FMM 2.12.10 - Alien Flight Student Fees.pdf

TSA Financial Management Manual March 9, 2009

Part 2 – Chapter 12, Section 10 1

ALIEN FLIGHT STUDENT PROGRAM FEES

1. PURPOSE

The purpose of this section is to provide instructions on the proper accounting and reporting of fee collections in support of the Alien Flight Student Program (AFSP).

The AFSP conducts security threat assessments for non-U.S. citizens and foreign nationals seeking flight training in the United States. Prior to obtaining flight training, non-U.S. citizens must apply online through the AFSP website and provide fingerprints, biographical information, security documents including passport copies, and specific information about their desired training events. The AFSP processes candidate training request applications using four different categories distinguished by the type of training requested. An application fee of $130.00 is required for the security threat assessment.

2. POLICY REFERENCE

49 United States Code (USC) 44939 – Requires background checks on foreign pilots seeking flight training from U.S. flight schools.

49 Code of Federal Regulations (CFR) 1552.23 – Regulations detailing security awareness training requirements for flight school employees.

Debt Collection Improvement Act of 1996, Public Law Number 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.

Chief Financial Officers Act of 1990 (CFO Act), Public Law Number 101-576, 104 Stat. 2838 – requires agency CFOs to review, on a biennial basis, fees and other charges imposed for services and things of value the agency provides, and make recommendations on revising the charges to reflect costs incurred by the agency in providing those services and things of value.

31 CFR Part 901 – outlines the actions an agency must follow regarding debt collection actions, debt reporting, penalties and administrative fees, and installment repayment agreements.

31 CFR Part 210 – governs all entries and entry data originated or received by an agency through the Automated Clearing House (ACH) network.

Office of Management and Budget (OMB) Circular A-25, Transmittal

Memorandum #1, User Charges (July 8, 1993) – establishes Federal policy regarding fees assessed for Government services.

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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 financially liable for illegal or improper payments.

Accounts Receivable – An umbrella term for amounts owed to the U.S.

Government by an individual, government agency, organization, or other entity.

A receivable should be recognized when a Federal entity establishes a claim to cash or other assets against other entities, either based on legal provisions, or goods or services provided. If the exact amount is unknown, a reasonable estimate should be made. [SFFAS 1, ¶41 as amended by SFFAS 7, ¶53.] o Receivables with the Public – These are claims by TSA against public and private entities, domestic or foreign individuals, and all organizations outside the U.S. Government.

o Intragovernmental Receivables – These are claims by TSA against another

Federal entity. Intragovernmental receivables are never considered delinquent because the U.S. Government does not assess interest, penalties, or administrative fees against itself.

Automated Clearing House (ACH) – A nationwide electronic funds transfer system governed by the National Automated Clearing House Association

(NACHA) operating rules, approved by the Federal Reserve, 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.

Candidate – An alien or other individual designated by TSA who applies for flight training. Alien is defined as any person not a citizen or national of the United

States, as mandated at 8 U.S.C. 1101(a)(3). Section 612 of Vision 100–Century of Aviation Reauthorization Act prohibits flight schools from providing flight training to aliens or other individuals designated by the Secretary of Homeland

Security unless the candidate first provides the Secretary with certain identifying information, and the Secretary has not determined that the candidate is a threat to aviation or national security.

CA$HLINK – An electronic system used to manage the collection of U.S.

Government funds and to provide deposit information to Federal agencies.

CA$HLINK links Federal agencies, Financial Institutions, the Federal Reserve

Banks, and Treasury fund managers through a secure electronic network.

Part 2 – Chapter 12, Section 10 3

Clearing Accounts – 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 Budget clearing account _F3875 is used to temporarily credit unclassified transactions from the public until the funds can be reclassified to the correct account.

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

Core Accounting System (CAS) – The TSA general ledger accounting system.

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.

FINCEN – U.S. Coast Guard Finance Center; the TSA accounting service provider.

Flight Training Provider – Individual training providers, training centers, certificated carriers, and flight schools which provide flight training in the operation of aircraft, including those located in countries outside the United

States; if they provide training leading to a U.S. license, certification, or rating.

Intra-Governmental Payment and Collection System (IPAC) – A Treasury application that facilitates the intra-governmental transfer of funds, with descriptive data from one Federal agency to another.

Pay.gov – A web based portal developed by the Department of 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 saving or checking account.

Revenue – Inflows of resources arising from either exchange transactions (earned revenue) or nonexchange transactions (unearned revenue).

o Exchange Revenue – Inflows of resources to a governmental entity that it has earned. They arise from exchange transactions, that occur when each party to the transaction sacrifices value and receives value in return (i.e., when goods or services are exchanged).

o Nonexchange Revenue – Inflows of resources to the U.S. Government that it demands (e.g., taxes, duties, fines, and penalties) or that it receives by donations.

