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Pae5   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  "Armorclad" Reg. U.S. Patent Office REGISTERED IN ENGLAND  Patented U.S. 1370424 PATENTED IN  R. D. 445795  - -  1511268 -  1544818  ENGLAND 224787  Guides and Folders Library Bureau Division Remington Rand !nc. Branches Everywhere Made in U. S. A. Cat. no.5055-P4  Collection: Paul A. Volcker Papers Call Number: MC279  Box 20  Preferred Citation: PACS, 1976; Paul A. Volcker Papers, Box 20; Public Policy Papers, Department of Rare Books and Special Collections, Princeton University Library Find it online: http://findingaids.princeton.edu/collections/MC279/c251 and https://fraser.stlouisfed.org/archival/5297  The digitization ofthis collection was made possible by the Federal Reserve Bank of St. Louis. From the collections of the Seeley G. Mudd Manuscript Library, Princeton, NJ These documents can only be used for educational and research purposes ("fair use") as per United States copyright law. By accessing this file, all users agree that their use falls within fair use as defined by the copyright law of the United States. They further agree to request permission of the Princeton University Library (and pay any fees, if applicable) if they plan to publish, broadcast, or otherwise disseminate this material. This includes all forms of electronic distribution.  Copyright The copyright law of the United States (Tide 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproduction. One of these specified conditions is that the photocopy or other reproduction is not to be "used for any purpose other than private study, scholarship or research." 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Mudd Manuscript Library 65 Olden Street Princeton, NJ 08540 609-258-6345 609-258-3385 (fax) mudd@princeton.edu   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Date 12/28/76 REFERRED FOR ATTENTION TO MR. Puckett This copy for information of  Copies have been sent to  V Mr. Volcker Mr. Timlen Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. CoopersmIth Miss Cutler Mr. Oppenheimer Mr. Flanagan Correspondence Files Ms. Detra  10/76  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  v//  S   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  BOARD OF GOVERNORS • ••• • of 4'A. q-  OF THE  •  •••  ••  FEDERAL RESERVE SYSTEM  Cv%  •0 •  58  WASHINGTON, D. C. 20551  •  DIVISION OF FEDERAL RESERVE BANK EXAMINATIONS AND BUDGETS  ••4'izALREs•••• •  •••  December 23, 1976  Mr. Paul A. Volcker President Federal Reserve Bank of New York New York, New York 10045 Dear Mr. Volcker: The new planning and control expense accounting system (PACS) will become effective January 1, 1977. We are currently developing a program to ensure that expenses and statistics are properly reported and interpretations or changes to accounting instructions can be made as required. While the overall program will be managed by the Division of Federal Reserve Bank Examinations and Budgets, the active involvement of the Conferences and the individual Reserve Banks will be necessary to ensure the success of the system. An on—site review at each head office will be employed to monitor the proper reporting of expenses and statistics. Initially, these reviews, to be conducted by a Division monitoring group, will be accomplished within the first eighteen months that PACS is in effect. We believe that this schedule will provide sufficient flexibility to respond to the needs of individual Reserve Banks. A tentative schedule for these reviews will be published during the first quarter of 1977. After the will be designed to each District. The based on results of  RECEIVED (-JEC 2 .).) 1976 P. A. V. ANSWERED  initial review period, the schedule allow for at least one annual review for necessity for an annual review will be previous reviews, analysis of quarterly  To be listed (— for directu  t-•  A  of  /77 9Fw ,,dcretary   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr. Paul A. Volcker  — 2  data received, financial examination and operations review results, and the extent of changes to PACS te accounting instructions. If such factors do not dicta a need for an annual review in a District, the schedule will be altered accordingly. The success of the new expense accounting system will require a clearly defined channel of communications fore, between the Board staff and the Banks. We are, there requesting that you designate an official from your staff and to serve as the District contact for all maintenance e monitoring actions. This official would be responsibl the for disseminating PACS information to each office in District and coordinating requests for interpretations believe or changes from the Bank to the Board staff. We that this process will foster consistent applications of current PACS procedures. We look forward to working with you and your staff in monitoring and maintaining the new accounting system. Sincerely yours,  g J%Gee ;?ti/AOPOOtit Clyde H. Farnsworth, Jr. Assistant Director  Date 12/3/76 • REFERRED FOR ATTENTION TO MR. Puckett This copy for information of  Copies have been sent to  / Mr. Volcker Mr. Timlen v/ Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane V/ Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. Cooperstrath Miss Cutler Mr. Oppenheimer Mr. Flanagan Correspondence Files Mrs. Minehan  10/76  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  'FA Federal Reserve Bank of Philadelphia Philadclphia,Pcnnsylvania 19105 OFFICE OF THE FIRST VICE PRESIDENT   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  December 2, 1976  TO:  MEMBERS OF THE CONFERENCE  FROM:  Mark H. Willes, Chairman Committee on Management Systems and Support Services  Enclosed for your information is a copy of the summary recommendations from various Districts concerning the program for maintaining and monitoring PACS, which was distributed to you for comment on November 5.  My Committee will work with the Sub-  committee on Accounting Systems, Budgets and Expenditures and the Board's staff to achieve resolution of these recommendations as we approach the PACS cutover date.  Enclosures  RECEIVED DEC 0 3 1976 ANSWERED -, ATTENDED TO............................... TIMLEN TH_OMAS.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  DISTRICT COMMENTS ON PROGRAM FOR MAINTAINING AND MONITORING PACS  Comments received concerning the program indicate that some Districts have no substantive comments to offer and regard the program as adequate or acceptable at this time.  The other Districts  also basically accept the program, but offer recommendations centering on two broad subjects -- the role of the Board's staff and the importance of communication to all Districts. Recommendations concerning the role of the Board staff include: 1.  Following Conference approval of the program as stated, the Conference should request a more definitive implementation plan to be prepared by the Division of Federal Reserve Bank Examination and Budgets and distributed for comment to the Conference. The plan would spell out in more detail how the Division's responsibilities will be carried out in terms of organization, staffing and frequency of on-site visits.  2.  The Board staff should eliminate, or include with regular transmission of appropriate data, the comparisons of actual expenses, manpower and key measurements with budgets and operating plans. The Board staff does not have information available to it to make necessary changes to the prorated budget and an attempt to analyze such comparisons seems to go beyond the roles of monitoring proper reporting and of supplying inter-District comparative and summary information.  3.  With regard to such matters as appropriate definitions for activities, performance measures and environmental statistics, the Conference should assure that the Board staff will seek the concurrence of the relevant Conference Subcommittee as well as SASBE before adding, deleting or modifying any of the PACS definitions. (For.SASBE communication to the Conference, note Attachment A, the November 5 letter from the GMSSS Chairman to the SASBE Chairman.)   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4.  The Conference should update and reaffirm the guidelines for handling accounting matters between the Board's Division of Federal Reserve Bank Examinations and Budgets and SASBE, approved by the Conference at its meeting of November, 1969. (Appendix B presents a proposed updated version.)  5.  SASBE should provide to the Board's staff a definitive statement of past task force, subcommittee and Conference decisions and interpretations as a common basis from which to proceed.  Recommendations concerning the importance of communication by the Board's staff to all Districts include: 1.  The Board's staff should publish the details of the comprehensive edit checks referenced in point I.A.1. so that each District can incorporate such tests in its own internal edit program, in order to assure quality reporting from the source.  2.  The Board's staff should formally document and circulate to all Districts all inquiries and interpretations, written and verbal, to promote uniformity of reporting and to avoid unknowing misinterpretation of the accounting manual provisions.  3.  The inspection team should perform an early round of onsite inspections at all of the head offices to identify and correct as soon as possible the honest differences of classification and interpretation that may have resulted from the many local decisions involved in the installation phase. In order to minimize the impact of such differences on the short-term inter-bank comparisons, interpretations and conceptual resolutions should be communicated immediately to all Districts so that any other office can adjust its practices upon receipt of notice, prior to its visit by the inspection team.  4.  SASBE should schedule a conference of District PACS representatives following the first year of operation, but leave open the frequency of future meetings, with biennial meetings perhaps being an objective.  FRB PHILADELPHIA - December 1, 1976   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  ATTACHMENT A  November 5, 1976  Mr. Thomas E. Ormiston, Jr., Chairman Subcommittee on Accounting Systems, Budgets and Expenditures Federal Reserve Bank of Cleveland Cleveland, OR 44101 Dear Tom: At its October 26 meeting in Charlotte, the Committee on Management Systems and Support Services reviewed the program for maintaining and monitoring PACS, which has been agreed to by SASBE and the Board of Governors' staff. Section II.A.3.a. of the program indicates that the Board's maintenance group will consult with SASBE in cases where there is an inquiry for interpretation to which the Board's group does not sea a straightforward repponae. If any "policy" change is suggested by such an inquiry, our Committee is assuming that SASBE will alert us prior to responding to the Board group's request for consultation. By this alert, we can try to avoid difficulties following release of an interpretation which is totally acceptable from an accounting standpoint, but may have some complications from a Conference view. we  Thanks for all your help Tom. I sure appreciate the you keep things on track. Sincerely,  Mark H. Willes, Chairman Committee on Management Systems and Support Services cc: Messrs. Boysen Williams  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  ATTACHMENT B  PROPOSED UPDATE  Guidelines for handling accounting matters between the Board's Division of Federal Reserve Bank Examinations and Budgets and SASBE, initially approved by the Conference at its meeting of November 5, 1969. Proposed changes reflect only the current Division, Committee and Subcommittee titles.  1.  Normally the Division of Federal Rese rve Bank Examinations and Budgets will contact the Subcommittee on Accounting Systems, Budgets, and Expenditures.  2.  The Chairman of the Subcommittee will inform the Chairman of the Committee on Mana gement Systems and Support Services of all topics disc ussed with the Subcommittee by the Division.  3.  When, in the opinion of the Division , a matter is of a *minor nature, the advice and counsel of the Subcommittee will be sought on an informal basis.  4.  When, in the opinion of the Division , a matter is of a major nature, the Division will dire ctly inform the Chairman of the Committee on Manageme nt Systems and Support Services regarding the matter that it is taking up with the Subcommittee.  5.  Whenever the Committee on Manageme nt Systems and Support Services, or its Chairman, consider s a matter taken up by the Division with the Subcommi ttee to be of a major nature, the Chairman of the Comm ittee will request the Subcommittee to follow the prescribed reporting procedures applicable to matters which should receive the attention of the Conferen ce of First Vice Presidents.  Datu  •  This copy 101 information of  Copies have been sent. to  Mr. Volcker V Mr. Timlen Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. Coopersmith Miss Cutler Mr. Oppenheimer Mr. Flanagan Correspondence Files Mrs. Minehan  10/76   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  12 3 76  FEDERAL RESERVE BANK OF NEW YORK NEW YORK, N.Y. 10045 AREA CODE 212 791-5268  A. MARSHALL PUCKETT   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  VICE PResioeNT  December 2, 1976  MEMBERS OF THE CONFERENCE OF FIRST VICE PRESIDENTS:  Enclosed are copies of the letters from Mr. Thomas C. Sloane, Chairman of the Subcommittee on Fiscal Agency Operations informing the Governmental departments and agencies for whom the Reserve Banks act as fiscal agents of the adoption of PACS by the Federal Reserve System as the new budgeting, expense accounting and reporting systems effective January 1, 1977. For those agencies where our function is to issue, service, and redeem securities, process coupons, and handle closely related matters, our reimbursement claims will reflect each agency's pro-rata share of the costs of the appropriate PACS activities based on the ratio of their volume to the total volume processed in the activities. In all other instances, the agencies will be billed on an actual cost basis.  I .7774;  10114 , —.•  A. Marshall Puckett Project Director PACS Phase III Task Force  Enclosures  RECEIVED DEC 03 1976 ANSWERED  ..................................................  ATTENDED TO  THOMAS M. TIIVILEN  ./eciAc-s  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  FEDERAL RESERVE BANK OF NEW YORK NEW YORK, N.Y. 10045 AREA CODE 212.791-5000  November 10, 1976  Effective January 1, 1977, the Federal Reserve Banks will implement new budgeting, expense accounting and reporting systems, known as PACS, an acronym for the. Federal Reserve Planning and Control System. These systems will replace the current accounting procedures used by the Federal Reserve Banks in claiming reimbursement for fiscal agency work. Accordingly, as chairman of the Federal Reserve System Subcommittee on Fiscal Agency Operations, I am writing each Government, Governmentsponsored and international agency for which one or more Reserve Banks perform operations and from which they claim, or have authority to claim, reimbursement, to inform them, in advance, of this pending .change and the procedures that will be used in calculating reimbursable amounts under PACS. Enclosed for your information is a brief memorandum summarizing the essentials of PACS. You will note that under the new system, all expenses are classified by the specific output of the Federal Reserve System to which they are related, and are shown at three levels of aggregation: activity, service and service line. Two of the service lines, entitled "Services to the United States Treasury and Government Agencies" and "Services to Financial Institutions and the Public" contain activities and services which include all the fiscal and depositary operations that are performed by the Reserve Banks for Government agencies. The PACS activities for which reimbursement will be claimed are consistent with the current agreement(s) between the Reserve Banks and your agency. A description of the service structure is enclosed for your information.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  The major difference between PACS and the accounting system currently used by the Federal Reserve Banks involves the cost accounting techniques used in arriving at the expenses shown at the activity, service and service line levels. Under PACS, the activity level reflects the incremental cost of performing the operations defined within the activity, that is, the costs that are directly associated with the activity and that would not be incurred if the activity were not performed. At the service and service line levels full costs, including prprations of all overhead, are shown. The agencies are currently billed under the present accounting system for amounts that represent incremental costs, but the, definitions used in determining these costs differ between the two systems. Thus PACS claims will include a somewhat different set of costs for reimbursement than are shown on current claim's. The PACS system is based on generally accepted principles of cost accounting and is more internally consistent than the procedures used currently. The Treasury Fiscal Service has agreed to the use of PACS activity data as the accounting base for its reimbursement claims. We have thoroughly reviewed the effect that the change to PACS will have on claims made to the Bureau of the Public Debt, the division of the Treasury Fiscal Service for which the Bank8 perform the majority of their fiscal agency work. In this regard, we found that the change to PACS will not have a material annual impact on total claims on the Treasury, and we fully expect this to be true of claims made on all other agencies. The activities performed for Government and international agencies have been defined generally as Issuing, Servicing and Redeeming securities, Safekeeping, Coupon Processing, and .Treasurer's General and Government Agency Account Processing. Descriptions of all of these activities are enclosed although not every activity may be performed for your agency. As noted above, the Banks accumulate their costs by activity. However, there are no separate subcategories under the activities relating to each agency. Rather, under PACS, the Banks will bill each agency its pro-rata share of the total costs of the appropriate activities, based on the relationship of the number of transactions processed for your agency to the total number of transactions processed for all agencies. Of course, each agency will be billed only for the activities performed for it. Under the new system, it will not be possible for the Banks to provide a breakdown of expenses by type of security handled for a particular agency as is presently done for several agencies. That is, the Reserve Banks will not segregate transactions processed within an activity by type of security, but only by the agency which issued the security as stated above.