1.35.15  Annual Close Guidelines

Manual Transmittal

July 20, 2015

Purpose

(1) This transmits revised IRM 1.35.15, Financial Accounting, Annual Close Guidelines.

Material Changes

(1) IRM 1.35.15.1, Overview, updated to specify the type of year-end process.

(2) IRM 1.35.15.2, Background, updated to specify the type of audit opinion and to include revenue accounting information.

(3) IRM 1.35.15.3, Authorities, removed reference to Information Technology Management Reform Act of 1996, Public Law 104-106, because it was not relevant to IRM content and updated title of Federal Information Security Management Act, Public Law 107-347; to E-Government Act of 2002.

(4) IRM 1.35.15.4, Related Resources, updated reference to OMB Circular No. A-127, Financial Management Systems, because it has been rescinded and moved to Appendix D to OMB Circular No. 123, Compliance with the Federal Financial Management Improvement Act of 1996; updated reference of IRM 1.32.6, Purchase Card Program Handbook, to IRM 1.35.4, Purchase Card Program; and added references to IRM 3.17.63, Redesigned Revenue Accounting Control System and IRM 3.17.64, Accounting Control General Ledger Policies and Procedures.

(5) IRM 1.35.15.5, Definitions, added definitions for Integrated Financial System (IFS) and Redesigned Revenue Accounting Control System (RRACS), and updated definition for Non-Procurement Action.

(6) IRM 1.35.15.6, Acronyms, updated chart to add Bureau of the Fiscal Service, Redesigned Revenue Accounting Control System (RRACS), and replaced Federal Agencies' Centralized Trial Balance System (FACTS) with Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS).

(7) IRM 1.35.15.7, Responsibilities, updated Chief Financial Officer (CFO) office names and added and updated office responsibilities.

(8) IRM 135.15.8.1(1)(2), Midyear/Spend Plan Review, updated to reflect current purpose of Midyear/Spend Plan review.

(9) IRM 1.35.15.8.2 (1)(2), Current Year Targets and Approvals, updated to reflect current process.

(10) IRM 1.35.15.9, Recording Financial Transactions, updated type of transaction and specified time zone.

(11) IRM 1.35.15.10, Obligations, moved information relating to year-end payroll accrual to IRM 1.35.15.18.4, Year-end Payroll Accruals.

(12) IRM 1.35.15.10.1.1, Purchase Cards, updated to reflect current process.

(13) IRM 1.35.15.10.2.1(2), Miscellaneous Programs, added Treasury Franchise Fund to list of programs that use Form 2785, Requisition/Obligations Estimate Adjustment Notice.

(14) IRM 1.35.15.10.2.1(3), Miscellaneous Programs, added Federal Telecommunication Services (FTS) to list of programs that use Form 2785, Requisition/Obligations Estimate Adjustment Notice, and removed Furniture Fedstrips, because it is no longer used.

(15) IRM 1.35.15.10.4, Treasury Executive Office Asset Forfeiture Funds, added to include Treasury Executive Office Asset Forfeiture Funds information.

(16) IRM 1.35.15.14(2), Reimbursable Agreements, updated to reflect current categories of reimbursable agreements.

(17) IRM 1.35.15.15.6, Earned Income Tax Credit, updated office name from Return Integrity and Correspondence Services to Return Integrity and Compliance Services.

(18) IRM 1.35.15.15.7(3), Payroll, updated to reflect current process.

(19) IRM 1.35.15.15.8.3(2), Accounting Code Change at Payment Level, updated to reflect current process.

(20) IRM 1.35.15.15.9, Travel and Relocation, updated email address from *CFO BFC Travel Authorizations and Accounting Codes to *CFO BFC Travel Authorizations and Accting Codes.

(21) IRM 1.35.15.15.9.2(4), Errors Found for Open Obligations and Fully Expensed Obligations, updated to reflect current process.

(22) IRM 1.35.15.17, Canceling Appropriations, updated to reflect current process.

(23) IRM 1.35.15.18.1(3), Major Contract Accruals, updated to reflect current accrual process.

(24) IRM 1.35.15.18.2(1), Specifically-Identified Accruals, updated chart to delete Treasury Franchise Fund, since it is no longer an accrual.

(25) IRM 1.35.15.18.4(2), Year-end Payroll Accruals, updated to add additional information related to year-end accrual.

(26) IRM 1.35.15.19(1), Other Entries, updated report name from Asset Forfeiture Report to Asset Forfeiture Tracking and Retrieval System Report.

(27) IRM 1.35.15.20, Mock Systems Testing, updated to reflect current Mocks 1,2, and 3 processes.

(28) IRM 1.35.15.24 (2), Reports and Certifications to Treasury, updated chart to remove FACTS I, FACTS II, and Financial Management Service (FMS) 2108 and to add Governmentwide Treasury Account Symbol (GTAS) and Central Accounting Reporting System (CARS). Also updated FMS 224 to Bureau of the Fiscal Service, Classification Transactions and Accountability (CTA), Section 1, Statement of Transactions.

