Accounting for Treasury Judgment Fund

1. Accounting for Treasury Judgment Fund Presented by Financial Accounting and Services Division Financial Management Service September 19, 2007

2. Topics • Background • Guidance • Accounting Transactions • Confirmations • Contacts

3. Background What is the Judgment Fund? • A permanent, indefinite appropriation available to pay: • Many judicially and administratively ordered monetary awards against the United States • Amounts owed under compromise agreements negotiated by the U.S. Department of Justice in settlement of claims arising under actual or imminent litigation, if a judgment on the merits would be payable from the Judgment Fund • Statutory authority for Judgment Fund appropriation is 31 U.S.C 1304

4. Background (cont.) Who Administers the Judgment Fund? The Judgment Fund Branch (JFB) of the Financial Management Service (FMS) administers the Judgment Fund. The JFB is responsible for: • Ensuring that the agency has provided sufficient documentation to satisfy the criteria for making a payment from the Judgment Fund. The criteria is stated in 31 U.S.C. 1304. • Seeking reimbursements for payments in Notification and Federal Employees Antidiscrimination and Retaliation (No FEAR) Act and Contract Disputes Act (CDA) cases

5. Background (cont.) Reimbursable Claims • Notification and Federal Employees Antidiscrimination and Retaliation Act (No FEAR) • 5 U.S.C. 2301 note • Contract Disputes Act (CDA) • 41 U.S.C. 612

6. Background (cont.) No FEAR Reimbursement Obligations • OPM regulations, 5 CFR Part 724 • Within 45 days of receipt of notice for reimbursement, agencies must: • Repay FMS, or • Contact FMS to make arrangements for repayment • Agencies that do not meet this requirement will be posted annually on FMS’ public website until the obligation is paid or arrangements have been made.

7. Background (cont.) CDA Reimbursement Obligations • 41 U.S.C. 612 • Within 30 days of receipt of notice for reimbursement, the responsible agency must: • Repay FMS, or • Contact FMS to make arrangements for repayment • If the agency fails to respond within 60 days of the initial contact, FMS will send a letter to the responsible agency’s Chief Financial Officer (CFO). • The agency’s CFO has 30 days to contact FMS regarding reimbursement. • Starting in FY2008, agencies that fail to make any response will be identified as nonresponsive on FMS’ public website until the obligation has been paid or arrangements have been made.

8. Background (cont.) Agencies Outstanding Balances • Outstanding balances are available on • No FEAR page: http://fms.treas.gov/tma/fear-act.html • CDA page: http://fms.treas.gov/tma/contract.html

9. Background (cont.) Visit the Judgment Fund Website • http://fms.treas.gov/judgefund/ • Judgment Fund Regulation (31 CFR Part 256, Final Rule) • Treasury Financial Manual (1 TFM 6-3100) • Common Questions page • Current Judgment Fund forms • Links • Public website • Authorized User website

10. Guidance • SFFAS No. 4, Managerial Cost Accounting Standards & Concepts • SFFAS No. 5, Accounting for Liabilities of the Federal Government • SFFAS No. 30, Inter-Entity Cost Implementation: Amending SFFAS 4 • Interpretations No. 2, Accounting for Treasury Judgment Fund Transactions • Interpretation No. 6, Accounting for Imputed Intra-departmental Costs: An Interpretation of SFFAS No. 4

11. Guidance (cont.) • OMB Circular A-136, Financial Reporting Requirements • Federal Intragovernmental Transactions Accounting Policies Guide • TFM Bulletin No. 2007-08, Yearend Closing

12. Accounting Transactions Agency Accounting for Non-reimbursable payments Agency records contingent liability for pending litigation with non-federal entity in which the outcome for loss is probable and estimable. Proprietary Entry 6790N Other Expenses Not Requiring Budgetary Resources 2920N Contingent Liabilities

13. Accounting Transactions (cont.) A claim is settled or a court judgment is assessed against a Federal entity, and the Judgment Fund is determined to be the appropriate source of payment. The Agency submits the proper forms to the Treasury Judgment Fund. Proprietary Entry 2920N Contingent Liabilities 6790N Other Expenses Not Requiring Budgetary Resources 6730F(20) Imputed Costs 5780F(20) Imputed Financing Sources

14. Accounting Transactions (cont.) Agency Accounting for Reimbursable payments (CDA & No FEAR) Agency records contingent liability for pending litigation with non-federal entity in which the outcome for loss is probable and estimable. Proprietary Entry 6800N Future Funded Expenses 2920N Contingent Liabilities

15. Accounting Transactions (cont.) A CDA or No FEAR claim is settled or a court judgment is assessed against a Federal entity, and the Judgment Fund is determined to be the appropriate source of payment. The Agency submits the proper forms to the Treasury Judgment Fund. Proprietary Entry 2920N Contingent Liabilities 6800N Future Funded Expenses 6100F(20) Operating Expenses/Program Costs 2110F(20) Accounts Payable 3107 Unexpended Appropriations – Used 5700 Expended Appropriations

16. Accounting Transactions (cont.) Budgetary Entry 4610 Allotments – Realized Resources 4901F(20) Delivered Orders – Obligations, Unpaid

17. Accounting Transactions (cont.) The agency reimburses the Treasury Judgment Fund. Proprietary Entry 2110F(20) Accounts Payable 1010 Fund Balance with Treasury Budgetary Entry 4901F(20) Delivered Orders – Obligations, Unpaid 4902F(20) Delivered Orders – Obligations, Paid

18. Confirmations • Follow the guidance prescribed by FMS in the Federal Intragovernmental Transactions Accounting Policies Guide • Quarterly, FMS will post the outstanding receivables and revenue posted for that period for both CDA and No FEAR to its website • Agencies must respond to the accuracy of the amounts reported by FMS

19. Contacts • Jennifer Fitzmaurice, Accounting and Reporting (202) 874-8257 Jennifer.Fitzmaurice@fms.treas.gov • Teresa Casswell, CDA and No FEAR (202) 874-7487 Teresa.Casswell@fms.treas.gov