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  3  . PACS claims will provide a breakdown of costs within an activity by type of expense and will also show the total transactions for the activity, the number of transactions processed for your agency, and the pro-rata shar e of total activity costs that is being claimed. A sample format of a PACS agency claim for the Issuing activity is enclosed. (The form of the claim may vary from Bank to Bank, but the cont ent will be the same.) If you have any questions, plea'se contact the PACS Project Director, Mr. A. Marshall Puckett, Vice President, Accounting Control Function, Federal Reserve Bank of New York. Sincerely,  c\-tvsib_LC Thomas C. Sloane, Chairman Subcommittee on Fiscal Agency Operations  Enclosures  •  Similar Letters Were Sent to the Following Agencies  Mr. Wolf .Preuss Treasurer Asian Development Bank Commercial Center P 0 Box 126 Manila, Philippines  Mr. H. Gold Deputy Director Department of Housing and Urban Development Insurance Benefits 451 7th Street, S. W. Washington, D. C. 20410  Mr. H. T. Keith Secretary. Distfict of Columbia Armory Board 2001 East Capital Street Washington, D. C. 20003  416.4.•  Mr. Warren W. Glick Senior Vice President Financing Export-Import Bank of the United States Washington, D. C. 20571  Mr. M. J. LaVerghetta Director Finance Division Farm Credit Administration Banks for Cooperatives 490 L'Enfant Plaza, S. W. Washington, D. C. 20578  Mr. M. J. LaVerghetta Director Finance Division Farm Credit Administration Federal Intermediate Credit Banks 490 L'Enfant Plaza, S. W. Washington, D. C. 20578   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr.  M. J. LaVerghetta Director Finance Division Farm Credit Administration Federal Land Banks 490 L'Enfant Plaza, S. W. Washington, D. C. 20578  Mr. Arthur C. Harman, Jr. Deputy Administrator Office of the Administrator United States Department of Agriculture Farmers Home Administration Washington, D. C. 20250  Mr. Michael Mickett Acting Director Office of Finance Federal Home Loan Bank Board 320 First Street, N. W. Washington, D. C. 20552  Mr. Ronald Struck Assistant Vice President Marketing Federal Home Loan Mortgage Corporation 311 First Street, N. W. Washington, D. C. 20001  Mr. Robert J. Mahn, Jr. Vice President and Controller Federal National Mortgage Association 1133 Fifteenth Street, N. W. Washington, D. C. 20005  Mr. V. N. Nelson Assistant Treasurer Government National Mortgage Association 451 7th Street, S. W. Washington, D. C. 20414  •  2  Mr. Pedro Iraneta Treasurer Inter-American Development Bank Washington, D. C. 20577  Mr. Jervis Langdon, Jr. The Trustee of the Property of Penn Central Transportation Company Six Penn Center Plaza Room 1863 Philadelphia, PA 19104  •••   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Mr. David A. Wollard Associate Administrator for Finance and Investment Office df- the Administrator Small Business Administration Washington, D. C. 20416  Mr. Loren Carlson Student Loan Marketing As 1750 K Street, N. W. Washington, D. C. 20006  Mr. J. Durell, Chief Finance Planning Staff Tennessee Valley Authority 838 Power Building Chattanooga, Tennessee 37401  Mr. Eugene H. Rotberg Treasurer The World Bank 1818 H Street, N. W. Washington, D. C. 20433  Mr. Philip Harding United States Postal Service Office of the Treasurer Room 5426 Washington, D. C. 20260  OOP  M. Patricia Sestito Assistant Treasurer Washington Metropolitan Transit Authority 950 L'Enfant Plaza Washington, D. C. 20024  PACS PHASE III TASK FORCE AUGUST 23, 1976  Summary of PACS Essentials  Effective January 1, 1977, the Reserve Banks will implement new budgeting, exp ense accounting and reporting systems known as PACS, an acronym for the Federal Reserve Planning and Control System. This paper focuses on the main elements of the new systems and is an introduct ion to the systems for those who will be using them. PACS incorporates generally acc epted principles of cost accounting and is designed to fac ilitate planning for and contro lling expenses at the Reserve Banks.  In general, expenses associate d with  the purchase of goods and servic es are recognized only when the goods 'and services are used by the Res erve Banks in its operations. All buildings, fixed assets, furnit ure, fixtures and operating equ ipment are capitalized and deprec iated, with rates of depreciat ion and salvage values based on existi ng IRS regulation. Provision is also made for the accrual of oth er significant expenses to ref lect amounts used in the accounting period. As in any other cos t accounting system, expenses are cla ssified in two ways: by type of expense (object) and by the rea son for the expense (activity). Within the classification by typ e, there are three levels of aggregation: detailed obj.ect, .object and summary object. Summary obj ects are the highest level of aggregati on and are used to report the direct expenses involved in each activity to the Board of Govern ors. Objects, for the most part, pro vide historical continuity with the existing expense system, while det ailed objects provide more specif ic   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2  .dentification of expenses.  The hierarchy of detailed objects,  objects and summary objects is known as the PACS Chart of Accounts. The activity classification of expenses focuse s on the specific output of the Federal Reserve System to which expenses are related.  There are three levels of aggregation: activi ty, service  and service line.  Service lines are the highest level of agg regation  and represent the -ongoing responsibilities of the Federal Reserve System.  Services are programs instituted to fulfill the se respon-  sibilities, while activities represent the basic operations of the Reserve Banks.  The hierarchy of activities, services and ser vice  lines is known as the PACS service structure . The service structure is divided into two par ts: 1) five output service lines, services and activi ties; and 2) two internal service lines, services and activitie s.  The output service  lines focus on operations directly involved in the production of external services provided by the Federal Res erve System and include the following: Monetary and Economic Policy; Ser vices to the U.S. Treasury and Government Agencies; Services to Fin ancial Institutions and the Public; and Supervision and Regulatio ns.  The internal  service lines include all the support and overhe ad operations of the Reserve Banks.  Support operations are defined as those operation s  necessary for the ongoing proJuction of servic es by the Reserve Banks, and include: computer operations, dat a systems support, motor vehicles, building operations, housekeeping , stock of supplies, printing and duplicating, graphics, pla nning and District projects. Overhead operations are defined as tho se operations not involved in production but necessary to operate the Federal Reserve Banks, and include: Bank and System Administrati on, System projects, mail, legal,   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  3  111  budget and expense control, general books, files and records storage, personnel, medical, food service, purchasing, protection, office equipment maintenance, emergency preparedness, library, telephone and telegraph operations, and audit. PACS provides different cost information at the different levels of aggregation of the service structure to facilitate the use of the new systems by different levels of management within the Federal Reserve System and other users of PACS.  At the activity  level, what could be termed incremental, controllable costs are provided, basically for use by the managers of activities within the Banks in comparing their progress against plans and against the performance of other Reserve Banks in the activity.  At the output  service level, full costs are provided for use by more senior Bank "and System management, while the service line level provides a consolidated overview of System costs using the five output service lines. The process of showing costs at different levels of aggregation is accomplished in four steps.  First, all expenses are  identified by detailed object and are distributed to activities. Generally speaking, activities can be charged with any and all types of expense.  Second, support activity costs are redistributed directly  to using activities on the basis of actual or standard costs.  Third,  overhead activity costs are allocated to output services on the basis of actual usage or personnel or dollar ratios, depending on the nature of the overhead charge.  Finally, output services are aggregated into  output service lines, which, after the full-costing process is complete, reflect all direct, support and overhead costs separated into the five major responsibilities of the Federal Reserve System.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Expense reports on a PACS basis will be published quarterly by the Board of Governors.  Two types of reports will be  furnished: 1) a detailed activity report showing cost information by summary object and support area for each activity within each office of every District; and 2) an executive summary focusing on fully-costed services and service lines and other aggregated cost information by District. The detail ed activity report will also include statistics which should fac ilitate the evaluation of performance at any Reserve Office aga inst its own plan or against the performance of other offices.  Two types of statistics are provid ed.  All activities have manhours and the average namber of personnel calculations associated with them.  In addition, each activity whose  output is considered measurable has a volume statistic, and unit cost and unit productivity measures.  In combination, manhours,  average number of personnel, volume, uni t cost and unit productivity are referred to as the productivity measur es of an activity. The second type of statistic is kno wn as environmental. These measures are intended to pro vide additional information about the envi onment in which the activi ty is taking place in order to facilitate analysis of the activity.  For example, if a drop in pro-  ductivity is noted in the activity Verifying Currency Deposits, it is helpful to know whether the number of depositor errors has increased per deposit thereby increasin g the work necessary to process each deposit. The environmental statistics for this activity give this information and help to tell a more complete story about the activity than is obtainable simply fro m an analysis of the producvity statistics.  Environmental measures can also provid e information  on changing levels of quality of Reserve Bank output and changing policy direction.  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  . _5_  •  While the description above focused on PACS as an expense accounting and reporting tool, the new systems will integrate the planning and control processes at each Reserve Bank.  The PACS  framework will thus also be used in the annual budget and in preparing multi-year plans.  The design of the annual budget mirrors  PACS reports in that summary information at the fully costed service and service line level is required in Part I of the budget, and more detailed information at the activity level is required in Part II. While there will not be a published report comparing PACS expenses against the budget, such reporting will be facilitated at each Bank and the Board of Governors because of this aspect of PACS.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  •  SERVICE r_TRUCTURE Introduction  The hierarchy of activities, services and service lines is used to group expenses into meaningful categories for analysis and reporting. Service lines represent the ongoing responsibilities of the Federal Reserve System expressed in terms of the broad categories of output generated by the System; services represent the basic programs instituted to fulfill these ongoing responsibilities; and activities reflect the basic operations or processes within each service. There are three types of activities: output, support and overhead. Output activities represent processing or analytical operations which make possible the direct production of services provided by the Federal Reserve System. Support activities represent operations which are necessary to continue or improve production but may not be involved in the actual production process. Overhead activities represent operations that are necessary to ensure the continuity and/or efficient operation of the Reserve office but are not directly connected with production. Activity definitions have been written to facilitate uniform expense aggregation among the Banks and branches. These activity definitions indicate the responsibilities covered by the activity and, where appropriate, the beginning and end of the processes to be included in the activity. A list of specific operations is also given for each activity. These operations are meant to define the activity further and should not be considered all-inclusive. In particular, words such as processing, preparing, analyzing, etc., are meant to encompass all related operational actions even if these are not specifically identified. Each activity is also assumed to include all related clerical and • administrative operations and these operations are not specifically identified in the activity definition. In addition, activities describe responsibilities without regard to organization structure; expenses directly related to an activity as described by the activity definition should be shown in that activity regardless of where performed. Finally, although the responsibilities and operations listed for each activity in general reflect only direct charges into the activity, distributions from support activities and any recoveries received to offset activity expense are also to be included in the activity as described in Sections 5 and 9 of this Manual, respectively. Two types of statistical measures can be associated with a given activity: productivity measures and environmental statistics. While the activity definitions indicate the statistics to be reported for each activity, this listing is intended only as a cross-reference to Section 6 of this Manual which explains the two types of measures and provides other information on statistics. The remainder of this Section contains a description of the coding scheme used to identify service lines, services and activities; the names and structure of the service lines, services and activities, together with their respective codes; and the activity definitions and associated statistical lists.  (1-2-76)  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  3-1  SERVICE STRUCTH:E CODING Coding for the service structure makes use of a structured number scheme which identifies data elements by indicating the placement of the data element in its hierarchy. The chart of service structure accounts classifies services at three levels: service lines, services and activities. Codes are assigned to activities which indicate both the service and service line to which the activity relates. The code for activities includes enough to accommodate the maximum foreseeable number of service lines, servicesdigits and activities, and allows for code insertion. This code takes the following form: ABBC A represents the service line (digits 1-8 are available; 9 is reserved for project identification); BB represents the service; and C represents the activity. Zeroes denote summarization and have not been use to code specific information at any level in the service structure. The following is a sample application of the service structure coding. Sample PACS Service Structure Coding  ,  Code  Service Line  1000  Monetary and Economic Policy  1300  Monetary and Economic Policy  Economic Policy Determination  1302  Monetary and Economic Policy  Economic Policy Determination  Current Economic Analysis  1304  Monetary and Economic Policy  Economic Policy Determination  Long-Range Economic Analysis  1306  Monetary and Economic Policy  Economic Policy Determination  System-Initiated Data Reporting  1308  Monetary and Economic Policy  Economic Policy Determination  Bank -Initiated Data Reporting  1600  Monetary and Economic Policy  Open Market Trading  1604  Monetary and . Economic Policy  Open Market Trading  Note:  .  Activity  Open Market Trading  Numerical codes not presently assigned are reserved for future Systemwide use, and therefore should not be used or assigned by individual Reserve Banks.  (1-2-76)   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Service  3-2  SERVICE STRUCTURE Output Service Lines Service Lines  Services Code  Monetary and Economic Policy  1000  Activities Code  Economic Policy Determination  Code  1300  Current Economic Analysis Long Range Economic Research Data Reporting  1302 1304 130E  Open Market Trading  1600  Open Market Trading  1604  Savings Bonds  2100  Original Issue Accounting for Stock Reissues and Replacements Direct Redemptions Processing Retired Bonds  2101 2103 2104 2106 2108  Other Treasury Issues  2200  Original Issue Servicing Redeeming  2202 2205 2208  2300  Issuing Servicing Redeeming  2302 2305 2308  •  Services to the U.S. Treasury and Government Agencies  2000  4.31 C.4.11   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  , , ---Government Agency Issues  Other Treasury and Government Agency Services  2400  Other Treasury and Government Agency Services Collecting and Processing Statistical Data  2408  Coupon Processing  2504  2404  Treasury and Government Agency Coupons  2500  Food Coupons  2600  Processing Destruction  2604 2608  Government Accounts  2700  T.T. & L. Accounting Treasurer's General and Government Agency Account Processing  2704 2708  4  Service Lines  Services  Activities  4=1,  Code  Code •  Services to Financial Institutions and the Public   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Federal Taxes  2800  Federal Tax Processing  2804  Currency Verification and Destruction  2900  Verification Destruction  2904 2908  Currency  3090  Paying and Receiving Verifying Deposits Cancellation Federal Reserve Note Issue  3092 3094 3096 3098  Coin  3180  Paying and Receivin., Verifying Deposts Wrapping  3182 3185 3188  3000  Electronic Funds Transfers  Commercial Checks  3270  3360  Transfer of Reserve Account Balances Automated Clearing House Operations  3274 3278  Processing Adjustments Return Items Interdistrict Transportation System  3368  3362 3364 3366  Other Checks  3450  Government Check Processing Postal Money Order Processing  3454 3458  Securities  3540  Purchase and Sale Safekeeping Clearing  3542 3545 3548  Loans to rewLers and Others  3632  Member Bank Accounting Monitoring Reserve Accounts  3724 3728  Loans to Members and Others  3630  Reserve Accounts  3720  Service Lines  Services Code  Code   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4000  Code  Non-Cash Collection  3810  Non-Cash Collection  3914  Bank and Public Relations  3900  Bank Visits and Programs for Bankers Publications Public Progr,,ns Functional C .)s!. Arai/sis  3902 3904 r-C6 3902  Services to Ocher Cenixal Banks Services Rendered Others  39E4 3988  Member Bank Eyawinations International Banking Organization Exaninations Banking Holding Company Examinations and Inspections Processing and Analyzing Examination Reports  4302  Other Supervision and Regulations  Activities  Examination and Monitoring of District Financial Institutions  Administration of La6s and Regulations Related to Banking  Banking and Financial Market Structure Studies  3980  4300  4600  4900  Processinç ewber r,ank and Int.rnational Panking Organizatifi. Applications Processing Holding Cowpany Applications Collecting and Processing Condition and Other Statistical Reports Administration Ind Monitoring of Regulations  4305 4306 4302  A601 4602 4604 4606  Market Structure and Supervisory and Regulatory Policy 49C.: Studies  • SERVICE STRUCTURE  •  Internal Service Lines CN  Service Lines  Services Code  Support Services  6000  Activities Code  Data Processing  6100  Computer Operations Data Systems Support  6104 6108  Motor Vehicles  6300  Motor Vehicles  6304  Occupancy  6400  Printing and Supplies  6500  Building Operation Housekeeping Stock of Supplies Printing and Duplicating Graphics  6404 6408 6502 6504 6508  Planning  6700  Planning  6704  District Projects  6900  District Projects  6904  Administration  8100  Bank Administration System Administration  8104 8108  System Projects  8150  System Projects  8154  Mail  8200  Mail  8204  Legal  8250  Legal  8254  Budget and Expense Control  8300  Expense Accounting Budget Preparation and Control  8304 8308  General Books  8350  General Ledger and Capital Stock  8354  Files and Records Storage  8400  Files and Records Storage  8404  4.1 01  Overhead Services   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  8000  Code  )  4  ,  Service Lines -Ps i I ....4 01 ...,  Services Code  Activities Code  .•Personnel  8450  t  Code Recruitment and Placement Compensation Training and Educn atio Administration and Employee Relations  8452 8454 8456 8458  Medical  8500  Medical Services  8504  Food Service  8550  Food and Canteen Services  8554  Purchasing  8600  Purchasing Stockroom and Warehouse System Purchasing Service  8602 8604 8608  Protection  8650  Protection  8654  Office Equipment Maintenance  8700  Office Equipment Maintenance  8704  Emergency Preparedness  8750  Emergency Preparedness  8754  Library  8800  Library  8804  Telephone and Telegraph Operations  8854  8850  Telephone Telegraph  Audit  8900  Data Systems Auditing Financial Auditing Operational/Procedural Auditing Examination Support  8902 8904 8906 8908  i 41 I .....4   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  •  l'eclera  R  r v c, 1).i  t r  t  Formula for Determining Reimbursement Claim Issuing Securities XYZ Agency ACTIVITY EXPENSES Personnel Equipment TravelCommunications Other Shipping  Support Costs (if any) a) b) c d) e) f) g) h) i)  Computer Operations Data -Syst-eths Support Motor Vehicles Occupancy Stock of Supplies Printing and Duplicating Graphics Planning District Projects  2  Total Support Costs  Total Issuing Activity Expenses   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Total number of transactions (all agencies) Total number of transactions (XYZ Agency) Percentage share of XYZ Agency of total expenses (Ct B) XYZ Agency's pro-rata share of total expenses (A x D)  (A)  (B) (C) %  (D)  • •  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  FEDERAL RESERVE  hANK OF  NEW YORK, N.Y.  NEW YORK  10045  AREA CODE 212-791-5000  November 16, 1976  Effective January 1, 1977, the Federal Reserve Banks will implement new budgeting, expense accounting and reporting systems, known as PACS, an acronym for the Federal Reserve Planning and Control System. These systems will replace the current accounting procedures used by •the Federal Reserve Banks in claiming reimbursement for fiscal agency work. Accordingly, as chairman of the Federal Reserve System Subcommittee on Fiscal Agency Operations, I am writing each Government, Governmentsponsored and international agency for which one or more Reserve Banks perform operations and from which they claim, or have authority to claim, reimbursement, to inform them, in advance, of this pending change and the procedures that will be used in calculating reimbursable amounts under PACS. Enclosed for your information is a brief memorandum summarizing the essentials of PACS. You will note that under the new system, all expenses are classified by the specific output of the Federal Reserve System to which they are related, and are shown at three levels of aggregation: activity, service, and service line. One of the service lines, entitled "Services to the United States Treasury and Government Agencies" contains activities and services which include the fiscal and depositary operations that are performed by the Reserve Banks for Government agencies. A description of the service structure is enclosed for your information. The major difference between PACS and the accounting system currently used by the Federal Reserve Banks involv es the cost accounting techniques used in arriving at the expenses shown at the activity, service and service line levels . Under PACS, the activity level reflects the incremental cost of performing the operations defined within the activity, that is,  • the costs that are directly associated with the activity and that would not be incurred if the activity were not performed. At the service and service line levels full cost s, including prorations of all overhead, are shown. The agen cies are currently billed under the present accounting system for amounts that represent incremental costs, but the defi nitions used in determining these costs differ between the two systems. Thus PACS claims will include a somewhat differen t set of costs for reimbursement than are shown on current claims. The PACS system is based on generally accepted principles of cost accounting and is more internal ly consistent than the procedures used currently. The Treasury Fiscal Service has agreed to the use of PP,CS activity data as the accounting base for its reimbursement claims. We have thoroughly reviewed the effect that the change to PACS will have on claims made to the Bureau of the Public Debt, the divi sion of the Treasury Fiscal Service for which the Banks perf orm the majority of their fiscal agency work. In this regard, we found that the change to PACS will not have a material annual impact on total claims on the Treasury, and we fully expect this to be true of claims made on all other agencies. One activity performed for Government agencies has been defined as "Other Treasury and Government Agency Services" and contains many miscellaneous activities. The services performed for your agency are included in this acti vity. The Reserve Banks will continue to follow their curr ent practice of maintaining actual cost records on the services performed under this activity for each agency. These cost reco rds will be based on PACS accounting procedures and will include the breakdown of costs shown on the sample claim encl osed. If you have any questions, please contact the PACS Project Director, Mr. A. Marshall Puckett, Vice President, Accounting Control Function, Federal Reserve Bank of New York. Sincerely,  C Thomas C. Sloane, Chairman Subcommittee on Fiscal Agency Operations  Enclosures   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4111   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Similar Letters Were sent. to the Following Agencies  Mr. R. Gibbs, Treasurer Commodity Credit Corporation Washington, D. C. 20250  Mr. Allan N. Vinick, Secretary Emergency Loan Guarantee Board C/O Secretary of the Treasury, Chairman Washington, D. C. 20220  Mr. Slanley Sommerfield Foreign Assets Control Treasury Department Washington, D. C. 20226  Mr. George Contos General Services Administration Office of Finance 18th and F Streets, N. W. BCFF, 6-143 Washington, D. C. 20405  Contract Financing Division Office of the Comptroller of the Army Room 2B 665 The Pentagon Washington, D. C. 20310  Director of Banking Contract Financing Code NCD4 Office of the Comptroller Department of the Navy Washington, D. C. 20350  Mr. Robert Brown, Director Office of Data Service International Affairs Room 5127 Department of the Treasury Washington, D. C. 20220  ".•  Nib  Fvd( 1.11  pi-flict  Reimbursement Claim Other Treasury and Government Agency Services XYZ Agency  ACTIVITY EXPENSES Personnel Equipment Travel Communications Other Shipping  Support Costs (if any) a) b) c) d) e) f) g) h) i)  Computer Operations Data Systems Support Motor Vehicles Occupancy . Stock of Supplies Printing and Duplicating Graphics Planning District Projects  Total support Costs  Total Activity Expenses for XYZ Agency   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  FEDERAL RESERVE  ilANK OF  NEW YORK  NEW YORK, N.Y. 10045 AREA CODE 212-791-5000  November 18, 1976  Effective January 1, 1977, the Federal Reserve Banks will implement new budgeting, expense accounting and reporting systems, known as PACS, an acronym for the Federal Reserve Planning and Control System. These systems will replace the current accounting procedures used by the Federal Reserve Banks in claiming reimbursement for fiscal agency work. Accordingly, as chairman of the Federal Reserve System Subcommittee on Fiscal Agency Operations, I am writing each Government, Governmentsponsored and international agency for which one or more Reserve Banks perform operations and from which they claim, or have authority to claim, reimbursement, to inform them, in advance, of this pending change and the procedures that will be used in calculating reimbursable amounts under PACS. Enclosed for your information is a brief memorandum summarizing the essentials of PACS. You will note that under the new system, all expenses are classified by the specific output of the Federal Reserve System to which they are related, and are shown at three levels of aggregation: activity, service, and service line. One of the service lines, entitled "Services to Financial Institutions and the Public" contains activities and services which include some of the fiscal and depositary operations that are performed by the Reserve Banks for Government agencies. A description of the service structure is enclosed for your information. The major difference between PACS and the accounting system currently used by the Federal Reserve Banks involves the cost accounting techniques used in arriving at the expenses shown at the activity, service and service line levels. Under PACS, the aqtivity level reflects the incremental cost of performing the operations defined within the activity, that is,  S  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  the costs that are directly associated with the activity and that would not be incurred if the activity were not performed. At the service and service line levels full costs, including prorations of all overhead, are shown. The agencies are currently billed under the present accounting system for amounts that represent incremental costs, but the definitions used in determining these costs differ between the two systems. Thus PACS claims will include a somewhat different set of costs for reimbursement than are shown on current claims. The PACS system is based on generally accepted principles of cost accounting and is more internally consistent than the procedures used currently. The Treasury Fiscal Service has agreed to the use of PACS activity data as the accounting base for its reimbursement claims. We have thoroughly reviewed the effect that the change to PACS will have on claims made to the Bureau of the Public Debt, the division of the Treasury Fiscal Service for which the Banks perform the majority of their fiscal agency work. In this regard, we found that the change to PACS will not have a material annual impact on total claims on the Treasury, and we fully expect this to be true of claims made on all other agencies. One activity performed for Government agencies has been defined as Safekeeping of securities, an activity performed by some Reserve Banks for your agency. A description of this activity is enclosed. As noted above, the Banks will accumulate their costs by activity. However, there are no separate subcategories under the activities relating to each agency. Rather, under PACS, the Banks will bill each agency its pro-rata share of the total costs of this activity, based on the relationship of the number of transactions processed for your agency to the total number of transactions processed. The PACS claim will provide a breakdown of costs within an activity by type of expense and will also show the total transactions for the activity, the number of transactions processed for your agency, and the pro-rata share of total activity costs that is being claimed. A sample format of a PACS agency claim for the Safekeeping activity is enclosed. (The form of the claim may vary from Bank to Bank, but the content will be the same.) If you have any questions, please contact the PACS Project Director, Mr. A. Marshall Puckett, Vice President, Accounting Control Function, Federal Reserve Bank of New York. Sincerely,  6frot..C. Thomas C. Sloane, Chairman SuLcolumittee on Fiscal Agency Operations Enclosures  .ti   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Similar Letters Were Sent to the Following Agencies  Program Accounting Division Department of Housing and Urban Development Division of Finance and Accounts Office of the Secretary 451 7th Street, S. W. Washington, D. C. 20410  Economic Development Administration Accounting Division Room 7219 United States Department of Commerce Washington, D. C. 20230  0 •  Federal Reserve N'Ari(t  Formula for Determining Reimbursement Claim Safekeeping Securities XYZ Agency ACTIVITY EXPENSES Personnel Equipment Travel Communications Other Shipping  Support Costs (if any) a) b) c) d) e) 'f) g) h) i)  Computer Operations Data Systems Support Motor Vehicles Occupancy Stock of Supplies Printing and Duplicating Graphics Planning District Projects  Total support Costs (A)  Total Safekeeping Activity Expenses   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Total number of transactions (all agencies) Total number of transactions (XYZ Agency) Percentage share of XYZ Agency of total expenses (Ct B) XYZ Agency's pro-rata ;Ilarc of total expenses (A x D)  (B) (C) %  (D)  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  FEDERAL RESERVE BANK OF NEW YORK NEW YORK, N.Y. 10045 AREA CODE 212-791-5000  November 18, 1976  Mr. Sumner Cohen United States Treasury ESF Fiscal Thomas Edison Building Room 640 Washington, D. C. 20220 Dear Mr. Cohen: Effective January 1, 1977, the Federal Reserve Banks will implement new budgeting, expense accounting and reporting systems, known as PACS, an acronym for the Federal Reserve Planning and Control System. These systems will replace the current accounting procedures used by the Federal Reserve Banks in claiming reimbursement for fiscal agency work. Accordingly, as chairman of the Federal Reserve System Subcommittee on Fiscal Agency Operations, I am writing each Government, Governmentsponsored and international agency for which one or more Reserve Banks perform operations and from which they claim, or have authority to claim, reimbursement, to inform them, in advance, of this pending change and the. procedures that will be used in calculating reimbursable amounts under PACS. Enclosed for your information is a brief memorandum summarizing the essentials of PACS. You will note that under the new system, all expenses are classified by the specific output of the Federal Reserve System to which they are related, and are shown at three levels of aggregation: activity, service, and service line. One of the service lines, entitled "Monetary and Economic Policy" contains activities and services which include some of the fiscal and depositary operations that are performed by the Reserve Banks for Government and international agencies. A description of the service structure is enclosed for your information. The major difference between PACS and the accounting system currently used by the Federal Reserve Banks involves the cost accounting techniques used in arriving at the expenses shown at the activity, service and service line levels. Under PACS, the activity level reflects the incremental cost of performing the operations defined within the activity, that is,' the costs that are directly associated with the activi ty and that would not be incurred if the activity were not performed.  