- 1.33.4.1 OVERVIEW
- 1.33.4.2 POLICIES
- 1.33.4.3 OPERATING PROCEDURES
-
The Financial Operating Guidelines (FOG) assist Financial Plan Managers in fulfilling their responsibilities to effectively manage budgetary resources.
-
This guidance provides fund control regulations, as required by the Office of Management and Budget (OMB) Circular A-11, found on http://www.whitehouse.gov/omb/circulars/index-budget.html , Part 4, Section 150 Administrative Control of Funds.
-
This guidance focuses on monitoring and controlling the money Congress has appropriated to the IRS. In compliance with the Antideficiency Act and applicable provisions of Appropriation law, the IRS cannot spend or obligate more than Congress has appropriated, and may use funds only for purposes specified in law. Additionally, the Antideficiency Act prohibits the IRS from spending or obligating funds in advance of an Appropriation, unless specific authority to do so has been provided in law. Each Financial Plan Manager shall comply with the Antideficiency Act and Appropriation law.
-
The Financial Operating Guidelines are published by the Chief Financial Officer's (CFO) Corporate Performance Budgeting Unit (CPB), Budget Execution Office. Comments and change requests may be submitted to *CFO CPB Financial Operating Guidelines or CFO CPB Financial Operating Guidelines@irs.gov.
-
The IRM is not specific to a fiscal year and is therefore in effect until superseded. These Guidelines take precedence over any previous financial operating instructions.
-
In the event of a Continuing Resolution (CR), specific CR operating guidance will be posted on the CPB Budget Policy website, http://cfo.fin.irs.gov/CPPD/HTML/BudgetPolicy.htm . Where different and while in effect, CR guidance takes precedence over this IRM. After Congress passes the Appropriations Act or a substitute Omnibus Appropriation bill, the IRM takes precedence, but may need revisions based on the new or revised provisions in the enacted Appropriations language.
-
Future revisions, including interim guidance during the year, will be posted to the CPB Budget Policy website.
-
Financial Plan Managers must follow these budgetary policies, which encompass both internally and externally imposed guidance.
-
The following key regulations govern the budget execution process:
-
OMB Circular A-11, Preparation, Submission, and Execution of the Budget, found on http://www.whitehouse.gov/omb/circulars/index-budget.html
-
Government Accountability Office's (GAO) Principles of Federal Appropriations Laws (aka Redbook), found on http://www.gao.gov/special.pubs/redbook1.htm
-
-
OMB Circular A-11 provides an overview of the budget process; discusses the basic laws regulating the budget process; defines the basic terms and concepts associated with the budget process; provides guidance on how to prepare and submit budget related materials required for OMB’s review; and provides instructions on budget execution, funds control and periodic reporting.
-
GAO’s Redbook is a comprehensive collection of the body of law governing the expenditure of federal funds.
-
The Thomas Register, http://thomas.loc.gov/ tracks Appropriation language. Click on "Appropriations Bills" to select current year bills, then choose the "Financial Services" Appropriation or a Continuing Resolution, for IRS's Appropriation language.
-
All Financial Plan Managers and other budget and finance professionals must refer to and use these key regulations to manage, track, and report budgetary activities. Such individuals must have a working knowledge of the contents of OMB Circular A-11, the Appropriation language, and this IRM.
-
The Antideficiency Act provides administrative and criminal penalties for overspending. See OMB Circular A-11, http://www.whitehouse.gov/omb/circulars/index-budget.html , Part 4, Section 145 Requirements for Reporting Antideficiency Act Violations.
-
In the IRS, the Associate CFO for Corporate Budget formally bears the legal responsibility to ensure that the IRS as a whole does not violate the Antideficiency Act.
-
A Financial Plan is a subdivision of funds made by the IRS to high-level Funds Centers in the Integrated Financial System (IFS), roughly correlating to Business Unit (see the FUND-1 Table in the Financial Codes Handbook, found on the CPB Budget Policy website).
-
The Associate CFO for Corporate Budget extends funds control responsibilities to the Division Commissioners or Chiefs for the funds in their Financial Plans.
-
The Division Finance Officer (DFO) is the person, often an executive, who has been delegated by their Division Commissioner or Chief the ultimate responsibility for the funds control of their Financial Plan, as well as managing their Plan through all phases of the budget cycle ( See Exhibit 1.33.4-1.).
-
The Financial Plan Manager is the person who is responsible for day-to-day operations of monitoring and controlling a Financial Plan’s funds in the execution phase of the budget cycle ( See Exhibit 1.33.4-1.).
-
Funds control and document approval authority may be delegated to individuals within the organization as needed; so for example, the Request Tracking System identifies Financial Plan Managers as those authorized to approve documents that allow the commitment and obligation of funds.
