Printer Friendly

MFCS becomes Navy's financial accounting system.


The conversion of Trident Refit Facility Kings Bay, Ga., to the Material Financial Control System, Retail Ashore, marks the end of an era in Navy financial accounting. TRFKB was the last shore-based activity operating the Uniform Automated Data Processing System (UADPS) Applications E & F for financial accounting of Navy Working Capital Fund (NWCF) material.

UADPS E&F has been used by the Navy for the past three decades but is non-compliant to the Chief Financial Officers Act (CFO) passed by Congress in the early 1990's. MFCS is a general ledger accounting system that has been approved by the Navy and Department of Defense as being in compliance to this act.

The main objective of MFCS is to improve the accountability, and therefore the control, of Navy Working Capital Fund (NWCF) material. To accomplish this objective it centralizes billing for stores account issues, establishes a General Ledger for double-entry accounting operations, promotes financial inventory accuracy, enhances management information and control, and generates fiduciary reports and financial statements.

This article will provide a short history of MFCS as a program, an explanation of the system structure and its functional benefits, a description of the three component projects that comprise the MFCS program, and a discussion of the remaining task to complete MFCS as a single financial system--MFCS Retail Ashore.

MFCS History and Mission

MFCS is the first radically different accounting system to be employed by the Navy in the last thirty years. MFCS was originally designed as a vehicle to standardize and centralize financial accounting and billing operations to improve the management of the Navy's wholesale inventory at the Navy Inventory Control Point.

The mission of the NAVICP is to identify, compute/forecast, budget, procure, repair and direct the distribution and issuance of repair parts inventory to support fleet and shore logistics requirements. MFCS was the financial accounting tool to support this mission.

Beginning in 1994, the Inventory Accounting and Billing Module (PX06) of MFCS was put into production and operated as one of the financial control application modules of the Uniform Inventory Control Program (UICP) operating at NAVICP.

In November 1995, the Assistant Secretary of the Navy for Financial Management and Comptroller (ASNFM&C) and the Director of Defense Financial Accounting Services--Headquarters (DFAS-HQ) jointly selected MFCS to perform afloat and ashore retail inventory financial accounting in addition to wholesale material accounting. In that same decision, Defense Finance and Accounting Service (DFAS) Cleveland proposed using MFCS as an interim migratory system to replace several legacy stock fund systems. The program then became a "joint venture" between the DFAS and the Naval Supply Systems Command.

The supply and management functions of MFCS are owned by NAVSUP and NAVSUP and DFAS-Cleveland jointly own the financial functions.

MFCS Functions and Benefits

MFCS performs a variety of functions that automate and improve inventory accounting and financial management. Designed to interface with other applications used by NAVSUP and DFAS, MFCS provides total "cradle to grave" accountability. It is designed to automatically interface with other applications without manual intervention.

More specifically the system provides, among other features, online integrated financial databases; standard General ledger document reports; cash sales and interfund billing statements; and month-end financial reports.

The fundamental benefit realized from MFCS is the ability to ensure that material purchased is received, accounted for within both the supply and financial modules, and then billed when expended from the Supply System. Billing procedures and reports generation occur at the appropriate level within the material accounting framework.

The most significant cost avoidance benefit to MFCS is realized from the discontinuation of several legacy systems. These systems include the Uniform Automated Data Processing System (UADPS) applications E&F, the Shipboard Uniform Automated Data Processing System (SUADPS) Special Accounting Classes 207 and 224. Other benefits of MFCS include:

* Maximized use of real time capabilities rather than batch processing;

* Daily processing of input rather than weekly or monthly;

* Provides financial visibility of Unreconciled Balances (URBs) and consistency between inventory and financial on-hand values.

System Structure

The framework for MFCS is based on DoD/MILS standards using the DoD Standard General Ledger Account structure. These standards and the basic concepts for material accounting, allow MFCS to perform accounting for any type of material. The information used by MFCS is all transactional level data provided by the logistics systems UADPS, SUADPS and RSupply (Relational Supply). MFCS allows these transactions to be processed on a daily basis through TIRs (Transaction Item Reporting) as opposed to the monthly submittal of information from UADPS E&F or SUADPS.

The PX06 module of MFCS accomplishes the inventory accounting and billing for material transactions. To accomplish Allotment Accrual Accounting and Expenditure Processing two new modules were added to MFCS/UICP. These modules subsequently became known as PX02 and PX04. Programming for these modules commenced in 1996.

To assure MFCS was created in compliance with all appropriate and applicable federal regulations, it was developed using the DFAS Guide to Federal Requirements for Financial Management Systems (commonly known as the "Bluebook"). The Bluebook provides approved interpretation of such legislation as the Chief Financial Officer (CFO) and Financial Management Regulations (FMR).

The legacy financial applications processed data independently at each activity that ran UADPS or SUADPS and then updated the DFAS Central Database (CDB). This decentralized financial accounting of material and lack of systems integration throughout the Navy caused burdensome reconciliation processes for the activities that operated these systems as well as difficulties for DFAS to balance the CDB. By centralizing financial accounting in one system prior to sending the data to the CDB the following advantages are gained:

* Automates reconciliation processes;

* Automates matching of receipts and bills in the MFCS database that would not otherwise match up in decentralized non-integrated databases;

* Improves data for Budget Project Managers;

* Simplifies system infrastructure support,

* Standardizes business practices Ashore & Afloat, Retail & Wholesale;

* Complies with Congressional legislation.

