Post Closeout Comments Date: Wed, 21 Oct 1998 11:36:16 -0400 To: "AO - All Administrative Officers", "AE - Administrative Employees" From: "Alice A. Sabatini, Division Administrative Officer, WRD" Subject: Post Closeout Comments Cc: "Catherine L Hill, ACH/Operations, Reston, VA" , BAS.staff, "Cassie R Pufnock, Program Assistant, Reston, VA" , "Carlyn V West, Program Analyst, Reston, VA" Dear Colleagues: Thanks to all of you and your staffs for your timely and thorough work that helped WRD meet the expedited time lines set by OFM for closeout this fiscal year. I know the sacrifices that many of you make throughout the year and especially during September and October to meet these deadlines and to ensure that every expense is recorded properly. I appreciate your efforts and congratulate all of you on a job well done. I would like to publicly acknowledge the excellent work of the Financial Operations and Reporting Section staff this year in processing and reviewing all of the closeout adjustments. Under Kelly's leadership and with the assistance of two very capable detailees (Scott Padgett and Carolyn Norton), they were able, once again, to make sure all of the I's were dotted and the T's crossed. This is no small success since their work time was shortened by one week this year! Thanks to them for all that they do throughout the year to make an orderly closeout possible and especially for their long hours during the last few weeks. WRD is very fortunate to have such skilled and dedicated staff leading us through the maze of our very complex accounting issues. They make us all look good. I want to point out several areas where we need to make improvements in the next fiscal year (actually this FY 1999) while the thoughts are fresh in my mind: Closing OFA accounts: When reviewing the funding, it was apparent that most offices do not understand the difference between fixed-price and reimbursable funding. All OFA funding is reimbursable unless it is part of the data program and contained in accounts 00100-00400. There are no exceptions to this rule. This means that you cannot use surpluses in these accounts, no matter how small, to close your cost center. There are only two choices when dealing with OFA surpluses in project accounts--reduce funding to the level of expenditures or find (legitimate) ways to spend all of the surplus. When we close the division, we look at total expenses against appropriated and reimbursable funding sources. OFA agreements that are not spent completely, result in lost spending authority because we cannot support a legal bill to the customer under the Economy Act. When closing FY 1998, after all of the expenditure adjustments were processed, WRD had over $1 million in unspent OFA agreements that we could not use. However, cost centers had used that $1 million surplus to close out their cost centers--the related expenditures were in overspent projects that were hitting and overspending our appropriated funding (via FFS PCAS distribution to the default customer 0001X). In the final hours before our deadline, we called and worked with cost centers to move expenditures to spend this funding because the division could not close. WRD only plans to leave $250,000 in appropriated funding on the books each year to cover uncollectible debts. It doesn't take many of these unspent OFA agreements to use up all of that "reserve". We need your help and attention to ensure that your managers understand that these monies must be spent and that surpluses cannot be used to fund deficits in other cost center projects. If the time allowed for adjustments during FY 1999 is further shortened as has been threatened, we will not have time to resolve these unspent agreements. Please take a moment now to review your FY 1998 project balances to identify unspent OFA agreements and discuss this very crucial issue with your management. During FY 1999, the Senior AOs will work with cost centers to identify these agreements and resolve any associated issues toward the goal of preventing recurrence. Commingled Funding: I was surprised to find during my cursory review of funding how many cost centers are still commingling funds in project accounts. I saw a number of accounts where federal or OFA funding was added to an account whose primary funding source was the Federal-State Cooperative Program. This practice must be discontinued. Most of you understand why federal funds cannot be added to coop-funded accounts; that practice results in appropriated funding in excess of the 50% matching limitation specified in the appropriation language. This same logic explains why OFA funding cannot be added to coop accounts--this OFA funding is also appropriated, just not to the USGS. I believe that the addition of OFA funding to these coop accounts also exceeds the intent of the matching language. Another example of commingling occurs when technical support funding is added to an account funded by reimbursable agreements (OFA or Coop). Instances of this type of commingling were rare, but I don't think I've ever explained why this is a problem. Since this funding is the result of assessments (WOTSC), adding it to a reimbursable account has the effect of lowering the assessment on that project and its associated agreements. TS funding should be kept in the dedicated account 00900, added to data accounts (when related to data work), or added to accounts funded by USGS appropriations. Please take a moment to review your accounts to identify problematic commingling of funds. During the next few months, each Senior AO will review accounts for commingling problems and discuss problems and remedies with cost centers. I recognize that these cost accounting requirements are complicated and often onerous, but we must be mindful of the reasons for the requirements and the potential negative consequences of non-compliance. If you are unsure about a specific accounting requirement, please ask for an opinion. In closing I'd like to again reiterate my appreciation for all of your hard work. (Those of you that have been with the division for a while remember the days of the good and bad closeout letters to cost centers--consider this a GREAT letter to every cost center.) I appreciate your efforts and feel confident when I state to others that WRD has the most dedicated and knowledgeable administrative staff in the bureau! I know I can count on that superior level of effort in the coming months and years. You make me proud to serve as your Division AO. Alice