DEPARTMENT OF THE AIR FORCE AFSPACECOM HOI 172-2
Headquarters Air Force Space Command 2 June 1989
Peterson Air Force Base, Colorado 80914-5001

Budget

COMMAND FINANCIAL MANAGEMENT

This operating instruction gives financial management policies and procedures
for resource management. It applies to the Air Force Space Command (AFSPACECOM)
Headquarters staff and HQ USAF named units assigned to AFSPACECOM.

Page
Chapter 1 - General
Air Force Policy ........................................................ 2
Air Force Space Command Policy .......................................... 2
Appropriations .......................................................... 4

Chapter 2 - Responsibilities
Program Element Monitor (PEM) ........................................... 6
Functional Area Managers ................................................ 7
Director of Budget ...................................................... 8

Chapter 3 - Financial Management Committees
Gentral ................................................................. 9
Funds Management Panel (FMP) ............................................ 9
Operating Budget Review Committee (OBRC) ................................ 9
Financial Management Board (FMB) ........................................ 11
Frequency of Meetings ................................................... 12

Attachment
1. Procedures for Monitoring ADPE Software, Hardware, and Services ......... 14

Supersedes S HOI 172-2, 1 April 1986. (For summary of changes see page 14.)
No. of Printed Pages: 14
OPR: ACBM (Ernest J. Ebell, Jr.)
Approved by: Col David J. Herrington
Editor: Pamela S. Stricklin
Distribution: F
2 S HOI 172-2 2 June 1989

Chapter 1

GENERAL

1-1. Air Force Policy:

a. The Department of the Air Force Statement of Financial Management Policy
for Resource Managers requires Air Force commanders and managers to be respon-
sible for the effective, efficient, and economical use of all resources made
available to the organization. Regardless of the level of centralization,
operating level managers are directly involved in and responsible for management
of the resources used.

b. Some resources may appear to be a cost-free asset in view of the lower-
level manager since they may not determine or control these resources (real
property, manpower, weapon systems) or may not have the authority to change the
mix of the total resources allocated. In these instances, the manager must make
sure these resources are used in the most cost-effective manner. Managers need
to be aware of the composition of the total resources of the organization,
responsibility center (RC), or cost center (CC). All resources consumed at
operating locations are directly controllable or their use is directly influ-
enced by managers. There are positive means for a manager to directly influence
the effectiveness, efficiency, and economy of resources used to perform the as-
signed missions.

c. Each manager should actively participate in the formulation and execu-
tion of operating budgets. Participatory management includes the use of re-
source advisors in each RC and a financial management and working committee
structure to advise and assist the commander in the decision-making process.
The comptroller helps the manager by assuring fiduciary accounting and control
of obligations and providing data through the accounting system for operations.
Managers must have obligation data to monitor availability of funds.

1-2. Air Force Space Command Policy. It is the policy of the Air Force Space
Command to achieve a balance between support to our direct mission and support
of quality of life for our people through the base operating and real property
maintenance programs. We need to provide the quality of life necessary to
retain our people, sustain their morale, and ensure their continued productivity
if we are to provide the qualitative edge in our mission operations. Because of
the significant reductions in the level of defense funding and continuing
emphasis on fraud, waste, and abuse, Command managers must make financial
management a part of their everyday activity.

a. Contract Changes. offices of primary responsibility (OPR) must be wise
in changes to statements of work (SOW). SOW changes are treated as priced op-
tions and considered as unfunded requirements. These requirements are reviewed
by the Command's financial committees.

b. Reprogramming of Funds. Program element monitors (PEMs) have authority
to reprogram funds between approved programs within a given program element
without increasing the scope. An approved program is a program that has been
included in the financial plan and approved by the financial management board.
However, the financial management board (FMB) restricts reprogramming in the
area of technical service contracts (TSC), and may restrict other areas as
required.