preellP11   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  d:m  At the service and service line levels full costs, including prorations of all overhead, are shown. The agencies are currently billed under the present accounting system for amounts that represent incremental costs, but the definitions used in determining these costs differ between the two systems. Thus PACS claims will include a somewhat different set of costs for reimbursement than are shown on current claims. The PACS system is based on generally accepted principles of cost accounting and is more internally consistent than the procedures used currently. The Treasury Fiscal Service has agreed to the use of PACS activity data as the accounting base for its reimbursement claims. We have thoroughly reviewed the effect that the change to PACS will have on claims made to the Bureau of the Public Debt, the division of the Treasury Fiscal Service for which the Banks perform the majority of their fiscal agency work. In this regard, we found that the change to PACS will not have a material annual impact on total claims on the Treasury, and we fully expect this to be true of claims made on all other agencies. One activity under the service line "Monetary and Economic Policy" has been defined as Open Market Trading and encompasses the services provided to you by this Bank. A description of this activity is enclosed. This Bank will continue to follow its current practice of maintaining actual cost records on the services provided under this activity for the Treasury. These cost records will be based on PACS accounting procedures and will include the breakdown of costs shown on the sample claim enclosed. If you have any questions, please contact the PACS Project Director, Mr. A. Marshall Puckett, Vice President, Accounting Control Function, Federal Reserve Bank of New York. Sincerely,  Thomas C. Sloane, Chairman Subcommittee on Fiscal Agency Operations  Enclosures  a.  rwdov.ir rr  •  r  vr  Iii .  Ilo'l  Reimbursement Claim Open Market Trading Treasury Department  ACTIVITY EXPENSES Personnel Equipment Travel Communications Other Shipping  Suaport Costs (if any) Computer Operations Data Systems Support Motor Vehicles Occupancy Stock of Supplies Printing and Duplicating Graphics Planning District Projects Total support Costs  Total Activity Expenses for Treasury Department   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  I.  FEDERAL RESERVE 1ANK OF NEW YORK  •  NEW YORK, N.Y. 10045 AREA COOE 212.791-5000  November 19, 1976  Mr. Edward F. Phelps, Jr. Controller Federal Deposit Insurance Corporation 550 Seventeenth Street, N.W. Washington, D. C. 20429 Dear Mr. Phelps: Effective January 1, 1977, the Federal Reserve Banks will implement new budgeting, expense accounting and reporting systems, known as PACS, an acronym for the Federal Reserve Planning and Control System. These systems will replace the current accounting procedures used by the Federal Reserve Banks in claiming reimbursement for fiscal agency work. Accordingly, as chairman of the Federal Reserve System Subcommittee on Fiscal Agency Operations, I am writing each Government, Governmentsponsored and international agency for which one or more Reserve Banks perform operations and from which they claim, or have authority to claim, reimbursement, to inform them, in advance, of this pending change and the procedures that will be used in calculating reimbursable amounts under PACS. Enclosed for your information is a brief memorandum summarizing the essentials of PACS. You will note that under the new system, all expenses are classified by the specific output of the Federal Reserve System to which they are related, and are shown at threv levels of aggreqation: activity, service, and service line. Two of the service lines, entitled "Services to the United States Treasury and Government Agencies" and "Services to Financial Institutions and the Public" contain activities and services which include all the fiscal and depositary operations that. are performed by the Reserve Banks for Government agencies. A description of the service structure is enclosed for your information.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  I  or'  • lrrampAl. RESERVE  - 2 DANK OF NEW  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  The major difference between PACS and the accounting system currently used by the Federal Reserve Banks involves the cost accounting techniques used in arriving at the expenses shown at the activity, service and service line levels. Under PACS, the activity level reflects the incremental cost of performing the operations defined within the activity, that is, the costs that are directly associated with the activity and that would not be incurred if the activity were not performed. At the service and service line levels full costs, including prorations of all overhead, are shown. The agencies are currently billed under the present accounting system for amounts that represent incremental costs, but the definitions used in determining these costs differ between the two systems. Thus PACS claims will include a somewhat different set of costs for reimbursement than are shown on current claims. The PACS system is based on generally accepted principles of cost accounting and is more internally consistent than the procedures used currently. The Treasury Fiscal Service has agreed to the use of PACS activity data as the accounting base for its reimbursement claims. We have thoroughly reviewed the effect that the change to PACS will have on claims made to the Bureau of the Public Debt, the division of the Treasury Fiscal Service for which the Banks perform the majority of their fiscal agency work. In this regard, we found that the change to PACS will not have a material annual impact on total claims on the Treasury, and we fully expect this to be true of claims made on all other agencies. Two activities performed for Government agencies have been defined as Safekeeping and Other Treasury and Government Agency Services. Descriptions of these activities, which includes the services provided to you, are enclosed. As noted above, the Banks accumulate their costs by activity. Under the Safekeeping activity, there are no separate subcategories relating to each agency for which we perform that activity. Rather, under PACS, the Banks will bill each agency its prorata share of the total costs of the activity, based on the relationship of the number of transactions processed for your agency to the tot- al number of transacLions processed for all agencies. The PACS claims will provide a breakdown of costs within an activity by type of expense and will also show the total transactions for the activity, the number of transactions processed for your agency, and the pro-rata share of total activity costs that is being claimed. A sample format of a PACS agency claim for the Safekeeping activity is enclosed . (The form of the claim may vary from Bank to Bank, but the content will be the same.)  • IrECISRAL RESERVE BANK   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  or  - 3 -  NEW YORK--.------  _A separate method of billing under PACS will be used for the activity "Other Treasury and Government Agency Services" which contains many miscellaneous operations performed for the Treasury and Government agencies. Since the operations performed in this activity are so diverse, a billing based on volume would not he appropriate. Accordingly, the Reserve Banks will continue to follow their current practice of maintaining actual cost records on the services performed under this activity for each agency. These cost records will of course be based on PACS accounting procedures and will include the same breakdown of costs shown on the sample Safekeeping claim enclosed but there will be no volume data. If you have any questions, please contact the PACS Project Director, Mr. A. Marshall Puckett, Vice President, Accounting Control Function, Federal Reserve Bank of New York. Sincerely,  (. Thomas C. Sloane, Chairman Subcommittee on Fiscal Agency Operations  Enclosures  AMP/ag  r mISC.54.2-10/74  /27P -  FEDERAL  •  COPY OF TELEGRAM SEND TO CORRESPONDENCE FILES YORK PR1VAIdENVIRETQW,90.1NG • . 4 SENT BY Pki November 15, 1976 ACCOUNTING CONTROL FUNCTION '  astsekvz  OF NEW  BANK  DIYIEJION  '76  2.  YORA C.427-.Z0  i777)"4k, MARK WILLES--FRB PHILADELPHIA  We have reviewed- the material you sent November 5 concerning the maintenance and monLtoring of PACS.  The pro-  gram- as- it_ relates- to- mon-L-to-rino- Reserve- Bank compliance with PACS- instructions appears satisfactory .   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -since the Board Staff  is unquestionably-in:the best position to do that.  With regard  to the maintenance of PACS, however, ve do have some reservations about the pivotal role to be played by the Board Staff. The Staff, I feel, does not -hava-the kind of expertise in Reserve Bank operations to deal adequately with such matters as appropriate definitions for acti-vities,--per-formance measures and environmental statistics. --Thua-,--L would prefer that the Reserve Banks be given a stronger rola. in--these matters. _However, I am prepared to give the proposed arrangement a try on.the assumption that the Board staff will not -use its authority to change the system unwisely.  I assume that before adding, deleting or  modifying any of the PACS definons, the Board Staff will seek the concurrence of the relevant Conference Subcommittee as well as SASBE, and that SASBE will keep the Conference informed of any substantive PACS changes that are made without approval of affected Reserve Bank personnel.  \  TIMLEN--NEW YORK  Date 11/8/76  4Ik  FERRED FOR ATTENTION 0 MR. Puckett  This copy for information of v  Copies have been sent to  Mr. Volcker Mr. Timien V Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane V/ Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. Coopersmith Miss Cutler Mr. Oppenheimer Mr. Flanagan correspondence Files Mrs. Minehan  10/76   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  _  Federal Reserve Bank of Philadelphia Philadelphia, Pennsylvania 19105  OFFICE OF THE FIRST VICE PRESIDENT   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  November 5, 1976  TO:  MEMBERS OF THE CONFERENCE  FROM:  Mark H. Willes, Chairman Committee on Management Systems and Support Services  Enclosed for your review is a copy of the program for maintaining and monitoring PACS, which was discussed by the Committee on Management Systems and Support Services at its meeting in Charlotte on October 26. Because members of the Conference have expressed concern over the maintenance of this system, the Committee would appreciate your sending any substantive comments or suggestions to me by November 16 so that we may be assured of achieving full Conference understanding and support well ahead of the cutover date. The enclosed procedure was agreed to by the Subcommittee on Accounting Systems, Budgets and Expenditures and by the Board of Governors' staff in mid-August. It has been distributed to all Banks.  Enclosure  RECEIVED NOV 0 8 1976 ANSWERED........................... ATTENDED TO  THOMAS M. T1MLEN  October 15, 1976  00 1 Cince  To:  Cl  the  Committee on Manag*MONt,eglins and Support Services t/lark H. Willes, Chairman John T. Boysen John B. Williams  From:  . ef‘. • Thomas E. Ormiston, Jr., Chairman Subcommittee on Accounting Systems, Budgets, and Expenditures  Subject:  Monitoring and Maintaining PACS  Mark Willes requested that I forward the enclosed copy of the program for monitoring and maintaining PACS for your Committee's review at its meeting in Charlotte, North Carolina, on October 26-27, 1976. The enclosed procedure was agreed to by the Subcommittee and the Board of Governors' staff at its August 17-18, 1976 meeting. It has been distributed to all Reserve banks. Hopefully, the pages for inclusion in the PACS manual will be mailed from the Federal Reserve Bank of Chicago next week.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  PROGRAM FOR MONITORING AND MAINTAINING THE FEDERAL RESERVE EXPENSE ACCOUNTING SYSTEM  Introduction  r The primary objectives in establishing a program to monito are to assure and maintain the Federal Reserve Expense Accounting System ive recording that this accounting system continually provides an effect and statistical and reporting mechanism for the financial (expense) vitality results of operations in the System; that the System retains its of both through well-planned progressive changes that reflect the needs System continues the Reserve banks and the Board of Governors; and that the management to provide an effective tool to assist Reserve bank and Board ting in evaluating operational efficiency and planning for and alloca best be achieved Reserve bank and System resources. These objectives can es and by establishing a monitoring mechanism which ensures that expens accurate statistical data are recorded and reported in a timely and es. manner and consistent with established instructions and polici the Also, a maintenance mechanism must be established to provide for when interpretation of and revisions to accounting manual instructions clarification or change is dictated following thorough analysis.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Overall responsibility for the success of the system is shared among the Board of Governors, the Conferences, and the individual Bank Reserve banks. In this regard, the Division of Federal Reserve a monitoring Examinations and Budgets has the responsibility of staffing ces which mechanism and a maintenance mechanism, drawing upon its resour nel and include budget an3 control personnel, operations review person Reserve bank financial examiners. The monitoring staff will work with Vice personnel and the maintenance staff will work with the First s, Presidents' Conference Subcommittee on Accounting Systems, Budget ed in this and Expenditures in fulfilling the responsibilities outlin paper. It is not intended that this paper present the detailed ting system; procedures for monitoring and maintaining the expense accoun will be but rather the purpose is to outline the general process that employed and provide explanatory information where required.  I.  Monitoring the PACS System A.  Quarterly and annual report analysis. This analysis will be conducted utilizing the PACS data that will be submitted by the Reserve banks at the conclusion of each calendar quarter. The evaluations will range from arithmetic accuracy of the data to budget and expense comparisons, all of which will initially be generated by automated internal report programs. A series of questionnaires will be developed to obtain responses from Banks on questionable report items when an immediate response is not required. Several of the analytical efforts are identified in the following:  2.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  B.  1.  Edit Tests for Accuracy - These tests are intended to reasonably assure both reporting and arithmetic accuracy. Comprehensive edit tests are being designed for this purpose. Correction of erroneous data will be accomplished by the Board or the District depending on the magnitude of the change.  2.  Tests for Deviations from Statistical Norms - These tests will assist analysts in reviewing performance, primarily focusing on deviations occurring in objects of expense, statistical measured and activities within an office or District. The point of deviation may be based on the same data item over time or distribution of a data item within an office. Results of this review may indicate further investigation of the above mentioned items with a Reserve District.  3.  Trends/Projections of Key Data Items - This analysis should provide an indication of the movement of a data item or activity over a period of time. The review may consider changes only as they relate to an office or District or a comparison of changes in several Districts. Projections of the direction of the above items over future periods may be an extension of this process.  4.  Inter-bank Comparisons - This analysis will provide comparative cost and performance information on Reserve bank operations. Attention will be given to both productivity and environmental statistics along with total costs, redistributed costs and residuals in certain areas.  5.  Budget to Expense Comparisons - This analysis should provide an indication as to whether spending levels are consistent with approved budgets. Further investigation may be required following consideration for seasonal or other factor adjustments.  6.  Reserve District File - A file on each Reserve District will be maintained during the measurement period (current calendar year or longer) which will contain results of analysis performed, responses by Banks to questionnaires, and other pertinent information. This will assist in preparing an overall evaluation of performance during the measurement period.  