Chapter 16, Case Reconciliation and Closure, comprises policy on case reconciliation and closure. The policy applies to both Foreign Military Sales (FMS) and Building Partnership Capacity (BPC) cases. Unique closure requirements for BPC cases are provided in Chapter 15, Section C15.6. Information contained in this chapter complements the DoD Financial Management Regulation (DoD FMR), DoD 7000.14-R. This chapter identifies all policies in order to facilitate actions and simplify efforts to research the associated business rules and processes provided in the Case Reconciliation and Closure Guide (RCG), which is at Appendix 7 of this document.
|C16.3.||Case Reconciliation and Closure Executive Committee (EXCOM)|
C16.1.1. Introduction to Reconciliation and Closure. Two critical functions during the life of a case are reconciliation and closure.
C188.8.131.52. Reconciliation Defined. Reconciliation refers to the financial and logistical actions that ensure proper accounting, accuracy and thoroughness of data, currency of schedules, and timeliness and completeness of reporting. In turn, successful reconciliation throughout the life of a case expedites case closure.
C184.108.40.206. Closure Defined. Closure occurs in the life of a case when all material was delivered, services were performed, other requirements of the Letter of Offer and Acceptance (LOA) were satisfied, known financial transactions (including collections) were completed, and the purchaser receives a final statement of account in the next DD Form 645, "Foreign Military Sales Billing Statement". From a practical and operational standpoint, such "final" case closure marks the conclusion of the life of a given case. However, the DoD FMR, Volume 15, Chapter 6 states that a closed case may remain open from a DoD accounting perspective in order to acknowledge the possibility that a financial transaction may occur subsequent to case closure. See DoD FMR Volume 15, Chapter 3 for general closure policies in addition to the information contained in this chapter.
C16.1.2. Importance of Reconciliation. Effective reconciliation serves two separate but related constituencies: the purchaser and the United States Government (USG):
C220.127.116.11. Purchaser. It is important to the purchaser that reconciliation occurs as expeditiously as possible in order to ensure the return of surplus funds to the purchaser for other projects and purchases, as well as enabling projects to be completed in a timely manner. Also, funding is often provided for projects in specific purchaser fiscal years. If there is an unanticipated cost overrun, it may adversely affect the availability of funds for other projects. Consistent reconciliation also allows for prompt resolution of inconsistency between what was requested and what was delivered/performed.
C18.104.22.168. USG.Many of the above considerations identified for purchasers pertain to the USG FMS community also. In addition, reconciliation supports the following:
C16.1.3. Reconciliation Timeline.
C22.214.171.124. Reconciliation begins when the case is implemented and does not end until the case is "final" closed. The various reconciliation stages occur over the general lifecycle of a case and are depicted in RCG Figure A7.C1.F1.
C126.96.36.199. Active case reconciliation is performed from case implementation until the case is Supply/Services Complete (SSC). Refer to the Case Review and Reconciliation Matrix and associated guidelines and checklist in the RCG Figures A7.C2.F5., A7.C2.F6., and A7.C2.F7. for additional details.
C188.8.131.52. Reconciliation for closure begins at SSC and continues until the case is "final" closed. For additional details, refer to the Case Review and Reconciliation Closure Matrix and associated guidelines and checklist in the RCG, Figures A7.C2.F5., A7.C2.F6., and A7.C2.F7.
C16.1.4. Importance of Closure. Prompt closure minimizes the inventory of open cases that are logistically, but not necessarily financially, complete. Prompt closure also expedites the release of excess purchaser funds, and addresses the primary concerns purchasers have with USG's management of the FMS program – timely and efficient closure.
C16.1.5. Closure Criteria. Cases are not considered candidates for closure until they become SSC, meaning all logistical actions are completed and all conditions of the LOA are satisfied. See Section C16.2.12. for a detailed outline of what constitutes SSC. Closure inhibitors are discussed in Section C16.4.6.
C16.1.6. Responsibilities of Different Entities. Reconciliation and closure of cases involve a wide range of organizational responsibilities. Ultimately, the FMS Case Manager (CM) in the Implementing Agency (IA) is responsible for all aspects of the case(s) under his/her purview, to include review, reconciliation and closure. However, it is also recognized that various activities within the CM's Implementing Agency (IA), Defense Security Cooperation Agency (DSCA), the Defense Finance and Accounting Services (DFAS), the Defense Contract Management Agency (DCMA), the Defense Contract Audit Agency (DCAA), and the purchaser all play integral roles in the oversight and performance of these critical functions. A brief description of the role of these organizations follows:
C184.108.40.206. IA. Performs all case management duties prescribed in this document and serves as overall manager and facilitator for reviewing and reconciling cases. The IA also ensures data integrity of reports and information products within and between data automation tools through periodic reviews, meets with stakeholders (to include purchasers) to resolve issues, and certifies cases to DFAS Indianapolis for closure.
C220.127.116.11. DSCA. Publishes and updates reconciliation and closure policy, chairs various FMS reconciliation and closure meetings, serves as final arbiter for case reconciliation and closure issues raised by IAs and DFAS Indianapolis, and chairs the Executive Committee (EXCOM) for case reconciliation and closure. Operates and maintains security cooperation management system Socium, to be used for logging applicable information. For information on the EXCOM, refer to Section C16.3.
C18.104.22.168. DCMA. When assigned as the Administrative Contracting Officer (ACO), performs contract administrative functions (including contract closeout) for FMS as prescribed in the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS).
C22.214.171.124. DCAA. Performs contract audit functions for FMS as prescribed in the FAR and the DFARS, including final overhead rate audits necessary to close out contracts that, in turn, lead to closure of cases.
C126.96.36.199. Purchasers. Advise on which cases are desired for closure, coordinate closure decisions between: (a) Ministry of National Defense (MND) or equivalent thereof and (b) Service/program office level, ensure prompt payment for cases in a collection deficit (i.e., underpaid) position, participate in financial management reviews (FMRs), and meet with United States Government (USG) to resolve issues.
C16.2.1. Execution Phase Reconciliation. Active case review and reconciliation, extending from LOA implementation until the case is SSC, are critical components of effective case management. It is mandatory that each CM performs an annual case and payment schedule review and/or reconciliation on each case, which includes comparing data between systems, comparing LOA data to performance, comparing LOAs to underlying contracts and comparing systemic data to hardcopy or electronic supporting documentation. Case Managers are responsible for the timely reconciliation and closure certification of cases, regardless of how these activities are delegated within the responsible IA. Case Managers should not wait until a case is ready to be closed to reconcile the case. Case Managers should reconcile and close lines of accounting, requisitions, funding documents, and other program documents as material is delivered and services are performed. This section will address those issues and transactions that collectively represent active case reconciliation to include: relationships, case reviews and reconciliation requirements, funding documents, FMS reviews, LOA changes and surcharges.
C16.2.2. Critical Active Case Reconciliation Relationships.
C188.8.131.52. Integrity of the LOA Document: Compatibility with Actual Performance. Many critical relationships exist between LOA pricing/development and LOA execution. It is crucial to ensure that the LOA continually represents an accurate picture of how the case is being executed. Primary comparisons to be undertaken are listed in the RCG.
C184.108.40.206. LOA: Contract/Funding Document. Lack of timely reconciliation of contracts and other funding documents supporting cases are the most significant obstacles precluding efficient case execution and closure. Reconciliation is further complicated by the relationship between the LOA, multiple contracts and funding documents. It is important that these documents are monitored on a regular basis and closed out in accordance with regulations to meet case closure milestones.
C220.127.116.11. Case Manager (CM): Contracting Relationship. A relationship between the FMS CM and the contracting community allows participants to effectively address the outline of issues noted in the previous section. "Contracting community" includes the Program Manager (PM), Procuring Contracting Officer (PCO), Administrative Contracting Officer (ACO), Contracting Officer's Representative (COR), contractor, disbursing office, accounting office, foreign purchaser, DCMA and DCAA. Such relationships can develop in several ways, including involving the FMS CM with the PCO's team pre-award planning and building the statement of work/performance work statement and ensuring the CM understands post-award issues such as the contract, contract Modifications and links with financial systems. These interactions may reduce reconciliation actions and help facilitate case closure.