S HOI 172-2 2 June 1989 3

c. Unfunded Requirements. New tasks or efforts which arise during the
execution year, as well as increases to programs in the approved financial plan,
are submitted to the Directorate of Budget for subsequent presentation to the
operating budget review committee (OBRC) and FMB. Excess funds may be applied
to unfunded requirements based on priorities established by the FMB. Organiza-
tions develop budget execution plans on the assumption that no additional funds
will be provided as the fiscal year progresses.

d. Command Initiatives. Command initiatives are requirements that have not
been programmed through the program objective memorandum (POM) process and for
which no funds have been provided in the Command's financial plan. These
requirements may take resources from approved, funded Command programs. Because
of reductions in Defense funding, it is the policy of this Command that these
initiatives are programmed and compete with other approved programs for our
scarce resources.

a. Temporary Duty (TDY). HQ Air Force Space Command adheres strictly to
the USAF TDY policy. This policy states that TDY is funded by the unit to which
an individual is assigned. Exception: The Inspector General (IG) funds TDY
when other organizations or units are requested to provide augmentees to Air
Force Space Command IG teams. In situations where individuals assigned to other
major commands or HQ USAF are requested to assist an Air Force Space Command
organization, every effort is made to implement Air Force policy. However,
there may be instances where there are no alternatives but to provide funds to
the individual's organization. If necessary, contact Director of Budget (ACB)
for help.

f. Technical Service Contracts (TSC) Requirements. TSC requirements in-
clude contract advisory and assistance services (CAAS), contract engineering and
technical services (CETS), technical services support (TSS), and other con-
tracts with command-level interest. TSC requirements are an important part of
the Command's total financial program. These contract requirements meet all
Directorate of Requirements Definition (LKQ) review and validation procedures
(see SR 400-5, Management of Technical Services Contract Requirements) and are
delivered to AFSPACECOM/PKD for contracting action in sufficient time to be
awarded and obligated in the current fiscal year.

(1) Funding for TSC requirements is subject to the following guidance:

(a) In the event a funding excess is identified from a TSC con-
tract, the excess funds may be applied to any other Command unfunded priority.
This is determined by the FMB.

(b) In the event the actual cost of the contract requirement
exceeds the funded amount (and there is no increase in the scope of the
contract), the shortage may be requested through financial management committees
or funded by the PEM with funds from another area within his or her area of
responsibility.

(c) The scope of a TSC contract may be expanded provided there is
an offset to cover any additional cost somewhere within the overall TSC program
and EMB approval is obtained.

4 S HOI 172-2 2 June 1989

(2) All TSC contract requirements are coordinated with Directorate of
Requirements Definition, Technical Services Requirements Division (LKQO) before
funding action is considered by the Director of Budget.

(3) The TSC Technical Review Committee and TSC Management Board vali-
date requirements for all Command TSCs. The OBRC and FMB determine the total
level of funding available to support TSC requirements.

g. Coordination of Funding Documents. Coordinate all AF Form 9's, Request
for Purchase; AF Form 185's, Project Order; AF Form 616's, Fund Cite Authoriza-
tion (FCA); and DD Form 448's, Military Interdepartmental Purchase Request; with
the proper Directorate of Budget analyst to ensure that the requirement is an
approved, funded item and that funds are available for commitment.

h. Out-of-Cycle Funding Requests. Funding for emergency out-of-cycle re-
quirements are approved by means of a staff summary sheet (SSS) coordinated by
the members of the FMB and approved by the FMB Chairperson or Vice Chairperson.

i. Emergency and Special Program (ESP) Codes. When necessary, the Director
of Budget establishes an ESP to capture certain expenses. When established,
specific guidance on their use is provided.

1-3. Appropriations. Air Force Space Command uses various appropriations to
conduct the financial business of the Command.

a. Operations and Maintenance (O&M) (3400). Day-to-day operating, mainten-
ance, and support costs are funded from the O&M appropriation. Funding in this
appropriation includes the Major Force Programs (MFP) for Strategic Forces (MFP
1), General Purpose Forces (MFP 2), Intelligence and Communications (MFP 3),
Central Supply and Maintenance (MFP 7), Training (MFP 8A), Medical (MFP BB), and
Administration and Associated Activities (MFP 9). The Directorate of Budget
(ACB) is the focal point for these funds. Two financial documents are submitted
through ACB as directed by AFR 172-1, Volume II, Estimating Instructions, and
Secretary of the Air Force, Deputy Comptroller, Budget (SAF/ACB) "Call" instruc-
tions for the budgeting of future year funds.

