New Billing Procedures for Office of Aircraft Services--REPLY REQUESTED BY 7/5/2000


                                            06/27/2000 

 
To:       GS-W AO
cc:       Michele L O'Meara/WRD/USGS/DOI@USGS
Subject:  New Billing Procedures for Office of Aircraft Services 
 
                 REPLY REQUESTED BY 7/5/2000



AO's:

In FY 1997, The DOI Aviation Management Board of Directors (ABOD) voted to 
change the method of paying the Office of Aircraft Services (OAS) for 
providing aviation services to the Bureaus. Prior to that date, the 
payment method was to add a standard surcharge to aviation costs (flight 
hours, monthly rate on fleet aircraft, fuel, etc.) when billed directly to 
the users. However, it was the consensus of the ABOD that the standard 
surcharge (currently 13%) was inequitable in some instances, and that 
Bureaus should pay only for services received. 

The replacement method of payment chosen, beginning in FY 1998, was to 
continue billing users directly for flight hours, monthly rates, fuel, 
etc., without adding a surcharge. Bureaus would then reimburse OAS for the 
surcharge in an annual up-front payment. In order to allow Bureaus to 
budget appropriately for the up-front payment, a 3-year cycle was used. 
Thus, the FY 2000 payment will be based on OAS's actual costs for USGS 
aviation services in FY 1997 as well as a prorated share of OAS expenses.

The USGS originally decided to prorate the current year's OAS payment on 
the previous year's aviation costs. That system had some strong points, 
but funds from expired reimbursable projects were not available in the 
following year to pay the associated surcharges. Field stations indicated 
a different system was needed which would facilitate payment of aviation 
expenses, as well as the surcharges within the same year, so that the 
correct project could be charged.

Beginning in FY 2000, the Division will apply a 13% surcharge based on the 
OPAC bill and process a standard voucher (on a monthly basis) that will 
debit the WRD cost center and credit the Division holding account, where 
this surcharge was originally paid. This 13% assessment applied to each 
OPAC charge should generate the necessary funds to cover the Division's 
OAS surcharge. 

Example: 

Alaska receives an OPAC bill for January aviation costs of $25,000.
HQ receives a copy of OPAC and assesses 13% of the $25,000.

A standard voucher would be processed at the end of the month:

Debit Alaska             $3,250
Credit Division Account ($3,250)

The credit to the Division account will be used to collect the 13% 
surcharge that the Division was charged as an annual up-front payment 
(based on FY 1997 usage).  The Division is responsible for any shortfall 
in surcharges collected.

The attached spreadsheet reflects OAS billings as of May 31, 2000 and the 
amount of the surcharge your cost center accounts will be charged. If you 
have any issues regarding this process or regarding the OAS charges, 
please respond to me by COB, July 5, 2000; otherwise we will plan to SV 
the 13% surcharge reflected in the spreadsheet. Future FY 2000 OAS 
Surcharges will be accessed monthly. For more information, please contact
Michele L O'Meara at 703-648-5042 or momear@usgs.gov.