(29) IRM 1.35.15.25, Financial Statements, updated name of financial reports, CFO office names, and current process.

(30) This revision includes changes throughout the document for the following:

  1. Updated the Chief Financial Officer office names.

  2. Updated to reflect change in system from GovTrip to Concur.

  3. Updated Financial Management Service to Bureau of the Fiscal Service.

  4. Updated Financial Management Service (FMS) 224 to Bureau of the Fiscal Service Classification Transactions and Accountability (CTA), Section 1, Statement of Transactions.

  5. Updated to reflect change to the program name and process from Working Capital Fund to Treasury Franchise Fund.

  6. Updated to reflect change in system from Federal Agencies' Centralized Trial Balance System (FACTS) I and II to Governmentwide Treasury Account Symbol (GTAS).

  7. Updated reference to IRM 1.32.6, Purchase Card Program Handbook, to IRM 1.35.4, Purchase Card Program.

  8. Updated Year-end Memorandum to FM Year-end Close Guidance.

  9. Added minor editorial changes.

Effect on Other Documents

IRM 1.35.15, dated June 18, 2013, is superseded.

Audience

All Operating Divisions and Functions.

Effective Date

(07-20-2015)

Robin L. Canady
Chief Financial Officer

1.35.15.1  (07-20-2015)
Overview

  1. This Internal Revenue Manual (IRM) contains the Annual Close Guidelines to assist business units and operating divisions through the fiscal year-end closing process.

  2. The Chief Financial Officer (CFO), Financial Management (FM) Unit, Financial Management Policy Office, develops and maintains this IRM.

1.35.15.2  (07-20-2015)
Background

  1. These guidelines provide the policies and procedures for the Internal Revenue Service (IRS) annual fiscal year-end close. While the CFO is responsible for producing auditable financial statements, a successful annual close and an unmodified audit opinion depend upon the actions of all managers and staff throughout the year.

  2. In order for the IRS administrative financial statements to be materially accurate and fairly state the IRS assets, liabilities, net position, net costs, changes in net position, and budgetary resources as of and for the fiscal year ended on September 30, they need to reflect all income earned and expenses incurred for the applicable fiscal years. The Integrated Financial System (IFS) is designed to capture transactional data, which is then accumulated into the financial statements. Transactions that are not captured in IFS must be accounted for manually through accruals and year-end closing adjustments.

  3. Supplementing these guidelines is the FM Year-end Close Guidance, with attachments, issued each year. The following attachments provide guidance specific to the year-end process:

    1. Year-end Travel Cutoff Dates.

    2. FY 20XX Year-end Responsibilities and Cutoff Dates.

    3. Closing of Budget Fiscal Year 20XX Appropriations.

  4. The FM Year-end Close Guidance and attachments are available on the CFO website.

  5. The Redesigned Revenue Accounting Control System (RRACS) records and reports all revenue accounting transactions and financial data processed from all IRS automated and manual tax systems. RRACS tracks financial data from receipt of the tax return to payment of outstanding taxes or refund issuance. Other financial data is recorded such as photocopy fees and installment agreement user fees. Data is entered into the system primarily at the Submission Processing Centers. The database is maintained at the Detroit Computing Center and consists of general ledger accounts and a variety of internal records used for balancing and reporting. Information detailing the revenue accounting closing processes can be found in IRM 3.17.63, Redesigned Revenue Accounting Control System and IRM 3.17.64, Accounting Control General Ledger Policies and Procedures.

