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This chapter describes how agencies provide data for the Financial Report of the United States Government (FR) using the Governmentwide Financial Report System (GFRS) and the Federal Agencies' Centralized Trial-Balance System (FACTS I). It also includes the Financial Management Service's (FMS's) fiscal 2009 Closing Package methodology, the Federal intragovernmental transactions process, and requirements for electronically submitting preclosing adjusted trial-balances (ATBs).

Section 4701-Scope and Applicability

All agencies must provide FMS with required fiscal yearend data that will be used to prepare the FR. All verifying agencies (see Figure 1) must submit their financial data using the Closing Package process via GFRS and FACTS I. All nonverifying agencies must submit FACTS I ATB data and must complete GFRS Notes and Other FR Data.

GFRS uses a Closing Package methodology that has been developed to:

• Capture each agencies' Closing Package information and link the agencies' comparative, audited consolidated, department-level financial statements to the FR;
  
  AND
  
  
• Resolve material weaknesses identified by the Government Accountability Office (GAO).

The Chief Financial Officer (CFO) or designee of each verifying agency must prepare and submit the Closing Package data for fiscal 2009 and fiscal 2008 via GFRS at the department level and must verify its consistency with the comparative, audited consolidated, department-level financial statements. The Inspector General (IG) of each verifying agency must opine on the Closing Package data, entered by the CFO into GFRS, as to its consistency with the comparative, audited consolidated, department-level financial statements. Verifying agencies with a yearend other than September 30 are subject to alternate audit procedures as outlined in subsection 4705.55.

All agencies (verifying and nonverifying) must submit preclosing ATBs via the FACTS I Internet application on the Government On-Line Accounting Link System (GOALS) II. Agencies must submit their ATBs at the Treasury appropriation/fund group level using proprietary U.S. Standard General Ledger (USSGL) accounts (see Appendix 11). The ATB data from verifying agencies is used for research and analysis purposes during the compilation of the FR.

GFRS compiles the information from the FACTS I submissions for nonverifying agencies into a set of "generic" financial statements that are included in the consolidated FR. Nonverifying agencies must prepare and submit note data based on the amounts from the "generic" financial statements compiled in GFRS.

Reporting requirements in this chapter are grouped as follows:

• Section 4705 includes Closing Package requirements;
  
  
• Section 4706 includes intragovernmental requirements;
  
  AND
  
  
• Section 4707 includes FACTS I requirements.

Section 4702-Authority

Section 405 of the Government Management Reform Act of 1994 [31 U.S.C. 331(e)(1)] requires that the Secretary of the Treasury annually prepare and submit to the President and the Congress an audited financial statement for the preceding fiscal year. This statement must cover all accounts and associated activities of the executive branch of the Federal Government. Section 114 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 3513a) requires each executive branch agency to furnish financial and operational information as the Secretary of the Treasury may stipulate.

These mandates do not apply to the legislative and judicial branches of the Federal Government. However, Treasury strongly encourages these entities to submit ATBs, GFRS Notes, and Other FR Data, as applicable.

Section 4703-Definition of Terms

Adjusted Trial-Balance (ATB)-This is a list of USSGL accounts with attributes and preclosing adjusted balances prepared at a specified date (yearend). Agencies submit ATBs by fund group and must include USSGL accounts listed in numeric order. The USSGL account balances should reflect preclosing adjusting entries. The total sum of the debit balances must equal the total sum of the credit balances in the ATB. Agencies must include the required attributes with the appropriate USSGL accounts (see Appendix 11).

Allocation Transfer-This is the amount of budget authority transferred from one agency, bureau, or account that is set aside in a transfer appropriation account to carry out the purposes of the parent appropriation or fund.

ATB Code-This is a code that consists of a department, a bureau, and a four-digit Treasury appropriation/fund group. This is a unique identifier code for a record in the Master Appropriation File (MAF).

Attribute-This is a modifier that further describes a USSGL account to meet a specific reporting requirement. Agencies capture this information at the transaction level. The following are attributes included in Appendix 11 to further modify a USSGL account:

A-This is an attribute of a USSGL account balance that indicates the amount is not reported on the Statement of Custodial Activity or custodial footnote.

F-This is an attribute of a USSGL account balance that results from transactions between Federal Government entities included in the FR. These often are referred to as "intragovernmental transactions." The USSGL account reported on an ATB with attribute "F" must have a two-digit partner code (see the department codes in Appendix 5) that identifies the trading partner at the department level.

N-This is an attribute of a USSGL account balance that results from transactions not with a Federal Government entity included in the FR.

S-This is an attribute of a USSGL account balance that indicates the activity is related to the Statement of Custodial Activity or custodial footnote.

T-This is an attribute of a USSGL account balance that indicates the balance being reported is nonexchange revenue. Nonexchange revenue arises primarily from exercise of the Government's power to demand payments from the public (for example, taxes, duties, fines, and penalties) but also includes voluntary donations and other inflows of resources.

X-This is an attribute of a USSGL account balance that indicates the balance being reported is exchange revenue. Exchange revenue arises when a Federal entity provides goods and services to the public or to another Federal entity for a price. Exchange revenue includes most user charges other than taxes. Another term for exchange revenue is "earned revenue."

Budget Functional Classification-This system classifies budget resources by function and subfunction. It groups budget authority and outlays of budget and off-budget Federal entities in terms of the national needs being addressed.

Each three-digit budget subfunction (BSF) code contained in the MAF represents a subfunction grouped under 1 of 19 functions. The Office of Management and Budget (OMB) groups each of the 19 functions under the 5 superfunctions presented in the Budget of the United States Government. Each ATB is associated with a single BSF identified in the MAF record. (See Appendix 9 for a list of valid BSFs.)

Closing Package-This is a methodology designed to link agencies' comparative, audited consolidated, department-level financial statements to the FR. The Closing Package is the data submitted by each verifying agency for inclusion in the FR.

Deposit Fund Accounts-Agencies use these accounts to hold the following:

• Money the Government has withheld from payment for goods or services provided;
  
  
• Deposits received from outside sources in cases where the Government acts solely as a banker, fiscal agent, or custodian;
  
  AND
  
  
• Money the Government has withheld awaiting distribution based on a legal determination or an investigation.

Financial Statement Template-This template is a format defined by each agency based on its comparative, audited consolidated, department-level financial statement line items and USSGL crosswalks.

General Fund Receipt Account-This is a receipt account credited with all collections that are not earmarked by law for another account for a specific purpose. These collections are presented in the President's Budget of the United States Government as either governmental (budget) receipts or offsetting receipts. These include taxes, customs duties, and miscellaneous receipts (GAO, A Glossary of Terms Used in the Federal Budget Process, September 2005, GAO-05-734SP). There are numerous General Fund receipt accounts that are described in the Federal Account Symbols and Titles (FAST) Book. See the FAST Book Web site at http://www.fms.treas.gov/fastbook.

Interdepartmental Balance-This USSGL account balance results from a transaction between trading partners included in the FR that are not in the same department.

Intradepartmental Balance-This USSGL account balance results from a transaction between trading partners in the same department.

Intragovernmental-These transactions and/or balances result from business activities conducted by two different Federal Government entities included in the FR. Interdepartmental and intradepartmental are subsets of intragovernmental.

Nonverifying Agencies-Agencies not included in Figure 1.

Probable Likelihood of Loss-This term implies that the future event or events are more likely than not to occur, with the exception of pending or threatened litigation and unasserted claims. For pending or threatened litigation and unasserted claims, the future confirming event or events are likely to occur. If a negative outcome is probable, the agency must record a liability on its books for the estimated amount of loss. The estimated liability may be a specific amount or a range of amounts. If some amount within the range is a better estimate than any other amount within the range, then the agency should recognize that amount as a liability and should disclose the range of possible loss as well as the nature of the contingency in its financial statement notes. If no amount within the range is a better estimate than any other amount, then the agency should recognize the minimum amount in the range as a liability and should disclose the range and a description of the nature of the contingency in its financial statement notes. See Federal Accounting Standards Advisory Board (FASAB) Statements of Federal Financial Accounting Standards (SFFAS) No. 5 and No. 12.

Reasonably Possible Likelihood of Loss-This term implies that the chance of the future event or events occurring is more than remote but less than probable. If it is reasonably possible that the agency will incur a loss, the agency must disclose the nature of the contingency and an estimate of the possible liability, an estimate of the range of the possible liability, or a statement that such an estimate cannot be made. See FASAB SFFAS No. 5 and No. 12.

Reciprocal Category (RC)-This is a set of Closing Package financial statement Federal line items that will be used to perform eliminations at the Governmentwide level (see Appendix 6).

Reclassified Financial Statement-This is a "generic" agency financial statement format used across the Government. Agencies "reclassify" or move amounts from their comparative, audited consolidated, department-level financial statement line items to the Closing Package reclassified financial statement line items. For nonverifying agencies, these statements are system-generated using FACTS I ATB data.

