How a case is reconciled and closed

← All Insights

1. What closure means

A case does not end when the last crate arrives. The manual sets out everything that has to be true first: closure occurs "when all material was delivered, services were performed, other requirements of the Letter of Offer and Acceptance (LOA) were satisfied, known financial transactions (including collections) were completed, and the purchaser receives a final statement of account in the next DD Form 645" (SAMM C16.1.1.2).

Two of those conditions are financial rather than logistical, which is why cases stay open long after delivery stops. The money has to be reconciled, and the partner has to receive a statement saying so.

Reconciliation is not a closing task. It begins when the case is implemented and does not end until the case is finally closed, split into an active phase that runs during execution and a closure phase that follows (SAMM C16.1.3). A case that was reconciled as it ran closes quickly. One that was not becomes an archaeology exercise.

2. The status everything turns on

The gate into closure is a status called supply or services complete. "Cases are not considered candidates for closure until they become SSC, meaning all logistical actions are completed and all conditions of the LOA are satisfied" (SAMM C16.1.5).

It is reached line by line before it is reached case by case: "A line is reconciled for closure when it is SSC and a case becomes a candidate for closure when all lines are SSC" (SAMM C16.2.12).

Recording it is time bound. Once the conditions are met, lines and cases "shall be coded by the IA with this status and the actual date of SSC within five (5) business days" in the relevant systems (SAMM C16.2.12.2). The actual date matters more than the coding date, because later clocks run from it.

There is also a rule for cases that stall with a small unused balance. The manual sets residual value thresholds by case size, and where the leftover exceeds the threshold the implementing agency engages the partner for disposition instructions before moving the case toward closure (SAMM Table C16.T1).

3. Two closure regimes

Cases close under one of two procedures, and which one applies is not a case level choice.

The accelerated procedure is mandatory for partners whose cases are funded by American grant financing, and voluntary otherwise. It allows a case to be closed while obligations remain outstanding, with funds held against them in a suspense account (SAMM C16.3.1.1).

The alternative applies to partners outside that procedure whose cases are funded wholly from national funds, and it is required for capacity building programs (SAMM C16.3.1.2). Here nothing may remain outstanding.

Under either regime, a case with nothing outstanding closes outright: "A case shall be direct final closed (i.e., not interim closed) if the ULO equals zero, even if the supporting contracts remain open" (SAMM C16.3.1.1.2). An open contract behind the case is not itself a reason to hold the case open.

4. The year that has to pass

Both regimes leave room for the partner to raise a problem with what was delivered. Under the accelerated procedure the window is twelve months following delivery, and the manual states what happens at the end of it: "After the 12-month period, cases will be closed" (SAMM C16.3.1.1.1.1).

Under the other procedure the case must have been at that status for at least twelve months following final delivery, with the period calculated from delivery or passage of title rather than from the status date. It can be shortened where the partner confirms in writing that no discrepancy report is expected (SAMM C16.3.1.2.1).

That written confirmation is the only lever a partner has over this timetable, and it trades speed for the right to complain later. What a discrepancy report involves is set out in supply discrepancy reports.

5. The transactions that do the work

Closure is executed through a small set of coded transactions, and knowing them makes status reports legible.

• The first "signifies IA completion of its actions necessary for DFAS-IN to close the case" (SAMM C16.3.9).
• The second is generated by the accounting system and reports the case closed.
• The third removes the case from the closure candidate inventory.
• The fourth reverses matters: it "reopens a non-ACCP case or moves an ACCP case from Final to Interim closed status" (SAMM C16.3.9.2).

Before those run, the implementing agency completes a closure certificate and the supporting documentation, and sends it to the accounting office (SAMM C16.3.8). There is then a service standard. The accounting office "should close all cases that do not have any outstanding or unresolved issues within 30 days of closure certificate and acceptance" of that completion transaction (SAMM C16.3.9.3).

6. Who does what

Responsibility is concentrated rather than shared. "Ultimately, the FMS case manager (CM) in the Implementing Agency (IA) is responsible for all aspects of the case(s) under his/her purview, to include review, reconciliation and closure" (SAMM C16.1.6.1).

The agency sets policy and decides disputes, serving "as final arbiter for case reconciliation and closure issues raised by IAs and DFAS-IN" (SAMM C16.1.6.2). The accounting office performs the accounting and closes cases. Contract administration and audit organizations close out the contracts underneath.

The partner has a defined part in this, and it is more active than it looks. The manual expects it to advise which cases are wanted for closure, and to coordinate that decision between its defense ministry and its service level. It is also expected to pay promptly where a case is underpaid, and to take part in financial management reviews (SAMM C16.1.6.6).

That list is the practical answer to why old cases sit open. Closure needs a decision from the buying government, and nobody else can supply it.

7. After closure

A closed case is not always finished. Where a valid discrepancy report arrives afterwards, a case closed under the accelerated procedure moves from final back to interim closure so the claim can be processed. A case closed under the other procedure has to be reopened altogether (SAMM C16.3.17).

The same is true where late costs appear. Cases outside the accelerated procedure, and cases belonging to partners who hold no tolerance for outstanding obligations, "must be reopened for valid post-closure financial activity" (SAMM C16.3.16.2), with the agency's approval.

This is why closure is worth pursuing rather than avoiding. An open case accrues administrative attention indefinitely, while a closed one can be reopened for cause on a defined route. What happens to the money in the meantime is set out in closure deadlines and what happens to leftover funds.

Key terms

SSC	Supply or services complete, the status a case must reach before it can be a closure candidate. SAMM C16.1.5.
ULO	Unliquidated obligation, money committed but not yet paid out.
ACCP	Accelerated case closure procedures, which allow closure with obligations outstanding.
Interim closure	Closed but reversible, used where obligations remain against the case.
Closure certificate	The document the implementing agency submits to start the accounting closure.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Closing a case is administrative, but the programs behind it are not. Sentfore provides secure transport, protective security, facilities and life support around defense programs in difficult environments, and its principals have worked on overseas defense and security programs. Requirements can be sent through the contact page.