General Collections Information

General Terms and Conditions Governing Collections Services

Introduction

This Treasury Financial Manual (TFM) chapter describes general terms and conditions governing collection services that the Bureau of the Fiscal Service (Fiscal Service) provides to federal agencies.

Section 1510—Scope and Applicability

This chapter 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.

Section 1515—Authority

See, inter alia, 12 U.S.C. 90, 265-266, and 391; 31 U.S.C. 321, 3301-3305, and 3720.

Section 1525—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.

Section 1530—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.

Section 1535—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.

Section 1540—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.

Section 1545—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.

Section 1550—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.

Section 1555—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.

Section 1560—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.

Section 1565—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.

Section 1570—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.

Section 1575—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.

Contact Us

Detailed Contacts

Direct questions concerning this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Revenue Collections Management 
Agency Relationship Management Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-7150 

 

Securing Government Deposits in Federal Entity Accounts

Introduction

This chapter prescribes federal entity requirements for securing public money on deposit at depositaries.

Section 9010—Scope and 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.

Section 9015—Authority

See 12 U.S.C. 90, 265, 266, and 1789a; 31 U.S.C. 321 and 3303; and 31 CFR 202 and 380.

Section 9025—Responsibilities for Public Money

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.

9025.10—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.

9025.20—FRBs

All FRBs must secure pledged collateral to protect public funds.

9025.30—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.

9025.40—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.

9025.50—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.
Section 9030—Selection of a Depositary

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).

Section 9035—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.

Section 9040—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.

9040.10—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.

9040.20—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.

Section 9045—Pledging Collateral

9045.10—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.

9045.20—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.

9045.30—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.

Section 9050—Releasing Collateral

9050.10—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).

9050.20—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.
Section 9055—Monitoring Collateral Levels

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.

9055.10—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.

9055.20—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.

Section 9060—Mergers and Insolvencies

9060.10—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.

9060.20—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.

Contact Us

Detailed Contacts

Direct questions regarding this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Revenue Collections Management

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-6950 

 

Contact the TCMM Treasury Support Center at:

TCMM Operations Team 
Federal Reserve Bank of St. Louis

1421 Dr. Martin Luther King Drive 
St. Louis, MO 63016-3716


888-568-7343, option 2 

 

For information describing acceptable collateral and its valuation, see the TreasuryDirect website.

For information on collateral policy, see the Treasury Collateral Management and Monitoring website.

Policy for Providing Depositary and Other Financial Services to Federal Agencies

Introduction

This chapter 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.

Section 3210—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.

Section 3215—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.

Section 3220—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.
Section 3225—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.

Section 3230—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.

Section 3235—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.
Section 3240—Economy Act Considerations

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.

Contact Us

Detailed Contacts

Contact the office below with inquiries or written requests.

Department of the Treasury 
Bureau of the Fiscal Service 
Bank Policy and Oversight Division

3201 Pennsy Drive, Building E 
Landover, MD 20785

202-874-6751

 

Voucher Documents

Introduction

This chapter prescribes procedures to be used for processing credit and debit vouchers by Federal Reserve Banks (FRBs).

Section 2010—Scope and Applicability

This chapter prescribes the procedures to be used by Federal Reserve Banks (FRBs) for processing SF 215 and SF 215-A credit vouchers, and SF 5515 debit vouchers. These credit and debit vouchers record book cash data and are entered by FRBs in the Direct Voucher Submission (DVS). The primary objective of DVS is to capture and report voucher information for transactions that are not reported directly from programs/applications to the Collections Information Repository (CIR) and Payments Information Repository (PIR). Vouchers reported through DVS may occur either by manual or automated entry.

Section 2015—Authority

The Secretary of the Treasury is authorized under Section 15 of the Federal Reserve Act, as amended (12 U.S.C. 391), to require FRBs to act as depositaries and fiscal agents of the United States.

Section 2020—Book Data

Book data is defined as the cash reported by government entities or Treasury systems, reflecting funds paid out or collected, affecting the Treasury General Account (TGA). Treasury utilizes voucher information for internal reporting, accounting, and forecasting; federal agencies utilize this book data for accounting and other purposes.

Section 2030—Credit Voucher

The SF 215 credit voucher, which is the basic version of the credit voucher, is designated for reporting book data about cash deposits by all agencies or Financial Institutions for credit to the U.S. Treasury. It is used government-wide by depositors as an integral part of Treasury’s cash management process. Credits must be reported separately and not netted by debits. Use of the credit voucher enables Treasury to perform a detail item match of activity flowing through the banking system with activity reported by depositing agencies. The SF 215-A credit voucher is a version of the credit voucher that is reported on behalf of the Internal Revenue Service (IRS) for reporting revenue receipts by various tax classes.

Section 2040—Debit Voucher

The SF 5515 debit voucher is the form designated primarily for payments and to adjust, correct, or reverse a deposit from the U.S. Treasury. It is also used for reporting book data concerning cash, uncollectible items, and adjustments previously credited to the TGA on the SF 215.

Section 2050—Processing Voucher

DVS is used to capture the book payment and miscellaneous collection activity processed by FRB. Voucher data is either manually entered by FRBs or automatically loaded into DVS. Because DVS voucher files are not processed by any other Fiscal Service systems, these files are not duplicative of other vouchers processed by Fiscal Service.

When vouchers are manually entered into DVS, they are in a pending state until book data and bank data is reconciled. The pending state means that the vouchers are in DVS but have not been verified and, therefore, have not been sent to the CIR or PIR. Once the book data and the bank data are reconciled, then the vouchers are submitted to the appropriate repository, based on the account key used when entering the voucher in DVS, which allow the Collection Information Repository (CIR) and Payment Information Repository (PIR) to have the complete view of collection and payment activity respectively. Files are sent on a preset schedule throughout the day.

Section 2060—Create Vouchers for the Book View

As part of the balancing procedures, the business line will enter vouchers in DVS which reports the corresponding ‘Book View’ for information about the transaction that posted to the TGA. These vouchers represent details for credit vouchers (SF 215 and SF 215-A (collections only)) and debit vouchers (SF 5515).

Section 2070—Reconcilement of Funds (Book)

Each FRB’s business line has responsibility for balancing their source documentation to debits and credits in the Federal Reserve’s Enterprise Accounting System (EASy). This balancing is done to ensure all work is processed correctly to the TGA, though it is not usually a TGA reconciliation step. The business line also ensures that voucher information is properly entered into the appropriate system or repository (DVS or CIR), which ultimately creates the Treasury’s Book View.

These processes can be performed multiple times throughout the day with a final balancing occurring at the end of the business line’s accounting day. The business lines can utilize several sources to assist them with balancing. This includes Account Management Information (AMI), EASy, or a payment system (i.e., Fedwire, FedACH) for the Bank View. In the DVS application, there are search capabilities that can be used to help verify the Book View.

