ADC 294

Elimination of Treasury Suspense Account F3885 

1. ORIGINATOR: 

a. Service/Agency: Defense Finance and Accounting Service 

2. FUNCTIONAL AREA: Finance

3. REFERENCES: 

a. Treasury Financial Manual, Volume 1, Bulletin No. 2007-07, June 2007 

 b. DoDFMR Volume 3, Chapter 11, Unmatched Disbursements, Negative Unliquidated 

Obligations, In-Transit Disbursements, and Suspense Account 

c. DOD 4000.25-7-M, Military Standard Billing System (MILSBILLS) 

4. REQUESTED CHANGE: 

a. Description of Change: As a result of the Treasury Bulletin No. 2007-07, changes are 

required to MILSBILLS to discontinue the use of suspense account F3885 for the interfund 

transactions. 

b. Background: The Financial Management Service (FMS) established clearing (suspense) 

accounts to temporarily hold unidentifiable general, revolving, special, or trust fund collections 

that belong to the Federal Government. The funds remain in the suspense accounts until agencies 

can classify them to the proper receipt or expenditure accounts. This process, however, leads to a 

delay in accurately reporting the collections in the proper accounts. In an effort to have more 

accurate financial information on a more timely basis, FMS has decided to discontinue the use of 

certain suspense accounts (including F3885) and to require agencies to classify the collections to 

the proper receipt or expenditure accounts at the time the disbursements/collections are made. 

The DFAS Centers have been advised of this change and are taking appropirate action to 

comply. 

c. Procedures.

1. Revise MILSBILLS as indicated in bold italics in enclosures 1 and 2. 

5. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: Compliance with Treasury and DoD requirements

b. Disadvantages: None. 
c. Alternatives: None

6. IMPACT: 

a. Data Content/Procedures: DoD Components shall revise Component regulations and/or 

automated information systems for reporting requirements. 

b. Publication: DOD 4000.25.7-M, Military Standard Billing System (MILSBILLS) 
CHAPTER 5 – INTERFUND BILLING SYSTEM PROCEDURES

C5.1. POLICY

 C5.1.1. General. The interfund billing system and policies governing its use are 

prescribed in DoD Instruction 7420.12 (reference (k)), except for the exclusions shown below. It 

is DoD policy that DoD customers shall authorize suppliers to use the interfund billing system to 

reimburse themselves for materiel, hazardous materiel and waste services, and services related to 

materiel shipments. 

 C5.1.2. Exclusions

 C5.1.2.1. The interfund billing system is not mandatory for use when the funds 

involved are Military Assistance Grant Aid or where only limited sales occur between the DoD 

Components. 

 C5.1.2.2. The interfund billing system may not be used to bill non-DoD customers 

(e.g., state or local governments, private contractors, individuals, or nonappropriated fund 

instrumentalities) or major end items such as complete aircraft, ships, tanks, space vehicles, and 

missiles. 

 C5.1.2.3. Except for GSA, FAA, and NOAA, non-DoD suppliers may not use the 

interfund billing system to bill DoD customers. 

C5.2. PRINCIPLES OF THE INTERFUND BILLING SYSTEM

 C5.2.1. The interfund billing system allows suppliers to reimburse themselves, from 

appropriations designated by the customer, at the time of billing. The supplier forwards an 

automated billing to the billed office and reports, to the Treasury Department, a reimbursement 

of the supplying funds, with an offsetting charge to the customer’s fund. 

 C5.2.2. Interfund bills, therefore, are both “bills” and “notices” to a customer that its funds 

have been charged and the “bill” paid. 

 C5.2.3. Billed offices shall, upon receipt of the “bill”, either accept and record the charge for 

the complete or partial bill or, when the charge, at detail bill level, is questionable or erroneous

“in dispute”, record the charge into the designated default account for further research 

suspend the charge. Charges shall be remain uncleared pending completion of research and 

resolution.uspended by transferring the questionable or erroneous portion to the interfund 

clearing account (treasury account symbol F3885). When the charge is acceptable, but the 

account disbursed by the billing office is not, the billed office shall accept and record the charge 

to the proper account. The billed office shall also follow procedures prescribed by its disbursing 

officer to correct the account reported to the Treasury Department.

 C5.2.4. Only the billing office or CAO is authorized to adjust or otherwise reverse 

reimbursements reported to the Treasury Department on behalf of the billing office. 
C5.3. PREPARATION OF INTERFUND BILLS 

 C5.3.1. Interfund bills are made up of one or more detail billing records, with the same 

fund code, and a single summary billing record. The summary billing record represents a 

summary of the supporting detail billing records. 

