There are two ways for a receiving organization to accept a MIPR, Cat I (Reimbursable) and Cat II (Direct). The Cat II (Direct) version means they directly use the originators (your) fund cite to pay for their efforts on your behalf. What appears to be happening in this case is they are accepting your original fund cites as Cat I (Reimbursable) and 'up-fronting' the money with their no-year/revolving WCF and then reimbursing their appropriation(s) with your original funds. This is the way Cat I works and in and of itself is no problem.
The big caution here is that the onus is on the originating organization sending that 3400 and 3080 money to make sure they are meeting all the legal requirements on the execution of that money (time, purpose, amount, bona fide need, etc...) In particular FY10 O&M (3400) monies are currently expired and NOT available for obligation.