Effective immediately, Handbook F-1, Accounting and Reporting Policy, is revised to reflect current Postal Service™ policy.
Handbook F-1, Accounting and Reporting Policy
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2 General Policies
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2-4 Financial Reporting Framework
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2-4.1 Financial Reporting Framework
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2-4.1.2 Finance Numbers
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2-4.1.2.1 Field Units Policy
[Revise 2-4.1.2.1 to read as follows:]
Requests for new finance numbers must have the concurrence, depending upon the point of origin, of the district manager and the vice president of Area Operations. The request providing the justification for a new finance number must be submitted via email with supporting documentation to FNCM FSB for review and concurrence by Revenue and Field Accounting, Headquarters. If Corporate Accounting concurs, the request is forwarded to the chief operating officer (COO) for final approval of the field request. Corporate Accounting will advise the originating requestor or designated contact whether the request is approved or denied.
The district Finance office is authorized to approve requests for change or to create a new four-digit extension to finance numbers except for military units that are approved by Accounting Services.
Requests for a change to a unit ID or a request for a new unit ID must be submitted via email to FNCM FSB. The district Finance office is responsible for monitoring records in the Finance Number Control Master (FNCM) system to ensure unit ID data integrity and preventing financial system processing errors.
2-4.1.3 Chart of Accounts
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2-4.1.3.1 Field Units Policy
[Revise 2-4.1.3.1 to read as follows:]
Although infrequent, field units may request changes to the Legacy Chart of Accounts. Requests for changes must be submitted via email through the area Finance office to FNCM FSB.
2-4.1.3.2 Headquarters Units Policy
[Revise 2-4.1.3.2 to read as follows:]
Legacy Chart of Accounts and OGL Natural Accounts are the responsibility of Corporate Accounting. All Headquarters unit requests for changes in the charts of accounts must be submitted directly via email to FNCM FSB. Corporate Accounting is specifically responsible for the following:
1. Reviewing requests to add, change, or delete from the chart of accounts to determine if the request has sufficient business case merit.
2. Documenting the approval of additions, changes, or deletions.
3. Authorizing additions, changes, or deletions of Legacy and Natural Accounts via an F-8 letter.
2-4.1.4 Account Identifier Codes
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2-4.1.4.1 Field Units Policy
[Revise 2-4.1.4.1 to read as follows:]
All requests for changes to AICs must be forwarded via email through the area Finance office to FNCM FSB. Corporate Accounting will review and approve.
2-4.1.5 Financial Reporting Responsibilities
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[Revise the third paragraph to read as follows:]
Management reports are available through the ADM, and financial statements are available on the Financials page at http://www.usps.com.
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2-4.1.9 Quarterly Reporting
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2-4.1.9.2 Headquarters Units Policy
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[Revise the last paragraph of 2-4.1.9.2 to read as follows:]
Any items that could result in a contingent liability (section 4-2.1.3) or impaired asset (subchapter 3-7) should be reported to Corporate Accounting, Headquarters prior to each quarterly close.
2-4.1.10 Annual Reporting
2-4.1.10.2 Headquarters Units Policy
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[Revise the last paragraph of 2-4.1.10.2 to read as follows:]
Reporting of annual financial data to the U.S. Treasury is the responsibility of Corporate Accounting. The special purpose report required by U.S. Treasury must be prepared by Corporate Accounting, approved by the CFO or their designee, and audited by the OIG.
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2-4.1.13 Journal Entries
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2-4.1.13.2 Headquarters Units Policy
[Revise 2-4.1.13.2 to read as follows:]
Journal entries originated by Corporate Accounting and Accounting Services must be approved by an authorized individual prior to submission into the JEV system. The posting of all journal vouchers to the general ledger must be verified by Accounting Services JEV entry location personnel.
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2-4.3 Disclosure Committee
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2-4.3.2 Headquarters Units Policy
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[Add the following text as the last paragraph of 2-4.3.2 to read as follows:]
The Disclosure Committee is comprised of the following members:
a. Senior Vice President and General Counsel (chairman).
b. Vice President, Controller.
c. Vice President, Finance and Planning.
d. Vice President, Corporate Communications.
e. Vice President, Government Relations and Public Policy.
f. Vice President, Operations.
g. Treasurer.
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2-5 Internal Controls
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2-5.1 Internal Control Principles
[Revise the first paragraph of 2-5.1 to read as follows:]
Overall, accounting practices at field units and Headquarters units are expected to be consistent with the following general, fundamental internal control principles:
a. Proper authorization of transactions.
b. Accurate execution of transactions.
c. Timely recording of transactions.
d. Compliance with established policies and procedures.
e. Reconciliation of balance sheet accounts.
f. Balancing of subsidiary ledgers to general ledger balances.
g. Proper explanation, support, and approval of journal vouchers.
h. Adequate protection and maintenance of accounting records, contracts, and manuals.
