Understanding Federal Reimbursable Agreements

Federal reimbursable agreements allow federal agencies as well as the Department of Defense to perform work on behalf of others and then be reimbursed for the work performed. The reimbursement agreement amount is established by a negotiation process between the federal agency and an outside party. The federal agency is only reimbursed the amount agreed upon by both parties; therefore, it is imperative that reimbursable agreements are tracked separately from other types of funding.

This section discusses:

Reimbursable contract functionality.
Related Projects page edits.
Reimbursable amounts.

Reimbursable Contract Functionality

Reimbursable agreement functionality differs from the core contract functionality. Reimbursable agreements are subject to additional edits. Here are the specific characteristics of reimbursable contracts and contract lines:

You designate a contract as reimbursable when creating a new contract. Select a Contract Classification of Federal Reimbursable Agreement. This option appears only if you selected the Federal Reimbursable Agreement check box on the Contracts - Installation Options page.
You can add only rate-based products to contract lines on reimbursable agreements.
When adding contract lines to the contract, the system sets all lines to Active status. You can change this status, but the system picks up only Active contract lines in the Federal Reimbursable Agreement processes.
An agreement amount is required on the Contract - General page upon activation. Revenue amount can also be specified. However the revenue amount can be entered if Separate As Incurred Billing and Revenue check box is selected at contract header level. If as incurred billing and revenue are not separate, then the amount matches the agreement amount.
The agreement amount is open and editable prior to activation only if the Apportionment Amount Restricted check box is not selected at the installation level. If the Agreement Amount Restricted check box is selected on the Contracts - Installation Options page, the system sets the amount value for you automatically. The system populates the amount upon save of the project on the Related Projects page for the first contract line.
If you enter an agreement amount on the Contract - General page (when the Agreement Amount Restrictedcheck box is not selected at the installation level), the system does not overwrite the amount upon save of the first limit and project combination on the Related Projects page.
When the system derives the agreement amount for the contract header from PeopleSoft General Ledger (the Agreement Amount Restricted check box is selected at the installation level), the system uses the following criteria: the project ID from the Related Projects page, PeopleSoft General Ledger business unit (GLBU) from the GLBU associated with the PeopleSoft Contracts business unit of the contract, the accounts from the setup page mapping PeopleSoft General Ledger accounts to the agreement amount definition, and the ledger or ledger group from the setup page.
The agreement amount for the contract header is the total value for billing on the contract. The Revenue Limit cannot be more than the Revenue Amount entered on the Summary of Amounts page.
You must specify a limit on the Amount Allocation page for billing and project/activity combination on the Related Projects page upon save of that page for each contract line. Revenue limit can also be specified on the Revenue Allocation page.
The system retrieves the amount from PeopleSoft General Ledger to populate on the Contract - General page if the amount on the Contract - General page is left blank, and uses that amount in the edit check. If the new contract line that you are adding has a limit that makes the sum of all contract lines exceed the amount on the Contract - General page, the system does not allow you to add the limit on the contract line and project/activity to the Related Projects page. Also, if the same circumstances apply, but you are adding the contract line in an amendment, the system will not let you ready the amendment to process into the contract.
When adding a contract line to a contract after activation (in amendment mode), you must add the line first. Process the amendment with the new contract line. Add an activity to the Related Projects page of that line. Specify the limit for the contract line. This is a two-step process requiring the creation of two amendments. First, enter one amendment to add a contract line, ready the amendment, and process the amendment into the contract. Then, enter a second amendment to add a limit to the newly added contract line. Upon save of the second amendment, (or upon changing the second amendment's status to ready), edit checks occur.
Upon adding a contract line to the contract after activation (in amendment mode), in the amendment where the limit is added, the limit of that contract line plus the sum of the limits already on the contract must be less than or equal to the amount on the Contract - General page.
The amount on the Contract - General page is not editable after activation unless a) the contract is a reimbursable agreement and b) the customer is Federal. Thus, for federal and nonfederal customers, once a contract is activated, you cannot change the header amount. This is true whether or not you select the Agreement Amount Restricted check box at the installation level.
All advances for federal reimbursable agreements are non-inclusive prepaids.
An additional edit takes place upon adding a limit to a contract line prior to activation or in an amendment if the sold to customer on the contract is nonfederal. The edit ensures that the sum of all limits on the contract lines is less than or equal to the sum of all ready prepaids on the contract.
Upon deletion of a prepaid (when the Federal Reimbursable Agreements option is selected at the installation level, the contract has the reimbursable agreement check box selected on the Contract - General page, and the customer on the contract is non-federal), you may receive a warning.
The system warns you that the deletion of the prepaid will result in the limit amounts being greater than the prepaids for this customer's contracts if the sum of all limits on all contract lines is less than the sum of all ready prepaids,
When you select the Federal Reimbursable Agreements option at the installation level, the Accounting Rules page points to the PeopleSoft General Ledger tables (which include budgetary ChartField values). When this option is not selected, the system limits your selection to exclude budgetary ChartFields.

