Disbursing Procedures in Defense Finance

Disbursing Procedures

• Authority for Disbursing Officials: Title 31, United States Code (U.S.C.) allows the Secretary of Defense to designate disbursing officials for the Department of Defense (DoD).
• Treasury Reports: Title 31 U.S.C. details the Secretary of the Treasury's role in preparing reports for the President, Congress, and public about the U.S. Government's financial operations.
• Navy Cash System Tools: The navy cash financial system uses an Automated Password Change Tool to ease routine administrative password changes.
• Official Funds Disbursement: Official funds are disbursed by order of the commanding officer, except when a superior directs otherwise in the chain of command.
• Budget Clearing Account Number: The account number for budget clearing accounts is F3875.
• Disbursing Official Authority: 31 U.S.C. § 3321 authorizes disbursing officials to disburse funds on properly certified vouchers from 31 U.S.C. § 3325.
• Establishing Disbursing Offices: A memorandum (DFAS-IN) facilitates the establishment of disbursing offices at new activities or those receiving external disbursing services.

Additional Procedures

• Nearest Depositary: The name and location of the nearest Federal Reserve Bank (FRB) or branch, and its distance from the proposed disbursing office, should be provided.
• Commander's Endorsement: The official establishing a disbursing office indicates concurrence and provides additional information as required by the approving commander.
• Taxable Payments: Disbursing officials should ensure payments to entitled activities, securely adhering to taxable income or income and withholdings.
• Employer Identification: The Employer Identification Number (EIN) supports verifying payment transactions for income or income withholdings.
• Office Notification: The DO activating a disbursing office notifies DFAS-IN via memorandum upon starting operations within Fiscal Service and Check Reconciliation department.
• Accountable Official Appointment: (DD) Form 577 is used to appoint accountable officials.
• Specimen Signatures: A copy of DD Form 577 along with the required original specimen signature needs to be maintained by the issuing office in the files.
• Appointment Termination: Section IV of the DD Form 577 is used to terminate appointments.
• Disbursing Office Activation/Reactivation: A memorandum outlining the name of the activity, relieved DO (if applicable), and DSSN needs to be prepared immediately upon commencement for a new or reactivated office.
• Accountability Transfer: Standard Form (SF) 1219 validates and documents outgoing and incoming DO accountability transfer.
• Month-End Check Issue Summary: SF 1179, signed by the incoming DO, is used to summarize month-end check issue summaries.
• Signature Medium: Incoming DOs need to provide official signature specimens if they do not have a signature medium.
• Death/Incapacity/Removal of DO: When a DO becomes incapacitated or removed from duty, a DDO may continue disbursing until the last day of the following month.

Financial Transactions

• Acting DO: The Acting DO is accountable for all official duties requiring a DO in the former DO's name.
• Medical Facility Funds: Collection agents receive funds from medical facilities' functions, such as fees or charges.
• Currency, Coin, and Instruments Deposit: Currency, coin, negotiable instruments, and LDA balances are deposited to the credit of Treasury.
• Blank Check Destruction Report: Blank check stock is destroyed, reporting on SF 1179.
• Negotiable Instrument Form: Journal vouchers (OF 1017-G) record the receipts of negotiable instruments
• Agent Receipts of Funds: When funds are deposited with agents, they complete the DD 1131 receipt with original and three copies of the form.
• Collection Officer Receipts: Two copies of DD form 1131 (other than the original) are provided to the collecting officer of the funds.
• Voucher Control Log: Daily maintenance and records of the DD 2659 voucher control log.
• Payee Overpayments: $1.00 or less overpayment should be collected by a 1099 account (Fines, Penalties, and Forfeitures).
• Underpayments: An SF 1080 form should be used for underpayments less than $1.00 to transfer amounts between appropriations or funds
• Canceled Treasury Check Proceeds: SF 1098 is used to collect proceeds from canceled Treasury checks.
• Deposit Record of Negotiable Instruments: Negotiable instruments received are documented on Form OF 1017-G, Journal Voucher
• Funds Reports: DD2665 reports the total DO accountability to the Treasury.

Additional Responsibilities

• Records Transfer: When a disbursing officer (DO) is transferred, a memorandum, including the relieving officer's name and rank, is created. All disbursing office records are sent to the designated office.
• Inventory of the check stock: The inventory of the check must be done every 90 days.
• Notification in the case of Loss: When blank checks are lost or stolen, the DO or DDO must notify the Commander of the United States Secret Service and the Fiscal Service immediately.
• Payment Limits: No check may exceed $99,999,999.99.
• Check Stock Levels: Check stock cannot dip below a six-month supply.
• Check Reorder Levels: The reorder level is nine-month.
• Determining Check Defects: DO must verify the warranty period of the blank check, ensuring accuracy of the printing and serial numbers.
• Account Discrepancies Report: When Treasury check issues differ more than $1, an advice of check issue discrepancy report (FMS 5206) is required.
• Accountability Verification: The DD-2657 tracks and records check overdrafts, along with the loss of funds, and other accountability items.
• Receiving Funds Deposits: Funds are deposited in the Treasury following established procedures

Legal and Financial Considerations

• Legal Claims: Payees who report a lost, stolen, or damaged check, to the DO must submit a statement within one year of the issue date specified on the form DD2660.
• Account Transfer: DD Form 2667 is used to report funds that are for the transfer or reassignment that occurs to a different DO.
• Treasury Report of Receipts/Disbursements: DD Form 1131, Cash Collection Voucher, is used in the collection process.
• Financial Reports: CIR report verifies vouchers from collection to the Treasury and related information such as cash, checks, money orders, and deposits.
• Financial Transaction Form: DD Form 2657 is used to record daily transactions.
• Card Replacement: When cardholders need replacements for lost, stolen, damaged or expired cards, Instant Issue Navy Cash cards are used .
• Accountability Reports: An appropriate form (e.g., DD Form 2657, SF 1219), detailing activity of that day are completed for DO accountability, providing a complete picture of the DDO's, cashier's, and disbursing agent's accountability transactions.
• Maximum Deposit: The maximum amount of accepted deposits is $5,000, which can be deposited daily.
• Business Day Deposits: A $5000 maximum may be deposited on a daily basis when circumstances restrict daily deposits to specific times or methods.

Operational Procedures

• Disbursing Office Activation: A new disbursing office needs to be established, with a memorandum outlining the need and sending it to the chain of command.
• Accountable Personnel: DD Form 577 is used to terminate a person's appointment.

This quiz covers key aspects of disbursing procedures as outlined in Title 31 of the U.S. Code. It includes the roles of disbursing officials, the Treasury's reporting requirements, and the guidelines for fund disbursement within the Department of Defense. Test your knowledge on these essential financial operations and regulations.