# Presentation: 840450

## FFIS & TCAS Data SourcesOffset vs. Direct Charge

**Notes:**
The purpose is this module is to understand the data sources from FFIS and WEB TCAS that provide the information for the Conservation Information System and to review Offset Policy.

## The devil is in the details!

**The devil is in the details!**

**Notes:**
It is critically important to understand the details of the financial data sources in CIS. Not understanding the details makes understanding the reports very frustrating.  

## We speak a foreign language so -- a little terminology discussion first:

**Cost** – Associated salary and benefits based on actual hours 	worked and entered into WebTCAS.
**Budget** – A plan for spending money effectively to 	accomplish well-defined goals.
**Allocation** – budget authority (amount) available to enter 	into obligations in a given year.
**Obligation** – a binding order for goods or services.
**Outlay** – a payment for goods or services received that has 	cleared the bank (Treasury).
**Staff Year** – Full time equivalent (FTE) of hours paid 	divided by the number of “paid” days in the fiscal year.
**Object Class** – Categories in a classification system that 	presents obligations by the items or services purchased.

**Notes:**
Let’s discuss the definitions.
Cost – Associated salary and benefits based on actual hours worked and entered into WebTCAS.
Budget – A plan for spending money effectively to accomplish well-defined goals.
Allocation – budget authority (amount) available to enter into obligations in a given year.
Obligation – a binding order for goods or services.
Outlay – a payment for goods or services received that has cleared the bank (Treasury).
Staff Year – Full time equivalent (FTE) of hours paid divided by the number of “paid” days in the fiscal year.
Object Class – Categories in a classification system that presents obligations by the items or services purchased

## UNIFIED BUDGET

**Notes:**
The Budget Enforcement Act (BEA) was first enacted in 1990 and extended in 1993 and 1997.

The BEA significantly amended the laws pertaining to the budget process.

The Budget Enforcement Act divides spending into two types – 
Discretionary Spending and Mandatory Spending

This act constrains legislation enacted through 2002 that would increase spending or decrease receipts to the budget.

## What are Mandatory Funds?

**What are Mandatory Funds?**

**Funds** **available** **to persons who meet certain requirements**.
- Includes **all**** CCC funded programs**.
- Accounts for **about 2/3 of all**** government spending**.
**Amount is** **included in the authorization**;
- Congress does _**not**_ have to act in order for funds to be available.
**Controlled by “Pay-As-You-Go” (PAYGO) **
**Includes**:  **Farm Price Supports**.

**Notes:**
Let’s Talk about Mandatory Funds.

Funds that are available for payments to persons who meet certain requirements established by law.
Includes all CCC funded programs.
Accounts for about 2/3 of all government spending.
Amount available per year is included in the authorization; therefore, Congress does not have to act in order for funds to be available.
Mandatory spending is controlled by permanent laws. The Budget Enforcement Act requires that all laws enacted through 2002 that effect mandatory spending or receipts must be enacted on a pay as you go basis. This means that if a law increases the deficit or reduces the surplus in the budget year or any of the four following years, another law must be enacted with an offsetting reduction in spending or increase in receipts (taxes) for each year affected.

Includes:  Social Security, Medicare/Medicaid, Unemployment insurance, Federal employee retirement, Food Stamps, Interest on the Public Debt, and Farm Price Supports.

## What are Discretionary Funds?

**What are Discretionary Funds?**

**13 annual  appropriation acts**.
- Congress _**must**_ act in order for discretionary funds to be available.  **If not, no obligations** may be incurred.
- Accounts for **about 1/3 of all government spending**.
- Includes All NRCS Appropriations.
- Controlled through Spending Caps.

