The Vietnam Education Foundation 2011 Annual Report

Page 70 Annual Report 2011
Vietnam Education Foundation
Notes to Financial Statements
September 30, 2011 and 2010
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenues and Other Financing Sources (continued)
“Transfers in without reimbursement” are treated as earmarked funds and are subject to “apportionment” by the U.S.
Office of Management and Budget (OMB) in order to add those amounts to VEF’s Fund Balance with Treasury.
OMB issues “apportionments” equal to the actual receipt of funds, not the full amount of expected annual payments
(which occurred in prior years). Earmarked funds are fund that are financed by specifically identified revenues, often
supplemented by other financing sources, which remain available over time. These specifically identified revenues
and other financing sources are required by statute to be used for designated activities or purposes, and must be
accounted for separately from the federal government’s general revenues, per Statement of Federal Financial
Accounting Standard (SFFAS) 27, Identifying and Reporting Earmarked Funds.
A second financing source for VEF consist of imputed financing sources which are costs financed by other Federal
entities on behalf of VEF, as required by Statement of Federal Financial Accounting Standard (SFFAS) No. 5,
Accounting for Liabilities of the Federal Government.
A third financing source for VEF is donations. A separate fund, a Special Fund Receipt Account, is established for
fundraising private dollars. Contributions are tax deductible. Donors are legally prohibited from providing restricted
grants.
Imputed Financing Sources
In certain instances, operating costs of the VEF are paid out of funds appropriated to other federal agencies. In
accordance with GAAP, as outlined in guidance issued by the OMB, all expenses of a federal entity should be
reported by that agency whether or not the agency will ultimately pay these expenses. Amounts for certain expenses
of VEF, which will be paid by other federal agencies, are recorded in the Statement of Net Cost. A related amount is
recognized in the Statement of Changes in Net Position as an imputed financing source. VEF records imputed expense
and financing sources for employee retirement, insurance, and health benefit costs, which are paid by the Office of
Personnel Management (OPM).
Personnel Compensation and Benefits
VEF has two categories of employees: U.S. government employees, who are based in the headquarters in Arlington,
VA, and non-U.S. government employees, who are based in the field office in Hanoi, Vietnam. The non-U.S.
government employees are paid through a third party and are not processed through payroll systems. The information
below applies only to U.S. government employees.
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