TASK 3 _ DOD FMR Volume_05.pdf

DoD 7000.14 - R

DEPARTMENT OF DEFENSE

FINANCIAL MANAGEMENT REGULATION

VOLUME 05: “DISBURSING POLICY”

UNDER SECRETARY OF DEFENSE

(COMPTROLLER)

https://comptroller.defense.gov/fmr/current/06a/

2BDoD 7000.14-R Financial Management Regulation Volume 5, Chapter 1

* July 2023

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VOLUME 5, CHAPTER 1: “PURPOSE, ORGANIZATION, AND DUTIES”

SUMMARY OF MAJOR CHANGES

Changes are identified in this table and also denoted by blue font.

Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision.

Unless otherwise noted, chapters referenced are contained in this volume.

Hyperlinks are in bold, italic, blue, and underlined font.

The previous version dated July 2021 is archived.

PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE

All Updated hyperlinks and formatting to comply with current administrative instructions.

Revision

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Table of Contents

VOLUME 5, CHAPTER 1: “PURPOSE, ORGANIZATION, AND DUTIES”

1.0 GENERAL

1.1 Purpose

1.2 Authoritative Guidance

1.3 Recommended Changes and Requests for Deviation or Exception

1.4 Use of Volume 5

2.0 ORGANIZATION

2.1 DFAS

2.2 Disbursing Policy

2.3 DoD Disbursing Offices and Officers

2.4 COs, Departmental Accountable Officials (DAOs), and Payment Review Officials . 5

3.0 ACCOUNTABILITY AND RESPONSIBILITY

3.1 Liability

3.2 Knowledge of Laws Governing Disbursements

3.3 Accountable Officials

3.4 Accountable Officials and Inherently Governmental Functions

3.5 Management Internal Controls

3.6 Prohibited Payments

4.0 PUNITIVE PROVISIONS

4.1 Misuse of Public Funds

4.2 Conspiracy to Defraud the Government

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CHAPTER 1

PURPOSE, ORGANIZATION, AND DUTIES

1.0 GENERAL

1.1 Purpose

The purpose of this volume is to established disbursing requirements, principles, standards, responsibilities, and pecuniary liability standards for disbursing officers (DOs), certifying officers (COs), and other accountable officials throughout the DoD. If new legislation conflicts with Volume 5, the highest-level guidance governs.

1.2 Authoritative Guidance

This volume is issued by authority of DoD Instruction (DoDI) 7000.14, DoD Financial Management Policy; implements the Treasury Financial Manual (TFM) Volume I; and establishes policies for disbursing throughout the DoD. It applies to the Secretary of Defense (SecDef), Military Departments, Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, Combatant Commands, DoD Inspector General, Defense Agencies, and DoD Field Activities (collectively known as DoD Components).

1.3 Recommended Changes and Requests for Deviation or Exception

Recommended changes and exceptions to policy must be sent through appropriate channels to the Office of the Under Secretary of Defense (Comptroller) (OUSD(C))/Chief Financial Officer (CFO). Coordinate requests for deviations from or exceptions to Volume 5 with Accounting and Finance Policy, Strategy, Policy and Requirements (SPR) Directorate, Defense Finance and Accounting Service (DFAS) Indianapolis (DFAS-ZPTA/IN), 8899 East 56th Street, Indianapolis, IN 46249-0050, dfas-in.disbursingpolicy@mail.mil.

1.4 Use of Volume 5

1.4.1. Volume 5 cites specific U.S. Department of the Treasury (Treasury) accounts (e.g., **F3880) where the asterisks ** represent the appropriate DoD Component designator, (i.e., 17 for Navy and Marine Corps, 21 for Army, 57 for Air Force, or 97 for Defense).

http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/700014p.pdf https://tfm.fiscal.treasury.gov/v1

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1.4.2. Volume 5 prescribes the use of specific forms (see the DoD (DD) Forms Management Program website). DoD Components using systems and producing their own forms in lieu of those prescribed that were in operation at the time of Volume 5’s initial issuance (December 16, 1993) may continue using these systems and forms until DoD implements a single standard disbursing system. A DoD Component electing to use a computer-generated version of a prescribed DD Form must use an exact replica of that form or submit a request for exception in accordance with DoD 7750.08, DoD Forms Management Program Procedures, to the address in paragraph 1.3.

1.4.3. Refer to the Definitions chapter for terms used herein.

2.0 ORGANIZATION

2.1 DFAS

DoD Directive 5118.05 established DFAS under the authority vested in the SecDef by Title 10, United States Code (U.S.C.), section 113, (10 U.S.C. § 113). DFAS is under the direction, authority, and control of the OUSD(C)/CFO. The DFAS Director is the principal DoD executive for finance and accounting requirements, procedures, functions, and the performance of the duties identified in the directive.

2.2 Disbursing Policy

DFAS-ZPTA/IN is under the direction, authority, and control of the Director, SPR. This division:

2.2.1. Develops and promulgates standard DoD disbursing policy and cash management guidance;

2.2.2. Responds to all inquiries pertaining to disbursing policy and cash management within DoD;

2.2.3. Initiates, changes, and implements DoD disbursing policy and cash management guidance according to Treasury regulations;

2.2.4. Acts as the point of contact for all non-criminal investigating officers in relation to loss of funds investigations; and

2.2.5. Performs technical reviews of relief-of-liability cases for DoD Components and activities, including the quarterly minor loss reports.

http://www.esd.whs.mil/Directives/forms/ https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodm/775008m.PDF?ver=O1fUAw7HuDT42x7JTiwnWw%3d%3d http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodd/511805p.pdf http://uscode.house.gov/view.xhtml?req=(title:10%20section:113%20edition:prelim)%20OR%20(granuleid:USC-prelim-title10-section113)&f=treesort&edition=prelim&num=0&jumpTo=true

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2.3 DoD Disbursing Offices and Officers

DoD Component Heads, through command channels, ensure that DOs in their commands follow this volume. Commanders monitor disbursing operations, requiring DOs and Deputy DOs (DDOs) under their purview to adhere to Volume 5. DOs, in turn, direct disbursing operations accordingly (see Chapter 2, paragraph 2.1).

