Department of the Treasury – Congressional Justification FY 2009



Departmental Summary

FY 2009 President’s Budget by Function

(Dollars in Thousands)

Appropriation

FY 2007 FY 2008 FY 2009

Enacted Enacted President’s 

Budget

Increase/

Decrease Percent Change

Management & Financial $614,774 $699,412 $682,817 -$16,595 -2.4%

Departmental Offices Salaries and Expenses 216,348 248,360 273,895 25,535 10.3%

Dept-wide Systems & Capital Invest. Program 30,268 18,710 26,975 8,265 44.2%

Office of Inspector General 16,957 18,450 19,356 906 4.9%

Treasury IG for Tax Administration 132,861 140,533 145,736 5,203 3.7%

Community Development Financial Institutions Fund 54,506 94,000 28,620 (65,380) -69.6%

Financial Crimes Enforcement Network 73,216 85,844 91,335 5,491 6.4%

Alcohol & Tobacco Tax and Trade Bureau 90,618 93,515 96,900 3,385 3.6%

Fiscal Service Operations $414,235 $417,294 $426,398 $9,104 2.2%

Financial Management Service 235,381 234,423 239,344 4,921 2.1%

Bureau of the Public Debt* 178,854 182,871 187,054 4,183 2.3%

Tax Administration** $10,597,065 $10,892,384 $11,361,509 $469,125 4.3%

IRS Taxpayer Services 2,138,238 2,150,000 2,150,000 0 0.0%

IRS Enforcement 4,686,477 4,780,000 5,117,267 337,267 7.1%

IRS Operations Support 3,544,835 3,680,059 3,856,172 176,113 4.8%

IRS Business Systems Modernization 212,659 267,090 222,664 (44,426) -16.6%

IRS Health Insurance Tax Credit Administration 14,856 15,235 15,406 171 1.1%

Total, Treasury Appropriations Committee $11,626,074 $12,009,090 $12,470,724 $461,634 3.8%

Treasury International Programs $1,357,369 $1,327,579 $2,241,305 $913,726 68.8%

International Financial Institutions 1,273,219 1,277,289 2,071,305 794,016 62.2%

Technical Assistance 19,800 20,235 29,000 8,765 43.3%

Debt Restructuring 64,350 30,055 141,000 110,945 369.1%

Total $12,983,443 $13,336,669 $14,712,029 $1,375,360 10.3%

* Does not include estimated user fee offset.

** FY 2007 Enacted represents the approved Operating Plan.

Overview

The U.S. Department of the Treasury’s budget 

priorities reflect the Department’s dedication to 

promoting economic growth and opportunity, 

strengthening national security, and exercising 

fiscal discipline while steadily improving the 

Department’s operations to ensure it remains a 

world-class organization.

The FY 2009 President’s Budget request identifies 

the resources required to support the Treasury 

Department’s role as the steward of U.S. economic 

and financial systems, and as an influential participant 

in the international economy. The FY 2009 

President’s Budget emphasizes initiatives that directly 

support the Department’s four strategic goals:

•	Effectively manage U.S. government finances

•	Ensure U.S. and world economies perform at full 

economic potential

•	Prevent terrorism and promote the nation’s 

security through strengthened international 

financial systems

•	Dedicate to management and organizational 

excellence

The Department of the Treasury performs a critical 

role in U.S. and global economies, continually 

evolving to meet the ever-changing needs of the 

nation. The Department provides cash management 

for the federal government, produces currency and 

coin, administers the tax code, oversees the financial 

sector, and plays an integral role in combating the 

financing of terrorism, the proliferation of weapons 

of mass destruction, and other threats to our 

national security. 

This chapter will highlight how Treasury’s FY 2009 

budget request supports each of these priorities and 

discuss the Department’s progress toward meeting 

the goals of the President’s Management Agenda. 

Detailed information on how each bureau supports 

these goals is provided in its respective chapter. 
Department of the Treasury – Congressional Justification FY 2009

FY 2009 President’s Budget by Strategic Goal (Dollars in Thousands)

Treasury Goal/Objective

Effectively Managed 

US Government 

Finances

U.S. and World 

Economies

Perform at Full 

Economic Potential

Prevented Terrorism 

& Promoted Nation’s 

Security

Management and 

Organizational 

Excellence

Total

Direct $ Reimb. $ Direct $ Reimb. $ Direct $ Reimb. $ Direct $ Reimb. $ Direct $ Reimb. $

Management & Financial $108,571 $2,399 $150,903 $8,609 $197,285 $12,238 $226,058 $10,573 $682,817 $33,819 

Departmental Offices Salaries and Expenses 59,151 936 74,803 7,204 105,950 6,987 33,991 3,373 273,895 18,500 Dept-wide Systems & Capital Invest. Program 26,975 26,975 0 Office of Inspector General 19,356 6,300 19,356 6,300 Treasury IG for Tax Administration 145,736 900 145,736 900 Community Development Financial Institutions Fund 28,620 28,620 0 Financial Crimes Enforcement Network 91,335 5,251 91,335 5,251 Alcohol & Tobacco Tax and Trade Bureau 49,420 1,463 47,480 1,405 96,900 2,868 

