Establishing a New Borrowings Program Agreement
An agency may borrow from the Secretary of the Treasury and incur new direct loan obligations and new loan guarantee commitments to the extent that the following is provided in advance of an appropriations act:
- New budget authority to cover their costs
- A limitation on the use of funds otherwise available for the cost of a direct loan or loan guarantee program
- Authority is otherwise provided
When an agency exercises its authority, the Office of Management and Budget (OMB) should be contacted. OMB will help the agency in, among other activities, setting up any necessary financing and receipt accounts with the Financial Management Service (FMS).
Drafting the Agreement
Once all necessary accounts have been established, the borrowing agency contacts a member of the Bureau of the Public Debt's (BPD) Federal Borrowings Branch. The Federal Borrowings Branch is responsible for the accounting and reporting of Treasury's loans receivable and the related interest receivable. The Federal Borrowings Branch also helps the agency to set up the required agreement between the borrowing agency and Treasury. These are the steps taken while drafting the agreement:
- BPD's Office of the Chief Counsel conducts a legislative review of the agency's borrowing authority. This review establishes for the Federal Borrowings Branch that appropriate legislation is current, whether the agreement should fall within the Federal Credit Reform Act of 1990 (FCRA) guidelines, and if any exceptions or conditions exist in the legislation that require special attention.
FCRA guideline conditions requiring special attention include:
- If there are no exceptions, a standard Credit Reform Agreement (Word version) is used. The borrowing agency replaces the underlined parts of the standard agreement with the appropriate information.
- If there are exception(s), it is possible the standard Credit Reform Agreement (Word version) may be used with modification.
- If the agreement does not follow FCRA guidelines, a nonstandard, original agreement will be required.
Review and Approval Process
A review and approval process follows the drafting of the agreement. The agreement is not valid until signed and dated by a certified officer at the agency and the Assistant Commissioner of the Office of Public Debt Accounting for the Bureau of the Public Debt. Agencies should allow at least two weeks for BPD to finish the legislative review and finalize the borrowing agreement.
Along with the agreement, the borrowing agency will provide the Federal Borrowings Branch with a Sub-Cohort Identification Request Form, (Excel version) if the agency records direct loans or loan guarantees at a level more detailed than the cohort level.
Borrowing and Repayment Transactions
The Governmentwide Accounting (GWA) system is an internet-based system operated by FMS. Access to GWA is granted by FMS and can be requested online at www.fms.treas.gov/gwa/.
- The borrowing agency may submit a principal advance request through GWA to BPD once the agreement and the Sub-Cohort Identification Request Form have been made final and approved.
- The borrowing agency will submit all interest payments through the Intra-Governmental Payment and Collection (IPAC) system. The IPAC system is an internet-based system operated by the Financial Management Service.
Information on obtaining access to the IPAC system can be requested and found online at www.fms.treas.gov/goals/ipac/.
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