![](media/image1.jpeg){width="7.864583333333333in" height="10.5in"}

# **This page intentionally left blank.**  {#this-page-intentionally-left-blank. .Heading---TOC}

# **Table of Contents** {#table-of-contents .Heading---TOC}

Table of Contents ii

Table of Figures v

Listed Abbreviations vi

Foreword ix

Introduction 1-1

1.1 Background 1-1

1.2 Purpose and Scope of This Document 1-3

1.3 Standard Federal Financial Business Processes Within Context of Core

Requirements 1-5

1.4 Summary of Standard Business Process Initiatives 1-6

Funds Management Processes 2-1

2.0 Funds Management Processes 2-1

2.1 Budgetary Authority Process 2-6

2.1.1 Budgetary Resources 2-7

2.1.2 Record Application of Budgetary Resources (Apportionment) 2-12

2.2 Funds Distribution 2-16

2.2.1 Allotment Distribution 2-16

2.2.1.1 Allotment for (Direct) Non-Anticipated, Non-Reimbursable

Funding 2-17

2.2.1.2 Allotment for Anticipated Reimbursable Funding 2-20

2.2.1.3 Allotment for Anticipated Non-Reimbursable Funding 2-25

2.2.2 Sub-Allotment Distribution 2-30

2.2.3 Lower Level Distribution 2-35

2.3 Funds Control Process 2-40

2.3.1 Establishing Commitments and Obligations for Goods and Services
2-41

2.3.2 Establishing Obligations Not Requiring Commitment 2-50

2.3.3 Funds Check Prior to Obligation 2-55

2.3.4 Unexpired Funds Validation and Verification 2-59

2.3.5 Expired Funds Validation and Verification 2-65

Payment Management Processes 3-1

3.0 Payment Management Processes 3-1

3.1 Receipt and Acceptance of Goods 3-4

3.2 Receipt and Acceptance of Services 3-11

3.3 Accounts Payable and Invoicing Processes 3-18

3.3.1 Invoice Entry 3-18

3.3.2 Invoice Processing 3-25

3.3.3 Credit Memo 3-31

3.4 Disbursements 3-34

3.4.1 Disbursements for Bulk Files (ACH/EFT, CCD, CCD+. CTX, and

Checks) 3-34

3.4.2 Disbursements for Small Volume and Same or Next Day Payments 3-45

3.5 Returned Payments -- ACH, Check, Same Day 3-53

3.6 Data Objects and Data Elements 3-57

Receivables Management Processes 4-1

4.0 Receivables Management Processes 4-1

4.1 Establish Accounts Receivable Due From The Public 4-6

4.2 Analyze Accounts Receivable 4-13

4.3 Billing 4-19

4.4 Collection of Receipts 4-22

4.5 Application of Receipts 4-27

4.6 Delinquent Debt Processes 4-38

4.6.1 Dunning 4-38

4.6.2 Delinquent Debt Collection 4-48

4.7 Allowance for Loss on Accounts Receivable 4-54

4.8 Write-off of Accounts Receivable 4-57

4.9 Issue Credit Memo 4-64

4.10 Return of a Negotiable Instrument 4-68

4.11 Waiver of Interest, Administrative Costs, and Penalties 4-71

4.12 Installment Plans 4-74

Reimbursables Management Processes 5-1

5.0 Reimbursables Management Processes 5-1

Reports Management Processes 6-1

6.0 Reports Management Processes 6-1

Appendix A -- FMLoB Business Approach A-1

Appendix B -- FMLoB Glossary B-1

Appendix C -- Business Process Flowcharts Symbols and Definitions C-1

Funds Management Process Flows C-3

Payment Management Process Flows C-17

Receivables Management Process Flows C-27

Appendix D -- Core Financial System Requirements D-1

Funds Management Core Financial System Requirements D-1

Payment Management Core Financial System Requirements D-5

Receivables Management Core Financial System Requirements D-9

Appendix E -- Core System Requirements Matrix E-1

Appendix F -- Financial Management Laws and Regulations F-1

Appendix G - Contributors G-1

Table G-1 Funds Management Contributors G-1

Table G-2 Payment Management Contributors G-2

Table G-3 Receivables Management Contributors G-3

# **Table of Figures**  {#table-of-figures .Heading---TOC}

Figure 1-1: Standard Federal Financial Business Process Vision/Approach
1-4

Figure 1-2: System Functions 1-5

Figure 1-3: Summary of Standard Business Process Relationships 1-7

# **Listed Abbreviations** {#listed-abbreviations .Heading---TOC}

ACH Automated Clearing House

ALC Agency Location Code

BETC Business Event Type Code

BFELoB Budget Formulation and Execution Line of Business

BRM Business Reference Model

CCA Clinger-Cohen Act

CCD Cash Concentration Disbursement

CCD+ Cash Concentration Disbursement Plus Addendum

CCLR Claims Collection Litigation Report

CCR Central Contractor Registry

CFO Chief Financial Officer

CFR Code of Federal Regulations

CFSR Core Financial System Requirements

CGAC Common Government-wide Accounting Classification Structure

CIO Chief Information Officer

CO Certifying Officer

COR Contracting Officer's Representative

COTR Contracting Officer's Technical Representative

CPIC Capital Planning and Investment Control

CTX Corporate Trade Exchange

CVFR Current Value of Funds Rate

DCIA Debt Collection Improvement Act of 1996

DEO Data Entry Operator

DMM Debt Management Module

DMS Department of Treasury, Debt Management Service

DOJ Department of Justice

DUNS Dun and Bradstreet Number

EDI Electronic Data Interchange

EFT Electronic Funds Transfer

FAR Federal Acquisition Regulation

FASAB Federal Accounting Standards Advisory Board

FBWT Fund Balance With Treasury

FEA Federal Enterprise Architecture

FEAF Federal Enterprise Architecture Framework

FFMIA Federal Financial Management Improvement Act of 1996

FFMSR Federal Financial Management Systems Requirements

FI Financial Institution

FISMA Federal Information Security Management Act of 2002

FMFIA Federal Managers' Financial Integrity Act of 1982

FMS Financial Management Service

FOMF Financial Organization Master File

FPA Federal Program Agencies

FRB Federal Reserve Bank

FSIO Financial Systems Integration Office

GAO Government Accountability Office

GMRA Government Management Reform Act of 1994

GPRA Government Performance and Results Act of 1993

GSA General Services Administration

ID Identification

IDD International Direct Deposit

IFF Industrial Funding Fee

IPAC Intra-Governmental Payment and Collection

IPP Internet Payment Platform

IRM Information Resource Management

IRS Internal Revenue Service

IT Information Technology

JFMIP Joint Financial Management Improvement Program

NACHA National Automated Clearing House Association

NIST National Institute of Standards and Technology

OCR Optical Character Recognition

OFFM Office of Federal Financial Management (OMB)

OMB Office of Management and Budget

OPM Office of Personnel Management

PMA President's Management Agenda

PMD Payment Management Disbursing

PO Purchase Order

PPA Prompt Payment Act

PPD Prearranged Payment and Deposit

PPD+ Prearranged Payment and Deposit Plus Addendum

RITS Retirement and Insurance Transfer System

RTN Routing Transit Number

SFFAS Statements of Federal Financial Accounting Standards

SFFBP Standard Federal Financial Business Processes

SPS Secure Payment System

SSP Shared Service Provider

TAFS Treasury Appropriation Fund Symbol

TAS Treasury Account Symbol

TFM Treasury Financial Manual

TGA Treasury General Account

TOP Treasury Offset Program

TPA Trading Partner Agreement

TRACS Treasury Receivable Accounting and Collection System

TROR Treasury Report on Receivables and Debt Collection Activities

TRS Treasury Reporting System

USSGL U.S. Standard General Ledger

# **Foreword** {#foreword .Heading---TOC}

To meet the objectives of the Federal Financial Management Improvement
Act of 1996 and OMB Circular A-127, Federal agencies must improve the
cost, quality, and performance of Federal financial management systems
by leveraging common standards, shared solutions, and implementing other
government-wide reforms that foster efficiencies in Federal financial
operations. Critical to these efforts is the definition and
implementation of standard business processes for core financial
management functions across government. Through standardization, Federal
entities are better positioned to implement lower cost, lower risk, and
higher performing financial management solutions.

The *Standard Federal Financial Business Processes (SFFBP) Document* is
designed to standardize common financial business activities and
processes to ensure that financial managers assess programs and make
decisions with timely and accurate data. This publication was developed
for the Federal financial community, vendors who support financial
management system implementations, and contractors of financial
management system products in full cooperation with the Chief Financial
Officer (CFO) Act Agencies, and other contributors.

# Introduction

## **Background**

> Over the years, the Federal government has committed significant
> resources toward implementing Federal financial management systems
> that meet its needs for timely, useful, and reliable financial
> information. Agencies are making progress, but additional improvement
> is needed. To facilitate the move toward modern financial systems,
> standardizing financial management was identified as one of several
> government-wide initiatives to improve the management of the Federal
> government.
>
> The financial management standardization initiative leverages shared
> solutions and technology investments across government by integrating
> agency operations and information technology investments by
> normalizing the underlying business processes of Federal agencies. OMB
> Circular A-127 prescribes policies and standards for executive
> departments and agencies to follow in managing financial management
> systems. A core financial system within the financial management
> system must be commercial off-the-shelf and certified by the Financial
> Systems Integration Office (FSIO). Previously, agencies had to
> implement systems that had been certified by FSIO as meeting the Core
> Financial System Requirements, but could configure those systems to
> support their agency-specific business processes. In the future, the
> certification process will include both the Core Financial Systems
> Requirements and the Standard Financial Processes (as defined in this
> document). Shared Service Providers will subsequently implement the
> FISO tested and certified software which will include CGAC and the
> standard business processes and will be released as the Federal
> configuration.
>
> One of the measures of success for this initiative is to implement
> financial management processes and systems that comply with the
> Federal Financial Management Improvement Act of 1996 (FFMIA). FFMIA
> requires that agency systems comply with: Federal financial management
> system requirements, applicable accounting standards, and United
> States Standard General Ledger (USSGL) at the transaction level.
>
> In the short term, the standardization effort will help agencies:

-   *Promote a universal understanding of standard government financial
    business processes.* Establishing standard financial business
    processes for Federal agencies promotes a uniform way of doing the
    government's financial business. The defined processes and data no
    longer will vary from agency to agency or system to system. Use of
    standard financial business processes reduces training and start-up
    time for agency financial personnel transferring from one agency to
    another. Standard processes make it easier for managers to determine
    where controls need to be placed or implemented in the processing of
    accounting events.

-   *Incorporate best business practices.* A number of agencies are in
    the process of moving from *bureau*-level systems to enterprise-wide
    systems. Each implementation begins with a task of defining the
    processes used within the agency. Standard business processes
    provide a uniform framework, reduce the burden of making decisions
    on how to conduct business, and facilitate the implementation
    process.

> In the long term, the standardization effort will help agencies:

-   *Aid in the evolution of financial management throughout the Federal
    government.* There is a logical sequence of steps to an overall
    standardization strategy for Federal financial management that
    includes common business processes, data definitions, and accounting
    classification elements. The standard government financial business
    processes are building blocks to a future state that will take a
    number of years to implement.

-   *Mitigate the risks associated with system implementation by
    providing a uniform starting point for configuration.* FSIO
    certified vendors will provide a Core Financial System that not only
    incorporates the Standard Federal Financial Business Processes
    (SFFBP) (as defined in this document), but also includes the system
    configuration that was used to complete and pass the certification
    test. This pre-configured software will significantly reduce the
    time and effort it takes an agency to implement the Core Financial
    System, as well as minimize the risk of an incorrect configuration
    that could result in the inoperability of the Core Financial System.

-   *Ease the transition when an agency moves to a new financial
    management system or shared service provider.* Considerable effort
    is usually dedicated to defining business processes when an agency
    moves to a new Core Financial System. The SFFBP establish uniform
    procedures that will be used across the Federal government. The use
    of these standard processes will significantly reduce the amount of
    process mapping and training that will be required when migrating to
    a new Core Financial System.

-   *Facilitate data exchange among an agency's financial systems.* The
    SFFBP are an integral step towards establishing standard data
    exchanges (interfaces) between an agency's Financial Management
    System, which contains the Core Financial System, and an agency's
    mixed systems (feeder systems). An additional benefit of the SFFBP
    is establishment of standard data exchanges (interfaces) between an
    agency's Financial Management System and the central agencies for
    external regulatory reporting, e.g., Treasury Financial Management
    Service (FMS).

> The *Standard Business Processes Document* encompasses applicable
> established financial standards used in the Federal government. The
> policy and governance for classifying the financial effects of the
> government's business operations are as follows:

-   Office of Management and Budget (OMB), including the Office of
    Federal Financial Management (OFFM), Circulars, Bulletins and
    Memorandums;

-   Department of the Treasury, Treasury Financial Manual (TFM),
    including the USSGL and Managing Federal Receivables Guidance;

-   Financial Systems Integration Office (FSIO) on behalf of the FSIO
    Transformation Team, a working-group of the Chief Financial Officers
    (CFO) Council, Core Financial Systems Requirements Document;

-   Federal Accounting Standards Advisory Board (FASAB) Statements of
    Federal Financial Accounting Standards (SFFAS) and Concepts
    Implementation Guides; and

-   Government Accountability Office (GAO) Auditing Standards.

> Policies, procedures, and requirements detailed in authoritative
> guidance are not repeated in this document, rather they are cited as
> they apply to specific steps within the processes.

## **Purpose and Scope of This Document**

> This document presents government-wide common processes and
> activities, standard business rules, and data exchanges for core
> financial business processes. Standardizing business processes across
> the Federal government identifies opportunities to streamline
> processes and unify work across the agencies and within the Federal
> government's financial management domain. The outcome will be a more
> citizen-centered, customer-focused government that maximizes
> technology investments to better achieve mission outcomes.
>
> The Standard Federal Financial Business Processes (SFFBP) include:

-   Sequenced activities for core business processes;

-   Business rules governing the process steps;

-   Data elements and definitions related to these business processes
    (e.g., information contained on an obligation -- document source,
    document number, item number, price per item); and

-   Relationships among the data elements as they exist in the actual
    business activities.

> The SFFBP document is intended for use by the Federal financial
> management community to provide guidance for implementing efficient
> business processes that are consistent throughout the Federal
> government. Primary users will include accountants, budget analysts,
> financial and program staff, software vendors, and contractors who
> support financial management system implementations.
>
> This document supports the financial management standardization vision
> as part of the standardization foundation, as highlighted in the
> following diagram.
>
> ![](media/image2.jpeg){width="6.4944444444444445in"
> height="4.394444444444445in"}

Figure 1-1: Standard Federal Financial Business Process Vision/Approach

> The subsequent chapters in this document describe the business process
> flows for core financial business processes, the associated business
> rules, along with representative USSGL pro-forma entries for the
> process described. The document will also provide the standard data
> elements and business rules for the harmonized exchange of data
> between the common administrative systems (e.g., Grants, Acquisitions,
> Travel, and Payroll) and the core financial system.
>
> Appendices include the financial management standardization vision and
> approach to developing SFFBP, a glossary of standard terms and
> definitions used in this document, a list of relevant laws and
> regulations affecting Federal financial management and standard
> business processes, and acknowledgement of those who contributed to
> this document.

## **Standard Federal Financial Business Processes Within Context of Core Requirements**

> Among the *Federal Financial Management System Requirement (*FFMSR)
> documents is the *Core Financial System* *Requirements*. It sets forth
> requirements for the core functions that must be supported in all
> Federal financial management core systems. The core system functions
> are as follows:
>
> ![](media/image3.jpeg){width="5.393055555555556in"
> height="3.173611111111111in"}

Figure 1-2: System Functions

> Core financial systems provide specific functional capabilities
> necessary for managing a general ledger, controlling spending, making
> payments, managing receivables, measuring costs, reconciling the
> agency's Fund Balance with Treasury, and reporting in the Federal
> environment.
>
> The financial management standardization effort has identified the
> following business processes for standardization:

-   Funds Management;

-   Payment Management;

-   Receivables Management;

-   Reimbursables (which actually crosses all of the above processes);
    and

-   Reporting.

## **Summary of Standard Business Process Initiatives**

> The financial management standardization effort includes four business
> processes: Funds Management, Payment Management, Receivables
> Management, and Reimbursables Management. The business processes are
> presented in chapters, which depict their respective processes in
> flowcharts. Following each flowchart are descriptions of the
> processes, steps and related business rules. The standard process
> steps reflect best practices in an electronic environment, sound
> internal controls, and compliance with Office of Federal Financial
> Management (OFFM) Core Financial System Requirements (CFSR).
>
> The chapters of the financial management standardization business
> process document are described as follows:

-   Funds Management. This chapter includes processes related to the
    establishment of budgetary authority, funds distribution and funds
    control. The Funds Management processes describe the recording of
    the Apportionment and Reapportionment Request (SF 132) and assist
    agencies in complying with all applicable financial management
    statutes, regulations, and requirements. In addition, the steps
    outlined provide standard processes for ensuring effective Funds
    Control policy.

-   Payment Management. This chapter includes processes from requisition
    to payment for commercial contracts and small acquisitions disbursed
    by Treasury. The Payment Management processes described include
    goods/services receipt and acceptance, invoice entry and processing,
    and disbursement. The processes are written assuming best practices,
    which include, but are not limited to: electronic processing,
    information routing, review and approval, and separation of duties.
    In addition, the standard processes included ensure effective cash
    management.

-   Receivables Management. The Receivables Management processes were
    developed in accordance with Treasury's *Managing Federal
    Receivables* guidance. The chapter includes processes from
    establishment of a receivable due from the public to the application
    of receipts. The Receivables Management processes described include
    establishment and analysis of receivable, including billing and
    collection activities. The processes are written assuming best
    practices, which include, but are not limited to: cost effective
    debt collection and performance measures. In addition, the standard
    processes included ensure: customer responsiveness and effective
    cash management.

-   Reimbursables Management. Development of this chapter is not yet
    complete and will be included in a future release. Note: This
    process contains elements of the Funds Management, Payment
    Management and Receivables Management processes.

-   Reports. Development of this chapter is not yet complete and will be
    included in a future release. The format of this chapter has not
    been determined.

> The diagram below depicts Payment Management, Receivables Management,
> and Reimbursables Management as processes within the Core Financial
> System under the parameters of Funds Management that are facilitated
> through the use of the Common Government-wide Accounting
> Classification structure. Reporting is used throughout the Core
> Financial System to provide management with accurate and timely
> information needed to support business decisions, financial statements
> and effective program operation.
>
> ![](media/image4.wmf){width="7.240972222222222in"
> height="5.536111111111111in"}

Figure 1-3: Summary of Standard Business Process Relationships

> See Appendix C -- Business Process Flowcharts, Symbols, and
> Definitions for an enlarged version of the flowchart
>
> **This page intentionally left blank.**

# **Funds Management Processes**

## **Funds Management Processes**

A strong Funds Management mechanism ensures that Federal dollars are
managed properly in the operation of all Core Financial Systems and
provides an acceptable level of accountability. The Antideficiency Act
requires that the head of each executive agency, subject to the approval
of the President, prescribe by regulation a system of administrative
control not inconsistent with accounting procedures. The system shall be
designed to:

1.  Restrict obligations and payments from each appropriation or fund
    account to the lower of the amount provided in the account (31
    USC 1341) or amount of the apportionment or reapportionment (31 USC
    1514); and

2.  Enable the head of the agency to fix responsibility for an
    obligation or payment exceeding the amount provided in the account
    or the apportionment.

The President delegated this authority to the Director of the Office of
Management and Budget (OMB). OMB issues instructions on the
administrative control of funds in OMB Circular A-11. The terminology in
OMB Circular A-11 shall be used in the Funds Management processes.

When an appropriation bill is enacted into law, funds are not
automatically made available to agencies. The Antideficiency Act
requires that OMB subdivide the appropriation and any other budgetary
resources. OMB uses the apportionment and sub-apportionment schedule (SF
132) to review and subdivide the appropriation. This is intended to
promote prudent fiscal management by preventing agencies from spending
all available resources before the end of the fiscal year.

Apportionment requests are submitted to OMB by the agencies on an SF
132, "Apportionment and Reapportionment Schedule." OMB reviews the
requests and takes action. The Standard Form (SF) 132 has two sections:
The first, Budgetary Resources, details the amounts available to the
agency. The second, Application of Budgetary Resources, displays how the
agency intends to use the resources: Category A (quarterly); Category B
(by program); and Category C (planned for obligation after the current
fiscal year). Please note that Apportionments are updated throughout the
year. The SF 132 is a key legal document. It represents the President's
disposition of available resources within an appropriation of fund
account.

Apportionments establish legal spending limits for the appropriation.
These spending limits must be reflected in the Core Financial System so
that the spending limitations can be enforced systematically. Entering
these spending limits into the Core Financial System can be accomplished
by Budget and/or Finance personnel as defined within an agency.

The approved SF 132 becomes the basis for funds control within the
agency. However, agencies can further subdivide budgetary resources to
lower levels of the organization.

Prior to making these internal subdivisions, agencies typically review
their planned resource situation for the upcoming year. The result is a
blueprint (sometimes called "operating plan") for use of the available
resources.

The Funds Management processes provide safeguards that ensure the
distribution, obligation, and payments of funds within budgetary
limitations. Specifically, these processes verify the availability of:

-   Allotted and suballoted funds for commitment;

-   Committed, allotted, and suballotted funds for obligations; and

-   Obligated, allotted and suballoted funds for payment (cash outlay).

The Funds Management processes described in this chapter are intended to
detail the funds control placed on the amounts located on lines 1 thru
12 of the SF 132 and to assist agencies in complying with all applicable
financial management statutes, regulations, and requirements. In
addition, the steps outlined in this document provide standard processes
for ensuring effective Funds Control policy.

The flowcharts and process steps for the Funds Management Processes
detailed in this chapter are:

-   FM 2.1 - Budgetary Authority Process

-   FM 2.1.1 - Budgetary Resources. This section describes the recording
    of lines 1 thru 6 of the SF 132 in the Core Financial System. Once
    recorded in the Core Financial System, these budgetary resource
    amounts are available for the recording of apportionments.

-   FM 2.1.2 - Record Application of Budgetary Resources
    (Apportionment). This section describes the recording of lines 8
    thru 11 of the SF 132 in the Core Financial System. Once recorded in
    the Core Financial System, these amounts may be further sub-divided
    by an agency into allotments, sub-allotments and any other lower
    level distribution of funds.

-   FM 2.2 - Funds Distribution

-   FM 2.2.1 - Allotment Distribution

-   FM 2.2.1.1 - Allotment for (Direct) Non-Anticipated,
    Non-Reimbursable Funding. This section addresses the allotment
    process for direct or non-anticipated, non-reimbursable resources.
    Obligations or expenditures cannot be incurred until an allotment is
    made by the agency.

-   FM 2.2.1.2 - Allotment for Anticipated Reimbursable Funding. This
    section addresses the allotment process for anticipated reimbursable
    funding. Obligations cannot be incurred if reimbursable work is
    performed on behalf of a non-federal customer until an advance is
    received or working capital is provided.

-   FM 2.2.1.3 - Allotment for Anticipated Non-Reimbursable Funding.
    This section addresses the allotment processes for anticipated
    non-reimbursable resources. Anticipated amounts are not available
    for reuse until they are actually recovered. Offsetting collections
    are typically credited directly to expenditure accounts where they
    are generally available for obligation and outlay; however, any type
    of spending is prohibited unless there is cash on hand.

-   FM 2.2.2 - Sub-Allotment Distribution. This section addresses the
    sub-allotment process for allotted resources; however, this process
    is not required and is optional based upon agency practice. If
    sub-allotments are used by an agency, obligations or expenditures
    cannot be incurred until a sub-allotment is made by the agency.

-   FM 2.2.3 - Lower Level Distribution. This section addresses the
    lower level of budgetary distribution, which may be referred to as:
    allocations, sub-allocations, allowances, sub-allowances, or
    spending/operating plans. The lower level budgetary distributions
    are often based on program, projects, or organization/office and
    contribute to the administrative control of funds.

-   FM 2.3 - Funds Control Process

-   FM 2.3.1 - Establishing Commitments and Obligations for Goods and
    Services. This section describes the procedures necessary to prepare
    an obligation, for acquisitions or services, which has associated
    prior commitment accounting.

-   FM 2.3.2 - Establishing Obligations Not Requiring Commitment. This
    section describes the procedures necessary to prepare an obligation
    for acquisitions that does not require commitment accounting.

-   FM 2.3.3 - Funds Check Prior to Obligation. This section applies to
    acquisitions for which commitments and obligations are used and
    describes the procedures taken when performing a funds check prior
    to obligation of funds.

-   FM 2.3.4 - Unexpired Funds Validation and Verification. This section
    addresses the process of validating and verifying the availability
    of funds for spending transactions.

-   FM 2.3.5 - Expired Funds Validation and Verification. This section
    addresses the process of validating and verifying the availability
    of expired funds for the recording of previously unrecorded
    obligations and/or to make legitimate update adjustments to existing
    obligations until the expired authority is cancelled and the expired
    account is closed.

**Note:** The Focus Group for this effort decided that Treasury Warrants
would not be included in this document, as they are, in effect, a
verification of the appropriation (a Treasury FACTS II edit) and not an
integral element of Funds Control.

Included in the scope of this chapter are the following:

-   The Budgetary Resources (process of recording an agency's budgetary
    resources to support the establishment of available funding) and
    Funds Distribution (the process of establishing the available funds
    within the Core Financial System (see OMB Circular A-127 for the
    definition of a Core Financial System)) which are used for funds
    validation and verification.

-   The Funds Management business process standards enforce the
    distribution, obligation and payment of funds within budgetary
    limitations as established through the funds execution processes.

The following flowchart depicts the sequence and inter-relations of the
Funds Management processes:

![](media/image5.wmf){width="6.491666666666666in"
height="5.0368055555555555in"}

## 

##  **Budgetary Authority Process**

Establishing budgetary authority is the beginning of the budget
execution process. This process records an agency's budgetary resources
and supports the establishment of legal budgetary limitations within the
agency, including appropriation warrants, apportionments,
reapportionments, transfer allocations and continuing resolutions. It
also supports the establishment of funding to agencies that are not
subject to apportionment.

This section documents the recording of the apportionment and
reapportionment request (SF 132) information in the Core Financial
System in order to establish budgetary resources and the divisions of
amounts per the Apportionment Schedule.

Budgetary resources are made available as follows:

1.  Apportionment of unobligated balances carried forward and available
    to the Treasury Appropriation Fund Symbol (TAFS). This is approved
    on an SF 132 from OMB.

2.  Apportionment of amounts made available under an interim Continuing
    Resolution (CR). This approval is issued by an OMB Bulletin and may
    be followed subsequently by an SF 132 from OMB.

3.  Apportionment of amounts made available under a regular annual
    appropriations act. This is automatically apportioned by authority
    cited in OMB Circular A-11 upon enactment and is followed by an SF
    132 from OMB.

An agency's Budget Office, or the CFO in concurrence with the Budget
Office, will issue official documentation that will be used to establish
budgetary resources (e.g., enacted appropriations, anticipated
resources, prior year recoveries) as well as apportionment divisions.
This official documentation may be in the form of an actual approved SF
132, an agency internal "mock" SF 132, a CR letter, or a resources
letter. The form of official documentation will be dependent upon an
agency's internal policies and procedures. However, the intentional use
of the 'agency internal official document' is to establish the resources
and controls that support the distribution of funding in the agency's
Core Financial System.

Budget Authority is recorded in the Core Financial System for multiple
uses:

-   To establish availability of budgetary resources for use by agency
    program offices to obligate and expend in support of agency
    missions; and

-   Once the appropriate distribution has been recorded in the Core
    Financial System, funds control verification can be performed on any
    spending chain transaction, i.e., commitment, obligation and
    payment.

## **Budgetary Resources**

The Budgetary Resources process illustrates the recording of resources
as defined on lines 1 thru 6 of the SF 132. Examples of resources
recorded are: enacted appropriations; spending authority from offsetting
collections; and recoveries of prior year obligations.

When agencies establish budgetary resources in their financial system,
they typically employ use of an internal fund code, the agency-assigned
code value for a fund. It enables the derivation of other accounting
classification elements used to further classify funds. The internal
fund code may be used to derive the account identification codes
required for reporting externally to Treasury and OMB. The Common
Government-wide Accounting Classification (CGAC) structure establishes
several standard practices for segregating three types of internal funds
below the Treasury Account Symbol (TAS) level:

-   Funds that have multiple apportionment categories;

-   Funds that have both discretionary and mandatory authority; and

-   Funds that have both direct and reimbursable authority.

For guidance on CGAC, see FSIO's *Federal Financial Management
Standards,* *Common Government-wide Accounting Classification
Structure*.

Once recorded in the Core Financial System, these budgetary resource
amounts are then available for the recording of apportionments.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.1.1 -- Budgetary Resources Flowchart {#fm-2.1.1-budgetary-resources-flowchart .unnumbered}

![](media/image6.wmf){width="6.490277777777778in"
height="4.723611111111111in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Funds Management Budgetary Resource process steps are described as
follows:

+--------+--------------+----------------+-----------------+-----------+
| Step   | Step Name    | Step           | Business Rules  | CFSR Req. |
| ID     |              | Description    |                 |           |
+========+==============+================+=================+===========+
| FM     | Enter        | Enter          | Enter the       | FMC-01    |
| 2      | Budgetary    | Budgetary      | budgetary       |           |
| .1.1.1 | Resources    | Resources in   | resource        | FMC-03    |
|        | from Agency  | the Core       | breakdowns      |           |
|        | D            | Financial      | prescribed by   | FMC-07    |
|        | ocumentation | System at the  | OMB CIRCULAR    |           |
|        |              | United States  | A-11 for the SF | FMC-08    |
|        |              | Standard       | 132 or official |           |
|        |              | General Ledger | documentation   | FMC-09    |
|        |              | (USSGL) level  | (e.g.,          |           |
|        |              | and to record  | carryover,      |           |
|        |              | FACTS II       | enacted         |           |
|        |              | attributes to  | appropriation,  |           |
|        |              | begin the      | anticipated     |           |
|        |              | chain of       | resources, and  |           |
|        |              | monitoring     | contract        |           |
|        |              | resources.     | authority).     |           |
|        |              |                |                 |           |
|        |              |                | Official        |           |
|        |              |                | documentation   |           |
|        |              |                | from the Budget |           |
|        |              |                | or CFO Office   |           |
|        |              |                | may take the    |           |
|        |              |                | form of a CR    |           |
|        |              |                | letter, actual  |           |
|        |              |                | or mock SF132,  |           |
|        |              |                | resource letter |           |
|        |              |                | or other such   |           |
|        |              |                | official agency |           |
|        |              |                | documentation.  |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Enter FACTS  | Enter          | Only the FACTS  | GLC-02    |
| 2      | I & II Data  | appropriate    | II attributes   |           |
| .1.1.2 | Elements     | attributes and | not inherent in | GLC-03    |
|        |              | domain values  | the internal    |           |
|        |              | for applicable | fund code are   | SMB-01    |
|        |              | USSGL accounts | entered.        |           |
|        |              | as they relate |                 |           |
|        |              | to resources   | Appropriate     |           |
|        |              | recorded       | edits and       |           |
|        |              | (e.g., public  | validation      |           |
|        |              | law,           | rules have been |           |
|        |              | supplemental   | configured for  |           |
|        |              | a              | current USSGL   |           |
|        |              | ppropriation). | crosswalks.     |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Certify      | After          | This step       | TLE-01    |
| 2      | Entry        | budgetary      | ensures a       |           |
| .1.1.3 |              | resource(s)    | separation of   | TLE-02    |
|        |              | are entered    | duties for      |           |
|        |              | into the       | review and      | TLE-03    |
|        |              | system,        | approval of     |           |
|        |              | approval must  | transaction     | TLE-04    |
|        |              | be performed   | prior to        |           |
|        |              | by appropriate | recording in    | TLE-06    |
|        |              | personnel.     | the General     |           |
|        |              |                | Ledger.         | TLE-07    |
|        |              |                |                 |           |
|        |              |                |                 | TLE-08    |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Record in    | After the      | The budgetary   | GLB-01    |
| 2      | the Core     | budgetary      | resource        |           |
| .1.1.4 | Financial    | resource(s)    | entries are     | GLC-01    |
|        | System       | are entered    | recorded using  |           |
|        | General      | into the       | the USSGL       | GLC-05    |
|        | Ledger       | system and     | Account         |           |
|        |              | approved by    | Transaction     | GLC-07    |
|        |              | appropriate    | Listing         |           |
|        |              | personnel, the | provided in the |           |
|        |              | transaction is | current         |           |
|        |              | recorded in    | Treasury        |           |
|        |              | the Core       | Financial       |           |
|        |              | Financial      | Manual (TFM).   |           |
|        |              | System General |                 |           |
|        |              | Ledger.        | Examples        |           |
|        |              |                | include, but    |           |
|        |              |                | are not limited |           |
|        |              |                | to, the         |           |
|        |              |                | following       |           |
|        |              |                | transaction     |           |
|        |              |                | codes from the  |           |
|        |              |                | current TFM:    |           |
|        |              |                |                 |           |
|        |              |                | TFM-A104 To     |           |
|        |              |                | record the      |           |
|        |              |                | enactment of    |           |
|        |              |                | appropriations. |           |
|        |              |                |                 |           |
|        |              |                | TFM-A702 To     |           |
|        |              |                | record          |           |
|        |              |                | anticipated     |           |
|        |              |                | reimbursements. |           |
|        |              |                |                 |           |
|        |              |                | TFM-A138 To     |           |
|        |              |                | record          |           |
|        |              |                | estimated       |           |
|        |              |                | recoveries of   |           |
|        |              |                | prior-year      |           |
|        |              |                | obligations.    |           |
|        |              |                |                 |           |
|        |              |                | **Note:** If a  |           |
|        |              |                | reversing entry |           |
|        |              |                | is being        |           |
|        |              |                | recorded,       |           |
|        |              |                | internal checks |           |
|        |              |                | and edits must  |           |
|        |              |                | ensure that the |           |
|        |              |                | net amount      |           |
|        |              |                | (e.g., original |           |
|        |              |                | amount +/- any  |           |
|        |              |                | prior           |           |
|        |              |                | adjustments) is |           |
|        |              |                | greater than or |           |
|        |              |                | equal to zero.  |           |
|        |              |                | Reversals can   |           |
|        |              |                | never exceed    |           |
|        |              |                | the total       |           |
|        |              |                | amount recorded |           |
|        |              |                | for the pro     |           |
|        |              |                | forma           |           |
|        |              |                | transaction     |           |
|        |              |                | code referenced |           |
|        |              |                | in the original |           |
|        |              |                | transaction(s). |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Exempt from  | Check to see   | Internal agency |           |
| 2      | Ap           | if the         | documentation   |           |
| .1.1.5 | portionment? | budgetary      | would include a |           |
|        |              | resource is    | list of agency  |           |
|        |              | exempt from    | funds that are  |           |
|        |              | Apportionment. | exempt from     |           |
|        |              |                | Apportionment.  |           |
|        |              |                |                 |           |
|        |              |                | Verify that     |           |
|        |              |                | this list of    |           |
|        |              |                | agency funds    |           |
|        |              |                | that are exempt |           |
|        |              |                | from            |           |
|        |              |                | Apportionment   |           |
|        |              |                | is always       |           |
|        |              |                | consistent with |           |
|        |              |                | OMB's list.     |           |
+--------+--------------+----------------+-----------------+-----------+

##  **Record Application of Budgetary Resources (Apportionment)**

The Apportionment process documents the recording of the amounts from
lines 8 thru 11 of the SF 132, "Application of Budgetary Resources". The
apportionment divides amounts that are available for obligation by
specific time periods (typically by quarters, but could be for an entire
fiscal year), activities, projects, object classes or a combination
thereof. The apportionment may be further sub-divided by an agency into
allotments, sub-allotments and any other lower level distribution of
funds.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.1.2 -- Record Application of Budgetary Resources (Apportionment) Flowchart {#fm-2.1.2-record-application-of-budgetary-resources-apportionment-flowchart .unnumbered}

## ![](media/image7.wmf){width="6.490277777777778in" height="4.723611111111111in"} {#section-1 .unnumbered}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Record Availability of Resources process steps are described as
follows:

+---------+-------------+----------------+----------------+----------+
| Step ID | Step Name   | Step           | Business Rules | CFSR     |
|         |             | Description    |                | Req.     |
+=========+=============+================+================+==========+
| FM      | Enter       | Record lines 8 | The budgetary  | FMC-01   |
| 2.1.2.1 | Ap          | thru 11 of the | resource       |          |
|         | portionment | SF 132.        | authority      | FMC-04   |
|         | Detail      |                | apportioned by |          |
|         | (A          |                | OMB and        | FMC-07   |
|         | vailability |                | available for  |          |
|         | of          |                | allotment      | FMC-08   |
|         | Resources)  |                | entries are    |          |
|         |             |                | recorded using | FMC-09   |
|         |             |                | the USSGL      |          |
|         |             |                | Account        | FMC-13   |
|         |             |                | Transaction    |          |
|         |             |                | Listing        |          |
|         |             |                | provided in    |          |
|         |             |                | the current    |          |
|         |             |                | TFM.           |          |
|         |             |                |                |          |
|         |             |                | The            |          |
|         |             |                | anticipated    |          |
|         |             |                | resources      |          |
|         |             |                | apportioned    |          |
|         |             |                | but not        |          |
|         |             |                | available for  |          |
|         |             |                | use until they |          |
|         |             |                | are realized   |          |
|         |             |                | for            |          |
|         |             |                | anticipated    |          |
|         |             |                | resources in   |          |
|         |             |                | programs       |          |
|         |             |                | subject to     |          |
|         |             |                | apportionment  |          |
|         |             |                | entries are    |          |
|         |             |                | recorded using |          |
|         |             |                | the USSGL      |          |
|         |             |                | Account        |          |
|         |             |                | Transaction    |          |
|         |             |                | Listing        |          |
|         |             |                | provided in    |          |
|         |             |                | the current    |          |
|         |             |                | TFM.           |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Identify if | User           |                |          |
| 2.1.2.2 | ap          | identifies the |                |          |
|         | portionment | resource as    |                |          |
|         | as Actual   | Actual or      |                |          |
|         | or          | Anticipated.   |                |          |
|         | Anticipated | If             |                |          |
|         |             | apportionment  |                |          |
|         |             | is             |                |          |
|         |             | anticipated,   |                |          |
|         |             | check whether  |                |          |
|         |             | resource is    |                |          |
|         |             | realized yet.  |                |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Determine   | User enters    |                | FMC-04   |
| 2.1.2.3 | Ap          | the internal   |                |          |
|         | portionment | fund code for  |                | GLC-02   |
|         | Internal    | the            |                |          |
|         | Fund Code   | apportionment. |                | GLC-03   |
|         |             | The accounting |                |          |
|         |             | classification |                |          |
|         |             | elements are   |                |          |
|         |             | typically      |                |          |
|         |             | derived not    |                |          |
|         |             | entered.       |                |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Enter       | Enter          | Category A     |          |
| 2.1.2.4 | Category A  | apportionment  | apportionments |          |
|         | Ap          | by fiscal      | are entered by |          |
|         | portionment | quarter.       | fiscal quarter |          |
|         |             |                | only with no   |          |
|         |             |                | further        |          |
|         |             |                | breakdown. Per |          |
|         |             |                | OMB Circular   |          |
|         |             |                | A-11           |          |
|         |             |                | instructions   |          |
|         |             |                | for section    |          |
|         |             |                | 1208, Category |          |
|         |             |                | A              |          |
|         |             |                | apportionments |          |
|         |             |                | distribute     |          |
|         |             |                | budgetary      |          |
|         |             |                | resources by   |          |
|         |             |                | fiscal         |          |
|         |             |                | quarter.       |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Enter       | Enter          | Category B     | SMA-03   |
| 2.1.2.5 | Category B  | apportionment  | apportionments |          |
|         | Ap          | by period.     | are entered by |          |
|         | portionment |                | activity,      |          |
|         |             |                | beginning and  |          |
|         |             |                | end date,      |          |
|         |             |                | program,       |          |
|         |             |                | project, and   |          |
|         |             |                | object class   |          |
|         |             |                | as applicable. |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Enter       | Enter          | Enter as       |          |
| 2.1.2.6 | Category C  | apportionment  | available in   |          |
|         | Ap          | to be          | future fiscal  |          |
|         | portionment | available in   | year.          |          |
|         |             | future fiscal  |                |          |
|         |             | year.          | Note: OMB      |          |
|         |             |                | designates     |          |
|         |             |                | Category C as  |          |
|         |             |                | apportioned    |          |
|         |             |                | for future     |          |
|         |             |                | use.           |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Amount or   | Is the         | Verify that    | SMB-11   |
| 2.1.2.7 | d           | budgetary      | this amount is |          |
|         | istribution | resource less  | less than or   | SMB-12   |
|         | less than   | than or equal  | equal to Line  |          |
|         | or equal to | to total       | 7 (Total       | SMB-13   |
|         | Total       | budgetary      | Budgetary      |          |
|         | Budgetary   | resources      | Resources) of  | SMC-09   |
|         | Resources?  | previously     | the SF132.     |          |
|         |             | recorded?      |                |          |
|         |             |                | For a reversal |          |
|         |             |                | entry, verify  |          |
|         |             |                | that the       |          |
|         |             |                | amount of the  |          |
|         |             |                | reversal does  |          |
|         |             |                | not exceed the |          |
|         |             |                | credit balance |          |
|         |             |                | in USSGL       |          |
|         |             |                | accounts       |          |
|         |             |                | 4510 -         |          |
|         |             |                | A              |          |
|         |             |                | pportionments/ |          |
|         |             |                | 4590 --        |          |
|         |             |                | Apportionments |          |
|         |             |                | Unavailable.   |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Research    | Budget/Finance | Designated     | SMB-16   |
| 2.1.2.8 | and Resolve | will resolve   | personnel      |          |
|         |             | the funding    | resolve        | SMC-09   |
|         |             | issue.         | applicable     |          |
|         |             |                | funding issues |          |
|         |             |                | in accordance  |          |
|         |             |                | with           |          |
|         |             |                | applicable     |          |
|         |             |                | rules,         |          |
|         |             |                | regulations,   |          |
|         |             |                | and agency     |          |
|         |             |                | guidelines.    |          |
+---------+-------------+----------------+----------------+----------+
| FM      | Certify     | After the      | This step      | SMC-09   |
| 2.1.2.9 | Entry       | budgetary      | ensures a      |          |
|         |             | resource is    | separation of  | TLE-01   |
|         |             | entered into   | duties for     |          |
|         |             | the system, it | review and     | TLE-02   |
|         |             | has to be      | approval of    |          |
|         |             | approved by    | transaction    | TLE-03   |
|         |             | appropriate    | prior to       |          |
|         |             | personnel.     | recording in   | TLE-04   |
|         |             |                | the General    |          |
|         |             |                | Ledger.        | TLE-06   |
|         |             |                |                |          |
|         |             |                |                | TLE-07   |
|         |             |                |                |          |
|         |             |                |                | TLE-08   |
+---------+-------------+----------------+----------------+----------+
| FM      | Record in   | After the      | After the      | GLB-01   |
| 2       | Core        | budgetary      | entry passes   |          |
| .1.2.10 | Financial   | resource is    | validation     | GLC-05   |
|         | System      | entered into   | edits, the     |          |
|         | General     | the system and | applicable     | GLC-07   |
|         | Ledger      | approved by    | entry is       |          |
|         |             | appropriate    | recorded.      |          |
|         |             | personnel, the |                |          |
|         |             | transaction is | Examples       |          |
|         |             | recorded in    | include, but   |          |
|         |             | the General    | are not        |          |
|         |             | Ledger.        | limited to,    |          |
|         |             |                | the following  |          |
|         |             |                | transaction    |          |
|         |             |                | codes from the |          |
|         |             |                | current TFM:   |          |
|         |             |                |                |          |
|         |             |                | TFM-A116 To    |          |
|         |             |                | record         |          |
|         |             |                | budgetary      |          |
|         |             |                | authority      |          |
|         |             |                | apportioned by |          |
|         |             |                | OMB and        |          |
|         |             |                | available for  |          |
|         |             |                | allotment.     |          |
|         |             |                |                |          |
|         |             |                | TFM-A118 To    |          |
|         |             |                | record         |          |
|         |             |                | anticipated    |          |
|         |             |                | resources      |          |
|         |             |                | apportioned    |          |
|         |             |                | but not        |          |
|         |             |                | available for  |          |
|         |             |                | use until they |          |
|         |             |                | are realized   |          |
|         |             |                | for            |          |
|         |             |                | anticipated    |          |
|         |             |                | resources in   |          |
|         |             |                | programs       |          |
|         |             |                | subject to     |          |
|         |             |                | apportionment. |          |
+---------+-------------+----------------+----------------+----------+

## **Funds Distribution**

Funds distribution is the part of the budget execution cycle in which
legally apportioned resources are distributed within an agency to
support missions, programs, and other objectives. The process
establishes multiple levels of budgetary control by allotting and
sub-allotting apportioned resources for agency management.

## 

## **Allotment Distribution**

An Allotment is an authorization within an agency (either from the
agency head or some other authorized individual) to lower levels of the
organization to incur obligations or make expenditures within a
specified amount. An agency would make these allotments in accordance
with the general apportionment requirements as stated in OMB Circular
A-11. The allotment would also be within the limitations established as
a part of recording the apportionment in the Core Financial System in
order to comply with the Antideficiency Act, which prohibits incurring
any obligation or making any expenditure in excess of an apportionment
or reapportionment. This section describes the distribution of funds as
a part of the allotment processes for:

> 2.2.1.1 (Direct) Non-Anticipated, Non-Reimbursable funding;
>
> 2.2.1.2 Anticipated Reimbursable funding; and
>
> 2.2.1.3 Anticipated Non-Reimbursable funding.

## 2.2.1.1 **Allotment for (Direct) Non-Anticipated, Non-Reimbursable Funding**

Non-Anticipated, Non-Reimbursable funding refers to those resources that
are directly appropriated through Congress and are prescribed in both
OMB Circular A-11 and the USSGL portion of the Treasury Financial
Manual. Specifically, obligations or expenditures cannot be incurred
until an allotment is made by the agency. An Allotment Advice or Advice
of Allotment document is the vehicle for the Program offices and/or
other internal administrative organization structure of available
funding.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.2.1.1 -- Allotment for (Direct) Non-Anticipated, Non-Reimbursable Funding Flowchart {#fm-2.2.1.1-allotment-for-direct-non-anticipated-non-reimbursable-funding-flowchart .unnumbered}

![](media/image8.wmf){width="6.490277777777778in"
height="4.569444444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Allotment for Direct Resources process steps are described as
follows:

+---------+-------------+---------------+----------------+----------+
| Step ID | Step Name   | Step          | Business Rules | CFSR     |
|         |             | Description   |                | Req.     |
+=========+=============+===============+================+==========+
| FM      | Enter       | Use official  | Record control | SMB-25   |
| 2.      | Control     | requests      | total, then    |          |
| 2.1.1.1 | (Allotment) | (i.e.,        | distribute as  |          |
|         | Total       | allotment     | necessary.     |          |
|         | (Category A | advice) to    |                |          |
|         | or B)       | create        |                |          |
|         |             | allotment and |                |          |
|         |             | enter control |                |          |
|         |             | (allotment)   |                |          |
|         |             | total.        |                |          |
|         |             |               |                |          |
|         |             | The control   |                |          |
|         |             | total is      |                |          |
|         |             | often at the  |                |          |
|         |             | header level  |                |          |
|         |             | of the record |                |          |
|         |             | and is        |                |          |
|         |             | established   |                |          |
|         |             | to validate   |                |          |
|         |             | the line      |                |          |
|         |             | level         |                |          |
|         |             | entries.      |                |          |
+---------+-------------+---------------+----------------+----------+
| FM      | Enter       | Enter         |                | FMD-01   |
| 2.      | Allotment   | Allotment to  |                |          |
| 2.1.1.2 | D           | be            |                |          |
|         | istribution | distributed.  |                |          |
+---------+-------------+---------------+----------------+----------+
| FM      | Accounting  | Reference     | Verify         | CGAC     |
| 2.      | cla         | appropriate   | combinations   |          |
| 2.1.1.3 | ssification | accounting    | of accounting  | Co       |
|         | elements    | c             | classification | mpliance |
|         | valid?      | lassification | elements are   |          |
|         |             | elements.     | valid and      | SMA-03   |
|         |             |               | active.        |          |
|         |             |               |                | SMB-11   |
|         |             |               |                |          |
|         |             |               |                | SMB-12   |
|         |             |               |                |          |
|         |             |               |                | SMB-13   |
|         |             |               |                |          |
|         |             |               |                | SMB-30   |
|         |             |               |                |          |
|         |             |               |                | SMC-09   |
+---------+-------------+---------------+----------------+----------+
| FM      | Stop and    | If the        | Designated     | SMB-16   |
| 2.      | Resolve     | accounting    | personnel      |          |
| 2.1.1.4 | Issues      | c             | resolve        | SMC-09   |
|         |             | lassification | applicable     |          |
|         |             | elements are  | issues in      |          |
|         |             | not valid,    | accordance     |          |
|         |             | B             | with           |          |
|         |             | udget/Finance | applicable     |          |
|         |             | will resolve  | rules,         |          |
|         |             | the issue.    | regulations,   |          |
|         |             |               | and agency     |          |
|         |             |               | guidelines.    |          |
+---------+-------------+---------------+----------------+----------+
| FM      | Amount or   | Determine if  | Agencies are   |          |
| 2.      | D           | the amount or | required to    |          |
| 2.1.1.5 | istribution | distribution  | control funds  |          |
|         | less than   | is less than  | at a detail    |          |
|         | or equal to | or equal to   | level (line 8  |          |
|         | the         | the           | on SF 132).    |          |
|         | App         | A             |                |          |
|         | ortionment? | pportionment. |                |          |
|         |             | This is the   |                |          |
|         |             | A             |                |          |
|         |             | ntideficiency |                |          |
|         |             | check.        |                |          |
+---------+-------------+---------------+----------------+----------+
| FM      | Certify     | After the     | This step      | SMC-09   |
| 2.      | Entry       | allotment(s)  | ensures a      |          |
| 2.1.1.6 |             | are entered   | separation of  | TLE-01   |
|         |             | into the      | duties for     |          |
|         |             | system, it    | review and     | TLE-02   |
|         |             | has to be     | approval of    |          |
|         |             | approved by   | transaction    | TLE-03   |
|         |             | appropriate   | prior to       |          |
|         |             | personnel.    | posting to the | TLE-04   |
|         |             |               | General        |          |
|         |             |               | Ledger.        | TLE-06   |
|         |             |               |                |          |
|         |             |               |                | TLE-07   |
|         |             |               |                |          |
|         |             |               |                | TLE-08   |
+---------+-------------+---------------+----------------+----------+
| FM      | Record in   | After the     | After the      | GLB-01   |
| 2.      | General     | budgetary     | entry passes   |          |
| 2.1.1.7 | Ledger      | resource is   | validation     | GLC-05   |
|         |             | entered into  | edits, the     |          |
|         |             | the system    | applicable     | GLC-07   |
|         |             | and approved  | entry is       |          |
|         |             | by            | recorded.      |          |
|         |             | appropriate   |                |          |
|         |             | personnel,    | Examples       |          |
|         |             | the           | include, but   |          |
|         |             | transaction   | are not        |          |
|         |             | is recorded   | limited to,    |          |
|         |             | in the        | the following  |          |
|         |             | General       | transaction    |          |
|         |             | Ledger.       | codes from the |          |
|         |             |               | current TFM:   |          |
|         |             |               |                |          |
|         |             |               | TFM-A116 To    |          |
|         |             |               | record         |          |
|         |             |               | budgetary      |          |
|         |             |               | authority      |          |
|         |             |               | apportioned by |          |
|         |             |               | OMB and        |          |
|         |             |               | available for  |          |
|         |             |               | allotment.     |          |
|         |             |               |                |          |
|         |             |               | TFM-A118 To    |          |
|         |             |               | record         |          |
|         |             |               | anticipated    |          |
|         |             |               | resources      |          |
|         |             |               | apportioned    |          |
|         |             |               | but not        |          |
|         |             |               | available for  |          |
|         |             |               | use until they |          |
|         |             |               | are realized   |          |
|         |             |               | for            |          |
|         |             |               | anticipated    |          |
|         |             |               | resources in   |          |
|         |             |               | programs       |          |
|         |             |               | subject to     |          |
|         |             |               | apportionment. |          |
+---------+-------------+---------------+----------------+----------+

##  2.2.1.2 **Allotment for Anticipated Reimbursable Funding**

The recording of reimbursable resources is prescribed in both OMB
Circular A-11 and the USSGL portion of the Treasury Financial Manual.
Specifically, obligations cannot be incurred if reimbursable work is
performed on behalf of a non-federal customer until an advance is
received or working capital is provided by law. An anticipated
reimbursable is recognized by the performing agency (seller) when a
future order from a buying agency is reasonably expected. The basis of
an anticipated reimbursable is the seller's reasonable expectation
rather than the existence of a valid order at the time the buyer's
expectation is realized.

After a valid order is received from the Federal buying agency
(customer), the performing agency (seller) may incur obligations against
the order if the order is valid---i.e., the performing agency receives a
signed agreement from the Federal ordering agency and the Federal
ordering agency has recorded an obligation in the amount of the order
against its budgetary resources in the form of an undelivered order in
the ordering agency\'s account.

The Allotment for Anticipated Reimbursable Funding process flow and
corresponding step descriptions and business rules incorporate best
business practices in order to verify and validate the following:

-   Allotments for reimbursable activity should not be made unless
    appropriate obligation authority has been received, i.e., an
    accepted order or agreement from the Federal customer(s); and

-   Total reimbursable allotments, in accounting terms, should not be
    greater than the total of unfilled customer orders recorded during
    the fiscal year to date (e.g., debits in USSGL accounts 4221 --
    Unfilled Customer Orders without Advance, 4222 -- Unfilled Customer
    Orders with Advance, 4251 -- Reimbursements and Other Income Earned
    -- Receivable, and Reimbursements and Other Income Earned -
    Collected).

An Allotment Advice or Advice of Allotment document is the vehicle for
informing the Program offices and/or other internal administrative
organization structure of available funding.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.2.1.2 -- Allotment for Anticipated Reimbursable Funding Flowchart {#fm-2.2.1.2-allotment-for-anticipated-reimbursable-funding-flowchart .unnumbered}

## ![](media/image9.wmf){width="6.490277777777778in" height="4.569444444444445in"} {#section-3 .unnumbered}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Allotment for Anticipated Reimbursable process steps are described
as follows:

+---------+-------------+----------------+-----------------+-----------+
| Step ID | Step Name   | Step           | Business Rules  | CFSR Req. |
|         |             | Description    |                 |           |
+=========+=============+================+=================+===========+
| FM      | Enter       | Enter control  | Enter control   | SMB-25    |
|         | Control     | total for      | total, then     |           |
| 2.      | (Allotment) | Allotment      | distribute as   |           |
| 2.1.2.1 | Total       | Advice.        | necessary.      |           |
|         | (Category A |                |                 |           |
|         | or B)       | The control    |                 |           |
|         |             | total is often |                 |           |
|         |             | at the header  |                 |           |
|         |             | level of the   |                 |           |
|         |             | record and is  |                 |           |
|         |             | established to |                 |           |
|         |             | validate the   |                 |           |
|         |             | line level     |                 |           |
|         |             | entries.       |                 |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Allotment   | Determine if   | For anticipated | FMC-10    |
|         | less than   | the allotment  | reimbursable    |           |
| 2.      | or equal to | is less than   | amounts, an     | FMC-12    |
| 2.1.2.2 | the balance | or equal to    | agency cannot   |           |
|         | of unfilled | the balance of | obligate        | SMB-11    |
|         | customer    | the unfilled   | greater than    |           |
|         | order?      | customer       | the balance of  | SMB-12    |
|         |             | order.         | the accepted or |           |
|         |             |                | unfilled        | SMB-13    |
|         |             |                | customer        |           |
|         |             |                | orders.         | SMC-09    |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Record      | Record the     |                 | FMD-01    |
|         | Allotment   | Allotment      |                 |           |
| 2.      | D           | distribution   |                 |           |
| 2.1.2.3 | istribution | per the advice |                 |           |
|         |             | document.      |                 |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Cannot      | If the         | Designated      | FMD-05    |
|         | Allot.      | allotment is   | personnel       |           |
| 2.      |             | greater than   | resolve         | SMB-16    |
| 2.1.2.4 | Stop and    | the balance of | applicable      |           |
|         | Resolve     | the unfilled   | funding issues  | SMC-09    |
|         |             | customer       | in accordance   |           |
|         |             | order,         | with applicable |           |
|         |             | Budget/Finance | rules,          |           |
|         |             | will resolve   | regulations,    |           |
|         |             | the funding    | and agency      |           |
|         |             | issue.         | guidelines      |           |
|         |             |                | (e.g., FAR,     |           |
|         |             |                | agency policies |           |
|         |             |                | and             |           |
|         |             |                | procedures).    |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Accounting  | Reference      | Verify          | CGAC      |
|         | cla         | appropriate    | combinations of |           |
| 2.      | ssification | accounting     | accounting      | C         |
| 2.1.2.5 | elements    | classification | classification  | ompliance |
|         | valid?      | elements.      | elements are    |           |
|         |             |                | valid and       | SMA-03    |
|         |             |                | active.         |           |
|         |             |                |                 | SMB-11    |
|         |             |                |                 |           |
|         |             |                |                 | SMB-12    |
|         |             |                |                 |           |
|         |             |                |                 | SMB-13    |
|         |             |                |                 |           |
|         |             |                |                 | SMB-30    |
|         |             |                |                 |           |
|         |             |                |                 | SMC-09    |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Stop and    | If the         | Designated      | SMA-05    |
|         | Resolve     | accounting     | personnel       |           |
| 2.      | Issues      | classification | resolve         | SMA-06    |
| 2.1.2.6 |             | elements are   | applicable      |           |
|         |             | not valid or   | issues in       | SMB-16    |
|         |             | active,        | accordance with |           |
|         |             | Budget/Finance | applicable      | SMC-09    |
|         |             | will resolve   | rules,          |           |
|         |             | the issue.     | regulations,    |           |
|         |             |                | and agency      |           |
|         |             | If the amount  | guidelines      |           |
|         |             | is greater     | (e.g., FAR      |           |
|         |             | than or equal  | agency policies |           |
|         |             | to the         | and             |           |
|         |             | apportionment, | procedures).    |           |
|         |             | Budget/Finance |                 |           |
|         |             | will resolve   | Allotment       |           |
|         |             | the issue.     | distribution    |           |
|         |             |                | cannot exceed   |           |
|         |             | If the         | the control     |           |
|         |             | allotment      | total.          |           |
|         |             | distribution   |                 |           |
|         |             | is greater     |                 |           |
|         |             | than the       |                 |           |
|         |             | control total  |                 |           |
|         |             | Budget/Finance |                 |           |
|         |             | will resolve   |                 |           |
|         |             | the issue.     |                 |           |
|         |             |                |                 |           |
|         |             | If the entry   |                 |           |
|         |             | is not ready   |                 |           |
|         |             | to be recorded |                 |           |
|         |             | in the General |                 |           |
|         |             | Ledger,        |                 |           |
|         |             | Budget/Finance |                 |           |
|         |             | will resolve   |                 |           |
|         |             | the issue.     |                 |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Amount or   | Determine if   | Ensure that the |           |
|         | D           | the amount or  | allotment does  |           |
| 2.      | istribution | distribution   | not exceed the  |           |
| 2.1.2.7 | less than   | is less than   | apportionment   |           |
|         | or equal to | or equal to    | as recorded in  |           |
|         | the         | the            | Step FM         |           |
|         | App         | Apportionment. | 2.1.1.4.        |           |
|         | ortionment? | This is the    |                 |           |
|         |             | Antideficiency |                 |           |
|         |             | check.         |                 |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Control     | Determine if   | Allotment       | SMB-25    |
|         | Total       | the allotment  | distribution    |           |
| 2.      | Correct?    | distribution   | cannot exceed   |           |
| 2.1.2.8 |             | is equal to    | the control     |           |
|         |             | the control    | total (e.g.,    |           |
|         |             | total. This is | all lines of    |           |
|         |             | the entry      | distribution    |           |
|         |             | approval step  | are added       |           |
|         |             | where the (1)  | together to     |           |
|         |             | accounting     | ensure they     |           |
|         |             | period is      | equal the       |           |
|         |             | checked to see | control total). |           |
|         |             | if it is open  |                 |           |
|         |             | or closed, (2) |                 |           |
|         |             | the accounting |                 |           |
|         |             | classification |                 |           |
|         |             | elements are   |                 |           |
|         |             | revalidated    |                 |           |
|         |             | and (3) the    |                 |           |
|         |             | control total  |                 |           |
|         |             | is checked.    |                 |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Certify     | After the      | This step       | TLE-01    |
|         | Entry       | budgetary      | ensures a       |           |
| 2.      |             | resource is    | separation of   | TLE-02    |
| 2.1.2.9 |             | entered into   | duties for      |           |
|         |             | the system, it | review and      | TLE-03    |
|         |             | has to be      | approval of     |           |
|         |             | approved by    | transaction     | TLE-04    |
|         |             | appropriate    | prior to        |           |
|         |             | personnel.     | recording in    | TLE-06    |
|         |             |                | the General     |           |
|         |             |                | Ledger.         | TLE-07    |
|         |             |                |                 |           |
|         |             |                |                 | TLE-08    |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Okay to     | Has the entry  | This step is to | SMC-09    |
|         | record in   | been reviewed  | verify that the |           |
| 2.2     | the General | and approved   | review and      |           |
| .1.2.10 | Ledger?     | by the         | approval of the |           |
|         |             | appropriate    | transaction     |           |
|         |             | personnel?     | prior to        |           |
|         |             |                | recording in    |           |
|         |             |                | the General     |           |
|         |             |                | Ledger has      |           |
|         |             |                | taken place.    |           |
+---------+-------------+----------------+-----------------+-----------+
| FM      | Record in   | After the      | The allotment   | GLB-01    |
|         | General     | budgetary      | entries are     |           |
| 2.2     | Ledger      | resource is    | recorded using  | GLC-05    |
| .1.2.11 |             | entered into   | the USSGL       |           |
|         |             | the system and | Account         | GLC-07    |
|         |             | approved by    | Transaction     |           |
|         |             | appropriate    | Listing         |           |
|         |             | personnel, the | provided in the |           |
|         |             | transaction is | current TFM.    |           |
|         |             | recorded in    |                 |           |
|         |             | the General    | Examples        |           |
|         |             | Ledger.        | include, but    |           |
|         |             |                | are not limited |           |
|         |             |                | to, the         |           |
|         |             |                | following       |           |
|         |             |                | transaction     |           |
|         |             |                | codes from the  |           |
|         |             |                | current TFM:    |           |
|         |             |                |                 |           |
|         |             |                | TFM-A120 To     |           |
|         |             |                | record the      |           |
|         |             |                | allotment of    |           |
|         |             |                | authority.      |           |
|         |             |                |                 |           |
|         |             |                | TFM-A122 To     |           |
|         |             |                | record the      |           |
|         |             |                | realization of  |           |
|         |             |                | previously      |           |
|         |             |                | anticipated and |           |
|         |             |                | apportioned     |           |
|         |             |                | authority for   |           |
|         |             |                | programs        |           |
|         |             |                | subject to      |           |
|         |             |                | apportionment.  |           |
+---------+-------------+----------------+-----------------+-----------+

##  2.2.1.3 **Allotment for Anticipated Non-Reimbursable Funding**

> The Allotment for Anticipated Non-Reimbursable Funding process
> addresses resources that are either 1) Anticipated Recoveries of Prior
> Year Obligations or 2) Spending authority from offsetting collections.
> Per Appendix H of OMB Circular A-11 and the USSGL Budgetary Accounting
> Guide, anticipated amounts are [not]{.underline} available for reuse
> until they are actually recovered.
>
> ***Anticipated Recoveries of Prior Year Obligations***
>
> Estimated amounts of anticipated recoveries, from either a Federal or
> non-federal source are recorded as an anticipated budgetary resource
> and apportioned on the SF 132. However, OMB Circular A-11 and the TFM
> prohibit any type of spending unless there are actual resources, i.e.,
> actual recoveries.
>
> In order to ensure proper internal controls and prevent Antideficiency
> Act violations, it is essential to verify and validate that the total
> amount of allotments from anticipated recoveries does not exceed the
> total of actual recoveries realized to date.
>
> ***Offsetting Collections***
>
> Offsetting collections are typically credited directly to expenditure
> accounts where they are generally available for obligation and outlay.
> However, OMB Circular A-11 and the TFM prohibit any type of spending
> unless there are actual resources or for offsetting collections --
> cash on hand.
>
> Anticipated collections, from either a Federal or non-federal source,
> are recorded as an anticipated budgetary resource and apportioned on
> the SF 132. Per OMB Circular A-11, this would be: (1) offsetting
> collections in a credit program or liquidating account, or (2)
> offsetting collections from (a) asset sales, (b) interest received on
> Federal securities, (c) compulsory collections for the public such as
> sales taxes, user charges, customs duties, license fees, (d)
> intergovernmental expenditure transfers with no benefit for the paying
> account, (e) donations, or (f) refunds.
>
> In order to ensure proper internal controls and prevent Antideficiency
> Act violations, it is essential to verify and validate that the total
> amount of allotments from anticipated recoveries does not exceed the
> total of actual recoveries realized to date (e.g., USSGL accounts 4260
> -- Actual Collections of Government-Type Fees and 4261 -- Actual
> Collections of Business Type Fees).
>
> An Allotment Advice or Advice of Allotment document is the vehicle for
> informing the Program offices and/or other internal administrative
> organization structure of available funding.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.2.1.3 -- Allotment for Anticipated Non-Reimbursable Funding Flowchart {#fm-2.2.1.3-allotment-for-anticipated-non-reimbursable-funding-flowchart .unnumbered}

![](media/image10.wmf){width="6.490277777777778in"
height="4.569444444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Allotment for Anticipated Non-Reimbursable process steps are
described as follows:

+--------+--------------+----------------+-----------------+-----------+
| Step   | Step Name    | Step           | Business Rules  | CFSR Req. |
| ID     |              | Description    |                 |           |
+========+==============+================+=================+===========+
| FM     | Enter        | Verify         | If obligation   | SMB-25    |
|        | Control      | realization of | is classified   |           |
| 2.2    | (Allotment)  | anticipated    | as Direct then  |           |
| .1.3.1 | Total        | resources.     | this is         |           |
|        | (Category A  |                | allotment total |           |
|        | or B)        | Enter Control  | is for          |           |
|        |              | (Allotment)    | anticipated     |           |
|        |              | Total from the | collections or  |           |
|        |              | A              | recoveries.     |           |
|        |              | dministrative, |                 |           |
|        |              | Budget and/or  | Enter control   |           |
|        |              | Program        | total, then     |           |
|        |              | Office.        | distribute as   |           |
|        |              |                | necessary.      |           |
|        |              | The control    |                 |           |
|        |              | total is often |                 |           |
|        |              | at the header  |                 |           |
|        |              | level of the   |                 |           |
|        |              | record and is  |                 |           |
|        |              | established to |                 |           |
|        |              | validate the   |                 |           |
|        |              | line level     |                 |           |
|        |              | entries.       |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Actual       | Determine if   | If the resource | SMB-11    |
|        | Collections/ | the balance of | is anticipated, |           |
| 2.2    | Recoveries   | actual         | verify that     | SMB-12    |
| .1.3.2 | greater than | collecti       | actuals (either |           |
|        | or equal to  | ons/recoveries | recoveries or   | SMB-13    |
|        | the Control  | is greater     | collections)    |           |
|        | Total?       | than or equal  | have been       | SMC-09    |
|        |              | to the control | recorded for    |           |
|        |              | total.         | the fiscal      |           |
|        |              |                | year.           |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Enter        | If the         |                 | FMD-01    |
|        | Allotment    | anticipated    |                 |           |
| 2.2    | Distribution | balance is     |                 |           |
| .1.3.3 |              | less than the  |                 |           |
|        |              | actual balance |                 |           |
|        |              | of the         |                 |           |
|        |              | collection or  |                 |           |
|        |              | recovery, then |                 |           |
|        |              | record the     |                 |           |
|        |              | allotment.     |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Cannot       | If the         | Designated      | FMD-05    |
|        | Allot.       | anticipated    | personnel       |           |
| 2.2    |              | balance is     | resolve         | SMB-16    |
| .1.3.4 | Stop and     | greater than   | applicable      |           |
|        | Resolve      | the actual     | funding issues  | SMC-09    |
|        |              | balance of the | in accordance   |           |
|        |              | collection or  | with applicable |           |
|        |              | recovery,      | rules,          |           |
|        |              | Budget/Finance | regulations,    |           |
|        |              | will resolve   | and agency      |           |
|        |              | the funding    | guidelines.     |           |
|        |              | issue.         |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Accounting   | Reference      | Verify          | CGAC      |
|        | cl           | appropriate    | combinations of | C         |
| 2.2    | assification | accounting     | accounting      | ompliance |
| .1.3.5 | elements     | classification | classification  |           |
|        | valid?       | elements.      | elements are    | SMA-03    |
|        |              |                | valid or        |           |
|        |              |                | active.         | SMB-11    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-12    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-13    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-30    |
|        |              |                |                 |           |
|        |              |                |                 | SMC-09    |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Stop and     | If the         | Designated      | SMA-05    |
|        | Resolve      | accounting     | personnel       |           |
| 2.2    | Issues       | classification | resolve         | SMA-06    |
| .1.3.6 |              | elements are   | applicable      |           |
|        |              | not valid or   | funding issues  | SMB-16    |
|        |              | active,        | in accordance   |           |
|        |              | Budget/Finance | with applicable | SMC-09    |
|        |              | will resolve   | rules,          |           |
|        |              | the issue.     | regulations,    |           |
|        |              |                | and agency      |           |
|        |              | If the amount  | guidelines      |           |
|        |              | is greater     | (e.g., FAR,     |           |
|        |              | than or equal  | agency policies |           |
|        |              | to the         | and             |           |
|        |              | apportionment, | procedures).    |           |
|        |              | Budget/Finance |                 |           |
|        |              | will resolve   |                 |           |
|        |              | the issue.     |                 |           |
|        |              |                |                 |           |
|        |              | If the         |                 |           |
|        |              | allotment      |                 |           |
|        |              | distribution   |                 |           |
|        |              | is greater     |                 |           |
|        |              | than the       |                 |           |
|        |              | control total  |                 |           |
|        |              | Budget/Finance |                 |           |
|        |              | will resolve   |                 |           |
|        |              | the issue.     |                 |           |
|        |              |                |                 |           |
|        |              | If the entry   |                 |           |
|        |              | is not ready   |                 |           |
|        |              | to be recorded |                 |           |
|        |              | in the General |                 |           |
|        |              | Ledger,        |                 |           |
|        |              | Budget/Finance |                 |           |
|        |              | will resolve   |                 |           |
|        |              | the issue.     |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Amount or    | Determine if   | Ensure that the |           |
|        | Distribution | the amount or  | allotment does  |           |
| 2.2    | less than or | distribution   | not exceed the  |           |
| .1.3.7 | equal to the | is less than   | apportionment   |           |
|        | Ap           | or equal to    | as recorded in  |           |
|        | portionment? | the            | step FM         |           |
|        |              | apportionment. | 2.1.1.4.        |           |
|        |              |                |                 |           |
|        |              | This is the    |                 |           |
|        |              | Antideficiency |                 |           |
|        |              | check.         |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Control      | Determine if   | Allotment       | SMB-25    |
|        | Total        | the allotment  | distribution    |           |
| 2.2    | Correct?     | distribution   | cannot exceed   |           |
| .1.3.8 |              | is equal to    | the control     |           |
|        |              | the control    | total (e.g.,    |           |
|        |              | total. This is | all lines of    |           |
|        |              | the entry      | distribution    |           |
|        |              | approval step  | are added       |           |
|        |              | where the (1)  | together to     |           |
|        |              | accounting     | ensure they     |           |
|        |              | period is      | equal the       |           |
|        |              | checked to see | control total). |           |
|        |              | if it is open  |                 |           |
|        |              | or closed, (2) |                 |           |
|        |              | the accounting |                 |           |
|        |              | classification |                 |           |
|        |              | elements are   |                 |           |
|        |              | revalidated,   |                 |           |
|        |              | and (3) the    |                 |           |
|        |              | control total  |                 |           |
|        |              | is checked.    |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Certify      | After the      | This step       | TLE-01    |
|        | Entry        | budgetary      | ensures a       |           |
| 2.2    |              | resource is    | separation of   | TLE-02    |
| .1.3.9 |              | entered into   | duties for      |           |
|        |              | the system,    | review and      | TLE-03    |
|        |              | the            | approval of     |           |
|        |              | transaction    | transaction     | TLE-04    |
|        |              | has to be      | prior to        |           |
|        |              | approved by    | posting to the  | TLE-06    |
|        |              | appropriate    | General Ledger. |           |
|        |              | personnel.     |                 | TLE-07    |
|        |              |                |                 |           |
|        |              |                |                 | TLE-08    |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Okay to      | Has the entry  | This step is to | SMC-09    |
|        | record in    | been reviewed  | verify that the |           |
| 2.2.   | the General  | and approved   | review and      |           |
| 1.3.10 | Ledger?      | by the         | approval of the |           |
|        |              | appropriate    | transaction     |           |
|        |              | personnel?     | prior to        |           |
|        |              |                | recording in    |           |
|        |              |                | the General     |           |
|        |              |                | Ledger has      |           |
|        |              |                | taken place.    |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Record in    | After the      | After the entry | GLB-01    |
|        | General      | budgetary      | passes          |           |
| 2.2.   | Ledger       | resource is    | validation      | GLC-05    |
| 1.3.11 |              | entered into   | edits, the      |           |
|        |              | the system and | applicable      | GLC-07    |
|        |              | approved by    | entry is        |           |
|        |              | appropriate    | recorded.       |           |
|        |              | personnel, the |                 |           |
|        |              | transaction is | Examples        |           |
|        |              | recorded in    | include, but    |           |
|        |              | the General    | are not limited |           |
|        |              | Ledger.        | to, the         |           |
|        |              |                | following       |           |
|        |              |                | transaction     |           |
|        |              |                | codes from the  |           |
|        |              |                | current TFM:    |           |
|        |              |                |                 |           |
|        |              |                | TFM-A116 To     |           |
|        |              |                | record          |           |
|        |              |                | budgetary       |           |
|        |              |                | authority       |           |
|        |              |                | apportioned by  |           |
|        |              |                | OMB and         |           |
|        |              |                | available for   |           |
|        |              |                | allotment.      |           |
|        |              |                |                 |           |
|        |              |                | TFM-A118 To     |           |
|        |              |                | record          |           |
|        |              |                | anticipated     |           |
|        |              |                | resources       |           |
|        |              |                | apportioned but |           |
|        |              |                | not available   |           |
|        |              |                | for use until   |           |
|        |              |                | they are        |           |
|        |              |                | realized for    |           |
|        |              |                | anticipated     |           |
|        |              |                | resources in    |           |
|        |              |                | programs        |           |
|        |              |                | subject to      |           |
|        |              |                | apportionment.  |           |
+--------+--------------+----------------+-----------------+-----------+

