Official Website of the United States Government
Terms and Conditions
- Overview
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Authority
See, inter alia, 12 U.S.C. 90, 265-266, and 391; 31 U.S.C. 321, 3301-3305, and 3720.
Purpose
This section conveys general terms and conditions governing the use of collection services provided to federal agencies. This is not an all-inclusive chapter. For instance, it does not address an agency's business and technical requirements, nor does it address the costs (if any) that Fiscal Service may assess to an agency. Where necessary, these are addressed in other, separate TFM sections, or in agreements between authorized representatives of Fiscal Service and the other federal agency. This chapter also does not include any terms and conditions that are specific to particular collection programs. These can be found in other sections of the TFM or in agreements with agencies.
Conflict Between TFM and Agency Agreement
Except where the requirements of this chapter are prescribed by law, if the terms and conditions of an agreement that Fiscal Service has executed with a federal agency conflict with this chapter, then the agreement has priority.
- Terms
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Depositaries and Agents
Fiscal Service has statutory authority to designate qualified financial institutions and Federal Reserve Banks as depositaries and agents of the United States to provide collection services on behalf of federal agencies. If an agency has need of the services of a depositary or agent, then it must work with Fiscal Service, which can designate a depositary or agent to provide the services the agency seeks, as appropriate. The agency can only receive services from the depositaries and agents that Fiscal Service has specifically designated to serve that agency. The agency cannot independently choose which financial institution will serve as an agent or depositary for the agency, even from among financial institutions that are currently serving as designated agents or depositaries for other purposes. The agency also cannot ask a depositary or agent to provide services in addition to, or beyond the scope of, the services Fiscal Service has designated the depositary or agent to provide the agency. Instead, the agency must coordinate all requests for additional services through Fiscal Service for proper consideration. Fiscal Service may change a depositary or agent providing services to the agency, without permission from the agency.
Account Ownership
Aside from a demand deposit account that Fiscal Service establishes with a financial institution for an agency that has authority to hold funds outside of the U.S. Treasury, any demand deposit account that Fiscal Service establishes with a financial institution solely for a federal agency’s deposits is owned and controlled exclusively by Treasury and not by the agency. An agency does not have authority to exercise control or provide instructions to a financial institution regarding such an account.
If the agency does not have authority to hold funds outside of the U.S. Treasury, and nevertheless establishes an account in its name (contrary to statutory and/or Treasury requirements), the agency is required to advise Treasury immediately of the account. Also, if Treasury becomes aware of such an account (with or without notice from the agency), the agency is required to comply promptly with any and all Treasury instructions regarding the account (which can include instructions to close the account immediately, and deposit the funds into the U.S. Treasury). In addition, Treasury is authorized to assert immediate control over the account.
Required Use of Fiscal Service Services
Federal agencies are generally required to use services offered by Fiscal Service to deposit public money. Exceptions exist for agencies that have specific authority to hold money outside of the U.S. Treasury.
Payment Network Rules
In addition to guidance in the TFM directed at federal agencies, federal agencies are subject to the rules governing various payment networks (such as those covering check, credit card, and Fedwire transactions) when funds are collected and settled. These rules are promulgated by various entities depending on the payment vehicle. For example, credit card transactions are subject to card association rules. Certain payments collected and settled through the Automated Clearing House are governed by Fiscal Service regulation, codified at 31 C.F.R. Part 210 (Federal Government Participation in the Automated Clearing House), which incorporates—with exceptions—the private rules of the National Automated Clearing House Association. The Federal Reserve Board is also responsible for regulations that apply to certain payment networks, which are found in Title 12: Banks and Banking of the Code of Federal Regulations. See TFM Volume I, Part 5, Chapter 7000 for more information on credit and debit card collection transactions. See TFM Volume I, Part 5, Chapter 7500 for more information on Credit Gateway, Fedwire, and ACH Credit Deposits.
