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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 2007 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 agency's Closing Package information and link the agencies' comparative, audited consolidated, department-level financial statements to the FR;
  
  AND
  
  
• Resolve material deficiencies identified by the Government Accountability Office (GAO).

The Chief Financial Officer (CFO) of each verifying agency must prepare and submit the Closing Package data for fiscal 2007 and fiscal 2006 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, except those agencies with a yearend other than September 30, 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.

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 a tool used to facilitate the Closing Package and is not used to prepare 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 does encourage 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).

ATB Code-This is a code that consists of a department, a bureau, and a 4-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 2-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 3-digit budget subfunction (BSF) code contained in the MAF represents a subfunction grouped under one 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 the 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 notes to the financial statements. 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 notes to the financial statements. 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 disclose a note. 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 general or special trust fund collections and disbursements. They use these accounts pending clearance to the applicable receipt or expenditure account in the budget. A fiscal year "F" preceding the last 4 digits of the fund symbol identifies a suspense account.

Treasury Appropriation/Fund Group-This 4-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 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.

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 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 24 CFO Act agencies and 11 material other agencies.

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.

Figure 2: FR Processing Key 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, Statement of Changes in Net Position/Income Statement, 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. Refer to subsection 4705.20 for details.
  
  
• 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 standards promulgated by FASAB (see Appendix 4).
  
  
• Provide explanations for any data that has changed by the established threshold or more between fiscal 2006 and fiscal 2007 and also between fiscal 2006 as reported in fiscal 2007 and fiscal 2006 reported last year, as required by GFRS.
  
  
• Provide to FMS an electronic copy of the draft financial statements when the draft is provided to OMB.
  
  
• Contact FMS or be contacted by FMS to determine reporting procedures for any adjustments to their Closing Package data after November 17, 2007.

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, 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).

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 by midnight November 15, 2007, for fiscal 2007 reporting. See Figure 2.

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, Statement of Changes in Net Position/Income Statement, 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. These descriptions provide guidance when reclassifying amounts from agency line items to Closing Package line items. 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 Net Cost Statement.

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. All numbers must be entered as positive in GFRS unless the balance of that line is abnormal. 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. 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 footnote.

However, for exchange revenue collected for others with related cost incurred, agencies should follow the guidance from SFFAS No. 7. Paragraph 137, 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 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 "Other financing sources" and non-Federal lines to "Other taxes and receipts."

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 footnote 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.

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.

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 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 2007 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds) and from HHS (the 2007 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 24, 2007.

4705.25-Special Basis of Accounting

Verifying agencies that use other comprehensive basis of accounting (OCBOA), other than FASAB standards, as a basis for their audited financial statement data, or that do not have a fiscal yearend of September 30, also 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 as follows:

(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 interdepartmental eliminations. 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.

4705.35-Reciprocal Categories

A reciprocal category is composed 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 in preparation of the FR. Additionally, these reciprocal categories facilitate the reconciliation of Federal 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.

The current reciprocal categories, RC 19, Appropriations Transfers In/Out, and RC 28, Unexpended Appropriations Transferred In/Out, were replaced by three new categories. The new categories are:

• RC 07, Appropriation of Unavailable Special or Trust Receipts Transfers In/Out;
  
  
• RC 08, Nonexpenditure Transfers In/Out of Unexpended Appropriations and Financing Source;
  
  AND
  
  
• RC 09, Expenditure Transfers In/Out of Financing Source.

These new categories are used for the initial Treasury Central Accounting data that will soon represent authoritative data that agencies should have in their accounting systems and should be reporting in GFRS/Intragovernmental Reporting and Analysis System (IRAS). This data and these categories were created for agencies to compare to their current reporting in GFRS/IRAS and identify any differences/issues that need to be resolved. In the future, agencies will be required to reconcile their GFRS/IRAS data reporting to this authoritative data instead of reconciling with their trading partners. Further guidance will be issued in the Federal Intragovernmental Transactions Accounting Policies Guide.

