1. USDA 2016 Financial Management Training Transforming Shared Services Financial Challenges and Hot Topics Presented by Ella Robertson, Rita Cronley, and Bryce Johnson

2. The Challenges Ensure that the configuration changes in FMMI are USSGL compliant and documented. USDA Transforming Shared Services2

3. What We Do Financial Reporting Branch and The Accounting Group within the Implementation Division work together to: Approve all accounting changes within FMMI to ensure financial system is USSGL compliant. Identify and resolve issues specific to agencies within FMMI to ensure standard government wide accounting is being followed. Determine how the accounting changes can best be implemented in FMMI Analyze recommendations from agencies involving changes to their business processes to ensure USSGL compliance. Write a paper for each issue, background, issue, recommendation and posting models USDA Transforming Shared Services3

4. FMS Issues Resolution Committee Established in FY 2015 by Jon Holladay, CFO, and John Brewer, DCFO, to address USSGL issues within USDA’s financial system, Financial Management Modernization Initiative (FMMI). The model for the FMS IRC is the USSGL Issues Resolution Committee chaired by The Bureau of the Fiscal Service, Treasury CFO –appointed agency representatives The FMS IRC provides a forum for agencies to learn about and discuss accounting issues that may affect more than one agency. The Accounting Group within the Implementation Division chairs FMS IRC USDA Transforming Shared Services4

5. Process Flow Service Now Incident- USSGL Related Complete research, provide recommendation Research: USSGL Treasury Financial Management USSGL Scenarios Public Laws OMB Circulars FASAB Standards USDA Expertise Budget Financial Reporting Systems USDA Transforming Shared Services5

6. Process Flow cont. Agency Concurrence IRC Concurrence Approved Document uploaded to Service Now Incident Service Now Incident becomes a Change Request USDA Transforming Shared Services6

7. Agencies Responsibility Tell us the whole story Start with what happened When did the problem first occur? What Treasury Account Symbol is involved? What accounting entries were made? Are there other USDA offices or agencies you have contacted? Respond to our inquiries for information Review our documentation Be available to present at the FMS IRC Meeting USDA Transforming Shared Services7

8. Hot Topics New USSGL Accounts New Fund Type “Direct Offsetting” Accounting for the Use of Sale Proceeds to Purchase Replacement Property Credit Reform Agencies – Administrative Expense Appropriation Transferred to Salaries and Expenses USDA Transforming Shared Services8

9. USSGL 4360 Appropriation Purpose Fulfilled- Balance Not Available The entire balance of an X-year appropriation can be cancelled if two conditions are met: The purpose of the appropriation has been carried out No disbursement has been made for 2 consecutive years Partial Cancellation The appropriation has many programs and one of the programs meets the aforementioned conditions Must have enacted legislation to cancel the partial balance (Refer to cancellation cheat sheet on the USSGL web site) In the absence of legislation, record the partial balance in USSGL 4360 “Appropriation Purpose Fulfilled-Balance Not Available.” USSGL 4360 does not close at year-end USDA Transforming Shared Services9

10. USSGL 6150 Expensed Asset Definition: The amount of expenses recognized by a purchasing agency when a capitalized asset acquired from another federal agency does not meet the purchasing agency's capitalization threshold. Justification: This account was established to separate activity out of account 610000 pertaining to an asset purchase, not capitalized. This will allow for proper presentation of the FR, reflecting this expense at the government-wide level. Balance Sheet (Cum Results), Statement of Net Cost USDA Transforming Shared Services10

11. New Fund Type “Direct Offsetting” Direct vs. Appropriation vs Offsetting Collections OMB A-11, section 83.5: How can I determine whether an obligation should be classified as direct or reimbursable? In general, reimbursable obligations are those financed by offsetting collections (see section 20.7(d)) received in return for goods and services provided, while all other obligations are direct. However, there are exceptions. USDA Transforming Shared Services11

12. A-11, Section 83.5 Exceptions If the obligations are And ifAnd the schedule P offsetting collection lines are from The classification is Financed from offsetting collections from Asset salesNon-federal sources (lines 4033 or 4123) Direct Intragovern- mental expenditure or non-expenditure transfers There is no benefit exchanged to the paying account (e.g., does not receive a good or service) Federal sources (lines 4030 04 4120) Direct USDA Transforming Shared Services12

13. Direct, Direct Offsetting, Reimbursable Appropriation from General Fund of the Treasury Direct, use 3107/5700 Offsetting Collections “Direct Offsetting” no 3107/5700 (A-11 Section 83.5) Offsetting Collections Reimbursable, no 3107/5700 USDA Transforming Shared Services13

14. Property Transfer of Asset Without Reimbursement- Billable vs. Non-Billable Use of Sales Proceeds to Purchase Replacement Asset- Special Fund Use of Sales Proceeds to Purchase Replacement Asset- Direct Fund USDA Transforming Shared Services14

15. Transfer of Asset Without Reimbursement- Billable vs. Non-Billable Transfer Asset from Expired to Non-Expired WBS element was billable and needed to be non-billable Billable WBS - accumulates cost to bill an agency. No cost involved, without reimbursement. USSGL TC E510 Record the transfer-out of inventory items and general property, plant and equipment Debit 5730/credit 1750 USSGL TC E606 Record the transfer-in of inventory items and general property, plant and equipment Debit 1750/credit 5720 USDA Transforming Shared Services 15

16. General Rules on Use of Sales Proceeds to Purchase Replacement Assets If you sell an asset, you may use the proceeds to purchase a like replacement for the fiscal year of sale and one following fiscal year. Make an obligation for replacement equipment If the obligation has not been made at time of sale, the proceeds are held in clearing account F3845-Proceeds of Sale, Personal Property At time of obligation, the proceeds are transferred from F3845 to the expenditure Treasury Account Symbol USDA Transforming Shared Services16

17. Use of Sales Proceeds to Purchase Replacement Asset- Direct Fund Use horses to carry equipment and people The agency sells these horses and use the proceeds to purchase replacement horses. The purchase of replacement property is recorded in the direct fund 3107/5700 should not be recorded when sales proceeds were expended New fund type “Direct Offsetting” USDA Transforming Shared Services17

18. Use of Sales Proceeds to Purchase Replacement Asset- Direct Fund Use USSGLs 5775 and 5776 to transfer proceeds to and from the direct fund and the clearing account F3845 Proceeds of Sale, Personal Property TC C155: To record the transfer-in of non-budgetary fund balance to other Federal entities without reimbursement Debit 1010/Credit 5775 TC E509: To record the transfer-out of non-budgetary fund balances to other Federal entities without reimbursement Debit 5776/Credit 1010 USDA Transforming Shared Services18

19. Use of Sales Proceeds to Purchase Replacement Asset- Special Fund Agency Special Fund - collect fees and use the fees to perform services and to the purchase equipment including replacement equipment needed to perform the services. The fund type is XSVA (Receipt, Special, Available, Category A. 3107/5700 not an issue because expended authority is not applicable to special funds. Proceeds from sales are transferred to and from the special fund expenditure account and F3845 using USSGLs 5775/5776 USDA Transforming Shared Services19

20. Credit Reform Credit reform program account receives appropriation for admin expenses By law the amount of admin expenses is transferred to the annual year salary and expense account Unobligated balance in the annual year salaries and expense account may be available for another year USDA Transforming Shared Services20

21. What’s Next Accounting for Improper Payments and Recovery Act (IPERA) Upward and Downward Adjustments USDA Transforming Shared Services21