Attachment 1: Building Partner Capacity Funds Return Guidance

BPC cases are funded with U.S. appropriations that are only available for obligation and expenditure for specific periods of time. Reference (c) provides a comprehensive listing of program codes and associated expiration and cancellation dates for BPC programs and authorities. These tables may be used to identify the funding lifecycle for specific programs or set of case identifiers. Under the Economy Act (31 U.S.C. 1535), Title 10 funds that DSCA transfers to the IAs that are placed on BPC cases retain the original period of availability identified on the originating appropriation listed in SAMM C15.T2. Transfer of BPC funds into the 9711X8242 no-year account occurs as a result of DSCA transferring the U.S. appropriated funds into the Foreign Military Sales (FMS) Trust Fund as part of the FMS process. The transfer of appropriated funds to the FMS Trust Fund does not exempt the IA from following the fiscal parameters of the originating appropriation. Consistent with the appropriation life cycle, expired funds are no longer available for incurring new obligations, other than upward obligation adjustments as authorized by law, but remain available for liquidating valid obligations. Cancelled funds are not available for any purpose and must be returned to the U.S. Treasury.

Current/Expiring Funds

To ensure funds can be obligated prior to expiration, IAs should review BPC cases for possible residual funding throughout the period of availability. IAs must reconcile BPC cases in accordance with DoD regulations and DSCA policy to ensure that unobligated, residual funds are returned to support any new requirements or emergent priorities prior to funds expiration. IAs must work with the DSCA International Operations Regional Portfolio Director/Program Managers and/or the Country Portfolio Directors, as well as the Financial Policy and Regional Execution Country Financial Directors (CFDs) to ensure that all residual funds are returned promptly to allow for sufficient processing time and reutilization.

Expired Funds

Once funds expire, they are no longer available for new obligations, except upward obligation adjustments as authorized by law. However, the funds remain available for five years to process disbursements, collections, and upward obligation adjustments (refer to the Prior Year Adjustments section). IAs must work with the CFDs to reduce BPC case values to the highest financial requirement in order for the funds to be available for any upward adjustments.

Cancelling Funds

During the final fiscal year of the BPC case funds lifecycle, IAs should review and reduce the value of the BPC case to the highest financial requirement by March 31. To enable the return of funds before cancellation, IAs should, to the greatest extent possible, submit case closure certificates to DFAS by June 30, and no later than July 31 of each year. In the event IAs are unable to close cases prior to July 31of the cancellation year, IAs should use the Alternate Funds Return process as described in this guidance. Alternate Funds Return packages must be submitted to DFAS no later than July 31 of the cancelling year. This should be done in coordination with DFAS and DSCA to reduce unliquidated obligations prior to funds cancellation. IAs can provide closure certificates to DFAS once the IA's systems and Defense Integrated Financial System (DIFS) are in balance. Failure to reduce unliquidated obligations may result in the carryover of cancelled funds into the next fiscal year, which will negatively affect financial reporting for the Security Assistance Account.

DSCA will authorize DFAS to transfer the available balances back to DSCA's financial system prior to funds cancellation. If a valid invoice is received after funds are drawn down in the General Ledger (GL) system(s), but prior to funds cancellation, the IA will notify the DSCA CFDs and DFAS for guidance. Guidance may vary depending on the timing of the request and the status of the case (open/closed).

Cancelled Funds

Cancelled funds cannot be used for any purpose and must be returned to the U.S. Treasury. Failure to return cancelled funds is contrary to DoD regulations and DSCA policy, and increases the likelihood of Anti-Deficiency Act (ADA) violations. For implemented BPC cases with cancelled funds, IAs must submit case closure certificates to DFAS by June 30 of the fiscal year of funds' cancellation to enable the return of cancelled funds. If case closure criteria cannot be met, the IA should utilize the Alternate Funds Return process and submit the Alternate Funds Return package to DFAS no later than July 31. DSCA CFDs will work with DFAS to return cancelled funds to the U.S. Treasury by August 31 of that year. If a valid invoice is received after funds are drawn down in the General Ledger (GL) system(s) after funds cancellation, the IA will notify the DSCA CFDs and DFAS for guidance on how to obtain currently available funding to pay the bill.

Additional Guidance and Information

Alternate Funds Return Process

For any cases that cannot be closed by the BPC appropriation's cancellation date, the IAs should follow the BPC Alternate Funds Return process. These alternate procedures consist of drawing down Obligation Authority (OA) for undelivered orders, unpaid obligations, and/or uncollected reimbursements in the IA's GL system(s) and submitting a DIFS Funds Return Memorandum to DFAS.

DSCA will coordinate with DFAS to return the unliquidated funds to Treasury once IA actions are complete. These deadlines allow time for DFAS and DSCA to take the necessary actions in several non-integrated financial systems to return funds upon cancellation. If funds are required after unliquidated balances have been returned, IAs should seek current year funding from DSCA using Prior Year Adjustment procedures. BPC cases that leverage the Alternate Funds Return Process will remain open until properly reconciled and closed by the IA.