4705.40-GFRS Notes

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

Nonverifying agencies submit note data based on the amounts from the "generic" financial statements, compiled in GFRS, to FMS by November 15, 2007. 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 note data based on the following:

• Amounts on selected Closing Package line items;
  
  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 data" as it is applicable to the agency. "Other 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 Verification of Closing Package Data

CFOs of the verifying agencies must certify the accuracy of the data in the Closing Package for the IG to opine upon no later than midnight November 15, 2007.

4705.55-Audit Requirements for the Closing Package

An opinion is required for the fiscal 2007 and fiscal 2006 data that was entered in GFRS through the Closing Package process, including the Federal Trading Partner Note, no later than noon on November 17, 2007. The IG will provide the opinion rendered and the text of the audit opinion, regardless of whether the IG or an independent auditor conducted the audit. For guidance, refer to OMB Bulletin No. 06-03, revised, 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 TFM except for audit of their GFRS data.

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 and nonverifying 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/independent public accountant (IPA) to facilitate the Closing Package audit process: (1) reclassified financial statements; (2) GF004F Trading Partner Summary Note Report; (3) GF003G Closing Package Line Reclassification Summary Report; (4) GF006 FR Notes Report; (5) GF007 Other Data Report; and (6) Management Representation Letter on the Closing Package, including Summary of Unadjusted 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) to GAO, FMS, and OMB by noon November 17, 2007.

4705.60-Legal Representation Letter Process

Verifying agencies must submit an interim and final letter prepared by the agency General Counsel summarizing and evaluating legal actions against the agency. The interim legal representation letter and management schedules must be submitted to FMS, DOJ, and GAO no later than August 29, 2007. The final legal representation letter and management schedules must be submitted to FMS, DOJ, and GAO no later than November 15, 2007. All files sent by e-mail must be PDF files (zipped files will not be accepted). The agency legal letter must contain a table prepared by management that summarizes the content of the legal letter as disclosed in the agency's financial statements. For guidance, refer to OMB Bulletin No. 06-03, as amended, as it relates to legal letters. Legal action, depending on the possibility of a negative outcome for the agency, can create a contingent liability that must be recognized in the agency's financial statements or, in certain cases, disclosed in the financial statement Notes. All cases, including cases to be paid from the Judgment Fund, are to be categorized in the table as either having a probable, reasonably possible, or a remote chance of a negative outcome for the agency.

IGs of verifying agencies also must provide FMS information about subsequent events that occurred after the effective date of their final legal letter through November 28, 2007, that resulted in a change of likelihood or amount of loss. Send this information via e-mail to FMS no later than November 30, 2007.

Note: At the time of this publication, due dates for subsequent event information are subject to change. Final due dates will be published in the 2007 update of OMB Circular No. A-136.

Subsequent event information will be based on the agency's materiality threshold. For additional guidance, see OMB Bulletin No. 06-03, as amended, and Circular No. A-136, revised, on the OMB Web site at http://www.whitehouse.gov/omb.

4705.65-Other Required Information

Verifying agencies must inform and disclose any changes or no changes due to subsequent events that occurred between the date of the issuance of the agencies' audited financial statements and prior to November 28, 2007. The CFO's office should e-mail this information to inform FMS of any significant events, no later than November 30, 2007.

Note: At the time of this publication, due dates for subsequent event information are subject to change. Final due dates will be published in the 2007 update of OMB Circular No. A-136.

A negative confirmation is required, if applicable. Do not include legal contingencies or items submitted in Note 1 in GFRS. Base the information provided on the agency's materiality threshold.

4705.70-Yearend Intragovernmental Reconciliation Process Related to Closing Package Reporting

The agencies will use the Closing Package intragovernmental data (submitted by verifying agencies as part of their Closing Package) to generate reports.

