U.S. Geological Survey Instructional Memorandum
No. APS 2003-12
Issuance Date: May 1, 2003
Expiration Date: April 30, 2004
Archive Date: October 23, 2008
Subject: Monthly Review of Unbilled Balances and Outstanding Advances
Reference: Superseded by APS 2004-08.
1. Purpose. This Instructional Memorandum (IM) prescribes procedures for the monthly review of unbilled and outstanding advance balances and for reporting the status of those balances. This IM supersedes previously issued procedures pertaining to the review of these balances, including USGS IM OFM 2002-01, by implementing a more thorough review of reimbursable agreements and unbilled and outstanding advance balances.
2. Issues. The Report #289A, Status of Billings and Collections by Agreement Number, lists reimbursable agreements and their earnings, unbilled, and advance balances. A number of these agreements have excessive or abnormal balances. Offices should pay particular attention to the situations listed below that create excessive or abnormal balances on the 289A. Examples of these balances on the 289A are detailed in section 5 below:
A. Excessive unbilled balances and outstanding advances. As of the close of fiscal year (FY) 2002, the unbilled and outstanding advance balances totaled $126 million and $56 million, respectively. More than $15 million of the unbilled balance was earned in prior fiscal years but not billed by the end of FY 2002.
B. Abnormal (negative) Earnings and Unliquidated Obligations (EUO) balances. As of the close of FY 2002, there was approximately $2 million in ‘negative’ earnings (credit expenditure balances) associated with agreements.
C. Abnormal (negative) Unbilled balances. As of the close of FY 2002, the 289A included more than $4 million in credit unbilled balances that were actually advances.
D. Bills not issued on a “timely basis”. Issuing bills
on a timely basis means issuing bills as soon as possible after expenditures
are earned and issued in accordance with the terms of the agreement. Bills not
issued timely create excessive unbilled balances and indicate an internal control
problem. In order to determine when bills are to be issued, all U.S. Geological
Survey (USGS) agreements are to include concise terms for issuing bills timely
to customers for expenditures incurred.
A. USGS billing offices are responsible for reviewing the 289A monthly to verify that bills and collections processed during the month were recorded against the appropriate agreement number. Responsibilities also include initiating the review of 289A report (289A Review) described in section 4 below to correct billings or advance balances, and for preparing a quarterly certification of the 289A Review in accordance with USGS IM APS 2003-14.
B. The Office of Fiscal Services and Branch of Fiscal Service offices (Fiscal Service offices) are responsible for reviewing 289A Reviews submitted by the billing offices and approving actions requested to correct billing or advance balances. Responsibilities also include forwarding the 289A Reviews to the Office of Financial Management (OFM) Accounts Receivable Branch (ARB), and for preparing a consolidated quarterly certification of the 289A Reviews in accordance with USGS IM APS 2003-14.
C. The OFM ARB is responsible for reviewing the 289A report and for
processing actions included on the 289A Reviews forwarded by the Fiscal Services
4. Review Procedures/Actions: A comprehensive review of unbilled
balances and outstanding advances is required to ensure that unbilled and advance
amounts reported on 289A report are accurate. These reviews must be based on
the most current 289A report. To ensure timeliness of our financial data, these
reviews are performed on a monthly basis.
Actions taken by the billing offices or actions requested by the billing offices for ARB to initiate are to be documented on the 289A Review (Figure 1), which includes two parts. Part A is completed by the billing office to document actions initiated by that office or requested by that office through their Fiscal Services office for ARB to process (requests to cancel a bill, to move outstanding advances, etc). Part B is completed in order to provide ARB with the agreement information to move collections/advances. The completed 289A Review forms are to be completed by the billing offices and forwarded to their servicing Fiscal Services office by the 15th of the following month. The Fiscal Services office will provide a consolidated report to ARB by the 20th of the following month.
