- 1.33.3 Reimbursable Operating Guidelines
- 126.96.36.199 Overview of the Reimbursable Operating Guidelines
- 188.8.131.52 Background
- 184.108.40.206 Authorities
- 220.127.116.11 Related Resources
- 18.104.22.168 Definitions
- 22.214.171.124 Acronyms
- 126.96.36.199 Responsibilities
- 188.8.131.52.1 Chief Financial Officer
- 184.108.40.206.2 Associate Chief Financial Officer for Corporate Budget
- 220.127.116.11.3 Associate Chief Financial Officer for Financial Management
- 18.104.22.168.4 Cost Accounting Office
- 22.214.171.124.5 Financial Management Systems Office
- 126.96.36.199.6 Financial Reports Office
- 188.8.131.52.7 Beckley Finance Center
- 184.108.40.206.8 Business Units
- 220.127.116.11 Reimbursable Authority
- 18.104.22.168.1 Funds Control
- 22.214.171.124.2 Apportionments/Reapportionments
- 126.96.36.199.3 Estimated Reimbursable Budget
- 188.8.131.52.3.1 Reimbursable Authority Alignment
- 184.108.40.206 Agreements
- 220.127.116.11.1 Funding Arrangements
- 18.104.22.168.2 Types of Agreements
- 22.214.171.124.2.1 Federal Government
- 126.96.36.199.2.2 Non-Government and State, Local, and Foreign Governments
- 188.8.131.52.3 Reimbursable Agreement Approval Process
- 184.108.40.206.4 Authorizing Officials and Delegation Orders
- 220.127.116.11 Costing
- 18.104.22.168.1 Cost Assignment
- 22.214.171.124.2 Cost Estimates
- 126.96.36.199.3 Performance/Cash Awards
- 188.8.131.52 Budget and Accounting Procedures
- 184.108.40.206.1 Processing Reimbursables
- 220.127.116.11.2 IFS Transactions
- 18.104.22.168.2.1 Monthly Reporting Requirements
- 22.214.171.124.2.2 Schedule of Reimbursable Earnings (FV50)
- 126.96.36.199.2.2.1 Beckley Finance Center Mailing Addresses and Contacts
- 188.8.131.52.3 Financial Codes
Part 1. Organization, Finance, and Management
Chapter 33. Strategic Planning, Budgeting and Performance Management Process
Section 3. Reimbursable Operating Guidelines
April 27, 2015
(1) This transmits the revised IRM 1.33.3, Strategic Planning, Budgeting and Performance Management Process; Reimbursable Operating Guidelines.
(1) IRM 1.33.3, Reimbursable Operating Guidelines, was revised to remove all references to transactions and forms no longer supported by the updated version of the Integrated Financial System (IFS) and to include updated reimbursable processes.
(2) IRM 184.108.40.206, Authorities, was revised to be consistent with IRM guidelines.
(3) IRM 220.127.116.11, Related Resources, was revised to be consistent with IRM guidelines.
(4) IRM 18.104.22.168, Definitions, was revised to remove transactions and accounting codes no longer in use under the Integrated Financial System and to add material related to the updated reimbursables process.
(5) IRM 22.214.171.124, Acronyms, was updated to include current information.
(6) IRM 126.96.36.199, Responsibilities, was revised to include the updated reimbursable approval process.
(7) IRM 188.8.131.52, Reimbursable Authority, was revised to include the updated budget versions and transactions currently used by the updated IFS.
(8) IRM 184.108.40.206, Agreements, was revised to include the updated reimbursable approval process.
(9) IRM 220.127.116.11, Costing, was revised to include the updated reimbursable process.
(10) IRM 18.104.22.168, Budget and Accounting Procedures, was revised to remove transactions and accounting codes no longer in use under IFS, update the change in budget versions, and convey the updated reimbursable processes.
Robin L. Canady
Chief Financial Officer
The Reimbursable Operating Guidelines (ROG) are internal funds control guidance developed to assist Division Finance Officers (DFOs), Budget Directors, Financial Plan Managers (FPMs), and related staffs with establishing, costing, and approving agreements, and with accounting, billing, and collecting reimbursable funds owed to the IRS.
This IRM is published by the Chief Financial Officer's (CFO's) Corporate Budget (CB) Unit (OS:CFO:CB). Comments and change requests may be submitted to the Director, Budget Execution Office, CB.
This IRM is not specific to fiscal year (FY) and is in effect until superseded. These guidelines take precedence over any previous reimbursable operating instructions.
In the event of a Continuing Resolution (CR), specific CR operating guidance will be posted on the CB website. During the CR period, the CR guidance takes precedence over this IRM should differences in policy occur. Once Congress passes an appropriations act or full-year continuing resolution, the IRM prevails.
Future revisions, including interim guidance during the year, will be posted to the CB website.
The Antideficiency Act requires all government agencies to prescribe, by regulation, a funds control system. The funds control system is intended to 1) restrict both obligations and expenditures from each appropriation or fund account to the lower of the amount apportioned by the Office of Management and Budget (OMB) or the amount available in the appropriation or fund account, and to 2) enable the agency head to identify the person(s) responsible for exceeding appropriations, apportionments, allotments, statutory limitations, or other administrative subdivisions of funds.
This guidance provides funds control regulations, as required by OMB Circular A-11, Preparation, Submission and Execution of the Budget, Part 4, Section 150, Administrative control of funds.