## 2.2.2 **Sub-Allotment Distribution**

Recording sub-allotted resources is prescribed in both OMB Circular A-11
and the USSGL portion of the Treasury Financial Manual as a further
agency sub-division of funds and is an [optional]{.underline} step based
upon agency business practices. Specifically, obligations or
expenditures cannot be incurred until an allotment or sub-allotment is
made by the agency. An Allotment Advice or Advice of Allotment document
is the vehicle for informing the Program offices and/or other internal
administrative organization structure of available funding.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.2.2-- Sub-Allotment Distribution Flowchart {#fm-2.2.2-sub-allotment-distribution-flowchart .unnumbered}

![](media/image11.wmf){width="6.490277777777778in"
height="4.569444444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Sub-Allotment process steps are described as follows:

+--------+--------------+----------------+----------------+-----------+
| Step   | Step Name    | Step           | Business Rules | CFSR Req. |
| ID     |              | Description    |                |           |
+========+==============+================+================+===========+
| FM     | Enter        | Enter control  | Establish      | SMB-25    |
| 2      | Control      | (              | amount of      |           |
| .2.2.1 | (Su          | Sub-Allotment) | sub-allotment  |           |
|        | b-Allotment) | total from the | appending a    |           |
|        | Total and    | A              | unique         |           |
|        | Allotment    | dministrative, | sub-allotment  |           |
|        | Advice       | Budget and /or | identifier to  |           |
|        |              | Program        | an allotment   |           |
|        |              | Office.        | advice.        |           |
|        |              |                |                |           |
|        |              | The control    | Total of all   |           |
|        |              | total is often | distribution   |           |
|        |              | at the header  | on this        |           |
|        |              | level of the   | sub-allotment  |           |
|        |              | record and is  | must not       |           |
|        |              | established to | exceed control |           |
|        |              | validate the   | total.         |           |
|        |              | line level     |                |           |
|        |              | entries.       | Overall        |           |
|        |              |                | sub-allotments |           |
|        |              |                | cannot exceed  |           |
|        |              |                | allotment.     |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | Enter        | Official       | Based upon     | FMD-01    |
| 2      | S            | requests       | allotment      |           |
| .2.2.2 | ub-Allotment | (i.e.,         | pools from     | FMD-03    |
|        | Distribution | appropriate    | referenced     |           |
|        |              | allotment      | allotment      |           |
|        |              | advice) create | advice (i.e.,  |           |
|        |              | sub-allotment. | second level   |           |
|        |              |                | of the         |           |
|        |              | Enter          | organization)  |           |
|        |              | sub-allotment  |                |           |
|        |              | amounts for    |                |           |
|        |              | categories to  |                |           |
|        |              | be control.    |                |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | Accounting   | Reference      | Verify         | CGAC      |
| 2      | cl           | appropriate    | combinations   |           |
| .2.2.3 | assification | accounting     | of accounting  | C         |
|        | elements     | classification | classification | ompliance |
|        | valid?       | elements.      | elements are   |           |
|        |              |                | valid and      | SMA-03    |
|        |              |                | active.        |           |
|        |              |                |                | SMB-11    |
|        |              |                |                |           |
|        |              |                |                | SMB-12    |
|        |              |                |                |           |
|        |              |                |                | SMB-13    |
|        |              |                |                |           |
|        |              |                |                | SMB-30    |
|        |              |                |                |           |
|        |              |                |                | SMC-09    |
+--------+--------------+----------------+----------------+-----------+
| FM     | Stop and     | If the         | Designated     | SMA-05    |
| 2      | Resolve      | accounting     | personnel      |           |
| .2.2.4 | Issues       | classification | resolve        | SMA-06    |
|        |              | elements not   | applicable     |           |
|        |              | valid,         | funding issues | FMD-05    |
|        |              | Budget/Finance | in accordance  |           |
|        |              | must resolve   | with           | SMB-16    |
|        |              | the issue.     | applicable     |           |
|        |              |                | rules,         | SMC-09    |
|        |              | If the amount  | regulations,   |           |
|        |              | is greater     | and agency     |           |
|        |              | than or equal  | guidelines     |           |
|        |              | to the         | (e.g., FAR,    |           |
|        |              | Allotment,     | agency         |           |
|        |              | Budget/Finance | policies and   |           |
|        |              | must resolve   | procedures)    |           |
|        |              | the issue.     |                |           |
|        |              |                |                |           |
|        |              | If the         |                |           |
|        |              | Allotment      |                |           |
|        |              |                |                |           |
|        |              | distribution   |                |           |
|        |              | does not equal |                |           |
|        |              | the control    |                |           |
|        |              | total,         |                |           |
|        |              | Budget/Finance |                |           |
|        |              | must resolve   |                |           |
|        |              | the issue.     |                |           |
|        |              |                |                |           |
|        |              | Determined     |                |           |
|        |              | that the entry |                |           |
|        |              | is not ready   |                |           |
|        |              | to be recorded |                |           |
|        |              | in the General |                |           |
|        |              | Ledger.        |                |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | S            | Determine if   | Ensure that    |           |
| 2      | ub-Allotment | the            | this           |           |
| .2.2.5 | less than or | sub-allotment  | sub-allotment  |           |
|        | equal to the | is less than   | and other      |           |
|        | Allotment?   | or equal to    | sub-allotments |           |
|        |              | the referenced | do not exceed  |           |
|        |              | allotment      | the allotment. |           |
|        |              | advice. This   |                |           |
|        |              | is the         |                |           |
|        |              | Antideficiency |                |           |
|        |              | check.         |                |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | Control      | Determine if   | Allotment      | SMB-25    |
| 2      | Total        | the allotment  | distribution   |           |
| .2.2.6 | Correct?     | distribution   | cannot exceed  |           |
|        |              | is equal to    | the control    |           |
|        |              | the control    | total (e.g.,   |           |
|        |              | total. This is | all lines of   |           |
|        |              | the entry      | distribution   |           |
|        |              | approval step  | are added      |           |
|        |              | where the (1)  | together to    |           |
|        |              | accounting     | ensure they    |           |
|        |              | period is      | equal the      |           |
|        |              | checked to see | control        |           |
|        |              | if it is open  | total).        |           |
|        |              | or closed, (2) |                |           |
|        |              | the accounting |                |           |
|        |              | classification |                |           |
|        |              | elements are   |                |           |
|        |              | revalidated,   |                |           |
|        |              | and (3) the    |                |           |
|        |              | control total  |                |           |
|        |              | is checked.    |                |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | Certify      | After the      | This step      | TLE-01    |
| 2      | Entry        | su             | ensures a      |           |
| .2.2.7 |              | b-allotment(s) | separation of  | TLE-02    |
|        |              | are entered    | duties for     |           |
|        |              | into the       | review and     | TLE-03    |
|        |              | system, the    | approval of    |           |
|        |              | transaction    | transaction    | TLE-04    |
|        |              | must be        | prior to       |           |
|        |              | approved by    | recording in   | TLE-06    |
|        |              | appropriate    | the General    |           |
|        |              | personnel.     | Ledger.        | TLE-07    |
|        |              |                |                |           |
|        |              |                |                | TLE-08    |
+--------+--------------+----------------+----------------+-----------+
| FM     | Okay to      | Determine if   | This step is   | SMC-09    |
| 2      | record in    | the entry has  | to verify that |           |
| .2.2.8 | the General  | been reviewed  | the review and |           |
|        | Ledger?      | and approved   | approval of    |           |
|        |              | by the         | the            |           |
|        |              | appropriate    | transaction    |           |
|        |              | personnel.     | prior to       |           |
|        |              |                | recording in   |           |
|        |              |                | the General    |           |
|        |              |                | Ledger has     |           |
|        |              |                | taken place.   |           |
+--------+--------------+----------------+----------------+-----------+
| FM     | Record in    | After the      | After the      | GLB-01    |
| 2      | General      | su             | entry passes   |           |
| .2.2.9 | Ledger       | b-allotment(s) | validation     | GLC-05    |
|        |              | are certified, | edits, the     |           |
|        |              | the            | applicable     | GLC-07    |
|        |              | transaction is | entry is       |           |
|        |              | recorded in    | recorded.      |           |
|        |              | the General    |                |           |
|        |              | Ledger.        | Examples       |           |
|        |              |                | include, but   |           |
|        |              |                | are not        |           |
|        |              |                | limited to,    |           |
|        |              |                | the following  |           |
|        |              |                | transaction    |           |
|        |              |                | codes from the |           |
|        |              |                | current TFM:   |           |
|        |              |                |                |           |
|        |              |                | TFM-A116 To    |           |
|        |              |                | record         |           |
|        |              |                | budgetary      |           |
|        |              |                | authority      |           |
|        |              |                | apportioned by |           |
|        |              |                | OMB and        |           |
|        |              |                | available for  |           |
|        |              |                | allotment.     |           |
|        |              |                |                |           |
|        |              |                | TFM-A118 To    |           |
|        |              |                | record         |           |
|        |              |                | anticipated    |           |
|        |              |                | resources      |           |
|        |              |                | apportioned    |           |
|        |              |                | but not        |           |
|        |              |                | available for  |           |
|        |              |                | use until they |           |
|        |              |                | are realized   |           |
|        |              |                | for            |           |
|        |              |                | anticipated    |           |
|        |              |                | resources in   |           |
|        |              |                | programs       |           |
|        |              |                | subject to     |           |
|        |              |                | apportionment. |           |
|        |              |                |                |           |
|        |              |                | Based on       |           |
|        |              |                | system         |           |
|        |              |                | configuration, |           |
|        |              |                | the            |           |
|        |              |                | sub-allotment  |           |
|        |              |                | can be used    |           |
|        |              |                | for Funds      |           |
|        |              |                | Control.       |           |
|        |              |                |                |           |
|        |              |                | ***Note:***    |           |
|        |              |                | This entry     |           |
|        |              |                | would be a     |           |
|        |              |                | re             |           |
|        |              |                | classification |           |
|        |              |                | of a higher    |           |
|        |              |                | level          |           |
|        |              |                | accounting     |           |
|        |              |                | classification |           |
|        |              |                | line to a      |           |
|        |              |                | lower level    |           |
|        |              |                | accounting     |           |
|        |              |                | classification |           |
|        |              |                | line in USSGL  |           |
|        |              |                | account 4610   |           |
|        |              |                | -- Allotments  |           |
|        |              |                | -- Realized    |           |
|        |              |                | Resources. .   |           |
+--------+--------------+----------------+----------------+-----------+

##  2.2.3 **Lower Level Distribution**

The use of Lower Level Distribution processes allows agencies to
maintain tighter administrative controls over obligations as prescribed
by the Antideficiency Act. These lower levels of budgetary distribution,
which are referred to as allocations, sub-allocations, allowances,
sub-allowances, and spending/operating plans, are often based on
program, projects, or organization/office. The recording of lower level
distributions of resources is prescribed in an agency's policies and
regulations for Funds Control.

**Note:** "Certify" as used in this process is defined as "review and
approve".

## FM 2.2.3 -- Lower Level Distribution Flowchart {#fm-2.2.3-lower-level-distribution-flowchart .unnumbered}

![](media/image12.wmf){width="6.490277777777778in"
height="4.569444444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Lower Level Distribution process steps are described as follows:

+--------+--------------+----------------+-----------------+-----------+
| Step   | Step Name    | Step           | Business Rules  | CFSR Req. |
| ID     |              | Description    |                 |           |
+========+==============+================+=================+===========+
| FM     | Record       | Enter control  | Enter control   | FMD-01    |
| 2      | Control      | total from the | total, then     |           |
| .2.3.1 | Total        | A              | distribute to   | SMB-25    |
|        |              | dministrative, | lower levels as |           |
|        |              | Budget and/or  | necessary.      |           |
|        |              | Program        |                 |           |
|        |              | Office. This   |                 |           |
|        |              | process should |                 |           |
|        |              | start with the |                 |           |
|        |              | allotment      |                 |           |
|        |              | posting        |                 |           |
|        |              | entries.       |                 |           |
|        |              |                |                 |           |
|        |              | The control    |                 |           |
|        |              | total is often |                 |           |
|        |              | at the header  |                 |           |
|        |              | level of the   |                 |           |
|        |              | record and is  |                 |           |
|        |              | established to |                 |           |
|        |              | validate the   |                 |           |
|        |              | line level     |                 |           |
|        |              | entries.       |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Record Lower | Official       | The amount      | FMD-01    |
| 2      | Level        | requests       | recorded is     |           |
| .2.3.2 | Distribution | (i.e.,         | based upon      | FMD-03    |
|        |              | appropriate    | allotment pools |           |
|        |              | advice) create | from referenced |           |
|        |              | a lower level  | lower level     |           |
|        |              | distribution.  | distribution    |           |
|        |              |                | advice (i.e.,   |           |
|        |              |                | second level of |           |
|        |              |                | organization).  |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Accounting   | Reference      | Verify          | CGAC      |
| 2      | cl           | appropriate    | combinations of |           |
| .2.3.3 | assification | accounting     | accounting      | C         |
|        | elements     | classification | classification  | ompliance |
|        | valid?       | elements.      | elements are    |           |
|        |              |                | valid and       | SMA-03    |
|        |              |                | active.         |           |
|        |              |                |                 | SMB-11    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-12    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-13    |
|        |              |                |                 |           |
|        |              |                |                 | SMB-30    |
|        |              |                |                 |           |
|        |              |                |                 | SMC-09    |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Stop and     | If the         | Designated      | SMA-05    |
| 2      | Resolve      | accounting     | personnel       |           |
| .2.3.4 | Issues       | classification | resolve         | SMA-06    |
|        |              | elements are   | applicable      |           |
|        |              | not valid, the | issues in       | FMD-05    |
|        |              | Business Unit  | accordance with |           |
|        |              | must resolve   | applicable      | SMB-16    |
|        |              | the issue.     | rules,          |           |
|        |              |                | regulations,    | SMC-09    |
|        |              | If the amount  | and agency      |           |
|        |              | is greater     | guidelines      |           |
|        |              | than or equal  | (e.g., FAR,     |           |
|        |              | to the         | agency policies |           |
|        |              | Sub-Allotment, | and             |           |
|        |              | Budget/Finance | procedures).    |           |
|        |              | must resolve   |                 |           |
|        |              | the issue.     |                 |           |
|        |              |                |                 |           |
|        |              | If allotment   |                 |           |
|        |              |                |                 |           |
|        |              | distribution   |                 |           |
|        |              | does not equal |                 |           |
|        |              | the control    |                 |           |
|        |              | total,         |                 |           |
|        |              | Budget/Finance |                 |           |
|        |              | must resolve   |                 |           |
|        |              | the issue.     |                 |           |
|        |              |                |                 |           |
|        |              | If it is       |                 |           |
|        |              | determined     |                 |           |
|        |              | that the entry |                 |           |
|        |              | is not ready   |                 |           |
|        |              | to be recorded |                 |           |
|        |              | in the General |                 |           |
|        |              | Ledger,        |                 |           |
|        |              | Budget/Finance |                 |           |
|        |              | must resolve   |                 |           |
|        |              | the issue.     |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Lower Level  | Determine if   | Ensure that     |           |
| 2      | Distribution | the lower      | this lower      |           |
| .2.3.5 | less than or | level          | level           |           |
|        | equal to the | distribution   | distribution    |           |
|        | Su           | amount is less | and other       |           |
|        | b-Allotment? | than or equal  | allowances do   |           |
|        |              | to the         | not exceed      |           |
|        |              | sub-allotment. | sub-allotment.  |           |
|        |              |                |                 |           |
|        |              | This is the    |                 |           |
|        |              | Antideficiency |                 |           |
|        |              | check.         |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Control      | Determine if   | Lower level     | SMB-25    |
| 2      | Total        | the lower      | distribution    |           |
| .2.3.6 | Correct?     | level          | cannot exceed   |           |
|        |              | distribution   | the control     |           |
|        |              | is equal to    | total (e.g.,    |           |
|        |              | the control    | all lines of    |           |
|        |              | total. This is | distribution    |           |
|        |              | the entry      | are added       |           |
|        |              | approval step  | together to     |           |
|        |              | where the (1)  | ensure they     |           |
|        |              | accounting     | equal the       |           |
|        |              | period is      | control total). |           |
|        |              | checked to see |                 |           |
|        |              | if it is open  |                 |           |
|        |              | or closed, (2) |                 |           |
|        |              | the accounting |                 |           |
|        |              | classification |                 |           |
|        |              | elements are   |                 |           |
|        |              | revalidated,   |                 |           |
|        |              | and (3) the    |                 |           |
|        |              | control total  |                 |           |
|        |              | is checked.    |                 |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Certify      | After the      | This step       | TLE-01    |
| 2      | Entry        | lower level    | ensures a       |           |
| .2.3.7 |              | d              | separation of   | TLE-02    |
|        |              | istribution(s) | duties for      |           |
|        |              | are entered    | review and      | TLE-03    |
|        |              | into the       | approval of     |           |
|        |              | system, it has | transactions    | TLE-04    |
|        |              | to be approved | prior to        |           |
|        |              | by appropriate | recording in    | TLE-06    |
|        |              | personnel.     | the General     |           |
|        |              |                | Ledger.         | TLE-07    |
|        |              |                |                 |           |
|        |              |                |                 | TLE-08    |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Okay to      | Determine if   | This step is to | SMC-09    |
| 2      | record in    | the entry has  | verify that the |           |
| .2.3.8 | the General  | been reviewed  | review and      |           |
|        | Ledger?      | and approved   | approval of the |           |
|        |              | by the         | transaction     |           |
|        |              | appropriate    | prior to        |           |
|        |              | personnel.     | recording in    |           |
|        |              |                | the General     |           |
|        |              |                | Ledger has      |           |
|        |              |                | taken place.    |           |
+--------+--------------+----------------+-----------------+-----------+
| FM     | Record in    | After the      | After the entry | GLB-01    |
| 2      | General      | lower level    | passes          |           |
| .2.3.9 | Ledger       | d              | validation      | GLC-05    |
|        |              | istribution(s) | edits, the      |           |
|        |              | are certified, | applicable      | GLC-07    |
|        |              | the            | entry is        |           |
|        |              | transaction is | recorded.       |           |
|        |              | recorded in    |                 |           |
|        |              | the General    | Examples        |           |
|        |              | Ledger.        | include, but    |           |
|        |              |                | are not limited |           |
|        |              |                | to, the         |           |
|        |              |                | following       |           |
|        |              |                | transaction     |           |
|        |              |                | codes from the  |           |
|        |              |                | current TFM:    |           |
|        |              |                |                 |           |
|        |              |                | TFM-A116 To     |           |
|        |              |                | record          |           |
|        |              |                | budgetary       |           |
|        |              |                | authority       |           |
|        |              |                | apportioned by  |           |
|        |              |                | OMB and         |           |
|        |              |                | available for   |           |
|        |              |                | allotment.      |           |
|        |              |                |                 |           |
|        |              |                | TFM-A118 To     |           |
|        |              |                | record          |           |
|        |              |                | anticipated     |           |
|        |              |                | resources       |           |
|        |              |                | apportioned but |           |
|        |              |                | not available   |           |
|        |              |                | for use until   |           |
|        |              |                | they are        |           |
|        |              |                | realized for    |           |
|        |              |                | anticipated     |           |
|        |              |                | resources in    |           |
|        |              |                | programs        |           |
|        |              |                | subject to      |           |
|        |              |                | apportionment.  |           |
|        |              |                |                 |           |
|        |              |                | Based on system |           |
|        |              |                | configuration,  |           |
|        |              |                | the             |           |
|        |              |                | sub-allotment   |           |
|        |              |                | can be used for |           |
|        |              |                | Funds           |           |
|        |              |                | Management.     |           |
+--------+--------------+----------------+-----------------+-----------+

##  2.3 **Funds Control Process**

The funds control process validates and verifies the availability of
funds for spending transactions, (e.g., commitments, obligations and
expenditures). The requisition document from the agency's acquisition
system will initiate creation of a commitment in the agency's financial
system. Although OMB Circular A-11 addresses the authority to incur
obligations and expenditures (the outlay of the obligation), a
commitment is an "administrative reservation of allotted funds in
anticipation of an obligation" and therefore does draw down on fund
balances, similar to obligations and expenditures. However, an agency is
responsible for keeping appropriate fund balances, as well as the
balances for commitments, obligations and expenditures, to ensure
accurate and timely verification and reporting of available funding.

OMB Circular A-11, Appendix H -- Checklist For Fund Control Regulations
stipulates that the following steps be addressed in an agency's policy
that states the regulations under which basic fund control principles
and concepts will be put into operation:

-   Establish a policy with regard to the administrative control of
    funds;

-   Prescribe a system for positive administrative control of funds
    designed to restrict obligations and expenditures (disbursements) to
    the amount available in each appropriation or fund account;

-   Restrict both obligations and expenditures from each appropriation
    or fund account to the lower of the amount of apportionments made by
    OMB or the amount available for obligation and/or expenditure in the
    appropriation or fund account;

-   Enable the head of your agency to identify the person responsible
    for any obligation or expenditure exceeding the amount available in
    the appropriation or fund account, the OMB apportionment or
    reapportionment, the allotment or sub-allotments made by the agency,
    any statutory limitations, and any other administrative subdivision
    of funds made by the agency; and

-   Provide procedures for dealing with violations of the Antideficiency
    Act as well as violations of other administrative subdivision of
    funds that are not violations of the Antideficiency Act. An agency
    is responsible for establishing a policy for administrative control
    of Funds.

Please see OMB Circular A-11, Appendix H -- Checklist for Fund Control
Regulations for additional guidance.

**Note:** In addition, the agency also must establish the level at which
funds management will be verified and validated, e.g., once allotments
and any lower level distributions of funding have been completed, the
active accounting classification elements at which available funding
will be checked must be established both as a part of the current year's
funding internal controls and in the Core Financial System to enable
proper editing.

## 

## 2.3.1 **Establishing Commitments and Obligations for Goods and Services**

The establishment of commitments and obligations for goods and services
result in outputs to the accounts payable and invoicing processes. The
requisition document from the agency's acquisition system will initiate
creation of a commitment in the agency's financial system. Vendor
maintenance that may be associated with requisitions, commitments, and
obligations is not within the scope of this chapter.

The steps contained in the flowchart below describe the procedures
necessary to prepare an obligation that has a prior commitment. Please
note that the "Verify Funding Available" step included in the flowchart
is the trigger point for the Funds Validation and Verification flows
(2.3.4 and 2.3.5).

## FM 2.3.1 -- Establishing Commitments and Obligations for Goods and Services Flowchart {#fm-2.3.1-establishing-commitments-and-obligations-for-goods-and-services-flowchart .unnumbered}

![](media/image13.wmf){width="6.490277777777778in"
height="5.2243055555555555in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Funds Management process steps Establish Commitments and Obligations
for goods and services are described as follows:

+--------+---------+---------------+-----------------------+---------+
| Step   | Step    | Step          | Business Rules        | CFSR    |
| ID     | Name    | Description   |                       | Req.    |
+========+=========+===============+=======================+=========+
| FM     | Prepare | Personnel     | Authorized personnel  | CGAC    |
| 2      |         | authorized by | who are designated as | Com     |
| .3.1.1 | Requ    | the Business  | requistioners should  | pliance |
|        | isition | Unit prepare  | be the only personnel |         |
|        |         | a requisition | assigned authority    | FME-19  |
|        |         | for purchase  | within the system to  |         |
|        |         | of goods or   | initiate a            |         |
|        |         | services to   | requisition.          |         |
|        |         | fulfill a     |                       |         |
|        |         | bona fide     | This designated       |         |
|        |         | need for      | requisition personnel |         |
|        |         | acquisition.  | enters required       |         |
|        |         |               | information on the    |         |
|        |         |               | requisition including |         |
|        |         |               | the following:        |         |
|        |         |               |                       |         |
|        |         |               | -   Suggested or      |         |
|        |         |               |     recommended       |         |
|        |         |               |     vendors, as       |         |
|        |         |               |     applicable (or a  |         |
|        |         |               |     justification for |         |
|        |         |               |     a specific        |         |
|        |         |               |     vendor)           |         |
|        |         |               |                       |         |
|        |         |               | -   When the goods or |         |
|        |         |               |     services are      |         |
|        |         |               |     needed            |         |
|        |         |               |                       |         |
|        |         |               | -   For services, the |         |
|        |         |               |     necessary period  |         |
|        |         |               |     of performance    |         |
|        |         |               |                       |         |
|        |         |               | -   An estimate of    |         |
|        |         |               |     the cost to       |         |
|        |         |               |     procure the goods |         |
|        |         |               |     or services       |         |
|        |         |               |                       |         |
|        |         |               | -   Appropriate       |         |
|        |         |               |     accounting        |         |
|        |         |               |     classification    |         |
|        |         |               |     elements          |         |
|        |         |               |                       |         |
|        |         |               | -   Point of contact  |         |
|        |         |               |     information for   |         |
|        |         |               |     the agency        |         |
|        |         |               |     official(s)       |         |
|        |         |               |     ordering and/or   |         |
|        |         |               |     receiving the     |         |
|        |         |               |     goods or services |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Aut     | The           | The requisition is    | TLE-03  |
| 2      | horized | requisition   | reviewed to ensure    |         |
| .3.1.2 |         | is reviewed   | the data entered      |         |
|        | Requ    | and validated | matches the           |         |
|        | isition | by a          | requisition           |         |
|        |         | designated    | supporting            |         |
|        |         | official.     | documentation.        |         |
|        |         |               |                       |         |
|        |         | The output is | This designated       |         |
|        |         | an authorized | requisition personnel |         |
|        |         | requisition.  | signs the form        |         |
|        |         |               | (preferably           |         |
|        |         |               | electronically) to    |         |
|        |         |               | authorize the         |         |
|        |         |               | request.              |         |
|        |         |               |                       |         |
|        |         |               | An agency may define  |         |
|        |         |               | certain types and/or  |         |
|        |         |               | amounts of            |         |
|        |         |               | acquisition requests  |         |
|        |         |               | (e.g., property,      |         |
|        |         |               | information           |         |
|        |         |               | technology), for      |         |
|        |         |               | which the requisition |         |
|        |         |               | must be authorized by |         |
|        |         |               | an additional person  |         |
|        |         |               | or persons with       |         |
|        |         |               | applicable            |         |
|        |         |               | supervisory or        |         |
|        |         |               | managerial authority. |         |
|        |         |               |                       |         |
|        |         |               | Personnel with the    |         |
|        |         |               | appropriate authority |         |
|        |         |               | must review the       |         |
|        |         |               | accounting            |         |
|        |         |               | classification        |         |
|        |         |               | elements, including   |         |
|        |         |               | the Treasury Account  |         |
|        |         |               | Symbol and Business   |         |
|        |         |               | Event Type Code       |         |
|        |         |               | (TAS-BETC).           |         |
|        |         |               |                       |         |
|        |         |               | Capital assets should |         |
|        |         |               | be identified during  |         |
|        |         |               | the requisition phase |         |
|        |         |               | of the Payment        |         |
|        |         |               | Management chapter.   |         |
|        |         |               |                       |         |
|        |         |               | A manager with        |         |
|        |         |               | funding authority     |         |
|        |         |               | reviews and           |         |
|        |         |               | electronically        |         |
|        |         |               | authorizes the        |         |
|        |         |               | commitment of funds   |         |
|        |         |               | for the requisition.  |         |
|        |         |               | This occurs as part   |         |
|        |         |               | of step FM 2.3.1.3,   |         |
|        |         |               | \"Verify Funding      |         |
|        |         |               | Available"            |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Verify  | The Core      | The system certifies  | FME-01  |
| 2      | Funding | Financial     | availability of       |         |
| .3.1.3 | Av      | System (Core  | required funding      | SMB-11  |
|        | ailable | Financial     | prior to committing   |         |
|        |         | System)       | budgetary resources.  | SMB-12  |
|        |         | checks        |                       |         |
|        |         | whether       |                       | SMB-13  |
|        |         | funding is    |                       |         |
|        |         | available to  |                       | SMC-09  |
|        |         | commit funds  |                       |         |
|        |         | from          |                       |         |
|        |         | applicable    |                       |         |
|        |         | budgetary     |                       |         |
|        |         | resources.    |                       |         |
|        |         | This process  |                       |         |
|        |         | is executed   |                       |         |
|        |         | by performing |                       |         |
|        |         | the           |                       |         |
|        |         | applicable    |                       |         |
|        |         | steps in FM   |                       |         |
|        |         | 2.3.4         |                       |         |
|        |         | (Unexpired    |                       |         |
|        |         | Funds         |                       |         |
|        |         | Validation    |                       |         |
|        |         | and           |                       |         |
|        |         | Verification) |                       |         |
|        |         | as referenced |                       |         |
|        |         | on the        |                       |         |
|        |         | flowchart.    |                       |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Com     | After the     | The entries are       | FME-02  |
| 2      | mitment | requisition   | recorded in the       |         |
| .3.1.4 | Records | is entered    | General Ledger using  | FME-03  |
|        | in      | into the      | the USSGL Account     |         |
|        | General | system and    | Transaction Listing   | FME-08  |
|        | Ledger  | approved by   | provided in the       |         |
|        |         | appropriate   | current TFM.          | FME-12  |
|        |         | personnel,    |                       |         |
|        |         | funds are     | Examples include, but | GLB-01  |
|        |         | checked and a | are not limited to,   |         |
|        |         | commitment    | the following         | GLC-01  |
|        |         | transaction   | transaction codes     |         |
|        |         | is recorded   | from the current TFM: | GLC-05  |
|        |         | in the        |                       |         |
|        |         | General       | TFM-B302 To record a  | GLC-06  |
|        |         | Ledger.       | commitment of         |         |
|        |         |               | unobligated amounts   |         |
|        |         |               | in programs subject   |         |
|        |         |               | to apportionment.     |         |
|        |         |               |                       |         |
|        |         |               | TFM-B304 To record a  |         |
|        |         |               | commitment of         |         |
|        |         |               | unobligated balances  |         |
|        |         |               | in programs exempt    |         |
|        |         |               | from apportionment.   |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Funded  | The funded    | Acquisition Office    | TLE-07  |
| 2      |         | requisition   | officials who have    |         |
| .3.1.5 | Requ    | is            | completed             |         |
|        | isition | automatically | standardized training |         |
|        |         | routed to the | programs are          |         |
|        |         | Acquisition   | certified to act as   |         |
|        |         | Office.       | purchasing agents on  |         |
|        |         |               | behalf of the agency  |         |
|        |         |               | and have been granted |         |
|        |         |               | access to the         |         |
|        |         |               | agency's Acquisition  |         |
|        |         |               | System.               |         |
|        |         |               |                       |         |
|        |         |               | These qualified       |         |
|        |         |               | Acquisition officials |         |
|        |         |               | may be referred to as |         |
|        |         |               | a Contracting         |         |
|        |         |               | Officer's Technical   |         |
|        |         |               | Representative (COTR) |         |
|        |         |               | or a Contracting      |         |
|        |         |               | Officer's             |         |
|        |         |               | Representative (COR). |         |
|        |         |               |                       |         |
|        |         |               | Upon receipt of a     |         |
|        |         |               | requisition, the      |         |
|        |         |               | Acquisition official  |         |
|        |         |               | reviews it to         |         |
|        |         |               | determine whether it  |         |
|        |         |               | has been              |         |
|        |         |               | appropriately         |         |
|        |         |               | completed and         |         |
|        |         |               | authorized.           |         |
|        |         |               |                       |         |
|        |         |               | If the Acquisition    |         |
|        |         |               | official notes errors |         |
|        |         |               | or omissions in the   |         |
|        |         |               | requisition, it is    |         |
|        |         |               | returned to the       |         |
|        |         |               | Business Unit to be   |         |
|        |         |               | corrected and         |         |
|        |         |               | resubmitted.          |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Perform | Once the      | Acquisition performs  |         |
| 2      | Acqu    | contractor    | the procurement       |         |
| .3.1.6 | isition | has been      | process in accordance |         |
|        | Process | chosen, an    | with applicable       |         |
|        |         | Acquisition   | regulations (e.g.,    |         |
|        |         | official      | FAR, agency           |         |
|        |         | prepares the  | guidelines).          |         |
|        |         | award         |                       |         |
|        |         | documents     | Federal               |         |
|        |         | (such as      | (intragovernmental)   |         |
|        |         | contracts,    | buy and sell          |         |
|        |         | purchase      | transactions will be  |         |
|        |         | orders, and   | included in a future  |         |
|        |         | delivery      | release of the        |         |
|        |         | orders).      | Standard Business     |         |
|        |         | Although      | Process document.     |         |
|        |         | multiple      |                       |         |
|        |         | steps         |                       |         |
|        |         | comprise this |                       |         |
|        |         | part of the   |                       |         |
|        |         | process, such |                       |         |
|        |         | steps are     |                       |         |
|        |         | beyond the    |                       |         |
|        |         | scope of this |                       |         |
|        |         | document.     |                       |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Federal | The           |                       | SMC-01  |
|        | Vendor? | cont          |                       |         |
| 2      |         | ractor/vendor |                       | PMA-01  |
| .3.1.7 |         | is identified |                       |         |
|        |         | as either a   |                       |         |
|        |         | federal or    |                       |         |
|        |         | non-federal   |                       |         |
|        |         | vendor.       |                       |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Inte    | Applicable    | Goods/services to be  |         |
| 2      | ragency | procedures    | acquired via an       |         |
| .3.1.8 | A       | are performed | interagency assisted  |         |
|        | ssisted | to acquire    | acquisition, are      |         |
|        | Acqu    | g             | subject to the        |         |
|        | isition | oods/services | procedures and        |         |
|        |         | through the   | responsibilities      |         |
|        |         | assistance of | outlined in the OMB   |         |
|        |         | another       | Office of Federal     |         |
|        |         | agency or     | Procurement Policy    |         |
|        |         | agencies.     | (OFPP) Interagency    |         |
|        |         |               | Acquisition Memo.     |         |
|        |         |               |                       |         |
|        |         |               | An interagency        |         |
|        |         |               | acquisition is the    |         |
|        |         |               | term used to describe |         |
|        |         |               | the process by which  |         |
|        |         |               | one agency            |         |
|        |         |               | (requesting agency),  |         |
|        |         |               | uses the contracts    |         |
|        |         |               | and/or contracting    |         |
|        |         |               | services of other     |         |
|        |         |               | agencies (servicing   |         |
|        |         |               | agencies) to obtain   |         |
|        |         |               | supplies and          |         |
|        |         |               | services.             |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | I       | The           | Vendors must be       | FME-01  |
| 2      | nitiate | Acquisition   | registered in the     |         |
| .3.1.9 | and     | official      | Central Contractor    | FME-21  |
|        | Au      | prepares and  | Registration (CCR)    |         |
|        | thorize | authorizes an | database except for   | PMA-01  |
|        | Award   | electronic    | contracts and         |         |
|        | D       | award         | agreements identified | PMA-02  |
|        | ocument | document.     | in FAR Volume I, Part |         |
|        |         |               | 4, Subpart 4.11.      | PMA-04  |
|        |         |               |                       |         |
|        |         |               | A unique obligation   | PMA-05  |
|        |         |               | number is assigned to |         |
|        |         |               | the award document.   | PMA-06  |
|        |         |               | The number must       |         |
|        |         |               | reference the         | PMA-07  |
|        |         |               | commitment number.    |         |
|        |         |               |                       | PMA-08  |
|        |         |               | The obligation        |         |
|        |         |               | number, document ID,  | PMA-09  |
|        |         |               | and accounting        |         |
|        |         |               | classification        | PMA-10  |
|        |         |               | elements must be      |         |
|        |         |               | included in the       | PMA-15  |
|        |         |               | obligation data       |         |
|        |         |               | maintained in the     | PMA-16  |
|        |         |               | General Ledger and    |         |
|        |         |               | subsidiary ledger.    | PMA-17  |
|        |         |               |                       |         |
|        |         |               | An award document     | SMA-01  |
|        |         |               | must not be routed to |         |
|        |         |               | end-users until an    | SMB-01  |
|        |         |               | obligation is         |         |
|        |         |               | recorded in the       | SMB-03  |
|        |         |               | General Ledger and    |         |
|        |         |               | subsidiary ledger.    | SMB-08  |
|        |         |               | Once the Acquisition  |         |
|        |         |               | official prepares and | SMB-24  |
|        |         |               | authorizes the award  |         |
|        |         |               | document, funds       | SMC-01  |
|        |         |               | checks are performed  |         |
|        |         |               | in the Core Financial |         |
|        |         |               | System to determine   |         |
|        |         |               | whether required      |         |
|        |         |               | funding is available  |         |
|        |         |               | for each line item of |         |
|        |         |               | the obligation.       |         |
|        |         |               |                       |         |
|        |         |               | The requested         |         |
|        |         |               | obligation amounts    |         |
|        |         |               | are subjected to      |         |
|        |         |               | tolerance checks      |         |
|        |         |               | against the           |         |
|        |         |               | referenced            |         |
|        |         |               | commitment(s).        |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Advance | The agency    | The agency must       |         |
| 2.     | R       | determines    | follow FAR            |         |
| 3.1.10 | equest? | whether an    | requirements and      |         |
|        |         | advance has   | agency policies and   |         |
|        |         | been properly | procedures for the    |         |
|        |         | requested on  | issuance of advances. |         |
|        |         | the           | FAR Volume I, Part    |         |
|        |         | obligation.   | 32, Subparts 200      |         |
|        |         |               | through 207, provides |         |
|        |         |               | regulations for       |         |
|        |         |               | commercial item       |         |
|        |         |               | purchase financing.   |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Process | An advance    |                       | FME-02  |
| 2.     | Advance | request is    |                       |         |
| 3.1.11 |         | processed and |                       | FME-29  |
|        |         | warehoused    |                       |         |
|        |         | for payment.  |                       | SMC-02  |
+--------+---------+---------------+-----------------------+---------+
| FM     | Obl     | An obligation | Once an obligation    | FME-02  |
| 2.     | igation | is recorded   | document passes       |         |
| 3.1.12 | Records | in the        | funding and tolerance | FME-08  |
|        | in      | General       | checks, it is         |         |
|        | General | Ledger.       | recorded in the       | FME-12  |
|        | Ledger  |               | General Ledger and    |         |
|        |         |               | the appropriate       | GLB-01  |
|        |         |               | amount of the         |         |
|        |         |               | commitment is         | GLC-01  |
|        |         |               | liquidated.           |         |
|        |         |               |                       | GLC-05  |
|        |         |               | This designated       |         |
|        |         |               | business unit         | GLC-06  |
|        |         |               | requisition person is |         |
|        |         |               | notified              | SMC-02  |
|        |         |               | electronically of the |         |
|        |         |               | approved order and    | TLE-07  |
|        |         |               | obligation.           |         |
|        |         |               |                       |         |
|        |         |               | The entries are       |         |
|        |         |               | recorded using the    |         |
|        |         |               | USSGL Account         |         |
|        |         |               | Transaction Listing   |         |
|        |         |               | provided in the       |         |
|        |         |               | current TFM.          |         |
|        |         |               |                       |         |
|        |         |               | Examples include, but |         |
|        |         |               | are not limited to,   |         |
|        |         |               | the following         |         |
|        |         |               | transaction codes     |         |
|        |         |               | from the current TFM: |         |
|        |         |               |                       |         |
|        |         |               | TFM-B306 To record    |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered orders    |         |
|        |         |               | without an advance.   |         |
|        |         |               |                       |         |
|        |         |               | TFM-B308 To record    |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered orders    |         |
|        |         |               | with an advance.      |         |
|        |         |               |                       |         |
|        |         |               | TFM-B310 To record a  |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered order     |         |
|        |         |               | without an advance    |         |
|        |         |               | where the commitment  |         |
|        |         |               | is more than the      |         |
|        |         |               | undelivered order for |         |
|        |         |               | commitments in        |         |
|        |         |               | programs subject to   |         |
|        |         |               | apportionment.        |         |
|        |         |               |                       |         |
|        |         |               | TFM-B312 To record a  |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered order     |         |
|        |         |               | without an advance    |         |
|        |         |               | where the commitment  |         |
|        |         |               | is more than the      |         |
|        |         |               | undelivered order for |         |
|        |         |               | commitments in        |         |
|        |         |               | programs exempt from  |         |
|        |         |               | apportionment.        |         |
|        |         |               |                       |         |
|        |         |               | TFM-B314 To record a  |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered order     |         |
|        |         |               | without an advance    |         |
|        |         |               | where the commitment  |         |
|        |         |               | is less than the      |         |
|        |         |               | undelivered order for |         |
|        |         |               | commitments in        |         |
|        |         |               | programs subject to   |         |
|        |         |               | apportionment.        |         |
|        |         |               |                       |         |
|        |         |               | TFM-B316 To record a  |         |
|        |         |               | current-year          |         |
|        |         |               | undelivered order     |         |
|        |         |               | without an advance    |         |
|        |         |               | where the commitment  |         |
|        |         |               | is less than the      |         |
|        |         |               | undelivered order for |         |
|        |         |               | commitments in        |         |
|        |         |               | programs exempt from  |         |
|        |         |               | apportionment.        |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Award   | Notification  | The document must be  | TLE-07  |
| 2.     | D       | of the        | available to          |         |
| 3.1.13 | ocument | sys           | applicable offices    |         |
|        |         | tem-generated | that perform the      |         |
|        | Notif   | award         | receipt, acceptance,  |         |
|        | ication | document is   | and invoice           |         |
|        |         | provided to   | processing activities |         |
|        |         | the           | as well as the        |         |
|        |         | Receiving,    | vendor/payee.         |         |
|        |         | Business      |                       |         |
|        |         | Unit, and     | The award document    |         |
|        |         | Finance       | copy should include   |         |
|        |         | functional    | at a minimum, but is  |         |
|        |         | areas of the  | not limited to, the   |         |
|        |         | agency and to | obligation number,    |         |
|        |         | the           | line item             |         |
|        |         | vendor/payee. | information,          |         |
|        |         |               | accounting            |         |
|        |         |               | classification        |         |
|        |         |               | elements, TAS,        |         |
|        |         |               | applicable vendor     |         |
|        |         |               | information, and      |         |
|        |         |               | contract terms.       |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Award   | The Receiving | The Core Financial    | TLF-01  |
| 2.     | Do      | view includes | System must enable    |         |
| 3.1.14 | cument- | information   | access to the         | TLH-03  |
|        | Re      | applicable to | Receiving view of the |         |
|        | ceiving | the Receiving | award document to     |         |
|        | View    | functions.    | applicable authorized |         |
|        |         |               | personnel.            |         |
|        |         |               |                       |         |
|        |         |               | A view does not       |         |
|        |         |               | represent physical    |         |
|        |         |               | storage, but the      |         |
|        |         |               | ability to view a     |         |
|        |         |               | particular segment of |         |
|        |         |               | stored data.          |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Award   | The Business  | The Core Financial    | TLF-01  |
| 2.     | Do      | Unit view     | System must enable    |         |
| 3.1.15 | cument- | includes      | access to the         | TLH-03  |
|        |         | information   | Business Unit view of |         |
|        | B       | applicable to | the award document to |         |
|        | usiness | the Business  | applicable authorized |         |
|        | Unit    | Unit          | personnel.            |         |
|        | View    | functions.    |                       |         |
|        |         |               | A view does not       |         |
|        |         |               | represent physical    |         |
|        |         |               | storage, but the      |         |
|        |         |               | ability to view a     |         |
|        |         |               | particular segment of |         |
|        |         |               | stored data.          |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Award   | The Finance   | The Core Financial    | TLF-01  |
| 2.     | Do      | view includes | System must enable    |         |
| 3.1.16 | cument- | information   | access to the Finance | TLH-03  |
|        | Finance | fields        | view of the award     |         |
|        | View    | applicable to | document to           |         |
|        |         | the Finance   | applicable authorized |         |
|        |         | functions.    | personnel.            |         |
|        |         |               |                       |         |
|        |         |               | A view does not       |         |
|        |         |               | represent physical    |         |
|        |         |               | storage, but the      |         |
|        |         |               | ability to view a     |         |
|        |         |               | particular segment of |         |
|        |         |               | stored data.          |         |
+--------+---------+---------------+-----------------------+---------+
| FM     | Award   | The Vendor    | The vendor copy of    |         |
| 2.     | Do      | Copy includes | the award document is |         |
| 3.1.17 | cument- | information   | sent to the           |         |
|        | Vendor  | applicable to | vendor/payee.         |         |
|        | Copy    | the vendor\'s |                       |         |
|        |         | legal         | A view does not       |         |
|        |         | obligation to | represent physical    |         |
|        |         | provide goods | storage, but the      |         |
|        |         | and services  | ability to view a     |         |
|        |         | to the        | particular segment of |         |
|        |         | agency.       | stored data.          |         |
+--------+---------+---------------+-----------------------+---------+

## 2.3.2 **Establishing Obligations Not Requiring Commitment**

Obligations not requiring commitment refers to those events, such as
training and travel, which do not require commitment accounting.
Agencies should have policies in place that delineate the types of
obligations that can be made without commitment accounting.

The steps contained in the flowchart below describe the procedures
necessary to prepare an obligation without a prior commitment. Please
note that the "Verify Funding Available" step, which is included on the
flowchart, is the trigger point for the Funds Validation and
Verification flows (2.3.4 and 2.3.5).

## FM 2.3.2 -- Establishing Obligations Not Requiring Commitment Flowchart {#fm-2.3.2-establishing-obligations-not-requiring-commitment-flowchart .unnumbered}

![](media/image14.wmf){width="6.489583333333333in"
height="3.814583333333333in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Funds Management Establishing Obligations not Requiring Commitments
process steps are described as follows:

+--------+---------+------------------+---------------------+--------+
| Step   | Step    | Step Description | Business Rules      | CFSR   |
| ID     | Name    |                  |                     | Req.   |
+========+=========+==================+=====================+========+
| FM     | I       | The Business     | Agencies should     | FME-21 |
| 2      | dentify | Unit official    | implement policies  |        |
| .3.2.1 | Bona    | has a bona fide  | and procedures      | FME-24 |
|        | fide    | need for a       | describing which    |        |
|        | Need    | properly         | type of obligations | PMA-01 |
|        |         | incurred expense | may be made without |        |
|        |         | not requiring    | commitment          | PMA-02 |
|        |         | commitment       | accounting.         |        |
|        |         | accounting and   |                     | PMA-04 |
|        |         | generates an     |                     |        |
|        |         | obligation in    |                     | PMA-05 |
|        |         | the system based |                     |        |
|        |         | on data entered  |                     | PMA-06 |
|        |         | to record the    |                     |        |
|        |         | goods, services, |                     | PMA-07 |
|        |         | grant or         |                     |        |
|        |         | cooperative      |                     | PMA-08 |
|        |         | agreement.       |                     |        |
|        |         |                  |                     | PMA-09 |
|        |         |                  |                     |        |
|        |         |                  |                     | PMA-10 |
|        |         |                  |                     |        |
|        |         |                  |                     | PMA-16 |
|        |         |                  |                     |        |
|        |         |                  |                     | PMA-17 |
|        |         |                  |                     |        |
|        |         |                  |                     | SMA-01 |
|        |         |                  |                     |        |
|        |         |                  |                     | SMB-01 |
|        |         |                  |                     |        |
|        |         |                  |                     | SMB-22 |
|        |         |                  |                     |        |
|        |         |                  |                     | SMB-24 |
+--------+---------+------------------+---------------------+--------+
| FM     | Federal | The              |                     | SMC-01 |
| 2      | Vendor? | c                |                     |        |
| .3.2.2 |         | ontractor/vendor |                     | PMA-01 |
|        |         | is identified as |                     |        |
|        |         | either a federal |                     |        |
|        |         | or non-federal   |                     |        |
|        |         | vendor.          |                     |        |
|        |         |                  |                     |        |
|        |         | Federal          |                     |        |
|        |         | (in              |                     |        |
|        |         | tragovernmental) |                     |        |
|        |         | buy and sell     |                     |        |
|        |         | transactions     |                     |        |
|        |         | will be included |                     |        |
|        |         | in a future      |                     |        |
|        |         | release of the   |                     |        |
|        |         | Standard         |                     |        |
|        |         | Business Process |                     |        |
|        |         | document.        |                     |        |
+--------+---------+------------------+---------------------+--------+
| FM     | Inte    | Applicable       | Goods/services to   |        |
| 2      | ragency | procedures are   | be acquired via an  |        |
| .3.2.3 | A       | performed to     | interagency         |        |
|        | ssisted | acquire          | assisted            |        |
|        | Acqu    | goods/services   | acquisition are     |        |
|        | isition | through the      | subject to the      |        |
|        |         | assistance of    | procedures and      |        |
|        |         | another agency   | responsibilities    |        |
|        |         | or agencies.     | outlined in the OMB |        |
|        |         |                  | Office of Federal   |        |
|        |         |                  | Procurement Policy  |        |
|        |         |                  | (OFPP) Interagency  |        |
|        |         |                  | Acquisition Memo.   |        |
|        |         |                  |                     |        |
|        |         |                  | An interagency      |        |
|        |         |                  | acquisition is the  |        |
|        |         |                  | term used to        |        |
|        |         |                  | describe the        |        |
|        |         |                  | process by which    |        |
|        |         |                  | one agency          |        |
|        |         |                  | (requesting         |        |
|        |         |                  | agency), uses the   |        |
|        |         |                  | contracts and/or    |        |
|        |         |                  | contracting         |        |
|        |         |                  | services of other   |        |
|        |         |                  | agencies (servicing |        |
|        |         |                  | agencies) to obtain |        |
|        |         |                  | supplies and        |        |
|        |         |                  | services.           |        |
+--------+---------+------------------+---------------------+--------+
| FM     | I       | The Business     | A unique obligation | FME-21 |
| 2      | nitiate | Unit official    | number is assigned  |        |
| .3.2.4 | Obl     | prepares the     | to the obligation   | FME-24 |
|        | igation | order for goods  | document recorded.  |        |
|        | Not     | and services not |                     | PMA-01 |
|        | Re      | requiring        | The obligation      |        |
|        | quiring | commitment.      | number, document ID | PMA-02 |
|        | Com     |                  | and accounting      |        |
|        | mitment |                  | classification      | PMA-04 |
|        |         |                  | elements must be    |        |
|        |         |                  | included in the     | PMA-05 |
|        |         |                  | obligation data     |        |
|        |         |                  | maintained in the   | PMA-06 |
|        |         |                  | General Ledger and  |        |
|        |         |                  | subsidiary ledger.  | PMA-07 |
|        |         |                  |                     |        |
|        |         |                  | The Core Financial  | PMA-08 |
|        |         |                  | System must prevent |        |
|        |         |                  | new obligations to  | PMA-09 |
|        |         |                  | inactive or         |        |
|        |         |                  | debarred vendors or | PMA-10 |
|        |         |                  | vendors with        |        |
|        |         |                  | expired CCR         | PMA-16 |
|        |         |                  | registrations.      |        |
|        |         |                  |                     | PMA-17 |
|        |         |                  | An agency may       |        |
|        |         |                  | develop and         | SMA-01 |
|        |         |                  | implement policies  |        |
|        |         |                  | and procedures to   | SMB-01 |
|        |         |                  | determine threshold |        |
|        |         |                  | amounts under which | SMB-22 |
|        |         |                  | acquisitions may be |        |
|        |         |                  | made without        | SMB-24 |
|        |         |                  | requiring the       |        |
|        |         |                  | recording of        |        |
|        |         |                  | commitments.        |        |
+--------+---------+------------------+---------------------+--------+
| FM     | Verify  | The Core         | Once the            | FME-01 |
| 2      | Funding | Financial System | Acquisition         |        |
| .3.2.5 | Av      | checks whether   | official            |        |
|        | ailable | funding is       | electronically      |        |
|        |         | available to     | prepares the        |        |
|        |         | obligate funds   | obligating          |        |
|        |         | from applicable  | document, funds     |        |
|        |         | budgetary        | checks are          |        |
|        |         | resources. This  | performed in the    |        |
|        |         | process is       | Core Financial      |        |
|        |         | executed by      | System to determine |        |
|        |         | performing the   | whether required    |        |
|        |         | applicable steps | funding is          |        |
|        |         | in FM 2.3.4      | available for each  |        |
|        |         | (Unexpired Funds | line item of the    |        |
|        |         | Validation and   | obligation.         |        |
|        |         | Verification) as |                     |        |
|        |         | referenced on    | The system          |        |
|        |         | the flowchart.   | certifies           |        |
|        |         |                  | availability of     |        |
|        |         |                  | required funding    |        |
|        |         |                  | prior to obligating |        |
|        |         |                  | budgetary           |        |
|        |         |                  | resources.          |        |
+--------+---------+------------------+---------------------+--------+
| FM     | Au      | A request for    | Another official    | TLE-01 |
| 2      | thorize | authorization is | within the Business |        |
| .3.2.6 | Obl     | electronically   | Unit must review    |        |
|        | igation | routed to the    | the obligation to   |        |
|        |         | appropriate      | ensure it is        |        |
|        |         | individual       | authorized and      |        |
|        |         | within the       | valid.              |        |
|        |         | Business Unit to |                     |        |
|        |         | authorize the    |                     |        |
|        |         | obligation.      |                     |        |
+--------+---------+------------------+---------------------+--------+
| FM     | Obl     | An obligation is | Once an obligating  | FME-02 |
| 2      | igation | recorded in the  | document passes     |        |
| .3.2.7 | Records | General Ledger.  | funding and         | FME-08 |
|        | in      |                  | tolerance checks,   |        |
|        | General |                  | it is recorded in   | FME-12 |
|        | Ledger  |                  | the General Ledger. |        |
|        |         |                  |                     | GLB-01 |
|        |         |                  | Entries are         |        |
|        |         |                  | recorded using      | GLC-01 |
|        |         |                  | USSGL Account       |        |
|        |         |                  | Transaction Listing | GLC-05 |
|        |         |                  | provided in the     |        |
|        |         |                  | current TFM.        | GLC-06 |
|        |         |                  |                     |        |
|        |         |                  | Examples include,   |        |
|        |         |                  | but are not limited |        |
|        |         |                  | to, the following   |        |
|        |         |                  | transaction codes   |        |
|        |         |                  | from the current    |        |
|        |         |                  | TFM:                |        |
|        |         |                  |                     |        |
|        |         |                  | TFM-B306 To record  |        |
|        |         |                  | current-year        |        |
|        |         |                  | undelivered orders  |        |
|        |         |                  | without an advance. |        |
|        |         |                  |                     |        |
|        |         |                  | TFM-B308 To record  |        |
|        |         |                  | current-year        |        |
|        |         |                  | undelivered orders  |        |
|        |         |                  | with an advance.    |        |
+--------+---------+------------------+---------------------+--------+

##  2.3.3 **Funds Check Prior to Obligation**

The Funds Check Prior to Obligation process refers to contractual
acquisitions for which commitments and obligations are used. Included
are steps to compare an obligation request to an underlying commitment,
assess availability of funds, and liquidate commitments at the time of
obligation.

Please note that the 'yes' response for decision point FM 2.3.3.3 "Pass
Tolerance Check?" is the trigger point for the Funds Verification and
Validation flows (2.3.4 and 2.3.5).

The steps contained in the flowchart below describe the procedures
necessary to perform a funds check prior to the obligation of funds.

## FM 2.3.3 -- Funds Check Prior to Obligation Flowchart {#fm-2.3.3-funds-check-prior-to-obligation-flowchart .unnumbered}

![](media/image15.wmf){width="6.490277777777778in"
height="4.903472222222222in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Funds Management Funds Check Prior to Obligation process steps are
described as follows:

+---------+-----------+-------------------+-------------------+-------+
| Step ID | Step Name | Step Description  | Business Rules    | CFSR  |
|         |           |                   |                   | Req.  |
+=========+===========+===================+===================+=======+
| FM      | O         | The amount of the | Once the Core     | F     |
| 2.3.3.1 | bligation | pending           | Financial System  | ME-02 |
|         | Amount    | obligation is     | determines a      |       |
|         | Equal to  | compared to the   | commitment exists | S     |
|         | Co        | amount of the     | related to this   | MB-03 |
|         | mmitment? | applicable        | obligation, it    |       |
|         |           | commitment to     | determines if the | S     |
|         |           | determine if the  | obligation amount | MC-02 |
|         |           | obligation is     | equals the        |       |
|         |           | equal to the      | commitment        | S     |
|         |           | commitment        | amount.           | MC-08 |
|         |           | recorded in the   |                   |       |
|         |           | Core Financial    |                   |       |
|         |           | System.           |                   |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | O         | The amount of the | If the obligation | F     |
| 2.3.3.2 | bligation | pending           | amount is not     | ME-02 |
|         | Amount    | obligation is     | equal to the      |       |
|         | Less than | compared to the   | commitment        | S     |
|         | the       | amount of the     | amount, determine | MB-03 |
|         | Co        | applicable        | if the obligation |       |
|         | mmitment? | commitment to     | amount requested  | S     |
|         |           | determine if the  | is less than the  | MC-02 |
|         |           | obligation amount | commitment        |       |
|         |           | requested is less | recorded in the   | S     |
|         |           | than the          | Core Financial    | MC-08 |
|         |           | commitment        | System.           |       |
|         |           | recorded in the   |                   |       |
|         |           | Core Financial    |                   |       |
|         |           | System.           |                   |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Pass      | The amount by     | Agencies set      | S     |
| 2.3.3.3 | Tolerance | which an          | tolerance levels  | MB-19 |
|         | Check?    | obligation        | in accordance     |       |
|         |           | exceeds a         | with applicable   | S     |
|         |           | commitment is     | rules,            | MB-20 |
|         |           | compared line     | regulations, and  |       |
|         |           | item by line item | agency guidelines |       |
|         |           | to pre-determined | (e.g. FAR, agency |       |
|         |           | tolerance levels  | policy and        |       |
|         |           | for quantities    | procedures).      |       |
|         |           | and prices of     |                   |       |
|         |           | goods or          |                   |       |
|         |           | services.         |                   |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Resolve   | Designated        | Designated        | F     |
| 2.3.3.4 | Issue     | personnel perform | personnel resolve | MD-05 |
|         |           | applicable        | funding issues in |       |
|         |           | actions to        | accordance with   | S     |
|         |           | resolve the       | applicable rules, | MB-16 |
|         |           | funding issue.    | regulations, and  |       |
|         |           |                   | agency            | S     |
|         |           |                   | guidelines.       | MB-18 |
|         |           |                   |                   |       |
|         |           |                   | If funding is not | S     |
|         |           |                   | made available,   | MC-09 |
|         |           |                   | the obligation    |       |
|         |           |                   | request is        |       |
|         |           |                   | rejected.         |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Issue     | If the amount of  | The Core          |       |
| 2.3.3.5 | Resolved? | the obligation    | Financial System  |       |
|         |           | request exceeds   | should route the  |       |
|         |           | the tolerance     | funding issues to |       |
|         |           | level within the  | applicable        |       |
|         |           | Core Financial    | authorized        |       |
|         |           | System and/or     | personnel who     |       |
|         |           | funds are not     | will either       |       |
|         |           | available,        | discontinue the   |       |
|         |           | research must be  | transaction or    |       |
|         |           | performed to      | make funds        |       |
|         |           | identify and      | available.        |       |
|         |           | resolve the       |                   |       |
|         |           | funding issue.    |                   |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Reject    | If the issue is   | Agencies should   | S     |
| 2.3.3.6 | O         | not resolved, the | designate         | MB-18 |
|         | bligation | obligation        | applicable        |       |
|         | Request   | request is        | personnel to      |       |
|         |           | rejected.         | monitor           |       |
|         |           |                   | obligation        |       |
|         |           |                   | requests, which   |       |
|         |           |                   | fail to pass      |       |
|         |           |                   | funds checks and  |       |
|         |           |                   | reject such       |       |
|         |           |                   | requests as       |       |
|         |           |                   | required.         |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Generate  | Following the     | The message       | T     |
| 2.3.3.7 | Message   | rejection of the  | should be         | LE-07 |
|         | for       | obligation        | initiated         |       |
|         | Business  | request, a        | electronically    | T     |
|         | Unit and  | message is        | once the          | LE-08 |
|         | Ac        | generated for the | obligation        |       |
|         | quisition | Business Unit and | request is        |       |
|         |           | Acquisition       | rejected.         |       |
|         |           | Office.           |                   |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Not       | Notification is   | The message       | T     |
| 2.3.3.8 | ification | sent to the       | should be         | LE-07 |
|         | Sent to   | Business          | electronically    |       |
|         | Business  | Unit/Acquisition  | routed to         | T     |
|         | Unit/Ac   | Office of the     | applicable        | LE-08 |
|         | quisition | rejected          | personnel within  |       |
|         | Office    | obligation.       | the Business Unit |       |
|         |           |                   | and Acquisition   |       |
|         |           |                   | Office (e.g.,     |       |
|         |           |                   | requisitioner,    |       |
|         |           |                   | acquisition       |       |
|         |           |                   | official).        |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Is this   | Determine if this | The Core          |       |
| 2.3.3.9 | the Final | is the last       | Financial System  |       |
|         | O         | obligation to be  | should check      |       |
|         | bligation | made from this    | whether funds     |       |
|         | on this   | commitment.       | will remain on    |       |
|         | Co        |                   | the commitment    |       |
|         | mmitment? |                   | based upon        |       |
|         |           |                   | whether the       |       |
|         |           |                   | requisitioner has |       |
|         |           |                   | indicated in the  |       |
|         |           |                   | system that       |       |
|         |           |                   | remaining funds   |       |
|         |           |                   | should be         |       |
|         |           |                   | de-committed.     |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Liquidate | The portion of    | The agency must   | S     |
| 2       | Portion   | the commitment    | liquidate the     | MC-02 |
| .3.3.10 | of        | applicable to the | commitment by     |       |
|         | C         | obligation is     | posting entries   |       |
|         | ommitment | liquidated.       | to the Core       |       |
|         | that is   |                   | Financial System  |       |
|         | Obligated |                   | using the USSGL   |       |
|         |           |                   | Account           |       |
|         |           |                   | Transaction       |       |
|         |           |                   | Listing in the    |       |
|         |           |                   | current TFM. The  |       |
|         |           |                   | agency reverses   |       |
|         |           |                   | (only for the     |       |
|         |           |                   | portion of the    |       |
|         |           |                   | commitment that   |       |
|         |           |                   | is obligated) the |       |
|         |           |                   | previously        |       |
|         |           |                   | identified (FM    |       |
|         |           |                   | 2.3.1.4,          |       |
|         |           |                   | Commitment        |       |
|         |           |                   | Records in        |       |
|         |           |                   | General Ledger)   |       |
|         |           |                   | entries.          |       |
|         |           |                   |                   |       |
|         |           |                   | Examples include  |       |
|         |           |                   | but are not       |       |
|         |           |                   | limited to, the   |       |
|         |           |                   | following         |       |
|         |           |                   | transaction codes |       |
|         |           |                   | from the current  |       |
|         |           |                   | TFM:              |       |
|         |           |                   |                   |       |
|         |           |                   | TFM-B302 To       |       |
|         |           |                   | record a          |       |
|         |           |                   | commitment of     |       |
|         |           |                   | unobligated       |       |
|         |           |                   | amounts in        |       |
|         |           |                   | programs subject  |       |
|         |           |                   | to apportionment. |       |
|         |           |                   |                   |       |
|         |           |                   | TFM-B304 To       |       |
|         |           |                   | record a          |       |
|         |           |                   | commitment of     |       |
|         |           |                   | unobligated       |       |
|         |           |                   | balances in       |       |
|         |           |                   | programs exempt   |       |
|         |           |                   | from              |       |
|         |           |                   | apportionment.    |       |
+---------+-----------+-------------------+-------------------+-------+
| FM      | Entire    | If the obligation | The agency        |       |
| 2       | C         | and commitment    | reverses the      |       |
| .3.3.11 | ommitment | are equal or if   | previously        |       |
|         | L         | the obligation    | identified (FM    |       |
|         | iquidated | has been          | 2.3.1.4,          |       |
|         | in the    | identified as the | Commitment        |       |
|         | General   | final one to be   | Records in        |       |
|         | Ledger    | made against the  | General Ledger)   |       |
|         |           | commitment, the   | transaction codes |       |
|         |           | entire commitment | from the current  |       |
|         |           | or remaining      | TFM.              |       |
|         |           | amount is         |                   |       |
|         |           | liquidated in the | Examples include, |       |
|         |           | General Ledger.   | but are not       |       |
|         |           |                   | limited to, the   |       |
|         |           |                   | following         |       |
|         |           |                   | transaction codes |       |
|         |           |                   | from the current  |       |
|         |           |                   | TFM:              |       |
|         |           |                   |                   |       |
|         |           |                   | TFM-B302 To       |       |
|         |           |                   | record a          |       |
|         |           |                   | commitment of     |       |
|         |           |                   | unobligated       |       |
|         |           |                   | amounts in        |       |
|         |           |                   | programs subject  |       |
|         |           |                   | to apportionment. |       |
|         |           |                   |                   |       |
|         |           |                   | TFM-B304 To       |       |
|         |           |                   | record a          |       |
|         |           |                   | commitment of     |       |
|         |           |                   | unobligated       |       |
|         |           |                   | balances in       |       |
|         |           |                   | programs exempt   |       |
|         |           |                   | from              |       |
|         |           |                   | apportionment.    |       |
+---------+-----------+-------------------+-------------------+-------+

##  2.3.4 **Unexpired Funds Validation and Verification**

Unexpired funds refer to balances, which are still available under the
agency's spending authority. As prescribed in OMB Circular A-11,
Agencies are responsible for keeping appropriate fund balances,
including the balances for commitments, obligations and expenditures, to
ensure accurate and timely verification and reporting of available
funding. The Unexpired Funds Validation and Verification process
describes the steps required to validate and verify the availability of
unexpired funds for spending transactions.

