Chapter 14, Security Assistance (SA) Forecasting, Planning, Programming, Budgeting, and Execution (PPBE), and Audit, provides guidelines for the PPBE and audit of the DSCA Foreign Military Sales (FMS) Administrative funds, Foreign Military Financing (FMF) Administrative funds, and Contract Administration Services (CAS) funds. DoD Security Cooperation (SC) programs that are established, authorized, and funded through appropriated funds are managed through a separate DoD PPBE process.

C14.1.1. For those Title 22 funds under DoD authority, DSCA manages Title 22 Foreign Military Sales (FMS) and Foreign Military Financing (FMF) forecasting, Planning, Programming, Budgeting, and Execution (PPBE), and audit processes. Title 22 administrative funds include FMS Administrative funds, FMF Administrative funds, and Contract Administration Services (CAS) funds. FMS Administrative and CAS funds are administrative surcharges collected by the USG from the sale of U.S. defense articles and defense services to foreign partners through the FMS program. FMF Administrative funds are appropriated annual funds to the Department of State (State).

C14.1.2. DSCA allocates FMS and FMF Administrative funds to U.S. Implementing Agencies (IAs), geographic Combatant Commands (CCMDs), Defense Agencies, Defense Finance and Accounting Service (DFAS), and DSCA (collectively, the Security Assistance (SA) community in this chapter) commensurate with their requirements to manage FMS and FMF programs. The annual allocation process includes forecasting two-year demand through the FMS Forecast process for FMS case implementation, soliciting IA budget requests and supporting documentation, validating requests for funds, and finalizing the upcoming fiscal year (FY) budget.

C14.1.3. DSCA (Office of International Operations, Weapons Directorate (IOPS/WPN)) performs the sales forecast in concert with DSCA’s (Office of Business Operations, Comptroller Directorate (OBO/CMP)) SA Program and Budget Review (SAPBR) process. All DSCA-administered funds are managed to comply with DSCA (OBO/CMP) guidance, as well as Government Accountability Office (GAO) and DoD Inspector General (DoDIG) audits on Security Cooperation (SC) programs. To ensure compliance with financial procedures, DSCA (OBO/CMP) and DSCA (Office of Administration, Performance, Improvement, and Effectiveness Directorate (ADM/PIE)) manage DSCA’s participation in financial audits, SA process, entity level control risk assessments, and performance audits. Only Security Assistance Account (SAA)-related audits are covered in this chapter, which is overseen by DSCA (OBO/CMP). Questions regarding DSCA participation in GAO or DoDIG audits and entity level control risk assessments should be referred to DSCA’s audit liaison or risk management and internal controls lead in DSCA (ADM/PIE).

C14.2.1. DSCA synchronizes global Security Cooperation (SC) programs through the issuance of effective policy, processes, training, and financial management guidance necessary to execute within the DoD. DSCA (Office of Business Operations, Comptroller Directorate (OBO/CMP)) issues process guidance and provides oversight for Planning, Programming, Budget, and Execution (PPBE) of all Security Assistance (SA) programs. DSCA (OBO/CMP) conducts a Security Assistance Program and Budget Review (SAPBR) annually to align Foreign Military Sales (FMS), Foreign Military Financing (FMF), and Contract Administration Services (CAS) resources to meet the SA mission.

C14.2.2. The SAPBR process is the annual Program Budget Review for FMS Administrative, FMF Administrative, and CAS-funded activities. The SAPBR process also includes the PPBE of Representational (REP) authorities in accordance with Section 21(e)(1)(A) of the Arms Export Control Act (AECA), as amended (22 U.S.C. 2761(e)(1)(A)) and Section 43(c) of the AECA, as amended (22 U.S.C. 2792(c)). The REP authorities are managed centrally within DSCA (OBO/CMP). Funding is not provided to organizations that formulate U.S. SC policy such as the Department of State (State), the Office of the Under Secretary of Defense for Policy (OUSD(P)), or the Joint Staff (JS).

C14.2.3. Security Assistance Program and Budget Review Planning Guidance. Approximately February of each year, the DSCA Director issues SAPBR Planning Guidance, which highlights several areas of the DSCA Director’s financial focus and process improvements and provides the overall SAPBR schedule. Additionally, the planning guidance provides the initial annual budget targets for the SA community’s FMS Administrative, FMF Administrative, CAS, and REP authority.

