![](media/image1.jpeg){width="7.9527777777777775in" height="10.625in"}

# **Table of Contents** {#table-of-contents .Heading---TOC}

**Table of Contents** ii

**Table of Figures** iv

**Listed Abbreviations** v

**Foreword** vii

**Introduction** 1-1

**1.1.** **Background** 1-1

**1.2.** **Purpose and Scope of This Document** 1-3

**1.3.** **Standard Federal Financial Business Processes Within Context
of Core Requirements** 1-5

**1.4.** **Summary of Standard Business Process Initiatives** 1-6

**2** **Funds Management Processes** 2-1

**2.1** **Budget Authority Process** 2-1

**2.1.1** **Budgetary Resources** 2-1

**2.1.2** **Record Application of Budgetary Resources (Apportionment)**
2-1

**2.2** **Funds Distribution** 2-1

**2.2.1** **Allotment Distribution** 2-1

**2.2.1.1** **Allotment for (Direct) Non-Anticipated, Non-Reimbursable
Funding** 2-1

**2.2.1.2** **Allotment for Anticipated Reimbursable Funding** 2-1

**2.2.1.3** **Allotment for Anticipated Non-Reimbursable Funding** 2-1

**2.2.2** **Sub-Allotment Distribution** 2-1

**2.2.3** **Lower Level Distribution** 2-1

**2.3** **Funds Management Process** 2-1

**2.3.1** **Establishing Commitments and Obligations for Goods and
Services** 2-1

**2.3.2** **Establishing Obligations Not Requiring Commitment** 2-1

**2.3.3** **Funds Check Prior to Obligation** 2-1

**2.3.4** **Unexpired Funds Validation and Verification** 2-1

**2.3.5** **Expired Funds Validation and Verification** 2-1

**3** **Payment Management Processes** 3-1

**3.1** **Receipt and Acceptance of Goods** 3-1

**3.2** **Receipt and Acceptance of Services** 3-1

**3.3** **Accounts Payable and Invoicing Processes** 3-1

**3.3.1** **Invoice Entry** 3-1

**3.3.2** **Invoice Processing** 3-1

**3.3.3** **Credit Memo** 3-1

**3.4** **Disbursements** 3-1

**3.4.1** **Disbursements -- Bulk Files (ACH/EFT, CCD, CCD+, CTX, and
Checks)** 3-1

**3.4.2** **Disbursements -- Small Volume and Same or Next Day
Payments** 3-1

**3.5** **Returned Payments -- ACH, Check, Same Day** 3-1

**3.6** **Data Objects and Data Elements** 3-1

**4** **Receivables Management Processes** 4-1

**4.1** **Establish Accounts Receivable Due From The Public** 4-6

**4.2** **Analyze Accounts Receivable** 4-11

**4.3** **Billing** 4-20

**4.4** **Collection of Receipts** 4-22

**4.5** **Application of Receipts** 4-27

**4.6** **Dunning** 4-36

**4.7** **Allowance for Loss on Accounts Receivable** 4-44

**4.8** **Write-off of Accounts Receivable** 4-47

**4.9** **Issue Credit Memo** 4-52

**4.10** **Return of a Financial Instrument** 4-56

**4.11** **Waiver of Interest, Administrative Costs, and Penalties**
4-59

**4.12** **Installment Plans** 4-62

**5** **Reimbursable Management Processes** 5-1

**6** **Reports Management Processes** 6-1

Appendix A -- Standard Federal Financial Business Process Vision and
Business Approach A-1

Appendix B -- Standard Federal Financial Business Process Controlled
Vocabulary B-1

Appendix C -- Business Process Flowcharts, Symbols, and Definitions C-1

Appendix D -- Table of Core Financial System Requirements D-1

Appendix E -- Financial Management Laws and Regulations E-1

Appendix F - Contributors F-1

# **Table of Figures** {#table-of-figures .Heading---TOC}

Figure 1-1: Standard Federal Financial Business Process Vision/Approach
1-4

Figure 1-2: System Functions 1-5

Figure 1-3: Summary of Standard Business Process Relationships 1-7

# **Listed Abbreviations** {#listed-abbreviations .Heading---TOC}

ACH Automated Clearing House

ALC Agency Location Code

BETC Business Event Type Code

BRM Business Reference Model

BFELoB Budget Formulation and Execution Line of Business

CCD Cash Concentration Disbursement

CCD+ Cash Concentration Disbursement Plus Addendum

CCLR Claims Collection Litigation Report

CCR Central Contractor Registry

CFO Chief Financial Officer

CFR Code of Federal Regulations

CIO Chief Information Officer

CO Certifying Officer

COR Contracting Officer's Representative

COTR Contracting Officer's Technical Representative

CVFR Current Value of Funds Rate

CFSR Core Financial System Requirements

CPIC Capital Planning and Investment Control

CTX Corporate Trade Exchange

DCIA Debt Collection Improvement Act of 1996

DEO Data Entry Operator

DUNS Dun and Bradstreet Number

EDI Electronic Data Interchange

EFT Electronic Funds Transfer

FAR Federal Acquisition Regulation

FASAB Federal Accounting Standards Advisory Board

FBWT Fund Balance With Treasury

FEA Federal Enterprise Architecture

FEAF Federal Enterprise Architecture Framework

FFMIA Federal Financial Management Improvement Act of 1996

FFMSR Federal Financial Management Systems Requirements

FISMA Federal Information Security Management Act of 2002

FMS Financial Management Service

FOMF Financial Organization Master File

FSIO Financial Systems Integration Office

GAO Government Accountability Office

GPRA Government Performance and Results Act of 1993

ID Identification

IDD International Direct Deposit

IPAC Intra-Governmental Payment and Collection

IPP Internet Payment Platform

IRM Information Resource Management

IT Information Technology

JFMIP Joint Financial Management Improvement Program

NACHA National Automated Clearing House Association

NIST National Institute of Standards and Technology

OCR Optical Character Recognition

OFFM Office of Federal Financial Management (OMB)

OMB Office of Management and Budget

PMA President's Management Agenda

PMD Payment Management Disbursing

PO Purchase Order

PPA Prompt Payment Act

PPD Prearranged Payment and Deposit

PPD+ Prearranged Payment and Deposit Plus Addendum

RTN Routing Transit Number

SFFAS Statement of Federal Financial Accounting Standards

SPS Secure Payment System

SFFBP Standard Federal Financial Business Processes

TROR Treasury Report on Receivables and Debt Collection Activities

TAFS Treasury Appropriation Fund Symbol

TAS Treasury Account Symbol

TOP Treasury Offset Program

TPA Trading Partner Agreement

TFM Treasury Financial Manual

USSGL U.S. Standard General Ledger

# **Foreword** {#foreword .Heading---TOC}

To meet the objectives of the Federal Financial Management Improvement
Act of 1996 and OMB Circular A-127, Federal agencies must improve the
cost, quality, and performance of Federal financial management systems
by leveraging common standards, shared solutions, and implementing other
government-wide reforms that foster efficiencies in Federal financial
operations. Critical to these efforts is the definition and
implementation of standard business processes for core financial
management functions across government. Through standardization, Federal
entities are better positioned to implement lower cost, lower risk, and
higher performing financial management solutions.

The *Standard Federal Financial Business Processes (SFFBP) Document* is
designed to standardize common financial business activities and
processes to ensure that financial managers assess programs and make
decisions with timely and accurate data. This publication was developed
for the Federal financial community, vendors who support financial
management system implementations, and contractors of financial
management system products in full cooperation with the Chief Financial
Officer (CFO) Act Agencies, and other contributors.

# **Introduction**

## **Background**

> Over the years, the Federal government has committed significant
> resources toward implementing Federal financial management systems
> that meet its needs for timely, useful, and reliable financial
> information. Agencies are making progress, but additional improvement
> is needed. To facilitate the move toward modern financial systems,
> standardizing financial management was identified as one of several
> government-wide initiatives to improve the management of the Federal
> government.
>
> The financial management standardization initiative leverages shared
> solutions and technology investments across government by integrating
> agency operations and information technology investments by
> normalizing the underlying business processes of Federal agencies. OMB
> Circular A-127 prescribes policies and standards for executive
> departments and agencies to follow in managing financial management
> systems. A core financial system within the financial management
> system must be commercial off-the-shelf and certified by the Financial
> Systems Integration Office (FSIO). Previously, agencies had to
> implement systems that had been certified by FSIO as meeting the Core
> Financial System Requirements, but could configure those systems to
> support their agency-specific business processes. In the future, the
> certification process will include both the Core Financial Systems
> Requirements and the Standard Financial Processes (as defined in this
> document). Shared Service Providers will subsequently implement the
> FISO tested and certified software which will include CGAC and the
> standard business processes and will be released as the Federal
> configuration.
>
> One of the measures of success for this initiative is to implement
> financial management processes and systems that comply with the
> Federal Financial Management Improvement Act of 1996 (FFMIA). FFMIA
> requires that agency systems comply with: Federal financial management
> system requirements, applicable accounting standards, and U.S.
> Standard General Ledger at the transaction level.
>
> In the short term, the standardization effort will help agencies:

-   *Promote a universal understanding of standard government financial
    business processes.* Establishing standard financial business
    processes for Federal agencies promotes a uniform way of doing the
    government's financial business. The defined processes and data no
    longer will vary from agency to agency or system to system. Use of
    standard financial business processes reduces training and start-up
    time for agency financial personnel transferring from on agency to
    another. Standard processes make it easier for mangers to determine
    where controls need to be placed or implemented in the processing of
    accounting events.

-   *Incorporate best business practices.* A number of agencies are in
    the process of moving from *bureau*-level systems to enterprise-wide
    systems. Each implementation begins with a task of defining the
    processes used within the agency. Standard business processes
    provide a uniform framework, reduce the burden of making decisions
    on how to conduct business, and facilitates the implementation
    process. In the long term, standardization will:

-   *Aid in the evolution of financial management throughout the Federal
    government.* There is a logical sequence of steps to an overall
    standardization strategy for Federal financial management that
    includes common business processes, data definitions, and accounting
    codes. The standard government financial business processes are
    building blocks to a future state that will take a number of years
    to implement.

-   *Mitigate the risks associated with system implementation by
    providing a uniform starting point for configuration.* FSIO
    certified vendors will provide a Core Financial System (CFS) that
    not only incorporates the Standard Financial Processes (as defined
    in this document), but also includes the system configuration that
    was used to complete and pass the certification test. This
    pre-configured software will significantly reduce the time and
    effort it takes an Agency to implement the CFS, as well as minimize
    the risk of an incorrect configuration that could result in the
    inoperability of the CFS.

-   *Ease the transition when an agency moves to a new financial
    management system or shared service provider.* Considerable effort
    is usually dedicated to defining business processes when an agency
    moves to a new CFS. The Standard Financial Processes establishes
    uniform procedures that will be used across the Federal government.
    The use of these standard processes will significantly reduce the
    amount of process mapping and training that will be required when
    migrating to a new CFS.

-   *Facilitate data exchange among an agency's financial systems.* The
    standard business processes are an integral step towards
    establishing standard data exchanges (interfaces) between an
    Agency's Financial Management System, which contains the CFS, and an
    agency's Mixed Systems (feeder systems). An additional benefit of
    the standard business process is establishment of standard data
    exchanges (interfaces) between an Agency's Financial Management
    System and the Central Agencies for external regulatory reporting,
    e.g., Treasury FMS.

> The *Standard Business Processes Document* encompasses applicable
> established financial standards used in the Federal Government. The
> policy and governance for classifying the financial effects of the
> government's business operations are as follows:

-   Office of Management and Budget (OMB), including the Office of
    Federal Financial Management (OFFM), Circulars, Bulletins and
    Memorandums

-   Department of the Treasury, Treasury Financial Manual (TFM),
    including the United States Standard General Ledger (USSGL) and
    Managing Federal Receivables Manual

-   Financial Systems Integration Office (FSIO) on behalf of the FSIO
    Transformation Team, a working-group of the Chief Financial Officers
    (CFO) Council, Core Financial Systems Requirements Document

-   Federal Accounting Standards Advisory Board (FASAB), Statements of
    Federal Financial Accounting Standards (SFFAS) and Concepts,
    Implementation Guides

-   General Accountability Office (GAO) Auditing Standards

> Policies, procedures, and requirements detailed in authoritative
> guidance are not repeated in this document, rather they are cited as
> they apply to specific steps within the processes.

[]{.mark}

## **Purpose and Scope of This Document**

> This document presents government-wide common processes and
> activities, standard business rules, data exchanges for core financial
> business processes. Standardizing business processes across the
> Federal government identifies opportunities to streamline processes
> and unify work across the agencies and within the Federal government's
> financial management domain. The outcome will be a more
> citizen-centered, customer-focused government that maximizes
> technology investments to better achieve mission outcomes.
>
> The Standard Business Processes include:

-   Sequenced activities for core business processes

```{=html}
<!-- -->
```
-   Business rules governing the process steps

```{=html}
<!-- -->
```
-   Data elements and definitions related to these business processes
    (e.g., information contained on an obligation -- document source,
    document number, item number, price per item)

-   Relationships among the data elements as they exist in the actual
    business activities

> The Standard Business Processes document is intended for use by the
> Federal financial management community to provide guidance for
> implementing efficient business processes that are consistent
> throughout the Federal government. Primary users will include
> accountants, budget analysts, financial and program staff, software
> vendors, and contractors who support financial management system
> implementations.
>
> This document supports the financial management standardization vision
> as part of the standardization foundation, as highlighted in the
> following diagram.
>
> ![](media/image2.jpeg){width="6.4944444444444445in"
> height="4.394444444444445in"}

Figure 1-1: Standard Federal Financial Business Process Vision/Approach

> The subsequent chapters in this document describe the business process
> flows for core financial business processes, the associated business
> rules, along with representative USSGL pro-forma entries for the
> process described. The document will also provide the standard data
> elements and business rules for the harmonized exchange of data
> between the common administrative systems (e.g., Grants, Acquisitions,
> Travel, and Payroll) and the core financial system.
>
> Appendices include the financial management standardization vision and
> approach to developing Standard Business Processes, a "controlled
> vocabulary" of standard terms and definitions used in this document, a
> list of relevant laws and regulations affecting Federal financial
> management and standard business processes, and acknowledgement of
> those who contributed to this document.

## **Standard Federal Financial Business Processes Within Context of Core Requirements**

> Among the *Federal Financial Management System Requirement (*FFMSR)
> documents is the *Core Financial System* *Requirements*. It sets forth
> requirements for the core functions that must be supported in all core
> Federal financial management systems. The core system functions are as
> follows:
>
> ![](media/image3.jpeg){width="5.393055555555556in"
> height="3.173611111111111in"}

Figure 1-2: System Functions

> Core financial systems provide specific functional capabilities
> necessary for managing a general ledger, controlling spending, making
> payments, managing receivables, measuring costs, reconciling the
> agency's Fund Balance with Treasury, and reporting in the Federal
> environment.
>
> The financial management standardization effort has identified the
> following business processes for standardization:

-   Funds Management

-   Payment Management

-   Receivables Management

-   Reporting

-   Reimbursables (which actually crosses all of the above processes)

## **Summary of Standard Business Process Initiatives**

> The financial management standardization effort includes four business
> processes: Funds Management, Payment Management, Receivables
> Management, and Reimbursable Management. The business processes are
> presented in chapters which depict their respective processes in
> flowcharts. Following each flowchart are descriptions of the
> processes, steps and related business rules. The standard process
> steps reflect best practices in an electronic environment, sound
> internal controls, and compliance with Office of Federal Financial
> Management (OFFM) Core Financial System Requirements (CFSR).
>
> The chapters of the financial management standardization business
> process document are described as follows:

-   Funds Management. This chapter includes processes related to the
    establishment of budgetary authority, funds distribution and funds
    control. The Funds Management processes describe include recording
    of the Apportionment and Reapportionment Request (SF 132) and assist
    agencies in complying with all applicable financial management
    statutes, regulations, and requirements. In addition, the steps
    outlined provide standard processes for ensuring effective Funds
    Control policy.

-   Payment Management. This chapter includes processes from requisition
    to payment for commercial contracts and small acquisitions disbursed
    by Treasury. Best practices include, but are not limited to:
    electronic processing, information routing, review and approval, and
    separation of duties. In addition, the standard processes included
    ensure effective cash management.

-   Receivables Management. The Receivables Management processes were
    developed in accordance with Treasury's *Managing Federal
    Receivables* guidance. The chapter includes processes from
    establishment of a receivable due from the public to the application
    of receipts. Best practices include, but are not limited to: cost
    effective debt collection and performance measures. In addition, the
    standard processes included ensure: customer responsiveness and
    effective cash management.

-   Reimbursable Management. Development of this chapter is not
    completed. It will be included in a future release. Note: This
    process contains elements of the Funds Management, Payment
    Management and Receivables Management processes.

-   Reporting. This chapter is not yet developed, and will be included
    in a future release. The format of this chapter has not been
    determined.

> The diagram below depicts Payment Management, Receivables Management,
> and Reimbursable Management as processes within the core financial
> system under the parameters of Funds Control that are facilitated
> through the use of the Common Government-wide Accounting
> classification structure. Reporting is used throughout the core
> financial system to provide management with accurate and timely
> information needed to support business decisions, financial statements
> and effective program operation.
>
> ![](media/image4.wmf){width="6.497916666666667in"
> height="4.732638888888889in"}

Figure 1-3: Summary of Standard Business Process Relationships

> See Appendix C -- Business Process Flowcharts, Symbols, and
> Definitions for an enlarged version of the flowchart

# **Funds Management Processes**

## **Budget Authority Process**

## **Budgetary Resources**

## **Record Application of Budgetary Resources (Apportionment)**

## **Funds Distribution**

## **Allotment Distribution**

## **Allotment for (Direct) Non-Anticipated, Non-Reimbursable Funding** 

## **Allotment for Anticipated Reimbursable Funding** 

## **Allotment for Anticipated Non-Reimbursable Funding**

## **Sub-Allotment Distribution**

## **Lower Level Distribution**

## **Funds Management Process**

## **Establishing Commitments and Obligations for Goods and Services**

## **Establishing Obligations Not Requiring Commitment**

## **Funds Check Prior to Obligation**

## **Unexpired Funds Validation and Verification**

## **Expired Funds Validation and Verification**

> []{.mark}
>
> []{.mark}
>
> [Under Review with the Funds Management Chapter currently released as
> an Exposure Draft]{.mark}

# **Payment Management Processes**

## **Receipt and Acceptance of Goods**

## **Receipt and Acceptance of Services**

## **Accounts Payable and Invoicing Processes**

## **Invoice Entry**

## **Invoice Processing**

## **Credit Memo**

## **Disbursements**

## **Disbursements -- Bulk Files (ACH/EFT, CCD, CCD+, CTX, and Checks)**

## **Disbursements -- Small Volume and Same or Next Day Payments**

## **Returned Payments -- ACH, Check, Same Day**

## **Data Objects and Data Elements**

[Under Review with the Payment Management Chapter currently released as
an Exposure Draft]{.mark}

# []{.mark} {#section .unnumbered}

# **Receivables Management Processes**

Included herein are best practice business processes for administering
and managing receivables due from the public, excluding reimbursable
activity; which GAO's *Glossary of Terms Used in the Federal Budget
Process* defines as, "(1) sums received by agencies as a payments for
commodities sold or services furnished either to the public or to
another government account and (2) are authorized by law to be credited
directly to specific appropriation and fund accounts. Reimbursements
between two accounts for goods or services are usually expenditure
transactions/transfers" (84). The standard business process for
Reimbursable Management will be included and released in Chapter five.

The benefits of effective Receivables Management include:

-   Improved revenue recognition;

```{=html}
<!-- -->
```
-   Improved cash flow;

-   Reduced loss due to bad debts; and

-   Lower administrative cost in the entire revenue cycle.

The Receivables Management process flowcharts and corresponding step
descriptions and business rules were developed in accordance with
Treasury\'s *Managing Federal Receivables* guidance. Other applicable
guidance for Receivables Management includes the Treasury Financial
Manual, Core Financial System Requirements (those applicable to
Receivables Management), the Debt Collection Improvement Act, applicable
OMB Circulars, applicable IRS regulations, and the Claims Collections
Litigation Report. In most instances, where specific rules apply to a
process step, the applicable guidance is referenced.

The Receivables Management processes detailed in this chapter are:

-   RM 4.1 -- Establish Accounts Receivable Due From the Public. This
    section describes the steps agencies should follow in order to
    create or edit customer information within the Core Financial
    System. Proper internal controls, separation of duties, and
    appropriate levels of review and approval for the establishment of
    accounts receivable are addressed.

-   RM 4.2 -- Analyze Accounts Receivable. This section describes the
    process of analyzing accounts receivable for the purpose of
    determining age, status, and collection probability by specific
    account in order to facilitate effective management of the account.

-   RM 4.3 -- Billing. This section provides the procedures to generate
    a bill. Bills are created based on agency-specific business rules
    and are generated automatically based on established billing
    frequency.

-   RM 4.4 -- Collection of Receipts. This section provides for the
    controlling and receiving of monies collected on associated debts,
    and recording to the general ledger.

-   RM 4.5 -- Application of Receipts. This section describes the
    process for the application of monies collected.

-   RM 4.6 -- Dunning. This section provides the procedures for the
    dunning process which is an integral part of an agency's due
    diligence for the pursuit of delinquent debt collection. The purpose
    of this process is to inform the customer of their responsibilities
    to the Agency as well as protect the agencies' rights to that debt.
    Dunning communications also inform the customer of the consequences
    for non-compliance with the payment terms and/or revisions to those
    terms in the form of interest, administrative costs, and penalties,
    where applicable.

-   RM 4.7 -- Allowance for Loss on Accounts Receivable. This section
    provides the procedures which an agency uses to project its debt
    losses. The allowance calculation is used for financial statement
    presentation purposes, in addition to and also for, internal
    management decisions on agency-specific debt collection policy and
    procedures.

-   RM 4.8 -- Write-off of Accounts Receivable. This section provides
    the process to determine whether an account should be written off,
    perform the write-off and determine subsequent action. Subsequent
    action can be to actively or passively pursue collection on the
    debt, close-out the debt (and obtain FMS or DOJ approval for close
    out where applicable), report cancellation of debt to the IRS, and
    notify the customer/debtor of cancellation.

-   RM 4.9 -- Issue Credit Memo. This section provides the procedures to
    determine appropriate action in the event of overpayments, returns,
    or adjustments to customer accounts. Note: agencies may: issue a
    refund, apply excess amounts received to open receivables, or offset
    the next scheduled receivable.

-   RM 4.10 -- Return of a Financial Instrument. This section provides
    procedures to determine appropriate action in the event the agency
    receives a returned financial instrument. Examples of returned
    financial instruments are non sufficient funds, closed
    customer/debtor accounts, stop payment, and disputed credit or debit
    charges.

-   RM 4.11 -- Waiver of Interest, Administrative Costs, and Penalties.
    This section provides procedures to process waivers of interest,
    administrative costs, and penalties. Procedures to identify
    delinquent customer accounts and the criteria to determine waivers
    are discussed.

-   RM 4.12 -- Installment Plans. This section provides procedures to
    offer installment plans for debts represented by valid inability to
    pay claims. This section also provides for the transmission of an
    agreement to the customer/debtor, agency determination of customer
    acceptance or non-acceptance processes, and the appropriate general
    ledger entries.

The steps within the above processes are depicted in flowcharts.
Following each flowchart are descriptions of the processes and steps and
related business rules. These steps reflect best practices in an
electronic environment, sound internal controls, and compliance with
Office of Federal Financial Management (OFFM) Core Financial System
Requirements (CFSR).

Included in the scope, from the [billing perspective]{.underline}, of
this chapter are the following:

-   Employee Overpayments

-   Vendor Overpayments

-   Relocation

-   Judgments (Accident Claims)

-   Fines

-   Penalties

-   Employee Training Reimbursement

-   Non-Sufficient Funds

-   Non-Reimbursable Sale of Goods or Services (User Fees)

-   Sharing Agreements

-   Employee Travel (Advances) (to be used only on an exception basis)

Included in the scope, from the [collections perspective]{.underline},
of this chapter are the following:

-   Billed Receivables

-   Concession Rents

-   Unbilled Overpayments

-   Treasury and DOJ Cross-Servicing

-   Agency Debt Management

-   Interest

-   Penalties

-   Asset Sales

-   Administrative Wage Garnishment

-   Sale of Goods and Services

-   Application Fees

-   Industrial Funding Fees

-   Freedom of Information Act

-   Miscellaneous Receipts

-   User Fees

-   Auction Receipts

-   Rebates

-   Sharing Agreements

Excluded from the scope of this chapter are the following:

-   Reimbursable Activity

-   Transactions in Foreign Currency

-   Non-Monetary Transactions

-   Non-Monetary Exchange Transactions

-   Investments

-   Leases

-   Program Overpayments Not Processed in the Core Financial System

-   Trust Fund Programs

-   IPAC Transactions

-   Credit Reform (Including Direct and Guaranteed Loans)

-   Grants

-   Gifts

-   Department of Justice Debt Management

-   Benefit Overpayments

-   Tax Receivables and Duties

-   Donations

-   Administrative Offsets with Accounts Payable

The following flowchart depicts the sequence and inter-relationship of
the Receivables Management Processes:

![](media/image5.wmf){width="6.990277777777778in"
height="5.257638888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart

## 

## **Establish Accounts Receivable Due From The Public**

This section presents the steps for establishing accounts receivables
due from the public. The steps in the flowchart include the submission
of accounts receivable requests; the creation, review, and validation of
customer information; and establishing a receivable in the Core
Financial System.

## RM 4.1 -- Establish Accounts Receivable Due From the Public Flowchart  {#rm-4.1-establish-accounts-receivable-due-from-the-public-flowchart .unnumbered}