Several of the business lines have a second verification performed before submitting vouchers. This requires the book information to be shared with a second person and verified before submitting the vouchers.

If a user finds a discrepancy between the book and bank, then the issue is investigated before submitting the vouchers. Because the vouchers are in a pending state, and have not been submitted, the user has the ability to edit or delete vouchers in DVS. Once the book and the bank are reconciled, then the vouchers are submitted in DVS.

Section 2080—Submitting Vouchers for Book View

When a business line submits its vouchers in DVS, then the application will automatically send the vouchers to the appropriate Treasury Repository, either CIR or PIR, based on the account key used for the voucher.

Contact Details

Direct inquiries concerning this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Data Management Reporting and Analysis Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-6717 

 

Bank Cash Data

Introduction

This chapter describes procedures Federal Reserve Banks (FRBs) use for processing credits and debits to Treasury's General Account (TGA).

Section 3010—Authority

The Secretary of the Department of the Treasury (Treasury) under Section 15 of the Federal Reserve Act, as amended (12 U.S.C. 391), is authorized to require the FRBs to act as depositaries and fiscal agents of the United States.

Section 3015—Bank Data

Bank Data is defined as the official cash balance reported by the FRBs that reflect amounts settled into the TGA. Bank cash will be reported by Routing and Transit Number (RTN) via the Financial Institution Reconcilement Data (FIRD) file created by the Federal Reserve’s Enterprise Accounting System (EASy).

Section 3020—Background and Concepts

Credit vouchers and debit vouchers trigger the movement of funds by RTN into and out of the TGA. Debits and credits from transactions processed post directly to the TGA and update the TGA balance throughout the day. Specifically, credit vouchers add to the TGA, and debit vouchers subtract from the TGA. Treasury has access to immediately available funds intraday by allowing for the immediate recording of transactions and near real-time information for reconciliation and management of the TGA.

Section 3025—Request to Move Funds

Business lines request to move funds (debit or credit the TGA) on an “as needed” basis. The frequency and volume of transactions depend on the business and can vary from several thousand daily, a few daily, or even one quarterly. These transactions are posted directly to the TGA based on established posting rules.

Section 3030—Initiate Movement of Funds

Business lines use specific Transaction Processing Units (TPUs) in EASy to process the accounting transactions. Fedwire Funds, Fedwire Securities, and National Settlement Service (NSS) settle in final funds when processed throughout the business day. Other transactions, such as FedACH, check, cash, and direct entries into EASy settle after they are processed. TGA can originate or receive transactions between the hours of 9:00 a.m. Eastern Time (ET) and 6:30 p.m. ET (coinciding with the operating hours for the Fedwire Funds Service).

Section 3035—Enterprise Accounting System (EASy) Daily Process

Treasury collection and payment transactions flow through the Federal Reserve System (FRS) payment systems, or in some cases, post directly to EASy. Debits and credits generated by these transactions post directly to the TGA throughout the day according to established posting rules in the FRS Payment System Risk (PSR) policy.

The FIRD File is created and delivered after all transactions have posted and the application has closed for the business day. This file is delivered after the close of EASy. The file is delivered to the Collections Information Repository (CIR), Payment Information Repository (PIR), CASH TRACK, and Central Accounting Reporting System (CARS) to help support the matching and verifying process. Information on the FIRD file includes the opening and closing balance of the TGA and information on transactions at the sub-account RTN level.

Contact Details

Direct inquiries concerning this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Cash Reporting Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-9790 

 

Maintaining Treasury's General Account

Introduction

This chapter provides instructions for reporting United States dollar transactions relating to the General Account of the U.S. Treasury (Treasury’s General Account).

Section 1010—Scope and Applicability

These instructions apply to depositaries outside the 50 United States (Appendix No. 1). Each depositary should refer to the specific authorization received from the Over The Counter Division (OTCD), which covers additional instructions.

Section 1015—Authority

These instructions are issued in the United States Code at 31 U.S.C. 473, which authorizes the Secretary of the Treasury to designate, in foreign countries and in the Territories and insular possessions of the United States, depositaries of public moneys as necessary for transacting Government business.

Section 1025—Prescribed Forms

Overseas Depositaries will use the following forms (when appropriate) for reporting to Treasury. Samples of these forms are in Appendix No. 2. The forms may be obtained from the Supply and Property Management Branch (Section 1070).

1025.10—TFS Form 17 “Transcript of the General Account of the United States Treasury” (Daily Transcript)

This form is used by the overseas depositary to report the transactions affecting the Treasury’s General Account. Original Treasury documents supporting the transactions must be attached to the TFS Form 17 (Section 1035).

1025.20—TFS Form 17C “Transcript of the General Account of the United States Treasury, Abstract of Receipts (Continued)”

This form is used to supplement the “Abstract of Receipts” section of the TFS Form 17 when additional space is needed to list deposits.

1025.30—TFS Form 17M “Transcript of the General Account of the United States Treasury, Abstract of Charges (Continued)”

This form is used to supplement the “Abstract of Charges” section of the TFS Form 17 when additional space is needed to list the charges.

1025.40—SF 215 “Deposit Ticket”

Deposits made to Treasury’s General Account at an overseas depositary must be accompanied with an SF 215. This form is also used by depositaries for adjusting understated deposits submitted by a Federal agency (subsection 1030.10).

1025.50—SF 5515 “Debit Voucher”

This form is used for adjusting an overstated SF 215 submitted by a Federal agency and for reversing a deposit amount when a deposit item is returned as uncollectible or is lost or destroyed before collection (subsection 1030.20b).

1025.60—TFS Form 5208 “Transfer Voucher”

This form is used by the overseas depositary to charge the Treasury’s General Account maintained by the depositary for paid U.S. Treasury checks (subsection 1030.30b).

1025.70—TFS Form 5209 “Transfer Voucher”

This form is used by Treasury to charge or credit Treasury’s General Account at the overseas depositary when differences are found in the amount of Treasury checks paid and the amount reported on TFS Form 5208 (subsection 1030.30c).

1025.80—TFS Form 12 “Transfer of Funds”

This form is used to transfer funds between depositaries, FRBs, and Treasury (subsection 1030.40).

1025.90—TFS Form 5907 “Analysis of Activity in the Treasury’s General Account”

This form is prepared at the end of each month to report the activity in Treasury’s General Account (Section 1040).

1025.100—TFS Form 6521 “Request for Check Information”

This form is used to request status information on cashed checks that have been lost or stolen during shipment (Section 1050).

