This document provides general guidance in administrative and general asset
management areas. This document is intended to provide guidance only.
2.Background
There are certain real estate related asset management principles that are
imposed on all agencies and/or have been adopted by the FAA. This asset
management guidance section will generally contain information that relates to
more than one type of procurement (i.e., land and space or space and utilities,
etc.)
3.Guidelines
4.Electronic Fund Transfer
The Government is to make all payments through the use of EFT (P.L.
104-134).
l General
The requirement for Electronic Fund Transfer (EFT) applies to all Federal
payments for real property and utility transactions. This requirement takes
effect immediately.
However, if the contractor (vendor) certifies in writing to the real estate
contracting officer that the contractor does not have an account with a
financial institution or an authorized payment agent, payment may be made by
other than EFT (most commonly by check). If the contractor does not have a
method for EFT the section "Payee/Company Information" on the
Vendor/Miscellaneous Payment Information Form must still be completed. The FAA
will use the TIN (or SSN) information for purposes of collecting and reporting
on any delinquent amounts arising out of such person relationship with the
Government. As written, the EFT clause requires that only the successful offeror
complete the form. This requires the RECO to request the completed form
immediately prior to award. In areas with sufficient competition the RECO may
elect to make EFT an award factor. The completed form should be filed with the
appropriate accounting office and a copy retained with the contract file for the
life of the contract and included in the close-out file.
The real estate clause "Electronic Funds Transfer Payment" has been
written to provide for the most common EFT, which is through an Automated
Clearing House (ACH). However, the Federal Reserve Wire Transfer System (often
referred to as Fed Wire) can also be used, at the Government option. If the
Federal Reserve Wire Transfer System is used, slightly different information
will be required from the contractor. The information needed for the Fed Wire
System is:
1. The contract number to which this notice applies.
2. The contractor name and remittance address, as stated in the contract and
account number at the contractor financial agent.
3. The signature, title, and telephone number of the contractor official
authorized to provide this information.
4. Name, address, telegraphic abbreviation, and the 9-digit Routing Transit
Number for the contractor financial agent.
l Change of EFT information by the
contractor.
If the EFT information changes after submission of correct EFT information,
the Government will begin using the changed EFT information no later than the
30th day after its receipt. However, the contractor may request that no further
payments be made until the changed EFT information is implemented by the payment
office. The contractor is required to designate a single financial agent capable
of receiving and processing the electronic funds transfer using the EFT
method.
l Liability for uncompleted or erroneous
transfers.
(1) If an uncompleted or erroneous transfer occurs because the Government
failed to use the contractor-provided EFT information in the correct manner, the
Government remains responsible for (i) making a correct payment, (ii) paying any
prompt payment penalty that may be due, and (iii) recovering any erroneously
directed funds.
(2) If an uncompleted or erroneous transfer occurs because
contractor-provided EFT information was incorrect at the time of Government
release of the EFT payment transaction instruction to the Federal Reserve System
and: (i) If the funds are no longer under the control of the payment office, the
Government is deemed to have made payment and the contractor is responsible for
recovery of any erroneously directed funds; or (ii) If the funds remain under
the control of the payment office, the Government retains the right to either
make payment by mail or suspend the payment in accordance with the clause titled
"Electronic Funds Transfer Payment".
l EFT and prompt payment (If a prompt payment
clause has been used).
(1) A payment shall be deemed to have been made in a timely manner in
accordance with the standard clause "Interest For Late Payment" if, in
the EFT payment transaction instruction given to the Federal Reserve System, the
date specified for settlement of the payment is on or before the prompt payment
due date, provided the specified payment date is a valid date under the rules of
the Federal Reserve System.
(2) When payment cannot be made by EFT because of incorrect EFT information
provided by the contractor, no interest penalty is due after the date of the
uncompleted or erroneous payment transaction, until correct information is
provided. The Government is required to provide notice of the defective EFT
because of incorrect EFT information provided by the contractor. This notice to
the contractor should be provided within approximately 7 days. Failure to issue
this notice to the contractor in a timely manner may be considered withholding
of payment arbitrarily by the Government.
l EFT and assignment of claims.
If the contractor assigns the proceeds of this contract as provided for in
the clause "Assignment of Claims", the assignee shall provide the
assignee EFT information required by the clause "Electronic Funds Transfer
Payment". In all respects, the requirements of this clause shall apply to
the assignee as if it were the contractor. EFT information, which shows the
ultimate recipient of the transfer to be other than the contractor, without a
proper assignment of claims acceptable to the Government, is not
acceptable.
l Temporary suspension of payments.
If the contractor does not wish to receive payment by EFT methods for one or
more payments, the contractor may be directed to submit a direct request to the
designated payment office to refrain from requiring EFT information or using the
EFT payment method. The decision to grant the request is solely that of the
Government.
l Change of EFT information by the financial
agent.