1.35.15.3  (07-20-2015)
Authorities

  1. Chief Financial Officers Act of 1990, Pub. L. No. 101-576.

  2. Federal Managers’ Financial Integrity Act of 1982 (FMFIA), Pub. L. No. 97-255.

  3. Government Management Reform Act of 1994 (GMRA), Pub. L. No. 103-356.

  4. Federal Financial Management Improvement Act of 1996 (FFMIA), Pub. L. No. 104-208.

  5. Government Performance and Results Act of 1993 (GPRA), Pub. L. No. 103-62.

  6. Accountability of Tax Dollars Act of 2002 (ATDA), Pub. L. No. 107-289.

  7. E-Government Act of 2002 (FISMA), Pub. L. No. 107-347.

1.35.15.4  (07-20-2015)
Related Resources

  1. Office of Management and Budget (OMB) Circular No. A-11, Preparation, Submission and Execution of the Budget.

  2. OMB Circular A-123, Management's Responsibility for Internal Control.

  3. Appendix D to OMB Circular No. 123, Compliance with the Federal Financial Management Improvement Act of 1996.

  4. OMB Circular A-134, Financial Accounting Principles and Standards.

  5. OMB Circular No. A-136, Financial Reporting Requirements.

  6. Federal Accounting Standards Advisory Board (FASAB) Statements of Federal Accounting Concepts and Standards.

  7. Government Accountability Office's (GAO) Principles of Federal Appropriations Law(Red Book).

  8. IRM 1.33.3, Reimbursable Operating Guidelines.

  9. IRM 1.33.4, Financial Operating Guidelines.

  10. IRM 1.35.4, Purchase Card Program.

  11. IRS Financial Management Codes Handbook.

  12. IRM 3.17.63, Redesigned Revenue Accounting Control System.

  13. IRM 3.17.64, Accounting Control General Ledger Policies and Procedures.

1.35.15.5  (07-20-2015)
Definitions

  1. In these guidelines, the terms below have the following meanings:

    1. Acceptance - Acknowledgment by an authorized Government official that goods received and/or services rendered conform to the contract requirements.

    2. Accounts Payable - A liability to pay an organization or entity for goods and/or services that the IRS has received and accepted.

    3. Accounting Period - A length of time, usually a month, in which transactions are posted into IFS. The IRS defines its accounting periods to correspond to a fiscal month and a fiscal year. For example, accounting period 01 corresponds to October of the fiscal year and accounting period 12 corresponds to September of the fiscal year.

    4. Accrued Expense - An expense incurred for which the goods and/or services have been consumed but receipt has not been recorded.

    5. Budget Fiscal Year - A fiscal year for which Congress authorized and appropriated funds.

    6. Capital Asset - An asset including land, structures, equipment, and intellectual property (including software) that has an estimated useful life of greater than two years.

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

    8. Financial Plan - A statement of intent to consume resources needed for accomplishing a mission during a period, typically a fiscal year. In addition to stating the resources to be consumed, the plan also states any available supplemental resources, such as user fees or reimbursements, to be used.

    9. Financial Plan Manager (FPM) - The official responsible for day-to-day operations of monitoring and controlling a Financial Plan’s funds in the execution phase of the budget cycle.

    10. Integrated Financial System (IFS) - The IRS official administrative financial management system.

    11. Non-Procurement Action - An action not requiring a contract signed by a warranted contracting officer. In this type of action, the desired goods and/or services are acquired via other means. For example, an authorized purchase cardholder may procure goods whose cost is less than the micro-purchase threshold. Other means of non-procurement action include a reimbursable work authorization (RWA), security work authorization (SWA), Standard Form (SF) 182, Authorization, Agreement and Certification of Training, or Form 2785, Requisition/Obligation Estimate Adjustment Notice.

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

    13. Receipt - An acknowledgment that the Government received the goods and/or services.

    14. Redesigned Revenue Accounting Control System (RRACS) - The IRS automated system used to provide accounting control for all revenue accounting transactions.

    15. Separation of Duties - A key internal control concept under which no single individual has complete control over a financial transaction from beginning to end. Examples include separating the responsibility for receiving checks from posting them in a financial system; making purchases with the purchase card, approving purchases and paying the vendor; and entering an obligation and recording the receipt and acceptance of goods and/or services received under that obligation.

    16. Spend Plan - A statement of intent to use both labor and non-labor resources, supplemented with an explanation of expected anomalies and funding challenges; an analysis, by age, of unliquidated commitments and obligations pending final action; proposed budget realignments; and a confirmation of spending, by budget activity category (BAC), using both "multi-year" and "no-year" funds.

    17. Travel Authorization - An electronic or written document submitted for approval to authorize official travel.

    18. Travel Obligation - An obligation resulting from a travel authorization. However, unlike other obligations, the Government is not bound to complete the acquisition. Funds are reserved for the purpose of the prescribed trip.

    19. Undelivered Order - An order for which the goods and/or services have not been received.

    20. Unliquidated Obligation - An obligation for which a portion or all of the goods and/or services have yet to be received.

1.35.15.6  (07-20-2015)
Acronyms

  1. The following chart contains acronyms that are used throughout this IRM.

    ACRONYM DESCRIPTION
    AINFC Automated Interface to the National Finance Center
    AUC Aging Unliquidated Commitments
    AUO Aging Unliquidated Obligations
    AWSS Agency-Wide Shared Services
    BFC Beckley Finance Center
    CARS Central Accounting Reporting System
    CLIN Contract Line Item Number
    EITC Earned Income Tax Credit
    FASAB Federal Accounting Standards Advisory Board
    FBWT Fund Balance with Treasury
    Fiscal Service Bureau of the Fiscal Service
    FM Financial Management
    FPM Financial Plan Manager
    GAO Government Accountability Office
    GLAC General Ledger Account
    GRAS Government Relocation Accounting System
    GTAS Governmentwide Treasury Account Symbol Adjusted Trial Balance System
    IFS Integrated Financial System
    IPAC Intra-governmental Payment and Collection
    IPS Integrated Procurement System
    NFC National Finance Center
    RRACS Redesigned Revenue Accounting Control System
    SGL Standard General Ledger
    SNC Statement of Net Cost
    TEP Transaction by Eliminations
    TIER Treasury Information Executive Repository