(1) Operating Budget (OB). The OB is a repricing of ongoing programs
before the beginning of the DOD POM cycle. It addresses the requirements for 2
years from the current fiscal year. Secretary of the Air Force, Deputy
Comptroller, Budget, considers our OB when preparing their input to the
President's Budget. Though not required every year under the 2-year budget
plan, it is prepared in November for submission to the Air Staff in December.

(2) Financial Plan (FP). The FP describes the Command's financial re-
quirements in light of the funding included in the President's Budget. It
presents AFSPACECOM's plans to use the funds tentatively allocated to us for the
next fiscal year. Its preparation starts in March for final submission to the
Air Staff in May.

b. Other Procurement (3080). This appropriation provides for purchase of
vehicles, electronic and telecommunications equipment, base maintenance and sup-
port equipment, and investment-type spares. The Assistant DCS for Systems

S HOI 172-2 2 June 1989 5

Plans, Policy and Requirements (LK-1) is the single point of contact for all
3080 funds. The Director of Budget (ACB) is responsible for policy and
propriety issues. The OBRC and FMB maintain financial oversight.

c. Military Construction Program (MCP) (3300). Provides funding for major
construction projects. A sub-element of this appropriation provides funding for
the family housing construction programs. The Director of Programs (DEP) is the
contact point for MCP.

d. Family Housing. Funds the operation and maintenance costs of the
AFSPACECOM family housing program. The Director of Programs (DEP) and Director
of Budget (ACB) jointly administer the family housing program.

6 S HOI 172-2 2 June 1989

Chapter 2

RESPONSIBILITIES

2-1. Program Element Monitor (PEM):

a. Definition. The individual designated to monitor a program element
(PE), including the review, evaluation, and maintenance of all pertinent data on
the programs contained in the PE.

b. PEM Designations. One PEM is designated for each PE; however, one
individual may be assigned several PEs. The PEMs for mission PEs come from the
staff element that has primary responsibility for the program; normally DCS,
Plans (XP); DCS, Operations (DO); DCS, Intelligence (IN); DCS, Systems Integra-
tions, Logistics and Support (LK); or System Integration Office (SIO). The PEMs
for support-oriented PEs come from their respective functional staffs. (For
example, DCS, Engineering and Services is PEM for real property maintenance, PE
12894.) All PEMs responsible for a mission PE must make known special require-
ments to include in support PEs. The Directorate of Budget (ACB) helps PEMs
identify their special support requirements. The Director of Budget keeps, and
periodically publishes a directory of PEMS.

c. Preparation of Budgetary Data. The PEM has primary responsibility to
make sure program budgetary data is correct, accurate, and consistent with
program direction.

d. Program Advocacy. Overall program advocacy at MAJCOM level is the
responsibility of the PEM. At Air Staff the program advocates are DCS for Plans
and Operations (XO), Military Deputy for Acquisition (AQ), and Assistant Chief
of Staff for Systems for Command Control Communications and Computers (SC),
Command functional area managers provide inputs and or assistance as necessary.

e. Financial Planning and Budget Execution:

(1) PEMs work closely with the appropriate functional manager (for
example, manpower, ADPE, communications) and the Directorate of Budget budget
analyst to identify program content, requirements, and funding. Inputs to the
operating budget (OB) and financial plan (FP) and unfunded requirement requests
should reflect a coordinated PEM/functional manager position. PEMs may be asked
to brief the OBRC and the FMB to help justify funds for their programs, PEMs
may ask functional managers to be present as required.

(2) PEMs keep data on major areas of their assigned PEs such as mile-
stones, financial data, and performance progress reports submitted by other
agencies.

(a) PEMs check program and cost data in the USAF Force and
Financial Plan (F&FP), operating budget, financial plan, and proposed funds dis-
tribution.

(b) PEMs work closely with their Command managers and budget
analyst to justify requirements and make financial adjustments.

S HOI 172-2 2 June 1989 7

(3) The following guidance applies to the management of the PEM's pro-
gram funds:

(a) When the execution year (current FY) begins, the FMB, chaired
by the Commander, approves all funding allocations and reprogrammings. Any
changes to the FP must be approved by the FMB.

(b) The Director of Budget coordinates all execution actions with
the appropriate PEM.