The contractor has agreed that the contractor financial agent may notify the
Government of a change to the routing transit number, contractor account number,
or account type. The Government will use the changed data to effect a EFT change
in a timely manner. The agent notice of changed EFT data is considered
notification of incorrect EFT information and no further payments should be made
until the changed EFT information is implemented by the payment office.
5.Capitalization
Capitalization is not to be confused with accountability. In general,
capitalization is the method of treating an asset as it relates to an agreed
upon set of accounting principals. Accountability is keeping track or being
aware of assets or items determined important because of their use, value, or
significance. Capitalization and accountability of assets will overlap but
should not be considered synonymous.
The threshold policy for capitalization of assets, other than land, is
$25,000 and a useful life of at least two years. Land purchases will be
capitalized at any cost. Land only leases, that do not provide a bargain
purchase option and do not result in FAA ownership during the term of the lease,
are not capitalized.
The FAA is required to capitalize certain improvements in both owned and
leased space (See FAA Order 2700.31, Chapter 8). Also, the FAA is required to
make a determination as to whether leases (including real property leases) are
capital or operating leases and insure they are reflected correctly in the
appropriate database. Documentation relating to capital improvements and
determinations of capital versus operating leases is to be retained in the
appropriate lease file. Documentation, as a minimum, should consist of the form
"Evaluation of Real Property Lease to determine Accounting Treatment". Specific
information and guidance relating to capitalization and capital leases is
contained in FAA Order 2700.31. Any conflicts in capitalization guidance will
use FAA Order 2700.31 as the final authority.
?/P>
Typically, the determination of whether a lease will be a capital lease is
accomplished well in advance of site acquisition because of the possible budget
score-keeping (OMB Circular A-11) that may be required. Consultation with the
regional accounting organization regarding OMB Circular A-11 requirements should
be done prior to any commitment on the part of the FAA. (See FAA Order
2700.31)
- Fair Market Value For Capitalization - In determining if a lease is a
capital lease you are required to establish a fair value or fair market value
(FMV) for the area under lease. The Department of Transportation, with
concurrence from FAA, has established a hierarchy valuation policy for assets
(including real property) that lack supporting FMV documentation (FAA Order
2700.31, Chap 8). The hierarchy is as follows:
- Actual/historical cost or latest acquisition cost
- "Accepted" cost valuation (unsupported value recorded in agency systems)
- Estimated cost - in using estimated cost, an industry/FAA accepted method of
estimating cost should be used; i.e., appraisal, market survey, cost to replace
(Means, Marshal and Swift, etc.), etc.
- Estimated Useful Life For Capitalization:
In determining whether a lease is operating or a capital lease you will need
to know the estimated useful life of a particular asset. The FAA has made a
determination for the following types of assets:
- 40 yrs. Offices and Warehouse buildings (including commercial, governmental,
air traffic control towers and enroute air traffic control centers) and
residential properties.
- 20 yrs. Mobile Homes
- 15 yrs. Other Structures (i.e., Roads, Sidewalks, Parking Lots, etc.)
- 10 yrs. Capital improvements, Facility Modifications, Leasehold Improvements
(or expiration of lease, whichever comes first).
When a lease is considered capital because FAA will during or at the end of
the lease term take title to the property or the lease contains a bargain
purchase option, the asset is amortized over the estimated useful life of the
asset, not the lease term.
When a lease is considered capital because the 75 percent of the estimated
useful life or 90 percent of fair value criteria is met, the asset is amortized
over the term of the lease.
Leasehold improvements are amortized over:
- The remaining term of the lease OR
- The useful life of the asset (the improvement), which ever is less.
All capital leases and capitalized improvements will need to be reported to
your local accounting organization.
The purpose of this section
is to provide guidance and outline responsibilities for conducting real property
inventories and for updating real property records to reflect the inventory
results.
Authority
Conducting physical
inventories is necessary to achieve appropriate accountability and control over
the FAA real property assets. The
physical inventory establishes a direct relationship between actual and recorded
assets and ensures that asset transactions have been properly recorded in the
real property records database.
The Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 4836) requires maintenance of
adequate inventory controls and accountability systems for property. In addition, property is to be inventoried
continuously to determine if assets have been excessed or disposed of. Federal Accounting Standards Advisory Board
(FASAB) Statement of Federal Financial Accounting Standards (SFFAS) #3 and
Office of Management and Budget (OMB) Circular No. A-123 ?Management
Accountability and Control of Federal Government Assets also address the need
for management controls that ensure the accuracy of financial reporting related
to property, plant and equipment.
