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Advances vs. Reimbursements Sam Peal Budget Analyst WVARNG-C&FMO

National Association of State Military Resource Managers (NASMRM) 14 th Annual Symposium Nashville, Tennessee. Advances vs. Reimbursements Sam Peal Budget Analyst WVARNG-C&FMO. Advances vs. Reimbursements. Ref: NGR 5-1/ANGI 63-101 Purpose of an Advance :

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Advances vs. Reimbursements Sam Peal Budget Analyst WVARNG-C&FMO

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  1. National Association of State Military Resource Managers (NASMRM)14th Annual SymposiumNashville, Tennessee Advances vs. Reimbursements Sam Peal Budget Analyst WVARNG-C&FMO

  2. Advances vs. Reimbursements Ref: NGR 5-1/ANGI 63-101 Purpose of an Advance: An Advance payment is the mechanism by which the funds identified in a Master Cooperative Agreement (MCA) or in Military Construction Cooperative Agreement (MCCA) are paid to the State in advance ofupcoming expenditures.

  3. Advances vs. Reimbursements Purpose of a Reimbursement: A Reimbursement payment is the mechanism by which the funds identified in a Master Cooperative Agreement (MCA) or in Military Construction Cooperative Agreement (MCCA) are paid to each State after the expenditures are incurred.

  4. Advances vs. Reimbursements Criteria for an Advance: The Activity Manager (or State Designee) for each Appendix of a MCA or MCCA must forecast at least 30 days out all upcoming expenditures.

  5. Advances vs. Reimbursements Criteria for an Advance: The Activity Manager (or State Designee) must determine if there is a balance from the previous 30 days to cover those expenditures or if a new advance request is needed. No excessive unused balance should be carried over from month to month

  6. Advances vs. Reimbursements Advance Request Process: The Activity Manager (or State Designee) will generate the Advance Request letter, for the amount forecasted The letter must be: Concurred by Appendix Program Manager Signed by the State Financial Rep Submitted for approval to the USPFO.

  7. Advances vs. Reimbursements Advance Request Process: Once approved at the USPFO, the request is submitted to DFAS-IN (Indiana) for their approval and authorization. Once authorized and approved at DFAS, the payment is made electronically from the U.S. Treasury to the State Treasury.

  8. Advances vs. Reimbursements Advance Request Process: Once the payment arrives at the State Treasury it is electronically deposited into the Adjutant General’s Revenue Account for Federal Cooperative Agreements.

  9. Advances vs. Reimbursements Advance Ceiling: USPFO requires each Activity Manager to develop a Advance Ceiling Forecast. It is a per month projection of required advance dollars to span the fiscal year.

  10. Advances vs. Reimbursements Advance Ceiling: Takes into account known reoccurring expenses: Utilities Payroll Service agreements USPFO may provide flexibility to adjust the ceiling if expenditures come in above or below previous projections.

  11. Advances vs. Reimbursements Advance Ceiling: Example 1 – Storefront Recruiting Appendix 9 of the MCA may be advanced in 1/12th estimates for known monthly lease payments. Example 2 – BASOPs/SRM Appendix 1 of the MCA may represent a gradual step process whereas the largest advance payments are made during the last quarter of fiscal year to coincide with the summer SRM programs Example 3 – MILCON MCCA Advances will be more of a bell curve whereas the largest payments are made during the height of the project and smaller payments at the beginning and close of the contract.

  12. Advances vs. Reimbursements Returning Unused Advance Balance: When all remaining unliquidated obligations are verified and paid, the State initiates the final modification to close-out each Appendix. At which time all unused Advance Balance for each Appendix of the MCA or MCCA is identified and returned to the Federal Government via a state check payable to the U.S. Treasury.

  13. Advances vs. Reimbursements Returning Unused Advance Balance: Unused Advance Balance cannot be carried over to another fiscal year or another agreement within the same fiscal year.

  14. Advances vs. Reimbursements Advantages to Advances: Provides a State the ability to pay bills without the undue burden of depleting their general revenues. Most obvious being MILCON MCCA(s) which generate invoices over 500K -5M $$.

  15. Advances vs. Reimbursements Advantages to Advances: Provides a greater tool for managing cash flow to the State rather than using strictly a reimbursement payment method.

  16. Advances vs. Reimbursements Advantages to Advances: Historically, Advance payments are approved, processed and received within 7-10 business days to the State Treasury. Whereas, Reimbursement payments have taken longer to be processed and received.

  17. Advances vs. Reimbursements Questions??

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