Message from the Secretary of the Treasury 

Dear Member: 

The Fiscal Year (FY) 2019 President's Budget capitalizes on Treasury's ongoing drive for 

efficiencies and improves stewardship of taxpayer dollars by focusing on the Department's core 

financial responsibilities. The Budget requests $12.3 billion for Treasury's operating bureaus 

and $1.4 billion for our international programs. 

Consistent with the Administration's priorities, the Budget provides increased resources for the 

Office of Terrorism and Financial Intelligence and the Financial Crimes Enforcement Network to 

combat terrorist financing, proliferation financing, and other forms of illicit finance. These 

additional resources will be deployed to economically isolate North Korea, stand up the Terrorist 

Financing Targeting Center in Saudi Arabia, implement the Countering America's Adversaries 

Through Sanctions Act, and counter the financial networks that support terrorists, organized 

transnational crime, weapons of mass destruction proliferators, and other threats. As Chair of the 

Committee on Foreign Investment in the United States (CFIUS), I also look forward to working 

with Congress to strengthen national security by bolstering the CFIUS review process. 

The Budget includes $11.1 billion for the Internal Revenue Service from base discretionary 

appropriations to collect more than $3 trillion in revenue and continue administering the first 

comprehensive tax reform legislation in over 30 years, which delivers tax cuts to families, makes 

the tax code simpler and fairer for everyone, and makes American businesses more competitive. 

In addition, the Budget requests new and continuing investments funded through a program 

integrity cap adjustment to strengthen the enforcement of tax law, returning $28.8 billion to 

taxpayers over ten years. 

The Budget includes reform proposals that were identified as directed in the Executive Order on 

a Comprehensive Plan for Reorganizing the Executive Branch. Treasury's reform plan includes 

proposals that will drive efficiency and effectiveness within the Department and across 

government. Reflecting the significant breadth and depth of the Department's mission, 

Treasury's reform plan aims to consolidate overlapping functions within Treasury and with other 

agencies, modernize program administration, and streamline organizational structures and 

management layers. 

The FY 2019 Congressional Budget Justification includes the information required for the 

Annual Performance Report. I have validated the accuracy, completeness, and reliability of the 

performance data in this report. 

Sincerely, 

Steven T. Mnuchin 

Executive Summary ‐ 1

Mission Statement 

Maintain a strong economy and create economic and job opportunities by promoting conditions 

that enable economic growth and stability at home and abroad; strengthen national security by 

combating threats and protecting the integrity of the financial system; and manage the U.S. 

Government’s finances and resources effectively. 

Executive Summary 

FY 2019 President’s Budget Discretionary Appropriation Request 

Dollars in Thousands 

 

FY 2017 FY 2018 FY 2019 Increase/ Percent

Enacted Annualized CR 

Rate Request Decrease Change

Management & Financial $1,473,456 $1,463,449 $1,181,636 ($291,820) -19.81%

Departmental Offices Salaries and Expenses $224,376 $222,852 $201,751 ($22,625) -10.08%

Terrorism and Financial Intelligence $123,000 $122,165 $159,000 $36,000 29.27%

Cybersecurity Enhancement $47,743 $47,419 $25,208 ($22,535) -47.20%

Department-wide Systems and Capital 

Investments Program $3,000 $2,980 $4,000 $1,000 33.33%

Office of Inspector General $37,044 $36,792 $36,000 ($1,044) -2.82%

Treasury IG for Tax Administration $169,634 $168,482 $161,113 ($8,521) -5.02%

Special Inspector General for TARP $41,160 $40,880 $17,500 ($23,660) -57.48%

Community Development Financial Institutions 

Fund $248,000 $246,316 $14,000 ($234,000) -94.35%

Financial Crimes Enforcement Network $115,003 $114,222 $117,800 $2,797 2.43%

Alcohol and Tobacco Tax and Trade Bureau $111,439 $110,682 $114,427 $2,988 2.68%

Bureau of the Fiscal Service $353,057 $350,659 $330,837 ($22,220) -6.29%

Tax Administration1 $11,235,000 $11,158,703 $11,135,000 ($100,000) -0.89%

IRS Taxpayer Services $2,455,754 $2,349,688 $2,241,000 ($214,754) -8.74%

IRS Enforcement $4,640,000 $4,606,996 $4,628,204 ($11,796) -0.25%

IRS Operations Support $3,849,246 $3,913,988 $4,155,796 $306,550 7.96%

IRS Business Systems Modernization $290,000 $288,031 $110,000 ($180,000) -62.07%

IRS Cap Adjustment 2 $0 $0 $361,571 $361,571 NA

IRS Total, Including Cap Adjustment $11,235,000 $11,158,703 $11,496,571 $261,571 2.33%

Subtotal, Treasury Appropriations excluding 

Cap Adjustment and TEOAF $12,708,456 $12,622,152 $12,316,636 ($391,820) -3.08%

Treasury Forfeiture Fund Total3 ($1,302,000) ($1,302,000) ($400,000) $902,000 -69.28%

Temporary Rescission ($988,000) ($988,000) $988,000 -100.00%

Permanent Rescission ($314,000) ($314,000) ($400,000) ($86,000) 27.39%

Subtotal, Treasury Appropriations including 

TEOAF $11,406,456 $11,320,152 $11,916,636 $510,180 4.47%

Treasury International Programs $1,800,577 $1,788,349 $1,446,422 ($354,155) -19.67%

Multilateral Development Banks $1,571,014 $1,560,345 $1,348,122 ($222,892) -14.19%

Food Security $53,000 $52,640 $0 ($53,000) -100.00%

Environmental Trust Funds $146,563 $145,568 $68,300 ($78,263) -53.40%

Office of Technical Assistance $30,000 $29,796 $30,000 $0 0.00%

Total, Treasury Appropriations $13,207,033 $13,108,501 $13,363,058 $156,025 1.18%

FY 2017 Enacted to FY 2019

1/ IRS FY 2017 Enacted levels include $220 million transfer from Enforcement to Taxpayer Services ($90 million) and Operations 

Support ($130 million). IRS FY 2018 Annualized CR levels include notional $220 million transfer from Enforcement to 

Operations Support. 

2/ IRS Program Integrity Cap Adjustment includes $205 million for Enforcement and $157 million for Operations Support.

3/ In FY 2017 and FY 2018, it includes ($187,000,000) of the DHS Rescission (temporary).
Executive Summary ‐ 2

OVERVIEW OF REQUEST

The Budget requests $12.3 billion in base discretionary resources for the Department of the 

Treasury’s domestic programs, a $392 million or 3 percent decrease from the FY 2017 enacted 

level. It also requests $1.4 billion for Treasury’s international programs, a $354 million or 

19.7 percent decrease from the FY 2017 enacted level. The Budget: 

 Provides $159 million for Treasury’s Office of Terrorism and Financial Intelligence (TFI), a 

$36 million increase over the FY 2017 enacted level; and $118 million for the Financial 

Crimes Enforcement Network (FinCEN), a $3 million increase over the FY 2017 enacted 

level. These increases will allow TFI and FinCEN to continue their critical work 

safeguarding the financial system from abuse and combating other national security threats 

using non-kinetic economic tools. These additional resources will be deployed to 

economically isolate North Korea, stand up the Terrorist Financing Targeting Center in Saudi 

Arabia, implement the Countering America’s Adversaries Through Sanctions Act, and 

counter the financial networks that support terrorists, organized transnational crime, weapons 

of mass destruction proliferators, and other threats. 

 Provides $11.1 billion for the Internal Revenue Service (IRS) from base discretionary 

appropriations to collect more than $3 trillion in revenue and continue administering the first 

comprehensive tax reform legislation in over 30 years. This funding includes $199 million to 

further invest in cybersecurity safeguards for taxpayer data and empower taxpayers with 

modern customer service options. 

o In addition to base discretionary resources, the Budget proposes a program integrity 

initiative to support deficit reduction and narrow the gap between taxes owed and taxes 

paid. The FY 2019 Budget investment is $362 million. Additional resources will be 

provided in later years. These investments will generate approximately $43.8 billion in 

additional revenue and will cost approximately $15 billion, yielding estimated net savings 

of $28.8 billion over ten years. 

 Provides $25 million to proactively and strategically protect the Treasury information 

technology (IT) systems that carry out these activities as well as those that account for, and 

process, trillions of dollars in revenue and payments from cybersecurity threats. 

 Proposes to impose appropriate Congressional oversight of the Treasury Financial Stability 

Oversight Council and Office of Financial Research (OFR) by subjecting their activities to 

the normal appropriations process. The Budget reflects continued reductions in OFR 

spending commensurate with the renewed fiscal discipline being applied across the Federal 

Government. 
Executive Summary ‐ 3

 Eliminates funding for the Community Development Financial Institutions (CDFI) Fund’s 

discretionary grant and direct loan programs, a savings of $234 million from the FY 2017 

enacted level. The CDFI Fund was created more than 20 years ago to increase access to 

capital and financial services in communities characterized by high rates of poverty and 

unemployment, low incomes, and other economic challenges. The Budget assumes that 

CDFIs have access to other sources of capital. However, the Budget maintains funding for 

administrative expenses to support ongoing CDFI Fund program activities, including the New 

Markets Tax Credit program, and proposes to extend the CDFI Bond Guarantee Program, 

which offers CDFIs low-cost, long-term financing at no cost to taxpayers, because the 

program requires no credit subsidy. 

 Proposes to provide the Bureau of Engraving and Printing (BEP) with the authority to vacate 

its aging production facility, purchase land, and construct a new facility in the National 

Capital Region, which would result in an estimated 10-year savings of $579 million in lower 

project costs, ultimately lowering operating costs. 

 Provides $1.4 billion for Treasury’s International Programs to support the most critical 

investments in multilateral development institutions, while ensuring that U.S. contributions 

are set at an appropriate level relative to our partner countries. The proposed funding level 

meets current year U.S. commitments to international financial institutions and maintains 

funding for the Office of Technical Assistance. 

REFORM PROPOSALS 

Treasury’s reform plan includes proposals that will drive efficiency and effectiveness within the 

Department and across government. 

 Treasury proposes consolidating coordination of the federal government’s financial education 

programs, which are currently spread across more than 20 executive agencies. 

 

 In coordination with the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and 

Explosives (ATF), Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes 

to assume responsibility for federal tobacco and alcohol tax jurisdiction. 

 Treasury proposes to merge certain functions currently performed by both BEP and United 

States Mint, such as the sales and marketing of collectible products and non-IT procurement. 

 

 In light of a declining number of private American printing firms providing secure printing 

for official documents (birth, marriage, and death certificates), Treasury will offer intaglio 

printing services to states and local governments using BEP’s secure printing technology. 
Executive Summary ‐ 

4

Fiscal Year Comparison of Full‐Time Equivalent (FTE) Staffing (Direct and Reimbursable)

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

Departmental Offices Salaries and Expenses 856 99 955 856 100 956 646 58 704 Terrorism and Financial Intelligence 395 33 428 421 36 457 518 36 554 Cybersecurity Enhancement - - - 19 - 19 19 - 19 Office of Inspector General 158 7 165 175 5 180 175 5 180 Treasury Inspector General for Tax Administration 800 2 802 800 2 802 800 2 802 Special Inspector General for TARP 139 - 139 140 - 140 85 - 85 

Community Development Financial Institutions Fund 74 - 74 74 - 74 42 - 42 Financial Crimes Enforcement Network 274 1 275 304 1 305 332 1 333 Alcohol and Tobacco Tax and Trade Bureau 478 10 488 507 10 517 492 10 502 Bureau of the Fiscal Service 2,084 10 2,094 2,110 10 2,120 2,089 10 2,099 

Internal Revenue Service funded from regular appropriations 76,831 854 77,685 73,870 1,034 74,904 70,876 553 71,429 integrity cap adjustmentInternal Revenue Service funded from proposed program 1,691 1,691 Subtotal, Treasury Appropriated Level 82,089 1,016 83,105 79,276 1,198 80,474 77,765 675 78,440 Office of Financial Stability (Administrative Account) 52 - 52 34 - 34 24 - 24 Small Business Lending Fund Program 8 - 8 8 - 8 6 - 6 State Small Business Credit Initiative 9 - 9 - - - - - - Capital Magnet Fund 4 - 4 5 - 5 5 - 5 Office of Financial Research 236 - 236 208 - 208 158 - 158 

Financial Stability Oversight Council - - - - - Treasury Franchise Fund - 1,702 1,702 - 1,770 1,770 - 1,977 1,977 

Bureau of Engraving and Printing - 1,818 1,818 - 1,842 1,842 - 1,836 1,836 

United States Mint - 1,645 1,645 - 1,705 1,705 - 1,705 1,705 

Office of the Comptroller of the Currency - 3,908 3,908 - 3,945 3,945 - 3,987 3,987 

Terrorism Insurance Program 5 - 5 9 - 9 9 - 9 IRS Private Collection Agent Program - - - 10 - 10 110 - 110 Subtotal, Treasury Non-Appropriated Level 314 9,073 9,387 274 9,262 9,536 312 9,505 9,817 Total, Treasury 82,403 10,089 92,492 79,550 10,460 90,010 78,077 10,180 88,257 1/ A portion of Fiscal Service's Reimbursable/Fee FTE is funded by fee revenue as authorized by the Debt Collection Improvement Act (DCIA) of 1996.2/ IRS FY 2018 Total FTE is overstated in the President's Budget Appendix by 102 FTE as a result of a reporting error in the Business Systems Modernization account. 

2017 Actual 2018 Annualized CR Rate 2019 President's Budget
Executive Summary ‐ 5

 
Executive Summary ‐ 6
Executive Summary ‐ 7

Organization

Treasury is organized into the Departmental Offices, seven bureaus, and three offices of inspector 

general. The Departmental Offices are primarily responsible for policy formulation, while the 

bureaus are the operating units of the organization. 

 
Executive Summary ‐ 8

Departmental Offices 

Domestic Finance works to preserve 

confidence in the U.S. Treasury securities 

market, strengthen financial institutions and 

markets, and promote access to credit, in 

service to long-term economic strength and 

stability. 

Terrorism and Financial Intelligence (TFI) 

uses unique policy, intelligence, enforcement 

and regulatory tools and authorities to disrupt 

and disable terrorists, criminals, and other 

national security threats while also 

safeguarding the financial system against 

abuse by illicit actors. 

International Affairs protects economic 

prosperity and national security by working to 

foster a most favorable external environment 

for sustained jobs and economic growth. 

Tax Policy develops and implements tax 

policies and programs, reviews regulations and 

rulings to administer the Internal Revenue 

Code, and provides revenue estimates for the 

President’s Budget. 

Economic Policy reports on economic 

developments and assists in the determination 

of appropriate economic policies. Reviews 

and analyzes domestic economic issues and 

financial market developments. 

The Treasurer of the United States serves as 

a principal advisor to the Secretary and leads 

the Office of Consumer Policy, which 

provides policy leadership, research, and 

analysis in the areas of fostering economic 

growth and financial security for American 

families in a robust consumer marketplace. 

The Treasurer also oversees the U.S. Mint, 

including advising the Secretary on coinage 

matters and liaising with the Federal Reserve. 

The Office of Management, including the 

Chief Financial Officer, manages the 

Department’s financial resources and oversees 

Treasury-wide programs, including human 

capital, organizational performance, 

information technology, acquisition, and 

diversity issues and inclusion. 

The Office of Risk Management oversees the 

development and implementation of an 

integrated risk management framework for the 

Department, advising Treasury leaders on 

managing credit, market, liquidity, fraud, 

operational, and reputational risks. 

 Other offices within Departmental Offices 

include the General Counsel, Legislative 

Affairs, and Public Affairs. 
Executive Summary ‐ 9

INSPECTORS GENERAL

 Three Inspectors General – the Office of 

Inspector General (OIG), the Treasury 

Inspector General for Tax Administration 

(TIGTA), and the Special Inspector General 

for the Troubled Asset Relief Program 

(SIGTARP) – provide independent audits, 

investigations, and oversight of Treasury and 

our programs. 

The Alcohol and Tobacco Tax and Trade 

Bureau (TTB) collects federal excise taxes on 

alcohol, tobacco, firearms, and ammunition. 

Enforces and administers laws covering 

production, use, and distribution of alcohol 

and tobacco products. 

The Bureau of Engraving and Printing 

(BEP) develops and produces U.S. currency 

notes, as well as secure documents for 

government use. 

The Financial Crimes Enforcement 

Network (FinCEN) safeguards the financial 

system from illicit use and combats money 

laundering. Promotes national security 

through the collection, analysis, and 

dissemination of financial intelligence and 

strategic use of financial authorities. 

The Bureau of the Fiscal Service (Fiscal 

Service) provides central payment services to 

federal agencies, operates the U.S. 

government’s collections and deposit systems, 

and delivers administrative shared services to 

federal agencies. Provides government-wide 

accounting and reporting, and manages the 

collection of delinquent debt. Borrows money 

needed to operate the U.S. government 

through the sale of marketable, savings, and 

special purpose U.S. Treasury securities. 

Accounts for and services the public debt. 

The Internal Revenue Service (IRS)

determines, assesses, and collects U.S. tax 

revenue. Helps taxpayers understand their tax 

responsibilities and combats tax-related fraud. 

The United States Mint (U.S. Mint) designs, 

mints, and issues U.S. circulating numismatic 

and bullion coins. Strikes Congressional gold 

medals and other medals of national 

significance. Maintains physical custody and 

protection of most of the nation’s gold and all 

of its silver assets. 

The Office of the Comptroller of the 

Currency (OCC) ensures that the federal 

banking system operates safely and soundly, 

provides fair access to financial services, treats 

customers fairly, and complies with applicable 

laws and regulations. The OCC charters, 

regulates, and supervises national banks and 

federal savings associations, and licenses and 

supervises federal branches and agencies of 

foreign banks.Treasury Strategic 

Framework 
Executive Summary ‐ 10

The Government Performance and Results Act Modernization Act of 2010 (GPRAMA) requires federal agencies to publish new strategic plans one year after each presidential inauguration. Treasury’s 

Strategic Plan for Fiscal Years (FY) 2018 - 2022 (Strategic Plan) describes long-term goals the 

Department aims to achieve during this administration and provides an internal guide for decisionmaking. Within the Strategic Plan, “goals” articulate larger outcomes or societal impacts that 

Treasury aims to achieve, while “objectives” support goals and reflect more focused policy or 

operational areas where Treasury plans to make significant improvements. Accountable officials are 

designated for each strategic objective. Concentrating on a focused set of objectives strengthens 

accountability, while allowing the Department to emphasize critical areas and meaningfully manage 

for results. 

Treasury’s FY 2018-2019 Agency Priority Goals, each supporting the achievement of a specific 

strategic objective, will be published concurrent with the Strategic Plan on www.performance.gov. 

FY 2018-2019 Agency Priority Goal: Reducing Refund Fraud 

In response to significant increases in refund fraud schemes and identity theft, the IRS increased its 

prevention efforts. One such effort is the Security Summit initiative, a public-private sector 

partnership started in 2015 between the IRS, state revenue departments, software developers, tax 

professionals, and financial services groups. 

This effort led to a sharp decline in identity theft and related refund fraud by 2017, with several 

indicators dropping by more than 50 percent since the Summit began. 

 In 2012, there was a 226 percent increase in new identity theft cases from the prior year. 

 In 2016, there was a 46 percent decrease in new identity theft cases from the prior year. 

FY 2018-2019 Agency Priority Goal: Improved Business Qualification Process 

Ongoing growth in the alcohol beverage industry in recent years has resulted in an increased volume 

in permit applications for new alcohol producers. This growth in workload has contributed to 

delayed permit approvals that exceed TTB’s service standards. In FY 2017, TTB reviewed its current 

processes, applications, and online systems to identify ways to streamline the process for prospective 

industry members. In FY 2018 and 2019, TTB will work to implement these improvements and 

reduce average approval times for business permits. 

FY 2018-2019 Agency Priority Goal: International Collaboration 

We must focus our combined efforts on disrupting illicit financial networks and protecting the U.S. 

and international financial system by expanding information sharing and collaboration with 

international partners to address risks from rogue regimes, terrorist financiers, transnational criminal 

organizations, human rights abusers, and proliferators of weapons of mass destruction. 
Executive Summary ‐ 11

The Government Performance and Results Act (GPRA) and the GPRAMA established the need for 

agencies to identify performance goals, report progress against targets, and conduct data-driven 

reviews. These practices serve two key purposes for stakeholders within and outside of the 

organization: to assess the organization’s health and impact and to inform decision-making and 

strategy (including effective resource allocation). In this spirit, we developed a strategic framework 

supported by best-in-class organizational performance practices to help achieve the Department’s 

strategic objectives.

Our organizational performance reviews provide a regular forum for open dialogue and coordination 

among Department, bureau, and office leadership and bringing together different perspectives to set 

and align priorities, identify and solve problems, review agency performance goals, and drive results. 

The cycle integrates statutory requirements to conduct performance reviews of agency strategic 

objectives, agency priority goals, and cross-agency priority goals.
Executive Summary ‐ 12

In addition to these Department-level reviews, bureaus and offices validate performance data each 

quarter and many run their own internal performance reviews.1

Human Capital Plan Implementation

In FY 2019, Treasury’s Human Capital Community will continue its efforts towards a competencybased management approach. In alignment with these efforts, below are some of the strategies that 

are the focus for FY 2019: 

 Continued implementation of the Integrated Talent Management System (DASHR-CHCO) 

 Validate the competency management approach developed in FY2018 and continue the 

development competency assessment tools (DASHR-CHCO) 

 Continue to integrate Workforce Planning with other business processes (DASHR-CHCO) 

 Develop evaluation process to determine the effectiveness of D&I Strategies (OCRD) 

 Begin/Continue implementing succession planning program (TTB) 

 Continue designing experienced leaders program (Mint) 

 Continue laying the foundation for the implementation of the Service-wide Workforce 

Planning process (IRS) 

 Evaluate the effectiveness of local Engagement plans and adjust approach if necessary 

(FINCEN) 

 Continue to close identified competency gaps (DO) 

 Utilized centralized recruitment and diversity plan (BFS) 

                                                            

1/ The FY 2017 Verification and Validation Report is available at: https://www.treasury.gov/about/budgetperformance/annual-performance-plan/Documents/FY17_AFR_508_FINAL.pdf
Executive Summary ‐ 13

 Assess the effectiveness of the Bureau-wide Workforce Planning efforts and adjust as 

necessary (BEP) 

Summary of Management and Performance Challenges 

OIG and TIGTA have identified the most significant management and performance challenges facing 

the Department, in accordance with the Reports Consolidation Act of 2000. These challenges do not 

necessarily indicate deficiencies in performance; some represent inherent risks that require 

continuous monitoring. Refer to Section C of Part 3, Other Information, in the 

FY 2017 Treasury Agency Financial Report (AFR) for a detailed discussion of these challenges, 

including our progress toward addressing them.2 GAO releases a government-wide high-risk list 

every two years. Treasury has shared responsibility for one risk area and lead responsibility in 

another.

OIG - Identified Management Challenges: 

 Operating in an Uncertain Environment (New Challenge)

 Cyber Threats 

 Anti-Money Laundering and Terrorist Financing/Bank Secrecy Act Enforcement

 Efforts to Promote Spending Transparency and to Prevent and Detect Improper Payments

TIGTA - Identified Management Challenges: 

 Security Over Taxpayer Data and Protection of IRS Resources 

 Identity Theft and Impersonation Fraud 

 Providing Quality Taxpayer Service and Expanding Online Services 

 Upgrading Tax Systems 

 Implementing Tax Law Changes 

 Improving Tax Compliance 

 Reducing Fraudulent Claims and Improper Payments 

 Impact of Global Economy on Tax Administration 

 Protecting Taxpayer Rights 

 Achieving Program Efficiencies and Cost Savings 

GAO - Identified High-Risk Areas: 

 Improvements needed in internal control over unpaid tax assessments 

 Improvements needed in controls over the processes used to prepare the U.S. Consolidated 

Financial Statements

 

                                                            

2

 The FY 2017 AFR is available at https://www.treasury.gov/about/budget-performance/annual-performanceplan/Documents/FY17_AFR_508_FINAL.pdf. The response letters are on pages 164-169. 


Department of the Treasury 

Internal Revenue Service 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019 
IRS-i 

Table of Contents 

Section I – Budget Request ...................................................................................................... 3

1A – Mission Statement ....................................................................................................... 3

1.1 – Appropriations Detail Table ....................................................................................... 3

1B – Summary of the Request ............................................................................................. 4

1.2 – Budget Adjustments Table ....................................................................................... 10

1C – Base Adjustment and Program Changes Description ............................................ 11

Resource Adjustment ......................................................................................................... 11

Maintaining Current Levels (MCLs) ............................................................................... 11

Efficiencies and Savings ..................................................................................................... 11

Increase e-File Savings ..................................................................................................... 11

Space Optimization ........................................................................................................... 11

Reinvestment ....................................................................................................................... 12

Supporting Aging IT Infrastructure ................................................................................... 12

Program Decreases ............................................................................................................. 12

Action to Achieve Workforce Management Goals ........................................................... 12

Realignment from BSM to Operations Support ................................................................ 12

Program Increases .............................................................................................................. 13

Stabilize, Secure and Transform IT Operations ............................................................. 13

Strengthen Cyber Security ................................................................................................ 13

Identity Assurance - e-Authentication Enhancements and Authorization Integration...... 14

Aging Technology Infrastructure ...................................................................................... 15

Migration to Cloud Services ............................................................................................. 15

Stabilize IT Operations ..................................................................................................... 15

Support Taxpayer Services and Online Account Activities ........................................... 16

1D – Appropriations Language and Explanation of Changes ....................................... 18

1E – Legislative Proposals ................................................................................................. 24

1F - IRS Use of Evidence and Evaluation ........................................................................ 26

Section II – Budget and Performance Plan .......................................................................... 28

Taxpayer Services ............................................................................................................... 28

2.1 – Budget Adjustments Table ....................................................................................... 29

2.2 – Operating Levels Table ............................................................................................ 30

2.3 – Appropriation Detail Table ...................................................................................... 31

2A – Pre-Filing Taxpayer Assistance and Education ....................................................... 31

2.1.1 – Budget and Performance Report and Plan ............................................................ 33

2B – Filing and Account Services ..................................................................................... 33

2.1.2 – Budget and Performance Report and Plan ............................................................ 36

Enforcement ........................................................................................................................ 37

2.1 – Budget Adjustments Table ....................................................................................... 38

2.2 – Operating Levels Table ............................................................................................ 39

2.3 – Appropriation Detail Table ...................................................................................... 40

2C – Investigations ............................................................................................................ 40

2.1.3 – Budget and Performance Report and Plan ............................................................ 42

2D – Exam and Collections .............................................................................................. 42
IRS-ii 

2.1.4 – Budget and Performance Report and Plan ............................................................ 48

2E – Regulatory ................................................................................................................ 48

2.1.5 – Budget and Performance Report and Plan ............................................................ 50

Operations Support ............................................................................................................ 51

2.1 – Budget Adjustments Table ....................................................................................... 52

2.2 – Operating Levels Table ............................................................................................ 53

2.3 – Appropriation Detail Table ...................................................................................... 53

2F – Infrastructure ............................................................................................................. 54

2.1.6 – Budget and Performance Report and Plan ............................................................ 56

2G – Shared Services and Support .................................................................................... 56

2.1.7 – Budget and Performance Report and Plan ............................................................ 60

2H – Information Services ................................................................................................ 61

2.1.8 – Budget and Performance Report and Plan ............................................................ 65

Business Systems Modernization ...................................................................................... 66

2.1 – Budget Adjustments Table ....................................................................................... 67

2.2 – Operating Levels Table ............................................................................................ 68

2.3 – Appropriation Detail Table ...................................................................................... 69

2I – Business Systems Modernization .............................................................................. 69

2.1.9 – Budget and Performance Report and Plan ............................................................ 73

Section III – Supplemental Information ............................................................................... 74

3.1 – Summary of Capital Investments ............................................................................ 74

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs ................. 79

3.3 – IRS Performance Measure Table ............................................................................ 81

3.4 – Summary of FY 2017 Savings Realized ................................................................... 83

Section IV – Appendix ............................................................................................................ 84

4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment .............. 84

Increase Audit Coverage ................................................................................................... 87

Increase Collection Coverage ........................................................................................... 89

Prevent Identity Theft & Refund & Reduce Improper Payments ..................................... 91

Improve Identity Assurance .............................................................................................. 92

Tax Return Preparer Compliance and Program Responsibility ........................................ 93

Expand Cyber and Counterterrorism Investigative Activities .......................................... 96

Return Review Program .................................................................................................... 97

4.2 – Summary of IRS FY 2019 Identity Theft Budget Request .................................... 98

4.3 – Summary of IRS FY 2019 ACA Budget Request ................................................... 98

4.4 – Summary of IRS FY 2019 Cyber Security Budget Request .................................. 99

4.5 – Summary of IRS FY 2019 Request ........................................................................ 100
IRS-3 

Section I – Budget Request 

1A – Mission Statement 

Provide America’s taxpayers top-quality service by helping them understand and meet their 

tax responsibilities and enforce the law with integrity and fairness to all. 

1.1 – Appropriations Detail Table 

Dollars in thousands 

Internal Revenue 

Service (IRS) Change % Change 

Appropriated 

Resources FY 2017 

Enacted1 FY 2018 Annualized CR2 FY 2019 Request3 FY 2018 to FY 2019 Request 

FY 2018 to FY 2019 

Request 

New Appropriated 

Resources: FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT 

Taxpayer Services 28,692 $2,455,754 26,977 $2,349,688 24,668 $2,241,000 (2,309) ($108,688) -8.56% -4.63% 

Pre-Filing Taxpayer 

Assistance and 

Education 

4,700 607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72% 

Filing and Account 

Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47% 

Enforcement 36,550 $4,640,000 34,662 $4,606,996 34,662 $4,628,204 $21,208 0.46% 

Investigations 3,079 595,206 2,913 576,802 2,913 578,949 

2,147 0.37% 

Exam and Collections 32,602 3,914,546 30,811 3,874,918 30,811 3,893,373 

18,455 0.48% 

Regulatory 869 130,248 938 155,276 938 155,882 

606 0.39% 

Operations Support 10,835 $3,849,246 10,813 $3,913,988 10,959 $4,155,796 146 $241,808 1.35% 6.18% 

Infrastructure 869,732 847,444 860,058 

12,614 1.49% 

Shared Services and 

Support 4,777 991,504 4,588 994,559 4,588 1,005,911 11,352 1.14% 

Information Services 6,058 1,988,010 6,225 2,071,985 6,371 2,289,827 

146 

 

217,842 2.35% 10.51% 

Business Systems 

Modernization 557 $290,000 516 $288,031 516 $110,000 ($178,031) -61.81% 

Subtotal New 

Appropriated 

Resources 

76,634 $11,235,000 72,968 $11,158,703 70,805 $11,135,000 (2,163) ($23,703) -2.96% -0.21% 

Other Resources: 

Reimbursables 853 152,161 1,033 173,557 552 113,535 (481) (60,022) -46.56% -34.58% 

Offsetting Collections - 

Non Reimbursables 16,407 16,407 17,227 820 5.00% 

User Fees 161 241,485 75 499,100 71 498,900 (4) (200) -5.33% -0.04% 

Recovery from Prior 

Years 2,497 18,351 18,331 (20) -0.11% 

Unobligated Balances 

from Prior Years 36 297,310 827 351,715 353,222 (827) 1,507 -100% 0.43% 

Transfers In/Out 17 

Resources from Other 

Accounts 1 1 1 

Subtotal Other 

Resources 1,051 $709,877 1,936 $1,059,130 624 $1,001,215 (1,312) ($57,915) -67.77% -5.47% 

Total Budgetary 

Resources 77,685 $11,944,877 74,904 $12,217,833 71,429 $12,136,215 (3,475) ($81,618) -4.64% -0.67% 

1

FY 2017 Enacted reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the execution of 

these resources, see the 2019 Budget Appendix chapter for the Department of the Treasury. Includes $220 million interappropriation transfer from 

Enforcement to Taxpayer Services ($90 million) and Operations Support ($130 million). FY 2017 Enacted also includes $290 million in Section 

113 Administrative Provision funding allocated in the following amounts: $209.2 million in Taxpayer Services and $80.8 million in Operations 

Support. FY 2017 full-time equivalent (FTE) are actuals and reconcile to the final FY 2017 Obligations and Expenses report, which included the 

36 FTE funded from prior year balances shown in the table above. Other Resources are actuals. Resources from Other Accounts include other 

direct FTE funded by the Federal Highway Administration. 

2

FY 2018 Annualized Continuing Resolution (CR) reflects a rescission of 0.6791 percent applied to the FY 2017 Enacted levels. FY 2018 

Annualized CR also includes a notional $220 million interappropriation transfer from Enforcement to Operations Support to cover anticipated 

operations and maintenance requirements in FY 2018. The IRS will submit a formal transfer to request to Congress as part of the IRS FY 2018 

operating plan upon enactment of a final appropriations bill. FY 2018 Annualized CR includes $288 million in Section 113 Administrative Provision 

funding in the following amounts: $208 million in Taxpayer Services and $80 million in Operations Support. FY 2018 Annualized CR does not 

include resources to implement new requirements under the Tax Cuts and Jobs Act (Public Law 115-97). 

3

FY 2019 Request in this table excludes the proposed $362 million discretionary program integrity investment in FY 2019: $205 million for 

Enforcement and $157 million for Operations Support. More information about the program integrity cap adjustment can be found in Section 4.1. 
IRS-4 

1B – Summary of the Request 

FY 2019 Budget Request 

The IRS FY 2019 base budget request of $11.135 billion provides funding to administer the 

nation’s tax system, generate more than $3 trillion in revenue to fund critical defense and 

general program requirements, meet demand from hundreds of millions of taxpayers, issue 

more than $400 billion in tax refunds and outlays, protect billions of taxpayer records, and 

strengthen tax compliance. 

The Budget invests in high-priority programs that will allow the IRS to administer the new tax 

law and to become more efficient and effective and ultimately assist more taxpayers. These 

investments include modernizing taxpayer services and expanding opportunities for taxpayers 

and their representatives to complete certain service and compliance interactions through their 

preferred channel, be it online, by telephone, or in-person at one of the IRS’s 365 Taxpayer 

Assistance Centers (TACs). Modernizing taxpayer services will help simplify filing returns 

for the vast majority of taxpayers and result in more resources for taxpayers who use 

traditional service channels, all of which will increase voluntary compliance and improve tax 

administration. The Budget invests in technology and analytics to take advantage of the most 

effective tax enforcement strategies and protect taxpayers’ refunds from fraudulent schemes. 

The Budget also increases funding for security and replacing obsolete hardware to protect 

taxpayer-sensitive data from ever-increasing cyber threats. 

The Budget will allow the IRS to help all taxpayers to meet their tax obligations by 

simplifying the process of filing and amending returns and payment; protect the integrity of 

the tax system by reviewing and enforcing tax code; partner with key stakeholders in the state 

and local tax administration, tax preparation, and international communities; cultivate and 

retain a well-equipped, diverse, flexible, and engaged workforce; advance data access, 

usability, and analytics to inform decision making; and drive increased agility, efficiency, 

effectiveness, and security in operations. 

Strategic Plan 2018 - 2022 

Treasury’s new strategic plan and the forthcoming IRS Strategic Plan for FY 2018–2022 

(Plan) guide the IRS’s resource decisions, programs, and operations to meet the changing 

needs and expectations of taxpayers and members of the tax community who serve taxpayers. 

The Plan aligns with the goals and objectives in Treasury’s strategic plan, namely increasing 

U.S. economic growth by administering tax laws to better enable all taxpayers to meet their 

obligations while protecting the integrity of the tax system; transforming government-wide 

financial stewardship by increasing access to and usage of data; and achieving operational 

excellence. The Plan reflects the IRS’s critical role in tax administration. By focusing on 

combatting the increased prevalence of refund fraud and identity theft, transforming taxpayer 

services to meet taxpayer expectations, maintaining a skilled and talented workforce, 

increasing operational efficiency and effectiveness, and meeting the tax needs of a diverse 

U.S. population, the Plan is a guide to successfully accomplishing the IRS mission and vision. 
IRS-5 

Tax Reform 

The Tax Cuts and Jobs Act (Public Law 115-97) is the most significant revision of the U.S. 

tax code in over 30 years. Containing hundreds of provisions intended to provide relief to 

American families and make America’s businesses more competitive, implementing the new 

law will require extensive administrative work in calendar years 2018 and 2019. 

Implementing this new legislation is one of the IRS’s highest priorities. The IRS has 

established a Tax Reform Implementation Office, led by senior leaders, to ensure successful 

implementation. Efforts to implement the new legislation are already underway and two 

important pieces of guidance have been issued addressing certain provisions in the new law. 

On December 29, 2017, the IRS and the Department of the Treasury issued notices on 

amended Internal Revenue Code (IRC) section 965, providing guidance for computing the 

“transition tax” on untaxed foreign earnings of foreign subsidiaries of U.S. companies, and 

the new IRC section 1446(f). In addition, on January 11, 2018, the IRS and the Department 

released a notice updating income tax withholding tables for 2018 based on the new law. 

These early notices provide taxpayers and practitioners with information to timely and 

accurately address new tax compliance obligations. Additional published guidance is 

expected as the IRS continues to analyze the new law’s impact on tax administration. 

The IRS will need additional resources in FY 2018 to implement the new law in a way that 

adequately serves taxpayers, facilitates tax compliance, and protects sensitive taxpayer 

data. Resources are needed to address the following areas: 

 Create new and revised taxpayer forms, instructions, and publications. 

 Provide technical support to taxpayers on issues involving interpretations of the law 

and of related published guidance. Preliminary estimates suggest assistors may need 

to answer four million additional phone calls. This represents a potential 17 percent 

increase over the 23 million assisted calls answered by the IRS in FY 2017. 

 Train IRS employees on the new law and help the public, tax professionals, and other 

industry partners understand how the law applies to them. 

 Reprogram information technology systems, with special focus on return processing 

and compliance systems (the backbone of the tax system). 

Reducing Regulatory Burden 

The IRS and the Department continue to work to identify overly burdensome tax regulations 

for modification or repeal consistent with law and Executive Order 13789 (Identifying and 

Reducing Tax Regulatory Burdens). In October of 2017, the Department released a report 

recommending actions to eliminate or mitigate the burdens imposed on taxpayers by eight 

regulations. These recommendations include withdrawing proposed regulations under 

Section 2704 that would have hurt family-owned and operated businesses by limiting 

valuation discounts. The regulations also would have made it difficult and costly for a family 

to transfer their businesses to the next generation. In addition, the IRS and the Department 

have initiated a comprehensive review, coordinated by the Treasury Regulatory Reform Task 

Force, of all tax regulations, regardless of when they were issued. This review will identify 
IRS-6 

tax regulations that are unnecessary, create undue complexity, impose excessive burdens, or 

fail to provide clarity and useful guidance, and the Department and the IRS will pursue reform 

or revocation of those regulations. As part of this process, the IRS Office of Chief Counsel 

has already identified over 200 regulations for potential revocation, most of which have been 

outstanding for many years. 

Modernizing Tax Administration 

The IRS must balance three competing priorities when allocating resources: basic tax 

administration (i.e., filing season), maintaining infrastructure, and modernizing legacy 

systems and procedures. The IRS has to prioritize filing season needs with other important 

but less visible activities such as infrastructure, support staffing, and strategic enforcement. 

This prioritization may potentially result in lower tax compliance and long-term risk for the 

voluntary compliance-based U.S. tax system. A one percent drop in the voluntary 

compliance rate is estimated to cost the government tax revenue of $30 billion each year. 

The Budget balances these competing priorities by investing in mission-critical areas 

including taxpayer applications, enforcement, essential infrastructure, and security. 

Staffing: The IRS is committed to providing taxpayers and their representatives with high 

quality, secure service through all available channels. Taxpayer preferences are changing. 

More taxpayers prefer to interact with the IRS using digital tools at the time and place of 

their choosing. The Budget invests to ensure the IRS is meeting taxpayers’ needs. For 

example, the Budget proposes an investment of $18 million and 126 FTE to assist more 

taxpayers with account management and online authentication issues and help taxpayers 

navigate submission processing and collection issues. 

Information Technology Infrastructure: The IRS must continue efforts to replace obsolete 

hardware and software and provide a stable foundation for delivering technology services 

required for day-to-day operations, transforming the tax experience, and modernizing 

operations. At the end of FY 2017, more than 59 percent of IRS hardware was past its 

useful life and 26 percent of software was two or more releases behind the most current 

commercially available version. The Budget provides additional resources to reduce the 

aged inventory backlog with the goal of reaching 54 percent of hardware in FY 2019 and an 

industry standard of 20 to 25 percent by FY 2023. This investment will improve employee 

productivity and enhance taxpayer service by reducing equipment outages and system 

failures. Operating on the latest hardware and software also will help the IRS better protect 

taxpayer information by facilitating faster, more comprehensive patching and by limiting 

exposure to security flaws. 

Modernizing Operations: IRS systems need to be modernized to gain efficiencies, protect 

data, and reduce long-term maintenance costs. The IRS’s modernization efforts will 

standardize business processes, expand the digital conversion of paper case files and 

documentation, automate repetitive manual processes, leverage existing data to detect noncompliance earlier, and enable a strong and secure systems platform to create taxpayer-facing 

applications. The Budget proposes $110 million for system modernization. This funding will 

support, for example, the Enterprise Case Management (ECM) system. ECM will allow the 

IRS to retire more than 60 legacy case applications with similar functions that were setup over 
IRS-7 

many years to meet various legislative and business requirements. Retiring these applications 

will help standardize workflows, allow IRS employees to provide more consistent service to 

taxpayers, and achieve operations and maintenance efficiencies. Investing in ECM will 

directly benefit taxpayers by facilitating a seamless customer service experience. In the future 

when a taxpayer seeks assistance over the phone or online, IRS customer service 

representatives will have tailored access to a centralized case file that contains a history of all 

relevant prior interactions and a holistic package of reference materials to support taxpayers. 

Cases will be routed seamlessly from one business unit to another without manual 

workarounds that burden both taxpayers and employees. The IRS plans to begin transitioning 

to this new platform in FY 2019. More information about ECM and other modernization 

investments can be found in section 2I – Business Systems Modernization and section 3.1 –

Summary of Capital Investments. 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the Budget proposes a 

$362 million discretionary program integrity cap adjustment in FY 2019 to fund new and 

continuing investments in expanding and improving the effectiveness and efficiency of the 

IRS’s overall tax enforcement program. The Budget proposes $205 million for the 

Enforcement account and $157 million for the Operations Support account. Additional 

adjustments are provided in future years to fund new initiatives and inflation. These 

investments will generate approximately $44 billion in new revenue over 10 years and will 

cost about $15 billion for net savings of $29 billion. Notably, this return on investment (ROI) 

is likely understated because it does not reflect the effect that enhanced enforcement has on 

deterring non-compliance. The deterrent effect helps to ensure the continued payment of over 

$3 trillion in taxes voluntarily paid each year. More information about the cap adjustment is 

found in section 4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment of 

the Appendix and in the Budget Process Chapter of the FY 2019 President’s Budget. 

2017 Filing Season 

The IRS delivered a successful 2017 filing season that opened on January 23, 2017. The 

Taxpayer Assistance Center Appointment Service, which is now available nationwide, 

significantly improved in-person assistance and ensured taxpayers did not have to wait in long 

lines to receive assistance. The appointment service is one of many examples of the IRS 

harnessing technology to improve the taxpayer experience. 

Other highlights from the 2017 filing season include: 

 Stopped $5.2 billion in fraudulent refunds claimed by identity thieves on 567,000 tax 

returns through improved screening criteria from January 2017 through October 2017. 

 Delivered a filing season telephone Level of Service (LOS) – the relative success rate 

of taxpayers who call the IRS toll-free number seeking assistance from a customer 

service representative – of 79.1 percent, the highest level since 2007 and a substantial 

improvement over the 72.1 percent delivered during the 2016 filing season. 
IRS-8 

 Reduced the backlog of taxpayer correspondence cases by 100,000, allowing the IRS 

to shift resources to help taxpayers during peak call times and more promptly resolve 

taxpayer issues. 

 Answered almost 10 million phone calls and addressed another 18 million calls 

through automated systems. The average speed of answer was seven minutes, 

compared to 11 minutes in the 2016 filing season, allowing the IRS to resolve 

taxpayer issues faster. 

 Received approximately 136 million individual returns, with more than 90 percent 

filed electronically. 

 Received almost 30.9 million business returns, an increase of 3.3 percent from the 

2016 filing season. 

 Received almost 19.3 million business returns electronically, an increase of almost 

10 percent from the 2016 filing season. 

 Issued 97 million refunds totaling $268 billion, with an average individual refund of 

$2,862. 

 Continued to work with Security Summit partners from state tax agencies and the 

broader tax community to add extra layers of security protection for the filing season. 

Throughout the year, the IRS issued news releases about scams and tax tips to bring 

awareness to taxpayers and tax professionals. 

 Registered nearly 290,000 foreign financial institutions (FFIs) with the IRS and 

assigned a global intermediary identification number (GIIN) via the FFI Registration 

application. More than 6,500 financial institutions and 97 host country tax authorities 

enrolled in the International Data Exchange Service (IDES) to submit information 

returns required under the Foreign Account Tax Compliance Act (FATCA) to the IRS, 

and more than 550 qualified intermediaries (QIs) completed their online application 

via the QI application. 

Return on Investment

The IRS remains one of the most cost-effective investments in the Federal Government. 

Financing the IRS supports an increase in revenue for the country. This unique and critical 

role is vital for the functioning of the U.S. Government and in keeping the nation and 

economy strong. In FY 2017, the IRS collected $3.4 trillion in tax revenue. 

The IRS remains one of the most efficient tax administrators in the world. For every 

$100 collected in taxes, the IRS spends only thirty-five cents. Congress appropriated a total 

of $11.2 billion for the IRS in FY 2017 and IRS enforcement programs collected 

$56.9 billion, for a return on investment (ROI) of about $5.1 for every $1 invested in the IRS. 

This ROI estimate is likely understated because it does not include the revenue effect of the 

deterrence value of these investments and other IRS enforcement programs or the effect of 

education and outreach on voluntary tax compliance. 
IRS-9 

Investment Labor Costing Methodology

The IRS uses a variety of methods to calculate the cost of its investments. Costs for 

investments that require labor funding are calculated by converting the workload to the 

number and type of staff (e.g., Revenue Agents, Revenue Officers, or Special Agents) needed 

to deliver targeted performance goals. Once the number of full-time equivalents (FTE) and 

type of staff are determined, the cost of the FTE is estimated using a Unit Cost Rate (UCR) 

calculator, a tool for projecting FTE salary and non-salary support costs and/or savings. The 

UCR calculator fully covers the salary, benefits, and support costs needed for each FTE. 

Proposed FTE increases in the FY 2019 Budget assume an April 1 hire date, with the 

exception of front-line positions in Submission Processing and Account Management and 

Assistance - Electronic/Correspondence Assistance, which assume an October 1 hire date 

because they provide service to taxpayers during the filing season and can be brought on 

board faster than most other positions. These programs are not as dependent on the traditional 

hiring and training process as other IRS programs because they have a large existing seasonal 

workforce available to work additional hours to meet work demand. To fund the FTE 

requested in the Budget for a full year in FY 2020, including the program integrity 

investment, the IRS would need an additional $193 million and 1,792 FTE. 
IRS-10 

1.2 – Budget Adjustments Table 

Dollars in thousands 

Bureau: Internal Revenue Service 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 72,968 $11,158,703 

Changes to Base 

Maintaining Current Levels (MCLs) 93,693 

Pay Annualization 38,727 

Non-Pay Inflation Adjustment 54,966 

Efficiencies/Savings (128) (12,798) 

Increase e-File Savings (128) (6,797) 

Space Optimization (6,001) 

Reinvestment 12,798 

Support Aging IT Infrastructure 12,798 

Subtotal FY 2019 Changes to Base (128) $93,693 

FY 2019 Current Services 72,840 $11,252,396 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (2,307) (138,524) 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases (2,307) ($316,727) 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $181,305 

Strengthen Cyber Security 10 40,000 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 24,300 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 58,005 

Support Taxpayer Services and Online Account Activities 126 $18,026 

Subtotal FY 2019 Program Increases 272 $199,331 

Total FY 2019 Budget Request 70,805 $11,135,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-11 

1C – Base Adjustment and Program Changes Description 

Resource Adjustment 

Base Realignment for Support Services $0 / 0 FTE 

The FY 2018 Annualized CR level of $11.159 billion assumes $220 million will be 

transferred from Enforcement to Operations Support in FY 2018 to cover recurring operations 

and maintenance costs. The IRS will submit a formal notification to Congress in its FY 2018 

operating plan. In recognition of the recurring nature of these expenses, the Budget includes 

the $220 million in the FY 2019 current services or base estimate for Operations Support. 

The base captures the amount of resources needed to maintain services at FY 2018 levels. 

In recent years, the IRS has relied on transfers from Enforcement to Operations Support to 

maintain core functions, information technology, and related support services for all IRS 

employees. These transfers have provided front-line employees with the tools, equipment, 

analytics, secure facilities, and technology support necessary to serve taxpayers. 

Maintaining Current Levels (MCLs).................................. +$93,693,000 / 0 FTE 

Pay Annualization +$38,727,000 / 0 FTE 

Funds are requested for annualization of the January 2018 pay-raise. 

Non-Pay +$54,966,000 / 0 FTE 

Funds are requested for non-labor expenses, such as travel, contracts, rent, supplies, and 

equipment. 

Efficiencies and Savings................................................-$12,798,000 / -128 FTE

Increase e-File Savings -$6,797,000 / -128 FTE

Over the past five years, with an increased focus on taxpayers filing electronically, the IRS 

saved about $14 million and 274 FTE from reduced paper returns and the corresponding FTE 

needed to work submission processing. The IRS projects the receipt of 1,902,000 fewer 

returns filed on paper in FY 2019 (1,301,700 individual and 600,300 business returns) than in 

FY 2018, saving approximately 128 FTE and $6.8 million. 

Space Optimization -$6,001,000 / 0 FTE

The IRS will reduce expenditures on rent and improve usage of office space across the 

country. The IRS plans to reduce its real estate footprint by approximately 500,000 square 

feet by closing or consolidating space for estimated rent savings of $6 million in FY 2019. 
IRS-12 

Reinvestment.........................................................+$12,798,000 / 0 FTE 

Supporting Aging IT Infrastructure +$12,798,000 / 0 FTE 

Funding will be applied to refresh and replace critical IT infrastructure that has aged three to 

four times beyond industry standards for replacement. The IRS requires about $136 million 

to replace assets that have aged in the past fiscal year, and estimates every $10 million spent 

above $136 million will result in a one percent reduction of the aged assets. Thus, 

$12.8 million in addition to $136 million in planned spending within the base should allow for 

replacement of about 1.3 percent of aged assets. At the end of FY 2017 more than 59 percent 

of IRS hardware was past its useful life, compared to 64 percent at the end of FY 2016, and 

32 percent of software was two or more releases behind the most current commercially 

available version. The reduction in FY 2017 is attributable to the availability and application 

of user fee funding and prior year expired balances. The management, maintenance, and 

ongoing enhancement of the IRS’s information technology are central to the reliability of its 

operations, and to the successful accomplishment of its mission. 

Program Decreases ...................................................-$316,727,000 / -2,307 FTE 

Action to Achieve Workforce Management Goals -$138,524,000 / -2,307 FTE 

This decrease is expected to lower the telephone Level of Service from an estimated 75 

percent in FY 2018 to 47 percent in FY 2019. This decrease may delay the sorting and 

shipping of incoming mail within normal mail; delay responses to transcript requests and 

other paper receipts from taxpayers; and result in seasonal employees being placed into 

non-work status. Proposed investments in systems and online services will mitigate these 

effects to some extent. 

Realignment from BSM to Operations Support -$178,203,000 / 0 FTE 

The IRS will continue investing in modernizing systems with the proposed $110 million 

request for Business Systems Modernization. This decrease takes into account the projected 

$237 million in unobligated balances brought forward estimated to be available to support 

modernization in FY 2019 and the need to continue investing in IT infrastructure, security, 

and web services within Operations Support. 
IRS-13 

Program Increases...............................................+$199,331,000 / +272 FTE 

Stabilize, Secure and Transform IT Operations +$181,305,000 / +146 FTE

Strengthen Cyber Security +$40,000,000 / +10 FTE 

The IRS protects against more than one 

million cyber-attacks each day and 

operates strong network perimeter defenses 

to mitigate threats, detect vulnerabilities, 

and monitor network security. Sustained 

investments are required to protect against 

increasingly sophisticated adversaries while meeting taxpayer expectations for online 

services. The IRS will enhance network security via cyber-threat forensics, implementation 

of a comprehensive patch management system, and the adoption of government-wide 

information security continuous monitoring tools as part of a layered defense. 

This investment will fund continued efforts to protect sensitive data by executing a multi-year 

plan to enhance security standards, configurations, and controls across the IRS’s largely 

customized application portfolio and expansive inventory of end-of-life infrastructure assets. 

The IRS will leverage these funds to meet or exceed federal requirements governing 

confidentiality, integrity, and the availability of IRS systems, services, and data. In addition, 

the IRS will reduce security risks associated with aged cybersecurity infrastructure and 

enhance the effectiveness of cybersecurity in the following areas: 

 IT Security Safeguards: Enables expanded capabilities and improved execution for 

the identification and mitigation of vulnerabilities across the disparate, geographically 

dispersed IRS technology infrastructure. These expanded safeguards are aimed at 

preventing inappropriate access to IRS systems, eliminating vulnerabilities that may be 

exploited internally or externally, and protecting sensitive information. 

 Continuous Monitoring and Advanced Threat Detection, Defense, and Response:

Improves threat detection, activity auditing, anomaly detection, forensic analytics, 

24x7 monitoring, and technology solutions for voluminous data consumption, 

encrypted transport, storage, aggregation, correlation, and visualization. 

 Cybersecurity Infrastructure: Replaces and updates cybersecurity infrastructure to 

provide a scalable architecture platform that addresses increased data demands to 

store, manage, and analyze significantly larger volumes of structured and unstructured 

data. This infrastructure platform is the foundation for cybersecurity data captured 

across the IRS used to secure the enterprise and prevent fraudulent activity. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

St reng t hen C yber Securit y 10 .0 0 $4 0 ,0 0 0

IT Specialist 10.00 1,712

Software & Hardware 10,329

Contractual Services 27,959

Total 10 .0 0 $4 0 ,0 0 0
IRS-14 

Identity Assurance - e-Authentication Enhancements and Authorization Integration

+$24,300,000 / +21 FTE 

Nearly all of the IRS’s online services are 

dependent upon secure authentication and 

authorization processes: ensuring customers 

are who they say they are, and ensuring they 

are given the appropriate access to specific 

services or data. The IRS is facing a backlog 

of enhancements and defect fixes that are 

needed to ensure compliance and functionality. Secure Access (e-A3) is the registration and 

log-in mechanism (the front door) for taxpayers to access most online applications and is a 

critical cyber defense that prevents inappropriate access to taxpayer data. e-A3 helps 

taxpayers register for a Secure Access account and enables more taxpayers to use online 

applications. 

This investment will continue efforts to make the log-in process more secure, user-friendly, 

and compliant with federal identity and security standards, and to develop new authorization 

capabilities to manage permissions to access customer data and information. This effort 

supports secure customer access through an integrated suite of capabilities, applied 

consistently across channels. Specific capabilities include: 

 Enhanced ID proofing and authentication technology that will utilize internal IRS data 

(e.g., tax and information return data), third party trusted sources, and risk-based 

authentication (e.g., real-time decisions). 

 Reporting capabilities will provide the tools and infrastructure to track and manage real 

time business performance metrics, fraud analytics, system performance results, and 

application usage information. 

 Integration of e-Authentication data with data from other channels, such as phones, to 

perform analytics on the customer experience and fraud detection. 

 Authorization capabilities to perform attribute-based access controls for third parties and 

tax professionals. 

 e-Signature solution to provide the ability for authenticated taxpayers to electronically 

sign and submit returns, statements, and other documentation. 

 Response and recovery capabilities and processes to respond to data breaches and fraud 

incidents. 

P o sitio n T ype/ Other C o sts F T E $ 000

Ident it y A ssurance - eA ut hent icat ion Enhancement s 

and A ut horizat ion Int egrat ion 2 1.0 0 $2 4 ,3 0 0

IT Specialist 21.00 3,931

Software & Hardware 3,067

Contractual Services 17,302

Total 2 1.0 0 $2 4 ,3 0 0
IRS-15 

Aging Technology Infrastructure +$39,000,000 / 0 FTE 

The IRS will use this funding to refresh and 

replace critical IT infrastructure. Regular 

maintenance and replacement reduces outages, 

expensive manual workarounds, support costs, 

security vulnerabilities, and dependency on 

contractors. The IRS’s large infrastructure (hardware, software, and middleware) has aged 

three to four times beyond industry standards. Interrelated and interdependent infrastructure 

and systems often create a ripple effect of unpredictable outages and failures, which can 

undermine operations and core tax-administration responsibilities and put a valuable data 

cache at risk. This investment along with the proposed $12.8 million reinvestment of 

efficiency savings and base funding of $136 million will allow the IRS to reduce the 

percentage of hardware past its useful life from an estimated 59 percent in FY 2018 to 54 

percent in FY 2019. 

Migration to Cloud Services +$20,000,000 / 0 FTE 

Migrating to cloud computing service delivery 

models offers the promise of improved resource 

utilization and reduced costs, while streamlining 

IT operations. Allocating additional resources 

will enable the IRS to make progress on migrating to cloud computing service delivery 

models such as Software as a Service (SaaS), providing end users with the capability to utilize 

provider applications running on a cloud infrastructure; platform as a Service (PaaS), 

providing IRS end users with the capability to deploy onto the cloud infrastructure end usercreated applications using programming languages and tools supported by the provider (e.g., 

java, python, .Net); infrastructure as a Service (IaaS), providing IRS end users with the 

capability to provision processing, storage, networks, and other fundamental computing 

resources where the end user is able to deploy and run arbitrary software, which can include 

operating systems (kernel) and software applications. 

Stabilize IT Operations +$58,005,000 / +115 FTE 

The rapid, reliable production of IT capabilities 

is essential to taxpayers and stakeholders. To 

ensure both short and long-term success for both 

the IRS and taxpayers, the IRS must follow an 

operating model that focuses on developing innovative technology solutions in anticipation of 

ever-changing business drivers (taxpayer needs, legislative mandates, security threats, etc.). 

