What is the role of DFAS in DoD funding and payment?

• A. Maintains procurement policies and negotiates contracts
• B. Processes payments, maintains ledgers, and provides financial reporting
• C. Develops payroll software
• D. Audits private vendors

Answer: (B)

DFAS handles the financial side for the DoD. Its role in funding and payment is to process payments for service members, civilians, and vendors; keep the DoD’s accounting ledgers up to date; and provide the financial reporting needed for budgeting, accountability, and oversight. In other words, DFAS disburses pay and vendor payments, maintains the general ledger, and produces financial statements and reports used for decision-making and audits. Things like setting procurement policies, negotiating contracts, developing payroll software, or auditing private vendors are handled by other parts of the DoD (procurement and contracting offices, IT/solutions teams, and DoD’s inspector general or contract oversight bodies, respectively). This makes the payments, ledgers, and reporting role the best fit for DFAS.