Remote Likelihood of Loss-This term implies that the chance of the future event or events occurring is slight. If only a remote chance of loss is possible, the agency need not record a liability nor provide a note disclosure. See FASAB SFFAS No. 5 and No. 12.

Special Fund Receipt Accounts-Agencies use these accounts for collections earmarked by law for a specific purpose.

Suspense Accounts-Agencies use these accounts to temporarily hold collections and, in certain suspense accounts, disbursements. They use these accounts pending clearance to the applicable receipt or expenditure account in the budget. A fiscal year "F" preceding the last four digits of the fund symbol identifies a suspense account.

Treasury Appropriation/Fund Group-This four-digit identifier corresponds to the Treasury account symbol found in the FAST Book. Agencies report most ATBs at the Treasury appropriation/fund group (for exceptions, see subsection 4707.20c). The Treasury appropriation/ fund group combines all fiscal years reported for each agency's appropriation or fund account symbol.

Treasury Appropriation Fund Symbol (TAFS)-This combination of numbers denotes the responsible agency, period of availability, and fund classification according to a prescribed system of account classification and identification.

Use of Central Accounting Data (UCAD)-UCAD is authoritative data collected in Treasury's central accounting system and presented in report format to resolve intragovernmental differences. This data includes appropriation warrants, nonexpenditure transfers, fund balance with the Treasury, etc.

United States Standard General Ledger (USSGL) Data-This is FACTS I ATB data that can be viewed in GFRS to assist agencies in completing their Closing Packages, and for nonverifying agencies to complete notes and other FR data. The financial data in the Closing Packages are based on the agencies' comparative, audited consolidated, department-level financial statements. See the USSGL Web site at http://www.fms.treas.gov/ussgl.

Verifying Agencies-These agencies consist of the 24 major CFO Act agencies and 11 other agencies material to the FR.

See Figure 1 for the list of verifying agencies.

Section 4704-FR Processing Key Dates

See Figure 2, FR Processing Key Dates, for submission and reporting dates.

Section 4705-Closing Package Requirements

Verifying agencies must:

• Reclassify all line items and amounts on their comparative, audited consolidated, department-level Balance Sheet, Statement of Net Cost/Income Statement, Statement of Changes in Net Position, and Statement or Note on Custodial Activity (if applicable) to the Closing Package reclassified financial statement formats (see Appendix 2). Statement of Social Insurance information will be reported in GFRS Module GF006, FR Notes (see Figure 3 and refer to subsection 4705.20c for details).
  
  Note: The Statement of Social Insurance is one of the basic financial statements to which the IG of the verifying agency, if applicable, must opine as to its consistency with the comparative, audited consolidated, department-level financial statement.

• List Closing Package line item amounts identified as Federal (items to be eliminated in the Governmentwide consolidation) by trading partner and amount (see Appendix 6).
  
  
• Report Notes dependent upon the Reclassified Balance Sheet line items and other Notes required in the FR (see Appendix 3).
  
  
• Disclose other information not contained in the primary FR financial statements and Notes required to meet the FASAB standards (see Appendix 4).
  
  
• Provide explanations for any data that has changed by the FMS established threshold or more between fiscal 2008 and fiscal 2009 as required by GFRS.
  
  
• Provide to FMS an electronic copy of the draft financial statements when the copy is provided to OMB if not available on the OMB's MAX Federal Community Web site. Notify FMS of additional updates to the agency's financial statements as they are made available on OMB's MAX Web site.
  
  
• Contact FMS, or be contacted by FMS, to determine reporting procedures for any adjustments to their Closing Package data after November 16, 2009, or after December 15, 2009 (for verifying agencies with an extension in accordance with OMB Memorandum M-10-04).

4705.10-GFRS System Access

The GFRS Internet application on GOALS II requires a user ID and password. The address for the GFRS Internet application on GOALS II is https://fmsapps.treas.gov/ias.

Agencies can apply for a user ID and password by submitting a GOALS II Enterprise System Access Request (ESAAS) Form. Contact the GWA Customer Assistance Group for information at 202-874-8270.

4705.15-GFRS Reportable Data

4705.15a-Preparation of Financial Statement Template

Verifying agencies must update, via GFRS Module GF001, Financial Statement Template, the USSGL crosswalk logic to the comparative, audited consolidated, department-level Balance Sheet, Statement of Changes in Net Position, Statement of Net Cost/Income Statement, and Statement or Note on Custodial Activity (if applicable).

Note: The Statement of Social Insurance is contained in GFRS Module GF006, FR Notes. Refer to subsection 4705.20c for details and to whom the section applies.

4705.15b-The Closing Package

Figure 3 depicts the Closing Package process. FMS will use the agencies' Closing Packages to prepare the FR.

CFOs of the verifying agencies and nonverifying agencies must submit all Closing Package data via the GFRS Internet application on GOALS II to FMS for fiscal 2009 reporting.

4705.20-Reclassification of Verifying Agencies' Financial Statements

Verifying agencies must enter and reclassify their comparative, audited consolidated, department-level Balance Sheet, Statement of Net Cost/Income Statement, Statement of Changes in Net Position, and Statement or Note on Custodial Activity (if applicable) to the formats in the three Closing Package statements presented in Appendix 1, Reclassified Financial Statements and Line Item Descriptions. Appendix 1 describes the Closing Package financial statement line items. Appendix 2 includes examples of how to reclassify agency line items to the Closing Package format. This description provides guidance when reclassifying amounts from agency line items to Closing Package line items. For example, FMS requires that agencies include two line items on the Statement of Net Cost or the Income Statement to facilitate the reclassification of this statement, "Total Gross Cost" and "Total Earned Revenue." These lines are the sum of all program lines for "Gross Cost" and "Earned Revenue" reported on the Statement of Net Cost.

GFRS uses a normal balance concept. The normal balance is the regular balance of a line item and is either a debit or credit as determined by the account type selected. For example, an asset and a liability would carry a debit and a credit "normal" balance, respectively. All numbers must be entered as positive in GFRS unless the balance of that line is abnormal, then the amount will be entered as a negative. (Refer to Appendix 11 for the normal balance of a USSGL account.) The normal balance attribute is used to determine the appropriate stored value of manually entered amounts.

Verifying agencies report the line items on their financial statements based on what is most material and useful to them. These line items may not match line items on the FR for several reasons. For example, the FR line items may not apply to the agency, the amounts could be immaterial at the agency level, or the agency may find it useful to include more detail than the FR reports.

4705.20a-Custodial Activity

SFFAS No. 7, paragraph 353, states:

Disposition of revenue to other entities: custodial transfers.-Revenue, primarily nonexchange revenue, may be collected by an entity acting on behalf of the General Fund or another entity within the Government on whose behalf it was collected. The collecting entity accounts for the disposition of revenue as part of its custodial activity. These custodial transfers, by definition, do not affect the collecting entity's net cost of operations or operating results, nor are they part of the reconciliation between its obligations and net cost of operations. (The receiving entity recognizes the revenue as nonexchange or exchange revenue depending on its nature, according to the applicable revenue standards.)

For exchange revenue with virtually no cost, see SFFAS No. 7, paragraph 140. The custodial revenue is reported by the collecting agency on the Statement of Custodial Activity or on the Custodial Activity Note.

However, for exchange revenue collected for others with related cost incurred, agencies should follow the guidance from SFFAS No. 7, paragraph 137, which states:

As a general rule, exchange revenue transferred to others must be offset against the collecting entity's gross cost to determine its net cost of operations. Exchange revenue reduces the net cost of operations incurred by the entity in producing outputs, regardless of whether the entity keeps the exchange revenue for its own use or transfers it to another operating entity or the General Fund. Likewise, exchange revenue reduces the net cost of the entity's operations to the taxpayer regardless of its disposition. Therefore, all exchange revenue related to the cost of operations must be deducted from gross cost to determine the net cost of operations for the entity.

Furthermore, SFFAS No. 7, paragraph 138, states:

Any exchange revenue that is transferred to others, however, does not affect the collecting entity's net position. Therefore, as required by the standards for other financing sources, such exchange revenue is recognized as a transfer-out in calculating the entity's operating results.

At the Governmentwide level, these collections are recognized as revenue.

Verifying agencies that report a Statement or Note on Custodial Activity in their comparative, audited consolidated, department-level financial statements will reclassify exchange revenue without associated costs (virtually no cost) and nonexchange revenue from the Statement or Note on Custodial Activity to the Closing Package line items on the Statement of Changes in Net Position. From the Sources of Collections section of the Custodial Statement or Note, reclassify all nonexchange revenue lines to "Other taxes and receipts" and exchange lines to "Miscellaneous earned revenue" (with the exception of customs duties, and taxes collected by the Department of the Treasury, the Department of Labor, and the Department of Homeland Security). From the Disposition of Collections section, reclassify all Federal lines to "Expenditure Transfers-Out of Financing Sources" and non-Federal lines to "Other taxes and receipts."

