What is Foreign Military Sales case reconciliation?

Reconciliation refers to the financial and logistical actions that ensure proper accounting, accuracy and thoroughness of data, currency of schedules, and timeliness and completeness of reporting. In turn, successful reconciliation throughout the life of a case expedites case closure. Case reconciliation is not a single action; rather, it is a series of actions (beginning with case implementation) identifying and resolving discrepancies among logistics and financial transactions throughout the life of a case. Reconciliation commences with the implementation of a case and does not end until the case is “final” closed. Reconciliation for closure involves extensive communication between various logistics, financial, and contract organizations to ensure associated closure transactions are completed. It is imperative that case and line reconciliation be initiated upon implementation of the case to make the closure process timely and easier. By reconciling during case execution, case closure becomes an event instead of a process. DSCA consolidated the case reconciliation and closure policies in SAMM Chapter 16. The policies in that chapter apply to both FMS and BPC cases.

Active case review and reconciliation, extending from case implementation until the case is Supply/Service Complete (SSC), are critical components of effective case management. It is mandatory that each case manager performs an annual case and payment schedule review and/or reconciliation on each case, which includes comparing data between systems, comparing case data to performance, comparing cases to underlying contracts and comparing systemic data to hardcopy or electronic supporting documentation. Case managers are responsible for the timely reconciliation and closure certification of cases, regardless of how these activities are delegated within the responsible IA. Case managers should not wait until a case is ready to be closed to reconcile the case. Case managers should reconcile and close lines of accounting, requisitions, funding documents, and other program documents as material is delivered and services are performed. Several important reconciliation actions facilitate case closure. These include:

• Continuous, periodic reconciliation of essential financial data to allow for error detection, correction, and future actions at the earliest possible point in the case life cycle
• Establishing a comprehensive file of all transactions pertaining to the case. For some cases, this file could be quite large, filling several rooms if the files are maintained in their original form. However, large files may be reduced by the use of electronic media. The data files must also be filed and accessible to case managers and those responsible for final case reconciliation
• Recording case data with objective evidence. This simply means that every financial transaction, every cost, must be recorded. The recording of financial data in source documents will provide an audit trail, which can ensure the safeguarding of international partner and USG funds
• Ensuring case identifiers are recorded in all financial transactions. When the DoW accepts a case, it also accepts a fiduciary responsibility, which is completed once final reconciliation is accomplished.

Eventually, an active line or case transitions into Supply/Service Complete (SSC) status. A process exists (refer to SAMM, Appendix 7, RCG Figures AP7.C2.F15 and AP7.C2.F16) for deciding that a case or line is SSC. The reconciliation condition of data (other than that which is preventing item delivery or actual completion of services), the allocation of resources (funding and/or manpower), or the distribution/transfer of workload are not factors in determining when SSC occurs. The IA declares a case or line is SSC when the following events occur by updating the status in the IA system (to include SSC Date) and informing the international partner: [SAMM C16.2.12.1]

• Verification that all items are delivered; title has transferred
• Verification that all services have been performed
• Training: Verification that all courses, Mobile Training Teams (MTT) and Extended Training Service Specialist/Language Training Detachments are completed, all Temporary Duties (TDYs) are finished, and all case-funded salary positions have expired.
• Period of performance for all other services has elapsed
• Program Management Line (PML): The end point may vary, but may be no later than 12 months after final delivery and/or performance of last non-PML service for the related case(s). Like any other service, the duration of PML must be linked to the period of performance
• All warranty periods have elapsed
• No items are in storage
• If the country is under suspensions and/or sanctions, there are no deliveries pending, and no future deliveries shall occur once sanctions are lifted