Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

1001 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding revolving funds.

Key points covered in this chapter:

• Revolving funds are established by Congress to carry-out business operations funded by fees charged for goods or services provided;
• VA’s revolving funds are operated under two authorities, the Supply fund and Franchise fund;
• The Revolving Fund Board of Directors (RFBOD) will function as the principal governing body of the VA revolving funds;
• The RFBOD will approve the supply fund and franchise fund annual business plans; and
• Revolving Fund Board meetings will be held quarterly or upon the call of a co-chairperson.

1002 Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	Completed a full review.	OFP (047G)	Full review.	October 2023
100504	Added language to purpose of minutes.	OFP (047G)	General update to clarify.	October 2023

1003 Definitions

Enterprise Center (EC) – A self-supporting line of business responsible for customer liaison and coordination, business planning and development, staffing and execution of day-to-day business activities consistent with their annual business plans.

Franchise Fund – A type of intra-governmental revolving fund that operates as a self-supporting entrepreneurial entity to provide common administrative services benefiting Federal entities. Franchise funds are resourced entirely from the fees charged for the services they provide consistent with their statutory authority. Franchise funds do not receive an annual appropriation, but their annual budget must be approved by Congress.

Revolving Fund – A fund established by Congress to finance a cycle of business operations through fees charged for goods or services provided.

Supply Fund – A type of intra-governmental revolving fund that operates as a self-supporting entrepreneurial entity to provide a supply system for the Department (including procurement of supplies, equipment, and personal services and the repair and reclamation of used, spent, or excess personal property). Supply fund authority (38 U.S.C. § 8121) allows VA to sell goods and services to only VA and DOD organizations. The supply fund will operate under the authority of the Economy Act for all other buy/sell transactions.

1004 Roles and Responsibilities

Secretary of Veterans Affairs (SECVA) approves all additions and deletions of ECs to the fund.

Principal Deputy Assistant Secretary for Management and Deputy Executive Director, Office of Acquisition, Logistics and Construction are co-chairs of the RFBOD, and oversee all financial management activities relating to the fund’s programs and operations.

Under Secretaries, Assistant Secretaries, Other Key Officials and Chief Financial Officers (CFOs) are responsible for ensuring compliance with the policies set forth in this chapter.

Revolving Funds Board of Directors (RFBOD) approves activities to be included in the fund, reviews and approves budgets, identifies and approves actions to resolve problems in the fund’s operations, and reviews studies of costs and service quality.

Revolving Fund Executive Director is accountable to RFBOD for the oversight, compliance and reporting activities of the fund. The Fund Executive Director shall report to the Principal Deputy Assistant Secretary for Management and Deputy CFO.

Revolving Fund CFO reports to the Fund Executive Director and is accountable to the RFBOD for the overall financial operations of the fund.

1005 Policies

100501 General Policies

1. Revolving funds are established by Congress to carry-out business operations funded by fees charged for goods or services provided. VA’s revolving funds are operated under two authorities: Supply fund (38 U.S.C. § 8121) and Franchise fund (P.L. 103-356 and P.L. 104-204, as amended by P.L. 109-114).
2. Although revolving funds do not receive appropriated funds to operate, Congress must approve their annual budget.