-
IRS’s appropriated funds are provided through Appropriation laws. The laws may be one of the annual Appropriations (for annual or multiyear Appropriations), an Omnibus Appropriation, a supplemental Appropriation, a CR, or permanent law (i.e., mandatory Appropriations and revolving funds). These laws often contain specific provisions regarding the execution of IRS and other government programs. All internal policies and procedures must reflect Congress’ direction as given in these laws.
-
By Appropriation law, no agency may transfer resources between Appropriations except under specific legal provisions and with Congressional approval. It is unlawful to obligate or expend more than the appropriated amount (or the apportioned amount if lower). The Administrative Provisions of IRS's Appropriation language allow the IRS very limited authority to transfer funds between Appropriations, with prior approval of the Treasury Department, OMB, and Congress. This authority must be carefully controlled by CPB. All requests for inter-Appropriation transfers must be justified to and approved in advance by CPB ( See IRM 1.33.4.3.1.5.).
-
Congress and the Administration restrict reprogramming to exert control over the budget.
-
Congress specifically limits the reprogramming of funds that augment or reduce funding of existing programs, projects, or activities. Currently, the limit is the lower of $5 million or 10%; the House and Senate Committees on Appropriations must approve in advance any reprogramming in excess of the limits included in the Appropriation language; this restricts reprogramming at the Budget Activity (BAC) level. In addition, prior approval is needed to create a new program or to eliminate an existing one through the reprogramming of funds.
-
To facilitate managing within this tight limit, CPB extends authority to Financial Plan Managers to reprogram between BACs, as long as the cumulative amount for the year does not augment or reduce a BAC by more than $100,000. CPB must approve any amount beyond that $100,000, prior to any action in IFS.
-
Financial Plan Managers may reprogram between Functional Areas only to the extent they do not change the BAC levels in excess of the $100,000 threshold. The relationship between Functional Areas and BACs is identified in Exhibit FUND-2 of the current Financial Codes Handbook, found on the CPB Budget Policy website.
-
This guidance applies to reprogramming in both IFS Budget Versions 0 and 1 (V0 and V1).
-
In addition to adhering to legislative policies, all reprogramming actions must be justified.
-
Key points to consider:
-
Reprogramming actions must support the Financial Plan's Strategy and Program Plan.
-
Actions taken in the current year – such as hiring or position management decisions – must be consistent with budgeted resources and objectives of the next fiscal year, as well as long-term strategic objectives.
-
All nondiscretionary costs must be fully funded before additional funds can be expended on discretionary costs.
-
-
Financial Plan Managers need to work within their resource availability to achieve program plans. The Business Performance Review Process focuses the IRS’s efforts to deliver programs and manage resources. After activity levels are set, funding changes should be an exception in program management. Any needs above the plan should first be resolved within the Financial Plan or attempts made to see if funds are available in other organizations that could be realigned without exceeding Appropriation or BAC limitations. If no resolution can be found, submit a request to CPB with a full justification.
-
CPB monitors Financial Plans on a monthly basis and through a more comprehensive mid-year review. Financial Plan Managers are required to identify any surpluses or out-of-cycle requests to CPB at mid-year. CPB will pull identified surpluses into corporate reserves to support corporate unfunded priorities through year-end.
-
Ensuring optimal and efficient use of IRS resources is a high priority. This IRM reinforces the need to minimize the amount of year-end obligations (i.e., after August 31), while maximizing obligations in support of business priorities. The Business Units participate in several financial reviews throughout the year, as needed, including the following formal reviews to ensure the optional use of resources Servicewide.
-
CPB conducts Labor Reviews using the IFS 3-Year Rolling Forecast. More specifics are included in the current Labor Analysis Guidelines, found on the CPB Budget Policy website. See also the Labor Projections section ( See IRM 1.33.4.3.1.8.1.).
-
CPB prepares a Servicewide Budget Execution Activity Report at regular intervals for senior management, with individual reports for each Financial Plan. Execution reports are used to analyze and report Servicewide spending patterns, realignment of resources, potential surpluses, and early identification of unfunded needs or resource shortfalls. These reports also support quarterly and midyear reviews.
-
After the close of the second quarter, CPB conducts a Midyear / Spend Plan Review with each Business Unit to assess the financial health of the organization, for internal and external stakeholders. This review:
-
Evaluates the status of spending to ensure timely obligation of funds, per CFO and Procurement guidance
-
Identifies potential unfunded needs and surpluses that may be redirected to corporate needs
-
Identifies potential base shortfalls that can be corrected in multiyear planning process
-
Promotes timely posting of reimbursables
-
Provides necessary information for the Treasury Midyear Review, conducted within all Treasury bureaus
-
Finalizes the Spend Plans
-
-
Business Units are required to meet commitment and obligation targets established jointly by the CFO and Procurement.
-
Specific guidance is issued by CPB and is posted on the CPB Budget Policy website at the beginning of the Midyear Review process.
