type code. We will explain the use of the FAN later in this  chapter. PROPERTY ACCOUNTING ACTIVITY The   eighth   element   consists   of   the   property accounting  activity.  As  shown  in  figure  2-2,  this element consists of six digits. This six-digit element, however, can be constructed in several different ways, depending on the purpose of the expenditure. When the transaction  code  indicates  a  purchase  for  a  stores account, the UIC of the activity designated to take up the property into the stores account must be used. If the transaction  code  designates  the  purchase  of  plant property, the UIC of the activity for which the plant property  was  purchased  must  be  used. As   a   DK,   you   will   encounter   the   property accounting  element  used  most  frequently  on  temporary additional  duty  (TAD)  orders.  In  the  case  of  TAD orders, the TANGO or travel order number is used for the property accounting element. When this element is not required, the field is filled with six zeros. COST CODE The  final  element  of  the  nine  accounting classification code elements is the cost code. It is made up of 12 alphanumeric characters. The cost code is the source of any information that may be needed for the preparation  of  reports  requiring  additional  detail subsequent to the level identified in the rest of the accounting classification code. The cost code is also used on reports that require shortened coding. The construction  of  the  cost  code  is  determined  by  the authorization  accounting  activity.  Some  items  that often appear in cost codes are job order numbers, fund codes, FANs, and UICs. ADDITIONAL ACCOUNTING COMPONENTS The basic accounting classification code is made up of the nine elements we have just discussed. In addition to  the  nine  basic  elements,  there  are  other  aspects  or components  of  appropriation  accounting  classification code  data  that  you  should  recognize  and  understand. These important data items include allotments, FANs, UICs, and any financial transactions involving the international  balance  of  payments. ALLOTMENTS In the Department of the Navy, an allotment is defined  as  an  authorization  granted,  within  and  pursuant to an allocation or suballocation, to an office, command, activity, or component of the operating forces for the purpose of incurring commitments, obligations, and expenditures within a specified amount pursuant to the purpose  for  which  the  allotment  was  granted  and according  to  instructions  issued  by  the  administering office. Simply stated, an allotment is a means by which available   funds   within   an   appropriation   can   be authorized, issued, and administered to the Navy so that they can be used to meet the financial obligations to support a specific function or mission. The granting of an  allotment  automatically  reduces  the  available balance  of  the  specific  appropriation,  but  does  not constitute  a  specific  financial  commitment  or  obligation on the part of Congress. Instead, the holder of the allotment becomes the authorized agent who may create commitments,  obligations,  and  expenditures  against  the appropriation within the scope of the granted allotment. As a DK, you will normally encounter only two types of allotments used in disbursing transactions: (1) regular and (2) centrally managed. Basically, they differ  only  in  their  individual  limitations  and accountability requirements. In the following sections, we will explain each type. Let’s first look at the regular allotment and examine the ways in which you, the senior DK, will be required to identify and use this important  accounting  classification  data. Regular Allotments A  regular  allotment  provides  for  the  normal operating budget for your ship or station. It is granted quarterly and is used for your activity’s day-to-day operations. The commanding officer of your ship or station must closely monitor these funds to make certain they last through the entire quarter and their proper use and accountability can be readily demonstrated to the granting authority. Centrally Managed Allotments A centrally managed allotment is an allotment made by the head of an office or command in a specific amount  to  be  charged  for  specified  purposes  by designated  officials,  without  specific  limitations  as  to any individual official. A centrally managed allotment is  used  when  it  would  be  impractical  to  administer  a regular allotment. 2-6