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2-5.4 Internal Control Reporting Compliance
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[Revise last paragraph of 2-5.4 to read as follows:]
These reports were required beginning with fiscal year ending September 30, 2010.
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3 Assets
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3-1 Cash and Cash Equivalents
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3-1.1 Operating Cash
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3-1.1.1 Field Units Policy
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3-1.1.1.3 Cash Retained
[Revise the first and second paragraphs of 3-1.1.1.3 to read as follows:]
Field units may retain limited amounts of cash to support daily operations. Overall limits of cash retained calculations are established by Corporate Accounting in coordination with Retail Operations. In addition to individual cash retained amounts, field units that provide retail services may establish a unit cash reserve to supplement the needs of the unit. The unit cash reserve must be assigned to an employee and is to be counted randomly at least once a postal quarter. At any time the unit cash reserve custodian is reassigned, a count must be performed.
The field unit manager must make every practical effort to ensure that supervisory personnel responsible for the unit reserve do not make sales. If a non-bargaining employee also maintains a cash retained credit, the unit cash reserve must be counted in conjunction with the cash retained count. Any portions reassigned to bargaining employees must be counted at least once every postal quarter in conjunction with the cash retained count. Each employee must be afforded the opportunity to be present whenever his or her financial accountability is inventoried or counted.
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3-1.1.1.4 Change Funds
[Revise 3-1.1.1.4 to read as follows:]
To meet operational needs at field units providing retail services, the field unit supervisor with self-service kiosks may request authorization to arrange with the local relationship bank to obtain change funds (i.e., coins and small denomination bills).
3-1.2 Credit and Debit Cards
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3-1.2.1 Field Units Policy
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[Revise the second paragraph of 3-1.2.1 to read as follows:]
All pin-based debit cards and Electronic Benefit Transfer (EBT) cards are accepted as payment at Postal Retail Units for all Postal Service products and services.***
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3-1.5 Money Orders
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3-1.5.2 Headquarters Units Policy
[Revise the second paragraph of 3-1.5.2 to read as follows:]
Accounting Services is responsible for monitoring outstanding (un-cashed) money orders and identifying money orders that are outstanding for more than two years. Each month, Accounting Services is required to record these items as miscellaneous revenue and at the end of each quarter, to request approval from Corporate Accounting for any adjustment of the escheatment account. When requested, these money orders or a replacement commercial check may be reissued to the payee.
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3-1.6 Cash Disbursements
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3-1.6.1 Field Units Policy
[Revise 3-1.6.1 to read as follows:]
When it is required that a field unit process a payment, field units should use the following payment methods in accordance with established hierarchy order of priority; eBuy2, Purchase Card, PS Form 8230 sent to the SIC, and local payments as a last resort.
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3-2.3.2 Headquarters Units Policy
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[Revise the fourth paragraph of 3-2.3.2 to read as follows:]
Accounting Services is authorized to process customer overpayments refunds to customers as identified. Unapplied cash receipts related to accounts receivable must be reviewed by Accounting Services in detail not less than once per month to facilitate timely resolution of all such items. Individual receivable items may be adjusted by Accounting Services for many reasons, including, but not limited to, cases of bankruptcy notification, grievance settlements, or the death of current or former employees. To be processed, accounts receivable adjustments require approvals within the Oracle accounts receivable system based on the dollar value of the adjustment. Additionally, adjustments and credit memos over $5,000 to any individual receivable item must be approved by an Executive and Administrative Schedule (EAS) employee from Accounting Services or Headquarters.
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[Revise the last paragraph of 3-2.3.2 to read as follows:]
Accounting Services is responsible for following the provisions of the Debt Collection Improvement Act (DCIA). This act provides the option of referring delinquent debt to a collection agency and/or the U.S. Treasury Offset Program (TOP).
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3-4 Supplies, Advances, and Prepayments
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3-4.4 Advance Payments (Prepayments)
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[Revise the fourth paragraph of 3-4.4 to read as follows:]
See Management Instruction (MI) FM-610-2010-2, Advance Payments, for instructions about the circumstances under which the Postal Service pays in advance for services or various products.
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3-6 Property and Equipment
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[Revise the second and third paragraphs of 3-6 to read as follows:]
Equipment items which have a service life of more than one year and with an acquisition cost of $3,000 or over and leasehold improvements of $5,000 or over are deemed to be “capital” items and must be recorded as an asset on the general ledger and subject to annual inventory procedures.
