Thus, the Navy controls expenditures to keep them
Each year the Navy must have billions of dollars
within the monetary limits established by the
to carry out its mission. This money comes from the
taxpayers of the United States as determined by
COST ACCOUNTING--An account through
which the Navy can accumulate all costs according to
The Navy must keep accounts to show how the
activity or unit, purpose, and type of expenditure.
money is spent. The accounts show the receipt and
expenditure of public funds; the amount of
INVENTORY (STORES) ACCOUNTING--An
government money, materials, and property on hand;
account used to maintain records of material and
and the cost of all operations, broken down by
supplies on hand. These records provide the
projects and programs. All these functions are part of
information necessary to prepare returns or reports.
financial management. Financial management is
P L A N T P RO P E RT Y AC C O U N T I N G -- A n
necessary to guarantee that government property and
account used to maintain records of all Navy-owned or
money are economically used in the public interest.
Navy-controlled real property and equipment of a
Cost data assembled by projects and programs are
capital nature ashore.
PAYROLL ACCOUNTING--An account used to
Although as a Storekeeper (SK), you are not an
maintain records of payments to civilian and military
accountant or bookkeeper, you will often account for
personnel of the Navy.
large amounts of public funds in the form of materials
and stores. You are also involved in the preparation
For accounting purposes, Navy activities are
and processing of requisitions that constitute an
designated either shore activities or operating forces.
expenditure of public funds. In addition, in keeping
As a general rule, shore activities perform all of the
s h i p 's o p e r a t i n g t a rg e t ( O P TA R ) r e c o r d s a n d
accounting functions listed above. In the interest of
submitting required reports, you are accounting for
economy, large shore activities frequently perform
some of these functions for the smaller activities.
Accounting for material and accounting for cash
The Navy expends money from one of two major
are basically the same. All government accounting is
classifications, appropriations or funds. This chapter
performed with the objective of guaranteeing that
explains the purpose and use of the two classifications
expenditures are made according to the desires
so that you have some understanding of what
expressed by Congress when the program was
appropriations and funds are, and the difference
approved and the funds appropriated. According to
t h i s o b j e c t ive , r e c o r d s m u s t b e ke p t s o t h a t
transactions can be examined at a later date and
reconstruction of events made. Also within this
objective, the disposition of funds and material must
Learning Objective: Recall the purpose of
a p p ro p r i a t i o n f u n d i n g t o a c c o m p l i s h
understand if you have some knowledge of the overall
operational and maintenance functions.
financial operation of the government.
An appropriation is an authorization by an Act of
As a Storekeeper, you need to know the types of
Congress to incur obligations for a specified time and
accounting and their uses in the Navy. They are as
purpose and to make payments out of the Treasury. It is
in this form that the Navy receives money to pay for
A P P R O P R I AT I O N A C C O U N T I N G -- A n
ships and the cost of their operation and maintenance.
account of how much money has been spent, how much
It also covers the cost of training, the pay for those who
is obligated, and how much is available under each
operate them, and the money to operate the shore
appropriation or subdivision (e.g., operating budget).
establishment that supports the fleet.