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Accounting Guide: Basic Topics Relating to Appropriations and Reimbursables

Published by the Government Accountability Office on 1990-09-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                   United States General Accounting Office


GAO                Accounting and Financial Management
                   Division


September 1990     ACCOUNTING GUIDE

                   Balsic Topics Relating
                   to Appropriations and
                   Reimbursables




GAO/AFMD-PPM-2.1
    Contents




    Preface                                                      1



    Chapter 1                                                    1-1
    Introduction        Background                               1-1
                        Laws and Regulations                     1-3
                        Terminology Guide                        1-4
                        Budgetary and Proprietary
                         Accounting                              1-5
                        Purpose, Scope, and Methodology
                         of the Publication                      1-6
                        Organization of the Guide                1-8


.   Appendix to
    Chapter 1:                                                   1-11
    Selected
    Legislation
    Involving Federal
    Financial
    Accountability



    Chapter 2                                                   2-1
    Budgetary           Introduction                            2-1
    Accounting for      Conceptual Framework for a Basic
    Basic Operating      Operating Appropriation                 2-2
    Appropriations      Basic Transactions                       2-5
                        Illustration--Basic Budgetary
                         Transactions for an Appropriation       2-8
                        Closing Entries When an Appropriation
                         Is Not Fully Expended                  2-14
                        Illustration--Closing Entries
                         for an Appropriation                    2-21
                        Closing Entry for a Fully Expended
                         Appropriation                           2-25




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                  Undelivered Orders Filled After
                   Fiscal Year--end                         2-25
                   Situation 1---The Orders Are Cancelled   2-26
                   Situation 2---The Orders Are Received
                    in the Amount Estimated                 2-29
                   Situation 3---The Orders Are Received
                    in an Amount Less Than Estimated        2-30
                   Situation 4---The Orders Are Received
                    in an Amount Greater Than Estimated     2-32
                  Current and Expired Appropriations
                   Accounted for in a Single Year           2-35
                  Outputs Required for Delegating,
                   Obligating, and Expending an
                   Appropriation                            2-36


Chapter 3                                                   3-1
Proprietary       Introduction                              3-1
Accounting for    Differences Between Budgetary and
Basic Operating    Proprietary Accounting                   3-1
Appropriations    Conceptual Framework of Proprietary
                   Accounting                               3-3
                  Basic Entries and Illustrations           3-8
                   Receipt and Return of Appropriation      3-8
                   Consumption of Appropriation
                    Authority                               3-10
                   Illustration--Consumptionof
                    Appropriation Authority                 3-11
                   Expenditure of Monies                    3-14
                   Purchase of Inventory and Fixed
                    Assets                                  3-16
                   Illustration--Purchase of Equipment      3-16
                   Use of Inventory and Consumption of
                    Fixed Assets                            3-20
                   Illustration--Purchase and Consump-
                    tion of Inventory and Equipment         3-22
                  Undelivered Orders Filled After
                   Fiscal Year--end                         3-28
                   Situation 1---The Orders Are Cancelled   3-28
                   Situation 2--The Orders Are Received
                    in the Amount Estimated                 3-29




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.   Contents




                        Situation 3--The Orders Are Received
                         in an Amount Less Than Estimated       3-29
                        Situation 4--The Orders Are Received
                         in an Amount Greater Than Estimated    3-30
                       Comprehensive Example in Chapter 4       3-31



    Chapter 4                                                   4-1
    Comprehensive      Introduction                             4-1
    Example            Transactions--First Quarter, FY A        4-2
    Integrating        Trial Balances--First Quarter, FY A      4-16
    Budgetary and      Transactions for Remainder of FY A       4-19
    Proprietary        Adjusted Trial Balances and Schedules,
    Accounting for a    End of FY A                             4-32
    Basic Operating    Closing Entries, FY A                    4-35
    Appropriation      Pre-Closing and Post-Closing Trial
                        Balances, End of FY A                   4-38
                       General. Purpose Financial Statements
                        Meeting GAO Standards                   4-41
                       Financial Statements Required by OMB
                        and Treasury                            4-46
                        Illustrated Statements:
                         SF-133, Report on Budget Execution     4-47
                         SF-220, Report on Financial Position   4-48
                         SF-221, Report on Operations           4-51
                         SF-222, Report on Cash Flow            4-53
                         SF-22:3, Report on Reconciliation      4-54
                         TFS-2108, Year-end Closing Statement   4-55
                        Sources of Selected Figures on
                         Statements:                            4-56
                         SF-133, Report on Budget Execution     4-56
                         SF-220, Report on Financial Position   4-58
                         SF-221, Report on Operations           4-58
                         SF-222, Report on Cash Flow            4-59
                         SF-223, Report on Reconciliation       4-60
                         TFS-2108, Year-end Closing Statement   4-61
                       Transactions Subsequent to FY A          4-64
                       Closing Entry, FY B                      4-72




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Contents




Appendix to
Chapter 4:                                                   4-73
Ledger Accounts     Appendix Contents and Symbols            4-73
                    General Ledger--Budgetary Accounts       4-74
                    General Ledger--Proprietary Accounts     4-76
                    Subsidiary Ledger--Budgetary Accounts    4-80
                    Subsidiary Ledger--Operating/Program
                     Expenses                                4-81



Chapter 5                                                    5-1
Reconciliation      Introduction                             5-1
Between Budgetary   Nature of the Reconciliation Between
and Proprietary      Expended Appropriations and
Accounting           Operating/Program Expenses              5-1
                     Situation 1--Capitalized Asset
                      Purchases                              5-3
                     Illustration--ReconciliationInvolv-
                      ing Capitalized Asset Purchases        5-4
                     Situation 2--Current Expenses to Be
                      Paid From Subsequent Appropriations    5-6
                     Illustration--ReconciliationInvolv-
                      ing Current Expenses to Be Paid From
                      Subsequent Appropriations              5-8
                     Situation 3--Current Expenses Funded
                      by Prior-Year Appropriations           5-9
                     Illustraticn--Reconciliation
                      Involving Current Expenses Funded
                      by Prior-Year Appropriation            5-10
                    Nature of the Reconciliation Between
                     Operating/Frogram Expenses and Other
                     Appropriations Realized                 5-13
                    Comprehensive Illustration               5-14
                     FY A Reconciliation                     5-14
                     FY B Reconciliation                     5-16



Chapter 6                                                    6-1
Budgetary           Introductior                             6-1
Accounting for      Conceptual Framework for Reimbursables   6-2
Reimbursable        Relationships Between the Tracks         6-8
Work                Basic Transactions for Tracking the
                     Status of Work Orders                   6-11



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                        Illustration--Accountingfor Basic
                         Transactions                           6-12
                       Closing Entries When Reimbursable
                        Budget Authority Is Not Fully
                        Expended: Unobligated Authority
                        Expires                                 6-19
                        Illustration--Closing Entries When
                         Reimbursable Budget Authority Is
                         Not Fully Expended: Unobligated
                         Authority Expires                      6-24
                         Closing Entries for Fully Expended
                          Reimbursable Authority                6-27
                       Entries for Undelivered Orders
                        Relating to Reimbursable Work That
                        Are Filled in the Succeeding Year       6-28
                        Situation 1--The Orders Are Cancelled   6-29
                        Situation 2--The Orders Are Received
                         in the Amount Estimated                6-29
                        Situation 3--The Orders Are Received
                         in an Amount Less Than Estimated       6-30
                        Situation 4--The Orders Are Received
                         in an Amount Greater Than Estimated    6-32
                       Reports Required for Reporting on
                        Reimbursable Work Performed Under
                        Interagency Agreement                   6-33

    Appendix to
    Chapter 6:                                                  6-35
    Alternate Model    Introduction                             6-35
    for Budgetary      Conceptual Framework for Budgetary
    Entries Relating    Accounting Related to Reimbursables     6-36
    to Reimbursables   Basic Transactions Related to
                       Reimbursables                            6-37
                       Illustration--Basic Transactions
                        Related to Reimbursables                6-39
                       Closing Entries for Fully Expended
                        Reimbursable Authority                  6-43
                       Closing Entries When Reimbursable
                        Budget Authority Is Not Fully
                        Expended: Unobligated Authority
                        Expires                                 6-44




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Contents




                      Illustration--Closing Entries When
                       Reimbursable Budget Authority Is
                       Not Fully EKpended: Unobligated
                       Authority EKpires                       6-47
                      Entries For Undelivered Orders
                       Relating to Reimbursable Work Filled
                       in the Succeeding Year                   6-49
                       Situation 1--The Orders Are Cancelled    6-49
                       Situation 2--The Orders Are Received
                        in the Amount Estimated                 6-50
                       Situation 3--The Orders Are Received
                        in an Amount Less Than Estimated        6-50
                       Situation 4--The Orders Are Received
                        in an Amount Greater Than Estimated     6-51
                      Crosswalk of Accounts Between the Two
                       Methods                                  6-51


Chapter 7                                                       7-1
Proprietary           Introduction                              7-1
Accounting for        Conceptual Framework for Reimbursable
Reimbursable Work      Accounting                               7-2
                      Accounting for Services Under
                       Reimbursable Agreements                 7-3
                      Operating Statement--Reimbursable
                       Service Work                            7-8
                      Accounting for Products Under
                       Reimbursable Agreements                  7-9
                      Operating Statement--Reimbursable
                       Product Work                            7-13
                      Comprehensive Example in Chapter 8       7-13


Chapter 8                                                      8-1
Comprehensive         Introduction                             8-1
Example Integrating   FY A Transactions                        8-2
Budgetary and         Adjusted Trial Balances and
Proprietary            Schedules--End of Fiscal Year           8-10
Accounting for        Closing Entries                          8-15
Reimbursable Work     Pre-Closing and Post-Closing Trial
                       Balances                                8-21
                      General Purpose Financial Statements
                       Meeting GAO Standards                   8-23


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.   Contents




                      Financial Statements Required by
                       OMB and Treasury                         8-28
                       Illustrated Statements:
                        SF-1.33, Report on Budget Execution     8-29
                        SF-2:20, Report on Financial Position   8-30
                        SF-221, Report on Operations            8-33
                        SF-222, Report on Cash Flow             8-35
                        SF-223, Report on Reconciliation        8-36
                        TFS-2108, Year-end Closing Statement    8-37
                       Sources of Selected Figures on
                        Statements                              8-38
                        SF-133, Report on Budget Execution      8-38
                        SF-220, Report on Financial
                         Condition                              8-40
                        SF-221, Report on Operations            8-40
                        SF-222, Report on Cash Flow             8-42
                        SF-223, Report on Reconciliation        8-43
                        TFS--2108, Year-end Closing Statement   8-44



O   Appendix to
    Chapter 8:                                                  8-49
    Ledger Accounts   General Ledger--Budgetary Accounts
                       Related to Reimbursables                  8-50
                      General Ledger--Proprietary Accounts
                       Related to Reimbursables                  8-52
                      Subsidiary Ledger--Other Expenses          8-53
                      General Ledger--Budgetary Accounts
                       Related to the Appropriation              8-53
                      General Ledger--Proprietary Accounts
                       Related to the Appropriation              8-55
                      Subsidiary Ledger--Budgetary Accounts      8-60
                      Subsidiary Ledger--Operating/Program
                       Expenses                                  8-61



    Appendixes        Appendix I:  Standard General Ledger
                       Accounts Used                             9-1
                      Appendix II:  Generic Transactions
                       Used                                     10-1




.   Page vii          GAO Accounting Guide:          September 1990
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Contents



Index                                                11-1

            Abbreviations

            FY     fisca.l year
            GAO    General Accounting Office
            OMB    Office of Management and Budget
            SGL    Stanc.ard General Ledger




Page viii   GAO Accounting Guide:          September 1990
            Appropriations and Reimbursables
PREFACE




          This guide explains basic budgetary and
          proprietary accounting for operating
          appropriations and reimbursable work under
          interagency agreements. It provides
          illustrations of journal entries and key
          reports involved. It also discusses the
          relationship of accounts to each other.
          The guide supports and integrates related
          portions of Title 2, "Accounting Principles
          and Standards," of GAO's Policy and
          Procedures Manual for Guidance of Federal
          Agencies, the United States Government
          Standard General Ledger, the Treasury
          Financial Manual, and Office of Management
          and Budget Circular A-34: "Instructions on
          Budget Execution." The guide focuses on
          situations most common to agencies or for
          which little guidance is available.

          The guide is intended to be used by federal
          operations and systems accountants as both a
          reference document and a teaching aid. It
          will facilitate understanding concepts
          involved and assist in (1) properly recording
          transactions in existing systems and (2)
          designing future systems.

          An exposure draft of this guide was sent to
          the U.S. Government Standard General Ledger
          Board, to the federal agencies, and to other
          interested parties for comment. GAO
          appreciates the time and effort of those who
          responded. We also appreciate the assistance
          provided by the Issues Resolution Committee
          of the Standard General Ledger Board.


Page 1    GAO Accounting Guide:          September 1990
          Appropriations and Reimbursables
PREFACE




          Questions and comments on this document may
          be sent to Ronald S. Young, Director,
          Accounting Principles and Standards Group.
          He can be reached on (202) 275-9578.




                      2Q4
          Donald H. Chapin
          Assistant Comptroller General




Page 2    GAO Accounting Guide:          September 1990
          Appropriatio:is and Reimbursables
    CHAPTER 1:   INTRODUCTION




    BACKGROUND           The United States Constitution sets forth the
                         underlying requirement for federal
                         accounting. Article 1, Section 9 mandates
                         that

                             "No money shall be drawn from the Treasury
                              but. in consequence of appropriations made
                              by law . . .

                         and that

                                   a regular statement and account of
                             receipts and expenditures of all public
                             money .   .   .   shall be published from time
*                            to time."

                         The Department of the Treasury prepared such
                         statements and was principally responsible
                         for compiling budgets to be presented to the
                         Congress from 1789 to 1921, when the Budget
                         and Accounting Act of 1921 was passed (see
                         p. 1-11) and the responsibility was
                         transferred to the Office of Management and
                         Budget (OMB). Nineteenth century federal
                         budgets and statements of account were
                         essentially schedules of propose? and actual
                         cash receipts and disbursements.




                         1
                          See, for example, An Account of the Receipts
                         and Expenditures of the United States for the
                         Fiscal year Ending June 30, 1876, U.S.
                         Department of the Treasury (Washington, D.C.:
                         Government Printing Office, 1883).


    Page 1-1             GAO Accounting Guide:          September 1990
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CHAPTER 1:   INTRODUCTION                                             0

                      Present-day budgets and financial statements
                      are considerably more complex than their
                      early predecessors. Many now commonplace
                      budgetary concepts such as apportionments,
                      allotments, and commitments, and proprietary
                      accounting concepts, such as accrual-based
                      financial statements, are relatively modern
                      and would halve been foreign to early
                      Treasury officials responsible for the
                      federal government's financial management.

                      Notwithstanding the lack of such modern
                      concepts, however, early Congresses were
                      concerned that budgets not be overspent. 2The
                      first general appropriation act, in 1789,
                      restricted obligation of an annual
                      appropriation to the fiscal year for which
                      the appropriation was made.  This restriction
                      has been followed consistently since.

                      Despite the restriction, however, for many
                      years after the Constitution was adopted
                      federal agencies paid little attention to
                      spending limitations established by Congress.
                      Obligations to spend money were often
                      incurred in excess of or in advance of
                      appropriations. In addition, funds were
                      commingled or used for purposes far different
                      than the purposes for which they had been
                      appropriated. Agencies would sometimes spend
                      their entire fiscal year appropriations
                      during the first few months of the year and
                      then presenti the Congress with a list of




                      21 Stat. 95

                      3
                       Principles of Federal Appropriation Law, 1st
                      ed., GAO, Office of the General Counsel
                      (Washington: GPO, June 1982), pp. 4-3
                      through 4-4..


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.   CHAPTER 1:    INTRODUCTION



                          "coercive deficiencies." These were
                          obligations to others who had fulfilled their
                          part of bargains made with the United States
                          and who now had a right to be paid.

                          The Congress felt it had no choice but to
                          fulfill these commitments. These "deficiency
                          appropriations" became frequent and greatly
                          impeded federal financial management.



    LAWS AND              Over the years, Congress has enacted a number
    REGULATIONS           of laws in order to address the problem
                          discussed above and better control federal
                          spending. In 1870, legislation was enacted
                          which prohibited federal officials from
                          making expenditures or incurring obligations
                          in excess of available or in advance of new
                          appropriations. Subsequently, Congress
                          enacted additional laws to complement the
                          1870 legislation and strengthen federal
                          accountability and financial reporting in
                          general. This was in recognition of and
                          response to a mushrooming of the scope,
                          magnitude, and complexity of federal
                          government operations over the years. A
                          synopsis of selected additional laws is
                          provided in the appendix to this chapter.

                          To carry out provisions of these and other
                          laws, agencies charged with central financial
                          management roles have established regulations
                          and guidance governing various aspects of




                          4
                              Principles of Appropriation Law, p. 5-7.
                          5   This statute, as amended, currently appears
                          at 31 U.S.C. 1341(a)


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CHAPTER 1:   INTRODUCTION




                     accounting and financial management in the
                     federal government. Key GAO guidance and
                     regulations issued by OMB and Treasury
                     include the following.

                     --   The GAO Policy and Procedures Manual for
                          Guidance of Federal Agencies, which
                          contains principles and standards
                          governing federal accounting; internal
                          control; financial management systems;
                          pay, leave, and allowances; and fiscal
                          requirements, among other topics.

                     --   The Treasury Financial Manual, which
                          contains rreasury's standard reporting
                          requirements and requirements for
                          processing collections and disbursements.

                     --   The United States Government Standard
                          General Ledger (SGL), which contains a
                          uniform chart of accounts and supporting
                          transactions to be used to standardize
                          federal agency accounting and to support
                          the preparation of standard external
                          reports.
                     --   OMB Circular A-11:   Preparation and
                          Submission of Budqet Estimates, which
                          contains KDMB's instructions for
                          development and submission of agencies'
                          annual requests for funding authority.

                     --   OMB Circular A-34:   Instructions on Budget
                          Execution, which contains OMB's standard
                          requirements for agency reports on the
                          status of their budget authority.



TERMINOLOGY GUIDE    In addition to the laws, regulations, and
                     guidance cited in the preceding section,
                     GAO's Glossary of Terms Used in the Federal


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                     Appropriations and Reimbursables
O   CHAPTER 1:   INTRODUCTION



                         Budget Process and Related Accounting,
                         Economic, and Tax Terms (PAD-81-27, dated
                         March 1981), is also useful. It provides
                         standard definitions of basic budgeting
                         terms. GAO is presently revising and
                         updating the glossary and plans to reissue it
                         in 1990.



    BUDGETARY AND        This publication discusses budgetary and
    PROPRIETARY          proprietary accounting in the federal
    ACCOUNTING           government. Budgetary accounting is intended
                         to facilitate compliance with legal
                         constraints and controls over the use of
                         federal. funds. It was developed in the
                         federal. government to help federal agencies
                         comply with many of the laws and regulations
                         cited in this chapter. For about the first
                         175 years of our country's history, federal
                         accounting was geared almost exclusively to
                         this goal.

                         In addition, since the 1930's there has
                         evolved a growing consensus that the
                         application to federal accounting of accrual-
                         based accounting concepts for assets,
                         liabilities, capital, and the components of
                         capita]. can contribute greatly to improved
                         accountability for and management of federal
                         financial resources. The accounting process
                         which supports this accrual-based focus is
                         known as proprietary accounting, which is
                         affirmed by many of the laws and regulations
                         cited in this chapter.

                         Carrying out these legal requirements and
                         integrating budgetary and proprietary
                         accounting requires more sophisticated
                         federal accounting systems than anything
                         envisioned by the founding fathers, early
                         Congresses, or first officials of the


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0                        Appropriations and Reimbursables
CHAPTER 1:   INTRODUCTION




                     Treasury. Current federal accounting
                     requirements, designed to meet the
                     accountability and financial reporting needs
                     of a government greatly expanded in its
                     magnitude, scope, and complexity, would be a
                     source of wonder to them.



PURPOSE, SCOPE,      The dual nature of budgetary and proprietary
AND METHODOLOGY      accounting which has evolved in the federal
OF THE               government gives rise to special accounting
PUBLICATION          problems. The purpose of this guide is to
                     explain the theory underlying relationships
                     among federal accounts--both budgetary and
                     proprietary--and to illustrate basic
                     budgetary and proprietary accounting for
                     operating appropriations and reimbursable
                     work. For purposes of this publication, we
                     define "basic operating appropriation" as one
                     which is used solely to provide goods and       W
                     services for agency operations.

                     The guide is intended for use by federal
                     operations and systems accountants (1) to
                     facilitate their understanding of concepts
                     involved and. (2) to assist them in properly
                     recording transactions in systems already
                     implemented and in designing future systems.
                     The text assumes that readers have a working
                     knowledge of accounting principles and
                     related terminology.

                     Because of the variations in complexity and
                     unique situations existing in the operation
                     of federal agencies, it is not feasible to
                     cover every possible accounting circumstance.
                     The guide focuses on selected situations that
                     are most common to agencies or for which
                     little guidance is available. It includes
                     illustrations at the general ledger level and
                     is targeted to agencies which receive annual


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.   CHAPTER 1:   INTRODUCTION



                         appropriations. Resulting scope limitations
                         include the following items, accounting for
                         which is not covered in this publication:
                         --   appropriations other than basic operating
                              appropriations, such as those for grants
                              or transfer payments to others;
                         --   situations in which less than the full
                              amount of an operating appropriation is
                              apportioned by OMB;
                         --   dispersions of allotment authority
                              internally by an agency through more than
                              one organizational level;

                         --   unobligated, unspent appropriations for
                              reimbursable work authority which do not
                              expire at fiscal year-end;

                         --   the government's equity in fixed assets
                              other than those accounted for by purchase
                              or construction;

                         --   dispositions of fixed assets;

                         --   unfunded expenses other than for annual
                              leave;

                         --   profits on reimbursable work;

                         --   revolving and trust funds; and

                         --   deposit accounts such as for the
                              withholding and payment of payroll taxes.
                         Readers are referred to the legislative and
                         regulatory material cited earlier for
                         information on this material or for more
                         detail on material summarized by this
                         publication, which avoids inclusion of
                         lengthy information available elsewhere.



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CHAPTER 1:   INTRODUCTION




                     In addition, this publication illustrates
                     accounting which achieves reporting goals
                     primarily by utilizing different general
                     ledger accounts for that purpose. There is
                     no requirement for agencies to standardize
                     accounting systems with this methodology,
                     however. We recognize that agencies may
                     achieve the same goals by using control
                     accounts withi appropriate subsidiary ledgers,
                     or by the addition of data elements to
                     individual entries which identify certain
                     characteristics needed for proper reporting.
                     Until requirements to standardize such
                     methods are levied, agencies should use
                     methods appropriate to their accounting
                     systems which are efficient, effective, and
                     economical.

                     Journal entries illustrated in the guide are
                     prepared in standard general journal form,
                     with SGL titles used wherever available.
                     Financial statements illustrated are in
                     conformance with GAO, Treasury, and OMB
                     guidance. We have used terminology
                     consistent with that in the Glossary
                     mentioned on pp. 1-4 and 1-5 wherever
                     possible, and any additional terms used are
                     defined where they occur in the text.



ORGANIZATION OF      This publication has seven additional
THE GUIDE            chapters.
                     --   Chapter 2 explains and illustrates
                          budgetary accounting for a basic operating
                          appropriation.
                     --   Chapter 3 explains and illustrates
                          proprietary accounting for a basic
                          operating appropriation.



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                     Appropriations and Reimbursables                  4
    CHAPTER 1:   INTRODUCTION




                         --   Chapter 4 provides a comprehensive example
                              of budgetary and proprietary accounting
                              for a basic operating appropriation and
                              includes an illustration of principal
                              financial statements.

                         --   Chapter 5 explains and illustrates the
                              reconciliation of budgetary and
                              proprietary accounting for appropriations.

                         --   Chapter 6 explains and illustrates
                              budgetary accounting for reimbursable work
                              under interagency service agreements.

                         --   Chapter 7 explains and illustrates
                              proprietary accounting for reimbursable
                              work under interagency service agreements.

                         --   Chapter 8 provides a comprehensive example
                              of budgetary and proprietary accounting
                              for reimbursable service work and combines
0                             it with the comprehensive appropriation
                              accounting example in chapter 4.
                              Resulting financial statements are
                              illustrated.




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APPENDIX TO CHAPTER 1:    SELECTED LEGISLATION INVOLVING FEDERAL
                          FINANCIAL ACCOUNTABILITY



                     In addition to the 1870 legislation cited on
                     p. 1-3, which was one of the earliest laws
                     addressing problems of financial
                     accountability in the federal government, the
                     following are major examples of subsequent
                     legislation on the topic. Legal citations
                     are provided for each example.
                     --   The Budget and Accounting Act of 1921,
                          which established GAO, responsible
                          directly to the Congress, to independently
                          audit the financial transactions of the
                          executive branch. (31 U.S.C. ch. 7) The
                          Act also established the Bureau of the
                          Budget, now OMB, under the direction of
                          the President, to develop and submit
                          annually to the Congress a consolidated
                          budget for the government. (31 U.S.C.
                          chs. 5 and 11)

                     --   The Federal Property and Administrative
                          Services Act of 1949, which requires each
                          executive agency to maintain adequate
                          inventory controls and accountability
                          systems for property. This act
                          established the General Services
                          Administration to promulgate property
                          regulations, among other functions, for
                          the executive branch. (40 U.S.C. 483(b)
                          and 751)

                     --   The Budget and Accounting Procedures Act
                          of 1950, which:

                          o   requires apportionments of
                              appropriations by OMB (31 U.S.C. 1512
                              and 1513);


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                          FINANCIAL ACCOUNTABILITY



                          o   requires agencies to develop systems
                              for control of apportionments and their
                              administrative subdivisions (allotments
                              and further internal allocations)
                              (31 U.S.C. 1514);
                          o   expands the original prohibitions
                              against obligations in excess of
                              appropriations to prohibit obligations
                              in excess of apportionments and
                              subdivisions [31 U.S.C. 1517(a)];

                          o   requires that violations of the act be
                              reported to the President and the
                              Congress and prescribes penalties for
                              the violations (31 U.S.C. 1349-1351,
                              1517-J.519);

                          o   mandates that GAO prescribe the
                              accounting principles and standards and
                              related requirements for federal agency
                              accounting systems [31 U.S.C. 3511(a)];   W
                              and
                          o   establishes the Joint Financial
                              Management Improvement Program to
                              promote integrated accounting systems
                              which serve the needs of both the
                              central management agencies (OMB,
                              Treasury, the Office of Personnel
                              Management, and GAO), and the operating
                              agencies. [31 U.S.C. 3511(d)]
                     --   An untitled 1956 enactment, which
                          prescribes use of the accrual basis of
                          accounting within agencies in accordance
                          with GAO's principles and standards.
                          [(31 U.S.C. 3512(d)]

                     --   The Prompt Payment Act of 1982, which
                          requires agencies to pay bills when due as
                          specified in contracts or, if not
                          specified, within 30 days after receipt of
                          proper invoice or acceptance of goods and

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                              FINANCIAL ACCOUNTABILITY



                         services, whichever is later. Otherwise,
                         agencies must pay interest to affected
                         business concerns.  (31 U.S.C. ch. 39)

                         --   The Debt Collection Act of 1982, which
                              gives federal agencies authority to use a
                              variety of means to aggressively pursue
                              co'lection of receivables.
                              (31 U.S.C. ch. 37, subch. II)

                         --   The Federal Managers' Financial Integrity
                              Act of 1982, which requires agencies to
                              report annually to the President any
                              aspects of their accounting systems which
                              do not conform to GAO's principles and
                              standards. [31 U.S.C. 3512(b) and (c)]

                         Additionally, appropriation acts in recent
                         times have usually included the following
                         general provision:

*                             "No part of any appropriation contained in
                               this act shall remain available for
                               obligation beyond the current fiscal year
                               unless expressly so provided herein."
                               [See, for example, P.L. 99-178 (99 Stat.
                               11^33), P.L. 99-591 (100 Stat. 3341-28),
                               and Principles of Appropriation Law,
                               p. 4-4.]




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INTRODUCTION          Most entities--public or private, nonprofit
                      or profit--operate on a budget. They
                      normally maintain a budgetary system to
                      assist: in reaching financial goals and assure
                      that deviations from goals are brought to
                      management's attention.
                      In the federal government, proper budgeting
                      is essential. In addition to its use for the
                      purposes just mentioned, proper budgeting
                      provides a means to track the status of
                      budget: authority to help avoid overexpending
                      or overobligating appropriations, actions
                      that carry penalties under the law (see the
                      appendix to chapter 1). By "budget
                      authority" we mean authority to acquire goods
                      and services and to make payments in
                      accordance with applicable laws and
                      regulations.

                      Because of the special importance of control
                      over budget authority (called "fund control"
                      or "administrative control of funds") to the
                      federal government, the SGL provides accounts
                      in the 4000 series to record the status of
                      budget. authority. Reports based on these
                      accounts indicate budget authority available
                      for funding agency operations and amounts
                      already used, committed or obligated to be
                      used, or still available for use. The
                      budgetary accounts are self-balancing and
                      comprise a separate system from that of the
                      proprietary accounts. Their function, to aid
                      in controlling the use of budget authority,
                      is integral with the proprietary accounting
                      for assets, liabilities, and capital that is
                      also required.


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                                                                      0
                      While authority for a federal agency to
                      acquire goods and services can come from many
                      different sources, this publication discusses
                      accounting for such authority from the two
                      most common sources--basic operating
                      appropriations and reimbursable work that one
                      agency performs for another agency. This
                      chapter and chapter 6 discuss budgetary
                      accounting concepts and entries for operating
                      appropriations and reimbursable work,
                      respectively, while chapters 3 and 7 cover
                      proprietary accounting for appropriations and
                      reimbursable work, respectively.



CONCEPTUAL            Budget authority granted in a Congressional
FRAMEWORK FOR A       appropriation enacted into law is available
BASIC OPERATING       to be used to fund agency operations.   Once
APPROPRIATION         appropriated, the authority is delegated and
                      "used" through the following events, which
                      generally occur sequentially.
                                                                      0
                      1. Apportionment of the appropriation by
                      OMB, usually by quarter. An apportionment
                      delegates the amount of the appropriation
                      which may be used by an agency as authority
                      to procure goods and services through the end
                      of the quarter. This guide illustrates
                      accounting for apportionments under the
                      normal circumstance that OMB apportions the
                      entire appropriation during the year.
                      2. Allotment of the apportionment by the
                      head of an agency or his designee. An
                      allotment delegates budget authority for
                      procurement of goods and services to selected
                      individuals in the organization. To simplify
                      illustrations, this publication assumes that
                      allotments are made at a single management
                      level in an agency.




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                         3. Commitment of the allotment by authorized
                         employees prior to the actual ordering of
                         goods and services. A commitment reserves
                         budget authority from the allotment for the
                         estimated amount of the order. Commitment
                         accounting, required by GAO's Title 2, is
                         useful for planning and fund control and is,
                         therefore, included in this publication.
                         However, commitments do not legally encumber
                         an appropriation as do obligations (see next
                         item), and some agencies use commitments only
                         for certain spending categories.
                         4. Obligation of the allotment through a
                         formal order for the acquisition of goods and
                         services. An obligation releases any related
                         prior commitment and charges the allotment
                         with the latest estimate of the cost of items
                         ordered. Obligations are initially recorded
                         as "undelivered orders" pending feceipt of
                         the goods and services involved.
                          5. An expended appropriation exhausts budget
                          authority through the receipt of goods and
                          services ordered. An expending of
                          appropriation authority releases the related
                          obligation (that is, the undelivered order)
                          and charges the appropriation with the actual
                          cost of items received. Care must be taken




                          1
                          OMB Circular A-34, "Instructions on Budget
                         Execution," defines obligations as being the
                         sum of Undelivered Orders plus Expended
                         Appropriations. To clearly distinguish
                         between the two, this guide uses the term
                         "obligations" in the more narrow sense of
                         Undelivered Orders only. Thus, when we say a
                         transaction obligates an appropriation, we
                         mean that an order for goods or services is
                         placed against the appropriation.

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                                                                      0
                      not to confuse an expended appropriation with
                      an "expenditure" of funds in the sense of a
                      cash disbursement. The word "expended," as
                      used in the context of federal budgetary
                      accounting, means that the appropriation
                      authority "expended" has been used to acquire
                      goods and services. It is no longer
                      available to provide for the acquisition of
                      additional goods and services.  (It should be
                      noted that payment for goods and services
                      received and related liabilities for such
                      payment are part of proprietary accounting.
                      They are not accounted for in budgetary
                      accounts.)

                      Thus, at any given point in time, the
                      appropriation authority must be accounted for
                      as delegated (via apportionments and
                      allotments) or not delegated. Delegated
                      authority may be either reserved (via
                      commitments and obligations) or expended (by
                      receipt of goods and services ordered). The
                      following equation represents the
                      relationships between these elements.



     (A)                         (B)           +        (C)

  Appropriation            Appropriation           Delegations,
  authority                not apportioned         reservations,
                           (not delegated)         and expending
                                                   of appropria-
                                                   tion authority


                      Part C of the equation is the sum of the
                      following items, which correspond to the five
                      events described on pp. 2-2 through 2-5:

                      1.   apportionments of the appropriation,
                      2.   allotments of the apportionment,
                      3.   commitments against the allotments,



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                             4.     obligations against the commitments (if
                                    made) or against the allotments (if
                                    commitments are not made), and
                             5.     expenditures of appropriation authority
                                    against the obligations.

                             The SGI. provides an account for each item in
                             the equation, with normal balances of either
                             debit or credit as set forth below.


     Equation    SGL Acct.                SGL Account              Normal
     Item No.    Number                   Title                    Balance

        A          4119       Other Appropriations Realizeda         Dr.

        B          4450       Authority Available for Apportion-     Cr.
                               ment

        C1         4510       Apportionment Available for            Cr.
                                  Distribution

        C2         4610       Allotments Available for               Cr.
                               Commitment/Obligation

        C3         4700       Commitments Available for              Cr.
                               Obligation

        C4         4800       Undelivered Orders                     Cr.

        C5         4900       Expended Appropriations                Cr.

      "Other" in the title means "other than certain specific
      appropriation authority for which the SGL provides separate
      individual accounts."




    BASIC                    The nature of the budgetary equation gives
    TRANSACTIONS             rise to six basic transactions. The
                             transactions record the total appropriation
                             authority and subsequent changes in status as
                             the authority is delegated, committed,


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                      obligated, ard expended.   The flow and basic
                      entries involved are set forth in the chart
                      on the next page.

                     Entries for the receipt of goods and services
                     are recorded upon receipt regardless of when
                     payment is made. Proprietary accounting
                     entries, discussed in chapter 3, are made for
                     the accrual and payment for the goods and
                     services.




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*                 APPROPRIATIONS




     Trans-
     action          Description                 Journal Entry
     Number


      2-1        Receipt of              Other Appropriations Realized
                 Appropriation              Authority Available for
                 Authority                  Apportionment

      2-2        Apportionment           Authority Available for
                                         Apportionment
                                            Apportionment Available for
                                            Distribution

      2-3        Allotment               Apportionment Available for
                                         Distribution
                                            Allotments Available for
                                            Commitment/Obligation

      2-4        Commitment2             Allotments Available for
                                         Commitment/Obligation
0                                           Commitments Available for
                                            Obligation

      2-5        Obligation2             Commitments Available for
                                         Obligation
                                            Undelivered Orders

      2-6        Receipt of              Undelivered Orders
                 Goods/Services             Expended Appropriations




                               2
                                Note that, if commitment accounting was not
                               used prior to the obligation of an allotment,
                               transaction 2-4 would be omitted. Transaction
                               2-5, to record the obligation, would then be

                               Allotments Available for Commitment/Obligation
                                  Undelivered Orders




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ILLUSTRATION--       This section illustrates the journalizing
BASIC BUDGETARY      for transactions described in the preceding
TRANSACTIONS FOR     section. Small dollar values are used to
AN APPROPRIATION     simplify the illustration. The transactions
                     and required entries, prepared in general
                     journal form, are shown below.

                                            (1)

                      2-1   The agency receives an appropriation of
                            $100.

                            Other Appropriations Realized    100
                               Authority Available for
                               Apportionment                       100



                                            (2)

                      2-2   During the year, OMB apportions the
                            entire appropriation.

                            Authority Available
                            for Apportionment                100
                               Apportionment Available
                               for Distribution                    100




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                                                (3)

                          2-3   During the year, the agency head allots
                                $93 of the apportionment.

                                Apportionment Available
                                for Distribution                  93
                                   Allotments Available for
                                   Commitment/Obligation               93



                                                (4)

                          2-4   During the year, the agency commits $91
                                of the allotment.

                                Allotments Available for
                                Commitment/Obligation             91
                                   Commitments Available
*                                  for obligation                      91



                                                (5)

                          2-5   During the year, goods and services for
                                $88 of the commitment are ordered via
                                purchase orders, travel orders, and
                                other obligating documents ($3 of the
                                $91 in commitments from the previous
                                transaction remains unobligated).
                                Assume that the total of the orders




                         3In practice, an agency head normally allots
                         the entire apportionment over the course of
                         the year. In order to better illustrate the
                         flow of transactions through the accounts
                         here and in other examples, we have assumed
                         an allotment amount less than the total
                         apportionment.


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                            placed is $90, because the commitment
                            process underestimated the cost of items
                            for which commitments were made.

                            Allotments Available for
                            Commitment/Obligation                  2
                            Commitments Available
                            for Obligation                        88
                               Undelivered Orders                       90
                                         *   *   **       *


                     Note that, because the actual dollar value of
                     the orders exceeded the amount committed, the
                     allotments account must be reduced
                     accordingly tD provide the correct ($90) 4
                     balance in th2 Undelivered Orders account.




                      4
                       This compound entry is the net result of two
                      interrelated transactions. The first is an
                      adjustment of the commitment from $88 to $90,
                      as shown below.

                      2-4   Allotments Available for
                            Commitment/Obligation                  2
                               Commitments Available
                               for Obligation                           2

                                         *   *   *    *       *


                      The second entry removes the commitment and
                      establishes a $90 obligation for the
                      appropriation:

                      2-5   Commitments Available
                            for Obligation                        90
                               Undelivered Orders                      90



                      (continued on next page)


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                          (The text continues on page 2-12.)



                          4   (continued from preceding page)

                          Alternately, an accounting system could be
                          programmed to reverse the commitment and
                          record the obligation, respectively, with
                          these two entries:

                                                         (1)

                          To reverse the commitment

                                 Commitments Available
                                 for Obligation                 88
                                    Allotments Available for
                                    Commitment/Obligation            88



                                                         (2)

                          To record the obligation

                                 Allotments Available for
                                 Commitment/Obligation          90
                                    Undelivered Orders               90



                          Many agencies use the compound entry shown in
                          the texl:. Others use the reversal method
                          illustrated in this footnote. For purposes
                          of illustration, we will use compound entries
                          to liquidate commitments and obligations at
                          amounts different than those for which the
                          commitments and obligations were placed on
                          the books.




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                                            (6)

                      2-6   During the year, of the $90 in orders
                            placed, goods and services are received
                            for $80 of the orders ($10 of the orders
                            are sti-l undelivered). The amount of
                            the verhfied bills totals $79.

                            Undelivered Orders                80
                               Expended Appropriations             79
                               Allot:ments Available for
                               Comm:Ltment/Obligation               l

                      Note that, because the actual dollar value of
                      the orders received was less than the amount
                      estimated, the difference is added back to
                      the allotments account, from which it was
                      first taken.



                      At fiscal year-end, after these transactions
                      have been posted, the budgetary accounts
                      would have the following balances.




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                          Illustrative Federal Agency
                      Trial Balance of Budgetary Accounts
                              September 30, Year

                                                              Account Bal.
      Key   Account Name                                      Dr.       Cr.
      (a)   Other Appropriations Realized              $100
      (b)   Authority Available for Apportionment                             $    0
      (c)   Apportionment Available for Distribution                               7
      (d)   Allotments Available for Commitment/Obligation                         1
      (e)   Commitments Available for Obligation                                   3
      (f)   Undelivered Orders                                                    10
      (g)   Expended Appropriations                                               79

            Totals                                             $100           $100

     a Normally,accounts with zero balances would not appear in a
      trial balance, but we have included this account for purposes
      of illustration. This technique will be used in presenting
      several of the trial balances in this publication, but
      subsequent illustrations will not carry this note.


                            The following information can be derived from
                            the accounts in the trial balance, using the
                            keys (a through g) provided.
                            --   All $100 in budget authority was
                                 apportioned by OMB (b),

                            --   $7 is being held for future allotment to
                                 organizations within the agency (c), and

                            --   Goods and services totalling $79 have
                                 already been received (g).

                           Of the remaining $14 ($100 -       $7 -    $79),

                            --   $1() has been used to order goods and
                                 services not yet received (f),


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                      --   $3 has been reserved for goods and
                           services yet to be ordered (e), and

                      --   $1 is still available for additional goods
                           and services from the current allotment
                           (d).



CLOSING ENTRIES      An appropriation is usually not completely
WHEN AN              expended or reserved at the end of the
APPROPRIATION        fiscal5 year or other period for which it is
IS NOT FULLY         valid.    WhEn it is not, the disposition of
EXPENDED             the budget authority from the appropriation
                     occurs as follows.

                      1.    Budget authority which is not expended
                            or obligated normally expires and must be
                            "returned" to Treasury.   This expired




                     5In order to avoid the awkwardness of having
                     to say "end of the fiscal year or other
                     period for which an appropriation is valid"
                     each time we refer to the end of such period,
                     we will assume for discussion purposes that
                     appropriations for which we provide narrative
                     and illustration cover one fiscal year.
                     Hence, we will refer only to "fiscal year-
                     end."
                     6The "return" is made by the TFS 2108, "Year-
                     End Closing Statement," which reports the
                     amount of budget authority to be withdrawn by
                     Treasury.   Dee 31 U.S.C. 1552(a) (2) and
                     Title 7, Sec. 4.2.


                      (continued on next page)




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                            authority is reflected in the accounts
                            for commitments, allotments, and
                            apportionments of budget authority, and
                            is removed from the books.
                      2.    Authority related to the portion of
                            appropriations which has been expended is
                            removed from the books.

                      3.    Authority to pay for undelivered orders
                            remains, and may be used to fund the
                            orders when they are received subsequent
                            to fiscal year-end.
                      Closing entries for expired and expended
                      appropriation authority are discussed in the
                      remainder of this section. Accounting for
                      undelivered orders which are filled after the
                      appropriation's fiscal year-end is discussed
                      in a separate section beginning on p. 2-25.
                      Before closing entries are made, the basic
                      budgetary accounting equation may be
                      represented as follows.




                     6   (Continued from prior page)

                     Note that no actual cash flows between
                     agencies and Treasury. Rather, spending
                     authority is provided by appropriations, and
                     agencies make payments, or request Treasury
                     to make payments, from cash held by Treasury
                     in accordance with the appropriation and
                     other applicable laws and regulations.
                     Accounting for this "Fund Balance With
                     Treasury"--the receipt and disbursement of
                     cash--is part of proprietary accounting and
                     is discussed in chapter 3.

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 Other             Expired            Expended          Undeliv-
 Appropria-    =   Appropri-      d   Appropria-   +    ered
 tions             ations for:        tions             Orders
 Realized
                   o Commitments
                   o Allotments
                   o Apportionments-


                       At fiscal year-end, budgetary entries must be
                       made to close accounts representing (1)
                       expired budget authority and (2) Expended
                       Appropriations. The process is explained
                       below.

                       Step l--Remcive expired budget authority from
                       the accounts:

                       Five entries; are required to remove expired
                       appropriation authority from the budgetary
                       accounts--one each for commitments,
                       allotments, and apportionments; one to
                       establish the amount of expired budget
                       authority to be returned to the Treasury; and
                       one to return the authority to Treasury and
                       reduce the appropriation accordingly. The
                       account use&. to indicate the amount of
                       authority tc be returned to Treasury is SGL
                       account 4391., "Restorations, Writeoffs, and
                       Withdrawals," and the account used to reduce
                       the appropriation when the return is effected
                       is SGL account 4114, "Appropriations Realized
                       but Withdrawn." The entries follow.

                                             (1)

                       2-7   To remove unobligated commitments from
                             the accounts:

                             Commitments Available for Obligation
                                Allotments Available for
                                Commitment/Obligation



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                      The effect of this entry is to close the
                      commitments account and restore the budget
                      authority reserved for the commitments, which
                      has expired, to the allotment account.


                                            (2)

                      2-8   To remove unused allotment authority
                            from the accounts:

                            Allotments Available for
                            Commitment/Obligation
                               Apportionment Available for
                               Distribution
                      The effect of this entry is to close the
                      allotment account and restore the expired
                      allotment authority to the apportionment
                      account.



                                            (3)

                      2-9   To remove the apportionment authority
                            from the books:

                            Apportionment Available for Distribution
                               Authority Available for Apportionment

                      The effect of this entry is to close the
                      apportionment account and restore the expired
                      apportionment authority to the appropriation.
                      At this point, the balance in the account
                      Authority Available for Apportionment is the
                      sum of expired commitments, allotments, and
                      apportionments. These are the components of
                      the amount of budget authority which, because
                      it has expired, must be returned to Treasury.




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                                              (4)
                      2-10   To establish the account for budget
                             authority which must be returned to
                             Treasury:
                             Authority Available for Apportionment
                                Restorations, Writeoffs, and
                                Withdrawals

                      The effect of this entry is to close the
                      authority available for apportionment and
                      establish the amount of budget authority
                      which is to be returned to Treasury.



                                              (5)
                      2-11   To reduce the appropriation by the
                             amount of budget authority returned to
                             Treasury when the return is made:
                             Appropriations Realized but Withdrawn
                                Other Appropriations Realized
                      The effect of this entry is to reduce
                      the appropriation by the amount of expired
                      authority. The SGL mandates a separate
                      account--Appropriations Realized but
                      Withdrawn--to use in recording the reduction
                      in the appropriation rather than debiting
                      Restorations, Writeoffs, and Withdrawals.
                      This is done to assist in providing a history
                      of what was returned to Treasury and amounts
                      returned but subsequently used or additional
                      amounts subsequently returned. (A primary
                      use of budget authority returned to Treasury
                      is to fund undelivered orders existing at
                      fiscal year-end for which the amount
                      estimated for the orders is less than the
                      actual amount. Filling undelivered orders




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                          after fiscal year-end is discussed beginning
                          on p. 2-25.