Agencies must report the custodial revenue as non-Federal, "N," at the time of collection from the public (that is, the Sources of Collection section). The disposition of the custodial revenue to other Federal agencies must be reported as Federal "F" in the reclassified Statement of Net Cost or Statement of Changes in Net Position when reporting in GFRS. Any Federal agency receiving custodial revenue from the collecting agency must report this revenue as Federal "F" in its reclassified Statement of Net Cost or Statement of Changes in Net Position when reporting in GFRS. If the collecting agency retains a portion of the custodial revenue, the agency also must report this revenue as Federal "F" in its reclassified Statement of Net Cost or Statement of Changes in Net Position when reporting in GFRS and must use its own trading partner code.

Agencies that have collections that do not meet Statement or Note on Custodial Activity reporting requirements should refer to the General Fund Receipt Account Guide on the USSGL Web site (http://www.fms.treas.gov/ussgl/index.html) for further guidance.

4705.20b-Earmarked Funds

Earmarked funds are financed by specifically identified revenues, often supplemented by other financing sources, which remain available over time. These specifically identified revenues and other financing sources are required by statute to be used for designated activities, benefits, or purposes and must be accounted for separately from the Government's general revenues in accordance with SFFAS No. 27.

At the Governmentwide level, the U.S. Government Balance Sheet will show separately the portion of the net position attributable to earmarked funds. The standard further requires the disclosure of condensed information on assets, liabilities, and net cost for all earmarked funds.

Verifying agencies will reclassify earmarked fund activity from the agency's Balance Sheet to the Closing Package line items designated for earmarked funds on the Balance Sheet. Additional note disclosure information on earmarked funds also is required in the Closing Package, Appendix 3, Note 22, to be completed by both verifying and nonverifying entities with earmarked fund activity. Agencies should report each earmarked fund with a net position exceeding $5 billion separately.

4705.20c-Social Insurance

The Statement of Social Insurance is required by SFFAS Nos. 25, 26, and 28 to be presented as a basic financial statement. Agencies will provide the Statement of Social Insurance data in GFRS Module GF006, FR Notes. The information related to the Statement of Social Insurance and the underlying significant assumptions will be included in GFRS Module GF006, FR Notes. All remaining social insurance information will be contained in GFRS Module GF007, Other FR Data.

Note: The information related to the Statement of Social Insurance appears in GFRS Module GF006, FR Notes, because GFRS was not designed with a separate financial statement module for the Statement of Social Insurance. As such, verifying agencies cannot enter information related to the Statement of Social Insurance into a separate financial statement module. Since the Statement of Social Insurance is one of the basic financial statements to which the IG of the verifying agency, if applicable, must opine as to its consistency with the comparative, audited consolidated, department-level financial statement, verifying agencies must enter the information related to the Statement of Social Insurance into GFRS Module GF006, FR Notes.

The Social Insurance Program reporting agencies are required to report the Statement of Social Insurance and the related notes in the FR Notes, and in Other FR Data in the Closing Package. The Social Insurance Program reporting agencies are the Social Security Administration (SSA), the Department of Health and Human Services (HHS), the Railroad Retirement Board (RRB), and the Department of Labor (DOL).

Most of the social insurance information pertaining to Social Security and Medicare can be obtained from SSA (the 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds) and from HHS (the 2009 Annual Report of the Boards of the Trustees of the Federal Hospital Insurance and the Federal Supplementary Medical Insurance Trust Funds). SSA, HHS, RRB, and DOL are required to report the draft data of Social Insurance in the GFRS Closing Package no later than September 23, 2009.

4705.20d-Fiduciary Activities

In a fiduciary activity, the Government collects or receives and subsequently manages, protects, accounts for, invests, and/or disposes of cash or other assets in which non-Federal individuals or entities have an ownership interest that the Government must uphold. Non-Federal individuals and entities must have an ownership interest in the cash or other assets held by the Government under provision of loan, regulation, or other fiduciary arrangement. The ownership interest must be enforceable against the Government, and judicial remedies must be available for the breach of the Government's fiduciary obligation. Agencies should account for this fiduciary activity, which includes the collection of cash or other assets and their distribution to the non-Federal owners and/or their beneficiaries, in accordance with SFFAS No. 31. In accordance with the standard, there is relatively similar Government activity that is specifically excluded from the SFFAS No. 31 reporting requirements such as: payroll withholdings and garnishments; unearned revenue; and seized property.

The standard requires that the Government's fiduciary activities and a description thereof be included as a note disclosure. In addition, the Government must disclose that the fiduciary assets are not assets of the Government and are, therefore, not recognized on the U.S. Government Balance Sheet. However, at the Governmentwide level, the U.S. Government Balance Sheet will recognize a liability for fiduciary cash held in fund balance with Treasury and a liability for fiduciary investments in U.S. Treasury securities that are included in the agencies' fiduciary assets. Since these fiduciary assets are not recognized on the agencies' Balance Sheets, no verifying or nonverifying entities will be required to enter this fiduciary liability line item in the Reclassified Balance Sheet, in the Closing Package Module GF003.

However, both verifying and nonverifying entities with fiduciary activity must enter the agency fiduciary activity note disclosure information in the Closing Package Notes to the FR Financial Statements (Module GF006) (see Appendix 3, Note 27).

Note: The reporting requirements related to fiduciary activities, as required by SFFAS No. 31, are distinct and unrelated to the reporting and other requirements related to the "fiduciary" category of intragovernmental transactions as stated in subsections 4705.80b, 4706.15, 4706.20, 4706.20a, 4706.20b, 4706.25, and 4706.30d.

4705.20e-Reporting of Government Account Series (GAS) Investments With the Bureau of the Public Debt Purchased by Agencies Using Deposit Fund Monies

Verifying agencies that invest deposit fund monies in GAS investments must adhere to the following three bullets for the portion of the investments that are not accounted for in the agencies' fiduciary note for fiscal 2009 data. Verifying agencies must adhere to the following three bullets for fiscal 2008 reporting.

• The deposit fund investments in GAS to the Closing Package Federal line titled, "Federal Investments." Identify this amount using trading partner code "9900" in the Federal Trading Partner Note (Module GF004).
  
  
• The liability with the public related to GAS investments by deposit funds to the Closing Package Federal line titled, "Other liabilities (without reciprocals)." Identify this amount using trading partner code "9900" in the Federal Trading Partner Note (Module GF004).
  
  
• The revenue from earnings on deposit fund investments in GAS that the Federal Government is authorized to keep to the Closing Package Federal line titled, "Federal securities interest revenue." Identify this amount using trading partner code "2000" in the Federal Trading Partner Note (Module GF004).

Nonverifying agencies are directed to subsection 4707.20b for reporting GAS investments with deposit fund monies.

4705.25-Special Basis of Accounting

Verifying agencies that use another comprehensive basis of accounting (OCBOA), other than FASAB standards, as the basis for their audited financial statement data, or that do not have a fiscal yearend of September 30, are collectively referred to as OCBOA agencies in GFRS. OCBOA agencies must perform an additional step in GFRS before reclassifying their financial statement line items to the Closing Package line items. OCBOA agencies must restate their latest set of audited financial statements to a 12-month set of financial statements using the FASAB standards and a September 30 ending date. This restated data is referred to as OCBOA data for GFRS purposes. OCBOA agencies will reclassify the OCBOA data to the Closing Package line items instead of the data from their latest audited financial statements. Agencies must subject all of the above-mentioned adjustments to their Closing Packages to the audit coverage described in subsection 4705.55.

Verifying agencies that may need to perform this additional step, as described above, are:

(1) Verifying agencies with comparative, audited financial statements not based on FASAB standards:

• Federal Deposit Insurance Corporation;
  
  
• National Credit Union Administration;
  
  
• Pension Benefit Guaranty Corporation;
  
  
• Smithsonian Institution;
  
  
• Tennessee Valley Authority;
  
  
• U.S. Postal Service;
  
  AND
  
  
• Farm Credit System Insurance Corporation.

(2) Verifying agencies with a yearend other than September 30:

• Farm Credit System Insurance Corporation;
  
  
• Federal Deposit Insurance Corporation;
  
  AND
  
  
• National Credit Union Administration.

4705.30-Federal Trading Partner Note

Verifying agencies must identify the Federal trading partners and amounts for each Federal Closing Package line item reported after reclassifying the agency's comparative, audited consolidated, department-level financial statements into the Closing Package formats. Amounts identified as Federal should be net of intradepartmental eliminations with the exception of custodial revenues retained by the collecting department. Identifying the trading partner enables analysis and elimination of Federal activity based on reciprocal categories at the Governmentwide level. See Appendix 5 for a complete list of Federal trading partner department codes.