Fiscal Service Operations $426,398 $243,017 $0 $0 $0 $0 $0 $0 $426,398 $243,017 

Financial Management Service 239,344 228,010 239,344 228,010 Bureau of the Public Debt 187,054 15,007 187,054 15,007 

Tax Administration $11,091,461 $96,285 $0 $0 $270,048 $11,619 $0 $0 $11,361,509 $107,904 

IRS Taxpayer Services 2,150,000 22,454 2,150,000 22,454 IRS Enforcement 4,909,071 32,081 208,196 11,619 5,117,267 43,700 IRS Operations Support 3,794,320 41,750 61,852 3,856,172 41,750 Business Systems Modernization 222,664 222,664 0 Health Insurance Tax Credit Administration 15,406 15,406 0 

Total, Treasury Appropriations Committee $11,626,430 $341,701 $150,903 $8,609 $467,333 $23,857 $226,058 $10,573 $12,470,724 $384,740 

Treasury International Programs 2,241,305 2,241,305 0 

Total, Appropriated Level $13,867,735 $341,701 $150,903 $8,609 $467,333 $23,857 $226,058 $10,573 $14,712,029 $384,740 Non Appropriated Bureaus $0 $0 $0 $3,747,826 $0 $0 $0 $136,011 $0 $3,747,826 

Treasury Franchise Fund 136,011 0 136,011 Bureau of Engraving and Printing 559,500 0 559,500 U.S. Mint 2,125,816 0 2,125,816 Office of the Comptroller of the Currency 810,872 0 810,872 Office of Thrift Supervision 251,638 0 251,638 

Subtotal, Direct $ $13,867,735 $150,903 $467,333 $226,058 $14,712,029 Subtotal, Reimbursable $ $341,701 $3,756,435 $23,857 $146,584 $4,268,577 Total, Treasury Level $14,209,436 $3,907,338 $491,190 $372,642 $18,980,606 
Department of the Treasury – Congressional Justification FY 2009



FY 2009 President’s Budget Request

The FY 2009 President’s Budget request of 

$12.4 billion for the Treasury Department identifies

the resources necessary to effectively manage 

the government’s finances, promote economic 

opportunity through sound fiscal policy, work towards 

entitlement reform, strengthen trade and investment 

policies, and maximize voluntary tax compliance. The 

request, which is $461 million above the FY 2008

enacted level (an increase of 3.8 percent), reflects

the growing need for the Treasury Department 

to advance an economic system that promotes an 

improved global quality of life while supporting the 

national security strategy, and ensuring the safety and 

integrity of our financial systems against the abuse 

of terrorist financiers, money launderers, and other 

criminals. While the majority of the Department’s 

budget is funded through the Department of 

the Treasury Appropriations Act, an additional 

$2.2 billion is funded through the State, Foreign 

Operations, and Related Programs Appropriations 

Act for international assistance, including $400 

million as the first installment of a $2 billion U.S. 

commitment to a newly created international clean 

technology fund to address the growing problem of 

accelerating greenhouse gas emissions growth in major 

developing countries.

Effectively Manage the Nation’s Finances 

The FY 2009 budget request funds the Department’s 

priorities in managing the nation’s finances effectively, 

which includes collecting money due to the United 

States by maximizing voluntary compliance with tax 

laws and regulations, making payments, and financing 

the federal government by continually improving 

financial management processes. Key priorities also 

include overseeing, accounting for, and reporting on 

government expenditures and collections, particularly 

delinquent debt owed the government; accurately 

forecasting receipts and payments; determining 

borrowing needs; and executing the borrowing 

strategy to meet the financial demands of the federal 

government at the lowest possible cost over time.

Discourage and Deter Non-Compliance

Collecting federal taxes and other revenue through a 

fair and uniform application of the law is integral to 

the Department of the Treasury’s core mission. The 

Department’s priority is to efficiently and effectively 

enforce the nation’s tax laws, minimize taxpayer 

burden, and deliver appropriate levels of service to 

maximize voluntary compliance, thereby reducing 

the tax gap. The FY 2009 budget request includes 

$11.362 billion for the IRS, which is an increa

of $469 million above the FY 2008 enacted level. 

Highlights include:

•	$287 million for new enforcement initiatives aimed 

at improving compliance and reducing the tax 

gap. The IRS will enhance coverage of high-risk 

compliance areas and expand document matching 

efforts. It will target the tax gap associated with 

large corporate and small business taxpayers, highincome taxpayers, and domestic taxpayer offshore 

activities of U.S. taxpayers. Enforcement will 

focus on critical reporting, filing, and payment 

compliance programs and highlight abusive 

tax avoidance transactions. These initiatives 

(including the research investment noted below) 

will generate $2 billion per year in new enforcement 

revenue once the new hires reach full potential in 

FY 201

•	$51 million for enhanced research to allow the

IRS to improve the targeting of its enforcement 

resources to specific areas of non-compliance, 

thus reducing the burden on compliant taxpayers, 

improving the fairness of the tax system, and 

increasing revenue. 