-
The quarterly Aging of Unliquidated Commitments (AUC) and Obligations (AUO) Reviews provide critical analyses of the Spend Plan, facilitate the management of the procurement process, and maximize use of funds ( See IRM 1.33.4.4.4.).
-
The Beckley Finance Center in the CFO's Internal Financial Management (IFM) Unit provides guidance for these reviews it on their website, http://cfo.fin.irs.gov/IntFinMgmt/IFM_Home.htm , under "Administrative Accounting," as part of the"Annual Close Guidelines."
-
Financial Plan Managers have the authority to implement reprogramming only in their assigned Financial Plans, and are accountable for strict adherence to the limitations set forth above in "Legislative Policies " ( See IRM 1.33.4.2.3.).
-
Financial Plan Managers may limit or delegate their reprogramming authority for offices within their Financial Plans. In doing so, the Financial Plan Manager retains responsibility for ensuring that limitations contained in these Operating Guidelines are not violated, and at all times must be able to explain all reprogramming changes made in their Financial Plan. The individuals designated as Financial Plan Managers are identified in Exhibit 1 ( See Exhibit 1.33.4-1.).
-
A Financial Plan Manager may delegate to others outside their Business Unit the authority to make entries to their Financial Plan, as necessary to accomplish realignments between Financial Plans in IFS. All realignments between Financial Plans must be initiated by the sending Financial Plan Manager; see procedures for interplan changes ( See IRM 1.33.4.3.1.7. ).
-
At times, CPB makes entries to other Financial Plans. These occasions will be limited, and CPB will notify the Financial Plan Managers when their involvement is necessary.
-
Financial Plan Managers are required to routinely monitor, reconcile, and correct discrepancies timely in their budget data in all IFS versions. Having an up-to-date and accurate system allows CPB to accurately report on the financial status to the CFO or Commissioner. This also decreases the magnitude of problems at year-end.
-
IFS has four versions of the current year budget:
-
Budget Version 0 (V0) represents the operating budget and sets availability controls. Controls are by Fund, Fund Center (Financial Plan level), Object Class, and Functional Area. For example, IFS will prohibit spending in excess of funds in 0912-AWSS-1A-23. Version V0 must be kept up-to-date, because it establishes the availability controls.
-
Budget Version 1 (V1) represents the operating plan, with detail by Commitment Items and lower level Fund Centers. V1 does not set availability control; in other words, the budget for a Fund Center (Allotment office level) or a Commitment Item could be exceeded. Presence control lines in V1 define valid code combinations for IFS interface systems.
-
Budget Version 10 (V10) represents the enacted budget. This version is populated after the budget is passed, and represents the budget levels allocated for IRS's Appropriations and Budget Activities. Only Congressionally approved budgetary changes or reprogramming requests are entered to V10. V10 is used for reporting purposes and is compared to V0 to identify changes.
-
Budget Version 999 (V999) represents the budget of Full-Time Equivalent (FTE) staffing resources. This FTE budget has detail by Fund, Functional Area, Fund Center, and Activity Type.
-
-
At all times Budget Versions V0 and V1 must be in agreement by Fund, Fund Center (Financial Plan level), Object Class, and Functional Area. To ensure that each version is in agreement and V0 does not go negative, reconciliations must be performed on a regular basis, the frequency of which can vary between Financial Plans. At fiscal year-end, the frequency must be biweekly in August, weekly in early September, and daily after September 14. Failure to do this would result in inaccurate data reporting to external parties.
-
CPB performs a monthly reconciliation process. CPB will notify Financial Plan Managers immediately of any discrepancies found.
-
Because of IFS budget controls, Budget Availability in V0 (Total Budget minus Commitments, Obligations, Expenditures, and Disbursements) cannot be a negative amount. The one exception is that payroll can force availability into a deficit; this happens especially in September in plans with significant reimbursables not yet posted. Because payroll can cause budget deficits in labor categories, Financial Plan Managers must identify and correct any budget deficit in V0, even those less than one dollar. Financial Plan Managers must research their budget deficits every two weeks, and correct them no later than one week after payroll posts. The IFS report ZBUDCOMP is a helpful tool in identifying and resolving these negatives. Further, Financial Plan Managers must do everything possible to post reimbursables timely, throughout the year and especially at year-end (See the Reimbursable Operating Guidelines on the CPB Budget Policy website).
-
Financial Plan Managers must identify and correct any budget deficit in V1 at the same time that versions V0 and V1 are reconciled. While V1 has no impact on funds control, keeping V1 clean is sound business practice, needed both for external reporting and internal analysis. At year-end, it is even more important systemically; all deficits – even those less than one dollar – must be eliminated in IFS before close of business September 30.