(c) All funding documents (for example, AF Form 9's, AF Form
185's, AF Form 616's. and DD Form 449's) using funds within a PE are coordinated
with the responsible PEM and their budget analyst.

(d) PEMs may move funds within their PE in order to reconcile dif-
ferences in their approved program (for example, overruns in one area may be
covered by moving money from another area). The PEM may not fund any task or
effort which is not in the financial plan or hasn't been approved by the FMB.

(e) New tasks or efforts which arise during the execution year may
be submitted as an unfunded requirement to the Director of Budget for presenta-
tion to the OBRC and FMB. Any funds which are not used according to the
financial plan, and cannot be applied toward approved shortfalls, must be
identified as excess funds to the Director of Budget.

(4) Planning PRs are coordinated with the budget analyst to ensure that
only items included in the approved Command financial plan are processed for
advanced procurement action.

(5) AFSPACECOM Regulation 27-1, Air Force Space Command Programming
System, gives background information on the Planning, Programming, and Budgeting
System (PPBS).

2-2. Functional Area Mangers:

a. Functional area management cuts across program element and organiza-
tional lines and deals with support, service, advice, and assistance to PEMs and
Command managers in such areas as manpower, communications, and ADPE. Through
their specialized knowledge, functional managers make sure commodity and service
availability agrees with and supports mission programs. Functional area manag-
ers:

(1) Maintain knowledge of overall Command programs and issues.

(2) Evaluate financial requirements and funding levels to support those
requirements.

(3) Provide guidance to the OBRC and FMB on supportability and relative
priority of requirements.

b. As an example of functional area management, DCS for Systems Integra-
tion, Logistics and Support, is the Command functional area manager responsible
for consolidating requirements and managing all ADPE within AFSPACECOM. The

8 S HOI 172-2 2 June 1989

functional manager helps the PEM identify requirements, compute the associated
funding, and develop the mission impact of not funding the requirement. PEMs
use this information to develop complete requirements and advocate the total
program to the OBRC. (For specific procedures of processing ADPE financial
requirements and documents, see attachment 1.)

2-3. Director of Budget:

a. The Director of Budget (ACB) maintains policy oversight and fiscal
control of all funding received by the Command regardless of appropriation. The
flow of funds is from SAF/Deputy Comptroller, Budget, to HQ AFSPACECOM Director
of Budget, to HQ staff, then to the field units.

b. Budget analysts develop operating budgets and financial plans using data
provided by PEMs. Analysts prepare suggested initial distribution of funds for
the OBRC and FMB based on approved, funded programs as contained in the FP.

c. The Directorate of Budget budget analysts monitor commitment, obliga-
tion, and expenditure of funds and periodically give financial status informa-
tion to PEMs and provide help in analyzing the data.

d. The Director of Budget develops an O&M (appropriation 3400) Command
unfunded priority list based on inputs from HQ staff and field units. After ap-
proval by FMB, the approved unfunded list serves as a spending plan when ad-
ditional funds become available.

S HOI 172-2 2 June 1989 9

Chapter 3

FINANCIAL MANAGEMENT COMMITTEES
3-1. General. In financial management, the corporate organizational approach
has proven to be the most effective in achieving a balanced application of
resources. Traditionally, funds furnished to the Command do not satisfy total
requirements. Decisions to reduce, defer, or eliminate programs or establish
priorities in order to accomplish the overall mission are most effective when
accomplished through the combined efforts of the commander and supporting staff.
To provide the basis for resource management a formal financial management
structure must be established. According to AFR 172-1, Volume III, Budget
Management for Operations, financial management responsibility is at the
directorate level for the operating budget review committee (OBRC) and at DCS
level for the financial management board (FMB).

3-2. Funds Management Panel. The Headquarter's funds management panel (FMP) is
chaired by the Chief of Staff and administers the Headquarter's funds. It is
concerned primarily with supporting the day-to-day operation of the head-
quarters staff versus Command-wide concerns. The organization, responsibili-
ties, and operation of the FMP is covered in S HOI 172-2.

3-3. Operating Budget Review Committee (OBRC). The OBRC makes recommendations
to the FMB for the budgeting, financial planning, and management of Air Force
Space Command appropriated 3400 (O&M) and 3080 (Investment Equipment) funds. It
reviews, adjusts as necessary, and ranks the resource recommendations in the
Command's OBs, FPs, and current year budget execution reviews. It recommends
funds distribution to the FMB. The OBRC reviews and ranks unfunded requirements
for presentation to the FMB.