## FM 2.3.4 -- Unexpired Funds Validation and Verification Flowchart  {#fm-2.3.4-unexpired-funds-validation-and-verification-flowchart .unnumbered}

![](media/image16.wmf){width="6.490277777777778in"
height="4.878472222222222in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Unexpired Funds Validation and Verification process steps are
described as follows:

+---------+-------------+----------------+-----------------+----------+
| Step ID | > Step Name | > Step         | Business Rules  | > CFSR   |
|         |             | > Description  |                 | > Req.   |
+=========+=============+================+=================+==========+
| **FM    | **Document  | **The document | **Combinations  | **       |
| 2.      | data with   | represents the | of accounting   | SMB-21** |
| 3.4.1** | accounting  | detailed       | classification  |          |
|         | cla         | account        | elements must   |          |
|         | ssification | distribution,  | be valid and    |          |
|         | elements**  | including      | active.**       |          |
|         |             | appropriate    |                 |          |
|         |             | accounting     |                 |          |
|         |             | classification |                 |          |
|         |             | elements to be |                 |          |
|         |             | submitted for  |                 |          |
|         |             | funds          |                 |          |
|         |             | availability   |                 |          |
|         |             | v              |                 |          |
|         |             | erification.** |                 |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Funding   | **Verification | **An agency is  | **       |
| 2.      | established | that an        | responsible for | FME-01** |
| 3.4.2** | for         | Allotment or   | establishing a  |          |
|         | accounting  | any lower      | policy for      |          |
|         | cla         | level          | administrative  |          |
|         | ssification | distribution   | control of      |          |
|         | line?**     | was made to    | Funds.**        |          |
|         |             | the Allotment  |                 |          |
|         |             | pool indicated | **The policy    |          |
|         |             | by the account | must also       |          |
|         |             | distribution   | address         |          |
|         |             | (accounting    | restricting     |          |
|         |             | classification | obligations and |          |
|         |             | line) and the  | expenditures    |          |
|         |             | established    | from exceeding  |          |
|         |             | level of Funds | the lower of    |          |
|         |             | Control as     | the amount of   |          |
|         |             | established by | apportionments  |          |
|         |             | the agency as  | made by OMB or  |          |
|         |             | per Appendix H | the amount      |          |
|         |             | of OMB         | available for   |          |
|         |             | Circular       | obligation      |          |
|         |             | A-11.**        | and/or          |          |
|         |             |                | expenditure in  |          |
|         |             |                | the TAFS.**     |          |
|         |             |                |                 |          |
|         |             |                | **See OMB       |          |
|         |             |                | Circular A-11,  |          |
|         |             |                | Appendix H --   |          |
|         |             |                | Checklist For   |          |
|         |             |                | Fund Control    |          |
|         |             |                | Regulations.**  |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Message   | **Electronic   | **Business unit | **       |
| 2.      | to preparer | notification   | to be notified  | SMB-12** |
| 3.4.3** | that funds  | to document    | an Allotment or |          |
|         | are not     | preparer that  | lower level     | **       |
|         | established | funds were     | distribution    | TLE-07** |
|         | for         | never          | was never       |          |
|         | accounting  | established    | established for | **       |
|         | cla         | for the        | the accounting  | TLE-09** |
|         | ssification | account        | classification  |          |
|         | line**      | distribution   | element         |          |
|         |             | line.**        | specified in    |          |
|         |             |                | the account     |          |
|         |             |                | distribution.** |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Research  | **If funds are | **Designated    | **       |
| 2.      | and Resolve | not available, | personnel       | FMD-05** |
| 3.4.4** | Issues**    | the Business   | resolve         |          |
|         |             | Unit will      | applicable      | **       |
|         |             | research and   | issues in       | SMB-16** |
|         |             | resolve the    | accordance with |          |
|         |             | issue.**       | applicable      | **       |
|         |             |                | rules,          | SMC-09** |
|         |             |                | regulations,    |          |
|         |             |                | and agency      |          |
|         |             |                | guidelines.**   |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | > **Funding | > **The        | **The agency    | **       |
| 2.      | > Issue     | > appropriate  | shall resolve   | SMC-09** |
| 3.4.5** | >           | > functional   | funding issues  |          |
|         | Resolved?** | > area         | in accordance   |          |
|         |             | > determines   | with            |          |
|         |             | > if funding   | age             |          |
|         |             | > issues       | ncy-established |          |
|         |             | > related to   | policies and    |          |
|         |             | > the document | procedures.**   |          |
|         |             | > can be       |                 |          |
|         |             | > resolved.**  |                 |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | > **Reject  | > **Documents  | **Agencies      | **       |
| 2.      | >           | > that do not  | should          | SMB-11** |
| 3.4.6** |  Document** | > pass funding | designate       |          |
|         |             | > validation   | applicable      | **       |
|         |             | > and          | personnel to    | SMB-12** |
|         |             | > verification | monitor         |          |
|         |             | > checks are   | documents that  | **       |
|         |             | > rejected.**  | fail to pass    | SMB-13** |
|         |             |                | funds checks    |          |
|         |             |                | and reject such | **       |
|         |             |                | documents.**    | SMB-18** |
|         |             |                |                 |          |
|         |             |                | **The           | **       |
|         |             |                | originator of   | SMC-09** |
|         |             |                | the document is |          |
|         |             |                | electronically  |          |
|         |             |                | notified that   |          |
|         |             |                | the document    |          |
|         |             |                | has been        |          |
|         |             |                | rejected due to |          |
|         |             |                | lack of         |          |
|         |             |                | available       |          |
|         |             |                | funding.**      |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | *           | **Verification | **An agency is  | **       |
| 2.      | *Sufficient | that an        | responsible for | FME-01** |
| 3.4.7** | Funding     | Allotment or   | establishing a  |          |
|         | A           | any lower      | policy for      | **       |
|         | vailable?** | level          | administrative  | FME-02** |
|         |             | distribution   | control of      |          |
|         |             | was made to    | Funds.**        | **       |
|         |             | the 'funding   |                 | FME-03** |
|         |             | pool' as       | **The policy    |          |
|         |             | indicated by   | must also       | **       |
|         |             | the account    | address         | FME-04** |
|         |             | distribution   | restricting     |          |
|         |             | (accounting    | obligations and | **       |
|         |             | classification | expenditures    | FME-10** |
|         |             | line) and the  | from exceeding  |          |
|         |             | established    | *the lower of*  |          |
|         |             | level of Funds | the amount of   |          |
|         |             | Control as     | apportionments  |          |
|         |             | established by | made by OMB or  |          |
|         |             | the agency as  | the amount      |          |
|         |             | per Appendix H | available for   |          |
|         |             | of OMB         | obligation      |          |
|         |             | Circular       | and/or          |          |
|         |             | A-11.**        | expenditure in  |          |
|         |             |                | the TAFS.**     |          |
|         |             |                |                 |          |
|         |             |                | **See OMB       |          |
|         |             |                | Circular A-11,  |          |
|         |             |                | Appendix H --   |          |
|         |             |                | Checklist for   |          |
|         |             |                | Fund Control    |          |
|         |             |                | Regulations**   |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Pass      | **Validation   | **The agency    | **       |
| 2.      | Ant         | that the       | must verify     | FME-01** |
| 3.4.8** | ideficiency | amount of      | that the amount |          |
|         | Test?**     | funding 'drawn | of the          | **       |
|         |             | down' does not | transaction for | FME-10** |
|         |             | put the TAFS   | the fund code   |          |
|         |             | into an        | cited, when     |          |
|         |             | Antideficiency | added together  |          |
|         |             | condition.**   | with any and    |          |
|         |             |                | all other fund  |          |
|         |             |                | codes (if       |          |
|         |             |                | applicable) for |          |
|         |             |                | the specific    |          |
|         |             |                | TAFS does not   |          |
|         |             |                | exceed the      |          |
|         |             |                | overall amount  |          |
|         |             |                | apportioned by  |          |
|         |             |                | OMB.**          |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Message   | **Electronic   | **Business unit | > **     |
| 2.      | to preparer | notification   | to be notified  | SMB-12** |
| 3.4.9** | that funds  | to document    | that funds are  | >        |
|         | are not     | preparer that  | not available   | > **     |
|         | available   | there are      | and that the    | TLE-07** |
|         | for         | insufficient   | Funds Override  | >        |
|         | accounting  | funds          | Official has    | > **     |
|         | cla         | available for  | been            | TLE-09** |
|         | ssification | the account    | notified.**     |          |
|         | line**      | distribution   |                 |          |
|         |             | line.**        |                 |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Message   | **Electronic   | **As a part of  | > **     |
| 2.3     | to Override | notification   | providing OMB   | TLE-07** |
| .4.10** | Official    | to the         | with the        |          |
|         | for Failed  | designated     | agency's Funds  |          |
|         | Funds       | Funds Override | Control policy  |          |
|         | Check**     | Official that  | and             |          |
|         |             | there are      | regulations, an |          |
|         |             | insufficient   | appropriate     |          |
|         |             | funds          | individual is   |          |
|         |             | available for  | identified who  |          |
|         |             | the account    | is responsible  |          |
|         |             | distribution   | for any         |          |
|         |             | line.**        | obligation or   |          |
|         |             |                | expenditure     |          |
|         |             |                | exceeding the   |          |
|         |             |                | amount          |          |
|         |             |                | available in    |          |
|         |             |                | the             |          |
|         |             |                | appropriation   |          |
|         |             |                | or fund         |          |
|         |             |                | account, the    |          |
|         |             |                | OMB             |          |
|         |             |                | apportionment   |          |
|         |             |                | or              |          |
|         |             |                | r               |          |
|         |             |                | eapportionment, |          |
|         |             |                | the allotment   |          |
|         |             |                | or              |          |
|         |             |                | sub-allotments  |          |
|         |             |                | made by the     |          |
|         |             |                | agency, any     |          |
|         |             |                | statutory       |          |
|         |             |                | limitations,    |          |
|         |             |                | and any other   |          |
|         |             |                | administrative  |          |
|         |             |                | subdivision of  |          |
|         |             |                | funds made by   |          |
|         |             |                | the agency.**   |          |
|         |             |                |                 |          |
|         |             |                | **The agency    |          |
|         |             |                | must also       |          |
|         |             |                | provide         |          |
|         |             |                | procedures for  |          |
|         |             |                | dealing with    |          |
|         |             |                | violations of   |          |
|         |             |                | the             |          |
|         |             |                | Antideficiency  |          |
|         |             |                | Act as well as  |          |
|         |             |                | violations of   |          |
|         |             |                | other           |          |
|         |             |                | administrative  |          |
|         |             |                | subdivision of  |          |
|         |             |                | funds that are  |          |
|         |             |                | not violations  |          |
|         |             |                | of the          |          |
|         |             |                | Antideficiency  |          |
|         |             |                | Act.**          |          |
|         |             |                |                 |          |
|         |             |                | **See OMB       |          |
|         |             |                | Circular A-11,  |          |
|         |             |                | Appendix H --   |          |
|         |             |                | Checklist for   |          |
|         |             |                | Fund Control    |          |
|         |             |                | Regulations.**  |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Age       | **Process to   | **As a part of  | **       |
| 2.3     | ncy-defined | allow review   | providing OMB   | SMB-10** |
| .4.11** | process for | and, if        | with the        |          |
|         | override    | appropriate,   | agency's Funds  |          |
|         | approval of | approval for   | Control policy  |          |
|         | tr          | the            | and             |          |
|         | ansaction** | transaction.   | regulations, an |          |
|         |             | This would     | appropriate     |          |
|         |             | occur under a  | individual is   |          |
|         |             | CR or other    | identified who  |          |
|         |             | circumstances  | is responsible  |          |
|         |             | where the      | for any         |          |
|         |             | Funds Override | obligation or   |          |
|         |             | Official is    | expenditure     |          |
|         |             | aware of       | exceeding the   |          |
|         |             | additional     | amount          |          |
|         |             | funding        | available in    |          |
|         |             | available to   | the             |          |
|         |             | cover the      | appropriation   |          |
|         |             | transaction    | or fund         |          |
|         |             | amount so as   | account, the    |          |
|         |             | not to put the | OMB             |          |
|         |             | TAFS into an   | apportionment   |          |
|         |             | A              | or              |          |
|         |             | nti-deficiency | r               |          |
|         |             | condition.**   | eapportionment, |          |
|         |             |                | the allotment   |          |
|         |             |                | or              |          |
|         |             |                | sub-allotments  |          |
|         |             |                | made by the     |          |
|         |             |                | agency, any     |          |
|         |             |                | statutory       |          |
|         |             |                | limitations,    |          |
|         |             |                | and any other   |          |
|         |             |                | administrative  |          |
|         |             |                | subdivision of  |          |
|         |             |                | funds made by   |          |
|         |             |                | the agency.**   |          |
|         |             |                |                 |          |
|         |             |                | **The agency    |          |
|         |             |                | must also       |          |
|         |             |                | provide         |          |
|         |             |                | procedures for  |          |
|         |             |                | dealing with    |          |
|         |             |                | violations of   |          |
|         |             |                | the             |          |
|         |             |                | Antideficiency  |          |
|         |             |                | Act as well as  |          |
|         |             |                | violations of   |          |
|         |             |                | other           |          |
|         |             |                | administrative  |          |
|         |             |                | subdivision of  |          |
|         |             |                | funds that are  |          |
|         |             |                | not violations  |          |
|         |             |                | of the          |          |
|         |             |                | Antideficiency  |          |
|         |             |                | Act.**          |          |
|         |             |                |                 |          |
|         |             |                | **See OMB       |          |
|         |             |                | Circular A-11,  |          |
|         |             |                | Appendix H --   |          |
|         |             |                | Checklist for   |          |
|         |             |                | Fund Control    |          |
|         |             |                | Regulations.**  |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **Override  | **If override  | **The agency    | **       |
| 2.3     | Approved?** | approval has   | Funds Override  | SMC-09** |
| .4.12** |             | occurred, the  | Official must   |          |
|         |             | transaction    | ensure          |          |
|         |             | posts to the   | sufficient      |          |
|         |             | General        | applicable      |          |
|         |             | Ledger. If     | funding is      |          |
|         |             | override       | available prior |          |
|         |             | approval has   | to allowing the |          |
|         |             | not occurred,  | transaction to  |          |
|         |             | notification   | record to the   |          |
|         |             | is sent to the | General         |          |
|         |             | Business Unit  | Ledger.**       |          |
|         |             | and the        |                 |          |
|         |             | transaction is |                 |          |
|         |             | cancelled.**   |                 |          |
+---------+-------------+----------------+-----------------+----------+
| **FM    | **message   | **Electronic   | **Business Unit | **       |
| 2.3     | to preparer | notification   | to be notified  | TLE-07** |
| .4.13** | that        | to document    | that funds are  |          |
|         | override    | preparer that  | not available   | **       |
|         | for funding | override       | and that the    | TLE-08** |
|         | is not      | approval was   | Funds Override  |          |
|         | approved**  | not granted.** | Official has    |          |
|         |             |                | not approved    |          |
|         |             |                | the override    |          |
|         |             |                | transaction.**  |          |
+---------+-------------+----------------+-----------------+----------+

## 2.3.5 **Expired Funds Validation and Verification**

Expired funds refer to balances that are no longer available under the
agency's spending authority. However, agencies are still responsible for
keeping appropriate fund balances for expired funds to ensure accurate
and timely verification and reporting of expired/cancelled funding. The
process requires validating and verifying the availability of expired
funds for the recording of previously unrecorded obligations and/or
making legitimate upward adjustments to existing obligations until the
expired authority is cancelled and the expired account is closed.

Please see OMB Circular A-11 for additional guidance.

**Note:** Verification of available funding in expired accounts is
performed at the fund account or TAFS level as opposed to the detailed
Allotment pool or accounting classification line level for the year-end
closing entries (e.g., when a fund account expires and rolls up all
unobligated balances to USSGL account 4650 Allotments -- Expired
Authority).

## FM 2.3.5 -- Expired Funds Validation and Verification Flowchart  {#fm-2.3.5-expired-funds-validation-and-verification-flowchart .unnumbered}

## ![](media/image17.wmf){width="6.490277777777778in" height="4.878472222222222in"} {#section-5 .unnumbered}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Expired Funds Validation and Verification process steps are
described as follows:

+---------+------------+----------------+-----------------+----------+
| Step ID | Step Name  | Step           | Business Rules  | CFSR     |
|         |            | Description    |                 | Req.     |
+=========+============+================+=================+==========+
| **FM    | **Upward   | **The detailed | **The detail    | **       |
| 2.      | Adjustment | upward         | data from the   | SMB-21** |
| 3.5.1** | Document   | adjustment     | document being  |          |
|         | Data**     | data to be     | processed and   |          |
|         |            | submitted to   | submitted for a |          |
|         |            | funds          | funds check.**  |          |
|         |            | availability   |                 |          |
|         |            | v              |                 |          |
|         |            | erification.** |                 |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **         | **Verification | **An agency is  | **       |
| 2.      | Sufficient | that there is  | responsible for | FME-02** |
| 3.5.2** | expired    | sufficient     | establishing a  |          |
|         | funding    | monies         | policy for      | **       |
|         | av         | available in   | administrative  | FME-03** |
|         | ailable?** | the            | control of      |          |
|         |            | Allo           | Funds.**        | **       |
|         |            | tments-Expired |                 | FME-04** |
|         |            | Authority      |                 |          |
|         |            | account to     |                 | **       |
|         |            | cover the      |                 | FME-10** |
|         |            | upward         |                 |          |
|         |            | adjustment to  |                 | **       |
|         |            | an existing    |                 | SMB-11** |
|         |            | obligation.**  |                 |          |
|         |            |                |                 | **       |
|         |            |                |                 | SMB-12** |
|         |            |                |                 |          |
|         |            |                |                 | **       |
|         |            |                |                 | SMB-13** |
|         |            |                |                 |          |
|         |            |                |                 | **       |
|         |            |                |                 | SMC-09** |
+---------+------------+----------------+-----------------+----------+
| **FM    | **Message  | **Electronic   | **Business Unit | **       |
| 2.      | to         | notification   | to be notified  | TLE-07** |
| 3.5.3** | preparer   | to document    | that funds are  |          |
|         | that funds | preparer that  | not available   | **       |
|         | are not    | there are      | and that the    | TLE-08** |
|         | available  | insufficient   | Funds Override  |          |
|         | for        | funds          | Official has    |          |
|         | accounting | available for  | been            |          |
|         | clas       | the account    | notified.**     |          |
|         | sification | distribution   |                 |          |
|         | line**     | line.**        |                 |          |
+---------+------------+----------------+-----------------+----------+
| > **FM  | **Research | **If funds are | **Designated    | **       |
| > 2.    | and        | not available, | personnel       | FMD-05** |
| 3.5.4** | Resolve    | the Business   | resolve         |          |
|         | Issues**   | Unit will      | applicable      | **       |
|         |            | research and   | issues in       | SMB-16** |
|         |            | resolve the    | accordance with |          |
|         |            | issue.**       | applicable      | **       |
|         |            |                | rules,          | SMC-09** |
|         |            |                | regulations,    |          |
|         |            |                | and agency      |          |
|         |            |                | guidelines.**   |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **Message  | **Electronic   | **As a part of  | **       |
| 2.      | to         | notification   | providing OMB   | TLE-07** |
| 3.5.5** | Override   | to the         | with the        |          |
|         | Official   | designated     | agency's Funds  | **       |
|         | for Failed | Funds Override | Control policy  | TLE-08** |
|         | Funds      | Official that  | and             |          |
|         | Check**    | there are      | regulations, an |          |
|         |            | insufficient   | appropriate     |          |
|         |            | funds          | individual is   |          |
|         |            | available for  | identified who  |          |
|         |            | the account    | is responsible  |          |
|         |            | distribution   | for any         |          |
|         |            | line.**        | obligation or   |          |
|         |            |                | expenditure     |          |
|         |            |                | exceeding the   |          |
|         |            |                | amount          |          |
|         |            |                | available in    |          |
|         |            |                | the             |          |
|         |            |                | appropriation   |          |
|         |            |                | or fund         |          |
|         |            |                | account, the    |          |
|         |            |                | OMB             |          |
|         |            |                | apportionment   |          |
|         |            |                | or              |          |
|         |            |                | r               |          |
|         |            |                | eapportionment, |          |
|         |            |                | the allotment   |          |
|         |            |                | or              |          |
|         |            |                | sub-allotments  |          |
|         |            |                | made by the     |          |
|         |            |                | agency, any     |          |
|         |            |                | statutory       |          |
|         |            |                | limitations,    |          |
|         |            |                | and any other   |          |
|         |            |                | administrative  |          |
|         |            |                | subdivision of  |          |
|         |            |                | funds made by   |          |
|         |            |                | the agency.**   |          |
|         |            |                |                 |          |
|         |            |                | **The agency    |          |
|         |            |                | must also       |          |
|         |            |                | provide         |          |
|         |            |                | procedures for  |          |
|         |            |                | dealing with    |          |
|         |            |                | violations of   |          |
|         |            |                | the             |          |
|         |            |                | Antideficiency  |          |
|         |            |                | Act as well as  |          |
|         |            |                | violations of   |          |
|         |            |                | other           |          |
|         |            |                | administrative  |          |
|         |            |                | subdivision of  |          |
|         |            |                | funds that are  |          |
|         |            |                | not violations  |          |
|         |            |                | of the          |          |
|         |            |                | Antideficiency  |          |
|         |            |                | Act.**          |          |
|         |            |                |                 |          |
|         |            |                | **See OMB       |          |
|         |            |                | Circular A-11,  |          |
|         |            |                | Appendix H -    |          |
|         |            |                | Checklist for   |          |
|         |            |                | Fund Control    |          |
|         |            |                | Regulations.**  |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **Agen     | **Process to   | **As a part of  | **       |
| 2.      | cy-defined | allow review   | providing OMB   | TLE-01** |
| 3.5.6** | process    | and, if        | with the        |          |
|         | for        | appropriate,   | agency's Funds  |          |
|         | override   | approval for   | Control policy  |          |
|         | approval** | the            | and             |          |
|         |            | transaction.   | regulations, an |          |
|         |            | This would     | appropriate     |          |
|         |            | occur under a  | individual is   |          |
|         |            | CR or other    | identified who  |          |
|         |            | circumstances  | is responsible  |          |
|         |            | where the      | for any         |          |
|         |            | Funds Override | obligation or   |          |
|         |            | Official is    | expenditure     |          |
|         |            | aware of       | exceeding the   |          |
|         |            | additional     | amount          |          |
|         |            | funding        | available in    |          |
|         |            | available to   | the             |          |
|         |            | cover the      | appropriation   |          |
|         |            | transaction    | or fund         |          |
|         |            | amount so as   | account, the    |          |
|         |            | not to put the | OMB             |          |
|         |            | TAFS into an   | apportionment   |          |
|         |            | Antideficiency | or              |          |
|         |            | condition.**   | r               |          |
|         |            |                | eapportionment, |          |
|         |            |                | the allotment   |          |
|         |            |                | or              |          |
|         |            |                | sub-allotments  |          |
|         |            |                | made by the     |          |
|         |            |                | agency, any     |          |
|         |            |                | statutory       |          |
|         |            |                | limitations,    |          |
|         |            |                | and any other   |          |
|         |            |                | administrative  |          |
|         |            |                | subdivision of  |          |
|         |            |                | funds made by   |          |
|         |            |                | the agency.**   |          |
|         |            |                |                 |          |
|         |            |                | **The agency    |          |
|         |            |                | must also       |          |
|         |            |                | provide         |          |
|         |            |                | procedures for  |          |
|         |            |                | dealing with    |          |
|         |            |                | violations of   |          |
|         |            |                | the             |          |
|         |            |                | Antideficiency  |          |
|         |            |                | Act as well as  |          |
|         |            |                | violations of   |          |
|         |            |                | other           |          |
|         |            |                | administrative  |          |
|         |            |                | subdivision of  |          |
|         |            |                | funds that are  |          |
|         |            |                | not violations  |          |
|         |            |                | of the          |          |
|         |            |                | Antideficiency  |          |
|         |            |                | Act**           |          |
|         |            |                |                 |          |
|         |            |                | **See OMB       |          |
|         |            |                | Circular A-11,  |          |
|         |            |                | Appendix H -    |          |
|         |            |                | Checklist for   |          |
|         |            |                | Fund Control    |          |
|         |            |                | Regulations**   |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **Override | **If override  | **The agency    | **       |
| 2.      | A          | approval has   | Funds Override  | SMB-18** |
| 3.5.7** | pproved?** | occurred, the  | Official must   |          |
|         |            | transaction    | ensure          |          |
|         |            | posts to the   | sufficient      |          |
|         |            | General        | applicable      |          |
|         |            | Ledger. If     | funding is      |          |
|         |            | override       | available prior |          |
|         |            | approval has   | to allowing the |          |
|         |            | not occurred,  | transaction to  |          |
|         |            | notification   | record to the   |          |
|         |            | is sent to the | General         |          |
|         |            | Business Unit  | Ledger.**       |          |
|         |            | and the        |                 |          |
|         |            | transaction is |                 |          |
|         |            | cancelled.**   |                 |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **Message  | **Electronic   | **Business Unit | **       |
| 2.      | to         | notification   | to be notified  | TLE-07** |
| 3.5.8** | preparer   | to document    | that funds are  |          |
|         | that       | preparer that  | not available   | **       |
|         | override   | override       | and that the    | TLE-08** |
|         | for        | approval was   | Funds Override  |          |
|         | funding is | not granted.** | Official has    |          |
|         | not        |                | not approved    |          |
|         | approved** |                | the override    |          |
|         |            |                | transaction.**  |          |
+---------+------------+----------------+-----------------+----------+
| **FM    | **T        | **The          | **The           | **       |
| 2.      | ransaction | transaction is | transaction is  | FME-02** |
| 3.5.9** | records in | recorded in    | recorded in the |          |
|         | General    | the General    | General Ledger. | **       |
|         | Le         | Ledger.**      | At the same     | FME-04** |
|         | dger/Funds |                | time, the       |          |
|         | Balance    |                | appropriate     | **       |
|         | updated**  |                | funds balances  | FME-08** |
|         |            |                | are also        |          |
|         |            |                | updated thereby | **       |
|         |            |                | keeping the     | FME-10** |
|         |            |                | balances in     |          |
|         |            |                | line with the   | **       |
|         |            |                | General         | FME-12** |
|         |            |                | Ledger.**       |          |
|         |            |                |                 | **       |
|         |            |                | **Examples      | GLB-01** |
|         |            |                | include, but    |          |
|         |            |                | are not limited | **       |
|         |            |                | to, the         | GLC-01** |
|         |            |                | following       |          |
|         |            |                | transaction     | **       |
|         |            |                | codes from the  | GLC-04** |
|         |            |                | current TFM:**  |          |
|         |            |                |                 | **       |
|         |            |                | **TFM-D126 To   | GLC-05** |
|         |            |                | record an       |          |
|         |            |                | upward          | **       |
|         |            |                | adjustment to   | GLC-06** |
|         |            |                | prior-year paid |          |
|         |            |                | delivered       | **       |
|         |            |                | orders.**       | GLD-01** |
|         |            |                |                 |          |
|         |            |                | **TFM-D106 To   | **       |
|         |            |                | record an       | GLD-02** |
|         |            |                | upward          |          |
|         |            |                | adjustment of   | **       |
|         |            |                | prior-year      | GLD-03** |
|         |            |                | unpaid          |          |
|         |            |                | delivered       | **       |
|         |            |                | orders and to   | GLD-04** |
|         |            |                | accrue          |          |
|         |            |                | additional      | **       |
|         |            |                | liability when  | GLD-05** |
|         |            |                | the adjustment  |          |
|         |            |                | is not recorded | **       |
|         |            |                | as a            | GLD-06** |
|         |            |                | prior-period    |          |
|         |            |                | adjustment      | **       |
|         |            |                | (USSGL account  | GLD-07** |
|         |            |                | 7400 or 7401).  |          |
|         |            |                | The authority   | **       |
|         |            |                | has expired.**  | SMC-02** |
+---------+------------+----------------+-----------------+----------+

# **Payment Management Processes**

## **Payment Management Processes**

An effective payment management process ensures payments to vendors are
done so in a timely manner ensuring good stewardship of government
funds. Under the Prompt Payment Act, agencies are required to practice
effective cash management practices in the payment for goods and
services to ensure that invoices are paid within seven (7) days of their
payment due dates and interest penalties for late payments are avoided.
Agencies must also have proper controls in place for monitoring any
interest penalties paid and implementing corrective actions where
necessary.

In addition to the Prompt Payment Act, Chapter 52.232-25---*Prompt
Payment* of the Federal Acquisition Regulation (FAR) establishes the
contractual requirement between Federal agencies and vendors for prompt
payment of invoices, including the notification process for invoice
defects. Late payment interest is calculated based on the rate
established by the Secretary of the Treasury and published semi-annually
via the *Federal Register.*

All vendors, including sole proprietors, corporations, partnership, and
governmental organizations, are required to register in the Central
Contractor Registration (CCR), which is the primary registrant database
for the Federal government. Through validation of registrant
information, CCR shares the data with agencies' finance office and
facilitates the electronic funds transfer (EFT) process.

Included in this chapter are key steps in the processes from requisition
to payment for commercial contracts and small acquisitions disbursed by
Treasury. Although this chapter focuses on payment requests that are the
result of vendor invoices, it must be noted that there are several other
payment request types including, but not limited to, grants, employee
reimbursements, employee awards and payroll. The flowcharts and process
steps for the Payment Management processes detailed in this chapter are:

-   PM 3.1 -- Receipt and Acceptance of Goods. This section describes
    the procedures necessary for the inspection, receipt, acceptance and
    return of goods.

-   PM 3.2 -- Receipt and Acceptance of Services. This section describes
    the process for the receipt and acceptance of services.

-   PM 3.3 -- Accounts Payable and Invoicing Processes

-   PM 3.3.1 Invoice Entry. This section describes the process for
    entering an invoice into the Core Financial System and matching the
    required supporting documentation. Also included are related
    accounting entries and the steps to ensure proper approval and
    verification of an invoice.

-   PM 3.3.2 Invoice Processing. This section describes the steps
    associated with processing an invoice in the Core Financial System.
    Also included are related accounting entries and the steps to ensure
    proper approval and verification of an invoice.

-   PM 3.3.3 Credit Memo. This section describes the steps associated
    with processing a credit memorandum. Credit memos are warehoused and
    offset against outstanding invoices. The payment is processed when
    the amount of the invoice or invoices exceed the credit memo
    balance.

-   PM 3.4 -- Disbursements

-   PM 3.4.1 Disbursements for Bulk Files (ACH/EFT, CCD, CCD+, CTX, and
    Checks). This section depicts the actions performed from the
    warehousing of a bulk file through payment to a payee. Key steps
    include submitting the bulk file to Treasury, certification of
    payments to be disbursed, and disbursements.

-   PM 3.4.2 Disbursements for Small Volume and Same or Next Day
    Payments. This section depicts the actions performed for payments
    which must be expedited. Key steps include submitting the file to
    treasury, certification of payments to be disbursed, and
    disbursements.

-   PM 3.5 -- Returned Payments -- ACH, Check, Same Day. This section
    provides the key steps for the cancellation and return of payments
    from Treasury to the agency. The payment instruments include checks,
    ACH, CTX, CCD, CCD+, and Fedwires.

-   PM 3.6 -- Data Objects and Data Elements. This section is currently
    under development with Treasury FMS.

Excluded from the scope of this chapter are the following:

-   Payment management processes for payments not disbursed by Treasury

-   Acquisition processes

-   Processes for maintenance of the Central Contractor Registry

-   Intragovernmental Payment and Collection (IPAC) transactions

-   Reimbursable activity

-   Imprest Funds

-   Travel

-   Payroll

-   Employee awards

-   Credit card payments

-   Grants

-   Loans

-   Cooperative agreements

-   Canceled funds

-   Foreign currency

-   Internal offsets between Accounts Payable and Accounts Receivable.

The following flowchart depicts the sequence and inter-relationship of
the Spending Chain Processes:

![](media/image18.wmf){width="6.492361111111111in"
height="4.959722222222222in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

## **Receipt and Acceptance of Goods**

Receipt and Acceptance of Goods refers to the process of receiving
physical goods, performing an inspection, and either accepting or
rejecting the delivery based on damage, quantity, or other criteria as
defined by the contract. Depending on the nature of the goods received
and the functional organization of an agency, the "Receiving" swim lane
in the flowchart refers to a variety of locations in an agency rather
than a specific office or area within an agency.

## PM 3.1 -- Receipt and Acceptance of Goods Flowchart {#pm-3.1-receipt-and-acceptance-of-goods-flowchart .unnumbered}

![](media/image19.wmf){width="6.492361111111111in"
height="4.979166666666667in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Receipt and Acceptance of Goods process steps are
described as follows:

+-------+---------+-------------------+------------------------+------+
| Step  | Step    | Step Description  | Business Rules         | CFSR |
| ID    | Name    |                   |                        | Req. |
+=======+=========+===================+========================+======+
| PM    | Receive | Physical goods    | Goods should be        | PM   |
| 3.1.1 | Goods   | are received at a | delivered according to | B-01 |
|       |         | designated        | delivery information   |      |
|       |         | receiving area.   | on the award document. | PM   |
|       |         |                   | Agency procedures      | B-04 |
|       |         |                   | should call for        |      |
|       |         |                   | rejecting delivery of  |      |
|       |         |                   | goods received at      |      |
|       |         |                   | locations other than   |      |
|       |         |                   | the appropriate        |      |
|       |         |                   | receiving site, which  |      |
|       |         |                   | may be a receiving     |      |
|       |         |                   | dock or at the         |      |
|       |         |                   | business unit.         |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Match   | When goods are    | Access to the          |      |
| 3.1.2 | Goods   | received,         | Receiving system and   |      |
|       | to      | Receiving         | receiving transactions |      |
|       | Award   | personnel compare | in the Core Financial  |      |
|       | D       | the items to the  | System must be         |      |
|       | ocument | award document.   | restricted to          |      |
|       |         | Any discrepancies | authorized personnel.  |      |
|       |         | are noted         |                        |      |
|       |         | electronically.   | Goods must be recorded |      |
|       |         |                   | in the agency's asset  |      |
|       |         |                   | management system as   |      |
|       |         |                   | applicable.            |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Q       | If the quantity   |                        |      |
| 3.1.3 | uantity | received exceeds  |                        |      |
|       | R       | the quantity      |                        |      |
|       | eceived | ordered, the      |                        |      |
|       | Greater | excess is         |                        |      |
|       | than    | compared to an    |                        |      |
|       | Award   | allowable         |                        |      |
|       | Do      | tolerance level   |                        |      |
|       | cument? | (see step PM      |                        |      |
|       |         | 3.1.4). This      |                        |      |
|       |         | comparison may be |                        |      |
|       |         | performed         |                        |      |
|       |         | electronically.   |                        |      |
|       |         |                   |                        |      |
|       |         | If the quantity   |                        |      |
|       |         | received is equal |                        |      |
|       |         | to or less than   |                        |      |
|       |         | the quantity      |                        |      |
|       |         | ordered the goods |                        |      |
|       |         | are inspected for |                        |      |
|       |         | damage (see step  |                        |      |
|       |         | PM 3.1.6).        |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Q       | If the quantity   | Agencies can set       | SM   |
| 3.1.4 | uantity | received exceeds  | tolerance levels as    | B-19 |
|       | R       | the quantity      | allowed under          |      |
|       | eceived | ordered, the      | applicable rules,      | SM   |
|       | Greater | excess is         | regulations, and       | B-20 |
|       | than    | compared to an    | agency guidelines (FAR |      |
|       | Al      | allowable         | Volume 1, Part 11,     |      |
|       | lowable | tolerance level.  | Subpart 11.7, agency   |      |
|       | To      | This comparison   | policies and           |      |
|       | lerance | may be performed  | procedures).           |      |
|       | Level?  | electronically.   |                        |      |
|       |         |                   |                        |      |
|       |         | If the quantity   |                        |      |
|       |         | received is       |                        |      |
|       |         | within the        |                        |      |
|       |         | allowable         |                        |      |
|       |         | tolerance level,  |                        |      |
|       |         | it is determined  |                        |      |
|       |         | if this is the    |                        |      |
|       |         | final receipt of  |                        |      |
|       |         | goods on the      |                        |      |
|       |         | award document.   |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Return  | All or a portion  | The return of items    |      |
| 3.1.5 | Goods   | of the goods are  | must be recorded in    |      |
|       |         | returned to the   | the applicable system. |      |
|       |         | originator as     |                        |      |
|       |         | applicable under  |                        |      |
|       |         | the terms of the  |                        |      |
|       |         | contract.         |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Inspect | Goods are         | Goods should be        |      |
| 3.1.6 | for     | inspected for     | inspected for damage   |      |
|       | Damage  | damage once the   | at the time of         |      |
|       |         | goods are         | delivery by applicable |      |
|       |         | received and      | Receiving personnel.   |      |
|       |         | matched to the    |                        |      |
|       |         | award document.   |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Passes  | Confirm goods are | Receiving personnel    |      |
| 3.1.7 | Ins     | free of visible   | assess visible damage  |      |
|       | pection | damage and note   | to goods in accordance |      |
|       | for     | that the goods    | with applicable rules  |      |
|       | Damage? | pass inspection.  | and regulations and    |      |
|       |         | Damaged goods are | agency guidelines      |      |
|       |         | noted             | (e.g., FAR, agency     |      |
|       |         | electronically.   | policy and             |      |
|       |         |                   | procedures).           |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Return  | If the goods are  | The return of goods    |      |
| 3.1.8 | Goods?  | determined to be  | must be within the     |      |
|       |         | damaged and       | contract terms.        |      |
|       |         | repair or         |                        |      |
|       |         | replacement of    | In accordance with the |      |
|       |         | parts is not      | contract terms,        |      |
|       |         | appropriate, all  | replacement components |      |
|       |         | or a portion of   | or parts may be        |      |
|       |         | the goods should  | obtained from the      |      |
|       |         | be returned.      | vendor to correct the  |      |
|       |         |                   | issue.                 |      |
|       |         | Any discrepancies |                        |      |
|       |         | are noted         |                        |      |
|       |         | electronically.   |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Return  | Goods are         | A modification to the  |      |
| 3.1.9 | Goods   | returned if the   | applicable acquisition |      |
|       |         | quantity is in    | instrument is required |      |
|       |         | excess of the     | to increase the        |      |
|       |         | allowable         | obligation of funds    |      |
|       |         | tolerance level.  | for quantities of      |      |
|       |         |                   | goods exceeding        |      |
|       |         | Any discrepancies | tolerance levels. Such |      |
|       |         | are noted         | modification must      |      |
|       |         | electronically.   | occur prior to         |      |
|       |         |                   | performing receipt and |      |
|       |         |                   | acceptance of the      |      |
|       |         |                   | goods. Otherwise, the  |      |
|       |         |                   | goods are returned.    |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Resolve | Inspection issues |                        |      |
| 3     | Issue   | with the goods    |                        |      |
| .1.10 |         | must be resolved, |                        |      |
|       |         | as applicable, if |                        |      |
|       |         | goods are not to  |                        |      |
|       |         | be returned.      |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Goods   | Goods are         | Policies and           |      |
| 3     | Receipt | processed for     | procedures must comply |      |
| .1.11 | Process | receipt.          | with FAR where         |      |
|       |         |                   | applicable. The        |      |
|       |         |                   | receipt of goods must  |      |
|       |         |                   | be performed within    |      |
|       |         |                   | the contract terms.    |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Re      | Receiving         | The receiving document |      |
| 3     | ceiving | personnel enter   | becomes available to   |      |
| .1.12 | D       | receiving data to | the Business Unit. The |      |
|       | ocument | the applicable    | applicable system      |      |
|       |         | system to create  | electronically         |      |
|       |         | a receiving       | notifies the           |      |
|       |         | document. The     | requisitioner in the   |      |
|       |         | system accesses   | Business Unit that     |      |
|       |         | and populates     | goods have been        |      |
|       |         | applicable fields | received.              |      |
|       |         | of the receiving  |                        |      |
|       |         | document with     | The receiving document |      |
|       |         | information from  | becomes available to   |      |
|       |         | the award         | the Core Financial     |      |
|       |         | document.         | System to be matched   |      |
|       |         |                   | with the invoice and   |      |
|       |         |                   | award document         |      |
|       |         |                   | information.           |      |
|       |         |                   |                        |      |
|       |         |                   | Notice of receipt is   |      |
|       |         |                   | sent to the agency's   |      |
|       |         |                   | Acquisition system.    |      |
|       |         |                   |                        |      |
|       |         |                   | A proprietary expense  |      |
|       |         |                   | and budgetary          |      |
|       |         |                   | expenditure for        |      |
|       |         |                   | delivered goods is     |      |
|       |         |                   | recorded in the        |      |
|       |         |                   | General Ledger.        |      |
|       |         |                   | Applicable             |      |
|       |         |                   | obligations, advances, |      |
|       |         |                   | or pre-paid expense    |      |
|       |         |                   | balances are           |      |
|       |         |                   | liquidated.            |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Expense | A proprietary     | The entries are        | PM   |
| 3     | Records | expense, a        | recorded in the        | B-02 |
| .1.13 | in      | budgetary         | General Ledger using   |      |
|       | General | expenditure for   | the USSGL Account      |      |
|       | Ledger  | received goods,   | Transaction Listing    |      |
|       |         | and liquidation   | provided in the        |      |
|       |         | of the associated | current TFM.           |      |
|       |         | obligation is     |                        |      |
|       |         | recorded in the   | Examples include, but  |      |
|       |         | General Ledger.   | are not limited to,    |      |
|       |         | Applicable        | the following          |      |
|       |         | advances or       | transaction codes from |      |
|       |         | pre-paid expense  | the current TFM:       |      |
|       |         | balances are      |                        |      |
|       |         | liquidated.       | TFM-B402 To record the |      |
|       |         |                   | delivery of goods or   |      |
|       |         |                   | services and accrue a  |      |
|       |         |                   | liability.             |      |
|       |         |                   |                        |      |
|       |         |                   | TFM-B404 To record the |      |
|       |         |                   | delivery of goods and  |      |
|       |         |                   | services in the same   |      |
|       |         |                   | year the order was     |      |
|       |         |                   | placed and accrue a    |      |
|       |         |                   | liability. The         |      |
|       |         |                   | current-year expended  |      |
|       |         |                   | authority is less than |      |
|       |         |                   | the original           |      |
|       |         |                   | obligation.            |      |
|       |         |                   |                        |      |
|       |         |                   | TFM-B406 To record the |      |
|       |         |                   | delivery of goods and  |      |
|       |         |                   | services in the same   |      |
|       |         |                   | year the order was     |      |
|       |         |                   | placed and accrue a    |      |
|       |         |                   | liability. The         |      |
|       |         |                   | current-year expended  |      |
|       |         |                   | authority is more than |      |
|       |         |                   | the original           |      |
|       |         |                   | obligation.            |      |
|       |         |                   |                        |      |
|       |         |                   | TFM-B410 To record the |      |
|       |         |                   | delivery of goods or   |      |
|       |         |                   | services for           |      |
|       |         |                   | construction.          |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Final   | Determine if this | Personnel designated   |      |
| 3     | Receipt | is the final      | to perform acceptance  |      |
| .1.14 | of      | receipt of goods  | procedures for receipt |      |
|       | Goods   | for this award    | of goods indicate in   |      |
|       | on      | document. Confirm | the Core Financial     |      |
|       | Award   | that the receipt  | System whether this is |      |
|       | Do      | satisfies the     | the final receipt of   |      |
|       | cument? | quantity on the   | goods for the award    |      |
|       |         | award document.   | document.              |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Record  | If the receipt of | Appropriate procedures |      |
| 3     | Receipt | goods represents  | should be performed to |      |
| .1.15 | of      | the final         | reconcile the award    |      |
|       | Goods   | outstanding       | document to            |      |
|       | as      | obligation on the | documentation of goods |      |
|       | Final   | award document,   | received.              |      |
|       |         | it is recorded as |                        |      |
|       |         | the final receipt |                        |      |
|       |         | of goods.         |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Acc     | The Business Unit | Depending on           | PM   |
| 3     | eptance | or personnel with | contractual terms and  | B-05 |
| .1.16 | Pro     | authority to      | FAR guidelines,        |      |
|       | cedures | approve           | "constructive receipt" |      |
|       | for     | acceptance of     | may apply to certain   |      |
|       | Goods   | goods inspects    | goods. In these cases, |      |
|       | R       | the goods. This   | acceptance procedures  |      |
|       | eceived | person reviews    | may not be required as |      |
|       |         | the electronic    | the services are       |      |
|       |         | receiving         | considered "accepted"  |      |
|       |         | document and is   | after an applicable    |      |
|       |         | responsible for   | amount of time.        |      |
|       |         | validating that   |                        |      |
|       |         | goods are in      | The receipt and        |      |
|       |         | compliance with   | acceptance of goods    |      |
|       |         | contractual       | must be done within    |      |
|       |         | requirements.     | the contract terms.    |      |
|       |         |                   |                        |      |
|       |         |                   | Acceptance is          |      |
|       |         |                   | electronically routed  |      |
|       |         |                   | to Finance to be       |      |
|       |         |                   | matched with the       |      |
|       |         |                   | invoice and award      |      |
|       |         |                   | document.              |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Accept  | If the certifier  | If a required invoice  |      |
| 3     |         | accepts all or a  | has yet to be received |      |
| .1.17 | Goods?  | portion of the    | in Finance,            |      |
|       |         | goods received,   | certification of       |      |
|       |         | the applicable    | receipt and acceptance |      |
|       |         | quantities of     | of goods is stored in  |      |
|       |         | line items from   | the system pending     |      |
|       |         | the award         | receipt of the         |      |
|       |         | document are      | invoice.               |      |
|       |         | accepted. The     |                        |      |
|       |         | electronic        | Acceptance issues must |      |
|       |         | documentation of  | be resolved, as        |      |
|       |         | acceptance is     | applicable.            |      |
|       |         | available to the  |                        |      |
|       |         | Finance area.     |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Issue   | If the issue with | In accordance with     |      |
| 3     | with    | the goods is      | rules, regulations and |      |
| .1.18 | Goods   | resolved and the  | agency guidelines      |      |
|       | Re      | goods are         | (e.g., agency policies |      |
|       | solved? | accepted,         | and procedures, FAR),  |      |
|       |         | acceptance is     | designated officials   |      |
|       |         | recorded. If the  | review applicable      |      |
|       |         | goods are not     | issues related to      |      |
|       |         | accepted, the     | goods and determine    |      |
|       |         | goods should be   | steps to be taken to   |      |
|       |         | returned.         | resolve these issues.  |      |
|       |         |                   |                        |      |
|       |         |                   | Issue resolution must  |      |
|       |         |                   | be made in accordance  |      |
|       |         |                   | with prompt payment    |      |
|       |         |                   | requirements, as       |      |
|       |         |                   | applicable, and        |      |
|       |         |                   | contract terms.        |      |
|       |         |                   |                        |      |
|       |         |                   | If the personnel with  |      |
|       |         |                   | authority for          |      |
|       |         |                   | performing acceptance  |      |
|       |         |                   | determine goods are to |      |
|       |         |                   | be rejected and        |      |
|       |         |                   | returned, he/she       |      |
|       |         |                   | electronically records |      |
|       |         |                   | the items being        |      |
|       |         |                   | rejected and the       |      |
|       |         |                   | expenses recorded at   |      |
|       |         |                   | the time of receipt of |      |
|       |         |                   | goods are adjusted     |      |
|       |         |                   | accordingly.           |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Return  | Return goods to   | Return of goods must   |      |
| 3     | Goods   | the appropriate   | be appropriately       |      |
| .1.19 |         | originator.       | recorded in the agency |      |
|       |         |                   | asset management       |      |
|       |         |                   | system.                |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Acc     | Personnel         | Appropriate personnel  |      |
| 3     | eptance | document          | should be authorized   |      |
| .1.20 | R       | acceptance for    | for documenting        |      |
|       | ecorded | goods that have   | acceptance of goods.   |      |
|       |         | been received.    |                        |      |
|       |         |                   | Expenses are reviewed  |      |
|       |         |                   | periodically by        |      |
|       |         |                   | responsible personnel  |      |
|       |         |                   | in the Finance area.   |      |
|       |         |                   | Appropriate personnel  |      |
|       |         |                   | should follow up on    |      |
|       |         |                   | items for which        |      |
|       |         |                   | receipt and/or         |      |
|       |         |                   | acceptance are         |      |
|       |         |                   | missing.               |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Passes  | The amount that a | The Core Financial     |      |
| 3     | Funds   | receiving         | System must ensure     |      |
| .1.21 | Check?  | document exceeds  | sufficient applicable  |      |
|       |         | an obligation is  | funding is available   |      |
|       |         | subjected to an   | prior to allowing an   |      |
|       |         | edit check to     | expense to be recorded |      |
|       |         | determine whether | in the General Ledger. |      |
|       |         | sufficient funds  |                        |      |
|       |         | are available for |                        |      |
|       |         | the additional    |                        |      |
|       |         | funding of the    |                        |      |
|       |         | overage amount    |                        |      |
|       |         | within the        |                        |      |
|       |         | tolerance.        |                        |      |
|       |         |                   |                        |      |
|       |         | If funds are      |                        |      |
|       |         | available, the    |                        |      |
|       |         | expense records   |                        |      |
|       |         | in the General    |                        |      |
|       |         | Ledger. If funds  |                        |      |
|       |         | are not           |                        |      |
|       |         | available,        |                        |      |
|       |         | notification is   |                        |      |
|       |         | sent to the       |                        |      |
|       |         | Business Unit and |                        |      |
|       |         | Acquisition to    |                        |      |
|       |         | resolve the       |                        |      |
|       |         | issue.            |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | System  | An invoice is     | Award documents should |      |
| 3     | Ge      | generated within  | indicate whether a     |      |
| .1.22 | nerated | the Core          | vendor invoice is      |      |
|       | I       | Financial System  | required for payment.  |      |
|       | nvoice? | for applicable    | (The vendor invoice    |      |
|       |         | transactions for  | may be required by     |      |
|       |         | which an invoice  | Finance prior to       |      |
|       |         | is not required.  | payment but is not     |      |
|       |         |                   | required as part of    |      |
|       |         |                   | the Receiving process. |      |
|       |         |                   | Rather, it may be made |      |
|       |         |                   | available to           |      |
|       |         |                   | applicable personnel   |      |
|       |         |                   | in the Business Unit   |      |
|       |         |                   | for informational      |      |
|       |         |                   | purposes.)             |      |
|       |         |                   |                        |      |
|       |         |                   | In the event a vendor  |      |
|       |         |                   | invoice is not         |      |
|       |         |                   | required, the Core     |      |
|       |         |                   | Financial System       |      |
|       |         |                   | should generate an     |      |
|       |         |                   | internal invoice       |      |
|       |         |                   | document based on      |      |
|       |         |                   | vendor, obligating,    |      |
|       |         |                   | receiving, and         |      |
|       |         |                   | acceptance             |      |
|       |         |                   | information.           |      |
+-------+---------+-------------------+------------------------+------+
| PM    | System  | A                 |                        |      |
| 3     | Ge      | system-generated  |                        |      |
| .1.23 | nerated | invoice is the    |                        |      |
|       | Invoice | result of step PM |                        |      |
|       |         | 3.1.22.           |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Adjust  | For goods being   | Based on the specific  |      |
| 3     | Expense | rejected,         | financial event, the   |      |
| .1.24 | in      | expenses recorded | expense is adjusted in |      |
|       | General | at the time of    | accordance with the    |      |
|       | Ledger  | receipt of goods  | current TFM.           |      |
|       |         | are adjusted      |                        |      |
|       |         | accordingly by    |                        |      |
|       |         | entering the item |                        |      |
|       |         | return into the   |                        |      |
|       |         | system (negative  |                        |      |
|       |         | goods receipt).   |                        |      |
+-------+---------+-------------------+------------------------+------+

## **Receipt and Acceptance of Services**

Receipt and Acceptance of Services refers to the process of receiving
services, determining whether the services received met the contractual
obligation, and accepting or rejecting the services based on quality,
quantity, or other criteria as defined by the contract. The following
flowchart depicts the steps for the Payment Management process for the
receipt and acceptance of services. Steps include receipt and acceptance
of services and related actions in the Business Unit and Finance
functional areas.

## PM 3.2 -- Receipt and Acceptance of Services Flowchart {#pm-3.2-receipt-and-acceptance-of-services-flowchart .unnumbered}

![](media/image20.wmf){width="6.492361111111111in"
height="5.108333333333333in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Receipt and Acceptance of Services process steps
are described as follows:

+--------+--------+--------------------+-----------------------+------+
| Step   | Step   | Step Description   | Business Rules        | CFSR |
| ID     | Name   |                    |                       | Req. |
+========+========+====================+=======================+======+
| PM     | Se     | Services are       | Authorized officials  |      |
| 3.2.1  | rvices | performed on       | in the Business Unit  |      |
|        |        | behalf of the      | and/or Acquisition    |      |
|        | Per    | applicable         | monitor services for  |      |
|        | formed | Business Unit.     | compliance with       |      |
|        |        |                    | contractual terms.    |      |
|        |        |                    |                       |      |
|        |        |                    | Receipt of services   |      |
|        |        |                    | should be documented  |      |
|        |        |                    | in the Core Financial |      |
|        |        |                    | System by the time    |      |
|        |        |                    | the invoice for the   |      |
|        |        |                    | services is received. |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Se     | Authorized         | Depending on          |      |
| 3.2.5  | rvices | officials in the   | contractual terms and |      |
|        | Acc    | Business Unit      | FAR guidelines,       |      |
|        | epted? | access an          | "constructive         |      |
|        |        | electronic award   | receipt" may apply to |      |
|        |        | document and       | certain services. In  |      |
|        |        | vendor invoice for | these cases,          |      |
|        |        | services provided. | acceptance procedures |      |
|        |        | The authorized     | may not be required   |      |
|        |        | official in the    | as the services are   |      |
|        |        | Business Unit is   | considered "accepted" |      |
|        |        | electronically     | after an applicable   |      |
|        |        | notified by        | amount of time.       |      |
|        |        | Finance of the     |                       |      |
|        |        | receipt of an      | The receipt and       |      |
|        |        | invoice for        | acceptance of         |      |
|        |        | services.          | services must be      |      |
|        |        |                    | performed within the  |      |
|        |        |                    | contract terms.       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Det    | An estimated       | The agency's          |      |
| 3.2.3  | ermine | accrual is         | guidelines for        |      |
|        | Est    | determined using   | estimating accruals   |      |
|        | imated | the agency's       | must be reassessed on |      |
|        | A      | guidelines.        | a regular basis.      |      |
|        | ccrual |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Est    | Based on services  | The entries are       |      |
| 3.2.4  | imated | performed, an      | recorded using the    |      |
|        | A      | estimated accrual  | USSGL Account         |      |
|        | ccrual | of expenses for    | Transaction Listing   |      |
|        | R      | the delivered      | provided in the       |      |
|        | ecords | services is        | current TFM.          |      |
|        | in     | recorded in the    |                       |      |
|        | G      | General Ledger.    | Examples include, but |      |
|        | eneral |                    | are not limited to,   |      |
|        | Ledger |                    | the following         |      |
|        |        |                    | transaction codes     |      |
|        |        |                    | from the current TFM: |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B402 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | or services and       |      |
|        |        |                    | accrue a liability.   |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B404 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | and services in the   |      |
|        |        |                    | same year the order   |      |
|        |        |                    | was placed and accrue |      |
|        |        |                    | a liability. The      |      |
|        |        |                    | current-year expended |      |
|        |        |                    | authority is less     |      |
|        |        |                    | than the original     |      |
|        |        |                    | obligation.           |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B406 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | and services in the   |      |
|        |        |                    | same year the order   |      |
|        |        |                    | was placed and accrue |      |
|        |        |                    | a liability. The      |      |
|        |        |                    | current-year expended |      |
|        |        |                    | authority is more     |      |
|        |        |                    | than the original     |      |
|        |        |                    | obligation.           |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B410 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | or services for       |      |
|        |        |                    | construction.         |      |
|        |        |                    |                       |      |
|        |        |                    | Accruals should be    |      |
|        |        |                    | reversed as           |      |
|        |        |                    | appropriate each      |      |
|        |        |                    | reporting period.     |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Issues | Appropriate        | Issues must be        |      |
| 3.2.5  | Res    | messages are       | evaluated and         |      |
|        | olved? | routed to Business | resolved in           |      |
|        |        | Unit, Acquisition, | accordance with       |      |
|        |        | and Finance        | applicable laws and   |      |
|        |        | personnel and      | regulations, rules,   |      |
|        |        | appropriate        | and agency guidelines |      |
|        |        | actions are taken  | (e.g., FAR, agency    |      |
|        |        | to resolve any     | policies and          |      |
|        |        | issue(s). If       | procedures),          |      |
|        |        | appropriate        | including the Prompt  |      |
|        |        | actions are taken  | Payment Act.          |      |
|        |        | and appropriate    |                       |      |
|        |        | personnel          |                       |      |
|        |        | determine that     |                       |      |
|        |        | issues are         |                       |      |
|        |        | resolved, the      |                       |      |
|        |        | services are       |                       |      |
|        |        | accepted.          |                       |      |
|        |        |                    |                       |      |
|        |        | The authorized     |                       |      |
|        |        | official may       |                       |      |
|        |        | decline to accept  |                       |      |
|        |        | services due to    |                       |      |
|        |        | concerns that      |                       |      |
|        |        | contractual        |                       |      |
|        |        | criteria have not  |                       |      |
|        |        | been met.          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | R      | Based on           |                       | PM   |
| 3.2.6  | eceipt | appropriate        |                       | B-01 |
|        | and    | monitoring of      |                       |      |
|        | Acce   | vendor             |                       | PMB- |
|        | ptance | performance, the   |                       | 05   |
|        |        | authorizing        |                       |      |
|        | Doc    | official           |                       |      |
|        | uments | electronically     |                       |      |
|        |        | performs receipt   |                       |      |
|        |        | and acceptance of  |                       |      |
|        |        | services.          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Accept | If the full amount | Partial receipt of    |      |
| 3.2.7  | P      | of services are    | services are possible |      |
|        | artial | not accepted and   | for certain types of  |      |
|        | Qu     | issues are not     | services and can be   |      |
|        | antity | resolved, the      | governed by the       |      |
|        | of     | agency determines  | "Service Level        |      |
|        | Ser    | whether to accept  | Agreement" (SLA) for  |      |
|        | vices? | a partial quantity | acceptance of         |      |
|        |        | of the services.   | services.             |      |
|        |        |                    |                       |      |
|        |        | If there is        | Partial receipt and   |      |
|        |        | partial            | acceptance of         |      |
|        |        | acceptance, the    | services may result   |      |
|        |        | receipt and        | from variances from   |      |
|        |        | acceptance         | contractual terms     |      |
|        |        | documents for the  | (e.g., rate           |      |
|        |        | portion of         | discrepancy,          |      |
|        |        | services accepted  | contracted quantity   |      |
|        |        | are processed.     | of services (e.g.,    |      |
|        |        |                    | hours) received,      |      |
|        |        |                    | quality of content    |      |
|        |        |                    | and performance).     |      |
|        |        |                    |                       |      |
|        |        |                    | If an invoice or      |      |
|        |        |                    | other applicable      |      |
|        |        |                    | documentation per the |      |
|        |        |                    | contract is received  |      |
|        |        |                    | from the vendor but   |      |
|        |        |                    | the agency does not   |      |
|        |        |                    | accept the services   |      |
|        |        |                    | because of unresolved |      |
|        |        |                    | issues, the invoice   |      |
|        |        |                    | should be rejected    |      |
|        |        |                    | within the specified  |      |
|        |        |                    | number of days based  |      |
|        |        |                    | on Prompt Pay type.   |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Se     | If the quantity of | Agencies set          | SM   |
| 3.2.8  | rvices | hours or hourly    | tolerance levels in   | B-19 |
|        | Amount | rate of services   | accordance with       |      |
|        | Within | received exceeds   | applicable rules,     | SM   |
|        | Tole   | the quantity or    | regulations, and      | B-20 |
|        | rance? | rate ordered, the  | agency guidelines     |      |
|        |        | excess is compared | (e.g., FAR, agency    |      |
|        |        | to an allowable    | policies and          |      |
|        |        | tolerance level.   | procedures).          |      |
|        |        | If the quantity    |                       |      |
|        |        | received is within |                       |      |
|        |        | the allowable      |                       |      |
|        |        | tolerance level    |                       |      |
|        |        | and the monetary   |                       |      |
|        |        | value of any       |                       |      |
|        |        | applicable line    |                       |      |
|        |        | item of the bill   |                       |      |
|        |        | exceeds the        |                       |      |
|        |        | obligation but is  |                       |      |
|        |        | within tolerance,  |                       |      |
|        |        | it is subjected to |                       |      |
|        |        | a "Funds Check".   |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Passes | The amount by      | The Core Financial    |      |
| 3.2.9  | Funds  | which services     | System must ensure    |      |
|        | Check? | received exceed an | sufficient applicable |      |
|        |        | obligation is      | funding is available  |      |
|        |        | subjected to an    | prior to allowing an  |      |
|        |        | edit check to      | expense to record in  |      |
|        |        | determine whether  | the General Ledger.   |      |
|        |        | sufficient funds   |                       |      |
|        |        | are available for  |                       |      |
|        |        | the additional     |                       |      |
|        |        | funding.           |                       |      |
|        |        |                    |                       |      |
|        |        | If funds are       |                       |      |
|        |        | available, the     |                       |      |
|        |        | expense is         |                       |      |
|        |        | recorded in the    |                       |      |
|        |        | General Ledger. If |                       |      |
|        |        | funds are not      |                       |      |
|        |        | available,         |                       |      |
|        |        | notification is    |                       |      |
|        |        | sent to the        |                       |      |
|        |        | Business Unit and  |                       |      |
|        |        | Acquisition, as    |                       |      |
|        |        | applicable, to     |                       |      |
|        |        | resolve the issue. |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | E      | Based on receipt   | The entries are       |      |
| 3.2.10 | xpense | of the services, a | recorded using the    |      |
|        | R      | proprietary        | USSGL Account         |      |
|        | ecords | expense and        | Transaction Listing   |      |
|        | in     | budgetary          | provided in the       |      |
|        | G      | expenditure for    | current TFM.          |      |
|        | eneral | the delivered      |                       |      |
|        | Ledger | services is        | Examples include, but |      |
|        |        | recorded in the    | are not limited to,   |      |
|        |        | General Ledger.    | the following         |      |
|        |        |                    | transaction codes     |      |
|        |        |                    | from the current TFM: |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B402 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | or services and       |      |
|        |        |                    | accrue a liability.   |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B404 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | and services in the   |      |
|        |        |                    | same year the order   |      |
|        |        |                    | was placed and accrue |      |
|        |        |                    | a liability. The      |      |
|        |        |                    | current-year expended |      |
|        |        |                    | authority is less     |      |
|        |        |                    | than the original     |      |
|        |        |                    | obligation.           |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B406 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | and services in the   |      |
|        |        |                    | same year the order   |      |
|        |        |                    | was placed and accrue |      |
|        |        |                    | a liability. The      |      |
|        |        |                    | current-year expended |      |
|        |        |                    | authority is more     |      |
|        |        |                    | than the original     |      |
|        |        |                    | obligation.           |      |
|        |        |                    |                       |      |
|        |        |                    | TFM-B410 To record    |      |
|        |        |                    | the delivery of goods |      |
|        |        |                    | or services for       |      |
|        |        |                    | construction.         |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Route  | If either the      | The message should be |      |
| 3.2.11 | M      | quantity of        | initiated             |      |
|        | essage | services received  | electronically once a |      |
|        | to     | exceeds the        | transaction fails the |      |
|        | Bu     | allowable          | tolerance or funds    |      |
|        | siness | tolerance level or | checks.               |      |
|        | Unit   | the funds check    |                       |      |
|        | and    | fails, a message   |                       |      |
|        | Acqui  | is routed to the   |                       |      |
|        | sition | appropriate        |                       |      |
|        |        | personnel in the   |                       |      |
|        |        | Business Unit and  |                       |      |
|        |        | Acquisition to     |                       |      |
|        |        | resolve the        |                       |      |
|        |        | issue(s).          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | M      | An applicable      |                       |      |
| 3.2.12 | essage | message is routed  |                       |      |
|        | to     | to Acquisition     |                       |      |
|        | Acqui  | with the tolerance |                       |      |
|        | sition | and/or funding     |                       |      |
|        |        | issue(s).          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | M      | An applicable      |                       |      |
| 3.2.13 | essage | message is routed  |                       |      |
|        | to     | to the Business    |                       |      |
|        |        | Unit with the      |                       |      |
|        | Bu     | tolerance and/or   |                       |      |
|        | siness | funding issue(s).  |                       |      |
|        | Unit   |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | R      | The Business Unit  | Issues must be        |      |
| 3.2.14 | esolve | and/or Acquisition | evaluated and         |      |
|        | Issue? | will resolve the   | resolved within the   |      |
|        |        | tolerance and/or   | guidelines and        |      |
|        |        | funding issue(s).  | requirements of       |      |
|        |        |                    | applicable laws and   |      |
|        |        | If the issue is    | regulations,          |      |
|        |        | resolved, the      | including the Prompt  |      |
|        |        | amount of services | Payment Act and FAR.  |      |
|        |        | received is        |                       |      |
|        |        | subject to a funds |                       |      |
|        |        | check.             |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Do Not | The certifier of   | If services are to be |      |
| 3.2.15 | Accept | acceptance         | rejected, it must be  |      |
|        | Se     | electronically     | done in accordance    |      |
|        | rvices | records the        | with applicable award |      |
|        |        | service items      | documents, the FAR,   |      |
|        |        | being rejected.    | and agency            |      |
|        |        |                    | guidelines.           |      |
|        |        | The associated     |                       |      |
|        |        | invoice will be    |                       |      |
|        |        | returned to the    |                       |      |
|        |        | vendor/payee. A    |                       |      |
|        |        | new invoice may be |                       |      |
|        |        | requested if       |                       |      |
|        |        | applicable.        |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Syst   | An invoice is      | Award documents       |      |
| 3.2.16 | em-Gen | generated within   | should indicate       |      |
|        | erated | the Core Financial | whether a vendor      |      |
|        | In     | System for         | invoice is required   |      |
|        | voice? | applicable         | for payment. (The     |      |
|        |        | transactions for   | vendor invoice may be |      |
|        |        | which an invoice   | required by Finance   |      |
|        |        | is not required.   | prior to payment but  |      |
|        |        |                    | is not required as    |      |
|        |        |                    | part of the Receiving |      |
|        |        |                    | process. Rather, it   |      |
|        |        |                    | may be made available |      |
|        |        |                    | to applicable         |      |
|        |        |                    | personnel in the      |      |
|        |        |                    | Business Unit for     |      |
|        |        |                    | informational         |      |
|        |        |                    | purposes.)            |      |
|        |        |                    |                       |      |
|        |        |                    | In the event a vendor |      |
|        |        |                    | invoice is not        |      |
|        |        |                    | required, the Core    |      |
|        |        |                    | Financial System      |      |
|        |        |                    | should generate an    |      |
|        |        |                    | internal invoice      |      |
|        |        |                    | document based on     |      |
|        |        |                    | vendor and associated |      |
|        |        |                    | obligating,           |      |
|        |        |                    | receiving, and        |      |
|        |        |                    | acceptance            |      |
|        |        |                    | information.          |      |
|        |        |                    |                       |      |
|        |        |                    | Acceptance is         |      |
|        |        |                    | electronically routed |      |
|        |        |                    | to Finance to be      |      |
|        |        |                    | matched with the      |      |
|        |        |                    | invoice and award     |      |
|        |        |                    | document.             |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Syst   | A system-generated | Acceptance is         |      |
| 3.2.17 | em-Gen | invoice is         | electronically routed |      |
|        | erated | generated within   | to Finance to be      |      |
|        | I      | the Core Financial | matched with the      |      |
|        | nvoice | System.            | invoice and award     |      |
|        |        |                    | document.             |      |
+--------+--------+--------------------+-----------------------+------+

## **Accounts Payable and Invoicing Processes**

The Accounts Payable and Invoicing processes described in the sections
3.3.1, 3.3.2, and 3.3.3 refer to the procedures necessary to enter an
invoice into the Core Financial System, match supporting documentation
with an award document, and process a credit memo received from a
vendor/payee. Further, related accounting entries and the steps to
ensure proper approval and verification of an invoice are contained
within this section.

## **Invoice Entry**

Invoice Entry refers to the process of receiving invoices from vendors,
verifying and validating invoice information, and approving or rejecting
the invoices for payment. This section is based on the assumption that
under best business practices, invoices should be submitted and
processed electronically. Agencies should implement procedures to
automate the invoice submission process. This chapter addresses one type
of payment requests, invoices. Other types of payment request which are
used to authorize disbursements include, but are not limited to, grants,
employee reimbursements, employee awards and payroll.

In cases where an agency must continue to accept paper invoices,
electronic tools can be used to improve the efficiency of invoice
processing. Examples include digital imaging and Optical Character
Recognition (OCR).

## PM 3.3.1 - Invoice Entry Flowchart {#pm-3.3.1---invoice-entry-flowchart .unnumbered}

![](media/image21.wmf){width="6.492361111111111in"
height="5.113194444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Accounts Payable and Invoice Entry and Processing
steps are described as follows:

+-------+---------+-------------------+------------------------+------+
| Step  | Step    | Step Description  | Business Rules         | CFSR |
| ID    | Name    |                   |                        |      |
|       |         |                   |                        | Req. |
+=======+=========+===================+========================+======+
| PM    | Prepare | The vendor/payee  | Agencies must          |      |
| 3.    |         | prepares and      | communicate to         |      |
| 3.1.1 | Invoice | submits to the    | vendor/payees that     |      |
|       |         | agency an invoice | invoices must be       |      |
|       |         | for goods and/or  | prepared in accordance |      |
|       |         | services.         | with prescribed data   |      |
|       |         |                   | and format             |      |
|       |         |                   | requirements.          |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Ele     | Under best        | The Core Financial     | PM   |
| 3.    | ctronic | business          | System must provide    | C-01 |
| 3.1.2 | Invoice | practices,        | automated              |      |
|       |         | invoices are      | functionality for      | PM   |
|       |         | submitted         | capturing invoice      | C-02 |
|       |         | electronically.   | data.                  |      |
|       |         |                   |                        | PM   |
|       |         |                   |                        | C-03 |
+-------+---------+-------------------+------------------------+------+
| PM    | Invoice | Invoices are      | Paper invoices         |      |
| 3.    |         | received in       | received should be     |      |
| 3.1.3 |         | Finance (should   | imaged to enable the   |      |
|       |         | be via electronic | flow of invoice        |      |
|       |         | transmission).    | documents              |      |
|       |         |                   | electronically through |      |
|       |         | In the case of    | the accounts payable   |      |
|       |         | paper invoices,   | and invoicing          |      |
|       |         | invoices are      | processes.             |      |
|       |         | forwarded to      |                        |      |
|       |         | appropriate       |                        |      |
|       |         | Finance or other  |                        |      |
|       |         | applicable        |                        |      |
|       |         | personnel.        |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Enter   | Invoices are      | The invoice date and   |      |
| 3.    | Invoice | entered into the  | the date the invoice   |      |
| 3.1.4 |         | agency's accounts | was received in the    |      |
|       |         | payable system    | proper billing office  |      |
|       |         | creating a        | (log date) should be   |      |
|       |         | payment request.  | entered into the       |      |
|       |         |                   | system in accordance   |      |
|       |         |                   | with Prompt Payment    |      |
|       |         |                   | Act requirements.      |      |
|       |         |                   |                        |      |
|       |         |                   | The payment due date   |      |
|       |         |                   | and the date on which  |      |
|       |         |                   | interest will begin to |      |
|       |         |                   | accrue if a payment is |      |
|       |         |                   | late must be           |      |
|       |         |                   | determined in          |      |
|       |         |                   | accordance with Prompt |      |
|       |         |                   | Payment Act            |      |
|       |         |                   | requirements.          |      |
|       |         |                   |                        |      |
|       |         |                   | Under best business    |      |
|       |         |                   | practices in an        |      |
|       |         |                   | electronic             |      |
|       |         |                   | environment, invoices  |      |
|       |         |                   | are imported into the  |      |
|       |         |                   | agency's accounts      |      |
|       |         |                   | payable system.        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Federal | The vendor/payee  | If the payee is a      |      |
| 3.    | Vendor  | is identified as  | Federal vendor,        |      |
| 3.1.5 | /       | either a federal  | Finance performs IPAC  |      |
|       | Payee?  | or non-federal    | procedures in          |      |
|       |         | vendor/payee.     | accordance with an     |      |
|       |         |                   | approved Trading       |      |
|       |         |                   | Partner Agreement and  |      |
|       |         |                   | Treasury guidelines.   |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Inte    | Federal           | A federal agency is    |      |
| 3.    | ragency | vendor/payees are | any executive agency   |      |
| 3.1.6 | A       | paid through the  | or any independent     |      |
|       | ssisted | IPAC system       | establishment in the   |      |
|       | Acqu    |                   | legislative or         |      |
|       | isition | Federal           | judicial branch of     |      |
|       |         | (i                | government (except the |      |
|       |         | ntragovernmental) | Senate, the House of   |      |
|       |         | buy and sell      | Representatives, the   |      |
|       |         | transactions that | Architect of the       |      |
|       |         | are processed     | Capitol, and any       |      |
|       |         | through IPAC will | activities under the   |      |
|       |         | be included in a  | Architect's            |      |
|       |         | future release of | direction).            |      |
|       |         | the Standard      |                        |      |
|       |         | Business          |                        |      |
|       |         | Processes         |                        |      |
|       |         | document.         |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Review  | Edit checks are   | Automated system edit  | PM   |
| 3.    | Invoice | performed to      | checks should be       | A-02 |
| 3.1.7 | for     | evaluate whether  | performed to verify    |      |
|       | R       | an invoice        | that each invoice      |      |
|       | equired | includes          | includes the required  |      |
|       | Info    | information       | information under the  |      |
|       | rmation | required under    | Prompt Payment Act. As |      |
|       |         | the Prompt        | necessary, some edit   |      |
|       |         | Payment act.      | checks may be          |      |
|       |         |                   | performed manually.    |      |
|       |         |                   |                        |      |
|       |         |                   | Under best business    |      |
|       |         |                   | practices in an        |      |
|       |         |                   | electronic             |      |
|       |         |                   | environment, edit      |      |
|       |         |                   | checks should include  |      |
|       |         |                   | tests of validity,     |      |
|       |         |                   | accuracy, and          |      |
|       |         |                   | completeness of        |      |
|       |         |                   | information submitted. |      |
|       |         |                   | Such edit checks (as   |      |
|       |         |                   | described in           |      |
|       |         |                   | subsequent steps) may  |      |
|       |         |                   | be executed            |      |
|       |         |                   | simultaneously. An     |      |
|       |         |                   | exception report       |      |
|       |         |                   | should be generated.   |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Proper  | Based on the      | Agency procedures must |      |
| 3.    | Invoice | results of the    | enable the return of   |      |
| 3.1.8 | Under   | edit checks       | improper invoices      |      |
|       | Prompt  | performed in the  | within the required    |      |
|       | Pay     | previous step,    | number of days as      |      |
|       | Act?    | the agency        | required under the     |      |
|       |         | determines        | Prompt Payment Act.    |      |
|       |         | whether the       |                        |      |
|       |         | invoice is proper |                        |      |
|       |         | under the         |                        |      |
|       |         | requirements of   |                        |      |
|       |         | the Prompt Pay    |                        |      |
|       |         | Act.              |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Reject  | If the invoice    | The agency must        | PM   |
| 3.    | Invoice | fails Prompt Pay  | provide the            | C-19 |
| 3.1.9 |         | information       | vendor/payee a         |      |
|       |         | requirements,     | system-generated       | PM   |
|       |         | cannot be matched | notice of return of an | C-21 |
|       |         | to a valid        | improper invoice.      |      |
|       |         | obligation, or    |                        | PM   |
|       |         | key vendor/payee  | If the award was made  | C-22 |
|       |         | information does  | to a CCR registered    |      |
|       |         | not match the     | vendor/payee and the   |      |
|       |         | vendor/payee      | vendor/payee no longer |      |
|       |         | file, it is       | has an active          |      |
|       |         | rejected and      | registration in CCR,   |      |
|       |         | returned to the   | the Prompt Pay Act     |      |
|       |         | vendor/payee.     | requires the invoice   |      |
|       |         |                   | be returned as an      |      |
|       |         |                   | improper invoice.      |      |
|       |         |                   |                        |      |
|       |         |                   | Vendor/payees are not  |      |
|       |         |                   | required to be         |      |
|       |         |                   | registered in CCR but  |      |
|       |         |                   | must be active in the  |      |
|       |         |                   | official agency        |      |
|       |         |                   | vendor/payee file, or  |      |
|       |         |                   | the invoice is         |      |
|       |         |                   | rejected.              |      |
|       |         |                   |                        |      |
|       |         |                   | Mark the vendor/payee  |      |
|       |         |                   | invoice with the date  |      |
|       |         |                   | the invoice is         |      |
|       |         |                   | returned in order to   |      |
|       |         |                   | stop the accrual of    |      |
|       |         |                   | interest.              |      |
|       |         |                   |                        |      |
|       |         |                   | The vendor/payee may   |      |
|       |         |                   | be contacted as        |      |
|       |         |                   | applicable, but such   |      |
|       |         |                   | communication should   |      |
|       |         |                   | not delay compliance   |      |
|       |         |                   | with the Prompt        |      |
|       |         |                   | Payment Act.           |      |
+-------+---------+-------------------+------------------------+------+
| PM    | R       | A rejected        | Vendor/payees are      |      |
| 3.3   | ejected | invoice is        | required to prepare    |      |
| .1.10 | Invoice | returned to the   | invoices in accordance |      |
|       |         | vendor/payee for  | with the FAR and       |      |
|       |         | correction or     | agency guidelines.     |      |
|       |         | other appropriate |                        |      |
|       |         | action in order   |                        |      |
|       |         | for the           |                        |      |
|       |         | vendor/payee to   |                        |      |
|       |         | prepare a proper  |                        |      |
|       |         | invoice.          |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Vendor  | System edit       | Core Financial System  | PM   |
| 3.3   | Info.   | checks verify     | vendor/payee data must | A-04 |
| .1.11 | Matches | that vendor/payee | be regularly updated   |      |
|       | CCR     | information       | with changes to CCR    |      |
|       | Data?   | matches the       | data. Vendor/payee     |      |
|       |         | vendor/payee file | file fields must       |      |
|       |         | based on the      | accommodate CCR data.  |      |
|       |         | latest            |                        |      |
|       |         | vendor/payee      | The Core Financial     |      |
|       |         | database update.  | System must prevent    |      |
|       |         |                   | CCR vendor/payee data  |      |
|       |         |                   | from being changed by  |      |
|       |         |                   | the agency for those   |      |
|       |         |                   | vendor/payees required |      |
|       |         |                   | to register in the     |      |
|       |         |                   | CCR.                   |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Invoice | Finance           | Automated edit checks  | PM   |
| 3.3   | Att     | determines that   | should verify an       | C-04 |
| .1.12 | ributes | system edit       | invoice is originated  |      |
|       | Match   | checks have       | by an approved         | PM   |
|       | Award   | validated the     | vendor/payee. System   | C-05 |
|       | Do      | consistency of    | edit checks verify     |      |
|       | cument? | information on    | that vendor/payee      | PM   |
|       |         | the invoice with  | information on the     | C-06 |
|       |         | the relevant      | invoice matches the    |      |
|       |         | award document    | information for the    |      |
|       |         | (i.e., order      | approved vendor/payee  |      |
|       |         | number, product   | in the system. For     |      |
|       |         | description,      | vendor/payees not      |      |
|       |         | quantity,         | required to be         |      |
|       |         | vendor/payee      | registered in CCR, the |      |
|       |         | name, address,    | invoice is validated   |      |
|       |         | and date).        | against agency-defined |      |
|       |         |                   | criteria.              |      |
|       |         |                   |                        |      |
|       |         |                   | The Core Financial     |      |
|       |         |                   | System must process    |      |
|       |         |                   | each vendor/payee      |      |
|       |         |                   | invoice through edit   |      |
|       |         |                   | criteria designed to   |      |
|       |         |                   | identify duplicate     |      |
|       |         |                   | vendor/payee invoices. |      |
|       |         |                   | Edit criteria and      |      |
|       |         |                   | should be developed    |      |
|       |         |                   | based on appropriate   |      |
|       |         |                   | agency defined         |      |
|       |         |                   | criteria. Criteria may |      |
|       |         |                   | include agency         |      |
|       |         |                   | identifier,            |      |
|       |         |                   | vendor/payee number,   |      |
|       |         |                   | vendor/payee account   |      |
|       |         |                   | number, vendor/payee   |      |
|       |         |                   | TIN, vendor/payee      |      |
|       |         |                   | invoice number,        |      |
|       |         |                   | invoice date, invoice  |      |
|       |         |                   | amount, referenced     |      |
|       |         |                   | obligation document    |      |
|       |         |                   | number, or DUNS        |      |
|       |         |                   | number. An exception   |      |
|       |         |                   | report must be         |      |
|       |         |                   | generated and reviewed |      |
|       |         |                   | by a supervisory       |      |
|       |         |                   | official.              |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Invoice | The invoice       | The Core Financial     |      |
| 3.3   | Amount  | amount is         | System must            |      |
| .1.13 | Equal   | compared to the   | incorporate edit       |      |
|       | or Less | award document    | checks to facilitate   |      |
|       | than    | amount.           | this comparison of     |      |
|       | Award?  |                   | quantities and amounts |      |
|       |         |                   | by document lines and  |      |
|       |         |                   | totals.                |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Invoice | The amount by     | Agencies should        | SM   |
| 3.3   | Amount  | which an invoice  | determine tolerance    | B-19 |
| .1.14 | within  | amount exceeds an | levels for prices,     |      |
|       | Tol     | obligation is     | quantities of items,   | SM   |
|       | erance? | compared to       | and applicable amounts | B-20 |
|       |         | allowable         | (e.g., freight) for    |      |
|       |         | tolerance levels. | which further approval | PM   |
|       |         |                   | is not required.       | C-13 |
|       |         |                   |                        |      |
|       |         |                   | An additional          |      |
|       |         |                   | obligation document is |      |
|       |         |                   | not required for       |      |
|       |         |                   | invoice amounts within |      |
|       |         |                   | tolerance.             |      |
|       |         |                   |                        |      |
|       |         |                   | In cases where the     |      |
|       |         |                   | funding need exceeds   |      |
|       |         |                   | the tolerance limits,  |      |
|       |         |                   | policies or business   |      |
|       |         |                   | practices may allow    |      |
|       |         |                   | officials with funding |      |
|       |         |                   | authority to be        |      |
|       |         |                   | notified to consider   |      |
|       |         |                   | obligating more funds  |      |
|       |         |                   | (rather than rejecting |      |
|       |         |                   | the invoice).          |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Valid   | Once the invoice  | Valid invoice must be  |      |
| 3.3   | Invoice | passes the edit   | populated with         |      |
| .1.15 |         | checks, the       | applicable valid data  |      |
|       |         | invoice is        | elements.              |      |
|       |         | considered a      |                        |      |
|       |         | valid invoice.    |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Block   | If matching       | The Core Financial     | PM   |
| 3.3   | Payment | criteria are not  | System must block from | C-08 |
| .1.16 |         | met, the invoice  | payment any invoice    |      |
|       |         | is blocked from   | for which matching     |      |
|       |         | payment.          | criteria are not met   |      |
|       |         |                   | or an invoice lacks    |      |
|       |         |                   | required approvals     |      |
|       |         |                   | and/or verifications.  |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Route   | Once an invoice   | The Core Financial     | TL   |
| 3.3   | Message | has been received | System should          | E-07 |
| .1.17 | to      | and the system    | automatically identify |      |
|       | B       | lacks evidence of | and route a message to |      |
|       | usiness | receipt of goods  | applicable personnel   |      |
|       | Unit    | and/or            | of open requirements   |      |
|       |         | acceptance, the   | related to pending     |      |
|       |         | system routes a   | invoices.              |      |
|       |         | message to the    |                        |      |
|       |         | applicable        | Applicable personnel   |      |
|       |         | Business Unit     | take appropriate       |      |
|       |         | personnel of the  | actions within Prompt  |      |
|       |         | need for required | Payment Act            |      |
|       |         | documentation. In | requirements.          |      |
|       |         | the case of       |                        |      |
|       |         | services, the     |                        |      |
|       |         | invoice copy is   |                        |      |
|       |         | routed to the     |                        |      |
|       |         | Business Unit for |                        |      |
|       |         | review.           |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Notif   | The Business Unit |                        |      |
| 3.3   | ication | is notified       |                        |      |
| .1.18 | of      | electronically of |                        |      |
|       | Issue   | the need for      |                        |      |
|       |         | required          |                        |      |
|       |         | documentation.    |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Resolve | Additional        |                        |      |
| 3.3   | Issue   | documentation is  |                        |      |
| .1.19 |         | provided.         |                        |      |
+-------+---------+-------------------+------------------------+------+

##  **Invoice Processing**

Invoice Processing refers to the process of performing a funds check,
determining if the proper obligation or receiving document has been
established, and accepting or rejecting the invoice. The verification
process also includes two-way, three-way, and four-way matches,
confirmation of vendor's status in the CCR, and notification of any
funds that may be deobligated.