This IRM addresses funds-in reimbursable activity where the IRS functions as the Seller of reimbursable goods and/or services. These guidelines do not apply to funds-out procurements where the IRS serves as the Buyer procuring services from other governmental and nongovernmental entities.
This IRM provides useful contact information and addresses that are important to DFOs, Budget Directors, FPMs, and related staffs. The ROG standardizes agreements, billing, and collections.
This IRM provides accounting guidance for recording and transferring expenses between the Integrated Financial System (IFS) Direct and Reimbursable Fund accounts.
The authorities for this IRM include:
Economy Act of 1932 (31 USC 1535-1536).
Laws establishing revolving funds such as the Treasury Franchise Fund (formerly Treasury Working Capital Fund).
Stafford Act (42 USC 5147).
Intergovernmental Cooperation Act (31 USC 6505).
Intergovernmental Personnel Act of 1970 (PL 91-648).
Related resources for this IRM include:
GAO's Principles of Federal Appropriations Law (the Red Book).
IRM 1.33.4, Financial Operating Guidelines.
IRM 1.35.15, Administrative Accounting, Annual Close Guidelines.
IRS Financial Management Codes Handbook, posted on the CB website.
IRM 1.32.3, Servicewide Financial Policies and Procedures, Managerial Cost Accounting (MCA).
In this IRM, the terms below have the following meanings:
Advance Payment – A pre-payment by the Buyer for the later receipt of reimbursable goods and/or services to be provided by the IRS. Advance payments are required for non-federal buyers.
Agreement Period (Period of Performance) – The period of time during which the IRS is incurring costs and/or providing services. This agreement period can be up to one year but may not extend past September 30 of the funding year of the agreement with the exception of when multi-year funds are available from the Buyer or when the service involves certain Direct-Charge Reimbursable Fund Agreement obligations, which can be initiated in the funding year and extend past September 30.
Agency Location Code (ALC) – Also referred to as the accounting station symbol, is used to identify each federal agency that prepares a FMS 224, Statement of Transactions. Treasury uses the ALC to reconcile by account symbol its monthly deposits and disbursements by appropriation, fund, and receipts. Budget Office Reimbursable Coordinators (BORCs) must include the ALC on all correspondence, forms, and other documentation forwarded to financial institutions, BFS, and other federal agencies. The IRS ALC requested on the applicable reimbursable forms (Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section and Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities) is 20090003.
Business Event Type Code (BETC) – a four- to eight-character code used in the Governmentwide Accounting (GWA) System to indicate the type of activity being reported, such as payments, collections, disbursements, or adjustments, among others. This code must accompany the TAS and the dollar amounts in order to classify the transaction against the Fund Balance with Treasury. The BETC replaces the transaction codes and standard subclasses that were previously used on the central accounting reports, such as those used on the Statements of Transactions (FMS 224). The IRS BETC requested under the Agreement Covering Reimbursable Services (Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section and Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities), is always COLL.
Business Partner Network (BPN) – The single source for vendor data for the U.S. Federal Government. The network is used by the government to identify trading partners at a level in an agency where reimbursable business is being conducted. The BPN number indicates the specific unit within an agency that is requesting the goods and services. The BPN number is the standard name for this data element, which may be the trading partner's Data Universal Numbering System (DUNS) number or the Department of Defense Activity Address Code (DoDAAC). In most cases, the IRS BPN number requested on the applicable reimbursable forms (Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section and Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities) is 040539587, but there may be exceptions.
Buyer – A trading partner that is purchasing goods and/or services. The Buyer, which is also known as the customer, requests services from the IRS.
Collection – The money collected by the Federal Government and recorded as a receipt, an offsetting collection, or an offsetting receipt.
Direct-Charge Reimbursable Fund Agreements – An agreement where amounts are obligated, expenditures incurred, amounts paid, and revenue is recognized directly in the associated direct-charge reimbursable fund. Expenditures initially recorded and paid in a direct fund or direct-charge reimbursable fund may be transferred to or from each other based upon the individual program’s procedures. As of FY 2014, the only IRS reimbursable agreement that is a direct-charge reimbursable is the Treasury Executive Officer of Asset Forfeiture (TEOAF) Mandatory Program.
Forecast of Revenue – The accounting transaction process under which Corporate Budget establishes a Forecast of Revenue to be earned and then sub-allocates budget authority to a Business Unit under a Transfer Budget transaction to allow reimbursable costs to be incurred for work performed under the terms of the reimbursable agreement.
Fixed-Fee Agreement – An agreement wherein the products and/or services may be provided once or multiple times, however the full amount of earnings is recognized the first time a product is delivered and/or a service is rendered. Fixed fees are also known as lump-sum or one-time payments.
Funded Program – The specialized accounting code assigned to each reimbursable project (e.g., RA2014B339). This is a required field when entering data in IFS. "Funded Program" was previously called "Internal Order Code."
Fully-Costed Agreement – An agreement where the full cost of the goods and/or services provided is equal to the total amount of resources used to produce the goods and/or services. This includes direct and indirect costs. It also includes the costs of supporting services (direct and indirect costs) provided by other responsible segments or entities. Full costs for reimbursable agreements must be recovered unless a waiver has been obtained in advance from Corporate Budget.
Form 14417, Reimbursable Agreement – Non-Federal Entities – Non-Federal entities include state, local, and foreign governments and non-governmental entities. This form is the standard template and communication tool between the Buyer and Seller and enables the two to agree on data elements and terms of the reimbursable transaction before business begins.