Voucher Numbers
For a federal agency cash flow, Fiscal Service summarizes credits and debits through voucher information that includes a voucher number. In response to the requests of federal agencies, Fiscal Service has sometimes customized the sequence or ordering of voucher numbers and has provided advance notice of expected voucher numbers.
However, Fiscal Service is under no obligation to provide this customized service or advance notice and may decide to discontinue providing these services in the future. In addition, Fiscal Service may refuse to continue these practices when transitioning collection services from a legacy program to a new program. Agencies are discouraged from coding their systems to voucher numbers. See TFM Volume I, Part 2, Chapter 5100, Sections 5130 and 5135 for more information on agencies' responsibilities to reconcile their collections.
Reversals, Returns, and Refunds
On occasion, funds from a collection transaction must be reversed or returned to the payor. Fiscal Service reverses or returns transactions in limited circumstances, such as if the transaction was defective in some way. However, in most cases, the payor initiates the reversal or return through the payment system used for the original transaction.
The rules governing reversals and returns vary by payment system. In some cases, reversals and returns are not allowed, while in others the reversals or returns are allowable for some time after the original transaction occurred. In many cases, the payment systems provide that the recipient (in this case, the federal agency) can approve or contest the reversal or return.
Outside of the payment systems processes, federal agencies may be approached by payors and be requested to issue refunds for transaction amounts. Agencies, under their own authorities, can make their own decision to make a return payment to the payor in the requested amount (agency determines re-payment, which is justified under agency program authorities). Fiscal Service will disburse these payments, at the direction of the agency, provided the agency certifies the payment in accordance with the requirements of 31 U.S.C. § 3528.
Federal agencies should be aware of the risks that come from having two separate means (that is return/reversal and agency refund) to make a payor whole. If a payor manages to receive both a return or a reversal through a payment system and also a refund through an agency, the payor has wrongfully received double payment. There also is risk that a federal agency’s refund payment may be made to the wrong person, whereas the payment systems typically ensure that a reversal or return is sent back to the same financial institution account that was used for the original transaction. For these reasons, a reversal or return through a payment system is generally preferable to a federal agency’s refund disbursed by Fiscal Service.
Electronic Data
In providing collection services, Fiscal Service (including its depositaries and agents) may process both financial data and agency program data. Fiscal Service retains financial data in electronic data format (summary and transaction-level detail) consistent with its mission to provide collection and cash management services. For instance, this electronic data includes voucher data and information needed for Fiscal Service government-wide accounting purposes, such as Treasury Account Symbols and ALCs. Agency program data refers to all electronic data processed by Fiscal Service when providing collection services on behalf of a federal agency for that agency’s benefit. As an example, agency program data includes information from agency forms that Fiscal Service may process on an agency’s behalf when performing the collection service. A federal agency typically requires access to all of its agency program data that Fiscal Service may have, as well as access to at least some financial data.
Generally, Fiscal Service retains, and provides a federal agency access to, the agency's financial and program data used for collection purposes for at least 7 years. Fiscal Service retains financial data or agency program data for a longer period of time if required to do so by a court or by law. The agency also may retain a copy of the financial data and federal program agency data pertaining to transactions that Fiscal Service processed on behalf of the agency. However, the agency may elect to have Fiscal Service alone retain this electronic data. In accordance with its guidelines, Fiscal Service uses and gives access to data. Fiscal Service may not customize data formats for individual federal agencies. In some cases, data may be archived and not immediately accessible.
A federal agency must provide Fiscal Service with prompt written notice to a division director or higher level if the agency requests Fiscal Service to retain electronic data for longer than 7 years or to produce records. Fiscal Service acknowledges that in some cases it may not have discretion to reject such requests, as may be the case when a request is made to hold records beyond 7 years due to actual or pending litigation. However, Fiscal Service does not automatically agree to such requests if it is not legally required to do so. Fiscal Service’s decision depends on the facts surrounding the request, including whether the agency already has its own copy of the electronic data.
