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REVOLVING AND MANAGEMENT FUNDS Con. military services on a reimbursable basis. Production in

Intragovernmental funds-Continued

1964 was 2.4 billion printing units and is estimated at 2.2 billion in 1965 and 1966. The decrease in production is due to a reduction in operations to one shift.

Laundry and dry cleaning service. There were 43 plants operating under this fund during 1964 and no further changes are projected for 1965 or 1966. Total production in 1966 is estimated at 104 million pieces of laundry and dry cleaning as compared with 104.9 million for 1964 and 104.2 million in 1965.

Identification code 07-40-4922-0-4-051

10

11

14

10

70

AIR FORCE INDUSTRIAL FUND

Program and Financing (in thousands of dollars)

Program by activities:

Cost of goods and services
produced:

90

Printing and duplicating...
Laundry and dry cleaning.
Military Air Transport Service

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from:

Customer orders received:
Printing and duplicating, net.
Laundry and dry cleaning...
Military Air Transport Serv-
ice, net.

Total customer orders
received.

Administrative budget ac

counts.

Non-Federal sources (10 U.S.C. 2208(h)) 21.98 Unobligated balance available, start of year....

23.98 Unobligated balance transferred to "Military personnel, Air Force" (77 Stat. 254)....... 24.98 Unobligated balance available, end of year..

New obligational authority..

Total obligations...

Financing:

Receipts and reimbursements

Relation of obligations to expendi

tures:

Total obligations.

Receipts and other offsets (items 11-17)..

71

Obligations affecting expenditures... 72.98 Receivables in excess of obligations, start of year... 74.98 Receivables in excess of obligations, end of year.

Expenditures..

1964 actual

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400,161

-406,252

1965 estimate

-6,092

-5,645

41,281

29,545

10,311 7,650 451,900

469,861

469,861

469,861

1966 estimate

-406,252 -469,861-427,277 (-397,349) (-455,245)(-413,831) (-8,903) (-14,616)| (−13,446) -82,955 -79,046 -79,046

10,291
7,586

409,400

469,861

427,277

427,277

-10,311 -10,291
-7,650 -7,586

-451,900 -409,400

-41,281

11,748

-29,533

427,277

79,046 79,046

427,277

-469,861-427,277

-11,748

1,748

-10,000

1 Balances of selected resources are identified on the statement of financial condition." 2 Adjustment in selected resources.For. 1964 consists of liabilities assumed for accrued annual leave in the amount of $34 thousand offset by materials and supplies capitalized in the amount of $83 thousand.

-This fund finances industrial and commercial type
activities on a reimbursable basis (10 U.S.C. 2208).
There are 10 plants financed under this program. These
and
service.-
plants provide area support to the Air Force and other

Military Air Transport Service.-The Airlift Service portion of the Military Air Transport Service was included under this fund on July 1, 1958. The size of MATS and the extent and nature of its operations are keyed to Joint Chiefs of Staff approved military wartime airlift requirements. These requirements are either hard core or civil eligible. Because of their nature or the nature of the missions to be supported, the critical or hard core requirements must move in military operated aircraft. The civil eligible requirements can move in either military or civil operated aircraft.

To have the capability to surge to meet wartime airlift requirements, the military airlift aircraft must be exercised appropriately during peacetime. The peacetime airlift capability so produced is used in the interest of economy in meeting peacetime airlift needs of the Department of Defense. Military aircraft are used to provide air evacuation of patients; special air missions; training of airborne troops; and, as augmented by commercial aircraft, common-user airlift of passengers, cargo, and mail. Airlift service resources and workload are as follows:

1965 estimate 1966 estimate

474

474

* 59

61

533

535

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Financing the budget program. This program is financed by customer orders for services. These orders constitute valid obligations of the ordering appropriations and authorize activities financed through the fund to provide services requested. Costs are charged initially to the working capital of the fund and are billed to customers on the basis of established tariff rates for services provided.

Operating results and financial condition.-For 1964
revenue exceeded expenses by $1.9 million, mainly as a
result of the operation of the MATS airlift service. Re-
tained earnings increased an additional $4.5 million in
1964 as a result of adjustments of prior year revenues and
requirements for airlift service.
expenses. Revenue is expected to increase over the 1964
level in both 1965 and 1966 due to anticipated increases in

It is estimated that collections will exceed expenditures
Expenditures exceeded collections by $29.5 million in
by $29.5 million in 1965 and $10 million in 1966.
1964 due to acceleration in payment of accounts payable.

