1. Purpose. This chapter describes policies for operation and management of the U.S. Geological Survey (USGS) Working Capital Fund (WCF).

2. Authority. The USGS WCF was established by Public Law (P.L.) 101-512 (November 5, 1990), as codified in 43 U.S.C. 50a (see USGS WCF Handbook 335-6-H). Treasury Department appropriation symbol 14X4556 has been assigned to this fund. P.L. 103-332, dated September 30, 1994, modified the original language to allow additional uses of the USGS WCF.

3. Background. In fiscal year 1989, Congress expanded the existing Telecommunications Amortization Fund through establishment of a USGS WCF. The fund was originally established to support the Washington Administrative Service Center and to support the replacement of the USGS mainframe computer, telecommunications equipment, and related Automated Data Processing equipment. Additional Congressional authority was added in fiscal year 1995 enabling USGS to use the WCF to fund laboratory modernization and operation, facilities improvements, publications, scientific equipment, and other types of equipment replacement.

4. Policy.

A. Investments: A key purpose of the WCF is to plan for long-term investments and accumulate the required funds over several fiscal years. The USGS is authorized to use the WCF to invest funds from appropriations and/or reimbursable agreements, without fiscal year limitations, for materials, supplies, telecommunications and other equipment and facilities renovations in support of USGS programs and other agencies of the Federal Government. Normal operating expenses may not be funded through the WCF. All Investments and expenditures from a WCF Investment component must be documented in an approved, multiyear Investment Plan (IP). Investments must occur, at a minimum, in two fiscal years before acquisition can occur, and are expected to be evenly balanced over the time period defined in the IP. Prior year contributions may not be withdrawn from the WCF under any circumstances; however, they may be redirected within the WCF. All investments must be expended from the WCF for an approved investment. Current year contributions may be withdrawn, subject to appropriate approvals.

B. Fee-for-Service: WCF Fee-for-Service components will operate in a businesslike manner, recovering fees for services performed based on an established fee schedule, established through a rate-setting process. WCF Fee-for-Service components shall operate in compliance with Office of Management and Budget (OMB) Circular A-25, User Charges, and recover the full cost of goods, services, and resources provided to their customers. For each component, an annual budget and pricing schedule are required. User charges shall be reviewed no less than biennially. In order for a WCF Fee-for-Service component to retain fees from non-USGS customers, USGS must have authority to retain fees from the non-USGS customer. Absent such authority, the user charges or recovered fees must be credited to the general fund of the Treasury as miscellaneous receipts, as required by 31 U.S.C. 3302. The USGS administrative control of funds policy applies to all activities of the WCF (see Survey Manual (SM) Chapter 327.1).

5. Responsibilities and Delegations. SM 205.10, Appendix A, Section P, establishes the delegations for the USGS WCF.

A. Chief Financial Officer (Chief, Administrative, Policy and Services):

(1) Makes final decisions and exercises oversight with regard to WCF management and operations.

(2) Approves the addition or deletion of any WCF component, including any implementation of proposed legislative changes, in coordination with the Office of Budget and Performance.

(3) Approves guidelines, bureau regulations, and implementation policies and procedures for the WCF.

(4) Approves 4th quarter unplanned contributions in excess of 25 percent of year’s total contribution per IP, or $5,000, whichever is greater. This approval includes revisions and/or new 4th quarter IPs.

B. Deputy Chief Financial Officers (Deputy Chief, Administrative Policy and Services for Financial Management and the Director, Office of Budget and Performance):

(1) Exercises oversight with regard to WCF management and operations.

(2) Advises the Chief Financial Officer on the approval of the addition and deletion of any WCF component, including any implementation of proposed legislative changes.

(3) Prepares guidelines, Bureau regulations, and policies for the WCF.

C. Chief, Office of Budget and Performance:

(1) Advises the Chief Financial Officer and USGS organizations on WCF budgetary issues.

(2) Provides WCF oversight through budget execution reviews of reimbursements, investment contributions, and outlays.

(3) Establishes WCF budgetary funding control levels and approvals in the Federal Financial System (FFS).

(4) Prepares guidance and coordinates WCF budgetary reports for the Department of the Interior, OMB, and Congress.

D. Chief, Office of Accounting and Financial Management (OAFM):

(1) Advises the Bureau’s organizations on the accounting and reporting policies, procedures, and systems used in the WCF to accumulate, distribute, and recover costs.

(2) Develops financial reports to satisfy informational requirements of the Bureau as a whole, and the WCF users and managers specifically.