                          Note that Restorations, Writeoffs, and
                          Withdrawals would have been closed had it
                          been debited directly. Even though it is not
                          closed., however, it is offset by the account
                          which is debited--Appropriations Realized but
                          Withdrawn. In other words, after making
                          entry 2-11, credit balance of Restorations,
                          Writeoffs, and Withdrawals equals the debit
                          balance of Appropriations Realized but
                          Withdrawn. These two accounts serve as
                          memorandum accounts to indicate the amount of
                          lapsed appropriations returned to Treasury.
                          Additional related information is set forth
                          in the section on filling undelivered orders
                          in subsequent years, which begins on
                          p. 2-25.


                          After this entry is made, the remaining
                          account balances have the following
                          relationship.




                          7Note that the relationship could also be
                          brought about by substituting the following
                          two entries in place of entries 2-7 through
                          2-11. The first entry closes the accounts
                          for lapsed authority into Other
                          Appropriations Realized. The second entry
                          establishes the memorandum accounts to
                          indicate the amount of lapsed authority
                          returned.

                          (continued on next page)




    Page 2-19             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS




Other                         Expended                   Undelivered
Appropriations        =       Appropriations      +      Orders
Realized


                               and


[   Appropriations Realized
    but Withdrawn              =
                                         Restorations, Writeoffs,
                                         and Withdrawals




                      7(continued from preceding page)

                      Alternate Closing Entry 1:
                      Commitments Available for Obligation
                      Allotments Available for
                      Commitment/Obligation
                      Apportionment Available for Distribution
                         Other Appropriations Realized



                      Alternate Closing Entry 2:

                      Appropriations Realized But Withdrawn
                         Restorations, Writeoffs, and Withdrawals



                      The entries shown in the body of the text
                      will be used for illustrative purposes in
                      subsequent sections of this guide. In
                      practice, either set of entries may be made.


Page 2-20             GAO Accounting Guide:          September 1990
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    CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS



                          Step 2--Remove Expended Appropriations

                          2-12   To remove expended appropriations from
                                 the accounts:

                                 Expended Appropriations
                                    Other Appropriations Realized

                          The effect of this entry is to close the
                          Expended Appropriations account and reduce
                          the Other Appropriations Realized account by
                          the amount of expended appropriations.



                          After the entry is made, all budgetary
                          accounts involved with entries 2-1 through
                          2-6 have been brought to zero except those
                          accounts which are left open until the
                          appropriation is fully expended by the
                          receipt: of goods and services ordered but not
0                         delivered at fiscal year-end.
                          at this; point,
                                                          Specifically,


      Other Appropriations Realized       =       Undelivered Orders
      (Remaining Appropriation Authority)


                                    and


        Appropriations Realized             Restorations, Writeoffs,
        but Withdrawn               =       and Withdrawals




    ILLUSTRATION--        An analysis of the trial balance on p. 2-13
    CLOSING ENTRIES       indicates that at fiscal year-end, before
    FOR AN                closing entries are made, $79 has been
    APPROPRIATION         expended and $10 has been obligated for
                          undelivered orders. The remaining budget


O   Page 2-21             GAO Accounting Guide:
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                      authority, $11, expires. Entries to close
                      the books and return the expired
                      appropriation to Treasury are set forth
                      below.

                                                 (1)

                      2-7   To close the commitments account:

                        Commitments Available for
                        obligation                                3
                           Allotments Available for
                           Commitment/Obligation                      3



                                                 (2)

                      2-8   To close the allotments account:

                            Allotments Available for
                            Commitment/Obligation
                               Apportionment Available
                                                                  4        0
                               for Distribution                       4
                                         *   *    *    *   *


                                                 (3)

                      2-9   To close the apportionment account:

                            Apportionment Available
                            for Distribution                    11
                               Authority Available for
                               Apportionment                          11




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.   CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS



                                                 (4)
                          2-10   To establish the requirement to return
                                 expired budget authority to Treasury:
                                 Authority Available
                                 for Apportionment                 11
                                    Restorations, Writeoffs,
                                    and Withdrawals                     11


                                                 (5)
                          2-11   To reduce the appropriation by the
                                 amount of budget authority returned to
                                 Treasury when the return is made:

                                 Appropriations Realized
                                 but Withdrawn                     11
                                    Other Appropriations
                                    Realized                            11


                         After this entry, the SGL anticipates the
                         preparation of a trial balance, which it
                         terms "1pre-closing trial balance." (The
                         phrase "pre-closing" may be misleading, as
                         some of the accounts are already closed.)
                         The trial balance is significant at this
                         point because the SGL refers to certain
                         reports that require account information that
                         appears on the trial balance. Such a "pre-
                         closing" trial balance for our illustration,
                         after entries 2-7 through 2-11 had been made,
                         is shown on the next page.




O Page 2-23              GAO Accounting Guide:
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                                                           September 1990
CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS




                  Illustrative FeCeral Agency
       "Pre-Closing" Trial Balance of Budgetary Accounts
                     September 30. (Year)

                                                  Acct. Balance
 Account                                           Dr.       Cr.

 Other Appropriations Realized                      $89
 Undelivered Orders                                           $10
 Expended Appropriations                                       79
 Appropriations Realized but Withdrawn               11
 Restorations, Writeoffs, and Withdrawals                      11

                                                   $100      $100



                     To close the expended appropriations account,
                     the following entry is made.

                      2-12   Expended Appropriations          79
                                Other Appropriations Realized       79



                     After closing   entries have been posted, only
                     four accounts have balances: Other
                     Appropriations Realized, which has a debit
                     balance of $:LO, and Undelivered Orders, which
                     has a credit balance in that amount.
                     Similarly, the accounts Appropriations
                     Realized but Withdrawn and Restorations,
                     Writeoffs and Withdrawals each have $11
                     balances, debit and credit, respectively. A
                     post-closing trial balance consists of only
                     those accouni:s. Accounting for the
                     disposition of the undelivered orders is
                     discussed beginning on the next page.




Page 2-24            GAO Accounting Guide:          September 1990
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    CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS




    CLOSING ENTRY FOR     The preceding sections dealt with the normal
    A FULLY EXPENDED      situation in which an operating appropriation
    APPROPRIATION         is not fully expended at the end of the
                          fiscal year. If the appropriation is fully
                          expended at the end of the fiscal year, only
                          the following entry is required:

                          2-12   Expended Appropriations
                                    Other Appropriations Realized

                          Once that entry is made for a fully expended
                          appropriation, all accounts will have zero
                          balances, and no additional transactions are
                          required for the appropriation.




.   UNDELIVERED ORDERS
    FILLED AFTER
                          Often, undelivered orders exist at the end of
                          a fiscal year. When the goods and
    FISCAL YEAR-END       services are received or the orders are
                          cancelled subsequent to the end of the fiscal
                          year in which they were placed, they pust be
                          accounted for.  Four basic situations
                          involving these undelivered orders arise.
                          They are listed on the next page.




                          8A fifth situation is one in which, as of a
                          given point in time subsequent to the end of
                          the appropriation year in which they were
                          placed, the orders are neither received nor
                          cancelled. Such a case requires no
                          accounting. The order and related budget
                          authority are valid until filled or
                          cancelled.


O   Page 2-25             GAO Accounting Guide:          September 1990
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                      1.     The orders are cancelled.

                      2.     The orders are received in the same
                             amount as estimated.

                      3.     The orders are received in an amount less
                             than estimated.

                      4.     The orders are received in an amount
                             greater than estimated.

                     Accounting for these situations is set forth
                     in this section. Remember that, in each case
                     illustrated, just prior to receiving or
                     cancelling the orders, Other Appropriations
                     Realized and Undelivered Orders will have
                     equal balances. To continue with the
                     preceding example, assume that, after closing
                     entries are made at fiscal year-end, the two
                     accounts each have a balance of $10. Thus,
                     $10 of undelivered orders remain on the
                     books, and there is $10 of budget authority
                     to pay for the orders. In addition, assume
                     that both Appropriations Realized but
                     Withdrawn and Restorations, Writeoffs, and
                     Withdrawals have an $11 balance.


Situation 1--        When orders are cancelled, they must be
The Orders Are       removed from the books. Simultaneously,
Cancelled            because the appropriation authority has
                     expired, budget authority reserved for the
                     purchase of goods and services must be
                     withdrawn froun the agency. Because such
                     withdrawal occurring after fiscal year-end
                     must be reported on standard external reports
                     illustrated in., chapter 4, the SGL provides
                     account 4630, "Other Funds Unavailable for
                     Commitment/Obligation,"to facilitate the
                     reporting.

                      2-13     Appropriations Realized but
                               Withdrawn                           10
                                  Other Funds Unavailable
                                  for Commitment/Obligation             10


Page 2-26            GAO Accounting Guide:          September 1990
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                                            I   ~~~ ~~~ ~ ~ ~ ~


    CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS



                                                   and

                          2-14   Undelivered Orders               10
                                    Other Appropriations Realized                 10

                          Note that the credit in entry 2-14 is to
                          Other Appropriations Realized instead of to
                          Allotments Available for Commitment/
                          Obligation, because the Allotments account
                          was closed at the end of the prior fiscal
                          year (see entry 2-8 on p. 2-17).



                          At this point, Undelivered Orders and Other
                          Appropriations Realized are closed and all
                          budget authority has either been expended or
                          withdrawn. Accounts related to the
                          withdrawal of appropriations authority are as
                          follows:


                                                                  Acct. Balance
      Account                                                       Dr.     Cr.

      Appropriations Realized but Withdrawn             $21
      Restorations, Writeoffs, and Withdrawals                              $11
      Other Funds Unavailable for Commitment/Obligation                      10



                          From this, the following information can be
                          derived::

                          --   $11 in budget authority has previously
                               been withdrawn and reported to Treasury,

                          --   $10 in budget authority has subsequently
                               been withdrawn but has not yet been
                               reported to Treasury (see footnote 6), and

                          --   $21 in total budget authority has been
                               withdrawn.



.   Page 2-27             GAO Accounting Guide:         September 1990
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             APPROPRIATIONS



                       Note that the information satisfies the basic
                       equation that


     Net                       Withdrawals/         Withdrawals/
     Appropriations            Restorals            Restorals Not
     Withdrawn/                Reported to          Yet Reported to
     Restored           =      Treasury         +   Treasury

     (Appropriations           (Restorations        (Other Funds
     Realized but              Writeoffs, and       Unavailable for
     Withdrawn)                Withdrawals)         Commitment/
                                                    Obligation)


                       At year-end, the $10 in unused budget
                       authority is returned to Treasury via the
                       reporting described in footnote 6 (see
                       p. 2-14). Tc record this, the following
                       entry is made to close the temporary account
                       Other Funds Unavailable for Commitment/
                       Obligation tc the account Restorations,
                       Writeoffs, and Withdrawals.

                       2-15   Other Funds Unavailable for
                              Commitment/Obligation             10
                                 Restorations, Writeoffs, and
                                 Withdrawals                          10



                       After this entry is made, all budget
                       authority has either been expended or
                       withdrawn. Appropriations Realized but
                       Withdrawn has a debit balance of $21.
                       Restorations, Writeoffs, and Withdrawals also
                       has a credit balance in that amount,
                       signifying that a total of $21 in
                       appropriation budget authority has been
                       withdrawn and has been reported to Treasury.




Page 2-28              GAO Accounting Guide:          September 1990
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.   CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
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    Situation 2--         If orders are received in the amount
    The Orders Are        estimated, they are accounted for in the
    Received in the       same manner as any other undelivered orders
    Amount Estimated      received, and the following entry is made.

                          2-6    Undelivered Orders                10
                                    Expended Appropriations             10



                          The books are then closed with the following
                          entry.

                          2-12    Expended Appropriations          10
                                     Other Appropriations Realized      10



                         At this point, Undelivered Orders, Expended
                         Appropriations, and Other Appropriations
                         Realized are closed and all budget authority
                         has either been expended or withdrawn.
                         Appropriations Realized but Withdrawn still
                         has a debit balance of $11. Restorations,
                         Writeoffs, and Withdrawals also has a credit
                         balance in that amount, signifying that $11
                         in appropriation budget authority has been
                         withdrawn and has been reported to Treasury.




.   Page 2-29            GAO Accounting Guide:
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                                                          September 1990
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Situation 3--        Assume that all orders are received, with $9
The Orders are       billed by vendors. The following entry is
Received in an       made to show ecpending of the
Amount Less Than     appropriation.
Estimated
                      2-16   Undelivered Orders               10
                                Expended Appropriations                9
                                Other Appropriations Realized          1

                      Note that the $1 credit is to Other
                      Appropriations Realized instead of to
                      Allotments Available for Commitment/
                      Obligation, because the budget authority has
                      expired and cannot be used to acquire
                      additional gDods and services.



                      In addition, the following entry is required
                      to indicate that the $1 in spending authority
                      must be returned to Treasury.




                      9
                       Two separate entries are sometimes made in
                      practice, one to decrease the undelivered
                      orders by $1 and one to expend the
                      appropriation. For the example, these
                      entries would be:

                      Undelivered Orders                    1
                         Other Appropriations Realized             1

                                         and

                      Undelivered Orders                    9
                         Expended Appropriations                   9




Page 2-30             GAO Accounting Guide:          September 1990
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.   CHAPTER 2:   BUDGETARY ACCOUNTING FOR BASIC OPERATING
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                          2-13    Appropriations Realized but
                                  Withdrawn                         1
                                     Other Funds Unavailable for
                                     Commitment/Obligation



                          At this point, accounts related to the
                          withdrawal of appropriations authority are as
                          shown below:


                                                         Acct. Balance
      Account                                              Dr.     Cr.

      Appropriations Realized but Withdrawn             $12
      Restorations, Writeoffs, and Withdrawals                      $11
      Other Funds Unavailable for Commitment/Obligation               1



                          From this information, the following can be
                          derived:

                          --   $11 in budget authority has previously
                               been withdrawn and reported to Treasury.

                          --   $1 in budget authority has subsequently
                               been withdrawn but has not yet been
                               reported to Treasury (see footnote 5), and

                          --   $12 in total budget authority has been
                               withdrawn.

                          When unused budget authority is returned to
                          Treasury, the following closing entry is
                          made.

                          2-15    Other Funds Unavailable for
                                  Commitment/Obligation             1
                                     Restorations, Writeoffs, and
                                     Withdrawals




    Page 2-31             GAO Accounting Guide:         September 1990
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                     Also, the Expended Appropriations account
                     must be close~d, with the entry below.
                      2-12   Expended Appropriations            9
                                Other Appropriations Realized       9



                     After these entries are made, Undelivered
                     Orders, Expended Appropriations, and other
                     Appropriations Realized are closed and all
                     budget authority has either been expended or
                     withdrawn. Appropriations Realized but
                     Withdrawn has a debit balance of $12.
                     Restorations, Writeoffs, and Withdrawals also
                     has a credit balance in that amount,
                     signifying that $12 in appropriation budget
                     authority has been withdrawn and has been
                     reported to Trceasury.

situation 4--        Assume that all orders were received, with
The orders Are       vendors billing $12. Assume further that the
Received in an       agency had previously returned at least $2 in
Amount Greater       expired appropriation authority to Treasury
Than Estimated       (if it had not, the agency would have to
                     return the goods, renegotiate the prices, or
                     seek additional budget authority from the
                     Congress).

                     First, $2 in withdrawn budget authority would
                     have to be restored from the expired1 0
                     appropriations returned to Treasury.    This
                     would be recorded with the following entry.




                       This restoration is normally effected by
                      10

                      agencies at the time funds are needed and is
                      reported to Treasury after the end of the
                      fiscal year on the TFS-2108, "Year-End
                      Closing Statement," illustrated in chapters 4
                      and 8.

Page 2-32            GAO Accounting Guide:          September 1990
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                          2-17   Other Funds Unavailable for
                                 Commitment/obligation                 2
                                    Appropriations Realized
                                    but Withdrawn                               2



                          The following entry would be made to record
                          the receipt of goods And services and exhaust
                          the budget authority.

                          2-18   Undelivered Orders                   10
                                 Other Appropriations Realized         2
                                    Expended Appropriations                    12

                          Note that the $2 debit is to Other
                          Appropriations Realized instead of to
                          Allotments Available for Commitment/
                          Obligation, because the Allotments account
                          was closed at the end of the prior fiscal
                          year (see entry 2-8 on p. 2-17).




                           Two separate entries are sometimes made in
                          practice, one to increase the undelivered
                          orders by $2 and one to expend the
                          appropriation. For the example, these
                          entries would be:

                          Other Appropriations Realized           2
                             Undelivered Orders                            2

                                            and

                         Undelivered Orders                      12
                            Expended Appropriations                    12




O   Page 2-33            GAO Accounting Guide:          September 1990
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                      After the entry is made, the following
                      account balances related to withdrawals and
                      restorations of budget authority would
                      result:


                                                      Acct. Balance
 Account                                                Dr.     Cr.

 Appropriations Realized but Withdrawn             $ 9
 Restorations, Writeoffs, and Withdrawals                          $11
 Other Funds Unavailable for Commitment/Obligation   2



                      This information indicates that:

                      --   $11 in budget authority has previously
                           been withdrawn and reported to Treasury,

                      --   $2 in budget authority previously
                           withdrawn has been restored, but the
                           restoral has not yet been reported to
                           Treasury (see footnote 6), and

                      --   $9 in total budget authority has been
                           withdrawn.

                      When the restored appropriation authority
                      used is reported to Treasury, this entry
                      would be made:

                      2-19    Restorations, Writeoffs, and
                              Withdrawals                          2
                                 Other Funds Unavailable for
                                 Commitment/Obligation                    2

                      In addition, the Expended Appropriations
                      account would be closed, using the standard
                      closing entry for that transaction, as shown
                      below.

                      2-12    Expended Appropriations          12
                                 Other Appropriations Realized           12




Page 2-34             GAO Accounting Guide:          September 1990
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                     At this point, Undelivered Orders, Expended
                     Appropriations, and Other Appropriations
                     Realized are closed, and all budget authority
                     has either been expended or withdrawn.
                     Appropriations Realized but Withdrawn has a
                     debit balance of $9, and Restorations,
                     Writeoffs, and Withdrawals has a credit
                     balance of that amount. This indicates that
                     $9 of appropriation authority (in net) has
                     been returned to Treasury, and that all $9
                     has been reported.



CURRENT AND           Because undelivered orders and related
EXPIRED               budget authority may exist at the end of
APPROPRIATIONS        an appropriation year and thus carry over
ACCOUNTED FOR IN      into subsequent time periods, transactions
A SINGLE YEAR         involving both current and expired
                      appropriations may be accounted for in a
                      single year. For example, if undelivered
                      orders from a Year A appropriation exist at
                      the end of Year A, then in Year B, both (1)
                      the remaining transactions related to the
                      Year A appropriation and (2) those related to
                      the Year B appropriation must be accounted
                      for.

                     When budget authority from an appropriation
                     remains at the end of the appropriation year,
                     budgetary accounts associated with the
                     appropriations must be separately maintained
                     through the end of the two succeeding
                     years.   Because each appropriation must be
                     accounted for separately, federal accounting
                     systems must segregate accounts for each
                     appropriation. This segregation may be
                     achieved by using year designators with the




                      1231   U.S.C. 1552 and 1553.


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                     account titles,  such as "Other Appropriations
                     Realized--Year A" and "Undelivered Orders--
                     Year B; " by associating Treasury
                     appropriation symbols (which contain a data
                     element identifying the year to which an
                     appropriation applies); or by some other
                     segregating method.

                     If budget authority still remains after the 2
                     years subsequent to that for which the
                     appropriation was made, all such authority is
                     "merged" into a single account. For example,
                     Year A authority would be accounted for
                     separately through Years A, B, and C, and at
                     the end of year C would be placed in the
                     merge category. At that point, it would no
                     longer be identified with appropriation year
                     A.  Similarly, Year B authority would be
                     accounted for separately through years B, C,
                     and D, and at the end of Year D would be
                     placed in the merge category.
                     Thus, at any given point in time, an agency
                     which received one-year appropriations might
                     have active on its books four sets of
                     appropriation accounts--the current year's
                     appropriation, the prior year's
                     appropriation, the appropriation for the
                     second-prior year, and the appropriations for
                     all years prior to that--the merged
                     appropriation. (This last account is often
                     referred to as the "M appropriation
                     account").



Outputs Required      Certain laws and regulations impose a number
for Delegating,       of external reporting requirements
Obligating, and       on federal agencies. Principal reports are
Expending an          illustrated :Ln chapter 4. The SGL provides
Appropriation         "crosswalks" that define the relationship




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                           between accounts for the transactions
                           described earlier and standard external
                           reports.

                           The crosswalk information will not be
                           repeated here because the material is
                           lengthy. However, readers using this
                           publication should be aware of the existence
                           and content of the crosswalks in the SGL. By
                           using the crosswalks, it is possible to
                           determine for each standard form which
                           accounts are used and on which line they
                           appear (by report line number). One can also
                           look up an account number and determine all
                           of its appearances in standard reports.




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                  (This page intentionally blank.)                    0




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    INTRODUCTION         Federal agencies must account for assets
                         entrusted to their care and for the equities
                         in those assets--liabilities and capital.
                         This accounting for federal assets,
                         liabilities, and capital is called
                         "proprietary accounting." Proprietary
                         accounting is performed concurrently with
                         budgetary accounting. (Budgetary accounting
                         for appropriations and reimbursables is
                         discussed in chapters 2 and 6, respectively.)

                          Standards for proprietary accounting are set
                          forth in title 2, "Accounting Principles and
                          Standards," of GAO's Policy and Procedures
                         Manual for Guidance of Federal Agencies, and
                         the SGIL provides proprietary accounts in
                         numbering series other than 4000 (which is
                         used for budgetary accounts) and 9000 (which
                         is used for certain statistical information
                         accounts). This chapter discusses
                         proprietary accounting for transactions
                         relating to basic operating appropriations,
                         while chapter 7 discusses proprietary
                         accounting for reimbursable work performed
                         for other agencies. Chapter 4 provides a
                         comprehensive example illustrating concurrent
                         budgetary and proprietary accounting for
                         appropriations.



    DIFFERENCES          There are a number of distinctions between
    BETWEEN              budgetary and proprietary accounting which
    BUDGETARY AND        must be understood before exploring the
    PROPRIETARY          theory underlying proprietary accounting and
    ACCOUNTING           its relationship to budgetary accounting.
                         Some basic characteristics of each are
                         contrasted in the table on the next page.



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Table 3.1:   Summary of Key Differences Between Budgetary and
             Proprietary Accounting in Recognition of Events
             Which Constitute Transactions


Budgetary Accounting                   Proprietary Accounting

Entries are made for commitment        Entries are not made for
of funds in advance of preparing       commitments.
orders to procure goods and
services.
Entries are made for obligation        Entries are not made for
of funds at the time goods and         obligations.
services are ordered.

Entries are made to expend            Goods and services which
appropriations when goods             will last more than a
and services chargeable to            year and otherwise meet
the appropriation are received,       the criteria to qualify as
regardless of when they are           assets are capitalized and
used and regardless of when           expensed when consumed,
they are paid for.                    regardless of what
                                      appropriation funded them
                                      and when they are paid
                                      for.

 Entries are only made against         Goods and services con-
 an appropriation for trans-           sumed in the current
 actions funded by the                 period for which payment
 appropriation.                        is to be made from one
                                       or more subsequent
                                       appropriations is recogni-
                                       zed as an expense in the
                                       current period.

 Entries are not made against          Goods and services consum-
 an appropriation for trans-           ed in the current period
 actions not funded by the             but paid for in prior
 appropriation.                        periods are expensed in
                                       the current period.




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                     APPROPRIATIONS




    CONCEPTUAL                The nature of proprietary accounting for
    FRAMEWORK OF              a federal agency closely resembles that
    PROPRIETARY               of a private sector firm. As with the
    ACCOUNTING                private sector firm, assets equal liabilities
                              plus capital. However, "capital" in federal
                              accounting is called "Equity of the U.S.
                              Government." Therefore:



      Assets     =      Liabilities   +   Equity of the U.S. Government



                              Listed below are the asset and liability
                              accounts used in this chapter and provided by
                              the SGL.


      Account                                                     Normal
      Number                     Account Title                    Balance
       1010          Fund Balance With Treasury                     Dr.
       1510          Inventory for Agency Operations                Dr.
       1750          Equipment                                      Dr.
       1759          Accumulated Depreciation on Equipment          Cr.
       2110          Accounts Payable                               Cr.
       2120          Disbursements in Transit                       Cr.


                              As in commercial accounting, assets normally
                              have debit balances and liabilities have
                              credit balances.

                              Capital accounts warrant further discussion.
                              Just as each type of private firm--sole
                              proprietorship, partnership, cooperative, and
                              corporation--has different capital accounts,
                              so does the federal government. A list of
                              the capital accounts relating to operating
                              appropriations and reimbursable work
                              transactions covered by this publication
                              follows.


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                      1.   Appropriated Capital (SGL account 3100),
                           represents equity from an appropriation
                           authorized but for which goods and
                           services to be funded by the
                           appropriation have not been ordered or
                           received.
                      2.   Invested Capital (SGL "summary account"
                           3200), represents equity in the
                           followingr items purchased through
                           appropriated authority:
                           a.   supplies and materials inventory,
                           b.   property, plant, and equipment, net
                                of accumulated depreciation (fixed
                                assets), and
                           c.   certain long-term loans receivable.
                           SGL account 3210, "Capital Investments,"
                           represents the government's equity in
                           these items from acquisition by purchase
                           or construction using appropriation
                           authority, transactions for which are
                           illustrated in this publication. The
                           purpose of the account is to defer
                           recognition of the full appropriation as
                           a financing source until there are
                           related expenses for inventory used and
                           depreciation (discussed in this chapter)
                           or losses (which are beyond the scope of
                           this guide) against which to match the
                           appropriation used to acquire inventory
                           and fixed assets or make long-term loans.
                           The account is one of three provided by




                       An SGL summary account is one for which the
                      sum of designated sub-account balances is
                      used as the balance for the category
                      represented by the summary account. No
                      postings are made to summary accounts.


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                               the SGL which are summed to yield the
                               balance sheet category "Invested
                               Capital. "


                          3.   Results of Operations (SGL account 3300),
                               reports the balance in SGL account 3310,
                               "Cumulative Results of Operations."
                               Cumulative Results of Operations, roughly
                               equivalent to the Retained Earnings
                               Account for a commercial corporation,
                               summarizes:
                               a.   Financing sources, revenues, and
                                    gains, including appropriated capital
                                    used to fund agency operations for
                                    which goods and services have been
                                    received; earnings from provisions of
                                    goods and services to other agencies,
                                    on an accrual basis; and gains from
                                    the disposal of assets. The SGL
                                    provides financing source, revenue,
                                    and gain accounts in the 5000 and
                                    7100 series. The financing source
                                    account for expenses funded by
                                    appropriated capital is "Appropriated
                                    Capital Used," account 5700.
                                    Because increases in financing
                                    source, revenue, and gain accounts
                                    increase Equity of the U.S.
                                    Government, the accounts all normally
                                    have credit balances.
                               b.   Expenses and Losses, which
                                    represents consumption of goods and
                                    services on an accrual basis, and
                                    losses from the disposal of assets.
                                    The SGL provides for these accounts
                                    in its 6000 and 7200 numbering
                                    series. The SGL expense account
                                    pertinent to a basic operating
                                    appropriation we use is number
                                    6100, "Operating/Program Expenses."
                                    (Note that since the operating


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                               statement, equivalent to an income
                               statement in a commercial firm,
                               requires expenses to be disclosed
                               by nature of expense, a subsidiary
                               ledger or other means must be used
                               to capture data for and summarize
                               each individual expense. Account
                               6100 would be a controlling
                               account for such a subsidiary
                               ledger.)
                               Because expenses and losses
                               decrease Equity of the U. S.
                               Government, they normally have
                               debit balances.
                          c.   Net Results of Operations (SGL
                               account 3320)--an intermediate
                               account which summarizes categories
                               a and b, above. This account is
                               equivalent to the "Income and
                               Expense Summary" account in
                               commercial accounting systems in
                               which posting to ledger accounts is
                               performed manually. Just like the
                               commercial account, it would
                               normally have a zero balance during
                               the accounting period. During the
                               closing process, it would have a
                               changing debit or credit balance
                               depending on the order in which
                               closing entries were posted.
                               Though not necessary in an
                               automated system which has been
                               properly tested, we will use this
                               account in our illustrations.
                      Thus, the basic accounting equation for a
                      government agency becomes as follows (account
                      numbers mentioned in this section are placed
                      in the appropriate category for the accounts
                      they represent).




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    Figure 3.1:    Basic Accounting Equation Showing Detail of the
                   Capital Structure for a Federal Agency With an
                   Operating Appropriation



       ASSETS        LIABILITIES      +       EQUITY OF THE
                                             U.S. GOVERNMENT
        1010            2110
        1510            2120
        1750
        1759




      Appropriated               Invested             Results of
        Capital                 Capital               Operations
         3100                    3200                    3300


                                Capital               Cumulative
                               Investments            Results of
                                  3210                Operations
                                                         3310


                                                    Net Results of
                                                      Operations
                                                         3320




                  Financing Sources,                   Expenses and Losses
                 Revenues, and Gains
                                                        Operating/Program
               Appropriated Capital Used                     Expenses
                         5700                                  6100




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BASIC ENTRIES AND    Most proprietary accounting entries for
ILLUSTRATIONS        basic operating appropriations correspond
                     directly to entries for commercial
                     enterprises. There are, however, five
                     situations covered by this publication for
                     which entries are unique to the federal
                     government. These entries are discussed in
                     the following sections. They involve

                      1.    Receipt and return of appropriations,

                      2.    Consumption of appropriation authority,

                      3.    Expenditure of monies,

                      4.    Purchase of inventory and fixed assets
                            (property, plant, and equipment), and

                      5.    Use of inventory and depreciation of
                            fixed assets.

                     A final section discusses proprietary
                     accounting for undelivered orders received
                     after fiscal year-end.


1. Receipt and       The entry to record an agency's appropriation
Return of            is made upon receipt of an appropriation
Appropriation        warrant from. Treasury specifying that funds
                     are available. The entry is:

                      3-1    Fund Balance With Treasury
                                Appropriated Capital

                     The account "Fund Balance With Treasury" (SGL
                     account no. 1010) is an asset account
                     representing the future economic benefit of
                     monies which can be spent for authorized
                     transactions. For most agencies, the actual
                     cash involved is held and disbursed by
                     Treasury. Some agencies, such as the
                     Department of Defense, have their own direct




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                          disbursing authority. Disbursements are
                          discussed in section 3 of this chapter.


                          As discussed in chapter 2, budget authority
                          related to appropriations which are
                          unexpended and unobligated at fiscal year-end
                          normally expires. The related Fund Balance
                          With Treasury must be returned to Treasury.
                          The Fund Balance is not physically returned--
                          as it was always in the keeping of Treasury--
                          but rather is reported to Treasury as
                          returned via the report TFS 2108, "Year-End
                          Closing Statement," illustrated in chapters 4
                          and 8. Since the return is normally made
                          promptly after fiscal year-end, the entry to
                          record it is as shown below.
                                                (1)

                          3-2   To return unused Fund Balance With
                                Treasury at fiscal year-end:
                                Appropriated Capital
                                   Fund Balance With Treasury
                          Note that the entry reverses entry 3-1.


                                                (2)
                          If an agency was to prepare a balance sheet
                          before the return was reported to Treasury, a
                          liability could be accrued through this
                          entry:
                          3-3   To establish a liability to return funds
                                relating to expired appropriations:
                                Appropriated Capital
                                   Other Liabilities




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                     The SGL does not provide a specific liability
                     account, such as "Liability to Return Unused
                     Appropriation to Treasury," for the
                     transaction. We have used SGL account 2990,
                     "Other Liabilities," for the purpose.



                                            (3)

                      3-4   To return the unneeded funds to
                            Treasury:

                            Other Liabilities
                               Fund Balance With Treasury




2. Consumption       To the extent goods and services funded by
of Appropriation     an appropriation are consumed, the "revenue,"
Authority            against which the resulting expenses are
                     matched is from the appropriation. To
                     reflect this, an amount equal to expenses
                     funded by the appropriation is transferred
                     from the Appropriated Capital account to the
                     Cumulative Results of Operations account.
                     The transfer is made by way of the account
                     "Appropriated Capital Used," which appears on
                     the operating statement as a "financing
                     source." The required entries follow.

                                            (1)

                      3-5   To record appropriated capital used to
                            finance expenses:

                            Appropriated Capital
                               ApprDpriated Capital Used




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.   CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
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                                                     (2)

                          3-6   To close the Appropriated Capital Used
                                account:

                                Appropriated Capital Used
                                   Net Results of Operations



                                                     (3)

                          3-7   To close Net Results of Operations when
                                expenses exceed revenues:

                                Cumulative Results of Operations
                                   Net Results of Operations
                                             *   *    *    *   *


                                                     (4)

                          3-8   To close Net Results of Operations when
                                revenues exceed expenses:

                                Net Results of Operations
                                   Cumulative Results of Operations




    Illustration--        Assume that a new agency receives a $1,000
    Consumption of        appropriation and incurs expenses of $250.
    Appropriation         The entry to record the appropriation would
    Authority             be:

                          Fund Balance With Treasury               1,000
                             Appropriated Capital                      1,000



                          At this point, the basic accounting equation,
                          along with the appropriate accounts to be
                          used, would appear as follows.




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Assets             Liabilities +    Equity of the U.S. Government

Fund Balance         Accounts   +   Appropriated           +   Cumulative
With Treasury        Payable        Capital                    Results of
                                                               Operations
   $1,000               -0-            $1,000                     -0-

                      The entry to record the expenses incurred,
                      assuming all. were on account, is:
                      Operating/Program Expenses                    250
                         Accounts Payable                                 250
                                         *   *   **    *


                      If no additional entries were made, an
                      operating statement would show expenses of
                      $250 with no matching revenue, leaving a net
                      loss and a resulting deficit balance in
                      Cumulative Results of Operations after
                                                                                0
                      closing entries are made. However, from the
                      agency standpoint, there has been neither a
                      net income nor a net loss, because the
                      appropriation provided the means to fund the
                      expenses. Hence, the following additional
                      entry must be made to show the funding
                      source.
                      Appropriated Capital                          250
                         Appropriated Capital Used                        250


                      Closing entries would then be made as
                      follows.

                                                 (1)

                      3-6   To close the Appropriated Capital Used
                            account



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                              Appropriated Capital Used       250
                                 Net Results of Operations           250



                                              (2)

                      3-9     To close the Operating/Program Expenses
                              account:

                              Net Results of Operations        250
                                 Operating/Program Expenses          250



                     Note that, since expenses equal financing
                     source in our illustration, the balance of
                     the "Net Results of Operations" account is
                     zero.  If Net Results of Operations had other
                     than a zero balance, it would be closed to
                     Cumulative Results of Operations. In this
                     example, then, the account "Cumulative
                     Results of Operations" has not changed.

                     After the transactions and closing entries
                     have been posted, the basic accounting
                     equation would appear as follows.


 Assets        =   Liabilities     +   Equity of the U.S. Government

                                                          Cumulative
Fund Balance         Accounts          Appropriated       Results of
With Treasury        PayabLe       +   Capital        +   Operations


   $1,000              $250               $750                -0-


                     Note that the flow of capital is from
                     Appropriated Capital to Cumulative Results of
                     Operations. Later sections discussing
                     situations 4 and 5 illustrate the transfer of
                     amounts from one capital account to another
                     for certain more complicated transactions.



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                      Note also that not all expenses are funded by
                      appropriations for the year in which the
                      expense is incurred. For example, annual
                      leave expense for annual leave taken in a
                      certain appropriation year but earned in a
                      previous one is paid from the salary
                      appropriation of the year in which it is
                      taken, regardless of when the leave was
                      earned.
                      Additionally, care should be taken not to
                      confuse the funding of an expense with the
                      payment of monies. To the extent that monies
                      are paid to acquire fixed assets, for
                      example, there is no expense to be funded
                      (the assets are capitalized). It is only as
                      the assets acquired are depreciated that an
                      expense occurs and a matching funding source
                      is to be recorded. This is discussed in more
                      detail in parts 4 and 5 this section.

3. Expenditure        If an agency has its own disbursing
of Monies             authority, then cash disbursements are
                      accounted for in the same manner as in
                      commercial accounting, with the credit made
                      to "Fund Balance With Treasury." However,
                      Treasury or another authority disburses funds
                      for most agencies and requested disbursements
                      are accounted for as liabilities,
                      Disbursements in Transit (SGL account 2120),
                      until the requesting agency is notified that
                      disbursements have actually been made.
                      Hence, two entries are required in the
                      disbursement process.
                                                (1)

                      3-10   To request disbursements:
                             Assets, Expenses, Liabilities, etc.
                                Disbursements in Transit
                                        *   *   *   *   *




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                 APPROPRIATIONS



                                                (2)

                          3-11   To receive notice that disbursements
                                 have been made:
                                 Disbursements in Transit
                                    Fund Balance With Treasury


                          For purposes of simplifying our
                          illustrations, disbursement transactions in
                          all but chapters 4 and 8 will be recorded by
                          netting these two entries. The disbursement
                          entries; will be shown by the following.
                              Assets, Expenses, Liabilities, etc.
                                 Fund Balance With Treasury


                          Readers are asked to recall in each case that
                          two entries--entries 2-10 and 3-11--are
                          required in practice.




                          An alternate method used by some agencies is
                          2
                         to make the simplified "net" entry shown
                         following entry 3-11, above, at the time
                         disbursements are requested. Before
                         preparing financial statements, an adjusting
                         entry is made to reflect the amount of
                         disbursements in transit at the balance sheet
                         date. The entry follows.
                          3-18   Fund Balance With Treasury
                                    Disbursements in Transit


                         This entry would be reversed at the beginning
                         of the next accounting period.

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4. Purchase of       The basic entry for the purchase of inventory
Inventory and        and fixed assets (property, plant, and
Fixed Assets         equipment) is the same for the federal
                     government as for commercial enterprises. It
                     is set forth below, using generic account
                     names.  In an actual transaction, accounts
                     for the specific type of inventory and fixed
                     assets are used. The SGL provides
                     specific accounts in the 1500 and 1700
                     series.

                      3-12   Inventory
                             Fixed Assets
                                Accounts Payable (or other
                                appropriate account)
                                       *   *   *   *   *


                     However, because the inventory and fixed
                     assets are nct immediately consumed, the
                     government records its equity in the items as
                     "Capital Investments" and transfers an amount
                     from "Appropriated Capital" equal to the
                     purchase amount. The entry made is:

                      3-13   Appropriated Capital
                                Capital Investments



                     The effect of this on the basic accounting
                     equation is that the nature of the
                     government's equity changes from Appropriated
                     Capital, which provided the authority for the
                     purchase, to Capital Investments, which
                     represents the government's equity in
                     inventory andL net fixed assets.


Illustration--       Assume that, just prior to the purchase of
Purchase of          equipment, Fund Balance With Treasury was
Equipment            $1,000 and $100 of equipment was
                     subsequently purchased. Before the purchase,
                     the basic accounting equation (ignoring



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                            liabilities, which are not relevant to the
                            illustration) would appear as follows.


                                                      Equity of the
                   Assets                  =         U.S. Government


     Fund Balance                               Appropriated       Capital
     With Treasury    +     Equipmerit     =    Capital      +     Invest-
                                                                   ments

       $1,000                     -0-               $1,000           -0-


                            As discussed previously, the following two
                            entries would be required.

                                                     (1)

                                (a) To record the purchase:

                                   Equipment3                          100
                                      Fund Balance With Treasury             100

                                                    and

                                                     (2)

                                (b) To record the related transfer of equity:

                                   Appropriated Capital                100
                                      Capital Investments                    100




                            3This is less than the minimum capitalizable
                            amount provided in Title 2.  Small amounts
                            are used to simplify illustrations.


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                           After the entry to purchase the equipment,
                           Fund Balance With Treasury is reduced by $100
                           and Equipment is increased by $100, with the
                           following result.


                                                       Equity of the
              Assets                                  U.S. Government


Fund Balance                                  Appropriated          Capital
With Treasury          +   Equipment          Capital      +        Invest-
                                                                    ments

   $1,000                      0                 $1,000               -0-
       -100                  100
   $    900                 $100                 $1.000               -0-



                           Note that, without the second entry, the
                           equity of the government is shown as being
                           all in appropriated capital, suggesting that
                           the full amount is still available to fund
                           operations. Nothing is shown to represent
                           the government's equity in the equipment.
                           After the second entry is made, however, the
                           equation appears as follows:


                                                           Equity of the
              Assets                                      U.S. Government


Fund Balance                                   Appropriated          Capital
With Treasury          +   Equipment      =    Capital      +        Invest-
                                                                     ments

   $1,000                      0                      $1,000                0
     -100                   +100 <--(Entry 1)


                                       (Entry 2)-->       -100          +100
   $    900                 $-100                     $    900          $100




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                          The equation now shows that $100 of the
                          $1,000 in assets was converted from Fund
                          Balance With Treasury to Equipment.
                          Similarly, on the equity side, $100 was
                          converted from Appropriated Capital to
                          Capital Investments. The $900 remaining in
                          Appropriated Capital is the amount of the
                          appropriation still available to finance
                          operations.

                          The transfer of capital is shown on a
                          statement ok Changes in Equity of the U.S.
                          Government.   The capital account
                          transactions in this section are reported
                          there, as shown below.


                       Illustrative Federal Agency
         Statement of Changes it Equity of the U.S. Government
                  For (Accounting Period) Ended (Date)

                                        Appropriated     Invested
                                        Capital          Capital

     Beginning Balances                     $      0       $     0

     Receipt of Appropriation                   1,000

     Transfer of Capital (Related
     to Purchase of Equipment)                   (100)         100

     Ending Balance                         $    900       $100




                          4Though not required by GAO, OMB, or Treasury
                          at this time, the statement provides a useful
                          explanation of how capital (equity) changed
                          from the beginning to the end of the
                          accounting period. Hence, it is illustrated
                          in this chapter and in chapters 4 and 8.


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5. Use of             As inventory is used in agency operations, it
Inventory and         is charged to an expense account. Supplies
Consumption of        Inventory, for example, is charged to
Fixed Assets          Supplies Expense when used. Similarly,
                      consumption of depreciable fixed assets
                      results in a charge to depreciation.
                      In addition, as these assets are consumed,
                      Capital Investments, representing the
                      government's equity in purchased or
                      constructed inventory and net fixed assets,
                      correspondingly decreases. As discussed
                      previously, in section 2, to recognize and
                      properly report this, the equity related to
                      such consumption must be transferred to
                      "Appropriated Capital Used," a financing
                      source wiich is a component of "net
                      income." The related entries follow:
                                            (1)

                      3-14   To record use of inventory in agency
                             operations:
                             Operating/Program Expenses
                                Inventory




                      5Readers should be familiar with the term
                      "net income." They should note, however,
                      that, when accounting for appropriations and
                      reimbursables, the line item equivalent to
                      "net income" on the operating statement is
                      called "Excess of Financing Sources Over
                      Expenses." Correspondingly, a net loss would
                      be characterized as "Excess of Expenses Over
                      Financing Sources."

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                                                        (2)

                          3-15    To record depreciation on fixed assets:

                                  Operating/Program Expenses
                                     Accumulated Depreciation on Fixed
                                     Assets
                                            *   *   *   *     *


                                                        (3)

                          3-16    To record the transfer of capital from
                                  Invested Capital to Appropriated
                                  Capital by way of the Financing Sources
                                  Account:

                                  Capital Investments
                                     Appropriated Capital Used



                                                        (4)

                          To close the revenue and expense accounts:

                          3-17    Appropriated Capital Used
                                     Net Results of Operations

                                                        and

                          3-9    Net Results of Operations
                                    Operating/Program Expense

                          In addition, if Net Results of Operations has
                          a balance other than zero, entry 3-7 or
                          3-8, whichever is appropriate, is made to
                          close Net Results of Operations into
                          Cumulative Results of Operations.



                          Combining the discussion of transactions
                          under sections 4 and 5, we have two tracks,
                          or cycles, accounted for from the purchase



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                         through consumption (use) of inventory and
                         fixed assets. They are as follows.


             Appropriation          Purchase                    Use

 Track                            Inventory &        Expense for
   1         Cash      --->       Fixed Assets --- > Inventory Consumed
                                                     and Depreciation

                                  and, simultaneously,

 Track       Appro-               Invested                  Appropriated
    2        priated --- >        Capital         --- >     Capital Used
             Capital


Note that both the expenses for inventory consumed and
depreciation and Appropriated Capital Used will be closed into
Cumulative Results of Operations.


Illustration--           Assume that an agency purchases $100 of
Purchase and             equipment and $75 of inventory in year A, in
Consumption of           which an appropriation of $1,000 is received.
Inventory and            Assume further that depreciation on the
Equipment                equipment is $10 in each of Years A and B and
                         that $45 of the inventory is used in Year A
                         and the remaining $30 in Year B.  Journal
                         entries to record these transactions appear
                         below.

                         Year A
                                                      (1)

                         To record the appropriation:

                         3-1   Fund Balance With Treasury                  1,000
                                  Appropriated Capital                         1,000
                                             *   **    *    *




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                                                  (2)

                          To purchase equipment and inventory:

                          3-12   Equipment                       100
                                 Inventory for Agency
                                 Operations                       75
                                    Fund Balance with Treasury         175



                                                  (3)

                          To record the related transfer of capital:

                          3-13   Appropriated Capital            175
                                    Capital Investments                175



                                                  (4)

                          To make adjusting entries for depreciation
                          and inventory used:

                          3-14/ Operating/Program Expenses       55
                          3-15     Accumulated Depreciation
                                   on Equipment                         10
                                   Inventory for Agency Operations      45



                                                  (5)

                          To record transfer of capital:

                          3-16   Capital Investments              55
                                    Appropriated Capital Used           55




    Page 3-23             GAO Accounting Guide:            September 1990
                          Appropriations and Reimbursables
CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS



                                             (6)

                     To record the amount of Fund Balance With
                     Treasury related to expired appropriations to
                     be returned to Treasury:

                      3-2    Appropriated Capital             825
                                Fundt Balance With Treasury         825



                                             (7)

                     To make closing entries:

                      3-17   Appropriated Capital Used         55
                                Net. Results of Operations           55

                                             and

                      3-9    Net Results of Operations         55
                                Operating/Program Expenses           55   @



                     Based solely on these transactions, a trial
                     balance at the end of Year A appears as shown
                     on the next page.




