Part 1. Organization, Finance and Management

Chapter 35. Administrative Accounting

Section 15. Annual Close Guidelines

1.35.15  Annual Close Guidelines

Manual Transmittal

July 26, 2011

Purpose

(1) This transmits the revised Internal Revenue Manual 1.35.15, Administrative Accounting, Annual Close Guidelines.

Material Changes

(1) Section 1.35.15.2, Background, changed title from Introduction to Background and updated title of attachments in section 1.35.15.2 (3).

(2) Added new section 1.35.15.3, Authority. All sections after 1.35.15.3 were renumbered.

(3) Section 1.35.15.4 (4) and (6), Related Resources, added additional related resources.

(4) Section 1.35.15.5, Definitions, changed title from Glossary of Terms to Definitions. Revised definition of obligation and receipt.

(5) Added new section 1.35.15.6, Acronyms.

(6) Section 1.35.15.7, Responsibilities, added new responsibilities.

(7) Section 1.35.15.8.2, Current Year Targets and Approvals, updated IRS budget targets.

(8) Section 1.35.15.10.1 (1), Automated Procurement Systems, changed title from WebRTS/IFS Interface to Automated Procurement Systems and updated interface transmission time schedule.

(9) Section 1.35.15.10.2.1 (2), Miscellaneous Programs, updated Program or Activity list that utilize Form 2785, Requisition/Obligation Estimate Adjustment Notice only.

(10) Section 1.35.15.11, Receipt and/or Acceptance, changed title from Receipt and Acceptance to Receipt and/or Acceptance. Also included examples of manual receipt and acceptance documentation.

(11) Section 1.35.15.12.3 (2), Eliminating Intra-departmental Transactions, updated reporting frequency to Treasury.

(12) Section 1.35.15.13.1 (3), Aging Unliquidated Commitments (AUC), updated IRS obligation goal.

(13) Section 1.35.15.14 (2), Reimbursable Agreements, added Reimbursable Agreement categories.

(14) Section 1.35.15.15, Accounting Code Changes, added additional information to clarify procedures.

(15) Section 1.35.15.17 (3) and (4), Canceling Appropriations, modified for clarity.

(16) Section 1.35.15.18.2 (1), Specifically Identified Accruals, updated accrual methodology for Federal Employees Compensation Act (FECA) Account - Unfunded and Federal Employees Compensation Act (FECA) Account - Actuarial.

(17) Section 1.35.15.18.4 (3a), Year-end Payroll Accruals, updated cash award information.

(18) Section 1.35.15.22.2 (6b), Pre-Close and Post-Close Trial Balances at Year-end, updated for clarity.

(19) Revised section 1.35.15.24 (2), Reports and Certifications to Treasury, updated list of required reports and certifications.

(20) This revision includes changes throughout the document to update the organizational name of Budget to Corporate Budget and the word yearend to year-end. Also, any references to webRTS, IPS, or webRTS/IPS have been changed to automated procurement system; Performance and Accountability Report (PAR) have been changed to Agency Financial Report (AFR), and Statement of Net Cost (SONC) have been changed to Statement of Net Cost (SNC).

Effect on Other Documents

This IRM supersedes IRM 1.35.15, dated September 8, 2009.

Audience

All Operating Divisions and Functions.

Effective Date

(07-26-2011)

Pamela J. LaRue
Chief Financial Officer

1.35.15.1  (07-26-2011)
Overview

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

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

1.35.15.2  (07-26-2011)
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 unqualified 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 IFM Year-end Memorandum, with attachments, issued each year. The following attachments provide guidance specific to the year-end process:

    1. Guidelines for the Review of the Aging Unliquidated Commitments (AUC) and Aging Unliquidated Obligations (AUO) Reports.

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

    3. Closing of Budget Fiscal Year 20XX Appropriations.

  4. The IFM Year-end Memorandum and attachments are available on the CFO website.

1.35.15.3  (07-26-2011)
Authority

  1. Chief Financial Officers Act of 1990, Public Law 101-576.

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

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

1.35.15.4  (07-26-2011)
Related Resources

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

  2. Office of Management and Budget Circular No. A-136, Financial Reporting Requirements.

  3. IRM 1.33.4, Financial Operating Guidelines.

  4. IRM 1.33.3, Reimbursable Operating Guidelines.

  5. IRS Financial Management Codes Handbook.

  6. IRM 1.32.6, Purchase Card Program Handbook.

1.35.15.5  (07-26-2011)
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. 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), Furniture Fedstrip, Standard Form (SF) 182, Authorization, Agreement and Certification of Training, or a Form 2785, Requisition/Obligation Estimate Adjustment Notice.

