Vol 1 Part 6 - Chapter 8000
     
                    CASH MANAGEMENT
     
          This chapter establishes procedures for Government
     agencies to follow to ensure prudent cash management
     practices when developing and implementing regulations,
     systems, and instructions. These procedures include
     billings, collections, deposits, disbursements, cash
     held outside the cash account of the Department of the
     Treasury (Treasury), and financial data reporting.
     These procedures require the use of timely methods,
     principally Electronic Funds Transfer (EFT) for the
     collection, deposit, and disbursement of funds. 
     
     Section 8010 - Scope and Applicability
     
          These procedures apply to all Government agencies,
     unless specifically exempted by statute, whose
     financial transactions directly or indirectly affect
     the cash account of Treasury. Detailed procedures for
     cash advances under Federal grants and other programs
     are in I TFM 6-2000. The TFM supplement, "Cash
     Management Made Easy," provides detailed information on
     collection and disbursement mechanisms, including
     criteria for use. See I TFM (Introduction chapter),
     Appendix 1, for a list of supplements.
      
     Section 8015 - Authority
     
          The following regulations establish the policy for
     cash management practices within the Federal Government
     relating to developing, promulgating, and implementing
     regulations, systems, and procedures:
     
          -    5 U.S.C. 301.
     
          -    31 U.S.C. 321, 1535, 3301, 3302, 3720, 6503. 
     
          -    Federal Claims Collection Act of 1966 as
                    amended by the Debt Collection Act of 1982. 
     
          -    Federal Claims Collection Standards (4 CFR
     101-105).
     
          -    Deficit Reduction Act of 1984 (Public Law
                    98-369) (31 CFR 206).
     
          -    Cash Management Improvement Act of 1990
                    (Public Law 101-453).
     
          -    Cash Management Improvement Act Amendments of
                    1992 (Public Law 102-589).
     
          -    Prompt Payment Act Amendments of 1988 (Public
                    Law 100-496).
     
     Section 8020 - Definition of Terms
     
          Agency - Any department, instrumentality, office,
     commission, board, service, Government corporation, or
     other establishment in the Executive Branch. 
     
          Annual Business Days - By convention, a 250-day
     period used to determine average daily cash-flow when
     calculating interest savings to the Government.
     
          Annual Calendar Days - By convention, a 360-day
     period used to calculate cash discounts and interest
     penalties for late payments.
     
          Assessment - An amount charged against an agency
     for noncompliance with collection or deposit
     improvement initiatives. The amount is based on the
     cost to the general fund caused by noncompliance.
     
          Benefit Days - The average number of days a
     mechanism or an improved process accelerates the
     availability of Federal receipts or defers the
     disbursement of Federal funds; used to determine
     interest savings to the Government.
     
          Cash Flow - Each category of (1) incoming funds,
     including specific program sources, travel
     reimbursements, and collection of overpayments and (2)
     disbursements, including payroll, vendors, and travel. 
     
          Cash Management - Practices and techniques
     designed to accelerate and control collections, ensure
     prompt deposit of receipts, improve control over
     disbursement methods, and eliminate idle cash balances.
     
          Cash Management Improvements Fund - A revolving
     fund financed by assessments against an agency for
     noncompliance with collection or deposit improvements.
     Moneys from this fund will be made available, without
     fiscal year limitation, for payment of expenses
     incurred in developing and implementing selected
     projects that provide for improved methods of
     collection and deposit.
     
          Cash Management Review - A comprehensive and
     ongoing study of an agency's cash-flows and
     corresponding cash management processes or mechanisms,
     conducted to identify opportunities for improvement in
     an agency's cash management practices. This review is a
     major part of the Current Assets Management Review and
     Analysis (CAMRA).
     
          Collection Mechanism - A tool or system by which
     moneys are transferred or credited to a Federal
     Government agency from an outside source or from
     another Federal Government agency. 
     
          Current Assets Management Review and Analysis
     (CAMRA) - A process to assess and improve the
     management of Federal agency finances through
     electronic data collection.  The Cash Management Review
     is a major part of CAMRA.  
     
          Current Value of Funds Rate - The average
     investment rate for the Treasury Tax and Loan accounts
     expressed as an annual rate and published by FMS in the
     Federal Register each year by October 31, to be
     effective January 1.
     
          Cutoff Time - A time predesignated by a financial
     institution beyond which transactions presented or
     actions requested will be deferred to the next banking
     day's business.
     
          Day - A calendar day, unless otherwise noted.
     
          Deposit - Money that is being or has been
     presented for credit to the U.S. Treasury. Such
     transfers can be made by agencies or directly by the
     remitter. All such transfers are effected through a
     Federal Reserve bank (FRB) or other financial
     institution.
     
