FINANCIAL MANAGEMENT POLICY MANUAL

applies regardless of the fiscal year of the authorization or
appropriation. Cost increases that exceed current or past
reprogramming thresholds due solely to final settlement of contractor
claims do not require approval prior to reprogramming. Any project
being completed in its entirety with funds that are no longer available
for incurring new obligations will not be subject to reprogramming
thresholds. Project increases, in this case, are allowable only for valid
upward price adjustments that exclude any work not in the scope of the
original contract. See par. 074500-3 for congressional and statutory
limitations. Under current procedures, 25 percent of the total amount
authorized for minor construction may be reprogrammed into the
minor construction account. In addition, under the Appropriation
language, funds may be reprogrammed into planning and design. Both
actions require congressional approval as discussed above.
3. EXECUTION.
a. Program-Year Concept.
The MCON appropriation is controlled on a program-year and
construction project basis. A program-year consists of all programs
budgeted and approved for funding a specific budget year. Within
scope of program, cost changes are funded from the program year
account under which the basic transaction occurred.
b. Analysis of Unliquidated Obligations.
Each funds administering office will conduct a continuous program of
analyzing and validating unliquidated obligations, continuing those
which are essential, and expeditiously terminating those which are not
essential. Additional information is provided in the current issuance of
NAVCOMPTINST 7040.37B.
(Change 64)
Section II:
MILITARY CONSTRUCTION, NAVAL RESERVE
074520 SCOPE
1. GENERAL.
The Military Construction, Naval Reserve (MCNR) appropriation
provides for the establishment or development of facilities for the training
and administration of the Reserve Forces of the Navy and Marine Corps,
including projects programmed for construction on land that is not in the
inventory of the Department of Defense. Each new construction project
must be a single undertaking which includes the cost of all construction
work to produce a complete and usable facility. Similarly, a construction
Financial Management Policy
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