CHAPTER 3. ALLOTMENT ACCOUNTING

SECTION A. TYPES OF OBLIGATIONS-METHODS OF RECORDING

3A.01 TYPES OF OBLIGATIONS AND METHODS OF RECORDING

The various types of obligating documents and the common transactions which require the recording of obligations are briefly discussed in the following paragraphs. It will be noted that in many instances an estimated miscellaneous obligation or change in obligation (VA Form 4-1358) is authorized for use to record estimated monthly obligations to be incurred for activities which are to be specifically authorized during the month by the issuance of individual orders, authorizations, requests, etc. These documents will be identified by the issuing officer with the pertinent estimated obligation and will be posted by the Accounting Section to such estimated obligation.

3A.02 ESTIMATED MISCELLANEOUS OBLIGATION OR CHANGE IN OBLIGATION (VA FORM 4-1358)

a. The estimated miscellaneous obligation (VA Form 4-1358) has been devised for the purpose of providing an obligation control document to be used as a means of recording an estimate of obligations to be incurred for the transactions outlined below.

(1) To record estimated obligations where a formal purchase order or authorization is not prescribed.

(2) When considered necessary, to record estimated obligations to be incurred by subsequent issue of purchase orders or individual authorizations during the current month.

(3) To record estimated obligations for certain Supply Fund transactions outlined in paragraph 3A.13

b. Where purchase orders or authorizations are issued applicable to a VA Form 4-1358 which has been previously recorded, the VA Form 4-1358 will be considered as the primary obligation document.

c. If during the month it appears that the cost of authorizations to be issued will exceed the estimated obligation, a change in obligation will be prepared by the operating division increasing the obligation to an amount sufficient to cover the cost of authorizations to be issued. At the end of each month the estimated obligation will be adjusted to agree with the actual authorizations or orders issued during the month. The change in obligation effecting such adjustment must reach the Accounting Section in sufficient time to be recorded prior to closing the ledgers for the month covered by the original obligation. If individual authorizations are canceled, the Fiscal activity should be furnished with a copy of the canceled authorization or other appropriate form of notification, and such documents will be treated as liquidating items. For this reason no entry should be made on VA Form 4-1358 by the originating office in connection with canceled individual authorizations, nor should they be considered in determining the month end adjustment.

d. Estimated miscellaneous obligations for services such as repairs to prosthetic appliances, handling charges for books, supplies, and equipment, and other services for which no specific order or authorization is issued, will be reviewed prior to the end of each month to assure that the amounts of the estimates represent as realistic an amount of actual obligations incurred during the period as possible. Upon completion of the review, the estimate should be adjusted, if necessary, and the VA Form 4-1358 will be annotated to show the date of the review and the initials of the reviewer.

e. The use of VA Form 4-1358 must be kept to an absolute minimum consistent with sound financial management policies regarding control of funds. The use of VA Form 4-1358 for recording obligations is improper unless it is for a bona fide obligation as described in MP-4, part V, paragraph 1A.13b.

3A.03 PERSONAL SERVICES

a. At the beginning of each month it will be the responsibility of the Fiscal Officer to prepare an estimate of the cost of personal services for the month and to determine its relationship to the approved fiscal plan, or to the unobligated cases where funds for personal services are restricted by allotment. In the preparation of the estimate, consideration will be given to all factors affecting payments for personal services. Biweekly reports which indicate the status of personal services costs in relation to the plan may be used in lieu of monthly estimates.

b. The Fiscal Officer will advise the station head in writing whenever the estimated cost of personal services materially exceeds the approved fiscal plan in order that necessary action may be taken to insure that a deficiency will not be created during the time period of the allotment.

c. The estimated cost of personal services will not be recorded as obligations in the allotment accounts at the beginning of the month. Payrolls processed during the month will be recorded as accrued expenditures in the applicable allotment accounts.

d. Before the accounts are closed each month an estimate of the remaining cost of personal services accrued to the end of the month, for which payrolls have not been prepared or processed during the month, will be recorded in the appropriate general ledger, operating, and allotment accounts. In the preparation of the estimate, special care will be exercised to insure the inclusion of accrued premium pay and fringe benefits earned during the month but not processed on supplemental payrolls.

e. Except for the month of October accruals will be reversed prior to or simultaneously with the recording of the first completed payroll. The completed payroll will be processed in the same manner as those covering a period wholly within a calendar month. Accruals for no-year appropriations will be reversed each month including October.

f. Payrolls covering a pay period beginning in a fiscal year and ending in the succeeding fiscal year will be prorated on the basis of the number of scheduled workdays and holidays occurring within the scheduled workweek in each fiscal year, except for terminal leave payments. Payrolls prepared to pay accrued annual leave in a lump sum will be handled in the same manner as other payrolls. Care must be exercised to insure that terminal leave pay is charged to the appropriation current on the effective date of separation of an employee.

g. Copies of Request for and Authorization of Overtime Work (VA Form 1098) will be transmitted to the Fiscal activity immediately after approval. The approved requests will be reviewed to determine if the cost thereof invalidates estimated personal service costs. In such cases the station head will be notified of the change in fund requirements.

h. Salary payments that are to be submitted to the General Accounting Office for final settlement will be assigned an obligation number and recorded as an accrued expenditure in the applicable allotment account. A journal voucher will be used to record the transaction in the general ledger, operating, and allotment accounts. If a notice of disallowance is received from the General Accounting Office the accrued expenditure entry will be reversed.

3A.03.1 CONSULTANTS AND ATTENDINGS

a. At the beginning of each fiscal year, VA Form 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, in duplicate, will be received in the Fiscal activity for the total estimated cost of consultant and attending services for the fiscal year. After assignment of an obligation number, the duplicate copy will be returned to the official who submitted the obligating document. A copy of the authorization issued to each consultant or attending bearing a decimal suffix to the obligation number, beginning with 001, will be received by the Fiscal activity. The authorization will show the scheduled visits authorized for a stated period, the lump-sum fee per visit, and the total amount for the number of scheduled visits.

b. Additional authorizations issued subsequent to submission of the original estimate in October, and amended authorizations changing the number of scheduled visits and the total amount, will require adjustment of the total estimated obligation for which a change will be received on VA Form 4-1358. Amended authorizations will bear the statement "Amended Authorization-change in number of visits and annual amount." When, at the end of any month the number of visits are less than the authorized or scheduled visits, the estimated obligation will be adjusted without requiring amended authorizations. In this manner the obligation is reduced, and funds released in the amount representing visits planned but not made during the month. Conversely, if visits made in any month are greater than the authorized or scheduled visits, amended authorizations are not required. Also the estimated obligation will not be adjusted until it has been determined that the consultant or attending will make more visits during the fiscal year than were initially planned. However, in the unusual instance when it develops that an authorization is

grossly inaccurate, an amended authorization will be required and the estimated obligation will be promptly adjusted. The amount on VA Form 4-1358 will always equal the value of the number of visits scheduled for the remaining months of the fiscal year. At the end of each fiscal year all consultant and attending obligations must be adjusted to actual visits made and accrued accordingly. No difference between amounts accrued and subsequent payments should exist.

3A.04 RECURRING SERVICES-RENTS, UTILITIES, COMMUNICATIONS, ETC.

a. Rents. VA Form 4-1358 will be prepared at the beginning of each year to record estimated obligations to be incurred for rental charges based upon agreements in force, or the Federal Supply Schedule and manufacturer's price for rent of electrical equipment, such as Record, tabulating machines, etc. Decreases to obligations to cover cancellation periods of rental agreements will not be recorded prior to actual cancellation.

b. Reimbursable Services Furnished by General Services Administration. VA Form 4-1358 will be prepared at the beginning of each month to record estimated costs of communications and any other reimbursable services to be furnished during the month by the General Services Administration.

c. Utilities. VA Form 4-1358 will be prepared at the beginning of each month for the anticipated charges for utilities service for the billing period ending during the month. Bills for metered services beginning in one fiscal year and ending in another will be treated as charges against the appropriation current at the end of the billing period.

d. Communications. At the beginning of each month a VA Form 4-1358 will be prepared to cover the anticipated expenditures for post office box rental, telephone, telegraph, and teletype services for the billing period ending during the month. Bills covering periods beginning in one fiscal year and ending in another will be treated as a charge against the appropriation current at the end of the billing period. Obligations for long-distance intricate service furnished over the FTS (Federal Telecommunications) telephone network will be established in Central Office as charges applicable thereto are billed centrally by the General Services Administration.

e. Postage. All postage fees will be obligated monthly, in Central Office only, based upon the agreement between the U.S. Postal Service and the VA.

