FMM_2_12_8_AviationSecurityInfrastructureFees_031910.pdf

TSA Financial Management Manual March 19, 2010

Part 2 - Chapter 12, Section 8 File: 5000.10

AVIATION SECURITY INFRASTRUCTURE FEES

1. PURPOSE

This section provides instructions on the proper accounting and reporting of fee collections for Aviation Security Infrastructure Fees, also known as “ASIF” or “Air Carrier Fees.”

Instructions for the September 11 Security Fees are addressed in a separate chapter.

2. POLICY REFERENCES

• Aviation and Transportation Security Act (ATSA), Pub. L. No. 107-71, 115 Stat. 597 – Legislation that created and has authorized TSA to impose transportation security fees on air carriers.

• 49 U.S.C. 44940 – United States Code Title 49, Section 44940 codifies security service fees authorized under ATSA.

• 49 C.F.R. § 1511 – Provides guidance for the collecting, remitting, accounting, and reporting of the Air Carrier Fees. In addition, mandates that airline carriers complete and submit the information required in Appendix A of the C.F.R.

• Debt Collection Improvement Act of 1996, Pub. L. 104-134, 110 Stat. 1321–358 – Requires delinquent debts over 180 days old to be transferred to Treasury, and outlines offset actions, garnishment actions, and dissemination of information regarding the identity of delinquent debtors.

• 31 C.F.R. § 901 – Outlines the actions an agency must follow regarding debt collection actions, debt reporting, penalties and administrative fees, and installment repayments.

• 49 C.F.R. § 89 – Implements the Federal Claims Collection Act of 1996 which permits TSA to seek civil penalties for collection amounts not remitted by the due date.

3. DEFINITIONS

• Accountable Official

– A U.S. Government employee or agent who is responsible for or has custody of government/public funds. The term includes certifying officers, disbursing officials and others who are responsible for or have custody of government funds (e.g., cashiers, collecting agents, imprest fund cashiers, etc.). An accountable official can be held pecuniarily liable for illegal or improper payments.

Accounts Receivable

– An umbrella term for amounts owed the U.S. Government by an individual, organization, or other entity. These receivables may result from amounts due for loans, sales of goods and services, fines, penalties, forfeitures, interest, overpayments, fees, duties, rents, royalties, claims, damages, travel advances, etc. The two basic types of accounts receivable are public receivables and intragovernmental receivables.

Administrative Fee – A one-time fee assessed to cover the administrative costs of processing and handling a delinquent accounts receivable. The calculation of the charge is https://ishare.tsa.dhs.gov/Offices/FinanceAdmin/CFO/Pages/OFM/FMM.aspx https://ishare.tsa.dhs.gov/Offices/ChiefCounsel/Regulations/Documents/ATSA%20(P.L.%20107-71).pdf� http://www.law.cornell.edu/uscode/html/uscode49/usc_sec_49_00044940----000-.html� http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=cc515cdfda1e6bc358aa65e1448d6e3b&tpl=/ecfrbrowse/Title49/49cfr1511_main_02.tpl� http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=104_cong_public_laws&docid=f:publ134.104� http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?sid=cc515cdfda1e6bc358aa65e1448d6e3b&c=ecfr&tpl=/ecfrbrowse/Title31/31cfrv3_02.tpl#900� http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=cc515cdfda1e6bc358aa65e1448d6e3b&rgn=div5&view=text&node=49:1.0.1.1.32&idno=49�

TSA Financial Management Manual March 19, 2010 based on actual or estimated costs incurred; they may not be arbitrarily established. 31 CFR 901.9(c). Note: This agency responsibility has been delegated to FINCEN, which calculates, assesses and retains this fee.

• Automated Clearing House (ACH)

– A nationwide electronic funds transfer system governed by the National Automated Clearing House Association (NACHA) operating rules which provide for the interbank clearing of electronic payments for participating depository financial institutions. The ACH system connects banks to one another by way of the Federal Reserve Board or other ACH operators.

CA$HLINK II

– An electronic system used to manage the collection of U.S. Government funds and to provide deposit information to Federal agencies. CA$HLINK II links Federal agencies, Financial Institutions, the Federal Reserve Banks, and the Treasury fund managers through an electronic network.

Core Accounting System (CAS) – An Oracle Federal Financials based system used by the U.S. Coast Guard and TSA. CAS hosts a suite of applications including: Finance and Procurement Desktop for field level funds management and simplified acquisitions, Workflow Imaging Network System for document imaging and processing, Contract Information Management System for contracts management, and Sunflower Asset Management System for property management.

