TFM Financial Management Service

Document Sample
TFM Financial Management Service Powered By Docstoc
					VOL I                                                                                                                          2-4700

                                                 Part 2—Chapter 4700

                    FOR THE FINANCIAL REPORT

                    This Treasury Financial Manual (TFM) chapter describes how agencies
                    provide data for the Financial Report of the United States Government
                    (FR) using the Governmentwide Financial Report System (GFRS) and
                    the Federal Agencies’ Centralized Trial-Balance System I (FACTS I). It
                    also includes the Financial Management Service’s (FMS’s) fiscal 2012
                    Closing Package methodology, the Federal Intragovernmental
                    Transactions process, and requirements for electronically submitting
                    preclosing adjusted trial-balances (ATBs).

                    This TFM chapter does not include reporting requirements for the
                    Governmentwide Treasury Account Symbol Adjusted Trial Balance
                    System (GTAS). Information pertaining to GTAS can be found on the
                    GTAS Web site at

Section 4701—Scope and                                 Resolve material weaknesses          System (GOALS) II. Agencies must
Applicability                                           identified by the Government         submit their ATBs at the Treasury
                                                        Accountability Office (GAO).         appropriation/fund group level using
    All agencies must provide FMS with                                                       proprietary U.S. Government Standard
required fiscal yearend data that is used to        The Chief Financial Officer (CFO) or     General Ledger (USSGL) accounts (see
prepare the FR. All verifying agencies (see    CFO’s designee of each verifying agency       USSGL, Part 1, Fiscal 2012 Reporting).
Figure 1) must submit their financial data     must prepare and submit the Closing           The ATB data from verifying agencies is
using the Closing Package via GFRS and         Package data for fiscal 2012 and fiscal       used for research and analysis purposes
FACTS I. All nonverifying agencies must        2011 via GFRS at the department level and     during the compilation of the FR.
submit FACTS I ATB data and must               must verify its consistency with the
                                               comparative,      audited    consolidated,         GFRS compiles the information from
complete GFRS FR Notes and Other FR                                                          the FACTS I submissions for nonverifying
Data.                                          department-level financial statements. The
                                               Inspector General (IG) of each verifying      agencies into a set of “generic” financial
    GFRS uses a Closing Package                agency must opine on the Closing Package      statements that are included in the
methodology that has been developed to:        data, entered by the CFO into GFRS, as to     consolidated FR. Nonverifying agencies
                                               its consistency with the comparative,         must prepare and submit note data based
         Capture each agencies’ Closing                                                     on the amounts from the “generic”
                                               audited consolidated, department-level
          Package information and link the                                                   financial statements compiled in GFRS.
                                               financial statements. Verifying agencies
          agencies’ comparative, audited
                                               with a yearend other than September 30 are         Reporting requirements in this chapter
          consolidated, department-level
                                               subject to alternate audit procedures as      are grouped as follows:
          financial statements to the FR;
                                               outlined in subsection 4705.45.
     AND                                                                                             Section 4705 includes Closing
                                                    All agencies (verifying and non-                  Package requirements;
                                               verifying) must submit preclosing ATBs
                                               via the FACTS I Internet application on the           Section     4706       includes
                                               Government On-Line Accounting Link                     intragovernmental requirements;

T/L 684                                                            1                                                       May 2012
2-4700                                                                                                                               VOL I

     AND                                        Allocation Transfer—This is the amount             also includes voluntary donations and
                                                of budget authority transferred from one           other inflows of resources.
         Section 4707 includes FACTS I         agency, bureau, or account that is set aside
          requirements.                                                                            X (Exchange)—This is an attribute of a
                                                in a transfer appropriation account to carry
                                                                                                   USSGL account balance that indicates
                                                out the purposes of the parent
                                                                                                   the balance being reported is exchange
Section 4702—Authority                          appropriation or fund.
                                                                                                   revenue. Exchange revenue arises when
                                                ATB Code—This is a code that consists of           a Federal entity provides goods and
     Section 405 of the Government              a department, a bureau, and a four-digit           services to the public or to another
Management Reform Act of 1994 [31               Treasury appropriation/fund group. This is         Federal entity for a price. Exchange
U.S.C. 331(e)(1)] requires that the             a unique identifier code for a record in the       revenue includes most user charges other
Secretary of the Treasury annually prepare      Master Appropriation File (MAF).                   than taxes. Another term for exchange
and submit to the President and the                                                                revenue is “earned revenue.”
Congress an audited financial statement for     Attribute—This is a modifier that further
the preceding fiscal year. This statement       describes a USSGL account to meet a              Budget Subfunction Code (BSF)—
must cover all accounts and associated          specific reporting requirement. Agencies         This code classifies budget resources by
activities of the executive branch of the       capture this information at the transaction      function and subfunction. It groups
Federal Government. Section 114(a) of the       level. The following are attributes included     budget authority and outlays of budget
Budget and Accounting Procedures Act of         in the USSGL Part 1, Fiscal 2012                 and off-budget Federal entities in terms
1950 [31 U.S.C. 3513(a)] requires each          Reporting:                                       of the national needs being addressed.
executive branch agency to furnish                                                               For a complete list of BSF codes, see the
                                                   A (Non-Custodial)—This is an                  Office of Management and Budget
financial and operational information as the
                                                   attribute of a USSGL account balance          (OMB)          Web          site       at
Secretary of the Treasury may stipulate.
                                                   that indicates the amount is not reported
     Even though these mandates are not            on the Statement of Custodial Activity        files/omb/budget/fy2012/assets/db_guide.
applicable to the legislative and judicial         or custodial footnote.                        pdf .
branches of the Federal Government,
                                                   F (Federal)—This is an attribute of a         The FACTS I MAF contains a three-digit
Treasury strongly encourages these entities
                                                   USSGL account balance that results            BSF. Each three-digit BSF contained in the
to submit ATBs, GFRS Notes, and Other
                                                   from transactions between Federal             MAF represents a subfunction grouped
FR Data, as defined in these reporting
                                                   Government entities included in the FR.       under 1 of 19 functions. OMB groups each
                                                   These often are referred to as                of the 19 functions under the 5
                                                   “intragovernmental transactions.” The         superfunctions presented in the Budget of
                                                   USSGL account reported on an ATB              the United States Government.
Section 4703—Definition of Terms                   with attribute “F” must have a two-digit
                                                   partner code (see the department codes        Closing Package—This methodology
Agency—Refers to the reporting entities            in Appendix 5) that identifies the            links agencies’ comparative, audited
for inclusion in the FR. “Agency” and              trading partner at the department level.      consolidated, department-level financial
“department” are used interchangeably,                                                           statements to the FR. The Closing Package
                                                   N (Non-Federal)—This is an attribute          is the data submitted by each verifying
unless otherwise noted (see Appendix 5).
                                                   of a USSGL account balance that results       agency for inclusion in the FR.
Adjusted Trial-Balance (ATB)—This is               from transactions not with a Federal
a list of USSGL accounts with attributes           Government entity included in the FR.         Deposit Fund Accounts—Agencies use
and preclosing adjusted balances prepared                                                        these accounts to hold the following:
                                                   S (Custodial)—This is an attribute of a
at a specified date (yearend). Agencies
                                                   USSGL account balance that indicates                  Money the Government has
submit ATBs by fund group and must
                                                   the activity is related to the Statement of            withheld from payment for goods
include USSGL accounts listed in numeric
                                                   Custodial Activity or custodial footnote.              or services provided;
order. The USSGL account balances
should reflect preclosing adjusting entries.      T (Nonexchange)—This is an attribute                   Deposits received from outside
The total sum of the debit balances must          of a USSGL account balance that                         sources in cases where the
equal the total sum of the credit balances in     indicates the balance being reported is                 Government acts solely as a
the ATB. Agencies must include the                nonexchange revenue. Nonexchange                        banker, fiscal agent, or custodian;
required attributes with the appropriate          revenue arises primarily from exercise of
USSGL accounts (see USSGL Part 1,                 the Government’s power to demand                   AND
Fiscal 2012 Reporting).                           payments from the public (for example,                 Money the Government has
                                                  taxes, duties, fines, and penalties) but                withheld awaiting distribution

May 2012                                                              2                                                            T/L 684
VOL I                                                                                                                               2-4700

          based on a legal determination or   transaction between trading partners in the       reasonably possible that the agency will
          an investigation.                   same department.                                  incur a loss, the agency must disclose the
                                                                                                nature of the contingency and an estimate of
Duplicate Partner Code Identifier             Intragovernmental         Transactions/           the possible liability, an estimate of the
(DPCI)—A single-letter code applied to a      Balances—These transactions and/or
                                                                                                range of the possible liability, or a
reporting trading partner agency sharing a    balances result from business activities
                                                                                                statement that such an estimate cannot
two-digit agency code with another agency     conducted by two different Federal
                                                                                                be made (see SFFAS Nos. 5 and 12).
(Pension Benefit Guaranty Corporation,        Government entities included in the FR.
Farm      Credit     System     Insurance     Interdepartmental and intradepartmental           Reciprocal Category (RC)—Is a set of
Corporation, and Smithsonian Institution).    are subsets of intragovernmental.                 Closing Package financial statement
                                                                                                Federal line items that is used to perform
Financial Statement Template—Each             Intragovernmental              Fiduciary
                                                                                                eliminations at the Governmentwide level
agency defines this template based on its     Confirmation System (IFCS)—An
                                                                                                (see subsection 4705.35, and Appendices 6
comparative,     audited     consolidated,    Internet-based application for confirming
                                                                                                and 7).
department-level financial statement line     and reconciling quarterly fiduciary
items; and USSGL crosswalks.                  balances (see subsection 4706.20).                Reclassified Financial Statement—This
                                              Nonfiduciary Transactions—Consist                 is a “generic” agency financial statement
Fiduciary Transactions—Intragovern-
                                              of intragovernmental buy/sell (exchange)          format used across the Government.
mental transactions that consist of Bureau
                                              transactions, transfers, and non-Treasury         Agencies “reclassify” or move amounts
of the Public Debt (BPD) investments and
                                              investment transactions (see subsection           from their        comparative, audited
borrowings; Federal Financing Bank (FFB)
                                              4706.25).                                         consolidated, department-level financial
borrowings; Department of Labor (DOL)
                                                                                                statement line items to the Closing Package
Federal Employees’ Compensation Act           Nonverifying Agencies—Agencies not
                                                                                                reclassified financial statement line items.
(FECA) transactions, and Office of            included in Figure 1.
                                                                                                For nonverifying agencies, these statements
Personnel Management (OPM) employee
                                              Probable Likelihood of Loss—This term             are system-generated using FACTS I ATB
benefit transactions.
                                              implies that the future event or events are       data.
Note: The word “fiduciary” is distinct and    more likely than not to occur, with the
                                                                                                Remote Likelihood of Loss—This term
should not be confused with Statements of     exception of pending or threatened litigation
                                                                                                implies that the chance of the future event
Federal Financial Accounting Standards        and unasserted claims. For pending or
                                                                                                or events occurring is slight. If only a
(SFFAS) No. 31, Accounting for Fiduciary      threatened litigation and unasserted claims,
                                                                                                remote chance of loss is possible, the
Activities, discussed in subsection           the future confirming event or events are
                                                                                                agency need not record a liability nor
4705.20d.                                     likely to occur. If a negative outcome is
                                                                                                provide a note disclosure (see SFFAS Nos.
                                              probable, the agency must record a liability
General Fund Receipt Account—This is                                                            5 and 12).
                                              on its books for the estimated amount of
a receipt account credited with all           loss. The estimated liability may be a            Selected Nonverifying Agency—A
collections that are not earmarked by law     specific amount or a range of amounts. If         selected nonverifying agency must submit
for another account for a specific purpose.   some amount within the range is a better          quarterly full-proprietary ATBs in text
These collections are presented in the        estimate than any other amount within the         format (see Appendix 5 for a list of these
President’s Budget of the United States       range, then the agency should recognize that      agencies).
Government as either governmental             amount as a liability and should disclose the
(budget) receipts or offsetting receipts.     range of possible loss as well as the nature of   Special Fund Receipt Accounts—— A
These include taxes, customs duties, and      the contingency in its financial statement        receipt account credited with collections
miscellaneous receipts. There are             notes. If no amount within the range is a         that are earmarked by law but included in
numerous general fund receipt accounts        better estimate than any other amount, then       the Federal funds group rather than
that are described in the Federal Account     the agency should recognize the minimum           classified as trust fund collections. These
Symbols and Titles (FAST) Book. See the       amount in the range as a liability and should     collections are presented in the President’s
FAST        Book       Web       site    at   disclose the range and a description of the       Budget as either governmental (budget)            nature of the contingency in its financial        receipts or offsetting receipts.
Interdepartmental Balance—This                statement notes. See Federal Accounting           Suspense Accounts—Agencies use these
USSGL account balance results from a          Standards Advisory Board (FASAB)                  accounts to temporarily hold collections and,
transaction between trading partners          SFFAS Nos. 5 and 12.                              in certain suspense accounts, disbursements.
included in the FR that are not in the same   Reasonably Possible Likelihood of                 They use these accounts pending clearance
department.                                   Loss—This term implies that the chance of         to the applicable receipt or expenditure
                                              the future event or events occurring is more      account in the budget. A fiscal year “F”
Intradepartmental Balance—This
USSGL account balance results from a          than remote but less than probable. If it is