1.35.15.7  (07-20-2015)
Responsibilities

  1. This section provides responsibilities for:

    1. Chief Financial Officer.

    2. Associate Chief Financial Officer for Financial Management.

    3. Director, Beckley Finance Center.

    4. Director, Financial Management Policy Office.

    5. Director, Financial Reports Office.

    6. Director, Financial Management Systems Office.

    7. Deputy Associate Chief Financial Officer for Financial Management.

    8. Director, Revenue Oversight and Support Office.

    9. Director, Revenue Accounting Office.

    10. Associate Chief Financial Officer for Corporate Budget.

    11. Director, Office of Procurement, Agency-Wide Shared Services.

    12. Division Finance Officers.

    13. Business Unit Year-end Coordinator.

1.35.15.7.1  (07-20-2015)
Chief Financial Officer

  1. The Chief Financial Officer (CFO) is responsible for:

    1. Ensuring that the IRS financial statements are materially accurate and fairly state the IRS assets, liabilities, net position, net costs, changes in net position, budgetary resources, and custodial activity as of and for the fiscal year ending September 30.

    2. Overseeing policies, procedures, standards, and controls for IRS financial processes and systems.

    3. Preparing financial reports for external stakeholders.

1.35.15.7.2  (07-20-2015)
Associate Chief Financial Officer for Financial Management

  1. The Associate Chief Financial Officer (ACFO) for Financial Management (FM) is responsible for:

    1. Ensuring IRS compliance with administrative financial reporting requirements, including preparation of the annual financial statements.

    2. Preparing and issuing revenue (custodial) financial statements/information.

    3. Ensuring proper financial management and reporting of the custodial assets received by the IRS and reported to Treasury and other Federal agencies.

    4. Coordinating the annual financial statement audit with GAO.

    5. Accounting for all tax revenue receipt/refund activities and managing/reporting unpaid assessments (taxes receivable).

    6. Establishing and maintaining accounting policy and procedures for internal accounting operations and financial reporting.

    7. Establishing accounting and financial management processes and procedures for business units and offices. These processes and procedures support the compilation of the quarterly and annual financial statements.

    8. Directly managing the quarterly and annual financial statements.

    9. Consolidating the annual financial statements for both administrative and custodial accounts.

    10. Issuing detailed year-end close guidelines and deadlines.

1.35.15.7.3  (07-20-2015)
Director, Beckley Finance Center

  1. The Director, Beckley Finance Center (BFC), is responsible for:

    1. Coordinating fiscal and calendar year-end activities for BFC.

    2. Managing the transactional close process, including developing specific guidelines and procedures to be followed by the business units in preparation for the annual close.

    3. Hosting year-end conference calls with business units to discuss tasks, issues, and timelines for the year-end close.

    4. Preparing the year-end calendar to communicate the timing of tasks to be performed by the business units.

    5. Processing and recording transactions including, but not limited to, those related to travel, accounts payable, reimbursable projects, interagency agreements, and deobligation requests.

    6. Reviewing transaction activity and related error diagnostic messages, including those pertaining to obligation reversals, receivables, payment reversals, advances, invoices, and interagency payment activity.

    7. Providing guidance and assistance to business units for review of unliquidated commitments and obligations and for reviewing the business units’ submissions of the analyzed transactions.

    8. Preparing analytical and/or accrual work papers in support of general ledger balances including the proposal of accruals, account adjustments, or reclassifications, as necessary.

    9. Preparing reports for both internal and external use, to include, but not limited to, the Bureau of the Fiscal Service, Classification Transactions and Accountability (CTA), Section I, Statement of Transactions; the Prompt Payment Report; and the Treasury Report on Receivables.

    10. Producing and reconciling the Statement of Net Cost (SNC).

1.35.15.7.4  (07-20-2015)
Director, Financial Management Policy Office

  1. The Director, Financial Management Policy Office (FMP), is responsible for:

    1. Publishing the annual close requirements and deadlines.

    2. Providing clarifying guidance and assistance on accounting policy matters.

    3. Assisting managers and other employees in interpreting and applying policies.

1.35.15.7.5  (07-20-2015)
Director, Financial Reports Office

  1. The Director, Financial Reports Office (FR), is responsible for:

    1. Preparing the IRS quarterly and annual financial statements and monthly trial balances for administrative accounts.

    2. Consolidating the annual financial statements for administrative and revenue accounts; including notes to the financial statements, other information, and required supplementary information.