C14.2.4. Security Assistance Program and Budget Review Detailed Guidance. Approximately March of each year, DSCA (OBO/CMP) issues SAPBR Detailed Guidance providing the expectations of the SAPBR cycle, where and how to submit object class level details, inflation guidance, business rules, budget schedule, and other associated requirements. The document contains varying addenda associated to data calls pertinent for the budget year. Each year, supplemental information requests are subject to change. Examples include Full Time Equivalent reporting specifications, SAPBR Information Technology Data submission protocol, Above Fiscal Guidance (AFG) formats, and budget briefing templates, and addenda.

C14.2.5. Security Assistance Program and Budget Review Submissions. Based on the published guidance, the SA community conducts programming and budgeting activities as required to price and align resources to the budget targets provided in the planning guidance. The submission describes, in detail, the proposed funding requirements for the next year and provides justification and prioritization for all requirements. The SA community submits consolidated budget estimates to DSCA (OBO/CMP) through the Comprehensive Cost and Requirements System online budget database. All requirements included in their submissions must align to the planning guidance issued by the DSCA Director.

C14.2.5.1. Above Fiscal Guidance Request. The SA community is allowed, as specified in the detailed guidance, to submit AFG requests for requirements above the budget targets provided in the planning guidance. All AFGs are to be prioritized and justified with their submission. DSCA (OBO/CMP) presents all AFGs to the DSCA Director for decision.

C14.2.5.2. Security Assistance Program and Budget Review Briefings to DSCA (OBO/CMP). The Military Department (MILDEP) Implementing Agencies (IAs) (Deputy Assistant Secretary of the Army for Defense Exports and Cooperation (DASA (DE&C)), Navy International Programs Office (NIPO), and Deputy Under Secretary of the Air Force for International Affairs (SAF/IA)) will coordinate with DSCA to schedule leadership level informational briefings to DSCA (OBO/CMP) on their submissions. The Defense Agencies and geographic Combatant Commands (CCMDs) will brief the DSCA (OBO/CMP) Deputy Comptroller, SA. The goal of the Comptroller-level briefings is to review information and propose substantial revisions in preparation for the MILDEP IAs’ briefs to the DSCA Director. These briefings are non-decisional.

C14.2.5.3. Security Assistance Program and Budget Review Briefings to the DSCA Director. During the budgeting phase, the MILDEP IAs will provide an informational briefing to the DSCA Director. The purpose of this brief is to inform the Director of challenges faced by the MILDEP IAs who comprise the majority of the SA workforce and mission. These briefings are non-decisional.

C14.2.6. Security Assistance Program and Budget Review Program Review and Analysis. DSCA (OBO/CMP) budget analysts collect the submissions from the SA community and conduct a comprehensive review and analysis of each of the submissions. DSCA (OBO/CMP) coordinates the submissions throughout DSCA to ensure the SA mission is fully supported by the requirements requested. DSCA (OBO/CMP) prepares a budget for the DSCA Director’s decision. The budget includes proposed decision recommendations on all requests including AFGs submitted by the SA community, as well as responses to all areas of focus and process improvements outlined in the planning and detailed guidance. While the budget is a consolidation of all submissions, each SA community (IA, CCMD, etc.) budget will be presented in sufficient detail to enable visibility of resource and requirement alignment.

C14.2.7. Security Assistance Program and Budget Review Decisions. The DSCA Director’s decisions are the foundation of the Resource Management Decisions (RMDs). These determinations shape the total budget authority amount to be requested by DSCA for FMS Administrative, FMF Administrative, and CAS funding.

C14.2.7.1. Draft Resource Management Decision. Based on the briefings and decisions identified in the SAPBR Submissions and Program Review and Analysis sections, the DSCA Director will indicate the draft approval or disapproval for each AFG and resulting topline. The DSCA (OBO/CMP) develops and publishes a draft RMD to the SA community. The draft RMD provides the DSCA Director’s decision on top lines for each IA and geographic CCMD, and decisions on the AFGs submitted.

C14.2.7.2. Reclama Period. Upon receipt of the draft RMD, the SA community may reclama these decisions if new or updated information has become available since the initial submission. The period to submit a reclama to DSCA is three business days from the receipt of the draft RMD. In the event DSCA receives a reclama to a draft decision, the DSCA (OBO/CMP) budget analyst reviews the additional information and presents a final recommendation to the DSCA Director for decision. The Director’s decisions are documented in the final RMD.

