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  • 1. 6509.19_zero_code Page 1 of 13 FOREST SERVICE HANDBOOK NATIONAL HEADQUARTERS (WO) WASHINGTON, DC FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE Amendment No.: 6509.19-2004-2 Effective Date: October 1, 2004 Duration: This amendment is effective until superseded or removed. Approved: JESSE L. KING Date Approved: 09/29/2004 Associate Deputy Chief/CFO Posting Instructions: Amendments are numbered consecutively by Handbook number and calendar year. Post by document; remove the entire document and replace it with this amendment. Retain this transmittal as the first page(s) of this document. The last amendment to this Handbook was 6509.19-2004-1 to 6509.19_contents. New Document 6509.19_zero_code 13 Pages Superseded Document(s) by Issuance Number and Effective Date Digest: Zero Code - Establishes direction on accounting authorities applicable to Forest Service Federally-owned and leased property, plant, and equipment (PP&E).
  • 2. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 2 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE Table of Contents 01 - AUTHORITY...............................................................................................................3 01.1 - Regulations........................................................................................................................3 01.2 - Federal Accounting Standards Advisory Board (FASAB) Guidelines.............................3 01.3 - Office of Management and Budget Circulars....................................................................4 01.4 - Other Activities.................................................................................................................4 02 - OBJECTIVES.............................................................................................................4 03 - POLICY......................................................................................................................4 04 - RESPONSIBILITY......................................................................................................5 04.1 - The Deputy Chief for Business Operations ......................................................................5 04.2 - Associate Deputy Chief for Budget and Finance .............................................................5 04.3 - Director of Acquisition Management ...............................................................................5 04.4 - Director of Information Resources Management..............................................................6 04.5 - Regional Foresters, Station Directors, Area Director, International Institute of Tropical Forestry Director, Forest Supervisors, Forest Products Lab Director, and Job Corps Conservations Center Directors ......................................................................................6 04.6 - Accountable Property Officers (APO) .............................................................................7 04.8 - Resource Staff ..................................................................................................................8 05 - DEFINITIONS.............................................................................................................8 06 - FOREST SERVICE ACCOUNTING SYSTEMS......................................................12 06.1 - Foundation Financial Information System (FFIS) .........................................................12 06.2 - Purchase Order System (PRCH).....................................................................................12 06.3 - Equipment Management Information System (EMIS)....................................................13 06.4 - Purchase Order Normal Tracking & Inventory Utilization System (PONTIUS)............13 06.5 - Corporate Property Automated Information System (CPAIS)........................................13 06.6 - Personal Property System (PROP)..................................................................................13
  • 3. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 3 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE This handbook contains accounting authorities applicable to Federally-owned and leased Forest Service property, plant, and equipment (PP&E). 01 - AUTHORITY Policies contained in this chapter are issued pursuant to the requirements of the Federal Accounting Standards Advisory Board (FASAB) and contained in “Statements of Federal Financial Accounting Standards (SFFAS) and located on the world wide internet at www.fasab.gov. 01.1 - Regulations 1. Federal Acquisition Regulation (FAR), Title 48, Code of Federal Regulations, Parts 1 through 53 (FSH 6390.32). This regulation prescribes policies and procedures for use by all Federal Executive agencies in the acquistion of supplies and services with appropriated funds. 2. Federal Management Regulations, Title 41, Code of Federal Regulations, chapter 101-45. These regulations provide guidance on the sale, abandonment, or destruction of personal property. 01.2 - Federal Accounting Standards Advisory Board (FASAB) Guidelines 1. Statement of Federal Financial Accounting Standards, (SFFAS) No. 5, Accounting for Liabilities of the Federal Government. This standard applies to general purpose financial reports of U.S. Government reporting entities. 2. SFFAS No. 6 Accounting for Property, Plant, and Equipment. This document contains accounting standards for federally owned property, plant, and equipment. 3. SFFAS No. 10 Accounting for Internal Use Software. This document provides recommended accounting standards for internal use software. 4. SFFAS No. 11 Amendments to Accounting for Property, Plant, and Equipment. Amendments to accounting for PP&E definitions (amends SFFASs 6 and 10). This statement clarifies definition for National Defense and Space Exploration assets and is not applicable for USDA. 5. SSFAS No. 16 Amendments to Accounting for Property, Plant, and Equipment. Amendments to Accounting for PP&E, multi-use heritage assets (amends SFFAS 6 and 8).