• Clearing Accounts (also referred to as Suspense Accounts) o Budget clearing account __F3875 is used to temporarily credit unclassified transactions from the public until the funds can be reclassified to the correct account.

– These are accounts established by Treasury to temporarily hold unidentified general, special, or trust fund collections that belong to the U.S. Government until the funds are classified to the proper receipt or expenditure account. An “F” preceding the last four digits of the fund account symbol identifies the clearing account.

o Undistributed intragovernmental payment account __F3885 is used to temporarily credit unclassified transactions between Federal agencies, including IPAC transactions.

• Debt

– This term refers to an amount of money, funds, or property that have been determined by an agency official to be due to the U.S. Government from any person, organization, or entity, except another federal agency.

Delinquent Receivables

– These are accounts receivable with the public that are not repaid within 30 days after the remittance is due. Delinquent receivables incur interest, penalty, and administrative fees for non-payment.

Demand Letter – This is a formal written notification of a debt or delinquent account receivable that demands immediate payment. The Dunning Letter must include a description of the debt, when any interest, penalty, or administrative fees will be assessed, https://cgweb.fincen.uscg.mil/tsafams�

TSA Financial Management Manual March 19, 2010 and a TSA point of contact (POC). In the event that the recipient does not respond, subsequent letter(s) will be sent at specified intervals advising the recipient of the interest, penalty, or administrative fees that have and continue to accrue.

• Electronic Check Processing (ECP)

– A Treasury system used to clear checks using both ACH electronic debits and check truncation (aka Check 21). ECP makes a decision on each check whether to truncate and image the check or create an ACH debit. Most consumer checks will be converted to ACH debits, while most corporate checks will be truncated. Truncation under Check 21 does not convert a check into an ACH debit as conversion does; truncation simply accelerates the settlement process through the use of digital images.

FEDWIRE

– A wire transfer collection system where remitters instruct their bank to transfer payment via the Federal Reserve Communications System to the Treasury General Account located at the Federal Reserve Bank-New York.

FINCEN

– The U.S. Coast Guard Finance Center (FINCEN) is the accounting service provider for TSA.

Interest Fee (also referred to as Delinquent Account Receivable)

– This is interest that accrues on a delinquent public accounts receivable. The Treasury normally establishes the interest rate. The rate of interest initially charged will remain fixed for the duration of the indebtedness. Interest accrues from the date the dunning letter is mailed or hand delivered to the date the debt is paid in full. However, if the debt is repaid within 30 days after interest begins to accrue no interest is charged. 31 CFR 901.9(b) (1).

Intra-Governmental Payment and Collection System (IPAC)

– This system is one of the major components of the Treasury’s Government On-line Accounting Link System (GOALS II). IPAC’s primary purpose is to provide a standardized means of funds transfers between agencies. The IPAC procedure is sometimes referred to as a “push/pull” funds transfer. The agency owing another agency funds “pushes” the payment to them; the collecting agency “pulls” in the funds.

Lockbox

– A collection and processing service offered by financial institutions to accelerate the flow of funds to a Treasury General Account. The offered service includes collecting the mail from a specified post office box; sorting, totaling, and recording the payments; and making the deposits. The financial institution forwards copies of all documentation to FINCEN for posting the collections into CAS.

Non-Delinquent Receivables

– Accounts receivable outstanding for 30 days or less.

Pay.gov – A Web-based portal developed by the Treasury which enables individuals and businesses to securely and easily send electronic payments to the U.S. Government by debit/credit card or ACH debit of a savings or checking account.

TSA Financial Management Manual March 19, 2010

• Penalty Fees

– A charge for failure to pay a part of a debt more than 90 days past due. The penalty charge cannot be more than 6 percent a year. The fee is designed to cover the cost of processing and handling a delinquent claim. 31 CFR 901.9(d).

Treasury

– A general reference to the U.S. Department of Treasury and the various programs and/or systems employed by Treasury.

U.S. Standard General Ledger (USSGL) o 1000 – Assets

– U.S. Standard General Ledger (USSGL) – The USSGL was established to support the consistent recording of financial events as well as the preparation of standard external reports that are required by agencies such as DHS, OMB, and Treasury. The Chart of Accounts provides the basic structure for the USSGL.