Form 7600A and Form 7600B Interagency Agreement (IAA) – Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section is the required trading partner agreement for federal reimbursable agreements. Federal agreements include all agreements with other Treasury bureaus or other federal agencies. This form is the standard template and communication tool between the Buyer and Seller and enables the two to agree on data elements and terms of the reimbursable transaction before business begins. The standard IAA has two sections: the General Terms and Conditions (GT&C) Section (Form 7600A) and the Order Requirements and Funding Information (Order) Section (Form 7600B). Each standard IAA must have one GT&C and at least one Order unless otherwise specified by the Servicewide Reimbursables Team.
Governmentwide Accounting – Provides the central/financial accounting and reporting infrastructure for federal payments, claims, collections, central accounts, and other financial transactions.
Internal Order Code (IOC) – The specialized accounting code assigned to each reimbursable project (e.g., RA2015B339, RA2015066VA). This is a required field when entering data in IFS." Internal Order Code" is now called "Funded Program."
Intragovernmental Payment and Collection System (IPAC) – IPAC is an internet-based application that allows for the intragovernmental transfer of funds with descriptive data from one agency to another. Beckley Finance Center (BFC) records IPAC disbursements and collections into the GOALS II system, where funds are automatically transferred from one agency's disbursement account to another agency's collection account.
Order – Identifies the specific requesting agency requirements for delivery of goods and/or services by the servicing agency.
Parked Document – The transaction used by the BORC to park an initial Direct Fund cost transfer to the Reimbursable Fund (FV50-BZ) for later posting by BFC. This type of tandem transaction requires each of two separate offices to complete its respective side of the transaction. The BORC parks the transaction making it available for the second office to act on. The second office, the BFC, accesses the transaction, reviews it for accuracy, and approves the transaction by posting the document.
Recurring Agreement – An agreement that will be renewed on an annual or other basis, unless a notice to discontinue is received. These agreements still require certain documents to be signed annually.
Reimbursable Agreement – The signed agreement between the IRS and Buyer that sets out the terms and conditions under which reimbursable work will be performed. Reimbursable agreements are typically expenditure transfer payments. The paying account reports the obligations and outlays. The receiving account reports the offsetting collections. For purposes of this IRM, the term reimbursable means that the IRS is the Seller or performing agency (not the Buyer of services or the requesting agency).
Reimbursable Authority – The budgetary resource category on an apportionment submitted to OMB for approval. Standard Form (SF)-132, Apportionment and Reapportionment Schedule, is used to set and/or adjust reimbursable budget authority.
Reimbursable Earnings – A category that appears on the SF-132, Apportionment and Reapportionment Schedule, and the SF-133, Report on Budget Execution and Budgetary Resources. Reimbursable earnings are recorded in IFS after reimbursable work has been performed and based on the actual cost of the work performed using an FV50-BZ transaction.
Seller – The general term used for a trading partner that is providing goods and/or services. The Seller is also the servicing agency. For all reimbursable agreements discussed in this policy, the IRS is the Seller.
Servicewide Reimbursables Team – The individual or individuals designated by the Director, Budget Execution Office, to ensure at the staff level that the responsibilities of the ACFO, Corporate Budget, are carried out with regard to reimbursables.
Taxpayer Identification Number (TIN) – An identification number used by the IRS in the administration of tax laws. It is either a Social Security Number (SSN) or a unique nine-digit number issued by the IRS. The TIN number for the IRS used in reimbursable agreements (Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section and Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities) is 52-1782822.
Trading Partners – The Buyer and Seller (federal contracts) are collectively known as the" trading partners." For a current listing of vendors and trading partners, see the FM website.
Trading Partner Code – The Treasury Department attribute code used to identify the Federal trading partner agency.
Treasury Account Symbol (TAS) – An identification code assigned by the Department of the Treasury, in collaboration with the Office of Management and Budget and the owner agency, to an individual appropriation, receipt, or other fund account. These accounts are defined in TFM Volume I, Part 2, Chapter 1500. The term "Treasury Account Symbol" is a generic term used to describe any one of the account identification codes assigned by the Department of the Treasury. All financial transactions of the Federal Government are classified by TAS for reporting to the Department of the Treasury and the Office of Management and Budget. For a complete listing of the IRS TAS codes and updates to the TAS numbering system, see the FM website.
The following table contains acronyms used in this IRM:
Acronyms ALC Agency Location Code BAC Budget Activity Code BETC Business Event Type Code BFC Beckley Finance Center BFS Bureau of the Fiscal Service (recently was established to include the former Financial Management Service) BORC Budget Office Reimbursables Coordinator BPN Business Partner Network CA Cost Accounting Office CB Corporate Budget CFO Chief Financial Officer CR Continuing Resolution DUNS (Predecessor of BPN) Dun and Bradstreet's Data Universal Numbering System EIN Employer Identification Number FMS Financial Management Service (recently was merged into the Bureau of the Fiscal Service) FOG Financial Operating Guidelines FPM Financial Plan Manager/Funding Official FR Financial Reports Office FTE Full-Time Equivalent FY Fiscal Year GAAP Generally Accepted Accounting Principles GAO Government Accountability Office GWA Governmentwide Accounting System IFS Integrated Financial System IPAC Intragovernmental Payment and Collection System MOU Memorandum of Understanding OMB Office of Management and Budget RA Reimbursable Agreement RPC Reimbursable Project Coordinator ROG Reimbursable Operating Guidelines SFFAS Statement of Federal Financial Accounting Standards TAS Treasury Account Symbol TIN Taxpayer Identification Number USC United States Code USSGL U.S. Standard General Ledger
The CFO and Business Units (BUs) have financial management responsibilities for properly executing, negotiating, billing, accounting, reporting, reconciling, and closing out reimbursable accounts at year-end. This section provides responsibilities for the:
Chief Financial Officer.