  • 4. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 4 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 01.3 - Office of Management and Budget Circulars 1. Office of Management and Budget (OMB) Circulars A-11. Preparation, Submission, and Execution of the Budget, Appendix B - Scoring Lease-Purchases and Leases of Capital Assets. 2. OMB Circular A-94. Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs Appendix C- Discount Rates for Cost-Effectiveness, Lease Purchase, and Related Analyses. Provides guidelines for discount rates for benefit cost analysis of federal programs. 01.4 - Other Activities 1. Federal Accounting Standards Technical Bulletin (FASB) No. 79-10. This bulletin indicates what disclosures a federal financial reporting entity should make pursuant to paragragraph 79(g), SFFAS 7, when the entity issues financial statements for a given fiscal year before the budget of the U.S. government with actual budget number for the same fiscal year is published. 2. Joint Financial Management Improvement Program (JFMIP) of 1986. “Property Management System Requirement.” Provides financial core competencies and system requirements developed by a joint undertaking of the U.S. Treasury, General Accounting Office (GAO), the Office of Management and Budget (OMB), and the Office of Personnel Management (OPM) working together with other agencies to improve financial management practices in government. 02 - OBJECTIVES The objectives are to: 1. Ensure that PP&E items are acquired and used in a way that is most beneficial to the Forest Service. 2. Provide uniform policy, guidelines, and procedures on the acquisition, care, use, maintenance, storage, control, protection, recordkeeping, and disposal of PP&E. 03 - POLICY It is Forest Service policy to: 1. Maintain quality Financial Management practices at all levels of the organization in the preparation and execution of sound financial plans.
  • 5. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 5 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 2. Maintain financial control over all resources during their lifecycle and render accurate and timely accounting reports. 3. Use the Forest Service core accounting system, Foundation Financial Information System (FFIS), to meet budget fund control, financial accountability, and reporting needs. 04 - RESPONSIBILITY 04.1 - The Deputy Chief for Business Operations The Forest Service Deputy Chief for Business Operations is responsible for ensuring that a program is established to manage the PP&E assigned to Forest Service and that the agency adheres to the government authorities and regulations that govern the management of PP&E owned, leased, by the government. 04.2 - Associate Deputy Chief for Budget and Finance The Associate Deputy Chief for Budget and Finance is responsible for: 1. Establishing financial control over Forest Service-owned property and related accounting for such property; 2. Making the decision whether or not an asset is capitalized by coordinating with AQM, Engineering, Recreation, or other staffs to ensure acquisition actions are correctly identified as capitalized or expensed; 3. Ensuring that funding of asset procurement is appropriate and available before the asset is ordered or constructed; 4. Ensuring that the job code(s) on the request is appropriate for the project (s) including appropriate designation for capitalized assets. 5. Approving modifications to contracts and ensuring the funding is available; and 6. Obligating the funding in the property job codes, as applicable, for contracts. 04.3 - Director of Acquisition Management The Director of Acquisition Management is responsible for: 1. All procurement actions, grants and agreements, and property acquisition, management, control, and disposal; 2. Issuing directions on conducting periodic physical inventories for real and personal accountable property;
  • 6. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 6 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 3. Entering all necessary personal property acquisition data into approved agency personal property system(s) and providing real property acquisition data to the real property accountant to facilitate the accurate financial management reporting in the agency financial system; 4. Providing all property-related acquisition documentation to the Property Management Officer (PMO) or property accountant to facilitate a complete property file for capitalized assets; and 5. Ensuring procurement documents are prepared using the correct Budget Object Class Code (BOC), particularly when BOC determines capitalized status. 04.4 - Director of Information Resources Management The Director of Information Resources Management (IRM) is responsible for the planning, acquisition, maintenance, and disposal of information technology hardware and software. 04.5 - Regional Foresters, Station Directors, Area Director, International Institute of Tropical Forestry Director, Forest Supervisors, Forest Products Lab Director, and Job Corps Conservations Center Directors Regional Foresters, Station Directors, Area Director, International Institute of Tropical Forestry Director, Forest Supervisors, Forest Products Lab Director, and Job Corps Conservations Center Directors are responsible for: 1. Management, acquisition, record keeping, accounting control, inventory, protection (safe keeping), utilization, and disposal of property assets entrusted to the units they control. 2. Ensuring that adequate resources are available to accomplish the tasks identified in AGPMR 104-50.104, as well as designating Property Management Officers and Accountable Property Officers to help them redeem this responsibility.