•	$23 million to implement legislative proposals

that would improve compliance with minimum 

impact on taxpayer burden. It is estimated that 

these proposals will generate $36 billion in revenue

over the next ten years. 

•	$223 million for the Business Systems Modernization

program to continue progress on modernizing tax 

administration systems that improve both service 

and enforcement programs.

The Treasury Department also regulates the 

manufacture and sale of alcohol, tobacco, firearms, 

and ammunition, and collects excise taxes on the 

sale of these products. In FY 2007, the Alcohol and 

Tobacco Tax and Trade Bureau collected $14.7 billion

in excise taxes, interest, and other revenues.
Department of the Treasury – Congressional Justification FY 2009

Optimize Cash and Debt Portfolio 

and Expand Electronic Transactions

The FY 2009 budget request provides the funds 

necessary for Treasury to meet its responsibilities as 

the federal government’s financial manager. 

Treasury’s management of the federal government’s 

finances includes disbursing payments, collecting 

revenue, issuing debt, and preparing public financial 

statements through the Financial Management 

Service. The Department plays an important role in 

providing critical services to millions of U.S. taxpayers 

as it issues timely and accurate government payments 

such as Social Security benefits, IRS tax refunds, and 

veterans’ benefits. As the government’s financial 

manager, Treasury oversees a daily cash flow of nearly 

$60 billion, disbursing 85 percent of the federal 

government’s payments. The Department continues 

to leverage technological advancements to achieve allelectronic cash management, issuing over 981 million

non-Defense payments worth $1.6 trillion to a wide

variety of recipients, including special payments such 

as Federal Emergency Management Agency payments 

and the 2007 telephone excise tax refund. Seventyeight percent of all payments disbursed were via direct 

deposit, representing a cost savings to the taxpayer of 

over 80 cents per transaction. 

The Department determines and executes the federal 

borrowing strategy to meet the monetary needs of 

the government at the lowest possible cost. Each 

year, Treasury manages more than $9 trillion of 

public debt through its Bureau of Public Debt. 

Public debt includes marketable securities, savings 

bonds, and other instruments held by state and local 

governments, federal agencies, foreign governments, 

corporations, and individuals. The Department 

of the Treasury’s activities minimize the interest 

paid on the national debt over time and enhance 

market liquidity. To improve debt management 

the Department will invest resources in system 

modernization creating redundancy and enhanced 

functionality. In order to provide better customer 

service, Treasury offers Treasury Direct, an electronic, 

web-based system that electronically issues securities 

to retail customers and enables investors to manage 

their accounts on-line. 

Ensure Full Performance 

of U.S. and World Economies

The Secretary of the Treasury is the President’s 

leading policy advisor on a broad range of domestic 

and international economic issues. Treasury’s 

Departmental Offices, including the Offices of 

International Affairs, Tax Policy, Economic Policy, and 

Domestic Finance, support the Secretary in this role 

through the provision of technical analysis, economic 

forecasting, and policy guidance on issues ranging 

from federal financing to responding to international 

financial crises. The Department supports policies 

that stimulate U.S. economic growth, strengthen 

and modernize entitlement programs, and minimize 

regulatory burdens while ensuring the safety and 

soundness of financial institutions. 

Stimulate U.S. Economic Growth

U.S. capital markets make a vital contribution to 

the nation’s wealth and prosperity by directing 

investments toward innovation, promoting economic 

growth, and ensuring that the allocation of resources 

is directed toward the most efficient use. Vibrant 

capital markets enable investors to seed new 

companies, leading to job creation and economic 

prosperity. American consumers and investors benefit 

from a vibrant and healthy financial services sector 

that provides opportunities to access credit, save and 

invest for the future, and insure against risks. It is 

important, therefore, that our capital markets remain 

the best in the world. 

Accordingly, the Treasury Department has undertaken 

a competitiveness-related initiative to examine the 

regulatory structure of our financial institutions 

to evaluate and propose solutions that achieve the 

right balance. The regulatory policies in place 

for financial institutions must effectively protect 

consumers and investors, while at the same time 

promote entrepreneurialism and capitalism that is 

the foundation of our national economic success. 

The Treasury Department plans to release its report 

early in 2008.

In addition, by participating in the negotiation and 

implementation of international agreements, the 

Treasury Department removes trade and investment 

barriers, stimulates domestic and global growth, and 

creates employment opportunities for Americans. 
Department of the Treasury – Congressional Justification FY 2009

Additionally, the Department supports trade 

liberalization and budget discipline through its role in 

negotiating, implementing, and policing international 

agreements to reduce official export subsidies. By 

negotiating agreements in the Organization for 

Economic Cooperation and Development, the 

Treasury Department drastically reduced the subsidies 

that member governments can provide when financing 

national exports. The volume of this financing 

activity is approximately $70 billion annually. These 

agreements open markets and level the playing field 

for U.S. exporters, and save U.S. taxpayers about 

$800 million each year. Cumulative budget savings 

from these agreements are estimated to be over 

$12 billion

Maintaining Healthy Markets

Treasury is committed to supporting healthy financial 

markets and to addressing weaknesses when they do 

arise. In FY 2009, the Department will continue its 

industry-wide effort to respond to the downturn in 

the housing and mortgage markets. By preventing 

avoidable foreclosures, the Department will help 

to safeguard neighborhoods and communities, and 

fulfill our primary responsibility of protecting the 

broader U.S. economy. 

