I work at a R&D Navy Working Capital Fund activity. The technical divisions rely on sponsors to provide funding. When it comes to obligating funds on contract, our org uses two types of funding: direct cite (sponsors LOA) and "reimbursable" (our DWCF LOA: 97x4930 ). Direct cite funding isn't the problem, the problem is obligating DWCF.

When we use reimbursable funding, our financial system spits out the 97x4930 LOA. I had a $3M increment that contained 12 internal "job order numbers (JON)". The JONs don't show any useful info. However, lately after consulting with legal, I've requested what type of funds these "JONs" are made up from. The $3M increment contained 12 JONs. This means 12 different colors of money: overhead (true no-year money), a few RDT&E, a few procurement, and a OM appropriation that appeared to be FY17!! Should have been expired. Not sure about that one. Unless its true DWCF (no-year money: its not), it is impossible to apply the rules for each color of money appropriately. I can't distinguish between the funds considering a single LOA is used. For all intents and purposes, anyone looking at that contract will only see 97x4930 and, if involved, follow that LOA rules regarding payment, closeout, etc. Should the most restrictive color of money rules trump all others? Would help with PoP of CLINs, but not for the right type of work. Separating out each color money on a CLINs can't be done considering its single LOA and wouldn't tie to the type of funds.

How am I supposed to verify time, purpose and amount on DWCF if the LOA consists of multiple underlying colors of money but spits out one LOA using 97x4930?  Is DWCF TRUELY DWCF if the underlying appropriation's laws rule? Then it isn't no-year money even though anyone looking at it outside of my org will see DWCF, no-year money.

Bonus: If I have 12 embedded appropriations and a vendor invoices for $100, does that $100 come out of each "JON" account proportionally? Who chooses what "JON" that $100 gets used to pay it?

Why not ask your comptroller how they do it?

Don’s advice is right on.  However if you have a true Navy working capital fund,  it’s a revolving fund and once the Navy accepts the money, it loses its FY identity.  I’m surprised your legal people don’t know that.  Curious what made you bring it up?  Isn’t this the norm for Navy WCFs?

 

On 9/23/2019 at 4:59 PM, Don Mansfield said:

Why not ask your comptroller how they do it?

I did. He came back with TPA is verified prior to coming to the KO and that the burden to ensure its following proper law rests on the divisions making the request. They don't fund contracts with different CLIN's w/ different PoPs.

On 9/23/2019 at 8:50 PM, formerfed said:

Don’s advice is right on.  However if you have a true Navy working capital fund,  it’s a revolving fund and once the Navy accepts the money, it loses its FY identity.  I’m surprised your legal people don’t know that.  Curious what made you bring it up?  Isn’t this the norm for Navy WCFs?

I believe it is the norm; however, our LOA 97x4930 isn't a true NWCF, at least not all of it. Our 97x4930 can contain true WCF (revolving or overhead no-year funds), but it can also contain funds that still have FY identity. 

We send out money on a contract that we receive reimbursable (not true NWCF), we cite our LOA to ensure we pay the bill. It's a billing issue at this point and the nature of reimbursable funding. We have to pay the bills and then charge the sponsor. Yes, it's our LOA, BUT we need to bill the sponsor for it. So we must still follow the logic of their appropriation or else we won't get paid since the appropriation will be closed. In other words - if a contract cites 97x4930 that contains an embdedded FY18 RDTE LOA, if we don't spend it by 9/30/2019, when we bill the sponsor, they won't pay. I was bringing it up to see if anyone could shed some light on how I can use a DWCF LOA; however, the rules with that LOA don't apply apparently.

 

 

After seeing your explanation, I don’t see an easy answer.  Until this issue surfaced a few years ago, improper obligations were routinely done by FY end.  Agencies “banked” money with other agencies like GSA, DOE, and DOI.  Audits all concluded obligating agencies need to adhere to fiscal rules of customer funds.

The only idea I can think of is obligate the funds at issue through some quick means like ceiling amounts with the contractor subject to negotiation later.

6 hours ago, ry_lock said:

 

I did. He came back with TPA is verified prior to coming to the KO and that the burden to ensure its following proper law rests on the divisions making the request. They don't fund contracts with different CLIN's w/ different PoPs.

I believe it is the norm; however, our LOA 97x4930 isn't a true NWCF, at least not all of it. Our 97x4930 can contain true WCF (revolving or overhead no-year funds), but it can also contain funds that still have FY identity. 

