Defense Accounting Solutions Working Group (DASWG) Research and Recommendation Paper Payment Instructions Issue 23

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1 Description of the Issue Per the Defense Federal Acquisition Regulation Supplement (DFARS) , payment instructions provide a methodology for the payment office to assign payments to the appropriate accounting classification citation(s), based on anticipated contract work performed The scope of the payment instructions applies to contracts and any separately priced orders that: 1) Include contract line items that are funded by multiple accounting classification citations for which a contract line item or items are not broken out into separately identifiable subline items; 2) Contain cost-reimbursement or time-and-materials/labor-hour line items; or 3) Authorize financing payments Payment instructions are incorporated in the contracts The Contracting Officer inserts numbered instructions in Section G (Contract Administration Data), to permit the paying office to charge the Accounting Classification Reference Number (ACRN) assigned to that contract line item in a manner that reflects the performance of work on the contract Contract ACRN is a two position alpha or alpha/numeric code assigned to each discrete accounting classification citation (line of accounting) within the contract Certain DoD Financial accounting systems use ACRNs as a shorthand method of accessing/relating the long & detailed line of accounting to a line item in the contract ACRN is not part of the Standard Financial Information Structure (SFIS) and is not part of the Standard Line of Accounting (SLOA) This means SFIS compliant systems likely will have to use a translation table to interpret ACRN When invoicing for deliveries, contractors are required to invoice by line item Line items list the items to be delivered on the contract and serve other administrative organizational purposes Line item numbers identify the line items Deliverable line item numbers consist of four or six alpha-numeric digits characters that identify the goods or services to be acquired (Informational line item numbers are not needed for this discussion) It is the responsibility of the contracting officer to identify the applicable Line of Accounting (LOA) for the payment and instruct the paying office through the use of payment instructions In cases of contract financing payments, the Government is making disbursements to a contractor prior to the acceptance of supplies or services Thus, use of a reasonable method of allocating payment to the applicable LOA is a challenge Data on contract awards indicates that the process for selecting payment instructions is not well understood and the payment instructions are often selected inconsistently Thus, reporting entities are challenged to reasonably report their work-in-progress or construction-in-progress account balances at reporting period ends for contracts where all work has not been completed As a result, the existing payment instructions currently used by the Department of Defense reporting entities need revision for the following areas; Commercial Item Financing Payments Performance Based Payments Progress Payments Construction Payment Invoices Shipbuilding Invoices Cost Vouchers and Invoices Issue Implications Accounting for these transactions must be in compliance with generally accepted accounting principles, laws, and Office of Management and Budget circulars in order to pass audit Failure to resolve this issue will negatively impact the accuracy of financial data reported 1

2 Authoritative Guidance Defense Accounting Solutions Working Group (DASWG) Statement of Federal Financial Accounting Standards 6, Accounting for Property, Plant, and Equipment; para 34: - PP&E shall be recognized when title passes to the acquiring entity or when the PP&E is delivered to the entity or to an agent of the entity In the case of constructed PP&E, the PP&E shall be recorded as construction work in process until it is placed in service, at which time the balance shall be transferred to general PP&E Statement of Federal Financial Accounting Standards 4, Managerial Cost Accounting Standards and Concepts; para 133 & 134: - Sometimes, it might not be economically feasible to directly trace or assign costs on a cause-andeffect basis These may include general management and support costs, depreciation, rent, maintenance, security, and utilities associated with facilities that are commonly used by various segments - These supporting costs can be allocated to segments and outputs on a prorated basis The cost allocations may involve two steps The first step allocates the costs of support services to segments, and the second step allocates those costs to the outputs of each segment The cost allocations are usually based on a relevant common denominator such as the number of employees, square footage of office space, or the amount of direct costs incurred in segments Options Considered Revise the payment instructions as follows: Payment Request References Supply Service Construction Commercial Item Financing* Construction Payment Invoice Cost Voucher Invoice Terms for Financing of Purchases of Commercial Items, Installment Payments for Commercial Items Payments Under Fixed-Price Construction Contracts Allowable Cost and Payment FAR Payments Under Time-and- Materials and Labor-Hour Contracts Payments Payments Under Fixed-Price Research and Development Contracts; Payments Under Personal Services Contracts; A A N/A N/A N/A C B B N/A B B N/A 2

