Quarterly Review and Validation of Undelivered Orders (UDOs)

TABLE OF CONTENTS

OVERVIEW

12.1 What is the purpose of this chapter? This chapter establishes U.S. Fish and Wildlife Service (Service) policy and procedures for the quarterly review and validation of undelivered orders (UDO) in the Financial and Business Management System (FBMS).

12.2 What is the scope of this chapter? This chapter applies to all UDOs posted in FBMS.

12.3 What is the overall policy? To ensure our financial records are accurate and transactions are properly supported as part of the annual financial statement audit, each Region and program must:

A. Perform a quarterly review of its UDOs and, where appropriate, de-obligate; and

B. Certify compliance with the Department of the Interior (Department) and Service policy for the second and third quarters of the fiscal year (FY).

12.4 What are the authorities for this chapter?

A. Agency Agreements (The Economy Act) (31 U.S.C. 1535).

B. Closeout (2 CFR Part 200.344).

C. Closeout by the Office Administering the Contract (Federal Acquisition Regulation (FAR) 4.804-1).

D. Contract Modifications (FAR Part 43).

E. Department’s Office of Financial Management, Financial Management Handbook, Chapter 3, Review and Validation of Dormant Obligations Policy.

F. Documentary Evidence Requirement for Government Obligations (31 U.S.C. 1501).

G. Limitations on Expending and Obligating Amounts (31 U.S.C. 1341).

H. Limitation on Voluntary Services (31 U.S.C. 1342).

I. Office of Management and Budget Circular No. A-11, Preparation, Submission, and Execution of the Budget.

J. Principles of Federal Appropriations Law (i.e., the Red Book), U.S. Government Accountability Office.

K. Prohibited Obligations and Expenditures (31 U.S.C. 1517).

12.5 What terms do you need to know to understand this chapter?

A. Antideficiency Act (ADA) is a Federal statute that prohibits spending in advance of an appropriation being apportioned or in violation of the purpose and amounts (see 260 FW 1).

B. Bona fide need is the requirement that agencies only use appropriated funds for goods and services for which a bona fide need arises during the period of that appropriation’s availability for obligation.

C. Certification is attesting that all UDOs under the signatory’s responsibility comply with Departmental and Service policy, were reviewed and validated, and that appropriate action has been taken (certification is required for second and third quarter UDO reviews only).

D. Closed/canceled accounts are accounts in which any remaining unexpended balances, both obligated and unobligated, are closed or canceled, returned to the general fund of the U.S. Department of the Treasury (Treasury), and are no longer available for any purpose (see 260 FW 13).

E. Commitments are budgetary and accounting actions taken to authorize and reserve funds for future obligations in the current FY. This administrative reservation of allotment and resources authority is based on a documented anticipated future expenditure for known liabilities, such as payroll or contingent liabilities; an approved requisition, procurement request, or authorization to execute a contract; or other written evidence that authorizes the future creation of obligations without further recourse to the official responsible for certifying the availability of the allotment and resources authority. Commitments that are not obligated by the end of the FY are deleted from FBMS.

F. De-obligation is the cancellation, downward adjustment, or deletion of a previously recorded obligation in FBMS. Such adjustments may be attributable to the cancellation of a project or contract, price revisions, corrections of amounts previously recorded, or differences between obligations previously recorded and payments made.

G. Dormant obligations are obligations that are more than 90 calendar days past the period of performance (PoP) end date and have not had activity in the past 120 calendar days.

H. Expired accounts are accounts in which authority to incur obligations has lapsed but from which an agency may pay for existing obligations and liabilities previously incurred, as well as make valid adjustments of such obligations/liabilities (see 260 FW 13).

I. Fiscal year (FY) is any yearly accounting period. The FY for the Federal Government begins on October 1 and ends on September 30. It is designated by the calendar year in which it ends.

J. Justification is the reason or circumstances under which a UDO should remain open.

K. Obligations are legally binding Federal commitments that will result in outlays (e.g., to pay for goods, products, services, studies) immediately or in the future. Budgetary resources must be available before an agency can incur obligations legally. As an agency makes the required payments (i.e., outlays), it liquidates the obligation. Appropriations law usually makes funds available for obligation for one or more FYs, but does not require agencies to spend their funds during those specific years. The actual payments can occur years after the appropriation is obligated.

L. Outlays are payments made (generally through the issuance of checks or electronic fund transfers) to liquidate obligations. Outlays during a FY may be for payment of obligations incurred in prior years or in the same year.

M. Period of availability is the period of time for which appropriations are available for obligation. If funds are not obligated during their period of availability, then the funds expire and are generally unavailable for new obligations (see 260 FW 13).

