U.S. Geological Survey Instructional Memorandum
No. APS 2004-08
Issuance Date: April 5, 2004
Expiration Date: April 3, 2005
Archive Date: October 24, 2008
Subject: Monthly Review of Reimbursable Agreements - Unbilled Balances and Outstanding Advances
Reference: This IM is replaced by Financial Operating Procedures (FOP) Handbook Chapters:18.2 - Status of Billings and Collections by Agreement Number Report (289A) with example attachments and FOP 23.2 Prior Year Activities.
Instructions: This Instructional Memorandum (IM) supersedes IM no. APS 2003-12
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 updates the procedures for reviewing reimbursable agreements and unbilled and outstanding advance balances, revises the form for reporting the status of unbilled and outstanding advance balances, and provides examples from the revised 289A report.
2. Issues. Federal Financial System (FFS) Report #289A, Status of Billings and Collections by Agreement Number, lists reimbursable agreements and their earnings, unbilled balances, and advance balances. A number of these agreements have 'excessive' balances. Agreements with unbilled balances that have not been billed in accordance with the agreement create excessive unbilled balances. Agreements with outstanding advance balances on agreements that have been completed create excessive advance balances. Cost centers are to review the 289A to identify agreements with excessive balances and initiate corrective actions.
A number of agreements also have 'abnormal' balances, which are created when agreements have 'zero funding' in FFS or have Bill End Dates (CAHT record) that have been exceeded. This situation prevents expenditures from being applied to liquidate the agreement's Advance Amount. Fiscal Services (FS) offices will be provided Crystal 'exception' reports by the Office of Accounting and Financial Management (OAFM), Receivables Management Section (RMS) for review and to initiate corrective action. Examples of various types of excessive and abnormal balances are described in Section 6 below.
A. The U.S. Geological Survey (USGS) cost centers are responsible for:
B. The Office of FS and Branch of FS offices are responsible for:
C. The RMS is responsible for:
The 289A report is a listing of reimbursable agreements from the CALT records in FFS and includes the calculated unbilled and advance balances as of the end of each month. The following terms are included on the 289A:
The following terms included on FFS CALT records pertain to the review of advances and unbilled:
5. Review Procedures/Actions. A comprehensive review of the monthly 289A is required to ensure that Unbilled and Advance balances reported on the 289A report are accurate. These reviews are based on the most current 289A report and/or CALT record (the CALT includes current data whereas the 289A includes balances as of the end of the month). To ensure accuracy and timeliness of our financial data, these reviews are performed on a monthly basis.
Cost centers are to review billing and collection transactions processed during the month for accuracy. A review of Unbilled balances and Outstanding Advances included on the 289A is required to determine if unbilled amounts should be billed (based on the terms of the agreements), or if balances received in advance from customers are appropriate.
Actions taken by the cost centers or actions requested by the cost centers for FS or RMS to initiate are to be documented on the 289A Review as shown in Figure 1. Part A is completed by the cost center to document actions initiated by that office or actions requested for FS or RMS to process (such as requests for FS to review an agreement balance, requests for RMS to refund or to move outstanding advances, etc.). The form is to include an 'X' in the "Action For" section indicating the office to complete the action. Part B is completed in order to provide RMS with the agreement information in order to move collections/advances. The Review forms are to be completed by the cost centers and received by their servicing FS office by the 15th of the following month. The FS will provide a consolidated Review to RMS by the 20th of the following month. A sample of a completed Review is included in Figure 1A. (Note: The completed Reviews in Excel should be saved with Page Setup Orientation set to 'Landscape' and Scaling Page Width set to "1." The number of pages of the document should be entered as the number of pages "tall.")
Agreements that have normal Unbilled balances on the 289A that are scheduled for FFS-generated billing via PC-Bill do not need to be included on the Review form unless required by the servicing FS office. For example, agreements with normal balances would include Unbilled balances that will be billed on the next PC-Bill cycle (such as agreements established to be billed quarterly). Normal Advance balances on the 289A resulting from an advance payment from a non-Federal customer collected in accordance with the terms of the agreement that is not yet completed would not need to be included on the Review form unless required by the servicing FS office.