3 Payment Request References Supply Service Construction Payments Under Transportation Contracts and Transportation-Related Services Contracts Payment Under Communication Service Contracts with Common Carriers Shipbuilding Invoice (Fixed Price) Performance Based Payments* Progress Payment (excluding contracts with multiple production lot progress payments)* Payments C N/A Performance-Based Payments A A N/A Progress Payments D D N/A Progress Payment (multiple production lot progress payments)* Progress Payments; DFARS xxx --Multiple Production Lot Progress Payments E E N/A A Specified in approved payment Allocation will be provided by the contracting officer as part of approval of the payment in accordance with FAR 32207(b)(2) and (b)(2) B Line item specific proration If there is more than one ACRN within a deliverable contract line item the funds shall be allocated in the same proportion as the amount of funding currently unliquidated for each ACRN on the line item billed C Line item specific by fiscal year If there is more than one ACRN within a deliverable contract line item the funds shall be allocated using the oldest funds Line item specific: by fiscal year In the event of a line item with two accounting classification citations with the same fiscal year, those amounts will be prorated to the available unliquidated funds for that year D Contract-wide proration The funds shall be allocated in the same proportion as the amount of funding currently unliquidated for each ACRN Progress Payments are considered contract level financing; the contract price used when preparing requests for Progress Payments, is related to the firm fixed price portion of the contract as determined per FAR E Lot-wide proration The funds shall be allocated in the same proportion as the amount of funding currently unliquidated for each ACRN for the production lot (see XX MULTIPLE PRODUCTION LOT PROGRESS PAYMENTS) *Liquidation of Financing Payments upon delivery - Liquidation shall be applied, by the payment office, against those ACRNs which are identified by the payment instructions for the delivery payment, and in keeping with the liquidation provision of the applicable contract financing clause (ie Progress Payments, Performance Based Payments or Commercial Item Financing) 3

4 Recommendation(s) and Basis for Recommendation(s) Rather than leave selection of the payment instructions to the individual contracting officer, who may not have the training in accounting and fiscal law needed to determine the correct approach, a revised approach has been developed that bases the payment instruction on the type of payment being made and the type of deliverable being acquired This revised approach recognizes the differences in accounting treatment for supplies and services, as well as for various financing methods Each payment type has been separately assessed for compliance with Generally Accepted Accounting Principles (GAAP) and appropriate payment instructions have been identified to ensure compliance with GAAP The remaining section of this document describes each payment type and outlines the proposed payment instruction, accounting impact, and key supporting documentation needed to support audit and other independent verifications Note: The recommendation is reviewed by ad hoc team of representatives from OUSD(C), DFAS, and OSD Defense Procurement and Acquisition Policy (DPAP) On March 17, 2017, DPAP opened a case with Defense Acquisition Regulations (DAR) Council to make Defense Federal Acquisition Regulation Supplement Procedures, Guidance, and Information (PGI) revision Payments not based on costs incurred or percentage of work completed: Commercial Item Financing Payments (see FAR 322) are payments for procurement of items that are commercially available 10 USC 2307(f) and 41 USC 4505 provide that payment for commercial items may be made under such terms and conditions as the head of the agency determines are appropriate or customary in the commercial marketplace and are in the best interest of the United States (FAR 32201) These payment are used following a typical industry standards requirements that demand payments before delivery or acceptance of the end product For example, aircraft manufacturing industry could use payment terms of such as 10% at placement of order, 20% at wing attachment to fuselage, 20% when paint ready, and remaining 50% due upon delivery Payments under Commercial Item Financing may represent advances prior to any performance of work under the contract or installment financing payment during the performance of the contract period Performance Based Payments (see FAR 3210) are types of non-commercial contract financing payments to contractors where each payment is based upon the achievement of specific events or accomplishments that are defined and valued in advance by the parties to the contract For example the Government and the contractor may agree upon a payment of 45% of the contract value upon completion of manufacturing of a chassis in a combat vehicle acquisition contract And Proposed payment instruction: Specified in approved payment and contract terms The specific events or accomplishments for payment agreed by the parties are included in the contract When payment requests are received, allocation will be provided by the contracting officer as part of approval of the payment As the actual payment events are specific to the contract, the Contracting Officer will be responsible for receiving, approving, and transmitting the contract financing requests to the appropriate payment office Each approval will specify how the payment should be applied to the applicable Accounting Classification Reference Numbers (ACRN) Contracting Officer s determination of the account to be charged for the payment will be based on the invoice, contract payment terms (Section B of the contract), delivery schedule (Section F of the contract), and actual progress in support of contract performance Under this method payments are reasonably identified to an end item and the respective ACRNs Accounting impact Under the proposed payment instruction, the reporting entity funding the contract will be charged with the actual amount paid Thus, the construction in progress (CIP) account will be fairly reported throughout the contract 4