Note: The OBRC will not review unfunded requirements for less than
$100,000. All requests less than $100,000 are channeled to the Director of
Budget (ACB) for potential financing.

a. Membership:

(1) Director of Budget (ACB), Chairperson.

(2) Director of Operations Plans and Requirements (DOX).

(3) Assistant DCS, Systems Plans, Policy, and Requirements (LK-1).

(4) Director of Plans and Programs (XPX).

(5) Director of Intelligence Plans and Programs (INX).

(6) Director of Programs (DEP).

(7) Director of Manpower and Organization (MPM).

(8) Director of Architecture (SIO/SYA),

(9) Chief of Publishing and Reprographics Management Division (IMP).

10 S HOI 172-2 2 June 1989

(10) Chief of Security Police Programming Division (SPP).

(11) Director of Health Services Management (SGA).

(12) Executive Officer, Staff Judge Advocate (JAE).

(13) Director of Review and Oversight (IGO).

(14) Deputy DCS, Contracting (PK).

(15) Chief of Budget Management Division (ACBM) Executive Secretary.

(16) Deputy Director of Plans and Policy (HQ USSPACECOM/J5X).

(17) Deputy Director for Policy and Budget (HQ NORAD/NPX).

Note: OBRC members may invite advisors to OBRC meetings who will contribute to
OBRC deliberations and recommendations.

b. Chairperson:

(1) Gives guidance for the effective operation of the OBRC.

(2) Approves the agenda for the meetings.

(3) Tasks members for special briefings and reports as required.

(4) Convenes and presides over the OBRC meetings.

(5) Keeps the record of OBRC minutes.

(6) Briefs the FMB on OBRC recommendations and dissenting opinions.

(7) Convenes meetings of selected members to resolve major issues and
develops recommendations for the OBRC, as necessary.

(8) Tasks staff agencies for after-action reports and briefings.

c. Executive Secretary:

(1) Keeps a current roster of members' name, office symbol, and tele-
phone number.

(2) Organizes and coordinates OBRC meetings.

(3) Gives a proposed agenda for the chairperson.

(4) Prepares OBRC minutes.

d. Members:

(1) Give Director of Budget, Budget Management Division (ACBM), the
name, office symbol, and telephone number of new members.

S HOI 172-2 2 June 1989 11

(2) Know the latest status of programs for which their DCS is assigned
PEM or Command management responsibilities.

(3) If unable to attend an OBRC meeting, appoint a substitute who can
act with the same authority.

(4) Prepare, present, and or arrange for program briefings as required
by the chairperson. These briefings could be required for the OBRC and or FMB.

(5) Take follow-up action required to ensure completion of open actions
within their area of responsibility.

(6) Prebrief the respective FMB member on the issues, procedures, and
actions of the OBRC after the OBRC meeting and prior to the FMB meeting.

(7) Furnish the Director of Budget with pertinent topics to be included
in the Commander's statement. The Commander's statement goes with the OB and FP
and must directly address the Command's most important issues.

3-4. Financial Management Board (FXB). The FMB makes sure there is a Command-
wide, balanced funding program to best use available resources to do the
mission. It reviews OBRC recommendations and prepares financial recommendations
to the Commander.

a. Membership:

(1) Commander (CC), Chairperson.

(2) Vice Commander (CV).

(3) DCS, Comptroller (AC), Executive Secretary.

(4) DCS, Plans (XP).

(5) DCS, Operations (DO).

(6) DCS, Intelligence (IN).

(7) DCS, Systems Integrations, Logistics, and Support (LK).

(8) DCS, Engineering and Services (DE).

(9) Chief, Systems Integration Office (SIO).

(10) DCS, Manpower and Personnel (MP).

(11) Command Surgeon (SG).

(12) Director of Information Management (IM).

(13) Chief of Security Police (SP).

(14) Staff Judge Advocate (JA).

12 S HOI 172-2 2 June 1989

(15) Inspector General (IG).

(16) DCS, Contracting (PK).

(17) Office of History (HO), Non-voting.
(18) Director, NORAD Planning Staff (HQ NORAD/NP).

