U.S. Geological Survey Manual
Reference. This instructional memorandum (IM) replaces Office of Financial Management (OFM) IM 2003-02, issued in December 2002. The following updates have been incorporated into this IM:
U.S. Geological Survey Instructional Memorandum
No. OFM 2003-08
Date: May 9, 2003
Subject: Allocating Burden from Reimbursable Accounts
Reference: SM 501.1
Background. The Project Cost Accounting Subsystem (PCAS) of the Federal Financial System (FFS) provides a mechanism to charge reimbursable customers burden rates for indirect costs. Collections from reimbursable customers for these burden amounts applied represent income that pays for common services and bureau costs. In fiscal year (FY) 2002, overhead (a.k.a., assessment) budgets were established at the discipline level. Each discipline processed a standard voucher (SV) document to transfer a portion of the burden collected to the Office of Administrative Policy and Services for the bureau's overhead.
- Eliminated the requirement to enter 8S documents to the bureau/discipline (as a result of the instructional memorandum on cost sharing - IM #APS 2003-09).
- Corrects the example in attachment 2 to depict compounded rates for the bureau portion of the burden rate.
- Splits the responsibilities associated with changing burden rates between the cost center and the Fiscal Services Office.
In FY 2003, common services budgets are now established at the cost center level and a bureau cost budget at the bureau level. Each cost center will be collecting reimbursable burden that supports the cost center's common services budget as well as the bureau's budget for bureau costs. Also, for the Water Resources discipline (WRD) reimbursable agreements, a portion of the burden amount will support WRD-specific costs. The Budget and Science Information System (BASIS+) has been implemented for all of the U.S. Geological Survey in FY 2003. BASIS+ stores the common services and bureau rates as individual components, however one composite burden rate is forwarded to FFS at the account number level for charging burden to reimbursable customers. This IM describes the process and responsibilities for collecting reimbursable burden and distributing it to the appropriate destinations for common services costs, bureau costs, and WRD-specific costs. In addition to PCAS, the FFS Cost Allocation subsystem will be used in FY 2003 to facilitate the distribution of the lump sum reimbursable burden collected to the cost center, the WRD, and the bureau.
Overview of Approach. Beginning in FY 2003, a standard account structure will be used for accumulating burden associated with reimbursable customers. This account structure will be in the format of XXXX-0ARYY, where:
- XXXX is the cost center collecting the burden,
- 0AR is the standard for the 5th through 7th characters of these accounts, and
- YY is the FFS composite burden rate, truncated to the whole number.
Using this standard account format to initially capture the burden collected from reimbursable customers will facilitate ultimately splitting the burden two or three ways. Each unique burden rate (and each unique 0AR account number) will result in different percentages being applied in cost allocation to split the burden between the cost center, the bureau, and, if applicable, the WRD.
On a monthly basis, FFS calculates incremental burden amounts for reimbursable customers and creates an Internal Voucher (IV) document to transfer those amounts in the form of a negative expenditure to the direct fund (e.g., SIRAD or SIRMD). This monthly burden transfer is called the FFS Indirect Cost Transfer (ICT) process. The XXXX-0ARYY account numbers will be the target account numbers for the IV documents from the ICT process.
Also on a monthly basis, the cost allocation process will be run immediately subse0uent to the ICT process. The purpose of the cost allocation run will be to zero out the negative expenditure in the XXXX-0ARYY accounts and redistribute to the following standard accounts for collecting the various types of burden:
- XXXX-0AR00 for the cost center overhead,
- 1125-0AR00 for the bureau overhead, and
- 4531-0AR00 for the WRD overhead.
The negative expenditures that will accumulate in these "0AR00" accounts will serve as funding for indirect or discipline-specific costs incurred by the cost center, bureau, and WRD.
Cost Center Responsibilities. Administrative support personnel in the cost centers are responsible for the following:
- Establish cost center level, ICT account numbers as outlined above. That is:
- XXXX-0ARYY accounts for each composite FFS burden rate charged to reimbursable customers in the cost center (ICT target accounts). The composite FFS burden rate is displayed on the Update Fund Source screen, Account view (module BABFACFS_0020) in the field FFS Burden Rate. This composite FFS burden rate is calculated using the bureau rate, discipline rate if applicable, and cost center rate specified for the fund source. Note, the account must have a non-zero net budget for the composite FFS burden rate to be calculated.
