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By Fred Lehnhoff and Brian Hollis
Over the years, Financial Management Service, together with our agency partners, has made great strides in replacing manual paper-based processes with more streamlined electronic ones. Yet in the arena of deposit reporting for over-the-counter (OTC) collections, the paper SF 215 Deposit Ticket continues to reign in all of its multipart glory. Under demands for a more efficient workflow and improved accounting information, that is about to change.
A wide variety of Federal agencies receive funds directly from the general public or other remitters. Some examples include the National Park Service (NPS) receiving payment for park admission; the Bureau of Citizenship and Immigration Services (CIS) collecting fees associated with various forms; and the Defense Commissary Agency (DeCA) taking in cash for the sale of various products. These examples and others like them fall under the description of OTC collections. They involve hundreds of agency sites and bank branches and total roughly $60 billion per year recorded in over 500,000 deposits annually.
OTC funds must be deposited by the collecting agency in a timely manner at financial institutions (FI) designated as Treasury General Account (TGA) depositaries. To do so, the agency currently prepares a paper SF 215 Deposit Ticket to accompany the items to the FI, where the SF 215 is confirmed or adjusted as needed and entered into CA$HLINK II. Along the way, various copies of the SF 215, which comes pre-printed with identifying information, are distributed to the appropriate parties for record keeping. During the accounting month, the agency applies the deposits internally in its accounting systems. At the end of the month, the agency reports the deposits to FMS, classifying the amounts to the appropriate Treasury Account Symbol(s) (TAS) on its SF 224 or SF 1219/1220 reports.
While this process has worked well in a manual, paper-driven environment, there is much room for improvement. Creating, distributing, and stocking paper SF 215s is cumbersome, expensive, and anachronistic. Re-keying deposit information by FI personnel into CA$HLINK II is duplicative and a potential source of errors, as is the monthly agency reporting by TAS of the same deposits already recorded on a daily basis in CA$HLINK II. Finally, FMS' Governmentwide Accounting (GWA) Modernization initiative will require agencies to classify financial transactions at the earliest moment in their life cycle. This means that agencies will need to provide sufficient information to identify, derive, or infer the TAS classifications for each OTC deposit at the time the deposit is made, a process for which the summary-level SF 215 is not designed.
FMS has begun to build a Web-based system to meet the workflow and accounting needs of OTC collections. This system, known as the Treasury General Account Deposit Reporting Network (TGAnet), will be accessible via standard browsers at agency and FI desktops. It will provide a single database allowing agencies to enter not only SF 215-like summary deposit information but also a breakout of the summary amount by TAS or by agency-specific accounting codes meaningful for their internal accounting. Such agency accounting codes go by a variety of names, but they all share the characteristics of designating the category or purpose of the collection and mapping to one or more TAS.
Without re-keying from paper documents, FIs will confirm/adjust the deposit information in TGAnet and generate an automated feed to CA$HLINK II. TGAnet will allow for an automated information download for use in agency accounting systems. In cases where agencies have automated collections management systems for logging deposit items and preparing the paper SF 215, TGAnet will allow for an automated information upload from such systems to further streamline the process.
Because it will capture TAS classifications and/or agency accounting codes up front, TGAnet will facilitate the implementation of GWA Modernization for OTC collections, eventually allowing for the removal of OTC deposits from month-end reporting stream to FMS (via the SF 224 or 1219/1220). If agencies choose to enter accounting codes instead of TAS classifications, FMS will use those codes and the business rules the agency specifies to derive the TAS classifications for the deposits and update the appropriate account statements in GWA.
While TGAnet as a system is in its infancy, some of the concepts it will embody have already been tested and proven by a partnership between NPS and FMS. In 2000, NPS and FMS collaborated to build and implement the NPS Electronic Banking System (EBS), which allows for electronic deposit tickets and capture of agency accounting information at the time of deposit preparation. After four years of successful operation and a nationwide rollout, the EBS has had a strongly positive reception among NPS users and management for the workflow and accounting benefits it provides. The time had come to take the concept Governmentwide.
