General Information and Requirements 61.1. General. These instructions on apportionment and budget execution for Federal credit programs reflect the requirements of the Federal Credit Reform Act of 1990, hereafter referred to as the Act. The Act is found at Title V of the Congressional Budget Act of 1974, as amended by section 13201 of the Omnibus Budget Reconciliation Act of 1990. The major purposes of the Act are to: --measure more accurately the costs of Federal credit programs; --place the cost of credit programs on a budgetary basis equivalent to other Federal spending; --encourage the delivery of benefits in the form most appropriate to the needs of beneficiaries; and --improve the allocation of resources among credit programs and between credit and other spending programs. The Act requires all estimated subsidy costs arising from direct loan obligations and loan guarantee commitments made in 1992 and later years to be recorded in program accounts. All other cash flows arising from direct loan obligations and loan guarantee commitments made in fiscal year 1992 and later years are recorded in separate direct loan and guaranteed loan financing accounts. These financing accounts are not included in the budget totals. The net cash flows for these direct and guaranteed loan transactions are recorded outside the budget totals as a means of financing the deficit. Only the unreimbursed costs of making new loans and guarantees--i.e., the subsidy costs (on a net present value basis) and the administrative expenses (on a cash basis)--are counted in the budget totals. 61.2. Coverage. These instructions apply to all direct loan and loan guarantee programs. Section 506 of the Act exempts certain credit programs from credit reform budgeting. These programs are still required to follow other instructions contained in this Circular. 61.3. Requirement for appropriations. New direct loan obligations may be incurred and new loan guarantee commitments may be made only if: --appropriations of budget authority to cover their costs are made in advance; --a limitation on the use of funds otherwise available for the cost of a direct loan or loan guarantee program is enacted; or --authority is otherwise provided in appropriation acts. Exemptions from this requirement for programs considered mandatory will be specified by OMB pursuant to section 504(c) of the Act. Terminology and Concepts 62.1. General. Pursuant to the Act, the subsidy cost and administrative expenses of a direct or guaranteed loan are recorded in a separate program account. All other cash flows of a direct loan or loan guarantee are recorded as transactions in a separate financing account or as transactions between these separate accounts. Funds within these separate accounts are further classified by the year in which they were obligated, committed, or received appropriations and the degree of subsidy the loan or guarantee requires. 62.2. General definitions. For the purpose of this Circular, the following definitions and treatments apply: (a) Pre-1992 refers to direct loan obligations and loan guarantee commitments made before the beginning of fiscal year 1992, i.e., before October 1, 1991, and the resulting direct loans and loan guarantees. (b) Post-1991 refers to direct loan obligations and loan guarantee commitments made after the beginning of fiscal year 1992, i.e., after October 1, 1991, and the resulting direct loans and loan guarantees. (c) A direct loan is a disbursement of funds by the Government to a non-Federal borrower under a contract that requires repayment of such funds with or without interest. The term includes the purchase of, or participation in, a loan made by a non-Federal lender. The term also includes the sale of a Government asset on credit terms of more than 90 days duration. The term does not include the acquisition of federally guaranteed non-Federal loans in satisfaction of default or other guarantee claims (see section 62.2(d)) or the price support loans of the Commodity Credit Corporation. (d) A direct loan obligation is a legal or binding agreement by a Federal agency to make a direct loan when specified conditions are fulfilled by the borrower. Acquisitions of federally guaranteed non-Federal loans in satisfaction of default or other guarantee claims are not recorded as direct loan obligations. Instead, the amounts are recorded: --as obligations incurred for default claims in budget execution reports; --in object class 42 (insurance claims and indemnities), rather than object class 33 (investments and loans); and --as loans receivable from the public on the balance sheet for financing accounts. For those programs that were financed by the Federal Financing Bank (FFB) prior to credit reform, pre-1992 loans made by the FFB on behalf of any agency continue to be recorded as direct loans. Post-1991 loans financed by the FFB are treated in the same manner as loans financed by other means, i.e., the nonsubsidized portion is financed through the financing accounts and the subsidy value is paid by the agency program accounts to the financing accounts. (e) The direct loan subsidy cost is the estimated long-term cost to the Government of a direct loan, calculated on a net present value basis, excluding administrative costs. Specifically, the subsidy cost of a direct loan is the net present value, at the time the direct loan is disbursed from the financing account, of the following cash flows: --loan disbursements; --repayments of principal; and --payments of interest and other payments by or to the Government over the life of the loan including estimated defaults, prepayments, fees, penalties, and other recoveries. The subsidy cost of a direct loan that is disbursed in more than one payment is the sum of the net present values of each separate disbursement. (f) A loan guarantee is any guarantee, insurance, or other pledge with respect to the payment of all or a part of the principal or interest on any debt obligation of a non-Federal borrower to a non-Federal lender, but does not include the insurance of deposits, shares, or other withdrawable accounts in financial institutions. (g) A loan guarantee commitment is a legally binding agreement by a Federal agency to make a loan guarantee when specified conditions are fulfilled by the borrower, the lender, or any other party to the guarantee agreement. (h) The loan guarantee subsidy cost is the estimated long-term cost to the Government of a loan guarantee, calculated on a net present value basis, excluding administrative costs. Specifically, the subsidy cost of a loan guarantee is the net present value, at the time when the guaranteed loan is disbursed by the lender, of the following cash flows: --estimated payments by the Government to cover defaults and delinquencies, interest subsidies, and other payments; and --estimated payments to the Government including origination and other fees, penalties, and recoveries. The subsidy cost of a guaranteed loan that is disbursed in more than one payment is the sum of the net present values of each separate disbursement. (i) Financing authority (gross) is the authority provided by the Act to incur obligations in a financing account. It consists of spending authority from offsetting collections credited to the account and authority to borrow from the Treasury. The spending authority from offsetting collections is the amount net of repayment of borrowing from the Treasury. (j) The following types of technical assumptions are to be used in apportioning and obligating direct loans or committing loan guarantees and in calculating reestimates of the subsidy after direct or guaranteed loan disbursement. --Economic assumptions include the interest rate used for discounting cash flows and the rate of inflation. They also include the interest rate charged to the borrower on the loan, if the rate is tied to a variable benchmark, such as the rate on specified Treasury securities. --Explicit technical assumptions are the terms and conditions made explicit in the contract between the U.S. Government and the borrower. These assumptions are forecast in the original subsidy estimate, but are known at the time of loan origination. They are documented, actual factors which are contained in the original loan contract. They may include: the interest rates charged on loans, the extent of a guarantee, fees, repayment terms, collateral held, and other factors such as grace periods. --Forecast technical assumptions are factors that affect the expected cash flows of the loan or guarantee but are not explicitly included in the loan agreement. They are factors which are estimated, but not actually observable, at the time of loan origination or modification. They include: default rates, timing of defaults, delinquency rates, late fees, proceeds from the sale of collateral or acquired defaulted loans, income from (and costs of managing) foreclosed collateral and acquired defaulted guaranteed loans, reschedulings, prepayments, loan asset sales, and disbursement rates. (k) The program account is the budget account into which an appropriation to cover the subsidy cost of a direct loan or loan guarantee program is made and from which such cost is disbursed to the financing account. Usually, a separate amount for administrative expenses is also appropriated to the program account. Each program account is associated with one or more financing accounts. (l) The financing account is the non-budget account or accounts associated with each credit program account which holds balances, receives the subsidy cost payment from the credit program account, and includes all other cash flows to and from the Government resulting from post-1991 direct loans or loan guarantees. Separate financing accounts are required for direct loans and loan guarantees. (m) The liquidating account is the budget account that includes all cash flows to and from the Government resulting from unmodified pre-1992 direct loans or loan guarantees. (n) A cohort is all direct loans obligated or loan guarantees committed by a program in the same fiscal year, even if disbursements occur in subsequent fiscal years or if the loan is modified. For post-1991 direct loans and loan guarantees subsidized by multi-year and no-year appropriations, the cohort may be defined either by the year of obligation or by the year of appropriation. OMB should be consulted to determine which method is appropriate. Post-1991 direct loans and guaranteed loans remain with their original cohort throughout the life of the loan, even if the loan is modified. Pre-1992 direct loans that are modified constitute a single cohort. Pre-1992 loan guarantees that are modified likewise constitute a single cohort. Accounting and other records are maintained separately for each cohort of loans. (o) A risk category is a subdivision of a cohort of direct loans or loan guarantees into a group of loans that are relatively homogenous in cost, given the facts known at the time of obligation or commitment. Risk categories are required to be used whenever the new direct loans obligated or loan guarantees committed within a cohort are not relatively homogenous in cost. These risk categories group together all loans obligated or guarantees committed for a program during the year that share characteristics predictive of defaults and other costs. Risk categories are developed by agencies in consultation with OMB. The number of categories depends on the size of the differential in subsidy cost between categories and the ability to predict the differential statistically based on facts known at origination. Risk categories may be defined by characteristics or combinations of characteristics of the loan, the project financed, and/or the borrower. Examples of characteristics or indicators that may predict cost include the loan-to-value ratio, the relationship between the loan interest rate and relevant market rates, and various asset or income ratios. Borrower-category characteristics such as type of school attended for education loans, or country risk categories for international loans, may be taken into account. If multiple characteristics or indicators are used, one may cross-classify another, or mathematical combinations may be used. However the risk category is defined, statistical evidence must be presented, based on historical analysis of program data or comparable credit data, as to the likely costs--whether defaults, other deviations from contract, or other costs--that are expected to be associated with the loans in that category. 62.3. Interest computation. (a) General.--The following paragraphs describe computations for calculating interest expenses on borrowing from Treasury and interest income on uninvested funds in financing accounts. The detailed computations are illustrated in a series of exhibits (Exhibits 62A-L). Alternative methods are discussed in section (g). (b) Frequency of interest computations.--OMB has determined that most credit programs do not have a seasonal bias in their loan disbursement patterns. Consequently, interest expense and income calculations for cohorts that are currently disbursing will be based on an assumption that the actual loan amounts disbursed during the year were disbursed equally throughout the four quarters. This assumption allows agencies to compute interest expense and interest income annually, at the end of each fiscal year, using the average annual interest rate provided by OMB and Treasury. Quarterly or monthly computations are not required. In those few programs that have a strong seasonal pattern, special weighted average interest rates appropriate to these patterns should be calculated. (c) Weighted average interest rate.--The Act provides that the interest rate for borrowing will be assigned on the basis of the Treasury rate in effect during the period of loan disbursement. Many individual loans are disbursed in segments over several quarters or even years. Consequently, several interest rates can be applicable to an individual loan. To simplify the recordkeeping, a single weighted average interest rate is maintained for each cohort and is adjusted each year until all the disbursements for the cohort have been made. Each year, the current year average annual interest rate is weighted by current year disbursements and merged with the prior year's weighted average to calculate a new weighted average. (d) Procedure for direct loans.