Related Projects Page Edits

Upon save of the Related Projects page, the system may make information unavailable for the following reasons:

Upon save, you did not input the project/activity combination.
You did not define the agreement amount accounts on the Account Mapping page in PeopleSoft General Ledger. This resulted in the system not being able to find an agreement amount in the PeopleSoft General Ledger ledgers.
No amount is booked in PeopleSoft General Ledger to the specified project ID. The journal may not be posted or the entry was posted under a different project ID than the one entered on the Related Projects page.
The amount posted in PeopleSoft General Ledger was posted to a different PeopleSoft General Ledger business unit (GLBU) than to the GLBU associated with the contract's PeopleSoft Contracts business unit (CABU).
You must specify both to the same GLBU, and the currencies must be the same.
The amount posted to PeopleSoft General Ledger was less than the sum of the existing limits plus the limits being added on the Amount Allocation pages for billing and revenue.
The customer on the contract header is classified as a non-federal customer on the customer record and there are no prepaids associated with the contract. Or, the sum of the ready prepaids is less than the sum of the existing limits plus the limit being added.

Reimbursable Amounts

Each reimbursable amount that the system displays on the Reimbursable Agreement Inquiry page depends upon whether the detail amount for an account is either added or deducted to calculate the higher level amount for each amount type. You must set up these amounts and accounts in PeopleSoft General Ledger. The accounts that you use in your organization may differ.

Note: The account numbers referenced in the amount definitions are configurable to reflect the descriptions noted here and are based on your account structure. These configuration formulas are recommendations using FSIO standards. Set up your own account structure on the Reimbursable Agreement Account page.

Term	Definition
Advanced Amount	Equals account 2310 + (account 5200 + Contract Asset) for the search criteria specified for the inquiry. Contract Asset is an account between revenue recognition and billing for transactions processed by PeopleSoft Project Costing and PeopleSoft Contracts, and should be included in the calculation. The advanced amount is paid in advance by the government agency to the company that has a reimbursement agreement with them for providing the product or service. It is unearned revenue (prepaid balance) because the company that receives the funds has not performed any services or provided any products yet. It is reduced by the amounts that are earned by the company through providing a service or product (account 5200) and Contract Asset.
Advanced Amount Remaining	Equals the sum of account 2310 for the specified inquiry search criteria. Also known as account 2310: Advances From Others. This is the amount that still remains in account 2310 (Advanced Amount) that is offset by the revenue recognized for services performed or products provided by the company that is subject to the reimbursement agreement.
Earned Amount	Equals the sum of account 5200 for the specified inquiry search criteria. Also known as account 5200: Revenue From Services Provided. This account represents revenue that you can recognize because the company has performed a service or provided a product to the government agency that is eligible for the reimbursement. This account reduces account 2310: Advanced Amount.
Billed Amount	Equals the Advanced Amount minus account 2310. This is the amount that you bill to the government agency because the company provided a service or product that was eligible for reimbursement. If the advanced amount account no longer has funds available, then you must invoice this amount to the government agency because the services or product provided were subject to the reimbursement agreement. If the advanced amount account still has funds available, then you apply the bill to the account.
Reimbursable Agreement Amount	Equals the total contract amount for the contract ID linked to a specific project ID. This is the total negotiated reimbursement amount that was agreed to by the company and the government agency for the service or product to be provided. It is the total contract amount for the contract ID that is linked to a specific project ID.
Unbilled Amount	Equals the sum of the Contract Asset account for the specified inquiry search criteria. This represents the sum of Contract Asset. Contract Asset is a holding account that is used to manage the timing differences between revenue recognition and billing. It is used as an offset to the advanced amount account.
Obligated Amount	Equals the sum of accounts 4802, 4872, 4882, 4801, 4871, and 4881 for the specified inquiry search criteria. This is the amount that the government agency is obligated to pay to the company for providing a service or product that was under the reimbursable agreement. This amount has not been paid to the company yet. It is the sum of the following accounts: 4802: Unexpended Obligations - Prepaid/Advanced 4872: Downward Adjustments of Prior-Year Prepaid/Advance Unexpended Obligations Refunds Collected 4882: Upward Adjustments of Prior-Year Prepaid/Advanced Unexpended Obligations 4801: Unexpended Obligations - Unpaid 4871: Downward Adjustments of Prior-Year Unpaid Unexpended Obligations 4881: Upward Adjustments of Prior-Year Unpaid Unexpended Obligations
Expended Amount	Equals the sum of accounts 4902, 4972, 4982, 4901, 4971, and 4981 for the specified inquiry search criteria. This is the amount that the government agency paid to the company for providing a service or product that was under the reimbursable agreement. It is the sum of the following accounts: 4902: Expended Authority - Paid 4972: Downward Adjustments of Prior-Year Paid Expended Authority Refunds Collected 4982: Upward Adjustments of Prior-Year Paid Expended Authority 4901: Expended Authority - Unpaid 4971: Downward Adjustments of Prior-Year Unpaid Expended Authority 4981: Upward Adjustments of Prior-Year Unpaid Expended Authority
Collected Amount	Equals the sum of account 1030 for the specified inquiry search criteria. It is the sum of account 1030, which is the fund balance for the company. It is the amount that the company has collected from the government agency for providing a service or product that was subject to the reimbursable agreement.
Agreement Amount	User-defined amount. Based upon an allotment of funds, the agreement amount is used specifically for a certain project or company.
Total Revenue Amount	User-defined amount. If as incurred billing and revenue are not separate at contract header level, then the amount matches the agreement amount.