on the approved apportionment) via FPD in the Core
Accounting System and informs Commandant (CG-84), FINCEN (FR), and all POCs.
4. Forward DHS/OMB-approved apportionments to PMs/resource managers for distribution
at the six-digit program element level (AFC/Agency Location Code/program element).
5. Approve internal FTAs and CIFPs, in accordance with established thresholds and notify
the appropriate resource directorate.
6. Use the designated financial system to ensure that Coast Guard funds are obligated timely
and accurately.
7. Ensure that audit-compliant evidential budget execution documentation is maintained at
appropriate levels to support Commandant (CG-83) budget decisions, approvals,
reporting requirements, and certifications for three fiscal years.
10.3.5.11 Division of Budget Execution (CG-831)
Commandant (CG-831) shall:
1. Provide centralized management for execution of Coast Guard funds.
2. Coordinate with funds managers to reconcile appropriations and transfer funds for all
programs, projects, and activities at least quarterly.
3. Monitor validations of Coast Guard undelivered orders for completeness and accuracy.
4. Ensure that audit-compliant evidential budget execution documentation is maintained at
appropriate levels to support Commandant (CG-831) budget decisions, approvals,
reporting requirements, and certifications for three fiscal years.
10.3.5.12 Office of Financial Policy, Reporting, & Property (CG-84)
Commandant (CG-84) shall:
1. Develop, promulgate, and enforce the personal property financial accounting and
reporting policy used by all Coast Guard organizational components.
2. Provide oversight for the preparation of the financial statements required by this policy
and CFO reporting requirements. Perform a review of these financial statements.
COMDTINST M7100.3F
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3. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-8) financial decisions, approvals, reporting requirements,
and certifications for three fiscal years.
4. Ensure that CIP establishment packages are completed for new projects and that they
contain the appropriate approval signatures and dates.
5. Develop all CIP standard forms, such as PMDS project establishment and PMDS asset
capitalization.
6. Ensure that CIP standard forms are distributed and available to PMs.
7. Review and approve PMDS capitalization plans and ensure that they are capitalized
timely and accurately within 90 days of asset receipt/acceptance.
8. Develop, review, approve, and distribute PC&I labor rate cost allocations to CIP projects.
9. Review, approve, and distribute labor overhead cost allocations to CIP projects.
10. Monitor and validate the recording of PC&I labor overhead in CAS Project Accounting
(PA) module for CIP projects.
11. Review, analyze, and approve CIP capitalization packages.
12. Stipulate GAAP-compliant financial accounting and reporting requirements along with
internal controls relative to CIP personal property assets to ensure alignment with this
policy.
13. Provide guidance as necessary relating to personal property procedures and their
implementation, along with testing of internal controls.
14. Assist PMs in the preparation of CIP capitalization packages, as requested.
15. Coordinate with PMs the review of CIP project transactions to ensure accuracy and
alignment with policy.
16. Plan and assist with the execution of physical inventories of capitalized personal
property.
17. Provide oversight and review to FINCEN (FR) for the preparation, review, and analysis
of monthly, quarterly, and annual financial statements.
18. Develop and implement project accounting training on a semi-annual basis.
19. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-84) financial decisions, approvals, reporting requirements,
and certifications for the life cycle of the asset plus three fiscal years.
10.3.5.13 Director of Contracting and Procurement (CG-91)
Commandant (CG-91) shall:
1. Assist PMs in developing and processing procurement requests (PRs) for the acquisition
of personal property.
2. Serve as the principal technical authority for contract regulations and laws and act as
advisors to Commandant (CG-9) and Coast Guard management on personal property
acquisition issues.
COMDTINST M7100.3F
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3. Monitor contracting officers’ decisions on procurement and contracting issues.
4. Serve as the source selection authority responsible for selecting contractors for all
personal property acquisition requirements.
5. Ensure compliance with Coast Guard Acquisition Procedures (CGAP), Department of
Homeland Security Acquisition Manual, and Coast Guard financial accounting and
reporting policy for the acquisition, management, and reporting of personal property
assets.
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-91) financial decisions, approvals, reporting requirements,
and certifications for three fiscal years.
10.3.5.14 Director of Acquisition Services (CG-92)
Commandant (CG-92) shall:
1. Perform business case analyses to assess the scope, budget, and expected performance
results of projects involving the acquisition of personal property assets.
2. Administer funds controlled by Commandant (CG-9) within appropriation or operating
guidelines.
3. Oversee the completion of all designated Commandant (CG-9) personal property
procurements.
4. Perform all resource management functions within Commandant (CG-9) to include
planning, programming, budgeting, execution, and financial management.
5. Provide direct business and financial support to PMs and develop appropriate metrics to
monitor program performance.
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-92) financial decisions, approvals, reporting requirements,
and certifications for three fiscal years.
10.3.5.15 Office of Procurement Policy & Oversight (CG-913)
Commandant (CG-913) shall:
1. Implement the policy and procedures prescribed in Coast Guard Acquisition Procedures
(CGAP), for the acquisition of personal property assets, in alignment with Coast Guard
financial accounting and reporting policy.
2. Administer, manage, and submit the annual contractor report of all Government-
furnished property, in accordance with Department of Homeland Security Acquisition
Manual.
10.3.5.16 Remote Accounting Facilities (ALC Fiscal Operations and Yard
Financial Operations)
The remote accounting facilities shall:
COMDTINST M7100.3F
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1. Retain evidential documentation for procurement, acquisition, transfer, and retirement
transactions relative to CIP personal property.
2. Reconcile local accounting system transactions (e.g., purchase, labor) and validate with
CIP project records at month end.
3. Forward the local general ledger summary with detail transactions to FINCEN (FR)
monthly.
4. Ensure that all appropriate documentation to support CIP project costs (e.g., CIP
purchases) is scanned into the Workflow Imaging Network System (WINS).
5. Ensure that any documentation that is not in the WINS system is provided to
Commandant (CG-43) and Commandant (CG-84) on a monthly basis.
6. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support ALC and Yard financial decisions, approvals, reporting requirements, and
certifications for the life cycle of the asset plus three fiscal years.
10.3.5.17 Accountable Property Officer (APO)/Regional Property Support
Officer (RPSO)
The APOs/RSPOs, as applicable, shall:
1. Be designated in writing by the unit CO/OIC/Unit-Level Supervisor.
2. Monitor PRs for consistency with project plans and funding levels.
3. Monitor the receipt of capital property items within their unit’s purchase authority.
4. Forward evidential documentation to FINCEN (FR) within 8 calendar days of process
completion for Oracle-managed assets; or
5. Forward evidential documentation to Yard Financial Operations within 20 calendar days
of process completion for NESSS-managed assets.
6. Ensure that assets are recorded in the Oracle or NESSS systems within 10 calendar days
of forwarding to FINCEN (FR) or Yard Financial Operations.
7. Provide certifications and reports as required to support the existence and completeness
of capitalized personal property assets.
8. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support the financial decisions, reporting requirements, and certifications relative to
the direct acquisition or purchase of an asset for the life cycle of the asset plus three fiscal
years.
COMDTINST M7100.3F
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10.3.5.18 Finance Center – FINCEN (FR)
FINCEN (FR) personnel shall:
1. Maintain desk procedures for the personal property processes conducted within
FINCEN (FR).
2. Establish the CIP project number, description, program element, and link the line of
accounting to CAS PA via SharePoint.
3. Follow locally prescribed processes and make the required notifications for system
modifications to accommodate proper financial reporting.
4. Execute appropriate accounting entries upon notification to remove disposed personal
property assets from the capital asset accounts in Oracle FAM.
5. Update the general ledger balances in CAS as necessary and maintain appropriate
documentation to support the valuation of capitalized personal property assets.
6. Distribute accurate and timely CIP project accounting reports to the PMs on a monthly
basis.
7. Initiate reconciliation of personal property subsidiary records to the accounting system.
8. Review PES reports to determine if all costs are reflected in the appropriate projects.
9. Review CIP capitalization packages received from Commandant (CG-84) to ensure that
all capital and expense transactions are posted accurately and completely within the time
standards outlined in this policy.
10. Update Oracle FAM with the in-service date, useful life, and acquisition cost to calculate
asset depreciation.
11. Monitor CIP projects to ensure timely capitalization of completed projects and retain key
documentation supporting the transactions.
12. Publish Coast Guard financial statements and footnotes containing fixed asset
disclosures.
13. Retain procurement, acquisition, transfer, and retirement documentation for capitalized
personal property assets in an audit-ready status.
14. Ensure that assets are entered into Oracle FAM from documentation received from
APOs/RPSOs, as applicable.
15. Ensure that audit-compliant evidential documentation is maintained at appropriate levels
to support the financial decisions, reporting requirements, and certifications relative to
the direct acquisition or purchase of an asset for the life cycle of the asset plus three fiscal
years.
10.3.6 Policy
Headquarters program offices, acquisition offices, APO/RPSO (as applicable), FINCEN (FR),
and Yard Financial Operations shall ensure that any companion policies (e.g., U.S. Coast Guard
Personal Property Management Manual, COMDTINST M4500.5 (series)) and locally
COMDTINST M7100.3F
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developed personal property procedures are in alignment with the policy requirements stated in
this Section.
10.3.6.1 Capital Investment Planning and Budgeting – Resource Proposals
All submissions for resources, regardless of source, must be reviewed so that any projects
containing capitalized personal property assets are identified.
1. PMs/resource managers shall ensure that resource proposals (RPs) are entered into Coast
Guard applications so that subsequent reviews can identify potential projects for
capitalizable personal property assets.
2. Commandant (CG-82) shall ensure that all recommended RPs are submitted to the
Resource Work Group (RWG) and that RPs subsequently approved by the Investment
Board (IB) are complete and clearly identify the PM and the assets associated to the RP.
3. Commandant (CG-82) shall provide Commandant (CG-84) with a listing of all IB-
approved RPs.
4. Commandant (CG-82) shall ensure that audit-compliant evidential documentation is
maintained at appropriate levels to support all RP decisions and approvals for three fiscal
years from the final IB decision.
10.3.6.2 Capital Investment Planning and Budget – Budget Review
Annual appropriation budgets, regardless of source, must be evaluated timely and accurately to
identify projects that contain capitalized personal property assets. The review of annual
appropriation budgets and subsequent increases and decreases to appropriation budgets is
necessary in order for the Coast Guard to support the completeness assertion.
1. Commandant (CG-83) shall ensure that PMs/resource managers and Commandant
(CG-84) receive all documents pertaining to Apportionment and Reapportionment
Schedule, Form SF 132, including approved, signed, and dated financial plans for all
Coast Guard appropriation budgets.
2. PMs/resource managers shall ensure that annual reviews of all Coast Guard appropriation
budgets which identify capitalized personal property assets are completed in a timely
manner (e.g., PC&I, O&S, as well as incremental increases and decreases).
3. PMs/resource managers shall ensure that reviews are adequately documented and that
evidential documentation is gathered and maintained at appropriate levels to support a
complete review.
4. PMs/resource managers shall forward the results of their budget reviews to Commandant
(CG-84).
5. PMs/resource managers shall ensure that audit-compliant evidential documentation is
maintained at appropriate levels to support appropriation-budget reviews related to their
area of responsibility for the life cycle of the asset plus three fiscal years.
COMDTINST M7100.3F
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10.3.6.3 Capitalization Thresholds
1. Capitalize procured, constructed, or improved personal property using the following table
for individual assets, regardless of the appropriation in which the asset was funded:
Table 10.3 Capitalization Thresholds – Personal Property
Asset Category Per-Asset Threshold
Internal Use Software (IUS) $750,000
Aircraft
Electronic systems (i.e., HLA) Vessels
$200,000
Boats
Buoys and ATON
Electronic stand-alone equipment
Electronic test equipment
General-purpose property
Shipbuilding equipment & machinery
Small arms
Vehicles
$50,000
Note 1: Capitalization thresholds are for accounting purposes. Please note determination
of proper appropriation by dollar amount is a separate question.
Note 2: The capitalization threshold remains at $25,000 for the following assets
purchased prior to 1 October 2003: electronic stand-alone equipment, electronic test
equipment, boats, shipbuilding equipment and machinery, small arms, vehicles, buoys
and other aids to navigation, and general-purpose property.
Note 3: ATON above are floating ATON. For fixed ATON see Table 10.1 Capitalization
Thresholds – Real Property.
2. PMs shall determine if the potential acquisition of personal property assets meets the
capitalization thresholds in the preceding table. The determination shall be documented,
signed, and dated by the PM.
3. PMs shall ensure that personal property assets that do not meet the capitalization
thresholds in the preceding table are expensed and identified as non-capitalized assets.
4. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support capitalization threshold reviews for the life cycle of the asset
plus three fiscal years.
10.3.6.4 Cost Categorization of Personal Property Projects
Categorization of costs for personal property projects is essential for determining if a project
contains capitalized assets and for determining the complete and accurate cost of an asset. Costs
primarily accumulate in three categories:
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1. Direct costs;
2. Indirect costs; and
3. Costs of identifiable supporting services provided by:
a. Other responsibility segments within the reporting entity; and
b. Other reporting entities.
The following methods, listed in order of preference, are used for establishing the full cost of
personal property assets:
1. Directly tracing costs when economically feasible;
2. Assigning costs on a cause-and-effect basis; and
3. Allocating costs on a reasonable and consistent basis.
10.3.6.4.1 Direct Costs
Per Paragraph 90 of SFFAS No. 4, Managerial Cost Accounting Standards and Concepts, direct
costs are costs that can be specifically identified with an asset and that do not require allocation.
Examples include contractor/vendor costs used to produce a specific asset. Direct costs shall be
traced to assets when economically feasible.
In some circumstances, direct costs that support numerous assets used exclusively to produce the
output(s) are allocated and not traced. Examples include office space, equipment, facilities, and
utilities.
10.3.6.4.2 Indirect Costs
Per Paragraph 91 of SFFAS No. 4, Managerial Cost Accounting Standards and Concepts,
indirect costs are costs of resources that are jointly or commonly used to produce two or more
types of outputs, but that are not specifically identifiable with any of the outputs. An example
includes PC&I labor overhead. Indirect costs shall be allocated using either the cause-and-effect
method or another documented method that is reasonable and repeatable.
10.3.6.4.3 PC&I Program Overhead
Prior to the fiscal year 2013, PC&I (then known as AC&I) program overhead costs consisted
mainly of contract expenditures that applied to Construction in Progress (CIP) projects (e.g.,
systems engineering, program management). These costs could not be directly traced to a given
project or asset and therefore were allocated to the applicable CIP projects down to the assets the
projects produced. The allocation methodology was applied to assets in a consistent, rational,
and repeatable manner, in accordance with GAAP.
However, beginning in the fiscal year 2013, PC&I program overhead costs remaining in
Commandant (CG-9) legacy overhead balances including any allocations made to CIP projects
not yet capitalized were expensed, as a result Commandant (CG-9) overhead is no longer
allocated to projects and assets. All Commandant (CG-9) PC&I program overhead costs are
expensed as incurred. In addition, all previous Commandant (CG-9) overhead allocations to
capitalized assets shall remain unchanged.
COMDTINST M7100.3F
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Approved alternate valuation methodologies shall be utilized to revalue assets received and
valued by CIP capitalization packages in the fiscal year 2012 and prior.
10.3.6.4.4 PC&I Labor Overhead
PC&I labor consists of Coast Guard civilian and military personnel costs which support all PC&I
projects within a particular appropriation year. These labor costs are pooled throughout the year
into a distinct project account. When a CIP project is completed and transferred to its
appropriate property account, the completed asset is burdened with the appropriate proportional
amount of this labor pool. Specifically, PC&I labor costs shall be allocated to assets during the
capitalization process using a fixed allocation rate based on a six year moving average rate
applied in a consistent, rational, and repeatable manner, in accordance with GAAP. The PC&I
labor rate shall be reviewed on an annual basis in the fourth quarter of the current fiscal year for
use in the subsequent fiscal year.
1. Commandant (CG-83) shall ensure that Commandant (CG-84) receives all documents
pertaining to Apportionment and Reapportionment Schedule, Form SF-132, along with
approved PC&I financial plans, including all updates based on rescissions and
supplemental appropriations.
2. Commandant (CG-83) shall ensure that positions associated with PC&I projects are
identified as such on the Personnel Allowance List (PAL) when they are created. When
vacant positions are reprogrammed, Commandant (CG-83) shall ensure changes are made
to PAL to reflect their association with PC&I projects.
3. Commandant (CG-83) shall ensure that positions identified on PAL as being associated
with PC&I projects have an associated line of accounting (LOA) that identifies them as
such for the purposes of pooling costs for financial reporting.
4. Commandant (CG-84) shall calculate PC&I labor allocation rates and determine
allocation amounts as part of the capitalization package.
5. Commandant (CG-84) shall prepare journal vouchers for the allocation of approved
PC&I labor costs to specific CIP projects upon capitalization and forward to
FINCEN(FR) via CAP package submitted via SharePoint.
6. FINCEN (FR) shall prepare, review, approve, and record the journal transactions in
CAS PA. FINCEN (FR) shall report the results via SharePoint to Commandant (CG-84),
once the journal voucher transactions are recorded. Signatures and dates shall be evident
for all preparation, reviews, approvals, and recordings.
7. Commandant (CG-84) shall annually review and adjust the PC&I labor rates from actual
expenditures based on Apportionment and Reapportionment Schedule, Form SF-132, and
Report on Budget Execution and Budgetary Resources, Form SF-133.
8. Commandant (CG-84) and FINCEN (FR) shall ensure that audit-compliant evidential
documentation for PC&I labor allocations is maintained at appropriate levels for the life
cycle of the asset plus three fiscal years
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10.3.6.5 Establishment of Personal Property Projects
After the review of budgets and the identification of projects with their associated personal
property assets to be acquired, a CIP Establishment Package will be developed. This package is
necessary to ensure that the project, the associated assets, an estimate of cost, a notional schedule
of delivery, and other key documents are produced to support the activation of information and
subsequent transactions in the budgetary execution system (FPD) and the CIP project cost
accounting system (Oracle Project Accounting module).
1. PMs shall ensure that a project team is established for capitalized projects within their
area of responsibility.
2. PMs shall ensure that the project team prepares and approves a CIP Establishment
Package.
3. PMs shall ensure that the CIP Establishment Package is completed prior to the initiation
of any project (e.g., creation of PRs).
4. Commandant (CG-84) shall ensure that the CIP Establishment Package is complete and
that it contains the appropriate approval signatures and dates.
5. PMs/resource managers shall ensure that unique program elements are established for
CIP projects.
6. FINCEN (FR) shall establish the project, relate it to a unique program element (six
characters) in CAS and communicate the information via SharePoint to, the PM, the
Commandant (CG-84) ICP Comptroller, and Yard Financial Operations.
7. PMs shall maintain and update the line of accounting information contained in the CIP
Establishment Package and shall promptly forward changes to the contract specialist,
Commandant (CG-84), FINCEN (FR), ICP Comptroller, and Yard Financial Operations.
8. PMs, contracting officers, PM/resource managers, Commandant (CG-84), and
FINCEN (FR) shall ensure that audit-compliant evidential documentation supporting
project establishment decisions and approvals related to their area of responsibility is
maintained at appropriate levels for the life cycle of the asset plus three fiscal years.
10.3.6.6 Initiation of CIP Projects
1. CIP projects that have been properly established in budgetary execution and project cost
accounting systems shall be initiated with the creation of procurement requests (PRs).
PRs are required for proper funds commitment. They provide the contracting officer the
necessary documents needed for contract award.
2. PMs shall ensure that PRs are prepared and forwarded to the applicable resource office
approval and to the applicable contracting office to execute so that the applicable costs
can accumulate in the CIP project account and are traceable to each specific asset.
3. The applicable PM Resource Office shall ensure that PRs are consistent with project
plans, funding levels, and contract funding requirements, and that they are executed
(obligated) using authorized Coast Guard budget execution applications and appropriate
acquisition guidance.
COMDTINST M7100.3F
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4. The applicable project Contracting Officer (KO) and Contracting Officer Representative
(COR) shall ensure that audit-compliant and Coast Guard Acquisition Procedures
(CGAP) compliant evidential documentation is maintained at appropriate levels to
support timely and accurate project initiation for the life cycle of the asset plus three
fiscal years.
10.3.6.7 Acquisition of Assets
Timely, accurate asset acquisition supports assets that are delivered on scheduled due dates with
traceable and supported direct costs.
Note: For ICP policy on Acquisitions, see Subsections 7.7.7.2 and 7.7.7.3.
1. The applicable project Resource Office and Contracting Office shall ensure that PRs,
contracts, and contract modifications contain a separate contract line item number (CLIN)
for each discrete asset, and that other obligation documents are promptly issued, citing
the proper document type, object class, project number, and program element so that
costs can be traced to assets.
2. The applicable project Resource Office and Contracting Office shall ensure that
obligations are issued timely and accurately in Coast Guard budgetary execution
applications and that the obligations are consistent with PM project plans and in
accordance with Coast Guard requirements.
3. The applicable project Resource Office and Contracting Office shall ensure that audit-
compliant and Coast Guard Acquisition Procedures (CGAP) compliant documentation is
maintained at the appropriate levels to support timely and accurate acquisitions and to
support appropriate invoice allocations, to the level necessary, for the life cycle of the
asset plus three fiscal years.
10.3.6.8 Accounting for Project Costs
Project cost categorization and classifications are essential for CIP balances to be properly stated
and to accurately reflect project costs. Personal property costs accumulate in CIP while
undergoing construction until delivered/accepted.
1. PMs shall ensure that all personal property is recorded at cost and that all costs are
properly accumulated, supported, and recorded. The total cost includes all necessary
costs incurred to make the asset operational for its intended use, including all costs
incurred to bring the personal property to a location suitable for intended use.
2. Commandant (CG-84) shall ensure that labor overhead costs are properly calculated,
supported, maintained, and allocated to projects and assets.
3. PMs shall review, categorize, and approve project costs to ensure the validity and
accuracy of billing documents and receiving reports, to confirm that billed materials and
services have been received and accepted, and to verify that billed amounts are identified
to the correct line of accounting.
4. PMs shall gather and review all supporting evidential documentation for CIP transactions
(expenditure level) to ensure support and proper cost categorization at the transaction
COMDTINST M7100.3F
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level. Examples of this documentation include Public Voucher for Purchases and
Services Other Than Personal, Form SF 1034 and MIPR payment detail.
5. PMs shall ensure that personal property (CIP) project costs are valued accurately and
classified in accordance with the Cost Decision Table and Notes shown in Section 4.