3A.05 TRAVEL OF BENEFICIARIES AND NONEMPLOYEE ATTENDANTS

a. At the beginning of each month VA Forms 4-1358 will be received from each Operating activity authorizing veterans to report. The amount of the estimate will cover authorizations to be issued during the month for travel by beneficiaries and non-employee attendants. The same estimated obligation will cover the cost of travel based upon either mileage traveled or actual expenses incurred, and cost of travel where transportation, meal, lodging, and special requests are issued and used by the traveler. The amount shown on VA Forms 4-1358 will be recorded as an undelivered order. At the end of the month the VA Forms 4-1358 will be adjusted to the total authorizations issued during the month. The adjusted unliquidated balance will be recorded as an accrual in the applicable general ledger and operating ledger accounts. The amount established for the accrual will be reversed at the beginning of the following month, except for the accrual established for the month of September. When beneficiaries are directed to report to the station authorizing the visit the procedure outlined in subparagraph f below will be followed. The procedure outlined in subparagraph n below will be followed for beneficiary travel under fee-basis authorizations for ID card status and short term.

b. Travel performed by beneficiaries and nonemployee attendants will be charged to the activity primarily responsible for such travel. All beneficiary travel for medical examination will be charged to the appropriate Medical activity without regard to the service requesting the examination.

c. VA Form 4-1358 will be submitted to the Accounting activity in an original and two copies in order that a copy may be furnished the Transportation Unit after the obligation number has been assigned. The other copy will be returned to the initiating office.

d. The number of the related estimated monthly obligation will be recorded by the Transportation Unit on each authorization to report voucher for mileage allowance (VA Form 70-3542) or authorization for nonemployee attendant (VA Form 70-2509) issued, except as provided in subparagraph f below. In addition, a consecutively numbered decimal suffix following the basic obligation number will be assigned to each authorization issued, beginning with number "1" each month. The obligation number and decimal suffix assigned to the covering authorization will appear on all transportation, meal, lodging, and special transportation requests issued in connection therewith. The Transportation Unit will place the estimated cost on each authorization to report. Estimates shown on authorizations will cover both the cost of reimbursable travel and the cost of transportation, meal, lodging, and special requests to be issued. The cost of bus and car tickets to be issued to beneficiaries for local travel will not be included in the estimate.

e. All authorizations will be forwarded daily to the Fiscal activity with a covering reference slip which will show the inclusive numbers of decimal suffixes and the total value of the attached authorizations. However, one such reference slip may be prepared for each restriction if deemed necessary to facilitate control. Memorandum copies of transportation, meal, lodging and special requests will be forwarded with the covering authorizations, except as provided in subparagraph f below.

f. The following procedure will be used when beneficiaries are directed to report for examination, treatment or other medical services to the station authorizing the visit:

(1) Authorizations Issued. At the beginning of each month a separate VA Form 4-1358 assigned a separate obligation number will be prepared in an amount representing the estimated cost of travel for only those beneficiaries who are expected to report during the month. Copies of authorizations issued to these beneficiaries will not be assigned obligation numbers nor forwarded to the Accounting activity until the beneficiaries have reported. When beneficiaries report all copies of authorizations and requests in the file will be completed to show the current month's obligation number and a decimal suffix in sequence. The obligation copy of the authorization together with the memorandum copies of transportation, meal, lodging and special requests will be forwarded to the Accounting activity. Obligations and accruals will be recorded in the same manner outlined in subparagraph a above.

(2) Notice To Report and Patient Data Card Status. DM&S Manual, M-1, part I, chapters 1 and 25, provide beneficiary travel procedures applicable to use of VA Form 70-3542c, Notice to Report, and VA Form 10-1124.

(a) At the beginning of each month a separate VA Form 4-1358 will be received from the Medical Administration activity in an amount representing the estimated cost of travel for only those beneficiaries who are expected to report during the month. The purpose of the obligation will be stated on the VA Form 4-1358 and described as beneficiary travel for beneficiaries reporting to the station authorizing the visit by means of the applicable forms stated in subparagraph (2) above. The amount shown on the VA Form 4-1358 will be recorded as an undelivered order. Changes to the original estimate will be made as necessary. If during the month it appears that the cost of travel will exceed the estimated obligation, a change in obligation will be requested for an amount sufficient to cover the increased cost. The Accounting activity, therefore, should periodically furnish the Medical Administration activity the total payments processed including the unreplenished cash payments made by the cashier.

(b) Payments for beneficiary travel will be recorded in the undelivered orders, accrued expenditures, and other applicable general ledger and operating ledger accounts from agent cashier's replenishment vouchers. Schedules of payment will be recorded as liquidations on VA Form 4-1358 based on the applicable obligation number assigned each month. At the end of the month the VA Form 4-1358 will be adjusted to agree with the actual payments made plus reimbursements earned but not paid during the month. The accruals will be recorded in the same manner outlined in subparagraph a above. When a beneficiary fails to present VA Form 70-3542d, Voucher for Cash Reimbursement of Beneficiary Travel Expenses, upon leaving the station but presents his voucher in a subsequent month, the payment will be applied to the current month VA Form 4-1358, except for payment of travel performed in prior year which will be charged to the prior year appropriation.

(c) Cost of travel where transportation, meal, lodging, and special requests are issued and used by the traveler will be applied to the VA Form 4-1358 prepared by the Medical Administration activity in connection with beneficiaries reporting for examination, treatment or other medical services to a location other than the station authorizing the travel. The memorandum copies of the requests will be listed on a separate daily reference slip clearly marked "Additional Requests" and processed in the same manner outlined in subparagraph g below.

g. It may be necessary on occasion to issue additional meal and lodging requests after the copy of the covering authorization has been forwarded to the Fiscal activity. Under these circumstances, the memorandum copies of the additional requests will be listed on a separate daily reference slip clearly marked "Additional Requests." The reference slip will be assigned the number of the current estimated obligation in the same manner as an authorization. regardless of when the original authorization to report was processed. A decimal suffix in regular order will be assigned to the daily reference slip and will be shown on all requests listed thereon.

h. After posting, the copies of the authorizations and the reference slips will be filed in the undelivered order file. The memorandum copies of the transportation, meal, lodging, and special requests will be filed in an unpaid file in the Fiscal activity.

i. When authorizations are to be canceled, copies of the authorizations marked "Canceled," or appropriate notification thereof, will be forwarded to the Accounting activity where they will be treated as liquidation items in accordance with paragraph 3A.02c.

j. When transportation, meal, lodging, or special requests are returned unused and are to be canceled, the original of the request will be marked "Canceled" and will be forwarded to the Fiscal activity. The Accounting activity will note the cancellation on the covering authorization and will process the canceled request as a liquidation transaction.

k. When a beneficiary returns unused requests because of preference for travel on a reimbursable basis, the requests will be marked "Canceled" by the Transportation Unit and forwarded to the Fiscal activity where they will be treated as liquidating items. In such cases, the fourth copy of the authorization to report will be used by the Transportation Unit to establish estimated cost of reimbursable travel in lieu of the canceled requests. The fourth copy will clearly indicate the amount to be obligated and, to avoid confusion, amounts previously shown covering use of requests will be lined out. The authorization will be assigned the basic obligation number current at the time the requests are canceled and estimated cost of reimbursable travel is established; a new decimal suffix in the regular series will be assigned and the authorization will be transmitted to the Fiscal activity in the normal manner.

l. When bills from carriers, restaurants, and hotels are received, the amount previously established as an undelivered order will be posted to the retained copy of the authorization (or reference slip in lieu thereof as described in subpar. g above) and covering VA Form 4-1358, if necessary. Meal and lodging requests issued for use at specific eating and lodging establishments which remain outstanding after the expiration of the validity period may be canceled, provided a signed statement is furnished by the proprietor that the request has not been presented and a claim therefore will not be submitted. However, all transportation, meal, lodging, and special requests which remain outstanding for 120 days subsequent to the date of issue may be canceled. Claims received for previously canceled requests which are found to be proper may be processed for payment.

m. Travel authorizations issued to beneficiaries and nonemployee attendants during September for travel which is anticipated to be performed in October will be charged to the first quarter allotment when received. However, related transportation, meal, lodging, and special requests negotiated by beneficiaries before September 30 will require an adjustment of prior year accrued expenditures. (See Unpublished Comp. Gen. B-79470, dated Nov. 12, 1948.)

n. DM&S Manual M-1, part I, chapter 18, provides travel limitations and procedures for obtaining certain payment and statistical data covering beneficiary travel under fee-basis authorizations from VA Form 10-7088, Fee Medical Services Card, as well as the preparation of check issue cards. Obligations for beneficiary travel for ID card status and short term will be established as follows:

(1) ID Card Status. At the beginning of each month, a VA Form 4-1358 will be received from the Medical Administration activity. The purpose of the obligation will be stated on VA Form 4-1358 and described as beneficiary travel for fee-basis treatment and ancillary services authorized by ID cards. Obligation numbers will be assigned each month in not more than four digits. The amount of the estimated travel cost will be based on the number of visits to be shown on fee-basis treatment bills or invoices to be received during the month. The amount of the estimated obligation shown on the VA Form 4-1358 will be recorded at the beginning of each month as an undelivered order. Schedules of payment will be recorded as liquidations on VA Form 4-1358 based on the applicable obligation number assigned for the month. At the end of each month the estimated obligation will be adjusted by the Medical Administration activity to represent actual travel costs for the month as indicated by fee-basis treatment bills or invoices received. The adjusted unliquidated balance will be recorded as an accrual in the applicable general ledger and operating ledger accounts. The amount established for the accrual will be reversed as the first entry of the following month, except for the accrual established for the month of September.