-
When establishing new budget authority, CPB pushes budget down through the IFS's "top node" data elements; that is, Commitment Item ALLOBJ and Functional Area ALFA. However, Financial Plan Managers may not post funds to the top node, because charges in ALLOBJ/ALFA create problems for financial reporting, cost allocations, and reprogramming limitation reports. All funds must possess a valid Commitment Item and Functional Area in both versions V0 and V1. Any funds remaining at the ALLOBJ/ALFA level should be pushed down accordingly.
Exception:
Financial Plan Managers may post to the top node only when specifically directed by CPB or when "drowning" FTEs ( See IRM 1.33.4.3.1.9.1. ).
-
Budget Version 999 must be maintained such that FTEs and labor dollars stay in proper relationship at all times ( See IRM 1.33.4.3.1.9.).
-
The validity and accuracy of IRS’s financial reports depends on the correct use of financial codes. Financial Plan Managers, all staff in budget organizations, and all parties responsible for assigning financial codes to documents must be familiar with the codes and definitions in the Financial Codes Handbook, found on the CPB Budget Policy website.
-
Internal Orders are set up to track project-specific information ( See IRM 1.33.4.3.2.5.). When necessary, the CFO will issue guidance or procedures for using specific Internal Orders for Servicewide activities or projects that need to be tracked; such guidance will be posted on the CFO Home website or the CPB Budget Policy website.
-
Procedures for establishing new financial codes, referred to as IFS Master Data, are provided in Exhibit 2 ( See Exhibit 1.33.4-2.).
-
Financial Plan Managers may reprogram funds from labor in order to maintain maximum resource flexibility, consistent with accountability for results.
-
Fiscal accountability demands that Financial Plan Managers balance labor and support in order that FTEs are fully costed and strategic plans are realized. More information is available on managing FTEs ( See IRM 1.33.4.3.1.9.) and on hiring ( See IRM 1.33.4.3.1.10.).
-
A significant portion of IRS's nonlabor budget is made up of Operational Support Contracts and Interagency Agreements. Financial Plan Managers must therefore routinely track and review contract costs. The current Servicewide portfolio of Operational Support Contracts, which are assigned Internal Orders starting with the letter K (that is, "K contracts" ), can be found in Exhibit IO-3 of the Financial Codes Handbook, found on the CPB Budget Policy web-site. Financial Plan Managers should use K contract Internal Orders to track contract costs, and use Funds Reservations to assign planned funds to Operational Support Contracts or Interagency Agreements.
-
All requests for reprogramming within Information Services (IS) BAC 99 must follow the Modernization & Information Technology Services (MITS) Reprogramming Policy, be first coordinated with the appropriate Associate Chief Information Office, and be approved by the program owner or their official designee. The request should then be submitted to the MITS Office of Financial Management Services. The Financial Management Services Budget Execution Staff will review the reprogramming request for compliance with approved Spending Plans and reprogramming policy, and notify the appropriate Financial Plan Managers for processing. The MITS End User Equipment and Services is exempt from this requirement, but must provide a report to the Financial Management Services Budget Execution Office at the end of each month outlining the reprogramming actions in or out of these Functional Areas. Identified surpluses will not be reprogrammed for new requirements outside of the approved Spending Plan, but will be reviewed during the MITS' Quarterly Spend Plan Review process. New requirements also will be addressed during the review process.
-
Financial Plan Managers must adhere to the following budgetary procedures, which provide more detailed guidance for budget execution.
-
CFO Servicewide Procedures are developed and imposed by the CFO, as a result of high-level direction from a number of sources, including OMB, the Commissioner, and others.
-
Even though reprogramming authority is decentralized, Corporate Performance Budgeting continues to have Servicewide fiduciary responsibility.
-
CPB monitors Financial Plan Managers’ budget execution activities to identify potential issues before they become corporate ones. This includes the monthly reconciliation of IFS Budget Versions 0 and 1.
-
CPB reports to the CFO each month on the status of BAC ceilings and floors at the Servicewide level.
-
CPB periodically reviews reprogramming out of labor to verify the impact on current or out-year resource levels. CPB will work with the Financial Plan Managers to ensure reallocations make sound business sense.
-
CPB is responsible for the Centralized Payments Plan 1111, the Undistributed Funds Plan 0290, prior year funds, and IRS Appropriation levels.
-
CPB has primary responsibility for overseeing budget execution policy.
-
Within CPB, the Budget Execution Office assigns analysts to each Business Unit as a primary point of contact for any questions or requests regarding budget execution or the FOG. Communications from CPB to the Financial Plan Managers should go through the CPB Business Unit Analyst.
-
For financial code change requests, the Financial Plan Manager should send their request directly to the CPB’s Master Data Team, with a copy to the CPB Business Unit Analyst. Procedures for Master Data changes are provided in Exhibit 2 ( See Exhibit 1.33.4-2.).
-
For any budget formulation questions or requests, the Financial Plan Manager should go directly to CPB’s Budget Formulation and Systems Integration Office.