On November 21, 2007, verifying agencies will generate the following IRAS reports using the Discoverer application in GFRS. These reports 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;
  
  AND
  
  
• Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report.

Agencies should use these reports to work with their trading partners to reconcile reciprocal Closing Package differences. Any significant changes that are reconciled should form the basis for adjusting journal entries affecting intragovernmental activity and balances at the FR level.

On November 29, 2007, FMS will distribute the IRAS-generated Intragovernmental Comparative Closing Package Explanations of Differences Report to the reporting agencies and their IGs.

4705.75-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 to 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.

4705.75a-Detailed CFO Representation Instructions

Verifying agencies must provide responses to the following intragovernmental issues.

4705.75b-Section I: General Intragovernmental Reporting Results

• Is consistency maintained between the agency intragovernmental reporting entered in GFRS Module GF004 (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/procedures that pertain to the agency's ability to record, process, summarize, and report intragovernmental activity/balances by trading partner. Describe the basis of accounting used/policy followed for buy/sell related (for example, accrual), fiduciary (for example, straight-line, TFM), and transfer (for example, OMB Circular No. A-136) intragovernmental transactions.
  
  
• Review the agency's activity reported under trading partner "00". Indicate the dollar amount or percentage of this activity that relates to business conducted with highly classified agencies, the U.S. Senate, or the Congress.
  
  
• 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 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.

4705.75c-Section II: Explanation of Closing Package Differences

Explain the differences indicated on the Intragovernmental Closing Package Material Differences/Status of Disposition Certification Report 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. For each explanation, documented support must be included, in detail, on the supplemental attachment provided by FMS. (Refer to the Detailed Quarterly Status of Disposition Certification Instructions in subsection 4706.30e 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 November 26, 2007.

Note: For fiscal 2007, the agency IG/IPA will perform audit procedures as prescribed in OMB Bulletin No. 06-03, Audit Requirements for Federal Financial Statements, as amended, dated August 23, 2006 (pending revision).

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, updated for fiscal 2007. 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 relative 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 (2-digit codes representing groupings of similar reciprocal transaction types). Agencies should use these categories to reconcile balances with their trading partners. 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 requires reporting agencies to reconcile/confirm intragovernmental activity and balances quarterly for the following reciprocal groupings:

• Investments;
  
  
• Borrowings;
  
  
• Federal Employees' Compensation Act (FECA) transactions;
  
  AND
  
  
• Employee Benefit Program transactions.

4706.20a-Fiduciary Transactions (Using the IFCS)

• 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).
  
  
• FECA transactions with DOL-Including routine payments and accruals for FECA liabilities.
  
  
• 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 Employees' Retirement System (CSRS), the Federal Employees' Life Insurance Program, and the Federal Employees' Health Benefits Program.

For third quarter fiscal 2007, IFCS will open on July 9, 2007, and will close on July 24, 2007. For fourth quarter fiscal 2007, IFCS will open on October 9, 2007, and will close on October 19, 2007.

4706.20b-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 by mail.

4706.20c-IFCS Reporting Reconciliation Requirements

Agencies must ensure that fiduciary intragovernmental balances are confirmed using 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";
  
  
• 8804F, "Purchases of Assets - Other."

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

The above memo USSGL accounts are not crosswalked in the Closing Package but are included in the quarterly reciprocal category reports and must, therefore, be reported in quarterly agency submissions.

4706.30-Quarterly Intragovernmental Transactions Reconciliation Process

Agencies should use 2-digit trading partner codes for all intragovernmental transactions. When agencies report "appropriations transfers" within their departments, they should use their 2-digit trading partner code rather than "00". Trading partner code "00" is limited to the House, 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. Agencies should not confuse the Treasury General Fund 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 the Treasury General Fund are as follows:

• Custodial activity, such as tax revenue-USSGL accounts applicable to this activity include but are not limited to USSGL accounts 2980F, 5800F, 5801F, 5990F, and 5991F.
  