          Deposit (Same Day) - A deposit made before the
     cutoff time on the day on which the funds were received
     by the agency. For example, if an agency receives funds
     for deposit at 10 a.m. on Monday and transmits the
     deposit to the bank by 2 p.m. on Monday (the
     depositary's cutoff time), then same-day-deposit
     requirements are met.
     
          Depositary - A bank or other financial institution
     designated by FMS to receive moneys for credit to the
     U.S. Treasury.
     
          Disbursement Mechanism - Any tool or system by
     which Federal moneys are transferred to an outside
     recipient or to another Federal agency.
     
          Electronic Funds Transfer (EFT) - Any method used
     to transfer funds electronically, such as wire,
     Automated Clearing House (ACH), Credit or Debit Card,
     or FMS' Online Payment and Collection (OPAC) system. 
     
          Float - The period of time that elapses between
     two collection or disbursement activities. 
      
          Invoice - A bill or other written request for
     payment.
     
          Moneys - All currency and negotiable instruments
     that are (1) held (imprest funds), (2) paid out, (3)
     owed to, or (4) collected by an agency.
     
          Payment Date - The date on which a check for
     payment is dated or the date of an EFT payment
     (settlement date). Payments by EFT mechanism will be
     made so as to be received by the contractor's financial
     institution by the established due date.
     
          Payment Terms - The terms or standards the agency
     negotiates  with, or requires of, the payor, for
     settlement of a debt or obligation.
     
          Processing Float (Collections) - The average
     amount of time between the initial receipt of the
     payment in the agency's mailroom and receipt of the
     related deposit by the depositary.
     
          Public Moneys - Includes, without being limited
     to, revenue and funds of the United States and deposit
     funds subject to the control or regulation of the
     United States or any of its officers, agents, or
     employees.
     
          Settlement Date - For payments, the date the
     receiving financial institution's Federal Reserve
     account is credited and Treasury's account is debited. 
     For collections, the date the Federal Reserve account
     of the remitter's financial institution is debited and
     the Treasury's account is credited.
     
     Section 8025 - Billings and Collections
     
     8025.10 - Timeliness of Billings and Collections.
     
          Agencies responsible for the preparation of
     invoices to individuals and organizations outside the
     U.S. Government will adhere to the following:
     
          -    Ensure that an invoice, for either an actual
                    or estimated amount, is prepared and mailed
                    within 5 business days after the day that
                    goods have been shipped or released, services
                    have been rendered, or payment is otherwise
                    due. Agencies may prepare and mail an invoice
                    later than the 5-day timeframe if they can
                    demonstrate that it is cost effective to do
                    so.
     
          -    Include a payment due date on the invoice
                    that will not be more than 30 days from the
                    date of the invoice, unless  otherwise
                    provided by law.
     
          -    If the value of the goods or services cannot
                    be specifically determined, a bill equal to
                    at least 75  percent of the estimated value
                    will be prepared and mailed within 5 business
                    days. Identify the estimated invoice as being
                    a partial invoice and note that a final
                    invoice will be completed when the value is
                    determined.
     
          -    Prepare and mail a final invoice within 30
                    days of the  submission of an estimated
                    partial invoice.
      
          -    Collections normally are required to be made
                    by EFT and must be arranged with FMS. When
                    indicated by FMS, agencies will include a
                    statement on the invoice requiring payment by
                    EFT and provide the necessary information for
                    EFT payment by the remitter.
     
     8025.20 - Charges for Late Payments. 
     
     
          Payment terms as stated in a contract, debt
     instrument, or notice of indebtedness (that is, demand
     letter) are expected to be adhered to by the debtor. If
     payment is not received by the due date, then an agency
     is expected to pursue collection of the debt using the
     appropriate available methods, and to assess interest,
     administrative charges, and penalties on past due
     amounts. 
     
          Interest, administrative charges, and penalties
     will be assessed on all overdue payments, except as
     otherwise provided in 4 CFR 102.13(g), 102.13(h), and
     102.13(i) or prohibited by statute. Interest is
     assessed on principal only (not on interest,
     administrative charges, and penalties), except in those
     cases where a debtor has defaulted on a previous
     repayment agreement or a judgment has been obtained.
     The minimum annual rate of interest to be charged will
     be calculated by Treasury as an average of the current
     value of funds to Treasury and will be published in the
     Federal Register each year by October 31, to become
     effective January 1. This Current Value of Funds Rate
     is subject to quarterly revision only if the published
     rate changes by 2 percentage points at the close of the
     prior calendar quarter. If revised, the new rate will
     be published in the Federal Register on or around the
     end of the first month of a calendar quarter, and is to
     be applied to overdue payments arising during the
     succeeding calendar quarter. Changes in the rate will
     also be published in a TFM bulletin.
     