After convening a diverse group of market participants 

through the HOPE NOW Alliance, in FY 2008 

the Treasury Department implemented a three 

point plan to avoid preventable foreclosures and to 

minimize the impact of the housing downturn on the 

U.S. economy:

•	Increasing efforts to reach able homeowners who 

are struggling with their mortgages

•	Working to increase the availability of affordable 

mortgage solutions for these borrowers

•	Leading the industry to develop a systematic 

means of efficiently moving able homeowners into 

sustainable mortgages

In its first three months, the HOPE NOW Alliance 

sent over 450,000 letters to at-risk borrowers 

encouraging them to contact their servicer or a 

non-profit credit counselor at 888-995-HOPE. 

The Department has also coordinated with the 

Department of Housing and Urban Development 

to implement FHASecure, allowing over 67,000 

families to refinance into FHA insured loans, while 

also supporting additional reforms to the tax code 

that were signed by the President. 

The FY 2009 budget request also includes 

$28.6 million for the Community Development 

Financial Institutions Fund (CDFI Fund). The CDFI 

Fund’s mission is to expand the capacity of financial 

institutions to provide credit, capital, and financial 

services to underserved populations and communities 

in the United States.

Strengthen Financial Institutions

One of the principal objectives of the Treasury 

Department is to enable commerce. The Department 

is responsible for the safety and soundness of national 

banks and federally-chartered savings associations. 

The Treasury Department also produces the coins and 

currency needed for commerce, and guards against 

counterfeiting and other misuse of our money. 

The Department, through the Office of the 

Comptroller of the Currency (OCC) and Office of 

Thrift Supervision (OTS), works with other federal 

banking regulators to issue guidance on subprime 

mortgage lending and non-traditional mortgage 

products, and to encourage financial institutions 

to work with residential borrowers that are unable 

to meet their contractual home loan obligations. 

Additionally, these agencies work with the Conference 

of State Bank Supervisors and American Association 

of Residential Mortgage Regulators to encourage 

individual states to adopt the guidelines for mortgage 

brokers under their supervision. As of September 

2007, OCC oversaw financial assets held by national 

bank charters and federal branches of foreign banks 

totaling $7.2 trillion. As of September 2007, 

OTS supervised holding company enterprises 

with approximately $8.5 trillion in U.S. domiciled 

consolidated assets, and regulated savings associations 

with total assets of $1.57 trillion

The U.S. Mint (Mint) and the Bureau of Engraving 

and Printing (BEP) are responsible for producing the 

nation’s coins and currency. In FY 2007, the Mint and 

BEP produced 15.4 billion coins and 9.1 billion pape

currency notes, respectively. The Mint successfully 

issued the first three circulating Presidential $1 coins

and the first three First Spouse gold coins. BEP also 
Department of the Treasury – Congressional Justification FY 2009

completed its redesign of the new five dollar note, 

which is scheduled to enter circulation on March 

13, 2008  Also, due to continued improvemen

in operating results and profits from FY 2007, 

the Mint returned $825 million to the Treasury 

General Fund. 

Funding for the OCC, OTS, Mint, and BEP is not 

included in the Department’s annual budget requests 

because these bureaus have non-appropriated funding 

sources. OCC’s operations are funded primarily by 

semi-annual assessments levied on national banks. 

Revenue from licensing, other fees, and investments 

in U.S. Treasury securities provides the remaining 

revenue. OTS’s operations are funded from 

assessments on thrifts and savings and loan holding 

companies; examination, application, and security 

filing fees; interest on investments in U.S. government 

obligations; and rent and other sources. The U.S. 

Mint’s operations are financed by proceeds from the 

sales of circulating coins to the Federal Reserve Bank 

System and numismatic items to the public. BEP 

operations are financed primarily by the printing 

of currency for the Federal Reserve Bank System. 

Other BEP revenues are derived from the printing 

of securities for the Public Debt and commissions, 

certificates, and invitations for various Government 

agencies, as well as space rental fees.

Prevent Terrorism 

and Promote the Nation’s Security

The sponsorship of terrorism and the potential 

acquisition of weapons of mass destruction by 

rogue regimes and non-state entities represent a 

grave threat to U.S. national security and all free 

and open societies. The Treasury Department 

leverages financial and all-source intelligence to 

identify the financial underpinnings of criminal, 

terrorist and weapons proliferation networks, and 

utilizes the Department’s unique regulatory and law 

enforcement authorities to combat national security 

threats and safeguard the financial system. The 

Department protects the integrity of the financial 

system through administration of the Bank Secrecy 

Act and implements targeted financial measures 

and other forms of sanctions in support of U.S. 

government policy goals, which include stopping 

the flow of money and support to terrorist groups, 

state sponsors of terrorism, proliferators of weapons 

of mass destruction, drug traffickers, money 

launderers, and regimes that constitute a threat to the 

United States. 

