Federal Investments Seminar

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Federal Investments Seminar

• INVESTMENT/BORROWING/
• FEDERAL CREDIT REFORM
• SUBCOMMITTEEPresented ByBILL FLEMING
• MAY 17, 2005

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BACKGROUND

• Subcommittee set up to address intragovernmental
  differences for the following Reciprocal
  Categories (RCPs)
• Investments
• FMS developed this plan to sufficiently identify
  and track intragovernmental material differences
  reported to FMS by the Federal Program Agencies
  (FPAs).

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Background (continued)

• Borrowing

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Background (continued)

• Current members include
• Ella Hughes-Bailey - Treasury FMS
• Richard Bennett - EPA
• Stephanie Brown - Treasury - BPD
• Susan.Chapman - Treasury - BPD
• Scott Chayette - DOE
• Trina Cook - Treasury - BPD
• Dan Decena Treasury/ office of the fiscal
  assistant secretary
• William Fleming - Education
• Veronica Freeman - DOL
• Jeanne Johnson-Education OCFO
• Gail Matthews - Education OCFO
• Eileen Parlow - FASAB
• Sheldonna Proctor - EPA
• Keith Rake - Treasury - BPD
• Wendy Stover-HUD
• Hayward Trapps -Treasury FMS
• Kristina Kaminski - SSA
• Letha, Holliday - SSA

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Future Actions

• Recruit additional members from agencies affected
  by investment/borrowing issues
• Review Intragovernmental Fiduciary Confirmation
  System (IFCS) reports for agencies with
  differences below current studies threshold to
  determine source of differences.
• Classify into groups already defined
• Discuss specific agency situations with BPD/FFB
  and agency personnel
• Produce narrative explaining differences by
  agencies

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Future Actions (continued)

• Detail current and future corrective actions
• Government-wide
• Individual agency

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Current Conclusions

• Bring Accounting Methodologies into Agreement
• Accounting for Premiums and Discounts (Effective
  Interest, Level Yield, Straight Line, Etc.)
• Zero Coupon Bonds Amortization Methodology
  (Effective Interest vs. Mark-to-Market)
• BPD staff reviewed the problem and issued a
  recommendation
• Treasury is currently reviewing the paper
• OMB Mediation Process for Unresolved Differences

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Current Conclusions (continued)

• Timing Differences
• Quarterly Borrowing Differences - Encourage
  agencies to accrue interest expense/payables at
  least quarterly (possibly using BPD accruals as
  the basis of the entry)
• Need to examine year-end cutoffs

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Current Conclusions (continued)

• Deposit Funds
• Researching Accounting Guidance
• Recommend changes to allow such investments to be
  coded as non-federal
• Recommend that additional Deposit Fund guidance
  be added to the Fiduciary Business Rules

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Current Conclusions (continued)

• Alleviating Accounting/Coding Errors
• Largest class of differences
• Probably the easiest to materially reduce
• For most agencies, federal balances for the
  subject SGL accounts are almost exclusively
  Treasury (TP 20).
• Adequate information exists through IFCS and
  FedInvest.com and other BPD reports available to
  trading partners
• FACTS I file is simple and can be edited manually
  if necessary
• IFCS/FACTS I/Quarterly F file assistance is
  readily available from Treasury
• Need to address quality control issues at
  individual agencies

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Current Conclusions (continued)

• Alleviating Accounting/Coding Errors (continued)
• Send special report to FACTS I/ F/GFRS preparer
  before transmission showing expected balances by
  SGL, Fund, and trading partner.
• IRAS provides feedback on IRAS/IFCS differences
  after the fact
• Close BPD/FFB IFCS window before quarterly F
  file windows to allow for additional oversight
  before reporting (IFCS window does close before
  the FACTS I window at year end.