(3) Coordinates FFS system enhancement requests to meet requirements of the WCF and its users.

(4) Establishes and maintains reference codes for recording WCF transactions in FFS (see USGS WCF Handbook 335-6-H).

(5) Prepares external and internal reports documenting WCF transactions and fund status.

E. Chief, Office of Internal Control and Quality Assurance:

(1) Advises the Bureau’s organizations on the accounting and reporting policies, procedures, and systems used in the WCF to accumulate, distribute, and recover costs.

(2) Establishes, evaluates, monitors and recommends improvements of the WCF internal controls.

(3) Recommends guidelines, Bureau regulations, and policies for the WCF, in coordination with the Office of Budget and Performance.

F. Office of Fiscal Services, on behalf of the Director, Associate Directors, and Chief, Administrative Policy and Services:

(1) Provides Cost Center oversight, monitoring of contribution schedules and processing of contributions to FFS.

(2) Consolidates and submits to the Office of Budget and Performance the WCF Annual Out-Year Plan for Headquarters Cost Centers and organizations, in accordance with USGS WCF Handbook 335-6-H. Ensures complete response and reviews input provided.

(3) Consolidates and submits to the Office of Budget and Performance the WCF Annual Out-Year Plan and Schedule of Open Orders and Accumulated Equipment Replacement Funds (Fee-for Service only) for the budget process (see Appendix F in WCF Handbook 335-6-H).

(4) Ensures accurate coding and recording in FFS of WCF agreements, contributions and expenditures. Works with the Cost Centers to resolve negative balances or other abnormalities.

G. Branches of Fiscal Services on behalf of the Regional Executives and Regional Directors:

(1) Provide Cost Center oversight, monitoring of contribution schedules and processing of contributions to FFS.

(2) Consolidate and submit to the Office of Budget and Performance the WCF Annual Out-Year Plan for Field Cost Centers and organizations, in accordance with USGS WCF Handbook 335-6-H. Ensure complete response and review input provided.

(3) Consolidate and submit to the Office of Budget and Performance the Schedule of Open Orders and Accumulated Equipment Replacement Funds (Fee-for Service only) for the budget process (see Appendix F in WCF Handbook 335-6-H).

(4) Ensure accurate coding and recording in FFS of WCF agreements, contributions, and expenditures. Work with the Cost Centers to resolve negative balances or other abnormalities.

H. Director/Deputy Director, Associate Directors, Regional Directors, Chief Information Officer and Chief, Administrative Policy and Services for their Cost Centers and organizations:

(1) Review estimated WCF current fiscal year contributions and expenditures on the WCF Annual Operating Plan in accordance with SM 327.1, Funds Control, and USGS WCF Handbook 335-6-H, prior to submission to the Office of Budget and Performance.

(2) Review the WCF Annual Out-Year Plan and Schedule of Open Orders and Accumulated Equipment Replacement Funds (Fee-for Service only) for the budget process, prior to submission to the Office of Budget and Performance(see Appendix F in WCF Handbook 335-6-H).

(3) Approve withdrawals of current fiscal year contributions for revised IPs, in coordination with the servicing Fiscal Services Team Leads.

(4) Approve redirection of prior year contributions or unobligated balances included in revised IPs, in coordination with the servicing Fiscal Services Team Leads and the Office of Budget.

(5) Prepare request for establishment of new WCF components.

I. Approving Officials — SES Managers:

(1) With the exception of certain 4th quarter unplanned IP contributions (see 6.5.A(4)), approve initial IPs and expenditure plans and subsequent revisions from requesting officials, only when IPs show a stated level of planning and accumulation of funds over a reasonable period of time or have a documented reason why a variation was necessary in a specific situation.

(2) Maintain records on information used to establish fees and investment contributions and specific methods used to determine them. Copies will be forwarded to the servicing Fiscal Services Team.

(3) Ensure that contributions and expenditures are made in accordance with IPs.

(4) Ensure that billings are made in accordance with customer agreements, for Fee-for-Service organizations.

(5) Ensure appropriate use of the WCF for their Cost Center and organization.

(6) Review annual budgets and pricing schedules for Fee-for-Service components per OMB Circular A-25, which requires agencies to review user charges biennially.

J. Requesting Officials - Managers at Field Cost Centers or Managers at Headquarters Offices:

(1) Identify planned acquisitions for their organizations in Investment components of the WCF.

(2) Prepare and submit IPs and expenditure plans to the appropriate official for approval.