Page 3-24            GAO Accounting Guide:         September 1990
                     Appropriations and Reimbursables
.   CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS




                       Illustrative Federal Agency
                  Trial Balance of Proprietary Accounts
                           September 30. Year A


     Account Name                               Dr. Bal.      Cr. Bal.

     Fund Balance With Treasury                    $     0
     Inventory for Agency Operations                    30
     Equipment                                         100
     Accumulated Depreciation on Equipment                      $ 10
     Capital Investments                                         120
     Appropriated Capital Used                                    55
     Operating/Program Expenses                         55

         Total                                     $185         $185



                          After closing, the trial balance looks like
                          this:


                        Illustrative Federal Agency
                        Post-Closing Trial Balance
                          of Proprietary Accounts
                            September 30. Year A

     Account Name                               Dr. Bal.      Cr. Bal.

     Fund Balance With Treasury                    $     0
     Inventory for Agency Operations                    30
     Equipment                                         100
     Accumulated Depreciation on Equipment                      $    10
     Capital Investments                                            120

         Total                                     $130         $130




    Page 3-25             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS



                      Year B

                                              (8)

                      To make adjusting entries at the end of Year
                      B:

                      3-15     Operating/Program Expenses     40
                                  Accumulated Depreciation
                                  on Equipment                     10
                                  Inventory for Agency Use         30

                                             and

                      3-16     Capital Investments            40
                                  Appropriated Capital Used        40



                                              (9)

                      To make closing entries at the end of Year B:

                     Appropriated Capital Used                40
                        Net Results of Operations                  40

                                             and

                      Net Results of Operations               40
                         Operatinq/Program Expenses                40



                     After closing, the trial balance at September
                     30, Year B, would look like this:




Page 3-26            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 3:    PROPRIETARY ACCOUNTING FOR BASIC OPERATING
                  APPROPRIATIONS




                        Illustrative Federal Agency
                        Post-Closing Trial Balance
                          of Proprietary Accounts
                           September 30, Year B


     Account Name                                 Dr. Bal.         Cr. Bal.

     Equipment                                      $100
     Accumulated Depreciation on Equipment                           $ 20
     Capital Investments                                               80

        Total                                       $100             $100



                            A comparative operating statement for the
                            years ended September 30, Years B and A,
                            based solely on the transactions presented in
                            this section, is presented below.


                          Illustrative Federal Agency
                              Operating Statement
                 For Years Ended September 30, Years B and A


                                                      Year B      Year A

     FINANCING SOURCES

     Appropriated Capital Used                             $40       $55


     OPERATING/PROGRAM EXPENSES,

     Depreciation Expense--Equipment                         10       10
     Inventory Consumed in Operations                        30       45

        Total Operating/Programr Expenses                    40       55

     Excess of Financing Sources Over Expenses             $_        $_




9   Page 3-27               GAO Accounting Guide:          September 1990
                            Appropriations and Reimbursables
CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS




UNDELIVERED ORDERS   As discussed in chapter 2, undelivered
FILLED AFTER          orders often exist at fiscal year-end. The
FISCAL YEAR-END       goods and services ordered are received
                     during the next fiscal year, or the related
                     orders may be canceled. Thus, one of four
                     situations involving the undelivered orders
                     may exist when the goods and services are
                     received:
                      1. The orders are canceled.
                      2. The orders are received in the same amount
                         as estimated.
                      3. The orders are received in an amount less
                         than estimated.
                      4. The orders are received in an amount
                         greater than estimated.
                     Chapter 2 discussed budgetary accounting for
                     these situations. This section discusses the
                     related proprietary accounting. Using the
                     same example as in chapter 2, assume that at
                     the end of a fiscal year, $10 of undelivered
                     orders remain on the books--$3 for expenses
                     and $7 for fixed assets. Thus, Fund Balance
                     With Treasury will have a debit balance of
                     $10 and Appropriations Used will have a
                     credit balance in that amount. Additionally,
                     the chapter 2 example provides that $11 in
                     unobligated, unexpended appropriations had
                     been returned to Treasury.

Situation 1--         If the orders are canceled, the monies held
The Orders Are        to fund them must be returned to Treasury,
Canceled              and this entry must be made:
                      3-2   Appropriated Capital            10
                               Fund Balance With Treasury        10




Page 3-28             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
    CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS



    Situation 2--         If the orders are received in the amount
    The Orders Are        estimated, they are accounted for in the
    Received in the       same nanner as any other undelivered orders
    Amount Estimated      received. The entry to pay for the order is
                          as shown below.
                          3-10/ Assets, Expenses,
                          3-11 Liabilities, Etc.                10
                                   Fund Balance With Treasury        10


                          In addition, this entry would be made to show
                          the use of Appropriated Capital for expenses:
                          3-5    Appropriated Capital            3
                                    Appropriated Capital Used        3


                          This entry would be made to show the transfer
                          of Appropriated Capital related to the Fixed
                          Assets:
                          3-13    Appropriated Capital           7
                                     Invested Capital                7



    Situation 3--         Assume that all orders are received, with $9
    The Orders Are        billed by vendors--$2 for expenses. The same
    Received in an        entries as for situation 2, above, would be
    Amount Less Than      made, but for a total of $9, as follows.
    Estimated
                          To pay for the goods and services:
                          3-10/ Assets, Expenses,
                          3-11 Liabilities, Etc.                 9
                                   Fund Balance With Treasury        9




O   Page 3-29             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS



                      To record use of Appropriated Capital for
                      expenses:

                      3-5    Appropriated Capital            2
                                Appropriated Capital Used         2



                      To record transfer of Appropriated Capital to
                      acquire fixed assets:

                      3-13   Appropriated Capital            7
                                Invested Capital                  7



                      In addition, the unneeded $1 would have to be
                      returned to Treasury, with this entry made:

                      3-2    Appropriated Capital            1
                                Fund Balance With Treasury        1

                      The return could first be accrued, using
                      entry 3-3, and then subsequently paid, using
                      entry 3-4, as discussed earlier in this
                      chapter.




Situation 4--         Assume that all orders were received, with
The Orders Are        vendors billing $12--$4 for expenses. Since
Received in an        the agency had previously returned more than
Amount Greater        $2 to Treasury, the additional $2 needed
Than Estimated        to pay for the goods and services can be
                      restored. The restoral would be recorded
                      with this entry:

                      3-1    Fund Balance With Treasury      2
                                Appropriated Capital              2

                      Then, the same entries as for situations 2
                      and 3, above, would be made, for $12. Those
                      entries are shown on the next page.




Page 3-30             GAO Accounting Guide:         September 1990    v
                      Appropriations and Reimbursables
.   CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
                 APPROPRIATIONS



                          To pay for the goods and services:

                          3-10/ Assets, Expenses,
                          3-11 Liabilities, Etc.                12
                                   Fund Balance With Treasury         12



                          To record use of Appropriated Capital for
                          expenses:

                          3-5    Appropriated Capital            4
                                    Appropriated Capital Used          4



                          To record transfer of Appropriated Capital to
                          acquire fixed assets:

                          3-13    Appropriated Capital           8
                                     Invested Capital                  8




    COMPREHENSIVE         A comprehensive example that illustrates both
    EXAMPLE IN            budgetary and proprietary accounting for
    CHAPTER 4             basic operating appropriations is presented
                          in chapter 4.




    Page 3-31             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 3:   PROPRIETARY ACCOUNTING FOR BASIC OPERATING
             APPROPRIATIONS




                  (This page intentionally blank.)                    0




Page 3-32             GAO Accounting Guide:          September 1990   i
                      Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION

INTRODUCTION          This chapter jointly applies the concepts of
                      budgetary and proprietary accounting for
                      appropriations, explained and illustrated
                      separately in chapters 2 and 3, to a series
                      of abbreviated routine transactions. The
                      transactions involve basic operating
                      appropriation activities for a new agency for
                      appropriation (fiscal) Year A. Additional
                      transactions in Year B related to Year A
                      appropriations are also illustrated. Closing
                      entries are made at the end of both Years A
                      and B.
                     Both budgetary and proprietary entries are
                     made at the general ledger level for each
                     transaction. SGL account numbers are shown
                     along with the account titles. Transactions
                     and entries are illustrated for the first
                     quarter of Year A separately, for the
                     remainder of Year A, and--for transactions
                     relating to Year A appropriations occurring
                     subsequent to Year A--for Year B. Because
                     the agency is new, it had no transactions
                     prior to Year A. The entries and related
                     subsidiary postings are made to four ledgers
                     illustrated in the appendix to this chapter:




Page 4-1             GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION

                      --   a general ledger of budgetary accounts;

                      --   a general ledger of proprietary accounts;

                      --   a subsidiary appropriations ledger to
                           support the general ledger of budgetary
                           accounts; and

                      --   a subsidiary expense ledger to support the
                           account "Operating/Program Expenses" in
                           the general ledger of proprietary
                           accounts.

                     Selected annual agency financial statements
                     required by title 2 of GAO's Policy and
                     Procedures Manual for Guidance of Federal
                     Agencies, by OMB, and by Treasury are
                     presented following the transactions.
                     Chapter 5 completes the reporting cycle by
                     explaining and illustrating required
                     reconciliations between budgetary and
                     proprietary accounting and by applying the
                     concepts involved to the comprehensive
                                                                        0
                     example in this chapter. Chapter 8 builds on
                     the example by including transactions related
                     to reimbursable work, accounting for which is
                     discussed in. chapters 6 and 7.



TRANSACTIONS--        1.    The agency received an appropriation
FIRST QUARTER,              warrant from Treasury in the amount of
FY A                        $100,000,000, notifying it that its
                            appropriation had been approved in that




                      1Two separate ledgers are maintained here to
                      simplify our illustrations. In practice,
                      agencies may have both budgetary and
                      proprietary accounts combined in a single
                      general ledger.

Page 4-2              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                 amount. The enabling law specified that
                                 $30,000,000 was for salaries and
                                 benefits, $20,000,000 for travel, and
                                 $50,000,000 for fixed assets, supplies,
                                 and services. The agency uses commitment
                                 accounting only for its fixed assets,
                                 supplies, and services. Travel, fixed
                                 assets, supplies, and services have
                                 undelivered orders placed in advance of
                                 expending the appropriation for them.
                                 Salaries and benefits do not have
                                 undelivered orders placed in advance of
                                 expending the appropriation for them.

                                                  (1)

                          Budgetary entry

                          4119    Other Appropriations
                                  Realized               100,000,000
                               4450 Authority Available for
                                     Apportionment           100,000,000



                                                  (2)

                          Proprietary entry

                          1010    Fund Balance With
                                  Treasury               100,000,000
                               3100 Appropriated Capital     100,000,000



                          2.     The Office of Management and Budget
                                 apportioned $31,000,000 for first quarter
                                 operations chargeable to the agency's
                                 appropriation.




    Page 4-3             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                              (1)

                      Budgetary entry

                      4450    Authority Available
                              for Apportionment         31,000,000
                           4510 Apportionment
                                 Available for
                                 Distribution                31,000,000



                                              (2)

                      Proprietary entry

                      None



                      3.     The agency head delegated allotment
                             authority to the Director of Accounting
                             and Finance, who approved allotments of
                             $30,000,000 for agency operations as
                             follows.

                      Salaries and. Benefits            $ 7,500,000
                      Travel                              4,500,000
                      Fixed Assets, Supplies,
                         and Services                    18,000,000

                                              (1)

                      Budgetary   entry

                      4510    Apportionment Available
                              for Distribution           30,000,000
                           4610  Allotments Available
                                 for Commitment/
                                 Obligation                  30,000,000




Page 4-4              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                                  (2)

                         Proprietary entry

                         None


                          4.     Commitments of $16,000,000 were made for
                                 fixed assets, supplies, and services
                                 chargeable to the appropriation.

                                                  (1)

                          Budgetary entry

                          4610    Allotments Available
                                  for Commitment/
                                  Obligation              16,000,000
                               4700 Commitments Available
                                     for Obligation           16,000,000



                                                  (2)

                          Proprietary entry

                          None



                          5.   Fixed Assets, Supplies, and Services
                               of $17,000,000 for basic operations
                               were ordered through the procurement
                               process. Of that amount, $16,000,000
                               was for commitments which had been
                               estimated at $15,750,000. The
                               remaining amount was for items for
                               which funds had not been previously
                               committed.




0   Page 4-5              GAO Accounting Guide:
                         Appropriations and Reimbursables
                                                           September 1990
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                              (1)

                      Budgetary entry

                      4610  Allotments Available for
                            Commitment/Obligation     1,250,000
                      4700 Commitments Available
                            for Obligation           15,750,000
                         4800 Undelivered Orders         17,000,000



                                              (2)

                      Proprietary entry

                      None



                      6.     Travel orders for $4,000,000 of travel to
                             be performed in the quarter were issued.

                                              (1)

                      Budgetary entry

                      4610    Allotments Available for
                              Commitment/Obligation      4,000,000
                           4800 Undelivered Orders           4,000,000



                                              (2)

                      Proprietary entry

                      None




Page 4-6              GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          7.   (a) $1,500,000 in checks for travel
                               advances were requested for employee
                               travel to be performed in the quarter.

                                                      (1)

                          Budgetary entry

                         None



                                                      (2)

                          Proprietary entry

                          1410 Advances to Others        1,500,000
                             2120 Disbursements in Transit   1,500,000



                          (b) The agency received the checks from
                              Treasury and issued them to the employees
                              involved.

                                                      (1)

                          Budgetary entry

                          None

                                                      (2)

                          Proprietary entry

                          2120 Disbursements in Transit 1,500,000
                             1010 Fund Balance With Treasury 1,500,000
                                              *   *   **    *




    Page 4-7             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      8.     Goods and services totalling $9,000,000
                             were received for $8,900,000 of the items
                             mentioned in transaction 5. They
                             consisted of

                      Equipment                             $3,000,000
                      Inventory for Agency Operations          750,000
                      Various Personal Services              5,250,000


                                              (1)

                      Budgetary entry

                      4610  Allotments Available for
                            Commitment/Obligation      100,000
                      4800 Undelivered Orders        8,900,000
                         4900 Expended Appropriations    9,000,000



                                              (2)

                      Proprietary entries

                      1750  Equipment                   3,000,000
                      1510  Inventory for
                            Agency Operations              750,000
                      6100 Operating/Program
                            Expenses                    5,250,000
                         2110 Accounts Payable              9,000,000

                                             and

                      3100 Appropriated Capital         9,000,000
                         5700 Appropriated Capital
                              Used                          5,250,000
                         3210 Capital Investments           3,750,000




Page 4-8              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables                   9
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          9.   (a) Checks for salaries and benefits were
                               ordered from the Treasury in the amount
                               of $7,400,000.

                                                    (1)
                          Budgetary entry

                          4610    Allotments Available for
                                  Commitment/Obligation    7,400,000
                               4900 Expended Appropriations    7,400,000
                                               *   **     *   *


                                                        (2)
                          Proprietary   entries2

                          6100    Operating/Program
                                  Expenses                 7,400,000
                               2120 Disbursements in Transit   7,400,000
                                                    and
                          3100 Appropriated Capital               7,400,000
                             5700 Appropriated Capital
                                  Used                               7,400,000




                          2Entries to record the establishment of
                          withholding liabilities for taxes and other
                          items are omitted to simplify the illustration.
                          Payroll transactions in this and subsequent
                          entries assume that all payroll liabilities are
                          paid simultaneously with issuance of employee
                          net pay.


    Page 4-9              GAO Accounting Guide:          September 1990
0                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      (b) Checks for salaries and benefits were
                          issued by the Treasury, which notified
                          the agency.

                                             (1)

                      Budgetary entry

                      None

                                             (2)

                      Proprietary entry

                      2120 Disbursements in Transit 7,400,000
                         1010 Fund Balance with Treasury 7,400,000



                      10.    (a) Travel vouchers totalling $3,900,000
                             were submitted. Of that amount,
                             $1,200,000 in advances was to be
                             applied. The amount obligated for this
                             travel had been $3,950,000.

                                             (1)

                      Budgetary   entry

                      4800 Undelivered Orders        3,950,000
                         4900 Expended Appropriations    3,900,000
                         4610 Allotments Available for
                              Commitment/Obligation         50,000



                                             (2)

                      Proprietary entries

                      6100     Operat:ing/Program
                               Expenses                3,900,000
                            1410 Advances to Others        1,200,000
                            2110 Accounts Payable          2,700,000


Page 4-10            GAO Account:ing Guide:         September 1990
                     Appropriations and Reimbursables
                                                                        0
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                              and

                          3100 Appropriated Capital       3,900,000
                             5700 Appropriated Capital
                                  Used                          3,900,000



                          (b) Checks were requested for the travel in
                              transaction 10(a).

                                               (1)

                          Budget-ary entry

                          None



                                               (2)

                          ProprLetary entry

                          2110 Accounts Payable          2,700,000
                             2120 Disbursements in Transit   2,700,000



                          (c) In addition, checks for $50,000 were
                              received from employees to liquidate
                              outstanding advances which were no
                              longer needed.

                                               (1)
                          Budgetary entry

                         None




    Page 4-11            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER:4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                  (2)

                      Proprietary entry

                      1110 Undeposited Collections              50,000
                         1410 Advances to Others                    50,000
                                          i   *    *    *   *


                      (d) The checks in transaction 10(c) were
                          taken to a federal reserve depository and
                          credited to the agency's appropriation.

                                                  (1)

                      Budgetary entry

                      None



                                                  (2)

                      Proprietary entry

                      1010 Fund Balance with Treasury           50,000
                         1110 Undeposited Collections               50,000



                      (e) The agency was notified that Treasury had
                          issued the checks requested in
                          transaction 10(b).

                                                  (1)
                      Budgetary entry

                      None
                                          *   *   *     *   *




Page 4-12             GAO Accounting Guide:          September 1990
                      Appropriaticns and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION


                                              (2)

                      Proprietary entry

                       2120 Disbursements in Transit 2,700,000
                          1010 Fund Balance with Treasury 2,700,000



                       11.    $8,500,000 in payments to vendors from
                              whom goods and services in transaction 8
                              had been received were requested from
                              Treasury.

                                              (1)

                       Budgetary entry

                       None



                                              (2)

                       Proprietary entry

                       2110 Accounts Payable          8,500,000
                          2120 Disbursements in Transit   8,500,000



                       12.    At the end of the quarter, the following
                              information was obtained.

                       (a) $400,000 of inventory for agency use had
                           been used during the quarter.




 Page 4-13            GAO Accounting Guide:          September 1990
0t                    Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                                                                         0
             APPROPRIATION


                                            (1)

                      Budgetary entry

                     None



                                            (2)

                      Proprietary entries

                      6100 Operating/Program Expenses   400,000
                         1510 Inventory for Agency
                              Operations                       400,000

                                            and

                      3210 Capital Investments          400,000
                         5700 Appropriated Capital
                              Used                             400,000



                      (b) Quarterly depreciation on the equipment
                          amounted to $150,000.

                                            (1)

                      Budgetary entry

                     None



                                            (2)

                      Proprietary entries

                      6100 Operating/Program Expenses 150,000
                         1759 Aczumulated Depreciation
                              on Equipment                150,000



Page 4-14            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                              and

                          3210 Capital Investments          150,000
                             5700 Appropriated Capital
                                  Used                          150,000



                          (c) The value of annual leave accrued but not
                              used was $75,000.

                                               (1)

                          Budgetary entry

                          None



                                               (2)

                          Proprietary entry

                          6100 Operating/Program Expenses   75,000
                             2220 Accrued Unfunded Annual Leave 75,000

                         (Note that, as this is not a funded expense,
                         there is no corresponding entry to
                         Appropriated Capital Used.)



                          (d) There were no accruals for payroll,
                              travel, or other purposes to be made at
                              the end of the quarter.




    Page 4-15            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION



 TRIAL BALANCES--     Trial balances for the general ledgers
 FIRST QUARTER,       maintained as of December 31, Fiscal Year A
 FY A                 (the end of the first quarter), follow. The
                      ledgers from which the figures were taken are
                      illustrated in the appendix to this chapter.


                     Illustrative Federal AQency
                 Trial Balance of Budgetary Accounts
                         December 31 of FY A
                        (Dollars in Thousands)


Account                                     Dr. Bal.      Cr. Bal.

Other Appropriations Realized               $100,000
Authority Available for Apportionment                     $ 69,000
Apportionment Available for
  Distribution                                                  1,000
Allotments Available for
  Commitment/Obligation                                         1,300
Commitments Available for Obligation                              250
Undelivered Orders                                              8,150
Expended Appropriations                                     20,300

  Total                                     $100,000      $100,000




 Page 4-16             GAO Accounting Guide:         September 1990
                       Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION



                    Illustrative Federal Agency
               Trial Balance of Proprietary Accounts
                        December 31 of FY A
                       (Dol].ars in Thousands)


Account                                   Dr. Bal.         Cr. Bal.

Fund Balance with Treasury                $   88,450
Advances to Others                               250
Inventory for Agency Operations                  350
Equipment                                      3,000
Accumulated Depreciation on. Equipment                      $        150
Disbursements in Transit                                           8,500
Accounts Payable                                                     500
Accrued Unfunded Annual Leave                                         75
Appropriated Capital                                              79,700
Capital Investments                                                3,200
Appropriated Capital Used                                         17,100
Operating/Program Expenses                    17,175            _10_22




       W                                  ~~~~~~~~
                                                225    ~   ~~$109
                                                            $109.225


                      Supporting schedules based on the two
                      subsidiary ledgers are set forth below. The
                      ledgers are illustrated in the appendix to
                      this chapter.




Page 4-17            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
 CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
               PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
               APPROPRIATION



                       Illustrative Federal Agency
             Schedule of Allotments. Commitments. Undelivered
                    Orders, and Expended Appropriations
                           December 31 of FY A
                          (Dollars in Thousands)


Object for                                          Undeliv-      Expended
Which Funds Were                                    ered          Appropri-
Appropriated           Allotments   Commitments     Orders        ations

Salaries & Benefits       $   100         $     0     $       0    $   7,400
Travel                        550               0            50        3,900
Fixed Assets,
  Materials, and
  Services                    650             250         8.100        9.000

   Total                  $1,300          $250        $8,150       $20,300

General Ledger
Control Account
Balances

Allotments Available
  for Commitment/
  Obligation            1,300
Commitments Available
  for Obligation                              250
Undelivered Orders                                        8,150
Expended Appropriations                                                20.300

  Unreconciled
  Difference              $     0     $         0     $       0    $       0




 Page 4-18              GAO Accounting Guide:          September 1990
                        Appropriations and Reimbursables
O   CHAPTER 4:   COMPREHENSIVE EKAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                         Illustrative Federal Agency
                  Schedule of OperatinQ/ProQram Expenses
                            December 31 of FY A
                           (Dollars in Thousands)


    Expense

    Depreciation Expense--Equipment                            $     150
    Payroll and Benefits                                           7,475
    Personal Services                                              5,250
    Supplies                                                         400
    Travel                                                         3.900

      Total                                                    $17,175

    Balance of General Ledger
    Control Account

O   Operating/Program Expenses                                 $17,175

      Unreconciled Difference                                  $      0




    TRANSACTIONS FOR      The following transactions are for the
    REMAINDER OF FY A     remainder of fiscal year A.

                          13.    OM:B apportioned the remaining $69
                                 million of the appropriation.

                                                 (1)

                          Budgetary entry

                          4450     Authority Available
                                   for Apportionment       69,000,000
                                4510 Apportionment Available
                                      for Distribution         69,000,000




    Page 4-19            GAO Accounting Guide:         September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                  (2)

                      Proprietary entry

                      None



                      14.    The agency Director of Accounting and
                             Finance allotted the $70 million
                             remaining to be distributed, including
                             the $1 nrillion not allotted during the
                             first quarter. The allotments were for
                             the following:

                      Salaries and Benefits                     $22,500,000
                      Travel                                     15,500,000
                      Fixed Assets, Supplies,
                      and Personal Services                      32,000,000

                                                  (1)

                      Budqetary entry

                      4510     Apportionment Available
                               for Distribution        70,000,000
                            4610 Allotments Available
                                  for Commitment/Obligation 70,000,000

                                          *   *   *     *   *


                                                  (2)

                      Proprietary entry

                      None




Page 4-20             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          15.    (a) Commitments were made for the
                                 following:

                          Equipment                           $12,000,000
                          Inventory for Agency Operations       2,500,000
                          Personal Services                    18,000,000

                                                  (1)

                          Budgetary entry

                          4610     Allotments Available for
                                   Commitment/Obligation    32,500,000
                                4700 Commitments Available
                                      for Obligation            32,500,000



                                                  (2)

*                         Proprietary entry

                          None



                          (b) Purchase orders for $32,700,000 were
                              issued for commitments previously made
                              totaling $32,600,000.

                                                  (1)

                          Budgetary entry

                          4610  Allotments Available for
                                Commitment/Obligation       100,000
                          4700 Commitments Available
                                for Obligation           32,600,000
                             4800 Undelivered Orders         32,700,000




    Page 4-21            GAO Accounting Guide:         September 1990
W                        Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                   (2)

                      Proprietary entry

                      None
                                          i,   *    *    *   *


                      16.    (a) Travel orders of $16 million were
                             issued.

                                                   (1)

                      Budgetary entry

                      4610     Allotments Available
                               for Commitment/
                               Obligation                        16,000,000
                            4800 Undelivered Orders                  16,000,000
                                          *    *    *    *   *


                                                   (2)

                      Proprietary entry

                      None



                      (b) Requests to Treasury for travel advances
                          to be made to employees totaled $5
                          million.

                                                   (1)

                      Budgetary entry

                      None




Page 4-22             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
O   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                                       (2)

                          Proprietary entry

                          1410 Advances to Others        5,000,000
                             2120 Disbursements in Transit   5,000,000



                          (c) Treasury issued the requested travel
                              advance checks.

                                                   (1)

                          Budgetary entry

                          None
                                              *   **         *   *


                                                       (2)

                          Proprietary entry

                          2120 Disbursements in Transit 5,000,000
                             1010 Fund Balance With Treasury 5,000,000



                          (d) Travel vouchers of $16,025,000 were
                              submitted and approved. Related travel
                              orders amounted to $16,000,000, and
                              $5,240,000 in advances were applied to
                              the travel.

                                                   (1)

                          Budgetarv entry

                          4610  Allotments Available
                                for Commitment/Obligation   25,000
                          4800 Undelivered Orders       16,000,000
                             4900 Expended Appropriations   16,025,000




    Page 4-23            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                 (2)

                     Proprietary entries

                      6100  Operat:ing/Program
                            Expenses                           16,025,000
                         1410 Advances to Others                    5,240,000
                         2110 Accounts Payable                     10,785,000

                                                 and

                      3100 Appropriated Capital                16,025,000
                         5700 Appropriated Capital
                              Used                                 16,025,000



                      (e) Checks for $5,000 in unused advances were
                          submitted by employees.

                     Budgetary entry

                     None



                                                 (2)

                     Proprietary entry

                      1110 Undeposited Collections                  5,000
                         1410 Advances to Others                        5,000



                      (f) The checks in transaction 16(e) were
                          deposited with the Federal Reserve.

                                                 (1)

                     Budgetary   entry

                     None
                                         *   *   *     *   *




Page 4-24            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                                          (2)

                          Proprietary entry

                          1010 Fund Balance With Treasury            5,000
                             ll:L0 Undeposited Collections               5,000



                          (g) Checks for payment to employees for
                              transactions in 16(d) were requested
                              from Treasury.

                                                          (1)

                          Budcet-ary entry

                          None



                                                          (2)

                          Proprietary     entry

                          2110 Accounts Payable         10,785,000
                             2120 Disbursements in Transit 10,785,000
                                                  *   *    *    **


                          (h) The agency received notice that Treasury
                              had disbursed the checks in transaction
                                 16 (g)

                                                          (1)

                          Budget:ary entry

                          None




    Page 4-25             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                              (2)

                      Proprietary entry

                      2120 Disbursements in Transit 10,785,000
                         1010 Fund Balance With
                              Treasury                  10,785,000



                      17.     (a) Checks for $22,580,000 were
                              requested for payroll and benefits
                              payments.

                                              (1)

                      Budgetary entry

                      4610     Allotments Available for
                               Commitment/Obligation    22,580,000
                            4900 Expended Appropriations    22,580,000



                                              (2)

                      Proprietary entries3

                      6100     Operating/Program
                               Expenses                22,580,000
                            2120 Disbursements in Transit 22,580,000

                                              and

                      3100 Appropriated Capital        22,580,000
                         5700 Appropriated Capital
                              Used                         22,580,000




                      3   See footnote 2 on p. 4-9.


Page 4-26             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          (b) The agency received notice that Treasury
                              had disbursed the checks in transaction
                              17(a).

                                                      (1)

                          Budgetary entry

                          None
                                              *   *    *    *   *


                                                      (2)

                          Proprietary entry

                          2120 Disbursements in Transit 22,580,000
                             1010 Fund Balance With
                                  Treasury                  22,580,000

0                                             * **          *   *

                          18.     (a) Goods and services were received
                                  from vendors as follows.

                                                                      Amount
                                                                    Previously
                          Items            Amount Billed            Obligated

                          Equipment           $12,000,000           $12,000,000
                          Supplies              2,500,000             2,500,000
                          Personal
                            Services          18,500,000             18,450,000

                                                      (1)

                          Budgetary entry

                          4800     Undelivered Orders      32,950,000
                          4610     Allotments Available
                                   for Commitment/Obligation   50,000
                                4900 Expended Appropriations   33,000,000




.   Page 4-27            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE: INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                  (2)

                      Proprietary entries

                      1750  Equipment                           12,000,000
                      1510  Inventory for Agency
                            Operations                          2,500,000
                      6100 Operating/Program
                            Expenses                            18,500,000
                         2110 Accounts Payable                      33,000,000

                                                  and

                      3100 Appropriated Capital                 33,000,000
                         3210 Capital Investments                   14,500,000
                         5700 Appropriated Capital
                              Used                                  18,500,000



                      (b) Checks requested from the Treasury
                          Department for payment of goods and
                          services received from vendors totaled
                          $33,475,000.

                                                  (1)

                      Budgetary   entry

                      None



                                                  (2)

                      Proprietary entry

                      2110 Accounts Payable         33,475,000
                         2120 Disbursements in Transit 33,475,000
                                          *   *    *    *   *




Page 4-28             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          (c) Received notice that Treasury issued
                              $40,000,000 of checks to vendors during
                              the last three quarters of the fiscal
                                year.

                                                       (1)

                          Budget.ary entry

                          None



                                                       (2)

                          Proprietary entry

                          2120 Disbursements in Transit 40,000,000
                             1010 Fund Balance With
                                  Treasury                  40,000,000

          t                                   ~~~~~~~~~*
                                                    *    *   *   *


                          19.    Information gathered at fiscal year-end
                                 included the following.

                          (a) An inventory of supplies on hand amounted
                              to $550,000.

                                                       (1)

                          Budgetary entry

                         None
                                               *   *    *    *   *




    Page 4-29            GAO Accounting Guide:          September 1990
0                        Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                              (2)

                      Proprietary entries,

                      6100  Operating/Program
                            Expenses                  2,300,000
                         1510 Inventory for Agency
                               Operations                 2,300,000

                                             and

                      3210 Capital Investments        2,300,000
                         5700 Appropriated Capital
                              Used                        2,300,000



                      (b) Depreciation on equipment amounted to
                          $800,000 for the last three quarters of
                          the fiscal year.

                                              (1)

                      Budgetary entry

                      None



                                              (2)

                      Proprietary entries

                      6100 Operating/Program Expense   800,000
                         1759 Accumulated Depreciation
                              on Equipment                 800,000

                                        and

                      3210 Capital Investments          800,000
                         5700 Appropriated Capital
                              Used                             800,000




Page 4-30             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          (c) Salaries and benefits amounting to
                              $19,000 had been earned but not yet paid.

                                                  (1)

                          Budgetary entry

                          4610  Allotments Available for
                                Commitment/Obligation        19,000
                             4900 Expended Appropriations        19,000



                                                  (2)

                          Proprietary entries

                          6100 Operating/Program Expenses    19,000
                             2210 Accrued Funded Payroll
                                  and Benefits                     19,000

*                                           and

                          3100 Appropriated Capital          19,000
                             5700 Appropriated Capital
                                  Used                             19,000



                          (d) There were no additional personal
                              services received but not yet recorded or
                              paid at fiscal year-end. Thus, no
                              accruals need to be made.

                          (e) Unpaid annual leave due employees at year
                              end amounted to $175,000.

                                                  (1)

                          Budgetary entry

                         None




    Page 4-31            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION


                                                    (2)

                       Proprietary entry

                       6100 OperatLng/Program Expense         100,000
                          2220 Accrued Unfunded
                               Annual Leave                         100,000

                      Note that $75,000 was recorded in transaction
                      12(c) (see p.. 4-15). This transaction
                      records the difference.

                                           *    *   **    *




ADJUSTED TRIAL         Trial balances for the general ledgers as of
BALANCES AND           September 30 of FY A (fiscal year-end)
SCHEDULES--END         follow. The ledgers are illustrated in
OF FY A                the appendix to this chapter.


                     Illustrative Federal Agency
                 Trial Balance of Budgetary Accounts
                         September 30 of FY A
                        (Dollars in Thousands)


Account                                        Dr. Bal.           Cr. Bal.

Other Appropriations Realized                  $100,000
Allotments Available for
 Commitment/Obligation                                        $       26
Commitments Available for Obligation                                 150
Undelivered Orders                                                 7,900
Expended Appropriations                        _91.924




 Totals                                        $100,000       $100,000




 Page 4-32             GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables                       0
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                         Illustrative Federal Agency
                   Trial Balance of Proprietary Accounts
                            September 30 of FY A
                           (Dollars in Thousands)


    Account                                  Dr. Bal.        Cr. Bal.

    Fund Balance With Treasury               $ 10,090
    Advances to Others                              5
    Inventory for Agency Operations               550
    Equipment                                  15,000
    Accumulated Depreciation on Equipment                    $      950
    Disbursements in Transit                                      1,975
    Accounts Payable                                                 25
    Accrued Funded Payroll and Benefits                              19
    Accrued Unfunded Annual Leave                                   175
    Appropriated Capital                                          8,076
    Capital Investments                                          14,600
    Appropriated Capital Used                                    77,324
    Operating/Program Expenses                 77,499

                                             $103 144        $103,144



                          Supporting schedules based on the two
                          subsidiary ledgers are shown below. The
                          ledgers are illustrated in the appendix to
                          this chapter.




    Page 4-33            GAO Accounting Guide:         September 1990
                         Appropriations and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION



                   Illustrative Federal Agency
      Schedule of Allotments, Commitments, Undelivered Orders,
                   and Expended Appropriations
                       September 30 of FY A
                      (Dollars in Thousands)


Object for Which                                Undeliv-       Expended
Funds Were                                      ered           Appro-
Appropriated         Allotments   Commitments   Orders         priations

Salaries and
  Benefits                 $ 1            $ 0         $    0     $29,999
Travel                      25              0             50      19,925
Fixed Assets,
  Materials, and
  Services                   0            150    7.850               42,000

    Totals                  26            150    7,900               91,924

General Ledger
Control Account
Balances

Allotments Available
  for Commitment/           26
  Obligation
Commitments Available
  for Obligation                          150
Undelivered Orders                                7,900
Expended Appropriations     _                                        91,924

  Unreconciled
  difference               $0         $     C     $        0     $        0




 Page 4-34             GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables                       W
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                        Illustrative Federal Agenec
                  Schedule of O eratinr/Program Expenses
                            September 30 of FY A
                           (Dollars in Thousands)


    Expense

    Depreciation Expense--Equipment                          $      950
    Payroll and Benefits                                         30,174
    Personal Services                                            23,750
    Supplies                                                      2,700
    Travel                                                       19,925

      Total                                                      77,499

    Balance of General Ledger
    Control Account

O   Operating/Program Expenses                                   77,499

      Unreconciled Difference                                $       0




    CLOSING ENTRIES,      Closing entries for the budgetary and
    FY A                  proprietary accounts are shown below.
                          Note that most transactions involve the
                          closing of only budgetary or only proprietary
                          accounts.

                          CL-1   To remove unobligated commitments from
                                 the accounts:  (budgetary entry only)

                          4700   Commitments Available for
                                 Obligation                 150,000
                             46110 Allotments Available
                                    for Commitment/Obligation   150,000




O   Page 4-35            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      CL-2   To remove unused allotment authority
                             from the accounts: (budgetary entry
                             only)
                      4610  Allotments Available for
                            Commitnent/Obligation              176,000
                         4510 Apportionment Available
                               for Distribution                   176,000



                      CL-3   To remove the apportionment authority
                             from the books: (budgetary entry only)

                      4510  Apportionment Available
                            for Distribution                   176,000
                         4450 Authority Available
                               for Apportionment                   176,000
                                         *   *    *    *   *


                      CL-4   To establish the account for budget
                             authority that must be returned to
                             Treasury:
                                                 (1)

                      Budgetary entry

                      4450  Authority Available
                            for Apportionment          176,000
                         4391 Restorations, Writeoffs,
                               and Withdrawals             176,000
                                         *   *    *    *   *




Page 4-36             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                                (2)

                          Proprietary entry

                          3100 Appropriated Capital         176,000
                             2990 Other Liabilities (To
                                  return Unused
                                  Appropriation to
                                  Treasury.)                       176,000



                          CL-5   To reduce the appropriation by the
                                 amount of budget authority returned
                                 to Treasury:

                                                (1)

                          Budgetary entry

                          4391  Appropriations Realized
                                but Withdrawn               176,000
                             4119 Other Appropriations
                                   Realized                        176,000



                                                (2)

                          Proprietary entry

                          2990  Other Liabilities (To
                                Return Unused Appropriation
                                to Treasury.)               176,000
                             1010 Fund Balance With Treasury    176,000




.   Page 4-37             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      CL-6   To remove expended appropriations from
                             the accounts:  (budgetary entry only)

                      4900 Expended Appropriations 91,924,000
                         4119 Other Appropriations
                              Realized                 91,924,000



                      CL-7   To close the revenue and expense
                             accounts: (proprietary entry only)

                      5700  Appropriated Capital
                            Used                    77,324,000
                      3320 Net Results of Operations   175,000
                         6100 Operating/Program
                               Expenses                 77,499,000



                      CL-8   To close Net Results of Operations:
                             (proprietary entry only)

                      3310  Cumulative Results of
                            Operations                  175,000
                         3320 Net: Results of Operations    175,000




PRE-CLOSING           The Pre-Closing Trial Balance required by
AND POST-CLOSING      the SGL for budgetary accounts (see pp.
TRIAL BALANCES,       2-23 and 2-24), is shown on the next page.
END OF FY A           It is compiled after closing entry 5 is made.




Page 4-38             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                        Illustrative Federal Agency
              Pre-Closing Trial Balance of Budgetary Accounts
                            September 30 of FY A
                           (Dollars in Thousands)


    Account                                      Dr. Bal.                 Cr. Bal.

    Appropriations Realized but Withdrawn         $         176
    Restorals, Writeoffs, and Withdrawals                             $          176
    Other Appropriations Realized                     99,824
    Undelivered Orders                                                         7,900
    Expended Appropriations                                                   91,924

      Total                                      $100,000             $100,000



                          The Post-Closing Trial Balance of budgetary
                          accounts is shown below.


                             Illustrative Agency
              Post-Closing Trial Balance of Budgetary Accounts
                             September 30 of FY A
                            (Dollars in Thousands)


    Account                                  Dr. Bal.                 Cr. Bal.

    Appropriations Realized but Withdrawn    $        176
    Restorals, Writeoffs, and Withdrawals                                 $     176

    Other Appropriations Realized                7,900
    Undelivered Orders                                                        7,900

      Total                                  $8 076                       $8,076



                          The Post-Closing Trial Balance of proprietary
                          accounts (made after closing entry 5) follows.


     Page 4-39            GAO Accounting Guide:                   September 1990
0                         Appropriations and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION



                      Illustrative Federal Agency
          Post-Closing Trial Balance of Proprietary Accounts
                           September 30 of FY A
                          (Dollars in Thousands)


Account                                    Dr. Bal.      Cr. Bal.

Fund Balance With Treasury                  $ 9,914
Advances to Others                                5
Inventory for Agency Operations                 550
Equipment                                    15,000
Accumulated Depreciation on Equipment                      $      950
Disbursements in Transit                                        1,975
Accounts Payable                                                   25
Accrued Funded Payroll and Benefits                                19
Accrued Unfunded Annual Leave                                     175
Appropriated Capital                                            7,900
Capital Investments                                            14,600
Cumulative Results of Operations                 175
                                            $5$25,644




 Page 4-40             GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



    GENERAL PURPOSE       The financial statements iLlustrated in this
    FINANCIAL             section meet GAO standards and would be
    STATEMENTS MEETING    appropriate foF inclusion in an agency's
    GAO STANDARDS         annual report.   The statement of changes in
                          government equity, while not required under
                          those standards, is useful to explain how
                          Equity of the U.S. Government changed from
                          the beginning to the end of the accounting
                          period. The financial statements include

                          --   an operating statement,

                          --   a statement of changes in government
                               equity,
                          --   a balance sheet, 6and

                          --   a statement of changes in financial
                               position prepared on a cash basis
                               (essentially the same as a "cash flow
                               statement").




                           Title 2, appendix I, Standard F-20.
                          5The statements illustrated are prepared in the
                          most basic manner consistent with Title 2
                          requirements. In practice, agencies may
                          further classify items appearing on them if
                          useful for management purposes. For example,
                          instead of a single category of "Expenses" on
                          the operating statement, agencies may wish to
                          further classify expenses as funded and
                          unfunded.

                          6The Balance Sheet is sometimes referred to as
                          the "statement of financial position."

    Page 4-41             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION


                       An additional statement required by title 2,
                       "Reconciliat:Lon of Expended Appropriations
                       with Net Results of Operations" is discussed
                       and illustral:ed in chapter 5.  The
                       statements, which begin below, are based on
                       transactions recorded in this chapter for our
                       illustrative federal agency.


                     Illustrative Federal Agency
                         Operating Statement
                  for Year Ended Sepitember 30 of FY A
                        (Dollars in Thousands)


Financing Sources

  Appropriated Capital Used                              $77,324

Expenses

 Depreciation on Equipment             $      950
 Payroll and Benefits                      30,174
 Personal Services                         23,750
 Supplies                                   2,700
 Travel                                    19,925

      Total                                              $77,499

Excess of Expenses Over Financing Sources                $   (175)a



aNote that this is the amount of unfunded expense related to the
 annual leave liability.




 Page 4-42             GAO Accounting Guide:         September 1990
                       Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                         Illustrative Federal Agency
                  Statement of Changes in Government Equity
                     for Year Ended September 30 of FY A
                            (Dollars in Thousands)

                                                                   Cumulative
                        Appropriated          Capital              Results of
                        Capital               Investments          Operations        Total

    Balance, October 1
      of Fiscal Year A     $         0          $         0          $      0    $         0
    Appropriation              100,000                                               100,000
    Purchase of
      Equipment
      and Inventory            (18,250)a            18,250
    Financing Sources
      for Depreciation                                         b
      and Inventory Used                             (3,650)                          (3,650)
    Financing Sources                     c
      for Other Expenses       (73,674)                                              (73,674)
    Excess of Expenses
      Over Financing
      Sources                                                            (175)          (175)
    Return of Expired
      Appropriation               (176)          _        _(176)




    Balance, Septem-
      ber of Fiscal
      Year A               $_7,900              $14,600              $(175)      $   22,325


     Equipment, $15,000, + Inventory, $3,250.

    bDepreciation, $950, + Supplies Used, $2,700.

    cAppropriated Capital Used, $77,324, -           (Depreciation Expense,
     $950, + Supplies Used, $2,700).




    Page 4-43              GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
 CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
               PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
               APPROPRIATION



                      Illustrative Federal Agency
                             Balance Sheet
                     September 30 of Fiscal Year A
                         (Dollars in Thousands)


ASSETS

Fund Balance With Treasury                              $ 9,914
Advances to Others                                            5
Inventory for Agency Operations                             550
Equipment:
  Cost                                      $15,000
  Less Accumulated Depreciation                (950)     14.050

Total Assets                                            $24,519


LIABILITIES AND EQUITY

Liabilities

Disbursements in Transit                    $ 1,975
Accounts Payable                                 25
Accrued Funded Payroll                           19
Accrued Unfunded Annual Leave                   175
  Total Liabilities                                     $ 2,194

Equity of the U.S. Government

Appropriated Capital                          7,900
Capital Investments                          14,600
Cumulative Results of Operations               (175)
  Total Equity of the U. S. Government                   22.325

Total Liabilities and Equity                            $24,519




 Page 4-44              GAO Accounting Guide:          September 1990
                        Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION



                         Illustrative Federal Aqency
                 Statement of Changes in Financial Position
                      For Year Ended September 30. FY A
                            (Dollars in Thousands)


    Fund Balance Provided by Operations

    Excess of Expenses over Financing Sources      ($      175)
    Components not requiring Cash:
       Depreciation Expense                               950
       Supplies Used                                    2,700
       Salaries and Benefits Expense related
          to Annual Leave                                 175
       Increase in Advances to Others                      (5)
       Increase in Disbursements in Transit             1,975
       Increase in Accounts Payable                        25
       Increase in Funded Payroll Liability                19     $5,664


.   Fund Balance Provided by Financing

    Appropriated Capital:
       Used for Investments                             14,600
       Held for Undelivered Orders                       7,900
       Related to Appropriation not Obligated              176
       Related to Appropriation Returned to
         Treasury                                         (176)   22,500

    Fund Balance Used for Investments

       Purchase of Inventory                             3,250
       Purchase of Equipment                            15,000    (18,250)

    Increase in Fund Balance With Treasury                          9,914
    Beginning Fund Balance With Treasury                                0
    Ending Fund Balance With Treasury                             $ 9,914




    Page 4-45             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION



FINANCIAL              OMB and Treasury regulations require that
STATEMENTS             agencies prepare and submit several financial
REQUIRED BY            statements. One of the principal statements
OMB AND                required by OMB is the SF 133, "Report on
TREASURY               Budget Execution." Selected key reports
                       required by Treasury include those shown
                       below.

                       SF   220   Report   on   Financial Position
                       SF   221   Report   on   Operations
                       SF   222   Report   on   Cash Flow
                       SF   223   Report   on   Reconciliation [of
                                  operating expenses to net
                                  disbursements]
                       TFS 2108   Year-end Closing Statement

                       These statements are illustrated on the
                       following pages, based on transactions
                       recorded for our illustrative federal agency.
                       Information on the source of certain figures
                       entered on the statements is set forth
                       beginning on p. 4-56. The first three
                       statements are essentially the same as those
                       statements illustrated in the previous
                       section, differing only in the composition of
                       line items.