Pre-Empted and Neutralized Threats

The Office of Terrorism and Financial Intelligence 

(TFI) marshals the Treasury Department’s intelligence 

and enforcement functions, aimed at safeguarding 

the financial system against illicit use and combating 

rogue nations, terrorist facilitators, proliferators of 

weapons of mass destruction, money launderers, drug 

traffickers, and other national security threats. 

TFI extracts financial and other source intelligence to 

effectively utilize the Department’s unique authorities 

to combat national security threats and safeguard 

the financial system. Confidence in the integrity of 

the U.S. and international financial systems fosters 

economic growth and improves national security. 

Transparency in the financial sector denies terrorist, 

drug traffickers, WMD proliferators, and other 

criminals the ability to conceal their illicit activities. 

The security of the United States is enhanced when 

financial systems are safeguarded from criminal abuse. 

Treasury’s actions include:

•	Freezing the assets of terrorists, proliferators, 

drug kingpins, and other criminals and shutting 

down the channels through which they raise and 

move money,

•	Cutting off corrupt foreign jurisdictions 

and financial institutions from the U.S. 

financial system,

•	Developing and enforcing regulations to reduce 

terrorist financing and money laundering,

•	Tracing and repatriating assets looted by corrupt 

foreign officials, and

•	Promoting a meaningful exchange of information 

with the private financial sector to help detect and 

address threats to the financial system

In the FY 2009 President’s Budget, Treasury requests 

$11 million above the FY 2008 enacted level t

combat state sponsored terrorism, establish the 

capability to coordinate financial intelligence across 
Department of the Treasury – Congressional Justification FY 2009

the intelligence community, and to enhance security 

operations. 

•	To enable the Department to more effectively 

target state sponsors of terrorism, such as Iran 

and Sudan, as well as terrorists and their support 

networks, the budget request includes funds to hire 

additional sanctions investigators, enforcement 

and compliance officers, and other resources to 

administer sanctions programs. 

•	The absence of a coordinated, Intelligence 

Community (IC)-wide effort in the collection 

and analysis of financial intelligence around the 

world has been noted as a critical capacity gap by 

Congress and the national security community. 

The President’s Budget request for Treasury includes 

additional resources to support this coordinating 

role in the identification of finance-related 

intelligence collection priorities and analysis. 

Demonstrating the high priority the Department 

places on this initiative, in addition to the requested 

new resources, Treasury will realign funds internally 

to support these activities.

•	As Treasury's national security mission increases, 

Treasury becomes a greater target of foreign 

adversaries. Building on the Treasury Counter 

Intelligence Assessment undertaken in FY 2007, the 

Budget includes additional resources to strengthen 

Treasury’s defensive capabilities to identify and 

mitigate threats to the Department’s personnel 

and systems.

The Financial Crimes Enforcement Network 

(FinCEN), a bureau within TFI, is responsible for 

administering the Bank Secrecy Act (BSA). The 

FY 2009 President’s Budget request for FinCEN 

includes resources to strengthen global anti-money 

laundering efforts, streamline business processes, 

reduce the cost of compliance to industry, and 

enhance BSA data collection, management and 

analysis through improved information technology 

management.

Dedicate to Management 

and Organizational Excellence

The Department of the Treasury strives to maintain 

public trust and confidence in U.S. and international 

economic and financial systems through exemplary 

leadership, best-in-class processes, and a culture of 

excellence, integrity, and teamwork. The Treasury 

Department realizes its strategic goals by building 

a strong institution that is citizen-centered, resultsoriented, and efficient, while actively promoting 

innovation. 

Enable an Effective Treasury Department

Management’s primary role and responsibility in the 

Department is to create the conditions that allow all 

programs and activities to perform efficiently and 

effectively. The Department’s priorities are to drive 

improved results through performance and cost-based 

decision-making, strategically align its resources to 

deliver outcomes, secure its information technology 

infrastructure and leverage technology investments, 

close skill gaps in mission critical occupations, and 

develop leadership capacity. 

Requested funding seeks to build a strong management 

infrastructure, ensuring that Treasury remains a 

world-class organization that meets the President’s 

standard of a citizen-centered, results-oriented 

government. 

The Department is committed to organizational 

excellence. Funding is included in this request for 

an Operations Center which will provide 24/7 

continuity and oversight of the world financial 

markets. The center will include representatives from 

key Treasury Department policy offices facilitating a 

rapid response to events around the globe.