4705.30a-Parent/Child Reporting

The parent agency (transferor of the appropriation) must report all activity of the child in its financial statements, whether material to the child agency (recipient of the transfer) or not, unless one of the three exceptions (detailed below) applies. The parent agency must use its two-digit trading partner code for all activities and balances with the child agency. This will result in intragovernmental activity between the parent and the child being eliminated and not reported in the parent agency's financial statements and GFRS. Other agencies that have activity with the child (see exceptions below) must use the Federal trading partner department code of the child's parent agency when reporting their balances and transactions with the child in GFRS.

The three exceptions to the requirement for parent/child reporting (from OMB Circular No. A-136, revised) are:

• Federal trust funds managed by the Bureau of the Public Debt (commonly known as Treasury Managed Trust Funds) for which the recipients are allocation accounts.
  
  
• The parent is the Executive Office of the President.
  
  
• Funds transferred from the Judiciary to the Department of Justice U.S. Marshals Services for court security.

In these cases, the receiving agency (child) is responsible for reporting all proprietary activity in its financial statements and GFRS. The child must use its two-digit trading partner code for all activities and balances with the parent agency. This will result in intragovernmental activity between the child and the parent being eliminated and not reported in the child agency's financial statements and GFRS. Agencies that have activity with the child listed in the three exceptions must use the Federal trading partner code of the child in reporting their balances and transactions with the child in GFRS.

4705.35-Reciprocal Categories

A reciprocal category is comprised of a set of Federal Closing Package line items that are the reciprocal of each other (for example, accounts payable/accounts receivable). These categories assist in the elimination of Federal activity at the Governmentwide level to prepare the FR. Additionally, these reciprocal categories facilitate the reconciliation of activities between Federal agencies. All reciprocal categories currently contain a set of Federal line items except for category 29, which contains all line items for which no reciprocal line items exist. The reciprocal categories crosswalk to the Closing Package reclassified financial statements only (Balance Sheet, Statement of Changes in Net Position, and Statement of Net Cost). See Appendix 6 for a complete list of reciprocal categories and the financial statements to which they relate.

4705.40-GFRS Notes

Both verifying and nonverifying agencies must submit Notes data through GFRS.

Nonverifying agencies submit Notes data based on the amounts from the "generic" financial statements, compiled in GFRS, to FMS by November 16, 2009, no later than 6 p.m. EST. The generic financial statements are based on the USSGL crosswalk to the FR statements and populated by FACTS I ATB data. See Appendix 3 for the format of the GFRS Notes.

Verifying and nonverifying agencies submit Notes data based on the following:

• Amounts on selected Closing Package line items.
  
  
• The source of the data being reported for each note on the "Agency Notes" line. The agency must reference the source of the data for traceability to the Notes source (that is, the particular location in the Consolidated Audited Financial Statement, specific worksheet, etc.). This should be detailed enough to provide an adequate audit trail. See Appendices 3 and 4.
  
  AND
  
  
• Amounts of items based on disclosure standards (for example, dedicated collections, earmarked funds, commitments, and contingencies). See Appendix 3 for the GFRS Notes requirements.

4705.45-Other FR Data

Verifying agencies and nonverifying agencies must disclose information relating to "Other FR Data" as it applies to the agency. "Other FR Data" can include stewardship information, social insurance disclosures, and supplemental information, such as deferred maintenance. See Appendix 4 for the format of Other FR Data.

4705.50-CFO Closing Package Data Verification

Verifying agency CFOs must certify the accuracy of the data in the Closing Package for the IG to opine upon no later than 6 p.m. EST on November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04). In the past, FMS had stated a due date for this CFO certification. Typically, this date was 2 days before the due date for the IG opinion on the Closing Package data. However, FMS has decided not to require a specific date for the CFO certification because it is more efficient and less restrictive, as the CFO and IG are in a better position to determine the best schedule that will provide the IG opinion on the Closing Package no later than 6 p.m. EST on November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04).

4705.55-Audit Requirements for the Closing Package

An audit opinion is required for the special purpose/Closing Package financial statements, for fiscal 2009 and 2008, based on agency-entered data in GFRS through the Closing Package. This includes the Federal Trading Partner Note and should be completed no later than 6 p.m. EST on November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04). The IG will provide the audit opinion and its text of the audit opinion, regardless of whether the IG or an independent public accountant (IPA) conducted the audit. For guidance, refer to OMB Bulletin No. 07-04, as amended and as it relates to special-purpose financial statements (Closing Package). Verifying agencies with a yearend other than September 30 are subject to all requirements of this Treasury Financial Manual (TFM) chapter. However, they will be limited to audit assurance on material line items and note disclosures to which the verifying agencies contribute. For additional guidance, refer to the audit of the special-purpose (Closing Package) financial statements section of OMB Bulletin No. 07-04, as amended.

The intragovernmental activity and balances contained in the Closing Package in GFRS Module GF004, Federal Trading Partner Note, are included within the scope of the opinion on the special-purpose financial statements (Closing Package). Verifying agencies should review thoroughly information provided as Other FR Data (subsection 4705.45) in the Closing Package, which is not subject to audit coverage, to assure consistency with the applicable data.

Each applicable verifying agency must provide the following documents to the IG/IPA to facilitate the Closing Package audit process: (1) reclassified financial statements (including GFRS Note 23 for the Statement of Social Insurance, if applicable); (2) GF004F Trading Partner Summary Note Report; (3) GF003G Closing Package Line Reclassification Summary Report; (4) GF006 FR Notes Report; (5) GF007 Other FR Data Report; and (6) Management Representation Letter on the Closing Package, including Summary of Uncorrected Misstatements (including misstatements identified in the agency's Financial Statement Management Representation Letter). Each IG must package a copy of the aforementioned documents in addition to the Closing Package auditors' report and must e-mail them in Portable Document Format (PDF) files to GAO, FMS, and OMB by 6 p.m. EST on November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04).

4705.60-Closing Package Schedule of Uncorrected Misstatements Process

Verifying agencies must submit a Closing Package Schedule of Uncorrected Misstatements (SUM) as a part of their Management Representation Letter on the Closing Package as stated in subsection 4705.55, Audit Requirements for the Closing Package. The SUM must be submitted to FMS no later than November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04).

Agencies that are not required to submit a Closing Package audit (verifying agencies with a yearend other than September 30) do not have to provide a SUM. The SUM is for agencies' current-year Balance Sheet, Statement of Net Cost/Income Statement, Statement of Changes in Net Position, and Statement of Social Insurance (if applicable). The schedule should contain the following:

• The effect of the current year's uncorrected misstatements and the carry-forward effect of the prior year's uncorrected misstatements.
  
  
• USSGL account number and account description.
  
  
• Federal (F) or non-Federal (N) account indicator for each USSGL account affected.
  
  
• A reference to an adjustment number or documentation reference.
  
  
• An indication as to whether or not management has agreed to record the adjustment in its financial statements.
  
  
• A statement as to whether the uncorrected misstatement is either known or likely.
  
  
• A description of the adjustment.
  
  
• The amount of the debit or credit.
  
  
• The line items affected in the entity's financial statements.
  
  AND
  
  
• Uncorrected misstatements identified in the audited Financial Statement SUM and any additional uncorrected misstatements identified in the Closing Package. Explanations must be provided for any difference between the two SUMs to facilitate the consolidation of the FR.

In addition, the adjusting entries to correct the misstatements should also be provided. If there are no such uncorrected misstatements, a representation to this effect should be included in the management representation letter. Refer to the Financial Audit Manual (FAM), Section 595, for a sample schedule of uncorrected misstatements and adjusting entries.

For additional guidance, see OMB Bulletin No. 07-04, as amended, and OMB Circular No. A-136, revised, on the OMB Web site at http://www.whitehouse.gov/omb, and GAO/President's Council on Integrity and Efficiency FAM, Section 595C, on the GAO Web site at http://www.gao.gov.

4705.65-Legal Representation Letter Process

Verifying agency IGs must submit an interim and final legal representation letter prepared by the agency General Counsel summarizing and evaluating legal actions against the agency. Agency IGs must submit the interim legal representation letters and management schedules to FMS, DOJ, and GAO no later than August 31, 2009. They must submit the final legal representation letter and management schedules to FMS, DOJ, and GAO no later than November 16, 2009, or when available but not later than 6 p.m. EST on December 15, 2009 (for verifying agency CFOs with an extension in accordance with OMB Memorandum M-10-04). All files sent by e-mail must be in PDF format (zipped files will not be accepted). The agency's legal representation letter must contain a table prepared by management that summarizes the content of the legal representation letter as disclosed in the agency's financial statements. For guidance, refer to OMB Bulletin No. 07-04, as amended, as it relates to legal representation letters. Legal action, depending on the probability of a negative outcome, meets the contingent liability criteria as defined in SFFAS No. 5. Agencies must recognize a contingent liability on their financial statements or must disclose it in the financial statement notes if all three criteria for contingent liability are not met. They must categorize all cases, including cases to be paid from the Judgment Fund, in the table as either having a probable, reasonably possible, or a remote chance of a negative outcome for the agency.