District Operations Reviews. The purpose of the review program is primarily to assure compliance with PACS accounting instructions and also to ing assure uniformity and continuity in recording and report expenses and statistics. This program will provide for on-site reviews of District expense accounting operations s supplemented by examinations of other operations review report and the quarterly and annual reports analysis effort. The   https://fraser.stlouisfed.org Federal 0 Reserve Bank of St. Louis  3.  frequency of the on-site reviews has yet to be determined. In certain cases, this may be dictated by the quality of data or number of deviations, etc., found. The process is briefly described below. 1.  Review of Operations Reports - This review would consist of examining reports (when expense accounting is involved) that are filed by various groups at the Board such as the financial examiners and operations review staff. It could also include the monthly reports that are filed by District Audit staffs with the Board, to the extent that expense accounting is involved. The examination of these reports may assist in detecting areas that require investigation and will also be used in preparation for the on-site reviews.  2.  On-site Reviews - This process will consist of an on-site review of the procedures employed by banks under PACS accounting instructions and a detailed analysis of the data being reported. Recommendations for operations improvements will be offered when potential is evident. Several elements of the review are shown below. a.  Review of internal expense procedures and manuals to assure compliance with PACS instructions.  b.  Evaluating knowledge of personnel involved in expense accounting process.  c.  Evaluation of consistency in procedures among District offices.  d.  Review of subsidiary ledger accounts to assure proper maintenance.  e.  Analysis of transactions or entries from point-of-entry into system to final reporting to ensure proper distribution of expenses.  f.  Review of: 1. 2. 3. 4. 5.  II.  Methods of distributing expenses to activities. Methods of redistributing support costs. Methods of allocating overhead costs. Methods of developing standards for standard charges. Procedures for accounting for productivity and environmental volumes.  Maintaining the PACS System. A.  Interpretations of Accounting Manual Instructions. Interpretations are considered to be responses to inquiries on accounting manual instructions which will  4.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  normally not require changes to the manual. These interpretations may be documented and distributed if the response to the inquiry stems from an implied rather than a stated intent, or instruction, or a verbal response may be satisfactory where the instructions have been stated but not clearly understood by the inquirer. However, each inquiry will be carefully reviewed for impact on PACS instructions and bank operations before an interpretation is offered. In, those cases where an interpretation is not straightforward, interaction of the Board's maintenance group with the Subcommittee on Accounting Systems, Budgets, and Expenditures will be necessary. The process to be followed in handling inquiries is briefly stated below. 1.  A procedure for submitting inquiries will be distributed to all banks by the Board's staff. When necessary, verbal inquiries will be accepted by the Board's staff and, as previously noted, verbal responses may be given under certain circumstances.  2.  A designated individual on the Board's staff will receive the inquiry and will initiate distribution to the Board's maintenance group as well as schedule the review period and date for interpretation to be provided.  3.  The Board's maintenance group will evaluate the inquiry and determine whether or not consultation with the Subcommittee on Accounting Systems, Budgets, and Expenditures is necessary.  4.  a.  If consultation is necessary, a formal statement of inquiry will be prepared along with the Board's maintenance group's opinion and will be filed with the Subcommittee on Accounting Systems, Budgets, and Expenditures. The decision of these groups will be published as the interpretation.  b.  If consultation is not necessary, the decision will be reached by the Board's maintenance group and a formal or verbal interpretation will be provided to the bank or banks.  The Board's maintenance group will maintain a central file for all inquiries which will include the initial inquiry, workpapers related to developing the interpretation, and a documented copy of the interpretation whether distribution or a verbal response is provided. An additional file that contains only interpretations will also be maintained.  5.  B.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Changes to PACS Accounting Instructions. Changes to the PACS instructions may stem from an tions accumulation of editorial changes derived from interpreta offered, may be substantive in that a different approach may is utilized for reporting or measuring information, or be a conceptual change. The initiative for such changes may originate from several sources. Again, the Board's maintenance group will work in consultation with the es Subcommittee on Accounting Systems, Budgets, and Expenditur on on changes to the system's design prior-to.the distributi be of any such revisions. The process to be followed would t very similar to the one for handling interpretations excep the for the potentially more extensive research involved, amount of contact with the involved groups, and the distribution of change evolving from the effort.  C.  Updating of the Accounting Manual. Updating of the accounting manual may result from changes t to instructions or interpretations offered. Significan ion changes will be made as soon as possible after a decis has become final, while minor changes will be made less frequently but not later than the end of the calendar year oped in which the change occurred. A procedure will be devel der for distributing accounting manual pages which will consi distribution, control, files, etc.  III. System Coordination system As previously stated, the success of the expense accounting m. requires the involvement of many groups throughout the Syste s, personnel However, in the routine accomplishment of responsibilitie selected such as those in the monitoring and maintenance group and individuals at the Reserve hanks are best suited to monitor that and maintain the system. Therefore, it would be recommended lity each District designate a person or persons with responsibi ghout for: 1) assuring consistent application of procedures throu pretations, the District; 2) handling District distribution of all inter are made; and changes, etc.; 3) initiating all formal inquiries that ws 4) assisting (perhaps only administratively) in the on-site revie that are made in each District. held It would further be recommended that an annual conference be to discuss problems with the expense accounting system, propose by various changes to the system, or to discuss approaches utilized se system Districts to accomplish compliance with established expen policies and procedures.  IV.  Designation of System Projects t Each year specific System Projects must be designated for budge purposes and to guide Reserve bank expense distribution. The   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6.  Budgets will Division of Federal Reserve Bank Examinations and expenses from the request a list of such projects with estimated Subcommittee Conferences. After approval for the budget, the es will designate on Accounting Systems, Budgets, and Expenditur All Reserve banks a project number and PACS activity relationship. information on these will be required to maintain separate project is necessary for designated projects although only a summary total quarterly expense reporting.  V  •  •  Date  11/9/76  REFERRED FOR ATTENTION TO MR. Puckett This copy for information of  Copies have been sent to  Mr. Volcker Mr. Timlen Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. Coopersmith Miss Cutler Mr. Oppenheimer Mr. Flanagan Correspondence Files  10/76  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  it/ d/ 17/  Pi  BOARD OF GOVERNORS OF THE  •• OF GOvCR' • •0 0.  FEDERAL RESERVE SYSTEM E507  WASHINGTON, D. C. 2b551  ! .:*f , ,r,i, .. .5; 2 -,1 1:-• .* .,1'•114 • ,:---.4/. ••.-RAI_ IkEs - • * ••..•••  DIVISION OF FEDERAL RESERVE BANK EXAMINAlIONS AND BUDGETS  November 5, 1976  Mr. Thomas M. Timlen First Vice President Federal Reserve Bank of New York New York, New York 10045 Dear Tom: Enclosed are instructions which pertain to accounting for System Projects under PACS. Specifically, these instructions deal with the seven projects that have been approved by the Conferences and designated as System Projects for 1977. It is possible that other efforts will be so designated at a later date. Each District was previously advised through the Steering Committee of the respective Conferences as to the method to be used in budgeting for these projects on a functional basis for 1977. Project accounting is viewed as one of the beneficial features of PACS. It allows for the tracking of costs throughout the project cycle, demonstrates the impact op System operations, provides input to the evaluation of project success, and assists management in planning for project resource requirements and future project efforts. For these reasons and in order to accomplish uniform accounting and reporting, it is extremely important that the instructions contained in this package and in the PACS Accounting Manual be closely followed.  Va.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Each District PACS project leader is familiar with general project accounting and PACS procedures; however, if any further information or clarification is necessary, please contact us. Sincerely, To be listed on Schedule A  for directors' meeting of 76' etaryci 44or// ec yde H. arnsworth, Jr.  Ic/K  RECEIVED  Assistant Director Enclosure  NOV 08 1976 ANSWERED ATTENDED TO  THOMAS M. TIMLEN  SYSTEM•PROJECTS  The projects that are identified on the following pages have been designated as System Projects. They represent both efforts that are beginning in 1977 and those currently in progress. While other projects may be designated during 1977, each District should limit accounting for System Projects to these projects at the present time. The project code shown for each project has been taken from the numbers assigned to System projects and should be used by each District for recording and reporting purposes. Instructions in Section 7--Project Accounting should be strictly adhered to in coding of individual projects and accounting for the expenses associated with each project. Further, instructions in the Service Structure, Expense Accounting, Cost Accounting, and Reporting Sections of the manual should be reviewed and followed where required. A brief description of the accounting procedures for each project is included with the project description. It is important that each District coordinate these prS jects among all involved personnel. In most cases, each District will have a regular member or a liaison member of the committees and subcommittees sponsoring the projects. These members can be helpful both in provng additional information about the projects and in assisting Accounting personnel in developing the individual project reporting mechanism. Requests for any additional information about System Projects should be directed to the Financial Planning and Control Section, Division of Federal Reserve Bank Examinations and Budgets at the Board of Governors.  alb   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  1.  SYSTEM FILM PROJECT  SYSTEM PROJECT CODE-901  This project is sponsored by the Committee on Research, Public Information and Bank Relations of the. Conference of Presidents. The project will include writing a script, choosing a film contractor, producing the film, and establishing procedures for marketing the finished product. While other expenditures will be required, a primary outlay will be for outside film production costs which have been budgeted at $115,320 for 1977. Each Reserve District has made provision for its pro rata share, $9,610, in the 1977 budget. When inter-District distributions of expenses are made, the pro rata distribution should be recorded in the Fees--System Projects account 55625 and reported under the Systems Project activity. As other expenses are incurred, entries should be recorded in the appropriate expense accounts and also reported under the System Projects activity. At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to the Bank and Public Relations Service.  •••   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1-1-77  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2.  AUTOMATED CLEARING HOUSE PROGRAM  SYSTEM PROJECT CODE-902  The ACH program efforts are sponsored by the Subcommittee on Electronic Payments through the Committee on Communications and Payments of the Conference of First Vice Presidents. Project efforts include: providing project management support through implementation of government and private ACH programs in 1977, expanding interregional ACH programs and beginning experimentation in intraregional distribution of ACH data, developing techniques for evaluating ACH efficiencies and improving productivity, and formulating a System position on access to Federal Reserve clearing and settlement facilities. The cost of projects for 1977 is estimated to be $305,000. Individual projects, projected costs and Districts incurring costs are shown below.  Project  Total Cost  District Incurring Cost  Implementation of Government Payments Programs  $ 25,000  Atlanta  Implementation and Enhancements of the ACH Software  $200,000  Cleveland--$150,000 Minneapolis--$50,000  Interregional ACH Exchange Pilot  $ 30,000  Atlanta--$15,000 Boston--$3,000 Cleveland--$3,000 Dallas--$3,000 New York--$3,000 San Francisco--$3,000  Monitor Bulk Data Tests  Nominal  ACH Cost/Benefit Analysis  Nominal  Clarify January 15, 1976 Statement on Access  Nominal  Formulate Interregional Delivery Policy  Nominal  Coordinate with Outside Organizations Re ACH Matters  Nominal  1-1-77  2,  AUTOmATED CLEARING HOUSE PROGRAM (Continued)  Project  Total Cost  Begin Experimentation in the Area of Intraregional Electronic Distribution of ACH Payment Data by 7/1/77  50,000  Development of a Strategic Planning Document  SYSTEM PROJECT CODE-902  District ' Incurring Cost Evenly Distributed  Nominal  All costs associated with the above projects should be recorded in the appropriate expense accounts and reported under the System Projects activity. At the end of each reporting period, the cost of these projects should be allocated from the System Projects Activity to the Electronic Funds Transfers Service.  NOTE: o  There is no indication of outside consultant costs in excess of $100,000; therefore, no inter-District distribution of expenses should be made. Regular ACH operations processing should be reported in the Automated Clearing House Operations Activity as opposed to the System Projects Activity.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  3.  CURRENCY EQUIPMENT DEVELOPMENT PROGRAM  SYSTEM PROJECT CODE-903  This project is sponsored by the Subcommittee on Currency and Coin through the Committee on Fiscal .Agency and Cash Services of the Conference of First Vice Presidents. The project involves the development and construction of prototype currency processing equipment, and the testing of equipment and operating procedures in preparation for implementation of the high speed currency processing operation. A provision of $720,510 has been included in the 1977 budget for payments to outside firms for development and construction of equipment, project management and technical support, and an amount for contingencies. Each District has made provision for its pro rata share (capital and surplus) in the 1977 budget. When inter-District distributions are made, the pro rata distribution should be recorded in the Fees--System Projects account 55625 and reported under the System Projects activity. When other expenses are incurred, entries should be recorded in the appropriate expense accounts and also reported under the System Projects Activity. At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to the Currency Verification and Destruction and Currency Services. The amount of the allocation to each Service will be advised when the inter-District distributions are made.  1-1-77   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4.  DEVELOPMENT OF DATA PROCESSING STANDARDS  SYSTEM PROJECT CODE-904  The standards project is sponsored by the Subcommittee on Computers and Related Resources through the Committee on Management Systems and Support Services Of the Conference of First Vice Presidents. The purpose of the project is to define, develop and document standards for the acquisition, use, and management of computers and related resources within the Federal Reserve System. The cost of the project for 1977 is estimated to be $63,000. Three Districts, New York, Kansas City and Dallas will conduct the project and these Districts will absorb the project costs. All costs associated with the project should be recorded in the appropriate expense accounts and reported under the System Project activity. At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to all output services on a personnel ratio basis. This is in accord with PACS Accounting Manual treatment of System Projects that do not specifically relate to output services. In effect, this type of project is treated as a residual balance and allocated to all output services on a personnel ratio basis. A percentage ratio for each output service is determined by dividing the total average number of "direct" employees for each service by the total for all services. The percentage ratio is applied against total costs incurred during the period.  1-1-77   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  5.  