BY ORDER OF THE SECRETARY OF THE AIR FORCE AIR FORCE INSTRUCTION 65-601 ...

403 Pages·2012·2.86 MB·English

BY ORDER OF THE AIR FORCE INSTRUCTION 65-601,
SECRETARY OF THE AIR FORCE VOLUME 1
16 AUGUST 2012
Financial Management
BUDGET GUIDANCE AND PROCEDURES

COMPLIANCE WITH THIS PUBLICATION IS MANDATORY
ACCESSIBILITY: Publications and forms are available for downloading or ordering on the e-
Publishing website at www.e-Publishing.af.mil
RELEASABILITY: There are no releasability restrictions on this publication.
OPR: SAF/FMBMM Certified by: SAF/FMB
(MGen Edward L. Bolton, Jr.,)
Supersedes: AFI65-601V1, 3 March 2005 Pages: 403

This instruction aligns with and implements AFPD 65-6, USAF Budget Policy. Volume 1
contains rules and procedures for using Air Force appropriated funds. In cases of conflict with
other Air Force instructions or policy directives, the funding propriety rules stated here take
precedence. This publication applies to all military and civilian Air Force personnel, including
the US Air Force Reserve, Air National Guard (ANG), and the Civil Air Patrol.
Refer recommended changes and questions about this publication to SAF/FMBMM using the AF
Form 847, Recommendation for Change of Publication; route AF Form 847s from the field
through the appropriate functional‘s chain of command. Ensure that all records created as a
result of processes prescribed in this publication are maintained in accordance with AFMAN 33-
363, Management of Records, and disposed of in accordance with the Air Force Records
Disposition Schedule (RDS) located at https://www.my.af.mil/afrims/afrims/afrims/rims.cfm.
SUMMARY OF CHANGES
This document is substantially revised and must be reviewed in its entirety.

Chapter 1—FINANCIAL MANAGEMENT IN THE AIR FORCE 22
1.1. Overview. ............................................................................................................... 22
1.2. Applying This Instruction. ..................................................................................... 22
1.3. Responsibilities. ..................................................................................................... 22
1.4. Related Guidance. .................................................................................................. 22
2 AFI65-601V1 16 AUGUST 2012
Chapter 2—WARRANTS, APPORTIONMENTS, TRANSFERS, AND
REPROGRAMMING 23
2.1. Overview. ............................................................................................................... 23
2.2. Responsibilities: ..................................................................................................... 23
2.3. Reprogrammings: ................................................................................................... 23
2.4. Congressional New Start Notification Procedures. ................................................ 24
2.5. Deferrals and Rescissions. ..................................................................................... 26
Chapter 3—BUDGET AUTHORIZATION, ALLOCATIONS, AND ALLOTMENTS 27
3.1. Administering Budget Authority Documents: ....................................................... 27
3.2. Basis for Budget Authorizations: ........................................................................... 28
3.3. Expired Year Budget Authorizations. .................................................................... 28
3.4. Using Allocations and Suballocations: .................................................................. 28
3.5. Using Allotments and Suballotments: ................................................................... 29
3.6. Issuing Budget Authorizations and Allocations. .................................................... 29
3.7. Operating Centrally Managed Allotments (CMA): ............................................... 31
3.8. Year-End Adjustments: .......................................................................................... 32
3.9. Using AF Form 401, Budget Authority/Allotment: ............................................... 33
3.10. Locally Prescribed Forms and Formats. ................................................................ 34
3.11. Emergency Funding Actions. ................................................................................. 35
Figure 3.1. Designation of Appropriation Managers. .............................................................. 35
Chapter 4—BUDGETING AND FUNDING GUIDANCE FOR VARIOUS
APPROPRIATIONS 37
Section 4A—-Obligating Funds During the Last Two Months of the Fiscal Year. 37
4.1. Applying the 20-Percent Limit on Obligations. ..................................................... 37
Figure 4.1. Exceptions to the 20-Percent Limit on Obligations in August and September. ..... 37
4.2. This paragraph intentionally left blank. ................................................................. 37
Section 4B—Information Technology Equipment (ITE) and Resources 38
4.3. Budgeting and Funding for General Purpose ITE. ................................................ 38
4.4. O&M Funded Facilities and Activities. ................................................................. 39
4.5. RDT&E Funded Facilities and Activities. ............................................................. 41
4.6. Defense Working Capital Fund (DWCF) Facilities and Activities. ...................... 41
4.7. Site Preparation. ..................................................................................................... 41
Table 4.1. Funding for Information Technology Equipment (ITE) Site Preparation. ............ 41
AFI65-601V1 16 AUGUST 2012 3
4.8. Embedded Computers. ........................................................................................... 43
4.9. Funding Other Equipment with Computers. .......................................................... 44
4.10. Information Technology (IT) – Summary Considerations. ................................... 44
Table 4.2. Information Technology – Major Considerations (not sequential). ....................... 44
Section 4C—Honoraria 45
4.11. Approving Honoraria and Speaking Fees. ............................................................. 45
Table 4.3. Honoraria Approval Thresholds. ........................................................................... 45
Section 4D—Emergency and Special Program (ESP) Codes 46
Table 4.4. Assigning ESP Codes. ........................................................................................... 46
4.12. Reserved For Future Use. ...................................................................................... 46