    3. Preparing and recording entries for contingent liabilities.

    4. Establishing accrual methodology for payroll and non-payroll expenses.

    5. Preparing analytical and/or accrual work papers in support of general ledger balances including the proposal of accruals, account adjustments, or reclassifications, as necessary.

    6. Reviewing and approving all work papers and/or analysis developed in support of administrative general ledger balances, as well as related entries.

    7. Coordinating and monitoring the clearance of accounts for canceling appropriations.

    8. Working with Corporate Budget and Procurement to monitor achievement of the IRS-wide goal of 92% of non-labor budget obligated by the end of August.

    9. Performing the final review of the SNC, including the allocation of costs and exchange revenue, as prepared by the Financial Management Systems Office.

    10. Preparing, analyzing, reviewing, and submitting annual, quarterly, and monthly financial reports and certifications to Treasury, including, but not limited to, Treasury Information Executive Repository (TIER) and Agency Financial Report (AFR) deliverables.

    11. Managing year-end system access and postings through controlling the opening and closing of adjustment periods.

    12. Facilitating the reporting of financial data to the Federal Highway Administration.

    13. Facilitating the reporting of financial data to the Department of Health and Human Services (DHHS) for the Affordable Care Administration (ACA) fund.

    14. Preparing, reviewing, and submitting provided by the client (PBC) deliverables to the Government Accountability Office (GAO) in support of the financial statement audit.

    15. Preparing, reviewing, and submitting OMB Circular A-123 PBC deliverables to Corporate Planning and Internal Control.

    16. Posting year-end canceling fund adjustments in the Central Accounting Reporting System (CARS) to officially close the canceling funds.

    17. Confirming year-end closing balances in CARS.

    18. Certifying year-end balances in the Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS).

1.35.15.7.6  (07-20-2015)
Director, Financial Management Systems Office

  1. The Director, Financial Management Systems Office (FMS), is responsible for:

    1. Documenting and communicating detailed daily system processing schedules.

    2. Processing payroll and related accruals and transactions in accordance with IRS policies and procedures.

    3. Developing, defining, implementing, and maintaining a financial system project plan for the annual close.

    4. Developing, maintaining, and executing the annual system closeout and new year system reset process.

    5. Ensuring all accounts properly close with no negative balances at year-end.

    6. Conducting mock systems testing to ensure the proper closing of all accounts.

    7. Running and reconciling the cost allocation cycles.

    8. Producing and reconciling the SNC.

1.35.15.7.7  (07-20-2015)
Deputy Associate Chief Financial Officer for Financial Management

  1. The Deputy ACFO for FM is responsible for:

    1. Accounting for all tax revenue receipt/refund activities and managing/reporting unpaid assessments (tax receivable).

    2. Preparing custodial financial statement/information.

    3. Ensuring proper financial management and reporting of the custodial assets received by the IRS and reported to Treasury and other Federal agencies.

    4. Establishing and maintaining custodial accounting policies and procedures.

1.35.15.7.8  (07-20-2015)
Director, Revenue Oversight and Support Office

  1. The Director, Revenue Oversight and Support Office, is responsible for establishing policies and procedures related to segmenting the inventory of unpaid assessments for financial and performance reporting, and overseeing the certification of excise tax refunds and trust funds.

1.35.15.7.9  (07-20-2015)
Director, Revenue Accounting Office

  1. The Director, Revenue Accounting Office (RA), is responsible for:

    1. Preparing the Statement of Custodial Activity, the custodial portion of the Balance Sheet, associated notes, required supplementary information, other information, and information for the Management's Discussion and Analysis.

    2. Providing guidance, policies, procedures, and coordinating the necessary steps to properly report and perform the audit of tax revenue and refunds for the IRS.

    3. Issuing procedures and directives to support financial reporting activities.

    4. Preparing, analyzing, reviewing, and delivering monthly and quarterly financial reports to Treasury and OMB.

1.35.15.7.10  (07-20-2015)
Associate Chief Financial Officer for Corporate Budget

  1. The Associate Chief Financial Officer (ACFO) for Corporate Budget (CB) is responsible for:

    1. Coordinating year-end close issues with FM and the Office of Procurement, developing and issuing guidance, and monitoring and controlling spending.

    2. Issuing budget guidance to the business units, such as guidance relevant to the year-end process.

    3. Monitoring and tracking reimbursable earnings and assisting with year-end closing of reimbursable projects.

    4. Interpreting Office of Management and Budget (OMB) budgetary and financial reporting changes for the coming fiscal year into system requirements.

    5. Providing FM with documentation of year-end adjustments to appropriated authority, reimbursements, and user fees (for example, SF 1151, Nonexpenditure Transfer Authorization, and SF 132, Apportionment and Reapportionment Schedule).

    6. Determining the amount of Federal Highway unobligated authority and undisbursed cash to be withdrawn by the Federal Highway Administration.

