1.33.4  Financial Operating Guidelines (Cont. 1)

1.33.4.3 
OPERATING PROCEDURES

1.33.4.3.1 
CFO Servicewide Procedures

1.33.4.3.1.10  (08-28-2006)
Personnel Issues

  1. Budgetary guidance is warranted for certain personnel issues.

1.33.4.3.1.10.1  (04-16-2010)
Hardship Relocations

  1. The IRS hardship relocation guidelines are delineated in Article 15 of the 2009 National Agreement II between the IRS and National Treasury Employees Union. A basic tenet of the IRS hardship relocation policy is that there is work to be performed, now and in the future, in the geographic area to which an employee has requested a hardship relocation, and there must be a vacancy that management intends to fill. There will be no transfer of funds or FTEs to support approved hardship relocations. The 2009 National Agreement II is found on the Labor & Employee Relations website, http://hco.web.irs.gov/lrer/index.html, under "National Agreement."

1.33.4.3.1.10.2  (04-16-2010)
Hiring

  1. Financial Plan Managers can process internal and external hiring actions as long as they have adequate labor resources and FTEs in the current fiscal year, and hiring will not impact their budget for the following year as defined by the President’s Budget (excluding initiatives). See IRM 1.33.4.2.4.1, Managing within Resource Availability

  2. The CFO uses 3-Year Rolling Forecast data to report on staffing levels and to make labor projections. Financial Plan Managers must use the 3YRF to input their planned hiring, attrition, and any BU-specific assumptions in the 3YRF for Labor Reviews (see IRM 1.33.4.2.4.2.1, Labor Reviews).

  3. Corporate Budget will work with Business Units to analyze the maximum year-end staffing capacity and affordability, based on expected budget levels, hiring plans, and attrition.

  4. Hiring plans are also reported in Staffing Level reports (see IRM 1.33.4.3.1.11, Staffing Level Reports - Positions and FTEs, and in PeopleTrak.

1.33.4.3.1.11  (05-16-2011)
Staffing Level Reports - Positions and FTEs

  1. Financial Plan Managers are responsible for developing staffing plans to achieve the goals in the budget. Financial Plan Managers update the 3-Year Rolling Forecast with Full-Time Perm hiring plans and attrition projections by pay period and employment category. Using this information, Corporate Budget prepares monthly Staffing Level Reports (formerly "Resource Tracking" ) for Financial Plan Manager review and IRS senior leadership information.

1.33.4.3.1.12  (01-15-2008)
Cash Awards and Time Off Awards

  1. This section provides financial guidance regarding Cash Award funding allocations. See the 2009 National Agreement II, Article 18, found on the Labor & Employee Relations website.

1.33.4.3.1.12.1  (04-16-2010)
Cash Award Allocations

  1. The Financial Plans include allocations for cash awards, which are based on prior year allocations plus adjustments for Maintaining Current Levels (MCL). The Financial Plan Managers are responsible for making any necessary adjustments to the funding levels, to ensure sufficient funding is available for both established Bargaining Unit award targets and Non-Bargaining Unit awards. Article 18 of the 2009 National Agreement II requires 60-day advance notification before modifying the amount allocated to bargaining unit awards or to the non-bargaining unit non-supervisory pool.

  2. Funding for Senior Executive Service (SES) Awards and Presidential Rank Awards are held corporately until payouts are determined and then distributed to the Financial Plan Managers. Amounts for Suggestion Awards are funded in and paid from HCO allocations.

1.33.4.3.1.12.2  (04-16-2010)
Bargaining Unit Cash Award Targets

  1. CB will establish the targets for paying Bargaining Unit cash awards, consistent with Article 18 of the National Agreement II, at 1.75% of the total annual bargaining unit salary. The total annual bargaining unit salary equals the prior fiscal year actual salary utilization (i.e., the basic salary amounts including locality pay, based on 26 pay periods for the prior fiscal year) for Bargaining Unit employees not covered by incentive pay or gainsharing, adjusted for subsequent civilian pay raise adjustments. However, if any employee covered by incentive pay becomes eligible and receives a performance award, their salary during their time in which the eligibility was established will be included.
    The 1.75% bargaining unit funding targets are effective for performance awards based on appraisals due after October 1, 2009, (beginning with SSN 0) which are paid in September 2010, and for discretionary awards (for example special act awards) paid on or after October 1, 2009.

  2. The bargaining unit cash award targets will be allocated first to Bilingual Awards. After this allocation, the remaining target will be distributed as follows: 90% to performance awards and 10% to discretionary awards.

  3. Financial Plan Managers will ensure bargaining unit cash awards paid are no less than the established target amount for their business unit. If there are any major transfers of salaries between Financial Plan Managers, adjustments to the targets may be made with the concurrence of CB and HCO.

1.33.4.3.1.12.3  (05-16-2011)
Non-Bargaining Unit Cash Award Targets

  1. For Non-Bargaining Unit employees, the cash awards are based on specified percentages of current year projected salaries (including locality pay) of employees who are included in the respective categories. The salary percentages for each category are as follows:

    1. Paybanded Managers: 2.5% (90% to performance, 10% to discretionary) for performance bonuses based on appraisals for rating periods ending on September 30, 2009, which are paid in the following fiscal year (normally in December) and for discretionary awards (for example special act awards) paid on or after October 1, 2009. The 2.5% rate is also applicable for succeeding years.

    2. Management Officials: 1.75% (90% to performance, 10% to discretionary) for performance awards based on rating periods ending on September 30, 2010, which are paid in the following fiscal year (normally in December) and for discretionary awards (for example special act awards) paid on or after October 1, 2010. The 1.75% rate is also applicable for succeeding years.

      Note:

      The rate was 1.6% for performance awards based on rating periods ending on September 30, 2009, and for discretionary awards paid October 1, 2009 through September 30, 2010.]

    3. Non-Bargaining Unit Other: 1.75% (90% to performance, 10% to discretionary) for performance awards based on appraisals due after September 30, 2009, (beginning with SSN 0) which are paid in FY 2010 and for discretionary awards (for example special act awards) paid on or after October 1, 2009. The 1.75% rate is also applicable for succeeding years.

    Note:

    Financial Plan Managers have the discretion to adjust the percentages between performance and discretionary awards within each of the above categories (a. through c.) above.

    Note:

    Additionally, Financial Plan Managers may move funds between the Management Official and Non-Bargaining Unit Other categories. Consequently, a Financial Plan Manager may move funds from the Non-Bargaining Unit Other category to the Management Official category or from the Management Official category to the Non-Bargaining Unit Other category.

1.33.4.3.1.12.4  (01-15-2008)
Initiating Organization pays Cash Award

  1. Except as discussed in paragraphs 2 and 3 below, the organization initiating an employee award is responsible for covering the cost of the award. This pertains both to discretionary and performance awards. This includes employees from another organization on temporary assignment or working a special project. The initiating organization should identify awards recommended for employees who are not permanently assigned to their organization and coordinate with their Business Unit budget contact. The budget contact is responsible for assigning the correct accounting codes.

  2. Bargaining Unit employees' performance award pool and awards calculations are based on the employee's permanent position of record and organizational assignment, as recorded in the Treasury Integrated Management Information System (TIMIS), on the last day of the pay period which ends on or before June 30, with the following exception.

    Exception:

    A Bargaining Unit employee on a temporary promotion in a Non-Bargaining Unit position, on the last day of the pay period which ends on or before June 30, will be based on the employee's permanent organizational assignment, position, and grade.

  3. When a large reorganization between Business Units takes place between the June record date and the September award payout date, the impacted Financial Plan Managers must coordinate to ensure award funds stay with the award obligations; alternatively, they may agree to transfer award funds to the new organization, as long as they coordinate moving the commensurate award obligations.

1.33.4.3.1.12.5  (05-16-2011)
Cash Awards for Prior Fiscal Year

  1. Questions frequently come up about funding for cash awards (including performance awards, special act awards, and other awards) because of the timing of when they are made.

  2. Cash Awards are chargeable to the "Appropriations current at the time the award is made," per GAO Principles of Federal Appropriation Law (Volume II, Chapter 7, Section B.7.a; see http://www.gao.gov/legal.htm). For example, corrections or adjustments to cash awards made in FY 2007 are chargeable to FY 2007. On the other hand, if for some reason an award is delayed, such that managerial approval is not completed until after September 30 (the next fiscal year), the award is considered to be made and chargeable in the new fiscal year.

  3. In general, awards are regarded as having been made when there is an administrative determination to make them, as evidenced by the effective date on the SF 50, "Notification of Personnel Action" for the award (the effective date is not the same as the payment date).

  4. Corrections and Adjustments: corrections of clerical errors are properly chargeable to the fiscal year in which the award was originally made.

  5. In circumstances when interest must be paid on a late or partial payment of awards, the interest is chargeable to the fiscal year in which the award should properly have been made.

  6. Claims and Settlements: The date that the claim becomes a legal liability determines the fiscal year of the appropriation to be used to pay the claim. Which fiscal year to charge for claim resolution depends on the underlying basis of the dispute and the specific circumstances of the case. General Legal Services is able to provide advice with regard to settlements on a case by case basis.

