M-03-01, Business Rules for Intragovernmental Transactions, Attachment B
BUSINESS RULES FOR INTRAGOVERNMENTAL
- Effective October 1, 2002, for intragovernmental investments with the Bureau of the Public Debt (BPD), BPD and trading partner agencies will use the interest method for amortization on market-based notes, bonds, and zero-coupon bond securities. BPD and the trading partner agencies will continue to use the straight line method for market-based bills. Additionally, the following three provisions also apply:
- Amortization of market-based premiums to call date. Market-based notes and bonds purchased at premium will be amortized to call date.
- Held-to-maturity vs. Available-for-sale. BPD will carry notes and bonds at amortized cost and will not reflect a market adjustment. BPD will carry zero coupon bond securities at amortized cost and will report market adjustments. However, agencies may recognize market adjustments on bills, notes, bonds, and zero coupon bond securities classified as available-for-sale.
- Inventory relief method for redemptions prior to maturity. All agencies, including central fiduciary agencies must use the specific identification method (i.e. purchase dates / tax lots) to be relieved upon early redemption of securities. If securities are not specifically identified the FIFO method will be used to identify the security to be sold. NOTE: Agencies must reconcile securities inventories with BPD at the tax lot level by December 31, 2002.
- Effective October 1, 2002, for borrowings and investments with the BPD and borrowings from the Federal Financing Bank (FFB), agencies will report amounts consistent with those reported by these central fiduciary agencies, except as noted above.
- Effective October 1, 2002, the Office of Personnel Management (OPM) will provide a factor (OPM factor) to federal agencies for calculating future employment related benefits. This factor will be provided no later than 15 days after the end of each reporting period.
- Effective September 30, 2002, actual basic pay data will be used to calculate the future liability for employment related benefits. Estimated basic pay data may be used for the month of September if actual figures are not available timely.
- Effective September 30, 2002, the agencies will enter payroll benefit data to the Internet Fiduciary Confirmation System (IFCS) within 15 days after the end of each reporting period. Agencies and OPM will report identical amounts on their financial statements.
- Effective October 1, 2002, the Department of Labor will enter liabilities for each agency in the IFCS within 15 days after the end of each reporting period. Agencies must report the DOL provided amount on their financial statements.
- Effective immediately, the system of record for reconciling and confirming fiduciary balances between trading partner and central fiduciary agencies will be the IFCS.
- Effective October 1, 2002, trading partner and central fiduciary agencies are responsible for working together to resolve any differences within 25 business days after the close of the reporting period. If the dispute cannot be resolved using these mechanisms, then the matter will be referred on the next business day to a disputes resolution task force for a binding decision. Agreed to adjustments will be recorded in the IFCS and in the financial records of both parties.
Transactions executed prior to the effective date(s) need not be retroactively augmented to meet these requirements.