FM 1-06

FINANCIAL MANAGEMENT OPERATIONS

APRIL 2011 DISTRIBUTION RESTRICTION: Distribution for public release; distribution is unlimited.

HEADQUARTERS DEPARTMENT OF THE ARMY

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http:www.train.army.milhttp:www.us.army.mil

*FM 1-06

Field Manual Headquarters Department of the Army No. 1-06

Washington, DC, 4 April 2011

FINANCIAL MANAGEMENT OPERATIONS

Contents Page

PREFACE..............................................................................................................vi

INTRODUCTION ..................................................................................................vii

Chapter 1 FINANCIAL MANAGEMENT OPERATIONS .................................................... 1-1 Section I Financial Management Mission and Purpose ............................ 1-1 Principles of Financial Management .................................................................. 1-2 Financial Management Core Competencies ...................................................... 1-5 Section II Financial Management and the Sustainment Warfighting

Function............................................................................................................. 1-8 Financial Management and the Elements of Combat Power ............................. 1-9 The Fiscal Triad ................................................................................................ 1-10 Financial Management Support to Force Projection ........................................ 1-11 Section III Army Financial Management with Interorganizational

Partners (Joint, Multinational, Intergovernmental, Interagency, and

Nongovernmental) .......................................................................................... 1-12 Section IV Financial Management Support to Stability Operations ....... 1-15 Financial Management Supporting Tasks ........................................................ 1-16 Section V Financial Management Organizations, Responsibilities and

Organizational Relationships ........................................................................ 1-17 Strategic Financial Management ...................................................................... 1-18 Operational Financial Management ................................................................. 1-20 Tactical Financial Management ........................................................................ 1-28 Brigade Level Financial Management .............................................................. 1-37

Chapter 2 FUND THE FORCE............................................................................................ 2-1 Section I Appropriations/Authorization Process ....................................... 2-1 Administrative Control and Distribution of Funds ............................................... 2-3 Basic Appropriations That Fund the Army.......................................................... 2-5 The Legislative Proposal Process in Support of Contingency Operations ......... 2-7 Section II Fiscal Law ..................................................................................... 2-8 Basic Tenets of Fiscal Law ................................................................................. 2-8

Distribution Restriction: Distribution for public release; distribution is unlimited.

*This publication supersedes FM 1-06, 21 September 2006.

4 April 2011 i

Contents

Anti-Deficiency Act (ADA) ...................................................................................2-9 Section III Resource Management Support ...............................................2-10 Resource Management Support to Stability Operations...................................2-10 Funding Contingency Operations .....................................................................2-11 Strategic Resource Management .....................................................................2-13 Operational Resource Management .................................................................2-16 Tactical Resource Management .......................................................................2-17

Chapter 3 BANKING AND DISBURSING SUPPORT ........................................................3-1 Section I Banking Support ............................................................................3-1 Banking and Host Nation Support .......................................................................3-1 Cash Management..............................................................................................3-2 Economic Impact.................................................................................................3-3 Section II Disbursing Operations .................................................................3-3 Cash Verification .................................................................................................3-4 Reporting and Analysis .......................................................................................3-4 Irregularities in Disbursing Officer Accounts .......................................................3-4 Managing a Limited Depositary Account ............................................................3-5 Transfer of Accountability (Settlement) ...............................................................3-5 Types of Disbursing Support ...............................................................................3-5 Special Payments ...............................................................................................3-9 Miscellaneous Disbursing Support ....................................................................3-10 Disbursing Roles ...............................................................................................3-11

Chapter 4 PAY SUPPORT ..................................................................................................4-1 Section I Active Duty Pay..............................................................................4-1 Key FM Reports ..................................................................................................4-2 Separation of Duties............................................................................................4-2 Section II Reserve Component Pay..............................................................4-3 Mobilization/Demobilization ................................................................................4-4 Section III Case Management System .........................................................4-4 Types of CMS Cases ..........................................................................................4-4

Chapter 5 ACCOUNTING SUPPORT AND COST MANAGEMENT ..................................5-1 Section I Accounting Support ......................................................................5-2 Stages of a Transaction ......................................................................................5-3 Obligation Management ......................................................................................5-5 Strategic Level Accounting Support ....................................................................5-6 Operational Level Accounting Support ...............................................................5-7 Tactical Level Accounting Support ......................................................................5-8 General Fund Enterprise Business Systems (GFEBS) ......................................5-9 Section II Cost Management Support ..........................................................5-9 Cost Culture ......................................................................................................5-10 Cost Management Support ...............................................................................5-10 The Cost Management Process .......................................................................5-11 Cost Management Concepts ............................................................................5-15 Full Cost ............................................................................................................5-16 Cost Management During Contingency Operations .........................................5-17 Cost Estimates for Contingency Operations .....................................................5-18

FM 1-06 4 April 2011 ii

Contents

Contingency Cost Reporting ............................................................................ 5-19 Cost Collection ................................................................................................. 5-20

Chapter 6 PLANNING AND OPERATIONS ....................................................................... 6-1 Section I Planning ......................................................................................... 6-2 FM Planning Using the Military Decisionmaking Process (MDMP) .................... 6-3 Section II Preparation.................................................................................... 6-7 Troop Leading Procedures (TLP) ....................................................................... 6-7 Section III Execution ..................................................................................... 6-7 Command and Control ....................................................................................... 6-7 Financial Management Support Operations (FM SPO) ..................................... 6-8 Considerations in Support of the Procurement Process .................................. 6-10 Section IV - Assessment .........................