Docstoc

Authority USDA Forest Service

Document Sample
Authority USDA Forest Service Powered By Docstoc
					                                                                       6509.11m_10
                                                                       Page 1 of 35




                                    FOREST SERVICE HANDBOOK
                                   NATIONAL HEADQUARTERS (WO)
                                         WASHINGTON, DC



                FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK

                     CHAPTER 10 - ACCRUING EARNED REVENUE

Amendment No.: 6509.11m-2007-1

Effective Date: September 6, 2007

Duration: This amendment is effective until superseded or removed.

Approved: JESSE KING                                         Date Approved: 08/27/2007
          Chief Financial Officer

Posting Instructions: Amendments are numbered consecutively by Handbook number and
calendar year. Post by document; remove the entire document and replace it with this
amendment. Retain this transmittal as the first page(s) of this document.

 New Document                     6509.11m_10                                         35 Pages

 Superseded Document(s) by
 Issuance Number and
 Effective Date

Digest:

10 - Establishes code and caption for, “Accruing Earned Revenue”, and sets policy and
procedural direction to ensure that all revenue is accrued properly.

11 - Establishes code and caption for, “Monthly Accrual of Unbilled Earned Revenue from
Timber Harvests,” and sets forth procedural direction to determine and record an accrual for this
revenue flow.

12 - Incorporates direction previously issued in interim directive 6509.11k-2006-8, section
56.76a (Purchaser Road Credit (PRC) and Specified Road Credits (SRC)). Establishes code and
caption for “Monthly Accrual of Purchaser Road Credit and Specified Road Credit.” With minor
clerical changes, the text sets forth procedural direction to determine and record an accrual for
this revenue flow.
WO AMENDMENT 6509.11m-2007-1                                                  6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                    Page 2 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


Digest--Continued:

13 - Establishes code and caption for, “Annual Accrual of Permit Fees for Special Uses, Grazing,
and Minerals”, and sets forth procedural direction to determine and record an accrual for this
revenue flow.

14 - Establishes code and caption for, “Quarterly Accrual of Revenue for Plant-A-Tree and
Character Licensing of Smokey Bear and Woodsy Owl,” and sets forth procedural direction to
determine and record an accrual for this revenue flow.

15 - Establishes code and caption for, “Annual Accrual of Revenue Collected by Third Party
Vendors,” and sets forth procedural direction to determine and record an accrual for this revenue
flow.

16 - Establishes code and caption for, “Quarterly Accrual of Reimbursable Revenue for Incident-
Related Agreements,” and sets forth procedural direction to determine and record an accrual for
this revenue flow.

17 - Incorporates direction previously issued in interim directive, 6509.11k-2006-11. Establishes
code and caption for, “Annual Accrual of Reimbursable Revenue for Non-Incident-Related
Agreements,” and sets forth procedural direction to determine and record an accrual for this
revenue flow.
WO AMENDMENT 6509.11m-2007-1                                                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                                                            Page 3 of 35
DURATION: This amendment is effective until superseded or removed.

                                FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                                   CHAPTER 10 - ACCRUING EARNED REVENUE


                                                          Table of Contents

  10.1 - Authority........................................................................................................................... 4
  10.4 - Responsibility ................................................................................................................... 4
  10.5 - Definitions ........................................................................................................................ 5
11 - MONTHLY ACCRUAL OF UNBILLED EARNED REVENUE FROM TIMBER
       HARVESTS .......................................................................................................... 6
12 - MONTHLY ACCRUAL OF PURCHASER ROAD CREDIT AND SPECIFIED ROAD
       CREDIT ................................................................................................................ 9
13 - ANNUAL ACCRUAL OF PERMIT FEES FOR SPECIAL USES, GRAZING AND
       MINERALS ......................................................................................................... 13
14 - ANNUAL ACCRUAL OF REVENUE FOR PLANT-A-TREE AND CHARACTER
       LICENSING OF SMOKEY BEAR AND WOODSY OWL ................................... 15
15 - ANNUAL ACCRUAL OF REVENUE COLLECTED BY THIRD PARTY VENDORS
        ........................................................................................................................... 18
16 - QUARTERLY ACCRUAL OF REIMBURSABLE REVENUE FOR INCIDENT-
       RELATED........................................................................................................... 20
17 - ACCRUAL OF REIMBURSABLE REVENUE FOR NON-INCIDENT RELATED
       AGREEMENTS .................................................................................................. 24
  17.1 - General Information about Accruing Revenue for Non-Incident Reimbursable
           Agreements ................................................................................................................... 24
  17.2 - Methodology for Determining Revenue Accruals for Non-Incident Reimbursable
           Agreements ................................................................................................................... 27
     17.21 - Actual Unbilled Expenditures Recorded in PCAS Agreements ............................... 27
     17.22 - Statistically Estimated Unbilled Expenditures Not Recorded in PCAS Agreements
              ................................................................................................................................... 30
     17.23 - Actual Unbilled Expenditures Not Recorded in PCAS Agreements ........................ 32
     17.24 - Agreement/Project Specific Entries for Sensitive PCAS Agreements ..................... 34
     17.25 - Separate Project-Level Accrued Revenue Entry for Non-PCAS Agreements ......... 35
WO AMENDMENT 6509.11m-2007-1                                                    6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                      Page 4 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


The Federal Government’s standard accrual-basis accounting requires all Federal agencies to
recognize earned revenue when goods and services are sold, regardless of when the money is
collected. Recording accrual entries quarterly for revenue flows material to the agency, ensures
that sufficient revenue of the accounting period is included in the agency’s standard general
ledger and on the quarterly financial statements to match with the expenses of the period; and to
display the net results of operations. Materiality for any one revenue flow is defined as 3% of
total agency revenue. The related materiality analysis occurs annually at the ASC-B&F in
October based on the previous fiscal year’s actual revenue flows and their respective amounts.
The materiality determination is effective for the entire fiscal year.

10.1 - Authority

         1. Financial Accounting Standards Advisory Board Statements of Federal Financial
         Accounting Standards No. 7, “Accounting for Revenue and Other Financing Sources and
         Concepts for Reconciling Budgetary and Financial Accounting” (http://www.fasab.gov).

         2. United States Treasury Financial Management Service. “United States Standard
         General Ledger - Treasury Financial Manual, Section 1 Chart of Accounts, Section II
         Account Descriptions, and Section III Accounting Transactions”
         (http://www.fms.treas.gov/ussgl/).

         3. Office of Management and Budget. “OMB Circular A-136, Financial Reporting
         Requirements” (http://www.whitehouse.gov/OMB). This circular provides guidelines for
         Federal financial processes.

         4. Office of Management and Budget. “OMB Circular A-123, Management’s
         Responsibility for Internal Control, Appendix A, Internal Control Over Financial
         Reporting (http://www.whitehouse.gov/OMB). This circular describes the internal
         controls required over Federal financial reporting.

10.4 - Responsibility

         1. Director of Budget and Finance, Albuquerque Service Center (ASC-B&F). It is the
         responsibility of the Director of Budget and Finance, Albuquerque Service Center (ASC-
         B&F) to calculate, process, and record national-level accruals for revenues as set forth in
         this chapter. Quarterly quality assurance monitoring shall test the accuracy of estimation
         techniques and recommend changes for improvement when needed. Materiality
         determinations shall occur in October of each year based on the previous fiscal year’s
         actual revenue flows and their respective amounts, and shall remain effective for the
         entire fiscal year.

