FINANCIAL MANAGEMENT POLICY MANUAL

3. POLICY.
Functional transfers should be timed to permit complete coordination and
mutual agreement between the affected headquarters components.
Although requests for approval of functional transfers within the DoN may
be submitted at any time, the optimal time for submission of functional
transfer requests is between submission of the President’s Budget and the
DoN budget submission beginning the subsequent cycle. Functional
transfers submitted at other times during the budget cycle are often
affected by DoN or OSD adjustments to the programs involved; these
adjustments may impede claimant agreement on the correct level of
resources to be transferred. Regardless of timing, all proposed functional
transfers must be coordinated with the respective division within the
Office of Budget (FMB), and each will be reviewed and addressed
separately by FMB.
4. PROCEDURE FOR APPROVAL
a. General.
Proposed functional transfers are only to be submitted by Budget
Submitting Office (BSO) Comptrollers. To be valid for consideration,
they must be submitted by the gaining BSO on the NC-4 exhibit,
which must be signed by appropriate personnel of both the gaining and
losing activities. A discussion of functional transfers and the NC-4
exhibit is contained in Part 1, Chapter 6 of the Budget Guidance
Manual (BGM). The template and instructions for this exhibit can be
found at the NHBS web site. In particular, the exhibit should include a
narrative description of the function to be transferred and the rationale
for the transfer (e.g. reflects mandate or decision by higher authority,
technical correction, fact of life adjustment, results in improvement in
organizational or operational efficiency, cost savings, etc.).
b. Inter-Component Transfers.
When transfers of funds between DOD components are necessary as a
result of a transfer of functions under Title 10, United States Code,
Section 125, it will be the responsibility of the receiving DOD
Component to request that the USD (C) obtain the necessary
determination and approval for the transfer of resources. The request
shall be prepared in accordance with Title 10, United States Code,
Section 126 and the provisions of Chapter 3 of the Financial
Management Regulation and contain a statement that the DOD
Components concerned have agreed to the amounts proposed for
transfer. A copy of the Secretary of Defense approval of the transfer
of functions (under 10 U.S.C. 125) should accompany the request.
For inter-component transfers, the BSO should submit an NC-4 exhibit
signed by Comptroller officials of both the receiving and gaining
activities. If necessary, FMB will identify the appropriate signing
Financial Management Policy
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