Section 1030—Reporting Requirements

1030.10—Deposits

Each deposit received on an SF 215 from Federal agencies for credit to the U.S. Treasury must be credited immediately to Treasury’s General Account and reported on the TFS Form 17 (Section 1035) under “Abstract of Receipts.” The date of credit (confirmed date) that the depositary has inserted on the SF 215 and the date shown on the related TFS Form 17 must always be the same. The Agency Location Code (ALC) must be filled in and correct in order that the proper depositary can be charged or credited. The original of each SF 215 will be sent to the Reports Control Section (Section 1035) with the TFS Form 17. The copies of the SF 215 will be distributed according to the instructions printed on each copy.

1030.20—Correction of Errors on the SF 215

Whenever there is a difference between the amount shown on the SF 215 and the amount (checks, cash, etc.) received by the bank, the SF 215 must be adjusted by preparing a second SF 215 (subsection 1030.20a) or an SF 5515 (subsection 1030.20b). Please note that the original SF 215 must never be altered.

1030.20a—Positive Adjustments

A positive adjustment is made to an SF 215 when the amount received is MORE than the amount appearing on the SF 215. This deposit increase is treated as a new deposit; the difference is entered by the depositary on a second SF 215. The same symbol and depositor indicated on the original SF 215 (items 3 and 9) must be cited for the adjustment. The “Memorandum,” “Agency,” and “Confirmed” copies of this second SF 215, and an explanation for this action, must be returned to the agency that made the deposit.

1030.20b—Negative Adjustments

A negative adjustment is made when the total amount (checks, cash, etc.) received by a bank is LESS than the amount reported on the SF 215. The depositary makes a negative adjustment by preparing an SF 5515 (Appendix 2) and charging the difference or the amount of the unpaid item against the balance in Treasury’s General Account. No service charges, returned check charges, or non-sufficient fund charges will be entered on the SF 5515.

In order to prepare the SF 5515, the depositary will need the Agency Location Code (ALC) and the address of the depositor. Endorsements on checks deposited should include this information. When this information is on an uncollectible check, the depositary can prepare the SF 5515 without searching for the related SF 215. If the depositor’s ALC or address in the endorsement cannot be read, the depositary can obtain this information from the related SF 215. Since finding an SF 215 can be time-consuming, depositaries will compile a list of regular depositors, showing their ALCs and addresses.

The amount on the SF 5515 will be reported on the current TFS Form 17, under “Abstract of Charges.” The original SF 5515 will be sent to the Reports Control Section with the related TFS Form 17 (Section 1035).

The “Confirmed” and “Memorandum” copies of the SF 5515 and the uncollectible check will be returned to the depositor. If the uncollectible check is not available, the depositor should be given a complete description of the check. Depositaries will retain the “Depositary Copy” of the SF 5515 and a record of the drawer, the drawee bank, and the amount of each unpaid check.

1030.20c—Unpaid or Lost Checks

A negative adjustment is also made when a check that was credited to Treasury’s General Account is not paid for any reason by the bank on which it is drawn, or if the check is lost or destroyed before collection. The depositary prepares an SF 5515 as described in subsection 1030.20b.

1030.30—Processing Treasury Checks

Only certain depositaries are authorized by OTCD to charge Treasury checks. These authorized depositaries may charge only a specific total amount of Treasury checks each day; the amount authorized varies with each depositary. The depositary must process these checks immediately on receipt. The endorsement of each Treasury check charged against Treasury’s General Account will include the following legend: “Pay to the order of the Treasury of the United States. Prior endorsement guaranteed.” The endorsement should also include the date the check is charged in Treasury’s General Account on the TFS Form 17 and your bank’s name and location.

1030.30a—Batching

The paid checks will be grouped in batches of 300 to 400 checks per batch. If the depositary has the capability, all checks should be Magnetic Ink Character Recognition (MICR) encoded (El3B Font). For each batch, the depositary will list the symbol number, serial number, and dollar amount of each check in the batch. If a microfilm record of the checks is kept, the symbol and serial numbers are not required on the batch listing.

The depositary will physically separate each batch of checks by inserting a cardboard document separator or by wrapping the batch total listing around each batch. A summary listing of the total dollar amount of each batch of checks, the depositary’s name and location, and the charge date from the TFS Form 17 should be placed at the front of the first batch of each day’s work. Also, the depositary must include an adding machine tape that lists the total for each batch. The tape total, which is the total of all the batches, should equal the total of the TFS Forms 17 represented.

The paid Treasury checks must be mailed to FRB Richmond (subsection 1030.30c) daily with the TFS Form 5208b.

1030.30b—TFS Form 5208

At the end of each business day, those overseas depositaries that are authorized to charge Treasury checks will prepare the TFS Form 5208 (Symbol 2080-8073) for the total amount of Treasury checks charged that day. This total amount will not exceed the amount specifically authorized. The total amount of the TFS Form 5208a is reported as a single charge on the TFS Form 17 under “Abstract of Charges.” TFS Form 5208b, which must agree with the debit voucher of the form, will be attached to the paid checks at the front of the first batch. The check batches must be mailed with the TFS Form 5208b to FRB Richmond (subsection 1030.30c) at the same time that the TFS Form 5208a and TFS Form 17 are sent to the Reports Control Section (Section 1035). TFS Form 5208b WILL NOT BE REPORTED on the depositary’s TFS Form 17.

1030.30c—TFS Form 5209

FRB Richmond will determine if the check totals are the same amount as shown on the TFS Form 5208b. When the check totals are MORE than the amount on the TFS Form 5208b, FRB Richmond will prepare the TFS Form 5209 (Symbol 2080-8075) and mail the TFS Forms 5209a (debit) and 5209c to the depositary to adjust the error. The depositary will enter the amount from the TFS Form 5209a on the current TFS Form 17 under “Abstract of Charges.”

When the total amount of the checks received is LESS than the TFS Form 5208b amount, FRB Richmond will prepare a TFS Form 5209 and send the TFS Forms 5209b (credit) and 5209d to the depositary to adjust the error. Upon receipt, the depositary will enter the amount from the TFS Form 5209b on the current TFS Form 17 under “Abstract of Receipts.”

When a disagreement arises over the amount shown on the TFS Form 5209 received, the depositary must immediately process the TFS Form 5209b. The depositary must also write within five business days and provide details to support the disagreement to:

 

Federal Reserve Bank of Richmond 
Government Check Division 
Richmond, Virginia 23261

 

1030.40—Reporting the Transfer of Deposits and/or Restorations

If the total amount of the deposits reported on the TFS Form 17 is greater than the amount authorized, the depositary will transfer the difference to Treasury’s General Account at the FRB. Certain depositaries are authorized to request a restoration when Treasury’s General Account has been reduced below the authorized amount.

1030.40a—Transfer of Deposits

At the end of the business day, if the net activity in Treasury’s General Account results in a balance in excess of the authorized amount, the excess amount will be transferred to the applicable FRB. The depositary will transfer the excess funds according to the instructions provided by OTCD.

