U.S. Government Standard General Ledger Issues Resolution Committee (IRC) Handouts

April 7, 2011, USSGL Issues Resolution Committee (IRC) Meeting Minutes

GENERAL ITEMS:

The meeting was held on April 7, 2011, at the Government Accountability Office, 441 G Street, Washington, DC.

Kathy Winchester (FMS) opened the meeting. She said the USSGL Division is proposing new accounts for use with the "FASAB Implementation Guidance for the Disposal of General PPE." The FASAB implementation guidance will not be voted on until May 19, 2011, but once approved, the requirements will be effective immediately. The USSGL Board Ballot, being presented to the USSGL Board on May 19, will include the new "disposal" accounts but will be amended and the new "disposal" accounts removed if there is no FASAB Board approval.

Introductions were made.

HANDOUTS:

• USSGL Scenario for Implementation Guidance on the Accounting for the Disposal of General Property, Plant, and Equipment & Federal Financial Accounting Technical Release, exposure Draft Effective Immediately once it becomes a standard, dated April 6, 2011
• DRAFT - Gains and Losses on Pensions, Other Retirement Benefits or Other Post Employment Benefits Assumption Changes, dated April 7, 2011
• Proposed revision to USSGL Account 4120, dated April 7, 2011

AGENDA ITEMS:

FASAB Implementation Guidance for the Disposal of General PPE

Christine Chang (FMS) reviewed the handout, "USSGL Scenario for Implementation Guidance on the Accounting for the Disposal of General Property, Plant, and Equipment – Federal Financial Accounting Technical Release, exposure Draft effective immediately once it becomes a standard." She discussed the decision to add a new USSGL account, 1790, "General Property, Plant, and Equipment that are Permanently Removed But Not Yet Disposed." Micky Chopra (DoD) discussed adding "existing General PP&E" to the title. It was decided and agreed that the proposed title would remain as presented, but the definition would be changed to the following:

"General property, plant, and equipment that is permanently removed from service but not yet disposed, and reclassified in accordance with Federal Financial Accounting Technical Release, No. XX, paragraph 9."

There was a discussion concerning the phrase, "Although the normal balance for this account is debit/credit, it is acceptable for this account to have a credit/debit balance" in the proposed changes to existing USSGL accounts 7180, "Unrealized Gains" and 7280, "Unrealized Losses." Christine explained that if the asset is permanently removed and disposed in a different year, there may be an abnormal balance in these accounts as a result of a delay in reclassification of unrealized gains/losses to realized gains/losses in the subsequent year. There was a suggestion to move the justification comment that explains this to the definitions to support the abnormal balance condition. Gwen Marshman (FMS) reminded the IRC that the USSGL Chart of Account definitions contain this wording in many of their definitions. The IRC decided that since other USSGL accounts in the USSGL Chart of Accounts contain this wording, it would not be wise to include an explanation for specific instances when an abnormal balance could occur, which could create the expectation that an explanation in other account definitions is required. The IRC decided and agreed that the information will be provided in the USSGL scenario instead of the account definition.

In Year 3, page 23 of 31, Eileen Parlow (FASAB) suggested that some wording be added to transaction #1, to the effect that the estimated realized value of the asset is $5,000.

It was also noted that the proprietary entry in transaction #1 shows USSGL account "/1990, Other Assets." Christine explained that Appendix B of the Exposure Draft displays "Other Assets" for this transaction. She provided the USSGL account for other assets in the draft for discussion purposes and will not include it in the final version to be presented at the USSGL Board meeting. Bruce Henshel (Commerce) requested that the transaction descriptions indicate "Equipment A" or "Equipment B" where appropriate. Eileen also wanted a clarification of the word "anticipated" as it relates to budget authority in the event description of transaction #2. Christine will make appropriate changes to the event description. She also mentioned that unlike Appendix B of the Exposure Draft, this scenario recognizes offsetting gains or losses to the estimated net realizable value of the general property, plant, and equipment as unrealized gains/losses. Eileen concurred that the technical release shows it as realized. Eileen added that comments to FASAB are always welcome, even after comment deadlines. Kathy Winchester will send a comment to FASAB for this difference and any other pertinent comments discussed today as soon as possible. Bruce also recommended adding, "Assume the funding for cleanup will be provided in the next fiscal year and the cleanup will commence at that time" to transaction description #4. This will address his concern of adjusting estimated cleanup cost liability to the actual amount. Christine added that transaction #4 will be renumbered to transaction #2.

Christine will incorporate IRC comments and suggestions into the transactions of the final version that will be presented to the USSGL Board in May.

Change in Long-Term Assumptions

Melinda Pope (FMS) reviewed the handout, "Gains and Losses on Pensions, Other Retirement Benefits or Other Post Employment Benefits Assumption Changes." She reviewed the proposed USSGL accounts. Teresa Tancre (OMB) suggested adding a sentence at the end of the proposed account definitions that the gains and losses do not include Federal Employment Compensation Act (FECA) amounts.

