Unobligated balance brought forward. Unobligated Treasury balance transferred to (-) "Military personnel, Army" (75 Stat. 365 and 76 Stat. 318) and annual appropriation act.. "Defense stock fund" (10 U.S.C. 126). Recovery due to transfer of net obligations to "Defense stock fund". Unobligated balance carried forward (−). 30,403 32,250 34,333 195,218 180,000 170,000 8,914 8,000 7,000 2,279,090 1,828,638 1,832,242 9,657 -88,000 -16,100 -10,777-43,652 | -21,812 485, 177 256,466 9,146 -240,000-200,000 -50,000 2,550,877 1,744,306 1,753,476 Financing applied to program. 1964 estimate Obligations (from program and financing) - - Gross unpaid obligations transferred (-) to Gross expenditures.......... Sales (from program and financing). Increase (-) or decrease in accounts receiv- Applicable receipts............. 2,550,877 1,744,306 1,753,476 6,184 29,389 24,689 -438,588 2,118,472 1,773,695 1,778,165 2,279,090 1,828,638 1,832,242 69,881 56,057 -377 -109,391 2,239,580 1,884,695 1,831,865 -53,700 -121,108-111,000 This fund finances inventories of consumable supplies, minor items of equipment, and repair parts throughout the Army depot supply system, at certain stations in the continental United States, and in most of the depots of the major overseas commands. Material is purchased and held at these locations for resale and for mobilization. reserve (10 U.S.C. 2208). Supply and financial operations of the fund are centrally directed and controlled by the Department of the Army. In the financial statements the 500,000 items under the fund are classified into 15 categories which are managed through the Army Materiel Command, the Surgeon General, and the Continental Army Command. In 1963, the fund was extended to include certain aircraft parts and missile and rocket parts, and the statements include eştimates for these items. Reflected in 1963 is the extension of the fund to Korea and Okinawa for subsistence and clothing. The 1963 estimates also reflect a realinement 3.700 whereby aircraft, missile, and rocket parts are now in 153,659 161,669 152,823 115,542 10,050 12,121 3.383 3,700 2 1962 actual -8 12,971 -72 29,301 cluded in the stock fund and high cost repair parts are financed from Procurement of equipment and missiles, Army. With the exception of these high cost repair parts, the stock fund now finances the initial procurement of all centrally controlled supply items, repair parts, and minor equipment. The change in capitalized inventories of $1,321.7 million in 1962 was due principally to decapitalization of single manager material categories to the Defense stock fund. The change projected for 1963 is a decrease of $18.7 million consisting of decreases of $454.5 million due to the realinement program mentioned above and transfers to the Defense stock fund, partially offset by increases of $435.8 million. The increases include $392.5 million in aircraft, missile, and rocket parts, and $27.6 million through extension of the stock fund to cover subsistence and clothing in Okinawa and Korea. The change projected for 1964 is a decrease of $104.3 million resulting primarily from anticipated transfers to the Defense stock fund. Changes by category are as follows (in thousands of dollars): Clothing and equipage.... 1964 1963 estimate estimate Long supply.... Aircraft parts: Operating and other stocks. Mobilization reserve stocks. 17.2 Engineer supplies.. Chemical supplies.. 25.8 Long supply. 2.0 Medical-dental supplies: Defense supply service... Quartermaster general supplies. Transportation surface supplies.. Aircraft parts- Medical-dental supplies. Missile and rocket parts.. Ordnance tank-automotive supplies.. Other ordnance supplies. Petroleum products.. Signal supplies... Zone of the interior installations division... Single manager change in capitalized inventories.... Inventory donated to (-) other ac counts. Decrease (-) in undelivered purchases to Net change in capitalized inventories. -1,321,705 -18,728 -104,299 Budget program.-Obligations of $2,551 million in 1962 included $749 million for single manager activities now financed under the Defense stock fund. Except for this, obligations declined by $48 million from 1962 to 1964, the net of $124 million in increases to cover aircraft, missile, and rocket parts offset by decreases of $80 million for augmentation of war reserves and $92 million for operating stocks. Continued emphasis is being placed on maximum utilization of long-supply stocks and on conservative procurement of material in relation to sales requirements. Excluding the single managers, obligations for operating stocks were 5% greater than sales in 1962; for 1963 and 1964 obligations for operating stocks are forecast at 91% and 93% of sales, respectively. The program includes procurement for augmentation of procurement for augmentation of war reserve stocks of $130.3 million in 1962, $73.5 million in 1963, and $50 million in 1964. The budget program provides for year-end inventories as follows (in millions of Operating and other stocks.. Mobilization reserve stocks.. Long supply Missile and rocket parts: Operating and other stocks. Mobilization reserve stocks. Long supply.... Ordnance tank-automotive supplies: Operating and other stocks. Mobilization reserve stocks. 92.0 Other ordnance supplies: Operating and other stocks. Mobilization reserve stocks. Long supply Petroleum products: Operating and other stocks. Mobilization reserve stocks. Long supply.. 6.8 Signal supplies: Operating and other stocks.. Mobilization reserve stocks.. 53.3 61.8 1121MORNITY TIE MICHIGAN LIDIVANILJ million in disposal losses, authorized donations, and price adjustments, offset in part by $283 million in war reserve augmentation stocks received during the period. Costs exceeded obligations by $87 million in 1962, and are forecast to exceed obligations by $400 million in 1963 and $98 million in 1964, a total of $585 million for the 3 years. The major factor in this connection is the $957 million operating decrease in inventory explained above. Partially offsetting this are changes of $349 million in unpaid undelivered orders and $23 million in advances and unapplied customer credits. The change in unpaid undelivered orders involves an increase of $189 million for the single managers while they were financed through this fund in the first half of 1962, and $160 million for other activities financed through the fund. The latter increase results from the fact that unpaid undelivered orders were at an unusually low point at the start of 1962, and from the addition in 1963 of aircraft and missile items for which lead times are relatively long. Financing the budget program.-Funds for financing the budget program are derived from sales to authorized customers. Except for single managers, now financed under the Defense stock fund, sales are forecast to increase by $233 million from 1962 to 1964, attributable largely to the inclusion of aircraft parts and missile and rocket parts in the fund and to the extension of the fund to Okinawa and Korea for clothing and subsistence. Collections exceeded expenditures by $121.1 million in 1962 and are expected to exceed expenditures by $111 million in 1963 and $54 million in 1964. These net negative budget expenditures reflect the continued emphasis on purification of inventories and the selling of existing inventory without replacement in kind. Transfers of $240 million and $200 million were made to Military personnel, Army, in 1962 and 1963, respectively, and it is proposed to transfer $50 million to that appropriation in 1964. Incident to the transfer of functions to the Defense Supply Agency, a transfer of $45 million was made to the Defense stock fund when it was created in 1962. Operating results and financial condition.-The net loss was $359 million in 1962 and is forecast at $315 million and $19 million for 1963 and 1964, due to losses on disposal or donation of stocks in long supply. Government equity at the end of 1964 is estimated at $2,043.2 million, consisting of $9,646.4 million in inventory and other assets capitalized, less $3,220.9 million in net cash withdrawals or transfers from the fund and $4,382.2 million deficit. Revenue, Expense, and Retained Earnings (in thousands of dollars) 2,279,090 1,828,638 1,832,242 End of year... Transportation... 45,143 Total Government Repair of unserviceable inventory. 35,562 34,246 30,539 equity... Other operating expense. 4,718 Inventory decrease... 176,812 1 The changes in these items are reflected on the program and financing schedule. |