  
• Other revenue 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 (USSGL account 5790F) that consist primarily of interest revenue and seigniorage, for Treasury Bureaus FMS and BPD only.
  
  
• Transactions related to Treasury-managed trust funds.
  
  
• 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 accounting 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, if they are unsure about the applicability of department code "99" to particular transactions.

4706.30b-Agency "F" Transactions Submission

In support of the quarterly reconciliation process, verifying agencies must submit intragovernmental balances (only transactions with the "F" attribute) for all proprietary USSGL accounts to FMS no later than July 24, 2007, for third quarter fiscal 2007, and October 19, 2007, for fourth quarter fiscal 2007. 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 format for verifying agencies (Excel or text file format) must contain the following elements:

• Department code (2 digit)-Treasury department code associated with the ATB fund group; should be consistent with the ATB code (required).
  
  
• Bureau or subagency code (2 digit)-Bureau code associated with the ATB fund group; should be consistent with the ATB code (required).
  
  
• Fund group (4 digit)-MAF fund group (required).
  
  
• USSGL account (4 digit; required).
  
  
• "F" attribute (Federal)-Should be "F" only.
  
  
• Trading partner (Federal) (2 digit)-Federal trading partner codes.
  
  
• Dollar amount-Should indicate the last two positions in decimal form or rounded to the nearest dollar.
  
  
• Normal balances reporting method-All amounts with normal balances must be positive, and amounts with abnormal balances must be negative (required).
  
  OR
  
  Standard balances reporting method-All debits are displayed as positive amounts and all credits are displayed as negative amounts.
  
  
• Exchange (X) or nonexchange (T) attribute.
  
  
• Duplicate Partner Code Identifier (DPCI)-This required field is a single-digit code to be applied only to trading partners that share a 2-digit department code with another department. The DPCI field should be blank for all other trading partners. The Federal Intragovernmental Transactions Accounting Policies Guide and the FMS Web site at http://www.fms.treas.gov/factsi contain guidelines for using the DPCI identifier.

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

Verifying agencies should send their completed submissions to their FMS intragovernmental contact person and electronically to the following e-mail address financial.reports@fms.treas.gov. Agencies also should provide the completed Agency Quarterly Intragovernmental Data File Submission Checklist via e-mail or via fax to 202-874-9907.

4706.30c-FMS Intragovernmental Activity Reports

Within approximately 4 business days of agencies' submissions of the quarterly "F" transaction data files, FMS will consolidate agency quarterly financial data. Beginning with the third quarter, reporting agencies will use the Discoverer query through GFRS to generate the following seven reports:

• Intragovernmental Activity Detail Report by Trading Partner;
  
  
• Intragovernmental Activity Summary Report by Trading Partner;
  
  
• Intragovernmental Reciprocal Category Summary Report;
  
  
• Intragovernmental Reciprocal Category 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.

To gain access to the Discoverer through GFRS, all agency users and backup personnel must submit a GOALS II ESAAS Form by fax to the GFRS administrator at 202-874-9907.

4706.30d-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. FMS will provide a blank form that agencies will use to explain in detail their reporting on 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 will allow agencies to identify differences with trading partners, excluding "00" and "99", by reciprocal categories (excluding RC 25) that are greater than or equal to a respective reconciliation assurance level. This level will be systematically established in IRAS using four functions for fiscal 2007:

• 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 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 7, 2007, for third quarter fiscal 2007 and is not required for fourth quarter fiscal 2007.

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

4706.30e-Detailed Quarterly Status of Disposition Certification Instructions

For fiscal 2007, verifying agencies are required to provide an explanation of their 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.

Documented support must be included in detail for each explanation on the supplemental attachment provided by FMS. (Refer to the Federal Intragovernmental Transactions Accounting Policies Guide for further detail regarding the explanation of differences.)

4706.30f-Reporting Agency's Explanation of Reporting

• 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 should also 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 to support the confirmation of reporting.
  
  
• 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.
  