5 performance period This methodology will also allow CIP to be appropriately accumulated and reported when a contract is funded by multiple reporting entities This approach will be in compliance with SFFAS No 6, Accounting for Property, Plant, and Equipment, para 34 that states: PP&E shall be recognized when title passes to the acquiring entity or when the PP&E is delivered to the entity or to an agent of the entity In the case of constructed PP&E, the PP&E shall be recorded as construction work in process until it is placed in service, at which time the balance shall be transferred to general PP&E Illustration Purchase of aircraft with the following unit price, quantity, delivery schedule, and payment terms Unit price: $12M Quantity: 3 Aircraft (CLIN 0400) 4 aircraft (CLIN 0500) 3 Air Force aircraft (CLIN 0600) Funding: - $36M (ACRN AA) - $48M (ACRN AB) Air Force - $36M (ACRN AC) Delivery schedule (number of units): July 16 Aug 16 Sep 16 Oct 16 Nov 16 (CLIN 0400) (CLIN 0500) Air Force (CLIN 0600) 1 2 Payment terms: Upon receipt of material from subcontractors 20% Assembly of fuselage 25% Installing Engine 30% Final Delivery Payment of full amount after liquidation of financing payment Payments: 1 Jan 30, 2016 upon receipt of material from subcontractors - $24M Using the proposed payment instruction, the payment amount will be applied to the following ACRNs: CLIN Amount ACRN 0400 $72M (20% of the cost of the 3 aircraft ($36M)) AA () 0500 $96M (20% of the cost of the 4 aircraft ($48M)) AB () 0600 $72M (20% of the cost of the 3 aircraft ($36M)) AC (Air Force) Total $24M 5

