«Department of Veterans Affairs July 2010 Judgment Fund Liabilities Volume VI – Chapter 20 VA Financial Policies and Procedures Judgment Fund ...»
Department of Veterans Affairs July 2010
Judgment Fund Liabilities Volume VI – Chapter 20
VA Financial Policies and Procedures
Judgment Fund Liabilities
2003 AUTHORITY AND REFERENCES
2004 ROLES AND RESPONSIBILITIES
APPENDIX A - SUBMITTING PAYMENT REQUESTS TO TREASURY..
APPENDIX B - EXAMPLE ACCOUNTING ENTRIES……………..…………………….. 14 APPENDIX C - USE OF COST CENTERS AND BUDGET OBJECT CODES ………. 15 Department of Veterans Affairs July 2010 Judgment Fund Liabilities Volume VI – Chapter 20 2001 OVERVIEW` This chapter establishes the Department of Veterans Affairs (VA) financial policies and procedures as related to Judgment Fund (Fund) payments or activities. Established by Congress, the Judgment Fund is a permanent, indefinite appropriation, which is available
• Certain judicially and administratively ordered monetary awards against the United States (U.S.); and
• Amounts owed under compromise agreements negotiated by the U.S. Department of Justice (DOJ) in settlement of claims arising under actual or imminent litigation.
The authority for payments from the Judgment Fund is 31 U.S.C. 1304, Judgments, Awards and Compromise Settlements. Interest may be paid when there is an express statutory provision, contractual agreement or constitutional waiver of sovereign immunity authorizing the assessment of interest against the United States. The Department of the Treasury Financial Management Service (Treasury) is responsible for administering and certifying payments from the Judgment Fund. Treasury certifies payments when the
following four tests are met:
Awards or settlements are final;
• Awards or settlements are monetary;
• Payment of the award or settlement is authorized in 31 U.S.C. 1304(a)(3); and • Payment may not legally be made from any other source of funds.
• In addition, a tort under the Federal Tort Claims Act (FTCA) is payable from the Judgment Fund only when the award amount exceeds $2,500 (for administrative awards) and is in compliance with 28 C.F.R. Part 14, Administrative Claims Under Federal Tort Claims Act.
The Judgment Fund will not pay the following examples:
Administrative awards of $2,500 or less on claims under the Federal Tort Claims Act Administrative awards of $100,000 or less on claims under the Military Claims Act Judgments against Government Corporations Judgments against the United States Postal Service In accordance with 31 C.F.R. 256.40, VA is required to reimburse the Judgment Fund for payments made pursuant to the Contract Disputes Act (41 U.S.C. 612) and the Notification and Federal Employees Antidiscrimination and Retaliation (No FEAR) Act of
2002 (5 U.S.C. 2301 note). Refer to Vol. III, Chapter 11, Reimbursements to Judgment Fund for detailed information.
200101 REQUESTING PAYMENTS FROM THE JUDGMENT FUND. VA will submit a payment request to Treasury in accordance with the Treasury Financial Manual (TFM), Volume I, Part 6, Chapter 3100. Supporting documentation provided will vary based on the specific claim request but will identify the statute that forms the basis for the claim.
However, not all adverse judgment payments are requested from the Judgment Fund.
200102 ACCOUNTING FOR JUDGMENT FUND LIABILITIES. As advised by the Office of General Counsel (OGC), VA will record an expense and a contingent liability1 once it is determined that the legal claim is probable to end in a loss for VA and the amount is estimable.
200103 REPORTING AND DISCLOSURE ON JUDGMENT FUND PAYMENTS. Once the claim is either settled or a court judgment assessed against VA, VA will recognize the payment amount from the Judgment Fund on behalf of VA as an “other financing source” and remove the accrued contingent liability initially recorded. VA will estimate the unfunded liabilities for Judgment Fund claims of future payments and disclose the amount in the financial statements. Any potential liabilities from Federal Tort Claims Act cases will be footnoted as well.
