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4252.1B CFO P Accounts Payable Policy Manual

Date: 09/30/2009
Status: Validated
Outdated on: 09/30/2019

GENERAL SERVICES ADMINISTRATION  

Washington, DC  20405

                                                                                     

CFO P 4252.1B

September 30, 2009

 

GSA ORDER

 

 

 

SUBJECT:  The Accounts Payable Policy Manual provides GSA policies, procedures and guidelines for accounts payable.

 

1. Purpose.  This order transmits changes to the Accounting Operations - Voucher Examinations Payment Handbook.

 

2. Cancellation. CFO P 4252.1A is canceled.

 

3. Nature of revision.  This Accounts Payable Policy Manual is revised to update policies and procedure as follows:

 

       a.        Renamed the Accounting Operations - Voucher Examinations Payment Handbook to the Accounts Payable Policy Manual;

 

       b.        Incorporated GSA CFO Instructional Letters (ILs) and policy memoranda, Office of Management and Budget (OMB) Circular A-123, Treasury financial management activities, payment information, obligations, and various laws, regulations and policies into the revised Manual.   

 

       c.        Major editorial changes were made throughout the Manual.

 

       d.        An acronym appendix was added to the Manual.

 

 

 

Kathleen M. Turco

Chief Financial Officer (B)

 

 

 

GSA Start Logo GENERAL SERVICES ADMINISTRATION

 

 

CFO P 4252.1B

September 30, 2009

 

Accounts Payable Policy Manual

 

 

U.S. General Services Administration

1800 F Street, N.W.

Washington, DC  20405

www.gsa.gov

 

 

INTRODUCTION

This manual establishes uniform policies for the General Services Administration (GSA)

Office of Financial Policy and Operations (BC), accounts payable functions and provides guidance on procedures and operational requirements where appropriate. While it does not include every policy or procedure, this manual is a useful supplement to other manuals and references, including Federal Accounting Standards Advisory Board (FASAB) Pronouncements, Office of Management and Budget (OMB) Circulars, and United States Department of the Treasury (Treasury), Financial Management Service (FMS) regulations and guidelines on managing accounts payable and various public laws.

 

 

GENERAL TABLE OF CONTENTS

 

 

 

 

CHAPTER 1.        INTRODUCTION

CHAPTER 2.        GUIDELINES, MANAGEMENT RESPONSIBILITY AND INTERNAL CONTROL

CHAPTER 3.        TREASURY FINANCIAL MANAGEMENT ACTIVITIES

CHAPTER 4.        GENERAL PAYMENT INFORMATION

CHAPTER 5.        OBLIGATIONS

CHAPTER 6.        ERRONEOUS/IMPROPER PAYMENTS

CHAPTER 7.        INTERAGENCY AGREEMENTS

CHAPTER 8.        CHIEF FINANCIAL OFFICERS COUNCIL METRIC TRACKING SYSTEM

CHAPTER 9.        MISCELLANEOUS

APPENDIX A        ACRONYMS

 

 

CHAPTER 1.  INTRODUCTION

 

Paragraph                                                                Paragraph

 Titles                                                                        Numbers

 

Purpose…………………………………………………………………………………………..    1

Applicability …………………       ……………………………………………………………...     2

 

 

CHAPTER 1.  INTRODUCTION

 

1.  Purpose.

 

       a.        This manual establishes general standards, goals, and measures for writing and implementing financial transaction procedures.

        b.        This manual provides guidelines for processing vouchers, invoices and other documents to make prompt and proper payments, incur obligations and to assist in administering GSA appropriations and revolving funds.  It provides general guidance for the Services and Staff Offices (SSO) in implementing management controls to ensure that proper internal control is maintained and implemented to safeguard GSA’s assets.  Combined with other manuals and user guides, it can assist and ensure accurate recording of commitments, obligations, expense accruals and payments.

2.  Applicability.  This policy manual is designed for the purpose of providing guidance on policy to financial personnel working in the SSO.

 

 

CHAPTER 2.  GUIDELINES, MANAGEMENT RESPONSIBILITY AND INTERNAL CONTROL

Paragraph                                                          Paragraph

 Titles                                                                  Numbers

 

 

                                       PART 1.  STATUTES AND REGULATIONS

Statutes and regulations governing accounts payable operations ………………………..1

 

                                            PART 2.  OMB CIRCULAR A-123

 

Requirement ……………………………………………………………………………………2

General …………………………………………………………………………………………3

Stewardship ……………………………………………………………………………………4

Management responsibility …………………………………………………………………   5

Internal control…………………………………………………………………………………..6

Implementation …………………………………………………………………………….……7

Standards ………………………………………………………………………………………..8

 

 

                                       PART 3.  OMB CIRCULAR A-123, APPENDIX A

 

OMB Circular A-123, Appendix A, Internal control over financial reporting …………….....9

Implementing OMB Circular A-123, Appendix A …………………………………………..10

 

 

                                       PART 4.  OMB CIRCULAR A-123, APPENDIX B

 

Improving the management of Government charge card programs –

    See charge card policy Order CFO 4200.1 ………...…………………………………   11

 

 

                                       PART 5.  OMB CIRCULAR A-123, APPENDIX C

 

Requirements for Effective Measurement and Remediation

      of Improper Payments – See Chapter 6 ………………………………………….......12

 

 

PART 1.  STATUTES AND REGULATIONS

 

1.  Statutes and regulations governing accounts payable operations.

 

       a.        GSA regulations.

 

                       (1)  The Chief Financial Officer Handbook (CFO P 4251.1) prescribes GSA’s accounting policy and procedures.

 

                       (2)  GSA Delegation of Authority Manual (ADM P 5450.39C) contains internal delegations of authority from the Administrator to the Regional Administrators, Associate Administrators, the Chief Financial Officer, Heads of Services and Staff Offices.

     

                       (3)  GSA Financial Management Regulations – GSA FMR Subchapter D, Part 102-118, Transportation Payment and Audit.

 

       b.        Department of the Treasury regulations.  The Treasury Financial Manual (TFM) Volume 1 contains many procedures related to accounts payable policies for financial operations, report on obligations, and payment disbursing procedures.

 

       c.        OMB Circular A-123.  OMB Circular A-123, Management’s Responsibility for Internal Control, provides guidance to Federal managers on efforts to improve the accountability and effectiveness of Federal Programs.

 

       d.        Chief Financial Officers (CFO) Act of 1990, 31 U.S.C. § 9105 et seq.  This act provides effective financial management practices for the Federal Government and improvement of the Government’s financial management, accounting and internal control systems.

 

       e.        Debt Collection Improvement Act (PL 104-134).  The Debt Collection Improvement Act (DCIA) is an extension of the Debt Collection Act.  The purpose of these Acts is to require proper collection of debts, to authorize the compromise or suspension of some debts, and to authorize the use of certain collection tools that are available in the private sector.  The use of electronic payment and offset methods is required.

 

       f.        Federal Managers' Financial Integrity Act (PL 97-255) 31 U.S.C. §§ 1105, 1106, 1108, 1113, and 3512.  The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 amended the Accounting and Auditing Act of 1950 to require ongoing evaluations and reports of the adequacy of the systems of internal accounting and administrative control of each executive agency.

 

       g.        Improper Payments Information Act (PL 107-300).  Improper Payments Information Act (IPIA) requires agencies to have internal control to prevent and detect erroneous payments.

        h.        Antideficiency Act 31 U.S.C. § 1341 (ADA).  The ADA prohibits:

                        (1)  Making or authorizing expenditure from, or creating or authorizing an obligation under, any appropriation or fund in excess of the amount available in the appropriation or fund unless authorized by law. 31 U.S.C. § 1341(a)(1)(A).

                        (2)  Involving the government in any obligation to pay money before funds have been appropriated for that purpose, unless otherwise allowed by law. 31 U.S.C. § 1341(a)(1)(B).

                        (3)  Accepting voluntary services for the United States, or employing personal services not authorized by law, except in cases of emergency involving the safety of human life or the protection of property. 31 U.S.C. § 1342.

        i.        Federal Financial Management Improvement Act of 1996 (FFMIA).  The purpose of FFMIA is to advance Federal financial management by ensuring that Federal financial management systems provide accurate, reliable, and timely financial management information to the government’s managers.  Compliance with the FFMIA provides the basis for the continuing use of reliable financial management information by program managers, the President, the Congress and the public.  Government agencies must incorporate accounting standards and reporting objectives established for the Federal Government into their financial management systems so that all the assets and liabilities, revenues, and expenditures or expenses, and the full costs of programs and activities of the Federal Government can be consistently and accurately recorded, monitored, and uniformly reported throughout the Federal Government.

 

       j.        Prompt Payment Act 31 U.S.C. Chapter 39.  The Prompt Payment Act requires agencies to pay their bills timely (e.g., within 30 days), to pay interest penalties when payments are made late and to take discounts only when payments are made by the discount date.

 

       k.        Certifying Officers Act, 31 U.S.C. § 3528.  The Certifying Officers Act defined the responsibilities of Disbursing and Certifying Officers.

 

       l.        Contract Disputes Act, 41 U.S.C. §§ 601-613.  The Contract Disputes Act (P.L. 95-563) allows federal government contractors to sue the United States government for monetary damages related to their contractual dealings.  The Act waives the government's sovereign immunity, permitting contractors to sue the government in either an administrative tribunal (a board that hears appeals) or in a court.  The Act establishes the procedures to be used by contractors and contracting officers (those authorized to bind the government in contract) in resolving disputes involving contracts with the Federal government, specifically the Executive Branch.

 

PART 2.  OMB CIRCULAR A-123

2.  Requirement.  OMB Circular No. A-123 defines management's responsibility for internal control in Federal agencies. Federal agencies are subject to numerous legislative and regulatory requirements that promote and support effective internal control. The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 provides the statutory basis for management’s responsibility for and assessment of internal control.  In addition, the CFO Act of 1990 requires agency CFOs to, “develop and maintain an integrated agency accounting and financial management system, including financial reporting and internal controls, which complies with applicable internal control standards.”  The FFMIA and OMB Circular No. A-127, Financial Management Systems also instruct agencies to maintain an integrated financial management system that complies with Federal system requirements, FASAB Statements of Federal Financial Accounting Concepts and Standards, and the United States Government Standard General Ledger (USSGL) at the transaction level (for more information, see Order ADM P 5400.41B, Agency Internal Control Program).

 

3.  General.  In accordance with the OMB Circular A-123, Management’s Responsibility for Internal Control, this chapter establishes general policies to be followed by all Heads of Services and Staff Offices (HSSO), and Regional Administrators.  The policy is to be applied when implementing procedures to control financial transactions related to disbursing activities, such as commitments, obligations, expense accruals, receipts and payments.

 

4.  Stewardship.  The proper stewardship of GSA resources is a fundamental responsibility of GSA managers and staff.  GSA employees must ensure that government resources are used efficiently and effectively to achieve intended program results.  Resources must be used consistently with the GSA’s mission, in compliance with laws and regulations and with minimal potential for waste, fraud, and mismanagement.

 

5.  Management responsibility.  GSA management is responsible for the quality and timeliness of program performance, increasing productivity, controlling costs, mitigating adverse aspects of agency operations, and assuring that programs are managed with integrity and in compliance with applicable laws.  GSA’s Management Control Oversight Council (MCOC) provides the structure within which senior managers provide leadership and policy oversight regarding FMFIA and OMB Circular A-123, Management's Responsibility for Internal Control. See Order ADM P 5400.41B.

     

6.  Internal control.   

        a.  Organization, policies, and procedures are tools to help program and financial managers achieve results and safeguard the integrity of their programs.  The FMFIA establishes specific requirements with regard to management controls.  The GSA Administrator must establish controls that reasonably ensure:

                (1)  obligations and costs comply with applicable laws;

 

               (2)  funds, property and other assets are safeguarded against waste, loss, unauthorized use or misappropriation; and

 

               (3)  revenues and expenditures are properly recorded and accounted for.

        b.   Annually, the GSA Administrator must evaluate and report on the control and financial systems that protect the integrity of GSA programs.   The three objectives of internal control are to ensure:

                (1)  effectiveness and efficiency of operations;

                (2)  reliability of financial reporting; and

                (3)  compliance with applicable laws and regulations.

        c.   GSA managers must carefully consider the appropriate balance between controls and risk in their programs and operations.  Too many controls can result in inefficient and ineffective government.  GSA managers must ensure an appropriate balance between the strength of controls and the relative risk associated with particular programs and operations.  The benefits of controls should outweigh the cost.  Managers should consider both qualitative and quantitative factors when analyzing costs against benefits.

 

7.  Implementation.  Internal control guarantees neither the success of a program, nor the absence of waste, fraud, and mismanagement, but is a means of managing the risk associated with GSA programs and operations.  To ensure controls are appropriate and cost-effective, managers should consider the extent and cost of controls relative to the importance and risk associated with a given program.

 

8.  Standards.

 

       a.   GSA managers shall incorporate basic management controls in the strategies, plans, guidance, and procedures that govern their programs and operations.  Internal control includes processes for planning, organizing, directing, controlling, and reporting on GSA operations (also refer to GSA Order ADM 5440.591).  

 

       b.   GSA management is responsible for developing and maintaining internal control activities that comply with the following standards:

 

               (1)  Control environment;

 

               (2)  Risk assessment;

 

               (3)  Control activities;

 

               (4)  Information and communications; and

 

               (5)  Monitoring.

 

 

Part 3.  OMB Circular a-123, appendix a

9.  OMB Circular A-123, Appendix A - Internal Control over Financial Reporting.  OMB Circular A-123, Appendix A serves to emphasize management’s focus on ensuring that effective internal control over financial reporting is established and maintained throughout the Federal Government.  It provides a methodology for GSA management to assess, document, and report on the internal control over financial reporting.  There are five steps in performing the assessment of the effectiveness of internal control over financial reporting:

 

       a.        Planning;

 

       b.        Evaluation of controls at the entity level;

 

       c.        Evaluation of controls at the process level;

 

       d.        Testing of controls at the transaction level; and

 

       e.        Concluding, reporting and correcting.

 

10.  Implementing OMB Circular A-123, Appendix A.

        a.   Planning.

                (1)  The MCOC Council provides the same oversight and leadership for the Senior Assessment Team (SAT) regarding OMB Circular A-123, Appendix A, Internal Control over Financial Reporting.   

 

               (2)  The SAT is responsible for implementation of OMB Circular A-123, Appendix A.  The SAT provides leadership, oversight, and accountability for GSA’s internal control over financial reporting.  The SAT is under the leadership of the CFO.   

 

               (3)  The Deputy Assistant Inspector General for Finance and Administrative Audits of the GSA Office of Inspector General (OIG) serves as advisor to the SAT and facilitates efficiencies with the financial statement audit and other OIG activities.   

 

       b.   Evaluating controls at the entity level.  GSA conducts regular evaluations of controls at the entity level through its annual assurance statement reporting process.  These evaluations have been developed using the Internal Control Management and Evaluation Tool developed by Government Accountability Office (GAO).   

 

       c.   Evaluating controls at the process level.  GSA will cross-walk key processes to material financial reporting line items using the GAO Financial Audit Manual (FAM).  GSA must document an understanding of key financial reporting processes, identification of key controls and understanding of control design.

