FFIS & TCAS Data Sources Offset vs. Direct Charge

1. FFIS & TCAS Data SourcesOffset vs. Direct Charge

2. The devil is in the details!

3. We speak a foreign language so -- a little terminology discussion first: • Cost – Associated salary and benefits based on actual hours worked and entered intoWebTCAS. • Budget – Aplanfor spending money effectively to accomplish well-defined goals. • Allocation –budget authority(amount) available to enter into obligations in a given year. • Obligation – a bindingorderfor goods or services. • Outlay – apaymentfor goods or services received that has cleared the bank (Treasury). • Staff Year –Full time equivalent(FTE) of hours paid divided by the number of “paid” days in the fiscal year. • Object Class –Categoriesin a classification system that presents obligations by the items or services purchased.

4. Treasury OFF-BUDGET ON-BUDGET General Fund Social Security Trust Fund Mandatory Discretionary TA TA Direct Direct Reimbursable Reimbursable FA FA Direct Direct Reimbursable Reimbursable UNIFIED BUDGET

5. What are Mandatory Funds? • Fundsavailableto persons who meet certain requirements. • Includes all CCC funded programs. • Accounts for about 2/3 of all government spending. • Amount isincluded in the authorization; • Congress doesnot have to act in order for funds to be available. • Controlled by “Pay-As-You-Go” (PAYGO) • Includes: Farm Price Supports.

6. What are Discretionary Funds? • 13 annual appropriation acts. • Congress must act in order for discretionary funds to be available. If not, no obligations may be incurred. • Accounts for about 1/3 of all government spending. • Includes All NRCS Appropriations. • Controlled through Spending Caps.

7. What is Technical Assistance (TA)? In CIS, TA refers to these object classes: 11 - Personnel Compensation 12 - Personnel Benefits 21 - Travel 22 - Transportation of things 23 - Rent, communication, and utilities 24 - Printing and reproduction 25 - Other Services (including agreements) 26 - Supplies and materials 31 - Equipment 32 - Land and structures (excluding easements) 42 - Insurance claims and indemnities 43 - Interest and dividends 44 - Refunds

8. What is Financial Assistance (FA)? In CIS, FA refers to these object classes: 2591 - Construction Contracts 2592 - Project Services 2691 - Project Materials 3211-3219 - Easements 33 - Investments and loans 41 - Grants FA is never “prorated” in CIS to the county or Congressional district.

9. Direct Funds – how does NRCS get them? • Direct funds come from NRCS appropriations: • Conservation Operations • Watershed Surveys and Planning • Watershed & Flood Prevention Operations • Resource Conservation & Development • Forestry Incentives Program • Watershed Rehabilitation Program • Some of the direct funds come from transfers from CCC and other Federal Agencies: • Farm Security and Rural Investment Program • Rural Abandoned Mine Program

10. Reimbursable Funds – where does NRCS get them? • Reimbursable funds are received from sources other than appropriations or transfers from other federal agencies. • Sources include: • Other USDA Appropriations • Other Federal Appropriations • State & Local Government • Private Entities

11. What is “cost” in CIS reports? • Salary and benefit cost data -- WebTCAS/ACRES • Includes dollars for actual hours worked(hourly rate times hours worked), by program/activity/modifier as entered in TCAS by an employee for: • Basic pay hours worked • Credit hours worked • Comp time worked • Overtime worked • Support data -- obligations recorded in the accounting system (FFIS) in “support” object classes plus lump sum leave, awards, and agreements .

12. What is an “obligation” in CIS reports? • Salary and benefit obligation data -- FFIS • Includes dollars obligated for actual hours paid, by fund code, as entered in the WebTCAS master file for: • Basic pay hours paid(includes paid leave) • Credit hours paid • Comp time paid • Overtime paid • Support data -- obligations recorded in FFIS in “support” object classes plus lump sum leave, awards, and agreements .

13. What is an “outlay” in CIS reports? • Outlay data comes from FFIS • Includes payments to employees for actual hours paid . • Includes payments for obligations in “support” object classes plus lump sum leave, awards, and agreements . • Includes all payments made in the current fiscal year, regardless of the year of the original obligation.

14. What do I need with cost data? I am not a “bean counter” • Helps to establish budget and program credibility • Assists in the determination of the “full cost” of programs • Shows the programs and activities on which NRCS employees spend their time • Assists with informed decision-making • Identifies needs for improvements • Assists in answering basic accountability questions

15. Why does a state or field office employee care about obligations in FFIS? • Obligations are orders for goods or services • State Conservationists must have budget authority(an allocation) before obligations incurred. • State Conservationistsmay not exceed the amount allocated in each program.

16. What are obligations? • Obligations are controlled by annual appropriations. • An agency may not obligate more than has been appropriated, by program. • Obligations and staff years are reported to Congress. • Associated performance is reported to Congress.