  7. In situations where a settlement is determined in the current year for a prior year award, such adjustment would have to be made from current year funding. In such a situation, Corporate Budget would direct the Business Unit to reprogram funds into Commitment Item 1171 to supplement cash award funding. The supplemental award funding is in addition to the awards pool (or target) for current year awards.

1.33.4.3.1.12.6  (08-28-2006)
Time Off Awards

  1. The respective Financial Plan Managers will reprogram funds equal to the monetary equivalent of the Time Off Awards approved from cash awards to another Commitment Item in their Financial Plan. All Financial Plan Managers are responsible for tracking the total Time Off Awards cost, which must be added to cash awards when calculating the cash award/salary ratio.

1.33.4.3.1.13  (08-28-2006)
Buyouts

  1. The responsibility for buyout costs depends on who initiates the buyout.

1.33.4.3.1.13.1  (08-28-2006)
Servicewide Buyouts

  1. When Servicewide buyouts are initiated and an employee accepts a buyout, Corporate Budget provides funds in that fiscal year to the losing Financial Plan to support the departing employee’s Voluntary Separation Incentive Pay and Terminal Leave expenses incurred in that fiscal year. Payments to Office of Personnel Management's (OPM’s) retirement fund in that fiscal year are handled separately by Corporate Budget.

  2. If a Business Unit negotiates an arrangement whereby an employee is permitted to accept the buyout in the current year, but actually retires in the following fiscal year, the expenses are incurred in the following fiscal year - when the employee retires, not when the decision is made. In this case, the Business Unit will be responsible for funding the buyout-related expenses incurred in the following fiscal year.

1.33.4.3.1.13.2  (04-16-2010)
Business Unit Buyouts

  1. If a Business Unit decides to offer buyouts, that Business Unit will be responsible for all buyout expenses, including Voluntary Separation Incentive Pay, Terminal Leave, and OPM costs.

1.33.4.3.1.14  (04-16-2010)
Travel and Above Standard Level Requests

  1. Each Business Unit receives travel funds to complete its mission and to support its customers. The objective should be to eliminate as much directed travel as possible, to eliminate employees' charging travel against a Financial Plan other than their home Financial Plan and Functional Area. All travelers should charge travel to their own Business Unit whether in support of their own direct program or in support of a customer function.

  2. In general, support functions such as MITS, Agency-Wide Shared Services (AWSS), and HCO have been funded to support their customers’ day-to-day operational needs, and should not expect the customer to pay for their usual travel. Some examples and exceptions follow:

    1. MITS should pay for the travel of all MITS analysts, whether they are attending a function within their own Business Unit or assisting with the implementation of an approved project/program.

    2. AWSS will require a Business Unit requesting above standard or exceptional requests to fund the travel costs. Above standard or exceptional requests are those beyond the level of service standards mutually agreed upon in the Level of Service Agreement between the support organization and its customers. In the case of approved space projects that are centrally funded from the Stewardship Financial Plan (STWD), necessary AWSS project travel and overtime funds already are included in the project authorization amount, and no funds will be requested from Business Units; however, Business Units will be expected to pay travel and overtime expenses related to customer-funded projects.

    3. HCO will pay for travel associated with funded Servicewide programs such as administration of the Enterprise Learning Management System (ELMS) contract. AWSS personnel should pay the travel of instructors for timekeeping classes and bankcard classes.

1.33.4.3.1.15  (04-16-2010)
Gainsharing Travel Savings Program

  1. Under the Government Employee Incentive Act, IRS employees can earn gainsharing travel savings awards for saving IRS money while on temporary duty travel. These savings will come from the use of less expensive lodging and/or from use of frequent flyer benefits to purchase airline tickets for official travel. Employee participation is optional. Gainsharing awards are travel expenses, captured as Cost Element 1236.

  2. All temporary duty travel with lodging expenses, foreign or domestic, will be covered under this program. Relocation travel is not covered under this program. For more information, see IRM 1.32.1, the IRS Official Travel Guide.

  3. For Gainsharing awards, some Business Units require that Form 9127, Recommendation for Recognition, be completed and routed through the appropriate officials. Others process gainsharing awards through HR Connect. Each Business Unit may provide local procedures. Use Form 9127 unless local procedures dictate otherwise.

1.33.4.3.1.16  (01-15-2008)
Statistics of Income, Functional Area 4Q

  1. Surplus funding for Statistics of Income (SOI), Functional Area 4Q, may be reprogrammed within a Financial Plan as needed to cover Functional Area 4Q deficits. Surplus SOI funds in any Financial Plan will first be used to offset SOI deficits in other Financial Plans or Fund Centers before being reprogrammed into other Functional Areas, at the direction of the Director, Statistics of Income. The written concurrence of the Director, Statistics of Income, is required before reprogramming FTEs or funds out of Functional Area 4Q.

1.33.4.3.1.17  (04-16-2010)
Working Capital Fund (WCF)

  1. The Department of the Treasury provides to the IRS, through the Working Capital Fund (WCF), certain common administrative services that benefit more than one Treasury bureau. A WCF is a revolving fund that is authorized by law to finance a cycle of operations where the costs for goods or services provided are charged back to the recipient. The Treasury WCF primarily provides for the centralized performance of common administrative services, such as telecommunications, computer support, financial services, personnel and payroll services, procurement services, and printing and graphics services.

  2. Each fiscal year, the IRS and other participating agencies pledge a portion of their operating budget to support the Treasury WCF. The Treasury WCF also provides specific services to participating Treasury bureaus.

  3. In each Business Unit, the person responsible for all WCF funding issues is called the Funding Official and is defined as the Business Unit Division Finance Officer or their designee responsible for certifying WCF funding.

  4. Corporate Budget coordinates WCF issues between the WCF Funding Officials and the Department of the Treasury.

  5. Prior to the start of each fiscal year, Treasury’s WCF Office submits a proposed Financial Plan to the WCF Governance Board for approval. All agencies participating in the WCF, through their membership in the WCF Governance Board, must review and approve the Financial Plan, along with any increases beyond those necessary to maintain current levels. The IRS CFO, as a voting member of the WCF Governance Board, approves or disapproves individual WCF program funding levels. Subsequent to WCF Governance Board approval of the Financial Plan, Treasury then issues the initial collection letter to the IRS and other participating agencies.

  6. Each quarter, Treasury sends a bill to the agency WCF Funding Officials. The IRS WCF Funding Official reviews and approves the bill, certifies the funding for the quarterly billing statements, coordinates the billing certifications with the WCF Program Managers, and submits obligation documents for WCF expenses to the Beckley Finance Center.

  7. Each year Corporate Budget issues final costs to all WCF Funding Officials and issues additional guidance in the processing of the WCF obligation documents.

1.33.4.3.1.18  (05-16-2011)
Rebates and Refunds

  1. Generally, any funds received from sources outside of the agency must be deposited into Treasury’s general fund as miscellaneous receipts, unless the agency has statutory authority to retain funds for credit (that is, an increase) to its own appropriation.

  2. An exception to the general rule is allowed for receipts that qualify as refunds. Refunds are defined as "repayments for excess payments and are to be credited to the appropriation or fund accounts from which the excess payments were made." Refunds must be directly related to previously recorded expenditures and are reductions of such expenditures. Refunds also have been defined as representing "amounts collected from outside sources for payments made in error, overpayments, or adjustments for previous amounts disbursed." GAO opinion B-217913 (1986) (http://redbook.gao.gov/13/fl0063903.php).
    In the referenced opinion, GAO determined that travel credit card rebates are adjustments of previous disbursements, therefore qualifying as ‘refunds.’ So, when refunds and/or rebates are received, including credit card rebates, add them to the appropriation and fiscal year initially charged.

    Example:

    IRS earns rebates through the GSA SmartPay2 contract for government credit cards. AWSS-ESS Credit Card Services generates a quarterly Citibank Custom Reporting System Report to determine the percentage spent by appropriation for Individually-Billed travel cards and Centrally-Billed travel accounts. They allocate the rebates to the Business Units in the appropriation in which they were spent based on prior quarter spending.

    Example:

    IRS may retain a rebate or credit when contracts contain clauses providing for contract price adjustments. "In 34 Comp. Gen. 145 (1954), [GAO] held that the refund required under a guarantee-warranty clause was properly creditable to the agency appropriation because it could be considered an adjustment in the contract price. Similarly in 33 Comp. Gen. 176, [they] held that a contractor's refund made under a price redetermination clause may be credited to the agency account in that the refund was the return of an admitted overpayment." B-217913 (1986)

  3. Timing of the original obligations determines the dispensation of the rebate.

    • If the appropriation initially charged is open (current year), apply the rebate/refund to current year funds and it becomes available for obligation.

    • If the appropriation initially charged has expired, but is not yet closed, apply the rebate/refund to the expired account, even though its use in a prior year fund is limited.

    • If the appropriation initially charged has closed, deposit the refund to the Treasury general fund.

1.33.4.3.2  (08-28-2006)
Financial Plan Managers’ Procedures

  1. The following procedures are developed and imposed primarily by individual Financial Plan Managers, for cross-cutting and/or stewardship issues.

