DODFMR Vol. 13 - Categories A, B, and C: The Architecture of NAF Policy

Department of Defense Financial Management Regulation (DoD FMR) Volume 13, titled “Nonappropriated Funds Policy,” establishes the comprehensive financial management, accounting, and reporting framework for all DoD Nonappropriated Fund Instrumentalities (NAFIs). Operating independently from the Treasury's appropriated funds, NAFIs are required by this volume to adhere to Financial Accounting Standards Board (FASB) Generally Accepted Accounting Principles (GAAP) and utilize accrual accounting. The regulation mandates the use of the NAF Standard General Ledger (NAFSGL) and provides detailed guidance on the classification, valuation, and recording of assets, liabilities, net worth, income, and expenses. It outlines rigorous financial reporting standards, including the preparation of standard financial statements (such as the Balance Sheet, Statement of Income and Expense, and Statement of Cash Flows), analytical ratios, and IRS reporting requirements. Furthermore, Volume 13 provides extensive policies for specialized NAF operations, including the administration of NAF payroll, employee deductions, and benefits portability, the integration of Appropriated Fund (APF) support mechanisms like Uniform Funding and Management (UFM), and the complex accounting requirements for measuring and disclosing defined benefit pensions and postretirement plans