Compliance Reviews

Disbursing Compliance Reviews

Compliance Reviews for Federal Entity Disbursements

Compliance With Executive Order 13224, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten To Commit, or Support Terrorism

Executive Order 13224 prohibits transactions with persons who commit, threaten to commit, or support terrorism. OFAC maintains the Specially Designated Nationals (SDN) and Blocked Persons list, which provides a list of individuals and entities covered by Executive Order 13224. The SDN and Blocked Persons list also includes the additional restrictions found in the Foreign Assets Control regulations at 31 CFR Chapter V.

Federal entities must not make or certify payments or draw checks or warrants payable to an individual or organization listed on the SDN and Blocked Persons list. Federal entities should consult the SDN and Blocked Persons list before making payments.

Direct questions concerning Executive Order 13224 or the SDN and Blocked Persons list to OFAC. See the contact information on the Department of the Treasury, Office of Foreign Assets Control website or call 202-622-2490.

Benefit Recipient Compliance

Benefit federal entities should be aware that individual check recipients who fail to call Treasury as required under this section are contacted by Treasury within three to six months of their initial federal payment and may be automatically enrolled to receive their federal payments to a Treasury-sponsored account. Federal entities must ensure that any offices processing federal payments have the appropriate systems, procedures, and accesses in place to change the recipient’s payment election from check to a Treasury-sponsored account, upon request.

Federal Entity Compliance

Treasury monitors the percentage of federal entity payments made electronically on a monthly basis to ensure that federal entities are implementing the provisions of 31 CFR Part 208 and this chapter. Treasury meets with federal entities exhibiting low EFT rates to identify the impediments to EFT payments, and to determine strategies to address these impediments. federal entities should document any impediments they experience making their payments by EFT to assist Treasury with this analysis.

For more information on Overall Disbursing Requirements for Federal Entities see TFX Payee Setup and Maintenance or TFM Volume I, Part 4a, Chapter 2000; Overall Disbursing Rules for All Federal Agencies

Compliance Requirements for Non-Treasury Disbursing Officers (NTDO)

Reporting Daily Disbursement Forecasts By NTDOs

All NTDOs must report to Fiscal Service on a daily basis, its anticipated aggregate level of planned disbursements for each disbursing method [for example, wire, Automated Clearing House (ACH), or check] for the following five day period. These reports are due to Treasury each business day by 3 p.m. Eastern Time (ET). Each entity that performs its own disbursing should submit one consolidated report each day business day. Fiscal Service has prepared a template to standardize the reporting of this information: Non-Treasury Disbursing Office Reporting.

The Policy and Oversight Division (POD) of Fiscal Service will review NTDO compliance and will report to NTDOs on the status of their compliance. POD will provide assistance to NTDOs not in compliance or those requesting assistance with proper reporting.

Review and Self-Certification Reporting Requirements

Every two years, a federal entity with delegated disbursing authority must conduct a review of its disbursing operations to ensure compliance with:

requirements set out in any applicable Delegation of Disbursing Authority Document executed in accordance with subsection 4050.20

pertinent statutory, regulatory, and TFM requirements

Federal Managers’ Financial Integrity Act of 1982 (FMFIA), Public Law No. 97-255 (31 U.S.C. § 3512)

Federal Financial Management Improvement Act of 1996 (FFMIA), 31 U.S.C. § 3512, note.

Following such reviews, federal entities must submit a self-certification and questionnaire response to Fiscal Service stating whether or not they comply with these requirements. Fiscal Service advises federal entities of the due date of these responses and provides them with the self-certification language to be included in the response. To the extent that a federal entity cannot certify that it complies with a specific requirement, the self-certification must document the federal entity’s planned corrective action to achieve compliance within an identified time frame.

The self-certification focuses solely on FMFIA, Section 2 reports (internal controls) and Section 4 reports (financial management systems). See 31 U.S.C. § 3512(d)(2) and (d)(2)(B); also see OMB Circular Nos. A-123 and A-127 for further information on Section 2 and Section 4 requirements. Specifically, a federal entity must self-certify that its Section 2 and Section 4 reports provide reasonable assurance that the federal entity is in compliance with FMFIA, Section 2 and Section 4 requirements. To the extent that a federal entity self-certifies “noncompliance” or “qualified assurance” with Section 2 and Section 4 requirements, it must identify all material weaknesses and corrective action plans to achieve compliance within an identified time frame.

Section 803(a), which requires each federal entity to “implement and maintain financial management systems that comply substantially with federal financial management systems requirements.” Specifically, the federal entity must certify that it complies with FFMIA, Section 803(a) requirements, if applicable, and that this determination has been verified by independent audit, as referenced under FFMIA, Section 803(b). See 31 U.S.C. § 3512, note. To the extent that a federal entity self-certifies “noncompliance” with Section 803(a), it must identify “resources, remedies, and intermediate target dates necessary to bring the federal entity’s financial management systems into substantial compliance” with Section 803(a). See FFMIA, Section 803(c)(3) discussing the requirement for a remediation plan to achieve compliance.