Verifying agency IGs also must provide FMS information about subsequent events that occurred after the effective date of their final legal representation letter through January 26, 2010, that resulted in a change of likelihood or an amount of loss. Send this information via e-mail to FMS no later than January 29, 2010, by 6 p.m. EST.

Subsequent event information will be based on the agency's materiality threshold. For additional guidance, see OMB Bulletin No. 07-04, as amended, and OMB Circular No. A-136, revised, on the OMB Web site at http://www.whitehouse.gov/omb.

4705.70-Other Required Information

Verifying agency CFOs also must provide FMS information about subsequent events that changed, or did not change, the financial statements and occurred after the issuance date of the agencies' audited financial statements and up through February 7, 2010. Send this information via e-mail to FMS no later than February 8, 2010, by 6 p.m. EST . If there are "no changes," send an e-mail to FMS no later than February 8, 2010, by 6 p.m. EST and indicate that there are no changes to the financial statements due to subsequent events. Subsequent event information will be based on the agency's materiality threshold. Do not include legal contingencies or items submitted in Note 1 in GFRS.

4705.75-Yearend Intragovernmental Reconciliation Process Related to Closing Package Reporting

Verifying agencies will use the Closing Package intragovernmental data (submitted as part of the Closing Package) to generate reports.

Prior to agencies' Closing Package submissions, agencies should validate and reconcile RC 07 and RC 08 data by using the following UCAD reports on the FMS Web site at http://www.fms.treas.gov/factsi/reports.html:

• RC 07-Appropriation of Unavailable Trust or Special Fund Receipts;
  
  
• RC 08-Nonexpenditure Transfers of Unexpended Appropriations and Financing Sources.

Agencies can retrieve these reports on the eighth workday of every month.

All verifying agencies will generate the following preliminary (on November 19, 2009) and final (on December 18, 2009) Intragovernmental Reporting and Analysis System (IRAS) reports. The preliminary IRAS reports do not include final data for verifying agencies with an OMB extension. Use the Discoverer application in GFRS for the following reports that show agencies their reciprocal balances, as reported in the Closing Package, for each of their trading partner agencies':

• Intragovernmental Closing Package Activity Detail Report;
  
  
• Intragovernmental Closing Package Activity Summary Report;
  
  
• Intragovernmental Closing Package Reciprocal Category Detail Report;
  
  
• Intragovernmental Closing Package Reciprocal Category Summary Report;
  
  
• Intragovernmental General Fund Detail Report;
  
  AND
  
  
• Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report (final report only).

Agencies should use these reports to work with their trading partners to reconcile reciprocal Closing Package differences.

All verifying agencies will generate the following preliminary (on November 19, 2009) and final (on December 18, 2009) IRAS versus UCAD reports on the FMS Web site at http://www.fms.treas.gov/factsi/reports.html:

• Closing Package Reciprocal Category 07 Reported Data vs. UCAD;
  
  
• Closing Package Reciprocal Category 08 Reported Data vs. UCAD.

These reports show agencies their reciprocal balances reported in the Closing Package compared to the data reported in Treasury's central accounting system. The preliminary IRAS reports do not include final data for verifying agencies with an OMB extension.

Agencies should use these reports along with the UCAD reports to explain the differences in RC 07 and RC 08 reported data on the Material Differences/Status of Disposition Certification Report, Part II, with the data they reported into Treasury's central accounting system.

Any significant differences that are reconciled should form the basis for adjusting journal entries affecting intragovernmental activity and balances at the FR level. Agencies should submit their adjustments and supporting documentation for Part I and Part II (refer to subsections 4706.30f and 4706.30g for further detail regarding the explanation of differences) to their FMS contact person via e-mail and to the following e-mail address: financial.reports@fms.treas.gov. On January 13, 2010, anytime after NOON, verifying agencies will generate the Intragovernmental Comparative Closing Package Explanations of Differences Report via the Discoverer application.

4705.80-CFO Procedures for Intragovernmental Activity/Balances

Verifying agencies must comply with the following instructions using the comparative, audited consolidated, department-level financial statements:

• Provide responses to the representations outlined in the detailed "CFO Representation" instructions for each intragovernmental issue;
  
  AND
  
  
• Ensure the data in the Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report is consistent with the information reported in the Federal program agency's financial statements.

FMS will provide the CFO Representation for Federal Intragovernmental Activity and Balances form to use when completing the CFO representations (see Appendix 8). FMS will post this form on its Web site at http://www.fms.treas.gov/factsi. The representations relating to whether the reconciliation was completed for each item of Section I (General Intragovernmental Reporting Results) and Section II (Explanation of Closing Package Differences) must be completed in their entirety.

4705.80a-Detailed CFO Representation Instructions

Verifying agencies must provide responses to the following intragovernmental items.

4705.80b-Section I: General Intragovernmental Reporting Results

• Is consistency maintained between the agency intragovernmental reporting entered in GFRS Module GF004 Trading Partner Note (by line item and trading partner) and the agency source documents? If "no," provide an explanation. (Refer to the Intragovernmental Closing Package Line Item Reports and the Trading Partner Identification Reports from GFRS Module GF004). Agency source documents include manual and electronic records, original documents, and accounting records generated by the agency's official accounting system.
  
  
• Identify policies and procedures that pertain to the agency's ability to record, process, summarize, and report intragovernmental activity and balances by trading partner. Describe the accounting treatment and policies and procedures used for buy/sell, fiduciary, and transfer intragovernmental transactions.
  
  
• Review the agency's activity reported under trading partner "9999." Indicate the dollar amount or percentage of this activity that relates to business conducted with highly classified agencies, the U.S. Senate, or the House of Representatives.
  
  
• Did all trading partners report Closing Package intragovernmental activity/balances? If "no," list those Federal program agencies that did not report Closing Package intragovernmental activity/balances. (Refer to the Discoverer-generated Intragovernmental Closing Package Activity Summary Report).
  
  
• Review the Discoverer-generated Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report. List those Federal program agencies that were not contacted or pursued concerning material differences.
  
  
• Did the agency use the UCAD reports available on the FMS Web site at http://www.fms.treas.gov/factsi/reports.html to validate the agency's trading partner data entered in GFRS Module GF004 for the Closing Package line items in RC 07 and RC 08? If "no", provide an explanation (refer to UCAD RC 07 and RC 08 reports from the FMS Web site).
  
  
• Did the independent auditors propose any adjustments related to intragovernmental balances reported in the Closing Package? If "yes," list the auditor's intragovernmental adjustments waived by management.
  
  
• For all responses to the above intragovernmental issues, describe the area and the extent of any noncompliance with the requirements in a written response on the standard form described above, or an attachment if necessary.

4705.80c-Section II: Explanation of Closing Package Differences

Explain the differences indicated on the Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report, Part I, in terms of the following categories: (1) Confirmed Reporting, (2) Accounting Methodology Difference, (3) Accounting/Reporting Error, (4) Timing Difference - CY, (5) Unknown, and (6) Timing Difference - PY. Also, explain the special items and differences on the Intragovernmental Closing Package Material Differences/Status of Disposition Report, Part II, on the supplemental attachment provided by FMS. For each explanation, documented support must be included, in detail, on the supplemental attachment provided by FMS. (Refer to subsections 4706.30f and 4706.30g for further detail regarding the explanation of differences).

Provide an electronic file of the CFO's Representations for Federal Intragovernmental Activity and Balances along with the completed Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report to FMS and GAO by January 6, 2010.

Section 4706-Intragovernmental Requirements

4706.10-Intragovernmental Activity/Balances Reconciliation Requirements Authority

The intragovernmental transactions reconciliation requirements are stated in the following:

• OMB Circular No. A-136, revised;
  
  
• OMB Memorandum M-07-03, Business Rules for Intragovernmental Transactions;
  
  AND
  
  
• TFM Volume I, Bulletin No. 2007-03, Intragovernmental Business Rules.

Agencies may obtain copies of OMB Circular No. A-136, revised, and the business rules from the OMB Web site at http://www.whitehouse.gov/omb. TFM Volume I, Bulletin No. 2007-03, is available on the TFM Web site at http://www.fms.treas.gov/tfm.

4706.15-Federal Intragovernmental Transactions Accounting Policies Guide

FMS provides detailed guidance on accounting and reconciling intragovernmental balances in the Federal Intragovernmental Transactions Accounting Policies Guide, (to be updated for fiscal 2009). To access this document, see the FMS Web site at http://www.fms.treas.gov/factsi.

The Federal Intragovernmental Transactions Accounting Policies Guide provides Federal agencies with Governmentwide accounting policies related to fiduciary and nonfiduciary intragovernmental transactions. It also provides Federal agencies with the tools to facilitate the reconciliation process and gives examples of accounting and reporting for various types of transactions. In addition, the Federal Intragovernmental Transactions Accounting Policies Guide addresses policies and procedures for the confirmation process. Confirmations certify that the activities and balances in the USSGL intragovernmental accounts are accurate, complete, and reconcile to the partner agency accounts. These USSGL intragovernmental accounts are included in the Guide. Agencies must use these reciprocal account groupings for intragovernmental balances. See Appendix 7 for a list of each reciprocal category grouping.