--Each direct loan disbursement is financed by two sources--subsidy transferred from the program account and borrowing from Treasury. As each loan is disbursed by the financing account to the individual borrower, subsidy funds are transferred from the program account to the financing account. The financing account makes a single borrowing from Treasury at the beginning of each fiscal year, separately for each cohort, on the basis of the estimated net loan disbursements for the cohort. All borrowing is dated October 1. Interest expense is not affected by whether all borrowed funds were disbursed or whether the original borrowing had to be supplemented later in the year. Any additional borrowing is also dated October 1st, and the entire amount is treated as a single borrowing. The disbursement status does affect the amount of borrowed cash retained in the financing account and consequently the computation of interest income. Interest expense accrues on the debt and interest income accrues on the undisbursed balance of the Treasury borrowing. The undisbursed balance of Treasury borrowing is held as uninvested funds in Treasury and earns interest. The interest rate earned on the uninvested funds equals the interest rate paid on borrowing from Treasury. Hence, the interest earned on undisbursed balances exactly offsets the interest paid on the debt that financed those balances. (e) Procedure for loan guarantees.--The basic purpose of a financing account for loan guarantees is to accumulate funds to finance future defaults. Subsidy payments for loan guarantees are retained in the financing account for lengthy periods and earn interest income. The interest rate for cash accumulations related to each loan guarantee is determined by the date that the commercial lender (not the Federal agency) disburses the loan being guaranteed. Since a variety of interest rates are applicable in each cohort, averages are used. Program agencies must rely on lender reporting for their information. Because of delayed reporting, the interest income settlements with Treasury at the end of the fiscal year will include an estimate of fourth quarter lender disbursements and collections. The estimate will be adjusted as actual lender data is accumulated. (f) Treasury reporting requirements.--Additional instructions on Treasury reporting requirements, interest rates, borrowings, and interest on uninvested funds are published in the Treasury Financial Manual. (g) Alternative methods for calculating interest.--Agencies may calculate interest earnings and interest payments by the use of financing tranches, as described in OMB Bulletin No. 92-01 (October 1, 1991). Financing tranches are subdivisions of the database which associate Treasury interest rates at disbursement with individual loans. Agencies may also submit other alternative methods for approval by Treasury and OMB. Prior approval is necessary to ensure that these methods are at least as precise as the method prescribed in this circular and to provide an approved standard for auditing. 62.4. Administrative expenses. (a) Background.--The program account receives an appropriation for the subsidy costs of credit programs and an appropriation for the administrative expenses of both pre-1992 and post-1991 direct loans and loan guarantees. Credit administrative expenses shall be paid from the program account. (b) Administrative expenses paid by the program account.--The program account shall pay all administrative expenses, defined as the portion of the total salaries and expenses that are directly related to credit program operations. Expenses that are tangentially related to credit program operations should not be included. Administrative expenses include: --the cost of all activities related to: -credit extension; -loan servicing; and -write-off and close out; --the appropriate proportion of administrative expenses that are shared with non-credit programs; --the cost of operating separate offices or units that make policy decisions for credit programs; --the cost of loan systems development and maintenance, including computer costs (under no circumstance will computer systems costs be paid out of the financing account); --the cost of monitoring credit programs and private lenders for compliance with laws and regulations; and --the cost of collecting delinquent loans, except for the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. (c) Expenses paid by the financing account.--The capitalized costs of foreclosing, managing, and selling collateral are to be paid by the financing account. Capitalized costs are those that add value to property prior to sale. Costs that are routinely deducted from the proceeds of the sales of collateral are also to be paid by the financing account. Both of these types of costs are part of the cash flows that must be taken into account in calculating the subsidy costs. Since the financing account receives the subsidy cost from the program account, the financing account shall pay these costs. Examples of the costs of foreclosing, managing, and selling collateral that are excluded from administrative expenses if capitalized or routinely deducted from sales proceeds are: --commercial sales commissions; --closing fees; --property taxes and fees to acquire clear title; --property assessments; --seller points; --hazard insurance; and --hazard claims. Questions as to whether a specific cost should be paid from the financing account or the program account should be directed to OMB. (d) Accounting for administrative expenses.--Administrative expenses and subsidy costs are accounted for separately in the program account. The separate accounting for administrative expenses is intended to provide a measure of the total cost of administering the credit program. This separate accounting should cover all administrative expenses for both pre-1992 and post-1991 direct loans and loan guarantees with the following exception. For programs with no post-1991 direct loan obligations or loan guarantee commitments, and no pre-1992 direct loan or loan guarantee modifications, administrative expenses will be included in the liquidating account containing such expenses prior to the Act. (e) Use of administrative expenses.--Amounts appropriated for administrative expenses may not be used for subsidy costs, and amounts appropriated for subsidy costs may not be used for administrative expenses. Administrative or other expenses for non-credit programs should not be paid by the appropriation for credit administrative expenses in the program account. (f) Direct or reimbursable expenses.--The program account may pay administrative expenses directly or it may reimburse another account, via an expenditure transfer, when specified in appropriations language. In the latter case, the program account records an obligation in object class 25.3 "Purchases of goods and services from Government accounts" and an outlay. The receiving account records an offsetting collection and reimbursable obligations in the appropriate object class. 62.5. The credit subsidy model. The credit subsidy model will be used for estimating credit subsidies to ensure comparability and uniformity among all Federal credit program subsidy estimates and between budget formulation and execution. Detailed instructions on estimating the subsidy for budget execution will accompany the model. A PC disk containing the computer model and technical support for estimating subsidies can be obtained from the Budget Analysis and Systems Division, OMB (phone (202) 395-3930). Direct and Guaranteed Loan Transactions 63.1. Risk categories. When a direct loan is obligated or a loan guarantee is committed, it is placed in an appropriate risk category. The technical factors (defaults, delinquencies, other potential deviations from the contract, and other costs) associated with that risk category are used to calculate the expected cash flows from that loan or guarantee. The net present value of these cash flows, discounted by the interest rate (yield) on marketable Treasury securities of comparable maturity to the loan, is the subsidy estimate for that loan or guarantee. All loan records necessary to measure the accuracy of the subsidy, including records for defaulted or prepaid loans, must be retained by cohort and risk category as long as any loans from that cohort and risk category are outstanding. These data are used to reestimate the subsidy annually for each risk category. 63.2. Initial estimate of the subsidy cost. When a direct loan is obligated or a loan guarantee is committed, the direct loan subsidy cost or loan guarantee subsidy cost is estimated. The amount of the estimated subsidy cost is recorded as an obligation in the credit program account (line 8.A on S.F. 143GLP or S.F. 143DLP) and as an offsetting collection/earned receivable in the financing account (line 3.B.(5) on S.F. 143GLP or S.F. 143DLP). The same amount is recorded as accounts payable in the program account and as accounts receivable in the financing account. Once the subsidy cost is obligated in the credit program account, it is an obligated balance until the direct loan, or a portion of the direct loan, is disbursed from the financing account or until the guaranteed loan, or a portion of the guaranteed loan, is disbursed by the private lender. Total obligations for subsidy costs may not exceed the amount appropriated for this purpose. When calculating the subsidy to be used in obligation of subsidy budget authority, the forecast technical assumptions for discretionary programs shall remain the same as those used for the corresponding risk category in the President's Budget for the fiscal year in which the subsidy was proposed, unless legislation (appropriations or other) mandates a specific change. For mandatory programs use the forecast technical assumptions from the Mid-Session Review, which may have been revised since the President's Budget. The forecast technical assumptions include the method (including the subsidy model) underlying the calculation of the subsidy, which shall not change from that used in preparing the estimates for the President's Budget for the fiscal year in which the subsidy was proposed. In general, country risk ratings in international credit programs are subject to the foregoing requirements. However, where unforeseeable, substantial, and sustainable change in a country's ability or willingness to repay occur after passage of legislation, a new country risk rating will be reflected in the calculation of the subsidy at the point of obligation. The explicit technical assumptions used in calculating the subsidy at obligation shall reflect the terms contained in the written agreements between the Government and the borrowers. If the subsidy rates are not calculated on a loan-by-loan basis, then the terms used in estimating the subsidy will be the same as those used for the President's Budget for the fiscal year in which the subsidy was proposed. Assumptions shall be updated to reflect enacted legislation and any regulatory action which change the terms under which the program makes or guarantees loans. Exemptions to these requirements must be approved in advance by OMB. The discount rate used to calculate net present values in estimating the subsidy cost is the applicable interest rate in the quarter when the direct loan is obligated or the loan guarantee is committed. The rate to be used is the Treasury interest rate appropriate for a security of comparable maturity, using the current quarter rates distributed through the Commerce Economic Bulletin Board. For programs that disburse loans over two or more fiscal years after direct loan obligation or loan guarantee commitment, a change in method has been made beginning with subsidy budget authority obligated in FY 1996. When calculating the subsidy at obligation for these programs, the discount rate for the disbursement in the current year will reflect the current quarter's rate (as above), and the discount rates for disbursements in subsequent years will reflect the rates that were estimated to prevail for those years for which the appropriation was requested. 63.3. Negative subsidy costs. The estimated subsidy cost of direct loans or loan guarantees may be negative. Negative subsidies occur in cases where the present value of cash inflows to the Government exceeds the present value of cash outflows. In such cases appropriations bills must still provide specific authority before direct loans or loan guarantees can be made. Providing such authority will generate proprietary receipts, which are one type of offsetting receipt. If the estimated subsidy for a risk category within a cohort is less than zero, the following treatment will apply: --a special fund receipt and expenditure account known as a negative subsidy account will be used for that program; --an amount equal to the negative subsidy will be obligated in the financing account when the direct loan is obligated or loan guarantee is committed; --an amount equal to the negative subsidy will be paid from the financing account to the receipt account when the direct loan or guaranteed loan is disbursed; --these payments will be recorded in the receipt account as proprietary receipts from the public; --these receipts will not be available for obligation or disbursement unless appropriated by law; and --any appropriation or expenditure of the receipts will be recorded in the program account. It should be noted that obligations may not be incurred against appropriations of receipts until the receipts have actually been credited to the receipt account. In some cases, the receipts will not be available until after obligations for subsidy costs (or, possibly, administrative costs) need to be incurred in order for the program to operate as planned. This is because the receipts from negative subsidies are not credited to the receipt account until the underlying direct or guaranteed loan is disbursed. Such situations may require an appropriation from the general fund sufficient to permit obligations until adequate receipts are available. Negative subsidy receipts for mandatory programs may be credited directly to the program account as offsetting collections (a special fund account is not required). Such collections are permanent budget authority (spending authority from offsetting collections) for subsidy costs, including new subsidy costs, reestimates, and modifications. Such collections are available for administrative expenses only to the extent provided in annual appropriations acts. The amount of offsetting collections that is precluded from obligation in a fiscal year by a provision of law (such as a limitation or a benefit formula) is not budget authority in that year. Instead, the amount increases the balance of unavailable collections for that year. Budgetary resources in mandatory accounts must be obligated, as needed, in the following order: --spending authority from new offsetting collections; --spending authority from balances of offsetting collections precluded from obligation in a prior year; and --appropriations of new budget authority from the general fund. 63.4. Loan disbursement. When a direct or guaranteed loan is disbursed, the financing account receives a payment from the credit program account equal to the subsidy cost of the loan multiplied by the proportion of the loan being disbursed. The subsidy rate used to determine the subsidy cost will be the same as the rate used at obligation. This payment is recorded as an outlay in the program account and as an offsetting collection in the financing account (line 3.B.