Prior Year Adjustments

As outlined in References (e) and (f), Prior Year Adjustments may be required to resolve funding increases on BPC cases if the appropriation has expired.

Current Year Adjustments

For cancelled funds when a disbursement against a valid obligation is required, the IAs must submit a request for current year funds. If current year appropriations are not available, the IAs should contact the DSCA CFD for further guidance on submitting a request for funds.

Problem Disbursements

Problem Disbursements (PDs) include Unmatched Disbursements, Unmatched Collections, Negative Unliquidated Obligations, and in-transit disbursements. PDs result from errors that occur when the Receiving Activity accounting transactions are sent to the Issuing Activity's accounting system. In accordance with References (a), (b) and (d), the IA and/or DFAS have a total of 120 days to research and correct PDs. When the Issuing Activity and its accounting office are co-located, the research period is limited to 90 days. The DoD categorizes PDs older than 90 days as "over-aged". PDs must be resolved to reconcile and close BPC cases in a timely manner. PDs cannot be matched against cancelled BPC funds. In this case, a current and available appropriation must be used. Refer to the Prior Year Adjustments section for information on resolving these situations.

Unliquidated Obligations

Unliquidated Obligations (ULOs) are undelivered orders, unpaid obligations, and/or uncollected reimbursements. IAs should drawdown OA for ULOs in their GL accounting system(s) when an appropriation cancels, in accordance with reference (a). Most GL systems are programmed to cancel funds automatically at the end of a fiscal year. However, BPC funds that have been transferred into the FMS Trust Fund appear to be "X year" or "no year" funds, precluding most systems from automating the BPC funds drawdown/cancellation process. As a result, IAs should take all appropriate measures to prevent PDs and invoices, received after funds cancellation, from posting against cancelled appropriations. The IAs have the option to de-obligate ULOs in accordance with the attached BPC funds return timeline. Refer to the Problem Disbursement and Prior Year Adjustments sections for more information.

Credits Received After Funds Cancellation

If a credit is received after funds cancellation, the IA will contact DSCA to request the case be re-opened. Once the credit transaction processes, the IA will reconcile and re-close the case. Funds returned after cancellation due to a credit will be returned by DSCA to the U.S. Treasury. Only credit transactions are allowed to process. Net transactions with both debits and credits cannot be posted. IAs must follow the Prior Year Adjustments process for any debit transactions. IAs have the option of contacting DFAS Security Cooperation Accounting (SCA) to process credit transactions and return cancelled funds to the U.S. Treasury without reopening the case.

Transportation Accounts

Residual funds in the unique DSCA FMS Transportation Cost Clearing Accounts will be returned to the U.S. Treasury upon cancellation of the funds, based on the last fiscal year of the appropriation (i.e., ISFF, 1206, etc.), reference (g). Refer to the Prior Year Adjustments section for information on resolving issues where invoices are received after a BPC program's appropriation expires.

Attachment 2: Security Assistance Management Manual (SAMM), E-Change 525
BPC Funds Return Guidance

1. Update C15.6.5.2. Reopening a Closed Case to read as follows:

   CURRENT:

   C15.6.5.2. Reopening a Closed Case. It will be necessary for an IA to reopen a BPC case once closed if there is financial activity that impacts the closed case. Should this occur, the IA will send a request to reopen the case, with sufficient justification, to DSCA DBO FPA for review and approval.

   REVISED:

   C15.6.5.2. Reopening a Closed Case. It will be necessary for an Implementing Agency (IA) to reopen a Building Partner Capacity (BPC) case once closed if there is financial activity that impacts the closed case. Should this occur, the IA will send a request to reopen the case, with sufficient justification, to DSCA (Office of Business Operations, Financial Policy & Regional Execution Directorate, Financial Policy Division (OBO/FPRE/FP)) for review and approval to either apply a credit or use current year funds to liquidate an outstanding obligation. IAs have the option of contacting Defense Finance and Accounting Service, Security Cooperation Accounting (DFAS (SCA)) to process credit transactions to return those funds to the U.S. Treasury without reopening the case.

2. Update C16.4.8. Case Closure Certificate to read as follows:

   CURRENT:

   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 (dfas-in-sca-ccci@dfas.mil).

   REVISED:

   C16.4.8. Case Closure Certificate. The IA ensures the case closure certificate and any other necessary supporting documentation (e.g. Unliquidated Obligation (ULO) closure information for Accelerated Case Closure Procedure (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 (dfas.indianapolis-in.jax.mbx.dfas-in-sca-ccci@mail.mil).

Attachment 3: Building Partner Capacity Funds Return Timeline

Consolidated View

IA View

DSCA View

Consolidated View