          A higher rate of interest may be assessed if it is
     determined that a higher rate is necessary to protect
     the interest of the U.S. Government. The assessed rate
     will remain fixed for the duration of the indebtedness,
     unless a different rate is prescribed in an agreed-to
     repayment schedule.
     
          An agency will waive the collection of interest on
     a debt or any portion of the debt that is paid within
     30 days after the date on which interest began to
     accrue. Detailed procedures for credit management and
     debt collection are available in the "Asset Management
     Manual," published by FMS. (See Contacts page.) 
     
     8025.30 - Collection Mechanisms 
     
          All funds are to be collected by EFT when
     cost-effective, practicable, and consistent with current
     statutory authority.  FMS acknowledges that agencies
     may find it desirable to utilize a menu of mechanisms,
     if the base of remitters is diverse. The mechanisms
     used for collecting funds for credit to the account of
     the U.S. Government will be jointly determined by the
     responsible agency and FMS and must have as their
     objective the minimization of total cost to the
     Government as a whole, including agency direct costs,
     the cost of purchased services, and the float cost of
     the money involved in the collection system. Agencies
     will evaluate new or modified collections flows using
     the following guidelines and provide recommendations to
     FMS. When consistent with the above criteria, agencies
     should generally consider mechanisms in the following
     order of preference: (1) Automated Clearing House
     (ACH)(the computerized facility for member depositary
     institutions to process payment orders in machine
     readable form), (2) Fedwire (for  deposits requiring
     same-day settlement),(3) Debit/Credit Card (when cost
     effective), (4) lockbox, and (5) Treasury's General
     Account (TGA). 
     
          As a general guideline for specific collections
     cash flows, agencies will utilize EFT as follows:
     
          -    Fees\Fines.  EFT will be adopted as the
                    presumed method of collecting fees and fines,
                    especially when these collection cash flows
                    are recurring or of large dollar amounts.  
     
          -    Tax Collections.  EFT will be adopted as the
                    primary method for collecting taxes.  EFT
                    mechanisms may include ACH, credit card or
                    debit card, or Fedwire.    
     
          Any agency that proposes to use a collection
     mechanism other than EFT may be required to provide a
     supporting cost benefit analysis.  The analysis should
     include all costs, including those beyond direct agency
     costs for implementing EFT.
     
          Major changes in collection systems or procedures
     will only be made after consultation with, and approval
     by, FMS. This includes entering into new contractual
     agreements and renewal of current contracts that affect
     the cash management process of agency collections.
     
          The FMS publication, Cash Management Made Easy,
     provides detailed information on all available
     collection mechanisms.
     
     Section 8030 - Deposits
     
     8030.10 - Agency Deposits 
     
          In addition to collecting receipts in a timely
     manner, each agency will deposit its receipts
     expeditiously. The detailed procedures governing
     deposits are included in I TFM, Part 5. 
     
     8030.20 - Timeliness of Deposits 
     
          To reduce processing float and improve
     availability of funds, agencies must adhere to the
     following deposit practices:
     
          -    Agencies will deposit receipts totaling
                    $5,000 or more on the same day received prior
                    to depositary cutoff time.  Deposits will be
                    made as late as possible prior to the 
                    specified cutoff time to maximize daily
                    deposit amounts.
     
          -    Moneys received too late in the day to meet
                    the deposit  cutoff time must be deposited
                    the following business day. Agencies must
                    have adequate internal controls in place to
                    ensure the security of all undeposited funds.
     
          -    Collections totaling less than $5,000 may be
                    accumulated  and deposited when the total
                    reaches $5,000. However,   deposits will be
                    made by Thursday of each week, regardless of
                    the amount accumulated.
     
          -    Agencies will generally limit their deposits
                    to one per  day per deposit site. However,
                    when beneficial to the     Government,
                    agencies will make multiple deposits.
     
          -    The mailing of deposits (versus
                    hand-carrying) to Federal  Reserve banks
                    (FRBs) or commercial banks may be done only 
                    when specifically authorized in writing by
                    FMS (see Contacts page). In these cases, the
                    deposit timeframe    requirements apply to
                    the timely mailing of deposits. When a
                    deposit consists only of Treasury checks,
                    agencies are authorized to mail those checks
                    to  the nearest FRB. Refer to the next item
                    under this section for further details on the
                    deposit of Treasury checks.
     
          -    On-Line Payment and Collection System (OPAC)
                    or other mechanism for which the agency has
                    FMS approval, such   as the SF 1081: Voucher
                    and Schedule of Withdrawals and  Credits,
                    will be used for the transfer of funds
                    between  agencies. If Treasury checks are
                    received totaling $5,000  or more, they will
                    be deposited on the same day received at the
                    nearest FRB rather than Treasury's General
                    Account  with a commercial depositary (I TFM
                    5-2000). Exception:  Treasury checks received
                    by agencies outside the United States may be
                    deposited to a designated commercial
                    depositary.
     