    11. 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.

    12. Receipt - an acknowledgment that the Government received the goods and/or services.

    13. 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.

    14. 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.

    15. Travel Authorization - an electronic or written document submitted for approval to authorize official travel.

    16. 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.

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

    18. 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  (07-26-2011)
Acronyms

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

    ACRONYM DESCRIPTION
    AINFC Automated Interface to National Finance Center
    AUC Aging Unliquidated Commitments
    AUO Aging Unliquidated Obligations
    AWSS Agency-Wide Shared Services
    BFC Beckley Finance Center
    CLIN Contract Line Item
    EITC Earned Income Tax Credit
    FACTS Federal Agencies' Centralized Trial Balance System
    FASAB Federal Accounting Standards Advisory Board
    FBWT Fund Balance with Treasury
    FMS Financial Management Service
    FPM Financial Plan Manager
    GAO Government Accountability Office
    GLAC General Ledger Account
    GRAS Government Relocation Accounting System
    GWA Governmentwide Accounting
    IFM Internal Financial Management
    IFS Integrated Financial System
    IPAC Intra-governmental Payment and Collection
    NFC National Finance Center
    SNC Statement of Net Cost
    TIER Treasury Information Executive Repository

1.35.15.7  (07-26-2011)
Responsibilities

  1. This section provides responsibilities for:

    1. Chief Financial Officer (CFO).

    2. Associate CFO for Internal Financial Management (IFM).

    3. Beckley Finance Center (BFC).

    4. Office of Financial Management Policy (FMP).

    5. Office of Financial Reports (OFR).

    6. Office of Financial Management Systems (OFMS).

    7. Associate CFO for Corporate Budget (CB).

    8. Director, Office of Procurement, Agency-Wide Shared Service (AWSS).

    9. Division Finance Officers (DFOs).

    10. Business Unit Year-end Coordinator.

1.35.15.7.1  (07-26-2011)
Chief Financial Officer (CFO)

  1. The 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 ended on September 30.

    2. Establishing practices, procedures, standards, and controls for IRS financial processes and systems, and ensuring compliance.

1.35.15.7.2  (07-26-2011)
Associate CFO for Internal Financial Management (IFM)

  1. The Associate CFO for IFM is responsible for:

    1. Establishing, maintaining, and ensuring compliance with accounting policy and procedures for internal accounting operations and financial reporting.

    2. 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.

    3. Providing guidance and policy to business units and offices on internal accounting topics and issues, including program review requirements and accounting deadlines.

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

    5. Directly managing the quarterly and annual financial statements for the administrative accounts.

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

1.35.15.7.3  (07-26-2011)
Beckley Finance Center (BFC)

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

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

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

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

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

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

    6. 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.

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

    8. Preparing reports for both internal and external use, to include, but not limited to, the Financial Management Service (FMS) 224, Statement of Transactions; the Prompt Payment Report; and the Treasury Report on Receivables.

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

1.35.15.7.4  (07-26-2011)
Office of Financial Management Policy (FMP)

  1. The Office of Financial Management Policy 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  (07-26-2011)
Office of Financial Reports (OFR)

  1. The Office of Financial Reports (OFR) is responsible for:

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

    2. Preparing and recording entries for contingent liabilities.

    3. Establishing accrual methodology.

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

    5. Managing the administrative financial statement audit.

    6. Performing the final review and submitting the SNC.

    7. Preparing, analyzing, reviewing, and delivering annual, quarterly, and monthly financial reports, and certifications to include, but not limited to, the Treasury Information Executive Repository (TIER), and the Agency Financial Report (AFR).

    8. Managing system access during year-end adjustment periods.

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

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

    11. Facilitating the reporting of financial data to DHHS for the Therapeutic Discovery Tax Credit.

    12. Preparing, analyzing, reviewing, and delivering A-123, provided by client (PBCs).

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

1.35.15.7.6  (07-26-2011)
Office of Financial Management Systems (OFMS)

  1. The Office of Financial Management Systems (OFMS) is responsible for:

    1. Documenting and communicating detailed daily system processing schedules.

    2. Developing and maintaining policies and procedures for the payroll accrual and posting the payroll accrual in accordance with these 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 in IFS 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  (07-26-2011)
Associate CFO for Corporate Budget (CB)

  1. The Associate CFO for Corporate Budget (CB) is responsible for:

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

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

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

    4. Providing IFM 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).

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

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

    7. Reviewing, approving, or rejecting requests for September obligations which exceed the established threshold, in conjunction with Procurement.