C16.2.3. Case Reviews and Reconciliations. Reviews, including those with the purchaser, are relevant to execution phase reconciliation and are an excellent opportunity for ensuring prompt issue resolution, data integrity and accurate accountability for active cases. Information on general case reviews is provided in Section C6.5. Additional information on financial management reviews can be found in Section C9.14. Two specific types of reviews that facilitate timely case closure and are required to be conducted at defined intervals include the annual case review and the Triannual Review.
C18.104.22.168. Annual Case Reviews/Reconciliations. All cases must be reviewed at least once per calendar year either:
RCG Figures A7.C2.F5 and A7.C2.F6 provide the minimum review items that are required of a case and identifies at which point in the case life cycle each item must be reviewed. RCG Figure A7.C2.F5. provides the minimum review items that, taken together, constitute the required annual review of each case. That matrix also identifies how long in the case life cycle each item must be reviewed. RCG Figures A7.C2.F6. and A7.C2.F7. are the guidelines and checklist derived from the matrix that documents that the review was performed. The CM must sign and date a checklist documenting that he/she performed the review and this checklist shall become an official document within the applicable case file. Automation, to the extent possible, and electronic filing is both allowable and preferred whenever practical. Automated replacement for the annual case review process and documentation requirements must be approved by DSCA (Business Operations Directorate, Financial Policy and Analysis Division).
C22.214.171.124.1. DSCA Oversight of Annual Case Reviews. DSCA will review a sampling of Annual Case Reviews on a quarterly basis and additional cases may be reviewed during Business Process Reviews (BPRs) to ensure compliance. Number of samplings will be determined by the inventory of Implemented cases and further subdivided based on three age categories:
C126.96.36.199.1.1. DSCA will provide feedback and corrective actions if necessary as well as conduct trend analysis to identify any systemic issues requiring corrective action. DSCA will maintain a Master List of cases and results of the reviews for audit purposes.
C188.8.131.52. Abnormal Balance. Abnormal financial balances are defined as values in the FMS purchaser accounting and billing system, known as the Defense Integrated Financial System (DIFS), that are interfaced from the Implementing Agencies (IAs) feeder systems, which are atypical of what the case values should be (e.g. Constructive Delivery Reporting, Deliveries, Disbursements, Progress Payments, or Obligations greater than Ordered Value; Negative Delivered, Progress Payment or disbursement balance; Disbursements greater than Obligations; or aged Progress Payments/Disbursed Undelivered). These abnormal balances can impact purchasers and internal operations through improper billing, termination liability, reserve calculations, and the Health of Country Programs reporting. Therefore, it is imperative that any abnormal balances be reviewed periodically and corrected by the IAs as directed by DSCA.
C16.2.4. Prevalidation. Prevalidation requests are received daily from the Mechanization of Contract Administration Services (MOCAS) for contractor payments that meet prevalidation thresholds. The primary intent of the process is for DFAS to ensure that sufficient obligations were previously recorded by the IA in the Authorized Accounting system before a payment is made by the DFAS disbursing office to liquidate the obligation. Liquidating progress payment transactions are also prevalidated to ensure that the outstanding progress payment balance in the IA accounting system is not overliquidated. The ultimate goal of the Prevalidation process is to prevent Problem Disbursements (PDs), such as Unmatched Disbursements (UMDs) and Negative Unliquidated Obligations (NULOs).
C16.2.5. Expenditure Authority (EA). EA is required before any disbursements (including reconciliation adjustments) are made against any case (See RCG Figure A7.C2.F9). If the purchaser has an account with a Federal Reserve Bank (FRB), DFAS Indianapolis is authorized to make an "emergency" draw from that account. If not, DFAS Indianapolis may request additional payment from the purchaser or take other appropriate action.
C16.2.6. Problem Disbursements (PDs).
C184.108.40.206. Definition. A PD is a transaction reported to the Treasury Department's Bureau of Financial Services, but upon receipt at the official accounting station cannot be successfully matched to the original obligation or accounts receivable amount for liquidation purposes. PDs include UMDs, NULOs, and in-transit disbursements made by disbursing officers.
C220.127.116.11. Resolution Timeline. In total, DFAS and the activity issuing the contract/funding document have 120 days to research and correct UMDs/NULOs. When the issuing activity is co-located with their accounting office, the research period is limited to 90 days. Refer to the RCG Table A7.C2.T2. and Figure A7.C2.F10. During the first 60 days, IA/DFAS shall research and record obligations if documentation is held. DoD policy states that beginning 1 Apr 2002, if the issuing activity has failed to record the obligations within 120 days after the UMD or NULO has occurred, if DFAS holds a copy of the obligating document, they must record the obligations. The timeline for resolution of NULOs does not apply if the NULO was caused by a contract overpayment. Policies and procedures for collection of commercial or contractor debt are covered in the DoD FMR, Volume 10, Chapter 18. In addition, the FAR, subpart 32.6 prescribes policies and procedures for ascertaining and collecting contract debts.
C18.104.22.168. Impact on Closure. All PDs must be cleared prior to closure, regardless of closure type.
C16.2.7. Adverse Financial Conditions (AFCs). Adverse financial conditions occur when financial reports show that:
The IA has the responsibility to resolve adverse conditions involving obligations or expenditures in excess of approved authority at any level lower than case level as soon as the condition is identified. Additional policy on AFCs is contained in the DoD FMR, Volume 15, Chapter 3, Section 031102. Adverse financial conditions are reported unless otherwise exempt from reporting due to:
C22.214.171.124. Obligation(s) in excess of the "Total Estimated Cost" shown on the LOA occurs, and a modification is prepared by the DoD Component and submitted to the purchaser through appropriate channels within 60 days of the date of the transaction which resulted in the unfavorable financial condition.
C126.96.36.199. Obligation(s) or expenditure(s) in excess of approved authority occur(s) when the excess amount results from the posting of duplicate or erroneous obligation/expenditure transactions or from the posting of obligations from inventory systems and corrective action is taken within 60 days of the transaction date. These conditions, however, could indicate weaknesses in internal controls and administrative action may be required to improve systems design or to prevent recurrence.
C16.2.8. Financially Troubled Case (FTC). FTCs result when commitments, obligations and/or expenditures exceed OA issued. The IA has the responsibility to resolve conditions resulting in an FTC as soon as the condition is identified. Additional guidance in resolving FTCs are contained in the RCG Section A7.C2.9.1.
C16.2.9. Performance Reporting for Active Cases.
C188.8.131.52. Estimated Delivery Reporting (E-Bills). The DoD FMR, Volume 15, Chapter 8, Section 080102 requires the leadership of DoD components to report physical deliveries of items or performance of services to DFAS Indianapolis within 30 days of a shipment or service completion. These E-Bills are applied to all open cases that are not pending interim or final closure. E-Bills are reported for the entire obligation value, regardless of whether or not previous incremental or accrued bills have processed. Reversal and restatement of an E-Bill is performed when there is a change in obligation value, if shipment status is removed, or when actual final billing has occurred. The impact of E-Billing to the international purchaser includes: 1) faster delivery reporting on the quarterly FMS Delivery Listing, 2) more timely assessment of LSC, admin and accessorial charges, and more timely submission of SDRs for non-receipt of material. All E-Bills must be converted to actual bills (A-Bills) before closure.
C184.108.40.206. Constructive Delivery Reporting. The lack of constructive delivery reporting is an inhibitor to case certification and closure. DoD components must report within 30 days of title transfer to the purchasing country, constructive deliveries to DFAS Indianapolis the quantities of items on LOA lines having a unit of issue of "EA" for specific generic codes. Additional information is provided in Section C220.127.116.11.