N. Period of performance (PoP) is the specified timeframe identified in an obligation for delivery of goods or the performance of a service under a contract (see Part 301 of the Service Manual). For grants and cooperative agreements (see Part 515 of the Service Manual) administered under 2 CFR Part 200, the PoP is the total estimated time interval between the start of an initial Federal award and the planned end date, that may include one or more funded portions or budget periods.

O. PRISM is the Department’s contract management system.

P. Undelivered orders (UDO) represent the value of goods and services ordered and obligated in FBMS but not received and that have not been prepaid or advanced funds.

Q. Validation is the process of ensuring that transactions recorded in FBMS are accurate. The goals of the validation process are to ensure the accuracy of posted transactions; to confirm whether the requirements for the product, service, or grant/loan payment still exist; and to initiate follow-through efforts to locate missing liquidations (i.e., outlays or de-obligations).

RESPONSIBILITIES

12.6 Who is responsible for the review and validation of UDOs? See Table 12-1.

Table 12-1: Responsibilities for the Review and Validation of UDOs

TYPES OF UDOS

12.7 What types of UDOs does the Service have? See Table 12-2.

Table 12-2: UDO Types

DOCUMENTATION

12.8 What documentation is required to record a UDO in FBMS? All UDOs must be supported with the appropriate documentation for the obligation to be recorded in FBMS. Typically, documentation includes one or more of the following:

A. A binding agreement between the Service and another entity that:

(1) Is in writing and for a purpose authorized by law,

(2) Identifies the specific goods to be delivered or services to be performed, and

(3) Is executed before the end of the PoP for the obligation.

B. A loan agreement showing the amount and the terms of repayment.

C. An order required by law to be placed with an agency.

D. An order issued under law authorizing purchases without advertising for any of the following conditions:

(1) Sudden unexpected public event,

(2) Perishable subsistence supplies, or

(3) Within specific monetary limits.

E. A grant or subsidy payable from appropriations to pay for or contribute to a payment for a specific amount or formula prescribed by law that is:

(1) Under an agreement authorized by law, or

(2) Under plans approved and authorized by law.

F. Document showing liability that may result from pending litigation.

G. Document showing employment, services provided, or expenses for travel under law.

H. Document showing services provided by public utilities.

I. Document showing other legal liability of the Government against a legally available appropriation or fund.

REVIEW PROCESS

12.9 What is the quarterly UDO review process? See Table 12-3.

Table 12-3: Quarterly UDO Review Process

12.10 What are the procedures for the quarterly UDO reviews?

A. First and fourth quarters. By the close of the quarter:

(1) Review all UDOs on the UDO summary data visualization for validity; and

(2) De-obligate all UDOs marked for de-obligation (e.g., contracts, grants, cooperative agreements, MOs, GSA-leased space costs, interagency and intra-Department agreements, land acquisitions, etc.), including those from a prior review.

B. Second and third quarters. By the assigned due date:

(1) Populate the UDO spreadsheet on the SharePoint site with one of the provided status codes;

(2) Complete the quarterly UDO certification form with certification from the supervising Directorate member;

(3) Retain a file copy of the review for audit purposes, ensuring the report is annotated with the initials of the person conducting the review and the date the review was completed; and

(4) De-obligate all UDOs marked for de-obligation (e.g., contracts, grants, cooperative agreements, MOs, GSA-leased space costs, interagency and intra-Department agreements, land acquisitions, etc.), including those from a prior review.

EXPIRING AND CANCELING ACCOUNTS

12.11 What happens if a UDO contains an expiring account? To have optimum fund utilization, it is imperative to monitor UDOs in expiring resource management accounts. For example, FY 2022/2023 resource management funds will expire on September 30, 2023, and de-obligations processed prior to this date may be reused (i.e., re-spent), while those processed afterwards may not, except in limited circumstances (see 260 FW 13). For de-obligations that require a contract modification, we recommend that you submit a mySupport consultation request earlier in the FY to coordinate these actions.

12.12 What happens if a UDO contains a canceling account?

A. All balances of appropriations must be canceled and returned to Treasury on September 30 of the fifth FY after the period of availability. For example, our 2-year resource management funds for FY 2023/2024 will not cancel until September 30, 2029 (5 years after the second year of availability) (see 260 FW 13).

B. If there is an outstanding UDO prior to an appropriation cancellation date, all invoices must be paid, and the UDO must be closed out prior to the cancellation date.

C. If an outstanding UDO is not closed out prior to an appropriation cancellation date and we have an unpaid invoice, the responsible Service office must use currently available (i.e., unexpired) funding, not to exceed an amount equal to 1 percent of the total current appropriation being charged, or total amount of the appropriation of the closed or canceled account, whichever is less.