This funding will be used in part to establish a new IT training and development program that 

will help the IRS assess employee skill sets, identify skill gaps, and train new and existing 

employees to fill those gaps and respond more quickly to new legislative requirements, the 

latest security practices, and new technology. Funding will also be used to establish 

communities of practice that will identify and promote best practices across IRS 

organizations and establish an immersive IT learning environment with on-the-job training, 

job shadowing, and employee coaching. These programs will be essential to addressing the 

P o sitio n T ype/ Other C o sts F T E $ 000

A ging Technology 

Inf rast ruct ure $39,000

Software & Hardware 37,050

Contractual Services 1,950

Total $39,000

P o sitio n T ype/ Other C o sts F T E $ 000

M igrat ion t o Cloud Services $2 0 ,0 0 0

Contractual Services 20,000

Total $20,000

P o sitio n T ype/ Other C o sts F T E $ 000

St abilize IT Operat ions 115.0 0 $58 ,0 0 5

IT Specialist 115.00 58,005

Total 115.0 0 $58 ,0 0 5
IRS-16 

IT skills gap faced by the IRS and other federal agencies. Developing a resilient and talented 

IT workforce is essential to protecting IRS systems in the future. 

 

Funding will be used to launch automated testing and continuous delivery systems. These 

systems will standardize the deployment and testing of new code throughout the IT 

ecosystem, which contains more than 400 applications; eliminate existing manual code 

transmittal processes that are costly and prone to human error; increase delivery quality and 

delivery speed; and establish automated rollbacks that would be triggered when testing fails. 

 

Funding will be used to develop a comprehensive analytics strategy that will drive objective, 

data-driven decisions and improve performance measurement in IT; integrate disparate data 

sets from several isolated systems into a comprehensive platform that will allow the IRS to 

examine operational data in a broader context and provide valuable insights to improve IT 

operations; and setup an enterprise monitoring project that will allow systems administrators 

to identify potential performance problems before catastrophic failure occurs. 

Support Taxpayer Services and Online Account Activities

Support Taxpayer Services and Enforcement through Account Management Support and 

Online Service Help Desk Activities (+$18,026,000 / +126 FTE) 

The investment of $18 million and 

126 FTE will support Taxpayer 

Service and Enforcement programs. 

Additional customer service 

representatives will help taxpayers 

troubleshoot collection, account 

management, and submission 

processing issues. These funds also 

will be used to hire additional 

Taxpayer Advocate Service (TAS) 

specialists to help taxpayers navigate 

issues and protect taxpayer rights. 

While the IRS has made significant strides in implementing Secure Access, there are many 

enhancements needed to improve success rates for taxpayers, reduce technical errors, refine 

business rules, improve monitoring capabilities, and integrate additional applications with the 

Secure Access process. This investment will include support for the e-Authentication Help 

Desk to assist taxpayers with establishing or accessing their online accounts. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

A cco unt M anag ement Supp o rt f o r 

A udit and Collect ion C overage 57.0 0 $3 ,555

Customer Service Representatives 31.00 2,096

Seasonal 24.00 1,308

M anagers 2.00 151

Taxpayer Advocacy - Case Coverage 9 .0 0 $1,0 6 9

TAS Specialist 9.00 1,069

Help D esk f o r Imp ro ve Id ent it y 

A ssurance Act ivit ies 6 0 .0 0 $13 ,4 0 2

Program Analyst 15.00 2,246

Customer Service Representatives 45.00 3,203

Contractual Services 7,953

Total 12 6 .0 0 $18 ,0 2 6
IRS-17 

1.3 – Operating Levels Table

Dollars in thousands 

Internal Revenue Service 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 5,799,023 5,714,923 5,664,220

11.3 Other than Full-Time Permanent Positions 80,219 69,801 70,107

11.5 Other Personnel Compensation 196,095 208,697 207,397

11.8 Special Personal Services Payments 20,829 22,821 22,931

11.9 Personnel Compensation (Total) 6,096,166 6,016,242 5,964,655

12.1 Personnel Benefits 2,159,138 2,091,006 2,067,223

13.0 Benefits to Former Personnel 29,460 27,408 27,539

Total Personnel and Compensation Benefits $8,284,764 $8,134,656 $8,059,417

21.0 Travel 77,431 88,619 90,644

22.0 Transportation of Things 18,666 23,916 24,381

23.1 Rental Payments to GSA 592,636 593,184 599,002

23.2 Rent Payments to Others 12,203 12,728 12,973

23.3 Communications, Utilities, & Misc 302,230 340,721 347,869

24.0 Printing & Reproduction 28,591 30,182 30,807

25.1 Advisory & Assistance Services 993,184 900,571 877,029

25.2 Other Services 88,616 95,667 96,897

25.3 Purchase of Goods & Services from Govt. Accounts 158,171 168,619 172,820

25.4 Operation & Maintenance of Facilities 195,912 180,602 184,511

25.5 Research & Development Contracts 21

25.6 Medical Care 14,652 13,872 14,199

25.7 Operation & Maintenance of Equipment 37,919 78,741 79,586

26.0 Supplies and Materials 33,085 38,883 39,645

31.0 Equipment 333,784 407,293 454,143

32.0 Land and Structures 17,355 12,097 12,682

41.0 Grants, Subsidies 35,890 35,990 35,990

42.0 Insurance Claims & Indemnities 2,485 2,362 2,405

44.0 Refunds 6

91.0 Unvouchered 7,399

Total Non-Personnel $2,950,236 $3,024,047 $3,075,583

New Appropriated Resources $11,235,000 $11,158,703 $11,135,000

Appropriations 

Taxpayer Services 2,455,754 2,349,688 2,241,000

Enforcement 4,640,000 4,606,996 4,628,204

Operations Support 3,849,246 3,913,988 4,155,796

Business Systems Modernization 290,000 288,031 110,000

New Appropriated Resources $11,235,000 $11,158,703 $11,135,000

FTE 76,634 72,968 70,805

See footnotes in 1.1 – Appropriations Detail Table 
IRS-18 

1D – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

INTERNAL REVENUE SERVICE 

TAXPAYER SERVICES 

For necessary expenses of the Internal Revenue 

Service to provide taxpayer services, including prefiling assistance and education, filing and account 

services, taxpayer advocacy services, and other 

services as authorized by 5 U.S.C. 3109, at such rates 

as may be determined by the Commissioner, 

$2,241,000,000; of which not less than $8,890,000

shall be for the Tax Counseling for the Elderly 

Program; of which not less than $12,000,000 shall be 

available for low-income taxpayer clinic grants; of 

which not less than $15,000,000, to remain available 

until September 30, 2020, shall be available for a 

Community Volunteer Income Tax Assistance 

matching grants program for tax return preparation 

assistance; and of which not less 

than $206,000,000 shall be available for operating 

expenses of the Taxpayer Advocate 

Service: Provided, That of the amounts made 

available for the Taxpayer Advocate Service, not less 

than $5,000,000 shall be for identity theft casework. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

ENFORCEMENT 

For necessary expenses for tax enforcement activities 

of the Internal Revenue Service to determine and 

collect owed taxes, to provide legal and litigation 

support, to conduct criminal investigations, to 

enforce criminal statutes related to violations of 

internal revenue laws and other financial crimes, to 

purchase and hire passenger motor vehicles (31 

Making funding for the Tax Counseling 

for the Elderly Program equal to the FY 

2017 enacted level. 
IRS-19 

U.S.C. 1343(b)), and to provide other services as 

authorized by 5 U.S.C. 3109, at such rates as may be 

determined by the Commissioner, $4,628,204,000, of 

which not to exceed $50,000,000 shall remain 

available until September 30, 2020, and of which not 

less than $60,257,000 shall be for the Interagency 

Crime and Drug Enforcement program: Provided, 

That of the funds provided under this paragraph, 

$4,628,204,000 is provided to meet the terms of 

section 251(b)(2) of the Balanced Budget and 

Emergency Deficit Control Act of 1985, as 

amended. 

In addition, not less than $204,643,000 for tax 

activities under this heading, including tax 

compliance to address the Federal tax 

gap: Provided, That such amount is additional new 

budget authority for tax activities, including tax 

compliance to address the Federal tax gap, as 

specified for purposes of section 251(b)(2) of the 

Balanced Budget and Emergency Deficit Control 

Act of 1985, as amended. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

OPERATIONS SUPPORT 

For necessary expenses of the Internal Revenue 

Service to support taxpayer services and 

enforcement programs, including rent payments; 

facilities services; printing; postage; physical 

security; headquarters and other IRSwide administration activities; research and statistics 

of income; telecommunications; information 

technology development, enhancement, operations, 

maintenance, and security; the hire of passenger 

motor vehicles (31 U.S.C. 1343(b)); the operations of 

the Internal Revenue Service Oversight Board; and 

other services as authorized by 5 U.S.C. 3109, at 

such rates as may be determined by the 

Language required for the proposed 

program integrity cap adjustment. 

More information about the cap 

adjustment can be found in section 4.1 

– Appropriations Detail Table with 

Program Integrity Cap Adjustment of 

the Appendix and Budget Process 

Chapter of the FY 2019 President’s 

Budget. 

Revised to reflect the FY 2017 enacted 

language. 
IRS-20 

Commissioner; $4,155,796,000, of which not to 

exceed $250,000,000 shall remain available until 

September 30, 2020; of which not to 

exceed $10,000,000 shall remain available until 

expended for acquisition of equipment and 

construction, repair and renovation of facilities; of 

which not to exceed $1,000,000 shall remain 

available until September 30, 2021, for research; of 

which not to exceed $20,000 shall be for official 

reception and representation expenses: Provided, 

That not later than 30 days after the end of each 

quarter, the Internal Revenue Service shall submit a 

report to the Committees on Appropriations of the 

House of Representatives and the Senate and the 

Comptroller General of the United States detailing 

the cost and schedule performance for its major 

information technology investments, including the 

purpose and life-cycle stages of the investments; the 

reasons for any cost and schedule variances; the risks 

of such investments and strategies the Internal 

Revenue Service is using to mitigate such risks; and 

the expected developmental milestones to be achieved 

and costs to be incurred in the next quarter: Provided 

further, That the Internal Revenue Service shall 

include, in its budget justification for fiscal year 

2019, a summary of cost and schedule performance 

information for its major information technology 

systems: Provided further, That of the funds 

provided under this paragraph, $4,155,796,000 is 

provided to meet the terms of section 251(b)(2) of 

the Balanced Budget and Emergency Deficit 

Control Act of 1985, as amended. 

In addition, not less than $156,928,000 for tax 

activities under this heading, including tax 

compliance to address the Federal tax 

gap: Provided, That such amount is additional new 

budget authority for tax activities, including tax 

compliance to address the Federal tax gap, as 

specified for purposes of section 251(b)(2) of the 

Balanced Budget and Emergency Deficit Control 

Act of 1985, as amended. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

Increasing two-year authority from the 

$50 million cap in FY 2017 to $250 

million to correspond with the 

availability of the closely-linked BSM 

appropriation; to provide sufficient 

time for a robust IT lifecycle process 

including vision, strategy, solution, 

design, and development, thereby 

improving contracting outcomes; 

consistent with a recent 

recommendation from the Treasury 

Inspector General for Tax 

Administration (TIGTA), “While 

Improvements Continue in Contract 

Negotiation Methods and Management 

Practices, Inconsistencies Need to Be 

Addressed.” 

Language required for the proposed 

program integrity cap adjustment. 

More information about the cap 

adjustment can be found in section 4.1 

– Appropriations Detail Table with 

Program Integrity Cap Adjustment of 

the Appendix and Budget Process 

Chapter of the FY 2019 President’s 

Budget. 
IRS-21 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

BUSINESS SYSTEMS MODERNIZATION 

For necessary expenses of the Internal Revenue 

Service's business systems modernization 

program, $110,000,000, to remain available until 

September 30, 2021, for the capital asset acquisition 

of information technology systems, including 

management and related contractual costs of said 

acquisitions, including related Internal Revenue 

Service labor costs, and contractual costs associated 

with operations authorized by 5 U.S.C. 

3109: Provided, That not later than 30 days after the 

end of each quarter, the Internal Revenue Service 

shall submit a report to the Committees on 

Appropriations of the House of Representatives and 

the Senate and the Comptroller General of the United 

States detailing the cost and schedule performance 

for CADE 2 and Modernized e-File information 

technology investments, including the purposes and 

life-cycle stages of the investments; the reasons for 

any cost and schedule variances; the risks of such 

investments and the strategies the Internal Revenue 

Service is using to mitigate such risks; and the 

expected developmental milestones to be achieved 

and costs to be incurred in the next quarter. 

Note.—A full-year 2018 appropriation for this 

account was not enacted at the time the budget was 

prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations 

Act, 2018 (Division D of P.L. 115–56, as amended). 

The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution. 

ADMINISTRATIVE PROVISIONS –

INTERNAL REVENUE SERVICE

(INCLUDING TRANSFER OF FUNDS)

SEC. 101. Not to exceed 10 percent of any 

appropriation made available in this Act to the 

Internal Revenue Service may be transferred to any 

Increasing transfer authority between 

IRS appropriations accounts from 5 

percent to 10 percent, consistent with 
IRS-22 

other Internal Revenue Service appropriation upon 

the advance notification of the Committees on 

Appropriations. 

SEC. 102. The Internal Revenue Service shall 

maintain an employee training program, which shall 

include the following topics: taxpayers' rights, 

dealing courteously with taxpayers, cross-cultural 

relations, ethics, and the impartial application of tax 

law. 

SEC. 103. The Internal Revenue Service shall 

institute and enforce policies and procedures that will 

safeguard the confidentiality of taxpayer information 

and protect taxpayers against identity theft. 

SEC. 104. Funds made available by this or any other 

Act to the Internal Revenue Service shall be available 

for improved facilities and increased staffing to 

provide sufficient and effective 1–800 help line 

service for taxpayers. The Commissioner shall 

continue to make improvements to the Internal 

Revenue Service 1–800 help line service a priority 

and allocate resources necessary to enhance the 

response time to taxpayer communications, 

particularly with regard to victims of tax-related 

crimes. 

SEC. 105. The Internal Revenue Service shall issue a 

notice of confirmation of any address change relating 

to an employer making employment tax payments, 

and such notice shall be sent to both the employer's 

former and new address and an officer or employee 

of the Internal Revenue Service shall give special 

consideration to an offer-in-compromise from a 

taxpayer who has been the victim of fraud by a thirdparty payroll tax preparer. 

SEC. 106. None of the funds made available under 

this Act may be used by the Internal Revenue Service 

to target citizens of the United States for exercising 

any right guaranteed under the First Amendment to 

the Constitution of the United States. 

SEC. 107. None of the funds made available in this 

Act may be used by the Internal Revenue Service to 

target groups for regulatory scrutiny based on their 

ideological beliefs. 

SEC. 108. Section 9503(a) of title 5, United States 

Code, is amended by striking the clause "Before 

September 30, 2013" and inserting "before September 

30, 2022". 

recent recommendations from TIGTA 

(Audit #201620014). 

Restoring Streamlined Critical Pay 

authority through September 30, 2022. 
IRS-23 

SEC. 109. Section 9503(a)(5) of title 5, United States 

Code, is amended by inserting before the semicolon 

the following: 

", but are renewable for an additional two years, 

based on a critical organizational need". 

SEC. 110. Notwithstanding any Congressional 

notification requirements for a reprogramming of 

funds in this Act, funds provided in this Act for the 

Internal Revenue Service shall be available for 

obligation and expenditure through a 

reprogramming of funds that augments or reduces 

existing programs, projects, or activities by up 

to $10,000,000 without prior Congressional 

notification of such action. 

Providing authority to reprogram up to 

$10 million within appropriations 

accounts without formal notification 

procedures. This increase will allow 

the IRS to allocate funds to highest 

priority needs at end of fiscal year, 

including infrastructure, and respond to 

late-breaking workload and program 

demand changes. 
IRS-24 

1E – Legislative Proposals 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the Budget proposes a 

$362 million discretionary program integrity cap adjustment in FY 2019 to fund new and 

continuing investments in expanding and improving the effectiveness and efficiency of the 

IRS’s overall tax enforcement program. The Budget proposes $205 million for the 

Enforcement account and $157 million for the Operations Support account. It also proposes 

additional adjustments in future years to fund new initiatives and inflation. The proposed 

investments will generate approximately $44 billion in additional revenue over 10 years and 

will cost about $15 billion for net savings of $29 billion. Notably, this ROI is likely 

understated because it does not reflect the effect that enhanced enforcement has on deterring 

non-compliance. The deterrent effect helps to ensure the continued payment of over 

$3 trillion in taxes voluntarily paid each year. More information about the cap adjustment is 

found in section 4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment of 

the Appendix and in the Budget Process Chapter of the FY 2019 President’s Budget. 

Streamlined Critical Pay Authority 

The Budget proposes to reinstate Streamlined Critical Pay (SCP) authority for the IRS 

through September 30, 2022. The authority to make new SCP appointments expired 

September 30, 2013. This authority allowed the IRS to recruit and retain IT and other senior 

professionals and was limited to 40 positions. The IRS no longer employs any SCP appointees. 

The last SCP appointment expired on September 29, 2017. Without the renewal of SCP the 

IRS will continue to face challenges recruiting and retaining top talent in FY 2019, especially 

IT professionals who can help protect taxpayer data from cyber-attacks and who can assist 

with modernizing the IRS's IT infrastructure. To mitigate this issue, the IRS has carefully 

considered the Office of Personnel Management (OPM) existing government-wide Critical 

Position Pay (CPP) authority as an alternative to SCP. However, the CPP structure is limited. 

Key benefits of SCP are: 

• Shortened Approval Timeline: SCP appointments approved by the IRS 

Commissioner had an approval timeline of four to six weeks compared to the CPP 

approval process, which requires concurrence at the Secretary of the Treasury level 

and approval by OPM and has an approval timeline of four to six months. 

• Streamlined Justification Process: The justification process is less extensive for SCP 

appointments, decreasing the amount of time an SES position is vacant. Currently, 

CPP SES positions can be vacant for several months to a year before being able to 

justify obtaining a CPP designation. 

• Expanded Salary Cap: Under SCP authority, the IRS could pay up to the 

Vice President’s salary ($240,100 in 2017). Under the CPP authority, the EX-I salary 

would cap at $207,800 in 2017. 
IRS-25 

According to TIGTA report 2015-IE-R001, The Internal Revenue Service’s Use of Its 

Streamlined Critical Pay Authority, the IRS ran the SCP program effectively. 

Correctable Error Authority 

The Budget proposes to provide the IRS with greater flexibility to address errors on taxpayer 

returns. Under current law, when the IRS identifies certain mathematical and clerical errors 

or other specific irregularities on returns during processing, it automatically adjusts the return 

for the taxpayer. At various times, Congress has expanded this authority on a case-by-case 

basis. The IRS would be able to use its resources more effectively and efficiently through 

reducing improper payments and cutting down on the need for costly audits if Congress were 

to expand this authority to allow the IRS to correct returns for specific errors. The 

Administration’s Budget proposes to permit the IRS to correct a taxpayer’s return in cases 

where (1) the information provided by the taxpayer does not match the information contained 

in government databases; (2) the taxpayer has exceeded the lifetime limit for claiming a 

deduction or credit; or (3) the taxpayer has failed to include with his or her return certain 

documentation that is required by statute. 

Increase Oversight of Paid Tax Return Preparers 

Since 2011, the IRS has been blocked from enforcing regulations on the grounds that the 

IRS’s authority to regulate practitioners is insufficient to permit regulation of tax return 

preparers who do not practice or represent taxpayers before an office of the Department of the 

Treasury. The Budget requests that the IRS be granted the authority to require minimum 

standards for an estimated 400,000 paid tax return preparers currently without credentials. 

Incompetent and dishonest return preparers increase collection costs, reduce revenues, 

disadvantage taxpayers by potentially subjecting them to penalties and interest as a result of 

incorrect returns, and undermine confidence in the tax system. The proposal would explicitly 

provide that the Secretary of the Treasury has the authority to regulate all paid tax return 

preparers. 

More information about these proposals, outlay effects, and other tax policy issues can be 

found in the Federal Receipts and Budget Process chapters of the President’s Budget. 

 
IRS-26 

1F - IRS Use of Evidence and Evaluation 

The IRS continues to improve program performance by applying existing evidence about 

what works and by using research and innovation to improve program delivery. 

Significant Accomplishments 

Reducing Taxpayer Burden and Improving Compliance 

 Post-Filing Model: The IRS has developed a model of the post-filing interactions 

between taxpayers and the IRS, accounting for various post-filing treatment streams 

with a focus on taxpayer burden, IRS costs, cycle time, and compliance outcomes. 

The IRS uses the model to inform the campus exam plan along with the design and 

analysis of non-filer outreach and enforcement treatments. The IRS is updating the 

underlying research study based on more recent taxpayer experience and is extending 

it to include corporate and partnership taxpayers. 

 Behavioral Economics Research: The IRS is engaged in a set of pilots and research 

studies to improve its understanding of taxpayer behavior. These studies include 

outreach programs encouraging compliant participation in the Earned Income Tax 

Credit and the American Opportunities Tax Credit, filing compliance, and payment 

compliance. 

Highest Priorities 

Improving the Effectiveness of the IRS 

 Evaluation of Statistics of Income (SOI) Major Programs: The IRS SOI office will 

continue evaluations of its income tax products, determine projected future needs, and 

identify areas of potential cost savings. Cost-saving measures include replacing or 

supplementing statistical files with information from IRS administrative records as 

well as identifying statistical files that could be discontinued. 

 Creating More Accessible Statistics: SOI will continue to implement its 

comprehensive plan to modernize its public communications efforts. Completed 

initiatives include extensive data visualizations, social media outreach, and redesigned 

Tax Stats web pages. These efforts will provide more accessible data to the public and 

assist SOI in leading OMB data dissemination requirements. 

 Redesign of Business Publications: SOI will complete a redesign of its business tax 

publications, which include data published for corporations and partnerships. The 

redesign will ensure compliance with new disclosure guidelines set forth in Tax 

Information Security Guidelines for Federal, State and Local Agencies (Publication 

1075). SOI is working with customers, through public meetings, to ensure that the 

redesigned publications provide useful, comprehensive statistical data on businesses to 

the public while protecting taxpayer privacy. Researchers use this data extensively in 

evaluating current and proposed tax policy and estimating revenue. Additionally, the 

data is used by businesses for a wide range of analytics that support planning and 

marketing.
IRS-27 

 Comprehensive Taxpayer Attitude Survey: SOI assumed responsibility for the Annual 

Comprehensive Taxpayer Attitude Survey, formerly conducted by the IRS Oversight 

Board. The survey collects information from a sample of taxpayers to gain insight 

into taxpayer views on voluntary compliance and IRS enforcement and taxpayer 

services. 

 Submission Processing Center Realignment: In conjunction with the closure of select 

IRS Submission Processing Centers, SOI is leading a Research, Applied Analytics 

& Statistics (RAAS)-wide effort to realign the processing of its statistical samples 

among the remaining centers. This includes a comprehensive effort to realize cost 

savings while still maintaining the quality and integrity of data collected for SOI’s 

statistical samples. 

 SOI Releases: In FY 2017, SOI released more than 200 additional tables containing 

detailed information on a wide range of topics. These included the Tax Year 2014 

Individual Income Tax Percentile tables. The percentile tables present the number of 

returns, adjusted gross income, selected income items, credits, total income tax, and 

average tax rates tabulated by selected percentile classes and provide useful 

information on individual taxpayers to the public. For Tax Year 2014, the percentile 

tables include a new classification at the .001 percentile level – which in 2014 

represented the top 1,396 returns. SOI’s other releases include updated statistical 

tables for sole proprietorships, estates, tax-exempt organizations and bonds, and 

international taxpayers and entities. 

 
IRS-28 

Section II – Budget and Performance Plan 

Treasury Strategic Objectives and Agency Priority Goals 

The Budget supports the following Department of the Treasury Strategic Objectives for FY 

2018 – 2022 and Agency Priority Goals for FY 2018 – 2019 for all appropriations: 

 Strategic Goal 1: Boost U.S. Economic Growth, Strategic Objective 1.1: Tax Law 

Implementation: Administer tax law to better enable all taxpayers to meet their 

obligations, while protecting the integrity of the tax system. 

 Strategic Goal 4: Transform Government-wide Financial Stewardship, Strategic 

Objective 4.1: Financial Data Access/Use: Increase the access and use of federal 

financial data to strengthen government-wide decision-making, transparency, and 

accountability. 

 Strategic Goal 5: Achieve Operational Excellence, Strategic Objectives 5.1 – 5.3: 

o 5.1 Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to 

accomplish our mission. 

o 5.2 Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure. 

o 5.3 Customer Value: Improve customer value by increasing the quality and 

lowering the cost of Treasury’s products and services. 

 Agency Priority Goal (aligned to strategic objective 1.1): Reduce the amount of 

unprotected identity theft tax refunds paid by two percent by December 21, 2019. 

Taxpayer Services 

Appropriation Description 

The Taxpayer Services appropriation provides funding for taxpayer service activities and 

programs. This includes printing forms and publications, processing tax returns and related 

documents, offering filing and account services, taxpayer assistance, and providing taxpayer 

advocacy services. 

The Taxpayer Services budget request for FY 2019 is $2,241,000,000 in direct appropriations 

and 24,668 FTE. This is a decrease of $108,688,000, or 4.63 percent, and 2,309 fewer or 

8.56 percent FTE than the FY 2018 Annualized Continuing Resolution level of 

$2,349,688,000 and 26,977 FTE. 
IRS-29 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Taxpayer Services 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 26,977 $2,349,688 

Changes to Base 

Maintaining Current Levels (MCLs) $13,115 

Pay Annualization 9,697 

Non-Pay Inflation Adjustment 3,418 

Efficiencies/Savings (128) (6,695) 

Increase e-File Savings (128) (6,695) 

Space Optimization 

Subtotal FY 2019 Changes to Base (128) $6,420 

FY 2019 Current Services 26,849 $2,356,108 

Program Changes 

Program Decreases 

 Actions to Achieve Workforce Management Goals (2,307) (133,134) 

Subtotal FY 2019 Program Decreases (2,307) ($133,134) 

Program Increases 

Support Taxpayer Services and Online Account Activities 126 $18,026 

Subtotal FY 2019 Program Increases 126 $18,026 

Total FY 2019 Budget Request 24,668 $2,241,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-30 

2.2 – Operating Levels Table 

Dollars in thousands 

Taxpayer Services 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 1,550,096 1,489,599 1,404,152 

11.3 Other than Full-Time Permanent Positions 42,746 31,576 31,727 

11.5 Other Personnel Compensation 64,728 71,928 72,297 

11.8 Special Personal Services Payments 1 

11.9 Personnel Compensation (Total) 1,657,571 1,593,103 1,508,176 

12.1 Personnel Benefits 605,966 550,994 515,458 

13.0 Benefits to Former Personnel 28,829 26,818 26,946 

Total Personnel and Compensation Benefits $2,292,366 $2,170,915 $2,050,580 

21.0 Travel 9,332 11,204 11,727 

22.0 Transportation of Things 678 633 648 

23.3 Communications, Utilities, & Misc 1,254 1,187 1,216 

24.0 Printing & Reproduction 8,964 9,410 9,610 

25.1 Advisory & Assistance Services 37,073 40,590 49,514 

25.2 Other Services 7,369 13,568 13,943 

25.3 Purchase of Goods & Services from Govt. Accounts 57,389 59,051 60,483 

25.4 Operation & Maintenance of Facilities 62 50 51 

25.7 Operation & Maintenance of Equipment 83 234 240 

26.0 Supplies and Materials 4,643 6,249 6,378 

31.0 Equipment 281 119 121 

32.0 Land and Structures 

41.0 Grants, Subsidies 35,890 35,990 35,990 

42.0 Insurance Claims & Indemnities 370 488 499 

Total Non-Personnel $163,388 $178,773 $190,420 

New Appropriated Resources $2,455,754 $2,349,688 $2,241,000 

Budget Activities 

Pre-filing Taxpayer Assistance & Education 607,043 603,424 607,753 

Filing & Account Services 1,848,711 1,746,264 1,633,247 

New Appropriated Resources $2,455,754 $2,349,688 $2,241,000 

FTE 28,692 26,977 24,668 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-31 

2.3 – Appropriation Detail Table

2A – Pre-Filing Taxpayer Assistance and Education ($607,753,000 in direct 

appropriations, and an estimated $1,237,000 from reimbursable programs). This budget 

activity funds direct labor and non-labor expenses to assist with tax return preparation, 

including tax law interpretation, publication, production, and advocate services. The program 

activities include: 

 Pre-Filing Services Management supports headquarters staffing and support for 

Taxpayer Advocate Service and Customer Assistance Relationship and Education 

(CARE) program activities. CARE provides pre-filing taxpayer assistance and 

education. 

 Taxpayer Communication and Education researches customer needs; develops and 

manages educational programs; establishes partnerships with stakeholder groups; and 

disseminates tax information to taxpayers and the general public through a variety of 

media, including publications and mailings, websites, broadcasting, and advertising. 

 Media and Publications develops and produces notices, forms, and publications for 

printed and electronic tax materials, and provides media production services to 

taxpayers. 

 Taxpayer Advocacy provides advocate services to taxpayers by identifying the 

underlying causes of taxpayer problems and participating in the development of 

systematic and/or procedural remedies. 

 Account Management and Assistance – Field Assistance provides face-to-face 

assistance, education, and compliance services to taxpayers. It includes return 

preparation, answering tax questions, resolving account and notice inquiries, and 

supplying forms and publications to taxpayers. 

 Taxpayer Advocate Case Processing provides advocate services to taxpayers to 

resolve taxpayer problems through prompt identification, referral, and settlement. 

Dollars in thousands

T axpayer Services

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE A M OUNT

N ew A ppro priated R eso urces:

Pre-Filing Taxpayer Assistance and Education 4,700 $607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72%

Filing and Account Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47%

Subto tal N ew A ppro priated 

Resources 28,692 $ 2,455,754 26,977 $ 2,349,688 24,668 $ 2,241,000 (2,309) ($ 108,688) -8.56% -4.63%

Other Resources:

Reimbursables 708 62,798 895 74,359 423 36,756 (472) (37,603) -52.74% -50.57%

User Fees 71 3,900 75 68,100 71 67,900 (4) (200) -5.33% -0.29%

Recovery from Prior Years 1

Unobligated Balances from Prior Years 10,250 827 45,900 5,000 (827) (40,900) -100.00% -89.11%

Subtotal Other Resources 779 $ 76,949 1,797 $ 188,359 494 $ 109,656 (1,303) ($ 78,703) -72.51% -41.78%

T o tal B udgetary R eso urces 29,471 $ 2,532,703 28,774 $ 2,538,047 25,162 $ 2,350,656 (3,612) ($ 187,391) -12.55% -7.38%

1See footnotes in 1.1 – Appropriations Detail Table

% C hange

F Y 2018 to F Y 2019 

Request

F Y 2017

Enacted

Change

F Y 2018

Annualized CR

F Y 2019

Request

F Y 2018 to F Y 

2019 R equest
IRS-32 

 W&I HQ Management and Administration provides staffing, training, and direct 

support for Wage and Investment management activities of strategic planning, 

communications and liaison, finance, human resources, equity, diversity and inclusion, 

business modernization, and embedded training. 

Description of Performance 

In FY 2017, the IRS delivered 93.1 percent of the Critical Individual Filing Season Tax 

Products to the public timely (defined as no later than the fifth workday of January) exceeding 

the target of 89 percent. There were no expired provisions for this year as there had been the 

preceding year and the IRS did not have to implement new tax legislation, which allowed 

Media & Publications (M&P) to finish products earlier than anticipated. M&P prioritized 

critical tax products to ensure they would be available to taxpayers by the start of filing 

season. For FY 2018 and FY 2019, the IRS will maintain a target of 89 percent because of 

the significant workload resulting from the Tax Cuts and Jobs Act (Public Law 115-97). 

In FY 2017, the IRS Timeliness of Critical TE/GE and Business Filing Season Tax products 

to the Public was 96.7 percent, exceeding the target of 91 percent. To meet future targets, the 

IRS will plan, monitor, and coordinate all product development and delivery activities. The 

IRS also will continue to evaluate processes so that mitigation strategies can be implemented. 

In FY 2018 and FY 2019, the IRS expects to achieve a target of 91 percent for Critical Tax 

Exempt & Government Entities and Business Tax Products to the Public. For FY 2018 and 

FY 2019, the IRS will maintain a target of 91 percent because of the significant workload 

resulting from the Tax Cuts and Jobs Act (Public Law 115-97). 

Beginning in FY 2017, the Taxpayer Self Assistance Rate was replaced with a revised metric, 

the Enterprise Self Assistance Participation Rate. This metric reports the percentage of 

taxpayer requests resolved using self-assisted automated services. The new measure reached 

79 percent and was used as an indicator for FY 2017. The revised metric now includes 

additional applications including Get Transcript and payment applications such as Direct Pay

and Online Payment Agreement. As the IRS provides new self-service applications to the 

public, they will be added to the list of applications included in the Enterprise Self Assistance 

Participation Rate. The metric will continue as an indicator in FY 2018 and FY 2019. 

 
IRS-33 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Pre-Filing Taxpayer Assistance & Education FTE Amount 

FY 2018 Annualized CR Level 4,451 $603,424 

Changes to Base 

Maintaining Current Levels (MCLs) $3,260 

Pay Annualization 2,568 

Non-Pay 692 

Subtotal FY 2019 Changes to Base $3,260 

FY 2019 Current Services 4,451 $606,684 

Program Changes 

Program Increases 

Support Taxpayer Services and Online Account Activities 9 1,069 

Subtotal FY 2019 Program Increases 9 $1,069 

Total FY 2019 Request 4,460 $607,753 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.1 – Budget and Performance Report and Plan 

2B – Filing and Account Services ($1,633,247,000 in direct appropriations, an estimated 

$35,519,000 from reimbursable programs, and an estimated $67,900,000 from user fees): 

This budget activity funds direct labor and non-labor expenses that provide filing and account 

services to taxpayers, process paper and electronically-submitted tax returns, issue refunds, 

and maintain taxpayer accounts. The IRS continues to make progress in decreasing paper 

returns (more than 90 percent of individual returns were filed electronically during the 

2017 filing season) and increasing the use of electronic filing and payment methods. The 

program activities include: 

 Filing and Account Services Management administers filing and account services 

programs. 

Dollars in thousands

Pre-Filing Taxpayer Assistance & Education FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $586,896 $595,168 $609,196 $609,445 $607,043 $603,424 $607,753

Reimbursable Resources2 45 51 13 4 1,178 1,237

User Fees2 6,400 22,400 4,141

Budget Activity Total $593,296 $617,613 $613,388 $609,458 $607,047 $604,602 $608,990

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Pre-Filing Taxpayer Assistance & Education FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

Timeliness of Critical Filing Season Tax Products to the Public (Ot) 58.9% 99.1% 89.0% 92.5% 93.1% 89.0% 89.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products to the Public 

(Ot) 83.6% 98.7% 92.6% 98.0% 96.7% 91.0% 91.0% 91.0%

Enterprise Taxpayer Self-Assistance Rate (E) (L)1 83.3% 84.7% 88.7% 89.0% 79.0% Indicator Indicator Indicator 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal

1

Starting in FY 2017, the IRS modified the Taxpayer Self Assistance Rate measure to include additional self-service channels. As new self-assistance applications are provided to the 

public, they will be added to the methodology. The IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expects to see additional impacts in 2018 due to tax 

reform; in addition, the IRS continues to evaluate the impact of changes to the web services measure.
IRS-34 

 Submission Processing processes paper and electronically-submitted tax returns and 

supplemental documents, accounts for tax revenue, processes information documents, 

and issues refunds and tax notices. 

 Account Management and Assistance – Electronic/Correspondence Assistance

provides education and assistance to taxpayers and resolves accounts and notice 

inquiries through telephone, paper, and internet correspondence. 

 Electronic Products and Services Support (EPSS) provides centralized operations and 

support capabilities for the IRS suite of electronic products, including e-help desk, 

technology support, and operations support. 

 Electronic Tax Administration (ETA) markets and administers electronic tax 

administration products and services. 

 Business Performance Lab initiates, recommends, and manages systemic solutions for 

the detection and treatment of improper refunds while ensuring effective treatment for 

payment of valid refund claims; leads the development of innovative business 

processes and technology solutions and represents Return Integrity & Compliance 

Services (RICS) interests in support of the service-wide revenue protection strategy. 

 Joint Operations Center (JOC) provides service, support, and technology for 

telephone, correspondence, and electronic media inquiries; real time monitoring and 

routing of inbound calls; monitoring of Customer Service Representative accuracy; 

and management of the enterprise telephone database. 

Description of Performance 

Millions of individual and business taxpayers file their returns electronically. In FY 2017, the 

IRS achieved an 86.9 percent individual e-file rate and a 52.9 percent business e-file rate, 

falling slightly short of 87 percent individual e-file rate target and exceeding the 51 percent 

target for business returns. The overall benefits of e-file (i.e., faster refunds, greater accuracy, 

secure and confidential submission, and quick confirmation) continue to drive performance. 

The IRS also is promoting the benefits of e-filing via social media. The IRS will increase the 

individual e-file rate target to 88 percent and 89 percent for FY 2018 and FY 2019, 

respectively. The business e-file rate target will be increased to 54 percent for FY 2018 and 

56 percent for FY 2019. 

In FY 2017, Customer Accuracy – Tax Law was 96.7 percent, exceeding the target of 

95 percent. This measure reflects the percentage of correct answers given by a live assistor on 

toll-free tax law inquiries. The IRS will continue to monitor results through data driven 

analysis of reports obtained from the Embedded Quality Review System (EQRS). The IRS 

will continue to hold weekly conference calls throughout the year to discuss quality 

defects/errors and procedures to ensure the target is met. For FY 2018 and FY 2019, the IRS 

will keep the tax law accuracy target at 95 percent, although the Tax Cut and Jobs Act (Public 

Law 115-97) may affect performance. 

In FY 2017, the IRS correctly answered 96 percent of account questions over the telephone, 

exceeding the target of 95 percent. The IRS expects to maintain high performance on the 
IRS-35 

Customer Accuracy – Accounts (Phones) and achieve the FY 2018 and FY 2019 target of 

95 percent. 

In FY 2017, the IRS Customer Contacts Resolved per Staff Year reached 25,535. This 

measure includes activities such as automated and assistor calls answered and web services 

completed. Due to modifications made to the Taxpayer Self-Assistance measure for FY 2017, 

several components of the Customer Contacts Resolved Per Staff Year measure changed, 

including: the way IRS counts transcripts, from “requested” to now counting “delivered;” the 

addition of Get Transcript; and the discontinuation of Electronic Interactions. Taxpayer 

behavior changes were observed in 2017 following the PATH Act (re: refund hold), and the 

IRS expects to see additional effects in 2018 and in 2019 due to tax reform. The IRS also 

continues to evaluate the impact of changes to the web services measure in FY 2017. The 

measure will be rebaselined for FY 2018. 

In FY 2017, the Customer Service Representative Level of Service (LOS) was 77.1 percent, 

exceeding the target of 64 percent. Level of Service was better than expected because fewer 

taxpayers called the IRS. Overall, the volume of callers to IRS toll free customer service was 

29 percent lower compared to FY 2016. IRS attributes the reduction in volume to the “Get 

Ready” communication campaign delivered throughout the fall of 2016. The IRS is using this 

approach in FY 2018. The IRS will continue to create detailed forecasts of expected 

telephone and correspondence demand and will monitor those projections against actual 

results. Staff will be shifted between telephones and paper processing as needed to achieve 

the planned goals. The FY 2018 LOS target is 75 percent. This target includes funding from 

discretionary base appropriations and $58 million from user fees. The FY 2019 target is 

47 percent and assumes at least $58 million from user fees. The 2019 filing season LOS is 

projected to be 55 percent. These targets take into account the potential impact of the Tax 

Cuts and Jobs Act (Public Law 115-97) on demand, which is still being evaluated. The IRS 

will develop more detailed user fee spend plans in FY 2018 and FY 2019 to address enacted 

funding levels and respond to changes in requirements. 

In FY 2017, Refund Timeliness reached 98.4 percent, exceeding the target of 97 percent as 

the number of paper refunds continued to decline as more taxpayers file electronically. 

During FY 2017, the IRS received 201 million tax returns and issued refunds and outlays 

totaling $467 billion. The IRS will continue to monitor individual return cycles and 

inventories to ensure targets are met. For FY 2018 and FY 2019, the IRS expects to achieve a 

target of 97 percent. 
IRS-36 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Filing and Account Services FTE Amount 

FY 2018 Annualized CR Level 22,526 $1,746,264 

Changes to Base 

Maintaining Current Levels (MCLs) $9,855 

Pay Annualization 7,129 

Non-Pay 2,726 

Efficiency/Savings (128) ($6,695) 

Increase e-File Savings (128) (6,695) 

Subtotal FY 2019 Changes to Base (128) $3,160 

FY 2019 Current Services 22,398 $1,749,424 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (2,307) (133,134) 

Subtotal FY 2019 Program Decreases (2,307) ($133,134) 

Program Increases 

Support Taxpayer Services and Online Account Activities 117 16,957 

Subtotal FY 2019 Program Increases 117 $16,957 

Total FY 2019 Request 20,208 $1,633,247 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.2 – Budget and Performance Report and Plan 

Filing and Account Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $1,532,963 $1,550,027 $1,564,488 $1,712,511 $1,848,711 $1,746,264 $1,633,247

Reimbursable Resources2 37,535 28,555 30,147 34,905 62,794 73,181 35,519

User Fees2 184,599 160,342 40,553 69,987 3,900 68,100 67,900

Budget Activity Total $1,755,097 $1,738,924 $1,635,188 $1,817,403 $1,915,405 $1,887,545 $1,736,666

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Filing and Account Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Percent Individual Returns Processed Electronically (Oe) (L) 82.5% 84.1% 85.3% 86.4% 86.9% 87.0% 88.0% 89.0%

Percent of Business Returns Processed Electronically (Oe) (L) 40.2% 43.1% 47.0% 50.0% 52.9% 51.0% 54.0% 56.0%

Customer Accuracy - Tax Law (Phones) (Ot) 95.7% 95.0% 95.0% 96.4% 96.7% 95.0% 95.0% 95.0%

Customer Accuracy - Accounts (Phones) (Ot) 96.0% 96.2% 95.5% 96.1% 96.0% 95.0% 95.0% 95.0%

Customer Contacts Resolved per Staff Year (E)

12 20,767 21,018 26,245 28,497 25,535 Baseline Baseline TBD

Customer Service Representative Level of Service (Oe) (L)

34 60.5% 64.4% 38.1% 53.4% 77.1% 64.0% 75.0% 47.0%

Refund Timeliness - Individual (Paper) (Ot) 99.0% 98.7% 98.8% 98.7% 98.4% 97.0% 97.0% 97.0%

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal

3

Beginning in FY 2013, targets include an increase in base user fees. 

4

Based on an updated assumption of IRS's FY 2018 funding level, expected LOS is 75%.

2

Starting in FY 2017, the IRS modified the Customer Contacts Resolved per Staff Year (CCRPSY) measure to include additional self-service channels. As new self-assistance applications are 

provided to the public, they will be added to the methodology. The IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expects to see additional impacts in 2018 

due to tax reform; in addition, the IRS continues to evaluate the impact of changes to the web services measure. CCRPSY will be rebaselined for FY 2018.

Dollars in thousands

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

1

Due to modifications made to the Taxpayer Self-Assistance Rate measure for FY 2017, several components of the Customer Contacts Resolved Per Staff measure will change. As a result of these 

changes, the measure will be baselined in FY 2017.
IRS-37 

Enforcement 

Appropriation Description 

The Enforcement appropriation provides funding for the examination of tax returns, both 

domestic and international; administrative and judicial settlement of taxpayer appeals of 

examination findings; technical rulings; monitoring of employee pension plans; determination 

of qualifications of organizations seeking tax-exempt status; examination of tax returns of 

exempt organizations; enforcement of statutes relating to detection and investigation of 

criminal violations of the internal revenue laws; identification of underreporting of tax 

obligations; securing of unfiled tax returns; and collection of unpaid accounts. 

The Enforcement budget request for FY 2019 is $4,628,204,000 in direct appropriations and 

34,662 FTE, excluding the proposed program integrity cap adjustment. This is an increase of 

$21,208,000, or 0.46 percent above the FY 2018 Annualized Continuing Resolution level of 

$4,606,996,000 and 34,662 FTE. 

 
IRS-38 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Enforcement 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 34,662 $4,606,996 

Changes to Base 

Maintaining Current Levels (MCLs) $26,598 

Pay Annualization 21,035 

Non-Pay Inflation Adjustment 5,563 

Subtotal FY 2019 Changes to Base $26,598 

FY 2019 Current Services 34,662 $4,633,594 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (5,390) 

Subtotal FY 2019 Program Decreases ($5,390) 

Total FY 2019 Budget Request 34,662 $4,628,204 

See footnotes in 1.1 – Appropriations Detail Table
IRS-39 

2.2 – Operating Levels Table 

Dollars in thousands 

Enforcement 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 3,087,675 3,008,283 3,022,409 

11.3 Other than Full-Time Permanent Positions 30,293 30,585 30,732 

11.5 Other Personnel Compensation 109,767 112,910 110,611 

11.8 Special Personal Services Payments 20,604 22,591 22,700 

11.9 Personnel Compensation (Total) 3,248,339 3,174,369 3,186,452 

12.1 Personnel Benefits 1,167,137 1,137,487 1,142,824 

13.0 Benefits to Former Personnel 572 534 537 

Total Personnel and Compensation Benefits $4,416,048 $4,312,390 $4,329,813 

21.0 Travel 56,428 60,170 61,124 

22.0 Transportation of Things 7,838 8,314 8,445 

23.1 Rental Payments to GSA 4 9 9 

23.2 Rent Payments to Others 298 361 367 

23.3 Communications, Utilities, & Misc 2,523 2,294 2,330 

24.0 Printing & Reproduction 1,951 2,237 2,273 

25.1 Advisory & Assistance Services 59,335 113,903 115,838 

25.2 Other Services 31,556 39,437 39,047 

25.3 Purchase of Goods & Services from Govt. Accounts 24,780 33,007 33,531 

25.4 Operation & Maintenance of Facilities 13 13 13 

25.6 Medical Care 49 7 7 

25.7 Operation & Maintenance of Equipment 1,500 2,761 2,805 

26.0 Supplies and Materials 20,210 23,354 23,725 

31.0 Equipment 8,408 7,532 7,651 

32.0 Land and Structures 449 3 3 

42.0 Insurance Claims & Indemnities 1,205 1,204 1,223 

44.0 Refunds 6 

91.0 Unvouchered 7,399 

Total Non-Personnel $223,952 $294,606 $298,391 

New Appropriated Resources $4,640,000 $4,606,996 $4,628,204 

Budget Activities 

Investigations 595,206 576,802 578,949 

Exam & Collections 3,914,546 3,874,918 3,893,373 

Regulatory 130,248 155,276 155,882 

New Appropriated Resources $4,640,000 $4,606,996 $4,628,204 

FTE 36,550 34,662 34,662 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-40 

2.3 – Appropriation Detail Table 

2C – Investigations ($578,949,000 in direct appropriations, and an estimated $32,769,000 

from reimbursable programs): This budget activity funds the Criminal Investigation (CI) 

programs that explore potential criminal and civil violations of tax laws; enforce criminal 

statutes relating to violations of tax laws and other financial crimes; and recommend 

prosecution as warranted. The program activities include: 

 General Management and Administration supports the headquarters management 

activities of strategic planning, communications, finance, and human resources for 

CI activities. 

 Identity Theft supports the Stolen Identity Refund Fraud (SIRF) inherent risks while 

focusing on high impact tax investigations, prosecutions to maximize deterrence, and 

stopping fraudulent refunds from being issued through CI's collaboration with internal 

and external business partners. 

 Criminal Investigations supports the enforcement of criminal statutes relating to 

violations of internal revenue laws and other financial crimes. CI investigates cases of 

suspected intent to defraud involving both legal and illegal sources of income and 

recommends prosecution as warranted. This includes the investigation and 

prosecution of tax and money-laundering violations associated with narcotics 

organizations. 

 Criminal Tax Legal Support provides legal advice and support. 

 International Investigations supports international investigations involving U.S. 

citizens residing abroad, non-resident aliens, expatriates (U.S. citizens living abroad 

who have renounced their citizenship), and investigations involving other international 

issues, including legal support (e.g., Foreign Tax Credit and Foreign Earned Income 

Exclusion, Corporations, Non-Profits, Pension Plans, etc.). 

 Cybersecurity supports CI’s cyber-efforts around inherent risks to IRS networks and 

systems while focusing enforcement and investigative actions on the criminals that 

Dollars in thousands

Enforcement

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Investigations 3,079 $595,206 2,913 576,802 2,913 578,949 2,147 0.37%

Exam and Collections 32,602 3,914,546 30,811 3,874,918 30,811 3,893,373 18,455 0.48%

Regulatory 869 130,248 938 155,276 938 155,882 606 0.39%

Subto tal N ew A ppro priated R eso urces 36,550 $ 4,640,000 34,662 $ 4,606,996 34,662 $ 4,628,204 $ 21,208 0.46%

Other Resources:

Reimbursables 59 34,228 53 33,566 55 33,932 2 366 3.77% 1.09%

Offsetting Collections - Non Reimbursables 16,407 16,407 17,227 820 5.00%

User Fees 90 9,537

Recovery from Prior Years 77 2,983 2,964 (19) -0.64%

Unobligated Balances from Prior Years 2 47,900 26,577 30,607 4,030 15.16%

Transfers In/Out 17

Resources from Other Accounts7 111

Subtotal Other Resources 152 $ 108,166 54 $ 79,533 56 $ 84,730 2 $ 5,197 3.70% 6.53%

T o tal B udgetary R eso urces 36,702 $ 4,748,166 34,716 $ 4,686,529 34,718 $ 4,712,934 2 $ 26,405 0.01% 0.56%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018

Annualized CR

F Y 2018 to F Y 2019 

Request

F Y 2018 to F Y 2019 

Request

F Y 2019

Request

% C hange

F Y 2017

Enacted

Change
IRS-41 

pose those threats. This activity also supports security program management that 

protects the safeguarding of all data and systems within CI while adhering to all 

federal regulatory security compliance mandates and local security policies. 

Description of Performance 

CI serves the American public by investigating potential criminal violations of the Internal 

Revenue Code and related financial crimes in a manner that fosters confidence in the tax 

system and compliance with the law. The following measures are used to evaluate the 

success of achieving its mission. 

In FY 2017, CI completed 3,089 criminal investigations, missing the year-end target by 

0.4 percent. The number of completions decreased 17 percent from FY 2016. CI has 

experienced a steady decrease in the number of special agents available to work cases (due to 

attrition and limited hiring) as well as a continued focus on existing judicial process inventory 

and traditional tax case programs, which tend to have a higher cycle time. Consequently, 

cases of Legal, Illegal and Narcotics nature completed decreased (22.5 percent, 13.2 percent 

and 12.3 percent, respectively) compared to the same period in FY 2016. Due to staffing, the 

IRS lowered its FY 2018 target to 3,000 completed investigations and 2,900 for FY 2019. 

In FY 2017, the target of 2,100 was achieved but the number of convictions was 13.9 percent 

lower than FY 2016 (2,300 vs. 2,672) due to attrition and limited hiring. Quality 

investigations initiated and completed in previous years continue to be recommended for 

prosecution and processed by the Department of Justice (DOJ). CI management will continue 

to work with the DOJ Tax Division and U.S. Attorney Offices regarding prosecutorial 

priorities and the appropriate movement of pipeline investigations. The IRS expects to 

achieve its target of 1,900 convictions for FY 2018 and 1,800 for FY 2019. 

The FY 2017 conviction rate was slightly lower than FY 2016 (91.5 percent vs. 92.1 percent), 

and below the year-end target of 92 percent due to attrition in upstream investigative 

positions, case complexity, and bandwidth at partner agencies. Nevertheless, appropriate case 

selection and effective field performance continue to positively affect the number of cases 

resulting in convictions and likely prevented a greater decrease in the rate. Acquittals and 

dismissals decreased by 20 percent and 5.7 percent, respectively, compared to FY 2016. 

Since CI does not prosecute its own cases, it must depend on the ability of the DOJ to accept 

its cases for prosecution and to move such cases through the courts. CI management will 

continue its current efforts of appropriate and consistent contact with DOJ Tax Division and 

U.S. Attorney Offices regarding prosecutorial priorities and the appropriate movement of 

pipeline investigations to ensure a high rate of conviction and to meet the FY 2018 and 

FY 2019 targets of 92 percent. 
IRS-42 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Investigations FTE Amount 

FY 2018 Annualized CR Level 2,913 $576,802 

Changes to Base 

Maintaining Current Levels (MCLs) $3,494 

Pay Annualization 2,575 

Non-Pay 919 

Subtotal FY 2019 Changes to Base $3,494 

FY 2019 Current Services 2,913 $580,296 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (1,347) 

Subtotal FY 2019 Program Decreases ($1,347) 

Total FY 2019 Request 2,913 $578,949 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.3 – Budget and Performance Report and Plan 

2D – Exam and Collections ($3,893,373,000 in direct appropriations and an estimated 

$986,000 from reimbursable programs): This budget activity funds programs that enforce the 

tax laws and increase compliance through examination and collection programs that ensure 

proper payment and tax reporting. This budget activity also includes campus support of the 

Questionable Refund program and appeals and litigation activities associated with exam and 

collection. The program activities include:

 Compliance Services Management supports management associated with exam and 

collection program activities. 

 Payment Compliance – Correspondence Collection supports IRS collection activities 

by initiating contact and collecting delinquent taxpayer liabilities through written 

notices and other means. 

 Automated Collections and Support initiates contact and collects delinquent taxpayer 

liabilities through the centralized Automated Collection System (ACS). 

Investigations FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $587,932 $601,740 $601,665 $591,449 $595,206 $576,802 $578,949

Reimbursable Resources2 28,582 27,133 29,957 29,053 33,618 31,209 32,769

User Fees2 2,979

Budget Activity Total $619,493 $628,873 $631,622 $620,502 $628,824 $608,011 $611,718

1

1The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Investigations FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Criminal Investigations Completed (Ot) (L) 5,557 4,606 4,486 3,721 3,089 3,100 3,000 2,900

Number of Convictions (Oe) (L) 3,311 3,110 2,879 2,672 2,300 2,100 1,900 1,800

Conviction Rate (Oe) (L) 93.1% 93.4% 93.2% 92.1% 91.5% 92.0% 92.0% 92.0%

Dollars in thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - 
IRS-43 

 Payment Compliance – Field Collection conducts field investigations and collection 

efforts associated with delinquent taxpayer and business entity liabilities, including 

direct taxpayer contact and outreach programs to protect the interest of the Federal 

Government in delinquent tax liability situations. 

 Tax Reporting Compliance – Document Matching supports the Automated 

Underreporter (AUR), Combined Annual Wage Reporting (CAWR), Federal 

Unemployment Tax Act (FUTA), and other Document Matching Programs. 

 Tax Reporting Compliance – Electronic/Correspondence Exam initiates written 

correspondence with taxpayers related to tax issues arising from claims on their tax 

returns. 

 Tax Reporting Compliance – Field Exam compares taxpayer income levels and 

corresponding tax liabilities to ensure the accuracy of taxpayer returns. 

 Fraud/Bank Secrecy Act enforces the anti-money laundering provisions of the Bank 

Secrecy Act of 1970 (BSA) and the USA Patriot Act of 2001. It examines non-bank 

financial institutions for compliance with these laws, receives and processes more than 

15 million financial reports annually, and manages a centralized database of that 

information for the Financial Crimes Enforcement Network. The Fraud program 

follows the money trail to support the criminal investigation of tax evasion operations. 

Fraud technical advisors and revenue agents provide investigative leads and referrals 

to federal, state, and local law enforcement agencies. 

 Appeals provides an administrative review process that provides a channel for 

impartial case settlement before a case is docketed in a court of law. 

 Litigation provides legal support for the IRS in litigation of cases, including 

interpretation of the tax law. 

 Specialty Programs – Exams examines federal tax returns of businesses and 

individuals responsible for the filing and payment of employment, excise, estate, and 

gift taxes. 

 International Collection supports international field collection efforts associated with 

delinquent taxpayer and business entity liabilities from U.S. citizens residing abroad, 

non-resident aliens, expatriates (U.S. citizens living abroad who have renounced their 

citizenship), and those involving other international issues (e.g., Foreign Tax Credit 

and Foreign Earned Income Exclusion). 

 International Exams supports the international exam program involving U.S. citizens 

residing abroad, non-resident aliens, expatriates, and other examinations involving 

other international issues including legal support (e.g., Foreign Tax Credit and Foreign 

Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.). 

 Unit General Management and Administration provides staffing, training, and direct 

support for headquarters management activities of strategic planning, communication 

and liaison, finance, human resources, equity, diversity and inclusion, business system 

planning, and embedded training. 

 EITC Management and Administration supports headquarters management associated 

with administering the Earned Income Tax Credit (EITC) program. 
IRS-44 

 Integrity & Verification Operations supports civil fraud detection and prevention 

efforts in a pre-refund environment including monitoring performance and developing 

policy, procedures, and guidance for processing civil revenue protection programs. 

 ID Theft Victim Assistance has end-to-end responsibility and accountability for 

identity theft victim assistance policy and operations, which will include paper 

inventories from tax-related ID theft, the Identity Theft Protection Specialized Unit 

(IPSU), and Return Preparer Misconduct. 

 Whistleblower Office provides staffing, training, and direct support to process, assess, 

and analyze tips from individuals who identify potential tax problems. 

 Communications and Liaison coordinates local government and liaison relationships; 

manages congressional, state, and national stakeholder relationships and issues; 

coordinates crosscutting issues, including audit management and legislative 

implementation; manages national media contacts and local media relationships; and 

ensures compliance with disclosure and privacy laws. 

Description of Performance – Exam 

The Examination program provides taxpayers service by helping them understand and meet 

their tax responsibilities and by applying the tax law with integrity and fairness. The 

performance goals the IRS uses to gauge the Examination program’s performance are: 

Individual Exam Coverage: target of 0.6 percent was met in FY 2017. About 120,000 fewer 

individual audits were completed, an 11.6 percent decrease compared to FY 2016. 

Examination sets its individual exam coverage rate by ensuring resources are appropriately 

planned for, proper inventory levels are maintained, and efficiencies are monitored to achieve 

planned targets. The IRS will maintain a target of 0.6 percent for FY 2018 and FY 2019. 

Field Exam National Quality Review Score: 85 percent in FY 2017, below the target of 

86.7 percent. The loss of experienced employees, cases transferred from examiner to 

examiner when employees leave their position, and the loss of permanent front-line managers 

are all factors that create quality challenges. To facilitate improvement in FY 2018, Exam is 

forming a joint quality team to analyze quality data trends and the influence of organization 

changes on quality scores. FY 2018 commitments proposed for Territory and Group 

Managers include refresher training on both Exam Technical Time Reports and Exam Process 

Reviews, as well as focused exam quality narratives on the lowest scoring attributes. The 

Small Business Self Employed (SB/SE) division also plans to implement an area-wide risk 

assessment to determine appropriate actions (i.e., close/reassign) upon case reassignment. It 

is expected that developing and communicating guidance at the group level will improve 

quality and customer satisfaction. Based on the most recent data and staffing, the IRS will set 

the FY 2018 target at 84.4 percent and the FY 2019 target at 86.7 percent. 

