DFAS manages FMS financial activity. It manages the country accounts on behalf of both the country and the US service agency for a given FMS Case. The Federal Reserve Bank, FRB, maintains accounts for each country program. Each country maintains an FRB account with several sub-accounts. The primary account is the place where you add cash to continue your FMS program. Beneath this account is a ‘working’, or holding, account that is used to distribute working capital to service depots that have provided goods or services against a funded FMS case.

The Delivery List Processing (DL) involves a list of deliveries against FMS cases and is generated by the US Service draw-down of funds against a FMS case from the holding account into the ‘Services’ account. The DL is a list of charges for deliveries for a given FMS case. These charges are treated as invoices.

In conventional terms, an invoice is not provided for FMS activity. Payments are made, in advance of any supply of material or services, to a holding account that is available to the US agencies for draw-down. The DL provided by the US is used as an invoicing file. The file can be received electronically on a monthly or quarterly basis. The file contains detailed information on deliverables and 'Below the line' administration and accessorial costs. The file contains both credits and debits to be applied. It is available in a 93 character text format. The financial messages all start with a DIC of FK and a third letter that runs from A – H.

DICs are defined as follows:

Depending on the type of DL item and whether it is an NSN or a Service, there are up to 9 functions to be executed in a sequence during the DL processing:

If the processing of one function fails, the process is stopped and a Worklist entry is created. If the error is corrected, the processing of functions is continued.

The 93-character DL file has two structures, one for FKA and FKB DICs and one for FKC through FKG DICs. The system reads the file entries and takes the appropriate action consistent with the DIC of the coded message string.

For FKA and FKB DICs, the handling program locates key data elements in the message string, specifically the FMS document number or NSN, and creates either an invoice (for FKA) or a credit note (for FKB) with reference to the FMS purchase order. FKC through FKF DICs relate to administrative and accessorial charges such as transportation and packaging and handling. These are referred to as ‘Below the line costs’. As determined by the DIC, these transaction values will be invoiced or credited and then posted and recorded against the contract line. It may be required to create purchase orders for these charges unless the contract itself can be used.

FKC transactions are invoices for below the line administration charges. These are calculated from draw-down from 'Above the line' activity. Charges are not referenced to any 'Above the line' activity, other than the FMS case. Consequently, a PO is created for these invoices and a GR is posted, if the GR is required by the document type.

Delivery list processing is configurable and allows you to select the processing that will be actioned by the DIC. This allows you to determine which DIC messages are processed automatically and which are retained for manual assignment or processing. The created invoices created will not be paid; rather, all FMS payments are made in advance to a single FRB bank account. Therefore, in all cases, none of the FMS invoices generate actual payments.

As the pre-payments are made against the vendor with reference to the FMS contract, the vendor account should be in credit, allowing the invoices to be ‘cleared’ against the credit value held against the vendor. In the event that the vendors account is not in credit, and a payment voucher maybe produced, the invoice needs to be either coded to an ‘FMS suspense account” for later settlement, or blocked for payment. Any blocked invoices need to be resolved for clearing prior to case closure and reconciliation.