Early in 2004, FMS selected the Federal Reserve Bank of St. Louis to develop TGAnet. To better manage development in a business arena involving over 600 Agency Location Codes and many more physical sites, FMS chose to develop requirements for the initial releases of the system with the assistance of the top agencies in the OTC world as measured by dollars collected and/or number of deposits made annually. Those agencies include the Internal Revenue Service, Department of Defense, Department of Homeland Security, NPS, U.S. Patent and Trademark Office, Bureau of Land Management, U.S. Courts, Bureau of Prisons, State Department, and Department of Veterans Affairs.
In April and again in June, FMS and FRB held TGAnet user requirements sessions. Enthusiastic response from the selected agencies filled the initial session within days of the announcement, so the TGAnet development team scheduled additional sessions.
Agency accounting and technical specialists helped the TGAnet development team hammer out detailed requirements to improve the OTC reporting process. As a result of these meetings, the TGAnet development team formulated initial requirements of the system, including the information flow, user interface, and security requirements. Development is slated to continue throughout CY 2004, with a limited production implementation scheduled in early CY 2005. As later releases are rolled out, the broader Federal community processing OTC collections will be brought into the process and ultimately become users of TGAnet.
For More Information, contact Brian Hollis, development lead, at (202) 874-6786 or e-mail brianDOThollisATfmsDOTtreasDOTgov, or Fred Lehnhoff, program director, at (202) 874-3327 or e-mail fredDOTlehnhoffATfmsDOTtreasDOTgov.
By the ASAP Program Office
The Financial Management Service successfully implemented the Internet version of the Automated Standard Application for Payments, ASAP.gov, for the Federal grant community earlier this year. As one of the two designated grants payment systems for civilian agencies, ASAP.gov meets the needs of Federal Program Agencies (FPAs) and recipient organizations by providing an electronic method to disburse Federal funds.
The implementation of ASAP.gov provides users with a user-friendly, Internet-based environment. ASAP.gov also offers users a robust online help system with step-by-step assistance. The Internet version of ASAP has been well received by the grants community.
Beginning in the fourth quarter of this year, ASAP.gov will require the use of smart cards to digitally sign authorization transactions. This requirement will initially impact those certifying officers (COs) who certify transactions in ASAP only. Certifying officers who certify transactions in both ASAP and the Secure Payment System (SPS), formerly known as Electronic Certification System (ECS), will continue to use their ID and password to sign transactions. ASAP.gov and SPS currently use different public key infrastructure (PKI) solutions for digital signatures; the SPS application plans to convert to the same solution used by ASAP.gov within two years. At that time, all COs will be required to use a smart card to digitally sign certification transactions.
Through the use of PKI cryptography, digital signatures will securely identify and validate COs for the certification of authorizations within ASAP.gov. FMS is in the process of contacting each affected ASAP.gov-only CO. Once contacted, each CO within an FPA will be required to complete and return a PKI enrollment package. Once FMS has processed the package, the CO will receive a Datakey smart card reader and instructions. Additionally, a reference number will be sent via e-mail to the CO. The reference number will be needed later in the process to "burn" the CO's credentials on the smart card.
COs will then need to meet with an FMS trusted registration agent to be in-person proofed. The process is similar to having a document notarized. At the meeting, COs must present a government-issued photo ID. The CO will read and sign the PKI subscriber agreement, provide the previously e-mailed reference number, and receive a smart card with "burnt" credentials. The CO will then be ready to digitally sign certification transactions.
For More Information about digital signatures in ASAP.gov, contact Holly Robedeau, ASAP Development Team, at (202) 874-6467. For more information about ASAP.gov, please visit www.fms.treas.gov/asap.
By Rose Miller and Karen Price
The Governmentwide Accounting and Reporting Modernization Project is one of the Financial Management Service's (FMS') highest priorities. Requirements by the Chief Financial Officers Act, the Joint Financial Management Improvement Program, and Office of Management and Budget Circulars mean new rules for FMS and the agencies. However, most of the accounting and reporting processes used by Federal Program Agencies (FPAs) and FMS have not changed. Therefore, FMS looked at ways to improve these basic processes.