MVS/MP OPERATING SYSTEM PILOT OPERATIONS  SYSTEM PROJECT CODE-905  This project is sponsored by the Subcommittee on Computers and Related Resources through the Committee on Management Systems and Support Services of the Confeience of First Vice Presidents. This project, with initial pilot operations beginning at Dallas, will provide for a test operation of two computer systems in a load-sharing environment using IBM's multiple processor, virtual operating system known as MVS/MP. A successful pilot operation would demonstrate the improved utilization and increased throughput of this configuration, and increase the potential for installation at other Reserve Banks. The cost of the project for 1977 is estimated to be $140,300. While the majority of the costs will be absorbed by Dallas, other participants in the project include: Philadelphia, Cleveland, Richmond, Kansas City, St. Louis, and San Francisco. All costs associated with the project should be recorded in the appropriate expense accounts and reported under the System Projects activity. At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to all output services on a personnel ratio basis. This is in accord with PACS Accounting Manual treatment of System Projects that do not specifically relate to output services. In effect, this type of project is treated as a residual balance and allocated to all output services on a personnel ratio basis. A percentage ratio for each output service is determined by dividing the total average number of "direct" employees for each service by the total for all services. The percentage ratio is applied against total costs incurred during the period.  1-1-77  6.  LONG RANGE AUTOMATION PLAN  SYSTEM PROJECT CODE-906  This project is sponsored by the Subcommittee on Computers and Related Resources through the Committee on Management Systems and Support Services of the Conference of First Vice Presidents. The overall objective is to develop a plan of action for performing System-wide automation planning over an extended time period. In this effort, hardware, software and support alternatives will be evaluated and an approach to the utilization of these alternatives will be developed. Accomplishment of these tasks will permit System management to examine the issues associated with each alternative and, if appropriate, either select an alternative for implementation or provide System-level guidance for the development of commonality and standards for use by automation planners. The Lost of the project for 1977 is estimated to be $1,237,000. Included in the estimate is a provision of $125,000 for payments to outside firms for assistance in assessing technological alternatives and future needs and environment. Each District has made provision for its pro rata share in the 1977 budget. When inter-District distributions are made, the pro rate distribution should be recorded in the Fees--System Projects account 55625 and reported under the System Projects activity. When other expenses are incurred, entries should be recorded in the appropriate expense accounts and also reported under the System Projects Activity.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to all output services on a personnel ratio basis. This is in accord with PACS Accounting Manual treatment of System Projects that do not specifically relate to output services. In effect, this type of project is treated as a residual balance and allocated to all output services on a personnel ratio basis. A percentage ratio for each output service is determined by dividing the total average number of "direct" employees for each service by the total for all services. The percentage ratio is applied against total costs incurred during the period.  1-1-77   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  7.  FEDERAL RESERVE EVALUATION PROGRAM  SYSTEM PROJECT CODE-907  This project is sponsored by the Committee on Management Systems and Support Services of the Conference of First Vice Presidents. The project for finalizing the measurements program, which will be used for evaluation of Reserve Banks includes: the establishment of the final set of measures; the refining of the productivity index developed by the Philadelphia Reserve Bank; and, the development of quality standards for the System. All costs associated with the project should be recorded in the appropriate expense accounts and reported under the System Projects activity. At the end of each reporting period, the cost of this project should be allocated from the System Projects activity to all output services on a personnel ratio basis. This is in accord with PACS Accounting Manual treatment of System Projects that do not specifically relate to output services. In effect, this type of project is treated as a residual balance and allocated to all output services on a personnel ratio basis. A percentage ratio for each output service is determined by dividing the total average number of "direct" employees for each service by the total for all services. The percentage ratio is applied against total costs incurred during the period.  1-1-77  Mr. Volcker  (3)  MJ1  October 13, 1976  4111  Officers Bulletin #03182  To  Officers  From  Frank W. Lundblad, Jr., Manager, Protection Department  Subject:  PACS--instructions for requesting Bank automobiles  Effective October 18, and in conformance with the new Planning and Control System (PACS), which was described in Bulletin #12708, dated September 22, 1976, the Protection Division will require the recording of PACS Codes on requisitions for the use of Bank automobiles.  A copy of a revised request form "Requisi-  tion for Transportation in Bank-Owned Automobiles on Bank Business," which now provides for the recording of both the new PACS Activity Code as well as the usual Board Function Code, is attached for your convenience.  The appropriate PACS  Activity Code can be obtained from the service structure listing that was sent to officers and chiefs with Bulletin #12708. As is the current practice in acquiring Bank automobiles, the request form must be submitted to the Protection Division prior to the date of the required service.  Additional forms are available from the Protection Division by contacting  Lieutenant Salvatore on Extension 5523.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  RECEIVED OCT 131976 ANMERED Al LIIDED TO,.  -.411.  •  Requisition for Transportation in Bank-owned Automobile On Bank Business BOTH CODES NECESSARY PACS ACTI VI TV CODE  BOARD FUNC ION CODE  (Please submit at least 24 hours in advance of scheduled use)  To  Protection Division (Date) 1.  Please arrange Bank transportation for.  (Name]  To  From (Place)  (Place) .m.  At  On (Date  (Time) (If airport terminal)  Arriving Departing  At  Flight No. Time)  (Name of carrier)  2.  Also please arrange return Bank transportation*__  From  To (Place)  Place  On  At (Date)  .m. (Time)  (If arriving at airport terminal) At (Name of carrier)  Flight No. (Time)  (Signature)  * Fill in paragraph 2 only for the return transportation of that requested in paragraph 1. (Space below for use of Protection Division) Receipt confirmed   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Availability confirmed  _  By  Mr. Volcker  (3)  MJ1  October 12, 1976 To  Officers, Chiefs, Assistant Chiefs, and Supervisors  From  Ruth Ann Tyler, Manager, Service Department  Bulletin #12725  Subject:  PACS--instructions for use of Duplicating Division services  Bulletin #12708, dated September 22, 1976 describing the new Planning and Control System (PACS), indicated that various support areas of the Bank would be issuing instructions and related codes for making requests for their services. Effective October 18, the Duplicating Division will require the use of PACS codes on requisitions for their services. Attached is a copy of the new request form (SER 2-9/76) "Requisition for Duplicating Services", that has been adapted for use with the PACS System. It provides for the recording of an appropriate PACS Activity Code (and for the recording of certain other information required by the Methods and Systems Division of the Planning Department in connection with the reproduction of forms by the Duplicating Division). The new request form, which can be obtained from stock, must be used in making requests for duplicating, typing, or addressograph services; existing supplies of the present duplicating services form (DUP. 1.2-9/75 and 1.3-8/76) are obsolete and should be destroyed. Also attached for your convenience is a listing of the appropriate PACS Activity Codes to be used in completing the form. This service structure listing was already distributed to officers and chiefs with Bulletin #12708. The PACS Activity code appears in the extreme right-hand column of the listing. As indicated in that bulletin, the PACS System will run parallel with the current Functional Expense Reporting System (FR 97) through December 1976. Thus it will continue to be necessary to include the Board Function (SAF) codes on all requisitions. Please be advised that expenses incurred under the new PACS accounting system can only be redistributed accurately if requisitions for support services are completed properly. Requisitions containing improper or missing PACS codes or other incorrect information will be returned by the Duplicating Division; this may result in undue delays in your receiving services.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  RECEIVED ocr 1M976 M.  ANSVERED AD ENDED  V.  • •  SERVICE STRUCTURE Output Service Lines Service Lines  Services Code  Monetary and Economic Policy  Services to the U.S. Treasury and Government Agencies   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1000  Activities Code  Economic Policy Determination  Code  1300  Current Economic Analysis Long Range Economic Research Data Reportinq  1302 1304 1306  Open Market Trading  1600  Open Market Trading  1604  Savings Bonds  2100  Original Issue Accounting for Stock Reissues and Replacements Direct Redemptions Processing Retired Bonds  2101 2103 2104 2106 2108  Other Treasury Issues  2200  Original Issue Servicing Redeeming  2202 2205 2208  Government Agency Issues  2300  Issuing Servicing Redeeming  2302 2305 2308  Other Treasury and Government Agency Services Collecting and Processing Statistical Data  2404 2408  Coupon Processing  2504  2000  Other Treasury and Government Agency Services  2400  Treasury and Government Agency Coupons  2500  Food Coupons  2600  Processing Destruction  2604 2608  Government Accounts  2700  T.T. & L. Accounting Treasurer's General and Government Agency Account Processing  2704 2708  2800  Federal Tax Processing  2804  Currency Verification and Destruction  2900  Verification Destruction  2904 2908  Currency  3090  Paying and Receiving Verifying Deposits Cancellation Federal Reserve Note Issue  3092 3094 3096 3098  Coin  3180  Paying and Receiving Verifying Deposits Wrapping  3182 3185 3188  Federal Taxes   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Code  Code  Code  Services to Financial Institutions and the Public  Activities  Services  Service Lines  3000  Electronic Funds Transfers  Commercial Checks  3270  3360  Transfer of Reserve Account Balances Automated Clearing House Operations  3274 3278  Processing Adjustments Return Items Interdistrict Transportation System  3362 3364 3366 3368  Other Checks  3450  Government Check Processing Postal Mosey Order Processing  3454 3458  Securities  3540  Purchase and Sale Safekeeping Clearing  3542 3545 3548  Loans to Members and Others  3632  Member Bank Accounting Monitoring Reserve Accounts  3724 3728  Loans to Members and Others  3630  Reserve Accounts  3720  •  • 4  Non-Cash Collection  3810  Non-Cash Collection  3814  Bank and Public Relations  3900  Bank Visits and Programs for Bankers Publications Public Programs Functional Cost Analysis  3902 3904 3906 3908  Services to Other Central Banks Services Rendered Others  3984 3988  Member Bank Examinations International Banking Organization Examinations Banking Holding Company Examinations and Inspections Processing and Analyzing Examination Reports  4302  Other   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4000  Code  Code  Code  Supervision and Regulations  Activities  Services  Service Lines  Examination and Monitoring of District Financial Institutions  Administration of Laws and Regulations Related to Banking  Banking and Financial Market Structure Studies  3980  4300  4600  4900  Processing Member Bank and International Banking Oroanization Anplications Processing Holding Company Applications Collecting and Processing Condition and Other Statistical Reports Administration lnd Monitoring of Regulations  4305 4306 4308  4601 4602 4604 4606  Market Structure and Supervisory and Regulatory Policy 4904 Studies  SERVICE STRUCTURE Internal Service Lines Service Lines  Services Code  Support Services  Overhead Services   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6000  8000  Activities Code  Code  Data Processing  6100  Computer Operations Data Systems Support  6104 6108  Motor Vehicles  6300  Motor Vehicles  6304  Occupancy  6400  Printing and Supplies  6500  Building Operation Housekeeping Stock of Supplies Printing and Duplicating Graphics  6404 6408 6502 6504 6508  Planning  6700  Planning  6704  District Projects  6900  District Projects  6904  Administration  8100  Bank Administration System Administration  8104 8108  System Projects  8150  System Projects  8154  Mail  8200  Mail  8204  Legal  8250  Legal  825,4  Budget and Expense Control  8300  Expense Accounting Budget Preparatinn and Control  8304 8308  General Books  8350  General Ledger and Capital Stock  8354  Files and Records Storage  8400  Files and Records Storage  8404  •  4  •  Service Lines   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Services Code  Activities Code  Personnel  8450  If Code  Recruitment and Placement Compensation Training and Education Administration and Employee Relations  8458  8452 8454 8456  Medical  8500  Medical Services  8504  Food Service  8550  Food and Canteen Services  8554  Purchasing  8600  Purchasing Stockroom and Warehouse System Purchasing Service  8602 8604 8608  Protection  8650  Protection  8654  Office Equipment Maintenance  8700  Office Equipment Maintenance  8704  Emergency Preparedness  8750  Emergency Preparedness  8754  Library  8800  Library  8804  Telephone and Telegraph Operations  8850  Telephone Telegraph  8854 8858  Audit  8900  Data Systems Auditing Financial Auditing Operational/Procedural Auditing Examination Support  8909 8904 8906 8908  REQUISITION FOR DUPLICATING SERVICES  SER 2 (9,/761  TO: DUPLICATING DIVISION  PLEASE PRINT  SUBMITTING DEPARTMENT  F01,M NUMTIER  SAMPLES/DRAFTS MUST BE ATTACHED  DI VI SION/SECTION  DESCRIPTION ( i F FORM, INDICATE TITLE)  LOCATION INDICATE 6MNTF1 CU AN 1 I lY RECUI RED I I FORA. INDI CA I E PERMANENT  r---1  ORI GI NAL  A.  COP I ES  XEROX  9. Li QUICK  TOTAL COPIES  D•  Li DUPLICATING 1.[ j PAPER COLOR —  2  rAcs  ACTIVITY' CODE  ADDRESSOGRAPH LIST CODES IN SPECIAL INSTRUCTIONS  2. 1 j 1  HOARD FUNCT ION CODE  E. [  COPY  C. COMPOSITION 1  BOTH CODES NECESSARY  TEMPORARY  ] PAPER SIZE  TYPING VARITYPING  3.  17  ONE SIDE  4. 0 COLLATE  TWO SIDES  Ej STAPLE  SPECIAL INSTRUCTIONS  FORMS MANAGEMENT APPROVAL  PROOF REQUIRED IAUTDORIZED SI GNATURE YES Li NO  DATE  mirmar  N AM E I  Exi.  WHEN COMPLETED PLEASE NOTIFY   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  DIVISION  LOCATION  r  X IENSION  4  ir. Volcker  (3)  MJ1  • September 27, 1976 To  Officers and Chiefs  From  Paul B. Henderson, Jr., Vice President  Bulletin #12711 Subject:  PACS--procedures for data services users  Bulletin #12708, dated September 22, 1976, describing the new Planning and Control System (PACS), indicated that the Data Services Function would distribute detailed procedures for users of its services. These procedures are attached. For further information, clarification, or additional copies of the attachments, please contact either Paul H. Gregory (Ext. (Ext. 5580).   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6608) or William Friedman  DATA SERVICES - PACS PROCEDURE #1 Ettective actober 18, 19/6 This procedure is effective October 18, 1976 - however, in order to assist in an orderly transition from the present chargecodes (if any) to the required chargecodes - the new chargecodes may be used starting on October 4, 1976.  In order to comply with the requirements of Ms. Minehan's September 21, 1976 memorandum, "PACS-Support Services" all data services users are required to identify their work requests with a chargecode: 1.  For telecommunications messages the chargecode is generated from the current message "type code". No further action is required.  2.  For all other work the request must include the chargecode. This change does require action by all users on all jobs.  The chargecode consists of three fields: The Budget Unit (B) field consists of a five digit number (a zero followed by the four digit budget unit) which identifies the User budget that requested/authorized work to be performed. When work is submitted by an agent (e.g., a programmer) acting for a beneficiary in another organization (e.g., a user department) the budget unit of the beneficiary organization is to be cited. The User Project (U) field is used to distinguish among several jobs in the same budget unit. When work is submitted by the user a four digit number is used, "0000" if no distinction among jobs is desired and any four numeric characters at the option of the user to permit distinct identification. When work is submitted by Data Services for the benefit of a user a one alpha character, 3 digit number is used. This code is assigned to permit analysis of all such work and issued in the Data Services Standards Manual. The PACS Activity (P) field consists of a four digit number that identifies the PACS activity for which the work is being performed, followed by a one digit modifier (M). When work is submitted by the user the modifier is the digit "zero". When work is submitted by Data Services for the benefit of a user the modifier is the digit "one". Chargecodes have the following formats: IBM/S370 chargecode: Burroughs B7700 and all other facilities chargecode: always zero A user's budget number 4111 user's project A PACS activity 4 PACS activity modifier (0 or 1)  Attachment  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  - 1 of 2 A  OBBBB-UUUU-PPPPM rBBB/144/PPPP1  Tt  Validation will be performed on the Budget Unit (B) and on the PACS Activity (P) fields in order to assure entry of valid numbers. Jobs (tasks and steps) will be abnormally terminated if invalid chargecodes are supplied. The current listing of valid Budget Unit and PACS Activity codes are attached. IBM WORK (The fields of the chargecode are separated by a dash for IBM work.)  