**CANCELLATIONS**

**Available Trust or Special Funds With Invested Relationships**

**Effective Date**

The effective date for new USSGL accounts 4356, “Cancellation of Appropriation from Invested Balances,” and 4357, “Cancellation of Appropriated Amounts Receivable From Invested Special or Trust Funds,” is fiscal 2007, with early implementation available for fiscal 2006.

**Overview**

This scenario illustrates the accounting for cancellations of available trust or special fund Treasury Appropriation Fund Symbols (TAFS) that have an investment relationship with another TAFS.  A good example is that of Treasury-Managed Trust Funds (TMTF).  Treasury-Managed Trust Funds maintain “corpus” accounts that primarily collect and invest earmarked receipts on behalf of another trust fund recipient entity.  Those recipient trust fund entities are responsible for running the programs of that entity.  In most cases, the TMTF TAFS maintains a payable on the books and the receiving TAFS maintains a receivable on the books, representing authority that resides with the receiving TAFS, however, the invested fund balance remains with the TMTF until the receiving TAFS is ready to disburse.  Although fund balance is not to be transferred until needed for disbursement, the receiving TAFS may, on occasion, have a minimal residual balance remaining in USSGL 1010 “Fund Balance With Treasury.”  Therefore, two new USSGL accounts are needed to accommodate this activity.

**USSGL 4356, “Cancellation of Appropriation from Invested Balances,”** is needed to account for the cancellation of unobligated balances in the receiving TAFS represented by fund balance (i.e. USSGL 1010 “Fund Balance With Treasury”).  The movement of fund balance from the receiving TAFS back to the invested TAFS is accomplished via SF 1151: Nonexpenditure Transfer Authorization.

**USSGL 4357, “Cancellation of Appropriated Amounts Receivable From Invested Special or Trust Funds,”** is needed to account for the cancellation of unobligated balances in the receiving TAFS represented by a receivable in the receiving TAFS and a payable in the invested TAFS.  There is NO movement of fund balance with this activity.

This scenario follows USSGL TFM S2-06-02a, fiscal 2007 crosswalks (2006 P&F crosswalk).  The proposed new USSGL accounts are bolded throughout the scenario.  The scenario is illustrative in nature and does not reflect all types of trust or special fund activity.  Refer to USSGL TFM S2-06-02a for a complete listing of valid USSGL transactions.

**New USSGL Accounts**

**(Effective Fiscal 2007, Available for Early Implementation Fiscal 2006)**

**Account Title**:Cancellation of Appropriation From Invested Balances

**Account Number**:4356

**Normal Balance**:Credit

**Definition**:  The amount of appropriated receipts in a trust or special fund expenditure account that is cancelled and returned to the originating invested trust or special fund from which the amount was originally derived.  The amounts are to be returned via SF 1151: Nonexpenditure Transfer Authorization.

**Account Title**:Cancellation of Appropriated Amounts Receivable From Invested Trust or Special Funds

**Account Number**:4357

**Normal Balance**:Credit

**Definition**:  The amount of appropriated receipts in a trust or special fund expenditure account, represented as a receivable from an invested trust or special fund, that is cancelled.  There is no movement of fund balance.

**The following USSGL accounts are used in this scenario:**

# USSGL Scenario

# 5th Expired Year (2006)

# 5th Expired Year (2006)

It is the end of the 5th expired year.  The Receiving TAFS must 1) return all remaining fund balance to the Transferring account, and must 2) cancel all remaining authority and balances.

1.  To record the cancellation of unobligated expired balances represented by fund balance.  This transfer is accomplished via SF 1151:  Nonexpenditure Transfer Authorization.  Transactions of this nature are reflected by the Receiving TAFS as a “cancellation” on the SF 133 and P&F, and as a “return of fund balance” on the USSGL 2108.

2.To record the cancellation of unobligated expired balances represented by receivables/payables.

# 5th Expired Year (2006)

# 5th Expired Year (2006)

# CLOSING ENTRIES

# 5th Expired Year (2006)

# CLOSING ENTRIES

# 5th Expired Year (2006)

**CLOSING ENTRIES (continued)**

# 5th Expired Year (2006)

# 5th Expired Year (2006)

# Budgetary Reports

# 5th Expired Year (2006)

**Budgetary Reports**

# 5th Expired Year (2006)

# Budgetary Reports

# 5th Expired Year (2006)

# OMB Form and Content Statements

# 5th Expired Year (2006)

# OMB Form and Content Statements

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August 2006