         2. Washington Office Deputy Chiefs, Regional Foresters, Station Directors, Area
         Director, Forest Products Laboratory Director, International Institute of Tropical Forestry
         Director, and Forest Supervisors. It is the responsibility of the Washington Office
WO AMENDMENT 6509.11m-2007-1                                                       6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                         Page 5 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


         Deputy Chiefs, Regional Foresters, Station Directors, Area Director, Forest Products
         Laboratory Director, International Institute of Tropical Forestry Director, and Forest
         Supervisors to ensure the quality and integrity of financial data processed in their areas of
         responsibility, including:

                  a. Ensuring that all billing information is entered in the Financial Transaction
                  Request System or the interfacing databases such as Timber Information
                  Management (TIM) by the third working day preceding the end of each month,
                  and by the cutoff date published in the Fiscal Year Budget and Finance Annual
                  Closing Procedures and Calendar (available on the following website:
                  http://fsweb.r3.fs.fed.us/asc/bfm. After the cutoff date, fax the billing information
                  to the ASC-B&F as instructed in the Annual Closing Procedures.

                  b. Ensuring compliance with all procedures in this chapter.

                  c. Using express overnight mail service during the last week of September to
                  expedite the mailing of deposits to the Treasury-designated lockbox bank to
                  ensure that all collections are recorded before fiscal yearend, September 30.

10.5 - Definitions

         Automated Timber Sale Accounting System (ATSA). An automated database that tracks
         activity on timber sale contracts and permits, including harvest volumes, and related
         deposits and earnings.

         Balance Voucher (BV). An accounting document in the Foundation Financial
         Information System designed to record accounting adjustments and a variety of original
         internal business transactions.

         IPAC. The U. S. Department of the Treasury’s automated network for “Intra-
         governmental Payments and Collections,” designed to eliminate the need for Federal
         entities to issue paper checks to each other.

         MMS. MMS is the acronym for the Minerals Management Service, a bureau of the U. S.
         Department of the Interior. MMS administers subsurface minerals leases such as oil,
         natural gas, and coal, for all the Federal land management agencies.

         National Finance Center (NFC). The U. S. Department of Agriculture’s accounting
         service center in New Orleans, LA.

         Over-the-Counter (OTC). The term used for a sale in which the customer is face-to-face
         with the sales person, usually in a front office setting.
WO AMENDMENT 6509.11m-2007-1                                                  6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                    Page 6 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


         Revenue. An inflow of resources that the Government demands, earns, or receives by
         donation. Revenue comes from two sources: exchange transactions and nonexchange
         transactions. Exchange revenues arise when a Government entity provides goods and
         services to the public or to another Government entity for a price. Another term for
         “exchange revenue” is “earned revenue.” Nonexchange revenues arise primarily from
         exercise of the Government’s power to demand payments from the public (e.g., taxes,
         duties, fines, and penalties) but also include donations. Amounts of earned revenue and
         related accounts receivable, must be recorded in the accounting system, and displayed on
         financial statements, for the fiscal year in which revenue was earned and reportable.
         (Federal Accounting Standards Advisory Board, Statement of Federal Financial
         Accounting Standards 7: Accounting for Revenue and Other Financing Sources and
         Concepts for Reconciling Budgetary and Financial Accounting).

         Transaction Code. A 2-digit alpha-numeric code in the Foundation Financial Information
         System that classifies the accounting transaction as a miscellaneous order, payment,
         customer billing, cash receipt, accounting adjustment, and so forth. Transaction Code is
         superior to Transaction Type. Every accounting and budgetary transaction has both a
         transaction code and a transaction type.

         Transaction Type. A 2-digit alpha-numeric code in the Foundation Financial Information
         System that classifies the accounting transaction into more detail; subordinate to the
         Transaction Code. Every accounting and budgetary transaction has both a transaction
         code and a transaction type.

         Unbilled Account Receivable. A Forest Service term describing amounts due from
         customers for which a bill has not been issued.

         United States Standard General Ledger (USSGL). Accounting guidelines issued by the
         U. S. Department of the Treasury, including a chart of accounts and standard account
         postings for mandatory use by all Federal government entities.

11 - MONTHLY ACCRUAL OF UNBILLED EARNED REVENUE FROM TIMBER
HARVESTS

Historically called the “TSA Receivable Estimate Accrual,” the monthly accrual of unbilled
earned revenues from timber harvest activities is required because the actual figures needed to
issue the billings are not available until the Timber Sale Accounting (TSA) system closes on
approximately the 15th of the subsequent month. The accrued earned revenues are estimated
amounts due from timber purchasers for timber harvested and removed during the current month.
Because the actual earned revenue amounts for unbilled receivables are not available and
formally recorded until the subsequent month, an accrual must be estimated and recorded each
month-end in FFIS. The accrual is only for the current month’s estimate of unbilled earned
revenues, not the total amount due from the timber purchaser.
WO AMENDMENT 6509.11m-2007-1                                                   6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                     Page 7 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


Descriptions of the activities generating the revenue and the quarterly accrual methodology are
as follows:

         1. Activities Generating Revenue. The value of timber harvested sometimes exceeds the
         amount the purchaser has paid in advance on the timber sale contract. In these cases,
         estimated amounts are accrued because actual amounts won’t be available and posted to
         the FFIS system until the subsequent month when the TSA system closes.

         2. Monthly Accrual Methodology. On a monthly basis, an estimated amount of
         unrecorded revenue related to timber harvest is determined by calculating a seasonally
         adjusted average of revenues, as described in the “Monthly Unbilled Revenue Accrual,”
         which may be found under Operations Interfaces on the following website:

         http://fsweb.r3.fs.fed.us/asc/bfm/programs/financial-operations/receivables-
         collections/timber-sales/policies-procedures

The average revenue is calculated using actual monthly revenue to be billed, identified by the
TSA system on previous months’ TSA reports. The source document for the actual amounts to         Comment [GEM1]: Mike M., leave “months’”
                                                                                                  plural possessive. Reports from multiple months are
be billed is a report produced by the TSA system, report number TSA 992-01, “Accounts             used to calculate the average.
Receivable/Accrued Earnings”, more specifically the column headed “Closing Minus Balance.”
The ASC-B&F records the accrual entry in FFIS using a multiple line standard voucher
(transaction code SV) to enter increases to the various revenue accounts and an increase to
accounts receivable. FFIS automatically reverses the accrual entry at the beginning of the
subsequent month and the ASC-B&F reviews and approves the reversal by the 10th day of that
month.