C16.2.10. Surcharge Reconciliation. FMS surcharges consist of Administrative, Contract Administration Services (CAS), Logistics Support Charge (LSC) and Accessorials, such as Packing, Crating, Handling, and Transportation. Ensuring surcharge accuracy through annual reviews and reconciliation is required and an important aspect of case closure.
C16.2.11. Undercollected Cases (Active Cases). DFAS Indianapolis has primary responsibility for the reconciliation of financial requirements for total collections throughout the life of the case. To rectify underpayment issues for cases, DFAS Indianapolis takes initial follow-up actions as described below:
C18.104.22.168. For cases with payments due of $1 million or more from the purchaser, written follow-up action is taken 30 days after the payment due date. If no response is received, additional follow-up shall be made 60 and 90 days after the payment due date. DFAS Indianapolis refers case-level late payments more than 90 days after the payment due date to the DSCA (Business Operations Directorate, Country Financial Management Division) for further action.
C22.214.171.124. For cases when the payment due is less than $1 million and the lack of payment would have no significant impact on the purchaser's Trust Fund balance, written follow-up action is taken 60 days after the payment due date.
C126.96.36.199. If the payments on FMF loan-financed cases have not been received three weeks after the payment due date, DFAS Indianapolis should consult with the purchaser to determine the status of any loan drawdown letters that may be required. For any amounts still unpaid, DFAS Indianapolis should initiate written follow-up action with the purchaser, citing the unpaid amount by case, and requesting the purchaser prepare a loan drawdown letter or to make cash payments to cover the amount due. These letters should be coordinated with DSCA (Business Operations Directorate, Country Financial Management Division) prior to dispatch. If payments due remain unpaid 60 days after the bill payment due date, the matter should be referred to the DSCA (Business Operations Directorate, Comptroller) for further action.
C188.8.131.52. All FMS payments that have not been collected within 90 days of the due date shall be immediately reported to DSCA (Business Operations Directorate, Country Financial Management Division) for further collection action, including preparation of the third follow-up letter. DFAS Indianapolis shall notify DSCA (Business Operations Directorate, Country Financial Management Division) immediately of any payments received after referral.
C16.2.12. Reconciliation for Closure of Supply/Services Complete Cases. FMS case/lines become SSC pursuant to meeting eligibility requirements prescribed in Section C184.108.40.206. A line is reconciled for closure when it is SSC and a case becomes a candidate for closure when all lines are SSC. Reconciliation is an iterative and continual process from implementation of the case through to closure, requiring an in-depth review of the case/line commitments, obligations, deliveries and expenditures in various financial and logistical systems. Members of the FMS community perform SSC reconciliation to determine if unresolved financial and logistical conditions exist preventing case closure.
C220.127.116.11. SSC Eligibility Requirements. Eventually, an active line or case transitions into SSC status. A process exists for deciding that an FMS case or line is SSC. (See RCG Figures A7.C2.F15. and A7.C2.F16.). The reconciliation condition of data (other than that which is preventing item delivery or actual completion of services), the allocation of resources (funding and/or manpower), or the distribution/transfer of workload are not factors in determining when SSC occurs. The IA declares a case or line is SSC when the following events occur by updating the status in the IA system (to include SSC Date) and informing the purchaser:
C18.104.22.168.1. Verification that all items are delivered; title has transferred.
C22.214.171.124.2. Verification that all services have been performed.
C126.96.36.199.2.1. Training. Verification that all courses, Mobile Training Teams (MTT) and Extended Training Service Specialist/Language Training Detachments are completed, all Temporary Duties (TDYs) are finished, and all case-funded salary positions have expired.
C188.8.131.52.2.2. Other services. Period of performance has elapsed.
C184.108.40.206.2.3. Program Management Line (PML). The end point may vary, but may be no later than 12 months after final delivery and/or performance of last non-PML service for the related case(s). Like any other service, the duration of PML must be linked to the period of performance.
C220.127.116.11.3. All warranty periods have elapsed.
C18.104.22.168.4. No items are in storage
C22.214.171.124.5. If the country is under suspensions and/or sanctions, there are no deliveries pending, and no future deliveries shall occur once sanctions are lifted.
C126.96.36.199. SSC Status Application. Once the conditions for SSC are reached, lines and/or cases shall be coded by the Implementing Agency (IA) with this status and the actual date of SSC within five (5) business days in Socium and the appropriate security cooperation information management systems. This coding shall not be delayed under any circumstance. The management of blanket order case/line items is generally conducted based on their value. Therefore, the application of SSC status on blanket order cases and/or lines may be accomplished based on the amount of unused value, when appropriate, rather than the absence of open orders. The reconciliation condition of data (other than that which is preventing item delivery or actual completion of services), the allocation of resources (funding and/or manpower), or the distribution/transfer of workload has no application in determining when supply/services completion occurs. To the extent possible, the SSC status of lines and sublines should be coded in the Defense Security Assistance Management System (DSAMS) as either completed (CMPLTD) or shipped (SHPD).
C16.2.13. Reduction of FMS Cases at SSC. Upon SSC, the IA is responsible for reviewing the case to determine if a modification to reduce the case value is required. The reduction will be based on the Adjusted SSC Value (ASSV). The ASSV is the minimum amount the IA considers is required to cover current, actual cost and any projected, reasonable amount necessary to cover potential adjustments that may be found during SSC reconciliation in preparation for case closure. Completing SSC reconciliation is not expected or necessary to determine the ASSV or to prepare a case reduction. Case reductions must either cover the highest financial requirement (HFR) at the line level as indicated in the appropriate security cooperation management and accounting systems or an amount below the line level HFR must be explained sufficiently in the IA comments section of the LOA Checklist.
C188.8.131.52. Thresholds and Purchaser Engagement. The ASSV is used to determine the residual value on the case by subtracting the ASSV from the existing case value. If the residual case value is within the thresholds in Table C16.T1., then the IA is required to engage the purchaser for either a determination to reduce the case or place it on the "To Be Kept Open" list. Disposition instructions must be provided in writing from the LOA signatory organization. The IA is required to follow-up with the purchaser every 60 days until disposition instructions for the residual value are provided. If after 180 days, instructions are not provided, a modification will be prepared to return the residual value. FMS cases that do not meet the thresholds in Table C16.T1. are eligible for closure without conferring with the purchaser.
|Existing Case Value||Residual Case Value|
$10,000 or greater
$500,000 – $999,999
$25,000 or greater
$1,000,000 - $4,999,999
$50,000 or greater
$5,000,000 - $9,999,999
$75,000 or greater
$100,000 or greater
C184.108.40.206. To Be Kept Open List. If the purchaser indicates the intent is to execute the residual value of the FMS case, the IA will include it on the "To Be Kept Open" list upon written notification from the LOA signatory organization until requirements are identified to use the residual case value. At that time, the IA will remove the SSC status on the FMS case and remove it from the "To Be Kept Open" list. Until the case is removed from the "To Be Kept Open" list, the IA should follow-up every 60 days with the purchaser and provide DSCA the current status through the quarterly case closure reporting process. If disposition of the residual case value has not occurred after 180 days, the case should be removed from the "To Be Kept Open" list and a modification to the LOA prepared to return the residual case value. This policy is intended to allow the residual value to be used and is not a blanket endorsement for the addition of funds to the case that will extend the execution phase, which could prolong the reconciliation and closure of the case beyond set standards. FMS Cases may be added to the list for other conditions such as DSCA-approved, purchaser-unique ULO closure thresholds. FMS cases added to the list for other conditions should be reviewed every 90 days to determine if they should remain on the list.
C220.127.116.11. Reduction Processing. If a purchaser indicates the desire for residual case value to be released once SSC status is reached, the IA will prepare a modification to the LOA to reduce the FMS case value based upon the FMS case ASSC value. If other case adjustments are necessary that require the use of an Amendment, at the time the case reduction will be processed, the required case reduction can be incorporated into an Amendment. Further, IAs should consider preparing subsequent modifications to SSC FMS cases, as SSC reconciliation progresses, that result in substantial reductions to the FMS case ASSC value. Completing SSC reconciliation is not expected or required to reduce the case value to meet the provisions of this guidance.