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Security Threat Assessment – An assessment made by TSA to determine if a candidate is a threat to aviation or national security, and can be prohibited from receiving flight training. The first step is collecting information for a name-based threat assessment by running names through law enforcement, immigration, terrorist-related, and intelligence data sources both classified and unclassified. In addition to the use of government databases, TSA authenticates the identity of the flight-training candidate through the use of commercial data to reduce the risk of fraud and inhibit identity theft. The second step is a fingerprint-based check of appropriate law enforcement, intelligence, immigration, and terrorist-related databases.

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

USSGL – U.S. Government Standard General Ledger; the chart of accounts established by Treasury for use by Federal agencies. It incorporates a basic 4-digit USSGL account plus applicable attribute domain values that agencies must capture at the transaction level. The USSGL consists of both proprietary and budgetary accounts, which are self-balancing (total debits equal total credits).

4. RESPONSIBILITIES

The accurate accounting of AFSP fees involves the coordinated efforts of TSA‟s

Office of Budget and Performance (OBP), Office of Revenue, Office of Financial

Management (OFM), Transportation Threat Assessment and Credentialing (TTAC) office, and FINCEN. Since each entity acts as an accountable official, it is important that each accomplishes its financial stewardship responsibilities.

OBP is responsible for apportionment, budget formulation and budget execution, including the timely allocation of budgetary authority to TSA program activities when fees are collected, and identifies mandatory appropriation codes in CAS.

The Office of Revenue is responsible for notifying TTAC when AFSP candidates remit the AFSP fees, ensuring the timely and accurate posting of collected fees, and biennial analysis of the AFSP fee structure to ensure it reflects the true costs incurred by TSA.

The OFM Accounting Branch has oversight responsibility for ensuring the timely and accurate posting of the remitted AFSP fees and reconciling fees collected between the TSA general ledger and any subsidiary systems. In addition, the

OFM Accounting Branch is responsible for coordinating with the Office of

Revenue and FINCEN to ensure the accurate posting of any unidentified remittance amounts.

The OFM Financial Statements and Reports Branch is responsible for preparing the quarterly accounts receivable accrual for the AFSP fees to be included in the quarterly financial statements. This is necessary only if uncollected fees earned are considered material.

Part 2 – Chapter 12, Section 10 5

The OFM Financial Systems Branch is responsible for managing the technical operations of the TSA accounting system.

The OFM Funds Control and Program Support Branch is responsible for the accurate posting of budget execution transactions in the TSA accounting system.

TTAC is responsible for conducting name-based and fingerprint-based checks on individuals with Security Identification Display Area (SIDA) access, Sterile Area

Workers, and other individuals holding or seeking airport badges or credentials.

TTAC is responsible for ensuring AFSP candidates remit the AFSP fees before candidates are approved for flight training.

FINCEN is responsible for posting the receipt of the AFSP fees into the TSA financial system after coordinating any unresolved issues with the Office of

Revenue and the OFM Accounting Branch.

5. PROCEDURES

Within TSA, the key processes for managing the AFSP fees are listed below:

Budget formulation and apportionment of funds

Establishing accounts receivable

Collecting and posting AFSP fees

Budget execution: apportionment, allotment, sub-allotment, and allocation of funds

Transferring collected FBI background check fees to the U.S. Department of

Justice

A. Budget Formulation and Appropriation of Funds:

(1) Establishing the AFSP Fee: The fee is based on the recurring costs that TSA incurs to perform a security threat assessment on each applicant. This fee does not include start-up costs.

(a) Calculating the Fee: The initial estimated cost per applicant is $130.00.

The applicant pays $130.00 at time of application, which consists of a threat assessment fee

($112.75) and a FBI background check fee ($17.25). As the costs for each applicant are the same, it is the same for each applicant category.

(b) Fee Adjustments: Pursuant to the CFO Act and OMB

Circular A–25, TSA analyzes the fee structure every two years. The AFSP application fee will be adjusted, accordingly, to ensure TSA recovers its full cost. There are a variety of options available for fingerprint collection and transmission of data to candidates. The costs and method of

See 49 Code of Federal Regulations 1552.5.

Part 2 – Chapter 12, Section 10 6 payment for these vary by location and are separate from, and in addition to, the TSA fee. Candidates or flight schools are required to pay this cost directly to the fingerprint collector, not to TSA.

(2) Forecasting the Annual Fee Revenue:

(a) The Office of Revenue is responsible for forecasting the annual revenue from candidate fees.

