mandatory  to  make  sure  command  policy  and responsible fiscal decisions are made. In carrying out   their   responsibilities   for   sound   financial management,   department   heads   must   do   the following: l    Help  develop  the  budget  to  make  sure resource requirements for their respective areas of  responsibility  are  identified  and  incorporated in  the  command  plan. l    Monitor  department  expenditures. .   Make   sure   obligation   validations   are conducted  on  a  monthly  basis  on  their  requisi- tions. .   Turn   in   any   excessive   material   to   the supply department. Supply  Officer The   supply   officer   is   responsible   to   the commanding  officer  for  the  proper  performance and  administration  of  financial  management responsibilities.  The  supply  officer  must  make sure   funds   are   properly   managed,   used,   and accounted  for  on  a  daily  basis.  He  or  she accomplishes  this  by  acquiring  a  thorough understanding of TYCOM financial management policy.   The   supply   officer   has   to   effectively communicate  this  policy  to  the  commanding officer  and  department  heads  and  to  closely monitor  execution  within  the  budget  plan. OBLIGATION PRIORITIES.— As the lead- ing  petty  officer  or  chief,  you  should  assist  the supply officer in setting up the obligation priorities for  your  OPTAR  funds.  You  must  decide  what material is to be ordered and in what order. You must  obligate  material  in  the  following  order: Medical/dental  supplies  and  services Damage   control Lifesaving,   personnel   safety,   and   fire- fighting material Repair  parts  and  consumables  for  direct turnover   (DTO) Replenishment  of  your  stock These items are just part of the obligation of funds that  you  must  order.  Your  priority  list  can  be 3-7 endless. It depends on the needs of your activity or  unit. PHASED  REPLACEMENT  PROGRAMS.— Various  items  on  board  ships  have  limited  service life. Generally, these items are in constant use and have   predictable   wear,   destruction,   or   loss patterns.  Piecemeal  replacement  will  usually  lead to  wasteful  expenditure  of  funds,  shortage  of  gear, and  lack  of  financial  control.  By  establishing  a Phased  Replacement  Program,  you  will  make  sure of  better  availability  and  financial  control  over expenditures. Some examples of phased replace- ment  items  are  mooring  lines,  life  jackets,  foul weather   gear,   galley   equipment,   fire   hoses, mattresses  and  bedding,  special  clothing,  and laborsaving  tools  and  equipment. Any  item  that  has  a  limited  service  life  and requires  fairly  frequent  (1  to  3  years)  replacement can be included in this program. The dollar impact of  replacement  on  ship’s  OPTAR  should  be  the governing factor in deciding whether this type of control  is  needed. A well-run supply department will require each department  head  to  submit  a  listing  of  equipment to  be  replaced  yearly.  There  is  a  form  (fig.  3-3) that  each  department  head  should  fill  out  and submit  with  the  department’s  annual  budget  to the  supply  officer.  These  forms  can  be  used  as a database to request any additional funds from your   TYCOM. Departmental Budget Departmental  budgets  are  mandatory.  Com- manding officers should make sure the budget is used   and   adhered   to.   To   achieve   the   proper effectiveness,  an  OPTAR  budget  system  must place  the  responsibility  for  the  priority  of  the expenditures squarely on the individual depart- ment heads. Each department head must have full knowledge of the budget so he or she can obligate his  or  her  budget  properly. One way you can make sure each department gets a fair share of the funds is to do a percentage of what each had spent of the previous quarter’s funds. Even so, expenditures will arise that are not planned. What this means is a department will occasionally  be  unable  to  operate  within  its allotted  budget.  This  is  why  you  should  pro- vide  a  contingency  fund  belonging  to  the  com- manding  officer  for  these  types  of  unexpected costs.