 C5.3.2. Detail billing records in support of interfund bills shall be prepared in accordance 

with Appendix 3. 

C5.4. CENTRAL ACCOUNTS OFFICES

 C5.4.1. General. CAOs are DFAS Centers or other federal agencies given the 

responsibility of reporting on interfund in the Statement of Interfund Transactions to the 

Treasury Department. Depending upon the customer organization, they may have seller and or 

buyer CAO responsibilities. 

 C5.4.2. Seller CAO. DAASC forwards copies of interfund summary billing records to 

seller CAOs. Based upon these records, seller CAOs report seller interfund self-reimbursements 

and related buyer disbursements to the Treasury Department. Seller CAO interfund bill 

responsibilities are identified by the service code of the seller DoDAAC described in the 

following table: 

Table C5.T1. Seller CAO

Seller DoDAAC Begins With Seller CAO

Numeric GSA 

F DFAS-DE 

M DFAS-DFAS-KC 

N DFAS-CL 

Other DFAS-IN 

 

C5.4.3. Buyer CAO. Buyer CAOs are responsible for interfund bill clearance and report, to the 

Treasury Department, buyer adjustments of the disbursement side of seller reported interfund 

transactions. Neither buyers nor their CAOs can adjust, either directly or indirectly, the 

reimbursement side of interfund transactions reported by seller CAOs. Buyer CAO interfund bill 

responsibilities are determined by the appropriation disbursed as follows: 

Table C5.T2. Buyer CAO

Index Treasury Symbol Limit or Subhead Buyer CAO

17 All All DFAS-CL 

21 All All DFAS-IN 

57 All All DFAS-DE 
Index Treasury Symbol Limit or Subhead Buyer CAO

97 NOT 4930 All DFAS-IN 

97 4930 All DFAS-IN 

C5.5. INTERFUND REPORTS

 C5.5.1. Billing Office Reports. CAOs shall base interfund reimbursements upon summary 

billing records received from DAASC for interfund bills passing MILSBILLS prescribed 

DAASC edits. Therefore, upon implementation of the revised seller interfund reporting 

procedures, MILSBILLS no longer requires sellers to forward DD Form 1400, Statement of 

Interfund Transactions, or equivalent reports to their accounts office. However, CAOs may 

continue to require their reporting activities to submit seller interfund reports for a transition 

period determined by the accounts office. This isn’t necessarily true. For example, GSA still 

must submit a manual DD Form 1400 as they don’t have an electronic version like DFAS does. 

 C5.5.2. Billed Office Reports. Billed offices shall report; that is, correct or otherwise 

clear, interfund disbursements charged to their office in accordance with procedures prescribed 

by their Service or Agency. 

 C5.5.3. Department Level Reports. CAOs shall consolidate departmental level "Statement 

of Interfund Transactions" and prepare related reports from interfund reports received from 

billed offices and summary billing records validated by DAASC. 

C5.6. STATEMENT OF INTERFUND TRANSACTIONS

 C5.6.1. Purpose and Reports Control Symbol. This section prescribes a monthly report on 

interfund transactions. The DD 1400 “Statement of Interfund Transactions” provides 

TreasuryOSD with a summarized classification of receipts and outlays processed under the 

interfund billing system. These reporting requirements are assigned RCS: DD-Comp (M) 1655.

 C5.6.2. Applicability and Scope. The provisions of this section apply to the DoD 

Components and to their disbursing officers, (referred to collectively as “disbursing officers”). It 

establishes the requirements and procedures for the preparation and submission of reports on 

interfund transactions. 

 C5.6.3. Report Form. The Statement of Interfund Transactions must be prepared monthly 

and contain totals for each appropriation/limit charged and reimbursed, the reporting period, and 

identify the reporting office. GSA shall submit an equivalent “Statement of Interfund 

Transactions.” 

 C5.6.4. Frequency and Distribution. The “Statement of Interfund Transactions” must be 

submitted to the TreasuryUSD(C) as promptly as possible, but delivered no later than close of 

business on the 3rd8th workday of the month immediately following the close of the reporting 

month. 
 C5.6.5. Adjustments. In preparing the “Statement of Interfund Transactions”, CAOs or 

offices designated by the DoD Components or participating Agencies shall convert invalid 

accounts to the charged agency’s default appropriation as indicated in Appendix 2.2 of this 

guidanceclearing account “F3885" - “Undistributed Intragovernmental Payments.”

