United States

Office of

Personnel Management

The Federal Government’s Human Resources Agency

Retirement and Insurance Service

 Financial Management Letter

 

Number: F-99-08 Date: September 30, 1999

Subject: Accounting for and Reporting Imputed Costs

In Financial Management Letter F-99-06, we discussed two principal causes for the difficulties we

experienced at the end of fiscal year 1998 in reconciling the intragovernmental transactions related

to the Federal employee benefit programs with employing agencies. We would like to present a

third, and also apparently wide-spread, cause for these difficulties: the incorrect accounting for

and reporting of “imputed costs”.

For the Civil Service Retirement System, the Federal Employees Health Benefits Program, and

Federal Employees Life Insurance Program, imputed costs are the excess of the costs actually

incurred by employing agencies for covered employees over the total contributions made by and

for covered employees.

For example, the cost incurred in 1998 by employing agencies for “regular” CSRS

coverage was 24.2 percent of basic pay -- this was the “cost factor” furnished in

Financial Management Letter F-98-07. On the other hand, only 14 percent of basic pay

was actually contributed by and for regular CSRS-covered employees in 1998. Thus,

employing agencies should have recognized the difference between 24.2 and 14

percent of basic pay [10.2 percent of the basic pay of the covered employees] as an

imputed cost. Since the cost of FERS is fully funded by the contributions by and for

covered employees, employing agencies had no FERS-related imputed costs.

Thus, if an agency had 20 regular CSRS covered employees during 1998, who were paid $2

million of basic pay, that agency’s imputed cost would have been $204,000

[$2 million times 10.2%].

Agencies must record imputed costs related to the Retirement, Health Benefits, and Life

Insurance Programs as a charge to Standard General Ledger (SGL) account 6730G – Imputed

Cost and a corresponding credit to SGL account 5780G - Imputed Financing Sources. If this

entry is posted correctly, the balance on the books of the employing agency in the accounts

6730G and 5780G will be equal. It is critical that you ensure that the balances in these

accounts are equal before submitting your 1999 FACTS reporting.

Based on the example above, the illustrative agency would post the following entry to

record its imputed cost related to CSRS coverage:

6730G (00) Imputed Cost 204,000

 5780G (00) Imputed Financing Sources 204,000

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System
Note the “00” in the above illustrative entry. For SGL accounts designated as “G”

[intragovernmental], agencies are required to use the two-digit department code of their “trading

partner” for FACTS reporting. In 1998, some agencies used the OPM partner code “24” as the twodigit trading partner when reporting to FACTS the balances in accounts 5780G and 6730G. This is

incorrect and contributed to intragovernmental account balance elimination difficulties!! It is

essential, when reporting the balances in accounts 5780G and 6730G to FACTS, that agencies use

partner code “00”, NOT “24”.

For further information, see the Intragovernmental Fiduciary Transactions Accounting Guide at

www.fms.treas.gov/cfs/dev/index.html. If you have any questions, please call us on 202-606-0606 or

email us at finance@opm.gov.

Robert A Yuran, Chief

Financial Policy Staff

Retirement and Insurance Service

 

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System