Working Capital Fund Management Flashcards

What is the primary purpose of a Department of Defense Working Capital Fund (WCF)?

Answer: To provide a revolving source of financing for goods and services provided to customers

WCFs are revolving funds that finance the cost of goods and services provided to DoD and other customers, with revenues replenishing the fund as charges are collected.

Which DoD instruction primarily governs Working Capital Fund financial management policies?

Answer: DoDI 7000.14-R (DoD Financial Management Regulation)

DoDI 7000.14-R, the DoD Financial Management Regulation (FMR), Volume 11B specifically addresses WCF policies and procedures.

What is a 'stabilized rate' in the context of DoD Working Capital Funds?

Answer: A fixed price charged to customers for an entire fiscal year to provide budget stability

Stabilized rates are prices set at the start of the fiscal year that remain constant, allowing customers to budget reliably without mid-year price fluctuations.

Which of the following is a major business area of the Defense-Wide Working Capital Fund?

Answer: Defense Finance and Accounting Service (DFAS)

DFAS is a Defense Agency activity funded through the Defense-Wide Working Capital Fund, providing finance and accounting services on a reimbursable basis.

How are WCF operating results that generate a 'net operating loss' typically addressed?

Answer: They are recovered through rate adjustments in future fiscal years

WCF losses are recovered by adjusting stabilized rates in future years so that the fund recoups the deficit over time without needing a separate appropriation.

Under DoD WCF policy, what does the term 'cash balance' requirement mean for a business area?

Answer: The fund must maintain sufficient cash to meet current operating needs without a Treasury loan

WCF activities are required to maintain adequate cash balances to meet day-to-day operating expenses and obligations without resorting to Treasury borrowing.

Which of the following WCF business areas provides depot-level maintenance and repair of military equipment?

Answer: Depot Maintenance Activity Group

The Depot Maintenance Activity Group is a WCF business area that performs depot-level maintenance and repair services for military equipment on a reimbursable basis.