Date: Fri, 12 Nov 1999 16:53:11 -0500
To: "A  - Division Chief and Staff",
        "B  - Branch Chiefs and Offices",
        "DC - All District Chiefs"
From: "Alice A. Sabatini, Division Administrative Officer, WRD"
Subject: Matching Federal Offerings in the Fiscal Year 2000 Cooperative
         Water Program
Cc: "AO - All Administrative Officers"

Attached are is a Word Document and it's attached Excel spreadsheet.  Both
of these documents will be posted to the intranet on Monday for ease of
access.  The text of the Word document follows:





In Reply Refer To:
Branch of Administrative Services
Mail Stop 442


MEMORANDUM

							November 12, 1999

			

To:		District Chiefs
		Branch Chiefs
		Water Resources Division Senior Staff

From:		Catherine L. Hill  /s/
		Associate Chief Hydrologist for Program Operations

Subject: 	Matching Federal Offerings in the Fiscal Year 2000 
		Cooperative Water Program

As you are well aware, the process of developing the Fiscal Year (FY) 2000
budget for the USGS and assessing its consequences has been, and continues
to be, a complex one in terms of accounting procedures and programmatic
funding changes.  As the Interior Appropriations bill nears final approval,
much of the uncertainty is being resolved.  The consequences of the FY 2000
budget restructuring for district accounting procedures are explained in
WRD Memorandum No. 2000.05 which will be issued shortly.  The purpose of
this memorandum is to describe the process for presenting Federal matching
funds to Cooperators in light of the transferring of a portion of these
funds from the Cooperative Water Program line item to two bureau-level line
items. 

Based on the current status of Congressional action on the Interior
Appropriations bill for FY 2000, Federal matching funds in the Cooperative
Water (Coop) Program budget line item will decrease by 13 percent compared
to FY 1999 ($70.137 million in FY 1999 compared to $60.856 million in FY
2000).  The reason for the decrease is the transfer of Federal matching
funds from the Coop line item to the bureau-level Facilities line item and
the Science Support line item.  Despite the transfer of these funds out of
the Coop Program line item, we plan to continue to match them with
offerings from our cooperators in the future as we have in the past.  In
doing so, the funds that the USGS offers for matching in FY 2000 will be $
$73.250 million--a 4 percent increase over FY 1999 representing an
adjustment for uncontrollable costs.

In previous interactions with regions and districts, we have discussed, at
some length, the process and consequences of offering the funds transferred
from the Coop Program line item for facilities costs as a match for
cooperator funds.  We acknowledge that the corresponding cooperator match
for these transferred funds would also help pay facilities costs.  The
process for matching the funds associated with Science Support
(bureau-level indirect costs) would be similar, except that the
corresponding matching funds from the cooperator would not be used to pay
the costs of bureau-level indirect costs; all of those costs will be paid
from the Science Support line item in order to direct more cooperator
funding to the direct scientific work effort.  

Attached is an Excel spreadsheet that has two tables.  Table 1 shows the
calculation of assessments in FY 1999 for a $200,000 project ($100,000 each
side) and demonstrates the changes in assessment practices for the same
matched project in FY 2000. In Table 1, we see that with constant levels of
cooperator funding, net project funding and district indirect income would
each decrease by 3.3 percent from FY 1999 to FY 2000. Table 2 shows the
calculation of assessments in FY 1999 for a $100,000 unmatched project and
demonstrates the changes in assessment practices for the same unmatched
project in FY 2000.  Table 2 demonstrates that given a constant level of
cooperator funding, the net project funding and district indirect income
would each increase by 2.6 percent from 
FY 1999 to FY 2000.

Note that even though the augmented Federal matching funds now total
$73.250 million, only $60.856 million (83.080 percent) are actually
spendable at the district level.  The remaining $12.394 million (16.920
percent) consists of two parts: Facilities funds 
$6.476 million (8.841 percent) paid by Headquarters; and Science Support
$5.918 million (8.079 percent) also paid by Headquarters.  The Federal
share of facilities 
(8.841 percent) is a constant percentage of the augmented Federal matching
funds across all of the districts.  The cooperator's share of facilities
costs is at a rate that is district-specific.  The Federal share of Science
Support (8.079 percent) is a constant percent of Federal matching funds
across all of the districts.  Cooperators will not fund any portion of
Science Support. 

Continuing to match all of the funds transferred from the Coop Program line
item to bureau line items has several obvious benefits:

1. The decision to restructure the USGS budget is put in a much more
positive light.  We can show our cooperators that the restructuring is
essentially revenue neutral in terms of Federal matching offerings in FY
2000, as the Director intended. 

2. Districts will be able to maintain a stable Coop program in FY 2000
without having to request additional unmatched funds from cooperators.
This benefit will be especially helpful to districts with cooperators who
cannot or will not match Federal offerings more than 50:50.

3. Earlier this year, the division had made the decision to continue to
show transferred funds for facilities as a component of Federal match;
including the funds transferred for Science Support is a logical extension
of this decision.

4. This arrangement would be mostly transparent to cooperators and easily
explained.  In the past, cooperators have matched USGS funds that were used
to pay for facilities and bureau-level indirect costs.  We simply plan to
continue this arrangement, even though these funds will reside in a
different line item.   

In conclusion, we plan to continue to offer all funds transferred from the
Coop Program to the two bureau line items as matching funds in FY 2000.
These funds will be included as Federal Matching Funds in Joint Funding
Agreements, just as they have been in the past, making the process largely
transparent to cooperators.  We anticipate that cooperators will welcome
the news that the budget restructuring will not result in a reduction of
Federal matching offerings, but rather it will begin a process of reducing
assessment rates for their contributions to the Coop Program.  

Copy to:	Administrative Officers