T/L 684                                                             3                                                           May 2012
2-4700                                                                                                                     VOL I

preceding the last four digits of the fund   agencies and selected other agencies             List Closing Package line item
symbol identifies a suspense account.        material to the FR. Agencies are deemed           amounts identified as Federal
Trading Partner (TP)—An agency,              material to the FR if they report any             (items to be eliminated in the
department, or Federal entity that is        Closing Package Statement line items or           Governmentwide consolidation)
party to intragovernmental transactions      note disclosures that are greater than $1         by trading partner and amount
with another agency, department, or          billion.                                          (see Appendix 6).
Federal agency.                                  See Figure 1 for the list of verifying       Report FR Notes information
Trading Partner Code—The attribute           agencies.                                         that is based on the
used to identify the trading partner                                                           Reclassified Balance Sheet line
agency (see Appendix 5).                                                                       items. Also, report other FR
                                             Section 4704—FR Reporting and                     Notes information that is
Treasury Appropriation/Fund Group—
                                             Submission Dates                                  required to meet FASAB
This four-digit identifier corresponds to
                                                                                               standards (see Appendix 3).
the Treasury account symbol found in
the FAST Book. Agencies report most                See Figure 3 for the FR reporting          Report Other FR Data
ATBs at the Treasury appropriation/fund      and submission dates regarding GFRS,              information that is not based on
group (for exceptions, see subsection        FACTS I, IFCS, intragovernmental                  the Reclassified Balance Sheet
4707.20c). The Treasury appropriation/       activity/transactions, legal representation       line items. Examples of Other FR
fund group combines all fiscal years         letters, and subsequent events.                   Data        include      required
reported for each agency’s appropriation                                                       supplemental         information,
or fund account symbol.                                                                        stewardship information, and
                                             Section 4705—Closing Package                      social insurance. Also, report
Trea sury Appro pria tio n F und             Requirements                                      Other FR Data information that
Sy mbo l (TAFS)—This combination
                                                                                               is required to meet FASAB
of numbers denotes the responsible agency,       Verifying agencies must:                      standards (see Appendix 4).
period of availability, and fund
classification according to a prescribed             Reclassify all line items and           Provide explanations for any data
system of account classification and                  amounts on their comparative,            that has changed by the FMS
identification.                                       audited consolidated, department-        established threshold or more
                                                      level Balance Sheet, Statement of        between fiscal 2011 and fiscal
Use of Central Accounting Data                        Net Cost/Income Statement,
(UCAD)—UCAD is the authoritative                                                               2012 as required by GFRS.
                                                      Statement of Changes in Net              Explanations must clearly present
data collected in Treasury’s central                  Position, and Statement or Note
accounting system and presented in report                                                      the reason or justification for the
                                                      on Custodial Activity (if                change in data.
format to resolve intragovernmental                   applicable) to the Closing
differences.     This    data     includes            Package reclassified financial          Provide FMS with an electronic
appropriation warrants, nonexpenditure                statement formats (see Appendix          copy of the draft financial
transfers, fund balance with the Treasury,            2). Statement of Social Insurance        statements if the statements are not
and appropriations received, as adjusted.             information and the Statement of         available on OMB’s MAX
U.S. Government Standard General                      Changes in Social Insurance              Federal Community Web site.
Ledger (USSGL) Data—The USSGL,                        Amounts are reported in GFRS             Notify FMS of any additional
Supplement No. S2 to the TFM, provides a              Module GF006, FR Notes (see              updates to the financial statements
uniform Chart of Accounts and technical               Figure 2 and refer to subsection         as they are made available on
guidance to be used in standardizing                  4705.20c for details).                   OMB’s MAX Web site.
Federal agency accounting. The USSGL is               Note: The Statement of Social           Contact FMS to determine the
a part of the FACTS I ATB data that can               Insurance and the Statement of           reporting procedures for any
be viewed in GFRS to assist verifying                 Changes in Social Insurance              adjustments to the Closing
agencies in completing their Closing                  Amounts are part of the basic            Package data after November
Package submission and nonverifying                   financial statements to which the        15, 2012. See the contact list at
agencies in completing FR Notes. See                  IG of the verifying agency, if 
the      USSGL       Web        site    at            applicable, must opine as to its         singpackage/contacts.html.            consistency with the comparative,
Verifying Agencies—These agencies                     audited consolidated, department-
consist of the 24 major CFO Act                       level financial statements.

May 2012                                                         4                                                      T/L 684
VOL I                                                                                                                      2-4700

            Figure 1: Verifying Agencies Required To Verify and Submit a Closing Package and
          Provide CFO Representations for Federal Intragovernmental Transactions and Balances

   Department of Agriculture                 Department of Transportation               National Credit Union Administration
   Department of Commerce                     Department of the Treasury                   National Science Foundation
    Department of Defense                    Department of Veterans Affairs                      U.S. Postal Service
   Department of Education                       Agency for International                Office of Personnel Management
     Department of Energy                            Development                             Pension Benefit Guaranty
Department of Health and Human              Environmental Protection Agency                         Corporation
           Services                         Export-Import Bank of the United                 Railroad Retirement Board
Department of Homeland Security                          States                               Securities and Exchange
Department of Housing and Urban              Farm Credit System Insurance                           Commission
         Development                                  Corporation                         Small Business Administration
   Department of the Interior                  Federal Communications                          Smithsonian Institution
     Department of Justice                            Commission                           Social Security Administration
      Department of Labor                      Federal Deposit Insurance                    Tennessee Valley Authority
      Department of State                             Corporation                             U.S. Nuclear Regulatory
                                            General Services Administration                         Commission
                                            National Aeronautics and Space

4705.10—GFRS System Access                  and Statement or Note on Custodial           4705.15c—FR Notes
                                            Activity, if applicable.
    The GFRS Internet application on             Note: The Statement of Social                Both verifying and nonverifying
GOALS II (    Insurance and the Statement of Changes in    agencies must submit FR Notes data
requires a user ID and password.            Social Insurance Amounts are located in      through GFRS.
     Agencies can apply for a user ID and   GFRS Module GF006 (FR Notes). Refer               Nonverifying agencies submit FR
password by completing a GOALS II           to subsection 4705.20c for details.          Notes data based on the amounts from the
Enterprise System Access Request                                                         “generic” financial statements, compiled in
(ESAAS) form and faxing the completed       4705.15b—The Closing Package                 GFRS from ATB data submitted via
ESAAS form to 202-874-6710. For more                                                     FACTS I. The generic financial statements
information, contact the FMS Service Desk       Figure 2 depicts the Closing Package     are based on the USSGL crosswalks to the
by telephone at 202-874-4357 or by email    process. FMS uses the agencies’ Closing      reclassified statements and are populated
to Users      Packages to prepare the FR.                  by FACTS I ATB data. See Appendix 3
may access the ESAAS form at                                                             for the format of the FR Notes.                  CFOs of the verifying agencies and
                                            nonverifying agencies must submit all            Verifying and nonverifying agencies
                                            Closing Package data via the GFRS            submit Notes data based on the following:
4705.15—GFRS Reportable Data
                                            Internet application on GOALS II to FMS              Amounts on selected Closing
4705.15a—Preparation of Financial           for fiscal 2012 reporting. In addition,               Package line items.
                                            CFOs and/or designees, of the verifying
Statement Template
                                            agencies and nonverifying agencies must              The source of the data being
                                            respond in a timely manner to FMS’s                   reported for each note on the
     Verifying agencies must update via     request for concurrence with planned                  “Agency Notes” line. The agency
GFRS Module GF001 (Financial                changes to agency submitted Closing                   must reference the source of the
Statement Template) the USSGL               Package data. These requests are based on             data for traceability to the Notes
crosswalk logic to the comparative,         FMS’s review of agencies’ submitted data              source (that is, the particular
audited consolidated, department-level      for compliance with this chapter and                  location in the consolidated
financial statements. The financial         conformity with agencies’ general purpose             audited financial statements,
statements include the Balance Sheet,       financial statements.                                 specific worksheet, etc.). This
Statement of Changes in Net Position,                                                             should be detailed enough to
Statement of Net Cost/Income Statement,                                                           provide an adequate audit trail.
                                                                                                  See Appendices 3 and 4.

T/L 684                                                        5                                                       May 2012
2-4700                                                                                                                                           VOL I

                                                     Figure 2: Closing Package Process

   GFRS Module              GF002                       GF003                 GF004             GF006                 GF007                 GF008
                     Audited Financial         Reclassification           Federal         Notes to the         Other FR            Completions
                     Statements                                             Trading          FR Financial          Data                 and Approvals
     Module Title                                                           Partner          Statements

                     Enter agency’s               Reclassify agency’s       Identify         Enter                 Enter other          Agency CFO
                     comparative, audited         financial                 Federal          predefined            required data.       reviews and
                     consolidated,                statements to             Trading          notes to the                               certifies and IG
                     department-level                                                                              Examples:
                                                  Closing Package           Partner          Closing               Stewardship          issues an
                     financial statements.        format.                   Department       Package,                                   opinion on the
                     •Balance Sheet;                                                                               Deferred
                                                  •Balance Sheet;           codes.           including             Maintenance          reclassified
                     •Statement of Net Cost                                                  Statement of                               statements and
                     /Income Statement;           •Statement of Net                                                Tax Burden.
                                                                                             Social                                     notes, including
         Action                                                                              Insurance and                              the Federal
                                                                                             Statement of                               Trading Partner
                                                  •Statement of
                     •Statement of Changes                                                   Changes in                                 Note.
                                                  Changes in Net
                     in Net Position;                                                        Social
                     AND                                                                     Amounts (if
                     •Statement or                                                           applicable).
                     Note on Custodial
                     Activity (if
    Additional TFM
                                                  Appendix 2                Appendix 5       Appendix 3            Appendix 4

