Treasury Financial Logo

Chapter 4300

REPORTING INSTRUCTIONS FOR ACCOUNTS INVESTED IN DEPARTMENT OF THE TREASURY SECURITIES

pdf-iconPDF Version
(Click here to download Adobe Acrobat Reader)

This chapter provides detailed reporting instructions for disclosing principal, premium, discount, inflation compensation, and earned interest on accounts invested in the Department of the Treasury's (Treasury's) securities.

Section 4310-Scope and Applicability

Agencies use these instructions for reporting security transactions on the Statement of Transactions and/or reconciling their GWA Account Statement. Agency adherence to these reporting instructions assures parity in budget data between Treasury and the Office of Management and Budget. Proper reporting also will result in more accurate statements of available resources and program agency account activities.

Section 4315-Authority

According to 31 U.S.C. 3513, the Secretary of the Treasury must prepare reports on the financial operations of the U.S. Government. This code also requires that each executive agency furnish information and reports about its financial condition and operations if requested by the Secretary of the Treasury.

Section 4320-Definitions

Accrued Interest - This is interest earned on a security instrument that has not been paid or received.

Base Consumer Price Index (CPI) - The Base CPI reflects the CPI on the issue date or dated date of a security.

Consumer Price Index (CPI) - The CPI measures the average change over time in the prices paid by urban consumers for a number of fixed goods compared to the base price of those same goods at a specific time in the past. The base price level is set as 100.

Dated Date - The dated date refers to the date Treasury uses to calculate interest for the first interest period.

Discount - The discount is the difference between the price and the par value when less than par value is paid or received for a security.

Earned Interest Realized - The earned interest is interest earned and paid on a security instrument.

Index Ratio - The index ratio is figured by dividing the current CPI by the Base CPI.

Inflation Compensation - Inflation compensation represents the index ratio times the par value minus the par value.

Par Value - Par value represents the stated or face amount of a security.

Premium - The premium is the difference between the price and the par value when more than par value is paid or received for a security.

Price - This represents the market price for a security as of noon on the day of the investment or redemption.

Principal - Principal represents the stated or face amount of a security.

Purchase of Accrued Interest - The purchase of accrued interest represents the amount of interest purchased when a security is purchased between interest payment dates.

Secondary Market - Secondary markets are exchanges and over-the-counter markets where securities are bought and sold subsequent to original issuance.

Subclass - A subclass is a prefix used to classify transactions in expenditure accounts.

Unrealized Discount - The unrealized discount is the value of the discount carried until a security is redeemed or matures.

Section 4325-Availability of Funds

Agencies may not invest funds before the funds are deposited, collected, and considered available to Treasury.  Refer to I TFM 5-6500 (Voucher Date, Deposit Date, and Funds Availability Date) for guidance on the funds availability date.

Section 4330-Categories of Securities

Agencies with the proper investment authority have the choice of investing in either Government Account Series Securities, Marketable Securities, or both.

4330.10-Government Account Series Securities

Government Account Series Securities consist of the following:

  • Market-based securities;

  • Special issues;

  • One-day certificates;

  • Inflation-protected securities; and

  • Zero-coupon bonds.

Available market-based securities are bills, notes, and bonds. Treasury issues bills at a discount with a maturity date of one year or less. Treasury issues notes and bonds at a discount or premium. Notes and bonds carry a stated rate of interest, payable semiannually. Notes mature in 2 to 10 years, while market-based bonds mature in more than 10 years.

Treasury sells special issues, available in certificates of indebtedness and bonds, at par. Special issues carry a stated interest rate payable semiannually. Treasury redeems special issues at par plus accrued interest. Certificates of indebtedness mature in 1 year or less. Special issue bonds mature in 1 to 15 years.

One-day certificates mature the next business day. These securities earn interest at the daily Federal Reserve repurchase agreement rate.

Treasury issues inflation-protected market-based securities at a discount or premium. These securities carry a stated rate of interest, payable semiannually. Treasury adjusts the par value of the security on a daily basis using the index ratio to reflect inflation compensation.

Treasury issues zero-coupon bonds at a discount. These securities are Treasury fixed-principal bonds having maturities of at least 5 years and on dates that coincide with the maturity dates of marketable Treasury Separate Trading of Registered Interest and Principal Securities (STRIPS).

4330.20-Marketable Securities

Marketable Securities are those bills, notes, bonds, and Treasury Inflation-Protected Securities available for purchase and resale on the secondary market. Federal agencies must have specific investment authority granted by an act of the Congress before purchasing Marketable Securities. After authority is granted, agencies may purchase these securities on the secondary market through an independent brokerage firm.

Section 4335-Reporting Requirements for Investments in Government Account Series Securities

To accurately reflect the public debt, agencies record principal transactions for Government accounts at par value. Because discount, premium, and accrued-interest transactions affect the various funds differently, this chapter explains these transactions by fund type. The subsections below provide agencies with instructions on the fund types to use for investment and redemption transactions.