(3) Approve funds for WCF Investment component’s expenditures.

(4) Establish unique account in accordance with Bureau policy.

(5) Prepare estimated WCF current fiscal year contributions and expenditures on the WCF Annual Operating Plan in accordance with Survey Manual Chapter 327.1, Fund Control, and USGS WCF Handbook 335-6-H, prior to submission to the next level of review.

(6) For Fee-for-Service components, prepare annual budgets and pricing schedules, per OMB Circular A-25, which requires agencies to review user charges biennially.

6. Operations of Fund Components. Activities of the WCF include operating entities referred to as components. Fund components will be classified as either Fee-for-Service or Investment.

A. Fee-for-Service Component. Fee-for-Service components are business-like activities that operate within the WCF, providing a continuous cycle of client services for fees established in a rate setting process. The primary source of funds is the fees charged for the services provided. However, in some cases, components are partially funded by appropriations. Under this concept, all fees (and appropriated funds, if applicable) received are the basis for funding and expenditures.

(1) OMB Circular A-25, User Charges, requires that user charges should be sufficient to recover the full cost of goods, services, and resources provided by the Federal Government. WCF Fee-for-Service components should recover depreciation expenses through user charges.

(2) Full costs are the costs of resources incurred by the component that directly or indirectly contribute to the outputs.

(a) Direct costs are costs that can be specifically identified with an output such as salaries and benefits.

(b) Indirect costs are costs of resources that are jointly or commonly used to produce two or more outputs but are not specifically identifiable with any particular output.

(3) The costs of producing outputs for Fee-for-Service components will be monitored and compared to amounts collected from customers.

(4) Service orders may be paid at the time orders are placed. An order for service may be paid from appropriated funds at the time it is placed provided that the order meets a legitimate, or bona fide, need arising in the current fiscal year. Orders may be placed no earlier than is necessary to accomplish the work within the desired/customary period of time. Year-end unobligated balances must be supported by a Schedule of Open Orders and Accumulated Equipment Replacement Funds (see Appendix F in WCF Handbook 335-6-H).

(5) Fee-for-Service components that reserve funds for equipment replacement must document their reserves. The fee-setting schedule must clearly establish that portion of the fee that is for equipment replacement. Equipment replacement funds that will accumulate balances in excess of $10,000 over two fiscal years must establish an IP in the WCF Equipment Replacement Investment component and make regular contributions in accordance with the procedures established for that component. Accumulated equipment replacement balances that will not exceed $10,000 over two years will be maintained by the Cost Center in the Fee-for-Service component and must be documented locally. Documentation must be substantive and will be subject to the annual financial audit. Equipment replacement funds that remain in the Fee-for-Service component and are part of the year-end carryover balance must be identified in the Schedule of Open Orders and Accumulated Equipment Replacement Funds.

(6) The WCF Fee-for-Service components may carry a reasonable balance as an allowance to maintain operational readiness in the event of emergency situations, unusual maintenance needs, or a temporary reduction in revenues due to a period of continuous lower workload. The test of reasonableness will be measured in terms of the individual Fee-for-Service component’s normal business needs. Documentation to substantiate the balance will be maintained by the Fee-for-Service component and will be subject to the annual financial audit. The Operational Readiness Allowance must be disclosed in the Schedule of Open Orders and Accumulated Balances.

(7) The WCF will retain ownership of equipment purchased by Fee-for-Service components. The proceeds from the sale of WCF equipment will remain in the component and be designated for new or replacement equipment. Refer to 41 CFR, Part 102–39 – Replacement of Personal Property Pursuant to the Exchange/Sale Authority.

B. Investment Component. The USGS is authorized to use the WCF to invest funds, without fiscal year limitations, for materials, supplies, telecommunications, and other equipment and facilities renovations in support of USGS programs and other agencies of the Federal Government. Source of funds may be from appropriations and/or reimbursements. Normal operating expenses are never to be supported by an Investment component in the WCF. The WCF may not be used for building construction but may be used for above-standard costs required by General Services Administration (GSA) in building construction, and it may be used for the renovation of existing space.

(1) IPs. Use of a WCF Investment component requires the preparation of an IP. An IP can be prepared at any level within the USGS. The IP can be used for requirements at any level in the organization; for example, for telecommunications, there could be an IP at the Bureau, Region, District, Cost Center, and/or Office level. Since a key purpose of the WCF is to plan for long-term investments and accumulate the required funds over several years, development of, and adherence to, an investment schedule is crucial. The IP must describe the purpose of the plan.