     Section 8040 - Disbursements
     
     8040.10 - Disbursement Mechanisms  
     
          All funds are to be disbursed by EFT when
cost-effective, practicable, and consistent with current
     statutory authority. Agencies will evaluate new or
     modified cash flows using the following guidelines and
     provide recommendations to FMS.  Fedwire may be used
     only for high-dollar, low-volume payments in excess of
     $100,000, when same day settlement is required:
     
          -    Salary Payments.  ACH will be adopted as the
                    presumed  method for paying employees. 
                    Direct Deposit enrollment  forms for
                    establishing regular payments will be
                    designed  to use this approach. If required
                    by law, the forms must  afford recipients the
                    opportunity to reject EFT without 
                    justification.
     
          -    Vendor and Miscellaneous Payments. Each
                    department and  agency will exercise its
                    authority under the Federal    Acquisition
                    Regulations (FAR) to require that all      
                    contractors are paid by EFT in accordance
                    with 31 CFR 206, unless a determination is
                    made that it is not in the best interest of
                    the Federal Government to do so.  EFT will be
                    adopted as the standard method of payment for
                    all Federal program payments originated by
                    agencies or their agents. To the maximum
                    extent possible, agencies are required to use
                    Vendor Express, which is the mechanism
                    supporting the movement of Federal agencies'
                    vendor and miscellaneous payments from checks
                    and Fedwire to ACH processing. Agencies
                    proposing to use any non-EFT mechanism for
                    vendor and miscellaneous payments must
                    successfully demonstrate to FMS why EFT is
                    not feasible or cost-effective. FMS will work
                    with each agency to develop and execute
                    individual conversion plans and coordinate
                    agency conversion plans with the Regional
                    Financial Centers and the Federal Reserve
                    System.  
     
          -    Payments. EFT will be presented to
                    new beneficiaries as the presumed
                    method for receiving benefits.  EFT
                    payment methods, such as Electronic Benefit
                    Transfer, will be adopted and implemented to
                    make EFT accessible to all benefit
                    recipients.
     
          To minimize cash outlays and reduce imprest fund
     balances (see paragraph 8060.10), agencies must also
     consider the range of options available, such as the
     Government Travel Card, third-party drafts, Government
     Small Purchase Card, or ACH for travel advances and
     reimbursements. If an agency proposes to use a
     disbursement mechanism other than EFT, such as third-party
     drafts, it may be required to provide a supporting cost
     benefit analysis. The analysis should include all costs,
     including those beyond direct agency
     costs for implementation. 
     
          The On-Line Payment and Collection System (OPAC)
     or other mechanism for which the agency has FMS
     approval, such as, the SF 1081, will be used for the
     transfer of funds between agencies.
     
     8040.20 - Agency Payments 
     
          Agencies will ensure that payment terms, which
     specify when payment will be due and how payment will
     be made, are contained in all contracts with any
     organization outside the U.S. Government (USG), per FAR
     and OMB Circular A-125, "Prompt Payment." Agencies
     shall include language from FAR 52.232 in all contracts
     which support the use of EFT.
     
          Invoices that are authorized for payment by an
     agency, including progress and final payments, will be
     paid in accordance with OMB Circular A-125 or when
     otherwise due.  Accounting systems will be designed to
     ensure that invoices are paid timely and discounts are
     taken when appropriate (paragraph 8040.40). When
     agencies take discounts after the expiration of the
     discount period or fail to make timely payments,
     interest penalties will be paid according to the Prompt
     Payment Act Amendments of 1988 (Public Law 100-496) and
     OMB Circular A-125.
     
     8040.30 - Timeliness of Disbursements 
     
          An agency's systems must be designed to schedule
     the issuing of payments as close as administratively
     possible to, but no later than, the due date as
     specified in (1) the contract, (2) OMB Circular A-125,
     or (3) the invoice. Payment is deemed to be made on the
     date a check for payment is dated or the date an EFT
     payment is specified for settlement at an FRB. Payments
     must not be made on invoices prior to receipt and
     acceptance of the related goods and services by an
     agency or its agent, except as specifically provided by
     contract. Agencies must follow all provisions of OMB
     Circular A-125.
     
     8040.40 - Cash Discounts 
     
          Agency payment systems will incorporate procedures
     that take advantage of cash discounts as a matter of
     routine and eliminate any need for special handling.
     Such discounts will be taken when the discount terms
     applied in the conversion formula result in an
     effective annual interest rate equal to, or greater
     than, the Current Value of Funds Rate (Section 8025).
     The discount period is calculated from the date placed
     on the proper invoice by the contractor to the discount
     date. If the invoice is undated, the discount period
     will begin on the date a proper invoice is received by
     the designated billing office and the date annotated.
     All discount payments must be scheduled for issuance as
     close as possible to, but no later than, the last day
     of the discount period.
     