2.4 COs, Departmental Accountable Officials (DAOs), and Payment Review Officials

Commanders ensure that COs, DAOs, and payment review officials in their commands follow Chapter 5, section 3.5.

3.0 ACCOUNTABILITY AND RESPONSIBILITY

3.1 Liability

Accountable individuals have personal and pecuniary liability for their acts involving the expenditure and receipt of public funds (see Chapter 5, section 7.0 and Chapter 6, section 3.0).

3.2 Knowledge of Laws Governing Disbursements

Accountable individuals whose duties pertain to the disbursement of public funds must be knowledgeable of and adhere to applicable laws.

3.3 Accountable Officials

Accountable individual, accountable official and accountable officer are used synonymously throughout Volume 5. The term “accountable official” is used in 31 U.S.C. § 3527 to refer to the class of officers or employees of an agency who are pecuniarily liable for repayment of losses or deficiencies of public money, vouchers, checks, securities, or records. Such officials are appointed using a DD Form 577, Appointment/Termination Record - Authorized Signature.

Only officers and employees of an agency are eligible for appointment as accountable officials (see Chapter 2, section 3.0).

3.3.1. Disbursing Officials. These include DOs, DDOs, and subordinate disbursing agents, paying agents, cashiers, change fund custodians, collection agents, and imprest fund cashiers. Under 31 U.S.C. § 3321(c)(2), the SecDef is required to designate personnel of the agency as disbursing officials to disburse public money available for expenditure by the agency (see Chapter 2, paragraph 1.1).

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3.3.2. COs. Under 31 U.S.C. § 3325(a)(1), “a disbursing official in the executive branch of the United States Government shall disburse money only as provided by a voucher certified by the head of the executive agency concerned, or an officer or employee of the executive agency having written authorization from the head of the agency to certify vouchers.” Thus, a DoD agency cannot disburse a payment unless it is certified by a properly appointed CO. These statutory “COs” must be officers or employees of the Federal agency concerned, and are “accountable” because unless granted relief they are pecuniarily liable under 31 U.S.C. § 3528(a) for any payments they erroneously certified. Appointment as a CO is a precondition to enforcement of pecuniary liability under 31 U.S.C. § 3528(a) (see Chapter 5, paragraph 4.1).

3.3.3. DAOs

3.3.3.1. In certifying payments, DoD’s statutory COs often are required to rely on information and data provided by agency systems and by other personnel. For this reason, Congress authorized DoD to impose potential pecuniary liability to an additional class of agency officers and employees: those who are formally appointed as a DAO under 10 U.S.C. § 2773a.

The SecDef may designate any DoD civilian employee or member of the U.S armed forces under the Secretary’s jurisdiction as a DAO. In the performance of their duties, DAOs are responsible for providing COs with information, data, or services that are directly relied upon by the CO in the certification of vouchers for payment. Title 10 U.S.C. § 2773a does not, however, statutorily mandate that the DoD organizations appoint DAOs to perform such activities; instead, appointment of DAOs to perform any particular function or class of functions is an option available to management for inclusion in management’s internal controls program (see paragraph 3.5).

3.3.3.2. When considering whether to require that only persons appointed as DAOs perform duties that generate the information, data, or services relied upon by COs, agency managers, and appointing authorities take into account considerations that include mission requirements and functions under their responsibility, the availability of resources, the sufficiency of other internal controls, and whether or not a governing policy or directive mandates performance of some function only by a properly appointed DAO (see Chapter 5, paragraph 3.5).

3.3.3.3. Foreign National Personnel. A foreign national employee is an individual who is employed by or performing work for U.S. forces outside the United States, its territories, and possessions in a system of employment established in accordance with the DoDI 1400.25-V1231 or a predecessor authority. Under the direct hire arrangement, the legal employer of the foreign national assumes responsibility for all administrative and management functions related to foreign national employment. Under the indirect hire arrangement, the host government serves as the legal employer of U.S. forces’ foreign nationals. Although the host government is the official legal employer of the foreign national personnel, it grants operational control to U.S. forces for the day-to-day management of such personnel (see DoDI 1400.25-V1231).

http://uscode.house.gov/view.xhtml?req=(title:31%20section:3325%20edition:prelim)%20OR%20(granuleid:USC-prelim-title31-section3325)&f=treesort&edition=prelim&num=0&jumpTo=true http://uscode.house.gov/view.xhtml?req=(title:31%20section:3528%20edition:prelim)%20OR%20(granuleid:USC-prelim-title31-section3528)&f=treesort&edition=prelim&num=0&jumpTo=true http://uscode.house.gov/view.xhtml?req=(title:10%20section:2773a%20edition:prelim)%20OR%20(granuleid:USC-prelim-title10-section2773a)&f=treesort&edition=prelim&num=0&jumpTo=true http://www.esd.whs.mil/Portals/54/Documents/DD/issuances/140025/1400.25-V1231.pdf

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3.3.3.3.1. In deciding whether to appoint foreign nationals in overseas areas as COs and DAOs, organizations should take into account whether enforcement of pecuniary liability of such individuals to the United States is precluded as a legal or practical matter by status of forces agreements, other international agreements, or local laws. If enforcement is not precluded by such agreements or local laws, foreign national direct hire employees are eligible for appointment both as COs and DAOs because the agency is the legal employer and such individuals qualify as officers or employees of the United States. If not constrained by such agreements or by local law, the DoD has the ability to enforce pecuniary liability against these employees because it has statutory authority to withhold amounts from their pay accounts.

