PURPOSE

This bulletin provides current guidance to USDA agencies for recording rescission transactions into the Foundation Financial Information System (FFIS).

BACKGROUND

Rescissions and cancellations are reductions, by law, of budgetary resources. Reductions are recorded as negative budget authority in the year the reduction takes effect, regardless of whether the action reduces new budget authority or unobligated balances.  

Properly recording a rescission depends primarily on knowing what kind of rescission it is. Understanding this information will ensure that the correct Standard General Ledger (SGL) accounts and corresponding posting models are used. Agencies that are in doubt about the kind of rescission they have must work with the Office of Budget and Program Analysis (OBPA) for assistance.  

Congress can enact reductions in many ways. For example, the language can specify a dollar or percentage reduction and can pertain to a specific account or multiple accounts.  Rescissions and cancellations can impact all types of budget authority and can be permanent or temporary, subject to the underlying availability of the funds and to the specific statutory authority for the reduction.

PROCEDURES

The two most common errors associated with rescissions are (1) requesting negative warrants too late, i.e., after yearend; and (2) choosing an improper SGL account to post the rescission in the general ledger.

Requesting Negative Warrants

Within the Department of Agriculture, OBPA is responsible for requesting negative warrants for all of the USDA agencies. It is the responsibility of each agency to follow-up with OBPA to ensure this is completed. The budgetary impact of a rescission must coincide with the year rescinded or it will cause out of balance conditions with Federal Agencies Centralized Trial Balance System (FACTS) II reporting.

Choosing an SGL Account

Before a rescission can be processed in FFIS, the user must review the General Ledger Balance Table (GLBL) to determine the amount of available authority at each level. Rescissions must be withdrawn consecutively, beginning with the lowest budget level working up to the highest level in the budget chain where the funds are classified as Unapportioned Authority (SGL account 4450).  This can be accomplished by processing a combination of negative budget execution documents.  

Once at the unapportioned authority level, use the following table to determine what transaction to process. The table provides descriptions of the types of rescissions, along with the corresponding Accounting Entries Definition Reference Table (ACED) transaction code and transaction type and the Accounting Entries Reference Table (ACEN) posting model that should be invoked.  The attached Rescission Example provides a sample workflow of how a rescission is recorded.  

Note:  All rescissions should be entered as a negative amount on the AA document.

INQUIRIES

Questions concerning this bulletin should be directed to the Systems Analysis and Requirements Division at (202) 720-7975 or (504) 426-5123, or via e-mail at howard.campbell@usda.gov or sheryl.davenport@usda.gov.

EFFECTIVE DATE

This bulletin supersedes FFIS Bulletin 03-3, Procedures for Recording Rescission Transactions into the Foundation Financial Information System, dated June 30, 2003, and is effective immediately.

JOHN G. BREWER
Associate Chief Financial Officer for Financial Operations

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