          The formula, with example, to convert discount
     terms to an effective annual discount rate to be
     compared against the Current Value of Funds Rate are in
     the figure on this page.
     
     
                         Conversion Formula
                     
     Discount       Annual Calendar 
     percent        Days                          
     _____     x    _______________________       
     100 Percent    Number of (-) Number of  =    Effective
     Minus          Days in       Days Left       Annual
     Discount       Payment       in Discount     Discount
     Percent        Period        Period*         Rate
     
          *Discount period begins with date of an invoice,
               whereas payment period begins with receipt of an
               invoice in the designated billing office unless
               otherwise noted; in effect, the discount period
               will be reduced by the number of days'  difference
               between the invoice date and date of receipt.
     
          Example for Application of Conversion Formula
     
          Current Value of Funds Rate: 5 percent
          Discount Terms: 2 percent / 10: net 30
          Invoice Date: April 15
          Receipt Date: April 21 (6 days elapsed time)
     
          .02            360
          _____      x   _____     =    .28 or 28 percent
          1.00 - .02     30 - (10-6)
     
          Based on this example, the effective annual
     discount rate exceeds the Current Value of Funds Rate,
     and the discount should be taken.
     
     Section 8050 - Cash Advances
     
          See I TFM 6-2000 for procedures relating to cash
     advances.
     
     Section 8060 - Cash Held  Outside Treasury
     
     8060.10 - Cash Held at Personal Risk, Including Imprest
     Funds, by Disbursing Officers and Cashiers 
     
          Agencies will make unannounced verifications of
     the cash balances in imprest funds at least once each
     quarter. At least every 6 months, accountable officers
     shall ensure that such funds are commensurate with
     actual needs and meet the requirements specified in I
     TFM 4-3000 and the TFM supplement, Manual of Procedures
     and Instructions for Cashiers. Cash on hand shall be
     maintained at the minimum needed to meet normal
     requirements. In lieu of cash, agencies must use ACH
     for small purchases, travel advances, and
     reimbursements to the maximum extent possible. If using
     ACH is not cost-effective, practicable, or consistent
     with current statutory authority, agencies will use the
     Government Small Purchase Card or third-party draft.
     
     8060.20 - All Other Cash Held Outside Treasury 
     
          All public moneys must be deposited to the
     Treasury's General Account as prescribed in section
     8030 unless there is specific statutory authority to do
     otherwise. Such funds include those held in escrow,
     seized in connection with law enforcement activities,
     deposited in court, obtained as a result of an agency's
     regulatory enforcement authority, and the like.
     Detailed information on the collateralization of
     accounts is found in I TFM 6-9000.
      
     Section 8065 - Restrictions on Financial Transactions
     With Foreign Countries and International Organizations
     
          These policies are intended to ensure that U.S.
     dollars are retained in the U.S. Treasury until
     actually required for immediate disbursement and that
     interest on U.S. funds will not be improperly used to
     subsidize international programs. These programs
     include bilateral program transactions with foreign
     countries and international organizations. Examples
     include procurement, research, and co-development and
     co-production projects. This section applies to all USG
     departments and agencies administering such
     international programs.
     
     8065.10 - Policy 
     
          On behalf of the USG, the Secretary of the
     Treasury has established the following USG-wide
     policies:
     
          -    Funds shall not be withdrawn from the U.S.
                    Treasury for  transfer to any recipient prior
                    to the need for the funds. This need is
                    determined by the actual immediate funding 
                    requirements of the recipient country or
                    organization. Dollar outlays for
                    international programs requiring USG  funding
                    shall be made as closely as possible to
                    current  program expenditure needs. Monthly
                    payments are the norm.
     
          -    The USG funding requirements shall be
                    obtained by  appropriation. No part of
                    program funding shall be derived from
                    interest earned on USG contributions. The
                    appropriate USG department or agency is
                    responsible for assuring that any interest
                    earned is promptly deposited to the Treasury
                    Department receipt account "--1435, General
                    Fund  Proprietary Interest, Not Otherwise
                    Classified."
     
          -    The Treasury Fiscal Assistant Secretary in
                    consultation  with the Treasury Assistant
                    Secretary for International  Affairs will
                    consider requests from a foreign country or
                    international organization for temporary U.S.
                    dollar  deposit and safekeeping in a Treasury
                    account. In  extraordinary circumstances,
                    requests for investment of  such funds will
                    also be considered. These requests should be
                    accompanied by a recommendation from the
                    concerned USG department or agency and should
                    specify the reasons, the specific financial
                    arrangements proposed, and relevant political
                    and financial considerations.
     
          These policies are intended to ensure that U.S.
     dollars are retained in the U.S. Treasury until
     actually required for immediate disbursement and that
     interest on U.S. funds will not be improperly used to
     subsidize any international program.
     