C18.104.22.168. SSC Case Reduction Exceptions.
C22.214.171.124.1. Residual case thresholds are not applicable for concurrent modifications or where there is a requirement to cover official accounting system overages at the line or case level.
C126.96.36.199.2. If case closure certification is anticipated within six months of the planned preparation of a modification to reduce the case value once the FMS case SSC status is reached, the modification should not be prepared. The issuance of the certificate of closure will result in the required FMS case reduction. IAs should evaluate the need for a modification if the anticipated closure certification date slips.
C188.8.131.52.3. Requests by the IA for exceptions to the threshold amount or disposition actions after the 180 day timeframes have been reached, which should be purchaser driven, can be requested on a case-by-case basis. Such requests should be kept to a minimum and directed to the appropriate DSCA Country Finance Director (CFD).
C16.2.14. LOA Changes.
C184.108.40.206. In general, LOA Amendments are not required for SSC cases. DSCA (Business Operations Directorate, Country Financial Management Division) must approve development of Amendments on SSC cases that are increasing scope and/or value that will reinstate logistical activity on the case.
C220.127.116.11. Modifications are required if, during reconciliation, expenditures exceed 110% of LOA value. Modifications are not required during closure when final expenditures remain within or equal to the LOA total case value even though line items may be exceeded. The certificate of closure serves as the authorizing adjustment document in accordance with DoD FMR, Volume 15, Chapter 3, Section 030902B.6.
C16.2.15. Contract/Funding Document Status.
C18.104.22.168. Contract status should be determined utilizing available tools/data such as entitlement records, shipping documentation (e.g., DD Form 250, etc.), PCO/ACO records, and DD Form 1594/PK9 contract completion statements. The Case Review and Reconciliation Matrix (Item #23) (See RCG Figure A7.C2.F5) addresses the requirement to obtain current data for contracts supporting cases. The type of contract determines the closure requirements. The IA is responsible for ensuring that the obligations and disbursements are accurately recorded in the IA's accounting system and the entitlement system and that the disbursements in the entitlement system match the contractor claimed paid amount at ACRN level, or at CLIN level, if the contract is CLIN specific.
C22.214.171.124. Other Funding Documents. The IA should contact the performing activity for status once the work completion date has passed and the funding document has not been finalized. This is necessary to ensure the prompt close out of funding documents in the IA system in support of timely case closure.
C126.96.36.199. The quick closeout procedures offer an alternative to holding contracts open until the determination of final direct costs and indirect rates. The contracting officer responsible for contract closeout has the authority, when certain conditions exist, to negotiate the settlement of direct and indirect costs for a specific contract, task order, or delivery order to be closed, in advance of the determination of final direct costs and indirect rates. When it becomes apparent that there is a delay in the settlement of final direct costs and indirect rates, it is recommended that the IA encourage the appropriate contracting officer to consider utilizing quick closeout procedures, where applicable. The authority and use parameters are identified in the FAR 42.708.
C188.8.131.52. Discontinued Research. The DoD FMR, Volume 3, Chapter 11, addresses research requirements and provisions where discontinued research may be authorized. Efforts must first be made to obtain a final document status report regardless of the document type or the year of issuance. It is recommended that final documents be requested within six months after receipt of the material or work completion date has expired to facilitate case reconciliation and closure thus reducing the need to reopen a case at a later date after unidentified charges are later located.
C16.2.16. Write-Off Authority. A DoD Component which determines that unresolved reconciliation issues for a case exist may write-off those imbalances using the following guidelines as authorized in DoD FMR, Volume 15, Chapter 3.
C184.108.40.206. For Problem Disbursements (PDs). Write-off authority exists for up to $2,500 per transaction. Additionally, the DoD Comptroller prescribed a timeline of 90 to 120 days (depending on whether the program office and DFAS are co-located) for resolving problem disbursements before the offsetting obligation is posted. Refer to DoD FMR, Volume 3, Chapter 11 for an elaboration of the policies and procedures relative to PDs. PDs greater than $2,500 should be brought to the attention of DSCA (Business Operations Directorate, Financial Policy and Analysis Division) via the Case Reconciliation and Closure EXCOM for resolution, provided those PDs have not exceeded the timelines noted in the RCG, Section A7.C2.10.
C220.127.116.11. For All Other Types of FMS Financial Transactions. Write-off authority exists for up to $200 per transaction and is charged against the FMS Administrative Charge Budget, object classification 42.3, "Supply Discrepancy Reports Charged for FMS Cases" for the amount required to effect prompt reconciliation as prescribed in the DSCA annual case review requirement. For write-off adjustments performed in support of readying a case for closure, DFAS Indianapolis provides DSCA (Business Operations Directorate, Financial Policy and Analysis Division) with a quarterly summary of closure certificates received in which amounts have been charged in accordance with this policy. A comment shall be included in the remarks/comments section of the case closure certificate (See Section C16.4.8) when those write-offs are utilized.
C16.3.1. Purpose. The EXCOM was chartered on Mar 3, 2003 in DSCA Policy Memorandum 03-05. It provides final resolution on financial discrepancies and imbalances relating to cases/lines that are SSC. The EXCOM is a final arbiter of last resort only. As a general rule, cases are not presented to the EXCOM for consideration unless they are more than two years SSC, and other criteria as established in the requisite documentation package are satisfied (see below). The EXCOM approves discontinued research, finalizes case closure values and cost components, and resolves forced closure value discrepancies.
C18.104.22.168. Existing FMS financial policies and procedures already accommodate certain flexibilities and managerial authorities to resolve most of the financial issues that otherwise preclude timely case closure. Consequently, relatively small universes of cases are expected to require EXCOM resolution.
C22.214.171.124. The EXCOM is not a substitute for sound fiduciary safeguarding and accounting of case financial transactions. Every reasonable effort to reconcile cases in a timely manner and to ensure closure within prescribed timeframes is expected. While the existence of the EXCOM acknowledges that valid situations arise requiring its use, the substantive documentation requirements ensure responsibility for financial stewardship and data integrity rests with the proponent IA and its associated personnel (e.g., CMs).
C126.96.36.199. To promote its effectiveness and efficiency, membership of the EXCOM shall be comprised of managers responsible for overseeing responsible case reconciliation and closure policies. The lead EXCOM representative from each organization may opt to bring additional officials from that organization. Each lead representative may also designate a substitute to act on his/her behalf; the designation must be sent to the EXCOM Chair prior to the next scheduled meeting. Regardless of how many officials from each organization attend a given meeting, each organization has only one vote in the decision-making processes.
C188.8.131.52. Within the parameters of the DoD FMR, the EXCOM has and may exercise wide latitude in determining what specific transactions, processes and actions must be taken to bring specific case reconciliation issues to a successful conclusion. The EXCOM members may not be experts in the nuances of a given situation or in the detailed nature of all supporting systems and databases. The EXCOM relies heavily on the sound recommendations brought forth by the originators of each package.
C184.108.40.206. Operating Procedures. The EXCOM meets on an as required basis, but not usually more than semi-annually.
Once a case is SSC, and the requisite verification steps for SSC reconciliation are complete, the case is eligible to be submitted for closure. Case closure is the final phase of the FMS life cycle and is extremely important to the USG and purchaser. Reconciliation for closure involves extensive communication between various logistics, financial and contract organizations to ensure associated closure transactions are completed. It is imperative that case/line reconciliation be initiated upon implementation of the LOA to make the closure process described herein timely and easier. By reconciling during case execution, case closure becomes an event instead of a process. A case is submitted for closure once it is reconciled according to procedures for the appropriate closure method.