6. PMs and Commandant (CG-84) shall ensure that audit-compliant evidential
documentation is maintained at appropriate levels to support the timely and accurate
review of project costs for the life cycle of the asset plus three fiscal years.
10.3.6.9 Periodic Reviews of CIP Project Costs by PMs
In order to minimize retrospective cost adjustments to previously delivered assets and to ensure
that CIP project accounts are not overstated with expense costs, it is Coast Guard policy for PMs
to conduct periodic reviews of CIP project costs. See Financial Resource Management Manual
– Procedures (FRMM-P), COMDTINST M7100.4 (series), Section 10.3, Procedure No. 10.3.10
(Periodic Reviews of CIP Project Costs by PM) for detailed procedures of this review.
10.3.6.10 Periodic Reviews of CIP Project Costs by Commandant (CG-84) and
FINCEN (FR)
Proper review, approval, and oversight of CIP projects by financial and accounting personnel are
essential for accurate and timely accounting and reporting. Therefore, it is Coast Guard policy
for Commandant (CG-84) and FINCEN to conduct periodic reviews of CIP project costs. See
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Section 10.3, Procedure No. 10.3.11 (Periodic Reviews of CIP Costs by FINCEN and
CG-8) for detailed procedures of this review.
10.3.6.11 Asset Receipt and Acceptance
Assets may be accepted on a conditional basis (conditional acceptance) in circumstances where
modifications are required to further missionize the asset. Less-than-complete assets are those
that are not in a state to provide the anticipated service for which the asset is intended.
Missionization costs must be evaluated and reported as either capitalized or expensed. Full and
complete title passes to the Coast Guard for personal property and some conditional assets when
they are delivered and accepted. The receipt and acceptance of personal property assets are
always supported by appropriate documentation.
1. PMs shall ensure that acceptance documents clearly identify the asset with a specific
asset attribute, i.e., tagging and identification of assets.
2. PMs shall ensure that completed personal property assets meet the Coast Guard’s initial
project requirements prior to final acceptance.
3. PMs shall ensure that complete configuration listings for electronic systems, identifying
subcomponents, are created in the designated configuration application (e.g., Fleet
Logistics System (FLS)) to support electronic system completeness.
4. PMs shall identify and resolve deficiencies prior to the acceptance of an asset and the
transfer of its costs from the CIP account to the fixed asset account.
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5. PMs shall validate and report the receipt and acceptance, including conditional
acceptance, of CIP personal property assets to Commandant (CG-84) and the accepting
unit’s APO within 30 calendar days to support capitalization as part of the CIP
Capitalization Package.
6. PMs shall ensure that appropriate evidential documentation is gathered and submitted for
each asset. This documentation will be used for audit purposes and to support the
assertion for existence and the assertion of rights and obligations. The required
documentation for various asset classes is shown in Table 10.4 below.
Note: All documents shall have clear signatures and dates, where applicable, with
receipt/acceptance dates noted.
Table 10.4 Support Documentation for Asset Receipt and Acceptance
Asset Type Documentation
Aircraft
Material Inspection and Receiving Report, Form DD 250
or Form DHS 700-21; or CG message
Vessels
Material Inspection and Receiving Report, Form DD 250
or Form DHS 700-21; or CG message
Boats
Material Inspection and Receiving Report, Form DD 250
or Form DHS 700-21; or CG message
Electronic Systems
Material Inspection and Receiving Report,
Form DD 250; CG message; or CG HQ Program Office
memo for Rescue 21 and Hawaii Rainbow acquisitions.
Requisition and Invoice/Shipping Document,
Form DD 1149 is required for capitalization.
Vehicles
Certificate of origin date;
Requisition and
Invoice/Shipping Document, Form DD 1149; or
Material Inspection and Receiving Report,
Form DHS 700-21
Shipbuilding Equipment/
Machinery
Requisition and Invoice/Shipping Document,
Form DD 1149; Material Inspection and Receiving
Report, DD 250 or DHS 700-21; or
Order for Supplies or Services, Form OF 347
General-purpose
Requisition and Invoice/Shipping Document,
Form DD 1149; DOD Single Line Item Requisition
System Document (Manual), Form DD 1348;
Material Inspection and Receiving Report, Form DD 250
or Form DHS 700-21; Order for Supplies or Services,
Form OF 347; or Transfer Order Excess Personal
Property, Form SF 122
COMDTINST M7100.3F
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7. PMs and Commandant (CG-84) shall ensure that audit-compliant evidential
documentation supporting asset receipt and acceptance is maintained at appropriate levels
for the life cycle of the asset plus three fiscal years.
10.3.6.12 Capitalization of CIP Assets
Timely and accurate capitalization of CIP project assets is essential to accurate financial
statement preparation. It provides the Coast Guard with information on the full cost of assets
and the programs they support.
1. PMs shall ensure that assets are capitalized at the “systems level” for the Aircraft, Vessel,
Boat, and Electronic Systems categories. Systems level means that all attached
subsystems supporting the asset are included in the cost of the asset. All other categories
of assets shall be capitalized at the “asset level.”
2. PMs shall prepare and forward a CIP Capitalization Package to Commandant (CG-84)
and the accepting unit’s APO for review within 30 days of asset acceptance.
3. Commandant (CG-84) shall review the CIP Capitalization Package within 10 business
days to ensure that the documentation is complete and accurate. In the event that
additional documentation is required, Commandant (CG-84) shall communicate their
requirements to the PM for action.
4. PMs shall provide any additional information requested by Commandant (CG-84) within
three business days of the request, unless otherwise agreed upon.
5. FINCEN (FR) shall record the assets in Oracle FAM within 30 days of receipt of the
approved CIP Capitalization Package from Commandant (CG-84).
6. FINCEN (FR) shall sign the CIP Capitalization Package, and upload into SharePoint and
advance the CIP Capitalization Package to the next queue. Copies of the CIP
Capitalization Package are retained in the CIP project folder at FINCEN.
7. PMs shall review, approve, and provide to Commandant (CG-84) and the accepting unit’s
APO a supplemental CIP Capitalization Package containing any costs incurred after the
original submission.
8. Commandant (CG-84) shall review, approve, sign, and forward the CIP Capitalization
Package to FINCEN (FR) for recording. All supporting schedules and costs, including
supplemental costs, shall tie to the CIP Capitalization Package.
9. FINCEN (FR) shall record all costs captured in the CIP Capitalization Package.
10. PMs shall ensure that asset costs are not combined to meet capitalization thresholds.
11. PMs shall ensure that capitalization thresholds are applied to individual assets.
12. PMs shall ensure that activity resulting in a total unit cost below specified thresholds is
expensed.
13. PMs shall ensure that supporting documentation is available at FINCEN (FR) to support
CIP transaction (expenditure level) costs in accordance with Table 10.5 below.
14. PMs, Commandant (CG-84), and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained at appropriate levels to support the financial
COMDTINST M7100.3F
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decisions, reporting requirements, and certifications related to the capitalization process
of a CIP project for the life cycle of the asset plus three fiscal years.
Table 10.5 Documentation Required for Valuation of CIP Assets
Acquisition Type Required Documentation
Commercial
1. Signed* contract itemizing the asset
2. Receipt document
3. Invoice
4. Proof of payment
Public Voucher for
Purchases and Services
Other Than Personal,
Form SF 1034/
MIPR
1. Signed* MIPR itemizing the asset
2. Receipt document
3. Invoice
4. Proof of payment/IPAC
5. Continuation Sheet for SF 1034, Form SF 1035 (detail)
MILSTRIP
1. Issue Release/Receipt Document, Form DD 1348-1A, or
current FEDLOG screen print
2. Receipt document (Issue Release/Receipt Document,
Form DD 1348-1A, signed/dated)
3. Proof of payment/IPAC
Credit Card
1. Credit card statement itemizing the asset
2. Receipt document
3. Proof of payment
Project Order
1. Signed project order itemizing the asset
2. Receipt document
3. Proof of payment/IPAC
* indicates that the document may be signed electronically.
Note: Documentation above also applies to assets acquired via direct acquisition. See 10.3.7.18
for more information on direct purchasing of assets.
10.3.6.13 Abandonment of a CIP Project
Abandonment of a CIP project due to the destruction of the asset, technological advances,
change in mission needs, construction failure, and operational failure of prototypes is at the
discretion of the Commandant. Abandoned CIP projects contain costs for materials even though
no asset can be delivered.
1. The PM shall ensure that the appropriate decision documentation (e.g., Coast Guard
decision memorandum, Coast Guard message) is included to support the abandonment of
the project.
2. The PM shall notify Commandant (CG-84) of project abandonment and shall forward the
documentation needed to relieve the CIP account.
3. Commandant (CG-84) and the PM shall determine the retirement plan of action for
remaining CIP project materials, as outlined below:
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a. Reutilize or transfer within the Coast Guard;
b. Determine alternate uses by employing the services of other Federal agencies, such as
the Defense Logistics Agency (DLA) Disposition Services or the General Services
Administration (GSA);
c. Donate to research, museums, institutions of higher learning, foreign countries, State
governments, etc. through GSA; or
d. Scuttle, scrap, or sell.
4. Commandant (CG-84) shall approve the documentation supporting the abandonment of
the CIP project and the subsequent disposal action for CIP material, and shall forward the
documentation to FINCEN (FR). Transfer and disposal of material shall be carried out in
accordance with subsequent sections of this policy.
5. FINCEN (FR) shall expense all costs of the abandoned CIP project from which no assets
were delivered but for which costs for materials have accumulated.
6. Commandant (CG-84) and FINCEN (FR) shall ensure that audit-compliant evidential
documentation relating to financial decisions, reporting requirements, and certifications is
maintained at appropriate levels to support the abandonment of a CIP project for a period
of three fiscal years.
10.3.6.14 Project Closeout
The closeout of a CIP project ensures that all costs, including the remaining cost accruals, have
been properly classified and timely and accurately recorded.
1. PMs shall ensure that all costs have been reviewed and approved and that the asset is
ready for capitalization.
2. PMs shall verify all assets are accepted, final CIP Capitalization Package is submitted, no
invoices are expected, and no obligations remain.
3. PMs shall notify Commandant (CG-84) and FINCEN (FR) to close the CIP project in
CAS PA in order to prevent further expenditures from being recorded to the project.
4. PMs, working in conjunction with Commandant (CG-84) and FINCEN, shall deobligate
any open obligations not required for project completion.
5. PMs shall perform a comprehensive review of all CIP projects 12 months after the last
delivered asset in order to determine the status of the CIP project.
6. PMs shall report the review results to Commandant (CG-84) within 30 days of
completion of the review.
7. PMs, in conjunction with Commandant (CG-84), shall document closed projects by
preparing a CIP Project Closeout memorandum for inclusion in the asset file.
8. PMs and FINCEN (FR) shall ensure that audit-compliant evidential documentation is
maintained at appropriate levels to support the PM’s decisions, reporting requirements,
and certifications related to project closeout for the life cycle of the asset plus three fiscal
years.
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10.3.6.15 In-Service Dates
1. Personal property assets shall be capitalized within 90 calendar days of receipt and
acceptance. Appropriate evidential documentation to support in-service dates shall be
gathered and submitted for each asset. This documentation will be used for audit
purposes, to support the existence and timely capitalization of the asset and the proper
recording of depreciation, and to ensure the integrity of the financial statements.
2. PMs shall ensure that evidential documentation supports in-service dates in accordance
with Table 10.4 above. When third-party documentation is not available, PMs shall
contact Commandant (CG-84) for alternative documentation authorization.
3. PMs, Commandant (CG-84), and FINCEN (FR) shall ensure that audit-compliant
evidential documentation supporting in-service dates is maintained at appropriate levels
for the life cycle of the asset plus three fiscal years.
10.3.6.16 Useful and Service Lives of Assets
Coast Guard has previously used “service life” and “useful life” interchangeably in the treatment
of assets from both an accounting and an engineering perspective. However, there are times
when service life and useful life have distinct definitions that may impact both operational and
accounting treatment.
To address these distinctions Coast Guard defines useful life and service life as follows:
useful life – The normal operating life in terms of utility to the Coast Guard. This definition is
for accounting purposes and dictates the period over which an asset will be depreciated and
should always match management’s best estimate of the period the underlying asset will
continue to provide utility to the Coast Guard. A useful life may change due to the actual use of
the asset, for example, if an aircraft or cutter is consistently used for more hours than planned
due to emergency situations, the estimated useful life of the asset may be shortened.
service life – The formal determination of an asset’s expected life based upon the manufacturer,
engineering analysis, asset’s use, or congressional mandates. The service life does not generally
change unless there is an external driver such as a service life extending improvement project
occurs or a follow-on engineering analysis is conducted that supports the amendment of the
service life.
Coast Guard has initiated a service-wide annual review of all Coast Guard aircraft and vessels to
ensure that asset’s useful life and related depreciation are based upon the best estimates available
on an annual basis.
Useful lives of personal property assets are supported by third-party documentation or by
approved Coast Guard engineering analysis of the service life of an asset. Annual reviews of
useful lives are conducted by program offices and are supported by third-party documentation or
by approved Coast Guard engineering analysis of the asset’s service life.
1. PMs shall ensure that initial useful life is calculated using the useful life tables in this
chapter.
2. PMs shall ensure that complete documentation to support useful life extension of assets is
included in all CIP capitalization packages, for life-extending improvements to existing
COMDTINST M7100.3F
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assets. If Coast Guard engineering analysis is used, the basis for the determination and
underlying supporting documentation shall be provided.
3. Headquarters program offices shall periodically review the useful lives of all personal
property assets and shall provide Commandant (CG-84) the results of useful life reviews.
Reviews shall be fully documented with approval signatures and dates.
4. Commandant (CG-84) shall analyze the reviews and determine whether asset service
lives and asset tables in policy are affected and need to be updated.
5. Commandant (CG-84) shall ensure that useful life evaluations are conducted timely so
that changes to financial records can be promptly recorded. Reviews shall be fully
documented with approval signatures and dates.
6. FINCEN (FR) shall ensure that useful life changes are recorded promptly and accurately,
and shall notify Commandant (CG-84) once the changes are made to the accounting
records.
7. PMs, Headquarters program offices, Commandant (CG-84), and FINCEN (FR) shall
ensure that audit-compliant evidential documentation is gathered and maintained at
appropriate levels to support the service lives of all capitalized personal property assets
for the life cycle of the asset plus three fiscal years.
10.3.6.16.1 Useful Life of Aircraft
1. At the time of receipt and acceptance, PMs shall report the initial useful life of new assets
within existing classes of aircraft using the following table:
Table 10.6 Initial Useful Life of New Assets for Existing Classes of Aircraft
Aircraft Type Useful Life Effective Date
C-37A Gulfstream V
40 years Oct 2012
HC-130H Hercules
44 years Jan 2014
HC-130J Super Hercules
37 years Oct 2012
HC-144A Ocean Sentry
29 years Oct 2012
HH-60 Jayhawk
35 years Oct 2012
MH-65 Dolphin
39 years Oct 2017
HU-25A Guardian
32 years Oct 2012
HU-25B Guardian
32 years Oct 2012
HU-25C Guardian
32 years Oct 2012
Pallets HC-130H
25 years Oct 2012
Pallets HC-144A
29 years Oct 2012
C-27J
24 years Jul 2014
COMDTINST M7100.3F
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2. PMs shall report changes in useful lives resulting from improvement of existing assets
upon receipt and acceptance of the improved assets.
3. Any updates to Coast Guard aircraft useful lives will be promulgated via memorandum
from Commandant (CG-8C). Changes in useful life will be incorporated in future
revisions of this Manual.
4. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support the service lives of aircraft for the life cycle of the asset plus
three fiscal years.
10.3.6.16.2 Useful Life of Vessels
1. At the time of receipt and acceptance, PMs shall report the initial useful life of new assets
within existing classes of vessels using Table 10.7 below.
2. PMs shall report changes in useful lives resulting from improvement of existing assets
upon receipt and acceptance of the improved assets.
3. Any updates to Coast Guard vessels useful lives will be promulgated via memorandum
from Commandant (CG-8C). Changes in useful life will be incorporated in future
revisions of this Manual.
4. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support the service lives of vessels for the life cycle of the asset plus
three fiscal years.
Table 10.7 Initial Useful Life of New Assets for Existing Classes of Vessels
Vessel Type Useful Life Effective Date
WAGB 399’ Polar Class
42 years Oct 2012
WAGB 420’ HEALEY
30 years Oct 2012
WHEC 378’ Secretary Class
51 years Oct 2012
WIX 295’ EAGLE
64 years Oct 2012
WLB 225’ Juniper Class
30 years Oct 2012
WLBB 240’ Great Lakes Icebreaker
30 years Oct 2012
WLI 100’ A Inland Buoy Tender
76 years Oct 2012
WLI 100’ C Inland Buoy Tender
58 years Oct 2012
WLI 65’ Inland Buoy Tender
67 years Oct 2012
WLIC 100’ SMILAX
76 years Oct 2012
WLIC 160’ Inland Construction
Tender
45 years Oct 2012
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Vessel Type Useful Life Effective Date
WLIC 75’ Inland Construction
Tender
56 years Oct 2012
WLM 175’ Keeper Class
30 years Oct 2012
WLR 65’ River Buoy Tender
60 years Oct 2012
WLR 75’ River Buoy Tender
52 years Oct 2012
WLR 75’ F River Buoy Tender
33 years Oct 2012
WMEC 210’ Reliance Class
59 years Oct 2012
WMEC 270’ Famous Class
40 years Oct 2012
WMEC 282’ ALEX HALEY
24.167 years
(290 months)
Oct 2012
WMSL 418’ Legend Class
30 years Oct 2012
WPB 110’ A Island Class
33 years Oct 2012
WPB 110’ B Island Class
30 years Oct 2012
WPB 110’ C Island Class
24 years Oct 2012
WPB 87’ Protector Class
25 years Oct 2012
WPC 154’ Sentinel Class
20 years Oct 2012
WTGB 140’ Bay Class
30 years Oct 2012
WYTL 65’ Small Harbor Tug
54 years Oct 2012
WIX 327 USCGC Eagle
87 years Oct 2012
10.3.6.16.3 Useful Life of Boats
1. At the time of receipt and acceptance, PMs shall report the initial useful life of new assets
within existing classes of boats using the following table:
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Table 10.8 Initial Useful Life (in years) of New Assets for Existing Classes of Boats
SSMEB denotes findings from a ship structure and machinery evaluation board.
FG denotes a fiberglass hull. AL denotes an aluminum or similar metal hull.
Boat Class SSMEB
Shore
Boats
(FG)
Shore
Boats
(AL)
Cutter
Boats
(FG)
Cutter
Boats
(AL)
Effective
Date
ANB 55 27 Aug 2006
ANB 64 30 May 2004
BUSL 25 May 2004
TANB 12 May 2004
ASB 10 May 2004
CB-L 5 10 May 2004
CB-M 5 10 May 2004
CB-S 5 May 2004
CB (other) 10 Aug 2006
LCVP 10 May 2004
MSB 20 May 2004
MLB 25 Aug 2006
SPC-HWX 57 July 2008
SPC-SW 12 May 2004
SKF 12 May 2004
SPC-AIR 8 May 2004
SPC-LE 8 12 May 2004
SPC-NLB 8 May 2004
TPSB 10 May 2004
UTB (41) 30 Aug 2006
UTL 8 12 5 10 May 2004
UTM 8 12 May 2004
2. PMs shall report changes in useful lives resulting from improvement of existing assets
upon receipt and acceptance of the improved assets.
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3. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support the useful lives of boats for the life cycle of the asset plus
three fiscal years.
4. Any updates to Coast Guard boat useful lives will be promulgated via memorandum from
Commandant (CG-8C). Changes in useful life will be incorporated in future revisions of
this Manual.
5. The following table shall be used for estimating the useful life of boats that are not listed
in Table 10.8 above:
Table 10.9 Estimates of Useful Life for Other Boat Types
Assignment Fiberglass Hull Aluminum Hull
Cutter Boat 5 years 10 years
Shore-based Boat 8 years 12 years
10.3.6.16.4 Useful Life of Electronics
1. At the time of receipt and acceptance, PMs shall report the initial useful life of electronics
assets within existing classes using the following table:
Table 10.10 Initial Useful Life of New Electronics Assets
Asset Class Useful Life Effective Date
Systems, Stand-alone, Test Equipment 8 years Oct 1995
2. PMs shall report changes in useful lives resulting from improvement of existing assets
upon receipt and acceptance of the improved assets.
3. Any updates to Coast Guard electronics useful lives will be promulgated via
memorandum from Commandant (CG-8C). Changes in useful life will be incorporated
in future revisions of this Manual.
4. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support the useful lives of electronics for the life cycle of the asset
plus three fiscal years.
10.3.6.16.5 Useful Life of Other Personal Property
1. At the time of receipt and acceptance, PMs shall report the initial useful life of new assets
within existing classes of “other personal property” using the following table:
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Table 10.11 Initial Useful Life of New Assets of Other Personal Property
Property Type Useful Life Effective Date
Shipbuilding Equipment/Machinery
(Yard Industrial Fund)
15 years
Oct 1995
General-purpose 5 years Oct 1995
Vehicles 5 years Oct 1995
2. PMs shall report changes in useful lives resulting from improvement of existing assets
upon receipt and acceptance of the improved assets.
3. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support the useful lives of other personal property for the life cycle
of the asset plus three fiscal years.
10.3.6.17 Tagging and Identification of Assets
1. In order to reduce the risk of improper identification, assets shall be identified in the fixed
asset system to facilitate vouching and tracing from the accountable record to the
physical asset. Some categories of personal property, such as electronic test equipment,
are easily identified and traced by tagging. Other categories, such as aircraft and vessels,
are uniquely identified and traced by their markings (e.g., tail number, hull number).
2. PMs shall ensure that the data identified in this Subsection are included in CIP
capitalization packages for each asset.
3. Where applicable, PMs shall ensure that barcode labels are affixed to each asset that is
traced by tagging in accordance with the following table:
Table 10.12 Tagging and Identification Requirements for Various Asset Types
Asset Type Serial No. Field Tag No. Field
HQ Program
Office
Aircraft Airframe no. Tail no.
Commandant
(CG-41/71)
Vessels Hull no. Hull no.
Commandant
(CG-45/75)
Boats HIN no. Hull no.
Commandant
(CG-73)
Electronic Systems Model/serial no.
System-generated no./
Barcode label
Commandant
(CG-64)
Electronic Equipment
(Stand-alone, Test Equip.) Mfg serial no.