The modernization project's purpose is to streamline the collection and reporting of financial data; improve the methods used to disseminate financial data and reports; and promote the use of more efficient processes to collect, analyze, and improve the reliability and timeliness of its financial information. Under the new system, FMS will provide agencies with timely information on an account statement, which will allow agencies to reconcile their fund balance with the U.S. Department of Treasury on a daily basis.
The GWA redesign will create changes in the way FMS and other agencies report collections, payments, and intragovernmental transactions. The most important change is the requirement to identify accounting information by Treasury Account Symbol (TAS) and Business Event Type Code (BETC) when the transaction is initiated rather than at the month end as happens today. The TAS represents the individual appropriation, receipts, and other fund accounts to which the appropriations or spending authorizations granted by Congress are posted. The BETC indicates the nature of the activity classified to a TAS, such as receipt, gross disbursement, borrowing, repayment, and collection of unavailable receipts. The GWA Modernization Project will impact not only the way the Government does business, but also has implications for most systems that agencies use to collect and disburse Government funds.
The GWA Agency Outreach Team is responsible for informing agencies about the project's status and about changes to FMS' collection and payment processing systems and the agencies' systems. Team members represent all FMS program areas-accounting, reporting, payments, collections, and intragovernmental transactions-affected by the modernization effort. This new approach aims to bring cohesion to the implementation process.
FMS will be implementing a phased-in approach that will bring in as many agencies as soon as possible by Agency Location Code. Treasury-disbursed agencies will be implemented before non-Treasury-disbursed agencies. The outreach team is holding discussions with a few Treasury-disbursed agencies to determine which ones might be good candidates for a pilot utilizing transactions processed through the Intra-governmental Payment and Collection System (IPAC).
FMS will use the lessons learned during the pilot to revise the implementation strategy as necessary. While the IPAC pilot is progressing, FMS will begin to work with agencies to analyze their cashflows being processed in various collection and payment systems such as the General Lockbox Network, Pay.gov, and Plastic Card Network. Each cashflow will be analyzed to best determine how to report the Treasury Account Symbol and Business Event Type Code.
Agency collections are a great challenge because most Federal receipts come from the public and first arrive in the hands of a financial or fiscal agent designated by Treasury. These agents historically have not been involved in classifying Federal receipt activities to TASs. Each collection mechanism will need to be reviewed with the agencies to determine how best to collect the TAS/BETC. Numerous agencies have multiple collection systems, and each of these hundreds of agency location codes and cashflows will be analyzed. The Federal Reserve Bank of St. Louis will be working with the team to analyze cashflows and to assist agencies in meeting the TAS/BETC reporting requirements.
The agency outreach team plans several activities to keep agencies informed about the project's status and specific agency requirements to report the new GWA way. A special FMS Web site will provide agencies with reporting requirements documents, status reports and updates, fact sheets, and answers to frequently asked questions.
The team is providing information about the GWA project at various Government and professional organization conferences. Members already have presented information at financial management conferences sponsored by the Department of Interior, Department of Defense, and local Association of Government Accountants chapters. Members also will be speaking at the 14th Annual FMS Financial Management Conference in August. The team also plans to ask agencies to participate in a GWA-Agency Partnership Council as the modernization effort moves forward.
Current plans call for full implementation of the GWA Accounting and Reporting Modernization Project by 2008. Read future editions of The Financial Connection for updates.
By Connie Kitchings and Fred Williams
The Financial Management Service (FMS) this spring completed the 10th Cash Management Improvement Act (CMIA) exchange between the Federal and State governments.
Under CMIA, FMS negotiates and maintains cash management agreements (called Treasury-States Agreements) with the States, the District of Columbia, Puerto Rico, and four U.S. territories to ensure timely and efficient Federal grant payments. The agreements define specific payment processes ("funding techniques") for major grant programs to minimize the time between the transfer of funds from the U.S. Department of Treasury and the payout of the funds by the States.
States and the Federal government are required to annually exchange interest to compensate each other for the early drawdown or late payment of grant funds. This year's exchange, which concluded on March 31, resulted in Treasury receiving more than $21 million in State interest liabilities (SILs) while paying $3.7 million in Federal interest liabilities (FILs). States received about $1 million for the interest calculation costs associated with administering the program.