Office Exam Quality: 87.9 percent in FY 2017, above the target of 86.7. Improvement efforts 

included delivery of educational workshops, completion of case closing check sheets and the 

use of job aids. The IRS will maintain the FY 2018 target of 86.7 percent and will increase 

the FY 2019 target to 88.3 percent. 
IRS-45 

The Examination Quality – Large Business: 78 percent in FY 2017, 12 percentage points 

below the target of 90 percent. The 78 percent was a result of low scores in all three audit 

standards. The Large Business & International (LB&I) Quality Review and Analysis (QRA) 

division established a core team to develop and implement an action plan to assist the field 

examination operations in preparing quality case work in accordance with the Internal 

Revenue Manual. Many of the actions in the plan have already been implemented, including 

briefing all directors of Field Operations (DFOs) on scoring methodology and areas to focus 

on for improvement; preparing a quality kick-off memo from the LB&I Commissioner to 

emphasize the importance of quality review; drafting performance commitments for the DFO, 

territory manager, and frontline managers that incorporates case quality improvements; and 

providing briefings and educational presentations at field level meetings. Several other 

activities are underway, including a collaboration with statisticians from Research, Applied 

Analytics and Statistics to review and update the sampling methodology to improve accuracy. 

The FY 2018 and FY 2019 target is 90 percent. 

The Examination Coverage – Business (Assets > $10 million) measure is calculated by taking 

the total number of LB&I returns with assets of more than $10 million (including all 

partnerships) examined and closed by LB&I during the current fiscal year, divided by total 

filings for the preceding calendar year. In FY 2017, Business Examination Coverage was 

2.5 percent, below the target of 2.7 percent. Two factors combined to cause the coverage rate 

shortfall: 1) the actual number of return filings used in the denominator of the coverage rate 

calculation increased by 6 percent from original projection, resulting in a decrease of 

0.1 percent in the coverage rate; 2) the number of closed large business returns was 

1.5 percent less than had been projected and accounts for the remaining decrease of 

0.1 percent in the coverage rate. A decline in closures of the largest corporations was the 

primary cause of this decrease. The IRS will lower the FY 2018 target to 2.4 percent and FY 

2019 target to 1.8 percent, based on a 3 percent increase in projected return filings and a 

reduction in planned closures to account for taxpayers and agents affected by the hurricane 

disaster area declarations. Due to the recent hurricanes, tax returns for impacted taxpayers 

were placed in a freeze status prohibiting examination activity on these identified taxpayers 

until after January 31, 2018. To account for this five month suspension, 1.8 percent of the 

returns projected to close in FY 2018 will be delayed until FY 2019. At the same time, 

because employees that work in the declared disaster areas from the hurricanes were not 

available to start examinations, fewer returns were started that will be available to close for 

FY 2018. An additional decrease in the FY 2019 target is driven by a reduction in projected 

staffing from FY 2018 to FY 2019 of 6 percent. 

Individual Exam Efficiency (the number of closures divided by total Exam FTE) was 121, 

exceeding the FY 2017 target of 118. Based on prior year hiring and the most current FTE 

data available assuming no attrition or overtime, the IRS will raise the Individual Exam 

Efficiency target to 134 for FY 2018 and 129 for FY 2019. 

Automated Underreporter (AUR) Efficiency was 2,188 in FY 2017, exceeding the year-end 

target of 2,133. Although total AUR closures and FTEs decreased 5.2 percent and 

4.9 percent, respectively, compared to last year, efficiency was within 1 percent of FY 2016 

due to more staff than projected working inventory. The FY 2018 and FY 2019 level targets 

will remain at 2,133.
IRS-46 

AUR Coverage was 2.2 percent in FY 2017 and above the target of 2 percent due to more 

staff than projected working inventory. The IRS will lower the target to 1.9 percent for FY 

2018 and FY 2019 based on less staffing available to work cases. 

Description of Performance ‒ Collection 

The Collection program collects delinquent taxes and secures delinquent tax returns through 

the fair and equitable application of tax laws and provides education to customers to promote 

future compliance, thereby protecting and instilling public confidence in the American tax 

system. The performance goals the IRS uses to gauge collection program performance are: 

Collection Coverage was 42.2 percent in FY 2017, exceeding the target of 37.5 percent. Net 

dispositions decreased 5.5 percent compared to FY 2016 (20.6 million vs. 21.8 million). 

Beginning Inventory, and Returned to Inventory cases increased 3.6 percent and 19.7 percent, 

respectively, while New Issuance Receipts and Reissuances decreased 25.3 percent and 

69.1 percent, respectively. Contributing to the increase in Collection Coverage is an overall 

reduction in Collection Inventory of about 4.5 percent. A reduction in overall collection 

inventory further improves the Coverage rate. The IRS will set a target of 38.6 percent for 

FY 2018 and 36 percent in FY 2019 based on the most recent disposition and inventory 

projections. 

Collection Efficiency: FY 2017 was 2,135, exceeding the target of 2,117. Since FY 2013, due 

to staffing and resource constraints, FTEs decreased 16 percent while collection case closures 

only declined 13 percent. The Collection organization will continue to identify opportunities 

to increase productivity by streamlining processes and case selection in FY 2018. The 

planned reduction in overall inventory dispositions in FY 2018 is expected to affect overall 

Collection Efficiency. The IRS will set a target of 2,101 for FY 2018 and 2,029 for FY 2019. 

Field Collection Quality: FY 2017 was 76.7 percent, below the target of 79.7 percent. The 

shortfall in Field Collection Quality is primarily due to a decline in the following attributes: 

203 (Requested/Secured Financial Information), 432 (Verify/Analyze Ability to Pay), 

437 (Compliance), and 618 (Action Dates, Expectations, and Consequences). To address the 

shortfall and improve performance, Field Collection held consistency and workgroup review 

meetings with staff to identify quality review trends and review trends and process 

improvements. Focused communication and training materials were developed to drive 

improvements in casework. Field Collection also worked in FY 2017 to clarify 

documentation and Internal Review Manual sections that may have created confusion and 

negatively affected quality results, many of which have been implemented fully with 

additional changes coming in early FY 2018. To improve quality in the basic attributes, Field 

Collection collaborated with National Quality and Collection Headquarters to develop two 

short Podcasts to train Revenue Officers and managers on basic errors noted by managers and 

reviewers. Field Collection Quality anticipates launching the Podcasts starting in late October 

2018. The positive effect of these activities, along with advanced technical training scheduled 

for FY 2018 should result in improved quality scores.  With a continued emphasis on 

improving timeliness and the quality of work products, the IRS will set a target of 78 percent 

in FY 2018 and FY 2019. 
IRS-47 

Automatic Collection System (ACS) Accuracy: FY 2017 was 94.7 percent, slightly below the 

target of 95 percent. Results for this measure had been above 94 percent consistently since 

2008. Periodic performance reviews were conducted on the campus program and 

communicated to the sites. The top drivers of accuracy errors were analyzed and other quality 

issues were discussed with the Quality staff at the sites each month and this practice will 

continue. Additionally, training opportunities are recommended based on high rates of errors 

received and served as the basis for topics for the Continuing Professional Education 

seminars. The IRS will set a target of 95 percent in FY 2018 and FY 2019. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Exam and Collections FTE Amount 

FY 2018 Annualized CR Level 30,811 $3,874,918 

Changes to Base 

Maintaining Current Levels (MCLs) $22,185 

Pay Annualization 17,782 

Non-Pay 4,403 

Subtotal FY 2019 Changes to Base $22,185 

FY 2019 Current Services 30,811 $3,897,103 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (3,730) 

Subtotal FY 2019 Program Decreases ($3,730) 

Total FY 2019 Request 30,811 $3,893,373 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-48 

2.1.4 – Budget and Performance Report and Plan

2E – Regulatory ($155,882,000 in direct appropriations and an estimated $177,000 from 

reimbursable programs): This budget activity funds the development of published IRS 

guidance materials; interpretation of tax laws; internal advice to IRS on general non-tax legal 

issues; enforcement of regulatory rules, laws, and approved business practices; and support 

for taxpayers in the areas of pre-filing agreements, determination letters, and advance pricing 

agreements. The activities include: 

 Tax Law Interpretation and Published Guidance interprets tax law through published 

guidance, technical advice, and other technical legal services. 

 General Legal Services provides advice to the IRS on non-tax legal issues, including 

procurement, personnel, labor relations, equal employment opportunity, fiscal law, tort 

claims and damages, ethics, and conflict of interest. 

 Rulings and Agreements applies the tax law to specific taxpayers in the form of 

pre-filing agreements, determination letters, advance pricing agreements, and other 

pre-filing determinations and advice. 

 International Regulatory Legal Support supports Counsel’s work in tax law 

interpretation and rulings and agreements related to international issues. 

Exam and Collections FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $4,188,328 $4,154,342 $4,018,292 $3,945,578 $3,914,546 $3,874,918 $3,893,373

Reimbursable Resources2 804 640 456 450 2,189 986

User Fees2 36

Budget Activity Total $4,189,132 $4,154,342 $4,018,932 $3,946,070 $3,914,996 $3,877,107 $3,894,359

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Exam and Collections FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

Examination Coverage - Individual (Oe) (L) 1.0% 0.9% 0.8% 0.7% 0.6% 0.6% 0.6% 0.6%

Field Exam National Quality Review Score (Oe) (L) 89.2% 88.4% 86.7% 86.8% 85.0% 86.7% 84.4% 86.7%

Office Exam National Quality Review Score (Oe) (L) 90.3% 90.6% 88.3% 88.4% 87.9% 86.7% 86.7% 88.3%

Examination Quality - Large Business1 (Oe) (L)

92.0% 83.0% 86.0% 83.0% 78.0% 90.0% 90.0% 90.0%

(New in FY 2013)

Examination Coverage - Business (Assets > $10 million) (Oe) (L) 5.6% 4.3% 3.9% 3.0% 2.5% 2.7% 2.4% 1.8%

Automated Underreporter (AUR) Efficiency (E) (L) 2,025 1,935 2,209 2,196 2,188 2,133 2,133 2,133

Automated Underreporter (AUR) Coverage (E) (L) 2.8% 2.6% 2.3% 2.3% 2.2% 2.0% 1.9% 1.9%

Examination Efficiency - Individual (E) (L) 142 138 148 143 121 118 134 129

Collection Coverage - Units (Ot) (L) 47.0% 45.9% 46.3% 43.4% 42.2% 37.5% 38.6% 36.0%

Collection Efficiency - Units (E) (L) 2,057 2,051 2,448 2,266 2,135 2,117 2,101 2,029

Field Collection National Quality Review Score (Ot) (L) 81.4% 81.6% 79.2% 79.2% 76.7% 79.7% 78.0% 78.0%

Automated Collection System (ACS) Accuracy (Oe) 94.4% 95.2% 95.3% 95.4% 94.7% 95.0% 95.0% 95.0%

Dollars in thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, L - Long Term Goal, Ot - Output/Workload Measure

1

As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure will replace the 

two previous LB&I quality measures - Examination Quality - Industry and Coordinated Industry.
IRS-49 

 Return Preparer Strategy provides staffing, training, and direct support associated 

with the Return Preparer Strategy. 

 Office of Professional Responsibility identifies, communicates, and enforces Treasury 

Circular 230 standards of competence, integrity, and conduct of those who represent 

taxpayers before the IRS, including attorneys, Certified Public Accountants (CPAs), 

enrolled agents, enrolled actuaries and appraisers, and other professionals.

Description of Performance 

Tax Exempt and Government Entities (TEGE) Determination Closures includes both 

applications for tax-exempt status for employee retirement plans (EP) and applications from 

various charitable entities seeking tax-exempt status (EO). The IRS reviews applications to 

determine eligibility and closes them upon approval or disapproval. 

Total determination closures in FY 2017 completed was 102,749, exceeding the target of 

95,791 by 7.3 percent. Exempt Organization case closures exceeded the target primarily 

because of a higher than anticipated number of Form 1023-EZ, Streamlined Application for 

Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, receipts. 

Because the Form 1023-EZ requires less time to close, more cases were completed during the 

year. Employee Retirement Plan case closures exceeded plan by 29 percent because of a shift 

in focus to closing the simpler Form 5307, Application for Determination for Adopters of 

Modified Volume Submitter Plans, in lieu of Form 5300, Application for Determination for 

Employee Benefit Plan. 

TEGE anticipates a decrease in Exempt Organization case closures starting in FY 2018 and 

continuing into FY 2019. In addition to an expected increase in receipts, planned changes in 

the Form 1023-EZ will require additional hours to be applied to each case. TEGE expects to 

hire or detail in additional staff to help with reviewing the Form 1023-EZ to maintain closures 

of EO determination applications at historical levels. 

Additionally, TEGE anticipates experiencing a decrease in closures from Employee Plans in 

FY 2019 due to planned program changes that will result in fewer receipts of applications. 

Specifically, TEGE has stopped accepting applications to amend employee plans, which 

historically represented about 75 percent of the applications received in the program. TEGE 

expects to receive about 1,800 initial and termination applications per year, which previously 

accounted for about 25 percent of total receipts. Therefore, IRS lowered the FY 2018 

Determination Closures target to 94,103 and the FY 2019 target to 88,886. 

 
IRS-50 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Regulatory FTE Amount 

FY 2018 Annualized CR Level 938 $155,276 

Changes to Base 

Maintaining Current Levels (MCLs) $919 

Pay Annualization 678 

Non-Pay 241 

Subtotal FY 2019 Changes to Base $919 

FY 2019 Current Services 938 $156,195 

Program Changes 

Program Decreases 

Actions to Achieve Workforce Management Goals (313) 

Subtotal FY 2019 Program Decreases ($313) 

Total FY 2019 Request 938 $155,882 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.5 – Budget and Performance Report and Plan 

Regulatory FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $147,411 $158,415 $147,605 $137,245 $130,248 $155,276 $155,882

Reimbursable Resources2 631 792 363 202 160 168 177

User Fees2 14,521 13,241 18,485 9,233 9,537

Budget Activity Total $162,563 $172,448 $166,453 $146,680 $139,945 $155,444 $156,059

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Regulatory FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

TE/GE Determination Case Closures (Ot) 65,877 136,746 111,940 99,973 102,749 95,791 94,103 88,886

Key: Ot - Output/Workload Measure

Dollars in thousands
IRS-51 

Operations Support 

Appropriation Description 

The Operations Support appropriation provides funding for overall planning, direction, and 

support for the IRS, including shared service support related to facilities services, rent 

payments, printing, postage, and security. This appropriation funds headquarters policy and 

management activities such as corporate support for strategic planning; communications and 

liaison; finance; human resources; equity, diversity, and inclusion; research and statistics of 

income; and necessary expenses for information systems and telecommunication support, 

including development, security, and maintenance of the IRS’s information systems. 

The Operations Support budget request for FY 2019 is $4,155,796,000 in direct 

appropriations and 10,959 FTE, excluding the proposed program integrity cap adjustment. 

This is an increase of $241,808,000, or 6.18 percent, and 146 or 1.35 percent more FTE than 

the FY 2018 Annualized Continuing Resolution of $3,913,988,000 and 10,813 FTE. 
IRS-52 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Operations Support 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 10,813 $3,913,988 

Changes to Base 

Maintaining Current Levels (MCLs) $53,808 

Pay Annualization 7,823 

Non-Pay Inflation Adjustment 45,985 

Efficiencies/Savings (6,103) 

Increase e-File Savings (102) 

Space Optimization (6,001) 

Reinvestment $12,798 

Support Aging IT Infrastructure 12,798 

Subtotal FY 2019 Changes to Base $60,503 

FY 2019 Current Services 10,813 $3,974,491 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $181,305 

Strengthen Cyber Security 10 40,000 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 24,300 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 58,005 

Subtotal FY 2019 Program Increases 146 $181,305 

Total FY 2019 Budget Request 10,959 $4,155,796 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-53 

2.2 – Operating Levels Table 

Dollars in thousands 

Operations Support 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 1,090,951 1,152,588 1,173,685 

11.3 Other than Full-Time Permanent Positions 6,065 7,537 7,574 

11.5 Other Personnel Compensation 20,600 22,924 23,375 

11.8 Special Personal Services Payments 224 230 231 

11.9 Personnel Compensation (Total) 1,117,840 1,183,279 1,204,865 

12.1 Personnel Benefits 364,187 383,116 389,890 

13.0 Benefits to Former Personnel 59 56 56 

Total Personnel and Compensation Benefits $1,482,086 $1,566,451 $1,594,811 

21.0 Travel 11,467 16,915 17,487 

22.0 Transportation of Things 10,150 14,969 15,288 

23.1 Rental Payments to GSA 592,632 593,175 598,993 

23.2 Rent Payments to Others 11,905 12,367 12,606 

23.3 Communications, Utilities, & Misc 298,453 337,240 344,323 

24.0 Printing & Reproduction 17,676 18,535 18,924 

25.1 Advisory & Assistance Services 703,402 572,649 689,225 

25.2 Other Services 49,543 42,637 43,888 

25.3 Purchase of Goods & Services from Govt. Accounts 75,991 76,552 78,799 

25.4 Operation & Maintenance of Facilities 195,837 180,539 184,447 

25.5 Research & Development Contracts 21 

25.6 Medical Care 14,603 13,865 14,192 

25.7 Operation & Maintenance of Equipment 36,040 73,578 76,232 

26.0 Supplies and Materials 8,212 9,273 9,536 

31.0 Equipment 323,412 372,479 443,683 

32.0 Land and Structures 16,906 12,094 12,679 

42.0 Insurance Claims & Indemnities 910 670 683 

Total Non-Personnel $2,367,160 $2,347,537 $2,560,985 

New Appropriated Resources $3,849,246 $3,913,988 $4,155,796 

Budget Activities 

Infrastructure 869,732 847,444 860,058 

Shared Services & Support 991,504 994,559 1,005,911 

Information Services 1,988,010 2,071,985 2,289,827 

New Appropriated Resources $3,849,246 $3,913,988 $4,155,796 

FTE 10,835 10,813 10,959 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-54 

2.3 – Appropriation Detail Table 

2F – Infrastructure ($860,058,000 in direct appropriations and an estimated $711,000 from 

reimbursable programs): This budget activity funds administrative services related to space 

and housing, rent and space alterations, building services, maintenance, guard services, and 

non-IT equipment. The program activities include:

 Building Delegation oversees and manages the IRS GSA-delegated buildings, 

including cleaning, maintenance, utilities, protection, administrative, and recurring and 

one-time repair costs. 

 Rent provides resources for all IRS rent needs. The IRS will spend more an estimated 

$611 million on rental payments in FY 2019 to keep more than 300 Taxpayer 

Assistance Centers (TACs) open to the public and provide office space for more than 

70,000 employees across the country. 

 Space and Housing/Non-IT Equipment provides management of all IRS building 

services, maintenance, space alterations, guard services, custodial overtime, utility 

service needs, and non-IT equipment. 

 Security covers building security costs related to contract guard services. 

 

Dollars in thousands

Operations Support

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Infrastructure $869,732 847,444 860,058 12,614 1.49%

Shared Services and Support 4,777 991,504 4,588 994,559 4,588 1,005,911 11,352 1.14%

Information Services 6,058 1,988,010 6,225 2,071,985 6,371 2,289,827 146 217,842 2.35% 10.51%

Subto tal N ew A ppro priated R eso urces 10,835 $ 3,849,246 10,813 $ 3,913,988 10,959 $ 4,155,796 146 $ 241,808 1.35% 6.18%

Other Resources:

Reimbursables 86 55,135 85 65,632 74 42,847 (11) (22,785) -12.94% -34.72%

Offsetting Collections - Non Reimbursables

User Fees 202,584 397,000 397,000

Recovery from Prior Years 2,419 11,514 11,513 (1) -0.01%

Unobligated Balances from Prior Years 34 116,150 88,567 80,696 (7,871) -8.89%

Subtotal Other Resources 120 $ 376,288 85 $ 562,713 74 $ 532,056 (11) ($ 30,657) -12.94% -5.45%

T o tal B udgetary R eso urces 10,955 $ 4,225,534 10,898 $ 4,476,701 11,033 $ 4,687,852 135 $ 211,151 1.24% 4.72%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018 to F Y 2019 

Request

F Y 2019

Request 6,7

F Y 2018 to F Y 2019 

Request

C hange % C hange

F Y 2018

Annualized CR

F Y 2017

Enacted
IRS-55 

Description of Performance 

The IRS continued efforts to realize operational efficiencies and manage costs effectively by 

improving enterprise-wide resources and streamlining processes. 

Other than payroll, rent is the IRS's largest operating expense. The IRS has identified 

opportunities to reduce the cost of rent and improve its use of office space. In FY 2017, the 

IRS completed 37 projects to release more than 411,000 square feet of rented space for an 

annual rent reduction of over $10 million. As part of an effort to contain costs and improve 

space use, the IRS continued using the Strategic Facility Plan process, focused on closing or 

consolidating workspace at the time of lease expiration. Project identification of more space 

efficiency projects will continue in FY 2019 and into the future. 

Starting in FY 2017, the IRS introduced a Rentable Square Feet per Person (RSFP) indicator 

into the budget submission. For FY 2017, the RSFP was 297. Efforts leveraging telework 

and field activities to reduce demand for full-time office space has provided additional 

opportunities to reduce the IRS’s space footprint. The IRS also intends to place new hires in 

existing space and renew leases at existing sites rather than move to new locations when cost 

effective and when permitted by procurement regulations. These actions will help limit the 

projected rent costs in the future. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Infrastructure FTE Amount 

FY 2018 Annualized CR Level $847,444 

Changes to Base 

Maintaining Current Levels (MCLs) $16,425 

Pay Raise 

Pay Annualization 

Non-Pay 16,425 

Efficiency/Savings ($6,001) 

Increase e-File Savings 

Space Optimization (6,001) 

Reinvestment 

Support Aging IT Infrastructure 

Subtotal FY 2019 Changes to Base $10,424 

FY 2019 Current Services $857,868 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations $2,190 

Cyber Security 150 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 315 

Stabilize IT Operations 1,725 

Subtotal FY 2019 Program Increases $2,190 

Total FY 2019 Request $860,058 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-56 

2.1.6 – Budget and Performance Report and Plan 

 

2G – Shared Services and Support ($1,005,911,000 in direct appropriations, an estimated 

$21,399,000 from reimbursable programs, and an estimated $1,000,000 from user fees): This 

budget activity funds policy management, IRS-wide support for research, strategic planning, 

communications and liaison, protection of sensitive information and the privacy of taxpayers 

and employees, finance, human resources, and equity, diversity, and inclusion programs. It 

also funds printing and postage, business systems planning, physical security, legal services, 

and procurement. The program activities include: 

 National Headquarters Management and Administration directs the management 

activities of strategic planning, communications and liaison, finance, human resources, 

equity, diversity and inclusion programs, business systems planning, embedded 

training, and the Treasury Franchise Fund. It sets policies and goals, provides 

leadership and direction for the IRS, and builds partner relationships with key 

stakeholders (Congress, GAO, and OMB). It provides policy guidance for conducting 

planning and budgeting strategies, conducting analyses of programs and investments 

to support strategic decision-making, and developing and managing human resources. 

It also includes official reception and representation expenses. 

 Facilities Management & Security Services provides facilities and security services to 

deliver a safe, secure and optimal work environment to IRS customers and employees. 

 Procurement supports the procurement function of the IRS and Treasury’s 

Departmental Offices. 

 Equity, Diversity and Inclusion Field Services provides staffing, training, and direct 

support to plan and manage the IRS’s Equity, Diversity and Inclusion program. 

 Communications and Liaison handles congressional, national, and local stakeholder 

relationships and issues; coordinates and addresses crosscutting issues, including 

legislative implementation; works with representatives of the national and local tax 

community; communicates with individual and business taxpayers by developing 

information on IRS.gov and providing other taxpayer-facing content; handles national 

and local media contacts and relationships; and employee communications. 

 Employee Support Services plans and manages financial services, including relocation, 

travel, purchase cards, corporate express, and employee clearances. 

Infrastructure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $874,627 $845,558 $833,846 $838,048 $869,732 $847,444 $860,058

Reimbursable Resources2 701 16,694 928 626 634 677 711

User Fees2 5,414 17,137

Budget Activity Total $880,742 $879,389 $834,774 $838,674 $870,366 $848,121 $860,769

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Infrastructure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measure Actual Actual Actual Actual Actual Target Target Target

Rentable Square Feet per Person (new for FY 2017) 297 Indicator Indicator Indicator

Dollars in thousands

Key: Ot - Output/Workload Measure
IRS-57 

 Treasury Complaint Centers plan and manage the Treasury Complaint Centers. 

 Shared Support not provided by Agency-Wide Shared Services provides resources for 

shared cross-functional support, such as postage meters, shredders, courier services, 

and post office boxes. 

 Printing and Postage – Media and Publications provides operating divisions with 

printing and postage, including shipping of taxpayer and internal use materials. 

 Statistics of Income provides resources for researching annual income, financial, and 

tax data from tax returns filed by individuals, corporations, and tax-exempt 

organizations. 

 Research provides resources for market-based research to identify compliance issues, 

for conducting tests of treatments to address noncompliance, and for the 

implementation of successful strategies to address taxpayer noncompliance.

 Wage and Investment (W&I) Business Modernization Support provides staffing, 

training, and direct support for W&I’s enterprise-wide business modernization efforts, 

including CADE 2, and Account Management Services (AMS) technology solutions, 

and re-engineered business processes. 

 Shared Services provide support services for all IRS employees, including Treasury 

Franchise Fund, Indemnity payments, Mailrooms, Logistics, Shredding and 

Uninterrupted Power Systems. 

Description of Performance 

Human Capital 

The IRS workforce is our most important resource. By providing improved training and tools 

to all employees and developing future leaders, the IRS helps its workforce better serve 

taxpayer needs and guide the next generation of IRS employees. In FY 2017, the IRS: 

 Worked with all Treasury bureaus to procure a Treasury-wide Integrated Talent 

Management (ITM) system. This single human resource information technology 

system will support the processes designed to attract, manage, develop, motivate and 

retain talent. The IRS will be purchasing the Learning Management, Performance 

Management, Workforce Planning/Analytics and Succession Planning modules and 

retiring legacy systems. The ITM system will provide economies of scale to reduce 

costs, leverage evolving technology to make efforts faster/easier and provide a better 

picture of talent pipelines to improve decision making. 

 Improved workplace morale, empowerment, and satisfaction based on the FY 2017 

Federal Employee Viewpoint Survey (FEVS) results. Results show the IRS is above 

the 65 percent Office of Personnel Management target for the Engagement Index, and 

the scores for 68 out of 71 FEVS questions improved. The IRS engagement focus 

encompasses all employees (managers, executives and frontline employees). In 

addition, it provides guidance for all operating and functional units to model 
IRS-58 

engagement efforts. The Engagement and Retention office assisted the business units 

with planning and implementing more than 200 engagement actions in FY 2017. 

Security and Partnerships 

The IRS worked on several initiatives related to the Security Summit, a collaborative effort 

between the IRS, state tax administrators, and private-sector tax partners. In FY 2017, the 

IRS: 

 Engaged with tax software industry members and received data elements from both 

individual and business tax returns to improve taxpayer authentication and identify 

possible identity theft scams as part of the Security Summit effort; 

 Collaborated with the Security Summit team to develop a new process that would 

allow the IRS to post alerts into the Information Sharing & Analysis Center (ISAC) 

functionality; and 

 Collaborated with the Social Security Administration and the Department of the 

Treasury to coordinate a data sharing method and subsequently received 10.4 million 

prisoner records. After excluding incomplete and duplicate records, the IRS produced 

two million usable records to include into the IRS’s annual prisoner database. 

Research

During FY 2017, the IRS’s Office of Research, Applied Analytics, & Statistics (RAAS) 

developed the foundational framework for the first integrated enterprise research plan, 

launched a customer-driven project intake process, managed the National Research Program 

and secured approval for long-term sustained support in developing a hiring plan to build out 

IRS’s analytic footprint. 

 Secured input and buy-in from members of the Research Policy and Planning 

Committee and the Research Directors Coordinating Council on a set of eight core 

research priorities that will serve as the framework for the first IRS Enterprise 

Research Plan. Working with the embedded business unit research organizations, 

RAAS led an effort to align all of the approximately 500 active research projects to 

one of the following eight research priorities: Customer Service Channel 

Optimization, Impact of Legislative Mandates, Internal Process Operations 

Optimization, Noncompliance Management, Revenue Protection, Service-wide 

Treatment Optimization, Strategic Thinking and Planning, and Taxpayer and Tax 

Administration Research. These priorities support the goals and objectives reflected 

in the IRS 2018 – 2022 Strategic Plan under development. 

 Launched a new customer-focused, single-point-of-entry project intake process, 

received, and handled in a timely fashion more than forty new requests. In addition to 

regular executive staff meetings, RAAS held bi-weekly portfolio meetings to discuss 

the new project requests and held strategic conversations on the existing research 

portfolio of about 250 projects. 

 Analyzed reporting compliance data through the National Research Program (NRP) 

for various taxpayer populations, including Individual Income Tax, Corporate Income 
IRS-59 

Tax, Employment Taxes, and Fuel Excise Taxes. For FY 2017, NRP continued the 

individual income tax study and closed out the corporate, employment, and excise tax 

studies as data perfection and publication efforts are underway. The NRP initiated the 

Tax Year 2015 individual income tax study and small business classifiers reviewed 

and identified issues for examination on more than 7,000 cases. The NRP also 

conducted three additional classification sessions and final data perfection for Tax 

Year 2012 is complete and the information is being analyzed for publication. 

 Received approval to begin hiring to build out the IRS analytic footprint. This 

important long-term sustained support will aid RAAS in meeting its mission and 

vision to lead a data-driven culture through innovative and strategic research, 

analytics, statistics, and technology services to support effective and efficient tax 

administration in partnership with internal and external stakeholders as a 

world-leading applied taxation science organization. 

 
IRS-60 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Shared Services and Support FTE Amount 

FY 2018 Annualized CR Level 4,588 $994,559 

Changes to Base 

Maintaining Current Levels (MCLs) $10,364 

Pay Annualization 3,075 

Non-Pay 7,289 

Efficiency/Savings $13 

Increase e-File Savings 13 

Other Adjustments $11 

Base Adjustments 11 

Subtotal FY 2019 Changes to Base $10,388 

FY 2019 Current Services 4,588 $1,004,947 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations $964 

Cyber Security 66 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 139 

Stabilize IT Operations 759 

Subtotal FY 2019 Program Increases $964 

Total FY 2019 Request 4,588 $1,005,911 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.7 – Budget and Performance Report and Plan 

 

Shared Services and Support FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $1,097,565 $1,127,931 $1,126,230 $1,090,192 $991,504 $994,559 $1,005,911

Reimbursable Resources2 17,175 19,886 17,126 19,443 19,194 23,580 21,399

User Fees2 31,644 7,819 1,768 1,000 1,000 1,000 1,000

Budget Activity Total $1,146,384 $1,155,636 $1,145,124 $1,110,635 $1,011,698 $1,019,139 $1,028,310

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Dollars in thousands
IRS-61 

2H – Information Services ($2,289,827,000 in direct appropriations, $20,737,000 in 

reimbursable resources, and an estimated $396,000,000 from user fees): This budget activity 

funds staffing, equipment, and related costs to manage, maintain, and operate the information 

systems critical to the support of the tax administration programs including taxpayer service 

and enforcement programs. This includes the design and operation of IT security controls and 

disaster recovery planning. This budget activity funds the development and maintenance of 

the millions of lines of programming code that support all aspects and phases of tax 

processing and the operation and administration of mainframes, servers, personal computers, 

networks, and a variety of management information systems. This funding allows the IRS to 

maintain a complex ecosystem comprised of more than 500 applications that remain essential 

to tax administration until modernized. This funding also allows the IRS to operate one of the 

largest call centers in the country, which relies on telecommunications and network 

infrastructure funded through this budget activity. These call centers rely on IT systems and 

data that are key to all IRS functions. 

IT is responsible for information systems and technology, ranging from cyber security and 

networks to applications development and end user equipment and services. The program 

activities include: 

 Application Development performs the analysis, design, development, testing, and 

implementation of about 550 applications supporting tax processing, management 

information reporting, and financial management support systems. It supports 

external trading partner data exchanges with Federal Government agencies, state and 

local governments, and other third-party entities. It controls application source code 

and deploys applications to the production environment. 

 Cybersecurity delivers IT security services to ensure compliance with federal statutory 

and regulatory requirements governing confidentiality, integrity, and availability of 

electronic systems, services, and data. Cybersecurity tracks compliance, continuously 

monitors risk, and provides remediation to manage IT Security Program in accordance 

with the Federal Information Security Management Act. 

 Enterprise Operations designs, develops, and maintains IT that supports critical tax 

processing, management information reporting, and financial management support 

systems for the IRS. It supports data exchanges with external organizations, such as 

other federal agencies, state and local governments, and external entities (e.g., 

employers and banks), and includes a comprehensive disaster recovery capability to 

ensure continued operations in the event of a major interruption of service. 

 Enterprise Program Management Office (EPMO) manages the delivery of integrated 

solutions for several of the IRS’s large-scale programs. It plays a key role in 

establishing change, configuration, and release plans and implementing new system 

functional capabilities. The EPMO is the partner with the business for programs under 

their purview and works with IT delivery partners (AD, ES, EOPS and the other ACIO 

areas) to deliver capabilities. This positions each organization to maintain a strong 

core function to optimize their operations. 

 Enterprise Services plans and manages service and delivery methods used across the 

IT organization, including demand analysis, enterprise architecture, configuration 
IRS-62 

management, project reporting, enterprise life cycle management, release 

management, systems engineering, dashboard reporting, and internal management. 

 IT Executive Oversight supports the continued transformation of the IT organization 

while helping drive the successful implementation of multiple initiatives and is 

responsible for overseeing day-to-day operations of the organization and providing 

strategic and operational oversight for many functions within IT. 

 IT Infrastructure provides a centrally managed investment program for the 

replacement of IRS IT infrastructure that has reached or surpassed its useful life cycle. 

 Strategy and Planning collaborates with IT leadership to provide policy, direction, and 

administration of essential programs, including strategy and capital planning, strategic 

planning and performance measurement, financial management services, vendor and 

contract management, requirements and demand management, and risk management. 

The organization partners with IRS leadership and external stakeholders to ensure 

selection, planning and management of an IT investment portfolio that is driven by the 

strategic priorities of the IRS and demonstrates business value. 

 Treasury Franchise Fund (TFF) is a centralized program that pays for services IT 

receives from Treasury through the Treasury Franchise Fund. 

 User and Network Services (UNS) provides end-user support in accordance with 

negotiated service level agreements, strategic direction, forecasting, planning and 

oversight of IT business needs, and ensures compliance with government security 

regulations. UNS supplies and maintains all desk-side technology, equips the 

Volunteer Income Tax Assistance Program; establishes and provides oversight of 

hardware and software standards; and manages the architecture, design, and 

engineering of the IRS network infrastructure. 

Description of Performance 

All IRS programs rely heavily on information systems funded in this account. These systems 

process tax and information returns, account for tax revenues collected, send bills for taxes 

owed, issue refunds, assist in the selection of tax returns for audit, and provide 

telecommunication services. It also funds disaster recovery activities to ensure continued 

operations in the event of a major interruption of service. 

In FY 2017, the IRS: 

 Deployed additional FATCA information technology capabilities in support of 

legislative mandates. The new functionality improves Foreign Account Tax 

Compliance Act (FATCA) forms, reporting features, and overall interfaces. For the 

first time, technology allows entities to enter an agreement with the IRS to become a 

Qualified Intermediary (QI), Withholding Foreign Partnership (WP), or a Withholding 

Foreign Trust (WT) via an electronic system. This release allows QI/WP/WTs to 

maintain account information, as well as apply, renew, or terminate agreements with 

the IRS electronically. As of the September 30, 2017 due date for renewals, nearly 

4,600 QIs, WPs and WTs had used the new application to renew their agreements. In 
IRS-63 

addition, about 290,000 foreign financial institutions (FFIs) registered with the IRS 

and received a global intermediary identification number (GIIN) via the FFI 

Registration application. More than 6,500 financial institutions and 97 host country 

tax authorities enrolled in the International Data Exchange Service (IDES) to submit 

FATCA information returns to the IRS, and more than 550 QIs completed their online 

application via the QI application. 

 Worked with Security Summit partners from state tax agencies and the broader tax 

community to add extra layers of security for the filing season; processed 201 million 

returns and billions of dollars in tax refunds with these security protections in place; 

 Acquired the infrastructure to support a multilayered defense architecture to provide 

the Computer Security Incident Response Center (CSIRC) and the Insider Threat 

Operations team the ability to leverage powerful analytic applications to improve 

investigation effectiveness; 

 Continued to build robust cybersecurity programs to improve the identification and 

prevention of refund fraud and identity theft and to enhance cybersecurity to safeguard 

taxpayer data; 

 Detected and mitigated 1,305 phishing and malware sites. During this time, the IRS 

identified and responded to 542 cyber incidents of which 128 incidents (about 

24 percent) involved removable media, email, and web-based activity. The IRS also 

implemented 1,876 content filtering restrictions to mitigate Internet content deemed a 

security risk to IRS information systems. Despite these incidents, IRS systems remain 

secure; 

 The improvements enhanced the IRS’s ability to handle data from the insurance 

marketplaces, allowing the IRS to process more than two times the number of bulk 

files as in prior years, resulting in increased responsiveness to the Health and Human 

Services/Centers for Medicare & Medicaid Services and state exchanges; and 

 Completed information technology system upgrades related to Affordable Care Act 

that improved both the stability and capacity of the processing systems. The 

improvements enhanced the IRS’s ability to handle data from the insurance 

marketplaces, allowing the IRS to process more than two times the number of bulk 

files as in prior years, resulting in increased responsiveness to the Health and Human 

Services/Centers for Medicare & Medicaid Services and state exchanges. 

Security 

Security of taxpayer data and providing a secure environment for employees are of utmost 

importance to the IRS. In FY 2017, the IRS: 
IRS-64 

 Enhanced the security of its networks through the use of cyber-threat forensics, 

implementation of a comprehensive patch management system, and the adoption of 

government-wide information security continuous monitoring tools as part of a 

layered defense. In addition, the IRS is instituting multiple layers of electronic 

authentication at the time of filing. Investments and activities in this area help combat 

stolen identity refund fraud and include detection and prevention assistance to victims 

and law enforcement; and 

 Improved authentication for online taxpayer services by adding more applications 

behind Secure Access, a tool that enhances security while providing greater access for 

legitimate taxpayers and improving the customer experience. The IRS stood up the 

Secure Access e-Authentication capability to protect the Get Transcript Online 

application in June 2016. Since then, the IRS has added several applications behind 

Secure Access, including Identity Protection Personal Identification Number (IP PIN), 

the Taxpayer Digital Communications pilot, Qualified Intermediary Registration and 

Management, and Online Account with functions such as See Balance Due and a link 

to Make a Payment. 

 
IRS-65 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Information Services FTE Amount 

FY 2018 Annualized CR Level 6,225 $2,071,985 

Changes to Base 

Maintaining Current Levels (MCLs) $27,019 

Pay Annualization 4,748 

Non-Pay 22,271 

Efficiency/Savings ($115) 

Increase e-File Savings (115) 

Reinvestment $12,798 

Support Aging IT Infrastructure 12,798 

Other Adjustments ($11) 

Base Adjustments (11) 

Subtotal FY 2019 Changes to Base $39,691 

FY 2019 Current Services 6,225 $2,111,676 

Program Changes 

Program Increases 

Stabilize, Secure and Transform IT Operations 146 $178,151 

Cyber Security 10 39,784 

Identity Assurance - e-Authentication Enhancements and Authorization Integration 21 23,846 

Aging Technology Infrastructure 39,000 

Migration to Cloud Services 20,000 

Stabilize IT Operations 115 55,521 

Subtotal FY 2019 Program Increases 146 $178,151 

Total FY 2019 Request 6,371 $2,289,827 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.8 – Budget and Performance Report and Plan 

Information Services FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources1 $1,722,172 $1,749,110 $1,641,360 $1,883,667 $1,988,010 $2,071,985 $2,289,827

Reimbursable Resources2 8,850 4,734 24,262 19,660 35,307 41,375 20,737

User Fees2 145,027 198,206 373,610 263,250 201,584 396,000 396,000

Budget Activity Total $1,876,049 $1,952,050 $2,039,232 $2,166,577 $2,224,901 $2,509,360 $2,706,564

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursables and user fees.

Dollars in thousands
IRS-66 

Business Systems Modernization 

Appropriation Description 

The Business Systems Modernization (BSM) appropriation provides resources for the 

planning and capital asset acquisition of IT to modernize the IRS business systems. 

The BSM budget request for FY 2019 is $110,000,000 in direct appropriations and 516 FTE. 

This is a decrease of $178,031,000, or 61.81 percent less than the FY 2018 Annualized 

Continuing Resolution level of $288,031,000. 
IRS-67 

2.1 – Budget Adjustments Table 

Dollars in thousands 

Business Systems Modernization 

 

Summary of Proposed FY 2019 Request FTE Amount 

FY 2018 Annualized CR Level 516 $288,031 

Changes to Base 

Maintaining Current Levels (MCLs) $172 

Pay Annualization 172 

Subtotal FY 2019 Changes to Base $172 

FY 2019 Current Services 516 $288,203 

Program Changes 

Program Decreases 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases ($178,203) 

Total FY 2019 Budget Request 516 $110,000 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-68 

2.2 – Operating Levels Table 

Dollars in thousands 

Business Systems Modernization 

Object Classification 

FY 2017 

Enacted 

FY 2018 

Annualized CR 

FY 2019 

Request 

11.1 Full-Time Permanent Positions 70,301 64,453 63,974 

11.3 Other than Full-Time Permanent Positions 1,115 103 74 

11.5 Other Personnel Compensation 1,000 935 1,114 

11.9 Personnel Compensation (Total) 72,416 65,491 65,162 

12.1 Personnel Benefits 21,848 19,409 19,051 

Total Personnel and Compensation Benefits $94,264 $84,900 $84,213 

21.0 Travel 204 330 306 

25.1 Advisory & Assistance Services 193,374 173,429 22,452 

25.2 Other Services 148 25 19 

25.3 Purchase of Goods & Services from Govt. Accounts 11 9 7 

25.7 Operation & Maintenance of Equipment 296 2,168 309 

26.0 Supplies and Materials 20 7 6 

31.0 Equipment 1,683 27,163 2,688 

Total Non-Personnel $195,736 $203,131 $25,787 

New Appropriated Resources $290,000 $288,031 $110,000 

Budget Activities 

Business Systems Modernization 290,000 288,031 110,000 

New Appropriated Resources $290,000 $288,031 $110,000 

FTE 557 516 516 

See footnotes in 1.1 – Appropriations Detail Table 
IRS-69 

2.3 – Appropriation Detail Table 

2I – Business Systems Modernization ($110,000,000 in direct appropriations, and 

$34,000,000 in user fees): This budget activity funds the planning and capital asset 

acquisition of information technology (IT) to modernize IRS business systems, including 

labor and related contractual costs.

BSM uses best practices and expertise in business solutions and internal management to 

develop a world-class tax administration system. The following projects are supported by the 

FY 2019 BSM request of $110 million in direct appropriations and $34 million in user fees: 

Customer Account Data Engine 2 (CADE2) +$40.3 million (+$30.3 million in direct 

appropriation / +189 FTE and +$10.0 million user fees): These funds will be used to 

establish the foundation for a modernized tax processing engine by converting the core 

Individual Master File functions of posting, settlement, and analysis (runs 12 and 15) into 

Java-based programs and continue efforts to make CADE 2 the legal and financial 

authoritative source of individual taxpayer data. 

 

Enterprise Case Management (ECM) +$23.5 million (+$9.5 million in direct appropriations / 

+57 FTE, and +$14.0 million user fees): ECM is a business-driven transformation program 

that will address the need to modernize, upgrade, and consolidate case management systems 

with similar functionality that are running in the IRS ecosystem today. The IRS has over 

60 legacy case management systems with similar functionality. Historically, these were 

developed for individual Business Operating Divisions, as stand-alone systems. This project 

will consolidate case management systems onto an enterprise platform with common 

infrastructure, with common Business functions and services. The IRS expects taxpayer and 

operational benefits by making more case information available to front-line IRS employees 

to simplify interactions between the IRS and taxpayers. 

In FY 2019, ECM plans to develop a Roadmap to the ECM Target State via a series of ECM 

Transition States and initiate development of the first program release. This will begin the 

process of migrating business capabilities to the new platform. 

Enterprise Case Selection (ECS) +$2.5 million in direct appropriations / +15 FTE: The ECS 

program will implement an enterprise solution for performing case selection functions using a 

common infrastructure platform and common services that will be leveraged across the IRS. 

The ECS program will increase operational efficiencies by consolidating separate case 

Dollars in thousands

B usiness Systems M o dernizatio n

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

Business Systems M odernization 557 $290,000 557 166,263 516 288,031 516 110,000 (178,031) -61.81%

Subto tal N ew A ppro priated R eso urces 557 $ 290,000 557 $ 166,263 516 $ 288,031 516 $ 110,000 ($ 178,031) -61.81%

Other Resources:

User Fees 25,464 34,000 34,000

Recovery from Prior Years 3,854 3,854

Unobligated Balances from Prior Years 123,010 190,671 236,919 46,248 24.26%

Subtotal Other Resources $ 148,474 $ 228,525 $ 274,773 $ 46,248 20.24%

T o tal B udgetary R eso urces 557 $ 438,474 557 $ 166,263 516 $ 516,556 516 $ 384,773 ($ 131,783) -25.51%

1See footnotes in 1.1 – Appropriations Detail Table

F Y 2018

Annualized CR

F Y 2017

Enacted

F Y 2017

Actual

C hange % C hange

F Y 2018 to F Y 2019 

Request

F Y 2018 to F Y 2019 

Request

F Y 2019

Request
IRS-70 

selection functions and by identifying the best cases allowing the IRS to use resources more 

effectively. 

Return Review Program (RRP) +$8.4 million in direct appropriations / +48 FTE: RRP 

provides leading-edge technologies to advance the IRS effectiveness in detecting, addressing, 

and preventing tax refund fraud and protecting U.S. Treasury revenue. The RRP fraud 

framework is critical for IRS’ success in tackling ever-evolving tax schemes in a 

sophisticated, scalable and adaptable manner. Investment in RRP will continue to improve 

and expand analytical capabilities that protect increasing levels of revenue from individual 

and business tax return fraud, non-compliance, and other enterprise anomaly 

detection. Additionally, IRS will implement value-driven enhancements based on Business 

priorities, enabling other business customers to explore and use RRP for anomaly detection 

business processes. 

Web Applications +$25.1 million (+$15.1 million in direct appropriations / +96 FTE, and 

+$10 million user fees): Web Apps will simplify the taxpayer’s online experience, provide 

secure digital communications, and add more interactive capabilities to existing web 

self-service products. This will allow taxpayers to resolve more issues online, requiring fewer 

direct interactions with the IRS over the telephone and in person. 

In FY 2019, Web Applications will continue to develop and deploy new capabilities selected 

by the program’s product prioritization process. Anticipated functionalities include the ThirdParty Access Tool (TPAT), to permit access for authorized third parties to view and manage a 

taxpayer’s online account, and Third-Party Refund application program interface, to increase 

the number of tax services available to third parties and expand the definition of third party to 

include other federal and state government agencies, as well as commercial tax preparers. 

Additionally, Web Applications will continue to provide a user-centric, data-informed 

approach to ensure that taxpayer information is being presented and provided in a way that is 

easy for a taxpayer to interpret. This will include the release of new and continuing 

applications providing a wide variety of services to the taxpayer that will provide a better user 

experience, clearer content, an enhanced portal, and more robust analytics to continuously 

improve the taxpayer experience. 

Architecture, Integration and Management (AI&M) +$19.7 million in direct appropriations / 

+42 FTE: AIM provides engineering management capabilities essential to delivering a 

program of BSM’s magnitude and complexity. It also delivers IRS systems strategy, 

architecture, and engineering capabilities for the major modernization projects across all 

technology platforms--IT Infrastructure, Business Applications, Data Management, and IT 

Security. The AI&M program translates enterprise and project objectives into targeted, 

actionable investments to provide the framework and direction for cohesive, successful 

modernization. 

Core Infrastructure +$19.5 million in direct appropriations / +69 FTE: Core Infrastructure 

provides mission-critical services for designing, engineering, testing, and deploying 

standardized, consolidated, virtual, and secure modernized development and production 

environments for use by BSM projects. This support effort scales with the development 

projects in the BSM portfolio. 
IRS-71 

The IRS is modernizing taxpayer applications to web-based technologies that allow taxpayers 

to communicate with the IRS using commercially available technology. The modernized 

infrastructure provides a complete environment (hardware, software, processes, and 

management) for developing, testing, deploying, operating, and monitoring both customer and 

internal applications in support of business practices. This includes continuing to update the 

web portal environment and standardizing services, security, and operations management. 

This approach facilitates the IRS’s ability to develop a shared infrastructure and common 

business service solutions that are usable across multiple BSM projects. 

Management Reserve +$5 million in direct appropriations 

The management reserve funds allow the IRS to cover unanticipated cost adjustments. 

 
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Description of Performance 

The IRS’s modernization efforts focus on building and deploying advanced information 

technology systems, processes, and tools to improve efficiency and productivity. IRS 

performance metrics are described quarterly and in greater detail in the BSM IT 

Modernization report. 

Percent of Major IT Investments within +/- 10 percent Cost Variance at the Investment 

Level: Nine of 18 major investments (50 percent) were within the cost variance threshold at 

the end of FY 2017 and below the 90 percent target. Shown below are the Investments falling 

short of the Cost Variance target. 

 Affordable Care Act Administration (ACA) had a much lower actual cost versus 

planned cost associated with milestone 4B.4. 

 Customer Account Data Engine 2 (CADE 2) cost underrun is due to project 

activities associated with release 4 and 5 being stopped due to budgetary constraints. 

 e‐Services (e‐SVS) had lower than expected cost due to fewer than expected 

legislative changes. 

 Enterprise Case Management (ECM) shows a variance because the ECM 

governance board approved halting the development efforts for ECM fraud case 

management. 

 Integrated Financial System/CORE Financial System (IFS) shows a cost overrun 

due to a software acquisition expense that was planned in milestones 1 and 2 but 

didn’t happen until milestones 3 and 4a due to procurement competition that took 

longer than planned. 

 IRS Mainframes and Servers Services and Support (MSSS) displays a cost 

underrun due to activities being closed out or put on hold due to budgetary constraints. 

 IRS Telecommunications Systems and Support (TSS) had a cost underrun due to 

several activities costing less than planned. 

 Return Review Program (RRP) is showing a cost underrun due to the reporting 

portion of the Reporting and Transaction Processing (RTP) functionality being 

deferred to a future release. 

 Web Applications is showing over budget due to the baseline not reflecting the 

funded budget (funded higher than baseline). 

Fiscal Year

Percent within +/- 10% 

Cost Variance

Percent within +/- 10%

Schedule Variance

2017 50.0 % 88.9 %

Major IT (BSM and Non-BSM) Investments
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Percent of Major IT Investments within +/- 10 percent Schedule Variance at the 

Investment Level: Sixteen of 18 major investments (88.9 percent) were within the schedule 

variance threshold at the end of FY 2017. Shown below are the Investments falling short of 

the Schedule Varian target. 

 Individual Master File (IMF) is ahead of schedule due to filing season activities 

being completed before their projected timeframes.

 IRS Mainframes and Servers Services and Support (MSSS) displays a schedule 

variance due to activities being closed out or put on hold due to budgetary constraints.

IRS IT will continue to monitor program activities closely and address any issues associated 

with cost/schedule on a timely basis to meet the FY 2018 and FY 2019 target of 90 percent. 

FY 2019 Changes by Budget Activity 

Dollars in thousands 

Business Systems Modernization FTE Amount 

FY 2018 Annualized CR Level 516 $288,031 

Changes to Base 

Maintaining Current Levels (MCLs) $172 

Pay Annualization 172 

Subtotal FY 2019 Changes to Base $172 

FY 2019 Current Services 516 $288,203 

Program Changes 

Program Decreases 

Realignment from BSM to Operations Support (178,203) 

Subtotal FY 2019 Program Decreases ($178,203) 

Total FY 2019 Request 516 $110,000 

See footnotes in 1.1 – Appropriations Detail Table 

2.1.9 – Budget and Performance Report and Plan		

Business Systems Modernization FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Resource Level Actual Actual Actual Actual Enacted Annualized CR Request

Appropriated Resources1 $198,205 $145,235 $107,746 $190,945 $290,000 $288,031 $110,000

Reimbursable Resources2

User Fees 25,464 34,000 34,000

Budget Activity Total $198,205 $145,235 $107,746 $190,945 $315,464 $322,031 $144,000

1

The FY 2013 - FY 2017 appropriated resources line represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2013 - FY 2017 columns represent realized resources for reimbursable resources and user fees.

Business Systems Modernization FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Measures Actual Actual Actual Actual Actual Target Target Target

0.0% 66.7% 73.7% 76.2% 50.0% 90.0% 90.0% 90.0%

83.3% 100.0% 89.5% 85.7% 88.9% 90.0% 90.0% 90.0%

Key: E - Efficiency Measure

Dollars in thousands

1

Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

Percent of Major IT Investments within +/- 10% Schedule Variance at 

the Investment Level1

Percent of Major IT Investments within +/- 10% Cost Variance at the 

Investment Level1
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Section III – Supplemental Information 

3.1 – Summary of Capital Investments 

A summary of capital investment resources, including major information technology and 

non-technology investments, can be viewed/downloaded at: 

http://www.treasury.gov/about/budget-performance/pages/summary-of-capitalinvestments.aspx. 

This website also contains a digital copy of this document. 

3A – Capital Investment Strategy 

The IRS capital investment strategy translates the IRS’s business vision into the required 

technical capabilities, and structures a set of IT investments that will advance those capabilities. 

The IRS is developing a strategic, enterprise-wide planning initiative that describes the IRS 

vision for interacting with taxpayers and stakeholders in a more timely and open manner by 

understanding and meeting taxpayer needs, promoting voluntary compliance, and detecting, 

deterring, and resolving non-compliance. Figure 1 illustrates the relationships between the 

Strategic Plan goals and future capabilities and initiatives. 

The IRS Technology Roadmap: Uses enterprise architecture planning and visualization 

methods to depict and describe the future direction of IRS technology in terms of advancing 

capabilities, modernizing applications and technical services, and upgrading the technology 

product environment through a set of programs and projects and new approaches such as Agile 

development and DevOps. It uses a set of models and visualizations to show the transition from 

the current environment to the future technology vision. It promotes dialogue between IT and 

business leaders on the priorities, direction and alignment of investments and resources. It is a 

living document that is reviewed and updated as appropriate. As depicted in Figure 2, the 

Technology Roadmap is structured around six core IRS business areas (Intake, Account 
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Management, Compliance, Case Management, Customer Service, and Internal Operations) and 

four technical areas (Data, Service Orchestration, Infrastructure, and Security). 

To move efficiently and effectively toward the technology vision described in the Technology 

Roadmap, the IRS IT organization has developed its IT Vision to articulate and formalize key 

themes and goals essential to IT’s performance as a world-class service provider to its business 

partners. This vision, summarized in Figure 3, emphasizes a strong and well-equipped 

workforce, agile and efficient service delivery processes, data-driven operations and 

decision-making, and a critical focus on cybersecurity. The IT Vision is further augmented by a 

set of architectural principles, also summarized in the diagram below, to guide appropriate 

investment decisions, and to acquire, design, build, and implement technology solutions. 
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In the current budget planning and investment cycle, IRS IT has identified several cross-cutting 

strategic IT initiatives and major programs, described below. 

Cloud: In response to the U.S. CIO directive of a ‘cloud first’ policy, the IRS is defining and 

implementing a cloud strategy to adopt cloud technologies that enable the delivery of secure, 

agile, and efficient service offerings to the enterprise and the taxpayer. This move toward 

enterprise-wide cloud adoption will provide the IRS with convenient, on-demand network 

access to a shared pool of configurable computing resources (e.g., networks, servers, storage, 

applications, and services) that can be provisioned rapidly and released with minimal 

management effort or service provider interaction. Expected IRS benefits include: more agile 

infrastructure procurements; reduced operational overhead; more efficient resource sharing; and 

improved infrastructure currency. 

DevOps: DevOps is an emerging software engineering practice that aims to unify the software 

development and operation processes, teams, and communications. The IRS’s shift toward a 

DevOps culture requires changes to workflow, infrastructure management, solution creation, 

and deployment. IRS IT is addressing DevOps through six practice areas: Configuration 

Management, Continuous Integration, Automated Testing, Software Defined Infrastructure, 

Continuous Delivery, and Continuous Monitoring. Expected IRS benefits include: improved 

internal IT and stakeholder collaboration; faster delivery through compressed cycles; improved 

quality through better testing; and enhanced transparency to manage risks. 

Data Strategy: Combating identity theft, detecting tax filing issues more quickly, improving 

taxpayer service, and optimizing compliance and enforcement actions require robust, secure, 

and integrated data capture, storage, processing, and analytics capabilities. The current IRS data 

environment is constrained in its ability to provide a holistic and secure taxpayer data view for 

emerging tax administration and compliance needs. The IRS is assessing and redesigning its 
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data strategy and architecture to harness key industry trends more fully, such as big data 

technologies, self-service analytics, data lakes, and cognitive computing. Expected IRS benefits 

include: improved insights from data through analytics, reduced data movement and duplication 

to maximize performance and scalability, improved enterprise data standardization and 

integration, and security of data at rest and in motion. 

NextGen Infrastructure: At the foundation of the IRS’s critical systems and data is an 

infrastructure base (i.e., hardware, software, programming languages) that is aged and in need 

of modernization, which puts the American tax system at risk of failure. Such conditions 

introduce security risks, excessive system downtime, elimination of vendor support, and 

incompatibilities across systems and programs. The IRS Executive Risk Committee elevated 

the aging IRS technology infrastructure as the highest-priority enterprise risk. To address this 

challenge, the IRS is shifting towards cloud computing, hyper-converged and composable 

infrastructure, hybrid on-premises / cloud infrastructure environment, and continuous operations 

monitoring technologies. Key IRS benefits include: increased IT infrastructure availability and 

reliability; enhanced business continuity and disaster recovery; reduced IT asset cost and 

operational expenses; and faster, more scalable, and efficient IT service delivery. 

Application Program Interface (API) Strategy: The IRS is defining and implementing an 

API strategy to enable rapid creation of reusable granular APIs to export key sets of data. To 

address its complex landscape of 500+ legacy applications and aging technology, the IRS is 

developing a scalable application and data integration approach to support emerging tax 

administration and compliance requirements. Harnessing industry advances such as micro 

service APIs and their scalability through containerization and cloud computing, the IRS API 

strategy focuses on providing a platform of reusable APIs that are individually scalable and 

fault tolerant. Key IRS benefits include: increased reuse of software functionality in many 

different contexts; improved agility in meeting user needs; accelerated deployment of new 

capabilities; and reduction of redundant functionality. 