A. Individual transactions. The 289A lists individual billing and collection transactions by agreement number that were processed in the Federal Financial System (FFS) during the report month. These transactions are listed below and are to be reviewed by the billing office each month to ensure that the transactions were recorded to the appropriate agreement:
BD – Billings processed as accounts receivable.
CR – Collections/advances received and normally applied to BD transactions.
OP – Intra-Governmental Payments and Collection (IPAC) billings processed
SQ – Non-cash transactions created by the Project Cost Accounting Sub-system (PCAS) process, which applies expenditures to the advance balance in an agreement’s Customer Agreement Line Inquiry Table (CALT) record.
WR – Write off of billed amounts.
Transactions that are not recorded properly in the 289A should be listed in Part A of the 289A Review indicating the error and the corrective action to be initiated by ARB. In addition to the monthly transactions listed on the 289A, the Customer Agreement Collection and Receivable (CACR) table includes a history of all transactions by agreement number.
As an example, the budget fiscal year (BFY) 01 Agreement #TN0000100 in Figure
2 includes four individual transactions (BD, CR, OP, SQ) that were processed
in the report month. Note that the CR transaction (collection/advance) references
a BD (bill) number. This BD is the account receivable that the collection is
liquidating. Also, note that the IPAC transaction (OP) is recorded as a billed
and collected amount. The SQ transaction records the distribution of earnings
to the amount collected.
In the sections below, the following terms are included on the 289A or the FFS CALT table, and are defined as:
(1) Bal Unbilled (Unbilled balances) – Amounts that have been earned under an agreement but not yet billed to the customer.
(2) EUO – Expenditures and burden amount on those expenditures plus outstanding obligations that have not been paid and the burden amount on those obligations.
(3) Outstanding Advances (Advances) – Amounts collected in excess of expenditures.
(4) Cumulative Amount Billed (billings) – Total amount billed under an agreement.
(5) Cumulative Amounts Collected (Collected amount) – Amounts recorded as Collections or Advances.
(6) Advance Used – The amount of expenditures applied to advance collections.
(7) Burden Amt – The burden assessed on expenditures.
(8) Oblig Burden – The burden assessed on Unliquidated Obligations.
B. Agreements. Agreements are recorded as CALT records and are summarized by cost center in the 289A report. Signed agreements are to be entered into BASIS+ immediately upon signing.
C. Unbilled balances. Unbilled balances on the 289A are calculated as EUO amount less the cumulative amount billed under a reimbursable agreement. The CALT record in FFS should be reviewed to determine that the actual earnings have been billed. Unbilled amounts should be reviewed to ensure that billings are in accordance with the terms of the agreement. Agreements that have incurred expenditures and have not been billed in accordance with the terms of the agreement should be billed immediately. Amounts that have not been billed in accordance with the terms of the agreement are in violation of those terms and will create excessive unbilled balances. Billing actions to be taken, or a justification as to why billing in accordance with the agreement will not be initiated, are to be noted in Part A of the 289A Review.
Examples of unbilled balances listed in the 289A are included in Figures 2-8 and further described in Section 5.
D. Outstanding Advances. Outstanding advance balances on the 289A are calculated based on the cumulative amounts collected less earnings listed on the CALT record. The calculation of outstanding advances excludes obligations and obligation burden balances on the CALT record. The outstanding advance balances should be reviewed together with the unbilled balances to ensure that collections/advances have been recorded accurately, and to determine if advances should be moved between agreements or refunded to the customer. Actions to be taken are to be noted in Part A of the 289A Review. Since the advance calculation excludes obligations, it is suggested that the CALT and Fiscal Year Project/Customer Agreement records in FFS be included in the review to verify balances.
Examples of advance balances listed in the 289A are included in Figures 2-8 and further described in the Section 5.
(1) Fixed price agreements. When advance balances exist in fixed price agreements, billing offices and/or the appropriate Fiscal Services offices should review these agreements and any outstanding advance balances in accordance with USGS IM APS 2003-08.