100502 Revolving Fund Board of Directors

1. VA has established an RFBOD that consists of Administration and Staff Office participants. RFBOD oversees the operation of VA revolving funds and ensures resources are strategically utilized to serve VA’s revolving funds mission.
2. The RFBOD will function as the principal governing body providing leadership and oversight of VA revolving funds’ strategic priorities, goals, and objectives.
3. The RFBOD shall operate within the terms of the RFBOD Charter.
4. The RFBOD will consist of the following voting and non-voting members:
   1. Primary Voting Members
      • Principal Deputy Assistant Secretary for Management (004)* [Co-Chair]
      • Deputy Executive Director, Office of Acquisition and Logistics (003)* [Co-Chair]
      • Principal Deputy Assistant Secretary for Human Resources and Administration/Operations, Security, and Preparedness (006)*
      • Principal Deputy Assistant Secretary for Office of Information and Technology (005)*
      • Deputy Assistant Under Secretary for Health for Operations and Management, Veterans Health Administration (VHA) (15)
      • Chief Financial Officer, VHA (104)
      • Chief Financial Officer, Veterans Benefits Administration (24)
      • Chief Financial Officer, National Cemetery Administration (41B)
        *Denotes Enterprise Center Responsibilities
   2. Non-Voting Ex Officio Members
      • Deputy General Counsel, General Law (02GL)
      • Executive Director for Office of Acquisitions and Logistics (003A)
5. An alternate representative (alternate) will be appointed for each primary voting member. The alternate will attend meetings and vote in the absence of the primary voting member. Alternate votes are binding.
6. The RFBOD will:
   1. Approve the supply fund and franchise fund annual business plans submitted by each EC.
   2. Review the results of the supply fund’s and franchise fund’s financial statement audits and approve corrective action plans as needed.
   3. Review and approve:
      • Proposals by Administrations and staff offices for the revolving fund;
      • Changes in the scope of products and services subject to the jurisdiction of the franchise fund; and
      • Requests to withdraw products and services from the franchise fund and supply fund.
   4. Approve rates for services and supplies furnished to customers.
   5. Make recommendations to SECVA on the acceptance or rejection of additions/deletions of ECs in the franchise fund.
   6. Enhance the quality of customer service.
   7. Improve cost efficiency and productivity in the delivery of goods and services.
   8. Encourage strategic sourcing and cost-sharing to reduce the cost of providing goods/services to VA and other federal agencies.

100503 RFBOD Co-Chair

1. Co-Chairpersons of the RFBOD will schedule board meetings (regularly scheduled and ad-hoc sessions).
2. Co-Chairpersons of the RFBOD will provide guidance during agenda development and set expectations for how meetings should be conducted.
3. Co-Chairpersons of the RFBOD will ensure the proper subject matter experts are available to successfully conduct revolving fund board meetings.
4. Co-Chairpersons of the RFBOD will support the Office of Revolving Funds (ORF) facilitator in guiding discussions during meetings.
5. Co-Chairpersons of the RFBOD will call for votes on proposals presented to the revolving fund board.
6. Co-Chairpersons of the RFBOD will inform VA senior management of major events/plans affecting activities supported by VA revolving funds.

100504 Revolving Fund Board Meetings

1. The RFBOD shall hold meetings on a quarterly basis or upon call of the Co-Chairpersons when a quorum can be present. A quorum is defined as five revolving fund board members, three of whom represent the Administrations.
2. Meetings will be conducted on an informal basis under the leadership of the Co-Chairpersons.
3. An agenda will be prepared and distributed in advance of each meeting.
4. A record of all voting decisions will be maintained via meeting minutes, which must be approved at each meeting.

1006 Authority and References

• Public Law (P.L.)
  • P.L. 103-355, Federal Acquisition Streamlining Act of 1994
  • P.L. 103-356, Government Management Reform Act of 1994
  • P.L. 103-62, Government Performance and Results Act of 1993
  • P.L. 104-106, National Defense Authorization Act for Fiscal Year 1996
  • P.L. 104-204, Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997, 31 U.S.C. § 501 note
  • P.L. 109-114, Military Quality of Life and Veterans Affairs Appropriations Act, 2006
• United States Code (U.S.C.)
  • 31 U.S.C. § Chapter 9, Chief Financial Officers Act of 1990
  • 31 U.S.C. § 1501, Documentary Evidence Requirement for Government Obligations
  • 38 U.S.C. § 309, Department of Veterans Affairs Chief Financial Officer
  • 38 U.S.C. § 510, Authority to Reorganize Offices
  • 38 U.S.C. § 8121, Revolving Supply Fund
  • 40 U.S.C. § 524(b), Duties of Executive Agencies
  • 41 U.S.C. § 6303, Certain Contracts Limited to Appropriated Amounts
• GAO-08-978SP, Principles of Federal Appropriations Law, Third Edition, Volume III, Chapter 12
• OMB Circular No. A-11, Part 7, Planning, Budgeting, and Acquisition of Capital Assets

1007 Rescissions

VA Financial Policy Volume II, Chapter 10 – Revolving Fund Administration, September 2020.

1008 Policy Approval

This policy was approved by the VA Chief Financial Officers’ Council on October 6, 2023.