(1), 3.B.(2) or 3.B.(3), as appropriate, on S.F. 143GLF or S.F. 143DLF). (1) Direct loan transactions.--The subsidy cost payment provides part of the financing authority for a direct loan. Permanent indefinite authority to borrow from the Treasury provides the financing authority for the balance of the direct loan disbursement. (2) Guaranteed loan transactions.--The subsidy cost payments for loan guarantees are retained as unobligated balances of the financing account to finance a portion of the guarantee claim payments (or other payments) for a cohort of loan guarantees. These balances are held as uninvested funds. They earn interest from the time that they are credited to the financing account until they are disbursed for claim payments (or other payments). The unobligated balances are used to make claim payments, to pay interest supplements, or to pay the capitalized costs of foreclosing, managing, and selling collateral assets acquired as a result of defaults on loan guarantees and to pay the costs routinely deducted from the proceeds of sales. When obligations are incurred, these amounts are carried as obligated balances until payments are disbursed. 63.5. Non-subsidy collections. Repayments of direct loan principal, interest on direct loans, fees, proceeds from the liquidation of collateral assets, and other collections are credited to the appropriate cohort and risk category in the guaranteed or direct loan financing account as offsetting collections. Each type must be accounted for separately. Together such collections create a balance that earns interest from Treasury. Interest will be calculated as of September 30 of each year, using the weighted average interest rate for the cohort of the direct loan or loan guarantee (see section 62.3). All non-subsidy collections for a cohort in the financing account shall be used for that cohort in the following order: (1) to pay the capitalized costs of foreclosing, managing, and selling collateral assets acquired as the result of defaults on direct or guaranteed loans and costs that are routinely deducted from the proceeds from sales (see section 62.4 for items that qualify); (2) to maintain an unobligated balance to pay such capitalized costs or routinely deducted costs, if any; (3) to make annual payments of interest that accrue on borrowing from Treasury; and (4) to make repayments of principal on amounts borrowed from Treasury with any remaining amounts. Financing authority derived from non-subsidy collections may not be used to finance new direct loans. Only financing authority derived from offsetting collections of payments from the program account for subsidy costs and authority to borrow from the Treasury may be used to finance direct loans. Reestimates 64.1. General. A reestimate is a change in the net present value of estimated cash flows due to changes in technical assumptions and interest rates. Reestimates of the subsidy cost of direct loans or loan guarantees are made at the beginning of each fiscal year following the year in which a disbursement is made, as long as the loans are outstanding. Each risk category must be reestimated separately. The reestimate is made using the same method as was used for the initial estimate. It is then compared with the previous estimate. For this purpose, all details of the original subsidy estimates and all subsequent reestimates should be retained in program records. Any reestimate of the required subsidy in any risk category during the annual review should lead to a review of the accuracy of the technical factors by risk category in making subsidy estimates for the next budget. If the annual reestimate results in a cost that is both less than $1 million and 5 percent or less of the pre-reestimate subsidy value currently recorded in that cohort, a change in the recorded obligation is not necessary. In the subsequent year, the reestimate for an unadjusted cohort will cover cumulatively the entire period since the last change in the recorded obligation. To distinguish different factors affecting changes in subsidy costs, three types of reestimates are made. Specifically: --Interest rate reestimates adjust the original subsidy estimates for any difference between the interest rate when the direct or loan guarantee was obligated (the interest rate used to calculate the initial subsidy estimate) and the interest rate when the direct or guaranteed loan was disbursed. An interest rate reestimate is done after the end of every fiscal year in which part of a loan is disbursed. --Technical/default reestimates adjust the subsidy estimate for differences between the original amount and timing of expected cash flows as estimated at obligation and the amount and timing that are currently expected based on such factors such as actual experience, new forecasts about future economic conditions, and improvements in the methods used to estimate future cash flows. Because actual cash flows are experienced every year and the ability to forecast future years also changes, this reestimate is done after the end of every fiscal year as long as any loans are outstanding. --A closing reestimate is made once all the loans in the cohort have been repaid or written off. 64.2. Interest rate reestimates. An interest rate reestimate will compare the original subsidy estimate at the point of obligation with the subsidy estimate using the interest rate applicable at disbursment. The reestimate will be made by risk category. The subsidy cost reestimate in the year immediately following any disbursement of a direct or guaranteed loan adjusts the initial subsidy estimate for any difference between the two rates. All other assumptions of the initial estimate are held constant. Once made, this reestimate is compared to the original subsidy estimate to calculate the amount of the reestimate. The interest rate reestimate is made only once for each disbursement from a cohort. If a loan disburses over more than one year, the interest rate reestimate in the second year is made only for the portion of the loan disbursed in the first year. Reestimates are made in following years for the portions disbursed in the years after the first year. They are calculated in comparison to the original estimate (i.e., the estimate before any reestimate for technical factors other than interest and without regard to previous interest rate reestimates on portions of the loan disbursed earlier.) For loans with variable interest rates, the interest rate adjustment is made to cash flows as well as the discount rate used to estimate the subsidy cost. The interest rate reestimate includes this effect on cash flows. 64.3. Technical/default reestimates. Technical/default reestimates.--Technical/default reestimates are made for changes in the technical/default assumptions used to calculate the subsidy. This type of reestimate will compare the subsidy estimate that already includes the reestimate for the actual interest rate with a reestimated subsidy using updated technical information (for defaults, fees, recoveries, etc.). 64.4. Procedures for calculating interest and technical/default reestimates. Section 33.11 of OMB Circular No. A-11 contains specific instructions on calculating reestimates. 64.5. Closing reestimates. Agencies will make a closing technical/default reestimate when all of the loans in a cohort have been either repaid or written off. This reestimate is based on actual accounting systems data and is to close the accounting books for the cohort. All the procedures are applied that are described for the technical/default reestimate and interest on reestimates. The allocation of the reestimates and interest is by cohort. Closing entries will be made in the accounting records. 64.6. Interest on reestimates. An estimate must also be made for interest that would have been earned by each cohort on the amount of the reestimates. The amount of this estimate will be transferred to or from the financing account with the amount of the reestimate itself, as described subsequently in this section. 64.7. Reestimate recording procedures. All increases or decreases in subsidy cost for different categories within the same cohort are netted against each other; i.e., risk categories which require increased subsidies may first draw on the excess from any risk categories within the cohort where the reestimate shows a subsidy decrease. No such netting may occur between cohorts. (1) Net increase in subsidy cost.--If a reestimate for a cohort is positive, it indicates a net increase in the subsidy cost of the cohort as a whole since the last estimate (after transfers to any risk categories within the cohort for which the reestimate indicates a decrease in subsidy cost). In this case, the agency will request apportionment of the amount of the net increase (including interest on the reestimate). After the amount of the net increase is apportioned, an obligation for this amount is recorded (on line 8 on S.F. 143DLP or 143GLP, Federal resources section) against the permanent indefinite budget authority available to the program account for this purpose. At the same time, an outlay for the same amount is made from the program account to the financing account. Obligations for subsidy cost increases resulting from reestimates must be recorded separately so that they can be distinguished from obligations for the initially estimated subsidy cost. At the time that an outlay is made from the credit program account, an offsetting collection is recorded (on line 3.B.(2) on S.F. 143DLF or 143GLF) in the appropriate risk categories and cohort in the financing account. In the case of direct loans, the offsetting collections from the program account are used, together with repayments from borrowers, to pay interest and repay principal on borrowing from Treasury and for other expenses. In the case of loan guarantees, the offsetting collections from the program account are retained as unobligated balances, together with the unobligated balances of the original subsidy payment and fees, until needed to pay default claims and other expenses. The additional balances due to the reestimate earn interest at the same rate as is paid on other funds held by the financing account for the same cohort as the original direct loan or loan guarantee. (2) Net decrease in subsidy cost.--If the reestimate for a cohort is negative, it indicates a net decrease in the subsidy cost of the cohort as a whole since the last estimate (after transfers to any risk categories within the cohort where the reestimate indicates an increase in subsidy cost). An obligation in the amount of the net decrease (including interest on the reestimate) is recorded (on line 8.D, S.F. 143GLF or line 8.E, S.F. 143DLF) in the financing account. In the case of a direct loan, the obligation is recorded against authority to borrow from the Treasury. In the case of a loan guarantee, the obligation is recorded against unobligated balances For discretionary programs, in the case of either direct loans or loan guarantees, a disbursement (including interest on the reestimate) is made from the financing account to a special fund receipt account established for each credit program. The receipts in the special fund are not available for obligation for the subsidy costs of new direct loans and loan guarantees or other purposes except to the extent provided in advance in annual appropriation acts. For mandatory programs, receipts may be credited directly to the program account as offsetting collections (a special fund account is not required). Such collections are permanently appropriated as budget authority (spending authority from offsetting collections) for subsidy costs, including new subsidy costs, reestimates, and modifications. Such collections are available for administrative expenses only to the extent provided in annual appropriations acts. The amount of offsetting collections that is precluded from obligation in a fiscal year by a provision of law (such as a limitation or a benefit formula) is not budget authority in that year. Instead, the amount increases the balance of unavailable collections for that year. Budgetary resources in mandatory accounts must be obligated, as needed, in the following order: --spending authority from new offsetting collections; --spending authority from balances of offsetting collections precluded from obligation in a prior year; and --appropriations of new budget authority from the general fund. 64.8. Timing of reestimates. At the discretion of OMB interest or technical reestimates