-
The House Appropriations Committee directs the IRS to submit an operating plan no later than 60 days after enactment of the new fiscal year's Appropriation.
-
CPB prepares a table that crosswalks the budget request to the enacted level of funding and the current operating plan. The format is similar to the Explanation of Proposed Fiscal Year Budget Operating Level chart in the Congressional Budget Justification.
-
Financial Plan Managers develop narrative to provide program, project, and activity information for each Appropriation. The narrative must: (a) describe the major goals to be achieved with the funding provided and how funds for each BAC are to be used; (b) discuss the impact of Congressional changes to the President’s Budget Request; (c) identify anticipated reprogramming actions of enacted funds; and (d) provide information on major procurements and capital investments.
-
Additionally, the CFO's Corporate Planning and Internal Control Unit develops narrative to describe how changes in funding levels impact the performance target submitted to Congress in the Congressional Budget Justification.
-
CPB compiles and submits the crosswalk table and narratives referenced above.
-
OMB automatically apportions funding levels during a CR. After passage of final Appropriations, CPB prepares and submits revised apportionments to Treasury and OMB for approval.
-
The Business Systems Modernization (BSM) multiyear accounts have limited flexibility. The BSM total funding level is apportioned with a footnote tying it to the latest approved Spend Plan. Deviations from the Spend Plan levels of 10% or $1,000,000, whichever is less, for any project, require 10 days advance notification to OMB, via a revised apportionment and explanation of the change using a rolling 3-year exhibit.
-
Resources for Collection Enforcement activities may be obligated 10 days after OMB receives a plan for their use in account 20-5510/X, which was established for the Private Collection Agent program.
-
For the yearly Appropriations, an amount not to exceed 1% of the total is apportioned to pay legitimate obligations related to cancelled Appropriations.
-
As stated in Appropriation Transfers ( See IRM 1.33.4.2.3.1.), the IRS has limited flexibility to transfer funds between Appropriations, subject to prior Congressional approval. All proposed inter-Appropriation transfers must be justified to and approved by CPB. If approved, CPB will submit the Transfer request for approval to Treasury, OMB, and the Congressional subcommittees. After receiving all approvals, CPB will submit Standard Form (SF) 1151, "Nonexpenditure Transfer of Funds" to Treasury. The Appropriation Transfer process may take months, so we must plan accordingly. Only after the entire process is complete, the appropriate Financial Plan Manager will coordinate the transfer in IFS.
Note:
Appropriation transfers involving IS BAC 99 funds must follow additional instructions ( See IRM 1.33.4.3.3.4. ).
-
The CPB Budget Execution Office controls funds transfers between the IRS and other agencies, documented with the transfer request SF 1151. The SF 1151 must cite the Public Law or other authority that authorizes the transfer. When a Financial Plan Manager needs to send or receive funds from another agency, the Financial Plan Manager must provide the following information via e-mail to the CPB Budget Execution Office:
Transfer (FROM/TO) -
IRS Fund Code
-
Financial Plan & Fund Center
-
Functional Area
-
Commitment Item
-
Internal Order, if appropriate
-
Amount
-
Justification for Request
-
Date Needed
-
Finance Contact Name & Phone Number
-
Authorizing authority (Public Law, U.S. Code, etc.)
-
Authorized by
Transfer (TO/FROM)-
Agency
-
Treasury Account Symbol
-
Accounting Information, as available
-
Agency Contact Name & Phone Number
-
Backup Contact Name & Phone Number
-
-
Some interagency transfers will require an SF 132, "Apportionment or Reapportionment Request," which must be approved by the Treasury Department and OMB before the SF 1151 may be forwarded. All approvals must be granted before funds may be moved in IFS.
-
Realignments between Financial Plans require coordination between the designated Financial Plan Manager representatives in both the receiving and the sending Financial Plans.
-
In IFS, the sending Financial Plan Manager enters realignments using a Transfer Budget document, IFS transaction code FR58. This applies to all affected Budget Versions – V0, V1 and/or V999. The sending Financial Plan Manager must ensure the entry does not exceed BAC reprogramming limitations ( See IRM 1.33.4.2.3.2.).
-
The receiving Financial Plan Manager provides the appropriate Receiver Lines ("TO" lines) to use for the FR58 transaction, via e-mail, including the Fund, Functional Area, Fund Center, and Commitment Item.
-
Within a week of receiving the e-mail, the sender must resolve any issues with the receiver and accurately enter the FR58 transaction into IFS. The sender attaches the receiver’s e-mail to the FR58 transaction as a "Long Text" note, and copies the TO lines directly into the FR58 transaction, providing a detailed audit trail in each budget address.
-
If there are Internal Orders related to the transaction, the sending Financial Plan Manager is responsible for reducing the Funds Reservation on the FROM side before inputting the FR58 transfer. The receiving Financial Plan Manager is responsible for increasing the Funds Reservation on the "TO" side.