The basic 4-digit USSGL accounts are:

o 2000 – Liabilities o 3000 – Net Position o 4000 – Budgetary o 5000 – Revenue and Other Financing Sources o 6000 – Expenses o 7000 – Gains/Losses/Miscellaneous Items o 8000 – Memorandum

Agencies may expand this basic numbering system to as many digits necessary to accommodate agency-specific requirements. However, subsidiary accounts must summarize or “roll-up” to the 4-digit USSGL accounts. OMB Circular A-127 requires that agencies record financial events using the USGGL at the transaction level.

4. RESPONSIBILITIES

The accurate accounting for revenue from Air Carrier Fees involves the coordinated efforts of the Office of Revenue, the Office of Financial Management (OFM), the Office of Budget and Performance (OBP) and FINCEN. Since each entity acts as an accountable official, it is important each accomplishes its financial stewardship responsibilities.

A. The Office of Revenue

(1) Ensures domestic and foreign air carriers remit the Air Carrier Fee on a monthly basis.

(2) Verifies fees received are timely and accurately posted to CAS and delinquent receivables are collected or referred to Treasury.

B. OFM Accounting Branch

(1) Monitors the aging of delinquent accounts receivable.

TSA Financial Management Manual March 19, 2010

(2) Coordinates with the Office of Revenue and FINCEN to ensure the accurate posting of any unidentified remittance amounts in TSA’s budget clearing account.

(3) Prepares the letter to Treasury for the quarterly return of TSA’s appropriations equal to the Passenger Fees collected during each quarter.

(4) Prepares the quarterly accounts receivable accrual for the Air Carrier Fees to be included in the quarterly financial statements.

C. OFM Funds Control and Program Suppor t Branch (FCPSB)

(1) Posts allocations based on OBP supporting documentation.

(2) Records entries for fee collections.

(3) Reallocates funds as needed due to reprogramming, rescissions, and other internal transfers provided by the OBP.

D. Office of Budget and Performance (OBP)

(1) Performs budget formulation and budget execution, including the timely allocation of budgetary authority to TSA program activities when fees are collected.

(2) Identifies mandatory appropriation codes in CAS.

E. FINCEN

(1) Posts the Treasury CA$HLINK II air carrier remittance data into CAS.

(2) Coordinates any unresolved issues with the Office of Revenue and OFM Accounting Branch.

F. Domestic and Foreign Air Carr iers

(1) Congressionally mandated to complete and submit the data mandated in Appendix A of 49 C.F.R. 1511 as part of the Aviation Security Infrastructure Fee.

(a) The data regarding the air carrier’s accounting of the fees must be audited by an independent certified public accountant.

(b) All documentation, including the accountant’s work papers, must be available for review.

(2) Remits the computed amount of Air Carrier Fees to TSA on a monthly basis by the last business day of the following month (e.g., fees imposed for the month of May are due by the last business day of June.)

TSA Financial Management Manual March 19, 2010

5. PROCEDURES

A. Budget Formulation and Appropr iation of Funds

(1) Establishing the Air Carrier Fee

(a) Under Title 49, Section 44940 of the United State Code TSA is given authority to impose September 11 Security Fees (Passenger Fees) on air carriers. The fees are collected by the direct air carriers, who must remit the fees to TSA on a monthly basis. It also gives TSA the authority to charge airlines an Aviation Security Infrastructure Fee (Air Carrier Fee) to the extent that the Passenger Fee is insufficient to cover TSA's costs for aviation security.

(b) The Passenger and Air Carrier Fees are to be credited as offsetting collections to the appropriation which finances the activities and services for which the fee is imposed.

(c) The sum appropriated to TSA for Aviation Security shall be reduced on a dollar for dollar basis upon the receipt of the offsetting collections.

(2) Forecasting the Annual Fee Revenue

(a) The Office of Revenue forecasts the annual revenue from Air Carrier Fees.1

(b) The Office of Revenue provides the forecasted amount of collections to OBP for inclusion in the annual TSA budget request.

(3) Recording Direct Appropriations

(a) OBP notifies the FCPSB when TSA receives its direct appropriation to record the appropriations realized, as provided in TSA’s Treasury Warrants. OBP provides all supporting documents necessary to ensure FCPSB properly records the appropriations in CAS.

(b) FCPSB notifies OBP that the appropriations are entered into CAS.

(c) OBP reviews the entries to verify that the entries are correct.