  • If the depositary has been instructed to wire transfer the amount of an excess in immediately available funds to the FRB, the TFS Form 12 will be completed and reported on TFS Form 17 under “Abstract of Charges.” The TFS Form 12 will be sent to the Reports Control Section with the original of the TFS Form 17. The depositary should retain TFS Form 12d to support the debit on the TFS Form 17. TFS Form 12a and copies 12b and 12c should be discarded since they will not be used in this transaction.
  • If the depositary has been instructed to transfer the excess funds by bank draft, the TFS Form 12 will be completed and reported on TFS Form 17 under “Abstract of Charges.” The TFS Form 12 will be sent to the Reports Control Section with the original of the TFS Form 17. The TFS Form 12a, copies 12b and 12c, and the bank draft will be sent to the applicable FRB. In this instance the TFS Form 12a (credit) is NOT TO BE REPORTED on the TFS Form 17.

1030.40b—Failure to Comply

If excess deposits are not transferred to the credit of Treasury’s General Account at the FRB in immediately available funds on the date the deposit is received, the depositary must make a cash payment of interest for the period of time the U.S. Government was deprived of use of the funds. For commercial branches, interest on this amount is calculated at the U.S. Federal funds rate. For military banking facilities, the interest is calculated at the U.S. Federal funds rate or the negotiated analysis earnings rate on collected balances.

1030.40c—Restoration of Charges

If the agreement between OTCD and the depositary permits, the depositary will follow instructions provided by OTCD and request a restoration of funds when the net activity in Treasury’s General Account reduces the account balance to a position below the authorized amount. A confirmation wire notifying the depositary that the restoration has been accomplished will be sent by:

Monetary Transit Accounts Section 
General Ledger Branch 
Division of Government Accounts and Reports 
Bureau of the Fiscal Service

Department of the Treasury 
GAO Building, Room 1018 
Washington, D.C. 20226


202-566-5482

 

On receipt of the confirmation wire, the depositary will enter the dollar amount from the wire onto a TFS Form 12a and report this same amount on the corresponding day’s TFS Form 17 in the “Abstract of Receipts” section. This document should not be prepared before the confirmation wire is received because the depositary must insure that the amount confirmed in the wire is the same as the amount requested by the depositary. The original of the TFS Form 12a will be sent with TFS Form 17 to the Reports Control Section. The TFS Form 12 and 12b should be discarded since they will not be used in this transaction. The depositary will retain TFS Form 12d for its records.

1030.40d—Improper Wire of Funds

Sometimes a depositary may receive Treasury funds by wire from Treasury or from another financial institution when the depositary did not request the funds. Whenever this happens, the depositary must immediately return the funds by wire to the sender.

Section 1035—Preparation and Submission of TFS Form 17

The overseas depositary will prepare a TFS Form 17 each business day. The TFS Form 17 must be sent to the Reports Control Section on the same day it is prepared. Even when no transactions involving the Treasury’s General Account result during a business day, a TFS Form 17 stating “No Activity” must be prepared and submitted for that day. Only one transcript will be prepared and submitted each business day. Non-four digit symbol checks should be entered individually on the TFS Form 17M. All entries shown on the face of the transcript or on continuation sheets must be supported by attaching the original documents of the applicable Treasury form.

Only original (neither carbon nor photo copy) transcripts and supporting forms will be accepted. Do not send bank documents as support for transactions in the Treasury’s General Account.

Each daily TFS Form 17 and supporting documents relating to a business day’s transactions (except for TFS Form 5208b) will be airmailed no later than the next business day to:

Reports Control Section 
Bureau of the Fiscal Service 
Department of the Treasury

Treasury Annex No. 1 
GAO Building, Room 1415 
Washington, D.C. 20226

 

Each overseas depositary must provide the Reports Control Section with a list of weekdays the bank is normally open for business and a list of all holidays that will be observed during the calendar year. This information must be mailed by January 15 of each year to the Reports Control Section.

Paid Treasury checks and TFS Form 5208b will be sent no later than the next business day to FRB Richmond (subsection 1030.30).

Section 1040—Submission of TFS Form 5907

At the end of each month, the depositary will prepare a TFS Form 5907. This form should be sent to the OTCD.

Section 1045—Reconcilement Letter

The Monetary and Transit Accounts Section will send to each overseas depositary a quarterly letter requesting reconcilement of any outstanding items in the Treasury’s General Account. The depositary is to take immediate remedial action to clear all of the outstanding items shown on the reconcilement letter and to notify Treasury by letter addressed to:

Monetary and Transit Accounts Section 
General Ledger Branch 
Division of Government Accounts and Reports 
Bureau of the Fiscal Service 
Department of the Treasury

Treasury Annex No. 1 
GAO Building, Room 1018 
Washington, D.C. 20226


202-566-5482

 

Section 1050—Lost or Stolen Paid Treasury Checks

If a batch of paid Treasury checks does not arrive at FRB Richmond with the TFS Form 5208b, a telegram is sent to the depositary. If the depositary’s records show that the checks were sent, they may have been lost or stolen in transit.

1050.10—Requesting Check Status Information

For information to determine if paid Treasury checks were lost or stolen in transit, the depositary must submit a copy of each check or, at a minimum, a check description including serial number, symbols, and amount to:

Department of the Treasury 
Bureau of the Fiscal Service 
Division of Check Claims

3201 Pennsy Drive, Building E 
Landover, MD 20785

 

1050.20—Stop Payment

If a depositary is notified that the lost check has not cleared the check payment and reconciliation system (i.e., Treasury has not paid the check), the depositary may request a stop payment by contacting the Outstanding Check Claims Branch (subsection 1050.10). The depositary can request the stop payment and the issue of a substitute check at the same time the check status information is requested. To do this, the depositary must state in the request for check status information that if the checks have not been paid, the depositary should be sent a substitute check.

After determining that the checks have been lost, the depositary must immediately reverse the charge to Treasury’s General Account for these checks, and hold the amount in an internal suspense account. This is done by including, on the current transcript, a TFS Form 5208b, which is identical to the one which accompanied the checks (i.e., same amount and document number).

Section 1055—Bank Contact

The depositary will, in a letter to the Reports Control Section, name a contact person that will represent the depositary. The letter will state the contact’s name, title, address, and telephone number. This letter should be sent with the current TFS Form 17. If the contact person is changed, send the new information to the Reports Control Section (Section 1035).

Section 1060—Corrections of Errors

All erroneous transactions, other than the adjustments described for deposits (subsection 1030.20) and check charges (subsection 1030.30), will be reversed completely. Each reversal form will indicate that it is a reversal and reference the document number, transcript date, and amount of the original transaction.