Summary of Responsibilities for Realignments between Financial Plans Sending Financial Plan Manager (FPM) Receiving Financial Plan Manager (FPM) Ensures funds are available and coordinates with receiving FPM to ensure reprogramming limitations are not exceeded. Coordinates with the sending FPM to ensure that reprogramming limitations are not exceeded. Enters the FR58 ("FROM" and "TO" sides) into Budget Versions V0 and V1, using the receiver's detailed TO lines. Timely provides accurate "TO" lines for FR58. Enters reduction of Funds Reservations for the "FROM " side, if applicable. Enters Funds Reservations for the "TO" side, if applicable. Enters FR58 transactions for FTEs ("FROM" and "TO" sides) into Budget Version 999, if Salaries are transferred, and ensures new FTE and labor levels in the sending plan are balanced. Provides accurate "FROM" lines for sending FTEs, if Salaries are transferred, and ensures remaining FTEs and labor in the receiving plan are balanced.
-
Financial Plan Managers should first try to resolve funding issues by making realignments within the Financial Plan. Second, they should see if funds are available in other organizations that could be realigned without exceeding Appropriation and/or BAC limitations. Finally, If no resolution can be found, a Financial Plan Manager may submit a request to CPB with a full justification. If approved, CPB will contact the Financial Plan Manager to coordinate the reprogramming in IFS.
-
Submit requests with the following information:
FROM and TO (if applicable) -
Fund Code
-
Financial Plan and Fund Center
-
Functional Area
-
Commitment Item
-
Internal Order, if appropriate
-
Amount
-
Date Needed
-
Finance Contact Name & Phone Number
-
Justification
-
-
Labor costs are the single largest portion of IRS's budget, making up roughly 70% of direct Appropriations. Financial Plan Managers must therefore use labor projections to project and monitor current fiscal year requirements.
-
During budget execution, Financial Plan Managers must monitor their labor costs regularly, using the IFS 3-Year Rolling Forecast. All Financial Plan Managers will input their hiring, attrition, and any other assumptions specific to their Financial Plan, in the module on a regular basis. Additionally, Financial Plan Managers must provide Other Than Full-Time Perm staff plan data to CPB as needed.
-
Formal Labor Reviews are scheduled as part of the Financial Review process ( See IRM 1.33.4.2.4.2.). CPB will use the 3-Year Rolling Forecast data to report on staffing levels and to make labor projections. CPB will perform detailed labor analyses, based on pay periods 26, 06 and 14, to ensure that funds are allocated appropriately.
-
More specifics are included in the current Labor Analysis Guidelines, found on the CPB Budget Policy website.
-
CPB arranges 3-Year Rolling Forecast training throughout the year for the Financial Plans. Additionally, the System Enterprise Management (SEM) Team posts news and resources on their website,. http://cfo.fin.irs.gov/IntFinMgmt/IFS/SEM_TEAM/SemTeamHome.html .
-
Labor costs are generally obligated to Functional Areas based on the Cost Center where the employee is currently assigned organizationally. That Cost Center is based on the Totally Automated Personnel System (TAPS) organizational segment ("org seg" ) code. When employees perform work in a Functional Area or on an Internal Order other than the one where they are currently assigned organizationally, their time should be charged to the Functional Area or Internal Order where the work is performed. However, because adjustments to time charging require significant key entry and are highly susceptible to error, each Financial Plan Manager must choose an approach to time charging that balances timeliness, burden, and accuracy.
-
As the primary approach to time charging, Financial Plan Managers should generally leave time charged to the home Cost Center, as long as the data will be reasonably accurate.
-
Financial Plan Managers should use direct charging (line-by-line accounting) as needed only for a few defined needs especially capturing work on Internal Orders and detail assignments through the Single Entry Time Reporting (SETR) system (see below for more details).
-
Use indirect charging for limited needs, e.g., Counsel’s activities, EITC charging, and determination and outreach work done by Tax Exempt & Government Entities (TE/GE) Revenue Agents. The emphasis should be on the need for reasonably accurate data, making indirect charging of small amounts unnecessary. As with all document entry, ensure proper documentation to justify the entries into IFS. Indirect charging is done in IFS by using transaction code FV50 with document type EV (Expense Voucher, the IFS document type for correcting and transferring expenditures).
-
Gaining and losing organizations are both responsible for using correct accounting codes when there is a delay in the release of employees to a different organization code or when there is a delay in the processing of an SF 52, "Personnel Action Request" for an employee reassigned to a different organization code.
-
A "detail" or detail assignment is defined, for financial purposes, as any assignment to work outside the " home" Cost Center and/or Functional Area, for a specified period of time with a minimum duration of one pay period.
