Adjustment to Total Resources – Disposition of Canceled Payables

1. Adjustment to Total Resources – Disposition of Canceled Payables Michele Crisman USSGL Staff Adj. to Total Res. - Disposition of Canceled Payables

2. OMB Guidance1 • "Legitimately incurred obligations that have not been disbursed (i.e. paid) at the time a Treasury Appropriation Fund Symbol (TAFS) is canceled cannot be disbursed from the canceled obligated or unobligated balances of the canceled TAFS. After a TAFS is canceled, any obligations or adjustments to obligations that would have been properly chargeable to that TAFS may be disbursed from an unexpired TAFS that is available for obligation for the same purpose as the closed TAFS… .“ • “Payment of obligations against canceled TAFSs from unexpired TAFSs are limited to one percent of the appropriation in the unexpired TAFS. No more than one percent of an unexpired TAFS may be used to pay any combination of canceled obligations. This is a single, cumulative limit… .” • “Antideficiency Act provisions continue to apply to canceled TAFSs. The authority to pay obligations against closed TAFSs from one percent of unexpired TAFSs cannot be used to exceed the original appropriation.” • “ When you cancel obligations under the provisions of Public Law 101–510 (31 U.S.C. 1551–1557), a tracking process should be maintained. You must maintain proper U.S. Standard General Ledger (USSGL) controls for obligations pertaining to canceled appropriations to prevent overpayment. The Treasury's Financial Management Service provides USSGL accounting instructions.” 1OMB Circular No. A-11, Section 130.14, dated July 2007. (See site for specific provisions.) Adj. to Total Res. - Disposition of Canceled Payables

3. The Issue When a valid bill is presented for a canceled payable the current treatment is: Adj. to Total Res. - Disposition of Canceled Payables

4. The Issue Cont’d Rule: • USSGL 4201, “Total Actual Resources – Collected,” should only be used in a closing entry. • The current treatment violates this rule. Adj. to Total Res. - Disposition of Canceled Payables

5. The Proposal • Create USSGL 4208, “Adjustments to Total Resources – Disposition of Canceled Payables.” • USSGL 4208 facilitates compliance with the rule. Adj. to Total Res. - Disposition of Canceled Payables

6. Illustration 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

7. Illustration1. Pay outstanding payable from current year-appropriation. Remove the “canceled payable” from canceled TAFS and reestablish the account payable in the current year2. 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

8. Illustration2. Pay the invoice for the valid account payable related to TAFS XX00 (canceled appropriation).2 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

9. Illustration 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

10. IllustrationC2. To record the closing of expended authority paid.2 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

11. IllustrationClosing Entries:C1. To record the consolidation of actual net funded resources and reductions for withdrawn funds.2 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

12. IllustrationC4. To record the closing of unobligated balances to expiring authority.2 2For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

13. IllustrationC5. To record the closing of fiscal-year activity to unexpended appropriations.2 2.For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

14. IllustrationC6. To record the closing of revenue, expense, and other financing accounts to cumulative results of operations.2 2.For further details see the draft Accounts Payable in a Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

15. Illustration 2For further details see the draft Accounts Payable In A Canceled TAFS scenario dated 4/24/08. Adj. to Total Res. - Disposition of Canceled Payables

16. Questions??? Adj. to Total Res. - Disposition of Canceled Payables