6 1 Impact on the reporting entities accounting records: Air Force CIP USSGL #1720 CIP USSGL #1720 CIP USSGL #1720 Debit Credit 1/30/2016 $ 9,600,000 FBwT USSGL# 1010 FBwT USSGL# 1010 FBwT USSGL# 1010 Debit Credit 1/30/16 $ 9,600,000 2 May 31, 2016 upon assembly of fuselage for two and one aircraft $9M CLIN Amount ACRN 0400 $6M (25% of the cost of the 2 aircraft ($24M)) AA () 0500 $3M (25% of the cost of 1 aircraft ($12M)) AB () Total $9M Impact on the reporting entities accounting records: Air Force CIP USSGL #1720 CIP USSGL #1720 CIP USSGL #1720 Debit Credit 1/30/16 $ 9,600,000 5/31/16 $ 6,000,000 $ 3,000,000 $ 13,200,000 $ 12,600,000 FBwT USSGL# 1010 FBwT USSGL# 1010 FBwT USSGL# 1010 Debit Credit 1/30/16 $ 9,600,000 5/31/16 $ 6,000,000 $ 3,000,000 $ 13,200,000 $ 12,600,000 The overall impact of the above transactions on and, Air Force s accounting records as of May 31, 2016: Trial Balance as of 5/31/2016 Air Force Account # Title Debit Credit 1010 Fund Balance With Treasury $ 13,200,000 $ 12,600, Construction-in-Progress $ 13,200,000 $ 12,600, Equipment $ - $ - $ - Key supporting documents Contract including the delivery schedule (Section F of the contract) and payment terms (Section B of the contract) This documentation will be retained by the Contracting Officer Approved invoice and documented rational that support Contracting Officer s decisions and allocation methodology This documentation will be retained by the Contracting Officer 1 Throughout this document, only impact to the proprietary accounts is illustrated 6

7 Detail calculation that shows how the payment is applied to the different ACRN during entitlement process This documentation is retained by the paying office (DFAS) Payments based on costs incurred or percentage of work completed: Progress Payments are types of contract financing payments used with fixed price contracts when acquiring non-commercial items Each payment is based upon costs incurred during the performance of the contract For example, in a combat vehicle manufacturing contract, the Government and the contractor may agree to make payment of 80% of incurred costs in performance of the contract The payment terms for progress payments are included in the contract (typically in section G or I) Proposed payment instruction: The funds are liquidated in the same proportion as the amount of funding currently unliquidated for each ACRN Progress payments may be made either on a whole contract (Contractwide) or on a Lot-wide basis Financing payments to be made on a whole contract basis are applicable to the entire contract, and not to specific deliverable items Financing payments to be made on a Lot-wide basis are applicable to a specific individual deliverable item Below is an example of single lot and multi-lot contract structures: Contract-wide Deliverable Unit Price Price 10 airplanes $1,000,000 $10,000,000 Multi-lot Deliverable Price Lot 1 2 airplanes $2,000,000 Lot 2 5 airplanes $5,000,000 Lot 3 3 airplanes $3,000,000 Accounting impact Proposed payment instruction (Contract-wide/Lot-wide proration) is a reasonable allocation of CIP since payments made under progress payments contracts are not directly identifiable to the finished goods at the initial phases of the performance period A good example is progress payment related to bulk purchase of raw materials at the start of the contract Until these materials are used, they are not easily identifiable to a finished product or a delivery schedule in the initial stages of the manufacturing process Thus, the payment cannot be directly associated to an ACRN Another example is payments related to initial cost of building infrastructure to produce an end product (eg cost of building assembly line to manufacture combat vehicles) In this case prorating the payment based on the unliquidated amount to each ACRN is a reasonable option to accumulate cost Even in the limited situations when the progress payments can be directly identifiable to the finished good (eg cost of the chassis), due to the high likelihood/experience of the delivery schedule changes throughout the performance period of the contract, there would be a high risk of misreported CIP as the delivery schedule changes Thus, proration allows a reasonable way of allocating costs across the different ACRN that funded the contract Under the proposed payment instruction, the reporting entity funding the contract will be charged with a reasonable prorated share of the payment 7

