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NAO
203-34
ISS:
8/30/95; EFF: 8/18/95
CERTIFICATION OF OBLIGATIONS
SECTION 1. PURPOSE.
.01 This Order amends NOAA Administrative Order (NAO)
203-34, dated February 2, 1988, that establishes NOAA
policy and procedures for the review and certification
of obligations to substantiate the accuracy of obligations
and their consistency with the standards required by
31 U.S.C. 1501.
.02 This amended Order changes the requirement for
certification of obligations from twice a year to once
a year, eliminates listing the obligations that were
adjusted on the certification statement, and includes
the Finance Services Division (FSD) responsibilities
similar to that of the Administrative Support Centers
(ASCs). These changes were incorporated in Sections
5 through 7.
SECTION 2. SCOPE.
The provisions of this Order apply to all NOAA organizational
units having responsibility for controlling and monitoring
the use of financial resources.
SECTION 3. REFERENCES.
.01 31 U.S.C. 1501 provides the criteria for valid
obligations.
.02 3l U.S.C. ll08(c) requires the certification of
agency obligations and requires obligations to be properly
supported.
.03 Office of Management and Budget (OMB) Circular
A-34, Section 2l.l, defines obligations incurred.
.04 General Accounting Office (GAO) Policy and Procedures
Manual for Guidance of Federal Agencies, Title 7, Fiscal
Procedures, sub-section l6.3, specifies responsibility
for assuring that all recorded obligations are valid.
.05 Department of Commerce Department Administrative
Order 203-34 establishes Department-wide policy on
the certification of obligations.
SECTION 4. DEFINITIONS.
.01 Criteria for Valid Obligations. Under 3l
U.S.C. l50l(a), a valid obligation exists when evidenced
by:
a. a binding agreement in writing between an agency
and another party (including Government agencies) in
a way and form and for a purpose authorized by law,
executed before the expiration of the period of availability
for obligation of the appropriation or fund concerned
for specific goods to be delivered, real property to
be purchased or leased, or work or services to be performed;
b. a valid loan agreement, showing the amount of the
loan to be made and the terms of repayment;
c. an order required by law to be placed with a Government
agency;
d. an order issued under a law authorizing purchases
without advertising when necessitated by public exigency
or for perishable subsistence supplies or within specific
monetary limitations.
e. A grant or subsidy payable (1) from appropriations
made for payment of, or contributions to, amounts required
to be paid in specific amounts fixed by law or in accord
with formulas prescribed by law, or (2) under an agreement
authorized by, or under plans approved in accord with
and authorized by law.
f. A liability that may result from pending litigation.
g. Employment or services of persons or expenses of travel
under law.
h. Services provided by public utilities.
i. Any other legal liability of the Government against
an available appropriation or fund.
.02 Deobligation.
A downward adjustment or deletion of previously recorded
obligations. Such
adjustments may be attributable to cancellation of
a project or contract, price revisions, corrections
of amounts previously recorded, or differences between
obligations previously recorded and payments made.
.03 Obligated Balance. See Unliquidated Obligations.
.04 Obligations.
Amounts of orders placed, contracts awarded, services
received
and other similar
transactions that will require payments during the
same or future period. Such amounts include outlays
for which obligations were not previously recorded
as well as differences between obligations previously
recorded and actual outlays. All obligations
must meet the criteria set forth in 3l U.S.C. l50l(a).
.05 Outlays. The liquidation of obligated balances
when either a check is issued, a letter-of-credit drawdown
is made, or cash is disbursed, less collections,
including reimbursements, refunds received, loan repayments,
prepayments, and loan asset sales received and credited.
.06 Undelivered Orders. The amount of orders
for goods and services outstanding for which the liability
has not yet accrued. This amount includes any orders
for goods or services for which advance payment has
been made, but for which delivery or performance has
not yet occurred.
.07 Unexpended Balance. The sum of obligated
and unobligated balances.
.08 Unliquidated Obligations.
The obligated balance remaining for the amount of
orders placed,
contracts awarded, services rendered, or other binding
agreements made by Government agencies after making
any payments or deobligations. Reports to the
Treasury for an appropriation or fund account consider
unliquidated obligations as the sum of undelivered
orders plus accounts payable less reimburse- ments
earned and refunds.
.09 Unobligated Balance.
The amount of obligational authority that has not
been
obligated. It is
only carried forward when the authority to incur obligations
in subsequent years is specifically provided by law.
SECTION 5. POLICY.
.01 The optimum utilization of funds requires that
all current and prior year obligations be continuously
reviewed to ensure that obligated balances are not
over or under stated and that the obligations are properly
documented and reported.
.02 Formal review and certification of obligations
shall be made once yearly by each Financial Management
Center (FMC). Obligations found to be unnecessary will
be promptly adjusted. All adjusting transactions shall
be properly documented and all documentation shall
be retained for audit purposes.
SECTION 6. RESPONSIBILITIES.