A. Agreements. Agreements are recorded in FFS as CALT records and are summarized by cost center in the 289A report. Agreements are to be entered into BASIS+ immediately upon signing. This information is subsequently loaded into FFS through the nightly interface. Delays in entering agreements into BASIS+ delay the loading of the agreement data into FFS and prevent the processing of billing and collection transactions in FFS. Bills not processed into FFS timely understate the USGS receivable position. Collections not processed timely overstate the USGS receivable position creating inaccurate delinquent receivable balances and understated collections. These conditions represent internal control problems.
Agreements are input into FFS with a positive funding amount. A number of agreements in FFS have been drawn down to $0 in the 'Agreement' (funding) field on the 289A although the agreement has expenditure, unbilled, and/or advance balances. Agreement 02 502MN01402 in Figure 2 includes an example of an agreement with a $0 agreement balance but with billed and collected (Advance) balances. This agreement also has a $0 Expenditure balance indicating there may have been expenditures charged to the agreement that were subsequently moved. This results in overbilling (Billed amount exceeds Earnings) creating an abnormal negative Unbilled balance. If the expenditures were moved to another agreement, that agreement would most likely have an Unbilled balance since the billed/collection balance was not moved with the Expenditures. Similar agreements are to be included in the 289A review to determine if the agreement was drawn down appropriately and to initiate action to move the advance amount to the appropriate agreement if necessary, or initiate action to refund the advance to the customer. The RMS will be providing a list of these agreements to FS as an 'Exception' report for additional review.
B. Individual transactions. The 289A lists individual billing and collection transactions by agreement number that were processed in FFS during the report month. These transactions are listed below and are to be reviewed by the cost center each month to provide collection information and ensure that the billing transactions were recorded accurately.
BD - Billings processed as accounts receivable.
CR - Collections/advances received and normally applied to BD transactions.
OP - Intra-Governmental Payments and Collection (IPAC) billings/collections processed.
SQ - The FFS-generated (non-cash) transactions created via the Project Cost Accounting Sub-system. (PCAS) process, which applies expenditures to the Advance balance in an agreement's CALT record.
As an example, agreement 01 TN0000100 in Figure 3 includes four individual transactions (BD, CR, OP, SQ) that were processed in the report month ("Current Month Activity"). Note that the CR transaction (collection/advance) references a BD (bill) number. This BD is the billed account receivable that the collection is liquidating. Note that the IPAC transaction (OP) is posted as a billed and collected amount. The FFS-generated SQ transaction records the distribution of Expenditures applied to Advance amount. 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 RMS.
In order to review a history of the transactions by agreement, a cumulative list of all transactions processed by agreement number is included in the Customer Agreement Collection and Receivable (CACR) table in FFS. A sample of the CACR for the transactions processed for the above agreement is included in Figure 4.
C. Negative Expenditures or Unliquidated Obligations (Obligations). Expenditures and Obligations processed correctly should appear as positive balances on the 289A. Negative balances indicate an adjustment was processed in excess of the balances posted or a transaction was posted as a credit to the agreement in excess of the Expenditures or Obligations posted to those accounts. Agreement 01 CT0101800 in Figure 5 is an example of an agreement with a negative Expenditure balance. Negative expenditures create an abnormal negative Unbilled balance. The RMS will include agreements with negative Expenditure or negative Obligation balances as part of their monthly Exception report review to determine the cause of the problem and to initiate the necessary corrective actions. These actions will be coordinated with FS.
D. Unbilled balances. Unbilled balances are normally positive amounts on the 289A and represent earnings posted to a reimbursable agreement that have not been billed. For agreements with Federal customers, Unbilled balances include only Expenditures and Expenditure Burden that have not been billed. For agreements with non-Federal customers, Unbilled balances include Expenditures and Obligations and respective Burden amounts. Unbilled amounts should be reviewed to ensure that billings are in accordance with the terms of the agreement. Expenditures that have not been billed in accordance with the terms of the agreement are in violation of those terms and create excessive unbilled balances. Bills should be issued for these balances immediately unless the agreement has been established for FFS-generated billing. Billing actions to be taken, or an explanation as to why billing in accordance with the agreement will not be initiated, are to be noted in Part A of the 289A Review.
Amounts billed in excess of Expenditures will normally create a negative unbilled balance and normally do not require corrective action if the bill is issued in accordance with the agreement. Examples of unbilled balances listed in the 289A are included and described in Section 6 below. It is noted that FFS-generated bills (PC-Bill) will not include Obligation balances in the billed amount.
E. Outstanding Advances. Outstanding Advance balances on the 289A are based on the Advances collected less Expenditures and Burden applied to the Advance Amount. The PCAS applies Expenditures and Burden to liquidate the Advance Amount in the CALT. Any Advance Amount in excess of these Expenditures and Burden is the Outstanding Advance on the 289A. Outstanding Advance balances should be reviewed together with the Unbilled balances to ensure that collections/advances have been recorded accurately, and to determine if Advance balances 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.
In order to reduce administrative time and costs incurred by reviewing and returning small Advance balances to customers, Advance balances with customers less than $10 will be transferred to Treasury by RMS based on balances in the quarterly 289A. RMS will provide a list of these advances to FS offices prior to processing these transactions. The FS offices should notify RMS if Advances under particular agreements are not to be processed in this manner.
(1) Federal customers.
The Office of Management and Budget (OMB) memorandum M-03-01 dated October 4, 2002 prohibits advance payments between Federal agencies. The APS IM 2003-18, Business Rules for Transactions with Other Federal Agencies, Section 5, requires that bills issued to Federal customers be based on expenditures incurred in providing goods and services to the customer. Billing in advance of incurring expenditures is allowed only when 1) advance billing under the agreement is explicitly authorized by law or 2) when the customer's order exceeds $1 million. If the order exceeds $1 million, the advance payment may not exceed 50 percent of the order amount. For those advance payments that are permitted, the responsible office is required to provide a monthly status report to the customer reflecting the revenue earned. If bills issued in advance do not meet these criteria, any collections will create an advance balance in violation of OMB regulations and is to be returned to the customer via a credit on form 9-2048, IPAC Billing Request. The Description field on form 9-2048 should indicate that the funds are being returned since they were received in advance, and that the customer should not de-obligate the funds since bills will be issued in the future after expenditures have been incurred. Figure 6 includes detail pertaining to the calculation for the amount to be billed to a Federal customer.
Effective in FY 2004, agreements with Federal customers are to be established in FFS via BASIS+ so that billings will be generated via FFS (PC-Bill program). Instructions pertaining to PC-Bill are included at the following link: http://internal.usgs.gov/ops/finance/arb/pc-bill-instructions-fy04-final-dec-03.doc (available to USGS employees only).
(2) Non-Federal customers.
(a) Fixed price agreements. An Advance balance may exist on the 289A for a fixed price agreement with a non-Federal customer after the work is complete and after the total amount of the Expenditures have been billed and collected. Offices should review these Advance balances in accordance with USGS IM APS 2003-08 (http://www.usgs.gov/usgs-manual/im/aps-2003-08.html ) which provides procedures for reviewing and moving Advance balances from fixed price agreements to other fixed price agreements.
(b) Reimbursable agreements (non-fixed price). Where an Advance balance exists in a non-Federal reimbursable agreement, a review is required to determine if the balance is either appropriate, to be moved forward to a continuation or extension of the agreement, or to be refunded to the customer.
If the agreement is complete and the customer indicates in writing that the Advance balance is not to be returned, the Cost center is to indicate in Part A of the 289 Review that the balance is not to be returned to the customer and it should be transferred to Treasury. The office will attach a copy of the customer's written notification to the 289A Review. Based on the action included in the 289A Review, RMS will initiate action to either refund the Advance balance to the customer or transfer the balance to Treasury.
F. Supporting documentation. Review forms that include advances/collections to be moved between agreements or request amounts to be refunded to a customer require a copy of the CALT record(s) 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 provided below. Documentation of CALT records is to be retained by the FS offices when initiating Vouchers to move advance balances as described in Section 7.
(1) Open a blank Word file and set the font to COURIER NEW and font size to 8;
(2) In FFS, access the CALT records of the agreements where advances/collections are to moved from and moved to;
(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 PASTE 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.
6. Examples of Unbilled and Advance balances in the 289A agreements. Included below are examples of agreements that include Unbilled and/or Advance balances on the 289A, the reasons these balances occur, and the corrective action to be initiated for abnormal balances, if any.
A. Agreements with Unbilled balances.
Federal customers - Agreement 03 NMIPR037800036 in Figure 7 has Expenditures of $248,867.31 and a billed amount of $24,002.86, creating an Unbilled balance of $224,864.45. Notice that the Obligation balance of $2,131.52 is not included in the Unbilled calculation since Federal agreements are not to be billed for Obligations.
Non-Federal customers - Agreement 99 CA9960500 in Figure 8 has Earnings (Obligation and Expenditures) totaling $219,400 and a Billed amount of $197,350.00. The difference of $22,050.00 is the Unbilled balance. Notice that the calculation of the Unbilled balance in non-Federal agreements includes both Expenditures and Obligations.
The Unbilled balances in these agreements are normal where the amount Billed is less than Earnings and additional billing would be in order. Offices should review these Unbilled balances to determine if additional bills should be issued in accordance with the agreement. Notice that there are no Advance balances in these agreements. The PCAS has applied Expenditures up to the total of the Advance amounts (PCAS only applies Expenditures up to the amount of the Advance).
B. Agreements with Unbilled and Outstanding Billed balances.
Agreement 03 03W3AKR0327 in Figure 9 includes a billed amount of $93,418.83 on Expenditures of $160,720.43, leaving an Unbilled balance of $67,303.60. Since there have been no collections applied to the Billed amount, the Billed Uncollected balance equals $93,418.83. This total should equal the total of outstanding bills listed on the Cost center's bill log issued against the agreement.
The Unbilled and Billed Uncollected balances in this agreement are normal. Offices should review these balances to determine if additional bills should be issued in accordance with the agreement, and the Billed Uncollected amount should be reviewed to determine if follow up action with the customer should be initiated (see APS IM 2003-11).
C. Agreements with advance billing and collections, and expenditures with no obligations.
Federal customers - Agreement 01 TN0000100 in Figure 3 has billed and collected $160,691.44 but only has Expenditures of $160,680.09. Since the amount billed exceeds the Expenditures by $11.35, a negative Unbilled balance of $11.35 is calculated on the 289A. Since the Amount Collected exceeds Expenditures by $11.35, an outstanding Advance balance of $11.35 is calculated.
Non-Federal customers - Agreement 02 CT0101800 in Figure 5 is a similar situation whereby the agreement has been overbilled by $14,559.31. The overbilled amount creates a negative Unbilled balance on the 289A. Since the entire billed amount has been collected and posted as an Advance balance on the CALT, an outstanding Advance of $14,559.31 is calculated.
Since the Federal customer in Figure 3 has an Advance balance, and since advances are not permitted between agencies, the Advance balance is to be returned to the customer. The refund will reduce the billed and collected amounts and reduce the Advance to $0. Since the agreement in Figure 5 is a fixed price agreement as indicated by the "FP" in the Fixed Price field, the billed/collected amount in excess of Earnings is appropriate. Therefore, the negative Unbilled balance created by the overbilling is not an abnormal balance. A review of the agreement in Figure 5 is required to determine if the terms of the agreement have been completed. If completed, the agreement should be reviewed in accordance with APS IM 2003-08. If this agreement were not fixed price, a review of the Advance balance would be required to determine if the Advance was in accordance with the terms of the agreement.
D. Agreements with advance billing and collections, expenditures with obligations.
Federal customers - Agreement 03 TN0000100 in Figure 10 has earnings of $10,962.00 ($175.64 in Obligations and $10,786.36 in Expenditures) equal to the Agreement amount. However, bills to Federal customers are not to include Obligations. In this agreement, the amount of the Obligations billed is an overbilling of $175.64 that creates a negative Unbilled balance. Since the total Billed amount has been collected, the amount collected for Obligations is an Advance balance that is to be returned. When processing the credit IPAC (form 9-2048) to return the funds, the Description field should indicate that the funds are being returned due to the fact that they were received in advance, and that the customer should not de-obligate the funds since bills will be issued in the future after expenditures have been incurred.
Non-Federal customers - Agreement 02 CA0004000 in Figure 8 has been billed for the entire amount of the agreement. Earnings total $302,715.17 creating a negative (overbilled) Unbilled balance of $6,184.83. The Advance balance includes the Obligation amount creating an Advance balance of $6,601.28. These balances are normal since this fixed price agreement is with a non-Federal customer and has been billed in advance. Similar to the agreement described in Figure 5 above, a review is required to determine if the terms of the agreement have been completed. If completed, the Advance balance should be reviewed in accordance with APS IM 2003-08. If this agreement were not fixed price, a review of the Advance balance would be required to determine if the Advance were in accordance with the terms of the agreement. Note that the Unbilled amount includes Obligations in the calculation and the Advance balance excludes Obligations
E. Agreements with negative Unbilled balances due to Expenditures being moved.
As noted in Section 5.A., Expenditures in the agreement in Figure 2 have been reduced to $0 creating a negative Unbilled balance and an Advance balance since the Expenditure balance is less than the billed/collected amount. Similarly, the Agreement amount in agreement 00 VA990400-GD in Figure 11 has been reduced to $57,199.18 which is $7,800.82 less than Cumulative Billed and Collected (Advance) amount of $65,000, thereby creating a negative Unbilled balance (overbilling). The PCAS has applied the Expenditures and Burden to the Advance, creating an Advance balance of $7,800.82. In this agreement, the Amount Collected on the 289A exceeds the Agreement amount and Expenditures, creating the negative Unbilled balance. This is an 'abnormal' balance. Agreements with Agreement and Expenditure amounts less than the billed/collected amounts are to be reviewed to determine if Expenditures or Obligations were moved incorrectly or if credit expenditures were posted in excess of the expenditures or obligations posted. The RMS will generate an "Exception" report to include all agreements where Agreements and Expenditures are less than billed/collected amounts for review by the FS offices. This report will be provided to FS for review.
F. Agreement billed in advance with receipts posted on the 289A, Collections versus Advances.
The agreement 00 DW14937610-01-0 in Figure 12 has two different situations. The Agreement and Expenditure amounts have been reduced to $13,996.53 which is $272.08 less than the billed/collected amounts. Similar to the agreement in Figure 11, this will create an abnormal Unbilled balance of negative $272.08. In addition, the receipts ($14,268.61) were posted as Collections on the CALT instead of an Advance. The PCAS applies Expenditures to liquidate the Advance Amount on the CALT, not to Collections. Therefore, there is no Advance balance calculated on the 289A. In agreements where receipts are posted as Collections instead of Advances in excess of Earnings, the negative Unbilled balance is an abnormal balance and is a "true" advance (Cumulative Amounts Collected - Earnings).
Agreement 01 CO9818900 in Figure 13 is a fixed price agreement with a non-Federal customer. This agreement is billed in excess of Expenditures creating a negative Unbilled balance of $644.02, and receipts have been posted for the amount billed. However, a portion of the receipt amount was posted to the CALT as a Collection instead of an Advance. Since PCAS only applies expenditures to an Advance balance, the Collection amount in excess of expenditures does not calculate as an Advance balance on the 289A. However, this negative Unbilled balance is a 'true' Advance (receipts posted in excess of Expenditures).
Agreements with negative Unbilled balances with Collections in excess of Expenditures are to be reviewed by RMS as part of the Exception report review. Corrective actions will be reviewed and coordinated with FS.
Agreement 02 CO0202600 in Figure 13 is a fixed price agreement with a non-Federal customer with collected funds posted as Advances in the CALT similar to the agreement in Figure 3. This agreement has a negative Unbilled balance of $960.77 since the amount is overbilled, and Outstanding Advance of $960.77 since receipts were posted as an Advance in excess of Expenditures. Since this is a fixed price agreement with a non-Federal customer and the Agreement amount is not less than the billed/collected amounts, the negative Unbilled amount and the Outstanding Advance balances are not abnormal. This agreement should be reviewed to determine if the terms of the agreement are complete and determine the disposition of the Advance in accordance with IM 2003-08 (see Section 5.E. above).
G. Agreements where Advance balances are not reduced by PCAS distribution.
Agreement 03 DEB-9981483 in Figure 14 (item A) is an agreement with a Federal customer with billed and collected amounts ($63,760.14) less than Expenditures. With PCAS, Expenditures are applied to the Advance balance which would create an Advance Used balance of $63,760.14 on the CALT and reduce the Advance to $0. However, the Unbilled and Advance balances on the 289A have not been adjusted. This occurs when the BILL_END_DATE on the CAHT record has been exceeded. In this example, the LAST DIST DATE on the CALT (the date PCAS ran and distributed expenditures on the agreement) indicates PCAS ran against this agreement on November 30, 2003; however, no Advance Used balance was created on the CALT and the Advance balance on the 289A was not reduced. Since the BILL_END_DATE on the CAHT record is September 30, 2003, the distribution on this agreement did not take place. The RMS will generate an 'Exception' report listing all agreements where the BILL_END_DATE has been exceeded or will be exceeded by the end of the report month, and provide the report to FS for review and to initiate corrections.
Item B is an example of what the above agreement should look like on the 289A after the correction to the BILL_END_DATE is made and PCAS has applied Expenditures to the Advance.
7. Exception Reports. As described above, RMS will provide Exception reports to FS for monthly review. The purpose of these reports is to provide additional information to supplement the monthly 289A indicating agreements with problems or 'abnormal' balances. The RMS will provide these reports monthly to FS in Excel format via e-mail after monthly FFS reports are generated. The FS offices will review the Reports and initiate corrective actions for the agreements under their responsibility, as described below. The FS Chiefs are to reply via return e-mail by the end of the report month that corrective action has been taken on the agreements listed on these reports and to indicate those agreements that have not been corrected.
Report #1 289A Exception Report - Abnormal Agreement Balances (Figure 15). This report lists agreements where various problems exist with agreements resulting in 'abnormal' balances. FS is responsible for reviewing/correcting those agreements listed under the "Funding" column. These agreements indicate that the agreement is funded for $0; however, the agreement has Expenditure, Unbilled, or Advance balances. The Funding column will also include agreements where the Funding and Expenditure balances have been reduced below the Cumulative Billed/Collected amounts. The RMS will review the other categories listed on the report and correct those agreements in coordination with FS as needed.
Report #2 289A Exception Report - Bill End Date Problem (Figure 16). This Report lists agreements where the Bill_End_Date in the CAHT record has been exceeded. The FFS does not select agreement records for the liquidation of Advance balances if the Bill_End_Date has been exceeded. This report will also list agreements where the Bill_End_Date will be exceeded by the end of the report month in order to prevent the problem from occurring in the next month's 289A. The Bill_End_Date on the agreements included on the report are to be corrected by FS before the end of the month of the Report.
8. Effective Date. This policy is effective with the release of this IM.
If there are questions pertaining to these requirements, please contact your FS office, or Bruce Wood, OAFM, on 703-648-7665 or e-mail: firstname.lastname@example.org.
(signed) Carol F. Aten
Chief, Office of Administrative Policy and Services
Attachment: Figures 1 - 16