4 FAH-3 H-640
ACCOUNTING FOR DEPARTMENT COSTS
(CT:FMP-84; 03-10-2014)
(Office of Origin: CGFS/FPRA/FAFM)
4 FAH-3 H-641 GENERAL
(CT:FMP-84; 03-10-2014)
a. The Departments financial assistance costs are
generally recognized at the time payments are made. Under this principle,
advances and accrued liabilities are considered to be immaterial for financial
reporting purposes.
b. Exceptions are made when program officers deem it
appropriate to allow recipients to draw significant funds in advance of needs
or where recipients within a particular program tend to draw funds as
reimbursements after they have made expenditures. When a recipient who has
been authorized to draw down funds in advance of needs submits a Form SF-270, Request for Advance or Reimbursement, requesting an advance of funds in an amount
greater than its needs for 60 days, the payment will be recorded by the Bureau
of the Comptroller and Global Financial Services (CGFS) as an advance. Form SF-270s for such
awards will be filed or tagged in such a manner to allow identification for
advances. At the end of each fiscal quarter the Form SF-270s for awards under which such advances have
been made will be analyzed by CGFS and an
accounting entry recorded to reduce the advance and recognize costs.
c. For any financial assistance program where
recipients display a pattern of drawing Federal funds after, rather than
before, making expenditures, a process for developing estimates of the Federal
liability at year end will be installed. The responsible bureau, in
coordination with CGFS, will select one of
the following alternatives that have been proposed by the Joint Financial Management
Improvement Program:
(1) Poll all grantees as of September 30 of each
fiscal year.
(2) Take a statistical sample of grantees and base
projections on the sample.
(3) Perform a linear regression or other statistical
analysis using disbursement amounts and prior year expensed to develop an algorithm
to estimate current year-end accrual amounts.
(4) Forecast the fourth quarter expenditures using a
forecasting model such as the auto-regressive forecasting model or the
exponentially weighted moving-average forecasting model.
(5) Estimate the year end accrual based on an analysis
of the aggregate amount of disbursements rather than the patterns of individual
grantees.
d. Year-end accruals will be recorded in the general
ledger for year-end reporting and reversed upon opening the books for the next
fiscal year.
4 FAH-3 H-642 THROUGH H-649 UNASSIGNED