## PM 3.3.2 - Invoice Processing Flowchart {#pm-3.3.2---invoice-processing-flowchart .unnumbered}

![](media/image22.wmf){width="6.49375in" height="4.80625in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Invoice Processing process steps are described as
follows:

+-------+---------+-------------------+------------------------+------+
| Step  | Step    | Step Description  | Business Rules         | CFSR |
| ID    | Name    |                   |                        | Req. |
+=======+=========+===================+========================+======+
| PM    | Does    | Determine if the  |                        |      |
| 3.    | Invoice | invoice amount is |                        |      |
| 3.2.1 | Have    | greater than the  |                        |      |
|       | O       | approved original |                        |      |
|       | verage? | funding amount    |                        |      |
|       |         | while being       |                        |      |
|       |         | within the        |                        |      |
|       |         | allowable         |                        |      |
|       |         | tolerance for     |                        |      |
|       |         | overages.         |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Funds   | The amount of an  | The Core Financial     |      |
| 3.    | Check   | invoice is        | System must ensure     |      |
| 3.2.2 |         | subjected to a    | sufficient applicable  |      |
|       |         | check to          | funding is available   |      |
|       |         | determine whether | prior to allowing an   |      |
|       |         | sufficient funds  | invoice to be paid.    |      |
|       |         | are available for |                        |      |
|       |         | the payment.      |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Passes  | The funds check   | The Core Financial     |      |
| 3.    | Funds   | process is        | System must ensure     |      |
| 3.2.3 | Check?  | completed.        | sufficient applicable  |      |
|       |         |                   | funding is available   |      |
|       |         |                   | prior to allowing an   |      |
|       |         |                   | expense to be recorded |      |
|       |         |                   | in the General Ledger. |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Modify  | Funding           | Funding authorities    |      |
| 3.    | Funding | authorities       | fund the obligation in |      |
| 3.2.4 |         | identify, realign | accordance with        |      |
|       |         | or reprogram      | applicable rules,      |      |
|       |         | funds as          | regulations and agency |      |
|       |         | applicable to     | guidelines (e.g., FAR, |      |
|       |         | fund the full     | OMB Circular A-11,     |      |
|       |         | amount of the     | agency policies and    |      |
|       |         | obligation (for   | procedures).           |      |
|       |         | invoice overages  |                        |      |
|       |         | within the        |                        |      |
|       |         | allowable         |                        |      |
|       |         | tolerance for     |                        |      |
|       |         | overages).        |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | General | The system        | In cases where the     |      |
| 3.    | Ledger  | performs a series | award document is      |      |
| 3.2.5 | Re      | of logical steps  | closed out, entries to |      |
|       | cording | before recording  | deobligate any         |      |
|       | Logic   | the appropriate   | remaining obligations  |      |
|       |         | entries to the    | are recorded.          |      |
|       |         | General Ledger.   |                        |      |
|       |         |                   | Where the expense is   |      |
|       |         | The system        | modified, the          |      |
|       |         | performs edits on | appropriate expense    |      |
|       |         | the entries to    | adjustment for the     |      |
|       |         | determine the     | overage on the invoice |      |
|       |         | accounting        | is recorded.           |      |
|       |         | classification    |                        |      |
|       |         | elements are      | The entries are        |      |
|       |         | valid, the        | recorded using USSGL   |      |
|       |         | accounting period | Account Transaction    |      |
|       |         | is open, the fund | Listing provided in    |      |
|       |         | is open, CCR      | the current TFM.       |      |
|       |         | edits are passed, |                        |      |
|       |         | etc.              | Examples include, but  |      |
|       |         |                   | are not limited to,    |      |
|       |         | After the entries | the following          |      |
|       |         | pass validation   | transaction codes from |      |
|       |         | edits and funds   | the current TFM:       |      |
|       |         | checks, the       |                        |      |
|       |         | applicable        | TFM-B402 To record the |      |
|       |         | entries are       | delivery of goods or   |      |
|       |         | recorded.         | services and accrue a  |      |
|       |         |                   | liability.             |      |
|       |         |                   |                        |      |
|       |         |                   | TFM-B404 To record the |      |
|       |         |                   | delivery of goods and  |      |
|       |         |                   | services in the same   |      |
|       |         |                   | year the order was     |      |
|       |         |                   | placed and accrue a    |      |
|       |         |                   | liability. The         |      |
|       |         |                   | current-year expended  |      |
|       |         |                   | authority is less than |      |
|       |         |                   | the original           |      |
|       |         |                   | obligation.            |      |
|       |         |                   |                        |      |
|       |         |                   | TFM-B406 To record the |      |
|       |         |                   | delivery of goods and  |      |
|       |         |                   | services in the same   |      |
|       |         |                   | year the order was     |      |
|       |         |                   | placed and accrue a    |      |
|       |         |                   | liability. The         |      |
|       |         |                   | current-year expended  |      |
|       |         |                   | authority is more than |      |
|       |         |                   | the original           |      |
|       |         |                   | obligation.            |      |
+-------+---------+-------------------+------------------------+------+
| PM    | M       | The invoice must  | Finance must match     | PM   |
| 3.    | atching | be matched to     | invoices to            | C-08 |
| 3.2.6 | C       | required          | appropriate            |      |
|       | riteria | documentation for | obligations, receiving | PM   |
|       | Met?    | the applicable    | reports, and           | C-09 |
|       |         | acquisition.      | acceptance information |      |
|       |         |                   | by document line item  |      |
|       |         |                   | and quantity.          |      |
|       |         |                   |                        |      |
|       |         |                   | The Core Financial     |      |
|       |         |                   | System must process    |      |
|       |         |                   | invoices for payment   |      |
|       |         |                   | of partial quantities  |      |
|       |         |                   | received.              |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Matched | Applicable        | The agency must define | PM   |
| 3.    | Invoice | document          | and implement criteria | C-08 |
| 3.2.7 |         | information is    | for types of invoices  |      |
|       |         | compared and      | for which two-way      | PM   |
|       |         | matched depending | (obligation and        | C-10 |
|       |         | on the applicable | invoice), three way    |      |
|       |         | criteria for a    | (invoice, obligation,  | PM   |
|       |         | two-way,          | simultaneous receipt   | C-11 |
|       |         | three-way, or     | and acceptance) or     |      |
|       |         | four-way matching | four-way matching      |      |
|       |         | process.          | (invoice, obligation,  |      |
|       |         |                   | receipt, and           |      |
|       |         |                   | acceptance) is         |      |
|       |         |                   | required. The          |      |
|       |         |                   | applicable matching    |      |
|       |         |                   | criteria should be     |      |
|       |         |                   | determined prior to    |      |
|       |         |                   | placing an order.      |      |
|       |         |                   |                        |      |
|       |         |                   | Agencies should        |      |
|       |         |                   | establish criteria and |      |
|       |         |                   | procedures under which |      |
|       |         |                   | a payment not          |      |
|       |         |                   | requiring an invoice   |      |
|       |         |                   | can be made. Such a    |      |
|       |         |                   | payment would be based |      |
|       |         |                   | on a contract schedule |      |
|       |         |                   | or other such agreed   |      |
|       |         |                   | upon payment schedule. |      |
|       |         |                   |                        |      |
|       |         |                   | Agency policies and    |      |
|       |         |                   | procedures and system  |      |
|       |         |                   | edits should require a |      |
|       |         |                   | receiving report for   |      |
|       |         |                   | pre-defined types of   |      |
|       |         |                   | goods (e.g.,           |      |
|       |         |                   | machinery, equipment). |      |
|       |         |                   | Such goods can be      |      |
|       |         |                   | identified             |      |
|       |         |                   | systematically based   |      |
|       |         |                   | on applicable data     |      |
|       |         |                   | fields within the      |      |
|       |         |                   | accounting             |      |
|       |         |                   | classification         |      |
|       |         |                   | elements used for the  |      |
|       |         |                   | transaction (e.g.,     |      |
|       |         |                   | object class).         |      |
|       |         |                   |                        |      |
|       |         |                   | Expenses should be     |      |
|       |         |                   | reviewed periodically  |      |
|       |         |                   | by a supervisor or     |      |
|       |         |                   | other applicable       |      |
|       |         |                   | personnel in the       |      |
|       |         |                   | Finance area. An       |      |
|       |         |                   | exception report is    |      |
|       |         |                   | generated for items    |      |
|       |         |                   | for which acceptance   |      |
|       |         |                   | is missing. Finance    |      |
|       |         |                   | personnel follow up on |      |
|       |         |                   | the items with         |      |
|       |         |                   | Business Unit          |      |
|       |         |                   | personnel.             |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Approve | Finance reviews   | Finance personnel      | TL   |
| 3.    | Invoice | and approves the  | review electronic      | E-01 |
| 3.2.8 |         | invoices in the   | evidence of the        | TL   |
|       |         | Core Financial    | existence and matching | E-02 |
|       |         | System. Finance   | of the award document  | TL   |
|       |         | may rely on the   | or contract, invoice,  | E-03 |
|       |         | Core Financial    | documents of receipt   | TL   |
|       |         | System to perform | and acceptance, as     | E-04 |
|       |         | the matching      | applicable, to         | TL   |
|       |         | function.         | determine that the     | E-05 |
|       |         | Invoices may be   | goods or services      | TL   |
|       |         | approved          | billed were in fact    | E-06 |
|       |         | electronically if | ordered and received   | TL   |
|       |         | automated edit    | prior to approving the | E-07 |
|       |         | checks serve to   | invoice.               | TL   |
|       |         | verify that       |                        | E-08 |
|       |         | required criteria | Automated edit checks  |      |
|       |         | have been met.    | are completed without  |      |
|       |         |                   | exception prior to     |      |
|       |         |                   | electronic approval of |      |
|       |         |                   | the electronically     |      |
|       |         |                   | matched invoice.       |      |
|       |         |                   |                        |      |
|       |         |                   | A well-designed        |      |
|       |         |                   | automated payment      |      |
|       |         |                   | system will include    |      |
|       |         |                   | evidence to verify     |      |
|       |         |                   | that the system is     |      |
|       |         |                   | designed and operating |      |
|       |         |                   | properly. Such         |      |
|       |         |                   | evidence is used by an |      |
|       |         |                   | approver to verify the |      |
|       |         |                   | system is designed and |      |
|       |         |                   | operating properly.    |      |
+-------+---------+-------------------+------------------------+------+
| PM    | A       | Once the          |                        |      |
| 3.    | pproved | vendor/payee is   |                        |      |
| 3.2.9 | Invoice | verified as       |                        |      |
|       |         | "active" in CCR   |                        |      |
|       |         | and previous      |                        |      |
|       |         | steps have been   |                        |      |
|       |         | successfully      |                        |      |
|       |         | accomplished, the |                        |      |
|       |         | invoice is        |                        |      |
|       |         | considered        |                        |      |
|       |         | approved.         |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Vendor  | The agency        | System edit checks     | PM   |
| 3.3   | Still   | verifies that the | verify that the        | C-07 |
| .2.10 | Active  | vendor/payee is   | vendor/payee is active |      |
|       | in CCR? | still active in   | in CCR prior to        |      |
|       |         | CCR prior to      | payment.               |      |
|       |         | payment.          |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Award   | If the invoice    | The Core Financial     | PM   |
| 3.3   | D       | fulfills          | System must record an  | C-09 |
| .2.11 | ocument | remaining line    | applicable invoice as  |      |
|       | to      | items on the      | the "final" invoice    |      |
|       | Remain  | award document,   | against a referenced   |      |
|       | Open?   | the quantities    | obligation.            |      |
|       |         | and amounts       |                        |      |
|       |         | remaining on the  | Acquisition is         |      |
|       |         | obligating        | notified when final    |      |
|       |         | document are      | payment has occurred   |      |
|       |         | closed to prevent | on an obligation to    |      |
|       |         | further payment   | facilitate the update  |      |
|       |         | activity.         | of acquisition         |      |
|       |         |                   | documents.             |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Award   | Documentation of  | A message should be    |      |
| 3.3   | D       | contract          | routed to              |      |
| .2.12 | ocument | performance is    | Acqu                   |      |
|       | Reconci | reconciled to     | isition/requisitioner, |      |
|       | liation | supporting        | as applicable, to      |      |
|       | Process | documentation     | review remaining       |      |
|       |         | prior to          | undelivered orders for |      |
|       |         | closeout.         | possible deobligation. |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Amounts | In the case of    | The Core Financial     |      |
| 3.3   | Same as | goods and/or      | System must check for  |      |
| .2.13 | E       | services          | differences between    |      |
|       | xpense? | received, the     | recorded expenses and  |      |
|       |         | system checks     | approved invoice       |      |
|       |         | whether the       | amounts.               |      |
|       |         | amount of the     |                        |      |
|       |         | invoice is the    |                        |      |
|       |         | same as the       |                        |      |
|       |         | amount expensed   |                        |      |
|       |         | at the time of    |                        |      |
|       |         | receipt of goods  |                        |      |
|       |         | and/or services.  |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Modify  | The Core          | The recorded expense   |      |
| 3.3   | Re      | Financial System  | should be modified     |      |
| .2.14 | cording | determines the    | consistent with the    |      |
|       | of      | amount by which   | additional shipping    |      |
|       | Expense | the recorded      | and other charges that |      |
|       |         | expense must be   | were previously        |      |
|       |         | modified to equal | authorized.            |      |
|       |         | the amount of the |                        |      |
|       |         | approved invoice. |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Verify  | Finance personnel | Based on agency        |      |
| 3.3   | Invoice | will perform a    | internal control       |      |
| .2.15 |         | second level      | procedures, selected   |      |
|       |         | review and        | invoices could be      |      |
|       |         | approval of       | subjected to an        |      |
|       |         | invoices meeting  | additional review and  |      |
|       |         | agency-defined    | approval based on      |      |
|       |         | criteria (e.g.,   | agency established     |      |
|       |         | invoice dollar    | controls and criteria  |      |
|       |         | amount greater    | (e.g., invoices        |      |
|       |         | than threshold).  | greater than specified |      |
|       |         |                   | threshold amounts,     |      |
|       |         |                   | applicable invoice     |      |
|       |         |                   | types).                |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Invoice | The agency        |                        |      |
| 3.3   | Ve      | determines        |                        |      |
| .2.16 | rified? | whether invoices  |                        |      |
|       |         | subjected to      |                        |      |
|       |         | additional review |                        |      |
|       |         | pass or fail such |                        |      |
|       |         | review.           |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Resolve | Issues noted      | The Core Financial     |      |
| 3.3   | Issue   | during the        | System should enable   |      |
| .2.17 |         | "Verify Invoice"  | routing of the invoice |      |
|       |         | step must be      | issue to authorized    |      |
|       |         | resolved prior to | personnel.             |      |
|       |         | approval of an    |                        |      |
|       |         | invoice.          |                        |      |
|       |         | Appropriate       |                        |      |
|       |         | notifications to  |                        |      |
|       |         | personnel are     |                        |      |
|       |         | made and actions  |                        |      |
|       |         | taken to resolve  |                        |      |
|       |         | the issue.        |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | V       | An authorized     | Documentation of the   | TL   |
| 3.3   | erified | approver reviews  | invoice, award         | E-03 |
| .2.18 | Invoice | all documents for | document, receipt,     |      |
|       |         | completeness and  | evidence of inspection | TL   |
|       |         | accuracy. The     | (physical goods), and  | E-06 |
|       |         | output is a       | acceptance are         |      |
|       |         | verified invoice  | required for an        | TL   |
|       |         | that includes all | invoice to be valid    | E-07 |
|       |         | documents         | for payment.           |      |
|       |         | reviewed by the   |                        | TL   |
|       |         | authorized        |                        | E-08 |
|       |         | approver. Upon    |                        |      |
|       |         | approval, the     |                        |      |
|       |         | invoice is        |                        |      |
|       |         | warehoused for    |                        |      |
|       |         | payment.          |                        |      |
+-------+---------+-------------------+------------------------+------+

##  **Credit Memo**

Credit Memos are issued by vendors in the event that previously accepted
goods are returned by an agency and are either offset by the invoice or
forwarded to the accounts receivable functional area for collections.
Integration of accounts payable and accounts receivable is excluded from
this chapter; however, where the process is performed the process flow
indicates that the credit memo is forwarded to accounts receivable. In
the event that the amount of the invoice exceeds that of the credit
memo, payment is made for the difference. The steps contained in PM
3.3.3 outline the procedures for managing the credit memo process.

***PM 3.3.3 -- Credit Memo Flowchart***

![](media/image23.wmf){width="6.493055555555555in"
height="3.754166666666667in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Credit Memo process steps are described as
follows:

+-------+---------+-------------------+------------------------+------+
| Step  | Step    | Step Description  | Business Rules         | CFSR |
| ID    | Name    |                   |                        |      |
|       |         |                   |                        | Req. |
+=======+=========+===================+========================+======+
| PM    | Prepare | The vendor/payee  | Agencies must          |      |
| 3.    |         | prepares and      | communicate to         |      |
| 3.3.1 | Credit  | submits to the    | vendor/payees that     |      |
|       | Memo    | agency a credit   | credit memos must be   |      |
|       |         | memo to settle a  | prepared by the        |      |
|       |         | claim.            | vendor/payees in       |      |
|       |         |                   | accordance with the    |      |
|       |         |                   | agency's prescribed    |      |
|       |         |                   | data and format        |      |
|       |         |                   | requirements.          |      |
|       |         |                   |                        |      |
|       |         |                   | Credit memos are       |      |
|       |         |                   | warehoused and offset  |      |
|       |         |                   | against outstanding    |      |
|       |         |                   | invoices. Payment is   |      |
|       |         |                   | processed when the     |      |
|       |         |                   | amount of the invoice  |      |
|       |         |                   | exceeds the credit     |      |
|       |         |                   | memo balance.          |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Ele     | Under best        | The Core Financial     | PM   |
| 3.    | ctronic | business          | System must provide    | D-50 |
| 3.3.2 | Credit  | practices, credit | automated              |      |
|       | Memo    | memos are         | functionality for      | PM   |
|       |         | submitted         | capturing credit memo  | D-51 |
|       |         | electronically.   | data.                  | PM   |
|       |         |                   |                        | D-52 |
|       |         |                   |                        | PM   |
|       |         |                   |                        | D-53 |
|       |         |                   |                        | PM   |
|       |         |                   |                        | D-54 |
+-------+---------+-------------------+------------------------+------+
| PM    | Credit  | Credit Memos are  | Paper credit memos     |      |
| 3.    | Memo    | received in       | received should be     |      |
| 3.3.3 |         | Finance (should   | imaged to enable the   |      |
|       |         | be via electronic | flow of invoice        |      |
|       |         | transmission).    | documents              |      |
|       |         |                   | electronically through |      |
|       |         | In the case of    | the accounts payable   |      |
|       |         | paper credit      | and invoicing          |      |
|       |         | memos, they are   | processes.             |      |
|       |         | forwarded to      |                        |      |
|       |         | appropriate       |                        |      |
|       |         | Finance or other  |                        |      |
|       |         | applicable        |                        |      |
|       |         | personnel.        |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Review  | Finance personnel | Finance personnel      |      |
| 3.    | Credit  | should review     | should review the      |      |
| 3.3.4 | Memo    | credit memos to   | credit memo to         |      |
|       |         | determine         | determine the          |      |
|       |         | appropriate       | likelihood that the    |      |
|       |         | disposition.      | agency will have       |      |
|       |         |                   | future business with   |      |
|       |         |                   | the vendor/payee.      |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Credit  | Finance personnel | Finance personnel must |      |
| 3.    | Memo    | must determine if | determine if the       |      |
| 3.3.5 | Offset  | the credit memo   | credit memo will be    |      |
|       | Against | should be input   | offset against a       |      |
|       | Future  | and warehoused    | future invoice or      |      |
|       | I       | with invoices for | processed as if a      |      |
|       | nvoice? | agency offset.    | receivable should be   |      |
|       |         |                   | established.           |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Refer   | Credit memo is    |                        |      |
| 3.    | to      | referred to       |                        |      |
| 3.3.6 | A       | accounts          |                        |      |
|       | ccounts | receivable        |                        |      |
|       | Rec     | personnel for     |                        |      |
|       | eivable | setup and         |                        |      |
|       |         | collection.       |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Import  | Credit memo is    | Under best practices,  |      |
| 3.    | Credit  | imported into the | data is imported.      |      |
| 3.3.7 | Memo    | agency's accounts |                        |      |
|       |         | payable system.   |                        |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Vendor  | System edit       | Core Financial System  | PM   |
| 3.    | Info.   | checks verify     | vendor/payee data must | A-04 |
| 3.3.8 | Matches | that vendor/payee | be regularly updated   |      |
|       | CCR     | information       | with changes to CCR    |      |
|       | Data?   | matches the       | data. Vendor/payee     |      |
|       |         | vendor/payee file | file fields must       |      |
|       |         | based on the      | accommodate CCR data.  |      |
|       |         | latest            |                        |      |
|       |         | vendor/payee      | The Core Financial     |      |
|       |         | database update.  | System must prevent    |      |
|       |         |                   | CCR vendor/payee data  |      |
|       |         |                   | from being changed by  |      |
|       |         |                   | the agency for those   |      |
|       |         |                   | vendor/payees required |      |
|       |         |                   | to register in the     |      |
|       |         |                   | CCR.                   |      |
+-------+---------+-------------------+------------------------+------+
| PM    | Resolve | Vendor must make  |                        |      |
| 3.    | Issue   | appropriate       |                        |      |
| 3.3.9 |         | changes to CCR    |                        |      |
|       |         | data or credit    |                        |      |
|       |         | memo.             |                        |      |
+-------+---------+-------------------+------------------------+------+

##  **Disbursements** 

The Disbursement processes described in Sections 3.4.1 and 3.4.2 refer
to the actual payment processes performed by the Department of the
Treasury. Depending on Prompt Payment Act or other agency-specific
requirements, payments may be submitted to the Treasury as either bulk
files or smaller files for overnight or next day payment.

## **Disbursements for Bulk Files (ACH/EFT, CCD, CCD+. CTX, and Checks)**

Bulk File payment types may be submitted via ACH/EFT (Automated Clearing
House/Electronic Funds Transfer), Cash Concentration Disbursement (CCD),
Cash Concentration Disbursement Plus Addendum (CCD+), Corporate Trade
Exchange (CTX) and checks. Key steps include submitting a bulk file to
Treasury, certification of payments to be disbursed, and disbursement.
The following flowchart includes the steps for the disbursement of bulk
files within the payment function. These steps depict the actions
performed from the point at which a Bulk File payment is warehoused
through payment to a payee.

## PM 3.4.1 Bulk Files (ACH/EFT, CCD, CCD+, CTX and Checks) Flowchart {#pm-3.4.1-bulk-files-acheft-ccd-ccd-ctx-and-checks-flowchart .unnumbered}

![](media/image24.wmf){width="6.499305555555556in"
height="4.690277777777778in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Disbursement -- Bulk Files (ACH/EFT, CCD, CCD+,
CTX, and Checks) process steps are described as follows:

+--------+----------+--------------------+-------------------+--------+
| Step   | Step     | Step Description   | Business Rules    | CFSR   |
| ID     | Name     |                    |                   | Req.   |
+========+==========+====================+===================+========+
| PM     | Wa       | Upon certification | As stated in      | PMC-16 |
| 3      | rehoused | of payment         | Treasury FMS      |        |
| .4.1.1 |          | requests, the      | Supplement to the | PMD-01 |
|        | Payment  | payment is         | TFM, Volume I,    |        |
|        |          | warehoused         | Part 4-1000, a    | PMD-17 |
|        |          | awaiting scheduled | well- designed    |        |
|        |          | payment in         | automated payment | PMD-13 |
|        |          | accordance with    | system will       |        |
|        |          | contract terms.    | include evidence  |        |
|        |          | These payments are | to verify that    |        |
|        |          | queued based on    | the system is     |        |
|        |          | due date for       | designed and      |        |
|        |          | compliance with    | operating         |        |
|        |          | the Prompt Payment | properly. Such    |        |
|        |          | Act. A Preliminary | evidence is used  |        |
|        |          | Payment Register   | by an authorized  |        |
|        |          | and Batch Report   | Certifying        |        |
|        |          | are run, and the   | Officer to verify |        |
|        |          | data is reviewed   | the system is     |        |
|        |          | by the Certifying  | designed and      |        |
|        |          | Officer to ensure  | operating         |        |
|        |          | the information is | properly.         |        |
|        |          | accurate and       |                   |        |
|        |          | complete.          | Personnel with    |        |
|        |          |                    | funding authority |        |
|        |          |                    | must review the   |        |
|        |          |                    | accounting        |        |
|        |          |                    | classification    |        |
|        |          |                    | elements,         |        |
|        |          |                    | including the     |        |
|        |          |                    | TAS-BETC, during  |        |
|        |          |                    | payment request   |        |
|        |          |                    | entry and         |        |
|        |          |                    | processing.       |        |
|        |          |                    |                   |        |
|        |          |                    | The agency        |        |
|        |          |                    | Certifying        |        |
|        |          |                    | Officer compares  |        |
|        |          |                    | the control       |        |
|        |          |                    | totals in the     |        |
|        |          |                    | Core Financial    |        |
|        |          |                    | System that were  |        |
|        |          |                    | used to generate  |        |
|        |          |                    | the payment       |        |
|        |          |                    | schedules with    |        |
|        |          |                    | the control       |        |
|        |          |                    | totals that will  |        |
|        |          |                    | be certified in   |        |
|        |          |                    | the Secure        |        |
|        |          |                    | Payment System    |        |
|        |          |                    | (SPS) for the     |        |
|        |          |                    | same schedules.   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Final    | The Certifying     | The agency shall  | PMD-12 |
| 3      | Payment  | Officer reviews    | comply with the   |        |
| .4.1.2 | Register | the payment batch  | Prompt Payment    |        |
|        | G        | and generates a    | Act and agencies  |        |
|        | enerated | Final Payment      | must follow the   |        |
|        |          | Register report.   | applicable SPS    |        |
|        |          |                    | user guide and    |        |
|        |          | The payment clock  | current TFM       |        |
|        |          | of the system      | guidance.         |        |
|        |          | tracks a scheduled |                   |        |
|        |          | payment, including |                   |        |
|        |          | discount, prompt   |                   |        |
|        |          | payment interest   |                   |        |
|        |          | (calculated within |                   |        |
|        |          | the Core Financial |                   |        |
|        |          | System) and        |                   |        |
|        |          | contract holdbacks |                   |        |
|        |          | (retainage)        |                   |        |
|        |          | according to the   |                   |        |
|        |          | projected payment  |                   |        |
|        |          | date.              |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Is Payee | If the payee is    | The payee is a    | PMC-06 |
| 3      | Active?  | active in the CCR  | person,           |        |
| .4.1.3 |          | system, a payment  | corporation, or   |        |
|        |          | schedule is        | other public or   |        |
|        |          | generated. If the  | private entity    |        |
|        |          | payee is inactive, | that is           |        |
|        |          | the payment is put | authorized to     |        |
|        |          | on hold.           | receive a payment |        |
|        |          |                    | from a federal    |        |
|        |          | If the payee is    | agency.           |        |
|        |          | not required to be |                   |        |
|        |          | registered in CCR, |                   |        |
|        |          | the payment is     |                   |        |
|        |          | processed and a    |                   |        |
|        |          | payment schedule   |                   |        |
|        |          | is generated.      |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Hold     | The payment is put | Payments placed   |        |
| 3      | Payment  | on hold.           | on hold must be   |        |
| .4.1.4 |          |                    | handled in        |        |
|        |          |                    | accordance with   |        |
|        |          |                    | Prompt Payment    |        |
|        |          |                    | Act requirements. |        |
|        |          |                    |                   |        |
|        |          |                    | The payee is      |        |
|        |          |                    | notified of the   |        |
|        |          |                    | payment being     |        |
|        |          |                    | placed on hold.   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Route    | The system routes  | Business Unit     | TLE-07 |
| 3      | Message  | a message to the   | personnel shall   |        |
| .4.1.5 | to       | applicable         | be designated for |        |
|        | Business | Business Unit      | notification of   |        |
|        | Unit     | personnel that the | held payments.    |        |
|        |          | payment has been   |                   |        |
|        |          | put on hold.       |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Schedule | A payment schedule | The payment       | PMD-02 |
| 3      | is       | is generated.      | schedule shall be |        |
| .4.1.6 | G        |                    | generated to      | PMD-07 |
|        | enerated | The Certifying     | include           |        |
|        |          | Officer then       | applicable        | PMD-08 |
|        |          | generates and      | attributes        |        |
|        |          | reviews, as        | required by the   | PMD-10 |
|        |          | applicable, an SPS | TFM and agency    |        |
|        |          | 1166 Voucher and   | guidelines.       | PMD-11 |
|        |          | Schedule of        |                   |        |
|        |          | Payments report.   | The agency must   | PMD-20 |
|        |          | (Depending on the  | comply with the   |        |
|        |          | agency, this       | Prompt Payment    | PMD-22 |
|        |          | action may be      | Act.              |        |
|        |          | automated.)        |                   | PMD-23 |
|        |          |                    | Agencies must     |        |
|        |          |                    | follow the        | PMD-24 |
|        |          |                    | applicable SPS    |        |
|        |          |                    | user guide,       | PMD-25 |
|        |          |                    | Treasury Green    |        |
|        |          |                    | Book, and current | PMD-26 |
|        |          |                    | TFM guidance.     |        |
|        |          |                    |                   | PMD-27 |
|        |          |                    | The Certifying    |        |
|        |          |                    | Officer must      | PMD-28 |
|        |          |                    | verify the        |        |
|        |          |                    | TAS-BETC.         | PMD-34 |
|        |          |                    |                   |        |
|        |          |                    | Agencies may      | PMD-35 |
|        |          |                    | include up to 60  |        |
|        |          |                    | payment records   | PMD-36 |
|        |          |                    | per schedule.     |        |
|        |          |                    |                   |        |
|        |          |                    | The agency must   |        |
|        |          |                    | capture TAS       |        |
|        |          |                    | information on    |        |
|        |          |                    | payment records,  |        |
|        |          |                    | up to 10 per      |        |
|        |          |                    | schedule for a    |        |
|        |          |                    | No                |        |
|        |          |                    | n-Government-wide |        |
|        |          |                    | Accounting        |        |
|        |          |                    | (Non-GWA)         |        |
|        |          |                    | reporting agency  |        |
|        |          |                    | and up to 100     |        |
|        |          |                    | TAS-BETCs for a   |        |
|        |          |                    | GWA reporting     |        |
|        |          |                    | agency.           |        |
|        |          |                    |                   |        |
|        |          |                    | The schedule must |        |
|        |          |                    | be submitted to   |        |
|        |          |                    | Treasury on the   |        |
|        |          |                    | day it is         |        |
|        |          |                    | generated.        |        |
|        |          |                    |                   |        |
|        |          |                    | The agency must   |        |
|        |          |                    | generate payment  |        |
|        |          |                    | schedule totals   |        |
|        |          |                    | by TAS/BETC for   |        |
|        |          |                    | each payment      |        |
|        |          |                    | file. In          |        |
|        |          |                    | addition, they    |        |
|        |          |                    | must combine      |        |
|        |          |                    | payment schedules |        |
|        |          |                    | into a single     |        |
|        |          |                    | file for          |        |
|        |          |                    | transmission to   |        |
|        |          |                    | Treasury with a   |        |
|        |          |                    | summary total by  |        |
|        |          |                    | the ALC and TAS   |        |
|        |          |                    | for the entire    |        |
|        |          |                    | file for          |        |
|        |          |                    | certification     |        |
|        |          |                    | purposes.         |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Disburse | Disbur             | Agencies record   | PMD-15 |
| 3      | ments-in | sements-in-Transit | the               |        |
| .4.1.7 | -Transit | are recorded in    | Disburs           |        |
|        | Recorded | the General Ledger | ements-in-Transit |        |
|        | in       | when the schedule  | General Ledger    |        |
|        | General  | is generated.      | entries by the    |        |
|        | Ledger   |                    | time the payment  |        |
|        |          |                    | is certified by a |        |
|        |          |                    | Certifying        |        |
|        |          |                    | Officer. If the   |        |
|        |          |                    | schedule is not   |        |
|        |          |                    | certified, then   |        |
|        |          |                    | the               |        |
|        |          |                    | Disburs           |        |
|        |          |                    | ements-in-Transit |        |
|        |          |                    | entry must be     |        |
|        |          |                    | reversed.         |        |
|        |          |                    |                   |        |
|        |          |                    | The entries are   |        |
|        |          |                    | recorded in the   |        |
|        |          |                    | general ledger    |        |
|        |          |                    | using the USSGL   |        |
|        |          |                    | Account           |        |
|        |          |                    | Transaction       |        |
|        |          |                    | Listing provided  |        |
|        |          |                    | in the current    |        |
|        |          |                    | TFM.              |        |
|        |          |                    |                   |        |
|        |          |                    | Examples include, |        |
|        |          |                    | but are not       |        |
|        |          |                    | limited to, the   |        |
|        |          |                    | following         |        |
|        |          |                    | transaction code  |        |
|        |          |                    | from the current  |        |
|        |          |                    | TFM:              |        |
|        |          |                    |                   |        |
|        |          |                    | TFM-B408 To       |        |
|        |          |                    | reclassify        |        |
|        |          |                    | payable schedules |        |
|        |          |                    | for disbursements |        |
|        |          |                    | to "in-transit"   |        |
|        |          |                    | until the payment |        |
|        |          |                    | schedule is       |        |
|        |          |                    | confirmed.        |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Submit   | The agency         | The agency must   | PMD-20 |
| 3      | Payment  | transmits an       | comply with the   |        |
| .4.1.8 | Bulk     | electronic (Bulk)  | Prompt Payment    |        |
|        | File to  | payment file or    | Act.              |        |
|        | Treasury | Disbursing Office  |                   |        |
|        |          | Schedule (EFT/ACH  | The agency        |        |
|        |          | or Check) to       | compares the      |        |
|        |          | Treasury. The      | Disbursing Office |        |
|        |          | payment            | Schedules to the  |        |
|        |          | information is     | supporting        |        |
|        |          | reviewed for       | financial         |        |
|        |          | accuracy by a      | documents, as     |        |
|        |          | Certifying Officer | applicable, in    |        |
|        |          | or other qualified | order to verify   |        |
|        |          | staff and then     | the amount and    |        |
|        |          | submitted to       | number of         |        |
|        |          | Treasury for       | payments.         |        |
|        |          | pre-edit of the    |                   |        |
|        |          | file to determine  | The file must be  |        |
|        |          | if the file can be | submitted to      |        |
|        |          | processed.         | Treasury on the   |        |
|        |          |                    | day it is         |        |
|        |          |                    | generated.        |        |
|        |          |                    |                   |        |
|        |          |                    | The check and EFT |        |
|        |          |                    | payment files     |        |
|        |          |                    | must be exported  |        |
|        |          |                    | in the current    |        |
|        |          |                    | Treasury FMS      |        |
|        |          |                    | defined formats.  |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | S        | The electronic     | Agencies shall    |        |
| 3      | ubmitted | payment submission | format payment    |        |
| .4.1.9 | Payment  | is received by     | files to comply   |        |
|        | File     | Treasury and       | with current      |        |
|        |          | subjected to       | Treasury data     |        |
|        |          | pre-edit           | attributes and    |        |
|        |          | procedures.        | requirements.     |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Perform  | Edit checks are    | Agencies shall    |        |
| 3.     | Edit     | applied to the     | format payment    |        |
| 4.1.10 | Checks   | payment file.      | files to comply   |        |
|        |          |                    | with current      |        |
|        |          |                    | Treasury data     |        |
|        |          |                    | attributes and    |        |
|        |          |                    | requirements.     |        |
|        |          |                    |                   |        |
|        |          |                    | Treasury will not |        |
|        |          |                    | process a file    |        |
|        |          |                    | that does not     |        |
|        |          |                    | pass edit checks. |        |
|        |          |                    | The agency will   |        |
|        |          |                    | need to generate  |        |
|        |          |                    | and transmit a    |        |
|        |          |                    | new payment file  |        |
|        |          |                    | for Treasury to   |        |
|        |          |                    | process.          |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Treasury | Treasury performs  |                   |        |
| 3.     | Sends    | a review and       |                   |        |
| 4.1.11 | Acknowle | pre-edit of the    |                   |        |
|        | dge-ment | bulk payment file  |                   |        |
|        |          | submitted by the   |                   |        |
|        |          | agency. If the     |                   |        |
|        |          | file is accepted   |                   |        |
|        |          | for processing,    |                   |        |
|        |          | Treasury generates |                   |        |
|        |          | a file control     |                   |        |
|        |          | number that is     |                   |        |
|        |          | sent as part of    |                   |        |
|        |          | the                |                   |        |
|        |          | acknowledgement to |                   |        |
|        |          | the agency.        |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Receipt  | Notification is    | The agency        |        |
| 3.     | of       | received by the    | includes the      |        |
| 4.1.12 | Acknowle | agency from        | control number in |        |
|        | dge-ment | Treasury           | their submission  |        |
|        |          | acknowledging that | of the            |        |
|        |          | the file can be    | corresponding SPS |        |
|        |          | processed by       | 1166 schedule     |        |
|        |          | Treasury. A        | voucher.          |        |
|        |          | control number is  |                   |        |
|        |          | assigned to the    | If the agency     |        |
|        |          | bulk payment file  | does not receive  |        |
|        |          | by Treasury.       | acknowledgment    |        |
|        |          |                    | that the bulk     |        |
|        |          |                    | payment file has  |        |
|        |          |                    | been accepted for |        |
|        |          |                    | processing, it    |        |
|        |          |                    | must follow up    |        |
|        |          |                    | with Treasury in  |        |
|        |          |                    | order to identify |        |
|        |          |                    | and resolve any   |        |
|        |          |                    | potential issue.  |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Positive | If positive        | The agency will   |        |
| 3.     | A        | acknowledgement is | implement         |        |
| 4.1.13 | cknowled | received, the      | procedures for    |        |
|        | ge-ment? | agency Certifies   | timely            |        |
|        |          | Payment. If        | determination of  |        |
|        |          | positive           | positive versus   |        |
|        |          | acknowledgement is | negative          |        |
|        |          | not received,      | acknowledgement.  |        |
|        |          | issue(s) must be   |                   |        |
|        |          | identified and     | The process of    |        |
|        |          | resolved or the    | certification is  |        |
|        |          | payment schedule   | as follows:       |        |
|        |          | is canceled.       |                   |        |
|        |          |                    | Upon receipt of   |        |
|        |          |                    | the system        |        |
|        |          |                    | acknowledgement   |        |
|        |          |                    | from Treasury,    |        |
|        |          |                    | the agency Data   |        |
|        |          |                    | Entry Operator    |        |
|        |          |                    | (DEO) accesses    |        |
|        |          |                    | SPS and completes |        |
|        |          |                    | the SPS 1166 with |        |
|        |          |                    | the following:    |        |
|        |          |                    |                   |        |
|        |          |                    | -   Total amount  |        |
|        |          |                    |     of the file   |        |
|        |          |                    |                   |        |
|        |          |                    | -   Total number  |        |
|        |          |                    |     of payment    |        |
|        |          |                    |     records       |        |
|        |          |                    |                   |        |
|        |          |                    | -   ALC           |        |
|        |          |                    |                   |        |
|        |          |                    | -   Appropriation |        |
|        |          |                    |     number        |        |
|        |          |                    |     (TAS-BETC)    |        |
|        |          |                    |                   |        |
|        |          |                    | -   Payment date  |        |
|        |          |                    |                   |        |
|        |          |                    | -   Payment       |        |
|        |          |                    |     schedule      |        |
|        |          |                    |     number(s),    |        |
|        |          |                    |                   |        |
|        |          |                    | -   Bulk file     |        |
|        |          |                    |     control       |        |
|        |          |                    |     number.       |        |
|        |          |                    |                   |        |
|        |          |                    | Depending on the  |        |
|        |          |                    | agency, this      |        |
|        |          |                    | process may be    |        |
|        |          |                    | automated,        |        |
|        |          |                    | whereby the       |        |
|        |          |                    | agency DEO        |        |
|        |          |                    | uploads into SPS  |        |
|        |          |                    | the SPS SF 1166   |        |
|        |          |                    | certification     |        |
|        |          |                    | controls totals   |        |
|        |          |                    | from the agency's |        |
|        |          |                    | Core Financial    |        |
|        |          |                    | System.           |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Agency   | The agency         | The agency must   |        |
| 3.     | C        | determines whether | comply with Title |        |
| 4.1.14 | ertifies | to certify the     | 31 U.S.C. 3528    |        |
|        | Payment? | payment file.      | for               |        |
|        |          |                    | responsibilities  |        |
|        |          |                    | of a Certifying   |        |
|        |          |                    | Officer.          |        |
|        |          |                    |                   |        |
|        |          |                    | After the DEO     |        |
|        |          |                    | enters the SPS    |        |
|        |          |                    | 1166 data in SPS, |        |
|        |          |                    | the agency        |        |
|        |          |                    | Certifying        |        |
|        |          |                    | Officer reviews   |        |
|        |          |                    | the entries and   |        |
|        |          |                    | then certifies    |        |
|        |          |                    | the schedule or   |        |
|        |          |                    | schedules of      |        |
|        |          |                    | payments in SPS.  |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Cancel   | If positive        | An agency can     |        |
| 3.     | Schedule | acknowledgement is | inform Treasury   |        |
| 4.1.15 |          | not received and   | within one day to |        |
|        |          | any applicable     | cancel payment of |        |
|        |          | issues cannot be   | a previously      |        |
|        |          | resolved on a      | certified         |        |
|        |          | timely basis, the  | payment.          |        |
|        |          | payment schedule   |                   |        |
|        |          | is canceled.       | The agency shall  |        |
|        |          |                    | institute and     |        |
|        |          |                    | follow procedures |        |
|        |          |                    | for canceling     |        |
|        |          |                    | payments in       |        |
|        |          |                    | accordance with   |        |
|        |          |                    | applicable SPS    |        |
|        |          |                    | user guide and    |        |
|        |          |                    | current TFM       |        |
|        |          |                    | guidance.         |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Reversal | Once a payment     | Agencies recorded | PMD-15 |
| 3.     | of       | schedule is        | the               |        |
| 4.1.16 | Entries  | canceled, the      | Disburs           | PMD-55 |
|        |          | Disbu              | ements-in-Transit |        |
|        |          | rsement-in-Transit | General Ledger    |        |
|        |          | General Ledger     | entries at the    |        |
|        |          | entries are        | time the payment  |        |
|        |          | reversed in the    | was certified by  |        |
|        |          | Core Financial     | a Certifying      |        |
|        |          | System.            | Officer. If the   |        |
|        |          |                    | schedule is not   |        |
|        |          | If positive        | certified, then   |        |
|        |          | acknowledgement is | the               |        |
|        |          | not received, the  | Disburs           |        |
|        |          | schedule is        | ements-in-Transit |        |
|        |          | canceled and the   | entry must be     |        |
|        |          | Disbu              | reversed.         |        |
|        |          | rsement-in-Transit |                   |        |
|        |          | General Ledger     | The entries are   |        |
|        |          | entries are        | recorded in the   |        |
|        |          | reversed.          | general ledger    |        |
|        |          | Similarly, if the  | using the USSGL   |        |
|        |          | agency declines to | Account           |        |
|        |          | certify payment,   | Transaction       |        |
|        |          | the entries are    | Listing provided  |        |
|        |          | reversed in the    | in the current    |        |
|        |          | Core Financial     | TFM.              |        |
|        |          | System.            |                   |        |
|        |          |                    | Examples include, |        |
|        |          |                    | but are not       |        |
|        |          |                    | limited to, the   |        |
|        |          |                    | following         |        |
|        |          |                    | transaction code  |        |
|        |          |                    | from the current  |        |
|        |          |                    | TFM:              |        |
|        |          |                    |                   |        |
|        |          |                    | TFM-B408 To       |        |
|        |          |                    | reclassify        |        |
|        |          |                    | payable schedules |        |
|        |          |                    | for disbursements |        |
|        |          |                    | to "in-transit"   |        |
|        |          |                    | until the payment |        |
|        |          |                    | schedule is       |        |
|        |          |                    | confirmed.        |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | C        | The Certified SPS  | Payment summary   |        |
| 3.     | ertified | 1166 summary       | schedules are     |        |
| 4.1.17 | Payment  | schedule is        | imported or       |        |
|        |          | verified against   | entered in SPS by |        |
|        |          | its corresponding  | a DEO and         |        |
|        |          | Bulk payment file. | certified in SPS  |        |
|        |          |                    | by a Certifying   |        |
|        |          |                    | Officer.          |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Is Bulk  | Bulk payment files |                   |        |
| 3.     | Payment  | that do not match  |                   |        |
| 4.1.18 | File     | corresponding SPS  |                   |        |
|        | A        | 1166s will be      |                   |        |
|        | ccepted? | rejected by        |                   |        |
|        |          | Treasury.          |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Resolve  | Finance performs   |                   |        |
| 3.     | Issue    | applicable actions |                   |        |
| 4.1.19 |          | to resolve the     |                   |        |
|        |          | issue.             |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Veri     | Treasury receives  | The agency must   |        |
| 3.     | fication | the certified      | comply with Title |        |
| 4.1.20 | of       | payment file from  | 31, U.S.C. 3327.  |        |
|        | Certi    | the agency and     |                   |        |
|        | fication | verifies the SPS   | The SPS system    |        |
|        |          | 1166 certification | automatically     |        |
|        |          | against the bulk   | verifies the      |        |
|        |          | payment files.     | Certifying        |        |
|        |          |                    | Officer and the   |        |
|        |          |                    | ALC prior to the  |        |
|        |          |                    | time of           |        |
|        |          |                    | certification. If |        |
|        |          |                    | the Certifying    |        |
|        |          |                    | Officer and the   |        |
|        |          |                    | ALC are not       |        |
|        |          |                    | properly linked,  |        |
|        |          |                    | the Certifying    |        |
|        |          |                    | Officer cannot    |        |
|        |          |                    | certify the       |        |
|        |          |                    | payment schedule. |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Bulk     | Treasury compares  | Treasury verifies |        |
| 3.     | File     | key totals for the | integrity of      |        |
| 4.1.21 | Matches  | Bulk File to the   | certified payment |        |
|        | SPS      | SPS 1166.          | information for   |        |
|        | 1166?    |                    | completed matches |        |
|        |          |                    | between the       |        |
|        |          |                    | payment amount,   |        |
|        |          |                    | schedule          |        |
|        |          |                    | number(s), and    |        |
|        |          |                    | item count. If    |        |
|        |          |                    | the payment file  |        |
|        |          |                    | and SPS 1166 do   |        |
|        |          |                    | not match, then   |        |
|        |          |                    | the file and      |        |
|        |          |                    | certification are |        |
|        |          |                    | rejected and the  |        |
|        |          |                    | General Ledger    |        |
|        |          |                    | entries are       |        |
|        |          |                    | reversed in the   |        |
|        |          |                    | agency's Core     |        |
|        |          |                    | Financial System. |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Release  | If the certified   | Once the payment  |        |
| 3.     | Payment  | payment            | process is        |        |
| 4.1.22 |          | information in the | completed,        |        |
|        |          | payment (Check or  | Treasury records  |        |
|        |          | EFT/ACH) and the   | confirmation of   |        |
|        |          | bulk file match,   | disbursement for  |        |
|        |          | then the payments  | agency access.    |        |
|        |          | are released for   |                   |        |
|        |          | disbursement.      |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Offset   | After receipt,     | The agency must   |        |
| 3.     |          | acceptance and     | follow Treasury   |        |
| 4.1.23 |          | issuing payment    | guidance and      |        |
|        |          | numbers, but prior | applicable        |        |
|        |          | to releasing the   | procedures for    |        |
|        |          | payment to the     | the Treasury      |        |
|        |          | payee, the payment | Offset programs   |        |
|        |          | file is sent       | (PL 104-134-APR   |        |
|        |          | through the        | 26, 1996, 31 CFR  |        |
|        |          | Treasury Offset    | 285, 900-904, 5   |        |
|        |          | Program.           | CFR 550).         |        |
|        |          |                    |                   |        |
|        |          | If a debt is owed  |                   |        |
|        |          | by the payee, the  |                   |        |
|        |          | payment due is     |                   |        |
|        |          | offset and, if     |                   |        |
|        |          | applicable, any    |                   |        |
|        |          | residual amount is |                   |        |
|        |          | sent to the payee. |                   |        |
|        |          | If no debt is      |                   |        |
|        |          | owed, the payment  |                   |        |
|        |          | is made in full.   |                   |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Payee    | EFTs are sent to   | Fund transfers    |        |
| 3.     | Receives | the appropriate    | are sent to the   |        |
| 4.1.24 | Payment  | Federal Reserve    | appropriate FRB.  |        |
|        |          | Bank (FRB). Checks |                   |        |
|        |          | are mailed through | Under best        |        |
|        |          | the Postal Service | business          |        |
|        |          | to the payee.      | practices, EFT is |        |
|        |          |                    | the preferred     |        |
|        |          |                    | method of         |        |
|        |          |                    | payment.          |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Agency   | Electronic         | Treasury makes    |        |
| 3.     | Records  | confirmation is    | available to the  |        |
| 4.1.25 | the      | made available to  | agency through    |        |
|        | Conf     | the agency from    | the               |        |
|        | irmation | Treasury.          | Government-wide   |        |
|        |          | Information        | Accounting (GWA)  |        |
|        |          | provided includes  | Treasury          |        |
|        |          | acknowledgement of | Disbursing Office |        |
|        |          | the disbursement   | (TDO) Support     |        |
|        |          | of the certified   | Listings an       |        |
|        |          | payment schedule,  | electronic        |        |
|        |          | schedule number    | confirmation of   |        |
|        |          | and check/trace    | disbursement of   |        |
|        |          | number.            | the certified     |        |
|        |          |                    | payment schedule. |        |
|        |          |                    |                   |        |
|        |          |                    | The agency        |        |
|        |          |                    | receives this     |        |
|        |          |                    | confirmation,     |        |
|        |          |                    | which triggers    |        |
|        |          |                    | changing the      |        |
|        |          |                    | status of the     |        |
|        |          |                    | Disburs           |        |
|        |          |                    | ements-in-Transit |        |
|        |          |                    | to a Disbursement |        |
|        |          |                    | in the General    |        |
|        |          |                    | Ledger.           |        |
|        |          |                    |                   |        |
|        |          |                    | The agency should |        |
|        |          |                    | record the        |        |
|        |          |                    | schedule number   |        |
|        |          |                    | and check/trace   |        |
|        |          |                    | number received   |        |
|        |          |                    | from Treasury.    |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Mark     | General Ledger     | The agency marks  |        |
| 3.     | Payment  | impact is recorded | the payment       |        |
| 4.1.26 | Request  | based on           | request and/or    |        |
|        | Paid     | system-generated   | line items paid   |        |
|        |          | disbursement       | in the Core       |        |
|        |          | confirmation.      | Financial System, |        |
|        |          |                    | which occurs      |        |
|        |          |                    | simultaneously    |        |
|        |          |                    | with the          |        |
|        |          |                    | Disbursement of   |        |
|        |          |                    | "Fund Balance     |        |
|        |          |                    | Records in to     |        |
|        |          |                    | General Ledger"   |        |
|        |          |                    | step PM 3.4.1.27. |        |
+--------+----------+--------------------+-------------------+--------+
| PM     | Disb     | Once disbursed,    | The entries are   | PMD-39 |
| 3.     | ursement | the Paid           | recorded in the   |        |
| 4.1.27 | of Fund  | Disbursement       | general ledger    |        |
|        | Balance  | Voucher supports   | using the USSGL   |        |
|        | Records  | updating of the    | Account           |        |
|        | in       | General Ledger and | Transaction       |        |
|        | General  | the Fund Balance   | Listing provided  |        |
|        | Ledger   | with Treasury      | in the current    |        |
|        |          | (FBWT).            | TFM.              |        |
|        |          |                    |                   |        |
|        |          |                    | Examples include, |        |
|        |          |                    | but are not       |        |
|        |          |                    | limited to, the   |        |
|        |          |                    | following         |        |
|        |          |                    | transaction code  |        |
|        |          |                    | from the current  |        |
|        |          |                    | TFM:              |        |
|        |          |                    |                   |        |
|        |          |                    | TFM-B110 To       |        |
|        |          |                    | record a          |        |
|        |          |                    | confirmed         |        |
|        |          |                    | disbursement      |        |
|        |          |                    | schedule.         |        |
+--------+----------+--------------------+-------------------+--------+

## **Disbursements for Small Volume and Same or Next Day Payments**

Same or next day payments are expedited in order to be disbursed more
quickly than those included in bulk files submitted by agencies for
disbursement. Agencies would typically expedite disbursements for these
types of payments more quickly than bulk file payments in the case of
emergencies. Under these circumstances the originating agency must have
the funds deposited in the payee's account on the same date as the
certification of the payment. These types of small volume or same/next
day payments are typically processed through Fedwire and are notable for
high dollar low volume payments.

The following flowchart provides the steps relating to the submission of
a small volume payments file, same or next day payments to Treasury,
certification of payment, release of payment and the confirmation of
disbursement.

***PM 3.4.2 - Small Volume and Same or Next Day Payments Flowchart***

![](media/image25.wmf){width="6.498611111111111in"
height="4.149305555555555in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Disbursements -- Small Volume and Same or Next
Day Payments process steps are described as follows:

+------+-------------+--------------------+------------------+--------+
| Step | Step Name   | Step Description   | Business Rules   | CFSR   |
| ID   |             |                    |                  | Req.   |
+======+=============+====================+==================+========+
| PM   | Warehoused  | Upon certification | The agency must  |        |
| 3.4  |             | of payments, the   | comply with the  |        |
| .2.1 | Payment     | payment is         | Prompt Payment   |        |
|      |             | warehoused         | Act.             |        |
|      |             | awaiting scheduled |                  |        |
|      |             | payment in         |                  |        |
|      |             | accordance with    |                  |        |
|      |             | contract terms.    |                  |        |
|      |             | These payments are |                  |        |
|      |             | queued based on    |                  |        |
|      |             | due date for       |                  |        |
|      |             | compliance with    |                  |        |
|      |             | the Prompt Payment |                  |        |
|      |             | Act. A Preliminary |                  |        |
|      |             | Payment Register   |                  |        |
|      |             | and Batch Report   |                  |        |
|      |             | are run and the    |                  |        |
|      |             | data is reviewed   |                  |        |
|      |             | by the certifying  |                  |        |
|      |             | official to ensure |                  |        |
|      |             | the information is |                  |        |
|      |             | accurate and       |                  |        |
|      |             | complete.          |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Hold        | Warehoused small   | Warehoused       |        |
| 3.4  | Payment     | volume same or     | payments that    |        |
| .2.2 |             | next day payments  | are going to use |        |
|      |             | are placed on      | the small volume |        |
|      |             | hold.              | or next day      |        |
|      |             |                    | payment process  |        |
|      |             |                    | should be placed |        |
|      |             |                    | on hold in the   |        |
|      |             |                    | system to keep   |        |
|      |             |                    | them from being  |        |
|      |             |                    | selected in the  |        |
|      |             |                    | automated        |        |
|      |             |                    | payment process  |        |
|      |             |                    | to prevent       |        |
|      |             |                    | duplicate        |        |
|      |             |                    | payment.         |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Payment     | The payee requests | Internal control |        |
| 3.4  | Requested   | the agency to make | steps should be  |        |
| .2.3 |             | a payment that is  | in place to      |        |
|      |             | not already a      | supplement       |        |
|      |             | warehoused         | automated        |        |
|      |             | payment.           | controls when    |        |
|      |             |                    | manual           |        |
|      |             |                    | processing of    |        |
|      |             |                    | payment          |        |
|      |             |                    | schedules is     |        |
|      |             |                    | performed.       |        |
|      |             |                    |                  |        |
|      |             |                    | The Certifying   |        |
|      |             |                    | Officer must     |        |
|      |             |                    | verify the       |        |
|      |             |                    | TAS-BETC of the  |        |
|      |             |                    | scheduled        |        |
|      |             |                    | payment as       |        |
|      |             |                    | applicable.      |        |
|      |             |                    |                  |        |
|      |             |                    | Treasury         |        |
|      |             |                    | requires that    |        |
|      |             |                    | payments         |        |
|      |             |                    | submitted for    |        |
|      |             |                    | Same Day Payment |        |
|      |             |                    | Request (SDPR)   |        |
|      |             |                    | include TINs.    |        |
|      |             |                    | When the SDPR is |        |
|      |             |                    | submitted,       |        |
|      |             |                    | Treasury will    |        |
|      |             |                    | validate the TIN |        |
|      |             |                    | against the      |        |
|      |             |                    | debtor database. |        |
|      |             |                    |  If it is        |        |
|      |             |                    | determined that  |        |
|      |             |                    | the TIN has debt |        |
|      |             |                    | to the Federal   |        |
|      |             |                    | government, the  |        |
|      |             |                    | agency is        |        |
|      |             |                    | informed that    |        |
|      |             |                    | the payee has    |        |
|      |             |                    | been identified  |        |
|      |             |                    | as having a      |        |
|      |             |                    | "federal debt\". |        |
|      |             |                    |                  |        |
|      |             |                    | Agencies have    |        |
|      |             |                    | the option to    |        |
|      |             |                    | change the       |        |
|      |             |                    | payment to next  |        |
|      |             |                    | day ACH, check   |        |
|      |             |                    | payment or       |        |
|      |             |                    | submit the       |        |
|      |             |                    | payment for      |        |
|      |             |                    | SDPR.            |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Payment     | The DEO exports    | The agency must  | PMD-31 |
| 3.4  | Data        | the payment data   | comply with the  |        |
| .2.4 | Exported to | to SPS, through a  | Prompt Payment   |        |
|      | SPS         | small volume       | Act.             |        |
|      |             | upload process.    |                  |        |
|      |             |                    | Agencies must    |        |
|      |             | Alternatively, the | follow the       |        |
|      |             | payment data may   | applicable SPS   |        |
|      |             | be manually        | user guide, and  |        |
|      |             | entered into SPS.  | current TFM      |        |
|      |             |                    | guidance.        |        |
|      |             | The payment data   |                  |        |
|      |             | is imported or     | Agencies may     |        |
|      |             | entered and        | include up to 60 |        |
|      |             | processed in the   | payment records  |        |
|      |             | Treasury SPS       | per schedule.    |        |
|      |             | system.            |                  |        |
|      |             |                    | The agency must  |        |
|      |             |                    | capture TAS      |        |
|      |             |                    | information on   |        |
|      |             |                    | payment records, |        |
|      |             |                    | up to 10 per     |        |
|      |             |                    | schedule for a   |        |
|      |             |                    | Non              |        |
|      |             |                    | -Government-wide |        |
|      |             |                    | Accounting       |        |
|      |             |                    | (Non-GWA)        |        |
|      |             |                    | reporting agency |        |
|      |             |                    | and up to 100    |        |
|      |             |                    | TAS-BETCs for a  |        |
|      |             |                    | GWA reporting    |        |
|      |             |                    | agency.          |        |
|      |             |                    |                  |        |
|      |             |                    | The SPS 1166     |        |
|      |             |                    | schedule must    |        |
|      |             |                    | contain the      |        |
|      |             |                    | following:       |        |
|      |             |                    |                  |        |
|      |             |                    | -   Total amount |        |
|      |             |                    |     of the       |        |
|      |             |                    |     schedule     |        |
|      |             |                    |                  |        |
|      |             |                    | -   Total number |        |
|      |             |                    |     of payment   |        |
|      |             |                    |     records      |        |
|      |             |                    |                  |        |
|      |             |                    | -   ALC          |        |
|      |             |                    |                  |        |
|      |             |                    | -                |        |
|      |             |                    |    Appropriation |        |
|      |             |                    |     number       |        |
|      |             |                    |     (TAS-BETC)   |        |
|      |             |                    |                  |        |
|      |             |                    | -   Payment      |        |
|      |             |                    |     date,        |        |
|      |             |                    |                  |        |
|      |             |                    | -   Payment      |        |
|      |             |                    |     schedule     |        |
|      |             |                    |     number.      |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Authorized  | A document is      |                  |        |
| 3.4  | Payment     | generated to       |                  |        |
| .2.5 |             | support the entry  |                  |        |
|      | Schedule    | into SPS for the   |                  |        |
|      |             | payment. This      |                  |        |
|      |             | document will be   |                  |        |
|      |             | used to record the |                  |        |
|      |             | Disbur             |                  |        |
|      |             | sements-in-Transit |                  |        |
|      |             | entries into the   |                  |        |
|      |             | system.            |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Certify     | The agency DEO     | The agency will  |        |
| 3.4  | Payment     | accesses SPS and   | comply with      |        |
| .2.6 | Schedule    | imports payment    | Title 31 U.S.C.  |        |
|      |             | records or enters  | 3528.            |        |
|      |             | the payment        |                  |        |
|      |             | records online     | The Certifying   |        |
|      |             | into the           | Officer must     |        |
|      |             |                    | verify the       |        |
|      |             | Treasury Type A    | TAS-BETC.        |        |
|      |             | SPS 1166 schedule  |                  |        |
|      |             | voucher function.  | The CO verifies  |        |
|      |             |                    | the entries and  |        |
|      |             | The payment        | then certifies   |        |
|      |             | schedule is        | the schedule(s), |        |
|      |             | imported or        | for submission   |        |
|      |             | entered and        | to SPS.          |        |
|      |             | processed in the   |                  |        |
|      |             | Treasury SPS       |                  |        |
|      |             | system.            |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Submit      | Once the           | Agencies must    |        |
| 3.4  | Payment     | Certifying Officer | follow           |        |
| .2.7 | File        | certifies the      | applicable SPS   |        |
|      |             | schedule, it is    | user guide and   |        |
|      |             | automatically      | TFM guidance.    |        |
|      |             | transmitted to     |                  |        |
|      |             | Treasury.          | Payment summary  |        |
|      |             |                    | schedules are    |        |
|      |             |                    | imported in SPS  |        |
|      |             |                    | by a DEO and     |        |
|      |             |                    | certified in SPS |        |
|      |             |                    | by a Certifying  |        |
|      |             |                    | Officer.         |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Di          | Disbur             | Agencies record  | PMD-15 |
| 3.4  | sbursements | sements-in-Transit | the              |        |
| .2.8 | -in-Transit | is recorded in the | Disburse         |        |
|      | Recorded in | General Ledger     | ments-in-Transit |        |
|      | General     | when the schedule  | General Ledger   |        |
|      | Ledger      | is generated.      | entries by the   |        |
|      |             |                    | time the payment |        |
|      |             |                    | is certified by  |        |
|      |             |                    | a Certifying     |        |
|      |             |                    | Officer. If the  |        |
|      |             |                    | schedule is not  |        |
|      |             |                    | certified, then  |        |
|      |             |                    | the              |        |
|      |             |                    | Disburse         |        |
|      |             |                    | ments-in-Transit |        |
|      |             |                    | entry must be    |        |
|      |             |                    | reversed.        |        |
|      |             |                    |                  |        |
|      |             |                    | The entries are  |        |
|      |             |                    | recorded in the  |        |
|      |             |                    | general ledger   |        |
|      |             |                    | using the USSGL  |        |
|      |             |                    | Account          |        |
|      |             |                    | Transaction      |        |
|      |             |                    | Listing provided |        |
|      |             |                    | in the current   |        |
|      |             |                    | TFM.             |        |
|      |             |                    |                  |        |
|      |             |                    | Examples         |        |
|      |             |                    | include, but are |        |
|      |             |                    | not limited to,  |        |
|      |             |                    | the following    |        |
|      |             |                    | transaction code |        |
|      |             |                    | from the current |        |
|      |             |                    | TFM:             |        |
|      |             |                    |                  |        |
|      |             |                    | TFM-B408 To      |        |
|      |             |                    | reclassify       |        |
|      |             |                    | payable          |        |
|      |             |                    | schedules for    |        |
|      |             |                    | disbursements to |        |
|      |             |                    | "in-transit"     |        |
|      |             |                    | until the        |        |
|      |             |                    | payment schedule |        |
|      |             |                    | is confirmed.    |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Payment     | The transmitted    | An agency can    |        |
| 3.4  | Schedule    | file that is sent  | inform Treasury  |        |
| .2.9 |             | to Treasury        | within one day   |        |
|      |             | contains the       | to cancel        |        |
|      |             | information needed | payment of a     |        |
|      |             | for issuing the    | previously       |        |
|      |             | payment.           | certified        |        |
|      |             |                    | payment.         |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Is Payment  | The certified SPS  |                  |        |
| 3.4. | Schedule    | 1166 summary       |                  |        |
| 2.10 | Accepted?   | schedule is        |                  |        |
|      |             | verified against   |                  |        |
|      |             | its corresponding  |                  |        |
|      |             | Bulk payment file. |                  |        |
|      |             | Bulk payment files |                  |        |
|      |             | that do not match  |                  |        |
|      |             | corresponding SPS  |                  |        |
|      |             | 1166s will be      |                  |        |
|      |             | rejected by FMS.   |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Resolve     | Finance performs   |                  |        |
| 3.4. | Issue       | applicable actions |                  |        |
| 2.11 |             | to resolve the     |                  |        |
|      |             | issue.             |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Release     | The transmitted    | The agency must  | PMD-30 |
| 3.4. | Payment     | file (payment      | schedule and     |        |
| 2.12 |             | schedule) is       | disburse U.S.    |        |
|      |             | edited for         | dollar payments  |        |
|      |             | accuracy and the   | (Treasury SPS    |        |
|      |             | payment is issued. | 1166) through    |        |
|      |             |                    | the Treasury's   |        |
|      |             | If the agency has  | SPS, containing  |        |
|      |             | used a duplicate   | up to the limit  |        |
|      |             | schedule number    | of 60 payments   |        |
|      |             | and ALC, or the    | per schedule.    |        |
|      |             | ALC and CO are not |                  |        |
|      |             | linked and active  | Agencies will    |        |
|      |             | in SPS, then the   | comply with      |        |
|      |             | schedule will be   | Title 31,        |        |
|      |             | rejected. The      | Chapter 33,      |        |
|      |             | summary total for  | Subchapter II    |        |
|      |             | amounts and items  | (a), U.S.C.      |        |
|      |             | must also be       | 3325.            |        |
|      |             | accurate.          |                  |        |
|      |             |                    | The SPS system   |        |
|      |             |                    | automatically    |        |
|      |             |                    | verifies the     |        |
|      |             |                    | Certifying       |        |
|      |             |                    | Officer and ALC  |        |
|      |             |                    | prior to the     |        |
|      |             |                    | time of          |        |
|      |             |                    | certification.   |        |
|      |             |                    | If the           |        |
|      |             |                    | Certifying       |        |
|      |             |                    | Officer and ALC  |        |
|      |             |                    | are not properly |        |
|      |             |                    | linked, the      |        |
|      |             |                    | Certifying       |        |
|      |             |                    | Officer will     |        |
|      |             |                    | only be able to  |        |
|      |             |                    | view the payment |        |
|      |             |                    | schedule and     |        |
|      |             |                    | will be unable   |        |
|      |             |                    | to certify it.   |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Offset      | After receipt,     | The agency must  |        |
| 3.4. |             | acceptance and     | follow Treasury  |        |
| 2.13 |             | issuing payment    | guidance and     |        |
|      |             | numbers, but prior | applicable       |        |
|      |             | to releasing the   | procedures for   |        |
|      |             | payment to the     | the Treasury     |        |
|      |             | payee, the payment | Offset programs  |        |
|      |             | file is sent       | (PL 104-134-APR  |        |
|      |             | through the        | 26, 1996, 31 CFR |        |
|      |             | Treasury Offset    | 285, 900-904, 5  |        |
|      |             | Program.           | CFR 550).        |        |
|      |             |                    |                  |        |
|      |             | If a debt is owed  |                  |        |
|      |             | by the payee, the  |                  |        |
|      |             | payment due is     |                  |        |
|      |             | offset and, if     |                  |        |
|      |             | applicable, any    |                  |        |
|      |             | residual amount is |                  |        |
|      |             | sent to the payee. |                  |        |
|      |             | If no debt is      |                  |        |
|      |             | owed, the payment  |                  |        |
|      |             | is made in full.   |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Payee       | EFTs are sent to   | Funds transfers  |        |
| 3.4. | Receives    | the appropriate    | are sent to the  |        |
| 2.14 | Payment     | Federal Reserve    | appropriate FRB. |        |
|      |             | Bank (FRB). Checks |                  |        |
|      |             | are mailed through | Under best       |        |
|      |             | the Postal Service | business         |        |
|      |             | to the payee.      | practices, EFT   |        |
|      |             |                    | is the preferred |        |
|      |             |                    | method of        |        |
|      |             |                    | payment.         |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Agency      | Electronic         | The agency       |        |
| 3.4. | Records the | confirmation is    | receives this    |        |
| 2.15 | C           | made available to  | confirmation,    |        |
|      | onfirmation | the agency from    | which triggers   |        |
|      |             | Treasury.          | changing the     |        |
|      |             | Information        | status of the    |        |
|      |             | provided includes  | Disburse         |        |
|      |             | acknowledgement of | ments-in-Transit |        |
|      |             | the disbursement   | to a             |        |
|      |             | of the certified   | disbursement in  |        |
|      |             | payment schedule,  | the General      |        |
|      |             | schedule number,   | Ledger.          |        |
|      |             | and check/trace    |                  |        |
|      |             | number.            | Treasury makes   |        |
|      |             |                    | available to the |        |
|      |             |                    | agency, through  |        |
|      |             |                    | the              |        |
|      |             |                    | Government-wide  |        |
|      |             |                    | Accounting (GWA) |        |
|      |             |                    | Treasury         |        |
|      |             |                    | Disbursing       |        |
|      |             |                    | Office (TDO)     |        |
|      |             |                    | Support          |        |
|      |             |                    | Listings, an     |        |
|      |             |                    | electronic       |        |
|      |             |                    | confirmation of  |        |
|      |             |                    | disbursement of  |        |
|      |             |                    | the certified    |        |
|      |             |                    | payment          |        |
|      |             |                    | schedule.        |        |
|      |             |                    |                  |        |
|      |             |                    | The agency       |        |
|      |             |                    | receives this    |        |
|      |             |                    | confirmation,    |        |
|      |             |                    | which triggers   |        |
|      |             |                    | changing the     |        |
|      |             |                    | status of the    |        |
|      |             |                    | Disburse         |        |
|      |             |                    | ments-in-Transit |        |
|      |             |                    | to a             |        |
|      |             |                    | disbursement in  |        |
|      |             |                    | the General      |        |
|      |             |                    | Ledger.          |        |
|      |             |                    |                  |        |
|      |             |                    | The agency       |        |
|      |             |                    | should record    |        |
|      |             |                    | the schedule     |        |
|      |             |                    | number and       |        |
|      |             |                    | check/trace      |        |
|      |             |                    | number received  |        |
|      |             |                    | from Treasury.   |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Payment     | The agency         |                  |        |
| 3.4. | Request     | determines whether |                  |        |
| 2.16 | Entered in  | the payment        |                  |        |
|      | System?     | request results    |                  |        |
|      |             | from a warehoused  |                  |        |
|      |             | payment that had   |                  |        |
|      |             | been previously    |                  |        |
|      |             | entered into the   |                  |        |
|      |             | Core Financial     |                  |        |
|      |             | System.            |                  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Enter       | A payment request  | The Finance      |        |
| 3.4. | Payment     | is entered in the  | official makes   |        |
| 2.17 | Request and | system by Finance  | sure the payment |        |
|      | Validate    | and validated      | is not a         |        |
|      |             | against the        | duplicate        |        |
|      |             | payment schedule   | request.         |        |
|      |             | to record the      |                  |        |
|      |             | information        | Under best       |        |
|      |             | related to the     | business         |        |
|      |             | payment request    | practices,       |        |
|      |             | for items that did | payment requests |        |
|      |             | not come through   | should be        |        |
|      |             | the standard       | submitted        |        |
|      |             | payment request    | electronically.  |        |
|      |             | process.           |                  |        |
|      |             |                    | If the payment   |        |
|      |             |                    | request has not  |        |
|      |             |                    | been entered     |        |
|      |             |                    | into the system, |        |
|      |             |                    | the payment      |        |
|      |             |                    | request will be  |        |
|      |             |                    | entered and      |        |
|      |             |                    | manually         |        |
|      |             |                    | approved for     |        |
|      |             |                    | payment and      |        |
|      |             |                    | marked as paid.  |        |
+------+-------------+--------------------+------------------+--------+
| PM   | Mark        | General Ledger     | The agency marks |        |
| 3.4. | Payment     | impact is recorded | the payment      |        |
| 2.18 | Request     | based on           | request and/or   |        |
|      | Paid        | system-generated   | line items paid  |        |
|      |             | disbursement       | in the Core      |        |
|      |             | confirmation.      | Financial        |        |
|      |             |                    | System, which    |        |
|      |             |                    | occurs           |        |
|      |             |                    | simultaneously   |        |
|      |             |                    | with the         |        |
|      |             |                    | Disbursement of  |        |
|      |             |                    | Fund Balance     |        |
|      |             |                    | Records in       |        |
|      |             |                    | General Ledger   |        |
|      |             |                    | in step PM       |        |
|      |             |                    | 3.4.2.19.        |        |
+------+-------------+--------------------+------------------+--------+
| PM   | D           | Once disbursed,    | The entries are  | PMD-39 |
| 3.4. | isbursement | the voucher        | recorded using   |        |
| 2.19 | of Fund     | supports updating  | the USSGL        |        |
|      | Balance     | of the General     | Account          |        |
|      | Records in  | Ledger and the     | Transaction      |        |
|      | the General | Fund Balance with  | Listing provided |        |
|      | Ledger      | Treasury (FBWT).   | in the current   |        |
|      |             |                    | TFM for the      |        |
|      |             |                    | payment of       |        |
|      |             |                    | advances and     |        |
|      |             |                    | pre-paid         |        |
|      |             |                    | expenses, as     |        |
|      |             |                    | applicable.      |        |
|      |             |                    |                  |        |
|      |             |                    | Examples         |        |
|      |             |                    | include, but are |        |
|      |             |                    | not limited to,  |        |
|      |             |                    | the following    |        |
|      |             |                    | transaction code |        |
|      |             |                    | from the current |        |
|      |             |                    | TFM:             |        |
|      |             |                    |                  |        |
|      |             |                    | TFM-B110 To      |        |
|      |             |                    | record a         |        |
|      |             |                    | confirmed        |        |
|      |             |                    | disbursement     |        |
|      |             |                    | schedule.        |        |
+------+-------------+--------------------+------------------+--------+

## **Returned Payments -- ACH, Check, Same Day**

Use of EFT represents the best practice for making governmental
payments. Payments can be returned to the Treasury due to issues such as
lack of a correct address, death of the payee, or an invalid ACH
account. This section presents key steps for the cancellation and return
of payments from Treasury to the agency. All returned and canceled
payments include: checks, ACH, CTX, CCD, CCD+ and Fedwire.