All building and land additions, equal to or greater than
$5, 000, are capitalized and recorded as assets on the general ledger.
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3-6.3.3 Depreciation
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3-6.3.3.2 Headquarters Units Policy
[Revise 3-6.3.3.2 to read as follows:]
Most USPS-owned buildings are depreciated over a service life of 40 years. Trailer units and modular buildings have a service life of 10 years. Depreciation is calculated on a straight line basis over the useful life of a building, starting the month following capitalization. At the point in which a building is marked for disposal, any remaining depreciable amount is put on hold. Building improvements are depreciated over the remaining service life of the improved building except for major capital projects. Improvements made to a fully depreciated facility are depreciated over the next 12 months following the month of capitalization. The improvement cost is capitalized by adding to the carrying value of the building.
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3-6.5 Leasehold Improvements
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3-6.5.1 Record Keeping
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3-6.5.1.2 Headquarters Units Policy
[Add a sentence after first paragraph to read as follows:]
***Leasehold improvement asset records must be maintained that adequately identify the leasehold improvements. Leasehold improvement asset records including accumulated amortization are required to be periodically reconciled with their applicable general ledger accounts. Adjustments to the leasehold improvement general ledger accounts must be pre-approved by the appropriate Program Manager or functional manager. Fully depreciated LHIs remain on the books until the USPS exits the leased property at which time they are removed from the accounting records.
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3-6.7 Fully Depreciated Assets
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3-6.7.2 Headquarters Units Policy
[Revise 3-6.7.2 to read as follows:]
Fully depreciated assets including leasehold improvements that remain in service are carried in the financial statements in their respective cost and accumulated depreciation classifications.
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3-7 Impairment of Long-Lived Assets
[Revise 3-7 to read as follows:]
The Postal Service groups long-lived assets at the network level i.e., treats all the long-lived asset types as individual asset groups, and continually evaluates the effectiveness and efficiency of the network. When an asset is marked for disposal and removed from the network, the management evaluates whether the carrying value of the asset is greater than the fair market value. If the carrying value exceeds the fair market value by more than 1 million dollars, an impairment loss is recognized and the building’s carrying value is reduced to the fair market value.
Each department that owns long-lived assets reports impairment losses to Corporate Accounting on an ongoing basis. Quarterly each department confirms that all impairment losses have been identified by approving impairment schedules prepared by Corporate Accounting. On a quarterly basis, Corporate Accounting totals all the impairment losses on facilities which have not met the threshold. If these smaller impairment losses total over 10 million dollars, impairment losses are recognized on an individual facility basis.
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4 Liabilities
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4-1 Compensation and Benefits
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4-1.2 Headquarters Units Policy
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[Revise the second paragraph of 4-1.2 to read as follows:]
Accounting Services is responsible for reviewing and approving the payroll accrual amounts to be recorded at the end of each month. Monthly payroll accrual supporting documentation and the journal entry must be reviewed by Accounting Services prior to the monthly close.
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4-2 Payables and Accrued Expenses
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4-2.1 Trade Payables and Accrued Expenses
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4-2.1.1 Trade Payables
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[Revise last paragraph of 4-2.1.1 to read as follows:]
All invoices submitted for payment must be original, complete, accurate, and the goods or services must have been received. All invoices must be either “certified” or be accompanied by a payment authorization form to be eligible for processing by Accounting Services. Payments should always be made from an invoice and never from a monthly activity statement. Recurring payments must be set up as a contract through the Category Management Center (CMC).
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4-2.2.2 ASC Approval Levels
[Revise 4-2.2.2. to read as follows:]
Accounting Services is authorized to approve payments in US dollars (USD) up to $10 million. Payments above that amount have to be approved by Manager, International Accounting, HQ. Additionally, Accounting Services is authorized to approve foreign currency payments up to the equivalent of $500,000 USD. Foreign currency payments equivalent to more than $500,000 USD are approved by Manager, International Accounting, HQ.
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4-11.2 Monitoring
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4-11.2.1 Field Units Policy
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[Revise the fifth paragraph of 4-11.2.1 to read as follows:]
All returns of saleable stock must be authorized prior to returning the stock to the SDO or SDC under the terms of the return schedule.
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[Revise the seventh paragraph of 4-11.2.1 to read as follows:]
The field Unit manager or supervisor is responsible for ensuring that all applicable stamp stock and cash counts are performed in a timely manner, including:
a. Employee stamp stock credits.
b. Employee cash credits.
c. Unit reserve stock.
d. Unit cash reserve.
e. Retail floor stock.
f. Rural carrier consignment.
h. Contract Postal Unit (CPU) credits.