The Bureau of the Fiscal Service (Fiscal Service) processes the billing for investment, redemption, and interest payment transactions using the Intra-governmental Payment and Collection System (IPAC). A Business Event Type Code (BETC) is assigned based on fund type and transaction event.  Therefore, the offset to agency account reporting is in Section II of the Statement of Transactions, if applicable.

4335.10-Revolving (4000 Series), Trust Revolving (8400 Series), and Deposit (6000 Series) Funds

Separate receipt accounts are not established for revolving, trust revolving, and deposit funds. Therefore, agencies record all transactions against the expenditure account according to subclass. The associated BETC is recorded by Fiscal Service.  Below are the subclasses and BETC that are typically used:

  • 88-Investment in U.S. securities (par);
        INVTSEC-Investments in US Treasury Securities, Debit

  • 98-Redemption of U.S. securities (par);
        REDTSEC-Redemption (Sale) of US Treasury Securities, Credit

  • 75-Unrealized discount on Treasury securities;
        UNRLDISC-Unrealized Discount, Credit
        UNRLDIAJ-Unrealized Discount, Debit

  • 76-Earnings on Treasury securities.
        COLLINT-Interest Earnings, Credit
        COLINDEC-Interest Earnings, Debit

See Appendix 1 for more detail about revolving, trust revolving, and deposit funds.

4335.20-Special (5000 Series) and Trust (8000 Series) Funds

Agencies use separate receipt accounts to distinguish between the different types of activities. The associated BETC is recorded by Fiscal Service.  Below are the subclasses and BETC that are typically used:

  • 88-Investment in U.S. securities (par);
        INVTSEC-Investments in US Treasury Securities, Debit

  • 98-Redemption of U.S. securities (par);
        REDTSEC-Redemption (Sale) of US Treasury Securities, Credit

  • 75-Unrealized discount on Treasury securities.
        UNRLDISC-Unrealized Discount, Credit
        UNRLDIAJ-Unrealized Discount, Debit

Use point account .002 (commonly referred to as .2) with the 4-digit appropriation fund or receipt account Treasury Account Symbol to classify realized earnings as receipts.
            COLAVRCT-Collection to an Available Receipt Account, Credit
            COLAVDEC-Collection to an Available Receipt Account, Debit

See Appendix 2 for more detail about special and trust funds.

Section 4340-Reporting Requirements for Investments in Marketable Securities

Agencies must report changes in investments or redemptions in Marketable Securities to the Fiscal Service monthly on the Statement of Transactions. Agencies record principal transactions at par value on the Statement of Transactions. If agencies purchase Marketable Securities through an independent brokerage firm, they must notify the Fiscal Service, Financial Reporting and Statement Team (FRST), within 3 business days of such purchases.  This notification should report all outstanding investments at the Committee on Uniform Security Identification Procedures (CUSIP) level, listing the CUSIP number and the par value.

If agencies invest in Treasury Inflation-Protected Securities, they must report to Fiscal Service any inflation compensation adjustments on these securities.

The stripped interest component (TINT) of a security represents future interest payments due and will be recorded as accrued interest six months prior to maturity.

Examples of various transactions and their related Statement of Transactions entries are shown in Appendix 3 for Revolving (4000 Series), Trust Revolving (8400 Series), and Deposit (6000 Series) Funds.

Appendix 4 illustrates the same transactions for Special (5000 Series) and Trust (8000 Series) Funds.

The subclasses used to report investments in Marketable Securities are as follows:

  • 88-Investment in U.S. securities (par);

  • 98-Redemption of U.S. securities (par);

  • 75-Unrealized discount on Treasury securities; and

  • 76-Earnings on Treasury securities.

CONTACTS

Direct questions concerning investments in Government Account Series to:

Federal Investments Branch
Fiscal Accounting Operations
Bureau of the Fiscal Service
Department of the Treasury
PO Box 1328, Room 102
Parkersburg, WV  26106-1328
Telephone: 304-480-5151
E-mail: fedinvestor@fiscal.treasury.gov
Website: http://www.federalinvestments.gov

For more information on the types of market-based securities, refer to the Investment Fund Operating Circular located on the following website: http://www.treasurydirect.gov/govt/apps/fip/library/library.htm.

Direct questions concerning investments in Marketable Securities to:

Financial Reporting and Statement Team
Fiscal Accounting Operations
Bureau of the Fiscal Service
Department of the Treasury
PO Box 1328, Room 119
Parkersburg, WV  26106-1328
Telephone: 304-480-5277
FAX: 304-480-5176
E-mail: frst@fiscal.treasury.gov


Appendices Listing

Appendix No.

Title

1

Government Account Series - Revolving, Trust Revolving, and Deposit Funds

2

Government Account Series - Special and Trust Funds

3

Marketable Securities - Revolving, Trust Revolving, and Deposit Funds

4

Marketable Securities - Special and Trust Funds

Appendices are available in the PDF version only.