    7. Coordinating with Procurement to develop a joint memo that sets out third and fourth quarter commitment and obligation goals for business units for the fiscal year.

    8. Working simultaneously with Procurement and FM to monitor and maintain oversight of business unit and IRS-wide commitment and obligation statuses to ensure compliance with the goals of 100% of procurement actions committed by July 31, 92% of non-labor budget obligated by August 31 (91% for labor), and 99.7 % of expiring budget obligated by September 30.

    9. Reviewing the year-end canceling fund adjustments posted by the Financial Reports Office in CARS to officially close the canceling funds and ensure the canceled budget authority is correct.

1.35.15.7.11  (07-20-2015)
Director, Office of Procurement, Agency-Wide Shared Services

  1. The Director, Office of Procurement, Agency-Wide Shared Services (AWSS), is responsible for:

    1. Issuing an information transmittal on annual acquisition planning dates.

    2. Issuing deadlines, in conjunction with the CFO, for submitting requisitions that allow ample time for the annual close.

    3. Issuing advance payment authorization to cover the year-end blackout period.

    4. Administrating reviews, providing guidance, monitoring, and tracking of open awards with liquidation of balances deemed to no longer be valid.

    5. Awarding actionable requests received through the Integrated Procurement System (IPS) to support the obligation goal to have 92% of all expiring non-labor funds and 91% of all expiring labor funds obligated by August 31.

    6. Reviewing, approving, or rejecting requests for September obligations that exceed the established threshold.

    7. Providing staff, support, and system availability for interfaced transactions, through the last interface on September 30.

1.35.15.7.12  (07-26-2011)
Division Finance Officers

  1. The Division Finance Officers (DFOs) and their business units are responsible for:

    1. Managing their funds in accordance with sound, prudent, and lawful financial management practices.

    2. Establishing and monitoring annual financial plans.

    3. Designating business unit year-end coordinators.

    4. Developing year-end action plans that identify tasks specific to the business unit, along with assigning due dates, and designating responsible parties.

    5. Establishing procedures and enforcing compliance to ensure the validity and appropriateness of commitments and obligations. These procedures shall ensure that: commitments and obligations are accurate and properly documented; any invalid commitments and obligations are promptly liquidated; and, the unliquidated commitment and obligation reviews are completed and submitted in accordance with requirements.

    6. Attesting, on behalf of their management, to the accuracy of open commitments and obligations at year-end.

    7. Submitting estimated obligations to FM.

    8. Submitting all required documents to FM, including, but not limited to, invoices, telephone bills, labor adjustments/estimates, and investigative advances reports.

    9. Performing all appropriate actions related to reimbursable agreements.

    10. Complying with all prescribed year-end close deadlines.

1.35.15.7.13  (07-26-2011)
Business Unit Year-end Coordinators

  1. The business unit year-end coordinators are responsible for assisting the DFOs in the tasks stated above and participating in year-end conference calls.

1.35.15.8  (07-26-2011)
Spend Plan

  1. Each business unit, under the direction of the Financial Plan Manager, prepares a spend plan. This plan enables management to monitor its actual financial performance in relation to its spend plan.

1.35.15.8.1  (07-20-2015)
Midyear/Spend Plan Review

  1. After the close of the second quarter, CB conducts a Midyear/Spend Plan Review with each business unit to assess the financial position of the organization for internal and external stakeholders. This Midyear/Spend Plan Review process is an opportunity for business units to review financial performance for the October through March timeframe and to evaluate the April through September projections. This review ensures that the business unit is spending at a rate that will achieve the final spending targets.

  2. The Midyear/Spend Plan Review:

    1. Evaluates the status of spending to ensure timely obligation of funds, per CFO and Procurement guidance.

    2. Identifies potential unfunded needs and surpluses.

    3. Identifies potential base shortfalls that can be corrected in the multiyear planning process.

    4. Promotes timely posting of reimbursables.

    5. Provides necessary information for the Department of the Treasury (Treasury) Midyear Review.

    6. Finalizes the spend plans.

  3. After a complete analysis of the spend plans, the business unit and/or CB adjusts the plans as necessary.

  4. Business units are required to meet commitment and obligation targets established jointly by the CFO and Procurement. Each business unit must record requisitions and the resulting obligations timely in IFS and follow the approved spend plan.

  5. Additional information on managing spend plans, including realigning funds, is provided in IRM 1.33.4, Financial Operating Guidelines.

1.35.15.8.2  (07-20-2015)
Current Year Targets

  1. The IRS should have 100% of procurement actions committed by July 31, 92% of non-labor budget obligated by August 31 (91% for labor), and 99.7% of expiring budget obligated by September 30. The Office of Procurement, in conjunction with Corporate Budget, is responsible for communicating these targets, tracking target progress, and reporting target results. The IRS should have 92% of all expiring non-labor funds and 91% of all expiring labor funds obligated by August 31, based on year-end obligations. Obligations can be recorded or modified through September 30 of each fiscal year.