Grants represent more than 19 percent of the Federal budget and have more than doubled to more than $400 billion since the first CMIA interest exchange in 1994. About 80 percent of Federal grant funds go to the States.
Since the first interest exchange in 1994, FMS has collected nearly $500 million in interest liabilities from States for the early drawdown of grant funds. During that time, the States have received about $85 million in interest liabilities for inefficiencies in Federal payment systems or for late disbursement of Federal grant funds. The continued reduction in Federal interest liabilities is largely the result of the CMIA team's aggressive efforts to negotiate Federal agency process improvements.
The CMIA staff continues to work with the Federal agencies, States, and territories to simplify and improve processes. FY 2003 marked the sixth year that the annual reports were submitted electronically through the Cash Management Improvement Act System (CMIAS) and the first year the Treasury-State Agreements were negotiated using CMIAS, an Internet-based application designed by FMS and maintained by the Bureau of Public Debt to automate largely paper-based reporting and review functions. CMIAS and other program initiatives continue to reduce the administrative burden for all partners while providing efficient, effective, and equitable cash management for almost 20 percent of the Federal budget.
For More Information, visit www.fms.treas.gov/cmia.
By Larry Phelps
One part of the Financial Management Service (FMS) check claims process is the collection of debt owed to FMS on improperly negotiated U.S. Treasury checks. Check reclamation notices are created to request the financial institution to return the check amount to FMS.
The Federal Reserve Bank of Richmond (FRB) and FMS' Financial Operations, Financial Processing Division (FPD), began converting from a totally paper-based process to electronic check reclamation notices as of October 28, 2002. A full rollout of all FRB districts was implemented in mid-December 2002.
Two FMS systems generate and transmit check reclamation request files to FRB. More than 98 percent of the over 6,000 check reclamations and related claim forms generated in March 2004 were delivered electronically to financial institutions by FRB, Treasury Check Re-engineering Effort (T-CORE) operations area. And, 99 percent of the 894 monthly summary statements listing unpaid check reclamation debt were delivered electronically.
These electronic successes bring FPD closer to the goals of the Government Paperwork Elimination Act and FMS paper-reduction initiatives, and further enhance the division's collection process.
For More Information, contact Larry Phelps at (202) 874-8263.
By Don Clark
To ease the transition toward an all-electronic Treasury, Financial Management Service recently amended the government's Automated Clearing House (ACH) regulations.
Title 31 Part 210, Federal Government Participation in the Automated Clearing House, was revised to pave the way for check conversion and to improve the processing of reclamations and misdirected federal payments. FMS published a notice of proposed rulemaking in August 2003, and received comments through October. The final rule was published in the Federal Register on March 19, 2004, page 13184.
FMS proposed a number of rule changes to encourage expanded conversion of paper financial instruments to ACH. What changes were proposed? Which ones were adopted in the final rule? How will the change affect Federal agencies?
Perhaps the most notable proposal would have allowed for conversion of cashier's checks, money orders and other paper financial instruments to ACH transactions. Under the existing regulation, federal agencies have been converting consumer checks as well as some business checks to ACH transactions for two years. FMS proposed to expand the definition of "business checks" to include these other financial instruments and to eliminate yet more paper from the clearance stream. Financial institutions and industry associations voiced strong opposition to the proposal, concerned that these conversions would interfere with their systems programming and operations.
In the light of comments, and because the Check Clearing for the 21st Century Act (Check 21) becomes effective this October, FMS re-evaluated the proposal and decided not to expand the definition of business checks for settlement through the ACH. Check 21 allows banks (and FMS for federal agencies) to collect and store images of checks and create "substitute checks" that have the same validity as the original checks. FMS will settle these additional paper instruments as well as all business checks according to the rules of either Check 21 or by image exchange settlement. Although Check 21 does not speak to the exchange and settlement of image files of checks, it is expected that the law will encourage banks to steadily adopt image exchange and settlement. All checks, cashier's checks and other payment instruments will be imaged and stored for agency research on a single platform. By adopting this strategy, FMS will reach the objective of presenting agencies with a single clearance process with a single data/image database and still move further toward the goal of all electronic transactions. For the short term, until image exchange becomes ubiquitous, some items may be cleared in the traditional paper manner.