4.13. Using ESP Codes: .................................................................................................. 46
Section 4E—Technical Data 46
4.14. Financing the Procurement and Printing of Technical Data. ................................. 47
4.15. Funding Engineering Drawing Requirements: ...................................................... 48
4.16. Commercial Manuals. ............................................................................................ 48
4.17. Technical Data for Replenishment Spares Procurement. ....................................... 48
4.18. Technical Data for Common Support Equipment. ................................................. 49
Section 4F—Space Launch Support Services 49
4.19. Financing Launch Services. ................................................................................... 49
4.20. Propellants Funding. .............................................................................................. 49
Section 4G—Organizational, Intermediate, and Depot Logistic Support Provided By Contractors 49
4.21. Funding Contractor Support Programs: ................................................................. 49
4.22. Determining the Funds Chargeable. ...................................................................... 51
4.23. Financing Prompt Payment Charges: ..................................................................... 51
4.24. Assigning Data Elements: ...................................................................................... 52
Section 4I—Telephone System Costs 53
4.25. Funding Advance Deposits for Installation Costs of Telephone Cable Required
for New Family Housing. ...................................................................................... 53
4.26. Funding Other Telephone Activities: ..................................................................... 53
Figure 4.2. Funding for Installation and Maintenance of Telephone Wiring Used for
Commercial "Unofficial" Telephone Service. ....................................................... 55
Section 4J—USAF Heritage Program 57
4 AFI65-601V1 16 AUGUST 2012
4.27. USAF Heritage Program (USAFHP) and associated activities. ............................ 57
Section 4K—Ethnic and Holiday Observances, Traditional Ceremonies, and Entertainment 58
4.28. Ethnic and Holiday Observances Funding Guidance: ........................................... 58
4.29. Traditional Ceremonies. ......................................................................................... 58
4.30. Entertainment. ........................................................................................................ 60
Section 4L—Awards, Award Ceremonies and Gifts 61
4.31. Awards and Gifts. .................................................................................................. 61
4.32. Civilian Performance Awards. ............................................................................... 64
4.33. Refreshments at Awards Ceremonies. ................................................................... 64
Section 4M—Chapel and Chaplain Programs 65
4.34. Funding Guidance. ................................................................................................. 65
Section 4N—Criteria for Determining Expense and Investment Costs 66
4.35. Distinguishing Between Expense and Investment Costs. ...................................... 66
4.36. Investment Cost Decision. ..................................................................................... 66
Figure 4.3. Decision Making Factors for Investment Cost. ..................................................... 66
4.37. Application. ............................................................................................................ 68
4.38. Programmatic Directives. ...................................................................................... 68
4.39. Accounting. ............................................................................................................ 68
4.40. Fee/Royalty Purposes. ........................................................................................... 68
4.41. Excess Fees/Royalties. ........................................................................................... 68
4.42. Accounting Codes. ................................................................................................. 68
Section 4P—Other Guidance 71
4.43. Personalized Stationery. ......................................................................................... 68
4.44. Business and Greeting Cards: ................................................................................ 69
4.45. Housing Damage Liability: .................................................................................... 69
4.46. Buying Books, Periodicals, Newspapers and Pamphlets: ...................................... 70
4.47. Funding Consecutive Overseas Tours. .................................................................. 70
4.48. Appliances and Furnishings. .................................................................................. 70
4.49. Retiree Activities Programs. .................................................................................. 70
Section 4P—Meals, Conferences, Training, and Fees 71
4.50. Use of Appropriated Funds for Meals and Light Refreshments. ........................... 71
4.51. Funding for Air Force Sponsored Conferences. .................................................... 72
AFI65-601V1 16 AUGUST 2012 5
4.52. Non-government Sponsored Conferences. ............................................................ 73
4.53. Government (non-Air Force) Sponsored Conferences. ......................................... 73
4.54. Avoiding Double Recovery for Meals. .................................................................. 73
4.55. Scientific, Technical, and Professional Symposiums, Conferences, and Similar
Meetings. ................................................................................................................ 74
4.56. Veterinary Services: ............................................................................................... 74
4.57. Membership in Professional Organizations. .......................................................... 74
4.58. Special Drinking Water. ......................................................................................... 75
4.59. CREEK SWEEP Credits. ....................................................................................... 75