Budgetary Entry:

To record appropriations realized

Account Description Debit Credit

41192 Other Appropriations Realized XX

4450 Unapportioned Authority XX

1 ATSA required TSA to determine a statutory cap for the ASIF in the aggregate equal to the total amount air carriers had paid for passenger and property screening during calendar 2000, which was calculated to be $344 Million.

2 Only 4-digit USSGL accounts are shown in these illustrative journal entries. CAS employs an 8-digit general ledger account number.

TSA Financial Management Manual March 19, 2010

Proprietary Entry:

To record appropriations realized (upon receipt of Treasury Warrant)

Account Description Debit Credit

1010 Fund Balance with Treasury XX

3101 Unexpended Appropriations - Appropriations Received XX

(4) Recording Anticipated Collections

(a) In addition to its direct appropriation, TSA receives authority for offsetting collections.

(b) Anticipated collections are recorded for the anticipated annual revenue from Air Carrier Fees, with the amount recorded based on the forecast by the Office of Revenue included in the TSA budget request and reported on the SF 132, Apportionment and Reapportionment Schedule.

(c) TSA allocates funds based on its direct appropriation and TSA must return direct appropriations to the extent of actual collections.

(i.) TSA cannot concurrently allocate both direct appropriations and anticipated collections.

(ii.) TSA does not allot, sub-allot, or allocate Passenger or Air Carrier fees, but records anticipated collections as a contra-resource in USSGL 4395.

(iii.) OBP notifies the OFM FCPSB of the amount to record as anticipated collections, and verifies the amounts posted to CAS are correct.

Budgetary Entry To record anticipated collection of passenger fees

Account Description Debit Credit

4060 Anticipated Collections From Non-Federal Sources XX

4395 Authority Unavailable for Obligation Pursuant to Public Law - Temporary XX

Proprietary Entry

No proprietary entry is recorded for anticipated collections of non-federal revenue (receivables from the public) until actually received.

TSA Financial Management Manual March 19, 2010

(5) Recording Apportionment of Funds

(a) OBP coordinates with FCPSB to post the apportionment of directly appropriated funds received by TSA upon notice of OMB’s subsequent apportionment to TSA (via the SF 132).

Budgetary Entry To record OMB apportionment of direct appropriations to TSA

Account Description Debit Credit

4450 Unapportioned Authority XX

4510 Apportionments XX

Proprietary Entry

None

B. Establishing Accounts Receivable

(1) Recognition of Accounts Receivable

(a) The ATSA allows TSA to assess the Air Carrier Fee to airlines based on the costs each airline incurred during the calendar year 2000 to provide passenger and baggage screening services that have been taken over by TSA.

(b) The monthly amount due for each air carrier is one-twelfth of its costs incurred during the calendar year 2000.

(2) Recording Receivables

(a) TSA currently does not invoice the airlines for the Air Carrier Fees, rather TSA monitors payments submitted and compares the amounts submitted to the amounts due.

(b) Upon receipt of collections, an account receivable is established in CAS and immediately liquidated.

(c) TSA only records bad debt expense for air carriers in bankruptcy.

(i.) Once TSA receives a notice of bankruptcy filing, an allowance for doubtful accounts is booked.

(ii.) Upon finalization and execution of the court settlement, TSA will record any payment received in the settlement and write-off any uncollectible amounts.

TSA Financial Management Manual March 19, 2010

(3) Financial Statement Accrual

(a) The Office of Revenue maintains an account history for each air carrier and calculates a quarterly accrual based on the forecasted Air Carrier Fees on the last day of each quarter.

(b) The accrual is calculated by adding the unpaid Air Carrier Fees through the reporting period and the Office of Revenue provides the draft quarterly accrual to the Accounting Branch.

(c) The Accounting Branch reviews the quarterly accrual spreadsheet against historical accrual information and performs a variance analysis to compare the current accrual to the prior accrual, resolving any questions and/or discrepancies with the Office of Revenue.

(d) The Accounting Branch creates an accrual spreadsheet and reversing general ledger entry to record accrued revenue, and an allowance for loss at the end of each quarter.

(i.) The allowance is calculated as any accounts receivable more than two (2) years old.

(ii.) The Accounting Branch submits entry to Financial Statements and Reports Branch (FSRB). FSRB forwards the general ledger journal voucher and supporting documentation to FINCEN who posts the transaction in CAS.