Another part of the change was intended to make it easier for the military, Bureau of Customs and Border Protection, National Park Service, and other Federal agencies to convert checks to ACH entries when agency personnel cash checks or accept payments in the field. In circumstances in which it is impossible or impractical for the agency to image and return checks at the time the check is delivered (such as when military payroll officers cash checks for soldiers in the field), agency personnel now are allowed to accept checks in person, but process the checks as though they were sent to a lockbox.
Under the previous procedures, these checks were mailed back to the United States for clearance-a cumbersome, time-consuming and expensive process. Now, military payroll officers may cash checks in the field and then, when they reach a more hospitable area with electricity and telecommunications connectivity, convert the checks to ACH entries for electronic collection. The paper checks can be destroyed after an electronic image is captured. This same process also can be used by other Federal agencies.
Some agencies wanted to convert checks to ACH, but found the lengthy disclosure statement to be a barrier. Agencies complained they would have needed more pages for their invoices/statements and that the added expense made check conversion untenable. The revised regulation provides a clear-but shortened-disclosure statement.
The proposed regulation would have allowed agencies to originate an ACH debit entry order to collect a service fee related to a re-presented check (RCK) entry returned for insufficient funds, if notice of the fee was given to the receiver before the agency accepted the receiver's check. Banks, credit unions, and professional associations spoke strongly in opposition to this. Those commenters feared a backlash from consumers, who currently must provide explicit authorization for an ACH debit to their account. On the merits of these comments, FMS dropped this proposal from the final rule.
The final rule also clarifies issues related to reclamations and misdirected Federal payments. On rare occasions, due to data submission errors by payment recipients or data entry errors by receiving depository financial institutions (RDFIs) or Federal agencies, Federal payments may be misdirected to the wrong account. Although banks post transactions based solely on the ABA number and account number, recipients of errant transactions sometimes bring these misdirected payments to the attention of the bank.
To avoid further misdirected payments, the amended Part 210 requires the bank to notify the agency when it learns of a misdirected payment. The notification should preferably be electronic, either as a notification of change or by returning the payment.
Previously, agencies were instructed by Part 210 to reclaim payments made up to six years before the last payment. Because the last payment could be years before the reclamation notice, agencies could be reclaiming payments made seven or more years earlier. Many banks and agencies do not retain records that far into the past. The final rule limits reclamations to six years before the notice of reclamation.
To assist Federal agencies with recovering misdirected payments and payments made after the death of payment recipients, the old regulation required financial institutions to provide names and addresses and other relevant information regarding co-owners and others who withdrew or were authorized to withdraw funds from the recipient's account. Those requirements were in clear violation of the act.
The final rule brings Part 210 back into compliance with the act, stating that receiving banks must only furnish that information regarding reclamation of Social Security Administration, Department of Veterans Affairs and Railroad Retirement Board payments. For all other payments, the receiving banks must furnish only information about the payment recipient identified in the ACH transaction.
For More Information on the final rule, see www.fms.treas.gov/ach/index.html or e-mail greenbook@fms.treas.gov.
By Deborah Davenport and Fabrienne Johnson
The Financial Management Service's Debt Management Services (DMS') spring conference in Washington focused on new Office of Management and Budget reporting requirements.
The conference, held in May, provided an in-depth look at the Treasury Report on Receivables (TROR), Part 2, Section D regarding debt disposition. Agencies must now report to OMB on their compliance with debt disposition provisions of the Debt Collection Improvement Act of 1996.
A variety of panels discussed the distinction between currently not collectible debt, suspension and termination of debt and write-offs or close-out of debt, as well as upcoming Managing Federal Receivables changes that address these issues. The panels featured highly esteemed members of the Federal debt collection community, including John Schowalter from the U.S. Department of Justice; Danny Werfel from OMB; Joseph Dewald from the Internal Revenue Service; and Ronda Kent, Trisha Long, and Ellen Neubauer from FMS.
