**Scenario I**

**Basic Trust Fund Accounting**

Scenario I includes transactions and reports illustrating basic accounting for receipts and collections, expenditure transfers, nonexpenditure transfers, and exchange/nonexchange transactions.  FASAB’s SFFAS #7, Accounting for Revenue and Other Financing Sources, prescribes the majority of proprietary accounting contained in this scenario.  (Refer to Scenario IV, Trust Fund Investments, for discussion on investment transactions.)

A basic concept of trust fund accounting is that trust funds do not use USSGL accounts 3100 Unexpended Appropriations or 5700 Expended Appropriations (refer to SFFAS #7, paragraph 213).  At least two justifications support this concept. 

First, trust funds do not receive Treasury appropriation warrants, for which Fiscal Service Form 6200: Appropriation Warrant is issued from the General Fund of Treasury as a result of an appropriation act.  USSGL account 3100 Unexpended Appropriations generally is associated with these types of warrants.  Instead, the source of most trust fund inflows includes receipts and collections that are either deposited directly into trust funds or first collected by a custodial entity.

Second, trust fund receipts predominantly consist of tax receipts (e.g., social security taxes, railroad retirement taxes, and excise taxes), as well as customs duties, fines, penalties, etc.  Collecting entities such as the Internal Revenue Service and the U.S. Customs Service collect these receipts and deposit them into Treasury general fund receipt accounts.

SFFAS #7 states that dedicated tax receipts, as well as amounts transferred-in from collecting entities, should be recorded as revenue, not as part of unexpended appropriations (USSGL 3100).  Furthermore, to account for these receipts as revenue and as unexpended appropriations in the same trust fund account would double-count the amounts as financing sources.  Therefore, all USSGL trust fund guidance (i.e., guidance contained within this Guide) reflects that USSGL account 3100 Unexpended Appropriations and corresponding account 5700 Expended Appropriations are not recorded by trust fund appropriation fund symbols.

USSGL transfer accounts are split between nonexpenditure and expenditure transfers.  This is because Treasury and OMB guidance prescribes different reporting requirements for each type of transfer.  

The four proprietary USSGL accounts established to account for trust fund transfers**are as follows:

5750Expenditure Financing Sources – Transfers-In

5755Non-expenditure Financing Sources – Transfers-In

5760Expenditure Financing Sources – Transfers-Out

5765Non-expenditure Financing Sources – Transfers-Out

For trust fund transfers, the appropriate action would be to either debit or credit the appropriate transfer account, rather than record USSGL accounts 3100 and/or 5700.  Nonexpenditure USSGL accounts 5755 and 5765 capture all trust-to-trust transfers, which, by definition, are nonexpenditure.  This is accomplished via an SF 1151 form.  All nonexpenditure transactions are recorded the same on the proprietary side, but crosswalk differently to the various budgetary reports.  The USSGL accounts recorded in the budgetary transactions for nonexpenditure transfers vary depending on whether the transfer is an appropriation transfer or an allocation transfer.

Expenditure USSGL accounts 5750 and 5760 capture transfers between trust funds and Federal funds (such as an agency’s general fund).  This, by definition, is an expenditure transaction.  However, these transfer accounts are recorded only if the transfer results from a nonexchange transaction, such as a law requiring the transfer.  If the transaction is exchange in nature, then record a revenue or an expense account.  On the budgetary side for expenditure transfers, the entity transferring-out must record an outlay, and the entity transferring-in must record a receipt or an appropriation.

Other USSGL accounts were established to accommodate transfers between trust funds and Federal funds.  They provide the mechanism to transfer financing sources where the funds remain invested for transfer at a later date.  The proprietary USSGL accounts established for this purpose include:

1335 Expenditure Transfers Receivable

2155 Expenditure Transfers Payable

On the budgetary side, the following USSGL account was established:

4114Appropriated Trust or Special Fund Receipts

Trust funds are to use USSGL account 4114 for appropriated receipts in the same way that Federal funds (with the exception of special funds) are to use USSGL budgetary account 4119 Other Appropriations Realized for appropriations received.  USSGL account 4119 is not appropriate for trust funds to record for several reasons.  First, it generally correlates with USSGL proprietary account 3100, which trust funds do not record.  Additionally, USSGL account 4119 usually is associated with the receipt of an appropriation warrant, which trust funds do not receive.  Therefore, trust funds should use USSGL account 4114 for all appropriated trust fund receipts, not USSGL account 4119.