(19) Director of Plans (HQ USSPACECOM/J5).

b. Chairperson:
(1) Gives policy and guidance for the operation of the FMB.
(2) Approves the agenda and presides over the FMB.

c. Executive Secretary:
(1) Keeps a current roster of members' name, office symbol, and tele-
phone number.
(2) Organizes, schedules, and coordinates all aspects of the FMB meet-
ings.
(3) Proposes an agenda for the chairperson's approval.
(4) Prebriefs the chairperson on major issues and proposed subjects for
discussion.

(5) Prepares the FMB minutes and monitors follow-up actions.

d. Members:
(1) Know the latest status of programs for which they are assigned PEM
or command management responsibilities.
(2) Prepare and present or arrange for briefings or reports as required
by the chairperson.
3-5. Frequency of Meetings. Both the OBRC and FMB meet at least four times a
year to distribute funds, approve budgets and FPs, and make mid-year and year-
end adjustments.

OFFICIAL DONALD J. KUTYNA
Lieutenant General, USAF
Commander

G. A. STANSELL
Colonel, USAF
Director of Information Management

S HOI 172-2 2 June 1989 13

SUMMARY OF CHANCES
Adds statements of HQ USAF budget policy (para 1-1) and AFSPACECOM budget policy
(para 1-2), adds guidance on TSC contracts (para 1-2), expands description of
appropriations (para 1-3), moves PEM responsibilities from an attachment to the
body of the HOI and expands on their duties (para 2-1), adds statement of func-
tional area manager responsibilities (para 2-2), and adds members to the OBRC
(para 3-3) and FMB (para 3-4). Adds attachment I providing procedures for pro-
cessing C-CS/ADPE financial requirements and documents.

14 S HOI 172-2 Attachment 1 2 June 1989
PROCEDURES FOR MONITORING ADPE SOFTWARE,
HARDWARE, AND SERVICES
Al-1. Coordination of Requirements. Actions concerning communications-computer
systems (C-CS)/automated data processing equipment (ADPE) software, hardware,
and services (EEICs 472, 568, 582, 627, and 637) are coordinated with
Directorate of Systems Plans and Requirements, Programs Division (LKXP) as the
C-CS/ADPE financial manager. The purpose of this coordination is to ensure the
expert in Programs Division (LKXP) is made available to each program manager who
requires C-CS/ADPE support. In addition, the coordination is intended to ensure
the C-CS/ADPE programs avoid unnecessary duplication of capabilities and the PEM
is advised of the most suitable solution to the requirement. Examples of C-CS/
ADPE type items are purchased maintenance of computer equipment, lease of
computer equipment, purchase of software and hardware for computer systems,
purchase of documentation support for computer systems, and actual purchase of
computer equipment.
Al-2. Financial Plan Inputs. During the call for the financial plan (usually
in the second fiscal quarter each year) the Directorate of Budget (ACB) includes
in their call a statement that all PEM submissions which include C-CS/ADPE type
items must be coordinated with Programs Division (LKXP) before submission to the
Director of Budget (ACB). Programs Division (LKXP) coordination either
validates the PEM's requirements or provides comments explaining any unresolved
disagreements with the stated need. PEMs and program advocates should be aware
that as the Command's functional manager for C-CS/ADPE, DCS for Systems
Integration, Logistics and Support (LK)'s opinion weighs heavily with the
financial review committees.
Al-3. Unfunded Requirements. As part of the execution process, the Director of
Budget (ACB) furnishes Programs Division (LKXP) an information copy of the
approved C-CS/ADPE initial funds distribution by PE and EEIC. Unfunded
requirements are coordinated through Programs Division (LK<XP) in the same manner
as financial plan submissions. Again, as the command's C-CS/ADPE functional
manager, DCS for Systems Integration, Logistics and Support (LK)'s comments do
have a significant influence on the decisions of the financial review
committees.
Al-4. Coordination of Commitment Document. Throughout the year, all Purchase
Requests (AF Form 9), Fund Cite Authorizations (AF Form 616) and MIPRs (DD Form
448) are worked through the appropriate PEM, Programs Division (LKXP) and the
Director of Budget (ACB) before they are forwarded to Accounting and Finance and
Contracting.