4.60. Licenses and Certificates for Military Members. ................................................... 76
4.61. Service Contracts Crossing Fiscal Years. .............................................................. 76
4.62. Air Navigation and Overflight Fees. ...................................................................... 77
4.63. Landing and Parking Fees. ..................................................................................... 77
4.64. Funding for Athletic Supplies and Fitness Equipment. ......................................... 77
4.65. Real Property Damage Recovery. .......................................................................... 77
4.66. Undefinitized Contractual Actions (UCA). ........................................................... 78
4.67. U.S. Flag for Active Duty Military Retirees. ......................................................... 78
4.68. Memorials and Monuments. .................................................................................. 79
4.69. Cable TV in Dormitories. ...................................................................................... 79
4.70. Heart Link Program. .............................................................................................. 79
4.71. Temporary Authority to Hire Contract Security Guards. ....................................... 79
4.72. Exemption of Certain Firefighting Contracts from Prohibition on Contracts for
Performance of Firefighting Functions. ................................................................. 79
Section 4Q—Planning and Tracking Obligations and Outlays 80
4.73. Supplementing OSD Appropriations (97X) with O&M 3400 Funds. ................... 80
4.74. Submitting Outlay Plans. ....................................................................................... 80
4.75. Planning: ................................................................................................................ 80
4.76. Tracking. ................................................................................................................ 80
Chapter 5—APPROPRIATION REIMBURSEMENTS AND REFUNDS 82
Section 5A—Appropriation Reimbursements 82
5.1. General Reimbursement Guidance: ....................................................................... 82
5.2. Responsibilities for Developing Anticipated Reimbursements: ............................ 82
5.3. Responsibilities for Earning Anticipated Reimbursable Programs. ....................... 83
6 AFI65-601V1 16 AUGUST 2012
5.4. Funding Procedures and Application. .................................................................... 83
Table 5.1. 3010/3011/3020/3080 Appropriations To Be Charged or Credited For The
Purchase or Sale of Investment Items To Fill Customer Orders. ........................... 85
5.5. Billing and Collecting Small Amounts: ................................................................. 87
5.6. Reporting Instructions: .......................................................................................... 88
5.7. Statutory Authorities. ............................................................................................. 88
5.8. Obtaining Materiel, Work, or Services from Others. ............................................. 88
5.9. Deobligation, Reimbursable Economy Act Orders (31 U. .................................... 89
5.10. Security Assistance Program Reimbursements. ..................................................... 89
Section 5B—Appropriation Refunds 89
5.11. Using Refunds. ....................................................................................................... 89
5.12. Examples of Appropriation Refunds: .................................................................... 90
5.13. Refunds Receivable. .............................................................................................. 91
5.14. Disposing of Refunds. ............................................................................................ 91
5.15. Other Refunds. ....................................................................................................... 91
Section 5C—Administrative and Accessorial Costs 92
5.16. Special Guidance. .................................................................................................. 92
5.17. Charging Accessorial Costs. .................................................................................. 92
Figure 5.1. Accessorial Charge Rates. ..................................................................................... 93
5.18. Contract Cost Billings. ........................................................................................... 94
Chapter 6—EXPIRED AND CANCELED APPROPRIATIONS 95
6.1. Applying this Chapter. ........................................................................................... 95
6.2. Applying Changes in the Appropriation Life Cycle: ............................................. 95
6.3. Determining Contract Changes and Upward Obligation Adjustments (UOA). ..... 95
Figure 6.1. Decision Tree - Contract Changes and Obligation Adjustments. .......................... 100
6.4. Using Current and Expired Appropriations. .......................................................... 101
6.5. Controlling Current Appropriation Limitations: .................................................... 102
6.6. Approving Upward Obligation Adjustments and Contract Change Requests: ...... 104
6.7. Processing Unrecorded Obligations and Payments: .............................................. 104
6.8. Complying with the Antideficiency Act. ............................................................... 105
6.9. Handling Foreign Currency Fluctuation Obligations and Payments: .................... 106
6.10. Using Other DoD Appropriations: ......................................................................... 106
6.11. Obligating Upward Adjustments in the Accounting System: ................................ 107
AFI65-601V1 16 AUGUST 2012 7
6.12. Reviewing Unliquidated Obligation (ULO) Balances in the Expired Years: ........ 107
6.13. Charging Prior Year Obligated Due-Outs: ............................................................ 108
6.14. Reprogramming. .................................................................................................... 109
6.15. Complying With Control Levels in Expired Accounts: ......................................... 110