Standard
A physical inventory of 20% of a region/center capitalized assets
should be conducted annually. Capitalized assets include all land, regardless of
cost, and buildings and other structures with an acquisition cost greater than
or equal to $25,000 and an estimated useful life of 2 years or more. This will
result in a 100% inventory of the FAA capitalized assets every 5 years.
Responsibilities
The FAA
organizations/personnel involved in the annual physical inventory effort should
include:
Real Estate Policy Branch
(ASU-140) at Headquarters initiates the annual
physical inventory and assigns a national real property inventory
coordinator.
National Real Property
Inventory Coordinators coordinates the overall
physical inventory, issues detailed instructions to the regions/centers,
supports the regional/center real property inventory coordinators and reports on
the final results.
Regional/Center Logistics
Division
appoints a regional/center real property inventory coordinator.
Regional/Center Real
Property Inventory Coordinators coordinate the physical
inventory effort in their region/center, distribute inventory asset listings,
follow up on results and adjust the real property records database to reflect
the results.
Real Estate
Specialists
verify owned land assets in their region/center.
Regional Airways Facilities
(AF)
designates a regional real property inventory team member.
Regional AF Team
Member
identifies AF contacts to Regional Real Property Inventory Coordinator, makes
initial contact and follows up on issues related to getting the job done. The AF team member would not be responsible
for distributing and receiving listings or following up on individual data
items. This would be the responsibility
of the Regional/Center Real Property Inventory Coordinator
System Management Office
(SMO) Representatives in the regions distribute
inventory asset listings and detailed instructions to Airways Facilities (AF)
personnel (inventory takers) that will physically observe the sites to be
inventoried.
AF Inventory
Takers in
the regions physically observe the inventory sites and record observations on
the inventory data collection sheets (although not required the AF Property
Custodian or his/her alternate may be the best choice for this role).
Facility Management
Staff at
the centers physically observe the inventory sites and record observations on
the inventory data collection sheets.
Regional/Center Accounting
Offices
update the accounting records to reflect inventory results
Procedures
The annual inventory should
be comprised of the following 4 key procedures.
1. Conducting a physical inventory
of 20% of a region/center/s real property assets
2. Conducting an internal
verification of the inventory results
3. Updating the real property
records database and accounting records to reflect the inventory results
4. Consolidating and reporting on
the results and initiating corrective action where necessary to address
opportunities identified as a result of the inventory
The first three procedures
are the responsibility of the regions/centers, lead by the Real Estate
organization in each region/center. The
fourth process is the responsibility of the Real Estate Policy Branch in
Headquarters (ASU-140). Each of these
key procedures is described in detail, in order of occurrence, below.
1. Real Estate Policy Branch
(ASU-140)
issues a memorandum to the regions/centers in October requesting the start of
the annual physical inventory for the current fiscal year and designates a staff
member as the national real property inventory coordinator for the year.
2. National Real Property
Inventory Coordinator issues detailed inventory
taking instructions revised to reflect findings from the previous inventory and
current priorities. The instructions are
distributed with the memorandum.
3. Regional/Center
Logistics
in each region/center designates a member of the Real Estate staff as the real
property inventory coordinator for the year.
4. Regional/Center Real
Property Inventory Coordinator in each region/center
generates from the real property records database a list of assets to be
inventoried during the current fiscal year.
For any site included on the list, all assets associated with that site
will be included (i.e., whole sites will be inventoried). A copy of the list is forwarded to the
designated national real property inventory coordinator at headquarters.
5. Regional AF Team
Member
identifies AF contacts in the regional office and in the field and makes initial
contact to advise the process.
6. Regional/Center Real
Property Inventory Coordinator distributes a copy of the
asset listing with the detailed inventory taking instructions to the appropriate
real estate specialists in the regional/center office.
7. Real Estate
Specialists
follow the instructions and determine if the land is still owned, and if it is,
if it is still in use. The real estate
specialist also indicates on the listing any corrections to the information for
each asset. The real estate specialist
also adds to the listing any owned land assets they are aware of that are not on
the listing.
8. Regional/Center Real
Property Inventory Coordinator distributes copies of the
asset listings to the appropriate System Management Offices (SMOs) in the
regions or Facilities Management Staff at the centers, with the detailed
inventory taking instructions.
9. System Management Office
Representative in the region, in
coordination with or through the AF team member, distributes the asset listings
(with the detailed inventory taking instructions) to the Airways Facilities (AF)
personnel (inventory takers) who will actually conduct the physical inventory.
