FINANCIAL MANAGEMENT POLICY MANUAL

one of three ways, as prescribed in OMB Circular A-94:
1. By conducting a separate lease-purchase analysis. This is
the only acceptable method for major acquisitions. A lease
represents a major acquisition if the acquisition represents a
separate budget line item or if the total purchase price of the
asset or group of assets to be leased exceeds $500 million.
2. By conducting periodic lease-purchase analyses of
recurrent decisions to lease similar assets used for the same
general purpose.
3. By adopting a formal policy for smaller leases and
submitting that policy for approval.
5. RELATIONSHIP WITH REVOLVING/MANAGEMENT FUNDS.
The criteria contained in this paragraph do not apply to
revolving/management funds since these funds are governed by separate
regulations. For example, NWCF activities are authorized to finance
certain industrial equipment classified as an investment. However, the use
of appropriations provided on a customer order to a NWCF activity is
governed by expense/investment criteria and other guidance and
restrictions governing the use of appropriations. For example, an
Operation and Maintenance, Navy funded customer order cannot be
utilized by a NWCF activity to finance customer equipment classified as
an investment.
(Change 67)
075002 ALIGNMENT OF COMMAND AND FUNDING
RESPONSIBILITIES
The establishment of command funding in the Department of the Navy had a
significant impact on the channels through which funding authority was made
available to ships and stations. One objective of reorganization was to change
the funding channels so as to effect, to the maximum extent possible, an
alignment of command and funding responsibility. The result was a
substantial transfer of funding authority from offices and systems commands
that provided functional supervision to those organizations that held
command. This permitted direct participation in the allocation of resources
for operational requirements by the Fleet Commanders and subordinate
commanders. It is now Department-wide basic budget and funding policy in
the operation and maintenance areas that the financial responsibilities parallel
responsibilities for command.
(Change 48)
Financial Management Policy
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