 

       d.   Testing controls at the transaction level.  GSA takes a risk-based approach in determining when to test key controls, assess control design and conduct testing.

 

       e.   Concluding, reporting, and correcting.  GSA provides a statement of assurance over the effectiveness of internal control over financial reporting as of June 30 each fiscal year in the GSA annual Performance and Accountability Report (PAR).  Any change of status between June 30 and September 30 is reported as required under A-123, Appendix A.  

Part 4.  OMB Circular a-123, appendix b

11. Improving the management of government charge card programs.  See the GSA order, Guidance on the Use of the Credit Card for Purchases (CFO 4200.1).

 

PART 5.  OMB CIRCULAR A-123, APPENDIX C

12. Requirements for Effective Measurement and Remediation of Improper Payments. See Chapter 6.

 

                       CHAPTER 3.  TREASURY FINANCIAL MANAGEMENT ACTIVITIES

 

 

 

Paragraph                                                                Paragraph

 Titles                                                                       Numbers

 

                                             PART 1.  CERTIFYING OFFICERS

 

Introduction …………………………………………………………………………………….....1

Basic responsibilities …………………………………………………………………………...2

Limited relief from liabilities ……………………………………………………………………3

Automated Payment Systems ………………………………………………………………....4

Pecuniary liability ……………………………………………………………………………….5

Designation procedures ………………………………………………………………………..6

 

                                            PART 2.  CASH MANAGEMENT

 

General …………………………………………………………………………………………..7

Cash management ……………………………………………………………………………..8

Cash management activities …………………………………………………………………..9

Disbursements ………………………………………………………………………………...10

 

       PART 3.  JUDGMENT FUND CLAIMS AND REPORTING LOSS CONTINGENCIES

 

Notification and Federal Employee Antidiscrimination

 and Retaliation (No FEAR) Act Requirements ……………………..…………….……….11

Reporting loss contingencies ………………………………………………………………..12

Definitions and guidelines ……………………………………………………………………13

Responsibilities of the Office of General Counsel …………………………………………14

 

                                           PART 4.  SUSPENSE ACCOUNTS

 

GSA Suspense “F” Accounts ………………………………………………………………..15

 

               PART 5.  NON-TREASURY GENERAL ACCOUNTS (NON-TGA)

 

Non-TGA Accounts …………………………………………………………………………...16

 

CHAPTER 3.  TREASURY FINANCIAL MANAGEMENT ACTIVITIES

                                       

PART 1.  CERTIFYING OFFICERS

 

1.  Introduction.  The Certifying Officer attests to the legality, propriety and correctness of payments.  That person is accountable and liable for those payments if they are illegal, improper or incorrect.  The SSO have fund managers or other designees who approve the payment and attest to the availability of funds.  These approving officials certify invoices and other documents.  The legality, propriety and correctness of each transaction affecting payment is determined by individuals located in the SSO or by an automated system; however, the Certifying Officer is responsible for final verification prior to disbursement.   

 

2.  Basic responsibilities.  It has long been government policy that those individuals who approve payments of Federal funds be held strictly liable for the accuracy and legality of payments made.  By law, Certifying Officers are:

 

       a.        responsible for any errors in certified payments;

 

       b.        responsible for existence and correctness of facts recited in the certified document for payment; and

 

       c.        accountable for any illegal, improper or incorrect payment resulting from any false, inaccurate or misleading certification made by them, as well as for any payment prohibited by law which does not represent a legal obligation under the appropriation or fund involved.  The Certifying Officers Act, 31 U.S.C. § 3528 further defines the responsibilities of Disbursing and Certifying Officers.  It provided that Disbursing Officers shall disburse only on the basis of vouchers certified by a duly authorized Certifying Officer and shall be held responsible accordingly.  The Certifying Officer is responsible for any error in certification, and will be held responsible for the existence and correctness of the facts recited in the certified document for payment.  Certifying officers are accountable for and required to personally reimburse the Government for any illegal or otherwise improper payment made as a result of their certification.  GSA does not require the bonding of Certifying Officers in accordance with PL 92-310.

 

       d.  Under the Certifying Officers Act of June 1, 1942 (31 U.S.C. § 3528), Certifying Officers are not responsible for overpayment of transportation furnished on Government Bill of Lading (GBL) or Transportation Requests when due to improper rates, classification, or failure to make proper deductions under equalization or other agreements.  In other words, when the shipment is covered by a GBL or the particular travel is covered by a transportation request, the officer may not be held responsible for overpayments for transportation except those involving mathematical errors, illegal payments or errors made in paying operations.

 

3.  Relief of accountable officer.  Accountable officers are liable for the repayment of losses of public funds for which they are accountable.  This liability arises automatically, by operation of law, at the time of the physical loss or improper payment.  Under certain circumstances, accountable officers can obtain relief from their personal liability to repay losses.  The term “relief” refers to an administrative decision, made by a government official authorized by law to make such a decision that absolves an accountable officer from liability for a loss.

 

       a.   Physical loss or deficiency.  Relief of an accountable officer from liability for a physical loss or deficiency is authorized only if it is determined that:

 

               (1)     the loss occurred while the officer was performing official duties or that the loss resulted from an act or omission by one of the officer’s subordinates,

 

               (2)     the loss was not the result of fault or negligence on the part of the accountable officer, and

 

               (3)     the loss was not the result of an improper payment.

 

               (4)     examination by statistical sampling of payments not in excess of $3,000 is allowed (GAO Policy and Procedures Manual, Title 7, Ch. 7, pg. 7.7-8).

 

               (5)     authority is given to GSA to compromise claims up to $100,000 and relieve accountable officers responsible for accounts so compromised.

 

       b.   Determination for losses under $3,000.  For losses of less than $3,000, GSA will grant or deny relief based on administrative determinations with respect to standards for relief.  A central control record of such actions should be retained for subsequent review by management or audit personnel.  The $3,000 limitation applies to single incidents or the total of similar incidents which occur about the same time and involve the same accountable officer.

 

       c.   Determination for losses of $3,000 or more.  When GSA believes that relief is appropriate for physical losses of $3,000 or more, GSA must formally request relief from the GAO.  The request must include the required administrative determination made by GSA head or delegated official that relief is appropriate.  The request should be in letter form explaining the facts and stating the question.  The letter must be signed by a Certifying Officer.  Mail the request to:

       

   Assistant Comptroller General

    Accounting and Information Management Divisions

    U.S. Government Accountability Office

    441 G Street. MW

    Washington, DC  20548

 

4.  Automated payment systems.  In automated systems, evidence that the payments are legal and accurate must relate to the system rather than to individual transactions (Principles of Appropriation Law, Vol. II, Chapter 9, D.1.b).  If the Certifying Officer relies on an automated payment system to produce legal and accurate payments, the legal liability remains; however, certain criteria must be met to provide relief.  Specifically, the Comptroller General indicates that Certifying Officers should be provided with information showing the system on which they rely is functioning properly, and reviews should be made at least annually to determine that the automated system is operating effectively and can be relied upon to make accurate and legal payments.  Thus the criteria set forth by the Comptroller General should be used for proper guidance if Certifying Officials are requesting relief under automated payment systems.  Within GSA, Certifying Officers may rely upon the annual Statement on Auditing Standards (SAS) 70 audit report for the accounting system of record.  The Services must annually certify that their business feeder systems are functioning properly and can be relied upon to make accurate and legal payments.   

 

The Certifying Officers Act provides the Certifying Officer the right to request an advance decision from the GAO Comptroller General.  This provides Certifying Officers with a means of protection against the certification of vouchers for payment that may prove to be illegal.  They have the right to apply for and obtain a decision by the Comptroller General on any question of law involved in a payment on any voucher presented to them for certification.  The Comptroller General will also provide opinions as to the validity of an obligation.  In lieu of requesting an advance decision from the GAO, the Certifying Officer may rely on the advice of the Office of General Counsel.  The GAO has held that Certifying Officers who rely on advice from their Agency attorneys will be shielded from personal liability.

 

5.  Pecuniary liability.  The liability of the Certifying Officer or employee must be enforced in the same manner and to the same extent as provided by law with respect to enforcement of the liability of disbursing and other accountable officers.  Unlike a Disbursing Officer or a collector of public monies who is accountable for public monies received by him or her (31 U.S.C. § 3522), a Certifying Officer has no public funds in his or her possession and accordingly, is accountable for and required to make good to the United States only the amount of any illegal, improper or incorrect payment resulting from any false, inaccurate or misleading certification made by him or her, as well as any payment prohibited by law or which did not represent a legal obligation under the appropriation or fund involved.  Until an improper payment based upon an inaccurate certification is made, there is no pecuniary liability.  Although a Certifying Officer is not pecuniarily liable for the amount of a time discount lost for failure to certify a voucher within a time discount period, the certification of a voucher in the full amount when the Government is entitled to take the discount, constitutes a false, inaccurate, or misleading certification under 31 U.S. C. § 3528 and the Certifying Officer is liable for the amount of the discount lost.  The GSA Certifying Officers who perform administrative functions relating to final processing of expenditure vouchers under interagency service and support agreements will not be regarded as Certifying Officers for the purpose of 31 U.S.C. § 3528 liability, to the extent the serviced commission retains certification responsibility with respect to basic vouchers (55 Comp. Gen, 388, 1975).

6.  Designation procedures.

 

       a.   Certifying Officers are designated by the GSA CFO or their designee.  Treasury provides procedures for notifying the Disbursing Center of delegations of authority.  The notification may be made on the FMS Form 2958, Delegation of Authority, or on the GSA’s letterhead.  The CFO has delegated the authority to designate Certifying Officers to the Deputy CFO and to notify Treasury (refer to the Delegation of Authority in Order 5450.1 CFO).     

 

       b.   The TFM, Volume I, Part 4, Chapter 1100 requires the designation of a Certifying Officer to be accompanied by FMS Form 210, Designation for Certifying Officer.  

 

Designation and renewals are coordinated through BC.  Renewal/termination procedure designations for Certifying Officers are valid for a period of two years from the effective date, unless revoked earlier.  Prior to the expiration date, FMS will notify the designating official of the pending expiration.  Renewal may be accomplished via the FMS Form 210 with the Re-designation block checked.  Revocations will be accomplished via the FMS Form 210, checking Section 5, Revocation.

 

 

PART 2.  CASH MANAGEMENT

 

 

7.  General.  This section contains polices for correct and timely payment processing.  By maximizing available cash balances, Treasury avoids unnecessary borrowing.

 

8.  Cash management.  Cash management is designed to get the greatest value from the time value of money collected, disbursed or held.  Effective cash management practices are established to accelerate receipts, control disbursements, reduce idle funds and return surplus cash to Treasury.  Disbursements represent the largest area of cash management to GSA.  GSA maintains a separate and distinct set of written internal procedures covering the subject of cash management.  The procedures will cover GSA activities and operations impacting the flow of funds to and from Government accounts and the balances in such accounts.  A copy of GSA procedures will be furnished to FMS upon request.

 

9.  Cash management activities.

 

       a.    BC is responsible for ensuring that the cash flowing into and out of Treasury’s account is managed efficiently, effectively and securely.  This is accomplished by researching and developing new and innovative cash management tools for the disbursement and collection of Federal funds, overseeing the banking services FMS establishes for Federal agencies and determining Federal cash management policy.  Continuous management and control of cash is required by OMB Circular A-11 Section 150.3 and Circular A-123 along with the Budget Administration Manual CFO P 4251.4A and the GSA System for the Administrative Control of Funds ADM 4200.2B.  These guides provide the basis for determining any ADA violations.   

 

       b.    Cash balances are reported and tracked externally by Treasury Account Symbol (TAS).  Notification of any concerns related to the fund’s ability to sustain cash for a complete cycle or anomalies that could possibly jeopardize the cash balance are to be immediately communicated to the individual Controller’s office, the Office of the Chief Financial Officer (OCFO) and BC.  All communications can be initiated orally but should be confirmed in writing at the earliest opportunity.  These communications will result in a coordinated and comprehensive action plan to correct any deficiencies if required.

       c.    GSA currently reports to Treasury by TAS on a monthly basis and is subject to funds control and the ADA.  Fund management may be performed within SSO at a lower level than Treasury reporting requirements and these reporting requirements are not a limit for administrative control of funds.  There is no requirement to adjust amounts between funds within the same TAS at month-end.  Worksheet adjustments are used when there are valid differences with the trial balance and the amounts reported to Treasury.

 

       d.    Payments will be held when a Certifying Officer believes that release of any amounts would result in a cash deficient position.  BC will develop an action plan to mitigate any problem in consultation with the SSO.   

 

       e.    When holding payments is necessary, these general guidelines are to be followed.  Payroll and any small business enterprise payments are given the highest priority for disbursement.  The vendor or affected party must be notified of the situation and reassured that the obligation will be paid along with any applicable interest.  The ultimate responsibility rests with the Certifying Officer to ensure that the cash balance for any TAS is not in a negative (credit) position. The Certifying Officer is responsible for approving payments of Federal funds, and is held personally responsible for the accuracy and legality of payments made.  By law, Certifying Officers are responsible for any errors, existence and correctness of facts recited in the certified document for payments.

 

10. Disbursements.  The principal objectives of control over disbursements are to ensure they are legal, proper, accurately recorded and timely reported.  Expenditures of funds must be made for the purposes Congress intended when it passed the authorizing act and must be used for procuring those goods and services needed to achieve the mission or goals.  Every effort must be made to ensure timely payment of proper invoices and the taking of economically advantageous discounts.  Payments must not be made on invoices before receiving the related goods or services, except when specifically provided by contract or other agreement executed according to law (31 U.S.C. § 3324).

 

PART 3.  JUDGMENT FUND CLAIMS AND REPORTING LOSS CONTINGENCIES

 

11.  The Notification and Federal Employee Antidiscrimination and Retaliation (No FEAR) Act requirements.  The No FEAR Act of 2002, PL 107-174 requires GSA to reimburse the Judgment Fund for payment made to employees, former employees or applicants for Federal employment because of actual or alleged violation of Federal discrimination laws.  GSA is not authorized to make direct payments to these individuals.  The Judgment Fund will continue to make these payments.  The Judgment Fund is administered by Treasury, FMS.  Upon receiving notification from FMS that a payment has been made, GSA has 45 days in which to repay the Judgment Fund or make a commitment for future repayment.   

 

12. Reporting loss contingencies.  In December 1998, FASAB issued Standard No. 12, entitled “Recognition of Contingent Liabilities Arising from Litigation:  An Amendment of Statement of Federal Financial Accounting Standards (SFFAS) No. 5, Accounting for Liabilities of the Federal Government”.  This standard provides an exception to the contingent liability standard for recognizing loss contingencies on matters of pending or threatened litigation and unasserted claims.  For loss contingencies covered by the exception, a contingent liability would be recognized when a future outflow or other sacrifice of resources is “likely to occur,” a past event or exchange transaction has occurred, and the future outflow or sacrifice of resources is measurable.  Examples of loss contingencies:

 

       a.   Pending or threatened litigation.

 

       b.   Possible claims and assessments.

 

13. Definitions and guidelines.

 

       a.    Loss contingencies - losses associated with existing conditions, situations or a set of circumstances involving uncertainty as to a possible loss to GSA that will ultimately be resolved when one or more future events occur or fail to occur.  When loss contingencies exist, the likelihood that the future event or events will confirm the loss or incurrence of a liability can fall within the ranges of probable, reasonably possible, or remote.  The accounting treatment depends on the range of likelihood.