This year's gathering attracted approximately 380 participants representing all of the CFO Act agencies and 18 additional Federal agencies. The goal was to provide Federal agencies with the latest guidance and information on debt collection efforts, including information on the various debt collection tools designed to help financial managers deal with the challenges of managing and reporting their non-tax federal delinquent debt. Over the years, the conference has provided exceptional training and education for government financial managers in search of up-to-date, expert and legal developments in Federal debt management.
Martin Mills, the DMS assistant commissioner; Gina Myers, director of the Agency Liaison and Reporting Division; and Ellen Green, director of Debt Services Division, welcomed the participants and provided an overview on the successes and challenges of the debt collection program. The keynote speaker, Michael Hettinger, staff director of the U.S. House Committee on Government Reform, spoke about the history of debt collection and FMS' initiatives.
During the two-day conference, various speakers provided updates on the Treasury Offset Program, Business Continuity Planning, Uncollectible Debt, Write-Offs, OMB Circular A-129, Debt Management Accounting, Cross Servicing Operations, Fed Debt's development, and Administrative Wage Garnishment. Brian Dillon from the Department of Housing and Urban Development and Laura Adkins from the Food and Nutrition Service also spoke about their experiences with successful debt collection.
By all reports, the annual DMS spring conference was a great success. The amount of questions and the engaged discussions by the conference participants were evidence of their interest in the subject matter. Also, many conference attendees stated that they were pleased with the presentations, finding the subject matter useful for their jobs.
By the Agency Liaison and Reporting Division
A new Office of Management and Budget (OMB) memo (M-04-10) requires the CFO Act agencies and the Department of Homeland Security to review and report annually on their internal policies and standards regarding compromising, writing down, forgiving, or discharging debt. OMB established this requirement to ensure more accurate monitoring and reporting of uncollectible debt.
Financial Management Service's Debt Management Services (DMS) is finalizing instructions to assist Federal agencies in reporting the disposition of their uncollectible delinquent debt on the Treasury Report on Receivables (TROR).
DMS offers TROR training to help agencies with their current and ongoing responsibilities in debt management compliance. In addition to this training, learning forums tailored to meet an agency's specific needs are now available.
For More Information about a learning forum for your agency, please contact your DMS liaison. Your liaison contact's name can be found at: www.fms.treas.gov/debt/dmrpts.html#AgencyContactInformation, or you may call (202) 874-6660.
By Diane Johnson
More than 60 percent of Americans take advantage of the benefits associated with having their salary, retirement, and benefit payments deposited directly into a financial institution account. NACHA-The Electronic Payments Association says the number of direct deposits nationwide last year totaled more than 4 billion transactions.
NACHA released the national figure as part of its promotion for National Direct Deposit and Direct Payment Month in May. The association also said that more than half of all Americans use direct payment for recurring bills such as mortgages, loans, and utilities, and that nearly 3 billion of those transactions were made last year.
The time savings benefits of direct deposit-direct payment-no more standing in line at a financial institution or hours spent writing checks-are key, NACHA said in a news release. Other advantages for direct deposit include security, convenience, and quicker access to funds; benefits for direct payment include personal identity protection and protection of credit ratings since late payments become a thing of the past. And, NACHA estimates that consumers who use direct deposit-direct payment on average save $400 per year.
Direct deposit also saves money for the Federal government. The government saves 62 cents for each check that is converted to a direct deposit payment. Since 1996, the percentage of Federal benefit payments made by direct deposit has increased to about 77 percent from 56 percent, and today more than 98 percent of Federal salary payments are issued by direct deposit. There are still about 240 million checks are mailed each year by Treasury. If less than half-100 million-of those payments were made electronically instead, the savings would be about $62 million.
Needless to say, direct deposit and direct payment opportunities are a priority for Financial Management Service all year round. The agency supported the NACHA Direct Deposit and Direct Payment Month effort by encouraging Electronic Transfer Account (ETASM) providers to utilize direct deposit materials from the FMS Web site (www.fms.treas.gov/eta) to promote direct deposit to their customers.
For More Information, contact Diane Johnson at (202) 874-6836 or Eleanor Kelly at (202) 874-6838.
Top 10 ETA Providers to Date
Providers nationwide: 488
Branch locations: 17,392
To identify ETA provider locations nationwide, call 1-888-382-3311, toll-free, or visit the Web site: www.eta-find.gov.
By Eleanor Kelly
More than 47 million taxpayers chose to receive their refunds by direct deposit, and nearly 60 million taxpayers used the Internal Revenue Service's e-file for their Federal tax returns during the 2004 tax filing season. The number of returns filed from home computers jumped more than 21 percent.
Use of direct deposit for Federal income tax refunds has grown steadily in the past several years. This year alone, the number of taxpayers who chose direct deposit rose 11 percent. Taxpayers who opt to use direct deposit receive their refunds faster-in as few as 10 days.
Direct deposit has been available for Federal payments for almost 30 years and has proven to be safe, reliable, and convenient. Statistics indicate that electronic transmissions also have fewer errors. Taxpayers who receive their refunds by direct deposit have significantly fewer problems than with a paper check. If a problem does occur with a direct deposit payment, it usually can be resolved in 24 hours, compared with an average of 14 days for a replacement check.
The IRS e-file program is also making great strides. In 2003, more than 52 million taxpayers filed their tax returns electronically, using IRS e-file, and learned its many benefits: free or low-cost filing; fast, safe refunds; security; and accuracy (an error rate of less than 1 percent); electronic signatures; proof of acceptance; electronic payment options; and the ability to file both State and Federal returns electronically. The 60 million e-filed returns represent a 15.4 percent increase over the 2003 figure. Financial Management Service is working with the IRS, a sister U.S. Department of Treasury agency, to promote IRS e-file and direct deposit in future tax filing seasons.
In 2004, the IRS continued to expand its Free File program that includes entering into agreements with IRS e-file partners (companies) to foster the use of electronic filing. Free File is online tax return preparation and electronic filing and these IRS partners are members of the Free File Alliance, LLC. For more information about IRS Free File Services, visit www.irs.gov, and click on the IRS e-file logo.
Taxpayers also can learn about the status of their refunds online by visiting www.irs.gov (click on "Where's My Refund?") or by calling (800) 829-1954.
For More Information about electronic payments, visit FMS' Web site at www.fms.treas.gov/eft. For general tax information, call IRS' toll-free tax help line at (800) 829-1040 or visit www.irs.gov.
The Federal Reserve Banks and financial institutions are gearing up for the October 28 implementation of Check 21, the Check Clearing for the 21st Century Act.
The new law authorizes substitute checks-paper reproduction of the originals-and requires that all financial institutions accept substitute checks for presentment. Check 21 is expected to spur electronic image exchange, though the act does not require it.
The Reserve Banks in May released specifications about Check 21 implementation. The Reserve Banks clear almost half the interbank checks written in the United States and maintain the U.S. Department of Treasury's account.
The Reserve Banks also are offering a suite of tools to assist banks with Check 21, and various Fed districts planned Check 21 seminars; for more information, see www.frbservices.org/HomeP-age/Events.html#check21.
Preparing for Check 21 isn't cheap for the FIs. Celent Communications, a Boston research firm, estimates U.S. banks' IT spending on noncard payment systems will rise 37 percent to $1 billion this year, vs. a 24 percent increase from 2002 to 2003. Celent cited Check 21 as the driving force for the large percentage increase.
According to a May survey, 95 percent of consumers were unaware of Check 21. However, the survey of 2,148 people for NCR Corp. also found that 87 percent rated online access to cancelled checks as convenient. Seventy-nine percent said receiving image-based statements was convenient, while 65 percent said receiving cancelled checks in the mail was convenient.
By the Pay.gov Team
The combination of the Government Paperwork Elimination Act (GPEA) and the President's Management Agenda has compelled agencies to review how they conduct business and, in the process, how to be citizen centered, results oriented and market based.
An initiative of enormous potential in helping agencies meet these goals is the e-commerce application Pay.gov.
Pay.gov is the e-commerce initiative developed by the U.S. Department of Treasury that allows citizens, businesses, and Federal agencies to process transactions via the Internet. The system can be used for collections, such as fees, fines, sales, leases, loan payments, and certain taxes such as excise taxes but not income taxes.