The term “appropriated” is used in the USSGL account title because, although trust funds do not receive actual appropriation warrants, amounts *are* appropriated from various sources.  These sources include appropriations from a general fund receipt account to a trust fund receipt account (via Fiscal Service Optional Form 1017-G: Journal Voucher); from an agency’s general fund to the agency’s trust fund (via expenditure transfer, e.g., OPAC); and from a trust fund receipt account to a trust fund expenditure account.  Therefore, USSGL account 4114 is used to record all trust fund receipts, and is counted as new budget authority on the SF 133.

1. **To record receipts deposited into a trust fund receipt account, which are automatically credited to the corresponding trust fund expenditure account.  (Collections of tax receipts from the public are initially deposited into a Treasury General Fund Receipt Account (i.e. 0152 Excise Taxes) and recorded as custodial revenue by the collecting entity (i.e. IRS).  From there the receipts are appropriated to the trust fund receipt account (via Fiscal Service Optional Form 1017-G: Journal Voucher).  Note that Fiscal Service Form 6200: Appropriation Warrant is not processed.) (TC A186)**

***Budgetary***

4114Appropriated Trust or Special Fund Receipts50,000

4450Unapportioned Authority50,000

***Proprietary***

1010Fund Balance With Treasury50,000

# 5800Tax Revenue Collected50,000

2. **To record the budgetary authority apportioned by OMB.  (TC A116)**

***Budgetary***

4450Unapportioned Authority30,000

4510Apportionments30,000

***Proprietary***

None

3. **To record the allotment of authority.  (TC A120)**

***Budgetary***

4510Apportionments20,000

4610Allotments – Realized Resources20,000

***Proprietary***

None

4. **To record current-year unexpended obligations.  (TC B204)**

***Budgetary***

4610Allotments – Realized Resources15,000

4801Undelivered Orders - Obligations, Unpaid15,000

***Proprietary***

(None)

**5.To record a payable to non-Federal recipients for expenses incurred.  (TC B302)**

***Budgetary***

4801Undelivered Orders - Obligations, Unpaid15,000

4901Delivered Orders - Obligations, Unpaid15,000

***Proprietary***

6100Operating Expenses/Program Costs15,000

2110Accounts Payable15,000

**6.To record a non-expenditure allocation transfer-out of non-invested balances from the parent account to another agency’s trust fund recipient allocation expenditure account.  All trust-to-trust transfers are accomplished via an SF 1151: Nonexpenditure Transfer Authorization.  (TC A214)**

***Budgetary***

4510Apportionments10,000

4175Allocation Transfers of Current-Year Authority for

Non-Invested Accounts10,000

***Proprietary***

5765Nonexpenditure Financing Sources – Transfers-Out10,000

1010Fund Balance With Treasury10,000

**7.To record payment and expenditure of amounts recorded in transaction 5.  This will be reflected on the SF 224: Statement of Transactions.  (TC B110)**

***Budgetary***

4901Delivered Orders - Obligations, Unpaid15,000

4902Delivered Orders - Obligations, Paid15,000

***Proprietary***

2110Accounts Payable15,000

1010Fund Balance With Treasury15,000

**8.To record a non-expenditure appropriation transfer-in from another agency’s trust fund expenditure account.  All trust-to-trust transfers are accomplished via an SF 1151: Nonexpenditure Transfer Authorization.  (TC A250)**

***Budgetary***

4170Transfers – Current-Year Authority7,000

4450Unapportioned Authority7,000

***Proprietary***

1010Fund Balance With Treasury7,000

5755Nonexpenditure Financing Sources – Transfers-In7,000

**9.To record penalties collected from Federal sources.  Receipts are deposited into a trust fund receipt account and automatically credited to the corresponding trust fund expenditure account.  (TC A186)**