(b) The forecasted amount of collections is provided to the OBP for inclusion in the annual TSA budget request.

(3) Recording Direct Appropriations: The AFSP does not receive direct appropriations.

(4) Reporting Mandatory Appropriations: Congress has designated the AFSP as a mandatory spending account. OMB and Treasury require agencies to report mandatory appropriations separate from discretionary appropriations, even when reporting under the same

Treasury Appropriation Fund Symbols (TAFS). Prior to the fiscal year, or upon enactment of a new TSA appropriation law, OBP provides OFM‟s Financial Statements and Reports Branch the

CAS appropriation codes designated to capture spending for all mandatory appropriations active for the fiscal year.

(5) Recording Anticipated Collections:

(a) The OFM Funds Control and Program Support Branch records the anticipated non-federal collections and apportionment of

AFSP fees based on the SF 132, Apportionment and

Reapportionment Schedule, and supporting schedules provided by the OBP.

(b) This occurs for every SF 132 approved by the OMB during the fiscal year. OBP notifies the OFM Funds Control and

Program Support Branch of the amount to record as anticipated collections, and verifies the amounts posted to

CAS are correct. TSA offices may not incur obligations against these anticipated resources, since they are from non-federal sources.

Part 2 – Chapter 12, Section 10 7

Budgetary Entry

To record anticipated collection of AFSP fees

Account Description Debit Credit

Anticipated Collections From Non-

Federal Sources

XX

4450 Unapportioned Authority XX

Proprietary Entry

None

(6) Recording Apportionment of Funds:

(a) Every month the OFM Funds Control and Program Support

Branch prepares an analysis of actual fee collections and provides it to OBP. The Office of Revenue notifies the OBP on a monthly basis of collections received.

(b) From this information OBP prepares a quarterly apportionment request (SF 132) and submits it through DHS to OMB. OBP receives the OMB approved apportionment and provides it to the OFM Funds Control and Program

Support Branch, which enters the new apportionment into

CAS.

Budgetary Entry

To record OMB apportionment to TSA

Account Description Debit Credit

4450 Unapportioned Authority XX

Apportionments - Anticipated

Resources – Programs Subject to

Apportionment

(c) Anticipated resources from non-federal sources are not available for obligation, and may not be allocated to TSA staff and program offices until collected.

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

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B. Establishing Accounts Receivable:

(1) Recognition of Accounts Receivable:

(a) Candidates must obtain AFSP approval for the following three flight training events:

i) A candidate's initial pilot's certificate, including a private, recreational, or sport pilot certificate.

ii) A candidate's multi-engine rating.

iii) A candidate's instrument rating.

Candidates must apply and complete one of the three training events listed above before proceeding onto the next. All three training events require separate registration and fee payments.

(b) Candidates log onto the AFSP Candidate website to submit their background information and flight training request(s).

Candidates must create an AFSP account and submit a training request with the required documentation. Once a

Flight Training Provider has accepted a candidate's training request, payment instructions are sent via an email from the

TTAC automated system. Payment is submitted through the candidate‟s online account profile. Once payment is made, the candidate receives fingerprint instructions via email and a security threat assessment is initiated.

(c) Candidates pay for their security threat assessment through the

AFSP Candidate website with a credit card. After a training request is validated by the Flight Training Provider, the candidate logs into the AFSP account and links to the Pay.gov website to pay via credit card, which does not need to be in the candidate's name. Once payment is made, the candidate receives confirmation of payment.

(2) Recording Receivables: TSA immediately incurs costs associated with performing the security threat assessment. TSA begins a candidate‟s security threat assessment when the agency receives all of the required documentation, including the candidate‟s fingerprints (when required) and the AFSP fee. As TSA receives the fees in advance of conducting the security threat assessment, it does not record a receivable for individual candidates. Normal assessment processing time takes several weeks.

C. Collecting and Posting the AFSP Fees:

(1) The Office of Revenue notifies the following offices once fees have been collected:

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TTAC, which initiates the candidate‟s security threat assessment

OBP, which allocates budget authority resulting from fees collected

FINCEN, which records the collection of „governmental-type‟ fees from the public and the resulting revenue

(a) Upon receipt, FINCEN posts daily deposits of AFSP fees to

TSA‟s budget clearing account “70F3875.” On a daily basis, the Office of Revenue retrieves deposit information from the various Treasury systems (CA$HLINK, Pay.Gov, and ECP) and prepares a spreadsheet identifying the individual customer accounts from deposits received.

(b) 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. Funds collected for the FBI segment of the AFSP fee are recorded separately from the other components of the AFSP fee.

