Legal Definitions - Defense Finance and Accounting Service

DFAS, which stands for the Defense Finance and Accounting Service, is a vital agency within the U.S. Department of Defense. Its core mission is to provide comprehensive financial management and accounting services for the entire Department. This includes ensuring that military personnel, civilian employees, and defense contractors are paid accurately and on time, as well as meticulously tracking and reporting on all financial transactions related to defense operations and programs.

Here are some examples of how the Defense Finance and Accounting Service operates in practice:

• Imagine a U.S. Navy sailor stationed overseas who receives their monthly salary. The processing, calculation, and direct deposit of that sailor's paycheck are handled by DFAS. This illustrates DFAS's critical role in managing the payroll for millions of military service members and civilian employees across the Department of Defense, ensuring they receive their entitlements reliably.

• Consider a scenario where a private company completes a contract to supply specialized cybersecurity software to the Air Force. Once the software is delivered and verified, the invoice for payment will be processed through DFAS. This demonstrates DFAS's function in managing financial disbursements for contracts, ensuring that defense contractors are paid correctly for goods and services provided to the Department of Defense, thereby supporting the acquisition process.

• When the Department of Defense needs to present its annual financial statements to Congress or undergo an external audit, the detailed financial records and reports are compiled and maintained by DFAS. This highlights DFAS's responsibility for comprehensive financial accounting and oversight, providing transparency and accountability for how taxpayer money is spent on national defense programs and operations.