System-generated no./
Barcode label
Commandant
(CG-64)
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Asset Type Serial No. Field Tag No. Field
HQ Program
Office
Vehicles VIN no.
License plate no./
Barcode label
Commandant
(CG-43)
General-purpose Mfg serial no.
System-generated no./
Barcode label
Commandant
(CG-84)
Shipbuilding Equipment/
Machinery Mfg serial no.
System-generated no./
Barcode label Yard
4. PMs shall ensure that APOs/RPSOs, as applicable, are informed of new assets under their
control.
5. PMs shall ensure that audit-compliant evidential documentation is maintained at
appropriate levels to support tagging and asset identification for the life cycle of the asset
plus three fiscal years.
10.3.6.18 Direct Purchase of Assets
APOs/RPSOs, as applicable, may acquire assets by “direct purchase” using various methods
such as formal contracts (major acquisitions), simplified acquisition procedures (small
purchases), Military Interdepartmental Purchase Requests (MIPRs), Federal Supply System
(FSS), Military Standard Requisition and Issuing Procedures (MILSTRIP), and credit cards. For
the purposes of this Subsection, the direct purchase also includes donations and transfers-in from
various sources. For consistency and increased internal control rigor, direct purchase of assets
will be treated as a CIP project as outlined below.
1. Units shall ensure that every purchase of personal property assets meeting all of the
following conditions is processed as a CIP project in accordance with the policy outlined
in this document:
a. The asset meets or exceeds the capitalization threshold;
b. The purchase incurs progress payments (e.g., partial payments); and
c. The asset will not be received within 30 calendar days from the date of the order.
2. APOs/RSPOs, as applicable, shall forward all direct purchase documentation to
FINCEN (FR) within 30 calendar days from the date of the order.
3. FINCEN (FR) shall review the direct purchase documentation and shall either:
a. Notify the APO/RSPO, as applicable, of any discrepancies; or
b. Record the assets in Oracle FAM timely and accurately within seven calendar days of
receipt of the documentation.
4. APOs/RSPOs, as applicable, shall resolve any discrepancies in direct purchase
documentation within 10 business days and shall sign, date, and forward the corrected
documentation to FINCEN (FR).
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5. FINCEN (FR) shall coordinate a review and approval of direct purchases of aircraft,
vessels, boats, and electronic systems with Commandant (CG-84).
6. Commandant (CG-84) shall approve the capitalization of all direct purchases of personal
property assets.
7. APOs/RSPOs, as applicable, shall ensure that assets are recorded and properly reflected
in fixed asset systems (NESSS for Yard assets; Oracle for all others).
8. APOs/RSPOs, as applicable, and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained at appropriate levels to support the
APO’s/RSPO’s, as applicable, decisions, reporting requirements, and certifications
related to the direct purchase of an asset for the life cycle of the asset plus three fiscal
years.
9. APOs/RSPOs, as applicable, at the Coast Guard Yard shall ensure that all industrial-
funded acquisitions are documented properly and recorded timely in NESSS, and that
audit-compliant evidential documentation is maintained at appropriate levels to support
the accountable property officer’s decisions, reporting requirements, and certifications
related to the direct purchase of an asset for the life cycle of the asset plus three fiscal
years.
10.3.6.19 Depreciation of Assets
Depreciation expense is calculated through the systematic and rational allocation of the cost of
personal property general PP&E assets, less the estimated salvage/residual value, over the
estimated useful life of the asset (see Section 10.3.6.16, Useful and Service Lives of Assets. for
detailed discussion of Coast Guard property’s useful/service lives). Depreciation is not
calculated while an asset is being constructed or improved. Project costs accumulate in CIP
project accounts until the asset is delivered and accepted.
The Coast Guard uses the straight-line depreciation method for all personal property. A full
month’s depreciation is recorded in the month of the asset acceptance date based on the asset
status.
1. Commandant (CG-84) and FINCEN (FR) shall ensure that all personal property asset
transactions and records are established and maintained in accordance with this policy.
2. Commandant (CG-84) and FINCEN (FR) shall perform an analysis of depreciation
expense and accumulated depreciation annually to validate the reasonableness of the
depreciation calculation. If errors are discovered, discrepancies shall be resolved and
records updated within 30 days of the completion of the analysis.
10.3.6.20 Alternative Valuation Methods for Personal Property Assets
1. Personal property assets that lack adequate documentation to support valuation shall be
valued using one of the following alternative methodologies (in the order listed), after
exhausting all practical methods to obtain the necessary historical documentation:
a. Like-item support – a more recent supported purchase of a like item (same form, fit,
and function). All evidential documentation for the supported like item (e.g.,
contract, invoice, receipt support, payment support) shall be gathered. The price
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(cost) listed in this documentation shall be deflated using consumer price index (CPI)
values from the U.S. Department of Labor, Bureau of Labor Standards. All like-item
documentation, including a copy of the CPI deflation, will be maintained as
supporting documentation.
b. Published price lists – published price lists from original equipment manufacturers
(OEMs), or Federal Logistics Data (FEDLOG) prices from another Government
agency identified as the source of supply. Price list/FEDLOG information shall be
clearly printed. The price (cost) obtained using this method shall be deflated using
consumer price index (CPI) values from the U.S. Department of Labor, Bureau of
Labor Standards. All OEM/FEDLOG pricing documentation, including a copy of the
CPI deflation, will be maintained as supporting documentation.
c. Published Price Guide (Vehicles Only) - if no published price lists exist, the next
preferred alternate valuation method is using a published industry price guide.
Examples of such price guides include the Kelley Blue Book, National Automotive
Dealers Association (NADA) Guides, and Edmunds.com. The published average
purchase price for a new vehicle using the most recent model year with similar or
identical model type, trim level, powertrain and options should be used for purposes
of determining the current year cost. Once the cost has been determined,
Commandant (CG-844) shall index the cost in accordance with Section 5.3
(Responsibilities). The new purchase price of an equivalent model vehicle indexed to
the original acquisition date is preferred for purposes of developing an estimate as it
more closely relates to historical cost at the time of initial acquisition than a price for
purchasing an identical model year used vehicle in the current year. The VIN can be
utilized to determine the model and powertrain in most cases if this information
cannot be confirmed from other sources of original documentation. Each
manufacturer maintains detailed guidance for interpreting relevant VIN fields to
determine model and powertrain information. This information is readily accessible
from online sources.
d. OEM price certification – original equipment manufacturer’s price certification by
letter or e-mail. The price (cost) shall be deflated using consumer price index (CPI)
values from the U.S. Department of Labor, Bureau of Labor Standards. All OEM
price certification documentation, including a copy of the CPI deflation, will be
maintained as supporting documentation.
e. Budgetary/Appropriation Support. - Congressional appropriation/Coast Guard
budgetary information related to the project or asset requiring valuation support. The
appropriation/budgetary information supporting the project or asset shall clearly
identify the project so that the estimate can be calculated for the unsupported asset
within the project. All appropriation information (e.g., Apportionment and
Reapportionment Schedule, Form SF 132) shall be included in the support package.
The price (cost) obtained using this method shall be deflated using consumer price
index (CPI) values from the Bureau of Labor Standards. All documentation,
including the deflation, shall be maintained as supporting documentation.
f. Independent (third-party) appraisal a report from an independent appraisal
organization (in GSA Finance and Business Solutions) containing the appraisal cost
(valuation) of the item and describing the methodologies used during a desktop or on-
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site appraisal using standard industry-compliant methods. If not done so in the
appraisal report, the price (cost) shall be deflated using consumer price index (CPI)
values from the U.S. Department of Labor, Bureau of Labor Standards. All appraisal
documentation, including a copy of the CPI deflation, will be maintained as
supporting documentation.
2. Commandant (CG-84) and FINCEN (FR) shall ensure that assets valued using alternative
methods are fully documented and that audit-compliant evidential documentation is
maintained at appropriate levels to support the alternative valuation methodologies for
the life cycle of the asset plus three fiscal years.
10.3.6.21 Reutilization and Cannibalization of Assets
Reutilization and cannibalization of components, systems, and spare parts from personal
property assets allows the Coast Guard to efficiently meet mission requirements and minimize
costs.
1. Program offices/APOs/RSPOs (as applicable), shall document both the decision for
removal and the actual removal of all components, systems, and spare parts from
personal property fixed assets in order to meet tracking and valuation requirements.
2. APOs/RSPOs, as applicable, shall ensure that documentation is complete, in proper
format, and reported to HQ program offices, Commandant (CG-84), and FINCEN (FR)
within 20 calendar days after the removal of the reutilized/cannibalized items.
3. HQ program offices, Commandant (CG-84), and FINCEN (FR) shall analyze the
documentation to determine the appropriate treatment related to the valuation and status
of the personal property fixed asset and the components or spare parts removed.
4. APOs/RSPOs, as applicable, shall ensure that spare parts removed from fixed assets and
sent to inventory controls points (ICPs) include the information and documentation
needed to support the receipt in ALMIS and NESSS as well as the accurate valuation
(e.g., contract, invoice, proof of receipt, proof of payment).
5. APOs/RSPOs, as applicable, and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is gathered and distributed to appropriate levels to support the
reutilization and cannibalization of an asset for the life cycle of the asset plus three fiscal
years.
10.3.6.22 Conversion in Lieu of Procurement (CILOP) of Assets
CILOP occurs when personal property equipment is converted and returned for use in lieu of a
newly acquired item. APOs/RSPOs, as applicable, are responsible for the management of
capitalized CILOP assets while in use or available for use. All capitalized equipment undergoing
repair is managed and recorded in the appropriate designated fixed asset system (ALMIS or
Oracle).
1. APOs/RSPOs, as applicable, shall document the decision and retire equipment beyond
economic repair in the ALMIS/Oracle system. The APO/RSPO, as applicable, shall
ensure that a Requisition and Invoice/Shipping Document, Form DD 1149, signed by the
repair activity, is forwarded to FINCEN (FR) to document the transfer of the equipment
to the repair activity. Any equipment received from CILOP shall be treated as newly
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procured property and shall contain a new equipment data plate. The Requisition and
Invoice/Shipping Document, Form DD 1149, received from the repair activity and
containing the CILOP cost shall be forwarded to the property officer for information and
reconciliation purposes.
2. APOs/RSPOs, as applicable, shall ensure that documentation supporting the transfer and
valuation of equipment is forwarded to FINCEN (FR) according to the following:
a. Requisition and Invoice/Shipping Document, Form DD 1149, is used to document the
transfer of ground support equipment (GSE) to and from the unit. The form requires
two sets of signatures (signed and dated by both activities – sending and receiving).
The form will specify the repair activity work as either repair or conversion and will
contain a repair and conversion cost estimate, but it will not be used for valuation
purposes. All detail will be reviewed and approved by the APO/RSPO, as applicable,
and forwarded to FINCEN (FR).
b. The form will be signed and dated by both parties, reviewed by the property officer,
and forwarded to FINCEN (FR) along with the approved Report of Excess and
Evidence of Internal Screening, Form CG-4501 via the Agency Asset Management
System.
c. The Billing Detail is an electronic file received from the repair activity and used to
support the valuation of the CILOP equipment. This detail will be reviewed and
approved, signed and dated by the APO/RSPO (as applicable), and forwarded to
FINCEN (FR) within 10 calendar days after receipt of the repair activity.
3. FINCEN (FR) shall periodically reconcile all procurement transactions and supporting
documentation to obligation balances recorded in CAS.
4. APOs/RSPOs, as applicable, and FINCEN (FR) shall ensure that audit-compliant
evidential documentation relating to financial decisions, reporting requirements, and
certifications is maintained at appropriate levels to support the CILOP acquisition of an
asset for the life cycle of the asset plus three fiscal years.
10.3.6.23 Acquiring Assets through Transfers, Exchanges, and Donations
Transfers are movements of excess personal property between Coast Guard units and other DHS
or Federal entities. Exchanges are nonmonetary transactions involving little or no monetary
assets or liabilities in which each party receives and gives up essentially equal value. Exchanges
between Federal entities are accounted for as transfers. Donations are nonreciprocal transfers of
assets from the state, local, and foreign governments; individuals; or others not considered
Federal entities.
The cost of personal property assets acquired from other Federal entities through transfer or
exchange is recorded at the existing NBV of the transferring agency. If the NBV cannot be
reasonably ascertained, the estimated fair market value is used as the cost of the asset. This
value is increased by any transfer costs such as shipping and handling charges.
The cost of personal property assets acquired through exchange with non-Federal entities is
recorded at the estimated fair market value of the assets surrendered at the time of the
transaction. If the fair market value of the personal property acquired is more readily
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determinable than that of the personal property surrendered, the cost is the fair value of the
personal property acquired.
Any difference between the net recorded amount of the personal property surrendered and the
cost of the personal property acquired is recognized as a gain or loss. In the event that cash
consideration is included in the exchange, the cost of the personal property acquired is increased
by the amount of cash consideration surrendered or decreased by the amount of cash
consideration received. This value is increased by any transfer costs such as shipping and
handling charges.
The cost of personal property acquired through donation is the estimated fair market value at the
time acquired by the Federal Government. This value is increased by any transfer costs such as
shipping and handling charges. If fair market value cannot be obtained, alternative valuation
methods such as independent appraisal should be employed.
1. Headquarters program offices/APO/RSPO, as applicable, shall forward documentation on
asset delivery, acceptance, and valuation to FINCEN (FR) within 30 days for all
transfers, exchanges, and donations. The documentation shall contain signatures from
both the transferor and the transferee.
2. Headquarters program offices/APOs/RSPOs, as applicable, shall ensure that physical
control/custody of the asset transfers on the date of delivery and acceptance.
3. FINCEN (FR) shall record personal property transfers, exchanges, and donations into
Oracle FAM at NBV or estimated fair market value (FMV). This recorded cost shall
include all costs incurred to bring the personal property to a form and location suitable
for its intended use.
4. APOs/RSPOs, as applicable, and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained at appropriate levels to support the receipt and
valuation related to the transfer, exchange, and donation of personal property for the life
cycle of the asset plus three fiscal years.
10.3.6.24 Improvements to Personal Property Assets
Various events that affect assets, such as technological advances, inoperability, damage, or
changes in mission may result in the need for an improvement to an asset. A CIP project is
required for any improvement that meets or exceeds the capitalization threshold and also
increases the asset’s capability and/or capacity or extends its useful life.
The cost of the improvement is added to the remaining base cost of the asset and depreciated
over the remaining useful life. If the improvement extends the life, the cost is depreciated over
the new useful life.
Aircraft periodic depot maintenance and vessel maintenance and rehabilitation are considered
maintenance activities that enable the asset to meet its intended useful life. Maintenance
activities may occur alone or as part of an improvement project. Costs related to these activities
are expensed.
Maintenance performed on assets near or past their useful life must be evaluated to determine if
the maintenance meets capitalization thresholds and extends the useful life past the current useful
life of the asset. In these cases, the cost is capitalized.
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1. PMs shall ensure that improvements to assets meeting capitalization thresholds are
treated as new CIP projects.
2. FINCEN (FR) shall record improvements in Oracle FAM as follows:
a. For life-extending improvements to fully-depreciated assets, establish a “child”
record for the improvement. Do not modify the “parent” record beyond its baseline
useful life. The child record will be depreciated over the extended useful life.
b. For life-extending improvements to non-fully-depreciated assets, retire the “parent”
record on the date that the improvement is recorded. Roll the remaining NBV of the
“parent” record into the “child” (improvement) record. Establish the “child”
(improvement) record in the amount of the cost of the improvement, plus the
remaining NBV of the “parent” record at the time that record is retired. Life-
extending improvements shall be depreciated over the remaining useful life plus the
extended life gained by the improvement.
3. PMs, Commandant (CG-84), and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained to support the financial decisions, reporting
requirements, and certifications related to the improvement of an asset for the life cycle
of the asset plus three fiscal years.
10.3.6.25 Periodic Review and Reporting of Asset Records
Periodic reviews of asset records are conducted to determine if critical data contained in the asset
records are complete and correct. Periodic reviews of asset records (along with physical
inventories) provide assurance that the assets exist, are complete, are in the correct location, and
have the correct asset status. These reviews support the existence, completeness, and valuation
assertions and are essential for accurate financial statement reporting.
10.3.6.25.1 Oracle Fixed Asset Periodic Review
It is Coast Guard policy to perform a monthly review of the Oracle Fixed Asset (OFA) records to
support existence and completeness of Coast Guard assets recorded in subsidiary ledgers. The
Coast Guard performs a monthly reconciliation of OFA property record identifiers (e.g., RPUID,
Tag Number, Asset Number) to the following subsidiary systems: Shore Asset Management
(SAM), Housing Management Information System (HMIS), Integrated (IATONIS),
Commandant (CG-43) Shore Divestiture Plan (SDP), Finance Center (FINCEN) Asset Tracker,
Coast Guard Business Intelligence (CGBI) Assignment and Hours Reports, CIP SharePoint, and
Real Property Sustainment Site. The monthly reconciliation of OFA with these subsidiary
systems promotes the Coast Guard’s assertions of completeness and accuracy.
For detailed procedures of this quarterly review see Financial Resource Management Manual –
Procedures (FRMM-P), COMDTINST M7100.4 (series), Section 10.3 (Personal Property
(Including CAP, Non-CAP, and CIP)).
10.3.6.25.2 NESSS Yard Asset Extracts – Quarterly
It is Coast Guard policy to perform a quarterly review of the NESSS Yard Asset extracts to
support existence and completeness of Coast Guard assets recorded in subsidiary ledgers. For
detailed procedures of this quarterly review see Financial Resource Management Manual –
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Procedures (FRMM-P), COMDTINST M7100.4 (series), Section 10.3 (Personal Property
(Including CAP, Non-CAP, and CIP)).
10.3.6.25.3 Environmental Liability Master List (Vessels and Boats) – Annually
It is Coast Guard policy to perform an annual review of the assets on the environmental liability
list against the fixed assets in Oracle to ensure the completeness of the fixed asset listing which,
in turn, supports the completeness assertion. For detailed procedures of this annual review see
Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Section 10.3, Procedure No. 10.3.28 (Year-End Certifications).
10.3.6.25.4 Asset Existence and Completeness
Direct confirmation of the existence and completeness of assets supports key financial statement
assertions, in addition to ensuring accurate and complete financial information. Therefore, HQ
OPCOM/program offices shall review asset extract reports against operational and maintenance
applications (e.g., AOPS, ALMIS Maintenance) for completeness.
10.3.6.25.5 Asset Description and Location
The description and location of an asset can change at any time. Updating this information helps
to identify the asset and supports other lifecycle events, such as physical inventories and audits
that test asset existence. HQ OPCOM/program offices shall check asset descriptions and
locations against operational (and, if necessary, maintenance) applications (e.g., AOPS, ALMIS)
and shall update records accordingly.
10.3.6.25.6 Asset Status
Accurate determination of asset status provides the initial information needed to ensure that
existence and valuation are correctly stated in Oracle FAM. The following table lists the asset
categories and the corresponding OPCOM/program offices pertinent to this Subsection:
Table 10.13 Asset Categories and Corresponding OPCOM/Program Offices
Asset Category OPCOM/Program Office
Aircraft Commandant (CG-71)
Boats Commandant (CG-73)
Vessels Commandant (CG-75)
Electronic Systems/
Stand-alone/Test Commandant (CG-64)
Vehicles Commandant (CG-43)
General-purpose Commandant (CG-84)
Shipbuilding Equipment/
Machinery Yard
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The asset status for each category of the asset shall be reflected in the fixed asset system as
follows:
1. Active/Maint –
a. The asset is in service. It appears on Coast Guard records, and depreciation continues
to accumulate during active service; or
b. The asset is not currently in operational service; however, it will return to service
immediately after maintenance is completed. It appears on Coast Guard records, and
depreciation continues to accumulate during maintenance. Maintenance is designed
to allow the asset to achieve its stated useful life.
2. Storage/Use – The asset is in storage at a Coast Guard or other authorized location and is
available for use. The asset is preserved in a way that minimizes deterioration, and its
status can change to Active/Maint based on mission needs. The asset appears on Coast
Guard records, and depreciation continues to accumulate during storage/use. For
additional guidance, see Subsection 10.3.6.31 (Storage of Assets with Intent to Use).
3. Storage/Disp (Decommissioned) – The asset is in storage at a Coast Guard or other
authorized location, but is not available for use. There is no significant preservation
investment in the asset. The asset may be under reutilization/cannibalization (removing
components, systems, and spare parts), and the remainder of the asset will be disposed of
at a particular time. The asset appears on Coast Guard records; however, potential cost
adjustments (loss) may be recorded in the financial statements, depending on the
remaining NBV. Depreciation does not accumulate during storage/retirement. See also
Subsection 10.3.6.32 (Storage of Assets with Intent to Dispose).
4. Impaired – The asset is impaired due to damage, deterioration, or
engineering/construction issues that preclude it from performing its mission. The asset
appears on Coast Guard records; however, cost adjustments will be made depending on
the level of impairment and the remaining salvage value. Depreciation will continue if a
remaining NBV (salvage) remains. See also Subsection 10.3.6.33 (Impairment of
Assets).
5. Retired (Decommissioned) – The asset has been removed from Coast Guard records,
and the remaining NBV has been recorded as a loss. See also Subsection 10.3.6.34
(Retirement of Personal Property Assets).
10.3.6.25.7 Asset In-Service Date/Useful Life
Accurate in-service dates and service lives are essential for assets to be properly stated in the
fixed asset record application and on the financial statements. The service lives contained in this
policy shall be compared to those in the asset extracts to ensure that they are in agreement. In
some cases, significant improvements may have increased the useful life of a particular asset
beyond the useful life listed in this policy. In those cases, the useful life shall be noted in the
extract as reviewed and corrected.
10.3.6.26 Government-Furnished Equipment
Government-furnished equipment (GFE) is equipment that is owned by or leased to the
Government and that is currently in the possession of a contractor or subcontractor. GFE
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includes COTS software. It also includes contractor-held assets obtained by the Government
under the terms of the contract.
1. GFE shall be tracked and accounted for in Oracle FAM, except for Yard industrial assets,
which are tracked in NESSS. In either case, tracking and accounting is based on asset
category.
Note: For Yard industrial assets, Yard Financial Operations shall perform all
FINCEN (FR) functions described below.
2. APOs/RSPOs, as applicable, shall inform FINCEN (FR) of GFE transactions within
30 calendar days of their occurrence.
3. APOs/RSPOs/FINCEN (FR), as applicable, shall record all GFE transactions affecting
personal property assets in Oracle FAM.