 

               (1)  Probable - refers to future confirming event(s) that are more likely to occur, with the exception of pending or threatened and unasserted claims.  For pending or threatened litigation and unasserted claims, the future confirming event(s) are likely to occur.  When it is probable that a loss will be incurred, the loss should be accrued, but only if the future outflow or sacrifice of resources is measurable.

 

               (2)  Reasonably possible - refers to future event(s) that are more than remote, but less than probable.  When a loss is reasonably possible, no accrual should be recorded; however, it should be disclosed in the footnotes to the financial statements.  The disclosure should include the nature and status of the contingency as well as an estimated amount or range of the possible loss.  If an estimate cannot be made, provide a statement to that effect.

 

               (3)  Remote - refers to future event(s) that have a slight chance of occurring.  Disclosure is not required when the loss falls within the remote range.

 

       b.   Non-reimbursable judgment fund claim - claims where the Treasury Judgment Fund is determined to be the appropriate source for payment and GSA does not have to reimburse the fund.  These claims are different from claims where settlements may initially be paid from the Treasury Judgment Fund but requires GSA to reimburse the Fund at a later date (such as Contract Dispute Act claims).

 

14.  Responsibilities of the Office of General Counsel.

 

       a.   Provide reports of the GSA’s loss contingencies to the appropriate SSO by the first week of the last month of the fiscal quarter.  The following must be reported:

 

               (1)  Region;

 

               (2)  Case name and docket number(s);

 

               (3)  Total amount of the claim(s);

 

               (4)  Estimated amount of the Government’s “probable” or “reasonably possible” loss;

 

               (5)  Current status of the claim;

 

               (6)  Full accounting citation if known (citation includes fund, organization code, budget activity, function code, object class, cost element, project number, and building number) or the contracting officer (or appropriate contact) name and phone number; and

 

               (7)  Nature of the claim(s).

 

       b.   Identify each case that has been or will likely be paid out of the Treasury Judgment Fund.  If the claimant is awarded money (either by settlement or board/court decision), then indicate whether GSA is required to reimburse the Judgment Fund.  All No FEAR Act claims will be paid from and reimbursed to the Judgment Fund.

 

       c.   Provide updated status reports of all loss contingencies that existed as of September 30 in accordance with the audit requirements for the fiscal year.  These requirements will be provided in a separate memorandum.

 

       d.   Schedule meetings with the appropriate SSO or designated representatives and BC within 10 days from issuance of the reports referenced in 13.a and within 2 days from the date referenced in 13.c to resolve any discrepancies.

 

Meet with the auditors during the annual reporting period and provide them with information on contingencies.

 

PART 4.  SUSPENSE ACCOUNTS

 

15. GSA Suspense “F” accounts.  FMS Bulletin 2007-07 discontinued the use of suspense accounts.  Under the provision of the Treasury bulletin, GSA’s CFO must annually certify that balances in GSA suspense accounts are no more than 60 days old, with clear explanations of any exceptions.  The SSO must ensure that balances in these accounts do not exceed 60 days.  GSA’s waiver from Treasury allows the use of the following 5 suspense accounts only for the activities described below:

 

       a.    TAS F3845 – Fund 204x (Proceeds of Sale, Personal Property) - Personal Property Disposal – this account should only be used to hold proceeds from GSA’s sale of personal property.  These receipts should only be held in 204x account temporarily until proper distribution of funds can be determined.

 

       b.    TAS F3840 – Fund 201x (Proceeds of Sale, Real Property) - Real Property Proceeds - this account should only be used to hold proceeds from GSA’s sale of real property.  All real property receipts should be moved to 201x account once it is evident that they will be retained by the Federal Government.  Receipts may only be held in 201x account temporarily until proper distribution of funds can be determined.  In order to ensure that funds are only held in 201x account temporarily:

 

               (1)  Public Buildings Service (PBS) Property Disposal must consider the temporary nature of this account in all of its Memorandum of Understanding (MOU) with customer agencies (including relocation MOUs).  PBS must plan the flow of funds through these accounts, ensure that the MOU includes the customer’s line of accounting, and ensure that a process is in place to prevent GSA from holding funds in suspense for extended periods (generally “extended periods” would mean longer than six months).  PBS must work with BC at the early stages of writing unique relocation MOUs or special legislation to ensure that BC has the accounts and authority needed to accomplish the agreement in compliance with CFO policy and Treasury regulations regarding the use of suspense accounts.

 

               (2)  BC will prepare a monthly status report of all real property activity.  The PBS Office of Budget and Financial Management must on a quarterly basis confirm to BC in writing that this report is updated, has accurate project status information, and that the amounts in these accounts are being held in accordance with policy.

 

       c.    TAS F3842 – Fund 202x (Broker Rebates) - Broker Rebates - this account should only be used to hold the rebates GSA earns from real estate brokers.  These receipts should be held in the 202x account temporarily until proper distribution of funds can be determined.  BC will prepare a monthly status report of all broker rebate activity.  On a quarterly basis, The PBS Office of Budget and Financial Management must confirm in writing to BC any obligation that has no activity in six months that is still valid.   

 

       d.  TAS F3875 – Fund 206x (Budget Clearing Account – Non-Federal Sources) - Last Minute Collections – GSA may use 206x account to record receipts from Non-Federal sources only when complete fund information is not available at the time of collection.  These unidentified collections may not be held in 206x account for more than 60 days.

 

       e.  TAS F3885 – Fund 208x (Budget Clearing Account - Federal Sources) - Last Minute Collections – GSA may use 208x account to record receipts from Federal sources only when complete fund information is not available at the time of collection.  These unidentified collections may not be held in 208x account for more than 60 days.

 

       f.  Last Minute Intragovernmental Payment and Collection (IPAC) Payments – If an agency pulls funds from GSA through IPAC, and the fund in which the payment belongs cannot be identified, Financial Services Divisions may record the transaction in 208x account.  All IPAC payments must be moved out of 208x account before month-end by identifying the correct account or rejecting the IPAC.   

 

PART 5.  NON-TREASURY GENERAL ACCOUNT

 

16. Non-Treasury general account (TGA).  Non-TGA accounts constitute cash held outside of the Treasury that is under the custodial responsibility of Federal Government agencies and/or their employees, officers, or agents.  Pursuant to 31 U.S.C. §3302, an agency must have specific legislative authority to hold funds in a non-TGA.  There are no legislative or statutory authorities granting GSA permission to establish any non-TGA account.  Examples of non-TGA accounts include escrow accounts holding Government money, or retained conference registration fees.

 

                                       CHAPTER 4.  GENERAL PAYMENT INFORMATION

 

Paragraph                                                               Paragraph

 Titles                                                                  Numbers

 

                                               PART 1.  PROMPT PAY

 

General …………………………………………………………………………………………..1

Proper invoice …………………………………………………………………………………..2

Calculation of late payment interest penalties (5 CFR Part 1315.10) ……………………...3

Payment of Government purchase charge card invoices ……………………………..…….4

Receiving report ………………………………………………………………………………...5

Payment documentation and process ………………………………………………………..6

Acceptance ……………………………………………………………………………………...7

Material inspection and receiving reports ……………………………………………………8

 

 

               PART 2.  THE DEBT COLLECTION IMPROVEMENT ACT (EFT Requirements)

 

General …………………………………………………………………………………………..9

Requirements ………………………………………………………………………………….10

 

                               PART 3.  PAYMENT TYPES AND OTHER INFORMATION

 

Micro purchase payments ($3,000 or less) ………………………………………………...11

Direct pay ………………………………………………………………………………………12

Credit card payments …………………………………………………………………………13

Advance payments ……………………………………………………………………………14

Accelerated payments ………………………………………………………………………..15

Fast payments …………………………………………………………………………………16

Utility payments ……………………………………………………………………………….17

Manual payments ……………………………………………………………………………..18

Taxes …………………………………………………………………………………………...19

Freight charges ………………………………………………………………………………..20

Administrative differences ……………………………………………………………………21

Expired and closed appropriation balances ………………………………………………..22

Inter-agency and intra-agency transactions ………………………………………………..23

Reviewing the specially designated nationals and blocked persons list ………………..24

 

                                           PART 4.  SUBMISSION OF INVOICES

 

Invoice submission ……………………………………………………………………………25

 

                                PART 5.  SUBMISSION OF RECEIVING REPORTS

 

General …………………………………………………………………………………………26

Reviewing the receiving report ………………………………………………………………27

 

                                 PART 6.  ASSIGNMENT OF CLAIMS ACT OF 1940

 

Assignment of claims …………………………………………………………………………28

 

                               PART 7.  CENTRAL CONTRACT REGISTRATION (CCR)                                                                                          

 

General …………………………………………………………………………………………29

Exceptions to the CCR registration requirement …………………………………………..30

Procedures …………………………………………………………………………………….31

 

                               PART 8.  MISCELLANEOUS PAYMENT INFORMATION

 

Vendor self service ……………………………………………………………………………32

Accounting system vendor files ……………………………………………………………..33

Limited payability ……………………………………………………………………………...34

GSA payments to Office of Personnel Management for security clearances …………..35

 

 

CHAPTER 4.  GENERAL PAYMENT INFORMATION

 

PART 1.  PROMPT PAY

 

1.  General.

 

       a.   The Prompt Payment final rule (5 CFR Part 1315) requires executive departments and agencies to pay commercial obligations within certain time periods and to pay interest penalties when payments are late.   

 

       b.   The Renegotiation Board Rate, established for interest payments under the Contract Disputes Act of 1978, is used to calculate interest on overdue Federal Government payments under the Prompt Payment Act, as amended.  Interest is computed from the day after the due date through the date payment is made at the rate in effect on the day payment becomes overdue (see Treasury for Prompt Payment Interest Rate).  Interest remaining unpaid for any 30-day period will be added to the principal, and interest thereafter will accrue monthly on the total of principal and previously accrued interest.  This rate is also used to calculate interest when a contract dispute is settled in favor of, or against, the Federal Government.

 

       c.   The Renegotiation Board Rate is based on private commercial rates of interest for new loans maturing in approximately five years.  The rate is determined every 6 months, applicable for the periods beginning January 1 and July 1, and is published in the Federal Register about the first of January and July each year.   The Office of Financial Management Systems (BD) is responsible for entering new interest rates in the OCFO accounting system.

 

2.  Proper invoice.  The Prompt Payment rule reflects the requirements of the Debt Collection Improvement Act (DCIA), which requires most Federal payments, with the exception of tax refunds, be made by electronic funds transfer (EFT).  Interest penalties do not apply if the vendor has failed to submit this information.  The proper invoice should include name and address of the contractor, invoice date and number, contract and accounting system document number (PDN), description, shipping and payment terms, contact information, taxpayer identification number (TIN), price, and quantity of property and/or services actually delivered.  If invoices are not proper, return to vendor within 7 days of receipt.  In general, the due date for making an invoice payment is the 30th day after the designated billing office receives a proper invoice from the contractor or the 30th day after Government acceptance of supplies or services whichever is later.  Refer to the Federal Acquisition Regulations (FAR) Subpart 32.904 to determine the proper due dates.  Vendors should not provide social security numbers or banking information on invoices to GSA.  For non-CCR vendors, the Financial Services Divisions will collect EFT information by Automated Clearing House (ACH) Form SF-3881.  If a TIN or a social security number is required for payment, it will be collected by completion of IRS Form W-9.

 

3.  Calculation of late payment interest penalties (5 CFR Part 1315.10).

 

       a.    Prompt payment interest is calculated from the day after payment is due until the day payment is made. The interest rate in effect on the day after the payment due date is used to calculate the interest penalty.  The payment calculator may be found at http://www.fms.treas.gov/prompt/ppinterest.html.

        b.    The formula to calculate Simple Daily Interest is:   P(r/360*d)

 

                 (1)  P is the amount of principal or amount of invoice;

 

                 (2)  r  equals the Prompt Payment Interest Rate; and

 

                 (3)  d  equals the number of days for which interest is being calculated.

        c.     The formula to calculate Monthly Compounding Interest is:

                 (1)  P(1+r/12)n * (1+(r/360*d)) – P

 

                       (a)  P is the amount of principal or amount of invoice;

 

                       (b)  r equals the Prompt Payment Interest Rate;

 

                       (c)  n equals the number of months; and

 

                       (d)  d equals the number of days for which interest is being calculated.

 

               (2)  The first part of the equation calculates compounded monthly interest.  The second part of the equation calculates simple interest on any additional days beyond a monthly increment.

 

               (3)  For example, if the amount owed is $1,500, the payment due date is April 1, GSA does not pay until June 15 and the applicable interest rate is six percent, interest is calculated as follows:

 

                                                       $1,500(1+.06/12) 2 * (1+(0.06/360*15))-$1,500 = $18.83

 

4.  Payment of Government purchase charge card invoices.  The Prompt Payment rule provides guidance to Federal agencies on when to make payments for the Government-wide commercial purchase card. The rule instructs GSA to determine charge card payment dates based on an analysis of the total costs and total benefits to the Federal Government as a whole.  When calculating cost and benefits, GSA is expected to include the cost to the Government of paying early.  This includes the interest the Government would have earned, at the Current Value of Funds rate, for each day that payment was not made.

 

5.  Receiving report.  A receiving report is the written evidence that indicates Government acceptance of supplies delivered or services performed.  In Global Supplies, receiving reports are not required.  Items are considered received when shipped.

 

6.  Payment documentation and process.  All invoice payments, with the exception of utility, global supplies and interim payments on cost-reimbursement contracts for services, must be supported by a receiving report or other Government documentation authorizing payment (government certified voucher).  The GSA receiving official should forward the receiving report or other Government documentation to the designated payment office by the fifth working day after Government acceptance or approval, unless other arrangements have been made.  This period of time does not extend the due dates prescribed in this section.  Acceptance should be completed as expeditiously as possible.   

 

7.  Acceptance.   Acceptance constitutes acknowledgement that the supplies or services are in conformity with applicable contract quality and quantity requirements, except as provided in this subpart and subject to other terms and conditions of the contract.  Acceptance may take place before delivery, at the time of delivery or after delivery depending on the provisions of the terms and conditions of the contract.  Supplies or services shall ordinarily not be accepted before completion of Government contract quality assurance actions.  Acceptance shall ordinarily be evidenced by execution of an acceptance certification on an inspection, receiving report or commercial shipping document/packing list.

 

8.  Material inspection and receiving reports.  SSO shall prescribe procedures and instructions for the use, preparation and distribution of material inspection, receiving reports and commercial shipping document/packing lists to evidence Government inspection and acceptance.

 

 

PART 2.  THE DEBT COLLECTION IMPROVEMENT ACT (EFT Requirements)

9.  General.  Use of EFT saves money, reduces paperwork and improves cash management.  On average, it costs GSA 8 cents to process an EFT payment and 83 cents to process a check.  Payment by EFT represents considerable cost-savings to GSA.

 

10. Requirements.  Government regulations and initiatives have been implemented to require GSA to make payments by EFT.  They include:     

 

       a.    The Debt Collection Improvement Act of 1996 - Requires most Government payments be made by EFT after January 1, 1999.  Contracting Officers (CO) must routinely include the required EFT payment clause in all non-FAR  based contracts, unless a waiver is appropriate and approved under the conditions outlined in 31 CFR 208.4.  Including EFT provisions in contracts ensures that GSA is in full compliance with applicable Federal laws and regulations and also serves to assist GSA in meeting its performance goals.