     8065.20 - Coordination with Treasury 
     
          The Fiscal Assistant Secretary and the Assistant
     Secretary for International Affairs will be immediately
     advised of negotiations concerning international
     programs and will review the financial provisions of
     any pertinent Memorandum of Agreement (Understanding)
     before it is signed.
     
     Section 8070 - Foreign Currency
     
          The cash management of U.S. Government-owned
     foreign  currencies generally requires the same
     principles and guidelines outlined in this chapter for
     the cash management of U.S. dollar transactions by U.S.
     agencies. For the cash management procedures and
     practices within the Federal Government relating to the
     purchase, custody, deposit, transfer, sale, and use of
     foreign exchange, see I TFM 4-9000 - Foreign Exchange
     Transactions.
     
     Section 8075 - Review, Monitoring, and Reporting of
     Agency Cash Management
     
          This section covers the procedures and
     documentation necessary for FMS to monitor agencies'
     cash management improvements.
     
          All funds are to be collected and disbursed by EFT
     when cost-effective, practicable, and consistent with
     current statutory authority.  Cash Management
     initiatives will be developed by an agency when it is
     determined that improvements are needed. FMS will work
     with the agency to establish implementation dates and
     monitor agency cash management performance.  In cases
     where an agency fails to meet a scheduled date within
     its control,  or where an agency converts to a less
     cost-effective transfer mechanism without prior,
     written FMS approval, FMS will send a formal Notice of
     Deficiency to the agency's cash management official.
     Failure by an agency to meet a scheduled collections
     initiative implementation date within its control may
     result in the assessment of charges against the agency. 
     
     8075.10 - Agency Procedures
     
          Each agency will maintain a separate and distinct
     set of written internal procedures covering the subject
     of cash management. The procedures will cover agency
     activities and operations impacting the flow of funds
     to and from  Government accounts and the balances in
     such accounts. A copy of agency procedures will be
     furnished to FMS upon request.
     
     8075.20 - Cash Management Performance 
     
          To ensure effective cash management, the job
     elements of agency personnel responsible for receipts
     and disbursements should include cash management as
     critical performance measurements.
     
     8075.30 - Cash Management Reviews 
     
          An agency is responsible for monitoring
     efficiency, effectiveness, and profitability in its
     cash management practices. The monitoring includes a
     methodology to ensure that an agency review is
     completed for receipts and disbursements. The review
     will--
     
          -    Determine if an agency is collecting and
                    disbursing funds  by EFT.
     
          -    Determine if an agency is billing,
                    collecting, and  depositing in a timely
                    manner.
     
          -    Determine if an agency is making 
                    disbursements according to the Prompt Payment
                    Act Amendments of 1988.
     
          -    Document agency cash-flows to include all
                    collections and disbursements.
     
          -    Determine whether an opportunity exists to
                    implement a better mechanism or process, or
                    upgrade an e0xisting  mechanism or process.
     
          Agencies may be required to perform a
     comprehensive cash management review every 5 years, the
     first of such reviews having been performed in 1986.
     FMS will notify agencies when reviews are scheduled and
     provide detailed information to the agencies on the
     process.
     
          FMS reserves the right to periodically review an
     agency's cash management program to ensure that
     adequate progress is being made to improve cash
     management at the agency. Agencies will be notified in
     advance of FMS's review and must make available all
     documentation related to each cash-flow. Agencies will
     be held responsible for the accuracy of such
     documentation. 
     
     8075.40 - Agency Certification 
     
          Each year in which a cash management review is not
     performed, an agency's cash management official may be
     required to certify whether the agency's cash-flows
     meet the cash management standards set forth in the
     TFM. Agencies may also be required to update cash flow
     data and provide the status of implementation of cash
     management improvements.  Agencies must return
     certification to FMS within a specified timeframe.
     
     8075.50 - Establishing and Tracking Cash Management
     Improvements 
          FMS will establish cash management initiatives
     identified through cash management reviews, on-site
     reviews, and other means.  Progress on these
     initiatives will be tracked through FMS and agency
     sources and may be verified through the annual
     certification.  FMS will work with agencies to
     determine the annual savings derived from each
     completed initiative.  The standard formula for
     measuring interest savings based on benefit days is as
     follows:
     
          Cash Flow Amount x Benefit x Current Value   =
     Interest
     
          250 (Business Days) Days of Funds Rate Savings
     
          Formulas for calculating savings based on cost
     avoidance are provided to the reporting agencies by
     FMS.
     
     Section 8080 - Noncompliance with Collection, Deposit,
     or Disburse-ment Improvements 
     
          This section covers policies and procedures for
     notifying an agency of noncompliance with scheduled
     implementation dates, for assessing charges against an
     agency for noncompliance, and for agency appeal.
     