C16.4.1. Closure Types. Two broad categories of closure exist: Accelerated Case Closure Procedures (ACCP) and non-ACCP. ACCP applies to all countries/programs that have cases financed with Foreign Military Financing (FMF) funds, or those countries that elect to participate. For cases under ACCP all commitments and obligations must be completed, however expenditures do not have to be finalized prior to closure. The non-ACCP category exists to accommodate those countries whose FMS programs are completely financed with national funds (cash) and have not elected to participate in ACCP. In addition, Building Partner Capacity (BPC) programs which use various funding where the period of funds availability expires/cancels must utilize non-ACCP. A brief synopsis of ACCP and non-ACCP criteria follows:
C220.127.116.11. ACCP. ACCP is the standard or typical closure process. This type of closure allows a case to be closed after SSC, even if there are outstanding ULOs on the case. Purchaser funds are placed in a Case Closure Suspense Account (CCSA) pending final resolution of the ULOs. This program is voluntary, except for those countries that have FMF-funded cases, which requires mandatory participation in ACCP for all FMS cases regardless of the funding source. Most countries/international organizations participate or are automatically included in the ACCP process. The DSCA (Business Operations Directorate, Financial Policy and Analysis Division) maintains the master list of countries and international organizations that participate in ACCP. A list of ACCP participants is provided in the RCG, Chapter 3. Under ACC, purchaser funds are placed in a case closure suspense account pending final resolution of the ULOs. ACCP cases.
C18.104.22.168.1. ACCP Closure Eligibility
C22.214.171.124.1.1. Cases are SSC for at least 12 months. The 12 months allows for final reconciliation actions and considers the purchaser's right to submit an SDR associated with the final delivery. This time period can be reduced, however, if the purchaser confirms in writing (e-mail or meeting minutes are acceptable) that the submission of SDRs is not anticipated. This statement does not waive the FMS purchaser's right to submit an SDR as indicated in the LOA Standard Terms and Conditions 5.4. The following applies to ACCP closure eligibility:
C126.96.36.199.1.2. No outstanding SDRs exist when the case is submitted for closure.
C188.8.131.52.1.3. A case can close under ACCP for which a litigation judgment was issued, even if the settlement has not been paid.
C184.108.40.206.1.4. All accrued costs and the amount of estimated ULO to be expended after interim closure are determined.
C220.127.116.11.1.5. Unused OA is reduced to zero in the IA accounting system and the correct OA/Obligations (R4/RE transactions) balances are reflected in DIFS, unless an exception is granted by DSCA.
C18.104.22.168.1.6. The case is paid in full, i.e., collections equal the expected case closure value. If the case is not yet paid in full, the IA shall continue processing the case for closure and shall forward the closure certificate (and associated 'C1' transaction) to DFAS Indianapolis.
C22.214.171.124.1.7. Performance reports, submitted to DFAS Indianapolis to report all delivered articles and services, have been processed. All estimated billings have been converted to actual billings.
C126.96.36.199.1.8. Costs of articles and services have been reimbursed from FMS Trust Funds to DoD appropriations or USG equity accounts.
C188.8.131.52.1.9. FMS Accounting Balances. IA and DFAS Indianapolis accounting balances have been reconciled and all performance and disbursements have been properly reported and accounted for.
C184.108.40.206.2. A case shall be direct final closed (i.e., not interim closed) if the ULO equals zero, even if supporting contracts remain open. The USG and purchaser both prefer that direct final closures are utilized to the fullest extent possible without impacting case closure standards.
C220.127.116.11.3. For purchasers participating in ACCP, the USG goal is to close cases within 24 months of SSC as indicated in the LOA. Should the purchaser want a case to remain open, even though it is SSC, the request must be approved by the IA as outlined in Section C18.104.22.168. Normally, DSCA shall require that the purchaser's MND (or equivalent organization) agree that the case remains open. Minutes from a DSCA-sponsored Financial Management Review (FMR) or a request from an official with LOA signature authority serve as an official request from the purchaser.
C22.214.171.124.4. On an exception basis, DSCA may enter into special arrangements with specific purchasers regarding the processing of their ACCP cases (e.g. ULO thresholds). Only DSCA (Business Operations Directorate) can approve these arrangements. The formal notification on these arrangements is transmitted via a written memorandum signed by the DSCA Director of Business Operations. Refer to RCG Table A7.C3.T1. for a complete list of ACCP participants and their processing exceptions.
C126.96.36.199.5. Interim to Final Closure. The IAs and DFAS Indianapolis should continue to monitor and reconcile cases in interim closure for transition to final closure. This may result in a return of excess funds in the Case Closure Suspense Account (CCSA) maintained at DFAS Indianapolis.
C188.8.131.52.6. A subcategory of ACC is Enhanced Accelerated Case Closure (EACC). EACC targets ACC candidates for first priority processing that have been SSC for at least 24 months. The DSCA Business Operations Directorate published the official EACC quarterly list of these cases to the IAs for action. As of 1 December 2008, EACC was suspended and has not been reactivated since.
C184.108.40.206. Non-ACCP. Non-ACC procedures are used to accommodate those countries that have not elected to participate in the ACC process and whose FMS programs are completely financed with national funds (vice with FMF). While ACCP case closure always has a higher priority, non-ACCP cases with no supporting contracts should be closed as quickly as possible. BPC program cases are also closed under non-ACCP procedures.
C220.127.116.11.1. Non-ACCP Closure Eligibility.
C18.104.22.168.1.1. Cases are supply complete for at least 12 months. The 12 months allows for final reconciliation actions and considers the purchaser's right to submit an SDR associated with the final delivery. This time period can be reduced, however, if the purchaser confirms in writing (e-mail or meeting minutes are acceptable) that the submission of SDRs is not anticipated. This statement does not waive the FMS purchaser's right to submit an SDR as indicated in the LOA Standard Terms and Conditions 5.4. The following applies to Non-ACCP closure eligibility:
C22.214.171.124.1.2. No outstanding SDRs exist when the case is submitted for closure.
C126.96.36.199.1.3. No ULOs exist on underlying ACRNs.
C188.8.131.52.1.4. All costs are determined, final charged and collected.
C184.108.40.206.1.5. All applicable IA systems are fully reconciled with DIFS.
C220.127.116.11.1.6. Unused OA is reduced to zero in the IA accounting system and the correct OA/Obligations (R4/RE transactions) balances are reflected in DIFS, unless an exception is granted by DSCA.
C18.104.22.168.1.7. Performance reports, submitted to DFAS Indianapolis to report all delivered articles and services, have been processed. All estimated billings have been converted to actual billings.
C22.214.171.124.1.8. Costs of articles and services have been reimbursed from FMS Trust Funds to DoD appropriations or USG equity accounts.
C126.96.36.199.1.9. FMS Accounting Balances. IA and DFAS Indianapolis accounting balances have been reconciled and all performance and disbursements have been properly reported and accounted for.
C16.4.2. Closure Priorities.
C188.8.131.52. Priorities. The order of priority for case reconciliation and closure is:
A DSCA focus case is any case identified by DSCA (Business Operations Directorate, Financial Policy and Analysis Division) that requires priority reconciliation and closure action.
C184.108.40.206. Authorizing officials. Only DSCA (Business Operations Directorate, Financial Policy and Analysis Division) can authorize deviations to prioritizing closure for specific cases, countries or closure categories.
C16.4.3. Estimated Case Closure Dates. On all LOAs except Foreign Military Sales Order (FMSO) I LOAs, IAs must include a note identifying an estimated case closure date. See Appendix 6 for exact LOA note wording. Cases with long-running contracts may experience closure challenges, but for ACC program cases, the estimated closure date is 24 months after the date of projected final delivery or service performance. For non-ACC program cases, the estimated closure date is estimated to be at 36 months after closure of the longest underlying contract (if applicable). If no contracts apply, the closure date should be within 36 months after final delivery or service performance.
C16.4.4. Verifications Required in Preparing a Case for Closure Certification. There are multiple actions that must be accomplished by the IA to prepare a case for closure certification. Refer to RCG Figure A7.C3.F1 and Tables A7.C3.T2, A7.C3.T3, and A7.C3.T4. for a list of actions and certification checklists for non-ACCP, ACCP interim, and ACCP final closure types.
C16.4.5. Closure Certification Requirements for Unliquidated Obligations (ULOs).
