Potential impact of the elimination of the M Account on the Department of the Navy

150 Pages·2.4 MB·en_US

by  Fegurgur, Ben A.;Marinello, Anthony F.;Harshman, Richard A.

DUDLEY KNOX LIBRARY
NAVAL POSTGRADU c SCHOOl
MONTEREY CA 93943-5101

NAVAL POSTGRADUATE SCHOOL
Monterey, California
THESIS
POTENTIAL IMPACT OF THE ELIMINATION OF THE M
ACCOUNT ON THE DEPARTMENT OF THE NAVY
by
Ben A. Fegurgur
and
Anthony F. Marinello
December 1991
Thesis Advisor: Professor Richard A. Harshman
Approved for public release; distribution is unlimited
TPc:q7P1

REPORT DOCUMENTATION PAGE
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11 TITLE (IncludeSecurityClassification)
Potential Impactofthe Elimination ofthe M Accounton the Departmentofthe Navy (Unclassified)
12 personalauthor(S) Fegurgur, Ben A and Marinello, Anthony F.
13a TYPE OF REPORT 13b TIMECOVERED 14 DATEOF REPORT(year, month,day) 15 PAGE COUNT
Master'sThesis From To December 1991 140
16 SUPPLEMENTARY NOTATION
The views expressed in this thesisare those ofthe author and do not reflect the official policy or position ofthe
DepartmentofDefense or the US Government
17 COSATICODES 18 SUBJECT TERMS(continueonreverseifnecessaryandidentifybyblocknumber)
FIELD GROUP SUBGROUP Appropriations, M Account, Merged Surplus Account, Expired
Appropriations
19 ABSTRACT(continueonreverseifnecessaryandidentifybyblocknumber)
This thesis addresses the impact ofPublic Law 101-510, which eliminated the M Account,on financial
management within the Departmentofthe Navy. The M Account wasestablished for the paymentofprior year
obligations from appropriations which had lapsed. The M Account process provides the necessary flexibility to Navy
contractadministrators and financial managers to manage resources related to theclosure ofprioryear contracts.
Public Law 101-510 was enacted in 1990 based on congressional concern over DepartmentofDefense
managementofthe M Account. This study examines this law and the impactthis legislation will haveon future
financial decision-makingin the Departmentofthe Navy. The assessmentfocuses specifically on the Procurement
and Operationsand Maintenance appropriations for the Navy.
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Richard A Harshman [phone] CodeAS/Ha
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Approved for public release; distribution is unlimited.
POTENTIAL IMPACT OFTHE ELIMINATION OF THE M ACCOUNT
ON THE DEPARTMENT OF THE NAVY
by
Ben A. Fegurgur
Lieutenant Commander, Supply Corps, United States Navy
B.S., United States Naval Academy, 1979
and
Anthony F. Marinello
Lieutenant, Supply Corps, United States Naval Reserve
B.A., Old Dominion University, 1986
Submitted in partial fulfillment
ofthe requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
from the
NAVAL POSTGRADUATE SCHOOL
David R. WEipple, QJiairman
DepartmentofAdministrative)Sciences
11
ABSTRACT
This thesis addresses the impact of Public Law 101-510,
which eliminated the M Account, on financial management within
the Department of the Navy. The M Account was established for
the payment of prior year obligations from appropriations
which had lapsed. The M Account process provides the
necessary flexibility to Navy contract administrators and
financial managers to manage resources related to the closure
of prior year contracts.
Public Law 101-510 was enacted in 1990 based on
congressional concern over Department of Defense management of
the M Account. This study examines this law and the impact
this legislation will have on future financial decision-making
ir the Department of the Navy. The assessment focuses
specifically on the Procurement and Operations & Maintenance
appropriations for the Navy.
in
TABLE OF CONTENTS
I. INTRODUCTION 1
A. BACKGROUND 1
B. PURPOSE AND OBJECTIVE OF THE RESEARCH 3
C. SCOPE, LIMITATIONS AND ASSUMPTIONS 3
D. RESEARCH METHODOLOGY 4
E. THESIS ORGANIZATION 5
II. ESTABLISHMENT OF THE M-ACCOUNT 7
A. INTRODUCTION 7
B. APPROPRIATION LIFE CYCLE 7
1. OBLIGATIONAL AVAILABILITY 7
2. EXPENDITURE AVAILABILITY PERIOD 8
3. LAPSED APPROPRIATION 9
C. PRIOR TO THE M-ACCOUNT 10
D. CREATION OF THE M-ACCOUNT 13
E. CHAPTER SUMMARY 16
III. CONGRESS CALLS FOR REFORMS 17
A. INTRODUCTION 17
B. CONGRESSIONAL CONCERNS 18
1. CAUSES FOR THE M ACCOUNT AND MERGED SURPLUS
ACCOUNT GROWTH 19
IV