     AND                                             RC 11 and RC 12. Identifying the trading             Analysis System (IRAS) submissions as
                                                     partner enables analysis and elimination of          the quarterly computation is based on
          Amounts of items based on                 Federal activity/balances based on                   USSGL crosswalks.
           disclosure    standards    (for           reciprocal      categories      at      the
           example, earmarked funds,                 Governmentwide level. See Appendix 5                 4705.15e—Other FR Data
           commitments, and contingencies).          for a complete list of Federal trading
           See Appendix 3 for the FR Notes           partner department codes.                                 Verifying agencies and nonverifying
           requirements.                                                                                  agencies must disclose information relating
                                                          Agencies must reclassify all General            to “Other FR Data” as it applies to the
                                                     Fund activity (trading partner code                  agency. Other FR Data can include
4705.15d—Federal Trading
                                                     9900) to the appropriate Closing                     stewardship information, social insurance
Partner Note
                                                     Package financial statement line within              disclosures, and supplemental information,
     Verifying agencies must identify the            RC 29-non-reciprocating         activities           such as deferred maintenance. See Appendix
Federal trading partners and amounts                 (except for deposit fund investments).               4 for the format of Other FR Data.
for each Federal Closing Package line                Agencies must determine what the
item reported after reclassifying the                General Fund activity represents and                 4705.20—Reclassification of
agency’s       comparative,         audited          should reclassify the activity to the                Verifying Agencies’ Financial
consolidated, department-level financial             appropriate Closing Package line within              Statements
statements into the Closing Package                  RC 29 (See Appendices 1, 6, and 7 for
formats. Amounts identified as Federal               the appropriate reclassification of
should be net of intradepartmental                                                                             Verifying agencies must enter and
                                                     Closing Package financial statement                  reclassify their comparative, audited
eliminations with the exception of custodial         lines). Note: This Closing Package
revenues retained by the collecting                                                                       consolidated, department-level Balance
                                                     requirement does not impact agencies’                Sheet, Statement of Net Cost/Income
department and capital transfers reported in         quarterly Intragovernmental Reporting and            Statement, Statement of Changes in Net

May 2012                                                                    6                                                                 T/L 684
VOL I                                                                                                                             2-4700

Position, and Statement or Note on                 Government on whose behalf it was             the standards for other financing
Custodial Activity (if applicable) to the          collected. The collecting entity              sources, such exchange revenue is
formats in the three Closing Package               accounts for the disposition of               recognized as a transfer-out in
financial statements presented in Appendix         revenue as part of its custodial              calculating the entity’s operating
1 (Reclassified Financial Statements and           activity. These custodial transfers, by       results.
Line Item Descriptions). Appendix 1                definition, do not affect the collecting
                                                                                                   At the Governmentwide level, these
describes the Closing Package financial            entity’s net cost of operations or
                                                                                              collections are recognized as revenue.
statement line items. Appendix 2 includes          operating results, nor are they part of
examples of how to reclassify agency line          the reconciliation between its                  Verifying agencies that report a
items to the Closing Package format. For           obligations and net cost of                Statement or Note on Custodial Activity in
example, FMS requires that agencies                operations. (The receiving entity          their comparative, audited consolidated,
include two line items on the Statement of         recognizes      the     revenue       as   department-level financial statements
Net Cost or the Income Statement. To               nonexchange or exchange revenue            reclassify exchange revenue without
facilitate the reclassification of this            depending on its nature, according to      associated costs (virtually no cost) and
statement, “Total Gross Cost” and “Total           the applicable revenue standards.)         nonexchange revenue from the Statement or
Earned Revenue” line items are the sum of                                                     Note on Custodial Activity to the Closing
                                                      For exchange revenue with virtually
all program lines for “Gross Cost” and                                                        Package line items on the Statement of
                                                 no cost, see SFFAS No. 7, paragraph 140.
“Earned Revenue” reported on the                                                              Changes in Net Position. From the Sources
                                                 The custodial revenue is reported by the
Statement of Net Cost.                                                                        of Collections section of the Custodial
                                                 collecting agency on the Statement of
                                                 Custodial Activity or on the Custodial       Statement or Note, reclassify all
      GFRS uses a normal balance concept.
                                                 Activity Note.                               nonexchange revenue lines to “Other taxes
The normal balance is the regular balance
                                                                                              and receipts” and exchange lines to
of a line item and is either a debit or credit
                                                      However, for exchange revenue           “Miscellaneous earned revenue” (with the
as determined by the account type selected.
                                                 collected for others with related cost       exception of customs duties, and taxes
For example, an asset and a liability would
                                                 incurred, agencies should follow the         collected by the Department of the
carry a debit and a credit “normal” balance,
                                                 guidance from SFFAS No. 7, paragraph         Treasury, the Department of Labor, and the
respectively. All numbers must be entered
                                                 137, which states:                           Department of Homeland Security). From
as positive in GFRS unless the balance of
                                                                                              the Disposition of Collections section,
that line is abnormal, then the amount is          As a general rule, exchange revenue
                                                                                              reclassify all Federal lines to “Other
entered as a negative. The normal balance          transferred to others must be offset
                                                                                              Budgetary Financing Sources” and non-
attribute is used to determine the                 against the collecting entity’s gross
                                                                                              Federal lines to “Other taxes and receipts.”
appropriate stored value of manually               cost to determine its net cost of
entered amounts.                                   operations. Exchange revenue                     Agencies must report the custodial
                                                   reduces the net cost of operations         revenue as non-Federal, “N,” at the time of
     Verifying agencies report the line
                                                   incurred by the entity in producing        collection from the public (that is, the
items on their financial statements based on
                                                   outputs, regardless of whether the         Sources of Collection section). The
what is most material and useful to them.
                                                   entity keeps the exchange revenue          disposition of the custodial revenue to other
These line items may not match line items
                                                   for its own use or transfers it to         Federal agencies must be reported as
in the Closing Package for several reasons.
                                                   another operating entity or the            Federal “F” in the reclassified Statement of
For example, the Closing Package line
                                                   General Fund. Likewise, exchange           Net Cost or Statement of Changes in Net
items may not apply to the agency, the
                                                   revenue reduces the net cost of the        Position when reporting in GFRS. Any
amounts could be immaterial at the agency
                                                   entity’s operations to the taxpayer        Federal agency receiving custodial revenue
level, or the agency may find it useful to
                                                   regardless of its disposition.             from the collecting agency must report this
include more detail than the Closing
                                                   Therefore, all exchange revenue            revenue as Federal “F” in its reclassified
Package reports.
                                                   related to the cost of operations          Statement of Net Cost or Statement of
                                                   must be deducted from gross cost to        Changes in Net Position when reporting in
4705.20a—Custodial Activity                        determine the net cost of operations       GFRS. If the collecting agency retains a
                                                   for the entity.                            portion of the custodial revenue, the agency
   SFFAS No. 7, paragraph 353, states:
                                                                                              also must report this revenue as Federal “F”
                                                   Furthermore, SFFAS No. 7, paragraph
  Disposition of revenue to other                                                             in its reclassified Statement of Net Cost or
                                                 138, states:
  entities: custodial transfers.—                                                             Statement of Changes in Net Position when
  Revenue, primarily nonexchange                   Any exchange revenue that is               reporting in GFRS and must use its own
  revenue, may be collected by an                  transferred to others, however, does       trading partner code.
  entity acting on behalf of the General           not affect the collecting entity’s net
  Fund or another entity within the                position. Therefore, as required by

T/L 684                                                               7                                                       May 2012
2-4700                                                                                                                                VOL I

     If agencies have collections that do       to the Statement of Social Insurance, the      and the Federal Supplementary Medical
not meet Statement or Note on Custodial         Statement of Changes in Social Insurance       Insurance Trust Funds). SSA, HHS, RRB,
Activity reporting requirements, they           Amounts, and the underlying significant        and DOL are required to report the draft
should refer to the General Fund Receipt        assumptions also is included in GFRS           data of Social Insurance in the GFRS
Account Guide on the USSGL Web site at          Module GF006, FR Notes. All remaining          Closing Package (see Figure 3 for due        social insurance information is contained in   dates).
scenarios/index.html#proprietary.               GFRS Module GF007, Other FR Data.
                                                                                               4705.20d—Fiduciary Activities
4705.20b—Earmarked Funds                             Note: The information related to these
                                                                                                    In a fiduciary activity, the Government
                                                statements appears in GFRS Module
                                                                                               collects or receives and subsequently
     Earmarked funds are financed by            GF006, FR Notes, because GFRS was not
                                                                                               manages, protects, accounts for, invests,
specifically identified revenues, often         designed with a separate financial
                                                                                               and/or disposes of cash or other assets in
supplemented by other financing sources,        statement module for the Statement of
                                                                                               which non-Federal individuals or entities
which remain available over time. These         Social Insurance and the Statement of
                                                                                               have an ownership interest that the
specifically identified revenues and other      Changes in Social Insurance Amounts. As
                                                                                               Government must uphold. Non-Federal
financing sources are required by statute to    such, verifying agencies cannot enter
                                                                                               individuals and entities must have an
be used for designated activities, benefits,    information related to the Statement of
                                                                                               ownership interest in the cash or other
or purposes and must be accounted for           Social Insurance and the Statement of
                                                                                               assets held by the Government under
separately from the Government’s general        Changes in Social Insurance Amounts into
                                                                                               provision of loan, regulation, or other
revenues in accordance with SFFAS               a separate financial statement module.
                                                                                               fiduciary arrangement. The ownership
No. 27.                                         Since the Statement of Social Insurance
                                                                                               interest must be enforceable against the
                                                and the Statement of Changes in Social
      At the Governmentwide level, the U.S.                                                    Government, and judicial remedies must
                                                Insurance Amounts are two of the basic
Government Balance Sheet shows                                                                 be available for the breach of the
                                                financial statements to which the IG of
separately the portion of the net position                                                     Government’s fiduciary obligation.
                                                the verifying agency, if applicable, must
attributable to earmarked funds. The                                                           Agencies should account for this fiduciary
                                                opine as to its consistency with the
standard further requires the disclosure of                                                    activity, which includes the collection of
                                                comparative,     audited    consolidated,
condensed information on assets, liabilities,                                                  cash or other assets and their distribution to
                                                department-level financial statements,
and net cost for all earmarked funds.                                                          the non-Federal owners and/or their
                                                verifying agencies must enter the
                                                                                               beneficiaries, in accordance with SFFAS
     Verifying     agencies      reclassify     information related to the Statement of
                                                                                               No. 31. In accordance with the standard,
earmarked fund activity from the agency’s       Social Insurance and the Statement of
                                                                                               there is relatively similar Government
Balance Sheet to the Closing Package line       Changes in Social Insurance Amounts into
                                                                                               activity that is specifically excluded from
items designated for earmarked funds on         GFRS Module GF006, FR Notes.
                                                                                               the SFFAS No. 31 reporting requirements
the Balance Sheet. Additional note                   The Social Insurance Program              such as: payroll withholdings and
disclosure information on earmarked funds       reporting agencies are required to report      garnishments; unearned revenue; and
also is required in the Closing Package,        the Statements of Social Insurance, the        seized property.
Appendix 3, Note 22, to be completed by         Statement of Changes in Social Insurance
both verifying and nonverifying entities                                                             The standard requires that the
                                                Amounts, and the related notes in the FR
with earmarked fund activity. Agencies                                                         Government’s fiduciary activities and a
                                                Notes, and in Other FR Data in the Closing
should report each earmarked fund with a                                                       description thereof be included as a note
                                                Package. The Social Insurance Program
net position exceeding $5 billion absolute                                                     disclosure. In addition, the Government
                                                reporting agencies are the Social Security
separately.                                                                                    must disclose that the fiduciary assets are
                                                Administration (SSA), the Department of
                                                                                               not assets of the Government and are,
                                                Health and Human Services (HHS), the
4705.20c—Social Insurance                                                                      therefore, not recognized on the U.S.
                                                Railroad Retirement Board (RRB), and the
                                                                                               Government Balance Sheet. However, at
                                                Department of Labor (DOL).
                                                                                               the Governmentwide level, the U.S.
     The Statement of Social Insurance and           Most of the social insurance              Government Balance Sheet recognizes a
the Statement of Changes in Social              information pertaining to Social Security      liability for fiduciary cash held in fund
Insurance Amounts are required by SFFAS         and Medicare can be obtained from SSA          balance with Treasury and a liability for
Nos. 17, 25, 26, 28, and 37 to be presented     (the 2012 Annual Report of the Board of        fiduciary investments in U.S. Treasury
as a basic financial statement. Agencies        Trustees of the Federal Old-Age and            securities that are included in the agencies’
provide the Statement of Social Insurance       Survivors Insurance and Disability             fiduciary assets. Since these fiduciary
and the Statement of Changes in Social          Insurance Trust Funds) and from HHS (the       assets are not recognized on the agencies’
Insurance Amounts data in GFRS Module           2012 Annual Report of the Boards of the        Balance Sheets, no verifying entities are
GF006, FR Notes. The information related        Trustees of the Federal Hospital Insurance     required to enter this fiduciary liability line