    8. Working simultaneously with Procurement and IFM to monitor and maintain oversight of business unit and IRS-wide commitment and obligation statuses to ensure compliance with the goals of 82% of budget obligated by July 31, 92% of non-labor budget obligated by August 31 (91% for labor), and 99.7 % of budget obligated by September 30.

1.35.15.7.8  (07-26-2011)
Director, Office of Procurement, Agency-Wide Shared Service (AWSS)

  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 automated procurement system to support the obligation goal of 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 which exceed the established threshold, in conjunction with the Associate CFO for Corporate Budget.

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

1.35.15.7.9  (07-26-2011)
Division Finance Officers (DFOs)

  1. The Division Finance Officers (DFO) 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 prescribing due dates, and designating the responsible parties for the tasks.

    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 IFM.

    8. Submitting all required documents to IFM, 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.

1.35.15.7.10  (07-26-2011)
Business Unit Year-end Coordinator

  1. The Business Unit Year-end Coordinator is responsible for assisting the Division Finance Officer in the tasks stated above and participating in year-end related conference calls.

1.35.15.8  (07-26-2011)
Spend Plan

  1. Each business unit, under the direction of the FPM, 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  (07-26-2011)
Midyear/Spend Plan Review

  1. After the close of the second quarter, Corporate Budget conducts a Midyear/ Spend Plan Review with each business unit. 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. This 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 that may be redirected to corporate needs.

    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, conducted within all Treasury bureaus.

    6. Finalizes the spend plans for the remainder of the year.

  3. After a complete analysis of the spend plans, the business unit and/or Corporate Budget 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  (07-26-2011)
Current Year Targets and Approvals

  1. The IRS should have 82% of the budget obligated by July 31, 92% of non-labor budget obligated by August 31 (91% for labor), and 99.7% of 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.

  2. 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. Commitments for proposed obligations over $1 million, submitted after August 31 and not shown as projected for September, must be approved by the Director, Office of Procurement, and the Associate CFO for Corporate Budget, before the business unit can create the obligation.

  3. 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 AUO reports generated by BFC assist in this process.

1.35.15.9  (07-26-2011)
Recording Financial Transactions

  1. Correctly recording all actual and projected fiscal year financial transactions ensures that the IRS presents the financial statements fairly in all material respects, and the 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 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 the Background, IRM 1.35.15.2(3).

1.35.15.10  (07-26-2011)
Obligations

  1. IFS records obligations through a number of interfaces and manual entries described below:

    1. Automated interface with the National Finance Center (NFC). The Automated Interface to NFC (AINFC) automatically places in IFS a payroll accrual to ensure that sufficient funds are reserved to cover the payroll disbursement in full. Since September 30 rarely falls exactly at the end of a pay period, the Associate CFO for IFM makes a request to AWSS stating how NFC should split the pay for the last pay period of the fiscal year. AWSS coordinates with Treasury and NFC to determine how NFC will record the pay.

    2. Automated interface between the automated procurement system 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.

    3. Manual entry directly into IFS. In this case, the commitment is not automatically recorded in the automated procurement system.

    4. Automated interface between GovTrip 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)
Automated Procurement System

  1. To ensure that obligations posted in the automated procurement system are recorded in IFS at the close of the fiscal year, IFM institutes special automated procurement system and IFS interface transmissions. Information pertaining to requisitions and obligations stored in the automated procurement system 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 the automated procurement system 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., Eastern Daylight Time.

  2. Additional information concerning the automated procurement system interfaces can be found on the CFO website.

1.35.15.10.1.1  (07-26-2011)
Purchase Cards

  1. An approved and funded automated procurement system 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, because 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 concerning purchase card deadlines and the AUC/AUO review of purchase cards can be found in the IFM Year-end Memorandum and attachments on the CFO website.

