Closing FY 1996

To: "AO - All Administrative Officers"<distribution>
cc: "Alice A Sabatini, Administrative Officer, Reston, VA" <aasabati>,
        "Kelly L Bradley, SUPERVISORY FINANCIAL SPEC, Reston, VA" <kbradley>,
        "Catherine L Hill, ACH/Operations, Reston, VA" <clhill>
Subject: Closing FY 1996
Date: Mon, 13 Nov 1995 16:04:48 -0500
From: "Alice A Sabatini, Administrative Officer, Reston, VA" <aasabati>

The Division is working on guidance to all offices to discuss the changes that
will occur during FY 1996 as a result of our implementation of recommendations
contained in the Federal-State Cooperative Program audit report and the Policy
and Operations Council decisions on assessments.  The following is a brief
"heads up" on issues that will be addressed more thoroughly in future WRD
memos.

1.  Actual cost accounting on projects will be required in FY 1996.  This
    means that charges to projects should not be transferred between accounts
    for the purpose of closing out with a zero balance.  We anticipate that
    this will result in some accounts being overspent and some being 
    underspent at year end.  This shifting of costs refers to the use of 
    standard vouchers, PRUS adjustments, and charging labor to accounts other 
    than those on which work was actually performed.  This change in
    accounting practice should begin immediately.

2.  Charges for unfunded/underfunded work cannot be charged to the common
    services (overhead) account.  The practice of charging this work to the
    common services account spreads the costs to all customers and increases 
    the overhead they would normally fund.  Unfunded/underfunded project work 
    should continue to be charged against the project account even if that 
    project will have no funding during FY 1996.  The practice of charging
    these costs to a subaccount of the 88800 account should be discontinued.
    This change in accounting practice should begin immediately.

We will implement these changes during FY 1996 in anticipation of a change in
our appropriations language that permits the use of fixed price agreements in
the Federal-State Cooperative Program.  We believe that these changes will
improve our cost accounting practices and allow us to better estimate the cost
of future work efforts.

3.  It is anticipated that the assessment policies that were distributed for
    comment as "interim" will be effective for FY 1996.  There are two that
    have a large impact on WRD.  They are the use of net assessment rates and
    interdivision assessment practices.  We are working on examples and 
    procedures for both of these assessment changes and will be distributing 
    them to all WRD offices as soon as these changes are finalized.

Please be patient with us.  We are developing policy and distributing guidance
as quickly as we can.  There is much that has not yet been finalized and
developing implementation strategies and procedures takes some time.