C14.2.7.3. Final Resource Management Decision. The DSCA Director signs the final RMD, thereby approving the final budget position for presentation to the Office of Management and Budget (OMB) for inclusion in the President’s Budget (PB). The final RMD includes the official baseline for use in developing annual execution and monthly obligation plans. Each recipient of FMS Administrative, FMF Administrative, and CAS funds develops internal controls and procedures to effectively and efficiently implement and execute those funds. The DSCA Director releases the final RMD in September of each year providing the decisions for that SAPBR cycle.

C14.2.8. Office of Management and Budget Presentation. The DSCA (OBO/CMP) meets annually with OMB, typically in October, to discuss prior, current, and future fiscal year (FY) budgets for FMS Administrative funds. The goal of the OMB presentation is to provide information and justification for the PB request, as well as other matters pertinent to the PB submission. DSCA completes and returns its component of the PB Submission through formal PB galleys and the OMB MAX Budget Information System. OMB communicates the approved FMS Administrative budget target via the OMB passback process.

C14.2.9. Department of State Presentation. The DSCA (OBO/CMP) meets annually with State in mid-October to provide detailed information to support DoD’s FMF Administrative fund requirements. The goal of the meeting is to provide justification for the State’s submission of the PB request.

C14.3.1. Annual Funding Plan. Each fiscal year (FY), the DSCA (Office of Business Operations, Comptroller Directorate (OBO/CMP)) Deputy Comptroller, Security Assistance (SA) issues the Annual Funding Plan (AFP) guidance for the SA programs. This guidance provides final resource management decisions, as developed under the Security Assistance Program and Budget Review (SAPBR) process (see Section C14.2.). Funding allocations identified in this guidance either total to the annual enacted appropriation or, if the FY begins under a Continuing Resolution (CR), the amount reflected in the President’s Budget (PB) for each respective funding type.

C14.3.2. Mid-Year Review Guidance. Each FY, the DSCA (OBO/CMP) Deputy Comptroller SA issues Mid-Year Review (MYR) guidance for the SA programs. This guidance requires the Security Cooperation (SC) community to evaluate current and projected execution to ensure resources are being utilized in an efficient and effective manner. To facilitate the review, the SA community must provide a mid-year funding brief to the DSCA (OBO/CMP) Comptroller, SA. The MYR culminates with a brief to the DSCA Director by the DSCA (OBO/CMP) staff.

C14.3.3. Unfunded Requirement Request. The SA community is allowed, as specified in the MYR guidance, to submit Unfunded Requirement (UFR) requests for requirements above the budget targets provided in the AFP. All UFRs are to be prioritized and must include sufficient justification for each submission. DSCA (OBO/CMP) presents all UFRs to DSCA Chief Financial Officer (CFO) and/or DSCA Director for decision.

C14.3.4. Close Out Guidance. Each FY, the DSCA (OBO/CMP) Deputy Comptroller, SA issues Year End Close (YEC) guidance memorandums to the SA community. Each memorandum provides guidance on YEC for execution activities, including key milestones, transaction monitoring (e.g., Unmatched Disbursements, Unliquidated Obligations, etc.), and Points of Contact (POC) for each type of funding or authority. The YEC culminates with a brief to the DSCA Director by the DSCA (OBO/CMP) staff.

C14.4.1. DSCA (Office of International Operations, Weapons Directorate (IOPS/WPNS)) leads annual development of the Foreign Military Sales (FMS) Forecast process. This FMS Forecast process is the USG’s two-fiscal year (FY), forward-looking demand assessment of all FMS, Foreign Military Financing (FMF), and other USG-to-foreign government transfers from which an FMS Administrative Surcharge is collected. The FMS Forecast 1) informs DSCA’s budgetary planning requirements that it submits to the Office of Management and Budget (OMB) and 2) it partially informs the annual Javits Report that the Department of State (State) submits to Congress in accordance with section 25(a) of the Arms Export Control Act (AECA) (22 U.S.C. 2765(a)).

C14.4.2. Foreign Military Sales Forecast Report. Annually, DSCA (IOPS/WPNS) prepares an estimate of the total dollar amount of FMS cases anticipated to be offered to FMS purchasers within the upcoming two FYs. This report is USG Controlled Unclassified Information (CUI) and may not be distributed outside of the USG.

C14.4.2.1. Foreign Military Sales Forecast Process. In February of each year, DSCA (IOPS/WPNS) issues guidance to the geographic Combatant Commands (CCMDs) requesting each Security Cooperation Organization (SCO) provide a list of projected USG-to-foreign government transactions for which an FMS Administrative Surcharge will be collected within the upcoming two USG FYs. The geographic CCMDs provide DSCA with aggregated input from the SCOs in their Area of Responsibility (AOR). DSCA (IOPS/WPNS) leads the review and further refinement of the information with internal DSCA and other DoD stakeholders. The results of this comprehensive analysis form the basis of the FMS Forecast. Upon approval by the DSCA Director, the FMS Forecast becomes the official FMS Forecast that is distributed to relevant stakeholders within DoD. See Table C14.T2. for information on the process.