Budgetary Entry

None

Proprietary Entry (reversed every month) To record passenger fees accrual

Account Description Debit Credit

1310 Accounts Receivable XX

5900 Other Revenue XX

6720 Bad Debt Expense XX

1319 Allowance for Loss on Accounts Receivable XX

C. Collecting And Posting The Passenger Fees

(1) Monthly, each air carrier remits Air Carrier Fees to TSA via FEDWIRE, Pay.gov, or a check to the TSA Lockbox.

TSA Financial Management Manual March 19, 2010

(a) Upon receipt, FINCEN posts daily deposits of Passenger Fees to TSA’s budget clearing account “70F3875”.

(b) On a daily basis, the Office of Revenue retrieves deposit information from the various Treasury systems (CA$HLINK II, Pay.Gov and ECP) and prepares a spreadsheet identifying the individual customer accounts for deposits received.

(2) FINCEN uses the spreadsheet provided by the Office of Revenue to credit payments originally posted to the budget clearing account to the correct customer account.

Budgetary Entry To record collected fees

Account Description Debit Credit

4260 Actual Collections of “governmental-type” Fees XX

4060 Anticipated Collections From Non-Federal Sources XX

Proprietary Entry

To record receipt of fees

Account Description Debit Credit

1310 Accounts Receivable XX

5900 Other Revenue XX

1010 Fund Balance with Treasury XX

(5900)

Accounts Receivable (or Other Revenue if no receivable was previously established) XX

If the air carrier does not submit a monthly remittance, the Office of Revenue may establish an account receivable and pursue collection.

(a) Interest fees, penalty fees, and an administrative fee may be assessed accordingly.

(b) Continued non-response by the air carrier may result in the assessment of a civil penalty.

D. Aging, Demand, And Refer ral to Treasury Of Delinquent Accounts Receivable

(1) Managing TSA’s Outstanding Accounts Receivable

(a) The Office of Revenue manages TSA’s outstanding accounts receivable related to Aviation Security Infrastructure Fees.

TSA Financial Management Manual March 19, 2010

(b) It is imperative each account receivable be reviewed monthly and moved accordingly through the aging process.

(c) The following table outlines the aging process:

Timeframe After Remittance is Due

Account Receivable Status

TSA Actions

Day 30 Non-delinquent account Last day for air carrier to remit payment before an administrative fee and interest fees are assessed.

Day 31 Delinquent account First demand letter sent.

• Administrative fee assessed.

• Interest fees begin accruing. A receivable account must be established for interest earned but not received for the accounting period.

Day 60 Delinquent account Second demand letter sent.

Day 90 Delinquent account Penalty fee assessed.

Day 181 Delinquent account Delinquent receivable referred to Treasury.32

23 In addition to any collection activities, the Office of Revenue also works with the Department of Transportation

Carrier Fitness Organization to pursue the pulling of operating certificates prior to the referral to Treasury. This effort is worked in conjunction with the other federal agencies that collect fees from air carriers (e.g., DHS Customs & Border Protection, USDA Animal & Plant Health Inspection Service).

(2) Demand Letter

(a) A demand letter requesting remittance of amounts due must be issued within 5 workdays after the account receivable becomes delinquent.

(b) The demand letter is mailed using an express delivery service and the receipt of delivery and signature option should be used to confirm the air carrier received the demand letter.

(c) The demand letter, at a minimum, provides the following information:

(i.) The amount due.

(ii.) A description of the amount due.

(iii.) When any penalty, administrative and interest fees will begin accruing.

(iv.) The amount of the administrative fee and the rate of the interest and penalty fees.

(v.) Date remittance must be made by in order to avoid additional penalty, administrative, and interest fees.

(vi.) Address of where to submit the remittance.

TSA Financial Management Manual March 19, 2010

(vii.) An Office of Revenue point of contact.

(3) Referral of Debt to Treasury

(a) As exhibited in the table above, at the 181-day delinquency point, the delinquent account receivable must be referred to Treasury.

(b) Claims subject to bankruptcy petitions are an exception and must be coordinated with the Department of Justice.

(c) Treasury’s standard collection actions include:

(i.) Issuing a demand letter under Treasury letterhead.

(ii.) Contacting the debtor by telephone.

(iii.) Credit bureau reporting.

(iv.) Utilizing the Treasury Offset Program.

(v.) Referring the debt to a private collection agency.

(vi.) Referring the debt to the U.S. Department of Justice.