See the data table in exhibit 01 for the transaction codes, transaction types, standard general
ledger postings and voucher information used for the accrual of unbilled earned revenue from
timber harvests.
WO AMENDMENT 6509.11m-2007-1                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                            Page 8 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                   11 - Exhibit 01

                                  Accrued Unbilled Earned Revenue:
                                Accrual Entry’s Information and Postings                                  Comment [GEM2]: Mike, the gridlines of all the
                                                                                                          exhibits don’t show up on the draft you sent back to
                                                                                                          us. Please make sure that the grid lines are visible.
                                           Trans                                         Revenue Source
Entry           Fund Code(s)               Code/        Standard General     Vendor       Code; Budget
 No.                                       Trans         Ledger Postings      Code           Object
                                           Type
                                                      Proprietary:
   1.      5008 - National Forest        SV/U1         Debit: 1312
           Fund Revenue                               Accounts Receivable
                                                       Credit: 51100
           5896 - National                            Revenue from Goods
           Grasslands Revenue                         Sold
           CWF2 - Cooperative                         Budgetary:               FS
           Work, Non-Agreement                         None                 ACCRUAL             0105
           Based
           CWKV - Cooperative                         Proprietary:
   2.      Work, Knutson-                SV/U1         Debit: 1312
           Vandenburg                                 Accounts Receivable
           BDBD - Brush                                Credit: 5900 Other
           Disposal                                   Revenue
           SFSF - Salvage Sale                        Budgetary:
           Fund                                        None
           TPBP - Botanical
           Products
           SSCC - Stewardship
           Contracting
WO AMENDMENT 6509.11m-2007-1                                                      6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                        Page 9 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



12 - MONTHLY ACCRUAL OF PURCHASER ROAD CREDIT AND SPECIFIED ROAD
CREDIT

Prior to April 1999, the Forest Service granted Purchaser Road Credit (PRC) to timber
purchasers. Under the terms of certain timber sales contracts, timber purchasers were allowed to
construct roads, bridges, and culverts to gain access to the timber they purchased. If the Forest
Service had a use for the roads upon contract completion, the timber purchaser was given a
credit, referred to as a PRC, for the value of the roads. The PRC was established in the
Automated Timber Sale Accounting System when the forest accepts the road. See paragraphs 1,
2, 3, and 4 below for direction about the accounting entries.

         1. On applicable timber sale contracts, the timber purchaser can use the PRCs to offset
         payments for timber harvested. As the timber purchaser uses the PRCs instead of cash
         payments for timber harvested, the amount in Unearned Revenue is reduced and current
         year revenue is recognized. If all PRCs have not been applied when the contract is
         closed, they are cancelled and the amounts are removed from the Unearned Revenue
         account and recorded in the Earned Revenue account.

         2. After April 1999, the use of PRCs for new contracts is prohibited and the method of
         accounting for the costs changed from recording PRCs to recording Specified Road
         Credit (SRC) as revenue.

Accrual amounts for PRC and SRC assets and revenues are based on reports from the Automated
Timber Sale Accounting System (TSA), provided by the Washington Office Financial
Management Staff. The funds used to record these entries are CMEX and CNEX because these
reimbursable fund accounts allow the Forest Service to record revenue without augmenting an
appropriation. The TSA source reports are titled as follows: “Detail for Cost Established,”
“Summary for Cost Established,” “Detail for Established Credit,” and “Summary for Established
Credit.”

Accrual entries are recorded on a monthly basis and both monthly and yearend entries reverse.

              a. PRCs Established. Use the TSA Report 940-01 “PRC Road Credit Established for
              FY XX” to obtain current year information on road construction costs incurred by the
              timber contractor. Currently, few PRC contracts remain active from the period prior
              to April 1999. For PRCs established, accrual entries are recorded with a Standard
              Voucher document as summarized in exhibit 01.

              b. PRCs Applied. In the current fiscal year, the “effective” portion of PRCs
              established will be used by timber contractors in lieu of cash to pay for timber they
              have harvested. Obtain the amount of applied PRCs from the TSA Report 926-01
WO AMENDMENT 6509.11m-2007-1                                                     6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                       Page 10 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



              “FY XX Yearend TSPIRS Report (All Contracts)”, column “FY XX PROCUNIT”.
              For PRCs applied, accrual entries are recorded with a Standard Voucher document as
              summarized in exhibit 02.

              c. Unapplied PRCs from Closed Contracts. During the current fiscal year, timber
              contracts are closed which may have PRCs that have not been applied by the
              contractor toward timber the contractor has harvested. Through April FY 2006, the
              remaining unapplied PRCs were recorded as Donated Revenue, but effective with
              month-end May 2006, are reported as Earned Revenue. The TSA Report 926-01 “FY
              XX Yearend TSPIRS Report (Closed Contracts Only)” column “FY XX C3701”
              provides information. Note: This is a separate report from the one used for Applied
              PRCs. For unapplied PRCs from closed contracts, accrual entries are recorded with a
              Standard Voucher document as summarized in exhibit 03.

              d. Established SRCs. Any road construction costs under timber contracts after April
              1999 are recognized as revenue upon the acceptance of the roads by the Forest
              Service. TSA Report 940-01 “SRD Cost Established for FY XX” provides the
              information on the road construction costs incurred by the timber contractor during
              the current fiscal year. Details about the accounting entries and postings are provided
              in exhibit 04.
WO AMENDMENT 6509.11m-2007-1                                                                6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                                  Page 11 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                  12 - Exhibit 01

                   PRCs Established - Accrual Entry’s Information and Postings

                              Trans                                                                  Revenue
     Fund Code(s)             Code/           Standard                 Asset           Vendor      Source Code;
                              Trans         General Ledger            Recorded          Code       Budget Object
                               Type            Postings
                              SV/NT        Proprietary:                 Prism,
CNEX - Construction                          Debit: 1712             Culverts, and
External Reimbursable                      Improvements to             Surface
                                           Land
Or                             SV/TI         Debit: 1740               Bridges           FS             0210
                                           Other Structures/                          ACCRUAL
CMEX - Construction                        Facilities
External Reimbursable         SV/NT,         Credit: 2320             All Assets
                               SV/TI       Deferred Credits

                                N/A        Budgetary:                    N/A
                                            None



                                                  12 - Exhibit 02

                     PRCs Applied - Accrual Entry’s Information and Postings

                                   Trans                                                        Revenue Source
       Fund Code(s)                Code/          Standard General                 Vendor        Code; Budget
                                   Trans           Ledger Postings                  Code            Object
                                   Type
                                               Proprietary:
CNEX - Construction                              Debit: 2320 Deferred
External Reimbursable                          Credits
                                  SV/RV          Credit: 5100 Revenue               FS               0210
Or                                             from Goods Sold                   ACCRUAL

CMEX - Construction                            Budgetary:
External Reimbursable                           None
WO AMENDMENT 6509.11m-2007-1                                                                6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                                  Page 12 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                  12 - Exhibit 03

                                Unapplied PRCs from Closed Contracts –
                                Accrual Entry’s Information and Postings

                                   Trans                                                        Revenue Source
       Fund Code(s)                Code/          Standard General                 Vendor        Code; Budget
                                   Trans           Ledger Postings                  Code            Object
                                   Type
                                               Proprietary:
CNEX – Construction                              Debit: 2320 Deferred
External Reimbursable                          Credits
                                   SV/RV         Credit: 5100 Revenue             FS                 0210
Or                                             from Goods Sold                 ACCRUAL

CMEX – Construction                            Budgetary:
External Reimbursable                           None