4. APOs/RSPOs, as applicable, shall ensure that identification, tracking, physical inventory,
maintenance, and reporting are performed for personal property assets in the control of
contractors and other entities.
5. APOs/RSPOs, as applicable, shall ensure that contracts identify the material and
equipment to be provided by the Government and specify identification, tracking,
physical inventory, maintenance, and reporting requirements.
6. APOs/RSPOs, as applicable, shall approve the transfer and disposition of GFE during and
upon completion of contract performance in accordance with the Personal Property
Management Manual, COMDTINST M4500.5 (series).
7. APOs/RSPOs, as applicable, shall ensure that a copy of each contractor inventory report
and each transfer/disposition document is gathered, verified for accuracy, and appropriate
approvals were obtained in accordance with the Personal Property Management Manual,
COMDTINST M4500.5 (series), and retained at appropriate levels.
8. APOs/RSPOs, as applicable, shall ensure that FINCEN (FR) is notified of the completion
of the contract within 20 days, and that they are provided with all applicable supporting
documents.
9. APOs/RSPOs, as applicable, shall provide a certified copy of each contractor inventory
report to FINCEN (FR) via Commandant (CG-84) on an annual basis.
10. FINCEN (FR) shall reconcile contractor inventory reports on an annual basis.
11. APOs/RSPOs, as applicable, and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained to support the financial decisions, reporting
requirements, and certifications related to GFE for a period of three fiscal years.
10.3.6.27 Physical Inventories of Personal Property Assets
A physical inventory verifies the existence of the asset, as well as the completeness and accuracy
of the personal property records and the general ledger accounts in Oracle and subsidiary
systems of record (e.g. ALMIS, AOPS, NESSS etc.). It reconciles and adjusts the accountability
records with the custodial records and ensures that the personal property and financial records
are reconciled with the actual property on hand. Physical inventories are generally scheduled for
the fourth quarter of each fiscal year.
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1. Commandant (CG-84) shall plan and execute 100 percent physical inventories of all
capitalized assets on an annual basis, accommodating record-to-floor (existence) and
floor-to-record (completeness) testing. The inventories shall be planned and executed
with the appropriate OPCOM office (e.g., Commandant (CG-731) for boats).
2. Commandant (CG-84) shall ensure that physical inventories include existence and
completeness testing.
3. Commandant (CG-84) shall develop and submit a physical inventory plan for the
upcoming year to Commandant (CG-84), no later than 30 September.
4. Commandant (CG-84) shall monitor the progress of all physical inventories and shall
ensure their completion within 30 calendar days of the end of the count phase.
5. Commandant (CG-84) shall ensure that full and complete documentation is gathered and
maintained to support the physical inventory, and that all requests for record adjustments
are fully supported with proper evidential documentation.
6. Commandant (CG-84) shall request that FINCEN (FR) (Oracle) and other applicable
Coast Guard Units (e.g., Yard Financial Operations, ALC, etc.) make necessary
adjustments to their records. These requests shall be accompanied by proper
documentation.
7. FINCEN (FR) and Coast Guard Units shall review requests for record adjustments and
shall update their records within five business days. Any requests that cannot be honored
due to insufficient supporting documentation shall be reported back to Commandant
(CG-84) for action. Commandant (CG-84) shall resolve these discrepancies and shall
return corrected documentation to FINCEN (FR) and Coast Guard Units within five
business days.
8. FINCEN (FR) and Coast Guard Units shall report to Commandant (CG-84) when all
adjustments have been made to the Oracle and subsidiary systems.
9. Commandant (CG-84), FINCEN (FR), and Coast Guard Units shall ensure that the
inventory date is updated in the Oracle and subsidiary systems.
10. Commandant (CG-84) shall review Oracle to ensure that all asset records are verified as
updated, all adjustments have been recorded, and the physical inventory dates have been
updated.
11. Commandant (CG-84) shall prepare and submit a physical inventory report to
Commandant (CG-84) for review and approval.
12. Commandant (CG-84) shall provide oversight and work collaboratively with
FINCEN (FR), and Coast Guard Units to ensure that audit-compliant evidential
documentation is maintained to support the planning, execution, decisions, approvals, and
adjustments for all physical inventories for a period of three fiscal years.
10.3.6.28 Physical Inventories of Government-Furnished Property (GFP)
A physical inventory of Government-furnished property ensures that contractors have
appropriate safeguards in place to protect Government assets and that existence and
completeness assertions can be met, thus ensuring the accuracy of the personal property records
and the general ledger accounts in Oracle.
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1. The applicable project Contracting Office shall ensure that a physical inventory is
completed for each contract that includes Government-furnished property, in accordance
with Coast Guard Acquisition Procedures (CGAP).
2. The applicable project Contracting Office shall ensure that FINCEN (FR) is provided
with the results of the inventory, as well as complete documentation for changes, so that
any lost or damaged GFP can be updated in Oracle FAM.
3. The applicable project Contracting Office shall prepare and submit a consolidated
inventory memorandum to FINCEN (FR), prior to the end of each fiscal year, certifying
that a GFP inventory was conducted. The memorandum shall include an attachment
itemizing the contract numbers and GFP assets identified in the inventory.
4. Commandant (CG-9) acquisition offices and FINCEN (FR) shall ensure that audit-
compliant and Coast Guard Acquisition Procedures (CGAP) compliant evidential
documentation is maintained at appropriate levels to support physical inventories for
three fiscal years.
10.3.6.29 Year-end Certifications
Year-end certifications of personal property assets allow for the addition of previously
unrecorded assets and provide assurance that assets that were present during fourth-quarter
physical inventories still exist at fiscal year-end. Certification thus provides an additional level
of assurance that personal property assets exist and are complete. Coast Guard uses its annual
physical inventory to provide this assurance and certification.
1. APOs/RSPOs, as applicable, shall prepare a year-end certification of capital personal
property assets under their control as of 1 August, based on assets identified in Oracle
FAM.
2. APOs/RSPOs, as applicable, shall submit their certifications to FINCEN (FR), noting
errors and including corrective documentation for those errors, by 10 August. The
certifications shall be signed by the commanding officer/officer-in-charge.
3. FINCEN (FR) shall ensure that corrections are made to Oracle FAM by 20 September.
4. APOs/RSPOs, as applicable, shall ensure that audit-compliant evidential documentation
is maintained to support the year-end certifications of personal property assets for a
period of three fiscal years.
10.3.6.30 Correction of Asset Records
It is occasionally necessary to correct asset records in order to comply with GAAP and to support
financial statement assertions. Audit-compliant documentation to support the corrections must
be gathered, analyzed, and maintained.
1. Commandant (CG-84) and FINCEN (FR) shall ensure that all asset record corrections are
analyzed, reconciled, and supported by auditable documentation.
2. Commandant (CG-84) and FINCEN (FR) shall ensure that all documentation contains the
dated signatures of the preparer, reviewer, and approver.
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3. The Commandant (CG-84) approver shall be either the property accountant or the
division chief.
4. FINCEN (FR) must record all corrections received by Commandant (CG-84) within
30 calendar days of receipt.
5. Commandant (CG-84) and FINCEN (FR) shall review the corrections for financial
statement impact and ensure that they are recorded timely and accurately.
10.3.6.31 Storage of Assets with Intent to Use
Assets in storage continue to be depreciated and are not removed from the general ledger
accounts. See Subsection 10.3.6.19 (Depreciation of Assets). The status of those assets is
clearly noted in Oracle FAM, and documentation supporting the storage decision is maintained.
1. HQ program offices shall determine the status of assets in storage.
2. HQ program offices shall gather and approve documentation supporting the storage
decision, and shall forward copies to Commandant (CG-84) within 20 calendar days of
the decision. Commandant (CG-84) shall forward to FINCEN (FR).
3. FINCEN (FR) shall update the asset status in Oracle FAM within 10 calendar days of
receipt of the documentation from Commandant (CG-84).
4. FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained
to support the financial decisions, reporting requirements, and certifications related to the
storage of an asset for the lifecycle of the asset plus three fiscal years.
10.3.6.32 Storage of Assets with Intent to Dispose
Assets in storage with intent to dispose are removed from the general ledger accounts, along with
accumulated depreciation/amortization. The status of each asset is noted in Oracle FAM, and
complete supporting documentation is maintained.
1. HQ program offices shall determine the status of assets in storage with intent to dispose.
2. HQ program offices shall prepare, review, and approve documentation supporting the
decision to store with the intent to dispose, and shall forward copies to Commandant
(CG-84) within 20 calendar days of the decision. Commandant (CG-84) shall forward to
FINCEN (FR).
3. FINCEN (FR) shall remove the remaining accumulated depreciation/amortization and
update the asset status in Oracle FAM within 10 calendar days of receipt of the
documentation from Commandant (CG-84).
4. FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained
to support the financial decisions, reporting requirements, and certifications related to the
storage of an asset with intent to dispose for the life cycle of the asset plus three fiscal
years.
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10.3.6.33 Impairment of Assets
Personal property assets may become impaired due to damage, faulty construction, deterioration,
or engineering flaws. Capitalized personal property assets that the Coast Guard has no intention
to repair, shall be reported to Commandant (CG-844) within thirty (30) days of impairment
and/or prior to fiscal year end, whichever is less.
1. Material costs incurred for corrective action to an impaired asset are capitalized, along
with the costs incurred prior to impairment.
2. If an impaired asset remains in use, the loss due to impairment is measured as the
difference between the book value and either:
a. The cost to acquire an asset that would perform similar remaining functions; or
b. The portion of the book value attributable to the remaining functional elements of the
asset.
3. The loss shall be recognized upon impairment, and the book value of the asset reduced
accordingly. If neither of items 2a or 2b above can be determined, the book value
continues to be depreciated/amortized over the remaining useful life of the asset.
4. If the impaired asset is to be removed from use, the loss due to impairment is measured as
the difference between the book value and the Net Realizable Value (NRV), presumably
zero. The NBV, if any, must transfer to an equipment-pending retirement account until
such time as the asset is disposed of.
5. HQ program offices shall determine, monitor, and report the impairment of personal
property assets.
6. HQ program offices shall prepare, review, and approve documentation supporting the
impairment of assets and shall forward copies to Commandant (CG-84) within
20 calendar days of the decision to declare an asset impaired.
7. HQ program offices shall monitor and report the status of impaired assets to determine if
they will be stored, disposed of, or returned to service. Documentation supporting this
decision shall be forwarded to Commandant (CG-84) within 20 days of the decision.
Commandant (CG-84) shall determine the amount of any impairment loss and forward
documentation supporting the loss to FINCEN (FR).
8. FINCEN (FR) shall remove the remaining accumulated depreciation/amortization and
shall update the asset status in Oracle FAM within 10 calendar days of the receipt of the
impairment documentation from Commandant (CG-84).
9. FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained
to support the financial decisions, reporting requirements, and certifications related to the
impairment of an asset for the life cycle of the asset plus three fiscal years.
10.3.6.34 Retirement of Personal Property Assets
Retirement occurs when an asset is no longer used and is removed from service. A personal
property asset is retired when it reaches the end of its useful life or when it has been destroyed,
sold, or no longer provides benefit to the Coast Guard.
1. HQ program offices shall determine the status and retirement of assets.
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2. HQ program offices shall prepare, review, and approve documentation in accordance
with the Personal Property Management Manual, COMDTINST M4500.5(series),
supporting the decision to retire an asset and shall forward copies to Commandant (CG-
84) within 20 calendar days of the decision. Commandant (CG-84) will forward
retirement documentation to FINCEN (FR).
3. FINCEN (FR) shall remove the remaining accumulated depreciation/amortization and
shall update the asset status in Oracle FAM within 10 calendar days of receipt of the
documentation from Commandant (CG-84).
4. FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained
to support the financial decisions, reporting requirements, and certifications related to the
retirement of an asset for the life cycle of the asset plus three fiscal years.
10.3.6.35 Disposing of Personal Property Assets through Transfers, Exchanges,
and Donations
Units that have personal property no longer needed by a Coast Guard activity shall follow the
disposal process in the Personal Property Management Manual, COMDTINST M4500.5(series),
in accordance with Federal Accounting Standards Advisory Board, Technical Release No. 14,
Implementation Guidance on the Accounting for the Disposal of General Property, Plant, &
Equipment, October 2011.
10.3.6.36 Disposition of Personal Property Assets
As discussed in the preceding Subsections, assets may be declared impaired or disposed of by
transfer, exchange, retirement, or donation. In any of these events, the disposition of the asset
must be recorded in a timely and proper manner to ensure the integrity of the financial
statements.
1. HQ program offices and APOs/RSPOs, as applicable, shall ensure that asset disposal is
supported by proper evidential documentation and that the assets are removed from
Oracle FAM within 30 days of the disposal.
2. The applicable project Contracting Office shall notify unit APOs/RSPOs, as applicable,
when the transfer and disposition of Government-furnished property is authorized when
contractor need is satisfied or upon contract completion. The contracting officer shall
ensure that copies of the contractor inventory report and the documentation related to the
transfer/disposition of property are provided to the unit property officer and to
Commandant (CG-84).
3. FINCEN (FR) shall ensure that prior to disposal the asset is placed in “retired” status and
that any associated accumulated depreciation is removed from general ledger accounts
within five business days of receipt of the documentation. Any difference in the book
value of the asset and its expected NRV shall be recognized as a gain or loss in the period
of adjustment. The expected NRV shall be adjusted at the end of the accounting period,
and any further adjustments in value shall be recognized as a gain or loss. No additional
depreciation shall be taken once such assets are removed from Oracle FAM and the
general ledger accounts in anticipation of retirement or removal from service.
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4. HQ program offices, APOs/RSPOs (as applicable), and FINCEN (FR) shall ensure that
audit-compliant evidential documentation is maintained to support the retirement of
personal property for a period of three fiscal years.
10.4 Deferred Maintenance and Repairs of Assets
Deferred maintenance and repairs (DM&R) is defined in the Statement of Federal Financial
Accounting Standards (SFFAS) No. 40, Definitional Changes Related to Deferred Maintenance
and Repairs: Amending Statement of Federal Financial Accounting Standards 6, Accounting for
Property, Plant, and Equipment, as maintenance that was not performed when it should have
been, or was scheduled to be, and was thus postponed or delayed until a future period. This
includes preventive maintenance, normal repairs, replacement of parts and structural
components, and other activities needed to preserve the Property, Plant, and Equipment (PP&E)
asset so that it continues to provide acceptable services, and achieves its expected life. DM&R
excludes activities aimed at expanding the capacity of an asset or otherwise upgrading it to serve
needs different from, or significantly greater than, those originally intended.
The Coast Guard must report material amounts of DM&R on general PP&E as required
supplementary information (RSI) in the financial statements. Per the Department of Homeland
Security (DHS) Financial Management Policy Manual (FMPM), effective FY 2015, the below
must be provided as required supplementary information:
1. Policies for ranking and prioritizing maintenance and repair activities.
2. Whether DM&R related solely to capitalized general PP&E and noncapitalized
stewardship PP&E or also to amounts relating to noncapitalized or fully depreciated
general PP&E.
3. Capitalized general PP&E, and non-capitalized heritage assets and stewardship land for
which you do not measure and/or report DM&R and the rationale for the exclusion.
4. If applicable, explanation of any significant changes to the policies and factors subject to
the reporting requirements established.
Furthermore, the Coast Guard includes only maintenance items in these categories that are
deferred due to funding constraints (i.e., financially slipped deferred maintenance). This
provides the best test to ensure that the Coast Guard is reporting a realistic measure of actual
deferred maintenance at the end of the fiscal year.
The presentation in the annual financial statements of the dollar value of deferred maintenance,
as required in the supplemental information, enables management and oversight authorities to
measure the Coast Guard’s stewardship of its assets. It also allows for comparison of the dollar
amount of deferred maintenance for any given year against the funding levels for that particular
year.
For definitions, detailed procedures, and responsibilities regarding the accounting process used
to determine, evaluate, and record deferred maintenance on capital and non-capital accountable
personal and real property refer to the Financial Resource Management Manual – Procedures
(FRMM-P), COMDTINST M7100.4 (series), Section 10.4 (Deferred Maintenance and Repairs).
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10.4.1 Purpose
This Section prescribes the accounting policies used to determine, evaluate, and record deferred
maintenance on capital and non-capital accountable personal and real property.
10.4.2 Scope
This policy applies to capitalized and non-capitalized accountable personal and real property.
Personal and real property is capitalized, recorded in the general ledger (GL), and depreciated if
the acquisition cost is at or above the applicable capitalization threshold. Refer to the U.S. Coast
Guard Personal Property Management Manual (PPMM), COMDTINST M4500.5 (series), and
the U.S. Coast Guard Real Property Management Manual (RPMM), COMDTINST M11011
(series), for the capitalization thresholds.
10.4.3 Authorities
1. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant, and Equipment,
November 1995. This standard provides accounting standards for federally owned PP&E.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
2. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 8, Supplementary Stewardship Reporting, June 1996.
This standard establishes the requirements for reporting on the Federal Government’s
stewardship over certain resources entrusted to it, and certain responsibilities assumed by
it.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 14, Amendments to Deferred Maintenance Reporting
Amending SFFAS 6, Accounting for Property, Plant and Equipment and SFFAS 8,
Supplementary Stewardship Reporting, June 1999. As amended, the standards require
that deferred maintenance information be included as RSI. Thus, a line item for “deferred
maintenance” would no longer be required on the statement of net costs with a reference
to a note disclosed.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 40, Definitional Changes Related to Deferred
Maintenance and Repairs: Amending Statement of Federal Financial Accounting
Standards 6, Accounting for Property, Plant, and Equipment, May 2011.
This standard requires agencies to include deferred repairs in the deferred maintenance
terminology and in the accounting and reporting of deferred maintenance and repairs.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 42: Deferred Maintenance and Repairs: Amending
Statements of Federal Financial Accounting Standards 6, 14, 29 and 32, April 2012.
This standard establishes the definitions and requirements for the measurement and
reporting of deferred maintenance and repairs. The standard amends the required
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supplementary information (RSI) presentation requirements in SFFAS 6, 14, 29, and 32.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
6. Office of Management and Budget (OMB), Circular A-123, Management’s
Responsibility for Internal Control, including Appendix A-Internal Control over
Financial Reporting, December 2004. This Circular requires agencies to establish,
maintain, and annually evaluate and report on controls for their program and
administrative activities.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7. Office of Management and Budget (OMB), Circular A-136, Financial Reporting
Requirements. This Circular establishes a central point of reference for all Federal
financial reporting guidance for executive departments, agencies, and entities required to
submit audited financial statements, interim financial statements, and Performance and
Accountability Reports (PAR) under the Chief Financial Officers Act of 1990.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
8. Department of Homeland Security Financial Accountability Act of 2004 (Public Law
108-330). The Act gives specific instructions to the DHS regarding Federal financial
management, performance management, and subsequent reporting requirements.
http://www.gpo.gov/fdsys/pkg/STATUTE-118/pdf/STATUTE-118-Pg1275.pdf
9. Department of Homeland Security (DHS) Office of Financial Management (OFM),
Component Requirements Guide for Financial Reporting, (series). This Guide gives DHS
components detailed instructions for financial reporting procedures.
http://cfo-policy.dhs.gov/default.aspx
10. Department of Homeland Security, Financial Management Policy Manual (FMPM),
Section 3.1 Property, Plant, and Equipment.
http://cfo-policy.dhs.gov/default.aspx
10.4.4 Responsibilities
10.4.4.1 Office of Budget Execution (CG-DCMS-83)
CG-DCMS-83 personnel:
1. Gather deferred maintenance information as of the last day of the fiscal year, ensuring
that methodology is followed, and resolve discrepancies.
2. Forward deferred maintenance information to Commandant (CG-84) to meet reporting
deadline requirements.
10.4.4.2 Office of Financial Policy, Reporting and Property (CG-84)
Commandant (CG-84):
1. Provides oversight for developing methodology and conducting analysis for Coast Guard
deferred maintenance reporting.
2. Coordinates with DCMS-83 for the proper gathering of deferred maintenance data.
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3. Ensures programmatic concurrence from the Office of Programs, Commandant (CG-82),
and reports required supplementary information on deferred maintenance to the Finance
Center (FINCEN) for inclusion in the annual consolidated financial statements.
For detailed responsibilities on the accounting process used to determine, evaluate, and record
deferred maintenance on capital and non-capital accountable personal and real property refer to
the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Section 10.4 (Deferred Maintenance and Repairs).
10.4.5 General Policy
10.4.5.1 Method for Measuring Deferred Maintenance and Repairs
The method used to determine the estimated amounts of DM&R must be reported in the
narrative statement to the required supplementary information. The federal-wide accounting
standard permits the use of:
1. Condition assessment surveys;
2. Life cycle cost forecasts; and
3. Other methods that are similar to the condition assessment survey or life-cycle costing
methods.
10.4.5.2 Required Supplementary Information (RSI)
At a minimum, DM&R will be presented in the financial statements as required supplementary
information for all general PP&E. The following shall be included for each category of PP&E
(e.g., general PP&E) as established in SFFAS No. 6, Accounting for Property, Plant, and
Equipment:
a. Identification of each major class of asset for which maintenance and repairs have been
deferred. The Component will determine the “major classes” of general PP&E. Major
classes include but are not limited to buildings and structures, furniture and fixtures,
equipment, vehicles, and land.
b. Method of measuring deferred maintenance and repairs for each major class of PP&E.
1. If the condition assessment survey method of measuring deferred maintenance and
repairs is used, the following shall be presented for each major class of PP&E:
a) Description of requirements or standards for the acceptable operating condition.
b) Any changes in the condition requirements, or standards.
c) Asset condition and a range or a point estimate of the dollar amount of
maintenance and repair needed to return assets above, at, or in acceptable
operating condition. Examples of condition information include, but are not
limited to averages of standardized condition rating codes, the percentage of
assets above, at or acceptable-condition, or narrative information.
2. If the total life cycle method is used, the following shall be presented for each major
class of PP&E:
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a) The original date of the maintenance and repair forecast and an explanation of any
changes to the forecast.
b) The prior-year balance of the cumulative DM&R amount.
c) The dollar amount of the maintenance and repair requirement estimated for the
reporting period.
d) The dollar amount of the maintenance and repair actually performed during the
period.
e) The difference between the forecast and actual maintenance and repair.
f) Any adjustments to the scheduled amounts deemed necessary.
g) The ending cumulative balance for the reporting period for each major class of
asset experiencing DM&R.
