Office of the Chief Financial Officer United States

Office of the Chief Financial Officer United States Department of Agriculture 2005 FINANCIAL MANAGEMENT TRAINING MAX and FACTS II Presented by Paula Geiger, Office of Budget and Program Analysis

MAX and FACTS II Why Discuss Them? n FACTS II data is used to populate the MAX budget system for the past year that has just ended n What is MAX? u Budget data entry system used by Federal departments and agencies to populate the huge Office of Management and Budget database OMB uses the MAX database entries to create the President’s annual budget submission to Congress l Congress reviews the President’s annual budget submission and responds with the annual appropriations acts l Congressional Budget Office uses the budget submission to assist with scorekeeping and review of programs, policies and funding l This material is made available to the public via the web and in large printed volumes l Office of the Chief Financial Officer 1

MAX Schedules n MAX data is split up into sections of data called “schedules” n Different types of accounts, such as credit financing, receipt, or salaries and expenses, require different schedules n A typical salaries and expenses account will have: u Schedule A – Policy: budget authority, outlays and limitations based u u u on the President’s budget policy Schedule S – the Baseline: budget authority, limitations and outlays for the current fiscal year and out-years assuming no change in current year policy Schedule O – Obligations data by object class code Schedule Q – Information on staffing Schedule T – appropriations request in thousands of dollars Schedule P – Program and Financing, which provides a snapshot of obligations by program activity, summary of budget authority and outlays, obligated and unobligated balances Schedule X – new for USDA in 2007, combines A and S Office of the Chief Financial Officer 2

Relationship of MAX data to FACTS II We are concerned with the Program and Financing (P&F) MAX Schedule P l OMB automatically reads data into Schedule P from the FACTS II into MAX for the Past Year that has just ended l Certain MAX data items must match the FACTS II data Office of the Chief Financial Officer 3

MAX Schedule P n For 2006 budget, FACTS II Lines that were read into the MAX Schedule P, Program and Financing Schedule u P 1000 Total new obligations u P 2140 Unobligated balance carried forward, start of year u P 2210 Resources available from recoveries of prior year obligations u P 2398 Unobligated balance expiring or withdrawn u P 2440 Unobligated balance carried forward, end of year u P 4000 Discretionary appropriation Office of the Chief Financial Officer 4

MAX Schedule P u P 6800 Discretionary spending authority from offsetting u u collections (cash) P 7240 Obligated balance, start of year P 7340 Adjustments in expired accounts P 7440 Obligated balance, end of year P 8800 Offsetting collections from Federal sources Office of the Chief Financial Officer 5

Experience with 2006 Budget n FY 2006 Budget Experience, Problems Identified: u MAX errors existed due to agencies use of earlier submissions of FACTS II data to input MAX data FACTS II was open for edits during an EDIT WINDOW l During this time, there were several versions of earlier submissions of FACTS II, which might not match the earlier SF-133 l u MAX errors due to incorrect attribute of Mandatory or Discretionary funds in FACTS II Discretionary funds are generally controlled by an appropriations act l Mandatory funds are generally funded through authorizing legislation that provides authority to spend funds without an appropriations act l Office of the Chief Financial Officer 6

Experience with 2006 Budget u MAX errors due to Internal Apportionments coded in FACTS II as Transfers (SF-1151 s) u Errors due to inaccurate amounts, accounts charged, or duplicate obligations charged in different fiscal years u Reimbursable agreements shown with inaccurate attributes: Federal v. non-Federal, and exempt Office of the Chief Financial Officer 7

Sample FACTS II 12/16/04 OFFICE OF MANAGEMENT AND BUDGET PAGE 540 17: 46: 22 FY 2004 4 th Quarter FACTS II Information -- How It Would (MAX-F 2 PFRP 6) Crosswalk to the Prior Year (PY) Column of the P&F Schedule Budget Agency: Department of Agriculture Budget Bureau: Departmental Administration Budget Account: Departmental administration Budget Account Id: 005 -05 -0120 Treasury Account Id: 12 - - /00 -0120 -000 -0 FACTS II User: XXXXX Line SGL Dr Begn Athy PLaw Avl Part- Bor BEA Yr Xfer Adv TAFS Xfr Def Exp Fnd Fin Num Acct Cr /End Type No. Time ner Src Cat BA Agy Acct Flg Fct Stat T/F Flg Typ Acct PY Amount Line Number Totals entered into P&F for Budget Account Id: 005 -05 -0120 1000 Total new obligations 2398 Unobligated balance expiring or withdrawn 4000 Appropriation 4035 Appropriation permanently reduced 6800 Offsetting collections (cash) 6810 Change in uncollected customer payments from Feder 7240 Obligated balance, start of year 7320 Total outlays (gross) 7340 Adjustments in expired accounts (net) 7410 Change in uncollected customer payments from Feder 7440 Obligated balance, end of year 8690 Outlays from new discretionary authority 8693 Outlays from discretionary balances 8800 Federal sources 8840 Non-Federal sources 8896 Portion of offsetting collections (cash) credited 9000 Outlays Office of the Chief Financial Officer 37, 342, 375. 90 -180, 007. 84 23, 031, 000. 00 -135, 883. 00 2, 807, 942. 85 11, 819, 323. 89 -4, 968, 442. 83 -39, 662, 440. 67 -1, 295, 983. 74 7, 231, 473. 24 -13, 172, 341. 99 31, 191, 583. 22 8, 470, 857. 45 -8, 951, 648. 97 0. 00 6, 143, 706. 12 30, 710, 791. 70 8

