Real Property and Financial Management Guide



Table of Contents

  1. Purpose and Background

  2. Authorities

  3. Responsibilities

  4. Effective Date/Transition Period/Exceptions

  5. Policy

  6. Property Classifications

  7. Capitalization Criteria

  8. Records

  9. Valuation

  10. Depreciation

  11. Estimated Useful Life

  12. Transaction Dates

  13. Maintenance

  14. Appendix A - Performance Measures

  15. Appendix B - Property Classifications Defined for Purposes of RPFMP

  16. Appendix C- World Wide Inventory Real Property Profile (GSA Form 1166)

  1. PURPOSE AND BACKGROUND.


    The purpose of this guide is to provide implementing guidance for the U.S. Department of the Interior Real Property Financial Management Policy (RPFMP), as amended in June 2003. (The original policy was issued on April 30, 2003.)


    Beginning with the Chief Financial Officers' Act of 1990, the Federal government has passed legislation increasing the financial accountability of Federal entities, including the control, accountability, and financial reporting of real property. The timeliness, accuracy and completeness of real property data are critical to the Department of the Interior's ability to justify its funding requests and to verify its accomplishments. Additionally, this data must pass the test of an annual financial statement audit in order for the Department to maintain an unqualified audit opinion.


    The Office of Acquisition and Property Management (PAM), in collaboration with the Office of Financial Management (PFM), prepared this guide to assist you in collecting, documenting, and providing accurate and complete real property inventory and financial data.

    Please Note: This guide addresses real property only, i.e., any interest in land, together with improvements, structures and fixtures, appurtenances, and improvements of any kind located thereon.

  1. AUTHORITIES.


    This guidance supports the requirements of SFFAS Number 3, "Accounting for Inventory and Related Property," SFFAS Number 6, "Accounting for Property, Plant and Equipment" (as amended by SFFAS Numbers 11 and 16), and SFFAS Number 8, "Supplementary Stewardship Accounting" (as amended by SFFAS Numbers 11 and 16). The SFFAS standards can be found at: www.fasab.gov.

  1. RESPONSIBILITIES.


    Assistant Secretaries, Bureau Directors, bureau financial officers and program managers all have a role in ensuring that real property is properly managed and reported and that real property and financial records are reconciled. The roles and responsibilities below can only be accomplished through close cooperation among all parties. This list focuses on financial-related responsibilities and does not include all responsibilities, e.g., safeguarding assets.

    1. What tasks are Bureau Directors responsible for?


      Bureau Directors shall:

      1. Certify on an annual basis, as part of their bureau's Management Control Assurance Statement as to the accuracy and completeness of real property inventories performed by the bureau during the reporting period;

      2. Ensure that accounts are reconciled;

      3. Ensure that adequate financial controls are in place;

      4. Ensure that financial records and reports accurately reflect the status of real property in accordance with the Department of the Interior's (DOI) RPFMP; and

      5. Approve bureau plans ensuring that 100 percent of real property assets are inventoried over a five year period.
        NOTE: The above responsibilities may not be delegated.

    2. What tasks are Assistant Directors – Administration (ADA)(or equivalent) responsible for?


      In addition to the responsibilities identified in D. below, Assistant Directors – Administration (or equivalent) shall:

      1. Allocate sufficient resources to conduct all phases of physical inventories and reconciliations to ensure property data recorded are accurate and complete, and the general ledger balances for real property are adequately supported;

      2. Ensure the organization and management of personnel tasked with coordinating, performing, and reporting of the physical inventory verification;

      3. Ensure that physical inventories and monthly reconciliations are accurate, complete, completed within established time frames and in compliance with other requirements of DOI's RPFMP; and

      4. Submit a plan to the Bureau Director that ensures that the bureau has planned real property inventories for 100 percent of its real property assets over a five year period.

      5. Ensure that bureau real property performance accomplishments are properly accounted for in monthly reports to the Office of Acquisition and Property Management.

    3. What tasks are Chief Financial Officers of bureaus and offices responsible for?


      Chief Financial Officers of bureaus and offices shall:

      1. Ensure that adequate financial controls are in place and financial records and reports accurately reflect the status of real property in accordance with the Department of the Interior's RPFMP;

      2. Ensure independent control of data in the accounting system;

      3. Reconcile accounting system data to the official real property subsidiary records at least monthly;

      4. Maintain documentation of account reconciliations. Documentation must be available for review by auditors;

      5. Maintain financial records in cooperation with property managers and facility managers for each capital facility project (i.e., any real property asset or capital improvement project with an overall cost of $100,000 or greater) in progress. These records are the source for entries to the general ledger work in progress accounts. The Contracting Officer or his/her Representative (i.e., Contracting Officer's Representative/Contracting Officer's Technical Representative), in consultation with the appropriate real property official, is responsible for furnishing information to identify costs applicable to construction in progress (CIP);

      6. Support the bureau's real property inventory planning process to ensure that real property inventories are planned for 100 percent of real property assets over a five year period; and

      7. Maintain close liaison with property management, facilities management and other personnel concerned with real property to provide assurance that values reported are accurate.

