United States
Department of
Agriculture
File Code:
Route To:
Forest
Service
6500/6300/1580
14th & Independence SW
P.O. Box 96090
Washington, DC 20090-6090
Washington Office
Date:
April 20, 2004
Subject:
CFO Bulletin No. 2004-007 - Using Budget Object Codes For Purchases of
Property, Goods and Services
To:
Regional Foresters, Station Directors, Area Director, IITF Director, Deputy
Chiefs, WO Staff Directors
PURPOSE
The purpose of this bulletin is to differentiate between Budget Object Codes used in the
acquisition of capitalized real and personal property items, and those used for acquisition of
goods and services that are expensed. Also included in this bulletin is a listing of job titles and
their responsibilities in ensuring the quality and integrity of financial data, much of which is
dependant on the use of correct Budget Object Codes. Enclosure 1 is a copy of the BOCs
available for use.
DEFINITIONS
Budget Object Code (BOC): A key element of accounting information used by the Federal
Government to record its financial transactions according to the nature of goods or services
provided or received. Both procurement and accounting operations personnel use BOCs on all
transactions flowing through both the procurement and the accounting systems.
BOCs consist of 4-digits:
A.
Positions 1 and 2 of the budget object code are called the Major Object Class
Code. Major Object Class 31 is used to identify the acquisition of Personal
Property and Equipment. Major Object Class 32 identifies the acquisition of
Real Property lands and structures.
B.
Positions 3 and 4 are called the Detail Sub-object Class Code. These two
digits identify what type of property has been acquired. For example, Subobject Class 12, combined with Major Object Class 31 (3112) identifies
Furniture and Fixtures that are capitalized. Sub-object Class 20, combined
with Major Object Class 32 (3220) identifies Buildings and Attached Fixtures
that are capitalized.
Capitalized Property: Capitalized property, either Personal or Real, must meet all three of the
following criteria:
1) It must be of durable nature,
2) It must have a useful life of two or more years once it is placed into service,
3) Its initial acquisition cost must be $25,000 or more, except for internal use software,
which must be $100,000 or more. These amounts represent capitalization thresholds.
Any Personal Property assets costing less than these amounts, except for Accountable
Personal Property defined below, are recorded to budget object codes other than 31 and
are treated as operating expense in the current year rather than assets on the balance sheet
Caring for the Land and Serving People
Printed on Recycled Paper
Regional Foresters, Station Directors, Area Director, IITF Director, Deputy Chiefs, WO Staff
Directors
2.
for the agency. DO NOT ASSIGN A BOC OF 31 TO ANY ACQUISITION OF
PERSONAL PROPERT IF THE COST IS BELOW $25,000.
4) An exception to this rule is 3140, which is used to record non-capitalized, nonaccountable, non-sensitive property.
5) BOC 32 series is only used for land and interest on land, buildings and other structures,
additions to buildings, non-structural improvements and fixed equipment that meet the
capitalization criteria, except BOC 3290 which must be used to record land and structures
having an initial acquisition cost of less than $25,000.
Capitalization of an asset places it in a property control and ledger system so that its costs can be
tracked and subsequently depreciated in conformance with generally accepted accounting
principles. Capitalized assets are presented on the agency balance sheet. Operating expenses are
presented on the statement of net cost.
Accountable Personal Property: All capital leases (this would exclude operating leases for
personal property), and all owned personal property having an acquisition cost of $5,000 or more
(see AGPMR, paragraph 104-50.001-18 for definition of leases). BOCs in the 3150 and 3190
series are used to identify Accountable Personal Property. Accountable personal property also
includes any item valued at less than $5,000, but determined to be Sensitive by the Agency
Property Management Officer. Sensitive Personal Property items will be charged to BOC 3141.
The current categories of Sensitive Forest Service property are:
1) All weapons (including, but not limited to, those used for law enforcement, cone
collection, avalanche control, flame launcher, and bear protection);
2) All radiological equipment having a radioactive source;
3) Precise Positioning Service (PPS) Global Positioning System (GPS) receivers
capable of receiving P(Y) code broadcast from the Department of Defense
satellite constellation.
Infra Central (CPAIS): The fiscal module of Infra that records and stores accounting data for
all capitalized real property assets for the Forest Service. Infra Central will soon be incorporated
into the USDA CPAIS real property asset management system.
PROP: The subsidiary system for maintaining capitalized, accountable, and sensitive non-WCF
personal property.
EMIS: The subsidiary system for maintaining capitalized and accountable personal property
that is in the Working Capital Fund system.
BACKGROUND
The Office of Management and Budget (OMB) establishes the major object class codes and titles
to be used by all Federal agencies. The BOCs available for use by USDA agencies are published
in the National Finance Center (NFC) Procedures publication entitled Budget Object
Classification Codes (BOCC). This publication is available electronically at
http://dab.nfc.usda.gov/pubs/na-pubsmain.html.
Regional Foresters, Station Directors, Area Director, IITF Director, Deputy Chiefs, WO Staff
Directors
3.
Specific budget objects in the 3100 and 3200 series indicate the acquisition of accountable,
sensitive, or capitalized property. Obligations recorded against the BOCs for capitalized
property result in capitalization of the costs, whether or not the acquisitions meet capitalization
criteria. Transactions categorized in the budget object codes for accountable and capitalized
property are automatically transmitted to PROP or INFRA as updates to the property records,
even if the acquisition does not meet the criteria for accountable or capitalized property.