can be deferred to March of the following year. Modifications 65.1. General. The following instructions for estimating subsidies and recording transactions apply to both direct and indirect modifications of direct loans and loan guarantees. A modification is a Government action that alters the estimated subsidy cost of an outstanding direct loan (or direct loan obligation) or loan guarantee (or loan guarantee commitment) from the estimate based on the cash flows contained in the most recent budget submitted to Congress. A modification does not include Government actions permitted within the terms of existing contracts or through other existing authorities. Existing authorities are those authorities that apply to specific loans or a specific group of loans, not generic authorities available to an executive branch official. Both a Government action and an alteration in subsidy cost are necessary conditions for a modification; a reestimate is not a modification. A modification may result from either new legislation or administrative action; it may apply to a single loan or guarantee as well as a group; it may be of any size; it may apply to pre-1992 direct loans and loan guarantees as well as post-1991 direct loans and loan guarantees; and it may affect cash flows either directly or indirectly. Direct modifications change the subsidy cost by altering the terms of existing contracts, by selling loan assets, or by purchasing loan guarantees. The subsidy cost may be increased or decreased, for example by changing terms for: forgiveness, forbearance, reductions in interest rates, extensions of maturity, and prepayments without penalty. Such actions are modifications unless they are considered work-outs as defined below, are permitted within the terms of existing contracts, or are permitted through other existing authorities. Indirect modifications change the subsidy cost by legislation that alters the way in which an outstanding portfolio of direct loans or loan guarantees is administered. Examples include a new method of debt collection prescribed by law or a statutory restriction on debt collection. An indirect modification produces a one-time effect on the subsidy cost of outstanding direct loans (and direct loan obligations) and loan guarantees (and loan guarantee commitments). For direct loan obligations and loan guarantee commitments made after the enactment of such legislation, the effects of the legislation are included in the original subsidy cost estimates (or in subsequent cost reestimates) and are not a modification. The term "modification" does not include the routine administrative work-outs of troubled loans or loans in imminent default. Work-outs are actions undertaken to maximize repayments under existing direct loans or to minimize claims under existing loan guarantees. For post-1991 direct loans and loan guarantees, the expected effects of work-outs on cash flow are included in the original estimate of the subsidy cost. Therefore, to the extent that the effects of work-outs on cash flow are the same as originally estimated, they do not alter the subsidy cost. If the effects of work-outs on cash flow are more or less than the original estimate, the differences in cash flow are included in reestimates of the subsidy cost and are not modifications. The term "modification" also does not include actions that are permitted within the terms of existing contracts, such as prepayment without penalty. For pre-1992 direct loans and loan guarantees, the effects of these actions do not have to be estimated. For post-1991 direct loans and loan guarantees, the expected effects of such actions on cash flow are included in the original estimate of the subsidy cost. Therefore, to the extent that the effects of such actions on cash flow are the same as originally estimated, they do not alter the subsidy cost. If the effects of such actions on cash flow are more or less than the original estimate, the differences in cash flow are included in reestimates of the subsidy cost and are not modifications. Neither the term "modification" nor the term "work-out" includes additional disbursements to borrowers that increase the amount of direct loans outstanding. These disbursements are considered to be new loans in the amount of the increment. When direct loans or loan guarantees are modified, the subsidy cost of the modification must be calculated. When post-1991 direct loans or loan guarantees are modified, a modification adjustment transfer between the financing account and the general fund must also be calculated. 65.2. Modification cost. A modification cost is any increase in subsidy cost that results from the modification of a direct loan or loan guarantee (or direct loan obligation or loan guarantee commitment). Specifically, it is the difference between the currently estimated net present value of the remaining cash flows under the terms of the previously existing direct or loan guarantee contract contained in the most recent budget submitted to Congress and the currently estimated net present value of the loan cash flows under the terms of the modified contract. 65.3. Estimating the modification cost. When a direct loan or loan guarantee is modified, the subsidy cost of the modification must be calculated. The modification cost is calculated as follows: (1) Estimate the remaining cash flows expected just before the modification under the loan contract terms assumed in the most recent budget submitted to Congress just before the modification. These estimates must assume the same deviations (defaults, delinquencies, etc.) from contract terms as assumed for the risk category in which the loan is classified. (2) Discount the cash flows estimated in step 1 by the applicable interest rate (yield) in the quarter when the modification occurs. The applicable interest rate is the interest rate (yield) on marketable Treasury securities that have a comparable maturity to the remaining maturity (not the original maturity) of the loan that is being modified (but prior to any modification of the loan). (3) Estimate the cash flows expected under the modified contract terms. For that portion of the cash flows unaffected by the modified contract terms, if any, these estimates must assume the same deviations (defaults, delinquencies, etc.) from contract terms as assumed for the risk category in which the loan is classified. (4) Discount the cash flows estimated in step 3 by the applicable interest rate (yield) in the quarter when the modification occurs. The applicable interest rate is the interest rate (yield) on marketable Treasury securities that have a comparable maturity to the remaining maturity (not the original maturity) of the loan that is being modified (after any modification of the term of the loan.) (If a loan asset is sold, the amount for this step equals the net proceeds from the sale.) (5) Subtract the amount calculated in step 4 from the amount calculated in step 2 to produce the estimated subsidy cost resulting from the modification. The results of this calculation will be positive, negative, or zero. A positive estimate indicates that the Government will incur an additional subsidy cost because of the modification. A negative estimate indicates there will be a savings. A zero estimate would indicate that the modification will not change the subsidy cost. 65.4. Credit accounting recording. Detailed guidance on the specific credit accounting transactions for modifications can be obtained from the Budget Concepts Branch, OMB (phone (202) 395-3172). Credit Apportionment and Reapportionments 66.1. Basis for apportionment. Unless specifically exempted by OMB, all program, financing, and liquidating accounts will be apportioned. The apportionment document signed by the responsible OMB officials and all attachments transmitted to the agency are a part of the apportionment, unless otherwise specified on the apportionment document. 66.2. Timing of requests. Consistent with section 44.2, initial apportionment requests for direct loans and guaranteed loans will be submitted to OMB within 10 calendar days after the enactment of the appropriations act. A reapportionment request is required for subsidy reestimates, which will be made at the beginning of each fiscal year (starting with the fiscal year following the year in which a disbursement is made) as long as the loans are outstanding (see section 64). A reapportionment request is required for subsidy modifications when the modification is approved by OMB (see section 65). 66.3. Types of apportionment. Credit accounts are apportioned in the same manner as non-credit accounts. This means that the credit accounts may be apportioned by time periods or by categories, or by a combination of time periods and categories, as determined by OMB. 66.4. Reporting format and procedures. Unless otherwise specified by OMB, an original and one copy of an apportionment form will be submitted to OMB. The original will be signed by an officer duly authorized by the head of the agency. The standard form 132 will continue to be used for liquidating accounts. For program accounts that contain credit administrative expenses for both direct loans and guaranteed loans: --standard form 142DL for direct loans will be used to apportion the direct loan subsidy, all administrative expenses in the program account, and the amounts in the corresponding direct loan financing account; and --standard form 142GL for guaranteed loans will be used to apportion the loan guarantee subsidy in the program account and the amounts in the corresponding guaranteed loan financing account. For program accounts that contain credit administrative expenses for guaranteed loans only, standard form 142GL for guaranteed loans will be used to apportion the administrative expenses, the subsidy for the loan guarantees in the program account, and the amounts in the corresponding guaranteed loan financing account. 66.5. Subsidy rates for apportionment. Subsidy rates to apportion subsidy budget authority are calculated using the following assumption: (a) Economic assumptions.--In general, the subsidy is to be recalculated each quarter. [Note: For some programs it will be calculated once a year at the beginning of the first quarter for changes in interest rates.] The rate to be used is the Treasury interest rate appropriate for a comparable maturity, using the current quarter rates distributed through the Commerce Economic Bulletin Board. (b) Explicit Technical Assumptions.--In general, these will be the same as those contained in the President's Budget for the fiscal year in which the subsidy was proposed. However, these assumptions should reflect current expectations about the terms to be contained in the written agreement between the Government and the borrower. Hence, in circumstances where the terms are known to have changed (either by administrative action or by law), these assumptions should be changed so that actual terms are reflected in the subsidy estimate. Any change in these assumptions from those contained in the President's Budget is subject to any reprogramming requirements that apply to the act providing the subsidy appropriation. (c) Forecast Technical Assumptions.--For discretionary programs, these assumptions shall remain the same as in the President's Budget for the fiscal year in which the subsidy was proposed, unless legislation (appropriations or other) mandates a specific change. Mandatory programs which had revised subsidy rates in the Mid-Session Review should use the forecast technical assumptions from the Mid-Session Review during apportionment. The forecast technical assumptions include the method (including the subsidy model) underlying the calculation of the subsidy, which should not change from the method used in preparing the estimates for the President's Budget for the fiscal year in which the subsidy was proposed. 66.6. Direct loan apportionment and reapportionment schedule (S.F. 142DL) and line entries. This section explains the line entries for the apportionment schedule (S.F. 142DL) for direct loans. Exhibit 63A provides an illustration of the initial apportionment (S.F. 142DL) for the direct loan program account and financing account. The schedule simultaneously apportions the direct loan program account and financing account (see exhibit 63A). The schedule is divided into two major sections. The top section is called "Federal resources"; the bottom section is called "Application of resources". "Federal resources" presents information on the budgetary resources available to the accounts. "Application of resources" presents the amounts apportioned. From left to right, the schedule is divided into three major sections: the amounts of the previous apportionment (if any); the agency request (if any); and the amounts apportioned by OMB. Within each of the three major sections, there are two columns: one for the program account and one for the financing account. The following explanation of the line entries for the direct loan apportionment and reapportionment schedule (S.F. 142DL) covers the specific lines and rules that are unique to direct loan program and financing accounts. The letter "P" (for program) or "F" (for financing) indicates the account for which this entry is appropriate. Part IV provides general procedures, line entries, and rules for apportionment and reapportionment schedules. To the extent that additional lines are needed, use the stub entries and definitions provided in Part IV upon approval by OMB. S.F. 142DL APPORTIONMENT OF DIRECT LOAN PROGRAM AND FINANCING ACCOUNTS ------------------------------------------------------------------------------- Line Entry Account Explanation ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Budget and financing authority: a. Subsidy: current definite P Enter the amount of definite appropriations for direct loan subsidies (including modifications) that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. This amount will be used to pay the financing account the subsidy to make new loans and modifications. b. Subsidy: current P Enter the amount of indefinite indefinite appropriations for direct loan subsidies for mandatory programs that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. c. Administrative expenses P Enter the amount of appropriations for administrative expenses that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. d. Subsidy: permanent P Enter the amount of permanent indefinite indefinite appropriations estimated to be required for subsidy cost reestimates or for the subsidy costs of certain mandatory programs. e. Permanent indefinite F Enter the amount of permanent indefinite authority to borrow authority to borrow from the Treasury that, when added to the subsidy, will equal the amount apportioned for direct loans on line 8.B.