C220.127.116.11. In its most basic form, a ULO is the difference between obligations and articles/services disbursements. The primary components of the ULO are unbilled amounts for contracts; unsettled indirect costs, such as general and administrative (i.e., overhead); unanticipated accounting transactions; unbilled amounts for reimbursable documents; unreconciled systemic accounting differences; and outstanding commitments for contracts involving incentive or award fees.
C18.104.22.168. Determining the ULO Value. The IA is responsible for determining, validating, and certifying the ULO Value for closure purposes. The certified ULO is difference between obligations and articles/services disbursements recorded in the accounting system. Any ULO value that applies to a contract is assessed a ULO CAS value. The sum of the articles/services ULO and the CAS ULO is the total ULO. Refer to RCG Section A7.C3.13. for further information.
C22.214.171.124. ULO Reporting Transactions. ULO delivery performance is reported to DIFS via performance reporting. Where applicable, a separate performance reporting is sent for the ULO CAS amount related to the ULO estimate. These transactions must precede transmittal of the closure transaction to DIFS.
C126.96.36.199. Documenting the ULO Value. Supporting documentation for the ULO value is required as part of the case closure certificate for ACCP cases being closed in an interim status. Refer to the documentation requirements as part of the case closure certificate in RCG Figure A7.C4.F6. This supporting documentation shall be provided to the purchaser upon request.
C16.4.6. Closure Inhibitors. Multiple sets of closure inhibitors exist that identify conditions preventing the certification and closure of cases. DSCA prescribes a standard set of pre-certification inhibitors that are used to identify conditions that prevent the certification of cases for closure. These inhibitors are outlined in RCG Table A7.C3.T5. To varying degrees, the IAs' automated management systems have corresponding inhibitors. In addition, a set of post-certification inhibitors exists that are used to identify conditions that prevent the closure of the case. See Section C188.8.131.52. for further information on this set of inhibitors.
C16.4.7. Case Closures at Reduced or $0 Value. When a case is closed, the USG will retain funds to pay for estimated administrative costs associated with the case, even if no articles or services have been delivered ($0 delivered value). The minimum non-refundable amount will be the greater of:
The DSCA (Business Operations Directorate, Financial Policy and Analysis Division) may approve a reduction of the minimum non-refundable amount when the actual administrative cost on the case is shown to be less than one of the three values above, or if the case is cancelled for the convenience of the USG. Case Managers who want to certify a case for closure at a value that results in a reduction (to include $0) in the minimum, non-refundable required amount of FMS administrative surcharge funding must contact their IA focal point to request the DSCA (Business Operations Directorate, Financial Policy and Analysis Division) for approval. Requests should include the following information: case identifier, date of case implementation, value of the case, delivered amount, minimum amount of surcharge required per policy, recommended surcharge to be collected, a detailed justification for the amount, and any other information the IA deems applicable. The DSCA (Business Operations Directorate, Financial Policy and Analysis Division) reply is sent via email to the requestor and DFAS Indianapolis. Additionally, a case remark is added to DSAMS and the case closure certificate if the request is approved.
C184.108.40.206. Reduction in the FMS Administrative Surcharge to Facilitate Case Closure. A case in an over delivered position should be certified for closure by the IA when the amount of the over delivered position on the case is less than $100.00 due to the rounding down of below-the-line surcharge pricing in DSAMS. A modification to the case is not required. Furthermore, DFAS Indianapolis is authorized to process an FMS Administrative Surcharge adjustment to the case with this condition for any amount under $100.00 to facilitate closure.
C16.4.8. Case Closure Certificate. The IA ensures the case closure certificate and any other necessary supporting documentation (e.g. ULO closure information for ACCP interim closures) are completed in accordance with established procedures. See RCG Figure A7.C4.F5. All case closure certificates are sent via e-mail to DFAS Indianapolis (email@example.com).
C16.4.9. Closure Transactions. Simultaneously with the submission of the closure certificate to DFAS Indianapolis, the IA must process the 'C1' closure transaction for transmission to DIFS. The 'C1' transaction signifies IA completion of its actions necessary for DFAS Indianapolis to close the case. This transaction is required for all closure submissions.
C220.127.116.11. Upon successful interface of the 'C1' transaction, closure data is loaded in the DIFS Case Closure Certificate Inventory (CCCI) and applicable closure status/inhibitor codes are assigned. DIFS closure status/inhibitor codes and their definitions are contained in the RCG Table A7.C4.T5.
C18.104.22.168. Other related closure transactions include the 'C3', 'C4' and 'C5'. The 'C3' transaction indicates a case is closed. It is generated by DIFS and sent to the IA. The 'C4' transaction removes the case from the CCCI. The 'C5' transaction reopens a non-ACCP case or moves an ACCP case from Final to Interim closed status. Both the 'C4' and 'C5' transactions are initiated by the IA and sent to DIFS.
C22.214.171.124. Case Closure in DIFS. DFAS Indianapolis reviews the case closure certificate and takes actions to close the case in DIFS. If DFAS Indianapolis has questions about the closure certificate, DFAS Indianapolis contacts the IA representative listed on the certificate. IAs check the DIFS case closure inventory as needed to determine which cases have been closed. DFAS Indianapolis should close all cases that do not have any outstanding or unresolved issues within 30 days of closure certificate and acceptance of a 'C1' closure transaction.
C16.4.10. Undercollected Cases Pending Closure.
C126.96.36.199. DFAS Indianapolis has the primary responsibility for obtaining and processing collections throughout the life of the case and should follow the policy in Section C16.2.11 to address the undercollected status of the case before it reaches the case closure phase. A case must be fully collected before it can be closed. If a case is not yet paid in full at the time the IA is ready to certify the case for closure, the certificate of closure, along with the associated 'C1' transaction, should be provided to DFAS Indianapolis.
C188.8.131.52. For FMS cases funded with national funds, the USG is generally prohibited from unilaterally transferring funds from a holding account or another case to liquidate the payment shortfall. In this situation, DFAS Indianapolis notifies the purchaser quarterly of the amount owed to close the case. The purchasers may choose to either wire transfer to DFAS Indianapolis the amount due, authorize DFAS Indianapolis to transfer funds from a holding account or authorize a cross-leveling of funds transferring collections from one case to the case requiring funds.
C184.108.40.206. For FMF funded FMS cases, DFAS Indianapolis shall notify the DSCA (Business Operations Directorate, Country Financial Management Division) of the additional FMF committed amount required. The DSCA Business Operations Directorate, Country Financial Management Division) either confirms the committed amount increase was processed or advises DFAS Indianapolis that insufficient FMF is available. Upon committed amount confirmation, DFAS Indianapolis transfers the corresponding collection from the 5QQ (FMS Credit) or 2QQ (MAP Merger) holding account, and closes the case (provided no other inhibitors apply). Upon being notified of insufficient funds advice, DFAS Indianapolis notifies the purchaser that cash must be paid to liquidate the shortfall.
C220.127.116.11. To rectify an underpayment issue for a case certified for closure, DFAS Indianapolis shall take following actions:
C18.104.22.168.1. Process a 'C99' transaction to match ordered values to delivered values.
C22.214.171.124.2. Bill the purchaser on the next quarterly bill for the balance due and indicate the undercollected case which is inhibiting closure.
C126.96.36.199.3. Fifteen days after the bill due date, if payment has not been received, prepare a report of all the "Billed yet still Undercollected Cases" and provide it to the DSCA Business Operations Directorate, Country Financial Management Division).
C188.8.131.52.4. The DSCA (Business Operations Directorate, Country Financial Management Division) will assume responsibility for any subsequent follow up with the purchaser to obtain payment by taking the following actions:
C184.108.40.206.5. Using the undercollected cases pending closure report provided by DFAS Indianapolis, initiate contact with the purchaser to obtain payment and follow up every 30 days until payment is obtained or realign funds, where appropriate. If payment is not received after two follow up actions, subsequent follow up actions should be elevated to senior management, when appropriate.
C220.127.116.11.6. DFAS Indianapolis is to be kept informed in writing of all follow up actions in order to support any arrearage requirements.