3.3.3.3.2. Foreign national indirect hire employees cannot be appointed as COs or DAOs because the United States cannot enforce pecuniary liability by unilaterally setting off indebtedness against their pay accounts and because the agency is not the legal employer.

However, this regulation does not prohibit organizations from assigning indirect hire employees to duties that DAOs otherwise would perform, nor does it mandate that organizations appoint DAOs to provide the information or data, or to perform services relied upon by COs to certify payment vouchers. Organizations operating in overseas areas may permit or assign foreign national indirect hire employees to perform such operational duties without appointing them as DAOs if adequate internal controls are in place to support voucher certification.

3.3.3.4. Contractors and Contractor Support Personnel. Do not appoint contractors and contractor support personnel as DAOs or COs.

3.4 Accountable Officials and Inherently Governmental Functions

The Federal Activities Inventory Reform (FAIR) Act of 1998 (Public Law 105-270), as implemented by the Office of Management and Budget (OMB) (31 U.S.C. § 501) provides that, "the making of value judgments in making decisions for the Federal Government, including judgments relating to monetary transactions and entitlements" is an inherently governmental function, i.e., "a function that is so intimately related to the public interest as to require performance by Federal Government employees." For further information regarding inherently governmental functions, see the OMB’s Office of Federal Procurement Policy Letter 11-01, Performance of Inherently Governmental and Critical Functions, which provides a single definition of an inherently governmental function built around the well-established statutory definition in the FAIR Act, as well as establishes criteria for identifying of critical functions and for ensuring sufficient levels of internal agency oversight and management of functions closely associated with inherently governmental functions.

http://uscode.house.gov/statutes/pl/105/270.pdf http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section501&num=0&edition=prelim http://www.gpo.gov/fdsys/pkg/FR-2011-09-12/pdf/2011-23165.pdf

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3.5 Management Internal Controls

Management internal controls are specific policies, procedures, and/or activities an organization establishes and implements to manage risk. They are the methods by which an organization governs its activities to accomplish its mission, and are required by OMB Circular A-123, Management’s Responsibility for Internal Control, which implements 31 U.S.C. § 3512(c)(1). Consistent with the guidelines in this paragraph, DOs implement these controls to eliminate opportunities to conceal errors or irregularities and assign work so that no one individual controls multiple phases of a transaction. Inspections and audits of disbursing offices must include a review of management internal controls to determine their adequacy, compliance, and effectiveness.

3.5.1. Standards of Internal Control. Management determines applicability of these standards at the operational level.

3.5.1.1. Control Environment. Management and employees establish and maintain an environment throughout the organization that sets a positive and supportive attitude toward internal control and conscientious management.

3.5.1.2. Risk Assessment. Provide for an assessment of the risks the organization faces from both external and internal sources.

3.5.1.3. Control Activities. Internal control activities ensure the implementation of management’s directives, and should be effective and efficient in achieving an organization’s control objectives.

3.5.1.4. Information and Communications. Record and communicate information to management and others within an organization that needs it, in a specific form and inside a time frame that enables them to carry out their internal control and other responsibilities.

3.5.1.5. Monitoring. Assess the quality of performance over time and ensure the findings of audits and other reviews are promptly resolved.

3.5.2. Separation of Duties. Separation of duties precludes errors or attempts at fraud or embezzlement from going undetected. Internal controls generally require a four-way separation of the contracting, receiving, voucher certification, and disbursing functions. Assign key duties such as certification of fund availability; contracting (obligating the Government); authorizing, approving, and recording transactions; issuing or receiving assets; certifying and making payments; preparing and signing checks; and reviewing or auditing payments to different individuals to minimize the risk of loss to the Government to the greatest extent possible.

3.5.2.1. Do not assign DOs duties that create potential conflicts of interest (see Chapter 2, paragraph 3.5).

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3.5.2.2. Separation of duties is not always practical or possible due to time constraints, work force shortages, or the use of electronic systems. Commanders and DOs must be aware of situations where valid, long-standing separation of duties cannot be achieved, recognize that internal controls have been weakened as a result, and make every effort to mitigate the risks. For example, payments and collections through the Intra-governmental Payment and Collection system can occur outside the disbursing work center without weakening internal controls because the payee is always another Federal agency and recovery of an improper payment is assured, or financial systems which allow for adjustments to the data outside of the normal application include appropriate controls and audit trails for those adjustments. Other situations may require closer scrutiny. Report all situations of inability to separate appropriate responsibilities to the DO’s commander, with a request for a waiver and recommendations to mitigate the risks.

3.5.3. Electronic and Digital Signatures

3.5.3.1. Signatures. Personnel may use electronic and digital signatures to receive, accept, and certify financial documents processed through automated information systems.

3.5.3.2. Requirements. 15 U.S.C. § 7001 and 15 U.S.C. § 7021 require that either of these media used by a person to sign (e.g., certify) any type of financial document be:

3.5.3.2.1. Unique to that person;

3.5.3.2.2. Under that person’s sole control or custody;

3.5.3.2.3. Linked to the data signed throughout their processing so that if any of the data are changed, the electronic or digital signature is invalidated; and

3.5.3.2.4. Capable of being verified by the paying DO.

3.5.3.3. Digital Signature. A digital signature is an electronic signature (see DoDI 8520.02, Public Key Infrastructure (PKI) and Public Key Enabling). Digital signature technology encrypts data; detects changes to digitally signed documents; and enables “authentication” of digital messages, assuring the recipient of a digital message of both the identity of the sender and the integrity of the message.