To record the collection of governmental-type fees

Account Description Debit Credit

4260 Actual Collections of “governmental-type” Fees XX

Anticipated Collections From Non-Federal

Sources

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)

D. Budget Execution: Allotment, Sub-Allotment, and Allocation of

Funds:

(1) The Anti-Deficiency Act prohibits an accountable official from authorizing an expenditure or obligation of funds in excess of amounts available in an appropriation, apportionment, allotment, or other agency subdivision of funds. Allotments and sub-allotments are clearly subject to the provisions of the Anti-Deficiency Act.

Although it is possible that agency allocations/allowances may not

Part 2 – Chapter 12, Section 10 10 be subject to the Anti-Deficiency Act, TSA policy prohibits any commitments, obligations, and/or expenditures before budget authority is allocated by OBP.

(2) Based on the quarterly apportionment approved by OMB, the monthly notice from the Office of the Revenue, and the monthly analysis of fee collections by the OFM Funds Control and Program

Support Branch, OBP prepares monthly allotments and sub-allotments which are distributed to the TSA program offices.

Allotments and sub-allotments are based on the previous month‟s actual fiscal year collections to date (e.g. the allotment for April

2007 would be based on actual collections from October 2006 through March 2007), not to exceed the latest OMB apportionment.

OBP further distributes budget authority from the TSA program offices to Managing Unit segments via allocations/allowances.

(3) Within CAS, sub-allotments are identified by the combination of the

8-digit CAS general ledger account plus the following accounting code data elements: Appropriation Code, Budget Year, Program/Project, Funding Organization, Activity, and Sub-Activity.

TSA allocations in CAS are identified by the 8-digit CAS general ledger account plus the following accounting code data elements:

Appropriation Code, Budget Year, Program/Project, Activity, Sub-

Activity, Funding Organization and Managing Unit.

To record TSA allotment

Account Description Debit Credit

45900000 Apportionments Unavailable - Anticipated Resources XX

46100100 Allotments - Direct TSA XX

To record TSA sub-allotment

Account Description Debit Credit

46100100 Allotments - Direct TSA XX

46100200 Sub Allotments - Direct TSA XX

To record TSA allocation/allowance

Account Description Debit Credit

46100200 Sub Allotments - Direct TSA XX

46100000 Allotments - Realized Resources XX

E. Transferring FBI Fees to U.S. Department of Justice:

(1) On a daily basis the Office of Revenue calculates the portion of

AFSP fee collections related to the FBI background check and provides this figure to the TTAC office, the OBP, the OFM

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Accounting Branch, and FINCEN. FINCEN records revenue from fees collected for FBI background checks separately from the other fee revenue using a unique revenue activity code.

(2) TTAC has an interagency agreement (IAA) with FBI for receiving fingerprint submissions and performing background checks for all

AFSP applicants. TTAC periodically modifies the IAA to extend the period of performance and provide incremental funding as fees are collected. TTAC obligates funding for the IAA after OBP allocates resources from fee revenue collected. The line of accounting in the

IAA is used to record the payment of FBI invoices and includes the valid revenue activity code for the program (AFSP = RE0FB6).

To record obligation of funds for IAA with FBI

Account Description Debit Credit

4610 Allotments - Realized Resources XX

4801 Undelivered Orders - Obligations, Unpaid XX

(3) On a monthly basis, FBI presents an invoice to TTAC for all background checks performed on AFSP applicants during the billing period. The TTAC office verifies that all submitted charges from the

FBI‟s monthly invoice match the TTAC database of candidates for the same period and instructs FINCEN to execute a transfer of funds to the Federal Bureau of Investigation via the Department of Justice for its portion of fees collected.

To record approval of FBI invoice for payment

Account Description Debit Credit

4801 Undelivered Orders - Obligations, Unpaid XX

4901 Delivered Orders - Obligations, Unpaid XX

To record approval of FBI invoice for payment

Account Description Debit Credit

6100 Operating Expenses/Program Costs XX

2110 Accounts Payable XX

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(4) Funds are transferred via the Intra-Governmental Payment and

Collection (IPAC) process. FINCEN then posts the transfer of funds to CAS.

To record payment of FBI invoice scheduled with Treasury

Account Description Debit Credit

2110 Accounts Payable XX

2120 Disbursements in Transit XX

To record Treasury confirmation of payment for FBI invoice

Account Description Debit Credit

4901 Delivered Orders - Obligations, Unpaid XX

4902 Delivered Orders - Obligations, Paid XX

To record Treasury confirmation of payment for FBI invoice

Account Description Debit Credit

2120 Disbursements in Transit XX

1010 Fund Balance With Treasury XX