3. Other methods may be used to estimate the amount of DM&R and shall be
accompanied by information that describes the method.
10.4.6 Reporting of Deferred Maintenance and Repairs
DM&R shall be reported, as required, up to and within the fiscal year of an asset’s disposal.
Amounts reported for deferred maintenance may be measured by using condition assessment surveys
or life-cycle cost forecasts. Once the asset is fully retired from the unit’s records, no further deferred
maintenance shall be recorded.
Commandant (CG-84) shall ensure that the following information is presented as supplementary
information for all personal property:
1. Identification of each major class of asset for which maintenance has been deferred;
2. Method of measuring deferred maintenance for each major class of personal property;
3. Condition assessment survey method of measuring deferred maintenance, if used; and
4. Total life-cycle cost method for each major class of personal property, if used.
The Coast Guard reports on the value of maintenance necessary to restore the asset so that it
continues to provide acceptable services, and achieves its expected life. Reports are prepared for the
four depot-level classification categories that need to be restored to “excellent” condition, but only
when the maintenance is postponed due to funding shortfalls. The four depot-level categories are:
1. Aviation Depot-Level (AFC-41) for Aircraft;
2. Electronics Depot-Level (AFC-42) for Electronics;
3. Shore Facility Depot-Level (AFC-43) for Buoys and Aids to Navigation; and
4. Naval Depot-Level (AFC-45) for Vessels.
10.4.7 Aviation (AFC-41) Depot-Level Deferred Maintenance
The total amount of aviation (AFC-41) depot-level deferred maintenance is the sum of:
1. Financially slipped overhauls;
2. Financially slipped emergency repairs;
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3. Financially slipped inventory reorders;
4. Financially slipped inventory repairs;
5. Financially slipped depot-level projects; and
6. Financially slipped mandated repairs.
10.4.8 Electronics (AFC-42) Depot-Level Deferred Maintenance
The total amount of electronics (AFC-42) depot-level deferred maintenance is the sum of:
1. Financially slipped replacement and replenishment projects;
2. Financially slipped inventory reorders;
3. Financially slipped inventory repairs; and
4. Financially slipped overhauls.
10.4.9 Shore Facility (AFC-43) Depot-Level Deferred Maintenance
The total amount of shore facility (AFC-43) depot-level deferred maintenance is estimated using
the following definitions:
1. Value of Deficiencies. The value of depot-level shore facility maintenance deficiencies,
which are documented as projects in the Shore Asset Management (SAM) system, but are
not funded as of the last day of the fiscal year include:
a. Corrective maintenance that corrects a deficiency to an asset that remains in service
but may have a potential to impact fulfilling daily operational missions.
b. Emergency maintenance that corrects a loss of capabilities, having an immediate
impact on fulfilling daily operational missions.
c. Event maintenance that is a category of preventive maintenance where the frequency
is based on asset/equipment performance (e.g., engine hours or pressure readings).
This only qualifies as deferred maintenance when the project has not been completed
based on a scheduled date.
d. Preventive maintenance that is based on a schedule where the frequency is based on
time/calendar. This only qualifies as deferred maintenance when the project has not
been completed based on a scheduled date.
2. Criteria for Deficiencies. Each deficiency must represent a functional failure; failure to
meet the manufacturer’s performance specifications; or be a near functional failure as
supported by a condition assessment conducted by a professional civil engineer or the
unit engineer. The cost figure for each project greater than $200,000 must be supported
by either a Means-Cost Construction worksheet, a Whitestone cost estimate, a current
comparable contract cost, or other cost estimate conforming to professional standards.
No demolition, code compliance, or alteration and improvement components will be
considered as deferred maintenance.
10.4.10 Naval (AFC-45) Depot-Level Deferred Maintenance
The total amount of naval (AFC-45) depot-level deferred maintenance is the sum of:
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1. Financially slipped availabilities;
2. Financially slipped emergency repairs;
3. Financially slipped inventory reorders;
4. Financially slipped inventory repairs; and
5. Financially slipped depot-level projects.
For detailed procedures regarding the accounting process used to determine, evaluate, and record
deferred maintenance on capital and non-capital accountable personal and real property refer to
the Financial Resource Management Manual – Procedures (FRMM-P), COMDTINST M7100.4
(series), Section 10.4 (Deferred Maintenance and Repairs).
10.5 Cost Decision Table and Notes
The following cost decision table is to be used for all property categories, both real and personal.
Table 10.14 Cost Decision Table for Real and Personal Property Categories
Type of Cost Treatment
1.
Additions to existing assets that extend
capacity/useful life (e.g., improvements) Capitalize
2. Advance payments
Capitalize
(See Note 1.)
3.
Architecture and engineering costs
(Rendering, Soil Testing, Drawings) Capitalize
4. Building costs (Coast Guard-owned) –
original costs and major improvements Capitalize
5. Calibration of equipment:
a) Incurred during or prior to project
completion.
b) Incurred after project completion;
normally funded with O&S Funds.
Capitalize
Expense
6.
Configuration management after a
technological feasibility has been
completed Capitalize
7.
Consumable and repairable spare parts
(OM&S)
Expense
(See Note 8.)
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Type of Cost Treatment
8.
Contractor logistics support and contractor
depot logistics support after completion.
Normally associated with normal
maintenance, and typically funded with
O&S Funds Expense
9.
Damage claims related to the project, paid
by the Coast Guard to a contractor Capitalize
10.
Decommissioning, retirement costs
(clean-up, site restoration, environmental
due diligence act)
Expense
(See Note 2.)
11. Demolition costs:
a) Incurred in conjunction with an
acquisition or lease of real estate.
b) If no construction is intended.
Capitalize
(See Note 14.)
Expense
12. Deployment readiness review
(in-service decision) Capitalize
13.
Design costs (system & engineering) –
Hardware, software, failure mode
criticality analysis, maintainability/
reliability program & demonstration costs:
a) Before feasibility has been determined.
Note: Feasibility is normally a factor only
in large, new-technology projects.
b) After feasibility has been determined.
Expense
Capitalize
14.
Design reviews (e.g., formal qualification
reviews, preliminary and critical design
reviews:
a) Before feasibility has been determined.
Note: Feasibility is normally a factor only
in large, new-technology projects.
b) After feasibility has been determined.
Expense
Capitalize
15.
Direct costs for developing or fielding a
system (e.g., boats, aircraft, vessels,
electronic systems), incurred by either the
Coast Guard or a contractor, after
technological feasibility has been proven Capitalize
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Type of Cost Treatment
16.
Documentation (system) costs incurred
prior to project completion (e.g., guides,
user manuals) Capitalize
17. Easements (land rights) Capitalize
18. Engineering costs (See Design costs.) Capitalize
19. Environmental impact (new construction) Capitalize
20.
Environmental remediation costs
(Coast Guard-owned property):
Underground storage tanks, asbestos
removal, soil removal, and restoration (as
part of a new facility construction or
cleanup after
construction/decommissioning).
Capitalize
(See Note 2.)
(See Note 3.)
(See Note 4.)
21.
Equipment costs (Coast Guard operating
lease) used to facilitate the completion of
a CG project (e.g., boats, aircraft, vessels,
electronic systems) Capitalize
22. Failure mode critical analysis (See Design costs.)
23. First articles and prototypes
Capitalize
(See Note 5.)
24.
Furniture
(initial purchase as part of a project)
Capitalize
(See Note 6.)
25. General and administrative (G&A) costs:
a) Internal Coast Guard G&A.
b) Contract-provided G&A.
Expense
Capitalize
26.
Government-furnished equipment/material
consumed as part of the project cost Capitalize
27. Handling and storage costs:
a) Prior to project completion.
b) After prior completion.
Capitalize
Expense
28.
Incentive fees to contractors (to reward
performance goals) Capitalize
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Type of Cost Treatment
29. Interest payments
Prompt-payment interest
Capitalize
Expense
30. Labor costs during construction:
a) Technical support services contract.
b) Logistics support services contract
before project completion.
Note: Logistics services after a project is
completed are considered a normal
maintenance activity and must be
expensed.
c) PC&I billets (core and project
management).
d) Contractor support to program offices
(program management, systems
engineering and testing).
Capitalize
Capitalize
Capitalize
Capitalize
31.
Land acquisition costs (e.g., survey, title
services, appraisals, fees, razing existing
structures acquired from others,
environmental due diligence, and purchase
price) Capitalize
32.
Lease payments for equipment
(e.g., PP&E used to facilitate project
completion):
a) Capital lease.
b) Operating lease.
Capitalize
(See Note 7.)
Expense
33.
Lease payments for land, where the Coast
Guard will not receive title to the land (See Note 7.)
34.
Leasehold improvements to non Coast
Guard-owned assets (e.g., major
renovations, rewiring buildings,
rehabilitating/enlarging piers) Capitalize
35.
Legal fees incurred to bring the project to
its intended use (e.g., title and recording
costs) Capitalize
36.
Legal fees – external (non Coast Guard -
incurred legal costs to bring the project to
its intended use) Capitalize
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Type of Cost Treatment
37. Maintenance and repair costs Expense
38. Material costs:
a) Contractor-acquired property.
b) Other contractor-provided material.
c) Government-furnished material (GFM)
provided to the contractor.
Capitalize
Capitalize
Capitalize
39.
Modifications to systems or equipment
that provide a new capability or extend
useful life (e.g., major upgrades,
“leapfrog” modifications) Capitalize
40.
Other Coast Guard-owned structures (e.g.,
electrical systems, roads, parking lots,
piers, sidewalks, sewage systems, and
towers) – original cost and major
improvements Capitalize
41.
Packaging, postage, and packing
(contractor costs):
a) Costs incurred prior to project
completion.
b) Costs incurred after project completion.
Capitalize
Expense
42. Prepayments (See Note 1.)
43.
Price adjustments (e.g., economic price
adjustments, equitable price adjustments) Capitalize
44. Production readiness review Capitalize
45. Progress payments
Capitalize
(See Note 1.)
46. Project management costs by contractors
Note: For Coast Guard PC&I labor costs
see Labor. Capitalize
47. Prototypes and first articles
Capitalize
(See Note 5.)
48.
Real estate costs incurred to place the
project into operation (See also Land
acquisition costs.) Capitalize
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Type of Cost Treatment
49.
Renovation costs (See also Building costs,
Equipment costs, Leasehold
improvements, and Other Coast Guard-
owned structures.) Capitalize
50. Rental costs:
a) Equipment/storage space prior to
project completion.
b) Equipment/storage space after project
completion.
Capitalize
Expense
51.
Repair costs (emergency repairs, routine
repairs such as replacing shingles or
repairing HVAC, periodic depot
maintenance, Yard availability) Expense
52. Research and development costs Expense
53.
Service costs (incurred after project
completion) Expense
54.
Shipping costs for new systems (including
handling and storage):
a) To a point of intended use (includes
fuel to move aircraft, boats, or vessels
from contractor location to initial Coast
Guard location).
b) After the point of intended use.
Capitalize
Expense
55.
Site construction costs
(See also Land acquisition costs.) Capitalize
56.
Site selection costs (e.g., legal, survey,
design, studies):
a) If the site was selected for lease or
purchase.
b) If the site was not selected for lease or
purchase.
Capitalize
Expense
57.
Software costs (internally or externally
produced, embedded)
Capitalize
(See Note 9.)
58. Special tools and test equipment hardware Capitalize
59.
System/subsystem integrity. Check
demonstration. Capitalize
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Type of Cost Treatment
60.
System tests (e.g., interface test,
operational test and evaluation):
a) Incurred prior to project completion.
b) Incurred after project completion.
Capitalize
Expense
61. Technical manuals or publications Capitalize
(See Note 15.)
62. Technical support services:
a) Incurred prior to completion.
b) Incurred after completion.
Capitalize
Expense
63.
Technology refreshment of COTS
components (includes product
improvements or upgrades)
Capitalize
(See Note 10.)
64. Telecommunications:
a) Initial (if an integral part of the project
cost).
b) Service (normal activity; not tied to
project completion).
Capitalize
Expense
65. Test/Readiness review Capitalize
66. Test equipment:
a) Procured as an embedded or required
component of a system.
b) Stand-alone test equipment (not part of
a system).
Capitalize
Capitalize as a unique
asset
(See Note 11.)
67.
Training (e.g., on the operation, use, or
maintenance of acquired property) Expense
68.
Training courses and devices developed
by the Coast Guard or contractor
personnel – course development costs
and/or construction of training devices
(system/asset specific)
Capitalize as a unique
asset
69.
Training courses, both refresher and
follow-on training given to Coast Guard
personnel Expense
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Type of Cost Treatment
70. Travel:
a) In conjunction with inspection,
supervision, and administration of
construction contracts and project
responsibility.
b) General and administrative travel for a
common or joint purpose benefiting more
than one cost objective, such as travel to
monitor several projects, or project costs
such as Coast Guard crew relocation and
travel costs incurred to relocate the crew
during work on a CG vessel.
c) Continuous travel orders that cover,
e.g., per diem, lodging, airfare, car rental.
Expense
(See Note 12.)
Expense
Expense
71. Utilities:
a) To bring the asset to its intended use
(e.g., installation, site preparation).
Note: Utilities are normally operating
expenses.
b) After project completion (even if paid
by PC&I funds).
Capitalize
Expense
72. Warranties
Expense
(See Note 13.)
Note 1: Advances and progress payments made to contractors as part of a CIP project should be
added to the CIP account for the asset being constructed.
Note 2: Capitalize all environmental remediation and cleanup costs required to bring an asset to
a form and location suitable for its intended use. This includes all costs, including remediation
and cleanup costs, incurred to dispose of an asset when the disposal is required to construct a
new asset. Expense all costs associated with decommissioning or disposing of an asset when the
disposal is not required for the construction of a new asset. Note: If non-environmental
retirement costs cannot be easily separated from environmental costs, they can be included as
part of the environmental cleanup costs.
Note 3: For hazardous-materials projects that clean up existing facilities and do not include
equipment costing $50,000 or greater, expense all costs as they are incurred. If new equipment is
acquired to address environmental concerns (such as scrubbers or filtration devices), account for
such equipment as a new capital asset if it meets capitalization thresholds. Otherwise, expense
the equipment.
Note 4: When an asset is placed in service (commissioned), the estimated environmental
cleanup costs must be recorded. Commandant (CG-47) will assist in calculating the estimated
total environmental cleanup cost and recognizing it as an unfunded liability.
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Note 5: Expense any costs incurred on a first article or prototype before technological feasibility
has been established. After technological feasibility has been established, the subsequent costs
of constructing and installing the first article are eligible for capitalization and depreciation over
the useful life of the asset. If the first article is an improvement to an existing asset and does not
extend the life of the existing asset, depreciate the prototype over the remaining useful life of the
existing asset. If the prototype extends the useful life of the existing asset, add the cost of the
prototype to the existing asset and depreciate the remaining Net Book Value (NBV), plus
prototype costs over the new useful life. If the first article/prototype is not intended to be placed
in operational service, but is to be used solely for testing, capitalize and depreciate it over the
estimated useful life of the test equipment. If the system is destroyed during testing, write off the
asset at that time.
Note 6: Furniture will be capitalized if it is built into or attached to the project asset and would
damage the asset if removed. If individual pieces of non-attached furniture meet capitalization
thresholds, then they must be capitalized and not listed as part of the project cost. If individual
pieces of non-attached furniture do not meet the capitalization threshold for GPP, then they must
be expensed.
Note 7: Capital lease assets are capitalized upon a determination that the lease meets the capital
lease criteria of SFFAS No. 6, Accounting for Property, Plant, and Equipment.
Note 8: Consumable and repairable spare parts (OM&S) shall be expensed from CIP projects
and recorded in the OM&S spare parts applications (e.g., ALMIS, NESSS, FLS) at the ICP or
field unit location.
Note 9: Software embedded in a system is part of the system’s total cost. Other costs (both
internally and externally incurred) may be capitalizable for software procured independently of
the hardware on which it is resident. Examples of capitalizable costs are the costs to purchase or
develop software, including design, coding, testing, and installation. Any enhancements that
correct design flaws in software, including developmental costs (e.g., evaluation of alternatives,
data conversion, costs incurred after final acceptance, or software maintenance), are not eligible
for capitalization.
Note 10: If the original asset was recorded as line-item accountable, delete the old record and
record the replacement component as a new detail property record. Capitalize it if it meets the
capitalization criteria. If the original asset was recorded as a system, determine whether the
replacement component provides a new capability (not previously included) or extends the useful
life of the asset. If it does, capitalize it as an improvement if it meets the capitalization criteria; if
it does not, expense it.
Note 11: If stand-alone test equipment (test equipment not part of a system) meets the
capitalization threshold criteria, add it to the fixed asset system; if it does not, expense it.
Note 12: The Coast Guard has determined that travel orders will be expensed, since they do not
meet the definition of direct costs. SFFAS No. 4, Managerial Cost Accounting Standards and
Concepts, indicates that direct costs are costs that can be specifically identified with an output,
and SFFAS No. 6, Accounting for Property, Plant, and Equipment, calls for capitalization of the
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“direct costs of inspection, supervision, and administration of construction contracts.” Since
Coast Guard travel orders cannot be directly linked to a specific asset, they will be expensed.
Note 13: If the Coast Guard purchases an extended warranty that covers multiple accounting
periods (i.e., crosses fiscal years) it constitutes by definition a prepaid expense and the applicable
future benefit should be recorded as a prepaid asset on the balance sheet. The current year’s
portion is an expense at the time the invoice is paid. See Section 7.12.7, Advances and
Prepayments for a more detailed discussion.
Note 14: Costs related to the demolition of a building in preparation for new construction are
capitalized as part of building costs. Costs related to gutting the interior of a warehouse in
preparation for reconstructing the interior as office space are likewise capitalized as part of
building costs. If demolition is not associated with new construction or improvements, these
costs should be expensed in the period incurred.
Note 15: Capitalize all new Manuals or Publications. Reproductions or modifications to
manuals will be expensed. Modifications to manuals, include editing a manual to conform to
Coast Guard terminology or processes, shall be expensed. Copies of the initial manual or
publication, such as manuals for the project residence office, are expensed.
10.6 Financial Accounting and Reporting of Capital and Operating
Leases
10.6.1 Overview
The Coast Guard manages and maintains financial accountability and reporting responsibilities
for a variety of property defined as “real or personal property leased assets.” The leased assets
are acquired through Coast Guard and General Services Administration (GSA) leasing programs
located at various Coast Guard field unit locations, and their associated values are reflected in
Coast Guard financial statements. Coast Guard field units with leased property assets, as well as
Coast Guard personnel with oversight authority (i.e., HQ program offices; CEU real property
inventory specialists), are responsible for the proper safeguarding, management, monitoring, and
reporting of these assets. Coast Guard directorates, or their designees, will identify, report,
maintain, and account for leased property.
The Coast Guard acquires leased assets through capital leases or operating leases. For capital
leases, it is required to record an asset and a liability which impacts the Balance Sheet. For
operating leases, there is no Balance Sheet impact, but there is an impact on the Statement of Net
Cost, and there are financial statement disclosure requirements for both capital and operating
leases. The cost of property acquired through a capital lease is recorded as an asset and is
depreciated. Rental or lease costs of property acquired under an operating lease are recorded as
an operating expense in the accounting period in which the costs are incurred. This policy
requires Coast Guard directorates or their designees to manage transactions and record values for
all capital and operating leases. It details the requirements for planning and budgeting, approval,
acquisition, receipt, valuation, capitalization, and recording of property leases. This policy
ensures that capital and operating leases will be recorded timely and accurately in the appropriate
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general ledger (GL) accounts and disclosed in the notes of the financial statements in accordance
with generally accepted accounting principles (GAAP).
10.6.2 Purpose
The purpose of this Section is to prescribe policies for the accounting of Coast Guard real and
personal property leased assets.
10.6.3 Scope
This Section stipulates policy for the physical and financial accountability of Coast Guard real
and personal property leased assets through new leases, renewals, or modifications of leases.
This policy also assists property managers and accounting and financial personnel in
understanding their roles and responsibilities relating to the leased property. This policy applies
to all sources of funds and all directorates, or their designees, involved in all life cycle business
events related to the real and personal property.
10.6.4 Authorities
1. Antideficiency Act, as amended. 31 USC 1341-1342, 1349-1351, 1511-1519.
http://www.gpo.gov/fdsys/pkg/USCODE-2011-title31/pdf/USCODE-2011-title31.pdf
2. Chief Financial Officers Act of 1990. PL 101-576.
http://govinfo.library.unt.edu/npr/library/misc/cfo.html
3. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal
Government, December 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
4. Federal Accounting Standards Advisory Board, Statement of Federal Financial
Accounting Standards (SFFAS) No. 6, Accounting for Property, Plant and Equipment,
November 1995.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
5. Federal Accounting Standards Board, Statement of Financial Accounting Standards
No. 13, Accounting for Leases, November 1976.
http://www.fasb.org/pdf/aop_FAS13.pdf
6. Office of Management and Budget, Circular A-11, Preparation, Submission and
Execution of the Budget, June 2015.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
7. Office of Management and Budget, Circular A-94, Guidelines and Discount Rates for
Benefit-Cost Analysis of Federal Programs, appendix C, “Discount Rates for Cost-
Effectiveness, Lease-Purchase, and Related Analyses for OMB Circular No. A-94”,
December 2014.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
8. Office of Management and Budget, Circular A-136, Financial Reporting Requirements.
https://www.whitehouse.gov/omb/information-for-agencies/circulars/
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9. Department of Homeland Security, Chief Financial Officer, Financial Management
Policy Manual (FMPM), Section 3.1, “Property, Plant and Equipment”.
http://cfo-policy.dhs.gov/
10. Civil Engineering Manual, COMDTINST M11000.11 (series).
http://www.dcms.uscg.mil/directives
11. Major Systems Acquisition Manual (MSAM), COMDTINST M5000.10 (series).
http://www.dcms.uscg.mil/directives
12. U.S. Coast Guard Personal Property Management Manual, COMDTINST M4500.5
(series).
http://www.dcms.uscg.mil/directives
13. U.S. Coast Guard Real Property Management Manual, COMDTINST M11011.11
(series).
http://www.dcms.uscg.mil/directives
14. Head of Contracting Activity Governance Memorandum (HCA-GM 13.0-0) Purchases
Using Simplified Acquisition Procedures, October 2016.
http://www.dcms.uscg.mil/directives
10.6.5 Responsibilities
10.6.5.1 Headquarters Lease Program Offices
1. The HQ lease program offices are jointly managed by:
a. Commandant (CG-431) for real property leases; and
b. Commandant (CG-84) for personal property leases.
