Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

0701 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding advance payments, also referred to as advances. Advances, in general, are prohibited by 31 U.S.C. 3324 to protect VA from non-delivery of goods and services.

Key points covered in this chapter:

• VA will ensure that all advances are permitted by either law and/or regulation;
• VA will record and report intragovernmental and public advances separately;
• VA will make intragovernmental advance payments to other federal entities in accordance with an executed interagency agreement (IAA); and
• VA will record and report advances under the “Other Assets” line item of the consolidated balance sheet.

0702 Revisions

See changelog.

0703 Definitions

Advances – Cash outlays made by a federal entity to its employees, contractors, grantees, or others to cover a part, or all, of the recipients’ anticipated expenses or as advance payments for the cost of goods and services the entity acquires.

Federal Employees Health Benefits (FEHB) Advance – Money paid to finance the cost of maintaining FEHB for VA employees who are in an insufficient pay status.

Federal Travel Regulation (FTR) – The regulation contained in Section 41 of the Code of Federal Regulations (CFR), Chapters 300 through 304, that implements statutory requirements and Executive branch policies for travel by federal civilian employees and others authorized to travel at government expense.

G-Invoicing – Treasury’s long-term solution for buy/sell transactions, that will allow federal agencies to initiate payments and to manage the receipt and acceptance of GT&C, orders, and performance.

Intra-Governmental Payment and Collection (IPAC) – Payment and collection transfer of funds across Federal Program Agencies (FPAs) for goods and services (i.e., buy/sell transactions), fiduciary transfers (i.e., investment and borrowing transactions), federal employee benefits data and check aftermath activity.

Other Assets – Title given to assets not reported in a separate category on the face of the Balance Sheet, this category includes assets that are immaterial to the entity and do not warrant separate reporting.

Temporary Duty (TDY) Travel – Travel by an employee on official business to a designated location(s) away from their local area, as authorized by an employee’s AO through a TA.

Travel Advance – Pre-payment of authorized estimated travel expenses paid to an employee in the form of electronic funds transfer (EFT).

0704 Roles and Responsibilities

Under Secretaries, Assistant Secretaries, Other Key Officials, Administration and Staff Office CFOs are responsible for ensuring compliance with the policies outlined in this chapter.

Financial Services Center (FSC) is responsible for providing operational support for the accounting and reporting of VA’s advances (e.g., travel, salary, intergovernmental, etc.). FSC in coordination with the Administrations are responsible for posting, offsetting, and reporting advance transactions and providing technical support, when requested.

Veteran Benefits Administration (VBA) is responsible for authorizing, recording, processing, reporting, and monitoring advance payments to and on the behalf of eligible Veterans and their beneficiaries for subsistence allowance or educational assistance under VA’s benefits programs.

0705 Policies

070501 General Policies

1. VA will make payments in advance of the receipt of goods and services when authorized by laws and regulations. Examples of authorized advance payments include the following:
   • Intergovernmental payments (31 U.S.C. 1535);
   • Tuition payments for civilian employees as authorized by the Government Employees Training Act (5 U.S.C. 4109);
   • Subsistence allowance and educational assistance allowance payments (38 U.S.C. 3680(d));
   • Subscriptions or other charges for newspapers, magazines, periodicals, and other publications for official use (31 U.S.C. 3324(d));
   • Official travel (5 U.S.C. 5705); and
   • Post office box rental payments (25 Comp. Gen. 834).
2. VA will record and report advances in two categories: intragovernmental advances and public advances.

070502 Intragovernmental Advances

1. VA will advance funds for goods or services ordered from other federal entities as agreed to in an Interagency Agreement (IAA). Refer to Volume I, Chapter 11, Intragovernmental Transactions, for details;
2. VA will process advance payments via the Intragovernmental Payment and Collection (IPAC) system or G-Invoicing in accordance with the Treasury Financial Manual (TFM), Volume 1, Part 2, Chapter 4700, Appendix 8. Refer to Volume I, Chapter 11A and 11B, Buy/Sell Transactions on IPAC and G-Invoicing;
3. VA will liquidate advances and record the corresponding expenses during the IAA period of performance; and
4. VA will review the advance payments and request the servicing agency to return any unused funds advanced.
5. Advance payments to USPS may be transacted through EPS instead of IPAC to allow for the level of detail needed to reconcile postage purchases. This exemption is granted by Treasury on an interim basis for supported products while USPS transitions to G-Invoicing.

070503 Public Advances related to Employees

1. VA will provide travel advances to eligible employees subject to the provisions of 5 U.S.C. 5705, the Federal Travel Regulation (FTR), and VA policies.
2. FSC will monitor advances to ensure they are liquidated when travel expenses are claimed.
3. VA will advance employee contributions for Federal Employees Health Benefits (FEHB) premiums for periods of insufficient or no-pay. VA’s payroll service provider will process the advance payments for FEHB premiums. VA employees will repay the FEHB premiums upon return to sufficient pay status unless VA waives all or any part of the payments.
4. VA will advance salaries to employees according to 5 U.S.C. Part III, Subpart D, Chapters 55 & 59 and 5 C.F.R .Part 550. VA’s payroll service provider and FSC will process the salary advances. VA Handbook 5007, Pay Administration and Volume XV, Chapter 2A, Payments, provide guidance relating to salary advance payments.
5. VA will make advance payments on behalf of employees for approved educational benefit training programs, including educational seminars under 5 U.S.C. 4109(a)(2).

070504 Public Advances related to Veterans and Beneficiaries

1. In accordance with 38 U.S.C. 3680(d), VBA will provide advances for subsistence allowance or educational assistance to Veterans or their beneficiaries attending educational and training programs.
2. To authorize the advances, VBA will require the Veterans or their beneficiaries to:
   • (Re-)Enroll in eligible educational and training programs;
   • File their advance payments requests at school; and
   • Attend schools on at least a half-time basis.
3. VBA will validate the enrollment, pursuit, and attendance of the educational or training programs according to its regulations.
4. In accordance with 38 U.S.C. 3680(d)(4), VBA will provide advances to either the Veterans/beneficiaries or the education institutions no earlier than 30 days before the educational or training programs are to commence.
   1. If the education institutions fail to submit enrollment certifications to VA within 30 days after the commencement of programs, VA will request the return of the advance payments from the institutions.
   2. If Veterans or their beneficiaries fail to enroll in or pursue the program for which the advances were made, VA will require repayment from the individual, unless VA waives them in whole or in part in accordance with authoritative guidance.
5. VBA will not authorize advances for a correspondence course, on-the-job training, flight training, homebound training, or independent instructional programs.

070505 Public Advances related to Contractors and Grantees

1. VA will provide advances to commercial vendors and grantees at the minimum amounts needed for the actual, immediate cash needs in executing the contract or grant agreements. Most contract advances are made by the Veterans Health Administration (VHA) to hospitals and medical schools, affiliated with universities for the payment of residency and intern program salaries and/or fringe benefits.
2. VA will authorize the contractors and grantees to submit their requests for advances based on the provisions and terms and conditions prescribed in the contract or grant agreement.
3. If VA approves a request for advance, VA will process the advance as close to the actual disbursement date when the contractor or grantee will pay for the associated allowable costs. Whenever possible, VA will consolidate advance payments by recipients.

070506 Accounting and Reporting for Advances

1. VA will record and report advances as assets under the “Other Assets” line item on the quarterly and annual consolidated financial statements. Refer to Volume V, Chapter 10, Other Assets, for details.
2. Upon request, FSC will support Administration, Staff Office CFOs, and Fiscal Officers by posting entries, offsetting advances, and providing related accounting help desk support.
3. VA will reduce advances when goods or services are received and/or contract/ agreement terms are fulfilled.
4. VA will reclassify advances subject to refund to accounts receivable for financial reporting purpose. VA will monitor reclassified advances to ensure timely collection.

0706 Authorities and References

• United States Code (U.S.C.)
  • 5 U.S.C. 4109, Expenses of Training
  • 5 U.S.C. Chapter 55, Pay Administration
  • 5 U.S.C. Chapter 57, Travel, Transportation, and Subsistence
  • 5 U.S.C. Chapter 59, Allowances
  • 31 U.S.C. 1535, Agency Agreements
  • 31 U.S.C. 3324, Advances
  • 38 U.S.C. 3680, Payment of Educational Assistance or Subsistence Allowance
• 25 Comp. Gen. 834, Advance Payments for Post Office Box Rentals
• Code of Federal Regulations (C.F.R.)
  • 5 C.F.R. Part 550, Pay Administration (General)
  • 41 C.F.R. § 102-192.50
  • 41 C.F.R. Subtitle F, Federal Travel Regulation System, Chapter 300, 301, and 302
• FASAB Statement of Federal Financial Accounting Standards (SFFAS) No. 1, Accounting for Selected Assets and Liabilities
• FTR Amendment 2014-01
• FTR Amendment 2015-02
• The Government Accountability Office (GAO) Red Book, Volume 2, Chapter 10, Federal Assistance: Grants and Cooperative Agreements
• OMB Circular A-136, Financial Reporting Requirements – Revised
• VA Handbook 5007, Pay Administration
• VA Financial Policy Website

0707 Rescissions

VA Financial Policy, Volume II, Appropriations, Funds and Related Information, Chapter 7C – Advance Payments dated September 2022.

0708 Policy Approval

This policy was approved by the VA Chief Financial Officers’ Council on August 10, 2023.