We send out money on a contract that we receive reimbursable (not true NWCF), we cite our LOA to ensure we pay the bill. It's a billing issue at this point and the nature of reimbursable funding. We have to pay the bills and then charge the sponsor. Yes, it's our LOA, BUT we need to bill the sponsor for it. So we must still follow the logic of their appropriation or else we won't get paid since the appropriation will be closed. In other words - if a contract cites 97x4930 that contains an embdedded FY18 RDTE LOA, if we don't spend it by 9/30/2019, when we bill the sponsor, they won't pay. I was bringing it up to see if anyone could shed some light on how I can use a DWCF LOA; however, the rules with that LOA don't apply apparently.

 

 

If you wanted to dive deeply into the matter I suggested reading DoD 7000.14-R Financial Management Regulation Volume 11B "REIMBURSABLE OPERATIONS POLICY - WORKING CAPITAL FUNDS (WCF)", Chapter 1 (August 2019 version)(https://comptroller.defense.gov/Portals/45/documents/fmr/Volume_11b.pdf)

In particular paragraphs 010204 & 010210,  I had to read them several times but I think the answer to your questions lies within them.

 

 

28 minutes ago, Dominicke Ybarra said:

If you wanted to dive deeply into the matter I suggested reading DoD 7000.14-R Financial Management Regulation Volume 11B "REIMBURSABLE OPERATIONS POLICY - WORKING CAPITAL FUNDS (WCF)", Chapter 1 (August 2019 version)(https://comptroller.defense.gov/Portals/45/documents/fmr/Volume_11b.pdf)

In particular paragraphs 010204 & 010210,  I had to read them several times but I think the answer to your questions lies within them.

I believe the problem as explained is not all of the funding qualifies as WCF money.  I might be wrong though but take another look at the explanation.

DoD 7000.14-R Financial Management Regulation Volume 11B, Chapter 1 paragraph 010204 covers the scenario .  It is what is what happens when a DWCF activity’s operations are funded by the "reimbursements" it receives from its customers for the goods or services provided.

Read the OPs 2nd post.  Again I think the issue is not all the money comes through as WCFs.  What you’re saying applies to WCF.  But not all the money involved is.  

What the OP said

Quote

I believe it is the norm; however, our LOA 97x4930 isn't a true NWCF, at least not all of it. Our 97x4930 can contain true WCF (revolving or overhead no-year funds), but it can also contain funds that still have FY identity. 

I could be reading this incorrectly though.

14 hours ago, formerfed said:

I could be reading this incorrectly though

I think what the OP is saying is that contracts only get one line of accounting and that shows the fund cite for the WCF.  However, the funds that will be used to fund the contract come from different appropriations from different activities.  Thus, the LOA cited in the contract does not reflect the funds that are actually used for the contract.

You seem correct then Retreadfed.  I’ve never seen it done that way before.  What I have seen is WCF listed with one LOA and a separate breakdown of funding sources listed somewhere on the award cover sheet or elsewhere in the document. 

But the OPs issue is still the same - they might make an award with some of the funding sources having expired funds and the customer agency won’t reimburse

2 hours ago, formerfed said:

But the OPs issue is still the same - they might make an award with some of the funding sources having expired funds and the customer agency won’t reimburse

Or  write an R&D contract to be funded with O&M funds.

On 9/26/2019 at 11:53 AM, Retreadfed said:

I think what the OP is saying is that contracts only get one line of accounting and that shows the fund cite for the WCF.  However, the funds that will be used to fund the contract come from different appropriations from different activities.  Thus, the LOA cited in the contract does not reflect the funds that are actually used for the contract.

Correct. formerfed is spot on as well. Our agency's budget office said their main problem with this is DCMA approving payments with expired funding. DCMA sees NWCF and think the funds are still available for expenditure; however, the underlying appropriations' expenditure availability window has actually closed. DCMA has no way of knowing. 

On 9/26/2019 at 4:17 PM, Retreadfed said:

Or  write an R&D contract to be funded with O&M funds.

We do; however, couple things:

1. Legal has a problem incrementally funding a R&D contract with OM/Procurement funding due to those funds' fully fund policies;

2. When it's time for the recompete, turns out the previous contract was funded with majority of OM funding raising the question of is this actually R&D (PSC Axx1-5, Axx7) or R&D support services (Axx6);

3. Effort is awarded in FY18 but crosses fiscal years and increments using FY19 OM funding are being used.

3 hours ago, ry_lock said:

Legal has a problem incrementally funding a R&D contract with OM/Procurement funding due to those funds' fully fund policies;

How can you fuhnd an R&D contract with O&M or procurement funds?  See DoD FMR Vol 3 Ch 19 para. 190204 which states in part "Appropriated funds cited on reimbursable orders are available only for the purposes permissible under the source appropriation and remain subject to the same restrictions. The ordering activity retains primary responsibility for determining the applicability of the appropriated funds cited on the order. However, if instances arise when it is apparent that the ordering appropriation is not appropriate for the purpose provided, then the DWCF activity should return the order with a request for an applicable appropriation cite."