200201 REQUESTING PAYMENTS FROM THE JUDGMENT FUND. VA’s OGC will complete all required Judgment Fund forms for request for payments from the Judgment Fund by Treasury for Contract Disputes Act claims and provide pertinent supporting documentation. VA will not request payments from the Judgment Fund for National Service Life Insurance (NSLI) adverse judgments. VA has the authority to pay these from insurance trust funds or other VA appropriations, as applicable. Likewise, VA will not request payments from the Judgment Fund for attorney fees or litigation costs awarded to a complainant who substantially prevails in Freedom of Information Act (FOIA) litigation because the OPEN Government Act of 2007, Public Law 110-175, section 4(b), requires that each Federal agency pay such fees and costs from "funds annually appropriated" for the Federal agency.
200202 ACCOUNTING FOR JUDGMENT FUND LIABILITIES. VA will account for and report legal claims submitted to Treasury for payment by the Judgment Fund as contingent liabilities if the claim is probable to end in a loss and the amount is estimable.
Final adverse judgments, awards and compromise settlements will generally be paid by Treasury from the Judgment Fund, except for adverse NSLI judgments, Merit Systems Protection Board settlements and awards, administrative awards of $2,500 or less on Refer to Vol. VI, Chapter 21, Contingent Liabilities, for more detailed information and the relationship with this chapter. A contingent liability should be recognized when a past event or exchange transaction has occurred; a future outflow or other sacrifice of resources is probable; and the future outflow or sacrifice of resources is measurable.
Department of Veterans Affairs July 2010
Judgment Fund Liabilities Volume VI – Chapter 20claims under the Federal Tort Claims Act and attorney fees and litigation costs awarded to a complainant who substantially prevails in FOIA litigation. VA will inform Treasury of any known delinquent, non-tax debts owed to the United States that may be collected by setoff from any judgment awards paid by Treasury.
200203 REPORTING AND DISCLOSURE ON JUDGMENT FUND LIABILITIES.
A. VA’s Office of Financial Policy (OFP) will maintain a Judgment Fund contingent liability account to reflect the total current estimates of all its probable legal claims submitted for potential Judgment Fund payment and represent future losses to VA.
B. VA will recognize the amount paid from the Judgment Fund on behalf of VA as an “other financing source” and remove the accrued contingent liability initially recorded.
C. VA will use the appropriate cost centers and budget object codes (BOC) to record transactions and identify unfunded expenses and liabilities related to the Judgment Fund.
D. VA will use a cost allocation methodology at the Administration level to allocate Judgment Fund expenses by station, services and product line.
E. VA will estimate the unfunded liabilities for Judgment Fund claims of future payments on legal cases to be paid by the Treasury on behalf of VA and disclose this information in the footnotes to the annual consolidated financial statements for all claims that are deemed reasonably possible. Included in the footnote will be VA’s estimate of liabilities associated with Federal Tort Claims Act cases.
F. VA’s OGC will annually provide information to VA’s Chief Financial Officer on all matters to which VA is a party to litigation, including various administrative proceedings, legal actions, claims brought against it and cases to be paid from the Judgment Fund against VA. Refer to Vol. VI, Chapter 21, Contingent Liabilities, for further information.
2003 AUTHORITY AND REFERENCES 200301 5 U.S.C. 552 Amended, OPEN Government Act of 2007 200302 5 U.S.C. 2301 (note), Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 200303 26 U.S.C. 6331, Levy and Distraint 200304 28 U.S.C. 2672, Administrative Adjustment of Claims 200305 31 U.S.C. 1304, Judgments, Awards and Compromise Settlements
200307 31 U.S.C. 3728, Setoff Against Judgment 200308 41 U.S.C. 612, Repayment of Claims 200309 31 U.S.C. 1553, Availability of Appropriation Accounts to Pay Obligations 200310 28 C.F.R. Part 14, Administrative Claims Under Federal Tort Claims Act.
200311 31 C.F.R. Part 256—Obtaining Payments from the Judgment Fund and Under Private Relief Bills 200312 31 C.F.R. 285.5, Centralized Offset of Federal Payments to Collect Nontax Debts Owed to the United States 200313 U.S. Attorney Manual 4-10.100, Payment and Satisfaction of Judgment Against the Government 200314 Financial Accounting Standards Advisory Board (FASAB), Statement of Federal Financial Accounting Standard (SFFAS) No. 5, Accounting for Liabilities of the Federal Government 200315 FASAB Interpretation No. 2: Accounting for Treasury Judgment Fund Transactions: An Interpretation of SFFAS No. 4 and SFFAS No. 5 200316 Department of the Treasury, Treasury Financial Manual (I TFM 6-3100) 2004 ROLES AND RESPONSIBILITIES 200401 In accordance with 31 U.S.C 1553(c)(1), the Secretary of VA, or his or her designee in the Office of the Secretary, would approve any obligation for an individual expired, fixed appropriation that would bring the total obligations for contract changes to that appropriation to exceed $4,000,000 in a fiscal year. Similar approval of an obligation to exceed $25,000,000 may not be approved until certain Congressional notification requirements and timeline have been met. See 31 U.S.C 1553(c)(2) for additional details.
