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Page Title: Chapter 2 Appropriation Accounting
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CHAPTER 2 APPROPRIATION  ACCOUNTING Appropriations are broad categories or blocks of funds authorized by Congress to be used for specific purposes  by  various  government  departments.  Because appropriations  are  made  for  specific  purposes  and cannot  be  expended  for  other  purposes,  accounting  for appropriations  is  an  essential  part  of  the  Navy’s financial   management   system.   In   fact,   it   is   the appropriations authorized by Congress to be made from the general fund that support the Navy’s operations and strategic  capability. The  purpose  of  this  chapter  is  to  examine  the various  components  of  appropriation  accounting.  As  a senior Disbursing Clerk (DK), you will become directly involved in this area of responsibility because you will be required to report all disbursements and collections accurately by the appropriation itself and by the various components of the accounting data. The information in this chapter is designed to provide you with an overview of  these  responsibilities  and  procedures.  After  studying this  chapter,  you  should  be  able  to  describe  the components  of  appropriation  accounting  and  their individual  and  collective  roles  in  the  Navy’s  financial management   system. NAVY FINANCIAL MANAGEMENT Before   discussing   the   components   of   the appropriations and the related accounting data, let’s take a look at some basic aspects of the Navy’s financial management system, such as the fiscal year and the Five-Year  Defense  Program  (FYDP). FISCAL YEAR The  fiscal  year  for  the  federal  government  begins on 1 October of each calendar year and runs through 30 September of the following calendar year. The fiscal year is designated by the calendar year in which it ends. For example, the fiscal year for 1997 will begin on 1 October 1996 and will end on 30 September 1997. Although the time frame for a fiscal year is the 12 months from 1 October of one calendar year through 30 September   of   the   following   calendar   year,   the operational scope of the fiscal year is much broader. During a fiscal year, several different transactions will take  place.  Some  of  these  transactions  will  be  related to the current fiscal year. Others, however, will be related to the previous fiscal year. In fact, some will even concern future fiscal years. This means that while transactions  for  the  current  fiscal  year  are  being processed,  appropriations  for  previous  fiscal  years  are still  being  cleared  or  settled.  Simultaneously,  the planning and development of budgets for future fiscal years may also be taking place. This is why you, as a senior DK, must be aware of all transactions associated with  budgeting,  appropriation  accounting,  and  the significance of the fiscal year. The dimensions of the Navy budget are indeed broad for any one fiscal year. This  is  one  of  the  reasons  that  the  Department  of Defense  instituted  the  FYDP. THE FIVE-YEAR DEFENSE PROGRAM The FYDP establishes the planned force structure and financial levels for the military departments for a 5-year  period.  To  allow  for  the  making  of  careful decisions, the FYDP provides a method by which the information  the  military  departments  will  use  for planning,   programming,   and   execution   can   be accumulated,  grouped,  and  controlled  according  to specific meaningful categories called programs. At the time  this  training  manual  (TRAMAN)  was  published, the FYDP consisted of the 10 programs shown in figure 2-1.  These  10  programs  provide  a  framework  from which  the  Navy  develops  its  annual  budget  requests. Figure 2-1.-Ten programs used in the Five-Year Defense Program. 2-1

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