3.5.3.3.1. Digital signatures and certificates authenticate identity, control access through authorized user levels and PKI certificates or passwords, and provide an encryption capability for information in transit or at rest.

3.5.3.3.2. Secure digital signatures cannot be rejected. Except in a case of a compromise of system security resulting in a forged electronic signature, the signer of a document cannot later deny the validity of the signature, claiming it was forged. The recipient of a digitally signed message has the capability to verify both the document's author and that the document was not altered either intentionally or accidentally after signature.

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3.6 Prohibited Payments

Personnel involved in the payment certification and disbursement processes must preclude payments to ineligible recipients. Many tools to aid in this effort are available, among them the Specially Designated Nationals List maintained by Treasury’s Office of Foreign Assets Control.

This is a list of individuals and entities covered by Executive Order 13224, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism.

Do not initiate, certify, or make payments or draw checks or warrants payable to individuals or organizations on this list (see also I TFM 4A-2030).

4.0 PUNITIVE PROVISIONS

4.1 Misuse of Public Funds

Title 18 U.S.C. § 641 governs crimes of embezzlement and theft. Individuals charged with safekeeping of public funds must handle those funds with utmost care. The loan, exchange for other funds, conversion of funds for one’s own use or that of another, or deposit of public funds except as authorized by law, may subject the individual entrusted with the funds to criminal sanctions.

4.2 Conspiracy to Defraud the Government

Any person entering into an agreement or conspiracy to defraud the U.S. by obtaining or aiding in obtaining the payment or allowance of any false, fictitious, or fraudulent claim is subject to fine, imprisonment, or both as prescribed by 18 U.S.C. § 286.

http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx https://tfm.fiscal.treasury.gov/v1/p4/ac200 https://www.govinfo.gov/content/pkg/USCODE-2011-title18/pdf/USCODE-2011-title18-partI-chap31-sec641.pdf http://uscode.house.gov/view.xhtml?req=(title:18%20section:286%20edition:prelim)%20OR%20(granuleid:USC-prelim-title18-section286)&f=treesort&edition=prelim&num=0&jumpTo=true

DoD 7000.14-R Financial Management Regulation Volume 5, Chapter 2

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VOLUME 5, CHAPTER 2: “DISBURSING OFFICES, OFFICERS, AND AGENTS”

SUMMARY OF MAJOR CHANGES

Changes are identified in this table and also denoted by blue font.

Substantive revisions are denoted by an asterisk (*) symbol preceding the section, paragraph, table, or figure that includes the revision.

Unless otherwise noted, chapters referenced are contained in this volume.

Hyperlinks are denoted by bold, italic, blue, and underlined font.

The previous version dated July 2021 is archived.

PARAGRAPH EXPLANATION OF CHANGE/REVISION PURPOSE

All Updated hyperlinks and formatting to comply with current administrative instructions. Revision

4.6.2.9 Removed duplicative information. Deletion

4.6.3.1.3 thru

4.6.3.1.7 Removed duplicative information and renumbered accordingly. Deletion

4.6.3.2 and

4.6.3.2.1 Removed duplicative information. Deletion

7.1 Removed procedural content and renumbered subparagraphs

accordingly. Deletion

10.3 Removed procedural content. Deletion

Figure 2-1 Deleted procedural figure. Deletion 6.2, 6.2.1, 6.2.2.3.2, 6.2.4, 6.2.5, 6.2.5.2, 6.2.5.3, 6.2.6, 6.2.7, 6.2.8, and 7.9

Stigmatizing language was modified in accordance with the Deputy Secretary of Defense memo, “Review of Policies to Eliminate Stigmatizing Language Related to Mental Health,” dated November 7, 2022.

Revision

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VOLUME 5, CHAPTER 2: “DISBURSING OFFICES, OFFICERS, AND AGENTS”

1.0 GENERAL

1.1 Overview

1.2 Purpose

1.3 Authoritative Guidance

2.0 POLICY

2.1 Request for Establishment of a Disbursing Office

2.2 Disbursing Station Symbol Number (DSSN)

2.3 Employer Identification Number (EIN)

2.4 Reporting Activation of a Disbursing Office

3.0 APPOINTING DOs, DEPUTY DOs (DDOs), AND OTHER ACCOUNTABLE

OFFICIALS

3.1 Persons Authorized to Have Custody of Public Funds

3.2 Accountable Officials

3.3 Appointments

3.4 Exceptions

3.5 Restrictions

3.6 Terminations

4.0 DOs

4.1 Eligibility

4.2 Appointment

4.3 Terminations

4.4 Submission of DD 577 and Fiscal Service (FS) Form 3023, Specimen Signatures ... 8

4.5 Commencement of Disbursing Duty

4.6 Transfer of Disbursing Duty

5.0 DDOs

5.1 Eligibility

5.2 Appointment

5.3 Terminations

6.0 CHANGE IN THE STATUS OF DOs OR DDOs

6.1 Authorized Absence of DOs and DDOs

*6.2 Death, Disability, or Removal of a DO

7.0 OTHER AGENTS OF DOs

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Table of Contents (continued)