When there is a difference between agency and depositary reporting of deposits, the depositary will be contacted by the agency. Depositaries must cooperate with agencies in resolving differences in reported deposits for credit in Treasury’s General Account. These differences must be resolved at the earliest possible date. Failure to cooperate with the agency in resolving deposit differences may result in the revocation of the authority of the financial institution to serve as a depositary for agency receipts.

Section 1065—Retention

Depositaries are required to retain copies of daily transcripts and supporting documents for a period of 3 years.

Section 1070—Procurement of Forms

The depositary may obtain Treasury forms by writing to:

Manager, Supply & Property Management Branch 
Division of Facilities Management 
Bureau of the Fiscal Service

Department of the Treasury 
Franklin and Union Streets 
Ford Plant, Building #12 
Alexandria, Virginia 22314


202-566-7492

 

Contact Details

Direct inquiries concerning this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Over the Counter Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-5202

 

Securing Government Funds on Deposit with a Depository

Introduction

This chapter prescribes depositary requirements for securing federal agency funds on deposit.

Section 1010—Scope and Applicability

When a federal agency places funds on deposit with a financial institution, the financial institution must pledge collateral under conditions described 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.

Section 1015—Authority

See, inter alia, 12 U.S.C. 90, 265, 266, and 1789a; 31 U.S.C. 321 and 3303; and 31 CFR 202 and 380.

Section 1025—Responsibilities for Public Money

Treasury’s 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 and related collateral guidance are referenced in 31 CFR Part 202 and 31 CFR Part 380. The TFM provides more detailed policy guidance and detailed procedures that agencies, depositaries, and FRBs must follow to ensure the funds are secured. Each agency 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.

1025.10—Depositaries

Depositaries must:

  • complete FS Form 5902: Resolution Authorizing Execution of Depositary, Financial Agency, and Collateral Agreement; and FS Form 5903: Depositary, Financial Agency, and Collateral Agreement (see Section 1030) 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 and make such substitutions or additions as needed. See the TreasuryDirect website,
  • provide agencies and FRBs with requested information, and
  • advise agencies when the depositary is not able or willing to pledge collateral.

1025.20—FRBs

All FRBs must secure pledged collateral to protect public funds.

1025.30—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 and FS Form 5903,
  • maintain a current list of collateral contacts,
  • make available the FRB Security Account Holdings Report and the Collateral Monitoring Recap Report to agencies on a monthly basis through TCMM system,
  • make available the Collateral Monitoring Recap Report to depositaries on a monthly basis through TCMM system,
  • open collateral accounts in NBES, CMS, and TCMM system, and
  • value collateral.

1025.40—Agencies

Each agency must:

  • establish a TCMM account and V account by completing the TCMM Agency Access Form available on Treasury Collateral Management and Monitoring website,
  • 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 agency 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 agency procedures,
  • ensure that TCMM system 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. See 12 CFR Part 330 (Deposit Insurance Coverage), and
  • monitor agency collateral records by reviewing the monthly FRB Security Account Holdings Report and the Collateral Monitoring Recap Report. Both reports are available in the TCMM application.

1025.50—Fiscal Service

The role of Fiscal Service is to:

  • assign and maintain V account numbers and provide agency information to the FRB so that the FRB may establish accounts,
  • establish collateral policy,
  • establish and maintain lists of acceptable collateral and assigned margins. See the TreasuryDirect website, and
  • periodically update the criteria and guidance for acceptable collateral and applicable margins. See the TreasuryDirect website.
Section 1030—Financial Institution Agreement

To accept deposits of public money, a financial institution must be designated by Treasury as a depositary and financial agent of the federal government under 31 CFR Part 202. Before accepting deposits in excess of the recognized insurance coverage, each depositary must complete FS Form 5902 and FS Form 5903.

When a financial institution contacts the TCMM Operations Team about pledging collateral to secure agency deposits, the TCMM Operations Team ensures it has a completed FS Form 5902 and FS Form 5903 on file from the financial institution. If it does not, the TCMM Operations Team sends those forms to the financial institution along with a cover letter and a copy of 31 CFR 202 and 380.

The financial institution must complete and return the forms to the TCMM Operations Team before a collateral account is established or securities are deposited. The depositary should not hold any funds not protected by recognized insurance coverage or collateral pledged as a surety. The TCMM Operations Team maintains all pledging documentation. This includes the FS Form 5902 and FS Form 5903 and any other pertinent collateral transaction documents.

Section 1035—Acceptable Collateral

Unless otherwise specified by the Secretary of the Treasury, depositaries may pledge collateral in the form of transferable securities of any of the acceptable classes as noted in Fiscal Service guidance. The FRB accepts collateral at values (mark to market) it assigns. See the TreasuryDirect website.

Securities not negotiable without endorsement or assignment are acceptable if the depositary either places its unqualified endorsement on each security or furnishes an appropriate resolution and irrevocable power of attorney authorizing the FRB to assign the securities.

Section 1040—Receiving Collateral

If an agency expects its account balance to exceed the recognized deposit insurance limit, it must set the new amount to be collateralized in TCMM system to ensure effective monitoring of collateral. As long as a depositary supplies the V account number and has completed FS Form 5902 and FS Form 5903, the TCMM Operations Team must accept the pledge of acceptable collateral.

When the TCMM Operations Team receives pledging instructions from the depositary, it must determine if the agency has been assigned a V account number. If not, the TCMM Operations Team must advise the agency to contact Fiscal Service for an account number assignment. If the depositary has not previously pledged securities to an agency, it must complete the FS Form 5902 and FS Form 5903. The TCMM Operations Team sends these forms to the depositary (see Section 1030). The TCMM Operations Team also determines if the securities pledged are acceptable as collateral (see Section 1035). All district FRBs deposit the securities into the depositary’s safekeeping account pledged to the agency.

The FRB may receive a deposit of securities from an off-line depositary without prior receipt instructions. In this case, the securities operations staff at the district FRB should not reverse the deposit automatically but should contact the depositary to determine the proper disposition of the deposit of securities.

Section 1045—Excess Collateral

A depositary must pledge all collateral to a specific agency V account. If a depositary pledges collateral in excess of the requested amount, the entire pledge is applied to the indicated agency account. For example, Agency “X” requests a pledge of $103,000. The depositary chooses to pledge $105,000 because of the profile of its securities portfolio. Agency “X” is credited with the entire $105,000 pledge, not just the $103,000 requested. The depositary may not pledge the excess $2,000 to agency “Y”. The depositary must pledge additional, separate securities to satisfy agency “Y’s” collateral requirement.

Section 1050—Maturing Securities

The TCMM Operations Team monitors agency V accounts to identify maturing securities. Because most of the pledged securities are made in book-entry form, the FRB must have procedures in place to prevent under-collateralization of the agency account. This could result from either the redemption or payment of pledged securities. In this case, the FRB sends a report notifying each depositary of its upcoming maturing securities. Depending on the circumstances, the TCMM Operations Team must take the actions discussed below.