**Notes:**
Let’s talk about Discretionary Funds.

Funds available through the 13 annual  appropriation acts.
Congress must act in order for discretionary funds to be available.  If not, no obligations may be incurred.
Accounts for about 1/3 of all government spending.
Includes: 
Conservation Operations (CTA, Soil Survey, Snow Survey, PMC);
Watershed Surveys and Planning; 
Watershed and Flood Prevention Operations (P.L.-566, P.L.-534); 
Watershed Rehabilitation; 
Resource Conservation & Development; and 
Forestry Incentives Program.
Controlled through Spending Caps. Discretionary spending is controlled through the use of CAPS on the amount of money in each of the spending categories. These categories are negotiated between Congress and the President each time the Budget Enforcement Act is amended and extended. The current categories include: Highways, Mass Transit, Conservation and all other discretionary spending. Caps are designed to encourage Congress to appropriate to the amount of the cap, because there is no benefit not to. You may not shift spending from one category to another.

## What is Technical Assistance (TA)?

**In CIS, TA refers to these object classes:**
- 11 - Personnel Compensation
- 12 - Personnel Benefits
- 21 - Travel
- 22 - Transportation of things
- 23 - Rent, communication, and utilities
- 24 - Printing and reproduction
- 25 - Other Services (including agreements)
- 26 - Supplies and materials
- 31 - Equipment
- 32 - Land and structures (excluding easements)
- 42 - Insurance claims and indemnities
- 43 - Interest and dividends
- 44 - Refunds

**Notes:**
These are the Budget Object Classes that make up Technical Assistance. These are major budget object classes used across all agencies in the federal government. They are determined by OMB Circular A-11. This allows comparison across agencies of obligations and outlays.

## What is Financial Assistance (FA)?

**	****In CIS, FA refers to these object classes:**
- 2591 - Construction Contracts
- 2592 - Project Services
- 2691 - Project Materials
- 3211-3219 - Easements
- 33 - Investments and loans
- 41 - Grants
-  	**FA is never “prorated” in CIS to the county or Congressional district.**

**Notes:**
Financial Assistance refers to these Budget Object Classes that are used in the Conservation Information System.

FA is never prorated below state level.

## Direct Funds – how does NRCS get them?

**Direct funds come from NRCS appropriations:**
- Conservation Operations
- Watershed Surveys and Planning
- Watershed & Flood Prevention Operations
- Resource Conservation & Development
- Forestry Incentives Program
- Watershed Rehabilitation Program
**Some of the direct funds come from transfers from CCC and other Federal Agencies:**
- Farm Security and Rural Investment Program
- Rural Abandoned Mine Program

**Notes:**
Direct funds come from NRCS appropriations:
Conservation Operations
Watershed Surveys and Planning
Watershed & Flood Prevention Operations
Resource Conservation & Development
Forestry Incentives Program
Watershed Rehabilitation Program
Some of the direct funds come from transfers from CCC and other Federal Agencies:
Farm Security and Rural Investment Program
Rural Abandoned Mine Program

## Reimbursable Funds – where does NRCS get them?

- Reimbursable funds are received from sources other than appropriations or transfers from other federal agencies.
- Sources include:
- Other USDA Appropriations
- Other Federal Appropriations
- State & Local Government
- Private Entities

**Notes:**
Reimbursable funds are received from sources other than appropriations or transfers from other federal agencies.
Sources include:
Other USDA Appropriations
Other Federal Appropriations
State & Local Government
Private Entities

## What is “cost” in CIS reports?

**What is “cost” in CIS reports?**

**Salary and benefit cost data -- WebTCAS/ACRES**
- Includes dollars for ***actual hours ***_***worked***_** **(hourly rate times hours worked)**, ****by program/activity/modifier** as entered in TCAS by an employee for:
- Basic pay hours **worked**
- Credit hours **worked**
- Comp time **worked**
- Overtime **worked**
**Support data** -- obligations recorded in the accounting system (FFIS) in “support” object classes plus lump sum leave, awards, and agreements .

**Notes:**
Salary and benefit cost data -- WebTCAS/ACRES
Includes dollars for actual hours worked (hourly rate times hours worked), by program/activity/modifier as entered in TCAS by an employee for:
Basic pay hours worked
Credit hours worked
Comp time worked
Overtime worked
Support data -- obligations recorded in the accounting system (FFIS) in “support” object classes plus lump sum leave, awards, and agreements .