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4-11.2.2 Headquarters Units Policy
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[Revise second paragraph of 4-11.2.2 to read as follows:]
The Headquarters Customer Asset Fulfillment and the SDC managers are authorized to manage the internal stamp destruction maintained by the SDCs.
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4-11.3 Overage and Shortage
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4-11.3.1 Field Units Policy
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[Revise the second paragraph of 4-11.3.1 to read as follows:]
Field units are required to visually examine sealed packages of stamp stock to verify the quantity. If discrepancies in sealed packages of stamp stock exceed certain authorized levels, the discrepancy must be reported immediately to Headquarters Stamp Manufacturing via email to HQ Stamp Quality Assurance.
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4-11.3.2 Headquarters Units Policy
[Revise 4-11.3.2 to read as follows:]
At a minimum, the Stamp Fulfillment Services (SFS) Center and each SDC must conduct an annual examination of all accountable paper, document the results, and report any discrepancies. Accounting Services records financial adjustments related to a unit’s stock ledger discrepancies. These adjustments are expensed to the corresponding unit finance number.
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4-11.4 Discounts and Revaluation
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4-11.4.2 Headquarters Units Policy
[Revise 4-11.4.2 to read as follows:]
Headquarters Asset Management and Stamp Services and Corporate Licensing are responsible for discounts or revaluation and must properly notify field units through the Postal Bulletin of all authorized changes.
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4-11.5 Stamps for Internal Use
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4-11.5.1 Field Units Policy
[Revise 4-11.5.1 to read as follows:]
The OIG is authorized to requisition stamps and stamped paper for investigative purposes from an SDO or SDC. Postmasters may authorize requisitions of stamps and stamped paper for promotions and presentations.
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4-11.6 Destruction of Stamps
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4-11.6.1 Field Units Policy
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[Revise the second paragraph of 4-11.6.1 to read as follows:]
Stamp stock destruction includes counting, recording, and destroying nonsaleable stamps, stamped paper, and philatelic products. Stamp destruction activities are conducted only at a designated SDO, SDC, or SFS Center unless an alternate location has been approved by the OIG.
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4-11.6.2 Headquarters Units Policy
[Revise 4-11.6.2 to read as follows:]
SDC locations are authorized to maintain ongoing internal stamp destruction activities. These activities are managed by the Headquarters Customer Asset Fulfillment Manager and the SDC manager.
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4-11.7 Money Order Destruction
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4-11.7.1 Field Units Policy
[Revise 4-11.7.1 to read as follows:]
Field units must send all partial blocks of blank domestic money orders and all international money orders that cannot be reassigned within the unit to the servicing SDO or SDC in accordance with procedures in Handbook F-101, subchapter 11-6. Field units must send full blocks of blank domestic money orders to the MDC to reassign.
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7 Expenses
[Revise the introductory text to read as follows:]
Expenses represent money spent or cost incurred as a result of Postal Service efforts to generate revenue, representing the cost of doing business.
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7-2 Transportation Expense
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7-2.1 Highway Transportation
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7-2.1.2 Headquarters Units Policy
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[Add the following sentence to the end of 7-2.1.2:]
Field Accounting Services is also responsible for the timely settlement of related credit memos intended to offset payments to carriers.
7-3 Other Operating Expenses
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7-3.1 Purchase of Supplies and Services
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7-3.1.2 Field Units Policy
[Revise item a to read as follows:]
a. ***eBuy2.
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7-3.1.3 Field Units Policy
[Revise items a and c. to read as follows:]
a. ***eBuy2.***
c. ***Invoice Payments — PS Form 8230, Authorization for Payment, or PS Form 8232, Payment for Personal Services Contractors, submitted to the SIC, and processed through the Accounts Payable System.
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7-3.9 Indemnities
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7-3.9.2 Headquarters Units Policy
[Revise the first sentence of 7-3.9.2 to read as follows:]
Accounting Services processes and adjudicates all customer claims.
Corporate Accounting establishes payment policies for payment of domestic indemnity claims.
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8-1 Expense Commitments
[Revise the first sentence of 8-1 to read as follows:]
Expense commitments consist of operating lease obligations for buildings and contracts for normal operational expense items that have been purchased under a contract. Expense commitments also include inventory and research and development contracts.
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We will incorporate these revisions into the next printed version of Handbook F-1 into the next online update, available on the Postal Service™ PolicyNet website:
n Go to http://blue.usps.gov.
n In the left-hand column under “Essential Links”, click PolicyNet.
n Click HBKs.
(The direct URL for the Postal Service PolicyNet website is http://blue.usps.gov/cpim.)
— Revenue and Field Accounting,
Controller, 1-10-13