The Treasury Department’s request will fund 

infrastructure and technology investments to 

modernize business processes throughout Treasury 

to improve efficiency. In FY 2009, Treasury requests 

$26.98 million for infrastructure improvements, 

ongoing modernization and critical information 

technology projects, and investments in other 

new technologies that will improve efficiency and 

service to the American people. The budget request 

includes:

•	$12 million to address critical building deficiencies

in the Treasury Annex Building, which will ensure 

the safety and health of the occupants.

•	$6 million to continue the implementation of a 

Treasury-wide Enterprise Content Management 

System. The system will result in increased 
Department of the Treasury – Congressional Justification FY 2009

efficiencies, enhanced mission effectiveness, 

reduced total cost of ownership, and the orderly 

retirement of legacy systems. 

•	$4 million necessary to stabilize and modernize the 

Treasury Secure Data Network, the Department’s 

collateral classified communication system, 

enabling reliable and secure connectivity. 

•	$5 million to improve Treasury’s FISMA 

performance and strengthen the Department’s 

overall security posture; and completing required 

milestones as part of Treasury’s Presidential 

E-Government Implementation Plan.

Additionally, this budget request includes funding 

for the Treasury Department’s Inspectors General. 

The Office of the Inspector General and the Treasury 

Inspector General for Tax Administration play an 

important oversight role in the overall management 

of the Department and the fair administration of the 

nation’s tax laws.

President’s Management Agenda (PMA)

The Department of the Treasury is committed 

to the principles of the President’s Management 

Agenda (PMA). The PMA is designed to improve 

management practices across the federal government 

and transform it into a results-oriented, efficient, 

and citizen-centered enterprise. Executing the PMA 

involves lowering the cost of doing business through 

competition, strengthening the Department’s 

workforce, improving financial performance, 

increasing the use of information technology and 

e-government capabilities, and integrating budget 

decisions with performance data.

The President holds each agency accountable for 

its performance in carrying out the PMA, and 

performance results are demonstrated through 

quarterly scorecards issued by OMB. The Treasury 

Department is responsible for reporting on seven 

initiatives; five are standard government-wide and 

two apply to select groups of federal agencies of which 

Treasury is a part. 

In FY 2007, the Department continued to be 

successful in its Human Capital initiative. The 

Performance Improvement, Competitive Sourcing, 

Financial Performance, and E-Government initiatives 

each had mixed results during the year while 

the Improper Payments initiative 

remains unsatisfactory. In its first 

year as a PMA initiative, the Credit 

Management initiative received a 

mixed result rating. 

Human Capital: In FY 2007, the 

Department used succession planning 

to develop emerging leaders, speciallytargeted development and training to 

close skill gaps, and human capital 

flexibilities to attract and retain a 

diverse talent pool. In addition, 

management recognized and rewarded 

its employees for their contributions 

toward achieving the Department’s 

priorities and outcomes. 

FY 2007 highlights included:

•	 Reduced the time-to-hire by 

leveraging web-based hiring solutions 

and providing improved job announcements,

•	 Achieved diversity hiring success through the 

employment of women and Hispanics, and

•	 Addressed the Department’s diversity need by 

developing a strategy for improving the recruitment 

President’s Management Agenda

Initiative

Status FY 2007 

Progress

FY 2004 FY 2005 FY 2006 FY 2007 Q4

Human Capital ● Y ● Y ● G ● G ● G

Competitive 

Sourcing ● Y ● G ● G ● Y ● Y

Financial 

Performance ● R ● R ● R ● Y ● G

E-Government ● R ● R ● Y ● Y ● Y

Performance 

Improvement ● Y ● Y ● Y ● Y ● G

Improper 

Payments N/A ● R ● R ● R ● Y

Credit 

Management N/A N/A N/A ● Y ● G

Green for 

Success

Yellow for 

Mixed Results

Red for 

Unsatisfactory
Department of the Treasury – Congressional Justification FY 2009

of individuals with disabilities, promoting the use of 

the Department of Labor’s Workforce Recruitment 

Program, and training managers on providing 

reasonable accommodations to individuals 

with disabilities.

Performance Improvement: In FY 2007, the 

Department of the Treasury’s progress to achieve 

improved performance was successful. During this 

past year, the Department completed and issued 

its updated strategic plan for FYs 2007–2012. By

June 2007, the Office of Strategic Planning and 

Performance Management had conducted strategic 

planning workshops with all of the bureaus to develop 

and align their performance goals to the mission and 

the strategic goals and objectives of the Department. 

Additionally, the updated strategic plan introduces 

the Integrated Management System, which is 

based on a model of continuous improvement and 

integrates performance and budgeting. By integrating 

performance and budgeting, the Department will 

be able to determine the funding level necessary to 

achieve intended results, and options will be executed 

to produce increased value for stakeholders. 

Competitive Sourcing: Through Competitive 

Sourcing, the Department of the Treasury utilizes 

public-private competition to effectively deliver services 

at the lowest possible cost to the American taxpayer. 

