Date: November 18, 2005
Sunset Review: November 18, 2009
SUBJECT: Working Capital Fund
1.PURPOSE. This Directive describes the Working Capital Fund (WCF), provides policy, and assigns and delegates responsibilities for administering the WCF.
2.POLICY. It is the policy of the Department of the Treasury to provide through the WCF certain common administrative services, defined in section 3.d., that benefit Treasury bureaus and, in certain circumstances, other agencies � hereafter referred to as customers. The WCF provides these services on a centralized basis, where they can be administered more advantageously and more economically than they could be provided otherwise.
3.DEFINITIONS.
a. Advance � the amount of cash collected from each customer in advance of the service provided.
b. Carryover � funding collected in one fiscal year that was not obligated and is available to be used to meet requirements in the next fiscal year
c. Collection Letter � the correspondence transmitted to each customer identifying their annual WCF program requirements and the amount that will be collected through an advance or reimbursement to the WCF.
d. Current Services Approved by the Office of Management and Budget (OMB) � consist of printing, duplicating, graphics, telecommunications, VAX computer support/usage, automated financial management systems, personnel/payroll system services and operations, Treasury procurement information systems, Federal Executive Institute and Executive Center Seminars, centralized short-term management assistance, equal employment opportunity services, centralized human resources management initiatives, and common administrative information technology services. The addition of services requires prior approval of Treasury�s Assistant Secretary for Management and Chief Financial Officer (ASM/CFO) and the Director of OMB.
e. Customers� the organizations purchasing services offered by the Treasury WCF program.
f. Customer Contacts � the point of contact in the customer organization that acts as a liaison for their organization with the WCF Program office(s).
g. Draw-down � reduction to the advance balance when expenses are posted to each customer�s account
h. Financial Plan � the total funding requirements for providing all services to a customer for each fiscal year.
i. Inflation � the annual increase to maintain current levels of service
j. Overhead � administrative expenses incurred as a result of providing services to WCF programs.
k. Reimbursement � amount of cash collected from each customer after services are provided (this collection method is used for customers that obtain operating funds by earning interest on invested funds)
l. Treasury Bureaus and Entities � Alcohol and Tobacco Tax and Trade Bureau, Community Development Financial Institutions, Office of the Comptroller of the Currency, Office of DC Pensions, Departmental Offices, Bureau of Engraving and Printing, Executive Office for Asset Forfeiture, Federal Financing Bank, Financial Crimes Enforcement Network, Financial Management Service, Internal Revenue Service, Treasury Inspector General for Tax Administration, Office of Inspector General, Office of Thrift Supervision, Bureau of the Public Debt, Treasury Franchise Fund, United States Mint.
m. WCF � a revolving, no-year fund without dollar limitation which provides centralized administrative services that are used by more than one customer. To cover the cost of operations, the WCF is financed by advance payments or reimbursements from customers
n. WCF Program Liaison � the point of contact in each WCF Program office within Departmental Offices.
o. WCF Program Offices � those offices in Departmental Offices that provide an approved service through the WCF
4.RESPONSIBILITIES.
a. The Assistant Secretary for Management and CFO has overall responsibility for management and administration of the WCF programs
b. overseeing all financial management activities relating to the programs and operations of the Department. The Assistant Secretary for Management and CFO approves proposals for new or expanded WCF programs and obtains approval from the Director of OMB to add programs to the WCF.
c. The Office of the Deputy Chief Financial Officer is responsible for the overall WCF program soundness and shall:
(1) provide Treasury-wide management, policies, and procedures related to the overall quality, effectiveness, efficiency, and value of the WCF services
(2) oversee the process of WCF service delivery assessments and operational metrics for all WCF components
(3) coordinate the response to and resolution of WCF service issues either internally or from its customer base
(4) provide corporate response and resolution to audit findings or material weaknesses resulting from WCF operations
(5) receive and review interim requests from the WCF program offices for increases in funding to the WCF that were not included in the annual budget process and forward them to the Assistant Secretary for Management and CFO for approval prior to forwarding to the Bureau CFO�s for their approval
(6) provide management guidance and oversight of the overhead account, make decisions related to establishing resource levels, and approve changes to established resource levels for this account
d. Office of Financial Management (OFM), Office of the Deputy Assistant Secretary for Headquarters Operations is responsible for administering the financial operations of the WCF and shall:
(l) serve as the point of coordination for all matters which relate to the financial operations of the WCF account
(2) develop consolidated annual financial plans (to include overhead) based on input received from the WCF program offices
(3) compute carryover amounts from prior years used to offset the current year collections
(4) provide direction and assistance to WCF program managers in the development of operating plans, budgets, and supporting documents relating to the financial operations of the WCF
(5) issue customer collection letters based upon annual financial plans
(6) perform current-year billings on a quarterly basis (and adjustments thereto)
(7) record and/or adjust annual financial plans in the accounting system based on apportionments, allotments, or other adjustments and certify funds availability
(8) record commitments, obligations, accruals, payments, or other adjustments in accordance with Federal Accounting Standards Advisory Board (FASAB) pronouncements; Joint Financial Management Improvement Program (JFMIP) systems requirements; OMB Circulars; and other recognized Federal requirements
(9) compute, review, and issue billing statements to WCF customers; ensure that billing statements provide customers with sufficient detail to verify the accuracy of the bill and ensure transparency in the billing process
(10) develop, produce, and distribute budget execution status reports to the WCF service-providing offices
(11) perform special analysis of WCF financial activity as a part of total OFM budget execution responsibilities
(12) maintain an up-to-date description of services, a list of program and bureau contacts, and a billing methodology for each program
(13) review financial reports for conformance with program and financial plans, and inform the Deputy Assistant Secretary for Headquarters Operations and other WCF program managers of trends and changes required in the financial plan
(14) determine, based upon reports from WCF program managers that have consulted with bureaus, whether there are balances in excess of the WCF's needs. Balances are in excess of the WCF's needs when they exceed the ceiling for accumulating reserves needed to cover the cost of acquisition, repair and replacement for a WCF program/function as established in the program/ function's financial plan
(15) after consultation with the applicable program office(s) and the Office of the General Counsel, assure that balances determined to be in excess of the WCF needs are refunded or, if appropriate, deposited into the Treasury as miscellaneous receipts or transferred to another WCF program
(16) provide controls that ensure asset protection and prepare WCF financial statements in accordance with the Chief Financial Officers Act.