Finally, the Federal Intragovernmental Transactions Accounting Policies Guide lists the reciprocal account categories (two-digit codes representing groupings of similar reciprocal transaction types). Agencies should use these categories to reconcile balances with their trading partners and/or the data in Treasury's central accounting system. The reciprocal account categories cover both intragovernmental fiduciary and nonfiduciary categories.

4706.20-Intragovernmental Fiduciary Confirmation System (IFCS)

The IFCS, an Internet-based application for reconciling fiduciary transactions, is the official confirmation system for all Federal departments and agencies that engage in fiduciary intragovernmental transactions.

Specifically, OMB Circular No. A-136 requires reporting agencies to reconcile/confirm intragovernmental activity and balances quarterly for the following reciprocal groupings:

• Investments-Including interest payables and receivables, interest income and expense, and amortization of premiums and discounts with the Bureau of the Public Debt (BPD).
  
  
• Borrowings-Including interest payables and receivables, and interest income and expense from BPD or the Federal Financing Bank (FFB).
  
  
• Federal Employees' Compensation Act (FECA) transactions with DOL-Including routine payments and accruals for FECA liabilities. Note that amounts relating to unemployment compensation are not included. Therefore, agencies need to exclude these amounts before posting expenses (USSGL account 6400) in IFCS.
  
  
• Employee Benefit Program transactions with the Office of Personnel Management (OPM)-Including routine payments and postretirement benefits related to the Federal Employees Retirement System (FERS), the Civil Service Retirement System (CSRS), the Federal Employees' Group Life Insurance Program (FEGLI), and the Federal Employees' Health Benefits Program (FEHB).

For third quarter fiscal 2009, IFCS will open on July 9, 2009, and will close on July 23, 2009. For fourth quarter fiscal 2009, IFCS will open on October 8, 2009, and will close on October 16, 2009.

4706.20a-IFCS System Access

To access and confirm fiduciary balances in the IFCS, agency users should access the Internet Web site at https://fmsapps.treas.gov/ias. To gain access to IFCS, all agency users and backup personnel must submit a GOALS II ESAAS Form by fax to the IFCS administrator at 202-874-9907. All agencies must designate agency user backups for all roles. After the ESAAS form is processed, the IFCS administrator will make the agency assignment. Then, the agency department administrator will assign the designee to his or her specific agency fund symbols for the borrowings and investments categories and agency code for OPM and DOL categories. The designee will receive the user ID and password from the Data Access Control Division (DACD). Contact the GWA Customer Assistance Group for information at 202-874-8270.

4706.20b-IFCS Reporting Reconciliation Requirements

Agencies must ensure that fiduciary intragovernmental balances are confirmed using the IFCS. Similarly, other intragovernmental balances should be confirmed using IRAS reports. Intragovernmental balances confirmed through IFCS and IRAS should agree to the Closing Package reporting and the agency's financial statements. Reconciliation should occur prior to submitting the Closing Package data.

4706.25-Nonfiduciary Transactions

For nonfiduciary transactions, OMB requires reporting agencies to reconcile/confirm intragovernmental activity and balances quarterly for the following reciprocal groupings:

• Services provided and reimbursables-Such as legal, consulting, investigative, financial management, grants management, technology, reimbursables, and other similar services.
  
  
• Cost of products sold-Such as supplies, manufactured items, inventory, office space, and equipment/vehicle rentals.
  
  
• Transfers, appropriations used, and collections for others, and unusual assets and liabilities related to appropriations-Including transfers between agencies based on agreements or legislative authority, expended appropriations, taxes and fees collected, collections for others, receivables from appropriations, transfers payable, and custodial revenue.

4706.25a-Related to Capitalized Purchases

Agencies that purchase capitalized assets from other Federal entities must record the purchase to the following USSGL memo accounts:

• 8801F, "Offset for Purchases of Assets";
  
  
• 8802F, "Purchases of Property, Plant, and Equipment";
  
  
• 8803F, "Purchases of Inventory and Related Property";
  
  AND
  
  
• 8804F, "Purchases of Assets - Other."

Agencies also must record the purchase to the appropriate USSGL asset account in the Closing Package.

The above memorandum accounts are not crosswalked to the Closing Package but are used in the quarterly IRAS reporting in order to reconcile intragovernmental buy/sell activity.

4706.30-Quarterly Intragovernmental Transactions Reconciliation Process

Agencies should use two-digit trading partner codes for all intragovernmental transactions. When agencies report "appropriations transfers" within their departments, they should use their two-digit trading partner code rather than "00." Trading partner code "00" is limited to the House of Representatives, Senate, classified transactions, or any truly unidentifiable activity/balances.

4706.30a-Department Code Reporting for Treasury General Fund Activities

Agencies will use trading partner code "99" strictly for recording transactions with the Treasury General Fund of the United States. Agencies should not confuse the Treasury General Fund of the United States with the Department of the Treasury, the agency. They are not synonymous and great care should be taken to distinguish one from the other when designating an appropriate partner code. Some examples of activities that produce transactions with the Treasury General Fund of the United States are:

• Custodial activity, such as tax revenue-USSGL accounts applicable to this activity include but are not limited to USSGL accounts 2980F, 5800F, 5890F, 5801F, 5990F, and 5991F.
  
  
• Other collections collected or accrued for the Treasury General Fund.
  
  
• Employer Federal Insurance Contributions Act (FICA) contributions collected by the Internal Revenue Service.
  
  
• Governmentwide entity/custodial accounts that consist primarily of interest revenue and seigniorage, for Treasury Bureaus FMS and BPD only.
  
  
• Liquidating fund assets in excess of liabilities.
  
  
• Receivable from appropriations (USSGL account 1921F, for Treasury only).
  
  
• Rescissions that are permanently canceled by law.
  
  
• Other asset/liability activities associated with the Treasury General Fund (for example, USSGL accounts 1325F and 2400F).

Agencies engaged in activity with the Department of the Treasury as a trading partner regarding all other intragovernmental activities, such as Judgment Fund transactions, investments, borrowings, transfers, appropriations, and buy/sell activity, will use department code "20." Agencies should contact the Director, Financial Reports Division, via e-mail at financial.reports@fms.treas.gov, if they are unsure about the applicability of department code "99" to particular transactions.

4706.30b-Agency Quarterly Submission

In support of the quarterly reconciliation process, verifying agencies must submit full proprietary adjusted trial balances or submit, at a minimum, a trial balance that contains all their accounts with an "F" attribute and the following other USSGL accounts: 1010 (Fund Balance With Treasury), 3101 (Unexpended Appropriations - Appropriations Received), and 3106 (Unexpended Appropriations - Adjustments) to FMS no later than July 23, 2009, for third quarter fiscal 2009, and October 18, 2009, for fourth quarter fiscal 2009.

Prior to the quarterly submission, agencies should validate and reconcile RC 07 and RC 08 data by using the following UCAD reports on the FMS Web site at http://www.fms.treas.gov/factsi/reports.html:

• RC 07-Appropriation of Unavailable Trust or Special Fund Receipts;
  
  
• RC 08-Nonexpenditure Transfers of Unexpended Appropriations and Financing Sources.

Agencies should derive these submissions directly from departmental trial balances that are used as the basis for constructing quarterly unaudited financial statements for OMB (see Appendix 10 for the data file format).

The text file format for verifying agencies must contain the following elements:

• Department code (two digit)-Treasury department code associated with the adjusted trial balance fund group and consistent with the MAF ATB Code.
  
  
• Bureau code (two digit)-Bureau code associated with the adjusted trial balance fund group and consistent with the MAF ATB Code. Use "00" if the agency does not have any subdivisions.
  
  
• Fund group (four digit)-MAF fund group.
  
  
• USSGL account (four digit)-USSGL account number.
  
  
• Federal/Non-Federal Attribute-F/N indicator.
  
  
• Federal trading partner (Federal) (two digits)-Treasury Department Code of Federal trading partner.
  
  
• Sign Indicator-The "-" (minus) symbol indicates a credit balance. Leave the field blank for debit balances, without regard to the normal-balance concept.
  
  
• Dollar amount-Leading zeroes required. Last two positions are to represent amounts after the decimal point.
  
  
• Exchange/nonexchange attribute - X/T indicator.
  
  
• Custodial/noncustodial attribute - S/A indicator.
  
  
• Duplicate Partner Code Identifier (DPCI)-Attribute for certain reporting entities that use duplicate two-digit Department codes.

For format requirements and accompanying documentation, refer to Appendix 10.

Verifying agencies should send their completed submissions to their FMS contact person via e-mail and to the following e-mail address: financial.reports@fms.treas.gov.