May 2012                                                             8                                                             T/L 684
VOL I                                                                                                                              2-4700

item in the Reclassified Balance Sheet, in                investments in GAS that the           Some examples of activities that have “99”
the GFRS Module GF003.                                    Federal      Government         is    as a trading partner are:
                                                          authorized to keep to the Closing
    However, both verifying and
                                                          Package Federal line titled,                   Offsets to collections collected or
nonverifying entities with fiduciary activity                                                             accrued in the General Fund
                                                          “Federal securities interest
must enter the agency fiduciary activity                                                                  receipt accounts— USSGL
                                                          revenue,” and identify the
note disclosure information in the GFRS                                                                   accounts applicable to this
                                                          amount in the Federal Trading
Module GF006, FR Notes (see Appendix                                                                      activity include but are not
                                                          Partner Note (Module GF004)
3, Note 27).                                                                                              limited to USSGL accounts
                                                          using trading partner code
                                                          “2000.”                                         2980F, 2985F, 5990F, 5991F,
      Note: The reporting requirements
                                                                                                          5993F, and 5994F.
related to fiduciary activities, as required         Nonverifying agencies are directed to
by SFFAS No. 31, are distinct and               subsection 4707.20b for reporting GAS                    Employer Federal Insurance
unrelated to the reporting and other            investments with deposit fund monies.                     Contributions Act (FICA)
requirements related to the “fiduciary”                                                                   contributions collected by the
category of intragovernmental transactions                                                                Internal Revenue Service.
as stated in subsections 4705.70b, 4706.15,     4705.20f—Department Code
4706.20, 4706.20a, 4706.20b, 4706.25,           Reporting for General Fund                               Rescissions that are permanently
and 4706.30c.                                   Activities                                                canceled by law. (For trust and
                                                                                                          special fund transactions, treat
                                                     Agencies use trading partner code                    similar to capital transfer
4705.20e—Reporting of                                                                                     transactions, RC 11 and RC 12.
Government Account Series                       “99” strictly for recording transactions with
                                                the General Fund of the United States. Do                 (Refer to the discussion on
(GAS) Investments With the                                                                                capital transfer in subsection
Bureau of the Public Debt                       not confuse the General Fund of the
                                                United States (trading partner code 99)                   4705.65.)
Purchased by Agencies Using
Deposit Fund Monies                             with the Department of the Treasury                      Other activities associated with
                                                (department/trading partner code “20”), the               the General Fund —USSGL
                                                agency. They are not synonymous and                       accounts applicable to this
     Verifying agencies that invest deposit     agencies must distinguish one from the
fund monies in GAS investments must                                                                       activity include but are not
                                                other when designating an appropriate                     limited to tax related accounts
adhere to the following three bullets for the   partner code. Agencies that are collecting
portion of the investments that are not                                                                   and USSGL accounts, 1921F,
                                                receipts into General Fund Receipt                        5997F, etc.
accounted for in the agencies’ fiduciary        Accounts (GFRAs) should be aware that
note:                                           although GFRAs belong to the General                 Agencies that record activities with
                                                Fund, the General Fund does not have all        the General Fund also must properly
         Reclassify the deposit fund
                                                the details of all the accounting events in     record this Federal activity at the
          investments in GAS to the
                                                the GFRAs. Therefore, collecting agencies       Governmentwide level to assist with the
          Closing Package Federal line
                                                must record the accounting events in the        preparation of the FR. General Fund
          titled, “Federal Investments,” and
                                                GFRAs and must use their two-digit              activities (trading partner code 9900) are
          identify the amount in the
          Federal Trading Partner Note          department codes in the GFRAs for               only reclassified to Federal FR lines with a
          (Module GF004) using trading          collection and accrual activities (for          RC 29 designation. RC 29 contains all line
          partner code “9900.”                  example, receivables, revenues, other           items for which reciprocal line items do not
                                                financing sources, transfer in, etc.) The       exist and the USSGL accounts in RC 29 do
         Reclassify the liability with the     accounts that have the“99” partner              not eliminate against another USSGL
          public     related      to    GAS     code in the GFRAs are listed below.             account. Refer to Appendix 1 for a
          investments by deposit funds to       Agencies should refer to the USSGL              description of each reclassified FR line and
          the Closing Package Federal line      implementation guidance, in the                 Appendices 6 and 7 for a listing of
          titled, “Other liabilities (without   General Fund Receipt Account Guide,             reclassified FR line reciprocal category
          reciprocals),” and identify the       on the USSGL Web site for examples              designations and the financial statement to
          amount in the Federal Trading         of how to record partner codes in               which they relate.
          Partner Note (Module GF004)           GFRAs. See the Web site at
                                                                                                     Agencies engaged in activity with the
          using trading partner code  
                                                                                                Department of the Treasury as a trading
          “9900.”                               d_scenarios/mr_transactions_17-b.pdf.
                                                                                                partner regarding all other intra-
                                                In addition, agencies should refer to
         Reclassify the revenue from                                                           governmental activities, such as Judgment
                                                subsection 4707.20c in this TFM chapter.
          earnings on deposit fund                                                              Fund      transactions,       investments,

T/L 684                                                              9                                                          May 2012
2-4700                                                                                                                                VOL I

borrowings, transfers, and buy/sell activity,            Smithsonian Institution;               use the Federal trading partner department
should use department code “20.”                                                                 code of the child’s parent agency when
Agencies should contact the Director,                    Tennessee Valley Authority;            reporting their balances and transactions
Financial Reports Division, via email at                 U.S. Postal Service;                   with the child in GFRS., if they are
                                                     AND                                              The three exceptions to the
unsure about the applicability of
                                                                                                 requirement for parent/child reporting
department code “99” to particular
                                                         Farm Credit System Insurance           (from OMB Circular No. A-136, revised)
                                                          Corporation.                           are:

4705.25—Special Basis of                        (2) Verifying agencies with a yearend                     Federal trust funds managed by
Accounting                                          other than September 30:                               the BPD (commonly known as
                                                                                                           Treasury Managed Trust Funds)
                                                         Farm Credit System Insurance
     Verifying agencies under SFFAS                                                                        for which the recipients are
No. 34, The Hierarchy of Generally                                                                         allocation accounts.
                                                         Federal Deposit          Insurance
Accepted Accounting Principles, that                                                                      The parent is the Executive
use accounting standards other than                       Corporation;
                                                                                                           Office of the President.
FASAB standards (for example,                        AND
Financial Accounting Standards Board), as                                                                 Funds transferred from the
the basis for their audited financial                    National     Credit         Union                Judiciary to the Department of
statement data, or that do not have a                     Administration.                                  Justice’s U.S. Marshals Service
fiscal yearend of September 30, are                                                                        for court security.
                                                     For the verifying agencies with a                                                           Formatted: Indent: First line: 0.25"
collectively referred to as converting                                                                In these cases, the receiving agency
                                                yearend other than September 30, a
agencies in GFRS. Converting agencies                                                            (child) is responsible for reporting all
                                                crosswalk with a 12-month set of fiscal
must perform an additional step in                                                               proprietary activity in its financial
                                                year financial statements should be
GFRS before reclassifying their                                                                  statements and GFRS. The child must
                                                provided to FMS, as support to the Closing
financial statement line items to the                                                            use its two-digit trading partner code for
                                                Package submission. In addition, these
Closing Package line items. They must                                                            all activities and balances with the
                                                agencies must provide an updated 12-
convert their latest set of audited                                                              parent agency. This results in
                                                month set of the fiscal year financial
financial statements to a 12-month set of                                                        intragovernmental activity between the
                                                statements crosswalk after the audit is
financial statements using the FASAB                                                             child and the parent being eliminated and
                                                completed to show changes, if any, that
standards and a September 30 ending                                                              not reported in the child agency’s financial
                                                may impact financial reporting at the
date. Converting agencies reclassify the                                                         statements and GFRS. Agencies that have
                                                Governmentwide level. Agencies must
converted data to the Closing Package                                                            activity with the child listed in the three
                                                highlight any variances in the subsequent
line items instead of the data from their                                                        exceptions must use the Federal trading
                                                crosswalk and must provide reasons for the
latest audited financial statements. They                                                        partner code of the child in reporting their
must subject all of the above-mentioned                                                          balances and transactions with the child in
adjustments to their Closing Packages to                                                         GFRS.
the audit coverage described in                 4705.30—Parent/Child Reporting
subsection 4705.45.
                                                     The parent agency (transferor of the        4705.35—Reciprocal Categories
     Verifying agencies that may need to
                                                appropriation) must report all activity of
perform this additional step, as described
                                                the child in its financial statements,                 A reciprocal category is comprised of
above, are:
                                                whether material to the child agency             a set of Federal Closing Package line items
(1) Verifying agencies with comparative,        (recipient of the transfer) or not, unless one   that are the reciprocal of each other (for
    audited financial statements not based      of the three exceptions (detailed below)         example, accounts payable/accounts
    on FASAB standards:                         applies. The parent agency must use its          receivable). These categories assist in the
                                                two-digit trading partner code for all           elimination of Federal activity at the
         Federal Deposit         Insurance     activities and balances with the child           Governmentwide level to prepare the FR.
          Corporation;                          agency. This results in intragovernmental        Additionally, these reciprocal categories
         National     Credit         Union     activity between the parent and the child        facilitate the reconciliation of activities
          Administration;                       being eliminated and not reported in the         between Federal agencies. All reciprocal
                                                parent agency’s financial statements and         categories currently contain a set of Federal
         Pension Benefit         Guaranty      GFRS. Other agencies that have activity          line items except for RC 29, which
          Corporation;                          with the child (see exceptions below) must       contains all line items for which no

May 2012                                                             10                                                             T/L 684
VOL I                                                                                                                           2-4700