                                                  12 - Exhibit 04

                   Established SRCs - Accrual Entry’s Information and Postings

                            Trans                                                                    Revenue
     Fund Code(s)           Code/        Standard General              Asset           Vendor      Source Code;
                            Trans         Ledger Postings             Recorded          Code       Budget Object
                             Type
                            SV/TM       Proprietary:                    Prism,
CNEX –                                    Debit: 1712                Culverts, and
Construction                            Improvements to                Surface
External                                Land
Reimbursable                SV/TB         Debit: 1740                  Bridges           FS             0210
                                        Other Structures/                             ACCRUAL
Or                                      Facilities
                           SV/TM,         Credit: 5100                All Assets
CMEX –                     SV/TB        Revenue from
Construction                            Goods Sold
External
Reimbursable                 N/A        Budgetary:                       N/A
                                         None
WO AMENDMENT 6509.11m-2007-1                                                       6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                         Page 13 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


13 - ANNUAL ACCRUAL OF PERMIT FEES FOR SPECIAL USES, GRAZING AND
MINERALS

During the year, local Forest Service offices generate bills for special uses, grazing, and minerals
based on the terms of the respective permit, and collect fees in advance based on the standard
period of occupancy, January 1 through December 31. The permit billing and management
subsystems, the Special Uses Data System (SUDS) and INFRA-Range (accessed using I-Web)
stay open at month-end for October through August.

For month-end September, however, an accrual of permit fees for special uses, grazing, and
minerals is required for fiscal years in which SUDS and INFRA-Range close a few days before
September 30. During the few days prior to yearend, if any permit changes occur affecting the
amount of revenue billed and/or unbilled, then an accrual is necessary to ensure that all permit
fee revenue is correctly recorded during the period.

Descriptions of the activities generating the revenue and the quarterly accrual methodology are
as follows:

         1. Activities Generating Revenue. Local Forest Service offices issue permits for the
         following activities:

              a. Grazing for various types of animals on designated tracts of National Forest
              System lands and National Grasslands.

              b. Special uses such as electricity transmission lines or oil and gas pipelines crossing
              the forest. Many communications companies have special use permits for the
              placement of antennas, microwave towers, and relay stations on mountain tops.

         2. Annual Accrual Methodology.

              a. After SUDS and/or INFRA Range close for the fiscal year, if any changes occur in
              the fees or billings for special uses, grazing, or minerals, then the local Forest Service
              offices must fax the information to the ASC-B&F Special Uses/Grazing section at the
              fax number shown in the Fiscal Year Budget and Finance Annual Closing Procedures
              (available on the following website: http://fsweb.r3.fs.fed.us/asc/bfm).

              b. ASC-B&F uses the information to prepare and record an accrual in FFIS prior to
              the close of business at yearend.

              c. FFIS creates the reversal entry at the beginning of the subsequent month and the
              ASC-B&F reviews and approves the reversal by the 10th day of that month.

              d. The local Forest Service office must input the changes into SUDS and/or INFRA
              Range during the subsequent month.
WO AMENDMENT 6509.11m-2007-1                                                    6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                      Page 14 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


See exhibit 01 for the transaction codes, transaction types, and standard general ledger postings
used for the accrual of permit fees for special uses and grazing.


                                                  13 - Exhibit 01

                   Annual Accrual of Permit Fees for Special Uses and Grazing:
                                   Information and Postings

                               Trans
     Fund Code(s)              Code/           Standard General       Vendor     Revenue Source
                               Trans            Ledger Postings        Code    Code; Budget Object
                               Type
                                           Proprietary:
5008 - National Forest       SV/U1           Debit: 1312 Accounts
Fund Revenue                               Receivable                   FS              0105
                                             Credit: 5100 Revenue    ACCRUAL
5896 - National                            from Goods Sold
Grasslands Revenue                         Budgetary:
                                             None
WO AMENDMENT 6509.11m-2007-1                                                        6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                          Page 15 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



14 - ANNUAL ACCRUAL OF REVENUE FOR PLANT-A-TREE AND CHARACTER
LICENSING OF SMOKEY BEAR AND WOODSY OWL

The character licensing of Smokey Bear and Woodsy Owl receives earned revenues quarterly
with each 3-month remittance period specified in the license agreement.

Descriptions of the activities generating the revenue and the annual accrual methodology are as
follows:

         1. Activities Generating Revenue.

              a. Plant-A-Tree. Forest Service’s Plant-A-Tree program is a publicized offer to the
              public. For a contribution of $10, a remitter may have a tree planted in memory of a
              loved one, or to honor a person, or a special occasion such as a birthday; the Forest
              Service issues a certificate to the contributor, commemorating the event. The monies
              finance tree planting projects on National Forest System lands.

              b. Smokey Bear and Woodsy Owl Character Licensing. The Forest Service has
              statutory authority to issue licenses to private businesses to reproduce the images of
              Forest Service’s characters, Smokey Bear and Woodsy Owl (FSH 6509.11g, chapter
              60). The two types of character licenses are as follows:

                  (1) A single-use license fee is due when the license is signed.

                  (2) A regular-use license fee is a percentage of the licensee’s sales of Smokey
                  Bear or Woodsy Owl products. According to the license agreement, fees are due
                  every 3 months.

         2. Annual Accrual Methodology. Annual accruals are processed for Plant-a-Tree
         contributions and Smokey Bear and Woodsy Owl royalty revenue because the amount of
         the receipts is relatively small and the accrual reporting is too great an administrative
         burden for more frequent accruals.

              a. Plant-A-Tree. No accrual is necessary for contributions from individuals because
              they are recorded in daily business during the month using FTRS which is open and
              available through the last day of each month. For private companies that make
              routine contributions, an accrual is recorded for the amount estimated by the
              Washington Office Forest Management Staff. In the absence of an estimate from the
              Forest Management, the accrual estimate shall be an average of the previous 12
              calendar months of actual contributions.

              b. Smokey Bear and Woodsy Owl Character Licensing.
WO AMENDMENT 6509.11m-2007-1                                                      6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                        Page 16 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


              (1) Single-Use Licenses. ASC-B&F OTC team shall contact the license
              administrators to determine if there are any unpaid one-time use fees, or fees the
              administrators have collected and not submitted for deposit. The amount of earned
              revenue to be accrued for single-use licenses is the amount of unbilled fees plus fee
              revenue on hand.

              (2) Regular-Use Licenses. The ASC-B&F OTC team shall review all open licenses
              and update the spreadsheet that: (a) lists each license with its respective historical
              revenues, (b) summarizes actual royalty income received, and (c) calculates a
              quarterly average of actual earned revenue.

