Financial Management Flashcards
Budget Authority
Spending limit provided by Congress
Commmitment
Administrative reservation of funds by the local comptroller, in anticipation of future obligations
Obligation
Legal reservation of funds to make a future payment of money. Created when the local Procuring Contracting Officer (PCO) signs a contract
Expenditure
Charge against available funds, resulting from a voucher, claim, or other document approved by a competent authority.
Outlay
Vendor cashes the expenditure check and money flows from the Treasury to vendor or supplier
Defense-wide appropriation categories
Research, Development, Test, and Evaluation (RDT&E), Procurement, Operation and Maintenance (O&M), Military Personnel (MILPERS), Military Construction (MILCON)
RDT&E appropriation category
Funds the efforts performed by contractors and gov’t activities required for R&D of equipment, material, and computer application software.
Also funds dedicated R&D installation activities
Efforts performed by test ranges
other test facilities for testing and evaluation activities
Obligation period of 2 years
MILPERS
Funds pay allowances of active duty and reserve personnel
Funds PCS moves
Training in conjunction with PCS moves
Funds Subsistence
Funds Bonuses
Funds Retired pay accrual
Obligation period of 1 year
Operations and Maintenance
Funds Day-to-day operations
funds minor construction
funds headquarters operations
funds training and education
funds civilian salaries
funds expenses of operational military forces
funds travel
funds base operations support
Funds fuel
Funds recruiting
Obligation Period of 1 year
MILCON
Funds bases
Funds schools
Funds missile storage facilities
Funds maintenance facilities
funds medical/dental clinics
funds libraries
funds mil family housing
has an obligation period of 5 years
Procurement
Funds acquisition programs that have been approved for production, including acquisition objective quantities, and all costs integral and necessary to deliver a useful end item for intended operational use or inventory upon delivery including defense systems, major modifications to fielded systems.
Has an obligation period of 3 years.
Life Cycle Cost
defined as the cost to the gov’t of acquisition and sustainment of a system over its useful life, including R&D, testing, production, facilities, operations, maintenance, personnel, environmental compliance, and disposal
Life Cycle Cost Estimate (LCCE)
estimated cost of developing, producing, deploying, maintaining, operating and disposing of a system over its entire lifespan
Cost Estimating Techniques used to develop an LCC
Analogy, parametric, engineering, actual costs
What is the LCC scoped around?
Appropriation categories, LCCE, Work Breakdown Structure (WBS)
Analogy method of cost estimating
used in early life of the program
used during MSA, TMRR, or early EMD
Compares a new system with one more existing, similar systems for which there is accurate cost and technical data
Parametric method of cost estimating
performed during TMRR or early in EMD
generates an estimate based on system performance or design characteristics
uses a database of elements from similar systems
uses multiple systems and makes statistical inferences about the cost estimating relationships (CER)
Engineering method of cost estimating
used toward later stages of EMD, when the detailed designs exist for the system
Most detailed of all the techniques, and costliest to implement
Actual costs method of cost estimating
used in later phases of MCA, most often P&D. Employs an extrapolation from actual costs that were contracted for or actually incurred on that system during an earlier period
Most accurate method to use when data are available.
Reprogramming
method to make limite
Reprogramming if dollar values are above thresholds
Need Congressional Prior Approval or Internal Reprogramming
Reprogramming for Below Threshold Reprogramming (BTR)
allows limited transfer of Budget Authority among programs WITHIN an appropriation category.
Controlled and approved by local or service/defense agency comptrollers
does not require Congressional involvement