reciprocal line items currently exist. Note:   Trading Partner Note, are included within        Format (PDF) to GAO, FMS, and OMB
General Fund activities must be                the scope of the opinion on the special-         (see Figure 3 for due dates).
reclassified to an FR line (refer to           purpose financial statements (Closing
Appendix         1      for      appropriate   Package). Verifying agencies should              4705.50—Closing Package
reclassification) with a reciprocal category   review thoroughly information provided as        Schedule of Uncorrected
29 designation for identifying General         Other FR Data in the Closing Package,            Misstatements Process
Fund activity at the Governmentwide level.     which is not subject to audit coverage, to
The reciprocal categories crosswalk to the     assure consistency with the applicable data.
Closing Package reclassified financial                                                               Verifying agencies must submit a
                                                    Each applicable verifying agency must       Closing Package SUM as a part of their
statement line items on the Balance Sheet,
                                               provide the following documents to the           Management Representation Letter on the
Statement of Changes in Net Position, and
                                               IG/IPA to perform the audit on the Closing       Closing Package (as stated in subsection
Statement of Net Cost. See Appendix 6 for
                                               Package. All of the following documents          4705.45) to FMS. Verifying agencies with
a complete list of reciprocal categories and
                                               are a part of the IG/IPA audit scope except      a yearend other than September 30 do not
the financial statements to which they
                                               the GF007 Other FR Data Report, which            have to provide a SUM. The SUM is for
                                               must be thoroughly reviewed:                     agencies’ current-year Balance Sheet,
                                                                                                Statement of Net Cost/Income Statement,
4705.40—CFO Closing Package                             Reclassified financial statements      Statement of Changes in Net Position,
Data Verification                                        – GF003F Closing Package               Statement of Social Insurance, and
                                                         Financial Statement Report             Statement of Changes in Social Insurance
     Verifying agency CFOs must certify                  (including FR Note 23 for the          Amounts (if applicable). The schedule
the accuracy of the data in the Closing                  Statement of Social Insurance          should contain the following:
Package for the IG to opine no later than                and FR Note 30 for the
the specified due date (see Figure 3 for due             Statement of Changes in Social                 The effect of the current year’s
dates).                                                  Insurance       Amounts,       if               uncorrected misstatements and
                                                         applicable);                                    the carry-forward effect of the
4705.45—Audit Requirements for                                                                           prior    year’s     uncorrected
the Closing Package                                     GF004F    Trading    Partner                    misstatements.
                                                         Summary Note Report;
                                                                                                        USSGL account number and
     An audit opinion is required for the               GF003G Closing Package Line                     account description.
special purpose/Closing Package financial                Reclassification  Summary
statements, for fiscal 2012 and 2011, based              Report;                                        Federal (F) or non-Federal (N)
on agency-entered data in GFRS through                                                                   account indicator for each
the Closing Package. This includes the                  GF006 FR Notes Report;                          USSGL account affected.
Federal Trading Partner Note. The IG
                                                        GF007 Other FR Data Report;                    A reference to an adjustment
provides the audit opinion and its text of
the audit opinion, regardless of whether the        AND                                                  number or documentation
IG or an independent public accountant                                                                   reference.
(IPA) conducted the audit. For guidance,                Management representation letter
                                                         on the Closing Package, which                  An indication as to whether or
refer to OMB Bulletin No. 07-04, as
                                                         includes the Summary of                         not management has agreed to
amended and as it relates to special-
                                                         Uncorrected         Misstatements               record the adjustment in its
purpose financial statements (Closing
                                                         (SUM),       and      uncorrected               financial statements.
Package). Verifying agencies with a
                                                         misstatements identified in the
yearend other than September 30 are                                                                     A statement as to whether the
subject to all requirements of this TFM                  agency’s     audited       financial
                                                                                                         uncorrected misstatement is
chapter. However, they are limited to audit              statement SUM, which is attached
                                                                                                         either known or likely.
assurance on material line items and note                to the agency’s financial statement
disclosures to which the verifying agencies              management representation letter               A description of the adjustment.
contribute. For additional guidance, refer               (see subsection 4705.50 for
                                                         instructions for entities with a               The amount of the debit or
to the audit of the special-purpose (Closing                                                             credit.
Package) financial statements section of                 yearend other than September 30).
OMB Bulletin No. 07-04, as amended.                 Each IG must package a copy of the                  The line items affected in the
                                               aforementioned documents in addition to                   entity’s financial statements.
    The intragovernmental activity and
balances contained in the Closing              the Closing Package auditors’ report and
Package’s GFRS Module GF004, Federal           must email them in Portable Document

T/L 684                                                            11                                                        May 2012
2-4700                                                                                                                           VOL I

     AND                                         of the legal representation letter as         are no changes, and/or any changes to the
                                                 disclosed in the agency’s financial           management representation letters and the
         Uncorrected          misstatements     statements. They must categorize cases,       financial statements due to subsequent
          identified in the audited financial    including cases to be paid from the           events. Subsequent event information is
          statement SUM and any                  Judgment Fund, in the table as either         based on the agency’s materiality
          additional uncorrected mis-            having a probable, reasonably possible, or    threshold. Do not include legal
          statements identified in the           a remote chance of a negative outcome for     contingencies or items submitted in GFRS,
          Closing Package. Explanations          the agency consistent with American Bar       Note 1.
          must be provided for any               Association guidance (see Figure 3 for due
          difference between the two             dates). Agencies must recognize a             4705.65—Yearend Intra-
          SUMs        to     facilitate  the     contingent liability on their financial       governmental Reconciliation
          consolidation of the FR.               statements or must disclose it in the         Process Related to Closing
                                                 financial statement notes if it meets the     Package Reporting
     In addition, the adjusting entries to       contingent liability criteria as defined in
correct the misstatements also should be         SFFAS No. 5. For guidance, refer to OMB
provided. If there are no such uncorrected       Bulletin No. 07-04, as amended, as it              Verifying and nonverifying agencies
misstatements, a representation to this          relates to legal representation letters.      should reconcile their intragovernmental
effect should be included in the                                                               balances with all available information
management representation letter. Refer to                                                     before submitting their Closing Package
the Financial Audit Manual (FAM),                4705.55b—Other Required Infor-                data and FACTS I ATBs, respectively.
Section 595, for a sample schedule of            mation for Legal Representation
                                                 Letters                                            UCAD is the authoritative data
uncorrected misstatements and adjusting
                                                                                               collected in Treasury’s central
entries.                                               Verifying agency IGs also must          accounting system. Agencies should
     For additional guidance, see OMB            provide GAO, DOJ, and FMS information         validate and reconcile their data monthly
Bulletin No. 07-04, as amended, and              about subsequent events that occurred after   with UCAD to resolve intra-
OMB Circular No. A-136, revised, on              the effective date of their final legal       governmental differences in certain
the      OMB       Web       site     at         representation letter through November 30,    reciprocal categories, prior to their data; and               2012, that resulted in a change of            submissions in GFRS.
GAO/President’s Council on Integrity and         likelihood or an amount of loss. All
                                                 agencies should send this information via          The following monthly UCAD
Efficiency FAM, Section 595C, on the
                                                 email to GAO, DOJ, and FMS at                 reports for RC 07, Appropriation of
GAO Web site at
                                        (see          Unavailable Trust or Special Fund
                                                 Figure 3 for due dates).                      Receipts; RC 08, Nonexpenditure
4705.55—Legal Representation                                                                   Transfers of Unexpended Appropri-
Letter Process                                        Subsequent event information is based    ations and Financing Sources; RC 11,
                                                 on the agency’s materiality threshold. For    Nonexpenditure Transfers of Financing
                                                 additional guidance, see OMB Bulletin No.     Sources – Capital Transfers; RC 29,
4705.55a—Legal Letter Reporting                  07-04, as amended, and OMB Circular No.
Requirements                                                                                   Appropriations Received as Adjusted;
                                                 A-136, revised, on the OMB Web site at        and RC 29, Fund Balance With
                                                       Treasury, data are available on the
     Verifying agency IGs must submit an
                                                                                               FMS         Web           site       at
interim and final legal representation letter
                                                 4705.60—Other Required              
prepared by the agency General Counsel
                                                 Information for Subsequent                    reports.html on the eighth workday of
summarizing and evaluating legal actions
                                                 Changes to Published Financial                every month:
against the agency. Agency IGs must
submit the interim and final legal                                                                     Summary Monthly UCAD
representation letters and management                                                                   Report for RC 07, 08, & 11;
schedules to FMS, DOJ, and GAO. Legal                 Verifying agency CFOs also must
representation letter files sent by email must   provide FMS information regarding any                 Detail Monthly UCAD Report
be PDF files (zipped files are not accepted).    subsequent changes, or no changes, to                  for RC 07, 08, & 11;
Management Schedules must be in Excel            their management representation letters
                                                                                                       Monthly UCAD Report –
format only (PDF files are not accepted).        and published financial statements (see
                                                                                                        Appropriations Received, as
The agency’s legal representation letter         Figure 3 for due dates). Send this
                                                                                                        Adjusted-RC 29;
must contain a schedule prepared by              information via email to FMS, OMB, and
management that summarizes the content           GAO. The email should indicate if there           AND

May 2012                                                            12                                                         T/L 684
VOL I                                                                                                                          2-4700

         Monthly UCAD Report – Fund                  Confirmation of Intragovern-              FMS       provides       the     CFO
          Balance With Treasury-RC 29.                 mental Activity (Part IIB) –         Representations form for Federal Intra-
                                                       Non-Reporting Agencies. This         governmental Transactions and Balances
     The UCAD data reports for the period                                                   (see Appendix 8). FMS posts this form on
                                                       data is informational and
ending September 30 will be available to                                                    the      FMS        Web         site      at
                                                       requires an explanation if it is
the agencies on October 11, 2012. The                                              The
                                                       equal or greater than $250
yearend report with backdated adjustments                                                   representations relating to whether the
made between October 1 and 16 will be                                                       reconciliation was completed for each item
available to the agencies on October 18,          Any significant differences that are      of Section I (General Intragovernmental
2012.                                        reconciled should form the basis for           Reporting Results), Section II (Explanation
                                             adjusting journal entries affecting            of Closing Package Differences), and
     Verifying agencies generate their
                                             intragovernmental activity and balances at     Section III (Additional Explanations) must
intragovernmental reports via the
                                             the FR level. Agencies should submit their     be completed in their entirety.
Discoverer application in GFRS or by
                                             adjustments and supporting documentation
using     the     direct    URL      link
                                             for Part I and Part II (refer to subsections    4706.30e and 4706.30f for further detail       4705.70a—Detailed CFO
viewer for the following reports that                                                       Representation Instructions
                                             regarding the explanation of differences) to
show agencies their reciprocal balances,
                                             their FMS contact person via email and
as reported in the Closing Package, for                                                         Verifying agencies must provide
                                             to the following email address:
each of their trading partner agencies’:                                                    responses to the following intra-
         Intragovernmental       Closing         Verifying agencies generate the
                                                                                            governmental items.
          Package Activity Detail Report;    Intragovernmental Comparative Closing
                                                                                            4705.70b—Section I: General
         Intragovernmental      Closing     Package Explanations of Differences
                                             Report via the Discoverer application in       Intragovernmental Reporting
          Package Activity      Summary
                                             GFRS or by using the direct URL link           Results
         Intragovernmental   Closing        viewer.                                                 Is consistency maintained between
          Package Reciprocal Category                                                                 the agency intragovernmental
          Detail Report;                                                                              reporting entered in GFRS
                                             4705.70—Yearend CFO
                                                                                                      Module GF004 Trading Partner
         Intragovernmental   Closing        Procedures for Intragovernmental
                                             Transactions/Balances                                    Note (by line item and trading
          Package Reciprocal Category
                                                                                                      partner) and the agency source
          Summary Report;
                                                                                                      documents? If “no,” provide an
                                                 Verifying agencies must comply with
         Material Differences Report                                                                 explanation. (Refer to the
                                             the following instructions using the
          (Part I of III). This report                                                                Intragovernmental         Closing
                                             comparative,    audited      consolidated,
          displays differences equal to or                                                            Package Line Item Reports and
                                             department-level financial statements:
          greater than $250 million;                                                                  the Trading Partner Identification
                                                      Provide responses to the                       Reports from GFRS Module
         Material Differences Report                                                                 GF004).       Agency       source
                                                       representations outlined in the
          Part IIA- UCAD vs IRAS –
                                                       detailed “CFO Representation”                  documents include manual and
          Reciprocal Categories 7, 8, 11,                                                             electronic records, original
                                                       instructions for each intra-
          FBWT and Appropriations                                                                     documents, and accounting
                                                       governmental issue;
          Received;                                                                                   records generated by the agency’s
                                                  AND                                                 official accounting system.
         Confirmation      of    Intra-
          governmental Activity (Part                 Ensure the data in the                        Identify policies and procedures
          IIB) – Undefined Partners                    Intragovernmental         Closing              that pertain to the agency’s
          “00” and “99” General Fund.                  Package Material Differences/                  ability to record, process,
          This report displays amounts                 Status        of      Disposition              summarize,        and     report
          reported equal to or greater                 Certification Report is consistent             intragovernmental activity and
          than $10 million by reciprocal               with the information reported in               balances by trading partner.
          category.                                    the Federal program agency’s                   Describe      the     accounting
                                                       financial statements.                          treatment and policies and
                                                                                                      procedures used for buy/sell,