 C5.6.6. Other Reporting Requirements

 C5.6.6.1 Extract of the Statement of Interfund Transactions

 C5.6.6.1.1. Each Military Department (and GSA for its equivalent report) must 

furnish an “extract” of the “Statement of Interfund Transactions” to the DoD Components and 

other participating Agencies for which it collects or disburses showing the transactions for that 

Component or Agency. The DoD Components may be identified by their unique suffix/limit 

code on department “97" appropriations. 

 C5.6.6.1.2. Extracts of the “Statement of Interfund Transactions” (and GSA 

equivalent) which are forwarded to DoD central accounts offices shall be supported by summary 

billing records (DI code FS). The summary billing records shall be forwarded to the CAO 

responsible for clearance via electronic means. The CAO responsible for clearance is 

determined by the departmental index of the appropriation disbursed, and, in the case of 

department “97" appropriations, by the DoD Component identification contained in the 

appropriation’s suffix/limit code. The following table identifies the CAO responsible for 

clearing interfund bills: 

Table C5.T3. DoD CAOs

Clearance CAO COMMRI Index Component1

DFAS-Indianapolis RUQADVU 97 Other than USAF, USN, and USMC 

21 All 

DFAS-Denver RUVEGAA 97 USAF and SDDC limit FD30

57 All 

DFAS-Cleveland RUEBJNW 97 USN and USMC 

17 All 

 C5.6.6.1.3. The extracts should be submitted as soon as possible but no later 

than 2 workdays after the Statement of Interfund Transactions in submitted to USD(C). 

 C5.6.6.2. Defense Agency Appropriations. A “Statement of Interfund Transactions” 

summarizing the transactions by appropriation for each Defense Agency must be provided to the 

 

1 For purposes of this procedure, the Component Identification for 97X4930 is in the 1st position of the 

suffix/limit code and is A (USA), N (USN), F (USAF), M (USMC), and 5 (Defense Agencies). For other 

than 97X4930 the identification is in the 1st two positions and 01 (USA), 02 (USAF), 04 (USN), and 05 

(USMC).
Director for Budget and Finance, Washington Headquarters Service, Washington, DC 20301-

0001. 

 C5.6.7. Hard Copy Report Preparation

 C5.6.7.1. General

 C5.6.7.1.1. Each interfund report must be completed with the minimum 

information required. 

 C5.6.7.1.2. If more than one sheet is used to report the amounts of transactions, 

the grant total for each column must be shown on the last page of the statement. Page totals are 

optional. 

 C5.6.7.1.3. Each hard copy statement must be signed by the officer under 

whose direction it was prepared. 

 C5.6.7.1.4. Negative amounts must be identified by the suffix “CR.” 

 C5.6.7.2. Columnar Entries

 C5.6.7.2.1. Appropriation or Fund /Symbol. Enter the department index 

number assigned by the Treasury Department as a prefix to that department’s appropriation 

symbols, fiscal year or other appropriate indicator (e.g. “X” if no year, and etc.), treasury 

account symbol of the appropriation, other fund, or receipt account for which the amounts of the 

transactions are being reported. Include any prefix or suffix prescribed by the Treasury 

Department on the classification authorization. No other suffix or prefix may be shown. 

 C5.6.7.2.2. Reimbursements (Credits). Enter the amounts of appropriation 

reimbursements collected applicable to each related appropriation or other fund account. 

 C5.6.7.2.3. Expenditures (Charges). Enter the amounts of disbursements 

chargeable to each appropriation or other fund symbol. 

C5.7. CENTRAL ACCOUNTS OFFICE LEVEL INTERFUND PROCEDURES

 C5.7.1. Army, Navy, Air Force, and GSA shall prescribe procedures, consistent with those 

prescribed in this Manual, for: 

 C5.7.1.1. Reporting interfund reimbursements and disbursements originated by 

activities serviced by their disbursing offices and shall be included in their “Statement of 

Interfund Transactions.” 

 C5.7.1.2. Adjusting, , accepting or otherwise clearing interfund disbursements 

charged to activities serviced by their disbursing offices and whose adjustments shall be included 

in their Statement of Interfund Transactions. 

 C5.7.1.3. Ensuring there are adequate controls over interfund related transactions 

such that: 
 C5.7.1.3.1. Lapsed accounts are not reported to the Treasury Department or the 

other DoD Components. 