Competitive Sourcing allows the Department to look 

internally and externally for the most efficient way to 

achieve its mission. During FY 2007, the Treasury 

Department, in the spirit of the A-76 Circular, made 

the decision to develop a competitiveness plan. This 

plan will continually review positions and activities 

to ensure the Department is competitive, effective, 

and efficient, but will also surface potential publicprivate competitions. The Treasury Department 

has received mixed results in its PMA rating, but is 

committed to working with OMB to develop a plan 

to achieve success by improving performance and 

lowering costs.

Improved Financial Performance: During 

FY 2007, the Treasury Department continued 

working towards full compliance with the Federal 

Managers’ Financial Integrity Act (FMFIA) and 

Federal Financial Management Improvement Act 

(FFMIA), and improved financial management 

processes to produce accurate and timely information 

that supports operating, budget, and policy decisions. 

In addition, the Department continued to emphasize 

the resolution of material weaknesses and completed 

the vast majority of the planned corrective actions. 

For 2007, the Department again received a clean 

audit opinion on its financial statements. A three day 

close at the end of each month and the continuous 

enhancement of the Department’s Financial Analysis 

and Reporting System helped to ensure a successful 

audit. The Department continued to review its 

financial reporting process and perform variance 

analyses on the quarterly financial statements to ensure 

its financial data integrity. The Department worked 

closely with OMB, GAO, FMS, and the Federal 

Accounting Standards Advisory Board on policy 

guidance and accounting standards and practices to 

improve financial reporting and performance. This 

initiative improved its overall status rating during 

FY 2007 from “red” to “yellow,” and it received 

“green” progress results on a quarter-by-quarter basis 

for all four quarters of FY 2007. 

Expanded E-Government: The focus for the 

Department’s E-Government organization is 

to collaborate government-wide and identify 

opportunities for participating in solutions that 

deliver significant productivity and performance 

gains. One example of these efforts is the Treasury 

Department’s active involvement in the Budget 

Formulation and Execution Line of Business and its 

efforts to make its Budget Formulation and Execution 

Manager (BFEM) available on a multi-agency basis. 

Over the course of the past year, six agencies have 

used the BFEM service to modernize their budget 

formulation processes. By building on the work of 

the Treasury Department, these agencies avoided the 

software development costs typically incurred in any 

modernization effort while simultaneously lowering 

their marginal operational expenses by disbursing 

expenses across several agencies. In addition, 

the Treasury Department developed a BFEM 

Performance Module, which will allow agencies to 

manage its performance measures. Over the next 

year, the Department will share this solution with 

other agencies and work to implement it across the 

government.

Eliminating Improper Payments: In FY 2007, the 

IRS continued its effort to reduce improper payments 

for the Earned Income Tax Credit (EITC) program, 

which is the only high risk program in the Treasury 
Department of the Treasury – Congressional Justification FY 2009

1

Department due to erroneous payments. The IRS 

continued to evaluate new ways of reducing erroneous 

EITC payments while maintaining participation 

by eligible taxpayers, in addition to pursuing base 

compliance activities and redesign efforts. 

By detecting and correcting errors during return 

processing, the IRS prevented incorrect refunds in 

the amounts of $460 million and $400 million, 

respectively for the 2006 and 2007 filing seasons. This 

decreasing trend in errors is attributable to education, 

return preparation assistance, and electronic filing. 

Improving Credit Management: During FY 2007, 

the Treasury Department participated, with the 

government’s five major creditor agencies in an 

initiative to improve the management of federal 

credit programs. FMS’s Debt Management Services 

group specifically addressed delinquent debt 

collection issues in the areas of agency compliance 

with Debt Collection Improvement Act (DCIA) 

of 1996, program effectiveness and goals for

improvement, effective management information 

reporting, controlling and measuring costs, and 

customer satisfaction. To address and improve agency 

compliance, Performance Expectation Agreements are 

currently being negotiated between FMS and the five 

major credit agencies.

During FY 2007, the Department took the following 

actions:

•	Established a performance measure for debt 

collection as a percentage of delinquent debt 

referred to the Treasury Department,

•	Assessed agency progress toward use of administrative 

wage garnishment, centralized offset of federal 

salary payments, and debtor bar provisions of 

the DCIA,

•	Established benchmarks and goals for controlling 

costs and determining customer satisfaction, and

•	Utilized receivable reporting to improve program 

management.

Program Assessment 

and Rating Tool (PART) Summary

Program evaluation is a core management tool used 

to allocate resources and promote efficiency and 

effectiveness. In addition to regular independent 

program evaluations conducted by the Treasury 

Department’s bureaus, the Department works with 

OMB to select programs each year that will be 

evaluated or re-evaluated through the PART process. 

Programs are evaluated every five years through this 

process by the OMB. In FY 2007, two international 

programs went through the PART process; both 

received moderately effective ratings. As of the end 

of FY 2007, all Department programs have gone 

through the PART process; based on the number of 

programs, 1 percent are rated effective, 22 percen

are rated moderately effective, 22 percent are rated 

adequate,  percent are rated ineffective, and the

remaining 22 percent received a rating of results 

not demonstrated.

Effective

Moderately Effective

Adequate

Ineffective

Results not Demonstrated

0 2 4 6 8 10 12 14 16 18 20

PART Scoring History

FY 2002

FY 2003

FY 2004

FY 2005

FY 2006

FY 2007

Percent Passing

0% 20% 40% 60% 80% 100%

Percentage Treasury Programs Passing PART

Evaluations (adequate or better score)
Department of the Treasury – Congressional Justification FY 2009

Summary of FY 2009 Increases and Decreases

(Dollars in Thousands)

DO DSCIP OIG TIGTA CDFI FINCEN TTB FMS BPD IRS Total

FY 2008 Enacted $248,360 $18,710 $18,450 $140,533 $94,000 $85,844 $93,515 $234,423 $182,871 $10,892,384 $12,009,090 

Non-Pay Inflation Adjustments 2,396 0 87 615 119 300 752 553 1,497 54,828 61,147 

Pay Annualization 

Adjustments

837 0 101 799 48 861 402 1,080 769 57,854 62,751 

Pay Inflation Adjustments 2,849 0 318 2,419 111 981 1,075 3,288 2,445 152,303 165,789 

Maintaining Current Levels $6,082 $0 $506 $3,833 $278 $2,142 $2,229 $4,921 $4,711 $264,985 $289,687 

Base Realignment 0 0 0 0 0 0 (1,149) 0 0 0 (1,149)

Non-Recurring Costs (1,500) (16,986) 0 0 0 0 0 0 0 (12,593) (31,079)

Initiative Annualizations 4,433 0 0 0 0 1,337 0 0 0 0 5,770 

Transfers 1,724 (1,724) 0 1,370 0 1,000 0 0 0 (2,370) 0 

Efficiencies/Savings 0 0 0 0 0 0 0 0 0 (81,656) (81,656)

Base Reinvestments 0 0 0 0 0 0 0 0 0 32,604 32,604 

Adjustments to Base $4,657 ($18,710) $0 $1,370 $0 $2,337 ($1,149) $0 $0 ($64,015) ($75,510)

FY 2009 Base $259,099 $0 $18,956 $145,736 $94,278 $90,323 $94,595 $239,344 $187,582 $11,093,354 $12,223,267 

Program Decreases 0 0 0 0 (65,658) (4,146) (685) (958) (528) (92,691) (164,666)

Program Reinvestments 0 0 0 0 0 2,897 0 958 0 0 3,855 

Program Increases 14,796 26,975 400 0 0 2,261 2,990 0 0 360,846 408,268 

FY 2009 President’s Budget $273,895 $26,975 $19,356 $145,736 $28,620 $91,335 $96,900 $239,344 $187,054 $11,361,509 $12,470,724 

Offsetting Fees 0 0 0 0 0 0 0 0 (10,000) 0 (10,000)

FY 2009 President’s Budget 

less Offsetting Fees

$273,895 $26,975 $19,356 $145,736 $28,620 $91,335 $96,900 $239,344 $177,054 $11,361,509 $12,460,724 

Fiscal Year Comparison of Full-Time Equivalent (FTE) Staffing

(Direct and Reimbursable)

Appropriation FY 2007 Actual FY 2008 Estimated FY 2009 President’s Budget

Direct Reimb. Total Direct Reimb. Total Direct Reimb. Total

Departmental Offices Salaries and Expenses 1,055 86 1,141 1,133 90 1,223 1,200 90 1,290

Office of Inspector General 111 3 114 112 0 112 115 0 115

Treasury IG for Tax Administration 792 3 795 835 3 838 835 3 838

Community Development Financial Institutions Fund 53 0 53 75 0 75 75 0 75

Financial Crimes Enforcement Network 302 0 302 334 1 335 343 1 344

Alcohol & Tobacco Tax and Trade Bureau 523 10 533 544 15 559 525 15 540

Financial Management Service 1,483 408 1,891 1,692 428 2,120 1,500 441 1,941

Bureau of the Public Debt 1,303 16 1,319 1,371 17 1,388 1,371 17 1,388

Internal Revenue Service 92,017 698 92,715 91,123 623 91,746 92,922 650 93,572

Subtotal, Treasury Appropriated Level 97,639 1,224 98,863 97,219 1,177 98,396 98,886 1,217 100,103

Working Capital Fund 0 201 201 0 223 223 0 233 233

Treasury Franchise Fund 0 769 769 0 830 830 0 793 793

Bureau of Engraving and Printing 0 2,109 2,109 0 2,200 2,200 0 2,150 2,150

U.S. Mint 0 1,944 1,944 0 2,071 2,071 0 2,065 2,065

Office of the Comptroller of the Currency 0 2,954 2,954 0 3,078 3,078 0 3,139 3,139

Office of Thrift Supervision 0 974 974 0 1,104 1,104 0 1,104 1,104

Terrorism Insurance Program 10 0 10 10 0 10 10 0 10

Total 97,649 10,175 107,824 97,229 10,683 107,912 98,896 10,701 109,597
Department of the Treasury – Congressional Justification FY 2009

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