(d) There are specific guidelines the Office of Revenue must follow in order to refer a debt to the Treasury, which are detailed in the Treasury’s Cross-Servicing Implementation Guide.

(4) Waiver of Interest Fees

Interest fees may be waived on a case-by case basis when the CFO determines collection would be against equity and good conscience or not in the best interest of the U.S. Government.

(5) Posting of Remitted Interest, Penalty and Administrative Fees – If a payment is received on a delinquent account receivable that includes assessed interest, penalties, or administrative fees, the monies remitted are first applied to any penalty fees, second to the administrative fees, third to interest fees, and last to the principal.

(a) Penalty fees are posted to Treasury Receipt Account 1099 – Fines, Penalties, and Forfeitures, Not Otherwise Classified.

(b) Administrative fees are posted to Treasury Receipt Account 1099 – Fines, Penalties, and Forfeitures, Not Otherwise Classified.

(c) Interest fees are posted to Treasury Receipt Account 3220 – General Fund Proprietary Receipts, Not Otherwise Classified, All Other.

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TSA Financial Management Manual March 19, 2010

E. Appropr iation Reduction and Transfer r ing Funds to Treasury

(1) Congress has provided direct appropriations to cover the entire budgeted cost of TSA’s civil aviation security efforts, with the requirement that each year TSA must return an amount of the direct appropriations equal to the total Passenger and Air Carrier Fees collected for the year of the appropriation. (Note that Passenger Fees are addressed in a separate chapter.)

(2) TSA remits collections for Passenger and Air Carrier Fees to Treasury through a quarterly reduction of the appropriation. The quarterly reduction process encompasses the activities associated with the calculation, posting, and communication of the amount returned to Treasury.

(3) On a quarterly basis, the Accounting Branch produces general ledger reports showing the fees collected and receivables outstanding.

(a) These reports are compared with reports on collections and receivables produced by the Office of the Revenue and any differences are researched and resolved; the Accounting Branch prepares any correcting journal entries that are necessary.

(b) Once the general ledger is updated, the Accounting Branch contacts the Office of Revenue to confirm the reconciled collections for Air Carrier Fees and forwards the dollar amount to be returned to Treasury to the OFM Accounting Branch.

(i.) The OFM Accounting Branch prepares a letter to Treasury informing them of the amount to withdraw from the Aviation Security appropriation and submits the letter with the signature of the TSA CFO.

(ii.) Treasury provides the OFM Accounting Branch with a warrant for the reduction in budgetary resources.

(iii.) The OFM Accounting Branch communicates the amount to the OFM FCPSB for input into CAS, and to the TSA CFO, Office of Revenue, FSRB, and OBP to update their records.

Budgetary Entry To record appropriations returned to Treasury

Account Description Debit Credit

4395 Authority Unavailable for Obligation Pursuant to Public Law - Temporary XX

4119 Other Appropriations Realized XX https://ishare.tsa.dhs.gov/Offices/FinanceAdmin/CFO/Pages/OFM/FMM.aspx

TSA Financial Management Manual March 19, 2010

Proprietary Entry To record fund balance (unexpended appropriations) returned to Treasury

Account Description Debit Credit

3101 Unexpended Appropriations - Appropriations Received XX

1010 Fund Balance with Treasury XX

(4) TSA’s revenues from Passenger and Air Carrier Fees are not sufficient to fund its aviation security operations, Congress provides a direct appropriation to cover the entire TSA budget for this function.

(a) To ensure program offices are not prohibited from incurring obligations, and subsequently from performing their vital role in aviation security, TSA allocates the full amount of TSA’s direct appropriation (subject to OMB’s apportionment) on a quarterly basis.

(b) Since all obligations and expenditures for aviation security are recorded in CAS against direct appropriations, TSA is realizing appropriations used with each expenditure.

(i.) TSA records some expenditures against direct appropriations that are actually funded by offsetting collections from Passenger and Air Carrier Fees.

(ii.) This understates TSA’s reported unexpended appropriations (USSGL 3100) and overstates its cumulative results of operations (USSGL 3310).

(iii.) To correct this, an entry is posted with the return of funds to Treasury to reverse the expended appropriations in the same amount that was returned to Treasury.

To reverse expended appropriations for costs funded by offsetting collections

Account Description Debit Credit

5700 Expended Appropriations XX

3107 Unexpended Appropriations - Used XX