T/L 684                                                          13                                                        May 2012
2-4700                                                                                                                          VOL I

         fiduciary, and transfer intra-     4705.70c—Section II: Explanation                Section 4706—Intragovernmental
         governmental transactions.         of Closing Package Differences                  Requirements
        Review and explain the agency’s
         activity reported with trading          Explain the differences indicated on
         partner “9999.” Indicate the       the Intragovernmental Closing Package           4706.10—Intragovernmental
         dollar amount or percentage of     Material Differences/Status of Disposition      Transactions/Balances
         this activity that relates to      Certification Report, Part I, in terms of the   Reconciliation Requirements
         business conducted with highly     following categories:                           Authority
         classified agencies, the U.S.           (1) Confirmed Reporting;
         Senate, or the House of                                                                 The intragovernmental transactions
         Representatives. Also, explain          (2) Accounting Methodology/                reconciliation requirements also are
         any activity that is unknown                Policy Difference;                     stated in the following:
         because the agency is unable to         (3) Accounting/Reporting Error;
         identify its trading partners                                                               OMB Circular No. A-136 (see
         and/or amounts.                         (4) Timing Difference – CY;                          the OMB Web site at
        Explain activity reported with          (5) Unknown;                                         omb);
         trading partner “9900.”
                                                 AND                                             AND
        Review and explain material             (6) Timing Difference – PY.                         Intragovernmental     Business
         differences involving both
                                                                                                      Rules (see Appendix 10).
         agencies reporting “Confirmed.”         Also, explain the special items and
         The reporting agency and its       differences on the Intragovernmental
         trading partner should not both    Closing Package Material Differences/           4706.15—Federal Intra-
         have confirmed reporting where     Status of Disposition Certification Report,     governmental Transactions
         a difference exists. Refer to      Part II, on the Additional Explanations         Accounting Scenarios
         subsection 4706.30e for further    form (Part III), which is provided on the
         details.                           FMS Web site. (Refer to subsection                   The Intragovernmental Trans-
                                            4706.30d for further detail regarding           actions Accounting Policy Guide (APG)
        Did the agency use the             special items and differences that are          has been discontinued. Agencies are
         UCAD reports available on          included in Part IIA and Part IIB.)             directed to refer to the USSGL Web site
         the FMS Web site at
                                                                                            for scenarios for selected Federal
                                            4705.70d—Section III: Additional                intragovernmental         activities at
         gpackage/reports.html         to
         validate the agency’s trading
         partner data entered in GFRS
         Module GF004 for the Closing             For each explanation, from Parts I and
         Package line items in RC 07, RC    II, the supporting documentation must be        4706.20—Intragovernmental
         08, and RC 11; as well as Fund     included, in detail, on the “Additional         Fiduciary Confirmation System
         Balance With Treasury-RC 29;       Explanations” form provided by FMS.             (IFCS)
         and Appropriations Received as     (Refer to subsections 4706.30e and
         Adjusted-RC 29? If “no,”           4706.30f for further detail regarding the            The IFCS, an Internet-based
         provide an explanation why the     explanation of differences).                    application is the official confirmation
         UCAD online reports were not            Provide an electronic file of the          system for all Federal departments and
         used.                              CFO’s Representations for Federal               agencies that engage in fiduciary
                                            Intragovernmental Transactions and              intragovernmental transactions.
        Did the independent auditors
         propose any adjustments related    Balances along with the completed Intra-             Agencies are required to use the IFCS
         to intragovernmental balances      governmental Closing Package Material           to confirm and reconcile fiduciary
         reported in the Closing Package?   Differences/Status      of  Disposition         transactions with their trading partners.
         If “yes,” list the auditor’s       Certification Report and “Additional            Agencies should investigate and record
         intragovernmental adjustments      Explanations” form to FMS and GAO (see          adjustments for any discrepancies between
         waived by management.              Figure 3 for due dates).                        their intragovernmental account balances
                                                                                            and the reciprocal account balances of their
                                                                                            trading partner(s). Discrepancies due to

May 2012                                                        14                                                            T/L 684
VOL I                                                                                                                            2-4700

errors should be corrected prior to the        4706.20a—IFCS Reporting                                Services       provided         and
preparation of financial statements and the    Reconciliation Requirements                             reimbursables—Such as legal,
Closing Package submission to FMS (see                                                                 consulting, investigative, financial
Figure 3 for due dates).                            Agencies must ensure that fiduciary                management, grants management,
                                               intragovernmental balances are confirmed                technology, reimbursables, and
     Specifically, OMB Circular No. A-
                                               using the IFCS. Intragovernmental                       other similar services.
136 requires reporting agencies to
                                               balances confirmed through IFCS should
reconcile/confirm intragovernmental                                                                   Cost of products sold—Such as
activity and balances quarterly for the        agree to the quarterly data, Closing
                                                                                                       supplies, manufactured items,
following reciprocal groupings:                Package reporting, and the agency’s
                                                                                                       inventory, office space, and
                                               financial statements.
                                                                                                       equipment/vehicle rentals.
         Investments—Including shares/
                                                    To review DOL’s benefits
          par, original issue discount and                                                            Transfers, appropriations used,
          premium interest payables and        activity, agencies should access
                                                                                                       and collections for others, and
          receivables, interest income and     DOL’s Internet Web site at
                                                                                                       unusual assets and liabilities
          expense, and amortization of
                                                                                                       related to appropriations—
          premiums and discounts with the      html.
                                                                                                       Including transfers between
          BPD.                                                                                         agencies based on agreements or
                                               4706.20b—IFCS System Access                             legislative authority, expended
         Borrowings—Including loans
                                                                                                       appropriations, taxes and fees
          receivable (including capitalized
                                                    To access and confirm fiduciary                    collected, collections for others,
          interest receivable), interest
                                               balances in the IFCS, agency users should               receivables from appropriations,
          payables and receivables, and
                                               access the Internet Web site at                         transfers payable, and custodial
          interest income and expense
                                      Agencies                 revenue.
          from BPD or the FFB.
                                               can apply for a user ID and password by
         Federal Employees’ Compen-           completing a GOALS II ESAAS form and           4706.25a—Related to Capitalized
          sation Act (FECA) transactions       faxing it to 202-874-6170. All agencies        Purchases
          with DOL—Including routine           must designate agency user backups for all
          payments and accruals for FECA       roles. After the ESAAS form is processed,
                                                                                                   Agencies that purchase capitalized
          liabilities. Note: Amounts           the IFCS administrator makes the agency
                                                                                              assets from other Federal entities must
          relating to unemployment             assignment. Then, the agency department
                                                                                              record the purchase to the following
          compensation are not included        administrator assigns the designee to his or
                                                                                              USSGL memorandum accounts:
          by DOL and FECA. Therefore,          her specific agency fund symbols for the
          agencies need to exclude any         borrowings and investments categories and              8801F, “Offset for Purchases of
          amounts associated with              agency code for OPM and DOL                             Assets”;
          unemployment compensation            categories. For more information, contact
          before posting expenses and          the FMS Service Desk by telephone at                   8802F, “Purchases of Property,
          liabilities in IFCS (USSGL           202-874-4357 or by email to                             Plant, and Equipment”;
          accounts 2213, 2215, 2225,                           8803F, “Purchases of Inventory
          2290, 6400, and 6850).                                                                       and Related Property”;
                                                   To review DOL’s benefits activity,
         Employee Benefit Program             agencies should access DOL’s Internet              AND
          transactions    with     OPM—        Web site at
          Including routine payments and       publications.html.                                     8804F, “Purchases of Assets –
          postretirement benefits related to                                                           Other.”
          the      Federal     Employees       4706.25—Nonfiduciary                               Agencies also must record the
          Retirement System (FERS), the        Transactions                                   purchase to the appropriate USSGL asset
          Civil Service Retirement System
                                                                                              account in the Closing Package.
          (CSRS), the Federal Employees’
                                                    For nonfiduciary transactions, OMB
          Group Life Insurance Program                                                             The above memorandum accounts are
                                               requires reporting agencies to reconcile/
          (FEGLI), and the Federal                                                            not crosswalked to the Closing Package;
                                               confirm intragovernmental activity and
          Employees’ Health Benefits                                                          these amounts are reclassified as fixed
                                               balances quarterly for the following
          Program (FEHB).                                                                     assets on the reclassified Balance Sheet.
                                               reciprocal groupings:
                                                                                              The memorandum accounts are only
                                                                                              supplemental USSGL accounts that are
                                                                                              used for reconciling purposes.

T/L 684                                                            15                                                        May 2012
2-4700                                                                                                                            VOL I

4706.30—Quarterly                                       Federal/Non-Federal Attribute—        activity with the account “AA BB 1234”
Intragovernmental Transactions                           F/N indicator.                        use the “BB” trading partner code, in
Reconciliation Process                                                                         which “BB” represents the parent’s two-
                                                        Federal trading partner (Federal)     digit trading partner code.
                                                         (two digits)—Treasury depart-
      The quarterly reconciliation process               ment code of the Federal trading           For the three exceptions listed in
facilitates    the     elimination      of               partner.                              subsection 4705.30, the child agency
intragovernmental differences for yearend                                                      must report and code activity and
financial reporting.                                    Sign indicator—The “-” (minus)        balances between the parent and the
                                                         symbol indicates a credit             child with the child’s two-digit trading
     Agencies should use two-digit
                                                         balance. Leave the field blank for    partner code on its file submission to
trading partner codes for all intra-
                                                         debit balances, without regard to     properly eliminate parent/child activity
governmental        transactions.     When
                                                         the normal-balance concept.           and balances. Agencies having activity
agencies report “appropriations transfers”
within their departments, they should use               Dollar amount—Leading zeroes          with the child, for the three exceptions,
their two-digit trading partner code rather              are required. The last two            must use the child’s two-digit trading
than “00.” Trading partner code “00” is                  positions represent amounts after     partner code in the file to report their
limited to the House of Representatives,                 the decimal point.                    balances and transactions with the child.
Senate, classified transactions, or any truly                                                  For example, agencies having activity
unidentifiable activity/balances.                       Exchange/nonexchange attribute        with the account “AA BB 1234” use the
                                                         —X/T indicator.                       “AA” trading partner code, in which
                                                                                               “AA” represents the child’s two-digit
4706.30a—Agency Quarterly                               Custodial/noncustodial attribute      trading partner code.
Submission                                               —S/A indicator.
                                                        Duplicate Partner Code Identifier     4706.30c—FMS Intragovernmental
     In support of the quarterly                         (DPCI)—The attribute for              Activity Reports
reconciliation process, both verifying and               certain reporting entities that use
selected nonverifying agencies must submit               duplicate two-digit department
full-proprietary ATBs in text format.                                                               Within approximately 4 business days
                                                         codes.                                of agencies’ submissions of the quarterly
    Agencies should derive these                     All agencies should send their            data files, FMS consolidates agency
submissions      directly    from      their    completed trial balances including the         quarterly financial data. Reporting agencies
departmental trial balances that are used as    number of record counts via email to           use the Discoverer application through
the basis for constructing quarterly            their FMS contact person and to                GFRS or use the direct URL link
unaudited financial statements for OMB. See 
     The text file format must contain the      Appendix 9 for the data file format.           viewer to generate the intragovernmental
following elements:                                                                            reports (see the Discoverer User Manual at
                                                    Any errors must be corrected within 1
         Department code (two digit)—          business day.                                  regulations.html). The reports show
          Treasury department code                                                             agencies their reciprocal balances, as
          associated with the ATB fund          4706.30b—Agency Submission –                   reported in the quarterly files, for each of
          group and consistent with the         Parent/Child Reporting                         their trading partner agencies (Part I);
          MAF ATB code (Appendix 5).                                                           UCAD vs. IRAS differences (Part IIA);
                                                                                               and undefined partner and General Fund
         Bureau code (two digit)—                   The parent agency (transferor of the
                                                                                               activity (Part IIB):
          Bureau code associated with the       appropriation) must report and code
          ATB fund group and consistent         activity and balances between the parent               Intragovernmental Activity
          with the MAF ATB code. Use            and the child using the parent’s two-digit              Detail Report by Trading
          “00” if the agency does not have      trading partner code on its file submission             Partner.
          any subdivisions.                     to properly eliminate parent/child activity
                                                and balances, unless one of the three                  Intragovernmental Activity
         Fund group (four digit)—MAF           exceptions applies (see subsection 4705.30              Summary Report by Trading
          fund group.                           for exceptions). Agencies having activity               Partner.
         USSGL account (four digit)—           with the child must use the parent’s two-              Intragovernmental Reciprocal
          USSGL account number.                 digit trading partner code in the file to               Category Summary Report.
                                                report their balances and transactions with
                                                the child. For example, agencies having