     8080.10 - Assessment of Charges 
     
          Agencies will be held accountable for meeting
     implementation dates for initiatives developed either
     by mutual agreement with FMS or as prescribed by FMS
     after considering all applicable factors.
     Implementation of these initiatives will be monitored
     on an annual basis by FMS.  Failure by an agency to
     meet a collection initiative implementation date within
     its control may result in assessment of charges for
     noncompliance in the amount of savings (determined by
     the interest savings formula) that would have been
     realized by timely implementation.
     
     8080.20 - Warning Letter
     
          When FMS has determined that an agency is at fault
     and may not implement an initiative by the scheduled
     implementation date, a warning letter will be sent to
     the designated cash management official. The warning
     letter will indicate an FMS contact with whom to
     discuss possible solutions or alternative courses of
     action. For collections initiatives, the warning letter
     will also contain--
     
          -    Identification of the initiative and
                    scheduled  implementation date.
     
          -    A statement that the implementation schedule
                    of the  initiative is in jeopardy and the
                    basis for this  determination.
     
          -    The amount that will be charged, based on
                    proposed savings associated with the
                    initiative, if final implementation date is
                    missed, and method of calculating charges.
     
          -    FMS's authority to impose charges.
     
          -    Agency's appropriation to be charged.
     
     8080.30 - Issuance of the Notice of Deficiency for
     Collections Initiatives 
     
          When an agency misses a scheduled collections
     implementation date within its control, FMS will send a
     Notice of Deficiency to the designated cash management
     official. The notice will be sent on the first working
     day after the scheduled implementation date and will
     include the same information listed under paragraph
     8080.20, above. For collections initiatives, the notice
     will also advise the agency of the right to file an
     appeal, and the date the charge will be imposed, in the
     absence of an appeal. Charges will accrue from the date
     of the Notice of Deficiency and will be terminated when
     FMS has determined that an agency has implemented the
     initiative.
     
     8080.40 - Appeals
     
          Agencies filing an appeal must submit the appeal
     in writing to the Commissioner, Financial Management
     Service, within 45 days of the Notice of Deficiency.
     FMS will acknowledge receipt of the appeal by letter
     within 5 days.
     
          a.  Contents of an Appeal. An appeal from an
     agency must contain the following elements:
     
          -    Statement of disagreement with provisions of
                    the Notice  of Deficiency and the basis for
                    the appeal.
     
          -    Action requested by the agency.
     
          b.   Appeals Board. The Appeals Board will consist
     of the following three members, or their designees:
     
          -    Deputy Chief Financial Officer, U.S.
                    Treasury. 
     
          -    Assistant Commissioner, Federal Finance,
                    Financial Management Service. 
     
          -    Cash management official from a Federal
                    agency other than  the appealing agency. This
                    member to be chosen in alphabetical order
                    from the list of agencies having confirmed
                    Chief Financial Officers.
      
          c.  Appeal Review Process. The Appeals Board will
     review the Notice of Deficiency, the written appeal
     from the agency, and any additional information
     submitted by FMS within 30 days of receipt of the
     appeal. Oral hearings will be held solely at the
     discretion of the Board. If additional time is required
     to review the appeal, the Board may extend this review
     period for an additional 30 days by notifying the
     agency prior to the expiration of the initial 30-day
     period.
     
          d.  Appeal Decision. The Board will issue a
     written majority decision within 30 days, or as
     extended, after receiving an agency's appeal. The
     decision must contain--
     
          -    Disposition of the appeal.
     
          -    Statement summarizing the basis of the
                    decision.
     
          -    Action to be taken by the agency and FMS.
     
          -    Amount and effective date of any assessed
                    charge.
     
          e.  Deferral of Charges. The Board must specify
     the terms of any deferral of charges. Evidence of
     subsequent compliance with these terms must be
     submitted to the Board by the agency and FMS. The Board
     will review the evidence and decide whether to impose a
     charge.
     
     8080.50 - Payment of Charges
     
          An agency must submit appropriate accounting
     information to the Assistant Commissioner, Federal
     Finance, Financial Management Service, within 30 days
     of the effective date of the charge or the appeals
     decision. The charge will be made against the agency's
     funds available for the administration or operation of
     the program(s) to which the collections relate. If an
     agency does not voluntarily pay the assessed charge,
     FMS will automatically debit the appropriate account.
     Charges will be assessed for each month that
     noncompliance continues.
     
     8080.60 - Termination of Charges
     
          Charges will be terminated when the initiative has
     been implemented or, in the event of an appeal, when
     the agency has submitted evidence of compliance with
     the decision of the Appeals Board.
     