BATCH  I. On the IBM/S370, users must supply valid chargecodes as the first HASP accounting subfield on the job card. For example: jobname JOB (OBBBB-UUUU-PPPPM, etc.), User Departments are requested to contact Mr. D. Bosak of the Service Centers Division with the charge codes necessary to update the job cards. This task must be completed no later than October 15, 1976.  IV PHASE  ON LINE  User Departments using IV/Phase entry systems must have their stored job cards updated as described above. Subsequent updates to the IV/Phase job cards will require twenty-four hour notice to the User Services Division utilizing a form that will be provided for this service. Chargecodes on TS0 will be entered at LOGON time using the "ACCT" II. fi parameters. For example: LOGON userid/password ACCT(OBBBB-UUUU-PPPPM) The chargecode (TS0 accounting number) will be associated with a userid" and a "password" for each user. Multiple passwords and multiple chargecodes per password will be allowed. The chargecodes for TSO users, must be submitted to Technical Services Division, Computer Operations Department (Mr. Leon Smith, 99 John, 3 Floor) before a user can LOGON. A request form for this purpose will be available. Initial chargecode assignments for all users must be submitted by October 4, 1976. Subsequent requests for additions or changes to chargecodes require twenty four hour notice. BURROUGHS AND OTHER WORK (The fields of the chargecode are separated by a slash for all non-IBM work.)  BATCH  sq III. On the B7700, users must supply a valid chargecode in WFL jobs using the CHARGE statement. For example: CHARGE = O /BBBBUUUU /PPPPM;  ON LINE  IV. CANDE and RAMSES users will be requested to supply a valid chargecode during the LOGIN sequence. For example: PLEASE ENTER CHARGECODE OBBBB/UUUU/PPPPM (CR)  Attachment A   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  Acceptable Budget Unit Number Budget Unit Number  0101 0201 0202 0301 0302 0401 0402 0403 0404 0501 0601 0602 0701 0703 0704 0705 0706 0801 0802 0901 0902 0903 0904 1001 1002 1101 1102 1103 1201 1301 1302 1308 1309 1401 1402 1403  1/  Budget Unit Number  Budget Unit Description  Acctg Cont Func Admin Acctg Dept Admin Acctg Division Management Info Div Disbursing Division Auditing Dept Admin Auditing Division Audit Analysis Div Buffalo Auditing Staff Bank Superv+Rel Funct Adm Banking Studies Dpt Admin Banking Studies Division Banking Examinations Dpt Adm Commercial Exam Adm International Exam Div Trust Exam Div Auto and Train Div Domestic Bk Appl Dept Adm Domestic Bk Application Div Bank Regulations Dept Adm Bnk Regulations Division Securities Regulation Div Administrative Service Div Foreign Bk Reg Dept Admin Foreign Bk Regulation Div Bank Relations Dept Admin Bank Relations Division Technical Assistance Div Bldg + Planning Func Admin Bldg Operating Dept Admin Bldg Maintenance Division Building Service Division Power Plant Division Planning Dept Admin Methods+Systems Division Purchasing Division  Revised 9/24/76.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1501 1601 1602 1603 1605 1607 1702 1801 1802 1804 1806 1901 2001 2002 2009 2101 2102 2103 2104 2109 2114 2119 2201 2301 2501 2601 3201 3301 3302 3303  3305 3401  Source, Management Information Dept. 1 of 3  Attachment B  1/ Budget Unit Description  Cash & Collection Cash Department Admin Coin Division Paying & Receiving Division Sorting+Counting Division Cash Adm Div Transp Staff Cash Custody Division Collection Dept Admin Collection Division Coupon Division Wire Transfer Division Check Process Funct Admin Ck Adj&Ret Itm Dept Adm Check Adj Div Admin Return Items Div Admin Check Process Dept Admin Training Unit-Check Proc Operations Analysis Auto Check Proc Div Admin Check-Proc Div Admin Ck Proc Div Eve Admin Ck Process Div Night Admin Jericho RCPC Admin Cranford RCPC Admin Utica Office Admin Payment Systems Dept Equal Opportunity Foreign Dept Admin Cable Division Foreign Operations Div Foreign Funds Division GovtBond+Safefunct Admin  •  •  Budget Unit Number  Budget Unit Number  Budget Unit Description  3501 3502 3503 3504  GovtBond+Safe Dept Admin Government Bond Division Securities Clear Div Safekeeping Division  3602 3701 3801 3901 3902 3903 4001 4002 4101 4102 4103 4201 4202 4203 4204 4206 4207 4208 4216 4217 4296 4297 4298 4299 4301 4401 4501 4502 4503 4504  Savings Bond Division Security Custody Division Legal Function Credit and Discount Admin Credit Division Discount Division Acceptance Dept Admin Acceptance Division Secur Oper-Accounting Secur Oper-Trading Securities Analysis Pers Spec Projects Staff Personnel Dept Admin Employee Activities Sec Training Division Placement + Counsel Div Medical Division Personnel Service Div Career Dev Division Compensation Division Management Training Unit Training Unit & Yoc Special Training Program RSRVD-Spec Personnel Pgms Public Info Dept-Admin Research and Stat Admin Domestic Research Admin Visual Aids Division Business Conditions Div Money and Finance Div  Attachment B   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2 of 3  4505 4601 4602 4603 4604 4701 4702 4703 4801 4901 5101 5102 5103 5104 5201 5202 5203 5205 5206 5208 5301 6001 6002 6003 6005 6201 6202 6205 6206 6301 6302 6303 6304 6305  Budget Unit Description Reasearch Library Division Int.1 Research Adminstrat Balance of Payments Div Foreign Research Div International Reports Div Statistics Dept Administr Financl Statistics Div Market Statistics Division Secretary's Office Service Function Admin Protection Dept Admin Protection Division Vault Division Relocation Office Div Service Dept Administration Correspondence Files Food Supply Division Post Office Duplicating Division Postage and Expressage Federal Reserve Agent Staff Services Admin Liaison Staff Standards Staff Training and Education Common Systems Dept Admin Data Management Division Systems Components Div Systems Planning Div Custom Systems Dept Admin Financial Systems Analytical Systems Member Bank Acctg. Systems Payment Systems  •  •  Budget Unit Number  6306 6601 6701 6702 6704 6801 6802 6803 6804  Budget Unit Description  Budget Unit Number  Statistical Systems Processing Services Admin Computer Oper Dept Admin Computer Facilities Technical Services Div Telecommunications Adm Communications Serv Div Switching Services Div Technical Services Div  3671S  3 of 3 Attachment B  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6901 6902 6903 6904 6905 6906 7001 7002 7101 8001 8501 9999  Budget Unit Description  User Operations Dept Admn Data Preparation Div Service Centers Division User Services Staff Federal Taxes Deposit Sec Operations Support Div Bank Analysis Dept Admn Bank Analysis Div Audit Analysis Div Operations Analysis Off Opn Mkt & Tres Issue Admn Retirement Office  •  ,  •  Acceptable PACS Activity Numbers 1/ Code  Code  Code  1302 1304 1306 1604 2101 2103 2104 2106 2108 2202 2205 2208 2302 2305 2308 >2/ >T/ 25-6-4 2604 2608 2704 2708 2804 2904 2908 3092 3094 3096 3098 3182 3185 3188  3274 3278 3362 3364 3366 3454 >3/ 3542 3545 3548 3632 3724 3728 3814 3902 3904 3906 3908 3984 >4/ 4302 4305 4306 4308 4601 4602 4604 4606 4904 6104 6108 6304  6404 6408 6502 6504 6508 6704 6904 8104 8108 8154 8204 8254 8304 8308 8354 8404 8452 8454 8456 8458 8504 8554 8602 8654 8704 8754 8804 8854 8858 8902 8904 8906 8908  1/ As of September 17, 1976. Source, Management Information Dept, FR, PACS manual 2/ See attached List - Reimbursable Fiscal Agency Codes 7/ See attached - Postal Money Order 4/ See attached List - Services rendered others 5/ See attached List - Collecting and Processing Statistical Data 1 of 3  Attachment C  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  PACS Activity Numbers  •  •  Other Reimbursable Fiscal Agency Codes The following fiscal agencies have been assigned codes in the 2400 category, beginning with 2410. Code 2410 2411 241 2 241 3 2414 2415 2416 2417 2418 2419 2420 2421 2422 2423 2424 2425 2426 2427 2428 2429 2430 2431 2432 2433 2434 2435 2436 2437 2438 2439 2440 2441 2442 2443 2444 2445 2446 2447 2448 2449 2450 2451 2452 2453 2454 2455  Other Reimbursable Fiscal Agency Commodity Credit Corporation V-Loan Program Department of the Army V-Loan Program Department of the Navy V-Loan Program Department of the Air Force V-Loan Program Department of Commerce V-Loan Program Department of Interior V-Loan Program Department of Agriculture V-Loan Program - General Services Administration V-Loan Program - Atomic Energy Commission Small Business Administration Federal Land Banks Federal Land Banks (Original Issue) Federal Land Banks (Overprinting) Federal Land Banks - Sigma V Federal Intermediate Credit Banks Federal Deposit Insurance Corporation (Assets) Federal Deposit Insurance Corporation (Receivership) Federal Home Loan Banks (Purchase) Federal Home Loan Banks (Issue) Federal Home Loan Mortgage Corporation Bonds Emergency Loan Guarantee Board U.S. Postal Service Federal National Mortgage Association FNMA - Capital Debentures FNMA - Mortgage Backed Bonds GNMA - Government Mortgage Liquidation Trust GNMA - Federal Assets Liquidation Trust GNMA - Federal Assets Financing Trust Banks for Cooperatives Tenessee Valley Authority Federal Housing Administration District of Columbia Armory Board FHA Insurance Notes Penn Central Transportation Company SLMA Student Loan Assistant Secretary for International Affairs Export - Import Bank Export - Import Bank -- Discount Notes Export - Import Bank -- Debentures Asian Development Bank International Bank for Reconstruction and Development Intra-American Development Bank Washington Metropolitan Area Transit Authority Washington Metropolitan Area Transit Authority (Original Issue) National Railroad Passenger Corporation (AMTRAK) Farm Credit Banks - Discount Notes  Source, Management Information Dept. 2 of 3 Attachment C  https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  LI a  a  \  • PACS Activity Codes Services Rendored Others  4111 3990 3991 3992 3993. 3994  Board of Governors Federal Reserve Club Store Retirement System Office Food Stamp Start Up Services Rendered Others Non Reimbursable Postal Money Order  3460 3461  Ppstal Money Order Processing, Non Reimbursable Postal Money Order Processing, Reimbursable Collecting and Processing Statistical Data  2475 2476 2477  Treasury Foreign Exchange (TFEX) Treasury Foreign Currency (TFC) Collecting and Processing Statistical Data  Source, Management Information Dept.  Attachment C   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Reimbursable.  September 22, 1976 To  Officers and Chiefs  From  C. E. Minehan, Manager, Management Information Department  Bulletin #12708 Subject:  PACS support services  As you may know, a new accounting system will be implemented throughout the Federal Reserve System, including this Bank, beginning January 1, 1977. This initiative is known as the Planning and Control System (PACS) and it will replace the current Functional Expense Reporting System (FR 97). Parallel operations between the two systems will begin next month and continue through December. A key element of the new system is the facility for support areas to charge users for services rendered them. To enable us to redistribute expenses in the manner prescribed, all users of support services must identify themselves with a four-digit PACS code when requesting that work be done for them by a support area. This code represents the user's activity in the PACS service structure. A copy of the service structure listing is attached for your information. A more detailed description of this material can be found in the PACS Manual, which was distributed to certain officers and other senior personnel with budgeting responsibilities several months ago. The following divisions will require all users to identify their requests for services with the appropriate PACS Activity Code (which appears in the extreme right-hand column of the attached service structure listing):  Support areas Data Services Function (all divisions) Protection Division Duplicating Division Visual Aids Division Methods and Systems Division Omissions or errors in coding could lead to needless delays in the processing of requests for support services. Please advise your staff that PACS codes should be included on all requests for support services beginning Monday, October 18, 1976. This will facilitate our testing of the new system and, thereby, help to ensure the accuracy of our 1977 output. Nevertheless, it will continue to be necessary to include Board Function (SAF) codes on all such requests. Paul B. Henderson, Vice President, Data Services Function, will be distributing detailed procedures for data services users in the near future. The other support areas will also be issuing Bankwide instructions relating to their individual requisition forms. Should you have any questions regarding this matter, please do not hesitate to call me or Richard Sheehan (Ext. 5274) or Paul C. Lipson (Ext. 6658) of the Management Information Department.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  • SERVICE STRUCTURE Output Service Lines Service Lines  Services Code  Monetary and Economic Policy  Services to the U.S. Treasury and Government Agencies   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  1000  Activities Code  Economic Policy Determination  Code  1300  Current Economic Analysis Long Range Economic Research Data Reporting  1302 1304 1306  Open Market Trading  1600  Open Market Trading  1604  Savings Bonds  2100  Original Issue Accounting for Stock Reissues and Replacements Direct Redemptions Processing Retired Bonds  2101 2103 2104 2106 2108  Other Treasury Issues  2200  Original Issue Servicing Redeeming  2202 2205 2208  Government Agency Issues  2300  Issuing Servicing Redeeming  2302 2305 2308  2000  Other Treasury and Government Agency Services  2400  Other Treasury and Government Agency Services Collecting and Processing Statistical Data  2404 2408  Coupon Processing  2504  2600  Processing Destruction  2604 2608  2700  T.T. & L. Accounting Treasurer's General and Government Agency Account Processing  2704  Treasury and Government Agency Coupons  2500  Food Coupons Government Accounts  2708  2800  Federal Tax Processing  2804  Currency Verification and Destruction  2900  Verification Destruction  2904 2908  Currency  3090  Paying and Receiving Verifying Deposits Cancellation Federal Reserve Note Issue  3092 3094 3096 3098  Coin  3180  Paying and Receiving Verifying Deposits Wrapping  3182 3185 3188  Federal Taxes   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  If Code  Code  Code  Services to Financial Institutions and the Public  Activities  Services  Service Lines  3000  Electronic Funds Transfers  Commercial Checks  3270  3360  Transfer of Reserve Account Balances Automated Clearing House Operations  3274 3278  Processing Adjustments Return Items Interdistrict Transportation System  3362 3364 3366 3368  Other Checks  3450  Government Check Processing Postal Money Order Processing  3454 3458  Securities  3540  Purchase and Sale Safekeeping Clearing  3542 3545 3548  Loans to Members and Others  3632  Member Bank Accounting Monitoring Reserve Accounts  3724 3728  Loans to Members and Others  3630  Reserve Accounts  3720  •  •  • Service Lines  Services Code  Code   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  4000  Code  Non-Cash Collection  3810  Non-Cash Collection  3814  Bank and Public Relations  3900  Bank Visits and Programs for Bankers Publications Public Programs Functional Cost Analysis  3902 3904 3906 3908  Services to Other Central Banks Services Rendered Others  3984 3988  Member Bank Examinations International Banking Organization Examinations Banking Holding Company Examinations and Inspections Processing and Analyzing Examination Reports  4302  Other Supervision and Regulations  Activities  Examination and Monitoring of District Financial Institutions  Administration of Laws and Re9ulations Related to Banking  Banking and Financial Market Structure Studies  3980  4300  4600  4900.  