See exhibit 01 for the transaction codes, transaction types, and standard general ledger postings
used for the accrual of revenue from Plant-A-Tree and character licensing of Smokey Bear and
Woodsy Owl.
WO AMENDMENT 6509.11m-2007-1                                                                6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                                  Page 17 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                  14 - Exhibit 01

                  Accruing Revenue from Plant-A-Tree and Character Licensing
                  Of Smokey Bear and Woodsy Owl: Information and Postings

                                                      Trans                                            Revenue
     Entry                 Fund Code(s)               Code/          Standard General    Vendor         Source
                                                      Trans           Ledger Postings     Code          Code;
                                                      Type                                             Budget
                                                                                                        Object
                   CWFS - Cooperative Work,                          Proprietary:
 Plant-a-Tree      Forest Service (CWFS was         SV/MS             Debit: 1312
                   used in FY 2006 and prior                         Accounts
                   years.)                                           Receivable
                                                                      Credit: 5900
                   CWF2 - Cooperative Work,                          Other Revenue
                   Non-Agreement Based                               Budgetary:
                   (CWF2 is used in FY 2007                           None
                   and subsequent years.)
                                                                     Proprietary:
   Smokey          LPSB - Smokey Bear               SV/MS             Debit: 1312          FS               0105
     And           Licensing                                         Accounts           ACCRUAL
   Woodsy,                                                           Receivable
   Royalties       LPFL - Woodsy Owl                                  Credit: 5900
  Receivable       Licensing                                         Other Revenue
                                                                     Budgetary:
                                                                      None
WO AMENDMENT 6509.11m-2007-1                                                     6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                       Page 18 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



15 - ANNUAL ACCRUAL OF REVENUE COLLECTED BY THIRD PARTY VENDORS

To improve customer service to forest visitors, Forest Service enters into agreements with non-
government third parties to sell Forest Service maps and recreation passes. These third parties
are local businesses such as sporting goods stores, gas stations, outfitter/guides, and convenience
stores who want to sell Forest Service recreation passes or maps as a convenience for their
customers. The arrangement is advantageous to the Forest Service because the private
businesses have longer daily business hours and are open on weekends. Third party vendors are
encouraged to purchase the recreation passes and maps, paying for them in advance. However,
because some small businesses (often sole proprietorships) cannot afford such an outlay, instead
of advance payment being collected, the Forest Service enters into consignment arrangements
with the small businesses.

Descriptions of the activities generating the revenue and the annual accrual methodology are as
follows:

         1. Activities Generating Revenue. Private businesses local to the Forest Service office
         enter into consignment agreements with the Forest Service for the sale of Forest Service
         maps, recreation passes, Christmas tree tags, and other such items. The businesses
         periodically remit the collections to the Forest Service in accordance with the provisions
         of their agreement. Units shall instruct vendors to remit all collections in a timely
         manner that allows the Forest Service office to record the actual revenue.

         2. Annual Accrual Methodology. Annual accruals are processed for third party vendor
         revenue because the amount of the receipts is relatively small, and the accrual reporting is
         too great an administrative burden for more frequent accruals.

              a. Units shall minimize the amount of receipts held by third party vendors by
              establishing the vendors’ remittance dates as weekly at a minimum and every 14 days
              as a maximum.

              b. At yearend, units shall calculate the revenue accrual using the respective vendor’s
              average daily collection amount, calculated from the last 2 months of receipts that the
              vendor remitted to the Forest Service. Multiply the vendor’s average daily collection
              amount times the number of days in the accrual period. Units shall submit the accrual
              information to the ASC-B&F Receivables and Collections group in accordance with
              the instructions in the Fiscal Year Budget and Finance Annual Closing Procedures
              and Calendar, posted annually on the following website:
              http://fsweb.r3.fs.fed.us/asc/bfm.
WO AMENDMENT 6509.11m-2007-1                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                            Page 19 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



              c. ASC-B&F OTC team shall record the accrual entries submitted by field units.
              Two examples of the transaction codes, transaction types, and standard general ledger
              postings are shown in exhibit 01, one for the accrual of recreation receipts and one for
              map sale revenue collected by third party vendors.



                                                  15 - Exhibit 01

               Accruing Revenue For Receipts Collected By Third Party Vendors:
                                 Information and Postings

                                             Trans                                       Revenue Source
Entry            Fund Code(s)                Code/       Standard General    Vendor       Code; Budget
 No.                                         Trans        Ledger Postings     Code           Object
                                             Type
                                                         Proprietary:
   1.      FDFD Recreation Fees,           SV/MS          Debit: 1312
           Forest Service                                Accounts
                                                         Receivable
                                                          Credit: 5900
                                                         Other Revenue
                                                         Budgetary:            FS               0105
                                                          None              ACCRUAL
                                                         Proprietary:
   2.      MAPS - Reproduction             SV/MS          Debit: 1312
           and Sale of Maps to the                       Accounts
           Public                                        Receivable
                                                          Credit: 5900
                                                         Other Revenue
                                                         Budgetary:
                                                          None
WO AMENDMENT 6509.11m-2007-1                                                        6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                          Page 20 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



16 - QUARTERLY ACCRUAL OF REIMBURSABLE REVENUE FOR INCIDENT-
RELATED

Forest Service is the performing agency for many reimbursable agreements pertaining to incident
response. The term “incident” applies to wildland fires, hurricane relief assignments, and other
such emergency-related work projects.

Descriptions of the activities generating the revenue and the quarterly accrual methodology are
as follows:

         1. Activities Generating Revenue.

              a. Cooperative Protection Agreements, Non-Federal. This section pertains to non-
              Federal cooperative protection agreements. Annually, Forest Service reviews
              existing Cooperative Protection agreements established for incident support. New
              cooperative agreements are negotiated if required to maintain readiness. Until an
              incident occurs and the agreement is exercised, Forest Service records no financial
              obligation for these agreements. Each agreement’s provisions document a timeline
              for billings and cite the Federal statutes that authorize the cooperative fire activity.
              The ASC-B&F Incident Finance (IF) team makes payments and is the agency staff
              that generates billings for these agreements. The process steps to exercise a
              cooperative agreement are as follows:

              (1) A wildland fire incident occurs and the Dispatch Center generates a fire job code
              in the interagency FireCode system. If the incident occurs within State (cooperator)
              jurisdiction and the agreement’s “Forest Service Assist” block is checked, the letters
              “PN” are used in the first two positions of the 6-position fire job code. Job code
              positions 3 through 6 are a unique alpha-numeric identifier assigned to the incident.
              The PN designation signifies that the incident is on non-Federal land or is under non-
              Federal jurisdiction according to agreements in place. Not all PNxxxx fire job codes
              are reimbursable; Dispatch Centers must ensure that they correctly encode the
              “Reimbursable/Billable” block in the FireCode system.

              (2) ASC-B&F IF team distributes a spreadsheet monthly of all fire job codes to the
              Regional Incident Administrative Coordinators so that field units can validate and
              identify all reimbursable or cost share job codes.

              (3) ASC-B&F IF team monitors all fire job codes identified by the field to determine
              if the expenses are reimbursable based on the appropriate agreement.
WO AMENDMENT 6509.11m-2007-1                                                      6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                        Page 21 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



              (4) ASC-B&F IF team obtains a financial management report quarterly, listing all
              expenses for each fire job code. Reimbursable expenditures are summarized and
              prepared for billing. If the fire job code was established in appropriated fund WFSU,
              an expenditure accounting adjustment is required to position the expenses correctly
              for billing purposes in reimbursable fund WFEX. Beginning July 1, 2006, State
              “PNxxxx” job codes have reimbursable fund WFEX in their underlying accounting,
              therefore no accounting adjustment is necessary.

              (5) ASC-B&F IF team records quarterly, in FFIS, the initial bills for the preliminary
              amounts summarized in step 1 (a) (4) above, however the bills are not mailed to
              cooperators. The entries serve as accruals of estimated revenue during the Forest
              Service’s process of confirming the charges. Until all expenses are recorded in the
              FFIS accounting system, the preliminary bills continue to be modified quarterly to
              keep the accrued revenue current.