***PM 3.5 Returned Payments - ACH, Check, Same Day Flowchart***

![](media/image26.wmf){width="6.492361111111111in"
height="4.969444444444444in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

The Payment Management Returned Payments process steps are described as
follows:

+--------+--------+--------------------+-----------------------+------+
| Step   | Step   | Step Description   | Business Rules        | CFSR |
| ID     | Name   |                    |                       | Req. |
+========+========+====================+=======================+======+
| PM     | Return | A check payment is | Agencies must follow  |      |
| 3.5.1  | Check  | returned to        | applicable TFM        |      |
|        | to     | Treasury by the    | guidance.             |      |
|        | Tr     | U.S. Postal        |                       |      |
|        | easury | Service when there |                       |      |
|        |        | is an incorrect or |                       |      |
|        |        | incomplete         |                       |      |
|        |        | address, or death  |                       |      |
|        |        | of the payee.      |                       |      |
|        |        |                    |                       |      |
|        |        | Check payments may |                       |      |
|        |        | also be withheld   |                       |      |
|        |        | from being mailed  |                       |      |
|        |        | at the request of  |                       |      |
|        |        | the agency         |                       |      |
|        |        | authorizing the    |                       |      |
|        |        | payments.          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | R      | Treasury receives  |                       |      |
| 3.5.2  | eceive | the check payment. |                       |      |
|        | Check  |                    |                       |      |
|        | P      |                    |                       |      |
|        | ayment |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Return | Payments processed | Financial             |      |
| 3.5.3  | ACH    | through the        | Institutions,         |      |
|        | P      | Government         | agencies, and the     |      |
|        | ayment | Automated Clearing | vendor/payee must     |      |
|        | to     | House (ACH), which | follow applicable 31  |      |
|        | Tr     | include CTX, CCD,  | CFR Part 210, Federal |      |
|        | easury | CCD+ and Fedwire,  | Participation in ACH  |      |
|        |        | are returned when  | guidance.             |      |
|        |        | payments cannot be |                       |      |
|        |        | recorded to a      |                       |      |
|        |        | valid account.     |                       |      |
|        |        |                    |                       |      |
|        |        | ACH payments may   |                       |      |
|        |        | be withheld by     |                       |      |
|        |        | Treasury from      |                       |      |
|        |        | submission to the  |                       |      |
|        |        | applicable         |                       |      |
|        |        | Financial          |                       |      |
|        |        | Institution at the |                       |      |
|        |        | request of the     |                       |      |
|        |        | agency authorizing |                       |      |
|        |        | the payments.      |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Re     | Treasury receives  |                       |      |
| 3.5.4  | turned | the returned ACH   |                       |      |
|        | ACH    | Payment.           |                       |      |
|        | P      |                    |                       |      |
|        | ayment |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Cancel | ACH and Check      |                       | PM   |
| 3.5.5  | lation | Payments are       |                       | D-55 |
|        | of     | immediately        |                       |      |
|        | P      | canceled upon      |                       |      |
|        | ayment | receipt by         |                       |      |
|        |        | Treasury.          |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Record | Payment            |                       |      |
| 3.5.6  | Cancel | cancellation and   |                       |      |
|        | lation | the return of      |                       |      |
|        | and    | funds are recorded |                       |      |
|        | Return | by Treasury to the |                       |      |
|        | of     | agency's account.  |                       |      |
|        | Funds  |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Agency | Electronic         | Agencies shall        |      |
| 3.5.7  | Re     | confirmation is    | institute and follow  |      |
|        | ceives | made available to  | procedures for        |      |
|        | Notifi | the agency from    | confirming payment    |      |
|        | cation | Treasury           | cancellations and     |      |
|        | of     | acknowledging      | return of funds.      |      |
|        | Cancel | payment            |                       |      |
|        | lation | cancellation and   |                       |      |
|        | and    | return of funds.   |                       |      |
|        | Return |                    |                       |      |
|        | of     |                    |                       |      |
|        | Funds  |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Agency | The agency cancels |                       |      |
| 3.5.8  | C      | the payment in the |                       |      |
|        | ancels | Core Financial     |                       |      |
|        | P      | System.            |                       |      |
|        | ayment |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Agency | A transaction is   | The entries are       | PM   |
| 3.5.9  | R      | recorded to the    | recorded to the       | D-55 |
|        | ecords | General Ledger and | General Ledger using  |      |
|        |        | payment request    | the USSGL Account     |      |
|        | Re     | subsidiary ledger  | Transaction Listing   |      |
|        | turned | to reflect the     | provided in the TFM.  |      |
|        | Funds  | applicable funds   | The applicable entry  |      |
|        | to     | returned by        | is recorded based on  |      |
|        | G      | Treasury.          | the entry originally  |      |
|        | eneral |                    | made to record the    |      |
|        | Ledger |                    | payment balance.      |      |
|        | and    |                    |                       |      |
|        | P      |                    |                       |      |
|        | ayment |                    |                       |      |
|        | R      |                    |                       |      |
|        | equest |                    |                       |      |
|        | Subs   |                    |                       |      |
|        | idiary |                    |                       |      |
|        | Ledger |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | R      | Finance will       | Determinations must   |      |
| 3.5.10 | eissue | determine if the   | be made within        |      |
|        | Pa     | payment can be     | guidelines and        |      |
|        | yment? | reissued.          | requirements of       |      |
|        |        |                    | applicable laws and   |      |
|        |        |                    | regulations,          |      |
|        |        |                    | including the Prompt  |      |
|        |        |                    | Pay Act and FAR.      |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Select | If the payment can |                       |      |
| 3.5.11 | Line   | be reissued,       |                       |      |
|        | Item   | specific line      |                       |      |
|        | for    | items to be paid   |                       |      |
|        | Imm    | are identified.    |                       |      |
|        | ediate |                    |                       |      |
|        | P      |                    |                       |      |
|        | ayment |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Put    | If the payment     | Putting a payment     |      |
| 3.5.12 | P      | cannot be          | request on hold must  |      |
|        | ayment | reissued, the      | be done in accordance |      |
|        | R      | payment request is | with applicable laws  |      |
|        | equest | put on hold.       | and regulations,      |      |
|        | on     |                    | rules, and agency     |      |
|        | Hold   |                    | guidelines (e.g.,     |      |
|        |        |                    | FAR, agency policies  |      |
|        |        |                    | and procedures),      |      |
|        |        |                    | including the Prompt  |      |
|        |        |                    | Payment Act.          |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Route  | A message is       | The Core Financial    |      |
| 3.5.13 | M      | routed to the      | System should         |      |
|        | essage | Business Unit of   | automatically         |      |
|        | to     | the issue and the  | identify and route a  |      |
|        | Bu     | final disposition  | message to applicable |      |
|        | siness | of the payment is  | personnel of open     |      |
|        | Unit   | determined.        | issues related to     |      |
|        | to     |                    | payment requests.     |      |
|        | R      |                    |                       |      |
|        | esolve |                    | Applicable personnel  |      |
|        | Issue  |                    | must take appropriate |      |
|        |        |                    | actions within Prompt |      |
|        |        |                    | Payment Act           |      |
|        |        |                    | requirements.         |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | Issue  | The Business Unit  | The agency shall      |      |
| 3.5.14 | Res    | performs the       | comply with the       |      |
|        | olved? | necessary actions  | Prompt Payment Act,   |      |
|        |        | to resolve the     | SPS user guide, and   |      |
|        |        | payment issue and, | current TFM guidance. |      |
|        |        | as applicable,     |                       |      |
|        |        | provides the       |                       |      |
|        |        | information        |                       |      |
|        |        | required to        |                       |      |
|        |        | resubmit the       |                       |      |
|        |        | payment request.   |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | P      | If the issue is    |                       |      |
| 3.5.15 | ayment | not resolved, the  |                       |      |
|        | Is Not | payment is not     |                       |      |
|        | Pro    | processed.         |                       |      |
|        | cessed |                    |                       |      |
+--------+--------+--------------------+-----------------------+------+
| PM     | R      | If the issue is    | The agency must       | PM   |
| 3.5.16 | elease | resolved, the hold | calculate the due     | D-01 |
|        | Hold   | on the payment     | date of payee         |      |
|        | on     | request is         | payments in           |      |
|        | P      | released.          | accordance with 5 CFR |      |
|        | ayment |                    | 1315 (OMB Circular    |      |
|        | R      |                    | A-125, Prompt         |      |
|        | equest |                    | Payment) key factors  |      |
|        |        |                    | (e.g., commodity      |      |
|        |        |                    | type, contract terms, |      |
|        |        |                    | invoice receipt       |      |
|        |        |                    | date).                |      |
+--------+--------+--------------------+-----------------------+------+

## **Data Objects and Data Elements**

### []{.mark} {#section-6 .unnumbered}

### **[THIS SECTION IS CURRENTLY UNDER DEVELOPMENT WITH TREASURY FMS]{.mark}** {#this-section-is-currently-under-development-with-treasury-fms .unnumbered}

**This page intentionally left blank.**

# **Receivables Management Processes**

## **Receivables Management Processes**

This chapter provides best practice business processes for administering
and managing receivables due from the public, excluding reimbursable
activity.

The benefits of effective Receivables Management include:

-   Improved revenue recognition;

```{=html}
<!-- -->
```
-   Improved cash flow;

-   Reduced loss due to bad debts; and

-   Reduced administrative cost for the revenue life cycle.

The Receivables Management process flowcharts and corresponding step
descriptions and business rules were developed in accordance with
Treasury\'s *Managing Federal Receivables* guidance. Other applicable
guidance for Receivables Management includes the Treasury Financial
Manual (TFM), Core Financial System Requirements (CFSR), the Debt
Collection Improvement Act of 1996 (DCIA), Office of Management and
Budget (OMB) Circular A-129, applicable Internal Revenue Service (IRS)
regulations, and the Federal Claims Collection Standards. In most
instances, where specific rules apply to a process step, the applicable
guidance is referenced.

The Receivables Management processes detailed in this chapter are:

-   RM 4.1 -- Establish Accounts Receivable Due From the Public. This
    section provides the steps agencies should follow in order to create
    or edit customer information within the Core Financial System. This
    section also addresses proper internal controls, including
    separation of duties and appropriate levels of review and approval,
    for the establishment of accounts receivable.

-   RM 4.2 -- Analyze Accounts Receivable. This section provides the
    process of analyzing accounts receivable for the purpose of
    determining age, status, and collection probability by specific
    account in order to facilitate effective management of the account.

-   RM 4.3 -- Billing. This section provides the process to generate a
    bill. Bills are created based on agency-specific business rules and
    are generated automatically based on established billing frequency.

-   RM 4.4 -- Collection of Receipts. This section provides the process
    for receiving and controlling monies collected on associated debts,
    and recording in the general ledger.

-   RM 4.5 -- Application of Receipts. This section provides the process
    for the application of monies collected.

-   RM 4.6 -- Delinquent Debt Processes.

-   RM 4.6.1 -- Dunning. This section provides the process of
    communicating with customers to enhance to collection of delinquent
    accounts receivable. The purpose of this process is to inform
    customers of their responsibilities to the agency as well as protect
    the agency's rights to that debt. The dunning process also serves to
    inform the customer of the consequences for noncompliance with the
    payment terms and/or revisions to those terms in the form of
    interest, administrative costs, and penalties, where applicable.

-   RM 4.6.2 -- Delinquent Debt Collection. This section provides debt
    collection tools available to assist agencies to collect debts for
    those customer/debtor accounts that have become delinquent.
    Delinquent debt collection is the process through which agencies
    restore the delinquent debts to current status or, if unsuccessful,
    maximize collection on the agency\'s accounts.

-   RM 4.7 -- Allowance for Loss on Accounts Receivable. This section
    provides the process an agency uses to determine and record an
    allowance for loss on accounts receivable. The allowance calculation
    is used for financial statement presentation purposes and to provide
    information for internal management decisions on agency-specific
    debt collection policies and procedures.

-   RM 4.8 -- Write-off of Accounts Receivable. This section provides
    the process to determine whether an account should be written off,
    perform the write-off, and determine subsequent action. Subsequent
    action may include active or passive collection action on the debt,
    close-out the debt (and obtain FMS or Department of Justice approval
    for close out where applicable), report cancellation of debt to the
    IRS, and notify the customer/debtor of cancellation.

-   RM 4.9 -- Issue Credit Memo. This section provides the process to
    determine appropriate action in the event of overpayments, returns,
    or adjustments to customer accounts. Note: agencies may apply excess
    amounts received to open receivables or offset the next scheduled
    receivable.

-   RM 4.10 -- Return of a Negotiable Instrument. This section provides
    the process to determine appropriate action in the event a
    negotiable instrument is returned uncollected to an agency. Examples
    of returned negotiable instruments are insufficient funds, closed
    customer/debtor accounts, stop payment, and disputed credit or debit
    charges.

-   RM 4.11 -- Waiver of Interest, Administrative Costs, and Penalties.
    This section provides the process to waive interest, administrative
    costs, and penalties. Procedures to identify delinquent customer
    accounts and the criteria to determine waivers are discussed.

-   RM 4.12 -- Installment Plans. This section provides the process for
    offering installment plans when a debtor's inability to pay claims
    is substantiated. This section also provides for the transmission of
    an agreement to the customer/debtor, agency determination of
    customer acceptance or non-acceptance of an installment plan, and
    the appropriate general ledger entries.

The steps within the above processes are depicted in corresponding
flowcharts. Following each flowchart are descriptions of the processes
and steps and related business rules.

Included in the scope, from the **[billing perspective]{.underline}**,
of this chapter are the following:

-   Employee Overpayments

-   Vendor Overpayments

-   Relocation

-   Judgments (Accident Claims)

-   Fines

-   Penalties

-   Employee Training Reimbursement

-   Insufficient Funds

-   Non-Reimbursable Sale of Goods or Services (User Fees)

-   Sharing Agreements

-   Employee Travel (Advances) (to be used only on an exception basis)

Included in the scope, from the **[collections
perspective]{.underline}**, of this chapter are the following:

-   Billed Receivables

-   Concession Rents

-   Unbilled Overpayments

-   Credit Management/Debt Collection Cycle

-   Interest

-   Penalties

-   Asset Sales

-   Administrative Wage Garnishment

-   Sale of Goods and Services

-   Application Fees

-   Industrial Funding Fees

-   Freedom of Information Act

-   Miscellaneous Receipts

-   User Fees

-   Auction Receipts

-   Rebates

-   Sharing Agreements

Excluded from the scope of this chapter are the following:

-   Reimbursable Activity

-   Transactions in Foreign Currency

-   Non-Monetary Exchange Transactions

-   Investments

-   Leases

-   Program Overpayments Not Processed in the Core Financial System

-   Trust Fund Programs

-   Intra-Governmental Payment and Collection (IPAC) Transactions

-   Credit Reform (Including Direct and Guaranteed Loans)

-   Grants

-   Gifts

-   Treasury and Department Of Justice (DOJ) Cross Servicing

-   Benefit Overpayments

-   Tax Receivables and Duties

-   Donations

-   Internal Offsets

-   Administrative Offsets with Accounts Payable

The following flowchart depicts the sequence and inter-relationship of
the Receivables Management Processes:

![](media/image27.wmf){width="6.990277777777778in"
height="5.256944444444445in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

## 

## **Establish Accounts Receivable Due From The Public**

This section provides the process for establishing accounts receivables
due from the public. The steps in the flowchart include the submission
of accounts receivable requests; the creation, review, and validation of
customer information; and the establishment of a receivable in the Core
Financial System.

## RM 4.1 -- Establish Accounts Receivable Due From the Public Flowchart  {#rm-4.1-establish-accounts-receivable-due-from-the-public-flowchart .unnumbered}

![](media/image28.wmf){width="6.990277777777778in"
height="5.4222222222222225in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Establish Accounts Receivable process steps
are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Business | A triggering    | The request may be    |       |
| 4.1.1 | Unit or  | event (e.g.,    | entered or interfaced |       |
|       | Finance  | sale of goods   | to the Core Financial |       |
|       | Prepares | or services,    | System.               |       |
|       | Accounts | change in       |                       |       |
|       | Re       | status of an    | An image of the       |       |
|       | ceivable | advance) occurs | documentation         |       |
|       | Request  | creating the    | supporting the        |       |
|       |          | need for a      | receivable request    |       |
|       |          | receivable to   | shall be maintained   |       |
|       |          | be established  | in electronic or hard |       |
|       |          | in the Core     | copy form, as         |       |
|       |          | Financial       | applicable.           |       |
|       |          | System. The     |                       |       |
|       |          | request could   |                       |       |
|       |          | represent the   |                       |       |
|       |          | need to         |                       |       |
|       |          | establish a     |                       |       |
|       |          | single          |                       |       |
|       |          | receivable or   |                       |       |
|       |          | multiple        |                       |       |
|       |          | receivables.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Accounts | The accounts    | The Business Unit or  |       |
| 4.1.2 | Re       | receivable      | Finance provides the  |       |
|       | ceivable | request         | following data        |       |
|       | Request  | contains the    | elements to establish |       |
|       |          | necessary       | a receivable, as      |       |
|       |          | information to  | applicable:           |       |
|       |          | establish a     |                       |       |
|       |          | receivable.     | -   Receivable Type   |       |
|       |          | This            |     (sale of goods or |       |
|       |          | information     |     services,         |       |
|       |          | will be         |     overpayments,     |       |
|       |          | maintained      |     unused advances   |       |
|       |          | throughout the  |     subject to        |       |
|       |          | life of a       |     refund, fees, and |       |
|       |          | receivable to   |     fines);           |       |
|       |          | include         |                       |       |
|       |          | verifying,      | -   Dates of          |       |
|       |          | reviewing and   |     Performance;      |       |
|       |          | capturing       |                       |       |
|       |          | vendor or       | -   Customer          |       |
|       |          | customer        |     Information;      |       |
|       |          | information,    |                       |       |
|       |          | performing      | -   Terms;            |       |
|       |          | calculations,   |                       |       |
|       |          | and generating  | -   Item Type to be   |       |
|       |          | bills, as       |     Billed;           |       |
|       |          | applicable.     |                       |       |
|       |          |                 | -   Amounts to be     |       |
|       |          |                 |     Billed;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   Accounting        |       |
|       |          |                 |     classification    |       |
|       |          |                 |     elements;         |       |
|       |          |                 |                       |       |
|       |          |                 | -   Date Receivable   |       |
|       |          |                 |     Established;      |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer P.O.     |       |
|       |          |                 |     Number;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   Description of    |       |
|       |          |                 |     Goods and/or      |       |
|       |          |                 |     Services; and     |       |
|       |          |                 |                       |       |
|       |          |                 | -   Unit of measure   |       |
|       |          |                 |     and quantity.     |       |
|       |          |                 |                       |       |
|       |          |                 | The Business Unit or  |       |
|       |          |                 | Finance, depending on |       |
|       |          |                 | the origination point |       |
|       |          |                 | for the request,      |       |
|       |          |                 | maintains             |       |
|       |          |                 | documentation to      |       |
|       |          |                 | support the billing   |       |
|       |          |                 | request.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Is       | Review accounts | Verify that the       |       |
| 4.1.3 | Accounts | receivable      | minimum required data |       |
|       | Re       | request         | elements are provided |       |
|       | ceivable | information for | (see RM step 4.1.2).  |       |
|       | Request  | completeness.   |                       |       |
|       | Inf      |                 |                       |       |
|       | ormation |                 |                       |       |
|       | C        |                 |                       |       |
|       | omplete? |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | Return request  | Missing information   |       |
| 4.1.4 | Re       | for accounts    | is identified, and    |       |
|       | ceivable | receivable to   | upon review it is     |       |
|       | Request  | applicable      | noted that the        |       |
|       |          | functional area | request is            |       |
|       |          | for additional  | incomplete.           |       |
|       |          | information/    |                       |       |
|       |          | authorization.  | The agency should     |       |
|       |          |                 | track the status of   |       |
|       |          |                 | rejected receivable   |       |
|       |          |                 | requests.             |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Advise   | Advisement of   | Advisement of the     |       |
| 4.1.5 | the      | the rejected    | rejected accounts     |       |
|       | App      | accounts        | receivable request is |       |
|       | ropriate | receivable      | sent to the           |       |
|       | Official | request is      | appropriate official. |       |
|       | of the   | generated and   |                       |       |
|       | Rejected | routed to       | The originator will   |       |
|       | Accounts | applicable      | receive notification  |       |
|       | Re       | responsible     | specifying the        |       |
|       | ceivable | parties.        | missing information   |       |
|       | Request  |                 | or actions required   |       |
|       |          |                 | to prepare a complete |       |
|       |          |                 | and valid request.    |       |
|       |          |                 | (See business rule    |       |
|       |          |                 | for step 4.1.2 for    |       |
|       |          |                 | the list of data      |       |
|       |          |                 | elements to establish |       |
|       |          |                 | a receivable. Please  |       |
|       |          |                 | note the data         |       |
|       |          |                 | elements in step      |       |
|       |          |                 | 4.1.2 are only        |       |
|       |          |                 | required, as          |       |
|       |          |                 | applicable.)          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolve  | The responsible |                       |       |
| 4.1.6 | Issue    | Business        |                       |       |
|       |          | Unit/Finance    |                       |       |
|       |          | corrects the    |                       |       |
|       |          | document by     |                       |       |
|       |          | providing valid |                       |       |
|       |          | data elements   |                       |       |
|       |          | needed to       |                       |       |
|       |          | complete the    |                       |       |
|       |          | receivable      |                       |       |
|       |          | request.        |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | The accounts    | A customer record     |       |
| 4.1.7 | Exis     | receivable      | must be maintained    |       |
|       | ts/Valid | request is      | for each entity that  |       |
|       | in       | reviewed to     | owes the agency a     |       |
|       | Customer | determine       | debt. (e.g.,          |       |
|       | File?    | whether a       | contractors,          |       |
|       |          | complete        | employees).           |       |
|       |          | customer record |                       |       |
|       |          | exists in the   | Finance personnel     |       |
|       |          | Customer File   | must perform          |       |
|       |          | and that the    | procedures to ensure  |       |
|       |          | data matches    | that new accounts     |       |
|       |          | between the     | receivable requests   |       |
|       |          | accounts        | for debarred          |       |
|       |          | receivable      | customers are         |       |
|       |          | request and the | rejected and not      |       |
|       |          | customer        | entered into the Core |       |
|       |          | record.         | Financial System.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Creat    | If a customer   | Agencies must         | R     |
| 4.1.8 | e/Update | record does not | implement procedures  | MA-01 |
|       | Customer | exist, the      | for proper            |       |
|       | Record   | record is       | segregation of duties | R     |
|       |          | created.        | between the person    | MA-02 |
|       |          |                 | creating a customer   |       |
|       |          | Data on the     | record and the person | R     |
|       |          | receivable      | creating a receivable | MA-03 |
|       |          | request is      | record.               |       |
|       |          | compared to     |                       | R     |
|       |          | data in the     | The customer          | MA-04 |
|       |          | agency customer | information           |       |
|       |          | database. If    | maintenance process   | R     |
|       |          | information     | involves the          | MA-05 |
|       |          | does not match, | maintenance of        |       |
|       |          | correct the     | customer information  | R     |
|       |          | customer        | (name, address, etc.) | MA-06 |
|       |          | information, as | and identification of |       |
|       |          | appropriate.    | the type of customer  | R     |
|       |          |                 | from which collection | MA-07 |
|       |          |                 | is due, as well as    |       |
|       |          |                 | other critical        |       |
|       |          |                 | information related   |       |
|       |          |                 | to the customer that  |       |
|       |          |                 | is needed for         |       |
|       |          |                 | receivable            |       |
|       |          |                 | processing,           |       |
|       |          |                 | maintenance, and      |       |
|       |          |                 | collection. The       |       |
|       |          |                 | process ensures that  |       |
|       |          |                 | customer TINs are     |       |
|       |          |                 | captured in order to  |       |
|       |          |                 | report overdue        |       |
|       |          |                 | receivables for       |       |
|       |          |                 | potential offset and  |       |
|       |          |                 | to provide for IRS    |       |
|       |          |                 | Form 1099 reporting   |       |
|       |          |                 | of debts written off. |       |
|       |          |                 |                       |       |
|       |          |                 | To support the        |       |
|       |          |                 | customer information  |       |
|       |          |                 | maintenance process,  |       |
|       |          |                 | the Core Financial    |       |
|       |          |                 | System must provide   |       |
|       |          |                 | automated             |       |
|       |          |                 | functionality to      |       |
|       |          |                 | maintain customer     |       |
|       |          |                 | information to        |       |
|       |          |                 | support receivable    |       |
|       |          |                 | management processes  |       |
|       |          |                 | as referenced in      |       |
|       |          |                 | RMA-01 (not all of    |       |
|       |          |                 | the information from  |       |
|       |          |                 | RMA-01 is listed as   |       |
|       |          |                 | some are specific to  |       |
|       |          |                 | Federal receivables.  |       |
|       |          |                 | For a complete list   |       |
|       |          |                 | of the elements, see  |       |
|       |          |                 | CFSR RMA-01)          |       |
|       |          |                 | including the         |       |
|       |          |                 | following:            |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer name;    |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer ID       |       |
|       |          |                 |     number;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer type     |       |
|       |          |                 |     (commercial, or   |       |
|       |          |                 |     consumer);        |       |
|       |          |                 |                       |       |
|       |          |                 | -   Billing method    |       |
|       |          |                 |     (1081, paper      |       |
|       |          |                 |     bill, or other);  |       |
|       |          |                 |                       |       |
|       |          |                 | -   TIN;              |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer address; |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer contact  |       |
|       |          |                 |     name;             |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer contact  |       |
|       |          |                 |     telephone number; |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer contact  |       |
|       |          |                 |     e-mail address;   |       |
|       |          |                 |                       |       |
|       |          |                 | -   IRS 1099-C        |       |
|       |          |                 |     indicator;        |       |
|       |          |                 |                       |       |
|       |          |                 | -   Third-party payer |       |
|       |          |                 |     name;             |       |
|       |          |                 |                       |       |
|       |          |                 | -   Third-party payer |       |
|       |          |                 |     address;          |       |
|       |          |                 |                       |       |
|       |          |                 | -   Third-party payer |       |
|       |          |                 |     contact name;     |       |
|       |          |                 |                       |       |
|       |          |                 | -   Third-party payer |       |
|       |          |                 |     contact telephone |       |
|       |          |                 |     number;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   Comment field;    |       |
|       |          |                 |                       |       |
|       |          |                 | -   DUNS+4 number;    |       |
|       |          |                 |     and               |       |
|       |          |                 |                       |       |
|       |          |                 | -   Active/Inactive   |       |
|       |          |                 |     indicator.        |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies must perform |       |
|       |          |                 | continuous periodic   |       |
|       |          |                 | review to determine   |       |
|       |          |                 | if customer record    |       |
|       |          |                 | information is        |       |
|       |          |                 | accurate, valid, and  |       |
|       |          |                 | complete. All         |       |
|       |          |                 | customer records must |       |
|       |          |                 | contain the data      |       |
|       |          |                 | elements listed in    |       |
|       |          |                 | the referenced CFSR.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Capture  | Capture         | The Core Financial    | R     |
| 4.1.9 | Re       | information     | System validates that | MB-03 |
|       | ceivable | required to     | data meets required   |       |
|       | Inf      | establish a     | formats and other     | R     |
|       | ormation | receivable.     | applicable tests of   | MB-04 |
|       |          | (See RM 4.1.2   | validity.             |       |
|       |          | business rule   |                       |       |
|       |          | for list of     | Information must be   |       |
|       |          | data element to | captured to detail    |       |
|       |          | establish a     | multiple              |       |
|       |          | receivable).    | customers/debtors who |       |
|       |          |                 | are liable for an     |       |
|       |          | The captured    | agency accounts       |       |
|       |          | data populates  | receivable.           |       |
|       |          | the detailed    |                       |       |
|       |          | subsidiary      | Processes and         |       |
|       |          | record and is   | procedures for        |       |
|       |          | used to         | establishing a        |       |
|       |          | populate the    | receivable include    |       |
|       |          | general ledger  | verifying, reviewing  |       |
|       |          | accounts        | and capturing         |       |
|       |          | receivable      | receivable and        |       |
|       |          | record. Note:   | customer information, |       |
|       |          | See RM 4.1.12   | and performing        |       |
|       |          | for the         | calculations for      |       |
|       |          | recording of    | receivable balances   |       |
|       |          | the receivable  | at the line item      |       |
|       |          | to the general  | level as well as in   |       |
|       |          | ledger.         | total.                |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Review   | The established | The receivable is     | T     |
| 4     | Re       | accounts        | reviewed to ensure    | LE-03 |
| .1.10 | ceivable | receivable is   | the data entered into |       |
|       | Inf      | reviewed and    | the Core Financial    |       |
|       | ormation | validated by    | System matches the    |       |
|       |          | the designated  | accounts receivable   |       |
|       |          | individual(s).  | supporting            |       |
|       |          |                 | documentation.        |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies must         |       |
|       |          |                 | establish and         |       |
|       |          |                 | implement policies    |       |
|       |          |                 | and procedures        |       |
|       |          |                 | incorporating sound   |       |
|       |          |                 | internal controls to  |       |
|       |          |                 | allow for appropriate |       |
|       |          |                 | levels of review      |       |
|       |          |                 | prior to the          |       |
|       |          |                 | establishment of a    |       |
|       |          |                 | receivable. Note: Not |       |
|       |          |                 | all receivables are   |       |
|       |          |                 | required to be        |       |
|       |          |                 | reviewed. Agency      |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures (including |       |
|       |          |                 | thresholds) should    |       |
|       |          |                 | govern the need for   |       |
|       |          |                 | the review of a       |       |
|       |          |                 | receivable.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Re       | A receivable    |                       |       |
| 4     | ceivable | record is       |                       |       |
| .1.11 | A        | approved prior  |                       |       |
|       | pproved? | to recording in |                       |       |
|       |          | the general     |                       |       |
|       |          | ledger.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Re       | Record general  | An agency must record | R     |
| 4     | ceivable | ledger entries  | entries for           | MB-01 |
| .1.12 | is       | to reflect that | receivables that have |       |
|       | Recorded | all receivable  | yet to be billed.     | R     |
|       | in       | data has been   |                       | MB-03 |
|       | General  | processed along | Agency policies and   |       |
|       | Ledger   | with other      | procedures should     | R     |
|       |          | pertinent       | determine the         | MB-04 |
|       |          | financial       | frequency in which    |       |
|       |          | information     | actions are           | G     |
|       |          | needed to       | performed.            | LB-01 |
|       |          | update the      |                       |       |
|       |          | general ledger. | The entries are       | G     |
|       |          | Updating the    | recorded using the    | LC-01 |
|       |          | general ledger  | United States         |       |
|       |          | includes        | Standard General      | G     |
|       |          | recording the   | Ledger (USSGL)        | LC-02 |
|       |          | accounting      | Account Transaction   |       |
|       |          | event as debit  | Listing provided in   | G     |
|       |          | and credit      | the TFM. Examples     | LC-03 |
|       |          | entries to both | include, but are not  |       |
|       |          | proprietary and | limited to, the       | G     |
|       |          | budgetary       | following transaction | LC-04 |
|       |          | general ledger  | codes from the        |       |
|       |          | accounts.       | current TFM:          | G     |
|       |          |                 |                       | LC-05 |
|       |          |                 | TFM-C420: To record   |       |
|       |          |                 | accrued revenue from  | G     |
|       |          |                 | non-Federal sources   | LC-06 |
|       |          |                 | other than for        |       |
|       |          |                 | reimbursable          | S     |
|       |          |                 | agreements,           | MB-02 |
|       |          |                 | non-revolving trust   |       |
|       |          |                 | funds, special funds, | S     |
|       |          |                 | and custodial         | MB-33 |
|       |          |                 | activity.             |       |
|       |          |                 |                       |       |
|       |          |                 | TFM-C422: To record   |       |
|       |          |                 | accrued revenue from  |       |
|       |          |                 | Federal or            |       |
|       |          |                 | non-Federal sources   |       |
|       |          |                 | for non-revolving     |       |
|       |          |                 | trust funds and       |       |
|       |          |                 | special funds.        |       |
|       |          |                 |                       |       |
|       |          |                 | TFM-C414: To record   |       |
|       |          |                 | refund receivables    |       |
|       |          |                 | from nonfederal       |       |
|       |          |                 | sources for assets or |       |
|       |          |                 | expenses that do not  |       |
|       |          |                 | create budgetary      |       |
|       |          |                 | resources until       |       |
|       |          |                 | collected.            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM-C644: To record a |       |
|       |          |                 | receivable from a     |       |
|       |          |                 | non-Federal entity    |       |
|       |          |                 | for the sale or       |       |
|       |          |                 | disposition of assets |       |
|       |          |                 | other than personal   |       |
|       |          |                 | properties and        |       |
|       |          |                 | investments.          |       |
+-------+----------+-----------------+-----------------------+-------+

## **Analyze Accounts Receivable** 

The section provides the business process flow to analyze a receivable
due from the public, determine its status, and decide on applicable
actions to be taken to resolve an issue and/or adjust a balance. After
the receivable is created, the analysis process commences and continues.
The process for performing analysis of outstanding receivable balances
includes receivables represented by individual subsidiary level
accounts, general ledger accounts (primarily the account 1300 series),
and transaction records used to update the accounts, as needed. The
analysis process assumes that the accounts and record maintenance is
current. Analysis triggers a range of business events aimed at
furthering collection, fair-valuation and/or resolution of outstanding
balances, in accordance with Federal management guidance and compliance
requirements. Although the process assumes that accounts and records are
in a current status, agencies may consider, when appropriate, applicable
delinquent debt collection tools illustrated in RM 4.6.1 Dunning
(installment plans or compromise agreements) and/or RM 4.6.2 Delinquent
Debt Collection (non-centralized administrative offset, wage
garnishment, or referral to applicable legal function), to facilitate
collection on the debt, within the first 30 days of the debt life cycle.

The following flowchart provides key steps in the processes used by
agencies to maintain and analyze accounts receivable; the flowchart
represents an iterative process. External sources and other processes
such as collections, hearing requests and bankruptcies could affect the
status, action taken, or disposition of the receivable and consequently
affect the Dunning and Write-Off processes. Many of the business rules
included below are from Treasury's *Managing Federal Receivables*
guidance, which can be found at
(http://www.fms.treas.gov/debt/Guidance_MFR.html).

## RM 4.2 -- Analyze Accounts Receivable Flowchart {#rm-4.2-analyze-accounts-receivable-flowchart .unnumbered}

![](media/image29.wmf){width="6.990277777777778in"
height="5.339583333333334in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Analyze Accounts Receivable process steps are
described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Account  | Entities        | Changes to the status |       |
| 4.2.1 | Status   | external to the | of outstanding        |       |
|       | Change   | agency may      | receivables received  |       |
|       | from     | send/trans      | from external sources |       |
|       | External | mit/communicate | must be in accordance |       |
|       | Source   | changes in      | with Treasury debt    |       |
|       |          | status          | management guidance   |       |
|       |          | applicable to   | and agency policies   |       |
|       |          | agency accounts | and procedures.       |       |
|       |          | receivable.     | Agency Financial      |       |
|       |          |                 | Management personnel  |       |
|       |          | Examples where  | are responsible for   |       |
|       |          | external        | reviewing proposed    |       |
|       |          | sources         | status changes to     |       |
|       |          | initiate the    | customer accounts,    |       |
|       |          | process are     | executing such        |       |
|       |          | bankruptcy and  | changes, and          |       |
|       |          | a novation due  | resolving conflicts   |       |
|       |          | to sale of a    | where applicable in   |       |
|       |          | company.        | accordance with       |       |
|       |          |                 | agency policies and   |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Update   | Accounts        | Accounts receivable   | R     |
| 4.2.2 | Accounts | receivable      | records, balances,    | MB-02 |
|       | Re       | balances and    | and statuses are      |       |
|       | ceivable | status are      | updated based on      | R     |
|       | Balance  | updated based   | various events.       | MB-18 |
|       | s/Status | on inputs       |                       |       |
|       |          | originating     | Receivable            | R     |
|       |          | either          | adjustments may       | MD-01 |
|       |          | internally or   | include:              |       |
|       |          | externally to   |                       | R     |
|       |          | the agency.     | -   Application of    | MD-02 |
|       |          |                 |     Collections; and  |       |
|       |          |                 |                       | R     |
|       |          |                 | -   Adjustments.      | MD-06 |
|       |          |                 |                       |       |
|       |          |                 | Statuses change due   |       |
|       |          |                 | to:                   |       |
|       |          |                 |                       |       |
|       |          |                 | -   Billing (from     |       |
|       |          |                 |     unbilled to       |       |
|       |          |                 |     billed);          |       |
|       |          |                 |                       |       |
|       |          |                 | -   The passage of    |       |
|       |          |                 |     time (from        |       |
|       |          |                 |     current to        |       |
|       |          |                 |     delinquent); and  |       |
|       |          |                 |                       |       |
|       |          |                 | -   Events that       |       |
|       |          |                 |     change a          |       |
|       |          |                 |     delinquency       |       |
|       |          |                 |     status (e.g.,     |       |
|       |          |                 |     bankruptcy,       |       |
|       |          |                 |     referral, etc).   |       |
|       |          |                 |                       |       |
|       |          |                 | Capture applicable    |       |
|       |          |                 | transaction           |       |
|       |          |                 | information in the    |       |
|       |          |                 | subsidiary ledger and |       |
|       |          |                 | record applicable     |       |
|       |          |                 | transactions to the   |       |
|       |          |                 | general ledger to     |       |
|       |          |                 | reflect the change in |       |
|       |          |                 | accounts receivable   |       |
|       |          |                 | balances/status.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Updated  | Updated         |                       |       |
| 4.2.3 | Accounts | accounts        |                       |       |
|       | Re       | receivable      |                       |       |
|       | ceivable | balances/status |                       |       |
|       | Balance  | result from the |                       |       |
|       | s/Status | process of      |                       |       |
|       |          | applying        |                       |       |
|       |          | updates.        |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Account  | Each account    | Best practice is to   | R     |
| 4.2.4 | Current? | must be         | review the status of  | MC-08 |
|       |          | evaluated based | accounts receivable   |       |
|       |          | on status       | balances on a         | R     |
|       |          | and/or aging as | periodic basis. The   | MC-09 |
|       |          | well as agency  | review may include    |       |
|       |          | debt collection | accounts receivable   | R     |
|       |          | procedures.     | amounts, collection   | MC-20 |
|       |          |                 | percentages, accounts |       |
|       |          | Analysis and    | receivable days       | R     |
|       |          | evaluation of   | outstanding and a     | MD-11 |
|       |          | the status of   | comparison to         |       |
|       |          | the accounts    | internal agency or    |       |
|       |          | receivable is   | government wide       |       |
|       |          | to determine    | standards.            |       |
|       |          | outstanding     |                       |       |
|       |          | account balance | Identify delinquent   |       |
|       |          | as current and  | debts on accounts     |       |
|       |          | adequate as     | based on aging of     |       |
|       |          | well as,        | debts. Each account   |       |
|       |          | eligibility for | must be evaluated     |       |
|       |          | dunning and/or  | based on criteria     |       |
|       |          | reporting to    | from government-wide  |       |
|       |          | credit bureaus. | regulations as well   |       |
|       |          |                 | as agency debt        |       |
|       |          |                 | collection            |       |
|       |          |                 | regulations.          |       |
|       |          |                 |                       |       |
|       |          |                 | A debt becomes        |       |
|       |          |                 | delinquent when       |       |
|       |          |                 | payment is not made   |       |
|       |          |                 | by the due date or    |       |
|       |          |                 | the end of a          |       |
|       |          |                 | predetermined "grace  |       |
|       |          |                 | period."              |       |
|       |          |                 |                       |       |
|       |          |                 | Each delinquent       |       |
|       |          |                 | account is evaluated  |       |
|       |          |                 | for eligibility for   |       |
|       |          |                 | dunning.              |       |
|       |          |                 |                       |       |
|       |          |                 | When a debtor files   |       |
|       |          |                 | for bankruptcy        |       |
|       |          |                 | protection, an agency |       |
|       |          |                 | may prohibit further  |       |
|       |          |                 | collection action     |       |
|       |          |                 | while the bankruptcy  |       |
|       |          |                 | is pending. Agency    |       |
|       |          |                 | counsel should be     |       |
|       |          |                 | consulted for         |       |
|       |          |                 | specific advice in    |       |
|       |          |                 | order to determine    |       |
|       |          |                 | what further steps    |       |
|       |          |                 | need to be taken to   |       |
|       |          |                 | protect the agency's  |       |
|       |          |                 | position and be in    |       |
|       |          |                 | compliance with the   |       |
|       |          |                 | law. In most cases,   |       |
|       |          |                 | agencies must await   |       |
|       |          |                 | legal advice based on |       |
|       |          |                 | bankruptcy litigation |       |
|       |          |                 | results to determine  |       |
|       |          |                 | subsequent action.    |       |
|       |          |                 |                       |       |
|       |          |                 | DCIA requires Federal |       |
|       |          |                 | agencies to report to |       |
|       |          |                 | credit bureaus        |       |
|       |          |                 | information on all    |       |
|       |          |                 | delinquent consumer   |       |
|       |          |                 | debts. Treasury can   |       |
|       |          |                 | report the delinquent |       |
|       |          |                 | debts to credit       |       |
|       |          |                 | bureaus, if agreed    |       |
|       |          |                 | upon with the         |       |
|       |          |                 | agencies. The         |       |
|       |          |                 | agencies may also     |       |
|       |          |                 | agree to continue     |       |
|       |          |                 | reporting to the      |       |
|       |          |                 | credit bureaus        |       |
|       |          |                 | themselves after      |       |
|       |          |                 | referring their       |       |
|       |          |                 | delinquent debts to   |       |
|       |          |                 | FMS. An agency that   |       |
|       |          |                 | elects to use         |       |
|       |          |                 | expedited referral to |       |
|       |          |                 | cross-servicing,      |       |
|       |          |                 | (i.e., referral of    |       |
|       |          |                 | debts within 60 days  |       |
|       |          |                 | of the date of        |       |
|       |          |                 | delinquency), does    |       |
|       |          |                 | not need to report    |       |
|       |          |                 | its debts to credit   |       |
|       |          |                 | bureaus because FMS   |       |
|       |          |                 | will report the debts |       |
|       |          |                 | on the agency\'s      |       |
|       |          |                 | behalf, if agreed to  |       |
|       |          |                 | by the agency.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Pr       | Analysis and    |                       | R     |
| 4.2.5 | eviously | evaluation of   |                       | MC-20 |
|       | Billed?  | the status of   |                       |       |
|       |          | the accounts    |                       |       |
|       |          | receivable is   |                       |       |
|       |          | to determine    |                       |       |
|       |          | the need for    |                       |       |
|       |          | scheduling the  |                       |       |
|       |          | billing of      |                       |       |
|       |          | unbilled        |                       |       |
|       |          | receivables.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Execute  | Due process     | In the context of     |       |
| 4.2.6 | Minimum  | requirements    | Federal debt          |       |
|       | Due      | are performed   | collection, the       |       |
|       | Process  | for each        | constitutional right  |       |
|       | Requ     | customer        | of "due process"      |       |
|       | irements | account.        | requires an agency to |       |
|       |          |                 | provide debtors with  |       |
|       |          |                 | notice of, and the    |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute, a debt or    |       |
|       |          |                 | intended debt         |       |
|       |          |                 | collection action.    |       |
|       |          |                 | Notice must include   |       |
|       |          |                 | the amount and type   |       |
|       |          |                 | of debt owed, and the |       |
|       |          |                 | actions to be taken   |       |
|       |          |                 | by an agency to       |       |
|       |          |                 | collect the debt,     |       |
|       |          |                 | such as adding        |       |
|       |          |                 | interest and late     |       |
|       |          |                 | charges, offset or    |       |
|       |          |                 | garnishment, and      |       |
|       |          |                 | credit bureau         |       |
|       |          |                 | reporting.            |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should      |       |
|       |          |                 | provide a customer an |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute the debt or   |       |
|       |          |                 | advise the debtor of  |       |
|       |          |                 | the adverse           |       |
|       |          |                 | collection action to  |       |
|       |          |                 | be taken. At a        |       |
|       |          |                 | minimum, the customer |       |
|       |          |                 | should have the       |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | challenge (1) the     |       |
|       |          |                 | existence of all or   |       |
|       |          |                 | part of the debt,     |       |
|       |          |                 | and/or (2) whether    |       |
|       |          |                 | the agency has met    |       |
|       |          |                 | the statutory or      |       |
|       |          |                 | regulatory            |       |
|       |          |                 | prerequisites for     |       |
|       |          |                 | using the collection  |       |
|       |          |                 | action mentioned in   |       |
|       |          |                 | the notice.           |       |
|       |          |                 |                       |       |
|       |          |                 | The minimum "due      |       |
|       |          |                 | process" required is  |       |
|       |          |                 | generally established |       |
|       |          |                 | by the statutes that  |       |
|       |          |                 | authorize the use of  |       |
|       |          |                 | a specific debt       |       |
|       |          |                 | collection tool or by |       |
|       |          |                 | implementing          |       |
|       |          |                 | regulations.          |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance provides     |       |
|       |          |                 | more information on   |       |
|       |          |                 | the notices and       |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ad       | Based on review |                       |       |
| 4.2.7 | justment | of an accounts  |                       |       |
|       | to       | receivable, the |                       |       |
|       | Account  | agency          |                       |       |
|       | R        | determines      |                       |       |
|       | equired? | whether an      |                       |       |
|       |          | adjustment to   |                       |       |
|       |          | the             |                       |       |
|       |          | balance/status  |                       |       |
|       |          | of the account  |                       |       |
|       |          | is required.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Prepare  | As applicable,  | Proper segregation of |       |
| 4.2.8 | Ad       | the agency      | duties must be        |       |
|       | justment | prepares an     | followed when         |       |
|       | to       | adjustment to   | adjusting an accounts |       |
|       | Account  | the             | receivable balance.   |       |
|       |          | balance/status  |                       |       |
|       |          | of the accounts |                       |       |
|       |          | receivable.     |                       |       |
|       |          |                 |                       |       |
|       |          | Adjustments may |                       |       |
|       |          | be due to the   |                       |       |
|       |          | result of       |                       |       |
|       |          | review of an    |                       |       |
|       |          | account         |                       |       |
|       |          | subsequent to   |                       |       |
|       |          | dispute         |                       |       |
|       |          | resolution      |                       |       |
|       |          | and/or          |                       |       |
|       |          | identification  |                       |       |
|       |          | of erroneous    |                       |       |
|       |          | debts.          |                       |       |
+-------+----------+-----------------+-----------------------+-------+

##  **Billing**

This section provides the process to generate a bill. The billing
process represents the first action to collect amounts due from any
exchange of goods or services resulting in a debt due from the public
when payment is not collected at the time of service or at the point of
sale. Once credit has been extended, consistent billing and collection
procedures must be followed as outlined by agency specific procedures
and guidelines.

Bills are created based on agency-specific business rules and are
generated automatically or manually (on demand), as necessary, based on
established billing frequency. Included are steps to determine billing
requirements and generate and send a bill to a customer/debtor.

##  RM 4.3 -- Billing Flowchart {#rm-4.3-billing-flowchart .unnumbered}

![](media/image30.wmf){width="6.990277777777778in"
height="5.010416666666667in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Billing process steps are described as
follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | **Step   | Step            | Business Rules        | CFSR  |
| ID    | Name**   | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | D        | Determine the   | Based on the customer | R     |
| 4.3.1 | etermine | billing         | and receivable record | MA-01 |
|       | Billing  | requirements    | information,          |       |
|       | Requ     | using the       | determine the method  | R     |
|       | irements | customer        | (electronic or paper) | MB-04 |
|       |          | information and | and terms of billing  |       |
|       |          | receivable      | to be used.           |       |
|       |          | data.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | The amount to   | Before an agency      |       |
| 4.3.2 | etermine | be billed is    | bills, it will need   |       |
|       | Amount   | determined.     | to consider           |       |
|       | to be    |                 | discounts, shipping   |       |
|       | Billed   |                 | charges, and other    |       |
|       |          |                 | adjustments           |       |
|       |          |                 | applicable to the     |       |
|       |          |                 | transaction.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | Generate demand | Additional bill       | R     |
| 4.3.3 | Bill     | for payment     | information should    | MB-06 |
|       |          | that includes   | include account       |       |
|       |          | bill number,    | number, payment terms | R     |
|       |          | account number, | and conditions,       | MB-11 |
|       |          | debtor          | customer purchase     |       |
|       |          | information,    | order (PO) number,    | R     |
|       |          | amount owed,    | lock box information, | MB-12 |
|       |          | payment terms   | and description of    |       |
|       |          | and conditions  | goods and/or services | R     |
|       |          | (including the  | or other basis for    | MB-13 |
|       |          | remittance      | the debt.             |       |
|       |          | instructions)   |                       | R     |
|       |          | and payment due | The bill should       | MB-15 |
|       |          | date.           | include or reference  |       |
|       |          |                 | applicable standards  | R     |
|       |          |                 | upon which any        | MB-16 |
|       |          |                 | interest, penalties,  |       |
|       |          |                 | or administrative     | R     |
|       |          |                 | charges will be       | MB-17 |
|       |          |                 | based, rights under   |       |
|       |          |                 | Federal Claims        | R     |
|       |          |                 | Collection Standards, | MB-09 |
|       |          |                 | the date by which the |       |
|       |          |                 | debtor must make      | R     |
|       |          |                 | payment to avoid late | MB-10 |
|       |          |                 | charges and enforced  |       |
|       |          |                 | collection, the name, | R     |
|       |          |                 | address and phone     | MB-14 |
|       |          |                 | number of a point of  |       |
|       |          |                 | contact the           |       |
|       |          |                 | customer/debtor may   |       |
|       |          |                 | speak with regarding  |       |
|       |          |                 | the bill, and         |       |
|       |          |                 | remedies the agency   |       |
|       |          |                 | will use to enforce   |       |
|       |          |                 | payment of debts.     |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies use          |       |
|       |          |                 | sub-accounts to       |       |
|       |          |                 | determine the status  |       |
|       |          |                 | of accounts           |       |
|       |          |                 | receivable from       |       |
|       |          |                 | unbilled to billed    |       |
|       |          |                 | since the SGL         |       |
|       |          |                 | currently does not    |       |
|       |          |                 | have accounts to      |       |
|       |          |                 | track this action.    |       |
|       |          |                 | This is an acceptable |       |
|       |          |                 | practice; however,    |       |
|       |          |                 | agencies that use     |       |
|       |          |                 | these sub-accounts to |       |
|       |          |                 | accomplish this       |       |
|       |          |                 | action should update  |       |
|       |          |                 | the general ledger    |       |
|       |          |                 | from unbilled to      |       |
|       |          |                 | billed.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send     | The agency      | The billing document  |       |
| 4.3.4 | Bill to  | requests        | is sent in electronic |       |
|       | Custome  | payment from    | or hard-copy format,  |       |
|       | r/Debtor | the             | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Custome  | A billing       |                       |       |
| 4.3.5 | r/Debtor | document        |                       |       |
|       | Receives | representing a  |                       |       |
|       | Billing  | record of claim |                       |       |
|       | Document | is received by  |                       |       |
|       |          | the             |                       |       |
|       |          | d               |                       |       |
|       |          | ebtor/customer. |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Collection of Receipts**

This section provides the process for receiving and controlling monies
collected on associated debts, and recording in the general ledger.

The following flowchart provides key steps in the processes agencies use
to control and capture information for monies received. The steps
depicted in the functional lanes for Treasury and Financial Institutions
are included to provide general information on processes currently under
development, by Treasury. The intent is not to provide detail on how
those procedures will function, but rather to provide background for the
flow of data that will be received by agencies.

##  RM 4.4 -- Collection of Receipts Flowchart {#rm-4.4-collection-of-receipts-flowchart .unnumbered}

![](media/image31.wmf){width="6.990277777777778in"
height="5.270138888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Collection of Receipts process steps are
described as follows:

+------+----------+-----------------+-----------------------+-------+
| Step | Step     | Step            | Business Rules        | CFSR  |
| ID   | Name     | Description     |                       | Req.  |
+======+==========+=================+=======================+=======+
| RM   | Remitter | The remitter    |                       |       |
| 4    | Submits  | initiates       |                       |       |
| .4.1 | Cred     | payment to the  |                       |       |
|      | it/Debit | agency by using |                       |       |
|      | Card     | a credit or     |                       |       |
|      | Tra      | debit card.     |                       |       |
|      | nsaction |                 |                       |       |
|      | to       |                 |                       |       |
|      | Agency?  |                 |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | Based on its          | R     |
| 4    | T        | accepts payment | arrangement with an   | MD-01 |
| .4.2 | ransmits | via a credit or | FI, an agency         |       |
|      | Credit   | debit card and  | performs applicable   |       |
|      | or Debit | sends           | settlement procedures |       |
|      | Card     | information to  | for transactions      |       |
|      | Tra      | a designated    | transmitted.          |       |
|      | nsaction | Financial       |                       |       |
|      | for      | Institution     |                       |       |
|      | Autho    | (FI) for        |                       |       |
|      | rization | authorization.  |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | FI       | The designated  |                       |       |
| 4    | Receives | FI processes    |                       |       |
| .4.3 | Request  | the transaction |                       |       |
|      | for      | electronically. |                       |       |
|      | Autho    |                 |                       |       |
|      | rization |                 |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Tra      | The FI          |                       |       |
| 4    | nsaction | authorizes or   |                       |       |
| .4.4 | Aut      | declines the    |                       |       |
|      | horized? | transaction     |                       |       |
|      |          | request.        |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Agency receives | Agencies must         |       |
| 4    | Receives | notice from FI  | research declined     |       |
| .4.5 | Noti     | that a          | transactions in order |       |
|      | fication | transaction has | to determine the      |       |
|      | of       | been declined.  | reason the            |       |
|      | Declined |                 | transaction was       |       |
|      | Tra      |                 | declined and take     |       |
|      | nsaction |                 | appropriate           |       |
|      |          |                 | subsequent action.    |       |
|      |          |                 |                       |       |
|      |          |                 | The agency informs    |       |
|      |          |                 | the customer the      |       |
|      |          |                 | transaction is not    |       |
|      |          |                 | authorized.           |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Transmit | The applicable  | Transactions must be  |       |
| 4    | Au       | FI(s)           | validated and         |       |
| .4.6 | thorized | (including      | processed in a timely |       |
|      | Tra      | Federal Reserve | manner. Agency        |       |
|      | nsaction | Bank (FRB), as  | policies and          |       |
|      | Inf      | applicable)     | procedures will       |       |
|      | ormation | receives,       | define frequency in   |       |
|      |          | processes, and  | which actions are     |       |
|      |          | transmits the   | performed.            |       |
|      |          | transactions    |                       |       |
|      |          | electronically. |                       |       |
|      |          |                 |                       |       |
|      |          | Program and     |                       |       |
|      |          | financial data  |                       |       |
|      |          | are received by |                       |       |
|      |          | FIs which were  |                       |       |
|      |          | initially       |                       |       |
|      |          | remitted        |                       |       |
|      |          | through various |                       |       |
|      |          | mechanisms      |                       |       |
|      |          | including       |                       |       |
|      |          | ov              |                       |       |
|      |          | er-the-counter, |                       |       |
|      |          | Web page, mail, |                       |       |
|      |          | electronic      |                       |       |
|      |          | terminal,       |                       |       |
|      |          | electronic      |                       |       |
|      |          | file, phone,    |                       |       |
|      |          | etc.            |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      |                       |       |
| 4    | Receives | receives the    |                       |       |
| .4.7 | Cred     | transaction     |                       |       |
|      | it/Debit | authorization   |                       |       |
|      | Card     | number, date    |                       |       |
|      | Inf      | received, and   |                       |       |
|      | ormation | partial credit  |                       |       |
|      |          | card account    |                       |       |
|      |          | number, as      |                       |       |
|      |          | applicable,     |                       |       |
|      |          | from the FI.    |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Remitter | A remitter pays |                       | R     |
| 4    | Submits  | the agency      |                       | MD-01 |
| .4.8 | Ca       | directly with   |                       |       |
|      | sh/Check | cash or a       |                       |       |
|      | to       | check.          |                       |       |
|      | Agency   |                 |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Finance         | In accordance with    |       |
| 4    | Receives | receives a      | internal control      |       |
| .4.9 | Cash,    | payment in the  | activities common to  |       |
|      | Checks,  | form of cash or | all agencies, key     |       |
|      | and      | check and logs  | duties and            |       |
|      | Prepares | the information | responsibilities need |       |
|      | Control  | for tracking    | to be divided or      |       |
|      | Logs     | and internal    | segregated among      |       |
|      |          | control         | different people to   |       |
|      |          | purposes.       | reduce the risk of    |       |
|      |          |                 | error or fraud. This  |       |
|      |          |                 | should include        |       |
|      |          |                 | separating the        |       |
|      |          |                 | responsibilities for  |       |
|      |          |                 | authorizing,          |       |
|      |          |                 | processing and        |       |
|      |          |                 | recording, and        |       |
|      |          |                 | reviewing the         |       |
|      |          |                 | transactions, as well |       |
|      |          |                 | as handling any       |       |
|      |          |                 | related assets. No    |       |
|      |          |                 | one individual should |       |
|      |          |                 | control all key       |       |
|      |          |                 | aspects of a          |       |
|      |          |                 | transaction or event. |       |
|      |          |                 |                       |       |
|      |          |                 | Cash and checks       |       |
|      |          |                 | received at the       |       |
|      |          |                 | agency should, at a   |       |
|      |          |                 | minimum, be deposited |       |
|      |          |                 | daily. Agencies must  |       |
|      |          |                 | design and implement  |       |
|      |          |                 | policies and          |       |
|      |          |                 | procedures            |       |
|      |          |                 | incorporating sound   |       |
|      |          |                 | internal controls to  |       |
|      |          |                 | safeguard and account |       |
|      |          |                 | for not only daily    |       |
|      |          |                 | collections, but also |       |
|      |          |                 | for collections that  |       |
|      |          |                 | cannot be deposited   |       |
|      |          |                 | by the end of each    |       |
|      |          |                 | day. Such undeposited |       |
|      |          |                 | collections must be   |       |
|      |          |                 | included in           |       |
|      |          |                 | applicable financial  |       |
|      |          |                 | reports.              |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Remitter | A remitter      | Payments involving    | R     |
| 4.   | Submits  | submits cash,   | electronic and cash   | MD-01 |
| 4.10 | Ca       | check, or       | equivalents include   |       |
|      | sh/Check | initiates an    | transactions          |       |
|      | or       | electronic      | initiated by phone,   |       |
|      | El       | transaction     | electronic check,     |       |
|      | ectronic | through         | Internet/Web          |       |
|      | Payment  | applicable FI   | (including pay.gov),  |       |
|      | via FI   | channels.       | Fedwire, and          |       |
|      |          |                 | Automated Clearing    |       |
|      |          |                 | House transactions.   |       |
|      |          |                 |                       |       |
|      |          |                 | Agencies may manually |       |
|      |          |                 | process hard copy     |       |
|      |          |                 | checks, utilize the   |       |
|      |          |                 | Paper Check           |       |
|      |          |                 | Conversion process,   |       |
|      |          |                 | or other approved     |       |
|      |          |                 | automated process.    |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | FI       | The applicable  | Transactions must be  |       |
| 4.   | T        | FI(s)           | validated and         |       |
| 4.11 | ransmits | (including FRB, | processed in a timely |       |
|      | Tra      | as applicable)  | manner. Agency        |       |
|      | nsaction | receives,       | policies and          |       |
|      |          | processes, and  | procedures will       |       |
|      |          | transmits the   | define frequency in   |       |
|      |          | transactions    | which actions are     |       |
|      |          | electronically. | performed.            |       |
|      |          |                 |                       |       |
|      |          | Program and     |                       |       |
|      |          | financial data  |                       |       |
|      |          | are received by |                       |       |
|      |          | FIs which were  |                       |       |
|      |          | initially       |                       |       |
|      |          | remitted        |                       |       |
|      |          | through various |                       |       |
|      |          | mechanisms      |                       |       |
|      |          | including over  |                       |       |
|      |          | the counter,    |                       |       |
|      |          | Web page, mail, |                       |       |
|      |          | electronic      |                       |       |
|      |          | terminal,       |                       |       |
|      |          | electronic      |                       |       |
|      |          | file, phone,    |                       |       |
|      |          | etc.            |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Designated      | Agencies must capture |       |
| 4.   | Deposits | agency          | and maintain          |       |
| 4.12 | Cash,    | personnel       | sufficient supporting |       |
|      | Checks   | deposit cash    | documentation for     |       |
|      |          | and checks      | each deposit to       |       |
|      |          | received to the | support the           |       |
|      |          | designated FI   | application of        |       |
|      |          | via Treasury    | receipts to customer  |       |
|      |          | sponsored       | subsidiary records    |       |
|      |          | electronic      | and the general       |       |
|      |          | processing      | ledger.               |       |
|      |          | tools.          |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Settle   | Settlement      | Settlement results in |       |
| 4.   | Tran     | occurs at both  | a deposit at the      |       |
| 4.13 | sactions | FIs and FRBs    | applicable            |       |
|      |          | acting on       | institution.          |       |
|      |          | behalf of       |                       |       |
|      |          | Treasury.       |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Treasury | Treasury makes  | Treasury will use the |       |
| 4.   | P        | collections     | TRS as a centralized  |       |
| 4.14 | opulates | data available  | repository of         |       |
|      | the Data | to agencies by  | detailed collection   |       |
|      | Re       | populating the  | transaction           |       |
|      | pository | Transaction     | information. It will  |       |
|      |          | Reporting       | provide a single      |       |
|      |          | System (TRS)    | touch point from      |       |
|      |          | data            | which an agency can   |       |
|      |          | repository.     | obtain transaction    |       |
|      |          |                 | data and standard     |       |
|      |          |                 | reports, integrating  |       |
|      |          |                 | information across    |       |
|      |          |                 | all collections       |       |
|      |          |                 | channels and          |       |
|      |          |                 | settlement            |       |
|      |          |                 | mechanisms.           |       |
|      |          |                 |                       |       |
|      |          |                 | TRS will capture      |       |
|      |          |                 | Treasury Account      |       |
|      |          |                 | Symbol (TAS) and      |       |
|      |          |                 | Business Event Type   |       |
|      |          |                 | Code (BETC)           |       |
|      |          |                 | information from the  |       |
|      |          |                 | various sending       |       |
|      |          |                 | trading partner (STP) |       |
|      |          |                 | channel applications, |       |
|      |          |                 | or it will receive    |       |
|      |          |                 | Classification Keys   |       |
|      |          |                 | from the STPs, which  |       |
|      |          |                 | can be \"translated\" |       |
|      |          |                 | into TAS/BETC         |       |
|      |          |                 | details.              |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Con      | The deposit     | Concentration is      |       |
| 4.   | centrate | data for the    | performed by          |       |
| 4.15 | Col      | funds from      | applicable systems at |       |
|      | lections | Commercial FIs  | FRBs and/or           |       |
|      |          | and the FRBs    | commercial FIs.       |       |
|      |          | are             |                       |       |
|      |          | concentrated    | Concentration moves   |       |
|      |          | and captured in | funds from an account |       |
|      |          | the Treasury    | that settles the      |       |
|      |          | General Account | transactions to the   |       |
|      |          | (TGA) Fund.     | TGA Fund at the       |       |
|      |          |                 | Federal Reserve Bank  |       |
|      |          |                 | of New York.          |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | The TRS data includes | T     |
| 4.   | D        | downloads       | Treasury              | LD-01 |
| 4.16 | ownloads | Treasury        | confirmations of      |       |
|      | Treasury | collections     | deposit tickets and   | S     |
|      | Data     | data, including | credit/debit card     | MD-07 |
|      |          | both summary    | transactions as well  |       |
|      |          | and detailed    | as all other          |       |
|      |          | transaction     | transactions          |       |
|      |          | records.        | processed by          |       |
|      |          |                 | Treasury.             |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Treasury        | The TRS data, which   |       |
| 4.   | Compares | records of      | will be available     |       |
| 4.17 | Cash,    | agency deposits | daily, is used to     |       |
|      | Checks,  | are compared to | confirm Treasury      |       |
|      | Cred     | agency records  | received and captured |       |
|      | it/Debit | of its deposits | the transactions. A   |       |
|      | Card     | made.           | timing difference may |       |
|      | Inf      |                 | occur between the     |       |
|      | ormation |                 | time the agency       |       |
|      | to       |                 | captures the          |       |
|      | Treasury |                 | collection and the    |       |
|      | Data     |                 | time the collection   |       |
|      |          |                 | is reflected in TRS.  |       |
|      |          |                 |                       |       |
|      |          |                 | Agencies must compare |       |
|      |          |                 | their records of      |       |
|      |          |                 | deposits to Treasury  |       |
|      |          |                 | records of deposits   |       |
|      |          |                 | on a periodic basis.  |       |
|      |          |                 | These comparative     |       |
|      |          |                 | procedures must be    |       |
|      |          |                 | performed until       |       |
|      |          |                 | differences are       |       |
|      |          |                 | resolved. All         |       |
|      |          |                 | resolutions should be |       |
|      |          |                 | made on a timely      |       |
|      |          |                 | basis.                |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Treasury | Treasury or the |                       |       |
| 4.   | Collects | DOJ transmits   |                       |       |
| 4.18 | De       | data to the     |                       |       |
|      | linquent | agency for      |                       |       |
|      | Debt     | collections of  |                       |       |
|      |          | delinquent debt |                       |       |
|      |          | with the public |                       |       |
|      |          | collected on    |                       |       |
|      |          | behalf of the   |                       |       |
|      |          | agency.         |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | Best practice is to   |       |
| 4.   | Receives | receives        | capture receipts data |       |
| 4.19 | Receipts | receipts data   | to reflect the        |       |
|      | Data on  | from Treasury,  | current status of the |       |
|      | De       | via the         | bill.                 |       |
|      | linquent | Int             |                       |       |
|      | Debt     | ra-Governmental |                       |       |
|      | With the | Payment and     |                       |       |
|      | Public   | Collection      |                       |       |
|      |          | system, on      |                       |       |
|      |          | delinquent debt |                       |       |
|      |          | with the        |                       |       |
|      |          | public.         |                       |       |
+------+----------+-----------------+-----------------------+-------+

##  **Application of Receipts**

This section provides the process the process for the application of
monies received/collected. Receipts should be recorded to the general
ledger as quickly as possible. Application of receipts may be supported
by information from the impacted business area to support timely and
accurate posting. This chapter addresses five general ledger recording
scenarios for receipts:

-   Receipts applied to a customer account but not to a specific bill;

-   Receipts applied to a customer account and a specific bill;

-   Receipts applied to applicable revenue accounts;

-   Receipts applied to Treasury's general fund; and

-   Unapplied collections.