Page 4-46              GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables
    STA-.DAaR   'F aISS                                                                                     Sheet --- I--- of ..   I..
    circularNgo.ene
              A     t3nd udget                   REPORT ON BUDGET EXECUTION                                 Period ended: SePt-. 30 of FY   A

    A~s~sCr                                                                      APPROPRIATION 0tFUND TITLE AND SYMBOL

.   B
        Illustrative Federal Agency
            UCREA
                                                                                   Salaries and Expenses
                                                                                   99A    9999

                                                                                 Unexpired
                                   DESCRIPTION                                   Accounts
                          BUDGETARY RESOURCES                                            (Dollar s in thousands)
        L Budget authority:
                A. Appropriations realized P L -00,-----
                                                   xx-xx                 _000
                B. Appropriations anticipated (indefinite)-____________
                                                                 -
                C. Other new authority (
                D. Net transfers (+ or-) _------------     -------------
        2. Unobligated balance:
               A. Brought forward October 1            ____..--------
               B. -Net transfers (+ or -)..            ____.._____________
        3. Reimbursements and other income:
               A. Earned--------------------($)
                B. Change In unfilled customers' orders (+ or -) ____
               C. Anticipated for rest of year     _____-__-_-____-__
        4. Recoveries of prior year obUgatious:
                .4 Actual-       - ----     -----                        )
                B. Anticipated for rest of year ___________-_-____-__-_
        5. Portion not available pursuant to P.T.                    (-_
        8. Restorations (+) and writeoffs (-)_(S

     T. TOTAL BrDGETABY RESoURCES ------------------ ___________      100,000


.              STATUS OF BUDGETARY RESOURCES
     S. ObLigations incurred
     9. Unobligated balances available:
                                                                    )  99,824

            .- Apportioned, category A -      -_      ..- -----------
                                                      ____________         176
           B. Apportioned, category B _______________-_____________
            C. Other balances available_______________.__-__________
    10. UnobLigated balances not available:
           A. Apportioned for subsequent periods_         ___________
           B. Withheld pending rescission'__________.._________-___
            C. Deferred' _________________--___--__--_______-__
           D. Unapportioned balance of revolving fund'"_------------
           E. Other balances not available     ____-__-._-__-__-___

    11.   TOTAL BrDGLrTARY RESOURCES ---------------------------------       _     100,000

            RELATION OF OBLIGATIONS TO OUTLAYS
                  AND ACCRUED EXPENDITURES,
    12. Obligations incurred, net (8-3A-3B-4A)-     ------------------  99,824
    13. Net unpaid obligations:
            A. Obligated balance, as of October 1-0
                                                  ------------------- _
            B. Obligated balance transferred, net (+ or -) ---------         0
            C. Obligated balance, end of period -___-__-__-____-_____9, 9 14

    14. OnUtays (12+13A+13B-13C)-       _   (S                       )              89,910
    15. Change in accounts payable, net:
           A. Accounts payable, net, as of October 1 -----------------                     0
            B. Accounts payable transferred, net (+ or -) ---------                        0
           C Accounts payable, net, end of period      .__-___---------              2,014

    16. Accrued expenditures (14-15A-15B+15C) (5                         )          91,924
          'From SF. 132

                                                                                                  /S /
     4-47                                                                                  (Authorhsed officer)                    (Date)
Standard Form 220                                                                                                                          Page 1 of 3
November 1988                                                        REPORT ON FINANCIAL POSITION                                  IAR No. 1178-TD-XX
I TFM 2-4100                                                         as of Sept. :30 of FY A
                                                                          (Dollars in thousands)

IDENTIFICATIONI
DEPARTMENT/AGENCY:   Illustrative Federal Agency
BUREAU/ORGANIZATIONAL UNIT:                                                                                                _
OMB IDENTIFICATION CODE:                                                                                              FUND TYPE:           5
                                                                                                                                         Total
 Assets                                                                                                           Amount             current period
 1.   Fund balance with Treasury and cash (SF 220-1)
      a. Fund balance(s) ....                                                                         9,9 14
      b. Cash                       _
                        _ .... .......                 ..      _
      c. Foreign currency, net                            .....
      d. Subtotal                _............. _            ..........
                                                                 .                                                                         9, 9 14
 2.   Accounts receivable (SF 220-9)
      a. Federal agencies
           1. Current _.              . ...           .... _.
          2. Noncurrent        . ......                                 ......
      b. Public
           1. Current               ................                       . ...
          2. Noncurrent      .....                             ...       .
      c. Less: Allowances .................... .................. ........
      d. Subtotal ......_ _. ..
 3.   Advances and prepayments
      a. Federal agencies _..         ....................
      b. Public                                                                                               5......
      c. Subtotal ._._.._......._                                .               .........                                                       5.
 4.   Inventories (SF 220-1)                                                                                                                          Il
      a. Operating consumables               ---- --- --.--------
      b. Product or service components . ........                                       _..._._._............

      c. Stockpiled materials            .._................       ..... _..
      d. Other 1.                           _
          2.                          _
          3.                          _
          4.                         ___
      e. Subtotal                                                                                                                              550
 5.   Investments, net (SF 220-1)
      a. Federal securities        ....           _.
      b. Non-Federal securities ......
      c. Other 1.
            2.         _   _   _   _   _   _   ___   _   _   _   _   _   _   _   _   _   _   _       _   __   _


          3.                                                     _
          4.                                                     _
      d. Subtotal
 6.   Loans receivable (SF 220-8. SF 220-9)
      a. Federal agencies
          1. Current .        . .......... .... .......
          2. Noncurrent
      b. Public
          1. Current
          2. Noncurrent
      c. Less: Allowances                             .                                          -


      d. Subtotal
Previous edition not usable
                                                                         AUTHORIZED FOR L.OCAL REPRODUCTION

  4-48                                                                                       (2-4100- 14)
    Standard Form 220                                                                                                  Page 2 of 3
    November 1988
                                             REPORT ON FINANCIAL POSITION
                                            as of Sept. 30 of FY A
                                              (Dollars in thousands)

    BUREAUIORGANIZATIONAL                 UNIT:   Illustrative      Federal Agency
                                                                                                               Total
     Assets-Continued                                                         Amount                       current period
     7.   Property, plant and equipment. net (SF 220-1)
          a. Structures. facilities and leasehold improvements
          b. Military equipment
          c. ADP software
          d. Equipment       -.                                                    15, 000
          e. Assets under capital lease       _._
          f. Other 1.

               3.
               4.
          g.   Construction-in-progress
          h.   Land__                                                 _   _    _    _   _    _   _   _


          i.  Allowances .for.Dereciation                                            (950)
          j. Subtotal                                            ......                                                ,050_.. x __.............
     8.   Other assets

          b.
          c.
*        d.
         e. Subtotal
     9. Total assets                                                                                               24,519
     Liabilities
     10. Accounts payable
         a. Federal agencies
         b. Public                                                                 2,000
         c. Subtotal                                                                                               2,000
     11. Interest payable
         a. Federal agencies
         b. Public
         c. Subtotal
     12. Accrued payroll and benefits .9
     13. Accrued unfunded annual leave                                                                                  175
     14. Unearned revenue (advances)
         a. Federal agencies
         b. Public
         c. Subtotal            .._ .............
     15. Deposit funds
     16. Debt issued under borrowing authority (SF 220-1)
         a. Gross Federal debt
         b. Intragovernmental debt           -
         c. Other debt
         d. Subtotal                .__                                                                  _ _   _   _    _   _   _ _   _

     17. Actuarial liabilities (SF 220-1)
         a. Pension plans
         b. Insurance and annuity programs
         c. Subtotal                                                                                                   _




     4-49                                            (2-4100-15)
Standard Form 220                                                                                                       Page 3 of 3
November 1988
                                              REPORT ON FINANCIAL POSITION
                                          as of Sept. 30 of FY A
                                            (DollaFrsin thousands)

BUREAU/ORGANIZATIONAL                  UNIT:          Illustrative Federal Agency
                                                                                     _                     |       ~~~~~~~Total
Liabilities -Continued                                _                                                        c             riod
 18. Other liabilities
     a.
     b. __________________________                                                                                                  l___

     d.
     e. Subtotal                .     ...         ....................-.-....
 19. Total liabilities .      ...........
Equity
AporoDriated fund equity
20. Unexpended financed budget authority
    a. Unexpended appropriations         .     .................                I
    b. Less: Unfilled customer orderslFederal)
    c. Subtotal     ............................                                                                      7,900
21. Invested capital.....                                                                                            14,600
      Cumulative Results of Operation                                                                                   (175)
Revolving fund equity
22. Revolving fund balance(s)
    a. Appropriated capital
    b. Cumulative results
    c. Donations ....._.._.
                      ._                                       ....... ....._
    d. Subtotal     .....     _        _......
                                          .....

Trust fund equity
23. Trust fund balance(s)
24. Total equity                                                                                                    22.__5
25. Total liabilities and equity          .        ..........




                                                            AGENCY CONTACTS

1. Preparer's Name                                                                       12.   Telephone No.


a   Address



4. Supervisor's Name                                                                      5. Telephone No.




    4 50                                                               (2-4100-16)
Standard Form 221                                                                                                Page 1 of 2
November 1988                                                                                            IAR No. 1180-TD-AN
I TFM 2-4100                                       REPORT ON OPERATIONS
                           for the period ended Sept. 30 of FY A
                                              (Dollars in thousands)

IDENTIFICATION:
DEPARTMENT/AGENCY:                     Illustrative Federal Agency
BUREAU/ORGANIZATIONAL UNIT:
OMB IDENTIFICATION CODE:                                                       _            FUND TYPE:                       5
BASIS USED:          Accrual
 FINANCING SOURCES                                                                 Amount                   Total
 1. Accredxenfture5s Expended Approp                                                                        91,924
 2. Revenue
    a. Federal sources
    b. Public sources
    c. Subtotal
 3. Governmental receipts
 4. Other a. Appropriations Used For:
    b. - Depreciation                                                                950
    c    -Supplies Consumed                                                        2,700
    d.
    e. Subtotal    ..........                  .    .. ._.....                                               365.
 5. Less: Receipts returned to Treasury ...
 6. Total financing sources                                                                                         7....4
 OPERATING EXPENSES
 7. Cost of goods sold                 .
 8. Operating/program expenses. funded                                                                      73,674
 9. Interest expense, funded
    a. Federal Financing Bank/
         Treasury borrowings                                     _
    b.   Federal securities         .....                             __
    c.   Other 1.               _
         2.
         3.
        4.
     d. Subtotal
 10. Other, funded expenses
    a.
    b.
    c.
    d.
    e. Subtotal                                                            .                      ___________73,6_74


Previous edition not usable

                                            AUTHORIZED FOR LOCAL REPRODUCTION




   4-51                                                              (2-4100-491
Standard Form 221                                                                                Page 2 of 2
November 1988

                                      REPORT ON OPERATIONS
                         for the period ended _Sept. 30 of FY A
                                    (Dollars in thousands)

BUREAU/ORGANIZATIONAL UNIT:                   Illustrative Federal Agency

 OPERATING EXPENSES-Continued                                Amount                      Total
 I1. Unfunded expenses                                                                     3,825
 12. Total operating expenses .        ......... ...... n                                 77,499
 NET RESULTS
 13.   Net results before adjustments                                                     18,075
 14.   Less: Capital expenditures (all funds
       refer to the instructions) ......... .8,25.
 15.   Less: Extraordinary items ...........
 16.   Net results                .-                                                        (175)



                                             AGENCY CONTACTS

 1. Preparer's Name                                                   2. Telephone No.


 3. Address



 4. Supervisor's Name                                                 5. Telephone No.




                                                     12-4I00-50)
4-52
Standard Form 222                                                                                                             Page 1 of 1
November 1988                                                                                                        IAR No. 0341-TD-AN
I TFM 2-4100                                                 REPORT ON CASH FLOW
                                     for the period ended             Sept. 30 of FY A
                                                           (Dollars in thousands)

IDENTIFICATION
DEPARTMENT/AGENCY:                               Illustrative                  Federal Agency
BUREAU/ORGANIZATIONAL UNIT:                                      _-
OMB IDENTIFICATION CODE:                                                                              FUND TYPE:                  5

                         Description                                                  Amount                                  Total

 1. Fund balance with Treasury and cash.
    beginning of period (PY SF 220) ..............                                                                                0
 2. Sources of funds:
    a. Increase in debt     ......
    b. Appropriations .....   ...............                                                  000
      c.    Revenue        ............... ............
      d. Sale of assets ..........
      e.    Increase in payables                       ...........                          2,019
      f.    Decrease in receivables and advances....-                                           (5)
      g.    Other 1.                        _
            2.                         _
         3.                                                              _
         4.                         _
      h. Total         ...............................                                                                      102,014
 3. Application of funds:
      a.    Operating expenses (SF 221) ........_...........                         -     7 77,499
      b. Less: Expenses not requiring outlays                                              (3,825)
             (SF 221)       .........     .......................
      c. Increase in investments -..... ......................
      d. Increase in inventory .            ............                                    3,250
      e. Purchase of property, plant and
                 equipment ..... .         .............             -                     15,000
      f.    Other 1 Return of unobligated                                                      176
            2. Approp. to Treasury
            3.                         _
            4.
      g.    Total   ..............                           .92,100
 4. Fund balance with Treasury and cash,
      end of period (SF 220) .                        ........                                                                    4




                                                                 AGENCY CONTACTS
 1. Preparer's Name                                                                                   12.   Telephone No.


 I    Address



 4. Supervisor's Name                                                                                 5. Telephone No.


Previous edition not usable                         AUTHORIZED FOR LOCAL REPRODUCTION

                                                                             (2-4100-54)
     4-53
Standard Form 223                                                                                                Page 1 of 1
November 1988                                                                                            IAR No. 0342-TD-AN
I TFM 2-4100                           REPORT ON RECONCILIATION
                          for the period ended         Sept. 30 of FY A
                                        (Dollars in thousands)

IDENTIFICATION:
DEPARTMENT/AGENCY:   Illustrative Federal Agency
BUREAU/ORGANIZATIONAL UNIT:
OMB IDENTIFICATION CODE:                         FUND TYPE:                                                                       5

                                  Description                                                                      Total


 1. Total operating expenses (SF 221)                         .....                  .........                      77,4 99

2. Adjustments:

    Add:
    a. Capital expenditures    ___.....................               ....... ...............                         18,250

    Deduct:
    b. Increase (decrease) in accounts payable ...              .........................                               2,014

    c. Decrease (increase) in inventories                                               ..........                      2,700

    d. Accrued expenses not requiring outlays .............                                                              1,125

3. Subtotal                                                   . .__
                                                                 ... ...                                        __
                                                                                                                 __....._._____

4. Less: Offsetting collections credited     .. _....._..__..._....._..

5. Net disbursements                              .    ..                        .............. .                    89,_9_10_.




                                              AGENCY CONTACTS

 1. Preparer's Name                                                                   2. Telephone No.


3. Address



4. Supervisor's Name                                                               I5.          Telephone No.


Previous edition not usable

                                     AUTHORIZED FOR LOCAL REPRODUCTION




                                                   (2-4100-58)
   4-54
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                          4-55
CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND          0
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION



Sources of            Although the SGL provides a crosswalk to use
Selected              in preparing the OMB and Treasury statements
Figures on            illustrated above, this section indicates the
Statements            sources of the figures and the nature of the
                      computations and listings involved to further
                      assist the reader's understanding of the
                      preparation of the statements. All amounts
                      are in thousands of dollars.



SF 133, Report on
Budget Execution

 Line   8             Expended Appropriations, $91,924 +
                      Undelivered Orders, $7,900.

        9             Restorations, Writeoffs, and Withdrawals,
                      representing unobligated appropriations which
                      must be returned to Treasury at year-end.

                      Note that the section Status of Budgetary
                      Resources summarizes the accounts for the
                      $100 million appropriation in the following
                      manner:

                       Expended Appropriations              $91,924
                       Undelivered Orders                     7.900
                         Total Obligations                   99,824
                       Unobligated Appropriation to
                        be returned to the Treasury             176
                       TOTAL APPROPRIATION                 $100,000

        13C            This figure :Ls composed of the following
                       account balances:

                       Accounts Payable                      $   25
                       Disbursements in Transit               1,975
                       Accrued Funded Payroll                    19
                       Undelivered Orders                     7.900
                       Total amounts; yet to be paid          9,919
                       Less Advances to Others                   (5)
                       NET UNPAID OBLIGATIONS                $9,914


Page 4-56              GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          It represents the amount of money obligated
                          for goods and services received or ordered
                          but not yet received which will have to be
                          paid from Fund Balance With Treasury, less
                          moneys due back to the appropriation.

     Line 14              Note that this is the amount disbursed from
                          Fund Balance With Treasury during the year.
                          Its derivation from lines 12 and 13 is based
                          on the following equation, which expresses
                          the relationship between items to be funded
                          by the appropriation:


           Total Goods and Services         Goods and       Goods and
           Received and Expected to     =   Services    +   Services
           Be Received                      Paid For        Yet to Be
                                                            Paid For


           (Expended Appropriations         (Cash           (Current and
           plus Undelivered Orders)         Disburse-        Expected
                                            ments, or        Liabilities
                                            outlays)         minus
                                                             Receivables)


          15C             This figure is equal to the difference
                          between the amount on line 13C and the amount
                          in Undelivered Orders. Undelivered Orders
                          are not valid accounts payable until the
                          goods and services they represent are
                          received.

          16              Note that the term "accrued expenditures"
                          means "Expended Appropriations accounted for
                          on an accrual basis." The amount on this
                          line should equal the amount in the account
                          Expended Appropriations.




    Page 4-57            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION



SF 220, Report on    Amounts shown on the statement are taken from
Financial Position   those on the balance sheet appearing on
                     p. 4-44. Note that it is necessary to add a
                     line after line 21 to show Cumulative Results
                     of Operations. The $175,000 negative balance
                     in that account represents expenses related
                     to the unfunded annual leave liability at
                     fiscal year-end.


SF 221, Report
on Operations

 Line 1              See discussion of "accrued expenditures" for
                     line 16 of the SF 133. While "Expended
                     Appropriations" is called for here,
                     conceptually, "Appropriated Capital Used" is
                     the proper financing source. In addition,
                     while Appropriated Capital Used is not a
                     single line item, note that line 1 + line 4-
                     line 14 is equal to the balance of              W
                     Appropriated Capital Used. Lines 4 and 14
                     are used to adjust Expended Appropriations to
                     reflect Appropriated Capital Used.
                     Adjustments to reconcile the two are
                     discussed in more detail in chapter 5.

      4               Note that it is necessary to include
                      appropriated capital used for depreciation
                      and supplies consumed because line 1,
                      expended appropriations, does not include
                      them.

      8               This line reports the amount of total
                      expenses, $77,499, less the amount on line
                      11, $3,825.
     11              This line shows the sum of Depreciation
                     Expense, $950, Expense for Supplies Used,
                     $2,700, and Annual Leave Expense, $175. The
                     word "unfunded" in the line description means


Page 4-58            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      "unfunded by current-year expended
                      appropriations." Note that the depreciation
                      and supplies used are related to the
                      financing source "Appropriated Capital Used"
                      on line 4.  The annual leave expense is not
                      funded. It will be paid from future
                      appropriations.

 Line 14              The amount on this line is the sum of
                      purchases of equipment, $15,000 and supplies,
                      $3,250.   Note that the amount on line 1,
                      $91,924, plus the amount on line 4, $3,650,
                      less the amount on line 14, $18,250, is equal
                      to the balance of the financing source
                      account Appropriated Capital Used, $77,324,
                      which is the proper account to match against
                      the expenses funded by the appropriation. We
                      are working with the SGL Advisory Work Group
                      and with Treasury to change the operating
                      statement to reflect Appropriated Capital
                      Used as a single item on line 1 instead of
                      computing it on the present lines 1, 4, and
                      14.

      16              Note that the $175 result is the amount of
                      unfunded annual leave expense.


SF 222, Report
on Cash Flow

 Line 2e              This line shows the sum of the following
                      liabilities:

                      Disbursements in Transit        $1,975
                      Accounts Payable                    25
                      Accrued, Funded Payroll             19
                      TOTAL                           $2,019

      3b              This is from line 11 of the SF 221.

      3d              The description "increase in inventory" means
                      purchases of inventory less disposals of


Page 4-59             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                     inventory (by sale, transfer to other
                     agencies without reimbursement, or
                     scrapping). The Illustrative Federal Agency
                     had only purchases.

 Line 3e             The same is true for equipment as for
                     inventory, explained in the comment for
                     line 3d, except that equipment can also be
                     traded in. The Illustrative Federal Agency
                     had only purchases of equipment.


SF 223, Report        This statement is based on the concept that
on Reconciliation     the sum of operating expenses plus purchases
                      of fixed assets represents the amount of
                      disbursements that would be required if all
                      expenses invDlved had been paid in cash.
                      However, some of the expenses do not require
                      cash outlays. In the case of the
                      Illustrative Federal Agency, these are the
                      expenses for depreciation, supplies used, and
                      annual leave. Their sum is listed on line
                      2d.
                      In addition, some of the expenses were
                      accrued and thus were recognized as expenses
                      but did not require cash outlays. These must
                      be deducted. On the other hand, expenses may
                      have been accrued in the prior year and paid
                      in Year A. They are not included in expenses
                      for the current year and must be added.

                      Finally, because it was formed in the current
                      year, the IlLustrative Federal Agency had no
                      beginning pavables. However, some payables
                      shown on line 2b had been accrued as of
                      fiscal year-end. Note that the computation
                      includes only payables for which budget
                      authority is provided by the appropriation.
                      No disbursements can be made for unfunded
                      payables.




Page 4-60             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


     Line   1             From SF 221, line 12.
            2a            From SF 221, line 14.

            2b            From SF 222, line 2(e) + line 2(f).

            2c            The $2,700 is the amount of supplies used
                          rather than the $550 increase in supplies,
                          because the SF 223 is incorrectly designed.
                          Both Jines 1 and 2a include supplies used to
                          the extent they were purchased during the
                          accounting period, and hence, the $2,700 must
                          be deducted on line 2c to make the report
                          balance. An alternative method to correct
                          the situation would be to place the $550
                          increase in inventory on line 2c and reduce
                          the amount on line 2a by the amount of
                          merchandise acquire during the period. For
                          our example, line 2a would then become
                          $15,000 ($18,250 shown less $3,250 for
                          merchandise acquired). We are working with
                          Treasury and the SGL Board to correct the
                          error in the form's construction.

            2d            This is the amount from SF 221, line 11, less
                          $2,700 related to the decrease in inventory.

            5             Note that this is the same amount as listed
                          on line 14 of the SF 133.


    TFS 2108,             The purpose of this form is to account for
    Year-End Closing      the Fund Balance With Treasury held by the
    Statement             agency. The basic formula used is as
                          follows, with numbers of the columns where
                          the information appears on the 2108 shown:




    Page 4-61            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                     Balance at Fiscal Year-End, before
                     merging of old appropriations and
                     return of unneeded funds                  Col. 2

                     Less:    Transfer to merged
                              appropriations                   Col. 3
                              Return of unneeded funds         Col. 4

                      Equals Balance needed for pending
                      transactions                             Col. 5

                      Plus funds expected to be received:

                         From certain special
                          authorizations                       Col. 6
                         From receivables relating to
                          reimbursable work performed for
                          others and certain refund items      Col. 7
                         From unfilled customer orders         Col. 8

                      Equals funds available for            No column
                      disbursement                          provided

                      Less expected disbursements:

                         From undelivered orders               Col. 9
                         From funded liabilities               Col. 10

                      Equals funds expected to be
                      available after expected
                      collections and disbursements            Col. 11

                      The source of figures relating to the columns
                      for our illustrative federal agency is set
                      forth below.

Column 2              This number, supplied by Treasury, is the
                      balance remaining in the account Fund Balance
                      With Treasury before any unused funds related
                      to unobligated appropriations are turned back
                      to Treasury. "Unexpended Balance" in the
                      column title means "Unexpended Fund Balance
                      With Treasury" as opposed to "unexpended
                      appropriations."


Page 4-62            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
                                                                         S
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


     Column 3             FY A appropriation accounts will not be
                          "merged" until FY C.  (See pp. 2-35 and 2-36
                          for an explanation of merging.)

            4             The Unobligated Balance Withdrawn is the
                          balance in the budgetary account
                          Restorations, Writeoffs, and Withdrawals.

            5             This is computed as col. 2 - col. 3 - col. 4.

            6             There was no authorization other than that
                          relating to the basic operating
                          appropriation.

            7             This is the balance of the account Advances
                          to Others.

            8             This is not applicable to the Illustrative
                          Federal Agency, as it has not engaged in work
                          for customers. Chapters 6 and 7 discuss
                          accounting for reimbursable work and chapter
                          8 provides a comprehensive illustration which
                          includes reimbursable work.

            9             This is the balance of the account
                          Undelivered Orders.

           10             The $2,019,000 shown is the sum of:

                          Disbursements in Transit              $1,975
                          Accounts Payable                          25
                          Accrued Funded Payroll Liability          19
                             Total                              $2,019

                          Note tiat only funded liabilities are
                          included in this sum. Unfunded liabilities,
                          such as that for annual leave, are not claims
                          on the FY A Fund Balance With Treasury, as
                          they will be financed through authority from
                          future appropriations.




    Page 4-63            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


 Column 11           This is the result of the following
                     computation: col. 5 + col. 6 + col. 7 + col.
                      8 -   col. 9 -   col.   10.




TRANSACTIONS         As with any entity, a federal agency's
SUBSEQUENT TO        activities continue after the books have
FY A                 been closed at the end of the appropriation
                     year. The payment of liabilities incurred
                     through authority of the appropriation
                     relating to the books just closed and
                     collection of receivables related to that
                     appropriation will occur in the next or
                     possibly later years. The agency will have a
                     new budget, but the budget will be related to
                     its appropriation for that new year, and any
                     payments or collections must be identified as
                     to the appropriation to which they relate.

                     Thus, while the agency will track its
                     transactions through such accounts as
                     illustrated in this chapter, the accounts
                     must be identified by appropriation year.
                     This is so that financial statements, some of
                     which require reporting or reconciling by
                     appropriation, can be properly prepared.

                     Agency accounting systems can accomplish this
                     through (1) separate ledgers, segregated by
                     year, (2) separate accounts by year in the
                     same ledger (e.g., Other Appropriations
                     Realized--FY A and Other Appropriations
                     Realized--FY B), or (3) through data elements
                     which allow identification of transactions by
                     appropriation year to which the transactions
                     relate.

                     This section continues the example for our
                     Illustrative Federal Agency's FY A
                     transactions through completion in FY B.   FY
                     B transactions, which would essentially



Page 4-64            GAO Accounting Guide:         September 1990
                     Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      repeat with different dollar amounts those
                      already illustrated for FY A, are not
                      presented. However, readers should
                      understand that at the same time transactions
                      related to FY A appropriations would occur in
                      FY B, transactions related to FY B would also
                      occur, and the two sets of transactions would
                      need to be segregated in the accounts to
                      facilitate proper reporting.

                      Transactions and journal entries relating to
                      our FY A appropriation and occurring in FY B
                      are shown below. The entries are posted to
                      the ledgers found in the appendix to this
                      chapter.

                      20.  (a) The $5,000 in outstanding travel
                      advances at the end of FY A were collected.

                                                  (1)
                      Budgetary entry

                      None



                                                  (2)

                      Proprietary entry

                      1110 Undeposited Collections              5,000
                         1410 Advances to Others                    5,000
                                          *   *   *     *   *


                     (b) The funds collected were deposited with
                     Treasury.




Page 4-65            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                                                  (1)

                      Budgetary entrv

                     None



                                                  (2)

                      Proprietary entry

                      1010 Fund Balance With Treasury           5,000
                         1110 Undeposited Collections               5,000
                                          *   *    *    *   *


                      21.    The first payroll in FY B was made.  The
                             portion pertaining to FY A (which is the
                             only portion with which these entries
                             are concerned) was $19,000.

                      (a)    The checks were requested from Treasury.

                                                  (1)

                      Budgetary entry

                      None



                                                  (2)

                      Proprietary entry

                      2210     Accrued Funded Payroll
                               and Benefits                     19,000
                            2120 Disbursements in Transit           19,000




Page 4-66             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                          (b)    Treasury confirmed that the payroll
                                 funds have been disbursed.

                                                      (1)

                          Budgetary entry

                          None



                                                      (2)

                          Proprietary entry

                          2120 I)isbursements in Transit    19,000
                             1010 Fund Balance With Treasury    19,000



                          22.    Goods and services of $7,900,000, which
                                 equals the amount obligated, were
                                 received. All were for personal
                                 services.

                                                      (1)

                          Budqetary entry

                          4800 Undelivered Orders        7,900,000
                             4900 Expended Appropriations    7,900,000
                                              *   *    *    **


                                                      (2)

                          Proprietary entries

                          6100     Operating/Program
                                   Expenses                      7,900,000
                                2110 Accounts Payable                7,900,000

                                                      and


    Page 4-67            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND           _
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION


                      3100 Appropriated Capital        7,900,000
                         5700 Appropriated Capital
                              Used                         7,900,000

                     Note that the Fiscal Year B Operating/Program
                     Expenses and Appropriated Capital Used
                     accounts are required. They would be posted
                     to the FY B general ledger, which is not
                     illustrated. The remaining accounts, which
                     pertain to the FY A appropriation, are posted
                     to the FY A :Ledgers in the chapter appendix.



                      23.    (a) Checks for $7,925,000 to be paid
                             vendors on account were requested from
                             Treasury.

                                             (1)

                      Budgetary entry

                      None



                                             (2)

                      Proprietary entry

                      2110 Accounts Payable          7,925,000
                         2120 Disbursements in Transit   7,925,000



                      (b) The agency received notice from Treasury
                          that disbursements to vendors in the
                          amount of' $9,900,000, including
                          $1,975,000 of disbursements in transit at
                          the end c'f FY A, had been made.




Page 4-68            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables                  0
.   CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                 APPROPRIATION


                                                     (1)

                          Budgetary entry

                         None



                                                     (2)

                          Proprietary entry

                          2120 Disbursements in Transit 9,900,000
                             1010 Fund Balance With Treasury 9,900,000



                          24.     Depreciation on equipment purchased in
                                  FY A amounted to $1.5 million in FY B.
                                  The amount of supplies purchased in FY A
                                  and used in FY B was $450,000.

                                                     (1)

                         Budgetary entry

                         None



                                                     (2)

                         Proprietary entries

                          6100      Operating/Program
                                    Expenses                  1,950,000
                                1759   Accumulated
                                       Depreciation on
                                       Equipment                 1,500,000
                                15is0  Inventory for Agency
                                       Operations                  450,000

                                               and


.   Page 4-69            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
 CHAPTER 4:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
              APPROPRIATION


                       3210 Capital Investments          1,950,000
                          5700 Appropriated Capital
                               Used                          1,950,000
                       Note that the Fiscal Year B Operating/Program
                       Expenses and Appropriated Capital Used
                       accounts are required. They would be posted
                       to the FY B general ledger which is not
                       illustrated. The remaining accounts, which
                       pertain to the FY A appropriation, are posted
                       to the FY A Ledgers in the chapter appendix.



                      After the above entries have been posted,
                      trial balances of the general ledger accounts
                      related to FY A accounts appear as follows.


                     Illustrative Federal Agency
              Trial Balance of FY A Budgetary Accounts
                        September 30 of FY B
                       (Dollars in Thousands)


Appropriations Realized but Withdrawn       $   176
Restorals, Writeoffs, and Withdrawals                            176
Other Appropriations Realized                7,900
Expended Appropriations                                       $7,900

  Total                                     $8,076            $8.076




 Page 4-70             GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables
.   CHAPTER 4:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                  PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
                  APPROPRIATION



                       Illustrative Federal Agency
               Trial Balance of FY A Proprietary Accounts
           Including Transactions Resulting in FY B Expenses
                          September 30 of FY B
                         (Dollars in Thousands)


    Inventory for Agency Operations                $      100
    Equipment                                          15,000
    Accumulated Depreciation--Equipment                           $ 2,450
    Capital Investments                                            12.650a

      Totals                                       $15.100        $15,100


     Note that the $12,650,000 in capital investments provides the
     financing source for the use of inventory and depreciation on
     equipment until all inventory is used and the equipment has
     been fully depreciated. Related to the FY A inventory and FY A
     equipment used in FY B, the operating statement for FY B would
     show the following.

          Appropriated Capital Used                             $1,950,000

          Operating/Program
          Expenses

                Supplies Used                $     450,000
                Depreciation
                on Equipment                     1,500.000      1.950,000

          Excess of Financing
          Sources over Expenses              $             0




    Page 4-71              GAO Accounting Guide:          September 1990
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CHAPTER 4:   COMPREHENSIVE EXAMPLE: INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR A BASIC OPERATING
             APPROPRIATION




CLOSING ENTRY--       Only one closing entry is needed in FY B for
FY B                  FY A accounts. That entry closes the
                      budgetary accounts Other Appropriations
                      Realized and Expended Appropriations, as
                      follows.

                      CL-9   Expended Appropriations   7,900,000
                                Other Appropriations
                                Realized                   7,900,000

                      After posting that entry, all budgetary
                      authority for FY A has been expended or
                      withdrawn.

                      The proprietary accounts relating to FY A
                      require no closing entries. Only
                      Appropriated Capital Used and Operating/
                      Program Expenses in the FY B ledger need to
                      be closed for those FY A transactions
                      occurring in FY B.  Both accounts are closed
                      at the end of FY B.




Page 4-72             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
APPENDIX TO CHAPTER 4:    LEDGER ACCOUNTS




APPENDIX CONTENTS    This appendix contains the following
AND SYMBOLS          ledger accounts, which show the postings
                     related to the entries illustrated in
                     chapter 4:
                     1.    a general ledger of budgetary accounts,

                     2.    a general ledger of proprietary accounts,
                     3.    a subsidiary appropriations ledger
                           supporting the budgetary accounts, and
                     4.    a subsidiary expense ledger supporting
                           the proprietary account "Operating/
                           Program Expenses."
                     General ledger account titles are followed by
                     their SGL numbers. Throughout all ledgers,
                     dollar amounts are reported in thousands. A
                     dashed line (---) indicates the end of first
                     quarter FY A transactions in each account,
                     and a double-dashed line (===) indicates the
                     end of transactions in FY A.




Page 4-73            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
     APPENDIX TO CHAPTER 4:     LEDGER ACCOUNTS




1.     GENERAL LEDGER--BUDGETARY ACCOUNTS


Account Name: Other Appropria-           Account Name: Authority Avail-
tions Realized (4119)                    able for Apportionment (4450)
Trans.    Dr.     Cr.   Balance          Trans.    Dr.     Cr.    Balance
1          100,000             100,000   1                     100,000      100,000
________________________________         2           31,000                  69,000
CL-5               176   99,824          --------------------------------
CL-6            91,924    7,900          13          69,000                       0
                                         CL-3                      176          176
CL-9                 7,900           0   CL-4            176                      0



Account Name:  Apportionment             Account Name: Allotments Avail-
Available for Distribution               able for Commitment/Obligation
(4510)                                   (4610)
Trans.    Dr.     Cr.    Balance         Trans.    Dr.     Cr.   Balance
2                    31,000     31,000   3                      30,000       30,000
3           30,000               1,000   4          16,000                   14,000
________________________________         5            1,250                  12,750
13               69,000  70,000          6            4,000                   8,750
14       70,000                0         8               100                  8,650
CL-2                176      176         9a           7,400                   1,250
CL-3         176               0         10a                        50        1,300

                                         14                     70,000       71,300
                                         15a        32,500                   38,800
                                         15b           100                   38,700
                                         16a        16,000                   22,700
                                         16d            25                   22,675
                                         17a        22,580                       95
                                         18a            50                       45
                                         19c            19                       26
                                         CL-1                      150          176
                                         CL-2           176                       0




     Page 4-74               GAO Accounting Guide:          September 1990
                             Appropriations and Reimbursables                         V
O    APPENDIX TO CHAPTER 4:        LEDGER ACCOUNTS




    Account Name:   Commitments Avail-        Account Name:        Undelivered Orders
    able for Obligation (4700)                (4800)
    Trans.    Dr.      Cr.    Balance         Trans.        Dr.         Cr.    Balance
    4                 16,000   16,000         5                       17,000    17,000
    5        15,750               250         6                         4,000   21,000
    ________________________________          8             8,900               12,100
    15a               32,500   32,750         10a           3,950                8,150
    15b      32,600               150         --------------------------------
    CL-1        150                 0         15b                     32,700    40,850
                                              16a                     16,000    56,850
                                              16d          16,000               40,850
                                              18a          32,950                7,900

                                              22          7,900                    0


    Account Name:     Expended Appropri-      Account Name:  Restorations,
    ations (4900)                             Writeoffs, and Withdrawals (4391)
    Trans.    Dr.        Cr.       Balance    Trans.    Dr.     Cr.    Balance

.   8
    9a
    10a
                         9,000
                         7,400
                         3,900
                                     9,000
                                    16,400
                                    20,300
                                              (Account not used during first
                                              quarter.)
                                              CL-4                176      176

    16d                 16,025      36,325
    17a                 22,580      58,905
    18a                 33,000      91,905    Account Name: Appropriations
    19c                     19      91,924    Realized but Withdrawn (4114)
    CL-6     91,924                      0    Trans.    Dr.     Cr.    Balance
                                              (Account not used during first
    22                   7,900       .7,900   quarter.)
    CL-9      7,900                       0   CL-5        176                176




      Page 4-75                  GAO Accounting Guide:          September 1990
                                 Appropriations and Reimbursables
     APPENDIX TO CHAPTER 4:      LEDGER AC2COUNTS




2.     GENERAL LEDGER:   PROPRIETARY ACCOUNTS


Account Name: Fund Balance With           Account Name: Undeposited
Treasury (1010)                           Collections (1110)
Trans.    Dr.    Cr.    Balance           Trans.    Dr.      Cr.    Balance
1       100,000         100,000           10c           50               50
7b               1,500   98,500           lod                    50       0
9b               7,400   91,100           ________________________________
lod           50         91,150           16e            5                5
10e              2,700   88,450           16f                     5       0

16c                  5,000       83,450   20a              5                     5
16f              5               83,455   20b                         5          0
16h                  10,785      72,670
17b                  22,580      50,090
18c                  40,000      10,090
CL-5                    176       9,914

20b              5                9,919
21b                      19       9,900
23b                   9,900           0


Account Name: Advances to Others          Account Name:       Inventory for
(1410)                                    Agency operations (1510)
Trans.    Dr.    Cr.    Balance           Trans.       Dr.       Cr.       Balance
7a        1,500           1,500           8               750                  750
10a              1,200       300          12a                       400         350
l0c                  50      250          --------------------------------
________________________________          18a          2,500                 2,850
16b      5,000            5,250           19a                    2,300          550
16d              5,240        10
16e                   5        5          24                       450         100

20a                       5           0




     Page 4-76                GAO Accounting Guide:          September 1990
                              Appropriations and Reimbursables
 .    APPENDIX TO CHAPTER 4:             LEDGER ACCOUNTS




     Account Name:      Equipment (1750)          Account Name: Accumulated
                                                  Depreciation on Equipment (1759)
     Trans.    Dr.         Cr.          Balance   Trans.    Dr.     Cr.    Balance
     8        3,000                       3,000   12b                 150      150

     18a      12,000                     15,000   19b                     800         950

                                                  24                    1,500      2,450


     Account Name: Disbursements in               Account Name: Accounts Payable
     Transit (2120)                               (2110)
     Trans.    Dr.    Cr.    Balance              Trans.       Dr.       Cr.       Balance
     7a               1,500    1,500              8                      9,000       9,000
     7b       1,500                 0             10a                    2,700      11,700
     9a               7,400    7,400              10b          2,700                 9,000
     9b       7,400                 0             11           8,500                   500
     10b              2,700    2,700              --------------------------------
     10e      2,700                 0             16d                   10,785      11,285
     11               8,500    8,500              16g        10,785
 .
is
      …………~~------------------_________
     16b             5,000  13,500
                                                  18a
                                                  18b        33,475
                                                                        33,000
                                                                                       500
                                                                                    33,500
                                                                                        25
     16c       5,000                      8,500
     16g                  10,785         19,285   22                    7,900      7,925
     16h      10,785                      8,500   23a         7,925                    0
     17a                  22,580         31,080
     17b      22,580                      8,500
     18b                  33,475         41,975
     18c      40,000                      1,975

     21a                         19       1,994
     21b           19                     1,975
     23a                   7,925          9,900
     23b      9,900                           0




       Page 4-77                      GAO Accounting Guide:          September 1990
                                      Appropriations and Reimbursables
      APPENDIX TO CHAPTER 4:                 LEDGER ACCOUNTS




Account Name: Accrued Funded                             Account Name: Other Liabilities
Payroll and Benefits (2210)                              (To Return Unused Appropriation
                                                         to Treasury.) (2990)
Trans.    Dr.     Cr.    Balance                         Trans.    Dr.     Cr.    Balance
(Account not used in first                               (Account not used in first
quarter.)             19      19                         quarter.)
19c                   19      19                         CL-4                 176     176
                                                         CL-5        176                0
21a                  19                              0


Account Name:  Accrued Unfunded  Account Name: Appropriated
Annual Leave (2220)              Capital (3100)
Trans.    Dr.     Cr.    Balance Trans.    Dr.     Cr.   Balance
12c                   75      75 1               100,000 100,000
________________________________ 8         9,000          91,000
19e                 100      175 9a        7,400          83,600
                                 10a       3,900          79,700

                                                         16d              16,025   63,675
                                                         17a              22,580   41,095
                                                         18a              33,000    8,095
                                                         19c                  19    8,076
                                                         CL-4                176    7,900

                                                         22               7,900        0


Account Name: Capital Invest-                            Account Name: Cumulative Results
ments (3210)                                             of Operations (3310)
Trans.    Dr.    Cr.    Balance                          Trans.    Dr.     Cr.    Balance
8                3,750    3,750                          (Account not used in first
12a        400            3,350                          quarter)
12b        150            3,200                          CL-8        175             (175)
___     ___   __   ___    ___     __   ___   ___   __    =   ====   ===


18a                             14,500       17.700
19a            2,300                         15,400
19b              800                         14,600

24             1,950                         12,650




      Page 4-78                          GAO Account:Lng Guide:         September 1990
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.    APPENDIX TO CHAPTER 4:   LEDG3ER ACCOUNTS




    Account Name:  Net Results of       Account Name: Appropriated
    Operations (3320)                   Capital Used (5700)
    Trans.    Dr.     Cr.    Balance    Trans.    Dr.     Cr.   Balance
    (Account not used in first          8                 5,250   5,250
    quarter)                            9a                7,400  12,650
    CL-7       175              (175)   10a               3,900  16,550
    CL-8                175        0    12a                 400  16,950
                                        12b                 150  17,100

                                        16d               16,025   33,125
                                        17a               22,580   55,705
                                        18a               18,500   74,205
                                        19a                2,300   76,505
                                        19b                  800   77,305
                                        19c                   19   77,324
                                        CL-7     77,324                 0




.   Account Name:
    Expenses (6100)
    Trans.    Dr.
                    Operating/Program

                       Cr.    Balance
    8        5,250              5,250
    9a       7,400             12,650
    10a      3,900             16,550
    12a        400             16,950
    12b        150             17,100
    12c         75             17,175

    16d     16,025            33,200
    17a     22,580            55,780
    18a     18,500            74,280
    19a      2,300            76,580
    19b        800            77,380
    19c         19            77,399
    l9e        100            77,499
    CL-7             77,499        0




      Page 4-79            GAO Accounting Guide:          September 1990
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     APPENDIX TO CHAPTER 4:                         LEDGER ACCOUNTS




3.     SUBSIDIARY LEDGER--BUDGETARY ACCOUNTS


Account Name: Salaries and Benefits
         Allot-              Unde-                                   Expended
Trans-   ments    Commit-    livered                                 Appro-        Allotments
action   Made     ments      Orders                                  priations     Available
3         7,500                                                                         7,500
9                                                               _7400 7_                 100
Subtotal          7,500                         0               0         7,400          100

14       22,500                                                                       22,600
17a                                                                       22,580          20
19c                                            ___                            19           1
Subtotal 30,000                                 0                0        29,999           1
CL-2                    -1                     ___                                         0
Total           29,999                          0                0        29,999           0



Account Name: Travel
         Allot-                                          Unde-       Expended
Trans-   ments    Commit-                                livered     Appro-        Allotments
action   Made     ments                                  Orders      priations     Available
3         4,500                                                                         4,500
6                                                           4,00)0                        500
10a                                             -           3_9_i          3-900         550
Subtotal          4,500                         0               50         3,900         550
__________________________________._________________________-


14               15,500                                                                16,050
16a                                                       16,000                           50
16d                                             _       -16,000           16,025          25
Subtotal 20,000                                 0               50        19,925          25
CL-2                  -25                       _                     _                    0
Total            19,975                         0               50        19,925           0




     Page 4-80                              GAO Accounting Guide:          September 1990
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.        APPENDIX TO CHAPTER 4:                        LEDGER ACCOUNTS




    Account Name: Fixed Assets, Materials, and Services
             Allot-              Unde-    Expended
    Trans-   ments    Commit-    livered Appro-      Allotments
    action   Made     ments      Orders   priations Available

    3               18,000                                                                18,000
    4                                    16,000                                            2,000
    5                                   (15,750)             17,000                          750
    8                                                        (8,900)       9,000              650
    Subtotal 18,000                            250            8,100        9,000              650
    ____________________________________________________________


    14              32,000                                                                32,650
    i5a                                  32,500                                              150
    15b                                 (32,600)             32,700                           50
    18a                                                    (32_950)       33,000
    Subtotal 50,000                            150            7,850       42,000                0
    CL-1                                      (150)                                           150
    CL-2                 (150)
    Total           49,850                         0          7,850       42,000                0




    4.     SUBSIDIARY LEDGER--OPERATING/PROGRAMEXPENSES


    Account Name: Depreciation                                     Account Name: Payroll and
    Expense on Equipment                                           Benefits Expense
    Trans.    Dr.     Cr.    Balance                               Trans.       Dr.       Cr.       Balance
    12b        150               150                               9a           7,400                 7,400
    ________________________________-                              12c              75                7,475
    19b        800               950                               --------------------------------
    CL-7                950        0                               17a        22,580                 30,055
                                                                   19c              19               30,074
                                                                   19e            100                30,174
                                                                   CL-7                  30,174           0




O        Page 4-81                             GAO Accounting Guide:          September 1990
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   APPENDIX TO CHAPTER 4:                     LEDGER ACCOUNTS




Account Name: Personal Services                        Account Name: Expense for
Expense                                                Supplies Used
Trans.    Dr.    Cr.    Balance                        Trans.    Dr.    Cr.    Balance
8        5,250            5,250                        12a         400             400

18a           18,500                          23,750   19a       2,300            2,700
CL-7                               23,750          0   CL-7              2,700        0



Account Name:               Travel Expense

Trans.           Dr.               Cr.       Balance
10a             3,900                          3,900
________________________________


16d           16,025                          19,925
CL-7                               19,925          0




   Page 4-82                                GAO Accounting Guide:         September 1990
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    CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
                 ACCOUNTING



    INTRODUCTION         In addition to the financial statements
                         presented in the preceding chapter, title 2
                         of GAO's Policy and Procedures Manual for
                         Guidance of Federal Agencies requires a
                         reconciliation of "bpdgetary reports" to
                         "financial reports." This is accomplished
                         by (1) preparing the cash flow statement
                         illustrated in chapter 4 and (2) reconciling
                         the proprietary account Operating/Program
                         Expenses with t~ie budgetary account Expended
                         Appropriations, which is the subject of
                         this chapter. The reconciliation can be in
                         the form of a footnote to the financial
                         statements or can be prepared as a separate
*                        statement.