1.33.4.3.2.1  (05-16-2011)
Training Programs

  1. HCO manages the Executive Leadership program and pays all costs to manage the program. Employees participating in Leadership training programs charge their time and travel costs to the home Functional Area designated by the Business Unit where they work.

  2. HCO is responsible for the curriculum development for the education community and e-learning infrastructure.

  3. HCO manages the Skillsoft program. HCO and MITS fund the Skillsoft contract, which includes Books 24X7. HCO maintains contract administration responsibilities for the Micromash contract; the Business Units prepare and fund requisitions based on the number of modules or customized tasks being ordered off the Micromash contract.

  4. HCO manages the Tuition Assistance Program (TAP), including processing the TAP applications and RTS actions. HCO works with the CFO and DFOs to provide funding for TAP.

  5. All expenditures associated with training Commitment Items must include an Internal Order. This includes travel, services, and supplies. Internal Orders for training have been established for mission critical occupations, management levels, Servicewide programs and support.

1.33.4.3.2.2  (01-15-2008)
Object Class 42, Insurance Claims and Indemnities Funding

  1. Chief Counsel is responsible for administering funding for Object Class 42, Insurance Claims and Indemnities. Counsel processes and approves insurance claims and other litigation expenses under Cost Element 4202 for parties who prevail in tax litigation cases against the IRS. Counsel also processes and approves indemnity payments, which include federal tort claims and employee personal property claims. Federal tort claims filed under the Federal Tort Claims Act are paid using Cost Elements 4201 for personal injury claims, which are taxable, or 4209 for property damage claims, which are nontaxable. Employee personal property claims filed under the Military Personnel and Civilian Employee Compensation Act, are also indemnity claims that are paid using Cost Element 4209.

  2. These claims are funded on a centralized basis through one of two methods:

    1. AWSS is responsible for funding Counsel-approved attorney fee and indemnity claims in the Taxpayer Services (0912) and Enforcement (0913) appropriations.

    2. MITS is responsible for funding Counsel-approved attorney fee and indemnity claims in Operations Support (0919).

  3. All non-tax litigation attorney fees or settlement claims are the responsibility of the Business Unit in which the claim arose. Settlement claims include payments to taxpayers for the expenses incurred due to an erroneous levy (Cost Element 4203) and payments to current and former employees for the final settlement of a complaint (Cost Element 4204). Claims also may include payments of claims and judgments that are taxable and arise from court decisions or abrogation of contracts (Cost Element 4205) as well as payments of claims and judgments that are non-taxable and arise from court decisions or abrogation of contracts (Cost Element 4206).

  4. Amounts awarded, including settlements to current or former IRS employees or applicants for employment, in EEO cases litigated in District Court, are the responsibility of the Business Unit in which the EEO complaint arose (Cost Element 4211).

1.33.4.3.2.3  (04-16-2010)
Rent Program and Building Delegation

  1. Rent resources are centralized to the AWSS, Office of Strategy and Finance.

  2. IRS occupies several General Services Administration (GSA) delegated buildings, for which we are responsible for all operations and maintenance (O&M). Building Delegation funds in Functional Area 3D are to be used solely for the GSA Building Delegation Program, as documented in delegation agreements.

  3. Each year, GSA estimates the amount of O&M they would have charged, if they had operated those buildings under their standard usage policies. In accordance with PL 107-217, §121(d)(3), IRS is authorized to retain as no-year money the unexpended portion of our appropriated funds up to GSA’s estimated cost of O&M. Therefore, if our actual O&M costs for GSA delegated buildings is less then GSA’s estimate for the given year, the difference is eligible for transfer (rollover) at year-end into no-year authority. Corporate Budget controls the transfer process and must obtain approval based on input from AWSS. AWSS is responsible for re-allocating funding to delegated site allotment offices once Corporate Budget has completed the appropriation Transfer process.

  4. Under no circumstances may any rollover no-year funds be used for current year labor costs. No-year rollover funds may be obligated at the discretion of the Financial Management Officer in the delegated site to meet current year needs and must be used in accordance with GSA-defined standards.

1.33.4.3.2.4  (08-28-2006)
Paper or Print Tax Research Services

  1. In 2004, the IRS entered into corporate contracts for the delivery of comprehensive electronic tax law and legal research services through Lexis-Nexis and West Publishing. Commerce Clearing House (CCH), as a subcontractor of Lexis, continues to provide the stand-alone discs. While a need remains for limited paper tax research services, purchase of these paper products should be carefully reviewed in light of available electronic sources. The Lexis-Nexis and West contracts provide commonly used tax services in electronic format, such as Code of Federal Regulations, CCH U.S. Master Tax Guide, Research Institute of America United States Tax Reporter, etc. Operating divisions and functions should consider availability of these electronic services as well as employee skills, computer availability, and centralized shared libraries when determining the need for paper or print tax research services.

  2. Bulk contracting vehicles have been established for the purchase of print versions of the Internal Revenue Code and Income Tax Regulations, Research Institute of America Federal Tax handbook, CCH U.S. Master Tax Guide, and the Federal Tax Baedeker handbook. These bulk orders are coordinated through the Office of Servicewide Policy, Directives, and Electronic Research. Bulk ordering significantly reduces the per item cost of these products. The requesting operating division or function will fund the Code and Regulations orders, as well as a proportionate share of the handbook costs. Orders are based on the annual Other Government Agency (OGA) survey, which is sent to each order point each summer. The books are shipped through the Internal Management Directives Distribution System (IMDDS).

  3. For additional information, contact the Office of Servicewide Policy, Directives and Electronic Research (SPDER), or refer to guidance on http://spder.web.irs.gov.

1.33.4.3.2.5  (01-15-2008)
Internal Orders and Funds Reservations

  1. In IFS, Internal Orders and Funds Reservations are used to manage project-level data. Internal Orders provide tracking of costs by project. Corporate Budget allocates funds to projects by using Funds Reservations.

1.33.4.3.2.5.1  (04-16-2010)
Internal Orders

  1. Internal Orders are used to capture projects, activities, and reimbursable agreements. Except where covered by a reimbursable agreement, all expenditures associated with a Major, Non-Major, and Small/Other information technology project must be captured with the Internal Order code assigned to that project. A listing of codes can be found in the current Financial Codes Handbook (found on the Corporate Budget website), along with an indication of which codes are valid in which appropriations. The Financial Codes Handbook Narrative, paragraph 2.4, describes special identifiers within the MITS Internal Order code structure.

  2. Funds Reservations are independent of IFS Budget Versions. Funds Reservations represent planned funding for an Internal Order.

  3. All funding for Information Services, BSM, reimbursable agreements, and training must be assigned to Internal Orders through Funds Reservations. For Information Services and BSM Funds, Funds Reservations must reconcile to Versions 0 and 1, and should be amended whenever the budget is changed. For other Funds, Funds Reservations should not exceed funds available in Versions 0 and 1, and should be amended whenever the budget is changed. See IRM 1.33.4.2.4.5, Managing IFS Versions, for specific reconciliation timeframes.

    Note:

    Funds Reservations do not control spending or reprogramming. Only Budget Version 0 (V0) restricts spending.

  4. All spending for Information Services, BSM, reimbursable agreements, and training must be assigned to an Internal Order(s) on the originating document.

1.33.4.3.2.5.2  (04-16-2010)
Scope

  1. Internal Order codes are required for all costs charged against the Information Services and BSM appropriation resources, along with reimbursable funds and training. Nonlabor costs will be captured by Internal Orders through the normal accounting process (e.g., requisitions and travel vouchers). Labor costs will be captured from the payroll system, or by using an EV voucher. Employees funded by Information Services resources are required to track their time by Internal Order in the payroll system. Internal Orders also are used as needed to track certain major projects (see IRM 1.33.4.2.4.6, Financial Codes).

1.33.4.3.2.5.3  (01-15-2008)
Responsibilities

  1. Financial Plan Managers are responsible for the accuracy of their own allocations and obligations. Financial Plan Managers should ensure that all employees funded by Information Services or BSM resources are familiar with the Internal Order structure and codes, and that they are charging their time to the appropriate codes in the payroll system.

  2. Financial Plan Managers also must ensure that requisitions for goods and services against Information Services, BSM, reimbursable, or training resources are charged against the appropriate Internal Order codes prior to certifying funds availability.

  3. Financial Plan Managers need to reconcile Funds Reservations regularly against V0 and V1, and the three versions must be kept in agreement. See IRM 1.33.4.2.4.5, Managing IFS Versions, for specific reconciliation timeframes. Funds Reservations for Internal Orders must always be within Financial Plan ceilings by appropriation, Commitment Item, and Functional Area. Financial Plan Managers adjust their Funds Reservations using FMX2 whenever a Funds Transfer (FR58) is processed.

1.33.4.3.2.5.4  (01-15-2008)
Establishing Internal Order Codes

  1. The establishment of new Internal Order codes is limited to a critical need with a strong justification. Internal Order codes continue to be the official source for project cost information in the Operations Support (0919) and BSM (0921) appropriations. Internal Orders also will be used to track the costs of selected projects in Taxpayer Services (0912) and Enforcement (0913).

  2. To create or change Internal Order codes, a request/revision form must provide a distinct definition of the proposed new/revised code and how this requested code relates to a particular effort and existing codes. The definition will be used to assist the IRS in responding to various inquiries from external stakeholders.