8 Thus, each reporting entity s CIP account will be fairly reported throughout the contract performance period This approach will be in compliance with SFFAS No 6, Accounting for Property, Plant, and Equipment, para 34 that states: PP&E shall be recognized when title passes to the acquiring entity or when the PP&E is delivered to the entity or to an agent of the entity In the case of constructed PP&E, the PP&E shall be recorded as construction work in process until it is placed in service, at which time the balance shall be transferred to general PP&E During the contract performance period, in the vast majority cases, costs under progress payments are not specifically identifiable to end items Thus, they can be treated similar to indirect costs SFFAS No 4 allows allocating costs on a reasonable and consistent basis when it is not feasible or economically practicable to directly trace costs to an end product or assigning costs on a cause-and-effect basis is not possible Upon the delivery of an end product, the work in progress account balance will be adjusted and the final cost of the items is posted to the appropriate asset or operating expense account Illustration Acquisition of combat vehicles with the following funding, delivery schedule, and payment terms Funding: = $50M (5 = $30M (3 Total = $80M Delivery schedule (number of units): Aug 16 Sep 16 Oct Payment terms: Monthly payments of eligible costs incurred under the progress payment clause Payments: 1 June 30, 2016 cost eligible under the progress payment associated with building assembly line to manufacture combat vehicles - $4M Using the proposed payment instruction, the invoice amount will be applied as follows: $25M ($4M X 625%) - provided 625% of funding ($50M/$80M) $15M ($4M X 375%) - provided 375% of funding ($30M/$80M) 8

9 Impact on the reporting entities accounting records: CIP USSGL #1720 CIP USSGL #1720 6/30/2016- payment 1 $ 2,500,00000 $ 1,500,00000 FBwT USSGL# 1010 FBwT USSGL# /30/2016- payment 1 $ 2,500,00000 $ 1,500, July 31, 2016 cost eligible under the progress payment associated with purchase of raw materials to be used for all the vehicles and manufacturing cost of vehicles in production $50M Using the proposed payment instruction, the invoice amount will be applied as follows: $3125 ($50M X 625%) - provided 625% of funding ($475M/$76M) $18755M ($50M X 375%) - provided 375% of funding ($285M/$76M) Impact on the reporting entities accounting records: CIP USSGL #1720 CIP USSGL #1720 6/30/2016- payment 1 $ 2,500,00000 $ 1,500, /31/2016- payment 2 $ 31,250,00000 $ 18,750,00000 $ 33,750,00000 $ 20,250,00000 FBwT USSGL# 1010 FBwT USSGL# /30/2016- payment 1 $ 2,500,00000 $ 1,500, /31/2016- payment 2 $ 31,250,00000 $ 18,750,00000 $ 33,750,00000 $ 20,250, August 31, 2016 delivery of the first vehicle to at the price of 10M Impact on the reporting entities accounting records: 9

10 CIP USSGL #1720 CIP USSGL #1720 6/30/2016- payment 1 $ 2,500,00000 $ 1,500, /31/2016- payment 2 $ 31,250,00000 $ 18,750, /31/2016 Payment upon delivery of the first vehicle $ 8,000,00000 $ 80,000,00000 $ 33,750,00000 $ 20,250,00000 $ 8,000,00000 $ 54,000,00000 Amount paid to date Balance $ 12,250, % $ 10,000,00000 Invoiced amount upon delivery Equipment USSGL# 1750 Equipment USSGL# 1750 $ 8,000,00000 Recoupment (80% per the contract) $ 2,000,00000 Amount to be paid 7/31/2016 Delivery of the first vehicle $ 10,000,00000 $ 10,000,00000 FBwT USSGL# 1010 FBwT USSGL# /30/2016- payment 1 $ 2,500,00000 $ 1,500, /31/2016- payment 2 $ 31,250,00000 $ 18,750, /31/2016 Payment upon delivery of the first vehicle $ 2,000,00000 $ 33,750,00000 $ 22,250,00000 The overall impact of the above transactions on and s accounting records as of August 31, 2016: Trial Balance as of 8/31/2016 Account # Title 1010 Fund Balance With Treasury $ 33,750,00000 $ 22,250, Construction-in-Progress $ 33,750,00000 $ 12,250, Equipment $ - $ 10,000,00000 Key supporting documents Contract including the delivery schedule and payment terms This documentation will be retained by the Contracting Officer Approved invoice This documentation will be retained by the Contracting Officer Detail calculation that shows how the payment is applied to the different ACRN during entitlement process This documentation is retained by the paying office (DFAS) Construction Payment Invoices & Shipbuilding Invoices- are payments under fixed-price real property construction and ship design and construction contracts Proposed payment instruction: when there is more than one ACRN within a deliverable contract line item, the funds will be liquidated using the oldest funds In the event of a line item with two ACRN with the same fiscal year, those amounts will be prorated to the available unliquidated funds for that year Accounting impact Real property construction is accounted for using the percentage completion method and proration of payment for construction of non-severable items on a jointly funding CLIN, would lead to reasonable allocation across 10

