United States Department of Agriculture
Research, Education, and Economics

ARS * CSREES * ERS * NASS
Handbook

Table of Contents

PART ONE--INTRODUCTION
     I. Purpose.
     II General Instruction.
     III Authorities
     IV Abbreviations
     V  Definitions
PART TWO--REIMBURSABLE INTERAGENCY AGREEMENTS
     I. Forms
     II. Assignment of Responsibilities
          A. Agency Heads:
          B. Division Directors:
          C. Branch Chiefs or Designated Project Leaders:
          D. Administrative Officers (ERS and NASS) and Budget Assistants (EAS, OE, and WAOB):
          E. Budget, Finance and Systems Automation Division, EMS, Staff:
     III. Procedures For Entering Into New Reimbursable Interagency Agreements.
          A. Plan for Providing Goods or Services to Another Federal Agency.
          B. Negotiation.
          C. Clearance - (All Agencies Except ERS).
          D. Post-Clearance Activities.
     IV. Procedures For Amending Existing Reimbursable Interagency Agreements.

PART THREE--OBLIGATIONAL INTERAGENCY AGREEMENTS
     I. Forms
     II. Assignment of Responsibilities
          A. Agency Heads.
          B. Division Directors.
          C. Branch Chiefs or Designated Project Leaders.
          D. Administrative Officers (ERS and NASS) and Budget Assistants (EAS, EMS, OE, and WAOB).
          E. Administrative Services Division, EMS, Staff.
          F. Budget, Finance and Systems Automation Division, EMS, Staff.
     III. Procedures for Entering into New Obligational Interagency Agreements.
          A. Plan for Obtaining Goods or Services from Another Federal Agency.
          B. Negotiation.
          C. Clearance - (All Agencies Except ERS).
          D. Post Clearance Activities.
     IV. Procedures for Amending Existing Obligational Interagency Agreements.

Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H

PART ONE--INTRODUCTION

I. Purpose. This handbook assigns responsibilities and establishes procedures for providing or obtaining goods or services from another Federal Agency by means of interagency agreements.

II General Instruction. Economics agencies use interagency agreements as legal instruments for documenting the specific goods or services to be provided to or obtained from another Federal Agency. The agreement shall identify the goods or services to be provided or obtained, the period of performance for the entire project, and funding terms for all costs (direct and indirect) to be incurred in the performance of the agreement. The performing agency must incur the expenditures before the end of the fiscal year in which the funds are appropriated.

III Authorities

A. The Economy Act, 31 U.S.C. 1535 and 1536.

B. Comptroller General Decision B-104354.

IV Abbreviations

AO Administrative Officer

ASD Administrative Services Division, EMS

BFSAD Budget, Finance and Systems Automation Division, EMS

CAS Central Accounting System, NFC

FMS Financial Management Section, BFSAD, EMS

MASC Management Accounting Structure Code

NFC National Finance Center

OBPA Office of Budget and Program Analysis, USDA

V   Definitions

A. Agreement Number. Unique number assigned to each interagency agreement for administrative control purposes. (Interagency agreement numbers are assigned by BFSAD for all agencies except ERS. In ERS the agreement numbers are assigned by the AO.)

B. Agreement, Obligational Interagency. A written agreement which authorizes an Economics agency (requesting agency) to obtain goods or services from another Federal Agency (providing agency). Funds are transferred from the agency receiving the goods or services to the agency providing the goods or services according to a specified schedule of payments. The agreement consists of form AD-672, Reimbursement or Advance of Funds Agreement.

Note: Form AD-672 is not to be used for making advance payments.

C. Agreement, Reimbursable Interagency. A written agreement which authorizes an Economics agency (performing agency) to provide goods or services to another Federal Agency (requesting agency) within one fiscal year. Form AD-672, Reimbursement or Advance of Funds Agreement, is used to transfer funds to the performing agency from the requesting agency.

D. Amendment. Formal written change to an existing reimbursable/obligational interagency agreement. Any modification to the negotiated project requirements and/or period of performance will generally require a change in the amount of funding.