Receipts are recorded regardless of whether they are associated with
transactions previously established as a receivable.  Receipts
associated with over the counter purchases and/or previously written off
receivables are examples of cases where agencies may receive collections
which were not previously established as a receivable. The following
flowchart provides key steps in the processes agencies use to process
and capture receipts information to customer/debtor accounts and record
the appropriate transactions to the general ledger. 

## RM 4.5 -- Application of Receipts Flowchart {#rm-4.5-application-of-receipts-flowchart .unnumbered}

![](media/image32.wmf){width="6.990277777777778in"
height="4.0777777777777775in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

## RM 4.5 -- Application of Receipts Flowchart Continued {#rm-4.5-application-of-receipts-flowchart-continued .unnumbered}

![](media/image33.wmf){width="6.990277777777778in" height="5.175in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Application of Receipts process steps are
> described as follows:

+-------+----------+-----------------+-----------------------+------+
| >     | Step     | Step            | Business Rules        | CFSR |
|  Step | Name     | Description     |                       | Req. |
| > ID  |          |                 |                       |      |
+=======+==========+=================+=======================+======+
| > RM  | Col      | This data       | Collection data must  | RM   |
| >     | lections | represents      | be captured.          | D-01 |
| 4.5.1 | Data     | credit/debit    |                       |      |
|       | I        | card, cash,     |                       |      |
|       | nitially | and/or check    |                       |      |
|       | Received | remittances     |                       |      |
|       | at       | made directly   |                       |      |
|       | Agency   | to the agency.  |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Tran     | This data has   |                       |      |
| 4.5.2 | sactions | been downloaded |                       |      |
|       | from     | and sorted by   |                       |      |
|       | Treasury | transaction     |                       |      |
|       | Data     | type and        |                       |      |
|       | Re       | includes both   |                       |      |
|       | pository | remittance      |                       |      |
|       |          | information     |                       |      |
|       |          | originally      |                       |      |
|       |          | received        |                       |      |
|       |          | directly by the |                       |      |
|       |          | agency as well  |                       |      |
|       |          | as remittance   |                       |      |
|       |          | information     |                       |      |
|       |          | originally      |                       |      |
|       |          | received at     |                       |      |
|       |          | Treasury.       |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Diffe    | Finance         | Prior to processing   |      |
| 4.5.3 | rentiate | determines      | Treasury data in the  |      |
|       | Data for | whether         | Core Financial        |      |
|       | Col      | transactions    | System, the agency    |      |
|       | lections | from TRS were   | applies edit checks   |      |
|       | I        | initially       | to each collection    |      |
|       | nitially | processed by    | transaction from TRS  |      |
|       | P        | the agency or   | to determine whether  |      |
|       | rocessed | initially       | it was initially      |      |
|       | at       | processed at    | processed by the      |      |
|       | Agency   | Treasury.       | agency and then       |      |
|       | from     |                 | submitted to          |      |
|       | Col      |                 | Treasury. The TRS     |      |
|       | lections |                 | data is used to       |      |
|       | I        |                 | confirm Treasury      |      |
|       | nitially |                 | received and captured |      |
|       | P        |                 | the transactions one  |      |
|       | rocessed |                 | or more days after    |      |
|       | at       |                 | the agency has        |      |
|       | Treasury |                 | received and captured |      |
|       |          |                 | the collections.      |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Pre      | Each file of    | Edit and validity     | TL   |
| 4.5.4 | -Process | transactions    | checks are applied to | D-02 |
|       | Co       | downloaded from | each transaction file |      |
|       | llection | TRS and other   | to determine whether  | TL   |
|       | Tran     | sources is      | required data has     | D-03 |
|       | sactions | subjected to    | been provided and     |      |
|       |          | edit and        | whether the file is a | TL   |
|       |          | validity checks | duplicate which has   | D-05 |
|       |          | prior to being  | already been          |      |
|       |          | processed in    | processed by the      |      |
|       |          | the Core        | agency. Automated     |      |
|       |          | Financial       | checks are applied to |      |
|       |          | System.         | validate such         |      |
|       |          |                 | specifications as the |      |
|       |          |                 | file layout, number   |      |
|       |          |                 | of fields, validity   |      |
|       |          |                 | of applicable fields, |      |
|       |          |                 | completeness, and     |      |
|       |          |                 | header and trailer    |      |
|       |          |                 | records.              |      |
|       |          |                 |                       |      |
|       |          |                 | Key data required can |      |
|       |          |                 | include customer      |      |
|       |          |                 | number, bill number   |      |
|       |          |                 | and associated        |      |
|       |          |                 | amounts, TAS,         |      |
|       |          |                 | Treasury              |      |
|       |          |                 | Appropriation Fund    |      |
|       |          |                 | Symbol (TAFS), Agency |      |
|       |          |                 | Location Code (ALC),  |      |
|       |          |                 | and other applicable  |      |
|       |          |                 | agency information.   |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | D        | Based on the    | Agencies should have  | TL   |
| 4.5.5 | uplicate | results of edit | adequate internal     | D-05 |
|       | File?    | and validity    | controls to prevent   |      |
|       |          | checks, the     | the loading of a      |      |
|       |          | agency          | duplicate file into   |      |
|       |          | determines      | the Core Financial    |      |
|       |          | whether the     | System. Agencies must |      |
|       |          | files from      | implement procedures  |      |
|       |          | Treasury or     | to readily identify   |      |
|       |          | other sources   | duplicate files prior |      |
|       |          | represent       | to loading such files |      |
|       |          | duplicate files | to the Core Financial |      |
|       |          | previously      | System.               |      |
|       |          | processed by    |                       |      |
|       |          | the agency.     |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Reject   | A duplicate     | Agencies should       | TL   |
| 4.5.6 | File     | file is         | develop and implement | D-05 |
|       |          | rejected and    | applicable internal   |      |
|       |          | not processed.  | controls to prevent   | TL   |
|       |          |                 | processing of         | D-06 |
|       |          |                 | duplicate files.      |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Tra      | Transactions    | Agencies must         | TL   |
| 4.5.7 | nsaction | lacking data in | implement data        | D-02 |
|       | Proc     | required fields | validity checks to    |      |
|       | essable? | are not         | identify transaction  | TL   |
|       |          | processable.    | record fields with    | D-03 |
|       |          |                 | incomplete or invalid |      |
|       |          |                 | data prior to loading | TL   |
|       |          |                 | such data to the Core | D-05 |
|       |          |                 | Financial System.     |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Tra      | The Core        | Transaction record    | TL   |
| 4.5.8 | nsaction | Financial       | fields with           | D-04 |
|       | in Error | System          | incomplete or invalid |      |
|       |          | generates a     | data result in a      | TL   |
|       |          | file of         | transaction being     | D-06 |
|       |          | transactions    | categorized as an     |      |
|       |          | considered to   | error.                |      |
|       |          | be in error     |                       |      |
|       |          | status because  |                       |      |
|       |          | one or more key |                       |      |
|       |          | required fields |                       |      |
|       |          | (e.g., customer |                       |      |
|       |          | number,         |                       |      |
|       |          | organization    |                       |      |
|       |          | code) lack      |                       |      |
|       |          | valid data.     |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Research | The agency      | Collection            | TL   |
| 4.5.9 | and      | researches and  | transactions in error | D-04 |
|       | Correct  | cor             | must be               |      |
|       | Tra      | rects/completes | corrected/edited to   | TL   |
|       | nsaction | data for        | enable processing of  | D-05 |
|       | in Error | transactions in | those transactions in |      |
|       |          | error.          | the Core Financial    |      |
|       |          |                 | System.               |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Tra      | The agency      | Documentation         | TL   |
| 4     | nsaction | determines      | supporting            | D-04 |
| .5.10 | in Error | whether or not  | transaction error     |      |
|       | Co       | the transaction | corrections must be   |      |
|       | rrected? | error has been  | maintained.           |      |
|       |          | corrected.      |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Tran     | Transactions    | Agencies should       | RM   |
| 4     | sactions | are entered in  | develop appropriate   | D-01 |
| .5.11 | Entered  | the Core        | internal controls and |      |
|       | in Core  | Financial       | related procedures to | TL   |
|       | F        | System.         | enable accurate and   | D-01 |
|       | inancial |                 | complete processing   |      |
|       | System   |                 | of transactions in    | TL   |
|       |          |                 | the Core Financial    | D-03 |
|       |          |                 | System.               |      |
|       |          |                 |                       | TL   |
|       |          |                 |                       | D-04 |
+-------+----------+-----------------+-----------------------+------+
| RM    | D        | Based on the    | Key data fields are   | SM   |
| 4     | uplicate | results of edit | validated to identify | B-06 |
| .5.12 | Tran     | and validity    | duplicate             |      |
|       | saction? | checks, the     | transactions.         |      |
|       |          | Core Financial  |                       |      |
|       |          | System          |                       |      |
|       |          | determines      |                       |      |
|       |          | whether         |                       |      |
|       |          | individual      |                       |      |
|       |          | transactions    |                       |      |
|       |          | represent       |                       |      |
|       |          | duplicates of   |                       |      |
|       |          | transactions    |                       |      |
|       |          | already         |                       |      |
|       |          | processed in    |                       |      |
|       |          | the Core        |                       |      |
|       |          | Financial       |                       |      |
|       |          | System.         |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Reject   | Duplicate       | A report should be    | SM   |
| 4     | Tra      | transactions    | generated to track    | B-11 |
| .5.13 | nsaction | are rejected by | rejected              |      |
|       |          | the Core        | transactions.         |      |
|       |          | Financial       | Agencies should       |      |
|       |          | System.         | implement procedures  |      |
|       |          |                 | to research and       |      |
|       |          |                 | correct the cause of  |      |
|       |          |                 | such duplicate        |      |
|       |          |                 | transactions.         |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Refund   | Based on        |                       |      |
| 4     | to be    | evaluation of   |                       |      |
| .5.14 | Pr       | amounts         |                       |      |
|       | ocessed? | received,       |                       |      |
|       |          | Finance         |                       |      |
|       |          | determines the  |                       |      |
|       |          | need to process |                       |      |
|       |          | a refund.       |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | To Issue | If the amount   |                       |      |
| 4     | Refund   | received is in  |                       |      |
| .5.15 | Process  | excess of the   |                       |      |
|       |          | amount due,     |                       |      |
|       |          | Finance         |                       |      |
|       |          | processes a     |                       |      |
|       |          | refund through  |                       |      |
|       |          | the execution   |                       |      |
|       |          | of a refund     |                       |      |
|       |          | process. The    |                       |      |
|       |          | refund process  |                       |      |
|       |          | will be defined |                       |      |
|       |          | in an updated   |                       |      |
|       |          | release of the  |                       |      |
|       |          | Payment         |                       |      |
|       |          | Standard        |                       |      |
|       |          | Business        |                       |      |
|       |          | Process.        |                       |      |
|       |          | updated         |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | The Core        | For collections       | RM   |
| 4     | llection | Financial       | against receivables,  | D-02 |
| .5.16 | on an    | System          | an agency must        |      |
|       | Existing | determines      | reference the         | RM   |
|       | Rec      | whether the     | receivable document   | D-03 |
|       | eivable? | collection      | and update customer   |      |
|       |          | pertains to an  | records and related   |      |
|       |          | accounts        | billing information.  |      |
|       |          | receivable or   |                       |      |
|       |          | represents a    | Examples of           |      |
|       |          | collection for  | collections without   |      |
|       |          | which there is  | receivables include   |      |
|       |          | not an existing | over the counter      |      |
|       |          | accounts        | purchase, early       |      |
|       |          | receivable .    | payment, etc.         |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | Determine       | Compare the customer  |      |
| 4     | llection | whether the     | account in the        |      |
| .5.17 | Contains | collection data | transaction record to |      |
|       | Valid    | includes a      | the customer accounts |      |
|       | Customer | valid customer  | established as        |      |
|       | Account  | account.        | described in section  |      |
|       | Data?    |                 | RM 4.1.               |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | Determine       | Apply data checks to  |      |
| 4     | llection | whether the     | determine whether the |      |
| .5.18 | Iden     | collection      | agency bill number is |      |
|       | tifiable | transaction     | present or can be     |      |
|       | to a     | includes the    | determined from other |      |
|       | Specific | necessary data  | applicable            |      |
|       | Bill?    | to be captured  | information such as a |      |
|       |          | by a specific   | PO.                   |      |
|       |          | bill on a       |                       |      |
|       |          | customer        |                       |      |
|       |          | account.        |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | The collection  | The entries are       | GL   |
| 4     | llection | is captured in  | recorded in the       | B-01 |
| .5.19 | is       | the customer    | general ledger using  |      |
|       | Captured | account.        | the USSGL Account     | GL   |
|       | in       |                 | Transaction Listing   | C-01 |
|       | Customer |                 | provided in the TFM.  |      |
|       | Account  |                 | Examples include, but | GL   |
|       | and      |                 | are not limited to,   | C-02 |
|       | Recorded |                 | the following         |      |
|       | to       |                 | transaction codes     | GL   |
|       | General  |                 | from the current TFM: | C-03 |
|       | Ledger   |                 |                       |      |
|       |          |                 | TFM-C109: To record   | GL   |
|       |          |                 | the receipt of        | C-04 |
|       |          |                 | previously            |      |
|       |          |                 | anticipated           | GL   |
|       |          |                 | collections.          | C-05 |
|       |          |                 |                       |      |
|       |          |                 | TFM-C138: To record   | GL   |
|       |          |                 | the collection of     | C-06 |
|       |          |                 | refunds receivable    |      |
|       |          |                 | for assets purchased  | RM   |
|       |          |                 | or expenses incurred  | D-02 |
|       |          |                 | in the current year   |      |
|       |          |                 | that create budgetary | RM   |
|       |          |                 | resources when        | D-04 |
|       |          |                 | collected.            |      |
|       |          |                 |                       | RM   |
|       |          |                 | For guidance on       | D-06 |
|       |          |                 | applying payments     |      |
|       |          |                 | against delinquent    | RM   |
|       |          |                 | debt, see Treasury\'s | D-07 |
|       |          |                 | *Managing Federal     |      |
|       |          |                 | Receivables* and the  | SM   |
|       |          |                 | Federal Claims        | B-02 |
|       |          |                 | Collections           |      |
|       |          |                 | Standards. This       | SM   |
|       |          |                 | guidance particularly | B-33 |
|       |          |                 | illustrates the order |      |
|       |          |                 | in which the payment  |      |
|       |          |                 | is applied against    |      |
|       |          |                 | delinquent debt       |      |
|       |          |                 | classes and also      |      |
|       |          |                 | provides exceptions   |      |
|       |          |                 | to that application   |      |
|       |          |                 | order.                |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Id       | Transactions    | The entries are       | GL   |
| 4     | entified | that pass all   | recorded using the    | B-01 |
| .5.20 | Co       | edit and        | USSGL Account         |      |
|       | llection | validity checks | Transaction Listing   | GL   |
|       | is       | are applied to  | provided in the TFM.  | C-01 |
|       | Applied  | a specific      | Examples include, but |      |
|       | to       | customer/debtor | are not limited to,   | GL   |
|       | Specific | bill as well as | the following         | C-02 |
|       | Bill in  | the general     | transaction codes     |      |
|       | Customer | ledger.         | from the current TFM: | GL   |
|       | Account  |                 |                       | C-03 |
|       | and      |                 | TFM-C109: To record   |      |
|       | Recorded |                 | the receipt of        | GL   |
|       | in       |                 | previously            | C-04 |
|       | General  |                 | anticipated           |      |
|       | Ledger   |                 | collections.          | GL   |
|       |          |                 |                       | C-05 |
|       |          |                 | TFM-C138: To record   |      |
|       |          |                 | the collection of     | GL   |
|       |          |                 | refunds receivable    | C-06 |
|       |          |                 | for assets purchased  |      |
|       |          |                 | or expenses incurred  | RM   |
|       |          |                 | in the current year   | D-02 |
|       |          |                 | that create budgetary |      |
|       |          |                 | resources when        | RM   |
|       |          |                 | collected.            | D-04 |
|       |          |                 |                       |      |
|       |          |                 |                       | RM   |
|       |          |                 |                       | D-06 |
|       |          |                 |                       |      |
|       |          |                 |                       | RM   |
|       |          |                 |                       | D-07 |
|       |          |                 |                       |      |
|       |          |                 |                       | SM   |
|       |          |                 |                       | B-02 |
|       |          |                 |                       |      |
|       |          |                 |                       | SM   |
|       |          |                 |                       | B-33 |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | The agency      | Agencies would also   |      |
| 4     | llection | determines if   | record the collection |      |
| .5.21 | on a     | the collection  | of delinquent debts   |      |
|       | Pr       | was on a        | that have been        |      |
|       | eviously | previously      | written off, closed   |      |
|       | Written  | written-off     | out, or waived.       |      |
|       | Off      | receivable.     | Treasury\'s *Managing |      |
|       | Rec      |                 | Federal Receivables*  |      |
|       | eivable? |                 | provides guidance to  |      |
|       |          |                 | allow agencies to     |      |
|       |          |                 | develop procedures    |      |
|       |          |                 | for the pursuit of    |      |
|       |          |                 | collection after      |      |
|       |          |                 | classification of     |      |
|       |          |                 | debt into a           |      |
|       |          |                 | write-off/currently   |      |
|       |          |                 | not collectable       |      |
|       |          |                 | status.               |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Reverse  | The entry       | The entry is recorded | RM   |
| 4     | W        | originally      | based on the original | D-05 |
| .5.22 | rite-Off | recorded to     | entry to write off    |      |
|       | in       | write off the   | the accounts          |      |
|       | General  | accounts        | receivable in the     |      |
|       | Ledger   | receivable is   | general ledger. The   |      |
|       |          | reversed.       | entries originally    |      |
|       |          |                 | recorded to write off |      |
|       |          |                 | the accounts          |      |
|       |          |                 | receivable are        |      |
|       |          |                 | represented in whole  |      |
|       |          |                 | or in part in the     |      |
|       |          |                 | business rule for     |      |
|       |          |                 | step RM 4.8.4 "Record |      |
|       |          |                 | Write-Off in General  |      |
|       |          |                 | Ledger".              |      |
|       |          |                 |                       |      |
|       |          |                 | Entries to applicable |      |
|       |          |                 | interest,             |      |
|       |          |                 | administrative fee,   |      |
|       |          |                 | and penalty accounts  |      |
|       |          |                 | must also be reversed |      |
|       |          |                 | as well as the contra |      |
|       |          |                 | allowance accounts    |      |
|       |          |                 | for each.             |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | Collections are | Agency guidelines     | RM   |
| 4     | llection | recorded to     | should define         | D-03 |
| .5.23 | is       | applicable      | circumstances in      |      |
|       | Recorded | general ledger  | which entries are     | RM   |
|       | in       | accounts when   | recorded to           | D-05 |
|       | General  | receivables     | applicable revenue    |      |
|       | Ledger   | were not        | accounts versus a     | RM   |
|       |          | previously      | General Fund Receipt  | D-06 |
|       |          | established or  | posting.              |      |
|       |          | when the        |                       | RM   |
|       |          | receivable was  | If the agency         | D-07 |
|       |          | waived or       | determines the entry  |      |
|       |          | written off.    | should be recorded to | GL   |
|       |          |                 | applicable revenue    | C-01 |
|       |          |                 | accounts, the entries |      |
|       |          |                 | are recorded using    | GL   |
|       |          |                 | the USSGL Account     | C-02 |
|       |          |                 | Transaction Listing   |      |
|       |          |                 | provided in the TFM.  | GL   |
|       |          |                 | Examples include, but | C-03 |
|       |          |                 | are not limited to,   |      |
|       |          |                 | the following         | GL   |
|       |          |                 | transaction codes     | C-04 |
|       |          |                 | from the current TFM: |      |
|       |          |                 |                       | GL   |
|       |          |                 | TFM-C640: To record   | C-05 |
|       |          |                 | the proceeds from     |      |
|       |          |                 | commodities sold.     | GL   |
|       |          |                 |                       | C-06 |
|       |          |                 | TFM-C646: To record   |      |
|       |          |                 | the sale or           | SM   |
|       |          |                 | disposition of assets | B-02 |
|       |          |                 | other than personal   |      |
|       |          |                 | properties and        | SM   |
|       |          |                 | investments.          | B-33 |
|       |          |                 |                       |      |
|       |          |                 | If the agency         |      |
|       |          |                 | determines the entry  |      |
|       |          |                 | should be recorded to |      |
|       |          |                 | the General Fund      |      |
|       |          |                 | Receipt Account, the  |      |
|       |          |                 | entries are recorded  |      |
|       |          |                 | using the USSGL       |      |
|       |          |                 | Account Transaction   |      |
|       |          |                 | Listing logic         |      |
|       |          |                 | provided in the TFM.  |      |
|       |          |                 | Examples include, but |      |
|       |          |                 | are not limited to,   |      |
|       |          |                 | the following         |      |
|       |          |                 | transaction code from |      |
|       |          |                 | the current TFM:      |      |
|       |          |                 |                       |      |
|       |          |                 | TFM-C141: To record   |      |
|       |          |                 | the collection of     |      |
|       |          |                 | custodial revenue     |      |
|       |          |                 | from a non-Federal    |      |
|       |          |                 | source that is        |      |
|       |          |                 | deposited to a        |      |
|       |          |                 | miscellaneous receipt |      |
|       |          |                 | account.              |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Re       | For collections | The Core Financial    |      |
| 4     | ceivable | not on an       | System applies edit   |      |
| .5.24 | R        | existing        | and validity checks   |      |
|       | equired? | accounts        | to determine if the   |      |
|       |          | receivable, the | collections data      |      |
|       |          | Core Financial  | provided is           |      |
|       |          | System          | sufficient to record  |      |
|       |          | determines      | applicable entries to |      |
|       |          | whether the     | the general ledger.   |      |
|       |          | transaction     |                       |      |
|       |          | data is         | For collections       |      |
|       |          | complete and    | without receivables,  |      |
|       |          | valid.          | an agency must record |      |
|       |          |                 | collections with      |      |
|       |          |                 | corresponding         |      |
|       |          |                 | revenues, expenditure |      |
|       |          |                 | reductions,           |      |
|       |          |                 | advance/prepayment    |      |
|       |          |                 | reclassifications, or |      |
|       |          |                 | other offsets.        |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | U        | Collection      | Agencies record       | RM   |
| 4     | napplied | transactions    | unapplied collections | D-03 |
| .5.25 | Co       | lacking key     | to applicable         |      |
|       | llection | information     | accounts as permitted | GL   |
|       | is       | required to be  | under Treasury        | C-01 |
|       | Recorded | applied to      | guidance.             |      |
|       | in       | customer        |                       | GL   |
|       | General  | accounts and/or | The entries are       | C-02 |
|       | Ledger   | revenue         | recorded using the    |      |
|       |          | accounts are    | USSGL Account         | GL   |
|       |          | recorded as     | Transaction Listing   | C-03 |
|       |          | unapplied       | provided in the TFM.  |      |
|       |          | collections in  | Examples include, but | GL   |
|       |          | the general     | are not limited to,   | C-04 |
|       |          | ledger.         | the following         |      |
|       |          |                 | transaction codes     | GL   |
|       |          |                 | from the current TFM: | C-05 |
|       |          |                 |                       |      |
|       |          |                 | TFM-C108: To record   | GL   |
|       |          |                 | the receipts reported | C-06 |
|       |          |                 | into deposit funds    |      |
|       |          |                 | and clearing          | SM   |
|       |          |                 | accounts.             | B-33 |
|       |          |                 |                       |      |
|       |          |                 | TFM-C152: To record   |      |
|       |          |                 | unapplied receipts    |      |
|       |          |                 | into fund symbols     |      |
|       |          |                 | that require          |      |
|       |          |                 | budgetary reporting.  |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Research | The agency      | Agencies must resolve |      |
| 4     | U        | researches      | all unapplied         |      |
| .5.26 | nmatched | transactions    | collections. Agencies |      |
|       | Tran     | that are not    | can use the following |      |
|       | sactions | matched to a    | tools to facilitate   |      |
|       |          | customer/debtor | resolution: aging     |      |
|       |          | account or      | reports, tracking of  |      |
|       |          | other valid     | types of collections, |      |
|       |          | collection      | data queries, etc.    |      |
|       |          | type.           |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Is       | Finance         | Agencies design and   |      |
| 4     | Su       | determines      | implement workflow    |      |
| .5.27 | pporting | whether         | processes in and      |      |
|       | Inf      | sufficient      | around the CFSR that  |      |
|       | ormation | supporting      | move information on   |      |
|       | Av       | information is  | unapplied collections |      |
|       | ailable? | available to    | to appropriate areas  |      |
|       |          | research and    | for research and      |      |
|       |          | resolve         | resolution.           |      |
|       |          | unapplied       |                       |      |
|       |          | collections.    |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Evaluate | Supporting      | Finance monitors and  |      |
| 4     | Su       | information     | evaluates the         |      |
| .5.28 | pporting | received is     | responses to          |      |
|       | Inf      | evaluated to    | information requests  |      |
|       | ormation | determine if    | related to unapplied  |      |
|       |          | sufficient      | collections.          |      |
|       |          | information     |                       |      |
|       |          | exists to       |                       |      |
|       |          | properly        |                       |      |
|       |          | identify and    |                       |      |
|       |          | apply           |                       |      |
|       |          | collection      |                       |      |
|       |          | transactions.   |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | If sufficient   |                       |      |
| 4     | llection | information has |                       |      |
| .5.29 | Issue    | been received   |                       |      |
|       | R        | and input to    |                       |      |
|       | esolved? | collection      |                       |      |
|       |          | transaction     |                       |      |
|       |          | records,        |                       |      |
|       |          | Finance records |                       |      |
|       |          | the             |                       |      |
|       |          | transactions to |                       |      |
|       |          | the general     |                       |      |
|       |          | ledger as       |                       |      |
|       |          | identified      |                       |      |
|       |          | collections.    |                       |      |
|       |          | Previous        |                       |      |
|       |          | entries to      |                       |      |
|       |          | record          |                       |      |
|       |          | unapplied       |                       |      |
|       |          | collections are |                       |      |
|       |          | reversed.       |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Is       | If the          | Cost effective        |      |
| 4     | Further  | unidentified    | efforts should        |      |
| .5.30 | Research | collection      | continue if an agency |      |
|       | Wa       | issue is not    | determines that such  |      |
|       | rranted? | resolved,       | efforts have some     |      |
|       |          | Finance         | potential to result   |      |
|       |          | determines      | in resolution of the  |      |
|       |          | whether further | collection issue.     |      |
|       |          | research        |                       |      |
|       |          | efforts are     | Agencies may use      |      |
|       |          | warranted.      | discretion in         |      |
|       |          |                 | determining threshold |      |
|       |          |                 | amounts below which   |      |
|       |          |                 | it is not considered  |      |
|       |          |                 | cost effective to     |      |
|       |          |                 | continue efforts to   |      |
|       |          |                 | resolve the           |      |
|       |          |                 | collection issue.     |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Request  | Request         |                       |      |
| 4     | Su       | information     |                       |      |
| .5.31 | pporting | from the        |                       |      |
|       | Inf      | business unit   |                       |      |
|       | ormation | (functional     |                       |      |
|       |          | area) that can  |                       |      |
|       |          | assist in       |                       |      |
|       |          | properly        |                       |      |
|       |          | identifying the |                       |      |
|       |          | collection      |                       |      |
|       |          | transactions.   |                       |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Document | Further         | Further research is   |      |
| 4     | Dis      | research is not | not warranted to      |      |
| .5.32 | position | warranted to    | resolve the           |      |
|       | of       | resolve the     | unidentified          |      |
|       | Receipt  | unidentified    | collection issue.     |      |
|       |          | collection      |                       |      |
|       |          | issue.          | Agencies should       |      |
|       |          |                 | monitor and maintain  |      |
|       |          |                 | records of            |      |
|       |          |                 | collections that will |      |
|       |          |                 | not be applied and    |      |
|       |          |                 | will be recorded as   |      |
|       |          |                 | miscellaneous         |      |
|       |          |                 | receipts to the       |      |
|       |          |                 | Treasury general      |      |
|       |          |                 | fund.                 |      |
+-------+----------+-----------------+-----------------------+------+
| RM    | Co       | Reverse the     | Agency guidelines     | GL   |
| 4     | llection | entry           | should define         | C-01 |
| .5.33 | is       | originally      | circumstances in      |      |
|       | Recorded | recorded as an  | which entries are     | GL   |
|       | in       | unapplied       | recorded to           | C-02 |
|       | General  | collection and  | applicable revenue    |      |
|       | Ledger   | record the      | accounts versus a     | GL   |
|       |          | collection to   | General Fund Receipt  | C-03 |
|       |          | an applicable   | posting.              |      |
|       |          | revenue         |                       | GL   |
|       |          | accounts or to  | If the agency         | C-04 |
|       |          | a miscellaneous | determines the entry  |      |
|       |          | receipts        | should be recorded to | GL   |
|       |          | account within  | applicable revenue    | C-05 |
|       |          | the general     | accounts, the entries |      |
|       |          | fund of the     | are recorded using    | GL   |
|       |          | Treasury.       | the USSGL Account     | C-06 |
|       |          |                 | Transaction Listing   |      |
|       |          |                 | logic provided in the | SM   |
|       |          |                 | TFM. Examples         | B-33 |
|       |          |                 | include, but are not  |      |
|       |          |                 | limited to, the       |      |
|       |          |                 | following transaction |      |
|       |          |                 | code from the current |      |
|       |          |                 | TFM:                  |      |
|       |          |                 |                       |      |
|       |          |                 | TFM-C640 To record    |      |
|       |          |                 | the proceeds from     |      |
|       |          |                 | commodities sold.     |      |
|       |          |                 |                       |      |
|       |          |                 | TFM-C646 To record    |      |
|       |          |                 | the sale or           |      |
|       |          |                 | disposition of assets |      |
|       |          |                 | other than personal   |      |
|       |          |                 | properties and        |      |
|       |          |                 | investments.          |      |
|       |          |                 |                       |      |
|       |          |                 | If the agency         |      |
|       |          |                 | determines the entry  |      |
|       |          |                 | should be recorded to |      |
|       |          |                 | the General Fund      |      |
|       |          |                 | Receipt Account, the  |      |
|       |          |                 | entries are recorded  |      |
|       |          |                 | using the USSGL       |      |
|       |          |                 | Account Transaction   |      |
|       |          |                 | Listing logic         |      |
|       |          |                 | provided in the TFM.  |      |
|       |          |                 | Examples include, but |      |
|       |          |                 | are not limited to,   |      |
|       |          |                 | the following         |      |
|       |          |                 | transaction code from |      |
|       |          |                 | the current TFM:      |      |
|       |          |                 |                       |      |
|       |          |                 | TFM-C141 To record    |      |
|       |          |                 | the collection of     |      |
|       |          |                 | custodial revenue     |      |
|       |          |                 | from a non-Federal    |      |
|       |          |                 | source that is        |      |
|       |          |                 | deposited to a        |      |
|       |          |                 | miscellaneous receipt |      |
|       |          |                 | account.              |      |
+-------+----------+-----------------+-----------------------+------+

## **Delinquent Debt Processes**

This section provides the process through which agencies restore
delinquent debts to current status or, if unsuccessful, maximize
collection on the agency\'s accounts. Generally, the probability of
ultimately collecting delinquent amounts becomes lower as the age of the
debt age increases; therefore, agencies debt collection strategy should
promote the resolution of delinquencies as quickly as possible.

This section represents debt collection processes available to assist
agencies to collect debts for those customer/debtor accounts that have
become delinquent and supplements the debt collection statutes and
regulations in addition to agency policies and procedures.

This section is broken down into two categories:

-   RM 4.6.1 Dunning; and

-   RM 4.6.2 Delinquent Debt Collection.

## **Dunning**

This section provides the process of communicating with customers to
ensure the collection of eligible (delinquent) accounts
receivable. Except in rare circumstances, Treasury's *Managing Federal
Receivables* provides that no more than two dunning letters should be
sent.  The additional intervals described in this process allow an
agency the option of sending more than two dunning letters, if needed.
 Dunning is integral to agencies' due diligence prior to referral to
FedDebt (FMS).

This process illustrates that installment agreements and compromise
agreements should be considered, where applicable, to a customer/debtor
response to a dunning letter. Agencies may, however, consider
installment agreements and/or compromise agreements, when appropriate,
within the first 30 days of the debt life cycle.

The following flowchart provides key steps in the processes agencies use
to perform dunning procedures on eligible customer/debtor accounts.

## RM 4.6.1 -- Dunning Flowchart {#rm-4.6.1-dunning-flowchart .unnumbered}

![](media/image34.wmf){width="6.992361111111111in"
height="5.214583333333334in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Dunning process steps are described as
follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | D        | Each accounts   | An eligible accounts  |       |
| 4.    | etermine | receivable is   | receivable is dunned  |       |
| 6.1.1 | Dunning  | regularly       | at the first          |       |
|       | Interval | evaluated to    | applicable and        |       |
|       |          | determine if it | subsequent time       |       |
|       |          | is delinquent   | intervals. Accounts   |       |
|       |          | and therefore   | are dunned at         |       |
|       |          | eligible for    | periodic intervals    |       |
|       |          | the first       | (e.g., 30-day         |       |
|       |          | dunning         | intervals).           |       |
|       |          | interval or for |                       |       |
|       |          | the appropriate | Delinquent accounts   |       |
|       |          | subsequent      | should be dunned      |       |
|       |          | interval.       | based on Federal      |       |
|       |          |                 | statutes such as the  |       |
|       |          |                 | Debt Collection Act   |       |
|       |          |                 | of 1982 and the DCIA. |       |
|       |          |                 | Federal regulations   |       |
|       |          |                 | on debt collection,   |       |
|       |          |                 | such as the Federal   |       |
|       |          |                 | Claims Collection     |       |
|       |          |                 | Standards,            |       |
|       |          |                 | government-wide debt  |       |
|       |          |                 | collection guidance   |       |
|       |          |                 | such as OMB Circular  |       |
|       |          |                 | A-129, Treasury's     |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*, and     |       |
|       |          |                 | agency policies and   |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Additional      | At Dunning intervals  | R     |
| 4.    | Ad       | charges are     | 1 and 2, only         | MC-01 |
| 6.1.2 | ditional | calculated and  | interest and          |       |
|       | Charges  | applied to the  | administrative costs  | R     |
|       | as       | account as of   | are applied. Dunning  | MC-02 |
|       | Ap       | the end date of | intervals 3 and 4     |       |
|       | plicable | the applicable  | require the           | R     |
|       |          | interval as     | application of        | MC-03 |
|       |          | follows:        | penalties in addition |       |
|       |          |                 | to interest and       |       |
|       |          | Interest and    | administrative costs. |       |
|       |          | administrative  | The specific rules    |       |
|       |          | costs are       | for the application   |       |
|       |          | calculated and  | of additional charges |       |
|       |          | applied to the  | to delinquent         |       |
|       |          | account as of   | accounts, respective  |       |
|       |          | the end date of | to the dunning        |       |
|       |          | dunning         | interval are listed   |       |
|       |          | intervals one,  | below.                |       |
|       |          | two, three, and |                       |       |
|       |          | four.           | Interest Interval 1:  |       |
|       |          |                 | Calculate and capture |       |
|       |          | Penalties are   | late payment interest |       |
|       |          | calculated and  | based on Treasury\'s  |       |
|       |          | applied to the  | Current Value of      |       |
|       |          | account as of   | Funds Rate (CVFR)     |       |
|       |          | the end date of | unless otherwise      |       |
|       |          | dunning         | specified by the      |       |
|       |          | intervals three | agency.               |       |
|       |          | and four only.  |                       |       |
|       |          |                 | Best practice for     |       |
|       |          |                 | applying interest to  |       |
|       |          |                 | delinquent debts is   |       |
|       |          |                 | to assess interest    |       |
|       |          |                 | based on the original |       |
|       |          |                 | bill date.            |       |
|       |          |                 |                       |       |
|       |          |                 | For additional        |       |
|       |          |                 | guidance on applying  |       |
|       |          |                 | interest to           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and the Debt          |       |
|       |          |                 | Collection Act of     |       |
|       |          |                 | 1982.                 |       |
|       |          |                 |                       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 1: Calculate |       |
|       |          |                 | and capture           |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | in accordance with    |       |
|       |          |                 | agency policy and     |       |
|       |          |                 | procedures.           |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of fees   |       |
|       |          |                 | incurred as a result  |       |
|       |          |                 | of debt collection    |       |
|       |          |                 | activity on           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables.* |       |
|       |          |                 |                       |       |
|       |          |                 | Interest Interval 2:  |       |
|       |          |                 | See Interest Interval |       |
|       |          |                 | 1.                    |       |
|       |          |                 |                       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 2: See       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 1.           |       |
|       |          |                 |                       |       |
|       |          |                 | Interest Interval 3:  |       |
|       |          |                 | See Interest Interval |       |
|       |          |                 | 1.                    |       |
|       |          |                 |                       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 3: See       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 1.           |       |
|       |          |                 |                       |       |
|       |          |                 | Penalty Interval 3:   |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of        |       |
|       |          |                 | penalties associated  |       |
|       |          |                 | with delinquent       |       |
|       |          |                 | debts, see            |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables.* |       |
|       |          |                 |                       |       |
|       |          |                 | Interest Interval 4:  |       |
|       |          |                 | See Interest Interval |       |
|       |          |                 | 1.                    |       |
|       |          |                 |                       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 4: See       |       |
|       |          |                 | Administrative Costs  |       |
|       |          |                 | Interval 1.           |       |
|       |          |                 |                       |       |
|       |          |                 | Penalty Interval 4:   |       |
|       |          |                 | See Penalty Interval  |       |
|       |          |                 | 3.                    |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tra      | Applicable      | Applicable interest,  | R     |
| 4.    | nsaction | information is  | administrative costs, | MC-01 |
| 6.1.3 | is       | captured to     | and penalties are     |       |
|       | Recorded | apply interest, | captured within       | R     |
|       | in       | administrative  | applicable customer   | MC-02 |
|       | General  | costs, and      | accounts and          |       |
|       | Ledger   | penalties to    | applicable entries    | R     |
|       |          | applicable      | are recorded to the   | MC-03 |
|       |          | customer        | general ledger on a   |       |
|       |          | accounts and    | monthly basis.        | R     |
|       |          | recorded to the |                       | MC-04 |
|       |          | general ledger. | The entries are       |       |
|       |          |                 | recorded using the    | G     |
|       |          |                 | USSGL Account         | LB-01 |
|       |          |                 | Transaction Listing   |       |
|       |          |                 | in the TFM. Examples  | G     |
|       |          |                 | include, but are not  | LC-01 |
|       |          |                 | limited to, the       |       |
|       |          |                 | following transaction | G     |
|       |          |                 | codes from the        | LC-02 |
|       |          |                 | current TFM:          |       |
|       |          |                 |                       | G     |
|       |          |                 | TFM C-402: To record  | LC-03 |
|       |          |                 | an accrual of revenue |       |
|       |          |                 | reported on the       | G     |
|       |          |                 | Statement of          | LC-04 |
|       |          |                 | Custodial Activity or |       |
|       |          |                 | on the custodial      | G     |
|       |          |                 | footnote that is      | LC-05 |
|       |          |                 | collected by an       |       |
|       |          |                 | agency to be          | G     |
|       |          |                 | deposited directly    | LC-06 |
|       |          |                 | into a General Fund   |       |
|       |          |                 | receipt account       | S     |
|       |          |                 |                       | MB-02 |
|       |          |                 | TFM-C435: To record   |       |
|       |          |                 | the accrual of        | S     |
|       |          |                 | interest revenue      | MB-33 |
|       |          |                 | associated with USSGL |       |
|       |          |                 | account 2985 that is  |       |
|       |          |                 | to be collected by    |       |
|       |          |                 | the Bureau of the     |       |
|       |          |                 | Public Debt and       |       |
|       |          |                 | deposited directly    |       |
|       |          |                 | into a Treasury       |       |
|       |          |                 | Account Symbol that   |       |
|       |          |                 | does not have budget  |       |
|       |          |                 | authority.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | A Dunning       | The dunning letter is | R     |
| 4.    | Dunning  | Letter,         | sent via electronic   | MC-06 |
| 6.1.4 | Letter   | tailored to the | media or in hard      |       |
|       |          | applicable      | copy, as appropriate  | R     |
|       |          | interval, is    | for the               | MC-07 |
|       |          | generated and   | customer/debtor.      |       |
|       |          | sent to the     |                       |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | A dunning       | The dunning letter    |       |
| 4.    | Letter   | letter,         | should describe the   |       |
| 6.1.5 |          | tailored to the | status of the debt as |       |
|       |          | applicable      | overdue and include:  |       |
|       |          | interval, is    | names/titles of       |       |
|       |          | the output from | debtor or responsible |       |
|       |          | Step 3.         | parties, amount owed, |       |
|       |          |                 | remittance terms and  |       |
|       |          |                 | conditions and        |       |
|       |          |                 | applicable payment    |       |
|       |          |                 | due date. Terms and   |       |
|       |          |                 | conditions must       |       |
|       |          |                 | include actions that  |       |
|       |          |                 | can be taken to       |       |
|       |          |                 | collect the           |       |
|       |          |                 | outstanding debt.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Corres   | Agencies        | A customer/debtor     |       |
| 4.    | pondence | monitor         | response to a dunning |       |
| 6.1.6 | From     | responses from  | letter may be of a    |       |
|       | C        | customers to    | financial or          |       |
|       | ustomer/ | dunning         | non-financial nature. |       |
|       | Debtor?  | letters,        | In the case of        |       |
|       |          | communications  | financial responses   |       |
|       |          | on installment  | (e.g., receiving      |       |
|       |          | agreements,     | payment, partial or   |       |
|       |          | compromise      | in full), the agency  |       |
|       |          | agreements, and | should initiate the   |       |
|       |          | other           | Collection of         |       |
|       |          | applicable      | Receipts (RM 4.4) and |       |
|       |          | communications  | Application of        |       |
|       |          | regarding debt  | Receipts (RM 4.5). In |       |
|       |          | owed the        | the case of           |       |
|       |          | Agency.         | non-financial         |       |
|       |          |                 | responses or partial  |       |
|       |          |                 | financial responses,  |       |
|       |          |                 | the agency should     |       |
|       |          |                 | proceed to execute    |       |
|       |          |                 | the minimum due       |       |
|       |          |                 | process requirements  |       |
|       |          |                 | (RM 4.6.1.9).         |       |
|       |          |                 |                       |       |
|       |          |                 | An agency must        |       |
|       |          |                 | provide appropriate   |       |
|       |          |                 | guidelines and        |       |
|       |          |                 | training to its       |       |
|       |          |                 | employees whose       |       |
|       |          |                 | duties include        |       |
|       |          |                 | contacting debtors.   |       |
|       |          |                 |                       |       |
|       |          |                 | Within 20 days after  |       |
|       |          |                 | the payment due date  |       |
|       |          |                 | or at the end of any  |       |
|       |          |                 | grace period          |       |
|       |          |                 | contractually         |       |
|       |          |                 | established, the      |       |
|       |          |                 | agency should contact |       |
|       |          |                 | the debtor, by letter |       |
|       |          |                 | or phone, in an       |       |
|       |          |                 | attempt to resolve    |       |
|       |          |                 | the nonpayment.       |       |
|       |          |                 |                       |       |
|       |          |                 | It is essential that  |       |
|       |          |                 | the agency continue   |       |
|       |          |                 | to document all       |       |
|       |          |                 | agency contacts with  |       |
|       |          |                 | a debtor and actions  |       |
|       |          |                 | taken to enforce      |       |
|       |          |                 | collection in order   |       |
|       |          |                 | to protect the        |       |
|       |          |                 | government\'s         |       |
|       |          |                 | interests. An         |       |
|       |          |                 | agency's automated    |       |
|       |          |                 | systems may be used   |       |
|       |          |                 | to document contacts  |       |
|       |          |                 | with the debtor and   |       |
|       |          |                 | other debt collection |       |
|       |          |                 | activities so long as |       |
|       |          |                 | the manner in which   |       |
|       |          |                 | the information is    |       |
|       |          |                 | retained is           |       |
|       |          |                 | sufficient for        |       |
|       |          |                 | evidentiary purposes  |       |
|       |          |                 | in a court or         |       |
|       |          |                 | administrative        |       |
|       |          |                 | proceeding.           |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should take |       |
|       |          |                 | action to recover a   |       |
|       |          |                 | debt from secondary   |       |
|       |          |                 | debtors (co-borrowers |       |
|       |          |                 | or guarantors) when   |       |
|       |          |                 | it becomes apparent   |       |
|       |          |                 | that the primary      |       |
|       |          |                 | debtor cannot or will |       |
|       |          |                 | not repay a debt. The |       |
|       |          |                 | agency should employ  |       |
|       |          |                 | the same debt         |       |
|       |          |                 | collection techniques |       |
|       |          |                 | and tools in pursuing |       |
|       |          |                 | secondary debtors as  |       |
|       |          |                 | it uses for primary   |       |
|       |          |                 | debtors. If a         |       |
|       |          |                 | delinquent debt is    |       |
|       |          |                 | referred to FMS for   |       |
|       |          |                 | cross-servicing, FMS  |       |
|       |          |                 | will attempt to       |       |
|       |          |                 | collect the debt      |       |
|       |          |                 | through the           |       |
|       |          |                 | co-borrower or        |       |
|       |          |                 | guarantor as it would |       |
|       |          |                 | with the primary      |       |
|       |          |                 | debtor, if it is      |       |
|       |          |                 | agreed to with the    |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should      |       |
|       |          |                 | consider using        |       |
|       |          |                 | digital imaging as a  |       |
|       |          |                 | way to maintain       |       |
|       |          |                 | copies of debt        |       |
|       |          |                 | collection            |       |
|       |          |                 | documentation.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Eligible | The account is  | The following         |       |
| 4.    | for      | due for dunning | business rules repeat |       |
| 6.1.7 | Ad       | at the next     | those in step RM      |       |
|       | ditional | interval if it  | 4.6.1.1:              |       |
|       | Dunning  | remains         |                       |       |
|       | I        | delinquent and  | An eligible accounts  |       |
|       | nterval? | has already     | receivable is dunned  |       |
|       |          | been dunned at  | at the first          |       |
|       |          | the previous    | applicable and        |       |
|       |          | interval.       | subsequent time       |       |
|       |          |                 | intervals. Accounts   |       |
|       |          |                 | are dunned at         |       |
|       |          |                 | periodic intervals    |       |
|       |          |                 | (e.g., 30-day         |       |
|       |          |                 | intervals).           |       |
|       |          |                 |                       |       |
|       |          |                 | Delinquent accounts   |       |
|       |          |                 | should be dunned      |       |
|       |          |                 | based on Federal      |       |
|       |          |                 | statutes such as the  |       |
|       |          |                 | Debt Collection Act   |       |
|       |          |                 | of 1982 and the DCIA, |       |
|       |          |                 | Federal regulations   |       |
|       |          |                 | on debt collection,   |       |
|       |          |                 | such as the Federal   |       |
|       |          |                 | Claims Collection     |       |
|       |          |                 | Standards,            |       |
|       |          |                 | government-wide debt  |       |
|       |          |                 | collection guidance   |       |
|       |          |                 | such as OMB Circular  |       |
|       |          |                 | A-129 and Treasury's  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*, and, in |       |
|       |          |                 | addition to, agency   |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Eligible | Customer/debtor | For guidance on       |       |
| 4.    | for      | accounts that   | referral to the FMS   |       |
| 6.1.8 | Other    | have either     | for cross-servicing   |       |
|       | Debt     | exhausted all   | and/or to the         |       |
|       | Co       | dunning         | Treasury Offset       |       |
|       | llection | intervals or    | Program (TOP), see    |       |
|       | Methods? | are not         | Treasury\'s *Managing |       |
|       |          | appropriate to  | Federal Receivables*. |       |
|       |          | execute another | The guidance provides |       |
|       |          | dunning         | debt referral         |       |
|       |          | interval are    | eligibility criteria  |       |
|       |          | evaluated for   | as well as            |       |
|       |          | other debt      | eligibility           |       |
|       |          | collection      | exceptions.           |       |
|       |          | methods         |                       |       |
|       |          | (               |                       |       |
|       |          | non-centralized |                       |       |
|       |          | administrative  |                       |       |
|       |          | offset, wage    |                       |       |
|       |          | garnishment,    |                       |       |
|       |          | referral to     |                       |       |
|       |          | applicable      |                       |       |
|       |          | legal function, |                       |       |
|       |          | and/or referral |                       |       |
|       |          | to Treasury).   |                       |       |
|       |          |                 |                       |       |
|       |          | Customer/Debtor |                       |       |
|       |          | accounts are    |                       |       |
|       |          | also evaluated  |                       |       |
|       |          | for other debt  |                       |       |
|       |          | collection      |                       |       |
|       |          | tools when the  |                       |       |
|       |          | agency          |                       |       |
|       |          | determines that |                       |       |
|       |          | install         |                       |       |
|       |          | ment/compromise |                       |       |
|       |          | agreements are  |                       |       |
|       |          | either not      |                       |       |
|       |          | appropriate or  |                       |       |
|       |          | not acceptable  |                       |       |
|       |          | to either party |                       |       |
|       |          | involved.       |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Execute  | Due process     | In the context of     |       |
| 4.    | Minimum  | requirements    | Federal debt          |       |
| 6.1.9 | Due      | are performed   | collection, the       |       |
|       | Process  | for each        | constitutional right  |       |
|       | Requ     | customer        | of "due process"      |       |
|       | irements | responding to   | requires an agency to |       |
|       |          | dunning         | provide debtors with  |       |
|       |          | letters.        | notice of, and the    |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute, a debt or    |       |
|       |          |                 | intended debt         |       |
|       |          |                 | collection action.    |       |
|       |          |                 | Notice must include   |       |
|       |          |                 | the amount and type   |       |
|       |          |                 | of debt owed, and the |       |
|       |          |                 | actions to be taken   |       |
|       |          |                 | by an agency to       |       |
|       |          |                 | collect the debt,     |       |
|       |          |                 | such as adding        |       |
|       |          |                 | interest and late     |       |
|       |          |                 | charges, offset or    |       |
|       |          |                 | garnishment, and      |       |
|       |          |                 | credit bureau         |       |
|       |          |                 | reporting.            |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should      |       |
|       |          |                 | provide a customer an |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute the debt or   |       |
|       |          |                 | the adverse           |       |
|       |          |                 | collection action to  |       |
|       |          |                 | be taken. At a        |       |
|       |          |                 | minimum, the customer |       |
|       |          |                 | should have the       |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | challenge (1) the     |       |
|       |          |                 | existence of all or   |       |
|       |          |                 | part of the debt,     |       |
|       |          |                 | and/or (2) whether    |       |
|       |          |                 | the agency has met    |       |
|       |          |                 | the statutory or      |       |
|       |          |                 | regulatory            |       |
|       |          |                 | prerequisites for     |       |
|       |          |                 | using the collection  |       |
|       |          |                 | action mentioned in   |       |
|       |          |                 | the notice.           |       |
|       |          |                 |                       |       |
|       |          |                 | The minimum "due      |       |
|       |          |                 | process" required is  |       |
|       |          |                 | generally established |       |
|       |          |                 | by the statutes that  |       |
|       |          |                 | authorize the use of  |       |
|       |          |                 | a specific debt       |       |
|       |          |                 | collection tool or by |       |
|       |          |                 | implementing          |       |
|       |          |                 | regulations.          |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance provides     |       |
|       |          |                 | more information on   |       |
|       |          |                 | the notices and       |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ins      | An official     | Whenever possible, an | R     |
| 4.6   | tallment | installment     | agency should attempt | MB-23 |
| .1.10 | Ag       | agreement is    | to collect an overdue |       |
|       | reement? | considered.     | debt in a single lump |       |
|       |          |                 | sum. In the event     |       |
|       |          |                 | that the debtor       |       |
|       |          |                 | claims financial      |       |
|       |          |                 | inability to repay    |       |
|       |          |                 | the debt in a single  |       |
|       |          |                 | lump sum, the agency  |       |
|       |          |                 | may consider          |       |
|       |          |                 | collecting the        |       |
|       |          |                 | overdue debt in       |       |
|       |          |                 | installments.         |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | determine whether the |       |
|       |          |                 | terms of a proposed   |       |
|       |          |                 | installment agreement |       |
|       |          |                 | are viable. There     |       |
|       |          |                 | must be a strong      |       |
|       |          |                 | likelihood the        |       |
|       |          |                 | customer/debtor will  |       |
|       |          |                 | comply with the terms |       |
|       |          |                 | of the agreement.     |       |
|       |          |                 |                       |       |
|       |          |                 | Typically, agencies   |       |
|       |          |                 | consider offering     |       |
|       |          |                 | installment           |       |
|       |          |                 | agreements as a tool  |       |
|       |          |                 | to resolve            |       |
|       |          |                 | outstanding debt with |       |
|       |          |                 | its customers at a    |       |
|       |          |                 | delinquent stage.     |       |
|       |          |                 | However, when         |       |
|       |          |                 | appropriate, an       |       |
|       |          |                 | agency may determine  |       |
|       |          |                 | that an installment   |       |
|       |          |                 | agreement may be      |       |
|       |          |                 | offered within the    |       |
|       |          |                 | first 30 days.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | An agency may   | A compromise may be   |       |
| 4.6   | mpromise | consider        | considered (but is    |       |
| .1.11 | Ag       | entering into a | not required) when    |       |
|       | reement? | compromise      | one or more of the    |       |
|       |          | agreement with  | following criteria    |       |
|       |          | a               | apply:                |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. | -   The debtor is     |       |
|       |          |                 |     unable to pay the |       |
|       |          |                 |     debt within a     |       |
|       |          |                 |     reasonable time   |       |
|       |          |                 |     period;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   The agency is     |       |
|       |          |                 |     unable to enforce |       |
|       |          |                 |     collection within |       |
|       |          |                 |     a reasonable time |       |
|       |          |                 |     period;           |       |
|       |          |                 |                       |       |
|       |          |                 | -   The cost of       |       |
|       |          |                 |     collection does   |       |
|       |          |                 |     not justify       |       |
|       |          |                 |     enforced          |       |
|       |          |                 |     collection of the |       |
|       |          |                 |     full amount; or   |       |
|       |          |                 |                       |       |
|       |          |                 | -   There is real     |       |
|       |          |                 |     doubt concerning  |       |
|       |          |                 |     the government\'s |       |
|       |          |                 |     ability to prove  |       |
|       |          |                 |     its case in       |       |
|       |          |                 |     court.            |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | determine whether the |       |
|       |          |                 | terms of a proposed   |       |
|       |          |                 | compromise agreement  |       |
|       |          |                 | are viable. There     |       |
|       |          |                 | must be a strong      |       |
|       |          |                 | likelihood the        |       |
|       |          |                 | customer/debtor will  |       |
|       |          |                 | comply with the terms |       |
|       |          |                 | of the agreement.     |       |
|       |          |                 |                       |       |
|       |          |                 | Using the Claims      |       |
|       |          |                 | Collection Litigation |       |
|       |          |                 | Report (CCLR), an     |       |
|       |          |                 | agency must refer     |       |
|       |          |                 | compromise proposals  |       |
|       |          |                 | where the principal   |       |
|       |          |                 | amount of the debt    |       |
|       |          |                 | exceeds \$100,000 (or |       |
|       |          |                 | such larger amount as |       |
|       |          |                 | may be determined by  |       |
|       |          |                 | the Attorney General) |       |
|       |          |                 | to the Department of  |       |
|       |          |                 | Justice (DOJ) for its |       |
|       |          |                 | concurrence in the    |       |
|       |          |                 | compromise. DOJ has   |       |
|       |          |                 | delegated to the      |       |
|       |          |                 | Financial Management  |       |
|       |          |                 | Service (FMS) the     |       |
|       |          |                 | authority to          |       |
|       |          |                 | compromise a debt     |       |
|       |          |                 | with a principal      |       |
|       |          |                 | amount of \$500,000   |       |
|       |          |                 | or less when the debt |       |
|       |          |                 | is being serviced by  |       |
|       |          |                 | FMS in its            |       |
|       |          |                 | cross-servicing       |       |
|       |          |                 | program.              |       |
|       |          |                 |                       |       |
|       |          |                 | The Federal Claims    |       |
|       |          |                 | Collections Standards |       |
|       |          |                 | state that laws and   |       |
|       |          |                 | regulations that are  |       |
|       |          |                 | specifically          |       |
|       |          |                 | applicable to claims  |       |
|       |          |                 | collection activities |       |
|       |          |                 | of a particular       |       |
|       |          |                 | agency generally take |       |
|       |          |                 | precedence over       |       |
|       |          |                 | government-wide       |       |
|       |          |                 | claims collection     |       |
|       |          |                 | standards.            |       |
|       |          |                 |                       |       |
|       |          |                 | Typically, agencies   |       |
|       |          |                 | consider offering     |       |
|       |          |                 | compromise agreements |       |
|       |          |                 | as a tool to resolve  |       |
|       |          |                 | outstanding debt with |       |
|       |          |                 | their customers at a  |       |
|       |          |                 | delinquent stage.     |       |
|       |          |                 | However, when         |       |
|       |          |                 | appropriate, an       |       |
|       |          |                 | agency may determine  |       |
|       |          |                 | that a compromise     |       |
|       |          |                 | agreement may be      |       |
|       |          |                 | offered within the    |       |
|       |          |                 | first 30 days.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | An agency       | An agency should only |       |
| 4.6   | mpromise | performs        | compromise a debt     |       |
| .1.12 | A        | procedures to   | when it has exhausted |       |
|       | greement | implement a     | all other debt        |       |
|       |          | compromise      | collection tools and  |       |
|       |          | agreement, if   | further pursuit of    |       |
|       |          | applicable.     | collection is not     |       |
|       |          |                 | cost effective.       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Delinquent Debt Collection** 

This section provides debt collection tools available to assist agencies
(in addition to those provided in RM 4.6.1, Installment Plans and
Compromise Agreements) to collect debts for those customer/debtor
accounts that have become delinquent.

Delinquent debt collection is the process through which agencies restore
the delinquent debts to current status or, if unsuccessful, maximize
collection on the agency\'s accounts. Typically, this process is
executed relative to those accounts that are identified as delinquent
and subsequent to the exhaustion of the dunning process. Agencies may,
however, consider non-centralized administrative offset, wage
garnishment, or referral to applicable legal function to facilitate
collection on a debt, within the first 30 days of the debt life cycle.

The following flowchart provides key steps in the processes agencies
perform to collect debt on delinquent customer/debtor accounts and/or
restore delinquent debts to current status.

## RM 4.6.2 -- Delinquent Debt Collection {#rm-4.6.2-delinquent-debt-collection .unnumbered}

![](media/image35.wmf){width="6.577083333333333in"
height="5.024305555555555in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Delinquent Debt Collection process steps are
described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Update   | Accounts        | Accounts receivable   | R     |
| 4.    | Accounts | receivable      | records, balances,    | MB-02 |
| 6.2.1 | Re       | balances and    | and status are        |       |
|       | ceivable | status are      | updated based on      | R     |
|       | Balance  | updated based   | various events.       | MC-01 |
|       | s/Status | on inputs       |                       |       |
|       |          | originating     | Balances change due   | R     |
|       |          | either          | to:                   | MC-02 |
|       |          | internally or   |                       |       |
|       |          | externally to   | -   Assessments of    | R     |
|       |          | the agency.     |     late payment      | MC-03 |
|       |          |                 |     interest;         |       |
|       |          |                 |                       | R     |
|       |          |                 | -   Assessments of    | MC-04 |
|       |          |                 |     penalties;        |       |
|       |          |                 |                       | R     |
|       |          |                 | -   Assessments of    | MC-05 |
|       |          |                 |     Administrative    |       |
|       |          |                 |     costs;            | R     |
|       |          |                 |                       | MC-16 |
|       |          |                 | -   Application of    |       |
|       |          |                 |     collections on    | R     |
|       |          |                 |     delinquent debts; | MC-18 |
|       |          |                 |     and               |       |
|       |          |                 |                       | R     |
|       |          |                 | -   Adjustments due   | MD-01 |
|       |          |                 |     to delinquent     |       |
|       |          |                 |     debts.            | R     |
|       |          |                 |                       | MD-02 |
|       |          |                 | Statuses change due   |       |
|       |          |                 | to:                   | R     |
|       |          |                 |                       | MD-04 |
|       |          |                 | -   Dunning referral  |       |
|       |          |                 |     date;             |       |
|       |          |                 |                       |       |
|       |          |                 | -   The passage of    |       |
|       |          |                 |     time (from        |       |
|       |          |                 |     current to        |       |
|       |          |                 |     delinquent); and  |       |
|       |          |                 |                       |       |
|       |          |                 | -   Events that       |       |
|       |          |                 |     change a          |       |
|       |          |                 |     delinquency       |       |
|       |          |                 |     status (e.g.,     |       |
|       |          |                 |     bankruptcy,       |       |
|       |          |                 |     referral, etc.).  |       |
|       |          |                 |                       |       |
|       |          |                 | Capture applicable    |       |
|       |          |                 | information within    |       |
|       |          |                 | the subsidiary ledger |       |
|       |          |                 | and record applicable |       |
|       |          |                 | transactions to the   |       |
|       |          |                 | general ledger to     |       |
|       |          |                 | reflect the change in |       |
|       |          |                 | accounts receivable   |       |
|       |          |                 | balances/status.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Non-Cen  | An agency       | An agency may request |       |
| 4.    | tralized | considers       | that another agency   |       |
| 6.2.2 | Admini   | whether to      | offset a Federal      |       |
|       | strative | perform         | payment to satisfy a  |       |
|       | Offset?  | non-centralized | debt. This type of    |       |
|       |          | administrative  | offset is known as    |       |
|       |          | offset          | "non-centralized      |       |
|       |          | procedures.     | administrative        |       |
|       |          |                 | offset." Another type |       |
|       |          |                 | of non-centralized    |       |
|       |          |                 | administrative offset |       |
|       |          |                 | occurs when the       |       |
|       |          |                 | payment agency is the |       |
|       |          |                 | same as the creditor  |       |
|       |          |                 | agency, referred to   |       |
|       |          |                 | as "internal offset." |       |
|       |          |                 | Non-centralized       |       |
|       |          |                 | offset can be used    |       |
|       |          |                 | for internal offset,  |       |
|       |          |                 | or when the payment   |       |
|       |          |                 | to be offset is not   |       |
|       |          |                 | processed through the |       |
|       |          |                 | TOP or the creditor   |       |
|       |          |                 | agency is unable to   |       |
|       |          |                 | meet the 60-day       |       |
|       |          |                 | notice requirement    |       |
|       |          |                 | for debt submission   |       |
|       |          |                 | to TOP but is         |       |
|       |          |                 | otherwise able to     |       |
|       |          |                 | comply with the due   |       |
|       |          |                 | process prerequisites |       |
|       |          |                 | for offset.           |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies may consider |       |
|       |          |                 | Non-Centralized       |       |
|       |          |                 | Administrative Offset |       |
|       |          |                 | within the first 30   |       |
|       |          |                 | days of the debt life |       |
|       |          |                 | cycle, when           |       |
|       |          |                 | appropriate.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | I        | An agency       | Examples of           |       |
| 4.    | mplement | performs        | circumstances for     |       |
| 6.2.3 | Non-Cen  | procedures to   | which non-centralized |       |
|       | tralized | implement a     | offset would be       |       |
|       | Admini   | non-centralized | appropriate include   |       |
|       | strative | administrative  | internal offset and   |       |
|       | Offset   | offset as       | the offset of         |       |
|       |          | applicable.     | contractor payments   |       |
|       |          |                 | when the creditor     |       |
|       |          |                 | agency is the same as |       |
|       |          |                 | the payment agency;   |       |
|       |          |                 | collection of travel  |       |
|       |          |                 | advances and training |       |
|       |          |                 | expenses through a    |       |
|       |          |                 | Federal employee's    |       |
|       |          |                 | pay, retirement or    |       |
|       |          |                 | other amounts due;    |       |
|       |          |                 | offset of future      |       |
|       |          |                 | retirement pay; and   |       |
|       |          |                 | offset of Federal     |       |
|       |          |                 | salary pay when       |       |
|       |          |                 | offset is not         |       |
|       |          |                 | available through     |       |
|       |          |                 | TOP.                  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Non-Cen  | An official     |                       |       |
| 4.    | tralized | non-centralized |                       |       |
| 6.2.4 | Admini   | administrative  |                       |       |
|       | strative | offset is       |                       |       |
|       | Offset   | documented.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Wage     | An agency       | The DCIA authorizes   |       |
| 4.    | Garn     | considers       | an Agency to collect  |       |
| 6.2.5 | ishment? | whether to      | a delinquent debt by  |       |
|       |          | perform         | administrative        |       |
|       |          | administrative  | garnishment of the    |       |
|       |          | wage            | pay of a delinquent   |       |
|       |          | garnishment     | debtor who is         |       |
|       |          | procedures.     | employed by any       |       |
|       |          |                 | organization,         |       |
|       |          |                 | business, state or    |       |
|       |          |                 | local government, or  |       |
|       |          |                 | other entity other    |       |
|       |          |                 | than a Federal        |       |
|       |          |                 | agency. No court      |       |
|       |          |                 | order is required.    |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies may consider |       |
|       |          |                 | Wage Garnishment      |       |
|       |          |                 | within the first 30   |       |
|       |          |                 | days of the debt life |       |
|       |          |                 | cycle, when           |       |
|       |          |                 | appropriate.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | I        | An agency       | For guidance on       |       |
| 4.    | mplement | performs        | administrative wage   |       |
| 6.2.6 | Wage     | procedures to   | garnishment           |       |
|       | Gar      | implement wage  | implementation        |       |
|       | nishment | garnishment, as | procedures or         |       |
|       |          | applicable.     | administrative wage   |       |
|       |          |                 | garnishment itself,   |       |
|       |          |                 | refer to Treasury's   |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables,* which   |       |
|       |          |                 | provides information  |       |
|       |          |                 | on the notices and    |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
|       |          |                 | See also business     |       |
|       |          |                 | rule for 4.2.15.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Wage     | An official     | For guidance related  |       |
| 4.    | Gar      | wage            | to the procedures     |       |
| 6.2.7 | nishment | garnishment is  | surrounding the       |       |
|       |          | documented.     | official wage         |       |
|       |          |                 | garnishment           |       |
|       |          |                 | documentation, refer  |       |
|       |          |                 | to FMS wage           |       |
|       |          |                 | garnishment           |       |
|       |          |                 | regulations and       |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables,* |       |
|       |          |                 | which provides        |       |
|       |          |                 | information on the    |       |
|       |          |                 | notices and           |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notify   | An agency       | Based on agency       |       |
| 4.    | Legal    | determines      | polices and           |       |
| 6.2.8 | F        | whether the     | procedures, debt and  |       |
|       | unction? | applicable      | supporting            |       |
|       |          | legal functions | documentation is      |       |
|       |          | should be       | forwarded to the      |       |
|       |          | notified to     | applicable legal      |       |
|       |          | evaluate or act | function, either      |       |
|       |          | on applicable   | intra-agency or       |       |
|       |          | legal issues.   | external to the       |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Unless an agency has  |       |
|       |          |                 | specific statutory    |       |
|       |          |                 | authority to litigate |       |
|       |          |                 | its own debts, it     |       |
|       |          |                 | must refer debts to   |       |
|       |          |                 | DOJ for litigation,   |       |
|       |          |                 | including bankruptcy  |       |
|       |          |                 | litigation. For       |       |
|       |          |                 | additional guidance   |       |
|       |          |                 | on referring debts to |       |
|       |          |                 | DOJ for litigation,   |       |
|       |          |                 | refer to Treasury's   |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*. This    |       |
|       |          |                 | guidance also         |       |
|       |          |                 | includes criteria     |       |
|       |          |                 | that restrict an      |       |
|       |          |                 | agency from referring |       |
|       |          |                 | debt to DOJ for       |       |
|       |          |                 | litigation.           |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies may consider |       |
|       |          |                 | the advice of         |       |
|       |          |                 | applicable legal      |       |
|       |          |                 | counsel (internal or  |       |
|       |          |                 | DOJ) within the first |       |
|       |          |                 | 30 days of the debt   |       |
|       |          |                 | life cycle, when      |       |
|       |          |                 | appropriate.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notify   | An agency       | When referring a debt |       |
| 4.    | Legal    | performs        | to DOJ for            |       |
| 6.2.9 | Function | procedures to   | litigation, an agency |       |
|       |          | notify the      | must provide a fully  |       |
|       |          | applicable      | completed Claims      |       |
|       |          | legal functions | Collection Litigation |       |
|       |          | (internal or    | Report (CCLR). For    |       |
|       |          | external to the | required information  |       |
|       |          | agency, as      | to be included on the |       |
|       |          | applicable) and | CCLR, refer to        |       |
|       |          | provide         | Treasury's *Managing  |       |
|       |          | applicable      | Federal Receivables.* |       |
|       |          | facts and       |                       |       |
|       |          | documentation.  |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Noti     | An official     | In the case of debt   |       |
| 4.6   | fication | notification to | being referred to DOJ |       |
| .2.10 | to Legal | the legal       | for litigation, a     |       |
|       | Function | function is     | completed CCLR with   |       |
|       |          | made which      | supporting            |       |
|       |          | includes        | documentation is      |       |
|       |          | documentation   | generated by the      |       |
|       |          | of the issue    | agency.               |       |
|       |          | with the        |                       |       |
|       |          | applicable      |                       |       |
|       |          | accounts        |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Refer    | The Agency      | For guidance on       |       |
| 4.6   | for      | determines      | referral to the FMS   |       |
| .2.11 | Col      | whether to      | for cross-servicing   |       |
|       | lection? | refer debt to   | and/or to the         |       |
|       |          | Treasury FMS    | Treasury Offset       |       |
|       |          | for collection. | Program (TOP), see    |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
|       |          |                 | The guidance provides |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as            |       |
|       |          |                 | eligibility           |       |
|       |          |                 | exceptions.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Refer    | The Agency      | For guidance on       | R     |
| 4.6   | for      | refers the debt | referral to the FMS   | MC-15 |
| .2.12 | Co       | to Treasury     | for cross-servicing   |       |
|       | llection | FMS.            | and/or to TOP, see    |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and/or the DCIA. The  |       |
|       |          |                 | guidance provides     |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as exceptions |       |
|       |          |                 | for eligibility.      |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | generate a delinquent |       |
|       |          |                 | debt referral file    |       |
|       |          |                 | for transmission to   |       |
|       |          |                 | Treasury in           |       |
|       |          |                 | accordance with the   |       |
|       |          |                 | DCIA. An agency may   |       |
|       |          |                 | refer delinquent      |       |
|       |          |                 | debts to FMS either   |       |
|       |          |                 | through the FedDebt   |       |
|       |          |                 | on-line client        |       |
|       |          |                 | software or through a |       |
|       |          |                 | batch file.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Referral | The agency      |                       |       |
| 4.6   | of Debt  | generates       |                       |       |
| .2.13 |          | documentation   |                       |       |
|       |          | supporting the  |                       |       |
|       |          | debt being      |                       |       |
|       |          | transferred to  |                       |       |
|       |          | Treasury FMS.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Eligible | The agency      | Debts that are        |       |
| 4.6   | for      | determines if   | determined to be      |       |
| .2.14 | W        | the debt is     | uncollectible on the  |       |
|       | rite-Off | uncollectible.  | agency's financial    |       |
|       |          |                 | and management        |       |
|       |          | If the debt is  | reports are           |       |
|       |          | identified as   | determined to be      |       |
|       |          | uncollectible,  | uncollectible and     |       |
|       |          | the agency      | should be written     |       |
|       |          | should          | off.                  |       |
|       |          | write-off the   |                       |       |
|       |          | debt.           |                       |       |
|       |          |                 |                       |       |
|       |          | If the debt is  |                       |       |
|       |          | not identified  |                       |       |
|       |          | as              |                       |       |
|       |          | uncollectible,  |                       |       |
|       |          | the agency      |                       |       |
|       |          | evaluates the   |                       |       |
|       |          | need for an     |                       |       |
|       |          | adjustment.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ad       | Based on review |                       |       |
| 4.6   | justment | of an accounts  |                       |       |
| .2.15 | to       | receivable, the |                       |       |
|       | Account  | agency          |                       |       |
|       | R        | determines      |                       |       |
|       | equired? | whether an      |                       |       |
|       |          | adjustment to   |                       |       |
|       |          | the             |                       |       |
|       |          | balance/status  |                       |       |
|       |          | of the account  |                       |       |
|       |          | is required.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Prepare  | As applicable,  | Proper segregation of |       |
| 4.6   | Ad       | the agency      | duties must be        |       |
| .2.16 | justment | prepares an     | followed when         |       |
|       | to       | adjustment to   | adjusting an accounts |       |
|       | Account  | the             | receivable balance.   |       |
|       |          | balance/status  |                       |       |
|       |          | of the accounts |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+

##  **Allowance for Loss on Accounts Receivable**

This section provides the process an agency uses to determine and record
an allowance for loss on accounts receivable in the general ledger. The
agency should establish the amounts in the allowance accounts based on
portfolio condition and composition, historical experiences with losses,
and actual write-offs taken in the preceding year or groups of years.
The calculation can be performed at agency discretion; however, in
practice, the calculation is generally only performed for financial
statement preparation.