C14.4.3. Javits Report. By the first of February each year, Department of State, Bureau of Political and Military Affairs (State (PM)) prepares and transmits the annual Javits Report to Congress to highlight proposed arms sales expected for offer within the calendar year. This report includes anticipated FMS and Direct Commercial Sales (DCS) of major weapons and weapons-related defense equipment that meets or exceeds $7 million, or of any other weapons or weapons-related defense equipment that meets or exceeds $25 million and are considered eligible for Congressional Notification (CN) and approval. State is not required to include anticipated sales that have already been notified to Congress.

C14.4.3.1. Javits Report Process. By December of each year, State solicits from DSCA (IOPS/WPNS) a populated list of anticipated FMS transactions that meet the Javits Report criteria. This list may include a combination of new information and information extracted from the official FMS Forecast. State’s Directorate for Defense Trade Controls (DDTC) populate the potential DCS transactions. Individual country information is unclassified, unless under exceptional circumstances in which an FMS purchaser’s request is classified. See Chapter 4 on classification of Security Cooperation (SC) information. The final Javits Report is classified.

C14.5.1. DSCA’s responsibility for synchronizing Security Assistance (SA) financial management guidance within the DoD includes the requirement for the SA community to follow the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) Standard Financial Information Structure (SFIS). The SFIS is a comprehensive data structure that supports requirements for budgeting, financial accounting, cost and performance, and external reporting across the DoD enterprise. The OUSD(C) policy memo “Standard Financial Information Structure (SFIS) Implementation Policy,” dated August 4, 2005, requires that systems containing financial information possess the ability to capture and transmit the SFIS data or demonstrate a cross-walking capability to the SFIS format.

C14.5.2. Requirement of the Standard Financial Information Structure. Implementing Agencies (IAs) are required to capture all financial transactions and reporting for SA Accounts in SFIS compliant systems.

C14.5.3. Reimbursable Agreements. IAs are required to include SFIS elements to provide sufficient supporting documentation to support billed amounts for all Reimbursable Work Order (RWO) transactions, including payroll transactions. The IAs are required to include sufficient details to support billings, facilitate DSCA monitoring efforts, and support financial reporting. All RWO transactions should include SFIS element B6 - Object Class in the Line of Accounting.

C14.6.1. Defense Security Cooperation Agency Audit Responsibilities. DSCA (Office of Administration, Performance, Improvement, and Effectiveness Directorate (ADM/PIE)) oversees DSCA’s response to and compliance with all Government Accountability Office (GAO), DoD Inspector General (DoDIG), and other audit organizations that publish reports related to DSCA or Security Cooperation (SC) programs. DSCA (Office of Business Operations (OBO)) leads DoD and Security Assistance Account (SAA) Financial Statement Audit related activities. The information in this chapter only applies to the DSCA (OBO) Financial Statement Audit-related activities. Refer questions regarding DSCA participation in GAO or DoDIG audits to DSCA (ADM/PIE) audit liaison at dsca.ncr.cpo.mbx.dsca-audit@mail.mil.

C14.6.2. Financial Statement Audits. The Chief Financial Officer (CFO) Act of 1990 (P.L. 101-576) requires federal agencies prepare financial statements and have those financial statements audited by the agency’s Inspector General or by an independent external auditor, as determined by the agency’s Inspector General. The National Defense Authorization Act (NDAA) Fiscal Year (FY) 2010 (P.L. 111-84) required the DoD to undergo annual financial statement audits beginning in FY 2017. As a result of the NDAA, DSCA is responsible for two separate financial statements: (1) the DSCA Title 10 financial statements, which are consolidated into the DoD-wide financial statement; and (2) the SAA financial statement, which is reported directly to the Department of Treasury. The Department of Treasury identified the SAA as material to USG financial statements in 2017, requiring DSCA to submit audited financial statements on an annual basis. The first of these annual full financial statement audits for the SAA began in FY 2022.