(2) Reimbursable agreements (non-fixed price). Where advance balances exist in a reimbursable agreement, a review is required to determine if the balance is to be moved forward to a continuation or extension of the agreement, or refunded to the customer. For example, if an outstanding advance exists for a prior BFY agreement, and the agreement is extended to continue reimbursable work into the current BFY, the advance may be moved forward to cover costs incurred in the current BFY. Requests to move advances are to be included in Part B of the 289A Review.
(3) Refunding collections. If work under the agreement is complete
or additional work is not to be continued under an agreement, the billing office
is to notify the customer in writing or via email of the advance balance remaining
on the agreement to be refunded to the customer. For refunds to be issued to
a Federal customer, the billing office is to process a form 9-2048, IPAC Billing
Request, indicating a credit amount on the form, and note in
Part A of the 289A Review that a credit IPAC to refund the advance will be initiated.
For refunds to be issued to a non-Federal customer, the billing office
is to notify the customer of the advance balance remaining on the agreement
and that the balance will be refunded. The billing office is to request the
amount be refunded to the customer in Part A of the 289A Review. If the customer
does not want the funds returned, the customer must notify the USGS in writing
or via email. The billing office will attach a copy of the customer’s
request to the 289A Review and indicate in Part A that the customer does not
want the advance balance refunded. Based on the action included in the 289A
Review, ARB will initiate action to either refund the advance balance to the
customer or transfer the balance to Treasury.
E. Supporting documentation. Review forms that include advances/collections to be moved between agreements require a copy of the CALT records of those agreements as supporting documentation. Copies may be provided electronically in Microsoft Word (Word) or other format along with the Review form. One method to make copies of the CALT in Word format is as follows:
(1) Open a blank Word file and set the font to COURIER NEW and font size to
(2) In FFS, access the CALT record that advances/collections are being moved from;
(3) Click the COPY button on the Tool Bar at the top left of the screen (if the COPY button is not available, click the EDIT command then click COPY);
(4) Click the Word file you are creating on the Task Bar at the bottom of the screen;
(5) Right-click the mouse at the cursor and click PASTE (if the COPY button is not available, click the EDIT command then click PASTE). A copy of the CALT screen should paste in the correct format;
(6) Hit ENTER to return the cursor to the left margin;
(7) Click back to FFS and repeat this process to copy the remaining CALT agreement screens.
(8) Save the Word file and attach it to the email transmitting the Review form.
5. Examples. Examples of individual transactions listed on
the 289A are described below. Included below are examples of ten agreements
that include unbilled and/or advance balances on the 289A and the reasons these
balances occur. Examples of the 289A and CALT records are included on Figures
A. Agreements with billings and collections in excess of the earnings and obligations.
Both BFY 01 Agreements TN0000100 and TN0007100 (Figure 2) include billings and collections for the entire agreement amount in excess of their EUO. A review of the CALT records for these agreements (Figure 3, items A and B) indicates there are no obligations; therefore, the entire amount of the EUO consists of earnings. Since the amounts billed are in excess of EUO, the unbilled balance is a negative amount. Since the billed amount has been collected in full and exceeds earnings, an outstanding advance on the 289A is created and is equal to the (advance amount less the advance used). These balances will remain until additional expenditures are incurred or the advance balance is moved, refunded, or sent to Treasury.
Similarly, Agreement ID0104700 (Figure 6) has been billed for the entire amount of the agreement and has an advance balance of $3,723.64 because advance collections (advances on the CALT) are in excess of earnings. This agreement should be reviewed to determine if the advance should be moved forward to a continuing agreement, refunded, or sent to Treasury.
Agreement ND0001400 (Figure 7) has been billed for the entire
amount of the agreement; however, the agreement has a negative unbilled balance.
This balance occurred because a portion of the amount collected is recorded
as ‘collections’ instead of ‘advances’ (Figure 8, item
A) on the CALT record. This collection was a result of a Direct State Services
(DSS) voucher processed by ARB, which posted as a ‘collection’.