May 2012                                                           16                                                           T/L 684
VOL I                                                                                                                              2-4700

         Intragovernmental Reciprocal              data they reported into Treasury’s                    governmental reconciliation in
          Category Detail Report.                   central accounting system.                            accordance with OMB Circular
                                                                                                          No. A-136, revised;
         Fiduciary Quarterly Data vs.
          IFCS Agency Benefits Report.         4706.30d—Agency Quarterly                                 Ensuring agencies are mutually
                                               Status of Disposition Certification                        completing the Intragovern-
         Fiduciary Quarterly Data vs.                                                                    mental Material Differences/
          IFCS Comparison Report.                   Each verifying agency and selected                    Status of Disposition Certi-
         Material Differences Report          nonverifying agencies generate an                          fication Report for the same
          (Part I of III). This report         Intragovernmental Material Differences/                    trading      partner/reciprocal
          displays differences equal to or     Status of Disposition Certification                        category material difference
          greater than $250 million.           Report from the Discoverer application                     instances;
                                               in GFRS (or use the direct URL link
         Material Differences Part IIA –             AND
          UCAD vs IRAS – Reciprocal            viewer),     containing      comparative                  Minimizing the number and
          Categories 7, 8, 11, FBWT and        reporting between the agency and its                       amount of differences subject to
          Appropriations Received.             trading partners by reciprocal category                    certification through a sampling
                                               in Part I, and other significant material                  process.
         Confirmation        of      Intra-
                                               balances and confirmation of the
          governmental Activity (Part IIB)                                                            Both verifying agencies and selected
                                               reporting in Part II. FMS provides Part
          – Undefined partners “00” and                                                         nonverifying agencies should provide an
                                               III, which is a blank “Additional
          “99” General Fund. This report                                                        explanation of the reporting on Parts I and
                                               Explanations” form that agencies use to
          displays amounts reported equal                                                       II of the Intragovernmental Material
                                               explain in detail their reporting on all
          to or greater than $10 million by                                                     Differences/Status of Disposition Certi-
                                               records showing material differences.
          reciprocal category.                                                                  fication Report by identifying their
                                               FMS posts this form on the Web site at
   AND                                          reporting justification by explanation
                                               e/reports.html.                                  number (refer to subsection 4706.30e) and
         Confirmation        of     Intra-                                                     should submit it to the agency’s respective
          governmental Activity (Part IIB) –         The Intragovernmental Material             FMS contact person via fax to 202-874-
          Non-Reporting Agencies (non-         Differences/Status        of      Disposition    9907 or via email (PDF format). This
          reporting agencies that do not       Certification Report, Part I, allows agencies    report is due for each quarter except the
          submit transaction data files for    to identify differences with trading partners,   fourth quarter.
          IRAS processing). This data is       excluding “99” and “00,” by reciprocal
          informational and requires an        categories (excluding RC 07, 08, 11, 25, and          Note: Verifying agencies that have
          explanation if it is equal to or     29) that are greater than or equal to a          recurring differences with a trading partner
          greater than $250 million.           materiality level that is determined by          continue to receive an Intra-governmental
                                               Treasury. Part II identifies reported amounts    Material Differences/ Status of Disposition
        Agencies should use these               by reciprocal category with trading partners    Certification Report that must be explained
   reports to work with their trading          “00” and “99,” and material differences          and certified.
   partners to reconcile intragovern-          between the trial-balance amounts and the
   mental differences.                         UCAD amounts for RC 07, RC 08, and RC            4706.30e—Detailed Quarterly
         The IRAS versus UCAD reports          11; Appropriations Received as Adjusted-         Status of Disposition Certification
   show agencies their balances reported       RC 29; and Fund Balance With Treasury-           Instructions
   in their quarterly submissions              RC 29. Agencies must identify the material
   compared to the data reported in            balances in Parts I and II in Part III, the           Verifying agencies and selected
   Treasury’s central accounting system.       “Additional Explanations” form. The              nonverifying agencies are required to
   Agencies should use these reports as a      assurance level is systematically established    provide an explanation of the Intragovern-
   tool to explain their differences in RC     using four functions for fiscal 2012:            mental Material Differences/Status of
   07, RC 08, and RC 11;                                Obtaining        a      sufficient     Disposition Certification Report, Parts I
   Appropriations Received as Adjusted-                  explanation to resolve the out-of-     and II. An explanation of their Part I
   RC 29; and Fund Balance With                          balance and condition coverage         should be reporting based on each
   Treasury-RC         29       on      the              for GAO assurance;                     identified difference in terms of the
   Intragovernmental              Material                                                      following categories:
   Differences/Status of Disposition                    Obtaining assurance that agencies
   Certification Report, Part II, with the               are performing quarterly intra-             (1) Confirmed Reporting;

T/L 684                                                             17                                                         May 2012
2-4700                                                                                                                         VOL I

     (2) Accounting Methodology/Policy              Explanations” form, provided               When differences have been identified
         Difference;                                on the Web           site at          and adjustments are needed, agencies must
                                                    make adjustments in the subsequent
     (3) Accounting/Reporting Error;
                                                    singpackage/reports.html, to          periods and must provide corrective
     (4) Timing Difference – CY;                    support the confirmation of           actions to FMS.
                                                    reporting. When the confirmed
     (5) Unknown;                                                                             Agencies must provide detailed
                                                    reporting column is selected,
                                                                                          explanations on the “Additional
     AND                                            there should be no other
                                                                                          Explanations” form (Part III), available
                                                    column marked.
     (6) Timing Difference – PY.                                                          on      the       Web         site       at
                                                   Accounting methodology/policy
     The agencies must include documented           difference occurs when the            ge/reports.html, so that FMS can better
support for Parts I and II in detail for each       reporting agency uses a different     understand the reasons for the differences.
explanation     on      the     “Additional         method to account for activity
Explanations” form (Part III) provided by                                                      Each verifying agency and selected
                                                    than the trading partner. The
FMS via the FACTS I Web site at                                                           nonverifying agencies generate a
                                                    method of accounting must be                                                                 Comparative Status of Disposition Report,
                                                    identified and explained.
closingpackage/reports.html.                                                              (via the Discoverer application). This
                                                   Accounting/reporting        error     report compares amounts and explanations
                                                    occurs when the reporting             of material differences reported between
4706.30f—Reporting Agency’s                                                               each reporting agency and its trading
                                                    agency has incorrectly reported
Explanation of Reporting in Part I                                                        partner. FMS makes this report available to
                                                    activity either by reciprocal
                                                    category, trading partner, or         agencies quarterly.
         Confirmed       reporting       is        amount. The total of these
          intended to indicate that an                                                         CFOs use this report to address and
                                                    amounts must be identified and
          agency has verified its reported                                                resolve inconsistencies in amounts and
                                                    explained. If the agency is in
          amounts and that the agency’s                                                   explanations between the agency and its
                                                    error, then provide the
          documents are in agreement                                                      trading partners, no later than the
                                                    adjustment amount as well as the
          with its quarterly source                                                       subsequent reporting period. Specifically,
                                                    corrective action (journal entry,
          documentation; and the agency                                                   in instances where an agency’s and its
                                                    etc.) to be taken and when this
          has confirmed that the policy                                                   trading partner’s explanations for
                                                    error will be corrected.
          and guidance related to                                                         differences are both “confirmed reporting,”
          transactions and balances have           Current-year timing difference        the agency is required to contact its trading
          been followed. It also should             occurs when the reporting             partner to obtain resolution of the disputed
          indicate that the agency has              agency has reported activity in a     differences. All material differences must
          reconciled this amount with its           subsequent quarter other than the     be resolved by the next reporting period.
          trading partner and knows why             trading partner. The total of these
          the difference, if any exists, so         amounts must be identified.
          that the appropriate agency can           Explain whether an adjustment         Section 4707—FACTS I
          adjust its amount to clear any            should be made.                       Requirements
          difference. Both agencies
                                                   Prior-year timing difference
          should not have confirmed                                                       4707.10—Collection of ATB Data
                                                    occurs when the reporting
          reporting where a difference
                                                    agency has reported activity in a
          exists. Agencies must work                                                           FMS continues to collect ATB data to
                                                    prior fiscal year other than the
          together to determine which                                                     aid in its analytical process. ATB data
                                                    trading partner. The total of these
          agency (or perhaps both) needs                                                  should link directly to the agency’s
                                                    amounts must be identified.
          to change its explanation from                                                  comparative,     audited      consolidated,
                                                    Explain whether an adjustment
          confirmed reporting to the                                                      department-level financial statements.
                                                    should be made.
          more appropriate explanation                                                    Agencies may view ATB data in GFRS.
          categorization       (accounting         Unknown reporting occurs when         ATB data are tools to facilitate the Closing
          methodology/policy,      timing,          the reporting agency cannot           Package and are not subject to coverage in
          accounting error, etc.) to                validate the amount it submitted.     the audit requirements of the Closing
          clarify the cause of the                  The total of Unknown Reporting        Package.
          difference. Agencies should               amounts must be identified and
          provide a detailed explanation            explained.
          on        the       “Additional

May 2012                                                      18                                                             T/L 684
VOL I                                                                                                                            2-4700

4707.15—FACTS I System Access                      Verifying and nonverifying agencies                “X” or “T” to identify a USSGL
                                              must maintain the MAF on the FACTS I                     account balance as exchange (X)
     The FACTS I Internet application on      database and must submit changes to the                  or nonexchange (T) revenue.
GOALS II requires a user ID and               MAF data through the FACTS I Internet
                                              application. Agencies must review and                More than one attribute may be valid
password. The address for the FACTS I                                                        for a USSGL account. See USSGL Part 1,
Internet application on GOALS II is           update individual components of the MAF
                                              electronically. After agencies review,         Fiscal 2012 Reporting, for a list of the                                                               USSGL accounts with their valid
                                              update, and submit the MAF, FMS reviews
    Agencies can apply for a user ID          and approves the MAF.                          attributes.
and password by completing a GOALS                                                                Nonverifying agencies that use deposit
II ESAAS form and faxing it to 202-                                                          fund monies to invest in GAS investments,
                                              4707.20b—Adjusted Trial Balance
874-6170. For more information, contact                                                      and, if the BPD records these GAS
the FMS Service Desk by telephone at                                                         securities as public, must identify these
202-874-4357 or by email to                        Agencies must prepare and submit
                                              preclosing ATBs at the Treasury                investments with trading partner “99”                                                                instead of “20.”
                                              appropriation/fund group level using
                                              USSGL accounts and attributes. Agencies
4707.20—FACTS I Reportable Data               that have not adopted the USSGL must           4707.20c—Special Accounts
                                              crosswalk their general ledger accounts to
     GFRS compiles the data from the          the USSGL accounts before transmission.            Verifying and nonverifying agencies
FACTS I submissions for nonverifying                                                         may submit a single ATB for all fund
agencies into a set of “generic” financial         The ATBs must include USSGL
                                              accounts in numerical order with the           groups in each of the following categories:
statements that are included in the
consolidated FR. Nonverifying agencies        required attributes, and USSGL account                  Clearing/suspense (F) accounts
must prepare and submit FR Notes using        balances must reflect the preclosing                     (use default 3800 for the fund
the amounts from the “generic” financial      adjusting entries needed to produce                      group).
statements compiled in GFRS. Agencies         financial statements. The total sum of debit
must submit all changes to the “generic”      balances must equal the total sum of credit             Deposit fund accounts (use
statements through FACTS I.                   balances in the ATBs. Report amounts in                  default 6000 for the fund group).
                                              dollars and cents.
                                                                                                      Unavailable receipt accounts—
4707.20a—Master Appropriation                      A variety of edits enable FACTS I to                General fund (use default 5555
File (MAF)                                    verify that the submitted USSGL accounts                 for the fund group).
                                              with associated attributes are valid and
                                                                                                      Unavailable receipt accounts—
     FMS uses the MAF as a control tool       have equal debit and credit balances.
                                                                                                       Special and trust fund (use
during the ATB submission process. The        Treasury rejects ATBs that do not meet
                                                                                                       default 5000 for the fund group).
MAF consists of records (one record for       these criteria.
each Treasury appropriation/fund group),                                                          Treasury appropriation/fund symbol
                                                   Verifying and nonverifying agencies
uniquely identified by an eight-digit code.                                                  ranges for receipt accounts include the
                                              must use the same USSGL data on the
The eight-digit code combines a two-digit                                                    following:
                                              ATBs that they use to prepare the fiscal
department code, a two-digit bureau code,     2012 audited agency consolidated financial              Unavailable general fund
and a four-digit fund group code. In          statements due to OMB. Agencies also                     receipt accounts range from
FACTS I, it is referred to as the ATB code.   must use the following required attributes:              0100 through 3799.
Each MAF record also contains the
following:                                             “F” or “N” to identify a USSGL                Clearing/suspense accounts range
                                                        account balance as Federal (F) or              from 3800 through 3899.
         A BSF ID that represents the                  non-Federal (N). Report the two-
          budget subfunction of the ATB.                digit department code (see                    Special fund receipt accounts
                                                        Appendix 5) of the trading                     range from 5000 through 5999.
         A fund type ID. The fund type
          for MAF is not necessarily the                partner when using attribute “F.”             Trust fund receipt accounts range
          fund type used in the FAST                   “S” or “A” to identify a USSGL                 from 8000 through 8999.
          Book.                                         account balance as custodial (S)          Agencies must determine whether the
         Other codes and identifiers FMS               or noncustodial (A).                 collections made under the receipt account
          uses for internal purposes.                                                        symbols are “available” receipts or
                                                                                             “unavailable” receipts. “Available” receipts,