Kathy shared that Christine is working on a new scenario that will provide clarification for recording the FECA liability. The scenario will display the Labor side and the Agency side. It is extremely important to classify the unfunded amounts and the due and payable amounts properly. It is also important to recognize due and payable obligations at the point they are unpaid. Intragovernmental reporting is affected by this, and the new scenario should help agencies report properly.

Bruce Henshel noted that the proposed changes to the definitions of USSGL accounts 7110, "Gains on Disposition of Assets – Other" and 7210, "Losses on Disposition of Assets – Other" were not necessary because the proposed accounts are "long-term."

Note 15 to the Statement of Net Cost separates the assumption amounts into "change in assumption from experience" and "change in assumptions." Melinda suggested that the proposed USSGL accounts be separated by the two types of assumptions. The IRC decided and agreed that the information would best be captured in four separate USSGL accounts for the two types of assumptions by gains and losses. The accounts will be as follows:

     7171 "Gains on Changes in Long-Term Assumptions – From Experience"
     7172 "Losses on Changes in Long-Term Assumptions – From Experience"
     7271 "Gains on Changes in Long-Term Assumptions"
     7272 "Losses on Changes in Long-Term Assumptions"

There was a request that the updated information be provided to the IRC via the Internet.

Changes to USSGL Account 4120, "Appropriations Anticipated – Indefinite"

Melinda reviewed the handout, "Proposed revision to USSGL Account 4120." During the discussion, it was noted that in rare instances, agencies do use USSGL account 4120 while operating under a Continuing Resolution (CR). However, authority in USSGL account 4120 must be reclassified to a different account before being obligated. Melinda will work with Teresa at OMB to rework the definition and will bring it back to the IRC for review.

ROUND TABLE DISCUSSION:

When asked about implementation of the USSGL account as six characters, Kathy Winchester explained that the field length will change for fiscal 2013. Kathy also mentioned when initially implemented, the six-character USSGL account will consist of the four existing characters plus two zeros at the end. The two zeros are not for agency use. Sometime in fiscal 2015, or later, the USSGL Division will begin to restructure the USSGL Chart of Accounts and absorb the two zeros at the end to make full use of the six-character field.

Eileen Parlow requested that agency representatives contact staff member Domenic Savini to provide input on an active project, "Deferred Maintenance and Asset Impairment." Eileen thanked everyone who brought their agency 2010 Financial Report for the FASAB research library.

Michele Crisman (FMS) requested that agency representatives contact her to provide information if they are using Prior-Year Adjustments (PYA) in proprietary USSGL accounts. The USSGL added this attribute to the proprietary USSGL accounts for purposes of the FMS 2108.

Christine Chang requested that agencies that have reported USSGL account 5900, "Other Revenue" domain value "F" for Fed/NonFed attribute, domain value "T" for Exchange/NonExchange attribute contact Edwin Walker (FMS). She and Edwin are researching reasons why agencies would be reporting other revenue with another agency that is nonexchange. Fifteen agencies reported this activity in first quarter, FACTS I.

David Surti (DHS) asked the status of a DHS case study he submitted for comment through the USSGL Web site Issues submission process. Melinda will look into it and get back to him.

Boris Lyubovitsky (USDA) asked the status of an issue he has submitted as well. Kathy said that the staff is catching up on the issues that have been submitted and will get to them as time permits. At this time of the year, the staff is concentrating their efforts on USSGL changes for fiscal 2012 requirements. After the meeting, the issue was resolved.

Micky Chopra (DoD) offered to provide the IRC with a link for the DoD SFFIS transaction library tool. After the meeting, FMS decided that the SFFIS is not officially sanctioned by the USSGL Board or Treasury, and therefore the USSGL Division will not distribute the link.

Edwin Walker (FMS) shared that he is coordinating an FMS effort to update the Treasury Financial Manual (TFM). The effort has a deadline of March 2012.

ATTENDEES:

Kathy Winchester, FMS
Karen Metler, FMS
Christine Chang, FMS
Melinda Pope, FMS
Sherry Pontell, FMS
Edwin Walker, FMS
Gwen Marshman, FMS
Karl Foltz, FMS
Michele Crisman, FMS
Tia Harley, FMS
Marilyn Evans, Treasury
Eileen Parlow, FASAB
Teresa Tancre, OMB
Cynthia Wilbur, OPM
Micky Chopra, DoD
Kim Klein, DOE
Mary Onofrio, NOAA
David Surti, DHS
Boris Lyubovitsky, USDA
Susan Stengel, NRC
Yong Sun, HUD
Patrick McHugh, USDA
Karen Hunter, SSA
Paul Webster, SSA
Junghee Gogue, SSA
Ana Labador, SSA
Mark Graham, SSA
Letha Holliday, SSA
Barbara Ricks, SSA
Sal Caltabiano, SSA
Dianne White, SSA
Carol Berg, BPD
Jenny Smith, HHS
Drena McDaniel, DOT
Teresa Lampkin, DOT
Joseph Henry, SBA
Jerry Shea, VA
David Cary Thomas, VA
Mei Ly Chi, GAO
Bruce Henshel, DOC
Yu Chen Yeh, NASA
Alana DuBois, HHS
Ping Wu, DOJ