E. Direct Costs. Costs which can be charged directly as a part of the cost of a product or service, or of a department or operating unit.

F. Funding Authority. The appropriations act which provides funds to an agency for specific purposes and periods of time.

G. Leave Factor. The cost of annual leave and all other leave during the period of the agreement. Example: Sick leave, holiday leave, and administrative leave.

H. Overhead Costs. Costs necessary to the production of an article or the performance of a service which are of such nature that the amount applicable to the product or service cannot be determined readily or accurately. Examples include: Administration, Management Support (EMS), and Indirect Account Costs such as space rental, telephone, etc.

PART TWO--REIMBURSABLE INTERAGENCY AGREEMENTS

I. Forms

AD-672 Reimbursement or Advance of Funds Agreement (Exhibit A)

AD-700 Procurement Request, with clearance block added (Exhibit B)

AD-703 Operating Plan (Exhibit C)

AD-757 Miscellaneous Payment System (Exhibit D)

II. Assignment of Responsibilities

A. Agency Heads:

1. Establish agency procedures to ensure appropriate review of all proposed project plans for reimbursable interagency agreements prior to negotiation.

2. Establish and ensure compliance with delegations of authority for signing form AD-700, Procurement Request, the USDA commitment document for agreement actions. Current delegations as delineated in EAA Directive 1313 and Agency supplements are as follows:

a. In EAS, EMS, and OE, all AD-700's are signed by the Agency Head.

b. In WAOB, all AD-700's are signed by the Deputy Chairperson.

c. In ERS, the Associate Administrator, Division Director, or Director, Data Services Center, signs AD-700's below $50,000. The Administrator signs AD-700's $50,000 and above and foreign technical assistance assignments.

d. In NASS, all AD-700's are signed by the Administrative Officer, Program Support Staff.

3. Establish and ensure compliance with delegations of authority for signing form AD-672, Reimbursement or Advance of Funds Agreement. Current delegations as delineated in EAA Directive 1313 and Agency supplements are as follows:

a. In EAS, EMS, NASS, and OE, agreements are signed by the Agency Head.

b. In WAOB, agreements are signed by the Deputy Chairperson.

c. In ERS, agreements are signed by the Associate Administrator, Division Director, or Director, Data Services Center, except agreements for foreign technical assistance assignments, which are signed by the Administrator.

4. Establish and ensure compliance with delegations of authority for signing form AD-703. Current delegations are as follows:

a. In EAS, EMS, ERS, OE, and WAOB, signed by the Head, FMS, BFSAD, EMS.

b. In NASS, signed by the Administrative Officer, Budget and Administrative Group, Program Support Staff.

B. Division Directors:

1. Develop annual project plans for reimbursable interagency agreements.

2. Provide preliminary approval for Branch Chiefs or designated project leaders to proceed with formal negotiations of specific reimbursable interagency agreements.

3. Monitor, through designated project leaders, approved agreements to determine that work is progressing satisfactorily in accordance with the terms of the approved agreement.

4. Ensure the maintenance of division's agreement files.

C. Branch Chiefs or Designated Project Leaders:

1. Negotiate and develop terms of the reimbursable interagency agreement with the requesting agency, following preliminary approval by Division Director. Ensure proper supporting and accounting documentation (AD-672) is prepared and maintained for the negotiation and execution of the agreement.

2. For NASS only, prepare AD-672 (see Exhibit A).

3. Initiate agency clearance procedures.

4. Provide leadership and guidance on behalf of the agency throughout the duration of agreements. Direct staff performance in the execution of agreement terms.

5. Monitor agreement costs being incurred and recovered to avoid cost overruns and recovery problems.

6. Notify funding agency of any significant cost overruns or underruns.

D. Administrative Officers (ERS and NASS) and Budget Assistants (EAS, OE, and WAOB):

1. Verify accuracy of the applied overhead and leave factor rates, and computation of the total amount of the agreements.

2. Prepare AD-672 (see Exhibit A), all agencies except NASS. ERS will assign their own agreement number (See Exhibit A for the structure of the number.).

