This chapter prescribes forms and procedures used by Federal agencies when accounting for and reporting integrated funding transactions. The requirements of this chapter apply to both agencies that do their own disbursing and those serviced by Treasury Regional Financial Centers (formerly disbursing centers).
Provisions of 31 CFR 205, Treasury Department Circular No. 1075 - Fourth Revision (Appendix No. 1 to I TFM 6-1000), prescribe regulations governing advances to recipient organizations for financing operations under Federal grant and other programs. The circular also requires the Commissioner, Financial Management Service, to issue the implementing instructions.
The U.S. General Accounting Office approved the "direct charge method" for use in conjunction with OMB approved integrated funding agreements.
Direct Charge Method - The method by which management agencies directly charge participating agencies' appropriations for project costs, based on those agencies' approving cross-certification authority to the management agency after executing OMB integrated funding agreements.
Federal Participant - Any Federal agency, department, corporation, independent establishment, or United States Government executive branch entity providing financial assistance to an integrated funding recipient during the projected funding period for the activity. A participating Federal agency may also be the lead and/or management agency.
Integrated Funding - Federal financial assistance from two or more Federal programs provided to a recipient by coordinating the funds administration through a single disbursing method.
Lead Agency - A Federal agency designated to coordinate Federal agencies involved in integrated funding. Lead agencies coordinate the recipient's contacts for Federal administrative matters related to the specified activity. The lead agency may also be the management agency.
Management Agency - The Federal participating agency designated as being responsible for administering integrated funding payments. This includes reporting funding transactions to Treasury and providing financial data to participants to coordinate administrative and budgetary systems of control. Generally, the management agency is the lead agency.
Recipient - Any eligible State or local government, federally recognized Indian Tribal government, public entity or nonprofit organization receiving Federal funds under an integrated funding arrangement.
7040.10 - General
When two or more agencies have an integrated funding arrangement by which each makes contributions for financing recipient organizations, usually the payments will be made by the letter-of-credit method (I TFM 6-7050.20). These transactions are reported monthly to FMS on the special letter-of-credit SF 224: Statement of Transactions, by the management agency as prescribed in I TFM 6-2065. When conditions require cash (check) payments outside of the letter-of-credit method, such disbursements will be reported by the management agency on its regular statement of transactions. The management agency administers funds disbursement and the financial and program reporting requirements; consequently, the participating agency is not required to report transactions of its program funds to Treasury.
7040.20 - Reporting Responsibility
The management agency reports to Treasury all authorized direct charges and adjustments to Federal participants' appropriations. The direct charge method can be used based on participating agencies' approval of cross-certification authority to the management agency after execution of OMB integrated funding agreements. Participating agencies have primary responsibility for ensuring that funds provided through an integrated funding arrangement are disbursed and expended properly. The participating agencies will receive monthly reports on disbursements charged to their appropriations on the management agency's SF 224.
7040.30 - Reporting Transactions
All integrated funding transactions will be supported by internal journal vouchers or adjustment documents used in the agency's normal accounting operations. Several types of transactions incident to the operations under an integrated funding arrangement may occur. The following is the primary transaction to be accommodated under an integrated funding arrangement (via letter-of- credit, an example of which is in Appendix No. l):
7040.40 - Report Adjustments
Adjustments to correct discrepancies on the management agency's statement of transactions will be included in the report for the following month. Adjustments due to incorrect Treasury processing should be brought to the attention of:
Department of the Treasury
Financial Adjustment Branch
600E 3700 East West Highway
Hyattsville, MD 20782
7040.50 - Coordination with Federal Participation
Within 15 days after the close of the accounting month, the management agency will notify Federal participants of the amounts charged to the Federal participants' appropriation or fund accounts. This information will be used by Federal participants to maintain their administrative accounts and to prepare other financial reports required by Treasury and OMB.
7040.60 - Reconciliation Between Treasury, Management Agencies, and Participating Federal Agencies
All related charges and credits reported on statements of transactions by management agencies will be reported back to the management agencies and participating Federal agencies by the Service in standard microfiche format and also via optional telecommunications of TFS Form 6653: Undisbursed Appropriation Account. Management agency charges to participating Federal agencies' accounts will be indicated by the management agency's 8-digit agency location code in the column "Reference/Location code." If differing amounts are reported to participating Federal agencies and management agencies by the Service on TFS Form 6653, participating Federal agencies should contact management agencies for reconciliation.
7050.10 - Application to Joint Funding
Existing jointly funded projects will continue under OMB guidelines until the project is renewed or completed, whichever occurs first. All new, jointly funded projects and renewed projects, where continuation funding has been approved, will be subject to the use of direct charge reporting.
7050.20 - Agency Location Code
All Federally funded programs must be funded by letter of credit if the criteria in Treasury Department Circular No. 1075 are met, unless a waiver has been obtained from the Commissioner, Financial Management Service. Consequently, each management agency, including those that perform their own disbursing, must have a special 8-digit letter of credit agency location code to report payment vouchers on letters of credit (I TFM 6-2000).
Inquiries concerning accounting and reporting matters should be directed to:
Budget Reports Branch
Financial Reporting Division
Financial Management Service
Liberty Center, Room 749 UCP
Washington, DC 20227
APPENDIX NO. 1
[GRAPHIC] SF 224