## What is an “obligation” in CIS reports?

**What is an “obligation” in CIS reports?**

- Salary and benefit obligation data -- FFIS
- Includes dollars obligated for _*actual hours *__***paid***_**, ****by fund code**, as entered **in the WebTCAS master file** for:
- Basic pay hours **paid**** ****(includes paid leave)**** **
- Credit hours **paid**
- Comp time **paid**
- Overtime **paid**
- Support data -- obligations recorded in FFIS in “support” object classes plus lump sum leave, awards, and agreements .

**Notes:**
Salary and benefit obligation data -- FFIS
Includes dollars obligated for actual hours paid, by fund code, as entered in the WebTCAS master file for:
Basic pay hours paid (includes paid leave) 
Credit hours paid
Comp time paid
Overtime paid
Support data -- obligations recorded in FFIS in “support” object classes plus lump sum leave, awards, and agreements .

We have obligations data from as far back as 1996.

## What is an “outlay” in CIS reports?

**What is an “outlay” in CIS reports?**

**Outlay data comes from FFIS**
- Includes **payments** to employees for           actual hours paid .
- Includes **payments** for obligations in “support” object classes plus lump sum leave, awards, and agreements .
- Includes **all payments made in the current fiscal year**, regardless of the year of the original obligation.

**Notes:**
Outlay data comes from FFIS
Includes payments to employees for actual hours paid .  
Includes payments for obligations in “support” object classes plus lump sum leave, awards, and agreements .
Includes all payments made in the current fiscal year, regardless of the year of the original obligation. (1996, 1997, 1998, 1999, 2000, 2001, and 2002)

## What do I need with cost data?     I am not a “bean counter”

- Helps to establish **budget and program   credibility**
- Assists in the determination of the “**full cost**” of programs
- Shows the programs and activities on which **NRCS employees spend their time**
- Assists with **informed decision-making**
- Identifies needs for **improvements**
- Assists in answering **basic accountability** questions

**Notes:**
Helps to establish budget and program   credibility
Assists in the determination of the “full cost” of programs
Shows the programs and activities on which NRCS employees spend their time
Assists with informed decision-making
Identifies needs for improvements
Assists in answering basic accountability questions

## Why does a state or field office employee care about obligations in FFIS?

**Obligations are orders for goods or services **
**State Conservationists must have budget authority** **(an allocation) before obligations incurred.**
**State Conservationists** **may not exceed the amount allocated in each program**.

**Notes:**
Obligations are orders for goods or services such as contracts, purchase orders, travel, etc.
State Conservationists must have budget authority (an allocation) available before obligations can be legally incurred.
STCs may not exceed the amount allocated in each program.

## What are obligations?

- Obligations are controlled by annual appropriations.
- An agency may not obligate more than has been appropriated, by program.
- Obligations and staff years are reported to Congress.
- Associated performance is reported to Congress.

**Notes:**
Obligations are controlled by annual appropriations.
An agency may not obligate more than has been appropriated, by program.
Obligations and staff years are reported to Congress by appropriation, major object class, source of funding, and geographic breakdown.
Associated performance is reported to Congress by appropriation and geographic location. 

## Why would someone in a state or field office care about outlays?

- You probably don’t, but USDA, OMB, GAO, CBO, and Treasury really do!
- Outlays are the measure of government spending.
- Used to calculate deficits/surpluses:
- Receipts (Taxes) less Outlays = Deficit/Surplus
- Cumulative deficits = National Debt

**Notes:**
You probably don’t, but USDA, OMB, GAO, CBO, and Treasury really do!
Outlays are the measure of government spending.
Used to calculate deficits/surpluses:
Receipts (Taxes) less Outlays = Deficit/Surplus
Cumulative deficits = National Debt

## The National Debt affects all of us!

- The National Debt as of August 26th:
- $6,175,806,295,134.55
- That’s $21,432.17 to every man, woman and child in the United States.
- Treasury suspended G fund investments in April because they were about to exceed the debt ceiling.  They “borrowed” federal employee’s retirement funds for two weeks.