2. The HQ lease program offices:
a. Assume the overall responsibility for all leases, capital and operating, Coast
Guard-wide.
b. Appoint a lease program officer and document the appointment in writing.
c. Ensure that the responsibilities outlined in this policy are executed.
d. Provide training, assistance, and oversight to HQ program office lease POCs, as
required.
10.6.5.2 Headquarters Program Offices
1. The HQ program offices are:
a. Assistant Commandant for Human Resources (CG-1);
b. Deputy Commandant for Operations (DCO);
c. Assistant Commandant for Engineering and Logistics (CG-4);
d. Assistant Commandant for Command, Control, Communications, Computers and
Information Technology (CG-6);
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e. Assistant Commandant for Capability (CG-7);
f. Assistant Commandant for Resources (CG-8); and
g. Assistant Commandant for Acquisition (CG-9).
2. The HQ program offices:
a. Assume responsibility for the coordination of all lease activity within the directorate
and within those units receiving funding under the authority of the directorate. This
includes the day-to-day functions of all activities related to capital and operating
leases.
b. Appoint at least one lease POC and document the appointment in writing, with copies
to Commandant (CG-84), Commandant (CG-431), and FINCEN (FR).
c. Ensure that the lease POC timely and accurately executes the responsibilities outlined
in this policy.
10.6.5.3 Lease POCs
Lease POCs are appointed by their responsible HQ directorate/program office, and the
appointment is evidenced in writing.
Lease POCs:
1. Receive training as required from the appropriate HQ lease program office.
2. Execute timely, accurate, and complete reviews of all annual budgets to identify all
prospective leases. With the local budget officer/comptroller staff, ensure that these
budget reviews tie to official approved funds in Coast Guard budgetary applications and
that prospective leases are identified using the criteria outlined in this policy.
3. Work with the KOs and the contracting officers’ representatives (CORs) to ensure that
appropriate acquisition personnel issue contracts in a manner that identifies all leases
with the appropriate information.
4. Review accounting transactions, including budgetary, in the financial system of record to
ensure that lease costs are recorded timely and accurately.
5. Gather and provide the documentation required to record all leases, including leasehold
improvements, within the timeframes established in this policy.
6. Work with HQ program offices, Commandant (CG-84), and FINCEN (FR to record all
leases timely and accurately.
7. Provide HQ program offices, Commandant (CG-84), and FINCEN (FR) with timely,
accurate lease closeout information within the timeframes established in this policy.
8. Ensure that the data in the local leased asset application, if used, ties to Oracle FAM.
9. Develop local desktop processes as necessary.
10. Retain audit-compliant evidential documentation at appropriate levels to support reviews,
analysis, decisions, reporting, and certifications relating to each lease, for the period of
the lease term plus three fiscal years.
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10.6.5.4 Deputy Commandant for Resources (CG-8)
Commandant (CG-8):
1. Maintains overall responsibility for the development, promulgation, and enforcement of
capital and operating lease policy used by all organizational components.
2. Maintains overall responsibility for the preparation and review of the financial statements
required by this policy and CFO reporting requirements.
10.6.5.5 Office of Financial Policy, Reporting, and Property (CG-84)
Commandant (CG-84):
1. Provides oversight for the development, promulgation, and enforcement of the capital
and operating lease policy used by all organizational components.
2. Provides oversight for the preparation and review of the financial statements required by
this policy and CFO reporting requirements.
10.6.5.6 Financial Reporting and Analysis Division (CG-84)
Commandant (CG-84):
1. Monitors and assists lease POCs with the execution of their responsibilities as outlined in
this policy.
2. Develops and implements training in the capital and operating lease accounting for lease
POCs and other key personnel involved in the lease process.
3. Develops, maintains, and enforces the lease policy used by all organizational
components.
4. Assists lease POCs in developing standard procedures, with controls, for all lease
activity.
5. Remains current with GAAP and FASAB developments related to leases and maintains
lease policy as appropriate.
6. Maintains GAAP-compliant policy related to leases.
7. Provides oversight, analysis, and financial management requirements for managing all
property recorded under leases.
8. Coordinates reviews of the financial transactions relating to leased property, to ensure
accuracy and alignment with policy and to ensure that all leases are properly recorded
and accounted for.
9. Provides oversight to FINCEN (FR) for the preparation, review, and analysis of lease
information contained in the financial statements and note disclosures.
10. Ensures that audit-compliant evidential documentation is maintained at appropriate levels
to support Commandant (CG-84) decisions, reporting requirements, and certifications
relating to each lease, for the period of the lease term plus three fiscal years.
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10.6.5.7 Finance Center
FINCEN (FR) personnel:
1. Implement and maintain audit-compliant desktop procedures for the lease processes
conducted within FINCEN (FR).
2. Maintain and review GL balances and supporting documentation for accuracy and for the
valuation and external reporting of capital leases.
3. Ensure that all leases are promptly recorded, to include the lease classification provided
by the lease POC, upload proper recording information via SharePoint.
4. Provide financial information and reports for all capital leases to the lease POCs and
other Coast Guard offices, as required.
5. Ensure that all capital leases are properly reflected in the financial statements and that all
footnote information is both properly disclosed and accurate.
6. Ensure that audit-compliant evidential documentation is kept at appropriate levels to
support FINCEN decisions, reporting requirements, and certifications relating to each
lease, for the period of the lease term plus three fiscal years.
10.6.6 Policy
10.6.6.1 Types of Lease Assets (Capital and Operating)
1. Leases shall be classified as either capital leases or operating leases by means of the
identification criteria specified in Subsection 10.6.7.2 below.
2. An operating lease is any lease not classified as a capital lease.
3. Leases can be entered into as new leases, renewals, or modifications. All Subsections of
this policy apply to new leases, renewals, and modifications.
Note: Certain leasehold improvements may also be part of the accounting for leases, see Section
10.6.7.5 below for a detailed discussion of accounting for lease costs.
10.6.6.2 Identifying Criteria for Leased Assets
1. If at its inception, a lease meets one or more of the following four criteria, then the lease
POC shall classify and report the lease as a capital lease. These criteria apply to both
real and personal property.
a. The lease transfers ownership of the property to the lessee by the end of the lease
term.
b. The lease contains a bargain-price purchase option (i.e., an option to purchase the
leased property at a bargain price).
c. The lease term is equal to or greater than 75 percent of the estimated economic life of
the leased property.
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d. The present value of rental and other minimum lease payments, excluding the portion
of the payments representing executory (i.e., transaction) costs, equals or exceeds
90 percent of the FMV of the leased property.
Note 1: The last two criteria are not applicable when the beginning of the lease term falls
within the last 25 percent of the total estimated economic life of the leased property.
Note 2: For budgetary purposes, OMB Circular A-11 provides guidance to determine if
a lease is capital or operating for funding purposes. This determination is referred to as
scoring the lease, see Financial Resource Management Manual – Procedures (FRMM-P),
COMDTINST M7100.4 (series), Section 10.6, Procedure No. 10.6.1 (Classification of
Lease Assets (Capital and Operating) and Identifying Criteria for Real Property Leased
Assets) and 10.6.2 (Classification of Lease Assets (Capital and Operating) and
Identifying Criteria for Personal Property Leased Assets). This guidance applies to
budgetary sources of funds only – it should not be used to determine the classification
and financial reporting of a lease.
2. The lease POC shall use the following criteria for identifying and classifying a lease as an
operating lease. These criteria apply to both real and personal property.
a. Ownership of the asset remains with the lessor during the term of the lease and is not
transferred to the Government at or shortly after the end of the lease period.
b. The lease does not contain a bargain-price purchase option.
c. The lease term does not exceed 75 percent of the estimated economic life of the asset.
d. The present value of the minimum lease payments over the life of the lease does not
exceed 90 percent of the FMV of the asset at the inception of the lease.
e. The asset is a general-purpose asset (rather than being a special purpose of the
Government) and is not built to unique specification for the Government as lessee.
f. There is a private-sector market for the asset.
Note: The risks of ownership of the asset remain with the lessor.
10.6.6.3 Identifying Leased Assets and Lease Renewals through Budgetary
Review
Ensuring that leases are timely and accurately identified from budgetary reviews is a critical step
in establishing proper procurement requests (PRs) and their subsequent contracts. This also
ensures that accurate data is entered into Coast Guard applications to support reviews and
decisions.
1. Lease POCs shall ensure that timely and accurate reviews of all annual budgets are
conducted within 30 days of budget receipt so that leases and lease renewals can be
identified. Capital leases shall be identified at the earliest point possible (i.e., after the
operational requirement is determined as the best option for the Government).
Prospective leases can occur from direct or delegated authority lease contracts and/or as
part of contract activity in CIP projects.
2. Lease POCs shall notify the HQ program office, Commandant (CG-84), and
FINCEN (FR) that annual reviews have been completed, and shall report the prospective
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leases (capital and operating) and lease renewals that may occur from budget execution
within five business days of completion of the budget review.
3. Lease POCs shall report the following results of the lease asset review to the HQ program
office, Commandant (CG-84), and FINCEN (FR) in a memorandum:
a. Date the review was conducted;
b. Number of capital and operating leases and lease renewals that will be entered into;
c. Description of the leased asset;
d. Document type and object class code to be used on the PR;
e. Estimated time schedule of delivery;
f. Estimated period of the leased asset;
g. Acceptance criteria for the leased asset (e.g., Material Inspection and Receiving
Report, Form DD 250);
h. Types of documents that support the cost of the leased asset (e.g., contracts, MIPRs);
and
i. CIP project number (if the lease is part of a CIP project).
4. Lease POCs shall collaborate with CIP project managers (PMs) to ensure that, when
leases and lease renewals are part of a CIP project (i.e., not a direct purchase), the lease
costs are accounted for accurately and undergo reviews as part of the CIP project
processes until the lease is realized at its inception.
5. Lease POCs shall ensure that reviews are conducted on budget increases each fiscal
quarter. If leases and lease renewals are identified, additional notifications (e.g., by
e-mail) shall be made to Commandant (CG-84) and FINCEN (FR).
6. Lease POCs shall gather and retain audit-compliant evidential documentation to support
the reviews, analyses, decisions, and reporting related to each capital and operating lease
and lease renewal for the period of the lease term plus three fiscal years.
10.6.6.4 Creating Procurement Requests and Contracts for Leased Assets
Lease and lease renewals identified during the budgetary review process are required to be
initiated with the creation of procurement requests (PRs). The PRs are required for proper
funding obligation – they provide the KO with the documentation needed for the contract
document.
1. Lease POCs shall ensure that PRs are created using proper CIP project codes and
document type and object class codes to meet tracking and reporting requirements.
2. Lease POCs shall coordinate all PRs for capital and operating leases related to CIP
projects with the applicable CIP PM.
3. Lease POCs shall ensure that PRs are prepared and forwarded for the award in a manner
such that applicable costs can be traced to each specific leased asset through the use of
contract line identification numbers (CLINs). Each leased asset shall be identified
separately on PRs and further identified as having either a capital lease or an operating
lease.
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4. Lease POCs shall ensure that the KO receives all of the applicable information so that the
contract can be issued in a timely and accurate manner.
5. KOs who officially enter the Coast Guard into lease agreements shall ensure that
obligation documentation contains a CLIN structure sufficient for the tracing of costs to
specific leased assets. Each leased asset shall be identified as a separate contract CLIN,
and further identified as having either a capital lease or an operating lease.
6. The COR shall ensure that lease POCs are notified within three days when obligations are
issued for all leased assets.
7. Lease POCs shall ensure that contracts, lease documents, agreements, MOUs, and
analyses categorizing the lease as capital or operating are gathered, prepared, and
forwarded to Commandant (CG-84) within 20 business days of the contract award.
8. Lease POCs and CIP PMs shall ensure that audit-compliant evidential documentation is
maintained at appropriate levels to support the financial decisions, reporting
requirements, and certifications related to each capital and operating lease for the period
of the lease term plus three fiscal years.
10.6.6.5 Accounting for Lease Costs
The proper accounting for lease costs is essential to ensure the accuracy of asset records and
financial statements. Commandant (CG-84) and FINCEN (FR) shall ensure that the following
accounting requirements are met for leases and leasehold improvements:
1. Lease payments shall exclude executory costs (e.g., taxes, insurance, and maintenance).
If the costs are not determinable from the lease agreement, they shall be estimated (e.g.,
by using similar leases as a basis for the estimate).
2. Leasehold improvements made to non-CIP operating leased assets shall be expensed in
the current accounting period.
3. Leasehold improvements made to operating leased assets in CIP projects shall be
capitalized as part of the end product asset they support.
4. Leasehold improvements, which meet the capitalization criteria for the same type of
asset, shall be capitalized.
5. Leasehold improvements paid in advance shall be classified as capital expenditures.
6. Leasehold improvements that do not meet the capitalization criteria shall be expensed in
the current accounting period.
7. Leasehold improvement costs that are included in lease payments shall not be amortized.
8. Operating lease costs for CIP projects shall be capitalized as part of the end product asset
they support.
9. Operating lease costs for equipment used for several CIP projects shall be prorated so that
only a portion of each project and assets within that project are allocated the cost.
10. Operating lease improvements that have a life of two or more years and a cost equal to or
greater than the capitalization threshold for the same type of asset shall be capitalized and
amortized on a straight-line basis with no salvage value over the lesser of the
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improvement’s useful life or the term of the lease agreement, whichever is less, including
future renewal periods that are deemed reasonably assured.
11. Capital lease costs within a CIP project meeting the capital leased criteria shall be
capitalized as separately identified assets.
12. Capital lease costs shall be amortized over the shorter of the useful life of the asset or the
lease term.
13. Capital leases shall use the straight-line method of depreciation, similar to other fixed
asset acquired by the Coast Guard
14. Capital leases shall be accounted for as property purchased and shall be recorded at the
lower of the property’s FMV or the computed NPV of the minimum lease payments. The
minimum lease payment shall exclude taxes, insurance, and maintenance. The difference
between the total lease obligations/payments and the amount recorded as the capital asset
is the interest in the contract. A portion of each lease payment shall be allocated to
interest expense, and the balance of the payment shall be applied to reduce the lease
liability.
15. Capital lease recorded values shall not exceed the fair value of the leased property at the
inception of the lease.
10.6.6.6 Recording Lease Costs
Timely and accurate recording of lease transactions is critical to ensuring the accuracy of
financial statements and disclosures.
1. Commandant (CG-84) and FINCEN (FR) shall review and approve the recording in
Oracle FAM within 10 business days of receipt of the appropriate documentation from
the lease POC.
2. Commandant (CG-84) and FINCEN shall contact lease POCs through the HQ program
office for additional information, as necessary, to ensure that lease costs are recorded
timely and accurately and that they are properly supported.
3. FINCEN (FR) shall ensure that all capital leases and appropriate leasehold improvements
are recorded in Oracle FAM.
4. FINCEN (FR) shall value and amortize the capital lease in accordance with Paragraph 45
of SFFAS No. 5, Accounting for Liabilities of the Federal Government. The discount
rate shall be used to determine the present value of the minimum lease payments.
5. FINCEN (FR) shall ensure that audit-compliant evidential documentation is maintained
at appropriate levels to support the financial decisions, reporting requirements, and
certifications related to each capital and operating lease for the period of the lease term
plus three fiscal years.
10.6.6.7 Accounting and Recording of Lease Costs - Non-Level Rents
SFFAS No. 34, The Hierarchy of Generally Accepted Accounting Principles, Including the
Application of Standards Issued by the Financial Accounting Standards Board, provides “the
sources of accounting principles and the framework for selecting the principles used in the
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preparation of general purpose financial reports of federal reporting entities that are presented in
conformity with general accepted accounting principles (the GAAP hierarchy).” SFFAS No. 34,
Paragraph 7 provides for the use of other accounting literature, “If the accounting treatment for a
transaction or event is not specified by a pronouncement” in the FASAB Standards. Currently,
the accounting treatment for leases with fluctuating rents is not specified in the FASAB
standards. Therefore, in accordance with SFFAS No. 34, the Coast Guard considers the treatment
specified by the Financial Accounting Standard Board (FASB).
Per the FASB Accounting Codification Standard (ASC) 840-20-25-1, “If rental payments are not
made on a straight-line basis, rental expense nevertheless shall be recognized on a straight-line
basis unless another systematic and rational basis is more representative of the time pattern in
which use benefit is derived from the leased property, in which case that basis shall be used”.
10.6.6.8 Certification and Reporting of Leased Assets
Timely and accurate certification and reporting of leased assets is critical to ensuring that the
financial statements and footnote disclosures reflect accurate lease values.
1. Lease POCs with capital and operating leases shall certify and report the total estimated
future cost of all leases to Commandant (CG-84) and FINCEN (FR) by the last work day
of each fiscal quarter. The years to be reported are: current year (CY)+1, CY+2, CY+3,
CY+4, CY+5, and the balance after five years.
2. Lease POCs shall ensure that future costs are reviewed, certified, and approved by their
supervisor prior to reporting to Commandant (CG-84) and FINCEN (FR). All
submissions shall be signed and dated.
3. Lease POCs shall ensure that audit-compliant evidential documentation is maintained to
support the certifications, financial decisions, approvals, and reporting requirements
related to each lease for a period of the lease term plus three years.
4. Commandant (CG-84) and FINCEN (FR) shall ensure that lease POCs perform reviews
to ensure that estimated future costs are inflated per OMB guidance.
10.6.6.9 Termination or Expiration of Capital Lease Agreements
Timely reporting of the termination or expiration of lease agreements is essential to maintaining
the accuracy of Coast Guard asset records and financial statements.
1. Lease POCs shall notify Commandant (CG-84) and FINCEN (FR) of expired or
terminated capital lease agreements within 10 business days of lease expiration or
termination.
2. FINCEN (FR) shall retire the leased asset from Oracle FAM and remove the remaining
accumulated amortization. Additionally, FINCEN (FR) shall determine whether the lease
termination has resulted in a gain or a loss.
3. Lease POCs, Commandant (CG-84), and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained at appropriate levels to support the financial
decisions, approvals, reporting requirements and certifications related to their area of
responsibility for the period of the lease term plus three fiscal years.
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10.6.6.10 Annual Review of Capital Leases
Ensuring that capital leases are still active and have not been modified is essential to the
accuracy of financial statement reporting.
1. Lease POCs shall review all leases annually and shall consider the following areas:
a. Lease status;
b. Remaining lease life as of the review date;
c. Modifications;
d. Evaluation of the residual value;
e. Potential for renewals or extensions; and
f. Verification of accurate lease amounts.
2. Lease POCs shall notify Commandant (CG-84) and FINCEN (FR) when reviews of
capital leases have been completed.
3. Lease POCs shall provide to Commandant (CG-84) and FINCEN (FR) any evidential
documentation arising from their review which relates to the modification or termination
of a lease.
4. FINCEN (FR) shall modify the leased asset in Oracle FAM or retire it from Oracle FAM
and remove the remaining accumulated depreciation.
5. Lease POCs, Commandant (CG-84), and FINCEN (FR) shall ensure that audit-compliant
evidential documentation is maintained at appropriate levels to support the financial
decisions, approvals, reporting requirements, and certifications related to their area of
responsibility for the period of the lease term plus three fiscal years.
10.6.6.11 Financial Statement Presentation and Disclosure
1. Commandant (CG-84) shall provide oversight to FINCEN (FR) for reporting capital and
operating leases in the financial statements as required by OMB Circular A-136.
2. Commandant (CG-84) shall prepare and submit footnote disclosure information, as
applicable, for all capital and operating leases per OMB guidance
3. Commandant (CG-84) shall ensure that audit-compliant evidential documentation is
maintained at appropriate levels to support all financial statement presentation and
footnote disclosures for the period of the lease term plus three fiscal years.
10.7 Stewardship PP&E
10.7.1 Overview
Stewardship PP&E is comprised of heritage assets (including multi-use heritage assets) and
stewardship land (see the discussion of stewardship land in Subsection 10.7.4 (Stewardship
Land) below). A heritage asset is unique because it is a property that has historical or natural
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significance, cultural, educational or artistic importance; or significant architectural
characteristics, and is generally expected to be preserved indefinitely.
Heritage assets are only capitalized if they meet the criteria discussed below for categorization as
a multi-heritage asset; otherwise, costs of acquisition, improvement, reconstruction, or
renovation are expensed and recognized in the statement of net cost for the period in which the
costs are incurred. Heritage asset (excluding multi-use heritage assets) costs incurred through
donation or devise should not be recognized in PP&E accounts. Transfers from one entity to
another will not affect the net cost of operations (excluding multi-use assets). If general PP&E
assets are transferred for use as a heritage asset, the transferring agency shall recognize a
transfer-out of a capitalized asset.
10.7.2 Authorities
Federal Accounting Standards Advisory Board, Statement of Federal Financial Accounting
Standards (SFFAS) No. 29, Heritage Assets and Stewardship Land, July 2005.
http://www.fasab.gov/pdffiles/2015_fasab_handbook.pdf
10.7.3 Heritage Assets
10.7.3.1 Heritage Personal Property Assets
Heritage personal property assets must be reported and accounted for in Oracle FAM and
aggregated for presentation in the required Supplementary Stewardship Report. Commandant
(CG-844) shall identify and account for heritage personal property assets on the basis of physical
units of the issue rather than dollar amounts.
1. Commandant (CG-09224) serves as the official historian of the Coast Guard and is
responsible for the oversight and management of heritage assets.
2. FINCEN (FR) shall record and track heritage personal property assets in Oracle FAM.
3. Commandant (CG-844) shall establish oversight to ensure proper accounting for heritage
personal property assets.
4. Commandant (CG-844) shall establish procedures for testing asset condition and
impairment and for conducting annual physical inventories of heritage personal property
assets.
5. Commandant (CG-844) and the Coast Guard Historian’s Office shall establish procedures
to ensure proper classification, valuation, and reporting of heritage personal property.
6. Commandant (CG-844) and FINCEN (FR) shall ensure that audit-compliant evidential
documentation is maintained to support the financial decisions, reporting requirements,
and certifications related to heritage personal property for the life of the asset plus three
fiscal years.
10.7.3.2 Multi-Use Heritage Assets
Multi-use heritage assets are heritage assets that have both historical and operational value (as
well as financial value). The cost of acquisition, improvement, reconstruction, or renovation of
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multi-use heritage assets are capitalized as general PP&E and depreciated over their estimated
useful life using the straight-line depreciation methodology.
