**[Handling Cost Overruns:]{.underline}**

The initial guidance indicated that cost overruns would be recorded in
610099 with the offset to 299099.  Therefore, for cross walk purposes,
BSC 8132 will be split between 610000 and 610099 dependent on the amount
of cost overruns, if any.  At the same time, for most non-predominate
funds this would result in a change to the amount recorded in the
specific fund type in BSC 8123.  For most non-predominate funds, BSC
8132 (cost) is offset by 8123 (payments).  In STARS we cannot record
payments that exceed obligations at the detailed funding level. 
Therefore, the guidance noted that the 610099 must be offset to 299099. 
However, we must remember that BSC 8123 (SGL 579004) must agree with the
amount of cash draw downs cleared through the checks paid letter of
credit with Treasury (ICs will offset refund collections to 8123 as
well).  The ICs do not know the specific funds that the cleared checks
were actually charged to.  For ease of reporting, the ICs will have
payments equal to cost for the non-predominate funds (8123 = 8132).  The
amount of payments (8123) recorded to the predominate fund will be the
amount remaining after the initial spread to the non-predominate funds. 
When the payment split has been completed, total 8123 must tie to check
paid letter of credit draw downs (offset by refund collections).  Under
STARS this will result in the contractors having to record more payments
(579004) to the predominate fund type if they had cost overruns in the
non-predominate funds.  Below are examples of operating overruns in a
non-predominate fund, and a predominate fund, and P&E overruns in a
predominate and a non-predominate fund:

**[Example A: Operating Overrun in Non-Predominate Fund]{.underline}**

Assumptions:  Contactor A had Letter of credit draw downs of \$100,000
that cleared Treasury during the month.  The contractor's predominate
fund is YA.  The contractor has two other funds: TC and SA.  In fund
type TC, Contractor A had a cost overrun of \$1,000. 

[DISCAS                                  STARS]{.underline}

[Non-Predominate Funds]{.underline}

TC - 8132= 28,000                               TC - 610000 = 27,000   
TC - 610099= 1,000

TC - 8123=28,000                                TC - 579004= 27,000    
TC - 299099 = 1,000    

SA - 8132= 30,000                               SA - 610000 = 30,000

SA - 8123 = 30,000                              SA - 579004 = 30,000

[Predominate fund YA]{.underline}

YA - 8132 = 80,000                              YA - 610000 = 80,000

YA - 8123 = 42,000                              YA - 579004 = 43,000

YA - liability = 38,000                         YA - liability = 37,000

Total 8123=100,000                              Total 579004 = 100,000

**[Example B: Operating Overrun in a Predominate Fund]{.underline}**

Assumptions:  Contactor A had Letter of credit draw downs of \$100,000
that cleared Treasury during the month.  The contractor's predominate
fund is YA. The contractor has two other funds: TC and SA. In fund type
YA, Contractor A had a cost overrun of \$1,000. 

[DISCAS                                  STARS]{.underline}

[Non-Predominate Funds]{.underline}

TC - 8132= 28,000                               TC - 610000 = 28,000

TC - 8123=28,000                                TC - 579004= 28,000     

SA - 8132= 30,000                               SA - 610000 = 30,000

SA - 8123 = 30,000                              SA - 579004 = 30,000

[Predominate fund YA]{.underline}

YA - 8132 = 80,000                              YA - 610000 = 79,000,
YA - 610099 = 1,000

YA - 8123 = 42,000                              YA - 579004 = 42,000

YA - liability = 38,000                         YA - liability = 38,000

Total 8123=100,000                              Total 579004 = 100,000

**[Example C: P&E Overrun in a Predominate Fund]{.underline}**

Assumptions:  Contactor A had Letter of credit draw downs of \$100,000
that cleared Treasury during the month.  The contractor's predominate
fund is YA. The contractor has two other funds: TC and SA. In fund type
YA, Contractor A had operating costs of \$50,000. Also in fund type YA,
Contractor A had P&E costs of \$30,000 which included an overrun of
\$1,000.

[DISCAS                                  STARS]{.underline}

[Non-Predominate Funds]{.underline}

TC - 8132= 28,000                               TC - 610000 = 28,000

TC - 8123=28,000                                TC - 579004= 28,000     

SA - 8132= 30,000                               SA - 610000 = 30,000

SA - 8123 = 30,000                              SA - 579004 = 30,000

[Predominate fund YA]{.underline}

YA - 8133 = 30,000                  YA - 172001 = 29,000, YA - 610099 =
1,000

51 -- 2311 = 30,000 YA -- 880201 = 29,000 (same sign of 172001)

51 -- 8133 = 30,000 YA -- 880101 = 29,000 (reverse sign of 880201)

YA -- 8132=50,000 YA -- 610000 = 50,000

YA - 8123 = 42,000                  YA - 579004 = 42,000

YA - liability = 38,000              YA - liability = 38,000

Total 8123=100,000                  Total 579004 = 100,000

**[Example D: P&E Overrun in a Non-Predominate Fund]{.underline}**

Assumptions:  Contactor A had Letter of credit draw downs of \$100,000
that cleared Treasury during the month.  The contractor's predominate
fund is YA. The contractor has two other funds: TC and SA. In fund type
TC, Contractor A only had P&E costs of \$28,000 which included an
overrun of \$1,000. 

[DISCAS                                  STARS]{.underline}

[Non-Predominate Funds]{.underline}

TC -- 8133 = 28,000                TC - 172001 = 27,000, TC -- 610099 =
1,000

51 -- 2311 = 28,000 TC -- 880201 = 27,000 (same sign of 172001)

51 -- 8133 = 28,000 TC -- 880101 = 27,000 (reverse sign of 880201)

TC -- 8123 = 28,000                TC -- 579004 = 27,000, TC -- 299099 =
1,000     

SA -- 8132 = 30,000                  SA - 610000 = 30,000

SA - 8123 = 30,000                  SA - 579004 = 30,000

[Predominate fund YA]{.underline}

YA - 8132 = 80,000                              YA - 610000 = 80,000

YA - 8123 = 42,000                              YA - 579004 = 43,000

YA - liability = 38,000                         YA - liability = 37,000

Total 8123=100,000                              Total 579004 = 100,000