***Budgetary***

4114Appropriated Trust or Special Fund Receipts25,000

4450Unapportioned Authority25,000

***Proprietary***

1010Fund Balance With Treasury25,000

5320Penalties, Fines and Administrative Fees Revenue25,000

10. **To record expenditure transfers-in of $5,000 for services provided to other Federal agencies (exchange transaction, not subject to the Economy Act) and $12,000 for amounts appropriated by law (nonexchange transaction).  Both are transferred-in from other TAFSs.  Report expenditure transfers on the SF 224: Statement of Transactions.  (TC A264)**

***Budgetary***

4114Appropriated Trust or Special Fund Receipts17,000

4450Unapportioned Authority17,000

***Proprietary***

1010Fund Balance With Treasury17,000

5200Revenue from Services Provided  5,000

5750Expenditure Financing Sources – Transfers-In12,000

**11.To record expenditure transfers-out of $2,000 for expenses incurred to run a program (exchange transaction) and $1,000 for amounts transferred by law (nonexchange transaction).  Report expenditure transfers on the SF 224: Statement of Transactions.  (TC A116, A120, A266)**

***Budgetary***

4450Unapportioned Authority3,000

4902Delivered Orders - Obligations, Paid3,000

***Proprietary***

5760Expenditure Financing Sources – Transfers-Out1,000

6100Operating Expenses/Program Costs2,000

1010Fund Balance With Treasury3,000

**12.To record a payable for a nonexchange expenditure transfer-out to the agency's general fund.  (TC  A116, A259)**

***Budgetary***

4450Unapportioned Authority4,000

4901Delivered Orders - Obligations, Unpaid4,000

***Proprietary***

5760Expenditure Financing Sources – Transfers-Out4,000

2155Expenditure Transfers Payable4,000

**13.To record the actual nonexchange expenditure transfer-out from transaction #12 via OPAC.  The SF 224: Statement of Transactions will reflect this transaction.  (TC A261)**

***Budgetary***

4901Delivered Orders - Obligations, Unpaid4,000

4902Delivered Orders - Obligations, Paid4,000

***Proprietary***

2155Expenditure Transfers Payable4,000

1010Fund Balance With Treasury4,000

**Budgetary Pre-Closing Adjusted Trial Balance (FACTS II ATB):**

**Budgetary Closing Entries:**

**C1.To record the consolidation of actual net-funded resources.  (TC F204)**

4175Allocation Transfers of Current-Year Authority for

Non-Invested Accounts10,000

**4201Total Actual Resources - Collected89,000**

4114Appropriated Trust or Special Fund Receipts92,000

4170Transfers – Current-Year Authority  7,000

**C2.To record the closing of unobligated balances to unapportioned authority.  (TC F210)**

4610Allotments – Realized Resources5,000

4450Unapportioned Authority5,000

**C3.To record the closing of Expended Authority - Paid.  (TC F214)**

4902Delivered Orders - Obligations, Paid22,000

4201Total Actual Resources - Collected22,000

**Budgetary Post-Closing Trial Balance:**

## Proprietary Pre-Closing Trial Balance (FACTS I Trial Balance):

**Proprietary Closing Entries:**

**C1.To record the closing of revenues and expenses to cumulative results of operations.  (TC F228)**

****5200Revenue from Services Provided  5,000

5320Penalties, Fines and Administrative Fees Revenue25,000

5750Expenditure Financing Sources – Transfers-In12,000

5755Nonexpenditure Financing Sources – Transfers-In  7,000

5800Tax Revenue Collected50,000

**3310Cumulative Results of Operations67,000**

5760Expenditure Financing Sources – Transfers-Out  5,000

5765Nonexpenditure Financing Sources – Transfers-Out10,000

6100Operating Expenses/Program Costs17,000

**Proprietary Post-Closing Trial Balance:**

**SF 133: Report on Budget Execution and Budgetary Resources (Quarter 4):**

1.Budget Authority

A.Appropriations   (4114E)92,000

D.Net Transfers, Current Year Authority Realized   (Net 4170E, 4175E)(3,000)  