The self-certification allows a federal entity to provide information on corrective or remediation plans, if necessary. Fiscal Service provides guidance to federal entities on format and procedures for submitting the federal entity self-certification and questionnaire response in the Federal Entity Self-Certification Guide and Questionnaire.

Risk Assessment

When a federal entity’s self-certification indicates the federal entity is not in compliance with one or more stated requirements, Fiscal Service, in its sole discretion, may determine it is necessary that a risk assessment of the federal entity’s disbursing system be conducted. In making such a determination, Fiscal Service may consider such factors as the status and utility of the corrective and remedial plans identified by the federal entity to achieve compliance. The risk assessment is intended to evaluate, among other things, federal entity-identified deficiencies or material weaknesses in financial management systems, operations, and accounting and reconciliation procedures that may adversely affect the federal entity’s disbursing performance. The federal entity develops, and submits to Fiscal Service, a plan for conducting the risk assessment. The plan must identify the party who will conduct the assessment. Risk assessments are conducted in accordance with Fiscal Service’s risk assessment guide or another guide that meets Treasury’s standards and is approved by Fiscal Service. At Fiscal Service’s discretion, federal entities must provide Fiscal Service with a copy of their FMFIA, Section 2 and Section 4 reports; FFMIA, Section 803(a) reports; and other audit information as part of any risk assessment.

For more information on requirements for Non-Treasury Disbursing Officers (NTDOs), visit TFX Scheduling Payments or TFM Volume I, Part 4a, Chapter 4000.

Requirements for Debit and Credit Card Transaction Compliance

Agency Compliance

The Financial Agent, either itself or through its merchant acquirer or processor, will reject any Card transactions that would cause the total charge to exceed the individual transaction maximum dollar amount. Agencies are responsible for working with their customers that are splitting transactions to avoid violation of compliance with Fiscal Service maximum transaction dollar amount.

Fiscal Service and its Financial Agent will monitor agency compliance with the prohibition on splitting transactions. Fiscal Service and its Financial Agent may provide assistance to agencies not in compliance or that request guidance.

Agencies should contact Fiscal Service’s Card Acquiring Service (CAS) at CardAcquringService@fiscal.treasury.gov if assistance is needed to comply with this Section 7045.

Disability Compliance

Agencies must comply with Section 508 of the Rehabilitation Act of 1973. Under Section 508 (29 U.S.C. 794d), agencies must give disabled employees and members of the public access to information that is comparable to the access available to others.

Section 508 covers the physical device or product used to gain authorizations, including internet, software gateways, terminal locations, and all equipment associated with providing the convenience of Card payment processing.

For more information about credit and debit card collection transactions and the requirements, visit TFX Electronic Deposits or TFM Volume I, Part 5, Chapter 7000.

Federal Financial Management Standards

Functions and Activities

Internal Control/ Compliance Reviews (FFM.110.050)

Implement standard internal control and compliance assurance procedures;

Provide documentation to satisfy “Prepared By Client” requests from auditors; Prepare cycle memos;

Provide sample information and documentation for compliance with other guidance, such as OMB Circular A-123;

Record adjustments based on audit findings

Federal Financial Management System Requirements (FFMSR)

Verifying Traceability (2.3.2)

Verify that GL account balances can be traced to aggregated or discrete transactions in agency programmatic systems and that the aggregated or discrete transactions can be traced to the point of entry and source documents consistent with the TFM.

Verify that financial statements and other required financial and budget reports can be traced to GL account balances as required by OMB Circular No. A-123 and as specified in the TFM.

Use Cases

Procure to Pay

Treasury Financial Manual (TFM)

TFM Volume I, Part 4a, Chapter 2000; Overall Disbursing Rules for All Federal Agencies

TFM Volume I, Part 4a Chapter 4000; Requirements for Non-Treasury Disbursing Officers (NTDOs)

TFM Volume I, Part 5, Chapter 7000; Credit and Debit Card Collection Transactions

Contact Information

Contact Details

Direct inquiries concerning disbursing rules for federal entities and Non-Treasury Disbursing Officer (NTDO) requirements to:

Bureau of the Fiscal Service
Payment Management

3201 Pennsy Drive, Building E
Landover, MD 20785

202-874-9880

or

Department of the Treasury
Bureau of the Fiscal Service
Chief Disbursing Officer

3201 Pennsy Drive, Building E
Landover, MD 20785

202-874-6790

Direct inquiries regarding debit and credit card transactions to:

Department of the Treasury
Bureau of the Fiscal Service
Settlement Services Division

3201 Pennsy Drive, Building E
Landover, MD 20785

CardAcquiringService@fiscal.treasury.gov