Cybersecurity Strategy: The IRS’s mission of tax administration relies heavily upon the 

confidentiality, integrity and availability of information to achieve mission objectives. It is 

imperative that the IRS implement and sustain a robust security strategy in an ever-evolving 

threat and technology environment. Congress and the Administration have made cybersecurity 

one of their highest priorities. The IRS is adopting a proactive and analytics-driven approach to 

implement new offensive and defensive strategies to meet emerging security needs. The IRS is 

implementing Continuous Diagnostics & Mitigation (CDM) software to automate security 

controls and standardize risk reporting across federal agencies, and to provide near real-time 

status and mitigation of deficiencies. Additionally, the IRS is adopting a predictive analytics 

approach to analyze the machine data, user access, and usage pattern (behavior) data to mitigate 

risks posed by insider threats. The IRS also is implementing two-factor authentication to 

protect the confidentiality, integrity, and availability of remote data transmissions that contain 

sensitive taxpayer information. 

Web Applications (WebApps): IRS is developing Web Applications to improve interactions 

and communications with taxpayers, employers, and third parties by providing a broad range of 

self-service options, establishing secure information exchange options, and building internal 

capabilities. By enabling third parties and taxpayers to interact digitally with the IRS, the 
IRS-78 

investment will provide a better user experience, achieve significant savings by moving services 

to lower cost channels, and deliver consistent data and services through reusable application 

programming interfaces (APIs). Web Apps will continue to work on the account Balance Due, 

See Payments, Make a Payment and Download Tax Data capabilities. The IRS also will begin 

work on two new account features: Taxpayer Protection Program Identity Verification Tool and 

Installment Agreement for individual taxpayers. This program will facilitate voluntary 

compliance by empowering taxpayers with innovative tools and support. 

Enterprise Case Management (ECM): ECM is a business-driven transformation program that 

will address the need to modernize, upgrade, and consolidate case management systems with 

similar functionality that are running in the IRS ecosystem today. The IRS has over 60 legacy 

case management systems with similar functionality. Historically, these were developed for 

individual Business Operating Divisions as stand-alone systems. This project will consolidate 

case management systems onto an enterprise platform with common infrastructure, business 

functions, and services. The IRS expects taxpayer and operational benefits by making more 

case information available to front-line IRS employees to simplify interactions between the IRS 

and taxpayers. 

Integrated Enterprise Portal (IEP) / IRS.GOV- Portal: The IRS.gov portal provides 

seamless one-stop web-based services to internal and external users. The modernization of the 

IRS.gov infrastructure enables landing page access to services for taxpayers, tax preparers, 

businesses, practitioners, electronic return originators, and IRS employees. IEP’s strategy for 

infrastructure modernization also supports the IRS’s Cloud-First strategy and will support future 

application portability through cloud technologies. IEP will ensure ease of access to IRS.gov 

services, and is necessary to ensure the security of IRS stakeholder data. 

Return Review Program (RRP): RRP is leveraging leading-edge technologies to advance the 

IRS’s effectiveness to detect, resolve, and prevent criminal and civil tax refund fraud and 

non-compliance, maximize fraud detection in real-time, and protect revenue from the risks of 

increasing global fraud sophistication. RRP is mission-critical for the IRS to combat 

ever-evolving tax fraud schemes in a sophisticated, scalable, and adaptable manner, and will be 

the anomaly detection platform for the enterprise for both pre-refund and post-refund fraud and 

non-compliance. RRP correlates data across multiple data sources and enables the IRS to create 

predictive models for fraud and non-compliance. RRP generates a scorecard for questionable 

returns, evaluating consistency and dependability. RRP also will support the Business 

Operating Divisions’ ability to perform self-service analytics to facilitate rapid deployment of 

new rules and models for fraud and non-compliance, and will increase efficiencies to assist in 

the selection and prioritization of workload management. 

Authentication, Access, and Authorization (eA3): eA3 is designed to provide secure access to 

IRS web-based applications and data through user authentication, authorization, and access 

capabilities that underpin all secure digital interactions for individuals, businesses, third parties, 

tax professionals, and other IRS trusted network participants. With an increase in IRS services 

delivered through internet channels, eA3 manages the risk of identity theft, fraudulent activity, 

and improper use of IRS information by enhancing detection and remediation capabilities 

within the IT security environments. eA3 provides a shared Enterprise Service / platform that 

can be used by new and existing, internal and external applications to provide authorization to 
IRS-79 

users and services. Future objectives include improving the security and capacity of the 

enterprise authentication framework and protecting additional applications. 

Foreign Account Tax Compliance Act (FATCA): The FATCA program supports legislation 

that promotes disclosure of foreign accounts held by U.S. taxpayers and integrates this 

information into current IRS compliance activities. FATCA introduces new reporting 

requirements for U.S. taxpayers and Foreign Financial Institutions (FFIs). The legislation 

requires U.S. taxpayers holding foreign financial assets to report information to the IRS 

annually, and for FFIs with U.S. taxpayer accounts to register, report annually to the IRS, and 

withhold a portion of income that is sent to the IRS. These complementary provisions create a 

web of international tax accountability, allowing the IRS to gather and analyze information 

from multiple sources, bolstering the compliance of U.S. taxpayers with assets overseas. IT will 

continue to operate and maintain the FATCA portfolio of systems, deliver new and enhanced 

business capabilities, reduce manual workarounds, leverage FATCA data to improve legislative 

compliance among individuals and institutions, and leverage existing capabilities to support 

emerging IRS initiatives. 

Customer Account Data Engine 2 (CADE 2): CADE 2 is IRS’s data-driven foundation for a 

future of state-of-the-art individual taxpayer account processing and data-centric technologies to 

improve service to taxpayers, enhance IRS tax administration, and ensure fiscal responsibility. 

At the heart of CADE 2 is a modernized relational database that aggregates individual taxpayer 

records and makes this data available to organizations across the IRS. Ultimately, CADE 2 will 

replace the Individual Master File (IMF) as the IRS’s authoritative data source for individual 

taxpayer data. 

3.2 – Return on Investment (ROI) for IRS Major Enforcement Programs 

The actual cost and actual revenue collected for FY 2012 through FY 2017 for the three major 

enforcement programs, Examination, Collection, and Automated Underreporter (AUR) are 

provided below. The activities included in these programs include: 

Examination Program conducts examinations of tax returns of individual taxpayers, 

businesses, and other types of organizations to verify that the tax reported is correct. This 

includes examinations of individuals, small businesses, self-employed, large corporate 

businesses, partnerships, international, estate and gift, excise tax and employment tax, taxexempt organizations, qualified pension benefit plans, and government entities. The 

examination costs include the cost of the Field Exam, Correspondence Exam, IRS Chief 

Counsel, and Appeals functions. 

Collection Program collects delinquent taxes and secures delinquent tax returns through the 

appropriate use of enforcement tools, such as lien, levy, seizure of assets, installment 

agreement, offer in compromise, substitute for return, summons, and IRC section 6020(b) 

(which allows the IRS to prepare returns if a taxpayer neglects or refuses to file), and provides 

education to taxpayers to enable future compliance. The cost of the Collection program 

includes Automated Collection System (ACS), Field Collection, and Payment 

Compliance/Correspondence Collection. 
IRS-80 

Automated Underreporter (AUR) Program matches payer information returns (Forms 1099, 

W-2, etc.) against data reported to the IRS on individual tax returns. The information is verified 

to identify any discrepancies. If a discrepancy is found, the case is given to a tax examiner for 

research and analysis. If the tax examiner is unable to resolve the discrepancy, the IRS issues a 

proposed notice and generates a proposed assessment. 

ROI is calculated by dividing revenue by cost. This information provides an indication of the 

ROI for the three major enforcement programs over time, but it is important to note that 

enforcement revenue collected in a fiscal year includes tax, interest, and penalties from multiple 

tax years. Some enforcement activities take more than a year to close and may generate revenue 

over several years, so it is generally inappropriate to compare revenue collected in a given fiscal 

year to the staffing available for that same year. 

In addition, it is important to note that these data reflect the average return on investment for 

these programs and do not include the indirect effects of IRS enforcement activities on 

voluntary compliance. As such, they are not intended to be used to allocate resources or 

maximize revenue. Net revenue is maximized only when resources are allocated according to 

marginal direct and indirect return on investment, but those ratios are much more challenging 

to estimate than the average ROI shown here. As a result, the IRS will continue to allocate 

enforcement resources across a range of enforcement activities to ensure taxpayers pay the taxes 

they owe. 

Return on Investment for IRS Major Enforcement Programs 

 

Dollars in Millions

Enforcement Program Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI

IRS Total $6,242 $50,187 8.0 $5,883 $53,345 9.1 $5,839 $57,146 9.8 $5,644 $54,203 9.6 $5,592 $54,291 9.7 $5,506 $53,214 9.7

Examination 4,232 14,476 3.4 3,965 16,662 4.2 3,965 18,983 4.8 3,974 13,320 3.4 3,782 12,023 3.2 3,695 14,510 3.9

Collection 1,742 30,442 17.5 1,660 31,396 18.9 1,618 33,198 20.5 1,419 35,740 25.2 1,576 37,259 23.6 1,598 33,701 21.1

Automated Underreporter (AUR) 267 5,269 19.7 258 5,287 20.5 256 4,965 19.4 251 5,143 20.5 234 5,009 21.4 214 5,003 23.4

FY 2012 FY 2013 FY 2015 FY 2016 FY 2017

1

The cost of the enforcement programs was calculated using budget data from the IRS Integrated Financial System (IFS) and includes direct dollars and FTE from the 

Enforcement appropriation, Exam and Collections budget activity, and dollars from the Operations Support appropriation prorated using actual FTE realized for each major 

FY 2014
IRS-81 

3.3 – IRS Performance Measure Table 

Performance Measures FY2013 

Actual

FY2014 

Actual

FY2015 

Actual

FY2016 

Actual 

FY2017

Actual

FY2017 

Target 

FY2018 

Target 

FY2019 

Target

Customer Service Representative Level of Service 

(LOS) 60.5% 64.4% 38.1% 53.4% 77.1% 64.0% 75.0% 47.0%

Customer Contacts Resolved per Staff Year1 20,767 21,018 26,245 28,497 25,535 Baseline Baseline TBD

Customer Accuracy - Tax Law (Phones) 95.7% 95.0% 95.0% 96.4% 96.7% 95.0% 95.0% 95.0%

Customer Accuracy - Accounts (Phones) 96.0% 96.2% 95.5% 96.1% 96.0% 95.0% 95.0% 95.0%

Timeliness of Critical Filing Season Tax Products to 

the Public 58.9% 99.1% 89.0% 92.5% 93.1% 89.0% 89.0% 89.0%

Timeliness of Critical TE/GE & Business Tax Products 

to the Public 83.6% 98.7% 92.6% 98.0% 96.7% 91.0% 91.0% 91.0%

Percent Individual Returns Processed Electronically 82.5% 84.1% 85.3% 86.4% 86.9% 87.0% 88.0% 89.0%

Percent of Business Returns Processed 

Electronically 40.2% 43.1% 47.0% 50.0% 52.9% 51.0% 54.0% 56.0%

Refund Timeliness - Individual (Paper) 99.0% 98.7% 98.8% 98.7% 98.4% 97.0% 97.0% 97.0%

Enterprise Taxpayer Self-Assistance Rate1 83.3% 84.7% 88.7% 89.0% 79.0% Indicator Indicator Indicator

Examination Coverage - Individual 1.0% 0.9% 0.8% 0.7% 0.6% 0.6% 0.6% 0.6%

Field Exam Nat'l Quality Review Score 89.2% 88.4% 86.7% 86.8% 85.0% 86.7% 84.4% 86.7%

Office Exam Nat'l Quality Review Score 90.3% 90.6% 88.3% 88.4% 87.9% 86.7% 86.7% 88.3%

Examination Quality - Large Business2 92.0% 83.0% 86.0% 83.0% 78.0% 90.0% 90.0% 90.0%

Examination Coverage - Business (Assets > $10 

million) 5.6% 4.3% 3.9% 3.0% 2.5% 2.7% 2.4% 1.8%

Examination Efficiency - Individual 142 138 148 143 121 118 134 129

Automated Underreporter Efficiency 2,025 1,935 2,209 2,196 2,188 2,133 2,133 2,133

Automated Underreporter Coverage 2.8% 2.6% 2.3% 2.3% 2.2% 2.0% 1.9% 1.9%

Collection Coverage (Units) 47.0% 45.9% 46.3% 43.4% 42.2% 37.5% 38.6% 36.0%

Collection Efficiency (Units) 2,057 2,051 2,448 2,266 2,135 2,117 2,101 2,029

Field Collection Nat'l Quality Review Score 81.4% 81.6% 79.2% 79.2% 76.7% 79.7% 78.0% 78.0%

Automated Collection System Accuracy 94.4% 95.2% 95.3% 95.4% 94.7% 95.0% 95.0% 95.0%

Criminal Investigations Completed 5,557 4,606 4,486 3,721 3,089 3,100 3,000 2,900

Number of Convictions 3,311 3,110 2,879 2,672 2,300 2,100 1,900 1,800

Conviction Rate 93.1% 93.4% 93.2% 92.1% 91.5% 92.0% 92.0% 92.0%

TE/GE Determination Case Closures 65,877 136,746 111,940 99,973 102,749 95,791 94,103 88,886

Rentable Square Feet per Person (new for FY 2017) 297 Indicator Indicator Indicator

Percent of Major IT Investments within +/- 10% Cost 

Variance at the Investment Level 3 0.0% 66.7% 73.7% 76.2% 50.0% 90.0% 90.0% 90.0%

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 3 83.3% 100.0% 89.5% 85.7% 88.9% 90.0% 90.0% 90.0%

2

 As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure replaced the two 

previous LB&I quality measures - Examination Quality - Industry and Coordinated Industry.

3

 Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

1 Starting in FY 2017, the IRS modified the Customer Contacts Resolved per Staff Year (CCRPSY) and Enterprise Taxpayer Self Assistance Rate measures to include additional self-service channels. As 

new self-assistance applications are provided to the public, they will be added to the methodology. IRS saw taxpayer behavior changes in 2017 due to the PATH Act (re: refund hold) and expect to see 

additional impacts in 2018 due to the tax reform; in addition, IRS continues to evaluate the impact of changes to the web services measure in FY 2017. CCRPSY will be rebaselined for FY 2018.
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3.3 – IRS Performance Measure Table (Continued) 

 

Customer Service Representative (CSR) Level of 

Service

The number of toll free callers that either speak to a Customer Service Representative or receive informational 

messages divided by the total number of attempted calls.

Customer Contacts Resolved per Staff Year The number of Customer Contacts resolved in relation to staff years expended. 

Customer Accuracy – Tax Law Phones The percentage of correct answers given by a live assistor on Toll-free tax law inquiries.

Customer Accuracy – Customer Accounts 

(Phones) The percentage of correct answers given by a live assistor on Toll-free account inquiries.

Timeliness of Critical Individual Filing Season Tax 

Products to the Public

The percentage of critical individual filing season tax products (tax forms, schedules, instructions, publications, tax 

packages, and certain notices required by a large number of filers to prepare a complete and accurate tax return) 

available to the public in a timely fashion.

Timeliness of Critical TE/GE & Business Tax 

Products to the Public Percentage of critical other tax products, paper and electronic, available to the public in a timely fashion. 

Percent Individual Returns Processed 

Electronically The percentage of electronically filed individual tax returns divided by the total individual returns filed.

Percent Business Returns Processed 

Electronically The percentage of electronically filed business tax returns divided by the total business returns filed.

Refund Timeliness – Individual (Paper) The percentage of refunds resulting from processing Individual Master File paper returns issued within 40 days or less. 

Enterprise Taxpayer Self Assistance Rate The percentage of taxpayer assistance requests resolved using self-assisted automated services. IRS will use this as 

an indicator for FY 2017.

Examination Coverage – Individual (1040)

The sum of all individual 1040 returns closed by Small Business/Self Employed (SB/SE), Wage & Investment (W&I), 

Tax Exempt and Government Entities (TE/GE), and Large Business and International (LB&I) (Field Exam and 

Correspondence Exam programs) divided by the total individual return filings for the prior calendar year.

Field Exam Nat'l Quality Review Score The score awarded to a reviewed field examination case by a Quality Reviewer using the National Quality Review 

System (NQRS) quality attributes.

Office Exam Nat'l Quality Review Score The score awarded to a reviewed office examination case by a Quality Reviewer using the NQRS quality attributes.

Examination Quality – Large Business Average of the scores of the Large Business Return (LBR) cases reviewed by LB&I Quality Measurement System 

(LQMS). Case scores are based on the percentage of elements passed within each of the four auditing standard.

Examination Coverage – Business Assets >$10 

Million)

The number of LB&I returns (C and S Corporations with assets over $10 million and all partnerships) examined and 

closed by LB&I during the current fiscal year divided by the number of filings for the preceding calendar year.

Examination Efficiency – Individual (1040) The sum of all individual 1040 returns closed by SB/SE, W&I, TE/GE, and LB&I (Field Exam and Correspondence 

Exam programs) divided by the total Full-Time Equivalent (FTE) expended in relation to those individual returns.

Automated Underreporter (AUR) Efficiency The total number of W&I and SB/SE contact closures (a closure resulting from a case where we made contact) divided 

by the total FTE, including overtime.

Automated Underreporter (AUR) Coverage A percentage representing the total number of W&I and SB/SE contact closures (a closure resulting from a case where 

SBSE and W&I made contact) divided by the total return filings for the prior year.

Collection Coverage – Units The volume of collection work disposed compared to the volume of collection work available.

Collection Efficiency – Units The volume of collection work disposed divided by total collection FTE.

Field Collection Nat'l Quality Review Score The score awarded to a reviewed collection cases by a Quality Reviewer using the NQRS quality attributes.

Automated Collection System (ACS) Accuracy The percent of taxpayers who receive the correct answer to their ACS question.

Criminal Investigations Completed

The total number of subject criminal investigations completed during the fiscal year, including those that resulted in 

prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of prosecution 

potential. 

Number of Convictions The number of criminal convictions.

Conviction Rate The percent of adjudicated criminal cases that result in convictions.

TE/GE Determination Case Closures The number of cases closed in the Employee Plans or Exempt Organizations Determination programs, regardless of 

type of case or type of closing.

Rentable Square Feet per Person The amount of Rentable Square Feet the IRS maintains per Personnel requiring space. IRS will use this as an indicator 

for FY 2017.

Percent of Major IT Investments within +/- 10% 

Cost Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned total cost and projected/actual cost 

within a fiscal year divided by the total number of major IT investments in that fiscal year.

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned days and projected/actual days within a 

fiscal year divided by the total number of major IT investments in that fiscal year.
IRS-83 

3.4 – Summary of FY 2017 Savings Realized 

The IRS FY 2017 President’s Budget request of $11.405 billion was built on the FY 2016 

Enacted level of $11.235 billion and included $3.7 million and 72 FTE in reductions to the IRS 

FY 2016 base budget. However, the FY 2017 Enacted budget was $11.235 billion. 

Increase e-File Savings 

FY 2019 Projected Savings: (-$6,695,000 / -128 FTE) 

FY 2017 Actual Savings Realized: (-$2,169,600/ -48 FTE) 

The IRS realized savings of 48 FTE and $2.17 million in FY 2017 as a result of increases in 

electronically filed returns. The numbers of paper returns received by the IRS decreased by 

1 million from FY 2016 to FY 2017 while the number of electronically filed returns increased 

by 3.4 million over the same period. 

Rent

FY 2019 Annualized Savings: (-$9,703,414) 

Rent is one of the IRS's largest organizational operating expenses. The IRS will complete 

28 projects to release more than 567,986 rentable square feet of space from inventory for an 

annual rent savings of more than $9.7 million. 

 

Dollars in Millions

Internal Revenue Service

FY 2016 Enacted $11,235.0

Changes to Base:

Maintaining Current Levels (MCLs) $170.4

Pay Raise 100

Pay Annualization 27

Non-Pay Inflation Adjustment 43.4

FY 2017 Current Services $11,405.4

FY 2017 Enacted $11,235.0

Current Services Shortfall ($170.4)
IRS-84 

Section IV – Appendix 

4.1 – Appropriations Detail Table with Program Integrity Cap Adjustment 

1

FY 2017 Enacted reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the execution of these 

resources, see the 2019 Budget Appendix chapter for the Department of the Treasury. Includes $220 million interappropriation transfer from 

Enforcement to Taxpayer Services ($90 million) and Operations Support ($130 million). FY 2017 Enacted also includes $290 million in Section 113 

Administrative Provision funding allocated in the following amounts: $209.2 million in Taxpayer Services and $80.8 million in Operations Support. FY 

2017 full-time equivalent (FTE) are actuals and reconcile to the final FY 2017 Obligations and Expenses report, which included the 36 FTE funded 

from prior year balances shown in the table above. Other Resources are actuals. Resources from Other Accounts include other direct FTE funded 

by the Federal Highway Administration. 

2

FY 2018 Annualized Continuing Resolution (CR) reflects a rescission of 0.6791 percent applied to the FY 2017 Enacted levels. FY 2018 Annualized 

CR also includes a notional $220 million interappropriation transfer from Enforcement to Operations Support to cover anticipated operations and 

maintenance requirements in FY 2018. The IRS will submit a formal transfer to request to Congress as part of the IRS FY 2018 Operating Plan upon 

enactment of a final appropriations bill. FY 2018 Annualized CR includes $288 million in Section 113 Administrative Provision funding in the following 

amounts: $208 million in Taxpayer Services and $80 million in Operations Support. FY 2018 Annualized CR does not include resources to implement 

new requirements under the Tax Cuts and Jobs Act (Public Law 115-97). 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.135 billion, the FY 2019 Budget proposes 

a $362 million cap adjustment to fund new and continuing investments in expanding and 

improving the effectiveness and efficiency of the IRS’s overall tax enforcement program. The 

proposed FY 2019 enforcement investments will yield additional revenue. The Budget also 

proposes additional cap adjustments for new investments each year through FY 2023 that are 

sustained with additional adjustments through FY 2028 to account for economic factors, such as 

inflation. The investments will generate about $44 billion in additional revenue over 10 years 

and will cost about $15 billion for an estimated net savings of $29 billion. Notably, the return 

on investment (ROI) likely is understated because it includes only amounts directly recovered; 

it does not reflect the effect that enhanced enforcement has on deterring non-compliance. 

Dollars in thousands

Internal Revenue Service

Appropriated Resources

FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT FTE AM OUNT

N ew A ppro priated R eso urces:

T axpayer Services 28,692 $ 2,455,754 26,977 $ 2,349,688 24,668 $ 2,241,000 (2,309) ($ 108,688) -8.56% -4.63%

Pre-Filing Taxpayer Assistance and 

Education 4,700 607,043 4,451 603,424 4,460 607,753 9 4,329 0.20% 0.72%

Filing and Account Services 23,992 1,848,711 22,526 1,746,264 20,208 1,633,247 (2,318) (113,017) -10.29% -6.47%

Enfo rcement 36,550 $ 4,640,000 34,662 $ 4,606,996 36,157 $ 4,832,847 1,495 $ 225,851 4.31% 4.90%

Investigations 3,079 595,206 2,913 576,802 3,093 631,596 180 54,794 6.18% 9.50%

Exam and Collections 32,602 3,914,546 30,811 3,874,918 32,107 4,042,437 1,296 167,519 4.21% 4.32%

Regulatory 869 130,248 938 155,276 957 158,814 19 3,538 2.03% 2.28%

Operatio ns Suppo rt 10,835 $ 3,849,246 10,813 $ 3,913,988 11,155 $ 4,312,724 342 $ 398,736 3.16% 10.19%

Infrastructure 869,732 847,444 886,032 38,588 4.55%

Shared Services and Support 4,777 991,504 4,588 994,559 4,706 1,035,568 118 41,009 2.57% 4.12%

Information Services 6,058 1,988,010 6,225 2,071,985 6,449 2,391,124 224 319,139 3.60% 15.40%

B usiness Systems M o dernizatio n 557 $ 290,000 516 $ 288,031 516 $ 110,000 ($ 178,031) -61.81%

Subto tal N ew A ppro priated R eso urces 76,634 $ 11,235,000 72,968 $ 11,158,703 72,496 $ 11,496,571 (472) $ 337,868 -0.65% 3.03%

Other Resources:

Reimbursables 853 152,161 1,033 173,557 552 113,535 (481) (60,022) -46.56% -34.58%

Offsetting Collections - Non Reimbursables 16,407 16,407 17,227 820 5.00%

User Fees 161 241,485 75 499,100 71 498,900 (4) (200) -5.33% -0.04%

Recovery from Prior Years 2,497 18,351 17,549 (802) -4.37%

Unobligated Balances from Prior Years 36 297,310 827 351,715 341,709 (827) (10,006) -100.00% -2.84%

Transfers In/Out 17

Resources from Other Accounts 1 1 1

Subtotal Other Resources 1,051 $ 709,877 1,936 $ 1,059,130 624 $ 988,920 (1,312) ($ 70,210) -67.77% -6.63%

T o tal B udgetary R eso urces 77,685 $ 11,944,877 74,904 $ 12,217,833 73,120 $ 12,485,491 (1,784) $ 267,658 -2.38% 2.19%

% C hange

F Y 2018 to F Y 2019 

Request

Change

F Y 2017

Enacted 1

F Y 2018 to F Y 2019 

Request

F Y 2018

Annualized CR 2

F Y 2019

Request 3
IRS-85 

Return on Investment (ROI) for FY 2019 Enforcement Investments

Enforcement efforts increase revenue by encouraging voluntary compliance for taxpayers who 

would otherwise seek to avoid meeting their tax obligations under the law. The IRS calculates a 

return on investment for both revenue generating and revenue protecting investments. Revenue 

generated is from compliance efforts that yield direct, measurable results through enforcement 

activities such as examination and collection returns. Protected revenue is revenue the IRS 

protects from being refunded erroneously. It is associated with activities that occur before 

issuing a taxpayer’s refund, including the identification of fraud and questionable returns. 

FY 2019 Revenue Generating Investments 

The FY 2019 budget includes $290.1 million in investments for traditional enforcement and 

strategic revenue programs, which are projected to generate $2 billion in revenue once the 

investments reach full potential in FY 2021 with an expected total ROI of $5.2 to $1. This 

request includes $111.8 million to support strategic revenue producing investments, including 

improving identity assurance and strengthening the Return Review Program, among other 

initiatives. While the strategic revenue producing investments do not have an immediately 

measurable ROI, they have clear long-term positive revenue effects. 

FY 2019 Revenue Protecting Investments 

The benefits of IRS activities that prevent erroneous refunds are not captured in IRS’s ROI 

calculations above. However, the IRS estimates that investment in these activities should 

protect $1.1 billion in revenue that otherwise would have been recovered from downstream 

enforcement actions for an estimated ROI of $13.7 to $1 by FY 2021. These investments also 

Description FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028

FY 2019 - 

FY 2028

Base $8,784 $8,874 $8,966 $9,058 $9,151 $9,246 $9,341 $9,437 $9,534 $9,632 $92,023

Cap $362 $749 $1,098 $1,450 $1,806 $1,893 $1,895 $1,904 $1,913 $1,922 $14,990

Total $9,146 $9,623 $10,064 $10,508 $10,957 $11,138 $11,236 $11,341 $11,447 $11,554 $107,013

Revenues $152 $787 $1,825 $3,033 $4,330 $5,554 $6,416 $6,931 $7,270 $7,505 $43,804

Net Savings ($209) $38 $727 $1,583 $2,525 $3,661 $4,521 $5,027 $5,358 $5,583 $28,814

IRS FY 2019 Program Integrity Cap Adjustment for Deficit Reduction

Return on Investment (ROI) for IRS FY 2019 Enforcement Initiatives 

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

FY 2019 Revenue Producing Enforcement Initiatives $290.1 $345.2 1.2 $389.5 $1,492.0 3.8 $382.8 $2,005.3 5.2

Before Cap Adjustment Enforcement Initiative $18.0 $0.0 0.0 $14.0 $0.0 0.0 $13.7 $0.0 0.0

Increase Audit Coverage 2.9 0.0 0.0 2.9 0.0 0.0 2.8 0.0 0.0

Increase Collection Coverage 1.7 0.0 0.0 2.0 0.0 0.0 1.9 0.0 0.0

Improve Identity Assurance 13.4 0.0 0.0 9.1 0.0 0.0 9.0 0.0 0.0

Cap Adjustment Enforcement Initiatives $290.1 $345.2 1.2 $389.5 $1,492.0 3.8 $382.8 $2,005.3 5.2

Immediate and Directly Measurable Revenue-Producing Initiatives $178.3 $345.2 1.9 $257.7 $1,492.0 5.8 $252.0 $2,005.3 8.0

Increase Collection Coverage 64.0 98.8 1.5 91.9 595.5 6.5 90.5 756.6 8.4

Increase Audit Coverage 114.3 246.4 2.2 165.8 896.5 5.4 161.5 1,248.7 7.7

Strategic Revenue-Producing Initiatives (which do not have immediately measurable ROI, but clear 

long-term revenue effects)

$111.8 $0.0 0.0 $131.8 $0.0 0.0 $130.8 $0.0 0.0

Improve Identity Assurance 29.6 0.0 0.0 33.5 0.0 0.0 33.6 0.0 0.0

Return Review Program 54.2 0.0 0.0 61.8 0.0 0.0 61.8 0.0 0.0

Tax Return Preparer Compliance and Professional Responsibility Activities 17.2 0.0 0.0 23.3 0.0 0.0 22.4 0.0 0.0

Expand CI for Cyber, Counterterrorism, and ID Theft Investigations 8.5 0.0 0.0 9.2 0.0 0.0 9.0 0.0 0.0

Prevent IDT & Refund Fraud and Reduce Improper Payments 2.3 0.0 0.0 4.0 0.0 0.0 4.0 0.0 0.0

First Year (FY 2019) Second Year (FY 2020) Full Performance (FY 2021)
IRS-86 

support IRS’s Agency Priority Goal on Fraud Prevention, which is part of the FY 2018-2022 

Treasury Strategic Plan to reduce the amount of unprotected identity theft tax refunds paid by 

two percent by December 21, 2019. 

FY 2019 Revenue-Protecting Enforcement Initiatives

Dollars in Millions

Cost Revenue ROI Cost Revenue ROI Cost Revenue ROI

Revenue Protecting Initiatives (which protect taxpayer information, prevents identity theft, and results in 

long-term revenue protection)

$71.6 $362.9 5.1 $82.8 $775.0 9.4 $80.8 $1,103.8 13.7

Cap Adjustment Revenue Protecting Initiative $71.6 $362.9 5.1 $82.8 $775.0 9.4 $80.8 $1,103.8 13.7

Increase Audit Coverage (revenue-protecting portion) 17.9 56.0 3.1 27.3 405.0 14.8 27.2 675.0 24.8

Prevent IDT & Refund Fraud and Reduce Improper Payments (revenue-protecting portion) 53.7 306.9 5.7 55.5 370.0 6.7 53.6 428.8 8.0

First Year (FY 2019) Second Year (FY 2020) Full Performance (FY 2021)
IRS-87 

Cap Adjustment Program Increases...............................+$361,571,000 / +1,691 FTE

Increase Audit Coverage +$132,201,000 / +940 FTE 

The IRS is requesting additional 

examination employees to increase 

staffing. The individual audit coverage 

rate has shrunk from 1.1 percent in FY 

2010 to an estimated target of 0.6 

percent in FY 2019, which increases 

the risk of undermining the integrity of 

the nation’s voluntary tax compliance 

system. Examination program 

resources will cover a broad range of 

compliance priorities and move 

towards achieving the goal of earlier 

case assignment and resolution. The 

investment is projected to produce 

more than $1.2 billion in additional 

revenue annually and an ROI estimated 

at 7.7 to 1, and protect revenue of $675 

million, a protected ROI of 24.8 to 1, 

once the new hires reach full potential 

in FY 2021. These resources will help 

to: 

 Close more than 41,000 

correspondence examination cases and 38,000 individual field examination cases; 

 Improve the individual audit coverage rate, and expand examination coverage on cases 

involving employment taxes, estate and gift taxes, and Bank Secrecy Act reporting; and 

 Expand the Automated Underreported (AUR) program to process more than 

470,000 additional cases and other document matching programs that will process an 

additional 133,000 cases (document matching of individuals decreased 36 percent from 

FY 2011 to FY 2017). 

 

P o sitio n T ype/ Other C o sts F T E $ 000

Examinat io n C o verag e 2 9 0 .50 $51,0 0 4

Revenue Agent 196.00 37,355

Tax Technician 78.00 12,402

M anager/Support Staff 16.50 1,247

Sp ecialt y Pro g rams 209.00 $26,603

Revenue Agent 34.50 7,373

Tax Technician 1.00 90

Tax Examiner 147.50 15,541

Attorney 3.50 691

Support Staff 22.50 2,908

C o rresp o nd ence Examinat io n 65.00 $6,084

Tax Technician 1.50 233

Tax Examiner 50.50 4,832

M anager/Support Staff 13.00 1,019

D o cument M at ching 16 1.0 0 $16 ,79 4

Tax Examiner 143.50 15,100

Support Staff 17.50 1,694

Ot her D irect Cost s 2 15.0 0 $3 1,716

Revenue Agent 25.00 4,057

Tax Examiner 18.00 1,953

Appeals Officer 40.00 6,816

Attorney 29.50 5,344

Paralegal 4.00 508

Contact Representative 330

TAS Specialist 96

HR Specialist 83.00 10,431

M anager/Program Analyst/Support Staff 15.50 1,911

Analyst - Seasonal 270

Total 9 4 0 .50 $13 2 ,2 0 1
IRS-88 

Increase Audit Coverage – Other Direct Costs (+$31.7 million / +215 FTE, included in total 

for Increase Audit Coverage above) 

IRS Activity Cost FTE Positions Explanation

Appeals $12,827 83.00 166

Support examination efforts on key compliance areas

focused on improving voluntary compliance and providing a

high level of customerservice.

Chief Counsel $6,692 41.50 83

Provide support for increases in requests for legal advice,

litigation assistance, and published guidance on issues raised

in audits.

Human Capital Office $10,430 83.00 83

LR support to handle the increase in front‐line positions and

the expectation that new managerial positions will be

created.  Employment bargaining unit positions require

internal and external postings that involve various

assessments and work processes.  Personnel Security FTE

handle background and suitability checks.

SB/SE Human 

Capital Office $762 4.00 8

Hiring positions support the onboarding of new hires.

Training positions focus on developing and updating course

material and delivering effective training.

Privacy, 

Governmental Liaison 

and Disclosure

$292 3.50 7 Address the increase in Freedom of Information Act requests

as result of increased compliance activity.

Taxpayer Advocate 

Service (TAS) $97 Ensure the IRS follows appropriate procedures and does not

create unnecessary burdens or compromise taxpayers' rights.

WAGE -- Customer 

Service 

Representatives

$618 

Support examination efforts by ensuring staffing is available

to handle downstream impact in accounts management

operations.

Total $31,716 215.00 347

Dollars in thousands

Major Activities Projected

Revenue ($M)

Projected 

Closures

F ield Examinatio n 228.9 32,272 

Specialty P ro grams 37.1 6,545 

C o rrespo ndence Examinatio n 216.0 41,860 

A UR 541.6 471,393 

B M F Underrepo rter/ D o cument M atching 225.1 133,785 

T o tal $ 1,248.7 685,855 
IRS-89 

Increase Collection Coverage +$63,932,000 / +433 FTE 

The IRS is requesting additional 

resources to improve its capacity to 

work the collection inventory and 

answer taxpayer phone calls about 

that inventory. Increased staffing will 

address the overall collection 

coverage rate, which has declined 16 

percent from FY 2010 to FY 2017. 

This investment is expected to 

produce additional annual 

enforcement revenue of 

$756.6 million, an ROI of $8.4 to $1, 

once the new hires reach full potential 

in FY 2021. These resources will 

help the IRS to: 

 Provide nearly 350 additional field collection staff to expand programs that address 

non-filing and underpayment of taxes and to handle more than 60,000 additional 

collection cases with an estimate of $43.4 billion in aggregate assessed balance; 

 Provide more than 220 additional 

Automated Collection System (ACS) 

staff to address additional 358,000 ACS 

cases, including incoming calls 

generated by the issuance of levies, 

delinquent returns, and/or unpaid tax 

liabilities. ACS staffing has decreased 

by 25 percent since the end of FY 2010, 

resulting in a substantial increase in 

unhandled ACS cases and a decreased 

level of service to taxpayers; and 

 Expand several Compliance Services 

Collection Operations (CSCO) programs 

that address non-filing and 

underpayment of taxes through the 

notice process by sending more than 350,000 notice dispositions and cases. CSCO 

investments will increase balance due work and expand the following programs: 

Automated Substitute for Return, Offers in Compromise, and Insolvency.

Major Activities Projected

Revenue ($M)

Projected 

Closures

Field Collection 330.6 63,470 

A uto mated C o llectio n System 405.6 358,658 

Offers In C o mpro mise 5.2 3,510 

C o mpliance Services C o llectio n Operatio n 15.2 65,919 

T o tal $ 756.6 491,557 

P o sitio n T ype/ Other C o sts F T E $ 000

Field Collection 172 .50 $3 0 ,9 2 9

Revenue Officer 172.50 30,929

A C S & A C S Support 113 .0 0 $12 ,16 1

Contact Representative 113.00 12,161

C orrespondence C ollect ion 32.00 $2,738

Tax Examiner 21.50 1,800

M anager/Support Staff 10.50 938

Ot her D irect C ost s 115.50 $18 ,10 4

Appeals Officer 52.00 8,861

Tax Examiner 9.00 977

TAS Specialist 193

Attorney 12.50 2,300

Paralegal 2.00 254

Support Staff 4.00 425

HR Specialist 18.00 2,260

HR Support Staff 18.00 2,593

Contact Representative 135

M anager/Support Staff 16

Seasonal 90

Total 433.00 $63,932
IRS-90 

Increase Collection Coverage - Other Direct Costs (+$18.1 million / +115.5 FTE) 

IRS Activity Cost FTE Positions Explanation

Appeals $9,837 61.00 122

Support collection efforts and provide a high level of

customerservice on key compliance areas, particularly the

Trust Fund Recovery Penalty and Collection Due Process

workstreams.

Chief Counsel $2,980 18.50 37 Provide support for increases in requests for legal advice,

litigation assistance, and collection due process.

Human Capital 

Office $3,900 31.00 31

LR support to handle the increase in front‐line positions and

the expectation that new managerial positions will be

created.  Employment bargaining unit positions require

internal and external postings that involve various

assessments and work processes.  Personnel Security FTE

handle background and suitability checks.

SB/SE Human 

Capital Office $952 5.00 10

Hiring positions support the onboarding of new hires. Training

positions focus on developing and updating course material

and delivering effective training.

Taxpayer Advocate 

Service (TAS) $193 Ensure the IRS follows appropriate procedures and does not

create unnecessary burdens or compromise taxpayers' rights.

WAGE -- Customer 

Service 

Representatives

$242 

Support collection efforts by ensuring staffing is available to

handle downstream impact in accounts management

operations.

Total $18,104 115.50 200

Dollars in thousands
IRS-91 

Prevent Identity Theft & Refund & Reduce Improper Payments +$56,017,000 / +140 FTE 

Resources from this investment provide the 

means to fulfill IRS agreements with state and 

industry partners, and to analyze and act on 

potentially millions of additional tax fraud 

leads in real time, thereby stopping millions of 

fraudulent refunds. New staff will conduct 

case reviews to validate potential areas of 

abuse and test procedures to prevent refund 

fraud. These resources will allow the IRS to 

protect revenue by identifying potentially false 

returns and verifying as-reported wage and 

withholding accuracy. This investment is 

expected to protect $428.8 million of revenue, 

a projected ROI of $8.0 to $1, once the new 

hires reach full potential in FY 2021. 

This investment provides staff ways to analyze more 

than 41 additional data points from returns filed by 

industry partners to enhance the determination of 

accurate indicators of identity theft. Additional 

leads also will be received and verified from 

financial institutions and state departments of 

revenue. The IRS will apply the new information to 

current year returns and future year filters/models. 

This investment will help to stop problems from 

becoming a source of criminal activity and lost 

revenue. In addition, the investment includes 

contractor support that will identify classes of fraud 

cases, defining how they vary across the fraud actor 

communities; facilitate sharing anonymized data for analysis and identification of fraud classes; 

monitor tax fraud communication on the deep web to increase awareness of criminal activity; 

examine the fraud lifecycle to identify steps that non-compliant taxpayers take and the ways the 

IRS can defend against each step; determine how to build effective prevention and defense early 

in the lifecycle; develop machine-ingestible common vocabulary for fraud intelligence that 

allows non-compliant characteristics and techniques to be efficiently shared; validate fraud 

prevention mechanisms to assess their effectiveness; and maintain and share current contact 

information with all partners. 

P o sitio n T ype/ Other C o sts F T E $ 000

Ident it y Thef t 4 3 .50 $2 4 ,6 19

Special Agent 32.00 13,510

Analyst/Support Staff 8.50 845

IT Specialist 3.00 316

Contractual Services 9,948

Securit y Summit 4 2 .50 $14 ,572

Special Agent 32.00 13,510

Analyst/Support Staff 7.50 746

IT Specialist 3.00 316

Pursue Emp lo yment T ax & Prevent 

A busive Tax Schemes 4 2 .0 0 $14 ,52 3

Special Agent 32.00 13,510

Analyst/Support Staff 7.00 697

IT Specialist 3.00 316

Ot her Direct Cost s 12 .0 0 $2 ,3 0 3

Attorney 9.50 2,060

Support Staff 2.50 243

Total 14 0 .0 0 $56 ,0 17
IRS-92 

Prevent Identity Theft & Refund & Reduce Improper Payments - Other Direct Costs (+$2.3 

million / +12 FTE) 

Improve Identity Assurance +$29,586,000/ +21 FTE 

This investment will increase security, 

usability, and analytics for identity 

assurance—the process of authenticating, 

authorizing, and accessing taxpayer-facing 

online services. As the Federal Government 

strives to deliver services online, it increases 

the need to safeguard electronic transactions 

involving such information. Both the 

electronic system and the user need assurance 

that the user’s identity can be confirmed: the 

system needs to know that the user is authorized to exchange the information, which in turn 

allows the user to have confidence that the system will not release sensitive information to 

unauthorized users. This confirmation of user identity is known as authentication. 

This investment will also include support for the e-Authentication Help Desk that will assist 

taxpayers with establishing or accessing their online accounts, and will enable the IRS to pursue 

new technologies for identity proofing and authentication and will decrease the time and effort 

required to resolve account issues. 

This investment will help taxpayers create a Secure Access account and shift them to less 

expensive online self-service channels. The new e-Authentication capabilities will enable more 

taxpayers to use IRS applications. The ongoing application and monitoring enhancements will 

improve security and the overall user experience. Funds will provide for transaction costs, 

design and development support and tool integration, expansion of additional use cases and 

business reengineering, and developing prototypes for key tax pro account features. 

IRS Activity Cost FTE Positions Explanation

Chief Counsel $2,303 12.00 24 Provide support for increases in requests for legal advice,

litigation assistance, and collection due process.

Total $2,303 12.00 24

Dollars in thousands

P o sitio n T ype/ Other C o sts F T E $ 000

Taxpayer A ut hent icat ion A ssist ance $1,3 4 3

M anager/Analyst/Support Staff 501

M anager - Seasonal 56

Analyst - Seasonal 786

E- Aut hent icat ion 2 1.0 0 $4 ,2 4 3

Program Analyst 312

IT Specialist 21.00 3,931

R ef orm Plan $24,000

Hardware & Software 3,360

Contractual Services 20,640

Total 2 1.0 0 $2 9 ,58 6
IRS-93 

Tax Return Preparer Compliance and Program Responsibility +$17,152,000 / +75 FTE 

This investment will seek to ensure that tax preparers meet uniformly high ethical standards of 

conduct by enforcing preparer compliance 

with applicable IRS rules, increasing 

preparer examinations, and monitoring 

and pursuing preparers engaged in 

fraudulent activities, including 

noncompliant Earned Income Tax Credit 

(EITC) return preparers. This investment 

also provides resources for the IRS’s 

Office of Professional Responsibility 

(OPR) to conduct oversight of return 

preparers who represent taxpayers and 

who are subject to Circular 230, 

Regulations Governing Practice Before 

the Internal Revenue Service (C230). This 

investment is critical to the IRS’s strategy 

to reduce the tax gap and will improve the 

IRS’s ability to deliver high-priority, 

preparer-related enforcement activities. 

Key activities and deliverables of this 

investment include deploying a coordinated return compliance strategy by: 

 Developing techniques to detect return preparer errors; 

 Coordinating return preparer activities across IRS enforcement functions; 

 Prioritizing activities through a return preparer enforcement work plan; 

 Updating detection tools and selection logic; and 

 Determining effective measurement strategies. 

P o sitio n T ype/ Other C o sts F T E $ 000

Enf orce Tax Ret urn Preparer 

C o mp liance 39.50 $6,825

Revenue Agent 30.00 5,694

Revenue Officer 1.00 179

Attorney 0.50 74

Tax Examiner 3.00 287

Tax Technician 2.00 318

Analyst/Support Staff 3.00 273

Pursue Tax R et urn Preparer Fraudulent 

Activity 17.0 0 $6 ,76 4

Special Agent 12.00 5,067

Analyst/Support Staff 5.00 497

Contractual Services 1,200

Tax Debt Resolut ion 1.0 0 $16 8

Attorney 0.50 103

Paralegal 0.50 65

Ensure Et hnical St andards of Conduct 

Pract it ioners 17.50 $3 ,0 9 6

Attorney 5.00 1,030

Paralegal 2.50 325

Support Staff 10.00 1,741

T echno lo g y Enhancement s 0.00 $299

Contractual Services 299

Total 75.0 0 $17,152

Major Activities Preparer 

V isits

Invest igat ions 

C omplet ed

Enf orce Tax R et urn Prep arer C o mp liance 2,000

Pursue Tax R et urn Preparer Fradulent A ct ivit y 31

Total 2,000 31
IRS-94 

Tax Return Preparer Compliance and Program Responsibility – Enforce Tax Return Preparer 

Compliance (+$6.8 million / +39.50 FTE) 

Given the important role that tax return preparers play in tax administration, the IRS has a 

significant interest in identifying tax return preparers and monitoring their tax return preparation 

activities. These funds will allow the IRS to manage a coordinated return preparer compliance 

strategy by conducting on-site visits and investigating suspicious activity, especially of abusive 

return preparers. 

The IRS identifies preparer cases through programs and referrals from field staff, taxpayers, and 

Criminal Investigation (CI). Revenue agents and special agents conduct preparer audits and 

visits. Specific planned program activities include field visits by revenue agents and CI special 

agents to return preparers with compliance-related concerns and dedicated reviews of the 

returns of the clients of those preparers to determine whether those clients owe additional taxes 

and whether it is appropriate to assess penalties. 

The Administration is also proposing enhanced authority to oversee paid preparers.

Tax Return Preparer Compliance and Program Responsibility – Pursue Tax Return Preparer 

Fraudulent Activity (+$6.8 million / +17 FTE)

These funds provide resources for CI to form multi-agency taskforces dedicated to preventing 

fraudulently obtained refunds from financing and supporting criminal activity. Special agents 

will conduct outreach efforts with the practitioner community to educate them on their legal 

responsibilities and will develop leads on unscrupulous return preparers. CI will work with 

state taxing agencies to leverage resources and seek prosecution at both the federal and state 

levels as appropriate. These teams will target larger-scale criminal rings for maximum 

compliance results and publicity. 

Tax Return Preparer Compliance and Program Responsibility – Tax Debt Resolution (+$0.2 

million / +1 FTE)

These funds provide resources to fund one attorney and paralegal to address the deceptive and 

misleading practices suspected in the tax debt resolution industry. 

Tax Return Preparer Compliance and Program Responsibility – Ensure Ethical Standards of 

Conduct for Practitioners (+$3.1 million / +17.50 FTE)

The population of those subject to the ethical standards contained in C230 is expanding to 

include unlicensed tax return preparers who represent taxpayers in disputes involving returns 

and claims for refund that they prepared or signed, and others who represent taxpayers in tax 

collection matters. The nature of the cases being handled by OPR has evolved over the past five 

years from a focus on a practitioner’s own tax non-compliance to a focus on complex 

practitioner conduct that violates substantive provisions in C230 involving due diligence, false 

and misleading information given to IRS personnel, conflicts of interest, advising conduct in 

violation of tax laws, and false and misleading advertising. 
IRS-95 

These complex conduct cases, by their nature, require more extensive development, involve 

more sophisticated settlement negotiations and are more apt to result in commencement of an 

administrative proceeding before an Administrative Law Judge. We also have observed that, in 

the wake of the recent Loving v. Commissioner decisions, the tax community has become more 

likely to push proceedings into litigation rather than to settlement. 

OPR estimates that the number of cases requiring litigation could triple over the next two years 

in line with OPR’s expanded jurisdiction. The additional staffing will handle these complex 

conduct cases and the associated appeals, conferences, allegations, negotiations, and 

administrative hearing preparation, briefing and, when necessary, appeals of Administrative 

Law Judge decisions. 

In addition, the increased staffing will handle: 

 Anticipated increases in referrals of practitioner misconduct; 

 Due process conferences; 

 The new Appellate Authority functions delegated to OPR with respect to appeals from 

Return Preparer Office (RPO) determinations by C230 practitioners regarding 

compliance and suitability in the Preparer Tax Identification Number (PTIN) registration 

process; and 

 Alleged violations of C230 standards by tax debt resolution companies that assist 

taxpayers with negotiations to abate penalties, enter into installment agreements, and 

compromise an assessed federal tax liability. 

Tax Return Preparer Compliance and Program Responsibility – Technology Expansion (+$0.3 

million / 0 FTE)

 E-TRAK Case and Correspondence Management System (CCMS) is the application 

utilized by OPR to input referrals, manage resulting cases, and produce management 

information reports. Currently, OPR’s interactions with the IRS Return Preparer Office 

(RPO) and Centralized Authorization File (CAF) unit rely on a manual process. 

Interfacing CCMS with the 360 database will allow OPR research capability and the 

ability to exchange referrals and other pertinent information electronically, to include the 

revocation of PTINs and resulting CAF notifications. 

Tax Return Preparer Compliance and Program Responsibility – Video Conference Capability 

To reduce travel costs and enhance the ability to provide due process remotely, OPR is seeking 

resources for a video conferencing capability to conduct mandatory disciplinary conferences. 
IRS-96 

Expand Cyber and Counterterrorism Investigative Activities +$8,500,000 / +25 FTE 

Funding for this investment will strengthen 

cybercrimes and counterterrorism by 

enhancing several areas, including: 

 Supplementing Special Agent and 

Investigative Support resources to 

combat cyber-criminals that exploit 

stolen taxpayer Personally Identifiable Information (PII) obtained through sophisticated 

data breaches and intrusions. 

 Allowing for increased participation in multi-agency cyber and counterterrorism 

taskforces to target large-scale crime rings to maximize compliance. 

 Expanding criminal investigations through analysis of rich data from Suspicious 

Activity Reports (SARs). 

 Funding the build-out of CI’s cybersecurity and cybercrime divisions. 

 Identifying geographically driven issues.

This request funds contractor support that will: 

 Identify classes of fraud use cases, defining how they vary across the fraud actor 

community; 

 Facilitate sharing anonymized data for analysis and identification of fraud classes; 

monitor tax fraud communication on the deep web to increase awareness of criminal 

activity focused on undermining protection barriers and fraud filters; 

 Examine the fraud lifecycle to identify steps that non-compliant taxpayers take and the 

ways CI can defend against each step; 

 Determine how to build effective prevention and defense early in the fraud lifecycle; 

 Develop machine ingestible common vocabulary for fraud intelligence that allows noncompliant characteristics and techniques to be shared efficiently in a timely way; 

 Validate fraud prevention mechanisms to assess their effectiveness; and 

 Maintain and share current contact information with all partners. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

Exp and C yber and C o unt ert erro rism 

Invest igat ive A ct ivit ies 25.00 $8,500

Special Agent 12.00 5,066

Analyst 11.00 1,094

IT Specialist 2.00 343

Contractual Services 1,997

Total 25.00 $8,500
IRS-97 

Return Review Program +$54,183,000 / +57 FTE

This investment provides funding for 57 FTE, 

hardware, software, and contractual services for 

deployed Return Review applications. RRP 

deployed an Integrated Data Warehouse, In-Line 

Screening engine, and Offline Prevention 

environment that enhanced the IRS's ability to detect, resolve, and prevent criminal fraud and 

civil tax non-compliance. Since October 2016, the RRP has been the IRS’s primary system for 

detecting tax return fraud and other anomalies in tax filings, with the current focus being on 

individual tax return data. Since the start of Filing Season 2015, the RRP has protected over 

$6.51 billion of revenue in confirmed fraud, with a return on investment of more than 1,500 

percent. 

Funding will allow the IRS to provide support for the deployed capabilities by: 

 Enhancing applications, data modeling and mining, database development, business 

rules development, infrastructure support, performance engineering and testing, and 

application testing; 

 Supporting annual hardware maintenance fees and purchases to refresh computers, 

network equipment, and storage; 

 Updating and maintaining the system software, including operating systems, database, 

data integration, and utility software; and 

 Updating rules engines and data analytics. 

 

P o sitio n T ype/ Other C o sts F T E $ 000

R et urn R eview Pro g ram 

Operat ions and M aint enance 57.0 0 $54 ,18 3

IT Specialist 57.00 10,331

Software & Hardware 13,671

Contractual Services 30,181

Total 57.0 0 $54 ,18 3
IRS-98 

4.2 – Summary of IRS FY 2019 Identity Theft Budget Request 

4.3 – Summary of IRS FY 2019 ACA Budget Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 Identity Theft Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level1 $185,580 2,696 $282,779 2,694 $58,848 44 $15,689 $542,896 5,434

Changes to Base:

Maintaining Current Levels (MCLs) $4,593 $6,999 $1,456 $13,048

Pay Annualization 882 1,343 280 2,504

Non-Pay Inflation Adjustment 3,712 5,656 1,177 10,544

Subtotal FY 2019 Changes to Base $4,593 $6,999 $1,456 $13,048

FY 2019 Current Services $190,173 2,696 $289,778 2,694 $60,304 44 $15,689 $555,944 5,434

Program Changes:

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 24,300 21 24,300 21

Identity Assurance - e-Authentication Enhancements and Authorization Integration 24,300 21 24,300 21

Support Taxpayer Services and Online Account Activities 5,449 60 5,449 60

Subtotal FY 2019 Program Increases Before Cap Adjustment $5,449 60 $24,300 21 $29,749 81

FY 2019 Request Before Cap Adjustment $195,622 2,756 $289,778 2,694 $84,604 65 $15,689 $585,693 5,515

Cap Adjustment Program Increases

Prevent Identity Theft & Refund Fraud & Reduce Improper Pymts 47,495 140 8,522 56,017 140

Return Review Program 54,183 57 54,183 57

Subtotal FY 2019 Cap Adjustment Investments $47,495 140 $62,705 57 $110,200 197

Total FY 2019 Request Including Cap Adjustment $195,622 2,756 $337,273 2,834 $147,309 122 $15,689 $695,893 5,712 1

The FY 2018 Annualized CR level includes a proposed Interappropriation Transfer in the amount of $220M from Enforcement to the Operations Support appropriation account

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $10,042 60 $54,494 140 $88,461 78 $152,997 278

Percent Change FY 2019 Request over FY 2018 Annualized CR 5.41% 2.23% 19.27% 5.20% 150.32% 177.27% 28.18% 5.12%

TAXPAYER 

SERVICES ENFORCEMENT OPERATIONS 

SUPPORT BSM TOTAL

Bureau: Internal Revenue Service 

Summary of FY 2019 ACA Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level $106,823 1,695 $21,537 186 $54,547 313 $182,907 2,194

Changes to Base:

Maintaining Current Levels (MCLs) $510 $106 $334 $950

Pay Annualization 509 103 249 861

Non-Pay Inflation Adjustment 1 3 85 89

Subtotal FY 2019 Changes to Base $510 $106 $334 $950

FY 2019 Current Services $107,333 1,695 $21,643 186 $54,881 313 $183,857 2,194

Total FY 2019 Request $107,333 1,695 $21,643 186 $54,881 313 $183,857 2,194 1

 FY 2018 Annualized CR Level excludes $147 million in User Fees. The total with User Fees would be $330 million.

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $510 $106 $334 $950

Percent Change FY 2019 Request over FY 2018 Annualized CR 0.48% 0.49% 0.61% 0.52%

TAXPAYER 

SERVICES

ENFORCEMENT OPERATIONS 

SUPPORT 1 TOTAL
IRS-99 

4.4 – Summary of IRS FY 2019 Cyber Security Budget Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 Cyber Security Request $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level $10,978 12 $10,837 58 $227,756 444 $249,571 514

Changes to Base:

Maintaining Current Levels (MCLs) $272 $268 $5,637 $6,177

Pay Annualization 52 51 1,082 1,185

Non-Pay Inflation Adjustment 220 217 4,555 4,991

Subtotal FY 2019 Changes to Base $272 $268 $5,637 $6,177

FY 2019 Current Services $11,250 12 $11,105 58 $233,393 444 $255,748 514

Program Changes:

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 40,000 10 40,000 10

Strengthen Cyber Security 40,000 10 40,000 10

Support Taxpayer Services and Online Account Activities 7,953 7,953

Subtotal FY 2019 Program Increases Before Cap Adjustment $7,953 $40,000 10 $47,953 10

FY 2019 Request Before Cap Adjustment $19,203 12 $11,105 58 $273,393 454 $303,701 524

Cap Adjustment Program Increases

Subtotal FY 2019 Cap Adjustment Investments

Total FY 2019 Request Including Cap Adjustment $19,203 12 $11,105 58 $273,393 454 $303,701 524

1 FY 2018 Annualized CR Level in the amount of $249,571 million excludes $38.8 million in User Fees. The total including User Fees would be $288,371 million.