  • 7. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 7 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 04.6 - Accountable Property Officers (APO) Forest Service manager have personal accountability for the stewardship and protection of specific property assigned to them. Only District Rangers, Forest Supervisors, Deputies, and primary staff officers, Job Corps Center Directors and primary staff officers, Regional Office Staff Directors and Assistant Directors, Regional Foresters and Deputies, Station/Area Directors and Assistant Directors, Project Leaders and Program Managers, Washington Office Staff Directors and Branch Chiefs, Associate and Deputy Chiefs, and the Chief, may be designated as Accountable Property Officers (APO). The Accountable Property Officers staff is responsible for: 1. Ensuring that all property regulations and procedures are followed and that all employees have the necessary resources to adequately secure property for which they have responsibility. 2. Ensuring that periodic physical inventories are taken as required and ensure that property records are appropriately reconciled and corrected. 3. Assigning specific property items to the custody of an employee (Property Custodian) for use, control, and accountability of the property. 4. Using and protecting Government property assigned. The APO may be held financially liable in cases of gross negligence. Property Management Officers (PMO) are managerial staff positions to the Line Officers. The PMO is responsible for: 1. Administering real and personal property management programs for the effective acquisition, utilization, accountability, control, and disposition of property in accordance with existing laws, regulations and policies. 2. Managing owned and leased personal property, property acquired from excess in lieu of procurement, property capitalized to the Working Capital Fund (WCF), property on loan to State Foresters, and owned and leased real property (except NFS lands). 3. Planning, managing, and reporting on real and personal property physical inventories.
  • 8. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 8 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 04.8 - Resource Staff Engineering, Recreation, and other resource staffs are responsible for: 1. Real property assets in the individual modules within Infra. Infra is the Forest Service integrated asset management database application, which includes inventories of all data elements for the management and control of real property. The Corporate Property Automated Information System (CPAIS) is the Department real property management system that interfaces with FFIS. CPAIS contains the real property subsidiary ledger and updates data based on changes indicated on physical inventory reports. 2. Designing the work and writing the contract package on a project. 3. Real Property Management (RPM): The CPAIS Real Property Management module designed to support FRPP and Capital Investment requirements. This provides consistent data to enable an accurate inventory of the Department’s real property assets and supports the full life cycle of Real Property Management. 4. Real Property Accounting (RPA): The CPAIS Real Property Accounting module provides the functionality to establish projects and their associated accounting. This includes the tracking of work-in progress (WIP), capitalization, and depreciation of real property assets. 05 - DEFINITIONS Accountable Property. Accountable property includes: a. Owned or leased property having an acquisition cost of $25,000 or greater (capitalized). b. Owned personal property having an acquisition cost of $5,000 to $24,999 (accountable; non-capitalized). c. All personal property under a capital lease. d. Internal Use Software (software developed by Forest Service) having an acquisition cost of $100,000 or greater. e. Any personal property item valued at less than $5,000 but determined by an Agency Property Management Officer (PMO) to be sensitive (AGPMR 104-50.001-10 as amended by Interim Directive No: 6409.31-2004-2 with an expiration date of September 30, 2005).
