Insurance fund and insurance appropriation accounting reason for issue
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- SECTION D. CONTROL OF DISBURSING AUTHORITY AND INVESTMENTS
- 2. INVESTMENT
4. OTHER COLLECTIONSCollections of insurance funds by other than insurance offices, which do not represent overpayments of death or disability awards or XC dividends, will be dispatched to the Collections Section of the appropriate insurance office on VAF 4-1622, Transmittal Schedule of Insurance Collections.
a. The Chief of Finance or designee is responsible for control of disbursing authority for the insurance funds. b. The increase or decrease to the disbursing authority account (6032) (Corresponding FMS SGL Account #: 9051.9089), for insurance funds with investments, will be accomplished on VAF 4-4564, Transfer of Disbursing Authority. The Insurance Center will contact the VBA ORM Accounting Policy and Reporting Division (101/241B), daily to request funding or to decrease funds. VAF 4-4564 will be prepared weekly except in those cases when the end of month is during the week. VAF 4-4564 is distributed in accordance with the instructions contained in paragraph E.17. At the end of each week, an E-mail will be sent to the VBA ORM Accounting Policy and Reporting Division (101/241B), confirming the amount of weekly increases and or decreases, fund number, company and station transfer number and the date of the VAF 4-4564. c. Disbursing authority to cover obligations for insurance appropriation (36X0120) and insurance revolving fund (36X4012) will be requested from the VBA ORM Credit Reform Staff (101/245). The Credit Reform Staff (101/245) will then contact VBA ORM Accounting Policy and Reporting Division (101/241B) to verify that sufficient funds are available at the department level to cover the funding request. The Credit Reform Staff (101/245) will send the VAF 4-4564 to the requesting station with a copy to the VBA ORM Accounting Policy and Reporting Division (101/241B). Disbursements may not be made until confirmation of the request is received. d. With the advent of Cash Management for the Insurance Funds, the amount of disbursing authority to be retained at any given time should be based on the needs of the station on a daily basis. Since daily collections of premium payments and debt repayments will be disbursed to pay dividends and other benefit payments, any excess collections not needed for disbursements should be returned to VBA ORM Accounting Policy and Reporting Division (101/241B) to be invested with the Treasury Department. Simultaneously, with the approval of VAF 4-4564 any amount to be transferred via E-mail will be sent to VBA ORM Accounting Policy and Reporting Division (101/241B) as described in subparagraph B. above. e. Unless specifically modified in the letter of authority; draw, request, or release transactions shall be in even $1,000 units. E-mail messages will show only $1,000 units, with the funds being identified. For example, a request or draw $30,000 from NSLI Fund should read "36X8132".
a. The VBA ORM Accounting Policy and Reporting Division (101/241B) will authorize the Secretary of the Treasury to either invest or redeem securities for the insurance funds. Daily, the VBA ORM Accounting Policy and Reporting Division staff uses The Department of Treasury’s “Fed Invest”, which is a web-based application system to invest and/or redeem securities to cover requests for funding from the Philadelphia Insurance Center. If Fed Invest isn’t accessible, then the VBA ORM Accounting Policy and Reporting Division staff can contact the Department of Treasury’s Bureau of Public Debt to invest/redeem securities by telephone. Investment/Redemption by telephone requires, for each fund, an investment/redemption confirmation letter which has been signed and dated that same day by the Chief of the VBA ORM Accounting Policy and Reporting Division and faxed to the Bureau of Public Debt. The Treasury Department, Bureau of Public Debt, will confirm the request action in Fed Invest with a confirmation letter for each request. b. The Treasury Department, with recommendation from the Insurance Program Staff, will determine the type of security; public debt (bonds, notes, debentures, participation certificates, etc.), to be issued, as well as their maturity dates. The interest rate on public debt securities is determined by a formula mutually agreed upon between VA and the Treasury Department for the trust funds (36X8132 and 36X8150); and by statute for the revolving funds (36X4009, 46X4010 and 36X8455). The interest rate for investments, other than public debt, is determined by the terms of the security. The Treasury Department will also determine the particular investment to be redeemed. Generally, it is the investment closest to maturity with the lowest interest rate. c. The amount of investments is controlled by VA through the General Ledger Investment accounts and related subsidiary records. Subsidiary records are maintained in an Investment Portfolio System (IPS) using a personal computer (PC) spreadsheet application by VBA ORM Accounting Policy and Reporting Division (101/241B) in VACO. This PC spreadsheet application records fund number, date of investment/redemption activity, interest collected, type of investment securities and related interest rates. The date of maturity is also recorded on the PC spreadsheet. No actual security document or certificate is issued by the Treasury Department or maintained by VA, other than, the FMS 1081-2. d. Any premium or discount associated with an investment transaction will be accounted for separately at the time of purchase in the "Bond Premium and Discount Charges on Investments" account. At the time of redemption, the premium or discount will be accounted for separately through the "Bond Premium and Discount Income on Investments" account and reversed from the expense account. e. Interest income will be accrued monthly by VA. The actual number of days the money is invested is used in calculating interest due for public debt securities, and normally a 30-day month is used for all other investments. Interest is actually collected on December 31 and June 30 each year for public debt securities and when called for on all other investments, normally every 6 months from the date of issue. When the interest is paid, a FMS 1081-2 is received for each fund to credit VA with the interest earned, as well as, any securities maturing on the same date as noted in the following paragraph. The investments are always in multiples of $1,000. Odd amounts received in interest remain in the cash account and are added to the next redemption of investments to meet the funding needs of the field stations. NOTE: As a courtesy, the Treasury Department furnishes the VA, as of December 31 and June 30, a listing that itemizes all public debt investments by fund, interest rate, type and principal balance and informs the VA of the amount of interest to be paid on each investment. This document serves as a verification of VA public debt investment records with the Treasury Department records. f. Public debt securities mature on June 30 of the year specified at the time of issuance, whereas, all other securities mature "as called for" by the individual investment. When an investment matures, a FMS 1081-2 is issued by the Treasury Department for the total interest and principal paid, followed by a FMS 1081-1 for the investment of the funds in the same manner as described in subparagraph e above. NOTE: Insurance Center
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