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agreement contract. Credits will be made as animals die, or are sold, lost, stolen, slaughtered, or transferred.
441. “Stores” is a property, asset, or real account which will be charged with the invoice or production cost of expendable property placed in stock pending issue. It will also be charged with the estimated railroad freight, the actual wagon freight, and the 5 per cent handling charge on expendable property acquired for sale under reimbursable agreement contract.
442. “Accounts receivable, installment sales” is an asset or real account which indicates the amount due the unit for property sold under “Reimbursable agreement” or other installment contract.
443. “Accounts payable" is a liability or real account designed to indicate at the end of each fiscal year the then existing indebtedness of the unit for services.
(a) For all memorandum invoices held awaiting notices of settlement from the central office, and for all similar invoices received from the warehouses, the following entries will be made in Register No. 4 by debiting operating expenses, stores, or other accounts affected, and crediting accounts payable. At the same time the stores or property should be taken up on the card records.
(6) The memorandum invoices should be marked to give a record of the register entry and the invoices held segregated, as before, to await notice of settlement from the central office. When such notice is received entry will be made in Register No. 2 debiting accounts payable and crediting disbursement vouchers. The invoices should then be marked paid and placed in the file of paid vouchers.
(c) Field offices may handle in like manner any property received, in case prompt payment can not be made for unforeseen reasons, such as lack of funds under the proper appropriation, or extended delay in obtaining the necessary advance of funds.
444. “Collection vouchers" is a nominal account which indicates the extent to which resources have been diminished by conversion into cash, which is not regarded as an asset of the unit. “Collection vouchers” measures a reduction of “Surplus." This account will be debited with all collections made. It will be closed into “Surplus” at the end of the fiscal year.
445. “Disbursement vouchers" is a nominal account which indicates the extent to which resources have been increased by the expenditure of cash, not regarded as an asset of the unit. This account will be credited with all voucher disbursements. It is the opposite of “Collection vouchers," discussed in paragraph 437, and measures an increase in “Surplus.” At the close of the fiscal year “Disbursement vouchers" will be debited and “Surplus” credited with the amount of the credit balance in the former account. This entry closes the account into “Surplus."
446. “Transfer vouchers issued” is a nominal account which indicates the charges for property furnished to another unit of the service. Consequently this account reduces the surplus of the unit.
447. "Transfer vouchers received” is a nominal account which represents the charges for property received from another unit. It also represents an increase in assets and therefore a credit to “Surplus."
448. “Operating expense” is a nominal account which represents the total of all current expenses, of the unit, whether for operation of the service; for maintenance, repair, or betterment of property, or for construction or other work. The details of this account will be kept on cost-ledger sheets.
449. "Operating income" is a nominal account which represents the total of all current income derived from operating activities of the unit. The details of this account will be kept on cost-ledger sheets.
450. “Other income" is income derived from other sources than operation.
451. "Contingencies and losses" is a nominal account which indicates the extent to which assets have been reduced on account of unusual or extraordinary causes not resulting from current operation. For convenience this account will also receive debits representing losses resulting from depreciation. By the term “Depreciation” is meant the lessening of the asset value of property (equipment, plant, etc.) used in the operation of the service. Depreciation may be caused by use (wear and tear), by the action of the elements during a period of nonuse (as by rusting, drying out, and warping), or by inadequacy and obsolescence (as when business outgrows the equipment or new inventions or new processes that require new machinery are introduced).
(a) Under existing laws funds accumulated during a period of years to cover depreciation could not be used unless appropriated by Congress. Furthermore, as funds are now provided by appropriation for replacing and repairing property, no necessity exists for accumulating a reserve therefor; also, as the Indian Service sells few of its products, there is no need to consider depreciation in order to fix prices. For these reasons no provision is made herein for recording the accrual of depreciation, but the book value of property lost or discarded and the difference between the book value and the sale price of property sold at a loss will be charged to "Contingencies and losses."
(6) "Contingencies and losses" will be charged with losses on account of reimbursable agreement transactions. It will, therefore, be credited with the amount of the 5 per cent handling charge applied upon reimbursable property sold to offset such losses.
452. “Statutory and treaty benefits to Indians" is a nominal account which includes all per capita and pro rata payments to Indians and all pro rata issues of benefits in the form of livestock, equipment, etc. Such payments and issues are usually, but not necessarily, made from tribal funds. This account has no reference to payments of individual Indian moneys or to gratuitous issues to indigent Indians.