    1. Customers requiring an Information Services or BSM code should first contact MITS Services Financial Management Services, Formulation Policy and Programs, who will provide assistance to customers and act as a liaison with Corporate Budget for officially establishing or revising/removing codes.

    2. Customers requiring an Internal Order code other than Information Services or BSM should use the form provided on the Corporate Budget website.

  3. The request form must be signed by the Financial Plan Manager and submitted to Corporate Budget. Also see Exhibit 1.33.4-2, Master Data (Code) Change Request Procedure.

1.33.4.3.2.6  (01-15-2008)
Direct, Shared, and Indirect Support

  1. Direct support, which can be reasonably identified and charged to a specific Functional Area, must be so charged. Shared support is explained below (see IRM 1.33.4.3.2.6.2, Shared (Cross-Functional) Support). Indirect support should be reviewed and charged to the multiple Functional Areas it supports, as long as a reasonable distribution can be made. If no reasonable distribution is possible, indirect support will be charged to the predominantly benefiting Functional Area. The IRS policy is to maximize direct support and minimize indirect support to the extent practicable.

1.33.4.3.2.6.1  (01-15-2008)
Rent Program

  1. AWSS ensures that rent is committed and obligated monthly.

  2. AWSS manages the IRS Space and Housing program, including building delegation and equipment funds. Their oversight responsibilities include, but are not limited to, utilities, custodial expenses, and space alterations.

    1. All requests for space (SF 81) must be approved and signed by the National Director, Real Estate and Facilities Management Division.

    2. If a Business Unit generates rent increases, other than those provided for through Unit Cost Rates for initiatives, those increases will be funded by that Business Unit. In that case, the Business Unit will be responsible for completing a base transfer into AWSS Stewardship Plan in the amount of the increase.

    3. If rent increases are not generated by a Business Unit (for example, if they are directed by the Commissioner or Congress, or are the result of a base projection error), the funding for the rent increase will be subject to senior management determination.

1.33.4.3.2.6.2  (04-16-2010)
Shared (Cross-Functional) Support

  1. In many IRS offices, ongoing space consolidation and rent reduction initiatives have resulted in Business Units sharing the same space. The Shared Support funding process covers these situations where multiple Business Units use the same items or services, and benefit by sharing them, but the cost to each Business Unit cannot be clearly identified.

  2. AWSS Real Estate and Facilities Management Division funds photocopiers for all Business Units, including campus locations.

    Exception:

    Criminal Investigation, Counsel, and Appeals continue to direct fund their own copiers. AWSS does not fund color copies at the campuses

  3. Mail room equipment maintenance for non-campus locations is funded by AWSS, and for the campuses by Wage & Investment.

  4. SB/SE manages the general Shared Support Program for the Washington DC metro area and all field offices, including call sites. The SB/SE Shared Support Program does not include copiers or contracted mail room operations. W&I manages all shared costs for all ten campus locations for all shared programs.

    Exception:

    W&I Customer Account Services (CAS) and Compliance field office call sites do not participate in shared support for supplies.

  5. The network printer consumable program supports the implementation of the Booz-Allen End User Equipment and Services Model Organization study recommendation to move the Information Technology printer infrastructure away from a stand-alone printer environment. The program encompasses networked end user non-production printers (minimum 1-to-10 employee ratio). The implementation of this recommendation resulted in shared devices that cross organizational boundaries. In order to ensure printer consumable ordering/purchasing is transparent to the various organizational entities, MITS End User Equipment and Services administers the program through the Integrated Equipment Group in each of the 21 End User Equipment and Services Territory Offices. The program covers printer toner and, depending on the printer type, the printer drums. The program does not cover paper products or consumables for stand-alone/non-qualifying printers. All IRS Business Units are eligible to participate in the program except Chief Counsel and Appeals.

  6. MITS is responsible for funding all costs of Portable Electronic Devices, e.g., Blackberries and wireless cards. This includes the costs for maintenance and repair. The determination of who has authorized use of wireless cards and Blackberrys will be based on standard employee profiles as well as Senior Executive Team decisions/direction.

    SHARED (CROSS-FUNCTIONAL) SUPPORT
    BU OWNER PROGRAM FUNDING RESPONSIBILITY
    AWSS Rent Funds are centralized & paid by AWSS
    Public Transit Subsidy Program Funds are centralized & paid by AWSS
    Furniture AWSS primary; BU Supplementary
    Building Delegation AWSS
    Buildings Services and Maintenance AWSS
    Space & Housing – Space Alterations AWSS/REFM exclusively
    Equipment Purchases REFM for initial purchase of shared;
    SBSE Shared Support for replacement of shared;
    W&I for replacement of shared at campuses;
    BU for exclusive use
    Mail services at non-campus locations AWSS
    National Real Estate Facilities Management (REFM) Mailroom Contract AWSS
    National Copier Contracts (which excludes Appeals, Counsel and CI copiers, which are self-funded) AWSS
    Shred Services AWSS
    SB/SE and W&I Courier (non-mail related), Shuttles, and Motorpools SB/SE or W&I Shared Support
    BU for exclusive use
    Equipment Rentals BU for rental of exclusive use;
    SBSE for shared
    Mail meter rental & maintenance at non-campus locations SB/SE Shared Support
    Small POD Supply Program SB/SE Shared Support
    Standard copy paper and fax toners SB/SE for all DC Metro and Field Offices
    W & I Bulk Printing & Postage (e.g., for tax packages & notices) W&I
    Mail meter rental & maintenance at campuses W&I
    (SB/SE Shared Support at other sites)
    Mail services at campuses W&I
    Chief Counsel Tax Litigation Attorney Fees & Indemnity Claims See IRM 1.33.4.3.2.2., Object Class 42, Insurance Claims and Indemnities Funding
    MITS Network Printer Consumables For network printers only, MITS funds toner and, depending on the printer type, printer drums; see paragraph 5 of this section
    Portable Electronic Devices (PEDs), e.g., Blackberries and wireless cards MITS funds all maintenance of current inventory and approved additions of PEDs; see paragraph 6 of this section

1.33.4.3.2.7  (08-28-2006)
Jury Fees

  1. Jury fees are handled as part of the standard collection process, not as a reimbursable. The actual collection transaction will be processed directly against the accounting string supplied with the fees. The Business Unit point of contact is responsible for supplying the accounting string to the employee for use on Form 3210, Document Transmittal. All Business Units will use Salaries Cost Element 1111 as the expense code on Form 3210. Failure to supply valid accounting string information to the employee serving on the jury will result in the loss of that Financial Plan's ability to directly recoup those fees. Instead, the funds will default to a standard accounting string controlled by Corporate Budget. Please note, all debit vouchers will be posted to the same accounting string as the original check.

  2. If the check is for time only, the employee should endorse the check by signing on the reverse of the check. Write the words "Payable to Internal Revenue Service" on the reverse of the check beneath the employee's signature. In cases where the check for jury duty covers both time and travel, employees should cash the court’s check and keep only the travel portion amount. Employees should complete a Form 3210, Document Transmittal, to forward their personal check (payable to the Internal Revenue Service) and a copy of the court statement to the Beckley Finance Center. The Form 3210 should contain the employee’s full name as shown in their personnel records, social security number, organizational unit, the Accounting String, office phone number and the dates of attendance in court. The Accounting String also should be identified on the jury fee check. The employee should then mail the original check and Form 3210 to the Beckley Finance Center, Attention: Jury Fee Desk.

1.33.4.3.3  (04-16-2010)
Information Services, BAC 99 Procedures

  1. The following procedures apply to the Information Services, BAC 99 resources. The Chief Technology Officer (CTO) has responsibility for all BAC 99 resources and all Information Technology (IT) resources reside in the Modernization & Information Technology Services (MITS) Financial Plan (see IRM 1.33.4.2.4.9, Information Services (IS), BAC 99 Reprogramming Authority). MITS provides additional Financial Operating Guidelines for its own organization on its Financial Management Services Budget Execution website (http://mits.web.irs.gov/M/FMS/BudgetExecution/default.htm).

1.33.4.3.3.1  (05-16-2011)
Policy on Procuring Information Technology (IT) Products & Services

  1. Funds in the Information Services (IS) budget activity (BAC 99) and the Business Systems Modernization (BSM) appropriation (fund 0921) are designated for exclusive use in procuring information technology goods and services. BAC 99 provides funding for Servicewide IS operations and maintenance and investments to enhance or develop business applications for the Business Units. BAC 99 funds telecommunications, hardware and software (including commercial-off-the-shelf), contractual services, and staffing costs to manage, maintain, and operate Information Services. In addition, funds in BAC 99 provide for improvements or enhancements to existing business applications. Even though IS is no longer its own appropriation, by defining the BAC, we state that these expenses will to be funded in BAC 99, part of the Operations Support appropriation (0919). Purchases of IT goods and services may only be funded from BAC 99 or BSM funds.

    Exception:

    Telecommunications and other IT costs may be transferred from BAC 99 to the Working Capital Fund (WCF) no-year accounts for our share of the WCF expenses.