2.Unobligated Balance Brought Forward

3.Spending Authority from Offsetting Collections (gross)

4.Recoveries of Prior Year Obligations

5.Temporarily Not Available Pursuant to Public Law

6.Permanently Not Available

**7.Total Budgetary Resources89,000**

8.Obligations Incurred   (4902E)22,000

9.Unobligated Balance (available)   (4610E)  5,000

10.Unobligated Balance Not Available (4450E)62,000

**11.Total, Status of Budgetary Resources****89,000**

12.Obligated Balance, Net as of October 1

13.Obligated Balance Transferred, Net

14.Obligated Balance, Net, End of Period

15.Outlays 

A.Disbursements   (4902E)22,000

B.Collections

**USSGL 2108: Year-end Closing Statement:**

Column 5Post-Closing Unexpended Balance (1010E)67,000

Column 11Unobligated Balance (4450E, 4610E)67,000

**Program and Financing Schedule (P&F)****:**

**Obligations by Program Activity**

1000Total new obligations (4902E)22,000

**Budgetary Resources Available for Obligation**

2140Unobligated balance available, start of year         0

2200New budget authority(gross) (sum 4000 to 6990)99,000

2395Total new obligations (-) (from line 1000)22,000

2499 Unobligated balance carried forward, end of year (4450E, 4610E of parent

and recipient)77,000

**New Budgetary Authority (Gross), Detail**

4026Appropriation (trust fund, definite) (4114E) 92,000

4100Transferred to other accounts (4175E-parent)(10,000)

4200Transferred from other accounts (4170E, 4175E-recipient) 17,000

7000Total new budget authority (gross) (4114E, 4170E, 4175E) 99,000

**Memorandum Entries**

9201Total investments, start of year (par) (1610B)         0

9202Total investments, end of year (par) (1610E)         0

**OMB Form and Content Statements**

**OMB Form and Content Statements (continued)**

� SFFAS #7 - Accounting for Revenue and Other Financing Sources, paragraphs 60 and 213

� TFM Vol. I Part 2 - Chapter 2000;  OMB Circular A-34 Sections 12.10 and 12.11 (dated November 3, 2000)

� For USSGL account definitions, refer to Section II, Accounts and Definitions, of TFM S2-01-02 (as updated).

� TFM Vol. I Part 2 - Chapter 2000

� Refer to TFM Vol. I Part 2 - Chapter 2000 for the distinction between the different types of nonexpenditure transfers. 

� TFM Vol. I Part 2 - Chapter 2000;  OMB Circular A-34 Section 12.11 (dated November 3, 2000)

� The transactions in this scenario combine the activity of the receipt and expenditure accounts.  The receipt-expenditure account relationship is described in more detail in the Introduction of the Guide.

� This scenario assumes that the entire trust fund is subject to apportionment.  For trust fund activity that is not subject to apportionment, credit USSGL account 4620 - Unobligated Funds Not Subject to Apportionment.

� Allocation transfers are posted to the same proprietary USSGL accounts as appropriation transfers, but different budgetary USSGL accounts are used (see transaction 8).

� Refer to Scenario V, Treasury-Managed Trust Fund Allocation Accounts, for allocation transfers of invested balances, as well as TFM S2-01-02 (as updated) for comprehensive allocation transfer transactions.

� Typically, expenditure transfers-in that do not fall under the Economy Act are recorded into trust fund receipt accounts.  The receipts are then automatically credited to the corresponding trust fund expenditure account (for trust funds designated in Treasury's FAST book as available).

� The USSGL entries for budgetary fund control and obligations for trust funds are the same as those published in TFM S2-01-02 (as updated).  For purposes of illustration, only the final results are shown here.

� Same as footnote 7.

� Per OMB Circular A-11, Section 82.15 (dated July 19, 2000), P&F data for allocation receiving accounts must be combined with the parent account.  For example, as illustrated above, USSGL account 4175 is reported on lines 4100 and 4200; however, since this P&F data is combined with the recipient account, USSGL account 4175 nets to zero on line 7000 (total).

� When preparing consolidated statements, perform intra-agency elimination entries for expenditure and nonexpenditure transfers.

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June 2001