Sample MAX Schedule P * Departmental administration * PB 2006 MASTER 2005 -01 -1517 ******* 2004 Act 2005 CY 2006 BY Program and Financing (P) Obligations by program activity 0008 Direct program 23 22 23 0901 Reimbursable program 14 22 17 1000 Total new obligations 37 44 40 -37 -44 -40 Budgetary resources available for obligation 2200 New budget authority (gross) 2395 Total new obligations Office of the Chief Financial Officer 9

Sample MAX Schedule P New budget authority (gross), detail 4000 Discretionary 2004 Act 2005 CY 2006 BY Appropriation 23 22 23 3 22 17 Spending authority from offsetting collections Discretionary 6800 Offsetting collections (cash) 6810 Change in uncollected customer payments from Federal sources (unexpired) 11 0 0 6890 Spending authority from offsetting collections (total discretionary) 14 22 17 7000 Total new budget authority (gross) 37 44 40 Office of the Chief Financial Officer 10

Sample MAX Schedule P ******* 2004 Act 2005 CY 2006 BY Change in obligated balances 7240 Obligated balance, start of year -5 -13 -11 7310 Total new obligations 37 44 40 7320 Total outlays (gross) -40 -42 -40 7340 Adjustments in expired accounts (net) -1 0 0 7400 Change in uncollected customer payments from Federal sources (unexpired) -11 0 0 7410 Change in uncollected customer payments from Federal sources (expired) 7 0 0 7440 Obligated balance, end of year -13 -11 32 42 38 8 0 2 40 42 40 Outlays (gross), detail 8690 Outlays from new discretionary authority 8693 Outlays from discretionary balances 8700 Total outlays (gross) Office of the Chief Financial Officer 11

Sample MAX Schedule P ******* 2004 Act 2005 CY 2006 BY 9 22 17 Offsets Against gross budget authority and outlays 8800 Federal sources Against gross budget authority only 8895 Change in uncollected customer payments from Federal sources (unexpired) 11 0 0 8896 Portion of offsetting collections (cash) credited to expired accounts -6 0 0 Net budget authority and outlays 8900 Budget authority 23 22 23 9000 Outlays 31 20 23 Office of the Chief Financial Officer 12

Errors in FACTS II n When FACTS II data is wrong: u Error messages are created that prevent the MAX account from balancing u OMB requires detailed explanation of why u OMB requires statement of whether accounting data is to be corrected Office of the Chief Financial Officer 13

What can we do to improve? n Office of Budget and Program Analysis: u Working with Office of Management and Budget on MAX u u training for new consolidated Schedule X, which will combine Schedule A and S data, reducing errors and saving time Working with OMB to develop training specific to USDA agencies in the fall Working with agencies to review FACTS II data on a periodic basis to identify areas of concern Plans to send reminders to agencies to review FACTS II data Plans to send reminders to agencies of deadlines for inputting past year data in MAX and major milestones Office of the Chief Financial Officer 14

What can we do to improve? n Office of Management and Budget: u Plans to require more MAX lines to tie to our FACTS II data in 2007 budget u Offering training classes in MAX new Schedule X consolidated schedule in the fall of 2005 l Schedule X will enable input of appropriation and outlay data in one place to then be automatically read into multiple entries in MAX for Schedules A, S and P u Offering training classes in MAX, including information on the relationship of MAX data to FACTS II u Will work with USDA to develop training classes specifically aimed at providing detailed classes USDA employees need Office of the Chief Financial Officer 15

What can we do to improve? n Agencies: u Monthly review of FACTS II data l Regularly check your accounting data for consistency with your understanding of the agency budget l OMB Circular No. A-11 states: “Before your accounting office submits actuals to Treasury in FACTS II, you must ensure that the amounts are conceptually and numerically consistent with the amounts that you are going to report in MAX. ” l Check for correct Mandatory/Discretionary categorization (i. e. , BEA category) l Ensure that Internal Apportionments, SF-132 s, are not coded as transfers (SF-1151 s) l Ensure you have SF-132 s, apportionments and reapportionments, for accounts that match FACTS II data l Ensure Transfer documents, SF-1151 s are completed for accounts that require transfers l Check transfers, appropriations are in the right accounts, for the right amounts and in the right years Office of the Chief Financial Officer 16

What can we do to improve? n Agencies: u Continue to provide training to staff who conduct MAX data entry and analysis u Continue working with budget, finance and accounting staff all year round u Begin entering data for the Past Year column of the budget as soon as MAX opens for input: Be concerned about your data before MAX opens Office of the Chief Financial Officer 17

Timeframe n MAX opens in early December for Data Entry of Past Year Data n FACTS II opens for a 1 to 2 week period at that time for edits n Past Year data locks in mid-December n MAX database locks completely in early to mid. January n The President’s budget is released the first Monday in February Office of the Chief Financial Officer 18

Bottom Line: Why do we care? n Accountability u In budget, finance and accounting data u To OMB u To the public and others who use this data to review our programs, and who judge our accuracy u Getting to Green and Staying There Office of the Chief Financial Officer 19