C9.14.1. Financial Management Reviews. DSCA reviews the current and forecasted financial posture of an FMS purchaser’s program and holds a Financial Management Review (FMR), if needed, with the FMS purchaser to: reconcile financial records, review the financial status of FMS cases, ensure continued solvency of the FMS purchaser accounts, improve cycle times, identify cases requiring intensive financial management, and formulate financing strategies for existing and prospective FMS purchases. DSCA works with the IAs, SCOs, DFAS, and the FMS purchaser in planning and executing FMRs. Figure C9.F5. provides a mandatory format for preparing for an FMR. Minor adjustments to this standard format must be authorized by the DSCA Country Finance Director. See Chapter 6 for information on other types of case reviews.

Figure C9.F5. Financial Management Review - Case Financial Status Reporting Format
_{(Format in use as of March 1, 2011)}

C9.14.2. Business Process Reviews.

C9.14.2.1. Background. In 2006, financial reforms were implemented across the security assistance/cooperation (SA/SC) community that resulted in an increase to the FMS Administrative Surcharge rate (from 2.5% to 3.8%) and renewed efforts to enforce existing Standard Level of Service (SLS) requirements by DSCA and the SA/SC community, to ensure funds were spent appropriately and in a consistent manner. DSCA’s responsibility to ensure funds are used correctly is defined in DoD 7000.14-R, Volume 15, and DoDD 5105.65. DSCA must “monitor usage of FMS Trust Funds to include periodic reviews of funding levels and unused balances.” Further, DSCA exercises “financial management responsibility for the Foreign Military Sales Trust Fund and reporting functions for SC programs.” DSCA began conducting these Business Process Reviews (BPRs) in FY 2011.

C9.14.2.2. Purpose. The purpose of each BPR is to evaluate an organization’s business practices as they relate to the use of FMS Administrative Surcharge funds and compliance with SA policies and procedures. The review is not an audit or an inspection, but is a joint effort, with the applicable IA, to assess existing processes to better understand them and assist with any issues. The desired objectives are to identify areas for improvement (in policies, processes, or practices) and take actions necessary to correct as well as to identify best practices to share with the community.

C9.14.2.3. Procedures. DSCA will lead, at a minimum, two reviews on an annual basis; ideally, however, the goal is to conduct one organization/office review per MILDEP. Reviews of other IAs may also be conducted as needed or requested. The lead for these reviews is DSCA (Business Operations Directorate), specifically, the Financial Policy Division. Other DSCA participating offices may include DSCA’s Strategy Directorate and Office of the General Counsel, depending on the location and focus of the specific review. Participation will also include representatives from the MILDEP/IA, and other technical experts, as required.

C9.14.2.3.1. In October of each fiscal year, DSCA (Business Operations Directorate) will issue a call, to the DSCA participants, requesting nominations of organizations where a review would be of benefit. Additionally, input will be solicited from the MILDEPs.

C9.14.2.3.2. Upon receipt and analysis of the nominated organizations, DSCA (Business Operations Directorate) will send a memorandum to the applicable MILDEP/ IA leads, indicating the selection (receiving organization) and request that suggested timeframes be provided for the review(

C9.14.2.3.3. Once the location and time are established for the reviews, DSCA (Business Operations Directorate) will notify the applicable offices and provide a listing of questions to be addressed to the MILDEP for appropriate distribution.

C9.14.2.4. Deliverables. DSCA (Business Operations Directorate) will prepare minutes from the BPRs, to include any action items, and provide to the participants. Further, it will track actions and follow-up to ensure all open action items are completed.