(2) o to pay interest to Treasury in the absence of adequate cashflow at the start of a loan cycle; o to pay the costs of foreclosing, managing, or selling collateral that are not capitalized or routinely deducted from sales proceeds when amounts set aside for collection are inadequate; and o to pay the liquidating account when modifications to pre-1992 direct loans are apportioned. f. Modification adjustment F Enter the amount of modification transfers adjustment transfers received from the general fund to be apportioned. ------------------------------------------------------------------------------- Line 3. Offsetting collections Include refunds of obligations incurred from: in prior fiscal years in the appropriate a. Non-Federal sources: category when the refunds are collected. (1) Fees collected F Enter the amount of fees collected. (2) Collections of principal F Enter the amount of repayments of principal collected. (3) Collections of interest F Enter the amount of interest collected. (4) Proceeds from collateral F Enter the amount of proceeds from collateral collected. This amount should be gross of the amounts that are routinely deducted from the proceeds of sales and the costs of foreclosing, managing, and selling collateral that are capitalized. (5) Other collections P or F Enter the amount of any collections received that are not categorized in lines (1) through (4). Mandatory program accounts may be credited with offsetting collections from financing accounts for downward reestimates. (6) Earned or anticipated P or F Enter the amounts that have been earned but not collected but not yet collected or that are anticipated to be credited to this account for items (1) through (4) above during the current fiscal year but not collected. As these amounts are collected they should be reported on lines (1) through (4) above and deducted from this line. Mandatory program accounts may be credited with offsetting collections from financing accounts for downward reestimates. b. Federal sources: (1) Subsidy: current F Enter the amount of current definite definite appropriations for new and modified direct loan subsidies collected from the program account. (2) Subsidy: permanent F Enter the amount of permanent indefinite appropriations for subsidy reestimates collected from the program account. (3) Subsidy: (specify) F Enter the amount of appropriations other than current definite or permanent indefinite appropriations for new and modified direct loan subsidies collected from the program account. Specify the type of subsidy, as appropriate. (4) Interest from Treasury F Enter the amount of interest collected from Treasury. (5) Earned but not collected F Enter the amount of receivables from other Federal government accounts that are anticipated to be credited to this account during the current fiscal year; provided that the amount is a valid obligation in the paying account. (6) Anticipated F Enter the amount of receivables from other Federal government accounts that are anticipated to be credited to this account during the current fiscal year. ------------------------------------------------------------------------------- Line 4. Recoveries from prior year obligations: a. Actual P or F Enter the amount of recoveries of obligations incurred in prior fiscal years. b. Anticipated for rest of P or F Enter the amount of recoveries that are year anticipated to be credited to this account during the current fiscal year. ------------------------------------------------------------------------------- Line 6. Capital transfers: a. Paid (-) F Enter the amount (as a negative) of principal repayments or modification adjustment transfers paid to Treasury. b. To be paid (-) F Enter the amount (as a negative) of principal repayments or modification adjustment transfers to be paid to Treasury. ------------------------------------------------------------------------------- Line 7. Total resources P or F Enter the sum of lines 1 though 6. ------------------------------------------------------------------------------- APPLICATION OF RESOURCES ------------------------------------------------------------------------------- Line 8. Apportioned: Category A: (1) First quarter (2) Second quarter OMB will determine the level of detail necessary. Agencies, after consultation with OMB, will enter estimated amounts at the level indicated. The illustration in exhibit 66C is the minimum necessary. (3) Third quarter (4) Fourth quarter Category B: (1) Direct loan subsidy P Enter the amount of the apportionment request for direct loan subsidy to be paid to the financing account and the amount apportioned. If part of the request is for modifications to loans, as defined in section 65, then footnote this line. In the footnote, specify the amount on this line for modifications. (2) Direct loan F Enter the amount of the apportionment request for direct loans. (3) Interest to Treasury F Enter the amount of the apportionment request for payments of interest to Treasury. Additional amounts needed due to a change in Treasury rate (yield) between the time of obligation and the time of disbursement are automatically apportioned. (4) Administrative expenses P Enter the amount of the apportionment request for administrative expenses. (5) Capitalized costs, etc. F Enter the amount of the apportionment request for the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. (6) Payments to liquidating F Enter the amount of the apportionment account request for the financing account to pay the liquidating account for pre-1992 loans that are modified. (7) Payments to receipt F Enter the amount requested to be paid to account a special fund receipt account for downward reestimates of the subsidy. ------------------------------------------------------------------------------- Line 9. Withheld pending P Enter the amount of budgetary resources rescission to be withheld from availability pending Congressional action on a Presidential rescission proposal. Such amounts are subject to reporting pursuant to the Impoundment Control Act (2 U.S.C. 683) (see Part VII). ------------------------------------------------------------------------------- Line 10. Deferred P Enter the amount of budgetary resources being set aside for possible use at a later date, before the funds lapse. Such amounts are subject to the Impoundment Control Act (2 U.S.C. 684). Include amounts deferred to meet future contingencies under authority of 31 U.S.C. 1512 and amounts deferred for other reasons (see Part VII). ------------------------------------------------------------------------------- Line 12. Total resources P and F Enter the sum of lines 8 through 11. Line 12 should equal line 7. ------------------------------------------------------------------------------- 66.7. Guaranteed loan apportionment and reapportionment schedule (S.F. 142GL) and line entries. This section explains the line entries for the apportionment schedule (S.F. 142GL) for guaranteed loans. Exhibit 66B provides an illustration of the initial apportionment (S.F. 142GL) for the guaranteed loan program account and financing account. The schedule simultaneously apportions the guaranteed loan program account and financing account. From top to bottom, the schedule is divided into two major sections that are divided by a double line. The top section apportions the program level. It is divided into two sections. The first of these is called "Program Level". It provides information on the total guaranteed loan commitments that are supportable by the enacted subsidy and the maximum Federal participation that is supportable by the enacted subsidy. The second, called "Application", shows the amount apportioned. The bottom section apportions the Federal resources. It is divided into two sections. The first is called "Federal resources". It presents information on the budgetary and financing resources available to the accounts. The other section, called "Application", presents the amounts apportioned. From left to right, the schedule is divided into three major sections: the amounts of the previous apportionment (if any); the agency request (if any); and the amounts apportioned by OMB. Within each of the three major sections, there are two columns: one for the program account and one for the financing account. The following explanation of the line entries for the credit apportionment and reapportionment schedule (S.F. 142GL) for guaranteed loans covers the specific lines and rules that are unique to guaranteed loan program and financing accounts. Part IV provides general procedures, line entries, and rules for apportionment and reapportionment schedules. To the extent that additional lines are needed, use the stub entries and definitions provided in Part IV, upon approval by OMB. S.F. 142GL APPORTIONMENT OF GUARANTEED LOAN PROGRAM AND FINANCING ACCOUNTS ------------------------------------------------------------------------------- Line Entry Account Explanation ------------------------------------------------------------------------------- PROGRAM LEVEL ------------------------------------------------------------------------------- Line 1. Guaranteed loan levels: a. Current year P Enter the total amount of guaranteed loan commitments supportable by the current fiscal year's budget authority for new commitments, or in the case of negative subsidies, the amount authorized by appropriations acts. b. Unused from prior years P Enter the total amount of guaranteed loan commitments supportable by unexpired budget authority from prior fiscal years. ------------------------------------------------------------------------------- Line 2. Federal share P Enter the total amount of the Federal supportable by subsidy Government's maximum participation in the amount on line 1 above. ------------------------------------------------------------------------------- APPLICATION ------------------------------------------------------------------------------- Line 3. Apportioned: Category A: (1) First quarter (2) Second quarter OMB will determine the level of detail necessary. Agencies, after consultation with OMB, will enter estimated amounts at the level indicated. The illustration in exhibit 66B is the minimum necessary. (3) Third quarter (4) Fourth quarter Category B: (1) Guaranteed loan levels P Enter the amount of the apportionment request for the guaranteed loan level and the amount apportioned. (2) Federal share P Enter the amount of the apportionment supportable by subsidy request for the Federal share supportable by the subsidy and the amount apportioned. ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Budget and financing authority: a. Subsidy: current definite P Enter the amount of definite appropriations for guaranteed loan subsidies (including modifications) that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. b. Subsidy: current P Enter the amount of indefinite indefinite appropriations for guaranteed loan subsidies for mandatory programs that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. c. Administrative expenses P Enter the amount of appropriations for administrative expenses that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. d. Subsidy: permanent P Enter the amount of permanent indefinite indefinite appropriations estimated to be required for subsidy reestimates. e. Permanent indefinite F Enter the portion of the apportioned authority to borrow permanent indefinite authority to borrow from Treasury that was used. Additional amounts needed due to a change in Treasury rate (yield) between the time of obligation and the time of disbursement are automatically apportioned to the financing account. In subsequent reestimates, the program account will repay the financing account to make it whole (see line 8.B(3)). f. Modification adjustment F Enter the amount of modification transfers adjustment transfers received from the general fund to be apportioned. ------------------------------------------------------------------------------- Line 3. Offsetting collections Include refunds of obligations incurred from: in prior fiscal years in the appropriate category when the refunds are collected. a. Non-Federal sources (1) Fees collected F Enter the amount of fees collected. (2) Collections of principal F Enter the amount of repayments of principal collected. (3) Collections of interest F Enter the amount of interest collected. (4) Proceeds from collateral F Enter the amount of proceeds from collateral collected. This amount should be gross of the amounts that are routinely deducted from the proceeds of sales and the costs of foreclosing, managing, and selling collateral that are capitalized. (5) Other collections P or F Enter the amount of any collections received that are not categorized in lines (1) through (4). Mandatory program accounts may be credited with offsetting collections from financing accounts for downward reestimates. (6) Earned or anticipated P or F Enter the amounts that have been earned but not collected but not yet collected or that are anticipated to be credited to this account for items (1) through (4) above during the current fiscal year but not collected. As these amounts are collected they should be reported on lines (1) through (4) above and deducted from this line. Mandatory program accounts may be credited with offsetting collections from financing accounts for downward reestimates. b. Federal sources: (1) Subsidy: current F Enter the amount of current definite definite appropriations for guaranteed loan subsidies collected from the program account. (2) Subsidy: permanent