T/L 684                                                           19                                                         May 2012
2-4700                                                                                                                           VOL I

for which the appropriation fund symbols       agency an ATB for the Treasury                       Agencies may submit ATBs for
only can be in the 5000s and the 8000s,        managed trust fund activity located at          multiple fund groups in a single bulk file
constitute budget authority. Agencies should   BPD for each of the Treasury managed            transfer.
report ATBs for available receipt accounts     trust funds listed in Figure 4.
individually under their Treasury                                                              4707.20g—Proprietary Balances in
                                                    BPD uses USSGL accounts from the
appropriation fund symbol.                                                                     Canceled Accounts
                                               USSGL Part 1, Fiscal 2012 Reporting, with
     “Unavailable” receipts do not             the proper attributes. The lead program             There are two valid types of
constitute budget authority. “Unavailable”     agencies identified in Figure 4 must include    proprietary account balances in a canceled
receipts with account fund symbols from        the Treasury managed trust fund data in their   TAFS. They are fixed assets and canceled
5000 to 5999 (5000s) or 8000 to 8999           ATBs. Direct any questions regarding the        payables.
(8000s) represent receipts of the collecting   ATB data received from BPD to Matthew
agency. Agencies that deposit receipts into    Hansell at 304-480-5120.                             Agencies must maintain and report
these fund symbols must submit ATBs and                                                        “canceled payable” balances in their
should ensure the receipts revenue appear                                                      original TAFS.
                                               4707.20e—Parent/Child Reporting
on their financial statements. However,                                                            Agencies with fixed asset balances in
these receipts do not constitute budget                                                        a canceled TAFS may report those
                                                   Report in FACTS I similar to the
authority until subsequent legislation                                                         balances in either of three ways:
                                               reporting for the quarterly file submissions.
appropriates the receipts.
                                               Refer to subsection 4706.30b.
                                                                                                       Report in the Treasury
   Reporting Instructions for
                                                                                                        appropriation/fund group from
General Fund Receipt Accounts                  4707.20f—ATB Reports
                                                                                                        which the funds were originally
                                               Transmission Methods
     Agencies that classify amounts on                                                                  appropriated;
their Statement of Transactions (that is,
                                                    Each ATB preparer can submit the                   Transfer asset balances without
FMS 224, FMS 1220, or SF 1221) in
                                               ATB data using the online entry method                   reimbursement to an open TAFS
general fund receipt account symbols using
                                               or bulk file transfer method on the                      and report in that open Treasury
their two-digit agency department code
                                               GOALS II FACTS I Internet                                appropriation/fund group;
also must submit an ATB and must prepare
                                               application. The bulk file transfer
agency financial statements that include the                                                       OR
                                               requires that agencies build American
general fund receipt activity.
                                               Standard Code for Information                           Use a default fund group to
                                               Interchange (ASCII) files using the                      report the balances of fixed
4707.20d—Treasury Managed                      prescribed record layout for FACTS I                     assets that cannot be identified
Trust Fund Accounts                            posted on the FACTS I Web site at                        to an original Treasury
                                                      appropriation/fund       group.
    BPD’s Trust Fund Management
Branch provides the lead program

May 2012                                                           20                                                          T/L 684
VOL I                                                                                                                                  2-4700

                                  Figure 3: FR Reporting and Submission Dates

July 9, 2012           IFCS window opens for the third quarter.
July 30, 2012          IFCS window closes for the third quarter.
July 30, 2012          Third-quarter 2012 agency IRAS data file due to FMS.

August 6, 2012         Agencies generate third-quarter IRAS report using the Discoverer application in GFRS.

August 13, 2012        Verifying agency CFOs must submit an explanation of the reporting on the Status of Disposition Certification
                       form for the third quarter.
August 17, 2012        FMS makes the Comparative Status of Disposition Report available to the agencies by this date, for the third quarter.

August 23, 2012        FACTS I MAF window opens.
August 27, 2012*       Verifying agency IGs must submit interim legal representation letters and management schedules to FMS,
                       DOJ, and GAO.
September 6, 2012      For verifying and nonverifying agencies, the window opens for Closing Package data submission in GFRS for
                       Modules GF001 to GF008, as applicable.
September 14, 2012     Agencies’ FACTS I MAF submissions due.
September 20, 2012     SSA, HHS, and RRB report the draft Social Insurance data in the GFRS Closing Package.

September 26, 2012     After the agencies review, update, and submit the MAF, FMS reviews and approves the MAF by this date.
September 28, 2012     Window opens for FACTS I ATB submissions.
October 9, 2012        IFCS window opens for fourth quarter 2012.
October 22, 2012*      IFCS window closes for fourth quarter 2012 (final).
October 22, 2012*      Fourth-quarter 2012 agency IRAS data file due to FMS.
October 26, 2012       DOL reports the draft Social Insurance data for Black Lung and Unemployment Insurance in GFRS Closing
October 26, 2012       Lead program agencies receive an ATB for the trust fund activity located at BPD. (Refer to subsection
October 29, 2012       Agencies generate fourth-quarter IRAS report using the Discoverer application in GFRS.
November 15 2012*       1. GFRS Notes and other FR data submissions are due for nonverifying agencies by 6 p.m. eastern standard
                              time (EST).
                        2. Window closes for FACTS I ATB submissions to FMS for nonverifying agencies by 6 p.m. EST.
                        3. Agencies must get updates from FMS about any adjustments made on reporting procedures for the Closing
                              Package data after this date.
                        4. IG opinion on the Closing Package for verifying agencies, including the Trading Partner Note, is due by 6 p.m.
                        5. IG must submit copies of documents listed under subsection 4705.45 and the Closing Package auditors’
                              report to GAO, FMS, and OMB by 6 p.m. EST.
                        6. Verifying agency IGs must submit the final legal representation letters and management schedules to
                               FMS, DOJ, and GAO by 6 p.m. EST.
                        7. Verifying agencies must submit a Closing Package Schedule of Uncorrected Misstatements (SUM) including the
                              management representation letter via email to FMS, OMB, and GAO.
November 19, 2012      Verifying agencies generate intragovernmental reports based on the Closing Package data using the Discoverer
                       application in GFRS.
November 21, 2012*     Agency CFOs’ submit their Representations for Federal Intragovernmental Activity and Balances (Sections I, II, III,
                       and required documentation) to FMS and GAO.
November 26, 2012      Verifying agencies generate the Intragovernmental Comparative Closing Package Explanations of Differences
                       Report for fiscal 2012 via the Discoverer application in GFRS and distribute the report to the CFOs and IGs.
November 30, 2012      FACTS I ATB submission window closes for verifying agencies by 6 p.m. EST.
December 3, 2012       Verifying agency IGs must provide FMS information about subsequent events that occurred after the effective
                       date of their final legal representation letters through November 30, 2012, that resulted in a change of
                       likelihood or an amount of loss. Send this information via email to FMS, OMB, and GAO no later than
                       December 3, 2012, by 6 p.m. EST.
December 7, 2012       Verifying agency CFOs must provide FMS information about subsequent changes to Management
                       Representation Letters and financial statements that have arisen after the date of the financial statements audits
                       (general purpose and special purpose) and up through December 6, 2012. Send this information via email to
                       FMS, OMB, and GAO no later than December 7, 2012, by 6 p.m. EST.
*Represents the “no later than date.” Agencies should submit data as early as possible.

T/L 684                                                            21                                                              May 2012
2-4700                                                                                                     VOL I

                                     Figure 4: Treasury Managed Trust Funds

                Treasury Managed Trust Fund                             Agency/Department
           Federal Supplementary Medical Insurance        Department of Health and Human Services (HHS)
           Federal Hospital Insurance                     HHS
           Vaccine Injury Compensation                    HHS
           Federal Old-Age and Survivors Insurance        Social Security Administration (SSA)
           Federal Disability Insurance                   SSA
           Airport and Airway                             Department of Transportation (DOT)
           Aquatic Resources                              Department of the Interior
           Oil Spill Liability                            Department of Homeland Security
           Highway                                        DOT
           Black Lung Disability                          Department of Labor (DOL)
           Unemployment                                   DOL
           Hazardous Substance Superfund                  Environmental Protection Agency (EPA)
           Leaking Underground Storage Tank               EPA
           Inland Waterways                               U.S. Army Corps of Engineers
           Harbor Maintenance                             U.S. Army Corps of Engineers

May 2012                                             22                                                   T/L 684
VOL I                                                                     2-4700

  Direct inquiries and deliver documents required by this chapter to:
          Karin Dasuki
          Director, Financial Reports Division
          Governmentwide Accounting
          Financial Management Service
          Department of the Treasury
          3700 East-West Highway, Room 509B
          Hyattsville, MD 20782
          Telephone: 202-874-8058
          Fax: 202-874-9907

  Also, deliver documents required by this chapter to:
          Dawn Simpson
          Government Accountability Office
          441 G Street, NW., Room 5T16
          Washington, DC 20548
          Telephone: 202-512-9473

          Office of Management and Budget
          Telephone: 202-395-3993
          Web site:

T/L 684                                            23                   June 2012
2-4700                                                                                                   VOL I

                                         Appendices Listing

         Appendix No.   Title

             1          Reclassified Financial Statements and Line Item Descriptions
             2          Sample Agency A Reclassification Entry Summary
             3          Financial Report (FR) Notes and Instructions
             4          Other Financial Report (FR) Notes Data and Instructions
             5          Agency/Federal Trading Partner Department Codes for Governmentwide Financial
                        Report System (GFRS) and Federal Agencies’ Centralized Trial Balance System I
                        (FACTS I)
             6          Reciprocal Categories Crosswalk to Financial Statements
             7          Federal Intragovernmental Transactions Categories of Reciprocal U.S. Standard
                        General Ledger Proprietary Accounts
             8          Fiscal 2012 CFO Representations for Federal Intragovernmental Activity and
             9          Quarterly Agency Intragovernmental Reporting and Analysis System (IRAS) Data
                        File Submission - Description and Formats
             10         Intragovernmental Business Rules

May 2012                                           24                                                   T/L 684

Shared By: