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.

Section 4025.10—Processing Payments Under Government Fiscal Crisis

In the event of a government budget year transition or debt ceiling constraint, Treasury will invoke rules for the processing of payments that flow through the Federal Reserve Banks (FRBs) and thus the debiting of the U.S. Treasury’s General Account (TGA).

Under a government budget year transition or debt ceiling constraint, NTDOs disbursing ACH payments must:

• send files to FRB ACH one business day before payment date for "next day" payment scheduling. This means that no government payments will be processed with an effective payment date beyond the next business day.
• segregate its originated ACH files into credit only and debit only files.
• complete ACH file transmissions by 3:00 p.m. ET to ensure files have been properly positioned at FedACH.
• send an informational spreadsheet of its ACH files to NTDOstatus2@fiscal.treasury.gov by 3:30 p.m. ET.

Under a government budget year transition or debt ceiling constraint, Treasury may take the following actions:

• Purge a file. If Treasury does not instruct the FRB to release the file at the end of 25 business days, then the file may be purged. If a file is purged, the NTDO must have the ability to resubmit or to create a new payment file.
• Disable Fedwire capabilities. Treasury may instruct the Federal Reserve Bank to disable Fedwire capabilities for NTDOs depending on the available balances in the TGA. Treasury will work with NTDOs and the Federal Reserve Bank regarding issuance of Fedwire payments.
• Require informational spreadsheets be sent for daily check payments.
• Instruct NTDOs who issue Treasury checks to hold all Treasury checks from being released and to start sending informational spreadsheets of their daily Treasury check payments to NTDOstatus2@fiscal.treasury.gov by 3:00 p.m. ET.

Section 4025.20—Processing Payments at Fiscal Budget Year-End

At the end of a Federal Fiscal year, Non-Treasury Disbursing Offices (NTDOs) must ensure that their payments are processed in time to settle with the Treasury General Account (TGA) before the commencement of the next budget cycle.

NTDOs are prohibited from using Same Day ACH, and therefore must always submit their ACH payments at least one business day in advance of settlement. As a result, NTDOs must submit their ACH payments no later than September 29^th in order to ensure that the payments settle at the TGA by September 30^th. If September 30^th lands on a Saturday or Sunday, NTDOs must submit their payments by the last Thursday before September 29th in order for them to settle on that Friday, the last business day of the month.

NTDOs making foreign payments will need to ensure there is sufficient lead-time for value date processing of U.S. dollar and foreign currency payment vouchers before the last budget date of the year. See ITS.gov for more information on the disbursement of US Dollar and foreign currencies internationally.

In situations where funds remain and contracted goods and services are outstanding, NTDOs must obligate the funds related to the outstanding goods and services in the same budget year as the funds for the contacted goods and services were appropriated, creating an unliquidated obligation (ULO). NTDOs may submit payments adjustments, expenditures, and outlays (but no new obligations) in a new budget year against established ULOs, only if:

1) The ULO was established in the same year that the appropriation was awarded.

2) There are sufficient funds in the obligation. Disbursing Officers that disburse against appropriation without sufficient funds will be in violation of Anti Deficiency Act (see TFM Volume 1, Part 4A, Chapter 2000 Section 2025—Anti-Deficiency Act).

3) The appropriation has not expired. It is important to note, appropriations with outstanding funds automatically expire and are cancelled 5 years after the date of the appropriation. NTDOs submitting payments against cancelled appropriations will be in violation of the Anti-Deficiency Act. Regardless of appropriation category, after five years, funds are unavailable for obligations, obligation adjustments, expenditures, and outlays.

Program Offices cannot use appropriated funds in the cancelled period to pay invoices, even if those invoices are approved and legitimate. Although funds within the cancelled period can no longer be utilized by Program Offices, the funds can still be tracked for accounting and financial execution purposes.

The first week of September, Fiscal Service will send reminder emails to all NTDO disbursing officers with active routing and transit numbers, reminding them that they need to process their payments in accordance with the instructions outlined in this TFM chapter.

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.

2040.10—General Guidelines

All federal payments made by a federal entity, other than payments made under the Internal Revenue Code, must be made by EFT, in accordance with 31 CFR Part 208, unless a waiver applies. Accordingly, recipients of federal payments must receive payment by direct deposit to an account at the recipient’s financial institution or by an electronically delivered payment to a Treasury-sponsored account, or obtain a waiver as set forth in this section.

Federal entities that process federal payment requests eligible for deposit to a Treasury-sponsored account must ensure that their forms, online enrollment processes, and any appropriate procedures associated with the application of nontax federal payments reflect the EFT requirement and the availability of payment to a Treasury-sponsored account. In particular, federal entities should inform recipients of the requirement to receive their payment to either an account at the recipient’s financial institution or to a Treasury-sponsored account prior to certifying such payments and should refer the recipients to the EFT requirements prescribed in 31 CFR Part 208. 

2040.20—Waivers Available to Individual Federal Payment Recipients

This subsection sets forth the waivers available to individual federal nontax payment recipients pursuant to 31 CFR § 208.4(a)(1).

2040.20a—Waivers Available to Individual Federal Payment Recipients that Do Not Require Treasury Approval

Waivers from the EFT requirement apply where an individual:

• Was born prior to May 1, 1921, and was receiving payment by check on March 1, 2013, 
• Receives a type of payment for which Treasury does not offer delivery to a Treasury-sponsored account, or
• Is ineligible for a Treasury-sponsored account because of suspension or cancellation of the individual’s Treasury-sponsored account by Treasury’s Financial Agent.

Individual federal payment recipients do not need to obtain Treasury’s approval to utilize the above waivers.

2040.20b—Waivers Available to Individual Federal Payment Recipients that Require Treasury Approval

An individual federal payment recipient may request a waiver from the EFT requirement if payment by EFT would impose a hardship on the individual because of the individual’s inability to manage an account at a financial institution or a Treasury-sponsored account due to a mental impairment or due to the individual living in a remote geographic location lacking the infrastructure to support EFT payments.

Individual payment recipients must contact the U.S. Treasury Electronic Payment Solution Center at 1-877-874-6347 to request to utilize the above waivers based on hardship. As set forth in subsection 2040.40, a federal entity may permit check payments on an interim basis to an individual who requests payment by check because of a mental impairment or because they live in a remote geographic location lacking the infrastructure to support EFT payments. Under these circumstances, the federal entity must inform the individual that they are permitted to receive payment by check for an interim period, but that they must contact the U.S. Treasury Electronic Payment Solution Center at 1-877-874-6347 to request approval to utilize a waiver based on hardship.

2040.30—Waivers Available to Federal Entities

This subsection sets forth the waivers available to federal entities pursuant to 31 CFR §§ 208.4(a)(1)(ii) and 208.4(a)(2)-(8) and the waiver request process that applies to the waivers that require Treasury approval.

2040.30a—Waivers Available to Federal Entities that Do Not Require Treasury Approval

Federal entities may make federal payments by a method other than EFT without obtaining Treasury’s approval in the following circumstances:

• Where the political, financial, or communications infrastructure in a foreign country does not support payment by EFT,
• Where the payment is in a foreign currency and Treasury does not support electronic payment in that currency,
• Where the payment is to a recipient within an area designated by the President or an authorized federal entity administrator as a disaster area (this waiver is limited to payments made within 120 days after the disaster is declared),
• Where either a military operation is designated by the Secretary of Defense in which uniformed services undertake military actions against an enemy, or a call or order to, or retention on, active duty of members of the uniformed services is made during a war or national emergency declared by the President or Congress,
• Where a threat may be posed to national security, the life or physical safety of any individual may be endangered, or a law enforcement action may be compromised, or
• Where the entity does not expect to make multiple payments to the same individual or small business within a one-year period on a regular, recurring basis. 

2040.30b—Waivers Available to Federal Entities that Require Treasury Approval 

Federal entities may submit requests to Treasury in accordance with the procedures set forth in subsection 2040.30c to be approved to utilize a waiver from the EFT requirement in the following circumstances:

• If Treasury provides a federal entity with an option to begin delivering a type of Federal payment to a Treasury-sponsored account and the federal entity still seeks to make payments of that type other than by EFT, 
• To extend any waiver for payment to a recipient within an area designated by the President or an authorized federal entity administrator as a disaster area past the 120-day period following when the disaster is declared,
• Where a federal entity’s need for goods and services is of such an unusual and compelling urgency that the government would be seriously injured unless payment is made by a method other than EFT, or
• Where there is only one source of goods or services, and the government would be seriously injured unless payment is made by a method other than EFT. 

2040.30c—Federal Entity Waiver Request Process 

Agencies that wish to submit a request to Treasury to be approved to utilize the waivers from the EFT requirement set forth in subsection 2040.30b must complete the online waiver request form at https://fiscal.treasury.gov/eft/request-form.html. The waiver request form will require the federal entity to provide the following information: 

• Federal entity name,
• Agency Location Code,
• Federal entity point of contact (POC) name, email address, and phone number,
• The applicable waiver under subsection 2040.30b that the federal entity is requesting, a written justification indicating why the waiver should be granted, and the requested waiver start date and end date, if applicable, and
• The estimated annual number of payments that the federal entity expects to make utilizing the waiver.

Treasury will provide the federal entity a determination on the waiver request within 60 calendar days of the request and may reach out to the federal entity POC if clarification is needed. Federal agencies are entitled to make relevant payments by check during the pendency of the waiver request process.

For any waiver that is still in effect one year after Treasury’s approval, the federal entity must submit a new waiver request. Renewal requests must be emailed to Treasury at apg@fiscal.treasury.gov, at least 30 days before the expiration of the one-year period. 

As noted in subsection 2040.50, pursuant to 31 CFR § 208.4(c), Treasury may nullify a federal entity waiver if its application leads to the federal entity initiating an unusually large number or proportion of check payments.

Any waiver-related questions may be directed to Treasury at the following email address: apg@fiscal.treasury.gov. 

2040.40—Interim Check Payments

Federal entities may permit check payments on an interim basis in the following circumstances:

• A federal payment recipient seeks to utilize any of the EFT waivers set forth in subsection 2040.20b and Treasury has not yet made a decision on the recipient’s waiver request,
• A federal entity seeks to utilize any of the EFT waivers set forth in subsection 2040.30b and Treasury has not yet made a decision on the federal entity’s waiver request, or 
• A payee’s designated bank account or Treasury-sponsored account is closed.

The U.S. Treasury Electronic Payment Solution Center may contact individual federal payment recipients who are receiving interim check payments to discuss the requirement to receive their payments electronically by enrolling in direct deposit or the Direct Express card or to obtain a waiver from the EFT requirement. 

2040.50—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. 

Additionally, pursuant to 31 CFR § 208.4(c), Treasury reserves the right to nullify a federal entity waiver if its application leads to the federal entity initiating an unusually large number or proportion of check payments. In such circumstances, the federal entity may be required to work with Treasury to identify and implement ways to make the payments by EFT.

2040.60—American Rescue Plan Act Payments

As authorized by the American Rescue Plan Act (ARPA) of 2021, on July 15, 2021, the U.S. Department of the Treasury’s Bureau of the Fiscal Service (Fiscal Service) started disbursing Advance Child Tax Credit (ACTC) payments on behalf of the Internal Revenue Service (IRS). ARPA directed the IRS to issue ACTC payments for the period from July 2021 through December 2021. The payments were issued with the payment date of the 15th of each month, unless the 15th fell on a weekend or holiday. If the payment date fell on a weekend or holiday, the payment date was adjusted to the preceding business day. This program remains active until further notice, due to the possibility of ACH returns.

For more information about the processing of ACTC payments through ACH, reference the Fiscal Service’s Green Book.

In accordance with 31 U.S.C. § 3321(b), this section prescribes procedures and policies by which Fiscal Service delegates to officers and employees of other federal entities the authority to disburse public money. It is consistent with Fiscal Service’s continuing oversight over federal entities that are delegated disbursing authority.

This section does not pertain to federal entities that are granted authority to disburse public money by statute. See 31 U.S.C. § 3321(c).

4050.10—Standards for Delegating Disbursing Authority

Fiscal Service delegates disbursing authority in limited cases for purposes of “economy and efficiency,” consistent with the requirements of 31 U.S.C. § 3321(b). Thus, Fiscal Service approves an executive federal entity’s request for delegated disbursing authority only if, among other things:

• A federal entity requires a particular level of service for disbursing funds that Fiscal Service cannot provide,
• The delegation would be more efficient and cost effective to the federal government and the public,
• The federal entity’s needs preclude the cash management needs of the Treasury, and
• The requesting federal entity submits its request for delegated disbursing authority, in writing, to Treasury’s Chief Disbursing Officer (CDO). The request must be on federal entity letterhead and must be signed by the head of the federal entity or his or her designee. The letter must include adequate documentation of the federal entity’s business need for delegation and must provide assurance to Treasury that the federal entity, if the delegated disbursing authority, will maintain effective internal controls and will comply with pertinent security guidelines.

4050.20—Delegated Disbursing Authority Document

In limited cases when Fiscal Service, in its sole discretion, determines that a federal entity has met the requirements to be delegated disbursing authority, Fiscal Service executes a written Delegated Disbursing Authority Document. The Delegated Disbursing Authority Document sets forth specific terms, conditions, and limitations of the particular delegation.

Fiscal Service has the authority to amend the specific terms of the Delegated Disbursing Authority Document, as necessary and appropriate. Before Fiscal Service finalizes any amendment, it provides advance notice to the federal entity, in writing, setting forth the specific purpose and reasons for the proposed amendment. Fiscal Service gives the federal entity the opportunity to submit comments on any proposed amendment. However, Fiscal Service retains sole decision-making authority to finalize amendments to the Delegated Disbursing Authority Document.