Processing member Bank and International Banking Oraanization Applications Processing Holding Company Applications Collecting and Processing Condition and Other Statistical Reports Administration lnd Monitoring of Regulations  4305 4306 4308  4601 4602 4604 4606  Market Structure and Supervisory and Regulatory Policy 4904 Studies  SERVICE STRUCTURE Internal Service Lines Service Lines  Services Code  Support Services  Overhead Services   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  6000  8000  V  Activities Code  Code  Data Processing  6100  Computer Operations Data Systems Support  6104 6108  Motor Vehicles  6300  Motor Vehicles  6304  Occupancy  6400  Printing and Supplies  6500  Building Operation Housekeeping Stock of Supplies Printing and Duplicating Graphics  6404 6408 6502 6504 6508  Planning  6700  Planning  6704  District Projects  6900  District Projects  6904  Administration  8100  Bank Administration System Administration  8104 8108  System Projects  8150  System Projects  8154  Mail  8200  Mail  8204  Legal  8250  Legal  8254  Budget and Expense Control  8300  Expense Accounting Budget Preparation and Control  8304 8308  General Books  8350  General Ledger and Capital Stock  8354  Files and Records Storage  8400  Files and Records Storage  8404  •  • Service Lines   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Services Code  Activities Code  Personnel  8450  If Code  Recruitment and Placement Compensation Training and Education Administration and Employee Relations  8452 8454 8456 8458  Medical  8500  Medical Services  8504  Food Service  8550  Food and Canteen Services  8554  Purchasing  8600  Purchasing Stock-oom and Warehouse System Purchasing Service  8602 8604 8608  Protection  8650  Protection  8654  Office Equipment Maintenance  8700  Office Equipment Maintenance  8704  Emergency Preparedness  8750  Emergency Preparedness  8754  Library  8800  Library  8804  Telephone and Telegraph Operations  8854 Telephone •8858 •Telegraph 8850  Audit  8900  Data Systems Auditing Financial Auditing Operational/Procedural Auditing Examination Support  8902 8904 8906 8908  Date 8/12/76 REFERRED FOR ATTENTION TO MR. Thieke  •  Copies have been sent to all persons listed below. THIS COPY FOR INFORMATION OF /Mr. Volcker Mr. Timlen Mr. A. R. Holmes Mr. Guy Mr. Piderit Mr. Sloane Mr. Bakstansky Mr. Braun Mr. Cooper Mr. Corrigan Mr. Davis Mr. Ege Mr. Feldberg Mr. Fousek Mr. Gray Mr. Henderson Mr. Lloyd Mr. Meek Mr. Oltman Mr. Pardee Mr. Puckett Mr. Schadrack Mr. Smedley Mr. Sternlight Mr. Willey Mr. Keane Mr. Thieke Mr. Coopersmith Miss Cutler Mr. Oppenheimer Mr. Smith Mr. Debs Correspondences Files Mrs. Minehan Ms. Walter  7/76   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  CONFERENCE OF PRESIDENTS of the FEDERAL RESERVE BANKS  August 11, 1976  The Honorable Arthur F. Burns Chairman of the Board of Governors Federal Reserve System Washington, D. C. 20551 Dear Arthur: In the past several years the System has undergone sharp increases in pace and scope of activity. The nature and extent of operations have grown substantially. The regulatory role of the System has been broadened by successive Congressional initiatives. The visibility of Federal Reserve activities has increased in the public eye. Added up, these and other changes have greatly increased the level of challenge faced by System management and management decision processes. As challenges have increased, many improvements have been made in management processes of the System. Planning has been improved through the introduction of objectivesetting and through increased attention to modern budgeting practices. The outline of a process of multi-year planning has been developed and is currently under review by the Conference of Presidents. With the implementation of PACS a greatly refined system of internal management information will be available. A first step has been taken toward establishment of a formalized performance evaluation structure, and the Conference of First Vice Presidents has begun a program of enhancement of this structure. In these and other related activities, the Reserve Bank Activities Committee, under the leadership of Governor Coldwell, has taken a constructive and helpful position.  RECEIVED AUG 1 2 1916 P. A. V. AN AITMDED TOL„.„  MILMMIUN  -2  •  The Hon. Arthur F. Burns Chairman of the Board of Governors  August 11, 1976  These improvements in process and information lay a groundwork for further improvements in management, which we -think can best be enhanced through steps to decentralize more responsibility and accountability to the Reserve Banks. As the System has responded to expanded challenges in recent years, and as we look forward to even greater responsibilities, we believe that business of the System can go forward efficiently only if the Board of Governors and the Banks come to grips with the question of the locus of responsibility and action. We believe that the regional structure of the System offers great advantages of speed, flexibility, and scope for initiative. The Conference of Presidents, therefore, has reviewed the current structure of delegation of authority to determine areas where increased decentralization may be appropriate, and recommends for immediate Board action the attached proposals for decentralization. The proposals represent a number of detailed elements in Reserve Bank administration, bank and bank holding company examination, supervision and regulation, and foreign banking application processing. Although many of the individual proposals may seem relatively minor in scope, in the aggregate they represent an important improvement in the structure of responsibility. The Reserve Banks and the Conference have a number of additional ideas related to improvement in the structure of decision-making, particularly in the bank and bank holding company examination, supervision and regulation area. While we would like to see that the current proposals receive rapid Board approval, we also look forward to working with the Board on additional delegations in these areas. Sincerely,  )).-5 Robert P. Mayo, Chairman Conference of Presidents Attachment cc:   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Federal Reserve Bank Activities Committee Other Board members FR Presidents  S   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  Proposals for Decentralization  I.  Delegation of Authority  Reserve Bank Administration 1. Salaries of Senior Vice Presidents The Board of Governors has delegated to each Reserve Bank the authority to approve individual officers' salaries within approved ranges. However, approval of the salaries of Senior Vice Presidents, First Vice Presidents, and Presidents is exercised directly by the Board of Governors. Authority to approve the salaries of Senior Vice Presidents could be exercised effectively at the Reserve Bank level. 2.  Salary Structures for Non-official staff Current procedures require that changes in non-official salary structures receive Board of Governors approval before implementation. Since surveys are conducted and changes made within carefully circumscribed guidelines, it would appear reasonable for the Board of Governors to delegate that authority to the Reserve Banks with retrospective review by the Board of Governors' staff.  3.  Use of Outside Counsel Current Board directives require that Reserve Banks obtain Board approval before employing outside counsel whose fees are likely to exceed $2,500. Such a decision could reasonably be made locally on the basis of the facts that must be presented under current procedures to the Board; retrospective evaluation by the Board's staff could provide general Board supervision of such expenditures over time. At the least, it appears desirable to raise the dollar limitation to a more realistic level.  4.  Purchase and Sale of Real Estate Currently the Reserve Banks must secure prior approval from the Board for any purchase of real estate. The proposal to the Board contains a wide range of information which could logically be evaluated by the Reserve Banks influenced, if necessary, by criteria established by the Board.  •  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  2  5.  Approval for Capital Expenditures Currently the Reserve Banks have authority to approve capital expenditures for operating equipment; major renovations and building expansions only if they cost less than $100,000. Given current price levels, a more realistic level would be at least $250,000.  6. Classification of Member Banks for Election of Directors The Federal Reserve Act requires that the Board of Governors classify member banks into three groups on the basis of capitalization. To insure parity among Districts the type of banking structure in the District should also be considered. Thus such classifications would be based on a uniform capitalization formula developed for Districts of like banking structures. Once set up, this process could be effectively executed at the Reserve Bank level. 7. Purchase or Rental of Computer Equipment Current rules require that purchase or lease of any computer mainframe equipmett be given specific approval by the Board of Governors, and that significant changos in any peripheral equipment be given specific approval. Since these items are given general review and approval by the Board in the Automation Plans, the further approval requirement might be removed. 8. Approving Separation Pay The authority to grant separation pay to officers other than the President, First Vice President, and General Auditor should be lodged with the Reserve Banks. This will insure a more efficient management process. 9.  Extending Employment Beyond Retirement In some cases it is necessary to extend the employment of employees and officials beyond their retirement. Being closest to the situation the Reserve Banks would know best when such situations occur. Reserve Banks should have the authority to extend employment for a reasonable length of time.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -310. Amendments to Uniform Reserve Bank Operating Circulars Authority should be delegated to the committee on Communications and Payments and through it to the Subcommittee of Counsel on Communications and Payments to determine consistency between the proposed amendments to uniform Reserve Bank Operating Circulars and Regulation J. 11. Releasing Board Information Under the Freedom of Information Act Authority to release certain limited categories of Board information should be delegated to the Reserve Banks if accompanied by specific guidelines. Such a delegation would prevent needless inquiries of the Board by the public. 12.  Service Levels Authority to review service levels should be delegated to the Conference of Presidents with provision for that Conference to delegate such authority, if required, to the Conference of First Vice Presidents. Rather than the Board establishing service levels unilaterally, it would seek the recommendations of the Conference of Presidents. The Board then would approve or disapprove such a recommendation. •  II.  Member Bank Examination, Supervision and Regulation 1. Subordinated Debt Capital Member banks must apply to the Board for approval of subordinated debt issues and the Board now is in the process of establishing new guidelines in evaluating these requests. An opportunity, therefore, exists to delegate to the Reserve Banks the power to approve subordinated debt which clearly falls within the Board's guidelines. 2.  Competitive Factor Reports Presently, the Director of the Division of Supervision and Regulation has the authority to furnish to the Comptroller and the FDIC reports on competitive factors involved in bank mergers if its effect on competition is negligible. Further simplification might be accomplished if this authority were delegated to the Reserve Banks.  S   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -4  3.  Appointment of Bank Examiner The Director of the Division of Supervision and Regulation must approve the appointment of a Federal Reserve examiner. Simplification of this procedure could be accomplished if each Reserve Bank were allowed to appoint its own examiners, notifying the Board of its action.  4. Member Bank Investments in Their Own Premises The Reserve Banks through their continuing awareness of the conditions of financial institutions are in a strong position to make decisions regarding a member bank's investment in its own premises. Reserve Banks should have delegated authority to take action on requests of state member banks to invest in their own bank premises where there will be no adverse effects. The Reserve Banks have the ability to determine whether there will be adverse effects. Currently, Reserve Banks have such authority only when the aggregate investment does not exceed 40% of total capital funds. 5.  Examination Certificates and Appointments of Assistant Examiners It would be an appropriate delegation to allow the Presidents of Reserve Banks to sign examiner certificates. Further, the Reserve Banks should be delegated the authority to approve appointments of assistant examiners. it  6. Certification for Membership of State-Chartered Banks Currently the Director of the Division of Supervision and Regulation is authorized to certify to the FDIC that, with respect to the admission of a statechartered bank to Federal Reserve Membership, the factors specified in section 6 of the Act (12 U.S.C. 1816) were considered. The Reserve Banks could prudently make that certification. 7. Approve Irregular Repayment of Deficiencies of Stock Plans The Director of the Office of Saver and Consumer Affairs is authorized under the provisions of Section 207.4 (a)(2)(ii) of Regulation G to approve repayments of the "deficiency" with respect to stock options or employee stock purchase credit in lower amounts and over longer periods of time than those specified in the regulation. The Reserve Banks have available sufficient information expertise to make that decision and should be empowered to do so.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  III.  Bank Holding Company Supervision and Regulations 1. Violations Final authority in determining the willfulness of violations and the resolution of violations is vested at the Board. Many violations, however, are not willful and such determination could be made at the Reserve Bank level. Additionally, where violations are not willful, the Reserve Banks could be allowed to determine that sufficient actions to eliminate a violation have been taken. Placing this responsibility with the Reserve Bank will permit the Board to concentrate its efforts on cases where violations may be willful. Copies of Reserve Bank actions could be forwarded to the Board for review to ensure a consistent policy within the System. 2.  Divestiture and Deregistration • Where shares of a subsidiary bank or non-bank company have been transferred and a presumption under Section 2 (g)(3) of the Bank Holding Company does not apply, authority to determine that control has been terminated could be delegated to the Reserve Banks. In addition, if appropriate guidelines are provided by the Board, routine determinations under Section 2(g)(3) could be delegated to the Reserve Banks.  3.  Presumption of Control Present procedures for determining control under Section 2(a)2(c) require that a preliminary presumption S. charged by the Board. This procedure could be simplified by delegating to the Reserve Banks the power to charge a presumption. Such a delegation could be accompanied by specific guidelines for defining controlling influence and determining its existence. . Many companies nSted of the presumption would agree to the presumption rather than ask for a determination by the Board. This procedure would reduce the number of presumptions the Board would need to review and allow it to concentrate on cases where a presumption is at issue.  a.   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  -64. Applications of Bank Holding Companies There are instances where economic activities in one District do not affect another District. In such situations there is no need for coordination among Districts by the Board or any other body. A Bank Holding Company's acquisition of a going concern engaged in permissible non-banking activities where the impact of such activities will not be felt outside the District in which the acquisition takes place is such a situation. A Reserve Bank should have the authority to act upon applications of BHC's in such situations. 5.  Interlocking Principals in Bank Holding Companies Reserve Banks are quite familiar with the Bank Holding Companies in their District. This makes it possible for them to determine if there will be an adverse relationship where a principal of an applicant submitting a form FRY1 is also a principal in another Bank Holding Company. This authority should be delegated to the Reserve Banks. sr  IV.  Foreign Banking Applications 1. Member Bank, Bank Holding Company, and Edge Act Corporation Investments in Foreign Banks and Corporations At the present time, substantially all foreign investments require prior approval by the Board or the Secretary of the Board. However, a large proportion of such investments present no new policy issues and are too small to significantly affect the financial position of the applicant. Delegation of authority to the Reserve Banks to approve, but not deny, such applications would streamline the application process, reduce the amount of time spent . by the Board on matters not involving substantive policy issues, and relieve the Board staff of unnecessary and duplicative work.  •   https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis  •  7 2. Applications Under Regulation K: Issuance of Notes to Export-Import Bank, Borrowings in Excess of One Year, Waiver of Reporting Requirements Authority to approve the issuance of debt instruments with maturities exceeding one year is currently vested in the Secretary of the Board. The one-year criterion was adopted at a time when most Edge Act Corporations were new and relatively thinly-capitalized. In view of the subsequent growth and development of these corporations, the danger that issuance of longer maturity instruments could excessively leverage their capital positions has declined substantially. Accordingly, delegation of authority to the individual Reserve Banks to act on such applications would appear to be desirable in order to avoid an unnecessary duplication of effort. 3.  Capital Stock Increases of Edge corporations The Reserve Banks should be delegated the authority to take action on an Edge Act corporation's request to increase the amount of its capital stock when the request will not cause the amount of paid-in stock to exceed the amount of authorized capital stock.  4.  Name Changes of Edge Corporations The Reserve Banks should have delegated authority to take action on an Edge corporation's request to amend its Articles of Association for the purposes of changing its name.
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