  2. When an appropriation specifies the purpose for which the funds are to be used, 31 USC §1301(a) applies to restrict the use of the funds to the specified purpose. A specific appropriation must be used to the exclusion of a more general appropriation that might otherwise have been viewed as available for the particular item. Deliberately charging the wrong appropriation for purposes of expediency or administrative convenience, with the expectation of rectifying the situation by a subsequent transfer from the right appropriation, is a violation of law.

  3. The Commissioner delegated authority to the CTO to govern all areas related to IT resources and technology management (Delegation Order 261). Inherent in that authority is the responsibility to budget and deliver IT products. CTO policies and procedures are included in Delegation Order 261-1 and IRM 2.21.1, Introduction to Requisition Processing for Information Technology (IT). The Master Service Level Agreement provides additional guidance for obtaining internal MITS products and services. The Delegation Order, IRM and Master Service Level Agreement are all available on MITS' Procedures/Guidelines website, http://mits.web.irs.gov/ProceduresGuidelines/default.htm.

1.33.4.3.4  (04-16-2010)
Business Systems Modernization (BSM)

  1. By law, no Business Systems Modernization (BSM) funds, except labor costs, may be obligated until the Committees on Appropriations approve an expenditure plan (or spend plan) that:

    1. Meets the capital planning and investment control review requirements established by OMB, including provisions in Circular A-11.

    2. Complies with IRS enterprise architecture, including the modernization blueprint;.

    3. Conforms with IRS enterprise life cycle methodology.

    4. Is approved by IRS, Department of the Treasury, and OMB.

    5. Has been reviewed by GAO.

    6. Complies with the acquisition rules, requirements, guidelines, and systems acquisition management practices of the federal government.

  2. The CTO must submit the expenditure plan and any subsequent updates to Corporate Budget for approval and for submission to the Department of the Treasury, OMB, and GAO.

  3. During a CR, the CTO should prepare an exception request, to spend funds for ongoing BSM projects until we receive our appropriation and obtain approval of the official expenditure plan. Once Corporate Budget approves the request, Legislative Affairs will submit it directly to the Congressional Financial Services subcommittees for approval. Corporate Budget will make BSM funding available during a CR once the subcommittees approve.

  4. Any deviation from the previously approved BSM Expenditure Plan List of Projects (Exhibit 4) of 10% or $1 million for a project, whichever is less, may be obligated 10 days after OMB receives notification and justification of the proposed change (see IRM 1.33.4.3.1.4, Apportionments).

1.33.4.3.5  (04-16-2010)
EITC Procedures

  1. The following procedures apply to the EITC appropriation resources. EITC is a refundable credit created in 1975 to offset the impact of Social Security taxes on low-income families, encouraging them to seek employment rather than welfare. Pub 596 is an excellent resource guide for rules and regulations governing EITC. More information is in the W&I Finance Customer Guide, found at http://win.web.irs.gov/strategy.htm, under Finance, Customer Guide.

1.33.4.3.5.1  (05-16-2011)
General

  1. Wage and Investment's EITC Office was established to enhance oversight of EITC funds. EITC funds should only be used for employees working on EITC initiatives and include labor, supplies, equipment, etc., used for EITC activities.

  2. EITC is tracked via three sub-appropriations:

    • 09E2D (Taxpayer Services)

    • 0917D (Enforcement)

    • 09E9D (Operations Support)

    The sub-appropriations roll up to the corresponding BACs already designated by Functional Area mapping (for example, Funds in EITC Functional Area 2B roll up to BAC 22, in sub-appropriation 09E2, appropriation 0912).

  3. To ensure that the funds are adequately used, the EITC Office has established the EITC Request Form to serve as a management oversight tool to track modifications to planned initiatives and resource allocations. Any requests for additional EITC resources, including FTEs and funding (whether during formulation, geographic distribution, benchmark, or execution), must be requested in writing using the EITC Request Form. The form is an appendix of the W&I Finance Customer Guide, found at http://win.web.irs.gov/strategy.htm. The Business Unit Commissioner/Chief or designee for the EITC program should complete the request form and forward it via e-mail to the shared mailbox *W&I EITC Finance (or wi.eitc.finance@irs.gov). W&I Headquarters Finance will forward the request to the EITC Program Manager or designee. Upon receipt of the request, the EITC Office will reply to the request via fax within 3 business days. Copies of all requests will be retained in the EITC Office and reconciled monthly to financial reports.

1.33.4.3.5.2  (04-16-2010)
Guidelines to Modify the EITC Program Plan Summary

  1. To give the Financial Plan Managers some flexibility in making changes to their EITC budget allocation, any modifications within a Budget Line Item category, within the same Financial Plan and Functional Area, do not require approval from the EITC Office. However, all modifications to FTEs and funding between Financial Plans, Functional Areas, and Budget Line Items must use the EITC Request Form and follow the same procedure as requesting additional resources. Financial Plan Managers must keep in mind that actions cannot be taken in the current year that create additional needs in subsequent years. Approval from the EITC office is required, via the funding form, before realigning or reprogramming any funds out of the EITC sub-appropriation.

  2. All requisitions for EITC equipment, i.e., hardware and software, must be routed first through the EITC Program Manager or designee and the MITS designee for approval.

  3. All Financial Plans receiving EITC resources will establish a charging methodology by Functional Area prior to the beginning of the fiscal year. Financial Plan Managers must ensure each employee’s EITC time charges are reported accurately and timely by the 25th of every month, in accordance with the methodology established for their Financial Plan. Periodic audit reviews will be conducted by the EITC Office, as well as by the Treasury Inspector General for Tax Administration (TIGTA) and the GAO to ensure that obligations charged to EITC are only for EITC-related initiatives, programs, and projects.

1.33.4.3.6  (01-15-2008)
Federal Highway Administration (FHWA) Trust Fund

  1. The IRS has a project with the Department of Transportation to perform work on behalf of the Federal Highway Administration (FHWA) under the authority of the Highway Trust Fund. This project is undertaken by MITS and SB/SE to enforce and enhance the collection of highway use taxes through systems modernization. This work is funded through use of an allocation account (See OMB Circular A-11, Part 1, Section 20, Terms and Concepts).

  2. FHWA, the parent, is responsible for recording the contract authority, recording the appropriations to liquidate contract authority, as well as tracking obligations and disbursements of the fund through use of its own Treasury appropriation fund symbol. FHWA issues budget guidance to the IRS on Form FHWA 370 (Advice of Funds Available for Obligation). The dollar amount on Form FHWA 370 represents an allotment of budget authority to the IRS. This form provides both the authority and description of the project or program to be executed. It does not provide the fund authority (dollars) to pay the bills. It only represents the transfer of contract authority. Once received, contract authority is transferred through an SF 1151. Funds are not transferred until actually needed for disbursement. FHWA will transfer the amount requested based on estimated quarterly disbursements. Corporate Budget coordinates with each Business Unit to provide FHWA timely reporting of commitments, obligations, expenditures, and disbursements related to this fund using both budgetary and proprietary accounts. Business Units are responsible for any expense transfers should they need to make FHWA charges to the current year appropriations.

  3. Trust fund accounting is not the same as general fund or revolving fund accounting (refer to FHWA Accounting Handbook for Recipient [Child] Accounts). Unused fund authority is returned to the parent annually and reallocated.

1.33.4.3.7  (04-16-2010)
Private Collection Agency Expenditure Fund

  1. The FY 2009 omnibus appropriation shut down the IRS use of private collection agencies; as specified in Administrative Provision Section 108, "None of the funds made available in this Act may be used to enter into, renew, extend, administer, implement, enforce, or provide oversight of any qualified tax collection contract."

  2. A percentage of the funds that have been collected by Private Collection Agencies were transferred into Special Fund Expenditure Account 20X5510. The remaining amount is used only for IRS collection enforcement activities. SB/SE is the leading organization. This Fund is a no-year account, with normal budgetary procedures. OMB requires 10 days' notice of the plan to spend these funds before they can be used.

1.33.4.4  (01-15-2008)
ACCOUNTING ISSUES

  1. Most accounting policies can be found on the CFO IFM website, but key policies that are inextricably linked to budget execution are presented here.

1.33.4.4.1  (05-16-2011)
Interagency Agreements or Reimbursable Agreements

  1. The IRS can enter into two types of Interagency Transactions: Interagency Agreements or Reimbursable Agreements. These transactions occur when federal agencies perform work and provide goods or services for other agencies or activities on a reimbursable basis. Reimbursements between agencies are a form of resource transfer. The organization entering and signing the agreement is responsible for budgeting and arranging funding for the agreements. Such transfers are prohibited without statutory authority.

  2. The IRS often contracts with other agencies, including federal, state, and foreign governments, as well as private organizations, to perform work or provide goods or services for which the IRS will be reimbursed. The IRS accounts for the expenses incurred through the establishment of Reimbursable Agreements, through which IRS performs work and receives money. When the IRS pays for work performed or goods or services provided, this is called an Interagency Agreement.

  3. In the event of a Continuing Resolution, continuing projects are allowed to commence work and accrue earnings at the same rate that occurred in the prior year.