Associate CFO for Corporate Budget.
Associate CFO for Financial Management.
Cost Accounting Office.
Financial Management Systems Office.
Financial Reports Office.
Beckley Finance Center.
The CFO is responsible for budgetary oversight and accountability for the IRS reimbursable program.
The CFO approves and issues the IRS financial management guidance governing the reimbursable program.
The ACFO Corporate Budget is responsible for:
Providing budgetary oversight, accountability, and overall management of the IRS reimbursable program.
Responding to Treasury, OMB, and audit organizations on IRS reimbursable budget and agreement structure issues.
Serving as the Servicewide reimbursables coordinator by developing and implementing IRS administrative policies and procedures governing the reimbursable program, such as this IRM, call memos for projected spend plans, and year-end procedures.
Preparing budget estimates, inputs, and reports intended for external audiences like the Department of the Treasury, OMB, and other stakeholders.
Preparing, submitting, and monitoring apportionments for all reimbursable projects.
Creating and coordinating IFS funded program codes for new reimbursable projects.
Ensuring the reimbursable appropriation is distributed from the appropriation level to the authority level.
Entering forecasts of revenue and distributing budget and FTE to the authority level.
Responding to financial control issues.
Providing reimbursable oversight of BUs.
Monitoring and analyzing IRS reimbursable projects for system errors and earnings progress.
Monitoring and supporting year-end close activities.
Coordinating with CA on developing overhead cost policy and methodology.
Reviewing and approving (by signing and dating) BU reimbursable agreements, cost estimates, and overhead cost estimates.
Maintaining a copy of the final agreement with all appropriate signatures once a forecast of revenue is input.
Determining whether a reimbursable agreement needs to be reviewed by Financial Reports (FR) and ensuring the agreement is made available to FR.
The Associate CFO for Financial Management (FM) is responsible for overseeing proper recording of reimbursable agreements in the administrative financial statements and accounting systems.
The Director, Cost Accounting Office, is responsible for:
Developing a reimbursable overhead rate and methodology.
Establishing and maintaining the IRS cost accounting policies and procedures.
Providing advice and assistance to FPMs, RPCs, and BORCs on the costing of respective reimbursable projects.
The Director, Financial Management Systems Office, is responsible for:
Establishing and maintaining the IRS internal financial management system policies and procedures.
Issuing financial reports for reimbursable activity, such as the Reimbursable Funds Analysis Report.
The Director, Financial Reports Office, is responsible for:
Monitoring, reviewing, and analyzing reimbursable activity for IRS Financial Statement Reports and General Ledger (GL) Accounts.
Instituting adjustments, as appropriate, through its CB and BFC counterparts.
Reviewing and approving any agreements identified by CB that require other than monthly billing arrangements, are Federal agreements that require advances, or are Federal assisted acquisitions.
Signing and dating any reimbursable agreements that require FR approval.
The Director, Beckley Finance Center, is responsible for:
Ensuring that reimbursable agreements are recorded properly in the administrative financial statements and accounting systems.
Verifying that all required parties have signed a ratified reimbursable agreement and are maintaining appropriate documentation to support billing, such as agreement documentation.
Coordinating billing requirements between IRS and its reimbursable buyers.
Collecting, posting, and monitoring reimbursable earnings and payments in IFS.
Informing the Servicewide Reimbursables Team and the BORC when advance payments are received.
Ensuring each agreement contains a valid master data customer number. The Government Payable and Receivables Section will complete a Customer Code Request Form for BUs and submit it to the Obligations Office when new customer codes are required.
Business Units (BUs) are responsible for the financial management and funds control of their respective reimbursable agreements and project accounting requirements. It is recommended that each BU establish three administrative levels to carry out the proper execution and financial control of reimbursable agreements. These levels are:
Reimbursable Project Coordinator (RPC).
Budget Office Reimbursable Coordinator (BORC).
Financial Plan Manager (FPM)/Funding Official.
In situations where it is not feasible to have three different people perform these three jobs, one person may be both the RPC and the BORC. The FPM role must always be carried out by someone who is neither the RPC nor the BORC.
The RPC is responsible for:
Ensuring agreement terms and conditions comply with appropriations law principles and are negotiated, finalized, and signed by all required parties.
Coordinating with the BORC in developing accurate project cost estimates (including both direct and indirect costs) and ensuring cost rates are accurate and up-to-date.
Coordinating with the BORC on securing all necessary approvals and signatures for the reimbursable agreement, including CB’s signature.
Coordinating with the BORC on accounting for reimbursable costs, billing amounts, and reimbursable earnings.
Negotiating the agreement with the Buyer. If the Buyer does not agree to the cost estimates, the RPC should contact the IRS reimbursables team for support.
Ensuring a binding agreement is authorized between the IRS as the Seller, and the customer as the Buyer before reimbursable work begins.
Providing a copy of the signed agreement to the BORC.
Maintaining documentation on statutory authorities, apportionments, contracts, legal opinions, and other substantiating materials.
Maintaining a final copy of the signed reimbursable agreement, including cost calculations and supporting documentation or basis for amendments to the agreement.
Processing earnings transactions promptly.
Using IFS reports and analysis tools to identify and promptly address accounting errors and misalignments during the fiscal year.
Alerting the BORC to instances when more budget authority may be needed.