              (6) ASC-B&F IF team distributes the incident expense summaries to the field where
              the designated officer, dispatchers, and/or fire manager will review, approve, sign,
              and return the summaries to the ASC-B&F IF team. When the amounts are
              confirmed, the ASC-B&F IF team modifies the existing bill’s amount, if necessary;
              encloses supporting documentation (based on the agreement requirements); and mails
              it to the cooperator.

              (7) The Cooperator uses written communication to inform the local Forest Service
              unit about any disputed charges, as outlined by the dispute clause in the agreement.
              The Forest Service field unit shall investigate the disputed charges, negotiate with the
              cooperator, and request ASC-B&F IF team adjust the billing as appropriate.

              (8) The ASC-B&F IF team’s final billing occurs in a timely fashion.

              b. Federal Emergency Management Agency (FEMA) Agreements. Forest Service’s
              business relationship with FEMA is described in the National Response Plan (see
              http://www.dhs.gov/xprepresp/committees/editorial_0566.shtm), and documented in
              an interagency cooperative agreement. The Forest Service is the primary, or lead
              agency for the National Response Plan’s Emergency Support Function #4 (ESF4), the
              firefighting function. FEMA issues FEMA Form 90-129, Mission Assignment (MA),
              to the Forest Service, identifying the work to be performed and specifying a dollar
              limitation. However, FEMA does not expect Forest Service to be the sole agency
              spending the authorized funds. Forest Service records no unfilled customer order,
              based on the MA, because it is impossible to determine how much of the MA
              limitation will be expended by the Forest Service. The process for billing FEMA
              follows the steps outlined in paragraph 1 (a) (1) above, with the following exceptions:
WO AMENDMENT 6509.11m-2007-1                                                     6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                       Page 22 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


              (1) Forest Service field Fire Staff requests ASC-B&F IF team establish the number of
              job codes required for the emergency. The first position of the 6-position job code is
              “F” to signify “FEMA.”

              (2) ASC-B&F IF team obtains a financial management report from FFIS showing
              expenses by job code. ASC-B&F IF team analyzes the report and identifies the actual
              reimbursable expenses. Examples of items not reimbursable are base time and
              agency-provided medical care.

              (3) Once all the expenses have been identified, ASC-B&F IF completes, reviews, and
              signs the Mission Assignment Reimbursement Request Transmittal form. ASC-B&F
              IF team uses Treasury’s Intra-Governmental Payment and Collection network,
              (IPAC) to bill FEMA. In addition, ASC-B&F IF team mails supporting
              documentation to FEMA.

              (4) ASC-B&F IF team bills FEMA incidents monthly as charges occur. Final bills
              are issued in a timely manner when each mission assignment is closed out and all
              expenses are recorded in FFIS.

         2. Quarterly Accrual Methodology. ASC-B&F IF team prepares and enters a quarterly,
         high level self-reversing revenue accrual. The accrual amounts are determined using a
         financial management report which retrieves actual expenses from the Financial Data
         Warehouse. The quarterly revenue accrual amount represents unbilled expenses incurred
         after the previous billing cycle. For example, the billing cycle cuts off on the 20th of the
         last month in the quarter, the revenue accrual would cover expenses incurred from the
         21st through the end of the last month in the quarter.

         For FEMA MAs, the revenue accrual amount is for unbilled delivered orders.

For the accrual transaction code, transaction type, and standard general ledger postings see
exhibit 01.
WO AMENDMENT 6509.11m-2007-1                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                            Page 23 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                  16 - Exhibit 01

    Accruing Reimbursable Revenue for Non-Federal Cooperative Fire Agreements and
                Incident-Related Agreements: Information and Postings

                                    Trans                                                 Revenue Source
       Fund Code(s)                 Code/       Standard General Ledger      Vendor        Code; Budget
                                    Trans              Postings               Code            Object
                                    Type
                                               Proprietary:
WFEX - Wildland Fire    SV/PJ                    Debit: 1310 Accounts
External Reimbursements                        Receivable
                                                 Credit: 5200 Revenue
                                               From Services Provided          FS                0250
                                               Budgetary:                   ACCRUAL
                                                 Debit: 4251 Reimbursable
                                               and Other Income Earned,
                                               Receivable
                                                 Credit: 4210 Anticipated
                                               Reimbursable and Other
                                               Income
WO AMENDMENT 6509.11m-2007-1                                                      6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                        Page 24 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17 - ACCRUAL OF REIMBURSABLE REVENUE FOR NON-INCIDENT RELATED
AGREEMENTS                                                                                            Comment [GEM3]: Mike, this section contains
                                                                                                      text you haven’t seen. At auditors’ insistence, FS
                                                                                                      must tell the whole story about these agreements.
Forest Service uses the FFIS Project Cost Accounting System (PCAS) for the non-incident
related agreements’ accounting. PCAS automates the processes for billing, liquidation of
advances, and the assessment/adjustment of indirect costs. Agreements with an approved
exception (such as complex agreements with multiple partners) are managed in a non-PCAS
environment. Revenue is recorded as earned on both PCAS and non-PCAS agreements when a
reimbursable billing document (transaction codes BP or BD) is recorded or when an advance is
liquidated (transaction code PS) upon performance of work. The majority of revenue recognition
is initially achieved by these billing or advance liquidation transactions. Advances are liquidated
monthly as work is performed, evidenced by paid and unpaid expenditures. For reimbursable
collections, the frequency of billing varies depending on the identity of the Forest Service’s
cooperator and the terms of the agreement. A revenue accrual is necessary only when unbilled
expenditures exist at fiscal quarter-end reporting periods for which a billing will not be issued.
Accounts with unbilled expenditures occur under the following circumstances:

         1. Non-federal partners not billed at least quarterly;

         2. Federal partners under an approved exception to bill less frequently than quarterly; or

         3. Agreements where a billing will not be produced at the quarterly interval for reasons
         such as:

              (a) System constraints when the billing parameters and billing interval conflict,

              (b) High level payment accruals not recorded at the agreement level,

              (c) Early PCAS cutoff date at fiscal yearend.

17.1 - General Information about Accruing Revenue for Non-Incident
Reimbursable Agreements

The complete accounting procedure for non-incident reimbursable agreements is set forth in
FSH 6509.11k, chapter 50. The following is a summary of billing requirements, important to
note because billed expenditures are not subject to a revenue accrual:

         1. USDA and Non-USDA Federal Cooperators. Unless the agreement is an approved
         exception, billing is required at least quarterly. Exceptions are approved on a case-by-
         case basis by the ASC-B&F Reimbursable and Collection Agreements (RACA) Branch
         Chief with consultation as necessary with WO Financial Management Policy staff.
WO AMENDMENT 6509.11m-2007-1                                                     6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                       Page 25 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


         2. Non-Federal Cooperators. A monthly billing cycle is Forest Service’s preferred
         billing frequency for agreements with non-federal partners. However, when monthly
         billings are not possible, a less frequent billing cycle may be negotiated, with a billing
         required annually at the end of each fiscal year. Agreement terms must address the
         applicable billing frequency. To achieve the necessary recognition of revenue, when a
         billing is issued less frequently than quarterly, a revenue accrual must be recorded each
         quarter-end financial statement reporting period by the ASC-B&F RACA Branch.