1.33.4.4.1.1  (04-16-2010)
Reimbursable Work Authorizations (RWA) and Security Work Authorizations (SWA)

  1. Project managers for GSA Reimbursable Work Authorizations (RWA) must work with GSA to obtain documentation necessary to support charges for work completed on any individual RWA (GSA Form 2957). Project managers should be able to provide documentation to support all charges from GSA for a specific RWA, as well as any charges for unbilled amounts. At year-end, project managers should supply to the Beckley Finance Center a supportable estimate for all work completed on an RWA, but unbilled by GSA. This will provide the basis for the accounting office to record an account payable for work completed but not yet billed.

  2. Project managers for Security Work Authorizations (SWA) must work with the Department of Homeland Security (DHS) to obtain documentation necessary to support charges for work completed on any individual SWA (FPS Form FPS 57). Project managers should be able to provide documentation to support all charges from DHS for a specific SWA, as well as any charges for unbilled amounts. At year-end, project managers should supply the Beckley Finance Center a supportable estimate for all work completed on an SWA, but unbilled by DHS. This will provide the basis for the accounting office to record an account payable for work completed but not yet billed.

1.33.4.4.1.2  (04-16-2010)
Intra-governmental Payment and Collection

  1. Financial Plan Managers, with input from project managers as appropriate, are responsible for ensuring certification for payment for all amounts billed from other federal agencies through the Intra-governmental Payment and Collection process. Certification indicates that the IRS has received all the goods and services for which it is billed, and that those goods and services were acceptable. Certification to the Beckley Finance Center should occur within 10 calendar days of receipt of the supporting billing information from the billing agency. In cases where amounts billed are in dispute, reconciliation should be provided to the accounting office identifying these amounts and plans for resolution of discrepancies.

  2. At year-end, Financial Plan Managers should report any material discrepancies for Intra-governmental Payment and Collection billings to the Beckley Finance Center so that the amounts due to or from another federal agency can be recorded.

  3. At year-end, Financial Plan Managers should notify the Beckley Finance Center of goods or services provided by another federal agency for which the IRS has not yet been billed. Notification must include the associated IFS obligation document identification number.

1.33.4.4.1.3  (05-16-2011)
Reimbursable Operating Guidelines (ROG)

  1. IRM 1.33.3, the Reimbursable Operating Guidelines (ROG), assists Financial Plan Managers in fulfilling their responsibilities related to the reimbursables program. These guidelines provide instructions to properly record reimbursable agreements in the financial system, and to properly bill and collect funds from other agencies. IRM 1.33.3 can also be found on the Corporate Budget website.

  2. The reimbursable project coordinators are responsible for ensuring that an agreement is in place before doing the work and for coordinating with the Financial Plan Managers for budget authority and recording obligations. Obligations related to reimbursable work may not be incurred until supported by documented evidence of a binding agreement between the IRS and the requesting agencies or activities. Because IFS prohibits Financial Plan Managers from exceeding their budgets, Financial Plan Managers must help project coordinators comply with this long-standing policy: "No agreement, no work." See the ROG for expanded guidance.

  3. Reimbursable project managers must maintain complete project files, including documentation supporting all reimbursable earnings for the projects. Documentation should include formulas, calculations, and all detailed documentation used to develop project earnings (the Costing Methodology procedures are part of IRM 1.33.3.

1.33.4.4.2  (05-16-2011)
Vendor Payments

  1. To satisfy Prompt Payment Regulations, functional program managers, project managers, and end users are responsible for ensuring that receipt and acceptance is recorded timely, that is, generally within five working days of receipt of goods or services. See the Receipt and Acceptance Handbook on the Beckley Finance Center website, http://cfo.fin.irs.gov/IntFinMgmt/BFC/BFC_Index.htm.

  2. At year-end in particular, Financial Plan Managers must manage receipt and acceptance timely for obligation or accrual. See IRM 1.35.15.9, Annual Close Guidelines, Receipt and Acceptance.

1.33.4.4.3  (04-16-2010)
Commitments/Obligations

  1. Commitments and obligations must be posted timely. Commitments set aside funds for future obligations, and are a resource management tool that draws down availability. Obligations are legally binding agreements created by awards, contracts or purchase orders. The values of the negotiated agreements (obligations) are to be entered into IFS prior to the beginning of work. Obligations draw down (liquidate) commitments. Expenditures draw down (liquidate) obligations.

  2. Financial Plan Managers should make every effort to post data in IFS to the appropriate accounting string. However, accounting code corrections can be made in IFS. IFM's procedures identify thresholds below which the accounting codes for the obligation should not be changed, except in certain cases. In situations where the actual cannot be corrected, the Financial Plan Manager may need to transfer funds to cover any budget deficit. There are separate rules for purchasing transactions, GovTrip (or Travel Management System) obligations, manual travel obligations, and payroll. In each case, the exceptions provide for fixing an erroneous appropriation. Please see "Accounting Code Change Instructions" at http://cfo.fin.irs.gov/IntFinMgmt/BFC/GUIDANCE/SV-ACC-CODE-CHANGE-INS.doc (which are found on IFM's Travel Guidance website (http://cfo.fin.irs.gov/IntFinMgmt/PolicyProcedures/Travel/Travel_Guidance.htm).

1.33.4.4.4  (08-28-2006)
Unliquidated Commitments/Obligations

  1. Timely management of commitments and obligations enables the IRS to optimize its financial resources. Unliquidated commitments and obligations may be deobligated at any time throughout the fiscal year, whenever they are deemed no longer valid. Financial Plan Managers are responsible for coordinating with Procurement and the Beckley Finance Center the timely liquidation of orders or estimated obligations that are no longer valid.

  2. Bulk-funded commitments and estimated obligations, in particular, must be tightly controlled, reviewed, and adjusted to actual requirements as quickly as possible. Financial Plan Managers must frequently (i.e., at a minimum, monthly) review all outstanding unliquidated obligations, regardless of fiscal year and appropriation, to identify unliquidated obligations that should be deobligated. They should contact all pertinent parties to help determine which unliquidated obligations may be deobligated. AUC and AUO programs have been established in IFS to assist and facilitate reviews. Periodic reviews are required by the CFO (see IRM 1.33.4.2.4.2.4, AUC and AUO Reviews).

1.33.4.4.5  (04-16-2010)
User Fees

  1. User fees are collected during the year and increase the IRS total funds availability by the amount apportioned by OMB. They may be distributed to fund corporate needs. If they are distributed to a Financial Plan, they become part of that Financial Plan's resource availability for the current fiscal year. See IRM 1.33.4.2.4.1, Managing within Resource Availability.

  2. User fee allocations, like all appropriated funds, must be apportioned by OMB before we can obligate against them.

  3. OMB requires separate spend plans on user fee accounts.

  4. Balances available in user fee accounts will be pulled by Corporate Budget and redistributed the following fiscal year, based on corporate needs and priorities.

  5. User fee charges must be reviewed every two years to ensure existing charges are adjusted to reflect changes in costs, and to determine whether fees should be assessed for other goods and services (See OMB Circular A-25). The biennial review is the responsibility of the Financial Plan Managers with the assistance of CFO and Internal Financial Management. Business Units are responsible for collections, maintaining case information, developing a method to track cases and fee information, and maintaining their files for audit purposes. See Revenue Financial Management's guidance, IRM 1.32.19, User Fees.

1.33.4.4.6  (05-16-2011)
Expired, Closed, and No-Year Appropriations

  1. Budget authority life cycles are discussed in OMB Circular A-11 and the Financial Codes Handbook Narrative. Appropriation language defines the period during which funds are "open," that is, available for new obligations. IRS receives some multi-year and no-year funding, but most appropriations are "annual" appropriations, meaning they are open for one year. Special rules apply after an annual or multi-year appropriation expires.

  2. Expired appropriations: once the period of availability expires, new obligations may NOT be incurred. Balances are available only for upward and downward adjustments to existing obligations during the five years following expiration of obligation authority for annual and multiyear Funds; see IRM 1.33.4.2.2.2.2, Time: the Bona Fide Needs Doctrine.

    Example:

    During FY 2011, balances from annual appropriations for FY 2006 through FY 2010 are expired.

    Example:

    After 9/30/2011, the annual appropriation 11110912D will expire.

  3. Closed appropriations: after the last expired year, the account is closed and the balances are canceled. Any invoices for valid obligations received after the account is closed must be obligated against and disbursed from current year budget authority that is available for the same general purpose. However, no more than 1% of any annual appropriation is available to cover closed year obligations. To monitor our compliance with that limit in IFS, IRS uses separate Funds designated by "Q" for these expenditures. The "Q" Fund is legally a subset of the current year appropriation, pointing to the same Treasury symbol. Financial Plan Managers must use the "Q" Funds for valid obligations received after the account is closed.

    Example:

    After 9/30/2011, the annual appropriation 06060912D will be closed.

    Example:

    Assume we received during FY 2011 an invoice for a valid obligation incurred against the FY 2004 annual Processing Assistance & Management (PAM) appropriation (0912). Since the account was closed and budget authority was canceled on 9/30/2009, the obligation would have to be made in the current year (FY 2011) against the closed-year Taxpayer Services "Q" fund account 11110912Q.