4706.30c-Agency "F" Transactions Submission - Parent/Child Reporting

The parent agency (transferor of the appropriation) must report and code activity and balances between the parent and the child using the parent's two-digit trading partner code on its "F" transactions file submission to properly eliminate parent/child activity and balances, unless one of the three exceptions applies (see subsection 4705.30a for exceptions). Agencies having activity with the child must use the parent's two-digit trading partner code to report their balances and transactions with the child in the "F" file. For example, agencies having activity with the account "AA BB 1234" will use the "BB" trading partner code, in which "BB" represents the parent's two-digit trading partner code.

For the three exceptions listed in subsection 4705.30a, the child agency must report and code activity and balances between the parent and the child with the child's two-digit trading partner code on its "F" transactions file submission to properly eliminate parent/child activity and balances. Agencies having activity with the child, for the three exceptions, must use the child's two-digit trading partner code to report their balances and transactions with the child in the "F" file. For example, agencies having activity with the account "AA BB 1234" will use the "AA" trading partner code, in which "AA" represents the child's two-digit trading partner code.

4706.30d-FMS Intragovernmental Activity Reports

Within approximately 4 business days of agencies' submissions of the quarterly data files, FMS will consolidate agency quarterly financial data. Reporting agencies will use the Discoverer application through GFRS to generate the IRAS reports. The reports show agencies their reciprocal balances, as reported in the quarterly files, for each of their trading partner agencies:

• Intragovernmental Activity Detail Report by Trading Partner;
  
  
• Intragovernmental Activity Summary Report by Trading Partner;
  
  
• Intragovernmental Reciprocal Category Summary Report;
  
  
• Intragovernmental Reciprocal Category Detail Report;
  
  
• Intragovernmental General Fund Detail Report;
  
  
• Fiduciary Quarterly Data vs. IFCS Agency Benefits Report;
  
  
• Fiduciary Quarterly Data vs. IFCS Comparison Report;
  
  AND
  
  
• Intragovernmental Material Differences/Status of Disposition Certification Report.

Agencies should use these reports to work with their trading partners to reconcile reciprocal differences.

In addition to the IRAS reports, verifying agencies will generate the following IRAS versus UCAD reports on the FMS Web site at http://www.fms.treas.gov/factsi/reports.html:

• Reciprocal Category 07 Reported Data vs. UCAD;
  
  
• Reciprocal Category 08 Reported Data vs. UCAD.

These reports show agencies their reciprocal balances reported in the Closing Package compared to the data reported in Treasury's central accounting system. Agencies should use these reports along with the UCAD reports in the Discoverer application as a tool to explain their differences in RC 07 and RC 08 on the Material Differences/Status of Disposition Certification Report, Part II, with the data they reported into Treasury's central accounting system.

4706.30e-Agency Quarterly Status of Disposition Certification

Each verifying agency will generate a Material Differences/Status of Disposition Certification Report from the Discoverer application in GFRS containing comparative reporting between the agency and its trading partners by reciprocal category in Part I, and other significant material balances and comparative differences in Part II. FMS will provide Part III, which is a blank "Additional Explanations" form that agencies will use to explain in detail their reporting on all records showing material differences. FMS will post this form on the FACTS I Web site at http://www.fms.treas.gov/factsi/reports.html.

The Material Differences/Status of Disposition Certification Report, Part I, will allow agencies to identify differences with trading partners, excluding "99," by reciprocal categories (excluding RC 07, 08, 25, and 29) that are greater than or equal to a respective reconciliation assurance level. Part II will identify differences with trading partners "00," "99," and material differences between the agency amounts and the UCAD amounts for RC 07 and RC 08. Agencies must identify the material balances in Parts I and II in Part III, the "Additional Explanations" form. This level will be systematically established in IRAS using four functions for fiscal 2009:

• Obtaining sufficient explanation of out-of-balance condition coverage for GAO assurance;
  
  
• Obtaining assurance that agencies are performing quarterly intragovernmental reconciliation in accordance with OMB Circular No. A-136, revised;
  
  
• Ensuring agencies are mutually completing Status of Disposition Certification for the same trading partner/reciprocal category material difference instances;
  
  AND
  
  
• Minimizing the number of differences subject to certification through a sampling process.

Verifying agencies should provide an explanation of the reporting on Parts I and II of the Status of Disposition Certification form by identifying their reporting justification by explanation number (refer to subsection 4706.30f) and should submit it to the agency's respective FMS contact person via fax to 202-874-9907. This report is due no later than August 5, 2009, for third quarter fiscal 2009 and is not required for fourth quarter fiscal 2009.

Note: Agencies that have recurring differences with a trading partner will continue to receive a Material Differences/Status of Disposition Certification Report that must be explained and certified.

4706.30f-Detailed Quarterly Status of Disposition Certification Instructions

For fiscal 2009, verifying agencies are required to provide an explanation of their Part I reporting based on each identified difference in terms of the following categories: (1) Confirmed Reporting, (2) Accounting Methodology Difference, (3) Accounting/Reporting Error (4) Timing Difference - CY, (5) Unknown, and (6) Timing Difference - PY.

Verifying agencies must include documented support for Parts I and II in detail for each explanation on the supplemental attachment provided by FMS via the FACTS I Web site. (Refer to the Federal Intragovernmental Transactions Accounting Policies Guide for further detail regarding the explanation of differences.)

4706.30g-Reporting Agency's Explanation of Reporting in Part I

• Confirmed reporting is intended to indicate that an agency has verified its reported amounts and that the agency's documents are in agreement with its quarterly source documentation. It also should indicate that the agency has reconciled this amount with its trading partner and knows why the difference, if any, exists, so that the appropriate agency can adjust its amount. Provide a detailed explanation on the attached "Additional Explanations" form, provided on the FACTS I Web site at http://fms.treas.gov/factsi/reports.html, to support the confirmation of reporting. When the confirmed reporting column is selected, there should be no other column marked.
  
  
• Accounting Methodology Difference occurs when the reporting agency uses a different method to account for activity than the trading partner. The method of accounting must be identified and explained.
  
  
• Accounting/Reporting Error occurs when the reporting agency has incorrectly reported activity either by reciprocal category or amount. The total of these amounts must be identified and explained. If your agency is in error, then provide the corrective action (journal entry, etc.) to be taken and when.
  
  
• Current-Year Timing Difference occurs when the reporting agency has reported activity in a subsequent quarter other than the trading partner. The total of these amounts must be identified. Explain whether an adjustment should be made.
  
  
• Prior-Year Timing Difference occurs when the reporting agency has reported activity in a prior fiscal year other than the trading partner. The total of these amounts must be identified. Explain whether an adjustment should be made.
  
  
• Unknown Reporting occurs when the reporting agency cannot validate the amount it submitted. The total of Unknown Reporting amounts must be identified and explained.

When differences have been identified and adjustments are needed, agencies must make adjustments in the subsequent periods and provide corrective actions to FMS.

Verifying agencies will generate a Comparative Status of Disposition Report, Part I (via the Discoverer Web viewer). This report compares amounts and explanations of material differences reported between each reporting agency and its trading partner. FMS will make this report available to agencies no later than August 11, 2009, for third quarter fiscal 2009.

CFOs will use this report to address and resolve inconsistencies in amounts and explanations between the agency and its trading partners, no later than the subsequent reporting period. Specifically, in instances where an agency's and its trading partner's explanations for differences are both "confirmed reporting," the agency is required to contact its trading partners to obtain resolution of the disputed differences. Material differences that were explained as "confirmed reporting" by both the reporting agency and its trading partner must be resolved by the next reporting period. If the reporting differences have not been reconciled by the end of third quarter fiscal 2009, then the CFOs from each respective agency will be required to provide FMS with a "plan of action" to address unresolved material "confirmed reporting" differences.

In addition, for fiscal 2009, agencies will be required to provide a basis for their "unknown reporting" explanation. Material differences that were explained as "unknown" by the reporting agency must be resolved by the next reporting period. If the reporting differences cannot be validated or resolved by the end of third quarter fiscal 2009, then the CFOs from each respective agency will be required to provide FMS with a "plan of action" to address unresolved material "unknown reporting" differences.

A letter outlining the required information to be included in the "plan of action" and a due date for plan submission will be provided to the necessary agencies shortly after the third-quarter fiscal 2009 Comparative Status of Disposition Report.

Section 4707-FACTS I Requirements

4707.10-Collection of ATB Data

FMS will continue to collect ATB data to aid in its analytical process. ATB data should link directly to the agency's comparative, audited consolidated, department-level financial statements. Agencies may view ATB data in GFRS. ATB data are tools to facilitate the Closing Package and are not subject to coverage in the audit requirements of the Closing Package.

4707.15-FACTS I System Access

The FACTS I Internet application on GOALS II requires a user ID and password. The address for the FACTS I Internet application on GOALS II is https://fmsapps.treas.gov/ias.

Agencies can apply for a user ID and password by submitting a GOALS II ESAAS Form. Contact the GWA Customer Assistance Group for information at 202-874-8270.