1050.10—Substitution Required

If the TCMM Operations Team determines that a depositary’s collateral account must remain at the current level, the FRB contacts the depositary at least 10 business days before the maturity date of the current pledged securities. The FRB report instructs the depositary in substituting collateral. If the depositary does not substitute new collateral one business day before the maturation/redemption date, the TCMM Operations Team calls the depositary to discuss the need for additional collateral or the withholding of proceeds.

1050.20—Substitution Not Required

If the collateral amount can be reduced without under-collateralizing the V account, the TCMM Operations Team releases the collateral.

1050.30—Substitution Required but Not Received

Book-entry securities must be redeemed and paid on their maturity date. However, the TCMM Operations Team withholds payment if it does not receive a collateral substitution from a depositary on time. The TCMM Operations Team holds redemption proceeds in a general ledger account until the depositary deposits substitute collateral into the account pledged to the agency, or until the agency lowers the amount to be collateralized.

Section 1055—Depositary Mergers

It is important that agency and TCMM Operations Team collateral records correctly reflect the outcome of depositary mergers. This ensures that collateral deficiencies do not develop. When an agency maintains accounts with two depositaries, each account is separately insured by recognized deposit insurance. If two depositaries serving the same agency merge, the surviving depositary may need to pledge additional collateral to replace the insurance coverage lost because of the merger.

Section 1060—Availability of Monthly Reports

TCMM Operations Team provides the FRB Security Account Holdings Report and the Collateral Monitoring Recap Report monthly. Agencies and depositaries use these reports to ensure that their deposits are adequately protected and to evaluate whether any changes are needed to their amounts to be collateralized.

Section 1065—Handling Collateral Pledged by an Insolvent Depositary

If a depositary that has pledged collateral to an agency becomes insolvent, the TCMM Operations Team should refer to Volume II, Part 8, Chapter 3000, for guidance. Neither the TCMM Operations Team nor the agency can authorize the release of collateral in the event of a depositary’s insolvency. Only Fiscal Service can instruct the TCMM Operations Team to release collateral held under 31 CFR 202 for an insolvent depositary.

Detailed Contacts

Direct inquiries concerning this chapter to:

Department of the Treasury 
Bureau of the Fiscal Service 
Bank Policy and Oversight Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-8471 

 

Contact the TCMM Operations Team at:

TCMM Treasury Support Center 
Federal Reserve Bank of St. Louis

1421 Dr. Martin Luther King Drive 
St. Louis, MO 63016-3716


888-568-7343, option 2 
866-707-6574

 

For information describing acceptable collateral and its valuation, see the TreasuryDirect website.

For information on collateral policy, see the Treasury Collateral Management and Monitoring website.

Electronic Federal Tax Collections

Introduction

This chapter guides financial institutions that process Federal tax collections using the Electronic Federal Tax Payment System (EFTPS) and the Federal Tax Application (FTA).

Section 2010—Scope and Applicability

This chapter prescribes the guidance for using EFTPS and FTA to report Federal tax payments and deposits to the Federal Government.

Section 2015—Authority

Title 31 CFR 203.

Section 2025—EFTPS and FTA

EFTPS and FTA enable taxpayers to report Federal tax payments and deposits to the federal government using electronic reporting methods. Using these programs, taxpayers may transfer their payments or deposits using certain electronic funds transfer (EFT) technologies.

2025.10—Role of Financial Institution

Financial institutions have an integral role in the tax collection process. With EFTPS, a financial institution chooses the extent to which it will service its customer's Federal tax payment needs.

Financial institutions may provide the following electronic services to meet their customers' Federal tax payment needs:

  • Receive ACH debit entries and post the entries to the customer's account,
  • Originate ACH credit entries, at the direction of its customers, to Treasury's account, and
  • Originate same-day payment transactions, at the direction of its customers, to Treasury's account.

For Internal Revenue Service (IRS) audit purposes, a taxpayer may seek proof of a timely funds transfer from its financial institution. If requested by the taxpayer, financial institutions must provide information such as:

  • Transaction trace number, and
  • Input message accountability data (IMAD) number.

To further assist customers, financial institutions should use the term "USATAXPYMT" or otherwise clearly identify EFTPS payments on customer account activity statements.

2025.20—EFTPS Functions

EFTPS does the following:

  • Operates the ACH debit reporting mechanisms [touch-tone phone, EFTPS Online (https://www.eftps.gov), Batch Provider software, and Bulk Provider files],
  • Provides taxpayers with an EFT number that identifies the payment record in EFTPS,
  • Originates and delivers ACH debit files to the ACH operator,
  • Receives same-day Fedwire files from FTA,
  • Receives ACH credit files from the ACH operator,
  • Validates tax payment detail information and transmits it to the IRS,
  • Balances and reconciles EFTPS transactions,
  • Responds to taxpayer and financial institution questions through the EFTPS Customer Service Center, and
  • Settles ACH Debit payments same day or next day, depending on same day ACH eligibility.

2025.30—FTA Functions

The FTA provides a same-day payment mechanism that works in conjunction with EFTPS. The FTA uses the Fedwire funds transfer system for same-day payments. FTA does the following:

  • Validates tax payment information and transmits it to the IRS via EFTPS,
  • Assigns an EFT number to accepted transactions,
  • Balances and reconciles transactions received, and
  • Responds to IRS, financial institution, depositary, and taxpayer inquiries regarding same-day tax transactions through the FTA Customer Service Unit.
Section 2030—EFTPS Enrollment Processing

Treasury requires that all EFTPS taxpayers enroll with EFTPS before making an electronic Federal tax payment via ACH debit or credit.

Taxpayers who change financial institutions, or who change their accounts within a financial institution, may edit their banking information with EFTPS. This may be accomplished by touch-tone phone or EFTPS Online at https://www.eftps.gov.

2030.10—Enrollment Form Availability

Taxpayers may obtain enrollment forms by calling 1-800-TAX-FORM (1-800-829-3676), or by enrolling online at https://www.eftps.gov.

2030.20—Financial Institution Enrollment Responsibilities

At the request of a taxpayer that selected ACH debit as a funds transfer method, a financial institution must verify the accuracy of the financial institution's routing transit number (RTN) and the taxpayer account number and account type indicated on the enrollment form. The taxpayer must ensure the completed enrollment form gets to the EFTPS enrollment processing center. The financial institution may offer this delivery service to its customers.

Section 2035—Conditions for Making a Payment

A financial institution may establish conditions the taxpayer must satisfy before it will effect the electronic tax transaction. For example, a financial institution may specify a cutoff time for receipt of a customer's Federal tax payment instructions. If conditions are not satisfied, the financial institution may return an ACH debit entry and/or refuse to originate an ACH credit entry or a same-day tax payment.

