Propriety of Reimbursing a Nonappropriated Fund Instrumentality With Appropriated Funds

An Army accounting and finance officer requested an advance decision on the propriety of reimbursing a nonappropriated fund instrumentality (NAFI) with appropriated funds for work performed by NAFI employees in support of appropriated fund activities. There are two kinds of billeting activities at an Army base. The one for visiting officers and dignitaries is operated with appropriated funds. The other is an NAFI enterprise operated to provide guest accommodations for relatives of military personnel. The duties are not complex enough to justify having separate personnel for handling the paperwork of both types of accommodations. Therefore, NAFI employees provide some of the services for accommodations receiving appropriated funds. A voucher was submitted for payment for these services. The contracting officer refused to certify the voucher for payment on the basis that he did not have the authority to procure personal services in this manner. It is not necessary to determine if the services are of a personal nature and, therefore, not for procurement by the Army. Since the decision was made to offer two types of services under differing types of funding, some sort of arrangement needs to be devised to allocate costs for common expense items and salary expenses of the clerks employed to serve both types of accommodations. If the total number of NAFI clerks is disproportionate to the total number of NAFI transactions, redress can be made by replacing one NAFI clerk with one appropriation-funded clerk. If the allocaton of costs is still inaccurate, payment of the difference may be effected by treating this as a transfer between funds. Accordingly, the voucher may not be paid.