Multi-use heritage assets acquired through donation or devise shall be recognized as general
PP&E at the assets' fair value at the time received, and the amount should also be recognized as
"nonexchange revenue" as defined in SFFAS No. 7, Accounting for Revenue and Other
Financing Sources. Transfers of multi-use heritage assets from one Federal entity to another are
transfers of capitalized assets. The receiving agency shall recognize a transfer –in as an
additional financing source and the transferring agency shall recognize a transfer-out. The value
shall be recorded as the transferring agency’s book value of the multi-use heritage asset. If the
receiving agency is not provided the book value, the multi-use heritage asset shall be recorded at
its estimated fair value. The Coast Guard shall disclose that multi-use heritage assets are
recognized and presented with general PP&E in the basic financial statements and additional
information for the multi-use heritage assets shall be included with the heritage assets
information.
1. Commandant (CG-844) shall identify, value, classify, and account for multi-use heritage
personal property assets similarly to general PP&E assets.
2. FINCEN (FR) shall record multi-use heritage personal property assets in Oracle FAM.
3. Commandant (CG-844) shall ensure proper accounting for multi-use heritage personal
property assets.
4. FINCEN (FR) shall ensure that multi-use heritage assets are separated from heritage
assets in both Oracle FAM and the accompanying footnote to the Coast Guard’s financial
statements.
5. Commandant (CG-844) shall establish procedures for testing asset condition and
impairment of multi-use heritage personal property assets on an annual basis.
6. Commandant (CG-844) shall establish procedures to ensure proper classification of
multi-use heritage personal property assets.
7. Commandant (CG-844) and the Curator’s Office shall ensure that audit-compliant
evidential documentation is maintained to support the financial decisions, reporting
requirements, and certifications related to multi-use heritage assets for the life of the asset
plus three fiscal years.
10.7.4 Stewardship Land
Stewardship land is land and land rights other than that acquired for or in connection with general
PP&E, land acquired via the public domain, or land acquired at no cost. The acquisition cost of
stewardship land shall be recognized on the statement of net cost for the period in which the cost is
incurred. The cost shall be disclosed as "cost of stewardship land." The cost shall include all costs
incurred to bring the PP&E to its current condition and location. In cases where land is acquired
along with existing structures, the following may apply:
1. If the structure is significant in and of itself, the Coast Guard shall use its judgment as to
whether the acquisition cost shall be treated as the cost of stewardship land, heritage
assets, or both.
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2. If the structure is to be used in operations (e.g., as general PP&E) the value of the
structure is insignificant as compared to the value of the land; it has little or no inherent
value, and/or it is merely a byproduct of the acquisition of the land, the cost shall be
treated as an acquisition of stewardship land in its entirety. Only significant structures
that have a significant operating use (e.g., a recently constructed employee housing
quarters) shall be treated as general PP&E by identifying the cost attributable to general
PP&E and segregating it from the cost of the stewardship land acquired.
No amounts for stewardship land acquired through donation or devise shall be recognized as a
cost on the statement of net cost. Its fair value, if known and material, shall be disclosed in notes
to the statement of net cost. If fair value is not estimable, information related to the type and
quantity of assets received shall be disclosed in the year received.
Stewardship land may be transferred between Federal entities and shall be disclosed in the notes
if material. In some cases, land included in general PP&E may be transferred to an entity for use
as stewardship land and shall be recorded at book value on the transferring entity's books. If the
receiving Federal entity does not know the book value, the transfer shall be disclosed in notes if
material.
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Glossary
accreditation
The official authorization that is granted to an automated
information system (AIS) facility to process classified or
sensitive information in its operational environment.
Accreditation is based on the determination that the AIS is
operating at an acceptable level of risk, after a comprehensive
security evaluation and consideration of other management
factors (e.g., criticality of operations, cost to implement controls,
impact on operations, and planned changes in AIS operations).
accrual basis of
accounting
A method of accounting in which revenues are recognized in the
period earned and costs are recognized in the period incurred,
regardless of when payment is received or made.
acquisition
Acquisition of property means obtaining possession and
administrative control of property by purchase, lease, donation,
transfer from another Federal agency, forfeiture, or loan for a
period of 60 or more consecutive days.
The FAR defines “acquisition” as the acquiring by contract with
appropriated funds of supplies or services (including
construction) by and for the use of the Federal Government
through purchase or lease, whether the supplies or services are
already in existence or must be created, developed,
demonstrated, and evaluated. Acquisition begins at the point
when an agency’s needs are established, and includes the
description of requirements to satisfy agency needs, solicitation
and selection of sources, award of contracts, contract financing,
contract performance, contract administration, and those
technical and management functions directly related to the
process of fulfilling agency needs by contract.
acquisition cost
The cost to the Government of putting the property into use at
the time the property is originally acquired. It includes all costs
incurred to bring the property to a form and location suitable for
its intended use. This cost includes amounts paid to vendors, all
transportation charges to the point of initial use, handling and
storage costs, installation costs, etc., but excludes training costs
and warranty costs.
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acquisition project
manager (APM)
The person responsible for documenting the status of PC&I
projects and assets procured on the Project Management Data
Sheet (PMDS).
allotment
Allotments are subdivisions of apportionments that are made by
the heads of agencies. This is a formal administrative division
of an apportionment representing the authority to incur
obligations within a specified amount. This authority is subject
to further delegation and subdivision. Incurring obligations in
excess of the amount specified in an allotment is a violation of
the Antideficiency Act.
ALMIS/AMMIS
The Asset Logistics Management Information System (ALMIS)
is used at the Aviation Logistics Center (ALC) in Elizabeth City,
North Carolina, and integrates the forecasting capability of the
Aviation Computerized Maintenance System (ACMS) with the
inventory management/fiscal accounting functionality of the
Aviation Maintenance Management Information System
(AMMIS) to improve inventory purchase/repair decisions and
provide total asset visibility.
application (financial or
mixed system)
A group of interrelated components of financial or mixed
systems that supports one or more functions, and has the
following characteristics:
1. A common database;
2. Common data element definitions;
3. Standardized processing for similar types of transactions;
and
4. Common version control over the software.
apportionment
A distribution made by OMB of amounts available for
obligation in an appropriation or fund account into amounts
available for specified time periods, programs, activities,
projects, objects, or any combination of these. The apportioned
amount limits the obligations that may be incurred.
appropriation
A provision of law authorizing the expenditure of funds for a
given purpose. Usually, but not always, an appropriation
provides budget authority.
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asset acceptance
See “initial acceptance.”
automated information
system (AIS)
The organized collection, processing, transmission, and
dissemination of information in accordance with defined
procedures.
average unit cost
The cost used for capitalizing multiple like assets in a project.
This cost is calculated by dividing the total project cost by the
number of assets to be produced over the life of the project, and
allocating the cost to each unit.
budget authority
Authority provided by law to enter into obligations, which result
in immediate or future outlays involving Government funds.
The basic forms of budget authority are appropriations, contract
authority, and borrowing power.
budget execution
The process by which the financial resources made available to
an agency are directed and controlled toward achieving the
purposes and objectives for which the resources were approved.
building
A fixed, enclosed structure, usually with walls and a roof, in
which personnel work or dwell, equipment is maintained or
stored, or other activities are conducted.
Business Event Type
Code (BETC)
An eight-character code used in the GWA system to indicate the
type of activity being reported, such as payments, collections,
borrowings, etc. This code must accompany the Treasury
Account Symbol and the dollar amounts in order to classify the
transaction against the Fund Balance with Treasury.
capital asset
Nonexpendable real and personal property, having a useful life
of two years or more and an acquisition cost above the
capitalization threshold, whose cost is expensed over its life.
capital lease
A lease that transfers substantially all of the benefits and risks of
ownership to the lessee, as opposed to an operating lease.
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capital project
A construction or improvement project that meets the
requirements for capitalization.
capitalization
Recording and carrying forward any expenditure into one or
more future periods (SFFAS No. 6). This results in expensing
the cost of an asset over the remainder of its useful life by
matching the benefits gained from that expenditure with the
associated cost. Capitalization does not include repair and
maintenance costs.
capitalization threshold
The numerical value above which all real property (except land),
personal property, and improvements are capitalized.
cash basis of accounting
A method of accounting in which revenues are recognized at the
time payment is received and expenses are incurred at the time
payment is made.
certification (FPD)
There are two basic purposes for FPD certification:
1. To ensure that FPD systems are configured properly, that
assigned personnel possess required FPD skills, and that
FPD transmission interfaces are functioning properly.
2. To review internal controls, separation of duties, and data
integrity practices, and to validate the UAP at the FPD site.
certification (IT)
The official authorization that is granted to a sensitive
application, attesting to the adequacy of its security controls.
Also, the technical evaluation that establishes the extent to
which a computer system, application, or network meets a
specified set of security requirements.
Certification is based on an independent review of the security
controls of the AIS facility and the application program, and
determines if security design specifications are correct and have
been properly implemented.
Certification is synonymous with “Accreditation” and
“Authorize Processing.”
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CheckFree
A COTS software application developed by the CheckFree
Corporation. The application allows the Core Accounting
Branch to import, match, reconcile, and create reports from the
GL Oracle Financial System and Treasury’s reporting systems.
Coast Guard 298
A type of expense chargeable to AFC-30 to pay for aeronautical
material costs when AFC-41 funds do not meet specific
thresholds or requirements.
commitment
The administrative determination that funds are available to
create an obligation. A commitment formally reserves funds in
anticipation of a specific obligation. The amount to be recorded
as a commitment is the estimated procurement cost set forth in
the commitment document.
condemnation
The legal process in which the United States exercises its power
of eminent domain and takes legal ownership or control of the
non-Federal property for Federal use. The owner of the property
must receive “just compensation” for the property, determined
through the appraisal process.
contracting officer
A person with the authority to enter into, administer, and
terminate contracts, and to make related determinations and
findings.
core financial system
The departmental system that primarily carries out summary
data functions, such as maintaining the general ledger, and
preparing financial statements and central agency financial
reports. The core financial system may also support specialized
activity functions, but it may not replicate functions or processes
that are contained in feeder systems.
cost center
Generally, the OPFAC number of the unit that benefits from or
is to be charged for a purchase.
cost documentation
All contracts, purchase orders, receiving reports, acceptance
documents, contractor release forms, etc., that substantiate
project or purchase costs for acquisition, transfer, or disposal of
assets.
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deferred maintenance
Maintenance that is delayed or postponed until a future period.
depreciation
The systematic and rational allocation of an asset’s cost over its
estimated useful life.
direct access
Direct Access is the human resource management system for the
Coast Guard.
direct cost
A cost that can be identified with a specific function and that
does not require any type of allocation of cost over different
activities.
economic life
The time period during which property is expected to be usable,
with normal repairs and maintenance, for the purpose for which
it was intended at the property’s acquisition or inception of the
lease, without limitation.
end user
The custodian of a personal property asset.
executory cost
Costs, such as insurance, maintenance, and taxes, incurred for
leased property, whether paid by the lessor or the lessee.
Extraordinary Expense
Fund (XXF)
A nonappropriated Coast Guard trust fund that provides an
annual allowance to fund unusual and extraordinary
expenditures. Its source is interest generated by investments of
CGES profits and income.
fair market value
The price for which an asset can be bought or sold in an arm’s-
length transaction between unrelated parties.
feeder system
A subsidiary system that captures detail transaction data and
periodically records summarized data in the core financial
system. Feeder systems must provide adequate audit trails to
support transactions and balances maintained in the core
financial system. Feeder systems must also carry with them the
appropriate level of security and internal controls commensurate
with the environment in which they operate.
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financial system
A system, or portion of a mixed system, used to support
financial management. Financial systems typically include an
information system, comprised of one or more applications, that
is used for any of the following:
1. Collecting, processing, maintaining, transmitting, and
reporting data about financial events;
2. Supporting financial planning or budgeting activities;
3. Accumulating and reporting cost information; or
4. Supporting the preparation of financial statements.
Free on Board (FOB)
A contracting term that signifies the point at which
transportation costs are levied and responsibility is transferred.
GAO Comptroller
General decision
(Comp Gen)
A decision and/or opinion issued by the Comptroller General in
areas of Federal law such as appropriations, bid protests, and
Federal agency rulemaking. Each decision is identified by a
code in the format “B-(number)” and is uniquely identified by
B-number and date.
general-purpose property
(GPP)
Personal property that performs general Government functions.
Examples include forklifts, office equipment, and computer
software.
gift
Real or personal property donated to the Coast Guard by either a
private individual or an entity such as a corporation or a foreign
government.
Government-furnished
property (GFP)
Any tangible asset that is owned by or leased to the
Government, and that is currently in the possession of a
contractor or subcontractor. GFP includes COTS software and
contractor-held assets obtained by the Government under the
terms of the contract.
heritage asset
Real or personal property of historical, natural, or cultural
importance, which is expected to be preserved indefinitely.
Examples include historic lighthouses, monuments, and artifacts.
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historical cost
1. The cost to acquire an asset and make it ready for operational
use (e.g., acquisition, transportation, and installation costs).
2. The Net Book Value and/or transportation costs of excess
items received from other Government agencies; or the nominal
value if no transportation costs are involved.
imprest fund
A fixed cash fund in the form of currency, coin, or Government
check. An official Government disbursing officer advances the
fund, with charge to an appropriation or fund account, to a duly
authorized cashier for cash disbursement when other methods of
payment are not feasible (e.g., cash purchase of fuel at a foreign
port).
improvement
A cost that substantially increases the capability, capacity, or
useful/service life of an asset. Improvements meeting
capitalization thresholds are capitalized and charged against the
periods in which the improvement is used.
indirect cost
A cost that cannot be identified with a specific function, or that
requires some type of allocation of cost over different activities.
information technology
Any equipment, or interconnected system or subsystem of
equipment, that is used in the automatic acquisition, storage,
manipulation, management, movement, control, display,
switching, interchange, transmission, or reception of data or
information.
information system
The organized collection, processing, transmission, and
dissemination of information in accordance with defined
procedures, whether automated or manual. Information systems
include nonfinancial, financial, and mixed systems.
initial acceptance
The condition where the Coast Guard accepts delivery of a
personal property asset by signing documentation evidencing
delivery. This is sometimes referred to as “asset acceptance”.
Similarly, for real property, whether acquired, constructed, or an
improvement project, the condition where the Coast Guard
accepts delivery of real property assets is supported by signed
documentation evidencing delivery. This is sometimes referred
to as “asset acceptance”.
COMDTINST M7100.3F
ix
in-service date
For personal property, the date of final inspection/acceptance.
For real property, the date of beneficial occupancy.
integrated financial
management system
A unified set of financial systems, and the financial portions of
mixed systems, encompassing the software, hardware, processes
(manual and automated), procedures, controls, and data
necessary to carry out financial management functions.
internal controls
Policies and procedures designed to enhance and strengthen
existing financial reporting, enforce management directives, and
ensure that actions are taken to address risks.
maintenance
Routine recurring work that is required to minimize the effects
of deterioration and to keep the property in a condition fit for its
intended use. Maintenance costs include preventative
maintenance, normal maintenance, and replacement of similar
structural components, and are charged to the period incurred.
Maintenance is not considered an improvement because it does
not increase existing capability, capacity, or service life.
management
accountability
The expectation that managers are responsible for
1. The quality and timeliness of program performance;
2. Increasing productivity;
3. Controlling costs;
4. Mitigating adverse aspects of agency operations; and
5. Assuring that programs are managed with integrity and in
compliance with applicable law.
COMDTINST M7100.3F
x
management controls
The organization, policies, and procedures used by agencies to
reasonably ensure that:
1. Programs achieve their intended results;
2. Resources are used in a manner consistent with the
agency’s mission;
3. Programs and resources are protected from waste, fraud,
and mismanagement;
4. Laws and regulations are followed; and
5. Reliable and timely information is obtained, maintained,
reported, and used for decision-making.
mixed system
An information system that supports both financial and
nonfinancial functions.
multi-use heritage asset
An asset that has both historical and operational value (as well
as financial value).
Net Book Value
The original acquisition cost of an asset less its accumulated
depreciation and amortization.
net plant replacement
value
The plant replacement value (PRV) less the calculated
depreciation of PRV over the asset’s useful life.
Net Realizable Value
The amount of compensation that the Government expects to
receive upon disposal of property. An estimate of the amount
that can be recovered from selling or otherwise disposing of an
item less the estimated costs of completion, holding, and
disposal.
noncapitalized asset
An asset having a unit acquisition cost less than the established
capitalization threshold. Such an asset is expensed at the time of
acquisition, and accounted for in the asset system for
management purposes only.
COMDTINST M7100.3F
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nonfinancial system
An information system that supports nonfinancial functions. A
nonfinancial system may include financial data, but such data is
insignificant to financial management and/or not required for the
preparation of financial statements.
object class
A four-digit code that specifies the goods and services that funds
are spent to procure. Object classes should be assigned carefully
to each procurement. They are the basic building blocks of a
spending plan, answering the question “How was the money
spent?”
operating lease
An agreement that conveys the right to use property for a limited
time in exchange for periodic rental payments, and which does
not meet any of the criteria of a capital lease.
Oracle Fixed Asset
Module (FAM)
The official Coast Guard system for maintaining fixed asset
financial records.
Oracle Project
Accounting
A module that is used individually within some Coast Guard
units to share daily business intelligence with relevant project
stakeholders. It is an integrated, collaborative system that uses a
common data repository.
personal property
Any property except real property. Personal property tends to be
movable, and is not permanently affixed to land. Examples are
equipment, furniture, and vehicles.
plant replacement value
The estimated cost of replacing a real property asset as
calculated by the Civil Engineering Data System. This value is
used for planning purposes only and is not equivalent to
historical cost.
program, project, or
activity (PPA)
A major category within an appropriation. An example is the
Marine Safety and Maritime Law Enforcement PPA in the R&D
appropriation.
COMDTINST M7100.3F
xii
property, plant, and
equipment (PP&E)
Tangible assets that (1) have an estimated useful life of two or
more years; (2) are not intended for sale in the ordinary course
of business; and (3) are intended to be used by or be available
for use by the entity.
real property
Land, and any interests in land, along with any buildings and
structures located thereon.
Real Property Unique
Identifier (RPUID)
A unique identifier of a real property facility (land, building, or
structure).
reapportionment
A revision of a previous apportionment of budgetary resources
for an appropriation or fund account. The revision must be
approved by OMB.
rebuilding
The cost of replacing an element of the shore plant with an
element of comparable capacity or capability in order to extend
the life of the facility. An example is the replacement of a pier.
renovation
This term has been used generally in Coast Guard for years and
has included both major and minor renovations. Similar to
improvements, if a renovation substantially increases the
capability, capacity, or useful/service life of an asset that
renovation meets capitalization thresholds and is charged against
the period in which the improvement is used. Renovations are
deemed major maintenance and repairs to an RPUID that exceed
50 percent of plant replacement value (PRV) and over $1
million.
risk assessment/
risk analysis
An analysis of assets and vulnerabilities, and threats to those
assets, to determine the level of risk to an AIS. Risk is
“measured” either quantitatively or qualitatively by determining
the impact of threats on the facility, system, information,
personnel, and supported organizations or other users.
COMDTINST M7100.3F
xiii
security
The effectiveness level of the controls that allow access to an
AIS, whereby only properly authorized individuals, or processes
operating on their behalf, have permission to read, write, create,
or delete information, or to interfere with the timely processing
of information. Also, the measures required to protect against
the unauthorized (accidental or intentional) disclosure,
modification, or destruction of automated systems and data, and
the denial of service to process data. Components include
physical security, administrative security, personnel security,
and technical security (hardware, software, and
communications).
service life
The normally-expected operating life of an asset.
shelter-in-place
An emergency response characterized by people remaining
where they are and taking shelter, rather than trying to evacuate.
sick bay
A medical facility, afloat or ashore, having at least one
permanently-assigned health services technician, but no medical
doctor.
structure
Any fixed construction that does not meet the definition of a
building. Examples include roads, runways, helicopter landing
pads, fences, skeletal towers, docks, piers, and wharves.
Superfund (Hazardous
Substance Superfund)
The trust fund established under CERCLA.
total cost
The sum of all costs incurred to place an asset in service.
Treasury Account
Symbol (TAS)
An identification code assigned by Treasury, in collaboration
with OMB and the owner agency, to an individual appropriation,
receipt, or other fund account. (These accounts are defined in
I TFM 2-1500.) The term “Treasury Account Symbol” is a
generic term used to describe any one of the account
identification codes assigned by Treasury. All financial
transactions of the Federal Government are classified by TAS
for reporting to Treasury and OMB.
COMDTINST M7100.3F
xiv
Treasury Appropriation
Fund Symbol (TAFS)
A particular type of Treasury Account Symbol (TAS) that has
budget authority. The terms TAS and TAFS are sometimes used
synonymously. All financial transactions of the Federal
Government are classified by TAS for reporting to Treasury and
OMB.
undelivered order (UDO)
An order, contract, or agreement for supplies or services that
have not yet been received, accepted, and paid. A UDO
represents a legal obligation of funds. The financial obligation
associated with a UDO should be liquidated once the invoice for
the supplies and services is paid.
1. A valid and supportable UDO exists when:
a. Delivery of all required products and services has not
yet been completed;
b. Funds have not yet been fully disbursed; or
c. Issues with a vendor have delayed payment pending
their resolution.
2. An invalid UDO exists when:
a. Residual balances remain after the vendor has delivered
and been paid for all goods and/or services;
b. Items originally ordered are no longer needed; or
c. Errors in accounting require correction prior to clearing
an outstanding UDO balance.
All UDOs should be regularly validated. Valid UDOs usually
require no further action since the contractor must deliver
additional goods and services. On the other hand, invalid UDOs
should be corrected because they represent unliquidated
balances. Once released, these funds are available to purchase
additional supplies and services to support the Coast Guard’s
mission.
Unit Approved Plan
A statement providing specific guidance on the adequate
separation of duties needed to achieve standards for internal
control to the maximum extent possible. Federal standards for
internal control are contained in OMB Circular A-123. These
controls, at a minimum, shall include adequate separation of
procurement authorization, fund certification, receipt of goods,
account reconciliation, and FPD site administration duties.
COMDTINST M7100.3F
xv
working capital
A revolving fund that operates as an accounting entity. In these
funds, the assets are capitalized, and all income is in the form of
offsetting collections derived from the funds’ operations.
zero-based budget
A budget technique that attempts to analyze budget requests
without an implicit commitment to sustaining past levels of
funding. Under this system, programs and activities are
organized and budgeted in a detailed plan that focuses review,
evaluation, and analysis on all proposed operations rather than
on increases above current levels of operations, as in
incremental budgeting. Programs and activities are analyzed in
terms of successively increasing levels of performance and
funding, starting from zero, and then evaluated and ranked in
priority order. The purpose is to determine the level, if any, at
which each program or activity should be conducted.
