TREASURY DEPARTMENT

Washington

REGULATION RELATING TO THE SUBMISSION OF BUSINESS-TYPE FINANCIAL STATEMENTS BY GOVERNMENT CORPORATIONS AND CERTAIN UNINCORPORATED AGENCIES

1956

Department Circular No. 966

Fiscal Service

Bureau of Accounts

TREASURY DEPARTMENT,

OFFICE OF THE SECRETARY, Washington, D.C., January 30, 1956.

To Heads of Departments and Agencies and Others Concerned:

PURPOSE OF REGULATION

1. The financial statements and related information to be submitted under these regulations are required to furnish financial information for use by the Treasury Department in discharging its responsibility under the Budget and Accounting Procedures Act of 1950 for compilation of overall financial reports of the Government, and for use by the Bureau of the Budget in following through with the budgetary programs of the reporting agencies.

AUTHORITY FOR REGULATION

2. This regulation is issued pursuant to Section 114 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 66b) which authorizes the Secretary of the Treasury to require from agencies reports and information for the effective performance of his responsibility for preparing such reports for the information of the President, the Congress, and the public as will present the results of the financial operations of the Government. As authorized by said section, the regulation provides for the furnishing of such financial data as are required by the Director of the Bureau of the Budget.

SCOPE OF REGULATION

3. This regulation requires the submission of financial statements by corporate and noncorporate Government agencies of the following character:

a. All wholly owned and mixed ownership Government corporations specifically included in the Government Corporation Control Act and amendments thereto, or subsequently brought under the provisions of that Act.

b. All other activities of the Government operating as revolving funds (accounts symbolized 4000-4999 and 8400-8499 by the Treasury Department), for which business-type public enterprise or intragovernmental fund budgets are required by the Bureau of the Budget.

c. Other activities or agencies (1) which are of a business-type nature; or (2) whose operations, services, or functions are largely self-liquidating or primarily of a revenue producing nature; or (3) whose operations result in the accumulation of substantial inventories, investments or other recoverable assets. Agencies and other activities to report under this category will be designated by the Fiscal Assistant Secretary of the Treasury.

ISSUANCE OF INSTRUCTIONS

4. Financial statements and related information under this regulation shall be prepared and submitted by the agencies concerned, in the form and the manner prescribed in the procedural instructions issued by the Fiscal Assistant Secretary of the Treasury.

WAIVERS

5. The Fiscal Assistant Secretary of the Treasury is authorized to waive the provisions of this regulation in whole or in part as to any agency or activity when it is determined that full compliance by such agency or activity is not necessary to accomplish the overall objective to obtain information required for the preparation of financial reports or for the purposes of the Bureau of the Budget.

PERIODIC REPORTS REQUIRED

6. Agencies responsible for the administration of corporate or noncorporate activities of the type specified in paragraph 3 shall furnish for each such activity periodic financial statements, as follows:

a. A Statement of Financial Condition showing the assets, liabilities, and investments of the United States Government in the enterprise.

b. A Statement of Income and Expense and Changes in Accumulated Net Income (or Deficit) showing in condensed form the earnings or losses arising from operations and changes in accumulated net income (or deficit) for the fiscal year to the end of the reporting period.

c. A Statement of Sources and Application of Funds showing the manner in which funds have been applied to the acquisition of assets, to expenses, and to retirement of borrowings and capital; the manner in which funds have been provided by the realization of assets, by income, by borrowings and capital contributions; and from which the net effect of such operations on the budget for the Government as a whole can be determined.

d. A Statement of Long-range Commitments and Contingencies containing a short description of the program and a statement showing the gross amount outstanding of loans guaranteed or insured by the reporting agency, insurance programs, obligations issued on credit of or guaranteed by the United States, long-range commitments and other contingent liabilities, and assets held as offsets to such liabilities.

ACCOUNTING SUPPORT FOR REPORTS

7. One of the principles upon which the Treasury Department is proceeding in connection with the responsibility for preparing central financial reports is that such reports should present fairly the financial conditions and results of operations of the agencies as shown by their books and records. Hence, agencies shall furnish the Treasury Department with such information regarding the accounting basis for their reports submitted under this regulation, as may be required for proper evaluation of such reports.

EFFECTIVE DATE

8. This regulation, with the concurrence of the Director of the Bureau of the Budget, supersedes Budget-Treasury Regulation No. 3, dated September 1, 1944, and revised March 15, 1947, issued pursuant to Executive Order No. 8512 of August 13, 1940, as amended by Executive Order No. 9084 of March 3, 1942, and shall be effective with the period ending March 31, 1956.

W. RANDOLPH BURGESS, Acting Secretary of the Treasury.

TREASURY DEPARTMENT

FISCAL SERVICE

Washington

INSTRUCTIONS UNDER TREASURY DEPARTMENT CIRCULAR No. 966 Relating to the submission of business-type financial statements by Government corporations and certain unincorporated agencies

I. GENERAL

AUTHORITY FOR INSTRUCTIONS

1. These instructions are issued pursuant to Treasury Department Circular No. 966, issued under the authority contained in Section 114 of the Budget and Accounting Procedures Act of 1950 (31 U.S.C. 66b).

SCOPE OF INSTRUCTIONS

2. These instructions explain the kinds of reports and other information to be furnished to the Treasury Department under the regulation; the periods of time to which the reports shall relate; and other reporting specifications, including information concerning accounting support of the data reported.

3. All questions pertaining to the regulations or these instructions should be submitted to the Bureau of Accounts, Treasury Department.

KINDS OF REPORTS AND INFORMATION REQUIRED

4. The financial statements shall be submitted on the following standard forms:

Standard Form 220. Statement of Financial Condition

Standard Form 221. Statement of Income and Expense

Standard Form 222. Statement of Sources and Application of Funds Standard Form 223. Statement of Long-range Commitments and Contingencies

The printed forms may be purchased through the General Services Administration. Supporting schedules to be submitted as hereinafter required should be prepared or reproduced on letter size (8 by 101⁄2 inches) paper with appropriate title and references. Minus or "red" figures should be indicated by an asterisk (*). A duly authorized officer of the reporting agency will sign the original Standard Form 221. The copies need not be signed but should bear the name of the signing officer.

5. Where there are several regional corporations or institutions in a financial system performing identical functions, such as the twelve banks of the Federal intermediate credit bank system, consolidated statements shall be prepared and submitted for the system. Separate statements for each regional corporation or institution are not required. Where a single fund operated by an unincorporated agency covers activities made up of unlike functions, agencies may be requested to submit separate statements on a program or functional basis.

6. Each item group reported on the Statement of Financial Condition and the Statement of Long-range Commitments and Contingencies submitted for the last quarter in each fiscal year, should be described, in reasonable detail, outlining the accounting principles followed in reporting each item group on these statements unless such descriptive material is included in annual reports of the agencies submitted under paragraph 8 below. The description of the item. groups should cover such subjects as (1) nature of accounts, e.g., whether on a cash, accrual, or modified accrual basis; (2) basis of reporting, e.g., whether at cost or some other value; (3) methods used in determining and reporting allowances for losses; (4) extent of departure from the account classifications provided in the regulation; and (5) extent, if any, of departure in reporting from the preceding year. The descriptive matter should be presented in the same order in which the respective item groups appear in the statements.

Reporting periods and distribution of statements