 

       b.    Central Contractor Registration (CCR) - FAR-based contractors must be registered in the CCR in order to make payments by EFT.

 

       c.    Metric Tracking System - Governmentwide metrics developed by the Chief Financial Officer’s Council to measure the percentage of EFT payments made to vendors.   

 

 

PART 3.  PAYMENT TYPES AND OTHER INFORMATION

11. Micro purchase payments ($3,000 or less).

 

       a.    Charge card is the preferred method of payment for micro purchases.  Micro procurements, purchases made without issuing a procurement document, may be made for purchases of supplies or services, other than construction, of $3,000 or less and for construction subject to Davis-Bacon Act of $2,000 or less, or for construction subject to Service Contract Act of $2,500 or less.  In cases where a charge card is not used, after receipt of a valid invoice, the CO will record the invoice in the accounting system and route the invoice to the appropriate approving official.  Once approved, the invoice will be scheduled for disbursement in the next accounting cycle.

 

       b.    For micro purchases for construction, supplies or services where the vendor requires a written order, the invoices are submitted to either the Financial and Payroll Services Division (BCE) or the Financial Services Division (BCF).  Certification of receipt and acceptance must be accomplished by recording receipt in the accounting system.  The recording of receipt does not apply to orders placed through the General Supply Fund (FSS-19 orders) or those that anticipate periodic billing.

 

       c.    Cardholder must obtain a warrant to make any payment for purchases over the $3,000 micro purchase limit and is subject to FAR Part 13 requirements.  To obtain a warrant, the cardholder must complete the Simplified Acquisition Training and be appointed by the Head of the Contracting Authority (HCA).

 

       d.    Warranted CO with a single purchase limit of up to $100,000 is not required to obtain another warrant because the contracting warrant takes its place.

 

12. Direct pay (limit of $100,000).  The procuring official must inform the vendor of the requirements for a proper invoice and the payment terms.  When the procuring official receives the invoice, the invoice must be date stamped or manually annotated with the date the invoice was received by the SSO.  The invoice is also annotated with the date of receipt and acceptance of the goods or services indicated.  These dates determine the payment start date for Prompt Payment Act purposes.  The invoice will be retained by the procuring official for 6 years and 3 months and will be available for audit.  Direct pay invoices over $3,000 require the Financial Services Division’s approval.

 

13. Credit card payments.  GSA earns a productivity refund on its charge card payments.  The productivity refund is based upon GSA’s timeliness of payment and delinquency rate.  This refund is calculated based upon a file turn which is the sum of daily balances divided by the sum of daily sales.  The lower the file turn, the higher the refunds that GSA earns.  The productivity refund reduces the costs to the contractor of maintaining the account, thereby allowing a portion of that savings to be returned to GSA.  Refer to CFO 4200.1 for guidance on proper use of GSA purchase cards.

 

14. Advance payments.

 

       a.    OMB Circular A-11, Part 4, Instructions on Budget Execution, defines advance payments as money prepaid pursuant to a statutory authorization in contemplation of the later receipt of goods, services, or other assets.  Generally, advance payments are prohibited by 31 U.S.C. § 3324.

 

       b.    Prohibiting advance payments prevents loss to the Government from contractors who receive payment, fail to perform according to contract terms, and refuse or fail to refund the money advanced.  Advance payments are allowed in certain situations as follows:

 

               (1)  Advance payments to state or local governments when they furnish non-commercial services that are reasonably available only from them.  When a state or local government provides services that are readily available in the commercial market, advance payments are prohibited;

 

               (2)  In 41 U.S.C. § 255, as implemented by the FAR and General Services Administration Acquisition Manual (GSAM) 532.4, GSA is granted the authority to make advance payment on public contracts under the following conditions:

 

                       (a)  A finding and determination is submitted by the CO for approval by the HCA.  The Deputy Associate Administrator for Acquisition Policy, Service Commissioners and Regional Commissioners (RC) are designated the HCA.  The Associate Administrator for Acquisition Policy serves as the HCA for Central Office contracting activities outside of the Services.  The finding and determination must be prepared in cooperation with legal counsel and the Credit and Financial Services Divisions;

 

                       (b)  An interest rate is established (obtained from BC) to be charged on the unliquidated balance of any advance payment.

 

                       (c)  The advance does not exceed the unpaid contract price;

 

                       (d)  There is adequate security.  The security may be in the form of a Government lien on the property contracted for, the balance of the account in which the payments are deposited, or any property acquired for performance of the contract, as long as agreed upon by both parties.  The Government lien takes precedence over any other form of security;

 

                       (e)  There is a contract clause (FAR 52.232-12) providing for advance payments.

 

               (3)  GSA makes advance payment for publications printed or recorded for GSA use.  An invoice is required before payment can be made.

 

               (4)  Advance payments for renting post office boxes from the U.S. Postal Service.

 

               (5)  Advance payments for training from non-governmental sources (5 U.S.C. § 4109).

 

               (6)  Other advance payments authorized by law:   

 

                       (a)  Rent;

 

                       (b)  Tuition;

 

                       (c)  Insurance premiums;

 

                       (d)  Expenses of investigations in foreign countries;

 

                       (e)  Extension or connection of public utilities for Government buildings or installations;

 

                       (f)  Subscriptions to publications;

 

                       (g)  Purchases of supplies or services in foreign countries, if:

 

                               (i)  The purchase price does not exceed $10,000 (or equivalent amount of the applicable foreign country); and

 

                               (ii)  The advance payment is required by the laws or Government regulations of the foreign country concerned.

 

15. Accelerated payments.

 

       a.  Under the provisions of FAR 32.903 and 5 CFR § 1315.5, accelerated payments made earlier than seven days prior to the due date are allowed as long as proper documents such as contract, invoice, and receipt/acceptance documents are matched before payment is authorized, except where statutory authority prescribes and where stipulated in contract (e.g., Governmentwide commercial purchase card) or in General Supplies and Services where receiving reports are not required.  Accelerated payments are permitted for the following situations:

 

               (1)  Single invoices under $3,000;

 

               (2)  Small business;

 

               (3)  Emergency payments; and

 

               (4)  Interim payments under cost reimbursable contracts for non-commercial services.

 

       b.  In compliance with 41 CFR 102-118 and the Transportation Act of 1940, as amended (31 U.S.C. § 3726), the Transportation Audit Payment System (TAPS) has been authorized to begin paying transportation invoices upon presentation.  TAPS invoices received from the Transportation Management Services Solution (TMSS) system are paid within 5 days of receipt.

 

16. Fast payment.  Per GSAM 513.4, GSA contracting activities are not authorized to use fast payment procedures.

 

17. Utility payments.

 

       a.   Regulated Service - A regulated service is between GSA and the utility provider and is subject to tariff law.  Tariff law is a public document that details utility service rates, late fees and other conditions and is filed with a state regulatory body by all regulated utility companies.

 

               (1)  Tariff regulated service providers submit invoices in accordance with tariff provisions and not in accordance with the FAR.  Bills are to be paid by the due date as presented and any disputes and/or adjustments may be resolved after payment is made.  See FAR 41.201 for policy information governing the acquisition of utility services and its relationship to tariff law.

 

               (2)  Documents required by the Financial Services Divisions:

 

                       (a)  Process and mark all GSA Order for Supplies or Services Form.

 

                       (b)  Authorization Exhibits must be completed and attached for task orders under GSA area-wide contracts.

 

                       (c)  Attach a copy of the regulated utility’s applicable rate schedule if the task order’s line items do not fully detail each pricing element to be used in the calculation of invoices.

 

                       (d)  Completed GSA Order for Supplies or Services Form, Order for Supplies and Services, must be provided once at the beginning of the obligation term for a period not to exceed 10 years (modification must be done each year to exercise incremental funding for the new fiscal year).  Provide electronic banking information as well as the TIN in the Employer Identification Number section (block 9A) of GSA Order for Supplies or Services Form.

 

                       (e)  In accordance with the FAR, other contract forms may be appropriate when processing actions with regulated utilities not covered by a GSA area-wide contract.

 

                       (f)  Forward all SF-30 contract modifications immediately.

        b.   Non-regulated service - Non-regulated energy supply contracts are competitively negotiated by GSA with a utility broker or supplier to cover the energy supply needs of Federal agencies.  These types of contracts are paid on contract terms and are fully subject to the FAR.

                (1)  Generally, evidence of receipt of goods and services is required before payment is made on an invoice; however, a GAO decision (68 Comp. Gen. 618) allows GSA to make utility payments prior to evidence of receipt and acceptance of services in accordance with the fast pay procedures and statistical sampling techniques prescribed in the modified proposal.  As a condition of the fast pay procedures, GSA is required to conduct monthly statistical samplings of paid utility invoices to monitor the effectiveness of its payment process.  Contracting action is required to adjust contract amounts when significant variations in usage exist.

 

               (2)  Documents required by the Financial Services Division (BCF):   

 

                       (a)  Standard Form 1449 Solicitation/Contract/Order for Commercial Items, and contract pricing sheet; and

 

                       (b)  GSA Order For Supplies or Services Form covering the term of the supply contract should be provided, which includes a Data Universal Numbering System (DUNS) number for CCR compliance.   

 

       c.   GSA audits all invoices that fall outside a 15 percent tolerance of the accrual process.  Further, GSA also performs a monthly random sample audit of three percent of the remaining paid invoices.  GSA will monitor the effectiveness of the sample size on an annual basis to determine if adjustments are required.   

 

       d.   GSA has established internal controls to effectively monitor errors detected within the post certification sampling process to ensure undetected billing errors are minimized.  The primary control is to audit all bills paid in the past 12 months for an account whose sampled bill is proven erroneous.   Additionally, the vendor number of the utility company, along with the amount and type of error, will be kept on file for five years for annual review by GSA's Accounts Payable group to ensure no pattern of abuse is being established.  If a vendor has established a pattern of abuse, all payments to that vendor will receive verification and where appropriate, the vendor will be referred for suspension or debarment.   

 

18. Manual payments.

 

       a.   Manual payments can only be made under exceptional circumstances such as to avoid large amount of interest, accommodate service request to expedite payment in meeting scheduled court date, etc.  Manual payments are made primarily to expedite payments to vendors; however, they are less efficient and more costly and should be avoided when possible.   

 

       b.    All manual payment requests must be accompanied by a justification and an approval by HSSO.  The Financial Services Divisions will approve all requests in writing.  Factors in the approval process include dollar threshold, sensitivity of invoice, nature of payment, interest, etc.  The manual payments are also reviewed and approved by the Certifying Officer.

 

       c.    There are three types of manual payments:

 

               (1)  Foreign.  The OCFO accounting system cannot accommodate payments to foreign banks; therefore, foreign payments are processed manually.  These payments can be processed in foreign currency or U.S. Dollars.  Payments are deposited into the vendor’s bank in 2 days.

 

               (2)  Domestic.  Expedite payments to U.S. banks.  Payments are deposited in the vendor’s bank the following day.

 

               (3)  FedWire transfer.  FedWire transfers must be over $100,000.00 and should only be used when same day payment is required.  Transfer occurs the same day.

 

19. Taxes.

 

       a.   The problems of administering the tax aspect of a contract vary widely.  Tax questions must be resolved by referring to the contract terms and to the tax laws and regulations.  When tax questions arise, the assistance of legal counsel should be requested.

 

       b.  Federal excise taxes.

 

               (1)  Federal excise taxes are levied on the sales or use of particular supplies or services as required by subtitle D of the Internal Revenue Code, 26 U.S.C. § 4041 and 26 CFR 40 through 299.  The most common excise taxes are as follows:

 

                       (a)  Manufacturer’s excise taxes imposed on certain motor vehicle articles such as tires and inner tubes, gasoline, lubricating oils, coal, fishing equipment, firearms, shells and cartridges sold by manufacturers, producers or importers; and

 

                       (b)  Special-fuel excise taxes imposed at the retail level on diesel fuel and special motor fuels.

 

               (2)  The Federal Government may be exempted by law from paying excise taxes.  GSA must take maximum advantage of all available exemptions.  Exemptions include:

 

                       (a)  Supplies for the exclusive use of any state or political subdivision, including the District of Columbia;

 

                       (b)  Shipment of supplies to U.S. possession, Puerto Rico or for export within 6 months after title passes to the Government;

 

                       (c)  Supplies used for further manufacture or resale for further manufacture;

 

                       (d)  Fuel or supplies for use on any vessel of war;

 

                       (e)  Nonprofit organizations; and

 

                       (f)  Emergency vehicles.

 

       c.    State and local taxes.

 

               (1)  Generally, the Federal Government is exempt from state and local taxation. When economically feasible, the Government must take maximum advantage of all exemptions from state and local taxes.  A legal opinion should be obtained when there is doubt concerning tax exemption.  Some examples of the application of state and local taxes to the Federal Government are as follows:

 

                       (a)  The Federal Government is exempt from state and local property and use taxes when the legal incidence of the tax is on the buyer and the buyer is the United States, or when state and local law exempts sales to the United States from taxation;

 

                       (b)  Personal and real property are exempt from state and local property taxes when title is vested in the Federal Government and the property is both owned and possessed by the Government;

 

                       (c)  Personal local improvement assessments against Federal land, such as paving and repairing streets and sidewalks or installing sewers, is constitutionally prohibited;

 

                       (d)  The Federal Government is obligated to pay state and local taxes if a contract for purchasing goods or services includes the taxes in the offered price; however, the Government is not required to pay any taxes imposed after the contract is signed; and

 

                       (e)  The Federal Government may pay a state or local tax by way of reimbursement to a Federal employee who incurred the tax while performing official duties.

 

               (2)  At times, the Federal Government may be required to produce evidence of exemption from state or local taxes.  Evidence of exemption includes, but is not limited to the following:

 

                       (a)  A copy of the contract or the relevant portion;

 

                       (b)  Copies of purchase orders, shipping documents, credit card imprinted sales slips, paid invoices or similar documents that identify the buyer as an agency of the Federal Government;

 

                       (c)  A state or local form indicating that supplies or services are for the exclusive use of the Government or any other document required for establishing an exemption;

 

                       (d)  Shipping documents indicating that shipments are in interstate or foreign commerce;

 

                       (e)  SF 1094, U.S. Tax Exemption Certificate, is used when the documents normally used in transacting a purchase (a-d above) are not readily available.  The form is not used for:

 

                               (i)  Purchases subject only to Federal taxes;

 

                               (ii)  Purchases for operating or maintaining personal motor vehicles for which mileage is authorized;

 

                               (iii)  Purchases for subsistence if per diem is authorized;

 

                               (iv)  Purchases by employees on official travel that are for official use but are not paid for when purchased; and

 

                               (v)  Purchases on which taxes are $50 or less.

 

                       (f)  If GSA has erroneously paid state or local taxes of more than $50, the taxing authority must be billed for a refund of the taxes.  The tax refund must be credited to the appropriation or fund from which it was paid or, if not readily identified, to the miscellaneous receipt account.   

 

       d.    For questions regarding tax status, please refer to the Office of General Counsel.