         3. Both Federal and Non-Federal Cooperators. At the end of each fiscal year, the USDA
         sets a cut-off date for PCAS processes to accommodate the Intradepartmental Transaction
         Reconciliation System (ITRS) reconciliation of agreements between USDA agencies.
         This early PCAS cycle would result in the billing for expenditures recorded after the cut-
         off date, otherwise subject to 4th quarter billing, to be delayed until the first PCAS bill
         cycle of the subsequent fiscal year. If the cut-off date is more than 5 days from the end of
         the fiscal year, the Director of ASC-B&F shall determine if the anticipated reimbursable
         revenue amount is material, based on a documented analysis of expenditures during this
         period and other contributing factors. If expenditures are deemed material or if the
         accrual for these unbilled expenditures could be easily incorporated into the accrual for
         another reimbursable revenue accrual category, a manual revenue accrual must be
         calculated and recorded; otherwise, no revenue accrual will be required.

An example of the transaction code, transaction type, and standard general ledger postings are
shown in exhibit 01.
WO AMENDMENT 6509.11m-2007-1                                                            6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                              Page 26 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                 17.1 - Exhibit 01

            Accruing Reimbursable Revenue for Non-Incident-Related Agreements:
                                 Information and Postings

                                     Trans                                                         Revenue
          Sample                     Code/       Standard General         Vendor Code               Source
        Fund Code(s)                 Trans        Ledger Postings                                   Code;
                                     Type                                                          Budget
                                                                                                    Object

NFEX - National Forest
System External
Reimbursements
                                   YE/UB        Proprietary:          For non-Federal                   0250
SPEX - State and Private                         Debit: 1310          partners,
Forestry External                               Accounts Receivable   “FS ACCRUAL”
Reimbursements                                   Credit: 5200
                                                Revenue From
FREX - Forest Research,                         Services Provided     The Common
External Reimbursements                         Budgetary:            Agreement Number
                                                 Debit: 4251          (CAN)
CMEX - Construction,                            Reimbursable and      for USDA agencies.
External Reimbursements                         Other Income
                                                Earned, Receivable    The Vendor Code
WFEX - Wildfire                                  Credit: 4221         representing the
Management, External                            Unfilled Customer     parent-level Agency
Reimbursements (non-                            Orders Without        Location Code (ALC)
incident related)                               Advance               for non-USDA
                                                                      agencies.
LAEX - Land Acquisition,
Land & Water, External
Reimbursements
WO AMENDMENT 6509.11m-2007-1                                                   6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                     Page 27 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17.2 - Methodology for Determining Revenue Accruals for Non-Incident
Reimbursable Agreements

The accrued revenue for non-incident reimbursable agreements is composed of 5 possible
categories, depending on the make-up of the whole body of active agreements on the financial
statement cut-off date. Those 5 possible segments are as follows:

         1. A summary-level accrued revenue entry equal to the actual unbilled expenditures
         recorded in individual PCAS agreements (sec. 17.21).

         2. A summary-level accrued revenue entry equal to the estimated accrued unbilled
         expenditures recorded at a high level (BFY/Fund/Program) and not to individual PCAS
         agreements. The accrued expenditures are estimated using the statistical methodology
         described in Chapter 20, as executed by ASC B&F Service-Wide Accounts Maintenance
         (SWAM) Branch (sec. 17.22).

         3. A summary level accrued revenue entry equal to the unbilled actual expenditures
         recorded temporarily at yearend by the ASC-B&F Budget Execution staff, based on
         advice from field units. The temporary recognition of these actual expenditures is
         described in the Budget and Finance Annual Closing Procedures (sec. 17.23).

         4. Separate agreement/project-specific accrued revenue entries for certain sensitive
         PCAS agreements (sec. 17.24).

         5. Separate project level accrued revenue entries for non-PCAS agreements (sec. 17.25).

Specific details describing the steps for determining revenue accrual amounts and data elements
are available in the ASC-B&F RACA Branch’s Operating Procedures.

The defining features of each category are set forth in the following subsections.

17.21 - Actual Unbilled Expenditures Recorded in PCAS Agreements

The amount of unbilled expenditures in each of the 3 sub-categories (described below) may be
immaterial in and of themselves, but the analysis method captures all subcategories and
incorporates all costs to achieve the most complete accrual.

A summary level accrual shall be recorded for unbilled expenditures in non-incident-related
PCAS reimbursable accounts, at the end of each financial statement reporting period, as follows:

         1. For all agreements in PCAS with billing cycles that don’t coincide with Forest Service
         financial statement reporting dates. PCAS billing cycle codes are displayed in exhibit 01.
WO AMENDMENT 6509.11m-2007-1                                                    6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                      Page 28 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


         2. For any of the cycles where a bill will not be issued because the Last Bill Date falls
         within the affected bill cycle interval causing the agreement to be overlooked by the
         PCAS billing cycle. A revenue accrual is needed if ASC-B&F employees did not
         mitigate the occurrence of these timing issues by manually creating a bill or changing the
         PCAS bill cycle so that PCAS creates the bill.

         3. For unbilled expenditures recorded at the agreement level detail in late September,
         after the PCAS cut-off date but before September 30. The cut-off date is determined each
         year by USDA Office of the Chief Financial Officer (OCFO) and published in the USDA
         yearend close-out instructions.

Additional information about the accrual entry is displayed in exhibit 02.
WO AMENDMENT 6509.11m-2007-1                                                           6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                             Page 29 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                 17.21 - Exhibit 01

                                      PCAS BILLING CYCLE CODES

PCAS                                                     Accrual Needed for Reimbursable Revenue
Cycle      Billing Frequency                                            Yes or No
Code
 M    Monthly                                     No
 Q    Quarterly
      (end of December, March,                    No
      June, September)
  S   Semi-annual                                 Yes, accrue at December and June financial statement
      (end of March, September)                   reporting dates
 A    Annual                                      Yes, accrue at December, March, and June financial
      (end of September)                          statement reporting dates
  E   End of Project                              Yes, accrue at December, March, June, and September
                                                  financial statement reporting dates



                                                 17.21 - Exhibit 02

                      Additional Information About the Summary Level Entry
                         for Unbilled Expenditures in PCAS Agreements


      Accounting Level                              Timing                            Reversal


The related revenue accrual           The entry of accrued revenue       The revenue accrual shall be
shall be recorded in region           occurs 2-3 days prior to the       reversed within the first 10 days
17 unit 01 at the                     end of the quarter for the first   of the subsequent accounting
BFY/fund/program level.               three quarters. For the fourth     period. For the 4th quarter or
                                      quarter, the entry occurs          Period 13 accrual, the reversal is
                                      between the PCAS cut-off           made in the 1st accounting period
                                      date and the end of the            of the new fiscal year.
                                      quarter.
WO AMENDMENT 6509.11m-2007-1                                                   6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                     Page 30 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17.22 - Statistically Estimated Unbilled Expenditures Not Recorded in PCAS
Agreements

A summary-level accrued revenue entry shall be prepared for the amount of accrued
expenditures unpaid that is estimated using a statistical accrual methodology, managed by ASC-
B&F Service-Wide Accounts Maintenance (SWAM) Branch (Chapter 20). The accrual is
recorded at a high level (BFY/Fund/Program) and not to individual PCAS agreements

Accrued revenue shall be recorded for unbilled estimated accrued expenditures in non-incident-
related reimbursable accounts, at the end of each financial statement reporting period, as follows:

         1. A high-level statistical methodology generates accrued estimated expenditures at the
         end of each quarter. When this methodology produces an entry in reimbursable funds, a
         manual accrual of revenue related to those estimated accrued expenditures must be
         recorded. The manual entry is necessary because the estimated accrued expenditures are
         not recorded at the agreement level detail which would allow PCAS to perform the
         billing process.