.01 The head of each FMC is responsible for continuously
verifying that all obligations are properly recorded
and will report once yearly through his/her Line Office/NOAA
Staff Office (LO/NSO) to the Comptroller of NOAA that
all obligations have been reviewed, and adjustments
made where necessary, and that all known transactions
meeting the criteria of 3l U.S.C. l50l(A) have been
obligated and reported.
.02 The Director of each ASC/Chief, FSD will ensure
that obligations, accounts payable, disbursements,
cost accruals, advances, and collections are supported
by proper documentation and accurately recorded in
the NOAA Financial Management System (FIMA).
.03 The Director of each ASC/Chief, FSD will ensure
that adjustments or deobligations identified by FMCs
are processed promptly and recorded accurately in FIMA.
In some cases, this will require the issuance of amendments
to business instruments by Contracting and Grant Officers
at their discretion.
.04 The head of each LO/NSO will ensure compliance
by his/her organizations with the policies, procedures
and reporting requirements set forth in this order.
.05 The Comptroller will provide reports to LO/NSOs
and ensure compliance with the policy set forth in
Section 5.
.06 The Comptroller or other designee of the Under
Secretary/ Administrator will sign the Year-End Closing
Statement (TFS Form 2108) required by 31 U.S.C. 1108(c)
on behalf of NOAA.
SECTION 7. PROCEDURES.
.01
FMCs receive, or have access interactively to, various
reports from the NOAA Financial Management
System (FIMA) to be used in validating transactions
recorded in the official accounting records. These
reports must be verified against the records and copies
of source documents maintained by the FMC. The following
reports must be thoroughly reviewed by the FMC upon
receipt (or interactive availability) at the frequencies
specified below:
Report Title Frequency of Review
Weekly Document Status Report Each week
Report of Labor Cost Detail by Employee Each pay period
FMC Monthly and Cumulative Cost and Each month
Obligation Detail Report
Quarterly Document Status Report Each fiscal quarter
.02
Procedures for initiating actions to correct errors
found in the reports are contained
in Chapter l5 of
the NOAA Finance Handbook. Requests for deobligation
of invalid undelivered orders or removal of invalid
accounts payable must be made in writing to the servicing
ASC/FSD.
.03 The servicing ASC/FSD will take prompt action
to process all FMC requests for adjustments and will
retain and file copies of FMC requests for audit purposes
in the official ASC/FSD document folders.
.04
On a continuous basis, the FSD of each ASC will ensure
that all transactions recorded
in FIMA (which
they originate) are accurate and supported by proper
documentation retained in their files.
.05
Once yearly, the heads of the LO/NSOs shall conduct
a formal review, through their FMCs,
of all obligations
and provide a certification statement to the Comptroller. The
reviews shall be performed by each FMC using the Quarterly
Document Status and the Monthly and Cumulative Cost
and Obligation Detail Reports as of June 30. FMCs
must work closely with the servicing FSD/ASC finance
and procurement divisions and the responsible Contracting
Officer Technical Representative/Technical Monitor
to determine the validity and status of obligations
and to initiate required actions to deobligate or remove
invalid records. FMCs will also notify the servicing
FSD/ASC of any unrecorded or improperly recorded obligations.
.06 Each head of an FMC must complete and sign a Certification
of Obligations (Appendix A) and forward it to the responsible
LO/NSO. The LO/NSO will assemble and review all FMC
certifications, countersign, and forward a consolidated
LO/NSO package to the Comptroller. The due date for
the June 30 certification is September 1.
.07 The Comptroller will monitor the above process
and take follow-up actions to obtain all required annual
certifications by the due date.
.08 The Comptroller will review inactive unliquidated
obligations and statistically select documents for
a thorough review by the servicing FSD/ASC finance
and procurement divisions.
.09 Based upon the LO/NSO certifications and FSD/ASC
review of select documents, the Comptroller or other
designee of the Under Secretary/Administrator will
sign the Year-end Closing Statement (TFS Form 2l08)
on behalf of NOAA in accordance with 3l U.S.C. ll08(c).
SIGNED
Comptroller
SIGNED
Director, Office of Administration
Office of Primary Interest:
Office of Comptroller, Financial Management Division (BF2)
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APPENDIX A NAO 203-34
U.S. Department of Commerce
National Oceanic and Atmospheric Administration
Certification of Obligations
I hereby certify that the amounts shown in the Quarterly
Document Status Report and the FMC Monthly and Cumulative Cost
and Obligation Detail Report as of
are correct except for the amounts shown below. All known
transactions meeting the criteria of 3l U.S.C. l50l(a) have
been obligated and reported. The servicing Administrative
Support Centers have been instructed to deobligate the invalid
amounts.
FMC Certification: LO/NSO Review:
Signature Date Signature Date
Typed Name Typed Name
Title Title
FMC No. Office
Items requested to be deobligated this period:
Object
Document # Organization Code Task # Class Amount
Total
Items requested to be deobligated but remaining open from
prior certification:
Object
Document # Organization Code Task # Class Amount
Total
(Continue on bond paper if necessary)
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