200402 Delegation of Authority to the Secretary of VA under 28 C.F.R. Part 14, Administrative Claims Under Federal Tort Claims Act.
The Secretary of VA has the authority to adjust, determine, compromise and settle a claim involving the Department of Veterans Affairs under Section 1 of the Appendix to 28 U.S.C. 2672, Administrative Adjustment of Claims, relating to the administrative settlement of Federal tort claims, if the amount of the proposed adjustment, compromise or award does not exceed $300,000. The Secretary may redelegate, in writing, the settlement authority delegated to him or her under this section. Whenever the Secretary Department of Veterans Affairs July 2010
Judgment Fund Liabilities Volume VI – Chapter 20settles any administrative claim for an amount in excess of $100,000, he or she will send a memorandum at the same time to the Director, FTCA Staff, Torts Branch of the Civil Division, fully explaining the basis for the action taken. Also, if the amount of a proposed compromise, settlement or award exceeds $5,000, the Secretary will only exercise his or her authority after review by a VA legal officer.
200403 The Assistant Secretary for Management/Chief Financial Officer (CFO) oversees all financial management activities relating to the Department’s programs and operations, as required by the Chief Financial Officers Act of 1990 and 38 U.S.C. 309.
Specific responsibilities include the direction, management and provision of policy guidance and oversight of VA’s financial management personnel, activities and operations. The CFO establishes financial policy, systems and operating procedures for all VA financial entities and provides guidance on all aspects of financial management.
200404 Under Secretaries, Assistant Secretaries, Chief Financial Officers, Fiscal Officers, Chief Accountants and other key officials are responsible for ensuring compliance with the policies and procedures set forth in this chapter. Each Administration’s CFO is responsible for devising a cost allocation methodology outside of VA’s financial accounting system for eventual allocation of any unfunded Judgment Fund Expense to their respective stations, services and product lines.
200405 The OFP provides VA-wide financial policy and procedures guidance. Among its responsibilities, OFP develops, coordinates, issues, evaluates and reviews Departmental financial policies, systems and procedures for compliance with all financial laws and regulations. OFP calculates and posts transactions for the annual Judgment Fund liabilities and expenses.
200406 The Department of Justice (DOJ) handles the legal work for No FEAR Actclaims.
200407 VA’s OGC reviews Treasury requests for reimbursements to the Judgment Fund for No FEAR Act claims. OGC handles all legal issues related to Contract Disputes Act claims, makes the request to Treasury for the associated Judgment Fund payments and responds to inquiries from organizations that need to reimburse the Judgment Fund.
2005 PROCEDURES 200501 REQUESTING PAYMENTS FROM THE JUDGMENT FUND.
A. Claims Processing of Judgment Fund Payment Requests. Payments from the Judgment Fund appropriations may be made only upon certification by Treasury.
Treasury will determine whether a given item is proper for payment under 31 U.S.C.
1304 or whether it is "otherwise provided for," i.e., whether it constitutes an obligation chargeable against agency funds. There are nearly 100 statutes pertaining to the Judgment Fund, 17 of which dictate the denial of payment from the Judgment Fund.
Department of Veterans Affairs July 2010
Judgment Fund Liabilities Volume VI – Chapter 20
1. VA OGC will submit requests for payments from the Judgment Fund for Contract Disputes Act claims in accordance with 31 C.F.R. 256.11. Refer to the Judgment Fund web site or the TFM, Volume I, Part 6, Chapter 3100 for payment request forms or other approved methods for requesting payment. See Appendix A for a brief explanation of other approved methods.
a. VA will include a valid Taxpayer Identification Number (TIN) on all payment requests, unless an exception is listed per the Treasury TIN Policy. The TIN will be for the party entitled to the payment, whether or not that party is the payee. Failure to include the TIN may result in a payment not being completed by Treasury.