6.16. Collections. ............................................................................................................ 111
6.17. Monthly and Fiscal Year-end Reporting Requirements for Transactions under
$100,000. ............................................................................................................... 111
Chapter 7—SUPPORT GUIDANCE 113
Section 7A—Overview 113
7.1. Applying This Chapter. .......................................................................................... 113
7.2. Complying with Statutory Authority. .................................................................... 113
7.3. Responsibilities: ..................................................................................................... 113
Section 7B—Intraservice Relationships (Within the Air Force) 115
7.4. General Host-Tenant Responsibilities: .................................................................. 115
Figure 7.1. Host-Tenant Funding Responsibility by Type of Service. ..................................... 115
7.5. Handling Unfunded Requirements. ....................................................................... 120
7.6. This paragraph intentionally left blank. ................................................................. 121
7.7. This paragraph intentionally left blank. ................................................................. 121
7.8. Defense Working Capital Fund (DWCF): ............................................................. 121
7.9. Disposing of Turn-in Credits: ................................................................................ 122
7.10. Billing Tenants: ...................................................................................................... 122
7.11. Making Jurisdictional Transfers. ........................................................................... 123
7.12. Reimbursing Landing Fees and Base Maintenance for Transient Aircraft. ........... 123
7.13. Reserved for future use. ......................................................................................... 124
7.14. Investigating Aircraft Accidents, Including Remotely Piloted Aircraft, and
Environmental Cleanup. ........................................................................................ 124
Section 7C—Interservice Relationships 124
7.15. Overview. ............................................................................................................... 124
7.16. Cross-Servicing: ..................................................................................................... 124
7.17. Determining Cross-Servicing Charges. ................................................................. 125
7.18. Accepting Cross-Service Orders: ........................................................................... 126
7.19. Financing Cross-Service Orders: ........................................................................... 127
7.20. Processing Commitments and Obligations. ........................................................... 129
8 AFI65-601V1 16 AUGUST 2012
7.21. Resolving Service Disagreements. ......................................................................... 129
7.22. Joint-Use Guidance. ............................................................................................... 130
Section 7D—Support of Non-DoD Departments and Agencies 130
7.23. Overview. ............................................................................................................... 130
7.24. Financing Economy Act Orders. ............................................................................ 131
7.25. Executing Economy Act Orders. ........................................................................... 131
Table 7.1. Authorized Advance Payment Economy Act Orders. ........................................... 132
7.26. Economy Act Order Procedures: ........................................................................... 132
7.27. Other Methods of Funding. .................................................................................... 133
7.28. Transactions with GSA for Leased Facilities: ....................................................... 133
7.29. Air Transportation Provided to Non-Defense Agencies: ....................................... 134
7.30. Terms for Support Agreements. ............................................................................. 134
Section 7E—Civil Air Patrol (CAP) and Air Force Civil Air Patrol Liaison Offices 134
7.31. Overview. ............................................................................................................... 134
7.32. Supporting CAP with the use of Appropriated Funds. .......................................... 134
7.33. Non-Allowable Expenses. ...................................................................................... 137
7.34. Supporting Air Force-CAP Liaison Offices. .......................................................... 137
Section 7F—Disaster Relief in the United States, Its Territories and Possessions 138
7.35. Overview: ............................................................................................................... 138
7.36. Air Force Responsibilities: .................................................................................... 138
7.37. Funding Procedures: .............................................................................................. 139
Section 7G—Disaster Relief in Foreign Countries 140
7.38. Overview. ............................................................................................................... 140
7.39. Air Force Guidance. ............................................................................................... 141
7.40. Funding Procedures. .............................................................................................. 141
7.41. Documentation Requirements. ............................................................................... 142
Section 7H—International Military Activities 142
7.42. Overview: ............................................................................................................... 142
7.43. Responsibility for National Support: ..................................................................... 143
Figure 7.2. Administrative Agents for National Support. ........................................................ 144
7.44. Cross-Servicing. ..................................................................................................... 145
7.45. Reimbursable Support: .......................................................................................... 145