7.1 Agents

7.2 Disbursing Agents

7.3 Cashiers

7.4 PA………………………………………

7.5 Collection Agents

7.6 Change Fund Custodians

7.7 Imprest Fund Cashiers

7.8 Alternate Agents

*7.9 Death, Disability, or Unauthorized Absence of Agents

8.0 DEACTIVATING OR CLOSING A DSSN

8.1 Deactivation

8.2 Deposits

8.3 Deposits Fund Account Balances

8.4 Undeliverable Checks

8.5 Blank Treasury Check Stock

8.6 Stored Value Cards

8.7 SF 1219

8.8 SF 1179

8.9 Equipment

8.10 Discrepancies

8.11 Closure

9.0 IMPREST FUNDS

9.1 Overview

9.2 Safeguarding Imprest Funds

10.0 SETTLEMENT OF DO ACCOUNTS

10.1 Overview

10.2 Responsibility of Relieved Officers

10.3 Settlement Officer Functions

10.4 Settlement Procedures for Naval Vessels

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CHAPTER 2

DISBURSING OFFICES, OFFICERS, AND AGENTS

1.0 GENERAL

1.1 Overview

Title 31, United States Code (U.S.C.), section 3321(c) (2) (31 U.S.C. § 3321(c)(2)) allows the Secretary of Defense to designate personnel of DoD as disbursing officials to disburse public money available for expenditure. In order to disburse money, an activity must send a request to establish a disbursing office. When establishing disbursing offices and associated appointments of accountable positions, DoD Components must be cognizant of internal control guidelines provided in Chapter 1, paragraph 3.5.

1.2 Purpose

This chapter addresses policy on DoD’s establishment of a disbursing office. A disbursing office is considered necessary for the efficient functioning of an operating activity. This chapter also addresses the appointment of the Disbursing Officer (DO) and other agents appointed to receive and maintain the custody of public funds.

1.3 Authoritative Guidance

Official funds will be received and disbursed by order or on the authority of the commanding officer, except when directed by a superior in the chain of command or when sanctioned by the Comptroller General of the United States. Under 31 U.S.C. § 3325 DoD DOs are authorized to disburse public funds on receipt of vouchers properly certified.

2.0 POLICY

2.1 Request for Establishment of a Disbursing Office

2.1.1 An activity requesting to establish a disbursing office at a new activity, or an activity receiving disbursing services from an external source, sends a memorandum through its chain of command. Each level of command endorses the request to indicate concurrence and provides any additional information required by the approving official. The chain of command forwards the memorandum to the Defense Finance and Accounting Service, Indianapolis (DFAS-IN), ATTN:

Enterprise Solutions and Standards, Disbursing (DFAS-IN/JJFKDC), 8899 East 56th Street, Indianapolis, IN 46249-0500. The request must include:

2.1.1.1. A statement justifying why an office is required and why the disbursing operation cannot be conducted by an existing disbursing activity;

2.1.1.2. Anticipated workload: number of military and civilian personnel to be supported, and commercial vendor services vouchers to be settled;

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2.1.1.3. Proposed date of establishment;

2.1.1.4. Name and location of the nearest Federal Reserve Bank (FRB) or branch, and its distance from the proposed disbursing office. If there is no FRB or branch within a reasonable distance, include the name and location of the nearest designated depositary, if any, and its distance from the proposed office;

2.1.1.5. An estimation of U.S. Department of the Treasury (Treasury) checks needed for the first year of operation (see Chapter 7, section 3.1);

2.1.1.6. Name, social security number, and rank or grade of the proposed DO, if known;

2.1.1.7. An estimation of monthly cash requirements (see Chapter 3, section 2.3);

and

2.1.1.8. Information on plans to implement an automated disbursing system.

2.1.2. The memorandum also addresses the appointment of the DO and his or her appointed agents to regularly receive and maintain custody of public funds. The DO may appoint any officer, enlisted member, or civilian employee he or she considers satisfactory as an agent.

2.2 Disbursing Station Symbol Number (DSSN)

2.2.1. DSSN. The DFAS-IN/JJFKDC obtains the DSSN from the Treasury’s Bureau of Fiscal Service (Fiscal Service). DSSNs are permanent, and are either open or closed. Open DSSNs are open for an indefinite period. Some open DSSNs may be inactive, and may be either:

2.2.1.1. Contingency, available for use in a military contingency operation;

2.2.1.2. Temporarily deactivated for a specific reason, (e.g., a ship undergoing extensive overhaul for a period of several months may arrange for disbursing service from a shore-based disbursing office or activity); or

2.2.1.3. In settlement pending closure (see section 10.0).

2.2.2. Change in Designation or Location. Coordinate proposed changes in the designation or location (mailing address) of an operating DSSN, to include tactical deployment, with DFAS-IN/JJFKDC, who will advise Fiscal Service.

2.2.3. Use of DSSN. The DSSN must appear on all payments, collection vouchers, and Treasury and limited depositary account (LDA) checks processed by the disbursing activity.

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2.3 Employer Identification Number (EIN)

The DO, who disburses taxable funds, should ensure payments received by entitlements’ activities have secured an EIN to report taxable income or income and withholdings.

2.4 Reporting Activation of a Disbursing Office

The DO activating a disbursing office notifies Fiscal Service, Check Reconciliation Branch, through DFAS-IN/JJFKDC by memorandum immediately upon commencement of disbursing operations. Include in the memorandum: the name of the disbursing activity, DSSN assigned, DO’s name, rank or grade, the opening date of the account, and the first and last serial number of all blank Treasury checks on hand in each check range. Send a copy of the memorandum to the supporting DFAS site.

3.0 APPOINTING DOs, DEPUTY DOs (DDOs), AND OTHER ACCOUNTABLE

OFFICIALS

3.1 Persons Authorized to Have Custody of Public Funds

To ensure proper security and accounting for public funds, assign responsibility to a limited number of authorized persons to receive, maintain custody, and disburse or otherwise dispose of public funds.