The following flowchart provides key steps in the processes agencies use
to determine and record an allowance for loss on accounts receivable.
The allowance for loss on accounts receivable process includes the aging
of accounts receivables to determine the period of time outstanding for
all receivable balances, the calculation of the allowance for loss on
accounts receivable based on agency-defined criteria, review and
approval of the calculated allowance, and subsequent entries made to the
general ledger.

## RM 4.7 -- Allowance for Loss on Accounts Receivable Flowchart {#rm-4.7-allowance-for-loss-on-accounts-receivable-flowchart .unnumbered}

![](media/image36.wmf){width="6.990277777777778in"
height="3.670138888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Allowance for Loss on Accounts Receivable
process steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Aged     | The initial     | Agencies shall age    |       |
| 4.7.1 | Accounts | input to the    | receivables balances  |       |
|       | Re       | process is an   | on a periodic basis   |       |
|       | ceivable | aged summary of | by calculating the    |       |
|       | Balance  | balances of     | length of time        |       |
|       |          | accounts        | accounts have been    |       |
|       |          | receivable      | outstanding since the |       |
|       |          | outstanding for | due dates.            |       |
|       |          | designated      |                       |       |
|       |          | periods of      |                       |       |
|       |          | time.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | An estimate is  | As stated in          | R     |
| 4.7.2 | alculate | made of         | Statements of Federal | MC-17 |
|       | A        | receivables     | Financial Accounting  |       |
|       | llowance | that are        | Standards (SFFAS) No. |       |
|       | for Loss | expected to be  | 1, losses should be   |       |
|       | on       | uncollectible.  | recognized when there |       |
|       | Accounts |                 | is more than a 50%    |       |
|       | Re       |                 | chance of loss        |       |
|       | ceivable |                 | occurrence. A         |       |
|       |          |                 | systematic            |       |
|       |          |                 | methodology should be |       |
|       |          |                 | used to measure       |       |
|       |          |                 | losses based on       |       |
|       |          |                 | analysis of both      |       |
|       |          |                 | individual accounts   |       |
|       |          |                 | and a group of        |       |
|       |          |                 | accounts as a whole.  |       |
|       |          |                 | Specific customer     |       |
|       |          |                 | receivable balances   |       |
|       |          |                 | representing          |       |
|       |          |                 | significant amounts   |       |
|       |          |                 | should be             |       |
|       |          |                 | individually          |       |
|       |          |                 | analyzed. Group       |       |
|       |          |                 | analysis should be    |       |
|       |          |                 | based on groups       |       |
|       |          |                 | separated into        |       |
|       |          |                 | homogeneous accounts  |       |
|       |          |                 | with similar risk     |       |
|       |          |                 | characteristics.      |       |
|       |          |                 |                       |       |
|       |          |                 | The allowance for     |       |
|       |          |                 | loss is calculated    |       |
|       |          |                 | periodically for      |       |
|       |          |                 | accounting purposes   |       |
|       |          |                 | and financial         |       |
|       |          |                 | statement reporting.  |       |
|       |          |                 | A significant         |       |
|       |          |                 | fluctuation in the    |       |
|       |          |                 | allowance             |       |
|       |          |                 | calculation, from     |       |
|       |          |                 | period to period, may |       |
|       |          |                 | impact accounting     |       |
|       |          |                 | operations.           |       |
|       |          |                 |                       |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance states that  |       |
|       |          |                 | an agency should      |       |
|       |          |                 | establish amounts in  |       |
|       |          |                 | the allowance         |       |
|       |          |                 | accounts based on any |       |
|       |          |                 | one of the following: |       |
|       |          |                 |                       |       |
|       |          |                 | -   Portfolio         |       |
|       |          |                 |     condition and     |       |
|       |          |                 |     composition;      |       |
|       |          |                 |                       |       |
|       |          |                 | -   Historical        |       |
|       |          |                 |     experience with   |       |
|       |          |                 |     losses; or        |       |
|       |          |                 |                       |       |
|       |          |                 | ```{=html}            |       |
|       |          |                 | <!-- -->              |       |
|       |          |                 | ```                   |       |
|       |          |                 | -   Actual write-offs |       |
|       |          |                 |     taken in the      |       |
|       |          |                 |     preceding year or |       |
|       |          |                 |     groups of years.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Review   | Agency          | The calculated        |       |
| 4.7.3 | Ca       | designated      | allowance should be   |       |
|       | lculated | personnel       | reviewed by           |       |
|       | A        | review the      | designated personnel  |       |
|       | llowance | calculated      | with knowledge of the |       |
|       |          | allowance.      | outstanding accounts  |       |
|       |          |                 | receivable balances.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ca       | Agency          | The calculated        |       |
| 4.7.4 | lculated | designated      | allowance should be   |       |
|       | A        | personnel       | approved by           |       |
|       | llowance | approve or      | designated personnel, |       |
|       | A        | disapprove the  | other than personnel  |       |
|       | pproved? | calculated      | calculating the       |       |
|       |          | allowance.      | proposed allowance,   |       |
|       |          |                 | with knowledge of the |       |
|       |          |                 | outstanding accounts  |       |
|       |          |                 | receivable balances.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolve  | Issues          |                       |       |
| 4.7.5 | Issue    | identified by   |                       |       |
|       |          | supervisory     |                       |       |
|       |          | personnel are   |                       |       |
|       |          | addressed and   |                       |       |
|       |          | applicable      |                       |       |
|       |          | action(s) taken |                       |       |
|       |          | to recalculate  |                       |       |
|       |          | the estimate of |                       |       |
|       |          | allowance for   |                       |       |
|       |          | loss on         |                       |       |
|       |          | accounts        |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | A        | Applicable      | The entries are       | G     |
| 4.7.6 | llowance | entries are     | recorded using the    | LC-01 |
|       | is       | recorded to the | USSGL Account         |       |
|       | Recorded | allowance for   | Transaction Listing   | G     |
|       | in       | loss on         | provided in the TFM.  | LC-02 |
|       | General  | accounts        | Examples include, but |       |
|       | Ledger   | receivable      | are not limited to,   | G     |
|       |          | account within  | the following         | LC-03 |
|       |          | the general     | transaction codes     |       |
|       |          | ledger.         | from the current TFM: | G     |
|       |          |                 |                       | LC-04 |
|       |          |                 | TFM-D402: To record   |       |
|       |          |                 | an allowance for a    | G     |
|       |          |                 | reduction in revenue  | LC-05 |
|       |          |                 | from non-Federal      |       |
|       |          |                 | sources when          | G     |
|       |          |                 | realization is not    | LC-06 |
|       |          |                 | probable (less likely |       |
|       |          |                 | than not).            | R     |
|       |          |                 |                       | MC-17 |
|       |          |                 | TFM-D404: To record   |       |
|       |          |                 | the estimated         | S     |
|       |          |                 | allowance for bad     | MB-02 |
|       |          |                 | debts related to      |       |
|       |          |                 | non-credit-reform     | S     |
|       |          |                 | receivables.          | MB-33 |
+-------+----------+-----------------+-----------------------+-------+

## **Write-off of Accounts Receivable**

This section provides the process to determine and report
debts/receivables as having no value on the agency's financial and
management reports. Per OMB Circular No. A-129, write-offs must further
be classified into two separate and distinct categories: currently not
collectible (CNC) or close-out. Currently not collectible debts are
those which the agency intends to continue cost effective debt
collection action. Typically, the decision to classify written-off debt
as currently not collectible is supported by circumstances that warrant
the temporary suspension of collection activity when the agency plans to
resume collection action at a future time triggered by an improvement in
the debtor's financial position. Closed-out debts are those that are
prohibited from further debt collection action or the agency does not
plan to take any further collection action on the debt. The following
organizations should follow IRS 1099-C guidelines and agency policy
regarding the issuance of a 1099-C when closing out debts: a department,
a court or administrative court, an agency instrumentality involved in
the executive, judicial, or legislative branches of the government,
including government corporations.

The following flowchart provides key steps in the process for writing
off accounts receivable. Included are steps to analyze debt for
write-off, record general ledger entries, classify debt according to
collection status, obtain required approval for actions, close out debt,
and notify the IRS about canceled debt, as applicable.

## RM 4.8 -- Write-off of Accounts Receivable Flowchart {#rm-4.8-write-off-of-accounts-receivable-flowchart .unnumbered}

![](media/image37.wmf){width="6.873611111111111in"
height="4.6305555555555555in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Write-off of Accounts Receivable process
steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Analyze  | Agency          | Agencies must         | R     |
| 4.8.1 | Debt for | personnel       | identify receivables  | MC-10 |
|       | W        | review each     | that may be eligible  |       |
|       | rite-off | debt eligible   | for write-off.        |       |
|       |          | for write-off   | Selection criteria    |       |
|       |          | to determine    | include:              |       |
|       |          | whether it      |                       |       |
|       |          | should be       | -   Delinquent debt   |       |
|       |          | written off and |     age category;     |       |
|       |          | consider        |                       |       |
|       |          | whether it      | -   Customer type;    |       |
|       |          | should be       |     and               |       |
|       |          | classified as   |                       |       |
|       |          | currently not   | -   Receivable type.  |       |
|       |          | collectible or  |                       |       |
|       |          | close-out.      | As described in       |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance and OMB      |       |
|       |          |                 | Circular A-129, each  |       |
|       |          |                 | delinquent debt due   |       |
|       |          |                 | to the government     |       |
|       |          |                 | must be reviewed to   |       |
|       |          |                 | determine whether it  |       |
|       |          |                 | has value for         |       |
|       |          |                 | accounting purposes.  |       |
|       |          |                 |                       |       |
|       |          |                 | Guidance also states  |       |
|       |          |                 | that generally,       |       |
|       |          |                 | write-off is          |       |
|       |          |                 | mandatory for debts   |       |
|       |          |                 | delinquent more than  |       |
|       |          |                 | two years, unless     |       |
|       |          |                 | documented and        |       |
|       |          |                 | justified to OMB in   |       |
|       |          |                 | consultation with     |       |
|       |          |                 | Treasury. In those    |       |
|       |          |                 | cases where material  |       |
|       |          |                 | collections can be    |       |
|       |          |                 | documented to occur   |       |
|       |          |                 | after two years, debt |       |
|       |          |                 | cannot be written off |       |
|       |          |                 | until the estimated   |       |
|       |          |                 | collections become    |       |
|       |          |                 | immaterial.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt to  | Based on        |                       |       |
| 4.8.2 | Be       | analysis        |                       |       |
|       | Written  | performed, a    |                       |       |
|       | Off?     | decision is     |                       |       |
|       |          | made whether to |                       |       |
|       |          | write off debt. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | The      | Appropriate     | Agencies should       |       |
| 4.8.3 | W        | personnel       | design and implement  |       |
|       | rite-off | within the      | internal control      |       |
|       | of Debt  | agency reviews  | procedures for review |       |
|       | Is       | and approves    | and approval of       |       |
|       | Reviewed | the write-off   | decisions to          |       |
|       | and      | of the debt.    | write-off debt        |       |
|       | A        |                 | performed by          |       |
|       | pproved. |                 | designated personnel. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | W        | The debt is     | Recording the         |       |
| 4.8.4 | rite-off | written off for | write-off of          |       |
|       | Debt     | accounting      | receivables includes  |       |
|       |          | purposes.       | the reversal of       |       |
|       |          |                 | applicable interest,  |       |
|       |          |                 | penalties, and        |       |
|       |          |                 | administrative        |       |
|       |          |                 | charges.              |       |
|       |          |                 |                       |       |
|       |          |                 | Writing off a debt    |       |
|       |          |                 | does not necessarily  |       |
|       |          |                 | mean the debt is      |       |
|       |          |                 | closed out. Closed    |       |
|       |          |                 | out debts are subject |       |
|       |          |                 | to collection         |       |
|       |          |                 | limitations where as  |       |
|       |          |                 | accounts that have    |       |
|       |          |                 | been written off are  |       |
|       |          |                 | not subject to those  |       |
|       |          |                 | same limitations.     |       |
|       |          |                 |                       |       |
|       |          |                 | In compromising a     |       |
|       |          |                 | debt, the agency must |       |
|       |          |                 | write off as          |       |
|       |          |                 | close-out the amount  |       |
|       |          |                 | of the debt forgiven  |       |
|       |          |                 | by compromise.\       |       |
|       |          |                 | \                     |       |
|       |          |                 | The creditor agency   |       |
|       |          |                 | must maintain its     |       |
|       |          |                 | original debtor       |       |
|       |          |                 | records and remains   |       |
|       |          |                 | responsible for any   |       |
|       |          |                 | and all financial     |       |
|       |          |                 | reporting associated  |       |
|       |          |                 | with the debt.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Record   | The write-off   | The entries are       | R     |
| 4.8.5 | the      | of a customer   | recorded using the    | MC-11 |
|       | W        | account is      | USSGL Account         |       |
|       | rite-off | captured in the | Transaction Listing   | G     |
|       | in       | subsidiary      | provided in the TFM.  | LC-01 |
|       | General  | ledger and      | Examples include, but |       |
|       | Ledger   | entries are     | are not limited to,   | G     |
|       |          | recorded to     | the following         | LC-02 |
|       |          | applicable      | transaction codes     |       |
|       |          | accounts in the | from the current TFM: | G     |
|       |          | general ledger  |                       | LC-03 |
|       |          | to reflect the  | TFM-D406: To record   |       |
|       |          | write-off of    | the write-off of      | G     |
|       |          | debt including  | penalties, fines, and | LC-04 |
|       |          | interest,       | administrative fees   |       |
|       |          | penalties, and  | receivable.           | G     |
|       |          | administrative  |                       | LC-05 |
|       |          | charges, if     | TFM-D408: To record   |       |
|       |          | applicable.     | the write-off of      | G     |
|       |          |                 | accounts receivable.  | LC-06 |
|       |          |                 |                       |       |
|       |          |                 | TFM-D416: To record   | S     |
|       |          |                 | the write-off of      | MB-02 |
|       |          |                 | interest receivable.  |       |
|       |          |                 |                       | S     |
|       |          |                 |                       | MB-33 |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Classify | The agency      | Treasury\'s *Managing |       |
| 4.8.6 | Debt as  | performs        | Federal Receivables*  |       |
|       | C        | analysis to     | guidance states that  |       |
|       | urrently | determine       | cost effective        |       |
|       | not      | whether to      | collection efforts    |       |
|       | Coll     | classify the    | should continue if an |       |
|       | ectible? | debt as         | agency determines     |       |
|       |          | currently not   | that continued        |       |
|       |          | collectible or  | collection efforts    |       |
|       |          | close out after | have some potential   |       |
|       |          | write-off.      | to result in          |       |
|       |          |                 | collections. Specific |       |
|       |          |                 | criteria are cited to |       |
|       |          |                 | be taken into account |       |
|       |          |                 | when deciding whether |       |
|       |          |                 | to terminate          |       |
|       |          |                 | collection efforts.   |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies may use      |       |
|       |          |                 | discretion in         |       |
|       |          |                 | determining threshold |       |
|       |          |                 | amounts below which   |       |
|       |          |                 | it is not considered  |       |
|       |          |                 | cost effective to     |       |
|       |          |                 | continue collection   |       |
|       |          |                 | efforts.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt is  | Debt is         | According to          | R     |
| 4.8.7 | Cl       | classified as   | Treasury\'s *Managing | MC-12 |
|       | assified | currently not   | Federal Receivables*  |       |
|       | as       | collectible if  | guidance, if the      |       |
|       | C        | collection      | agency determines     |       |
|       | urrently | efforts are to  | cost effective        |       |
|       | Not      | continue after  | collection efforts    |       |
|       | Coll     | write-off.      | should continue after |       |
|       | ectible. |                 | write-off, the debt   |       |
|       |          |                 | is classified as      |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible.          |       |
|       |          |                 |                       |       |
|       |          |                 | For Treasury Report   |       |
|       |          |                 | on Receivables (TROR) |       |
|       |          |                 | and other internal    |       |
|       |          |                 | control purposes      |       |
|       |          |                 | agencies need to      |       |
|       |          |                 | continue to manage    |       |
|       |          |                 | receivables in        |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible status.   |       |
|       |          |                 | For determination of  |       |
|       |          |                 | whether or not to     |       |
|       |          |                 | process an 8000       |       |
|       |          |                 | series memo account   |       |
|       |          |                 | posting at the time   |       |
|       |          |                 | of classification of  |       |
|       |          |                 | written off debts as  |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible, agencies |       |
|       |          |                 | should refer to       |       |
|       |          |                 | internal and/or       |       |
|       |          |                 | Treasury procedures.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Continue | The agency      | See Treasury's        |       |
| 4.8.8 | Passive  | decides whether | *Managing Federal     |       |
|       | Co       | to continue     | Receivables* for      |       |
|       | llection | passive         | guidance on           |       |
|       | Efforts? | collection      | circumstances when    |       |
|       |          | efforts on the  | temporary suspension  |       |
|       |          | delinquent      | of active collection  |       |
|       |          | debt.           | efforts is            |       |
|       |          |                 | appropriate.          |       |
|       |          | If the agency   |                       |       |
|       |          | determines that |                       |       |
|       |          | temporary       |                       |       |
|       |          | suspension of   |                       |       |
|       |          | collection      |                       |       |
|       |          | activity on the |                       |       |
|       |          | debt is         |                       |       |
|       |          | appropriate,    |                       |       |
|       |          | active          |                       |       |
|       |          | collection      |                       |       |
|       |          | efforts must    |                       |       |
|       |          | cease.          |                       |       |
|       |          |                 |                       |       |
|       |          | If the agency   |                       |       |
|       |          | determines that |                       |       |
|       |          | temporary       |                       |       |
|       |          | suspension of   |                       |       |
|       |          | collection      |                       |       |
|       |          | activity is not |                       |       |
|       |          | appropriate,    |                       |       |
|       |          | active          |                       |       |
|       |          | collection      |                       |       |
|       |          | efforts should  |                       |       |
|       |          | resume.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Continue | Passive         | Agencies must         | R     |
| 4.8.9 | Passive  | collection      | maintain data on      | MC-13 |
|       | Co       | efforts         | receivables that have |       |
|       | llection | continue once   | been written off but  |       |
|       | Efforts  | debt is         | not closed out.       |       |
|       |          | classified as   |                       |       |
|       |          | currently not   | Cost effective        |       |
|       |          | collectible.    | collection activities |       |
|       |          |                 | may continue for debt |       |
|       |          |                 | classified as         |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible in        |       |
|       |          |                 | temporarily suspended |       |
|       |          |                 | status, until a       |       |
|       |          |                 | change in             |       |
|       |          |                 | circumstance warrants |       |
|       |          |                 | the removal of the    |       |
|       |          |                 | suspended status      |       |
|       |          |                 | where active          |       |
|       |          |                 | collection efforts    |       |
|       |          |                 | would subsequently    |       |
|       |          |                 | resume.               |       |
|       |          |                 |                       |       |
|       |          |                 | Collection activities |       |
|       |          |                 | include procedures    |       |
|       |          |                 | performed at the      |       |
|       |          |                 | agency as well as     |       |
|       |          |                 | activities performed  |       |
|       |          |                 | by other entities     |       |
|       |          |                 | once debt has been    |       |
|       |          |                 | referred to FMS for   |       |
|       |          |                 | cross-servicing or    |       |
|       |          |                 | TOP or to DOJ for     |       |
|       |          |                 | litigation. The       |       |
|       |          |                 | agency must           |       |
|       |          |                 | periodically evaluate |       |
|       |          |                 | the status of debt    |       |
|       |          |                 | and consider whether  |       |
|       |          |                 | to discontinue        |       |
|       |          |                 | collection efforts    |       |
|       |          |                 | and close-out the     |       |
|       |          |                 | debt.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resume   | The agency      | Evaluation of the     |       |
| 4     | Active   | resumes active  | status of debt and    |       |
| .8.10 | Co       | collection      | estimated success of  |       |
|       | llection | efforts.        | collection efforts to |       |
|       | Efforts  |                 | determine whether     |       |
|       |          |                 | active collection     |       |
|       |          |                 | efforts should resume |       |
|       |          |                 | and must be performed |       |
|       |          |                 | on a regular basis.   |       |
|       |          |                 | Such evaluation is    |       |
|       |          |                 | performed at the      |       |
|       |          |                 | agency whether debt   |       |
|       |          |                 | is held at the agency |       |
|       |          |                 | or has been referred  |       |
|       |          |                 | to other entities.    |       |
|       |          |                 |                       |       |
|       |          |                 | Typically, agencies   |       |
|       |          |                 | would resume active   |       |
|       |          |                 | collection efforts on |       |
|       |          |                 | previously suspended  |       |
|       |          |                 | debts when the        |       |
|       |          |                 | debtor's financial    |       |
|       |          |                 | position has          |       |
|       |          |                 | improved. See         |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | for additional        |       |
|       |          |                 | examples of when      |       |
|       |          |                 | agencies should       |       |
|       |          |                 | resume active         |       |
|       |          |                 | collection efforts on |       |
|       |          |                 | debts previously      |       |
|       |          |                 | classified as         |       |
|       |          |                 | temporarily suspended |       |
|       |          |                 | debts.                |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Approval | The agency      | Except for agencies   |       |
| 4     | Required | determines      | having independent    |       |
| .8.11 | for      | whether         | statutory authority,  |       |
|       | Ter      | approval from   | DOJ concurrence is    |       |
|       | mination | DOJ or FMS may  | required, as          |       |
|       | of       | be required     | applicable, when an   |       |
|       | Co       | prior to        | agency suspends or    |       |
|       | llection | termination of  | terminates collection |       |
|       | Action?  | collection      | action on debts over  |       |
|       |          | actions for an  | \$100,000 (principal  |       |
|       |          | accounts        | only). DOJ has        |       |
|       |          | receivable.     | delegated to FMS the  |       |
|       |          |                 | authority to approve  |       |
|       |          |                 | termination of        |       |
|       |          |                 | collection action on  |       |
|       |          |                 | a debt with a         |       |
|       |          |                 | principal amount of   |       |
|       |          |                 | \$500,000 or less     |       |
|       |          |                 | when the debt is      |       |
|       |          |                 | being serviced by FMS |       |
|       |          |                 | in its                |       |
|       |          |                 | cross-servicing       |       |
|       |          |                 | program.              |       |
|       |          |                 |                       |       |
|       |          |                 | A decision to         |       |
|       |          |                 | terminate collection  |       |
|       |          |                 | of a debt must be     |       |
|       |          |                 | approved by an        |       |
|       |          |                 | appropriate           |       |
|       |          |                 | managerial official.  |       |
|       |          |                 | Proper segregation of |       |
|       |          |                 | duties must be        |       |
|       |          |                 | maintained between    |       |
|       |          |                 | the requestor and     |       |
|       |          |                 | approver of the       |       |
|       |          |                 | action to terminate.  |       |
|       |          |                 |                       |       |
|       |          |                 | Concurrence is        |       |
|       |          |                 | requested by          |       |
|       |          |                 | submitting a          |       |
|       |          |                 | completed Claims      |       |
|       |          |                 | Collection Litigation |       |
|       |          |                 | Report (CCLR) to the  |       |
|       |          |                 | DOJ. See Appendix 10  |       |
|       |          |                 | of *Managing Federal  |       |
|       |          |                 | Receivables* for      |       |
|       |          |                 | details on preparing  |       |
|       |          |                 | a CCLR.               |       |
|       |          |                 |                       |       |
|       |          |                 | In compromising a     |       |
|       |          |                 | debt, the agency must |       |
|       |          |                 | obtain approval from  |       |
|       |          |                 | DOJ to compromise the |       |
|       |          |                 | debt when the         |       |
|       |          |                 | principal balance of  |       |
|       |          |                 | the debt before       |       |
|       |          |                 | compromise exceeds    |       |
|       |          |                 | \$100,000, or, if the |       |
|       |          |                 | debt is \$500,000 or  |       |
|       |          |                 | less and the debt is  |       |
|       |          |                 | in FMS's              |       |
|       |          |                 | cross-servicing       |       |
|       |          |                 | program, get approval |       |
|       |          |                 | from FMS unless the   |       |
|       |          |                 | agency has            |       |
|       |          |                 | independent statutory |       |
|       |          |                 | authority to          |       |
|       |          |                 | compromise the debt.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Approval | DOJ/FMS either  |                       |       |
| 4     | Granted? | approves or     |                       |       |
| .8.12 |          | denies the      |                       |       |
|       |          | request for     |                       |       |
|       |          | termination of  |                       |       |
|       |          | collection      |                       |       |
|       |          | action.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | The debt is     | Treasury\'s *Managing | R     |
| 4     | lose-out | closed out.     | Federal Receivables*  | MC-12 |
| .8.13 | Debt     |                 | guidance states that  |       |
|       |          |                 | once the agency       |       |
|       |          |                 | determines that       |       |
|       |          |                 | collection action is  |       |
|       |          |                 | legally barred or is  |       |
|       |          |                 | no longer cost        |       |
|       |          |                 | effective, the debt   |       |
|       |          |                 | should be classified  |       |
|       |          |                 | as a close-out.       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Meet     | The agency      | Agencies must follow  |       |
| 4     | 1099-C   | determines      | statutory guidelines  |       |
| .8.14 | R        | whether the     | and IRS 1099-C        |       |
|       | eporting | debt must be    | instructions          |       |
|       | Requi    | reported to the | concerning            |       |
|       | rements? | IRS as          | cancellation of debt  |       |
|       |          | potential       | and must report       |       |
|       |          | income.         | cancellation of debt  |       |
|       |          |                 | in the amount of      |       |
|       |          |                 | \$600 or greater.     |       |
|       |          |                 | Agencies may decide   |       |
|       |          |                 | not to report debts   |       |
|       |          |                 | less than \$600 that  |       |
|       |          |                 | were cancelled in a   |       |
|       |          |                 | calendar year. See    |       |
|       |          |                 | IRS instructions and  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables* for      |       |
|       |          |                 | additional            |       |
|       |          |                 | information on 1099-C |       |
|       |          |                 | reporting.            |       |
|       |          |                 |                       |       |
|       |          |                 | Depending on the type |       |
|       |          |                 | and amount of debt    |       |
|       |          |                 | being compromised,    |       |
|       |          |                 | the agency may be     |       |
|       |          |                 | required to report    |       |
|       |          |                 | the difference        |       |
|       |          |                 | between the full      |       |
|       |          |                 | amount of the debt    |       |
|       |          |                 | and the amount paid   |       |
|       |          |                 | by the debtor in a    |       |
|       |          |                 | compromise agreement  |       |
|       |          |                 | to IRS as potential   |       |
|       |          |                 | income on Form        |       |
|       |          |                 | 1099-C.               |       |
|       |          |                 |                       |       |
|       |          |                 | For example, if an    |       |
|       |          |                 | agency agrees to      |       |
|       |          |                 | accept anything less  |       |
|       |          |                 | than the full amount  |       |
|       |          |                 | owed for a \$300,000  |       |
|       |          |                 | debt because the      |       |
|       |          |                 | debtor claims an      |       |
|       |          |                 | inability to pay, the |       |
|       |          |                 | agency must seek DOJ  |       |
|       |          |                 | approval for such     |       |
|       |          |                 | compromise. If DOJ    |       |
|       |          |                 | decides not to seek   |       |
|       |          |                 | enforcement and       |       |
|       |          |                 | approves the          |       |
|       |          |                 | compromise, then the  |       |
|       |          |                 | amount discharged     |       |
|       |          |                 | should be written off |       |
|       |          |                 | as close-out and      |       |
|       |          |                 | reported to the IRS   |       |
|       |          |                 | on Form 1099-C.       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Genera   | The agency or   | Once a 1099-C has     | R     |
| 4     | te/Route | the entity to   | been issued an agency | MC-21 |
| .8.15 | 1099-C   | which debt has  | must cease collection |       |
|       |          | been referred   | efforts.              |       |
|       |          | generates Form  |                       |       |
|       |          | 1099-C,         |                       |       |
|       |          | "Cancellation   |                       |       |
|       |          | of Debt" and    |                       |       |
|       |          | sends it to the |                       |       |
|       |          | customer/debtor |                       |       |
|       |          | and the IRS.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | Form 1099-C is  |                       |       |
| 4     | ustomer/ | received by the |                       |       |
| .8.16 | Debtor   | c               |                       |       |
|       | Receives | ustomer/debtor. |                       |       |
|       | 1099-C   |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | IRS      | Form 1099-C is  |                       |       |
| 4     | Receives | received by the |                       |       |
| .8.17 | 1099-C   | IRS.            |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Issue Credit Memo**

This section provides the process to determine the action an agency will
take in response to triggering events such as overpayments, return of
goods, or adjustments related to services provided from a debtor. The
agency must determine whether or not to apply the amount to an open
receivable or offset the next scheduled receivable.

The following flowchart provides key steps in the process for issuing a
credit memo on an established accounts receivable. Included are steps to
request and prepare a credit memo, adjust an accounts receivable
balance, and generate and send the credit memo.

## RM 4.9 -- Issue Credit Memo Flowchart {#rm-4.9-issue-credit-memo-flowchart .unnumbered}

![](media/image38.wmf){width="6.990277777777778in"
height="5.324305555555555in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Issue Credit Memo process steps are
> described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Business | A triggering    | An image of the       |       |
| 4.9.1 | Unit or  | event occurs    | documentation         |       |
|       | Finance  | creating the    | supporting the credit |       |
|       | Prepares | need for a      | memo request shall be |       |
|       | Request  | credit memo to  | maintained in         |       |
|       | for      | be issued to a  | electronic or hard    |       |
|       | Credit   | c               | copy form, as         |       |
|       | Memo     | ustomer/debtor. | applicable.           |       |
|       |          | Examples of     |                       |       |
|       |          | such triggering | In an electronic      |       |
|       |          | events include  | environment, the      |       |
|       |          | an overpayment  | request information   |       |
|       |          | from a          | is entered or         |       |
|       |          | c               | interfaced to the     |       |
|       |          | ustomer/debtor, | Core Financial System |       |
|       |          | return of       | at the time the       |       |
|       |          | goods, or       | request is prepared.  |       |
|       |          | adjustment      |                       |       |
|       |          | related to      |                       |       |
|       |          | services        |                       |       |
|       |          | provided.       |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | A        | The request for | The review of a       |       |
| 4.9.2 | uthorize | a credit memo   | credit memo request   |       |
|       | Request  | is reviewed and | should be performed   |       |
|       | for      | the document is | by applicable         |       |
|       | Credit   | authorized or   | designated personnel  |       |
|       | Memo?    | transmitted to  | in either the         |       |
|       |          | the applicable  | business unit or      |       |
|       |          | functional area | Finance separate from |       |
|       |          | for resolution. | the preparer of the   |       |
|       |          |                 | request.              |       |
|       |          |                 |                       |       |
|       |          |                 | Designated personnel  |       |
|       |          |                 | must review           |       |
|       |          |                 | applicable supporting |       |
|       |          |                 | documentation to      |       |
|       |          |                 | evaluate the request  |       |
|       |          |                 | for a credit memo.    |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Request  | A document is   |                       |       |
| 4.9.3 | for      | generated to    |                       |       |
|       | Credit   | request a       |                       |       |
|       | Memo     | credit memo.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | Finance         |                       |       |
| 4.9.4 | etermine | personnel       |                       |       |
|       | App      | review          |                       |       |
|       | ropriate | supporting      |                       |       |
|       | Action   | documentation   |                       |       |
|       | on       | and any         |                       |       |
|       | Credit   | applicable      |                       |       |
|       | Memo     | accounts        |                       |       |
|       |          | receivable      |                       |       |
|       |          | history to      |                       |       |
|       |          | determine the   |                       |       |
|       |          | proper actions  |                       |       |
|       |          | needed to apply |                       |       |
|       |          | the credit      |                       |       |
|       |          | memo.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply to | If the          | Finance should apply  |       |
| 4.9.5 | Open     | customer/debtor | credit memos to open  |       |
|       | Rec      | owes funds to   | accounts receivable   |       |
|       | eivable? | the agency on   | balances owed by the  |       |
|       |          | open accounts   | customer/debtor.      |       |
|       |          | receivable      |                       |       |
|       |          | balances,       |                       |       |
|       |          | Finance         |                       |       |
|       |          | personnel       |                       |       |
|       |          | determine       |                       |       |
|       |          | whether to      |                       |       |
|       |          | apply the       |                       |       |
|       |          | credit memo to  |                       |       |
|       |          | an applicable   |                       |       |
|       |          | open balance.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Offset   | Finance         | Finance personnel     |       |
| 4.9.6 | Next     | personnel       | review the            |       |
|       | Rec      | determine       | customer/debtor's     |       |
|       | eivable? | whether to hold | account history to    |       |
|       |          | the credit memo | determine whether the |       |
|       |          | in order to     | agency should apply   |       |
|       |          | offset the      | the credit memo by    |       |
|       |          | amount the      | offsetting it against |       |
|       |          | agency would    | the amount of an      |       |
|       |          | bill on a       | expected future       |       |
|       |          | future          | receivable from the   |       |
|       |          | receivable from | customer/debtor.      |       |
|       |          | the             |                       |       |
|       |          | c               | The appropriate       |       |
|       |          | ustomer/debtor. | amount of time to     |       |
|       |          |                 | hold a credit (e.g.,  |       |
|       |          |                 | anticipating a future |       |
|       |          |                 | receivable) should be |       |
|       |          |                 | outlined in agency    |       |
|       |          |                 | guidelines.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | The credit memo | An individual other   |       |
| 4.9.7 | Memo     | is approved or  | than the preparer     |       |
|       | A        | transmitted to  | will approve or       |       |
|       | pproved? | the appropriate | transmit the          |       |
|       |          | functional area | unapproved credit     |       |
|       |          | for resolution. | memo to the           |       |
|       |          |                 | appropriate           |       |
|       |          |                 | functional area for   |       |
|       |          |                 | resolution.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | Accounts        | The entries are       | G     |
| 4.9.8 | Memo is  | receivable      | recorded to the       | LC-01 |
|       | Recorded | customer/debtor | general ledger using  |       |
|       | in       | balances and    | the USSGL Account     | G     |
|       | General  | statuses are    | Transaction Listing   | LC-02 |
|       | Ledger   | adjusted and    | provided in the TFM.  |       |
|       |          | updated to      | The applicable entry  | G     |
|       |          | reflect the     | is recorded based on  | LC-03 |
|       |          | credit memo.    | the entry originally  |       |
|       |          | Once the credit | made to record the    | G     |
|       |          | memo has been   | receivable.           | LC-04 |
|       |          | entered into    |                       |       |
|       |          | the system and  |                       | G     |
|       |          | approved by     |                       | LC-05 |
|       |          | appropriate     |                       |       |
|       |          | personnel, it   |                       | G     |
|       |          | is captured in  |                       | LC-06 |
|       |          | the subsidiary  |                       |       |
|       |          | ledger and      |                       | S     |
|       |          | recorded in the |                       | MB-33 |
|       |          | general ledger. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | A credit memo   |                       |       |
| 4.9.9 | Memo     | document is     |                       |       |
|       |          | generated.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send/    | Finance         | The credit memo is    |       |
| 4     | Transmit | sends/transmits | sent in electronic or |       |
| .9.10 | Credit   | the credit memo | hard-copy format,     |       |
|       | Memo     | to the          | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | The credit memo |                       |       |
| 4     | ustomer/ | is received by  |                       |       |
| .9.11 | Debtor   | the             |                       |       |
|       | Receives | c               |                       |       |
|       | Credit   | ustomer/debtor. |                       |       |
|       | Memo     |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolve  | The responsible |                       |       |
| 4     | Credit   | functional area |                       |       |
| .9.12 | Memo     | (Business Unit  |                       |       |
|       | Issue    | or Finance)     |                       |       |
|       |          | addresses       |                       |       |
|       |          | issues related  |                       |       |
|       |          | to unauthorized |                       |       |
|       |          | credit memo     |                       |       |
|       |          | requests or     |                       |       |
|       |          | unapproved      |                       |       |
|       |          | credit memos.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Issue    | The responsible |                       |       |
| 4     | R        | functional area |                       |       |
| .9.13 | esolved? | determines if   |                       |       |
|       |          | issues related  |                       |       |
|       |          | to credit memo  |                       |       |
|       |          | requests or     |                       |       |
|       |          | credit memos    |                       |       |
|       |          | were resolved.  |                       |       |
|       |          |                 |                       |       |
|       |          | If resolution   |                       |       |
|       |          | does not occur, |                       |       |
|       |          | the credit memo |                       |       |
|       |          | request or      |                       |       |
|       |          | credit memo is  |                       |       |
|       |          | rejected in     |                       |       |
|       |          | step RM 4.9.15. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | Determine if    |                       |       |
| 4     | Memo     | resolved issues |                       |       |
| .9.14 | Request? | were related to |                       |       |
|       |          | a credit memo   |                       |       |
|       |          | request.        |                       |       |
|       |          |                 |                       |       |
|       |          | If resolution   |                       |       |
|       |          | was related to  |                       |       |
|       |          | a credit memo   |                       |       |
|       |          | request, the    |                       |       |
|       |          | process flows   |                       |       |
|       |          | to RM 4.9.2     |                       |       |
|       |          | "Authorize      |                       |       |
|       |          | Credit Memo     |                       |       |
|       |          | Request".       |                       |       |
|       |          |                 |                       |       |
|       |          | If the          |                       |       |
|       |          | resolution was  |                       |       |
|       |          | related to a    |                       |       |
|       |          | credit memo,    |                       |       |
|       |          | the process     |                       |       |
|       |          | flows to RM     |                       |       |
|       |          | 4.9.4           |                       |       |
|       |          | "Determine      |                       |       |
|       |          | Appropriate     |                       |       |
|       |          | Action on       |                       |       |
|       |          | Credit Memo".   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | The credit memo | Complete and          |       |
| 4     | Credit   | request or      | sufficient supporting |       |
| .9.15 | Memo     | credit memo is  | documentation must be |       |
|       |          | rejected.       | provided or           |       |
|       |          |                 | designated personnel  |       |
|       |          |                 | will reject the       |       |
|       |          |                 | credit memo request   |       |
|       |          |                 | or credit memo.       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Return of a Negotiable Instrument**

This section provides the process to determine appropriate action in the
event a negotiable instrument is returned uncollected to an agency.
Although returned negotiable instruments have minimal impact on the
accounts receivable balance, they must be given their due diligence as
the potential for uncollectible amounts can increase over time. Examples
of returned negotiable instruments include non-sufficient funds, closed
customer/debtor accounts, stop payments, and disputed credit or debit
charges. The cost of pursuing collection on immaterial amounts resulting
from returned negotiable instruments can hinder an agency's overall
financial management effectiveness. An agency\'s business process for
returned negotiable instruments may also help to identify chronic
returns from the same customers which can serve to support a change in
agency policy or relationship with its customers.

The following flowchart provides key steps in the process to be followed
when an agency receives notice of returned negotiable instruments for a
customer/debtor. Included are steps to evaluate and record a returned
negotiable instrument, and notify or bill the customer/debtor, as
applicable.

## RM 4.10 -- Return of a Negotiable Instrument Flowchart {#rm-4.10-return-of-a-negotiable-instrument-flowchart .unnumbered}

![](media/image39.wmf){width="6.781944444444444in"
height="5.120833333333334in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Return of a Negotiable Instrument process
> steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Sends/   | Treasury or the |                       |       |
| 4     | T        | applicable      |                       |       |
| .10.1 | ransmits | Financial       |                       |       |
|       | Notice   | Institution     |                       |       |
|       | of       | (FI)            |                       |       |
|       | Returned | sends/transmits |                       |       |
|       | Ne       | a returned      |                       |       |
|       | gotiable | negotiable      |                       |       |
|       | Ins      | instruments     |                       |       |
|       | truments | notice to the   |                       |       |
|       |          | agency on the   |                       |       |
|       |          | account of a    |                       |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notice   | A returned      |                       |       |
| 4     | of       | negotiable      |                       |       |
| .10.2 | Returned | instrument      |                       |       |
|       | Ne       | notice is       |                       |       |
|       | gotiable | received by the |                       |       |
|       | Ins      | agency.         |                       |       |
|       | truments |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Capture  | The             | The original bill is  | G     |
| 4     | Ad       | customer/debtor | reopened in the Core  | LC-01 |
| .10.3 | justment | account is      | Financial System and  |       |
|       | to       | adjusted to     | collections           | G     |
|       | C        | reflect the     | activities resumed.   | LC-02 |
|       | ustomer/ | returned        | The original date of  |       |
|       | Debtor   | negotiable      | the bill is used for  | G     |
|       | Account  | instruments     | the purpose of        | LC-03 |
|       | and      | notice, and the | calculating interest  |       |
|       | Record   | new balance is  | due the agency on     | G     |
|       | to       | reflected in    | delinquent payments.  | LC-04 |
|       | General  | the subsidiary  |                       |       |
|       | Ledger   | and the general | The entries are       | G     |
|       |          | ledgers.        | recorded to the       | LC-05 |
|       |          |                 | general ledger using  |       |
|       |          |                 | the USSGL Account     | G     |
|       |          |                 | Transaction Listing   | LC-06 |
|       |          |                 | provided in the TFM.  |       |
|       |          |                 | The applicable entry  | R     |
|       |          |                 | is recorded based on  | MB-20 |
|       |          |                 | the entry originally  |       |
|       |          |                 | made to record the    | S     |
|       |          |                 | receivable balance.   | MB-33 |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Genera   | A message       | The agency should     |       |
| 4     | te/Route | describing the  | implement procedures  |       |
| .10.4 | Message  | returned        | to enable timely      |       |
|       | to       | negotiable      | notification of       |       |
|       | Business | instrument      | business units about  |       |
|       | Unit     | notice is sent  | customer/debtors for  |       |
|       |          | to the business | which returned        |       |
|       |          | unit which      | negotiable instrument |       |
|       |          | conducted       | notices have been     |       |
|       |          | business with   | received. Business    |       |
|       |          | the             | units should have     |       |
|       |          | c               | procedures to suspend |       |
|       |          | ustomer/debtor. | services to           |       |
|       |          |                 | customer/debtors in   |       |
|       |          |                 | such a case.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Business | The Business    |                       |       |
| 4     | Unit     | Unit receives a |                       |       |
| .10.5 | Receives | message         |                       |       |
|       | Message  | describing the  |                       |       |
|       |          | returned        |                       |       |
|       |          | negotiable      |                       |       |
|       |          | instrument      |                       |       |
|       |          | notice.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Was      | Finance         | If the Core Financial |       |
| 4     | Re       | determines      | System does not have  |       |
| .10.6 | ceivable | whether the     | an existing account   |       |
|       | Closed?  | returned        | for the               |       |
|       |          | negotiable      | customer/debtor, an   |       |
|       |          | instruments     | accounts receivable   |       |
|       |          | notice is       | must be established,  |       |
|       |          | applicable to   | as described in RM    |       |
|       |          | an existing     | 4.1.                  |       |
|       |          | customer/debtor |                       |       |
|       |          | account in the  |                       |       |
|       |          | Core Financial  |                       |       |
|       |          | System.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send/    | Finance         | The customer          |       |
| 4     | Transmit | sends/transmits | notification is sent  |       |
| .10.7 | Customer | the customer    | in electronic or      |       |
|       | Noti     | notification to | hard-copy format,     |       |
|       | fication | the             | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | The             |                       |       |
| 4     | Noti     | notification is |                       |       |
| .10.8 | fication | received by the |                       |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Waiver of Interest, Administrative Costs, and Penalties**

This section provides the process to waive interest, administrative
costs, and penalties applied to customer/debtor accounts. The Federal
Claims Collection Standards state that agency laws and regulations
specifically applicable to claims collection activities of a particular
agency generally take precedence over general government-wide claims
collection standards. Flexibility needs to be built into the systems,
procedures, and reporting to allow for exceptions to the standard
business processes and reporting models.

The Debt Collection Act of 1982, as amended requires agencies, unless
expressly prohibited or restricted by statute or contract, to assess
three separate and distinct types of late charges on all delinquent
debts. Late charges are categorized as interest, penalties, and
administrative costs which agencies are required to waive when the
associated debt is paid within 30 days of the date of delinquency.
Agencies may also internally decide to waive these charges at its
discretion pursuant to a compromise or settlement agreement or when
collection of these charges is against equity and good conscience or is
not in the best interests of the United States

The following flowchart provides key steps in the process to be followed
when an agency determines whether to issue a waiver of interest,
administrative costs, or penalties that have been applied on a
delinquent account.

## RM 4.11 -- Waiver of Interest, Administrative Costs, and Penalties Flowchart {#rm-4.11-waiver-of-interest-administrative-costs-and-penalties-flowchart .unnumbered}

![](media/image40.wmf){width="6.990277777777778in" height="3.525in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Waiver of Interest, Administrative Costs, and
Penalties process steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | I        | The initial     |                       |       |
| 4     | nterest, | input to the    |                       |       |
| .11.1 | Admini   | process is      |                       |       |
|       | strative | records of      |                       |       |
|       | Costs,   | customer/debtor |                       |       |
|       | and      | accounts which  |                       |       |
|       | P        | have been       |                       |       |
|       | enalties | assessed        |                       |       |
|       |          | interest and/or |                       |       |
|       |          | administrative  |                       |       |
|       |          | costs and/or    |                       |       |
|       |          | penalties.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Should a | The agency      | Treasury\'s *Managing |       |
| 4     | Waiver   | evaluates       | Federal Receivables*  |       |
| .11.2 | Be       | whether         | guidance states that  |       |
|       | Granted? | interest and/or | the agency is         |       |
|       |          | administrative  | required to waive     |       |
|       |          | costs and/or    | *interest* and        |       |
|       |          | penalties       | *administrative       |       |
|       |          | should be       | costs* on a debt paid |       |
|       |          | waived on a     | within 30 days of the |       |
|       |          | customer/debtor | date of delinquency.  |       |
|       |          | account.        | A waiver may be in    |       |
|       |          |                 | whole or in part for  |       |
|       |          |                 | each separate type of |       |
|       |          |                 | charge. The agency    |       |
|       |          |                 | has discretion to     |       |
|       |          |                 | waive interest,       |       |
|       |          |                 | penalties, and        |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | in accordance with    |       |
|       |          |                 | its regulations,      |       |
|       |          |                 | either (1) pursuant   |       |
|       |          |                 | to a compromise or    |       |
|       |          |                 | settlement agreement, |       |
|       |          |                 | or (2) when           |       |
|       |          |                 | collection of these   |       |
|       |          |                 | charges is against    |       |
|       |          |                 | equity and good       |       |
|       |          |                 | conscience or is not  |       |
|       |          |                 | in the best interests |       |
|       |          |                 | of the United States. |       |
|       |          |                 | For example, a waiver |       |
|       |          |                 | may be appropriate    |       |
|       |          |                 | when an agency cannot |       |
|       |          |                 | conduct a hearing     |       |
|       |          |                 | within the            |       |
|       |          |                 | statutorily required  |       |
|       |          |                 | time frame (e.g., 60  |       |
|       |          |                 | days for salary       |       |
|       |          |                 | offset).              |       |
|       |          |                 |                       |       |
|       |          |                 | The Federal Claims    |       |
|       |          |                 | Collections Standards |       |
|       |          |                 | note that agency laws |       |
|       |          |                 | and regulations       |       |
|       |          |                 | specifically          |       |
|       |          |                 | applicable to claims  |       |
|       |          |                 | collection activities |       |
|       |          |                 | take precedence over  |       |
|       |          |                 | the government-wide   |       |
|       |          |                 | standards.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Process  | The agency      | Supporting            | R     |
| 4     | and      | processes a     | information and       | MC-13 |
| .11.3 | Document | waiver of       | supervisory approvals |       |
|       | App      | interest and/or | for waiving interest  |       |
|       | lication | administrative  | and/or administrative |       |
|       | of       | costs and/or    | costs and/or          |       |
|       | Waiver   | penalties on a  | penalties must be     |       |
|       |          | customer/debtor | documented and        |       |
|       |          | account in the  | maintained.           |       |
|       |          | Core Financial  |                       |       |
|       |          | System.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Waiver   | The waiver      | Waiver information is | G     |
| 4     | is       | transaction is  | captured within the   | LC-01 |
| .11.4 | Recorded | captured in the | applicable subsidiary |       |
|       | in       | subsidiary      | accounts and entries  | G     |
|       | General  | ledger and      | are recorded to       | LC-02 |
|       | Ledger   | recorded in the | applicable accounts   |       |
|       |          | general ledger. | in the and general    | G     |
|       |          |                 | ledger using the      | LC-03 |
|       |          |                 | USSGL Account         |       |
|       |          |                 | Transaction Listing   | G     |
|       |          |                 | provided in the TFM.  | LC-04 |
|       |          |                 | Applicable entries    |       |
|       |          |                 | are recorded based on | G     |
|       |          |                 | earlier entries to    | LC-05 |
|       |          |                 | record interest,      |       |
|       |          |                 | administrative costs, | G     |
|       |          |                 | and penalties.        | LC-06 |
|       |          |                 |                       |       |
|       |          |                 |                       | R     |
|       |          |                 |                       | MC-11 |
|       |          |                 |                       |       |
|       |          |                 |                       | S     |
|       |          |                 |                       | MB-02 |
|       |          |                 |                       |       |
|       |          |                 |                       | S     |
|       |          |                 |                       | MB-33 |
+-------+----------+-----------------+-----------------------+-------+

> []{.mark}

## **Installment Plans**

This section provides the process to collect debt over time. Installment
plans represent a supplemental debt collection tool available to
agencies. Installment plans should only be offered to customers who
present valid evidence of inability to pay claims and are offered to
those customers prior to offset or administrative wage garnishment. An
agency should attempt to collect as large an initial payment as possible
and the agreement should be drafted with the intent to collect the
entire debt in three years or less. Any installment agreement should be
drafted with the best interest of the agency in collecting the debt and
should not in any way compromise its right to that debt. The agreement
should contain sufficient terms such that the agency's rights to collect
the debt are not compromised.

The following flowchart provides key steps in the process for entering
into an installment agreement with a customer/debtor. Included are steps
for determining eligibility for an installment plan, performing
financial due diligence, and establishing accounts receivable for an
installment agreement.

## RM 4.12 -- Installment Plans Flowchart {#rm-4.12-installment-plans-flowchart .unnumbered}

![](media/image41.wmf){width="6.990277777777778in"
height="5.102777777777778in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Installment Plans process steps are
> described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Noti     | Customer/debtor |                       |       |
| 4     | fication | notifies the    |                       |       |
| .12.1 | of       | appropriate     |                       |       |
|       | C        | agency office   |                       |       |
|       | ustomer/ | of inability to |                       |       |
|       | Debtor   | pay current     |                       |       |
|       | I        | amount due.     |                       |       |
|       | nability |                 |                       |       |
|       | to Pay   |                 |                       |       |
|       | Claim    |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Receive  | Finance         | In the event that the |       |
| 4     | Claim of | determines      | customer/debtor       |       |
| .12.2 | I        | whether         | claims financial      |       |
|       | nability | customer/debtor | inability to repay    |       |
|       | to Pay?  | provided        | the debt in a single  |       |
|       |          | sufficient      | lump sum, the agency  |       |
|       |          | notification of | may consider          |       |
|       |          | inability to    | collecting the debt   |       |
|       |          | pay.            | in installments.      |       |
|       |          |                 |                       |       |
|       |          |                 | Before using certain  |       |
|       |          |                 | collection remedies,  |       |
|       |          |                 | such as offset and    |       |
|       |          |                 | administrative wage   |       |
|       |          |                 | garnishment, an       |       |
|       |          |                 | agency should provide |       |
|       |          |                 | a debtor with the     |       |
|       |          |                 | opportunity to enter  |       |
|       |          |                 | into a reasonable     |       |
|       |          |                 | repayment agreement.  |       |
|       |          |                 | Based on the result   |       |
|       |          |                 | of analysis of        |       |
|       |          |                 | accounts receivable   |       |
|       |          |                 | history for the       |       |
|       |          |                 | customer/debtor,      |       |
|       |          |                 | agencies may consider |       |
|       |          |                 | an installment        |       |
|       |          |                 | agreement.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt     | Finance         | Agency policies and   |       |
| 4     | Eligible | determines if   | procedures should     |       |
| .12.3 | for      | the debt is     | define criteria for   |       |
|       | Ins      | eligible for an | the types and amounts |       |
|       | tallment | installment     | of debts for which    |       |
|       | Ag       | agreement.      | the agency will       |       |
|       | reement? |                 | consider entering     |       |
|       |          |                 | into an installment   |       |
|       |          |                 | agreement.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | F        | The agency      | Prior to entering     |       |
| 4     | inancial | conducts        | into an installment   |       |
| .12.4 | Due      | procedures to   | agreement, an agency  |       |
|       | D        | determine the   | should verify the     |       |
|       | iligence | validity of the | debtor\'s claim of    |       |
|       |          | cu              | inability to repay in |       |
|       |          | stomer/debtor's | a lump sum. Examples  |       |
|       |          | claim of        | of documentation      |       |
|       |          | inability to    | agencies may use are  |       |
|       |          | pay in a lump   | financial reports and |       |
|       |          | sum.            | credit reports.       |       |
|       |          |                 | Additionally, an      |       |
|       |          |                 | agency should enter   |       |
|       |          |                 | into such agreements  |       |
|       |          |                 | only when there is    |       |
|       |          |                 | evidence the debtor   |       |
|       |          |                 | has:                  |       |
|       |          |                 |                       |       |
|       |          |                 | -   Shown willingness |       |
|       |          |                 |     to abide by the   |       |
|       |          |                 |     terms of the      |       |
|       |          |                 |     agreement,        |       |
|       |          |                 |     including the     |       |
|       |          |                 |     repayment         |       |
|       |          |                 |     schedule; and     |       |
|       |          |                 |                       |       |
|       |          |                 | -   Ability to make   |       |
|       |          |                 |     the agreed-upon   |       |
|       |          |                 |     payments.         |       |
|       |          |                 |                       |       |
|       |          |                 | For additional        |       |
|       |          |                 | guidance on           |       |
|       |          |                 | evaluating a          |       |
|       |          |                 | debtor\'s inability   |       |
|       |          |                 | to pay claim, refer   |       |
|       |          |                 | to Treasury\'s        |       |
|       |          |                 | Managing Federal      |       |
|       |          |                 | Receivables, and as a |       |
|       |          |                 | supplement, The       |       |
|       |          |                 | Collection Financial  |       |
|       |          |                 | Standards available   |       |
|       |          |                 | from the IRS.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Approval | A designated    | The agency official   |       |
| 4     | of       | agency official | reviews the results   |       |
| .12.5 | Agency   | approves or     | of the installment    |       |
|       | O        | disapproves an  | due diligence and     |       |
|       | fficial? | installment     | eligibility           |       |
|       |          | agreement to    | determination         |       |
|       |          | collect the     | procedures to         |       |
|       |          | customer's      | determine if an       |       |
|       |          | debt.           | installment agreement |       |
|       |          |                 | should be approved.   |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Prep     | Finance         | The installment       |       |
| 4     | are/Send | prepares and    | agreement is sent to  |       |
| .12.6 | Ins      | sends the       | the customer/debtor   |       |
|       | tallment | approved        | in electronic or      |       |
|       | A        | installment     | hard-copy format.     |       |
|       | greement | agreement to    |                       |       |
|       |          | the customer.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ins      | Customer        |                       |       |
| 4     | tallment | receives the    |                       |       |
| .12.7 | A        | installment     |                       |       |
|       | greement | agreement.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | Customer        |                       |       |
| 4     | Accepts? | accepts or      |                       |       |
| .12.8 |          | fails to accept |                       |       |
|       |          | the terms of    |                       |       |
|       |          | the installment |                       |       |
|       |          | agreement.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | E        | Finance         | In establishing the   | G     |
| 4     | stablish | establishes an  | installment agreement | LC-01 |
| .12.9 | Re       | accounts        | in the Core Financial |       |
|       | ceivable | receivable      | System, Finance must: | G     |
|       | for      | according to    |                       | LC-02 |
|       | Ins      | the terms of    | -   Close out the     |       |
|       | tallment | the installment |     original bill(s); | G     |
|       | A        | agreement.      |                       | LC-03 |
|       | greement |                 | -   Establish a new   |       |
|       |          |                 |     unbilled          | G     |
|       |          |                 |     receivable        | LC-04 |
|       |          |                 |     referencing the   |       |
|       |          |                 |     prior bill(s)     | G     |
|       |          |                 |     which have been   | LC-05 |
|       |          |                 |     closed; and       |       |
|       |          |                 |                       | G     |
|       |          |                 | -   Include           | LC-06 |
|       |          |                 |     applicable terms  |       |
|       |          |                 |     of the            | R     |
|       |          |                 |     installment       | MB-21 |
|       |          |                 |     agreement to      |       |
|       |          |                 |     enable the Core   | R     |
|       |          |                 |     Financial System  | MB-22 |
|       |          |                 |     to generate a     |       |
|       |          |                 |     payment schedule  | S     |
|       |          |                 |     which includes    | MB-33 |
|       |          |                 |     billing and       |       |
|       |          |                 |     payment due       |       |
|       |          |                 |     dates.            |       |
+-------+----------+-----------------+-----------------------+-------+

**This page intentionally left blank.**

# **Reimbursables Management Processes**

## **Reimbursables Management Processes**

[**This Section will be Part of a Future Standard Business Process
Release**.]{.mark}

[]{.mark}

**This page intentionally left blank.**

# **Reports Management Processes**

## **Reports Management Processes**

**[This Section will be Part of a Future Standard Business Process
Release.]{.mark}**

**This page intentionally left blank.**

# Appendix A -- FMLoB Business Approach {#appendix-a-fmlob-business-approach .Heading}

The FMLoB Business Process work stream follows a standard approach in
the development of each business process area. The FMLoB Business
Process was developed through a collaborative effort of the Federal
financial management community. The project objectives were to:

-   Define the objectives of standard business process

-   Document the current business processes used within the 24 Chief
    Financial Officer Act agencies (the "as-is" environment)

-   Determine which business processes should be included in the
    standard business process.

The FMLoB Business Process project was divided into four phases:

1.  Project initiation

2.  Development of FMLoB Business Processes vision and draft proposal

3.  Validation of the FMLoB Standard Business Processes

4.  Issuance of an exposure draft of the proposed Standard Business
    Processes.

During the initial phase of the project, the sponsors were engaged to
help ensure that expectations were known, the project approach was
acceptable, and requirements for government participation were defined.

The second phase established the vision for Standard Business Processes
that defined the objectives of developing a standard structure and its
contribution to the goals of the FMLoB initiative.

During the third phase, the draft proposal was refined and validated
with three key stakeholder groups:

-   Representatives of the 24 Chief Financial Officers Act agencies

-   Vendors of financial management systems

-   Federal shared service providers.

From April through August 2006, FSIO conducted a number of workshops
with program agencies and vendors to address payments and receipts,
funds management, and reporting.

During the final phase of the project, the team began to develop the
*Financial Management Systems Standard Business Processes for U.S.
Government Agencies* document.