    NATURE OF THE        In order to understand the nature of the
    RECONCILIATION       reconciliation between Expended
    BETWEEN EXPENDED     Appropriations and Operating/Program
    APPROPRIATIONS       Expenses, it is important to understand the
    AND OPERATING/       differences between budgetary and
    PROGRAM EXPENSES     proprietary accounting as they affect those
                         two accounts. The table on p. 3-2 explains
                         differences between budgetary and proprietary
                         accounting generally. That portion of the




                          1Standard F-20, paragraph .10 of appendix I to
                          title 2.
                         2 Note t:hat "Expended Appropriations" is called
                          "Accrued Expenditures" on line 16 of the
                          SF 133, "Report on Budget Execution."

    Page 5-1             GAO Accounting Guide:          September 1990
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             ACCOUNTING



                      table related to Expended Appropriations and
                      Operating/Program Expenses is reproduced
                      below to assist in understanding the nature
                      of the reconciliation required.

Table 5.1:   Summary of Key Differences Between Budgetary and
             Proprietary Accounting in Recoqnition of Events That
             Constitute Transactions Related to Expended
             Appropriations and Operating/Program Expenses


      Expended Appropriations             Operating/Program
                                               Expenses

               (1)                                 (1)
Entries are made to expend            Goods and services which
appropriations when goods             will last more than a
and services chargeable to            year are capitalized and
the appropriation are received,       expensed when consumed,
regardless of when they are           regardless of what
used and regardless of when           appropriation funded them
they are paid for.                    and when they are paid
                                      for.

             (2)                                   (2)
Entries are not made against           Goods and services con-
an appropriation for trans-            sumed in the present
actions not funded by the              period for which payment
appropriation.                         is to be made from one
                                       or more subsequent
                                       appropriations is recogni-
                                       zed as an expense in the
                                       current period.

             (3)                                   (3)
Entries are not made against           Goods and services consum-
an appropriation for trans-            ed in the present period
actions not funded by the              but paid for in prior
appropriation.                         periods are expensed in
                                       the current period.




Page 5-2              GAO Accounting Guide:         September 1990
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.   CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
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                          The effect of each of the three table items
                          on the reconciliation between Expended
                          Appropriation and Operating/Program Expenses
                          is discussed in the following sections.


    Situation 1--         The first of the three table items deals
    Capitalized Asset     with situations in which long-lived assets
    Purchases             are charged as expended appropriations when
                          received for budgetary purposes but are
                          capitalized for proprietary purposes.
                          Examples of such assets are inventory and
                          equipment. Recall that the entries to
                          purchase inventory and equipment are as
                          follows:

                                                (1)
                          BudQetary entry

                         Undelivered Orders
                            Expended Appropriations



                                                (2)

                          Proprietary entries

                          Inventory for Agency Operations
                          Equipment
                             Fund Balance With Treasury

                                                and

                         Appropriated Capital
                           Capital Investments



                         Note that the budgetary entry results in an
                         expended appropriation. However, the
                         proprietary entries do not result in expenses


    Page 5-3             GAO Accounting Guide:          September 1990
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CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
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                      at the time of purchase. Expenses will be
                      recorded subsequently as the inventory and
                      equipment are used.

                      From this, we can see that the following
                      adjustment is required to reconcile Expended
                      Appropriations to Operating/Program Expenses.


                    Illustrative Federal Agency
       Reconciliation of Current Year Expended Appropriations
                        and Program Expenses
                       for Period Ended (Date)


Expended Appropriations                                         $xxx


Operating/Program Expenses                                      $xxx

Add:     Purchase of Inventory for Agency
         Operations Not Expensed on Purchase         $xx

         Purchase of Equipment Not Expensed
         on Purchase                                  xx

Expended Appropriations                                         $xxx




Illustration--        Assume that an agency purchased
Reconciliation        $500 of inventory and $1,000 of equipment.
Involving             Journal entries are made as follows.
Capitalized Asset
Purchases




Page 5-4              GAO Accounting Guide:          September 1990
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.   CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
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                                                       (1)

                          Budqe:ary entry

                          Undelivered Orders                         1,500
                              Expended Appropriations                    1,500



                                                       (2)

                          Proprietary entries

                          Inventory for Agency Operations              500
                          Equipment                                  1,000
                             Fund Balance With Treasury                  1,500

                                                       and

                          Appropriated Capital                       1,500
                             Capital Investments                         1,500
                                               *   *    *    *   *


                          Note that, after these entries have been
                          posted, Expended Appropriations has a balance
                          of $1,500, and Operating/Program Expenses has
                          a zero balance. The two are reconciled as
                          shown on the next page by applying the
                          concepts in this section.




    Page 5-5             GAO Accounting Guide:          September 1990
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                                                                       0

                    Illustrative Federal Agency
       Reconciliation of Current Year Expended Appropriations
                  and Operating/Program Expenses
                      for Period Ended (Date)


 Expended Appropriations                                      $1,500


Operating/Program Expenses                                        0

Add:     Purchase of Inventory for Agency
         Operations Not Expensed on Purchase      $    500

         Purchase of Equipment Not Expensed
         on Purchase                                  1.000   1,500

 Expended Appropriations                                      $1.500

                                                                       0
Situation 2--         The second situation in table 5.1 occurs when
Current Expenses      program expenses recognized in the current
to Be Paid From       accounting period are to be funded from
Subsequent            future appropriations. An example is the
Appropriations        accrual of Annual Leave Expense, which
                      results in a liability to pay the annual
                      leave in subsequent periods. The funding for
                      that liability will be received through
                      appropriations in those subsequent periods.
                      The current year's appropriation funds
                      salaries--including salary payments for
                      annual leave taken--only for the current
                      year. The required journal entry is as
                      follows.




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.   CHAPTER 5:    RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
                  ACCOUNTING



                                                        (1)

                            Budgetary entry

                            None

                                                *   *   **    *


                                                        (2)

                            Proprietary entry

                            Operating/Program Expenses
                               Accrued Unfunded Annual Leave



                            The reconciliation between Expended
                            Appropriations and Operating/Program Expenses
                            for such items is shown below:


                       Illustrative Federal Agency
         Reconciliation of Current Year Expended Appropriations
                     and Operating/Program Expenses
                        for Period Ended (Date)


     Expended Appropriations                                              $ xxx


     Operating/Program Expenses                                   $xxx

     Deduct:     Current Expenses Funded From Subse-
                 quent Appropriations                              (xx)

     Expended Appropriations                                              $xxx




    Page 5-7               GAO Accounting Guide:          September 1990
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                                                                         0

Illustration--         Assume that accrued annual leave payable
Reconciliation         at the end of the fiscal year increased by
Involving Current      $1,000 over that payable at the beginning
Expenses to            of the year. No budgetary entry is
Be Paid From           required, and the proprietary entry is as
Subsequent             follows.
Appropriations
                       Operating/Program Expenses            1,000
                          Liability for Annual Leave             1,000



                       After the entry is posted, the amount of
                       Expended Appropriations is zero and the
                       amount of Operating/Program Expenses is
                       $1,000. The reconciliation is as follows.


                  Illustrative Federal AQency
      Reconciliation of Current Year Expended Appropriations
                and Operating/Program Expenses
                      for Period Ended (Date)

 Expended Appropriations                                        $0


 Operating/Program Expenses                        $1,000

 Deduct:     Current Expenses Funded From Subse-
             quent Appropriations--Accrued
             Annual Leave                          (1.000)

 Expended Appropriations                                        $0




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CHAPTER 5:    RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
              ACCOUNTING




Situation 3--          The final situation causing differences
Current Expenses       between Expended Appropriations and
Funded by              Operating/Program Expenses (see Table 5.1,
Prior-Year             p. 5-2) involves current expenses funded by
Appropriations         prior-year appropriations. This occurs
                       primarily in the cases of (1) assets
                       purchased in prior periods and used in the
                       current period, and (2) goods and services
                       received and used in the current period but
                       properly obligated against and funded by
                       prior years' appropriations. The current
                       year's appropriation is not charged for such
                       expenses; rather, the prior years'
                       appropriations were.  Accordingly, the amount
                       of program expenses related to prior years'
                       expended appropriations must be deducted from
                       the total of such expenses to achieve a
                       reconciliation, as indicated on the following
                       schedule.



                   Illustrative Federal Agency
      Reconciliation of Current Year Expended Appropriations
                 and Operating/Program Expenses
                      for Period Ended (Date)


 Expended Appropriations                                    $xxx


 Operating/Program Expenses                        $xxx

 Deduct:     Current Expenses Funded from
             Prior Appropriations                   (xx)


 Expended Appropriations                                    $ xxx




Page 5-9               GAO Accounting Guide:          September 1990
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             ACCOUNTING




Illustration--       Assume that, in the current year, the
Reconciliation       following transactions occurred.
Involving
Current Expenses      (a) Goods ordered in the prior year and
Funded by                 chargeable to that year's appropriation
Prior-Year                were received, as follows:
Appropriation
                     Inventory for Agency Operations    $1,000
                     Equipment                           5,000

                     To record this, the following entries are
                     made.

                                            (1)

                      Budgetary entry--prior year's appropriation

                     Undelivered Orders                 6,000
                        Expended Appropriations                  6,000



                                            (2)

                      Budgetary entry--current year's appropriation

                      None



                                            (3)

                      Proprietary entries

                      Inventory for Agency Operations    1,000
                      Equipment                          5,000
                         Fund Balance With Treasury
                         --Prior Year                            6,000

                                            and




Page 5-10             GAO Accounting Guide:          September 1990
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                     Appropriated Capital--Prior Year     6,000
                        Capital Investments                    6,000



                      (b) The amount of inventory used during the
                          current year is $900, and $500 of
                          depreciation is to be recorded.


                     To record this, the following entries are
                     made:

                                              (1)
                      Budgetary entry--prior year's appropriation

                     None



                                              (2)

                      Budgetary entry--current year's appropriation

                     None



                                              (3)

                     Proprietary entries

                     Operating/Program Expenses         1,400
                        Inventory for Agency Operations            900
                        Accumulated Depreciation
                        on Equipment                               500

                                              and

                     Capital Investments                  1,400
                        Appropriated Capital Used                 1,400
                                      *   *   *   *   *




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             ACCOUNTING



                     After all entries have been posted, the
                     current year Expended Appropriations has a
                     zero balance and the Operating/Program
                     Expenses account would have a balance of
                     $1,400. Reconciliation between the two
                     accounts would be made as shown below.


                  Illustrative Federal Agency
     Reconciliation of Current Year Expended Appropriations
                and Operating/Program Expenses
                      for Period Ended (Date)


Expended Appropriations                                 $       0


Operating/Program Expenses                              $ 1,400

Deduct Expenses Financed by
Prior Years' Appropriations:

    Inventory Used in Agency Operations        $(900)
    Depreciation                                (500)   $(1.400)

 Expended Appropriations                                $       0




Page 5-12            GAO Accounting Guide:          September 1990
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    CHAPTER 5:        RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
                      ACCOUNTING




    NATURE OF THE                 Once the Operating/Program Expenses account
    RECONCILIATION                has been reconciled to Expended
    BETWEEN                       Appropriations, the Expended Appropriations
    OPERATING/PROGRAM             account: may be further reconciled with the
    EXPENSES AND                  account: Other Appropriations Realized. To
    OTHER                         do this, it is necessary to understand what
    APPROPRIATIONS                causes differences between the two accounts.
    REALIZED                      These differences are explained through the
                                  basic budgetary account equation discussed in
                                  chapter 2.   That equation is shown below.



                (A)                            (B)                   +        (C)

          Appropriation                Appropriation                     Delegations,
          authority                    not: apportioned                  reservations,
                                                                         and expending
                                                                         of the
*     _     _   _     _   _   _    _   _   _   _     _   _   _   _       appropriation


                                  Part C of the equation is comprised of the
                                  sum of the following items:

                                  --   apportionments of the appropriation,

                                  --   allotments of the apportionment,

                                  --   commitments against the allotments,

                                  --   obligations against the commitments, and

                                  --   expenditures against the obligations.

                                  Based on this, the reconciliation takes the
                                  following form:




    Page 5-13                     GAO Accounting Guide:          September 1990
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CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
             ACCOUNTING




                 Illustrative Federal Agency
      Reconciliation Between Expened ARppropriations and
                 Other Appropriations Realized
                    for Period Ended (Date)

Other Appropriations Realized                               $xxx


Expended Appropriations                                      xxx
Add: Undelivered Orders                            $xx
      Commitments Available for Obligation          xx
       Allotments Available for Conmitment/
         Obligation                                 xx
       Apportionment Available for Distribution     xx
       Authority Available for Apportionment        xx       xxx
Other Appropriations Realized                               $ xxx




COMPREHENSIVE         In the remainder of the chapter, concepts
ILLUSTRATION          presented in the preceding sections are
                      applied to the reconciliation required for
                      the example presented in chapter 4 as of the
                      end of FY-A. In addition, this illustration
                      demonstrates how at the end of FY B, FY B
                      transactions relating to FY A accounts affect
                      the reconciliation required for the
                      FY B appropriation.


FY A                  The reconciliation between proprietary and
Reconciliation        budgetary reporting at the end of FY A for
                      the Illustrative Federal Agency example
                      presented in chapter 4 follows. Note that
                      the balances of the accounts involved before
                      closing are required. for the reconciliation.




Page 5-14             GAO Accounting Guide:          September 1990
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.   CHAPTER 5:    RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
                  ACCOUNTING




                         Illustrative Federal Agency
                 Reconciliation of Operating/Program Expenses
                      to Other Appropriations Realized
                     for Year Ended September 30 of FY A
                            (Dollars in Thousands)

     Other Appropriations Realized                             $100,000


     Operating/Program Expenses                                $ 77,499

     Add:    Purchase of Inventora               $ 3,250
             Purchase of Equipment                   15,000      18,250

     Deduct:  Expense of Inventory Usedb             (2,700)
              Depreciation Expenseb                    (950)
              Annual Leave Expense                     (175)     (3,825)
     Expended AppropriationsC                                  $ 91,924
     Add: d Undelivered Orders                       7,900
             Commitments Available for Obligatione      150
             Allotments Available for
                Commitment/Obligalion                    26       8,076

     Other Appropriations Realized                             $100.000

     a
     b   Situation 1 adjustment
     bSituation 2 adjustment
       Note that agencies may change the first line to read and re-
       flect the amount of "expended appropriations" and end their
       reconciliation with the line referenced by this note. We are
       beginning with, and providing the further reconciliation to
     d "Other Appropriations Realized" for illustrative purposes.
      Note that the accounts Apportionment Available for
       Distribution and Authority Available for Apportionment have
       zero balances and hence do not appear. If, in other
       circumstances, they had balances, they would be added here.
       If Commitments Available for Obligation had already been
      removed from the books, it would not appear here, but
       instead would be included in Allotments Available for
       Commitment/Obligation, which would have a balance of $176,000.




    Page 5-15              GAO Accounting Guide:         September 1990
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                     "Situation 311 adjustments, involving current
                     expenses funded by prior-year appropriations,
                     were not applicable at the end of FY A.
                     However, such adjustments would be applicable
                     to FY B, because some of the FY B expenses--
                     depreciation and supplies used relating to
                     equipment and supplies purchased in FY A--
                     were funded through FY A appropriations.


FY B                  The example in chapter 4 does not include
Reconciliation        FY B transact-ions other than those which
                      involve FY A accounts. However, the concept
                      of the reconciliation which would be required
                      at the end of FY B can still be illustrated.

                      Assume, for purposes of illustration, that
                      the FY B appropriation was zero. In that
                      case, the FY B accounts for both Other
                      Appropriations Realized and Expended
                      Appropriations would be zero. Yet, some FY B
                      transactions related to the FY A
                      appropriations did occur. Item 24 in the
                      chapter 4 example, in which, during FY B,
                      $450 in inventory was used and $1,500 in
                      depreciation was taken on inventory and
                      equipment purchased in FY A, is a case in
                      point. From those item 24 transactions, the
                      following reconciliation would be prepared,
                      utilizing "sLtuation 3" concepts.




Page 5-16             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 5:   RECONCILIATION BETWEEN BUDGETARY AND PROPRIETARY
                 ACCOUNTING




                        Illustrative Federal Agency
                    Reconciliation of Overating/Program
                 Expenses to Other Appropriations Realized
                    for Year Ended September 30 of FY B
                           (Dollars in Thousands)

     Other Appropriations Realized                           $        0


     Operating/Program Expenses                              $ 1,950

     Deduct Expenses Funded by FY A Appropriations:

        Expense for Inventory Used               $     450
        Depreciation on Equipment                    1,500       (1.950)

     Expended Appropriation/
      Other Appropriations Realized                          $        0


     a Situation 3 adjustment.


                         In actual practice, the situation 1 and 2
                         items illustrated for FY A on p. 5-15 also
                         occur in FY B, and, hence, the items in that
                         portion of the reconciliation in FY B are the
                         same as for FY A, though with differing
                         amounts. In addition, any other FY B
                         expenses funded by FY A appropriations
                         (situation 3) are deducted from the balance
                         in Operating/Program Expenses to provide the
                         reconciliation with Expended Appropriations.
                         The remainder of the reconciliation, from
                         Expended Appropriations to Other
                         Appropriations Realized, would contain the
                         same items, with differing amounts, as
                         illustrated for FY A on p. 5-15.




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             ACCOUNTING




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    CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




    INTRODUCTION         Chapter 2 discusses budgetary accounting for
                         a basic operating appropriation. In addition
                         to activities undertaken and funded through
                         the budget authority received from the
                         appropriation, one federal agency often
                         performs work for another agency on a
                         reimbursable basis. In such cases, agencies
                         usually enter into "interagency work
                         agreements." These agreements set forth the
                         work to be performed and the prices to be
                         paid by the agencies entering into the
                         agreement. An agency for which the work is
                         to be performed sets a limit on the amount of
                         money that can be obligated and expended for
*                        activities authorized by the agreement.
                         The interagency agreement provides budget
                         authority to the performing agency in
                         addition to that provided by its own
                         appropriation (OMB calls this "budgetary
                         resources" to distinguish it from budgetary
                         "authority" provided by appropriations--a
                         difference in terminology unnecessary for
                         purposes of this guide). As with basic
                         operating appropriations, overobligating or
                         overexpanding reimbursable work budget
                         authority can carry penalties under the law.
                         This chapter discusses budgetary accounting
                         for reimbursable work. Brief illustrations
                         that apply the concepts discussed in this
                         chapter are presented. Chapter 7 discusses
                         proprietary accounting for reimbursable work,
                         and chapter 8 provides a comprehensive
                         example integrating the two concepts.




    Page 6-1             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:       BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




CONCEPTUAL                In an interagency work agreement, the
FRAMEWORK FOR             reimbursement: authority provides budget
REIMBURSABLES             authority in addition to appropriated funds.
                          Just as for budget authority provided by an
                          appropriation, budget authority provided
                          under interagency agreements is subject to
                          fund control and can be apportioned,
                          allotted, committed, obligated, and expended.
                          Thus, the basic accounting equation for
                          reimbursable work under interagency
                          agreements, where "R" designates budget
                          authority from reimbursable activities, is as
                          follows.


           (R)                         (B)                 +            (C)

 Budget                         Budget Authority                   Apportionments,
 Authority                      Not Apportioned                    Allotments,
 Relating to Reim-                                                 Commitments,
 bursable Work                                                     Obligations, and
 Under Interagency                                                 Expending of
 Service Agreements                                                the Budget
                                                                   Authority.

                          The basic entry to record establishment of
                          budget authority from an interagency
                          agreement involves the introduction of only
                          one new SGL account: 4210, Anticipated
                          Reimbursements and Other Income. The entry
                          is as follows.
                          6-1     To record estimated reimbursements under
                                  interagency service agreements:

                          Anticipated Reimbursements and Other Income
                             Authority Available for Apportionment
                                               *   *   *       *   *




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.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                         When the budget authority is apportioned,
                         allotted, committed, obligated, and expended,
                         chapter 2 entries 2-2 through 2-6,
                         respectively, are made, just as they are for
                         budget authority from an operating
                         appropriation (see p. 2-7). The SGL provides
                         a single set of accounts for budget authority
                         available for apportionment, allotment,
                         commitment, and obligation, and for expended
                         budget authority relating to both basic
                         operating appropriations and reimbursable
                         work.   As a result, the basic budgetary



                         1Note that a mechanism is needed to provide a

                         means for separating common accounts into
                         elements related to the appropriation and
                         related to reimbursable work. Without such a
                         mechanism, an agency might inadvertently
                         overobligate or overexpand its appropriation
                         or interagency agreement by thinking that
                         less was obligated or expended against one or
                         the other than was actually the case.

                         Alternatives for dealing with the matter
                         include establishing a separate set of
                         accounts for each spending authority or a
                         data element that could be used to segregate
                         transactions between the two. Under the
                         former alternative, for instance, accounts
                         titled "Authority Available for Apportionment
                         --Appropriation" and "Authority Available for
                         Apportionment--Reimbursables,"or
                         "Comnitments Available for Obligation--
                         Appropriation" and "Commitments Available for
                         Obligation--Reimbursables" could be used.
                         Under the latter alternative, a data element
                         such as "A" or "D" for appropriation-related
                         transactions (the SGL characterizes
                          (continued on next page)


    Page 6-3             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:     BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                       accounting equation, combining both basic
                       operating appropriations and reimbursable
                       work, becomes:


       (A,R)                         (B)          +        (C)

Budget Authority               Budget Authority       Apportionments,
From Basic Operating           Not Apportioned        Allotments,
Appropriations and                                    Commitments,
Reimbursable Work                                     Obligations,
                                                      and Expenditures
                                                      of the Budget
                                                      Authority


                       The SGL presently does not provide a set of
                       accounts which divides the status of budget
                       authority (columns B and C, above) by that
                       related to reimbursable work and that related
                       to the appropriation. However, accounts are
                       provided to further detail information about
                       the budget authority in column A by capturing
                       the dollar amount of

                       --     orders actually accepted, which may differ
                              from the amount of orders anticipated;

                       --     the amount of undelivered orders placed
                              for reimbursable work; and




                            (continued from preceding page)

                       appropriation-related spending authority as
                       "direct" authority; hence the possibility of
                       using "D" as a designator) and "R" for
                       reimbursable-related transactions could be
                       used.


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                                                 I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~




.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                            --   the amount of expended budget authority
                                 relating to reimbursable work.

                            In order to capture this information, the SGL
                            provides for a separate tracking system from
                            that which provides the status of
                            appropriation. Tracking is performed when
                            the agency

                            --   accepts a reimbursable work order,

                            --   obligates budget authority for the
                                 order, and

                            --   utilizes goods and services to fill the
                                 order.

                            The SGL provides separate accounts for each
                            of these events. They are listed below, with
                            item numbers corresponding to the events.


                  SGL
      Item        Account                                                         Normal
      Number      Number                  SGL Account Title                       Balance


        la         4220          Reimbursable Orders Accepted                         Cr.

        lb         4230          Unfilled Customer Orders--
                                 Unobligated                                          Dr.

        2          4240          Unfilled Customer Orders--
                                 Obligated                                            Dr.

        3          4250          Reimbursements and Other
                                 Income Earned                                        Dr.


                            Thus, the two tracks involved with budgetary
                            accounting for reimbursables can be set forth
                            as shown in the following tables.



    Page 6-5                GAO Accounting Guide:          September 1990
                            Appropriations and Reimbursables
CHAPTER 6:    BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




             Track 1:   Basic Budgetary Accounting Equation

      (R)                         (EN)       +            (C)

                                                 Budget Authority
Budget                                           Delegated,
Authority                 Budget                 Reserved,
Related to                Authority              and
Reimbursables             Not Apportioned        Expended

  Anticipated                Authority              1.   Apportionment
  Reimbursements             Available for               Available for
  and Other                  Apportionment               Distribution
  Income
                                                    2.   Allotments
                                                         Available for
                                                         Commitment/
                                                         Obligation

                                                    3.   Commitments
                                                         Available for
                                                         Obligation

                                                    4.   Undelivered
                                                         Orders

                                                    5.   Expended
                                                         Appropria-
                                                         tions




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Oe  CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




          Track 2:   "Completionr   Status" of Work Orders

                                           Status of Accepted Orders

                                                    (lb)
                                           Unfilled Customer Orders--
                                           Unobligated

                                           (reimbursable work orders
                                           with no obligations placed
                                           against them)



               (la)                                  (2)
        Reimbursable Orders                Unfilled Customer Orders--
        Accepted                           Obligated

                                           (the amount of undelivered
                                           orders placed to fill the
I                                          reimbursable work orders)

                                                      +

                                                     (3)
                                           Reimbursements and Other
                                           Income Earned

                                           (the amount of goods and
                                           services received to fill
                                           the reimbursable work
                                           orders)




    Page 6-7              GAO Accounting Guide:          September 1990
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CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




RELATIONSHIPS        The two tracks provide for separate
BETWEEN THE          accounting. Together they form an integral
TRACKS               part of accounting for reimbursables, though
                     certain items in each track are duplicative.
                     The accounting related to each track is
                     performed concurrently. Some comments on the
                     accounts and their relationship to each
                     other, as weLl as caveats on the method of
                     presentation used in this guide, are set
                     forth below.
                      1.   It has become common practice for budget
                           authority from anticipated reimbursable
                           orders to be both apportioned and
                           allotted.. This allows for orders to be
                           serviced when received without requiring
                           more frequent apportionment and allotment
                           actions based on the actual receipt of
                           orders which could delay filling them.
                           However, the account Reimbursable Orders
                           Accepted must be used as a controlling
                           account to assure that budget authority
                           is not exceeded.    Ultimately, expended
                           appropriations and undelivered orders
                           cannot exceed the authority from orders
                           actually received, regardless of the
                           amount anticipated. Care must be taken
                           that this control is exercised.

                      2.   It should be noted that the account
                           Unfilled Customer Orders--Obligated is
                           used only for the amount of obligations
                           placed against orders. It does not
                           represent: the amount of orders against
                           which obligations have been placed.
                           Thus, if $100 of orders are in the
                           process of being filled, but obligations
                           of only 1$60 have been placed against
                           them, the account Unfilled Customer
                           Orders--Obligated would have a balance of
                           $60 rather than the $100 of orders that


Page 6-8              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                               have some obligations against them. Note
                               that the account duplicates the function
                               of the Undelivered Orders account in
                               track 1.

                          3.   The word "income" in the account title
                               "Reimbursements and Other Income Earned"
                               suggests that the account is proprietary,
                               but the SGL intends for it to serve a
                               budgetary function. The SGL definition
                               for the account suggests that it be used
                               to record earned income, but that is not
                               the intention, based on information
                               provided by the SGL Board. Earned
                               income is accounted for on an accrual
                               basis through proprietary transactions
                               discussed in chapter 7. Reimbursements
                               and Other Income Earned is intended to
                               be used to record the amount of goods
                               of goods and services received for
                               reimbursable work. It duplicates the
                               the function of the Expended
                               Appropriations account in track 1.
                         Because of the caveats described above,
                         there are alternate approaches to the theory
                         and the related journal entries for some
                         transactions. We have chosen an approach
                         which revolves around the arithmetical
                         relationship between the two tracks of
                         information provided by the SGL, which we
                         believe to be the simplest method of
                         presentation. This method also has the
                         advantage of being parallel to the
                         presentation of budgetary accounting for
                         appropriations in chapter 2. Note that the
                         equation on which track 1 in this chapter is
                         based is essentially the same as the basic
                         budgetary accounting equation in chapter 2.
                         The principal disadvantage of the 2-track
                         method of presentation is the relating of
                         Anticipated Reimbursements and Other Income


    Page 6-9             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                     to the status of appropriation items, as
                     shown in the track 1 equation on p. 6-6.

                     Notwithstanding that equation, for fund
                     control purposes it is critical that
                     undelivered orders and expended
                     appropriations related to reimbursables do
                     not exceed the amount of reimbursable orders
                     actually accepted. Because the SGL assigns
                     "Reimbursable Orders Accepted" a credit
                     balance and provides for that balance to
                     equate to the sum of the items set forth in
                     our track 2 equation on p. 6-7, that control
                     is not apparent. However, for fund control
                     purposes relating to reimbursable work
                     accounting, readers should view the account
                     "Reimbursable Orders Accepted" as equivalent
                     to the debit balance account "Other
                     Appropriations Realized" discussed and
                     illustrated in chapter 2.

                     We are working with the Standard General
                     Ledger Board to simplify accounting for
                                                                      0
                     reimbursables and eliminate entries which
                     create accounts with duplicate functions.
                     The appendix to this chapter sets forth an
                     alternate model for consideration by the
                     group. At this writing, the model has not
                     yet been sanctioned by the task force. Until
                     such time as a decision on implementation is
                     reached, agencies should use the entries
                     presented in the body of this chapter, or
                     equivalent entries which utilize existing SGL
                     accounts and provide the same end result.
                     The entries in this chapter are used as the
                     basis for our comprehensive illustrations in
                     chapter 8.




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                      Appropriations and Reimbursables                W
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




    BASIC                Journal entries for four transactions are
    TRANSACTIONS         required to perform the "completion status"
    FOR TRACKING         tracking (track 2), discussed in the
    THE STATUS OF        preceding section. Required entries for
    WORK ORDERS          each of the tracking systems are set forth in
                         this section.

                                                     (1)
                          6-1   To record estimated budget authority
                                from reimbursable work orders:

                         Anticipated Reimbursements and Other Income
                            Authority Available for Apportionment

                                             *   *    *    *   *


                                                     (2)

                          6-2   To record acceptance of a reimbursable
                                work order:

                         Unfilled Customer Orders--Unobligated
                            Reimbursable Orders Accepted
                                             *   *   **        *



                                                     (3)

                          6-3   To record obligation of budget
                                authority for a reimbursable work order:

                         Unfilled Customer Orders--Obligated
                            Unfilled Customer Orders--Unobligated
                                             *   *    *    *   *




    Page 6-11            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                                            (4)

                     6-4    To record receipt of goods and services
                            for filling a reimbursable work order:

                     Unfilled Customer Orders--Obligated
                        Reimbursements and Other Income Earned




ILLUSTRATION--       The following illustrates the track 1 and
ACCOUNTING FOR       track 2 entries necessary to account for
BASIC TRANSACTIONS   reimbursable work performed for one agency
                     by another as, recorded on the books of the
                     agency performing the work.

                                            (1)

                     Two agencies enter into an agreement for one
                     to perform $1.00 of work for the other.

                     Track 1 entry

                      6-1   Anticipated Reimbursements
                            and Other Income                 100
                               Authority Available
                               for Apportionment                   100




                     Track 2 entry:

                     None




Page 6-12            GAO Accounting Guide:          September 1990
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.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                                                (2)

                         The $100 is apportioned by OMB.

                         Track 1. entry

                          2-2   Authority Available
                                for Apportionment                100
                                   Apportionment Available
                                   for Distribution                    100



                         Track 2 entry

                         None

                                                (3)
                          $90 is allotted by the agency head.2




                          2
                          It is the practice of some agencies to allot
                         the entire amount of anticipated orders to
                         avoid having to seek additional allotment
                         authority when orders are received. However,
                         as cautioned earlier, the amount of
                         undelivered orders and expended authority
                         relating to reimbursables must not exceed the
                         amount of orders actually received. The
                         amount of orders received is maintained in
                         the account Reimbursable Orders Accepted, and
                         agency accounting systems should implement
                         controls which help to avoid overobligating
                         or overexpending the reimbursable authority
                         related to orders received.


    Page 6-13            GAO Accounting Guide:         September 1990
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CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                     Track 1 entry

                      2-3   Apportionment Available
                            for Distribution                  90
                               Allotments Available for
                               Commitment/Obligation               90



                     Track 2 entry

                     None


                                            (4)

                      $90 of work orders are received and accepted.

                      Track 1 entry

                     None



                      Track 2 entry

                      6-2   Unfilled Customer Orders--
                            Unobligated                       90
                               Reimbursable Orders Accepted        90



                                            (5)

                      Commitments for $70 of goods and services are
                      made to fill reimbursable work orders.

                      Track 1 entry

                      2-4   Allotments Available for
                            Commitment/Obligation             70
                               Commitments Available
                               for obligation                      70




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.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                         Track 2 entry:

                         None '(Note that track 2 does not provide for
                         commitment accounting.)


                                               (6)

                         Purchase orders totaling $68 were prepared to
                         fulfill commitments which had been estimated
                         at $60. Assume that the estimates made when
                         the commitments were made proved to be too
                         low.

                         Track 1 entry

                         2-5   Commitments Available
                               for Obligation                   60
                               Allotments Available for
                               Commitment/Obligation             8
                                  Undelivered Orders                  68



                         Track 2 entry

                         6-3   Unfilled Customer Orders--
                               Obligated                        68
                                  Unfilled Customer Orders--
                                  Unobligated                         68



                                               (7)

                         Goods and services of $55 are received for
                         $57 of the undelivered orders previously
                         obligated.




    Page 6-15            GAO Accounting Guide:          September 1990
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CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                     Track 1 entry:

                     2-6    Undelivered Orders              57
                               Allotments Available for
                               Commitment/Obligation              2
                               Expended Appropriations           55

                     (Note that accounts receivable related to the
                     billings for completed orders is handled
                     through proprietary accounting, which is
                     discussed in chapter 7.)



                     Track 2 entry

                      6-4   Reimbursements and
                            Other Income Earned             55
                            Unfilled Customer Orders--
                            Unobligated                      2
                               Unfilled Customer Orders--
                               Obligated                           57



                     At this point, a trial balance of accounts
                     appears as shDwn on the next page. Letter
                     references are given to each account to
                     facilitate subsequent interpretation of the
                     accounts.




Page 6-16            GAO Accounting Guide:          September 1990
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S   CHAPTER 6:     BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                          Illustrative Federal Agency
                                 Trial Balance
                   Date Preceding Transactions Are Completed

                                                         Acct. Balance
     Key               Account Name                       Dr.      Cr.

     (a)   Anticipated Reimbursements and Other Income   $100
     (b)   Authority Available for Apportionment                 $      0
     (c)   Apportionment Available for Distribution                    10
     (d)   Allotments Available for Commitment/
           Obligation                                                  14
     (e)   Commitments Available for Obligation                        10
     (f)   Undelivered Orders                                          11
     (g)   Expended Appropriations                                     55
     (h)   Reimbursable Orders Accepted                                90
     (i)   Unfilled Customer Orders--Unobligated           24
     (j)   Unfilled Customer Orders--Obligated             11
     (k)   Reimbursements and Other Income Earned          55

l          Total                                         $190        $190


     Note that accounts (a) through (g) are track 1 accounts and
     accounts (h) through (k) are track 2 accounts.


                            From this trial balance, the following
                            information can be derived regarding the two
                            self-balancing tracks involved. Explanations
                            are keyed to the letter references for each
                            account in the trial balance.

                            Track 1

                            Of the budgetary authority provided by the
                            $100 in reimbursable work (a),




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CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                     --    all has been apportioned (b);

                     --    $10 of the! apportionment has not yet been
                           allotted (c);

                     --    $14 has been allotted but has no
                           commitments or obligations yet made
                           against it (d);

                     --    $10 in commitments have been made, but no
                           related orders for goods or services have
                           yet been placed (e);

                     --    $11 of orders for goods and services have
                           been placed but have not yet been received
                           (f); and

                     --    $55 in orders for goods and services have
                           been received (g).
                     Track 2
                     Of the $90 in reimbursable work orders which
                     have been accepted (h),
                      --   $24 of the orders, have no obligations yet
                           placed against them (i),

                      --   $11 of the orders have undelivered orders
                           for goods and services placed against them
                           (j), and

                      --   $55 in goods and services related to
                           filling the orders have been received (k).




Page 6-18            GAO Accounting Guide:          September 1990
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    CLOSING ENTRIES       Often, reimbursable budget authority is not
    WHEN REIMBURSABLE     fully expended at fiscal year-end. Some
    BUDGET AUTHORITY      orders may be in the process of being
    IS NOT FULLY          filled, while others may not yet have been
    EXPENDED:             started.  In such an instance, closing
    UNOBLIGATED           entries depend on the extent to which the
    AUTHORITY EXPIRES     unexpended authority expires, which in turn
                          depends on the statutory authority underlying
                          the reimbursable agreement(s) involved.

                          In this chapter, we will present the more
                          usual situation in which unexpended authority
                          that has not been obligated by the performing
                          agency expires at fiscal year-end.

                          If the legislation relevant to an interagency
                          agreement provides that reimbursable budget
                          authority that has not been expended or
                          obligated at fiscal year-end expires, the
                          steps taken to close the budgetary accounts
                          are similar to those taken for an annual
                          appropriation. (See chapter 2.)   Five
                          entries are required to close the track 1
                          accounts.

                          Step 1:     Remove expired authority from the
                          books

                                                       (1)

                          6-5    To remove unobligated commitments from
                                 the accounts:

                          Commitments Available for Obligation
                             Allotments Available for
                                Commitment/Obligation

                          The effect of this entry is to transfer
                          commitments of authority back to the
                          allotment account against which the
                          commitments had been placed.

                                               *   *    *    *   *




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                                                (2)

                      6-6   To remove unused allotment authority
                            from the accounts:

                     Allotments Available for
                     Commitment/Obligation
                        Apportionment Available for Distribution

                     The effect of this entry is to close the
                     allotment account and restore its balance to
                     the apportionment.



                                                (3)
                      6-7   To remove the apportionment authority
                            from the books:

                     Apportionment Available for Distribution
                        Authority Available for Apportionment

                     The effect of this entry is to close the
                     apportionment account and restore expired
                     apportionment authority to the original
                     budget authority account.

                     At this point., the balance in the account
                     Authority Available for Apportionment is the
                     sum of expired commitments, allotments, and
                     apportionments. These are the components of
                     the amount of budget authority which has
                     expired.
                                        *   *    *    *   *


                                                (4)

                      6-8   To close the authority available for
                            apportionment against the anticipated
                            reimbursement authority:



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                         Authority Available for Apportionment
                            Anticipated Reimbursements and Other
                                Income

                          The effect of this entry is to close the
                          authority available for apportionment and
                          reduce the anticipated reimbursements and
                          other income account by the amount of expired
                          budget authority.



                          At this point, the remaining track 1 acco~unt
                          balances have the following relationship:


     Anticipated Reimbursements              Expended           Undelivered
     and Other Income                    =   Appropriations +   Orders


                          Step 2: Remove expended appropriation
                          authority

                                                        (5)

                          6-9    To remove expended appropriations from
                                 the accounts:

                          Expended Appropriations
                             Anticipated Reimbursements and
                             Other Income




                          3Recall from p. 6-10 that notwithstanding the
                          arithmetical relationship of this track of
                          information, the controlling account which
                          must be used to help assure available
                          authority is not overspent is Reimbursable
                          Orders Accepted.

    Page 6-21             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                      The effect of this entry is to close the
                      Expended Appropriations account and reduce
                      the Anticipated Reimbursements and Other
                      Income account by the amount of expended
                      appropriations.



                     After entry 6-9 is made, the remaining
                     accounts have this relationship:


     Anticipated Reimbursements             Undelivered
     and Other Income                =      Orders


                     Note that no accounts are used to establish
                     an amount to be returned to Treasury, as was
                     the case with closing entries for an
                     operating appropriation (see p. 2-18).
                     Through proprietary accounting, discussed in
                     chapter 7, any unused advance received by the
                     performing agency is returned to the
                     requesting agency. However, as the ultimate
                     budget authority source is the requesting
                     agency's appropriation, the requesting agency
                     reports on and returns to Treasury any
                     unobligated, unexpended budget authority
                     related to the interagency agreement.




                     4Note that while this maintains the
                     arithmetical relationship of track 1, for
                     fund control purposes the account
                     "Reimbursable Orders Accepted," from track 2,
                     is the controlling account for Undelivered
                     Orders. After entries 6-10 and 6-11 are
                     made, the balance of Reimbursable Orders
                     Accepted equaLls the balance of the account
                     "Unfilled Customer Orders--Obligated."


Page 6-22            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                          In addition to the track 1 closing entries
                          illustrated above, the two following entries
                          are necessary to close the track 2 accounts.

                                                     (6)

                          6-10   To remove orders which have no goods
                                 and services related to them ordered or
                                 received:

                          Reimbursable Orders Accepted
                             Unfilled Customer Orders--Unobligated

                          The effect of this entry is to close the
                          Unfilled Customer Orders--Unobligated account
                          and reduce the Reimbursable Orders Accepted
                          account by the amount of the balance that was
                          in Unfilled Customer Orders--Unobligated.
                                             *   *   *     *   *


                                                     (7)

                          6-11   To remove completed orders from the
                                 books:

                          Reimbursable Orders Accepted
                             Reimbursements and Other Income Earned

                          The effect of this entry is to close the
                          Reimbursements and Other Income Earned
                          account and reduce the Reimbursable Orders
                          Accepted account by the amount of the balance
                          that was in Reimbursements and Other Income
                          Earned.
                                             *   *   *     *   *


                          After entries 6-10 and 6-11 have been posted,
                          the following relationship exists.




0   Page 6-23             GAO Accounting Guide:
                         Appropriations and Reimbursables
                                                                   September 1990
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




       Reimbursable                       Unfilled Customer
       Orders Accepted          =         Orders--Obligated



Illustration--        An example, relating to the trial balance on
Closing Entries       p. 6-17, of closing entries under the
When Reimbursable     requirement that unobligated budget
Budget Authority      authority expires are set forth in this
Is Not                section. First, the track 1 accounts are
Fully Expended:       closed, with the following five entries:
Unobligated
Authority Expires                           (1)
                      6-5   To remove unobligated commitments from
                            the accounts:

                      Commitments Available for Obligation    10
                         Allotments Available for
                         Commitment/Obligation                       10


                                            (2)
                      6-6   To remove unused allotment authority
                            from the accounts:

                      Allotments Available for
                      Commitment/Obligation                   14
                         Apportionment Available
                         for Distribution                            14




Page 6-24             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                                                     (3)

                          6-7   To remove the apportionment authority
                                from the books:

                         Apportionment Available
                         for Distribution                               34
                            Authority Available
                            for Apportionment                                34



                                                     (4)

                          6-8   To close the authority available for
                                apportionment against the appropriation:

                         Authority Available
                         for Apportionment                              34
                            Anticipated Reimbursements
                            and Other Income                                 34

                         The effect of this entry is to close
                         Authority Available for Apportionment and
                         reduce Anticipated Reimbursements and Other
                         Income by the amount of expired budget
                         authority.



                         Note that at this point the remaining
                         track 1 account balances have the following
                         relationship.



    Anticipated Reimbursements               Expended           Undelivered
    and Other Income                     =   Appropriations +   Orders

           $66                                 $55                $11




    Page 6-25            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                                                  (5)

                      6-9    To remove expended appropriations from
                             the accounts:

                      Expended Appropriations                   55
                         Anticipated Reimbursements
                         and Other Income                             55



                     Next, the two Track 2 closing entries are
                     made, as shown below.

                                                  (6)

                      6-10   To remove unobligated orders from the
                             books:

                      Reimbursable Orders Accepted              24
                         Unfilled Customer Orders--
                         Unobligated                                  24



                                                  (7)

                      6-11    To remove completed orders from the
                              books:

                      Reimbursable Orders Accepted              55
                         Reimbursements and
                         Other Income Earned                          55

                                          *   *    *    *   *




Page 6-26             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables                     W
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                          A trial balance taken after closing would
                          appear as follows.


                         Illustrative Federal Agency
                         After-Closing Trial Balance
                            of Budgetary Accounts
                            September 30, (Year)

                                                       Account Balance
     Account Name                                       Dr.        Cr.

    Anticipated Reimbursements and Other Income         $11
    Reimbursable Orders Accepted                                  $11
    Unfilled Customer Orders--Obligated                  11
    Undelivered Orders                                               11

                                                        $22       $2



                          The after-closing trial balance indicates
                          that, at the start of the next fiscal year,
                          $11 of goods and services are expected to be
                          received, and there is $11 of budget
                          author.ty through which to fund them.


    Closing Entries       At the end of the fiscal year, if all
    for Fully Expended    reimbursable budget authority has been used
    Reimbursable          and al: orders filled, then only the
    Authority             following budgetary accounts have balances:

                          --Anticipated Reimbursements and Other Income
                            (track 1),

                           --Expended Appropriations (track 1),

                          --Reimbursable Orders Accepted (track 2), and

                          --Reimbursements and Other Income Earned
                            (track 2).



    Page 6-27             GAO Accounting Guide:          September 1990
0                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                      Closing entries are as shown below. They are
                      numbered to correspond with comparable
                      entries in the next section.

                      Track 1 entry

                      6-9    Expended Appropriations
                                Anticipated Reimbursements and Other
                                Income



                      Track 2 entry

                      6-11   Reimbursable Orders Accepted
                                Reimbursements and Other Income
                                Earned



                      After these entries are made, all budgetary
                      accounts (for both tracks) are closed.



ENTRIES FOR           Just as with basic operating appropriations,
UNDELIVERED ORDERS    undelivered orders relating to reimbursable
RELATING TO           work in one year may be filled in the next
REIMBURSABLE WORK     year. As was the case for undelivered orders
THAT ARE              relating to the basic operating
FILLED IN THE         appropriation (see pp. 2-25 through 2-35),
SUCCEEDING YEAR       one of four situations might exist, as set
                      forth below. Assume, for each situation,
                      that $11 of undelivered orders related to
                      reimbursable work exists at fiscal year end,
                      as in the preceding example. Note that,
                      after each set of entries is made, all
                      budgetary accounts will be closed.