Dollar/FTE Change FY 2019 Request over FY 2018 Annualized CR $8,225 $268 $45,637 10 $54,130 10

Percent Change FY 2019 Request over FY 2018 Annualized CR 74.92% 2.47% 20.04% 2.25% 21.69% 1.95%

TAXPAYER 

SERVICES

ENFORCEMENT

OPERATIONS 

SUPPORT 1 TOTAL
IRS-100 

4.5 – Summary of IRS FY 2019 Request 

Bureau: Internal Revenue Service 

Summary of FY 2019 CJ Request $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2018 Annualized CR Level1 $2,349,688 26,977 $4,606,996 34,662 $3,913,988 10,813 $288,031 516 $11,158,703 72,968

Changes to Base:

Maintaining Current Levels (MCLs) $13,115 $26,598 $53,808 $172 $93,693

Pay Annualization 9,697 21,035 7,823 172 38,727

Non-Pay Inflation Adjustment 3,418 5,563 45,985 54,966

Efficiency/Savings ($6,695) (128) ($6,103) ($12,798) (128)

Increase e-File Savings (6,695) (128) (102) (6,797) (128)

Space Optimization (6,001) (6,001)

Reinvestment 12,798 12,798

Support Aging IT Infrastructure 12,798 12,798

Subtotal FY 2019 Changes to Base $6,420 (128) $26,598 $60,503 $172 $93,693 (128)

FY 2019 Current Services $2,356,108 26,849 $4,633,594 34,662 $3,974,491 10,813 $288,203 516 $11,252,396 72,840

Program Changes:

Program Decreases

Actions to Achieve Workforce Management Goals ($133,134) (2,307) ($5,390) ($138,524) (2,307)

Realignment from BSM to Operations Support ($178,203) ($178,203)

Subtotal FY 2019 Program Decreases ($133,134) (2,307) ($5,390) ($178,203) ($316,727) (2,307)

Before Cap Adjustment Program Increases

Stabilize, Secure and Transform IT Operations 181,305 146 181,305 146

Strengthen Cyber Security 40,000 10 40,000 10

Identity Assurance - e-Authentication Enhancements and Authorization Integration 24,300 21 24,300 21

Aging Technology Infrastructure 39,000 39,000

Migration to Cloud Services 20,000 20,000

Stabilize IT Operations 58,005 115 58,005 115

Support Taxpayer Services and Online Account Activities 18,026 126 18,026 126

Subtotal FY 2019 Program Increases Before Cap Adjustment $18,026 126 $181,305 146 $199,331 272

FY 2019 Request Before Cap Adjustment $2,241,000 24,668 $4,628,204 34,662 $4,155,796 10,959 $110,000 516 $11,135,000 70,805

Cap Adjustment Program Increases

Increase Audit Coverage 91,240 854 40,961 86 132,201 940

Increase Collection Coverage 45,338 402 18,594 31 63,932 433

Prevent Identity Theft & Refund Fraud & Reduce Improper Pymts 47,495 140 8,522 56,017 140

Improve Identity Assurance 29,586 21 29,586 21

Tax Return Preparer Compliance and Pro. Responsibility Activities 12,999 75 4,153 17,152 75

Expand CI for Cyber and Counterterrorism Investigations 7,571 25 929 8,500 25

Return Review Program 54,183 57 54,183 57

Subtotal FY 2019 Cap Adjustment Investments $204,643 1,496 $156,928 195 $361,571 1,691

Total FY 2019 Request Including Cap Adjustment $2,241,000 24,668 $4,832,847 36,158 $4,312,724 11,154 $110,000 516 $11,496,571 72,496

1See footnotes in 1.1 – Appropriations Detail Table

TAXPAYER SERVICES ENFORCEMENT OPERATIONS SUPPORT BSM TOTAL

Department of the Treasury

Departmental Offices

Salaries and Expenses

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019 
DO - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement ............................................................................................................... 3

B – Summary of the Request...................................................................................................... 3

1.1 – Appropriations Detail Table............................................................................................................4

1.2 – Budget Adjustments Table..............................................................................................................4

C – Budget Increases and Decreases Description ...................................................................... 5

1.3 – Operating Levels Table...................................................................................................................6

D – Appropriations Language and Explanation of Changes...................................................... 7

E – Legislative Proposals........................................................................................................... 7

Section II – Annual Performance Plan and Report................................................................... 8

A – Strategic Alignment ............................................................................................................. 8

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 – Executive Direction Resources and Measures..............................................................................8

2.1.2 – International Affairs and Economic Policy Resources and Measures..........................................9

2.1.3 – Domestic Finance and Tax Policy Resources and Measures......................................................14

2.1.4 – Treasury-wide Management and Programs Resources and Measures........................................19

C – Changes in Performance Measures.................................................................................... 24

Section III – Additional Information ........................................................................................ 25

A – Summary of Capital Investments....................................................................................... 25
DO - 3

Section I – Budget Request

A – Mission Statement

Maintain a strong economy and create economic and job opportunities by promoting conditions 

that enable economic growth and stability at home and abroad and manage the U.S. 

Government’s finances and resources effectively.

B – Summary of the Request 

The Department of the Treasury’s (Treasury) Strategic Plan for FY 2018-2022 guides program 

and budget decisions for the Departmental Offices (DO). The FY 2019 Budget Request supports 

DO’s leading role in accomplishing Treasury’s strategic goals:

 Boost U.S. Economic Growth

 Promote Financial Stability

 Enhance National Security

 Transform Government-wide Financial Stewardship

 Achieve Operational Excellence

Staffing and Full-Time Equivalent (FTE) Reduction

The Budget re-emphasizes the FTE reductions Treasury committed to in the FY 2018 President’s 

Budget. DO continues to streamline its workforce by finding more efficient ways to manage its 

programs and support the Presidential Executive Order for reorganizing the Executive Branch to 

improve the efficiency, effectiveness, and accountability of federal agencies.

Transfer of Administrative Support Programs to the Treasury Franchise Fund

The Budget proposes to transfer approximately $148.109 million and 165 direct FTE and 42 

reimbursable FTE for direct and reimbursable DO administrative services to the Treasury 

Franchise Fund to consolidate broad-scale administrative functions and capital investment 

activities into one account and to provide one governance process for reimbursable programs in 

DO. This transfer supports 22 customers and reimbursable agreements and 14 different 

programs.

The transfer and incorporation into the Franchise Fund structure provide the following benefits

to the Department and effected customers:

 Allows for more effective information technology (IT) and building infrastructure 

investments over multiple fiscal years and provides stability during a continuing resolution 

for more efficient contract execution.

 Provides customers with the consolidation of like services, consistent points of contact 

(POCs) for service providers, less confusion during budget execution, and increased, direct 

customer involvement through joint governance.

 Simplifies budget formulation and execution and allows for better staff leverage across 

functions. 

 Streamlines DO cash management as services would be paid for in consistent monthly 

amounts rather than billed in arrears based on actuals.
DO - 4

Budgetary Resources for DO administrative services would continue to be presented in the DO 

Salaries and Expenses (SE) account. DO SE will purchase administrative services from the 

Franchise Fund. Effective in FY 2019 the Fund will reflect the FTE associated with these 

services. 

Financial Literacy

More than 20 agencies administer programs to educate Americans about financial topics – but 

the effectiveness of these programs is not known. Under the Treasury Department’s leadership

of the Financial Literacy and Education Commission, we will better coordinate financial literacy 

programs across government to increase effectiveness and reduce fragmentation. Evaluating 

existing activities will help identify best practices and areas for streamlining. This approach will 

ensure that that federal financial education activities are coordinated around a shared set of 

government-wide goals, meet federal standards for effectiveness, and leverage best practices. 

1.1 – Appropriations Detail Table

Dollars in Thousands

Note: 

1. FY 2017 FTE are actuals. 

2. Excluded from the Appropriations Detail table is $28,000 for FY 2017 and $27,810 for FY 2018. These amounts represent 

administrative support for Terrorism and Financial Intelligence.

3. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.

1.2 – Budget Adjustments Table

DO Salaries and Expenses

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Executive Direction 140 $39,127 147 $38,937 113 $37,004 (34) ($1,933) -23.13% -4.96%

Domestic Finance and Tax Policy 313 $81,719 305 $80,948 224 $71,070 (81) ($9,878) -26.56% -12.20%

International Affairs and Economic Policy 257 $60,402 259 $60,082 195 $54,506 (64) ($5,576) -24.71% -9.28%

Treasury-w ide Management and Programs 146 $43,128 145 $42,885 114 $39,171 (31) ($3,714) -21.38% -8.66%

Subtotal New Appropriated Resources 856 $224,376 856 $222,852 646 $201,751 (210) ($21,101) -24.53% -9.47%

Other Resources

 Reimbursables 99 $76,458 100 $80,000 58 $12,066 (42) ($67,934) -42.00% -84.92%

Subtotal Other Resources 99 $76,458 100 $80,000 58 $12,066 (42) ($67,934) -42.00% -84.92%

Total Budgetary Resources 955 $300,834 956 $302,852 704 $213,817 (252) ($89,035) -26.36% -29.40%

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019

DO Salaries and Expenses FTE Amount

FY 2018 Annualized Continuing Resolution 856 $222,852

Changes to Base:

Maintaining Current Levels (MCLs): 0 $1,862

Pay Annualization 0 $677

Non-Pay 0 $1,185

Efficiency Savings (45) ($22,963)

Reduce Contracts, Supplies, and Equipment 0 ($8,266)

Streamline Staffing (45) ($14,697)

Transfers (165) $0

Centralized Treasury Administrative Services to 

the Treasury Franchise Fund (165) $0

Subtotal Changes to Base (210) ($21,101)

Total FY 2019 Request 646 $201,751

Dollars in Thousands
DO - 5

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$1,862,000 / +0 FTE

Pay Annualization +$677,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay-raise.

Non-Pay +$1,185,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Efficiency Savings.....................................................................................-$22,963,000 / -45 FTE

Reduce Contracts, Supplies, and Equipment -$8,266,000 / +0 FTE 

DO will achieve savings through reductions to non-labor activities, such as service contracts, 

equipment, and supplies. These savings include potential reductions in advisory services, 

electronic data and periodical subscriptions, warehouse footprint, janitorial and landscaping 

services, FOIA assistance, and contractual support related to the American Recovery and 

Reinvestment Act.

Streamline Staffing -$14,697,000 / -45 FTE 

To align with the Administration’s goal to rebuild the national defense and invest in the Nation’s 

most pressing security needs, DO is implementing a staffing streamlining effort to maximize

effectiveness and efficiency while ensuring appropriate levels for meeting Treasury’s mission 

and objectives. 

Transfers.................................................................................................................+$0 / -165 FTE

DO Administrative Services to the Treasury Franchise Fund +$0 / -165 FTE 

DO proposes to move administrative services to the Treasury Franchise Fund in FY 2019 to 

consolidate broad-scale administrative functions and capital investment activities into one 

account. It would also provide one governance process for reimbursable programs in DO. The 

Franchise Fund structure would allow for more effective capital investments over multiple fiscal 

years and provide stability during a continuing resolution for more efficient contract execution. 

Customers would benefit from the consolidation of like services, consistent points of contacts for 

service providers, less confusion during budget execution, and increased, direct customer 

involvement through joint governance. Administrative programs would benefit because they 

would budget for and execute all services in one account and be able to better leverage staff 

across functions. The move also would streamline cash management because services would be 

paid for in consistent monthly amounts rather than billed in arrears based on actuals.
DO - 6

1.3 – Operating Levels Table

Dollars in Thousands

DO Salaries and Expenses FY 2017 FY 2018 FY 2019

Object Classification Enacted Annualized CR Request

11.1 - Full-time permanent 113,585 112,814 82,660 

11.3 - Other than full-time permanent 1,620 1,609 1,760 

11.5 - Other personnel compensation 2,079 2,065 2,535 

11.9 - Personnel Compensation (Total) 117,284 116,488 86,955 

12.0 - Personnel benefits 33,571 33,343 26,741 

Total Personnel and Compensation Benefits $150,855 $149,831 $113,696 

21.0 - Travel and transportation of persons 4,239 4,210 3,299 

22.0 - Transportation of things 367 365 171 

23.1 - Rental payments to GSA 850 844 281 

23.2 - Rental payments to others 893 887 1,004 

23.3 - Communications, utilities, and miscellaneous charges 407 404 94 

24.0 - Printing and reproduction 135 134 6 

25.1 - Advisory and assistance services 19,767 19,633 8,503 

25.2 - Other services from non-Federal sources 7,985 7,931 3,591 

25.3 - Other goods and services from Federal sources 25,869 25,693 64,924 

25.5 - Research and development contracts 2,447 2,430 0 

25.7 - Operation and maintenance of equipment 613 609 227 

26.0 - Supplies and materials 3,817 3,791 2,706 

31.0 - Equipment 6,132 6,090 3,249 

Total Non-Personnel $73,521 $73,021 $88,055 

New Budgetary Resources $224,376 $222,852 $201,751 

FTE 856 856 646 

Notes: 

1. FY 2017 FTE are actuals.

2. Excluded from the Operating Levels table is $28,000 for FY 2017 and $27,810 for FY 2018. These amounts represent 

administrative support for Terrorism and Financial Intelligence.

3. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.
DO - 7

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

DEPARTMENTAL OFFICES

Federal Funds

SALARIES AND EXPENSES

(INCLUDING TRANSFER OF FUNDS)

For necessary expenses of the Departmental Offices including operation 

and maintenance of the Treasury Building and Freedman's Bank

Building; hire of passenger motor vehicles; maintenance, repairs, and 

improvements of, and purchase of commercial insurance policies for, 

real properties leased or owned overseas, when necessary for the

performance of official business; executive direction program activities; 

international affairs and economic policy activities; domestic finance 

and tax policy activities, including technical assistance to state and 

local entities; and Treasury-wide management policies and programs 

activities, $201,751,000: Provided, That of the amount appropriated 

under this heading—

(1) not to exceed $700,000 is for official reception and 

representation expenses;

(2) not to exceed $258,000 is for unforeseen emergencies of a 

confidential nature to be allocated and expended under the direction 

of the Secretary of the Treasury and to be accounted for solely on 

the Secretary's certificate; and

(3) not to exceed $24,000,000 shall remain available until 

September 30, 2020, for—

(A) the Treasury-wide Financial Statement Audit and Internal 

Control Program;

(B) information technology modernization requirements;

(C) the audit, oversight, and administration of the Gulf Coast 

Restoration Trust Fund;

(D) the development and implementation of programs within the 

Office of Critical Infrastructure Protection and Compliance 

Policy, including entering into cooperative agreements;

(E) operations and maintenance of facilities; and

(F) international operations.

Note.—A full-year 2018 appropriation for this account was not enacted 

at the time the budget was prepared; therefore, the budget assumes this 

account is operating under the Continuing Appropriations Act, 2018 

(Division D of P.L. 115–56, as amended). The amounts included for

2018 reflect the annualized level provided by the continuing resolution.

The Department of 

the Treasury, on 

behalf of the United 

States, will assume 

the Presidency of 

the Financial 

Action Task Force 

(FATF) in 

2019. Organized 

by the G7 in 1989 

to focus on money 

laundering, the 

FATF has grown to 

include nearly 40 

members and its 

mandate has 

expanded to include 

terrorist financing 

and proliferation 

financing as well as 

money 

laundering. The 

Administration 

requests an increase 

to the Department’s 

official reception 

and representation 

expenses authority 

to allow the Office 

of Terrorism and 

Financial 

Intelligence to 

support the FATF 

plenary meetings 

and the role and 

duties of the 

Presidency of such 

Task Force.

E – Legislative Proposals

Sec. 129 - Amounts made available under the heading "Office of Terrorism and Financial 

Intelligence" shall be available to reimburse the "Departmental Offices—Salaries and Expenses" 

account for expenses incurred in such account for reception and representation expenses to 

support activities of the Financial Action Task Force.
DO - 8

Section II – Annual Performance Plan and Report

 

A – Strategic Alignment

DO is Treasury’s headquarters bureau. It provides leadership in economic and financial policy, 

financial intelligence and enforcement, and general management. Treasury utilizes effective 

management, policies, and leadership to protect our national security through targeted financial 

actions, to promote the stability of the nation’s financial markets, and to ensure the government’s 

ability to collect revenue and fund its operations. DO aligns to all Treasury strategic goals and 

objectives. Specific alignment by budget activity is indicated below.

B – Budget and Performance by Budget Activity

2.1.1 Executive Direction Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $35,763 $34,588 $35,313 $37,778 $36,706 $38,937 $37,004

Other Resource $4,691 $15,137 $21,677 $29,632 $22,997 $30,491 $4,308 

Budget Activity Total $40,454 $49,725 $56,990 $67,410 $59,703 $69,428 $41,312

FTE 156 162 189 206 169 187 137

Executive Direction Budget and Performance

($37,004,000 from direct appropriation, $4,308,000 from reimbursable resources): 

The Executive Direction program area provides direction and policy formulation to DO and the 

rest of Treasury and interacts with Congress and the public on policy matters. 

No specific performance goals/measures are presented for this budget activity because the work 

of these offices is captured within the other budget activities.
DO - 9

2.1.2 International Affairs and Economic Policy Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $56,804 $56,265 $57,362 $59,061 $60,613 $60,082 $54,506

Other Resource $2,275 $4,891 $5,896 $14,680 $10,617 $8,373 $1,888

Budget Activity Total $59,079 $61,156 $63,258 $73,741 $71,230 $68,455 $56,394

FTE 232 226 259 272 268 265 197

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

IA - Monitor Quality and Enhance 

Effectiveness of International 

Monetary Fund (IMF) Lending 

Through Review of IMF Country 

Programs

100 100 100 100 100 100 100 100

IA - Monitor Quality and Enhance 

Effectiveness of MDB Lending 

Through Review of MDB Grant and 

Loan Proposals

100 100 100 100 100 100 100 100

IA - Percentage of MDB Grant and 

Loan Proposals Containing 

Satisfactory Frameworks for Results 

Measurement

92 93 93 89 96 94 95 95

IA - Timely Review of CFIUS Cases 100 100 100 100 100 100 100 100

OTA - Program Engagement 3.8 3.7 3.8 3.9 4.0 3.6 3.6 3.6

International Affairs and Economic Policy Budget and Performance 

($54,506,000 from direct appropriation, $1,888,000 from reimbursable resources): 

The offices in this budget activity promote economic growth in the U.S. by producing technical 

economic analyses for the Secretary and advancing U.S. economic and financial policy priorities 

around the world. 

Office of International Affairs (IA)

This office supports the following strategic objectives for Strategic Goal 1, to boost U.S. 

economic growth:

 Objective 1.2 – Strong Economic Fundamentals: Spur faster economic growth by right-sizing 

Treasury and other regulations and advancing domestic economic policies that boost 

investment, employment, and innovation. 

 Objective 1.4 – Free and Fair Trade: Advance a free and fair trade environment for U.S. 

businesses through successful negotiation of trade agreements and investment policies. 

This office supports the following strategic objectives for Strategic Goal 2, to promote financial 

stability: 

 Objective 2.2 – Foreign Exchange Practices: Achieve fair foreign exchange practices through 

multilateral engagement with international partners. 
DO - 10

 Objective 2.3 – Foreign Technical Assistance: Provide technical assistance to enable foreign 

partner countries to better raise and manage financial resources and protect their financial 

sectors. 

This office supports the following strategic objectives for Strategic Goal 3, to enhance national 

security: 

 Objective 3.1 – Strategic Threat Disruption: Identify, dismantle, and disrupt priority threats 

to the U.S. and international financial system. 

 Objective 3.3 – Economic Strength and National Security: Advance American prosperity and 

security through growth, investment, trade, and expanding the American industrial base 

while protecting national security. 

This office supports the following strategic objective for Strategic Goal 4, to transform 

government-wide financial stewardship: 

 Objective 4.1 – Financial Data Access/Use: Increase the access and use of federal financial 

data to strengthen government-wide decision-making, transparency, and accountability. 

This office supports the following strategic objective for Strategic Goal 5, to achieve operational 

excellence:

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission. 

In FY 2017, the Office of International Affairs (IA) worked to put in place policies that achieve 

faster U.S. and global growth and higher after-tax wages for American workers. This involved 

ambitious reforms for taxes, regulation, trade, the budget, energy, financial regulation, 

infrastructure, and international relations, all of which will continue into FY 2018. 

In its role as lead for international negotiations on non-insurance financial services and transfers, 

Treasury pursued critical financial services commitments and robust transfer provisions of trade 

and investment negotiations. Treasury plays a key role in the North America Free Trade 

Agreement (NAFTA) negotiations, aimed at working towards a more balanced agreement. 

Treasury also plays an important U.S. Government role on broader trade issues such as State 

Owned Enterprises, Customs, and other trade related disciplines that impact Treasury 

equities. Treasury is playing a lead role in analyzing the implications for U.S. financial services 

firms of the United Kingdom’s exit from the European Union. In addition, as the U.S. lead in 

negotiating reductions of export finance subsidies, Treasury continues to press China and other 

major providers of export finance to agree to disciplines on government support, so that U.S. 

exporters can compete globally on a level playing field. These efforts serve not only to enhance 

U.S. competitiveness but also move export credit financing to a more market basis consistent 

with Congressional mandates.

Treasury works to address the large and persistent global imbalances and unfair currency 

practices that threaten strong and sustainable U.S. economic growth. Treasury seeks to level the 

playing field for U.S. businesses through multilateral and bilateral engagements on foreign 

exchange practices. Treasury does this via multilateral and bilateral activities working through 

the International Monetary Fund (IMF) and the Group of 20 Nations (G-20). The G-20 Finance 
DO - 11

Ministers agreed to a regular IMF report assessing progress toward achieving strong, sustainable, 

and balanced growth, as well as the potential for policy development and policy issues related to 

achieving faster and more sustainable adjustment of external imbalances. Treasury is also 

focused on combatting unfair currency practices that disadvantage U.S. industry and workers 

and, to this end, has strengthened the semi-annual surveillance of the exchange rate practices of 

major U.S. trading partners. Treasury also continues to press for stronger exchange rate 

surveillance in the IMF. 

Treasury continues to enhance its oversight of the multilateral development banks’ (MDB)

policies and programs, particularly with respect to the expansion of their loan programs when 

market financing is generally plentiful. In particular this year, Treasury worked with the World 

Bank and others to establish the Women Entrepreneurs Finance Initiative to create a holistic 

public and private sector approach to addressing the constraints faced by female entrepreneurs 

and help fill a major gap in women’s access to finance. 

IA rebalanced resource allocations to reflect changing mission requirements. Areas addressed in 

the reallocation include the increasing demands associated with chairing the Committee on 

Foreign Investment in the United States (CFIUS). IA continued to direct additional existing 

staffing resources to increase its capacity to manage a record-breaking caseload in terms of 

volume and complexity. Treasury, as chair of CFIUS, coordinates an interagency process to 

review certain foreign investments for national security risks in accordance with the procedures 

and tight deadlines specified in law and regulation. 

 Timely Review of CFIUS Cases: This measure tracks compliance with statutory deadlines 

for completing national security reviews of transactions notified to the CFIUS to ensure that 

the CFIUS process is timely and efficient. The target (100 percent) was met in FY 2017.

IA’s target for this measure in FY 2018 and FY 2019 is 100 percent.

Treasury promotes economic growth by managing U.S. participation and leveraging U.S. 

leadership positions in the International Financial Institutions in order to mitigate emerging 

threats to the U.S. and global economies; support international trade and investment; and 

reinforce U.S. national security interests in key countries around the world. 

 Monitor Quality and Enhance Effectiveness of IMF Lending through Review of IMF 

Country Programs: This measure tracks efforts by IA staff to monitor the quality of IMF 

country programs and ensure the application of appropriately high standards for the use of 

IMF resources. The target (100 percent) was met in FY 2017. In FY 2018 and FY 2019, 

IA’s target for this measure remains 100 percent.

 Monitor Quality and Enhance Effectiveness of MDB Lending through Timely Review of 

MDB Grant and Loan Proposals: IA reviews MDB loan and grant proposals to ensure that 

funded projects meet several key goals, which include supporting long-term U.S. objectives, 

having a measurable development impact, and being consistent with congressional mandates. 

The target (100 percent) was met in FY 2017. In FY 2018 and FY 2019, IA aims to continue 

its review of 100 percent of MDB loan and grant proposals prior to the date of the relevant 

Executive Board meeting and increase its oversight of projects during implementation.
DO - 12

 Percentage of MDB Grant and Loan Proposals Containing Satisfactory Frameworks for 

Results Measurement: This measure tracks the percentage of grant and loan project proposals 

that contain a satisfactory framework for measuring project results (such as outcome 

indicators, quantifiable and time-bound targets, etc.) This information is measured on an 

annual basis. In FY 2017, 96 percent of MDB grant and loan project proposals had excellent 

or satisfactory ratings for the results matrices, a significant increase from FY 2016. The 

FY 2018 target is 95 percent, and the FY 2019 target is 95 percent.

Treasury’s Office of Technical Assistance (OTA) complements Treasury’s international 

economic and terrorist financing policy work. Treasury’s offices of International Affairs and 

Terrorism and Financial Intelligence advocate for improvements in economic and terrorist 

financing policies internationally. OTA helps the governments of developing and transition 

countries build the human and institutional capacity to implement such policy improvements. 

Finance ministries and central banks of developing countries that have demonstrated a strong 

commitment to reforming their financial systems or public financial management can receive 

direct assistance from OTA through its cadre of expert advisors. The technical assistance team 

leverages its funding to increase transparency and accountability, reduce corruption, and 

strengthen the development of market-based policies and practices in these economies. 

OTA support promotes more effective use of a country’s own resources and helps reduce 

dependency on foreign aid. This work also supports stabilization of financial sectors in national 

security/foreign policy priority countries (e.g., Ukraine), more transparent and accountable 

financial sectors for U.S. investors overseas, and the expansion of markets for U.S. exporters, 

thus promoting jobs and economic growth at home. 

 Office of Technical Assistance (OTA) Program Engagement (Traction): Measures the 

degree to which foreign counterparts are engaging proactively and constructively with OTA 

advisors, at the working and policy levels. Counterpart engagement is both a key outcome of 

OTA efforts to structure and execute effective technical assistance projects that support host 

country ownership as well as the most crucial input to the successful achievement of the 

intermediate goals and ultimate outcomes described in the project’s terms of reference and 

work plan during the fiscal year – such as passage of law or regulation, an increase in 

government revenues, an improvement in a government’s credit rating, or a reduction in 

economic crimes. The measure is scored on a 5-point scale and averaged across all projects 

to provide one overall measure of OTA’s performance. In FY 2017, the Traction score was

4.0, exceeding the target of 3.6. In FY 2018 and FY 2019, IA’s target for Traction is 3.6.

Office of Economic Policy (EP)

This office supports the following strategic objective for Strategic Goal 1, to boost U.S. 

economic growth:

 Objective 1.2 – Strong Economic Fundamentals: Spur faster economic growth by right-sizing 

Treasury and other regulations and advancing domestic economic policies that boost 

investment, employment, and innovation.

This office supports the following strategic objective for Strategic Goal 3, to enhance national 

security: 

 Objective 3.2 – AML/CFT Framework: Identify and reduce vulnerabilities in the U.S. and 

international financial system to prevent abuse by illicit actors. 
DO - 13

This office supports the following strategic objective for Strategic Goal 5, to achieve operational 

excellence:

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission. 

During the past year, EP staff in the Office of Macroeconomic Analysis closely monitored U.S. 

economic performance, producing many hundreds of succinct, quick-turn reports on more than 

50 recurring economic indicators. In related work, the office produced memos for the 

Secretary covering pre-release data reports on roughly ten recurring economic indicators. The 

office’s high-quality analytic updates served as DO’s main internal source of information on 

U.S. macroeconomic developments and informed a wide range of high-level engagements and 

official publications, including the Treasury Bulletin, Bank/Fund meetings, the report to 

Congress titled, “Foreign Exchange Policies of Major Trading Partners of the U.S.,” the 

Quarterly Refunding Report, the Annual Financial Report, and many ad hoc requests for U.S. 

economic background material. The Macro office also served as Treasury’s lead in the “Troika” 

process, a semi-annual exercise in which Treasury, the Office of Management and Budget 

(OMB), and the Council of Economic Advisers develop the economic assumptions that drive the 

Administration’s ten-year forecast and directly determines the Administration’s annual budget 

proposals. Economists from EP represented the United States at Organisation for Economic Cooperation and Development (OECD) working group meetings on country forecasts. Finally, the

office continued to deliver the High-Quality Market Corporate Yield Curve (a set of daily rates 

issued on a monthly basis) as mandated under the Pension Protection Act and to produce a 

Treasury Real Coupon-Issue Yield Curve, a companion to the Treasury Nominal Coupon-Issue 

Yield Curve, and several other yield curves. These yield curve data are used extensively 

throughout the private sector and executive agencies that administer private and public pension 

programs and other future payment programs to calculate their annual liabilities.

Economic Policy staff in the Office of Microeconomic Analysis also produced an estimate of 

state Total Taxable Resources, which estimates the relative fiscal capacity of states and is used in 

determining the allocation of funds for the Community Mental Health Services and Substance 

Abuse Prevention and Treatment block grant programs. The Office of Microeconomic Analysis 

has been actively engaged in helping the public and policymakers understand important 

economic policy issues. Activities included a continuing series of Economic Security issue 

briefs covering older women and the safety net; substantial contributions to a report on the effect 

of the Consumer Financial Protection Bureau’s arbitration rule; a congressionally requested 

report on agricultural exports to Cuba; and economic analysis of sanctions-related policies. 

Finally, the office continued to lead a government-wide effort to close the skills gap in the 

economist occupation in the Federal Government by coordinating efforts between the economist 

workforce and Office of Personnel Management and OMB to promote better recruitment, 

retention, and development of economists in the federal workforce.
DO - 14

2.1.3 Domestic Finance and Tax Policy Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $68,351 $81,783 $76,520 $79,748 $81,410 $80,948 $71,070

Other Resource $12,804 $24,997 $40,240 $55,231 $38,650 $40,140 $5,609 

Budget Activity Total $81,155 $106,780 $116,760 $134,979 $120,060 $121,088 $76,679

FTE 326 339 364 398 365 358 256

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

DF-Variance Between

Estimated and Actual Receipts 

(Annual Forecast)(%)

2.5 3.25 2.8 3.1 4 4.25 4.25 4.25

Domestic Finance and Tax Policy Budget and Performance 

($71,070,000,000 from direct appropriation, $5,609,000 from reimbursable resources): 

The Offices of Domestic Finance and Tax Policy monitor policy, legislation, and regulations, 

and provide advice and assistance to the Secretary about the financial services sector and taxes, 

as well as financial markets and the regulation of financial institutions. The Office of Tax Policy 

supports the administration’s efforts in tax reform legislative proposals and regulatory 

implementation.

Office of Domestic Finance (DF)

This office supports the following strategic objective for Strategic Goal 1, to boost U.S. 

economic growth:

 Objective 1.2 – Strong Economic Fundamentals: Spur faster economic growth by right-sizing 

Treasury and other regulations and advancing domestic economic policies that boost 

investment, employment, and innovation. 

This office supports the following strategic objectives for Strategic Goal 2, to promote financial 

stability:

 Objective 2.1 – Housing Finance Reform: Support housing finance reform to resolve 

Government-Sponsored Enterprise (GSE) conservatorships and prevent taxpayer bailouts of 

public and private mortgage finance entities, while promoting consumer choice within the 

mortgage market. 

 Objective 2.4 – Financial Sector Critical Infrastructure and Cybersecurity: Enhance security, 

improve resiliency, and reduce the risk of significant cybersecurity and other incidents to the 

financial sector’s critical infrastructure, domestically and internationally. 

This office supports the following strategic objectives for Strategic Goal 4, to transform 

government-wide financial stewardship: 

 Objective 4.1 – Financial Data Access/Use: Increase the access and use of federal financial 

data to strengthen government-wide decision-making, transparency, and accountability. 

 Objective 4.2 – Debt Management: Fund the Federal Government at the least cost over time. 
DO - 15

 Objective 4.3 – Federal Financial Performance: Improve federal financial management 

performance using innovative practices to support effective government. 

This office supports the following strategic objective for Strategic Goal 5, to achieve operational 

excellence:

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission. 

In FY 2017, DF worked to promote America’s long-term economic strength and stability by 

preserving confidence in the U.S. Treasury securities market, managing federal fiscal operations

and the U.S. government’s debt, advising state and local governments about their finances, 

supporting small businesses, and strengthening financial institutions and markets. DF advanced 

several key policies of the new administration, particularly financial regulatory reform and 

national security.

Some of the most important DF work during FY 2017 was to listen to a wide range of 

stakeholders and develop recommendations for reforming the financial regulatory system. In 

2016, the Government Accountability Office (GAO) released a report that concluded that 

significant fragmentation, overlap, and duplication exists within the regulatory framework. 

Specifically, GAO found the existing structure does not always ensure efficient and effective 

oversight, consistent financial oversight, and consistent consumer protections.

On February 3, 2017, the President issued an executive order on Core Principles for Regulating 

the United States Financial System (Executive Order 13772). These Core Principles include 

empowering Americans to make independent financial decisions, save for retirement, and build 

individual wealth. The Core Principles also include preventing taxpayer-funded bailouts and 

promoting the competitiveness of American companies—both at home and abroad—while 

making regulation efficient, effective, and appropriately tailored. 

In June 2017, Treasury issued the first in a series of reports applying these Core Principles to an 

examination of the U.S. financial regulatory system. In the first report, Treasury described the 

unique role of banks and credit unions. The U.S. banking system is the strongest in the world, 

and it is critical in supporting the U.S. economy. Treasury’s report makes numerous 

recommendations affecting the depository sector, including that capital, liquidity, and leverage 

rules be refined to increase the flow of credit so that U.S. banks remain globally competitive.

Given the breadth of the financial system and a complex regulatory environment, Treasury 

conducted further stakeholder outreach and issued additional reports and recommendations on 

regulation of the capital markets (second report) and the asset management and insurance 

industries (third report), both released in October 2017. A fourth report will cover nonbank 

financial institutions, financial technology, and financial innovation.

Significant reforms that promote growth while maintaining strong investor protections are 

possible. Recommendations include streamlining disclosure requirements to reduce costs 

incurred by companies while continuing to provide investors with key information needed for 

investment decisions. For example, disclosure and other requirements can be better tailored for 
DO - 16

companies going public based on their size. Treasury also recommends re-examining the 2012 

Jumpstart Our Business Startups Act (JOBS Act) to identify how its tools can be improved.

During FY 2017, DF also played an important role supporting critical infrastructure protection 

and cybersecurity in the financial services sector. DF’s Office of Critical Infrastructure 

Protection and Compliance Policy (OCIP) has an all-hazards mission to enhance the security and 

resilience of the financial services sector’s critical infrastructure. The cybersecurity threat 

represents one of the most significant challenges to our country’s national and economic 

security. Increasing cyber-attacks against U.S. financial institutions of all sizes could lead to a 

loss in confidence in the financial system and present significant economic challenges. Impacts 

could include degradation or outages of the functioning, reliability, confidentiality, 

trustworthiness, and continued availability of financial institutions’ services, financial 

information, customer information, and the financial critical infrastructure required to support 

the U.S. and global economies. 

DF continues working to address a wide range of evolving cybersecurity risks in collaboration 

with private and other public-sector organizations. These risks include (1) prioritization and 

collaboration, to include identifying and mitigating vulnerabilities before exploitation; 

(2) information sharing; (3) strengthening and promoting the use of voluntary, risk-based, 

baseline protections; and (4) response and recovery. DF engages with the financial services 

industry and government agencies, including federal and state financial regulators, on 

cybersecurity issues to mitigate potential vulnerabilities to the financial system and improve 

resilience.

The risks facing the sector continue to be magnified by the continuing evolution in technology 

complexity, speed, storage, and connectivity. The risks are magnified by the growth in the 

number and capability of malicious actors, some of whom are extraordinarily well-funded. Their 

growing sophistication means that there is an increasing potential for frequent incidents and 

widespread damage, particularly if they are not vigilantly monitored and mitigated.

To help identify areas for improvement, during FY 2017, OCIP led seven cybersecurity exercises 

involving government and private-sector participants and participated in several other exercises. 

The exercises explored a variety of threat scenarios and how the participants would respond. 

Participants developed after-action reports for future improvement to reduce vulnerabilities and 

reduce risks. 

Also, in Treasury’s roles as chair of the Financial and Banking Information Infrastructure 

Committee and members of the Financial Services Sector Coordinating Council, OCIP continued 

sharing cybersecurity information among the member organizations. Treasury also continues to 

encourage private-sector firms to voluntarily share actionable cybersecurity information among 

firms to minimize the time it takes to discover, contain, and mitigate cyber incidents, whether 

from malicious or natural causes. 

Another important DF responsibility is managing the U.S. government’s debt. The Office of 

Debt Management (ODM) seeks to fund the Federal Government at the least cost over time by 

working to maintain predictable issuance of Treasury debt, minimizing the amount of interest the 

government must pay, and managing debt maturity over time. In FY 2017, ODM determined for 

more than 275 auctions the amount and maturity of debt that the Bureau of the Fiscal Service 
DO - 17

issued. These debt issuances totaled $8.6 trillion and raised more than $500 billion in new cash 

to fund the U.S. government.

In addition, Treasury continues to make progress in its government-wide and department-wide 

implementation of the 2014 Digital Accountability and Transparency Act (DATA Act). The 

DATA Act requires the Federal Government to provide consistent, reliable, and useful online 

data about how it spends taxpayer dollars. In May 2017, DF launched the new 

USAspending.gov website. It allows taxpayers to examine nearly $4 trillion in annual federal 

spending and see how this money flows from congressional and presidential actions to local 

communities and businesses. The new site is the culmination of a nearly three-year collaborative 

effort led by Treasury and the Office of Management and Budget. The data is compiled from 

federal agencies and published quarterly.

DF has one performance measure:

Variance between estimated and actual receipts (annual forecast) (percent): As part of managing 

the Federal Government’s central operating account and cash position, the Office of Fiscal 

Projections (OFP) forecasts net cash flows (e.g., federal receipts, outlays, and other 

miscellaneous flows) to ensure that adequate funds are available daily to cover federal payments. 

To determine its overall effectiveness, one of OFP’s metrics is to measure the variance between 

actual and projected federal receipts. A lower variance is better. The actual variance for 

FY 2017 was 4.0 percent, which is significantly lower than the 4.25 percent target. Therefore, 

OFP achieved the goal. The targets for FY 2018 and FY 2019 are 4.25 percent.

Office of Tax Policy (OTP)

This office supports the following strategic objectives for Strategic Goal 1, to boost U.S. 

economic growth:

 Objective 1.1 – Tax Law Implementation: Administer tax law to better enable all taxpayers 

to meet their obligations, while protecting the integrity of the tax system. 

This office supports the following strategic objective for Strategic Goal 5, to achieve operational 

excellence:

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission. 

In FY 2017, OTP worked closely with the Administration, Congress, and Treasury leadership on 

tax reform, which was a principal goal of the Administration. OTP staff participated in frequent 

meetings with Congressional staff, senior White House officials and business and other outside 

parties with interests in tax policy and tax reform. The office analyzed hundreds of revenue 

estimates, distributional tables, and other analyses of the effects of tax reform. OTP’s work was 

crucial in informing the Administration’s views of the economic consequences of tax reform. In 

FY 2017, OTP developed guidance based upon Executive Order 13789 to eliminate or reduce 

burdens imposed on taxpayers by regulations. The office conducted a comprehensive review and 

identified over 300 regulations for potential revocation. For FY 2018, OTP identified eight 

regulations that will be subject to deregulatory action.

OTP also evaluated numerous proposals to modify the Affordable Care Act (ACA), continued 

evaluating and responding to applications received under ACA state innovation waivers, and 
DO - 18

evaluated and responded to applications relating to the Multi-Employer Pension Plan Act 

(MPRA).

OTP continued to provide leadership for the OECD, Global Forum, and G-20, advocating for the 

interests of U.S. based businesses. In FY 2018 and FY 2019, OTP plans to continue engaging in 

international negotiations to modernize existing treaties, establish key new treaty relationships,

and actively engage international organizations to protect the fiscal and business interests of the 

U.S.

In FY 2018 – FY 2019, OTP’s primary mission is to support tax reform implementation. This 

work will include transition guidance and regulatory guidance required to implement the changes 

to the law. Both OTP and the IRS acknowledge the need to undertake numerous regulatory 

actions to implement tax reform. 
DO - 19

2.1.4 Treasury-wide Management and Programs Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $35,223 $31,802 $35,971 $41,112 $43,387 $42,885 $39,171 

Other Resource $15,320 $30,858 $55,213 $3,339 $4,284 $996 $261 

Budget Activity Total $50,543 $62,660 $91,184 $44,451 $47,671 $43,881 $39,432 

FTE 123 139 171 124 153 146 114

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

EO 13771 - Number of Deregulatory 

Actions Issued *

N/A N/A N/A N/A N/A N/A I N/A

EO 13771 - Number of Deregulatory 

Actions Issued that Address 

Recommendations by the Regulatory 

Reform Task Force*

N/A N/A N/A N/A N/A N/A I N/A

EO 13771 - Number of Deregulatory 

Actions Issued that Address 

Recommendations by the Regulatory 

Reform Task Force to the Agency 

Head Consistent with Applicable Law *

N/A N/A N/A N/A N/A N/A I N/A

EO 13771 - Number of Evaluations to 

Identify Potential Deregulatory Actions 

That Included Opportunity for Public 

Input and/or Peer Review *

N/A N/A N/A N/A N/A N/A I N/A

EO 13771 - Number of Regulatory 

Actions Issued *

N/A N/A N/A N/A N/A N/A I N/A

EO 13771 - Total Incremental Cost of 

All Regulatory Actions and 

Deregulatory Actions (Including Costs 

or Cost Savings Carried Over From 

Previous Fiscal Years)

N/A N/A N/A N/A N/A N/A 0 N/A

Percent of Procurement Dollars Spent 

on Small Business 39.15 36.91 35.11 36.17 35 35 40 N/A

Treasury-wide Engagement Index of 

the FEVS 68 66 67 67 68 67 69 69

Treasury-wide Footprint (Square 

Footage) 37,320 36,411 35,439 34,894 34,100 34,310 33,600 33,100

Treasury-wide Leaders Lead Index of 

the Federal Employee Viewpoint 

Survey (FEVS)

N/A 53 54 55 56 55 57 58

Note: I – Performance Indicator 

* Executive Order 13771 requires the repeal of two regulatory actions for each new regulatory action issued by an agency. The 

Department is fulfilling this requirement by prioritizing burden-reducing, deregulatory actions. At this time Treasury does not have 

targets for these measures because it is still in the process of evaluating its deregulatory and regulatory actions for FY 2018.

Treasury-wide Management and Programs Budget and Performance 

($39,171,000 from direct appropriation, $261,000 from reimbursable resources): 

This budget activity includes offices that are responsible for the internal management and policy 

of the Department: the Office of the Assistant Secretary for Management; the Office of the 

Chief Information Officer; the Office of Privacy, Transparency, and Records; the Office of the 

Senior Procurement Executive; the Office of the Chief Human Capital Officer; the Office of 

Emergency Programs; the Office of the Deputy Chief Financial Officer; the Office of Civil 
DO - 20

Rights and Diversity; the Office of Minority and Women Inclusion; and the Office of the Deputy 

Assistant Secretary for Management and Budget. 

This office supports the following strategic objective for Strategic Goal 2, to promote financial 

stability:

 Objective 2.4 – Financial Sector Critical Infrastructure and Cybersecurity: Enhance security, 

improve resiliency, and reduce the risk of significant cybersecurity and other incidents to the 

financial sector’s critical infrastructure, domestically and internationally. 

This office supports the following strategic objectives for Strategic Goal 5, to achieve 

operational excellence:

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission.

 Objective 5.2 – Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure.

 Objective 5.3 – Customer Value: Improve customer value by increasing the quality and 

lowering the cost of Treasury’s products and services. 

Treasury-wide Management and Program’s performance metrics are: 

 Percentage of Procurement Dollars Spent on Small Business: In FY 2017, Treasury aimed to 

meet or exceed all small business contracting goals. Based on preliminary data, Treasury 

expects to meet or exceed all small business prime contracting goals. However, Treasury 

may not meet all small business subcontracting goals. The Small Business Administration 

(SBA) is expected to calculate the data in April 2018. The following Treasury bureaus were 

included in the goaling report, with no exclusions: Office of the Comptroller of the 

Currency, Office of Thrift Supervision, and the Bureau of Engraving and Printing (BEP).

The preponderance of the negative impact, on the goals, lies with BEP, which continues to 

face unique challenges. Because of the highly specialized nature of BEP in producing U.S. 

banknotes and the fixed costs associated with creating currency, there are a limited number 

of vendors globally who are able to supply key raw materials and highly specialized printing 

equipment to perform the work. In FY 2017, Treasury spend included 31 percent of 

industrial equipment and supplies related to the production and currency. There were no 

small businesses available to provide these supplies and services, effectively removing $287

million from Treasury’s available spend. Based on this unique circumstance, it will be 

difficult for the BEP to achieve its FY 2018 small business goals; thereby, impacting 

Treasury’s overall small business goal achievements. Treasury attended and conducted 

outreach activities to provide small business (SB), small and disadvantaged business (SDB), 

women-owned small business (WOSB), HUBZone small business (HZ), and service-disabled 

veteran-owned small business (SDVOSB) with information about specific contract 

opportunities and technical assistance about conducting business with Treasury. This 

outreach work will continue in FY 2018 and FY 2019. Particularly noteworthy is that 

Treasury far exceeded the contracting goals for the following socioeconomic groups: SDB at

five percent, WOSB at five percent, HZ at three percent, and SDVOSB at three percent. The 

following are Treasury’s expected goal achievements: SB - 35.07 percent, SDB – 14.16

percent, WOSB – 13.26 percent, HZ – 3.77 percent, and SDVOSB – 4.41 percent. 

Throughout FY 2018, Treasury will continue to employ the successful strategies of targeted 

outreach, enhanced leadership accountability, policies, tools and resources, and increased 
DO - 21

intra-agency communication with the expectation of achieving its goals. The FY 2018

overall small business goal has been set at 35 percent. The FY 2019 small business goal will 

be set in the Fall of 2018.

 Treasury-wide “Engagement” Index of Federal Employee Viewpoint Survey (FEVS): 

Treasury’s strategy focused on improving employee engagement in a number of areas, 

thereby creating an opportunity to improve the effectiveness of our workforce while 

improving our ranking among other federal agencies. Strategic efforts were focused on 

Overall Satisfaction, Leaders Lead, and the Inclusion Quotient – Fairness. Treasury 

conducted two Treasury-wide engagement review sessions for high-level leadership during 

FY 2016 in addition to bureau-level reviews. Treasury’s scores for the Engagement Index 

increased from 66 percent for FY 2015 to 67 percent for FY 2016, and 68 percent for FY 

2017. Treasury exceeded the government-wide rate by one percent in FY 2017.

 Treasury-wide Footprint (Square Footage): This goal measures the total square footage 

occupied by Treasury’s owned and leased buildings. To reduce the Department’s real 

property footprint and maximize the use of existing real property assets, the Department 

maximized space utilization by undertaking space realignments, consolidations, and 

improved work station standards. 

 Treasury-wide “Leaders Lead” Index of Federal Employee Viewpoint Survey (FEVS): 

Treasury also set the goal to increase the “Leaders Lead” index above FY 2015 results. 

Treasury’s score for the Leaders Lead Index increased from 54 percent in FY 2015 to 55 

percent in FY 2016, and Treasury’s score led the government-wide average by two 

percentage points. This Index also increased from 55 percent in FY 2016 to 56 percent in 

FY 2017 and exceeded the government-wide rate by one percent.

Office of the Chief Human Capital Officer

In FY 2017, Treasury revised its planning and monitoring process specific to Human Capital to 

comply with pending regulatory changes. Treasury has been identified as a federal leader in this 

area by the Office of Personnel Management and the Office of Management and Budget. These 

efforts resulted in the identification of the need to pursue a competency-based management 

approach to meet Treasury’s needs. The focus for FY 2018 will consist of solidifying the 

foundation to support a competency-based approach with implementation beginning in FY 2019. 

Additional efforts in FY 2018 include a continued focus on building workforce planning 

capabilities in support of federal efforts to expand the strategic management of federal human 

capital and close skills gaps in federal and Treasury mission-critical occupations. Treasury will 

also begin implementation of an enterprise Integrated Talent Management system that will, when 

fully deployed, provide employees a single, modern system for learning, performance, and career 

planning; give leadership a consolidated view of the Department’s human capital; and 

consolidate 24 stand-alone legacy systems into a single, cloud-based system.

Office of Civil Rights and Diversity

In FY 2017, Treasury developed a new Diversity and Inclusion Strategic Plan, which mapped to 

both the Department's Strategic Plan and the Human Capital Plan. The bureaus have developed

implementation plans specific to each bureau. The Office of Civil Rights and Diversity (OCRD)

coordinated with the Human Resources Engagement Strategy to improve the morale of the 

workforce as reflected in the Federal Employee Viewpoint Survey (FEVS), with a specific focus 

on the new Inclusion Quotient portion of the survey. Treasury’s scores in the Diversity and 

Inclusion portion of the FEVS have improved to a 62 percent positive rating, which is above the 

government-wide average. Scores around the Fairness of Employment Practices remain a 
DO - 22

concern at 50 percent, but still are above the Government-wide average. Continuing work, 

partnering with the Chief Human Capital Office, will be done to determine what is driving those 

numbers, and the Diversity and Inclusion and EEO offices will work closely on bureau 

engagement teams to improve the scores. OCRD also coordinated a number of major studies, 

including a barrier analysis of the Senior Executive Service at Treasury and a gender pay equity 

study. Additionally, this office continues to work with the Treasury Executive Institute to 

develop programming for executives and senior level staff in the areas of diversity and inclusion. 

The Treasury-wide EEO program showed marked improvements in the timeliness and efficiency 

ratings of both EEO investigations and issuance of final decisions, as well as in the use of 

alternative dispute resolution processes to resolve complaints in a timely manner. 

Office of the Deputy Chief Financial Officer

For FY 2017, the Department received its eighteenth consecutive unmodified audit opinion on its 

Treasury-wide financial statements. Treasury anticipates unmodified audit opinions for the 

consolidated audit for FY 2018 and FY 2019. Overall, the Department has made strong progress 

in enhancing its internal control environment and remains committed to ensuring high standards 

of integrity and transparency in reporting its financial performance.

Office of Small and Disadvantaged Business Utilization

Based on preliminary data, Treasury is on track to meet or exceed all small business prime 

contracting goals. The consistent “A” score is a testament to the hard work and professionalism 

of the procurement and acquisition teams across Treasury’s bureaus and the serious commitment 

to utilizing small businesses that emanates from Treasury’s leadership. To comply with Section

15 (k), Small Business Act, the Department focused on small business prime and subcontracting 

goal achievements. 

Office of the Senior Procurement Executive

In FY 2017, Treasury continued a comprehensive acquisition transformation strategy designed to 

facilitate innovation, strategic management, efficiency, and effective mission outcomes. Central 

to the strategy is early planning and broad stakeholder participation as well as accelerated 

transition to strategic acquisition vehicles. In support of the Federal Information Technology 

Acquisition Reform Act, the Department has placed significant focus on IT acquisition across all 

procurement programs.

In FY 2017, Treasury continued successful execution of its Major Acquisition Program (MAP) 

reviews in which primary and senior stakeholders (to include procurement, customer, program 

management, and legal representatives) jointly and periodically review procurement strategy and 

progress for critical acquisitions. These reviews provide a forum for development of effective 

acquisition strategies; early identification and resolution of problems; and sharing of experience 

and expertise among various stakeholder personnel. FY 2017 reviews focused on pre and post 

award actions and were designed to facilitate successful award of critical contracts. To help 

ensure successful contract performance outcomes, FY 2017 MAP reviews were expanded to 

include existing critical contracts. In FY 2017, Treasury reviewed 51 acquisitions, valued at 

$4.9 billion; reviews included 23 IT acquisitions valued at $3.5 billion. The Department 

anticipates a similar level of oversight and collaboration in FY 2018 and FY 2019.

Treasury has achieved both savings and efficiencies through aggregating requirements and 

leveraging its purchasing power via enterprise-level management of common spend 
DO - 23

categories. By fully utilizing category management, Treasury seeks to save the Federal 

Government money through smarter purchasing and greater collaboration across stakeholder 

organizations and to achieve greater efficiency with fewer resources. Treasury FY 2018 and 

FY 2019 strategy extends and expands Treasury’s transition to the Office of Management and 

Budget’s (OMB) preferred contract vehicles, reducing the need to establish department level 

contracts and freeing associated resources for focus on other acquisition priorities. In FY 2017, 

Treasury successfully coordinated with OMB’s Category Management Program Management 

Office (PMO) to more accurately measure Treasury’s progress in achieving government-wide 

category management goals. As a result of OPE’s efforts, the Department’s utilization of OMB 

preferred contracts increased by $86 million in FY 2016, $102 million in FY 2017, and $32

million so far in FY 2018. The Department anticipates a similar level of progress and 

collaboration in FY 2018 and FY 2019, bringing Treasury into compliance with the goals 

established by the President’s Management Agenda. 
DO - 24

C – Changes in Performance Measures 

Performance Measure or Indicator Change and Justification

1. EO 13771 - Number of Deregulatory 

Actions Issued 

(New Treasury-wide Management 

Performance Indicator)

EO 13771 encourages agencies to issue two deregulatory items for each new regulatory action (as that 

term is defined in OMB guidance). Treasury has an 

inventory of EO 13771 items and through the work of 

the Regulatory Reform Task Force, will continue to add 

items to that list.

2. EO 13771 - Number of Deregulatory 

Actions Issued that Address 

Recommendations by the Regulatory 

Reform Task Force

(New Treasury-wide Management 

Performance Indicator)

EO 13777 authorizes a Regulatory Reform Task Force 

chaired by a Regulatory Reform Officer. The task force 

is reviewing items listed on Treasury’s EO 13771 

inventory as well as items recommended by 

stakeholders in response to a June 14, 2017 request for 

information. The task force will make 

recommendations about deregulatory actions to 

prioritize.

3. EO 13771 - Number of Deregulatory 

Actions Issued that Address 

Recommendations by the Regulatory 

Reform Task Force to the Agency Head 

Consistent with Applicable Law

(New Treasury-wide Management 

Performance Indicator)

EO 13777 authorizes a Regulatory Reform Task Force 

chaired by a Regulatory Reform Officer. The task force 

is reviewing items listed on Treasury’s EO 13771 

inventory as well as items recommended by 

stakeholders in response to a June 14, 2017 request for 

information. The task force makes recommendations in 

periodic reports to the Secretary

4. EO 13771 - Number of Evaluations to 

Identify Potential Deregulatory Actions 

That Included Opportunity for Public Input 

and/or Peer Review

(New Treasury-wide Management 

Performance Indicator)

EO 13771 encourages agencies to seek public input on 

deregulatory actions to prioritize. The Department 

issued a request for information in the Federal Register 

on June 14, 2017 and the bureaus were encouraged to 

share that request with stakeholders. Additional 

contacts with stakeholders on this subject should be 

included in this count.

5. EO 13771 - Number of Regulatory Actions 

Issued

(New Treasury-wide Management 

Performance Indicator)

EO 13771 regulatory actions are those designated as 

such by the Office of Information and Regulatory 

Affairs (OIRA), Office of Management and Budget. 

These regulations would be included in the 

Department’s inventory of EO 13771 regulatory items 

and may include significant regulatory actions under EO 

12866.

6. EO 13771 - Total Incremental Cost of All 

Regulatory Actions and Deregulatory 

Actions (Including Costs or Cost Savings 

Carried Over From Previous Fiscal Years)

(New Treasury-wide Management 

Performance Measure)

EO 13771 mandates that the cost of regulations must be 

zero and encourages agencies to achieve a cost savings. 

In order to achieve this zero cost, agencies must offset 

any costly regulations with de-regulatory actions that 

cover the cost.

With the publication of Treasury’s Strategic Plan for FY 2018-2022, Treasury will work in FY 

2018 to baseline performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 budget.
DO - 25

Section III – Additional Information

A – Summary of Capital Investments

A summary of capital investment resources, including major information technology and nontechnology investments can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

Cybersecurity Enhancement 

Account

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
CEA - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .............................................................................................. 3

1.2 – Budget Adjustments Table................................................................................................. 4

C – Budget Increases and Decreases Description....................................................................... 4

1.3 – Operating Levels Table...................................................................................................... 5

D – Appropriations Language and Explanation of Changes ...................................................... 6

E – Legislative Proposals............................................................................................................ 6

Section II – Annual Performance Plan and Report................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity ...................................................................... 7

2.1.1 – Cybersecurity Enhancement Account Resources and Measures................................... 7

C – Changes in Performance Measures...................................................................................... 8

Section III – Additional Information .......................................................................................... 9

A – Summary of Capital Investments......................................................................................... 9
CEA - 3

Section I – Budget Request

A – Mission Statement

Bolster the Department’s cybersecurity posture and mitigate cybersecurity threats to the U.S. 

financial infrastructure. 

B – Summary of the Request 

The Department’s strategic plan guides program and budget decisions for the Cybersecurity 

Enhancement Account (CEA). The FY 2019 Budget Request supports two of the Treasury’s 

FY 2018-2022 Strategic Goals: Promote Financial Stability and Achieve Operational 

Excellence.

Trillions of dollars are accounted for and processed by the Department of the Treasury's 

information technology (IT) systems, and therefore, they are a constant target for sophisticated

threat actors. To more proactively and strategically protect Treasury systems against

cybersecurity threats, the FY 2019 budget requests $25.208 million for the CEA. The account

identifies and supports Department-wide investments for critical IT improvements, including the 

systems identified as High Value Assets (HVAs). Furthermore, the centralization of funds 

allows Treasury to more nimbly respond in the event of a cybersecurity incident as well as

leverage enterprise-wide services and capabilities across the components of the Department.

By managing CEA centrally, Treasury elevates the importance of such initiatives and provides 

Treasury leadership, OMB, and Congress with better transparency into cybersecurity activities 

across the Department. Enhanced transparency also improves Department-wide coordination of 

cybersecurity efforts and improves the Department’s response and recovery capabilities. With 

high-level support, the program provides a platform to enhance efficiency, communication, 

transparency, and accountability around the mission.

1.1 - Appropriations Detail Table

Note: 

1. FY 2017 FTE are actuals.

2. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.

Dollars in Thousands

Cybersecurity Enhancement Account

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Cybersecurity Enhancement Account 1 $47,743 19 $47,419 19 $25,208 0 ($22,211) 0.00% -46.84%

Total Budgetary Resources 1 $47,743 19 $47,419 19 $25,208 0 ($22,211) 0.00% -46.84%

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019
CEA - 4

1.2 – Budget Adjustments Table

Dollars in Thousands

Cybersecurity Enhancement Account FTE Amount

FY 2018 Annualized Continuing Resolution 19 $47,419 

Changes to Base:

Non-Recurring Costs 0 ($22,629)

Evolving High Impact Fund 0 ($14,899)

Enhancements to the Treasury Secure Data Network 0 ($3,671)

Data Loss Protection Analytics Capabilities 0 ($1,202)

Encrypted Traffic Inspection and Data Loss Prevention at 

the Fiscal Service Trusted Internet Connections (TIC)

0 ($685)

Malware Content Filter 0 ($2,172)

Program Increases: 0 $418 

One-time Changes of other Initiatives 0 $418 

Subtotal Changes to Base 0 ($22,211)

Total FY 2019 Base 19 $25,208 

Total FY 2019 Request 19 $25,208 

C – Budget Increases and Decreases Description

Program Decreases ...................................................................................-$22,629,000 / +0 FTE

Non-Recurring Costs -$22,629,000 / +0 FTE

Evolving High Impact Fund -$14,899,000 / -0 FTE

The Evolving High Impact Fund was funded at $14.9 million in FY 2017 for three years to 

ensure that new and ever-evolving threats can be rapidly addressed before they are exploited. 