2035.10—Risk

There are operating risks for financial institutions that process payments and deposits using ACH credit and same-day payment and deposit methods. For example, Treasury may assess a financial institution interest for an incorrect ACH credit entry or same-day payment (see Section 2050). The financial institution does not encounter these risks with ACH debit transactions. The financial institution should establish guidelines consistent with the level of risk it is willing to assume.

2035.20—Guidelines

A financial institution should publish, or otherwise make available to its customers, the guidelines it uses when originating ACH credits and/or same-day Federal tax payments. At a minimum, these guidelines should identify the following:

  • How taxpayers should deliver Federal tax payment instructions to the financial institution for processing,
  • When taxpayers must deliver the Federal tax payment instructions (daily cutoff times),
  • How and when the financial institution will notify the customer of the success or failure of the transactions, and
  • How and when the financial institution will deliver the ACH transaction trace number, EFTPS EFT reference number, and/or Fedwire® IMAD number to the customer.
Section 2040—Electronic Future-Day Federal Tax Payment Mechanisms (ACH Debit and ACH Credit)

EFTPS supports two future-day payment mechanisms: ACH debit and ACH credit. Any financial institution capable of originating and/or receiving ACH transactions, itself or through a correspondent, may offer these services to its taxpaying customers.

2040.10—ACH Debit

For ACH debit payments, the taxpayer or the taxpayer's agent reports the Federal tax payment information to EFTPS using one of the available EFTPS reporting methods. EFTPS conducts online, real-time editing and validation of the Federal tax payment information. It issues the taxpayer an acknowledgment or EFT number to confirm a timely deposit report. EFTPS originates the ACH debit entry to the taxpayer's account for same-day settlement or 1 business day prior to the settlement date designated by the taxpayer for next day settlement.

2040.10a—RDFI Responsibilities

An RDFI does the following:

  • Validates ACH entries,
  • Returns entries that were not posted within a timely manner, and
  • Originates NOC entries in a timely manner as appropriate.

An RDFI also uses an NOC when a merger results in changes to the financial institution's RTN and/or the customer account number or type of account.

ACH debit, through EFTPS, offers taxpayers a warehousing capability. Warehousing provides taxpayers the ability to schedule, as soon as the amount is known, future deposits or payments for settlement on the due dates. This feature eliminates the taxpayer burden of remembering to initiate a deposit 1 business day before the tax due date. Using this warehousing capability, business and individual taxpayers may schedule a future-day settlement up to 365 calendar days in advance. Taxpayers are encouraged to use the warehousing capability of EFTPS whenever possible.

2040.10b—ACH Debit Corrections

Consistent with standard ACH rules and guidelines, EFTPS or RDFIs may take the following actions:

  • Returns—An RDFI may return an ACH debit entry. It must originate the return in a timely manner and indicate the appropriate return reason code,
  • Dishonored Returns—EFTPS may dishonor a return entry, and
  • Contested Dishonored Returns—The RDFI may originate contested dishonored return entries.

2040.10c—Tax Payment Identification

The RDFI should identify Federal tax payments on a customer's statement. For example, the RDFI may use the term, "USATAXPYMT," available in field 7 (company entry description field) of the ACH company batch header record.

2040.20—ACH Credit

For ACH credit payments, the taxpayer's financial institution originates an ACH credit entry to Treasury's account at an FRB. The ACH credit addenda record contains the Federal tax payment detail. The FRB transmits the payment detail to EFTPS for validation and transmission to IRS.

2040.20a—ACH Credit Prenotification Process

During the ACH credit prenotification process, ensure that the guidance provided below is followed.

Zero-Dollar Entry with Tax Payment (TXP) Addenda Record or Prenotification Entry with TXP Addenda Record—At the taxpayer's request, a financial institution originates either:

  • A zero-dollar entry with TXP addenda record at least 2 business days prior to the live ACH credit entry, or
  • A prenotification entry with TXP addenda records to Treasury's account at least 6 business days prior to origination of the first live ACH credit entry.

The EFTPS's account information includes:

  • RDFI: Federal Reserve Bank Atlanta, GA,
  • RTN: 061036000,
  • Account number: 23401009, and
  • Account name: Treasury General Account (TGA).

Return of a Zero-Dollar or Prenotification Entry—EFTPS reviews all zero-dollar and prenotification entries. If the entries contain incorrect taxpayer information (for example, the TIN in the entry detail record is missing or invalid) or if the taxpayer is not enrolled in EFTPS, then EFTPS returns the entry to the ODFI. EFTPS must return the zero-dollar entry, so it is available to the ODFI no later than the opening of business on the 2nd business day following the settlement date of the original zero-dollar entry. EFTPS must return the prenotification entry, so it is available to the ODFI no later than opening of business on the 6th business day following the settlement date of the original prenotification entry.

The taxpayer's financial institution carefully reviews and makes any necessary corrections to the information before originating another zero-dollar or prenotification entry. The financial institution may contact the EFTPS TFA help line for assistance. The EFTPS help line number for financial institutions is 1-800-605-9876.

Failure To Originate a Zero-Dollar or Prenotification Entry—Treasury may assess interest to a financial institution that fails to originate a zero-dollar or prenotification entry at a taxpayer's request, causing a future ACH credit entry to be returned. Refer to Section 2050 for interest calculation information.

ODFI Responsibilities for Originating an EFTPS ACH Credit—An ODFI must originate ACH credit entries at least 1 business day prior to the date the taxpayer requires the payment to settle. It originates the payment using the cash concentration or disbursement ACH format with TXP addenda record (CCD+TXP) banking convention to the appropriate Treasury RTN and account number.

Tax Payment Identification—The ODFI should identify Federal tax payments on a customer's statement. For example, the ODFI may use the term, "USATAXPYMT," available in field 7 (company entry description field) of the ACH company batch header record.

ACH Credit Corrections—Consistent with ACH rules and guidelines, the following ACH credit corrections are permitted:

  • Reversals—An ODFI may initiate an ACH credit reversal for a duplicate or erroneous file or entry. A reversal of a federal tax payment may subject the taxpayer to an IRS late payment penalty. Therefore, the ODFI should use caution when processing a reversal for a federal tax payment. It does not need IRS approval prior to originating an ACH credit reversal,
  • Returns—EFTPS may return an ACH credit entry if it is unable to identify the entry as a federal tax payment or if the TIN is invalid. A financial institution must notify its customers in a timely manner of any failed transaction,
  • Dishonored Returns—The ODFI may dishonor an ACH credit return, and
  • Contested Dishonored Returns—EFTPS may contest a dishonored return.

Notification of Change—EFTPS may originate NOC entries, when needed.

