OMB sidelines two rules on interagency transactions

The Office of Management and Budget temporarily set aside two business rules related to how agencies make payments and conduct transactions with each other because the rules caused unintended confusion.

Under the temporary waiver, agencies will not make advance payments for service orders from other agencies unless required by law. Also, agencies may provide advance payments for goods only if the order exceeds $1 million or if the law requires it, said Clay Johnson, OMB deputy director for management, in a memo this week.

The Chief Financial Officers’ Council is reviewing and may recommend expanding the Business Rules for Intragovernmental Transactions, which provide standard processing and recording of transactions between agencies, he said. The business rules aim to help agencies better track the money they spend among each other.

Accounting for transactions between agencies has been a major weakness across government.

“Standardizing such processes will facilitate the reconciliation of intragovernmental balances and place the federal government one step closer to achieving our goal of a clean opinion on U.S. Consolidated Financial Statement,” Johnson said, referring to the fiscal year-end statement for the whole government.

The two cited rules have caused confusion related to reimbursable activity based on the Economy Act, the Clinger-Cohen Act and with the interagency funding of joint projects and initiatives.

OMB established the Business Rules for Intragovernmental Transactions in 2002 to better reconcile and record those types of transactions.

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