- Mr. Taxpayer

**Notes:**
The National Debt as of August 26th:
$6,175,806,295,134.55
That’s $21,432.17 to every man, woman and child in the United States.
Important to you as an employee. Treasury suspended G fund investments in April because they were about to exceed the debt ceiling.  They “borrowed” federal employee’s retirement funds for two weeks.

## What does direct charge mean?

**Title 31 of the United States Code (1301(a)) requires that all costs associated with implementing a program to be charged to the benefiting program.**
**Examples include:**
**Salary**
**Benefits**
**Travel**
**Training**
**Other Indirect Costs**

**Notes:**
Title 31 of the United States Code (1301(a)) requires that all costs associated with implementing a program to be charged to the benefiting program.  This law is included on EVERY Apportionment and Advice of Allotment NRCS receives from OMB and the Department.
For example:
Salary, benefits, travel, training, supplies, etc. for a soil scientist who performs soil surveys should be “charged” (in the accounting system FFIS) to the Conservation Operations appropriation. Furthermore, NRCS justifies a portion of the Conservation Operations appropriation with a line item for Soil Surveys; therefore, these costs should be “charged” to the Soil Survey program.  If the work is regular NRCS work, it should be “charged” to 02T.  If the work is being performed for another entity, the costs should be “charged” to 02R.

## What is so hard about direct charge?

- Much more **“management”**** **involvement required.
- Many employees **work on several programs****.**
- Many costs **benefit multiple programs.**
- General managers and administrative costs
- Utilities and communications
- Supplies
- State Office and Service Center rent
- Printing
- Postage, NFC and FFIS costs, etc.

**Notes:**
Much more “management” involvement required.
Many employees work on several programs.
Many costs benefit multiple programs.
General managers and administrative costs
Utilities and communications
Supplies
State Office and Service Center rent
Printing
Postage, NFC and FFIS costs, etc.

## How does NRCS manage the difficulties associated with direct charge?

**NRCS implemented “offset” policy many years                     ago.  “Offset” allows costs to be “charged as                    budgeted” based on the following assumptions:**
- Allocations are converted to fundable staff years, by program.
- Fundable staff years, in each program, are converted to performance goals.
- Performance goals are incorporated into business plans.
- Performance plans are monitored to ensure that the proper work is being performed and corrective action is taken (if necessary) to ensure that goals are being met.
- Adjustments are made to the performance plan whenever an allowance holder receives a large change in their allocation that affects fundable staff years, such as EWP funds made available in March.

**Notes:**
NRCS implemented “offset” policy many years ago.  “Offset” allows costs to be “charged as budgeted” based on the following assumptions:
Allocations are converted to fundable staff years, by program.
Fundable staff years, in each program, are converted to performance goals.
Performance goals are incorporated into business plans.
Performance plans are monitored to ensure that the proper work is being performed and corrective action is taken (if necessary) to ensure that goals are being met.
Adjustments are made to the performance plan whenever an allowance holder receives a large change in their allocation that affects fundable staff years, such as EWP funds made available in March.

## Does “offset” satisfy the requirement “to use funds only as intended by Congress”

**Yes, as long as each allowance holder:**
- Accounts for all dollars available including anticipated reimbursements.
- Accounts for all employees being paid.
- Performance is planned by program.
- The plan is worked as planned or well-documented to explain why not.
- Adjustments to allocations that affect fundable staff years are incorporated into the performance and business plans at the same time that they are incorporated into operating budgets.

**Notes:**
Yes, as long as each allowance holder:
Accounts for all dollars available including anticipated reimbursements.
Accounts for all employees being paid.
Performance is planned by program.
The plan is worked as planned or well-documented to explain why not.
Adjustments to allocations that affect fundable staff years are incorporated into the performance and business plans at the same time that they are incorporated into operating budgets.