 

20. Freight charges.

 

       a.    The preferred method of transporting supplies for the Government is by commercial carrier.  Government-owned, leased or chartered vehicles, aircraft or vessels may be used if they are available, economical and follow all applicable statutes, policies and regulations.  Below are the common terms used when the Government transports supplies by commercial carrier.

 

               (1)  Freight on Board (F.O.B.) Origin means title to the goods passes upon delivery of the shipment to the carrier at point of origin or when the freight is loaded on the carrier stipulated on the appropriate buyer’s routing guide.  Buyer has total responsibility over the goods while in shipment.  Buyer takes ownership (title and control) of the goods at the origin (when the carrier signs for goods) and is responsible for transportation of the goods beyond this point.  Generally, in F.O.B Origin:

 

                       (a)  Inspection and acceptance are provided at the origin point;

 

                       (b)  Acceptance means the Government agrees to ownership.  Payment must be made upon the contractor’s submission of proper invoices and proof of shipment, regardless of whether the supplies have reached their destination.  If no proof of shipment is submitted, then a receiving report must be obtained and those dates used;

 

                       (c)  The purchase order/contract must be reviewed to determine if F.O.B. Origin is authorized; and

 

                       (d)  The transportation charges are normally paid on the Government Bill of Lading (GBL).  A Commercial Bill of Lading (CBL) or other transportation receipt may be used if a GBL is not used.

 

               (2)  F.O.B. Destination means free of charge delivered on board the carrier’s conveyance, to a specified delivery point where the consignee’s facility is located and the supplies are then delivered to the government wharf, warehouse, unloading platform or receiving dock.  The Government is not liable for any delivery, storage, demurrage, accessories or other charges before the delivery of the supplies to the specified destination, unless the Government causes a change in the contract.  Generally in F.O.B. Destination:

 

                       (a)  If a rail carrier is used, the supplies must be delivered to the specified loading platform of the Government;

 

                       (b)  If a motor carrier is used, the supplies must be delivered to the truck tailgate at the specified unloading platform of the Government; and

 

                       (c)  The purchase order/contract must be reviewed to see if it authorizes F.O.B. Destination.

 

                               (i)  The vendor usually includes the cost of freight in the price of the merchandise.

 

                               (ii)  If the vendor submits an invoice that shows a separate charge for freight, the charge is deducted and a GSA Form 533, Administrative Difference Statement, must be sent to the vendor.

 

                               (iii)  F.O.B. Origin prepaid means the same as F.O.B. Origin, except the cost of transportation is prepaid by the contractor to the destination specified in the contract.  To be repaid for transportation, the contractor must submit a CBL or other transportation receipt.

 

               (3)  Freight charges invoiced by vendors in excess of $100 usually require supporting shipping documents unless:

 

                       (a)  The charges relate to a direct pay invoice in which the contracting official and the approving official have authorized payment;

 

                       (b)  The charges relate to a small purchase procurement in which the transportation costs are estimated as a line item in the order.  The invoiced transportation charge can not exceed the estimated cost; or

 

                       (c)  The task, delivery order or contract requires the contractor to maintain records regarding transportation charges and to furnish evidence of payment when requested by the Government.

 

21. Administrative differences.   At times, GSA must pay less than the amount invoiced because goods are damaged in shipment, the total shipment is not received, services are not rendered, the amount billed is different from that in the purchase order/contract, etc.  

 

22. Expired and closed appropriation balances.

 

       a.  Appropriation accounts available for definite periods.  The law, under 31 U.S.C. § 1551-1557, stipulates that on September 30 of the fifth fiscal year after the period of availability for obligations of a fixed appropriation account ends, the account is closed and any remaining balance (whether obligated or unobligated) in the account is cancelled and is no longer available for obligation or expenditure for any purpose.

 

               (1)  After the period of availability for obligation of a fixed appropriation and before the closing of the account, the account must retain its fiscal year identity and remain available for recording, adjusting and liquidating obligations.

 

               (2)  After closing an account, obligations and adjustments to obligations may be charged to any current appropriation account of GSA’s available for the same purpose, not to exceed one percent of the current appropriation.

 

       b.   Appropriation accounts available for indefinite periods.  An appropriation available for an indefinite time period does not require closing; however, it may be closed if:

               (1)  The GSA Administrator concerned or the President determines the purpose for which the appropriation was made has been carried out; and

 

               (2)  No disbursement has been made against the appropriation for two consecutive fiscal years.

 

       c.    When closed, any remaining balances (whether obligated or unobligated) should be canceled and thereafter not be available for obligation or expenditure for any purpose.

 

23. Inter-agency and intra-agency transactions.

 

       a.    GSA may place an order for goods or services within the GSA or with another agency when the following conditions are met:

 

               (1)  Money is available for obligation;

 

               (2)  The order can be fulfilled by the agency providing the goods or services; and

 

               (3)  The goods or services cannot be provided as conveniently or cheaply by a commercial business.

 

       b.   Payments for goods or services between agencies are settled through the Intra-Governmental Payment and Collection (IPAC) system, a system in which Treasury transfers funds from one agency to another.  Undisputed bills should be promptly paid (7 GAO 7.2.C.1.b).  Promptly paid is defined as being paid within 30 days of receipt.

 

       c.   The preferred method of payment for business transactions within GSA is through interfund transfer.  The interfund transfer permits the simultaneous recording of expenditure for the buyer and a collection for the seller.   

 

24.  Reviewing the specially designated nationals and blocked persons list.

 

       a.  Under the provision of Executive Order 13224, “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”, GSA may not engage in transactions with individuals or entities on the Specialty Designated Nationals (SDN) list.  GSA must consult the list before making payments and must not make or certify payments, or draw checks or warrants, payable to an individual or organization listed on the SDN and Blocked Persons list.  This order was created to combat financing of terrorism.

 

       b.   The Department of the Treasury’s Office of Foreign Assets Control (OFAC) frequently updates the SDN and Blocked Persons list.  There is no predetermined timetable; names are added and removed as necessary and appropriate.  The SDN master list, as well as a list of cumulative changes to the SDN, can be found on the OFAC website at http://www.treasury.gov/offices/enforcement/ofac/sdn.    The list contains the full name, address, nationality, passport, tax ID or cedula number (registration status), place of birth, date of birth, former names and aliases of SDN and Blocked Persons.  Individuals and entities on the list have their assets blocked and U.S. entities and individuals are prohibited from engaging in any transactions with them.   

ART 4.  SUBMISSION OF INVOICES

25. Invoice submission.  Invoices are to be submitted directly to Financial Services Divisions for processing payments and disbursements or electronically through the web base Vendor Self Service system.  Submission of invoices directly to the appropriate office allows GSA to process payments timely and ensures compliance with the Prompt Payment Act.  There are a few approved exceptions to the general policy as follows:   

 

       a.    All Direct Pay invoices paid in the accounting system should be received and processed by the SSOs. These invoices should not be forwarded to Finance, but should remain in the originating office for the required period of 6 years and 3 months for audit purposes;

 

       b.    Fleet Cross Servicing Agreements are agreements with other Government agencies (Federal, state, or local) for fleet maintenance and fuel.  Since there is no set usage amount for the agency, the purchase order is not established until the invoice is received.  Invoices are to be submitted to the Fleet Management Center first for approval, accounting information (function code, budget activity, etc.) and completion of an SF 1080.  Once these procedures have been completed, the invoice is forwarded to Financial Services Divisions for payment processing;

 

       c.    Transportation bills, not invoiced through TMSS, are to be sent to GSA’s Transportation Audit contractor for pre-audit in accordance with FAR clause 52.247-67. Submission of Commercial Transportation Bills to the General Services Administration for Audit 47.104-4(c).  The TMSS system performs pre-payment audit;

 

       d.   PBS progress payment invoices related to construction contracts awarded on SF-1442 Solicitation, Offer and Award (Construction, Alteration or Repair) are required to have a pre-invoice conference with PBS officials to review and markup what can be invoiced.  PBS must maintain back-up support documentation to substantiate authorization of the payment.  After review and approval, the invoices are sent to Financial Services Divisions;

 

       e.  The Federal Acquisition Service (FAS) analysts review Telecommunications Ordering & Pricing System (TOPS) invoices to ensure the lines billed are delivered and determine if the invoice is valid or should be rejected.  Analysts must also review late charges on telephone invoices to determine the amount, if any, that should be paid based on local tariffs applicable to the invoice.  After review and approval, FAS sends applicable portions of the invoices to Financial Services Divisions with support in the form of a cover sheet, indicating the amount to be paid.

 

 

PART 5.  SUBMISSION OF RECEIVING REPORTS

 

26. General.  The receiver of goods or services must submit the receiving report in the accounting system in a timely manner and to the proper location. The GSA continues to pay interest penalties resulting from the late payment of invoices.  Public Law 97-177 and its amendment 100-496 (Prompt Pay Act) require agencies to pay their bills timely (e.g., within 30 days), to pay interest penalties when payments are made late and to take discounts only when payments are made by the discount date.  The major cause of delay in payment is either that the receiving report is missing or is not filed timely.

 

27. Reviewing the receiving report.  Only Federal employees are allowed to receive and accept goods and services for the Federal Government.

 

       a.   A receiving report is written or electronic evidence of the receipt and acceptance of goods or services.  Payment cannot be made prior to receiving and accepting the goods/services, even if interest penalties may be accruing or an early payment discount will be lost.  All information on the receiving report should be correct and match the information on the purchase order and invoice.

 

       b.   To determine the payment due date, acceptance of the goods/services must take place within seven days following receipt of goods/services, unless other terms are included in the contract.  If the receiving report has an acceptance date that is in excess of seven days following the receipt of the materials or services and the contract does not specify a longer acceptance period, the acceptance date the Financial Services Divisions must use is the seventh day after the receipt of the goods or services. The receiving official has a responsibility to complete and submit the receiving report in a timely manner that is within that seven day window.

 

       c.   Timely delivery or entry of receiving reports into the proper system is extremely important to make payments on time.  Field offices are responsible for submitting the receiving reports and are required to properly prepare the reports to ensure vendor payments for goods and services are valid, accurate, and timely.  All receiving reports must be entered in the financial system of record or forwarded within five days of acceptance of goods and services.   

 

 

 

PART 6.  ASSIGNMENT OF CLAIMS ACT OF 1940

 

 

28. Assignment of Claims 31 U.S.C. § 3727 and 41 U.S.C. § 15.

 

       a.   A contractor may assign money due or to become due under a contract if all the following conditions are met:

 

               (1)  The contract specifies payments aggregating $1,000 or more;

 

               (2)  The assignment is made to a bank, trust company or other financial institution;

 

               (3)  The contract does not prohibit the assignment;

 

               (4)  Unless otherwise expressly permitted in the contract, the assignment

 

                       (a)  Covers all unpaid amounts payable under the contract;

 

                       (b)  Is made only to one party, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing of the contract; and

 

                       (c)  Is not subject to further assignment.

 

               (5)  The assignee sends a written notice of assignment together with a true copy of the assignment instrument to the:

 

                       (a)  Contracting Officer;

 

                       (b)  Surety on any bond applicable to the contract; and

 

                       (c)  Disbursing Office designated in the contract.

 

       b.    The common definition of a trust company is an organization which acts as a fiduciary, trustee or agent for individuals and businesses in the administration of trust funds, estates and custodial.  An assignee should be treated as a designated agent in the vendor files.  Assignees must register separately in the CCR database according to FAR 52.232-33 (b).

 

PART 7. CENTRAL CONTRACTOR REGISTRATION (CCR)

 

 

29. General.

 

       a.    The FAR requires contractor registration in the CCR database prior to award of any contract, basic agreement, basic ordering agreement or blanket purchase agreement.  The integration of this CCR contractor data to the OCFO accounting system is the Central Contractor Registration Connector (CCRC).  The CCRC will serve as an automated interface tool by which OCFO accounting system receives contractor updates from CCR.

 

       b.    The registration address will be controlled by the database system’s issuance of a Dun & Bradstreet number along with a plus-4 identifier for each contractor location.  The plus-4 identifier will only be required when multiple EFT information is required for one contractor location.

 

       c.    Maintenance and control of contractor information, including correct EFT information, is rested solely with the contractor.  Any conflicts arising out of the Government reliance on CCR data is considered incorrect information within the meaning of the “Suspension of Payment” paragraph of the EFT clause.  This database is to serve as the primary repository for contractor information required when conducting business with the Government.  It will eliminate the need to maintain paper-based sources of contract information by enabling contractors to update their information in one place via a web-based application.  This will allow the CO access to contractor and industry data more efficiently and will identify sources for contracting opportunities.

 

       d.    BD will maintain a repository of CCR data that will be the sole interface for all GSA services and systems.

 

30. Exceptions to the CCR registration requirement.  The FAR policy requiring registration in CCR applies to all types of awards except the following:

 

       a.    Purchases that use a Governmentwide commercial purchase card as both the purchasing and payment mechanism, as opposed to using the purchase card only as a payment method;

 

       b.    Classified contracts when registration in the CCR database, or use of CCR data, could compromise the safeguarding of classified information or national security;

 

       c.    Contracts awarded by:

 

               (1)  Deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(7); or

 

               (2)  Contracting officers in the conduct of emergency operations, such as responses to natural or environmental disasters or national or civil emergencies as defined in Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121);

 

       d.   Contracts to support unusual or compelling needs;

 

       e.   Awards made to foreign vendors for work performed outside the United States, if it is impractical to obtain CCR registration; and

 

       f.    Micro-purchases that do not use the EFT method for payment and are not required to be reported.

 

31. Procedures.

 

       a.    The Contracting Officer will:

 

               (1)  Obtain Vendor’s DUNS plus-4 number;

 

               (2)  Access GSA’s CCR repository to determine if Vendor is registered;

 

               (3)  If registered, retrieve TIN and complete address from GSA’s CCR repository including DUNS plus-4;

 

               (4)  Search accounting system using the TIN and determine if appropriate name, address code exists in the accounting system matching GSA’s CCR repository;

 

               (5)  If complete match is found, no further action is required; and

 

               (6)  If no match is found, the CO will request vendor to amend offer so that it matches exactly the CCR record.

 

       b.   The Financial Services Divisions will:

 

               (1)  Notify CO of any novations, name changes or assignments taking place through CCRC updates.

 

               (2)  Suspend payment if CO determines that the contractor has made any improper novations, name changes or assignments.

 

 

 

PART 8.  MISCELLANEOUS PAYMENT INFORMATION

 

 

32. Vendor self service (VSS).

 

       a.   VSS is a web-based application that allows vendors to create and process their invoices electronically (paperless) and track the status of payments made by GSA.  The VSS electronic invoicing module:

 

               (1)  Allows GSA’s vendors to submit electronic invoices, track the status of submitted invoices and the status of payments generated from those invoices;

 

               (2)  Eliminates the need for vendors to submit paper invoices.  Paper invoices will not be required and the SSO will need to rely on the electronic invoice documents in the accounting system;

 

               (3)  Relies on existing accounting subsystems including Purchasing, Accounts Payables, Automated Match and Automated Disbursements;

 

               (4)  Date stamps the invoice.  For purposes of Prompt Pay, the invoice date will be the date that VSS accepts the invoice into the system.  If Finance later rejects the invoice, the vendor will be notified in accordance with Prompt Pay Regulations;

 

               (5)  Transmits invoices submitted via the VSS website in real-time and stores them as held forms in the accounting system.  There will be an automated method to process the held invoice forms in the accounting system; system rejected forms will be reviewed and processed by the Financial Services Divisions;

 

               (6)  Approves invoices after they are manually reviewed and matched;

 

               (7)  Generates automatic payments and disbursements in the accounting system; and

 

               (8)  Updates the status of the VSS web page in real time as the invoice/payment is updated in the accounting system (e.g., payment is disbursed).

