Declare section for host variables in COBOL embedded SQL applications

You must use an SQL declare section must be used to identify host variable declarations. The SQL declare section alerts the precompiler to any host variables that can be referenced in subsequent SQL statements.
For example:
           EXEC SQL BEGIN DECLARE SECTION END-EXEC.
       77 dept              pic s9(4) comp-5.
       01 userid            pic x(8).
       01 passwd.
           EXEC SQL END DECLARE SECTION END-EXEC.

The COBOL precompiler only recognizes a subset of valid COBOL declarations.