How OHDACA money is obligated and returned

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1. Two levels of money management

Under the Security Assistance Management Manual (SAMM), the Defense Security Cooperation Agency (DSCA) manages the Overseas Humanitarian, Disaster, and Civic Aid (OHDACA) appropriation. It follows the Financial Management Regulation and sound management practice (SAMM C12.6.1). DSCA handles funds management, distribution and record keeping at appropriation level, including the documents an audit needs. It decides allocations and guides the Combatant Commands (CCMDs) on executing funds. The CCMDs manage and distribute funds at execution level and must follow DSCA’s annual guidance. What the money may be spent on is covered in what OHDACA funds.

The CCMDs carry three reporting duties (SAMM C12.6.2). They record accounting transactions promptly and accurately in an audit-compliant enterprise system. They send DSCA a month-end status of funds report from that system by the 10th of each month. They also provide the certificate of completion for the triannual review when required. Every commitment and obligation is recorded in the official financial system and also entered by hand in the Overseas Humanitarian Shared Information System, with amounts, dates and document numbers for each commitment, obligation and adjustment.

2. Commit, obligate, disburse

The manual uses the Financial Management Regulation’s definitions. A commitment is an administrative reservation of funds based on firm procurement requests and similar instruments. Examples include interdepartmental purchase requests, funding memos, government purchase card transactions and Defense Transportation System transactions. Project commitments should end up matching what the project needs (SAMM C12.6.3.1). An obligation covers orders placed, contracts awarded, services received and similar transactions that will need payment (SAMM C12.6.3.2). All OHDACA funds must be obligated before they expire for new obligations. CCMDs enter each obligation in the information system as soon as possible, and no later than 30 days after the project is completed.

Disbursement is the payment that liquidates an obligation (SAMM C12.6.3.3). It may come months or even years after obligation, but must happen before the appropriation cancels, five years after the funds expired for new obligations.

3. Obligate early

OHDACA funds are available for two years, and CCMDs should obligate them in the first year as far as possible (SAMM C12.6.3). To that end, they should submit annual projects for approval as soon as DSCA has reviewed their assessment and budget submittal, and start executing approved projects early. They should keep checking execution against contracting timelines. Commitments no longer needed should be released and used for other approved needs or returned to DSCA. CCMDs should warn DSCA early if funds may not be obligated in time, and return funds they cannot use as soon as possible so DSCA can reallocate them.

The yearly cycle frames this. DSCA submits its program and budget estimate for OHDACA two years ahead of the target year (SAMM C12.2.6.1). CCMDs send their assessment and budget submittal for the next budget year by July 1 (SAMM C12.2.6.2). DSCA reviews each submittal to understand the command’s view of humanitarian needs and its project priorities, and to check compliance with law and policy (SAMM C12.2.6.3). It staffs the submittal with the Policy office and gives the Joint Staff a copy. It may send it back for clarification, and any project that seems to risk breaking legal or policy criteria is removed for submission out of cycle. Allocations rest on current policy and priorities, the submittal and each command’s past execution, and may change once the annual appropriation is enacted (SAMM C12.2.6.5). When the department runs under a continuing resolution, DSCA distributes funds in increments (SAMM C12.2.6.6). DSCA may hold a worldwide workshop each March for the commands, the Policy office and the Joint Staff (SAMM C12.2.6.7).

4. The April review

Each April, CCMDs review their programs, with particular attention to expiring funds in their second year, which lapse on September 30 (SAMM C12.6.5). Obligated funds beyond project needs should be deobligated and used elsewhere in the command or returned to DSCA. Each command sends DSCA an assessment of its expiring funds, ahead of either returning them or reallocating them internally. Commands also review undisbursed balances of cancelling funds for deobligation before September 30.

Unneeded funds have a deadline. Under the program’s performance objectives, all funds should be obligated before their availability ends, and CCMDs return unneeded funds to DSCA by July 31 of the year they expire (SAMM C12.6.5.2). Approved projects no longer needed should be marked deferred or cancelled in the information system. Commands should also continually assess funds execution and requirements, so that funding and contracting timelines and milestones are met (SAMM C12.6.3).

5. Expired and cancelling money

Expired funds that will not be needed to pay bills must be identified (SAMM C12.6.5.1). Commands must pay valid invoices or reduce unliquidated project balances by July 31 of the cancelling year, the fifth fiscal year after expiry. That leaves time to return residual funds to DSCA for other needs before they cancel on September 30. The manual’s example is that projects funded from the fiscal 2012 appropriation must be completed by July 31, 2018. After each appropriation expires, DSCA publishes an evaluation in December (SAMM C12.2.6.11).

6. Asking for more, and narrower money

After using all available and excess funds in the current year, a command with urgent or emergent needs may send DSCA unfunded requirements by June 15 (SAMM C12.6.5.3). It must confirm it can obligate the money by September 30. DSCA reviews the requests and decides how to distribute funds.

DSCA may also pass on supplemental money from a supplemental appropriation, a reprogramming of other funds or a transfer authority (SAMM C12.6.9). Where that money has a narrower purpose than the annual appropriation, DSCA tells the command what uses are allowed and how to track them. Spending must be tracked separately, and new project forms must state the intent to use supplemental funds. Using them on a project already approved needs DSCA approval through the change-of-scope process.

Key terms

Commitment	An administrative reservation of funds based on firm procurement requests.
Obligation	Orders, contracts and similar transactions that will need payment.
Disbursement	The payment that liquidates an obligation, due before the funds cancel.
Mid-year review	The April review of programs and expiring funds by each Combatant Command.
Unfunded requirement	A command’s request for extra funds, due by June 15.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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