Page 6-28             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
S   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




    Situation 1--        If orders are cancelled, they must be
    The Orders Are       removed. from the books. This is accomplished
    Cancelled            with the following entry.

                         Track 1 entry

                          6-12   Undelivered Orders              11
                                    Anticipated Reimbursements
                                    and Other Income                  11



                         Track 2 entry

                          6-13   Reimbursable Orders Accepted    11
                                    Unfilled Customer Orders--
                                    Obligated                         11




    Situation 2--        If orders are received in the amount
    The Orders Are       estimated, they are accounted for in the
    Received in the      same manner as any other undelivered orders
    Amount Estimated     received, and the following entries are made:

                         Track 1 entry

                         2-5     Undelivered Orders              11
                                    Expended Appropriations           11


                         Track 2 entry

                         6-4     Reimbursements and Other
                                 Income Earned                   11
                                    Unfilled Customer Orders--
                                    Obligated                         11




    Page 6-29            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                     Then, Expended Appropriations is closed into
                     Anticipated Reimbursements and Other Income,
                     with the entry below.

                     Track 1 entrv

                      6-9    Expended Appropriations         11
                                Anticipated Reimbursements
                                and Other Income                  11



                     Then, the Reimbursements and Other Income
                     Earned account is closed into Reimbursable
                     Orders Accepted, with the entry below.

                     Track 2 entry

                      6-11   Reimbursable Orders Accepted    11
                                Reimbursements and Other
                                Income Earned                     11    @




Situation 3--        Assume that all orders are received, with
The Orders Are       $8 billed by vendors. The following entries
Received in an       are made to record this transaction.
Amount Less Than
Estimated            Track 1 entry

                      6-14   Undelivered Orders              11
                                Expended Appropriations             8
                                Anticipated Reimbursements
                                and Other Income                    3




Page 6-30            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                          Track :2 entry

                          6-15   Reimbursements and Other Income
                                 Earned                            8
                                 Reimbursable Orders Accepted      3
                                    Unfilled Customer Orders--
                                    Obligated                          11



                          The Expended Appropriations and Anticipated
                          Reimbursements and Other Income accounts are
                          then closed with the following entry.

                          Track 1 entry

                          6-9    Expended Appropriations           8
                                    Anticipated Reimbursements
                                    and Other Income                     8



                          Then, the Reimbursable Orders Accepted and
                          Reimbursements and Other Income accounts are
                          closed as follows.

                          Track 2 entry

                          6-11   Reimbursable Orders Accepted      8
                                    Reimbursements and Other
                                    Income Earned                        8

                                             *   *   **   *


                          Note that related billings to the agency for
                          which work was being performed would have to
                          be reduced by $3 through proprietary entries
                          discussed in chapter 7.




    Page 6-31             GAO Accounting Guide:         September 1990
0                         Appropriations and Reimbursables
CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




Situation 4--        Assume that all orders were received, with
The Orders Are       vendors billing $12, and that the additional
Received in an       $1 in budget authority needed is available
Amount Greater       from the agency for which work is being
Than Estimated       performed. (If it were not, prices would
                     have to be renegotiated with the vendor or
                     the agency for which work is being performed
                     would have to seek additional authority from
                     the Congress.)

                     First, the receipt of goods and services
                     would be recorded, with the following
                     entries.

                     Track 1 entry

                      6-16   Undelivered Orders                11
                             Anticipated Reimbursements and
                             Other Income                      1
                                Expended Appropriations             12   @


                     Track 2 entry
                      6-17   Reimbursements and Other Income
                             Earned                            12
                                Reimbursable Orders Accepted         I
                                Unfilled Customer Orders--
                                Obligated                           11



                     Then, the Expended Appropriations account
                     would be closed, as follows.

                     Track 1 entry
                      6-9    Expended Appropriations           12
                                Anticipated Reimbursements
                                and Other Income                    12




Page 6-32            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK




                         Then, the Reimbursable Orders Accepted and
                         Reimbursements and Other Income accounts are
                         closed with this entry:

                          Track :2 entry

                          6-11   Reimbursable Orders Accepted   12
                                    Reimbursements and Other
                                    Income Earned                    12



                         Note that, related billings to the agency for
                         which the work is being performed would have
                         to be increased by $1 through proprietary
                         entries in chapter 7.



    REPORTS REQUIRED      A number of external reporting requirements
    FOR REPORTING         are imposed on federal agencies by law and
    ON REIMBURSABLE       regulation. Principal reports are
    WORK PERFORMED        illustrated in chapter 8. The SGL provides
    UNDER INTERAGENCY     "crosswalks" which define the relationship
    AGREEMENT             between the transactions described in this
                          guide and standard external reports.

                          The crosswalk information is not repeated in
                          this publication. However, readers should be
                          aware of the existence and content of the
                          crosswalks in the SGL. By using them, it is
                          possible to determine, for each line of
                          standard external reporting forms, which
                          accounts are used. One can also look up an
                          account number and determine all of its
                          appearances in standard reports.




    Page 6-33            GAO Accounting Guide:          September 1990
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CHAPTER 6:   BUDGETARY ACCOUNTING FOR REIMBURSABLE WORK              0




                  (This page intentionally blank.)                   0




Page 6-34            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES



INTRODUCTION         The model for recording budgetary entries
                     relating to reimbursables presently in use in
                     the federal government is illustrated in the
                     body of this chapter. As set forth on
                     pp. 6-6 and 6-7, that model has two separate
                     but concurrent tracks of information, some of
                     which is duplicative between the two. A
                     simpler accounting model is under discussion
                     with the SGL Board. As of the date of this
                     document, no decisions on its implementation
                     have been reached and the model illustrated
                     in the body of this chapter and in the
                     comprehensive example in chapter 8 is in use.
                     The alternate model is described in this
                     appendix. All accounts required are already
                     in the SGL. One--Reimbursable Orders
                     Accepted--must have its normal balance
                     redesignated from credit to debit to
                     accommodate the required entries.

                     The following section of this appendix sets
                     forth the conceptual framework for recording
                     basic transactions under the alternate model.
                     The next one illustrates the transactions in
                     the body of chapter 6 according to the
                     alternate model. The final section provides
                     a crosswalk between the accounts used in the
                     present and alternate models.




Page 6-35            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES




CONCEPTUAL           The basic budgetary accounting equation for
FRAMEWORK FOR        reimbursable work set forth on p. 6-6
BUDGETARY            indicates the amount of budget authority
ACCOUNTING           provided through interagency work agreements
RELATED TO           is equal to the status of that authority as
REIMBURSABLES        it is delegated, obligated, and reserved.
                     For budgetary purposes, it is customary to
                     initially record the authority as the amount
                     of reimbursable work estimated to be
                     received. However, the actual amount which
                     can be obligated and expended cannot exceed
                     the amount of the reimbursable work orders
                     actually received. It is necessary, then, to
                     divide the budget authority related to
                     reimbursables between that expected to be
                     received and that actually received.

                     This division of accounting authority can be
                     accomplished by utilizing the accounts (1)
                     Anticipated Reimbursements and Other Income
                     and (2) Reimbursable Orders Accepted. The
                     first account represents the amount of budget
                     authority expected from reimbursable work
                     orders not yet received, while the second
                     represents the amount of budget authority
                     from reimbursable work orders already
                     received and accepted. The sum of those two
                     accounts represents thF total authority
                     received and expected.   The resulting
                     equation is:




                      Note that under the present model, discussed
                     in the body of chapter 6, the balance of
                     Anticipated Reimbursements and Other Income
                     represents total authority from reimbursable
                     work orders expected and received, even
                     though the account Reimbursable Orders
                     Accepted, representing the amount of work
                     orders actually received, is also used.


Page 6-36            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX TO CHAPTER 6:       ALTERNATE MODEL FOR BUDGETARY ENTRIES
                                 RELATING TO REIMBURSABLES




                                                                         Reimbursable
          Budget Authority        Anticipated Reimburse-                 Orders
          From Reimbursables =    ments and Other Income             +   Accepted


                            Thus, we can rewrite the basic accounting
                            equation for reimbursable work under
                            interagency agreements, using "R" to
                            designate budget authority from reimbursable
                            activities, as follows:


                 (R)        =            (B)               +              (C)

     Budget                     Budget authority               Apportionments,
     authority                  not apportioned                allotments,
     relating to reim-                                         commitments,

*    bursable work
     under interagency
     service agreements
                                                               obligations, and
                                                               expenditures of
                                                               the budget
                                                               authority
     --    still anticipated
     --    already received




    BASIC                   Under this alternate model, the recording
    TRANSACTIONS            of basic transactions is as shown below.
    RELATED TO              Note that there are no separate tracks and
    REIMBURSABLES           that many of the entries are the same as for
                            track 1 in the more elaborate model presented
                            in the body of this chapter.

                            6A-1    To record anticipated orders:

                            Anticipated Reimbursements and Other Income
                               Authority Available for Apportionment
                                                   * * *       * *




    Page 6-37               GAO Accounting Guide:          September 1990
                            Appropriations and Reimbursables
APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES



                     6A-2   To record apportionment of budget
                            authority:

                     Authority Available for Apportionment
                        Apportionment Available for Distribution
                                        i,   *   *   *   *


                     6A-3   To record allotment of budget
                            authority:

                     Apportionment Available for Distribution
                        Allotments Available for
                        Commitmen-:/Obligation

                                        *    *   *   *   *


                     6A-4   To record receipt of reimbursable
                            orders:

                     Reimbursable Orders Accepted
                        Anticipated Reimbursements and Other
                        Income
                                        *    *   *   *   *


                     6A-5   To record commitments for reimbursable
                            orders:

                     Allotments Available for
                     Commitment/Obligation
                        Commitments Available for Obligation



                     6A-6   To record purchase orders for goods and
                            services committed:

                     Commitments Available for Obligation
                        Undelivered Orders




Page 6-38            GAO Accounting Guide:          September 1990    0
                     Appropriations and Reimbursables
.   APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                         6A-7   To record receipt of goods and services
                                ordered:

                         Undelivered Orders
                            Expended Appropriations



                         Note that accounting for the status of
                         reimbursable authority is the same as
                         accounting for the status of appropriation
                         authority, which is discussed in chapter 2.
                         Entries 6A-2, 6A-3, 6A-5, 6A-6, and 6A-7 are
                         the same as chapter 2 entries 2-2, 2-3, 2-4,
                         2-5 and 2-6, respectively (see p. 2-7).



    ILLUSTRATION--       The following transactions are the same as
    BASIC                those presented in the body of chapter 6.
    TRANSACTIONS         The journal entries, however, are based on
    RELATED TO           the model presented above. The entries are
    REIMBURSABLES        made on the books of the agency performing
                         the work.

                                               (1)

                         Two agencies enter into an agreement for one
                         to perform $100 of work for the other.

                         6A-1   Anticipated Reimbursements
                                and Other Income               100
                                   Authority Available
                                   for Apportionment                 100




    Page 6-39            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES



                                                (2)

                     The $100 is apportioned by OMB.

                     6A-2   Authority Available
                            for Apportionment                 100
                               Apportionment Available
                               for Distribution                     100
                                        ,   *    *    *   *


                                                (3)

                     $90 is allotted by the agency head.

                     6A-3   Apportionment Available
                            for Distribution                   90
                               Allotments Available for
                               Commitment/Obligation                 90

                                        *   *    *    *   *


                                                (4)

                     $90 of reimbursable work orders are received
                     and accepted.

                     6A-4   Reimbursable Orders Accepted       90
                               Anticipated Reimbursements
                               and Other Income Earned               90

                     Note that at this point the balance of
                     Reimbursable Orders Accepted, $90, plus the
                     balance of Anticipated Reimbursements and
                     Other Income Earned, $10, account for the
                     total $100 of authority originally
                     anticipated.




Page 6-40            GAO Accounting Guide:          September 1990
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O   APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                                                     (5)

                         Commitments for $70 of goods and services are
                         made to fill reimbursable work orders.

                         6A-5   Allotments Available for
                                Commitment/Obligation              70
                                   Commitments Available
                                   for Obligation                       70



                                                     (6)

                         Purchase orders totaling $68 were prepared to
                         fulfill commitments which had been estimated
                         at $60. Assume that the estimates made when
                         making the commitments proved to be too low.

                         6A-6   Commitments Available
                                for Obligation                     60
                                Allotments Available for
                                Commitment/Obligation               8
                                   Undelivered Orders                   68

                                            *   **         *   *


                                                     (7)

                         Goods and services of $55 are received for
                         $57 of the undelivered orders previously
                         obligated.

                         6A-7   Undelivered Orders                 57
                                   Allotments Available for
                                   Commitment/Obligation                 2
                                   Expended Appropriations              55

                         Note that accounts receivable related to the
                         billings for completed orders is handled
                         through proprietary accounting, discussed in
                         chapter 7.
                                            *   *    *     *   *




.   Page 6-41            GAO Accounting Guide:          September 1990
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APPENDIX TO CHAPTER 6:       ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                        At this point, a trial balance of accounts
                        would appear as shown below. Letters are
                        given by each account to facilitate
                        subsequent interpretation of the accounts.



                       Illustrative Federal Agency
                   Trial Balance of liudgetary Accounts
               (Date Preceding Transactions Are ComDleted)

                                                       Account Bal.
Key                 Account Name                       Dr.      Cr.

 (a) Anticipated Reimbursements and Other Income      $ 10
 (b) Reimbursable Orders AcceptecL                      90
 (c) Authority Available for Apportionment                       $      0
 (d) Apportionment Available for Distribution                          10
 (e) Allotments Available for Commitment/
     Obligation                                                        14
 (f) Commitments Available for Obligation                              10
 (g) Undelivered Orders                                                11
 (h) Expended Appropriations                                           55

       Total                                          $100           $100



                        From this trial balance, the following
                        information can be derived.  (Explanations
                        are keyed to the letter references for each
                        account in the trial balance.)

                        Of the $100 in reimbursable work,

                        --   $10 is still anticipated (a), and

                        --   $90 of the work has already been received
                             (b).

                        In addition, the accounts tell us that, of
                        that $100,




Page 6-42               GAO Accounting Guide:          September 1990
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.   APPENDIX TO CHAPTER 6:    ALTERNATE MODEL FOR BUDGETARY ENTRIES
                              RELATING TO REIMBURSABLES



                         --   all has been apportioned (c),

                         --   $10 of the apportionment has not yet been
                              allotted (d),

                         --   $14 has been allotted but has no
                              commitments or obligations yet placed
                              against it (e),

                         --   $10 in commitments have been made, but no
                              related orders for goods or services have
                              yet been placed (f),

                         --   $11 of orders for goods and services have
                              been placed but have not yet been received
                              (g), and

                         --   $55 in orders for goods and services have
                              been received (h).



    CLOSING ENTRIES      At the end of the fiscal year, if all
    FOR FULLY EXPENDED   reimbursable budget authority has been used
    REIMBURSABLE         and all orders filled, then only the
    AUTHORITY            following budgetary accounts have balances:

                         --   Reimbursable Orders Accepted and

                         --   Expended Appropriations.

                         The single closing entry required is shown
                         below, numbered to correspond with its
                         counterpart in the next section.

                         6A-9    Expended Appropriations
                                   Reimbursable Orders Accepted



                         After the entry is made, all budgetary
                         accounl:s will be closed.




O   Page 6-43            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES




CLOSING ENTRIES      Often, reimbursable budget authority is not
WHEN REIMBURSABLE    fully expended at fiscal year-end. Some
BUDGET AUTHORITY     orders will be in the process of being
IS NOT FULLY         filled, and work on others may not yet have
EXPENDED:            been started. In that instance, closing
UNOBLIGATED          entries depend on the extent to which the
AUTHORITY EXPIRES    unexpended authority expires, which is in
                     turn dependent upon the statutory authority
                     underlying the reimbursable agreement(s)
                     involved. In this publication, we present
                     the more usual situation in which unexpended
                     authority that has not been obligated by the
                     performing agency expires at fiscal year-end.

                     If an agency enters into an interagency
                     agreement based upon legislation that
                     provides that budget authority that is
                     unexpended or unobligated at fiscal year-end
                     expires, the steps taken to close the
                     budgetary accounts are similar to those for
                     an annual appropriation, discussed in
                     chapter 2.  Five entries are required to
                     close the accounts:

                     Step 1:   Remove expired authority from the
                     books

                                           (1)

                     6A-5   To remove unobligated commitments from
                            the accounts:

                     Commitments Available for Obligation
                        Allotments Available for
                        Commitment/Obligation

                     The effect of this entry is to transfer
                     commitments of authority back to the
                     allotment account, against which the
                     commitments had been placed.




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.   APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                                               (2)

                         6A-6   To remove unused allotment authority
                                from the accounts:

                         Allotments Available for
                         Commitment/Obligation
                            Apportionment Available for Distribution

                         The effect of this entry is to close the
                         allotment account and restore it to the
                         apportionment.



                                               (3)
                         6A-7   To remove the apportionment authority
                                from the books:

                         Apportionment Available for Distribution
                            Authority Available for Apportionment

                         The effect of this entry is to close the
                         apportionment account and restore expired
                         apportionment authority to the original
                         budget authority account.

                         At this point, the balance in the account
                         Authority Available for Apportionment is the
                         sum of expired commitments, allotments, and
                         apportionments. These are the components of
                         the amount of budget authority which has
                         expired.



                                               (4)

                         6A-8   To close the authority available for
                                apportionment against the anticipated
                                and actual reimbursement authority:



.   Page 6-45            GAO Accounting Guide:          September 1990
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APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIM13URSABLES


                      Authority Available for Apportionment
                         Anticipated Reimbursements and Other
                         Income
                         Reimbursable Orders Accepted

                      The effect of this entry is to close the
                      Authority Available for Apportionment and
                      reduce Anticipated Reimbursements and Other
                      Income. It also reduces Reimbursable Orders
                      Accepted by the amount that was not obligated
                      or expended.



                      At this point, the remaining account balances
                      have this relationship:


Reimbursable Orders            Expended               Undelivered
 Accepted                =    Appropriations      +   Orders


                      Step 2: Remove expended appropriation
                      authority

                                            (5)

                      6A-9   To remove expended appropriations from
                             the accounts:

                      Expended Appropriations
                         Reimbursable Orders Accepted

                      The effect of this entry is to close the
                      Expended Appropriations account and reduce
                      the Reimbursable Orders Accepted account by
                      the amount of expended appropriations.



                      After entry 6A-9 is made:


     Reimbursable Orders Accepted      =   Undelivered Orders



Page 6-46             GAO Accountinq Guide:          September 1990
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S   APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                         Note that no accounts are used to establish
                         an amount to be returned to Treasury, as is
                         the case with closing entries for an
                         operating appropriation. Through proprietary
                         accounting, discussed in chapter 7, any
                         unused advance received by the performing
                         agency will be returned to the requesting
                         agency.  However, as the ultimate budget
                         authority source is the requesting agency's
                         appropriation, the requesting agency will
                         report on and return any unobligated,
                         unexpended budget authority under the
                         interagency agreement to Treasury.



    ILLUSTRATION--       Closing entries for amounts in the trial
    CLOSING ENTRIES      balance on p. 6-42 are shown in this section.
    WHEN REIMBURSABLE
S   BUDGET AUTHORITY
    IS NOT FULLY
                                               (1)

    EXPENDED:            6A-5   To remove unobligated commitments
    UNOBLIGATED                 from the accounts:
    AUTHORITY EXPIRES
                         Commitments Available for Obligation    10
                            Allotments Available for
                             Commitment/Obligation                      10



                                               (2)

                         6A-6   'ro remove unused allotment authority
                                from the accounts:

                         Allotments Available for
                         Commitment/Obligation                   14
                            Apportionment Available
                            for Distribution                            14




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APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES



                                                (3)

                      6A-7       To remove the apportionment authority
                                 from the books:

                      Apportionment Available
                      for Distribution                            34
                         Authority Available
                         for Apportionment                              34



                                                 (4)

                      6A-8       To close the authority available for
                                 apportionment against the
                                 appropriation:

                      Authority Available
                      for Apportionment                           34
                         Anticipated Reimbursements
                         and Other Income                               10
                         Reimbursable Orders Accepted                   24

                      The effect of this entry is to (a) close the
                      Authority Available for Apportionment and the
                      Anticipated Reimbursements and Other Income
                      accounts and (b) reduce the balance of
                      Reimbursable Orders Accepted by the amount of
                      the orders which were not obligated and,
                      therefore, expire.



                      Note that at this point, the remaining
                      account balances have the following
                      relationship:


Reimbursable Orders                 Expended               Undelivered
Accepted                     =      Appropriations     +   Orders

            $66                           $55                  $11




Page 6-48             GAO Accounting Guide:         September 1990
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.   APPENDIX TO CHAPTER 6:   ALT1ERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES



                                               (5)

                         6A-9    ro remove expended appropriations from
                                the accounts:

                         Expended Appropriations                  55
                            Reimbursable Orders Accepted               55



                         A trial balance taken after closing would
                         consist of Reimbursable Orders Accepted, with
                         a debit balance of $11, and Undelivered
                         Orders, with a credit balance of that amount.
                         This indicates that, at the start of the next
                         fiscal year, the agency expects to receive
                         $11 of goods and services and there is $11 of
                         budget authority through which to fund them.



O   ENTRIES FOR
    UNDELIVERED ORDERS
                         Just as with basic operating appropriations,
                         undelivered orders relating to reimbursable
    RELATING TO          work in one year may be filled in the next
    REIMBURSABLE WORK    year. As was the case for undelivered orders
    FILLED IN THE        relating to the basic operating
    SUCCEEDING YEAR      appropriation (see pp. 2-25 through 2-35),
                         one of four situations might exist, as set
                         forth below. For each situation assume that
                         $11 of undelivered orders related to
                         reimbursable work exists at fiscal year end,
                         as in the preceding example. Note that after
                         each set of entries is made, all budgetary
                         accounts will be closed.


    Situation 1--        If orders are cancelled, they must be
    The Orders Are       removed from the books. This is accomplished
    Cancelled            with the following entry:

                         6A-8   Undelivered Orders                11
                                   Reimbursable Orders Accepted        11




    Page 6-49            GAO Accounting Guide:          September 1990
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APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING TO REIMBURSABLES




Situation 2--        If orders are received in the amount
The Orders Are       estimated, they are accounted for in the
Received in the      same manner as any other undelivered orders
Amount Estimated     received, and this entry is made:

                     6A-7    Undelivered Orders                11
                                Expended Appropriations                 11



                     Then, the Expended Appropriations is closed
                     into Reimbursable Orders Accepted, with this
                     entry.

                     6A-9    Expended Appropriations             11
                               Reimbursable Orders Accepted             11

                                       *   *   *   *   *



Situation 3--        Assume that the agency receives all orders
The Orders Are       and is billed $8 by vendors. The following
Received in an       entry is made to record the transaction:
Amount Less Than
Estimated            6A-10   Undelivered Orders                  11
                                Expended Appropriations                  8
                                Reimbursable Orders Accepted             3



                     The Expended Appropriations and Reimbursable
                     Orders Accepted accounts are then closed with
                     this entry:

                     6A-9    Expended Appropriations                8
                               Reimbursable Orders Accepted              8



                     Note that related billings to the agency for
                     which work was being performed would have to
                     be reduced by $3 through proprietary entries
                     discussed in chapter 7.


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.   APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                             RELATING TO REIMBURSABLES




    Situation 4--        Assume that the agency receives all orders
    The Orders Are       and is billed $12. Assume further that the
    Received in an       agency for which work is being performed has
    Amount Greater       the additional $1 of budget authority
    Than Estimated       necessary. (If it did not, prices would have
                         to be renegotiated with the vendor or the
                         agency for which work is being performed
                         would have to seek additional authority from
                         Congress.)

                         First, the receipt of goods and services
                         would be recorded, with these entries:

                         6A-ll   Undelivered Orders               11
                                 Reimbursable Orders Accepted      1
                                    Expended Appropriations            12


                         Then, the Expended Appropriations and
                         Reimbursable Orders Accepted accounts are
                         closed, as follows:

                         6A-9    Expended Appropriations          12
                                   Reimbursable Orders Accepted        12



                         Note that related billings to the agency for
                         which the work is being performed would have
                         to be increased by $1 through proprietary
                         entries in chapter 7.



    CROSSWALK OF         The relationship between accounts in the
    ACCOUNTS BETWEEN     present recording method described in the
    THE TWO METHODS      body of this chapter and the proposed method
                         described in this appendix are set forth in
                         the following tables. All accounts necessary
                         for reporting to Treasury and OMB are
                         contained in the proposed method.


.   Page 6-51            GAO Accounting Guide:          September 1990
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APPENDIX TO CHAPTER 6:   ALTERNATE MODEL FOR BUDGETARY ENTRIES
                         RELATING ro REIMBURSABLES




        Crosswalk from Track 1 Accounts in Present Model
                 to Accounts in Alternate Model
Account in                        Comparable Account(s)
Present Model                     Ln Alternate Model

Anticipated Reimbursements        Anticipated Reimbursements and
and Other Income                  Other Income plus Reimbursable
                                  Orders Accepted

Authority Available for           Same
Apportionment

Apportionment Available           Same
for Distribution

Allotments Available for          Same
Commitment/Obligation

Commitments Available for         Same
Obligation
Undelivered Orders                Same

 Expended Appropriations          Same




Page 6-52            GAO Accounting Guide:          September 1990
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.   APPENDIX TO CHAPTER 6:    ALTERNATE MODEL FOR BUDGETARY ENTRIES
                              RELATING TO REIMBURSABLES




            Crosswalk from Track 2 Accounts in Present Model
                     to Accounts in Alternate Model

     Account in                        Comparable Account(s)
     Present Model                     in Alternate Model

     Reimbursable Orders               Same (but note that normal
     Accepted                          balance is debit rather than
                                       credit)

     Unfilled Customer Orders          Reimbursable Orders Accepted
     --Unobligated                     less Undelivered Orders

     Unfilled Customer Orders          Undelivered Orders
     --Obligated

     Reimbursements and Other          Expended Appropriations
     Income Earned




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                         RELATING TO REIMBURSABLES




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CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




INTRODUCTION         As discussed in chapter 6, some agencies
                     perform reimbursable work for others in
                     addition to performing their own operations.
                     Most reimbursable agreements are for the
                     performance of services, as opposed to the
                     production of goods. Often, for example,
                     small agencies or temporary commissions are
                     established under laws providing that a
                     larger agency will provide administrative
                     services relating to procurement, personnel,
                     and payments to employees, vendors, and
                     others. Sometimes, one agency operates a
                     payroll system that processes payroll for
                     several agencies.
                     In addition, agencies occasionally make
                     products for other agencies under a
                     reimbursable work agreement. Usually, such
                     production activities are performed through
                     revolving funds rather than as adjuncts to
                     basic operating appropriations. Accounting
                     for revolving funds is beyond the scope of
                     this publication. Accounting for products
                     made for other agencies as adjuncts to basic
                     appropriated activities is discussed here.

                     The remainder of this chapter is divided into
                     three sections treating (1) the conceptual
                     framework for reimbursable accounting, (2)
                     accounting for services under reimbursable
                     agreements, and (3) accounting for products
                     under reimbursable agreements. Chapter 8
                     provides an illustration of accounting for
                     reimbursable service work and integrates it
                     with the comprehensive illustration for
                     appropriation accounting presented in
                     chapter 4.


Page 7-1             GAO Accounting Guide:          September 1990
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CHAPTER 7:    PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




CONCEPTUAL            Basic SGL accounts provided for recording
FRAMEWORK FOR         reimbursable work transactions that have not
REIMBURSABLE          been introduced previously in this
ACCOUNTING            publication include the following.


SGL
Account                  SGL Account Title              Normal
Number                                                  Balance

  1110       Undeposited Collections                         Dr.
  1530       Inventory--Raw Materials and Supplies           Dr.
  1540       Inventory--Work in Process                      Dr.
  1550       Inventory--Finished Goods                       Dr.
  2310       Advances From Others                            Cr.
  5100       Revenue From Goods Sold                         Cr.
  5200       Revenue From Services Provided                  Cr.
  6500       Cost of Goods Sold                              Dr.
  6600       Applied Overhead
                           a
                                                             Cr.
  6900       Other Expenses                                  Dr.

  The Standard General Ledger does not provide an account to
  accumulate expenses related to reimbursable work except for
  that related to a product, as opposed to a service. We are
  using account 6900, "Other Expenses," to accumulate such
  expenses related to reimbursable service work. As with the
  Operating/Program Expense account, "Other Expenses" is a
  control account and must be supported with a subsidiary ledger
  detailing the individual expenses involved.


The recording framework is the same as described in chapter 3.
The accounts in the list above fit into the basic accounting
equation discussed in chapter 3 in the following manner.




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.   CHAPTER 7:       PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




       ASSETS    =     LIABILITIES   +    EQUITY OF THE
                                         U.S. GOVERNMENT
       1110                2310
       1530
       1540
       1550

                         Appropriated      Invested       Results of
                         Capital           Capital        Operations


                                                          Cumulative
                                                          Results of
                                                          Operations

                                                               I
                                                Net Results of Operations



                                         Financing Sources,        Expenses
                                         Revenues, and Gains         and
                                                                    Losses

                                              5100                     6500
                                              5200                     6600
                                                                       6900




    ACCOUNTING FOR            Basic entries to account for reimbursable
    SERVICES UNDER            services are much like those for a private
    REIMBURSABLE              sector firm providing the services. Key
    AGREEMENTS                entries follow.




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CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                                                 (1)

                     7-1    To record receipt of an advance for
                            reimbursable work to be performed along
                            with a procurement order to perform the
                            work:

                     Undeposited Collections
                        Advances From Others

                     If a check is received but the funds are not
                     yet deposited with the Treasury, the money is
                     not considered to be part of Fund Balance
                     With Treasury until the check is deposited.
                     The "Undeposited Collections" account is used
                     to record funds on hand or funds in the
                     process of being deposited.



                                                 (2)

                      7-2   To accept the order and deposit the
                            monies (or receive confirmation of a
                            transfer of funds) with Treasury:

                      Fund Balance With Treasury
                         Undeposited Collections

                     Note that, :Lf the work order had not been
                     accepted, entry 1 would be reversed, and no
                     further transactions would be recorded.

                                         *   *    *    *   *


                                                 (3)

                      7-3   To pay for agency operating expenses,
                            some of which will later be used for
                            reimbursable work:

                     Operating/Program Expenses
                        Fund Balance With Treasury



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.   CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                          (Allocations to reimbursable work are made in
                         entry 6, below.)



                                                (4)

                         To record depreciation expense and
                         consumption of supplies, a portion of which
                         will later be allocated to reimbursable work:

                          7-4   Operating/Program Expenses
                                   Accumulated Depreciation on Equipment
                                   Inventory for Agency Operations

                                               and

                          7-5   Capital Investments
                                   Appropriated Capital Used



                                                (5)

                          7-6   To allocate agency expenses other than
                                depreciation and supplies used to the
                                Other Expenses account when the goods
                                and services involved are used in
                                support of reimbursable work:

                         Other Expenses
                            Operating/Program Expenses



                                                (6)

                         To allocate agency expenses for depreciation
                         and supplies used that were initially funded
                         by an appropriation but are chargeable
                         against reimbursable activities to the Other
                         Expenses account:



.   Page 7-5             GAO Accounting Guide:          September 1990
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CHAPTER 7:   PROPRIETARY ACCOUNTING; FOR REIMBURSABLE WORK




                      7-6   Other Expenses
                               Operating/Program Expenses

                                           and

                      7-7   Appropriated Capital Used
                               Appropriated Capital

                      Entry 7-7 must be made because the financing
                      source used :Ls not an appropriation but,
                      rather, the revenue from the reimbursable
                      transactions., Hence, the amount allocated to
                      reimbursable transactions must be placed back
                      in the Appropriated Capital account.



                      To illustrate this, assume that an agency
                      purchases $100 of supplies, some of which
                      will be used for reimbursable work. The
                      agency uses all of the supplies and later,
                      based on cost: accounting information,
                      allocates 1/4 of the expense to its
                      reimbursable work activities. Assume that
                      Appropriated Capital had a balance of $1,000
                      just before these transactions. Required
                      journal entries follow.

                                            (1)

                      To record the purchase of supplies:

                      7-8   Inventory for Agency Operations   100
                               Fund Balance With Treasury           100

                                            and

                      7-9   Appropriated Capital              100
                               Capital Investments                  100




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.   CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                                                 (2)
                         To record the use of supplies:

                          7-10    Operating/Program Expenses      100
                                     Inventory for Agency Operations 100

                                                and
                          7-5    Capital Investments             100
                                    Appropriated Capital Used          100



                                                 (3)
                          7-6    To allocate one-fourth of the supplies
                                 expense to reimbursable work:

                         Other Expenses                           25
                            Operating Program Expenses                  25


                         At this point, the capital account balances
                         are as follows.

                         Appropriated Capital                          $900
                         Capital Investments                              0
                         Appropriated Capital Used (to be closed
                         to Cumulative Results of Operations)          100
                         This indicates that only $900 of
                         appropriations can still be used to fund
                         agency operations and that $100 has already
                         been used to finance those operations.
                         However, because $25 of the supplies used
                         will be funded by revenue from reimbursable
                         work, only $75 of the appropriation will be
                         used to fund the supplies expense, and $925
                         ($1,000 - $75) is still available to fund
                         agency operations. Hence, the capital
                         accounts must be adjusted with the following


O   Page 7-7             GAO Accounting Guide:          September 1990
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CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                     entry, which restores the $25 to Appropriated
                     Capital.

                     7-7     Appropriated Capital Used         25
                                Appropriated Capital                25



                     After the entry is made, the capital accounts
                     have the following balances, which correctly
                     report the status of appropriated capital
                     used and available.

                     Appropriated Capital                      $    925
                     Capital Investments                              0
                     Appropriated Capital Used                       75

                     Total Capital                             $1 000

                                             (4)

                      7-11    To recognize revenue from provision of
                              services:

                     Advances From Others
                        Revenue From Services Provided




OPERATING            Often, agencies charge only enough for
STATEMENT--          reimbursable service work to cover costs.
REIMBURSABLE         Sometimes, when allowable and agreed-upon
SERVICE WORK         between a requesting and a performing agency,
                     a profit margin is added to provide funds
                     adequate for the purchase of future inventory
                     and equipment. at higher prices due to
                     inflation, tc build new facilities, or for
                     other reasons. Assuming the amounts from the
                     illustration above and that $35 was charged
                     for the service, the operating statement for
                     the agency performing the service is as shown
                     on the next page.



Page 7-8             GAO Accounting Guide:          September 1990
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.   CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                        Illustrative Federal Agency
                             operating Statement
                      for Accounting Period Ended (Date)


     Appropriation Activities

          Appropriated Capital Used                         $75
          Less Operating/Program Expenses                   (75)

          Excess of Appropriated Capital Used
          Over Operating/Program Expenses                       0

     Reimbursable Activities

          Revenue From Services Provided                     35
          Less: Related Expenses                            (25)

          Excess of Revenue Over Related
          Expenses for Reimbursable Work                        10

     Excess of Revenue Over Expenses                        $10




    ACCOUNTING FOR       Basic proprietary entries for reimbursable
    PRODUCTS UNDER       work transactions involving the production
    REIMBURSABLE         of a product are essentially the same as
    AGREEMENTS           those used in the private sector. Job order
                         or process cost accounting may be used, and
                         standard cost systems may be implemented.
                         Readers are expected to be familiar with such
                         systems and accounting methods. Entries for
                         basic reimbursable product work transactions
                         in addition to those for reimbursable
                         services follow.




.   Page 7-9             GAO Accounting Guide:          September 1990
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CHAPTER 7:   PROPRIETARY ACCOUNTING; FOR REIMBURSABLE WORK




                                            (5)

                      7-12   To purchase raw materials and supplies
                             on account:

                      Inventory--Raw Materials and Supplies
                         Accounts Payable

                      Note that, because appropriations are not
                      used to fund this inventory, no corresponding
                      entry transferring the purchase amount from
                      Appropriated Capital to Capital Investments
                      is necessary, while such an entry is
                      necessary when accounting for appropriations.



                                            (6)

                      7-13   To draw raw materials for use in
                             filling orders:

                      Inventory--Work in Process
                         Inventory--Raw Materials and Supplies



                                            (7)

                      7-14   To charge payroll expenses paid in the
                             agency payroll process to orders:

                      Inventory--Work in Process
                         Operating/Program Expenses

                      This entry assumes that the payroll was
                      initially paid from agency appropriations and
                      that this transaction requires that the
                      amount due to reimbursable orders be credited
                      back to the appropriation, a common practice.
                      If a separate payroll for reimbursables were
                      run or accounted for directly upon payment,
                      the credits would be to various taxes and



Page 7-10             GAO Accounting Guide:          September 1990   i
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.   CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                          other withholdings payable and (ultimately)
                          to Fund Balance With Treasury.



                                                  (8)

                          7-15   To apply overhead to work in process:

                          Inventory--Work in Process
                             Applied Overhead

                          Depending on the nature of the work and the
                          sophistication of the accounting systems
                          involved, some agencies charge actual
                          overhead expenses as they are incurred and do
                          not apply overhead.



                                                  (9)

                          7-16   To record completion of goods in
                                 process:

                          Inventory--Finished Goods
                             Inventory--Work in Process



                                                  (10)

                         After acceptance of completed products by the
                         agencies for which they were made, the
                         following two entries are made.

                         7-17    To   record revenue:

                         Accounts Receivable (if advances are
                         insufficient)
                         Advances From Others
                            Revenue From Goods Sold




    Page 7-11            GAO Accounting Guide:          September 1990
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                     7-18   To record Cost of Goods Sold for the
                            completed work:

                     Cost of Goods Sold
                        Inventory--Finished Goods



                                            (11)

                     To charge actual overhead expenses to
                     reimbursable accounts:

                     7-19   Applied Overhead
                               Operating/Program Expenses



                     If actual overhead includes a portion of
                     depreciation and supplies used already
                     charged against Appropriated Capital, the
                     following entry must: also be made:

                      7-7   Appropriated Capital Used
                               Appropriated Capital



                                            (12)

                     To close overapplied or pinderapplied overhead
                     into Cost of Goods Sold.




                      1If the amount: is material, it may be prorated
                      among Work in Process, Finished Goods, and
                      Cost of Goods Sold.


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.   CHAPTER 7:   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                          7-20   If the overhead has been overapplied,
                                 the entry is:

                          Applied Overhead
                             Cost of Goods Sold



                          7-21   If the overhead has been underapplied,
                                 the entry is:

                          Cost of Goods Sold
                             Applied Overhead




    OPERATING             The operating statement for reimbursable
    STATEMENT--           product work is essentially the same as that
    REIMBURSABLE          for reimbursable service work, illustrated in
    PRODUCT WORK          the previous section. The only difference is
                          that Cost of Goods Sold would appear in place
                          of Other Expenses. The composition of Cost
                          of Goods Sold and supporting computations are
                          the same as for a private sector firm engaged
                          in the manufacture of a product.



    COMPREHENSIVE         The next chapter provides a comprehensive
    EXAMPLE               example integrating both budgetary and
    IN CHAPTER 8          proprietary accounting for reimbursable
                          services. The chapter further integrates
                          accounting for reimbursable services with the
                          appropriation accounting example contained in
                          chapter 4.




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                     Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK


INTRODUCTION         This chapter jointly applies the concepts of
                     budgetary and proprietary accounting for
                     reimbursable work, explained and illustrated
                     separately in chapters 6 and 7, to a series
                     of abbreviated routine transactions. The
                     transactions involve reimbursable service
                     work undertaken as an adjunct to basic
                     operating appropriation activities, with a
                     proration to be made of expenses applicable
                     to the appropriation and the reimbursable
                     work. These activities are undertaken by the
                     Illustrative Federal Agency in chapter 4 for
                     FY A. Closing entries are made at the end of
                     FY A.
                     Both budgetary and proprietary entries are
                     made at the general ledger level for each
                     transaction. SGL account numbers are shown
                     along with the account titles. General
                     ledgers for the accounts in which these
                     transactions are recorded are contained in
                     the appendix to this chapter. Accounts
                     related to reimbursable work have the
                     designation "R" in the title, while those
                     related to the appropriation have the
                     designation "A."

                     For purposes of illustration, we have
                     established four self-balancing sets of
                     general ledger accounts, a budgetary and a
                     proprietary set for reimbursables and a
                     budgetary and proprietary set for the
                     performing agency's appropriation. Separate
                     Fund Balance With Treasury accounts have been
                     created for both reimbursable work
                     transactions and for appropriation-related
                     transactions. In practice, agencies may
                     combine both sets of budgetary accounts and

Page 8-1             GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                     both sets of proprietary accounts into two
                     single sets, and may use only a single Fund
                     Balance With Treasury account for both
                     reimbursables and the appropriation.
                     The appendix also contains subsidiary ledgers
                     in support of general ledger budgetary and
                     proprietary accounts where needed to
                     facilitate financial statement preparation.

                     Illustrative financial reports and
                     explanations of them follow the transactions
                     and entries for FY A. Readers may wish to
                     compare the reports with the ones for the
                     basic operating appropriation contained in
                     chapter 4.



FY A TRANSACTIONS    Transactions illustrated in this section are
                     in addition to those in chapter 4. As the
                     last transaction in chapter 4 is numbered 24,
                     transaction numbering in this chapter begins
                     with 25.
                      25.   Through interagency agreements, the
                            agency expects to perform an
                            estimated $10 million of reimbursable
                            service work for other agencies. All
                            work is properly chargeable against the
                            FY A appropriations of the funding
                            agencies. To perform the services, the
                            Illustrative Federal Agency must
                            undertake travel, pay employees, and
                            utilize some equipment and supplies
                            acquired primarily for use by
                            the agency and funded against its
                            operating appropriation. Assume the
                            normal case in which the statutory
                            authority for the agreements and
                            activities provides that the agency is
                            to collect reimbursements equal to its
                            expenses incurred.


Page 8-2             GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                                  (1)

                          Budgetary entry

                          4210     Anticipated Reimbursements
                                   and Other Income/R       10,000,000
                                4450 Authority Available
                                      for Apportionment/R       10,000,000



                                                  (2)

                          Proprietary   entry

                          None



                          26.    The $10 million is fully apportioned by
                                 OMB.

                                                  (1)

                          Budgetary entry

                          4450      Authority Available
                                    for Apportionment/R     10,000,000
                                45:10 Apportionment Available
                                       for Distribution/R       10,000,000



                                                  (2)

                          Proprietary entry

                          None




.   Page 8-3             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE' INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                      27.    $9,595,000 of work orders under the
                             interagency agreements were received and
                             accepted. Agencies paid $5 million in
                             advance through an interagency transfer
                             of funds, which was confirmed by
                             Treasury.

                                                (1)

                      Budgetary   entry

                      4230    Unfilled    Customer Orders
                               --Unobligated/R              9,595,000
                            4220 Reimbursable Orders
                                  Accepted/R                   9,595,000



                                                (2)

                      Proprietary entry

                      1010     Fund BalanFe With
                               Treasury/R               5,000,000
                            2310 Advances From Others/R     5,000,000




                       For illustrative purposes, a separate
                      account for Fund Balance With Treasury
                      related to the reimbursable work will be
                      used. In practice, agencies may use only a
                      single Fund Balance With Treasury account for
                      both reimbursable- and appropriation-related
                      transactions.

Page 8-4              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                          28.     The full amount of accepted work orders
                                  is allotted by the Director of Finance
                                  and Accounting.

                                                  (1)

                          Budqetary entry

                          4510      Apportionment Available
                                    for Distribution/R        9,595,000
                                461.0 Allotments Available
                                       for Commitment/
                                       Obligation/R               9,595,000



                                                  (2)

                          Proprietary entry

*                         None



                          29.     (a) Travel orders of $3,000,000 were
                                  issued for reimbursable work.

                                                  (1)

                          Budgetary entries

                          4610     Allotments Available for
                                   Commitment/Obligation/R    3,000,000
                                4800 Undelivered Orders/R         3,000,000

                                                  and

                          4240     Unfilled Customer Orders
                                   --Obligated/R            3,000,000
                                4230 Unfilled Customer
                                      Orders--Unobligated/R     3,000,000




.   Page 8-5             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE: INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                              (2)

                      Proprietary entry

                      None



                      (b) Travel vouchers of $3,125,000 were
                          submitted and approved against the
                          obligations in (a).

                                              (1)

                      Budctetary entries

                      4240     Unfilled Customer Orders
                               -- Obligated/R               125,000
                            4230 Unfilled Customer
                                   Orders--Unobligated/R        125,000

                                             and

                      4610  Allotments Available for
                            Commitment/Obligation/R    125,000
                      4800 Undelivered Orders/R      3,000,000
                         4900 Expended Appropriations/R 3,125,000



                                              (2)

                      Proprietary entry

                      6900 Other Expenses/R                3,125,000
                         2110 Accounts Payable/R               3,125,000



                      (c)    Payments for the travel claimed in (b)
                             were requested from and paid by Treasury.
                             (The net: entry is illustrated. Separate
                             entries for these transactions are
                             illustrated in chapter 4.)


Page 8-6              GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                                 (1)

                         Budgetary entry

                         None



                                                 (2)

                          Proprietary entry

                          2110 Accounts Payable/R           3,125,000
                             1010 Fund Balance With
                                  Treasury/R                    3,125,000



                          30.    Agency payroll in the amount of
                                 $6,100,000 related to the reimbursable
                                 work is requested from and paid by
                                 Treasury.

                                                 (1)

                         Budgetary entries

                          4610     Allotments Available for
                                   Commitment/Obligation/R 6,100,000
                                4900 Expended Appropriations/R 6,100,000

                                                 and

                         4240      Unfilled Customer Orders
                                   --Obligated/R            6,100,000
                                4230 Unfilled Customer Orders
                                      --Unobligated/R           6,100,000




O   Page 8-7             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                             (2)

                     Proprietary entry

                      6900 Other Expenses/R               6,100,000
                         1010 Fund Balance With
                              Treasury/R                     6,100,000



                      31.    Through the agency's cost accounting
                             system, it is determined that $275,000
                             of the $,2,700,000 in supplies used and
                             1/10 of the $950,000 depreciation on the
                             equipment, as recorded in chapter 4, are
                             properly chargeable against the
                             reimbursable work.