(a) Contribution Schedule. Managers are required to prepare multiyear IPs for WCF investments. The normal expectation for these IPs is a balanced contribution over the time period defined in the IPs. Exceptions to this norm are allowed but are strongly discouraged. Any exception must be subject to adequate management controls within the Bureau WCF planning process to ensure that it is justified.

(b) Fourth Quarter Contributions. Fourth quarter contributions are monitored by the Bureau to ensure that the total unplanned contributions do not exceed 25 percent of the year’s total contributions per IP or $5,000, whichever is greater. This includes revisions and/or new 4th quarter IP(s).

(c) Limitations. The contribution of funds to the WCF for all Investment components must be made, at a minimum, in two fiscal years before acquisition can occur. Acquisition may occur during the second fiscal year that contributions are made. The minimum IP will be $10,000, with a minimum contribution requirement of at least $5,000 per year, for the first two years.

(d) Revisions to IPs. Revisions to the IP, which either increase or decrease contributions, may occur at any time during the fiscal year. A revised IP shall be prepared for all changes, which must be documented and fully explained on the revised IP and reapproved by the Approving Official.

(e) Withdrawals/Redirections. Current year contributions to the WCF may be removed from the WCF with the approval of the Director/Deputy Director, Associate Directors, Regional Directors, Chief Information Officer, or Chief, Administrative Policy and Services, in coordination with the Bureau Office of Budget and Performance. Prior year contributions may not be withdrawn from the WCF under any circumstances; however, they may be redirected, with the approval of the Director/Deputy Director, Associate Directors, Regional Directors, Chief Information Officer, or Chief, Administrative Policy and Services, in coordination with the Office of Budget and Performance, to other approved IPs. If the redirection results in an entirely new IP not yet approved, the rules outlined in (a) through (c) above apply. Withdrawals and redirections will require a revised and approved IP showing adjusted contribution and expenditure schedules.

(f) Acquisition. In order to maintain the integrity of the WCF, investments and expenditures will be obligated and paid from the WCF.

C. Account Structure.The Bureau will establish unique account numbers in the WCF to record all contributions and expenditures. These account numbers cannot be used in more than one FFS fund code.

D. Establishing New Components.The establishment of any WCF component must be approved by the Chief Financial Officer and coordinated with the Office of Budget and Performance.

E. Planning and Budgeting. Regional Directors, Associate Directors, Office Chiefs reporting to the Director/Deputy Director, and the Chief, Administrative Policy and Services, are responsible for their Cost Centers and organizations for providing the following two planning documents to the Office of Budget and Performance: the WCF Annual Operating Plan and the WCF Annual Out-Year Plan.

(1) The WCF Annual Operating Plan is an aggregate of WCF activity for each Fee-for-Service and Investment component. The WCF Operating Plans will be submitted to the Office of Budget and Performance during the following time periods:

Initial Plan: end of August

Revised Plan: mid-April

Revised Plan: mid-July

When changes occur to the WCF Annual Operating Plan after mid-July (after the last annual Operating Plan revision), regardless of the amount, these changes must be documented, and a copy of the modified plan submitted to the Office of Budget and Performance.

(2) The WCF Annual Out-Year Plan is a forecasting tool for WCF activity. The Out-Year Plan includes information for each component reflecting the starting and ending balances and the projected obligations by fiscal year and budget object class. The Out-Year Plan should be consistent with the Operating Plan, and both plans should be submitted to the Office of Budget and Performance in late August. The Out-Year Plan will require revision for OMB in mid-November. The Out-Year Plan does not need to be included with the revised Annual Operating Plan submissions in April and July.

(3) The Schedule of Open Orders and Accumulated Equipment Replacement Funds support the Fee-for-Service components year-end unobligated balances (see Appendix F in WCF Handbook 335-6-H). This schedule must accompany the mid-November WCF Out-Year Plan and support the Final Ending Unobligated Balance for the immediate past program year.

7. WCF Accounting. FFS Reference Tables.

A. FFS Fund Codes. Separate FFS fund codes will be established for each approved component to record WCF transactions.

B. FFS Program Codes. FFS program codes will be used to facilitate identification and reporting of Investment component activities.

8. Reporting.

A. External reporting requirements for the WCF are the same as for any other bureau fund.

B. Standard FFS reports produced monthly for individual FFS Fund Codes will be available for each WCF component.

9. Procedures. Detailed procedures and responsibilities for investing funds in the WCF are contained in the USGS WCF Handbook 335-6-H.