C14.6.2.1. Security Assistance Account Audit Governance Structure. DSCA and the Implementing Agencies (IAs) follow a three-tiered governance structure to facilitate communication and information flow between tiers on SAA audit readiness challenges and solutions. The three tiers include the SAA Governance (Senior Executive Service (SES) Level), the SA Audit Readiness Board (SA/ARB) (GS-14/15 Level), and IA-level working groups. The structure is set up with IAs’ audit leaders, SAA subject matter experts, and audit subject matter experts to leverage existing audit infrastructure for SAA funds.

C14.6.2.1.1. Tier 1. Tier 1 operates under the authority of the DSCA Director who serves as the Chair. This body is comprised of the senior Military Department (MILDEP) IAs’ leadership representing Foreign Military Sales (FMS) operations and is supported by the Defense Finance and Accounting Service (DFAS) Deputy Director for Operations. Additionally, a supporting Tier 1 audit group, the Senior Executive Steering Group (SESG) was established by the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) in FY 2020 as an SES-level SAA audit advisory group chaired by the DSCA CFO.

C14.6.2.1.2. Tier 2. The DSCA (OBO) Comptroller is the Chairperson of the SA/ARB. This GS-15-level board is responsible for providing informational reports of Tier 1 findings and decisions to Tier 3. Board Members include two representatives from each IA, one for audit support and one for SAA Operations. Additionally, the Board includes two representatives from Defense Finance and Accounting Services - Indianapolis (DFAS-IN), the Security Cooperation Accounting Director and the Audit Support Lead. In 2021, OUSD(C) Financial Improvement and Audit Remediation (FIAR) office was designated as a voting member to the Board as well, with two representatives.

C14.6.2.1.3. Tier 3. The IA-Level Working Groups meet on an ad hoc basis to support the requirements of the Tier 2 SA/ARB. Tier 2 leads from the IAs, representing SAA operations and audit support functions, conduct ad hoc sessions, provide materials, and solicit participation from additional stakeholders within the IAs. Additional stakeholder participation is encouraged as needed, e.g., DFAS support, and can be coordinated through Tier 2 representatives, the Chair, and technical representatives.

C14.6.2.2. Financial Statement Audit Roles and Responsibilities. DFAS, as DSCA’s finance and accounting service provider, is responsible for consolidating and providing the required financial statements to DSCA. DSCA is responsible for reviewing and approving the financial statements. DSCA is also responsible for submitting trial balances, which is a summary of balances in all general ledger accounts, to Defense Departmental Reporting System (DDRS) on a monthly basis to report fund receipt and distribution activity, and any fund execution activity at the DSCA level. The IAs and geographic Combatant Commands (CCMDs) are responsible for submitting trial balances monthly to DDRS to report all execution activity for SAA funds received from DSCA. DSCA has overall oversight and management responsibility of financial statement audits and examinations, and acts as a liaison between auditors and DSCA Offices, DFAS, the IAs, and geographic CCMDs for all parts of the audit including: Entrance and Exit Conferences, reviews provided by client managers, and coordination of key work products. DSCA funds the community for SAA audit remediation activities through the annual SA Program and Budget Review (SAPBR) process, and as such, the entire SA community is required to fully participate in audit and audit remediation activities.

C14.6.2.3. Security Assistance Account Financial Audit Procedures. The DSCA (Office of Business Operations, Comptroller Directorate, Financial Audits and Systems Division (OBO/CMP/FAS)) Audit Response Team receives, reviews, and assigns audit requests from the auditors. Groups assigned to audit requests are responsible for asking clarifying questions as necessary, providing applicable documentation, and submitting materials by the requested due date. DSCA (OBO/CMP/FAS) Audit Response Team serves as the liaison between the auditors and functional DSCA representatives.

C14.6.2.3.1. Upon receipt of an audit request, the DSCA (ADM/PIE) Audit Liaison Officer reviews the audit request and appoints a DSCA Primary Action Officer (PAO) or a Collateral Action Officer (CAO). The PAO and CAO are responsible for preparing and coordinating DSCA responses to the audit or report. The DSCA (ADM/PIE) Audit Liaison Officer alerts the appropriate organizations of any significant issues associated with the audit. DSCA is committed to a fully open and transparent process in which DSCA staff works with the auditors to ensure the requests for information and questions are answered in a timely manner.

C14.6.2.3.2. Entrance Conference. Entrance Conferences are conducted as soon as practical between DSCA, DFAS, the IAs (that execute the funds under audit), and the auditor/DoDIG. The final Entrance Conference presentation includes inputs from both DSCA and the auditor. The DSCA (OBO/CMP/FAS) Audit Response Team schedules the Entrance Conference meeting and coordinates invitation distribution to make sure that applicable parties are included.