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REVOLVING AND MANAGEMENT FUNDS-Con. financed under this fund since May 1962. The activity

Intragovernmental funds-Continued

produces clothing and textile items required on short notice, in small lots, to special measurement, or under other conditions which make procurement from commercial sources impractical. The factory also serves as a pilot production plant to test design specifications and production methods, and provides a part of the production base for industrial mobilization.

DEFENSE INDUSTRIAL FUND

For the Defense Industrial Fund $30,000,000 to be derived by transfer from the Defense Stock Fund.

Program and Financing (in thousands of dollars)

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APPENDIX TO THE BUDGET FOR FISCAL YEAR 1966

Total cost of goods and services
produced...

1

Total program costs.
Change in selected resources
Adjustments in selected resources (ac-
crued leave liability assumed).

Total obligations. -

Financing:

Receipts and reimbursements: Customer

orders received:

Clothing and textile center..
Communication services....

11
Total customer orders received (ad-
ministrative budget accounts)... -12,712
21.98 Unobligated balance available, start of

year.

-3,503

22.98 Unobligated balance transferred from "Defense stock fund" (annual appropriation act)

24.98 Unobligated balance available, end of

year..

New obligational authority.

Relation of obligations to expenditures:
Total obligations.

Receipts and other offsets (items
11-17)....

Obligations

tures.

72.98 Obligated balance, start of year. 74.98 Obligated balance, end of year.

Expenditures.

affecting expendi

1964 actual

10,066

10,066

10,066
-324

9,742

-12,712

6,473

9,742 -12,712

-2,970
531
-611

-3,051

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To provide for closer supervision, more effective utilization and greater economies in the Defense communications system, the Secretary of Defense, on August 28, 1964, approved, effective July 1, 1965, the establishment of the communications services activity to be financed under this fund, under the management of the Defense Communications Agency. Initially this activity will finance, on a reimbursable basis, leased communications services provided in the continental United States through AUTOVON (Automatic Voice Network-switch system as a single worldwide network in which all analog traffic will be handled regardless of the functional nature), AUTODIN (Automatic Digital Network-which will handle as a single worldwide network all digital traffic of an operational, logistical, or other functional nature), and other leased communications services, for Defense and certain other Government agencies. As other communications elements or subsystems relating to the Defense communications system or National communications system operations are identified and costed, it is planned they will also be financed through this fund.

Budget program.-Costs increase for 1966 because the communications services activity is added in that year. Costs decrease for clothing manufacturing from 1964 through 1965 and 1966. This reflects the plan to reach, by the end of 1966, an employment level representing the minimum economical level for maintaining the required balance of skills at a desired ratio of overhead and production employees. These employment decreases are being accomplished through attrition. By the end of 1966, the employment at this factory will be about 1,000 less than the employment in the two separate factories previously operated, and annual operating costs will be about $4 million below levels previously planned.

Financing the budget program. This program is financed by customer orders. For 1966, a transfer of $30 million is proposed from the Defense stock fund to provide initial working capital for the communications services activity.

Operating results and financial condition.-Clothing operations in 1964 resulted in a gain of $85 thousand which, partially offset by a previous deficit of $17,000, produced a cumulative operating gain of $68 thousand since the inception of the fund. Break-even operations June 30, 1966, is estimated at $32,977 thousand, consisting are forecast for 1965 and 1966. Government equity at of Treasury balances transferred to the fund of $31,571 thousand, inventories and other assets capitalized net of operating gain of $68 thousand. liabilities assumed of $1,338 thousand, and a cumulative

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361

7,991

-195 1,000 12,588

650 -1,650

-650

11,743

8,139

610

52

1

252,333

10 4,323

1,237

266,705

10,000

276,705

1,686

1,639

6.6 $6,947 $4,410

1966 estimate

336,366 338,312 338,959

Receipts and other offsets (items 11-17)-336,561 -337,312 -338,959

9,396 327,550 1,366

10,039 327,550

1,370

338,312 338,959

-336,535 -337,244-338,886 -26 -68 -73 -5,457 -5,652 -4,652 5,652 4,652 4,652

-2

150

1,650 -1,650

1 Reimbursements from non-Federal sources are funds from employee serviceconnected activities, such as Navy Mutual Aid, AFGE, Navy Relief Society. DOD Concessions Committee, U.S. Army Welfare Funds and European Exchange System Funds.

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