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principal of the fund. For example, loan funds and
working capital funds. The capital amount of a fund
may be in the form of cash, inventory receivables, or
other assets.
Defense Business Operating Fund
Of the several funds, the one that you will be most
concerned with is the Defense Business Operating Fund
(DBOF). It is not practical for each activity of the Navy
to purchase all of its requirements directly from
commercial suppliers using its operating money. It is
for this reason that the DBOF exists. It provides the
necessary capital to finance the purchase and
maintenance of stocks of common supply items
required by the Navy. Basic capital for the DBOF is
made available from Congress. The total value of the
DBOF is reviewed annually by Congress and adjusted
to meet current requirements. Within the Navy, the
Commander, Naval Supply Systems Command is the
administrator of the DBOF.
DBOF CHARGES—The Defense Business
Operating Fund is charged with the following:
Expenditures for the purchase or manufacture of
stores, supplies, equipment, and services which
are to be taken up in the Navy Stock Account
(NSA).
Appropriation adjustments lodged against the
fund for sale of materials from a stores account
to the Navy Stock Account. They are used for
return “with charge” of material previously
charged to an end-use functional account.
Navy Stock Account losses by accounting, price
adjustment, appraisal, inventory, sale, and
survey, which are not properly charged to an
appropriation.
Donations of surplus NSA material for public
health and educational purposes, including
research.
Authorized charges for repair of NSA material
in store.
Issues from the NSA of clothing items for health
and comfort, when not chargeable to another
appropriation.
Payment of claims approved by the General
Accounting Office (GAO).
DBOF CREDIT—The DefenseBusiness Operating
Fund is credited with the following:
Issues from the NSA charged to an appropriation
or fund.
Cash sales from the NSA (including sales to
other government departments and foreign
governments),
Sales from the NSA to other stores accounts.
Collections from carriers for NSA material lost
or damaged in transit.
NSA gains by accounting, price adjustment,
appraisal, inventory, sale, and survey which are
not properly creditable to an appropriation.
Reimbursements from the Defense Logistics
Agency for the pro rata share of proceeds from
sale of surplus, scrap, and salvage material
expended from the NSA.
DBOF SYMBOLS—Symbols used in the elements
that make up the DBOF serve the same purpose as those
for appropriations. They identify charges and credits
made against the DBOF. The symbols used in the
construction of the DBOF consist of eleven digits. The
first seven digits designate the department responsible
for administering the fund; an indicator of fiscal year
limitation, the type, and the particular fund. The other
four digits compose the subhead. It identifies the
command or bureau within the Navy responsible for
administrating this element of the fund and the purpose
for which it is to be used. The meaning of each digit or
combination of digits is shown in figure 9-4.
DBOF Use—DBOF fulfills its role as a revolving
fund by purchasing designated supplies from
commercial sources, Defense Logistics Agency, the
General Services Administration, and the Departments
of the Army and Air Force, and then selling them.
These supplies maybe sold to a specific appropriation
Figure 9-4.-Example of a Defense Business Operating Fund
symbol.
9-4
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