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National Association of State Military Resource Managers (NASMRM) 14 th Annual Symposium Nashville, Tennessee. Advances vs. Reimbursements Sam Peal Budget Analyst WVARNG-C&FMO. Advances vs. Reimbursements. Ref: NGR 5-1/ANGI 63-101 Purpose of an Advance :

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National Association of State Military Resource Managers (NASMRM)14th Annual SymposiumNashville, Tennessee

Advances vs. Reimbursements

Sam Peal

Budget Analyst

WVARNG-C&FMO


Advances vs reimbursements

Advances vs. Reimbursements (NASMRM)

Ref: NGR 5-1/ANGI 63-101

Purpose of an Advance:

An Advance payment is the mechanism by which the funds identified in a Master Cooperative Agreement (MCA) or in Military Construction Cooperative Agreement (MCCA) are paid to the State in advance ofupcoming expenditures.


Advances vs reimbursements1

Advances vs. Reimbursements (NASMRM)

Purpose of a Reimbursement:

A Reimbursement payment is the mechanism by which the funds identified in a Master Cooperative Agreement (MCA) or in Military Construction Cooperative Agreement (MCCA) are paid to each State after the expenditures are incurred.


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Advances vs. Reimbursements (NASMRM)

Criteria for an Advance:

The Activity Manager (or State Designee) for each Appendix of a MCA or MCCA must forecast at least 30 days out all upcoming expenditures.


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Advances vs. Reimbursements (NASMRM)

Criteria for an Advance:

The Activity Manager (or State Designee) must determine if there is a balance from the previous 30 days to cover those expenditures or if a new advance request is needed.

No excessive unused balance should be carried over from month to month


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Advances vs. Reimbursements (NASMRM)

Advance Request Process:

The Activity Manager (or State Designee) will generate the Advance Request letter, for the amount forecasted

The letter must be:

Concurred by Appendix Program Manager

Signed by the State Financial Rep

Submitted for approval to the USPFO.


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Advances vs. Reimbursements (NASMRM)

Advance Request Process:

Once approved at the USPFO, the request is submitted to DFAS-IN (Indiana) for their approval and authorization.

Once authorized and approved at DFAS, the payment is made electronically from the U.S. Treasury to the State Treasury.


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Advances vs. Reimbursements (NASMRM)

Advance Request Process:

Once the payment arrives at the State Treasury it is electronically deposited into the Adjutant General’s Revenue Account for Federal Cooperative Agreements.


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Advances vs. Reimbursements (NASMRM)

Advance Ceiling:

USPFO requires each Activity Manager to develop a Advance Ceiling Forecast.

It is a per month projection of required advance dollars to span the fiscal year.


Advances vs reimbursements8

Advances vs. Reimbursements (NASMRM)

Advance Ceiling:

Takes into account known reoccurring expenses:

Utilities

Payroll

Service agreements

USPFO may provide flexibility to adjust the ceiling if expenditures come in above or below previous projections.


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Advances vs. Reimbursements (NASMRM)

Advance Ceiling:

Example 1 – Storefront Recruiting Appendix 9 of the MCA may be advanced in 1/12th estimates for known monthly lease payments.

Example 2 – BASOPs/SRM Appendix 1 of the MCA may represent a gradual step process whereas the largest advance payments are made during the last quarter of fiscal year to coincide with the summer SRM programs

Example 3 – MILCON MCCA Advances will be more of a bell curve whereas the largest payments are made during the height of the project and smaller payments at the beginning and close of the contract.


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Advances vs. Reimbursements (NASMRM)

Returning Unused Advance Balance:

When all remaining unliquidated obligations are verified and paid, the State initiates the final modification to close-out each Appendix.

At which time all unused Advance Balance for each Appendix of the MCA or MCCA is identified and returned to the Federal Government via a state check payable to the U.S. Treasury.


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Advances vs. Reimbursements (NASMRM)

Returning Unused Advance Balance:

Unused Advance Balance cannot be carried over to another fiscal year or another agreement within the same fiscal year.


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Advances vs. Reimbursements (NASMRM)

Advantages to Advances:

Provides a State the ability to pay bills without the undue burden of depleting their general revenues.

Most obvious being MILCON MCCA(s) which generate invoices over 500K -5M $$.


Advances vs reimbursements13

Advances vs. Reimbursements (NASMRM)

Advantages to Advances:

Provides a greater tool for managing cash flow to the State rather than using strictly a reimbursement payment method.


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Advances vs. Reimbursements (NASMRM)

Advantages to Advances:

Historically, Advance payments are approved, processed and received within 7-10 business days to the State Treasury.

Whereas, Reimbursement payments have taken longer to be processed and received.


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Advances vs. Reimbursements (NASMRM)

Questions??


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