As previously mentioned the PX06 module for Inventory accounting and billing has been operational since 1994. Developments of the PX02 and PX04 modules are a pivotal component of the system to establish accountability and control of financial transactions. Most notably these modules provide

* Real time status of Funds;

* Funds Certification;

* Automatic obligation pre-validation check prior to payment;

* Automatic notification of material in transit from Commercial Source

Not only are these modules the key to improved financial accountability but also the key to achieving compliance to the federal regulations as well.

The MFCS Program Office

The MFCS Program office resides at NAVSUP and is directed by the author. The MFCS Executive Board consisting of senior military and civilian personnel from NAVSUP; NAVICP; Navy Supply Information Systems Activity (NAVSISA), formerly Fleet Material Support Office; DFASCL; and ASN FM&C oversees the program. MFCS as a program consists of the following three project offices:

* PX02/04 Development;

* MFCS Retail Afloat;

* MFCS Retail Ashore.

Begun in 1996, the PX02/04 modules were completed in 1999 and extensive testing of the modules was conducted prior to implementation. PX02 and PX04 became operational as UICP production modules in June 2000.

The Retail Afloat project began in 1996 with the conversion of the Afloat SAC207 and 224 activities and the Marine Aviation Logistics Squadrons (MALS).

In 1997 a Proof of Concept to convert a UADPS activity from Applications E & F to MFCS was developed and implemented based upon the Afloat design. This crossover proof of concept was invaluable in determining the necessary requirements for implementing MFCS at ashore activities as will be seen below.

In 1999 the Afloat/MALS implementations were completed. The remaining UADPS-E&F activities conversions were recently completed.

MFCS Retail Ashore

The MFCS Program is now Retail Ashore. As previously mentioned, Retail Ashore began in 1997 with the proof of concept demonstration where a relatively small supply activity operating UADPS E&F for financial accounting was converted to MFCS. From this proof of concept, it was determined that there were many impediments to implementing MFCS to a larger stock point such as a Fleet and Industrial Supply Center (FISC).

To resolve these impediments, the NAVSUP Retail Ashore project officer convened a working group of accounting, supply, and system technical professionals from throughout the Navy and DFAS. Members of the working group came from DFAS-Cleveland, Operating Location (OPLOC) Norfolk, OPLOC-San Diego, Commander Atlantic Fleet, Commander Pacific Fleet, NAVSUP, NAVICP, NAVSISA, and FISCs.

During several weeklong meetings over the course of a nine-month period in 1998 the working group identified 67 current business processes Afloat and Ashore that would require modification, elimination or resolution to allow MFCS to operate at a large ashore facility. The group then determined solutions for all of these business process problems and achieved unanimous agreement as to the best course of action. These solutions were briefed to the eight member MFCS Executive Board who approved the agreed upon solutions.

Upon completion of the working group meetings it was determined that the best candidate for initial implementation would be FISC Jacksonville.

The next task was to create a requirements statement for NAVSISA, that the software programmers could turn into computer code. This Requirements Statement (RS) was divided into a three-phase process as follows:

* Necessary code to implement a FISC Prototype;

* Required code to implement at the remaining FISCs, and;

* Enhancements to MFCS deemed necessary by the Ashore work group.

The RS was written and a walkthrough conducted by the potential MFCS users in December 1999. After minor modifications and estimating, the NAVSISA programmers commenced work. Discussions with FISC Jacksonville concerning the implementation were conducted and the preparations for conversion began.

After a successful prototype, shore implementations began.


MFCS is an exciting, new financial system that promises to dramatically change material accounting. The first new financial system in a generation, MFCS's fundamental premise is improved accountability, and therefore the control, of Navy Working Capital Fund material. MFCS provides a centralized database for transactional data allowing improved inventory accountability and financial accuracy. Consisting of three separate projects, the program has worked toward this objective. With all projects completed MFCS has reduced the NWCF accounting infrastructure for ashore, afloat, retail, and wholesale to one financial accounting system.


The author would like to acknowledge CDR Thomas Leonard, SC, USN, Fred Toole, and Barb Weibley of the Navy Supply Information Systems Agency, Dick Wilger, Buddy Osborne and Latrelle Renaud of DFAS Cleveland Systems Division, and Judith Rowe and her team of dedicated professionals at CACI Corporation. All of the above either contributed directly or indirectly to the success of this program and therefore contributed to the development of this paper.


Information Technology Solutions, Inc., Material Financial Control System, Fleet/TYCOM Overview. Unpublished, 1997.

IBM Consulting Group, Material Financial Control System, Business Case Analysis, Unpublished, 1999.

CDR Douglas Borrebach, SC USN, Material Financial Control System--Project Review and Status Update, Naval Supply Systems Command, Unpublished, 2000.

CDR Tim Worstell, SC USNR, received a bachelor's degree in economics from Washington University in St. Louis, Mo., as well as a master's degree in health administration and Master of Business Administration from the University of Missouri-Columbia, Mo.
COPYRIGHT 2003 U.S. Department of the Navy, Supply Systems Command
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Worstell, Timothy J.
Publication:Navy Supply Corps Newsletter
Date:Jul 1, 2003
Previous Article:Relevant Information For Leadership (RIFLe).
Next Article:From the Supply Corps archives: the iodine swab incident: what a strange twist of fate is shown in this story of life and death.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |