Cancellations – Accounting for Available Trust or Special Funds With Invested Relationships USSGL Board Meeting May 18, 2006

2 THE BACKGROUND Many available invested trust or special fund TAFS have corresponding relationships with other TAFS A good example is that of Treasury-Managed Trust Funds – The corpus accounts primarily collect and invest earmarked receipts on behalf of other recipient entities – The recipient accounts run the programs of the entities

3 THE BACKGROUND Usually these corpus-recipient relationships result in payables-receivables on the books This reinforces sound cash management principles, as well as provides a resource on the recipient’s books from which to obligate

4 THE ISSUE At the end of the 5 th expired year of a fiscal- year account, the recipient must cancel The recipient TAFS must: – Return all remaining fund balance to the corpus account – Cancel all remaining authority and balances (i.e. must cancel the receivable from invested balances) The USSGL currently does not have a mechanism to accommodate this activity

5 THE PROPOSAL Add two new USSGL accounts that will cancel the unobligated balances in the receiving TAFS represented by a) fund balance and b) a receivable in the receiving TAFS and a payable in the invested TAFS

6 THE PROPOSAL 4356 “Cancellation of Appropriation From Invested Balances” – Definition: The amount of appropriated receipts in an expenditure account that is cancelled and returned to the originating invested trust or special fund from which the amount was originally derived. The amounts are to be returned via SF 1151: Nonexpenditure Transfer Authorization.

7 THE PROPOSAL 4357 “Cancellation of Appropriated Amounts Receivable From Invested Trust or Special Funds” – Definition: The amount of appropriated receipts in a trust or special fund expenditure account, represented as a receivable from an invested trust or special fund, that is cancelled. There is no movement of fund balance.

8 THE PROPOSAL Why two new USSGL accounts? Account Movement of Fund Balance Treasury ActionSF 133 FMS 2108P&F 4356 From Expenditure TAFS back to Invested Expenditure TAFSSF 1151 Line 6An/a Line 2398 (unexpired only), Line n/a Line 6ACol 11 Line 2398 (unexpired only), Line 2441

9 THE IMPACT SF :Line 6A – Cancellations of expired and no-year accounts 4357:Line 6A – Cancellations of expired and no-year accounts

10 THE IMPACT FMS :N/A 4357:Column 11 – Unobligated Balance

11 THE IMPACT P&F 4356:Line 2441 – Special and trust fund receipts returned to schedule N (Line 2398 for unexpired only) 4357:Line 2441 – Special and trust fund receipts returned to schedule N (Line 2398 for unexpired only)

12 THE IMPACT USSGL TFM TRANSACTIONS A new transaction to record the cancellation associated with fund balance Debit 4650Allotments – Expired Authority Credit 4356Cancellation of Appropriation From Invested Balances Debit 5765Nonexpenditure Financing Sources – Transfers-Out Credit 1010Fund Balance With Treasury A new transaction to record the cancellation associated with a receivable from the invested account Debit 4650Allotments – Expired Authority Credit 4357Cancellation of Appropriated Amounts Receivable From Invested Trust or Special Funds

13 THE IMPACT USSGL TFM TRANSACTIONS A modification to transaction code F204 Debit 4356 Cancellation of Appropriation From Invested Balances Credit 4201 Total Actual Resources – Collected A modification to transaction code F249 Debit 4357 Cancellation of Appropriated Amounts Receivable From Invested Trust or Special Funds Credit 4123 Amounts Appropriated From Invested TAFS Reclassified – Receivable – Temporary Reduction/Cancellation

14 THE RESULT Alleviates FACTS II issues Allows for proper recognition on the crosswalks

15 QUESTIONS?