![](media/image6.wmf){width="6.990277777777778in"
height="5.422916666666667in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Establish Accounts Receivable process steps
are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Business | A triggering    | An image of the       |       |
| 4.1.1 | Unit or  | event (e.g.,    | documentation         |       |
|       | Finance  | sale of goods   | supporting the        |       |
|       | Prepares | or services,    | receivable request    |       |
|       | Accounts | change in       | shall be maintained   |       |
|       | Re       | status of an    | in electronic or hard |       |
|       | ceivable | advance) occurs | copy form, as         |       |
|       | Request  | creating the    | applicable.           |       |
|       |          | need for a      |                       |       |
|       |          | receivable to   | In an electronic      |       |
|       |          | be established  | environment, the      |       |
|       |          | in the Core     | request information   |       |
|       |          | Financial       | is entered or         |       |
|       |          | System. The     | interfaced to the     |       |
|       |          | request could   | Core Financial System |       |
|       |          | represent the   | at the time the       |       |
|       |          | need to         | request is prepared.  |       |
|       |          | establish a     |                       |       |
|       |          | single          |                       |       |
|       |          | receivable or   |                       |       |
|       |          | multiple        |                       |       |
|       |          | receivables.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Accounts | The Accounts    | The Business Unit or  |       |
| 4.1.2 | Re       | Receivable      | Finance provides, at  |       |
|       | ceivable | request         | a minimum, the        |       |
|       | Request  | contains the    | following required    |       |
|       |          | necessary       | data elements to      |       |
|       |          | information to  | establish a           |       |
|       |          | establish a     | receivable, as        |       |
|       |          | receivable.     | applicable:           |       |
|       |          | This            |                       |       |
|       |          | information     | -   Receivable Type   |       |
|       |          | will be         |     (sale of goods or |       |
|       |          | maintained      |     services,         |       |
|       |          | throughout the  |     overpayments,     |       |
|       |          | life of a       |     unused advances   |       |
|       |          | receivable to   |     subject to        |       |
|       |          | include         |     refund, fees, and |       |
|       |          | verifying,      |     fines)            |       |
|       |          | reviewing and   |                       |       |
|       |          | capturing       | -   Dates of          |       |
|       |          | vendor or       |     Performance       |       |
|       |          | customer        |                       |       |
|       |          | information,    | -   Customer          |       |
|       |          | performing      |     Information       |       |
|       |          | calculations,   |                       |       |
|       |          | and initial     | -   Terms             |       |
|       |          | generation of   |                       |       |
|       |          | bills as        | -   Item Type to be   |       |
|       |          | applicable.     |     Billed            |       |
|       |          |                 |                       |       |
|       |          |                 | -   Amounts to be     |       |
|       |          |                 |     Billed            |       |
|       |          |                 |                       |       |
|       |          |                 | -   CGAC Data         |       |
|       |          |                 |                       |       |
|       |          |                 | -   Bill Date (actual |       |
|       |          |                 |     effective date of |       |
|       |          |                 |     billing)          |       |
|       |          |                 |                       |       |
|       |          |                 | -   Customer P.O.     |       |
|       |          |                 |     Number            |       |
|       |          |                 |                       |       |
|       |          |                 | -   Description of    |       |
|       |          |                 |     Goods and/or      |       |
|       |          |                 |     Services          |       |
|       |          |                 |                       |       |
|       |          |                 | -   Unit of measure   |       |
|       |          |                 |     and quantity      |       |
|       |          |                 |                       |       |
|       |          |                 | The Business Unit or  |       |
|       |          |                 | Finance, depending on |       |
|       |          |                 | the origination point |       |
|       |          |                 | for the request,      |       |
|       |          |                 | maintains             |       |
|       |          |                 | documentation to      |       |
|       |          |                 | support the billing   |       |
|       |          |                 | request.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Is       | Review A/R      | Verify that the       | R     |
| 4.1.3 | Inf      | request         | minimum required data | MB-04 |
|       | ormation | Information for | elements are provided |       |
|       | C        | completeness.   | (see RM step 4.1.2).  |       |
|       | omplete? |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | Return request  | Missing information   |       |
| 4.1.4 | Re       | for accounts    | is identified and     |       |
|       | ceivable | receivable to   | upon review, it is    |       |
|       | Request  | applicable      | noted that the        |       |
|       |          | functional area | request is            |       |
|       |          | for additional  | incomplete.           |       |
|       |          | information/    |                       |       |
|       |          | authorization.  | The Agency should     |       |
|       |          |                 | track the status of   |       |
|       |          |                 | rejected receivable   |       |
|       |          |                 | requests.             |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Advise   | Advisement of   | Advisement of the     |       |
| 4.1.5 | the      | the rejected    | rejected accounts     |       |
|       | App      | accounts        | receivable request is |       |
|       | ropriate | receivable      | sent to the           |       |
|       | Official | request is      | appropriate official. |       |
|       | of the   | generated and   |                       |       |
|       | Rejected | routed to       | The advisement will   |       |
|       | Accounts | applicable      | specify the missing   |       |
|       | Re       | responsible     | information or        |       |
|       | ceivable | parties.        | actions required, on  |       |
|       | Request  |                 | the part of the       |       |
|       |          |                 | originator, to        |       |
|       |          |                 | prepare a complete    |       |
|       |          |                 | and valid request     |       |
|       |          |                 | (see business rule    |       |
|       |          |                 | for step 4.1.2 for    |       |
|       |          |                 | the list of data      |       |
|       |          |                 | elements required to  |       |
|       |          |                 | establish a           |       |
|       |          |                 | receivable).          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolve  | The responsible |                       |       |
| 4.1.6 | Issue    | Business        |                       |       |
|       |          | Unit/Finance    |                       |       |
|       |          | corrects the    |                       |       |
|       |          | document by     |                       |       |
|       |          | providing valid |                       |       |
|       |          | data elements   |                       |       |
|       |          | needed to       |                       |       |
|       |          | complete the    |                       |       |
|       |          | receivable      |                       |       |
|       |          | request.        |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | The Core        | A customer record     |       |
| 4.1.7 | Exis     | Financial       | must be maintained    |       |
|       | ts/Valid | System checks   | for each entity that  |       |
|       | in       | whether a       | owes the agency a     |       |
|       | Customer | complete        | debt. (e.g.,          |       |
|       | File?    | customer record | contractors,          |       |
|       |          | exists in the   | employees).           |       |
|       |          | Customer File   |                       |       |
|       |          | and that data   |                       |       |
|       |          | matches between |                       |       |
|       |          | the accounts    |                       |       |
|       |          | receivable      |                       |       |
|       |          | request and the |                       |       |
|       |          | customer        |                       |       |
|       |          | record.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Create/  | If a customer   | Agencies must         | R     |
| 4.1.8 | Update   | record does not | implement procedures  | MA-01 |
|       | Customer | exist, the      | for proper            |       |
|       | Record   | record is       | segregation of duties | R     |
|       |          | created.        | between the person    | MA-02 |
|       |          |                 | creating a customer   |       |
|       |          | Data on the     | record and the person | R     |
|       |          | receivable      | creating a receivable | MA-03 |
|       |          | request is      | record.               |       |
|       |          | compared to     |                       | R     |
|       |          | data in the     |                       | MA-04 |
|       |          | agency customer |                       |       |
|       |          | database. If    |                       | R     |
|       |          | information     |                       | MA-05 |
|       |          | does not match, |                       |       |
|       |          | correct the     |                       | R     |
|       |          | customer        |                       | MA-06 |
|       |          | information as  |                       |       |
|       |          | appropriate.    |                       | R     |
|       |          |                 |                       | MA-07 |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Record   | Record          | The Core Financial    | R     |
| 4.1.9 | Re       | information     | System validates that | MB-01 |
|       | ceivable | required to     | data meets required   |       |
|       | Inf      | establish a     | formats and other     | R     |
|       | ormation | receivable.     | applicable tests of   | MB-03 |
|       |          | (*See RM 4.1.2  | validity.             |       |
|       |          | business rule   |                       | R     |
|       |          | for list of     | Information must be   | MB-04 |
|       |          | minimum         | captured to detail    |       |
|       |          | required data   | multiple              |       |
|       |          | elements.)*     | customers/debtors who |       |
|       |          |                 | are liable for an     |       |
|       |          | The recorded    | agency accounts       |       |
|       |          | data populates  | receivable.           |       |
|       |          | the detailed    |                       |       |
|       |          | subsidiary      | Processes and         |       |
|       |          | record and is   | procedures for        |       |
|       |          | used to         | establishing a        |       |
|       |          | populate the    | receivable include    |       |
|       |          | general ledger  | verifying, reviewing  |       |
|       |          | accounts        | and capturing         |       |
|       |          | receivable      | receivable and        |       |
|       |          | record. Note:   | customer information, |       |
|       |          | See RM 4.1.12   | and performing        |       |
|       |          | for the         | calculations for      |       |
|       |          | recording of    | receivable balances   |       |
|       |          | the receivable  | at the line item      |       |
|       |          | to the general  | level as well as in   |       |
|       |          | ledger.         | total.                |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Review   | The established | The receivable is     |       |
| 4     | Re       | accounts        | reviewed to ensure    |       |
| .1.10 | ceivable | receivable is   | the data entered into |       |
|       | Inf      | reviewed and    | the Core Financial    |       |
|       | ormation | validated by    | System matches the    |       |
|       |          | the designated  | accounts receivable   |       |
|       |          | individual(s).  | supporting            |       |
|       |          |                 | documentation.        |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies must         |       |
|       |          |                 | establish and         |       |
|       |          |                 | implement policies    |       |
|       |          |                 | and procedures        |       |
|       |          |                 | incorporating sound   |       |
|       |          |                 | internal controls to  |       |
|       |          |                 | allow for appropriate |       |
|       |          |                 | levels of review      |       |
|       |          |                 | prior to the          |       |
|       |          |                 | establishment of a    |       |
|       |          |                 | receivable. Note: Not |       |
|       |          |                 | all receivables are   |       |
|       |          |                 | required to be        |       |
|       |          |                 | reviewed. Agency      |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures (including |       |
|       |          |                 | thresholds) should    |       |
|       |          |                 | govern the need for   |       |
|       |          |                 | the review of a       |       |
|       |          |                 | receivable.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Re       | A receivable    |                       |       |
| 4     | ceivable | record is       |                       |       |
| .1.11 | A        | approved prior  |                       |       |
|       | pproved? | to recording in |                       |       |
|       |          | the General     |                       |       |
|       |          | Ledger.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Re       | Record General  | An agency must record |       |
| 4     | ceivable | Ledger entries  | entries for           |       |
| .1.12 | is       | to reflect that | receivables that have |       |
|       | Recorded | all receivable  | yet to be billed.     |       |
|       | in       | data has been   |                       |       |
|       | General  | processed along | Agency policies and   |       |
|       | Ledger   | with other      | procedures should     |       |
|       |          | pertinent       | determine the         |       |
|       |          | financial       | frequency in which    |       |
|       |          | information     | actions are           |       |
|       |          | needed to       | performed.            |       |
|       |          | update the      |                       |       |
|       |          | General Ledger. | The entries are       |       |
|       |          | Updating the    | recorded using the    |       |
|       |          | General Ledger  | United States         |       |
|       |          | includes        | Standard General      |       |
|       |          | recording the   | Ledger (USSGL)        |       |
|       |          | accounting      | Account Transaction   |       |
|       |          | event as debit  | Listing provided in   |       |
|       |          | and credit      | the TFM. Examples     |       |
|       |          | entries to both | include, but are not  |       |
|       |          | proprietary and | limited to, the       |       |
|       |          | budgetary       | following transaction |       |
|       |          | General Ledger  | codes from the        |       |
|       |          | accounts.       | current TFM:          |       |
|       |          |                 |                       |       |
|       |          |                 | TFM-C420 To record    |       |
|       |          |                 | accrued revenue from  |       |
|       |          |                 | non-Federal sources   |       |
|       |          |                 | other than for        |       |
|       |          |                 | reimbursable          |       |
|       |          |                 | agreements,           |       |
|       |          |                 | non-revolving trust   |       |
|       |          |                 | funds, special funds, |       |
|       |          |                 | and custodial         |       |
|       |          |                 | activity.             |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C422 To record    |       |
|       |          |                 | accrued revenue from  |       |
|       |          |                 | Federal or            |       |
|       |          |                 | non-Federal sources   |       |
|       |          |                 | for non-revolving     |       |
|       |          |                 | trust funds and       |       |
|       |          |                 | special funds.        |       |
|       |          |                 |                       |       |
|       |          |                 | TFM-C644 To record a  |       |
|       |          |                 | receivable from a     |       |
|       |          |                 | non-Federal entity    |       |
|       |          |                 | for the sale or       |       |
|       |          |                 | disposition of assets |       |
|       |          |                 | other than personal   |       |
|       |          |                 | properties and        |       |
|       |          |                 | investments.          |       |
+-------+----------+-----------------+-----------------------+-------+

## **Analyze Accounts Receivable** 

The section presents the business flow to analyze a receivable due from
the public, determine its status, and decide on applicable actions to be
taken to resolve an issue and/or adjust a balance. After the receivable
is created, the analysis process commences and is ongoing. The process
for performing analysis of outstanding receivable balances includes
receivables represented by individual subsidiary level accounts, general
ledger accounts (primarily account 1300 series), and those transaction
records used to update the accounts, as needed. The analysis process
assumes that the accounts and records are in a current status and
triggers a range of business events aimed at furthering the collection,
fair-valuation and/or resolution of the outstanding balances, in
accordance with Federal management guidance and compliance requirements.

As a result of due diligence analysis, the agency will pursue a
particular course of action. The Debt Collection Act of 1982, as amended
by the Debt Collection Improvement Act (DCIA) of 1996, sets forth the
authority for the collection of non-tax debt. Regulations and guidance
developed to implement this act provide a full range of techniques for
collection including demand letters, internal salary offset,
administrative wage garnishment, private collection agencies,
litigation, Treasury cross-servicing, and the Treasury Offset Program
(TOP), which provides, among other collection tools, tax refund offset
and centralized salary offset. The Federal Claims Collection Standard
section on Compromise, waiver, or disposition under other statutes not
precluded, notes that Agency laws and regulations specifically
applicable to claims collection activities take precedence over the
general government-wide standards.

The following flowchart provides key steps in the processes used by
Agencies to maintain and analyze accounts receivable; the flowchart
represents an iterative process. External sources and other processes
such as collections, hearing requests and bankruptcies could affect the
status, action taken or disposition of the receivable and consequently
affect the Dunning and Write-Off processes. Many of the business rules
included below are from Treasury's *Managing Federal Receivables*
guidance, which can be found at
(http://www.fms.treas.gov/debt/Guidance_MFR.html).

## RM 4.2 -- Analyze Accounts Receivable Flowchart {#rm-4.2-analyze-accounts-receivable-flowchart .unnumbered}

![](media/image7.wmf){width="6.990277777777778in"
height="5.340277777777778in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Analyze Accounts Receivable process steps are
described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Account  | Entities        | Changes to the status |       |
| 4.2.1 | Status   | external to the | of outstanding        |       |
|       | Change   | Agency may      | receivables received  |       |
|       | from     | send/trans      | from external sources |       |
|       | External | mit/communicate | must be in accordance |       |
|       | Source   | changes in      | with Federal          |       |
|       |          | status          | management guidance   |       |
|       |          | applicable to   | and compliance        |       |
|       |          | agency accounts | requirements, and     |       |
|       |          | receivable.     | agency policies and   |       |
|       |          |                 | procedures. Agency    |       |
|       |          | Examples where  | Financial Management  |       |
|       |          | external        | operations are        |       |
|       |          | sources         | responsible for       |       |
|       |          | initiate the    | reviewing proposed    |       |
|       |          | process are     | status changes to     |       |
|       |          | bankruptcy and  | customer accounts,    |       |
|       |          | a novation due  | executing such        |       |
|       |          | to sale of a    | changes, and          |       |
|       |          | company.        | resolving conflicts   |       |
|       |          |                 | where applicable in   |       |
|       |          |                 | accordance with       |       |
|       |          |                 | agency policies and   |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Manually | Accounts        | Accounts receivable   | R     |
| 4.2.2 | Update   | receivable      | balances and status   | MB-02 |
|       | Accounts | balances and    | are updated to        |       |
|       | Re       | status are      | reflect adjustments   | R     |
|       | ceivable | updated based   | and descriptions for  | MC-01 |
|       | Balance  | on inputs       | each adjustment.      |       |
|       | s/Status | originating     |                       | R     |
|       |          | either          | Receivable adjustment | MC-02 |
|       |          | internally or   | may include:          |       |
|       |          | externally to   |                       | R     |
|       |          | the agency.     | -   Late payment      | MC-03 |
|       |          |                 |     interest;         |       |
|       |          |                 |                       | R     |
|       |          |                 | -   Penalties;        | MC-04 |
|       |          |                 |                       |       |
|       |          |                 | -   Administrative    | R     |
|       |          |                 |     charges;          | MC-05 |
|       |          |                 |                       |       |
|       |          |                 | -   Dunning referral  | R     |
|       |          |                 |     dates; and        | MC-16 |
|       |          |                 |                       |       |
|       |          |                 | -   Collection data.  | R     |
|       |          |                 |                       | MC-18 |
|       |          |                 | Record applicable     |       |
|       |          |                 | transactions to the   | R     |
|       |          |                 | general ledger and    | MD-01 |
|       |          |                 | subsidiary ledger to  |       |
|       |          |                 | reflect the change in | R     |
|       |          |                 | accounts receivable   | MD-02 |
|       |          |                 | balances/status.      |       |
|       |          |                 |                       | R     |
|       |          |                 |                       | MD-04 |
|       |          |                 |                       |       |
|       |          |                 |                       | R     |
|       |          |                 |                       | MD-06 |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Updated  | Updated         | Best practice is to   |       |
| 4.2.3 | Accounts | accounts        | review the status of  |       |
|       | Re       | receivable      | accounts receivable   |       |
|       | ceivable | balances/status | balances on a         |       |
|       | B        | result from the | periodic basis. The   |       |
|       | alances/ | process of      | review may include    |       |
|       | Status   | applying        | accounts receivable   |       |
|       |          | updates.        | amounts, collection   |       |
|       |          |                 | percentages, AR days  |       |
|       |          |                 | outstanding and a     |       |
|       |          |                 | comparison to agency  |       |
|       |          |                 | or industry           |       |
|       |          |                 | standards.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Evaluate | Analysis and    | Identify delinquent   | R     |
| 4.2.4 | Status   | evaluation of   | debts on accounts     | MC-08 |
|       | of       | the status of   | based on aging of     |       |
|       | Account  | the accounts    | debts. Each account   | R     |
|       |          | receivable is   | must be evaluated     | MC-09 |
|       |          | to determine    | based on criteria     |       |
|       |          | the need for    | from government-wide  | R     |
|       |          | scheduling the  | regulations as well   | MC-20 |
|       |          | billing of      | as agency debt        |       |
|       |          | unbilled        | collection            | R     |
|       |          | receivables,    | regulations.          | MD-11 |
|       |          | the status of   |                       |       |
|       |          | the outstanding | The date of           |       |
|       |          | account balance | delinquency is the    |       |
|       |          | as current and  | due date. A debt      |       |
|       |          | adequate, or in | becomes delinquent    |       |
|       |          | arrears, as     | when payment is not   |       |
|       |          | well as,        | made by the due date  |       |
|       |          | eligibility for | or the end of a       |       |
|       |          | dunning and/or  | pre-determined "grace |       |
|       |          | reporting to    | period".              |       |
|       |          | credit bureaus. |                       |       |
|       |          |                 | Each delinquent       |       |
|       |          |                 | account is evaluated  |       |
|       |          |                 | for eligibility for   |       |
|       |          |                 | dunning.              |       |
|       |          |                 |                       |       |
|       |          |                 | Generally, when a     |       |
|       |          |                 | debtor files for      |       |
|       |          |                 | bankruptcy            |       |
|       |          |                 | protection, an agency |       |
|       |          |                 | is prohibited from    |       |
|       |          |                 | pursuing further      |       |
|       |          |                 | collection action     |       |
|       |          |                 | while the bankruptcy  |       |
|       |          |                 | is pending.           |       |
|       |          |                 |                       |       |
|       |          |                 | The Debt Collection   |       |
|       |          |                 | Information Act       |       |
|       |          |                 | (DCIA) requires       |       |
|       |          |                 | Federal agencies to   |       |
|       |          |                 | report to credit      |       |
|       |          |                 | bureaus information   |       |
|       |          |                 | on all delinquent     |       |
|       |          |                 | consumer debts.       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Response | Agencies        | An agency must        |       |
| 4.2.5 | from     | monitor         | provide appropriate   |       |
|       | Debtor/  | responses from  | guidelines and        |       |
|       | C        | customers to    | training to its       |       |
|       | ustomer? | dunning         | employees whose       |       |
|       |          | letters,        | duties include        |       |
|       |          | communications  | contacting debtors.   |       |
|       |          | on installment  |                       |       |
|       |          | agreements, and | Within 20 days after  |       |
|       |          | other           | the payment due date  |       |
|       |          | applicable      | or at the end of any  |       |
|       |          | communications  | grace period          |       |
|       |          | regarding debt  | contractually         |       |
|       |          | owed the        | established, the      |       |
|       |          | Agency.         | agency should contact |       |
|       |          |                 | the debtor, by letter |       |
|       |          |                 | or phone, in an       |       |
|       |          |                 | attempt to resolve    |       |
|       |          |                 | the non-payment.      |       |
|       |          |                 |                       |       |
|       |          |                 | It is essential that  |       |
|       |          |                 | the agency continue   |       |
|       |          |                 | to document all       |       |
|       |          |                 | agency contacts with  |       |
|       |          |                 | a debtor and actions  |       |
|       |          |                 | taken to enforce      |       |
|       |          |                 | collection in order   |       |
|       |          |                 | to protect the        |       |
|       |          |                 | government\'s         |       |
|       |          |                 | interests. An         |       |
|       |          |                 | agency's automated    |       |
|       |          |                 | systems may be used   |       |
|       |          |                 | to document contacts  |       |
|       |          |                 | with the debtor and   |       |
|       |          |                 | other debt collection |       |
|       |          |                 | activities so long as |       |
|       |          |                 | the manner in which   |       |
|       |          |                 | the information is    |       |
|       |          |                 | retained is           |       |
|       |          |                 | sufficient for        |       |
|       |          |                 | evidentiary purposes  |       |
|       |          |                 | in a court or         |       |
|       |          |                 | administrative        |       |
|       |          |                 | proceeding.           |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should take |       |
|       |          |                 | action to recover a   |       |
|       |          |                 | debt from secondary   |       |
|       |          |                 | debtors (co-borrowers |       |
|       |          |                 | or guarantors) when   |       |
|       |          |                 | it becomes apparent   |       |
|       |          |                 | that the primary      |       |
|       |          |                 | debtor cannot or will |       |
|       |          |                 | not repay a debt. The |       |
|       |          |                 | agency should employ  |       |
|       |          |                 | the same debt         |       |
|       |          |                 | collection techniques |       |
|       |          |                 | and tools in pursuing |       |
|       |          |                 | secondary debtors as  |       |
|       |          |                 | it uses for primary   |       |
|       |          |                 | debtors.              |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should      |       |
|       |          |                 | consider using        |       |
|       |          |                 | digital imaging as a  |       |
|       |          |                 | way to maintain       |       |
|       |          |                 | copies of debt        |       |
|       |          |                 | collection            |       |
|       |          |                 | documentation.        |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Minimum  | Due process     | In the context of     |       |
| 4.2.6 | Due      | requirements    | Federal debt          |       |
|       | Process  | are performed   | collection, the       |       |
|       | Requ     | for each        | constitutional right  |       |
|       | irements | customer        | of "due process"      |       |
|       |          | responding to   | requires an agency to |       |
|       |          | dunning         | provide debtors with  |       |
|       |          | letters.        | notice of, and the    |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute, a debt or    |       |
|       |          |                 | intended debt         |       |
|       |          |                 | collection action.    |       |
|       |          |                 | Notice must include   |       |
|       |          |                 | the amount and type   |       |
|       |          |                 | of debt owed, and the |       |
|       |          |                 | actions to be taken   |       |
|       |          |                 | by an agency to       |       |
|       |          |                 | collect the debt,     |       |
|       |          |                 | such as adding        |       |
|       |          |                 | interest and late     |       |
|       |          |                 | charges, offset or    |       |
|       |          |                 | garnishment, and      |       |
|       |          |                 | credit bureau         |       |
|       |          |                 | reporting.            |       |
|       |          |                 |                       |       |
|       |          |                 | An agency should      |       |
|       |          |                 | provide a customer an |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | dispute the debt or   |       |
|       |          |                 | the adverse           |       |
|       |          |                 | collection action to  |       |
|       |          |                 | be taken. At a        |       |
|       |          |                 | minimum, the customer |       |
|       |          |                 | should have the       |       |
|       |          |                 | opportunity to        |       |
|       |          |                 | challenge (1) the     |       |
|       |          |                 | existence of all or   |       |
|       |          |                 | part of the debt,     |       |
|       |          |                 | and/or (2) whether    |       |
|       |          |                 | the agency has met    |       |
|       |          |                 | the statutory or      |       |
|       |          |                 | regulatory            |       |
|       |          |                 | prerequisites for     |       |
|       |          |                 | using the collection  |       |
|       |          |                 | action mentioned in   |       |
|       |          |                 | the notice.           |       |
|       |          |                 |                       |       |
|       |          |                 | The minimum "due      |       |
|       |          |                 | process" required is  |       |
|       |          |                 | generally established |       |
|       |          |                 | by the statutes that  |       |
|       |          |                 | authorize the use of  |       |
|       |          |                 | a specific debt       |       |
|       |          |                 | collection tool or by |       |
|       |          |                 | implementing          |       |
|       |          |                 | regulations.          |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance provides     |       |
|       |          |                 | more information on   |       |
|       |          |                 | the notices and       |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ins      | An official     | Whenever possible, an | R     |
| 4.2.7 | tallment | installment     | agency should attempt | MB-23 |
|       | Ag       | agreement is    | to collect an overdue |       |
|       | reement? | considered      | debt in a single lump |       |
|       |          |                 | sum. In the event     |       |
|       |          |                 | that the debtor       |       |
|       |          |                 | claims financial      |       |
|       |          |                 | inability to repay    |       |
|       |          |                 | the debt in a single  |       |
|       |          |                 | lump sum, the Agency  |       |
|       |          |                 | may consider          |       |
|       |          |                 | collecting the        |       |
|       |          |                 | overdue debt in       |       |
|       |          |                 | installments.         |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | determine whether the |       |
|       |          |                 | terms of a proposed   |       |
|       |          |                 | installment agreement |       |
|       |          |                 | are viable. There     |       |
|       |          |                 | must be a strong      |       |
|       |          |                 | likelihood the        |       |
|       |          |                 | customer/debtor will  |       |
|       |          |                 | comply with the terms |       |
|       |          |                 | of the agreement.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | An agency may   | A compromise may be   |       |
| 4.2.8 | mpromise | consider        | considered (but is    |       |
|       | Ag       | entering into a | not required) when    |       |
|       | reement? | compromise      | one or more of the    |       |
|       |          | agreement with  | following criteria    |       |
|       |          | a               | apply:                |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. | -   the debtor is     |       |
|       |          |                 |     unable to pay the |       |
|       |          |                 |     debt within a     |       |
|       |          |                 |     reasonable time   |       |
|       |          |                 |     period,           |       |
|       |          |                 |                       |       |
|       |          |                 | -   the agency is     |       |
|       |          |                 |     unable to enforce |       |
|       |          |                 |     collection within |       |
|       |          |                 |     a reasonable time |       |
|       |          |                 |     period.           |       |
|       |          |                 |                       |       |
|       |          |                 | -   the cost of       |       |
|       |          |                 |     collection does   |       |
|       |          |                 |     not justify       |       |
|       |          |                 |     enforced          |       |
|       |          |                 |     collection of the |       |
|       |          |                 |     full amount       |       |
|       |          |                 |                       |       |
|       |          |                 | -   there is real     |       |
|       |          |                 |     doubt concerning  |       |
|       |          |                 |     the government\'s |       |
|       |          |                 |     ability to prove  |       |
|       |          |                 |     its case in       |       |
|       |          |                 |     court.            |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | determine whether the |       |
|       |          |                 | terms of a proposed   |       |
|       |          |                 | compromise agreement  |       |
|       |          |                 | are viable. There     |       |
|       |          |                 | must be a strong      |       |
|       |          |                 | likelihood the        |       |
|       |          |                 | customer/debtor will  |       |
|       |          |                 | comply with the terms |       |
|       |          |                 | of the agreement.     |       |
|       |          |                 |                       |       |
|       |          |                 | Using the Claims      |       |
|       |          |                 | Collection Litigation |       |
|       |          |                 | Report, an agency     |       |
|       |          |                 | must refer compromise |       |
|       |          |                 | proposals where the   |       |
|       |          |                 | principal amount of   |       |
|       |          |                 | the debt exceeds      |       |
|       |          |                 | \$100,000 (or such    |       |
|       |          |                 | larger amount as may  |       |
|       |          |                 | be determined by the  |       |
|       |          |                 | Attorney General) to  |       |
|       |          |                 | the Department of     |       |
|       |          |                 | Justice (DOJ) for its |       |
|       |          |                 | concurrence in the    |       |
|       |          |                 | compromise. DOJ has   |       |
|       |          |                 | delegated to the      |       |
|       |          |                 | Financial Management  |       |
|       |          |                 | Service (FMS) the     |       |
|       |          |                 | authority to          |       |
|       |          |                 | compromise a debt     |       |
|       |          |                 | with a principal      |       |
|       |          |                 | amount of \$500,000   |       |
|       |          |                 | or less when the debt |       |
|       |          |                 | is being serviced by  |       |
|       |          |                 | FMS in its            |       |
|       |          |                 | cross-servicing       |       |
|       |          |                 | program.              |       |
|       |          |                 |                       |       |
|       |          |                 | The Federal Claims    |       |
|       |          |                 | Collections Standards |       |
|       |          |                 | note that agency laws |       |
|       |          |                 | and regulations       |       |
|       |          |                 | specifically          |       |
|       |          |                 | applicable to claims  |       |
|       |          |                 | collection activities |       |
|       |          |                 | take precedence over  |       |
|       |          |                 | the government-wide   |       |
|       |          |                 | standards.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | An agency       | An agency should only |       |
| 4.2.9 | mpromise | performs        | compromise a debt     |       |
|       | A        | procedures to   | when it has exhausted |       |
|       | greement | implement a     | all other debt        |       |
|       |          | compromise      | collection tools and  |       |
|       |          | agreement if    | further pursuit of    |       |
|       |          | applicable.     | collection is not     |       |
|       |          |                 | cost effective.       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Non-Cen  | An agency       | An agency may request |       |
| 4     | tralized | considers       | that another agency   |       |
| .2.10 | Admini   | whether to      | offset a Federal      |       |
|       | strative | perform         | payment to satisfy a  |       |
|       | Offset?  | non-centralized | debt. This type of    |       |
|       |          | administrative  | offset is known as    |       |
|       |          | offset          | "non-centralized      |       |
|       |          | procedures.     | administrative        |       |
|       |          |                 | offset." Another type |       |
|       |          |                 | of non-centralized    |       |
|       |          |                 | administrative offset |       |
|       |          |                 | occurs when the       |       |
|       |          |                 | payment agency is the |       |
|       |          |                 | same as the creditor  |       |
|       |          |                 | agency, referred to   |       |
|       |          |                 | as "internal offset." |       |
|       |          |                 | Non-centralized       |       |
|       |          |                 | offset can be used    |       |
|       |          |                 | for internal offset,  |       |
|       |          |                 | or when the payment   |       |
|       |          |                 | to be offset is not   |       |
|       |          |                 | processed through the |       |
|       |          |                 | TOP or the creditor   |       |
|       |          |                 | agency is unable to   |       |
|       |          |                 | meet the 60-day       |       |
|       |          |                 | notice requirement    |       |
|       |          |                 | for debt submission   |       |
|       |          |                 | to TOP but is         |       |
|       |          |                 | otherwise able to     |       |
|       |          |                 | comply with the due   |       |
|       |          |                 | process prerequisites |       |
|       |          |                 | for offset.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | I        | An agency       | Examples of           |       |
| 4     | mplement | performs        | circumstances for     |       |
| .2.11 | Non-Cen  | procedures to   | which non-centralized |       |
|       | tralized | implement a     | offset would be       |       |
|       | Admini   | non-centralized | appropriate include   |       |
|       | strative | administrative  | internal offset and   |       |
|       | Offset   | offset as       | the offset of         |       |
|       |          | applicable.     | contractor payments   |       |
|       |          |                 | when the creditor     |       |
|       |          |                 | agency is the same as |       |
|       |          |                 | the payment agency;   |       |
|       |          |                 | collection of travel  |       |
|       |          |                 | advances and training |       |
|       |          |                 | expenses through a    |       |
|       |          |                 | Federal employee's    |       |
|       |          |                 | pay, retirement or    |       |
|       |          |                 | other amounts due;    |       |
|       |          |                 | offset of future      |       |
|       |          |                 | retirement pay; and   |       |
|       |          |                 | offset of Federal     |       |
|       |          |                 | salary pay when       |       |
|       |          |                 | offset is not         |       |
|       |          |                 | available through     |       |
|       |          |                 | TOP.                  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Non-Cen  | An official     |                       |       |
| 4     | tralized | non-centralized |                       |       |
| .2.12 | Admini   | administrative  |                       |       |
|       | strative | offset is       |                       |       |
|       | Offset   | documented.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Wage     | An agency       | The DCIA authorizes   |       |
| 4     | Garn     | considers       | an Agency to collect  |       |
| .2.13 | ishment? | whether to      | a delinquent debt by  |       |
|       |          | perform         | administrative        |       |
|       |          | administrative  | garnishment of the    |       |
|       |          | wage            | pay of a delinquent   |       |
|       |          | garnishment     | debtor who is         |       |
|       |          | procedures.     | employed by any       |       |
|       |          |                 | organization,         |       |
|       |          |                 | business, state or    |       |
|       |          |                 | local government, or  |       |
|       |          |                 | other entity other    |       |
|       |          |                 | than a Federal        |       |
|       |          |                 | agency. No court      |       |
|       |          |                 | order is required.    |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | I        | An agency       | For guidance on       |       |
| 4     | mplement | performs        | administrative wage   |       |
| .2.14 | Wage     | procedures to   | garnishment           |       |
|       | Gar      | implement wage  | implementation        |       |
|       | nishment | garnishment as  | procedures or         |       |
|       |          | applicable.     | administrative wage   |       |
|       |          |                 | garnishment itself,   |       |
|       |          |                 | refer to Treasury's   |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables,* which   |       |
|       |          |                 | provides information  |       |
|       |          |                 | on the notices and    |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
|       |          |                 | See also business     |       |
|       |          |                 | rule for 4.2.15.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Wage     | An official     | For guidance related  |       |
| 4     | Gar      | wage            | to the procedures     |       |
| .2.15 | nishment | garnishment is  | surrounding the       |       |
|       |          | documented.     | official wage         |       |
|       |          |                 | garnishment           |       |
|       |          |                 | documentation refer   |       |
|       |          |                 | to FMS wage           |       |
|       |          |                 | garnishment           |       |
|       |          |                 | regulations and       |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | which provides        |       |
|       |          |                 | information on the    |       |
|       |          |                 | notices and           |       |
|       |          |                 | opportunities to be   |       |
|       |          |                 | provided to a debtor. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notify   | An agency       | Based on agency       |       |
| 4     | Legal    | determines      | polices and           |       |
| .2.16 | F        | whether the     | procedures, debt and  |       |
|       | unction? | applicable      | supporting            |       |
|       |          | legal functions | documentation is      |       |
|       |          | should be       | forwarded to the      |       |
|       |          | notified to     | applicable legal      |       |
|       |          | evaluate or act | function, either      |       |
|       |          | on applicable   | intra-agency or       |       |
|       |          | legal issues.   | external to the       |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Unless an agency has  |       |
|       |          |                 | specific statutory    |       |
|       |          |                 | authority to litigate |       |
|       |          |                 | its own debts, it     |       |
|       |          |                 | must refer debts to   |       |
|       |          |                 | DOJ for litigation,   |       |
|       |          |                 | including bankruptcy  |       |
|       |          |                 | litigation. For       |       |
|       |          |                 | additional guidance   |       |
|       |          |                 | on referring debts to |       |
|       |          |                 | DOJ for litigation    |       |
|       |          |                 | refer to Treasury's   |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*. This    |       |
|       |          |                 | guidance also         |       |
|       |          |                 | includes criteria     |       |
|       |          |                 | that restrict an      |       |
|       |          |                 | agency from referring |       |
|       |          |                 | debt to DOJ for       |       |
|       |          |                 | litigation.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notify   | An agency       | When referring a debt |       |
| 4     | Legal    | performs        | to DOJ for            |       |
| .2.17 | Function | procedures to   | litigation, an agency |       |
|       |          | notify the      | must provide a fully  |       |
|       |          | applicable      | completed Claims      |       |
|       |          | legal functions | Collection Litigation |       |
|       |          | (internal or    | Report (CCLR). For    |       |
|       |          | external to the | required information  |       |
|       |          | agency as       | to be included on the |       |
|       |          | applicable) and | CCLR refer to         |       |
|       |          | provide         | Treasury's *Managing  |       |
|       |          | applicable      | Federal Receivables.* |       |
|       |          | facts and       |                       |       |
|       |          | documentation.  |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Noti     | An official     | In the case of debt   |       |
| 4     | fication | notification to | being referred to DOJ |       |
| .2.18 | to Legal | the legal       | for litigation, a     |       |
|       | Function | function is     | completed CCLR with   |       |
|       |          | made which      | supporting            |       |
|       |          | includes        | documentation is      |       |
|       |          | documentation   | generated by the      |       |
|       |          | of the issue    | agency.               |       |
|       |          | with the        |                       |       |
|       |          | applicable      |                       |       |
|       |          | account         |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Refer    | The Agency      | For guidance on       |       |
| 4     | for      | determines      | referral to the FMS   |       |
| .2.19 | Col      | whether to      | for cross-servicing   |       |
|       | lection? | refer debt to   | and/or to the         |       |
|       |          | Treasury FMS    | Treasury Offset       |       |
|       |          | for collection. | Program see           |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
|       |          |                 | The guidance provides |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as            |       |
|       |          |                 | eligibility           |       |
|       |          |                 | exceptions.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Refer    | The Agency      | For guidance on       | R     |
| 4     | for      | refers the debt | referral to the FMS   | MC-15 |
| .2.20 | Co       | to Treasury     | for cross-servicing   |       |
|       | llection | FMS.            | and/or to the         |       |
|       |          |                 | Treasury Offset       |       |
|       |          |                 | Program see           |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and/or the Debt       |       |
|       |          |                 | Collection            |       |
|       |          |                 | Improvement act. The  |       |
|       |          |                 | guidance provides     |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as exceptions |       |
|       |          |                 | for eligibility.      |       |
|       |          |                 |                       |       |
|       |          |                 | The agency must       |       |
|       |          |                 | generate a delinquent |       |
|       |          |                 | debt referral file    |       |
|       |          |                 | for transmission to   |       |
|       |          |                 | Treasury in           |       |
|       |          |                 | accordance with the   |       |
|       |          |                 | DCIA.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Referral | The agency      |                       |       |
| 4     | of Debt  | generates       |                       |       |
| .2.21 |          | documentation   |                       |       |
|       |          | supporting the  |                       |       |
|       |          | debt being      |                       |       |
|       |          | transferred to  |                       |       |
|       |          | Treasury FMS.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ad       | Based on review |                       |       |
| 4     | justment | of an account   |                       |       |
| .2.22 | to       | receivable, the |                       |       |
|       | Account  | agency          |                       |       |
|       | R        | determines      |                       |       |
|       | equired? | whether an      |                       |       |
|       |          | adjustment to   |                       |       |
|       |          | the             |                       |       |
|       |          | balance/status  |                       |       |
|       |          | of the account  |                       |       |
|       |          | is required.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Prepare  | As applicable,  | Proper segregation of |       |
| 4     | Ad       | the agency      | duties must be        |       |
| .2.23 | justment | prepares an     | followed when         |       |
|       | to       | adjustment to   | adjusting an accounts |       |
|       | Account  | the             | receivable balance.   |       |
|       |          | balance/status  |                       |       |
|       |          | of the account  |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Billing**

Bills are created based on agency-specific business rules and are
generated automatically based on established billing frequency. Included
are steps to determine billing requirements and generate and send a bill
to a customer/debtor.

##  RM 4.3 -- Billing Flowchart {#rm-4.3-billing-flowchart .unnumbered}

![](media/image8.wmf){width="6.990277777777778in"
height="5.010416666666667in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Billing process steps are described as
follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | D        | Determine the   | Based on the customer |       |
| 4.3.1 | etermine | billing         | and receivable record |       |
|       | Billing  | requirements    | information,          |       |
|       | Requ     | using the       | determine the method  |       |
|       | irements | customer        | (electronic or paper) |       |
|       |          | information and | of billing to be      |       |
|       |          | receivable      | used.                 |       |
|       |          | data.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | The amount to   | Before an agency      |       |
| 4.3.2 | etermine | be billed is    | bills, it will need   |       |
|       | Amount   | determined.     | to consider           |       |
|       | to be    |                 | discounts, shipping   |       |
|       | Billed   |                 | charges, partial      |       |
|       |          |                 | payments, and other   |       |
|       |          |                 | adjustments           |       |
|       |          |                 | applicable to the     |       |
|       |          |                 | transaction.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | Generate demand | Additional bill       | R     |
| 4.3.3 | Bill     | for payment     | information should    | MB-06 |
|       |          | that includes   | include account       |       |
|       |          | bill number,    | number, payment terms | R     |
|       |          | account number, | and conditions,       | MB-11 |
|       |          | debtor          | customer purchase     |       |
|       |          | information,    | order number, lock    | R     |
|       |          | amount owed,    | box information, and  | MB-12 |
|       |          | payment terms   | description of goods  |       |
|       |          | and conditions  | and/or services or    | R     |
|       |          | (including the  | other basis for the   | MB-13 |
|       |          | remittance      | debt.                 |       |
|       |          | instructions)   |                       | R     |
|       |          | and payment due | The bill should       | MB-15 |
|       |          | date.           | include or reference  |       |
|       |          |                 | applicable standards  | R     |
|       |          |                 | upon which any        | MB-16 |
|       |          |                 | interest, penalties   |       |
|       |          |                 | or administrative     | R     |
|       |          |                 | charges will be       | MB-17 |
|       |          |                 | based, rights under   |       |
|       |          |                 | Federal Claims        | R     |
|       |          |                 | Collection Standards, | MB-09 |
|       |          |                 | the date by which the |       |
|       |          |                 | debtor must make      | R     |
|       |          |                 | payment to avoid late | MB-10 |
|       |          |                 | charges and enforced  |       |
|       |          |                 | collection, the name, | R     |
|       |          |                 | address and phone     | MB-14 |
|       |          |                 | number of a point of  |       |
|       |          |                 | contact the           | R     |
|       |          |                 | customer/debtor may   | MB-24 |
|       |          |                 | speak with regarding  |       |
|       |          |                 | the bill and remedies |       |
|       |          |                 | the agency will use   |       |
|       |          |                 | to enforce payment of |       |
|       |          |                 | debts.                |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send     | The agency      | The billing document  |       |
| 4.3.4 | Bill to  | requests        | is sent in electronic |       |
|       | Customer | payment from    | or hard-copy format,  |       |
|       |          | the             | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Custome  | A billing       |                       |       |
| 4.3.5 | r/Debtor | document        |                       |       |
|       | Receives | representing a  |                       |       |
|       | Billing  | record of claim |                       |       |
|       | Document | is received by  |                       |       |
|       |          | the             |                       |       |
|       |          | d               |                       |       |
|       |          | ebtor/customer. |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Collection of Receipts**

The following flowchart provides key steps in the processes agencies use
to control, and record information for monies received. The steps
depicted in the functional lanes for Treasury and Financial Institutions
are included to provide general information on processes currently under
development, in 2008, by Treasury. The intent is not to provide detail
on how those procedures will function, but rather to provide background
for the flow of data that will be received by agencies.

##  RM 4.4 -- Collection of Receipts Flowchart {#rm-4.4-collection-of-receipts-flowchart .unnumbered}

![](media/image9.wmf){width="6.990277777777778in"
height="5.270138888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Collection of Receipts process steps are
described as follows:

+------+----------+-----------------+-----------------------+-------+
| Step | Step     | Step            | Business Rules        | CFSR  |
| ID   | Name     | Description     |                       | Req.  |
+======+==========+=================+=======================+=======+
| RM   | Remitter | The remitter    |                       |       |
| 4    | Submits  | initiates       |                       |       |
| .4.1 | Cred     | payment to the  |                       |       |
|      | it/Debit | Agency by using |                       |       |
|      | Card     | a credit or     |                       |       |
|      | Tra      | debit card.     |                       |       |
|      | nsaction |                 |                       |       |
|      | to       |                 |                       |       |
|      | Agency?  |                 |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | Based on its          | R     |
| 4    | T        | accepts payment | arrangement with a    | MD-01 |
| .4.2 | ransmits | via a credit or | financial             |       |
|      | Credit   | debit card and  | institution, an       |       |
|      | or Debit | sends           | agency performs       |       |
|      | Card     | information to  | applicable settlement |       |
|      | Tra      | a designated    | procedures for        |       |
|      | nsaction | Financial       | transactions          |       |
|      | for      | Institution     | transmitted.          |       |
|      | Autho    | (FI) for        |                       |       |
|      | rization | authorization.  | Settlement refers to  |       |
|      |          |                 | the accounting        |       |
|      |          |                 | process recording the |       |
|      |          |                 | respective debit and  |       |
|      |          |                 | credit positions of   |       |
|      |          |                 | the two parties       |       |
|      |          |                 | involved in a         |       |
|      |          |                 | transfer of funds.    |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | FI       | The designated  |                       |       |
| 4    | Receives | FI processes    |                       |       |
| .4.3 | Request  | the             |                       |       |
|      | for      | transactions    |                       |       |
|      | Autho    | electronically. |                       |       |
|      | rization |                 |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Tra      | The FI          |                       |       |
| 4    | nsaction | authorizes or   |                       |       |
| .4.4 | Aut      | declines the    |                       |       |
|      | horized? | transaction     |                       |       |
|      |          | request.        |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Tra      | Agency receives |                       |       |
| 4    | nsaction | notice from FI  |                       |       |
| .4.5 | Declined | that a          |                       |       |
|      |          | transaction has |                       |       |
|      |          | been declined.  |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      |                       |       |
| 4    | Receives | receives the    |                       |       |
| .4.6 | Cred     | transaction     |                       |       |
|      | it/Debit | authorization   |                       |       |
|      | Card     | number, date    |                       |       |
|      | Inf      | received, and   |                       |       |
|      | ormation | partial credit  |                       |       |
|      |          | card account    |                       |       |
|      |          | number, as      |                       |       |
|      |          | applicable,     |                       |       |
|      |          | from the FI.    |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Remitter | A remitter pays |                       |       |
| 4    | Submits  | the agency      |                       |       |
| .4.7 | Cash/    | directly with   |                       |       |
|      | Check to | cash or a       |                       |       |
|      | Agency   | check.          |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Finance         | In accordance with    |       |
| 4    | Receives | receives a      | common control        |       |
| .4.8 | Cash,    | payment in the  | activities common to  |       |
|      | Checks,  | form of cash or | all agencies, key     |       |
|      | and      | check and logs  | duties and            |       |
|      | Prepares | the information | responsibilities need |       |
|      | Control  | for tracking    | to be divided or      |       |
|      | Logs     | and internal    | segregated among      |       |
|      |          | control         | different people to   |       |
|      |          | purposes.       | reduce the risk of    |       |
|      |          |                 | error or fraud. This  |       |
|      |          |                 | should include        |       |
|      |          |                 | separating the        |       |
|      |          |                 | responsibilities for  |       |
|      |          |                 | authorizing           |       |
|      |          |                 | transactions,         |       |
|      |          |                 | processing and        |       |
|      |          |                 | recording them,       |       |
|      |          |                 | reviewing the         |       |
|      |          |                 | transactions, and     |       |
|      |          |                 | handling any related  |       |
|      |          |                 | assets. No one        |       |
|      |          |                 | individual should     |       |
|      |          |                 | control all key       |       |
|      |          |                 | aspects of a          |       |
|      |          |                 | transaction or event. |       |
|      |          |                 |                       |       |
|      |          |                 | Cash and checks       |       |
|      |          |                 | received at the       |       |
|      |          |                 | agency should, at a   |       |
|      |          |                 | minimum, be deposited |       |
|      |          |                 | daily. Agencies must  |       |
|      |          |                 | design and implement  |       |
|      |          |                 | policies and          |       |
|      |          |                 | procedures            |       |
|      |          |                 | incorporating sound   |       |
|      |          |                 | internal controls to  |       |
|      |          |                 | safeguard and account |       |
|      |          |                 | for collections that  |       |
|      |          |                 | cannot be deposited   |       |
|      |          |                 | by the end of each    |       |
|      |          |                 | day. Such undeposited |       |
|      |          |                 | collections must be   |       |
|      |          |                 | included in           |       |
|      |          |                 | applicable financial  |       |
|      |          |                 | reports.              |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Remitter | A remitter      | Payments involving    |       |
| 4    | Submits  | submits cash,   | electronic and cash   |       |
| .4.9 | Cash/    | check, or       | equivalents include   |       |
|      | Check or | initiates an    | transactions          |       |
|      | El       | electronic      | initiated by phone,   |       |
|      | ectronic | transaction     | Internet/Web,         |       |
|      | Payment  | through         | electronic check, and |       |
|      | via FI   | applicable FI   | Fedwire transactions. |       |
|      |          | channels.       |                       |       |
|      |          |                 | Agencies may manually |       |
|      |          |                 | process hard copy     |       |
|      |          |                 | checks, utilize the   |       |
|      |          |                 | Paper Check           |       |
|      |          |                 | Conversion process,   |       |
|      |          |                 | or other approved     |       |
|      |          |                 | automated process.    |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | FI       | The applicable  | Transactions must be  |       |
| 4.   | T        | financial       | validated and         |       |
| 4.10 | ransmits | institution(s)  | processed in a timely |       |
|      | Tra      | (including      | manner. Agency        |       |
|      | nsaction | Federal Reserve | policies and          |       |
|      |          | Bank (FRB) as   | procedures will       |       |
|      |          | applicable)     | define frequency in   |       |
|      |          | receives,       | which actions are     |       |
|      |          | processes, and  | performed.            |       |
|      |          | transmits the   |                       |       |
|      |          | transactions    |                       |       |
|      |          | electronically. |                       |       |
|      |          |                 |                       |       |
|      |          | Program and     |                       |       |
|      |          | financial data  |                       |       |
|      |          | are received by |                       |       |
|      |          | FIs which were  |                       |       |
|      |          | initially       |                       |       |
|      |          | remitted        |                       |       |
|      |          | through various |                       |       |
|      |          | mechanisms      |                       |       |
|      |          | including over  |                       |       |
|      |          | the counter,    |                       |       |
|      |          | Web page, mail, |                       |       |
|      |          | electronic      |                       |       |
|      |          | terminal,       |                       |       |
|      |          | electronic      |                       |       |
|      |          | file, phone,    |                       |       |
|      |          | etc.            |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Designated      | Agencies must record  |       |
| 4.   | Deposits | agency          | and maintain          |       |
| 4.11 | Cash,    | personnel       | sufficient supporting |       |
|      | Checks   | prepare deposit | documentation for     |       |
|      |          | tickets (SF215) | each deposit to       |       |
|      |          | for cash and    | support the           |       |
|      |          | checks received | application of        |       |
|      |          | and make        | receipts to customer  |       |
|      |          | deposits to the | subsidiary records    |       |
|      |          | designated      | and the general       |       |
|      |          | financial       | ledger.               |       |
|      |          | institution.    |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Settle   | Settlement      | Settlement results in |       |
| 4.   | Tran     | occurs at both  | a deposit at the      |       |
| 4.12 | sactions | financial       | applicable            |       |
|      |          | institutions    | institution.          |       |
|      |          | and FRBs acting |                       |       |
|      |          | on behalf of    |                       |       |
|      |          | Treasury.       |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Treasury | Treasury makes  | Treasury will use the |       |
| 4.   | P        | collections     | (TRS) as a            |       |
| 4.13 | opulates | data available  | centralized           |       |
|      | the Data | to agencies by  | repository of         |       |
|      | Re       | populating the  | detailed collection   |       |
|      | pository | Transaction     | transaction           |       |
|      |          | Reporting       | information. It will  |       |
|      |          | System (TRS)    | provide a single      |       |
|      |          | data            | touch point from      |       |
|      |          | repository.     | which an Agency can   |       |
|      |          |                 | obtain transaction    |       |
|      |          |                 | data and standard     |       |
|      |          |                 | reports, integrating  |       |
|      |          |                 | information across    |       |
|      |          |                 | all collections       |       |
|      |          |                 | channels and          |       |
|      |          |                 | settlement            |       |
|      |          |                 | mechanisms.           |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Con      | The deposit     | Concentration is      |       |
| 4.   | centrate | data for the    | performed by          |       |
| 4.14 | Col      | funds from      | applicable systems at |       |
|      | lections | Commercial FIs  | FRBs and/or           |       |
|      |          | and the FRBs    | commercial FIs.       |       |
|      |          | are             |                       |       |
|      |          | concentrated    | Concentration moves   |       |
|      |          | and recorded in | funds from an account |       |
|      |          | the Treasury    | that settles the      |       |
|      |          | General Account | transactions to the   |       |
|      |          | (TGA) Fund.     | Treasury General      |       |
|      |          |                 | Account Fund at the   |       |
|      |          |                 | Federal Reserve Bank  |       |
|      |          |                 | of New York.          |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | The TRS data includes |       |
| 4.   | D        | downloads       | Treasury              |       |
| 4.15 | ownloads | Treasury        | confirmations of      |       |
|      | Treasury | collections     | deposit tickets and   |       |
|      | Data     | data, including | credit/debit card     |       |
|      |          | both summary    | transactions as well  |       |
|      |          | and detailed    | as all other          |       |
|      |          | transaction     | transactions          |       |
|      |          | records.        | processed by          |       |
|      |          |                 | Treasury.             |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | Treasury        | The TRS data, which   |       |
| 4.   | Re       | records of      | will be available     |       |
| 4.16 | conciles | agency deposits | daily, is used to     |       |
|      | Cash,    | are reconciled  | confirm Treasury      |       |
|      | Checks,  | by the Agency   | received and recorded |       |
|      | Cred     | to its records  | the transactions. A   |       |
|      | it/Debit | of deposits     | timing difference may |       |
|      | Card     | made.           | occur between the     |       |
|      | Inf      |                 | time the agency       |       |
|      | ormation |                 | records the           |       |
|      | to       |                 | collection and the    |       |
|      | Treasury |                 | time the collection   |       |
|      | Data     |                 | is reflected in TRS.  |       |
|      |          |                 |                       |       |
|      |          |                 | Agencies must         |       |
|      |          |                 | reconcile their       |       |
|      |          |                 | records of deposits   |       |
|      |          |                 | to Treasury records   |       |
|      |          |                 | of deposits on a      |       |
|      |          |                 | periodic basis. These |       |
|      |          |                 | reconciliation        |       |
|      |          |                 | procedures must be    |       |
|      |          |                 | performed until       |       |
|      |          |                 | un-reconciled items   |       |
|      |          |                 | are resolved. All     |       |
|      |          |                 | resolutions should be |       |
|      |          |                 | made on a timely      |       |
|      |          |                 | basis.                |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Treasury | Treasury or the |                       |       |
| 4.   | Collects | DOJ transmits   |                       |       |
| 4.17 | De       | data to the     |                       |       |
|      | linquent | agency for      |                       |       |
|      | Debt     | collections of  |                       |       |
|      |          | delinquent debt |                       |       |
|      |          | with the public |                       |       |
|      |          | collected on    |                       |       |
|      |          | behalf of the   |                       |       |
|      |          | agency.         |                       |       |
+------+----------+-----------------+-----------------------+-------+
| RM   | Agency   | The agency      | Best practice is to   |       |
| 4.   | Receives | receives        | record collections    |       |
| 4.18 | Receipts | collections and | data to reflect the   |       |
|      | Data on  | receipts data   | current status of the |       |
|      | De       | from Treasury,  | bill.                 |       |
|      | linquent | via IPAC, on    |                       |       |
|      | Debt     | delinquent debt |                       |       |
|      | With the | with the        |                       |       |
|      | Public   | public.         |                       |       |
+------+----------+-----------------+-----------------------+-------+

##  **Application of Receipts**

Receipts should be recorded as quickly as possible. Application of
receipts may be supported by information from the impacted business area
to support timely and accurate posting. This chapter addresses four
general ledger recording scenarios for receipts:

-   unapplied collections;

-   receipts against a customer account but not against a specific bill;

-   receipts against a customer account and a specific bill; and

-   receipts applied against Treasury's general fund.

Receipts are recorded regardless of whether they are associated with
transactions previously established as a receivable.  The following
flowchart provides key steps in the processes agencies use to process
and record receipts information to customer/debtor accounts and the
general ledger. 

## RM 4.5 -- Application of Receipts Flowchart {#rm-4.5-application-of-receipts-flowchart .unnumbered}

![](media/image10.wmf){width="6.990277777777778in"
height="5.340277777777778in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Application of Receipts process steps are
described as follows:

+-------+----------+-----------------+-----------------------+-------+
| >     | Step     | Step            | Business Rules        | CFSR  |
|  Step | Name     | Description     |                       | Req.  |
| > ID  |          |                 |                       |       |
+=======+==========+=================+=======================+=======+
| > RM  | Col      | This data       | Collection data must  | R     |
| >     | lections | represents      | be captured and       | MD-01 |
| 4.5.1 | Data     | remittances     | recorded.             |       |
|       | I        | made directly   |                       |       |
|       | nitially | to the agency.  |                       |       |
|       | P        |                 |                       |       |
|       | rocessed |                 |                       |       |
|       | at       |                 |                       |       |
|       | Agency   |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tran     | This data has   |                       |       |
| 4.5.2 | sactions | been downloaded |                       |       |
|       | from     | and sorted by   |                       |       |
|       | Treasury | transaction     |                       |       |
|       | Data     | type and        |                       |       |
|       | Re       | includes both   |                       |       |
|       | pository | remittance      |                       |       |
|       |          | information     |                       |       |
|       |          | originally      |                       |       |
|       |          | received        |                       |       |
|       |          | directly by the |                       |       |
|       |          | agency as well  |                       |       |
|       |          | as remittance   |                       |       |
|       |          | information     |                       |       |
|       |          | originally      |                       |       |
|       |          | received at     |                       |       |
|       |          | Treasury.       |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Diffe    | Finance         | Prior to processing   | T     |
| 4.5.3 | rentiate | determines      | Treasury data in Core | LD-05 |
|       | Data for | whether         | Financial System, the |       |
|       | Col      | transactions    | agency applies edit   |       |
|       | lections | from TRS were   | checks to each        |       |
|       | I        | initially       | collection            |       |
|       | nitially | processed by    | transaction from TRS  |       |
|       | P        | the agency or   | to determine whether  |       |
|       | rocessed | initially       | it was initially      |       |
|       | at       | processed at    | processed by the      |       |
|       | Agency   | Treasury.       | agency and then       |       |
|       | from     |                 | submitted to          |       |
|       | Col      |                 | Treasury. For         |       |
|       | lections |                 | example, cash,        |       |
|       | I        |                 | checks, and           |       |
|       | nitially |                 | credit/debit card     |       |
|       | P        |                 | transactions          |       |
|       | rocessed |                 | originally submitted  |       |
|       | at       |                 | directly to the       |       |
|       | Treasury |                 | agency would have     |       |
|       |          |                 | already been recorded |       |
|       |          |                 | in the                |       |
|       |          |                 | customer/debtor       |       |
|       |          |                 | subsidiary records    |       |
|       |          |                 | and the general       |       |
|       |          |                 | ledger. The TRS data  |       |
|       |          |                 | is used to confirm    |       |
|       |          |                 | Treasury received and |       |
|       |          |                 | recorded the          |       |
|       |          |                 | transactions one or   |       |
|       |          |                 | more days after the   |       |
|       |          |                 | agency has received   |       |
|       |          |                 | and recorded the      |       |
|       |          |                 | collections.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Pre      | Each file of    | Edit and validity     | T     |
| 4.5.4 | -Process | transactions    | checks are applied to | LD-02 |
|       | Co       | downloaded from | each transaction file |       |
|       | llection | TRS and other   | to determine whether  | T     |
|       | Tran     | sources is      | required data has     | LD-03 |
|       | sactions | subjected to    | been provided and     |       |
|       |          | edit and        | whether the file is a | T     |
|       |          | validity checks | duplicate which has   | LD-05 |
|       |          | prior to being  | already been          |       |
|       |          | processed in    | processed by the      |       |
|       |          | Core Financial  | agency. Automated     |       |
|       |          | System.         | checks are applied to |       |
|       |          |                 | validate such         |       |
|       |          |                 | specifications as the |       |
|       |          |                 | file layout, number   |       |
|       |          |                 | of fields, validity   |       |
|       |          |                 | of applicable fields, |       |
|       |          |                 | completeness, and     |       |
|       |          |                 | header and trailer    |       |
|       |          |                 | records.              |       |
|       |          |                 |                       |       |
|       |          |                 | Key data required can |       |
|       |          |                 | include customer      |       |
|       |          |                 | number, invoice       |       |
|       |          |                 | number and associated |       |
|       |          |                 | amounts, Treasury     |       |
|       |          |                 | Account Symbol (TAS), |       |
|       |          |                 | Treasury              |       |
|       |          |                 | Appropriation Fund    |       |
|       |          |                 | Symbol (TAFS), Agency |       |
|       |          |                 | Location Code (ALC),  |       |
|       |          |                 | and other applicable  |       |
|       |          |                 | Agency information.   |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | Based on the    | Agencies should       | T     |
| 4.5.5 | uplicate | results of edit | evaluate internal     | LD-05 |
|       | File?    | and validity    | controls and          |       |
|       |          | checks, the     | determine whether     |       |
|       |          | Agency          | they are adequate for |       |
|       |          | determines      | preventing the        |       |
|       |          | whether the     | loading of a          |       |
|       |          | files from      | duplicate file into   |       |
|       |          | Treasury or     | the Core Financial    |       |
|       |          | other sources   | System. Agencies must |       |
|       |          | represent       | implement procedures  |       |
|       |          | duplicate files | to readily identify   |       |
|       |          | previously      | duplicate files prior |       |
|       |          | processed by    | to loading such files |       |
|       |          | the agency.     | to the Core Financial |       |
|       |          |                 | System.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | A duplicate     | Agencies should       | T     |
| 4.5.6 | File     | file is         | develop and implement | LD-04 |
|       |          | rejected and    | applicable internal   |       |
|       |          | not processed.  | controls to prevent   | T     |
|       |          |                 | processing of         | LD-06 |
|       |          |                 | duplicate files.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tra      | Transactions    | Agencies must         | T     |
| 4.5.7 | nsaction | lacking data in | implement data        | LD-05 |
|       | Proc     | required fields | validity checks to    |       |
|       | essable? | are not         | identify transaction  |       |
|       |          | processable.    | record fields with    |       |
|       |          |                 | incomplete or invalid |       |
|       |          |                 | data prior to loading |       |
|       |          |                 | such data to the Core |       |
|       |          |                 | Financial System.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tra      | The Core        | Transaction record    | T     |
| 4.5.8 | nsaction | Financial       | fields with           | LD-04 |
|       | in Error | System          | incomplete or invalid |       |
|       |          | generates a     | data result in a      | T     |
|       |          | file of         | transaction being     | LD-06 |
|       |          | transactions    | categorized as an     |       |
|       |          | considered to   | error.                |       |
|       |          | be in error     |                       |       |
|       |          | status because  |                       |       |
|       |          | one or more key |                       |       |
|       |          | required fields |                       |       |
|       |          | (e.g., customer |                       |       |
|       |          | number,         |                       |       |
|       |          | organization    |                       |       |
|       |          | code) lack      |                       |       |
|       |          | valid data.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Research | The agency      | Collection            | T     |
| 4.5.9 | and      | researches and  | transactions in error | LD-04 |
|       | Correct  | cor             | must be               |       |
|       | Tra      | rects/completes | corrected/edited to   | T     |
|       | nsaction | data for        | enable processing of  | LD-05 |
|       | in Error | transactions in | those transactions in |       |
|       |          | error.          | the Core Financial    |       |
|       |          |                 | System.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tran     | Transactions    | Agencies should       | T     |
| 4     | sactions | are processed   | develop appropriate   | LD-01 |
| .5.10 | P        | in the Core     | internal controls and |       |
|       | rocessed | Financial       | related procedures to | T     |
|       | in Core  | System.         | enable accurate and   | LD-03 |
|       | F        |                 | complete processing   |       |
|       | inancial |                 | of transactions in    | T     |
|       | System   |                 | the Core Financial    | LD-04 |
|       |          |                 | System.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | Based on the    | Key data fields are   | S     |
| 4     | uplicate | results of edit | validated to identify | MB-06 |
| .5.11 | Tran     | and validity    | duplicate             |       |
|       | saction? | checks, the     | transactions.         |       |
|       |          | Core Financial  |                       |       |
|       |          | System          |                       |       |
|       |          | determines      |                       |       |
|       |          | whether         |                       |       |
|       |          | individual      |                       |       |
|       |          | transactions    |                       |       |
|       |          | represent       |                       |       |
|       |          | duplicates of   |                       |       |
|       |          | transactions    |                       |       |
|       |          | already         |                       |       |
|       |          | processed in    |                       |       |
|       |          | the Core        |                       |       |
|       |          | Financial       |                       |       |
|       |          | System.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | Duplicate       | A report should be    |       |
| 4     | Tra      | transactions    | generated to track    |       |
| .5.12 | nsaction | are rejected by | rejected              |       |
|       |          | the Core        | transactions.         |       |
|       |          | Financial       | Agencies should       |       |
|       |          | System.         | implement procedures  |       |
|       |          |                 | to research and       |       |
|       |          |                 | correct the cause of  |       |
|       |          |                 | such duplicate        |       |
|       |          |                 | transactions.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | The Core        | For collections       | R     |
| 4     | llection | Financial       | against receivables,  | MD-02 |
| .5.13 | against  | System          | an agency must        |       |
|       | a        | determines      | reference the         | R     |
|       | Rec      | whether the     | receivable document   | MD-03 |
|       | eivable? | collection      | and update customer   |       |
|       |          | pertains to an  | records and related   |       |
|       |          | account         | billing information.  |       |
|       |          | receivable or   |                       |       |
|       |          | represents a    | For collections       |       |
|       |          | collection for  | without receivables,  |       |
|       |          | which there is  | an agency must record |       |
|       |          | not an existing | collections with      |       |
|       |          | account         | corresponding         |       |
|       |          | receivable.     | revenues, expenditure |       |
|       |          |                 | reductions,           |       |
|       |          |                 | advance/prepayment    |       |
|       |          |                 | reclassifications or  |       |
|       |          |                 | other offsets.        |       |
|       |          |                 |                       |       |
|       |          |                 | Examples of           |       |
|       |          |                 | collections without   |       |
|       |          |                 | receivables include   |       |
|       |          |                 | over the counter      |       |
|       |          |                 | purchase, early       |       |
|       |          |                 | payment, etc.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | Determine       | Compare the customer  |       |
| 4     | llection | whether the     | account in the        |       |
| .5.14 | Data     | collection data | transaction record to |       |
|       | Contains | includes a      | the customer accounts |       |
|       | Customer | valid customer  | established as        |       |
|       | Account? | account.        | described in section  |       |
|       |          |                 | RM 4.1.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | Determine       | Apply data checks to  |       |
| 4     | llection | whether the     | determine whether the |       |
| .5.15 | Against  | collection      | agency invoice number |       |
|       | a        | transaction     | is present or can be  |       |
|       | Rec      | includes the    | determined from other |       |
|       | eivable? | necessary data  | applicable            |       |
|       |          | to be recorded  | information such as a |       |
|       |          | to a specific   | purchase order.       |       |
|       |          | invoice on a    |                       |       |
|       |          | customer        |                       |       |
|       |          | account.        |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | The collection  | The entries are       |       |
| 4     | llection | is recorded in  | recorded in the       |       |
| .5.16 | is       | the customer    | general ledger using  |       |
|       | Recorded | account.        | the USSGL Account     |       |
|       | in       |                 | Transaction Listing   |       |
|       | Customer |                 | provided in the TFM.  |       |
|       | Account  |                 | Examples include, but |       |
|       | and      |                 | are not limited to,   |       |
|       | General  |                 | the following         |       |
|       | Ledger   |                 | transaction codes     |       |
|       |          |                 | from the current TFM: |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C109 To record    |       |
|       |          |                 | the receipt of        |       |
|       |          |                 | previously            |       |
|       |          |                 | anticipated           |       |
|       |          |                 | collections.          |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C138 To record    |       |
|       |          |                 | the collection of     |       |
|       |          |                 | refunds receivable    |       |
|       |          |                 | for assets purchased  |       |
|       |          |                 | or expenses incurred  |       |
|       |          |                 | in the current year   |       |
|       |          |                 | that create budgetary |       |
|       |          |                 | resources when        |       |
|       |          |                 | collected.            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C414 To record    |       |
|       |          |                 | refund receivables    |       |
|       |          |                 | from non-Federal      |       |
|       |          |                 | sources for assets or |       |
|       |          |                 | expenses that do not  |       |
|       |          |                 | create budgetary      |       |
|       |          |                 | resources until       |       |
|       |          |                 | collected.            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C640 To record    |       |
|       |          |                 | the proceeds from     |       |
|       |          |                 | commodities sold.     |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C646 To record    |       |
|       |          |                 | the sale or           |       |
|       |          |                 | disposition of assets |       |
|       |          |                 | other than personal   |       |
|       |          |                 | properties and        |       |
|       |          |                 | investments.          |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | applying payments     |       |
|       |          |                 | against delinquent    |       |
|       |          |                 | debt, see Treasury\'s |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables* and the  |       |
|       |          |                 | Federal Claims        |       |
|       |          |                 | Collections           |       |
|       |          |                 | Standards. This       |       |
|       |          |                 | guidance particularly |       |
|       |          |                 | illustrates the order |       |
|       |          |                 | in which the payment  |       |
|       |          |                 | is applied against    |       |
|       |          |                 | delinquent debt       |       |
|       |          |                 | classes and also      |       |
|       |          |                 | provides exceptions   |       |
|       |          |                 | to that application   |       |
|       |          |                 | order.                |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Id       | Transactions    | The entries are       | R     |
| 4     | entified | that pass all   | recorded using the    | MD-02 |
| .5.17 | Co       | edit and        | USSGL Account         |       |
|       | llection | validity checks | Transaction Listing   | R     |
|       | is       | are applied to  | provided in the TFM.  | MD-04 |
|       | Recorded | a specific      | Examples include, but |       |
|       | to       | customer/debtor | are not limited to,   | R     |
|       | Specific | bill as well as | the following         | MD-06 |
|       | Bill in  | the General     | transaction codes     |       |
|       | General  | Ledger.         | from the current TFM: | R     |
|       | Ledger   |                 |                       | MD-07 |
|       |          |                 | TFM C109 To record    |       |
|       |          |                 | the receipt of        |       |
|       |          |                 | previously            |       |
|       |          |                 | anticipated           |       |
|       |          |                 | collections.          |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C138 To record    |       |
|       |          |                 | the collection of     |       |
|       |          |                 | refunds receivable    |       |
|       |          |                 | for assets purchased  |       |
|       |          |                 | or expenses incurred  |       |
|       |          |                 | in the current year   |       |
|       |          |                 | that create budgetary |       |
|       |          |                 | resources when        |       |
|       |          |                 | collected.            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C414 To record    |       |
|       |          |                 | refund receivables    |       |
|       |          |                 | from non-Federal      |       |
|       |          |                 | sources for assets or |       |
|       |          |                 | expenses that do not  |       |
|       |          |                 | create budgetary      |       |
|       |          |                 | resources until       |       |
|       |          |                 | collected.            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C640 To record    |       |
|       |          |                 | the proceeds from     |       |
|       |          |                 | commodities sold.     |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C646 To record    |       |
|       |          |                 | the sale or           |       |
|       |          |                 | disposition of assets |       |
|       |          |                 | other than personal   |       |
|       |          |                 | properties and        |       |
|       |          |                 | investments.          |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies would also   |       |
|       |          |                 | record the collection |       |
|       |          |                 | of delinquent debts   |       |
|       |          |                 | that have been        |       |
|       |          |                 | written-off, closed   |       |
|       |          |                 | out or waived.        |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | provides guidance to  |       |
|       |          |                 | allow agencies to     |       |
|       |          |                 | develop procedures    |       |
|       |          |                 | for the pursuit of    |       |
|       |          |                 | collection after      |       |
|       |          |                 | classification of     |       |
|       |          |                 | debt into a write     |       |
|       |          |                 | off/currently not     |       |
|       |          |                 | collectable status.   |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tra      | For collections | The Core Financial    |       |
| 4     | nsaction | not on an       | System applies edit   |       |
| .5.18 | Data     | existing        | and validity checks   |       |
|       | Complete | account         | to determine if the   |       |
|       | and      | receivable, the | collections data      |       |
|       | Valid?   | Core Financial  | provided is           |       |
|       |          | System          | sufficient to record  |       |
|       |          | determines      | applicable entries to |       |
|       |          | whether the     | the General Ledger.   |       |
|       |          | transaction     | General Ledger        |       |
|       |          | data is         | accounts that may be  |       |
|       |          | complete and    | affected by a         |       |
|       |          | valid.          | transaction involving |       |
|       |          |                 | a collection are      |       |
|       |          |                 | revenues,             |       |
|       |          |                 | expenditures,         |       |
|       |          |                 | advances/prepayments, |       |
|       |          |                 | or other offsets.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | Collections are | The entries are       |       |
| 4     | llection | recorded to     | recorded using the    |       |
| .5.19 | is       | applicable      | USSGL Account         |       |
|       | Recorded | accounts.       | Transaction Listing   |       |
|       | in       |                 | provided in the TFM.  |       |
|       | General  |                 | Examples include, but |       |
|       | Ledger   |                 | are not limited to,   |       |
|       |          |                 | the following         |       |
|       |          |                 | transaction codes     |       |
|       |          |                 | from the current TFM: |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C640 To record    |       |
|       |          |                 | the proceeds from     |       |
|       |          |                 | commodities sold.     |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C646 To record    |       |
|       |          |                 | the sale or           |       |
|       |          |                 | disposition of assets |       |
|       |          |                 | other than personal   |       |
|       |          |                 | properties and        |       |
|       |          |                 | investments.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | U        | Collection      | Agencies record       |       |
| 4     | napplied | transactions    | unapplied collections |       |
| .5.20 | Co       | lacking key     | to applicable         |       |
|       | llection | information     | accounts as permitted |       |
|       | is       | required to be  | under Treasury        |       |
|       | Recorded | applied to      | guidance.             |       |
|       | in       | customer        |                       |       |
|       | General  | accounts and/or | The entries are       |       |
|       | Ledger   | revenue         | recorded using the    |       |
|       |          | accounts are    | USSGL Account         |       |
|       |          | recorded as     | Transaction Listing   |       |
|       |          | unapplied       | provided in the TFM.  |       |
|       |          | collections in  | Examples include, but |       |
|       |          | the General     | are not limited to,   |       |
|       |          | Ledger.         | the following         |       |
|       |          |                 | transaction codes     |       |
|       |          |                 | from the current TFM: |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C108 To record    |       |
|       |          |                 | the receipts reported |       |
|       |          |                 | into deposit funds    |       |
|       |          |                 | and clearing          |       |
|       |          |                 | accounts.             |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C152 To record    |       |
|       |          |                 | unapplied receipts    |       |
|       |          |                 | into fund symbols     |       |
|       |          |                 | that require          |       |
|       |          |                 | budgetary reporting.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Research | The agency      | Agencies must monitor |       |
| 4     | U        | researches      | the status of each    |       |
| .5.21 | nmatched | transactions    | unapplied collection. |       |
|       | Tran     | that are not    | Such monitoring can   |       |
|       | sactions | matched to a    | include aging         |       |
|       |          | customer/debtor | reports, tracking of  |       |
|       |          | account or      | types of collections, |       |
|       |          | other valid     | data queries, etc.    |       |
|       |          | collection      |                       |       |
|       |          | type.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Is       | Finance         | Agencies design and   |       |
| 4     | Su       | determines      | implement workflow    |       |
| .5.22 | pporting | whether         | processes in and      |       |
|       | Inf      | sufficient      | around the CFSR that  |       |
|       | ormation | supporting      | move information on   |       |
|       | Av       | information is  | unapplied collections |       |
|       | ailable? | available to    | to appropriate areas  |       |
|       |          | research and    | for research and      |       |
|       |          | resolve         | resolution.           |       |
|       |          | unapplied       |                       |       |
|       |          | collections.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Evaluate | Supporting      | Finance monitors and  |       |
| 4     | Su       | information     | evaluates the         |       |
| .5.23 | pporting | received is     | responses to          |       |
|       | Inf      | evaluated to    | information requests  |       |
|       | ormation | determine if    | related to unapplied  |       |
|       |          | sufficient      | collections.          |       |
|       |          | information     |                       |       |
|       |          | exists to       |                       |       |
|       |          | properly        |                       |       |
|       |          | identify and    |                       |       |
|       |          | apply           |                       |       |
|       |          | collection      |                       |       |
|       |          | transactions.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Co       | If sufficient   |                       |       |
| 4     | llection | information has |                       |       |
| .5.24 | Issue    | been received   |                       |       |
|       | R        | and input to    |                       |       |
|       | esolved? | collection      |                       |       |
|       |          | transaction     |                       |       |
|       |          | records,        |                       |       |
|       |          | Finance records |                       |       |
|       |          | the             |                       |       |
|       |          | transactions to |                       |       |
|       |          | the General     |                       |       |
|       |          | Ledger as       |                       |       |
|       |          | identified      |                       |       |
|       |          | collections.    |                       |       |
|       |          | Previous        |                       |       |
|       |          | entries to      |                       |       |
|       |          | record          |                       |       |
|       |          | unapplied       |                       |       |
|       |          | collections are |                       |       |
|       |          | reversed.       |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Is       | If the          | Cost effective        |       |
| 4     | Further  | unidentified    | efforts should        |       |
| .5.25 | Research | collection      | continue if an agency |       |
|       | Wa       | issue is not    | determines that such  |       |
|       | rranted? | resolved,       | efforts have some     |       |
|       |          | Finance         | potential to result   |       |
|       |          | determines      | in resolution of the  |       |
|       |          | whether further | collection issue.     |       |
|       |          | research        |                       |       |
|       |          | efforts are     | Agencies may use      |       |
|       |          | warranted.      | discretion in         |       |
|       |          |                 | determining threshold |       |
|       |          |                 | amounts below which   |       |
|       |          |                 | it is not considered  |       |
|       |          |                 | cost effective to     |       |
|       |          |                 | continue efforts to   |       |
|       |          |                 | resolve the           |       |
|       |          |                 | collection issue.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Request  | Request         |                       |       |
| 4     | Su       | information     |                       |       |
| .5.26 | pporting | from the        |                       |       |
|       | Inf      | business unit   |                       |       |
|       | ormation | (functional     |                       |       |
|       |          | area) that can  |                       |       |
|       |          | assist in       |                       |       |
|       |          | properly        |                       |       |
|       |          | identifying the |                       |       |
|       |          | collection      |                       |       |
|       |          | transactions.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Document | Further         | The decision not to   |       |
| 4     | Dis      | research is not | perform further       |       |
| .5.27 | position | warranted to    | research should be    |       |
|       | of       | resolve the     | reviewed, approved,   |       |
|       | Receipt  | unidentified.   | and documented by a   |       |
|       |          |                 | supervisor.           |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies should       |       |
|       |          |                 | monitor and maintain  |       |
|       |          |                 | records of            |       |
|       |          |                 | collections that will |       |
|       |          |                 | not be applied and    |       |
|       |          |                 | will be recorded as   |       |
|       |          |                 | miscellaneous         |       |
|       |          |                 | receipts to the       |       |
|       |          |                 | Treasury general      |       |
|       |          |                 | fund.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | General  | Reverse the     | The entries are       |       |
| 4     | Fund     | entry           | recorded using the    |       |
| .5.28 | Receipt  | originally      | USSGL Account         |       |
|       | is       | recorded as an  | Transaction Listing   |       |
|       | Recorded | unapplied       | logic provided in the |       |
|       | in       | collection and  | TFM. Examples         |       |
|       | General  | record the      | include, but are not  |       |
|       | Ledger   | collection to a | limited to, the       |       |
|       |          | miscellaneous   | following transaction |       |
|       |          | receipts        | code from the current |       |
|       |          | account within  | TFM:                  |       |
|       |          | the general     |                       |       |
|       |          | fund of the     | TFM C141 To record    |       |
|       |          | Treasury.       | the collection of     |       |
|       |          |                 | custodial revenue     |       |
|       |          |                 | from a non-Federal    |       |
|       |          |                 | source that is        |       |
|       |          |                 | deposited to a        |       |
|       |          |                 | miscellaneous receipt |       |
|       |          |                 | account.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolved | If the resolved |                       |       |
| 4     | Item is  | item represents |                       |       |
| .5.29 | a        | a collection on |                       |       |
|       | Co       | a specific bill |                       |       |
|       | llection | on a customer   |                       |       |
|       | on a     | account, it is  |                       |       |
|       | Bill?    | recorded to the |                       |       |
|       |          | customer        |                       |       |
|       |          | account         |                       |       |
|       |          | receivable and  |                       |       |
|       |          | the general     |                       |       |
|       |          | ledger. If the  |                       |       |
|       |          | resolved item   |                       |       |
|       |          | represents a    |                       |       |
|       |          | collection for  |                       |       |
|       |          | which an        |                       |       |
|       |          | accounts        |                       |       |
|       |          | receivable was  |                       |       |
|       |          | not applicable, |                       |       |
|       |          | the applicable  |                       |       |
|       |          | entries to      |                       |       |
|       |          | revenues,       |                       |       |
|       |          | expenditures,   |                       |       |
|       |          | advanc          |                       |       |
|       |          | es/prepayments, |                       |       |
|       |          | or other        |                       |       |
|       |          | offsets are     |                       |       |
|       |          | recorded in the |                       |       |
|       |          | general ledger  |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Dunning**

Dunning is the process of communicating with customers to ensure the
collection of eligible (delinquent) accounts receivable. Except in rare
circumstances, Treasury's *Managing Federal Receivables* provides that
no more than two dunning letters should be sent.  The additional
intervals described in this process allow an agency the option of
sending more than two dunning letters, if needed.  Dunning is integral
to an agencies' due diligence prior to referral to FedDebt (FMS). The
following flowchart provides key steps in the processes agencies use to
perform dunning procedures on eligible customer/debtor accounts.

## RM 4.6 -- Dunning Flowchart {#rm-4.6-dunning-flowchart .unnumbered}

![](media/image11.wmf){width="6.990277777777778in" height="5.3in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Dunning process steps are described as
follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Dunning  | Each account    | An eligible account   |       |
| 4.6.1 | Interval | receivable is   | receivable is dunned  |       |
|       | 1        | regularly       | at the first          |       |
|       | E        | evaluated to    | applicable and        |       |
|       | ligible? | determine if it | subsequent time       |       |
|       |          | is delinquent   | intervals. Accounts   |       |
|       |          | and therefore   | are dunned at         |       |
|       |          | eligible for    | periodic intervals    |       |
|       |          | dunning.        | (e.g., 30-day         |       |
|       |          |                 | intervals).           |       |
|       |          |                 |                       |       |
|       |          |                 | Delinquent accounts   |       |
|       |          |                 | should be dunned      |       |
|       |          |                 | based on Federal      |       |
|       |          |                 | statutes such as the  |       |
|       |          |                 | Debt Collection Act   |       |
|       |          |                 | of 1982 and the Debt  |       |
|       |          |                 | Collection            |       |
|       |          |                 | Improvement Act of    |       |
|       |          |                 | 1996, Federal         |       |
|       |          |                 | regulations on debt   |       |
|       |          |                 | collection, such as   |       |
|       |          |                 | the Federal Claims    |       |
|       |          |                 | Collection Standards, |       |
|       |          |                 | government-wide debt  |       |
|       |          |                 | collection guidance   |       |
|       |          |                 | such as OMB Circular  |       |
|       |          |                 | A-129 and Treasury's  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*, and, in |       |
|       |          |                 | addition to, agency   |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Interest is     | Calculate and record  | R     |
| 4.6.2 | Interest | calculated and  | late payment interest | MC-01 |
|       |          | applied to the  | based on Treasury\'s  |       |
|       |          | account as of   | Current Value of      | R     |
|       |          | the end date of | Funds Rate (CVFR)     | MC-02 |
|       |          | Interval 1.     | unless otherwise      |       |
|       |          |                 | specified by the      |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Best practice for     |       |
|       |          |                 | applying interest to  |       |
|       |          |                 | delinquent debts is   |       |
|       |          |                 | to assess interest    |       |
|       |          |                 | based on the original |       |
|       |          |                 | invoice date.         |       |
|       |          |                 |                       |       |
|       |          |                 | For additionally      |       |
|       |          |                 | guidance on applying  |       |
|       |          |                 | interest to           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and the Debt          |       |
|       |          |                 | Collection Act of     |       |
|       |          |                 | 1982.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Administrative  | Calculate and record  | R     |
| 4.6.3 | Admini   | Costs are       | administrative costs  | MC-03 |
|       | strative | applied at      | in accordance with    |       |
|       | Costs    | Dunning         | agency policy and     |       |
|       |          | Interval 1.     | procedures.           |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of fees,  |       |
|       |          |                 | incurred as a result  |       |
|       |          |                 | of debt collection    |       |
|       |          |                 | activity on           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | A Dunning       | The dunning letter is | R     |
| 4.6.4 | Dunning  | Letter is       | sent via electronic   | MC-06 |
|       | Letter   | generated and   | media or in hard      |       |
|       | for      | sent to the     | copy, as appropriate  | R     |
|       | Interval | c               | for the               | MC-07 |
|       | 1        | ustomer/debtor. | customer/debtor.      |       |
|       |          |                 |                       | R     |
|       |          |                 |                       | MB-20 |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | A dunning       | The dunning letter    |       |
| 4.6.5 | Letter   | letter is the   | should describe the   |       |
|       | Interval | output from     | status of the debt as |       |
|       | 1        | Step 4.         | overdue and include:  |       |
|       |          |                 | names/titles of       |       |
|       |          |                 | debtor or responsible |       |
|       |          |                 | parties, amount owed, |       |
|       |          |                 | remittance terms and  |       |
|       |          |                 | conditions and        |       |
|       |          |                 | applicable payment    |       |
|       |          |                 | due date. Terms and   |       |
|       |          |                 | conditions must       |       |
|       |          |                 | include actions that  |       |
|       |          |                 | can be taken to       |       |
|       |          |                 | collect the           |       |
|       |          |                 | outstanding debt.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | The account is  | The following         |       |
| 4.6.6 | Interval | due for dunning | business rules repeat |       |
|       | 2        | at Interval 2   | those in step RM      |       |
|       | E        | if it remains   | 4.6.1:                |       |
|       | ligible? | delinquent and  |                       |       |
|       |          | has already     | An eligible account   |       |
|       |          | been dunned at  | receivable is dunned  |       |
|       |          | Interval 1.     | at the first          |       |
|       |          |                 | applicable and        |       |
|       |          |                 | subsequent time       |       |
|       |          |                 | intervals. Accounts   |       |
|       |          |                 | are dunned at         |       |
|       |          |                 | periodic intervals    |       |
|       |          |                 | (e.g., 30-day         |       |
|       |          |                 | intervals).           |       |
|       |          |                 |                       |       |
|       |          |                 | Delinquent accounts   |       |
|       |          |                 | should be dunned      |       |
|       |          |                 | based on Federal      |       |
|       |          |                 | statutes such as the  |       |
|       |          |                 | Debt Collection Act   |       |
|       |          |                 | of 1982 and the Debt  |       |
|       |          |                 | Collection            |       |
|       |          |                 | Improvement Act of    |       |
|       |          |                 | 1996, Federal         |       |
|       |          |                 | regulations on debt   |       |
|       |          |                 | collection, such as   |       |
|       |          |                 | the Federal Claims    |       |
|       |          |                 | Collection Standards, |       |
|       |          |                 | government-wide debt  |       |
|       |          |                 | collection guidance   |       |
|       |          |                 | such as OMB Circular  |       |
|       |          |                 | A-129 and Treasury's  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*, and, in |       |
|       |          |                 | addition to, agency   |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Interest is     | The following         |       |
| 4.6.7 | Interest | calculated and  | business rules repeat |       |
|       |          | applied to the  | those in step RM      |       |
|       |          | account as of   | 4.6.2:                |       |
|       |          | the end date of |                       |       |
|       |          | Interval 2.     | Calculate and record  |       |
|       |          |                 | late payment interest |       |
|       |          |                 | based on Treasury\'s  |       |
|       |          |                 | Current Value of      |       |
|       |          |                 | Funds Rate (CVFR)     |       |
|       |          |                 | unless otherwise      |       |
|       |          |                 | specified by the      |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Best practice for     |       |
|       |          |                 | applying interest to  |       |
|       |          |                 | delinquent debts is   |       |
|       |          |                 | to assess interest    |       |
|       |          |                 | based on the original |       |
|       |          |                 | invoice date.         |       |
|       |          |                 |                       |       |
|       |          |                 | For additional        |       |
|       |          |                 | guidance on applying  |       |
|       |          |                 | interest to           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and the Debt          |       |
|       |          |                 | Collection Act of     |       |
|       |          |                 | 1982.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Administrative  | The following         |       |
| 4.6.8 | Admini   | costs are       | business rules repeat |       |
|       | strative | applied at      | those in step RM      |       |
|       | Costs    | Dunning         | 4.6.3:                |       |
|       |          | Interval 2.     |                       |       |
|       |          |                 | Calculate and record  |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | in accordance with    |       |
|       |          |                 | agency policy and     |       |
|       |          |                 | procedures.           |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of fees,  |       |
|       |          |                 | incurred as a result  |       |
|       |          |                 | of debt collection    |       |
|       |          |                 | activity on           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | A dunning       | The following         |       |
| 4.6.9 | Dunning  | letter is       | business rule repeats |       |
|       | Letter   | generated.      | the business rule in  |       |
|       | for      |                 | step RM 4.6.4:        |       |
|       | Interval |                 |                       |       |
|       | 2        |                 | The dunning letter is |       |
|       |          |                 | sent via electronic   |       |
|       |          |                 | media or in hard      |       |
|       |          |                 | copy, as appropriate  |       |
|       |          |                 | for the               |       |
|       |          |                 | customer/debtor.      |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | The output from | The following         |       |
| 4     | Letter   | the previous    | business rule repeats |       |
| .6.10 | Interval | step is a       | the business rule in  |       |
|       | 2        | dunning letter. | step RM 4.6.5:        |       |
|       |          |                 |                       |       |
|       |          |                 | The dunning letter    |       |
|       |          |                 | should describe the   |       |
|       |          |                 | status of the debt as |       |
|       |          |                 | overdue and include:  |       |
|       |          |                 | names/titles of       |       |
|       |          |                 | debtor or responsible |       |
|       |          |                 | parties, amount owed, |       |
|       |          |                 | remittance terms and  |       |
|       |          |                 | conditions and        |       |
|       |          |                 | applicable payment    |       |
|       |          |                 | due date. Terms and   |       |
|       |          |                 | conditions must       |       |
|       |          |                 | include actions that  |       |
|       |          |                 | can be taken to       |       |
|       |          |                 | collect the           |       |
|       |          |                 | outstanding debt.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | The account is  | See Business Rules at |       |
| 4     | Interval | due for dunning | RM 4.6.1.             |       |
| .6.11 | 3        | at Interval 3   |                       |       |
|       | E        | if it remains   | As stated in          |       |
|       | ligible? | delinquent and  | Treasury\'s *Managing |       |
|       |          | has already     | Federal Receivables*  |       |
|       |          | been dunned at  | guidance, no more     |       |
|       |          | Intervals 1 and | than two dunning      |       |
|       |          | 2.              | letters should be     |       |
|       |          |                 | sent, except in rare  |       |
|       |          |                 | circumstances. The    |       |
|       |          |                 | additional intervals  |       |
|       |          |                 | described in this     |       |
|       |          |                 | process allow an      |       |
|       |          |                 | agency the option of  |       |
|       |          |                 | sending more than 2   |       |
|       |          |                 | dunning letters, if   |       |
|       |          |                 | warranted.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Interest is     | The following         |       |
| 4     | Interest | calculated and  | business rules repeat |       |
| .6.12 |          | applied to the  | those in step RM      |       |
|       |          | account as of   | 4.6.2:                |       |
|       |          | the end date of |                       |       |
|       |          | Interval 3.     | Calculate and record  |       |
|       |          |                 | late payment interest |       |
|       |          |                 | based on Treasury\'s  |       |
|       |          |                 | Current Value of      |       |
|       |          |                 | Funds Rate (CVFR)     |       |
|       |          |                 | unless otherwise      |       |
|       |          |                 | specified by the      |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Best practice for     |       |
|       |          |                 | applying interest to  |       |
|       |          |                 | delinquent debts is   |       |
|       |          |                 | to assess interest    |       |
|       |          |                 | based on the original |       |
|       |          |                 | invoice date.         |       |
|       |          |                 |                       |       |
|       |          |                 | For additional        |       |
|       |          |                 | guidance on applying  |       |
|       |          |                 | interest to           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and the Debt          |       |
|       |          |                 | Collection Act of     |       |
|       |          |                 | 1982.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM4   | Apply    | Administrative  | The following         |       |
| .6.13 | Admini   | costs are       | business rules repeat |       |
|       | strative | applied at      | those in step RM      |       |
|       | Costs    | Dunning         | 4.6.3:                |       |
|       |          | Interval 3.     |                       |       |
|       |          |                 | Calculate and record  |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | in accordance with    |       |
|       |          |                 | agency policy and     |       |
|       |          |                 | procedures.           |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of fees,  |       |
|       |          |                 | incurred as a result  |       |
|       |          |                 | of debt collection    |       |
|       |          |                 | activity on           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Penalty amounts | As stated in          |       |
| 4     | Penalty  | are calculated  | Treasury\'s *Managing |       |
| .6.14 |          | and applied to  | Federal Receivables*  |       |
|       |          | the account as  | guidance, penalties   |       |
|       |          | of the end date | discourage            |       |
|       |          | of Interval 3.  | delinquencies and     |       |
|       |          |                 | encourage early       |       |
|       |          |                 | payment of the        |       |
|       |          |                 | delinquent debt in    |       |
|       |          |                 | full. As set by       |       |
|       |          |                 | statute, the penalty  |       |
|       |          |                 | to be assessed to a   |       |
|       |          |                 | delinquent debt is an |       |
|       |          |                 | amount not to exceed  |       |
|       |          |                 | 6% per year. An       |       |
|       |          |                 | Agency should not     |       |
|       |          |                 | charge a penalty of   |       |
|       |          |                 | less than 6% without  |       |
|       |          |                 | a compelling reason.  |       |
|       |          |                 | Accruing from the     |       |
|       |          |                 | date of delinquency,  |       |
|       |          |                 | the penalty charge is |       |
|       |          |                 | assessed on *any      |       |
|       |          |                 | portion* of a debt    |       |
|       |          |                 | that is outstanding   |       |
|       |          |                 | for more than 90      |       |
|       |          |                 | days, including any   |       |
|       |          |                 | interest and          |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | not to exceed 6% per  |       |
|       |          |                 | year.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | A dunning       | The following         |       |
| 4     | Dunning  | letter is       | business rule repeats |       |
| .6.15 | Letter   | generated.      | the business rule in  |       |
|       | for      |                 | step RM 4.6.4:        |       |
|       | Interval |                 |                       |       |
|       | 3        |                 | The dunning letter is |       |
|       |          |                 | sent via electronic   |       |
|       |          |                 | media or in hard      |       |
|       |          |                 | copy, as appropriate  |       |
|       |          |                 | for the               |       |
|       |          |                 | customer/debtor       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | The output from | The following         |       |
| 4     | Letter   | the previous    | business rule repeats |       |
| .6.16 | Interval | step is a       | the business rule in  |       |
|       | 3        | dunning letter. | step RM 4.6.5:        |       |
|       |          |                 |                       |       |
|       |          |                 | The dunning letter    |       |
|       |          |                 | should describe the   |       |
|       |          |                 | status of the debt as |       |
|       |          |                 | overdue and include:  |       |
|       |          |                 | names/titles of       |       |
|       |          |                 | debtor or responsible |       |
|       |          |                 | parties, amount owed, |       |
|       |          |                 | remittance terms and  |       |
|       |          |                 | conditions and        |       |
|       |          |                 | applicable payment    |       |
|       |          |                 | due date. Terms and   |       |
|       |          |                 | conditions must       |       |
|       |          |                 | include actions that  |       |
|       |          |                 | can be taken to       |       |
|       |          |                 | collect the           |       |
|       |          |                 | outstanding debt.     |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt     | The agency      | The following         |       |
| 4     | Eligible | determines      | business rule repeats |       |
| .6.17 | for      | whether the     | the business rule in  |       |
|       | R        | debt is         | step RM 4.2.19:       |       |
|       | eferral? | eligible for    |                       |       |
|       |          | referral to     | For guidance on       |       |
|       |          | Treasury.       | referral to the FMS   |       |
|       |          |                 | for cross-servicing   |       |
|       |          |                 | and/or to the         |       |
|       |          |                 | Treasury Offset       |       |
|       |          |                 | Program see           |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
|       |          |                 | The guidance provides |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as            |       |
|       |          |                 | eligibility           |       |
|       |          |                 | exceptions.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Dunning  | The account is  | As stated in          |       |
| 4     | Interval | due for dunning | Treasury\'s *Managing |       |
| .6.18 | 4        | at Interval 4   | Federal Receivables*  |       |
|       | E        | if it remains   | guidance, no more     |       |
|       | ligible? | delinquent and  | than two dunning      |       |
|       |          | has already     | letters should be     |       |
|       |          | been dunned at  | sent, except in rare  |       |
|       |          | intervals 3 and | circumstances. The    |       |
|       |          | earlier.        | additional intervals  |       |
|       |          |                 | described in this     |       |
|       |          |                 | process allow an      |       |
|       |          |                 | agency the option of  |       |
|       |          |                 | sending more than 2   |       |
|       |          |                 | dunning letters, if   |       |
|       |          |                 | warranted.            |       |
|       |          |                 |                       |       |
|       |          |                 | The following         |       |
|       |          |                 | business rules repeat |       |
|       |          |                 | those in step RM      |       |
|       |          |                 | 4.6.1:                |       |
|       |          |                 |                       |       |
|       |          |                 | An eligible account   |       |
|       |          |                 | receivable is dunned  |       |
|       |          |                 | at the first          |       |
|       |          |                 | applicable and        |       |
|       |          |                 | subsequent time       |       |
|       |          |                 | intervals. Accounts   |       |
|       |          |                 | are dunned at         |       |
|       |          |                 | periodic intervals    |       |
|       |          |                 | (e.g., 30-day         |       |
|       |          |                 | intervals).           |       |
|       |          |                 |                       |       |
|       |          |                 | Delinquent accounts   |       |
|       |          |                 | should be dunned      |       |
|       |          |                 | based on Federal      |       |
|       |          |                 | statutes such as the  |       |
|       |          |                 | Debt Collection Act   |       |
|       |          |                 | of 1982 and the Debt  |       |
|       |          |                 | Collection            |       |
|       |          |                 | Improvement Act of    |       |
|       |          |                 | 1996, Federal         |       |
|       |          |                 | regulations on debt   |       |
|       |          |                 | collection, such as   |       |
|       |          |                 | the Federal Claims    |       |
|       |          |                 | Collection Standards, |       |
|       |          |                 | government-wide debt  |       |
|       |          |                 | collection guidance   |       |
|       |          |                 | such as OMB Circular  |       |
|       |          |                 | A-129 and Treasury's  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables*, and, in |       |
|       |          |                 | addition to, agency   |       |
|       |          |                 | policies and          |       |
|       |          |                 | procedures.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Interest is     | The following         |       |
| 4     | Interest | calculated and  | business rules repeat |       |
| .6.19 |          | applied to the  | those in step RM      |       |
|       |          | account as of   | 4.6.2:                |       |
|       |          | the end date of |                       |       |
|       |          | Interval 4.     | Calculate and record  |       |
|       |          |                 | late payment interest |       |
|       |          |                 | based on Treasury\'s  |       |
|       |          |                 | Current Value of      |       |
|       |          |                 | Funds Rate (CVFR)     |       |
|       |          |                 | unless otherwise      |       |
|       |          |                 | specified by the      |       |
|       |          |                 | agency.               |       |
|       |          |                 |                       |       |
|       |          |                 | Best practice for     |       |
|       |          |                 | applying interest to  |       |
|       |          |                 | delinquent debts is   |       |
|       |          |                 | to assess interest    |       |
|       |          |                 | based on the original |       |
|       |          |                 | invoice date.         |       |
|       |          |                 |                       |       |
|       |          |                 | For additional        |       |
|       |          |                 | guidance on applying  |       |
|       |          |                 | interest to           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury's *Managing  |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | and the Debt          |       |
|       |          |                 | Collection Act of     |       |
|       |          |                 | 1982.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Administrative  | The following         |       |
| 4     | Admini   | costs are       | business rules repeat |       |
| .6.20 | strative | applied at      | those in step RM      |       |
|       | Costs    | Dunning         | 4.6.8:                |       |
|       |          |                 |                       |       |
|       |          | Interval 4.     | Calculate and record  |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | in accordance with    |       |
|       |          |                 | agency policy and     |       |
|       |          |                 | procedures.           |       |
|       |          |                 |                       |       |
|       |          |                 | For guidance on       |       |
|       |          |                 | assessment and        |       |
|       |          |                 | application of fees,  |       |
|       |          |                 | incurred as a result  |       |
|       |          |                 | of debt collection    |       |
|       |          |                 | activity on           |       |
|       |          |                 | delinquent debts, see |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply    | Penalties are   | The following         |       |
| 4     | Penalty  | calculated and  | business rules        |       |
| .6.21 |          | applied to the  | repeats the business  |       |
|       |          | account as of   | rule in step RM       |       |
|       |          | the end date of | 4.6.14:               |       |
|       |          | Interval 4.     |                       |       |
|       |          |                 | As stated in          |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance, penalties   |       |
|       |          |                 | discourage            |       |
|       |          |                 | delinquencies and     |       |
|       |          |                 | encourage early       |       |
|       |          |                 | payment of the        |       |
|       |          |                 | delinquent debt in    |       |
|       |          |                 | full. As set by       |       |
|       |          |                 | statute, the penalty  |       |
|       |          |                 | to be assessed to a   |       |
|       |          |                 | delinquent debt is an |       |
|       |          |                 | amount not to exceed  |       |
|       |          |                 | 6% per year. An       |       |
|       |          |                 | agency should not     |       |
|       |          |                 | charge a penalty of   |       |
|       |          |                 | less than 6% without  |       |
|       |          |                 | a compelling reason.  |       |
|       |          |                 | Accruing from the     |       |
|       |          |                 | date of delinquency,  |       |
|       |          |                 | the penalty charge is |       |
|       |          |                 | assessed on *any      |       |
|       |          |                 | portion* of a debt    |       |
|       |          |                 | that is outstanding   |       |
|       |          |                 | for more than 90      |       |
|       |          |                 | days, including any   |       |
|       |          |                 | interest and          |       |
|       |          |                 | administrative costs  |       |
|       |          |                 | not to exceed 6% per  |       |
|       |          |                 | year.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt     | The agency      | The following         |       |
| 4     | Eligible | determines      | business rule repeats |       |
| .6.22 | for      | whether the     | the business rule in  |       |
|       | R        | debt is         | step RM 4.2.19:       |       |
|       | eferral? | eligible for    |                       |       |
|       |          | referral to     | For guidance on       |       |
|       |          | Treasury.       | referral to the FMS   |       |
|       |          |                 | for cross-servicing   |       |
|       |          |                 | and/or to the         |       |
|       |          |                 | Treasury Offset       |       |
|       |          |                 | Program, see          |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*. |       |
|       |          |                 | The guidance provides |       |
|       |          |                 | debt referral         |       |
|       |          |                 | eligibility criteria  |       |
|       |          |                 | as well as            |       |
|       |          |                 | eligibility           |       |
|       |          |                 | exceptions.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Tra      | Applicable      | The entries are       |       |
| 4     | nsaction | entries are     | recorded using the    |       |
| .6.23 | is       | recorded to     | USSGL Account         |       |
|       | Recorded | apply interest, | Transaction Listing   |       |
|       | in       | fees, and       | in the TFM. Examples  |       |
|       | General  | penalties to    | include, but are not  |       |
|       | Ledger   | applicable      | limited to, the       |       |
|       |          | customer        | following transaction |       |
|       |          | accounts within | codes from the        |       |
|       |          | the General     | current TFM:          |       |
|       |          | Ledger.         |                       |       |
|       |          |                 | TFM C434 To record    |       |
|       |          |                 | the accrual of        |       |
|       |          |                 | custodial interest    |       |
|       |          |                 | revenue that is       |       |
|       |          |                 | collected by an       |       |
|       |          |                 | agency to be          |       |
|       |          |                 | deposited directly    |       |
|       |          |                 | into a Treasury       |       |
|       |          |                 | miscellaneous         |       |
|       |          |                 | receipts account.     |       |
|       |          |                 |                       |       |
|       |          |                 | TFM C436 To record    |       |
|       |          |                 | the accrual of        |       |
|       |          |                 | custodial penalties   |       |
|       |          |                 | and administrative    |       |
|       |          |                 | fees revenue that is  |       |
|       |          |                 | collected by an       |       |
|       |          |                 | agency to be          |       |
|       |          |                 | deposited directly    |       |
|       |          |                 | into a Treasury       |       |
|       |          |                 | miscellaneous         |       |
|       |          |                 | receipts account.     |       |
+-------+----------+-----------------+-----------------------+-------+

## **Allowance for Loss on Accounts Receivable**

An agency shall recognize and record its projected debt losses by
setting up allowance accounts, such as an allowance for doubtful
accounts. The agency should establish the amounts in the allowance
accounts based on portfolio condition and composition, historical
experiences with losses, and actual write-offs taken in the preceding
year or groups of years. The calculation can be performed at agency
discretion; however, in practice, the calculation is generally only done
for financial statement preparation.

The following flowchart provides key steps in the processes agencies use
to determine and record an allowance for loss on accounts receivable.
The allowance for loss on accounts receivable process includes the aging
of accounts receivables to determine the period of time outstanding for
all receivable balances, the calculation of the allowance for loss on
accounts receivable based on Agency-defined criteria, review and
approval of the calculated allowance, and subsequent entries made to the
General Ledger.

## RM 4.7 -- Allowance for Loss on Accounts Receivable Flowchart {#rm-4.7-allowance-for-loss-on-accounts-receivable-flowchart .unnumbered}

![](media/image12.wmf){width="6.990277777777778in"
height="3.670138888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Allowance for Loss on Accounts Receivable
process steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Aged     | The initial     | Agencies shall age    |       |
| 4.7.1 | Accounts | input to the    | receivables balances  |       |
|       | Re       | process is an   | on a periodic basis   |       |
|       | ceivable | aged summary of | by calculating the    |       |
|       | Summary  | balances of     | length of time        |       |
|       | Balance  | accounts        | accounts have been    |       |
|       |          | receivable      | outstanding since the |       |
|       |          | outstanding for | due dates.            |       |
|       |          | designated      |                       |       |
|       |          | periods of      |                       |       |
|       |          | time.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | An estimate is  | As stated in          |       |
| 4.7.2 | alculate | made of         | Statement of Federal  |       |
|       | A        | receivables     | Financial Accounting  |       |
|       | llowance | that are        | Standard 1? (SFFAS    |       |
|       | for Loss | expected to be  | 1), losses should be  |       |
|       | on       | uncollectible.  | recognized when there |       |
|       | Accounts |                 | is more than a 50%    |       |
|       | Re       |                 | chance of loss        |       |
|       | ceivable |                 | occurrence. A         |       |
|       |          |                 | systematic            |       |
|       |          |                 | methodology should be |       |
|       |          |                 | used to measure       |       |
|       |          |                 | losses based on       |       |
|       |          |                 | analysis of both      |       |
|       |          |                 | individual accounts   |       |
|       |          |                 | and a group of        |       |
|       |          |                 | accounts as a whole.  |       |
|       |          |                 | Specific customer     |       |
|       |          |                 | receivable balances   |       |
|       |          |                 | representing          |       |
|       |          |                 | significant amounts   |       |
|       |          |                 | should be             |       |
|       |          |                 | individually          |       |
|       |          |                 | analyzed. Group       |       |
|       |          |                 | analysis should be    |       |
|       |          |                 | based on groups       |       |
|       |          |                 | separated into        |       |
|       |          |                 | homogeneous accounts  |       |
|       |          |                 | with similar risk     |       |
|       |          |                 | characteristics.      |       |
|       |          |                 |                       |       |
|       |          |                 | The allowance for     |       |
|       |          |                 | loss is calculated    |       |
|       |          |                 | periodically for      |       |
|       |          |                 | accounting purposes   |       |
|       |          |                 | and financial         |       |
|       |          |                 | statement reporting.  |       |
|       |          |                 | A significant         |       |
|       |          |                 | fluctuation in the    |       |
|       |          |                 | allowance             |       |
|       |          |                 | calculation, from     |       |
|       |          |                 | period to period, may |       |
|       |          |                 | impact accounting     |       |
|       |          |                 | operations.           |       |
|       |          |                 |                       |       |
|       |          |                 | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance states that  |       |
|       |          |                 | an agency should      |       |
|       |          |                 | establish amounts in  |       |
|       |          |                 | the allowance         |       |
|       |          |                 | accounts based on any |       |
|       |          |                 | one of the following: |       |
|       |          |                 |                       |       |
|       |          |                 | -   Portfolio         |       |
|       |          |                 |     condition and     |       |
|       |          |                 |     composition       |       |
|       |          |                 |                       |       |
|       |          |                 | -   Historical        |       |
|       |          |                 |     experience with   |       |
|       |          |                 |     losses            |       |
|       |          |                 |                       |       |
|       |          |                 | ```{=html}            |       |
|       |          |                 | <!-- -->              |       |
|       |          |                 | ```                   |       |
|       |          |                 | -   Actual write-offs |       |
|       |          |                 |     taken in the      |       |
|       |          |                 |     preceding year or |       |
|       |          |                 |     groups of years.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Review   | Agency          | The calculated        |       |
| 4.7.3 | Ca       | supervisory     | allowance should be   |       |
|       | lculated | personnel       | reviewed by           |       |
|       | A        | review the      | supervisory personnel |       |
|       | llowance | calculated      | with knowledge of the |       |
|       |          | allowance.      | outstanding accounts  |       |
|       |          |                 | receivable balances.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ca       | Agency          | The calculated        |       |
| 4.7.4 | lculated | supervisory     | allowance should be   |       |
|       | A        | personnel       | approved by           |       |
|       | llowance | approve or      | supervisory           |       |
|       | A        | disapprove the  | personnel, other than |       |
|       | pproved? | calculated      | personnel calculating |       |
|       |          | allowance.      | the proposed          |       |
|       |          |                 | allowance, with       |       |
|       |          |                 | knowledge of the      |       |
|       |          |                 | outstanding accounts  |       |
|       |          |                 | receivable balances.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Resolve  | Issues          |                       |       |
| 4.7.5 | Issue    | identified by   |                       |       |
|       |          | supervisory     |                       |       |
|       |          | personnel are   |                       |       |
|       |          | addressed and   |                       |       |
|       |          | applicable      |                       |       |
|       |          | action(s) taken |                       |       |
|       |          | to recalculate  |                       |       |
|       |          | the estimate of |                       |       |
|       |          | allowance for   |                       |       |
|       |          | loss on         |                       |       |
|       |          | accounts        |                       |       |
|       |          | receivable.     |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | A        | Applicable      | The entries are       |       |
| 4.7.6 | llowance | entries are     | recorded using the    |       |
|       | is       | recorded to the | USSGL Account         |       |
|       | Recorded | allowance for   | Transaction Listing   |       |
|       | in       | loss on         | provided in the TFM.  |       |
|       | General  | accounts        | Examples include, but |       |
|       | Ledger   | Receivable      | are not limited to,   |       |
|       |          | account within  | the following         |       |
|       |          | the General     | transaction codes     |       |
|       |          | Ledger.         | from the current TFM: |       |
|       |          |                 |                       |       |
|       |          |                 | TFM D402 To record an |       |
|       |          |                 | allowance for a       |       |
|       |          |                 | reduction in revenue  |       |
|       |          |                 | from non-Federal      |       |
|       |          |                 | sources when          |       |
|       |          |                 | realization is not    |       |
|       |          |                 | probable (less likely |       |
|       |          |                 | than not).            |       |
|       |          |                 |                       |       |
|       |          |                 | TFM D404 To record    |       |
|       |          |                 | the estimated         |       |
|       |          |                 | allowance for bad     |       |
|       |          |                 | debts related to      |       |
|       |          |                 | non-credit-reform     |       |
|       |          |                 | receivables.          |       |
+-------+----------+-----------------+-----------------------+-------+

## **Write-off of Accounts Receivable**

Write-off of a debt is an accounting action that results in reporting
the debt/receivable as having no value on the agency's financial and
management reports. Per OMB Circular No. A-129, write-offs must further
be classified into two separate and distinct categories as currently not
collectible or close-out. Currently not collectible debts are those
which the agency intends to continue cost effective debt collection
action. Closed out debts are those that are prohibited from further debt
collection action or the agency does not plan to take any further
collection action on the debt. The following organizations should follow
IRS 1099-C guidelines and agency policy regarding the issuance of a
1099-C when closing out debts; a department, a court or administrative
court, an agency instrumentality involved in the executive, judicial, or
legislative branches of the government, including government
corporations.

The following flowchart provides key steps in the process for writing
off accounts receivable. Included are steps to analyze debt for
write-off, record general ledger entries, classify debt according to
collection status, obtain required approval for actions, close out debt,
and notify the Internal Revenue Service (IRS) about canceled debt as
applicable.

## RM 4.8 -- Write-off of Accounts Receivable {#rm-4.8-write-off-of-accounts-receivable .unnumbered}

![](media/image13.wmf){width="6.397222222222222in"
height="4.895138888888889in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Write-off of Accounts Receivable process
steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Analyze  | Agency          | Agencies must         | R     |
| 4.8.1 | Debt for | personnel       | identify receivables  | MC-10 |
|       | W        | review each     | that may be eligible  |       |
|       | rite-off | debt eligible   | for write-off.        |       |
|       |          | for write-off   | Selection criteria    |       |
|       |          | to determine    | include:              |       |
|       |          | whether it      |                       |       |
|       |          | should be       | -   Delinquent debt   |       |
|       |          | written off and |     age category      |       |
|       |          | consider        |                       |       |
|       |          | whether it      | -   Customer type     |       |
|       |          | should be       |                       |       |
|       |          | classified as   | -   Receivable type   |       |
|       |          | currently not   |                       |       |
|       |          | collectible or  | As described in       |       |
|       |          | close-out.      | Treasury\'s *Managing |       |
|       |          |                 | Federal Receivables*  |       |
|       |          |                 | guidance and OMB      |       |
|       |          |                 | Circular A-129, each  |       |
|       |          |                 | delinquent debt due   |       |
|       |          |                 | to the government     |       |
|       |          |                 | must be reviewed to   |       |
|       |          |                 | determine whether it  |       |
|       |          |                 | has value for         |       |
|       |          |                 | accounting purposes.  |       |
|       |          |                 |                       |       |
|       |          |                 | Guidance also states  |       |
|       |          |                 | that generally,       |       |
|       |          |                 | write-off is          |       |
|       |          |                 | mandatory for debts   |       |
|       |          |                 | delinquent more than  |       |
|       |          |                 | two years, unless     |       |
|       |          |                 | documented and        |       |
|       |          |                 | justified to OMB in   |       |
|       |          |                 | consultation with     |       |
|       |          |                 | Treasury. In those    |       |
|       |          |                 | cases where material  |       |
|       |          |                 | collections can be    |       |
|       |          |                 | documented to occur   |       |
|       |          |                 | after two years, debt |       |
|       |          |                 | cannot be written off |       |
|       |          |                 | until the estimated   |       |
|       |          |                 | collections become    |       |
|       |          |                 | immaterial.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt to  | Based on        |                       |       |
| 4.8.2 | Be       | analysis        |                       |       |
|       | Written  | performed, a    |                       |       |
|       | Off?     | decision is     |                       |       |
|       |          | made whether to |                       |       |
|       |          | write-off debt. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | The      | Appropriate     | Agencies should       |       |
| 4.8.3 | W        | personnel       | design and implement  |       |
|       | rite-off | within the      | internal control      |       |
|       | of Debt  | agency reviews  | procedures for        |       |
|       | Is       | and approves    | management review and |       |
|       | Reviewed | the write-off   | approval of decisions |       |
|       | and      | of the debt.    | to write-off debt.    |       |
|       | A        |                 |                       |       |
|       | pproved. |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | W        | The debt is     | Recording the         | R     |
| 4.8.4 | rite-off | written off for | write-off of          | MC-11 |
|       | Debt     | accounting      | receivables includes  |       |
|       |          | purposes.       | the reversal of       |       |
|       |          |                 | applicable interest,  |       |
|       |          |                 | penalties, and        |       |
|       |          |                 | administrative        |       |
|       |          |                 | charges.              |       |
|       |          |                 |                       |       |
|       |          |                 | Writing off a debt    |       |
|       |          |                 | does not assume the   |       |
|       |          |                 | debt is closed out.   |       |
|       |          |                 | Debt collection       |       |
|       |          |                 | efforts related to    |       |
|       |          |                 | accounts that have    |       |
|       |          |                 | been written off are  |       |
|       |          |                 | not subject to the    |       |
|       |          |                 | same limitations as a |       |
|       |          |                 | debt that has been    |       |
|       |          |                 | closed out.           |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Record   | Entries are     | The entries are       |       |
| 4.8.5 | the      | recorded to     | recorded using the    |       |
|       | W        | applicable      | USSGL Account         |       |
|       | rite-off | accounts in the | Transaction Listing   |       |
|       | in       | general ledger  | provided in the TFM.  |       |
|       | General  | to reflect the  | Examples include, but |       |
|       | Ledger   | write-off of    | are not limited to,   |       |
|       |          | debt including  | the following         |       |
|       |          | the reversal of | transaction codes     |       |
|       |          | applicable      | from the current TFM: |       |
|       |          | interest,       |                       |       |
|       |          | penalties, and  | TFM D406 To record    |       |
|       |          | administrative  | the write-off of      |       |
|       |          | charges.        | penalties, fines, and |       |
|       |          |                 | administrative fees   |       |
|       |          |                 | receivable.           |       |
|       |          |                 |                       |       |
|       |          |                 | TFM D408 To record    |       |
|       |          |                 | the write-off of      |       |
|       |          |                 | accounts receivable.  |       |
|       |          |                 |                       |       |
|       |          |                 | TFM D416 To record    |       |
|       |          |                 | the write-off of      |       |
|       |          |                 | interest receivable.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | The agency      | Treasury\'s *Managing |       |
| 4.8.6 | etermine | performs        | Federal Receivables*  |       |
|       | Whether  | analysis to     | guidance states that  |       |
|       | to       | determine       | cost effective        |       |
|       | Continue | whether         | collection efforts    |       |
|       | Co       | collection      | should continue if an |       |
|       | llection | efforts should  | agency determines     |       |
|       | Efforts  | continue after  | that continued        |       |
|       |          | write-off.      | collection efforts    |       |
|       |          |                 | have some potential   |       |
|       |          |                 | to result in          |       |
|       |          |                 | collections. Specific |       |
|       |          |                 | criteria are cited to |       |
|       |          |                 | be taken into account |       |
|       |          |                 | when deciding whether |       |
|       |          |                 | to terminate          |       |
|       |          |                 | collection efforts.   |       |
|       |          |                 |                       |       |
|       |          |                 | Agencies may use      |       |
|       |          |                 | discretion in         |       |
|       |          |                 | determining threshold |       |
|       |          |                 | amounts below which   |       |
|       |          |                 | it is not considered  |       |
|       |          |                 | cost effective to     |       |
|       |          |                 | continue collection   |       |
|       |          |                 | efforts.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Continue | The agency      | The agency continues  |       |
| 4.8.7 | Co       | decides whether | collection efforts if |       |
|       | llection | to continue     | it plans to take      |       |
|       | Efforts? | collection      | future actions        |       |
|       |          | efforts on the  | (either active or     |       |
|       |          | delinquent      | passive) and such     |       |
|       |          | debt.           | actions are not       |       |
|       |          |                 | prohibited (e.g., a   |       |
|       |          |                 | debtor is released    |       |
|       |          |                 | from liability in a   |       |
|       |          |                 | bankruptcy).          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Classify | Debt is         | According to          | R     |
| 4.8.8 | Debt as  | classified as   | Treasury\'s *Managing | MC-12 |
|       | C        | currently Not   | Federal Receivables*  |       |
|       | urrently | collectible if  | guidance, if the      |       |
|       | Not      | collection      | agency determines     |       |
|       | Coll     | efforts are to  | cost effective        |       |
|       | ectible. | continue after  | collection efforts    |       |
|       |          | write-off.      | should continue after |       |
|       |          |                 | write-off, the debt   |       |
|       |          |                 | is classified as      |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Continue | Collection      | Data on written-off   | R     |
| 4.8.9 | Co       | efforts         | receivables in        | MC-13 |
|       | llection | continue once   | currently not         |       |
|       | Efforts  | debt is         | collectible status    |       |
|       |          | classified as   | must be maintained.   |       |
|       |          | currently not   |                       |       |
|       |          | collectible.    | Collection activities |       |
|       |          |                 | continue for debt     |       |
|       |          |                 | classified as         |       |
|       |          |                 | currently not         |       |
|       |          |                 | collectible.          |       |
|       |          |                 | Collection activities |       |
|       |          |                 | include procedures    |       |
|       |          |                 | performed at the      |       |
|       |          |                 | Agency as well as     |       |
|       |          |                 | activities performed  |       |
|       |          |                 | by other entities     |       |
|       |          |                 | once debt has been    |       |
|       |          |                 | referred to FMS for   |       |
|       |          |                 | cross-servicing or    |       |
|       |          |                 | TOP or to DOJ for     |       |
|       |          |                 | litigation. The       |       |
|       |          |                 | agency must           |       |
|       |          |                 | periodically evaluate |       |
|       |          |                 | the status of debt    |       |
|       |          |                 | and consider whether  |       |
|       |          |                 | to discontinue        |       |
|       |          |                 | collection efforts    |       |
|       |          |                 | and close-out the     |       |
|       |          |                 | debt.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Continue | The agency      | Evaluation of the     |       |
| 4     | Co       | determines      | status of debt and    |       |
| .8.10 | llection | whether to      | estimated success of  |       |
|       | Efforts? | continue        | collection efforts to |       |
|       |          | collection      | determine whether     |       |
|       |          | efforts.        | collection efforts    |       |
|       |          |                 | should continue must  |       |
|       |          |                 | be performed on a     |       |
|       |          |                 | regular basis. Such   |       |
|       |          |                 | evaluation is         |       |
|       |          |                 | performed at the      |       |
|       |          |                 | agency whether debt   |       |
|       |          |                 | is held at the agency |       |
|       |          |                 | or has been referred  |       |
|       |          |                 | to other entities.    |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Approval | The agency      | Except for agencies   |       |
| 4     | Required | determines      | having independent    |       |
| .8.11 | for      | whether         | statutory authority,  |       |
|       | Ter      | approval from   | DOJ concurrence is    |       |
|       | mination | DOJ or FMS may  | required, as          |       |
|       | of       | be required     | applicable, when an   |       |
|       | Co       | prior to        | agency suspends or    |       |
|       | llection | termination of  | terminates            |       |
|       | Action?  | collection      | collections action on |       |
|       |          | actions for an  | debts over \$100,000  |       |
|       |          | accounts        | (principal only). DOJ |       |
|       |          | receivable.     | has delegated to FMS  |       |
|       |          |                 | the authority to      |       |
|       |          |                 | approve termination   |       |
|       |          |                 | of collection action  |       |
|       |          |                 | on a debt with a      |       |
|       |          |                 | principal amount of   |       |
|       |          |                 | \$500,000 or less     |       |
|       |          |                 | when the debt is      |       |
|       |          |                 | being serviced by FMS |       |
|       |          |                 | in its                |       |
|       |          |                 | cross-servicing       |       |
|       |          |                 | program.              |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Request  | The agency      | A decision to         |       |
| 4     | for      | generates a     | terminate collection  |       |
| .8.12 | Approval | request for     | of a debt must be     |       |
|       | of       | termination of  | approved by an        |       |
|       | Ter      | collection      | appropriate           |       |
|       | mination | action.         | managerial official.  |       |
|       | of       |                 | Proper segregation of |       |
|       | Co       |                 | duties must be        |       |
|       | llection |                 | maintained between    |       |
|       | Action.  |                 | the requestor and     |       |
|       |          |                 | approver of the       |       |
|       |          |                 | action to terminate.  |       |
|       |          |                 |                       |       |
|       |          |                 | Concurrence is        |       |
|       |          |                 | requested by          |       |
|       |          |                 | submitting a          |       |
|       |          |                 | completed Claims      |       |
|       |          |                 | Collection Litigation |       |
|       |          |                 | Report (CCLR) to the  |       |
|       |          |                 | DOJ. See Appendix 10  |       |
|       |          |                 | of *Managing Federal  |       |
|       |          |                 | Receivables* for      |       |
|       |          |                 | details on preparing  |       |
|       |          |                 | a CCLR.               |       |
+-------+----------+-----------------+-----------------------+-------+
| RM4   | Request  | The request for |                       |       |
| .8.13 | for      | termination of  |                       |       |
|       | Ter      | collection      |                       |       |
|       | mination | action is       |                       |       |
|       | of       | communicated to |                       |       |
|       | Co       | DOJ or FMS, as  |                       |       |
|       | llection | applicable.     |                       |       |
|       | Action   |                 |                       |       |
|       | to DOJ   |                 |                       |       |
|       | or FMS   |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM4   | Approval | DOJ/FMS either  |                       |       |
| .8.14 | Granted? | approves or     |                       |       |
|       |          | denies the      |                       |       |
|       |          | request for     |                       |       |
|       |          | termination of  |                       |       |
|       |          | collection      |                       |       |
|       |          | action.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | The debt is     | Treasury\'s *Managing |       |
| 4     | lose-out | closed out.     | Federal Receivables*  |       |
| .8.15 | Debt     |                 | guidance states that  |       |
|       |          |                 | once the agency       |       |
|       |          |                 | determines that       |       |
|       |          |                 | collection action is  |       |
|       |          |                 | legally barred or is  |       |
|       |          |                 | no longer cost        |       |
|       |          |                 | effective, the debt   |       |
|       |          |                 | should be classified  |       |
|       |          |                 | as a close-out.       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Report   | The agency      | Agencies must follow  |       |
| 4     | Canc     | determines      | statutory guidelines  |       |
| .8.16 | ellation | whether the     | and IRS 1099-C        |       |
|       | of Debt  | debt must be    | instructions          |       |
|       | to IRS?  | reported to the | concerning            |       |
|       |          | IRS as          | cancellation of debt  |       |
|       |          | potential       | and must report       |       |
|       |          | income.         | cancellation of debt  |       |
|       |          |                 | in the amount of      |       |
|       |          |                 | \$600 or greater.     |       |
|       |          |                 | Agencies may decide   |       |
|       |          |                 | not to report debts   |       |
|       |          |                 | less than \$600 that  |       |
|       |          |                 | were cancelled in a   |       |
|       |          |                 | calendar year. See    |       |
|       |          |                 | IRS instructions and  |       |
|       |          |                 | *Managing Federal     |       |
|       |          |                 | Receivables* for      |       |
|       |          |                 | additional            |       |
|       |          |                 | information on 1099-C |       |
|       |          |                 | reporting.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Generate | The agency or   | Once a 1099-C has     | R     |
| 4     | Canc     | the entity to   | been issued an agency | MC-21 |
| .8.17 | ellation | which debt has  | must cease collection |       |
|       | of Debt  | been referred   | efforts.              |       |
|       | Noti     | generates Form  |                       |       |
|       | fication | 1099-C,         |                       |       |
|       |          | "Cancellation   |                       |       |
|       |          | of Debt" and    |                       |       |
|       |          | sends it to the |                       |       |
|       |          | customer/debtor |                       |       |
|       |          | and the IRS.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Canc     | Form 1099-C is  |                       |       |
| 4     | ellation | received by the |                       |       |
| .8.18 | of Debt  | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Issue Credit Memo**

The purpose of a credit memo is to determine the action an agency will
take in response to triggering events such as overpayments, return of
goods, or adjustment related to services provided from a debtor. The
agency must determine whether or not to apply the amount to an open
receivable, offset the next scheduled receivable, or process a refund to
the specific customer.

The following flowchart provides key steps in the process for issuing a
credit memo on an established account receivable. Included are steps to
request and prepare a credit memo, adjust an accounts receivable
balance, and generate and send the credit memo.

## RM 4.9 -- Issue Credit Memo Flowchart {#rm-4.9-issue-credit-memo-flowchart .unnumbered}

![](media/image14.wmf){width="6.990277777777778in" height="5.175in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Issue Credit Memo process steps are
> described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Business | A triggering    | An image of the       |       |
| 4.9.1 | Unit or  | event occurs    | documentation         |       |
|       | Finance  | creating the    | supporting the credit |       |
|       | Prepares | need for a      | memo request shall be |       |
|       | Request  | credit memo to  | maintained in         |       |
|       | for      | be issued to a  | electronic or hard    |       |
|       | Credit   | c               | copy form as          |       |
|       | Memo     | ustomer/debtor. | applicable.           |       |
|       |          | Examples of     |                       |       |
|       |          | such triggering | In an electronic      |       |
|       |          | events include  | environment, the      |       |
|       |          | an overpayment  | request information   |       |
|       |          | from a          | is entered or         |       |
|       |          | c               | interfaced to the     |       |
|       |          | ustomer/debtor, | Core Financial System |       |
|       |          | return of       | at the time the       |       |
|       |          | goods, or       | request is prepared.  |       |
|       |          | adjustment      |                       |       |
|       |          | related to      |                       |       |
|       |          | services        |                       |       |
|       |          | provided.       |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | A        | The request for | The review of credit  |       |
| 4.9.2 | uthorize | a credit memo   | memo request should   |       |
|       | Request  | is reviewed and | be performed by       |       |
|       | for      | the document is | applicable            |       |
|       | Credit   | authorized or   | supervisory personnel |       |
|       | Memo?    | rejected.       | in either the         |       |
|       |          |                 | business unit or      |       |
|       |          |                 | Finance separate from |       |
|       |          |                 | the preparer of the   |       |
|       |          |                 | request.              |       |
|       |          |                 |                       |       |
|       |          |                 | Supervisory personnel |       |
|       |          |                 | must review           |       |
|       |          |                 | applicable supporting |       |
|       |          |                 | documentation to      |       |
|       |          |                 | evaluate the request  |       |
|       |          |                 | for a credit memo.    |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Reject   | The credit memo | Complete and          |       |
| 4.9.3 | Credit   | request is      | sufficient supporting |       |
|       | Memo     | rejected.       | documentation must be |       |
|       | Request  |                 | provided or           |       |
|       |          |                 | supervisory personnel |       |
|       |          |                 | reject the credit     |       |
|       |          |                 | memo.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Request  | A document is   |                       |       |
| 4.9.4 | for      | generated to    |                       |       |
|       | Credit   | request a       |                       |       |
|       | Memo     | credit memo.    |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | D        | Finance         |                       |       |
| 4.9.5 | etermine | personnel       |                       |       |
|       | App      | review          |                       |       |
|       | ropriate | supporting      |                       |       |
|       | Action   | documentation   |                       |       |
|       | on       | and any         |                       |       |
|       | Credit   | applicable      |                       |       |
|       | Memo     | accounts        |                       |       |
|       |          | receivable      |                       |       |
|       |          | history to      |                       |       |
|       |          | determine the   |                       |       |
|       |          | proper actions  |                       |       |
|       |          | needed to apply |                       |       |
|       |          | the credit      |                       |       |
|       |          | memo.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Apply to | If the          | Finance should apply  |       |
| 4.9.6 | Open     | customer/debtor | credit memos to open  |       |
|       | Rec      | owes funds to   | accounts receivable   |       |
|       | eivable? | the agency on   | balances owed by the  |       |
|       |          | open accounts   | customer/debtor.      |       |
|       |          | receivable      |                       |       |
|       |          | balances,       |                       |       |
|       |          | Finance         |                       |       |
|       |          | personnel       |                       |       |
|       |          | determine       |                       |       |
|       |          | whether to      |                       |       |
|       |          | apply the       |                       |       |
|       |          | credit memo to  |                       |       |
|       |          | an applicable   |                       |       |
|       |          | open balance.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Offset   | Finance         | Finance personnel     |       |
| 4.9.7 | Next     | personnel       | review the            |       |
|       | Rec      | determine       | customer/debtor's     |       |
|       | eivable? | whether to hold | account history to    |       |
|       |          | the credit memo | determine whether the |       |
|       |          | in order to     | Agency should apply   |       |
|       |          | offset the      | the credit memo by    |       |
|       |          | amount the      | offsetting it against |       |
|       |          | agency would    | the amount of an      |       |
|       |          | bill on a       | expected future       |       |
|       |          | future          | receivable from the   |       |
|       |          | receivable from | customer/debtor.      |       |
|       |          | the             |                       |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Evaluate | Finance         | Generally, if the     |       |
| 4.9.8 | for      | determines      | agency is not         |       |
|       | Refund   | whether to      | carrying an open      |       |
|       |          | refund the      | receivable for the    |       |
|       |          | amount of the   | customer/debtor and   |       |
|       |          | credit memo by  | the customer account  |       |
|       |          | disbursing      | history does not      |       |
|       |          | funds to the    | warrant holding the   |       |
|       |          | c               | credit memo to apply  |       |
|       |          | ustomer/debtor. | to a future           |       |
|       |          |                 | receivable, the funds |       |
|       |          |                 | should be disbursed.  |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | The credit memo | An individual other   |       |
| 4.9.9 | Memo     | is approved or  | than the preparer     |       |
|       | A        | rejected in the | will approve or       |       |
|       | pproved? | Core Financial  | reject the credit     |       |
|       |          | System.         | memo.                 |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Refund   | Based on prior  |                       |       |
| 4     | to be    | evaluations,    |                       |       |
| .9.10 | Pr       | Finance         |                       |       |
|       | ocessed? | determines      |                       |       |
|       |          | whether a       |                       |       |
|       |          | refund is to be |                       |       |
|       |          | processed on    |                       |       |
|       |          | the credit      |                       |       |
|       |          | memo.           |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | To       | If a refund is  | Finance must apply a  |       |
| 4     | Payment  | to be           | funds check to        |       |
| .9.11 | Process  | processed, the  | determine that        |       |
|       |          | credit memo is  | applicable funds are  |       |
|       |          | forwarded to    | available to pay the  |       |
|       |          | the payment     | refund.               |       |
|       |          | process within  |                       |       |
|       |          | Finance.        |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | Accounts        | The entries are       |       |
| 4     | Memo is  | receivable      | recorded to the       |       |
| .9.12 | Recorded | customer/debtor | General Ledger using  |       |
|       | in       | balances and    | the USSGL Account     |       |
|       | General  | statuses (at    | Transaction Listing   |       |
|       | Ledger   | the lowest      | provided in the TFM.  |       |
|       |          | appropriate     | The applicable entry  |       |
|       |          | level) are      | is recorded based on  |       |
|       |          | adjusted and    | the entry originally  |       |
|       |          | updated to      | made to record the    |       |
|       |          | reflect the     | receivable balance.   |       |
|       |          | credit memo.    |                       |       |
|       |          | Once the credit | The agency must       |       |
|       |          | memo has been   | establish processes   |       |
|       |          | entered into    | and procedures to     |       |
|       |          | the system and  | offset the            |       |
|       |          | approved by     | disbursement against  |       |
|       |          | appropriate     | the credit memo.      |       |
|       |          | personnel, it   |                       |       |
|       |          | is recorded in  |                       |       |
|       |          | the General     |                       |       |
|       |          | Ledger.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Credit   | A credit memo   |                       |       |
| 4     | Memo     | document is     |                       |       |
| .9.13 |          | generated.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send/    | Finance         | The credit memo is    |       |
| 4     | Transmit | sends/transmits | sent in electronic or |       |
| .9.14 | Credit   | the credit memo | hard-copy format,     |       |
|       | Memo     | to the          | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | C        | The credit memo |                       |       |
| 4     | ustomer/ | is received by  |                       |       |
| .9.15 | Debtor   | the             |                       |       |
|       | Receives | c               |                       |       |
|       | Credit   | ustomer/debtor. |                       |       |
|       | Memo     |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Return of a Financial Instrument**

Although returned financial instruments have minimal impact on the
accounts receivable balance, they must be given their due diligence as
the potential for uncollectible amounts can increase over time. Examples
of returned financial instruments include non-sufficient funds, closed
customer/debtor accounts, stop payments, and disputed credit or debit
charges. The cost of pursuing collection on immaterial amounts resulting
from returned financial instruments can hinder an agencies overall
financial management effectiveness. An agency\'s business process for
returned financial instruments may also help to identify chronic returns
from the same customers which can serve to support a change in agency
policy or relationship with their customers.

The following flowchart provides key steps in the process to be followed
when an agency receives notice of returned financial instruments for a
customer/debtor. Included are steps to evaluate and record a returned
item, and notify or bill the customer/debtor as applicable.

## RM 4.10 -- Return of a Financial Instrument Flowchart {#rm-4.10-return-of-a-financial-instrument-flowchart .unnumbered}

![](media/image15.wmf){width="6.991666666666666in"
height="4.611111111111111in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

> The Receivables Management Returned Items process steps are described
> as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Sends/   | Treasury or the |                       |       |
| 4     | T        | applicable FI   |                       |       |
| .10.1 | ransmits | sends/transmits |                       |       |
|       | Notice   | a returned      |                       |       |
|       | of       | financial       |                       |       |
|       | Returned | instruments     |                       |       |
|       | F        | notice to the   |                       |       |
|       | inancial | Agency on the   |                       |       |
|       | Ins      | account of a    |                       |       |
|       | truments | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Notice   | A returned      |                       |       |
| 4     | of       | financial       |                       |       |
| .10.2 | Returned | instrument      |                       |       |
|       | F        | notice is       |                       |       |
|       | inancial | received by the |                       |       |
|       | Ins      | Agency.         |                       |       |
|       | truments |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Returned | Finance         | If the Core Financial |       |
| 4     | F        | determines      | System does not have  |       |
| .10.3 | inancial | whether the     | an existing account   |       |
|       | Ins      | returned        | for the               |       |
|       | truments | financial       | customer/debtor, an   |       |
|       | Ap       | instruments     | account receivable    |       |
|       | plicable | notice is       | must be established,  |       |
|       | to a     | applicable to   | as described in RM    |       |
|       | Pr       | an existing     | 4.1.                  |       |
|       | eviously | customer/debtor |                       |       |
|       | Est      | account in the  |                       |       |
|       | ablished | Core Financial  |                       |       |
|       | C        | System.         |                       |       |
|       | ustomer/ |                 |                       |       |
|       | Debtor   |                 |                       |       |
|       | Account? |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Record   | The             | The original bill is  | R     |
| 4     | Ad       | customer/debtor | reopened in the Core  | MB-20 |
| .10.4 | justment | account is      | Financial System and  |       |
|       | to       | adjusted to     | collections           |       |
|       | C        | reflect the     | activities resumed.   |       |
|       | ustomer/ | returned        | The original date of  |       |
|       | Debtor   | financial       | the bill is used for  |       |
|       | Account  | instruments     | the purpose of        |       |
|       | and      | notice, and the | calculating interest  |       |
|       | General  | new balance is  | due the agency on     |       |
|       | Ledger   | reflected in    | delinquent payments.  |       |
|       |          | the General     |                       |       |
|       |          | Ledger.         | The entries are       |       |
|       |          |                 | recorded to the       |       |
|       |          |                 | General Ledger using  |       |
|       |          |                 | the USSGL Account     |       |
|       |          |                 | Transaction Listing   |       |
|       |          |                 | provided in the TFM.  |       |
|       |          |                 | The applicable entry  |       |
|       |          |                 | is recorded based on  |       |
|       |          |                 | the entry originally  |       |
|       |          |                 | made to record the    |       |
|       |          |                 | receivable balance.   |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send     | A message       | The agency should     |       |
| 4     | (Electr  | describing the  | implement procedures  |       |
| .10.5 | onically | returned        | to enable timely      |       |
|       | or       | financial       | notification of       |       |
|       | M        | instrument      | business units about  |       |
|       | anually) | notice is sent  | customer/debtors for  |       |
|       | Message  | to the business | which returned        |       |
|       | to       | unit which      | instrument notices    |       |
|       | Business | conducted       | have been received.   |       |
|       | Unit     | business with   | Business units should |       |
|       |          | the             | have procedures to    |       |
|       |          | c               | suspend services to   |       |
|       |          | ustomer/debtor. | customer/debtors in   |       |
|       |          |                 | such a case.          |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Send/    | Finance         | The customer          |       |
| 4     | Transmit | sends/transmits | notification is sent  |       |
| .10.6 | Customer | the customer    | in electronic or      |       |
|       | Noti     | notification to | hard-copy format,     |       |
|       | fication | the             | depending on the      |       |
|       |          | c               | method agreed to by   |       |
|       |          | ustomer/debtor. | the customer.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | The             |                       |       |
| 4     | Noti     | notification is |                       |       |
| .10.7 | fication | received by the |                       |       |
|       |          | c               |                       |       |
|       |          | ustomer/debtor. |                       |       |
+-------+----------+-----------------+-----------------------+-------+

## **Waiver of Interest, Administrative Costs, and Penalties**

The Federal Claims Collection Standard section that covers waivers
states that agency laws and regulations specifically applicable to
claims collection activities take precedence over the general
government-wide standards. Flexibility needs to be built into the
systems, procedures, and reporting to allow for exceptions to the
standard business processes and reporting models.

The following flowchart provides key steps in the process to be followed
when an agency determines whether to issue a waiver of interest,
administrative costs, or penalties that have been applied on a
delinquent account.

## RM 4.11 -- Waiver of Interest, Administrative Costs, and Penalties Flowchart {#rm-4.11-waiver-of-interest-administrative-costs-and-penalties-flowchart .unnumbered}

![](media/image16.wmf){width="6.990277777777778in" height="3.525in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Waiver of Interest, Administrative Costs, and
Penalties process steps are described as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | I        | The initial     |                       |       |
| 4     | nterest, | input to the    |                       |       |
| .11.1 | Admini   | process is      |                       |       |
|       | strative | records of      |                       |       |
|       | Costs,   | customer/debtor |                       |       |
|       | and      | accounts which  |                       |       |
|       | P        | have been       |                       |       |
|       | enalties | assessed        |                       |       |
|       |          | interest and/or |                       |       |
|       |          | administrative  |                       |       |
|       |          | costs and/or    |                       |       |
|       |          | penalties.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Should a | The Agency      | Treasury\'s *Managing |       |
| 4     | Waiver   | evaluates       | Federal Receivables*  |       |
| .11.2 | Be       | whether         | guidance states that  |       |
|       | Granted? | interest and/or | the Agency is         |       |
|       |          | administrative  | required to waive     |       |
|       |          | costs and/or    | *interest* and        |       |
|       |          | penalties       | *administrative       |       |
|       |          | should be       | costs* on a debt paid |       |
|       |          | waived on a     | within 30 days of the |       |
|       |          | customer/debtor | date of delinquency.  |       |
|       |          | account.        | A waiver may be in    |       |
|       |          |                 | whole or in part for  |       |
|       |          |                 | each separate type of |       |
|       |          |                 | charge. For write-off |       |
|       |          |                 | of principal and/or   |       |
|       |          |                 | interest,             |       |
|       |          |                 | administrative costs, |       |
|       |          |                 | and penalties see     |       |
|       |          |                 | section 4.8 above.    |       |
|       |          |                 | The agency has        |       |
|       |          |                 | discretion to waive   |       |
|       |          |                 | interest, penalties,  |       |
|       |          |                 | and administrative    |       |
|       |          |                 | costs in accordance   |       |
|       |          |                 | with its regulations, |       |
|       |          |                 | either (1) pursuant   |       |
|       |          |                 | to a compromise or    |       |
|       |          |                 | settlement agreement, |       |
|       |          |                 | or (2) when           |       |
|       |          |                 | collection of these   |       |
|       |          |                 | charges is against    |       |
|       |          |                 | equity and good       |       |
|       |          |                 | conscience or is not  |       |
|       |          |                 | in the best interests |       |
|       |          |                 | of the United States. |       |
|       |          |                 | For example, a waiver |       |
|       |          |                 | may be appropriate    |       |
|       |          |                 | when an agency cannot |       |
|       |          |                 | conduct a hearing     |       |
|       |          |                 | within the            |       |
|       |          |                 | statutorily required  |       |
|       |          |                 | time frame (e.g., 60  |       |
|       |          |                 | days for salary       |       |
|       |          |                 | offset).              |       |
|       |          |                 |                       |       |
|       |          |                 | The Federal Claims    |       |
|       |          |                 | Collections Standards |       |
|       |          |                 | note that agency laws |       |
|       |          |                 | and regulations       |       |
|       |          |                 | specifically          |       |
|       |          |                 | applicable to claims  |       |
|       |          |                 | collection activities |       |
|       |          |                 | take precedence over  |       |
|       |          |                 | the government-wide   |       |
|       |          |                 | standards.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Process  | The agency      | Supporting            | R     |
| 4     | and      | processes a     | information and       | MC-11 |
| .11.3 | Document | waiver of       | supervisory approvals |       |
|       | App      | interest and/or | for waiving interest  | R     |
|       | lication | administrative  | and/or administrative | MC-13 |
|       | of       | costs and/or    | costs and/or          |       |
|       | Waiver   | penalties on a  | penalties must be     |       |
|       |          | customer/debtor | documented and        |       |
|       |          | account in the  | maintained.           |       |
|       |          | Core Financial  |                       |       |
|       |          | System.         |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Waiver   | The waiver      | The entries are       |       |
| 4     | is       | transaction is  | recorded to the       |       |
| .11.4 | Recorded | recorded to the | General Ledger using  |       |
|       | in       | General Ledger. | the USSGL Account     |       |
|       | General  |                 | Transaction Listing   |       |
|       | Ledger   |                 | provided in the TFM.  |       |
|       |          |                 | Applicable entries    |       |
|       |          |                 | are recorded based on |       |
|       |          |                 | earlier entries to    |       |
|       |          |                 | record interest,      |       |
|       |          |                 | administrative costs, |       |
|       |          |                 | and penalties.        |       |
+-------+----------+-----------------+-----------------------+-------+

> []{.mark}

## **Installment Plans**

An Installment plan is a supplemental debt collection tool available to
agencies. They allow for the agency to collect the debt over time.
Installment plans should only be offered to customers who present valid
inability to pay claims and offered to those customers prior to offset
or administrative wage garnishment. An agency should attempt to collect
as large an initial payment as possible and the agreement should be
drafted with the intent to collect the entire debt in three years or
less. Any installment agreement should be drafted with the best interest
of the agency in collecting the debt and should not in any way
compromise its right to that debt. The agreement should contain
sufficient terms such that the agency's rights to collect the debt are
not compromised.

The following flowchart provides key steps in the process for entering
into an installment agreement with a customer/debtor. Included are steps
for determining eligibility for an installment plan, performing
financial due diligence, and establishing accounts receivable for an
installment agreement.

## RM 4.12 -- Installment Plans Flowchart {#rm-4.12-installment-plans-flowchart .unnumbered}

![](media/image17.wmf){width="6.990277777777778in"
height="5.102777777777778in"}

See Appendix C -- Business Process Flowcharts, Symbols, and Definitions
for an enlarged version of the flowchart.

The Receivables Management Installment Plans process steps are described
as follows:

+-------+----------+-----------------+-----------------------+-------+
| Step  | Step     | Step            | Business Rules        | CFSR  |
| ID    | Name     | Description     |                       | Req.  |
+=======+==========+=================+=======================+=======+
| RM    | Noti     | Customer/debtor |                       |       |
| 4     | fication | notifies the    |                       |       |
| .12.1 | of       | appropriate     |                       |       |
|       | C        | agency office   |                       |       |
|       | ustomer/ | of inability to |                       |       |
|       | Debtor   | pay current     |                       |       |
|       | I        | amount due.     |                       |       |
|       | nability |                 |                       |       |
|       | to Pay   |                 |                       |       |
|       | Claim    |                 |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Receive  | Finance         | In the event that the |       |
| 4     | Claim of | determines      | customer/debtor       |       |
| .12.2 | I        | whether         | claims financial      |       |
|       | nability | customer/debtor | inability to repay    |       |
|       | to Pay?  | provided        | the debt in a single  |       |
|       |          | sufficient      | lump sum, the agency  |       |
|       |          | notification of | may consider          |       |
|       |          | inability to    | collecting the debt   |       |
|       |          | pay.            | in installments.      |       |
|       |          |                 |                       |       |
|       |          |                 | Before using certain  |       |
|       |          |                 | collection remedies,  |       |
|       |          |                 | such as offset and    |       |
|       |          |                 | administrative wage   |       |
|       |          |                 | garnishment, an       |       |
|       |          |                 | agency should provide |       |
|       |          |                 | a debtor with the     |       |
|       |          |                 | opportunity to enter  |       |
|       |          |                 | into a reasonable     |       |
|       |          |                 | repayment agreement.  |       |
|       |          |                 | Based on the result   |       |
|       |          |                 | of analysis of        |       |
|       |          |                 | accounts receivable   |       |
|       |          |                 | history for the       |       |
|       |          |                 | customer/debtor,      |       |
|       |          |                 | agencies may consider |       |
|       |          |                 | an installment        |       |
|       |          |                 | agreement.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Debt     | Finance         | Agency policies and   |       |
| 4     | Eligible | determines if   | procedures should     |       |
| .12.3 | for      | the debt is     | define criteria for   |       |
|       | Ins      | eligible for an | the types and amounts |       |
|       | tallment | installment     | of debts for which    |       |
|       | Ag       | agreement.      | the agency will       |       |
|       | reement? |                 | consider entering     |       |
|       |          |                 | into an installment   |       |
|       |          |                 | agreement.            |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | F        | The agency      | Prior to entering     |       |
| 4     | inancial | conducts        | into an installment   |       |
| .12.4 | Due      | procedures to   | agreement, an agency  |       |
|       | D        | determine the   | should verify the     |       |
|       | iligence | validity of the | debtor\'s claim of    |       |
|       |          | cu              | inability to repay in |       |
|       |          | stomer/debtor's | a lump sum. Examples  |       |
|       |          | claim of        | of documentation      |       |
|       |          | inability to    | agencies may use are  |       |
|       |          | pay in a lump   | financial reports and |       |
|       |          | sum.            | credit reports.       |       |
|       |          |                 | Additionally, an      |       |
|       |          |                 | agency should enter   |       |
|       |          |                 | into such agreements  |       |
|       |          |                 | only when there is    |       |
|       |          |                 | evidence the debtor   |       |
|       |          |                 | has:                  |       |
|       |          |                 |                       |       |
|       |          |                 | -   Shown willingness |       |
|       |          |                 |     to abide by the   |       |
|       |          |                 |     terms of the      |       |
|       |          |                 |     agreement,        |       |
|       |          |                 |     including the     |       |
|       |          |                 |     repayment         |       |
|       |          |                 |     schedule; and     |       |
|       |          |                 |                       |       |
|       |          |                 | -   Ability to make   |       |
|       |          |                 |     the agreed-upon   |       |
|       |          |                 |     payments.         |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Approval | A designated    | The agency official   |       |
| 4     | of       | agency official | reviews the results   |       |
| .12.5 | Agency   | approves or     | of the installment    |       |
|       | O        | disapproves an  | due diligence and     |       |
|       | fficial? | installment     | eligibility           |       |
|       |          | agreement to    | determination         |       |
|       |          | collect the     | procedures to         |       |
|       |          | customer's      | determine if an       |       |
|       |          | debt.           | installment agreement |       |
|       |          |                 | should be approved.   |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Prep     | Finance         | The installment       |       |
| 4     | are/Send | prepares and    | agreement is sent to  |       |
| .12.6 | Ins      | sends the       | the customer/debtor   |       |
|       | tallment | approved        | in electronic or      |       |
|       | A        | installment     | hard-copy format.     |       |
|       | greement | agreement to    |                       |       |
|       |          | the customer.   |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Ins      | Customer        |                       |       |
| 4     | tallment | receives the    |                       |       |
| .12.7 | A        | installment     |                       |       |
|       | greement | agreement.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | Customer | Customer        |                       |       |
| 4     | Accepts? | accepts or      |                       |       |
| .12.8 |          | fails to accept |                       |       |
|       |          | the terms of    |                       |       |
|       |          | the installment |                       |       |
|       |          | agreement.      |                       |       |
+-------+----------+-----------------+-----------------------+-------+
| RM    | E        | Finance         | In establishing the   | R     |
| 4     | stablish | establishes an  | installment agreement | MB-21 |
| .12.9 | Re       | accounts        | in the Core Financial |       |
|       | ceivable | receivable      | System, Finance must: | R     |
|       | for      | according to    |                       | MB-22 |
|       | Ins      | the terms of    | -   Close out the     |       |
|       | tallment | the installment |     original          |       |
|       | A        | agreement.      |     invoice(s);       |       |
|       | greement |                 |                       |       |
|       |          |                 | -   Establish a new   |       |
|       |          |                 |     unbilled          |       |
|       |          |                 |     receivable        |       |
|       |          |                 |     referencing the   |       |
|       |          |                 |     prior invoice(s)  |       |
|       |          |                 |     which have been   |       |
|       |          |                 |     closed, and       |       |
|       |          |                 |                       |       |
|       |          |                 | -   Include           |       |
|       |          |                 |     applicable terms  |       |
|       |          |                 |     of the            |       |
|       |          |                 |     installment       |       |
|       |          |                 |     agreement to      |       |
|       |          |                 |     enable the Core   |       |
|       |          |                 |     Financial System  |       |
|       |          |                 |     to generate a     |       |
|       |          |                 |     payment schedule  |       |
|       |          |                 |     which includes    |       |
|       |          |                 |     billing and       |       |
|       |          |                 |     payment due       |       |
|       |          |                 |     dates.            |       |
+-------+----------+-----------------+-----------------------+-------+

# **Reimbursable Management Processes**

[This Section will be Part of a Future Standard Business Process
Release.]{.mark}

# **Reports Management Processes**

[This Section will be Part of a Future Standard Business Process
Release.]{.mark}

# Appendix A -- Standard Federal Financial Business Process Vision and Business Approach {#appendix-a-standard-federal-financial-business-process-vision-and-business-approach .Heading}

# **Standard Federal Financial Business Process Vision** {#standard-federal-financial-business-process-vision .Heading---No-Number}

The Standard Federal Financial Business Process (SFFBP) Vision is to
improve the cost, quality, and performance of financial management
systems by leveraging shared services solutions and implementing
government-wide reforms that foster efficiencies in Federal financial
operations*.* The Office of Management and Budget (OMB) is the executive
sponsor for the SFFBP initiative. The Financial Systems Integration
Office (FSIO) has direct responsibility for completing priority projects
under the SFFBP. This document was prepared by FSIO in coordination with
the Chief Financial Officers Council's FSIO Oversight Transformation
Team.

The SFFBP vision is built upon precepts that begin with standardization
and transparency of forming the base for government financial
improvement. To begin this improvement process, the SFFBP established
the following "work streams" to begin addressing and defining
standardization and transparency for financial operations:

1.  Performance Measures: To develop performance measures (cost,
    quality, and timeliness) to assess the performance of financial
    services offered by a financial services organization.

```{=html}
<!-- -->
```
1.  Standard Business Processes: To develop data specifications and
    business rules for core financial management functions (e.g., funds
    management, payments, receipts, and reporting) to be adopted by all
    Federal agencies.

2.  Common Government-wide Accounting Code Structure: To develop a
    common accounting structure used government-wide that includes an
    applicable set of definitions and the layout to which Federal
    agencies' new financial systems must adhere.

Under the FSIO structure, the SFFBP activities are lead by
agency-sponsored teams working collaboratively with the broad Federal
financial community. This community includes Federal financial policy
organizations and organizations representing the financial community
stakeholders.

# **Standard Federal Financial Business Process Approach** {#standard-federal-financial-business-process-approach .Heading---No-Number}

The SFFBP work stream follows a standard approach in the development of
each business process area. The SFFBP was developed through a
collaborative effort of the Federal financial management community. The
project objectives were to:

-   Define the objectives of standard business process

-   Document the current business processes used within the 24 Chief
    Financial Officer Act Agencies (the "as-is" environment)

-   Determine which business processes should be included in the
    standard business process.

The SFFBP project was divided into four phases:

1.  Project initiation

2.  Development of SFFBP vision and draft proposal

3.  Validation of the SFFBP

4.  Issuance of an exposure draft of the proposed Standard Business
    Processes.

During the initial phase of the project, the sponsors were engaged to
help ensure that expectations were known, the project approach was
acceptable, and requirements for government participation were defined.

The second phase established the vision for Standard Business Processes
that defined the objectives of developing a standard structure and its
contribution to the goals of the SFFBP initiative.

During the third phase, the draft proposal was refined and validated
with three key stakeholder groups:

-   Representatives of the 24 Chief Financial Officers Act Agencies

-   Vendors of financial management systems

-   Federal shared service providers.

From April through August 2006, FSIO conducted a number of workshops
with program agencies and vendors to address payments and receipts,
funds management, and reporting.

During the final phase of the project, the team began to develop the
*Financial Management Systems Standard Business Processes for U.S.
Government Agencies* document. This version is an exposure draft to be
used to solicit further comment from the Federal financial management
community before the SFFBP for Receivables Management is adopted.

# Appendix B -- Standard Federal Financial Business Process Controlled Vocabulary {#appendix-b-standard-federal-financial-business-process-controlled-vocabulary .Heading}

+---------------+----------------------------------------+-------------+
| Term          | Definition                             | Source[^1]  |
+===============+========================================+=============+
| Accounting    | A subset of the agency financial       | FSIO        |
| C             | information classification. The        | Financial   |
| lassification | accounting classification structure    | System      |
|               | provides a means for categorizing      | Re          |
|               | financial information along several    | quirements; |
|               | dimensions as needed to support        |             |
|               | financial management and reporting     | Multiple    |
|               | functions. The data elements an agency | sources     |
|               | includes in its accounting             |             |
|               | classification structure will depend   |             |
|               | in part on the implementation strategy |             |
|               | for the USSGL, data aggregation        |             |
|               | requirements for preparation of        |             |
|               | financial statements under the CFO     |             |
|               | Act, appropriation structure, and      |             |
|               | other reporting and management needs   |             |
|               | of the agency.                         |             |
+---------------+----------------------------------------+-------------+
| Accrual       | The term "accrual" is used in this     | Online      |
|               | document to refer to an accounting     | Accounting  |
|               | transaction to record expenses that    | Dictionary  |
|               | have been incurred or revenues that    |             |
|               | have been earned without regard to     | [http://ww  |
|               | when cash is received or disbursed.    | w.accountin |
|               |                                        | gcoach.com/ |
|               |                                        | accounting- |
|               |                                        | terms/accou |
|               |                                        | nting-dicti |
|               |                                        | onary/#accr |
|               |                                        | ual%20type% |
|               |                                        | 20adjusting |
|               |                                        | %20entry](h |
|               |                                        | ttp://www.a |
|               |                                        | ccountingco |
|               |                                        | ach.com/acc |
|               |                                        | ounting-ter |
|               |                                        | ms/accounti |
|               |                                        | ng-dictiona |
|               |                                        | ry/#accrual |
|               |                                        |  type adjus |
|               |                                        | ting entry) |
+---------------+----------------------------------------+-------------+
| Accrual       | A system of accounting in which        | GAO:        |
| Accounting    | revenues are recorded when earned and  | Glossary of |
|               | expenses are recorded when goods are   | Terms Used  |
|               | received or services are performed,    | in the      |
|               | even though the actual receipt of      | Federal     |
|               | revenues and payment for goods or      | Budget      |
|               | services may occur, in whole or in     | Process     |
|               | part, at a different time.             |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Accrual       | The basis whereby transactions and     | GAO:        |
| Accounting    | events are recognized when they occur, | Glossary of |
| Basis         | regardless of when cash is received or | Terms Used  |
|               | paid.                                  | in the      |
|               |                                        | Federal     |
|               |                                        | Budget      |
|               |                                        | Process     |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| A             | Money held by the Government for a     | Treasury's  |
| dministrative | person or entity in order to satisfy a | Managing    |
| (Internal)    | debt that the person or entity owes.   | Federal     |
| Offsets with  |                                        | Receivables |
| Accounts      |                                        |             |
| Payable       |                                        | <           |
|               |                                        | http://fms. |
|               |                                        | treas.gov/d |
|               |                                        | ebt/Guidanc |
|               |                                        | e_MFR.html> |
+---------------+----------------------------------------+-------------+
| A             | A process whereby a Federal agency     | Online      |
| dministrative | issues a wage garnishment order to a   | Accounting  |
| Wage          | delinquent debtor's non-Federal        | Dictionary  |
| Garnishment   | employer. No court order is required.  |             |
|               | The employer withholds amounts from    | <http:/     |
|               | the                                    | /www.accoun |
|               |                                        | tingcoach.c |
|               | employee's wages in compliance with    | om/accounti |
|               | the order and pays those amounts to    | ng-terms/ac |
|               | the Federal creditor agency to which   | counting-di |
|               | the employee owes a debt.              | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| Agency        | The term "Agency" means any executive  | OMB         |
|               | department, military department,       | Circular    |
|               | government corporation,                | A-130,      |
|               | government-controlled corporation,     | Transmittal |
|               | other establishment in the executive   | Memorandum  |
|               | branch of the Federal Government, or   | #4,         |
|               | any independent regulatory agency.     | Management  |
|               | Within the Executive Office of the     | of Federal  |
|               | President, the term includes only OMB  | Information |
|               | and the Office of Administration.      | Resources   |
|               |                                        | (           |
|               |                                        | 11/28/2000) |
+---------------+----------------------------------------+-------------+
| Agency Debt   | The complete credit process which is   | Treasury's  |
| Management    | composed of four phases; credit        | Managing    |
|               | extension, account servicing,          | Federal     |
|               | delinquent debt collection, and        | Receivables |
|               | ter                                    | <htt        |
|               | mination/write-off/close-out/discharge | p://www.fms |
|               | of indebtedness.                       | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Allotment     | A subdivision of an apportionment made | OMB         |
|               | by an agency.                          | Circular    |
|               |                                        | A-11,       |
|               |                                        | P           |
|               |                                        | reparation, |
|               |                                        | Submission  |
|               |                                        | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Application   | Receivables resulting from the         |             |
| Fees          | processing of applications submitted   |             |
|               | by parties wishing to participate in a |             |
|               | government offered program or service  |             |
|               | for which applications are necessary   |             |
|               | for participation in exchange for a    |             |
|               | fee.                                   |             |
+---------------+----------------------------------------+-------------+
| Apportionment | A distribution made by OMB of amounts  | OMB         |
|               | available for obligation in an         | Circular    |
|               | appropriation or fund account into     | A-11,       |
|               | amounts available for specified time   | P           |
|               | periods, program, activities,          | reparation, |
|               | projects, objects, or any combinations | Submission  |
|               | of these. The apportioned amount       | and         |
|               | limits the obligations that may be     | Execution   |
|               | incurred. An apportionment may be      | of the      |
|               | further subdivided by an agency into   | Budget      |
|               | allotments, suballotments, and         | (6/30/06)   |
|               | allocations.                           |             |
+---------------+----------------------------------------+-------------+
| Appropriation | A provision of law (not necessarily an | OMB         |
|               | appropriations act) authorizing the    | Circular    |
|               | expenditure of funds for a given       | A-11,       |
|               | purpose. Usually, but not always, an   | P           |
|               | appropriation provides budget          | reparation, |
|               | authority.                             | Submission  |
|               |                                        | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Asset Sales   | The dollar amount of proceeds realized | Financial   |
|               | from the sale of a loan or debt        | Management  |
|               | including collections from sales of    | Service: A  |
|               | secured property.                      | bureau of   |
|               |                                        | the         |
|               |                                        | Department  |
|               |                                        | of the      |
|               |                                        | United      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <h          |
|               |                                        | ttps://www. |
|               |                                        | fms.treas.g |
|               |                                        | ov/debt/Wkb |
|               |                                        | ktest3.htm> |
+---------------+----------------------------------------+-------------+
| Auction       | Fees assessed to government sponsored  |             |
| Receipts      | auction attendees to recoup the costs  |             |
|               | associated with the auction to benefit |             |
|               | the federal agency or program in the   |             |
|               | form of reducing a surplus of goods.   |             |
+---------------+----------------------------------------+-------------+
| Award         | The term "Award Document" is used to   | FSIO        |
| Document      | represent the applicable instrument    | Payments    |
|               | used by an agency to enter into a      | Management  |
|               | contractual arrangement with a         | Focus Group |
|               | provider of goods and/or services.     |             |
+---------------+----------------------------------------+-------------+
| Benefit       | Benefit payments, paid by Federal      |             |
| Overpayments  | agencies, to entities or individuals,  |             |
|               | in excess of the amount prescribed by  |             |
|               | specific guidance governing the        |             |
|               | specific benefit type for which the    |             |
|               | payment was made.                      |             |
+---------------+----------------------------------------+-------------+
| Billed        | An amount owed the Government by an    | Treasury's  |
| Receivables   | individual, organization, or other     | Managing    |
|               | entity to satisfy a debt or claim      | Federal     |
|               | where the government has communicated  | Receivables |
|               | to the debtor the terms of the debt or | <htt        |
|               | claim in the form of a bill.           | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Budget        | The Budget of the United States        | FASAB       |
|               | Government setting forth the           |             |
|               | President's comprehensive financial    | Statement   |
|               | plan for allocating resources. The     | of Federal  |
|               | Government uses the budget system to   | Financial   |
|               | allocate resources among its major     | Accounting  |
|               | functions and individual programs. The | Standards   |
|               | budget process has three main phases:  | No. 24      |
|               | formulation, congressional action on   |             |
|               | the budget, and execution.             |             |
+---------------+----------------------------------------+-------------+
| Budget        | The authority provided by law to incur | OMB         |
| Authority     | financial obligations that will result | Circular    |
|               | in outlays. Specific forms of budget   | A-11,       |
|               | authority include appropriations,      | P           |
|               | borrowing authority, contract          | reparation, |
|               | authority, and spending authority from | Submission  |
|               | offsetting collections.                | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Budget        | Includes Funds Control and provides    | OMB         |
| Execution     | features to record, distribute, and    | Circular    |
|               | control budget authority and spending  | A-11,       |
|               | in accordance with the provisions of   | P           |
|               | OMB Circular A-11, Part 4, and         | reparation, |
|               | Instructions on Budget Execution.      | Submission  |
|               | Budget execution provides the ability  | and         |
|               | to track the effects of financial      | Execution   |
|               | events on the sources and uses of      | of the      |
|               | budgetary resources authorized by the  | Budget      |
|               | President and Congress. Its primary    | (6/30/06)   |
|               | purpose is to ensure that spending     |             |
|               | does not exceed funds appropriated or  |             |
|               | authorized.                            |             |
+---------------+----------------------------------------+-------------+
| Budget        | During this phase of the budget cycle, | OMB         |
| Formulation   | the Executive Branch prepares the      | Circular    |
|               | President's budget. OMB and the        | A-11,       |
|               | Federal Agencies begin preparing the   | P           |
|               | next budget almost as soon as the      | reparation, |
|               | President has sent the last one to     | Submission  |
|               | Congress. OMB officially starts the    | and         |
|               | process by sending planning guidance   | Execution   |
|               | to Executive Branch Agencies in the    | of the      |
|               | spring. The President completes this   | Budget      |
|               | phase by sending the budget to         | (6/30/06)   |
|               | Congress on the first Monday in        |             |
|               | February, as specified in law,         |             |
|               | although occasionally Presidents have  |             |
|               | sent it later for various reasons.     |             |
+---------------+----------------------------------------+-------------+
| Business Unit | For the purpose of this document,      |             |
|               | business unit refers to any program or |             |
|               | administrative office/unit other than  |             |
|               | Finance or Acquisition units.          |             |
+---------------+----------------------------------------+-------------+
| Carryover     | Funding collected in one fiscal year   | Treasury    |
|               | that was not obligated and is          | Directive:  |
|               | available to be used to meet           | 31-04       |
|               | requirements in the next fiscal year.  |             |
|               |                                        | <http:      |
|               |                                        | //www.treas |
|               |                                        | .gov/regs/t |
|               |                                        | d31-04.htm> |
+---------------+----------------------------------------+-------------+
| Commitment    | A commitment is an administrative      | OMB         |
|               | reservation of funds that have not yet | Circular    |
|               | been obligated. Agencies use           | A-11,       |
|               | commitment accounts for the internal   | P           |
|               | control of budgetary resources and to  | reparation, |
|               | help prevent unauthorized use of       | Submission  |
|               | available resources.                   | and         |
|               |                                        | Execution   |
|               |                                        | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/2006) |
+---------------+----------------------------------------+-------------+
| Concentration | Moves funds from an account that       | Treasury    |
|               | settles the transactions to the        | Financial   |
|               | Treasury General Account Fund at the   | Management  |
|               | Federal Reserve Bank of New York.      | Service     |
+---------------+----------------------------------------+-------------+
| Concession    | Receivables resulting from an          |             |
| Rents         | agreement between the agency and a     |             |
|               | party where the agency extends the use |             |
|               | of agency property for the party to    |             |
|               | conduct a function or business in      |             |
|               | return for a fee.                      |             |
+---------------+----------------------------------------+-------------+
| Core          | A core financial management system     | OMB         |
| Financial     | supports both the key financial        | Circular    |
| System        | management business processes of an    | A-127,      |
|               | agency as well as the financial        | Financial   |
|               | aspects of non-financial management    | Management  |
|               | business processes (e.g.,              | Systems     |
|               | Acquisitions, Budget Planning,         | (Draft)     |
|               | Payroll, Property, Grants, and         |             |
|               | Travel). Financial management business |             |
|               | processes of an agency are defined as: |             |
|               |                                        |             |
|               | -   Budget and Finance                 |             |
|               |                                        |             |
|               | ```{=html}                             |             |
|               | <!-- -->                               |             |
|               | ```                                    |             |
|               | -   Accounting                         |             |
|               |                                        |             |
|               | -   Collections and Receivables        |             |
|               |                                        |             |
|               | -   Payments                           |             |
|               |                                        |             |
|               | -   Assets and Liabilities             |             |
|               |                                        |             |
|               | -   Reporting and Information          |             |
|               |                                        |             |
|               | The above processes are further        |             |
|               | defined in the Office of Federal       |             |
|               | Financial Management (OFFM) Core       |             |
|               | Financial Systems Requirements.        |             |
+---------------+----------------------------------------+-------------+
| Credit Reform | The purposes of the Credit Reform Act  | United      |
|               | of 1990, are to:                       | States      |
|               |                                        | Code: 2     |
|               | \(1\) measure more accurately the      | U.S.C. §    |
|               | costs of Federal credit                | 661         |
|               |                                        |             |
|               | programs;                              | [           |
|               |                                        | http://www. |
|               | \(2\) place the cost of credit         | gpoaccess.g |
|               | programs on a budgetary basis          | ov/uscode/i |
|               | equivalent to other Federal spending;  | ndex.html]( |
|               |                                        | http://www. |
|               | \(3\) encourage the delivery of        | gpoaccess.g |
|               | benefits in the form most appropriate  | ov/uscode/i |
|               | to the needs of beneficiaries; and     | ndex.html ) |
|               |                                        |             |
|               | \(4\) improve the allocation of        |             |
|               | resources among credit programs and    |             |
|               | between credit and other spending      |             |
|               | programs.                              |             |
+---------------+----------------------------------------+-------------+
| Department of | The Department of Justice manages      | Justice     |
| Justice Debt  | government-wide debt through the use   | Management  |
| Management    | of the Debt Management Module (DMM)    | Division: A |
|               | which contains records of payments and | division of |
|               | administrative offsets of funds        | the United  |
|               | received and disbursed by the          | States      |
|               | Department of Justice resulting from   | Department  |
|               | the litigation and enforced collection | of Justice  |
|               | of civil and criminal debts owed to    |             |
|               | the United States.                     | <http://www |
|               |                                        | .usdoj.gov/ |
|               |                                        | jmd/foia/jm |
|               |                                        | ddcdms.htm> |
+---------------+----------------------------------------+-------------+
| Disbursements | Amounts paid out by Federal agencies   | TFM,        |
|               | during the fiscal year. This term is   | Supplement  |
|               | used interchangeably with the term     | to Volume   |
|               | outlay.                                | I, Fund     |
|               |                                        | Balance     |
|               |                                        | with        |
|               |                                        | Treasury    |
|               |                                        | Rec         |
|               |                                        | onciliation |
|               |                                        | Procedures  |
|               |                                        | (10/4/2002) |
+---------------+----------------------------------------+-------------+
| Document Line | Document line represents contract or   |             |
|               | subcontract line items on a commitment |             |
|               | obligation or payment document.        |             |
+---------------+----------------------------------------+-------------+
| Donations     | Gift of assets to a Federal agency, or |             |
|               | component there-of. The item donated   |             |
|               | is recorded at its fair market value   |             |
|               | on the donation date. The donor does   |             |
|               | not have an owner\'s interest as a     |             |
|               | result of the donation.                |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from employee    |             |
| Overpayments  | receipts of funds in excess of the     |             |
|               | actual cost.                           |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from             |             |
| Training      | government-sponsored training in       |             |
| Reimbursement | exchange for a fee from attendees.     |             |
+---------------+----------------------------------------+-------------+
| Employee      | Receivables resulting from the advance |             |
| Travel        | to employees to cover employee travel  |             |
| (Advances)    | expenses not to exceed the obligation  |             |
|               | amount.                                |             |
+---------------+----------------------------------------+-------------+
| Enterprise    | A strategic information asset base     | Federal     |
| Architecture  | that defines the business, information | Enterprise  |
|               | necessary to operate the business,     | A           |
|               | technologies necessary to support the  | rchitecture |
|               | business operations, and transitional  | Framework,  |
|               | processes for implementing new         | V.1.1,      |
|               | technologies in response to the        | Federal CIO |
|               | changing needs of the business.        | Council,    |
|               |                                        | September   |
|               |                                        | 1999        |
+---------------+----------------------------------------+-------------+
| Federal       | To facilitate efforts to transform the | Federal     |
| Enterprise    | Federal Government to one that is      | Enterprise  |
| Architecture  | citizen-centered, results-oriented,    | A           |
|               | and market-based, the Office of        | rchitecture |
|               | Management and Budget (OMB) is         | Program     |
|               | developing the Federal Enterprise      | Management  |
|               | Architecture (FEA), a business-based   | Office      |
|               | framework for Government-wide          |             |
|               | improvement.                           |             |
|               |                                        |             |
|               | The FEA is being constructed through a |             |
|               | collection of interrelated "reference  |             |
|               | models" designed to facilitate         |             |
|               | cross-agency analysis and the          |             |
|               | identification of duplicative          |             |
|               | investments, gaps, and opportunities   |             |
|               | for collaboration within and across    |             |
|               | Federal agencies.                      |             |
+---------------+----------------------------------------+-------------+
| Federal       | The BRM is a function-driven framework | OMB         |
| Enterprise    | for describing the lines of business   | Circular    |
| Architecture  | and internal functions performed by    | A-11,       |
| Business      | the Federal Government independent of  | Preparing,  |
| Reference     | the agencies that perform them. The    | Executing,  |
| Model (BRM)   | BRM serves as the business layer of    | and         |
|               | the Federal Enterprise Architecture    | Submitting  |
|               | (FEA). It provides a foundation on     | the Budget  |
|               | which the applications, data, and      |             |
|               | technology layers of the FEA are       |             |
|               | developed. Agency Capital Asset Plans  |             |
|               | (Exhibit 300s) will be mapped against  |             |
|               | this framework to identify             |             |
|               | opportunities for cross-agency         |             |
|               | collaboration and potential system     |             |
|               | redundancies.                          |             |
+---------------+----------------------------------------+-------------+
| Federal       | The Federal Enterprise Architecture    | Federal     |
| Enterprise    | Framework (FEAF) provides an organized | Enterprise  |
| Architecture  | structure and a collection of common   | A           |
| Framework     | terms by which Federal segments can    | rchitecture |
|               | integrate their respective             | Framework,  |
|               | architectures into the Federal         | V.1.1,      |
|               | Enterprise Architecture.               | Federal CIO |
|               |                                        | Council,    |
|               |                                        | September   |
|               |                                        | 1999        |
+---------------+----------------------------------------+-------------+
| Federal       | Any payment made by an agency. The     | Treasury    |
| Payment       | term includes, but is not limited to:  | Green Book  |
|               | (1) Federal wage, salary, and          |             |
|               | retirement payments; (2) vendor and    |             |
|               | expense reimbursement payments; (3)    |             |
|               | benefit payments; and (4)              |             |
|               | miscellaneous payments including, but  |             |
|               | not limited to, interagency payments,  |             |
|               | grants, loans, fees, principal,        |             |
|               | interest, and other payments related   |             |
|               | to United States marketable and        |             |
|               | non-marketable securities, overpayment |             |
|               | reimbursements, and payments under     |             |
|               | Federal insurance or guarantee         |             |
|               | programs for loans.                    |             |
+---------------+----------------------------------------+-------------+
| Financial     | A branch of accounting. The most       | FASAB,      |
| Accounting    | noteworthy interpretations or          | SFFAS No.   |
|               | classifications are those about which  | 1:          |
|               | data pertain to the past and which     | Objectives  |
|               | pertain to the future. In other words, | of Federal  |
|               | financial accounting is largely        |             |
|               | concerned with assigning the value of  | Financial   |
|               | past transactions to appropriate time  | Reporting   |
|               | periods.                               |             |
+---------------+----------------------------------------+-------------+
| Financial     | Any occurrence having financial        | OMB         |
| Event         | consequences to the Federal Government | Circular    |
|               | related to the receipt of              | A-127,      |
|               | appropriations or other financial      | Financial   |
|               | resources; acquisition of goods or     | Management  |
|               | services; payments or collections;     | Systems     |
|               | recognition of guarantees, benefits to | (           |
|               | be provided, or other potential        | 07/23/1993) |
|               | liabilities; or other reportable       |             |
|               | financial activities.                  |             |
+---------------+----------------------------------------+-------------+
| Financial     | Financial systems and the financial    | Federal     |
| Management    | portions of mixed systems necessary to | Financial   |
| Systems       | support financial management,          | Management  |
|               | including manual or automated          | Improvement |
|               | processes, procedures, controls,       | Act         |
|               | hardware, software, and support        | (FFMIA),    |
|               | personnel. Financial systems include   |             |
|               | an information system, comprised of    | OMB         |
|               | one or more applications, that is used | Circular    |
|               | for (1) collecting, processing,        | A-127,      |
|               | maintaining, transmitting or reporting | Financial   |
|               | data about financial events; (2)       | Management  |
|               | supporting financial or budgeting      | Systems     |
|               | activities; (3) accumulating and       | (           |
|               | reporting cost information; or (4)     | 07/23/1993) |
|               | supporting the preparation of          |             |
|               | financial statements.                  |             |
+---------------+----------------------------------------+-------------+
| Financial     | A financial system supports the        | OMB         |
| System        | financial management business          | Circular    |
|               | processes required in an agency to     | A-127,      |
|               | track financial events to provide      | Financial   |
|               | financial information that is          | Management  |
|               | significant to the financial           | Systems     |
|               | management of the agency and is used   | (Draft)     |
|               | for the preparation of agency          |             |
|               | financial statements. A financial      |             |
|               | system encompasses both automated and  |             |
|               | manual processes, procedures, internal |             |
|               | controls, and a data repository and    |             |
|               | may include multiple applications that |             |
|               | are integrated through a common        |             |
|               | database or are electronically         |             |
|               | interfaced, as necessary, to meet      |             |
|               | defined data and processing            |             |
|               | requirements to record financial       |             |
|               | events. These core applications        |             |
|               | directly support the financial         |             |
|               | management business processes of an    |             |
|               | agency.                                |             |
|               |                                        |             |
|               | .                                      |             |
+---------------+----------------------------------------+-------------+
| Fines         | Applied amounts on accounts and loans  | United      |
|               | receivable due to the delinquency of a | States      |
|               | debt or non-compliance with terms of a | Standard    |
|               | pre-existing agreement.                | General     |
|               |                                        | Ledger      |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.fms.treas |
|               |                                        | .gov/ussgl/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Freedom of    | Allows any person to request access to | United      |
| Information   | Federal agency records or information. | States      |
| Act of        | Federal agencies are required to       | Code: 5     |
|               | disclose records upon receipt of a     | U.S.C. §    |
|               | written request, except for records    | 552         |
|               | that are protected from disclosure by  |             |
|               | nine exemptions or three exclusions in | [           |
|               | the Act.                               | http://www. |
|               |                                        | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               |                                        | ndex.html]( |
|               |                                        | http://www. |
|               |                                        | gpoaccess.g |
|               |                                        | ov/uscode/i |
|               |                                        | ndex.html ) |
+---------------+----------------------------------------+-------------+
| Gifts         | Assets given to Federal agencies in    |             |
|               | cash or other form for which the       |             |
|               | Federal entity has no future           |             |
|               | obligation to the individual or        |             |
|               | entity, relative to the gift.          |             |
+---------------+----------------------------------------+-------------+
| Grants        | A federal financial assistance award   | GAO:        |
|               | making payment in cash or in kind for  | Glossary of |
|               | a specified purpose.                   | Terms Used  |
|               |                                        | in the      |
|               |                                        | Federal     |
|               |                                        | Budget      |
|               |                                        | Process     |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.gao.gov/n |
|               |                                        | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Industrial    | The Industrial Funding Fee (IFF)       | General     |
| Funding Fees  | reimburses the General Services        | Services    |
|               | Administration (GSA) for the costs of  | Admi        |
|               | operating Federal Supply Schedules     | nistration, |
|               | program and recoups its operating      | [http://    |
|               | costs from ordering activities. The    | www.gsa.gov |
|               | IFF has been added by the Government   | ](http://ww |
|               | to the contract price and is reflected | w.gsa.gov/) |
|               | in the total amount charged to the     |             |
|               | ordering activities.                   |             |
+---------------+----------------------------------------+-------------+
| Information   | The protection of information and      | Federal     |
| Security      | information systems from unauthorized  |             |
|               | access, use, disclosure, disruption,   | Information |
|               | modification, or destruction in order  | Security    |
|               | to provide: (1) integrity, which means | Management  |
|               | guarding against improper information  | Act of 2002 |
|               | modification or destruction, and       |             |
|               | includes ensuring information          |             |
|               | non-repudiation and authenticity; (2)  |             |
|               | confidentiality, which means           |             |
|               | preserving authorized restrictions on  |             |
|               | access and disclosure, including means |             |
|               | for protecting personal privacy and    |             |
|               | proprietary information; and (3)       |             |
|               | availability, which means ensuring     |             |
|               | timely and reliable access to and use  |             |
|               | of information.                        |             |
+---------------+----------------------------------------+-------------+
| Information   | A discrete set of information          | OMB         |
| System        | technology, data, and related          | Circular    |
|               | resources, such as personnel,          | A-11,       |
|               | hardware, software, and associated     | P           |
|               | information technology services        | reparation, |
|               | organized for the collection,          | Submission  |
|               | processing, maintenance, use, sharing, | and         |
|               | dissemination, or disposition of       | Execution   |
|               | information.                           | of the      |
|               |                                        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Information   | Any equipment, or interconnected       | FAR 2.101   |
| Technology    | system(s) or subsystem(s) of           |             |
|               | equipment, that is used in the         |             |
|               | automatic acquisition, storage,        |             |
|               | manipulation, management, movement,    |             |
|               | control, display, switching,           |             |
|               | interchange, transmission, or          |             |
|               | reception of data or information by    |             |
|               | the agency.                            |             |
+---------------+----------------------------------------+-------------+
| Interest      | A sum paid or calculated for the use   | Treasury's  |
|               | of capital.                            | Managing    |
|               |                                        | Federal     |
|               |                                        | Receivables |
|               |                                        | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Internal      | A subset of management controls are    | OMB         |
| Control       | the internal controls used to assure   | Circular    |
|               | that there is prevention or timely     | A-123,      |
|               | detection of unauthorized acquisition, | M           |
|               | use, or disposition of the entity's    | anagement's |
|               | assets.                                | Res         |
|               |                                        | ponsibility |
|               |                                        | for         |
|               |                                        | Internal    |
|               |                                        | Control     |
|               |                                        | (Effective  |
|               |                                        | beginning   |
|               |                                        | with Fiscal |
|               |                                        | Year 2006)  |
|               |                                        | (Revised    |
|               |                                        | 12/21/2004) |
+---------------+----------------------------------------+-------------+
| Internal      | Process for assessing the              | OMB         |
| Control over  | effectiveness of an entity's internal  | Circular    |
| Financial     | control over financial reporting.      | A-123,      |
| Reporting     |                                        | M           |
|               |                                        | anagement's |
|               |                                        | Res         |
|               |                                        | ponsibility |
|               |                                        | for         |
|               |                                        | Internal    |
|               |                                        | Control,    |
|               |                                        | Appendix A  |
|               |                                        | (Revised    |
|               |                                        | 12/21/2004) |
+---------------+----------------------------------------+-------------+
| Intra         | Intra-Governmental Payment and         | Treasury    |
| -Governmental | Collection (IPAC) System is comprised  | Financial   |
| Payment and   | of three interrelated subsystems: (1)  | Manual      |
| Collections   | the IPAC application that processes    |             |
|               | Intra-Governmental Federal funds       |             |
|               | transfers between Agencies, (2) the    |             |
|               | Retirement and Insurance Transfer      |             |
|               | System (RITS) that processes           |             |
|               | retirement and health insurance        |             |
|               | payments by Federal agencies to the    |             |
|               | Office of Personnel Management (OPM),  |             |
|               | and (3) the Treasury Receivable        |             |
|               | Accounting and Collection System       |             |
|               | (TRACS) that processes check           |             |
|               | disbursement data returned to Federal  |             |
|               | Agencies for which Treasury has        |             |
|               | disbursing authority.                  |             |
+---------------+----------------------------------------+-------------+
| Investments   | The long-term asset category of a      | Online      |
|               | classified balance sheet which appears | Accounting  |
|               | immediately after the current assets.  | Dictionary  |
|               | Listed in this category would be a     |             |
|               | bond sinking fund, funds held for      | <http:/     |
|               | construction, the cash surrender value | /www.accoun |
|               | of a life insurance policy owned by    | tingcoach.c |
|               | the company, and long-term investments | om/accounti |
|               | in stocks and bonds.                   | ng-terms/ac |
|               |                                        | counting-di |
|               |                                        | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| IPAC          | A transaction processed through a      | Financial   |
| Transaction   | Treasury-based system for which        | Management  |
|               | Federal Program Agencies (FPA) the     | Service: A  |
|               | intra-governmental transfer of funds,  | bureau of   |
|               | with descriptive data from one FPA to  | the         |
|               | another.                               | Department  |
|               |                                        | of the      |
|               |                                        | Unites      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | goals/ipac/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Judgments     | Amounts owed to the agency resulting   |             |
| (Accident     | from a judgment, in the agencies       |             |
| Claims)       | favor, entitling them to receipt of    |             |
|               | funds resulting from an external       |             |
|               | party's non- compliance with a         |             |
|               | pre-existing agreement and/or          |             |
|               | negligence.                            |             |
+---------------+----------------------------------------+-------------+
| Leases        | A legal agreement to pay rent to the   | Online      |
|               | lessor for a stated period of time.    | Accounting  |
|               | Sometimes the lease is in substance a  | Dictionary  |
|               | purchase of an asset and a financing   |             |
|               | arrangement. For example, if a company | <http:/     |
|               | agrees to lease a forklift truck for   | /www.accoun |
|               | 60 months and the agreement cannot be  | tingcoach.c |
|               | canceled without purchasing the asset, | om/accounti |
|               | it is possible the arrangement is more | ng-terms/ac |
|               | than a mere rental of equipment.       | counting-di |
|               |                                        | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| Loans         | Financial assets created by the        | Government  |
|               | Government by providing money, goods   | Accounting  |
|               | or services directly or indirectly to  | Standards   |
|               | the beneficiary entities, which        | Advisory    |
|               | entails a contractual right to receive | Board       |
|               | back the moneys (or equivalents) along | P           |
|               | with interest                          | ublication: |
|               |                                        | Accounting  |
|               | thereon, if any, as per terms and      | Standards   |
|               | conditions of the loan agreements.     | for the     |
|               |                                        | Union       |
|               |                                        | Government  |
|               |                                        | and the     |
|               |                                        | State       |
|               |                                        | G           |
|               |                                        | overnments, |
|               |                                        | Exposure    |
|               |                                        | Draft 6,    |
|               |                                        | Issued      |
|               |                                        | March 30,   |
|               |                                        | 2007.       |
|               |                                        |             |
|               |                                        | [http://www |
|               |                                        | .gasab.gov. |
|               |                                        | in/pdf/Expo |
|               |                                        | sure%20Draf |
|               |                                        | t%206%20%20 |
|               |                                        | Loans%20and |
|               |                                        | %20Advances |
|               |                                        | %20Made%20b |
|               |                                        | y%20Governm |
|               |                                        | ents.pdf](h |
|               |                                        | ttp://www.g |
|               |                                        | asab.gov.in |
|               |                                        | /pdf/Exposu |
|               |                                        | re Draft 6  |
|               |                                        |  Loans and  |
|               |                                        | Advances Ma |
|               |                                        | de by Gover |
|               |                                        | nments.pdf) |
+---------------+----------------------------------------+-------------+
| Management    | Management controls are the            | OMB         |
| Controls      | organization, policies, and procedures | Circular    |
|               | used by Agencies to reasonably ensure  | A-123,      |
|               | that (1) programs achieve their        | M           |
|               | intended results; (2) resources are    | anagement's |
|               | used consistent with Agency mission;   | Res         |
|               | (3) programs and resources are         | ponsibility |
|               | protected from waste, fraud, and       | for         |
|               | mismanagement; (4) laws and            | Internal    |
|               | regulations are followed; and (5)      | Control     |
|               | reliable and timely information is     | (Effective  |
|               | obtained, maintained, reported, and    | beginning   |
|               | used for decision making.              | with Fiscal |
|               |                                        | Year 2006)  |
|               | Management controls, in the broadest   | (Revised    |
|               | sense, include the plan of             | 12/21/2004) |
|               | organization, methods, and procedures  |             |
|               | adopted by management to ensure that   |             |
|               | its goals are met. Management controls |             |
|               | include processes for planning,        |             |
|               | organizing, directing, and controlling |             |
|               | program operations.                    |             |
+---------------+----------------------------------------+-------------+
| Managerial    | Managerial cost accounting should be a | FASAB,      |
| Cost          | fundamental part of the financial      | SFFAS No.   |
| Accounting    | management system and, to the extent   | 4:          |
|               | practicable, should be integrated with | Managerial  |
|               | other parts of the system. Managerial  | Cost        |
|               | costing should use a basis of          | Accounting  |
|               | accounting, recognition, and           | Standards   |
|               | measurement appropriate for the        | and         |
|               | intended purpose. Cost information     | Concepts    |
|               | developed for different purposes       |             |
|               | should be drawn from a common data     |             |
|               | source, and output reports should be   |             |
|               | reconcilable to each other             |             |
+---------------+----------------------------------------+-------------+
| Miscellaneous | Funds received that cannot be          |             |
| Receipts      | identified to a particular Federal     |             |
|               | program.                               |             |
+---------------+----------------------------------------+-------------+
| Non           | Sale of goods or services where the    |             |
| Reimbursable  | basis of the exchange is not governed  |             |
| Sale of Goods | by a reimbursable agreement or trading |             |
| or Services   | partner transaction.                   |             |
| (User Fees)   |                                        |             |
+---------------+----------------------------------------+-------------+
| Non-Monetary  | An exchange between parties for goods  |             |
| Exchange      | received, services rendered, or other  |             |
| Transactions  | activity in accordance with a          |             |
|               | pre-existing agreement where an        |             |
|               | exchange of anything other than        |             |
|               | currency is the basis for payment.     |             |
+---------------+----------------------------------------+-------------+
| Non-Monetary  | Transactions not involving the         |             |
| Transactions  | exchange of currency.                  |             |
+---------------+----------------------------------------+-------------+
| N             | Payments in the form of check not      |             |
| on-Sufficient | processed by a financial institution   |             |
| Funds Checks  | when the payment amount is in excess   |             |
|               | of the payee's account balance at the  |             |
|               | time of the financial institution's    |             |
|               | payment processing activity.           |             |
+---------------+----------------------------------------+-------------+
| Outlay        | Outlay means a payment to liquidate an | OMB         |
|               | obligation (other than the repayment   | Circular    |
|               | of debt principal). Outlays generally  | A-11,       |
|               | are equal to cash disbursements but    | P           |
|               | also are recorded for cash-equivalent  | reparation, |
|               | transactions, such as the subsidy cost | Submission  |
|               | of direct loans and loan guarantees,   | and         |
|               | and interest accrued on public issues  | Execution   |
|               | of the public debt. Outlays are the    | of the      |
|               | measure of Government spending.        | Budget      |
|               |                                        | (6/30/06)   |
+---------------+----------------------------------------+-------------+
| Payee         | A person, corporation, or other public |             |
|               | or private entity that is authorized   |             |
|               | to receive a Federal payment from an   |             |
|               | agency.                                |             |
+---------------+----------------------------------------+-------------+
| Payment       | A government disbursement of monies to | Treasury    |
|               | any payee, including vendors,          | Financial   |
|               | employees, private citizens, state, or | Manual      |
|               | local and foreign governments in       |             |
|               | accordance with Contract terms. The    |             |
|               | payment management function consists   |             |
|               | of the following processes: payee      |             |
|               | information maintenance, payment       |             |
|               | warehousing, payment execution, and    |             |
|               | payment confirmation and follow-up.    |             |
+---------------+----------------------------------------+-------------+
| Penalties     | A charge assessed on delinquent debts  | Treasury's  |
|               | to discourage delinquencies and        | Managing    |
|               | encourage early payment of the         | Federal     |
|               | delinquent debt in full.               | Receivables |
|               |                                        | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Program       | Generally defined as an organized set  | A Glossary  |
|               | of activities directed toward a common | of Terms    |
|               | purpose or goal, undertaken or         | Used in the |
|               | proposed by an agency in order to      | Federal     |
|               | carry out its responsibilities. In     | Budget      |
|               | practice, however, the term has many   | Process     |
|               | uses and thus does not have a          | (GAO        |
|               | well-defined, standard meaning in the  | 09/2005)    |
|               | legislative process. It is used to     |             |
|               | describe an agency's mission,          |             |
|               | programs, functions, activities,       |             |
|               | services, projects, and processes.     |             |
+---------------+----------------------------------------+-------------+
| Program       | Payment expected by a specific         |             |
| Overpayments  | program, from a program beneficiary,   |             |
| Not Processed | in excess of original cost not yet     |             |
| in the Core   | processed in the Core Financial        |             |
| Financial     | System.                                |             |
| System        |                                        |             |
+---------------+----------------------------------------+-------------+
| Rebates       | Refunds resulting from a purchase of   |             |
|               | goods.                                 |             |
+---------------+----------------------------------------+-------------+
| Reimbursable  | A sum (1) that is received by an       | GAO:        |
| Activity      | agency as a payment for commodities    | Glossary of |
|               | sold or services furnished either to   | Terms Used  |
|               | the public or to another government    | in the      |
|               | account and (2) that is authorized by  | Federal     |
|               | law to be credited directly to         | Budget      |
|               | specific appropriation and fund        | Process     |
|               | accounts. Reimbursements between two   |             |
|               | accounts for goods or services are     | <http://ww  |
|               | usually expenditure                    | w.gao.gov/n |
|               | transactions/transfers.                | ew.items/d0 |
|               |                                        | 5734sp.pdf> |
+---------------+----------------------------------------+-------------+
| Relocation    | Receivables resulting from employee    |             |
|               | receipts of funds in excess of actual  |             |
|               | cost of relocating employees or        |             |
|               | employees not fulfilling the           |             |
|               | requirements of the agreement where    |             |
|               | they would be subject to payback the   |             |
|               | original amount paid by the agency.    |             |
+---------------+----------------------------------------+-------------+
| Sale of Goods | A revenue account that reports the     | Online      |
| and Services  | sales of merchandise. Sales are        | Accounting  |
|               | reported in the accounting period in   | Dictionary  |
|               | which title to the merchandise was     |             |
|               | transferred from the seller to the     | <http:/     |
|               | buyer.                                 | /www.accoun |
|               |                                        | tingcoach.c |
|               |                                        | om/accounti |
|               |                                        | ng-terms/ac |
|               |                                        | counting-di |
|               |                                        | ctionary/ac |
|               |                                        | counting-te |
|               |                                        | rms-I.html> |
+---------------+----------------------------------------+-------------+
| Settlement    | Settlement refers to the accounting    | Treasury    |
|               | process recording the respective debit | Financial   |
|               | and credit positions of the two        | Management  |
|               | parties involved in a transfer of      | Service     |
|               | funds.                                 |             |
|               |                                        |             |
|               | Funds are available for use and may be |             |
|               | drawn at any time afterward. Funds     |             |
|               | transferred through Fed Wire are       |             |
|               | available for use at the time the      |             |
|               | transfer occurs, and are settled by    |             |
|               | adjusting the reserve account balances |             |
|               | of the sending and receiving banks.    |             |
|               | Checks, automated clearinghouse        |             |
|               | transfers, and other payments between  |             |
|               | banks are settled on a provisional     |             |
|               | basis, because the possibility exists  |             |
|               | that the person initiating the         |             |
|               | transfer of funds may not have         |             |
|               | sufficient funds to cover the payment, |             |
|               | or the payment cannot be processed for |             |
|               | various reasons.                       |             |
+---------------+----------------------------------------+-------------+
| Shared        | Shared services are a bringing         |             |
| Services      | together of functions that are         |             |
|               | frequently duplicated across component |             |
|               | Agencies and delivering these services |             |
|               | more efficiently and with a customer   |             |
|               | service orientation. It is the focus   |             |
|               | on the customer service aspect of the  |             |
|               | process that distinguishes the shared  |             |
|               | services model from the concept of     |             |
|               | consolidation. The focus is on the     |             |
|               | customers because they demand the best |             |
|               | quality, timely, accurate, and         |             |
|               | reliable product(s) attainable.        |             |
|               | Sharing services leads to the          |             |
|               | elimination of redundancies. The       |             |
|               | concurrent redesign of accounting      |             |
|               | processes, organizations, and          |             |
|               | supporting systems leads to radical    |             |
|               | improvements in time, cost, quality,   |             |
|               | and user satisfaction in regard to the |             |
|               | service provided.                      |             |
+---------------+----------------------------------------+-------------+
| Sharing       | An agreement established between two   |             |
| Agreements    | or more parties for the purpose of     |             |
| (Billing)     | sharing the use of an asset.           |             |
+---------------+----------------------------------------+-------------+
| Sharing       | An agreement established between two   |             |
| Agreements    | or more parties for the purpose of     |             |
| (Collections) | sharing the use of an asset.           |             |
+---------------+----------------------------------------+-------------+
| Single        | A unified set of financial systems and | OMB         |
| Integrated\   | the financial portions of mixed        | Circular    |
| Financial\    | systems (e.g., Acquisition)            | A-127,      |
| Management    | encompassing the software, hardware,   | Financial   |
| System        | personnel, processes (manual and       | Management  |
|               | automated), procedures, controls, and  | Systems     |
|               | data necessary to carry out financial  | (           |
|               | management functions, manage the       | 07/23/1993) |
|               | financial operations of the agency,    |             |
|               | and report on the agency's financial   |             |
|               | status to central agencies, Congress,  |             |
|               | and the public.                        |             |
+---------------+----------------------------------------+-------------+
| Tax           | Amounts of identifiable, measurable,   | United      |
| Receivables   | and legally enforceable taxes due from | States      |
| and Duties    | entities.                              | Standard    |
|               |                                        | General     |
|               |                                        | Ledger      |
|               |                                        |             |
|               |                                        | <http://ww  |
|               |                                        | w.fms.treas |
|               |                                        | .gov/ussgl/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Transactions  | Monies distributed to a U.S.           | Financial   |
| in Foreign    | government agency that must be         | Management  |
| Currency      | converted to the U.S. dollar           | Service: A  |
|               | equivalent using the current United    | bureau of   |
|               | States Treasury's reporting rates of   | the         |
|               | exchange.                              | Department  |
|               |                                        | of the      |
|               |                                        | United      |
|               |                                        | States      |
|               |                                        | Treasury    |
|               |                                        |             |
|               |                                        | <ht         |
|               |                                        | tp://www.fm |
|               |                                        | s.treas.gov |
|               |                                        | /intn.html> |
+---------------+----------------------------------------+-------------+
| Treasury and  | The process whereby agencies refer     | Treasury's  |
| DOJ           | delinquent Federal non-tax debts to    | Managing    |
| Cr            | FMS or DOJ for collection. FMS or DOJ  | Federal     |
| oss-Servicing | apply a variety of collection tools    | Receivables |
|               | once agencies refer their debts.       | <htt        |
|               |                                        | p://www.fms |
|               |                                        | .treas.gov/ |
|               |                                        | debt/MFR/Gl |
|               |                                        | ossary.pdf> |
+---------------+----------------------------------------+-------------+
| Treasury Debt | A Program sponsored by the United      | Financial   |
| Management    | States Department of Treasury, Debt    | Management  |
|               | Management Services (DMS), is to       | Service: A  |
|               | improve the quality of the Federal     | bureau of   |
|               | government\'s financial management by  | the         |
|               | increasing the collection of           | Department  |
|               | delinquent debt owed to the            | of the      |
|               | government, by providing debt          | United      |
|               | management services to all Federal     | States      |
|               | agencies, and by protecting the        | Treasury    |
|               | financial interests of the American    |             |
|               | taxpayer. DMS also develops and        | <http://w   |
|               | implements government-wide debt        | ww.fms.trea |
|               | management policies.                   | s.gov/debt/ |
|               |                                        | index.html> |
+---------------+----------------------------------------+-------------+
| Treasury      | The [manual issued by the Financial    | Green Book, |
| Financial     | Management                             | Glossary    |
| Manual        | Service](ht                            |             |
|               | tp://www.fms.treas.gov/tfm/index.html) |             |
|               | containing procedures to be observed   |             |
|               | by all Agencies, Federal Reserve       |             |
|               | Banks, and financial institutions with |             |
|               | respect to payments, collections,      |             |
|               | central accounting, financial          |             |
|               | reporting, and other government-wide   |             |
|               | fiscal responsibilities of the         |             |
|               | Treasury.                              |             |
+---------------+----------------------------------------+-------------+
| Trust Fund    | Trust funds are those designated by    | United      |
| Programs      | law as such, whereby receipts are      | States      |
|               | earmarked for spending on specific     | Standard    |
|               | purposes. Trust funds are established  | General     |
|               | to carry out purposes of a trust       | Ledger,     |
|               | agreement or statute.                  | Federal     |
|               |                                        | Trust Fund  |
|               |                                        | Accounting  |
|               |                                        | Guide.      |
|               |                                        |             |
|               |                                        | <           |
|               |                                        | http://www. |
|               |                                        | fms.treas.g |
|               |                                        | ov/ussgl/tf |
|               |                                        | guide.html> |
+---------------+----------------------------------------+-------------+
| Unbilled      | Receivables resulting from an agency   |             |
| Overpayments  | payment to a party in excess of the    |             |
|               | actual cost where the agency has not   |             |
|               | yet communicated, in the form of a     |             |
|               | bill, the excess payment to the party. |             |
+---------------+----------------------------------------+-------------+
| United States | A uniform list of accounts that        | Treasury    |
| Standard      | support transactions that standardizes | Financial   |
| General       | Federal agency accounting and supports | Manual,     |
| Ledger        | the preparation of standard external   |             |
| (USSGL)       | reports. The U.S. Government Standard  | Volume I    |
|               | General Ledger Chart of Accounts (1)   |             |
|               | provides control over all financial    |             |
|               | transactions and resource balances,    |             |
|               | (2) satisfies basic reporting          |             |
|               | requirements of OMB and Treasury, and  |             |
|               | (3) integrates proprietary and         |             |
|               | budgetary accounting.                  |             |
+---------------+----------------------------------------+-------------+
| User Fees     | Fees which the service or program      |             |
|               | beneficiary pays for the cost of the   |             |
|               | services received, or the burden       |             |
|               | imposed on the program in the form of  |             |
|               | a fee.                                 |             |
+---------------+----------------------------------------+-------------+
| USSGL Account | An account within the uniform chart of | Volume I,   |
|               | accounts used by Federal agencies to   | U.S.        |
|               | record budgetary and proprietary       | Government  |
|               | accounting transactions.               | Standard    |
|               |                                        | General     |
|               |                                        | Ledger      |
|               |                                        | (Uniform    |
|               |                                        | Chart of    |
|               |                                        | Accounts    |
|               |                                        | 08/2006)    |
+---------------+----------------------------------------+-------------+
| Vendor        | Receivables resulting from vendor      |             |
| Overpayments  | receipts of funds in excess of the     |             |
|               | actual cost.                           |             |
+---------------+----------------------------------------+-------------+