 

       b.  VSS is a voluntary participation program; however, participating vendors must have a valid DUNS/DUNS plus-4 number and must register in the CCR database prior to registering in VSS.  The vendor must ensure that the CCR registration remains active at all times.

 

33. Accounting system vendor files.

 

       a.   All new vendor addresses in the financial accounting system will be established by the Financial Services Divisions.  This process will:

 

               (1)  Enhance internal control over disbursements;

 

               (2)  Avoid assigning different vendors to the same TIN;

 

               (3)  Ensure the correct name and address configuration is entered for 1099 reporting; and

 

               (4)  Ensure disbursements are made to the proper vendor’s bank account.   

 

       b.   A vendor code can be requested by following instructions provided at finance.gsa.gov.  Go to “Quick Links” and choose “Submit New Vendor to OCFO accounting system”.  Complete the form and submit to the appropriate Financial Services Division mailbox.   

 

34. Limited payability.

 

       a.  All checks not presented for payment one year from the date of issuance are canceled by Treasury and the proceeds returned to the GSA for credit to the appropriation or fund account initially charged (TFM Vol. 1, Part 4 §7050.10).  There is a one-year limit for check claims; any claim on account of a Treasury check shall be barred unless it is presented to GSA within one year after the date of issuance of the check (31 U.S.C. §3702 (c)).   

 

       b.   If a vendor presents a claim to GSA for the underlying obligation on a check, GSA must examine its records to see if an earlier claim or cancellation was processed.  GSA must determine if the payee is entitled; and identify the source account from which the funds were originally paid.  GSA may recertify a payment from the appropriation or fund from which the original payment was made (or its successor account [TFM Vol. 1, Part 4 §7025.30]).   

 

       c.   In cases where the liability is valid but the claim is placed after the balance canceled and appropriation account is closed, GSA may use up to one percent of its current appropriation or it may seek a reappropriation.

 

       d.   Vendor’s claim must be filed and received by the official responsible for settling the claim within the one-year limit for check claims.  If GSA determines that the vendor’s claim is valid, the funds will become available for liquidation if the account has not expired or any remaining surplus proceeds are deposited to Treasury as miscellaneous receipts.  GSA must comply with the Codes and Treasury Regulations when handling credits received and or claims filed under limited payability cancellation.

35. GSA payments to the Office of Personnel Management (OPM) for security clearances.

 

       a.   Issuance of OCFO accounting system document numbers.  A limited number of OCFO accounting system document numbers will be issued on an annual basis for GSA security investigation charges.  Specifically:

 

               (1)  PBS will issue 13 document numbers (1 for Property Disposal, 1 for Central Office and 11 for the Regions) and FAS will issue 12 document numbers (1 per Region and 1 for Central Office) to capture annual security investigation charges within their Service; and

 

               (2)  PBS and FAS must submit their annual document numbers to the Financial Services Divisions by October 30 of each new fiscal year.   

 

       b.   Obligated funds available.  Funds are obligated or increased for the fiscal year on a quarterly basis.  To assist in providing information to estimate security investigation costs, both Financial Services Divisions will provide each Service with the actual costs incurred for the first three quarters of the current fiscal year.  The actual cost data will be provided to the Services by September 15.  Note:  At the beginning of each fiscal year during periods of a continuing resolution, funds will be obligated on a monthly basis.  When the budget has been approved, funds will be obligated on a quarterly basis and available at the beginning of the quarter.

 

       c.   PBS and FAS contacts.  PBS and FAS designate a central point of contact to work with the Financial Services Divisions to verify OPM security investigation charges.  Within each Service, regional contacts are established to respond to OPM security investigation charge inquiries related to their region.

 

 

                                               CHAPTER 5.  OBLIGATIONS

 

 

Paragraph                                                           Paragraph

 Titles                                                                     Numbers

 

                                       PART 1.  UNLIQUIDATED OBLIGATIONS

 

Review and certification of unliquidated obligations………………………………………..1

System reconciliation of unliquidated obligations …………………………………………..2

Policy on cancellation and correction of unliquidated obligations …………………………3

        

 

 

 

CHAPTER 5.  OBLIGATIONS

 

PART 1.  UNLIQUIDATED OBLIGATIONS

 

 

 

1.  Review and certification of unliquidated obligations.

 

       a.   Provision of 31 U.S.C. §1501, requires each Federal agency to verify that obligations reported to the Department of the Treasury and OMB agree with supporting agency records (OMB Circular A-11, Section 20 and GAO FAM, Section 300, Internal Control Phase).  GSA requires that each SSO conduct a semi-annual review and certification of unliquidated obligations.

 

       b.   Reviews and certification must be accomplished by January 31 and July 31 of each Fiscal Year (FY) and will be subject to internal control testing conducted under OMB Circular A-123, Appendix A, Internal Control over Financial Reporting.  The review and certification is critical to ensure accountability, integrity and accuracy of our financial reporting at the highest levels of management throughout GSA.

 

       c.   Each RC and SSO Controller or the Assistant Commissioner for Budget and Financial Management will send a written and signed certification to the BC stating the semi-annual review of unliquidated obligations has been performed in accordance with this policy.  Supporting documentation such as: a list of obligations reviewed, action taken, and final determination must be included.  An unliquidated obligation is defined as:

 

               (1)   an undelivered order--obligation unpaid; or

 

               (2)   a delivered order--obligation unpaid

 

       d.    The unliquidated obligations review and certification will be performed as follows.  New undelivered orders initially established within the last 90 days may be excluded from the review.  All other unliquidated obligations will be reviewed under the criteria below:

 

               (1)  FAS - general supplies and services.  The flow through processed through FEDPAY and Customer Supply Center replenishes unliquidated obligations:

 

                       (a)  Unliquidated obligations from the current and prior FY, review 100% of orders over $100,000 and 5% of the number of orders between $5,000 and $100,000;

                       (b)  Unliquidated obligations older than the prior FY, review 100% of orders over $50,000 and 10% of the number of orders between $5,000 and $50,000; and

 

                       (c)  Review 100% of unliquidated obligations over five years old.

 

               (2)  Other unliquidated obligations (including operating expense fund 255, 455, 130 and 142):

 

                       (a)  Review 100% of all unliquidated obligations older than the prior FY (as of the certification due date) with no activity; and

 

                       (b)  Review 100% of the remaining unliquidated obligations that are $2,500 or greater.

 

               (3)  FAS - all other programs

 

                       (a)  Review 100% of unliquidated obligations over five years old;

 

                       (b)  Review 85% of all unliquidated obligations 2 – 5 years old (as of the certification due date) with no activity; and

 

                       (c)  Review 75% of the remaining dollar value of unliquidated obligations.

 

               (4)  PBS - as of the date selected for review of undelivered orders and delivered orders:

 

                       (a)  Review 100% of all unliquidated balances where the last activity is two years old or more;

 

                       (b)  Review 75% of all unliquidated balances where the last activity is between 1 to 2 years;

 

                       (c)  Review 50% of all unliquidated balances where the last activity is between 90 days to 1 year; and

 

                       (d)  Review 25% of all unliquidated balances where the last activity is between 30 to 90 days.  (Note:  The unliquidated balance refers to the dollar amount of the order.)   

 

                       (e)  Review 50% of the remaining dollar value of unliquidated obligations.

 

               (5)  Staff Offices

 

                       (a)  Review 100% of all unliquidated obligations two years or older (as of the certification due date) with no activity; and

 

                       (b)  Review 100% of remaining unliquidated obligations that are $2,500 or greater.

 

       e.   Documentation supporting the review and certification of the unliquidated obligations must be maintained for two years by the RC, SSO CFO/Controller/Assistant Commissioner for Budget and Financial Management and BC.  All unliquidated obligations deemed invalid must be deobligated in accordance with the policy on Cancellation and Correction of Obligations.

 

2.  System reconciliation of unliquidated obligations.  The SSO CFO/Controller/ Assistant Commissioner Office for Budget and Financial Management is responsible for performing an annual reconciliation of their service-owned interfacing business feeder systems with the accounting system.  This review should be conducted as close as possible to the end of the FY to ensure the accuracy of the annual financial statements and other reports.

 

3.  Policy on cancellation and correction of unliquidated obligations.

 

       a.   Responsibility.

 

               (1)  GSA COs have the important responsibility of executing contracts and orders that obligate the Government to pay for goods and services.  They must expend funding prior to expiration, and eliminate potential claims that may be incurred on contracts.  Delays in the contract closeout process can result in the loss of available funds, as appropriations obligated on these physically completed contracts close and are no longer available for use.

 

               (2)  Financial managers have the important responsibility to ensure Government obligations executed by CO are properly recorded in the financial management system.  Obligations recorded in the financial system must be reviewed, adjusted, and/or canceled per instructions from CO as required to ensure accurate, consistent, and timely financial reporting as well as proper business practice.

 

       b.   Contract closeout.

 

               (1)  HCAs are responsible for taking appropriate steps to ensure that completed contracts are formally closed in accordance with the FAR 4.804, and GSAM 504.804-5, and the guidelines provided below for simplified acquisitions and contracts with residual balances.  The closeout actions in FAR 4.804-1(a) (2), (3), and (4) may be modified to reflect the extent of administration that has been performed.

 

               (2)  COs must be vigilant and proactive with respect to proper contract closeout procedures.  COs must not allow completed contracts to remain open.  Failure to conduct timely closeout is a violation of regulatory and statutory requirements, and negatively impacts GSA’s accurate and timely financial reporting.

 

       c.   Contract closeout and unliquidated obligations cancellation guidelines.

 

               (1)  Simplified acquisition

 

                       (a)  Under FAR 4.804-1(a) (1), the CO only needs evidence of receipt of goods and services and final payment to closeout the contract file.  CO shall ensure that the contract award document and the statement of work include the following statement:  “For payment purposes, the contractor shall mark its final invoice for payments as ‘Final Invoice for Payment’.”

 

                       (b)  CO shall instruct contracting officer representatives or project managers receiving supplies and services to forward copies of the receiving report and final invoice to the CO for contract closeout purposes as well as to the financial manager to record receipts in the accounting system for delivered orders.

 

               (2)  Cancellation of unliquidated obligations with residual balances

 

                       (a)  Unliquidated obligation balances (remaining) of $100,000 or less should be canceled if deemed invalid.  SSO fund managers (persons certifying the availability of funds) have the authority and responsibility to cancel balances if deemed invalid.  Only valid obligations should be retained in the financial accounting system.

 

                       (b)  The following procedures should be followed to cancel invalid obligations:

 

                               (i)  SSO fund managers will generate a list of proposed deobligations and present it to the CO and their Director for review and approval.

 

                               (ii)  CO or Director shall respond to the SSO fund manager within 45 days justifying in writing why any obligations on the list should not be canceled.

 

                               (iii)  If the fund manager receives no response from the CO, the fund manager is authorized to take appropriate steps to deobligate the unliquidated obligations in the accounting and business systems.

 

                               (iv)  When a CO approves the cancellation of the unliquidated obligation under items (ii) or (iii) above, the CO shall prepare the appropriate document/action necessary (such as contract modification) for the contract file.

 

                       (c)  These actions by the SSO fund managers shall be considered an internal financial accounting action and shall have no bearing on the Government’s rights and duties under the contracts until the CO officially closes the contract.  A contract file shall not be closed if:

 

                               (i)  The contract is in litigation or under appeal or,

 

                               (ii)  In the case of a termination, all termination actions have not been completed.

 

       d.   Non-contracting officer acquisitions.  For unliquidated obligations created that did not require the signature of a CO (GSAM 501.603-1(f)), the fund manager has the authority to correct or cancel any unliquidated obligations that are deemed invalid.  Examples of such document types include micro-purchases using the Governmentwide commercial purchase card, internal GSA orders and security clearances (e.g., IX, IY, GX).  The fund managers should follow the financial system procedures below for cancellation and should inform the originator of the unliquidated obligation of the cancellation.

 

       e.   Financial system procedures for cancellation of unliquidated obligations.  The fund manager will ensure the cancellation or amendment of unliquidated obligations proceeds as follows:

 

               (1)  Business Feeder System (Interface).  Some business lines have their own acquisition systems which send acquisition transactions to OCFO accounting system through an automated interface.  In this situation, orders must be canceled or amended in the business feeder system.  The processing of the interface transaction in OCFO accounting system will complete the cancellation of the unliquidated obligation in OCFO accounting system.  This process is necessary in order to keep the business feeder systems and the OCFO accounting system in balance.

 

               (2)  Business Non-Feeder System (Non-Interface).

 

                       (a)  Other business lines have acquisition systems that do not have an automated interface with the OCFO accounting system.  In this case, the unliquidated obligation is created in the non-feeder business system and entering data of the unliquidated obligation directly into OCFO accounting system.  In this situation, the unliquidated obligation must be canceled in the non-feeder business system and then canceled in OCFO accounting system by manual entry.

 

                       (b)  The Financial Services Divisions’ Open Obligations Review webpage may be used to cancel invalid obligations.  Items under $100,000 will be deobligated automatically in OCFO accounting system but may require contract modifications and/or adjustments in the non-interface business systems.  Items greater than $100,000, (excluding accrued expenses) require CO action in the non-interface business system and in OCFO accounting system

 

               (3)  Orders that originate in OCFO accounting system.  These unliquidated obligations are created through the use of the Purchasing module in the OCFO accounting system.  In this situation, no other system is involved and the cancellation can be completed in the OCFO accounting system.

 

       f.    Accrued expense.  An accrued expense is a liability to pay for goods or services that have been received or supplied but has not been recorded or paid.  Expenses for interest, taxes, rent, utilities, and salaries are commonly accrued for financial statement reporting.  Accruals may be estimated amounts when the exact expense cannot easily be determined, and may require adjustments (up or down) or removal in the case of errors.   SSO have the authority to adjust accruals that do not require contract actions, regardless of the amount.  The Financial Services Divisions’ Open Obligations Review webpage may be used to accomplish the removal of these accrued expenses.

 

       g.   Unliquidated obligations certifiers role in the OCFO accounting system.  To accomplish the deobligations mentioned above, the unliquidated obligations certifier role has been established in the OCFO accounting system to allow designated individuals the ability to cancel unliquidated obligations.  Each SSO Controller Office and Assistant Commissioner Office of Budget and Financial Management will designate individual fund managers who will be assigned the unliquidated obligation certifier role.   Generally, this role will not be available for use if the business feeder system interfaces with OCFO accounting system.  In such instances, the unliquidated obligation should be canceled in the business feeder system and transmitted to OCFO accounting system under the system procedures outlined in this document.  If the unliquidated obligation has already been canceled in the business feeder or non-feeder system, and the residual balance still exists in OCFO accounting system, then the unliquidated obligation certifier needs to make a correction in OCFO accounting system.  The unliquidated obligation certifier should maintain records of their cancellations for six years and three months.  The Financial Services Divisions will provide assistance to the unliquidated obligation certifier in canceling unliquidated obligations in OCFO accounting system that involve a non-feeder business system.  Internal control should be established to ensure that the unliquidated obligation is canceled in both systems.  The Financial Services Divisions are required to maintain documentation of the request from the unliquidated obligation certifier for six years and three months on any cancellation assistance related to OCFO accounting system.

