# Presentation: 436476

## Intragovernmental Accounting and Eliminations Process

- 2007 Federal Investments & Borrowings Seminar
- April 12, 2007
**Presented by:  Ella Hughes-Bailey**
**	****	****	****        ****ella.hughes-bailey@fms.treas.gov**
*Financial Management Service,*
*Governmentwide Accounting*

## Topics of Discussion

- What are Intragovernmental Transactions?
- Impact of Intragovernmental Transactions on the Financial Report of the U.S. Government (FR)
- Investments & Borrowings Reciprocal Categories
- Quarterly Intragovernmental Process
- Yearend Intragovernmental Process
- Tools to Resolve Borrowings and Investments** **Differences

-       What are Intragovernmental Transactions?Transactions between two different Federal Government entities (includes both *interdepartmental* and *intradepartmental* transactions).

| Types of Intragovernmental Transactions |  |
| --- | --- |
| Fiduciary Categories | Non-Fiduciary Categories |
| Investment in Treasury Securities with BPD  | Transfers  |
| Borrowings from Treasury (BPD & FFB) | Buy/Sell
 |
| FECA Transactions with DOL |  |
| Employee Benefits Transactions with OPM |  |

## Impact of Intragovernmental Transactions on the Financial Report on the U.S. Government (FR)

- Unreconciled Intragovernmental Transactions are Still a Material Weakness at the Consolidated Federal Government Level
- Impact of Agencies Intragovernmental Reconciliation on the FR
- Resolving Intragovernmental Transactions Continue to Remain a Difficult Challenge

## Investments and Borrowings Reciprocal Categories (RC)

| F/S | RC | Description | Accounting Impact |
| --- | --- | --- | --- |
| BS | 01 | Investments in Treasury/BPD Securities | Assets/Liabilities related to Principle, Discount, Premium, Amortization, Debt |
| BS | 02 | Interest on Investments (BPD) with Treasury | Assets/Liabilities related to Interest Receivable/Payable |
| SONC
SOCNP | 03 | Interest on Investments (BPD) with Treasury | Revenue/Expense
Gains/Losses |
| SONC
SOCNP | 05 | Interest on Borrowings (BPD & FFB) with Treasury | Revenue/Expense |
| SOCNP | 06 | Federal Borrowings | Gains/Losses |
| BS | 17 | BPD/FFB Borrowings from Treasury | Asset/Liabilities related to Loans Receivable/Payable |

## QuarterlyIntragovernmental Process

**Federal Program Agencies, Confirms Fiduciary Balances in IFCS**** **
- 		***Reminder:****  IFCS recertifications are due by April 30, 2007*
**Verifying Agencies “F” Transactions Submissions**
- 		***Reminder:***  Files must me submitted in the required format per TFM
**FMS Provides IRAS Reports to Agencies to Facilitate Reconciliations**
- 		***Change:****  Beginning 3**rd** quarter FY 2007, verifying agencies will generate IRAS reports**	*
**Agencies Submits Status of Disposition Certification to FMS**
- 		***Reminder:****  Unresolved confirmed vs. confirmed differences  > $50 M will require *
*                                  **a CFO action plan for the 3**rd** Quarter, FY 2007*
*	**	****Change:****     Unknown explanation of differences > $50  will also require a CFO action plan*
*                                  **for the 3**rrd** Quarter, FY 2007*
**FMS Provides Comparative Status of Disposition Report to Agencies**
**	****	**

## Examples ofInvestments & Borrowings Reporting Differences(1st Quarter 2007)

| 
RC | 
Description | Providing Agency | Receiving Agency | Net Difference |
| --- | --- | --- | --- | --- |
| 01 |  Federal Debt/Investments                | Treasury 
$0 Billion | Agency A
$3.8 Billion |  
$3.8 Billion
 |
| 17 | Loans Receivable/Payable | Treasury
$108.9 Billion | Agency B
$105.6 Billion | 
$3.3 Billion |
| 01 | Federal Debt/Investments | Treasury  
$25.4 Billion | Agency C              $24.2 Billion  | 
$1.2 Billion |
| 01 | Federal Debt/Investments | Treasury
$1.5 Billion | Agency D
$2.3 Billion | 
$0.8 Billion |
| 01 | Federal Debt/Investments | Treasury
$8.8 Billion | Agency E
$8.1 Billion | 
$0.7 Billion |
| 01 | Federal Debt/Investments
 | Treasury
$1.6 | Agency F
$1.1 | 
$0.5 Billion |