Establishing advance plans and closing out reimbursable projects in a timely manner.
The BORC is responsible for:
Coordinating with the RPC in reviewing and evaluating project cost estimates for accuracy, implementing adjustments, as necessary, and resolving accounting issues.
Sending reimbursable direct, indirect, and overhead cost estimates to CB for approval.
Requesting funded program numbers for new reimbursable projects by e-mail.
Providing a copy of the final, signed reimbursable agreement to CB and BFC.
Developing and providing forecast of revenue and budget estimate documents to CB in the CB-requested format.
Promptly parking accurate earnings in IFS according to the method of billing.
Maintaining appropriate financial oversight of reimbursable earnings and ensuring collections are received according to the billing and payment frequency set in the agreement.
Monitoring earnings to assess whether intervention is needed to address earnings postings that fall below projections.
Monitoring FTE alignment.
Notifying the RPC of changes to the agreement amount and providing a copy of the updated reimbursable agreement for increases.
Obtaining signatures from all parties, including CB, for agreements whose estimates have increased. For agreements where projections need to be reduced, agreements do not need to be signed again.
Alerting CB to the need for more budget authority and providing accurate estimates and explanations for the additional budget authority needed.
Coordinating with and providing support to CFO on the year-end closeout of reimbursable projects.
The FPM/Funding Official:
Ensures proper financial oversight of BU's reimbursable agreements.
Reimbursements are budgetary resources that are subject to apportionment and are bound by the requirements and restrictions placed on appropriated funds. To properly administer and ensure effective funds control of the reimbursable program, certain safeguards are incorporated in the IRS administrative funds control procedures and inter/intragovernmental agreements for goods and/or services. If funding and reimbursement requirements are prescribed by law and are inconsistent with IRS guidance, legal requirements take precedence.
Like basic operating appropriations, expenditures against reimbursable budget authority or availability are limited at all times to the lesser of the approved apportionment or the budgetary resources available.
The BUs should institute procedures for administering the agreement and include the following requirements:
Ensure that the estimated cost of goods and/or services and delivery date are not exceeded.
Coordinate and administer the agreement within approved terms and conditions when more than one BU is involved.
Ensure prompt billing according to agreement terms.
Before the start of the fiscal year, CB submits a SF-132 , Apportionment and Reapportionment Schedule, to OMB to request an initial apportionment for the reimbursable budget for the following fiscal year.
After OMB approval, CB assigns the reimbursable budget in IFS from the appropriations level to the apportionment level and on to the authorization level for earnings to be posted against.
If BUs indicate via revised Form 7600A, IAA General Terms and Conditions (GT&C) Section and Form 7600B, IAA Order Requirements and Funding Information (Order) Section or Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities that more funds are needed than are available in the apportionment, CB will request an increased apportionment from OMB.
Before the start of the fiscal year, CB will request reimbursable estimates from BUs. These estimates must provide adequate reimbursable funding to support reimbursable operations during the upcoming fiscal year.
Monitoring and analyzing reimbursable earnings against reimbursable authority is critical to knowing whether payments are occurring accurately and on schedule. BORCs must monitor individual projects based on the billing frequency set up in the agreement. Consistently monitoring progress toward a 100 percent earnings collection ensures proper oversight of reimbursable expenditures for each project.
BORCs should also perform quarterly tracking of all project earnings to assess whether intervention is needed to address earnings postings that fall below projections.
RPCs should renegotiate any projects that are expected to exceed agreement projections. If earnings are significantly lower than originally projected, IFS projections must be reduced. However, it is not necessary to renegotiate those agreements with reduced earnings levels.
Any administrative modification, such as accounting code changes or deobligations, should be addressed promptly to ensure accurate earnings are posted in IFS.
BFC issues standard billings according to the agreement billing frequency and may contact BUs if earnings fall behind schedule.
Year-end earnings must reach 100 percent by the date established in the Year-end Close Guidelines. See IRM 1.35.15, Administrative Accounting, Annual Close Guidelines.
The type of Buyer, kind of agreement, and funding arrangements affect the level of detail in the agreement terms and conditions, the billing and payment method, and the accounting system transactions that come into play. See IRM 22.214.171.124.1, Funding Arrangements, and IRM 126.96.36.199.2, Types of Agreements. These sections provide additional guidance on determining what type of agreement to execute and completing agreement forms.
Reimbursable agreements must cover only a single fiscal year unless multi-year funds are available from the Buyer. When multi-year funds are available from the Buyer, a single Form 7600A, IAA General Terms and Conditions (GT&C) Section, may be signed to match the term of the multi-year fund, but a new Form 7600B, IAA Order Requirements and Funding Information (Order) Section, must be signed every year. In addition, some Direct-Charge Reimbursable Fund Agreement obligations can be initiated in the funding year and extend past September 30.
There are several types of funding arrangements depending on statutory authority influencing the need to provide goods and/or services. Agreements may be for procurement, non-procurement, or other funding arrangements that fall into these categories:
Funds-In Agreement is an agreement in which another agency/party reimburses the IRS for goods and/or services to be provided by the IRS. A Funds-In Agreement is captured on either Form 7600A, IAA General Terms and Conditions (GT&C) Section, and Form 7600B, IAA Order Requirements and Funding Information (Order) Section (federal), or Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities (non-federal).