         2. The accrual for unbilled estimated accrued expenditures undergoes a materiality
         analysis by fund and program before it is recorded. Therefore, the funds related to the
         PCAS agreements must be in sufficient amounts to pass that materiality analysis,
         otherwise, those funds will have no estimated expenditures accrued and there will be no
         related accrued revenue.

         3. The revenue accrual is contingent upon the level of accounting detail provided in the
         backup support to the statistical accrual analysis. For example, accruals for non-Federal
         reimbursables can be identified by the program codes NFXN, FRXN, and so forth. These
         accruals are recorded at vendor summary code level, FS ACCRUAL. For Federally
         funded reimbursables, citing program codes NFXF, FRXF, and so forth, job code level
         detail is required to enable the determination of the funding customer. Federal revenue
         must be recorded at vendor level detail to enable intra-governmental elimination entries.

Additional information about the accrual entry is displayed in exhibit 01.
WO AMENDMENT 6509.11m-2007-1                                                                6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                                  Page 31 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                 17.22 - Exhibit 01

          Additional Information About the Summary Level Accrued Revenue Entry
          for Statistically Estimated Unbilled Expenditures Not in PCAS Agreements


         Accounting Level                        Timing                               Reversal


The related revenue accrual               The entry of               The revenue accrual shall be reversed
shall be recorded in region 17            accrued revenue            within the first 10 days of the subsequent
unit 01 at the                            occurs 1-3 days            accounting period. For the 4th quarter or
BFY/fund/program level.                   prior to the end of        Period 13 accrual, the reversal is made in
                                          the quarter.               the 1st accounting period of the new fiscal
                                                                     year.
WO AMENDMENT 6509.11m-2007-1                                                    6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                      Page 32 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17.23 - Actual Unbilled Expenditures Not Recorded in PCAS Agreements

This summary level revenue accrual entry occurs only when the Forest Service makes fiscal
year-end entries to temporarily recognize actual expenditures that weren’t recorded in the
standard way in time for yearend cut-off. At fiscal yearend, some actual expenditures are not
recorded in the standard way because of the timing of the transactions and the related computer
systems’ yearend cut-off dates. These unbilled actual expenditures are transactions such as the
following:

         1. Purchase card purchases (goods and services delivered) that haven’t appeared yet in
         the Purchase Card Management System (PCMS),

         2. The current year portion of unfinished travel that crosses accounting periods,

         3. Rejected Integrated Acquisition System (IAS) transactions, and

         4. Employee cash awards not processed in time for entry into the standard accounting
         system.

In accordance with the Annual Yearend Closing Instructions, units submit documentation for
these transactions and the ASC-B&F Budget Execution staff records them using standard
vouchers.

Depending on volume, Budget Execution may record these expenditures at the region, unit, job
code level or the region, unit, program code level. Any of these expenditures recorded at the job
code level will have their related revenue accrual prepared using the methodology in
section 17.21 instead of section 17.23. However, if any of the expenditures are recorded to a
high level such as BFY/fund/program, a manual revenue accrual equal to those expenditures is
recorded if deemed material. The manual entry is necessary because the expenditures are not
recorded at the agreement level detail which would allow PCAS to perform the billing process.

The ASC B&F RACA Branch Chief shall coordinate with other ASC B&F staffs regarding the
volume of these actual expenditures and the program accounting codes affected, to determine if
any revenue accrual is necessary. If so, a summary-level revenue accrual entry equal to the
actual unbilled expenditures shall be recorded at a high level (BFY/Fund/Program) and not to
individual PCAS agreements.

Additional information about the accrual entry is displayed in exhibit 01.
WO AMENDMENT 6509.11m-2007-1                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                            Page 33 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE


                                                 17.23 - Exhibit 01

   Additional Information About the Summary Level Revenue Accrual Necessary Due to
                    Manual Temporary Entry of Actual Expenditures


     Accounting Level                               Timing                           Reversal


The related revenue                The entry of accrued revenue          The revenue accrual shall be
accrual shall be recorded          occurs 1-3 days prior to the end of   reversed within the first 10 days
at the same accounting             the quarter. If an obligation         of the subsequent accounting
level used for the                 recorded in Period 13 is materially   period. For the 4th quarter or
temporary entry of the             significant to warrant a revenue      Period 13 accrual, the reversal
actual expenditures.               accrual, the revenue accrual entry    is made in the 1st accounting
                                   occurs prior to the Period 13 cut-    period of the new fiscal year.
                                   off date.
WO AMENDMENT 6509.11m-2007-1                                                             6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                               Page 34 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17.24 - Agreement/Project Specific Entries for Sensitive PCAS Agreements

Accrued revenue shall be recorded for unbilled expenditures in that small portion of PCAS
agreements that require entries to be recorded at the agreement-level detail. These agreement-
specific revenue accruals are essential to maintain special tracking and handling of high-profile,
large-dollar agreements such as that with the Bureau of Land Management for conservation work
mandated by the Southern Nevada Public Lands Management Act.

Additional information about the accrual entry is displayed in exhibit 01.


                                                 17.24 - Exhibit 01

       Additional Information About the Separate Agreement/Project-Specific Entries
                         for Certain Sensitive PCAS Agreements


               Accounting Level                                      Timing                Reversal


The related revenue accrual shall be                   The entry of accrued       The revenue accrual shall
recorded at project level detail                       revenue occurs 2-5         be reversed at the time the
(Region/Unit and Job Code) with                        days prior to the end of   actual billing is processed.
agreement number in description field.                 the quarter.
WO AMENDMENT 6509.11m-2007-1                                                          6509.11m_10
EFFECTIVE DATE: 09/06/2007                                                            Page 35 of 35
DURATION: This amendment is effective until superseded or removed.

                          FSH 6509.11m - SERVICEWIDE ACCRUAL HANDBOOK
                             CHAPTER 10 - ACCRUING EARNED REVENUE



17.25 - Separate Project-Level Accrued Revenue Entry for Non-PCAS Agreements

Accrued revenue shall be recorded for unbilled expenditures in that small portion of agreements
that are not managed by the PCAS system. Additional information about the accrual entry is
displayed in exhibit 01.


                                                 17.25 - Exhibit 01

                  Additional Information About the Separate Project Level Entry
                                   for Non-PCAS Agreements


          Accounting Level                                Timing                     Reversal


The related revenue accrual shall            The entry of accrued         The revenue accrual shall be
be recorded at project level detail          revenue occurs 2 to 5 days   reversed at the time the actual
(Region, Unit, and Job Code).                prior to the end of the      manual billing is processed.
                                             quarter.

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:1
posted:9/29/2012
language:Unknown
pages:35