## Does everyone agree that “offset” satisfies these requirements?

**A GAO audit of NRCS titled “Additional Actions Needed  to Strengthen Program and Financial Accountability reported:  ****...”the policy of charging  as budgeted and not as worked often misstates a project’s costs by underestimating the costs to one account and overstating the costs to another....”**** **

**(GAO/RCED-00-83 dated April 2000) **

**Notes:**
Others who we have to listen to really do care how we manage our finances.

A GAO audit of NRCS titled “Additional Actions Needed  to Strengthen Program and Financial Accountability reported:  ...”the policy of charging  as budgeted and not as worked often misstates a project’s costs by underestimating the costs to one account and overstating the costs to another.  Furthermore, this practice precludes NRCS from providing the Congress and other interested parties with meaningful, useful, and reliable information of the costs of its programs and activities.  Moreover, the Federal Financial Management Improvement Act of 1996 requires that federal agencies follow federal financial accounting standards and that financial management systems support disclosure of the full cost of federal programs and activities.  Specifically,...No 4, Managerial Cost Accounting Standards, is aimed at providing reliable information on the full cost of federal programs, their activities, and their outputs”

## Slide 24

**Notes:**
So how does how my TCAS Timesheet effect Actual Cost Recovery System (ACRES) and Foundation Financial Information System (FFIS) data.  

The hours worked I record as program, activity, modifier and county worked  and the leave I charge are sent to ACRES and the cost is used for the Conservation Information System reports including ACRES reports.

The same hours I am paid for and the leave I record are reported using my assigned Fund Code to FFIS through NFC and are the basis of all of the agencies official financial reports. 

Agency Annual Financial Reports include:
Obligations & FTEs by Organizational Level and Function
Obligations & FTEs by Watershed Project
Obligations & FTEs by Budget Object Class
Reimbursements (Dollars & FTEs) by Source & Activity
Obligations to Academic Institutions

The reasons the agency does not want to go to a salaries and expense account might include:
Program funding does provide the agency additional support and funding for the agency.
A salaries and expense account would likely consist of four major accounting funds, such as Salaries and Support, Operating Costs, Contracts and Agreements, and Motor Vehicles. 
Movement of the money between funds would not be allowed without congressional approval.
Salaries and Support would be offset by any increases in the other three accounting funds, which would result in decreased staffing levels.
State Conservationists would have little ability to effectively manage their funds.

## Meet Mr. NRCS

**Meet Mr. NRCS**

- In pay period 15, Mr. NRCS worked 40 hours on CRP and 40 hours on EQIP
- He entered this information into WebTCAS by program, activity, and modifier
- His assigned “fund code” is CTA-General
- His “fund code” was determined in the cost allocation process and entered into the WebTCAS master record by the timekeeper

**Notes:**
In pay period 15, Mr. NRCS worked 40 hours on CRP and 40 hours on EQIP
He entered this information into WebTCAS by program, activity, and modifier
His assigned “fund code” is CTA-General
His “fund code” was determined in the cost allocation process and entered into the WebTCAS master record by the timekeeper

## What do we see in CIS for Costs?

**Costs associated with 40 hours of Mr. NRCS CRP included here.**

**23,125**

**23,125**

**Costs associated with 40 hours of Mr. NRCS EQIP included here.**

**Notes:**
The hours reported in WEB TCAS are reflected in CIS reports as costs by program, activity, modifier and county worked.