  
• 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 and explained.
  
  
• 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 and explained.
  
  
• 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.

FMS will provide agencies with a Comparative Status of Disposition Report. This report compares amounts and explanations of material differences reported between each reporting agency and its trading partner. FMS will generate and send this report to agencies no later than August 9, 2007, for third quarter fiscal 2007.

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," agencies are required to contact their 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 2007, then the CFOs from each respective agency will be required to provide FMS a "plan of action" to address unresolved material "confirmed reporting" differences.

In addition, for fiscal 2007, 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 the third quarter fiscal 2007, then the CFOs from each respective agency will be required to provide FMS 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 with the third quarter fiscal 2007 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 8-digit code. The 8-digit code combines a 2-digit department code, a 2-digit bureau code, and a 4-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. 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 28, 2007. For fiscal 2007 reporting, agencies must review and update individual components of MAFs electronically by September 19, 2007. After agencies review, update, and submit the MAF, FMS will review and approve the MAF by September 28, 2007.

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 installed the USSGL must crosswalk their general ledger accounts to the USSGL accounts before transmission.

The reporting deadline for fiscal 2007 ATBs is as follows:

• Nonverifying agencies-November 15, 2007;
  
  
• Verifying agencies-November 30, 2007.

Verifying and nonverifying agencies can submit ATBs as early as September 28, 2007. 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 2007 audited agency consolidated financial statements due to OMB. Agencies also must do the following:

• Use the required attribute "F" or "N" to identify a USSGL account balance as Federal (F) or non-Federal (N). Report the 2-digit department code (see Appendix 5) of the trading partner when using attribute "F".
  
  
• Use the required attribute "S" or "A" to identify a USSGL account balance as custodial (S) or noncustodial (A).
  
  
• Use the required attribute "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.

4707.20c-Special Accounts

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

• Suspense 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:

• General fund receipt accounts range from 0100 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, SF 224) in General Fund receipt account symbols using their 2-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-Trust Fund Accounts

BPD's Trust Fund Management Branch will provide to the lead program agency an ATB for the trust fund activity located at BPD for each of the trust funds listed in Figure 4. For fiscal 2007, agencies will receive these ATBs no later than November 1, 2007.

BPD will use USSGL accounts from Appendix 11 with the proper attributes. The lead program agencies identified in Figure 4 must include the trust fund data in their ATBs. Direct any questions regarding the ATB data received from BPD to Dwayne Boothe at 304-480-5244.

4707.20e-Allocation Transfer of Appropriations

The parent (transferor of the appropriation) must report all activity in its financial statements, whether material to the parent or not. The parent is responsible for reporting FACTS I data. Receiving departments must not report any information relating to the transfer appropriation account on their ATBs. One exception exists for 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. Another exception exists where the Executive Office of the President is the parent. In these cases, the receiving agencies are responsible for reporting all proprietary activity on their ATBs (see OMB Circular No. A-136, revised).

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 two ways:

• Report in the Treasury appropriation/fund group from which the funds were originally appropriated;
  
  OR
  
  
• Transfer asset balances without reimbursement to an open TAFS and report in that open Treasury appropriation/fund group.

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.

Direct inquiries and deliver documents required by this chapter to:

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:

Lynda Downing
Government Accountability Office
441 G Street, NW., Room 5476
Washington, DC 20548
Telephone: 202-512-9168
E-mail: uscfs@gao.gov

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

Appendices Listing

Appendices are available in the PDF version only.

Transmittal Letter No. 637

Volume I

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 2007 Closing Package methodology, the Federal intragovernmental transactions process, and requirements for electronically submitting preclosing adjusted trial-balance(s).

2. Page Changes

Remove		Insert
I TFM 2-4700 (T/L 630)		I TFM 2-4700
Table of Contents for Part 2 (T/L 632)		Table of Contents for Part 2

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

Date: May 30, 2007

Kenneth R. Papaj
Commissioner