Given the urgency of the wars we are in, the daunting global security
environment we will inhabit for decades to come, and our country's economic
problems, we simply cannot afford to move ahead with business as usual.
—Secretary of Defense Robert Gates
The Deputy Chief Financial Officer (DCFO) memorandum, "Policy Change for Real Property Financial Reporting," October 16, 2008, revised the Department of Defense's (DoD) Financial Management Regulations (FMR) and aligned the Department's financial management requirements to the Federal Accounting Standards. To remain in compliance with these revisions, the Department must now report imputed costs, i.e., the attributed costs associated with the use and operation of DoD's real property assets when a tenant DoD Component uses the asset in its operations free of charge. Further, a joint memorandum issued by the DCFO and the Deputy Under Secretary of Defense (Installations and Environment) (DUSD (I&E)) established a timeline and a working group to develop a methodology for implementing the new policy. This methodology identified the reconciliation of real property records between the Military Departments, the Defense Agencies, and the Field Operating Activities ("Agencies and Activities") as a key initiative to enable successful implementation of the imputed cost reporting policy. This initiative is consistent with DoD Instruction 4165.14, "Real Property Inventory and Forecasting," which requires Defense Agencies and Field Operating Activities to annually reconcile all real property data for property occupied or used by their Agency or Activity with their supporting Military Department or Washington Headquarters Services (WHS).
In order to ensure compliance with DoD policies, as well as accurate reporting and accountability for Department's inventory of real property assets and associated costs, this document presents DoD's standard strategy for achieving reconciliation of real property information and records. The reconciliation of real property information will occur through a systematic process and governance structure, which will require gathering and comparing a standard set of real property information related to assets occupied and used by DoD Components other than the accountable Military Department or WHS. The process also includes documenting, analyzing, and tracking identified discrepancies until they are resolved, and will require cooperation and consensus between the accountable Military Department or WHS and Agencies and Activities to ensure all applicable real property records are validated in a clear and consistent manner.