    4. What tasks are persons who manage real property responsible for?


      Persons who manage real property shall:

      1. Ensure that real property accounts are reconciled and inventories are documented;

      2. Maintain all records related to real property, including records of financial transactions related to real property;

      3. Reconcile official real property subsidiary system data to accounting system data at least monthly;

      4. Contribute to the preparation of the bureau's real property inventory planning process to ensure that real property inventories are planned for 100 percent of real property assets over a five year period;

      5. Perform physical inventories. Inventories must be reconciled with financial and other real property records. The Bureau ADA, accountable officer or designee, must certify the accuracy of the results throughout the management control reporting period. The Bureau Director must certify the accuracy of the results annually as part of the bureau's management control assurance statement. Physical inventory plans must be coordinated with the Office of Inspector General and third party auditors. Notice Regarding Segregation of Duties: Persons responsible for maintaining financial and other property records should not be the same persons who physically verify assets;

      6. Maintain documentation of physical inventories. Documentation must be available for review by auditors;

      7. Ensure the establishment and maintenance of real property accountability records to provide for effective and overall control;

      8. Enforce measures to prevent loss, misuse or abuse of real property; and

      9. Maintain close liaison with Chief Financial Officers and other personnel concerned with real property to provide assurance that values reported are accurate.


  1. EFFECTIVE DATE/TRANSITION PERIOD/EXCEPTIONS.

    1. What is the effective date of the Real Property Financial Management Policy (RPFMP) on which this guide is based?


      The policy was effective upon issuance, April 30, 2003. However,

      1. capitalization thresholds identified in the policy are effective for transactions that occur after October 1, 2003; and

      2. new useful lives for real property are effective October 1, 2003. NOTE: Useful lives of currently held real property need not be changed to reflect the new useful lives. Depreciation is changed prospectively, thus no change is required for accumulated depreciation reported to date.


        Early implementation of the RPFMP may be requested by bureaus/offices by following the procedures outlined in IV.E., below.

    2. Is the RPFMP, or any portion of it, e.g., thresholds, retroactive?


      No, the RPFMP is not retroactive.

    3. Will a transition period be allowed for bureaus/offices to implement the new real property policy issued on April 30, 2003?


      Yes, upon approval of the Director, Office of Acquisition and Property Management (PAM), bureaus/offices may be authorized, on a case-by-case basis, a transition period to implement the new real property financial management policy. For example, some bureaus/offices may need a transition period to adjust to monthly reconciliations, establish new systems, train appropriate personnel, etc.


      Bureau/office requests to implement a transition period must:

      1. be in writing and signed by the Bureau Director;

      2. clearly state the reason(s) why a transition period is required; and

      3. provide a suggested transition timeframe, supporting rationale, and implementation date(s).


        The Director, PAM, will make the final decision on the request.

    4. Will any exceptions be granted to the RPFMP?


      The Director, PAM and the Director, Office of Financial Management (PFM) will consider granting specific exceptions to the policy based on written request. Only the Director, PAM, may grant exceptions to the policy.

    5. How do I request an exception and what is required?


      Requests for exceptions to the RPFMP must be submitted in writing by a Bureau/Office Director, and show sufficient and satisfactory reason to support the exception. The request packages must also include an analysis of the impact of the requested exception on the bureau/office financial statement. Requests for exceptions must be submitted to the Director, Office of Acquisition and Property Management at the following address:


      U.S. Department of the Interior

      1849 C Street, NW, (MS 5512)

      Washington, DC 20240

    6. Will bureaus/offices be monitored on the implementation of the policy?


      Yes, bureau/office implementation of the RPFMP will be monitored. Among other methods, bureau/office real property management accomplishments will be monitored through reports on a series of related performance metrics.

    7. What are the performance metrics reporting requirements related to real property management accomplishments? When are reports due?


      Bureau ADA's (or equivalent) must submit reports on their bureau's real property management accomplishments in the performance metric areas on a monthly basis beginning October 1, 2003. Reports shall be provided to the Director, PAM. (Refer to Appendix A for the specific performance measurement metrics.)


  1. POLICY.


  2. Real property owned or leased by the Department of the Interior (DOI) must be properly accounted for in real property accountability records. Any changes to real property owned or leased by DOI must be tracked and reflected in real property accountability records. Each real property acquisition, improvement, construction, donation, transfer or upgrade that meets the overall capitalization criteria will be recognized in the financial records and depreciated.

    1. What is real property?


      Real property is any interest in land, together with improvements, structures and fixtures, appurtenances, and improvements of any kind located thereon. The term "real" should be associated with realty, land, or something attached thereto.


  1. PROPERTY CLASSIFICATIONS.

    1. Into what classes does real property fall into?


      Real property falls into the following classes (Refer to Appendix B for detailed definitions of the following property classifications.):

      1. Buildings, Structures and Facilities

        1. Buildings, Improvements, and Renovations (includes retrofits and upgrades)

        2. Structures and Facilities

        3. Water Projects Subject to User Charges

        4. Heritage Assets

        5. Multi-Use Heritage Assets

      2. Land and Land Rights

        1. General Property, Plant and Equipment (PP&E) Land

        2. Stewardship Land

        3. Mineral Rights, Natural Resources and the Outer Continental Shelf

        4. Land rights

        5. Improvements to Land

      3. Construction-in-Progress (CIP)

        1. Assets Constructed for Other Federal Agencies

        2. Assets Constructed for Non-Federal Agencies

        3. Construction in Abeyance

        4. Investigation and Development Costs

    2. How are restroom facilities classified?


      Stand alone restroom facilities, referred to as "Comfort Stations" are classified under "Buildings-Other" in a real property inventory.