## What are Mr. NRCS “costs” in CIS for pay period 15?

**What are Mr. NRCS “****costs****” in CIS for pay period 15?**

**40 hours** * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for **CRP**
**40 hours** * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for **EQIP**
- Associated benefits will be recorded in both CRP and EQIP benefit “cost” columns based on rate **identified**** **at beginning of fiscal year for each retirement type

**Notes:**
40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for CRP
40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for EQIP
Associated benefits will be recorded in both CRP and EQIP benefit “cost” columns based on rate identified at beginning of fiscal year for each retirement type

## What do we see in CIS for obligations?

**Mr. NRCS dollars and associated hours are included here.**

**Notes:**
This would show up in report 8.1 as TA Obligations

## What are Mr. NRCS “obligations” in CIS for pay period 15?

**What are Mr. NRCS “****obligations****” in CIS for pay period 15?**

**80 hours** * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “obligation” column for **CTA-General**
- Actual benefits will be recorded in the CTA-General benefit “obligation” column based on **actual** charges  to the agency for Mr. NRCS:
- Retirement
- Life Insurance
- Health Insurance
- FICA/Medicare
- COLA (for overseas employees)

**Notes:**
80 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “obligation” column for CTA-General
Actual benefits will be recorded in the CTA-General benefit “obligation” column based on actual charges to the agency for Mr. NRCS:
Retirement
Life Insurance
Health Insurance
FICA/Medicare
COLA (for overseas employees
Note these costs may be responsible for some of the differences between CIS and FFIS.

## Why are there differences?

**Why are there differences?**

- It could be the difference between:
**Credit hours** worked in WebTCAS vs. credit hours paid in FFIS
**Comp time hours** worked in WebTCAS vs. comp time hours paid in FFIS
**Benefit costs** (estimated) in WebTCAS vs.  benefit costs (actual) in FFIS
**Overtime** capped at 1.5 times GS-10 step 01 hourly rate for Washington DC locality in WebTCAS vs. cap applied not to exceed 1.5 times the basic hourly rate for a GS-10/1 in FFIS
**Obligation adjustments **not processed through WebTCAS

**Notes:**
It could be the difference between:
Credit hours worked in WebTCAS vs. credit hours paid in FFIS
Comp time hours worked in WebTCAS vs. comp time hours paid in FFIS
Benefit costs (estimated) in WebTCAS vs. benefit costs (actual) in FFIS
   Overtime capped at 1.5 times GS-10 step 01 hourly rate for Washington DC locality in WebTCAS vs. cap applied not to exceed 1.5 times the basic hourly rate for a GS-10/1 in FFIS 
   Obligation adjustments not processed through WebTCAS

## What causes the most significant differences?

**What causes the most significant differences?**

- “Direct” charge of hours by program/activity/modifier in WebTCAS interfaced into ACRES
- VS
- “Offset” charge of hours by fund code assigned to each employee in the cost allocation process interfaced into FFIS

**Notes:**
“Direct” charge of hours by program/activity/modifier in WebTCAS interfaced into ACRES

VS

“Cost allocation” charge of hours by fund code assigned to each employee in the cost allocation process interfaced into FFIS

## Why are there differences between direct charge of time & cost allocation charge of time?

**Why are there differences between direct charge of time & cost allocation charge of time?**

**Bottom line –**
- By the end of the fiscal year, **direct charge hours should be very close to cost allocation hours** except for those funds in which NRCS was not fully reimbursed for actual work performed

**Notes:**
Bottom line – 
By the end of the fiscal year, direct charge hours should be very close to cost allocation hours except for those funds in which NRCS was not fully reimbursed for actual work performed

## Why aren’t they closer?

**Why aren’t they closer?**

- You have to **plan your work**
- then
- You have to **work your plan**
- This **demonstrates adherence to one of the fundamental laws of Title 31 of the United States Code**: **“Appropriations must be used for the purpose intended by Congress only.”**

**Notes:**
You have to plan your work
	then
You have to work that plan
This demonstrates adherence to one of the fundamental laws of Title 31 of the United States Code: “Appropriations must be used for the purpose intended by Congress only.”

## Where do we go from here?

- Current policy is to use “offset” (called cost allocation in FFIS) for salary, benefits, and most support costs.

**Notes:**
Current agency policy is to use “offset” (called cost allocation in FFIS) for salary, benefits, and most support costs for official agency financial reports.

## Thank you!

***Thank you!***