(2) Short Term. At the beginning of each month VA Form 4-1358 will be received from the Medical Administration activity. The purpose of the obligation will be stated on VA Form 4-1358 and described as beneficiary travel for veterans obtaining examinations or treatment for a limited period of time. Obligation number will be assigned each month in not more than four digits. The amount of the estimate will cover authorizations to be issued during the month. Changes to the original estimate will be made as necessary. The amount shown on VA Form 4-1358 will be recorded as an undelivered order. At the end of the month the VA Form 4-1358 will be adjusted to the total authorizations issued during the month. Payments for such travel will be made and liquidations accomplished in the normal manner for individually authorized travel. The adjusted unliquidated balance will be recorded as an accrual in the applicable general ledger and operating ledger accounts. The amount established for the accrual will be reversed as the first entry of the following month, except for the accrual established for the month of September.

3A.06 FEE DENTAL SERVICES

a. Obligations for fee dental services will be established on VA Form 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, received, in duplicate, in the Fiscal activity at the beginning of each month. The amount of the obligation will cover the estimated cost of examinations and treatments to be authorized during the month from the effective date to the expiration of the period of validity of the authorization. After assignment of the obligation number the duplicate copy of VA Form 4-1358 will be returned to the Medical Administration activity. VA Form 10-2570d, Dental Record, Authorization and Invoice for Outpatient Services, will show the obligation number and decimal suffix current at the time the authorization for examination was issued and the obligation number and decimal suffix current at the time the authorization for treatment was issued. One series of decimal suffix numbers will be used beginning with number 1 each fiscal year and assigned to examination or treatment authorizations when issued. VA Form 4-1358 will be received in the Fiscal activity at the end of each month to adjust the estimated obligation to the total amount of authorizations for examination and treatment issued during the month, and will show the inclusive decimal suffix numbers assigned to authorizations issued during the month. Liquidation of obligations will be recorded on VA Forms 4-1358 by the Fiscal activity by payments and cancellations as they apply to obligation numbers assigned. The original VA Form 10-2570d, or a copy if the original is not available, appropriately annotated will be received by the Fiscal activity to cancel an obligation for an amount previously included as an obligation on VA Form 4-1358.

b. Accrued expenditures will be recorded at the end of each month in the general and operating ledgers and will represent the best estimate of the amount due for services rendered on authorizations outstanding at the end of the account period. The accrual will include the amount of invoices received subsequent to cancellation of authorizations not paid at the end of the month. Fiscal and Medical Administration officials will coordinate their efforts to assure the reasonableness of the amount of the expenditures to be accrued and reported to the Accounting activity to support the accounting entries. The accrual will be reversed in the following month, except for the amount established for the month of September.

c. Bills or invoices received subsequent to cancellation of authorizations will be processed as accrued expenditures which, in view of the fact there are no obligations therefor to be liquidated, will result in reduction of the unobligated balance in the amount approved for payment. Prior to closing the account each month, any bills or invoices of this nature remaining unprocessed will be recorded as accrued services payable and recorded in the operating ledger and the general ledger accounts as accrued expenditures. This entry will be reversed at the beginning of the following month, except for accrual established for the month of September.

d. Additional or supplemental authorizations on VA Form 10-2570d may be issued for services not covered on the initial authorization for the same patient. When this action is necessary the same procedures provided for initial authorization will apply. (See Unpublished Comp. Gen. B-72715, dated March 29, 1948. to determine fiscal year appropriations chargeable.) However, a fee dentist who was authorized on VA Form 10-2570d to treat a veteran may refer the case to another dentist to perform specific treatment which has been approved. In such an event a separate authorization to the other dentist may not be required. The bill or invoice received from the other dentist will be annotated by the Medical Administration activity to fully identify it with the authorization on which the treatment was approved, showing the obligation number, decimal suffix, approval of fees and charges for services, etc.

e. These fee-basis procedures apply primarily to outpatient clinics having a considerable volume of authorizations and where continuing treatment is authorized on long-term basis. Where few fee transactions are involved, the authorizations may be obligated on an individual basis without the use of VA Form 4-1358, provided obligation numbers are assigned prior to release of the original authorization to the fee participant.

3A.06.1 FEE-BASIS MEDICAL AND NURSING SERVICES

a. VHS&RA Manual M-1, part I, chapter 18, provides procedures for obtaining certain payment and statistical data covering fee-basis authorizations and related beneficiary travel from VA Forms 10-7088, Fee Medical Services Card, as well as the preparation of check issue cards.

b. At the beginning of each month VA Forms 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, will be received from the Medical Administration activity to establish estimated obligations for services to be rendered for an extended or indefinite period to veterans who have been issued ID (identification) cards, and for services to be rendered for a limited period or short term to veterans for which requests are to be issued to fee participants. The purpose will be stated on each VA Form 4-1358 and will include such services as medical or nursing services, physical examinations, home nursing services, fee services performed in a VA clinic, or services performed by other Federal hospitals, as appropriate. Obligation numbers will be assigned each month in not more than four digits to each VA Form 4-1358 received. The amount of the estimated obligation will be recorded at the beginning of each month as undelivered orders. The amount obligated for services to be rendered to veterans having ID cards will be the estimated cost of bills or invoices to be received during the month. The amount obligated for all other services will be the estimated cost of services to be authorized on requests issued to fee participants during the month.

c. Liquidation of obligations will be recorded on VA Form 4-1358 based on the applicable obligation number. At the end of the month estimated obligations for services rendered veterans having ID cards will be adjusted by the Medical Administration activity to represent the total amount of bills or invoices received during the month. At the end of the month estimated obligations for all other services will be adjusted by the Medical Administration activity to represent the total amount of services authorized for which requests were issued to fee participants during the month, subject to the provisions of Unpublished Comp. Gen. B-72715, dated March 29, 1948, which govern in determining the proper fiscal year chargeable. The adjusted unliquidated balance of obligations will be recorded as an accrual in the applicable general ledger and operating ledger accounts. The amount recorded as an accrual will be reversed as the first entry of the following month, except the accrual established for the month of September.

3A.07 HOSPITALIZATION OTHER THAN DEPARTMENT OF VETERANS AFFAIRS

a. At the beginning of each month, the Fiscal activity will receive from the Medical Administration activity a VA Form 4-1358 covering the estimated monthly cost of hospitalization of beneficiaries hospitalized at other than Department of Veterans Affairs hospitals for each allotment account against which it is anticipated expenses will be incurred during the month. In preparing the estimate, consideration will be given to authorizations previously issued which will continue in effect during all or part of the current month and to the estimated cost of new authorizations which it is expected, will be issued during the month.

b. Prior to the end of each month, a change in obligation will be submitted to the Fiscal activity adjusting the estimated amount previously established to as realistic an amount as possible based on records of patients hospitalized during the month. In addition, the name of each hospital where expenses have been incurred during the month will be shown in the "Reference" column of the VA Form 4-1358 with the estimated cost for the month for each hospital being shown in the "Individual or Daily" column. The sum of estimates for individual hospitals will agree with the total adjusted estimate.

c. As invoices are received from the hospitals and processed for payment, the amount liquidated in each case will be the estimated amount for the hospital as shown on the change in obligation described in the preceeding subparagraph, unless it is indicated that only partial billing has been made by the hospital, in which event the regular procedure for partial liquidations will be followed.

d. No later than 45 days after the close of the month for which the obligation was established, all obligations still outstanding will be brought to the attention of the Medical Administration activity by the Fiscal activity. The outstanding obligations will be analyzed by the Medical Administration activity and prompt notification will be made to the Fiscal activity of any amounts proper for adjustment.

3A.07.1 COMMUNITY NURSING HOME CARE

VA Form 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, will be received in the Fiscal activity each month. The monthly estimated amount will be recorded as accrued expenditures against the Medical Care appropriation for billings at the per diem rate and any supplemental services specified in the agreement to be provided by either the nursing home, the veteran's physician, or other third parties. At the end of each month the estimated obligation will be adjusted to as realistic an amount as possible based on records of patients in nursing homes. Accounts will be adjusted accordingly.

3A.07.2 CHAMPVA MEDICAL SERVICE

a. VHA Manual M-1, part I, chapter 5, provides for obtaining certain payment and statistical data covering CHAMPVA. Expenditures for medical care under CHAMPVA is restricted by 38 U.S.C. 1713.

b. VHA, VA Central Office Procedure

(1) At the beginning of each month VA Form 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, will be forwarded to Central Office Finance Division (047H1) with an estimate of obligations for invoices to be paid by OCHAMPUS in the current month.

(2) The billing from OCHAMPUS on OPAC, and/or SF 1080, Voucher for Transfers Between Appropriations and/or Funds will be based on claims paid by fiscal intermediaries for VA beneficiaries.

(3) The adjustment to VA Form 4-1358 will be abased on the control point official contact with OCHAMPUS officials at the end of each month. This adjustment is to be forwarded to Central Office Finance Division (047H1) by the first workday of the following month.

c. VHA, Field Facility Procedure. Facilities that directly provide CHAMPVA care to beneficiaries will obligate funds based on the following:

(1) The amount obligated on VA Form 4-1358 will be based on the best estimate of invoices to be received during the month.