C16.4.11. Disposition of Excess Funds. When a case is being closed, any excess funds (as defined by collections less the closure value) are transferred by DFAS Indianapolis to the appropriate holding account. National funds remain in the holding account until the purchaser requests a transfer, refund or has an automatic refund arrangement in place. Generally, credit funds remain in the holding account until they are applied for required payments on other credit funded FMS cases.
C16.4.12. Case Closure Suspense Account (CCSA) (aka ULO Account).
C18.104.22.168. Background/Purpose. The CCSA was established in 1992 with the onset of ACCP to support the closure of cases with ULOs. The account holds funds for all IAs for all participating countries and is maintained by DFAS Indianapolis in DIFS at country level and accounted for at case level. The ULO amount (including CAS, where applicable) is established by the IA and reported to DFAS Indianapolis as a delivery performance transaction and included on the certificate of closure with supporting documentation. This amount is established in the CCSA to cover anticipated post-closure financial activity.
C22.214.171.124. ULO Adjustment Process. Incoming Expenditure Authority (EA) requests decrease (for debits) or increase (for credits) the CCSA balance. In addition, certain DFAS internal disbursements may affect the CCSA balance. Any unused ULO funds remain in the CCSA for subsequent use or refund. DFAS Indianapolis monitors the account to ensure there are sufficient funds to process additional disbursements. Once the ULO is fully liquidated/deobligated, the case can be submitted for final closure.
C16.4.13. CCSA Statement. DFAS Indianapolis is responsible for maintaining the CCSA at country level. Transactions occurring subsequent to interim closure are processed against each country’s respective accounts at the case level. The CCSA statement is provided to the purchasers with their quarterly billing statement.
C126.96.36.199. CCSA Refunds. DSCA (Directorate of Business Operations, Financial Policy and Analysis and Country Financial Management Divisions) and DFAS Indianapolis review the CCSA balances on a quarterly basis to determine if the country is eligible for a refund. ULO amounts must be retained in the CCSA to cover anticipated post-closure billing/disbursement activity. Also, amounts must be retained in the CCSA to cover cases with negative ULO balances. The utility of purchaser funds is optimized by accounting for activity against individual cases but managing the CCSA account at the country level. If the amount identified for refund exceeds 75% of the total CCSA balance, a refund will not be processed. The funds are retained in the CCSA to mitigate the probability of future CCSA deficits at the total account balance level until the CCSA balance is sufficient to allow for the identified refunds.
188.8.131.52.1. Refunds on Interim Closed Cases. The review for potential refunds occurs on a quarterly basis and refunds are processed prior to the end of the month in February, May, August and November. IAs are required to review proposed refunds on interim closed FMS cases using the Interim Case Closure Refund tool in the Security Cooperation Management Suite (SCMS) and provide recommendations to DSCA (Business Operations Directorate, Financial Policy and Analysis Division). Recommendations must be indicated in the tool by the tenth business day of the month in which interim refunds are scheduled to occur. Otherwise, DSCA will proceed using the proposed refund amounts. DSCA (Business Operations Directorate, Financial Policy and Analysis Division) will provide a list of refunds to DFAS Indianapolis by the fifteenth business day of the month with collaborative input from DSCA (Business Operations Directorate, Country Financial Management Division) and DFAS Indianapolis (Customer Accounting Branch). DFAS Indianapolis will process the required actions to refund the amounts to the appropriate holding account by the last business day of the month. Any unneeded ULO value on the case is refunded by deposit into the appropriate holding account, which includes 7QQ for cash-financed cases, 5QQ for FMS Credit-financed cases, and 2QQ for MAP Merger-financed cases.
184.108.40.206.2. Refunds on Final Closed Cases. The process for reviewing for potential CCSA refunds occurs on a quarterly basis and refunds will be processed before the end of the month in March, June, September, and December. DSCA (Business Operations Directorate, Financial Policy and Analysis Division) will provide a list of refund candidates to the DSCA (Business Operations Directorate, Country Financial Management Division) and DFAS Indianapolis (Customer Accounting Branch) at the beginning of the month in which refunds are scheduled. Input is due by the twelfth business day of the month. Otherwise, DSCA (Business Operations Directorate, Financial Policy and Analysis Division) will proceed using the proposed refund amounts. DSCA (Business Operations Directorate, Financial Policy and Analysis Division) will provide a list of refunds to DFAS Indianapolis by the tenth business day of the month. DFAS Indianapolis will process the required actions to refund the amounts to the appropriate holding account by the last business day of the month. Due to limitations in DIFS, in order to process refunds, the final closure status of the case must be changed to interim status. To prevent the case from being returned to final closed status, DFAS Indianapolis will review the suspended transaction file and remove any transactions that will prevent the case from being returned to final closed status. DFAS Indianapolis is required to ensure the final closure status is reapplied to cases within 30 days after the refund has occurred. Any unused ULO value on the case is refunded by deposit into the appropriate holding account, which includes 7QQ for cash-financed cases, 5QQ for FMS Credit-financed cases, and 2QQ for MAP Merger-financed cases.
C16.4.14. Post-Closure Transactions.
C220.127.116.11. During Interim Closure Status. Once the case has reached interim closure (closure type '2') status, only obligation ('R' series), work in process performance reporting 'ND' and disbursement/EA ('S' series) transactions relating to post-closure charges can process. Refer to RCG Figure A7.C4.F9. All delivery performance ('NA') transactions shall reject during interim closure. ACCP allows charges that exceed the ULO to process programmatically (certain restrictions apply for individual ACCP participating countries). When charges exceed the ULO value assessed at interim closure by $100,000 or more, DSCA (Business Operations Directorate, Financial Policy and Analysis Division) may authorize the case to be reopened in order to process the additional disbursements. Based on the specific transaction, funds may be withdrawn from or deposited into the CCSA.
C18.104.22.168. During Final Closure Status. For processing additional disbursement, obligation and expenditure authority transactions, ACCP cases previously in final closure status (closure type '3'), must revert to interim closure status (closure type '2'). When charges exceed the ULO value assessed at interim closure by $100,000 or more or they will reduce the CCSA balance of the purchaser by more than 75%, the IA shall consult with DSCA (Directorate of Business Operations, Financial Policy and Analysis Division) before moving a case to interim closure status. DSCA will determine if the IA should proceed with the closure type change or if the case should be reopened.
C16.4.15. Interim to Final Closure Processing of ACCP Cases. IAs are required to continually monitor and reconcile interim closed cases to progress them to final closure status as early as possible. The required review process is outlined in RCG Chapter 4.
C16.4.16. Reopening and Reinstating Activity on Cases. Reopening a closed case is performed on an exception basis only. Reinstating activity applies to a case not yet closed, but which is in the financial reconciliation/closure process or, at a minimum, is not currently active from a logistical perspective. Cases may be reopened or reinstated for additional processing, e.g., disbursements or SDRs.
C22.214.171.124. Reopening cases to Reinstate Activity. In general, reopening a case for the purpose of resuming logistical activity is highly discouraged. Normally, either establishing a new case or amending an existing case is preferred. The purchaser (normally, an official with at least LOA signature authority; but higher approving authority may exist) must confirm that reopening the case is the only viable course of action. If the purchaser confirms that reopening is the solution, the IA must send a written request (e-mail) through the IA focal point for case closure, when one exists, to DSCA (Business Operations Directorate, Financial Policy and Analysis Division) for approval. If DSCA (Business Operations Directorate, Financial Policy and Analysis Division) denies the request, the case shall remain closed. If DSCA (Business Operations Directorate, Financial Policy and Analysis Division) approves the request, the IA coordinates with DFAS Indianapolis to reopen the case and also advises the purchaser of reopening criteria (e.g., the timeframe in which activity must resume).
