Changes in the Recording of Funding in the Federal Financial System To: "AO - All Administrative Officers" cc: "Richard W Cecchetti, Budget & Financial Specialist, Reston, VA" , "Susan K Clark, Budget & Financial Specialist, Reston, VA" , "Melinda M Lanza, Supvy Computer Specialist, Reston, VA" , "Catherine L Hill, ACH/Operations, Reston, VA" , "Kelly L Bradley, Supervisory Financial Spec, Reston, VA" , "Isabelle Halley des Fontaines, Chief, Br. Admin. Mgmt. Sys., Reston, VA" Subject: Assessment of Technical Support Funding by Districts Date: Wed, 21 Aug 1996 15:28:02 -0400 From: "Alice A Sabatini, Administrative Officer, Reston, VA" In Reply Refer To: Mail Stop 442 August 21, 1996 MEMORANDUM To: Administrative Officers From: Alice A. Sabatini Division Administrative Officer Subject: Changes in the Recording of Funding in the Federal Financial System ***RESPONSE REQUIRED BY AUGUST 31, 1996*** As many of you are aware, we have changed the way we record assessments in the Federal Financial System (FFS) this year in response to the recommendations made by the auditors conducting the Federal-State Cooperative Audit. Prior to FY 1996, agreements were split and portions funded in both the direct and district overhead projects in the FFS (for example, an agreement for $100 would be recorded in the direct project for $50 and the overhead (88800) project for $50. This was difficult for many districts to reconcile and underreported the total indirect costs in the FFS because most of the cost center overhead was recorded as a direct charge against the agreement. The only indirect costs shown in the FFS were related to WOTSC and bureau assessments. In FY 1996, we changed the way we recorded agreements in the FFS. The entire agreement is now recorded in the direct project (for example, all of the $100 agreement is shown in the direct project and 0 is shown in the 88800 account). The burden rate is now computed as the aggregate of bureau, WOTSC, DOTSC and any other area-type assessments. The transfer program that moves funding from AIS to the FFS creates an agreement for each cost center (CC9699900) with an amount derived from the net total of the 88800/90100 funding records. The agreement is associated with customer number 999903D in FFS and has been appearing on FFS reports since May. This 999903D customer is not burdened in FFS. Instead the aggregate burden rate is applied to the direct project. Cost centers need to make sure that the 99900 agreement number (CC9699900) is reserved for this use and not used for other purposes or other customers. This has change has caused a few new problems, however. They are listed below with the solution for this fiscal year. 1. When technical support funds (AIS customer number 0003A and FFS customer number 999903A) are allocated to cost centers to do work for the benefit of the division, the normal cost center practice is to apply a district overhead. In the FFS, the 999903A customer cannot be assessed because it is itself an assessment (sort of like applying taxes to a tax). We have worked around this in the past by funding part of the agreement directly into the 88800 project, but since we are no longer doing this, we need to develop a work around. For this fiscal year, districts will show a zero cost center assessment against these technical support allocations and collect this assessment by standard voucher (debiting the direct project and crediting the 88800 account). These standard vouchers should be processed remotely in FFS as soon as possible, but not later than August 31 (you have my sincere apology for not getting this word out to you sooner and adding this to your August workload). As a longer term solution, Headquarters will try to limit the amount of technical support funding that is allocated to the field, substituting federal program funds instead to fund those very worthwhile work efforts. 2. The gross FFS reports (316B, 286B) appear to be overstated by the amount of the 999903D record (or the 88800/90100 funding). When comparing the FFS gross reports to AIS reports it will be necessary for cost centers to subtract this funding record from the total to derive the true cost center total. We are examining the possibility of developing a new FFS report (a cost center version of the 264 report) to subtract this double count, but that new report will not be available prior to closeout. The net FFS report (316A and 286A) should show the correct amounts. We encourage offices to use the 286A report when confirming funding and completing the closeout exercises. 3. We do not transfer funding to FFS that is not firm. This results in a calculation for the 999903D funding based only on those agreements in AIS that are firm at the time of the monthly funding transfer deadline (usually the 25th of each month). For most of our cost centers, all funding records are not firm until August or September meaning that the total 88800/90100 funding will not be populated in FFS until August or September. We recommend that all cost centers run AIS funding reports selecting only firm funding at the same time as the last funding transfer for the month is made. Those AIS reports should be kept and compared with the monthly FFS reports when received each month in an effort to recognize, report and correct any problems throughout the year and not just in September or during the closeout adjustment period. For those of you who have not yet reviewed your FFS funding reports this fiscal year, these changes may seem a bit overwhelming. If you have questions, please contact either Kelly Bradley or myself. We recommend that all cost centers follow the procedures outlined above and review the August FFS reports as a "trial run" and report any deficiencies to us in early September. In reporting a problem, it is helpful if you fax us a marked-up copy of your FFS report, the corresponding AIS report along with an explanation of the problem. Our fax number is 703-648-5295.