-
All details must be charged to the correct Functional Area through timekeeping, unless an SF 52 is prepared, which automatically points the charges and the on-rolls to the new receiving Cost Center and Functional Area. The correct activity is the Functional Area representing the work being done. If, for some reason, the receiving office is not funding the detail, the employee’s manager must coordinate with the servicing budget office to coordinate charging the employee’s time to their home Cost Center, and must charge it to the correct Functional Area. The overriding principal is that Financial Plan Managers must charge time correctly by Functional Area to avoid statutory violations of Appropriation law.
-
The timekeeping procedures for details call for using either a D or U code in the 13th position of the 18-digit accounting string, both of which correct the charges for FTEs and dollars, but not on-rolls. The D and U codes work the same in IFS.
Note:
Because on-rolls of details do not move with the FTEs and dollars, on-roll-based labor projections, especially 3-Year Rolling Forecast projections, should be adjusted to account for details.
-
Each Business Unit should establish a control point at a high level within the organization (e.g. branch, division or operation) to keep a log of all employees authorized to be on one of these codes and the expected duration. Follow up as necessary to ensure that the code is removed when no longer applicable.
-
FTE allocations are maintained in IFS Budget Version 999 ( See IRM 1.33.4.2.4.4.1.).
-
Financial Plan Managers should ensure FTEs are fully funded with labor and nonlabor resources. In particular, each Financial Plan’s labor funding (specifically, Salary and Benefit Commitment Items 11SP, 11ST and 12LA in IFS version V1) must support the number of FTEs in your Financial Plan (version V999) at all times. When funding transfers are made, FTE adjustments must be made to retain this balance between FTEs and labor.
-
Financial Plan Managers are responsible for their FTE resources (although systemically, they need CPB's help to change the total FTE number in IFS; See IRM 1.33.4.3.1.9.1.). Financial Plan Managers are allowed to "drown" surplus FTEs (that is, reduce FTE allocations) from the Financial Plan, to create additional FTEs, and to convert between Other Than Full-Time Permanent FTEs and Full-Time Permanent FTEs, as needed to maintain balance. These actions are permitted as long as sufficient funds are available to support the FTEs, and they do not adversely impact accomplishment of the Strategy and Program Plan. See also the hiring guidance in the next section.
-
To drown FTEs, the Financial Plan Manager must use an FR58 document to transfer the FTEs to the top node in Version 999 at the AUTH level (i.e., Funds Center IRS and Functional Area ALFA), and then contact the CPB Business Unit Analyst to complete the transaction. CPB will remove FTEs from IFS Version 999 at the higher level (APPR) with an FR50 document.
-
To create new FTEs or restore previously drowned FTEs, the Financial Plan Manager must ask the CPB Business Unit Analyst to add FTEs at the higher level (APPR) with an FR50 document. Then the Financial Plan Manager may move the FTEs with an FR58 from APPR to AUTH level.
-
Systemically, FTEs cannot be transferred in IFS between Appropriations. Rather, each Appropriation is treated individually with an increase or decrease. The Financial Plan Manager may contact CPB to request the increase and related decrease.
-
Budgetary guidance is warranted for certain personnel issues.
-
IRS’s hardship reassignment guidelines are delineated in Article 15 of the National Agreement between the IRS and National Treasury Employees Union. A basic tenet of the IRS’s hardship transfer policy is that there is work to be performed, now and in the future, in the geographic area to which an employee has requested a hardship transfer. There will be no transfer of funds or FTEs to support approved hardship transfers. The National Agreement is found on the Labor & Employee Relations website, http://hco.web.irs.gov/lrer/index.html , under "National Agreement."
-
Financial Plan Managers can process internal and external hiring actions as long as they have adequate labor resources and FTEs in the current fiscal year, and hiring will not impact their budget for the following year as defined by the President’s Budget (excluding initiatives).
-
Hiring plans are reported in Staffing Level reports ( See IRM 1.33.4.3.1.11.).
-
The Referral Bonus Program, implemented at the individual Campuses (with the exception of Fresno), assists the seasonal recruitment program. Bonuses paid to current employees for referring others for seasonal employment to campuses should be paid by the referring employee’s Financial Plan (home Cost Center and Functional Area) regardless where the person being hired is placed within the organization.
Example:
A Small Business/Self Employed (SB/SE) employee recommends to a friend that he or she apply for a position within the IRS. The friend applies, is hired, is placed in Wage & Investment (W&I), and works long enough to reach the time limit/criteria for a referral bonus to be paid. The referral bonus is paid to the referring employee by SB/SE, not charged to the benefiting Financial Plan which is W&I.
-
The Human Capital Office (HCO) Personnel Policy Division, Compensation Branch, is responsible for developing policy for the Referral Bonus Program.
-
Financial Plan Managers are responsible for developing staffing plans to achieve the goals in the budget. Financial Plan Managers update 3-Year Rolling Forecast with Full-Time Perm hiring plans and attrition projections by pay period and employment category. Additionally, Financial Plan Managers prepare Other than Full-Time Perm hiring and attrition reports for CPB. Using this information, CPB's Budget Execution Office prepares monthly Staffing Level Reports for Financial Plan Manager review and IRS senior leadership information.