AFI65-601V1 16 AUGUST 2012 9
7.46. Reimbursement Procedure: .................................................................................... 146
7.47. DoD Guidance. ...................................................................................................... 147
7.48. Paying United States Personnel: ............................................................................ 147
7.49. Costs Included and Excluded from International Budgets. .................................... 148
Section 7I—Use of Air Force Research and Test Facilities 151
7.50. Overview. ............................................................................................................... 151
7.51. Budgeting and Funding of the Air Force Research Laboratory (AFRL): .............. 151
7.52. Funding Responsibilities for Designated Major Range and Test Facility Base
(MRFTB) Activities. .............................................................................................. 153
Table 7.2. Major Ranges and Test Facilities. .......................................................................... 153
Section 7J—Support of Civil Disturbances 155
7.53. Funding Guidance: ................................................................................................. 155
Section 7K—Support of Civil Authorities in Airplane Hijacking Emergencies 156
7.54. Funding Guidance. ................................................................................................. 156
Section 7L—Support of the United States Secret Service 156
7.55. Statutory Basis and Implementing Directives: ....................................................... 156
7.56. Funding Guidance: ................................................................................................. 156
Section 7M—Joint-Use Facilities 156
7.57. Overview. ............................................................................................................... 156
7.58. Responsibilities for Military Construction. ............................................................ 157
7.59. Maintenance and Service Support. ........................................................................ 158
Chapter 8—AIR FORCE PROCUREMENT APPROPRIATIONS (57*3010, 57*3011,
57*3020, AND 57*3080) 159
Section 8A—General Guidance 159
8.1. Scope and Availability of Appropriations: ............................................................ 159
8.2. Depot Level Reparables (DLR): ............................................................................ 160
8.3. Full Funding. .......................................................................................................... 160
8.4. Weapon System Engineering. ................................................................................ 160
8.5. Exceptions: ............................................................................................................. 161
8.6. Modification Engineering. ..................................................................................... 161
8.7. Aircraft Structural Integrity Program (ASIP). ....................................................... 161
8.8. Retrofitting or Converting Aircraft: ....................................................................... 162
10 AFI65-601V1 16 AUGUST 2012
8.9. Modifying Aircraft to Drone Configuration. ......................................................... 162
8.10. Intercontinental Ballistic Missile (ICBM) Force. .................................................. 163
8.11. Missile Site Updating. ............................................................................................ 163
8.12. Logistic Support of Fixed Installed Missile Support Equipment. .......................... 163
8.13. Missile Modification or Reconfiguration. .............................................................. 163
8.14. Missile Propellants. ................................................................................................ 163
8.15. Investment Equipment for Major Range and Test Facilities. ................................ 163
8.16. Base Procured Investment Equipment (BPIE): ...................................................... 163
8.17. Finance the Following Items with 57*3080, BPAC 84501X Funds: ..................... 164
8.18. Do Not Finance the Following Items with 57*3080, BPAC 84501X Funds: ........ 165
8.19. Turn-Key Procurement: ......................................................................................... 165
Section 8E—Real Property Installed Equipment 165
8.20. Procuring Real Property Installed Equipment and Portable Equipment: ............... 166
8.21. Procuring and Installing Communications-Electronic Systems. ............................ 168
8.22. Equipment (Other than Communications Systems) Procured on an Installed Basis.
................................................................................................................................. 169
Section 8F—Production Activities 169
8.23. Government-furnished Expense Items to Production Contractors: ....................... 169
8.24. Pilot Production. .................................................................................................... 170
8.25. Costs for Closing Down a Production Line. .......................................................... 170
Section 8G—Guidance for Funding Maintenance and Modification 170
8.26. Financing Maintenance and Modifications: ........................................................... 170
8.27. Intentionally left blank. .......................................................................................... 173
Section 8H—Value Analysis and Engineering 173
8.28. Value Analysis of Spare Parts: .............................................................................. 173
Table 8.1. Appropriations to Charge for Value Analysis of Spare Parts. ............................... 173
8.29. Guidance for Funding Value Engineering (VE). ................................................... 174
8.30. Sharing VE Incentive and Program Requirement Clauses: ................................... 174
Section 8I—Other Investment Procurement Policies 176
8.31. Funding Test and Evaluation. ................................................................................ 176
8.32. Purchasing Information Technology Equipment (ITE). ........................................ 176
8.33. Funding the Local Manufacture of Investment Items. ........................................... 176