  • 9. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 9 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE Appraised Value. See definition of fair market value. Asset. Any item of economic value that is owned and is physical in nature (tangible) or has a right to ownership (intangible) that is expressed in terms of cost or some other value. An asset has three essential characteristics: a. The asset should embody a probable future benefit that involves a capacity (single or in a combination with other assets), which contribute to future operations of the Forest Service; b. The entity can obtain the benefit from it and control access to it; and c. The transaction or other events which give the agency the right to, or control of, the asset which has been delivered and accepted. Book Value. Asset's capitalized value less accumulated depreciation. Capital Lease. A lease with a nonfederal entity that meets one or more of the following criteria at lease inception should be classified as a capital lease by the lessee. Otherwise, it should be classified as an operating lease. a. There is a transfer of ownership of the property to the lessee by the end of the lease term. b. The lease contains an option to purchase the leased property at a bargain price. c. The lease term is equal to or greater than 75 percent of estimated economic life of the leased property. d. The present value of rental and other minimum lease payments (excluding that portion of the payments representing executor costs) equals or exceeds 90 percent of the fair value of the leased property. The criteria in preceding paragraphs “c” and “d” are not applicable when the beginning of the lease term falls within the last 25 percent of the original estimated economic life of the leased property. Capitalization. The act of recording an asset that meets the capitalization criteria in property management and general ledger systems so that its costs can be tracked, subsequently depreciated over the life of the asset, and reflected on Forest Service financial reports. Capitalization Threshold. A set dollar amount used to determine whether or not to capitalize an asset, or an improvement to an existing asset. Costs that meet or exceed the threshold amount and meet one or more of the capitalization criteria must be capitalized.
  • 10. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 10 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE Consumer Price Index. A cost index published by the Bureau of Labor Statistics that is used to adjust costs for inflation. Cost. The financial measurement of resources used within a given time frame in accomplishing a specified purpose, such as performing a service, carrying out an activity, acquiring or constructing an asset, or completing a unit of work or a specific project. Depreciation. The act of recognizing the cost/value of a constructed feature as an operating expense over its useful life by spreading the cost over the estimated useful life of the given asset. Depreciation Start Date. The date an asset, an improvement, or reconstruction is completed and depreciation of the capitalized cost begins. The depreciation start date for (1) personal property (PROP) is the acquisition date; (2) working capital fund property (EMIS) is the in-service date; and (3) real property (CPAIS) is June 30 of the in-service year. Documentation. The source information used to support the recorded cost of capitalized property based on actual or other documented cost. Documents reflect the source information gathered and retained to support the cost of capitalized property recorded in the agency property systems (PROP, EMIS, and Corporate Property Automated Information System (CPAIS). Donations. Non-reciprocal transfers of assets (or portions of assets) or services from State or local governments, individuals, or others not considered part of the Federal Government. These assets are separate from those for which the Forest Service has outlayed funds, or has foregone revenue. The capitalization threshold should be applied when recognizing these assets. See USDA Departmental Regulation 5200-3, April 8, 2003, for acceptance, disposition, and accounting for funds. For gifts of voluntary services see DR4230-1, Voluntary Programs. See also Agricultural Property Management Regulations (AGPMR-104.43.307-5 Unconditional Gifts and AGPRM-104-43.307-50 Conditional Gifts). Expenses. Outflows or use of assets, including cash, the incurrence of liabilities, or a combination of both during a period resulting from delivering or producing goods, rendering services, or carrying out other activities of Forest Service operations. Except for those costs which are capitalized as real or personal property, costs become operating expenses in the year actually incurred. The expense for the use of capitalized assets is the annual depreciation amount for the asset. Fair Market Value. The value for which an asset could be bought or sold in an arm’s- length transaction between a willing buyer and seller. In-Service-Date. The date an asset was accepted after completion of construction, purchase, donation, or transfer and put into service.
  • 11. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 11 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE Lease. A contract through which an owner of an asset (the lesser) conveys the right to use its asset to another party (the lessee) for a specified period of time (the lease term) for specified periodic payments. Lease Renewal Option. A continuation of a lease agreement beyond the original lease term, including a new lease that may be executed at the option of the lessee where the lessee continues to use the same property. A lease may contain more than one option, with each option specifying the length of the term extension. Lease Cancellation Clause. Also known as the fiscal funding clause, a clause contained in a lease agreement that permits the cancellation of the lease by a governmental unit if the necessary governmental appropriations are not made for the lease. Net Book Value. The net amount at which an asset or a liability is carried on the books of account. Net book value is the acquisition cost of the asset less the accumulated depreciation. Operating Lease. An agreement conveying the right to use property for a limited time in exchange for periodic rental payments. The Federal entity does not assume risk of ownership for the asset. Physical Inventory. The act of documenting, the existing condition of a physical feature and identifying any changes since its creation or a prior physical inventory. Present Value. The discounted value of a payment or stream of payments to be received in the future, taking into consideration a specific interest or discount rate. Present Value represents a series of future cash flows expressed in today’s dollars. Property, Plant, and Equipment (PP&E). Tangible assets, including land, that (1) have an estimated useful life of 2 or more years, (2) are not intended for sale in the ordinary course of business, and (3) are intended to be used or available for use by the entity. PP&E is classified in the following categories: a. General Property, Plant, and Equipment (GPP&E). General Property, Plant, and Equipment (GPP&E) is defined by the Federal Accounting Standards Advisory Board (FASAB) as any property, plant, and equipment used in providing goods or services. b. Heritage Assets. Heritage assets are property, plant, and equipment that have: (1) historical or natural significance; (2) cultural, educational or artistic (aesthetic) importance; or (3) significant architectural characteristics. Heritage assets are not capitalized unless they are used in the day-to-day operations of the Forest Service. Such dual purpose assets are often called “multi-use assets.”
