National Aeronautics and Space Administration

National Aeronautics and Space Administration

Headquarters

Washington,DC 20546-0001

October 11,2006 Reply to Attn of: Office of the Chief Financial Officer

TO:

Distribution

FROM:

Chief Financial Officer

SUBJECT: Revision to Financial Management Requirements (FMR) Volume 6, Chapter 9, Environmental and Contingent Liabilities

The enclosed Financial Management Requirement (FMR) Volume 6, Chapter 9, Environmental and Contingent Liabilities provide the revised National Aeronautics and Space Administration accounting policy concerning the Environmental and Contingent Liabilities. This revised FMR supersedes the previous version and is effective immediately.

If you have any questions regarding this FMR Chapter, please contact Mr. Ron Brooks at (202) 358-4473 or by e-mail at ronald.s.brooks(ii),nasa.~ov.

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Gwendolyn S kes Enclosure

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Distribution

Associate Administrator for Aeronautics Research Mission Directorate/Dr. Porter Associate Administrator for Exploration Systems Mission Directorate/Dr. Horowitz Associate Administrator for Institutions and Management/Mr. Luedtke (Acting) Assistant Administrator for Infrastructure and Administration/Ms. Dominguez (Acting) Assistant Administrator for Procurement/Mr. Luedtke Assistant Administrator for Small and Disadvantaged Business Utilization/Mr. Delgado Executive Director, NSSC/Mr. Arbuthnot Associate Administrator for Program Analysis and Evaluation/Dr. Pace Associate Administrator for Science Mission Directorate/Dr. Cleave Associate Administrator for Space Operations Mission Directorate/Mr. Gerstenmaier Chief Engineer/Mr. Scolese General Counsel/Mr. Wholley Inspector General/Mr. Cobb

Chief Financial Officers, NASA Centers

Ames Research Center/ Mr. Agnew (Acting) Dryden Flight Research Center/Mr. Gardner Glenn Research Center/Ms. Watson (Acting) Goddard Space Flight Center/Ms. Abell Jet Propulsion Laboratory/Mr. Johnson Johnson Space Center/Mr. Beall Kennedy Space Center/Ms. Kroskey Langley Research Center/Mr. Winter Marshall Space Flight Center/Ms. Foster Stennis Space Center/Mr. Bevis

Deputy Chief Financial Officers, NASA Centers

Ames Research Center/Mr. Liang Dryden Flight Research Center/Ms. Zellmer Glenn Research Center/ Mr. Sivic (Acting) Goddard Space Flight Center/Mr. Wolz Jet Propulsion Laboratory/Mr. Proia Johnson Space Center/Ms. Claunch Kennedy Space Center-DCFO/Mr. Cota Langley Research Center/Mr. Christian Marshall Space Flight Center/Mr. Mayhall Stennis Space Center/Ms. Perwien

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cc: Office of Institutional & Management/Mr. Leatherwood Office of the Chief Financial Officer Mr. Brooks Office of the Chief Financial Officer Mr. Pillai Office of the Chief Financial Officer Ms. Carey Office of the Chief Financial Officer Ms. Meredith Office of the Chief Financial Officer/Mr. Blair Office of the Chief Financial Officer/Mr. Bowie Office of the Chief Financial Officer/Mr. Comstock Office of the Chief Financial Officer/Ms. Cucarola Office of the Chief Financial Officer/Ms. Jefferson

Resource Management Officers

Office of the Aeronautics Research Mission Directorate/Mr. Fuller Office of the Aeronautics Research Mission Directorate/Ms. Brumfield Office of the Exploration Systems Mission Directorate/Mr. Hunter Office of the Science Mission Directorate/Mr. Maizel Office of the Science Mission Directorate/Mr. Tupper Office of the Space Operations Mission Directorate/Mr. Radzanowski

NASA Financial Management Requirements TABLE OF CONTENTS

Volume 6, Chapter 9 September 2006

ENVIRONMENTAL AND CONTINGENT LIABILITIES 0901 OVERVIEW ...................................................................................... 9-2 0902 AUTHORITY AND REFERENCES ................................................ 9-2 0903 ROLES AND RESPONSIBILITIES ................................................. 9-3 0904 DEFINITIONS................................................................................... 9-5 0905 POLICIES AND PROCEDURES ..................................................... 9-7

9-1

NASA Financial Management Requirements

CHAPTER 9 ENVIRONMENTAL AND CONTINGENT LIABILITIES

Volume 6, Chapter 9 September 2006

0901 OVERVIEW

090101.

This chapter describes the accounting policy and procedures for

recognizing and disclosing environmental liabilities associated with National Aeronautics

and Space Administration (NASA) activities and/or ownership of land, facilities, and

equipment by NASA. This chapter describes the accounting policy for recognizing and

disclosing environmental liabilities associated with environmental cleanup, also known as

environmental restoration, at NASA Centers.

090102.

Legal action, with the possibility of a negative outcome for the Agency,

can create a contingent liability that must be recognized in the Agency's financial

statements. This chapter describes the accounting policy and procedures for recognizing

and disclosing contingent liabilities.

090103.

In all cases, recognition of an environmental or contingent liability shall

not be based on the current or future availability of funds. All liabilities meeting the

requirements described in this chapter will be properly recorded in the system of record

and reported to all concerned parties as set out in this chapter.

0902 AUTHORITY AND REFERENCES

090201.

Environmental and contingent liabilities policies and procedures are

developed in accordance with the following references.

A.

Treasury Financial Management Manual Volume I Part 2 Chapter 4700;

[Agency Reporting Requirements]

B.

Treasury Financial Manual Volume I Part 6 Chapters 3100; Certifying

Payments and Recording Corresponding Intragovernmental Receivables

C.

Federal Agencies' Centralized Trial-Balance System (FACTS I) Agency

Reporting Requirements

D.

Statement of Federal Financial Accounting Standard No. 1, "Accounting

for Selected Assets and Liabilities", March 1993;

[SFFAS No. 1]

E.

Statement of Federal Financial Accounting Standard No. 5, "Accounting

for Liabilities of the Federal Government" related to environmental cleanup,

September 1995; [SFFAS No 5] as amended by SFFAS No. 12.

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