Section 2045—Electronic Same-Day Federal Tax Payment Mechanism

FTA provides electronic same-day payment for the deposit and payment of Federal taxes via Fedwire® value (Type code 1000) transfer.

The Fedwire® application has a preformatted screen for entering taxpayer detail, via FedLine Advantage®, containing built-in edits for tax information.

Financial institutions may obtain detailed information on format, reversal procedures, adjustments, and interface with the investment program from the FTA Customer Service Unit (1-800-382-0045). The Financial Institution Handbook at https://www.eftps.gov also provides formatting information.

2045.10—Deadline for Transmission of Same-Day Federal Tax Payments

A financial institution must send same-day Federal tax payments so that FTA receives them no later than 5 p.m. eastern time (ET). FTA will return deposits received after 5 p.m. to the originator. The taxpayer or the financial institution may be assessed a late fee for returned tax payments if it results in tax payments not made in a timely manner.

2045.20—Fedwire® Value (Type code 1000) Transfer Settlement

Fedwire® value tax payments settle immediately in the Fedwire® system. It debits the financial institution's reserve account and credits Treasury's account the day of the transfer.

2045.30—Fedwire® Value (Type code 1000) Transfer Format

The Fedwire® value tax payment uses a specific format and a customer transfer (CTR) product code. Refer to the Financial Institution Handbook at https://www.eftps.gov or contact the FTA Customer Service Unit at 1-800-382-0045.

2045.40—Correction of Erroneous Entries Before the 5 p.m. ET Cutoff on Settlement Day

A financial institution may correct erroneous same-day Federal tax payments by reversing the entire erroneous transaction and, if applicable, initiating a corrected transaction before 5 p.m. ET on the settlement date. Financial institutions should send a Fedwire Request for Reversal (Type code 1001) to request that the FTA return the erroneous Fedwire. The reversal must be for the total dollar amount of the original transaction. Contact the FTA Customer Support Unit at 1-800-382-0045 or refer to the Financial Institution Handbook at https://www.eftps.gov for additional information.

If a financial institution requests a reversal of a Fedwire® transfer before the 5 p.m. ET cutoff, the FTA will return the funds to the originating institution. If applicable, the financial institution should initiate a corrected Fedwire® value payment before the 5 p.m. ET cutoff.

Financial institutions can reverse transactions up to 5 business days following the date of the original transaction. Financial institutions should send a Fedwire Request for Reversal of a Prior Day Transfer (Typecode 1007). Reversal requests beyond 5 business days should be made to the IRS.

2045.50—Correction of Erroneous Entries After 5p.m. ET on Settlement Day

Financial institutions direct requests for adjustments made the same day but after the 5 p.m. ET cutoff to the FTA Customer Support Unit at 1-800-382-0045 as soon as possible. They should provide an explanation of the error and request an adjustment.

2045.60—Rejection of Same-Day Federal Tax Payment

The FTA may reject a same-day Federal tax payment for the following reasons:

  • The payment was initiated after 5 p.m. ET,
  • The payment did not conform to the IRS edit and format requirements, and
  • IRS may refund the taxpayer due to an overpayment.

The financial institution must notify its customers in a timely manner of a rejection or reversal that results in a deposit or payment not settling on the taxpayer's requested settlement date.

Section 2050—Interest Assessment for the Improper Processing of Electronic Federal Tax Payments

2050.10—Computation and Basis of Penalties for Improper Processing of EFT Payments

Treasury may charge a financial institution for the value of delayed Federal tax payments. It may assess this charge if the taxpayer meets the financial institution's conditions for making an EFTPS deposit or payment (Sections 2030 and 2035), and the financial institution fails to process the payment properly. Treasury assesses interest from the date the Federal tax payment should have settled to the TGA to the date the payment actually settled to the TGA. Treasury assesses a financial institution interest to recoup the earnings value of funds lost. It computes the penalty using the interest rate factor for penalties under EFTPS.

Treasury assesses interest from the day the taxpayer specified settlement to Treasury until receipt of the payment by Treasury. It determines the assessed interest by multiplying the total delay in 1-day funds by the daily interest rate factor for penalties (under EFTPS). The daily interest rate factor for the penalty is the Federal Reserve Federal Funds daily effective rate minus 25 basis points. If the subtraction of 25 basis points from the Federal Reserve Federal Funds daily effective rate results in a negative rate, the penalty rate (and the penalty) will be zero.

Treasury will debit the financial institution's reserve account, or the account of its designated correspondent, for the amount of the penalty.

2050.20—Financial Institution Limitation of Liability

Financial institution liability is subject to the following limitations:

  • Interest is limited to no more than 7 calendar days for ACH debit transactions, and
  • Interest is limited to no more than 45 calendar days for ACH credit and same-day transactions.

The limitation of liability applies only to any interest assessment in which there is unauthorized use, indication of fraud, presentment of a false claim, or misrepresentation or embezzlement on the part of the financial institution or any of its employees or agents.

2050.30—Unauthorized ACH Entries to the TGA

A financial institution must not originate an ACH entry that results in an unauthorized debit to the TGA.

2050.40—Computation and Basis of Charges for Unauthorized ACH Entries to the TGA

A financial institution that originates an unauthorized ACH entry to debit the TGA is liable for the amount of the transaction and charges. Treasury determines the interest charge by multiplying the amount of the unauthorized entry for each calendar day by the daily interest rate factor that is defined in subsection 2050.10. It calculates the interest charge from the date the TGA was debited to the date the TGA was credited.

According to 31 CFR 210.8(b)(1) (Federal Government Participation in the Automated Clearing House), there is no limitation of liability, either time or amount, for unauthorized ACH entries to the TGA. This does not preclude any other sanctions.

Treasury will debit the financial institution's reserve account, or the account of its designated correspondent, for the amount of the charge.

2050.50—Appeal Process for Penalties

A financial institution may appeal any penalty or charge imposed under Section 2050 by contacting the Fiscal Service Tax Collection Division (see Contacts specific contact information).

The Director of the Fiscal Service Tax Collection Division will issue decisions on appeals (via email or postal mail) within 45 calendar days of notification. The Director, however, may unilaterally extend the deadline for issuing a decision by providing the financial institution with written notice of the extension that includes an anticipated final ruling date. The Director's decision, whether issued within the 45-day timeframe or at the end of an extension period, is final.

If an over recovery or under recovery of the assessment or charge occurs, then Treasury will reimburse the financial institution by instructing the FRB to credit or debit the reserve or clearing account of the financial institution, or the account of its designated correspondent, as appropriate.

Contact Details

Direct inquiries concerning this chapter and appeals for penalties to:

Department of the Treasury 
Bureau of the Fiscal Service 
Tax Collection Division

3201 Pennsy Drive, Building E 
Landover, MD 20785


202-874-5321