3.2 Accountable Officials

Accountable Officials are officers or employees of an agency who are or who may be found to be pecuniarily liable for repayment of losses or deficiencies of public money, vouchers, checks, securities, or records (see Chapter 1, section 3.0).

3.3 Appointments

Use DoD (DD) Form 577, Appointment/Termination Record-Authorized Signature, to appoint accountable officials. This form does not allow multiple appointments simultaneously. It is the only document required to support this type of appointment. Send a copy of the DD 577 and the required original specimen signature as specified in subparagraph 4.4.1 to DFAS-IN/JJFKDC to be maintained in the DO’s files.

3.4 Exceptions

3.4.1. An individual who occasionally receives public funds does not need to be appointed formally as an accountable official. Funds may be received at times, at locations, and under circumstances that preclude any advance arrangement for their receipt. At some activities, collections are so infrequent that it is impractical to have a formal designation in effect. Funds received by persons other than those formally designated must promptly send funds received to their servicing disbursing office or to another person formally designated to receive them.

http://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd0577.pdf

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3.4.2. The DO at DFAS sites may hold more than one DSSN, and may serve concurrently as a DDO to other DFAS DOs. Each DDO appointed by a DFAS DO may serve under one or more of the DSSNs assigned to the appointing DO and may also serve more than one DFAS DO concurrently. DOs and DDOs at DFAS sites holding multiple DSSN appointments complete a separate DD 577 for each applicable DSSN.

3.4.3. The DO and DDOs aboard Navy vessels may serve concurrently in other accountable positions, (e.g., ship’s stores officer, food service officer) when the ship’s manpower authorization does not provide Supply Corps officers for each accountable function (see Chapter 1, subparagraph 3.5.2).

3.4.4. When directed by appropriate authority, DOs, DDOs, and their agents may accept, safeguard, account, and dispose of personal funds and valuables received for safekeeping. Where personnel resources are limited, persons serving as DOs or other accountable officials may also serve as safekeeping custodians at the commander’s discretion (see Chapter 16, paragraph 1.1).

3.5 Restrictions

Except as specifically authorized, do not assign DOs additional duties of order approving authority, certifying officer, custodian of any fund, or other conflict-of-interest assignment.

3.6 Terminations

Terminate appointments using Section IV of the appointing DD 577.

4.0 DOs

4.1 Eligibility

To be eligible for appointment as a DO, an individual must be a U.S. citizen and have previous experience as a DO or have completed (or agreed to complete) specific DO training as defined by the appointing authority.

4.2 Appointment

The commander, director, or other equivalent appoints a DO using a DD 577 (see paragraph 3.3).

4.3 Terminations

Terminate appointments using Section IV of the appointing DD 577.

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4.4 Submission of DD 577 and Fiscal Service (FS) Form 3023, Specimen Signatures

4.4.1. Official Signature. Before commencing disbursing operations, a DO and all appointed DDOs determine which of their given names and/or initials will comprise their official signatures, and use them on all checks, vouchers, correspondence, and official documents pertaining to the DoD, Government Accountability Office (GAO), and Treasury. Send DD 577 and FS 3023 to DFAS-IN/JJFKDC, having used permanent dark blue, blue-black, or black fade-resistant ink that is not readily soluble in water.

4.4.2. Official Signatures to Other Depositaries. If checks will be drawn on a depositary other than the Treasury, send the DO’s official signature (as well as those of DDOs authorized to sign depositary checks) to the depositary. An officer whose signature is known to the depositary must certify the forms.

4.4.3. Change of Official Signature. A DO or DDO may change his or her official signature by submitting a new FS 3023 to DFAS-IN/JJFKDC.

4.4.4. Furnishing Additional Signatures When Transferred to a New Station. The DFAS-IN/JJFKDC files specimen signatures under each DSSN used and furnishes them to different banks upon request for use in cashing and processing checks, and may request that a DO or DDO furnish an additional FS 3023. Since an individual’s signature may change over time, DFAS-IN/JJFKDC may request additional signatures if needed.

4.5 Commencement of Disbursing Duty

Immediately upon commencement of disbursing duties, a DO activating a new disbursing office, reactivating a disbursing office, or relieving another DO, prepares a memorandum that includes: name of the disbursing activity, DSSN assigned, DO’s name, rank or grade, opening date of the account, and the beginning and ending serial number of all blank Treasury checks on hand in each check range. If applicable, also include the relieved DO’s name and rank or grade. Keep the original memorandum in the disbursing office and sends copies to DFAS-IN/JJFKDC and the supporting DFAS site.

4.6 Transfer of Disbursing Duty

4.6.1. Joint Actions by the Outgoing and Incoming DOs. The outgoing and incoming DOs establish the date to transfer accountability, subject to command approval. Since accountability is reported daily by a full Central Accounting Reporting System (CARS) daily reporter, a transfer of disbursing duty is not required to occur on the last day of the month, as required for CARS non-daily reporters. In a daily reporting environment, the Standard Form (SF) 1219, Statement of Accountability is no longer required to be submitted to the Treasury (see Chapter 15, section 6.0).

