INTRAGOVERNMENTAL TRANSACTIONS

1. INTRAGOVERNMENTAL TRANSACTIONS Carrie A. Hug Department of Treasury May 13, 2009

2. Overview Intragovernmental Transactions The Problem Tools Key Reports for Agencies Reminders

3. WHAT ARE INTRAGOVERNMENTAL TRANSACTIONS? Business activities occurring within or between Federal agencies. • Buy/Sell • Fiduciary • Transfers • General Fund

4. THE PROBLEM Unmatched Transactions: Not accounted for and/or reconciled. Total net was $29.8 billion for FY 2008. Amounts accounted for most of the ‘Harmonizing Entries.’ Harmonized

5. OUT OF BALANCE – PROGRESS * Absolute value

6. TOOLS Business Rules – Business Process Improvements Systems and Initiatives Reports for Agency Use

7. BUSINESS PROCESS IMPROVEMENTS • Tracking transactions from the outset through settlement • Establish an agreement (IAA) with business partner • Record obligation in the accounting system • Record expenses and revenues in the accounting system • Record disbursements/collections and match to obligation • Intragovernmental must follow accrual accounting methods

8. Intragovernmental Reporting and Analysis System (IRAS) Intragovernmental Fiduciary Confirmation System (IFCS) Closing Package Note Disclosure Use of Central Accounting Data (UCAD) Fiduciary Group Transfers Workgroup Central Reporting Team (CRT) Dispute Resolution Committee SYSTEMS & INITIATIVES

9. INTRAGOVERNMENTAL REPORTINGAND ANALYSIS SYSTEM (IRAS) • Uploads data files - quarterly intragovernmental trial balance extracts, quarterly IFCS, FACTS I, and Closing Package information. • Generates reports and data queries by activating various parameters. • Generates reports for access through GFRS to 35 CFO/non-CFO agencies to facilitate reconciliation at the reporting level. • Requires that Federal transaction files are submitted quarterly and at yearend in two standard formats per TFM 2-4700.

10. INTRAGOVERNMENTAL FIDUCIARY CONFIRMATION SYSTEM (IFCS) Internet application and official confirmation system for Federal agencies that process fiduciary intragovernmental transactions. Agencies are required to confirm and reconcile, on a quarterly basis, the following transactions: Investments in Treasury Securities with BPD Borrowings from Treasury (BPD and FFB) FECA transactions with DOL Employee Benefit Program transactions with OPM

11. CLOSING PACKAGE • Makes intragovernmental activity reports available for agencies on Discoverer Viewer via Governmentwide Financial Report System (GFRS). • Compares amounts between reporting agency and trading partner. • Facilitates further reconciliation. • Requires that CFOs complete material differences/status of disposition certification and additional explanation form. • Provides information to FMS so that they can prepare and distribute agency Comparative Explanation of Difference reports.

12. USE OF CENTRAL ACCOUNTING DATA (UCAD) • Provides agencies reports on appropriation and non-expenditure transfers at http://fms.treas.gov/factsi/reports.html. • Improves interagency eliminations by providing a tool to reconcile transactions and balances directly to Treasury’s Central Accounting Data (authoritative data). • Requires agencies to reconcile these quarter transactions and balances with UCAD starting the 3rd quarter, 2009. • Requires agencies to submit full proprietary adjusted trial balances (ATBs) instead of just the “F” transactions due to a change in IRAS 3rd quarter reporting.

13. FIDUCIARY WORKGROUP • Established in 2007. • Focused on specific identification and resolution of the top 25 largest differences. • Identified common themes, which facilitated resolution in some areas. • Resulted in a decrease of differences from $21 billion (absolute value) in FY 06 to $3 billion in FY 08 (a decrease of 83%).

14. TRANSFERS WORKGROUP • Established in FY 2009 as a subcommittee of the A-136 committee • Used same premise as the fiduciary workgroup • Specific identification and resolution of largest differences • Identified transfer differences of $26 billion (absolute value) in FY 08 • Substantiated the requirement for agencies use UCAD now to identify transfer differences!!

15. CENTRAL REPORTING TEAM (CRT) • Includes accounting and financial management experts from the CFO community. • Focuses on best practices to resolve intragovernmental differences. • Monitors and revises business rules as needed/appropriate. • Reviews process standards for managing all interagency reimbursable activity (other than fiduciary, non-expenditure transfer, and borrowing activity) and implement them immediately. • Drives improved communications and consistency in the processing of paper documents and the accounting treatment of reimbursable activities between agencies. • Seeks possible interim systems solutions to provide for a better automated matching and reconciliation of interagency reimbursable activity via IPAC, etc.

16. INTRA-GOVERNMENTAL DISPUTE RESOLUTION COMMITTEE (IDRC) Accounting and financial reporting differences Imbalances material to one agency Efforts exhausted Arbitration by peers Disputes submitted to Treasury and OMB

17. QUARTERLY INTRAGOVERNMENTAL ACTIVITY REPORTS • Detail by Trading Partner • Summary by Trading Partner • Detail by Reciprocal Category • Summary by Reciprocal Category • Fiduciary Quarterly Data vs. IFCS Agency Benefits Report • Fiduciary Quarterly Data vs. IFCS Comparison Report • Material Differences/Status of Disposition Certification • General Fund Detail Report • Comparative Status of Disposition Certification Report

18. FISCAL YEAR 2009 YEAR-END INTRAGOVERNMENTAL KEY DATES Due Date DRAFT

19. REMINDERS Communicate and reconcile with trading partners on a quarterly basis. Use FMS tools (IRAS, IFCS) to identify and resolve intragovernmental differences. Use UCAD to facilitate reconciliations. Resolve differences by next reporting period and by the end of the third quarter to avoid additional reporting. Adhere to due dates.

20. CONTACTS Directorate Faye McCreary 202-874-9874 Faye.McCreary@fms.treas.gov Director of Financial Reports Division Karen Hunter 202-874-8058 Karen.Hunter@fms.treas.gov http://www.fms.treas.gov

21. QUESTIONS