10. AF Inventory
Takers for
each site in the region (facilities management staff at the centers), follow the
instructions and determine if the listed land, buildings and other structures
still exist, and if they do, if they are in use. If the AF inventory taker/facilities
management staff determine that an asset status needs to be changed to excess,
because it is no longer in use or that an asset should be deleted because it has
been removed or sold, then the name of a contact person that could provide the
appropriate paperwork should be listed in the comments column. The AF inventory taker/facilities management
staff also indicate on the listing any corrections to the information for each
asset. The AF inventory taker/facilities
management staff also look to see if there are any buildings or other structures
on the site with an estimated cost in excess of $25,000, that are not on the
inventory listing, or if there are land assets not listed. If assets are identified they are added to
the bottom of the list with as much information known about the asset as
possible (e.g., size, cost, installation date, Job Order Number (JON), contact
person knowledgeable of the asset).
11. AF Inventory
Takers
forward the completed inventory listings through the SMOs to the regional/center
real property inventory coordinators.
The facilities management staff at the centers forward the completed
inventory listings directly to the real property coordinator.
12. Regional/Center Real
Property Inventory Coordinator reviews the returned
listings for completeness, obvious errors and/or omissions, and follows up on
assets marked for excess, deletion or addition to obtain the appropriate
documentation to support these actions, and corrects the inventory listings as
appropriate. Examples of errors needing
follow-up are identified in paragraph 13.
13. Regional/Center Real
Property Inventory Coordinator selects a sample of 10% of
the inventoried facilities in each region/center to be verified and arranges for
an independent verification of the inventory results at those sites. The independent verifier could be a member of
the regional office logistics staff, an SMO staff member, a contractor or anyone
not directly involved in asset verification during the actual inventory
taking. At least one remote site
requiring travel should be included in the sample.
If key errors are
found at an independently verified site within an SMO span of control, then one
or two additional inventoried sites within that SMO span of control are to be
verified. If more key errors are found,
then all inventoried sites within that SMO span of control are to be
verified.
Key errors would comprise the marking of assets incorrectly
(e.g., marking existing assets for deletion, marking removed or sold assets as
verified, marking in-use assets for excess).
The failure to revise an ATI code, facility code or square
footage/acreage for a building or land would not constitute a key error. However, these findings would be conveyed to
personnel involved in an effort to minimize such errors in the future.
14. Regional/Center Real
Property Coordinator then updates the real
property records system to:
?span
style="font:7.0pt "Times New Roman""> change the date of last
inventory;
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style="font:7.0pt "Times New Roman""> record corrections to asset
information;
?span
style="font:7.0pt "Times New Roman""> delete assets that have been
found to no longer exist;
?span
style="font:7.0pt "Times New Roman""> change the status of assets
no longer in use to excess; and
?span
style="font:7.0pt "Times New Roman""> add assets found on
inventory.
The
regional/Center real property inventory coordinator forwards to the accounting
office the documentation necessary to support adjustments to the accounting
records.
The
regional/Center real property inventory coordinator also forwards on a monthly
basis a copy of the completed inventory listings to the national coordinator at
headquarters.
1. Regional/Center Accounting
Office
adjusts the real property accounting records.
2. National Real Property
Inventory Coordinator at headquarters:
?span
style="font:7.0pt "Times New Roman""> reviews and summarizes the
results of the physical inventory;
?span
style="font:7.0pt "Times New Roman""> identifies opportunities to
improve the inventory taking process;
?span
style="font:7.0pt "Times New Roman""> identifies opportunities to
improve asset management practices; and
?span
style="font:7.0pt "Times New Roman""> issues
a report to ASU management and the regional/center administrators, commenting on
the apparent strength of current management and control processes and
recommending changes if deemed
appropriate.
Program managers and/or their designee(s) must manage FAA inventory (real
property assets). Management will be accomplished by ensuring the integrity of
the data. Data management will enable management to formulate sound financial
decisions. This includes the ability to collect accurate, timely, complete,
reliable and consistent information; to provide for adequate reporting to
support government and agency decision-making; to support the preparation and
execution of agency budgets, and to facilitate the preparation of financial
statements providing a complete audit trail.
Provided below are the roles and responsibilities for Headquarters, Regions,
and Centers.
ASU100 has overall responsibility for the REMS application. As such, ASU100
has designated a Headquarters?System Administrator. Each region or center has a
designated System Administrator for local automated data processing (ADP)
issues. The Regional/Center System Administrator will:
All FAA real property assets are recorded and managed in a database
identified as REMS. REMS captures all FAA leased and owned real property (land,
buildings, and structures) as well as all GSA owned or leased real property
utilized by the FAA. REMS is a web-based consolidated nationwide database. The
REMS database contains detailed information for all FAA real property assets.
The web page offers other related databases, a log on screen, contacts, and the
REMS User Guide. This information, REMS Online, can be found at http://172.27.90.31/
Procedures for data management in REMS are found in the REMS User Guide. REMS
Online, containing the REMS User Guide, can be found at http://172.27.90.31/