Note:
The Staffing Level Reports replaced the Resource Tracking Analyses, which were completed for certain Business Units' enforcement staffing.
-
This section provides financial guidance regarding Cash Award funding allocations. See also the National Agreement, Article 18, found on the Labor & Employee Relations website.
-
The Financial Plans include allocations for cash awards, which are based on prior year allocations plus adjustments for Maintaining Current Levels (MCL). The Financial Plan Managers are responsible for making any necessary adjustments to the funding levels, to ensure sufficient funding for both established Bargaining Unit award targets and Non-Bargaining Unit awards.
-
Funding for Senior Executive Service (SES) Awards and Presidential Rank Awards are held corporately until payouts are determined and then distributed to the Financial Plan Managers. Amounts for Suggestion Awards are funded in and paid from HCO allocations.
-
CPB will establish the targets for paying Bargaining Unit cash awards, consistent with Article 18 of the National Agreement, at 1.6% of the total annual bargaining unit salary. The "total annual bargaining unit salary" equals the prior fiscal year actual salary utilization (i.e., the basic salary amounts including locality pay, based on 26 pay periods for the prior year) for Bargaining Unit employees not covered by incentive pay or gainsharing, adjusted for subsequent civilian pay raise adjustments.
-
The bargaining unit cash award targets will be allocated first to Bilingual Awards. After this allocation, the remaining target will be distributed as follows: 90% to performance awards and 10% to discretionary awards.
-
Financial Plan Managers will ensure bargaining unit cash awards paid are no less than the established target amount for their business unit. If there are any major transfers of salaries between Financial Plan Managers, adjustments to the targets may be made with the concurrence of CPB and HCO.
-
For Non-Bargaining Unit employees, the cash awards are based on specified percentages of current year projected salaries (including locality pay) of employees who are included in the respective pools. The current salary percentages are as follows:
-
Pay Banded Managers, 2.1% (90% to performance, 10% to discretionary)
-
Management Officials, 1.6% (90% to performance, 10% to discretionary)
-
Non-Bargaining Unit Other, 1.6% (90% to performance, 10% to discretionary)
Note:
Financial Plan Managers have the discretion to adjust the percentages between performance and discretionary awards within each of the above categories.
-
-
Except as discussed in paragraphs 2 and 3 below, the organization initiating an employee award is responsible for covering the cost of the award. This pertains both to discretionary and performance awards. This includes employees from another organization on temporary assignment or working a special project. The initiating organization should identify awards recommended for employees who are not permanently assigned to their organization and coordinate with their budget contact. The budget contact is responsible for assigning the correct accounting codes.
-
Bargaining Unit employees' performance award pool and awards calculations are based on the employee's permanent position of record and organizational assignment, as recorded in the Treasury Integrated Management Information System (TIMIS), on the last day of the pay period which ends on or before June 30, with the following exception.
Exception:
A Bargaining Unit employee on a temporary promotion in a Non-Bargaining Unit position, on the last day of the pay period which ends on or before June 30, will be based on the employee's permanent organizational assignment, position, and grade.
-
When a large reorganization between Business Units takes place between the June record date and the September award payout date, the impacted Financial Plan Managers must coordinate to ensure award funds stay with the award obligations; alternatively, they may agree to transfer award funds to the new organization, as long as they coordinate moving the commensurate award obligations.
-
Questions frequently come up about funding for cash awards (including performance awards, special act awards, and other awards) because of the timing of when they are made.
-
Cash Awards are chargeable to the "Appropriations current at the time the award is made," per GAO Principles of Federal Appropriation Law (Volume II, Chapter 7, Section B.7.a; see http://www.gao.gov/legal.htm ). For example, corrections or adjustments to cash awards made in fiscal year (FY) 2007 are chargeable to FY 2007. On the other hand, if for some reason an award is delayed, such that managerial approval is not completed until after September 30 (the next fiscal year), the award is considered to be made and chargeable in the new fiscal year.
-
In general, awards are regarded as having been made when there is an administrative determination to make them, as evidenced by the effective date on the SF 50, "Notification of Personnel Action" for the award (the effective date is not the same as the payment date).
-
Corrections and Adjustments: Corrections of clerical errors are properly chargeable to the fiscal year in which the award was originally made.
-
Claims and Settlements: According to GAO (Volume III, Chapter 12, Section B.4.a(1)), "Claims by federal employees for compensation and related allowances are chargeable to Appropriations for the fiscal year in which the work was performed." Which fiscal year to charge for claim resolution depends on the underlying basis of the dispute and the specific circumstances of the case. General Legal Services is able to provide advice with regard to settlements on a case by case basis.