3. Prepare AD-703 (see Exhibit C), all agencies.

4. Prepare AD-700 (see Exhibit B), all agencies except ERS. ERS does not require an AD-700 for their clearance.

5. Obtain clearance of AD-672, sending forms and attachments to FMS, BFSAD, EMS, (all agencies except ERS). In ERS, the AO provides the clearance for agreements less than $50,000. For agreements that are $50,000 or more, the AO attaches a note to the AD-672, and sends it to the Director of Central Operations for clearance.

6. In NASS only (under current delegations), sign form AD-703.

7. Send cleared agreement package to the other agency for authorized signature.

8. Obtain authorized agency signature.

9. Send copies of fully executed agreements to:

a. Requesting agency;

b. FMS, BFSAD, EMS (two copies) with an AD-703; and

c. Branch Chief or designated project leader.

10. Inform FMS of any new project codes or accounting codes established for the agreements.

11. Reconcile monthly NFC accounting reports with the agency's internal fund control records. Prepare AD-757 (see Exhibit D), to correct any discrepancies.

E. Budget, Finance and Systems Automation Division, EMS, Staff:

1. Budget Analysts. Review proposed reimbursable interagency agreement for proper terminology and the conformance of the financing arrangements to applicable law and regulations.

2. Ensure entry of the agreement's assigned new project code into the NFC Accounting Code Master file by using the on-line MASC system.

3. Assign agreement numbers, for all agencies except ERS. In ERS the agreement numbers are assigned by the AO (see Exhibit A for the structure of the number).

4. Head, FMS, sign all AD-703's, except those for NASS.

5. Submit signed reimbursable interagency agreement and AD-703 provided by the AOs and Budget Assistants to NFC.

6. Assist agency AOs or Budget Assistants, as needed, to reconcile agency and NFC records.

7. Maintain BFSAD files and related accounting records to monitor agreements involving the transfer of funds.

8. Prepare Status of Reimbursable Project Report to compute billable amount to assist NFC's billing process.

III. Procedures For Entering Into New Reimbursable Interagency Agreements. An agency enters into a reimbursable interagency agreement when program officials (Branch Chief or designated project leader) complete negotiations and formulate terms with the requesting agency, and when authorized officials of both agencies grant final approval.

The performing agency may incur expenses against the reimbursable interagency agreement after an authorized officer of each agency has signed the agreement. However, if the performing agency is reasonably certain the agreement will be executed and the work is part of the performing agency's ongoing program as authorized by their annual appropriations then the performing agency may begin work on the project and charge subsequent expenditures to the appropriate project code with the understanding that if the agreement is not executed, the performing agency must absorb the expenses already incurred on the project with the performing agency's funds. Any charges made to a project code established for an agreement that is not subsequently executed must be transferred to a regular project code on an AD-757.

A. Plan for Providing Goods or Services to Another Federal Agency.

1. Identify the nature of the request and obtain preliminary approval. Branch Chief or designated project leader prepares brief justification and descriptions, highlighting the objectives, expected outputs, and estimated net costs of proposed agreement and obtains preliminary approval from the Division Director.

2. Develop proposal for formal approval prior to final negotiation. After preliminary approval, Branch Chief or designated project leader prepares a proposal, to include the following wherever applicable, and obtains approval from the Division Director or designee:

a. Name of the agency requesting goods or services;

b. Brief description of proposed project, to ensure that only goods or services within the scope of the agency's mission are provided;

c. Planned methodology for performing the work;

d. Period of performance for each major segment of and total project;

e. Identification of required progress reports and expected output;

f. Responsibilities to be assumed by performing agency and requesting agency;

g. Proposed estimated total amount of the agreement, divisional obligations to be incurred in the current fiscal year, and funds to be reimbursed by the requesting agency; and

h. Identification of fiscal year of appropriation.

 

B. Negotiation. Following approval of the proposal, the two agencies negotiate the final provisions of the agreements. Negotiations confirm:

1. Description of goods and services to be provided;

2. Period of performance for each major segment and total project; and

3. Total direct costs the performing agency expects to incur in the project, applicable overhead and leave factor rates, calculated overhead and leave factor amounts, the amount to be reimbursed by the requesting agency, and the method of reimbursement.