Treasury leadership manages the fund, to include receiving solicitations from across the 

Department and managing and allocating resources based on criteria and need at Treasury offices 

and bureaus. Treasury proposes in FY 2019 to discontinue the Evolving High Impact Fund to 

prioritize investment in other high priority areas and the operations and maintenance of 

continuing investments.

Enhancements to the Treasury Secure Data Network -$3,253,000 / -0 FTE

The FY 2019 level reflects the funding required to maintain investments made in FY 2017 and 

FY 2018. These funding levels will allow for continuation of the multi-year plan to ensure that 

CEA-funded investments to the Treasury-wide SECRET collateral network support: increased 

overall stability and integrity; continued implementation of enhancements to modernize 

infrastructure; improved Disaster Recovery program and capability; increased timeliness of 

incident response and recovery; improved responsiveness and detection to cybersecurity threats; 

and enhanced security monitoring by the Government Security Operations Center.

The TSDN enhancements will also provide advanced toolsets for automated monitoring, as well 

as analyst review of outputs from these toolsets. These funds will also improve security 

operations, configuration management, and reporting.

Data Loss Protection Analytics Capabilities -$1,202,000 / -0 FTE

The FY 2019 level reflects the funding required to maintain investments made in FY 2017 and 

FY 2018. This funding supports enhancements to the Treasury enterprise security operations 
CEA - 5

center analytical capabilities. These capabilities will enable faster detection and containment of 

attacks on Treasury’s IT assets.

Encrypted Traffic Inspection and Data Loss Prevention at the Fiscal Service Trusted Internet 

Connections (TIC) -$685,000 / -0 FTE

The FY 2019 level reflects the funding required to maintain investments made in FY 2017 and 

FY 2018. This capability, installed at Treasury’s enterprise internet gateways, enhances 

Treasury’s ability to detect, investigate, and respond to unauthorized attempts to access and 

remove sensitive taxpayer and financial data from the Treasury network and bureau networks.

Malware Content Filter -$2,172,000 / -0 FTE

The FY 2019 level reflects the funding required to maintain investments made in FY 2017 and 

FY 2018. This capability, installed at Treasury’s enterprise internet gateways, allows Treasury 

to identify and remove malicious attachments and links from web and email traffic before they 

reach the Treasury network. This reduces the risk of compromise for the entire Treasury 

network, as well as systems housed on that network, including High Value Assets.

Program Increases ........................................................................................+$418,000 / +0 FTE

One-time Changes of other Initiatives +$418,000 / +0 FTE

This line reflects the net of six minor changes to CEA initiatives from the FY 2018 Annualized 

CR. These initiatives are: High Value Assets, Cybersecurity Infrastructure, Incident Response 

and Recovery, Cyber Risk and Threat Identification, Mitigation of Cyber Threats to Financial 

Services Sector, and Cybersecurity for Classified Networks.

1.3 – Operating Levels Table

Dollars in Thousands 

Bureau Name FY 2017 FY 2018 FY 2019

Object Classification Enacted Annualized CR Request

11.1 - Full-time permanent 2,480 2,463 2,499 

11.5 - Other personnel compensation 35 35 36 

11.9 - Personnel Compensation (Total) 2,515 2,498 2,535 

12.0 - Personnel benefits 727 722 770 

Total Personnel and Compensation Benefits $3,242 $3,220 $3,304 

21.0 - Travel and transportation of persons 24 24 24 

23.3 - Communications, utilities, and miscellaneous charges 55 55 55 

25.1 - Advisory and assistance services 14,204 14,106 6,271 

25.2 - Other services from non-Federal sources 8,870 8,810 1,836 

25.3 - Other goods and services from Federal sources 8,018 7,964 2,504 

25.7 - Operation and maintenance of equipment 500 497 499 

26.0 - Supplies and materials 173 172 173 

31.0 - Equipment 12,657 12,571 10,542 

Total Non-Personnel $44,501 $44,199 $21,904 

New Budgetary Resources $47,743 $47,419 $25,208 

FTE 1 19 19 

Note: 

1. FY 2017 FTE are actuals.

2. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury
CEA - 6

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

DEPARTMENTAL OFFICES

Federal Funds

CYBERSECURITY ENHANCEMENT ACCOUNT

(INCLUDING TRANSFER OF FUNDS)

For salaries and expenses for enhanced cybersecurity for 

systems operated by the Department of the Treasury, 

$25,208,000, to remain available until September 30, 2021: 

Provided, That amounts made available under this heading 

shall be in addition to other amounts available to Treasury 

offices and bureaus for cybersecurity.

Note.—A full-year 2018 appropriation for this account was 

not enacted at the time the budget was prepared; therefore, 

the budget assumes this account is operating under the 

Continuing Appropriations Act, 2018 (Division D of P.L. 

115–56, as amended). The amounts included for 2018 reflect 

the annualized level provided by the continuing resolution.

E – Legislative Proposals

The Cybersecurity Enhancement Account has no legislative proposals.
CEA - 7

Section II – Annual Performance Plan and Report

A – Strategic Alignment

The project to mitigate cyber threats to the U.S. financial services sector supports the following 

Department of the Treasury’s FY 2018-2022 Strategic Plan objective for Strategic Goal 2, to 

promote financial stability:

• Objective 2.4 – Financial Sector Critical Infrastructure and Cybersecurity: Enhance security, 

improve resiliency, and reduce the risk of significant cybersecurity and other incidents to the 

financial sector’s critical infrastructure, domestically and internationally. 

All other projects have the common purpose of strengthening the security of Treasury’s IT assets 

and supports the following strategic objective for Strategic Goal 5, to achieve operational 

excellence: 

• Objective 5.2 – Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure. 

Additionally, these projects will ensure compliance with both OMB and Executive Orders 

involving the security of government IT assets. To achieve these objectives, Treasury is 

deploying a multi-pronged approach of strategically procuring hardware and software, 

streamlining business processes while expanding security monitoring, and ensuring

accountability at all levels. 

B – Budget and Performance by Budget Activity

2.1.1 Cybersecurity Enhancement Account Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources 0 0 0 0 $8,442 $47,419 $25,208 

Budget Activity Total 0 0 0 0 $8,442 $47,419 $25,208 

FTE 0 0 0 0 1 19 19

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Number of major incidents N/A N/A N/A N/A N/A N/A I TBD

Number of reported incidents N/A N/A N/A N/A N/A N/A I TBD

Percentage of Tier I High Value Assets 

(HVA) with an overdue Risk and 

Vulnerability Assessment (RVA) or 

Security Architecture Review (SAR)

N/A N/A N/A N/A N/A N/A B TBD

Risk Management Assessment Overall 

Rating N/A N/A N/A N/A N/A N/A B TBD

Key: B - Baseline: I – Performance Indicator
CEA - 8

Cybersecurity Enhancement Account (CEA) Budget and Performance

($25,208,000 from direct appropriations):

The purpose of CEA is to strategically mitigate cybersecurity risks through a centralized 

program with Department-wide impact. Due to the increasing number and sophistication of 

cyberattacks, Treasury leadership has prioritized cybersecurity and supports the centralization of 

department-wide cybersecurity initiatives through the CEA account and budget activity. Current 

bureau-level cybersecurity spending remains in the base budgets of each bureau. 

C – Changes in Performance Measures

The CEA was established as a new account in FY 2017. As capabilities funded by the CEA 

become operational, Treasury will capture baseline data for the following metrics in order to 

establish targets for the FY 2020 budget submission.

Performance Measure or Indicator Change and Justification

1. Number of Major Incidents

(New Performance Indicator)

The number of major incidents, as defined in 

OMB M-18-02, reported by Treasury to 

Congress in a given fiscal year. This is a 

measure of how effective Treasury’s collective 

defenses are at mitigating the most damaging 

security threats.

2. Number of Reported Incidents

(New Performance Indicator)

The number of cybersecurity incidents reported 

by Treasury to US-CERT in a given fiscal year. 

This is a measure of how effective Treasury’s 

defenses are at mitigating all security threats, as 

well as an indicator of how often Treasury is 

being targeted by malicious actors. If the 

number of reported incidents rises while the 

number of major incidents remains steady, it 

may indicate an effective cybersecurity program.

3. Percentage of Tier I High Value 

Assets (HVA) with an overdue Risk 

and Vulnerability Assessment (RVA) 

or Security Architecture Review 

(SAR)

(New Performance Measure)

The percentage of Treasury’s top tier high value 

assets scheduled for a third party risk 

assessment, but that did not undergo one on 

time. This is a measure of how often Treasury’s 

most important systems are being actively 

reviewed and assessed for weaknesses that could 

be exploited by an adversary.
CEA - 9

Performance Measure or Indicator Change and Justification

4. Risk Management Assessment Overall 

Rating

(New Performance Measure)

This is an assessment performed by OMB to 

evaluate agencies’ overall cybersecurity risk 

management capabilities. It consists of a risk 

management rating and a maturity rating. This 

is a measure of how well Treasury is managing 

risk across the enterprise as well as the maturity 

level of the program.

With the publication of Treasury’s Strategic Plan for FY 2018-2022, Treasury will work in FY 

2018 to baseline performance against the new strategic objectives. This may result in additional

performance measure changes in the FY 2020 budget.

Section III – Additional Information

A – Summary of Capital Investments

Capital investments that support CEA are included in the Departmental Offices plan. A 

summary of capital investment resources, including major information technology and nontechnology investments can be found at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury 

Department-wide Systems and 

Capital Investments Program 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019 
DSCIP - 2 

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement .................................................................................................................3

B – Summary of the Request .......................................................................................................3

1.1 - Appropriations Detail Table ................................................................................................3

1.2 – Budget Adjustments Table ..................................................................................................3

C – Budget Increases and Decreases Description ........................................................................3

1.3 – Operating Levels Table .......................................................................................................4

E – Legislative Proposals .............................................................................................................5

Section II – Annual Performance Plan and Report ................................................................... 6

A – Strategic Alignment ..............................................................................................................6

B – Budget and Performance by Budget Activity .......................................................................6

2.1.1 Department-wide Systems and Capital Investments Program Resources and Measures ...6

Section III – Additional Information .......................................................................................... 7

A – Summary of Capital Investments ..........................................................................................7

 
DSCIP - 3 

Section I – Budget Request 

A – Mission Statement 

Improve infrastructure, modernize business processes, and increase efficiency through capital 

investments that support the missions of all Treasury bureaus and programs. 

B – Summary of the Request 

The Department-wide Systems and Capital Investments Program (DSCIP) account provides a 

mechanism for Treasury to fund capital investments that have complex contracts with projects 

that span several fiscal years. Treasury owns and operates two historic office buildings in 

downtown Washington, D.C. – the Main Treasury Building and the Freedman’s Bank Building 

(FBB). In FY 2016, Treasury conducted an assessment of both buildings and found a range of 

needs that include immediate safety/health risks, capital renewal to address systematic and 

mechanical failure, and building modernization. It is estimated that it will cost $95.5 million to 

address all of the issues identified in the report. The Department plans to work through these 

accumulated needs over time. The FY 2019 request of $4.0 million addresses Phase II of the 

Main Treasury roof replacement and the exterior façade repair and restoration of the FBB. This 

investment supports the Treasury goal to Achieve Operational Excellence. 

 

1.1 - Appropriations Detail Table 

Note: The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For 

further details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 

1.2 – Budget Adjustments Table 

Dollars in Thousands 

Department-wide Systems and Capital 

Investments Program FTE Amount

FY 2018 Annualized Continuing Resolution 0 $2,980 

Changes to Base: 

Non-Recur 0 ($2,980) 

Subtotal Changes to Base 0 ($2,980) 

Total FY 2019 Base 0 $0 

Program Changes: 

Program Increases: 0 $4,000 

Phase II Main Treasury Roof Replacement 0 $2,000 

Freedman’s Bank Building Exterior Repair and 

Restoration 0 $2,000 

Total FY 2019 Request 0 $4,000 

C – Budget Increases and Decreases Description 

Dollars in Thousands

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Department-w ide Systems and Capital 

Investments Program 0 $3,000 0 $2,980 0 $4,000 $0 $1,020 NA 34.23%

Total Budgetary Resources 0 $3,000 0 $2,980 0 $4,000 0 $1,020 NA 34.23%

Change % Change

FY 2019 Department-wide Systems and Capital 

Investments Program

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request
DSCIP - 4 

Non-Recurring Costs ................................................................................ -$2,980,000 / +0 FTE 

Non-Recur -$2,980,000 / +0 FTE 

In the FY 2018 Annualized Continuing Resolution, $2,980,000 is provided for Phase I of the 

Main Treasury building roof replacement, new electrical service to the FBB, and fire safety for 

FBB stairwells.

Program Increases ..................................................................................... +$4,000,000 / +0 FTE

Phase II Main Treasury Roof Replacement +$2,000,000 / +0 FTE 

The Main Treasury Building roof has reached its normal life expectancy and routine 

maintenance can no longer prevent leaks. This request continues the roof replacement project 

proposed with the FY 2018 request.

Freedman’s Bank Building Exterior Repair and Restoration +$2,000,000 / +0 FTE 

The exterior façade has never undergone a comprehensive restoration and currently reflects 

nearly 100 years of wear and pollutants. Similar to the roofing system, the exterior façade is 

experiencing leaks at numerous locations which compromise the interior finishes and the 

occupant health and safety. Perimeter walls at the basement and sub-basement levels have been 

leaking for years as a result of systematic building failures. As with the Treasury Building, FBB 

will require full exterior scaffolding in order to access the areas requiring work. The masonry 

restoration will provide a watertight envelope and stabilize all the historic fabric. The scope will 

address repair, cleaning, and repointing of all masonry surfaces. 

1.3 – Operating Levels Table 

Dollars in Thousands 

Department-wide Systems and Capital 

Investments Program FY 2017 FY 2018 FY 2019 

Object Classification Enacted Annualized CR Request 

25.2 - Other services from non-Federal sources 300 0 0 

32.0 - Land and structures 2,700 2,980 4,000 

Total Non-Personnel $3,000 $2,980 $4,000 

New Budgetary Resources $3,000 $2,980 $4,000 

 

FTE 0 0 0

Note: The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For 

further details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 
DSCIP - 5 

 D – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

DEPARTMENTAL OFFICES 

Federal Funds 

DEPARTMENT-WIDE SYSTEMS AND 

CAPITAL INVESTMENTS PROGRAM 

(INCLUDING TRANSFER OF FUNDS) 

For development and acquisition of automatic data 

processing equipment, software, and services and for repairs 

and renovations to buildings owned by the Department of the 

Treasury, $4,000,000, to remain available until September 

30, 2021: Provided, That these funds shall be transferred to 

accounts and in amounts as necessary to 

satisfy the requirements of the Department's offices, bureaus, 

and other organizations: Provided further, That this transfer 

authority shall be in addition to any other transfer authority 

provided in this Act: Provided further, That none of the funds 

appropriated under this heading shall be used to support or 

supplement "Internal Revenue Service, Operations Support" 

or "Internal Revenue Service, Business Systems 

Modernization".

Note.—A full-year 2018 appropriation for this account was 

not enacted at the time the budget was prepared; therefore, the 

budget assumes this account is operating under the 

Continuing Appropriations Act, 2018 (Division D of P.L. 

115–56, as amended). The amounts included for 2018 reflect 

the annualized level provided by the continuing resolution. 

E – Legislative Proposals 

The DSCIP has no legislative proposals. 
DSCIP - 6 

Section II – Annual Performance Plan and Report 

A – Strategic Alignment 

The DSCIP account provides a mechanism for Treasury to fund capital investments that have 

complex contracts with projects that span several fiscal years. Through the DSCIP account, the 

Treasury has been able to develop a Treasury-wide human resources information technology 

solution as well as fund the continual repair and restoration of the Main Treasury Building the 

FBB. 

DSCIP projects support the following strategic objective for Strategic Goal 5, to achieve 

operational excellence: 

 Objective 5.2 – Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure. 

B – Budget and Performance by Budget Activity 

2.1.1 Department-wide Systems and Capital Investments Program Resources and 

Measures 

Dollars in Thousands 

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

Actual Actual Actual Actual Actual Annualiz

ed CR Request 

Appropriated Resources 0 $2,725 $2,725 $1,250 $8,263 $2,980 $4,000 

Budget Activity Total 0 $2,725 $2,725 $1,250 $8,263 $2,980 $4,000 

FTE 0 0 0 0 0 0 0 

Department-wide Systems and Capital Investments Program 

($4,000,000 from direct appropriations): 

DSCIP enables the Department to make investments in capital improvements that support the 

missions of all Treasury bureaus and programs. 

Treasury Building - Repairs and Renovations

The Main Treasury Building and the FBB are owned by the Department and are Departmental 

Offices’ capital investments. The Main Treasury Building is the oldest departmental building and 

the third oldest federally occupied building in Washington, preceded only by the Capitol and the 

White House. The age and historical significance of the buildings, considered by some to be 

national treasures, create special conditions that do not exist in many other Federal office 

facilities. Continual upkeep, with close attention to historic preservation, is necessary in order to 

continue occupying these buildings. The FY 2018 request focuses on life safety, improved 

electrical service, and roof replacement. The FY 2019 request continues to focus on roof 

replacement and begins FFB exterior repair and renovation. 

With the publication of the Treasury Strategic Plan for FY 2018-2022, Treasury will work in FY 

2018 to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 budget. 
DSCIP - 7 

Section III – Additional Information 

A – Summary of Capital Investments 

A summary of capital investment resources, including major information technology and nontechnology investments can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx 

This website also contains a digital copy of this document.

Department of the Treasury

Office of Terrorism and 

Financial Intelligence

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
TFI - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .............................................................................................. 3

1.2 – Budget Adjustments Table................................................................................................. 4

C – Budget Increases and Decreases Description....................................................................... 4

1.3 – Operating Levels Table...................................................................................................... 7

D – Appropriations Language and Explanation of Changes ...................................................... 8

E – Legislative Proposals............................................................................................................ 8

Section II – Annual Performance Plan and Report................................................................... 9

A – Strategic Alignment ............................................................................................................. 9

B – Budget and Performance by Budget Activity ...................................................................... 9

2.1.1 – Terrorism and Financial Intelligence Resources and Measures ..................................... 9

Section III – Additional Information ........................................................................................ 14

A – Summary of Capital Investments....................................................................................... 14
TFI - 3

Section I – Budget Request

A – Mission Statement

Strengthen national security by using targeted financial measures to combat threats and protect 

the integrity of the financial system.

B – Summary of the Request 

The Department of the Treasury’s (Treasury) strategic plan guides program and budget decisions 

for the Office of Terrorism and Financial Intelligence (TFI). The FY 2019 Budget Request 

supports two of Treasury’s FY 2018-2022 Strategic Goals: Enhance National Security and 

Achieve Operational Excellence.

TFI requests $159.000 million, which is a $36.835 million increase from the FY 2018 

Annualized Continuing Resolution. The budget prioritizes funding for Treasury’s targeted 

financial tools that protect the U.S. and international financial system from abuse, as well as 

counter the financial networks that support terrorists, weapons proliferators, organized 

transnational crime, rogue regimes, and other threats.

Over the last several years, TFI’s role in protecting our national security has grown dramatically, 

which is reflected in this request for additional resources. TFI’s economic authorities have 

become one of this Administration’s and Congress’ top non-kinetic tools of choice with TFI 

deploying our economic authorities at a rapid pace to address some of our greatest national 

security threats. In addition to cutting off funding for terrorist groups, TFI’s authorities and 

actions proactively implement U.S. policy towards North Korea, Iran, ISIS and other terrorist 

organizations, Venezuela, Russia, human rights abusers, narcotics traffickers, and in other areas. 

In order to achieve maximum impact, and meet strategic and operational objectives, TFI requires 

the additional resources of this request. These resources will ensure that TFI has sufficient staff, 

remains agile, innovative, and strategic, enhances its infrastructure and analytic capability, and is 

able to support new initiatives and expanded authorities.

1.1 – Appropriations Detail Table

Notes: 

1. FY 2017 FTE are actuals.

2. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.

Dollars in Thousands

Terrorism and Financial Intelligence

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Terrorism and Financial Intelligence 395 $123,000 421 $122,165 518 $159,000 97 $36,835 23.04% 30.15%

Subtotal New Appropriated Resources 395 $123,000 421 $122,165 518 $159,000 97 $36,835 23.04% 30.15%

Other Resources

 Reimbursables 33 $6,491 36 $8,000 36 $8,000 0 $0 0.00% 0.00%

Subtotal Other Resources 33 $6,491 36 $8,000 36 $8,000 0 $0 0.00% 0.00%

Total Budgetary Resources 428 $129,491 457 $130,165 554 $167,000 97 $36,835 21.23% 28.30%

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019
TFI - 4

1.2 – Budget Adjustments Table

Dollars in Thousands

Terrorism and Financial Intelligence FTE Amount

FY 2018 Annualized Continuing Resolution 421 $122,165 

Changes to Base:

Maintaining Current Levels (MCLs): 0 $1,423 

Pay Annualization 0 $284 

Non-Pay 0 $1,139 

Subtotal Changes to Base 0 $1,423 

Total FY 2019 Base 421 $123,588 

Program Changes:

Program Increases: 97 $35,412 

Terrorist Financing Targeting Center 15 $12,392 

North Korea 69 $15,209 

Iran/Syria Sanctions 4 $1,565 

Russia/Ukraine Sanctions 4 $1,069 

Committee on Foreign Investment in the United States 3 $859 

TFI Data Discovery 0 $2,000 

Financial Action Task Force 0 $1,788 

Terrorist Finance and Financial Crimes 2 $530 

Total FY 2019 Request 518 $159,000 

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$1,423,000 / +0 FTE

Pay Annualization +$284,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay-raise. The budget assumes no pay 

raise for civilian employees in FY 2019.

Non-Pay +$1,139,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Program Increases..................................................................................+$35,412,000 / +97 FTE

Terrorist Financing Targeting Center +$12,392,000 / +15 FTE 

On May 21, 2017, the United States and the six Gulf Cooperation Council countries signed an

historic agreement announcing a joint commitment to establish the Terrorist Financing Targeting 

Center (TFTC). The TFTC’s efforts support the Administration’s priorities to fight terrorism in 

new and innovative ways through a multilateral initiative that will dramatically increase the 

ability to curb terrorist financing. The TFTC has already resulted in greater regional cooperation 

as evidenced by the joint designations by the seven participating members of TFTC on October 

25, 2017, that targeted terrorist leaders, financiers, and facilitators. The TFTC will continue to 

disrupt the finances and operations of terrorist organizations by identifying, tracking, and sharing 

information regarding terrorist financial networks; coordinating joint disruptive actions, like 

sanctions; and offering support to countries in the region that need assistance building capacity to 

counter terrorist finance threats.
TFI - 5

North Korea +$15,209,000 / +69 FTE

Recent provocations by the Democratic People’s Republic of Korea (DPRK) presents an urgent 

threat to our national security. Treasury has served a critical role in the Administration's 

maximum economic pressure campaign. This has included the use of unilateral designations and 

other economic authorities, analytic efforts to map out the front companies and other evasions 

schemes used by the Kim Jong-un regime, working closely with other countries to increase 

multilateral economic pressure, and communications with the financial sector through advisories 

and engagement to cut off North Korea's access to the international financial system. Given the 

nature and urgency of the threat, this request is necessary to continue to maximize economic 

pressure and support the Administration’s priorities to fight nuclear proliferation. It is 

specifically aimed at countering and neutralizing the DPRK’s efforts to undermine U.S. national 

security. This initiative expands TFI’s DPRK program and will have an immediate and strong 

impact in FY 2019.

Iran/Syria Sanctions +$1,565,000 / +4 FTE

The Administration remains committed to countering the threat posed by Iran by using 

Treasury’s economic authorities to deny the regime and the Islamic Revolutionary Guard 

funding for malign activities. TFI seeks to significantly increase its designations targeting Iran’s 

ballistic missile programs, terrorist activities, regional destabilization (Yemen, Syria), and human

rights violations. In addition to targeting Iran’s financing of the brutal Assad regime in Syria, 

TFI designated hundreds of Syria-related targets and has more than doubled the number of 

designated Syria targets since the start of the Syrian conflict. This request would provide 

dedicated resources needed to maintain pressure on Syria and target the financial networks that 

support Syria’s production or use of chemical weapons. Syria is a top White House priority and 

is also of particular interest to the legislative branch, with multiple sanctions-related bills in 

various stages of consideration. 

Russia/Ukraine Sanctions +$1,069,000 / +4 FTE

TFI requests additional resources to support sanctions programs related to the Russian energy 

sector, Russia’s malign activities in the Ukraine, and its corruption, cyber activity, and support to 

the Government of Syria. These resources would also support the significant mandatory 

reporting requirements of the Countering America's Adversaries Through Sanctions Act.

Committee on Foreign Investment in the United States (CFIUS) +$859,000 / +3 FTE

CFIUS is an inter-agency committee authorized to review transactions that could result in control 

of a U.S. business by a foreign person (“covered transactions”), in order to determine the effect 

of such transactions on the national security of the United States. Additional TFI resources are 

required to meet the increase in the CFIUS caseload. 

TFI Data Discovery +$2,000,000 / +0 FTE

TFI requests funding for the creation of a cross-TFI data discovery and analysis platform, which 

would enable analysts, investigators, and other appropriate staff from across the TFI enterprise to 

properly leverage Treasury's unique data holdings to execute TFI's mission more efficiently and 

effectively. Currently, TFI does not have an intra-enterprise IT system to enable the five TFI 

components to collaborate and exchange information in near real time. This effort would reduce

redundancy and increase the efficiency and effectiveness of the TFI workforce.
TFI - 6

Financial Action Task Force +$1,788,000 / +0 FTE

The Financial Action Task Force (FATF) is the global standard-setting body for Anti-Money 

Laundering/Combating the Financing of Terrorism (AML/CFT). Organized by the G7 in 1989

to focus on money laundering, the FATF has grown to include nearly 40 members and its 

mandate has expanded to include terrorist financing and proliferation financing as well as money 

laundering. There are also nine FATF-style regional bodies that, together with the FATF, can 

claim almost every country in the world as a member. There has been increased recognition of 

the FATF’s significance as an international body and of the relevance of the FATF’s work and 

its recommendations for both the public and private sectors. Treasury, TFI’s Office of Terrorist 

Financing and Financial Crimes (TFFC) specifically, was asked to assume Presidency of the 

FATF in 2019 on behalf of the United States. Assuming the FATF presidency provides a unique 

opportunity for the U.S. to lead the FATF during a time of considerable transition in the 

organization – the U.S. last held the FATF presidency in 1996. This opportunity positions the 

U.S. exceptionally well to ensure that the FATF’s strategic direction is in line with U.S. priorities 

for the organization: demonstrating the value of AML/CFT regulation; holding countries 

accountable for compliance failures; and restricting FATF budget increases. 

Terrorist Finance and Financial Crimes +$530,000 / +2 FTE

TFI requests two FTEs to develop and build global capacity to combat terrorist financing in the 

international arena. These FTEs will be responsible for establishing strategies and employing 

targeted financial measures to disrupt and dismantle the financial networks that support 

terrorism, proliferation of weapons of mass destruction, and organized crime. 
TFI - 7

1.3 – Operating Levels Table

Dollars in Thousands

Terrorism and Financial Intelligence FY 2017 FY 2018 FY 2019

Object Classification Enacted Annualized CR Request

11.1 - Full-time permanent 46,250 45,936 60,080 

11.3 - Other than full-time permanent 200 199 556 

11.5 - Other personnel compensation 1,000 993 1,078 

11.9 - Personnel Compensation (Total) 47,450 47,128 61,714 

12.0 - Personnel benefits 15,405 15,300 19,613 

Total Personnel and Compensation Benefits $62,855 $62,428 $81,327 

21.0 - Travel and transportation of persons 1,872 1,859 2,077 

22.0 - Transportation of things 278 276 809 

23.1 - Rental payments to GSA 136 135 139 

23.2 - Rental payments to others 246 244 251 

24.0 - Printing and reproduction 118 117 120 

25.1 - Advisory and assistance services 13,266 13,176 15,887 

25.2 - Other services from non-Federal sources 8,924 8,863 10,802 

25.3 - Other goods and services from Federal sources 31,609 31,396 43,818 

25.7 - Operation and maintenance of equipment 388 385 396 

26.0 - Supplies and materials 2,204 2,189 2,248 

31.0 - Equipment 1,104 1,097 1,126 

32.0 - Land and structures 0 0 0 

Total Non-Personnel $60,145 $59,737 $77,673 

New Budgetary Resources $123,000 $122,165 $159,000 

FTE 395 421 518 

Notes: 

1. FY 2017 FTE are actuals.

2. Included in BOC 25.3, $28,000 in FY 2017 and $27,810 in FY 2018 were transferred to DO Salaries and Expenses for 

administrative support. For FY 2019, DO proposes to move administrative services to the Treasury Franchise Fund. TFI has 

reserved $33,497 for administrative support from the Franchise Fund in FY 2019.

3. The FY 2017 Enacted column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.
TFI - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

OFFICE OF TERRORISM AND FINANCIAL 

INTELLIGENCE

Federal Funds

SALARIES AND EXPENSES

For the necessary expenses of the Office of Terrorism and 

Financial Intelligence to safeguard the financial system 

against illicit use and to combat rogue nations, terrorist 

facilitators, weapons of mass destruction proliferators,

money launderers, drug kingpins, and other national security 

threats, $159,000,000: Provided, That of the amounts 

appropriated under this heading, $10,000,000 shall remain 

available until September 30, 2020.

Note.—A full-year 2018 appropriation for this account was 

not enacted at the time the budget was prepared; therefore, 

the budget assumes this account is operating under the 

Continuing Appropriations Act, 2018 (Division D of P.L. 

115–56, as amended). The amounts included for 2018 reflect 

the annualized level provided by the continuing resolution.

E – Legislative Proposals

Sec. 129 - Amounts made available under the heading "Office of Terrorism and Financial 

Intelligence" shall be available to reimburse the "Departmental Offices—Salaries and Expenses" 

account for expenses incurred in such account for reception and representation expenses to 

support activities of the Financial Action Task Force.
TFI - 9

Section II – Annual Performance Plan and Report

A – Strategic Alignment

TFI programs support the following Department of the Treasury’s Strategic Plan for FY 2018-

2022. Strategic objectives for Strategic Goal 3, to enhance national security: 

 Objective 3.1 – Strategic Threat Disruption: Identify, dismantle, and disrupt priority threats 

to the U.S. and international financial system. 

 Objective 3.2 – AML/CFT Framework: Identify and reduce vulnerabilities in the U.S. and 

international financial system to prevent abuse by illicit actors. 

 Objective 3.3 – Economic Strength and National Security: Advance American prosperity and 

security through growth, investment, trade, and expanding the American industrial base 

while protecting national security. 

TFI programs support the following strategic objectives for Strategic Goal 5, to achieve 

operational excellence: 

 Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to accomplish 

our mission. 

 Objective 5.2 – Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure.

B – Budget and Performance by Budget Activity

2.1.1 Terrorism and Financial Intelligence Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualize

d CR Request

Appropriated Resources $96,116 $101,305 $112,160 $112,754 $121,580 $122,165 $159,000 

Other Resource $30,832 $31,293 $6,966 $6,329 $6,491 $8,000 $8,000 

Budget Activity Total $126,948 $132,598 $119,126 $119,083 $128,071 $130,165 $167,000 

FTE 388 376 385 414 428 457 554

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Impact of TFI Programs and Activities 8.3 8.5 8.8 8.7 8.5 8.5 8.5 8.5

Terrorism and Financial Intelligence Budget and Performance

($159,000,000 from direct appropriations, $8,000,000 from reimbursable resources):

TFI serves a distinct role in enhancing national security by deploying Treasury’s tools and 

authorities to protect the U.S. and international system from abuse and by combating rogue

regimes, terrorist facilitators, weapons proliferators, money launderers, drug kingpins, human 

rights abusers, cyber criminals and other illicit finance and national security threats. TFI does 

this by strategically applying the policy, law enforcement, intelligence, and regulatory tools, and 

authorities of its components in a calibrated manner to achieve maximum impact. In FY 2017, 

TFI successfully applied its diverse targeted financial measures, including financial sanctions 
TFI - 10

and regulatory tools that address major national security challenges. These challenges include 

North Korea, Iran, Syria, Venezuela, Russia, Sudan, ISIS, al-Qai’da, Hizbollah and others. In an 

effort to identify, disrupt, and dismantle these threats, TFI was able to deny revenue sources to 

these illicit actors. 

In the past year, TFI has played a lead role in pressuring terrorist groups and rogue regimes 

through its use of powerful U.S. sanctions authorities. For example, there are now six North 

Korea-related executive orders, in addition to robust congressional authorities, that we use to 

target key North Korean financial middlemen and others who support the regime. Over the last 

year, Treasury’s Office of Foreign Asset Control (OFAC) designated over 100 individuals and 

entities related to North Korea as part of our concerted effort to pressure the regime. Our focus 

on depriving North Korea of its ability to earn and move revenue through the international 

financial system means that we must work with other countries to achieve this goal. In addition 

to coordinating our domestic sanctions programs, TFI engages with leaders across the world to 

stress the importance of implementing United Nations Security Council Resolutions 

(UNSCRs). TFI also works bilaterally with governments and through the Financial Action Task 

Force (FATF) to ensure that countries have the regulatory framework in place to detect and 

freeze assets linked to North Korea.

On Iran, TFI has ramped up pressure on Iran and the Islamic Revolutionary Guard Corps (IRGC) 

for its malign activity, issuing seven tranches of sanctions, designating more than 70 targets in 

China, Iran, Lebanon, and Ukraine in connection with the IRGC, Iran’s ballistic missile program, 

human rights abuses, and support of terrorism through the financing groups such as Hizballah 

and Hamas and a host of Shi’a militant groups in Bahrain, Iraq, Syria and Yemen. Like Northern

Korea, Iran uses deceptive financial practices to generate revenue. As just one example, in 

November 2017, TFI sanctioned an Islamic Revolutionary Guards Corps-Qods Force (IRGCQF) network involved in a large-scale scheme to counterfeit Yemeni bank notes worth hundreds 

of millions of dollars to support its destabilizing activities.

The IRGC’s pervasiveness in the Iranian economy, Iran's systemic corruption, large-scale 

counterfeiting scheme, and Iran’s lack of transparency throughout the economy continues to be a 

primary concern. TFI has continued working through FATF to hold Iran accountable to its 

commitments in addressing its weak controls. 

Also, in FY 2017, as Head of Delegation to the FATF, TFI through TFFC, worked with 

international partners to advance other key U.S. AML/CFT priorities, including improving the 

effectiveness of FATF international standards, as well as identifying and addressing global 

AML/CFT typologies. TFI served as the co-chair of the FATF Inter-Cooperation Review Group, 

which publicly identifies countries with significant AML/CFT regulation and implementation 

deficiencies. TFI staff served as a financial or legal assessor on several FATF Mutual 

Evaluations and participated in or reviewed approximately 19 mutual assessment reports of 

FATF countries’ compliance with international AML/CFT standards, leading to substantive 

changes in some countries’ AML/CFT standards and laws. 

TFI protected the U.S. and international financial systems from abuse by illicit actors by issuing 

global targeting orders and financial advisories to the financial community on AML risks; 

engaging in public-private dialogues with banks and foreign regulators to discuss AML/CFT 
TFI - 11

trends; and leading illicit finance strategic dialogues, working groups, and public-private 

partnerships that seek to improve information sharing and advance systemic reforms. This work 

is a critical part of TFI’s efforts to address the constantly evolving risks to the U.S. and 

international financial system. 

To advance the fight against terrorist financing, all of the components of TFI worked to establish 

the Terrorist Financing Targeting Center (TFTC), as announced by President Trump during his 

May 2017 visit to Saudi Arabia. The TFTC is a key Administration and Treasury priority, colead by TFI, which brings together six Gulf nations for the purpose of concurrently addressing 

terrorist financing threats through joint designations and advancing AML/CFT systemic reforms. 

This effort has already produced results. On October 25, 2017, OFAC imposed sanctions against 

eight leaders, financiers, and facilitators of ISIS in Yemen and al-Qa’ida in the Arabian 

Peninsula along with one affiliated entity. All member states of the TFTC took concurrent 

actions against those individuals and entity, marking a major and historic step forward in the 

TFTC’s efforts to disrupt the finances and operations of terrorist organizations.

Throughout FY 2018 and FY 2019, TFI will focus heavily on strategically deploying its tools 

and authorities for maximum impact against national security and foreign policy challenges, as 

well as addressing risks to and vulnerabilities within the U.S. and international financial system. 

TFI will continue to focus on applying targeted financial measures against North Korea, Iran, 

and Russia, in addition to identifying, disrupting, and dismantling terrorist organizations, drug 

kingpins, transnational criminal organizations, and other threats to the U.S. and our international 

partners. 

The increased resources in this request will provide the necessary staff and supporting

infrastructure to meet TFI’s strategic objectives and performance requirements in critical mission 

areas. Included as new funding initiatives for FY 2018 and FY 2019 are resources to support the 

TFTC and increase cooperation with the GCC to counter the financing of terrorism. This request 

also funds the duties and responsibilities of TFI’s upcoming term as FATF President beginning 

in June 2018. This will allow Treasury and TFI to advance key U.S. AML/CFT priorities, 

including an increased focus on effective implementation of international AML/CFT standards;

AML/CFT and counter proliferation prosecutions; domestic and international information 

sharing on terrorist financing; examination of digital solutions to strengthening the Customer 

Due Diligence requirements; and holding countries accountable for AML/CFT compliance 

failures. 

 

Other TFI FY 2018 and FY 2019 priorities include:

 Collecting, analyzing, and disseminating information concerning illicit financing and national 

security threats.

 Assisting partner countries in the development and implementation of AML/CFT standards. 

 Identifying opportunities for Treasury to increase its use of authorities to combat terrorist 

financing in Africa, Asia, and the Middle East. 

 Modernizing, streamlining, and simplifying the regulatory framework to more effectively 

address national security priorities. 

 Coordinating analysis of available information sources obtained through Treasury 

administration authorities or foreign partners.
TFI - 12

 Expanding current and facilitating new information sharing between governments, law 

enforcement, financial institutions, and international partners to address threats to and 

vulnerabilities within the U.S. and international financial system. 

 Increasing Treasury’s ability to deter, detect, and mitigate insider threats by leveraging 

counterintelligence, security, information assurance, and other relevant resources.

 Assessing and improving Treasury’s security clearance processes.

 Increasing focus on cybersecurity and intellectual property activities.

Terrorism and Financial Intelligence Offices Supporting the AML/CFT Mission

This budget request supports three of the four components within TFI that exercise AML/CFT 

authorities and responsibilities. The fourth component, Financial Crimes Enforcement Network 

(FinCEN), reports directly to the Under Secretary for TFI but is budgeted separately as a bureau 

within the Treasury.

Office of Terrorist Financing and Financial Crimes (TFFC)

TFFC is responsible for formulating and coordinating comprehensive strategies to target national 

security and foreign policy threats and safeguard the U.S. and international financial systems 

from abuse. In performing its mission, TFFC works across TFI, as well as interagency and law 

enforcement, to ensure that Treasury’s tools are strategically applied and calibrated for 

maximum impact against global threats such as North Korea, Iran, Venezuela, Russia, ISIS and 

Hizballah, among others. TFFC also leads the development of AML/CFT regulatory and 

outreach initiatives and collaborates with Federal law enforcement on financial crime

methodology analysis. Domestically, TFFC performs a critical role in working with key 

stakeholders to increase the security of our financial systems, leading public-private sector 

dialogues, financial experts meetings, and other strategic initiatives to identify and address 

potential vulnerabilities. TFFC also serves as the primary interlocutor with international partners 

whether on a bilateral basis or in multi-lateral fora to enhance information sharing, advance

systemic reforms, synchronize targeted actions, and increase pressure on other countries to

address specific illicit finance concerns in line with U.S. national security priorities. TFFC 

serves as the head of the U.S. Delegation to the Financial Action Task Force, the international 

body that sets standards and promotes effective implementation of AML/CFT legal, regulatory 

and operational measures that protect the integrity of the international financial system. TFFC is 

also leading Treasury’s efforts to operationalize the Terrorist Financing Targeting Center.

Office of Intelligence and Analysis (OIA)

As one of 17 members of the U.S. Intelligence Community, the OIA is responsible for producing 

all-source intelligence analysis that identifies threats to and vulnerabilities within the 

international financial system; driving and delivering intelligence that meets the needs of all 

Treasury decision makers; and providing the security infrastructure to protect Treasury’s 

physical and information security apparatus. OIA executes this mission by producing expert 

intelligence analysis on support networks of terrorists, proliferators of weapons of mass 

destruction, transnational criminal organizations, and other key national security risks. OIA 

works with the Director of National Intelligence and other IC agencies to help ensure better IC 

integration and drive priority collection for Treasury. OIA security personnel also ensure that all 

necessary Treasury personnel are properly trained to safeguard information systems and 

infrastructure, as well as maintaining a robust and effective counterintelligence program 
TFI - 13

designed to detect and disrupt foreign intelligence threats directed at the Department of the 

Treasury. Finally, OIA also provides timely, accurate, and focused intelligence on the full range 

of economic, political, and security issues, including key Treasury priorities such as assessments 

for the Committee on Foreign Investment in the United States (CFIUS). OIA also leads 

Treasury’s Insider Threat Program on the classified network system.

Office of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control administers and enforces economic and trade sanctions 

based on U.S. foreign policy and national security goals against over 40 targeted foreign 

countries and regimes, terrorists, international narcotics traffickers, those engaged in activities 

related to the proliferation of weapons of mass destruction, and other threats to the national 

security, foreign policy, or economy of the United States. OFAC acts under Presidential national 

emergency powers, as well as authority granted by specific legislation, to impose controls on 

transactions and freeze assets under U.S. jurisdiction. Many of the sanctions are based on United 

Nations and other international mandates, are multilateral in scope, and involve close 

cooperation with allied governments. OFAC vigorously enforces the sanctions programs it 

administers, and conducts civil enforcement investigations against U.S. and non-U.S. individuals 

and entities who threaten the integrity of its sanctions programs. OFAC’s enforcement actions 

and activities – including civil monetary penalties, non-public disruptive intervention, and public 

outreach – illuminate evasion schemes and enlist the private sector in its sanctions efforts.

Additionally, OFAC administers a licensing program through which it reviews and then 

authorizes or denies requests to conduct certain transactions or activities that would otherwise be 

prohibited. OFAC is continually evaluating and adjusting its sanctions programs to ensure that it 

is prohibiting illicit activity, while allowing activity that is consistent with or advances U.S. 

national security and foreign policy.

Description of TFI’s Performance:

Impact of TFI Programs and Activities: To gauge its performance, TFI created a composite 

measure consisting of three program office focus areas related to its mission and strategic goals, 

including customer outreach, increasing production and dissemination of intelligence products, 

and implementing IT modernization projects. In FY 2017, TFI met its performance goal of 8.5 

and expects to achieve its FY 2018 and FY 2019 target of 8.5.

With the publication of the Treasury Strategic Plan for FY 2018-2022, TFI will work this year to 

baseline performance for the new strategic objectives, as well as update TFI’s Strategic Plan to 

ensure Treasury and Administration priorities are accurately reflected. As part of Treasury’s 

Strategic Planning process, TFI established strategic objectives focused on key Treasury 

priorities including strategic threat disruption and strengthening the AML/CFT framework. TFI 

then built out robust strategies and support strategies that work toward achieving our goals 

within one, three, and five year time frames. These strategies reflect specific Treasury and 

Administration priorities that include the strategic use of Treasury’s tools and authorities to 

disrupt the capability of targets to raise, use, and move funds, identifying threats from known and 

emerging threats; expanding current and facilitating new information sharing and collaboration 

with domestic and international partners (an Agency Priority Goal); coordinating analysis of all 

available information sources obtained through Treasury authorities or foreign partners; applying 

a risk-based approach to identifying and vulnerabilities within the financial system; and 
TFI - 14

modernizing and streamlining the national security regulatory framework. This will likely result 

in changes to performance measures in the FY 2020 budget. 

Section III – Additional Information

A – Summary of Capital Investments

A summary of capital investment resources, including major information technology and nontechnology investments can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

Office of Inspector General

Congressional Budget

Justification and Annual 

Performance Report and Plan

FY 2019
OIG - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table ............................................................................................................4

1.2 – Budget Adjustments Table ..............................................................................................................4

C – Budget Increases and Decreases Description....................................................................... 4

1.3 – Operating Levels Table ...................................................................................................................5

D – Appropriations Language and Explanation of Changes ...................................................... 6

E – Legislative Proposals............................................................................................................ 6

Section II – Annual Performance Plan and Report................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity .................................................................... 11

2.1.1 Audit Resources and Measures........................................................................................ 11

Audit Budget and Performance................................................................................................. 11

Section III – Additional Information ........................................................................................ 14

A – Summary of Capital Investments....................................................................................... 14
OIG - 3

Section I – Budget Request

A – Mission Statement

To promote the integrity, efficiency, and effectiveness of Treasury programs and operations. 

B – Summary of the Request 

The FY 2019 request for $36,000,000 for the OIG will be used to fund critical audit, 

investigative, and mission support activities to meet the requirements of the Inspector General 

Act of 1978, and other statutes including, but not limited to: the Cybersecurity Act of 2015;

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank); Federal 

Information Security Modernization Act (FISMA); Government Management Reform Act;

Improper Payments Elimination and Recovery Act; Digital Accountability and Transparency Act 

of 2014 (DATA Act); Federal Deposit Insurance Act; Small Business Jobs Act of 2010; and 

Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the 

Gulf Coast States Act of 2012 (RESTORE Act). Specific mandates include audits of the 

Department’s financial statements, the Department’s compliance with FISMA, the Department’s 

actions in implementing cyber security information sharing, material loss reviews for failed 

insured depositary institutions regulated by the Office of the Comptroller of the Currency (OCC), 

and spending data submitted by the Department to USASpending.gov.

With the resources available after mandated requirements are met, the OIG will conduct audits of 

the Department’s highest risk programs and operations, and respond to stakeholder requests for 

specific work as appropriate. Some of the Department’s highest risk programs and operations 

include: (1) Cyber Threats, (2) Anti-Money Laundering and Terrorist Financing/Bank Secrecy 

Act Enforcement, and (3) Efforts to Promote Spending Transparency and to Prevent and Detect 

Improper Payments, (4) Administration of the Gulf Coast Restoration Trust Fund.

In support of Treasury’s mission, the OIG established the following strategic goals:

 Promote the integrity, efficiency, and effectiveness of programs and operations across 

Treasury OIG’s jurisdictional boundaries through audits and investigations

 Proactively support and strengthen the ability of programs across Treasury OIG’s 

jurisdictional boundaries to identify challenges and manage risks 

 Fully and currently inform stakeholders of Treasury OIG findings, recommendations, 

investigative results, and priorities

 Enhance, support, and sustain a workforce and strengthen internal operations to achieve the 

Treasury OIG mission, vision, and strategic goals

Office of Inspector General’s FY 2019 Budget Request

In accordance with the requirements of Section 6(f) (1) of the Inspector General Act of 1978, the 

Treasury Inspector General submits the following information relating to the OIG’s requested 

budget for FY 2019:

 The aggregate budget request for the operations of the OIG is $45,000,000 comprised of 

$36,000,000 from direct appropriations, and $9,000,000 from reimbursable collections;

 The portion of this amount needed for OIG training is $350,000; and
OIG - 4

 The portion of this amount needed to support the Council of Inspectors General on Integrity 

and Efficiency (CIGIE) is $78,500.

The amount requested for training satisfies all OIG training needs for FY 2019.

The Inspector General has determined that the office requires approximately $2,500,000 above 

the $36,000,000 to accomplish required audit and investigative work in FY 2019, and to carry 

out the OIG’s mission to promote integrity, efficiency and effectiveness of Treasury programs 

and operations, and to prevent fraud waste and abuse.

1.1 – Appropriations Detail Table

Dollars in Thousands

Note: The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017, for further details on the 

execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 

1.2 – Budget Adjustments Table

Dollars in Thousands

Office of Inspector General FTE Amount

FY 2018 Annualized CR 175 $36,792 

Changes to Base:

Maintaining Current Levels (MCLs): 0 $305 

Pay Annualization 0 $117 

Non-Pay 0 $188 

Subtotal Changes to Base 0 $305 

Total FY 2019 Base 175 $37,097 

Program Decreases 0 ($1,097)

Data Act and Other Workload 0 ($1,097)

Total FY 2019 Request 175 $36,000

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ........................................................... $305,000 / +0 FTE

Pay Annualization +$117,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay raise.

Non-Pay +$188,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Program Decreases ..................................................................-$1,097,000/ +0 FTE

Data Act and Other Workload -$1,097,000 / +0 FTE

Program decreases in Data Act and other workload.

Office of Inspector General

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Audit 115 $28,524 132 $28,330 132 $27,720 $0 ($610) 0.00% -2.15%

Investigations 43 $8,520 43 $8,462 43 $8,280 $0 ($182) 0.00% -2.15%

Subtotal New Appropriated Resources 158 $37,044 175 $36,792 175 $36,000 0 ($792) 0.00% -2.15%

Other Resources

 Reimbursables 7 $10,500 5 $10,000 5 $9,000 0 ($1,000) 0.00% -10.00%

Subtotal Other Resources 7 $10,500 5 $10,000 5 $9,000 0 ($1,000) 0.00% -10.00%

Total Budgetary Resources 165 $47,544 180 $46,792 180 $45,000 0 ($1,792) 0.00% -3.83%

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019
OIG - 5

1.3 – Operating Levels Table

Dollars in Thousands

Office of Inspector General FY 2017 FY 2018 FY 2019

Object Classification Enacted Annualized CR Request

11.1 - Full-time permanent 21,000 20,750 19,739 

11.3 - Other than full-time permanent 200 10 10 

11.5 - Other personnel compensation 500 750 500 

11.5 - Overtime 0 0 0 

11.8 - Special personal services payments 675 700 600 

11.9 - Personnel Compensation (Total) 22,375 22,210 20,849 

12.0 - Personnel benefits 5,650 5,850 5,500 

13.0 - Benefits for former personnel 0 15 0 

Total Personnel and Compensation Benefits $28,025 $28,075 $26,349 

21.0 - Travel and transportation of persons 510 700 600 

23.1 - Rental payments to GSA 435 2,087 4,041 

23.3 - Communications, utilities, and miscellaneous charges 1,000 800 300 

24.0 - Printing and reproduction 19 5 5 

25.0 - Other contractual services 0 2,200 2,100 

25.2 - Other services from non-Federal sources 3,515 0 0 

25.3 - Other goods and services from Federal sources 2,970 2,465 2,280 

25.6 - Medical care 50 60 60 

25.7 - Operation and Maintenance of Equipment 120 35 45 

26.0 - Supplies and materials 100 145 100 

31.0 - Equipment 300 200 100 

92.0 - Unvouchered Expenditures 0 20 20 

Total Non-Personnel $9,019 $8,717 $9,651 

New Budgetary Resources $37,044 $36,792 $36,000 

FTE 158 175 175

Note: The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further 

details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.
OIG - 6

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

OFFICE OF INSPECTOR GENERAL

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of the Office of Inspector General in 

carrying out the provisions of the Inspector General Act of 1978, 

$36,000,000, including hire of passenger motor vehicles; of which 

not to exceed $100,000 shall be available for unforeseen 

emergencies of a confidential nature, to be allocated and expended 

under the direction of the Inspector General of the Treasury; of 

which up to $2,800,000 to remain available until September 30, 

2020, shall be for audits and investigations

conducted pursuant to section 1608 of the Resources and 

Ecosystems Sustainability, Tourist Opportunities, and Revived 

Economies of the Gulf Coast States Act of 2012 (33 U.S.C. 1321 

note); and of which not to exceed $1,000 shall be available for 

official reception and representation expenses.

Note.—A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing

Appropriations Act, 2018 (Division D of P.L. 115–56, as 

amended). The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution.

E – Legislative Proposals

The OIG has no legislative proposals.
OIG - 7

Section II – Annual Performance Plan and Report

A – Strategic Alignment

Through the audit and investigative functions, the OIG supports the Department of the 

Treasury’s Strategic Plan for FY 2018-2022 including all objectives under the following goals: 

 Goal 1: Boost U.S. Economic Growth

 Goal 2: Promote Financial Stability

 Goal 3: Enhance National Security

 Goal 4: Transform Government-wide Financial Stewardship

 Goal 5: Achieve Operational Excellence

The FY 2018-2022 OIG strategic plan is currently under development. The annual performance 

plan will be updated in the budget to reflect the new priorities.

With the publication of Treasury’s Strategic Plan for FY 2018-2022, OIG will work this year to 

baseline performance against the new strategic objectives. This could result in changes to 

performance measures in the FY 2020 budget.

The FY 2019 requested resources will enable the OIG to perform audits and investigations of 

Treasury programs and operations under its jurisdiction, except for those of the Internal Revenue 

Service (IRS) and the Troubled Asset Relief Program (TARP), and to keep the Secretary of the 

Treasury and Congress fully informed of problems, deficiencies, and the need for corrective 

action. By statute, the OIG also performs oversight of the Gulf Coast Ecosystem Restoration 

Council, an independent Federal agency. Major Treasury risks and challenges include: 

Cyber Threats

Cyber threats are a persistent concern as Treasury’s information systems are critical to the core 

functions of government and the Nation’s financial infrastructure. OIG conducts audits of 

Treasury’s information systems and operations. As part of these audits, OIG conducts 

penetration tests of selected Treasury bureaus and offices to determine whether sufficient 

protections exist to prevent and detect unauthorized access to Treasury networks and systems. In 

addition, OIG conducts investigations into cyber intrusions of Treasury systems, the illicit 

removal of Treasury-protected information from Treasury systems, and cyber-enabled criminal 

activity impacting Treasury programs and operations, such as Business Email Compromise, 

Personal Email Compromise, and other schemes.

Anti-Money Laundering and Terrorist Financing/Bank Secrecy Act Enforcement 

This challenge focuses on the difficulties Treasury faces in identifying, disrupting, and 

dismantling the financial networks that support terrorists, organized transnational crime, 

weapons of mass destruction proliferators, and other threats to international security that 

continue to be challenging. Major challenges for the U.S. and Treasury involve stopping the 

Islamic State of Iraq and Syria (ISIS), rogue regimes and countries, and other bad actors who 

want to harm people and properties and disrupt the global financial system. Enhancing the 

transparency of the financial system is one of the cornerstones of the effort to disrupt the ability 

of terrorist organizations. Through OIG’s review of TFI authorities, responsibilities and

programs, OIG assesses the efficiency and effectiveness of TFI components including their 
OIG - 8

ability to disrupt terrorist organizations. OIG’s review includes assessing internal controls and 

ensuring compliance with laws and internal procedures. OIG reports any detected fraud, waste, 

and abuse and makes recommendations for improvement. Each day terrorists and criminals react 

to the increased financial institution monitoring by looking for other ways to move funds to 

support their illicit activities. OIG’s prior audits have revealed problems relating to the detection 

of Bank Secrecy Act (BSA) violations, the timely enforcement of the BSA, Suspicious Activity 

Report (SAR) quality, and BSA system development efforts. Additionally, the universe of 

financial institutions required to comply with BSA requirements continues to grow as nonbank 

financial institutions are required to report Currency Transaction Report (CTR) and SAR data. 

This universe also includes the insurance industry and dealers of precious stones, metals, and 

virtual currencies. Given the importance of Treasury’s mission to combat terrorist financing and 

money laundering, and the ever changing environment in which terrorist organizations operate, 

OIG considers anti-money laundering and combating terrorist financing to be inherently highrisk areas with a commiserate need for oversight by OIG.

Efforts to Promote Spending Transparency and to Prevent and Detect Improper Payments

Treasury continues to make progress in its Government-wide and Department-wide 

implementation of the DATA Act. The DATA Act requires the Federal Government to provide 

consistent, reliable, and useful online data about how it spends taxpayer dollars. Given the broad 

Government-wide implications and critical roles assigned to Treasury by the DATA Act, the 

OIG considers this an ongoing high-risk implementation project and management challenge.

Given the department’s role in the Government-wide implementation of the DATA Act, 

Treasury OIG has provided continuous oversight since enactment of the law. Concurrent with 

the work performed by the office, Treasury OIG leads a multi-agency IG community DATA Act 

Working Group and provides educational oversight ensuring the IG community was well 

positioned to execute its responsibilities under the DATA Act. As it relates to improper 

payments, OIG continues to identify and analyze the risks of improper payments and reviews the 

controls and safeguards put in place by Treasury to prevent and recover such payments as set 

forth in the Improper Payments Elimination and Recovery Act of 2010.

Management of the Gulf Coast Restoration Trust Fund

To address the economic and environmental damage caused by the Deepwater Horizon oil spill 

in the Gulf Coast, Treasury was given authority to administer the Gulf Coast Restoration Trust 

Fund established by the Resources and Ecosystems Sustainability, Tourist Opportunities, and 

Revived Economies of the Gulf Coast States Act. While Treasury’s program administration 

under this act has progressed, challenges remain in managing the program and investments. 

In response to the 2010 Deepwater Horizon oil spill, Congress enacted the RESTORE Act. This 

law established within Treasury the Gulf Coast Restoration Trust Fund (Trust Fund) and requires 

Treasury to deposit into the Trust Fund 80 percent of administrative and civil penalties paid by 

responsible parties pursuant to the Federal Water Pollution Control Act (Clean Water Act). The 

funds are to be distributed for environmental and economic restoration activities affecting the 

Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and Texas). In July 2015, BP 

Exploration & Production Inc., agreed to settle with the Federal Government and the Gulf Coast 

States resulting in approximately $4.4 billion plus interest expected to be deposited into the Trust 

Fund over a 15-year period. Approximately $5.3 billion is expected to be deposited into the 
OIG - 9

Trust Fund as a result of the Federal Government’s settlements with Transocean, Anadarko 

Petroleum Corporation, and BP Exploration & Production Inc., defendants. As of April 2017,

the Trust Fund received approximately $1.2 billion, including related interest. Going forward it 

is expected that demands for technical assistance from the Office of Gulf Coast Restoration will 

increase now that several Direct Component Multiyear Implementation Plans have been accepted 

by Treasury and a number of Direct Component planning assistance and construction grants have 

been awarded. 

In the Investigations operational area, OIG has established eight priorities for FY 2019:

Criminal and Serious Employee Misconduct

The OIG Office of Investigation’s highest priority is investigating complaints involving alleged 

criminal and other serious misconduct by Treasury employees. OIG investigates allegations of:

the general crimes enumerated in Title 18 of the U.S. Code, other federal crimes, alleged 

violations of the Ethics in Government Act, and allegations of serious misconduct prohibited by 

the Standards of Ethical Conduct for Employees of the Executive Branch. Several Treasury 

bureaus and offices have additional rules and regulations relating to ethical standards for their 

own employees, and OIG also investigates complaints of alleged violations of these rules and 

regulations.