When the transfer occurs, the outgoing and incoming DOs:

4.6.1.1. Verify cash on hand;

4.6.1.2. Verify all documents that support the SF 1219, as assets;

https://www.fiscal.treasury.gov/cars/ https://tfx.treasury.gov/taxonomy/term/10813

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4.6.1.3. Verify and prepare a letter of transfer for all blank Treasury checks. Both DOs sign the letter. The incoming DO reports all checks issued by the outgoing DO that were not reported to the Treasury before the transfer of accountability. The Incoming DO also resubmits any rejected entries. Include the numbers of the blank checks the incoming DO receives in the commencement of disbursing duties memorandum. The first check in the series must be the next sequential number after the last check listed on the outgoing DO’s last check issue report. The last check receipted should be the same as the last check number previously ordered and received by the outgoing DO. Research any checks missing or out of sequence and void them if necessary;

4.6.1.4. Verify stored value card stock (see Chapter 10, subparagraph 2.12.1);

4.6.1.5. Verify postal money orders on hand;

4.6.1.6. Verify safekeeping deposits (see Chapter 16, paragraph 4.2);

4.6.1.7. Prepare a memorandum of relief for submission to the commander if required by local regulations;

4.6.1.8. Verify and transfer all documentation supporting balances in clearing accounts **F3880 (Unavailable Check Cancellations and Overpayments (Suspense)), **F3875 (Budget Clearing Account (Suspense)), and **F3885 (Undistributed Intra-governmental Payments). The Treasury Financial Manual (TFM), Volume 1, Part 4, Chapter 7000 (I TFM 4-7000) and I TFM 2-1500, require these accounts be cleared to proper appropriations or funds as expeditiously as possible. To clear account **F3880, the outgoing DO presents a detailed list of individual subsidiary transactions, supporting documentation, and current status.

Documented evidence includes certification that the DO or designated DDO personally reviewed the balances in the account within the last month (see Chapter 7, subparagraph 11.9.5); and

4.6.1.9. Validate unreconciled differences (e.g., check issue and deposit discrepancies, Intra-governmental Payment and Collection system differences). In addition, ensure that the outgoing DO’s accountability, the balance amount on the DoD (DD) Form 2657, Daily Statement of Accountability, is reconciled with the DO Cash Treasury Account Symbol (TAS) on the daily CARS Account Statement. If the outgoing DO cannot provide documentation supporting the unreconciled items, he or she processes the discrepancies as losses (see Chapter 6, section 4.0) or overages (see Chapter 6, section 8.0) of funds.

4.6.2. Actions by Outgoing DO. Upon relief from disbursing duty:

4.6.2.1. Terminate all DDO, agent, and cashier appointments and clear all related DD 1081(s), Statement of Agent Officer’s Account;

4.6.2.2. Transfer all cash, negotiable instruments, money accounts, books, property, vouchers, and other retained records to the incoming DO;

4.6.2.3. Prepare and submit a final SF 1219. The incoming DO signs and marks it as "FINAL";

https://tfm.fiscal.treasury.gov/v1/p4/c700.html https://tfm.fiscal.treasury.gov/v1/p2/c150 http://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd2657.pdf http://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd1081.pdf

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4.6.2.4. Prepare and submit a final SF 1179, Month End Check Issue Summary.

The incoming DO signs and marks it as "FINAL";

4.6.2.5. Send a copy of the incoming DO’s commencement of disbursing duty memorandum, including copies of all the letters of transfer of total accountability with the final SF 1219 to the DFAS site where financial reports are submitted;

4.6.2.6. Prepare and send a memorandum to the supporting DFAS site and DFAS-IN/JJFKDC advising of the date and check number of the last check issued;

4.6.2.7. Verify the destruction of signature plates or digitized signature medium being withdrawn from service (i.e., not to be used again). Follow the guidance in Chapter 7, subparagraph 5.2.6. When the medium has been destroyed, send a copy of the certificate of destruction to DFAS-IN/JJFKDC; and

4.6.2.8. Transfer custody of the check-signing machine to the incoming DO, if applicable.

4.6.3. Actions by the Incoming DO. The incoming DO ensures that all actions listed in this section are accomplished, documented, and verified before signing for the accountability. The actions listed are to be taken by an incoming DO before reporting to the new disbursing office or activity.

4.6.3.1. Upon commencement to disbursing duty:

4.6.3.1.1. Send the FS 3023 and memorandum to DFAS-IN/JJFKDC and the DFAS site that receives the DO’s financial reports. If signatures have been furnished previously as a DO or DDO, submission of the FS 3023 is not required unless specifically requested or a change of official signature is desired. If the outgoing DO has an LDA with check stock, send specimen signatures to the LDA;

4.6.3.1.2. Contact the disbursing office or activity to determine if a check-signing machine is in use. Obtain all necessary information about the machine (make, model and number of media required);

4.6.3.1.2.1. If the incoming DO has never had a signature medium, provide three official signature specimens in addition to those required by paragraph 4.4, and request the required medium be ordered and received before the actual transfer date.

4.6.3.1.2.2. If a signature medium cannot be received or obtained before the actual date of transfer, the incoming DO may request DFAS-IN/JJFKDC to authorize the use of the outgoing DO’s until a new one arrives, to allow continued efficient operations of the disbursing office. The incoming DO is accountable and pecuniarily liable for payments made on or after the date of the transfer of accountability.

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4.6.3.1.3. Appoint at least one DDO and send the DD 577 and FS 3023 to DFAS-IN/JJFKDC. Appoint agents, cashiers, and other accountable officials as necessary;

4.6.3.1.4. Verify the adequacy of the safekeeping facilities for funds, blank checks, stored value cards, and other accountable documents. If the facilities are inadequate, report the deficiencies to the commander and request that proper facilities be provided (see Chapter 3, section 3.0);

4.6.3.1.5. Change all safe combinations;

4.6.3.1.6. Review cash on hand requirements. If the current cash holding authority is valid, the incoming DO may retain it until the normal resubmission date. Otherwise, the incoming DO submits a new cash holding authority request as soon as possible after assuming the account (see Chapter 3, paragraph 2.3); and

4.6.3.1.7. Notify all serviced activities, agencies, commercial concerns, and necessary stakeholders of the account holder change.