11 the various reporting entities that funded the contract However, when a line item is funded by more than one reporting entity with different fiscal year funding, applying payment to the oldest fund first may result in a misstatement of the accounting books of the reporting entities that funded the contract until the end of the performance of the contract The Department limits the use of multiple source of fund for construction projects It is only used on limited instances such as Defense Base Closure and Realignment Commission (BRAC) Thus, multi-acrn construction contract are not material to the overall construction projects and the proposed payment instruction deemed reasonable However, the policy would need to be revisited on a regular interval to ensure that impact remains immaterial Illustration 1 Real Property Construction: and Air Force funded a real property construction project (CLIN 0100) as follows: $500K using the FY 2015 appropriated fund (ACRN AA) and later added incremental funding of $2M using FY 2016 fund (ACRN AB) Air Force - $15M using the FY 2016 appropriated fund (ACRN AC) On September 8, 2016, based on the percentage of completion of the project, an invoice for $2M was received on CLIN 0100 Using the proposed payment instruction, assuming all the contract requirements are met, the invoice amount will be applied as follows: Reporting Entity ACRN Funding % Allocation to the reporting entities Allocation to ACRN AA $ 500,000 ACRN AA = $ 500,000 Oldest Fund First AB $ 2,000,000 $ 2,500,000 $ 063 $ 1,250,000 ACRN AB = $ 750,000 The remaining ($1,562,500-$500,000) Air Force AC $ 1,500,000 $ 038 $ 750,000 ACRN AC = $ 750,000 $ 4,000,000 $ 2,000,000 ACRN AA = $500,000 ACRN AB = $750,000 Air Force ACRN AC = $750,000 Impact on the reporting entities accounting records: Air Force CIP USSGL #1720 CIP USSGL #1720 9/8/2016 $ 1,250,000 $ 750,000 FBwT USSGL# 1010 FBwT USSGL# /8/2016 $ 1,250,000 $ 750,000 The overall impact of the above transactions on and Air Force s accounting records as of Sep 31, 2016: Trial Balance as of 9/31/2016 Air Force Account # Title 1010 Fund Balance With Treasury $ 1,250,000 $ 750, Construction-in-Progress $ 1,250,000 $ 750, Equipment $ - $ - 2 Ship Building 11

12 awarded a ship building contract in FY 2014 and incrementally funded the contract in FY 15 and FY16 On July 31, 2016, the COR approved an invoice for $3,000,000 Total unliquidated fund available as of July 31, 2016 was $32,500,000 and it was made up of the following appropriation years: FY 14 - $500,000 FY 15 - $2,000,000 FY16 - $30,000,000 Using the proposed payment instruction, the invoice amount will be applied as follows: Reporting Entity Funding Year Unliquidated Funding Payment Allocation FY14 $ 500,000 $ 500,000 Oldest fund first FY15 $ 2,000,000 $ 2,000,000 Applying to the next older fund FY16 $ 30,000,000 $ 500,000 The remaining ($3M-$500-$2M) $ 32,500,000 $ 3,000,000 Impact on the reporting entity accounting records: CIP USSGL #1720 Debit Credit 7/31/16 $ 3,000,000 FBwT USSGL# 1010 Debit Credit 7/31/16 $ 3,000,000 The overall impact of the above transaction on s accounting records as of July 31, 2016: Trial Balance as of 7/31/2016 Account # Title Debit Credit 1010 Fund Balance With Treasury $ 3,000, Construction-in-Progress $ 3,000, Equipment $ - Key supporting documents Contract This documentation will be retained by the Contracting Officer Approved invoice This documentation will be retained by the Contracting Officer Detail calculation that shows how the payment is applied to the different ACRN during entitlement process This documentation is retained by the paying office (DFAS) Cost Vouchers and Invoices 12