Fraud Involving Contracts, Grants, Guarantees, and Funds

The OIG Office of Investigations conducts investigations into allegations of fraud and other 

crimes involving Treasury contracts, grants, loan guarantees, and federal funds, including 

investigations made in accordance with Sections 1602 and 1603 of the Recovery Act. Such 

allegations often involve contractors, entities, and individuals who are providing or seeking to 

provide goods or services to the Department. The Office of Investigations receives complaints 

alleging criminal or other misconduct from employees, contractors, members of the public, and 

the Congress.

Financial Programs and Operations Crime

Investigations relating to Treasury financial programs and operations that involve Treasury 

bureaus issuing licenses, providing benefits, and exercising oversight of U.S. financial 

institutions; frauds involving improper Federal payments such as those involving stolen, 

counterfeit, altered or fraudulently obtained Treasury checks and ACH payments; frauds 

involving improper Federal payments such as those involving Treasury checks and the Check 

Forgery Insurance Fund; crimes involving the improperly-redirected benefits of federal 

government payees; and false claims of any kind that generate inappropriate Federal payments, 

including federal income tax refunds, Social Security benefits, and Veterans’ Administration 

payments. These problems, particularly the production of counterfeit and altered Treasury 

checks, have significantly increased in the last few years. These matters require prompt attention 

to protect the public and the integrity of the department.

Threats Against Treasury Employees and Facilities

Investigative efforts into threats against Treasury employees and facilities are critical in ensuring 

safety for the Department. These matters require prompt attention and coordination with federal, 

state, and local authorities in order to protect those involved.
OIG - 10

Cyber Threats against Treasury Systems and Cyber Enabled Financial Crimes Fraud

The OIG conducts investigations into Cyber intrusions of Treasury systems, the illicit removal of 

Treasury protected information from Treasury systems and Cyber enabled criminal activity 

impacting Treasury programs and operations, such as Business Email Compromise, Personal 

Email Compromise and other schemes.

Treasury Employee and Bureau Impersonation Scams

Investigations relating to scammers who represent themselves as Treasury employees in order to 

defraud the citizens of the U.S. and other countries by the impersonation of Treasury employees 

and/or the fraudulent use of the Treasury and Bureau seals. This is a problem that has 

significantly increased in the last few years. These matters require prompt attention to protect 

the public and the integrity of the Department.

Investigating Fraud Related to Persons Representing Themselves as “Sovereign Citizens” 

Submitting Fictitious Financial Instruments to Treasury, Financial Institutions, and Private 

Companies

The OIG conducts investigations into criminal activity associated with individuals who attempt 

to scam the Treasury, financial institutions, private companies, and citizens by submitting 

fictitious financial instruments purporting to be issued by or drawn on the Treasury or other 

counterfeit documents to perpetrate a variety of fraud schemes. These matters have become 

more prevalent and require prompt coordination with Federal, State, and local authorities to 

protect the targets of the scams. 

Identifying and Investigating Fraud Related to the RESTORE Act 

The RESTORE Act commits 80 percent of all administrative and civil penalties related to the 

Deepwater Horizon spill to the Gulf Coast Restoration Trust Fund. It also outlines a structure for 

using the funds to restore and protect the natural resources, ecosystems, fisheries, marine and 

wildlife habitats, beaches, coastal wetlands, and economy of the Gulf Coast region. As such, the 

act assigns Treasury several roles in administering the Trust Fund, including authorizing the 

Inspector General to investigate projects, programs, and activities funded under the act. 
OIG - 11

B – Budget and Performance by Budget Activity

2.1.1 Audit Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualize

d CR Request

Appropriated Resources $21,801 $24,947 $27,653 $26,014 $23,982 $28,330 $27,720

Reimbursable $8,671 $8,525 $7,299 $6,726 $10,500 $10,000 $9,000 

Budget Activity Total $30,472 $33,472 $34,952 $32,740 $34,482 $38,330 $36,720

FTE 139 135 133 137 115 132 132

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Number of Completed Audit 

Products 72 75 86 98 90 86 74 74

Percent of Statutory Audits 

Completed by the Required 

Date

100 100 100 100 100 100 100 100

Audit Budget and Performance

($27,720,000 from direct appropriations, and $9,000,000 from reimbursable resources):

The Office of Audit conducts audits intended to ensure the accountability of resources, protect 

information, and provide recommendations for improving the integrity, economy, efficiency, 

effectiveness, and integrity of programs and operations under its jurisdiction, which include 

those of Treasury and the Gulf Coast Ecosystem Restoration Council. The requested funding for 

FY 2019 is necessary to perform mandated work, including Material Loss Reviews of failed 

insured national banks and trusts as part of general oversight of the OCC, and maintain an 

appropriate level of oversight of these programs and operations consistent with the OIG’s 

responsibilities under the Inspector General Act of 1978. In FY 2019, OIG will also continue to 

provide oversight of Treasury’s government-wide role and responsibilities under the DATA Act. 

Reimbursable funding agreements support financial audits of Treasury and oversight of the 

Small Business Lending Fund. 

Description of Performance:

The Office plans to complete 74 audit products in FY 2018, and 74 in FY 2019. The number of 

audit products was reduced in FY 2018 as a result of a significant rent increase in FY 2018 that 

will consume resources that would otherwise be used to fully staff the Office of Audit. The same 

target will apply in FY 2019. In FY 2017, the Office of Audit completed 90 audit products, and 

met all statutory audit timelines. Audit products include audit reports, evaluation reports, the 

Inspector General’s Semi-Annual Reports to the Congress, and the Inspector General’s annual 

memoranda to the Secretary of the Treasury and the Secretary of Agriculture, as the designated 

Chairperson of the Gulf Coast Ecosystem Restoration Council, on the most significant 

management and performance challenges facing the Department and Gulf Coast Ecosystem 

Restoration Council, respectively. Audit products can also include responses to specific 

information requests by the Congress. By completing independent and timely assessments of 
OIG - 12

programs and operations under its jurisdiction, the Office supports the OIG’s mission of 

promoting efficiency, effectiveness, and integrity of those programs and operations. The 

recommendations for improvement in programs and operations noted through OIG’s assessments 

directly support the Treasury Department in achieving its strategic goals and the Gulf Coast 

Ecosystem Restoration Council in meeting its mission. 

The OIG has a mature audit operation that uses historical performance to estimate future 

performance. It has, over time, demonstrated agility at redirecting resources as necessary to 

address new challenges and mandates of its stakeholders.

In keeping with the OIG’s strategy to maintain a highly skilled and motivated workforce, the 

OIG plans and executes a meaningful body of work designed to help ensure the integrity and 

effectiveness of programs and operations across its jurisdiction while looking for opportunities to 

improve them.

2.1.2 Investigations Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $5,582 $5,451 $6,237 $6,913 $7,164 

$8,462 $8,280

Other Resources 0 0 0 0 0 0 0

Budget Activity Total $5,582 $5,451 $6,237 $6,913 $7,164 $8,462 $8,280

FTE 35 34 33 33 43 43 43

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage (%) of All Cases 

Closed During Fiscal Year that 

were Referred for Criminal/Civil 

Prosecution or Treasury 

Administrative Action

84 84 87 84 84 80 80 80

Investigations Budget and Performance 

($8,280,000 from direct appropriations): 

The Office of Investigations prevents, detects, and investigates complaints of fraud, waste, and 

abuse impacting Treasury programs and operations. This includes the detection and prevention 

or deterrence of employee misconduct and fraud, or related financial crimes within or directed 

against Treasury. The Office of Investigations refers its cases to the Department of Justice, state 

or local prosecutors for criminal prosecution or civil litigation, or to agency officials for 

corrective administrative action. 

With the increased risk of the Recovery Act grant programs for low-income housing, the Office 

of Investigations faces greater challenges and anticipated increases in grant fraud. In addition, 

with the establishment of Gulf Coast Restoration Trust Fund outreach efforts are being made in 

an effort to prepare for future investigative referrals and complaints aimed at suspected fraud 

involving the funds with this program.
OIG - 13

In addition to the grant programs listed above, the Office of Investigations has seen a noted 

increase in fraud impacting other significant Treasury programs and operations including fraud 

impacting the Treasury Direct program and the Treasury payment processing service operated by 

the Bureau of Fiscal Service. Fraud impacting the Treasury Direct program includes identity 

theft, account takeover, attempts to launder money and create fraudulent accounts. In 2017 the 

Bureau of Fiscal Service reported an over eightfold increase in some types of fraud over 2015. 

The Office of Investigations has seen substantial increases in improper payment fraud impacting 

the Bureau of Fiscal Service, which makes 85 percent of the payments for the Federal 

Government. This fraud includes marked increases in fraud impacting the Direct Express 

program, including lost card fraud, stolen card fraud, counterfeit card fraud, “account take over” 

or redirected benefit fraud, “card not present” fraud as well as stolen, altered and counterfeit 

Treasury checks and ACH payments. Fraud impacting the Direct Express program nearly tripled 

in dollar terms from November 2015 to December 2017. Stolen card fraud more than 

quadrupled from April to October 2017. Card not present fraud increased over twenty percent 

from February to September 2017. Lost card fraud nearly doubled from February to June 2017. 

Counterfeit credit card fraud more than tripled from July to December 2017. 

Additionally, the Office of Investigations remains committed to investigating benefit, improper 

payment and other monetary fraud associated with the programs and operations of the Treasury 

Department. 

Description of Performance:

In FY 2017 the Office of Investigations exceeded the Investigative Performance Measure target 

(Target – 80 percent; Actual – 84 percent), opened 144 new investigations and closed 72

investigations. The OIG also referred 43 investigations that substantiated administrative 

violations against a Treasury employee to the appropriate regulated bureau for action. In 

addition, the OIG referred 154 investigations for criminal prosecution and 17 investigations for 

civil prosecution. In FY 2017 the Office of Investigations arrested 160 subjects, 52 of which 

have been sentenced in investigations that resulted in fines, seizures, restitution, penalties and

settlements of more than $639 million. 

The Investigative Performance Measure is a percentage of all cases closed by the Office of 

Investigations during the fiscal year referred to Department Bureaus for administrative action or 

for criminal or civil prosecution by Federal or local prosecutors. The goal for Office of 

Investigations is that at least 80 percent of closed cases meet the aforementioned criteria of 

closed cases in the fiscal year. Meeting or exceeding this goal demonstrates that the Office of 

Investigations is responsive to allegations and complaints referred to the office and when these 

referrals require investigation, the cases are timely, thoroughly and accurately reported to assist 

the Department in maintaining the integrity of its programs and operations, subsequently 

ferreting out fraud, waste, and abuse. The office is working to meet or exceed this measure in 

both FY 2018 and FY 2019.

With the publication of the Treasury Strategic Plan for FY 2018-2022, OIG will work this year 

to baseline its performance against the new strategic objectives. This could result in changes to 

performance measures in the FY 2020 budget.
OIG - 14

Section III – Additional Information

A – Summary of Capital Investments

OIG has no capital investments. Capital investments that support OIG are included in the 

Departmental Offices plan.

A summary of capital investment resources, including major information technology and nontechnology investments can be found at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury 

Office of the Special Inspector 

General for TARP 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019 
SIGTARP - 2 

Table of Contents 

Section I – Budget Request............................................................................................................. 3

A – Mission Statement ................................................................................................................... 3

B – Summary of the Request ......................................................................................................... 3

1.1 – Appropriations Detail Table ................................................................................................. 4

1.2 – Budget Adjustments Table .................................................................................................... 4

C – Budget Increases and Decreases Description .......................................................................... 4

1.3 – Operating Levels Table ......................................................................................................... 6

D – Appropriations Language and Explanation of Changes ......................................................... 7

E – Legislative Proposals ............................................................................................................... 7

Section II – Annual Performance Plan and Report ..................................................................... 8

A – Strategic Alignment ................................................................................................................ 8

B – Budget and Performance by Budget Activity ......................................................................... 8

2.1.1 – Investigations Resources and Measures ............................................................................. 8

Investigations Budget and Performance ........................................................................................ 9

2.1.2 – Audit Resources and Measures .......................................................................................... 9

Audit Budget and Performance ...................................................................................................... 9 

Section III – Additional Information ........................................................................................... 11

A – Summary of Capital Investments .......................................................................................... 11

Comments of the Honorable Christy Goldsmith Romero Special Inspector General Troubled 

Asset Relief Program FY 2019 Proposed Funding Level .......................................................... 12
SIGTARP - 3 

Section I – Budget Request 

A – Mission Statement

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) is 

a federal law enforcement agency that targets financial institution crime and is an independent 

watchdog protecting the interests of the American people. 

B – Summary of the Request 

The FY 2019 Budget proposes $17,500,000,1 which is 57 percent below the FY 2018 Annualized 

CR level, to conduct oversight over $37.4 billion in TARP housing programs, and $100 million in 

open TARP banking programs. 

SIGTARP is primarily a federal law enforcement agency investigating crime at financial 

institutions that received TARP funds or other TARP recipients in TARP housing programs. 

SIGTARP’s ongoing criminal investigations of recipients of TARP dollars in TARP housing 

programs counter threats to public safety and government interests, including financial institution 

fraud, public corruption, antitrust (unfair competition), and contract fraud. 

 

The $27.8 billion Making Home Affordable Program (MHA) continues until September 2023. The 

Department of the Treasury (Treasury) has paid $18.4 billion and will pay up to an additional 

$9.4 billion to Wells Fargo, Ocwen Loan Servicing, JPMorgan Chase, Bank of America, Nationstar 

Mortgage, Select Portfolio Servicing, CitiMortgage, CIT/One West, Bayview, Ditech, and more 

than 120 other financial institutions. Future TARP payments are not automatic, but instead are 

based on the institution complying with the law and MHA rules. TARP’s Hardest Hit Fund (HHF) 

was scheduled to end in FY 2018, but Congress extended it by four years and expanded it by $2 

billion in the Consolidated Appropriations Act, 2016 (P.L. 114-113). Recipients of TARP dollars 

include 19 state housing finance agencies and hundreds of demolition contractors, subcontractors 

and others. The HHF subprogram for Blight Elimination has grown 1,500 percent to 248 cities or 

counties since August 2013. The HHF subprogram for Down Payment Assistance has grown 1,200 

percent to 10 states since July 2015. 

SIGTARP’s investigations have recovered $10 billion, which translates to a 35 times return on 

investment from its spending of annual appropriations through FY 2017.2

 For each of the last four 

fiscal years, recoveries to the government exceeded SIGTARP’s budget proposal. For example, as 

of January, already in FY 2018 alone, recoveries from SIGTARP investigations were $100 million, 

including $90 million paid to the government. SIGTARP has developed a deep expertise in 

identifying undetected crime, with 408 defendants criminally charged as of January 2018. 

SIGTARP investigations have resulted in significant Department of Justice enforcement actions 

against General Motors and 10 financial institutions including Goldman Sachs, Bank of America, 

JPMorgan Chase, Morgan Stanley, Ally Financial, SunTrust Bank, Fifth Third Bank, Wilmington 

Trust, RBS Securities, and Jefferies and Company. SIGTARP audits in FY 2016 and FY 2017 

identified millions of dollars of waste and abuse; and identified the risk of criminal behavior in 

ongoing TARP programs. 

 

1 Includes $70,000 for training and $50,000 for the Council of the Inspectors General on Integrity and Efficiency. 2 Includes fines, restitution, forfeiture, and full homeowner relief by a large financial institution.
SIGTARP - 4 

1.1 – Appropriations Detail Table 

Dollars in Thousands 

The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the execution 

of these resources, see the 2019 Budget Appendix chapter for the Department of the Treasury. 

1.2 – Budget Adjustments Table 

Dollars in Thousands

Special Inspector General for TARP FTE Amount 

FY 2018 Annualized CR 140 $40,880 

Changes to Base: 

Maintaining Current Levels (MCLs) $213 

Pay Annualization $60 

Non-Pay $153 

Subtotal Changes to Base $213 

Total FY 2019 Base 140 $41,093 

Program Changes: 

Program Decreases (55) ($23,593) 

Technical FTE Adjustment (55) ($9,500) 

Efficiency Savings ($14,093) 

Total FY 2019 Request 85 $17,500 

C – Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs) ......................................................... +$213,000 / +0 FTE

Pay Annualization +$60,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay-raise. 

Non-Pay +$153,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, rent, contracts, supplies, and 

equipment. 

Program Decrease .................................................................................... -$23,593,000 / -55 FTE

Technical FTE Adjustment -$9,500,000 / -55 FTE 

The technical FTE adjustment reduces the appropriated FTE level. 

Efficiency Savings -$14,093,000 / -0 FTE 

SIGTARP will also seek to reduce non-personnel costs.

 

Special Inspector General for TARP

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Investigations 114 $32,516 119 $34,748 80 $16,450 (39) ($18,298) -32.77% -52.66%

Audit 27 $8,644 21 $6,132 5 $1,050 (16) ($5,082) -76.19% -82.88%

Subtotal New Appropriated Resources 141 $41,160 140 $40,880 85 $17,500 (55) ($23,380) -39.29% -57.19%

Other Resources

Unobligated Balances from Prior Years 0 $0 0 $0 0 $6,437 0 $6,437 NA NA

Resources from Other Accounts 0 $82 0 $0 0 $1,563 0 $1,563 NA NA

Subtotal Other Resources 0 $82 0 $0 0 $8,000 0 $8,000 NA NA

Total Budgetary Resources 141 $41,242 140 $40,880 85 $25,500 (55) ($15,380) -39.29% -37.62%

FY 2017 FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019
SIGTARP - 5 

Quantifiable Results: SIGTARP’s Return on Investment 

With $10 billion in recoveries from SIGTARP investigations, SIGTARP has a 35 times return on 

investment compared to its annual appropriations through FY 2017. Already in FY 2018, 

recoveries from SIGTARP’s investigations were $100 million, including $90 million paid to the 

government. In FY 2017, recoveries from SIGTARP’s investigations were $65 million, including 

more than $64 million paid to the government. In addition, through forensic audits, in 

August 2017,3

 SIGTARP auditors caught and exposed $3 million squandered by state agencies 

participating in HHF on parties, picnics, catered barbeques, Visa gift cards for employees, flowers, 

gym memberships, zoo admissions, cash bonuses, settlement of lawsuits by former employees, 

free parking for employees, expenses unrelated to HHF, and more. In September 2016,4

SIGTARP auditors caught and exposed $8 million in waste by a Nevada state agency contractor 

who wasted federal dollars earmarked for homeowners on agency overhead, parties, a cocktail bar, 

employee gifts, a monthly payment for the CEO to drive a Mercedes Benz, and more. SIGTARP 

recommended that Treasury recover the millions of TARP dollars wasted. 

Countering Threats to Public Safety & Government Interests 

SIGTARP brings accountability through congressionally-authorized criminal law enforcement. 

With concurrent responsibility with the Federal Bureau of Investigation (FBI) over TARP-related 

crime, SIGTARP saves FBI resources. SIGTARP counters threats to public safety and 

government interests by investigating criminal actors, and neutralizing the threats they pose. With 

408 defendants charged with a crime, and 242 of those defendants already sentenced to prison by 

courts (with others awaiting sentencing), the threat these crimes pose is significant. 

Financial institution fraud: The largest threat in TARP today and in the future is unlawful 

conduct by banks and other financial institutions being paid by Treasury to administer TARP’s 

MHA program, and this is SIGTARP’s highest law enforcement priority. SIGTARP’s record 

reflects 99 bankers charged with a crime related to the bank bailout, with 56 of those bankers 

already sentenced to prison. Remaining work on the bank bailout for FY 2019 supports Justice 

Department prosecutions of individuals investigated by SIGTARP. 

Public corruption: State and local officials award contracts under the HHF Blight Elimination 

subprogram using TARP dollars. The corruption of local officials threatens public safety. 

Antitrust violations: Unfair competitive practices for demolition contracts, like bid rigging and 

contract steering, threatens the quality of work, public safety, and competition, harming the 

government’s interests. 

Contract fraud: Fraud by contractors or state housing finance agencies in HHF harms 

government interests. 

Intelligence-based Approach to Speed Up the Identification of Crime 

With TARP currently spending $1 billion each quarter in HHF and MHA, SIGTARP uses an 

intelligence-based approach to search for crime using industry, financial and human intelligence. 

Every case is different, but SIGTARP capitalizes on similarities to root out crime. SIGTARP 

 

3 https://www.sigtarp.gov/Audit%20Reports/Unnecessary_Expenses_Audit_8.25.17.pdf 4 https://www.sigtarp.gov/Audit%20Reports/HHF%20Nevada_090916.pdf
SIGTARP - 6 

understands complex financial records; and operations of banks, other financial institutions, and 

contractors; and uses intelligence to identify anomalies and trends. Technologies analyze 

mountains of electronic data stored on computers, phones, and other devices, and find digital 

footprints that serve as powerful evidence of criminal intent. Initially created to investigate 

financial institutions that took part in the bank bailout, SIGTARP has converted this intelligencedriven playbook to identify fraud, waste, and abuse in TARP housing programs. SIGTARP’s 

approach speeds up the identification of crime. 

1.3 – Operating Levels Table 

Dollars in Thousands 

Special Inspector General for TARP FY 2017 FY 2018 FY 2019 

Object Classification Enacted Annualized 

CR Request 

11.1 - Full-time permanent 21,788 15,993 8,468 

11.3 - Other than full-time permanent 1,799 1,833 2,413 

11.5 - Other personnel compensation 2,120 1,899 1,825 

11.9 - Personnel Compensation (Total) 25,707 19,725 12,706 

12.0 - Personnel benefits 8,184 5,775 3,294 

Total Personnel and Compensation Benefits $33,891 $25,500 $16,000 

21.0 - Travel and transportation of persons 1,000 1,000 675 

23.2 - Rental payments to others 272 226 226 

23.3 - Communications, utilities, and miscellaneous charges 103 38 23 

24.0 - Printing and reproduction 162 0 0 

25.1 - Advisory and assistance services 2,676 897 897 

25.2 - Other services from non-Federal sources 68 17 17 

25.3 - Other goods and services from Federal sources 7,400 12,583 7,122 

25.6 - Medical care 100 80 60 

25.7 - Operation and maintenance of equipment 48 45 45 

26.0 - Supplies and materials 448 305 286 

31.0 - Equipment 260 189 149 

42.0 - Insurance claims and indemnities 60 0 0 

91.0 - Unvouchered 10 0 0 

Total Non-Personnel $12,607 $15,380 $9,500 

New Budgetary Resources $46,498 $40,880 $25,500 

 

FTE 141 140 85 

Note: The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. 

For further details on the execution of these resources, see the 2019 Budget Appendix chapter for the Department of 

the Treasury. 

This table includes all available resources, including SIGTARP's annual appropriation and remaining no-year funds.
SIGTARP - 7 

D – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY

SPECIAL INSPECTOR GENERAL FOR THE 

TROUBLED ASSET RELIEF PROGRAM 

Federal funds 

SALARIES AND EXPENSES 

For necessary expenses of the Office of the Special Inspector 

General in carrying out the provisions of the Emergency 

Economic Stabilization Act of 2008 (Public Law 110–343), 

$17,500,000. 

Note.— A full-year 2018 appropriation for this account was 

not enacted at the time the budget was prepared; therefore, the 

budget assumes this account is operating under the Continuing 

Appropriations Act, 2018 (Division D of P.L. 115–56, as 

amended). The amounts included for 2018 reflect the 

annualized level provided by the continuing resolution.

E – Legislative Proposals 

PPIP Funds 

The Public-Private Investment Program (PPIP) Improvement and Oversight Act of 2009 

(12 U.S.C. § 5231a) provided $15 million in no-year appropriations to SIGTARP for the purpose of 

providing oversight to PPIP and the Term Asset-Backed Securities Loan Facility. SIGTARP does not 

plan PPIP or TALF activity in FY 2019. SIGTARP is requesting that these PPIP funds be made 

available to also support SIGTARP’s oversight of ongoing TARP programs. 

PROPOSED LANGUAGE 

Sec. 128 Notwithstanding paragraph (2) of section 402(c) of the Helping Families Save their Homes 

Act of 2009, in utilizing funds made available by paragraph (1) of section 402(c) of such Act, the 

Special Inspector General for the Troubled Asset Relief Program shall prioritize the performance of 

audits or investigations of any program that is funded in whole or in part by funds appropriated under 

the Emergency Economic Stabilization Act of 2008, to the extent that such priority is consistent with 

other aspects of the mission of the Special Inspector General.
SIGTARP - 8 

Section II – Annual Performance Plan and Report 

A – Strategic Alignment 

The Investigations budget activity supports SIGTARP’s priority of law enforcement of crimes 

related to TARP and the limited Audit budget activity supports SIGTARP as the independent 

watchdog over TARP dollars. Both activities support and complement Treasury’s efforts to 

safeguard and protect the integrity of the financial system. 

SIGTARP supports the Department of the Treasury’s FY 2018 – 2022 Strategic Plan (Strategic 

Plan) goals under the following: 

 Goal 4: Transform Government-wide Financial Stewardship; and 

 Goal 5: Achieve Operational Excellence. 

With the publication of the Strategic Plan, SIGTARP will work in FY 2018 to baseline its 

performance against the new strategic objectives. This could result in additional changes to 

performance measures in the FY 2020 Budget. 

SIGTARP coordinates with other law enforcement agencies, leveraging its unique position and 

expertise by forming law enforcement partnerships. 

B – Budget and Performance by Budget Activity 

2.1.1 – Investigations Resources and Measures 

Dollars in Thousands 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Cases 

Accepted for Consideration 

by Civil or Criminal 

Authorities Resulting in a 

Positive Final Outcome

N/A N/A N/A 77 81 70 70 35

Percentage of Cases 

Presented to Civil or 

Criminal Authorities within 

Eight Months of the Case 

Being Opened

N/A N/A N/A 80 80 70 70 25

Percentage of Cases That 

are Joint Agency/Task 

Force Investigations

79 76 70 71 75 70 70 70

Percentage of Preliminary 

Investigations Converted to 

Full Investigations within 

180 Days

82 96 100 99 93 80 DISC DISC

Key: DISC - Discontinued

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $29,230 $27,382 $27,295 $32,478 $32,103 $34,748 $16,450

Other Resources $1,516 $5,656 $6,354 $376 $82 0 $7,520

Budget Activity Total $30,746 $33,038 $33,649 $32,854 $32,185 $34,748 $23,970

110 119 115 103 114 119 80

 Resource Level

FTE
SIGTARP - 9 

Investigations Budget and Performance 

($16,450,000 from direct appropriations) 

SIGTARP exceeded all metric targets in FY 2017. The “Percentage of Cases Accepted for 

Consideration by Civil or Criminal Authorities Resulting in a Positive Final Outcome” in FY 2017 

was 81 percent which exceeded the target of 70 percent. The “Percentage of Cases Presented to 

Civil or Criminal Authorities within Eight Months of the Case Being Opened” was 80 percent 

which exceeded the target of 70 percent. The “Percentage of Cases That are Joint Agency/Task 

Force Investigations” with other law enforcement agencies was 75 percent which exceeded the 

target of 70 percent. The “Percentage of Preliminary Investigations Converted to Full 

Investigations within 180 days” was 93 percent which exceeded the target of 80 percent. This 

measure was discontinued for FY 2018 because it has been at or close to 100 percent for the last 

three years, and is now part of SIGTARP’s regular process. 

2.1.2 – Audit Resources and Measures 

Dollars in Thousands 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Number of Completed Audit 

Products including Referral 

to Investigations Division 

(Units)

N/A N/A N/A 11 8 7 DISC DISC

Percentage of 

Congressional Inquiries 

Responded to within 45 

Days of Receipt

N/A N/A 100 100 100 85 DISC DISC

Number of completed audit 

products identifying waste, 

abuse, mismanagement, 

inefficiencies, or referrals to 

Investigations Division 

(Units) 

N/A N/A N/A N/A N/A N/A 3 1

Key: DISC - Discontinued

Audit Budget and Performance 

($1,050,000 from direct appropriations) 

SIGTARP exceeded its performance measure “Number of Completed Audit Products including 

Referrals to Investigations Division” of seven in FY 2017, with eight products. This measure was 

discontinued for FY 2018 because it was replaced by a similar measure that now emphasizes 

audit’s focus on fraud, waste, and abuse. SIGTARP exceeded its 85 percent goal of “Percentage 

of Congressional Inquiries Responded to within 45 Days of Receipt” by accomplishing 100 

percent. This measure was discontinued for FY 2018 because it has been at 100 percent for the 

last two years, and is now part of SIGTARP’s regular process.

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $10,376 $7,219 $6,824 $7,618 $7,530 $6,132 $1,050

Other Resources $1,947 $1,069 $99 0 0 $480

Budget Activity Total $10,376 $9,166 $7,893 $7,717 $7,530 $6,132 $1,530

57 45 35 34 27 21 5

 Resource Level

FTE
SIGTARP - 11 

Section III – Additional Information 

A – Summary of Capital Investments 

SIGTARP has no capital investments. Capital investments that support SIGTARP are included in 

the Departmental Offices’ plan. 

A summary of capital investment resources can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx 

This website also contains a digital copy of this document.
SIGTARP - 12 

Comments of the Honorable Christy Goldsmith Romero 

Special Inspector General Troubled Asset Relief Program 

FY 2019 Proposed Funding Level

Under the provisions of section 6(g)(3)(E) of the Inspector General Act of 1978, as amended, as 

applied through the Emergency Economic Stabilization Act of 2008, the Special Inspector 

General has provided the following comments regarding FY 2019 proposed funding: 

The FY 2019 budget request, which is 57% below the FY 2018 Annualized CR level 

substantially inhibits the Office of the Special Inspector General for TARP (SIGTARP) 

from performing the duties of the office, including audits and criminal investigations. The 

proposed reduction does not reflect that nearly all of SIGTARP’s planned work for 

FY 2019 is over $37.4 billion of TARP housing programs, which are not in wind down. 

The Making Home Affordable Program (MHA) has $9.5 billion to be spent through 

FY 2023, and has not declined in steady participation of about one million homeowners 

from FY 2015 to FY 2017. The Hardest Hit Fund (HHF) program is in a ramp-up stage

after Congress added $2 billion in the FY 2016 appropriations, and Treasury extended 

TARP spending of $2.65 billion through FY 2022. HHF is not limited to Treasury 

disbursements as dollars are recaptured into the program when houses are sold. 

SIGTARP has already found fraud, waste, and abuse in both of these programs. 

Taxpayers will lose millions of dollars under the request because SIGTARP’s work results 

in recoveries of millions of dollars to the Government each year. SIGTARP has a 35 times 

return on investment in actual dollars recovered. In each of FY 2015, FY 2016, FY 2017, 

and FY 2018, SIGTARP’s actual recoveries to the Government have exceeded its 

appropriation. FY 2017 recoveries of $64.31 million to the Government exceeded the 

$41.16 million appropriation, and FY 2018 recoveries of $90 million to the Government 

exceeded the $40 million Annualized CR. SIGTARP’s investigations have also resulted in 

millions of dollars recovered for victims, and SIGTARP’s audits have found millions of 

dollars in waste for Treasury to recover – waste that Treasury failed to catch. Substantial 

reductions to SIGTARP’s budget will reduce Government recoveries. 

SIGTARP already has reduced its budget substantially from FY 2017 levels to reflect that 

TARP investments in banks, autos, and AIG have been wound down to $100 million 

outstanding. After achieving criminal prosecutions of 408 defendants including 99 

bankers, and Department of Justice actions against General Motors and 10 financial 

institutions, SIGTARP has reduced resources over TARP investments to only the resources 

necessary to support DOJ prosecutions of bankers SIGTARP investigated. 

Criminal investigations: SIGTARP’s highest priority is investigations of unlawful conduct 

by banks and others administering the $27.8 billion MHA program — investigations that 

would be shut down under this proposed budget. These investigations require resources 

because of the size and complexity of the institutions and the amount of TARP dollars at 

stake. The major current and future TARP recipients in MHA have a track record of 

wrongdoing and enforcement actions, which creates a high risk of fraud, waste, and abuse. 

For example, Wells Fargo, the subject of a well-publicized 2016 enforcement action, has 

already received $3 billion in MHA, and will receive up to an additional $1.4 billion in 
SIGTARP - 13 

TARP dollars. Ocwen, the subject of a 2017 enforcement action by 22 state attorneys 

general, has received $4.6 billion, and will receive up to an additional $2.4 billion in 

TARP. JPMorgan Chase, the subject of a Justice Department action investigated by 

SIGTARP related to MHA, has received $2.9 billion in MHA and will receive up to an 

additional $1 billion. Bank of America, the subject of a Justice Department action 

investigated by SIGTARP related to MHA, has received $2.9 billion and will receive up to 

an additional $762 million. SIGTARP has reported repeatedly about each financial 

institution’s track record of breaking the MHA rules. SIGTARP has proven expertise in 

identifying fraud, waste, and abuse in large financial institutions, with our investigations 

resulting in Justice Department enforcement actions against 10 financial institutions, 

including for example, Goldman Sachs, Morgan Stanley, Bank of America, JPMorgan 

Chase, Fifth Third Bank, Ally Financial, and SunTrust Bank. 

SIGTARP has a significant number of criminal investigations into the Hardest Hit Fund, 

many of which would also be shut down under the proposed budget. Of high risk is the 

$800 million blight subprogram that pays TARP dollars to demolition contractors which 

has grown 1,500% to 248 cities or counties. SIGTARP investigations counter threats such 

as fraud, corruption, contract steering, bid-rigging, and environmental crimes. 

SIGTARP’s audits in 2016 and 2017 have uncovered that the program is at significant risk 

of fraud, waste and abuse: (1) lacking are standard requirements for competition and 

limits on Federal dollars to only necessary and reasonable costs; (2) demolition and other 

related costs rose by 90% in the largest blight state; (3) homeowners were evicted so their 

homes could qualify for demolition to move a Ford automobile dealership to their street; 

and (4) the U.S. Army Corps of Engineers found mishandling of asbestos, and the risk of 

asbestos exposure, contaminated soil, and illegal dumping in Flint, Michigan, with risks 

throughout the program. 

Audits: In 2016 and 2017, SIGTARP’s forensic audits uncovered millions of dollars 

wasted in state agency expenses in the Hardest Hit Fund, including monthly payments for 

a CEO to drive a Mercedes Benz, country club lunches, holiday parties, picnics, catered 

barbeques with Treasury employees, steak and seafood dinners, a pizza party to celebrate 

the new HHF funding, Visa gift cards for employees, zoo admissions, gym memberships, 

bonuses included a fired CEO’s $20,000 severance package, settlements of discrimination 

and wrongful termination lawsuits, and more. SIGTARP’s audits have a deterrent impact 

on waste that will be lost under the proposed budget. With state agencies spending $1.1 

billion on TARP funds on their own expenses, SIGTARP’s forensic audit expertise is 

crucial in identifying waste that Treasury’s reviews missed. 

The proposed budget substantially inhibits SIGTARP’s ability to: (1) identify costly waste 

and abuse in TARP housing programs in ongoing and future audits, and (2) conduct 

ongoing and future criminal investigations in TARP housing programs that lead to 

indictments, convictions, prison sentences, and recoveries. SIGTARP will not be able to 

do the job the taxpayers need and Congress expects in the absence of sufficient funding. 

Taxpayers are not protected if SIGTARP’s budget is reduced 50% while Treasury has 

grown the HHF blight program 1,500% and is scheduled to pay billions in TARP dollars 

to companies that have been the subject of scandals. 

Department of the Treasury 

Treasury Inspector General for 

Tax Administration 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019
TIGTA - 2 

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement ................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .......................................................................................... 4

1.2 – Budget Adjustments Table ................................................................................................. 4

C – Budget Increases and Decreases Description ....................................................................... 4

1.3 – Operating Levels Table ...................................................................................................... 5

D – Appropriations Language and Explanation of Changes ...................................................... 6

E – Legislative Proposals ............................................................................................................ 6

Section II – Annual Performance Plan and Report ................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 – Audit Resources and Measures ....................................................................................... 8

Audit Budget and Performance ................................................................................................... 8

2.1.2 – Investigations Resources and Measures ........................................................................ 11

Investigations Budget and Performance ................................................................................... 11

Key Accomplishments and Budget Savings ............................................................................. 14

Section III – Additional Information ........................................................................................ 16

A – Summary of Capital Investments ....................................................................................... 16

 
TIGTA - 3 

Section I – Budget Request 

A – Mission Statement 

Provide quality professional audit, investigative, and inspection and evaluation services that 

promote integrity, economy, and efficiency in the administration of the Nation’s tax system. 

B – Summary of the Request 

The Treasury Inspector General for Tax Administration’s (TIGTA) Fiscal Year (FY) 2019 

budget request of $161,113,000 represents a decrease of 4.4 percent below its FY 2018 

Annualized Continuing Resolution (CR) amount. Funding TIGTA’s FY 2019 budget request 

will enable TIGTA to attempt to address its expansive workload of emerging Internal Revenue 

Service (IRS) challenges and congressional requests while conducting its oversight 

responsibilities. These resources will fund critical audit, investigative, and inspection and 

evaluation services to protect the integrity of the Nation’s system of tax administration. In 

accordance with the requirements of Section 6(f)(1) of the Inspector General Act of 1978 (as 

amended),1

 TIGTA submits the following information related to its FY 2019 budget request: 

 The aggregate budget request for TIGTA operations is $161,113,000; 

 The portion of the request needed for TIGTA training is $1,800,000; and 

 The portion of the request needed to support the Council of the Inspectors General on 

Integrity and Efficiency is $338,000. 

TIGTA’s vision is to maintain a highly skilled, proactive, and diverse Inspector General 

organization dedicated to working in a collaborative environment with key stakeholders to foster 

and promote fair tax administration. TIGTA’s primary functions of investigations, audit, 

inspections, and evaluations align with the following Department of the Treasury’s Strategic 

Plan for FY 2018-2022 goals: 

 Goal 1: Boost U.S. Economic Growth; 

 Goal 4: Transform Government-wide Financial Stewardship; and 

 Goal 5: Achieve Operational Excellence. 

For more on how TIGTA aligns to the Department of the Treasury goals and objectives see 

Section II in this document. 

TIGTA’s Strategic Goals: 

 Promote the economy, efficiency, and effectiveness of tax administration; 

 Protect the integrity of tax administration; and 

 Be an organization that values its people. 

TIGTA’s work is focused on all aspects of activity related to the Federal tax system as 

administered by the IRS. TIGTA identifies and addresses IRS management challenges and the 

priorities of the Department of the Treasury. TIGTA protects the public’s confidence in the tax 

system. 

 

1

 5 U.S.C. app. 3 § 6(f)(1). 
TIGTA - 4 

1.1 – Appropriations Detail Table 

Dollars in Thousands 

*The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on 

the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 

1.2 – Budget Adjustments Table 

Dollars in Thousands 

Treasury Inspector General for Tax 

Administration FTE Amount 

FY 2018 Annualized CR 800 $168,482 

Changes to Base: 

 Maintaining Current Levels (MCLs): 0 $1,233 

 Pay Annualization 0 $620 

 Non-Pay 0 $613 

Subtotal Changes to Base 0 $1,233 

Total FY 2019 Base 800 $169,715 

Program Changes: 

 Program Decreases 0 ($8,602) 

 Operating Cost Reductions 0 ($8,602) 

Total FY 2019 Request 800 $161,113 

C – Budget Increases and Decreases Description 

Maintaining Current Levels (MCLs) ....................................................... +$1,233,000 / +0 FTE 

Pay Annualization +$620,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay raise. 

Non-Pay +$613,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, 

and equipment. 

Program Decreases .................................................................................... -$8,602,000 / +0 FTE 

Operating Cost Reductions -$8,602,000 / +0 FTE 

Audit and Investigations activity levels will be reduced for operational costs. Reaching this 

savings target without impacting the quality of TIGTA’s programs will require a combination of 

actions to include specialized training and travel reductions for investigators and auditors, 

contract and interagency agreement reductions, and rent reductions. TIGTA will continue to 

look for contract efficiencies by evaluating contracts for strategic sourcing and by negotiating 

more advantageous contract terms. Additionally, TIGTA will pursue opportunities to reduce its 

footprint and lower its rent costs. 

Treasury Inspector General for Tax 

Administration

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Audit 333 $66,020 333 $65,572 333 $62,704 0 ($2,868) 0.00% -4.37%

Investigations 467 $103,614 467 $102,910 467 $98,409 0 ($4,501) 0.00% -4.37%

Subtotal New Appropriated Resource 800 $169,634 800 $168,482 800 $161,113 0 ($7,369) 0.00% -4.37%

Other Resources

 Reimbursables 2 $357 2 $600 2 $600 0 $0 0.00% 0.00%

 Unobligated Balances Brought Forward $3,916 $4,300 $5,000 $700 16.28%

Subtotal Other Resources 2 $4,273 2 $4,900 2 $5,600 0 $700 0.00% 14.29%

Total Budgetary Resources 802 $173,907 802 $173,382 802 $166,713 0 ($6,669) 0.00% -3.85%

FY 2017* FY 2018 FY 2018 to FY 2019

Enacted Annualized CR Request Change % Change

FY 2019
TIGTA - 5 

1.3 – Operating Levels Table 

Dollars in Thousands 

Treasury Inspector General for Tax Administration FY 2017* FY 2018 FY 2019 

Object Classification Enacted Annualized CR Request 

11.1 - Full-time permanent 91,726 86,447 86,851 

11.3 - Other than full-time permanent 594 391 393 

11.5 - Other personnel compensation 8,460 8,291 8,330 

11.9 - Personnel Compensation (Total) 100,780 95,129 95,574 

12.0 - Personnel benefits 35,409 37,477 37,652 

Total Personnel and Compensation Benefits $136,189 $132,606 $133,226 

21.0 - Travel and transportation of persons 3,581 3,794 2,261 

22.0 - Transportation of things 19 15 13 

23.1 - Rental payments to GSA 9,396 9,600 8,984 

23.2 - Rental payments to others 233 200 170 

23.3 - Communications, utilities, and miscellaneous charges 1,864 740 340 

24.0 - Printing and reproduction 7 8 6 

25.1 - Advisory and assistance services 805 1,800 1,529 

25.2 - Other services from non-Federal sources 721 1,000 849 

25.3 - Other goods and services from Federal sources 8,357 11,150 8,597 

25.4 - Operation and maintenance of facilities 424 16 13 

25.7 - Operation and maintenance of equipment 944 2,989 1,469 

26.0 - Supplies and materials 1,072 640 595 

31.0 - Equipment 5,943 3,800 2,972 

42.0 - Insurance claims and indemnities 53 5 4 

91.0 - Unvouchered 26 119 85 

Total Non-Personnel $33,445 $35,876 $27,887 

New Budgetary Resources $169,634 $168,482 $161,113 

 

FTE 800 800 800 

*The FY 2017 column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on 

the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 
TIGTA - 6 

D – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes 

DEPARTMENT OF THE TREASURY 

TREASURY INSPECTOR GENERAL FOR TAX 

ADMINISTRATION 

Federal funds 

SALARIES AND EXPENSES

For necessary expenses of the Treasury Inspector General for 

Tax Administration in carrying out the Inspector General Act 

of 1978, as amended, including purchase and hire of passenger 

motor vehicles (31 U.S.C. 1343(b)); and services authorized 

by 5 U.S.C. 3109, at such rates as may be determined by the 

Inspector General for Tax Administration; $161,113,000, of 

which $5,000,000 shall remain available until September 30, 

2020; of which not to exceed $6,000,000 shall be available for 

official travel expenses; of which not to exceed $500,000 shall 

be available for unforeseen emergencies of a confidential 

nature, to be allocated and expended under the direction 

of the Inspector General for Tax Administration; and of which 

not to exceed $1,500 shall be available for official reception 

and representation expenses. 

Note.—A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the 

budget assumes this account is operating under the Continuing 

Appropriations Act, 2018 (Division D of P.L. 115–56, as 

amended). The amounts included for 2018 reflect the 

annualized level provided by the continuing resolution. 

E – Legislative Proposals 

TIGTA has no legislative proposals. 
TIGTA - 7 

Section II – Annual Performance Plan and Report 

A – Strategic Alignment 

TIGTA, an independent office within the Department of the Treasury, was created by Congress 

as a part of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98).2 It 

provides independent oversight of IRS activities by conducting independent audits, 

investigations, and inspections and evaluations necessary to prevent and detect waste, fraud, and 

abuse in IRS programs and operations. TIGTA conducts audits of the IRS’s operations and 

makes recommendations designed to improve the administration of the Federal tax system; 

conducts administrative and criminal investigations of allegations of waste, fraud, and abuse; and 

helps to ensure that the IRS protects and secures taxpayer data. TIGTA also has the unique 

responsibility of protecting the IRS and its employees. TIGTA’s role is important, given the 

current economic environment and the increased emphasis by the Administration, Congress, and 

the American people on the Federal Government’s accountability and efficient use of resources. 

TIGTA’s budget activities align with its vision and goals and with Treasury’s Strategic Plan for 

FY 2018-2022, including various objectives under the following goals: 

Goal 1: Boost U.S. Economic Growth

Objective 1.1 – Tax Law Implementation: Administer tax law to better enable all taxpayers to 

meet their obligations, while protecting the integrity of the tax system. 

TIGTA conducts comprehensive audits, inspections, and evaluations of the IRS, provides 

recommendations for achieving monetary benefits, and addresses erroneous and improper 

payments. It oversees the IRS’s efforts to increase domestic and international tax compliance, 

and to achieve program efficiencies and cost savings. TIGTA conducts audits that assess the 

IRS’s timeliness and effectiveness in implementing tax law changes, and the IRS’s effectiveness 

in protecting taxpayer data and addressing fraud, such as tax related identity theft. TIGTA 

conducts administrative and criminal investigations of allegations of waste, fraud, and abuse; 

makes recommendations designed to improve the administration of the Federal tax system; and 

helps to ensure that the IRS protects and secures taxpayer data. 

Goal 4: Transform Government-wide Financial Stewardship

Objective 4.1 – Financial Data Access/Use: Increase the access and use of Federal financial data 

to strengthen Government-wide decision-making, transparency, and accountability. 

TIGTA supports the Department of the Treasury’s Digital Accountability and Transparency Act 

efforts by implementing the related policies and requirements. Many of TIGTA’s audits include 

recommendations that, when implemented, would result in cost savings, increased or protected 

revenue, or more efficient use of resources. Additionally, TIGTA develops advanced analytics 

and innovative approaches to help prevent and detect the flow of dollars fraudulently obtained by 

criminals and IRS employees and provides the IRS with the investigative coverage and 

 

2

 Pub. L. No. 105-206, 112 Stat. 685. 
TIGTA - 8 

information necessary to mitigate domestic and foreign threats against its employees, facilities, 

and data systems. 

Goal 5: Achieve Operational Excellence 

Objective 5.1 – 5.3 Workforce Management, Treasury Infrastructure, and Customer Value. 

TIGTA hires and develops a workforce with the skills and competencies necessary to accomplish 

its mission to provide quality professional audit, investigative, and inspection and evaluation 

services related to the administration of the Nation’s tax system. TIGTA mitigates security risks 

affecting taxpayer data, tax systems, and IRS employees. It effectively improves customer value 

by protecting the IRS and its employees and responding to attempts to impersonate the IRS for 

fraudulent purposes. TIGTA prioritizes acquisition and application of human and financial 

resources to enhance its ability to detect and protect against cyberattacks. Additionally, TIGTA 

collaborates with the IRS to share intelligence and expertise to thwart cyber threats.

With the publication of the Treasury Strategic Plan for FY 2018-2022, TIGTA will work this 

year to baseline its performance against the new strategic objectives. This could result in 

(additional) changes to performance measures in the FY 2020 budget. 

B – Budget and Performance by Budget Activity 

2.1.1 – Audit Resources and Measures 

Dollars in Thousands 

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Annualized 

CR Request 

Appropriated Resources    $54,309 $53,763 $57,463 $59,752 $64,240 $65,572 $62,704 

Reimbursable Resources    $500 $600 $382 $60 0 0 0 

Unobligated Balances 

Brought Forward    0 0 $1,808 $1,780 $1,524 $1,674 $1,947 

Budget Activity Total $54,809 $54,363 $59,653 $61,592 $65,764 $67,246 $64,651 

FTE 323 309 316 329 333 333 333 

Note: FY 2017 Reimbursable Resources and Unobligated Balances Brought Forward are Actuals 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Audit Products 

Delivered When Promised to 

Stakeholders

84 65 80 75 79 68 68 68

Percentage of 

Recommendations Made 

That Have Been 

Implemented

87 89 92 97 92 85 85 85

Audit Budget and Performance 

($62,704,000 from direct appropriations):

TIGTA’s Office of Audit identifies opportunities to improve the administration of the Nation’s 

tax laws by completing comprehensive and independent performance and financial audits of IRS 

programs and operations. TIGTA’s audit program incorporates both statutory audit requirements 

and specific audits identified through TIGTA’s risk assessment process. TIGTA’s audit work is 
TIGTA - 9 

concentrated on high-risk areas and on the IRS’s progress in achieving its strategic goals. 

TIGTA strategically evaluates IRS programs, activities, and functions, so that resources are spent 

in the areas of highest vulnerability of the Nation’s system of tax administration. In FY 2017, 

OA issued 104 final audit reports, and other products, that included potential financial benefits 

totaling approximately $9.1 billion and affected approximately 34 million taxpayer accounts. 

TIGTA’s Annual Audit Plan communicates its audit priorities to the IRS, Congress, and other 

interested parties. Many of the activities described in the Annual Audit Plan address the 

fundamental goals related to the IRS’s mission to administer its programs effectively and 

efficiently. Audits address a variety of high-risk issues, such as identity-theft detection and 

prevention, security of taxpayer data, tax compliance, tax law changes, fraudulent claims and 

improper payments, tax systems and online services, and globalization. TIGTA’s audits and 

recommendations help: 

 Promote the economy, efficiency, and effectiveness of IRS programs; 

 Ensure the fair and equitable treatment of taxpayers; and 

 Detect and deter waste, fraud, and abuse. 

By focusing on the most critical areas, TIGTA’s recommendations not only result in cost 

savings, but also have other quantifiable impacts, such as the protection of existing revenue, 

increased revenue, and reduction of the number of fraudulent refunds and improper payments. 

TIGTA’s reports for FY 2017 addressed issues that included: 

 Improving Tax Compliance – Potential Employer Underreported Tax Not Being Addressed. 

TIGTA noted 114,088 (83 percent) Tax Year 2013 discrepancy cases were not worked. 

These cases had a potential underreported tax difference of more than $7 billion. 

 Improving Tax Compliance – Significant Reduction in Automated Substitute for Return 

Program Negatively Affected Compliance and Collection. The Automated Substitute for 

Return Program (ASRP) attempts to bring taxpayers who are required to file a tax return but 

do not into compliance. Revising the ASRP case selection strategy to include more potential 

high net-tax due cases could result in the collection of $843 million of additional taxes over 

the next five years. 

 Achieving Program Efficiencies and Cost Savings – Replacement of Aged Hardware 

Infrastructure. From FY 2013 to FY 2017, the IRS’s aged information technology hardware 

increased from 40 percent to 64 percent. The IRS’s stated objective is an acceptable level of 

20 to 25 percent. Aged information technology hardware still in use introduces unnecessary 

risks. Aged hardware failures may have a negative effect on IRS employee productivity, 

security of taxpayer information, and customer service. 

 Reducing Fraudulent Claims and Improper Payments – Identify Potentially Improper 

Refundable Credit Claims. Effective December 18, 2015, taxpayers must have a Taxpayer 

Identification Number (TIN) that was issued before the due date of the tax return to claim 

certain tax credits. However, the IRS does not have processes to identify claims where a TIN 

was not issued timely. As a result, the IRS paid more than $34.8 million in refundable tax 

credits to taxpayers whose TIN was not issued until after the tax period in question. In 

addition, the IRS still has not established processes to prevent individuals who have a nonwork Social Security Number from receiving the Earned Income Tax Credit (EITC). As a 

result, 49,310 individuals not authorized to work in the United States received almost $117.7 

million in potentially erroneous EITCs in Tax Year 2014. 
TIGTA - 10 

Description of Performance: 

TIGTA uses two performance measures to gauge the success of its audit program. The first 

measure indicates that TIGTA’s products are more likely to be used if they are delivered when 

needed to support congressional and IRS decision-making. To determine whether products are 

timely, TIGTA tracks the percentage of products that are delivered on or before the date 

promised (contract date).

The second measure assesses TIGTA’s effect on improving the IRS’s accountability, operations, 

and services. TIGTA makes recommendations designed to improve the administration of the 

Federal tax system. The IRS must implement these recommendations to realize the financial or 

non-financial benefits. Since the IRS needs time to act on recommendations, TIGTA uses the 

Department of the Treasury’s Joint Audit Management Enterprise System to track the percentage 

of four-year-old recommendations that have been implemented, rather than the results of the 

activities during the fiscal year in which the recommendations are made. TIGTA tracks 

recommendations that have not been implemented by the IRS and has a formal process with the 

IRS to close out unimplemented recommendations in situations in which circumstances may 

have changed or when the IRS has taken alternative corrective measures to address TIGTA’s 

audit findings. 

At the end of FY 2017, the actual Percentage of Audit Products Delivered When Promised to 

Stakeholders was 79 percent, which exceeded the full-year target of 68 percent. TIGTA 

exceeded this target as a result of ongoing supervisory monitoring of the execution of audits to 

ensure timely delivery of audit products to stakeholders. At the end of FY 2017, the actual 

Percentage of Recommendations Made That Have Been Implemented was 92 percent, which 

exceeded the full-year target of 85 percent. TIGTA exceeded its target because of continued 

discussions with the IRS throughout the audit process concerning both the findings and potential 

recommended solutions to ensure that feasible alternatives were identified. 

For FY 2019, the target for Percentage of Audit Products Delivered When Promised to 

Stakeholders will remain 68 percent. The target for Percentage of Recommendations Made That 

Have Been Implemented will remain at 85 percent. TIGTA believes that these measures are best 

attained through effective monitoring of ongoing audit work and essential communication with 

the IRS regarding findings and the most appropriate corrective action recommendations. As 

such, TIGTA’s OA will continue to accentuate the importance of these processes with the 

management cadre and staff.
TIGTA - 11 

2.1.2 – Investigations Resources and Measures 

Dollars in Thousands 

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017* FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Annualized 

CR Request 

Appropriated Resources    $89,452 $95,748 $101,476 $108,106 $100,819 $102,910 $98,409 

Reimbursable Resources    $400 $1,100 $429 $475 $357 $600 $600 

Unobligated Balances 

Brought Forward    0 0 $3,192 $3,220 $2,392 $2,626 $3,053 

Budget Activity Total $89,852 $96,848 $105,097 $111,801 $103,568 $106,136 $102,062 

FTE 451 433 442 460 469 469 469 

* The FY 2017 column This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For 

further details on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Results From 

Investigative Activities 90 92 93 90 90 81 79 79

Investigations Budget and Performance 

($98,409,000 from direct appropriations, and $600,000 from reimbursable resources):

In addition to protecting the IRS’s ability to collect the majority of the revenue for the Federal 

Government’s operations, TIGTA, through its Office of Investigations, has the statutory 

responsibility of protecting the integrity of tax administration, as well as the IRS’s most valuable 

resource, its employees. 

TIGTA’s investigative resources are allocated based 

upon a performance model that focuses on three 

primary areas of investigation: 

 Employee integrity; 

 Employee and infrastructure security; and 

 External attempts to corrupt tax administration 

The performance model (Figure 1) uses a ratio of 

those investigations that have the greatest impact on IRS operations or the protection of Federal 

tax administration to the total number of investigations conducted. These performance measures 

guide OI’s activities and help to demonstrate the value of investigative accomplishments to 

TIGTA’s external stakeholders. 

Employee Integrity: IRS employee misconduct, real or perceived, erodes public trust and 

impedes the IRS’s ability to enforce tax laws effectively. In FY 2017, 46 percent of TIGTA’s 

body of investigative work involved alleged employee misconduct. TIGTA’s investigative 

results convey a message to IRS employees that these types of activities will not go unchecked. 

TIGTA processed 10,638 complaints, opened 2,835 investigations, and closed 2,876 

investigations in FY 2017. During this period, 168 investigations cases of all types were 

accepted for criminal prosecution, and TIGTA referred for IRS action 1,119 cases of employee 

misconduct. As a result of one of TIGTA’s investigations into employee misconduct, a former 

Figure 1: Investigative Performance Model
TIGTA - 12 

IRS special agent was charged with corrupt interference with the IRS, filing false tax returns, 

theft of Government funds, and destruction or falsification of records.3 In another case, two IRS 

employees, pled guilty to their roles in the preparation and filing of fraudulent income tax 

returns, resulting in a total tax loss to the IRS of $130,124.4

 

Employee and Infrastructure Security: In FY 2017, TIGTA responded to 1,642 threat-related 

incidents. TIGTA has a statutory responsibility to identify, investigate, and respond to threats 

against IRS personnel and physical infrastructure. TIGTA also believes that through its 

investigations of threat-related incidents, it is creating a safe and secure environment for 

taxpayers who need to conduct business with the IRS. From FY 2011 through FY 2017, TIGTA 

has processed more than 15,737 threat-related complaints and investigated more than 8,194 

threats against IRS employees. In one investigation, a man who had previously mailed his 

severed finger to the IRS,5

 was arrested and indicted for knowingly sending a fake pipe bomb to 

the IRS.6

 

External Attempts to Corrupt Tax Administration: TIGTA is statutorily mandated to 

investigate external attempts to corrupt tax administration, which include criminal misconduct by 

nonemployees, such as impersonation of the IRS, attempted bribery of IRS employees, 

international cybercrime and identity theft, and procurement fraud. 

Impersonation Scam: Since summer 2013, a significant part of TIGTA’s workload has 

consisted of investigating a telephone impersonation scam in which a victim receives an 

unsolicited telephone call from a person claiming to be an IRS agent. The caller, using a fake 

name, provides a “badge number” and claims the victim owes taxes and is criminally liable for 

the amount owed. The victim is threatened that if he or she fails to pay the tax immediately, the 

victim will be arrested, a suit will be filed, or some other form of adverse action will be taken. 

As of September 30, 2017, more than 2.1 million Americans reported that they have received one 

of these calls, and 12,027 victims have reported that they have collectively paid a total of more 

than $60.7 million to the scammers. As a direct result of TIGTA’s investigative efforts, in 

October 2016, 56 individuals, some of whom were located within the United States, plus five call 

centers located in India were indicted for the scam. Since the indictment, the impersonation calls 

have dropped by more than 90 percent. 

International Cybercrime and Identity Theft: The increasing number of data breaches in the 

private and public sectors means more personally identifying information than ever before is 

available to unscrupulous individuals. The Office of Investigation’s highly specialized group of 

criminal investigators with technical expertise in investigating electronic crimes, including 

computer intrusions and Internet-based fraud schemes, will continue to combat cybercriminals. 

In May 2015, criminals launched a coordinated attack on the IRS e-Authentication portal that 

resulted in the exploitation of the IRS Get Transcript Application, as well as the IRS Identity 

 

3

 E.D. Cal. Superseding Indict. filed Oct. 20, 2016. 