  • 12. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 12 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE c. GPP&E Land. GPP&E Land is defined as land and land rights acquired with the intent to construct GPP&E and land acquired in combination with GPP&E, including not only land used as the foundation, but also adjacent land considered to be the GPP&E's common grounds, such as an administrative site, recreation site, or other site. Residual Value. The estimated value of an asset at the end of its useful life. For Forest Service owned property this value is considered zero. For leases it is the book value that the lessor depreciated a piece of equipment down to during the lease term, typically based on an estimate of the future values, less a safety margin. Salvage Value. Salvage value is the expected sale price of an asset at the end of its usefulness to the agency. For Forest Service owned property this value is zero. Standard General Ledger. The United States Standard General Ledger (USSGL) is a standard chart-of-accounts used by all Federal agencies. Each account in the USSGL has a four digit number, is consistently defined, and used to track assets, liabilities, Federal Government equity, budget, revenues, expenses, gains or losses, or other statistical information. The USSGL was adopted in order to provide consistent reports and to enhance financial control federal government-wide. Useful Life. The estimated period (2 years or more) during which an asset provides benefit. 06 - FOREST SERVICE ACCOUNTING SYSTEMS 06.1 - Foundation Financial Information System (FFIS) Foundation Financial Information System (FFIS) is the Forest Service primary accounting system and is the source for the agency’s financial statements. FFIS on-line procedures are available at the following website address: http://fsweb.wo.fs.fed.us/cfo/ffis/online_procedures/default.htm. 06.2 - Purchase Order System (PRCH) The Purchase Order System (PRCH) processes obligations, accruals, and vendor payments for all transactions submitted with Form AD-838, Purchase Order. PRCH produces disbursement, accounting, and reporting records.
  • 13. WO AMENDMENT 6509.19-2004-2 6509.19_zero_code EFFECTIVE DATE: 10/01/2004 Page 13 of 13 DURATION: This amendment is effective until superseded or removed. FSH 6509.19 - ASSET FINANCIAL MANAGEMENT HANDBOOK CHAPTER - ZERO CODE 06.3 - Equipment Management Information System (EMIS) The Equipment Management Information System (EMIS) provides for control of motor vehicles, aircraft, boats, computer equipment, and nursery stock included in the Working Capital Fund. EMIS monitors and maintains control of equipment inventories, replacements, acquisitions, and equipment management reports reflecting depreciation and usage costs, maintenance activity costs and performance estimates, and aging analysis projections. 06.4 - Purchase Order Normal Tracking & Inventory Utilization System (PONTIUS) The Purchase Order Normal Tracking Inventory Utilization System (PONTIUS) is the procurement system, which feeds PRCH. Property is receipted through PONTIUS, FFIS pays the obligation and support Infra, PROP, and EMIS. PROP creates a 304 report and EMIS creates an EMIS-32 report notifying that a property master record must be created in the respective system. 06.5 - Corporate Property Automated Information System (CPAIS) Corporate Property Automated Information System (CPAIS) is an integrated central database application designed to support real property management and accounting for USDA agencies. CPAIS replaces the Forest Service Infra Central. The Infrastructure System will continue to house real property management data for purposes that are unique to Forest Service. 06.6 - Personal Property System (PROP) General Fund personal Property costs are recorded in PROP. Proper coding of budget object codes is key to the accuracy of recording personal property. PROP provides on-line electronic access for control of acquisition and disposition of accountable, capitalized, lease, loaned, and sensitive personal property.