(2) The adjustment to the VA Form 4-1358 will be made based on the actual invoices date stamped in the VA by the last day of the month.

d. Occasionally adjustment checks are received from Medicare or other insurance carriers when insurance carriers determine a refund is due Department of Veterans Affairs. These adjustment checks are considered an appropriation refund but only to Department of Veterans Affairs Central Officer from where CHAMPVA payments are made. Every reasonable effort will be made to identify the fiscal year in which the bill was paid so that the proper Medical Care appropriation can be credited. When a CHAMPVA adjustment check is received at the field facility the Fiscal Service will deposit the check into their Department of Veterans Affairs Suspense and transfer the funds into Department of Veterans Affairs Central Office Suspense Account. A copy of the transfer along with other pertinent refund information will be forwarded to Department of Veterans Affairs Central Office (047H1). When identification of the fiscal year to which the refund should be credited is not possible, Department of Veterans Affairs Central Office (047H1) will deposit such refunds to the current year Medical Care appropriation.

3A.08 PURCHASE ORDERS

Purchase orders for services to be rendered will be recorded as obligations against the appropriation chargeable. In those cases where no contract is available and authority is granted to perform services prior to obtaining a firm cost estimate, the purchase order will be obligated in an estimated amount.

3A.09 EMPLOYEE TRAVEL

a. Estimated obligations chargeable to limitation .007 for temporary duty travel will be recorded as accrued expenditures and applied cost during the Fiscal year in which travel begins.

b. Temporary duty travel expenses spanning more than one appropriation period (fiscal year) will be charged as follows:

(1) Per diem expenses will be charged to the fiscal year in which the expenses are actually incurred rather than in which the travel is ordered. EXAMPLE: John Doe is ordered to perform official travel beginning September 23, 1992 through October 4, 1992. John's per diem from September 23 thru September 30 will be charged to fiscal year 1992 appropriation; his per diem from October 1 through October 4 will be charged to fiscal year 1993.

(2) The entire cost for employees commercial round trip transportation expenses will be charged against the appropriation current at the time the employee begins temporary duty travel even through subsequent portions or the return trip portion of the ticket will not be used until the following fiscal year. Refer to: 70 Comptroller General 469, May 7, 1991.

c. Estimated obligations chargeable to limitation .007 for permanent duty travel and roundtrip to seek permanent residence in connection with change of official duty station will be recorded as an undelivered order at the time the order is issued to the employee. Estimated obligations chargeable to limitation .001 for expenses estimated to be paid to employees for real estate, temporary subsistence and other miscellaneous expenses incident to dislocation at the request of the Government will be recorded as an undelivered order at the time the order is issued to the employee. Notice of anticipated expenses by employee changing official stations will be utilized for determinations of when to record the expenditures. These expenses will be recorded as accrued expenditures and applied cost on the basis of amounts earned and payable to the employee. VA Form 70-3036b, Notice of Anticipated Expenses by Employee Changing Official Station, or similar form may be utilized for determination of when to record the above expenses as accrued expenditures and applied cost.

d. Subaccount 2531 will be used for relocation contract costs. Relocation contract obligations will remain in undeliverable orders until sale of the residence is completed.

e. An extra copy of the VA Form 70-3036c, Travel Authority for Permanent Duty, must be furnished the Fiscal activity for obligating relocation expenses applicable to limitation .001.

f. Travel authorized under an Annual Open Authorization will be obligated by means of a VA Form 4-1358, Estimated Miscellaneous Obligation or Change in Obligation, and recorded as accrued expenditures and applied cost at the beginning of each month. This estimated amount will cover costs of temporary duty travel to be directed under that authorization during the month. Prior to end of each month the estimated obligation will be adjusted to the value of transportation request cost incurred and employee expenses earned during that month. The adjusted obligation, furnished to the Fiscal activity will show the name, title and monetary value for each employee directed to travel during the month on the consolidated travel authorization.

g. Portions of transportation requests for which travel has not been commenced will be eliminated from obligations. These amounts eliminated from the obligation at the end of the fiscal year will be reestablished in the succeeding fiscal year if the travel is expected to be performed and/or completed. Employee administrative travel expenses must charged to limitation .007. Failure to do so is a violation of statute as set forth in annual VA Appropriations Acts. It is permissible however for VA to contract and directly pay for employee travel expenses since such contractual arrangements can lower expenses (better rates and no sales tax). The proviso remains however that if the travel is administrative, the contract or Form 2138, Purchase Order, must be obligated out of limitation .007 funds. This rule has only three exclusions chargeable to limitation .001. They are:

Interagency car pools;

Certain travel performed by the Office of the Inspector General; and

Certain travel performed directly in connection with the care treatment of VA medical beneficiaries.

3A.09.1 EMPLOYEE TRAINING.

The General Accounting Office held in Decision B-233243, August 3, 1989, that the cost of developing and providing a training course that spans more than one fiscal year is properly chargeable to the fiscal year appropriation when the need for the training was determined, the contract for the training was entered into, and contract performance was begun. Ordinarily training occurs in the same fiscal year in which funds are obligated. However, see 70 Comptroller General 296, February 25, 1991 which states that training tends to be nonseverable. Thus, where a training obligation is incurred and performance begins in one fiscal year, the entire cost is chargeable to that year, regardless of the fact that performance may extend into the following year.

3A.09.2 LOCAL TRAVEL

a. It is not necessary to obligate local travel unless it is anticipated that the monthly cost of a division's travel (exclusive of the cost of tokens, bus tickets, etc.) will exceed $25 or it is administratively considered necessary for fund control. Where either of the above criteria exists, a VA Form 4-1358 will be prepared at the beginning of the month. When local travel only is involved it may be authorized orally or by memorandum, and no travel orders will be issued.

b. Prior to the end of each month, the estimated obligation will be adjusted to as realistic an amount of actual local travel expense incurred as can be determined from the records of the authorizing official. The adjustment will show the name and local travel expense incurred by each traveler.

c. Whether or not local travel is obligated at the beginning of the month, an accrual of the estimated expense incurred, for which no reimbursement vouchers were processed, will be recorded prior to closing the accounts for the month. On the first workday of each month, except October, the accrual will be reversed.

3A.10 TRANSPORTATION OF THINGS

a. SF 1103, U.S. Government Bill of Lading, will normally be the obligating document for expenses chargeable to allotment accounts involving the transportation of things. This form will not be the obligating document when obligating the shipment of household effects. The Government bill of lading will be recorded as an undelivered order at the time of issue. Applicable accrued expenditures and applied cost will be recorded when they are earned.

b. VA Form 70-3036c, Travel Authority for Permanent Duty, will be used to obligate all shipments of household effects. Government bills of lading or purchase orders for shipment of household effects will be recorded as undelivered orders and must bear the same obligation number as assigned to the original travel authority. Obligations for household goods will remain in undelivered orders of the appropriation current at time of issuance of travel orders until shipment commences. Likewise, shipments of household effects issued under the commuted rate system will be recorded as undelivered orders. Accrued expenditures and applied cost will be effected when earned by the carrier or reimbursement is paid to the employee under the commuted rate system.

c. All Bills of Lading issued for Shipment of Bodies, subaccount 2210, and Other Shipments, subaccount 2220, will be obligated as undelivered orders at the time the GBL's are issued. They will remain in undelivered orders of the appropriation current at the time of obligation until notification of shipment or until payment is made to carrier.

d. Travel Vouchers. When the employee returns to his/her permanent station the SF 1012, Travel Voucher, will be prepared within 5 work days as required by mp-1, part, paragraph 18A(1) and submitted to the permanent duty station fiscal office.

3A.11 COURT COSTS

The office of the District Counsel will prepare VA Form 4-1358 to cover expenses to be incurred for court costs and will forward the estimate to the Fiscal activity to be obligated. If no estimate has been issued in advance, as in cases wherein court action results in unanticipated costs or costs not possible at the time, such costs will be reported to the Fiscal activity-for obligation promptly.

3A.12 DISTRIBUTION OF OBLIGATIONS FOR COMMON SERVICES
BETWEEN MAJOR ACTIVITIES

Tie term "Common Service" is defined in chapter 6, section F, of this part of the manual. Obligations will be distributed to basic or major activities which are described in that section. The distribution criteria outlined for cost allocations are applicable to the distribution of obligations.

3A.13 SPECIFIC PROBLEM AREAS AND RESOLUTION OF CONFLICTS

a. The language of an appropriation in usually stated in general terms. To find whether or not appropriated funds are legally availabelone might have to look to other laws dealing directly with the subject matter. For example: Appropriated funds may be obligated to purchase light refreshments at ceremonies for awards given under authority of the Incentive Awards Program (5U.S.C. 4501-4506, 5407) as discussed in Comptroller General B-233319, 7/21/86. Such expenditures for light refreshments at awards ceremonies should be limited to a reasonable amount in relation to the number of people attending the ceremony. Award ceremonies are not an agency's typical day-to-day conduct of official business. The Comptroller General in B-233319 describes such activities, for lack of a better term as "ceremonial" and therefore not occurring on a routine basis. The authorizing officials must make a determination that a reception with refreshments would materially enhance the effectiveness of its awards ceremony. Examples of appropriate award ceremonies are:

Presidential Rank Awards

Secretary's Awards

Performance Appraisal Awards (yearly ratings)

Employee of the Month/Quarter

Special contribution Awards

Employee Suggestions; and

Service Awards

b. Ceremonies Not Appropriate for Refreshment Paid with Appropriated Funds Are:

Retirement Parties

Employee Morale Parties

Seasonal Parties; and

Service Recognition Week Receptions (such as Public Service Recognition Week in May of each year, Nurses Week, Engineering Week, etc.

c. The general rule for refreshments to be paid out of appropriated funds for awards ceremonies is that the awards ceremonies must be a special occasion, an exception to rather than the routine day-to-day conduct of official business. The awards themselves must come under the Government Employees' Incentive Awards Act and thereby be the result of some personnel activity.

3A.13.1

a. Under provisions of the Federal Incentive Awards Program, appropriated funds may be used to purchase award items to recognize employee(s) contributions of benefit to the Department. This authority is distinct from the legislative provisions governing purchase of mementos for general distribution to the public. VA officials with delegated authority to approve awards may use appropriated funds to purchase items such as plaques, paperweights, etc. to use in honorary recognition of an employee's contribution to improve VA operations or efficiency. Mementos used in connection with recognition must meet the follwing criteria:

Be appropriate to an office setting or environment;

Be suitably inscribed or engraved; and

Be of minimal value.

VA may not expend appropriated funds to purchase mementos for distribution to the public as a means of increasing the public's awareness of VA's mission and programs. EXCEPTION: Public Law 102-405, dated October 9, 1992, amended Section 7423 of Title 38 by adding the following new subsection:

"The Secretary may purchase promotional items of nominal value for use in the recruitment of individuals for employment under this chapter. The Secretary shall prescribe quidelines for the administration of the preceding sentence."

The Secretary's quidelines follow:

(1) VA may expend appropriated funds to purchase promotional items of nominal value for use in recruiting individuals for employment in Veterans Health Administration (VHA) positions which are covered under Chapter 74 of Title 38, U.S.C. Promaotional item use will be limited to recruitment for occupatio(s) considered mission critical based on the need to interest qualified applicants given current and anticipated job market conditions.

(2) An item whose total cost (including any taxes and related fees) amounts to no more than $5.00 per individual recipient is considered to be of nominal value. Note: suitable items are usually available for a small fraction of the $5.00 maximum. The purchase request will document the justification for the expenditure level in keeping with the criticality of the recruitment need.

(3) The item's purpose of serving as a recruitment aid must be evident on the item itself. To serve as a recruitment aid, the item will include a permanent display of:

The Department's VA logo and/or the name of either the Department of VHA facility purchasing the item.

A telephone number and/or address to provide potential applicants with a VA point of contact for recruitment followup; and space permitting, a recruitment slogan or message.

(4) The entire item's design is to be professional, tasteful and reflect favorably on VA as a preferred employer.

3A.21 INTERAGENCY MOTOR POOL SERVICES

At the beginning of each month a VA Form 41358 will be prepared for services anticipated to be received during the month from the interagency motor pool. This estimated obligation will be adjusted to as realistic an amount as possible, based upon available records, at the end of the month

3A.22 PRINTING AND REPRODUCTION SERVICES

a. Purchase orders will be obligated by Central Office Office of the Assistant Secretary for Finance and Planning for costs of tabulating cards and marginally punched continuous paper chargeable to the Office of the Deputy Assistant Secretary for Information Resources Operations.

b. Department purchase orders for other printing and reproduction services procured from the Supply Fund will be directly obligated to the applicable appropriation prior to release of the purchase order.

3A.23 NONSTOCK PROPERTYSUPPLIES AND EQUIPMENT

a. Procurement instruments and requisitions for nonstock property, including transportation costs, returnable containers, and other expenses applicable thereto, will be directly obligated in appropriation accounts at the time the order is placed. An exception to this general rule is that orders which are intended to meet a bona fide need of the subsequent fiscal year will be recorded as an obligation in the fiscal year in which delivery is to be made. The following will be placed on the order: "This order is a bona fide need of FY _____ and is issued subject to the availability of FY _____ appropriations." However, orders required by law or regulation to be placed with another Government agency including orders which are required to be placed with the Federal Prison Industries and with the General Services Administration in accordance with the maximum order limitation of Federal Supply Schedules, will be recorded as obligations at the time the orders are issued. Such orders submitted to another Government agency at the close of each fiscal year shall reflect actual station requirements, and shall not be used as a means of exhausting appropriation balances. Procurement instruments, requisitions, and bills of lading will be routed to the Fiscal activity for determination as to availability of funds prior to release of the documents to vendors, central purchasing station, Marketing Center, supply depots, and carriers. Obligations will be recorded in the net amount (purchase price less cash and trade discounts).

b. Copies of purchase orders and bills of lading issued by Central Office or central purchasing station to cover purchases to be delivered to supply depots or field facilities for which settlement of vendor claims applicable thereto is the responsibility of the station to which shipment is to be made will be forwarded to the station concerned in sufficient quantity to meet normal requirements. One copy will be furnished the Fiscal activity.

c. Requisitions forwarded to Central Office for Central Office controlled items will be obligated as follows:

(1) Requisitions approved and returned to the station, will be obligated against the appropriation available for obligation at the time the field station places the order with the supply depot, Marketing Center or vendor.

(2) When Central Office approves the requisition and places the order with the supply depot, Marketing Center or vendor, the obligation will be recorded against the appropriations current on the date of approval shown on the edited copy of the requisition returned to the station.

d. Requisitions forwarded to the VA Marketing Center for direct delivery to field stations for source 9 items to be purchased centrally will be obligated at the time the order is placed. The Marketing Center will contact the field facility to determine availability of funds when purchase orders for source 9 items exceed the estimated obligation by 10 percent or $50, whichever is less. When the Marketing Center cannot issue a purchase order to a vendor within the fiscal year in which the ordering station has established an obligation, the station will be notified accordingly. Field facilities will advise the Marketing Center whether to proceed with procurement action during the subsequent fiscal year or to cancel and return the requisition without action. If procurement action is to be taken during the subsequent fiscal year, the obligation will be established against the appropriation available for the subsequent fiscal year.

e. Perishable food and similar type contracts executed in the latter part of a fiscal year covering deliveries wholly within the following year are chargeable to the appropriation current on the effective date of the contract. When the initial delivery order applicable to the contract is issued prior to the availability of appropriated funds for the new fiscal year the following will be placed on the order. "This order is a bona fide need of FY _____ and is issued subject to the availability of FY _____ appropriations." Obligation numbers will be assigned from the series of numbers applicable to the new fiscal year and the fiscal copy of the order will be retained for recording in the accounts as of October 1.

f. The principles that are used in subparagraph e above in determining which fiscal year appropriation is to be charged at the end of the fiscal year shall also be used for the determination of the obligations for any period within the fiscal year covering perishable food and similar type contracts. For example, delivery orders placed in March for April deliveries of perishable subsistence or similar items will be obligated in the month in which delivery is to be made. An obligation number will be assigned at time order is placed and the fiscal copy of the order will be retained for recording in the accounts as of April 1. When orders cover deliveries for more than I month the obligation will be established at the beginning of each month during which delivery is to be made by means of VA Form 41358 or the fiscal copy of the order may be used.

g. VA stations will apply the following procedures for reimbursing VA supply depots and processing adjustments between Supply Fund inventory transfers and depot reimbursable vouchers after submission of requisitions to the data processing center, supply depots or Marketing Center:

(1) Stations will reimburse the depots for all reimbursable vouchers in the amounts appearing on the monthly Station Issue Listing for depot and direct delivery shipments and listing for source 8 items by use of advance payment and accounts payable accounts immediately upon receipt of the listings. The only exceptions permitted are for differences between the original amount shown on the shipping document and amount shown on the Station Issue and Source 8 Listings, requisitions erroneously processed by the depot as a reimburseable voucher in lieu of an inventory transfer voucher, and for property shipped to the ordering station but erroneously charged to another station.

(2) When reimbursing the depot discrepancies in extensions or totals and quantity variances exceeding $25 appearing on the Station Issue and Source 8 Listings pending adjustments by the depot will be recorded by debiting Federal advance payment and accounts payable accounts, as applicable, and crediting disbursing authority account for the total amounts shown on the listings. The advance payment account will be liquidated when credits appear on the listings and the unliquidated balance in accounts payable account will be liquidated when property is returned or charges appear on the listings. In order that proper credits and charges may be adjusted by the depot as soon as possible after receipt of SF 361, Transportation Discrepancy Report, the Supply activity will immediately prepare and forward this report to the depot at time discrepancy for overage, shortage or damage is known. A copy of SF 361 will be furnished the Fiscal activity to support the receiving report. Followup should be made by the Fiscal activity if credits or charges do not appear on the listings within 60 days.

(3) Reimbursements to the depot for all other type of reimbursable vouchers, such as periodicals, etc., should be accomplished as soon as possible after the end of the accounting month hut no later than the 15th calendar day of the succeeding month.

(4) A requisition forwarded to the data processing center, supply depot or Marketing Center coded "Supply Fund 36X4537," which was processed by the depot as an inventory transfer, but because of station error the requisition should have been coded "VA Appropriation" will be adjusted by the station. An obligation number will be assigned to the requisition document and amount recorded in the applicable appropriation general ledger allotment accounts. Upon receipt of shipment the applicable appropriation chargeable will be recorded by debiting assets acquired current fiscal year or operating expense and undelivered order accounts and crediting disbursing authority and accrued expenditure accounts. Simultaneously, the Supply Fund will be reimbursed by debiting disbursing authority and appropriate cost of sales accounts and crediting sales account and interoffice accounts (property received from other stations) or receiving reports transferred to centralized purchasing station.

(5) A requisition forwarded to the data processing center, supply depot or Marketing Center coded "VA Appropriation," which was processed by the depot as a reimbursable voucher, but because of station error the requisition should have been coded "Supply Fund 36X4537" will be adjusted by the station. The requisition document will be removed from the undelivered order file and the obligation canceled by reversing the original entries recorded in the applicable appropriation general ledger allotment accounts. Upon receipt of shipment, entries to the Supply Fund will be recorded by debiting the appropriate stores inventory account and crediting disbursing authority account. Simultaneously, entries to the clearing account 36F3875 will be recorded by debiting disbursing authority account and crediting unapplied deposit fund collection account. Payment from account 36F3875 will be included on the reimbursement to the depot. If charges appear on the Station Issue Listing but shipment is not received and covered by receiving report, debit Supply Fund Federal advance payment account in lieu of stores inventory account by means of OF 1017-G to document the expenditure transfer between the Supply Fund cash advance to clearing account 36F3875.

(6) The cash transactions outlined in subparagraphs (4) and (5) above will be included on the same OF 1017-G prepared monthly to document Supply Fund cash sales to support the SF 224, Statement of Transactions, except for the OF 1017-G prepared to document the expenditure transfer between Supply Fund cash advance to account 36F3875 outlined in subparagraph (5) above.

(7) Receiving reports applicable to equipment procured by the Marketing Center for direct delivery should be processed and forwarded to the Supply Depot as soon as possible even though inspection and delivery to using services or divisions are not accomplished. Under the terms of the contract a warranty period is generally included. This will enable the supply depot to process payments to vendors for the cost of the equipment only.

h. Receiving reports covering deliveries of bread, milk, ice cream, etc., may be held and processed at periods which coincide with the period covered by the VHS&RA Listing of Food Issues and Costs. When the period covered by the Dietetic listing extends into the following month, a property voucher will be processed as of the end of the month. Receiving reports covering the receipt and simultaneous issue of gasoline and lubricants purchased from local Government agencies and those covering purchases from filling stations by use of service credit cards will be furnished the Fiscal Service at least biweekly and at the close of each month; if desired, receipted sales tickets may be furnished the Fiscal Service on a daily basis.

i. Partial deliveries of items, other than daily deliveries of bread, milk, ice cream, etc., will be abstracted to debit vouchers at the time of receipt of property and a copy furnished the Fiscal Service as a receiving report.

j. Requisitions to Defense Logistics Agency for food items to be delivered from Defense Logistics Agency distribution points and those items for direct delivery to stations will be obligated on the basis of delivery dates specified on the requisitions. When requisitions cover deliveries for more than 1 month the obligation will be established at the beginning of each month during which delivery is to be made by means of VA Form 4-1358 or a copy of the requisition.

k. Purchase orders and requisitions applicable to "Processed Stores" will be obligated in the appropriation accounts at time of order. The cost of supplies procured for general use will be equitably prorated and distributed to appropriations on the basis of past experience or such other criteria as may be prescribed. Supplies procured for a specific use or to satisfy an unusual demand will not be prorated but will be charged in total to the applicable appropriation. When supplies identified as "Processed Stores" in the supply warehouse are issued to Veterans Canteen Service, the proceeds will be recorded in clearing account 36F3875 or deposit fund account 36X6875, as appropriate, and applied as a partial payment of a subsequent office supply invoice. Office supplies procured specifically for the Veterans Canteen Service will be processed under the "posted" method and financed by the Supply Fund.

l. Purchases of nonstock property from GSA stores depots under the FEDSTRIP procedure will be obligated by forwarding two copies of VA Forms 90-2237, Request, Turn-in and Receipt for Property or Services to the Fiscal activity. One copy will be returned to the Supply activity indicating obligation action.

m. Receiving reports applicable to transactions accomplished at the close of the month will be furnished the Fiscal activity as soon as possible but no later than the close of business of the first workday of the following month.

n. Transactions applicable to the purchase of nonstock property, as well as transactions covering the receipt or disposition of nonfund property will be recorded in general ledger accounts prescribed in appendix A.

o. Obligation of contracts will be governed by the following: (1) the contract which imposes the obligation must be made within the fiscal year covered by the appropriation sought to be charged and (2) the subject matter must concern a bona fide need arising within the period.

p. Change orders must meet a bona fide need of the fiscal year sought to be charged as well as being within the scope of the contract being amended. If these conditions are met, the appropriation chargeable will be the one in which the contract was obligated. If a change order does not fall within the scope of the original contract, the change will be the subject of a new contract, chargeable to the fiscal year current on the date of the contract.

3A.23.1 NEWSPAPERS AND PERIODICALS

a. Normally a subscription period is on a calendar basis, January through December. The cost of the subscription may be charged to the appropriation current when delivery begins (23 Comp. Gen. 326), notwithstanding that it may cover deliveries extending into the subsequent year.

b. Newspapers and periodicals obtained through the depot will be requisitioned annually by means of the periodical renewal list and catalog list issued by the Chief, Books and Periodicals Division. This listing is forwarded to stations not later than the 10th workday of April of each year and will be returned to the Books and Periodicals Division to arrive on or before the 5th workday of June of each year. Therefore, the VA Form 90-2237, Request, Turn-in, and Receipt for Property or Services submitted to the Fiscal activity for obligation will be marked "This order issued subject to the availability of FY funds," and assigned an obligation number of the subsequent fiscal year.

3A.24 OTHER ACCOUNTING OPERATIONS

a. Returnable cylinders, drums and other containers furnished by vendors in the delivery of gases, liquids, etc., purchased by the appropriations and for which a deposit was required will be considered as an item of inventory. The deposit value of such containers will be recorded in the inventory returnable containers account 1489 at the time receiving reports are received in the Fiscal activity. Containers will remain in the inventory account until returned for refund or written off due to survey of loss or damage. The appropriation will pay for any demurrage charges levied by the contractor for holding any of these containers beyond the free loan period. The balance in the general ledger controlling accounts will be reconciled monthly with the subsidiary records maintained in the Supply activity.

b. Standby fuel oil will be recorded in the prepaid expense account 1132 at the time of receipt from the vendor. Standby fuel oil reserves are not proper for "Costing" until such time as they are used. When the fuel oil is consumed entries will be made debiting account 4011 and crediting account 1132. The balance in the general ledger controlling account will be reconciled monthly with the subsidiary records maintained by the Accounting activity.

c. Monies received from the DSA (Defense Supply Agency) for the Business Development Expense provided in section 8(a) contracts will be deposited to account 2095-Deferred Income/Advances Received from other Government agencies. As deliveries are received from the vendor, account 2095 should be debited and account 2014 should be credited. (That is, the amount of Business Development Expense which will have to be paid to the vendor should be reflected in your payable account.) Thus account 2095 will reflect, at the end of the contract period, the amount to be refunded to DSA.

d. Nonexpendable property meeting capitalization criteria of the agency will be capitalized in the applicable general ledger accounts. The total amount capitalized will include the cost of transportation.

e. Differences between amounts billed for nonstock items and services which are proper for payment and amounts shown on receiving reports will be recorded by adjusting account 1721, Asset Acquisitions-Current Fiscal Year or 4011, Operating Expense-General, as appropriate. Adjustments for all amounts either in excess of, or significantly less than that reflected on receiving reports must be supported by documentation; unless the Fiscal activity can make the adjustment under the terms of the contract, agreement or order. When differences require documentation, VA Form 90-140, Adjustment Voucher, memorandum or reference slip, as appropriate will be received from the Supply activity. Documentation is not required to adjust differences between amounts initially obligated on purchase orders or requisitions and amounts recorded on receiving reports, for time and trade discounts, voluntary price reductions, etc.

f. Supply depot shipments of property recorded in depot Supply Fund accounts as sales to VA appropriations will be recorded in the field station accounts for the exact amount received. However, when there are discrepancies in extensions or totals of $25 or less or a quantity variance of $25 or less between the amount shipped and amount received, the amount reported as shipped will be recorded in accounts payable account 2012 and the difference recorded in account 4011. In addition GSA differences of $100 or less per line item in accordance with MP-4, part III, paragraph 3.11d(1), will also be recorded in account 4011.

g. An advance copy of the depot shipping document will be forwarded by the depot to the station concerned for use of the Fiscal activity should use the document to adjust the obligation established, if necessary, and to maintain a subsidiary record of amounts payable to the depot for property received.

3A.25 FEE-BASIS COUNSELING

a. At the beginning of each month a VA Form 4-1358 will be received from the Veterans Counseling Training activity of the regional office based on the number of trainees expected to report for counseling during the month.

b. VA Forms 22-1985, Authorization for Services Relating to Counseling, prepared by regional offices will be forwarded in original and two copies to the institution that will perform the counseling. Institutional personnel will schedule the veteran for counseling.

c. When the veteran reports for counseling, the official at the institution will record the date veteran reported and initial all three copies of VA Form 22-1985. The official will also enter a control number containing a numeric month symbol as a prefix followed by a number beginning with one each month. For example, the 25th veteran reporting for counseling during the month of November would be numbered 11-25. One Copy of VA Form 22-1985 would then be returned to the Counseling activity at the regional office where it would be reviewed for completeness; insertion of appropriate obligation number; and then forwarded to the Fiscal activity for posting and attachment to VA Form 4-1358.

d. At the end of each month the Counseling activity at the regional office will call the guidance center or institution and obtain the number of veterans who have reported for counseling and the last control number assigned. This information will be the basis for preparing an adjusted VA Form 4-1358 which will be submitted to the Accounting activity no later than noon of the first workday following end of month. When copies of authorizations are received by the Fiscal activity, it will confirm that VA Form 4-1358 has been properly adjusted.

e. When vouchers are processed for payment, the attached original copies of VA Form 22-1985 will show control numbers which will be the basis for liquidating applicable authorizations.

3A.26 SHARING MEDICAL RESOURCES-38 U.S.C. 5051

a. When services are rendered by the VA under contracts or agreements, the Fiscal activity will receive from the Medical Administration activity billings for reimbursable services furnished medical schools, hospitals, and research centers with hospital facilities. The amounts billed will be recorded as receivable reimbursements to the Medical Care appropriation. In those instances where formal billings have not been billed at the close of the accounting period, estimated reimbursements will be recorded as accrued reimbursements.

b. When services are to be procured by the VA under contracts or agreements with medical schools, hospitals, and research centers with hospital facilities, the Fiscal activity will receive from the Medical Administration activity a VA Form 4-1358, Estimated Miscellaneous Obligations or Change in Obligation, to cover the estimated costs of services to be received. The amount will be recorded as accrued expenditures and accrued services payable. At the end of each month the estimated obligation will be adjusted to as realistic an amount as possible to the services received.

3A.27 GRANTS FOR RESEARCH, TRAINING OR DEMONSTRATION PROJECTS-PUBLIC LAW 90-31

a. Funds made available for grants approved by the Public Health Service under the provisions of Public Law 90-31 will be accounted for under the Medical and Prosthetics Appropriation 36_/_0161.

b. Grants awarded will cover a project period of 1 year or more depending on the project and the approval by the Public Health Service, i.e., a project period may run from May 1, 1977, through April 30, 1979. A grant period covering the grant budget year will be for a grant year; i.e., a grant budget year may run from May 1, 1977 through April 30, 1978. Funds for the grant budget year will be made available by the Public Health Service on OPAC bills or SF 1081 to Central Office (047H1), Central Office (10A23) will then allot to the respective facility on VA Form 4-4564 the funds received.

c. On receipt of OPAC bills or SF 1081 from the Public Health Service, the VA Central Office Finance Division (047H1) will record the OPAC bills or SF 1081 by debiting account 1012-Disbursing Authority, and crediting account 2095-Advances Received from other Government agencies.

d. In order to comply with the reporting requirements of the Public Health Service a control allotment ledger sheet and subsidiary allotment ledger sheets, by object class, and one for indirect cost, will be maintained for each grant received as shown in figure 3.1. Accounts receivable will not be recorded in these allotment ledgers. Collections of accounts receivable will be recorded as a reduction of net disbursement voucher and an increase of unobligated allotment. The unobligated allotment for all grants received will be reconciled to the balance in general ledger account 2227 at the end of each accounting period.

e. All accounting documents and other posting media will show the number of the grant to which they pertain.

f. Indirect cost for overhead will be provided by Public Health Service and will be included in the funds received for each grant. At the end of each month, the Fiscal activity at the station concerned will compute

the indirect cost for each training grant by taking 8 percent of the disbursement vouchers shown in the allotment ledger for that month exclusive of alterations and renovations of any type, cost of any item of equipment in excess of the $2,500, hospitalization or hospital bed costs and tuition or related fees. Indirect cost for research and demonstration projects will be computed by taking 15 percent of all personal services costs, including all fringe benefits, such as FICA, retirement contributions, etc. These indirect costs will be charged to the general and allotment ledgers as applicable. At the same time the Medical Care appropriation will be reimbursed by this amount to cover overhead cost provided. OF 1017G dated the last day of the month will be used to make this transfer of funds in accordance with currently prescribed procedures. In no case should the amount computed for indirect cost during a grant year exceed the amount shown on notice of grant awarded.

g. In addition to VA reporting requirements stations will provide the Public Health Service with quarterly and annual reports on research grant expenditures. Requirements for these reports will be provided to stations receiving rants by the Public Health Service. However, in order to comply with Public Health Service requirements separate allotment ledgers by grant number and object class as outlined in subparagraph d above will be maintained.

3A.28 FEDERAL EMPLOYEE PARKING FACILITIES (OMB CIRCULAR A-118) AND 38 U.S.C. 5009

a. OMB Circular A-118 provides that fees collected for the use of parking facilities shall be applied toward the Standard Level User Charges (SLUC) paid by using agencies to GSA. This procedure is available to other than DM&S facilities who occupy GSA procured facilities.

b. The money received either by payroll deduction or cash receipt (for use of the parking facilities) will be initially recorded in the Budget Clearing Account 36F3875. At the end of each month an appropriation reimbursement will be processed for whichever is less; total revenue received or total expenses incurred. Expenses (cost) incurred will be charged to the appropriate cost center and subaccount. On a quarterly basis any excess cash balance remaining in the Budget Clearing Account 36F3875 will be transferred to VA Central Office Finance Service (047H1) by use of VA Form 4-4564, Transfer of Disbursing Authority. VA Central Office (047H1) will then utilize these transferred funds to offset the SLUC billings for Agency's parking charges paid to GSA. VA Central Office will then transfer any excess cash balances to the General Fund Receipt Account 363220.

c. Additionally, 38 U.S.C. 5009 provides for contractual payments of parking spaces from Construction and Operation of Garage and Parking Facilities 36X4538. It also provides appropriated funds for issuing allocations to stations for the construction of parking facilities. Accountability and other related accounts for this fund are listed in Appendix O.

3A.29 GRANTS AND ASSISTANCE FOR DEVELOPMENT, EXPANSION AND IMPROVEMENT OF MEDICAL AND ALLIED HEALTH EDUCATION

a. Obligations for grants and assistance for development, expansion and improvements of medical and allied health education, governed by 38 CFR 17.400-17.416, will be accounted for under appropriation 36_/_0182, Assistance for Health Manpower Training Institutions, VA.

b. Grant agreements will be obligated at the Central Office level when the award is made. Grant agreements may be financed by either payment in advance or by way of reimbursement for expenditures made by grantees, with necessary adjustment on account of overpayments or underpayment. Advance payments to grantees will be made by the letter-of-credit method or by Treasury check, depending on the amount of cash required and the period covered by the grant agreement. The advance payments will be processed in accordance with the regulations and procedures prescribed in Chapter 11, Cash Advances Under Federal Grants and Other Programs, of this manual. The grant agreement will require the grantee to submit quarterly reports of actual expenditures. These reports will be used to liquidate obligations and advance payments and to record accrued expenditures and applied costs.

c. Orders placed by field stations will be obligated when issued for operating costs or operating equipment procured for the improvement in methods of education and training.

d. Orders placed for supplies, services, and contracts for extension, expansion, alteration, improvement, remodeling and repair of VA owned or controlled buildings and structures, including equipment, will be obligated when issued.

e. Additional direct operating costs incurred at the field station level for this program will be charged to the Medical Care appropriation. Based on a memorandum from operating officials, these costs may be transferred to appropriation 36_/_0182 by means of a OF 1017G marked "EXPENDITURE TRANSFER." Medical care costs will be reduced accordingly.

f. Appropriated funds remaining at the end of the fiscal year are available for use in subsequent fiscal years until the end of the fiscal year for which the appropriation is made. For example, funds allocated under appropriation 363/90182 are available for obligational purposes for fiscal year 1973 through fiscal year 1979.

Figure 3.1 Allotment Ledger (Control and Subsidiary)

Figure 3.2 Cost Accounting Data

SECTION B. ALLOTMENT ACCOUNTING RECORDS

3B.01 LEDGERS

At the beginning of each fiscal year, a single allotment ledger account will be established for each allotment restriction under which current year funds are allotted to the station. Except in unusual cases it should not be necessary to establish allotment accounts below the Central Office allotment restriction level. Since cost accounts are necessary to assure compliance with the approval fiscal plan, they should be used or analytical purposes.