(17) ensure the overhead account resources are managed in compliance with corporate policy of the Deputy Chief Financial Officer
(18) conduct an annual review to ensure overhead account resource allocations are appropriate
e. The WCF Program Offices are responsible for managing the operations and delivery of services to customers and shall:
(1) provide only those services defined in section 3.d. above
(2) conduct service delivery assessments and maintain operational metrics for each program
(3) develop and maintain a comprehensive set of performance measures to assess each service being offered
(4) operate a cost effective WCF program increasing the value customers receive for the dollars spent and provide superior support to the customers
(5) develop annual financial plans for each WCF service that reflects the customer needs for the upcoming year
(6) manage WCF programs within the operating plan approved by the Assistant Secretary for Management and CFO
(7) provide monthly or quarterly reports to each customer on the status of their specific account information
(8) develop, review, and maintain an accurate cost allocation methodology for billing services to each customer
(9) review financial reports for accuracy and ensure that corrections are made to the accounting records
(10) periodically meet with customers to review current year funding status and notify OFM if any excess funds need to be returned to the customers
5.CRITERIA FOR USING WCF. The following standard criteria should be used to determine whether a function should be financed through the WCF:
a. promotes economies of scale
b. reduces overhead costs
c. promotes central management
d. avoids duplication among those who might provide the service
e. improves service quality
f. makes available goods and services to those users who could not afford them except on a centralized basis
g. provides flexibility in the timing of purchases
h. allows for replacement of equipment and other assets on a long-term basis through the use of depreciation charges to users, as a means of recovering those costs
6.PROCEDURES FOR OBTAINING ASM/CFO AND OMB APPROVAL TO ADD OR EXPAND PROGRAMS IN THE WCF All proposals must meet the criteria in Section 5 above and contain, in detail, an explanation of the program, to include: specific goals and objectives; a summary of resources required, by customer, as well as the methodology used to determine these costs; a description of how the proposed program will benefit the customer; and what customer base/population the program would benefit. Implementation of these programs must be timed to coincide with the annual budget process, which will allow customers to include the necessary funding in their budget submissions.
Upon the determination that the addition of new or expanded programs meet the necessary criteria and can be carried out more advantageously and economically through the WCF, the Deputy Chief Financial Officer will obtain approval of the Assistant Secretary for Management and CFO and the Director of OMB to add the program(s) to the WCF.
7.PROCEDURES FOR OBTAINING FUNDING INCREASES FOR PROGRAMS IN THE WCF With the exception of inflation, all increases to WCF programs including the overhead account should be timed, if possible, to coincide with the annual budget process. Working Capital Fund increases fall into two categories: enterprise-wide and Bureau-specific. Enterprise-wide initiatives will be the responsibility of the Working Capital Fund program office to develop, with bureau input, and submit as a consolidated request. No Bureau action is necessary for requesting these funds. Bureau-specific requests for the Working Capital Fund (those benefiting only the requesting Bureau) should be submitted through that Bureau�s Departmental request using the appropriate tables and exhibits to justify the full cost of the initiative. Any request for an increase that does not comport with the annual budget process must be compelling and approved by both the Assistant Secretary for Management and CFO and bureau CFO�s. Proposals must be submitted to the Assistant Secretary for Management and CFO through the Deputy Chief Financial Officer. Proposals must include the following information:
a. explanation of the program
b. summary of resources required from the bureaus
c. cost methodology
d. benefit to the bureaus
e. program goals and objectives
f. explanation for not waiting for the annual budget process
8.AUTHORITY.
a. The WCF for the Department of the Treasury was established by section 401 of Public Law 91-614 (1970), now codified at 31 U.S.C. �322, and amended by section 442 of Public Law 98-369 (1984)
b. Treasury Order 101-05, "Reporting Relationships and Supervision of Officials, Offices and Bureaus, Delegation of Certain Authority, and Order of Succession in the Treasury Department"
9.REFERENCES.
a. OMB authorization to expand the portfolio of central services funded by the Treasury Department's Working Capital Fund dated: November 18, 1994, September 30, 1997, July 1, 1999, November 22, 1999, and January 5, 2004
b. Treasury memorandum from the Assistant Secretary for Management & CFO, dated December 19, 1997, implementing new policy for additional or expanded WCF programs
10.CANCELLATION. TD 31-04, "Working Capital Fund," dated September 21, 1999, is superseded.
11.OFFICE OF PRIMARY INTEREST. Office of the Deputy Chief Financial Officer and the Office of Financial Management, Office of the Deputy Assistant Secretary for Headquarters Operations and Office of the Assistant Secretary for Management & CFO.
/S/
Sandra L. Pack
Assistant Secretary for Management
and Chief Financial Officer