Between its launch in October 2000 and mid-April 2004, Pay.gov has processed over 700,000 transactions totaling more than $10 billion.
The application provides collections, forms, reporting, billing and notification, and verification services for client agencies.
Pay.gov processes ACH debit and credit card collections. The ACH debits are processed through the Federal Reserve Bank of Cleveland, which forwards deposits to CA$HLINK II. Deferred and recurring payment options are available. Credit card transactions are processed through Mellon Bank and Bank of America.
Pay.gov offers several ways to initiate a collection:
Agency forms for gathering administrative information or initiating an associated collection can be configured to mirror (to the extent practical) their paper counterparts, including Office of Management and Budget and agency control numbers, Paperwork Reduction Act and Privacy Act notices, agency logos, and instructions.
An extensive range of reports is provided, allowing for transaction reconciliation with reports from other financial applications such as CA$HLINK II or settlement agents. The reporting service delivers transaction details via two mechanisms, online reports and activity files. Online reports display the transaction details as Web pages while activity files provide the transaction details in electronic format that agencies can download and incorporate into their own databases.
This function allows agencies to send out notifications of payments due. The notifications are sent to the user via e-mail. If the bill has an associated payment, a link is included directing the user to the Pay.gov billing page.
After the customer provides key information, this service references government and commercial databases to confirm the authenticity of the information provided. It can be used merely as a verification engine for agencies to authenticate their customers or it can be used to control access to forms hosted by Pay.gov.
Pay.gov resides in the Treasury Web Application Infrastructure (TWAI), a highly secure environment provided by the Federal Reserve Information Technology (FRIT). All communications between Pay.gov and the agencies use dedicated lines, virtual private networks, or 128-bit hardware-based, version 3-only Secure Sockets Layer (SSL) encryption. This architecture is certified and accredited to National Institute of Standards Technology (NIST) and Federal Information Security Management Act (FISMA) standards.
For More Information about Pay.gov, please e-mail emoney@fms.treas.gov or visit www.pay.gov or www.clevelandfed.org/pay-gov.
A wide range of government agencies are using Pay.gov to process collections ranging from payment processing of I-90 renewals for the Bureau of Citizenship and Immigration Services through to collection of excise taxes for the Alcohol and Tobacco Tax and Trade Bureau. Pay.gov was also chosen by the Federal Trade Commission as its back-end collection service for online sales of "Do Not Call" lists to telemarketers. Currently, approximately 40 applications are on board with another 20 in test.
The Pay.gov site is available 24 hours a day, seven days a week (holidays included) for customers to submit payments. Collection transactions are processed in accordance with the ACH and plastic card standard processing schedules.
"It is a perfect example of true cross-agency benefits and an example of what e-government should be," said Chip Mather, senior vice president of Acquisition Solutions Inc., which advises the Federal government on best practices and acquisitions.
The Gifts to the United States fund was established in 1843 to accept gifts such as from people wishing to express their patriotism.
Money deposited into this account is for the Federal government's general use and can be available for budget needs. The contributions are considered an unconditional gift to the government.
"Gifts" may be defined as gratuitous conveyances or transfers of ownership in property without consideration, 25 Comp. Gen 637, 639 (1946). It has long been recognized that the United States (as opposed to a particular agency) may receive and accept gifts. No particular statutory authority is necessary.
The gifts may be of real property or personal property, and they may be made in a will or while the person is still living.
Citizens who wish to make a general donation to the U.S. government may send checks or money orders to:
By Joann Franklin
The Financial Management Service's Program Assistance and Emerging Technology Divisions recently teamed with JPMorgan Chase for two half-day U.S. Card seminars for Federal agencies in Washington.
During each session, agency personnel received an overview of the program, screen shots of the system and a testimonial from an agency using the technology. Representatives of nearly 40 agencies attended. U.S. Debit Card is a flexible payment mechanism that can be used to deliver miscellaneous or nonrecurring payments to individuals or to allow Government employees access to cash in their official duties.
For More Information on U.S. Debit Card, see www.fms.treas.gov/debitcard.
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