Although an agency may be able to use Fiscal Service systems to respond to a Freedom of Information Act (FOIA) request it receives, Fiscal Service does not accept or answer a FOIA request on an agency’s behalf.
Fiscal Service does not necessarily retain or provide access to financial data and agency program data in each and every Fiscal Service system that processes that data. Except to the extent that it is legally precluded from doing so, Fiscal Service may elect to consolidate data into, or limit access to data by agencies to, a smaller number of systems, rather than maintain copies of data or provide access in multiple systems.
Security Controls
The design, structure, implementation, and oversight of security controls for collection services provided by Fiscal Service (including its depositaries and agents) is the responsibility of Fiscal Service.
At a federal agency’s request, Fiscal Service makes available certain documentation pertaining to these security controls, including copies of security certification and accreditation documentation, as well as third-party review and audit documents.
The amount of documentation that Fiscal Service makes available to federal agencies is generally limited to a standard package of documents. Furthermore, Fiscal Service may place limits on the distribution of sensitive security documentation, including a limitation to on-site reviews at Fiscal Service. At its discretion, Fiscal Service may provide only edited or summary versions of this documentation.
Property
Fiscal Service may require that particular property (hardware, software, communication lines, etc.) be used for collection services, and used exclusively for that purpose, even if paid for by the federal agency.
Fiscal Service may provide property to a federal agency free of charge, on a cost-reimbursable basis, or may require the agency to acquire the property on its own.
A federal agency must return Fiscal Service property (including that of agents and depositaries) upon request.
No Warranty
Fiscal Service strives to provide financial services that meet or exceed commercial best practices, but it does not provide any warranties or guaranties to federal agencies it services, including any warranties of merchantability or fitness for a particular purpose. Consequently, neither Fiscal Service nor its depositaries nor agents will pay a penalty to a federal agency for failing to meet specific uptime or other service level metrics.
Treasury Financial Services
- Overview
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Introduction
This section describes the factors that determine when the Bureau of the Fiscal Service (Fiscal Service) will pay for certain collection and payment services and when the Fiscal Service will require a Federal agency to reimburse it for the cost of such services.
Background
The Revenue Collections Management Assistant Commissioner area (RCM) and the Payment Management Assistant Commissioner area (Payment Management) of the Fiscal Service provide depositary and other financial services to Federal agencies using a network of Federal Reserve Banks (FRBs) and financial institutions designated by the Fiscal Service to act as depositaries and/or fiscal and financial agents. In general, the Fiscal Service provides to other Federal agencies a range of collection and payment services at no cost to the agency. In some cases, the Fiscal Service may offer to other Federal agencies, on a reimbursable basis, specialized services that are related to but outside of the scope of the collection or payment process, or alternatively, a new customized solution that is not currently part of the Fiscal Service’s menu of services.
Authority
The Secretary of the Treasury has authority to collect receipts and pay funds drawn on the Treasury (31 U.S.C. § 321, 3301, 3321).
Unless otherwise authorized, all public money must be deposited in the Treasury or with depositaries designated by the Secretary (31 U.S.C. § 3302). To collect public money, the Secretary may offer a variety of collection services. The Secretary is authorized to charge a fee to any agency that fails to deposit its funds in a timely manner (31 U.S.C. § 3720).
Except as provided by statute or delegated to other agencies by the Secretary, only officers and employees of the U.S. Department of the Treasury may disburse public money (31 U.S.C. § 3321). The Secretary may designate a depositary to pay public money (31 U.S.C. § 3327). The Secretary is authorized to charge a fee to any agency that fails to disburse its funds in a timely manner (31 U.S.C. § 3335).
The Secretary may designate a financial institution as a depositary and/or financial agent, and when acting as a depositary or agent, that financial institution must perform all such reasonable duties as the Secretary requires (12 U.S.C. § 90, 265, and similar statutes). FRBs are Treasury’s fiscal agents pursuant to Federal law (12 U.S.C. § 391).
The Secretary has delegated these responsibilities to the Fiscal Service, a bureau of the U.S. Department of the Treasury.
- Financial Services Provided
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Legally Required Services
Federal agencies receiving or holding public money from any source are statutorily required to deposit these funds into the U.S. Treasury, unless otherwise authorized by law. Except as otherwise provided by law, the Fiscal Service, as part of its mission, is the agency responsible for collecting, holding, disbursing, and accounting for public money on behalf of most Federal agencies. Consequently, Federal agencies generally may not hold public money outside of the U.S. Treasury and must deposit all public money into an account in the name of the U.S. Treasury using one of the various collection mechanisms established by the Fiscal Service.
The Fiscal Service provides these financial services to Federal agencies using fiscal or designated financial agents or depositaries, generally at no cost to the agency. These services, referred to as “nonreimbursable” services in this document, typically encompass depositary services and standard remittance processing for disbursement, collection, and accounting for the settlement of funds.
Examples of services that Federal agencies must obtain from the Fiscal Service include:
Collection of fees, fines, or other monies;
Deposit of monies into an account at a financial institution; and
Disbursement of funds to the public.
Legally Authorized Services
The Fiscal Service is authorized to perform other financial services reasonably related to its core mission of providing central collection and payment services to Federal agencies.
Examples of services that the Fiscal Service is legally authorized, but not required, to provide to Federal agencies include:
Lockbox-related services, such as detail sorting, special handling, photo-copying, custom file assembly, and issuance of receipts; and
Custom cash management and other financial services in closed environments, such as military bases or Federal prisons.
Legally authorized services may be provided on either a reimbursable or nonreimbursable basis. Section 3235 discusses the criteria that the Fiscal Service considers when determining whether a service should be provided on a reimbursable or nonreimbursable basis.
Existing and Best-Suited Fiscal Service Collections and Payment Mechanisms
The Fiscal Service continuously strives to improve the Government’s overall cash management by working with Federal agencies to determine the most cost-efficient and effective cash management methods that will meet agencies’ missions and goals. In most cases, the Fiscal Service’s existing array of depositary and financial services are the most cost-efficient and effective cash management methods of meeting an agency’s requirements.
The Fiscal Service has sole discretion to decide which of its existing services provide the most efficient, cost-effective, and/or best-suited mechanism for a particular agency’s needs. If an agency chooses not to use the most efficient mechanism provided by the Fiscal Service, then an agency may have to pay for those services along with an inefficiency charge imposed by the Fiscal Service.
- Criteria for Reimbursable and Nonreimbursable Financial Services
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Criteria for Determining Whether a Financial Service Will Be Provided on a Reimbursable or Nonreimbursable Basis
The determination of whether the Fiscal Service will provide a particular financial service on a reimbursable or nonreimbursable basis depends on several factors. In general, the Fiscal Service is more likely to decide to provide a particular financial service on a nonreimbursable basis when it determines, in its sole discretion, that one or more of the following apply:
The financial service directly facilitates the timely processing of collections or payments;
The financial service has a significant positive impact on the ability to manage the Government’s cash position or account for funds;
The information required to be gathered with a transaction does not hinder the timely deposit of the collection or processing of the payment;
Only Treasury-designated agents and depositaries, or a Fiscal Service-approved subcontractor, may provide the service (that is, collecting, holding, disbursing, or accounting for public money), as opposed to financial services that the agency may perform or acquire on its own;
The financial service advances more effective and centralized collections or payments;
The financial service is for a collection other than a user fee (user fees should be priced to include the cost of collections and therefore should be reimbursed);
The financial service is, or with minimal effort can be, offered Governmentwide, as opposed to a service that is customized for the needs of only one or a few agencies; or
The Fiscal Service believes that providing the financial service is in the best interests of the Government.
- Economy Act Considerations
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The Fiscal Service expects Federal agencies to fulfill the requirements imposed on them under the Economy Act (31 U.S.C. § 1535). It is the sole responsibility of the Federal agency seeking reimbursable services from the Fiscal Service to ensure its agency’s compliance with the Economy Act.
Securing Deposits
- Overview
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Introduction
This section prescribes federal entity requirements for securing public money on deposit at depositaries.
Applicability
When a federal entity places funds on deposit with a financial institution, the financial institution must pledge collateral under conditions prescribed in this chapter. The pledging of collateral by a financial institution is necessary to protect the federal government against risk of loss. State, local, and municipal deposits are not covered under this chapter.
Authority
See 12 U.S.C. 90, 265, 266, and 1789a; 31 U.S.C. 321 and 3303; and 31 CFR 202 and 380.
- Responsibilities for Public Money
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Responsibilities
The Department of the Treasury’s (Treasury) Bureau of the Fiscal Service (Fiscal Service) promulgates rules and provides guidance for the security of public money on deposit in depositaries. The rules outlining broad policy objectives with securing such funds are included in 31 CFR 202 and related collateral guidance in 31 CFR 380. The Treasury Financial Manual provides more detailed policy guidance and detailed procedures that federal entities, depositaries, and Federal Reserve Banks (FRB) must follow to ensure the funds are secured. Each federal entity must remain informed of and compliant with the latest collateral regulations, rules, and procedures.
Fiscal Service determines the types of acceptable collateral depositaries can use to secure deposits of public money. Fiscal Service also determines appropriate margins on pledged collateral.
The following subsections outline the distribution of responsibilities for securing deposits of public money.
Federal Entities
Each federal entity must:
Establish a Treasury Collateral Management and Monitoring (TCMM) account and V account by completing the TCMM Agency Access Authorization Form.
Provide the TCMM Operations Team with a timely annual update of contact information.
Notify the TCMM Operations Team immediately when there are changes to authorized individuals. See the Treasury Collateral Management and Monitoring website to obtain the form to update contact information.
Provide timely address changes to the TCMM Operations Team.
Notify Fiscal Service, in writing, when canceling a V account. The federal entity must state that it no longer has collateral holdings and no longer needs the V account.
Develop and maintain internal operating procedures to ensure the security of public money. Fiscal Service may request a copy of federal entity procedures.
Ensure that TCMM has the most accurate and up-to-date amount on deposit to be collateralized. This allows the TCMM Operations Team to maintain sufficient collateral in excess of the recognized deposit insurance limit (generally $250,000). See 12 CFR 330 (Deposit Insurance Coverage).
Monitor federal entity collateral records by reviewing the monthly FRB Security Account Holdings Report and the Collateral Monitoring Recap Report. The Security Account Holding Report lists all securities pledged to a federal entity. The Collateral Monitoring Recap Report provides federal entities and financial institutions with a recap of security collateral values and the amount to be collateralized for their V accounts throughout the month. Both reports are available in the TCMM application.
Federal Reserve Banks
All FRBs must secure pledged collateral to protect public funds.
TCMM Operations Team
The TCMM Operations Team must:
Ensure that pledged collateral is eligible and sufficient to secure deposits of public money.
Maintain and distribute FS Form 5902: Collateral Security Resolution (Revised May 2015); and FS Form 5903: Collateral Pledge and Security Agreement (Revised May 2015). See the Treasury Collateral Management and Monitoring website to obtain these forms.
Maintain a current list of collateral contacts.
Make available the FRB Security Account Holdings Report and the Collateral Monitoring Recap Report to federal entities on a monthly basis through TCMM.
Make available the Collateral Monitoring Recap Report to depositaries on a monthly basis through TCMM.
Open collateral accounts in National Book Entry System (NBES), Collateral Management System (CMS), and TCMM.
Value collateral.
Depositaries
Depositaries must:
Complete FS Form 5902 and FS Form 5903 and submit these forms to the TCMM Operations Team to establish collateral security accounts.
Pledge sufficient eligible collateral security as required by the Secretary of the Treasury.
Provide federal entities and FRBs with requested information.
Advise federal entities when the depositary is not able or willing to pledge collateral.
