POLICY ISSUES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00191R000100070053-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: October 24, 2013
• Sequence Number: 53
• Publication Date: September 15, 1987
• Content Type: MEMO

Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
STAT
MEMORANDUM FOR:
FROM:
SUBJECT:
Issue
15 September 1987
Policy Issues
A decision is needed on whether or not the Office Of Finance will
require a hard copy signature for certification of expenses.
Background
Throughout government, there is a legal requirement that
disbursements of official funds be certified as proper and in
accordance with regulations. The Agency has long followed the
government-wide practice of having a certifying officer's
signature on a hard copy voucher to certify that the expenses
reflected on the voucher are correct and in accordance with Agency
procedures. The certifying officers receive their authority from
the Director of Finance and, upon transfer to other assignments,
this authority may be revoked or amended. It is currently the
responsibility of Audit and Certification Division to monitor
these authorities. However, a precedent exists in the the CLASSB
system allows the certifying officer to enter a password that
constitutes a certification. Based on the presence of the
password, the CLASSB data is released to GAS.
Alternatives
The question is whether or not the new systems environment will
require a hard copy signature to constitute as a certification
e.g. the current system, CONIF, produces a hard copy voucher
which is signed by the financial certifying officer. Due to the
fact that the function of certifying officer does not exist in the
private sector, commercial software does not provide for any type
of financial certification - either in hard copy or electronic
signature - and this will require either a modification to the
package or a change in philosophy regarding the certification of
system generated payments.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
PAGE 2
It would appear that a change in philosophy would be substantiated
by the following.
1) The precedent mentioned above in the case of the CLASSB
system.
2) The Treasury Department has acknowledged that automation
has impacted on the role of the certifying officer. It
states:
Automated payment systems present special problems for
certifying officers because you rarely examine
individual payments or supporting
documentation some verification of individual
transacations is impossible, therefore, the basic issue
in determining your liability is whether it was
reasonable for you to rely on the system to continually
produce legal and accurate payments."
Department Of
Treasury Pamphlet
'Now That You're A
Certifying Officer'
Recommendation
Explore the possibility of allowing the certification of expenses
to be effected in a manner different from today's method. This
cannot be fully determined until more experimentation is made with
the packages.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
PAGE 3
Issue
The level at which the check for funds availability should be made
in the upcoming funds control environment.
Background
Traditionally, the Agency has not had an automated funds control
but has monitored it's funds availability through the allotment
process. The obligations and expenses are collected in the
General Accounting System from which they are passed to the
Financial Resources System at the project/SOC level The individual
B&F officers manage their funds at the office level and use the
trend reports at the project/SOC level for monitoring them.
Alternatives
The current method of monitoring has been acceptable due to the
fact that the funds are being monitored after the fact, but in the
new funds control environment, the lack of available funds will
result in the rejection of transactions. Therefore the question
arises as to the level at which the funds checks should occur.
1) If the funds are monitored at the Project/SOC level in an
up-front funds control environment, the offices will be
forced to do a great deal more reprogramming or there will be
a number of rejected transactions which would adversely
impede operations. This would be particularly true for those
directorates with a large number of projects involving small
amounts of funds.
2) If the funds are monitored at a higher level e.g. the
office level, there will be less of an impact on operations
due to fewer rejected transactions, however, this may not
satisfy all of the Agency's requirements for funds control.
Recommendation
Explore the possibility of having the levels of control set at
various criteria - office, project, etc. - based on the
requirements of the individual directorates. This could be better
determined through the prototyping effort of the release 1.3 which
includes Funds Control.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
PAGE 4
Issue
Whether or not to retain the current MPA/PRA process for the
purchase and replenishment of materiel and the subsequent issue of
such materiel to operating components or to adopt a form of direct
funding for such transactions.
Background
Unlike other government entities, the Agency operates on a single
appropriation and whereas other agencies have a separate
appropriation for a stock fund which is often maintained as a
revolving fund in that issues to customers result in
reimbursements to the fund, the Agency has an internal stock fund
- Materiel Procurement Allotment (MPA) - which is capitalized
annually by the funds from all of the other offices. In return for
these funds the other offices are given a Property Requisitioning
Authority (PRA) equal to the amount that they have relinquished to
the MPA.