13 Cost Vouchers are payment requests for costs incurred under the following contract types: Cost reimbursement contracts for other than commercial items Time-and-materials and labor-hour contracts, which may include those for commercial services in accordance with FAR Invoices are payment requests for deliveries under fixed-price contract, including those with cost or performance incentives, and those with economic price adjustment Proposed payment instruction: Both supply & services- Line item specific proration in the same proportion as the amount of funding currently unliquidated for each ACRN on the line items billed; Services- Line item specific by fiscal year (If there is more than one ACRN within a deliverable contract line Item, the funds shall be liquidated using the oldest funds) Accounting impact When it is impractical to directly relate payment to a reporting entity that benefited from performance of the contract, allocation is a reasonable alternative (eg a contract to transport hazardous waste funded by two reporting entities) The proposed payment instruction reasonably allocates the payments to the reporting entity Payments shall be prorated to the reporting entities that funded the line item based on available unliquidated funds Then, the prorated payment amount must be applied to the oldest funds first in the event where an agency used different year appropriations to fund the contract line item Illustration,, Air Force funded a research contract as follows: $2M using FY 15 funds and 1M using FY 16 funds 15M using FY16 funds Air Force 5M using FY 16 funds Payments term Monthly payment of $1M Payment requested on August 31, 2016 for an invoice amount of $1M Proration to the reporting entities that funded the line item based on available unliquidated funds regardless of the year of appropriation The invoice amount will be applied as follows: Reporting entity ACRN Funding % Allocation to the reporting entities Allocation to ACRN AA FY15 $ 2,000,00000 ACRN AA = $ 600,00000 Oldest Fund First AB FY16 $ 1,000,00000 $ 3,000, % $ 600,00000 ACRN AB = $ - AC FY16 $ 1,500, % $ 300,00000 ACRN AC = $ 300,00000 Air Force AD FY16 $ 500, % $ 100,00000 ACRN AD = $ 100,00000 $ 5,000, % $ 1,000,00000 $ 1,000,00000 ACRN AA - $600,000 ACRN AC - $300,000 Air Force ACRN - $100,000 Impact on the reporting entities accounting records: 13

14 Air Force Op Exp USSGL #6100 Op Exp USSGL #6100 Op Exp USSGL #6100 Debit Credit 8/31/16 $ 600,000 $ 300,000 $ 100,000 $ 600,000 $ 300,000 $ 100,000 FBwT USSGL# 1010 FBwT USSGL# 1010 FBwT USSGL# 1010 Debit Credit 8/31/16 $ 600,000 $ 300,000 $ 100,000 $ 600,000 $ 300,000 $ 100,000 The overall impact of the above transactions on and, and Air Force s accounting records as of August 31, 2016: Trial Balance as of 8/31/2016 Air Force Account # Title Debit Credit 1010 Fund Balance With Treasury $ 600,000 $ 300,000 $ 100, Operating Expenses/Program Costs $ 600,000 $ 300,000 $ 100,000 DASWG Approvals of Recommendation: DASWG Co-Chair (Alaleh A Jenkins, ODCFO/ADCFO) Date DASWG Co-Chair (Andrew S Haeuptle, ODCMO/Director, Date Defense Business Management, Analysis, and Optimization) DASWG Staff Point of Contact: John Eberhardt Address: johnreberhardtciv@mailmil Phone Number: