NO: 94-26-OMB
AGENCY: OFFICE
OF MANAGEMENT & BUDGET
EFFECTIVE DATE:
JULY 1, 1993
EXPIRATION DATE:
INDEFINITE
SUPERSEDES: 87-09-OMB
SUBJECT: STATE
EXPENDITURE RECOVERIES FROM THE FEDERAL GOVERNMENT
ATTENTION: DIRECTORS
OF ADMINISTRATION AND CHIEF FISCAL OFFICERS
FOR INFORMATION
CONTACT: RICHARD BRUNO
PHONE: 292-5959
Expenditures billed
and collected from the Federal Government often include
amounts which represent non-matching State appropriations or the use of
State
owned or financed resources. Examples of such appropriations and resources
include items such as depreciation expense and overhead costs that are
chargeable to federal programs directly or through a direct cost allocation
method.
While these expenditures
may be allowable charges to the Federal Government,
they represent recoveries to the general operation of State Government.
The
procedure of applying collections from the Federal Government for these
expenditures to outstanding federal accounts receivable balances is not
in
accordance with proper accounting practice. Such a procedure results in
the
build up of federal control account balances and the understatement of
State
fund balances.
Proper accounting
procedures and controls require that expenditures collected
representing depreciation or overhead items directly appropriated in
non-federal accounts for non-federal purposes be credited upon receipt
to
a state revenue budget. These collections shall not be applied to open
accounts receivable balances nor returned to a state expense budget account.
This policy will
take effect immediately. Agencies will transmit that portion
of receipts from the Federal Government representing the recovery of state
provided non-matching resources as described above into appropriate revenue
budgets.
Richrd F. Keevey
Director