C. Clearance - (All Agencies Except ERS).*

1. Branch Chief or designated project leader for NASS will forward a completed Form AD-672 to the responsible AO or Budget Assistant. All other agencies will forward detailed terms of the agreement to the responsible AO or Budget Assistant for preparation of the Form AD-672.

2. AO (NASS) and Budget Assistants (EAS, EMS, OE, and WAOB):

a. Assign a document control number;

b. Prepare an AD-700 for signature of authorized official and obtain signatures;

c. Prepare an AD-672 (EAS, EMS, OE, and WAOB);

d. Forward two copies of the signed AD-700 and proposed AD-672 to FMS, BFSAD, EMS; and

e. Retain original signed copy and related materials (prior approvals, etc.) to establish the agreement file.

 

3. Head, FMS, BFSAD, EMS:

a. Reviews the agreement (Budget Analysts will provide input);

b. Annotates it with necessary language changes;

c. Applies clearance block stamp on the AD-700 and denotes approval or disapproval of the agreement terminology and that the financing arrangements are relative to applicable law and regulations (NOTE: Any unusual financing arrangements requires approval of OBPA.);

d. Provides corrective guidance for agreements not using proper terminology or having a legitimate financial relationship. If an agency refuses to comply with necessary modifications, the agreement will be disapproved;

* ERS has an informal clearance procedure for all interagency agreements. All agreements for less than $50,000 must be cleared through the Division Administrative Officer before the agreement is signed by the Division Director. All agreements that are $50,000 or more must be cleared through the Director of Central Operations before the agreement is signed by the Administrator.

e. Assigns an agreement number for approved agreements (See Exhibit A for the structure of the number.);

f. Returns one copy of the document to the AO or Budget Assistant, along with the other material contained in the review package; and

g. Retains one copy in a holding file until a copy of the executed agreement is received.

D. Post-Clearance Activities.

1. The Branch Chief or designated project leader (NASS only) or Budget Assistant (EAS, EMS, OE, and WAOB) incorporates any changes to the package suggested during the clearance phase (ERS does not utilize the clearance phase).

2. The AO (ERS and NASS) or Budget Assistant (EAS, EMS, OE, and WAOB) sends three copies of the AD-672 to the appropriate representative of the requesting agency with a request that two copies be signed and returned.

3. When the signed copies are received, the AO or Budget Assistant obtains the signature of the Agency Head or other authorized official, keeps one copy, and distributes other copies as follows:

a. Requesting agency;

b. FMS, BFSAD, EMS (two photocopies of AD-672 with required AD-703 attached);

c. Branch Chief or designated project leader.

4. After receiving the signed agreement and AD-703, the responsible staff of FMS reviews it for accuracy and completeness. The Head, FMS signs the AD-703 for all agencies except NASS (the AO signs the AD-703). The FMS staff then submits one copy of the agreement with signed AD-703 to NFC.

5. Branch Chiefs or designated project leaders:

a. Upon receipt of signed copy of form AD-672, designate work assignments and instruct staff to charge all direct costs (including salaries, travel, automated data processing, etc.) to the project code assigned to the agreement;

b. Supervise staff performance, and issue progress and final reports as required by the requesting agency; and

c. Inform AO or Budget Assistant when project is completed, and transmit project file to the AO or Budget Assistant.

d. Signatures by both parties constitute authorization to incur expenses only up to the amount of the agreement. The performing agency should notify the funding agency at the point when estimated costs to be incurred are 85 percent of the agreement amount. Costs must be monitored to stay within the agreement amount. If costs are expected to exceed the agreement amount, the agreement must be amended or work must be stopped upon reaching the amount of the original agreement.

IV. Procedures For Amending Existing Reimbursable Interagency Agreements. The process for amendments is identical to the one used for new agreements (forms, clearances, etc.). Additional tasks added to an agreement should fall within the general scope of the original agreement. Otherwise, a new agreement should be negotiated and cleared.

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