                                             (1)

                      Budgetary entries

                      4900 Expended Appropriations/A   370,000
                         4610 Allotments Available for
                              Commitment/Obligation/A      370,000

                                             and

                      4240     Unfilled Customer Orders
                               --Oblicrated/R               370,000
                            4230 Unfilled Customer
                                  Orders--Unobligated/R         370,000

                                             and

                      4610     Allotments Available for
                               Commitment Obligation/R   370,000
                            4900 Expended Appropriations/R   370,000




Page 8-8              GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCCIUNTING FOR REIMBURSABLE WORK



                                                  (2)

                          Proprietary entries

                          6900 Other Expenses/R                 370,000
                             1010 Fund Balance with
                                  Treasury/R                       370,000

                                                 and

                          1010     Fund Balance With
                                   Treasury/A                   370,000
                                6100 Operating/Program
                                      Expenses/A                   370,000

                                                 and

                          5700     Appropriated Capital
                                   Used/A                       370,000
                                3100 Appropriated Capital/A         370,000



                          32.     (a) All reimbursable work accepted is
                                  completed, and agencies are billed for
                                  the remaining $4,595,000 due under the
                                  interagency agreements.

                                                  (1)

                         Budcgetary entry

                          4250     Reimbursements and
                                   Other Income Earned/R      9,595,000
                                4240 Unfilled Customer
                                      Orders--Obligated/R        9,595,000




O   Page 8-9             GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                           (2)

                      Proprietary entry

                      2310 Advances From Others/R     5,000,000
                      1310 Accounts Receivable/R      4,595,000
                         5200 Revenue From
                              Services Provided/R         9,595,000



                      (b) Payment is received from the agencies in
                          full settlement of the billings in (a).

                                           (1)

                      Budgetary entry

                      None



                                           (2)

                      Proprietary entry

                      1010  Fund Balance With
                            Treasury/R              4,595,000
                         1310 Accounts Receivable/R     4,595,000




ADJUSTED TRIAL        Trial balances for the accounts prior to
BALANCES AND          closing follow.
SCHEDULES--END
OF FISCAL YEAR




Page 8-10             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.    CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                  PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                         Illustrative Federal Aaency
                     Trial Balance of Budgetary Accounts
                             September 30 of FY A
                            (Dollars in Thousands)

                                      Appropriations    Reimbursables
    Account                             Dr. (Cr.)         Dr. (Cr.)

    Other Appropriations Realized        $100,000
    Anticipated Reimbursements
      and Other Income                                      $10,000
    Apportionments Available
      for Distribution                                            (405)
    Allotments Available for
      Commitment/Obligation                   (396)
    Commitments Available for
      Obligation                             (150)
    Undelivered Orders                     (7,900)
    Expended Appropriations               (91,554)              (9,595)
    Reimbursable Orders Accepted                                (9,595)
    Reimbursements Earned                                        9,595

     Total                                $      0          $        0




.   Page 8-11               GAO Accounting Guide:          September 1990
                            Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING; FOR REIMBURSABLE WORK




                   Illustrative Federal Agency
              Trial Balance of Proprietary Accounts
                       September 30 of FY A
                      (Dollars in Thousands)

                                    Appropriations       Reimbursables
                                       Dr. (Cr.)           Dr. (Cr.)

Fund Balance With Treasury                 $10,460
Advances to Others                               5
Inventory for Agency Operations                550
Equipment                                   15,000
Accumulated Depreciation on Equipment         (950)
Disbursements in Transit                    (1,975)
Accounts Payable                               (25)
Accrued Funded Payroll and Benefits            (19)
Liability for Annual Leave                    (175)
Appropriated Capital                        (8,446)
Capital Investments                        (14,600)
Appropriated Capital Used                  (76,954)
Revenue from Services Provided                                $(9,595)
Operating/Program Expenses                      77,129
Other Expenses                                                     9.595

  Total                                     $        0         $      0



                        A supporting schedule for Other Expenses,
                        based on the related subsidiary ledger,
                        follows.




Page 8-12            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
*   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                        Illustrative Federal Agency
                        Schedule of Other Expenses
                            September 30 of FY A
                           (Dollars in Thousands)

    Depreciation on Equipment                    $      95
    Payroll and Benefits                             6,100
    Supplies Used                                      275
    Travel                                           3,125
     Total                                                   $9,595

    Balance in Other Expenses Control Account                    9,595

    Unreconciled Difference                                  $       0



                              Schedules of (1) allotments, commitments,
                              undelivered orders, and expended
                              appropriations related to the
                              appropriation, and (2) operating/program
                              expenses follow.




.   Page 8-13            GAO Accounting Guide:
                         Appropriations and
                                                        September 1990
                                            Reimbursables
 CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                    Illustrative Federal Agency
     Schedule of Allotments, Commitments, Undelivered Orders,
     and Expended Appropriations Related to the Appropriation
                        September *g0 of FY A
                       (Dollars in Thousands)

Object for Which                                               Expended
Funds Were                                       Undelivered   Appro-
Appropriated         Allotments    Commitments   Orders        priations

Salaries and Benefits     $    1      $    0      $     0       $29,999
Travel                        25           0           50        19,925
Fixed Assets,
  Materials, and
  Services                 370          150        7.850         41.630
  Total                   $396         $150       $7,900        $91,554

General Ledger
Control Account
Balances:

Allotments Available
 for Commitment/
 Obligation               $396
Commitments
 Available for
 Obligation                            $150
Undelivered Orders                                $7,900
Expended
 Appropriation                                                  $91,554
  Unreconciled
  Difference              $    0       $   0       $    0       $     0




 Page 8-14              GAO Accounting Guide:          September 1990
                        Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                        Illustrative Federal Agency
                  Schedule of Operating/Program Expenses
                             September 30 of FY A
                            (Dollars in Thousands)

    Expense

    Depreciation expense--equipment                          $      855
    Payroll and Benefits                                         30,174
    Personal Services                                            23,750
    Supplies                                                      2,425
    Travel                                                       19,925

     Total                                                   $77,129

    Balance of General Ledger
    Control Account:
    Operating/Program Expenses                               $77,129

     Unreconciled Difference                                 $       0




    CLOSING ENTRIES       Closing entries are set forth on the
                          following pages. The closing entries for the
                          operating appropriation illustrated in
                          chapter 4 must all be rejournalized to
                          accommodate the transactions in this chapter.
                          However, as only the amounts, and not the
                          accounts, are different, the numbering scheme
                          CL-1 through CL-8, used in chapter 4, is used
                          again here. Additional closing entries based
                          on transactions in this chapter begin with
                          the designation CL-9. Note that some
                          transactions involve the closing of only a
                          budgetary or a proprietary account.




    Page 8-15            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                      CL-1   To remove unobligated commitments
                             related to the appropriation from
                             the accounts:

                      Budgetary entry only

                      4700  Commitments Available
                            for Obligation/A           150,000
                         4610 Allotments Available for
                               Commitment/Obligation/A     150,000

                                         ,   *   *   *   *


                      CL-2   To remove unused allotment authority
                             relating to the appropriation from the
                             accounts:

                      Budgetary entry only

                      4610  Allotments Available for
                            Commitment/Obligation/A          546,000
                         4510 Apportionment Available
                               for Distribution/A               546,000



                      CL-3   To remove the apportionment authority
                             relating to the appropriation from the
                             books:

                      Budgetary entry only

                      4510  Apportionment Available
                            for Distribution/A               546,000
                         4450 Authority Available
                               for Apportionment/A              546,000



                      CL-4   To establish the account for budget
                             authority related to the appropriation
                             that must be returned to Treasury:




Page 8-16             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                               (1)

                         Budgetary entry

                         4450   Authority Available
                                for Apportionment/A        546,000
                             4391 Restorations, Writeoffs,
                                   and Withdrawals/A           546,000



                                               (2)

                         Proprietary entry

                          3100 Appropriated Capital/A      546,000
                             2990 Other Liabilities (To
                                  Return Unused
                                  Appropriatiopi to
                                  Treasury.)/A                 546,000



                         CL-5   To reduce the appropriation by the
                                amount of budget authority returned
                                to Treasury:




                         2
                          As discussed in chapter 2, agencies may
                         choose not to record and liquidate a
                         liability for the transactions in CL-4 and
                         CL-5.  If that were not done, there would be
                         no proprietary entry made for the liability
                         in CL-4, and the entry in CL-5 would be:

                         Appropriated Capital             546,000
                            Fund Balance With Treasury        546,000




    Page 8-17            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE: INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                                                   (1)

                      Budgetary entry

                      4114  Appropriations Realized
                            but Withdrawn/A                      546,000
                         4119 Other Appropriations
                               Realized/A                           546,000
                                          *e   *   *     *   *


                                                   (2)

                      Proprietary entry

                      2990  Other Liabilities (To return
                            Unused Appropriation/A to
                            Treasury.)                  546,000
                         1010 Fund Balance With
                               Treasury/A                   546,000

                                          ,    *    *    *   *


                      CL-6   To remove expended appropriations from
                             the accounts::

                      Budgetary entry only

                      4900  Expended
                            Appropriations/A       91,554,000
                         4119 Other Appropriations
                               Realized/A              91,554,000




Page 8-18             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                         CL-7    To close the revenue and expense
                                 accounts related to the appropriation:

                         Proprietary entry only

                         5700   Appropriated Capital
                                Used/A                    76,954,000
                          3320 Net Results of
                                Operations/A                 175,000
                             6100 Operating/Program
                                   Expenses/A                 77,129,000



                         CL-8    To close Net Results of Operations for
                                 the appropriation:

                         Proprietary entry only

                         3310   Cumulative Results
                                of Operations/A            175,000
                             3320 Net Results of Operations/A 175,000



                         CL-9    To reduce the apportionment available
                                 for distribution by the amount of
                                 reimbursements which were anticipated
                                 but were not received:

                         Budgetary entry only

                         4510   Apportionment Available
                                for Distribution/R           405,000
                            421.0 Anticipated
                                   Reimbursements and
                                   Other Income/R                405,000



                         CL-10   To close the Expended Appropriations
                                 account for reimbursable work:




O   Page 8-19            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                      Budgetary entry only

                      4900 Expended Appropriations/R 9,595,000
                         4210 Anticipated
                              Reimbursements and
                              Other Income/R             9,595,000



                      CL-11   To c:Lose the income and expense
                              accounts for reimbursable work:

                      Proprietary entry only

                      5200  Revenue from Services
                            Provided                  9,595,000
                         6900 Other Expenses/R            9,595,000
                         3320 Net: Results of Operations/R        0



                      CL-12   To close Net Results of Operations to
                              Cumulative Results of Operations for
                              reimbursables:

                      Proprietary entry only3

                      3320 Net Results of Operations/R           0
                         3310 Cunulative Results
                              of Operations/R                         0




                      3Since the amount of reimbursements revenue
                      exactly equaled the amount of expenses, there
                      is neither a "net income" nor a "net loss"
                      related to reimbursable transactions.
                      Technically, therefore, there would be no
                      need to make the credit to Net Results of
                      Operations in CL-11 or to make entry CL-12 at
                      all. These are shown only for illustrative
                      purposes.


Page 8-20             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.    CHAPTER 8:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                            CL-13 To close the Reimbursements Earned
                            account:

                            Budgetary entry only

                            4220  Reimbursable Orders
                                  Accepted/R                              9,595,000
                               4250 Reimbursements and
                                     Other Income Earned/R                    9,595,000

                                                 *   *    *       *   *




     PRE-CLOSING            The pre-closing trial balance required by
     AND POST-CLOSING       the SGL for budgetary accounts, compiled
     TRIAL BALANCES         after closing entries 1 through 5, 9 and 13,
                            is shown below.


                            Illustrative Federal Agency
                Pre-Closina Trial Balance of Budgetary Accounts
                              September 30 of FY A
                             (Dollars in Thousands)

                                         Appropriations                   Reimbursables
    Account                                Dr. (Cr.)                        Dr. (Cr.)
    Appropriations Realized
      but Withdrawn                         $            546
    Restorations, Writeoffs,
      and Withdrawals                              (546)
    Other Appropriations Realized                99,454
    Anticipated Reimbursements and
      Other Income                                                            $9,595
    Undelivered Orders                           (7,900)
    Expended Appropriations                     (91,554)                       (9,595)
      Total                                  $                0               $       0



                              The Post-Closing Trial Balance of budgetary
                              accounts follows.


.   Page 8-21              GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
 CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                      Illustrative Federal Agency
          Post-Closing Trial Balance of Budgetary Accounts
                         September 30 of FY A
                        (Dollars in Thousands)

Account                                     Dr. Bal.         Cr. Bal.

Appropriations Realized but Withdrawn       $    546
Restorations, Writeoffs, and Withdrawals                     $    546
Other Appropriations Realized                   7,900
Undelivered Orders                                               7,900

  Total                                     $8_,_446         $8,446



                          Note that all budgetary accounts related to
                          reimbursables are closed. Hence, all
                          accounts shown relate to the appropriation.

                          The Post Closing Trial Balance of
                          proprietary accounts follows. As with the
                          budgetary accounts for reimbursables, all
                          proprietary reimbursable accounts are
                          closed. Hence, the figures relate only to
                          the appropriation.




 Page 8-22             GAO Accounting Guide:          September 1990
                       Appropriations and Reimbursables
.   CHAPTER 8:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                  PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                          Illustrative Federal Agency
              Post-Closing Trial Balance of Proprietary Accounts
                               September 30 of FY A
                              (Doliars in Thousands)

    Account                                     Dr. Bal.         Cr. Bal.

    Fund Balance With Treasury                   $    9,914
    Advances to Others                                    5
    Inventory for Agency Operations                     550
    Equipment                                        15,000
    Accumulated Depreciation on Equipment                         $      950
    Disbursements in Transit                                           1,975
    Accounts Payable                                                      25
    Accrued Funded Payroll and Benefits                                   19
    Accrued Unfunded Annual Leave                                        175
    Appropriated Capital                                               7,900
    Capital Investments                                               14,600
    Cumulative Results of Operations                 175
                                                 $25 644          $25,644




    GENERAL PURPOSE        The financial statements illustrated in this
    FINANCIAL              section meet GAO standards and are
    STATEMENTS MEETING     appropriate for inclusion in an agency's
    GAO STANDARDS          annual report.  The statements include

                           -- an operating statement,

                           -- a statement of changes in government
                              equity,

                           -- a balance sheet, and

                           -- a statement of changes in financial
                              position.




                            2 GAO Appendix I,   Standard F-20.


.   Page 8-23              GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                      The statement of changes in government
                      equity, while not required under those
                      standards, is useful to explain how Equity of
                      the U.S. Government changed from the
                      beginning to the end of the accounting
                      period.

                      Examples of these statements, based on a
                      combination of the FY A transactions in
                      chapter 4 and those in this chapter, follow.



                    Illustrative Federal Agency
                        Operating Statement
                For Year Ended September 30 of FY A
                      (Dollars in Thousands)

                                  Appropri-     Reimburs-
                                  ation         able Work    Total

Revenues and Financing Sources

Appropriated Capital Used         $76,954        $       0   $76,954
Services Provided                                    9,595     9,595

 Total                            $76,954        $9,595      $86,549

Expenses

Depreciation on Equipment         $      855     $      95   $      950
Payroll and Benefits                  30,174         6,100       36,274
Personal Services                     23,750             0       23,750
Supplies                               2,425           275        2,700
Travel                                19,925         3,125       23,050

  Total                           $77,129        $9,595      $86,724

Excess of Expenses Over
Revenues and Financing Sources    $     (175)    $      0    $     (175)




 Page 8-24            GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                        Illustrat:ive Federal Agency
                 Statement of Changes in Government Equity
                     For Year Ended September 30 of FY A
                           (Dollars in Thousands)

                                                               Cumulative Results
                                                               of Operations
                           Appropriated              Capital   Appropri- Reim-
                             Capita.               Investments ation     bursables

    Balance, October 1
     of FY A                  $         0             $          0      $   0    $0
    Appropriation                 100,000
    Financing Sources:
      Purchase of
        Equipment and
        Inventory                 (18,250)                18,250
      Depreciation and

.       Inventory Used
      Other Expenses
    Excess of Expenses
                                  (7 3 ,3 0 4 )c
                                                          (3, 6 5 0)b


      over Revenues and
      Financing Sources)                                                 (175)    0
    Return of Expired
      Appropriation                   (546)                                      _
    Balances,
      September 30 of
      FY A                    $     7,900             $14.600           $(15)


    :Equipment, $15,000 + Inventory, $3,250.
     Depreciation, $950 + Supplies Used, $2,700. Note that though
     some of the expense was funded by the reimbursable work, the
     amount of the reduction in Invested Capital is the total expense
     for depreciation and supplies used, regardless of funding source.
    CTotal Operating/Program Expenses                       $77,499
     Less: Depreciation Expense                   $ 855
            Supplies Used                          2,425
            Annual Leave Expense                     175     (3.455)
     Remaining Expenses funded by Appropriated
       Capital Used                                         $73,304




.   Page 8-25               GAO Accounting Guide:          September 1990
                            Appropriations and Reimbursables
 CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                     Illustrative Federal Agencv
                            Balance Sheet
                         September :30 of FY A
                        (Dollars in Thousands)

ASSETS

Fund Balance With Treasury                $ 9,914
Advances to Others                              5
Inventory for Agency Operations               550
Equipment                                  15,000
Less Accumulated Depreciation
  on Equipment                               (950)

  Total Assets                                       $24,519

LIABILITIES AND EQUITY

Liabilities

Disbursements in Transit                   $1,975
Accounts Payable                               25
Accrued Funded Payroll                         19
Accrued Unfunded Annual Leave                 175

   Total Liabilities                                 $ 2,194

Equity of the U.S. Government

Appropriated Capital                      $ 7,900
Invested Capital                           14,600
Results of Operations                        (175)

   Total Equity                                      $22,325

TOTAL LIABILITIES AND EQUITY                         $24,519




 Page 8-26              GAO Accounting Guide:         September 1990
                        Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                         Illustrative Federal Agency
                 Statement of Chariges in Financial Position
                     For Year Ended September 30 of FY A
                            (Dollars in Thousands)

    Fund Balance Provided by Operations

    Excess of Expenses over Financing Sources         $     (175)
    Components Not Requiring Cash:
     Depreciation Expense                                   950
     Supplies Used                                        2,700
     Payroll and Benefits Expense!
       related to Annual Leave                              175
     Increase in Advances to Others                          (5)
     Increase in Disbursements in Transit                 1,975
     Increase in Accounts Payable                            25
     Increase in Payroll Liability                           19

         Total Fund Balance Provided by Operations                  $ 5,664
.   Fund Balance Provided by Financinq

    Net Appropriation Used for Investments                14,600
    Appropriation Held for Payment of
      Undelivered Orders                                  7,900
    Appropriation Not Obligated                             176
    Unobligated Appropriation
      Returned to Treasury                                  (176)

         Total Fund Balance Provided by Financing                    22,500

    Fund Balance Used for Investments

    Purchase of Equipment                                 15,000
    Purchase of Inventory                                  3.250

           Total Fund Balance Used for Investments                  (18,250)
    Increase in Fund Balance With Treasury                            9,914
    Beginning Fund Balance With Treasury                                  0
    Ending Fund Balance With Treasury                               $ 9,914




O   Page 8-27              GAO Accounting Guide:         September 1990
                           Appropriations and Reimbursables
CHAPTER 8:    COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
              PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




FINANCIAL             OMB and Treasury regulations require that
STATEMENTS            agencies prepare and submit several financial
REQUIRED BY           statements. One of the principal statements
0MB AND               required by OMB is the SF 133, "Report on
TREASURY              Budget Execut ion." Selected key reports
                      required by Treasury include those listed
                      below.

                      SF   220    Report on Financial Position
                      SF   221    Report on Operations
                      SF   222    Report on Cash Flow
                      SF   223    Report on Reconciliation [of
                                     operating expenses to net
                                     disbursements]
                      TFS 2108    Year-end Closing Statement

                      Examples of these statements, based on
                      transactions recorded previously for the
                      Illustrative Federal Agency, are given on the
                      following pages. Additional information on
                      the source of certain figures entered on the
                      statements begins on p. 8-38. The first
                      three statements differ from those presented
                      in the previous section only in the
                      composition of line items.




Page 8-28             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
     STA!;DARD Foam 13                                                                                               Sheet       _        of
     ofice of management and Budget
     Circular No. A-64
                                                    REPORT ON BUDGET EXECUTION                                       Period ended:..
                                                                                  _______________ON___BUDGET______EXECUTION_______
                                                                                                                                                  pt.      30    of   FY

    AGENCY                                                                             APPROPRIATION 03 FUND TITLE AND SYMBOL


.       Illustrative Federal Agency
    BUREAU
                                                                                        Salaries and Expenses
                                                                                        99A 9999

                                                                                   Unexpired
                                               Dcscalrrlo5                         ~Accounts_                _   _   _   _   _   _   _



                           BUDGETARY RESOURCES                                                 (Doll rs in thousarls)
      L Budget authority:
             A Appropriations realized ----------------                                100,000
            B. Appropriations anticipated (indefinite) ._______-______
            C. Other new authority (                                        )
            D. Net transfers (+ or -).                ._----__-___.._ -_-_-__

      2. Unobligated balance:
            A- Brought forward October 1            ___._-_______---_
              B. -Net transfers (+ or -).      __-____-_-.-__-_-________
      3. Reimbursements and other income:
             A Earned                                              )                     9,595
             B. Change In unfilled customers' orders (+ or -) ____
             C. Anticipated for rest of year __________-___  -__   -_
      4. Recoveries of prior year obligations:
               .   Actual ------------------      (-                        )

             B. Anticipated for rest of year __________.-__-__-_-______
      5. Portion not available lpursuant to P.T                    (-)
      6. Restorations (+) and writeoffs (-)._ $

      T. TOTAL BvDGL-rART RESOURCES -----------------             -     -              109,595

.                  STATUS OF BUDGETARY RESOURCES
     S. Obllgafions Incurred
     9. Unobligated balances available:
                                                                  )                    109,595

            A. Apportioned, category A----------------------------                          951
              B. Apportioned, category B ------------------------------
           C. Other balances available_________________-__________
    10. Unobligated balances not available:
           A. Apportioned for subsequent periods*_----------------
           B. Withheld pending rescission*_-----------------------
           C. Deferred* -________________ _
           D. Unapportloned balance of revolving fundc -- __-___
             E. Other balances not available-(405)--------------------                     (405)


    11. TorsALBrorSARY REsouRcEs-------------------_              ___-____-_-          109,595
             RELATION OF OBLIGATIONS TO OUTLAYS
                 AND ACCRUED EXPENDITURES
    12. Obligations incurred, net (8-3A-3B-4A)-------------------                       99,454
    I1 Net unpaid obligations:
             A. Obligated balance, as of October 1 ---------------------
             B. Obligated balance transferred, net (+ or -) --------
             C. Obligated balance, end of period-9,914-_____--------            -___                                             __      ______9,914


    14. Outlays (12+13A+13B-13C) -          -(S                    )                    89,540
    15. Change in accounts payable, net:
            A. Accounts payable, net, as of October 1 .______________                          0
            B. Accounts payable transferred, net (+ or -)_________                             0
            C. Accounts payable, net, end of period___-_-_- --------                      2,0 14

    16. Accrued expenditures (14-15A-15B+13C)                (;             )           91,554
        'From S.F. 132


                                                                                                  (Authorized offcer)                                   (Date)
       8-29
Standard Form 220                                                                                                                                          Page 1 of 3
November 1988                                                          REPORT ON FINANCIAL POSITION                                                IAR No. 1178-TD-XX
I TFM 2-4100                                                           as of    .
                                                                              Sept.  0 of FY A
                                                                             (Dollars in tholisarids)

IDENTIFICATION:
DEPARTMENT/AGENCY:                                   Illustrative                             Federal Agency
BUREAU/ORGANIZATIONAL UNIT:
OMB IDENTIFICATION CODE:                                                                                                            FUND TYPE:              5
                                                                                                                                                         Total
 Assets                                                                                                                     Amount                   current period
 1.    Fund balance with Treasury and cash (SF 220-1)
       a.    Fund balance(s) .         .... ............                                                    .                   9,914
       b.    Cash    ..    ........ ..
       c.    Foreign currency, net .......... .                                                                                                             9
       d.    Subtotal           .                                                      ..         .......                             __
 2.    Accounts receivable (SF 220-9)
       a. Federal agencies
             1.   Current           .....              ..          -......                .

             2. Noncurrent                         .                     ...
       b.    Public
             1. Current ......................................................................
             2. Noncurrent .             ......... .
       c.    Less: Allowances .             ........... . ..
       d.    Subtotal ...................                .
 3.    Advances and prepayments
       a.    Federal agencies                 ..                       ..        .     ........                                       5
       b.    Public         .                                                    ......

       c.    Subtotal ........                               .                                                  ___             _         _5
 4.    Inventories (SF 220-1)
       a.    Operating consumables      ............. .....                                                     _...                550
       b.    Product or service components     ..    ...........................                                                               _

       c.    Stockpiled materials .....     ....       ......                                                   ___...
       d.    Other 1.                   _
             2.
             3.
             4.                                             _
       e.    Subtotal ..............
                       .                                    A                ....................                                                           550
 5.    Investments, net (SF 220-1)
       a.    Federal securities                                    .         ...._..
       b.    Non-Federal securities                         ....
       c.    Other 1.                                                   _


             3.
             4.
       d.    Subtotal                                                                             _.
                                                                                              -.-.....
 6.    Loans receivable SF 220-8, SF 220-9)
       a. Federal agencies
             1. Current .. ........       ........                                                              _...___......
             2. Noncurrent          ........        ..
       b.    Public                       .....................
             1. Current ..... ................ .. ..
             2. Noncurrent
       c.    Less: Allowances          .............
       d.    Subtotal  .  . . ._ .........
                                   .......    _

Previous edition not usable
                                                                            AUTHORIZED FOR LOCAL REPRODUCTION
                                                                                            (2-4100--14)

      8-30
Standard Form 220                                                                                       Page 2 of 3
November 1988
                                            REPORT ON FINANCIAL POSITION
                                           as of Sept. 30 of FY A
                                                 (Dollars in thousands)


BUREAU/ORGANIZATIONAL UNIT:
                                                                                                     Total
 Assets-Continued                                                             Amount             current period
 7.   Property, plant and equipment. net (SF 220-1)
      a. Structures. facilities and leasehold improvements
      b. Military equipment                         --         _--__ _ _ ._
      c. ADP software          ....-....                        ____
       d. Equipment                                                              15,000
      e. Assets under capital lease                          _
      f. Other 1.
           2.
           3.
           4.
       g. Construction-in-progress ...............     ... .        __
                                                                   _............

       h. Land               .           ........
                                               .
       i. Allowances .......-.         -            -         -                     9......50.
      j. Subtotal       .......               -14,050
                         ........................
 8.    Other assets
       a.
       b                                          _

     d. _
     e. Subtotal
 9. Total assets                        .24                                                           5 19
 Liabilities
 10. Accounts payable
     a. Federal agencies           .....      _
     b. Public                                     _ --                          2,000
     c. Subtotal ._          .....                         _2,000
 11. Interest payable
     a. Federal agencies
     b. Public
     c. Subtotal
 12. Accrued payroll and benefits ...........
 13. Accrued unfunded annual leave                                                                     175
 14. Unearned revenue (advances)
     a. Federal agencies .............
     b. Public                  .     ................
     c. Subtotal           .................         .....
 15. Deposit funds                           . ......
 16. Debt issued under borrowing authority (SI: 220-1)
     a. Gross Federal debt
     b. Intragovernmental debt
     c. Other debt
     d. Subtotal          _         .
 17. Actuarial liabilities (SF 220-1)
     a. Pension plans
     b. Insurance and annuity programs
     C. Subtotal



                                                       (2-4100-15)
  8-31
Standard Form 220                                                                                                      Page 3 of A
November 1988
                                                        REPORT ON FINANCIAL POSIT19N
                                                       as of   Sept. 30 of FY A
                                                              Dollars in thousands


BUREAU/ORGANIZATIONAL                             UNIT:         Illustrative Federal Agency
                                                                                                                    Total
Liabilities-Continued                                                              _Amount                      current period
 12. Other liabilities
       a._

       b._

     d. Ade
     e. Subtotal .................. ._...                    ...........
 19. Total liabilities ...................... . ..............................                                        2 ,194
Equity
Appropriated fund equitY
20. Unexpended financed budget authorityJ
    a. Unexpended appropriations ................. ...... ................... .                0
    b. Less: Unfilled customer orders(Federal) ._._
    c. Subtotal ......... ..... . .............................                                                       7 900
21. Invested capital ......... ..............................                                                        14,600
        Cumulative Results of Operation                                                            ..                   (175)
Revolvina fund eouitv
22. Revolving fund balance~s
    a. Appropriated capital_
    b. Cumulative results ._.. ............... _ll
    c. Donations        . ... ... ... ___..
                                      ___.a
    d. Subtotal ............... ................................. ..............
Trust fund equity
23. Trust fund balance(s)_.._              .. _ .                                  .
24. Total equity                                                                                                     22-325
25. Total liabilities and equity ......._ . .. ...                                 _                                 2451



                                                                     AGENCY CONS ACTS

1. Preparer's Name                                                                           2. Telephone No.


3. Address



4.    Supervisor's Name                                                                      5. Telephone No.




                                                                             12-4100-1ad;}
     8-32
Standard Form 221                                                                         Page 1 of 2
November 1988                                                                     IAR No. 1180-TD-AN
I TFM 2-4100                                 RIEPORT ON OPERATIONS
                             for the period ended Sept. 30 of FY A
                                          (D)ollars in thousands)

IDENTIFICATION:
DEPARTMENT/AGENCY:
BUREAU/ORGANIZATIONAL UNIT:
OMB IDENTIFICATION CODE:_                                            FUND TYPE:               5
BASIS USED:
 FINANCING SOURCES                                         Amount                    Total
 1. Arued expenditures ExPend AR             -po                                    91,554
 2. Revenue Reimbursable Work Collect on
    a. Federal sources in excess or Ex-9,595
    b. Public sources pn    e                                                         9p595
    c. Subtotal                                                                       9,595
 3. Governmental receipts
 4. Other a. Appropriations used for:
    b. - Depreciation                         950
    C.- Supplies Consumed                  2,_700
     d.
    e. Subtotal                 - -...                                 _
 5. Less: Receipts returned to Treasury
 6. Total financing sources                                                         104.799
 OPERATING EXPENSES
 7. Cost of               services rc                                                9,225
 8. Operating/program expenses, funded    _
 9. Interest expense, funded
     a. Federal Financing Bank/
        Treasury borrowings     _   .     _
     b. Federal securities __._.._.
     c. Other 1.             _
        2.
        3.
        4.                 _
     d. Subtotal                       ._
 10. Other, funded expenses
     a.


    d.
    e.    Subtotal   _   .     _   .     _     _

Previous edition not usable

                                       AUTHORIZED FOR LOCAL REPRODUCTION




                                                   (2-4100-49)
  8-33
Standard Form 221                                                                                      Page 2 of 2
November 1988

                                        REPORT ON OPERATIONS
                           for the period ended Sept. 30 of FY A
                                              (Dollars in thousands)

BUREAU/ORGANIZATIONAL UNIT:                           Illustrative      Federal Agency

 OPERATING EXPENSES-Continued                                          Amount                      Total
11. Unfunded expenses                                                                                3.82
12. Total operating expenses             ...................                                          ,724
NET RESULTS
 13.   Net results before adjustments                                                               18,075
 14.   Less: Capital expenditures (all funds
       refer to the instructions) ..........                                                        18, 250
 15.   Less: Extraordinary items .           .......
 16.   Net results                                                   A175



                                                           AGENCY CONTACTS

1. Preparer's Name                                                              2. Telephone No.


3. Address



4. Supervisor's Name                                                            5. Telephone No.




  8-34                                                         (2-4100-50)
Standard Form 222                                                                                                    Page 1 of 1
November 1988                                                                                                IAR No. 0341-TD-AN
I TFM 2-4100                                     REPORT ON CASH FLOW
                                   for the period ended Sept. 30 of FY A
                                               (Dollars in thousands)

IDENTIFICATION:
DEPARTMENT/AGENCY:   Thustrative Federal Agency
BUREAU/ORGANIZATIONAL UNIT:_
OMB IDENTIFICATION CODE:                       FUND TYPE:                                                              5

                       Description                                             A unt                                Total

 1. Fund balance with Treasury and cashs
    beginning of period (PY SF 220) ......
 2. Sources of funds:
    a. Increase in debt .......                                   _._.....................
    b. Appropriations .         .... .........                                    100,000
    c. Revenue ......                       .           .....                         9,595
    d. Sale of assets .................................
    e. Increase in payables                      ................                     2,0 19
    f. Decrease in receivables and advances...                                             (5)
     g.   Other 1.     _   _   _   _   _   _   _   _   _   _   _


       2                                                   =
       3.
       4.                                                  =
    h. Total ......          .............................   .                                                  111,609
 3. Application of funds:
    a. Operating expenses (SF 221)                                86,724
    b. Less: Expenses not requiring outlays                       (3,825
           (SF 221) ............. ....  .(3,825)....           _.
    c. Increase in investments .............
    d. Increase in inventory. .                                    3,250
    e. Purchase of property, plant and
           equipment .... ._.....................15,000
    f. Other l. Return of unobligated
       2. Approp. to Treasury =_                                      546
       3.
          4.                           _
     g. Total ... A.... ............................                                                            101,695
 4. Fund balance with Treasury and cash,
    end of period (SF 220) ....



                                                                   AGENCY CONTACTS
 1. Preparer's Name                                                                          12.    Telephone No.


 3. Address



 4. Supervisor's Name                                                                            5. Telephone No.


Previous edition not usable                            AIUTHORIZED FOR LOCAL REPRODUCTION


  8-3 5                                                               (2-4100-54)
Standard Form 223                                                                                                                        Page 1 of I
November 1988                                                                                                                    IAR No. 0342-TD-AN
I TFM 2-4100                                   REPORT ON RECONCILIATION
                             for the period ended                   Sept. 30 of FY                                   A
                                               (Dollars i-nthousandfsT

IDENTIFICATION:
DEPARTMENT/AGENCY:   Illustrative Federal Agency
BUREAU/ORGANIZATIONAL UNIT:
OMB IDENTIFICATION CODE:                 _      FUND TYPE:                                                                               5

                                      Description                                                                                    Total


 1. Total operating expenses (SF 221) .-                           .................................
                                                                                              _           ........                   86,724

2. Adjustments:

    Add:
    a. Capital expenditures          .... ..      ..        ..............                             ..............                18,250

    Deduct:
    b. Increase (decrease) in accounts payable                         .                  ..........................                  2,014

    c. Decrease (increase) in inventories . ........ ..................                         _                       ......        2,700

    d. Accrued expenses not requiring outlays                      .....                                                              1,125

3. Subtotal...                                                                          ....               .....     .......

4. Less: Offsetting collections credited _             .           .....


5. Net disbursements .                                     .....         .........                                          .        89,540




                                                   AGENCY CONTACTS

 1. Preparer's Name                                                                                              2. Telephone No.


3. Address



4. Supervisor's Name                                                                                             5. Telephone No.


Previous edition not usable

                                          AUTHORIZED FOR LOCAL REPRODUCTION




                                                             (2-4100-58)
  8-36
cow




 0- 4   a~                            0



                4)00~~~~~~~~0




 I-                                   C
             C)~~~~~
 __j             8-37


 C.3




                       I      o




         U~~I                 8."s8   o




                  8-       30 7       4
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




Sources of           Although the SGL provides a crosswalk to use
Selected Figures     in preparing OMB and Treasury statements
on Statements        illustrated on the preceding pages, we have
                     provided the comments in this section on the
                      source of our figures and the nature of the
                      computations and listings involved.  All
                      amounts are in thousands of dollars.




SF 133, Report on
Budget Execution

Line 8                Expended Appropriations of $91,554 for the
                      appropriation and $9,595 for reimbursables +
                      Undelivered Orders of $7,900 relating to the
                      appropriation.  (Note that there is are
                      undelivered orders relating to the
                      reimbursables.)

      9A             Restorations, Writeoffs, and Withdrawals,
                     representing unobligated appropriations which
                     must be returned to Treasury at year-end,
                     $546, plus reimbursements which were
                     anticipated but not received, $405.

     10E              Reimbursements which were anticipated but not
                      received.

                      Note that the section Status of Budgetary
                      Resources summarizes the accounts for the
                      $100,000 appropriation plus the $9,595 in
                      reimbursable orders in the following manner:

     11               Expended Appropriations              $101,149
                      Undelivered Orders                      7,900
                        Total Obligations                   109,049
                      Unobligated Appropriation to Be
                       Returned to Treasury                     546
                        Total Appropriation And
                         Reimbursable Earnings             $109,595




Page 8-38             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



    Line 13c              This figure is derived from the following
                          summation:

                          Accounts Payable                         $      25
                          Disbursements in Transit                     1,975
                          Accrued Funded Payroll                          19
                          Undelivered Orders                           7,900
                            Total Amounts Yet to Be Paid               9,919
                          Advances to Others                              (5)
                          Net Unpaid Obligations,
                           Septenber 30 of FY A                    $9,914

                          It represents the amount for goods and
                          services received that has not yet been paid
                          and the amount of undelivered orders, both of
                          which will have to be paid from Fund Balance
                          With Treasury, less moneys due back to the
                          appropriation. In other words, after
                          collecting the $5 in advances to employees,
                          the appropriation will have to pay $9,914 for
                          current and expected liabilities.

          14              Note that this is the amount disbursed from
                          Fund Balance With Treasury during the year.
                          Its derivation from lines 12 and 13 is based
                          on the following equation, which expresses
                          the relationship between items to be funded
                          by the appropriation:


     Total Goods and Services         Goods and        Goods and
     Received and Expected to     =   Services    +    Services
     Be Received                      Paid             Yet to Be
                                                       Paid For

     (Expended Appropriations         (Cash           (Current and
     plus Undelivered Orders)         Disburse-       Expected
                                      ments)          Liabilities
                                                      Minus Receiv-
                                                      ables)


          15c             This figure is equal to the difference
                          between the amount in line 13C and


.   Page 8-39            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                     Undelivered Orders. Undelivered orders are
                     not valid accounts payable until the goods
                     and services they represent are received.

Line 16              Note that the term "accrued expenditures"
                     means "Expended Appropriations accounted for
                     on an accrual basis." The amount on this
                     line should equal the amount in the account
                     Expended Appropriations for the
                     appropriation.


SF 220, Report on    Amounts shown on the statement are taken from
Financial            those on the balance sheet appearing on
Condition            p. 8-26. Note that it is necessary to add a
                     line after line 21 to show Cumulative Results
                     of Operations. The $175 negative balance in
                     that account represents the unfunded annual
                     leave liability at fiscal year-end.


SF 221, Report
on Operations

 Line   1             See discussion of "accrued expenditures" for
                      line 16 of the SF 133.

        4            Note that it is necessary to include
                     appropriated capital used for depreciation
                     and supplies consumed, which are not part of
                     expended appropriations. Inventory and fixed
                     assets purchased by the appropriation are
                     included in expended appropriations, and it
                     seems at first glance that, to the extent
                     supplies used and fixed assets depreciated
                     related to items purchased by the
                     appropriation, listing both the expended
                     appropriation and the appropriation used
                     duplicates the appropriation used. However,
                     as capital expenditures--expendituresfor
                     inventory and fixed assets--are subtracted on
                     line 14, the potential duplication is
                     avoided.



Page 8-40            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   CHAPTER 8:     COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



    Line   7                The figure on this line is computed as
                            follows:

                            Total expenses related to
                            reimbursables (the amount of
                            "Other Expenses")                           $9,595

                            Less expenses not directly
                            funded by the appropriation:
                              Depreciation on
                              Equipment                          $95
                              Supplies Used                      275       370
                            Funded cost of services
                            provided                                    $9,225

               8            The figure on this line is computed as
                            follows:

                            Total expenses related
                            to the appropriation
                            (Operating/Program
                            Expenses                                   $77,129

                            Less expenses not
                            funded by the
                            appropriation:
                              Expense Related to
                              Annual Leave                 $     175
                              Depreciation on
                              Equipment                          855
                              Supplies Used                    2.425    3,455

                            Funded Operating/
                            Program Expense                            $73.674

           11               This line shows the sum of Depreciation
                            Expense, $950, Expense for Supplies Used,
                            $2,700, and Annual Leave Expense, $175. The
                            word "unfunded" in the line description means
                            "unfunded by expended appropriations." Note
                            that the depreciation and supplies used are
                            related to the financing source "Appropriated
                            Capital Used" on line 4.  The annual leave



O   Page 8-41              GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                      expense is not funded. It will be paid with
                      future appropriations.

Line   14             This line shows the sum of the $15,000 for
                      equipment purchased and the $3,250 for
                      supplies purchased.

SF 222, Report
on Cash Flow
Line 2e               This line shows the sum of the following
                      liabilities:

                      Disbursements in Transit       $1,975
                      Accounts Payable                    25
                      Accrued, Funded Payroll             19
                                                     $21 019

       3b             This is from line 11 of the SF 221.
       3d             The description "increase in inventory" means
                      purchases of inventory less disposals of
                      inventory (by sale, transfer to other
                      agencies without reimbursement, or
                      scrapping). The Illustrative Federal Agency
                      had only purchases.

       3e             The description "increase in property, plant
                      and equipment" means purchases of property,
                      plant and equipment less disposals by sale,
                      trade-in, transfer to other agencies without
                      reimbursement, or scrapping. The
                      Illustrative Federal Agency had only
                      purchases.




Page 8-42             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




    SF 223, Report       This statement is based on the concept that
    on Reconciliation    the sum of operating expenses plus purchases
                         of fixed assets represents the amount of
                         disbursements that would be required if all
                         expenses involved had been paid in cash.
                         However, some of the expenses do not require
                         cash outlays. In the case of the
                         Illustrative Federal Agency, these are the
                         expenses for depreciation, supplies used, and
                         annual leave. Their sum is listed on lines
                         2c and 2d.
                         In addition, some of the expenses were
                         accrued such that they were recognized as
                         expenses but did not require cash outlays.
                         These must be deducted. On the other hand,
                         expenses may have been accrued in the prior
                         year and paid in Year A. They are not
                         included in expenses for the current year and
                         must be added. Because it was formed in the
                         current year, the Illustrative Federal Agency
                         had no beginning payables. However, payables
                         (including disbursements in transit), shown
                         on line 2b, had been accrued as of fiscal
                         year-end. Note that the computation includes
                         only funded payables, as no disbursements are
                         related to unfunded payables.
     Line 1               From SF 221, line 12.

          2a              From SF 221, line 14.

          2b             From SF 222, lines 2e and 2f

          2c             The $2,700 is the amount of supplies used
                         rather than the $550 increase in supplies,
                         because the SF 223 is incorrectly designed.
                         Both lines 1 and 2a include supplies used to
                         the extent they were purchased during the
                         accounting period, and hence, it must be
                         deducted on line 2c to make the report
                         balance. An alternative method to correct
                         the situation would be to place the $550

O   Page 8-43            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



                     increase in inventory on line 2c and reduce
                     the amount on line 2a by the amount of
                     merchandise acquire during the period. For
                     our example, line 2a would then become
                     $15,000 ($18,250 shown less $3,250 for
                     merchandise acquired). We are working with
                     Treasury and the SGIL Advisory Work Group to
                     correct the error in the form's construction.

 Line 2d              From SF 221, line 11.
      5              Note that this is the same amount as listed
                     on line 14 of the SF 133.

TFS 2108,            The purpose of this form is to account for
Year-End              the Fund Balance With Treasury held by the
Closing Statement     agency. The basic formula used is shown
                      on the next page.




Page 8-44             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:     COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                   PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




       Balance at Fiscal Year-End, before
       merging of old appropriations and
       return of unneeded funds                             Col. 2

       Less:     Transfer to merged appropriations          Col. 3
                 Return of unneeded funds                   Col. 4

       Equals Balance needed for pending transactions       Col. 5

       Plus funds expected to be received:

          From certain special authorizations               Col. 6
          From receivables relating to reimbursable
           work performed for others and certain
           refund items                                     Col. 7
          From unfilled customer orders                     Col. 8

      Equals funds available for disbursement               No column
                                                            provided
      Less expected disbursements:

         From undelivered orders                            Col. 9
         From funded liabilities                            Col. 10

      Equals funds expected to be available after
      expected collections and disbursements                Col. 11


                           Sources of the figures entered in the columns
                           of the TFS 2108 for our Illustrative Federal
                           Agency are set forth below.

     Column 2              This number, supplied by Treasury, is the
                           balance remaining in the account Fund Balance
                           With Treasury before any unused funds related
                           to unobligated appropriations are turned back
                           to Treasury. "Unexpended Balance" in the
                           column title means "Unexpended Fund Balance
                           With Treasury" as opposed to "Unexpended
                           Appropriations." For the Illustrative
                           Federal Agency, the figure is the sum of Fund
                           Balance With Treasury/A, $10,460, and Fund
                           Balance With Treasury/R, $-0-.


.   Page 8-45              GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



Column 3              Fiscal year A appropriation accounts will not
                      be "merged" until FY C.  (See pp. 2-35 and
                      2-36 for an explanation of merging.)

        4            The Unobligated Balance Withdrawn is the
                     balance in the budgetary account
                     Restorations, Writeoffs, and Withdrawals
                     before unused funds associated with
                     unobligated appropriations are returned.

        5             This is computed as col. 2 -   col. 3 - col. 4.

        6             There was no authorization other than that
                      relating to the basic operating
                      appropriation.

        7             This is the balance of the account Advances
                      to Others.

        8             The Illustrative Federal Agency has no orders
                      left to fill at fiscal year-end. If it did,
                      the figure would be the amount of Undelivered
                      Orders--Obligated less the amount of Advances
                      From Others related to the orders.

        9             This is the balance of the account
                      Undelivered Orders.

       10             This amount, $2,019, is the sum of the
                      following account balances.

                      Disbursements in Transit                 $1,975
                      Accounts Payable                             25
                      Accrued Funded Payroll Liability             19

                                                               $2 019

                      Note that only funded liabilities are
                      included in this sum. Unfunded liabilities,
                      such as that for annual leave, are not claims
                      on the FY A Fund Balance With Treasury, as
                      they will be financed through authority from
                      future appropriations.



Page 8-46             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.   CHAPTER 8:   COMPREHENSIVE EXAMPLE INTEGRATING BUDGETARY AND
                 PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK



    Column 11            This is the result of the following
                         computation:

                         col. 5 + col. 6 + col. 7 + col. 8 - col. 9-
                         col. 10.




    Page 8-47            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
CHAPTER 8:   COMPREHENSIVE EXAMPLE: INTEGRATING BUDGETARY AND
             PROPRIETARY ACCOUNTING FOR REIMBURSABLE WORK




                  (This page intentionally blank.)