 C5.7.1.3.2. Invalid account symbols are converted to the agency default 

appropriation as defined in Appendix 2.2 of this regulation.

 C5.7.1.3.3. Seller interfund reimbursements reported to the Treasury 

Department are based upon interfund billings validated by DAASC. 

 C5.7.1.3.4. Disbursements charged to billed offices are processed by the billed 

office. 

 C5.7.1.3.5. Uncleared “disputed” transactions shall be researched and 

clearedAmounts placed in suspense; that is, charged to the clearing account, are transferred to 

another account or are otherwise cleared within a reasonable period; that is, within 120 calendar 

days of the date the disbursement was reported to DFAS when the entitlement office an 

accounting office are not co-located and 90 days when they are co-located.

 C5.7.1.3.5.1. Within 90 days of the disbursement being reported to 

DFASsuspense date, 60 days if co-located, DFAS will ask the customer to follow-up on 

uncleared detail billsclear the amount in suspense and provide an alternative account for the 

disbursement. When a customer leaves a detail bill unn itemcharged for 120 calendar days, 90 

days if co-located, DFAS will contact the customer for an appropriation to transfer thecharge 

to clear the detail bill. Only when a written notification that adjustment is forthcoming from 

the seller may the item remain unprocessed after this timeframe.one of the customer’s 

accounts.

 C5.7.1.3.5.2. The clearing account was authorized to temporarily record 

erroneous or indeterminate charges; therefore, the reporting of the clearing account at fiscal year 

end will not be authorized. Balances remaining in the clearing account at the end of fiscal year 

will be transferred to the customer’s account. These transfers will be reversed and the clearing 

account restored as of the new fiscal year.

C5.7.1.3.6. Interfund summary billing records held by a reporting (or passed to 

a responsible) finance activity in support of the interfund clearance process agree with the 

amounts and appropriations actually reported to the Treasury Department.
AP2.2. APPENDIX 2.2.

FUND CODES

NUMBER OF 

CHARACTERS: 

Two 

TYPE OF CODE: Alpha or Numeric 

AP2.1. Fund codes are two position alpha/numeric codes used, in conjunction with 

Service or Agency code of the billed office to designate the billing method (interfund or 

noninterfund). When interfund billing is indicated, the fund code also indicates the 

fund account to be charged (disbursed) or credited (refunded). 

• The fund code to disbursement fund account conversion tables are 

published online in Part I of the Fund Code Table at: 

https://www.daas.dla.mil/daashome/daasc_milsinq.asp

• Only valid appropriations and limits may be associated with fund 

codes.The undistributed intergovernmental payments account, F3885 

may not be associated with fund codes or used on interfund bills

• When a fund code used in the billing and adjustment process is not 

found on the fund code to disbursement fund account conversion table 

the appropriation charged will be assigned as follows:

Organization (Billed Service Code) Interfund Default Appropriation

Contractor (C,E,L,Q,U Not applicable, noninterfund 

NonDoD (G,Z,HX,Numeric) Not applicable, noninterfund 

Army (A,W) 21*2020 

Air Force (D,F) 57*3400 

Navy (N,P,R,V) 17*1804 

Marine Corps (K,M 17*1106 

Defense Logistics Agency (S,T) 97*0100.5100 97X4930.5999

Other Defense Agency (H) 97*0100 Not applicable, 

noninterfund

None of the above 97*0100

AP2.2. An additional use for the fund code, when the signal code is C or L, is to 

indicate the DoDAAC of the “bill-to” office. See AP1 for codes.

AP2.3. Requisitions submitted to DoD activities and the General Services 

Administration will always contain a fund code, unless the materiel requested will be 

issued without charge. When the materiel will be issued without charge the signal 

code (pos. 51) will be D or M (free issue) and the fund code will not be significant. 
APPENDIX 2.2 

Enclosuure 2 

74

4. Defense Agencies and others using H series DoDAACs may use fund codes 

designating interfund billing only if their requisitioning DoDAAC is identified as 

authorized to use interfund. See AP1 for authorized DoDAACs. 

5. Agency designated Fund Code Coordinators are responsible for maintaining fund 

codes for their Service or Agency. With the exception of DLA which has its own 

coordinator, DFAS maintains fund codes for Defense Organizations and Agencies. 

Fund code coordinators are identified at: http://www.dla.mil/j-6/dlmso/.