- XXXX-0AR00 for collecting the cost center's portion of the reimbursable burden
- Fund code for these "0AR" account numbers should be the direct appropriation where the cost center common services costs will be incurred (i.e., SIRAD or SIRMD). As a general guideline:
- If the reimbursable burden comes from SIRAR, the ICT target account will be funded by SIRAD.
- If the reimbursable burden comes from SIRMR, the ICT target account will be funded by SIRMD.
- When entering reimbursable funding, associate reimbursable accounts with the appropriate ICT target account based on the composite burden rate:
- Use the Update Fund Source screen to link the fund source subject to burden to the appropriate XXXX-0ARYY account. The pull down list for the ICT Account field will only display XXXX-0ARYY accounts belonging to the cost center of the reimbursable account or its parent allocation organization. Account Fund Source records for reimbursable funds with a non-zero burden rate must have the ICT Account field correctly entered (last two characters match the truncated composite FFS burden rate) before the account fund source can be sent to FFS.
- See Appendix A for a sample BASIS+ screen.
- Establish agreement(s) with customer type 93A for the amount of reimbursable burden that is ultimately distributed to the cost center. This will provide funding for the cost center common services accounts (e.g., XXXX-COM**), and $.01 of 93A funding should also be tied to the cost center account receiving the credit expenditure from reimbursable burden (i.e., the XXXX-0AR00 account).
- Monitor balance of actual common services costs compared to funding for cost center common services. Common services funding sources could include (1) direct appropriations, (2) direct burden (i.e., customer type 91A pseudo-funding), and (3) reimbursable burden (i.e., negative expenditures accumulating in XXXX-0AR00 account, supporting customer type 93A pseudo-funding).
Fiscal Services Offices Responsibilities.
- Enter information in the Pool Based Definition (PBDF) table to distribute the appropriate portion of reimbursable burden collected to (1) the cost center, (2) the WRD (if applicable), and (3) the bureau.
- Percentages need to be established on the PBDF table for each FFS reimbursable burden rate used by a cost center. One hundred percent of the costs to the XXXX-0ARYY accounts need to be distributed via Cost Allocation and the PBDF tables to the following accounts:
- XXXX-0AR00 - cost center
- 1125-0AR00 - bureau
- 4531-0AR00 - WRD
- Monitor the activities of the cost centers to ensure that all appropriate ICT accounts are established and that all reimbursable accounts with burden are linked to the appropriate ICT account. Forward cost center/burden rate information to OFM for establishing the necessary records in the ALLC and CADO Cost Allocation tables.
- Coordinate the funding and monitoring of the bureau cost budget for the bureau (i.e., the 1125-0AR00 account) and the discipline-specific cost budget for WRD (i.e., the 4531-0AR00 account).
- Set up Cost Allocation tables in FFS to support this process:
- Establish a cost allocation group for each cost center on the ALLC table.
- Establish a cost allocation step for each uni0ue cost center reimbursable burden rate used.
- Develop reports to support the setup and monitoring of the appropriate accounts for this process and the spending of indirect cost budgets.
- Monitor and correct any rejects that occur in the monthly cost allocation process.
Changing Burden Rates
Since FFS calculates burden amounts retroactively, several actions will be required when it is deemed necessary to change the burden rate associated with a reimbursable account. These actions are:
- Establish a new XXXX-0ARYY account for the new burden rate (Cost Center responsibility).
- For all reimbursable accounts affected by this change, update the burden rate to the new rate and change the ICT target account to the new XXXX-0ARYY account (Fiscal Service Office responsibility).
- Establish new PBDF table entries for the new XXXX-0ARYY account, with the appropriate percentage split for cost center, bureau, and, if applicable WRD (Fiscal Service Office responsibility).
- Enter a standard voucher (8S) document to reverse the impact of burden applied and allocated to-date. The amounts for this will be retrieved from a Crystal Report developed by OFM. An example of the entries required is attached in Appendix B. (Note the new XXXX-0ARYY account is adjusted, not the old ICT account with the old burden rate). (Cost Center responsibility).
When the PCAS distribution process runs the next time, the new XXXX-0ARYY account and new PBDF table entries will split the incremental burden amounts according to the new percentages.
/s/ Carol F. Aten, Chief
Office of Administrative Policy and Services
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