Memorandum of Understanding (MOU) is an agreement between agencies or organizations that may be used in conjunction with Form 7600A, IAA General Terms and Conditions (GT&C) Section, and Form 7600B, IAA Order Requirements and Funding Information (Order) Section, or Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities. The terms and conditions of the MOU must comply with the authorizing language. In the case of certain training reimbursables and with the approval of the Servicewide Reimbursables Team, a Standard Form 182, Authorization, Agreement and Certification of Training, may be used in place of the Form 7600B, IAA Order Requirements and Funding Information (Order) Section.
No-Funds Interagency Agreement is an agreement between federal agencies for the mutual benefit of the participating agencies. Each agency absorbs its own costs on a non-reimbursable basis. The combination of an MOU and Form 7600A, IAA General Terms and Conditions (GT&C) Section, and Form 7600B, IAA Order Requirements and Funding Information (Order) Section, may also be used for no-funds agreements.
Reimbursable agreements fall into three main categories:
Nongovernment and state, local, and foreign governments.
Intradepartmental (U.S. Treasury Bureaus).
Each type of agreement is accounted for separately in IFS under one of three distinct USSGL Accounts.
Reimbursable agreements with other Federal agencies (including Treasury) use Form 7600A, IAA General Terms and Conditions (GT&C) Section, and Form 7600B, IAA Order Requirements and Funding Information (Order) Section, or in the case of certain training reimbursables, a Standard Form 182, Authorization, Agreement and Certification of Training, may be used in place of the Form 7600B, IAA Order Requirements and Funding Information (Order) Section.
Government agreements are normally processed as interagency agreements and must be in conformance with TFM Bulletin No. 2014-07 (September 3, 2014), Intragovernmental Business Rules.
For Federal customers, billing occurs on a monthly basis after the work has been completed unless specifically approved by FR.
Reimbursable agreements with non–federal entities use Form 14417, Agreement Covering Reimbursable Services With Non-Federal Entities and require the same critical elements contained in Form 7600-A, IAA General Terms and Conditions (GT&C) Section and Form 7600-B, IAA Order Requirements and Funding Information (Order) Section.
Advance payments are required for agreements with state, local, and foreign governments, commercial organizations, and private businesses because their accounting systems do not interface with the Federal Government’s accounting systems.
For non-federal customers, billing occurs on a monthly basis after the work has been completed unless specifically approved by FR.
See the Reimbursables Standard Operating Procedures available from the Servicewide Reimbursables Team.
All BUs executing reimbursable agreements or Memoranda of Understanding (MOU) with federal agencies, states, and other external stakeholders must comply with IRM IRM 1.2.40, Delegations of Authority for Organization, Finance and Management Activities.
If the MOU, implementing agreement, or other agreement allows for the exchange of taxpayer return or taxpayer return information, the document must be coordinated with the Director, Privacy, Governmental Liaison and Disclosure before the delegated authority may execute the agreement.
Other-than-full overhead rates that deviate from the standard reduction allowed on the overhead worksheet and that are not related to reimbursable detailee exemptions must be reviewed and signed by the ACFO, Corporate Budget or the ACFO’s designee.
Cost assignment methods must be consistent with the Federal Accounting Standards Advisory Board (FASAB) accounting standards.
One of the five standards for federal managerial cost accounting, as stated in SFFAS No. 4, is "determining the full costs of government goods and/or services." The full cost of an output is the total amount of resources used to produce the output. This includes direct and indirect costs that contribute to the output, regardless of funding sources. The full cost of an output produced by a BU is the sum of:
The cost of resources consumed by the BU that directly or indirectly contributes to the output.
The cost of identifiable support services provided by sustaining BUs within the IRS.
When reimbursable projects use the same types of goods and/or services as direct-funded projects, the reimbursable project costs will use the same rates and basis of consumption as the direct-funded projects.
Recognition of Earned Reimbursements: In accordance with the SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, "earned" or "exchanged" revenues are earned once the Seller provides goods and/or services to the Buyer for the amount negotiated in the agreement. In short, the payment or revenue should not be recognized until costs are incurred from providing goods and services.
Direct costs are costs that can be specifically identified with a single program area, activity, product, or service. Typical direct costs for the IRS include the following:
Salaries, benefits, and other employee compensation directly related to the work being performed under the reimbursable agreement.
Accrued annual leave, compensatory time, etc.
Materials and supplies.
Travel and relocation costs.
Any other costs that are directly attributable to the work outlined in the reimbursable agreement.
Indirect costs are the costs of resources that are jointly or commonly consumed by two or more BUs' activities but are not specifically identifiable to a single product or service. For the purpose of reimbursable agreements, indirect costs include sustaining BU costs or costs that are centrally funded by BUs, such as Agency-Wide Shared Services (AWSS), Information Technology (IT), and Human Capital Office (HCO), among others. These BUs provide support to the IRS as a whole.
Examples of services for which there may be indirect costs include:
General management and administrative services of sustaining organizations.
Facilities management and ground maintenance services (security, rent, utilities, and building maintenance).
Procurement and contracting services.
Financial management and accounting services.
Information technology services.
Services to acquire and operate property, plant, and equipment.
Publication, reproduction, graphics and video services.
Research, analytical, and statistical services.
Human resources/personnel services.
Library and legal services.
Indirect costs can be incurred within a BU as a result of its own activities or when the BU receives products or services generated by other BUs. The BU’s indirect costs are assigned internally in accordance with cost allocation methodologies outlined in IRM 188.8.131.52.5, Cost Allocation Methodologies.
The majority of indirect costs accumulate within identifiable BUs. However, some costs such as depreciation and facilities costs cannot be linked to an identifiable BU. In those instances, such costs are allocated based on cost allocation methodologies.
