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  • Question

    What type of funding should be used (O&M or Procurement) by our facility staff to install the new circuits?


    Answer

    The following information may be found in Financial Management Regulation 7000-14R Vol 2A Chapter 1 Oct 2008 Paragraph 010212. Budgeting for Information Technology and Automated Information Systems A. Information Technology and Automated Information Systems that are not embedded in weapons systems and/or major end item procurements are budgeted according to the investment and expense criteria (see paragraph 010201) and the appropriation or fund’s purpose.
    B. The correct appropriation for budgeting an IT effort is dependent on the activity and the underlying tasks that make up the IT effort.
    4. Procurement appropriations: Acquiring and deploying a complete system with a cost of $250,000 or more is an investment and should be budgeted in a Procurement appropriation. Complete system cost is the aggregate cost of all components (e.g., equipment, integration, engineering support and software) that are part of, and function together, as a system to meet an approved documented requirement.
     
    Financial Management Regulation 7000-14R Vol 2A Chapter 1 Oct 2008 Paragraph 010201 says the following about investments:


    Investments are costs to acquire capital assets such as real property and equipment. The following criteria shall be used to determine those costs to be classified as investments:


    ·  All equipment items that are not subject to centralized item management and asset control and have a system unit cost equal to or greater than the currently approved expense and investment dollar threshold of $250,000. The validated requirement may not be fragmented or acquired in a piecemeal fashion in order to circumvent the expense and investment criteria policy.

    · Construction, including the cost of land and rights therein (other than leasehold). Construction includes real property equipment installed and made an integral part of such facilities, related site preparation, and other land improvements.
     
    Based on the above, one would say the storage racks and power are part of a system.  As a system, the procurement appropriation is recommended to fund the new circuits and outlets. You are encouraged to discuss this issue with your command comptroller  to determine any additional command or service specific direction.

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