FINANCIAL MANAGEMENT OPERATIONS

FM 1-06

FINANCIAL MANAGEMENT OPERATIONS

APRIL 2011

DISTRIBUTION RESTRICTION: Distribution for public release; distribution is unlimited.

HEADQUARTERS DEPARTMENT OF THE ARMY

This publication is available at

Army Knowledge Online (us.army.mil) and

General Dennis J. Reimer Training and Doctrine

Digital Library at (train.army.mil).

Field Manual No. 1-06

*FM 1-06

Headquarters

Department of the Army

Washington, DC, 4 April 2011

FINANCIAL MANAGEMENT OPERATIONS

Contents

Chapter 1 Chapter 2

Page

PREFACE..............................................................................................................vi

INTRODUCTION ..................................................................................................vii

FINANCIAL MANAGEMENT OPERATIONS .................................................... 1-1

Section I ? Financial Management Mission and Purpose ............................ 1-1

Principles of Financial Management .................................................................. 1-2

Financial Management Core Competencies ...................................................... 1-5

Section II ? Financial Management and the Sustainment Warfighting

Function............................................................................................................. 1-8

Financial Management and the Elements of Combat Power ............................. 1-9

The Fiscal Triad ................................................................................................ 1-10

Financial Management Support to Force Projection ........................................ 1-11

Section III ? Army Financial Management with Interorganizational

Partners (Joint, Multinational, Intergovernmental, Interagency, and

Nongovernmental) .......................................................................................... 1-12

Section IV ? Financial Management Support to Stability Operations ....... 1-15

Financial Management Supporting Tasks ........................................................ 1-16

Section V ? Financial Management Organizations, Responsibilities and

Organizational Relationships ........................................................................ 1-17

Strategic Financial Management ...................................................................... 1-18

Operational Financial Management ................................................................. 1-20

Tactical Financial Management........................................................................ 1-28

Brigade Level Financial Management .............................................................. 1-37

FUND THE FORCE............................................................................................ 2-1

Section I ? Appropriations/Authorization Process ....................................... 2-1

Administrative Control and Distribution of Funds ............................................... 2-3

Basic Appropriations That Fund the Army.......................................................... 2-5

The Legislative Proposal Process in Support of Contingency Operations......... 2-7

Section II ? Fiscal Law ..................................................................................... 2-8

Basic Tenets of Fiscal Law................................................................................. 2-8

Distribution Restriction: Distribution for public release; distribution is unlimited.

*This publication supersedes FM 1-06, 21 September 2006.

4 April 2011

i

Contents

Chapter 3

Chapter 4 Chapter 5

Anti-Deficiency Act (ADA) ...................................................................................2-9

Section III ? Resource Management Support............................................... 2-10

Resource Management Support to Stability Operations...................................2-10

Funding Contingency Operations .....................................................................2-11

Strategic Resource Management .....................................................................2-13

Operational Resource Management .................................................................2-16

Tactical Resource Management ....................................................................... 2-17

BANKING AND DISBURSING SUPPORT ........................................................3-1

Section I ? Banking Support ............................................................................ 3-1

Banking and Host Nation Support.......................................................................3-1

Cash Management..............................................................................................3-2

Economic Impact.................................................................................................3-3

Section II ? Disbursing Operations ................................................................. 3-3

Cash Verification .................................................................................................3-4

Reporting and Analysis .......................................................................................3-4

Irregularities in Disbursing Officer Accounts.......................................................3-4

Managing a Limited Depositary Account ............................................................3-5

Transfer of Accountability (Settlement)............................................................... 3-5

Types of Disbursing Support...............................................................................3-5

Special Payments ...............................................................................................3-9

Miscellaneous Disbursing Support....................................................................3-10

Disbursing Roles ...............................................................................................3-11

PAY SUPPORT ..................................................................................................4-1

Section I ? Active Duty Pay..............................................................................4-1

Key FM Reports .................................................................................................. 4-2

Separation of Duties............................................................................................ 4-2

Section II ? Reserve Component Pay..............................................................4-3

Mobilization/Demobilization ................................................................................4-4

Section III ? Case Management System ......................................................... 4-4

Types of CMS Cases ..........................................................................................4-4

ACCOUNTING SUPPORT AND COST MANAGEMENT ..................................5-1

Section I ? Accounting Support ......................................................................5-2

Stages of a Transaction ......................................................................................5-3

Obligation Management...................................................................................... 5-5

Strategic Level Accounting Support....................................................................5-6

Operational Level Accounting Support ...............................................................5-7

Tactical Level Accounting Support......................................................................5-8

General Fund Enterprise Business Systems (GFEBS) ......................................5-9

Section II ? Cost Management Support ..........................................................5-9

Cost Culture ......................................................................................................5-10

Cost Management Support ...............................................................................5-10

The Cost Management Process .......................................................................5-11

Cost Management Concepts ............................................................................5-15

Full Cost ............................................................................................................5-16

Cost Management During Contingency Operations ......................................... 5-17

Cost Estimates for Contingency Operations.....................................................5-18

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FM 1-06

4 April 2011

Contents

Chapter 6 Chapter 7 Chapter 8

Contingency Cost Reporting ............................................................................ 5-19

Cost Collection ................................................................................................. 5-20

PLANNING AND OPERATIONS ....................................................................... 6-1

Section I ? Planning ......................................................................................... 6-2

FM Planning Using the Military Decisionmaking Process (MDMP).................... 6-3

Section II ? Preparation.................................................................................... 6-7

Troop Leading Procedures (TLP) ....................................................................... 6-7

Section III ? Execution ..................................................................................... 6-7

Command and Control ....................................................................................... 6-7

Financial Management Support Operations (FM SPO) ..................................... 6-8

Considerations in Support of the Procurement Process .................................. 6-10

Section IV - Assessment................................................................................ 6-13

Assessment of FM Operations ......................................................................... 6-13

MANAGEMENT INTERNAL CONTROLS......................................................... 7-1

Section I ? Management Responsibilities...................................................... 7-1

Army Management Responsibility for Internal Control....................................... 7-1

Key Managers' Internal Control Concepts.......................................................... 7-2

Establishing Accountability and Stewardship ..................................................... 7-3

Authority.............................................................................................................. 7-3

Responsibilities................................................................................................... 7-4

Section II ? Internal Control Process.............................................................. 7-5

Section III ? Assessments and Corrective Actions....................................... 7-7

Risk Assessment and Control Activities ............................................................. 7-7

Reporting, Correcting, and Tracking Material Weaknesses............................... 7-8

INFORMATION MANAGEMENT ....................................................................... 8-1

Section I ? Financial Management Information Systems (FMIS) ................. 8-1

Resource Management ...................................................................................... 8-2

Logistics.............................................................................................................. 8-3

Contracting ......................................................................................................... 8-4

Finance Operations ............................................................................................ 8-4

Section II ? Financial Management Tactical Platform................................... 8-6

Communication Requirements ........................................................................... 8-6

Disbursing........................................................................................................... 8-7

Resource Management ...................................................................................... 8-7

Vendor Support .................................................................................................. 8-8

Travel.................................................................................................................. 8-8

Pay Support ........................................................................................................ 8-8

Section III ? Communications ......................................................................... 8-8

Communication Modes....................................................................................... 8-8

Internal Fixed Site Communications................................................................. 8-10

Base and Remote Support Operations ............................................................ 8-10

Tactical Operations Interface ........................................................................... 8-10

Communications Security................................................................................. 8-10

Signal Operating Instructions (SOI).................................................................. 8-10

Communication Networks................................................................................. 8-10

4 April 2011

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