C126.96.36.199. Reopening Cases for Financial Activity. For additional financial processing against ACCP cases, a Direct Final or Final after Interim closed case returns to interim closure status. In this instance, DSCA or purchaser approval is not required. However, if the amount in questions is greater than $100K, DSCA should be consulted as to the impact on the purchaser's CCSA balance. Non-ACCP cases and ACCP cases for purchasers with a ULO threshold of $0.00 must be reopened for valid post-closure financial activity. DSCA (Business Operations Directorate, Financial Policy and Analysis Division) approval must be received before reopening closed case back to implemented status. Requests to reopen a case for financial activity must be in writing (e-mail) and provided by the IA focal point for case closure, when one exists.
C16.4.17. Post Closure SDRs. All case closure types require that any SDRs be finalized prior to submitting a case for closure. (Refer to the SAMM Chapter 6, for detailed policy guidelines on SDRs.) However, while it is rare, SDRs may be received after a case is closed. Post-closure SDRs must be validated and approved by the normal SDR approval authority prior to any further action on the closed case. An SDR received against a closed case is processed as follows:
C188.8.131.52. ACCP Cases. Valid SDRs will be processed against interim closed cases (closure type '2'). A final closed case (closure type '3') will be moved to interim closure status to process a valid SDR unless the purchaser has a $0.00 ULO threshold, which requires a case to be reopened. DIFS accepts only 'ND' and 'S' series transactions during interim closure. Therefore, SDR will be reported using these transaction types. Upon completion of SDR actions, and provided all other inhibitors are cleared, the case should be final closed.
C184.108.40.206. Non-ACCP Cases. Cases must be reopened to process an SDR. Normal processing of the SDR occurs once the case is returned to an "implemented" status. An 'NZ' SDR transaction is processed to report the SDR to DFAS Indianapolis and is recorded in DIFS. Upon completion of the SDR actions, the case should be re-closed.
C220.127.116.11. Reinstating Activity. Reinstatement allows a case that is pending closure to return to previous logistically active status. The process for reinstating activity on cases differs, depending on the status of the case when the reinstatement request is received from the FMS purchaser.
C18.104.22.168.1. If the case is at DFAS Indianapolis for closure, reinstatement is generally discouraged. By this juncture, the case already has been in the closure process for quite some time; for this reason, other alternatives such as using another case must be considered. The purchaser (normally, an official with at least LOA signature authority; but, higher approving authority may exist) must confirm that retraction of the closure certificate is desired. If the purchaser confirms that reinstatement is the solution, the IA must send a written request (e-mail is fine) to DSCA (Business Operations Directorate, Financial Policy and Analysis Division) for approval to cease closure actions and to allow for activity to resume. If DSCA (Business Operations Directorate, Financial Policy and Analysis Division) denies the request, closure actions shall proceed. If DSCA (Business Operations Directorate, Financial Policy and Analysis Division) approves the request, the IA retracts the closure certificate from DIFS. The IA must reverse any delivery performance transactions that established the closure ULO amount. The IA then advises the purchaser of reinstatement criteria (e.g., the timeframe in which activity must resume).
C22.214.171.124.2. If the case is not at DFAS Indianapolis for closure, the IA decides whether to approve the purchaser's request. If the IA denies the request, actions continue to prepare the case for closure. If the IA approves the request, the purchaser is notified accordingly and provided conditions, if appropriate (e.g., the timeframe for resumed activity).
C16.4.18. Closure of Cases with Foreign Military Financing (FMF) Commitments. An FMF-financed case is not considered closed for accounting purposes until the commitment adjustment process is completed. When a case is received into the DIFS CCCI, DFAS Indianapolis verifies the funding source(s) for the case. If FMF (FMS Credit, FMS Credit (non-repayable), and MAP Merger) was reserved for the case, DFAS Indianapolis must coordinate adjustments to the FMF commitments with DSCA (Business Operations Directorate, Country Finance Division).
C16.4.19. Closure of Leases. The authority for leases is contained in the AECA. The administration of leases is delegated to the IA logistically responsible for the defense articles being leased. It is necessary for each IA to ensure that leases under their cognizance are properly closed. A lease cannot be closed until the equipment is returned, all related costs are recovered under FMS procedures (such as costs for restoration), and the lease rental payments are paid in full. If a lease expires and the material is returned or disposed of, but the rental payments have not been paid in full, the lease cannot be closed. The IA must ensure that the lease is financially closed. The IA should work with DFAS Indianapolis and DSCA(Business Operations Directorate, Country Finance Division) to resolve outstanding payments.
C126.96.36.199. The IA is responsible for the following lease closure actions:
C188.8.131.52. Lease closure procedures shall begin at least two quarters prior to the expiration or termination of the lease. Management Flags are generated by DSAMS to the Lease Case Manager prior to the lease expiration date and post-expiration unless the Lease has been closed.
C184.108.40.206. Upon return of the items to USG custody, the IA posts the item Actual Return Date for each Lease Line in DSAMS. The IA is responsible for entering the Actual Return Dates to both the Lease Line window and the Lease Detail window (when all lines have been returned). When all required data has been entered, DSAMS automatically notifies DFAS Indianapolis that the lease is ready for closure. DFAS Indianapolis will reconcile the financial information and close the lease in Defense Integrated Financial System (DIFS) if all rental payments and related costs are collected.
C16.4.20. Case Closure Analysis and Reporting.
C220.127.116.11. FMS Community Fiscal Year Case Certification and Closure Goals and Objectives. To ensure that closure remains an utmost priority and that appropriate resources are allocated, the IAs establish their case certification goals and objectives by analyzing open total/SSC case inventory, the number of cases that became SSC during the past year, available resources, and the number of ACCP cases already greater than, or otherwise becoming, 2 years SSC. Case certification and closure goals should be established that attempt to control the growth and aging of SSC and Interim Closure inventories. Resources should be requested to control growth and aging. The IAs are required to provide both first time closure and interim to final case certification goals to the DSCA (Business Operations Directorate, Financial Policy and Analysis Division) on an annual basis no later than the last business day in October. DFAS Indianapolis is required to provide both first time closure and interim to final case closure goals to the DSCA (Business Operations Directorate, Financial Policy and Analysis Division) on an annual basis no later than the last business day in November.
C18.104.22.168. Case Closure Status Reporting. The DSCA Quarterly Case Closure Status Report tracks closure objectives, actual closure progress during each quarter of a given fiscal year; resource allocations to the closure function, when available; the number of ACC cases not closed after more than two years supply complete; and the number of cases to remain open based on the FMS purchaser's request. This report is prepared by DFAS Indianapolis and the IAs each quarter and provided to the DSCA (Business Operations Directorate, Financial Policy and Analysis Division). DFAS Indianapolis is required to provide data by the 10th of the month following each quarter and the IAs are required to provide their reports by the 25th of the month following the end of each quarter (e.g., due April 25th for the quarter ending March 31st). See RCG Figure A7.C5.F3. for the reporting format.
C22.214.171.124. Performance Measurements. Performance in closing cases is measured at the highest levels within the USG's FMS community. The Security Cooperation Business Forum (SCBF) that meets quarterly is a primary oversight component. The SCBF is chaired by the DSCA Director, and includes senior representatives, such as those from the IAs, DFAS, and the Foreign Procurement Group.
C126.96.36.199. Closure Statistics. DFAS Indianapolis is responsible for providing to the DSCA (Business Operations Directorate, Financial Policy and Analysis Division) case closures statistics at the end of each quarter. DSCA (Business Operations Directorate, Financial Policy and Analysis Division) determines the composition of the statistics.
C188.8.131.52. Case Reconciliation and Closure Community Meetings. DSCA and/or the IAs may conduct periodic meetings to discuss financial policy issues (current, pending and proposed) impacting case reconciliation and closure; reconciliation issues throughout the case execution phase, SSC phase and in preparation for closure; and closure issues. These meetings are usually comprised of individuals from DSCA, the IAs, and DFAS Indianapolis. Other groups may be included as the agenda warrants. The EXCOM may convene in conjunction with these meetings. DSCA is represented in these meetings by the case reconciliation and closure focal point in DSCA (Directorate of Business Operations, Financial Policy and Analysis Division).