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COMDTINST M7100.3F
i
Acronyms
AAR
Automated Access Request
AB
Alteration of Bridges [appropriation]
AC&I
Acquisition, Construction, and Improvement [appropriation]
ACMS
Aviation Computerized Maintenance System
ACO
authorized certifying officer
ACR
Agency Confirmation Report
ACRN
Accounting Classification Reference Number
ACTEUR
Activities Europe
AD
active duty
ADA
Antideficiency Act
ADCON
administrative control
ADOS
active duty operational support
ADOS-AC
active duty operational support of the active component
ADOS-RC
active duty operational support of the reserve component
ADT
active duty for training
ADT-AT
active duty for training - annual training
ADT-OTD
active duty for training - other training duty
AFC
Allowance Fund (Control) Code
AFDA
Allowance for Doubtful Accounts
AIS
Automated Information System
AL
aluminum or similar metal hull [boat]
ALC
1. Aviation Logistics Center
2. Agency Location Code
COMDTINST M7100.3F
ii
ALMIS
Asset Logistics Management Information System
AMMIS
Aviation Maintenance Management Information System
AO
approving official
AOPS
Abstract of Operations
AOR
area of responsibility
APM
acquisition project manager
APO
accountable property officer
APPN
appropriation
ASCII
American Standard Code for Information Interchange
ASOP
Actuarial Standard of Practice
ATON
aids to navigation
ATU
administrative target unit
AWG
administrative wage garnishment
BAQ
basic allowance for quarters
BAS
basic allowance for subsistence
BETC
Business Event Type Code
BPA
blanket purchase agreement
BPD
Bureau of Public Debt
BRM
budgetary resource management
BS
Boat Safety [appropriation]
C4IT
Command, Control, Communication, Computers, and Information
Technology
CA
Capital Authorization
CAMS
communications area master station
CAS
Core Accounting System
CASREP
casualty report
COMDTINST M7100.3F
iii
CBP
U.S. Customs and Border Protection
CFO
Chief Financial Officer
CMP
Class Maintenance Plan
CDFM
Certified Defense Financial Manager
CERCLA
Comprehensive Environmental Response, Compensation and
Liability Act
CEU
Civil Engineering Unit
CFO
Chief Financial Officer
CFOV
CFO Vision [reporting tool]
CFR
Code of Federal Regulations
CG
Coast Guard
CGA
Coast Guard Academy
CGAP
Coast Guard Acquisition Procedures
CGDF
Coast Guard dining facility
CGES
Coast Guard Exchange System
CGFM
Certified Government Financial Manager
CGHQ
Coast Guard Headquarters
CGMS
Coast Guard Message System
CGOF
Coast Guard Oracle Financials
CGRC
Coast Guard Recruiting Command
CG TIER
Coast Guard Treasury Information Executive Repository
CHAMPUS
Civilian Health and Medical Program of the Uniformed Services
CIFP
Change in Financial Plan
CILOP
conversion in lieu of procurement
CIMS
Contract Information Management System
CIO
Chief Information Officer
COMDTINST M7100.3F
iv
CIP
Construction in Progress
CLIN
contract line item number
CLL
contingent legal liability
CM
Configuration Management
CMIA
Cash Management Improvement Act
CMPlus
Configuration Management Plus [software application]
CO
commanding officer
COB
close of business
COCO
Chief of Contracting Office
COL
cost of living
COMDT
Commandant
COMDTINST
Commandant Instruction
COMM
commercial
Comp Gen
GAO Comptroller General decision
CONUS
(inside the) continental United States
COR
Contracting Officer's Representative
COTR
Contracting Officer’s Technical Representative
COTS
commercial off-the-shelf
CPA
Certified Public Accountant
CPI
consumer price index
CPS
Claims Process System
CRC
Civilian Resource Coordinator
CRO
Cumulative Results of Operations
CSA
1. central services agreement
2. civilian staffing advisor
CUA
Centralized User Administration
COMDTINST M7100.3F
v
CVS
Commercial Vessel Safety
CY
current year
D&F
Determination and Findings
DCIA
Debt Collection Improvement Act
DCMS
Deputy Commandant for Mission Support
DCO
1. Direct Commission Officer
2. Deputy Commandant for Operations
DD
Department of Defense form
DHS
Department of Homeland Security
DHS TIER
DHS Treasury Information Executive Repository
DIO
domestic ice operations
DIS
date-in-service
DISA
Defense Information Systems Agency
DISBTR
disbursement transaction
DITCO
Defense Information Technology Contracting Organization
DLA
1. Defense Logistics Agency
2. dislocation allowance
DM&R
deferred maintenance and repairs
DMO
Debt Management Office [Department of the Treasury]
DNDO
Domestic Nuclear Detection Office
DNI
Director of National Intelligence
DOD
Department of Defense
DOL
1. Director of Operational Logistics
2. Department of Labor
DOT
Department of Transportation
DRAT
District Response Advisory Team
DTS
Dedicated Transition Service
COMDTINST M7100.3F
vi
DUNS
Dun & Bradstreet Universal Numbering System
DVSG-VTC
DISA Video Teleconference
EA
enterprise architecture
EAD
extended active duty
EAP
Employee Assistance Program
EC&R
Environmental Compliance and Restoration [appropriation]
ECR
engineering change request
EFT
electronic funds transfer
EI
end item
ELT
Enforcement of Laws and Treaties
EOU
excess, obsolete, or unserviceable
EPA
Environmental Protection Agency
EPR
Estimated Price Report
ERP
Electronic Resource Proposal [System]
ERPAL
Electronic Repair Parts Allowance List
ESF
Emergency Support Function
F/RM
financial/resource manager
F/S
financial statement
FAM
Fixed Asset Module [Oracle]
FAR
Federal Acquisition Regulation
FASAB
Federal Accounting Standards Advisory Board
FA/SN
Family Advocacy & Special Needs [program]
FBWT
Fund Balance with Treasury
FC
Financial Information and Control Division [FINCEN]
FCO
Federal coordinating officer
COMDTINST M7100.3F
vii
FC-T
FORCECOM Training Division
FD&CC
facility design and construction center
FEB
Federal Executive Board
FEDLOG
Federal Logistics Data
FEMA
Federal Emergency Management Agency
FF
Financial Reports and Analysis Branch [FINCEN]
FFC
FEMA Finance Center
FFMIA
Federal Financial Management Improvement Act
FG
fiberglass hull (boat)
FINCEN
Finance Center [Coast Guard]
FLETC
Federal Law Enforcement Training Center
FLS
Fleet Logistics System
FMAOB
Financial Management Accounting Oversight Board
FMFIA
Federal Managers’ Financial Integrity Act
FMOP
Financial Management Operation Plan
FMPM
DHS Financial Management Policy Manual
FMS
Financial Management Service [Form]
FMV
fair market value
FOB
1. Fiscal Operations Branch
2. Free on Board
FOOT
Final Opinion of Title
FOPC
Field Organization Program Coordinator
FORCECOM
Coast Guard Force Readiness Command
FOSC
Federal On-Scene Coordinator
FPA
Federal program agency
FPD
Finance and Procurement Desktop
COMDTINST M7100.3F
viii
FR
Property Branch [FINCEN]
FRC
fast response cutter
FRMM
Financial Resource Management Manual
FRS
Frame Relay Service
FSF
fiscal status file
FSIO
Financial Systems Integration Office
FSS
Federal Supply System
FSTAR
Financial Strategy for Transformation and Audit Readiness
FTA
Financial Transfer Authorization
FTE
full-time equivalent
FTR
Federal Travel Regulation
FTS
1. Federal Telecommunications System
2. full-time support
FWPCA
Federal Water Pollution Control Act
FY
fiscal year
G&A
general and administrative
GAAP
generally accepted accounting principles
GAAS
generally accepted auditing standards
GAO
Government Accountability Office
GBL
Government Bill of Lading
GF
General Funds [appropriation]
GFE
Government-furnished equipment
GFM
Government-furnished material
GFP
Government-furnished property
GFRS
Governmentwide Financial Report System
GL
general ledger
COMDTINST M7100.3F
ix
GLM
general ledger management
GOTS
Government off-the-shelf
GPC
Government purchase card
GPO
Government Printing Office
GPP
general-purpose property
GPR
Global Pay Retired [system]
GPRA
Government Performance and Results Act
GSA
General Services Administration
GSE
ground support equipment
GTAS
Governmentwide Treasury Account Symbol Adjusted Trial Balance
System
GWA
Governmentwide Accounting [System]
HCA
head of the contracting activity
HF-RWI
High Frequency Radio Wireline Interface
HM&E
hull, mechanical, and electrical
HQ
Headquarters
HSAM
Department of Homeland Security Acquisition Manual
HSWL
health, safety, and work-life
HVAC
heating, ventilation, and air conditioning
I&A
Office of Intelligence & Analysis [DHS]
IAA
1. interagency agreement
2. intra-agency agreement
IADT
initial active duty training
IB
Investment Board [different from the IRB]
IBUDS
Integrated Budget Development System
ICE
Inventory Control Effectiveness
COMDTINST M7100.3F
x
ICP
inventory control point
IDS
Integrated Deepwater System
IDT
inactive duty training
IGT
Intragovernmental Transaction
INV
inventory
IP
Internet Protocol
IPAC
Intragovernmental Payment and Collection
IPR
Interdepartmental Procurement Request
IRB
Investment Review Board [different from the IB]
IRS-CI
Internal Revenue Service Criminal Investigation Division
ISSA
Interservice Support Agreement
IT
information technology
ITMRA
Information Technology Management Reform Act of 1996
(now known as the Clinger-Cohen Act)
JFO
joint field office
JTR
Joint Travel Regulations
JV
journal voucher
JWICS
Joint Worldwide Intelligence Communications System
KO
contracting officer
LANTAREA
Atlantic area
LEAD
Leadership, Excellence and Diversity
LIM
appropriation limitation code
LOA
line of accounting
LORAN
Long Range Navigation [system]
LSC
Legal Services Command
M&S
management and support
COMDTINST M7100.3F
xi
MA
Mission Assignment [FEMA]
MAL
Microcomputer Allowance List
MAP
Mission Action Plan
MCPOCG
Master Chief Petty Officer of the Coast Guard
MCPOCGRF
Master Chief Petty Officer of the Coast Guard Reserve Forces
MD&A
Management’s Discussion and Analysis
MEP
marine environmental protection
MER
1. marine environmental response
2. Monthly Execution Report
MERHCF
Medicare-Eligible Retiree Health Care Fund
MHS
Military Health System
MICA
Management Information of Combined Allowance
MILSTRIP
Military Standard Requisition and Issuing Procedures
MIPR
Military Interdepartmental Purchase Request
MISC
miscellaneous
MISLE
Maritime Information for Safety and Law Enforcement
MOA
Memorandum of Agreement
MOU
Memorandum of Understanding
MRC
monthly recurring cost
MRE
meal, ready-to-eat
MRO
management review official
MRS
Military Retirement System
MSA
Marine Science Activity
MSAM
Major Systems Acquisition Manual
MWR
morale, well-being, and recreation
N/A
not applicable
COMDTINST M7100.3F
xii
NAF
nonappropriated fund
NAFI
nonappropriated fund instrumentality
NARA
National Archives and Records Administration
NBV
Net Book Value
NCA
National Command Authority
NCC
Network Control Center
NDAA
National Defense Authorization Act
NESSS
Naval and Electronics Supply Support System
NFC
National Finance Center
NFR
Notice of Findings and Recommendations
NIIN
National Item Identification Number
NIP
National Intelligence Program
NIPRNET
Unclassified Internet Protocol Router Network
NIPS
Non-Federal Invoicing Processing Systems
NLT
not later than
NOV
Notice of Violation
NPFC
National Pollution Funds Center
NPFC-CIMS
NPFC Case Information Management System
NPPD
National Protection and Programs Directorate
NPV
net present value
NRCC
National Resource Coordination Center [FEMA]
NRF
National Response Framework
NRV
Net Realizable Value
NSF
National Strike Force
NSN
National Stock Number
COMDTINST M7100.3F
xiii
NTNO
Navy-type/Navy-owned
O&M
1. operating and maintenance
2. operations and maintenance
OC
Accounting Operations Division Chief [FINCEN]
OCFO
Office of the Chief Financial Officer [DHS]
OCGA
other Coast Guard account
OCIO
Office of the Chief Information Officer
OCONUS
outside the continental United States
OCS
1. Officer Candidate School
2. Outer Continental Shelf
ODNI
Office of the Director of National Intelligence
OEM
original equipment manufacturer
OF
optional form
OFCO
Operating Facility Change Order
OFF
Oracle Federal Financials
OFM
Office of Financial Management [DHS]
OG
General Accounting Branch [FINCEN]
OGA
1. other Government agency
2. General Accounting Section [FINCEN]
OGB/OGC
Claims Unit [FINCEN]
OGB/OGR
Collections and Reconciliation Unit [FINCEN]
OGQ
Reports & Reconciliation Unit [FINCEN]
OGP
Supply Fund and PES [FINCEN]
OIC
officer-in-charge
OIG
Office of Inspector General
OJT
On-the-job training
OM&S
operating materials and supplies
COMDTINST M7100.3F
xiv
OMAS
Official Mail Accounting System
OMB
Office of Management and Budget
ONDCP
Office of National Drug Control Policy
OOVA
Open Obligation Validation Application
OP
Payables Branch [FINCEN]
OPA
Oil Pollution Act (of 1990)
OPCOM
Coast Guard Operations Command
OPCON
operational control
OPEB
other post-employment benefits
OPFAC
operating facility
ORB
other retirement benefit
ORRF
Official Reception and Representation Funds
O&S
Operations and Support
OSC
Operations Systems Center
OSLTF
Oil Spill Liability Trust Fund
OSR
Oil Spill Recovery
P/FM
project/financial manager
P/RM
project/resource manager [interchangeable with P/FM]
PA
1. public address
2. Project Accounting
PA&E
Program Analysis and Evaluation [within DHS OCFO]
PACAREA
Pacific area
PAL
Personnel Allowance List
PAO
payment-approving official
PAR
Performance and Accountability Report
PCT
Pipeline Certification Tool
COMDTINST M7100.3F
xv
PDM
programmed depot-level maintenance
PDS
permanent duty station
PE
program element
PEM
program element manager
PES
program element status
PIO
polar ice operations
PL
Public Law
PLCY
DHS Office of Policy
PM
1. program management
2. project manager
PMDS
Project Management Data Sheet
PMS
Planned Maintenance System
PO
purchase order
POC
point of contact
POP
Planned Obligation Program
PP&E
property, plant, and equipment
PPA
program, project, or activity
PPC
Pay and Personnel Center
PR
1. purchase request
2. procurement request
PRV
plant replacement value
PSC
1. personnel support costs
2. Personnel Service Center
PSCR
personnel support costs – reserve
PSD-mu
Personnel Services Division – Military Uniforms
PSMA
Pre-Scripted Mission Assignment
PT
project target
COMDTINST M7100.3F
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QDR
Quality Deficiency Report
QSI
quality step increase
QTR
quarter
R&D
Research and Development
R&M
repair and maintenance
RA
1. radio aids (to navigation)
2. reimbursable agreement
RAD
Resource Allocation Decision
RAN
reimbursable agreement number
RAP
Resource Allocation Plan
RBS
Recreational Boating Safety
RCRA
Resource Conservation Recovery Act
RDC
Research and Development Center
RDD
required delivery date
RFAM
resource, financial, and asset management
RFC
regional finance center
RK
one of the Coast Guard Reserve enlistment programs
(along with RP).
RM
resource manager
RMO
Resource Management Office
RMP
readiness management period
ROD
Report of Discrepancy
RP
1. resource proposal
2. responsible party
3. Retired Pay [appropriation]
4. one of the Coast Guard Reserve enlistment programs
(along with RK).
RPAL
Reserve Personnel Allowance List
COMDTINST M7100.3F
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RPSO
regional property support officer
RPUID
Real Property Unique Identification Number
RR&B
Reports, Reconciliations, and Budget
RRCC
Regional Resource Coordination Center [FEMA]
RWG
Resource Work Group
SA
1. supply account
2. Core Accounting Systems Branch [FINCEN]
SAM
Shore Asset Management [system]
SAP
1. simplified acquisition procedures
2. Simplified Acquisition Procedures Manual
SAR
search and rescue
SAS
Statement of Auditing Standards
SAT
Senior Assessment Team
SBA
Small Business Administration
SBP
Survivor Benefit Plan
SBR
Statement of Budgetary Resources
SCA
Statement of Custodial Activity
SCCS
Shipboard Control and Command System
SCM
system configuration management
SCNP
Statement of Changes in Net Position
SCR
system change request
SDLC
system development life cycle
SEHO
safety and environmental health officer
SEPRATS
separate rations
SES
Senior Executive Service
SF
1. standard form
2. Supply Fund
COMDTINST M7100.3F
xviii
SFFAS
Statement of Federal Financial Accounting Standards
SFLC
Surface Forces Logistics Center
SILC
Shore Infrastructure Logistics Center
SIPRNET
Secret Internet Protocol Router Network
SMC
Senior Management Council
SME
subject matter expert
SMTC
Special Missions Training Center
SNC
Statement of Net Cost
SOD
Statement of Differences
SOP
standard operating procedure
SORS
Spilled Oil Recovery System
SPC
standard personnel cost
SPPM
Supply Policy and Procedures Manual
SPS
Secure Payment System
SQL
Structured Query Language
SR
script request
SRA
short-range aids (to navigation)
SSA
Same Stores Account
SSL
standard support level
SSMEB
Ship Structure and Machinery Evaluation Board
STAN
standardization
SWS
standard workstation
T&E
test and evaluation
TAD
temporary assignment duty
TAFS
Treasury Appropriation Fund Symbol
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TAS
Treasury Account Symbol
TC
1. training center
2. transaction code
TDO
Treasury Disbursing Office
TDY
temporary duty
TEOAF
Treasury Executive Office for Asset Forfeiture
TFF
Treasury Forfeiture Fund
TFM
Treasury Financial Manual
TFMB
Trust Fund Management Branch
TIER
Treasury Information Executive Repository
TIM
Treasury Information Maintenance
TLA
temporary lodging allowance
TLE
temporary lodging expense
TO
task order
TONO
travel order number
TRACEN
Training Center
TRM
Transition & Relocation Assistance [programs]
TROR
Treasury Report on Receivables
TSA
Transportation Security Administration
TSP
transportation service provider
UAP
Unit Approved Plan
UDC
Uniform Distribution Center
UDO
undelivered order
UMS
User Management System
US
United States
USC
United States Code
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USCG
United States Coast Guard
USCIS
United States Citizenship and Immigration Services
USF
Universal Service Fund
USM
Under Secretary for Management
USSGL
United States Standard General Ledger
USSS
United States Secret Service
VHA
variable housing allowance
VIN
vehicle identification number
VOSS
Vessel of Opportunity Skimming System
VTS
vessel tracking station
WHEC
Coast Guard high endurance cutter
WINS
Workflow Imaging Network System
WMEC
Coast Guard medium endurance cutter
WWM
Waterways Management
XO
executive officer
XXF
Extraordinary Expense Fund
YF
Yard Fund
YR
year
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Forms
Following is a list of the forms referenced in this Manual.
Coast Guard Forms
CG-3095 Daily Summary of Receipt Transactions
CG-3097 Daily Summary of Expenditure Transactions
CG-3114 Adjustment Form
CG-3116 Stores Account Balance Sheet
CG-3319 Change in Financial Plan
CG-5269 Report of Survey
CGHQ-3200.1 Financial Transfer Authorization
CGY-75 Project Order [Coast Guard Yard]
Department of Defense Forms
DD 250 Material Inspection and Receiving Report
DD 1149 Requisition and Invoice/Shipping Document
DD 1164 Service Order for Personal Property
DD 1348 DOD Single Line Item Requisition System Document (Manual)
DD 1348-1A Issue Release/Receipt Document
DD 1354 Transfer and Acceptance of DoD Military Real Property
Department of Homeland Security Forms
DHS 700-21 Material Inspection and Receiving Report
DHS 1501 Purchase Card Transaction Worksheet
Department of the Treasury Forms
FMS 224 Statement of Transactions
FMS 2108 Year-end Closing Statement
FMS 6652 Statement of Differences (SOD)
FMS 6653 Undisbursed Appropriation Account Ledger
FMS 6654 Undisbursed Appropriation Account Trial Balance
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FMS 6655 Receipt Account Ledger/Trial Balance
General Services Administration Forms
GSA 1334 Request for Transfer of Excess Real and Related Personal Property
Optional Forms
OF 347 Order for Supplies or Services
Standard Forms
SF 52 Request for Personnel Action
SF 118 Report of Excess Real Property
SF 118A Buildings, Structures, Utilities, and Miscellaneous Facilities
SF 122 Transfer Order Excess Personal Property
SF 132 Apportionment and Reapportionment Schedule [see note below]
SF 133 Report on Budget Execution and Budgetary Resources [see note below]
SF 1034 Public Voucher for Purchases and Services Other Than Personal
SF 1035 [Continuation Sheet for SF 1034]
SF 1080 Voucher for Transfers between Appropriations and/or Funds
SF 1081 Voucher and Schedule of Withdrawal and Credits
SF 1449 Solicitation/Contract/Order for Commercial Items
Note: The Apportionment and Reapportionment Schedule, Form SF 132, and Report on Budget
Execution and Budgetary Resources, Form SF 133, have been incorporated into the Federal
Government’s electronic budgetary system; consequently, these forms are no longer available as
hard copies. The Apportionment and Reapportionment Schedule, Form SF 132, is submitted
using OMB’s secure web-based apportionment application system, and the Report on Budget
Execution and Budgetary Resources, Form SF 133, must be submitted electronically through the
Treasury’s Federal Agencies’ Governmentwide Treasury Account Symbol Adjusted Trial
Balance System (GTAS). For illustrative formats of these forms and their proper use, see OMB
Circular A-11, Sections 121 and 130, at the following website:
https://www.whitehouse.gov/omb/information-for-agencies/circulars/. In addition, GTAS is also
used for the Year-End Closing Statement, Form FMS 2108. Procedures for completing and
submitting this form can be found at:
https://www.fiscal.treasury.gov/fsservices/gov/acctg/gtas/gtas_home.htm.
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