 

       h.   Final flag indicator on receiving reports in the OCFO accounting system.  The OCFO accounting system has the ability to flag a line of the receiving report as final.  If the final flag indicator has been checked on a line of the receipt, the referenced document line (purchase order, accrual, etc.) will be closed.   SSO are strongly encouraged to use the final flag indicator on all lines of the receipt when all goods and services have been received to facilitate contract closeout and help eliminate the need for future review and cancellation or contract modifications due to residual balances.

 

 

                                       CHAPTER 6.  ERRONEOUS OR IMPROPER PAYMENTS

 

Paragraph                                                         Paragraph

 Titles                                                                  Numbers

 

Introduction ……………………………………………………………………………………...1

OMB Circular A-123, Appendix C - Requirements for Effective Measurement and

         Remediation of Improper Payments ……………………………………………………2

Recovery audit program ……………………………………………………………………….3

Recording of erroneous payment claims …………………………………………………….4

 

 

 

CHAPTER 6.  ERRONEOUS OR IMPROPER PAYMENTS

 

 

1.  Introduction.  Congress enacted several provisions of law aimed at improving the integrity of the Government’s payments and the efficiency of its programs and activities, including PL 107-300, the Improper Payment Information Act of 2002 (IPIA), and Section 831 of the Defense Authorization Act for Fiscal Year 2002, also known as the Recovery Audit Act.

 

2.  OMB Circular A-123, Appendix C - Requirements for Effective Measurement and Remediation of Improper Payments.

 

       a.    GSA is required to review all programs and activities it administer and identify those that may be susceptible to significant erroneous payments.  Annual risk assessments are required for all programs where the level of risk is unknown.  For GSA programs deemed low risk, risk assessments are required every three years.  Programs with significant change in legislation and/or a significant increase in funding level are required to re-assess program risk during the next annual cycle, even if it is less than three years from the last risk assessment.

 

       b.    Improper Payment Information Act of 2002 (IPIA) requires program officials to implement plans to reduce significant erroneous payments.  Significant erroneous payments are defined as annual erroneous payments in the program exceeding both 2.5 % of program payments and $10 million.  The plans must include annual estimates of erroneous payments and the activities and progress in reducing them.  This information is required to be reported in the GSA’s Annual PAR.  The information must include:

 

               (1)  The estimate of the annual amount of erroneous payments (gross over and under payments) made in the program and the methodology used to arrive at the estimate.  The circular requires that once a program has been determined to be highly susceptible to erroneous payments, it must be statistically sampled to determine an error rate;

 

               (2)  Discussion of the causes of the erroneous payments identified, actions taken to correct those causes and the results of those actions;

 

               (3)  Discussion of the amount of the erroneous payments GSA expects to recover and the method that will be used to collect them;

 

               (4)  Statement of whether the GSA has the information systems and other infrastructure required to reduce erroneous payments to targeted levels;

 

               (5)  If GSA does not have the required systems and infrastructure, a description of the resources being requested must be in the most recent budget submission to Congress;

 

                (6)  Description of any statutory or regulatory barriers limiting the GSA’s corrective actions in reducing erroneous payments;

 

               (7)  Once the estimated baseline erroneous payment rate has been established, GSA must set a target that is lower than the most current estimated error rate.

 

       c.   The risk assessment consists of reviewing all of GSA business line/program erroneous payment information and it includes such factors as prior audit reports, internal control reviews, complexity of payment calculations, complexity of laws and regulations and other risk factors.   

 

       d.   GSA Order, CFO delegation of authority, Ch. 2 (CFO 5450.1), delegates the authority of determining the nature and extent of possible improper payments and identifying cost-effective control activities to address identified risk areas from the OCFO to H, and RAs.  This information must be reported annually to the OCFO.

 

       e.   GSA conducts annual risk assessments and monitors its payment activities on a monthly basis to ensure that all business lines remain low risk.  GSA also reviews and tests internal control for improper payments during its annual A-123 assessment of internal control over financial reporting.

 

3.  Recovery audit program.

 

       a.  Section 831 of the Defense Authorization Act for Fiscal Year 2002, Title 31 U.S.C. § 3561-3567, required agencies that enter into contracts with a total value in excess of $500 million in a fiscal year to carry out a cost-effective program for identifying errors made in paying contractors and for recovering amounts erroneously paid to contractors.  A required element of such a program is the use of recovery audits and recovery activities.  GSA implemented its recovery audit program in 2001.  OMB requires GSA to report recovery contractor activity plus additional information on erroneous payments discovered by GSA personnel.  Amounts discovered are to be reported by the following categories:

 

               (1)        total payment errors identified;

 

               (2)        amount deemed unrecoverable (written off claims);

 

               (3)        amount recovered;

 

               (4)        amount outstanding; and

 

               (5)        salaries and expenses associated with identifying, tracking and recovering erroneous payments.

 

       b.   GSA reviews payments related to leasing, building services, supply and information technology to identify potential erroneous payments.  The following contract payments are excluded from review in the recovery audit program since they would duplicate other audits performed within GSA:

 

               (1)  Construction - Construction payments are subject to an independent audit upon completion of projects;

 

               (2)  Fleet – Fleet payments are subject to independent audit by the Loss Prevention Team within FAS for fraud, waste and abuse and improper payments;

 

               (3)  Transportation – Transportation payments are subject to independent audit by the GSA Office of Transportation Audits.   

 

       c.   Complete access to all contracts, including all modifications, changes, correspondence and other documents should be provided upon request so that payments may be fully examined for potential errors.  Some examples of audit tasks performed are:

 

               (1)  Reviewing paid invoices to ensure correct computation;

 

               (2)  Comparing receiving documents (when available) to amount paid;

 

               (3)  Reviewing similar invoices for duplicate payments;

 

               (4)  Reviewing invoices for improper tax payments;

 

               (5)  Reviewing invoices for improper transportation charges (excluding those items normally audited by the GSA Office of Transportation Audits); and

 

               (6)  Reviewing contract files to identify contractual payment discrepancies.

 

       d.   Claims are to be submitted to the appropriate CO for review and concurrence.  Circular A-123, Appendix C, authorizes a recovery audit contractor to make direct contact with vendors, but only for the purpose of validating claims.  Once claims are approved by the contracting officer, demand letters are issued to the vendor in accordance with the Debt Collection Improvement Act and the GSA Accounts Receivable and Debt Collection Policy Manual, CFO P 4253.1A, Chapter 4.  Subsequent collection activity of forwarding claims to Treasury’s Debt Management Service will be initiated by the Financial Services Divisions.  The recovery audit contractor is paid a percentage of the amount actually collected by GSA or when contractor delivers economic benefit to GSA for a claim (e.g., tax abatement claim used to negotiate early buyout of lease).

 

4.  Recording of erroneous payment claims.

 

       a.   All erroneous payments identified will be recorded using the same coding as the original transaction, but with established function codes.

 

       b.   All funds recovered for erroneous payment are to be credited against the account coding previously charged.  If the collection relates to a claim identified by an audit recovery contractor, GSA must pay the negotiated fees.  All fees due to an audit recovery contractor will be paid using the account coding from the original erroneous transaction.  All payments should be charged to the proper appropriation and not deducted from collection proceeds.

 

 

                                       CHAPTER 7.  INTERAGENCY AGREEMENTS

 

Paragraph                                                        Paragraph

 Titles                                                                   Numbers

 

Interagency agreement policy guidance …………………………………………………..1

 

 

 

CHAPTER 7.   INTERAGENCY AGREEMENTS

 

 

1.  Interagency agreements (IA) policy guidance.   IA guidance may be found in the following documents:

 

       a.    Office of Chief Acquisition Officer Letter, V-09-06 (June 29, 2009), “Interagency Agreements-Acceptance and Obligation of Funds”, its successor documents, and the references therein, establish policy for provision of assisted acquisition services and acceptance of funds under IA.

 

       b.   FAS Assistant Commissioner Office of Acquisition Management Memorandum dated October 22, 2008, “Improving the Management and Use of Interagency Acquisitions” or its successor document implements the OMB memorandum dated June 6, 2008.

 

       c.   The Office of Federal Procurement Policy within OMB provides overall direction of Government-wide procurement policies, regulations, procedures, and forms for executive agencies and to promote economy, efficiency, and effectiveness in the procurement of property and services by the executive branch of the Federal Government.

 

       d.   OMB Memorandum dated June 6, 2008, “Improving the Management and Use of Interagency Acquisitions”, provides guidance for the sound management and use of interagency acquisitions.  The guidance includes a checklist of roles for each responsibility in the acquisition lifecycle and a model interagency agreement.

 

       e.   PBS Reimbursable Work Authorization (RWA) National Policy Document dated May 4, 2005 or its successor document establishes the policy relating to reimbursable work agreements between PBS and other Federal agencies and non-Federal organizations.  This document includes information on completing the GSA Form 2957, maintaining of cost estimate documentation, and RWA completion requirements.

 

       f.   The Financial Systems Integration Office (FSIO) Standard Business Processes Reimbursable Management provides best practice business processes for administering and managing interagency reimbursable agreements between federal agency trading partners.  The standard processes provide agencies with an understanding of reimbursable management, the correct accounting methodologies, business rules, and reconciling account balances between trading partners.   

 

 

                                       CHAPTER 8.  PERFORMANCE METRIC SYSTEMS

 

Paragraph                                                         Paragraph

 Titles                                                                    Numbers

 

Chief Financial Officers Council metric tracking system …………………………………....1

GSA executive scorecards …………………………………………………………………….2

 

 

 

CHAPTER 8. PERFORMANCE METRIC SYSTEMS

 

 

1.   Chief Financial Officers Council metric tracking system (MTS).

 

       a.   The MTS is a performance measurement system that captures key financial management indicators across the Federal Government.  The tool is to provide Government managers, Congress, and other stakeholders the information to assess the financial management health of the Federal Government as a whole and for each individual agency.  Tracking performance indicators helps guide financial management reforms and targets resources to areas where better stewardship of Federal financial resources is needed.  The MTS database is owned by the Chief Financial Officer’s Council of the United States and is accessible at http://fido.gov/mts/cfo.  Some of the measures tracked include:

 

               (1)  Fund Balance with Treasury;

 

               (2)  Amount in Suspense greater than 60 days old;

 

               (3)  Delinquent Accounts Receivable from public over 180 days;

 

               (4)  Electronic payments;

 

               (5)  Invoice payments - percent non-credit card invoices paid on time and interest penalties paid; and

 

               (6)  Credit card delinquency rates.

 

       b.   GSA is required to report data in the MTS by the 30th of the month.

 

2.  GSA executive scorecard.  The OCFO is responsible for developing financial measures across GSA in the form of an executive scorecard.  The executive scorecard compiles aging reports that cover common financial activity across GSA, and is used to identify old transactions in the accounting system and assign them to a responsible region who can affect their outcome.  Some of the measures related to Accounts Payable include:

 

       a.    Past due invoices over 30 days;

 

       b.    Obligations with no activity in the last 240 days; and

 

       c.    Purchase card transactions that have not been logged and reconciled.

 

 

CHAPTER 9.  MISCELLANEOUS

 

Paragraph                                                                Paragraph

 Titles                                                                 Numbers

 

                               PART 1.  ACCOUNTING SYSTEM SEGREGATION OF DUTIES

 

General …………………………………………………………………………………………..1

Roles ……………………………………………………………………………………………..2

Responsibilities ………………………………………………………………………………....3

 

               PART 2.  ACCRUAL BASIS OF ACCOUNTING IN THE FEDERAL GOVERNMENT

 

Statutory law requirement ……………………………………………………………………..4

Specific accrual accounting policy guidance ………………………………………………..5

 

                                       PART 3. CAPITALIZATION AND DEPRECIATION

 

Requirement …………………………………………………………………………………….6

Administrative assets …………………………………………………………………………..7

Real property assets …………………………………………………………………………...8

Internal use software …………………………………………………………………………...9

Procurement, management and maintenance of IT resources ……………………..……..10

 

                                               PART 4.  SURPLUS FUNDS

 

Requirement …………………………………………………………………………………...11

Submission of cost and capital plans ………………………………………………….…….12

 

                       PART 5.  TRAVEL MISCELLANEOUS REIMBURSEMENTS (TMR) LIMITS

 

Miscellaneous reimbursements limits ………………………………………………………13

 

 

 

CHAPTER 9.  MISCELLANEOUS

 

PART 1.  ACCOUNTING SYSTEM SEGREGATION OF DUTIES 

 

 

1.   General.  Key duties and responsibilities in authorizing, processing, recording and reviewing official GSA transactions should be separated among individuals.  No individual should exercise all approvals attached to any one specific request and order.

 

2.   Roles.

 

       a.    The roles and approval types of individuals are set in the GSA accounting system.  The role gives the user the ability to create and process documents after the approval type has been applied.  The approval type gives the user the ability to approve documents prior to processing.  Only warranted contracting officers should have authority to approve a purchase order, thereby obligating government funds.  Except in very limited circumstances, no individual should maintain the Contracting Officer (CO) role, the Purchasing – CO approval type and Receiver role.

 

       b.    The accounting system user assigned the Receiver role should not be assigned the following conflicting approval type and role:

 

               (1)        Purchase – CO

 

               (2)        CO/Specialist

 

       c.   The accounting system user assigned the “CO/Specialist” role should not be assigned the “Open Items Certifier” role

 

3.  Responsibility.  GSA may authorize dual roles in limited situations when a compelling business case exists.  Individuals who are granted the dual roles must maintain documentation to indicate that actual segregation of duties exist outside of the system.  Requests for granting exceptions must be submitted in writing with a justification to BC for review and approval.  No exceptions will be granted without the prior approval of BC.  All transactions executed with dual roles will be subject to audit review and verification.

 

PART 2.  ACCRUAL BASIS OF ACCOUNTING IN THE FEDERAL GOVERNMENT

 

 

4.  Statutory law requirement.

 

       a.   In accrual basis accounting, income is reported in the fiscal period it is earned, regardless of when it is received, and expenses are deducted in the fiscal period they are incurred, whether they are paid or not.  The accrual basis of accounting measures the performance and position of GSA by recognizing economic events regardless of when cash transactions occur.  The accrual basis of accounting is required under 31 U.S.C. § 3512(e) as follows:  “To assist in preparing a cost-based budget under section 1108 (b) of this title and consistent with principles and standards the Comptroller General prescribes, the head of each executive agency shall maintain the accounts of the agency on an accrual basis to show the resources, liabilities, and costs of operations of the agency.  An accounting system under this subsection shall include monetary property accounting records”.

 

       b.   All Federal organizations must comply with accrual accounting concepts, must maintain appropriate records, and record transactions as required.  Accrual-based accounting is an important and required form of control over resources and results in a systematic record of transactions that must be recorded to ensure an accurate record of GSA’s financial resources.  Accrual accounting requirements are applicable to all programs, including general and special funds, revolving funds, trust funds, and deposit funds.  Accruals should be computed and recorded in the accounting system for each accounting period and at year-end as determined by management.