    Note:

    The Financial Plan Manager must promptly notify their Corporate Budget Unit Analyst about charges for closed year accounts. Corporate Budget must promptly move funds from the direct account (e.g., 11110912D) to the closed-year account (e.g., 11110912Q) to cover the expenditure (because the closed year account is a subset of the direct account, legally this is not an inter-appropriation transfer, although systemically it is handled as such).

  4. No-year funds: Occasionally the language for a specific appropriation of budget authority or the authorization of the appropriation may make all or some portion of the amount "available until expended." This is referred to as no-year budget authority. These accounts are designated by an ‘X’ in the account number, such as Treasury symbol 20X0913 (in IFS, 03XX0913D).

1.33.4.4.7  (08-28-2006)
Prior Year Funds Management

  1. When a Financial Plan Manager needs to realign prior year funds, the Financial Plan Manager will request the realignment, via e-mail to Corporate Budget. The e-mail request must include a full justification, all accounting strings needed, and amounts. Unless there is reason to deny the request, Corporate Budget will perform the adjustment in IFS and will respond via e-mail informing the Financial Plan Manager of the processed adjustment and the IFS transaction numbers.

1.33.4.4.8  (04-16-2010)
Responsibility for Pre-Restructuring Legacy Financial Plans

  1. Throughout FY 1999 and FY 2000, the IRS restructured into new divisions, principally aligned by customer segments. Prior versions of the Financial Operating Guidelines had a table designating which Financial Plans still retained responsibilities pertaining to legacy Financial Plans. Only the legacy plan BITE still has funds available, so MITS retains responsibility for that Financial Plan. These responsibilities include, but are not limited to, making determinations regarding deobligation of open obligations when appropriate, and assisting the Beckley Finance Center in obtaining receiving reports to support payment of bills for prior year obligations.

1.33.4.4.9  (01-15-2008)
Responsibility for Legacy Obligations of Mission Assurance and Security Services

  1. From FY 2003 to FY 2007, the Mission Assurance and Security Services (MA&SS) organization was managed within the Executive Leadership & Direction (NHQM) Financial Plan. Because MA&SS operated much like an independent Financial Plan, we must transfer responsibilities for legacy obligations of MA&SS to select Financial Plans. These responsibilities include, but are not limited to, making determinations regarding deobligation of open obligations when appropriate, and assisting the Beckley Finance Center in obtaining receiving reports to support payment of bills for prior year obligations. To assist research regarding old documents, current Financial Plan Manager responsibilities are represented on the following table:

    ASSIGNMENT OF RESPONSIBILITY FOR LEGACY OBLIGATIONS OF MISSION ASSURANCE AND SECURITY SERVICES (MA&SS)
    LEGACY MA&SS OFFICES FINANCIAL PLAN
    Legacy obligations of MA&SS IT Security
    (M901, M921, M961, M962, M964, M966, M967, M969)
    MITS
    ACTO Cyber Security
    Legacy obligations of MA&SS Safeguards
    (M931, M953)
    SB/SE
    Communications, Liaison, and Disclosure (CLD)
    Legacy obligations of MA&SS Physical Security and Emergency Preparedness
    (M941, M942, M943, M944, M945, M971, M974, M975, M976, M977)
    AWSS
    Physical Security and Emergency Preparedness (PSEP)
    Legacy obligations of MA&SS Treasury Homeland Security Presidential Directive-12
    (M952)
    AWSS
    Procurement (HSPD-12)
    Legacy obligations of MA&SS Personnel Security and Investigations (PS&I)
    (M922)
    HCO
    Personnel Security and Investigations (PSI)
    Legacy obligations of National Headquarters (NHQM) Offices M6*, M7* HCO
    Employment, Talent and Security
    Legacy obligations of MA&SS Office of Privacy, Identity Theft, and Incident Management
    (M951)
    Executive Leadership & Direction (NHQM)
    Office of Privacy, Information Protection, and Data Security (OPIPDS)

1.33.4.5  (01-15-2008)
COMPETITIVE SOURCING

  1. In the FY 2009 Omnibus Appropriation (P.L. 111-8), the Government-wide General Provisions section 737 prohibits new competitive sourcing studies: "None of the funds appropriated or otherwise made available by this or any other Act may be used to begin or announce a study or public-private competition regarding the conversion to contractor performance of any function performed by federal employees pursuant to Office of Management and Budget Circular A-76 or any other administrative regulation, directive, or policy."

  2. Current activities continue under OMB guidance, found in Circular A-76 (found on http://www.whitehouse.gov/omb/circulars_index-budget/). Financial Plan Managers must continue to track and record all costs relating to a competitive sourcing project, for all awarded periods of performance, for comparing against the baseline costs, and reporting to Treasury, OMB and Congress.

Exhibit 1.33.4-1 
Division Finance Officers and Financial Plan Managers

The Division Finance Officers (DFO) and Financial Plan Managers have funds control responsibility for their Financial Plans; see IRM 1.33.4.2.2, Funds Control Responsibility. This exhibit identifies the DFO and Financial Plan Manager by position title.

DIVISION FINANCE OFFICERS & FINANCIAL PLAN MANAGERS
Financial Plan Division Finance Officers Financial Plan Managers
Agency-Wide Shared Services (AWSP/STWD) Director, Strategy & Finance Associate Director, S&F AWSS Branch
Appeals (APPZ) Director S&F Director, Finance
Chief Communications & Liaison (CALC) Director, Finance & Education Director, Finance & Education
Chief Financial Officer (CFOB) Associate CFO, Corporate Budget Associate Director, Operations Support (Non-MITS)
Counsel (ATTY) Associate Chief Counsel (Finance & Management) Director, Planning & Finance
Criminal Investigation (CIDV) Director, Strategy Director, Finance
Executive Leadership & Direction (NHQM) Director, Strategy & Finance Associate Director, Operations Support (Non-MITS)
Human Capital Office (HCOH/HCCJ) Director, Finance Chief, Financial Management
Large Business & International Division
(formerly Large & Mid-Sized Business) (LMSB)
Director, Management & Finance Manager, Finance
Modernization & Information Technology Services (MITQ) Director, Financial Management Services Chief, Budget Execution
Small Business / Self-Employed (SBSE) Director, Strategy & Finance Chief, Financial Management
Tax Exempt & Government Entities (TEGE) Director, Finance Director, Finance
Taxpayer Advocate Service (TPAX) Director, Financial Operations Director, Financial Operations
Wage & Investment (WAGE/WISK) Director, Strategy & Finance Director, Finance
Other Corporate Plans (1111/0290) Associate CFO, Corporate Budget Director, Budget Execution

Exhibit 1.33.4-2 
Master Data (Code) Change Request Procedure

Corporate Budget is the main point of contact for requesting Master Data additions, changes, and deactivations. Funds Management Master Data includes Fund Centers, Cost Centers, Internal Orders, Functional Areas, and Commitment Items.

All requests are to be submitted to Corporate Budget using the appropriate request forms. The request forms are found on the Corporate Budget website, http://cfo.fin.irs.gov/SPB/CB_home.htm. Once the forms are completed, they are to be e-mailed to *CFO Master Data Request or CFO.MasterData.Request@irs.gov. The request will be reviewed and, if approved, an ITAMS ticket will be logged. The request will then be reviewed by the IFS Team for approval/disapproval based on systemic analysis. Upon approval or disapproval, the code will either be implemented in the system or an alternative recommendation may be made to the requesting Business Unit.

For reorganizations, the Business Unit should contact Corporate Budget as soon as senior management approves the initial reorganization proposal; see IRM 1.33.4.2.4.7, Reorganizations and Other Modifications Affecting Budget. Corporate Budget facilitates the establishment of financial codes associated with reorganizations. The Business Unit should meet with Corporate Budget to discuss the purpose of the reorganization, to compare the old structure to the proposed structure hierarchy, and to determine derivation rules. Once an agreement is made, Business Units should submit the appropriate request forms, along with an Organization Chart, to Corporate Budget at least 60 days prior to the anticipated effective date of the reorganization. Corporate Budget will coordinate with HR Connect representatives to ensure they receive accurate and complete information to implement financial codes in HR Connect.

Exhibit 1.33.4-3 
Selected Glossary

Accrued expenditure - an accounting transaction to record the receipt of goods or services without the issuance of cash, check, or Electronic Funds Transfer (EFT) at the end of an accounting period (e.g., the amount of unpaid payroll at the end of each month).

Apportionment - a distribution made by OMB of amounts available for obligation in an appropriation or Fund account into amounts available for specified time periods, program, activities, projects, objects, or any combinations of these. The apportioned amount limits the obligations that may be incurred. An apportionment may be further subdivided by an agency into allotments, sub-allotments, and allocations.

Appropriation - a provision of law (not necessarily in an appropriations act) authorizing the expenditure of funds for a given purpose. Usually, but not always, an appropriation provides budget authority. In IFS, an appropriation is represented by the "Fund" code.

Bona fide needs rule - the principle that appropriations made for a definite period of time may be used only for expenses properly incurred during that time. 31 USC §1502(a) (the bona fide needs statute) provides: "The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title. However, the appropriation or fund is not available for expenditure for a period beyond the period otherwise authorized by law."

Budget - the Budget of the United States Government, which sets forth the President's comprehensive financial plan and indicates the President's priorities for the federal government.

