FINANCIAL MANAGEMENT POLICY MANUAL

other subdivision of the appropriation to the head of another office,
bureau, or command when that organization has been designated as
administering office for the budget activity. The suballocation document
states that all financial control of jurisdiction of, and responsibility for
amounts allocated are passed to the recipient. Generally, suballocation is
made to an official who exercises overall administrative responsibility for
the execution of the programs funded by the applicable subdivision of the
appropriation. Normally, the suballocation holder issues allotments to
another official in the chain of command who exercises immediate
supervision of some portion of the program for which the suballocation is
provided. Suballocations are used only in the instances of appropriations
not administered under the Resource Management Systems (RMS)
concept of operating budgets.
3. ALLOTMENT.
An allotment is an authorization granted within and pursuant to an
allocation or suballocation for the purpose of incurring commitments,
obligations, and expenditures. An allotment may be made to a subordinate
of a headquarters component by name or to the commanding officer of a
shore activity by title. Allotments are used only for appropriations not
administered under the RMS concept of operating budgets. Suballotments
may be issued by an allotment holder to transfer responsibility for
administration of some portion of the funds to another activity. In such
cases, the suballotment is in a fixed amount and carries the same
responsibility for administrative control as a primary allotment.
4. OPERATING BUDGET.
The operating budget under the RMS concept consists of an approved
operating plan that is the basis of authorization and financial control of
resources available for the execution of program or programs of the
indicated organizational or command level. The authorizations under
RDT&E,N and the operation and maintenance accounts vary in format
but both identify appropriation obligational authority for direct program
costs and an amount for any approved reimbursable program, which may
be increased to the extent of accepted reimbursable orders which qualify
for automatic apportionment. In addition, military personnel expense
authority is indicated as necessary. Footnotes on the operating budget
state the nature and amount of all administrative and statutory limitations.
5. OPERATING TARGET.
Operating targets are in the nature of planning estimates that provide a
convenient mechanism for measuring performance of subordinate
commands or departments of activities that hold operating budgets or for
measuring performance of command levels that hold allotments or
suballotments. The operating target grantor retains the responsibility for
administrative control of the funds.
Financial Management Policy
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