scope:

INTRODUCTION

Objectives

This chapter establishes the standard procedures to be used when: A. The Defense Finance and Accounting Service (DFAS), Security Cooperation Accounting (SCA) bills foreign governments and international organizations (hereafter referred to as Foreign Military Sales (FMS) purchasers) for costs related to defense articles and defense services that have been sold pursuant to the Arms Export Control Act (AECA), Public Law 90-629, as amended, codified at 22 United States Code (U.S.C). 2751, et seq.

B. The Department of Defense (DoD) Components report FMS deliveries of materiel and services, contractor progress payments, and other related costs to DFAS SCA to obtain reimbursement or to report performance under an allotment of FMS Trust Fund budget authority.

C. The DoD Components request reimbursement from the other DoD Components for costs associated with interservice support of FMS cases.

Responsibilities A. Defense Security Cooperation Agency (DSCA). DSCA is responsible for approving the establishment and revision of the following codes: Implementing Agency (IA); Monitor; Type of Assistance (TA); and Delivery Source Code (DSC). Upon completion of DSCA review, the recommended new or revised codes are forwarded to the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) for approval and inclusion in Volume 15 of this Regulation. DSCA and OUSD(C) shall maximize the use of the Standard Financial Information Structure (SFIS) as prescribed in Volume 1, Chapter 4 of this Regulation.

B. Defense Finance and Accounting Service, Security Cooperation Accounting (DFAS SCA). DFAS SCA shall issue quarterly billing statements to FMS purchasers based on payment schedules attached to the Letter of Offer and Acceptance (LOA) by the applicable IA. Exceptions to this policy shall be made when an IA has submitted a "Quarterly Forecast of Financial Requirements for Requisition Cases," or when the committed values for requisition cases (Chapter 4, paragraph 040206 of this volume) indicate the performance on a particular requisition case is behind or ahead of schedule. In such cases, DFAS SCA shall bill based on the quarterly forecast or the committed value of requisitions.

C. Implementing Agencies (IAs). IAs shall report accrued expenditures (work in process (WIP)) and physical deliveries to DFAS SCA within 30 days of occurrence (date of shipment or performance) through the billing and reporting procedures prescribed in this chapter.

D. Supporting DoD Components. The supporting DoD Components shall request reimbursement from other DoD Components through the billing and reporting procedures prescribed in this chapter.

1. Requesting Activities. Requesting activities are responsible for notifying the performing activities when an order is placed to satisfy an FMS demand. The notification shall include the country, case designator, and line item.

2. Performing Activities. On notification that a customer order is for an FMS purchaser, performing activities shall notify the requesting activity whether the order has been accepted on a reimbursable or direct cite basis and identify the total cost to process the order. This total billing shall include both funded and unfunded costs. The performing activity shall deposit amounts collected to the appropriate accounts, including the Miscellaneous Receipt Accounts.