Fiscal Service
Fiscal Service must:
Assign and maintain V account numbers and provide federal entity information to the FRB so that the FRB may establish accounts.
Establish the collateral policy.
Establish and maintain lists of acceptable collateral and assigned margins.
Periodically update the criteria and guidance for acceptable collateral and applicable margins. See the TreasuryDirect website.
- Selection of a Depositary
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A federal entity with statutory authority to hold public money outside of Treasury’s cash account must deposit funds in a financial institution meeting the requirements of 31 CFR 202. Federal entities are encouraged, but not required, to use minority financial institutions as depositaries whenever these institutions can provide required banking services without an appreciable increase in cost or risk to the government. Treasury’s Minority Bank Deposit Program (MBDP) is a voluntary program to encourage federal entities, state and local governments, and the private sector to use participants as depositaries and financial agents. Fiscal Service annually certifies qualified minority institutions and maintains a roster of MBDP participants (see the Minority Bank Deposit Program website).
- Establishing and Securing Accounts
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Establishing a Federal Entity Collateral Account
To acquire a V account, federal entities must fill out and submit the TCMM Agency Access Authorization Form. Each federal entity must use its V account number to establish an account at an authorized depositary. Also, federal entities use their V accounts in TCMM for managing their collateral requirements. Fiscal Service assigns federal entity account numbers.
Securing Federal Entity Accounts
All public money deposited in a depositary must always be fully secured. The current federal deposit insurance limit per insured account is $250,000. Public money is considered sufficiently secured if:
The total amount of a federal entity's deposits in a single depositary is less than the recognized deposit insurance limit, or
The depositary pledges eligible collateral before a federal entity deposit exceeds the recognized deposit insurance limit.
Federal Deposit Insurance Corporation (FDIC) Regulations
Under FDIC regulations:
Federal entity deposit accounts maintained at different branches or offices of the same insured depositary are not separately insured.
Each “official custodian” of public money in a depositary is separately insured for $250,000 in the aggregate for “time and savings deposits” and $250,000 in the aggregate for all “demand deposits.” See 12 CFR 330.15(a). The FDIC regulations do not limit the number of official custodians a federal entity may have. Therefore, if a federal entity has three official custodians, each with a “time and savings deposit” account and “demand deposit” account, each account is insured for $250,000.
Securing Deposits With Collateral
When a federal entity's deposits of public money exceed the recognized deposit insurance limit (generally $250,000), the federal entity must request that the depositary pledge eligible collateral to secure the uninsured amount. The depositary must pledge collateral with an FRB or an authorized third-party custodian approved by the FRB. If a third-party custodian is used, the depositary must notify the FRB by a trust receipt.
The TCMM Operations Team must ensure the depositary pledges collateral according to the list of “Acceptable Collateral for Pledging to Federal Agencies” under 31 CFR 202 and 380. See the TreasuryDirect website.
This collateral requirement applies to total federal entity deposits at a depositary that exceed the applicable insurance limit, regardless of how many accounts and whether the deposits are spread among several branches.
- Pledging Collateral
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Initial Deposits
When a federal entity deposits public money in a depositary account for the first time and the balance exceeds the deposit insurance limit, the federal entity must request that the depositary pledge collateral to the FRB using the federal entity’s V account. This designated account number must be used on all collateral transactions.
When a federal entity anticipates its deposits will exceed the insurance limit, it must provide the TCMM Operations Team with information about the pledging depositary, an authorized collateral contact, and the amount to be collateralized. The federal entity must await notification from the TCMM Operations team that an account relationship has been set up in NBES and CMS for the federal entity, and that federal entity access to TCMM has been established. After access to TCMM has been established, the depositary must pledge sufficient collateral, as shown in TCMM, to cover a federal entity's deposits at the depositary.
Requesting Additional Collateral
Using TCMM, the TCMM Operations Team monitors collateral balances to ensure that sufficient collateral has been pledged to cover a federal entity's deposits at the depositary. When the federal entity requires additional collateral to secure these deposits, the federal entity requests the depositary to pledge additional collateral. The federal entity must review the FRB Security Account Holdings Report and the Collateral Monitoring Recap Report available in TCMM to ensure that the amount to be collateralized is adequate. The federal entity must ensure that TCMM has the most accurate amount to be collateralized so that TCMM Operations Team can monitor the collateral pledged for sufficient value. The TCMM Operations Team will contact the depositary to request additional collateral, if necessary.
Information Required by Fiscal Service
Initially, federal entities must provide the TCMM Operations Team with a completed TCMM Agency Access Authorization Form and must annually recertify federal entity TCMM users and contacts.
- Releasing Collateral
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TCMM Operations Team Responsibilities
The TCMM Operations Team approves all releases of collateral. The TCMM Operations Team may release collateral as long as such action does not cause an account deficiency. If a depositary requests the release of collateral that would cause a deficiency, the TCMM Operations Team instructs the federal entity to inform the depositary of this potential deficiency situation and requests the depositary to pledge replacement collateral. If there are questions regarding the amount to be collateralized, the TCMM Operations Team works with the depositary to contact the federal entity to determine the exact amount to be collateralized. Updates for the amount to be collateralized are not processed without proper authorization from the federal entity.
In the case of a failed or insolvent depositary, only Fiscal Service has the authority to instruct the TCMM Operations Team to release collateral (see subsection 9060.20).
Federal Entity Responsibilities
The TCMM Operations Team contacts federal entities if it is determined that a deficiency would result from a collateral release. Federal entities must confirm that the amount to be collateralized is sufficient. The federal entity may reduce the amount to be collateralized if applicable.
If a federal entity wants to close a V account, it must notify the TCMM Operations Team by telephone or in writing that the deposit balance is zero and collateral is no longer needed. The federal entity also must notify Fiscal Service in writing that the federal entity no longer needs the V account.
Only after a federal entity sets the amount to be collateralized to zero within TCMM, which eliminates the need for collateral, will the TCMM Operations Team release collateral.
When the TCMM Operations Team releases pledged collateral, a federal entity must:
Update internal record keeping.
Verify that all information regarding the release is correct upon receipt of the Collateral Monitoring Recap Report.
Retain this report as part of its collateral records.
- Monitoring Collateral Levels
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Monitoring
The TCMM Operations Team ensures that collateral values equal or exceed the amount to be collateralized. Federal entities must maintain adequate records to ensure that the amount to be collateralized on federal entity reports accurately reflects the amount on deposit over the applicable deposit insurance coverage. Federal entities must document that deposits are always protected and must ensure that the TCMM has an accurate amount to be collateralized. TCMM provides reports and real-time inquiries to assist federal entity collateral management and record keeping.
Verifying Collateral Amounts
Federal entities must ensure that TCMM is reporting the most accurate and up-to-date amount on deposit to be collateralized. They must maintain individual subsidiary records that can independently verify each TCMM amount to be collateralized balance.
Monthly Reconciliation Statements
On a monthly basis, the FRB Security Account Holdings Report and the Collateral Monitoring Recap Report are available in TCMM for each federal entity. Each federal entity must review these reports to ensure that the holdings are sufficient, and most importantly, that the collateralized balance is shown correctly and reflects the account balance (in excess of applicable insurance) on deposit at the depositary. The federal entity must notify the TCMM Operations Team immediately if there is a discrepancy in the amount to be collateralized.
- Mergers and Insolvencies
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Depositary Mergers
It is important that federal entity and TCMM Operations Team collateral records correctly reflect the outcome of depositary mergers. This ensures that collateral deficiencies do not develop. When a federal entity maintains accounts with two depositaries, each account is separately insured by recognized deposit insurance (generally $250,000). If two depositaries serving the same federal entity merge, the surviving depositary may need to pledge additional collateral to replace the insurance coverage lost because of the merger.
Depositary Insolvencies
If a federal entity maintains public funds in an account at a depositary that becomes insolvent, the federal entity must immediately contact Fiscal Service (see Contacts). Fiscal Service will guide federal entities in the disposition of the collateral on deposit with the depositary. The proceeds of collateral on deposit with a depositary will be applied to satisfy any claim of the United States against the depositary, not just the amount placed on deposit by the federal entity.
Federal Financial Management Standards
- Functions and Activities
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Public Receipt Processing (FFM.060.030)
Receive direct payments made by public or payment information from Treasury;
Match payments received to invoices and payer account or determine they are miscellaneous receipts (e.g., user fees retained by the agency or other collections that must be deposited to the General Fund of the U.S. Government);
Prepare and record collection deposits;
Process credits for instances of overpayment;
Process returned negotiable instruments (e.g., returned check because of insufficient funds or closed account);
Includes receipt and processing of miscellaneous receipts, processing of billed and unbilled collections, and researching and resolving collections not clearly identified to an agreement
- Federal Financial Management System Requirements (FFMSR)
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Managing Revenues and Other Financing Sources (1.1.5)
Capture federal government revenue or other financing type (for example, exchange revenues, non-exchange revenues, budgetary resources), category (for example, taxes, duties, fines, user fees, and sale of goods and services), and subcategory (for example, income tax, excise tax, and donations) consistent with the FASAB Handbook.
Determine revenue classification (for example, exchange, non-exchange, and other financing sourcing) and value as specified in the FASAB Handbook.
Determine adjustments to budgetary and financial (proprietary) accruals consistent with the FASAB Handbook and OMB Circular No. A-11.
Provide revenue and other financing sources data to post GL transactions consistent with USSGL attributes (for example, exchange/non-exchange indicator and program indicator), transaction codes, transaction categories (for example, collections and receivables), and transaction subcategories (for example, receivables/accrued revenue) as defined in the TFM.
Provide revenue and other financing sources disclosure and supplementary information for agency and government-wide reporting as specified in FASAB Handbook.
Establishing Receivables (2.2.4)
Capture federal government receivable information (for example, receivable type and customer information) to support agency management of and reporting on receivables to Treasury consistent with the TFM and as required by OMB Circular No. A-129 and the CFR.
Determine receivable amount, including penalty and interest, and other receivable information consistent with OMB Circular No. A-129, the FASAB Handbook, and the CFR.
Provide receivable data required to post GL transactions consistent with USSGL transaction codes, transaction categories (for example, collections and receivables), and transaction subcategories (for example, receivables/accrued revenue) as defined in the TFM.
- Use Cases
- Treasury Financial Manual (TFM)
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TFM Volume I Part 5 Chapter 1500, General Terms and Conditions Governing Collection Services
TFM Volume I Part 5 Chapter 9000, Securing Government Deposits in Federal Entity Accounts
TFM Volume I Part 6 Chapter 3200, Policy for Providing Depositary and Other Financial Services to Federal Agencies (T/L 670)
Contact Information
- Contact Details
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Direct general questions concerning this section to:
Department of the Treasury
3201 Pennsy Drive, Building E
Bureau of the Fiscal Service
Revenue Collections Management
Agency Relationship Management Division
Landover, MD 20785For questions on Depositaries Contact the office below with inquiries or written requests.
Department of the Treasury
3201 Pennsy Drive, Building E
Bureau of the Fiscal Service
Bank Policy and Oversight Division
Landover, MD 20785Direct questions regarding securing deposits to:
Department of the Treasury
3201 Pennsy Drive, Building E
Bureau of the Fiscal Service
Revenue Collections Management
Landover, MD 20785Contact the TCMM Treasury Support Center at:
TCMM Operations Team
1421 Dr. Martin Luther King Drive
Federal Reserve Bank of St. Louis
St. Louis, MO 63016-3716For information describing acceptable collateral and its valuation, see the TreasuryDirect website.
For information on collateral policy, see the Treasury Collateral Management and Monitoring website.
This page was last updated on May 27, 2021.