Determining the cost estimate of a reimbursable agreement requires the identification of the projected full cost of the products and services that are to be provided to the Buyer. Each reimbursable project is unique, and determining the cost estimate can vary based on the requirements of the project.
The FASAB, SFFAS No. 4, Managerial Cost Accounting Concepts and Standards for the Federal Government, issued July 1995, establishes internal costing standards to accurately measure and manage the cost of federal programs. SFFAS No. 4 provides an order of preference framework for cost assignment. The cost assignment process links accumulated costs with cost objects in specific reporting periods. There are three methods of cost assignment:
Directly trace costs wherever feasible and economically practicable.
Assign costs on a cause-and-effect basis.
Allocate costs on a reasonable and consistent basis.
These methods should be used by RPCs to develop full-cost projections for the cost of the products and/or services provided during the course of the reimbursable project(s). This includes labor, non-labor, and overhead costs.
The RPC must calculate direct labor and non-labor costs using a methodology that conforms to the guidance discussed above.
The RPC must provide the direct cost methodology to the CB Reimbursables Team for review and signature.
As long as direct costs are based on a sound methodology, there is no required format for presenting the direct cost methodology. However CB has developed a Direct and Indirect Cost Template for optional use.
Rolling over cost estimates from the previous year is not an acceptable methodology. Cost estimates must be updated every time a new agreement is negotiated.
To determine the appropriate overhead rate for each project (by fiscal year), reimbursable project owners must use the overhead worksheet developed by the CB. This worksheet includes standard overhead rates for each category of overhead and allows the RPC to exempt certain categories of overhead that are not applicable for a specific agreement.
There are separate rates (and therefore separate overhead worksheets) for direct/support BUs and for sustaining BUs. This is because the overhead methodology for direct/support BUs includes all labor performed by sustaining BUs as overhead, while the methodology for sustaining BUs logically does not.
Direct/Support BUs include Appeals, Counsel, Criminal Investigation, Large Business & International, Small Business/Self-Employed, Tax Exempt & Government Entities, Taxpayer Advocate Service, and Wage & Investment.
All BUs not listed above are sustaining BUs.
To complete the reimbursable overhead worksheet, the RPC should be aware of the following:
The Reimbursable Overhead Worksheet includes percentage rates for each category of overhead costs.
Labor overhead costs capture salary and benefit costs of sustaining organizations such as Information Technology, Agency-Wide Shared Services, Human Capital Office, and others whose mission is to provide essential support functions to all IRS employees. Because all IRS employees benefit from the services provided by these organizations, labor overhead costs cannot be exempted without approval from the Director, Budget Execution. Such exceptions will be rare and require an explanation.
Non-labor overhead costs are those specific services provided to IRS employees. If some of these non-labor services are not provided to support the specific reimbursable work, then they may be exempted. For any non-labor cost that is exempted, an explanation must be provided.
If non-labor costs needed to support the agreement are known, they should be calculated as direct costs and excluded from the indirect cost calculation.
The customized overhead rate is multiplied by direct labor cost to calculate overhead costs. Direct labor costs are defined as salary and benefit costs for the specific services provided through the reimbursable agreement.
All overhead earnings will be posted to a specific accounting string determined by CB and disseminated by the Servicewide Reimbursables Team.
Cost increases that occur during the performance of the agreement must also be recovered.
Cost estimates for reimbursable projects recurring from one fiscal year to another should be recalculated each year.
Reimbursable Project Coordinators should make Buyers aware of the requirement to include overhead costs in their agreements and should work with them as needed to develop initial cost estimates. In many cases, negotiation of overhead costs adds time to the process. RPCs should begin this process months in advance of when the work will be performed whenever possible.
Before collecting signatures for a reimbursable agreement, RPCs must submit the following cost documentation to the reimbursables team for approval and signature:
Methodology used to calculate direct and indirect costs.
Overhead worksheet specified by the Servicewide Reimbursables Team.
The Economy Act authorizes the performing agency to incur obligations or expenditures for another agency after a reimbursable agreement is executed and before full payment is received. The Seller collects regular payments from the Buyer during the fiscal year once goods and/or services are delivered. These payments are adjusted against actual costs as determined by the agency filling the order.
The Economy Act allows reimbursable payments to be made in advance or when the goods and/or services are delivered. These payments may be for any part of the estimated or actual costs as determined by the agency filling the order. Advance payments will be adjusted based on the actual costs incurred.
Comptroller General decisions provide for actual and estimated cost definitions. Under these decisions, the actual cost method of charging is based on using pertinent, realistic costs and permits estimated costs for some expenses. If capturing certain actual costs is not feasible, then a reasonable cost estimate is appropriate. This applies to costs that are extremely time consuming or when actual costs are not yet available.
Monthly billing is the preferred frequency for all agreements. For these agreements, actual costs should be captured on a monthly basis to reflect the work that has occurred during that month. It is not appropriate to simply divide the annual cost into equal monthly payments unless the cost of the work performed is consistent from month to month.
When an employee is detailed to another government agency, the responsibility for recommending, approving, and managing the accounting of the award rests with the Seller, regardless of the type of award. This policy is intended to prevent the duplication of employee awards by both the Seller and Buyer sides of the reimbursable agreement.
The best time to discuss the award budget and method of conveying the performance evaluation results and award is during the agreement negotiation process.
This section provides the processing requirements and IFS document transactions needed to complete reimbursable business. Reimbursable earnings may be collected under a non-advance agreement or an agreement paid in advance.