F Enter the amount of permanent indefinite appropriations for subsidy reestimates collected from the program account. (3) Subsidy: (specify) F Enter the amount of current indefinite or permanent definite appropriations for new and modified direct loan subsidies collected from the program account. (4) Interest from Treasury F Enter the amount of interest collected from Treasury. (5) Accounts receivable F Enter the amount of receivables from other Federal government accounts that are anticipated to be credited to this account during the current fiscal year; provided that the amount is a valid obligation in the paying account. (6) Receipts from F Enter the amount of payments received liquidating account from the liquidating account for pre-1992 guarantees that are modified. See section 65. ------------------------------------------------------------------------------- Line 4. Recoveries from prior year obligations: a. Actual P or F Enter the amount of recoveries of obligations incurred in prior fiscal years. b. Anticipated for rest of P or F Enter the amount of recoveries from year other Federal government accounts that are anticipated to be credited to this account during the current fiscal year. ------------------------------------------------------------------------------- Line 6. Capital transfers: a. Paid (-) F Enter the amount (as a negative) of principal repayments and modification adjustment transfers paid to Treasury. b. To be paid (-) F Enter the amount (as a negative) of principal repayments and modification adjustment transfers to be paid to Treasury during the fiscal year. ------------------------------------------------------------------------------- Line 7. Total resources P or F Enter the sum of lines 1 though 6. ------------------------------------------------------------------------------- APPLICATION OF RESOURCES ------------------------------------------------------------------------------- Line 8. Apportioned: OMB will determine the level of detail Category A: necessary. Agencies, after consultation (1) First quarter with OMB, will enter estimated amounts (2) Second quarter at the level indicated. The (3) Third quarter illustration in exhibit 66B is the (4) Fourth quarter minimum necessary. Category B: (1) Guaranteed loan subsidy P Enter the amount of the apportionment request for guaranteed loan subsidies and the amount apportioned by type. (a) Current definite P (b) Current indefinite P (c) Permanent indefinite P (2) Default claims F Enter the amount of the apportionment request for default claims. (3) Interest to Treasury F Enter the amount of the apportionment request for payments of interest to Treasury. Additional amounts needed due to a change in Treasury rate (yield) between the time of obligation and the time of disbursement are automatically apportioned. (4) Administrative expenses P Enter the amount of the apportionment request for administrative expenses. (5) Capitalized costs, etc. F Enter the amount of the apportionment request for the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. (6) Interest supplements F Enter the amount of the apportionment request for interest supplements. (7) Payments to receipt F Enter the amount requested to be paid to account a special fund receipt account for downward reestimates of the subsidy. (8) Subsidy for P Enter the amount of the apportionment modifications request for modifications. ------------------------------------------------------------------------------- Line 11. Unapportioned balance Enter the amount of budgetary resources that is not apportioned (made available for obligation) in order to preserve a portion of the fund's capital so it will continue to be available for the purposes for which it was provided (see section 85.4). The amount on this line should equal the amount shown on line 7, less the amounts apportioned on line 8, less any amounts withheld pending rescission or deferred and shown on lines 9 or 10, respectively. ------------------------------------------------------------------------------- Line 12. Total resources P or F Enter the sum of lines 8 through 11. Line 12 should equal line 7. ------------------------------------------------------------------------------- Reports on Credit Execution 67.1. General. Unless otherwise specified by OMB, credit execution reports will be prepared by all agencies to provide current data on each credit account, whether or not apportioned. Expired accounts will be included on the same form as the unexpired account (or accounts) of the same title. The reporting procedures for the S.F. 133 apply to the S.F. 143. These procedures are discussed in section 52 of this Circular. Supporting data for credit execution reports include data on risk categories and cohorts, whenever such data are required by OMB. OMB should be consulted regarding the timing of budget execution reports to be submitted directly to OMB. 67.2. Reporting format and procedures. For liquidating accounts, continue to use standard form 133. For program accounts that contain credit administrative expenses for direct loans only or both direct loans and guaranteed loans: --standard form 143DLP for direct loans will be used to report data on the direct loan subsidy and all administrative expenses in the program account; and --standard form 143GLP for guaranteed loans will be used to report data on the loan guarantee subsidy in the program account. For program accounts that contain credit administrative expenses for guaranteed loans only, standard form 143GLP for guaranteed loans will be used to report data on the administrative expenses and the subsidy for the loan guarantees in the program account. For financing accounts, credit execution data will be reported at the account level, except that data will be reported by cohort for the final report for the year only. For direct loan financing accounts, use standard form 143DLF. For guaranteed loan financing accounts, use standard form 143GLF. 67.3. Reports on credit execution-direct loans. There will be two separate reports, S.F. 143DLP for the program account (exhibit 67A) and S.F. 143DLF for the financing account (exhibit 67B). From top to bottom, the schedule is divided into three major sections. The top section is called "Federal resources". It presents information on the budgetary resources available to the accounts. The middle section is called "Status of resources". It provides information on the obligations that were incurred and the available balances. The bottom section is called "Relation of obligations to outlays" on the S.F. 143DLP and "Relation of obligations to disbursements" on the S.F. 143DLF. It represents the cost to the taxpayers of the activities in this account. From left to right, the first column in the schedule presents the total for the account as a whole. The other columns differ for the program account and the financing account because the program account, which is typically an annual appropriation, expires for purposes of new obligations; while the financing account, which is a no-year account, does not. Therefore, the program account presents the unexpired year in the second column and the expired years in subsequent columns. The financing account presents the information by cohorts. (a) Program accounts.--The following explanation of the line entries for the credit execution reports covers the specific lines and rules that are unique to direct loan program accounts (see exhibit 67A). Part V provides general procedures, line entries, and rules for budget execution reports. To the extent that additional lines are needed, use the stub entries and definitions provided in Part V upon approval by OMB. S.F. 143DLP EXECUTION REPORTS FOR DIRECT LOAN PROGRAM ACCOUNTS ------------------------------------------------------------------------------- Line Entry Explanation ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Budget and financing authority: a. Subsidy: current definite Enter the amount of definite appropriations for direct loan subsidies that is specified in an appropriation act and becomes available on or after October 1 of the fiscal year. To the extent that an amount has been provided for modifications, footnote the total. In the footnote specify the amount provided for modifications. b. Subsidy: current indefinite Enter the amount of indefinite appropriations for direct loan subsidies for mandatory programs that is specified in an appropriation act and becomes available on or after October 1 of the fiscal year. c. Administrative expenses Enter the amount of appropriations for administrative expenses that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. d. Subsidy: permanent indefinite Enter the amount of permanent indefinite appropriations that was apportioned for upward subsidy reestimates or for the subsidy costs of certain mandatory programs. ------------------------------------------------------------------------------- Line 3. Offsetting collections from: a. Non-Federal sources: (1) Other collections Enter the amount of offsetting (For mandatory programs only.) collections from negative subsidies or downward reestimates. ------------------------------------------------------------------------------- Line 7. Total resources Enter the sum of the amounts shown on lines 1 through 6. ------------------------------------------------------------------------------- STATUS OF RESOURCES ------------------------------------------------------------------------------- Line 8. Obligations incurred: a. Direct loan subsidy Enter the subsidy cost as an obligation when the loan is obligated. For instructions on calculating the direct loan subsidy, see section 62.5. When the subsidy cost is shown as obligated on this line, it will also be shown as an obligated balance, end-of-period (on line 13.B), until the loan is disbursed. Record accounts payable in the amount of the obligation. When the loan is disbursed, enter an outlay on line 14. The amount of the outlay will be equal to the subsidy cost multiplied by the proportion of the loan being disbursed. Reduce the end of period obligated balance on line 13.B by the amount of the outlay. Note: the total face value of all loans obligated may not exceed the limitation on direct loan obligations specified in the appropriations language. b. Administrative expenses Enter the obligations incurred for administrative expenses. See section 62.4 for amounts that may be properly reported on this line. c. Subsidy for modifications Enter the obligations incurred for modifications. To calculate the subsidy, see section 65. d. Subsidy for reestimates Enter the obligations incurred for increases in subsidy cost discovered by reestimates. To calculate the reestimate, see section 64. ------------------------------------------------------------------------------- Line 9. Unobligated balances There should be no unobligated balances available: from permanent indefinite authority for subsidy reestimates or for the subsidy costs of mandatory programs. The obligations and outlays for reestimates should occur simultaneously. a. Direct loan subsidy Enter the unobligated balance of the amount apportioned for direct loan subsidy. b. Administrative expenses Enter the unobligated balance of the amount apportioned for administrative expenses. c. Subsidy for modifications Enter the unobligated balance of the amount apportioned for modifications. ------------------------------------------------------------------------------- Line 11. Total resources Enter the sum of the amounts on lines 8 through 10. This amount will be identical to the amount on line 7. ------------------------------------------------------------------------------- (b) Financing accounts.--The following explanation of the line entries for the credit execution reports covers the specific lines and rules that are unique to direct loan financing accounts (see exhibit 67B). Part V provides general procedures, line entries, and rules for budget execution reports. To the extent that additional lines are needed, use the stub entries and definitions provided in Part V upon approval by OMB. S.F. 143DLF EXECUTION REPORTS FOR DIRECT LOAN FINANCING ACCOUNTS ------------------------------------------------------------------------------- Line Entry Explanation ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Financing authority: a. Permanent indefinite authority to Enter the amount of permanent indefinite borrow authority to borrow from the Treasury that has been apportioned on the latest S.F. 142. b. Modification adjustment transfers Enter the amount of modification adjustment transfers received from the general fund. ------------------------------------------------------------------------------- Line 3. Offsetting collections from: Include refunds of obligations incurred a. Non-Federal sources: in prior fiscal years in the appropriate category when the refunds are collected. (1) Fees collected Enter the amount of fees collected. (2) Collections of principal Enter the amount of repayments of principal collected. (3) Collections of interest Enter the amount of interest collected. (4) Proceeds from collateral Enter the amount of proceeds from collateral collected. This amount should be gross of the amounts that are routinely deducted from the proceeds of sales and the costs of foreclosing, managing, and selling collateral that are capitalized. (5) Other collections Enter the amount of collections received that are not categorized by line (1) through (4). (6) Earned or anticipated but not Enter the amounts that have been earned collected but not yet collected or that are anticipated to be credited to this account for items (1) through (4) above during the current fiscal year but not collected. b. Federal sources: (1) Subsidy: current definite Enter the amount of payments from current appropriations for new and modified direct loan subsidies collected from the program account. (2) Subsidy: permanent indefinite Enter the amount of payments from permanent appropriations for subsidy reestimates collected from the program account. (3) Subsidy: (specify) Enter the amount of appropriations other than current definite or permanent indefinite appropriations for new