17. Why would someone in a state or field office care about outlays? • You probably don’t, but USDA, OMB, GAO, CBO, and Treasury really do! • Outlays are the measure of government spending. • Used to calculate deficits/surpluses: • Receipts (Taxes) less Outlays = Deficit/Surplus • Cumulative deficits = National Debt

18. The National Debt affects all of us! • The National Debt as of August 26th: • $6,175,806,295,134.55 • That’s $21,432.17 to every man, woman and child in the United States. • Treasury suspended G fund investments in April because they were about to exceed the debt ceiling. They “borrowed” federal employee’s retirement funds for two weeks. Mr. Taxpayer

19. What does direct charge mean? Title 31 of the United States Code (1301(a)) requires that all costs associated with implementing a program to be charged to the benefiting program. Examples include: • Salary • Benefits • Travel • Training • Other Indirect Costs

20. What is so hard about direct charge? • Much more “management”involvement required. • Many employees work on several programs. • Many costs benefit multiple programs. • General managers and administrative costs • Utilities and communications • Supplies • State Office and Service Center rent • Printing • Postage, NFC and FFIS costs, etc.

21. How does NRCS manage the difficulties associated with direct charge? NRCS implemented “offset” policy many years ago. “Offset” allows costs to be “charged as budgeted” based on the following assumptions: • Allocations are converted to fundable staff years, by program. • Fundable staff years, in each program, are converted to performance goals. • Performance goals are incorporated into business plans. • Performance plans are monitored to ensure that the proper work is being performed and corrective action is taken (if necessary) to ensure that goals are being met. • Adjustments are made to the performance plan whenever an allowance holder receives a large change in their allocation that affects fundable staff years, such as EWP funds made available in March.

22. Does “offset” satisfy the requirement “to use funds only as intended by Congress” Yes, as long as each allowance holder: • Accounts for all dollars available including anticipated reimbursements. • Accounts for all employees being paid. • Performance is planned by program. • The plan is worked as planned or well-documented to explain why not. • Adjustments to allocations that affect fundable staff years are incorporated into the performance and business plans at the same time that they are incorporated into operating budgets.

23. Does everyone agree that “offset” satisfies these requirements? A GAO audit of NRCS titled “Additional Actions Needed to Strengthen Program and Financial Accountability reported: …”the policy of charging as budgeted and not as worked often misstates a project’s costs by underestimating the costs to one account and overstating the costs to another….” (GAO/RCED-00-83 dated April 2000)

24. WebTCAS Actual Hours Worked Actual Hours Paid • Program • Activity • Modifier • County Assigned Fund Code ACRES FFIS (NFC) Official External Reporting (Audited Annually) Internal Decision Making

25. Meet Mr. NRCS • In pay period 15, Mr. NRCS worked40 hours on CRP and 40 hours on EQIP • He entered this information into WebTCAS by program, activity, and modifier • His assigned “fund code” isCTA-General • His “fund code” was determined in the cost allocation process and entered into the WebTCAS master record by the timekeeper

26. What do we see in CIS for Costs? 23,125 23,125 Costs associated with 40 hours of Mr. NRCS EQIP included here. Costs associated with 40 hours of Mr. NRCS CRP included here.

27. What are Mr. NRCS “costs” in CIS for pay period 15? • 40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for CRP • 40 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “cost” column for EQIP • Associated benefits will be recorded in both CRP and EQIP benefit “cost” columns based on rate identifiedat beginning of fiscal year for each retirement type

28. What do we see in CIS for obligations? Mr. NRCS dollars and associated hours are included here.

29. What are Mr. NRCS “obligations” in CIS for pay period 15? • 80 hours * Mr. NRCS’ Basic Pay hourly rate will be recorded in the salary “obligation” column for CTA-General • Actual benefits will be recorded in the CTA-General benefit “obligation” column based on actual charges to the agency for Mr. NRCS: • Retirement • Life Insurance • Health Insurance • FICA/Medicare • COLA (for overseas employees)

30. Why are there differences? It could be the difference between: • Credit hours worked in WebTCAS vs. credit hours paid in FFIS • Comp time hours worked in WebTCAS vs. comp time hours paid in FFIS • Benefit costs (estimated) in WebTCAS vs. benefit costs (actual) in FFIS • Overtime capped at 1.5 times GS-10 step 01 hourly rate for Washington DC locality in WebTCAS vs. cap applied not to exceed 1.5 times the basic hourly rate for a GS-10/1 in FFIS • Obligation adjustments not processed through WebTCAS

31. What causes the most significant differences? • “Direct” charge of hours by program/activity/modifier in WebTCAS interfaced into ACRES VS • “Offset” charge of hours by fund code assigned to each employee in the cost allocation process interfaced into FFIS

32. Why are there differences between direct charge of time & cost allocation charge of time? Bottom line – By the end of the fiscal year, direct charge hours should be very close to cost allocation hours except for those funds in which NRCS was not fully reimbursed for actual work performed

33. Why aren’t they closer? • You have to plan your work then • You have to work your plan • This demonstrates adherence to one of the fundamental laws of Title 31 of the United States Code: “Appropriations must be used for the purpose intended by Congress only.”

34. Where do we go from here? Current policy is to use “offset” (called cost allocation in FFIS) for salary, benefits, and most support costs.

35. Thank you!