C14.6.2.3.3. Exit Conferences. During Exit Conferences, auditors present proposed findings and draft reports to all groups involved in the engagement (e.g., DSCA, DFAS, and IAs). Similar to the Entrance Conference, the DSCA (OBO/CMP/FAS) Audit Response Team schedules the meeting.

C14.6.2.3.4. Audit Findings and Recommendations. Once audit findings, known as Notice of Finding and Recommendation (NFR), are issued, the DSCA (OBO/CMP/FAS) Audit Response Team develops a plan to address the NFRs. This includes creating a schedule to identify and finalize responsible parties to develop Corrective Action Plans (CAPs). Once identified, CAP owners are responsible for creating actionable, measurable milestone steps with corresponding dates to address NFRs. Once CAPs are created and implemented, the DSCA (OBO/CMP/FAS) Validation Teams reviews the CAP and applicable documents evidencing milestone completion to verify that the CAP remediates the NFR.

C14.7.1. The Security Assistance (SA) community is required to follow the Office of the Under Secretary of Defense (Comptroller)’s (OUSD(C)’s) policy memo “Dormant Account Review-Quarterly,” dated August 20, 2019, which mandated that the Dormant Account Review – Quarterly (DAR-Q) process supersede the Triannual Review process. DAR-Q is required for DoD Components executing Title 22 SA funds. This change was implemented to demonstrate the DoD's commitment to effective stewardship of financial resources through improved execution of budgetary resources, including timely reconciliation and closure of Foreign Military Sales (FMS)-related financial transactions. The DAR-Q policy serves as a quality control mechanism, holding each DoD component accountable to review dormant financial transactions and implement timely corrective action as needed. Balances are defined as dormant if they have not been liquidated and no obligations, adjustments, contract modifications, disbursements, or withdrawals occur within the 90-day dormancy period.

C14.7.2. Foreign Military Sales Case Reconciliation. The DAR-Q process leverages existing internal control practices to assess whether commitments and obligations recorded are bona fide needs of the appropriations charged. Funds holders, with assistance from supporting accounting offices, must review financial dormant transactions for timeliness, accuracy, and completeness during each DAR-Q review period ending March, June, September, and December. The DAR-Q process is a tool to effectively support the case manager's case management, reconciliation and closure responsibilities. Refer to DoD Financial Management Regulation (DoD FMR), Volume 3, Chapter 8 and DSCA (Office of Business Operations, Comptroller Directorate (OBO/CMP)) for additional policy information on the DAR-Q process.

C14.8.1. Legal Contingencies. DSCA (Front Office, Office of the General Counsel (FO/OGC)), in coordination with DSCA (Office of Business Operations (OBO)), conducts data calls to ascertain the existence of litigation, claims, and assessments affecting the Security Assistance Accounts (SAAs). The DoD Financial Management Regulation (DoD FMR), Volume 4, Chapter 12, Accounting Policy, provides guidance on assessing the likelihood of adverse outcomes for legal cases. Any such litigation, claims, or assessments are recorded and/or disclosed in the SAAs’ financial statements and related footnotes.

C14.8.1.1. DSCA submits interim and final SAA financial statements each August and November, respectively, to the Department of Treasury. In approximately July and October of each year, DSCA (FO/OGC) issues data calls to all Implementing Agencies (IAs) and other USG organizations that may be involved in threatened or pending litigation affecting the SAAs, requesting that such organizations report any litigation, claims, and assessments meeting the materiality threshold where a negative judgment would be paid, either in full or in part, from funds within the SAAs. Additionally, DSCA (FO/OGC) will issue subsequent data calls as necessary for the IAs and other USG organizations to confirm whether there were any changes to the previously reported information.

C14.8.2. Contingent Liability Assessments. DSCA (Office of Business Operations, Accounting and Reporting (OBO/A&R)) issues data calls in approximately April and October of each year to the IAs and DSCA offices to assess the SAAs and determine if there are any contingent liabilities that could be potentially recognized or disclosed in the SAA financial statements. Contingent liabilities under this assessment can include treaties and other international agreements, warranties related to Foreign Military Sales (FMS), and other items determined by DSCA.

C14.8.2.1. While DSCA (OBO/A&R) coordinates on legal contingent liabilities and contingent liabilities related to future contract financing payments to recognize and disclose them in the SAAs' financial statements, DSCA (FO/OGC) and Defense Finance and Accounting Services (DFAS) respectively leads those assessments.