5.0 DDOs

5.1 Eligibility

An officer, enlisted member, or civilian employee acceptable to the DO and who is a U.S. citizen may be appointed as a DDO.

5.2 Appointment

DOs appoint their DDOs using the DD 577 (see paragraph 3.3).

5.3 Terminations

A DO may terminate a DDO’s appointment at any time by completing Section IV of the appointing DD 577. When a DO is relieved from disbursing duties, he or she revokes the appointments of all DDOs. In all cases, send a copy of the DD 577 to DFAS-IN/JJFKDC. If another individual will succeed a DDO, send a copy of the appointing DD 577 and FS 3023 for the new DDO, with the copy of the notice of revocation to DFAS-IN/JJFKDC. If a DDO appointment is terminated for cause, include the reason for termination when sending the appropriate DD 577 to DFAS-IN/JJFKDC.

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6.0 CHANGE IN THE STATUS OF DOs OR DDOs

6.1 Authorized Absence of DOs and DDOs

During an authorized absence, the DO remains accountable for the account unless or until it is officially transferred. Accountability does not need to be transferred unless, in the DO’s judgment, not doing so would impair proper supervision. The DO must maintain an adequate system of controls to avoid errors and ensure the implementation and effectiveness of those controls. For relief of liability to be considered, the DO must show clearly what the procedures were and how they were implemented during the absence (e.g., records must show that any loss incurred was not the result of bad faith or lack of reasonable care).

*6.2 Death, Disability, or Removal of a DO

* 6.2.1. Death, Disability, or Removal of a DO. When a DO dies, becomes disabled, or is removed from disbursing duty for cause (including unauthorized absence), a DDO under 10 U.S.C. § 2773, may continue to disburse under the accounts of the DO through the last day of the second month after the month of death, disability, or removal. If there is more than one DDO, the commander, DFAS Director, or designee, as appropriate, designates one DDO to disburse in the DO’s name.

6.2.2. Responsibility of the Commander or DFAS Director. The commander, DFAS Director, or designee:

6.2.2.1. Seizes and seals all disbursing spaces, keys, property, and safe(s) to ensure the security of the funds, property, and spaces involved;

6.2.2.2. Appoints a board of at least three disinterested but qualified persons to inventory the vouchers, funds, and property on hand (see subparagraph 6.2.3);

6.2.2.3. Appoints based on the disbursing needs of the activity:

6.2.2.3.1. A custodian of the disbursing office’s vouchers, funds, and property (see subparagraph 6.2.4); or

* 6.2.2.3.2. A qualified person (normally a DDO) to take charge of the DO’s vouchers, funds, and property involved and perform as acting DO until a regular relief reports (or is appointed), or until the last day of the second month following the date of death, disability, or removal (see subparagraph 6.2.5); and

6.2.2.4. Notifies the supporting DFAS site of all actions taken and provides an information copy to DFAS-IN/JJFKDC.

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6.2.3. Responsibility of the Inventory Board. The appointed board, as prescribed in subparagraph 6.2.2.2, inventories all public funds, including advances to deputies, agents and cashiers; vouchers evidencing receipt, transfer, or disbursement of funds; safekeeping deposits;

stored value cards, if applicable; and property of the DO in the presence of the immediate custodians and the appointed custodian, acting DO, or incoming DO. In addition, the appointed board must verify the departed DO’s accountability balance on the DD 2657 is reconciled with the DO Cash TAS on the daily CARS Account Statement. If there is no documentation supporting the unreconciled items, the incoming DO processes the discrepancies as losses (Chapter 6, section 4.0) or overages (Chapter 6, section 8.0) of funds.

6.2.3.1. The board verifies all official records to determine that the cash on hand agrees with the records, verifies that all checks and stored value cards issued in the current accounting period have been properly accounted for, and inventories blank checks to determine if any are missing.

6.2.3.2. If the board discovers a shortage or deficiency, the commander takes the actions prescribed for losses of funds or deficiencies in the DO’s account as prescribed in Chapter 6, section 4.0.

6.2.3.3. All members of the board prepare and certify an original and four copies of the inventory as true and accurate. The board turns over all public funds and property certified on the inventory to the appointed custodian, acting DO, or incoming DO. The incoming DO retains a copy of the inventory report, provides the original to the commander, and a certified/notarized copy to each member of the board.

* 6.2.4. Responsibility of the Custodian. The custodian, on receipt of the original inventory, assumes custody of the public funds, and property held by the former DO. No transactions other than collections may be conducted. When the disabled DO returns, or a new, permanent DO reports, the custodian and the DO inventory and transfer all vouchers, funds, and property as prescribed in the relief procedures.

* 6.2.5. Responsibility of the Acting DO.

6.2.5.1. The DDO appointed to serve as the acting DO performs and is accountable for all official duties that would have been required of the DO, to include submitting financial reports for the DO as of the date of death, disability, or unauthorized absence. Include only those vouchers actually paid by the former DO in the reports. The DDO submits the reports in the name of the former DO.

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* 6.2.5.2. Include in the reports: information on the date of death, disability, or unauthorized absence; and the fact that transactions included were made by the former DO.

Include vouchers for which checks have been drawn but not delivered in the first reports covering transactions made by the DDO. Submit subsequent financial reports at the normally prescribed times in the name of the former DO, signed by the DDO, and include only transactions made by the DDO under authority of subparagraph 6.2.5.1.