**This page intentionally left blank.**

# Appendix B -- FMLoB Glossary {#appendix-b-fmlob-glossary .Heading}

+---------------+----------------------------------------+-------------+
| Term          | Definition                             | Source[^1]  |
+===============+========================================+=============+
| Accounting    | A subset of the agency financial       | FSIO        |
| C             | information classification. The        | Financial   |
| lassification | accounting classification structure    | System      |
|               | provides a means for categorizing      | Re          |
|               | financial information along several    | quirements; |
|               | dimensions as needed to support        |             |
|               | financial management and reporting     | Multiple    |
|               | functions. The data elements an agency | sources     |
|               | includes in its accounting             |             |
|               | classification structure will depend   |             |
|               | in part on the implementation strategy |             |
|               | for the USSGL, data aggregation        |             |
|               | requirements for preparation of        |             |
|               | financial statements under the CFO     |             |
|               | Act, appropriation structure, and      |             |
|               | other reporting and management needs   |             |
|               | of the agency.                         |             |
+---------------+----------------------------------------+-------------+
| Accounts      | Amounts due from others when the right | United      |
| Receivable    | to receive funds accrues. This may     | States      |
|               | result from the performance of         | Standard    |
|               | services, the delivery of goods, or    | General     |
|               | court-ordered assessment.              | Ledger      |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.fms.treas |
|               |                                        | .gov/ussgl/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Accrual       | The term "accrual" is used in this     | Online      |
|               | document to refer to an accounting     | Accounting  |
|               | transaction to record expenses that    | Dictionary  |
|               | have been incurred or revenues that    |             |
|               | have been earned without regard to     | [http://ww  |
|               | when cash is received or disbursed.    | w.accountin |
|               |                                        | gcoach.com/ |
|               |                                        | accounting- |
|               |                                        | terms/accou |
|               |                                        | nting-dicti |
|               |                                        | onary/#accr |
|               |                                        | ual%20type% |
|               |                                        | 20adjusting |
|               |                                        | %20entry](h |
|               |                                        | ttp://www.a |
|               |                                        | ccountingco |
|               |                                        | ach.com/acc |
|               |                                        | ounting-ter |
|               |                                        | ms/accounti |
|               |                                        | ng-dictiona |
|               |                                        | ry/#accrual |
|               |                                        |  type adjus |
|               |                                        | ting entry) |
+---------------+----------------------------------------+-------------+
| Accrual       | A system of accounting in which        | GAO:        |
| Accounting    | revenues are recorded when earned and  | Glossary of |
|               | expenses are recorded when goods are   | Terms Used  |
|               | received or services are performed,    | in the      |
|               | even though the actual receipt of      | Federal     |
|               | revenues and payment for goods or      | Budget      |
|               | services may occur, in whole or in     | Process     |
|               | part, at a different time.             |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Accrual       | The basis whereby transactions and     | GAO:        |
| Accounting    | events are recognized when they occur, | Glossary of |
| Basis         | regardless of when cash is received or | Terms Used  |
|               | paid.                                  | in the      |
|               |                                        | Federal     |
|               |                                        | Budget      |
|               |                                        | Process     |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| A             | Is to withhold money payable by the    | Treasury's  |
| dministrative | Government to or held by the           | Managing    |
| (Internal)    | Government for a person or entity in   | Federal     |
| Offsets with  | order to satisfy a debt that the       | Receivables |
| Accounts      | person or entity owes.                 |             |
| Payable       |                                        | <           |
|               |                                        | http://fms. |
|               |                                        | treas.gov/d |
|               |                                        | ebt/Guidanc |
|               |                                        | e_MFR.html> |
+---------------+----------------------------------------+-------------+
| A             | A process whereby a Federal agency     | Treasury's  |
| dministrative | issues a wage garnishment order to a   | Managing    |
| Wage          | delinquent debtor's non-Federal        | Federal     |
| Garnishment   | employer. No court order is required.  | Receivables |
|               | The employer withholds amounts from    |             |
|               | the                                    | <           |
|               |                                        | http://fms. |
|               | employee's wages in compliance with    | treas.gov/d |
|               | the order and pays those amounts to    | ebt/Guidanc |
|               | the Federal creditor agency to which   | e_MFR.html> |
|               | the employee owes a debt.              |             |
+---------------+----------------------------------------+-------------+
| Agency        | The term "Agency" means any executive  | OMB         |
|               | department, military department,       | Circular    |
|               | government corporation,                | A-130,      |
|               | government-controlled corporation,     | Transmittal |
|               | other establishment in the executive   | Memorandum  |
|               | branch of the Federal government, or   | #4,         |
|               | any independent regulatory agency.     | Management  |
|               | Within the Executive Office of the     | of Federal  |
|               | President, the term includes only OMB  | Information |
|               | and the Office of Administration.      | Resources   |
|               |                                        | (           |
|               |                                        | 11/28/2000) |
+---------------+----------------------------------------+-------------+
| Allotment     | A subdivision of an apportionment made | OMB         |
|               | by an agency.                          | Circular    |
|               |                                        | A-11,       |
|               |                                        | P           |
|               |                                        | reparation, |
|               |                                        | Submission  |
|               |                                        | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Application   | Receivables resulting from the         |             |
| Fees          | processing of applications submitted   |             |
|               | by parties wishing to participate in a |             |
|               | government offered program or service  |             |
|               | for which applications are necessary   |             |
|               | for participation in exchange for a    |             |
|               | fee.                                   |             |
+---------------+----------------------------------------+-------------+
| Apportionment | A distribution made by OMB of amounts  | OMB         |
|               | available for obligation in an         | Circular    |
|               | appropriation or fund account into     | A-11,       |
|               | amounts available for specified time   | P           |
|               | periods, program, activities,          | reparation, |
|               | projects, objects, or any combinations | Submission  |
|               | of these. The apportioned amount       | and         |
|               | limits the obligations that may be     | Execution   |
|               | incurred. An apportionment may be      | of the      |
|               | further subdivided by an agency into   | Budget      |
|               | allotments, suballotments, and         | (6/30/06)   |
|               | allocations.                           |             |
+---------------+----------------------------------------+-------------+
| Appropriation | A provision of law (not necessarily an | OMB         |
|               | appropriations act) authorizing the    | Circular    |
|               | expenditure of funds for a given       | A-11,       |
|               | purpose. Usually, but not always, an   | P           |
|               | appropriation provides budget          | reparation, |
|               | authority.                             | Submission  |
|               |                                        | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Asset Sales   | The dollar amount of proceeds realized | Financial   |
|               | from the sale of a loan or debt        | Management  |
|               | including collections from sales of    | Service: A  |
|               | secured property.                      | bureau of   |
|               |                                        | the         |
|               |                                        | Department  |
|               |                                        | of the      |
|               |                                        | United      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <h          |
|               |                                        | ttps://www. |
|               |                                        | fms.treas.g |
|               |                                        | ov/debt/Wkb |
|               |                                        | ktest3.htm> |
+---------------+----------------------------------------+-------------+
| Auction       | Fees assessed to government sponsored  |             |
| Receipts      | auction attendees to recoup the costs  |             |
|               | associated with the auction to benefit |             |
|               | the federal agency or program in the   |             |
|               | form of reducing a surplus of goods.   |             |
+---------------+----------------------------------------+-------------+
| Award         | The term "Award Document" is used to   | FSIO        |
| Document      | represent the applicable instrument    | Payments    |
|               | used by an agency to enter into a      | Management  |
|               | contractual arrangement with a         | Focus Group |
|               | provider of goods and/or services.     |             |
+---------------+----------------------------------------+-------------+
| Benefit       | Benefit payments, paid by Federal      |             |
| Overpayments  | agencies, to entities or individuals,  |             |
|               | in excess of the amount prescribed by  |             |
|               | specific guidance governing the        |             |
|               | specific benefit type for which the    |             |
|               | payment was made.                      |             |
+---------------+----------------------------------------+-------------+
| Billed        | An amount owed the Government by an    | Treasury's  |
| Receivables   | individual, organization, or other     | Managing    |
|               | entity to satisfy a debt or claim      | Federal     |
|               | where the government has communicated  | Receivables |
|               | to the debtor the terms of the debt or | <htt        |
|               | claim in the form of a bill.           | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Budget        | The Budget of the United States        | FASAB       |
|               | Government setting forth the           |             |
|               | President's comprehensive financial    | Statement   |
|               | plan for allocating resources. The     | of Federal  |
|               | Government uses the budget system to   | Financial   |
|               | allocate resources among its major     | Accounting  |
|               | functions and individual programs. The | Standards   |
|               | budget process has three main phases:  | No. 24      |
|               | formulation, congressional action on   |             |
|               | the budget, and execution.             |             |
+---------------+----------------------------------------+-------------+
| Budget        | The authority provided by law to incur | OMB         |
| Authority     | financial obligations that will result | Circular    |
|               | in outlays. Specific forms of budget   | A-11,       |
|               | authority include appropriations,      | P           |
|               | borrowing authority, contract          | reparation, |
|               | authority, and spending authority from | Submission  |
|               | offsetting collections.                | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Budget        | Includes Funds Control and provides    | OMB         |
| Execution     | features to record, distribute, and    | Circular    |
|               | control budget authority and spending  | A-11,       |
|               | in accordance with the provisions of   | P           |
|               | OMB Circular A-11, Part 4, and         | reparation, |
|               | Instructions on Budget Execution.      | Submission  |
|               | Budget execution provides the ability  | and         |
|               | to track the effects of financial      | Execution   |
|               | events on the sources and uses of      | of the      |
|               | budgetary resources authorized by the  | Budget      |
|               | President and Congress. Its primary    | (6/30/06)   |
|               | purpose is to ensure that spending     |             |
|               | does not exceed funds appropriated or  |             |
|               | authorized.                            |             |
+---------------+----------------------------------------+-------------+
| Budget        | During this phase of the budget cycle, | OMB         |
| Formulation   | the Executive Branch prepares the      | Circular    |
|               | President's budget. OMB and the        | A-11,       |
|               | Federal Agencies begin preparing the   | P           |
|               | next budget almost as soon as the      | reparation, |
|               | President has sent the last one to     | Submission  |
|               | Congress. OMB officially starts the    | and         |
|               | process by sending planning guidance   | Execution   |
|               | to Executive Branch Agencies in the    | of the      |
|               | spring. The President completes this   | Budget      |
|               | phase by sending the budget to         | (6/30/06)   |
|               | Congress on the first Monday in        |             |
|               | February, as specified in law,         |             |
|               | although occasionally Presidents have  |             |
|               | sent it later for various reasons.     |             |
+---------------+----------------------------------------+-------------+
| Business Unit | For the purpose of this document,      |             |
|               | business unit refers to any program or |             |
|               | administrative office/unit other than  |             |
|               | Finance or Acquisition units.          |             |
+---------------+----------------------------------------+-------------+
| Carryover     | Funding collected in one fiscal year   | Treasury    |
|               | that was not obligated and is          | Directive:  |
|               | available to be used to meet           | 31-04       |
|               | requirements in the next fiscal year.  |             |
|               |                                        | <http:      |
|               |                                        | //www.treas |
|               |                                        | .gov/regs/t |
|               |                                        | d31-04.htm> |
+---------------+----------------------------------------+-------------+
| Commitment    | A commitment is an administrative      | OMB         |
|               | reservation of funds that have not yet | Circular    |
|               | been obligated. Agencies use           | A-11,       |
|               | commitment accounts for the internal   | P           |
|               | control of budgetary resources and to  | reparation, |
|               | help prevent unauthorized use of       | Submission  |
|               | available resources.                   | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/2006) |
+---------------+----------------------------------------+-------------+
| Concentration | Moves funds from an account that       | Treasury    |
|               | settles the transactions to the        | Financial   |
|               | Treasury General Account Fund at the   | Management  |
|               | Federal Reserve Bank of New York.      | Service     |
+---------------+----------------------------------------+-------------+
| Concession    | Receivables resulting from an          |             |
| Rents         | agreement between the agency and a     |             |
|               | party where the agency extends the use |             |
|               | of agency property for the party to    |             |
|               | conduct a function or business in      |             |
|               | return for a fee.                      |             |
+---------------+----------------------------------------+-------------+
| Core          | A core financial management system     | OMB         |
| Financial     | supports both the key financial        | Circular    |
| System        | management business processes of an    | A-127,      |
|               | agency as well as the financial        | Financial   |
|               | aspects of non-financial management    | Management  |
|               | business processes (e.g.,              | Systems     |
|               | Acquisitions, Budget Planning,         | (Draft)     |
|               | Payroll, Property, Grants, and         |             |
|               | Travel). Financial management business |             |
|               | processes of an agency are defined as: |             |
|               |                                        |             |
|               | -   Budget and Finance                 |             |
|               |                                        |             |
|               | ```{=html}                             |             |
|               | <!-- -->                               |             |
|               | ```                                    |             |
|               | -   Accounting                         |             |
|               |                                        |             |
|               | -   Collections and Receivables        |             |
|               |                                        |             |
|               | -   Payments                           |             |
|               |                                        |             |
|               | -   Assets and Liabilities             |             |
|               |                                        |             |
|               | -   Reporting and Information          |             |
|               |                                        |             |
|               | The above processes are further        |             |
|               | defined in the Office of Federal       |             |
|               | Financial Management (OFFM) Core       |             |
|               | Financial Systems Requirements.        |             |
+---------------+----------------------------------------+-------------+
| Credit Debt   | The complete credit process, which is  | Treasury's  |
| Ma            | composed of four phases: credit        | Managing    |
| nagement/Debt | extension, account servicing,          | Federal     |
| Collection    | delinquent debt collection, and        | Receivables |
| Cycle         | ter                                    | <htt        |
|               | mination/write-off/close-out/discharge | p://www.fms |
|               | of indebtedness.                       | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Credit Reform | The purposes of the Credit Reform Act  | United      |
|               | of 1990, are to:                       | States      |
|               |                                        | Code: 2     |
|               | \(1\) Measure more accurately the      | U.S.C. §    |
|               | costs of Federal credit programs       | 661         |
|               |                                        |             |
|               | \(2\) Place the cost of credit         | [           |
|               | programs on a budgetary basis          | http://www. |
|               | equivalent to other Federal spending   | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               | \(3\) Encourage the delivery of        | ndex.html]( |
|               | benefits in the form most appropriate  | http://www. |
|               | to the needs of beneficiaries          | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               | \(4\) Improve the allocation of        | ndex.html ) |
|               | resources among credit programs and    |             |
|               | between credit and other spending      |             |
|               | programs.                              |             |
+---------------+----------------------------------------+-------------+
| Department of | The DOJ manages government-wide debt   | Justice     |
| Justice Debt  | through the use of the Debt Management | Management  |
| Management    | Module (DMM) which contains records of | Division: A |
|               | payments and administrative offsets of | division of |
|               | funds received and disbursed by the    | the United  |
|               | DOJ resulting from the litigation and  | States      |
|               | enforced collection of civil and       | Department  |
|               | criminal debts owed to the United      | of Justice  |
|               | States.                                |             |
|               |                                        | <http://www |
|               |                                        | .usdoj.gov/ |
|               |                                        | jmd/foia/jm |
|               |                                        | ddcdms.htm> |
+---------------+----------------------------------------+-------------+
| Disbursements | Amounts paid out by Federal agencies   | TFM,        |
|               | during the fiscal year. This term is   | Supplement  |
|               | used interchangeably with the term     | to Volume   |
|               | outlay.                                | I, Fund     |
|               |                                        | Balance     |
|               |                                        | with        |
|               |                                        | Treasury    |
|               |                                        | Rec         |
|               |                                        | onciliation |
|               |                                        | Procedures  |
|               |                                        | (10/4/2002) |
+---------------+----------------------------------------+-------------+
| Document Line | Document line represents contract or   |             |
|               | subcontract line items on a commitment |             |
|               | obligation or payment document.        |             |
+---------------+----------------------------------------+-------------+
| DOJ Referral  | Unless an agency has specific          | Treasury's  |
|               | statutory authority to litigate its    | Managing    |
|               | own debts, it must refer debts to DOJ  | Federal     |
|               | for litigation, including bankruptcy   | Receivables |
|               | litigation. Debts for which the        | <htt        |
|               | principal amount is \$1,000,000 or     | p://www.fms |
|               | less must be referred through DOJ\'s   | .treas.gov/ |
|               | Nationwide Central Intake Facility     | debt/MFR/Gl |
|               | (NCIF). FMS will refer to DOJ for      | ossary.pdf> |
|               | litigation, debts that have been       |             |
|               | referred to FMS for cross-servicing,   |             |
|               | when appropriate.                      |             |
+---------------+----------------------------------------+-------------+
| Donations     | Gift of assets to a Federal agency, or |             |
|               | component there-of. The item donated   |             |
|               | is recorded at its fair market value   |             |
|               | on the donation date. The donor does   |             |
|               | not have an owner\'s interest as a     |             |
|               | result of the donation.                |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from employee    |             |
| Allowances    | receipts of funds in excess of actual  |             |
|               | expense.                               |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from benefits    |             |
| Benefits      | paid on behalf of the employee that    |             |
| Reimbursement | the employee must reimburse when they  |             |
|               | return to a pay status.                |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from an          |             |
| Overpayments  | administrative error where an employee |             |
|               | received payments that were later to   |             |
|               | be found unauthorized.                 |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from             |             |
| Training      | government-sponsored training in       |             |
| Reimbursement | exchange for a fee from attendees.     |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from the advance |             |
| Travel        | to employees to cover employee travel  |             |
| (Advances)    | expenses not to exceed the obligation  |             |
|               | amount.                                |             |
+---------------+----------------------------------------+-------------+
| Enterprise    | A strategic information asset base     | E           |
| Architecture  | that defines the mission, the          | -Government |
|               | information necessary to perform the   | Act of      |
|               | mission, the technologies necessary to | 2002, Title |
|               | perform the mission, and the           | II, Chapter |
|               | transitional processes for             | 36 Section  |
|               | implementing new technologies in       | 3601        |
|               | response to changing mission needs.    |             |
+---------------+----------------------------------------+-------------+
| Federal       | To facilitate efforts to transform the | Federal     |
| Enterprise    | Federal government to one that is      | Enterprise  |
| Architecture  | citizen-centered, results-oriented,    | A           |
|               | and market-based, the Office of        | rchitecture |
|               | Management and Budget (OMB) is         | Program     |
|               | developing the Federal Enterprise      | Management  |
|               | Architecture (FEA), a business-based   | Office      |
|               | framework for Government-wide          |             |
|               | improvement.                           |             |
|               |                                        |             |
|               | The FEA is being constructed through a |             |
|               | collection of interrelated "reference  |             |
|               | models" designed to facilitate         |             |
|               | cross-agency analysis and the          |             |
|               | identification of duplicative          |             |
|               | investments, gaps, and opportunities   |             |
|               | for collaboration within and across    |             |
|               | Federal agencies.                      |             |
+---------------+----------------------------------------+-------------+
| Federal       | The BRM is a function-driven framework | OMB         |
| Enterprise    | for describing the lines of business   | Circular    |
| Architecture  | and internal functions performed by    | A-11,       |
| Business      | the Federal government independent of  | Preparing,  |
| Reference     | the agencies that perform them. The    | Executing,  |
| Model (BRM)   | BRM serves as the business layer of    | and         |
|               | the Federal Enterprise Architecture    | Submitting  |
|               | (FEA). It provides a foundation on     | the Budget  |
|               | which the applications, data, and      |             |
|               | technology layers of the FEA are       |             |
|               | developed. Agency Capital Asset Plans  |             |
|               | (Exhibit 300s) will be mapped against  |             |
|               | this framework to identify             |             |
|               | opportunities for cross-agency         |             |
|               | collaboration and potential system     |             |
|               | redundancies.                          |             |
+---------------+----------------------------------------+-------------+
| Federal       | The Federal Enterprise Architecture    | Federal     |
| Enterprise    | Framework (FEAF) provides an organized | Enterprise  |
| Architecture  | structure and a collection of common   | A           |
| Framework     | terms by which Federal segments can    | rchitecture |
|               | integrate their respective             | Framework,  |
|               | architectures into the Federal         | V.1.1,      |
|               | Enterprise Architecture (FEA).         | Federal CIO |
|               |                                        | Council,    |
|               |                                        | September   |
|               |                                        | 1999        |
+---------------+----------------------------------------+-------------+
| Federal       | Any payment made by an agency. The     | Treasury    |
| Payment       | term includes, but is not limited to:  | Green Book  |
|               | (1) Federal wage, salary, and          |             |
|               | retirement payments; (2) vendor and    |             |
|               | expense reimbursement payments; (3)    |             |
|               | benefit payments; and (4)              |             |
|               | miscellaneous payments including, but  |             |
|               | not limited to, interagency payments,  |             |
|               | grants, loans, fees, principal,        |             |
|               | interest, and other payments related   |             |
|               | to United States marketable and        |             |
|               | non-marketable securities, overpayment |             |
|               | reimbursements, and payments under     |             |
|               | Federal insurance or guarantee         |             |
|               | programs for loans.                    |             |
+---------------+----------------------------------------+-------------+
| Financial     | A branch of accounting. The most       | FASAB,      |
| Accounting    | noteworthy interpretations or          | SFFAS No.   |
|               | classifications are those about which  | 1:          |
|               | data pertain to the past and which     | Objectives  |
|               | pertain to the future. In other words, | of Federal  |
|               | financial accounting is largely        |             |
|               | concerned with assigning the value of  | Financial   |
|               | past transactions to appropriate time  | Reporting   |
|               | periods.                               |             |
+---------------+----------------------------------------+-------------+
| Financial     | Any occurrence having financial        | OMB         |
| Event         | consequences to the Federal government | Circular    |
|               | related to the receipt of              | A-127,      |
|               | appropriations or other financial      | Financial   |
|               | resources; acquisition of goods or     | Management  |
|               | services; payments or collections;     | Systems     |
|               | recognition of guarantees, benefits to | (           |
|               | be provided, or other potential        | 07/23/1993) |
|               | liabilities; or other reportable       |             |
|               | financial activities.                  |             |
+---------------+----------------------------------------+-------------+
| Financial     | Financial systems and the financial    | Federal     |
| Management    | portions of mixed systems necessary to | Financial   |
| Systems       | support financial management,          | Management  |
|               | including manual or automated          | Improvement |
|               | processes, procedures, controls,       | Act         |
|               | hardware, software, and support        | (FFMIA),    |
|               | personnel. Financial systems include   |             |
|               | an information system, comprised of    | OMB         |
|               | one or more applications, that is used | Circular    |
|               | for (1) collecting, processing,        | A-127,      |
|               | maintaining, transmitting or reporting | Financial   |
|               | data about financial events; (2)       | Management  |
|               | supporting financial or budgeting      | Systems     |
|               | activities; (3) accumulating and       | (           |
|               | reporting cost information; or (4)     | 07/23/1993) |
|               | supporting the preparation of          |             |
|               | financial statements.                  |             |
+---------------+----------------------------------------+-------------+
| Financial     | A financial system supports the        | OMB         |
| System        | financial management business          | Circular    |
|               | processes required in an agency to     | A-127,      |
|               | track financial events to provide      | Financial   |
|               | financial information that is          | Management  |
|               | significant to the financial           | Systems     |
|               | management of the agency and is used   | (Draft)     |
|               | for the preparation of agency          |             |
|               | financial statements. A financial      |             |
|               | system encompasses both automated and  |             |
|               | manual processes, procedures, internal |             |
|               | controls, and a data repository and    |             |
|               | may include multiple applications that |             |
|               | are integrated through a common        |             |
|               | database or are electronically         |             |
|               | interfaced, as necessary, to meet      |             |
|               | defined data and processing            |             |
|               | requirements to record financial       |             |
|               | events. These core applications        |             |
|               | directly support the financial         |             |
|               | management business processes of an    |             |
|               | agency.                                |             |
+---------------+----------------------------------------+-------------+
| Fines         | Applied amounts on accounts and loans  | United      |
|               | receivable due to the delinquency of a | States      |
|               | debt or noncompliance with terms of a  | Standard    |
|               | preexisting agreement.                 | General     |
|               |                                        | Ledger      |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.fms.treas |
|               |                                        | .gov/ussgl/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Freedom of    | Allows any person to request access to | United      |
| Information   | Federal agency records or information. | States      |
| Act           | Federal agencies are required to       | Code: 5     |
|               | disclose records upon receipt of a     | U.S.C. §    |
|               | written request, except for records    | 552         |
|               | that are protected from disclosure by  |             |
|               | nine exemptions or three exclusions in | [           |
|               | the Act.                               | http://www. |
|               |                                        | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               |                                        | ndex.html]( |
|               |                                        | http://www. |
|               |                                        | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               |                                        | ndex.html ) |
+---------------+----------------------------------------+-------------+
| Gifts         | Assets given to Federal agencies in    |             |
|               | cash or other form for which the       |             |
|               | Federal entity has no future           |             |
|               | obligation to the individual or        |             |
|               | entity, relative to the gift.          |             |
+---------------+----------------------------------------+-------------+
| Grants        | A federal financial assistance award   | GAO:        |
|               | making payment in cash or in kind for  | Glossary of |
|               | a specified purpose.                   | Terms Used  |
|               |                                        | in the      |
|               |                                        | Federal     |
|               |                                        | Budget      |
|               |                                        | Process     |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Industrial    | The Industrial Funding Fee (IFF)       | General     |
| Funding Fees  | reimburses the General Services        | Services    |
|               | Administration (GSA) for the costs of  | Admi        |
|               | operating Federal Supply Schedules     | nistration, |
|               | program and recoups its operating      | [http://    |
|               | costs from ordering activities. The    | www.gsa.gov |
|               | IFF has been added by the Government   | ](http://ww |
|               | to the contract price and is reflected | w.gsa.gov/) |
|               | in the total amount charged to the     |             |
|               | ordering activities.                   |             |
+---------------+----------------------------------------+-------------+
| Information   | The protection of information and      | Federal     |
| Security      | information systems from unauthorized  |             |
|               | access, use, disclosure, disruption,   | Information |
|               | modification, or destruction in order  | Security    |
|               | to provide: (1) integrity, which means | Management  |
|               | guarding against improper information  | Act of 2002 |
|               | modification or destruction, and       |             |
|               | includes ensuring information          |             |
|               | non-repudiation and authenticity; (2)  |             |
|               | confidentiality, which means           |             |
|               | preserving authorized restrictions on  |             |
|               | access and disclosure, including means |             |
|               | for protecting personal privacy and    |             |
|               | proprietary information; and (3)       |             |
|               | availability, which means ensuring     |             |
|               | timely and reliable access to and use  |             |
|               | of information.                        |             |
+---------------+----------------------------------------+-------------+
| Information   | A discrete set of information          | OMB         |
| System        | technology, data, and related          | Circular    |
|               | resources, such as personnel,          | A-11,       |
|               | hardware, software, and associated     | P           |
|               | information technology services        | reparation, |
|               | organized for the collection,          | Submission  |
|               | processing, maintenance, use, sharing, | and         |
|               | dissemination, or disposition of       | Execution   |
|               | information.                           | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Information   | Any equipment, or interconnected       | FAR 2.101   |
| Technology    | system(s) or subsystem(s) of           |             |
|               | equipment, that is used in the         |             |
|               | automatic acquisition, storage,        |             |
|               | manipulation, management, movement,    |             |
|               | control, display, switching,           |             |
|               | interchange, transmission, or          |             |
|               | reception of data or information by    |             |
|               | the agency.                            |             |
+---------------+----------------------------------------+-------------+
| Interest      | Interest is a sum paid or calculated   | Treasury's  |
|               | for the use of capital. Financing      | Managing    |
|               | interest is the charge assessed as a   | Federal     |
|               | cost of extending credit as            | Receivables |
|               | distinguished from additional interest | <htt        |
|               | which is the charge assessed on        | p://www.fms |
|               | delinquent debts in order to           | .treas.gov/ |
|               | compensate the Government for the time | debt/MFR/Gl |
|               | value of money owed and not paid when  | ossary.pdf> |
|               | due. Additional interest is accrued    |             |
|               | and assessed from the date of          |             |
|               | delinquency.                           |             |
+---------------+----------------------------------------+-------------+
| Internal      | A subset of management controls are    | OMB         |
| Control       | the internal controls used to assure   | Circular    |
|               | that there is prevention or timely     | A-123,      |
|               | detection of unauthorized acquisition, | M           |
|               | use, or disposition of the entity's    | anagement's |
|               | assets.                                | Res         |
|               |                                        | ponsibility |
|               |                                        | for         |
|               |                                        | Internal    |
|               |                                        | Control     |
|               |                                        | (Effective  |
|               |                                        | beginning   |
|               |                                        | with Fiscal |
|               |                                        | Year 2006)  |
|               |                                        | (Revised    |
|               |                                        | 12/21/2004) |
+---------------+----------------------------------------+-------------+
| Internal      | Process for assessing the              | OMB         |
| Control over  | effectiveness of an entity's internal  | Circular    |
| Financial     | control over financial reporting.      | A-123,      |
| Reporting     |                                        | M           |
|               |                                        | anagement's |
|               |                                        | Res         |
|               |                                        | ponsibility |
|               |                                        | for         |
|               |                                        | Internal    |
|               |                                        | Control,    |
|               |                                        | Appendix A  |
|               |                                        | (Revised    |
|               |                                        | 12/21/2004) |
+---------------+----------------------------------------+-------------+
| Internal      | Is where an agency that is owed a      | Treasury's  |
| Offset        | delinquent debt is also making one or  | Managing    |
|               | more payments to its debtor and the    | Federal     |
|               | agency determines that the payments    | Receivables |
|               | can be offset to collect the debt.     |             |
|               | Internal Offset is a subset of         | <           |
|               | Administrative Offset.                 | http://fms. |
|               |                                        | treas.gov/d |
|               |                                        | ebt/Guidanc |
|               |                                        | e_MFR.html> |
+---------------+----------------------------------------+-------------+
| Intra         | Intra-Governmental Payment and         | Treasury    |
| -Governmental | Collection (IPAC) System is comprised  | Financial   |
| Payment and   | of three interrelated subsystems: (1)  | Manual,     |
| Collection    | the IPAC application that processes    | Part 6,     |
|               | Intra-Governmental Federal funds       | Chapter     |
|               | transfers between Agencies, (2) the    | 4000,       |
|               | Retirement and Insurance Transfer      | Intrago     |
|               | System (RITS) that processes           | vernment-al |
|               | retirement and health insurance        | Payment and |
|               | payments by Federal agencies to the    | Collection  |
|               | Office of Personnel Management (OPM),  | (IPAC)      |
|               | and (3) the Treasury Receivable        | System      |
|               | Accounting and Collection System       |             |
|               | (TRACS) that processes check           |             |
|               | disbursement data returned to Federal  |             |
|               | Agencies for which Treasury has        |             |
|               | disbursing authority.                  |             |
+---------------+----------------------------------------+-------------+
| Investments   | The long-term asset category of a      | Online      |
|               | classified balance sheet that appears  | Accounting  |
|               | immediately after the current assets.  | Dictionary  |
|               | Listed in this category would be a     |             |
|               | bond sinking fund, funds held for      | <http:/     |
|               | construction, the cash surrender value | /www.accoun |
|               | of a life insurance policy owned by    | tingcoach.c |
|               | the company, and long-term investments | om/accounti |
|               | in stocks and bonds.                   | ng-terms/ac |
|               |                                        | counting-di |
|               |                                        | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| IPAC          | A transaction processed through a      | Financial   |
| Transaction   | Treasury-based system for which        | Management  |
|               | Federal Program Agencies (FPA) the     | Service: A  |
|               | intra-governmental transfer of funds,  | bureau of   |
|               | with descriptive data from one FPA to  | the         |
|               | another.                               | Department  |
|               |                                        | of the      |
|               |                                        | United      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | goals/ipac/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Judgments     | Amounts owed to the agency resulting   |             |
| (Accident     | from a judgment, in the agencies       |             |
| Claims)       | favor, entitling them to receipt of    |             |
|               | funds resulting from an external       |             |
|               | party's non- compliance with a         |             |
|               | preexisting agreement and/or           |             |
|               | negligence.                            |             |
+---------------+----------------------------------------+-------------+
| Leases        | A legal agreement to pay rent to the   | Online      |
|               | lessor for a stated period of time.    | Accounting  |
|               | Sometimes the lease is in substance a  | Dictionary  |
|               | purchase of an asset and a financing   |             |
|               | arrangement. For example, if a company | [http://ww  |
|               | agrees to lease a forklift truck for   | w.accountin |
|               | 60 months and the agreement cannot be  | gcoach.com/ |
|               | canceled without purchasing the asset, | accounting- |
|               | it is possible the arrangement is more | terms/accou |
|               | than a mere rental of equipment.       | nting-dicti |
|               |                                        | onary/#accr |
|               |                                        | ual%20type% |
|               |                                        | 20adjusting |
|               |                                        | %20entry](h |
|               |                                        | ttp://www.a |
|               |                                        | ccountingco |
|               |                                        | ach.com/acc |
|               |                                        | ounting-ter |
|               |                                        | ms/accounti |
|               |                                        | ng-dictiona |
|               |                                        | ry/#accrual |
|               |                                        |  type adjus |
|               |                                        | ting entry) |
+---------------+----------------------------------------+-------------+
| Loans         | Financial assets created by the        | Government  |
|               | Government by providing money, goods   | Accounting  |
|               | or services directly or indirectly to  | Standards   |
|               | the beneficiary entities, which        | Advisory    |
|               | entails a contractual right to receive | Board       |
|               | back the moneys (or equivalents) along | P           |
|               | with interest                          | ublication: |
|               |                                        | Accounting  |
|               | thereon, if any, as per terms and      | Standards   |
|               | conditions of the loan agreements.     | for the     |
|               |                                        | Union       |
|               |                                        | Government  |
|               |                                        | and the     |
|               |                                        | State       |
|               |                                        | G           |
|               |                                        | overnments, |
|               |                                        | Exposure    |
|               |                                        | Draft 6,    |
|               |                                        | Issued      |
|               |                                        | March 30,   |
|               |                                        | 2007.       |
|               |                                        |             |
|               |                                        | [http://www |
|               |                                        | .gasab.gov. |
|               |                                        | in/pdf/Expo |
|               |                                        | sure%20Draf |
|               |                                        | t%206%20%20 |
|               |                                        | Loans%20and |
|               |                                        | %20Advances |
|               |                                        | %20Made%20b |
|               |                                        | y%20Governm |
|               |                                        | ents.pdf](h |
|               |                                        | ttp://www.g |
|               |                                        | asab.gov.in |
|               |                                        | /pdf/Exposu |
|               |                                        | re Draft 6  |
|               |                                        |  Loans and  |
|               |                                        | Advances Ma |
|               |                                        | de by Gover |
|               |                                        | nments.pdf) |
+---------------+----------------------------------------+-------------+
| Management    | Management controls are the            | OMB         |
| Controls      | organization, policies, and procedures | Circular    |
|               | used by Agencies to reasonably ensure  | A-123,      |
|               | that (1) programs achieve their        | M           |
|               | intended results; (2) resources are    | anagement's |
|               | used consistent with Agency mission;   | Res         |
|               | (3) programs and resources are         | ponsibility |
|               | protected from waste, fraud, and       | for         |
|               | mismanagement; (4) laws and            | Internal    |
|               | regulations are followed; and (5)      | Control     |
|               | reliable and timely information is     | (Effective  |
|               | obtained, maintained, reported, and    | beginning   |
|               | used for decision making.              | with Fiscal |
|               |                                        | Year 2006)  |
|               | Management controls, in the broadest   | (Revised    |
|               | sense, include the plan of             | 12/21/2004) |
|               | organization, methods, and procedures  |             |
|               | adopted by management to ensure that   |             |
|               | its goals are met. Management controls |             |
|               | include processes for planning,        |             |
|               | organizing, directing, and controlling |             |
|               | program operations.                    |             |
+---------------+----------------------------------------+-------------+
| Managerial    | Managerial cost accounting should be a | FASAB,      |
| Cost          | fundamental part of the financial      | SFFAS No.   |
| Accounting    | management system and, to the extent   | 4:          |
|               | practicable, should be integrated with | Managerial  |
|               | other parts of the system. Managerial  | Cost        |
|               | costing should use a basis of          | Accounting  |
|               | accounting, recognition, and           | Standards   |
|               | measurement appropriate for the        | and         |
|               | intended purpose. Cost information     | Concepts    |
|               | developed for different purposes       |             |
|               | should be drawn from a common data     |             |
|               | source, and output reports should be   |             |
|               | reconcilable to each other             |             |
+---------------+----------------------------------------+-------------+
| Miscellaneous | Funds received that cannot be          |             |
| Receipts      | identified to a particular Federal     |             |
|               | program.                               |             |
+---------------+----------------------------------------+-------------+
| Non           | Sale of goods or services where the    |             |
| -Reimbursable | basis of the exchange is not governed  |             |
| Sale of Goods | by a reimbursable agreement or trading |             |
| or Services   | partner transaction.                   |             |
| (User Fees)   |                                        |             |
+---------------+----------------------------------------+-------------+
| Non-Monetary  | An exchange between parties for goods  |             |
| Exchange      | received, services rendered, or other  |             |
| Transactions  | activity in accordance with a          |             |
|               | preexisting agreement where an         |             |
|               | exchange of anything other than        |             |
|               | currency is the basis for payment.     |             |
+---------------+----------------------------------------+-------------+
| Non-Monetary  | Transactions not involving the         |             |
| Transactions  | exchange of currency.                  |             |
+---------------+----------------------------------------+-------------+
| N             | Payments in the form of check not      |             |
| on-Sufficient | processed by a Financial Institution   |             |
| Funds Checks  | (FI) when the payment amount is in     |             |
|               | excess of the payee's account balance  |             |
|               | at the time of the FI's payment        |             |
|               | processing activity.                   |             |
+---------------+----------------------------------------+-------------+
| Outlay        | Outlay means a payment to liquidate an | OMB         |
|               | obligation (other than the repayment   | Circular    |
|               | of debt principal). Outlays generally  | A-11,       |
|               | are equal to cash disbursements but    | P           |
|               | also are recorded for cash-equivalent  | reparation, |
|               | transactions, such as the subsidy cost | Submission  |
|               | of direct loans and loan guarantees,   | and         |
|               | and interest accrued on public issues  | Execution   |
|               | of the public debt. Outlays are the    | of the      |
|               | measure of Government spending.        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Payee         | A person, corporation, or other public |             |
|               | or private entity that is authorized   |             |
|               | to receive a Federal payment from an   |             |
|               | agency.                                |             |
+---------------+----------------------------------------+-------------+
| Payment       | A government disbursement of monies to | Treasury    |
|               | any payee, including vendors,          | Financial   |
|               | employees, private citizens, state, or | Manual      |
|               | local and foreign governments in       |             |
|               | accordance with Contract terms. The    |             |
|               | payment management function consists   |             |
|               | of the following processes: payee      |             |
|               | information maintenance, payment       |             |
|               | warehousing, payment execution, and    |             |
|               | payment confirmation and follow-up.    |             |
+---------------+----------------------------------------+-------------+
| Penalties     | A charge assessed on delinquent debts  | Treasury's  |
|               | to discourage delinquencies and        | Managing    |
|               | encourage early payment of the         | Federal     |
|               | delinquent debt in full.               | Receivables |
|               |                                        | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Program       | Generally defined as an organized set  | A Glossary  |
|               | of activities directed toward a common | of Terms    |
|               | purpose or goal, undertaken or         | Used in the |
|               | proposed by an agency in order to      | Federal     |
|               | carry out its responsibilities. In     | Budget      |
|               | practice, however, the term has many   | Process     |
|               | uses and thus does not have a          | (GAO        |
|               | well-defined, standard meaning in the  | 09/2005)    |
|               | legislative process. It is used to     |             |
|               | describe an agency's mission,          |             |
|               | programs, functions, activities,       |             |
|               | services, projects, and processes.     |             |
+---------------+----------------------------------------+-------------+
| Program       | Payment expected by a specific         |             |
| Overpayments  | program, from a program beneficiary,   |             |
| Not Processed | in excess of original cost not yet     |             |
| in the Core   | processed in the Core Financial        |             |
| Financial     | System.                                |             |
| System        |                                        |             |
+---------------+----------------------------------------+-------------+
| Rebates       | Refunds resulting from a purchase of   |             |
|               | goods.                                 |             |
+---------------+----------------------------------------+-------------+
| Reimbursable  | A sum (1) that is received by an       | GAO:        |
| Activity      | agency as a payment for commodities    | Glossary of |
|               | sold or services furnished either to   | Terms Used  |
|               | the public or to another government    | in the      |
|               | account, and (2) that is authorized by | Federal     |
|               | law to be credited directly to         | Budget      |
|               | specific appropriation and fund        | Process     |
|               | accounts. Reimbursements between two   |             |
|               | accounts for goods or services are     | <http://ww  |
|               | usually expenditure                    | w.gao.gov/n |
|               | transactions/transfers.                | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Relocation    | Receivables resulting from employee    |             |
|               | receipts of funds in excess of actual  |             |
|               | cost of relocating employees or        |             |
|               | employees not fulfilling the           |             |
|               | requirements of the agreement where    |             |
|               | they would be subject to payback the   |             |
|               | original amount paid by the agency.    |             |
+---------------+----------------------------------------+-------------+
| Salary Offset | Is the process of collecting a         | Treasury's  |
|               | delinquent Federal non-tax debt from a | Managing    |
|               | Federal employee's current pay without | Federal     |
|               | his or her consent. Salary offset      | Receivables |
|               | should be accomplished through         | <htt        |
|               | centralized offset, unless centralized | p://www.fms |
|               | offset is unavailable.                 | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Sale of Goods | A revenue account that reports the     | Online      |
| and Services  | sales of merchandise. Sales are        | Accounting  |
|               | reported in the accounting period in   | Dictionary  |
|               | which title to the merchandise was     |             |
|               | transferred from the seller to the     | <http:/     |
|               | buyer.                                 | /www.accoun |
|               |                                        | tingcoach.c |
|               |                                        | om/accounti |
|               |                                        | ng-terms/ac |
|               |                                        | counting-di |
|               |                                        | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| Settlement    | Settlement refers to the accounting    | Treasury    |
|               | process recording the respective debit | Financial   |
|               | and credit positions of the two        | Management  |
|               | parties involved in a transfer of      | Service     |
|               | funds.                                 |             |
|               |                                        |             |
|               | Funds are available for use and may be |             |
|               | drawn at any time afterward. Funds     |             |
|               | transferred through Fed Wire are       |             |
|               | available for use at the time the      |             |
|               | transfer occurs, and are settled by    |             |
|               | adjusting the reserve account balances |             |
|               | of the sending and receiving banks.    |             |
|               | Checks, automated clearinghouse        |             |
|               | transfers, and other payments between  |             |
|               | banks are settled on a provisional     |             |
|               | basis, because the possibility exists  |             |
|               | that the person initiating the         |             |
|               | transfer of funds may not have         |             |
|               | sufficient funds to cover the payment, |             |
|               | or the payment cannot be processed for |             |
|               | various reasons.                       |             |
+---------------+----------------------------------------+-------------+
| Shared        | Shared services are a bringing         |             |
| Services      | together of functions that are         |             |
|               | frequently duplicated across component |             |
|               | Agencies and delivering these services |             |
|               | more efficiently and with a customer   |             |
|               | service orientation. Sharing services  |             |
|               | leads to the elimination of            |             |
|               | redundancies.                          |             |
+---------------+----------------------------------------+-------------+
| Sharing       | An agreement established between two   |             |
| Agreements    | or more parties for the purpose of     |             |
| (Billing)     | sharing the use of an asset.           |             |
+---------------+----------------------------------------+-------------+
| Sharing       | An agreement established between two   |             |
| Agreements    | or more parties for the purpose of     |             |
| (Collections) | sharing the use of an asset.           |             |
+---------------+----------------------------------------+-------------+
| Single        | A unified set of financial systems and | OMB         |
| Integrated\   | the financial portions of mixed        | Circular    |
| Financial\    | systems (e.g., Acquisition)            | A-127,      |
| Management    | encompassing the software, hardware,   | Financial   |
| System        | personnel, processes (manual and       | Management  |
|               | automated), procedures, controls, and  | Systems     |
|               | data necessary to carry out financial  | (           |
|               | management functions, manage the       | 07/23/1993) |
|               | financial operations of the agency,    |             |
|               | and report on the agency's financial   |             |
|               | status to central agencies, Congress,  |             |
|               | and the public.                        |             |
+---------------+----------------------------------------+-------------+
| Tax           | Amounts of identifiable, measurable,   | United      |
| Receivables   | and legally enforceable taxes due from | States      |
| and Duties    | entities.                              | Standard    |
|               |                                        | General     |
|               |                                        | Ledger      |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.fms.treas |
|               |                                        | .gov/ussgl/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Transactions  | Monies distributed to a U.S.           | Financial   |
| in Foreign    | government agency that must be         | Management  |
| Currency      | converted to the U.S. dollar           | Service: A  |
|               | equivalent using the current United    | bureau of   |
|               | States Treasury's reporting rates of   | the         |
|               | exchange.                              | Department  |
|               |                                        | of the      |
|               |                                        | United      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <ht         |
|               |                                        | tp://www.fm |
|               |                                        | s.treas.gov |
|               |                                        | /intn.html> |
+---------------+----------------------------------------+-------------+
| Treasury      | The process whereby agencies refer     | Treasury's  |
| Cr            | delinquent Federal non-tax debts to    | Managing    |
| oss-Servicing | FMS or DOJ for collection. FMS or DOJ  | Federal     |
|               | apply a variety of collection tools    | Receivables |
|               | once agencies refer their debts.       | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Treasury Debt | A Program sponsored by the United      | Financial   |
| Management    | States Department of Treasury, Debt    | Management  |
|               | Management Services (DMS), is to       | Service: A  |
|               | improve the quality of the Federal     | bureau of   |
|               | government\'s financial management by  | the         |
|               | increasing the collection of           | Department  |
|               | delinquent debt owed to the            | of the      |
|               | government, by providing debt          | United      |
|               | management services to all Federal     | States      |
|               | agencies, and by protecting the        | Treasury    |
|               | financial interests of the American    |             |
|               | taxpayer. DMS also develops and        | <http://w   |
|               | implements government-wide debt        | ww.fms.trea |
|               | management policies.                   | s.gov/debt/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Treasury      | The [manual issued by the Financial    | Green Book, |
| Financial     | Management                             | Glossary    |
| Manual        | Service](ht                            |             |
|               | tp://www.fms.treas.gov/tfm/index.html) |             |
|               | containing procedures to be observed   |             |
|               | by all Agencies, FRBs, and FIs with    |             |
|               | respect to payments, collections,      |             |
|               | central accounting, financial          |             |
|               | reporting, and other government-wide   |             |
|               | fiscal responsibilities of the         |             |
|               | Treasury.                              |             |
+---------------+----------------------------------------+-------------+
| Trust Fund    | Trust funds are those designated by    | United      |
| Programs      | law as such, whereby receipts are      | States      |
|               | earmarked for spending on specific     | Standard    |
|               | purposes. Trust funds are established  | General     |
|               | to carry out purposes of a trust       | Ledger,     |
|               | agreement or statute.                  | Federal     |
|               |                                        | Trust Fund  |
|               |                                        | Accounting  |
|               |                                        | Guide.      |
|               |                                        |             |
|               |                                        | <           |
|               |                                        | http://www. |
|               |                                        | fms.treas.g |
|               |                                        | ov/ussgl/tf |
|               |                                        | guide.html> |
+---------------+----------------------------------------+-------------+
| Unbilled      | Receivables resulting from an agency   |             |
| Overpayments  | payment to a party in excess of the    |             |
|               | actual cost where the agency has not   |             |
|               | yet communicated, in the form of a     |             |
|               | bill, the excess payment to the party. |             |
+---------------+----------------------------------------+-------------+
| United States | A uniform list of accounts that        | Treasury    |
| Standard      | support transactions that standardizes | Financial   |
| General       | Federal agency accounting and supports | Manual,     |
| Ledger        | the preparation of standard external   |             |
| (USSGL)       | reports. The U.S. Government Standard  | Volume I    |
|               | General Ledger Chart of Accounts (1)   |             |
|               | provides control over all financial    |             |
|               | transactions and resource balances,    |             |
|               | (2) satisfies basic reporting          |             |
|               | requirements of OMB and Treasury, and  |             |
|               | (3) integrates proprietary and         |             |
|               | budgetary accounting.                  |             |
+---------------+----------------------------------------+-------------+
| User Fees     | Fees which the service or program      |             |
|               | beneficiary pays for the cost of the   |             |
|               | services received, or the burden       |             |
|               | imposed on the program in the form of  |             |
|               | a fee.                                 |             |
+---------------+----------------------------------------+-------------+
| USSGL Account | An account within the uniform chart of | Volume I,   |
|               | accounts used by Federal agencies to   | U.S.        |
|               | record budgetary and proprietary       | Government  |
|               | accounting transactions.               | Standard    |
|               |                                        | General     |
|               |                                        | Ledger      |
|               |                                        | (Uniform    |
|               |                                        | Chart of    |
|               |                                        | Accounts    |
|               |                                        | 08/2006)    |
+---------------+----------------------------------------+-------------+
| Vendor        | Receivables resulting from vendor      |             |
| Overpayments  | receipts of funds in excess of the     |             |
|               | actual cost.                           |             |
+---------------+----------------------------------------+-------------+
| Vendor        | The electronic transfer of funds and   | Treasury    |
| Payment       | payment-related information used by    | Greenbook,  |
|               | the Federal government for payments to | Guide to    |
|               | businesses that provide goods and      | Federal ACH |
|               | services to Federal agencies and other | Payments    |
|               | payment recipients, such as            | and         |
|               | State/local governments and            | Collections |
|               | educational institutions.              |             |
+---------------+----------------------------------------+-------------+

# Appendix C -- Business Process Flowcharts Symbols and Definitions {#appendix-c-business-process-flowcharts-symbols-and-definitions .Heading}

**Flowchart Symbols Defined:**

  ----------------------- ------------------------ -----------------------------
  **Name**                **Symbol**               **Definition**

  **Connector**           ![](media/image42.wmf)   This symbol indicates a jump
                                                   from one point to another in
                                                   a process flow.

  **Data**                ![](media/image43.wmf)   This symbol represents
                                                   electronic input to and/or
                                                   outputs from a process.

  **Data Transmission**   ![](media/image44.wmf)   This symbol indicates the
                                                   transfer of data to an
                                                   external location. This
                                                   symbol is used with a dashed
                                                   connector line when the
                                                   recipient is not depicted on
                                                   the flowchart.

  **Decision**            ![](media/image45.wmf)   This symbol indicates a
                                                   question or branch in the
                                                   process flow.

  **Electronic            ![](media/image46.wmf)   This symbol indicates a
  Notification**                                   message transmitted for the
                                                   purpose of electronically
                                                   communicating the result of
                                                   an action

  **Process**             ![](media/image47.wmf)   This symbol represents a
                                                   process or action step.

  **Terminator**          ![](media/image48.wmf)   This symbol indicates that
                                                   the current process flow is
                                                   ending at this point and is
                                                   part of a separate process
                                                   flow.
  ----------------------- ------------------------ -----------------------------

.

![](media/image49.wmf){width="7.0in" height="7.872222222222222in"}

## **Funds Management Process Flows** 

![](media/image50.wmf){width="7.0in" height="8.489583333333334in"}
![](media/image51.wmf){width="6.75in" height="8.263194444444444in"}
![](media/image52.wmf){width="6.916666666666667in"
height="8.602777777777778in"}

![](media/image53.wmf){width="6.879861111111111in"
height="7.997222222222222in"}

![](media/image54.wmf){width="7.0in" height="8.489583333333334in"}

![](media/image55.wmf){width="6.876388888888889in" height="8.30625in"}

![](media/image56.wmf){width="6.836805555555555in"
height="7.997222222222222in"}

![](media/image57.wmf){width="6.916666666666667in" height="8.18125in"}

![](media/image58.wmf){width="7.0in" height="8.489583333333334in"}

![](media/image59.wmf){width="5.5in" height="8.489583333333334in"}

![](media/image60.wmf){width="6.916666666666667in"
height="8.489583333333334in"}

![](media/image61.wmf){width="7.0in" height="8.489583333333334in"}

![](media/image62.wmf){width="7.0in" height="8.489583333333334in"}

## **Payment Management Process Flows** 

![](media/image63.wmf){width="7.0in" height="8.489583333333334in"}

![](media/image64.wmf){width="6.916666666666667in"
height="8.489583333333334in"}

![](media/image65.wmf){width="7.0in" height="8.602777777777778in"}

![](media/image66.wmf){width="6.916666666666667in" height="8.18125in"}

![](media/image67.wmf){width="7.0in" height="8.489583333333334in"}

![](media/image68.wmf){width="5.293055555555555in"
height="8.489583333333334in"}

![](media/image69.wmf){width="6.5in" height="8.602777777777778in"}

![](media/image70.wmf){width="6.0in" height="8.489583333333334in"}

![](media/image71.wmf){width="7.0in" height="8.602777777777778in"}

## **Receivables Management Process Flows**

![](media/image72.wmf){width="7.083333333333333in"
height="8.942361111111111in"}

![](media/image73.wmf){width="7.0in" height="8.675694444444444in"}

![](media/image74.wmf){width="7.043055555555555in"
height="8.563194444444445in"}

![](media/image75.wmf){width="6.959722222222222in"
height="8.563194444444445in"} ![](media/image76.wmf){width="7.0in"
height="8.942361111111111in"}

![](media/image77.wmf){width="6.958333333333333in"
height="8.634027777777778in"}

![](media/image78.wmf){width="7.0in" height="8.942361111111111in"}

![](media/image79.wmf){width="7.083333333333333in"
height="8.942361111111111in"}

![](media/image80.wmf){width="7.0in" height="8.942361111111111in"}

![](media/image81.wmf){width="5.0in" height="8.520833333333334in"}

![](media/image82.wmf){width="7.0in" height="8.747222222222222in"}

![](media/image83.wmf){width="7.083333333333333in" height="8.68125in"}

![](media/image84.wmf){width="7.0in" height="8.989583333333334in"}

![](media/image85.wmf){width="5.0in" height="8.942361111111111in"}

![](media/image86.wmf){width="7.0in" height="8.989583333333334in"}

# Appendix D -- Core Financial System Requirements {#appendix-d-core-financial-system-requirements .Heading}

## **Funds Management Core Financial System Requirements**

![](media/image87.wmf){width="8.997222222222222in" height="5.01875in"}

![](media/image88.wmf){width="8.997222222222222in"
height="5.602083333333334in"}

![](media/image89.wmf){width="8.997222222222222in"
height="5.602083333333334in"}

![](media/image90.wmf){width="8.997222222222222in"
height="3.620833333333333in"}

**[Payment Management Core Financial System Requirements]{.smallcaps}**

![](media/image91.wmf){width="8.736805555555556in"
height="5.461805555555555in"}

![](media/image92.wmf){width="8.989583333333334in"
height="5.611805555555556in"}

![](media/image93.wmf){width="8.635416666666666in"
height="6.4944444444444445in"}

**This page intentionally left blank.**

**[Receivables Management Core Financial System
Requirements]{.smallcaps}**

![](media/image94.wmf){width="8.8in" height="5.240972222222222in"}

![](media/image95.wmf){width="9.79861111111111in"
height="6.497916666666667in"}

![](media/image96.wmf){width="9.779166666666667in" height="6.49375in"}

![](media/image97.wmf){width="9.769444444444444in"
height="6.497916666666667in"}

![](media/image98.wmf){width="9.502083333333333in"
height="5.9534722222222225in"}

**This page intentionally left blank.**

# Appendix E -- Core System Requirements Matrix {#appendix-e-core-system-requirements-matrix .Heading}

  --------------------------------------------------------------------------------------------------------------
  **Req    **Funds        **Payment      **Receivables   **ReimbursablesManagement**   **Reports      **Not
  \#**     Management**   Management**   Management**                                  Management**   Mapped**
  -------- -------------- -------------- --------------- ----------------------------- -------------- ----------
  CMA-01                                                                                              X

  CMA-02                                                                                              X

  CMA-03                                                                                              X

  CMA-04                                                                                              X

  CMA-05                                                                                              X

  CMB-01                                                                                              X

  CMB-02                                                                                              X

  CMB-03                                                                                              X

  CMB-04                                                                                              X

  CMC-01                                                                                              X

  CMC-02                                                                                              X

  CMC-03                                                                                              X

  FBA-01                                                                                              X

  FBA-02                                                                                              X

  FBA-03                                                                                              X

  FBA-04                                                                                              X

  FBA-05                                                                                              X

  FBA-06                                                                                              X

  FBA-07                                                                                              X

  FBA-08                                                                                              X

  FBA-09                                                                                              X

  FBA-10                                                                                              X

  FBA-11                                                                                              X

  FBB-01                                                                                              X

  FBB-02                                                                                              X

  FBB-03                                                                                              X

  FBB-04                                                                                              X

  FBB-05                                                                                              X

  FBB-06                                                                                              X

  FBB-07                                                                                              X

  FBC-01                                                                                              X

  FBC-02                                                                                              X

  FBC-03                                                                                              X

  FBC-04                                                                                              X

  FBC-05                                                                                              X

  FBC-06                                                                                              X

  FBC-07                                                                                              X

  FBC-08                                                                                              X

  FBC-09                                                                                              X

  FBC-10                                                                                              X

  FBC-11                                                                                              X

  FBC-12                                                                                              X

  FBC-13                                                                                              X

  FBC-14                                                                                              X

  FBC-15                                                                                              X

  FBC-16                                                                                              X

  FMC-01   X                                                                                          ** **

  FMC-02   ** **                                                                                      X

  FMC-03   X                                                                                          ** **

  FMC-04   X                                                                                          ** **

  FMC-05   ** **                                                                                      X

  FMC-06   ** **                                                                                      X

  FMC-07   X                                                                                          ** **

  FMC-08   X                                                                                          ** **

  FMC-09   X                                                                                          ** **

  FMC-10   X                                                                                          ** **

  FMC-11   X                                                                                          ** **

  FMC-12   X                                                                                          ** **

  FMC-13   X                                                                                          ** **

  FMD-01   X                                                                                           

  FMD-02                                                                                              X

  FMD-03   X                                                                                           

  FMD-04                                                                                              X

  FMD-05   X                                                                                           

  FMD-06                                                                                              X

  FMD-07                                                                                              X

  FMD-08                                                                                              X

  FMD-09                                                                                              X

  FMD-10                                                                                              X

  FMD-11                                                                                              X

  FMD-12                                                                                              X

  FMD-13                                                                                              X

  FME-01   X                                                                                           

  FME-02   X                                                                                           

  FME-03   X                                                                                           

  FME-04   X                                                                                           

  FME-05                                                                                              X

  FME-06                                                                                              X

  FME-07                                                                                              X

  FME-08   X                                                                                           

  FME-09                                                                                              X

  FME-10   X                                                                                           

  FME-11                                                                                              X

  FME-12   X                                                                                           

  FME-13                                                                                              X

  FME-14                                                                                              X

  FME-15                                                                                              X

  FME-16                                                                                              X

  FME-17                                                                                              X

  FME-18                                                                                              X

  FME-19   X                                                                                           

  FME-20                                                                                              X

  FME-21   X                                                                                           

  FME-22                                                                                              X

  FME-23                                                                                              X

  FME-24   X                                                                                           

  FME-25                                                                                              X

  FME-26                                                                                              X

  FME-27                                                                                              X

  FME-28                                                                                              X

  FME-29   X                                                                                           

  FME-30                                                                                              X

  FME-31                                                                                              X

  FME-32                                                                                              X

  FMF-01                                                                                              X

  FMF-02                                                                                              X

  FMF-03                                                                                              X

  FMF-04                                                                                              X

  FMF-05                                                                                              X

  FMF-06                                                                                              X

  FMF-07                                                                                              X

  FMF-08                                                                                              X

  FMF-09                                                                                              X

  FMF-10                                                                                              X

  FMF-11                                                                                              X

  GLA-01                                                                                              X

  GLA-02                                                                                              X

  GLA-03                                                                                              X

  GLA-04                                                                                              X

  GLA-05                                                                                              X

  GLA-06                                                                                              X

  GLA-07                                                                                              X

  GLA-08                                                                                              X

  GLA-09                                                                                              X

  GLA-10                                                                                              X

  GLB-01   X                             X                                                             

  GLB-02                                                                                              X

  GLB-03                                                                                              X

  GLB-04                                                                                              X

  GLB-05                                                                                              X

  GLB-06                                                                                              X

  GLB-07                                                                                              X

  GLC-01   X                             X                                                             

  GLC-02   X                             X                                                             

  GLC-03   X                             X                                                             

  GLC-04   X                             X                                                             

  GLC-05   X                             X                                                             

  GLC-06   X                             X                                                             

  GLC-07   X                                                                                           

  GLD-01   X                                                                                           

  GLD-02   X                                                                                           

  GLD-03   X                                                                                           

  GLD-04   X                                                                                           

  GLD-05   X                                                                                           

  GLD-06   X                                                                                           

  GLD-07   X                                                                                           

  GLD-08                                                                                              X

  GLE-01                                                                                              X

  GLE-02                                                                                              X

  GLE-03                                                                                              X

  GLF-01                                                                                              X

  GLF-02                                                                                              X

  GLF-03                                                                                              X

  GLF-04                                                                                              X

  GLF-05                                                                                              X

  GLF-06                                                                                              X

  GLF-07                                                                                              X

  GLF-08                                                                                              X

  GLF-09                                                                                              X

  GLF-10                                                                                              X

  GLF-11                                                                                              X

  GLF-12                                                                                              X

  GLG-01                                                                                              X

  GLG-02                                                                                              X

  GLG-03                                                                                              X

  GLG-04                                                                                              X

  GLG-05                                                                                              X

  GLG-06                                                                                              X

  GLG-07                                                                                              X

  GLG-08                                                                                              X

  GLG-09                                                                                              X

  GLG-10                                                                                              X

  GLG-11                                                                                              X

  GLG-12                                                                                              X

  GLG-13                                                                                              X

  PMA-01   X              ** **                                                                        

  PMA-02   X              X                                                                            

  PMA-03                  ** **                                                                       X

  PMA-04   X              X                                                                            

  PMA-05   X              ** **                                                                        

  PMA-06   X              ** **                                                                        

  PMA-07   X              ** **                                                                        

  PMA-08   X              ** **                                                                        

  PMA-09   X              ** **                                                                        

  PMA-10   X              ** **                                                                        

  PMA-11                  ** **                                                                       X

  PMA-12                  ** **                                                                       X

  PMA-13                  ** **                                                                       X

  PMA-14                  ** **                                                                       X

  PMA-15   X              ** **                                                                        

  PMA-16   X              ** **                                                                        

  PMA-17   X              ** **                                                                        

  PMB-01                  X                                                                            

  PMB-02                  X                                                                            

  PMB-03                  ** **                                                                       X

  PMB-04                  X                                                                            

  PMB-05                  X                                                                            

  PMC-01                  X                                                                            

  PMC-02                  X                                                                            

  PMC-03                  X                                                                            

  PMC-04                  X                                                                            

  PMC-05                  X                                                                            

  PMC-06                  X                                                                            

  PMC-07                  X                                                                            

  PMC-08                  X                                                                            

  PMC-09                  X                                                                            

  PMC-10                  X                                                                            

  PMC-11                  X                                                                            

  PMC-12                  ** **                                                                       X

  PMC-13                  X                                                                            

  PMC-14                  ** **                                                                       X

  PMC-15                  ** **                                                                       X

  PMC-16                  X                                                                            

  PMC-17                  ** **                                                                       X

  PMC-18                  ** **                                                                       X

  PMC-19                  X                                                                            

  PMC-20                  ** **                                                                       X

  PMC-21                  X                                                                            

  PMC-22                  X                                                                            

  PMC-23                  ** **                                                                       X

  PMD-01                  X                                                                            

  PMD-02                  X                                                                            

  PMD-03                  ** **                                                                       X

  PMD-04                  ** **                                                                       X

  PMD-05                  ** **                                                                       X

  PMD-06                  ** **                                                                       X

  PMD-07                  X                                                                            

  PMD-08                  X                                                                            

  PMD-09                  ** **                                                                       X

  PMD-10                  X                                                                            

  PMD-11                  X                                                                            

  PMD-12                  X                                                                            

  PMD-13                  X                                                                            

  PMD-14                  ** **                                                                       X

  PMD-15                  X                                                                            

  PMD-16                  ** **                                                                       X

  PMD-17                  X                                                                            

  PMD-18                  ** **                                                                       X

  PMD-19                  ** **                                                                       X

  PMD-20                  X                                                                            

  PMD-21                  X                                                                            

  PMD-22                  X                                                                            

  PMD-23                  X                                                                            

  PMD-24                  X                                                                            

  PMD-25                  X                                                                            

  PMD-26                  X                                                                            

  PMD-27                  X                                                                            

  PMD-28                  X                                                                            

  PMD-29                  ** **                                                                       X

  PMD-30                  X                                                                            

  PMD-31                  X                                                                            

  PMD-32                  ** **                                                                       X

  PMD-33                  ** **                                                                       X

  PMD-34                  X                                                                            

  PMD-35                  X                                                                            

  PMD-36                  X** **                                                                      

  PMD-37                  ** **                                                                       X

  PMD-38                  ** **                                                                       X

  PMD-39                  ** **X                                                                      

  PMD-40                  ** **                                                                       X

  PMD-41                  ** **                                                                       X

  PMD-42                  ** **                                                                       X

  PMD-43                  ** **                                                                       X

  PMD-44                  ** **                                                                       X

  PMD-45                  ** **                                                                       X

  PMD-46                  ** **                                                                       X

  PMD-47                  ** **                                                                       X

  PMD-48                  ** **                                                                       X

  PMD-49                  ** **                                                                       X

  PMD-50                  X                                                                           

  PMD-51                  X                                                                           

  PMD-52                  X                                                                           

  PMD-53                  X                                                                           

  PMD-54                  X                                                                           

  PMD-55                  X                                                                           

  PMD-56                  ** **                                                                       X

  PMD-57                  ** **                                                                       X

  PMD-58                  ** **                                                                       X

  PME-01                  ** **                                                                       X

  PME-02                  ** **                                                                       X

  PME-03                  ** **                                                                       X

  PME-04                  ** **                                                                       X

  PME-05                  ** **                                                                       X

  PME-06                  ** **                                                                       X

  PME-07                  ** **                                                                       X

  PME-08                  ** **                                                                       X

  PME-09                  ** **                                                                       X

  PME-10                  ** **                                                                       X

  RMA-01                                 X                                                             

  RMA-02                                 X                                                             

  RMA-03                                 X                                                             

  RMA-04                                 X                                                             

  RMA-05                                 X                                                             

  RMA-06                                 X                                                             

  RMA-07                                 X                                                             

  RMB-01                                 X                                                             

  RMB-02                                 X                                                             

  RMB-03                                 X                                                             

  RMB-04                                 X                                                             

  RMB-05                                 ** **                                                        X

  RMB-06                                 X                                                             

  RMB-07                                 ** **                                                        X

  RMB-08                                 ** **                                                        X

  RMB-09                                 X                                                             

  RMB-10                                 X                                                             

  RMB-11                                 X                                                             

  RMB-12                                 X                                                             

  RMB-13                                 X                                                             

  RMB-14                                 X                                                             

  RMB-15                                 X                                                             

  RMB-16                                 X                                                             

  RMB-17                                 X                                                             

  RMB-18                                 X                                                             

  RMB-19                                 ** **                                                        X

  RMB-20                                 X                                                             

  RMB-21                                 X                                                             

  RMB-22                                 X                                                             

  RMB-23                                 X                                                             

  RMB-24                                 X                                                             

  RMB-25                                 ** **                                                        X

  RMB-26                                 ** **                                                        X

  RMC-01                                 X                                                             

  RMC-02                                 X                                                             

  RMC-03                                 X                                                             

  RMC-04                                 X                                                             

  RMC-05                                 X                                                             

  RMC-06                                 X                                                             

  RMC-07                                 X                                                             

  RMC-08                                 X                                                             

  RMC-09                                 X                                                             

  RMC-10                                 X                                                             

  RMC-11                                 X                                                             

  RMC-12                                 X                                                             

  RMC-13                                 X                                                             

  RMC-14                                 ** **                                                        X

  RMC-15                                 X                                                             

  RMC-16                                 X                                                             

  RMC-17                                 X                                                             

  RMC-18                                 X                                                             

  RMC-19                                 ** **                                                        X

  RMC-20                                 X                                                             

  RMC-21                                 X                                                             

  RMD-01                                 X                                                             

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  --------------------------------------------------------------------------------------------------------------

# Appendix F -- Financial Management Laws and Regulations {#appendix-f-financial-management-laws-and-regulations .Heading}

Federal Statutes:

*Appropriations Law*

Fundamental, long-standing statutes deal with the appropriation of
monies to agencies from Congress, including the appropriate use and
control of these monies. These statutes deal with the purpose, amount,
and time of appropriations, as well as the availability of the
associated monies. The following summary provides specific citations to
these statutes, their common names, and their requirements.

*Federal Managers' Financial Integrity Act of 1982*

The Federal Managers' Financial Integrity Act (FMFIA) of 1982 amended
the Accounting and Auditing Act of 1950 to require ongoing evaluations
and reports of the adequacy of the systems of internal accounting and
administrative control of each executive agency. FMFIA is comprised of
two parts. OMB Circular A-123, *Management's Responsibility for Internal
Control* (Effective beginning with Fiscal Year 2006) (Revised
12/21/2004), is the primary vehicle for implementing FMFIA in the
executive branch and describes internal control requirements. Agencies
are also required to report annually on whether the agency accounting
system complies with OMB A-127.

The FMFIA requires agency heads to establish controls that reasonably
ensure:

-   Obligations and costs are in compliance with applicable law;

-   Funds, property, and other assets are safeguarded against waste,
    loss, unauthorized use or misappropriation; and

-   Revenues and expenditures are properly recorded and accounted for.

(OMB revised Circular A-123 in 1995 to incorporate ideas from subsequent
management legislation, such as the Chief Financial Officers Act.) The
Circular provides guidance on improving the accountability and
effectiveness of Federal programs and operations by establishing and
reporting on management controls.

*Chief Financial Officers Act of 1990 and Government Management Reform
Act of 1994*

The Chief Financial Officers (CFO) Act of 1990 laid the foundation for
significant financial management reform in the Federal government. The
Act emphasizes strong financial leadership, improved systems of
accounting, financial management and internal control, and reliable
financial information. A key element of the Act is the requirement for
Federal agencies to produce audited financial statements. The Government
Management Reform Act of 1994 (GMRA) expanded financial statement audit
coverage to include department-wide and Government-wide audited
financial statements.

The CFO Act mandates three actions:

-   Strong financial management leadership: The CFO Act established, in
    OMB, the Deputy Director for Management and the Office of Federal
    Financial Management, and created chief financial officer positions
    in major agencies to provide financial management direction;

-   Enhanced financial management systems: The CFO Act mandates that
    agency CFOs develop and maintain agency financial management systems
    that comply with applicable accounting principles, standards, and
    requirements; internal control standards; and requirements of OMB
    and Treasury; and

-   Improved financial information: By requiring agency CFOs to maintain
    systems that report cost information, integrate accounting and
    budgeting, and systematically measure performance, the CFO Act
    emphasizes improved reliability and usefulness of agency financial
    information. Most importantly, the CFO Act requires that financial
    statements be prepared and audited.

*Government Performance and Results Act of 1993*

The Government Performance and Results Act (GPRA) of 1993 holds Federal
agencies accountable for achieving program results and requires them to
identify missions, set goals, measure performance, and report on their
accomplishments.

Under GPRA, each Federal agency must develop and submit a multiyear
strategic plan, which contains the agency's mission statements and
long-term strategic goals. Agencies must also submit annual performance
plans, which include performance goals linked to the budget and
indicators of how performance will be measured. Annual performance
reports, also required under the Act, provide information on the extent
to which the agency met its annual performance goals.

*Federal Financial Management Improvement Act of 1996*

The Federal Financial Management Improvement Act (FFMIA) of 1996
requires agencies to implement and maintain systems that substantially
comply with (1) Federal accounting standards, (2) the United States
Government Standard General Ledger (USSGL) at the transaction level, and
(3) Federal financial management systems requirements. In addition, the
FFMIA requires agencies' auditors to report whether agency systems
comply with FFMIA's systems requirements. Agencies that determine their
systems do not substantially comply must develop and submit remediation
plans to OMB.

To comply with Federal financial management system requirements, OMB
implementation guidance requires that systems meet the Circular A-127
requirements, [JFMIP's Federal Financial Management Systems
Requirements](http://www.jfmip.gov/jfmip/download/systemreqs/propertyfinal.pdf),
and Circular A-130, Appendix III.

*Debt Collection Act of 1982 and Debt Collection Improvement Act of
1996*

The Debt Collection Improvement Act (DCIA) is an extension of the Debt
Collection Act. The purpose of these Acts is to require proper
collection of debts, to authorize the compromise or suspension of some
debts, and to authorize the use of certain collection tools that are
available in the private sector. The use of electronic payment and
offset methods is required.

*Federal Information Security Management Act (FISMA) of 2002 (*[*Public
Law 107-347, Title
III)*](http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_public_laws&docid=f:publ398.106.pdf)

The FISMA reiterates security requirements contained in existing OMB
policies and in Federal laws such as the Computer Security Act of 1987,
the Paper Reduction Act of 1995, and Clinger-Cohen Act of 1996. The Act
mandates that Federal agencies implement an information security program
and designate a senior information security officer. FISMA also
established evaluation and reporting requirements that requires each
agency to report any significant deficiencies and an information
security policy, procedure, or practice.

*Reports Consolidation Act of 2000*

This Act gives OMB the authority to combine financial reports to the
President and Congress that contain performance and accountability
information.

*Clinger-Cohen Act (CCA) --- The Information Technology Management
Reform Act of 1996*

This Act provides that the Government information technology shop be
operated exactly as an efficient and profitable business would be
operated. Acquisition, planning, and management of technology must be
treated as a "capital investment." While the law is complex, all
consumers of hardware and software in the Department should be aware of
the Chief Information Officer's leadership in implementing this statute.

Regulatory Guidance:

*OMB Circular A-11, Preparation, Submission and Execution of the Budget
(6/30/06) Preparing, Submitting, and Executing the Budget (Revised
7/25/2003)*

OMB made major revisions to Circular A-11 that merged the budget
formulation and execution guidance to reinforce the requirement for
agencies to integrate budget and performance and to improve the quality
of their financial information. In addition, A-11 contains new guidance
on managing physical and financial assets.

*OMB Circular A-25, User Charges*

The Circular:

-   Establishes Federal policy regarding fees assessed for Government
    services and for sale or use of Government goods or resources;

-   Provides information on the scope and types of activities subject to
    user charges and on the basis upon which user charges are to be set;
    and

-   Provides guidance for agency implementation of charges and the
    disposition of collections.

*OMB Circular A-123, Management's Responsibility for Internal Control
(Effective beginning with Fiscal Year 2006) (Revised 12/21/2004),
Management Accountability and Control (or Successor Documents)
(6/21/1995)*

This Circular, which is the primary OMB guidance for FMFIA, is described
in the section that relates to that act.

*Prompt Payment Final Rule (Formerly OMB Circular A-125, Prompt Payment)
(9/29/1999)*

The Final Rule, the primary OMB guidance for Prompt Payment Act, is
described in the section related to the specific act.

*OMB Circular A-127, Financial Management Systems (07/23/1993),
Financial Management Systems (or Successor Documents) (7/23/1993)*

This Circular augments FFMIA by specifically mandating that Federal
Agencies implement integrated core accounting and financial management
systems. To be fully integrated, the system must address:

-   Standard data classification (both data and format);

-   Common processes for handling similar accounting events;

-   Consistent internal control mechanisms; and

-   Elimination of duplicate transaction entry.

Circular A-127 also prescribes policies and standards for agencies to
follow in developing, operating, evaluating, and reporting on financial
management systems generally. It incorporates, by reference, Circulars
A-123 and A-130, as well as all federal financial management systems
requirements published by [JFMIP](http://www.jfmip.gov/).

*[OMB Circular
A-129](http://www.whitehouse.gov/omb/circulars/a129/a129rev.html),
Managing Federal Credit Programs (11/2000)*

This Circular prescribes policies and procedures for justifying,
designing, and managing Federal credit programs, and for collecting
non-tax receivables. It sets principles for designing credit programs,
including:

-   Preparation and review of legislation and regulations;

-   Budgeting for the costs of credit programs and minimizing unintended
    costs to the Government; and

-   Improving the efficiency and effectiveness of Federal credit
    programs.

Circular A-129 also sets standards for extending credit, managing
lenders participating in Government guaranteed loan programs, servicing
credit and non-tax receivables, and collecting delinquent debt.

*OMB Circular A-130, Management of Federal Information Resources
(11/28/2000)*

OMB reissued Circular A-130 in revised form in December 2000 as
Transmittal Memorandum No. 4. The expanded version of Circular A-130
provides guidance on the Paperwork Reduction Act, the Clinger-Cohen Act,
the CFO Act, and others. This includes the requirement for all
electronic systems, including financial management systems, to have a
defined association with the agency's enterprise architecture.

The Circular provides specific guidance on collecting and managing
information and records management, including:

-   Electronic information collection;

-   Provision of information to the public;

-   Information dissemination systems; and

-   Information safeguards.

It further mandates agencies to establish a capital planning and
investment control (CPIC) process that links information technology
investments to improved mission performance. The CPIC also establishes
the links among agency processes including strategic planning, IT
planning, enterprise architecture integration, performance planning,
financial management planning pursuant to the Chief Financial Officers
Act of 1990, and budget formulation and execution. Specifically,
sections of\
A-130 cover these four areas:

-   ***Capital planning and investment control*** processes must be
    followed and documented by all agencies. These processes, stemming
    from Clinger-Cohen, must integrate Information Resource Management
    (IRM) strategic and performance plans, financial management plans,
    the agency's IT enterprise architecture, and its budget. The
    agency's process for CPIC should include an IRM strategic plan, an
    IT capital plan, and an IT investment portfolio as described in OMB
    Circular A-11, *Preparation, Submission and Execution of the Budget*
    (6/30/06), *Preparation, Submission and Execution of the Budget*
    (6/30/06), the annual budget circular.

-   ***Enterprise architecture*** framework and planning processes
    require an agency to document (and submit to OMB its current and
    target IT architecture and related support strategies, transition
    roadmaps, and IT and security standards, as well as a summary of the
    information services used throughout the Agency. The enterprise
    architecture framework anticipated by A-130 is driven by the
    business needs of the agency and is composed of layers complying
    with the Federal Enterprise Architecture Framework (FEAF) developed
    by the CIO Council.[^2]

-   ***Ensuring security in information systems*** is accomplished by
    explicitly incorporating security into the enterprise architecture
    and life-cycle planning for systems, and ensuring that security
    supports the agency's business operations. The agency's security
    plan must comply with the Federal Information Security Management
    Act (Public Law 107-347); Title III; policies and procedures
    outlined in Appendix III to A-130, *Security of Federal Automated
    Information Resources*; and the National Institute of Standards and
    Technology (NIST) requirements. Independent advice and comment on
    the security plan must be solicited prior to the plan's
    implementation.

-   ***Information technology acquisition*** requires the use of
    adequate competition in contracting, allocating risk between the
    government and the contractor, and maximizing the return on
    investment. Major information systems should be structured into
    useful segments with narrow scope and brief duration. Off-the-shelf
    software should be used unless analysis clearly documents other
    approaches are more effective.

*Statements of Federal Financial Accounting Standards*

The FASAB was created in 1990 to develop and recommend Statements of
Federal Financial Accounting Standards (SFFASs) for use by the Federal
government. The growing body of SFFAS issued by FASAB is considered to
be generally accepted accounting principles for Federal government
entities.

The accounting standards that have resulted from FASAB's work are
central to effectively meeting financial management improvement goals of
the CFO Act and other legislation. In particular, FASAB's standards for
managerial cost accounting, as described in SFFAS 4, are a primary
source of guidance. This and other FASAB standards foster financial
information and reporting that is understandable, relevant, and reliable
concerning the financial position, activities, and results of operations
for the Federal government and its departments and agencies.
Furthermore, the standards prescribe accounting systems and internal
control that help demonstrate that Federal programs are conducted in
compliance with laws and regulations.

# Appendix G - Contributors  {#appendix-g---contributors .Heading}

## **Table G-1 Funds Management Contributors**

The following list identifies the focus and working group members who
contributed in the development of the Funds Management document.

[]{.mark}

+------------------------+---------------------------------------------+
| [Table G-1. Funds      |                                             |
| Management             |                                             |
| Con                    |                                             |
| tributors]{.underline} |                                             |
+------------------------+---------------------------------------------+
| Organization           | Name                                        |
+------------------------+---------------------------------------------+
| Department of Commerce | Karen McBride                               |
+------------------------+---------------------------------------------+
| Department of          | Sylvester Osineme                           |
| Education              |                                             |
|                        | Winifred Shapiro                            |
+------------------------+---------------------------------------------+
| Department of the      | Jan Smith                                   |
| Interior               |                                             |
+------------------------+---------------------------------------------+
| Department of the      | Holden Hogue                                |
| Treasury               |                                             |
+------------------------+---------------------------------------------+
| Environmental          | Kyana Bundy-Evans                           |
| Protection Agency      |                                             |
|                        | Melajo Kubacki                              |
+------------------------+---------------------------------------------+
| Social Security        | Ron Hallameyer                              |
| Administration         |                                             |
|                        | Richard Hull                                |
+------------------------+---------------------------------------------+
| Office of Management   | Bing Bradshaw                               |
| and Budget             |                                             |
|                        | Kim Farington                               |
|                        |                                             |
|                        | Adam Goldberg                               |
|                        |                                             |
|                        | Teresa Tancre                               |
+------------------------+---------------------------------------------+
| Financial Systems      | Dianne Copeland                             |
| Integration Office     |                                             |
|                        | Michael Ploen                               |
| (formerly JFMIP)       |                                             |
+------------------------+---------------------------------------------+
| Program Office Support | David Fitz                                  |
| (KPMG)                 |                                             |
|                        | Constance Herron                            |
|                        |                                             |
|                        | Ryan Patalune                               |
+------------------------+---------------------------------------------+

##  **Table G-2 Payment Management Contributors** 

The following list identifies the focus and working group members who
contributed in the development of the Payments Management document.

+------------------------+---------------------------------------------+
| [Table G-2. Payments   |                                             |
| Management             |                                             |
| Con                    |                                             |
| tributors]{.underline} |                                             |
+========================+=============================================+
| Organization           | Name                                        |
+------------------------+---------------------------------------------+
| Department of Commerce | Karen McBride                               |
+------------------------+---------------------------------------------+
| Department of          | Angela Butler                               |
| Education              |                                             |
|                        | Danny Harris                                |
|                        |                                             |
|                        | Sylvester Osineme                           |
+------------------------+---------------------------------------------+
| Department of the      | Brian Brotsos (Financial Management         |
| Treasury               | Service)                                    |
|                        |                                             |
|                        | Ed Coia (Financial Management Service)      |
|                        |                                             |
|                        | Vicki Fleming (Financial Management         |
|                        | Service)                                    |
|                        |                                             |
|                        | Andrew Ganahl (Financial Management         |
|                        | Service)                                    |
|                        |                                             |
|                        | Holden Hogue (Financial Management Service) |
|                        |                                             |
|                        | Marcel Jemio (Financial Management Service) |
|                        |                                             |
|                        | Margot Kaeser (Financial Management         |
|                        | Service)                                    |
+------------------------+---------------------------------------------+
| Department of Veterans | Kevin Ruffley                               |
| Affairs                |                                             |
+------------------------+---------------------------------------------+
| Environmental          | Anita Jones                                 |
| Protection Agency      |                                             |
+------------------------+---------------------------------------------+
| Social Security        | Ron Hallameyer                              |
| Administration         |                                             |
|                        | John Shelby                                 |
+------------------------+---------------------------------------------+
| Office of Management   | Kim Farrington                              |
| and Budget             |                                             |
|                        | Adam Goldberg                               |
+------------------------+---------------------------------------------+
| Financial Systems      | Dianne Copeland                             |
| Integration Office     |                                             |
| (formerly JFMIP)       | Dale Miller                                 |
|                        |                                             |
|                        | Mary Mitchell                               |
|                        |                                             |
|                        | Keith Thurston                              |
+------------------------+---------------------------------------------+
| Program Office Support | David Fitz                                  |
| (KPMG)                 |                                             |
|                        | Robert Frank                                |
|                        |                                             |
|                        | Constance Herron                            |
|                        |                                             |
|                        | Ryan Patalune                               |
|                        |                                             |
|                        | Marsha Pollard                              |
+------------------------+---------------------------------------------+

## **Table G-3 Receivables Management Contributors**

Table G-3 lists the individuals who contributed to development of the
Receivables Management Standard Business Process.

+------------------------+---------------------------------------------+
| [Table G-3.            |                                             |
| Receivables Management |                                             |
| Con                    |                                             |
| tributors]{.underline} |                                             |
+========================+=============================================+
| Organization           | Name                                        |
+------------------------+---------------------------------------------+
| Office of Management   | Joanne Choi                                 |
| and Budget             |                                             |
|                        | Kim Farrington                              |
|                        |                                             |
|                        | Adam Goldberg                               |
+------------------------+---------------------------------------------+
| Department of Commerce | Karen McBride                               |
+------------------------+---------------------------------------------+
| Department of Defense  | William Chip (Defense Finance and           |
|                        | Accounting Service)                         |
|                        |                                             |
|                        | Greg Gayer (Defense Finance and Accounting  |
|                        | Service)                                    |
|                        |                                             |
|                        | Nello Lavorini (Business Transformation     |
|                        | Agency)                                     |
+------------------------+---------------------------------------------+
| Department of          | Sylvester Osineme                           |
| Education              |                                             |
+------------------------+---------------------------------------------+
| Department of Housing  | Rhea Riso                                   |
| and Urban Development  |                                             |
+------------------------+---------------------------------------------+
| Department of          | Jamie Cottrell (Federal Aviation            |
| Transportation         | Administration)                             |
|                        |                                             |
|                        | Ed Ramos (Department of Transportation)     |
+------------------------+---------------------------------------------+
| Department of the      | Yvette Dunbar (Bureau of Public Debt)       |
| Treasury               |                                             |
|                        | Holden Hogue (Financial Management Service) |
|                        |                                             |
|                        | Thomas Kobielus (Financial Management       |
|                        | Service)                                    |
|                        |                                             |
|                        | Debbie Schiller (Bureau of Public Debt)     |
|                        |                                             |
|                        | Greg Till (Financial Management Service)    |
+------------------------+---------------------------------------------+
| Department of Veterans | Eric Teal                                   |
| Affairs                |                                             |
+------------------------+---------------------------------------------+
| Environmental          | Valerie Chun                                |
| Protection Agency      |                                             |
|                        | Anita Jones                                 |
+------------------------+---------------------------------------------+
| Federal Communications | Regina Dorsey                               |
| Commission             |                                             |
+------------------------+---------------------------------------------+
| General Services       | Susan Fischer                               |
| Administration         |                                             |
|                        | Terry Gricher                               |
+------------------------+---------------------------------------------+
| Social Security        | Mark Graham                                 |
| Administration         |                                             |
|                        | Ron Hallameyer                              |
|                        |                                             |
|                        | Lynn Spruill                                |
+------------------------+---------------------------------------------+
| Financial Systems      | Dianne Copeland                             |
| Integration Office     |                                             |
| (formerly JFMIP)       | Dale Miller                                 |
+------------------------+---------------------------------------------+
| Program Office Support | David Fitz                                  |
| (KPMG)                 |                                             |
|                        | Robert Frank                                |
|                        |                                             |
|                        | Constance Herron                            |
|                        |                                             |
|                        | Ryan Patalune                               |
+------------------------+---------------------------------------------+

[^1]: Sources are provided if available; otherwise, the term definition
    was developed for clarification of terminology.

[^2]: The FEAF layers describe and link business processes, information
    flows, applications, data descriptions and relationships, and
    technology infrastructure.