Agreements with amounts recorded as ‘collections’ instead of ‘advances’
will result in a credit Unbilled balance instead of an outstanding advance on
the 289A. Since the negative balance is
actually an advance (amounts collected exceed expenditures), this agreement should be reviewed to determine if the balance should be moved forward to a continuing agreement, refunded, or sent to Treasury. In FY 2003, the procedure for processing DSS expenditures was changed and will no longer create negative balances.
FY 02 Agreement 1422RAI000046A (Figure 7) also has a negative unbilled balance because the amount collected is recorded as a ‘collection’ in the CALT record (Figure 8, item C). This collection is a result of a FFS-generated IPAC billing. Similar to the agreement above, agreements with collected amounts recorded as ‘collections’ instead of ‘advances’ will result in a credit unbilled balance instead of an outstanding advance on the 289A. This agreement should be reviewed to determine if the balance should be moved forward to a continuing agreement, refunded, or sent to Treasury.
The above situations can occur in both standard reimbursable and fixed-price
agreements. As described in section 4 above, advance balances for reimbursable
agreements may be moved to cover expenditures incurred if the work under
the agreement is continuing into the next year, or are to be refunded to the
customer or forwarded to Treasury. When such outstanding advances exist for
fixed-price agreements, the balance can be moved to another fixed-price
agreement in accordance with USGS IM APS 2003-08. The 289A Review should indicate
the actions, if any, to be taken to correct unbilled or advance balances.
B. Agreements with negative earnings. Several actions can contribute to negative earnings being recorded on the 289A, including the moving of expenditures recorded to an account that supports a reimbursable agreement to another agreement, or credit expenditures and burden from indirect-cost transfer (IV) transactions. The credit expenditures create a negative unbilled balance. In BFY 01 Agreement CT0101800 (Figure 6) and the CALT record (Figure 5, item C), credit IV transactions created the credit earnings and burden amount. The 289A record also includes an advance balance since there are no expenditures to apply to the advance collected.
C. Billings not initiated. The FY 02 agreement TN0000100 (Figure 2) has an EUO amount totaling $99,396.69. A review of the CALT record (Figure 3, item C) indicates that of the EUO amount, expenditures totaling $58,268.69 (expenditures of $35,419.11 and burden amount of $22,849.58) have been incurred. Since only $7,308.56 has been billed, an unbilled balance of $92,088.13 is created.
Agreement ID0101000 (Figure 6) indicates an unbilled balance of $134,550.00 because the agreement has earned $134,550.00 and a bill has not been issued. The 289A Review should indicate that bills will be processed against these agreements or an explanation noted in Part A justifying why bills will not be processed.
D. Agreements with billings that include obligations. Agreement ER0100800 (Figure 4) has a credit unbilled balance (amounts billed in excess of EUO) of $3.27 and an outstanding advance balance of $72,062.10. The agreement has earnings of $28,947.84 (expenditures of $28,658.39 plus burden amt of $289.45 on the CALT (Figure 5, item B)), which create the advance used amount of $28,947.84 on the CALT record. The advance amount of $101,010 less the advance used of $28,947.84 creates the outstanding advance of $72,062.16 on the 289A. This agreement should be reviewed to determine if the obligations are valid.
FY 01 Agreement 1422RAI000046A (Figure 7) has been billed for the entire amount of the agreement and earnings and has a $0 unbilled balance. However, the EUO includes obligations of $105,391.36 (Figure 8, item B). Since the outstanding advance balance excludes obligations, the amount of the obligations creates an advance balance. This agreement should be reviewed to determine if the obligations are valid.
If there are questions pertaining to these requirements, please contact your Fiscal Services office or Bruce Wood, OFM, on 703-648-7665 or e-mail: firstname.lastname@example.org.
Carol F. Aten
Chief, Office of Administrative Policy and Services