and modified direct loan subsidies collected from the program account. Specify the type of subsidy, as appropriate. (4) Interest from Treasury Enter the amount of interest collected from Treasury. (5) Earned but not collected Enter the amount of receivables from other Federal government accounts provided that a valid obligation has been incurred and recorded against the other account. (6) Anticipated Enter the amount of funds that are anticipated to be received for the rest of the year. ------------------------------------------------------------------------------- Line 6. Capital transfers: a. Paid (-) Enter the amount (as a negative) of principal repayments paid to Treasury. b. To be paid (-) Enter the amount (as a negative) of principal repayments that are to be paid to Treasury at the next annual repayment date. ------------------------------------------------------------------------------- Line 7. Total resources Enter the sum of lines 1 though 6. ------------------------------------------------------------------------------- STATUS OF RESOURCES ------------------------------------------------------------------------------- Line 8. Obligations incurred for: a. Direct loans Enter the amount of direct loans for which obligations have been incurred. b. Interest payments to Treasury Enter the amount of interest owed to Treasury for the reporting period, including amounts paid. c. Capitalized costs, etc. Enter the amount of obligations for the cost of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. d. Payments to liquidating account Enter the amount of obligations for pre-1992 loans that are modified. e. Payments to receipt account Enter the amount of obligations for payments to a special fund receipt account for downward reestimates of the subsidy. ------------------------------------------------------------------------------- Line 9. Unobligated balances available: a. Direct loans Enter the unobligated balance of the amount apportioned for direct loans. b. Interest payments to Treasury Enter the unobligated balance of the amount apportioned for interest owed to Treasury. c. Capitalized costs, etc. Enter the unobligated balance of the amount apportioned for the cost of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. d. Payments to liquidating account Enter the amount of unobligated balance apportioned for pre-1992 loans that are modified. e. Payments to receipt account Enter the amount of unobligated balances for payments to a special fund receipt account for downward reestimates of the subsidy. ------------------------------------------------------------------------------- Line 10. Unobligated balances not available: a. Apportioned for subsequent period Enter the amount apportioned by time periods that will not become available until after the reporting period, as approved on the most recent S.F. 142. b. Withheld pending rescission For instructions on the use of this line, see Part VII. c. Deferred For instructions on the use of this line, see Part VII. d. Unapportioned balance Enter the amount shown on line 10.D of the S.F. 142. ------------------------------------------------------------------------------- Line 11. Total resources Enter the sum of the amounts shown on lines 8 through 10. ------------------------------------------------------------------------------- RELATION OF OBLIGATIONS TO DISBURSEMENTS ------------------------------------------------------------------------------- Line 12. Obligations incurred, net Take the sum of the amounts on line 8 and subtract the sum of the amounts on line 3 and line 4A. ------------------------------------------------------------------------------- Line 13. Net unpaid obligations: a. Obligated balances, as of October Enter the obligated balances at the 1 beginning of the fiscal year. b. Obligated balances, net When the transfers out of the account transferred are greater than the transfers into the account, enter the net transfer as a negative (-). When the transfers into the account are greater than the transfers out of the account, enter the net transfer as a positive (+). c. Obligated balances, end of period Enter the obligated balances at the end of the reporting period. ------------------------------------------------------------------------------- Line 14. Disbursements (net) Take the amount on line 12, add the amount on line 13.a; add the amount on line 13.b (if the amount on this line is positive) or subtract the amount on line 13.b (if the amount on this line is negative); and subtract the amount on line 13.c. ------------------------------------------------------------------------------- 67.4. Reports on credit execution--guaranteed loans. There will be two separate reports, S.F. 143GLP for the program account and S.F. 143GLF for the financing account. The report for the program account and page two of the report for the financing account present the status of the apportioned resources. From top to bottom, the report for the program account and page two of the report for the financing account are divided into three major sections. The top section is called "Federal resources". It presents information on the resources available to the accounts. The middle section is called "Status of resources". It provides information on the obligations that were incurred and the available balances. The bottom section is called "Relation of obligations to outlays" on the S.F. 143GLP for the program account and "Relation of obligations to disbursement" for page two of the S.F. 143GLF for the financing account. From left to right, the first column in the schedule presents the total for the account as a whole. The other columns differ for the program account and the financing account because the program account, which is an annual account, expires for purposes of new obligations; while the financing account, which is a no-year account, does not. Therefore, the program account presents the unexpired year in the second column and the expired years in subsequent columns. The financing account presents the information by cohorts. Page one of the financing account presents the status of the apportionment of the program level. (a) Program accounts.--The following explanation of the line entries for the credit execution reports covers the specific lines and rules that are unique to guaranteed loan program accounts (see exhibit 67C). Part V provides general procedures, line entries, and rules for budget execution reports. To the extent that additional lines are needed, use the stub entries and definitions provided in Part V upon approval by OMB. S.F. 143GLP EXECUTION REPORTS FOR GUARANTEED LOAN PROGRAM ACCOUNTS ------------------------------------------------------------------------------- Line Entry Explanation ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Budget and financing authority: a. Subsidy: current definite Enter the amount of current definite appropriations for guaranteed loan subsidies that is specified in an appropriation act and becomes available on or after October 1 of the fiscal year. b. Subsidy: current indefinite Enter the amount of current indefinite appropriations for guaranteed loan subsidies for mandatory programs that is specified in an appropriation act and becomes available on or after October 1 of the fiscal year. c. Administrative expenses Enter the amount of administrative expenses that is specified in an appropriations act and becomes available on or after October 1 of the fiscal year. d. Subsidy: permanent indefinite Enter the amount of permanent indefinite appropriations for subsidy reestimates or for the subsidy costs of certain mandatory programs. ------------------------------------------------------------------------------- Line 7. Total resources Enter the sum of the amounts shown on lines 1 through 6. ------------------------------------------------------------------------------- STATUS OF RESOURCES ------------------------------------------------------------------------------- Line 8. Obligations incurred: a. Guaranteed loan subsidy Enter the subsidy cost as an obligation when the loan guarantee commitment is made. For instructions on calculating the guaranteed loan subsidy see section 62.5. When the subsidy cost is obligated on this line, it will be shown as an obligated balance, end-of-period (on line 13.B), until the guaranteed loan or a portion of the guaranteed loan is disbursed by the non-Federal lender. Record accounts payable in the amount of the obligation. When the loan is disbursed, enter an outlay on line 14. The amount of the outlay will be equal to the subsidy cost multiplied by the proportion of the loan being disbursed. Reduce the end of period obligated balance on line line 13.B by the amount of the outlay. Note: The total face value of all loan guarantee commitments may not exceed a limitation on loan guarantee commit- ments specified in the appropriations language. b. Administrative expenses Enter the obligations incurred for administrative expenses. See section 62.4 for amounts that may be properly reported on this line. c. Subsidy for modifications Enter the obligations incurred for modifications. To calculate the subsidy, see section 65. d. Subsidy for reestimates Enter the obligations incurred for increases in subsidy cost discovered by reestimates. To calculate the reestimate, see section 64. ------------------------------------------------------------------------------- Line 9. Unobligated balances There should be no unobligated balances available: from permanent indefinite authority for subsidy reestimates or for the subsidy costs of mandatory programs. a. Guaranteed loan subsidy Enter the unobligated balance of the amount apportioned for guaranteed loan subsidy. b. Administrative expenses Enter the unobligated balance of the amount apportioned for administrative expenses. c. Subsidy for modifications Enter the unobligated balance of the amount apportioned for modifications. ------------------------------------------------------------------------------- Line 11. Total resources Enter the sum of the amounts on lines 8 through 10. This amount will be identical to the amount on line 7. ------------------------------------------------------------------------------- (b) Financing accounts.--The following explanation of the line entries for the credit execution reports covers the specific lines and rules that are unique to guaranteed loan financing accounts (see exhibit 67D). Part V provides general procedures, line entries, and rules for budget execution reports. To the extent that additional lines are needed, use the stub entries and definitions provided in Part V upon approval of OMB. The account total column is required during each reporting period. The detail by cohort of loans is required only on the final S.F. 143GLF for the fiscal year. S.F. 143GLF EXECUTION REPORTS FOR GUARANTEED LOAN FINANCING ACCOUNTS ------------------------------------------------------------------------------- Line Entry Explanation ------------------------------------------------------------------------------- PROGRAM LEVEL ------------------------------------------------------------------------------- Line 1. Guaranteed loan levels: a. Current year Enter the amount apportioned on line 1.A of the most recent S.F. 142. b. Unused from prior years Enter the amount apportioned on line 1.B of the most recent S.F. 142. ------------------------------------------------------------------------------- Line 2. Federal share supportable by Enter the amount apportioned on line 2 subsidy of the most recent S.F. 142. ------------------------------------------------------------------------------- STATUS ------------------------------------------------------------------------------- Line 3. Total new guaranteed loan Enter the total amount of full principal commitments of commitments to guarantee loans by private lenders. If this amount is greater than the amount on line 1, there is an apparent violation of the Antideficiency Act. ------------------------------------------------------------------------------- Line 4. Outstanding, start of year Enter the amount of guaranteed loan principal outstanding at the start of the fiscal year. ------------------------------------------------------------------------------- Line 5. Disbursements by non-Federal lenders: a. New guaranteed loans Enter the amount of guaranteed loan principal disbursed by non-Federal lenders. b. Guaranteed loans sold to the Enter the face value amount of public with recourse guaranteed loan principal associated with loans sold to non-Federal buyers with recourse to the Federal Government. ------------------------------------------------------------------------------- Line 6. Repayments and prepayments (-) Enter the amount of principal repayments and prepayments. ------------------------------------------------------------------------------- Line 7. Adjustments: a. Terminations for defaults that Enter the amount of loan principal result in loans receivable (-) reduced by terminations for default that subsequently become a loan receivable in which the formerly guaranteed borrower is deemed to owe the agency for the amount of claims paid as a result of the borrower's default. b. Terminations for defaults that Enter the amount of loan principal result in acquisition of property reduced by terminations for default (-) that lead to the acquisition of property by the agency. c. Terminations for defaults that Enter the amount of loan principal result in claim payments (-) reduced by terminations for default that lead to claim payments by the agency that result in neither a loan receivable nor the acquisition of property. d. Other adjustments, net (+) or (-) Enter the amount of loan principal reduced or increased for reasons other than those covered by the lines listed above; i.e., outstanding principal balances of guaranteed loans transferred to or received from other accounts. Explain the nature of the adjustment in a footnote. ------------------------------------------------------------------------------- Line 8. Outstanding, end of period Enter the amount of guaranteed loan principal outstanding at the end of the reporting period. This should equal the sum