Page 8-48             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
APPENDIX TO CHAPTER 8:    LEDGER ACCOUNTS




                     This appendix contains the following ledger
                     accounts, which show the postings related to
                     the entries illustrated in chapters 4 and 8:

                     1.    a general ledger of budgetary1 accounts
                           related to reimbursable work,

                     2.    a general ledger of proprietary
                           accounts related to reimbursable work,

                     3.    a subsidiary expense ledger supporting
                           the proprietary account Other Expenses,

                     4.    a general ledger of budgetary accounts
                           related to the operating appropriation,

                     5.    a general ledger of proprietary accountF
                           related to the operating appropriation,

                     6.    a subsidiary ledger in support of
                           budgetary accounts related to the
                           appropriation, and

                     7.    a subsidiary ledger in support of
                           Operating/Program Expenses.




                     1To simplify the illustrations, separate
                     general ledgers for budgetary and proprietary
                     accounts are maintained for both
                     appropriation-related and reimbursable-
                     related accounts. In practice, agencies may
                     combine all four sets of accounts in a single
                     general ledger or two general ledgers.

Page 8-49            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
     APPENDIX TO CHAPTER 8:     LEDGER ACCOUNTS




                             General ledger account titles are followed by
                             their SGL numbers. Throughout all ledgers,
                             dollar amounts are reported in thousands, and
                             a double-dashed line (===)    indicates the end
                             of transaction in FY A in each account. In
                             ledgers 4 through 7, a dashed line (---)
                             indicates the end of first quarter FY A
                             transactions. In addition, all account
                             titles have the data element "/R" or "/A" in
                             the title, indicating they are related to
                             reimbursable work or the operating
                             appropriation, respectively.




1.     GENERAL LEDGER--BUDGETARY ACCCIUNTS RELATED TO REIMBURSABLES


Account Name: Anticipated Reim-          Account Name: Authority Avail-
bursements and Other Income/R            able for Apportionment/R (4450)
(4210)
Trans.    Dr.     Cr.    Balance         Trans.    Dr.        Cr.     Balance

25        10,000                10,000   25                  10,000    10,000
CL-9                   405       9,595   26       10,000                   0
CL-10                9,595           0   ==



Account Name:  Apportionment             Account Name: Allotments Avail-
Available for Distribution/R             able for Commitment/Obligation/R
(4510)                                   (4610)
Trans.    Dr.     Cr.     Balance        Trans.    Dr.    Cr.    Balance
26               10,000    10,000        28               9,595    9,595
28      9,595                 405        29a       3,000           6,595
CL-9      405                   0        29b         125           6,470
                                         30        6,100              370
                                         31          370                0




     Page 8-50               GAO Accounting Guide:          September 1990
                             Appropriations and Reimbursables
.    APPENDIX TO CHAPTER 8:   L1EDGER ACCOUNTS




    Account Name: Commitments Avail-     Account Name: Undelivered
    able for Obligation/R (4700,         Orders/R (4800)
    Trans.    Dr.     Cr.    Balance     Trans.    Dr.    Cr.    Balance
    (Not used.)                          29a              3,000    3,000
                                         29b       3,000               0



    Account Name: Expended               Account Name: Reimbursable
    Appropriations/R (4900)              Orders Accepted/R (4220)
    Trans.    Dr.     Cr.     Balance    Trans.    Dr.     Cr.    Balance
    29b               3,125     :3,125   27                9,595    9,595
    30                6,100     9,225    CL-13     9,595                0
    31                  370     9,595    ==…
    CL-10   9,595                    0



    Account Name: Unfilled Customer      Account Name: Unfilled Customer
    Orders--Unobligated/R (4230)         Orders--Obligated/R (4240)
    Trans.    Dr.    Cr.     Balance     Trans.    Dr.    Cr.     Balance
    27      9,595              9,595     29a       3,000            3,000
    29a              3,000     15,595    29b         125            3,125
    29b                125     6,470     30        6,100            9,225
    30               6,100       370     31          370            9,595
    31                 370          0    32a              9,595         0



    Account Name: Reimbursements
    and Other Income Earned/R (4250)
    Trans.    Dr.     Cr.    Balance
    32a     9,595              9,595
    CL-13             9,595        0




     Page 8-51             GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
     APPENDIX TO CHAPTER 8:      LEDGER ACCOUNTS




2.    GENERAL LEDGER--PROPRIETARY ACCOUNTS RELATED TO REIMBURSABLES


Account Name: Fund Balance With            Account Name: Accounts Receiv-
Treasury/R (1010)                          able/R (1310)
Trans.    Dr.     Cr.   Balance            Trans.    Dr.    Cr.    Balance
27      5,000             5,000            32a       4,595           4,595
29c               3,125   1,875            32b              4,595        0
30                    6,100      (4,225)   ==…
31                      370      (4,595)
32b        4,595                      0



Account Name:      Accounts Payable/R      Account Name: Advances from
(2110)                                     Others/R (2310)
Trans.    Dr.         Cr.       Balance    Trans.    Dr.    Cr.    Balance
29b                   3,125       3,125    27               5,000    5,000
29c     3,125                         0    32a       5,000               0



Account Name: Cumulative Results           Account Name: Net Results of
of Operations/R (3310)                     Operations/R (3320)
Trans.    Dr.     Cr.    Balance           Trans.    Dr.     Cr.   Balance
CL-12                  0       0           CL-l1                 0       0
                                           CL-12         0               0



Account Name: Revenue from Ser-            Account Name: Other Expenses/R
vices Provided/R (5200)                    (6900)
Trans.    Dr.     Cr.   Balance            Trans.    Dr.    Cr.    Balance
32a               9,595   9,595            29b       3,125           3,125
CL-11   9,595                 0            30        6,100           9,225
                                           31          370           9,595
                                           CL-11            9,595        0




     Page 8-52                GAO Accounting Guide:          September 1990
                              Appropriations and Reimbursables
.        APPENDIX TO CHAPTER 8:       LEDGER ACCOUNTS




    3.     SUBSIDIARY LEDGER--OTHER EXPENSES


    Account Name: Depreciation                    Account Name: Payroll and
    Expense on Equipment/R                        Benefits Expense/R
    Trans.    Dr.     Cr.    Balance              Trans.    Dr.     Cr.   Balance
    31         95                 95              30        6,100           6,100
    CL-li                 95       0              CL-l1             6,100       0



    Account Name: Expense for                     Account Name:         Travel Expense/R
    Supplies Used/R
    Trans.    Dr.    Cr.    Balance               Trans.       Dr.         Cr.       Balance
    31        275               275               29           3,125                   3,125
    CL-11              275        0               CL-11                    3,125           0




    4.     GENERAL LEDGER--BUDGETARY ACCOUNTS RELATED TO THE APPROPRIATION


    Account Name: Other Appropria-                Account Name: Authority Avail-
    tions Realized/A (4119)                       able for Apportionment/A (4450)
    Trans.    Dr.     Cr.   Balance               Trans.    Dr.     Cr.    Balance
    1        100,000                 100,000      1                      100,000     100,000
    ____________________________.___ 2                        31,000                  69,000
    CL-5                    546       99,454       -------------------------------
    CL-6                91,554          7,900      13         69,000                       0
                 …===========================-==== CL-3                      546         546
                                                  CL-4            546                      0




.        Page 8-53                GAO Accounting Guide:          September 1990
                                  Appropriations and Reimbursables
  APPENDIX TO CHAPTER 8:       LEDGER ACCOUNTS




Account Name:  Apportionment               Account Name:    Allotments Avail-
Available for Distribution/A               for Commitment/Obligation/A
(4510)                                     (4610)
Trans.    Dr.     Cr.    Balance           Trans.    Dr.       Cr.    Balance
2                31,000   31,000           3                  30,000   30,000
3      30,000              1,000           4        16,000             14,000
________________________________           5         1,250             12,750
13               69,000   70,000           6         4,000              8,750
14     70,000                   0          8            100             8,650
CL-2                546       546          9a        7,400              1,250
CL-3      546                   0          10a                     50   1,300

                                           14                   70,000     71,300
                                           15a        32,500               38,800
                                           15b           100               38,700
                                           16a        16,000               22,700
                                           16d            25               22,675
                                           17a        22,580                    95
                                           18a            50                    45
                                           19c            19                    26
                                           31                      370         396
                                           CL-1                    150        546
                                           CL-2           546                    0



Account Name:        Commitments Avail-    Account Name:        Undelivered
able for Obligation/A (4700)               Orders/A (4800)
Trans.        Dr.         Cr.    Balance   Trans.        Dr.         Cr.    Balance
4                       16,000    16,000   5                       17,000    17,000
5         15,750                     250   6                         4,000   21,000
--------------------------------           8             8,900               12,100
15a                     32,500    32,750   10a           3,950                8,150
15b       32,600                     150   --------------------------------
CL-1          150                      0   15b                     32,700    40,850
                                           16a                     16,000    56,850
                                           16d          16,000               40,850
                                           18a          32,950                7,900

                                           22          7,900                     0




  Page 8-54                GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
.        APPENDIX TO CHAPTER 8:      LEDGER ACCOUNTS




    Account Name: Expended                      Account Name: Restorations,
    Appropriations/A (4900)                     Writeoffs, and Withdrawals/A
                                                (4391)
    Trans.       Dr.      Cr.       Balance     Trans.     Dr.    Cr.    Balance
    8                     9,000       9,000     (Account not used in first
                                                 quarter.)
    9a                    7,400      16,400     CL-4                546      546
    10a                   3,900      20,300

    16d                  16,025      36,325     Account Name:  Appropriations
    17a                  22,580      58,905     Realized but Withdrawn/A (4114)
    18a                  33,000      91,905
    19c                      19      91,924     Trans.    Dr.     Cr.    Balance
    31           370                 91,554     (Account not used during first
    CL-6      91,554                      0     quarter.)
                                          ===   CL-5          546                  546
    22                    7,900       7,900




    5. GENERAL LEDGER--PROPRIETARY ACCOUNTS RELATED TO THE APPROPRIATION


    Account Name: Fund Balance With             Account Name: Undeposited
    Treasury/A (1010)                           Collections/A (1110)
    Trans.     Dr.    Cr.   Balance             Trans.       Dr.       Cr.      Balance
    1      100,000          100,000             10c              50                  50
    7b                1,500  98,500             10d                        50         0
    9b                7,400  91,100             -------------------------------
    lod         50           91,150             16e               5                   5
    10e               2,700  88,450             16f                          5        0

    16c                   5,000      83,450     20a             5                    5
    16f              5               83,455     20b                       5          0
    16h                  10,785      72,670
    17b                  22,580      50,090
    18c                  40,000      10,090
    31           370                 10,460
    CL-5                    546       9,914

    20b              5                9,919
    21b                      19       9,900
    23b                   9,900           0


.        Page 8-55                GAO Accounting Guide:          September 1990
                                  Appropriations and Reimbursables
  APPENDIX TO CHAPTER 8:          LEDGER ACCOUNTS




Account Name: Advances to                   Account Name: Inventory for
Others/A (1410)                             Agency Operations/A (1510)
Trans.    Dr.    Cr.    Balance             Trans.    Dr.     Cr.    Balance
7a      1,500             1,500             8           750              750
10a              1,200      300              L2a                400      350
10c                        50         250   --                …----------------------------

_______________________________             :L8a      2,500                                   2,850
16b     5,000             5,250             :L9a                     2,300                      550
16d                  5,240             10   ==                …


16e                         5           5   24                              450                 100

20a                         5           0


Account Name:     Equipment/A               Account Name:  Accumulated
(1750)                                      Depreciation on Equipment/A
                                            (1759)
Trans.      Dr.      Cr.          Balance    Crans.   Dr.     Cr.    Balance
8         3,000                     3,000   :L2b                150      150

18a      12,000                    15,000   1L9b                            800                 950

                                            24                        1,500                   2,450




  Page 8-56                     GAO Accounting Guide:         September 1990
                                Appropriations and Reimbursables
.     APPENDIX TO CHAPTER 8:      LEDGER ACCOUNTS




    Account Name:  Disbursements in        Account Name:        Accounts
    Transit/A (2120)                       Payable/A (2110)
    Trans.    Dr.     Cr.    Balance       Trans.        Dr.        Cr.       Balance
    7a                1,500    1,5;00      8                         9,000      9,000
    7b      1,500                   0      10a                      2,700      11,700
    9a                7,400    7,400       10b           2,700                  9,000
    9b      7,400                   0      11            8,500                    500
    10b               2,700    2,700       --------------------------------
    10e     2,700                   0      16d                     10,785     11,285
    11                8,500    8,'500      16g          10,785                   500
    _____________________________.__-      18a                     33,000     33,500
    16b               5,000   13,500       18b         33,475                     25
    16c     5,000              8,!500
    16g              10,785   19,285       22                      7,900       7,925
    16h    10,785              8,500       23a          7,925                      0
    17a              22,580   31,080
    17b    22,580              8,!500
    18b              33,475   41,975
    18c    40,000              1,975

.   21a
    21b           19
                          19       1,994
                                   1,975
    23a                7,925       9,300
    23b     9,900                      0


    Account Name:  Accrued Funded          Account Name:   Other Liabilities
    Payroll and Benefits/A (2210)          (To Return Unused Appropriation/A
                                           to Treasury.) (2990)
    Trans.    Dr.     Cr.      Balance     Trans.    Dr.      Cr.     Balance
    (Account not used in first             (Account not used in first)
    quarter.)             19        19     quarter.)
    19c                   19        19     CL-4                 546        546
                                           CL-5        546                   0
    21a           19                   0




.     Page 8-57                GAO Accounting Guide:
                               Appropriations and Reimbursables
                                                               September 1990
     APPENDIX TO CHAPTER 8:    LEDGER ACCOUNTS




Account Name:  Accrued Unfunded          Account Name: Appropriated
Annual Leave/A (2220)                    Capital/A (3100)
Trans.    Dr.     Cr.    Balance         Trans.    Dr.      Cr.   Balance
12c                   75      75         1                100,000 100,000
________________________________         ,3        9,000           91,000
19e                 100      175         9a        7,400           83,600
                                         =0a       3,900           79,700

                                         16d      16,025           63,675
                                         17a      22,580           41,095
                                         18a      33,000            8,095
                                         19c          19            8,076
                                         :31                 370    8,446
                                         CL-4        546            7,900

                                         22        7,900                0


Account Name:  Capital                   Account Name:   Cumulative Results
Investments/A (3210)                     of Operations/A (3310)
Trans.    Dr.     Cr.          Balance   Trans.    Dr.      Cr.    Balance
8                 3,750          3,750   (Account not used in first
12a       400                    3,350   quarter.)
12b       150                    3,200   CL-8        175              (175)

18a                 14,500      17.700
19a        2,300                15,400
19b           800               14,600

24         1,950                12,650




     Page 8-58               GAO Accounting Guide:          September 1990
                             Appropriations and Reimbursables
.    APPENDIX TO CHAPTER 8:   LEDGER ACCOUNTS




    Account Name:  Net Results of       Account Name:  Appropriated
    Operations/A (3320)                 Capital Used/A (5700)
    Trans.    Dr.     Cr.    Balance    Trans.    Dr.     Cr.    Balance
    (Account not used in first          8                 5,250    5,250
    quarter.)                           9a                7,400   12,650
    CL-7      175               (175)   10a               3,900   16,550
    CL-8                175        0    12a                 400   16,950
                                        12b                 150   17,100

                                        16d              16,025   33,125
                                        17a              22,580   55,705
                                        18a              18,500   74,205
                                        19a               2,300   76,505
                                        19b                 800   77,305
                                        19c                  19   77,324
                                        31         370            76,954
                                        CL-7    76,954                 0



.   Account Name:  Operating/Program
    Expenses/A (6100)
    Trans.    Dr.     Cr.    Balance
    8       5,250              5,250
    9a      7,400             12,650
    b1a     3,900             16,550
    12a       400             16,950
    12b       150             17,100
    12c        75             17,175

    16d    16,025             33,200
    17a    22,580             55,780
    18a    18,500             74,280
    19a     2,300             76,580
    19b       800             77,380
    19c        19             77,399
    19e       100             77,499
    31                  370   77,129
    CL-7             77,129        0




.    Page 8-59             GAO Accounting Guide:          September 1990
                           Appropriations and Reimbursables
    APPENDIX TO CHAPTER 8:                          LEDGER ACCOUNTS




6. SUBSIDIARY LEDGER--BUDGETARY ACCOUNTS


Account Name: Salaries and Benefits/A
         Allot-              Unde-    Expended
Trans-   ments    Commit-    livered Appro-                                            Allotments
action   Made     ments      Orders   priations                                        Available
3         7,500                                                                             7,500
9                                               _                     _      7,400           100
Subtotal          7,500                         0                     0      7,400           100
___________________________________._________________________


14       22,500                                                                           22,600
17a                                                                         22,580            20
19c                                             _____                            19             1
Subtotal 30,000                                 0                      0    29,999              1
CL-2                     (1)                    _                     _           0
Total            29,999                         0                      0    29,999              0



Account Name: Travel/A
         Allot-                                           Unde-            Expended
Trans-   ments    Commit-                                 livered          Appro-      Allotments
action   Made     ments                                   Orders           priations   Available
3         4,500                                                                             4,500
6                                                               4,000                         500
10a                                             _           (3,950)         -3,900            550
Subtotal          4,500                         0                     50      3,900           550
___________________________________.________________________-


14               15,500                                                                    16,050
16a                                                         16,000                             50
16d                                             -         (16,000)           16,025            25
Subtotal 20,000                                 0                     50    19,925             25
CL-2                   (25)                     -                _-         -_                  0
Total            19,975                         0                     50     19,925             0




    Page 8-60                               GAO Accounting Guide:          September 1990
                                            Appropriations and Reimbursables
.     APPENDIX TO CHAPTER 8:                   LEDGER ACCOUNTS




    Account Name: Fixed Assets, Materials, and Services/A
             Allot-              Unde-    Expended
    Trans-   ments    Commit-    livered Appro-      Allotments
    action   Made     ments      Orders   priations Available
    3        18,000                                      18,000
    4                  16,000                             2,000
    5                 (15,750)    17,000                    750
    8                             (8,900)    9.000          650
    Subtotal 18,000       250      8,100     9,000          650
    _____________________________,_______________________________

    14       32,000                                                               32,650
    15a                            32,500                                            150
    15b                           (32,600)           32,700                           50
    18a                                             (32,950)        33,000             0
    31                                                                (370)          370
    Subtotal 50,000                     150            7,850        41,630           370
    CL-1                               (150)                                         520
    CL-2       (520)                                                                   0
    Total    49,480                        0           7,850        41,630             0




    7. SUBSIDIARY LEDGER--OPERATI:NG/PROGRAMEXPENSES


    Account Name: Depreciation                             Account Name: Payroll and
    Expense on Equipment/A                                 Benefits Expense/A
    Trans.    Dr.     Cr.    Balance                       Trans.       Dr.       Cr.       Balance
    12b       150                150                       9a           7,400                 7,400
    ____________________________.___                       12c              75                7,475
    i9b       800                950                       --------------------------------
    31                    95     855                       17a        22,580                 30,055
    CL-7                855        0                       19c              19               30,074
                                                           19e            100                30,174
                                                           CL-7                  30,174           0




.     Page 8-61                         GAO Accounting Guide:
                                        Appropriations and Reimbursables
                                                                                  September 1990
  APPENDIX TO CHAPTER 8:                          LEDGER ACCOUNTS




Account Name:               Personal Services                     Account Name: Expense for
Expense/A                                                         Supplies Used/A
Trans.    Dr.                       Cr.          Balance          Trans.    Dr.    Cr.    Balance
8       5,250                                      5,250          12a         400             400

18a         18,500                                  23,750            19a    2,300           2,700
CL-7                               23,750                       0     31       275           2,425
                                     …=============================== CL-7           2,425       0



Account Name:               Travel Expense/A

Trans.          Dr.                 Cr.          Balance
10a           3,900                                3,900
________________________________


16d         16,025                                 19,925
CL-7                               19,925               0




  Page 8-62                                  GAO Accounting Guide:         September 1990
                                             Appropriations and Reimbursables
APPENDIX I:   STANDARD GENERAL LEDGER ACCOUNTS USED




                      Following is a listing of the Standard
                      General Ledger accounts used in the preceding
                      chapters. Account numbers, account titles,
                      and normal balances are shown.

                    SGL
                    Account:                                    Normal
                    Number        SGL Account Title            Balance
ASSETS                1010     Fund Balance With Treasury         Dr.
                      1110     Undeposited Collections            Dr.
                      1310     Accounts Receivable                Dr.
                      1410     Advances to Others                 Dr.
                      1510     Inventory for Agency Operations    Dr.
                      1530     Inventory--Raw Materials and       Dr.
                                Supplies
                      1540     Inventory--Work in Process         Dr.
                      1550     Inventory--Finished Goods          Dr.
                      1750     Equipment                          Dr.
                      1759     Accumulated Depreciation on        Cr.
                                Equipment



LIABILITIES           2110     Accounts Payable                   Cr.
                      2120     Disbursements in Transit           Cr.
                      2210     Accrued Funded Payroll and         Cr.
                                Benefits
                      2220     Accrued Unfunded Annual Leave      Cr.
                      2990     Other Liabilities (To return       Cr.
                                Unused Appropriation to
                                Treasury.)
                      2310     Advances From Others               Cr.



CAPITAL               3100     Appropriated Capital               Cr.
                      3210     Capital Investments                Cr.
                      3310     Cumulative Results of Operations   Cr.
                      3320     Net Results of Operations          Cr.



Page 9-1             GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
APPENDIX I:   STANDARD GENERAL LEDGER ACCOUNTS USED



BUDGET                4114   Appropriations Realized but      Dr.
ACCOUNTS                      Withdrawn
                      4119   Other Appropriations Realized    Dr.
                      4210   Anticipated Reimbursements       Dr.
                              and. Other Income
                      4220   Reimbursable Orders Accepted     Cr.
                      4230   Unfilled Customer Orders--       Dr.
                              Unobligated
                      4240   Unfilled Customer Orders--       Dr.
                              Obligated
                      4250    Reimbursements and Other        Dr.
                               Income Earned
                      4391    Restorations, Writeoffs, and    Cr.
                              Withdrawals
                      4450   Authority Available for          Cr.
                              Apportionment
                      4510   Apportionment Available for      Cr.
                              Distribution
                      4610   Allotments Available for         Cr.
                              Commitment/Obligation
                      4630    Other Funds Unavailable for
                               Commitment/Obligation           Cr.
                      4700    Commitments Available for        Cr.   W
                               Obligation
                      4800    Undelivered Orders               Cr.
                      4900    Expended Appropriations          Cr.


REVENUES AND          5100   Revenue From Goods Sold          Cr.
FINANCING SOURCES     5200   Revenue From Services Provided   Cr.
                      5700   Appropriated Capital Used        Cr.


EXPENSES              6100   Operating/Program Expenses        Dr.
                      6500   Cost of Goods Sold                Dr.
                      6600   Applied Overhead                  Cr.
                      6900   Other Expenses                    Dr.




Page 9-2             GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANL3ACTIONSUSED



                      For ease of reference, this appendix
                      provides a listing by chapter of the basic
                      journal entries presented in the guide.
                      Also included are brief transaction
                      descriptions and transaction numbers.


CHAPTER 2             2-1   ro record the receipt of appropriation
ENTRIES                     authority:

                      Other Appropriations Realized
                         Authority Available for Apportionment


                      2-2   To   record an apportionment:

                      Authority Available for Apportionment
                         Apportionment Available for Distribution



                      2-3   To record an allotment:

                      Apportionment Available for Distribution
                         Allotments Available for
                         Commitment/Obligation



                      2-4   To record a commitment:
                      Allotments Available for
                      Commitment/Obligation
                         Commitments Available for Obligation




Page 10-1             GAO Accounting Guide:          September 1990
                      Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     2-5   To record an obligation:

                     Commitments Available for Obligation
                       Undelivered Orders
                                          i   *   *   *   *


                     2-6   To record receipt of goods and
                           services:

                     Undelivered Orders
                       Expended Appropriations
                                          i   *   *   *   *


                     2-7   To remove unobligated commitments from
                           the accounts:

                     Commitments Available for Obligation
                       Allotments Available for
                       Commitment/Obligation



                     2-8   To remove unused allotment authority
                           from the accounts:

                     Allotments Available for
                     Commitment/Obligation
                        Apportionment Available for Distribution



                     2-9   To remove the apportionment authority
                           from the books:

                     Apportionment Available for Distribution
                       Authority Available for Apportionment




Page 10-2            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED



                          2-10   To establish the account for budget
                                 authority which must be returned to
                                 Treasury:
                         Authority Available for Apportionment
                            Restorations, Writeoffs, and Withdrawals


                          2-11   To reduce the appropriation by the
                                 amount of budget authority returned to
                                 Treasury when the return is made:

                         Appropriations Realized but Withdrawn
                            Other Appropriations Realized



                          2-12   To remove expended appropriations from
                                 the accounts:
*                        Expended Appropriations
                            Other Appropriations Realized



                          2-13   To record lapsed budgetary authority
                                 withdrawn after year-end before
                                 reporting to Treasury:

                         Appropriations Realized but Withdrawn
                            Other Funds Unavailable for
                            Commitment/Obligation



                         2-14    To remove cancelled orders after year-
                                 end:
                         Other Funds Unavailable for
                         Commit~ment/Obligation
                            Restorations, Writeoffs, and Withdrawals



O   Page 10-3            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     2-15   To record reporting of previously
                            withdrawn budgetary authority to
                            Treasury after year-end:

                     Other Funds Unavailable for
                     Commitment/Obligation
                        Appropriations Realized but Withdrawn


                     2-16   To record receipt of goods and
                            services after year-end in an amount
                            less than obligated:

                     Undelivered Orders
                        Expended Appropriations
                        Other Appropriations Realized



                     2-17   To record the restoral of previously
                            withdrawn budgetary authority before
                            reporting the restoral to Treasury:

                     Undelivered Orders
                     Other Appropriations Realized
                        Expended Appropriations



                     2-18   To record the receipt of goods and
                            services after year-end when cost
                            exceeds the amount obligated:

                     Restorations., Writeoffs, and Withdrawals
                        Other Funds Unavailable for
                        Commitment/Obligation
                                          ,*   *   *   *   *


                     2-19   To record reporting to Treasury of
                            previously recorded restoral of
                            budgetary authority used:



Page 10-4            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         Restorations, Writeoffs, and Withdrawals
                            Other Funds Unavailable for
                               Commitment/Obligation




    CHAPTER 3            3-1    To record an agency's appropriation
    ENTRIES                     upon receipt of an appropriation
                                warrant from Treasury:

                         Fund Balance With Treasury
                            Appropriated Capital



                         3-2    To return unused Fund Balance With
                                Treasury related to expired
                                appropriations to be returned to
*                               Treasury:

                         Appropriated Capital
                            Fund Balance With Treasury



                         3-3    'To establish a liability to return
                                funds relating to expired
                                appropriations:

                         Appropriated Capital
                            Other Liabilities



                         3-4    To return to Treasury lapsed funds
                                previously recorded as a liability:

                         other Liabilities
                            Fund Balance With Treasury




.   Page 10-5            GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIOWSUSED




                     3-5   To record use of appropriations to
                           finance expenses other than
                           depreciation and supplies used:

                     Appropriated Capital
                        Appropriated Capital Used



                     3-6   To close the Appropriated Capital Used
                           account:

                     Appropriated Capital Used
                        Net Results of Operations



                     3-7   To close Net Results of Operations when
                           expenses exceed revenues:

                     Cumulative Results of Operations
                        Net Results of Operations




                     3-8   To close Net Results of Operations when
                           revenues exceed expenses:

                     Net Results of Operations
                        Cumulative Results of Operations



                     3-9   To close the Operating/Program Expenses
                           account:

                     Net Results of Operations
                        Operating/Program Expenses




Page 10-6            GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         3-10   To request disbursements from
                                Treasury:

                         Assets,, Expenses, Liabilities, etc.
                             Disbursements in Transit



                         3-11   To receive notice from Treasury that
                                disbursements have been made:

                         Disbursements in Transit
                            Fund Balance With Treasury



                         3-12   To record the purchase of inventory
                                and fixed assets (property, plant, and
                                equipment):

                         Inventory
                         Fixed Assets (by type)
                            Accounts Payable (or other
                            appropriate account)



                         3-13   To record the transfer of capital
                                related to the purchase of inventory
                                and fixed assets:
                         Appropriated Capital
                            Capital Investments



                         3-14   To record the use of inventory in
                                agency operations:

                         Operating/Program Expenses
                            Inventory




    Page 10-7            GAO Accounting Guide:           September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONS USED




                      3-15   To record depreciation on fixed
                             assets:

                      Operating/Program Expenses
                         Accumulated Depreciation on Fixed Assets



                      3-16   To record the transfer of capital
                             related to depreciation or fixed
                             assets and use of inventory:

                      Capital Investments
                         Appropriated Capital Used



                      3-17   To close Appropriated Capital Used:

                      Appropriated Capital Used
                         Net Results of Operations



                      3-18   To record the adjusting entry for the
                             amount of disbursements in transit at
                             the balance sheet date:

                      Fund Balance With Treasury
                         Disbursements in Transit




CHAPTER 6             6-1    To record estimated budget authority
ENTRIES                      from reimbursable work orders:

                      Anticipated Reimbursements and Other Income
                         Authority Available for Apportionment

                                           *   *   *   **




Page 10-8             GAO Accounting Guide:         September 1990
                      Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSA.CTIONSUSED




                          6-2    To record acceptance of a reimbursable
                                 work order:

                          Unfilled Customer Orders--Unobligated
                             Reimbursable Orders Accepted



                          6-3    To record obligation of budget
                                 authority for a reimbursable work
                                 order:

                          Unfilled Customer Orders--Obligated
                             Unfilled Customer Orders--Unobligated



                          6-4    To record receipt of goods and services
                                 for filling a reimbursable work order:

                          Unfilled Customer Orders--Obligated
                             Reimbursements and Other Income Earned



                          6-5    To remove unobligated commitments from
                                 the accounts:

                          Commitments Available for Obligation
                             Allotments Available for
                                Commitment/Obligation



                          6-6    To remove unused allotment authority
                                 from the accounts:

                          Allotments Available for
                          Commitment/Obligation
                             Apportionment Available for Distribution




O   Page 10-9             GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     6-7    To remove the apportionment authority
                            from the books:

                     Apportionment: Available for Distribution
                        Authority Available for Apportionment



                     6-8    To close the authority available for
                            apportionment against the anticipated
                            reimbursement authority:

                     Authority Available for Apportionment
                        Anticipated Reimbursements and Other
                        Income



                     6-9    To remove expended appropriations from
                            the accounts:

                     Expended Appropriations
                        Other Appropriations Realized


                     6-10    To remove orders for which no related
                             goods and services have been ordered
                             or received:

                     Reimbursable Orders Accepted
                        Unfilled Customer Orders--Unobligated



                     6-11    To remove completed orders from the
                             books:
                     Reimbursable Orders Accepted
                        Reimbursements and Other Income Earned




Page 10-10           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         To remove cancelled orders from the books:

                         6-12    Track 1 entry

                         Undelivered Orders
                            Anticipated Reimbursements and Other
                            Income



                         6-13    Track 2 entry

                         Reimbursable Orders Accepted
                            Unfilled Customer Orders--Obligated


                         To record the receipt of reimbursable goods
                         and services in an amount less than
                         obligated:
                          6-14   Track 1 entry

                         Undelivered Orders
                            Expended Appropriations
                            Anticipated Reimbursements and Other
                            Inccme



                          6-15   Track 2 entry
                         Reimbursements and Other Income Earned
                         Reimbursable Orders Accepted
                            Unfilled Customer Orders--Obligated



                         To record receipt of reimbursable goods and
                         services in an amount greater than
                         obligated:




    Page 10-11           GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     6-16   Track 1 entry

                     Undelivered Orders
                     Anticipated Reimbursements and Other Income
                        Expended Appropriations



                     6-17   Track 2 entry

                     Reimbursements and Other Income Earned
                        Reimbursable Orders Accepted
                        Unfilled Customer Orders--Obligated




APPENDIX TO          6A-1   To record anticipated orders:
CHAPTER 6
ENTRIES              Anticipated Reimbursements and Other Income
                        Authority Available for Apportionment

                                          i*   *   *   *


                     6A-2   To record apportionment of budget
                            authority:

                     Authority Available for Apportionment
                        Apportionment Available for Distribution



                     6A-3   To record allotment of budget
                            authority:

                     Apportionment Available for Distribution
                        Allotments Available for
                        Commitment/Obligation




Page 10-12           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
*   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         7-2    To accept a reimbursable work order and
                                deposit the monies (or receive
                                confirmation of a transfer of funds)
                                with Treasury:
                         Fund Balance With Treasury
                            Undeposited Collections



                          7-3   To pay for agency operating expenses,
                                some of which will later be used for
                                reimbursable work:

                         Operating/Program Expenses
                           Fund Balance With Treasury



                         To record depreciation expense and
                         consumption of supplies, a portion of which
                         will later be allocated to reimbursable
                         work:

                         7-4    Operating/Program Expenses
                                  Accumulated Depreciation on
                                  Equipment
                                  Inventory for Agency Operations

                                                 and
                         7-5    Capital Investments
                                  Appropriated Capital Used



                          7-6   To allocate agency expenses other than
                                depreciation and supplies used to the
                                Other Expenses account when the goods
                                and services involved are used in
                                performing reimbursable work:




    Page 10-15           GAO Accounting Guide:            September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     Other Expenses
                        Operating/Program Expenses



                     To allocate agency expenses for depreciation
                     and supplies used that were initially funded
                     by an appropriation but are chargeable
                     against reimbursable activities to the Other
                     Expenses account:


                     7-6    Other Expenses
                               Operating/Program Expenses

                                           and

                     7-7    Appropriated Capital Used
                               Appropriated Capital



                     To record the purchase of supplies:

                     7-8    Inventory of Agency Operations
                               Fund Balance With Treasury

                                           and

                     7-9    Appropriated Capital
                               Capital Investments



                     To record the use of supplies:

                     7-10   Operating/Program Expenses
                               Inventory for Agency Operations

                                           and

                     7-5    Capital Investments
                               Appropriated Capital Used




Page 10-16           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         6A-4    T.Jo record receipt of reimbursable
                                 orders:
                         Reimbursable Orders Accepted
                            Anticipated Reimbursements and Other
                             Income



                          6A-5   To record commitments for reimbursable
                                 orders:

                         Allotments Available for
                         Commitment/Obligation
                             Commitments Available for Obligation



                          6A-6   To record purchase orders for goods
                                 aLnd services committed:
                         Commitments Available for Obligation
                            Undelivered Orders



                         6A-7    To record receipt of goods and
                                 services ordered:

                         Undelivered Orders
                            Expended Appropriations



                         6A-8    To cancel order for reimbursable goods
                                 and services after year-end:

                         Undelivered Orders
                            Reimbursable Orders Accepted




O   Page 10-13           GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED




                     6A-9    To remove expended appropriations from
                             the accounts:

                             Expended Appropriations
                                Reimbursable Orders Accepted



                     6A-10 To record orders for reimbursable
                           goods and services received after
                           year-end when invoice is less than
                           obligation:

                             Undelivered Orders
                                Reimbursable Orders Accepted
                                Expended Appropriations



                     6A-11    To record orders for reimbursable
                              goods and services received after
                              year-end when invoice is more than
                              obligation:

                              Undelivered Orders
                              Reimbursable Orders Accepted
                                 Expended Appropriations




CHAPTER 7            7-1    To record receipt of an advance for
ENTRIES                     reimbursable work to be performed along
                            with a procurement order to perform the
                            work:

                        Undeposited Collections
                           Advances From Others




Page 10-14           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANISACTIONSUSED




                          7-11   To recognize revenue from provision of
                                 services:

                          Advances From Others
                             Revenue From Services Provided



                          7-12   To purchase raw materials and supplies
                                 on account:

                          Inventory--Raw Materials and Supplies
                             Accounts Payable



                          7-13   To draw raw materials for use in
                                 filling orders:

                          Inventory--Work in Process
                             Inventory--Raw Materials and Supplies



                          7-14   To charge payroll expenses paid in the
                                 agency payroll process to orders:

                          Inventory--Work in Process
                             Operating/Program Expenses



                          7-15   To apply overhead to work in process:

                          Inventory--Work in Process
                             Applied Overhead



                          7-16   To record completion of goods in
                                 process:

                          Inventory--Finished Goods
                             Inventory--Work in Process




    Page 10-17            GAO Accounting Guide:          September 1990
                          Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED



                     7-17    To record revenue earned from the sale
                             of goods:

                     Accounts Receivable (if advances are
                     insufficient)
                     Advances From Others
                        Revenue From Goods Sold
                                          i   *   *   *   *


                     7-18    To record cost of goods sold for the
                             completed work:

                     Cost of Goods Sold
                        Inventory--Finished Goods



                     To charge actual overhead expenses to
                     reimbursable accounts:

                     7-19   Applied Overhead
                               Operating/Program Expenses

                     If actual overhead includes a portion of
                     depreciation and supplies used already
                     charged against Appropriated Capital, the
                     following entry must also be made:

                     7-7    Appropriated Capital Used
                               Appropriated Capital



                     7-20    To close overapplied overhead into
                             Cost of Goods Sold:

                     Applied Overhead
                        Cost of Goods Sold
                                          *   *   *   *   *




Page 10-18           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
.   APPENDIX II:   GENERIC TRANSACTIONSUSED




                         7-21   To close underapplied overhead into
                                Cost of Goods Sold:

                         Cost of Goods Sold
                            Applied Overhead




    Page 10-19           GAO Accounting Guide:          September 1990
                         Appropriations and Reimbursables
APPENDIX II:   GENERIC TRANSACTIONSUSED                              0




                 (This page intentionally blank.)                    0




Page 10-20           GAO Accounting Guide:          September 1990
                     Appropriations and Reimbursables
    0~~~~~~~~~~~~~~~~~~~~~~~~~~
    INDEX




                    The page numbers used in this index indicate
                    the chapter followed by the page within the
                    chapter.

                    Account,
                      capital, 3-4, 3-16, 3-21
                      "M ELppropriation," 2-35
                      Standard General Ledger (SGL), 2-1, 2-5,
                        2-16, 2-18, 2-27, 3-1, 3-4, 3-5, 3-6
                        3-8, 3-10, 3-16, 6-2, 6-3, 6-4, 6-5,
                        6-9, 6-10, 6-35, 7-2, 8-1, 8-50

                    Act,
                      Budget and Accounting Act of 1921, 1-1,
                        1-11
                      Budget and Accounting Procedures Act of
                         1950, 1-11
                      Debt: Collection, 1-13
                      Federal Managers' Financial Integrity,
                         1-13
                      Federal Property and Administrative
                        Services,    1-11
                      Prompt Payment, 1-12

                    Allotment,
                      unused.    See unused allotment authority.

                    Apportionment,
                      authority available for, 2-2, 2-5, 2-6,
                        2-17, 2-18, 6-21, 6-48, 6-52

                    Appropriation,
                      expended, 2-3, 2-5,    2-6, 2-14, 2-15, 2-16,
                        2-21, 2-25, 4-62,    5-1, 5-2, 5-3, 5-13,
                        6-10, 6-21, 6-29,    6-48, 6-49, 6-50,
                        6-51, 6-52, 8-38,    8-40




.   Page 11-1       GAO Accounting Guide:          September 1990
                    Appropriations and Reimbursables
INDEX




              operating, 1-6, 1-8, 1-9, 2-2, 2-25, 3-1,
                3-8, 4-1, 7-1, 8-50
              receipt of, 2-7, 3-8
              return of, 2-14, 2-15, 2-16, 2-17, 2-18,
                3-9, 3-10, 4-62
              warrant, 3-8

            Authority,
              apportionment, 2--7, 2-17, 6-48
              consumption of appropriation, 3-8, 3-10,
                3-11
              disbursing, 3-9, 3-15
              expired apportionment, 2-17, 6-21, 6-48
              unused allotment, 2-17, 6-20, 6-47
              spending, 2-15, 6-3

            Budgetary,
              accounting for appropriations, 1-5, 2-16,
                3-1, 3-2, 4-1, 5-1
              accounting for reimbursables, 6-1, 6-3,
                6-5, 6-6, 6-36
              accounts, 2-1, 2-16, 4-2, 4-80, 6-19,
                6-27, 6-28, 6-44, 6-45, 8-1, 8-49

            Capital,
              transfer cf, 3-10, 3-16, 3-19, 3-21, 3-23,
                7-10

            Closing Entry, 2-14, 2-21, 2-25, 6-19, 6-24,
              6-27, 6-43, 6-44

            Commitment,
              unobligated, 2-16, 6-19, 6-44

            Crosswalk,
              SGL, 2-36, 4-56, 6-33, 6-35, 8-38
              between tracks, 6-52, 6-53

            Disbursement;,   1-1, 1-4, 2-15, 3-3, 3-9,
              3-14, 3-15,    4-67, 4-68, 4-69, 8-43




Page 11-2   GAO Accounting Guide:         September 1990
            Appropriations and Reimbursables
.   INDEX




                Equity of the U.S. Government, 3-3, 3-5,
                  3-6, 3-7, 3-18, 3-19, 4-41, 7-3, 8-25

                Expenditures,
                  accrued, 4-58, 5-1, 8-40

                Financial statements,
                  balance sheet, 3-9, 4-41, 8-26
                  changes in equity of the U.S. Government,
                  3-20, 4-43, 8-25
                  changes in financial position, 4-45, 8-27
                  GAO standards for, 1-4, 1-12, 1-13, 3-1,
                     4-41, 8-23
                  operating statement, 3-10, 4-41, 7-8, 8-24
                  required by OMB, 4-2, 4-46, 6-51, 8-28
                    SF 133, 4-47, 4-56, 8-29, 8-38
                  required by Treasury, 3-9, 4-2, 4-46,
                    6-51, 8-30
                    SF 220, 4-46, 4-48, 8-28, 8-30
                    SF 221, 4-46, 4-51, 8-28, 8-33
                    SF 222, 4-46, 4-53, 8-28, 8-34
                    SF 223, 4-46, 4-54, 8-28, 8-35
                    TFS 2108, 4-46, 4-55, 8-28, 8-36

                Financing source, 3-5, 3-7, 3-21, 7-3, 7-6
                Fixed asset, 1-7, 3-8, 3-16, 3-20, 3-21,
                  3-22
                  depreciation on, 3-3, 3-8, 3-22, 3-23,
                    8-40
                  purchase of, 1-7, 3-4, 3-8, 3-16, 3-20,
                    4-27, 4-28, 8-40

                Fund,
                  control, 2-1, 6-2, 6-10, 6-22
                  revoLving, 7-1

                GAO documents,
                  Glossary of Terms Used in the Federal
                  Budget Process and Related Accountinga
                  Economic, and Tax Terms, 1-4, 1-8

                  Policy and Procedures Manual for Guidance
                  of Federal Agencies, 1-4, 3-1, 4-2, 5-1



.   Page 11-3   GAO Accounting Guide:          September 1990
                Appropriations and Reimbursables
INDEX




             Title 2, 2-3, 3-1, 3-17, 4-2, 4-41, 4-42,
               5-1

            Income,
              net, 3-20

            Interagency agreement, 6-2, 6-19, 6-22,
              6-47
              for work, 1-9, 6-1, 6-2, 6-36, 6-39, 6-40

            Inventory,
              purchase of, 3-8, 3-16, 3-23, 4-59, 5-3,
                7-8, 8-40, 8-42
              use of, 3-8, 3-20, 3-22, 5-4, 7-10, 7-11,
                7-12

            Joint Financial Management Improvement
              Program, 1-12

            Leave,
              annual, 3-14, 4-59, 4-60, 5-6, 8-43

            Ledger,
              account, 1-8, 4-73, 8-49
              Standard General. See Standard General
              Ledger
              subsidiary, 3-6, 4-1, 4-2, 4-73, 7-2, 8-2,
                8-49, 8-53

            Net loss, 3-20

            obligation, 1-2, 1-:3, 1-12, 2-3, 2-4, 2-5,
              2-6, 2-7, 3-2, 5-13

            OMB,
              Circular A-11, 1-4
              Circular A-34, 1-4, 2-3

            Profit, 7-8

            Proprietary accounting,
              for appropriations, 1-2, 1-5, 1-6, 2-1,
                2-2, 3-1, 3-2, 3-3, 3-8, 4-1, 4-2, 5-1,
                5-2
              for reimbursables, 7-1, 7-2, 8-1, 8-49


Page 11-4   GAO Accounting Guide:          September 1990
            Appropriations and Reimbursables
.   INDEX




                Purchase order, 2-9, 6-41

                Reconciliation of budgetary and proprietary
                accounting, 1-9, 5-1, 5-2
                  involving capitalized asset purchases, 5-4
                  involving current expenses paid from
                  subsequent appropriation, 5-6
                  involving current expenses funded by
                  prior-year appropriation, 5-9
                Standard General Ledger (SGL), 1-4, 2-1,
                  2-5, 2-16, 2-18, 2-23, 2-26, 2-36, 3-1,
                  3-4, 3-5, 3-6, 3-8, 3-10, 3-14, 3-16,
                  4-1, 4-56, 4-73, 6-2, 6-3, 6-4, 6-5,
                  6-9, 6-35, 7-2, 8-1, 8-38, 8-50
                Standard General Ledger Board,
                  4-59, 4-61, 6-9, 6-10, 8-44
                Supplies,
                  purchase of, 3-4, 7-6, 7-10
                  use of, 3-20, 4-59, 4-61, 7-5, 7-6, 8-43

                Treasury Financial Manual, 1-4

                Undelivered Orders, 2-3, 2-5, 2-7, 2-15,
                  2-19,. 2-21, 2-25, 2-35, 3-8, 3-29, 4-57,
                  6-4, 6-8, 6-10, 6-13, 6-29, 6-52, 6-53,
                  8-39, 8-40

                Warrant.    See appropriation warrant.

                Work,
                  agreement for interagency.     See interagency
                  agreement.
                  order for reimbursable, 1-7, 2-2, 3-1,
                     6--1, 6-2, 6-5, 6-8, 6-9, 6-10, 6-11,
                     6-12, 6-36, 6-37, 6-38, 6-39, 6-40,
                     6--41, 6-52, 6-53, 7-1, 7-2, 7-3, 7-5,
                     7-10, 8-1, 8-49




.   Page 11-5   GAO Accounting Guide:          September 1990
                Appropriations and Reimbursables