  2. The Office of Procurement is responsible for reviewing, certifying, and managing targeted open obligation balances to pursue further reductions in open obligations by fiscal year-end and to validate those that remain. The Aging Unliquidated Commitments (AUC) reports generated by BFC assist in this process.

1.35.15.9  (07-20-2015)
Recording Financial Transactions

  1. Correctly recording all actual and estimated fiscal year financial transactions ensures that the IRS presents its financial statements fairly in all material respects, and that its financial statements are in conformity with United States generally accepted accounting principles. This includes:

    1. Posting all obligations timely and accurately. The authority to incur obligations for a fiscal year (except for "no-year" funds and "multi-year" funds with at least one year remaining) expires at midnight, Eastern Daylight Time (EDT), on September 30.

    2. Recording the receipt and acceptance of goods and/or services promptly.

    3. Processing pending invoices where receipt and acceptance has been recorded.

    4. Estimating accruals to ensure that the IRS recognizes unpaid expenses.

    5. Closing out accounts properly to ensure that account balances are correct.

  2. These activities are discussed below and also in the references provided in IRM 1.35.15.2(3), Background.

1.35.15.10  (07-20-2015)
Obligations

  1. IFS records obligations through the following interfaces and manual entries:

    1. Automated interface between IPS and IFS. In these cases, the business unit has entered a commitment, and the commitment or the subsequent obligation has passed into IFS via the interface.

    2. Manual entry directly into IFS. In this case, the commitment is not automatically recorded in IPS.

    3. Automated interface between Concur and IFS or the Government Relocation and Accounting System (GRAS) and IFS. IFS performs these interfaces daily. This applies to travel and relocation-related transactions only.

1.35.15.10.1  (07-26-2011)
Integrated Procurement System

  1. To ensure that obligations posted in the Integrated Procurement System (IPS) are recorded in IFS at the close of the fiscal year, FM institutes special IPS and IFS interface transmissions. Information pertaining to requisitions and obligations stored in IPS is transmitted daily, on workdays, to IFS. On September 30, or the last working day in the fiscal year should September 30 fall on the weekend, five transmissions from IPS to IFS occur, generally at 10:00 a.m., 1:00 p.m., 3:00 p.m., 6:00 p.m., and 9:00 p.m., EDT.

1.35.15.10.1.1  (07-20-2015)
Purchase Cards

  1. An approved and funded IPS requisition is required in advance of each purchase made with a purchase card. Once the business unit enters and approves the requisition, the FPM "funds" it before the requisition is transmitted to IFS to establish the commitment.

  2. Business units must log purchases into the Purchase Card Module and reference the appropriate requisition by close of business on September 30 to establish payment authority. Only those purchases recorded in order logs remain open as commitments in the Purchase Card Module after September 30. All other commitments established in IFS are reversed.

  3. After October 1, IFS uses the accounting string information from the unliquidated purchase card module transactions for the preceding fiscal year for the obligation and payment.

  4. Additional information on purchase cards can be found in IRM 1.35.4, Purchase Card Program.

1.35.15.10.2  (07-26-2011)
Manually-Entered Obligations

  1. This section provides year-end information specific to unique programs that require manual entry.

1.35.15.10.2.1  (07-20-2015)
Miscellaneous Programs

  1. Due to the need to develop more precise estimates of account balances as of September 30, FM needs additional time to review manual entry transactions for completeness and to exercise quality control measures at year-end. To ensure ample review time at year-end, FM prescribes earlier than usual cutoff dates for submitting documents. These cutoff dates are issued in the FM Year-end Close Guidance.

  2. For the programs listed in the chart below, the business unit enters the commitment in IPS and is required to monitor commitment amounts to ensure that they are sufficient to cover anticipated needs through the fiscal year-end. FM manually records the obligation in IFS, using the associated documentation listed below. The business unit uses this same documentation to transmit any changes in the obligation amount.

    Program or Activity Documentation
    Administrative Summons Form 2785, Requisition/Obligation Estimate Adjustment Notice
    Attorney Fees
    Disclosure of Information - Administrative Claims
    Foreign Service
    Government Bills of Lading/Internal Revenue Bills of Lading
    Government Printing Office
    Motor Pool
    Sales/Seizures
    Settlement Agreements
    Tax Lien Fees
    Telephones
    Treasury Franchise Fund
    Imprest Fund for Investigative Purposes Form 2785, Requisition/Obligation Estimate Adjustment Notice or Reconciliation Purchase Worksheet
    Security Work Authorizations Federal Protective Service (FPS) 57(T), Security Work Authorization
    Reimbursable Work Authorizations General Services Administration (GSA) Form 2957, Reimbursable Work Authorization
    Personal Property Claims PG 1334 Worksheet (printout from IPS)
    Representation Fund
    Torts
    Training (no credit cards or convenience checks) SF 182, Authorization, Agreement and Certification of Training
  3. For the programs listed in the chart below, there is no commitment recorded in IPS to draw down funds in IFS. FM must manually record the obligation using the forms listed below. The business unit uses these same forms to transmit changes in the obligation amount.