453. “Inventory and other surplus adjustments" is a nominal account which may receive either charges or credits on account of transactions or conditions arising in prior fiscal periods. Small items of prior years' expense or income will be charged or credited to the current expense or income accounts, but adjustments of surplus occasioned by a physical inventory of property or large collections received or disbursements made currently as a result of prior years' business should be given expression through this account. This will not apply, of course, to collections made on account of reimbursable agreements or other installment sales contracts, or to disbursements on account of items carried to “Accounts payable" at the close of the fiscal year.
454. “Surplus” measures the excess of assets over liabilities. It is a "closing" account, to which postings are made only at the end of the fiscal year.
DESIGNATION OF ACCOUNTS 455. For convenience in classifying, registering, and posting, the following system of designation of accounts will be used:
(a) Recapitulation or general ledger accounts will be designated by number. The numbers will be those appearing in column “Recapitulation No.” on the recapitulation of registers.
(6) Feature or cost accounts will be designated by letter as A, B, C, etc., the symbol to be inserted in the blank space at the top of each cost ledger sheet.
(c) To designate the particular subclassification of operating expense or income a numerical symbol will be used immediately after the cost-account symbol, as follows: Operating expense
1. Salaries and wages.
5. Materials and supplies.
9. Transfers (credit). Operating income
10. Rental of buildings.
17. Miscellaneous. (d) To designate the subclassification of “Other income,'' the decimals .18 to .22 will be used as follows:
.18 Leases, grazing and pasturage.
.22 Miscellaneous. (e) No subsidiary record will be maintained for “Other income,” but the account will be analyzed from the registers for the purpose of preparing the detail statements required.
(f) The symbols described above will be used on all registers and other field records, but the full names of accounts will be used in statements prepared for the central office.
DETAILED PROPERTY RECORDS
456. All property acquired, whether by purchase, transfer, or production at the unit, will be taken up on property cards, unless designed for immediate consumption. Three classes of these records will be maintained: Stores cards, for expendable property (except reimbursable stores); fixed property cards for nonexpendable property (except reimbursable property); and reimbursable property records for reimbursable property of all sorts.
457. Expendable property records (Form 5–702).-Items purchased for immediate consumption will be expended from the disbursement voucher and the usual "Certificate of expenditure" appended. The rule should be to take no expendable property into "Stores" account except that which is to be actually stored for future issue. Conversely, all expendable property actually placed in the storehouse should be brought into account as "Stores." Expendable property purchased for the exclusive use of the physician, such as drugs, medicines, etc., and placed in the dispensary for such use, will be expended immediately upon purchase, and an appropriate certificate as to the disposition of the supplies made on the disbursement voucher. No further accounting will be required of the physician for the expenditure of property of this class.
(a) Stores purchased or otherwise acquired for future issue will invariably be taken up on store cards from
1. Disbursement vouchers, in the case of purchases.
(6) The storekeeper or other employee receiving the articles will certify on the voucher as to delivery. The goods will thereupon be entered on the stores cards at the prices indicated in the vouchers. Entries on stores cards will show the name, description and unit of measurement of each item, the location of the stock, and the quantity, unit price, and amount as appearing on the voucher. Document references will invariably be to the voucher number and date (whether disbursement voucher, transfer voucher, or production report).
(c) All issues of expendable property by the storekeeper will be upon requisition. So far as practicable separate requisitions should be required for expendable property. Requisitions for stores (expendable property) will be completed by the storekeeper to show the quantity, description, unit of value, and total value of each item actually furnished, as shown by the stores cards. The unit price to be used on the requisition will be the same as the unit price shown on the stores card, so that when all the stores represented by receipts have been issued not only the “Quantity" but the "Amount" columns on the cards will balance. Issues of stores will be recorded on the stores card by entries giving similar information to that indicated above for acquisition of stores. New balances will be extended in the “Balance” column with each entry, so that a verification of the card inventory of an item of stores can at any time be made by drawing the card, referring to the “Balance” column, and checking the goods recorded as on hand with the stores actually in the warehouse.
(d) Requisitions for stores (expendable property) will be serially numbered by the storekeeper and entered upon the “Register of storehouse issues.” They will thereafter be filed in serial order.
