REVOLVING FUND

EFFECTIVE FISCAL 2023

REVOLVING FUND

EFFECTIVE FISCAL 2023

REVOLVING FUND 

EFFECTIVE FISCAL 2023

PREPARED BY:

GENERAL LEDGER AND ADVISORY BRANCH

FISCAL ACCOUNTING OPERATIONS

BUREAU OF THE FISCAL SERVICE

U.S. DEPARTMENT OF THE TREASURY

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# Background

The Office of Management and Budget (OMB) defines the term revolving fund as a fund that conducts continuing cycles of business-like activity, in which the fund charges for the sale of products or services and uses the proceeds to finance its spending, usually without requirement for annual appropriations.[footnoteRef:1]  There are three types of revolving funds: Public enterprise funds, intragovernmental revolving funds, and trust revolving funds.  [1:  OMB Circular A-11, Section 20.3, “What special terms must I know?”] 

· Public enterprise funds – business-like activity with the public.

· Intragovernmental revolving funds – business-like activity with other Government entities.

· Trust revolving funds – business-like activity primarily with the public but also designated as a trust fund by law.

It is important to remember that revolving funds operate on a reimbursable basis when working capital (undisbursed cash) is available and cannot be disbursed into a negative cash position in anticipation of Federal or non-Federal reimbursements due to the Antideficiency Act.[footnoteRef:2]  [2:  OMB Circular A-11, Section 20.12, “What do I need to know about reimbursable work?”] 

This scenario portrays the transactions both with other Government entities and with the public.  There are four federal funds referenced in this document.  The agency no-year general fund TAFS represents the Performing Agency whereas the Ordering Agency will represent the buying entity of IAA’s with the intragovernmental revolving fund. The scenario also references a clearing account and a deposit fund to be used in certain collection activities.

Section 20.10 of OMB Circular No. A-11 (A-11) addresses the obligational authority and liquidation derived from reimbursable authority from Federal resources. The OMB Circular No. A-11 can be found at:

Circulars | The White House

This scenario portrays transactions in a revolving fund.  Transactions highlight the following points:

· Start-up capital appropriated to a revolving fund from the general fund of the Treasury.

· Budget authority provided through offsetting collections.

· Cash shortfalls when budget authority remains unobligated. 

· Appropriation transfers from an appropriated agency general fund.

· Availability of funds as applied to reimbursable agreements between ordering and performing entities.

· Posting of advances without orders.

· Purchasing and selling inventory held for resale.

· Adjusting entry to write an unfilled customer order from a federal source down to obligations against the order due to an expiring appropriation of the ordering entity.

· At several points in the presentation, it mentions “invoice cannot be submitted for payment at this time...” but this does not mean that the scenario recommends being non-compliant with the Prompt Payment Act.[footnoteRef:3] If the invoice is required to be submitted for payment, refer to OMB Circular A-11, section 145. [3:  31 U.S.C. Section 3901] 

The following accounts will be used in this scenario.  Refer to the U.S. Government Standard General Ledger for accounts, account descriptions, accounting transactions and crosswalks reports ( The U.S. Standard General Ledger (treasury.gov).   In addition, each transaction in the scenario is coded with transaction numbers identified in Section III of the USSGL. 

Listing of USSGL Accounts Used in This Scenario 

Illustrative Transactions

PRE-CLOSING ADJUSTING ENTRIES

Revolving Fund

Pre-Closing Trial Balance

 Year 1

Financial Statements Year 1:

Revolving Fund Reclassified Financial Statements – Year 1:

Note: Effective FY 2021, the Reclassified Balance Sheet is the same as the Balance Sheet. Therefore, the Reclassified Balance Sheet is not presented in this scenario. 

Closing Entries

Revolving Fund

Post-Closing Trial Balance

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