Minimize the need for our customers to find an
alternate appropriations source as replacement for canceled funds (which are
no longer available for any purpose even when obligated).
Process
1.
Verify Special Payment Instructions.
The ACO shall review new contracts and modifications containing accounting data
to determine if they contain special payment instructions (see
also
PGI
204.7108).
Special payment instructions prevent the MOCAS system from
defaulting to a proration method of payment, which increases the
likelihood of canceling funds. If special payment instructions are
included in the contract, the ACO shall verify they have been properly entered into MOCAS.
ACOs shall proactively manage contracts so
all contract obligations are paid before the funds cancel
(see also
Contract
Receipt and Review).
(The
National Defense Authorization Act for 1991 (Public Law 101-510, Section
1552) established a
canceled phase for funding. Funds are canceled five years after the date
last available for obligation
and may no longer be paid out, even if already
obligated.)
1.1. When a contract lacks payment instructions, MOCAS is designed to
select the Automatic Payment of Invoices (API) method of payment. The MOCAS
automatic proportional disbursement method is referred to as "proration."
Proration distributes the payment in equal percentages against all available
ACRNs on the contract, regardless of whether or not work was performed
against those ACRNs.
1.2. The negative impact of proration includes more
frequent occurrences of canceling funds.
2.1.
ACOs shall carefully consider
actions
to prevent
funds from canceling because canceled appropriations are subject to the provisions
of the Antideficiency Act and improper adjustments
may violate appropriations law (USD, AT&L
Letter, Subject: Improper Adjustments to Cancelled
Department of Defense Appropriations and
FMR Vol
03,
Chapter 10). When funds cancel,
DFAS contacts the customers for replacement
funds to make payments. Replacement funds are usually
provided from current appropriations. 2.2.
The ACO may use any of the following options and methods to prevent the cancellation of "at risk"
funds and to correct erroneous accounting records:
Initiate a
request for proper disbursement adjustments
by submitting the
DCMA-generated DLA
Form 1797 when errors in accounting data are found.
Authorize early release of fee
withholds where contractors
are considered to be low
risk.
Deobligate funds
considered
to be excess to contractual
requirements with
written
authorization from the
Procuring Contracting Officer.
Establish the contractor's intent to
invoice for the canceling funds. Determine whether
payment requests will be submitted promptly to ensure
processing before the funds cancel.
Use
the Wide
Area Work Flow to transmit
ACO approved payment requests.
3.1. ACOs shall work with their
CMOs to prepare an annual reduction
plan by January 30th of each calendar year.
The plan will identify a percentage reduction of the projected canceling
funds to achieve the HQ
performance indicator goal for the current year.To accomplish this, ACOs
will use the annual Defense Finance and Accounting
Service - Columbus (DFAS-CO) list of the forthcoming
year's canceling appropriations for MOCAS-administered
contracts, posted on the HQ's
Latest Data on Canceling Funds website.
3.2. ACOs
will verify the updated monthly data (posted on the HQ's
Latest Data on Canceling Funds)
for contracts with ULOs
considered to be "at risk" of canceling and identify any recently assigned contracts
with canceling funds. ACOs shall analyze the rate of reduction using the updated
data and work with the CMOs to adjust the annual reduction plan or take
other remedial action, as necessary, to achieve the HQ performance indicator
goal. 3.3. ACO's will
continuously, but no less than monthly, update the E-Tools
Canceling Funds application with current Status & Reason
Codes (see list below) for contracts
with ULOs considered to be at risk of canceling.
E-TOOLS CANCELING FUNDS -
FISCAL YEAR END (FYE) STATUS CODES / REASONS
A
At-risk amount will likelyrequire current year funds if not
disbursed/resolved prior to FYE.
B
At-risk amount will NOT require current year funds if not
disbursed/resolved prior to FYE.
CURRENT
REASON/EXPLANATION FOR ULOs AT-RISK OF CANCELLATION:
1
Contract is active, awaiting Contractor performance/delivery.
2
Awaiting correction modification from PCO
3
Awaiting prime contractor settlement with subcontractor.
4
Awaiting contractor overhead rate proposal.
5
Awaiting DCAA audit of contractor overhead rate proposal.
6
Awaiting ACO to negotiate overhead rates.
7
Contractor is expected tobill in time for year end disbursement.
8
Awaiting DCAA audit of Voucher.
9
ACO obligation reconciliation in process.
10
Awaiting Contractor response on reconciliation findings.
11
Contract is physically complete, funds are excess, awaiting PCO response.
12
Contract is physically complete, PCO will not authorize deobligation of
excess funds at this time. (STATUS CODE B ONLY)
13
Contract is physically complete, funds are excess, ACO deobligation
modification in process.
14
Contract is physically complete, closeout in process, funds are excess,
awaiting MOCAS systematic deobligation (Q-Final).
(STATUS
CODE B ONLY)
15
Invoice/voucher at DFAS, coded for payment.
16
Awaiting DFAS reconciliation and/or adjustment action (no
invoice at
DFAS).
20
Other ACO Issue (Requires further explanation in E-Tool "Comment" field)
21
Other Contractor Issue (Requires further explanation in E-Tool "Comments"
field)
22
Other DCAA issue (Requires further explanation in E-Tool "Comments" field)
23
Other DFAS issue (Requires further explanation in E-Tool "Comments" field)
24
Other PCO issue (Requires further explanation in E-Tool "Comments" field)
3.4. For non-MOCAS contracts administered by
DCMA (via systems other than MOCAS), ACOs (working with their CMOs) may use the Current Year
Canceling Appropriation Table to identify funds "at risk"
of canceling . For System for Integrated
Contract Management (SICM)
contracts, a Cognos Powerplay
cube containing contracts
with funds due to cancel
is posted on the FTP Server
on a monthly basis.
3.5 Upon request, ACOs shall notify
customers, including DoD buying activities or other Government agencies,
that customer reports for canceling funds are accessible through the
eTools EWAM application on
the agency's public website. The reports provide
the amount, status, and reason for all unliquidated funds identified as being "at risk" of
canceling and are available to the customer no later than the beginning of
the second quarter of the current fiscal year.