4707.20-FACTS I Reportable Data

GFRS compiles the data from the FACTS I submissions for nonverifying agencies into a set of "generic" financial statements that are included in the consolidated FR. Nonverifying agencies must prepare and submit notes to the FR using the amounts from the "generic" financial statements compiled in GFRS. Agencies must submit all changes to the "generic" statements through FACTS I.

4707.20a-Master Appropriation File (MAF)

FMS uses the MAF as a control tool during the ATB submission process. The MAF consists of records (one record for each Treasury appropriation/fund group), uniquely identified by an eight-digit code. The eight-digit code combines a two-digit department code, a two-digit bureau code, and a four-digit fund group code. In FACTS I, it is referred to as the ATB code. Each MAF record also contains the following:

• A BSF ID that represents the budget subfunction of the ATB.
  
  
• A fund type ID. The fund type for MAF is not necessarily the fund type used in the FAST Book.
  
  
• Other codes and identifiers FMS uses for internal purposes.

Verifying and nonverifying agencies must maintain the MAF on the FACTS I database and submit changes to the MAF data through the FACTS I Internet application. The MAF window opens August 27, 2009. For fiscal 2009 reporting, agencies must review and update individual components of MAFs electronically by September 18, 2009. After agencies review, update, and submit the MAF, FMS will review and approve the MAF by September 28, 2009.

4707.20b-Adjusted Trial-Balance (ATB)

Agencies must prepare and submit preclosing ATBs at the Treasury appropriation/fund group level using USSGL accounts and attributes. Agencies that have not adopted the USSGL must crosswalk their general ledger accounts to the USSGL accounts before transmission.

The reporting deadline for fiscal 2009 ATBs is as follows:

• Nonverifying agencies-November 16, 2009;
  
  
• Verifying agencies without an OMB extension-December 1, 2009.
  
  
• Verifying agencies with an OMB extension-January 5, 2010.

Verifying and nonverifying agencies can submit ATBs as early as October 1, 2009. The ATBs must include USSGL accounts in numerical order with the required attributes, and USSGL account balances must reflect the preclosing adjusting entries needed to produce financial statements. The total sum of the debit balances must equal the total sum of the credit balances in the ATBs. Report amounts in dollars and cents.

A variety of edits enable FACTS I to verify that the submitted USSGL accounts with associated attributes are valid and have equal debit and credit balances. Treasury will reject ATBs that do not meet these criteria.

Verifying and nonverifying agencies must use the same USSGL data on the ATBs that they use to prepare the fiscal 2009 audited agency consolidated financial statements due to OMB. Agencies also must use the following required attributes:

• "F" or "N" to identify a USSGL account balance as Federal (F) or non-Federal (N). Report the two-digit department code (see Appendix 5) of the trading partner when using attribute "F."
  
  
• "S" or "A" to identify a USSGL account balance as custodial (S) or noncustodial (A).
  
  
• "X" or "T" to identify a USSGL account balance as exchange (X) or nonexchange (T) revenue.

More than one attribute may be valid for a USSGL account. See Appendix 11 for a list of the USSGL accounts with their valid attributes.

Nonverifying agencies that use deposit fund monies to invest in GAS investments, and, if the Bureau of the Public Debt records these GAS securities as public, must identify these investments with trading partner "99" instead of "20."

4707.20c-Special Accounts

Verifying and nonverifying agencies may submit a single ATB for all fund groups in each of the following categories:

• Clearing/Suspense (F) accounts (use default 3800 for the fund group).
  
  
• Deposit fund accounts (use default 6000 for the fund group).
  
  
• Unavailable receipt accounts-Treasury General Fund (use default 5555 for the fund group).
  
  
• Unavailable receipt accounts-Special and trust fund (use default 5000 for the fund group).

Treasury appropriation/fund symbol ranges for receipt accounts include the following:

• Unavailable General Fund receipt accounts range from 0100 through 3799.
  
  
• Clearing/Suspense accounts range from 3800 through 3899.
  
  
• Special fund receipt accounts range from 5000 through 5999.
  
  
• Trust fund receipt accounts range from 8000 through 8999.

Agencies must determine whether the collections made under the receipt account symbols are "available" receipts or "unavailable" receipts. "Available" receipts, for which the appropriation fund symbols only can be in the 5000s and the 8000s, constitute budget authority. Agencies should report ATBs for available receipt accounts individually under their Treasury appropriation fund symbol.

"Unavailable" receipts do not constitute budget authority. "Unavailable" receipts with account fund symbols from 0100 to 3799 represent Treasury General Fund receipts. GAO defines a General Fund receipt account as:

A receipt account credited with all collections that are not earmarked by law for another account for a specific purpose. These collections are presented in the President's budget as either governmental (budget) receipts or offsetting receipts. These include taxes, customs duties, and miscellaneous receipts.

Agencies that classify amounts on their Statement of Transactions (that is, FMS 224) in General Fund receipt account symbols using their two-digit agency department code also must submit an ATB and must prepare agency financial statements that include the General Fund receipt activity.

"Unavailable" receipts with account fund symbols from 5000 to 5999 (5000s) or 8000 to 8999 (8000s) represent receipts of the collecting agency. Agencies that deposit receipts into these fund symbols must submit ATBs and should ensure the receipts appear on their financial statements. However, these receipts do not constitute budget authority until subsequent legislation appropriates the receipts.

4707.20d-Treasury Managed Trust Fund Accounts

BPD's Trust Fund Management Branch will provide to the lead program agency an ATB for the Treasury managed trust fund activity located at BPD for each of the Treasury managed trust funds listed in Figure 4. For fiscal 2009, agencies will receive these ATBs no later than October 30, 2009.

BPD will use USSGL accounts from Appendix 11 with the proper attributes. The lead program agencies identified in Figure 4 must include the Treasury managed trust fund data in their ATBs. Direct any questions regarding the ATB data received from BPD to Matthew Hansell at 304-480-5120.

                                Figure 4. Treasury Managed Trust Fund

4707.20e-Parent/Child Reporting

Report in FACTS I similar to the reporting for the "F" file submissions. Refer to subsection 4706.30c for reporting in the FACTS I ATBs.

4707.20f-ATB Reports Transmission Methods

Each ATB preparer can submit the ATB data using the online entry method or bulk file transfer method on the GOALS II FACTS I Internet application. The bulk file transfer requires that agencies build American Standard Code for Information Interchange (ASCII) files using the prescribed record layout for FACTS I posted on the FACTS I Web site at http://www.fms.treas.gov/factsi.

Agencies may submit ATBs for multiple fund groups in a single bulk file transfer.

4707.20g-Proprietary Balances in Canceled Accounts

There are two valid types of proprietary account balances in a canceled TAFS. They are fixed assets and canceled payables.

Agencies must maintain and report "canceled payable" balances in their original TAFS.

Agencies with fixed asset balances in a canceled TAFS may report those balances in either of three ways:

• Report in the Treasury appropriation/fund group from which the funds were originally appropriated;
  
  
• Transfer asset balances without reimbursement to an open TAFS and report in that open Treasury appropriation/fund group.
  
  OR
  
  
• Agencies can use a default fund group to report the balances of fixed assets that cannot be identified to an original Treasury appropriation/fund group.

CONTACTS

Direct inquiries and deliver documents required by this chapter to:

Karen Hunter
Director, Financial Reports Division
Financial and Budget Reports Directorate
Governmentwide Accounting
Financial Management Service
Department of the Treasury
3700 East-West Highway, Room 509B
Hyattsville, MD 20782
Telephone: 202-874-9910
Fax: 202-874-9907
E-mail: financial.reports@fms.treas.gov

Also, deliver documents required by this chapter to:

Louise DiBenedetto
Government Accountability Office
441 G Street, NW., Room 5T16
Washington, DC 20548
Telephone: 202-512-6921
E-mail: uscfs@gao.gov

Dana James
Office of Management and Budget
Telephone: 202-395-3993
E-mail: Statements@omb.eop.gov

APPENDICES LISTING

Chapter appendices are only available in the PDF version.

Transmittal Letter No. 650

To: Heads of Government Departments, Agencies, and Others Concerned

1. Purpose

This transmittal letter releases revised I TFM 2-4700, Agency Reporting Requirements for the Financial Report of the United States Government. This chapter describes how agencies provide data for the Financial Report of the United States Government using the Governmentwide Financial Report System and the Federal Agencies' Centralized Trial-Balance System. It also includes the Financial Management Service's fiscal 2009 Closing Package methodology, the Federal intragovernmental transactions process, and requirements for electronically submitting preclosing adjusted trial-balance(s).

2. Page Changes

3. Effective Date

This transmittal letter is effective immediately.

4. Inquiries

Direct questions concerning this transmittal letter to:

Financial Reports Division
Financial and Budget Reports Directorate
Governmentwide Accounting
Financial Management Service
Department of the Treasury
3700 East-West Highway, Room 509B
Hyattsville, MD 20782
Telephone: 202-874-9910

David A. Lebryk (Acting)
Commissioner
Date: May 29, 2009