3B.02 ALLOTMENT LEDGER-TOTALS TO DATE (VA FORM 1305)

Except where mechanized accounting procedures specifically provide otherwise, allotment accounts will be maintained on VA Form 1305. Total monthly transactions developed from these accounts will form the basis for entries to be made to the related accountability accounts of the general ledger.

3B.03 MAINTENANCE OF ALLOTMENT LEDGERS

a. After the obligation documents described in the preceding section have been recorded in the appropriate allotment account they will be filed by allotment restriction and obligation number in the undelivered order file. At IFCAP (integrated funds control and automated procurement) facilities, the undelivered order file will be resident within the IFCAP database. No hard-copy obligation document will be received by Fiscal.

b. Upon receipt of a receiving report or other evidence that services previously ordered, have been received the obligation document will be marked to this effect, dated, and transferred to the accrued expenditure file. If the services ordered have been only partially completed the obligation document will show the amount of the order which has become an accrued expenditure and the amount which remains an undelivered order. The document will be returned to the undelivered order file. To facilitate the audit of obligations by General Accounting Office representatives required by 31 U.S.C. 1501 the accrued expenditure file will be segregated by fiscal year. At IFCAP facilities, the accrued expenditure file will be maintained in the IFCAP database. Transfers from the undelivered order file to the accrued expenditure file will be by electronic posting.

c. Receiving reports will be recorded as accrued expenditures and reductions of undelivered orders. Supply Fund issues will be recorded as outlined in paragraph 3A.13.

d. Services not subject to receiving reports will be recorded at the end of each month as accrued expenditures. These accruals will be reversed as the first entry of the succeeding month.

e. Voucher payments, including reimbursements to the Supply Fund, will not be recorded in the allotment ledgers unless there is a difference between the voucher and the amount of the receiving report or the voucher was not preceded by a receiving report.

f. When a voucher not proceeded by receiving reports covers payments of several authorizations issued under one estimated obligation, the decimal suffixes assigned to the individual authorizations should be posted in detail to either the estimated obligation document or to the allotment ledgers, but not to both.

g. Advance payments for goods, services, etc., will not be recorded in the allotment ledgers since they have no effect on either undelivered orders or accrued expenditures.

h. Bills issued for refunds receivable will be entered as reductions of accrued expenditures. Therefore, collections of these receivables will not be recorded unless the amount differs from the amount billed. Collections of refunds not previously billed will also be recorded as reductions of accrued expenditures. Refund receivables writeoffs will be recorded as increases in accrued expenditures.

i. The total amounts appearing on the documents in the undelivered order file will be reconciled monthly with the related allotment accounts and the reconciliation retained for audit purposes.

j. The undelivered order and accrued services files will be analyzed monthly, and the initiating offices notified of those documents which appear to have been outstanding for a unreasonable length of time. FL4-297, Request for Information Re: Undelivered Orders and Commitments, or computer generated listings, may be used for this purpose. The initiating office will ascertain the status of such authorizations or orders and notify the Fiscal activity accordingly. During the monthly reconciliation of undelivered orders, the undelivered order file will be reviewed to identify those undelivered orders inactive for 90 days or more. Those outstanding undelivered orders inactive for more than 90 days will be called to the attention of the Supply activity for review and verification of validity of the order. Once identified as inactive for 90 days or more, such identified inactive undelivered orders will continue to be reviewed and verified for validity every 90 days. In addition, general ledger account 2242, accrued expenditure and undelivered order adjustments-expired appropriations, will be analyzed monthly to ascertain the propriety of entries.

k. Adjustments of efforts between limitation symbols within the same appropriation will be effected by use of OF 1017G. The form will be posted to the allotment accounts and filed for subsequent review and audit. Although the disbursing authority accounts of the general ledger are not affected by adjustments of this nature, the correction should be noted on the copies of the related schedules on file in the Accounting Section. Errors in posting or inaccuracies and discrepancies discovered in posting media used in the maintenance of the accounts comprising the allotment ledger, or in entries thereto, will be corrected by a reverse entry of the incorrect amounts and an additional posting of the correct amounts through the use of OF 1017G.

3B.04 POSTING DATE

Documents should be grouped for posting to the all otinent account so non "accounting day" basis to assure an efficient flow of work. The accounting day assigned to a group of documents will be the date of entry to the allotment accounts. Documents will be segregated by accounting days in a manner that will show, as closely as possible, the chronological order in which the transactions occurred. The date of the accounting day assigned to obligation documents should generally be the date the document is received in the Accounting Section and availability of funds determined. When accounts are kept open on the first month to assure posting of all obligations applicable to the closing month, the documents will be posted under the date of the last accounting day of the month being closed.

3B.05 OBLIGATION NUMBERING SYSTEM

At the beginning of each fiscal year, Fiscal Service will furnish the Supply Service with a number series for each appropriation and fund under which Supply will issue orders. Obligations for items such as beneficiary travel, utilities, ambulance service, etc., will be assigned from a separate register maintained by Fiscal Service only. In all instances a block of numbers will be allocated and assigned in numerical sequence. Although Supply places the number on the order it does not become a valid obligation until Fiscal has certified as to the availability of funds. This fund certification will state "the supplies/services listed on this request are properly chargeable to the following allotments, the available balances of which are sufficient to cover the cost thereof and funds have been obligated." The certification will contain the signature of the obligator as well as the appropriation and accounting symbols. With the exception of the copy retained for posting purposes, all copies will be returned to the initiating office.

SECTION C. ANNUAL CLOSING

3C.01 CLOSING OF ALLOTMENT LEDGERS FOR UNEXPIRED ANNUAL APPROPRIATIONS

a. Allotment ledger sheets maintained for unexpired annual appropriations will be closed as of September 30. As part of the year end closing procedures all documents in the undelivered order file will be reviewed, and, where there is a slight possibility that the order will be received, action should be taken to have the order canceled. Upon completion of the above action the balances remaining in the accrued expenditure, undelivered order, allotment, and unobligated columns should be verified with the related account balances in the general ledger. Any remaining unobligated balance will be dropped. The amount of unobligated balance dropped will be posted as a negative item in the allotment column on the current transactions side of the allotment ledger. A double ruled line will then be drawn on the allotment ledger sheet.

b. Allotment accounts will not be maintained for expired annual appropriations.

3C.02 CLOSING OF ALLOTMENT LEDGERS FOR NO-YEAR APPROPRIATIONS

a. Allotment ledger sheets maintained for no-year appropriations will be closed as of September 30 each year. As of October 1, a new allotment ledger sheet will be opened for each appropriation with undelivered orders or unobligated balances of allotment brought forward. The manner in which the allotment ledger sheets are to be closed and balances brought forward to the new sheet follow:

(1) The fiscal year to date total of undelivered orders will be posted as a negative amount in the undelivered order column, and the total of the undelivered orders plus the unobligated balance of allotment will be posted as a negative amount in the allotment column on the current transaction side of the allotment ledger sheet, and identified as "Balances Forwarded." This posting will result in the extension of the accrued expenditure balance to the accrued expenditure and allotment columns on the fiscal year totals to date side of the ledger sheet. Double ruled lines should then be drawn and no additional entries made below the lines.

(2) The new accounts will be opened by posting as positive entries in the undelivered order and allotment columns of the new sheet those amounts which were posted as negative items in these columns on the old sheet. This posting will result in the extension of the undelivered order, allotment, and unobligated balances to the appropriate columns on the fiscal year totals to date side of the new ledger sheet. This entry will be identified as "Brought Forward."

b. The above method of closing allotment accounts for no-year appropriations is illustrated below.

ALLOTMENT LEDGER

           Current Transactions          Fiscal Year Totals To Date                    

           Unde- livered   Allot- ments   Accrued     Unde-       Allot-      Unob-        
           Orders                         Expend-     livered     ments       ligated      
                                          itures      Orders                  Balance of   
                                                                              Allot.       

                                                                                           

9-30-77                                   $793.00     $102.00     $1475.00    $580.00      

                                                                                           

Balance    ($102.00)       ($682.00)      $793.00     -0-         $793.00     -0-          
Fwded                                                                                      

                                                                                           

Brought    $102.00         $682.00                    $102.00     $682.00     $580.00      
Fwd                                                                                        

3C.03 CLOSING OF ALLOTMENT LEDGERS FOR MULTIPLE-YEAR APPROPRIATIONS

a. Allotment ledger sheets maintained for multiple-year appropriations will be closed as of September 30 each fiscal year. For all except the final year in which the appropriation is available for obligation, the allotment ledger sheets will be closed in accordance with paragraph 3C.02 of this manual. The final year in which funds are available for obligation will be closed as directed by paragraph 3C.01a.

b. Allotment accounts will not be maintained for expired multiple-year appropriations.

3C.04 ALLOTMENTS FOR NEW FISCAL YEAR

Allotments for the new fiscal year which may be received prior to the end of the closing fiscal year should be posted to allotment accounts as having been received on or after October 1, and should be so reflected in fiscal reports.