ADC 346 

DLMS Interfund Billing System Procedures 

1. ORIGINATING SERVICE/AGENCY AND POC INFORMATION:

a. Service/Agency: Defense Logistics Management Standards Office (DLMSO) 

b. Originator: Mr. Robert Hammond, DLMSO, DOD Finance Review Committee 

Chair, email: Robert.Hammond@dla.mil

2. FUNCTIONAL AREA: Finance, DoD 4000.25-M, Defense Logistics Management 

System (DLMS) Volume 5 (Finance), Chapter 5 - Interfund Billing System Procedures. 

3. REQUESTED CHANGE:

a. Description of Change: This change publishes procedures for DoD 4000.25-M, 

Defense Logistics Management System (DLMS) Volume 5 (Finance), Chapter 5 - 

Interfund Billing System Procedures. 

b. Procedures. Revise DoD 4000.25-M per the attachment. 

4. REASON FOR CHANGE: Provides interfund billing system procedures for DoD 

4000.25-M. 

5. ADVANTAGES AND DISADVANTAGES: 

a. Advantages: Provides interfund billing system procedures for DoD 4000.25-M. 

b. Disadvantages: None noted. 

c. Publication: DoD 4000.25-M, Defense Logistics Management System (DLMS) 

DLMS Volume 5 (Finance), Chapter 5 - Interfund Billing System Procedures. 
DoD 4000.25‐M

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ADC 346 Attachment 

ATTACHMENT TO ADC 346 

C5. CHAPTER 5

INTERFUND BILLING SYSTEM 

PROCEDURES

C5.1. POLICY

 C5.1.1. General. 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. Charges shall remain uncleared pending completion of 

research and resolution. 

 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
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ADC 346 Attachment 

 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 selfreimbursements 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 

97 NOT 4930 All DFAS-IN 
DoD 4000.25‐M

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ADC 346 Attachment 

Index Treasury Symbol Limit or Subhead Buyer CAO

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. 

 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 Treasury with a summarized classification of receipts and outlays processed 

under the interfund billing system. 

 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 Treasury as promptly as possible, but delivered no later than 

close of business on the 3rd 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.

 C5.6.6. Other Reporting Requirements

 C5.6.6.1 Extract of the Statement of Interfund Transactions
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 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 (DLMS 810L/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 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. 

                                                           

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).
DoD 4000.25‐M

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 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. Army, 

Navy, Air Force, and GSA shall prescribe procedures, consistent with those prescribed 

in this Manual, for: 

 C5.7.1. Reporting interfund reimbursements and disbursements originated by 

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

Interfund Transactions.” 

 C5.7.2. 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. 

 C5.7.3. Ensuring there are adequate controls over interfund related transactions 

such that: 

 C5.7.3.1. Lapsed accounts are not reported to the Treasury Department or 

the other DoD Components. 

 C5.7.3.2. Invalid account symbols are converted to the agency default 

appropriation.

 C5.7.3.3. Seller interfund reimbursements reported to the Treasury 

Department are based upon interfund billings validated by DAASC. 

 C5.7.3.4. Disbursements charged to billed offices are processed by the billed 

office. 

 C5.7.3.5. Uncleared Disputed Transactions. 
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 C5.7.3.5.1. Uncleared “disputed” transactions shall be researched and

cleared within a reasonable period; that is, within 120 calendar days of the date the 

disbursement was reported to DFAS when the entitlement office and accounting office 

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

 C5.7.1.3.5.2. Within 90 days of the disbursement being reported to 

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

detail bill. When a customer leaves a detail bill un-charged for 120 calendar days, 90 

days if co-located, DFAS will contact the customer for an appropriation to charge 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.