4050.30—Authorities of Treasury’s CDO

When Treasury’s CDO delegates disbursing authority to a federal entity in accordance with 31 U.S.C. § 3321(b), the CDO:

• Maintains oversight authority over the disbursing function as demonstrated, in part, by the terms of this chapter. Consistent with this authority, the CDO retains the authority to revoke a federal entity’s disbursing authority delegation.
• Has the right to require that the federal entity’s operations be inspected and examined to ensure compliance with delegated disbursing authority requirements.
• Prescribes and approves procedures for disbursing functions as outlined in this section of the TFM; TFM Volume I, Part 4A, Chapter 2000, Section 2045, for federal entities with authority to disburse imprest funds; and the Non-Treasury Disbursing Offices (NTDO) Self-Certification Guide for Delegated Disbursing Agencies (DDA) and the NTDO Self-Certification for Delegated Disbursing Agencies (DDA) Internal Control Assessment Questionnaire.
• Requires federal entities to obtain a third-party assessment of the need for the delegated authority.
• Requires federal entities with delegated disbursing authority to submit immediately to the CDO any irregularity in their accounts involving such disbursement activity.

4050.40—Responsibilities and Liabilities of a Federal Entity with Delegated Disbursing Authority

A federal entity that is delegated disbursing authority by the CDO under 31 U.S.C. § 3321(b) assumes significant responsibilities and liabilities, including but not limited to:

• Following the disbursing official and cashier guidelines as set forth under 31 U.S.C. § 3322, § 3325, and § 3528.
• Full accountability and liability for all disbursements issued under the delegation. The federal entity must not delegate the duties and functions related to the delegation to another party without consultation and prior written approval by the CDO.
• Reporting of all disbursements made under the delegation in the federal entity’s payment accounting reports to Fiscal Service, using the appropriate federal entity accounting codes, as authorized by Fiscal Service. The federal entity must submit immediately to the CDO any irregularity in accounts involving disbursement activity. Furthermore, the federal entity must resolve any irregularities or discrepancies associated with such reports.
• Periodically obtaining the services of a third party to assess the need for the delegated authority. This federal entity report will be provided to Treasury.

In addition, a federal entity with delegated disbursing authority must practice effective security and internal control measures as prescribed by Fiscal Service (in Treasury Directive No. 71-10), GAO, and the Office of Management and Budget (OMB).

4050.50—Oversight Requirements

4050.50a—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), and
• 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 Non-Treasury Disbursing Offices (NTDO) Self-Certification Guide for Delegated Disbursing Agencies (DDA) and the NTDO Self-Certification for Delegated Disbursing Agencies (DDA) Internal Control Assessment Questionnaire.

4050.50b—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.

4050.50c—Failure to Submit Required Self-Certification Reports and Information Required by a Risk Assessment

If a federal entity does not comply with the review and self-certification reporting requirements provided under subsection 4050.50a or does not respond to requests for information in connection with a risk assessment as provided under subsection 4050.50b, Treasury’s CDO notifies the federal entity, in writing, of a final date certain for complying with such requirements. The CDO reserves the right to revoke the federal entity’s disbursing authority delegation in accordance with subsection 4050.30, if the federal entity fails to respond adequately to the terms of this written notice by the indicated final date certain.

4050.60—Termination of Delegated Disbursing Authority

The CDO may terminate a federal entity’s delegation of disbursing authority if Fiscal Service determines, in its sole discretion, that:

• The risk assessment conducted under subsection 4050.50b warrants such action,
• The federal entity fails to respond adequately to the terms of the written notice from the CDO, referenced in subsection 4050.20,
• A third-party review indicates that the federal entity’s need for delegated authority no longer exists, referenced in subsection 4050.40,
• The federal entity fails to comply with any of the responsibilities and liabilities of a federal entity with delegated disbursing authority, including but not limited to, those responsibilities and liabilities listed under subsection 4050.40, or
• The federal entity fails to comply with the terms of the Delegated Disbursing Authority Document executed under the authority of subsection 4050.20.

In addition, the CDO periodically reviews whether the federal entity continues to meet the standards for delegation of disbursing authority as set forth under 31 U.S.C. § 3321(b) and subsection 4050.10. The CDO may terminate a federal entity’s delegation of disbursing authority when Fiscal Service determines, in its sole discretion, that the federal entity no longer meets such standards.

The CDO notifies the federal entity, in writing, that its delegation of disbursing authority is being terminated. Before any termination action is taken, Fiscal Service and the federal entity work together to resolve all outstanding questions and issues. If this effort is unsuccessful, Fiscal Service consults with the federal entity to determine an appropriate effective date for termination and the resumption of Treasury disbursement services. In determining the effective termination date, Fiscal Service and the federal entity consider the mission of the federal entity and the needs of its payees. If Fiscal Service and the federal entity cannot reach a mutual decision on the effective date for termination, Fiscal Service determines the effective date and notifies the federal entity.