Under this arrangement, each office draws against their PRA when
they request supplies and equipment on a Form 88 requisition. The
submission of a Form 88 results in the creation of an encumbrance
against the PRA. At the time that the materiel is issued, it
results in a transaction that both clears the encumbrance and
charges, or costs, the amount of the issue to the requesting
components project number.
The replenishment of issued stock is effected by supply managers
preparing a Form 1245 - Replenishment Requisition - and based on
the submission of this form, a commitment of funds is generated.
The commitment evolves into an obligation based on the issuance of
a purchase order by procurement division. These commitments and
obligations are targeted against the MPA. At the time the
obligation is cleared by the payment to the vendor, the
expenditure is made against the MPA and also recorded as an
expended appropriation. The actual cost of the materiel is not
effected until it is issued to the customer at which time the
customer's project number is costed by the amount of the issue.
As mentioned above, the purchase of materiel results in
commitments and obligations being effected against the
appropriation which in this case is the MPA or stock fund. The
receipt of goods at the depot results in an increase to inventory
and establishes the accounts payable. The vendor payment results
in a expenditure which is recorded against the appropriation and
clears the accounts payable. When the customer requisitions the
materiel, the inventory is reduced and the customer's project is
costed for the amount of the issue.
However, currently a large portion of the materiel requested is
not carried in stock and must be directly purchased upon request.
This results in a double bookkeeping and is one of the primary
reasons that MPA/PRA has become a cumbersome process to
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
PAGE 5
administer.
Alternatives
The commercial software packages to be utilized in the BARS/CLAS
system do not readily allow for a methodology such as MPA/PRA.
Therefore it will be necessary to make some type of enhancements
if the practice is to be continued or eliminate it altogther. The
question is whether or not the Agency wishes to also eliminate the
stocking of materiel. If not, then some method must be devised for
the replenishing of such stock and expensing the purchases to the
appropriation. These items must then be carried in an inventory
account and issued and costed to the operating projects when the
customer requests them.
Recommendation
The Office of Logistics, The Office of the Comptroller, and the
Office of Finance jointly determine the best manner in which to
implement an alternative to the current MPA/PRA process that will
satisfy both the capability of the packages and the Agency
requirements vis-a-vis expenditures, costs and inventory
valuations.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
PAGE 6
Issue
A policy decision is needed to determine whether or not the Agency
should adopt the standardized general ledger advocated for
government agencies or continue to use it's own chart of accounts.
Background
The Agency has utilized it's own chart of accounts as developed in
accordance with Agency needs and requirements. Recently there has
been a movement government wide to employ a standardized set of
accounts throughout all government agencies. The rationale behind
this is to allow the government to have a balance sheet that
embraces the entire government and would facilitate such things as
consolidated cash management based on anticipated revenues and
expenses.
Alternatives
Due to the Agency's unique requirements, especially in the areas
of proprietary systems and field station accountaaities, it would
probably be more difficult to employ the standard government wide
accounts.
The only drawback would be if the failure to employ the standard
accounts would serve as a flag to highlight the Agency and thus
impede it's abilities to blend in with the rest of the government.
Recommendation
It is recommended that the Agency continue to employ it's own set
of accounts and not utilize the standardized general ledgers.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8
STAT
PAGE 7
Issue
The manner in which approvals for financial transactions should be
handled in the new package environment.
Background
The Agency currently requires hard copy approvals on such
financial transactions as travel orders, requests for advances,
and certain invoices for payment.
Alternatives
The Agency could continue to require such hard copy approvals or
it could accept electronic approvals for such transactions.
If electronic approvals are utilized, there are two options.
1) Develop an in-house system to the front-end of the
packages. This would be similar to the effort employed in
LIMS and would prove costly and time-consuming.
2) Utilize the approval mechanism provided by the packaged
software. The current release of software is very scant in
this area but it is understood that the new release will
offer more in this area.
Recommendation
Determine the scope of approval capability in the 1.3 Funds
release through the prototyping of those packages. As such
capability is ascertained, allow OF management the opportunity to
decide if it will satisfy our approval requirements.
Declassified in Part - Sanitized Copy Approved for Release 2013/10/24: CIA-RDP90-00191R000100070053-8