458. Nonexpendable property records (Form 5–703).-Fixed assets purchased or otherwise acquired, whether placed in storage for later issue or put to immediate use, will be taken up on fixed property cards from-'
1. Disbursement vouchers, in the case of purchase.
3. Production reports, in the case of local manufacture or production. (a) The storekeeper or other employee receiving the articles will certify on the voucher as to delivery. The articles will thereupon be entered on the fixed-property cards at the prices indicated on the voucher. Entries on fixed-property cards will show the name, description, and unit of measurement of each item, and the quantity, unit price, and amount as appearing on the voucher. Notation of the ownership of the property acquired, as tribal or United States, will be made on the cards. (This will not apply to units entirely supported by gratuity appropriations.) Document reference will invariably be to the voucher number and date. Fixed-property cards will be grouped into the following classes:
1. Land and improvements.
4. Livestock. (6) All issues of nonexpendable property by the storekeeper will be upon requisition Form 5–720. (So far as practicable, separate requisitions should be required for nonexpendable property.) Requisitions for nonexpendable property need not be completed to show the value of the items included, and no entry therefor will be made on the face of the property cards. Nonexpendable-property requisitions will not be entered upon the “Register of storehouse issues.”
(c) Requisitions for nonexpendable property will be filed alphabetically by employees in such a manner as to facilitate the determination of the property accountability of each employee. A good plan would be to provide a jacket (plain manila envelope) for each employee, in which would be placed all requisitions signed by such employee for nonexpendable property, Transfers of property between employees should be evidenced by formal receipt, and a copy filed in the jacket of each employee concerned. Returns of property to the custody of the storekeeper should also be covered by a form of receipt, a copy to be filed with the other records relating to the employee's accountability. At the end of each fiscal year all records accumulated in this fashion during the year should be consolidated into a single receipt prepared for the signature of the employee representing all nonexpendable property in his custody, after which the miscellaneous receipts and credit memoranda mentioned may be destroyed or delivered to the employee. At the end of the fiscal year the total of the consolidated receipts so taken, plus nonexpendable materials in the storehouse, should agree with the detail records of such property as kept on the fixed-property cards.
459. Reimbursable-property records (Form 5-338).-Reimbursable-property records will be maintained in the manner set forth in the regulations to govern the use of reimbursable appropriations. These records will be grouped by “Stores,” “Equipment,” “Livestock," etc.
460. Property control accounts.—The general ledger (recapitulation of registers) will show each month the value of property on hand, subdivided under five headings—four fixed assets (recapitulation accounts 1 to 4) and one current asset (recapitulation account 5). In order to make use of these control accounts it is desirable to file all property cards for each unit (1) by classification of property, (2) alphabetically by names of articles.
(a) By this system of filing property cards balances can be verified with very slight effort. If any discrepancy appears, the error that has caused it can readily be located, for it is confined to the particular section of the card-inventory files under inspection. By listing debit and credit entries made on the property cards for the month any error can be located from a comparison of the totals of the list with the debits and credits shown opposite the corresponding item of property on the recapitulation. This comparison will show the particular group of cards in which the error exists, and by rechecking all debits and credits on such cards with the original vouchers (requisitions, production reports, disbursement vouchers, etc.), the exact location of the error can be ascertained.
461. Physical inventories.-It is desirable to take a physical inventory of property in connection with the perpetual card inventory by counting all property by groups, each group at a time, at convenient times during the year. At least once a year a list of balances of each group as shown by the card inventory should be made and checked against the physical property of that particular group on hand, and the necessary adjustments made.
(a) When an officer responsible under bond for property is relieved, or when his bond is changed, an itemized list of property of all sorts for which he is accountable will be compiled from the property cards, showing quantity, description, unit price, and amount, for each item, This schedule will be receipted by the incoming officer, or by the holdover officer in case of change of bond, after such verification as may be necessary to satisfy the receiving officer as to its correctness. Schedules will be prepared in triplicate in the case of transfers between officers, the original to be retained by the officer relieved, the duplicate to be filed by the incoming officer, and the triplicate to be forwarded to the Indian Office. In the case of change of bond, the schedule will be prepared in duplicate only, the original to be transmitted to the Indian Office and the duplicate filed.
COST LEDGER , 462. Operating accounts.--An analysis of “Operating expense” and “Operating income" will be provided by means of the cost ledger (Form 5-736). For the purposes of cost keeping each nonreservation boarding school with no agency activities will be regarded as a single feature, and all operating expense and income, except that connected with the construction, production, or improvement of property, will be recorded in a single cost account, designated by the name of the unit. Special-cost accounts will be opened, however, to record expenses in