## Yearend Intragovernmental Process

- Verifying Agencies Identify Intragovernmental Trading Partners by Federal Line Item in GFRS Module 4
- Verifying Agencies Generates IRAS Reports Based on Closing Package Data
- CFOs Certify *Closing Package Material Differences/Status of Disposition Certification Report*
- FMS Provides Agencies Intragovernmental Comparative Closing Package Explanations of Differences Report
**	****	**

## Changes to Yearend Process

**CFO Representation**
**Due 3****rd**** Quarter (August 7, 2007) Instead of Yearend  **
**IG Agreed Upon Procedures (Audit Requirements)**
**IGs Specifies Preferred Option for Implementation in FY 2007**
**	****	****Option 1 – IG AUPs**
**	****	****Option 2 – IG AUPs, Performance Audit or Internal Control                                 ****	****                   Reviews **
**Options 1 or 2  Due August 29, 2007 **
**Based on 3****rd**** Quarter Data Instead of After FR is Issued**

## Tools to ResolveInvestments and Borrowings Differences

**OMB and Treasury Intragovernmental Reporting Requirements & Guidance**
**	****     ****	****    **
**OMB Circular A-136, Financial Reporting Requirements**
**OMB Bulletin 06-03, Audit Requirements for Federal Financial Statements**
**OMB Memorandum M-03-01, Business Rules for Intragovernmental Transactions, Dated November 13, 2006**
**Treasury Financial Manual, Part 2, Chapter 4700, Agencies Reporting Requirements for the Financial Report of the United States Government**
**Treasury Bulletin 2007-03, Intragovernmental Business Rules, Effective FY 2007**
**Federal Intragovernmental Transactions Accounting Policies Guide**
**Agencies Policies and Procedures**
**Frequent Communication with Trading Partners**
**Intragovernmental Dispute Resolution Committee**

## Quarterly Reporting Key Dates

| 
Item | 
Required Action | Quarters |  |  |
| --- | --- | --- | --- | --- |
|  |  | 2nd | 3rd | 4th |
| 1 | IFCS Opens | 04-09-07 | 07-09-07 | 10-09-07 |
| 2 | IFCS Closes | 04-24-07 | 07-24-07 | 10-19-07 |
| 3 | Agencies “F” Transactions Files Due to FMS | 04-24-07 | 07-24-07 | 10-19-07 |
| 4 | FMS Provides IRAS Reports to Agencies | 04-30-07 |  |  |
|  | Agencies Generates Quarterly Reports |  | 07-31-07 | 10-25-07 |
| 5 | Agencies Submits Quarterly Status of Disposition Certification Due to FMS | 05-07-07 | 08-07-07 | N/A |
| 6 | FMS  Provides Comparative Status of Disposition to Agencies | 05-10-07 | 08-09-07 | N/A |
| 7 | CFO Representations are Due |  | 08-07-07 |  |
| 8 | Audit Procedures are Due |  | 08-29-07 |  |

## TentativeFYE 2007 Intragovernmental Key Dates

| Due Date | Description |
| --- | --- |
| 11-16-07
( Midnight e.s.t.) | IG/IPA Opines on Closing Package, including Trading Partner Note (Module 4) in GFRS |
| 11-21-07 | Verifying Agencies Generates Intragovernmental Reporting and Analysis (IRAS) reports based on closing package data to agencies |
| 11-26-07 | CFOs certify the Closing Package Material Differences/Status of Disposition Certification Report |
| 11-29-07 | FMS provides Intragovernmental Comparative Closing Package Explanations of Differences Report to CFOs & IGs |

## In Closing . . .

**AGENCIES WHO RECONCILE**
** ****DURING THE YEAR**
**ARE MORE LIKELY TO HAVE**
**RECONCILED BALANCES**
**AT YEAREND!**

## Questions!