 

       c.   An accrual (estimation) methodology provides valid and timely financial estimates and should be properly disclosed in notes to the financial statements.   GSA management is responsible for making judgments or assumptions that affect significant accounting estimates and for monitoring the reasonableness of these estimates on an ongoing basis.  An accounting estimate means an approximation of the amount of an item in the absence of a precise means of measurement.  As a result, the risk of material misstatement is greater when accounting estimates are involved.   Any accrual estimating methodology must be reviewed at least annually to determine if the assumptions used are still valid or require modification.

 

5.  Specific accrual accounting policy guidance.

 

       a.   General.  The guidance sets forth basic principles, requirements, and techniques for accounting on an accrual basis, whereby financial transactions are recorded in the period of occurrence, even though the related cash is disbursed or received during another period.  The basis of constructive receipt of goods and services is used without waiting for physical delivery to, or acceptance by, the Government and is applicable to some GSA business lines.

 

       b.   Frequency of accruals.  Accruals are computed and recorded in the accounting system for each accounting period, which is generally monthly, as determined by management.  When expenditure data is not available, estimates should be recorded in the accounting system and adjusted when actual expenditures are available.

 

       c.    Documentation.  Documentation reflecting computation and support for accruals and analysis of accuracy of accruals shall be retained for reference and audit.

 

       d.   General guidelines of accrued expenditures.   

 

               (1)  Prepayments.  Prepayments and advances to employees, contractors, grantees and others should not be reported as expenditures until performance occurs. In the meantime, advances and prepayments should be recorded and reported as assets.  Such asset accounts should be reduced, in whole or in part, as the expenditures are incurred and reported.

 

               (2)  Progress towards completion.  The measure of accrued expenditures under contracts for work to the Government's specifications is the amount of work performed during the period, not the amount of any progress payments that may be made.

 

               (3)  Accrued liabilities.  When GSA accepts title to goods, whether the goods are delivered or in transit, GSA should recognize a liability for the unpaid amount of the goods.  If invoices for those goods are not available when financial statements are prepared, the amounts owed should be estimated.  Such accruals may be estimated on the basis of available information and previous experience.  When a contractor builds facilities or manufactures goods or equipment to the Government's specification, the liability to pay for work is incurred as it is performed by the contractors rather than when deliveries are made.

 

               (4)  Contingent liabilities.  SFFAS No. 5, as amended by SFFAS No. 12, states that a contingent liability should be recognized when a past event or exchange transaction has occurred, a future outflow or other sacrifice of resources is probable and the future outflow or sacrifice of resources is measurable.  The GSA management, as advised by the Justice Department, must determine whether it is probable that a legal claim will end in a loss for the GSA and the loss is estimable.  If the loss is probable and estimable, the GSA would recognize an expense and liability for the full amount of the expected loss.  The expense and liability would be adjusted periodically, as necessary, based on any changes in the estimated loss.  The Federal entity involved in the litigations shall discuss, in a footnote to the financial statements, the Judgment Fund’s role in the payment of a possible loss.

 

               (5)  Standards for estimating accruals.  In the absence of invoices or other available data, reasonable estimates shall be used to accrue the cost of goods or services received before the end of a reporting period.  Some of the ways to record accrued expenditures are as follows:

 

                       (a)  Receiving reports showing quantities received and determining whether a given shipment is complete or partial are useful in determining the amount of the accrual when the invoice has not been received;

 

                       (b)  Payroll, travel and other vouchers received/prepared but not yet paid;

 

                       (c)  Where an obligation is recorded covering the expenditure which accrued within an accounting period, the obligation figure may be the best estimate of the amount of the expenditure incurred;

 

                       (d)  The prior month actual accrual or a trend of several previous months may be used when estimating a current month accrual;

 

                       (e)  If reports from contractors or grantees are not available or are not feasible, estimates should be obtained from project managers or other operating officials who are familiar with progress under the contract;

 

                       (f)  Sampling and other statistical methods may be used to make estimations in cases where dollar amounts are relatively low but the number of transactions is high. The method used and the reasons for its selection should be documented and kept on file.

 

 

 

PART 3.  CAPITALIZATION AND DEPRECIATION

 

 

6.  Requirement.

 

       a.   Capitalization is required for administrative assets including group and non-group, betterment, real property, and internal use software that are durable in nature and have a useful life of at least two years.  The capitalization amount is the full cost of an asset including the amount paid for acquisition, transportation, installation, and related costs incurred to bring the asset to a form and location suitable for its intended use.   

 

       b.   The depreciation amount is the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value, over its estimated useful life.  Useful life is the normal operating life of an asset when used for its intended purpose without rehabilitation in terms of utility to the owner.  Useful life of an asset is not determined by how long the item can last, but rather how long it is expected to be fully useful in its current form before becoming obsolete.  GSA uses a straight-line method to depreciate its assets.  Depreciation begins the month the asset is received and accepted.

 

7.  Administrative or program operation assets.

        a.    Group Assets.  Capitalization is required for group assets that collectively cost $10,000 or more per item or per purchase order.  Depreciation for group assets is required for financial statement reporting.  Some of the group assets are listed below with a standardized depreciation schedule:

        Useful Life

               (1)  Modular furniture systems                    5 years

                (2)  Personal computer workstations        3 years

                (3)  Local Area Network LAN                    4 years

                (4)  Video conferencing equipment and        

                          office phone systems                  4 years

                (5)  Playground equipment                      10 years

 

       b.   Non-group assets.  Capitalization is required for non-group assets that cost $10,000 or more per item or per purchase order.  Some of the non-group assets are listed below with a standardized depreciation schedule:

 

      Useful Life

               (1)  Office furniture                 5 years

                (2)  ADP hardware                         5 years

                (3)  Telecommunication                        up to 10 years

                (4)  Cafeteria equipment                10 years

                (5)  Compactor, sweeper, metering, tractor                10 years

                (6)  Folk-lift                        15 years

                (7)  Generators                        15 years

                (8)  Motor vehicles                         4 to 6 years (calculated in

                                                  TIRES based on body type)

                (9)  Other equipment                        5 years

 

       c.   Betterments.  Capitalization is required for betterments that cost $10,000 or more.  Betterments are equipment upgrades that might extend the useful life of an asset.  Betterments do not include maintenance costs.  Useful life of betterment requires the approval of the Controllers (FAS, General Management & Administration {GM&A}) or the Assistant Commissioner for Budget and Financial Management (PBS), and/or the Head of the Program Offices.

 

8.  Real property assets.

 

       a.   Effective October 2006, the capitalization threshold for all PBS real property was raised from $10,000 to $50,000.  The $50,000 capitalization threshold applies to both acquisition and after acquisition costs of real property, which includes land, buildings, additions, betterments, repairs and alterations and leasehold improvements.   

 

       b.   Buildings are depreciated; however, the land on which the buildings are situated is not.  When purchasing a business building, the cost of the land must be subtracted from the total cost of the property to determine depreciation expense for the building.  Some of the real property assets are listed below with a standardized depreciation schedule:   

 

      Useful Life

               (1)  Leasehold improvement term        5 years not exceeding lease

                (2)  Buildings (pre 1974)                Remaining useful life of 30 years

                (3)  Buildings (post 1974)                up to 99 years

                (4)  Major renovation                        20 years

                (5)  Minor renovation                        10 years

 

9.  Internal use software.

 

       a.   Capitalization is required for the internal use software whether it is commercial vendor off-the-shelf (COTS), contractor developed or internally developed to meet the entity’s internal or operational needs.  The capitalization amount should include:

 

               (1)  COTS – amount paid to vendor for the software including costs to customize or modify the product;

 

               (2)  Contractor developed – amount paid to contractor to design, program, install and implement the software;

 

               (3)  Internally developed – amount paid for salaries of programmers, systems analysts, project managers, administrative personnel, associated employee benefits, outside consultants, fees, rent, supplies, etc.

 

       b.   All data conversion costs for COTS, contractor developed or internally developed software should be expensed.

 

       c.   The capitalization threshold for software development for Federal Buildings Fund is $1 million and $250,000 for all other funds.  Amortization is required over the estimated useful life of the software.  The standardized amortization is:

 

      Useful Life

               (1)  Internal use software                         3 to 10 years

 

10. Procurement, management and maintenance of information technology resources.

 

       a.   The Office of the Chief Information Officer (OCIO) is tasked with the procurement, management and maintenance of IT resources, including but not limited to, computer work stations, wireless devices and printers.   As the OCIO procures IT equipment on behalf of the SSO, the OCIO will directly cite the SSO’s funding for all orders over $10,000.  While the OCIO will be the custodian of record, the SSO will take ownership of the assets by recording them within their fund, and capitalizing and depreciating the assets in accordance with official policy.  Examples include: laptops, computer workstations, individual printers.     

 

       b.   Procurement of hardware or software that can be shared or used by others, but at time of procurement is intended for a specific SSO, will be purchased with that SSO’s fund citation.  Examples include:  hardware for new applications or pilots, software to add a SSO to an existing application, network hardware where a location is dedicated to a specific SSO but might eventually house other SSO, or additional storage components required for a specialized SSO function.  

 

       c.   Procurement of hardware or software that will be shared or used by the entire agency will be purchased by using the OCIO fund citation and capitalized in accordance with policy.  Examples include:  shared networking equipment, shared storage devices and/or storage, shared file servers, and common infrastructure components (i.e., e-mail, collaboration, enterprise software licenses).

 

 

 

PART 4.  SURPLUS FUNDS

11. Requirement.  Surplus funds are required to be returned to Treasury as miscellaneous receipts under Public Law (PL) 109-313: General Services Modernization Act, Section 321, and PL 111-8: Omnibus Appropriations Act, 2009, Section 518 as amended in 40 USC 321(f).  The Administrator determines the cost and capital requirements of the Acquisition Services Fund and Working Capital Fund each fiscal year and, in consultation with the CFO, develops a plan concerning these requirements.  At the close of each fiscal year, after provisions for anticipated operating needs reflected in the cost and capital plans, the uncommitted balance of any funds remaining are to be transferred to the Treasury’s general fund as miscellaneous receipts in accordance with all laws and regulations.   

 

12. Submission of cost and capital plans.  By April 30 of each year, the FAS and GM&A controller will submit their cost and capital plan to the OCFO for approval, identifying legal use of retained earnings from the prior fiscal year balance and the surplus to be returned to Treasury.  The OCFO will book a liability to reflect the surplus and remit funds to Treasury by June 30 of each fiscal year.  Funds may be retained as follows:   

 

       a.    Acquisition Services Fund (ASF) – has authority to retain earnings from operating surplus to cover:

 

               (1)    a sufficient level of inventory of personal property to meet the needs of Federal agencies;

 

               (2)    the replacement cost of motor vehicles; and

 

               (3)    other anticipated operating needs reflected in the cost and capital plan.

 

       b.   Working Capital Fund (WCF) – has authority to retain earnings for:

 

               (1)   operating costs and capital outlays of the fund;

 

               (2)   necessary expenses of administrative support services, including maintenance and operation of printing and reproduction facilities in support of the functions of GSA, as well as Federal entities in accordance with laws and regulations; and

 

               (3)   transfer and use of amounts for major equipment acquisitions - unobligated balances of amounts appropriated or otherwise made available to GSA for operating expenses, and salaries and expenses may be transferred and merged into the ‘major equipment acquisitions and development activity’ of the working capital fund for agency-wide acquisition of capital equipment, automated data processing systems and financial management information and management information systems provided that acquisitions are limited to those needed to implement the CFO Act and related laws and regulations.  The requirements and availability are:

 

                       (a)    time for transfer – transfer must be done no later than the end of the fifth fiscal year after the fiscal year for which the amount is appropriated or otherwise made available.

 

                       (b)    approval for use – amount may be used only with the advance approval of the Committees on Appropriations of the House of Representatives and the Senate.

 

                       (c)    availability – amount transferred remains available until expended.

 

 

 

PART 5.  MISCELLANEOUS REIMBURSEMENTS LIMITS

13. Miscellaneous reimbursements.

 

       a.    GSA uses the E-Gov Travel system to reimburse employees for miscellaneous expenses.   

 

       b.    Receipts and invoices for reimbursements are to be submitted or maintained as follows:

 

               (1)  Requests for less than $500 – receipts/invoices are to be maintained by the person requesting reimbursement.  These receipts are subject to random audits by GSA’s Financial Services Division or the auditors.

 

               (2)  Requests of $500 or more but not exceeding the $2,500 limit – receipts/invoices are to be maintained by the person requesting reimbursement.  Copies of all receipts/invoices must also be submitted to BCE.

 

       c.   All documentation related to miscellaneous reimbursements must be retained by the associate requesting reimbursement for a period of six years and three months.

 

 

 

APPENDIX A

 

 

 

ACRONYMS

 

ACH        Automated Clearing House

ADA                        Antideficiency

ASF                        Acquisition Services Fund

BC                        Office of Financial Policy and Operations

BCE                        Financial and Payroll Services Division

BCF                        Financial Services Division

BD                        The Office of Financial Management Systems

CBL                        Commercial Bill of Lading

CCR                        Central Contractor Registration

CCRC                        Central Contractor Registration Connector

CFO                        Chief Financial Officer

CFR                        Code of Federal Regulations

CO                        Contracting Officer

COTS                        Commercial vendor off-the-shelf

DCIA                        Debt Collection Improvement Act of 1996

DUNS                        Data Universal Numbering System

EFT                        Electronic funds transfer

FAM                        Financial Audit Manual

FAR                        Federal Acquisition Regulation

FAS                        Federal Acquisition Service

FASAB                Federal Accounting Standards Advisory Board

FMFIA                        Federal Managers’ Financial Integrity Act of 1982

FMS                        Financial Management Service

FSIO                        Financial Systems Integration Office

GAO                        Government Accountability Office

GBL                        Government Bill of Lading

GM&A                        General Management & Administration

GSAM                        General Services Administration Acquisition Manual

HCA        Head of the Contracting Authority

HSSO                        Heads of Services and Staff Offices

IL                        Instructional Letter

IPAC                        Intra-Governmental Payment and Collection

IPIA                        Improper Payments Information Act of 2002

MCOC                Management Control Oversight Council

MOU                        Memorandum of Understanding

MTS                        Metric Tracking System

No FEAR Act         Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002

OCFO                        Office of the Chief Financial Officer

OCIO                        Office of the Chief Information Officer

OFAC                        Office of Foreign Assets Control

OIG                        Office of Inspector General

OMB                        Office of Management and Budget

PAR                        Performance and Accountability Report

PBS                        Public Buildings Service

PDN                        Pegasys document number

PL                        Public Law

PPA                        Prompt Payment Act

RC                        Regional Commissioner

RWA                        Reimbursable Work Authorizations

SAS                        Statement on Auditing Standards

SAT                        Senior Assessment Team

SDN                        Specialty Designated Nationals

SFFAS                Statement of Federal Financial Accounting Standards

SSO                        Services and Staff Offices

TAPS                        Transportation Audit Payment System

TAS                        Treasury Account Symbol

TFM                        Treasury Financial Manual

TIN                        Taxpayer Identification Number

TMSS                        Transportation Management Services Solution

TOPS                        Telecommunications Ordering & Pricing System

VSS                        Vendor Self Service

WCF                        Working Capital Fund