# Appendix C -- Business Process Flowcharts, Symbols, and Definitions {#appendix-c-business-process-flowcharts-symbols-and-definitions .Heading}

**Flowchart Symbols Defined:**

![](media/image18.wmf)

Process -- This symbol represents a process or action step.

![](media/image19.wmf)

Decision -- This symbol indicates a question or branch in the process
flow.

![](media/image20.wmf)

Data -- This symbol represents electronic input to and/or outputs from a
process.

![](media/image21.wmf)

Connector -- This symbol indicates a jump from one point to another in a
process flow.

![](media/image22.wmf)

Terminator -- This symbol indicates that the current process flow is
ending at this point and is part of a separate process flow.

![](media/image23.wmf)

Data Transmission -- This symbol indicates the transfer of data to an
external location. This symbol is used with a dashed connector line when
the recipient is not depicted on the flowchart.

![](media/image24.wmf){width="7.083333333333333in"
height="8.78888888888889in"}

![](media/image25.wmf){width="7.0in" height="8.78888888888889in"}

![](media/image26.wmf){width="7.0in" height="8.78888888888889in"}

![](media/image27.wmf){width="7.0in" height="8.747222222222222in"}

![](media/image28.wmf){width="6.75in" height="8.634027777777778in"}

![](media/image29.wmf){width="6.209722222222222in" height="8.325in"}

![](media/image30.wmf){width="6.75in" height="8.520833333333334in"}

![](media/image31.wmf){width="6.916666666666667in"
height="9.055555555555555in"}

![](media/image32.wmf){width="5.0in" height="9.055555555555555in"}

![](media/image33.wmf){width="6.666666666666667in"
height="8.211805555555555in"}

![](media/image34.wmf){width="7.0in" height="8.747222222222222in"}

![](media/image35.wmf){width="6.416666666666667in"
height="8.747222222222222in"}

![](media/image36.wmf){width="4.75in" height="8.747222222222222in"}

![](media/image37.wmf){width="5.916666666666667in"
height="8.098611111111111in"}

# Appendix D -- Table of Core Financial System Requirements {#appendix-d-table-of-core-financial-system-requirements .Heading}

![](media/image38.wmf){width="6.228472222222222in"
height="8.253472222222221in"}

![](media/image39.wmf){width="6.039583333333334in"
height="5.263888888888889in"}

# Appendix E -- Financial Management Laws and Regulations {#appendix-e-financial-management-laws-and-regulations .Heading}

Federal Statutes:

*Appropriations Law*

Fundamental, long-standing statutes deal with the appropriation of
monies to agencies from Congress, including the appropriate use and
control of these monies. These statutes deal with the purpose, amount,
and time of appropriations, as well as the availability of the
associated monies. The following summary provides specific citations to
these statutes, their common names, and their requirements.

*Federal Managers' Financial Integrity Act of 1982*

The Federal Managers' Financial Integrity Act (FMFIA) of 1982 amended
the Accounting and Auditing Act of 1950 to require ongoing evaluations
and reports of the adequacy of the systems of internal accounting and
administrative control of each executive agency. FMFIA is comprised of
two parts. OMB Circular A-123, *Management's Responsibility for Internal
Control* (Effective beginning with Fiscal Year 2006) (Revised
12/21/2004), is the primary vehicle for implementing FMFIA in the
executive branch and describes internal control requirements. Agencies
are also required to report annually on whether the agency accounting
system complies with OMB A-127.

The FMFIA requires agency heads to establish controls that reasonably
ensure:

-   Obligations and costs are in compliance with applicable law

-   Funds, property, and other assets are safeguarded against waste,
    loss, unauthorized use or misappropriation

-   Revenues and expenditures are properly recorded and accounted for.

(OMB revised Circular A-123 in 1995 to incorporate ideas from subsequent
management legislation, such as the Chief Financial Officers Act.) The
circular provides guidance on improving the accountability and
effectiveness of Federal programs and operations by establishing and
reporting on management controls.

*Chief Financial Officers Act of 1990 and Government Management Reform
Act of 1994*

The Chief Financial Officers (CFO) Act of 1990 laid the foundation for
significant financial management reform in the Federal Government. The
Act emphasizes strong financial leadership, improved systems of
accounting, financial management and internal control, and reliable
financial information. A key element of the Act is the requirement for
Federal agencies to produce audited financial statements. The Government
Management Reform Act (GMRA) expanded financial statement audit coverage
to include department-wide and Government-wide audited financial
statements.

The CFO Act mandates three actions:

-   Strong financial management leadership: The CFO Act established, in
    OMB, the Deputy Director for Management and the Office of Federal
    Financial Management, and created chief financial officer positions
    in major agencies to provide financial management direction.

-   Enhanced financial management systems: The CFO Act mandates that
    agency CFOs develop and maintain agency financial management systems
    that comply with applicable accounting principles, standards, and
    requirements; internal control standards; and requirements of OMB
    and Treasury; and

-   Improved financial information: by requiring agency CFOs to maintain
    systems that report cost information, integrate accounting and
    budgeting, and systematically measure performance, the CFO Act
    emphasizes improved reliability and usefulness of agency financial
    information. Most importantly, the CFO Act requires that financial
    statements be prepared and audited.

*Government Performance and Results Act of 1993*

The Government Performance and Results Act (GPRA) of 1993 holds Federal
agencies accountable for achieving program results and requires them to
identify missions, set goals, measure performance, and report on their
accomplishments.

Under GPRA, each Federal agency must develop and submit a multiyear
strategic plan, which contains the agency's mission statements and
long-term strategic goals. Agencies must also submit annual performance
plans, which include performance goals linked to the budget and
indicators of how performance will be measured. Annual performance
reports, also required under the Act, provide information on the extent
to which the agency met its annual performance goals.

*Federal Financial Management Improvement Act of 1996*

The Federal Financial Management Improvement Act (FFMIA) of 1996
requires agencies to implement and maintain systems that substantially
comply with (1) Federal accounting standards, (2) the United States
Government Standard General Ledger (USSGL) at the transaction level, and
(3) Federal financial management systems requirements. In addition, the
FFMIA requires agencies' auditors to report whether agency systems
comply with FFMIA's systems requirements. Agencies that determine their
systems do not substantially comply must develop and submit remediation
plans to OMB.

To comply with Federal financial management system requirements, OMB
implementation guidance requires that systems meet the Circular A-127
requirements, [JFMIP's Federal Financial Management Systems
Requirements](http://www.jfmip.gov/jfmip/download/systemreqs/propertyfinal.pdf),
and Circular A-130, Appendix III.

*Debt Collection Act of 1982 and Debt Collection Improvement Act of
1996*

The Debt Collection Improvement Act (DCIA) is an extension of the Debt
Collection Act. The purpose of these Acts is to require proper
collection of debts, to authorize the compromise or suspension of some
debts, and to authorize the use of certain collection tools that are
available in the private sector. The use of electronic payment and
offset methods is required.

*Federal Information Security Management Act (FISMA) of 2002 (*[*Public
Law 107-347, Title
III)*](http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_public_laws&docid=f:publ398.106.pdf)

The FISMA reiterates security requirements contained in existing OMB
policies and in Federal laws such as the Computer Security Act of 1987,
the Paper Reduction Act of 1995, and Clinger-Cohen Act of 1996. The Act
mandates that Federal agencies implement an information security program
and designate a senior information security officer. FISMA also
established evaluation and reporting requirements that requires each
agency to report any significant deficiencies and an information
security policy, procedure, or practice. If relating to financial
management systems as a lack of substantial compliance with FFMIA.

*Reports Consolidation Act of 2000*

This Act gives OMB the authority to combine financial reports to the
President and Congress that contains performance and accountability
information.

*Clinger-Cohen Act (CCA) --- The Information Technology Management
Reform Act of 1996*

This Act provides that the Government information technology shop be
operated exactly as an efficient and profitable business would be
operated. Acquisition, planning, and management of technology must be
treated as a "capital investment." While the law is complex, all
consumers of hardware and software in the Department should be aware of
the Chief Information Officer's leadership in implementing this statute.

Regulatory Guidance:

*OMB Circular A-11, Preparation, Submission and Execution of the Budget
(6/30/06), Preparation, Submission and Execution of the Budget
(6/30/06), Preparing, Submitting, and Executing the Budget (Revised
7/25/2003)*

OMB made major revisions to A-11 that merged the budget formulation and
execution guidance to reinforce the requirement for agencies to
integrate budget and performance and to improve the quality of their
financial information. In addition, A-11 contains new guidance on
managing physical and financial assets.

*OMB Circular A-25, User Charges*

The Circular:

-   Establishes Federal policy regarding fees assessed for Government
    services and for sale or use of Government goods or resources

-   Provides information on the scope and types of activities subject to
    user charges and on the basis upon which user charges are to be set

-   Provides guidance for agency implementation of charges and the
    disposition of collections.

*OMB Circular A-123, Management's Responsibility for Internal Control
(Effective beginning with Fiscal Year 2006) (Revised 12/21/2004),
Management Accountability and Control (or Successor Documents)
(6/21/1995)*

This Circular, which is the primary OMB guidance for FMFIA, is described
in the section that relates to that act.

*Prompt Payment Final Rule (Formerly OMB Circular A-125, Prompt Payment)
(9/29/1999)*

The Final Rule, the primary OMB guidance for PPA, is described in the
section related to the specific act.

*OMB Circular A-127, Financial Management Systems (07/23/1993),
Financial Management Systems (or Successor Documents) (7/23/1993)*

This circular augments FFMIA by specifically mandating that Federal
Agencies implement integrated core accounting and financial management
systems. To be fully integrated, the system must address:

-   Standard data classification (both data and format)

-   Common processes for handling similar accounting events

-   Consistent internal control mechanisms

-   Elimination of duplicate transaction entry.

Circular A-127 also prescribes policies and standards for agencies to
follow in developing, operating, evaluating, and reporting on financial
management systems generally. It incorporates, by reference, Circulars
A-123 and A-130, as well as all federal financial management systems
requirements published by [JFMIP](http://www.jfmip.gov/).

*[OMB Circular
A-129](http://www.whitehouse.gov/omb/circulars/a129/a129rev.html),
Managing Federal Credit Programs (11/2000)*

This Circular prescribes policies and procedures for justifying,
designing, and managing Federal credit programs, and for collecting
non-tax receivables. It sets principles for designing credit programs,
including:

-   Preparation and review of legislation and regulations

-   Budgeting for the costs of credit programs and minimizing unintended
    costs to the Government

-   Improving the efficiency and effectiveness of Federal credit
    programs.

Circular A-129 also sets standards for extending credit, managing
lenders participating in Government guaranteed loan programs, servicing
credit and non-tax receivables, and collecting delinquent debt.

*OMB Circular A-130, Management of Federal Information Resources
(11/28/2000)*

OMB re-issued Circular A-130 in revised form in December 2000 as
Transmittal Memorandum No. 4. The expanded version of A-130 provides
guidance on the Paperwork Reduction Act, the Clinger-Cohen Act, the CFO
Act, and others. This includes the requirement for all electronic
systems, including financial management systems, to have a defined
association with the agency's enterprise architecture.

The Circular provides specific guidance on collecting and managing
information and records management, including:

-   Electronic information collection

-   Provision of information to the public

-   Information dissemination systems

-   Information safeguards.

It further mandates agencies to establish a capital planning and
investment control process (CPIC) that links information technology
investments to improved mission performance. The CPIC also establishes
the links among agency processes including strategic planning, IT
planning, enterprise architecture integration, performance planning,
financial management planning pursuant to the Chief Financial Officers
Act of 1990, and budget formulation and execution. Specifically,
sections of A-130 cover these four areas:

-   ***Capital planning and investment control*** processes must be
    followed and documented by all agencies. These processes, stemming
    from Clinger-Cohen, must integrate IRM strategic and performance
    plans, financial management plans, the agency's IT enterprise
    architecture, and its budget. The agency's process for capital
    planning and investment control should include an IRM strategic
    plan, an IT capital plan, and an IT investment portfolio as
    described in OMB Circular A-11, *Preparation, Submission and
    Execution of the Budget* (6/30/06), *Preparation, Submission and
    Execution of the Budget* (6/30/06), the annual budget circular.

-   ***Enterprise architecture*** framework and planning processes
    require an agency to document (and submit to OMB its current and
    target IT architecture and related support strategies, transition
    roadmaps, and IT and security standards, as well as a summary of the
    information services used throughout the Agency. The enterprise
    architecture framework anticipated by A-130 is driven by the
    business needs of the agency and is composed of layers complying
    with the Federal Enterprise Architecture Framework (FEAF) developed
    by the CIO Council.[^2]

-   ***Ensuring security in information systems*** is accomplished by
    explicitly incorporating security into the enterprise architecture
    and life-cycle planning for systems, and ensuring that security
    supports the agency's business operations. The agency's security
    plan must comply with the procedures and policies outlined in
    Appendix III to A-130, *Security of Federal Automated Information
    Resources*; the Federal Information Security Management Act (Public
    Law 107-347); Title III; and guidance provided by the National
    Institute of Standards and Technology (NIST). Independent advice and
    comment on the security plan must be solicited prior to the plan's
    implementation.

-   ***Information technology acquisition*** requires the use of
    adequate competition in contracting, allocating risk between the
    government and the contractor, and maximizing the return on
    investment. Major information systems should be structured into
    useful segments with narrow scope and brief duration. Off-the-shelf
    software should be used unless analysis clearly documents other
    approaches are more effective.

*Statements of Federal Financial Accounting Standards*

The FASAB was created in 1990 to develop and recommend Statements of
Federal Financial Accounting Standards (SFFASs) for use by the Federal
Government. The growing body of SFFAS issued by FASAB is considered to
be generally accepted accounting principles for Federal Government
entities.

The accounting standards that have resulted from FASAB's work are
central to effectively meeting financial management improvement goals of
the CFO Act and other legislation. In particular, FASAB's standards for
managerial cost accounting, as described in SFFAS 4, are a primary
source of guidance. This and other FASAB standards foster financial
information and reporting that is understandable, relevant, and reliable
concerning the financial position, activities, and results of operations
for the Federal Government and its departments and agencies.
Furthermore, the standards prescribe accounting systems and internal
control that help demonstrate that Federal programs are conducted in
compliance with laws and regulations.

# Appendix F - Contributors  {#appendix-f---contributors .Heading}

Table F-1 lists the individuals who contributed to development of the
Receivables Management Standard Business Process.

+------------------------+---------------------------------------------+
| Table F-1.             |                                             |
| Contributors           |                                             |
+========================+=============================================+
| Organization           | Name                                        |
+------------------------+---------------------------------------------+
| Office of Management   | Joanne Choi                                 |
| and Budget             |                                             |
|                        | Kim Farrington                              |
|                        |                                             |
|                        | Adam Goldberg                               |
+------------------------+---------------------------------------------+
| Department of Commerce | Karen McBride                               |
+------------------------+---------------------------------------------+
| Department of Defense  | William Chip (Defense Finance and           |
|                        | Accounting Service)                         |
|                        |                                             |
|                        | Greg Gayer (Defense Finance and Accounting  |
|                        | Service)                                    |
|                        |                                             |
|                        | Nello Lavorini (Business Transformation     |
|                        | Agency)                                     |
+------------------------+---------------------------------------------+
| Department of          | Sylvester Osineme                           |
| Education              |                                             |
+------------------------+---------------------------------------------+
| Department of Housing  | Rhea Riso                                   |
| and Urban Development  |                                             |
+------------------------+---------------------------------------------+
| Department of          | Jamie Cottrell (Federal Aviation            |
| Transportation         | Administration)                             |
|                        |                                             |
|                        | Ed Ramos (Department of Transportation)     |
+------------------------+---------------------------------------------+
| Department of the      | Yvette Dunbar (Bureau of Public Debt)       |
| Treasury               |                                             |
|                        | Holden Hogue (Financial Management Service) |
|                        |                                             |
|                        | Thomas Kobielus (Financial Management       |
|                        | Service)                                    |
|                        |                                             |
|                        | Debbie Schiller (Bureau of Public Debt)     |
|                        |                                             |
|                        | Greg Till (Financial Management Service)    |
+------------------------+---------------------------------------------+
| Department of Veterans | Eric Teal                                   |
| Affairs                |                                             |
+------------------------+---------------------------------------------+
| Environmental          | Valerie Chun                                |
| Protection Agency      |                                             |
|                        | Anita Jones                                 |
+------------------------+---------------------------------------------+
| Federal Communications | Regina Dorsey                               |
| Commission             |                                             |
+------------------------+---------------------------------------------+
| General Services       | Susan Fischer                               |
| Administration         |                                             |
|                        | Terry Gricher                               |
+------------------------+---------------------------------------------+
| Social Security        | Mark Graham                                 |
| Administration         |                                             |
|                        | Ron Hallameyer                              |
|                        |                                             |
|                        | Lynn Spruill                                |
+------------------------+---------------------------------------------+
| Financial Systems      | Dianne Copeland                             |
| Integration Office     |                                             |
| (formerly JFMIP)       | Dale Miller                                 |
+------------------------+---------------------------------------------+
| Program Office Support | Constance Herron                            |
| (KPMG)                 |                                             |
|                        | David Fitz                                  |
|                        |                                             |
|                        | Robert Frank                                |
|                        |                                             |
|                        | Ryan Patalune                               |
+------------------------+---------------------------------------------+

[^1]: Sources are provided if available; otherwise, the term definition
    was developed for clarification of terminology.

[^2]: The FEAF layers describe and link business processes, information
    flows, applications, data descriptions and relationships, and
    technology infrastructure.