  5. Additional information concerning purchase cards can be found in IRM 1.32.6, Purchase Card Program Handbook.

1.35.15.10.2  (07-26-2011)
Manually Entered Obligations

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

1.35.15.10.2.1  (07-26-2011)
Miscellaneous Programs

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

  2. For the programs listed in the chart below, the business unit enters the commitment in the automated procurement system. Business units need to monitor commitment amounts to ensure that they are sufficient to cover anticipated needs through the fiscal year-end. IFM manually records the obligation in IFS, using as its documentation the forms listed below. The business unit uses these same forms to transmit 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
    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
    Furniture Fedstrips/Customer Supply Reimbursable Work Authorizations General Services Administration (GSA) Form 2957, Reimbursable Work Authorization
    Personal Property Claims PG 1334 Worksheet (printout from the automated procurement system)
    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 the automated procurement system to draw down funds in IFS. IFM 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
    Working Capital Fund
    Rent
    Unemployment Compensation for Federal Employees (UCFE)
    Federal Tax Lien Revolving Fund (FTLRF) *Memo request

    Note:

    *Funds are obligated from the accounting string.

  4. Additional information on specific program guidance can be found in the IFM Year-end Memorandum and attachments on the CFO website.

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 the automated procurement system 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 IFM to record the obligation in IFS.

  3. IFM 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. IFM publishes the specific dates in the IFM Year-end Memorandum posted on the CFO website.

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. IFM 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 IFM Year-end Memorandum. 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.

  3. Additional information concerning travel and relocation deadlines can be found in the IFM Year-end Memorandum and attachments on the CFO website.

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 the automated procurement system, which then interfaces with and updates IFS to properly state the liability. IFM must receive receipt and/or acceptance by the date specified in the IFM Year-end Memorandum. 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 IFM Year-end Memorandum and attachments found on the CFO website.

    2. Manual: All invoices and related receipt and acceptance documents for manual obligations (2785 cards, BPA logs, etc.) must be forwarded to IFM no later than the dates specified in the IFM Year-end Memorandum and attachments found on the CFO website.

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 are obtained in the fiscal year to IFM before the accounting records are closed. IFM publishes specific dates for the submission of invoices for the fiscal year annually in the IFM Year-end Memorandum and attachments found on the CFO website.

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 to vary from the invoicing terms in the contract. The Contracting Officer (CO) contacts the vendor to request changes in invoicing frequency.

  2. Additional information concerning commercial transaction deadlines can be found in the IFM Year-end Memorandum and attachments on the CFO website.

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. IFM 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.

1.35.15.12.3  (07-26-2011)
Eliminating Intra-departmental Transactions

  1. Each Treasury Department bureau and office reports the transactions that it has with other Treasury bureaus and offices. To avoid duplicating these transactions in its own "Cabinet-level" financial statements, Treasury instructs its subordinate bureaus and offices to reconcile their transactions with one another. These intra-departmental eliminations are facilitated by the online Bureau Intra-Agency Transaction by Eliminations (TEP) report. This report uses Treasury level information resulting from an aggregation of each bureau’s general ledger submission. IFM submits the bureau level information via the TIER.

  2. Quarterly, each subordinate bureau must provide to the Treasury’s Office of Accounting and Internal Controls (AIC) an explanation for each difference depicted on the TIER TEP report for which the dollar amounts exceed Treasury’s established threshold.

  3. Bureaus must perform intra-departmental elimination reconciliations through September 30 and submit required reports by the due dates provided in the Intra-Departmental Transaction Policy Guidance issued annually by Treasury.

1.35.15.13  (07-26-2011)
Commitment and Obligation Reviews

  1. Commitments set aside funds for future obligations and represent a resource management tool to draw down budget availability. Obligations are legally binding agreements created by awards, contracts, or purchase orders. Business units and/or Procurement enter the values of the negotiated agreements (obligations) into IFS prior to the beginning of work. Obligations draw down (liquidate) commitments. Expenditures draw down (liquidate) obligations.

  2. Timely management of commitments and obligations enables the IRS to maximize its financial resources. IFM provides the Aging Unliquidated Commitments (AUC) and the Aging Unliquidated Obligations (AUO) reports to the business units and Procurement on predetermined dates. Business units and Procurement review, annotate, certify, and return the reports to IFM by the prescribed due date. The reviews ensure the legitimacy, accuracy, and accountability of open balances with respect to timely consumption. Business units and/or Procurement must take immediate action to liquidate invalid commitments and obligations and exercise diligent oversight to ensure those items determined valid become expenditures.

  3. Since all current year open commitments and obligations draw down available budgets, amounts decommitted or deobligated become available for funding other items during the fiscal year.


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