9. Managing Letter of Credit Processes

Management System: Budget and Financial Management

Procedure 9. Managing Letter of Credit Processes

Subject Matter Expert:	BRUCE FITCH
Management System Owner:	JUDY PENRY
Secondary Management System Owner:	MARY SUNDERLAND

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Issue Date: 07/09/2012
SCMS Revision: 3.5

1.0 Applicability

This information applies to the U.S. Department of Energy (DOE) Office of Science (SC) Integrated Support Center (ISC) Chief Financial Officer (CFO), Contracting Officers (COs), and Procurement Staff who have oversight responsibility for the Letter of Credit (LOC) Banking Agreements.

2.0 Required Procedure

Step 1	The Integrated Contractor Procurement Official prepares a solicitation package and submits it to the CO for review and comment.
Step 2	The SC ISC CFO Staff and CO: Review the solicitation and draft Banking Agreement to assure the requirements of the Accounting Handbook are met. Provide comments and recommend changes to the Integrated Contractor Procurement Official.
Step 3	The contractor: Issues the DOE approved solicitation package to obtain bids from eligible institutions and competitively selects a financial institution to provide banking services to the contractor. Provides a copy of the banking agreement to the SC ISC CFO office and the CO upon award of banking services.
Step 4	The SC ISC CFO Staff: Establish a new Automated Standard Application for Payments (ASAP) authorization in Department of Treasury's ASAP system. Review the Federal Reserve “Collateral Monitoring Recap Report” monthly for each LOC to assure collateralized amount is zero. Any non-zero amounts are researched and resolved.

3.0 References

DEAR 970.32, Contract Financing
DOE Accounting Handbook, Chapter 6, "Cash," including Attachment 6-4, "Solicitation for Financial Institution Services," and Attachment 6-5, "Sample Solicitation Letter"
I TFM 6, Treasury Financial Manual

This is not the online OFFICIAL SCMS COPY of this file. Before using this printed copy, verify that it is the most current version by checking the Last Major Revision and Last Minor Revision dates (at the bottom of each document) on the SCMS Web site.

This is the online OFFICIAL SCMS COPY of this file. Before using a printed copy, verify that it is the most current version by checking the Last Major Revision and Last Minor Revision dates (at the bottom of each document) on the SCMS Web site.

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