of lines 4 through 7. ------------------------------------------------------------------------------- Line 9. Federal share of new Enter the amount of line 3 that is commitments subject to Federal guarantee. Include the percent of the Federal share in the stub entry of this line. If this amount is greater than the amount on line 2, there is an apparent violation of the Antideficiency Act. ------------------------------------------------------------------------------- Line 10. Guaranteed amount of Enter the amount of the guaranteed loan guaranteed loans outstanding, end of principal associated with line 8 that period is subject to Federal guarantee. To the extent that the guarantee covers both principal and interest, this amount should not include interest. Include the percent of the Federal share in the stub entry of this line. If this amount is greater than the amount on line 2, there is an apparent violation of the Antideficiency Act. ------------------------------------------------------------------------------- FEDERAL RESOURCES ------------------------------------------------------------------------------- Line 1. Financing authority: a. Permanent indefinite authority to Enter the portion of the apportioned borrow permanent indefinite authority to borrow from the Treasury that was used. b. Modification adjustment transfers Enter the amount of modification adjustment transfers received from Treasury's general fund. ------------------------------------------------------------------------------- Line 3. Offsetting collections from: a. Non-Federal sources: (1) Fees collected Enter the amount of fees collected. (2) Collections of principal Enter the amount of repayments of principal collected. (3) Collections of interest Enter the amount of interest collected. (4) Proceeds from collateral Enter the amount of proceeds from collateral collected. This amount should be gross of the amounts that are routinely deducted from the proceeds of sales and the costs of foreclosing, managing, and selling collateral that are capitalized. (5) Earned or anticipated but not Enter the amounts that have been earned collected Include refunds of but not yet collected or that are obligations incurred in prior anticipated to be credited to this fiscal years (see section 65.6) in account for items (1) through (4) above the appropriate category when the during the current fiscal year but not refunds are collected. b. Federal sources: (1) Subsidy: current definite Enter the amount of current definite appropriations for guaranteed loan subsidies collected from the program account. (2) Subsidy: permanent indefinite Enter the amount of permanent appropriations for subsidy reestimates collected from the program account. (3) Subsidy: (specify) Enter the amount of appropriations other than current definite or permanent indefinite appropriations for new and modified guaranteed loan subsidies collected from the program account. Specify the type of subsidy. (4) Interest from Treasury Enter the amount of interest collected from Treasury. (5) Earned but not collected Enter the amount of receivables from other Federal government accounts for which valid obligations have been incurred. (6) Anticipated Enter the amount of funds that are anticipated to be received for the rest of the year. (7)Receipts from liquidating Enter the amount of payments received accounts from liquidating accounts for pre-1992 guarantees that have been modified. See section 65. ------------------------------------------------------------------------------- Line 6. Capital transfers: a. Paid (-) Enter the amount (as a negative) of principal repayments paid to Treasury. b.To be paid (-) Enter the amount (as a negative) of principal repayments to be paid to Treasury during the fiscal year. ------------------------------------------------------------------------------- Line 7. Total resources Enter the sum of lines 1 though 6. ------------------------------------------------------------------------------- STATUS OF RESOURCES ------------------------------------------------------------------------------- Line 8. Obligations incurred for: a. Default claims Enter the amount of claims due as a result of the borrower's default. b. Interest payments to Treasury Enter the amount of interest owed to Treasury through the reporting period, including amounts paid. c. Capitalized costs, etc. Enter the amount of obligations for the cost of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. d. Interest supplements and other Enter the amount of obligations for payments to lenders payments to lenders other than default claims. e. Payments to receipt accounts Enter the amount of obligations for payments to a special fund receipt account for downward reestimates of the subsidy. ------------------------------------------------------------------------------- Line 9. Unobligated balances available: a. Default claims Enter the unobligated balance of the amount apportioned for claims due as a result of default by borrowers. b. Interest payments to Treasury Enter the unobligated balance of the amount apportioned for interest owed to Treasury. c. Capitalized costs, etc. Enter the unobligated balance of the amount apportioned for the cost of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. d. Payments to receipt account Enter the unobligated balance of the amount apportioned for payments to a special fund receipt account for downward reestimates of the subsidy. e. Interest supplements and other Enter the unobligated balances of the payments to lenders amount apportioned for payments to lenders other than default claims. ------------------------------------------------------------------------------- Line 10. Unobligated balances not available: a. Apportioned for subsequent period Enter the amount apportioned by time periods that will not become available until after the reporting period, as approved on the most recent S.F. 142. b. Withheld pending rescission For instructions on the use of this line, see Part VII. c. Deferred For instructions on the use of this line, see Part VII. d. Unapportioned balance Enter the amount shown on line 11 of the S.F. 142. e. Other balances not available. ------------------------------------------------------------------------------- Line 11. Total resources Enter the sum of the amounts shown on lines 8 through 10. ------------------------------------------------------------------------------- Closing Accounts 68.1. General. This section provides specific rules for closing accounts for credit programs. Part XI provides general procedures for closing accounts and defines terms. To the extent that the instructions in this section differ from the instructions in Part XI, the instructions in this section supersede those in Part XI. 68.2. Program accounts. Generally these are "fixed" accounts with annual appropriations. The appropriations in these accounts are available for disbursement for only five years after the year in which the obligational authority of the appropriations expires. For loans that are normally disbursed beyond the five-year period of availability, OMB Circular No. A--11 provides guidance on requesting appropriations with disbursement authority to match the normal disbursement rate of the loan program. 68.3. Financing accounts. These are revolving funds, which are no-year accounts. As with non-credit no-year accounts, the amounts available do not expire and the accounts are not automatically closed. 68.4. Liquidating accounts. For direct loan programs, the only legal purposes for which balances will be available will be to pay the following costs of loans obligated by September 30, 1991: --to pay interest to the Treasury or the Federal Financing Bank for amounts borrowed; --to repay principal borrowed from the Treasury or the Federal Financing Bank; --to disburse loans; and --to pay the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. For loan guarantee programs, the only legal purposes for which balances will be available will be to pay the following costs of guarantees committed by September 30, 1991: --to pay interest to the Treasury or the Federal Financing Bank for amounts borrowed; --to repay principal borrowed from the Treasury or the Federal Financing Bank; --to pay default claims; --to pay interest supplements; and --to pay the costs of foreclosing, managing, and selling collateral that are capitalized or routinely deducted from the proceeds of sales. Resources of the liquidating account will also be legally available for administrative expenses for credit programs that were discontinued as of October 1, 1991 and that will have no modifications (a) Excess balances.--The need for the balances in the liquidating accounts will diminish as the loans are closed out. Any excess balances will be transferred to the general fund as capital transfers, which are nonexpenditure transfers. They will not count as outlays. Nonexpenditure transfers are accomplished via Treasury standard form 1151. Such transfers shall be made from time to time but at least once each year. These amounts should be transferred to the capital transfer receipt account 2813, "Repayment of capital stock (name of corporation)", or to receipt account 2814, "Other repayments of investments and recoveries, name of corporation or revolving fund", as appropriate. These receipt accounts are not budgetary accounts in that they do not offset outlays. Excess balances in special and trust funds, if any, will not be returned to the associated receipt accounts. These amounts are no longer available for any purpose since the purposes for which they were provided no longer exist. Therefore, these excess balances will be transferred to the general fund, as described above. (b) Lack of funds to pay interest and repay borrowing from Treasury.--If a liquidating account does not have other funds sufficient to make the payments described above, it is authorized to use permanent indefinite appropriations pursuant to section 505(d) of the Act. Appropriations to repay principal are not counted as budget authority or outlays. Appropriations to make interest payments are counted as budget authority and outlays. Any subsequent collections received by the account that are not required to pay interest or repay principal will be treated as excess balances and returned to Treasury as described above. 68.5. Reappropriation. To the extent that an appropriation act or other law extends the availability of the unexpended balances that would otherwise be canceled in a credit account, the unexpended balances will be treated in the same manner as a non-credit account. Fund Control and Credit Accounting Systems 69.1. General. This section provides specific rules for credit accounting and fund control systems. Part III provides general procedures for agency accounting and fund control systems. To the extent that the instructions in this section differ from the instructions in Part III, the instructions in this section supersede those in Part III. 69.2. Review and approval of credit fund control systems. The head of each agency is required by law to prescribe by regulation a system of administrative control of funds (see section 31.3). For credit programs, the agency's fund control system is required: (a) to restrict both obligations and expenditures from each program account, financing account, and liquidating account to the lesser of: --the amounts available for administrative expenses, direct loan subsidies, direct loan levels, guaranteed loan subsidies, guaranteed loan levels, and any limitations specified in law; or --the amounts apportioned for the amounts specified above. (b) to enable the head of the agency to determine responsibility for an obligation or expenditure exceeding the categories specified above. 69.3. Requirements to report Antideficiency Act violations. In accordance with the instructions in section 32.2, the agency head will furnish to the President, through the Director of OMB, and to the Congress, information on Antideficiency Act violations. For all direct loan and guaranteed loan program and financing accounts, this includes violations of the following nature: (a) Overobligation or overexpenditure of amounts appropriated for the subsidy cost.--This is any case where an officer or employee of the United States has made or authorized a direct loan obligation or loan guarantee commitment that requires a subsidy cost obligation or expenditure in excess of amounts appropriated and apportioned for such purposes. Modifications of direct loans or loan guarantees (or of direct loan obligations or loan guarantee commitments), as defined in section 65, that result in obligations or expenditure in excess of apportioned unobligated balances of subsidy amounts are violations. (b) Overobligation or overexpenditure of the credit level supportable by the enacted subsidy.--This is any case where an officer or employee of the United States has made or authorized a direct loan obligation or loan guarantee commitment, that is in excess of the level specified in law. This includes, for example, obligations or expenditures that are in excess of a limitation on direct loan obligations or guaranteed loan commitments. (c) Overobligation or overexpenditure of the amount appropriated for administrative expenses.--This is any case where an officer or employee of the United States has made or authorized an expenditure or created or authorized an obligation that is in excess of the amount appropriated for administrative expenses. (d) Obligation or expenditure of the expired unobligated balance of the subsidy, except to correct mathematical or data input errors in calculating subsidy amounts.--This is any case where an officer or employee of the United States has made or authorized an expenditure or created or authorized an obligation, including a commitment, against unobligated subsidy balances after the period of obligational authority has expired. Correction of mathematical or data input errors up to the amount of the expired unobligated balance of the subsidy are specifically exempted. Corrections of these errors in excess of the amount of the expired unobligated balance of the subsidy are violations.