     8080.70 - Issuance of the Notice of Deficiency for
     Payments Initiatives
     
          When an agency misses a scheduled payments
     implementation date, FMS will send a Notice of
     Deficiency to the designated cash management official.
     The notice will be sent on the first working day after
     the scheduled implementation date.  FMS reserves the
     right at some future date to define the process for
     assessing charges against agencies for missing a
     scheduled payments initiative implementation date.
     
     Section 8085 - Cash Management Improvements Fund (CMIF)
     
          This section states the policies, procedures, and
     criteria for disbursing moneys from the CMIF.
     
     8085.10 - Policy
     
          Moneys paid into the CMIF will be based on charges
     assessed under 31 CFR 206.9. Disbursements will be made
     for projects selected by the Project Selection and
     Approval Committee. The Committee shall consist of the
     following officials or their designated
     representatives:
     
          -    Deputy Commissioner, Financial Management
                    Service.
     
          -    Assistant Commissioner, Federal Finance,
                    Financial      Management Service.
     
          -    Agency Cash Management Official designated
                    from one Federal agency other than the agency
                    applying to the CMIF. (The order of agency
                    assignment to the board will be published in
                    a TFM bulletin.)
     
          The CMIF will not be used for routine operating
     expenses. Priority will be given to funding prototype
     systems and new applications of existing systems.
     Project selection will be based on payback and/or
     Governmentwide cash management applicability.
     
     8085.20 - Requests for Payments from the Cash
     Management Improvements Fund
     
          A TFM bulletin will be issued when moneys from the
     CMIF are available. The bulletin will include the
     amount of money available in the CMIF and will specify
     any information required from the agency for
     consideration for payment from the CMIF.
     
     8085.30 - Approval of Requests for Funds
     
          The Project Selection and Approval Committee will
     evaluate all requests and select appropriate projects
     for funding. The disbursement of moneys from the CMIF
     to an agency will be made under the authority of the
     Economy Act (31 U.S.C. 1535). Upon approval, the
     committee will authorize the transfer of the total
     amount of approved funds to the project agency or will
     arrange funding on a reimbursable basis. Money will be
     transferred to, and reported by, the agency as
     appropriate, based on current accounting procedures.
     
     8085.40 - Reporting
     
          A quarterly financial report will be provided to
     FMS (see Contacts page for address) by each project
     agency. The financial report will include--
     
          -    Receipts (advances from the CMIF).
     
          -    Disbursements (by object class).
     
          -    Unexpended balance (undisbursed funds or
                    moneys due from the CMIF).
     
          Information obtained from these reports and any
     additional reports required by law or regulation will
     be compiled by FMS for quarterly publication in the
     Treasury Bulletin.
     
     Section 8090 - Waivers, Exemptions, and Other
     Applicable Regulations
     
     8090.10 - Waivers
     
          Requests for waivers from any of the requirements
     set forth in this chapter must be submitted to FMS for
     consideration. Each request must identify the specific
     requirement, state the reason for the request, the
     period of time to be covered by the waiver, and any
     documentation in support of the request.
     
     8090.20 - Exemptions
     
          Agencies subject to Treasury regulations with
     programs that are exempt by law from one or more
     provisions of these regulations should advise FMS of
     the applicable program, the governing law, and the
     conflicting provision. The Tennessee Valley Authority
     is exempt from provisions of Section 2652 of the
     Deficit Reduction Act of 1984.
     
     8090.30 - Other Applicable Regulations
     
          The provisions of this chapter are designed to
     supplement existing regulations relating to the
     subjects covered herein and do not relieve agencies
     from compliance with all other applicable regulations. 
     
     
     
                       CONTACTS 
     
     
          Inquiries concerning paragraph 8025.20 regarding
     calculation of the value of funds rate, paragraph
     8025.30, and concerning section 8075 of this chapter
     should be directed to:
     
     
          Department of the Treasury
          Financial Management Service
          Program Compliance & Evaluation Division
          Liberty Center (Rm 422)
          Washington, DC 20227
          (Telephone 202-874-6610)
     
          Inquiries concerning other provisions of paragraph
     8025.20 and credit management and debt collection,
     should be directed to:
     
          Department of the Treasury
          Financial Management Service
          Credit and Debt Management Division
          Liberty Center (Rm 508)
          Washington, DC  20227
          (Telephone 202-874-6670)
     
          Inquiries concerning Section 8070 of this chapter
     and requests to mail deposits to an FRB should be
     directed to:
     
          Department of the Treasury
          Financial Management Service
          Banking Management Division
          Prince George Center II (Rm 500A)
          3700 East-West Highway
          Hyattsville, MD 20782
          (Telephone 202-874-6900)
     
          Inquiries concerning all other provisions of this
     chapter should be directed to:
     
          Department of the Treasury
          Financial Management Service
          Cash Management Policy & Planning Division
          Liberty Center (Rm 521C)
          Washington, DC 20227
          (Telephone 202-874-6590)