    Program or Activity Documentation
    Foreign Service *Form 2785, Requisition/Obligation Estimate Adjustment Notice
    Consolidated American Payroll Processing System (CAPPS)
    GSA Autos
    Postage
    Rent
    Unemployment Compensation for Federal Employees (UCFE)
    Federal Telecommunication Services (FTS)
    Federal Tax Lien Revolving Fund (FTLRF) *Memo request

    Note:

    *Funds are obligated from the accounting string.

1.35.15.10.2.2  (07-26-2011)
Blanket Purchase Agreements

  1. The Blanket Purchase Agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies and services by establishing "charge accounts" with qualified sources. The BPAs are normally limited to local business establishments from which numerous individual purchases will likely be made during a specified time period.

  2. During a BPA period of performance, each IRS employee who is authorized to place calls against the BPA maintains a call log to record each service request and the dollar amount. Depending upon business unit procedures, the authorized caller either references the call to a bulk-funded commitment or records a commitment in IPS corresponding to the dollar value of each call. At the end of a month, the authorized caller must submit a copy of the funded call log to FM to record the obligation in IFS.

  3. FM establishes special procedures for the submission of the call logs annually. These procedures generally require authorized callers to submit interim call logs in August, with projections for anticipated calls through the end of the fiscal year. FM publishes the specific dates in the FM Year-end Close Guidance.

1.35.15.10.3  (07-26-2011)
Travel and Relocation

  1. Travel obligations represent travel that has been authorized, but not yet vouchered. Therefore, it is especially important that travelers:

    1. Enter or request new authorizations for travel that will be taken before the end of the fiscal year so these dollar amounts can be obligated.

    2. File vouchers timely so unneeded travel amounts can be deobligated.

  2. FM publishes year-end deadlines for the manual and electronic submission of travel authorizations and travel vouchers annually, including those for long-term taxable travel and relocation, in the FM Year-end Close Guidance. Business units need to comply with these deadlines so that travel can continue without interruption. Business units may not submit requests for manual authorizations or advances to circumvent the requirements associated with automated systems; nor may offices request manual advances for individuals who can obtain advances by using their travel cards.

1.35.15.10.4  (07-20-2015)
Treasury Executive Office Asset Forfeiture Funds

  1. Treasury Executive Office Asset Forfeiture Funds (TEOAF) obligation activity (awards or modifications) for the Mandatory, Super Surplus and Secretary Enforcement programs must be processed in IPS and interfaced to IFS no later than close of business on September 26 to assure proper elimination cut-off with the IRS’ trading partner. The affected funds end in 09R3D and 09F3D.

1.35.15.11  (07-26-2011)
Receipt and/or Acceptance

  1. In order to accurately estimate the accounts payable liability as of September 30, timely notices of receipt and/or acceptance are crucial. Inappropriate or overstated receipt and/or acceptance must be corrected in IPS, which then interfaces with and updates IFS to properly state the liability. FM must receive receipt and/or acceptance by the date specified in the FM Year-end Close Guidance. Notification is to be performed as follows:

    1. Electronic: All valid electronic receipt and/or acceptance data must be input as soon as possible, but no later than the date specified in the FM Year-end Close Guidance.

    2. Manual: All invoices and related receipt and acceptance documents for manual obligations (Forms 2785, BPA logs, etc.) must be forwarded to FM no later than the dates specified in the FM Year-end Close Guidance.

1.35.15.12  (07-26-2011)
Invoices and Payments

  1. In order to facilitate year-end processing, it is helpful if business units and/or vendors submit invoices for goods and/or services that were obtained during the fiscal year to FM before the accounting records are closed. FM publishes specific dates for the submission of invoices for the fiscal year annually in the FM Year-end Close Guidance.

1.35.15.12.1  (07-26-2011)
Commercial Transactions

  1. Generally, each contract contains specific language that governs invoicing procedures. Business units should not make requests directly to the vendor that differ from the invoicing terms in the contract. The Contracting Officer (CO) contacts the vendor to request changes in invoicing frequency.

1.35.15.12.2  (07-26-2011)
Intra-governmental Transactions

  1. Generally, Federal agencies use the Intra-governmental Payment and Collection (IPAC) system to record fees between agencies. FM records expenses and credits associated with IPAC transactions in a suspense account when acceptance has not taken place. At year-end, it is particularly important that business units certify that both receipt and acceptance of goods and/or services have taken place to minimize the number and dollar value of transactions in the suspense account at the end of each fiscal year.


More Internal Revenue Manual