Budget authority - the authority provided by law to incur financial obligations that will result in outlays. Specific forms of budget authority include appropriations, borrowing authority, contract authority, and spending authority from offsetting collections.

Commitment - an administrative reservation of funds prior to obligation of funds. Typically, commitments are created by a purchase requisition.

Commitment Item - a data element in IFS used to classify expenses, at a level of detail by which funds are allocated in IRS. Commitment items are part of a hierarchy of expenses, lower than Object Class and higher than Cost Element.

Contract authority - authority to incur obligations in advance of an appropriation, offsetting collections, or receipts to make outlays to liquidate the obligations. Typically, Congress provides contract authority in an authorizing statute to allow you to incur obligations in anticipation of the collection of receipts or offsetting collections that will be used to liquidate the obligations.

Cost Center - a data element in IFS used to represent a clearly defined location where costs incur and to represent the lowest level in the organizational hierarchy, below Fund Center. Cost Center captures costs only, not revenue. Cost Centers are usually linked to Treasury Integrated Management Information System codes, but can also be established for nonlabor related areas.

Cost Element - a data element in IFS used to classify expenses. Cost Elements are part of a hierarchy of expenses, lower than Object Class and Commitment Item, and higher than Material Group. Cost Elements tie to General Ledger (GL) Accounts.

Division Finance Officer (DFO) - the person, often an executive, who has been delegated by their division commissioner or chief the ultimate responsibility for the funds control of their Financial Plan, as well as managing their Plan through all phases of the budget cycle. (See also, Financial Plan Manager.)

Direct support - support costs that can be reasonably identified and charged to a specific activity.

Disbursement - issuance of cash, checks, or EFT. An outlay.

Drown FTEs - (colloquial) to reduce FTE allocations, usually to bring FTEs and labor resources into balance.

Expenditure - a receipt of goods or services, usually accompanied by the issuance of cash, checks, or EFT to liquidate a valid obligation.

Fiscal Year (FY) - the federal government's accounting period. It begins on October 1, ends on September 30, and is designated by the calendar year in which it ends.

Financial Plan Manager (FPM) - the person who is responsible for day-to-day operations of monitoring and controlling a Financial Plan’s funds in the execution phase of the budget cycle. (See also, Division Finance Officer.)

Full-Time Equivalent (FTE) - the basic measure of the levels of employment used in the budget. It is the total number of regular straight-time hours (i.e., not including overtime or holiday hours) worked by employees divided by the number of compensable hours applicable to each fiscal year. Annual leave, sick leave, compensatory time off and other approved leave categories are considered "hours worked" for purposes of defining full-time equivalent employment.

Functional Area - a data element in IFS that represents an activity, such as Submission Processing.

Fund - a source of financing for federal agencies. Types of Funds are Revolving funds, Custodial funds, and direct or reimbursable appropriations. In IFS, the Fund field indicates the appropriation.

Fund Center - a data element in IFS used to subdivide budget expenses into organizational structures. Funds Centers represent areas of responsibility within an organization responsible for Funds Management. They are organized into a hierarchy.

Funds commitment - funds that are reserved in the IFS Funds Management module; for example, entering a purchase request creates a commitment; entering a requisition creates an obligation.

Funds reservation - a reservation or commitment of budgetary resources for anticipated but undefined expenses for an Internal Order; used to enter future costs that are expected to occur at an unknown time.

Indirect support - support costs that cannot be reasonably identified and charged to a specific activity, and will be charged to the predominantly benefiting Functional Area.

Integrated Financial System (IFS) - the administrative accounting system used by the IRS. IFS is composed of four modules – Funds Management (FM), Materials Management (MM), Financial Accounting (FI), and Controlling (CO). Key features of IFS include integrated modules covering many business functions, real-time data entry, online information, drill-down capability, enhanced reporting capability, and simplified research.

Internal Order - a data element in IFS to collect costs for a specific project and/or time range; they are typically short-term in nature. They collect actual and planned revenues and costs for management fees, assets, internal projects, and funds. These costs may be transferred to other cost receivers. Internal Orders are used to track revenue and expenses from programs and projects such as user fees, reimbursable agreements, and tax liens.

Material Group - a data element in IFS used to group materials and services according to their characteristics. The material group code points to the Federal Supply Code and Cost Element.

Object Class - classification of expense according to type as prescribed by OMB Circular A-11; such as personal services, travel, and equipment. This is traditionally a two-digit code (for example, OCs 11 and 25), however the OMB Object Class is now a more detailed three-digit code (for example, OCs 11.1, 11.3, 25.1, 25.2). (See also, Commitment Item and Cost Element.)

Obligated balance - the cumulative amount of budget authority that has been obligated but not yet outlayed. It is also known as unpaid obligations (which are made up of accounts payable and undelivered orders) net of accounts receivable and unfilled customers orders.

Obligation - a binding agreement that will result in outlays, immediately or in the future. Budgetary resources must be available before obligations can be legally incurred.

Operational Support Contracts - contracts that support IRS operations that are not assigned to another specific project code. Operational Support Contracts and similar Interagency Agreements are tracked by "K contracts." These Operational Support Contracts and Interagency Agreements cover a wide spectrum of procurement mechanisms including, but not limited to, simple and large purchases for Service & Supplies (S&S) and Equipment; formal contracts for S&S and Specialized Equipment; Interagency Agreements between the IRS and other federal/state/local governmental agencies; and other nonlabor expenditures.

Order Points - offices represented by their Order Point Number (OPN) in the Order and Subscription Management System (OSMS). Books, IRMs, and National Distribution Center (NDC) products are shipped to specified Order Points through the Internal Management Documents Distribution System (IMDDS). For more information, see http://spder.web.irs.gov or the Order & Subscription Management System, http://caps-as.enterprise.irs.gov/osms/app.

Outlay - a payment to liquidate an obligation (other than the repayment of debt principal).

Reimbursable obligation - an obligation financed by offsetting collections credited to an expenditure account in payment for goods and services provided by that account.

Reprogram - to shift allocated funds "within an appropriation or Fund account to use them for different purposes than those contemplated at the time of appropriation (for example, obligating budgetary resources for a different Object Class from the one originally planned). While a transfer of funds involves shifting funds from one (appropriation or fund) account to another, reprogramming involves shifting funds within an account." Reference GAO's A Glossary of Terms Used in the Federal Budget Process [emphasis added].

Rescission - a legislative action that permanently cancels new budget authority or the availability of unobligated balances of budget authority prior to the time the authority would otherwise have expired.

Top Node - a budget address in IFS at the highest level of a code hierarchy. For example, "IRS Top Node" means a budget address as follows: Fund Center = IRS, Commitment Item = ALLOBJ, and Functional Area = ALFA.

Training - as defined under the Government Employees Training Act, "training" must meet all of the following requirements: (a) the announced purpose of the training is educational or instructional; (b) more than half of the time is scheduled for an organized exchange of information between presenters and audience; (c) the content of the conference is relevant to improving individual/organizational performance; and (d) developmental benefits will be derived by attendance.

Transfer - to move budgetary resources from one appropriation account to another.

Unliquidated commitment - an administrative reservation of funds that has not yet become an obligation or otherwise been decommitted.

Unliquidated obligation - an obligation that has not been expended.

Unobligated balance - the cumulative amount of budget authority that is not obligated and that remains available for obligation under law.

User Fees - fees charged to users of goods or services provided by the government.

Working Capital Fund (WCF) - an intra-Departmental service operations fund operated by the Department of the Treasury. The WCF provides goods and services such as telecommunications, printing and reproduction, and equipment. Treasury bureaus make an advance payment prior to the receipt of goods, services or other assets.

Exhibit 1.33.4-4 
Selected Acronyms

A select list of acronyms are referenced for budget execution. To search a comprehensive list of IRS acronyms, see SPDER's ReferenceNet Acronym Database, http://rnet.web.irs.gov/km/AcronymsDB/commonacronyms.asp.

ACRONYMS
3YRF 3-Year Rolling Forecast
ADP Automated Data Processing
AWSS Agency-Wide Shared Services
BAC Budget Activity Code
BLI Budget Line Item category (expense classification)
BSM Business Systems Modernization
BU Business Unit
CFO Chief Financial Officer
CB Corporate Budget (OS:CFO:CB)
CR Continuing Resolution
CTO Chief Technology Officer (formerly CIO)
DFO Division Finance Officer
EITC Earned Income Tax Credit
FOG Financial Operating Guidelines
FPM Financial Plan Manager
FTE Full Time Equivalent
FTP Full Time Permanent
FY Fiscal Year
GAO Government Accountability Office
GSA General Services Administration
HCO Human Capital Office
IFM Internal Financial Management (OS:CFO:IFM)
IFS Integrated Financial System
IS Information Services
MITS Modernization & Information Technology Services
OMB Office of Management & Budget
OPM Office of Personnel Management
OTFTP Other Than Full-Time Permanent
ROG Reimbursable Operating Guidelines, IRM 1.33.3
RWA Reimbursable Work Authorization
SF Standard Form
SOI Statistics of Income
SWA Security Work Authorization
VSIP Voluntary Separation Incentive Pay
WCF Working Capital Fund

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