All reimbursable agreements require the development of a forecast of revenue and budget and the completion of certain IFS transactions. For detailed instructions, see the Reimbursables Standard Operating Procedure available from the Servicewide Reimbursables Team.
From the initial Budget Estimates Worksheet to the final earnings transaction and closeout of the reimbursable project, the budget and accounting transactions conform to one of two collection methods: advance payments or non-advance Intragovernmental Payment and Collection System (IPAC) payments.
Advance payments are used for non-Federal customers. They are most often one-time payments with opportunities for upward/downward adjustments as the project nears completion.
Non-advance payments are used for Federal customers. They are collected under an IPAC method and follow a pre-set billing frequency (e.g., monthly, quarterly, or lump-sum). For the most part, opportunities for upward/downward adjustments to non-advance reimbursables occur during the fourth quarter of the fiscal year. The processing step for these collection methods is found in IRM 184.108.40.206.1.2, Indirect/Overhead Costs.
IFS supports the following reimbursable accounting transactions:
Forecast of Revenue (FMV1, FMV2, & FMV3) and Transfer Budget (FMBB).
Schedule of Reimbursable Earnings (FV50-BZ).
Post Reimbursable Earnings (FBV0–BZ).
Advance Payment Receipts (F-29-DZ).
Advance Payment Earnings Post & Clearing (FB05-AD, BW, and DR).
Post Credit Memo (FB75–DG).
Collection of Receivable (F-28–DZ).
Record Cash Refund (F110–IP).
General Ledger Account Posting (FB50-DZ).
Automatic Payment Transactions: Status (F110-ZP).
The validity of reimbursable collections data reported in the central accounts and published in the financial reports of the U.S. Government depends upon the accuracy of the monthly statements of transactions submitted by all departments and agencies. The timeliness of reports depends on strict compliance with BFS-assigned deadlines and the BFC monthly billing and collection timetables.
Adhering to the monthly reporting cycle is a critical element in maintaining IRS internal accounting controls. The IRS processes transactions according to formal IFS posting models. The posting models require certain transactions related to the monthly processing cycle be completed within the same month.
Late entries or those posted outside of the monthly cycle cause accounting relationships to become out-of-balance. Correcting an account misalignment requires the Office of Financial Reports to reconcile and complete adjustments before the Statement of Transactions (FMS 224) can be forwarded to BFS.
Most reimbursable earnings are considered offsetting collections that should be identified with IRS apportioned reimbursable authority. Reimbursable expenses are initially recorded against the Direct Fund appropriation codes ending with a "D" . These expenses must be transferred to the Reimbursable Fund accounting string ending with an "R" . The purpose of the Schedule of Reimbursable Earnings (FV50) is to transfer expenses from the Direct Fund to the Reimbursable Fund. When the expenses are moved under this transaction, it indicates or triggers a billing being issued to the Buyer.
IFS earnings posted against an erroneous customer number must be reversed. Line items with an erroneous Buyer number must be deleted on the Forecast of Revenue document (FMV1). This involves closing or "setting to complete" the erroneous accounting line and creating a new accounting line for processing future transactions.
The instructions for completing an FV50 can be found on the FM website.
Beckley Finance Center prefers electronic submission of reimbursable business accounting transactions, justifications, and documentation. However, hard copies are also acceptable. The following e-mail and mailroom addresses are most commonly used for forwarding these materials.
Hard copies of advance payment checks, money orders, and supporting documentation should be sent to the first mailing address below. The second address is intended for Federal Express-type mailings.
Beckley Finance Center
P.O. Box 9002
Beckley, WV 25802-9002
Beckley Finance Center
110 North Heber Street
Beckley, WV 25801-4501
BFC assigns specific staff to each BU's reimbursable projects. The reimbursable project inventory and contacts list is available on the Beckley Finance Center website.
A complete list of all financial codes can be found in the Financial Management Codes Handbook, which is revised annually and available from CB and on the CB website.
A funded program code is referenced on each agreement and is a critical data element. The funded program code is a unique, ten-character alphanumeric code.
A funded program (internal order) code must be established before reimbursable documents can be processed in IFS.
Corporate Budget, in conjunction with the BUs, determines which funded program codes will be rolled over for a new fiscal year and which new codes need to be established during the course of the fiscal year.
A snapshot of reimbursable agreement funded program codes is available in the Financial Management Codes Handbook. A live list of reimbursable agreement funded program codes is available in IFS using transaction KOK5.
New Buyer numbers can be requested from BFC. To obtain a new Buyer number, submit a copy of the new project agreement to your BFC contact, and ensure the TIN/EIN and business address is included.
OMB Circular A-11 provides guidance on managing prior-year reimbursable agreements. See Circular A-11, Section 20, Terms and Concepts.
In instances where there has been an overpayment of invoices or where advance payments exceed needs, contact BFC for guidance on the treatment of refunds.
BUs closing out reimbursable agreements at the end of the fiscal year must comply with IRM 1.35.15, Administrative Accounting, Annual Close Guidelines, which assists BUs and operating divisions with facilitating and monitoring their year-end close activities.
The following IFS reports support reimbursables monitoring and analysis:
Status of Funds Report: ZSOF_ECC to check reimbursable fund alignment with project accounting line details.
Earmarked Funds Journal: S_P99_41000147 displays reimbursable projects for posted earnings and open balances.
Reimbursable Audit Report: ZOFR011 provides a summary of project by customer and GL Account.
BW2900 SOAF Reports provides historical FTE and budget statuses by fiscal year periods and various sorting options.