The Forest Service also uses an accounting element (the General Ledger Post Type) within
certain job codes to indicate that costs should be capitalized. Because of this coding convention,
obligations against these job codes will result in capitalization of the goods or services acquired
regardless of the budget object code. Examples include the Working Capital Fund (WCF) job
codes that begin with the digits 98 and 85 and real property job codes that begin with the letters
Q and Y.
CFO Bulletin No. 2002-025 provided direction regarding the increase in the threshold for
capitalization of personal property. The current issuance of this bulletin is necessary because
items that do not meet the criteria for accountable or capitalized property continue to be recorded
to BOCs 31XX and 32XX, which produces incorrect accounting. In addition, items that should
not be managed as accountable property are incorrectly directed to the PROP subsystem when
accountable or capitalized property BOCs are used erroneously.
RESPONSIBILITIES
The Associate Deputy Chief, Budget and Finance, Chief Financial Officer is responsible for
the quality and integrity of the financial data in the Foundation Financial Information System
(FFIS) and its subsidiary systems.
The WO Financial & Accounting Operations Staff Director is responsible for:
1. Performing the same actions as required for the R/S/As and units, for Region 13
(WO).
2. Providing advice to field units to facilitate full compliance with this direction.
The WO Financial Reports & Reconciliation Staff Director is responsible for displaying
Forest Service property and operating expenses timely and accurately in the financial statements,
reconciling the amounts periodically, and obtaining descriptive details for narrative footnotes.
The WO Financial Policy and Analysis Staff Director is responsible for:
1. Issuing accounting policy and procedure governing commitments, obligations,
property, and operating expenses, including the quality assurance and monitoring required,
assuring the correct timing and recording of the assets, liabilities, obligations, and operating
expenses.
2. Maintaining and analyzing historical statistics and trends of budget object code usage
errors during internal reviews and transaction sampling in order to assess the accuracy of the
Regional Foresters, Station Directors, Area Director, IITF Director, Deputy Chiefs, WO Staff
Directors
4.
BOCs retrospectively. This will allow us to improve upon the current direction, thereby
increasing the accuracy and reliability of the financial statement information.
3. Maintaining data in the accounting system to ensure compliance with policies and
procedures.
The WO Financial Management Systems Staff Director is responsible for implementing and
maintaining the appropriate posting models to allow for proper analysis and compilation of
accounting data to generate the related accruals.
The WO Acquisition Management Staff Director is responsible for establishing and
implementing procurement operating procedures service-wide that require property specialists to
review and approve all procurements using a property budget object in the 3100 or 3200 series.
Regions, Stations, Area, FPL, IITF, Job Corps, and Forest Supervisors (R/S/As) are
responsible for the quality and integrity of financial data processed in their areas of
responsibility, including the selection of the appropriate budget object codes for all
procurements.
The Local Acquisition Management Staff is responsible for confirming the selection of the
appropriate budget object codes for all procurements. It is the responsibility of the individual
who enters a transaction into the accounting system, whether directly or through an interface, to
apply the correct budget object that best describes the goods or services acquired.
The Local Budget and Finance Staff is responsible for:
1. Recording obligations into FFIS for undelivered orders in an accurate, timely manner;
also responsible for the subsequent steps in the spending chain.
2. Ensuring that budget object codes shown on accounting documents are correct. All
transactions entered into the accounting system, whether directly or through an interface, shall
have the correct budget object that best describes the goods or services acquired.
POLICY
The budget object code that best describes the goods or services acquired shall be applied to all
acquisitions of goods or services. Use the Detail Sub-object Class Code listed in the NFC
publication, Budget Object Classification Codes (BOCC) for proper application. The definitions
of the Major Budget Object Class Codes and Summary Level Object Titles must be taken into
consideration when selecting the appropriate budget object code. The titles of Detail Sub-object
Class Codes are not always descriptive enough to be used alone. For example, BOC 2591
(Construction Contracts) might be applied incorrectly unless the title and definition of the
Summary Level Budget Object Code 2590 (Distributed Overhead) is also taken into
consideration. This is especially a problem in PCMS where the system’s list of BOCs does not
show the relationship between Subject Class Codes and Summary Level Titles.
Property specialists or other employee responsible for property shall review and approve all
procurements using budget object codes in the 3100 and 3200 series. Property specialists shall
signify their approval by handwriting their initials and the date as close to the budget object code
as can be legible. If the individual who needs to enter a transaction into the accounting system
Regional Foresters, Station Directors, Area Director, IITF Director, Deputy Chiefs, WO Staff
Directors
5.
needs to use a 31xx BOC, the Property Management Officer or Technician shall indicate their
approval of the use of the BOC on the procurement request, agency copy of the purchase order,
advanced acquisition plan, or other procurement-related document that indicates the BOC to be
used.
Use of BOCs that end in double “00” (e.g., 3100) are prohibited. Sub-object class reporting is
necessary for both management information and reporting.
For property BOCs in the 31XX or 32XX series, accounting adjustments shall be processed to
correct any BOC error. For non-property BOCs, an accounting adjustment shall not occur if an
incorrect BOC is used on a transaction and the correct BOC is within the same Summary Level
Object Class Code.
EFFECTIVE DATE
The policy and procedure in this bulletin is effective immediately.
INQUIRIES
Any procurement questions concerning this bulletin should be directed to Laurie Lewandowski
at 703-605-4573. For financial policy questions, contact Gail McCrary at 703-764-9117. For
property questions, contact Melissa Jones at 703-605-4664.
/s/ Christopher L. Pyron
CHRISTOPHER L. PYRON
Deputy Chief for Business Operations
Enclosure
cc: Laurie Lewandowski, Melissa Jones, laveta charity