4

 E.D. Cal. Plea Agr. filed July 26, 2017; E.D. Cal. Plea Agr. filed Aug. 25, 2017. 5

 W.D. Wash. Crim. Compl. filed July 7, 2017. 

6

 W.D. Wash. Crim. Docket filed Sep. 6, 2017; W.D. Wash. Indict. filed Sep. 6, 2017. 
TIGTA - 13 

Protection Personal Identification Number application. It is estimated that more than 110,000 

taxpayers were impacted by this attack. A subsequent review of all of the activity on the system 

revealed that more than 700,000 taxpayers were impacted by similar abuses of the system by 

multiple bad actors over an extended period of time. In January 2016, a coordinated criminal 

effort was launched that exploited the IRS Electronic Filing PIN (e-File PIN) tool. The e-File 

PIN tool was created to provide taxpayers with a special PIN number that would allow the 

taxpayer to electronically file a Federal tax return. The IRS estimates the exploitation resulted in 

the issuance of over 100,000 e-File PINs that were used to file over $100 million dollars of 

fraudulent tax returns. As a result of this exploitation, on June 23, 2016, the IRS announced that 

it had disabled the e-File PIN application. Numerous investigations are underway on the 

individuals who obtained taxpayer information from both of these attacks. As a result of one of 

TIGTA’s cybercrime investigations, a Russian man was sentenced to 57 months’ imprisonment7

for his role in a sophisticated, large-scale stolen-identity refund fraud scheme.8

Procurement Fraud: On average, the IRS acquires approximately $2.1 billion annually in new 

contract awards. According to the Association of Certified Fraud Examiners’ 2016 “Report to 

the Nation,” 9 organizations lose more than 5 percent of their annual expenditures to fraud, waste, 

and abuse. In the case of IRS procurement, this projection translates to approximately $105 

million annually. 

Description of Performance: 

TIGTA’s OI has adopted performance measures that identify the percentage of results derived 

from investigative activities that most accurately align with the strategic goals of the 

organization and provide the greatest impact on the protection of the integrity of Federal tax 

administration. At the end of FY 2017, the Percentage of Results From Investigative Activities 

was 90 percent, which exceeded the full-year target of 81 percent. The Office of Investigations 

exceeded the FY 2017 performance measure as a result of the hard work of experienced 

executives, managers, and special agents. With the FY 2019 budget request, TIGTA will attempt 

to maintain its special agents’ skills and abilities in order to be able to respond to its mission 

requirements. 

For FY 2019, OI’s performance target is 79 Percent of Results From Investigative Activities. 

TIGTA is anticipating a high rate of turnover of its management team due to retirements. In 

addition, based on fiscal resources, TIGTA is anticipating the inability to backfill special agent 

positions. As experienced special agents retire or transfer from the agency, it is anticipated that 

TIGTA’s ability to effectively produce results will decrease in FY 2019. However, TIGTA’s OI 

will continue to provide the IRS with the investigative coverage and information necessary to 

improve the integrity of IRS operations and mitigate threats against its employees, facilities, and 

data systems. Through its investigative programs, OI will continue to protect the IRS’s ability to 

process approximately 246 million tax returns, collect more than $3.4 trillion in annual revenue, 

and issue over $400 billion dollars in refunds for the Federal Government.10 

 

7

 S.D. Fla. Judgment filed June 12, 2017. 

8

 S.D. Fla. Crim. Compl. filed Nov. 17, 2016. 

9

 Association of Certified Fraud Examiners, Report to the Nations on Occupational Fraud and Abuse, 2016. 10 IRS, Management’s Discussion & Analysis, Fiscal Year 2017. 
TIGTA - 14 

Key Accomplishments and Budget Savings 

While the scope, complexity, and magnitude of the Nation’s economy and deficit continue to 

present significant challenges, TIGTA remains one of the best investments in the Federal 

Government. In FY 2017, through targeted and vigorous oversight efforts that addressed 

congressional concerns and its own audit and investigative priorities, TIGTA generated overall 

potential financial accomplishments of over $9.1 billion. 

During FY 2017, these potential financial accomplishments included: 

 Increased and/or protected revenue in the amount of $8.6 billion; 

 Cost savings of $439.1 million; and 

 Significant investigative accomplishments of $38.1 million. 

The phrase “cost savings” includes questioned costs and funds put to better use. 

Questioned costs are: 

 Costs that cannot be reimbursed because they represent a violation of law, regulation, or 

contract; 

 Expenditures that are not reasonable or necessary to accomplish the intended purpose; and 

 Costs that are appropriate, but for which the vendor cannot provide proof that the cost was 

incurred. 

Funds put to better use are funds that could be used more efficiently or effectively if 

management took actions to implement the recommendation(s), including but not limited to: 

 Reductions in outlays; 

 Avoidance of unnecessary expenditures noted in pre-award contract reviews; and 

 Prevention of erroneous payment of refundable credits. 

In addition to funds that could be put to better use, TIGTA’s investigative efforts resulted in over 

$31.8 million in court-ordered fines, penalties, and restitution. 

Funding for TIGTA allows its oversight efforts to 

continue, and for each dollar invested over the five-year 

period covering FYs 2013-2017, TIGTA has produced 

an average annual return of $106 (Figure 2). 

 

Figure 2: TIGTA’s Return on Investment 
TIGTA - 15 

Office of Inspections and Evaluations Highlights

The Office of Inspections and Evaluations (I&E) identifies opportunities for improvement in IRS 

and TIGTA programs by performing inspections and evaluations that report timely, useful, and 

reliable information to decision makers and stakeholders. 

The Office of Inspections and Evaluations provides a range of specialized services and products, 

including quick reaction reviews, on-site office inspections, and in-depth evaluations of major 

functions, activities, or programs. These activities provide TIGTA with additional flexibility, 

capacity, and capability to improve tax administration. Inspections serve to: 

 Provide factual and analytical information; 

 Monitor compliance; 

 Measure performance; 

 Assess the effectiveness of programs and operations; 

 Share best practices; and 

 Inquire into allegations of waste, fraud, abuse, and mismanagement. 

Evaluations often result in recommendations to streamline IRS operations, enhance data quality, 

and minimize inefficient and ineffective procedures. In FY 2017, I&E produced nine external 

reports, which include reviews of physical security controls at IRS locations, the IRS 

Occupational Safety and Health Program, the use of critical pay authority to hire employees, and 

employment tax evasion. 
TIGTA - 16 

Section III – Additional Information 

A – Summary of Capital Investments 

Technology Investments – TIGTA has no major IT investments; however, non-major 

investments include: 

 IT Applications and Collaboration – This investment represents an enterprise view of 

TIGTA's applications development which includes system design, development, testing, 

deployment, and maintenance of information applications systems.

 IT Infrastructure End-User Systems and Support – This investment is an enterprise view 

of TIGTA's end-user hardware, peripherals and software, and the Service Desk.

 IT Infrastructure Mainframe and Servers Services and Support – This investment 

represents an enterprise view of TIGTA's servers, including hardware and software 

operations, licensing, maintenance, back-up, continuity of operations, disaster recovery, 

virtualization, and data center consolidation.

 IT Infrastructure Telecommunications – This investment represents an enterprise view of 

TIGTA's data networks and telecommunications hardware and software operations, licenses, 

maintenance, back-up, continuity of operations, and disaster recovery.

 IT Security Systems and Enterprise Architecture – This investment represents TIGTA's 

IT investments responsible for enterprise architecture services.

The Office of Information Technology provides cost-effective and timely IT products and 

services that permit successful completion of TIGTA’s business goals, while at the same time 

meeting legislative and other executive mandates. The following are TIGTA’s FY 2019 

prioritized information technology requirements that directly support TIGTA operations: 

 Continuous Diagnostics and Mitigation (CDM) – The CDM program is intended to 

provide TIGTA with the capabilities and tools to identify cybersecurity risks on a repeatable 

and recurrent basis, prioritize these risks based upon their potential impact, and enable 

cybersecurity and operational personnel the opportunity to timely address the most 

significant problems. 

 Infrastructure Refresh in Atlanta Service Center (ATSC) – TIGTA’s major infrastructure 

equipment located at the ATSC is eligible for refresh in FY 2019. The refresh will enable 

TIGTA to operate more efficiently and maintain and improve TIGTA’s security posture. 

New storage technologies (e.g., Solid-State Drives) will offer TIGTA opportunities for 

greater efficiency and enhancements in capacity, confidentiality, cybersecurity, power 

savings, system availability/responsiveness, and improved productivity. 

 Increased Bandwidth – The bandwidth for TIGTA’s field offices must be upgraded to 

support the increased demand for improved transmission of data, application utilization, 

audio and video conferencing, and more. 

 Network Segmentation – The enhancement of a more secure configuration will ensure that 

network data and personally identifiable information will be more readily protected against 

cyberattacks and leaks. The purpose of network segmentation is to increase TIGTA’s overall 

security and performance posture which would prevent sideways and undetected movement 

by would-be intruders. 

 Research, Analysis, Forensics, and Evidence system (RAFE) – The RAFE will be used by 

TIGTA for cyber analysis, tracking, and defense against potential cyber threats directed at 

both TIGTA and IRS as well as uncovering other threats to tax administration including 

seizure of evidence and analysis of activities (e.g., scammers). RAFE will directly benefit 
TIGTA - 17 

TIGTA as it will remove current security and privacy vulnerabilities and open the door to 

many new cybercrime capabilities that cannot be accommodated currently. The expected 

initial implementation is underway for FY 2018, and TIGTA expects to continue its full 

implementation in FY 2019. 

Law Enforcement Vehicles –TIGTA acquires its vehicles by lease through the General Services 

Administration. However, TIGTA will maintain ownership of approximately eight 

surveillance/communications vehicles. These vehicles will remain part of TIGTA’s capital asset 

strategy. The vehicles will be used to support TIGTA’s investigations and must meet the 

mission-critical need to conduct criminal law enforcement activities. TIGTA communications 

vehicles also are used in support of its Continuity of Operations (COOP) Plan. COOP provides a 

mechanism for the organization to recover full operational capability following a critical 

incident, including the capability to communicate during a local or national emergency.

A summary of capital investment resources, including major IT and non-technology investments, 

can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx 

This website also contains a digital copy of this document. 

Department of the Treasury

Community Development 

Financial Institutions Fund

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
CDFI Fund - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table.......................................................................................... 4

1.3 – Operating Levels Table...................................................................................................... 5

C – Appropriations Language and Explanation of Changes....................................................... 6

D – Legislative Proposals ........................................................................................................... 6

Section II – Annual Performance Plan and Report................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 Administration- Resources and Measures ......................................................................... 8

2A - Administration .................................................................................................................... 8

2.1.2 – Community Development Financial Institutions Program Resources and Measures..... 9

2B - Community Development Financial Institutions Program ................................................. 9

2.1.3 – New Markets Tax Credit Program Resources and Measures ....................................... 10

2C – New Markets Tax Credit Program ................................................................................... 10

2.1.4 – Bank Enterprise Award Program Performance and Measures ..................................... 12

2D – Bank Enterprise Award Program..................................................................................... 12

2.1.5 – Native American CDFI Assistance Program Performance and Measures.................... 13

2E – Native American CDFI Assistance Program.................................................................... 13

2.1.6 - Healthy Food Financing Initiative Performance and Measures .................................... 14

2F – Healthy Food Financing Initiative .................................................................................... 14

2.1.7 - Capital Magnet Fund Program Resource Detail Table.................................................. 15

2G - Capital Magnet Fund Program.......................................................................................... 15

2.1.8 - Bond Guarantee Program Resource Detail Table.......................................................... 15

2.1.9 - Financing Accounts – Non-Budgetary Summary.......................................................... 16

2H - CDFI Bond Guarantee Program ....................................................................................... 16

Section III – Additional Information ........................................................................................ 17

A – Summary of Capital Investments....................................................................................... 17

Non-Major IT Investments ....................................................................................................... 17

IT Infrastructure Investments.................................................................................................... 17
CDFI Fund - 3

Section I – Budget Request

A – Mission Statement

To expand economic opportunity for underserved people and communities by supporting the 

growth and capacity of a national network of community development lenders, investors and 

financial service providers. 

B – Summary of the Request 

The Community Development Financial Intuitions (CDFI) Fund supports Treasury’s Strategic Goal 

1 (Boost U.S. Economic Growth) and Strategic Goal 4 (Transform Government-wide Financial 

Stewardship). The Budget requests the following for the CDFI Fund for FY 2019:

 $14 million in administrative funding to support:

- Management of the CDFI, Bond Guarantee (BG), and New Markets Tax Credit (NMTC) 

Programs; and

- Ongoing certification and compliance monitoring for all programs, including the Bank 

Enterprise Award (BEA) Program, the CDFI Program, the Native American CDFI 

Assistance (NACA) Program, and the Healthy Food Financing Initiative (HFFI). 

 The Budget eliminates funding for the CDFI Fund’s four discretionary grant and direct loan 

programs (i.e. the CDFI Program, the BEA Program, the NACA Program, and HFFI) and 

proposes to extend the CDFI BG Program, which offers CDFIs low-cost, long-term financing 

at no cost to taxpayers. The Budget also includes a proposal to eliminate new funding for 

Capital Magnet Fund (CMF) effective in 2019.

- The CDFI BG Program provides CDFIs access to capital by providing guarantees of 

bonds issued by Qualified Issuers. CDFIs invest the bond proceeds into our nation’s 

most distressed communities. CDFIs benefit by accessing long-term credit at belowmarket interest rates. The BG Program incentivizes and empowers CDFIs to execute 

large-scale projects, including the development of charter schools, commercial real 

estate, rental housing, senior living, daycare or healthcare centers, small businesses, and 

rural infrastructure, among others. The program requires no credit subsidy.

- The Budget proposes an annual commitment authority of $500 million and program 

changes to (1) reduce the minimum bond issue size from $100 million to $50 million; and 

(2) correct a technical drafting error related to the calculation of the relending account 

maximum. 
CDFI Fund - 4

1.1 – Appropriations Detail Table

Dollars in Thousands

Community Development 

Financial Institutions Fund FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Appropriated Resources Enacted** Annualized CR Request Change % Change

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Community Development 

Financial Institutions Program 0 $161,500 0 $160,403 0 $0 0 ($160,403) NA -100.00%

Bank Enterprise Award Program 0 $23,000 0 $22,844 0 $0 0 ($22,844) NA -100.00%

Native American CDFI Assistance 

Program 0 $15,500 0 $15,395 0 $0 0 ($15,395) NA -100.00%

Administration 74 $26,000 74 $25,823 42 $14,000 (32) ($11,823) -45.45% -45.78%

Healthy Food Financing Program 0 $22,000 0 $21,851 0 $0 0 ($21,851) NA -100.00%

Subtotal New Appropriated 

Resources 74 $248,000 74 $246,316 42 $14,000 (32) ($232,316) -45.45% -94.32%

Other Resources

User Fees * 0 $415 0 $700 0 $1,000 0 $300 NA 42.86%

Recovery From Prior Years 0 $642 0 $3,400 0 $2,500 0 ($900) NA -26.47%

Unobligated Balances Brought 

Forward 0 $28,312 0 $32,606 0 $5,000 0 ($27,606) NA -84.67%

Subtotal Other Resources 0 $29,369 0 $36,706 0 $8,500 0 ($28,206) NA -76.84%

Total Budgetary Resources 74 $277,369 74 $283,022 42 $22,500 (32) ($260,522) -45.45% -92.05%

* FY 2017 User Fees reflects authorization of the Bond Guarantee Program.

** This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the 

execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. FY 2017 FTE employment 

level reflects actuals, and the $ amount represents 2017 Enacted.
CDFI Fund - 5

1.3 – Operating Levels Table

Dollars in Thousands

Community Development Financial Institutions Fund FY 2017 FY 2018 FY 2019

Object Classification Enacted1 Annualized CR Request

11.1 – Full-time permanent 9,085 9,382 4,589 

11.9 – Personnel Compensation (Total) 9,085 9,382 4,589 

12.0 – Personnel benefits 2,991 3,067 2,160 

Total Personnel and Compensation Benefits $12,076 $12,449 $6,749 

21.0 – Travel and transportation of persons 59 40 15 

24.0 – Printing and reproduction 11 5 1 

25.1 – Advisory and assistance services 5,707 2,551 0 

25.2 – Other services from non-Federal sources 38 15 15 

25.3 –Other goods and services from Federal sources 4,420 6,908 5,212 

25.7 – Operation and maintenance of equipment 0 2,967 2,003 

26.0 – Supplies and materials 42 35 5 

31.0 – Equipment 3,647 853 0 

41.0 – Grants, subsidies, and contributions 222,000 220,493 0 

Total Non-Personnel $235,924 $233,867 $7,251 

New Budgetary Resources $248,000 $246,316 $14,000 

FTE 74 74 42

Note: This table includes total annually appropriated funding (FY 2017 Enacted, FY 2018 Annualized CR, and FY 2019 Request).

1This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the 

execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. FY 2017 FTE employment 

level reflects actuals, and the $ amount represents 2017 Enacted.
CDFI Fund - 6

C – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS 

FUND

To carry out the Riegle Community Development and Regulatory 

Improvements Act of 1994 (subtitle A of title I of Public Law 103–

325), including services authorized by section 3109 of title 5, 

United States Code, but at rates for individuals not to exceed the 

per diem rate equivalent to the rate for EX-3, $14,000,000, to be 

used for administrative expenses, including administration of 

CDFI fund programs and the New Markets Tax Credit Program: 

Provided, That during fiscal year 2019, none of the funds available 

under this heading are available for the cost, as defined in section 

502 of the Congressional Budget Act of 1974, of commitments to 

guarantee bonds and notes under section 114A of the Riegle 

Community Development and Regulatory Improvement Act of 1994 

(12 U.S.C. 4713a): Provided further, That commitments to 

guarantee bonds and notes under such section 114A shall not 

exceed $500,000,000 through December 31, 2019: Provided 

further, That such section 114A shall remain in effect until 

December 31, 2019. 

Note.—A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing 

Appropriations Act, 2018 (Division D of P.L. 115-56, as 

amended). The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution.

Extension of the Bond 

Guarantee Program 

through December 31, 

2019 to allow more time 

to close complex and 

time-consuming bond 

commitments.

D – Legislative Proposals

The Budget requests extension of the CDFI Bond Guarantee Program through December 31, 

2019 and elimination of new allocations into the Capital Magnet Fund effective in FY 2019. 

Legislative Language

SEC. 126. AMENDMENTS TO COMMUNITY DEVELOPMENT FINANCIAL 

INSTITUTIONS BOND PROGRAM. Section 114A of the Riegle Community Development and 

Regulatory Improvement Act of 1994 (12 U.S.C. 4713a) is amended— (a) in subsection (c)(2) 

by striking ", multiplied by an amount equal to the outstanding principal balance of issued notes 

or bonds"; and (b) in subsection (e)(2)(B), by striking "$100,000,000" and inserting 

"$50,000,000".
CDFI Fund - 7

Section II – Annual Performance Plan and Report

A – Strategic Alignment

The CDFI Fund’s mission is to expand economic opportunity for underserved people and 

communities by supporting the growth and capacity of a national network of community 

development lenders, investors, and financial service providers. The CDFI Fund supports the 

following Treasury’s FY 2018-2022 strategic goals: 

 Goal 1: Boost U.S. Economic Growth 

o Objective 1.2 – Strong Economic Fundamentals

 Goal 4: Transform Government-wide Financial Stewardship

o Objective 4.1 – Financial Data Access and Use

The CDFI Fund’s award recipients provide loans, investments, business counseling, basic 

banking services, and financial literacy training in some of the most distressed communities in 

the nation. These are the communities where job opportunities remain stagnant and that 

otherwise lack access to more mainstream forms of capital – the places in the United States that

are not progressing economically as other parts of our economy have improved. CDFI Fund 

award recipients use their awards to increase access to capital and help to improve the quality of 

life and the local economy in these communities.

The CDFI Fund has articulated five goals in its FY 2018-2022 Strategic Plan aimed at increasing

the impact of the CDFI Fund network by supporting the growth, reach, and performance of CDFI 

Fund awardees. These goals support Treasury’s strategic plan to: promote strong economic 

fundamentals; transform government-wide financial stewardship; and ensure financial data

access/use. 

The FY 2019 Budget will advance these goals by allowing the CDFI Fund to administer and 

fully staff the CDFI Fund’s programs that are authorized by Congress but do not require 

appropriated funds to make awards, i.e., the NMTC Program and CDFI BG Program. In 

addition, the CDFI Fund will continue to conduct ongoing program compliance for prior-year 

award recipients for all programs. 

The budget request is also intended to cover the cost to administer certification of CDFIs, as 

required by the Riegle Act, as well as Community Development Entities (CDEs), as required by

the NMTC program. CDFI certification is a prerequisite for eligibility for the BG Program and 

the Capital Magnet Fund (CMF), as well as other federal programs outside of the CDFI Fund. 

CDE certification is a prerequisite for eligibility for the NMTC program.
CDFI Fund - 8

B – Budget and Performance by Budget Activity

2.1.1 Administration- Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Enacted Annualized 

CR Request

Appropriated Resources $21,764 $24,636 $23,100 $23,600 $26,000 $25,823 $14,000 

Budget Activity Total $21,764 $24,636 $23,100 $23,600 $26,000 $25,823 $14,000 

FTE 76 76 76 77 74 74 42

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

ALL - Award Cycle Time 

(Months) 6.8 7.9 8.3 7.6 6.3 7.0 7.0 7.0

All - Time to Initial 

Disbursement (# Months) N/A N/A N/A B N/A N/A 4.5 4.5

ALL - Number of Affordable 

Housing Units Developed or 

Produced

26,391 32,621 27,004 35,251 27,443 28,000 28,000 28,000

Key: B - Baseline

2A - Administration

($14,000,000 from direct appropriations):

This encompasses the CDFI Fund’s operational support and management activities for each of its 

ongoing award programs. It includes, among other activities, developing notices of award 

availability and application materials; reviewing and evaluating certification and award 

applications; selecting awardees; finalizing the terms of award agreements; making 

disbursements; collecting and evaluating performance data; monitoring awardees’ compliance; 

and award closeout processes. 

Description of Performance:

The CDFI Fund’s two administrative measures are organization-wide efficiency measures based 

on how quickly awards are made and funds are disbursed.

 The All Cycle Time measures the average time from the date when applications are received 

to the date of award announcement (calculated in months as an average across all programs). 

In FY 2017, the 7 month cycle-time target was met because it took on average only 6.3

months to make the awards. This achievement reflects improved efficiency in making 

awards, which is largely a function of the implementation of the Awards Management and 

Information system (AMIS).

 The Time to Initial Disbursement is a new measure that indicates in months how quickly the 

CDFI Fund completes award agreements and makes the first disbursement of funds or issues 

tax credits. The results for FY 2017 have not yet been tabulated because this measure cannot 

be computed until 4.5 months have elapsed after the end of FY 2017. 
CDFI Fund - 9

 The Number of Affordable Housing Units Developed or Produced measure captures the 

number of affordable housing units developed or produced as a result of CDFI Fund 

awards as reported by CDFI, NMTC, and CMF Program awardees and allocation 

recipients. The FY 2017 actual result of 27,433 affordable housing units was slightly 

below the target of 28,000 affordable housing units. The FY 2018 target remains 28,000 

units, and it reflects projected outcomes for program investments from prior-year award

recipients’ reported eligible affordable housing projects. 

2.1.2 – Community Development Financial Institutions Program Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

CDFI Program Budget 

Activity Actual Actual Actual Actual Actual Annualized CR Request

Appropriated 

Resources $138,397 $146,364 $152,400 $153,423 $161,500 $160,403 $0

Budget Activity Total $138,397 $146,364 $152,400 $153,423 $161,500 $160,403 $0

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

CDFI - Percentage of Loans & 

Investments Originated in Eligible 

Distressed or Underserved 

Communities by Dollar Amount of 

Loans (Annual %)

77.1 70.8 80.1 80.9 81.2 60.0 60.0 N/A

CDFI - Percentage of Loans & 

Investments Originated in Eligible 

Distressed or Underserved 

Communities by Number of 

Loans

79.6 60.7 80.5 81.5 83.0 60.0 60.0 N/A

2B - Community Development Financial Institutions Program

($0 from direct appropriations): 

The CDFI Program makes Financial Assistance (FA) awards to CDFIs that have comprehensive 

business plans for creating community development impact and that demonstrate the ability to 

leverage private sector sources of financing, as well as Technical Assistance (TA) grants to 

CDFIs and entities proposing to become CDFIs. CDFIs use FA awards to further goals such as:

 Economic development (job creation, business development, and commercial real estate 

development);

 Affordable housing (rental housing and homeownership); and

 Financial services (provision of basic banking services and financial literacy training to 

underserved people and communities). 

Description of Performance:

The CDFI Program has two measures: (1) the percentage of loans and investments originated in 

eligible distressed communities or made to underserved populations, as measured against the 

total dollar amount of loans originated by awardees; and (2) the percentage of loans and 

investments originated in eligible distressed communities or to underserved populations, as 

measured against the total number of loans originated by awardees.
CDFI Fund - 10

Certification criteria require that all certified CDFIs originate at least 60.0 percent of their loans

and investments in eligible distressed census tracts or to underserved populations. The target is 

set at a level that allows CDFIs to balance their mission to serve distressed communities and 

underserved populations with their safety and soundness considerations. 

In FY 2017, the CDFI Program surpassed the 60.0 percent threshold for the percentage of both 

the dollar amount (81.2 percent) and the number of CDFI loans (83.0 percent) made to eligible 

distressed communities and underserved populations. The FY 2018 target remains 60.0 percent 

to ensure that CDFIs can balance mission with safety and soundness objectives.

2.1.3 – New Markets Tax Credit Program Resources and Measures 

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

New Markets Tax Credit 

Budget Activity Actual Actual Actual Actual Actual Annualized CR Request

Appropriated Resources $0 $0 $0 $0 $0 $0 $0

Budget Activity Total $0 $0 $0 $0 $0 $0 $0

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

NMTC - Percentage of Loans 

and Investments That Went 

Into Severely Distressed 

Communities

78.5 73.8 75.2 74.5 77.5 74.0 75.0 75.0

2C – New Markets Tax Credit Program 

($0 from direct program appropriations):

The NMTC Program stimulates capital investment in low-income communities nationwide by 

permitting individual and corporate taxpayers to receive a non-refundable tax credit against 

federal income taxes for making equity investments in vehicles known as CDEs. CDEs that 

receive the tax credit allocation authority under the program are domestic corporations or 

partnerships that provide loans, investments, or financial counseling in low-income urban and 

rural communities. 

On December 18, 2015, Congress extended the authorization of the NMTC Program for 

$3.5 billion per year through 2019.

Description of Performance:

The Calendar Year (CY) 2015 and CY 2016 NMTC allocation authority was allocated in 

November 2016 as a combined round, in which the NMTC Program awarded $7 billion in 

NMTC allocation authority to 120 CDEs, out of a pool of 238 applicants requesting $17.6

billion. 

In FY 2017, 77.5 percent of NMTC investments were made in severely-distressed communities,

exceeding the target by more than three percentage points. This performance indicates that 

CDEs continue to meet their commitments in severely-distressed communities. Because the 

trend data indicates improvement, the CDFI Fund has elevated the FY 2018 and FY 2019 targets 

to 75 percent.
CDFI Fund - 11

In August 2017, the CDFI Fund released the Compliance Review of New Markets Tax Credit

Program1report commissioned by the CDFI Fund and conducted by Summit Consulting, LLC. 

The independent report examines whether NMTC recipients have complied with program 

requirements and if recipients’ “investment activities have aligned with the objectives of the 

NMTC Program.” The report emphasizes the NMTCs are being used as Congress intended – to 

attract private investment into projects in economically-distressed communities – and documents 

the ways CDEs are meeting and generally exceeding NMTC Program requirements.

The report addresses questions and recommendations posed by the Government Accountability 

Office regarding the distribution of benefits among the NMTC Program’s stakeholders, 

investors’ rates of return, and the role that other public investments play in NMTC investments. 

Among the report’s key findings are:

 CDEs often go beyond compliance requirements, providing more flexible capital and 

investing in more highly-distressed areas than the NMTC Program requires;

 The flexible financing provided by CDEs reduces the net cost of capital for borrowers; and

 Many CDEs use a rigorous project selection process that included a “but-for analysis,”

community benefit considerations, and advisory board involvement.

A review of NMTC projects showed that approximately two-thirds received public funding 

consistent with financing gaps. The remaining one-third revealed that projects located in highly 

distressed areas may need more public funding to attract private investment to enhance 

community benefits or to support initial project operating costs.

 

1 https://www.cdfifund.gov/Documents/Summit%20-

%20Compliance%20Review%20of%20New%20Markets%20Tax%20Credit%20Program%20-

%20August%20Date%20-%20508%20Compliant.pdf
CDFI Fund - 12

2.1.4 – Bank Enterprise Award Program Performance and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Bank Enterprise Award 

Program Budget Activity Actual Actual Actual Actual Actual Annualized CR Request

Appropriated Resources $17,058 $18,000 $18,000 $19,000 $23,000 $22,844 $0

Budget Activity Total $17,058 $18,000 $18,000 $19,000 $23,000 $22,844 $0

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

BEA - Increase in Community 

Development Activities Over 

Prior Year For All BEA 

Program Applicants ($ million)

493.5 723.5 759.9 539 TBD 500 500 N/A

2D – Bank Enterprise Award Program

($0 from direct appropriations):

The BEA Program provides monetary awards to regulated banks and thrifts for increasing their 

investments in CDFIs through grants, stock purchases, loans, deposits, and other forms of 

financial and technical assistance, and for increasing their lending, investment, and service 

activities in economically-distressed communities where at least 30 percent of residents have 

incomes less than the national poverty level and where the unemployment rate is at least 1.5 

times the national unemployment rate. 

Description of Performance:

The BEA Program measures applicants’ increase in qualified community development activities 

over the prior year. In FY 2017, the CDFI Fund awarded $18.6 million from the FY 2016 

appropriated BEA Program funds. The award round for FY 2017 opened in September 2017,

with award announcements expected to be made in April 2018.

The performance target for the FY 2016 round was met. BEA program applicants documented 

$539 million in increased qualified community development activities, exceeding the target of 

$450 million.

In June 2017, the CDFI Fund released the Bank Enterprise Award Program Baseline Analysis 

and Evaluation2report, which is an independent third-party evaluation of the BEA Program. 

The report found that the BEA Program targets census tracts with much lower income levels and 

higher poverty rates than are typically required under the Community Reinvestment Act (CRA). 

In addition, applicants and awardees surveyed during the BEA Program evaluation indicated 

program awards mitigate the financial risks and costs of operating bank branches in highlydistressed communities and are a factor in shaping the financial products and services offered in 

these communities. The report’s analysis shows that CDFI banks and CDFIs generally lend at a 

greater frequency in highly distressed communities than CRA-reporting banks, and that BEA 

awardees typically originate a larger share of their loans in persistent-poverty areas than CRAreporting banks. The evaluation also found that the BEA Program has evolved over time, and it 

 

2 https://www.cdfifund.gov/news-events/news/Pages/news-detail.aspx?NewsID=260&Category=Press%20Releases
CDFI Fund - 13

now focuses on providing awards to smaller CDFI banks that increase their activities in 

distressed communities, as well as to larger non-CDFI banks that invest in CDFIs to reach more 

highly distressed areas than they otherwise would.

2.1.5 – Native American CDFI Assistance Program Performance and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Native American CDFI 

Assistance Program Actual Actual Actual Actual Actual Annualized CR Request

Appropriated Resources $11,372 $15,000 $15,000 $15,500 $15,500 $15,395 $0

Budget Activity Total $11,372 $15,000 $15,000 $15,500 $15,500 $15,395 $0

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

NACA - Percentage of 

NACA Loans and 

Investments in Native Areas 

($ Amount of Loans)

75.5 57.9 65 61.2 42.6 50.0 50.0 N/A

NACA - Percentage of 

NACA Loans and 

Investments in Native Areas 

(# of Loans)

93.3 87 95.9 96.3 94.5 50.0 50.0 N/A

2E – Native American CDFI Assistance Program

($0 from direct appropriations):

Through the NACA Program, the CDFI Fund assists entities in overcoming barriers that prevent 

access to credit, capital, and financial services in American Indian, Alaska Native, and Native

Hawaiian communities. The NACA Program makes monetary awards to increase the number 

and capacity of existing or new Native CDFIs (i.e., CDFIs that serve Native communities). In 

addition, the NACA Program provides training to help strengthen and develop Native CDFIs. 

Native CDFIs lend where other mainstream financial institutions have not and serve the poorest 

individuals, families, and businesses in Native communities.

Description of Performance:

In FY 2016, two new measures of performance were approved for the NACA Program: (1) the 

percentage of the number of loans, and (2) the dollar amount of loans, made in tribal lands 

(based on Federal Designations of Tribal areas) or to Native people. In accordance with their 

Financial Assistance agreements, NACA awardees are required to originate 50.0 percent or more 

of their loans and investments in Native areas or to Native populations. This threshold is set to 

allow the awardees to balance their mission of serving Native areas and populations with safety 

and soundness considerations.

These two measures were first baselined in FY 2017 with outcome data from 2016. It showed 

that 61 percent of dollars originated, and over 96 percent of the number of loans originated, were 

in Native Areas or to Native borrowers. The preliminary data for FY 2017 reflects a shortfall in 

the dollar amount of loans originated – just 42.6 percent – but the target for the percent of loans 

was exceeded, with performance of 94 percent. The preliminary data is incomplete due to latefiled reports. Based on past reporting patterns, the CDFI Fund expects that complete data will 

show a higher percentage of the dollar amount of loans originated. Enhanced compliance 
CDFI Fund - 14

monitoring procedures and improvements in the performance reporting systems should mitigate 

these reporting problems in the future. The target for FY 2018 remains 50 percent.

2.1.6 - Healthy Food Financing Initiative Performance and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Healthy Food Financing 

Initiative Actual Actual Actual Actual Actual Annualized CR Request

Appropriated Resources $20,849 $35,000 $22,000 $22,000 $22,000 $21,851 $0

Budget Activity Total $20,849 $35,000 $22,000 $22,000 $22,000 $21,851 $0

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

HFFI - Retail Outlets 

Created/Preserved 31 33 35 19 24 20 20 N/A

2F – Healthy Food Financing Initiative

($0 from direct appropriations):

The Healthy Food Financing Initiative (HFFI) aims to eliminate “food deserts” – low-income 

urban and rural areas in the United States with limited access to affordable and nutritious food –

by financing interventions that expand the supply of, and demand for, nutritious foods. The 

objectives include increasing the distribution of agricultural products, developing and equipping 

grocery stores, and strengthening producer-to-consumer relationships.

Through the HFFI, the CDFI Fund awards CDFI Program funds to certified CDFIs to help 

address the need for healthy food in underserved and low-income communities. These 

organizations use federal grants, below market-rate loans, loan guarantees, and tax credits to 

attract private sector financing for projects that increase access to healthy food options.

Description of Performance:

The primary HFFI performance measure is the number of healthy food retail stores created and 

maintained in low-income areas that have been identified through detailed census tract analysis 

as having limited access to healthy food options. In FY 2017, the number of HFFI Retail outlets 

created was 24. Under the current continuing resolution, the target is 20 new retail outlets for 

FY 2018. 
CDFI Fund - 15

2.1.7 - Capital Magnet Fund Program Resource Detail Table

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Capital Magnet Fund 

Program Actual Actual Actual Actual Actual Annualized CR * Request

GSE Distribution NA NA NA $100,292 $119,413 $0 $0 

Budget Activity Total $0 $0 $0 $100,292 $119,413 $0 $0

FTE 0 0 0 0 7 7 0

* The Budget assumes no funds will be provided to the CMF in 2018 in accordance with the Federal Housing Finance Agency's 

2014 stated policy that funds will not be transferred if the transfer would cause the GSEs to draw on the Treasury funding 

commitment under the Preferred Stock Purchase Agreements (PSPAs). The Budget anticipates that such a draw will occur in 2018 

as a result of the enactment of tax reform legislation.

2G - Capital Magnet Fund Program

($0 from direct appropriations):

The CMF program was authorized by the Housing and Economic Recovery Act of 2008, which 

calls for recurrent funding of the CMF through allocations from the Government-Sponsored 

Enterprises (GSEs) Fannie Mae and Freddie Mac. Through CMF, the CDFI Fund provides grants 

to CDFIs and qualified non-profit housing organizations to finance affordable housing, community 

service facilities, and economic development. Award recipients can use funds to create financing 

tools such as loan loss reserves, revolving loan funds, risk-sharing loans, and loan guarantees. The 

Budget proposes to suspend new allocations into the CMF effective in FY 2019.

Description of Performance: 

The primary performance measures of the CMF are the number of affordable housing units for 

which CMF funding was a source of financing, and the degree to which private funding sources 

were leveraged by CMF financing. Data are included in performance table 2.1.1 above.

Awardee reports available through September 30, 2017, indicate that the total number of 

affordable homes under development or completed with CMF financing, through the end of the 

awardees’ FY 2016 were:

 13,325 affordable homes under development or completed with CMF financing (a net 

addition of 2,430)

o Affordable rental homes financed: 11,727 (a net addition of 2,220)

o Affordable homeowner-occupied homes financed: 1,598 (a net addition of 210)

 Leverage: 1:20 (This ratio does not include leverage from the reinvestment of funds. The 

target set by Congress was 10 times leveraging.) 

2.1.8 - Bond Guarantee Program Resource Detail Table

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Bond Guarantee Program Actual Actual Actual Actual Actual Annualized 

CR Request

Obligations $325,000 $200,000 $327,000 $265,000 $260,000 $500,000 $500,000 

Loan Limitation Obligation 

Authority $1,000,000 $750,000 $750,000 $750,000 $500,000 $500,000 $500,000 
CDFI Fund - 16

2.1.9 - Financing Accounts – Non-Budgetary Summary 

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Anualizd 

CR Request

Obligations $325,000 $200,000 $327,000 $265,000 $260,000 $500,000 $500,000 

Collections* $0 $356 $2,966 $9,377 $20,927 $44,720 $72,310

*Includes the principal and interest repayments and a 10 basis point fee for administrative expenses pursuant to Section 1134 of the 

Small Business Jobs Act of 2010. These amounts assume a zero subsidy rate with bond loan disbursement of $456 million and 

$427 million, in FY 2018 and FY 2019, respectively.

2H - CDFI Bond Guarantee Program

Through the CDFI Bond Guarantee Program, Treasury provides a 100 percent guarantee of

bonds (including principal, interest, and call premiums) issued by Qualified Issuers. Bonds 

issued through the program support CDFI lending and investment activity in underserved

communities by providing a source of long-term capital. Qualified Issuers use bond proceeds to 

finance loans to eligible CDFIs for community and economic development purposes. 

Since the inception of the program, the total amount of bonds guaranteed is $1.362 billion. A

total of 26 Eligible CDFIs and three Qualified Issuers participate in the CDFI Bond Guarantee 

Program. Upon the closing of each bond, the eligible CDFIs have five years to lend or disburse 

the bond proceeds.

The table below provides the year-to-date (YTD) and proposed disbursement for the top eight 

asset classes.

Asset Class

YTD 

Disbursements

($ millions)

YTD 

Disbursements 

(%)

Proposed

Disbursements

($millions)

Proposed 

Disbursements

(%)

Charter schools $192.3 33.2% $346.6 25.4%

Rental housing $149.4 25.8% $334.2 24.5%

Commercial real estate $91.9 15.9% $269.9 19.8%

Financing Entity $72.3 12.5% $150.6 11.1%

Healthcare Facilities $29.8 5.15% $68.4 5.0%

Not-for-profits $29.0 5.0% $94.0 6.9%

Small business $8.3 1.4% $ 29.5 2.2%

Daycare centers $6.2 1.1% $ 28.5 2.1%

Performance Measure Changes

With the publication of Treasury’s Strategic Plan for FY 2018-2022, the CDFI Fund will work 

this year to baseline the performance for the new strategic objectives. This could result in 

changes to performance measures in the FY 2020 budget.
CDFI Fund - 17

Section III – Additional Information

A – Summary of Capital Investments

As part of its FY 2019 capital investment strategy, the CDFI Fund plans to spend approximately 

$2.55 million for operations and maintenance of its Information Technology (IT). The CDFI 

Fund has no major IT investments, nor any capital investments other than IT.

Non-Major IT Investments

For FY 2019, the CDFI Fund has identified two non-major IT investments: Awards Management 

Information System (AMIS) and the CDFI Fund public website. AMIS is an enterprise-wide

commercial, cloud-based solution that supports CDFI Fund certification, tax credit allocation, 

bond guarantee, and grant programs. The first AMIS deployment was implemented in

September 2015. Full deployment is planned for September 2018. The CDFI Fund public 

website, which is another cloud-based solution, provides access to general information about the 

CDFI Fund and is used to ensure the public can obtain information and guidance regarding CDFI 

Fund programs. For FY 2019, the CDFI Fund plans to provide Operations and Maintenance 

(O&M) support for these two IT investments.

IT Infrastructure Investments

The CDFI Fund’s IT infrastructure is managed via an Interagency Agreement with the Alcohol 

and Tobacco Tax and Trade Bureau (TTB). Treasury has seen numerous benefits from the CDFI 

Fund/TTB arrangement. It increases utilization of Treasury’s data centers and enables the CDFI 

Fund to leverage existing Disaster Recovery and Continuity of Operations capabilities. The 

CDFI Fund avoids software upgrade costs by using TTB’s enterprise software licenses. This 

reduces duplicative services (such as Web monitoring and filtering) and eliminates contracts 

used to maintain the CDFI Fund’s IT infrastructure.

A summary of the CDFI Fund’s capital investment resources, including major IT and nontechnology investments can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

Financial Crimes Enforcement 

Network

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
FinCEN - 2

Table of Contents

Section I – Budget Request.......................................................................................................... 3

A – Mission Statement...............................................................................................................3

B – Summary of the Request .....................................................................................................3

1.1 Appropriations Detail Table............................................................................................4

1.2 – Budget Adjustments Table................................................................................................4

C – Budget Increases and Decreases Description......................................................................4

1.3 – Operating Levels Table.....................................................................................................7

D – Appropriations Language and Explanation of Changes .....................................................8

E – Legislative Proposals...........................................................................................................8

Section II – Annual Performance Plan and Report.................................................................. 9

A – Strategic Alignment ............................................................................................................9

B – Budget and Performance by Budget Activity ...................................................................10

2.1.1 BSA Administration and Analysis Resources and Measures.........................................10

BSA Administration and Analysis Budget and Performance ..................................................11

C – Changes in Performance Measures...................................................................................12

Section III – Additional Information ....................................................................................... 13

A – Summary of Capital Investments......................................................................................13
FinCEN - 3

Section I – Budget Request

A – Mission Statement

Safeguard the financial system from illicit use and combat money laundering and promote 

national security through the collection, analysis, and dissemination of financial intelligence and 

strategic use of financial authorities.

B – Summary of the Request 

The FY 2019 President’s Budget requests additional resources of $3,578,000 to maintain 

current levels, enhance FinCEN’s national security capacity and to begin the development of a 

non-bank financial institutions (NBFI) risk assessment profile by targeting compliance toward 

the highest risk.

FinCEN is a bureau in the U.S. Department of the Treasury. The Director of FinCEN reports to 

the Under Secretary for Terrorism and Financial Intelligence (TFI). FinCEN supports the 

Treasury Strategic Goal 3: Enhance National Security and Goal 5: Achieve Operational 

Excellence. In Strategic Goal 3, FinCEN supports the following Treasury Strategic Objectives: 

3.1 Strategic Threat Disruption – Identify, disrupt, and dismantle priority threats to the U.S. and 

international financial system and Treasury Strategic Objective 3.2 Anti-Money 

Laundering/Combating Financing of Terrorism (AML/CFT) Framework – Identify and reduce 

vulnerabilities in the U.S. and international financial system to prevent abuse by illicit actors.

In carrying out its mission, FinCEN has numerous statutory areas of responsibility:

 Developing and issuing regulations under the Bank Secrecy Act (BSA); 

 Enforcing compliance with the BSA in partnership with law enforcement and other 

regulatory partners; 

 Serving as the U.S. Financial Intelligence Unit (FIU) and maintaining a network of 

information sharing with FIUs in 156 partner countries; 

 Receiving millions of new financial reports each year; 

 Securing and maintaining a database of over 190 million reports; 

 Analyzing and disseminating financial intelligence to federal, state, and local law 

enforcement, federal and state regulators, foreign FIUs, and industry; 

 Bringing together the disparate interests of law enforcement, FIUs, regulatory partners, 

and industry.
FinCEN - 4

1.1 Appropriations Detail Table

Dollars in Thousands

Financial Crimes 

Enforcement Network FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Appropriated Resources Enacted 1/

Annualized 

CR 2/ Request Change % Change

New Appropriated 

Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

BSA Administration 

and Analysis 274 $115,003 304 $114,222 332 $117,800 28 $3,578 9.21% 3.13%

Subtotal New 

Appropriated Resources 274 $115,003 304 $114,222 332 $117,800 28 $3,578 9.21% 3.13%

Other Resources

 Reimbursables 1 $3,000 1 $3,000 1 $3,000 0 $0 0.00% 0.00%

 Recovery from Prior 

Years 0 $500 0 $500 0 $500 0 $0 NA 0.00%

Subtotal Other 

Resources 1 $3,500 1 $3,500 1 $3,500 0 $0 0.00% 0.00%

Total Budgetary 

Resources 275 $118,503 305 $117,722 333 $121,300 28 $3,578 9.18% 3.04%

1/ FY 2017 shows actual FTE usage. This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 

2017. For further details on the execution of these resources, see the 2019 Budget Appendix chapter for the Department of the 

Treasury. 

2/ FY 2018 shows anticipated FTE usage with funded FTE at 332.

1.2 – Budget Adjustments Table

Dollars in Thousands

Financial Crimes Enforcement Network (FinCEN) FTE Amount

FY 2018 Annualized CR 304 $114,222 

Changes to Base:

Maintaining Current Levels (MCLs): 0 $1,421 

Pay Annualization 0 $260 

Non-Pay 0 $1,161 

Subtotal Changes to Base 0 $1,421 

Total FY 2019 Base 304 $115,643 

Program Changes:

Annualization of FY 2018 Hiring 28 $0 

Program Decrease 0 ($1,161)

Programmatic Contract and Equipment Reductions 0 ($1,161)

Program Increases: 0 $3,318 

Enhance National Security Capacity 0 $2,118 

Develop NBFI Risk Assessment Scoring Model 0 $1,200 

Total FY 2019 Request 332 $117,800 

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs)........................................................+$1,421,000 / +0 FTE

Pay Annualization +$260,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay-raise.

Non-Pay +$1,161,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, rent, contracts, supplies, and 

equipment.
FinCEN - 5

Program Changes....................................................................................................+$0 / +28 FTE

Annualization of FY 2018 Hiring +$0 / +28 FTE

This adjustment is required to reflect the positive results of FinCEN’s hiring surge through 

September 2019, which is expected to right size the workforce to the funded FTE level.

Program Decreases ......................................................................................-$1,161,000 / -0 FTE

Programmatic Contract and Equipment Reductions -$1,161,000 / -0 FTE

This reduction will be taken through evaluation of increases or changes in proposed acquisitions 

of contractual services and equipment. FinCEN will evaluate contracts during the renewal 

process to absorb this reduction.

Program Increases .....................................................................................+$3,318,000 / +0 FTE

Enhance National Security Capacity +$2,118,000 / +0 FTE

These funds are necessary to sustain FinCEN’s increased contractor resources needed to

adequately support Treasury’s Terrorism and Financial Intelligence priorities. FinCEN is 

increasingly called upon to identify sources of revenue for illicit actors and their attempts to 

access and exploit the international financial system. These requests stem from the growing 

threats from rogue nations including the Democratic People’s Republic of North Korea (DPRK)

and continued efforts to combat international organized crime, terrorism, narcotics, and 

cybercrime. These additional funds will support these activities, as well as the growing analysis 

of and demand for FinCEN’s BSA data to assist in combating the emerging threats to the 

financial system. Two areas of FinCEN, in particular, will benefit most from this financial 

support are outlined below. 

In the area of enforcement, additional funding will help FinCEN keep pace with its increasing 

national security workload through the use of its unique regulatory authorities. This includes 

the use of special measures provided under Section 311 of the USA PATRIOT Act to target 

foreign jurisdictions, foreign financial institutions, or international financial transactions of 

primary money laundering concern that pose national security threats to the global financial 

system. Additionally, the use of targeted financial measures such as Geographic Targeting 

Orders has increased, consistent with FinCEN’s ongoing efforts to enhance the collection of 

financial intelligence on terrorist groups and other national security threats. Finally, FinCEN 

will continue to exercise its Foreign Financial Agency regulatory authority to obtain special 

collections of financial intelligence from U.S. financial institutions such as international 

transactions related to specific individuals, entities, or jurisdictions. This effort adds significant 

value to the collective government efforts to counter terrorist financing activities. 

In the area of intelligence, FinCEN continues to support Treasury’s broader national security 

efforts by identifying funding streams for illicit actors, including terrorists and terrorist 

financiers. This includes processing alerts on BSA filings and developing reports for 

dissemination to FinCEN customers in law enforcement, the intelligence community, and 

foreign FIUs. In many cases, FinCEN is the only link between the intelligence community and 

financial intelligence maintained pursuant to the reporting obligations under the BSA. As part 

of that effort, FinCEN is increasingly called upon to identify financial flows and money 

laundering activities tied to terrorism financing, transnational organized crime, trade-based 

money laundering networks, proliferation concerns of priority threat areas, and more recently 

the illicit narcotics proceeds that fuel the opioid crisis. 
FinCEN - 6

Also in the area of intelligence, the ongoing need to adapt to the evolving and increasingly 

complex nature of financial crimes, which often involves a cyber or other highly technical 

element is critical. From spear phishing to ransomware, the majority of cybercrimes involve a 

financial nexus that often goes unexplored in other law enforcement investigations. The BSA 

provides the most comprehensive reporting structure for suspicious financial activity covering

one of the most targeted critical infrastructure industries—financial services. FinCEN uses the 

unique abilities of its cyber team to bridge financial and cyber investigations, finding previously 

undiscovered information and connecting cases that often appear unrelated. These funds will 

assist in moving the cyber program forward enabling it to field further accomplishments. 

Develop NBFI Risk Assessment Model +$1,200,000 / +0 FTE

This funding will allow FinCEN to begin the development of a Non-Bank Financial Institution 

(NBFI) Risk Assessment Model that will ultimately improve FinCEN’s ability to identify, 

detect, and examine the highest risk NBFIs and foster enhanced BSA compliance within the 

NBFI sectors. NBFIs have the potential to create significant vulnerabilities for the financial 

system that can be exploited by money launders, terrorist financiers, and other criminal actors. 

These sectors encompass approximately 320,000 financial institutions and over $13 trillion in 

financial services. The NBFI sector includes money service businesses (MSBs), including 

virtual currency exchanges and administrators; casinos and card clubs, dealers in precious 

metals, stones, or jewels; certain insurance companies; and non-bank mortgage lenders and 

originators. NBFIs present inherent risks to the U.S. and global financial system ranging from 

the lack of traditional depository institution relationships for MSBs; the abuse of casinos and 

card clubs by criminal organizations; the relative isolation of precious metals, stones, and jewels

from the financial services sector; and the rapidly changing technologies and customer 

identification challenges of virtual currency exchanges and administrators.

These inherent risks are amplified by challenges to mitigate these risks through supervision and 

examination. While FinCEN and the Internal Revenue Service (IRS), as its delegated 

examination authority, have striven to provide a robust oversight regime, the sheer numbers, 

volumes, and lack of regulatory requirements aside from those mandated under the BSA, have 

made even identifying the complete NBFI population challenging. This initiative will begin a 

process to identify the NBFI population and develop associated risk profiles that will be 

assigned to these NBFI entities, as well as assigning risk assessments across the entire 

population. To compensate for the examination challenges of this unique population, this 

initiative will construct an automated, data-driven risk examination selection and assignment 

system to identify high risk NBFI’s and prioritize examination to better utilize the limited 

examination force.

This effort is the first step to ensure that these sectors are effectively supervised; and, it is a key 

Treasury Department priority not only to mitigate these vulnerabilities but also to protect the 

financial system from criminal abuse. This initiative will also help NBFIs continue to play their 

important role in financial inclusion and the economy, and to improve the government’s 

oversight and supervision of this industry that is a leading risk factor that banks cite when 

making decisions to sever NBFI business relationships on a wholesale basis.
FinCEN - 7

1.3 – Operating Levels Table

Dollars in Thousands

Financial Crimes Enforcement Network (FinCEN) FY 2017 FY 2018 FY 2019

Object Classification Enacted 1/ Annualized CR Request

11.1 - Full-time permanent 41,817 41,817 42,076 

11.3 - Other than full-time permanent 408 408 408 

11.5 - Other personnel compensation 205 205 205 

11.9 - Personnel Compensation (Total) 42,430 42,430 42,689 

12.0 - Personnel benefits 12,260 12,260 12,261 

Total Personnel and Compensation Benefits $54,690 $54,690 $54,950 

21.0 - Travel and transportation of persons 615 630 649 

23.1 - Rental payments to GSA 4,130 4,151 4,234 

23.2 - Rental payments to others 32 40 42 

23.3 - Communications, utilities, and miscellaneous charges 1,670 1,670 1,726 

24.0 - Printing and reproduction 207 153 153 

25.1 - Advisory and assistance services 1,097 1,097 1,097 

25.2 - Other services from non-Federal sources 17,112 16,345 19,503 

25.3 - Other goods and services from Federal sources 9,496 9,496 9,496 

25.6 - Medical care 174 174 174 

25.7 - Operation and maintenance of equipment 17,979 17,979 17,979 

26.0 - Supplies and materials 326 322 322 

31.0 - Equipment 7,475 7,475 7,475 

Total Non-Personnel $60,313 $59,532 $62,850 

New Budgetary Resources $115,003 $114,222 $117,800 

FTE 274 304 332

Note: This table includes total annually appropriated funding (enacted for FY 2017, FY 2018 Annualized CR and FY 2019 request) 

and FTEs are Actual for FY 2017.

1/ This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017. For further details on the 

execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury.
FinCEN - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

FINANCIAL CRIMES ENFORCEMENT NETWORK

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of the Financial Crimes Enforcement 

Network, including hire of passenger motor vehicles; travel and 

training expenses of non-Federal and foreign government 

personnel to attend meetings and training concerned with 

domestic and foreign financial intelligence activities, law 

enforcement, and financial regulation; services authorized by 5 

U.S.C. 3109; not to exceed $12,000 for official reception and 

representation expenses; and for assistance to Federal law 

enforcement agencies, with or without reimbursement, 

$117,800,000, of which not to exceed $34,335,000 shall remain 

available until September 30, 2021.

Note.—A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing

Appropriations Act, 2018 (Division D of P.L. 115–56, as 

amended). The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution.

E – Legislative Proposals

FinCEN has no legislative proposals.
FinCEN - 9

Section II – Annual Performance Plan and Report

A – Strategic Alignment

FinCEN supports the Treasury Strategic Goal 3: Enhance National Security and Goal 5: 

Achieve Operational Excellence. In Strategic Goal 3, FinCEN supports Treasury Strategic 

Objectives: 3.1 Strategic Threat Disruption – Identify, disrupt, and dismantle priority threats to 

the U.S. and international financial system and Treasury Strategic Objective 3.2 Anti-Money 

Laundering/Combating Financing of Terrorism (AML/CFT) Framework – Identify and reduce 

vulnerabilities in the U.S. and international financial system to prevent abuse by illicit actors.

FinCEN receives BSA reports and maintains a database; analyzes and disseminates financial 

intelligence to federal, state, and local law enforcement, federal and state regulators, foreign 

FIUs, and industry; and serves as the U.S. FIU and maintains an information sharing network 

with FIU partner countries; develops and issues regulations under the BSA; and enforces 

compliance with the BSA in partnership with regulatory partners.

In FY 2017, FinCEN had several noteworthy accomplishments highlighted below: 

 assessed six penalties against financial institutions in multiple industry groups including one 

virtual currency exchanger and an executive of the company; 

 reported terrorism-related financial intelligence to law enforcement and foreign partners;

produced financial analysis on organized crime groups in the U.S. related to narcotics and 

third party money laundering networks, trade based money laundering schemes;

 issued intelligence assessments on the exploitation of emerging payment systems as well as

issued 311 actions to further restrict North Korea’s access to the U.S financial system and 

against a foreign financial institution of primary money laundering concern, Bank of 

Dandong, in support of sanctions activities;

 issued advisories to the financial community on anti-money laundering risks associated with 

all-cash residential real estate transactions; cyber threats from business e-mail compromise 

fraud schemes; and individuals and entities in South Sudan, Venezuela, and North Korea 

who use the financial systems to further other illegal activities; and 

 continued its Global Rapid Response Program, recovering or restraining over $300 million 

obtained through Business Email Compromise and other cyber-enabled crimes targeting 

financial institutions and their clients. 

FinCEN’s FY 2018 and FY 2019 priorities include:

 disrupt the capability of priority targets, such as North Korea, to raise, use, and move funds 

through strategic application of Treasury’s tools and authorities; 

 identify threats to the financial system from terrorists, proliferators, rogue regimes, and 

criminal actors through exploitation and analysis of BSA data, other financial information, 

and all-source intelligence research and analysis;

 expand current and facilitate new threat information sharing and collaboration with 

domestic and international partners to address risks to the U.S. and global financial system; 

 proactively identify vulnerabilities within financial system and address them through a riskbased approach that integrates oversight measures, regulations, targeted enforcement 

actions, and compliance; and
FinCEN - 10

 modernize, streamline, and simplify the regulatory framework to more effectively and 

efficiently address national security priorities.

B – Budget and Performance by Budget Activity

2.1.1 BSA Administration and Analysis Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Enacted Enacted Enacted Enacted Enacted Annualized 

CR Request

Appropriated Resources $104,993 $112,000 $112,000 $112,979 $115,003 $114,222 $117,800 

Reimbursables Resources $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 

Budget Activity Total $107,993 $115,000 $115,000 $115,979 $118,003 $117,222 $120,800 

FTE (Actual) 302 279 276 279 275 305 333

Note: FY 2013-2017 FTE are actual FTE levels. FY 2018 shows anticipated FTE usage. 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 

2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Customers 

Finding that FinCEN's Analytic 

Products and Advanced 

Research Positively Affected 

Investigations, Operations, or 

Understanding of Threats to 

the Financial System

N/A N/A N/A 95 92 95 90 90

Percentage of Stakeholders 

Finding FinCEN’s Information 

Sharing Has Contributed to 

Their Organization’s 

Responsibilities

N/A N/A 89 91 90 92 90 90

Percentage of Users Finding 

That the Financial Intelligence 

Collected by FinCEN Pursuant 

its Regulations Provides 

Valuable Information to 

Safeguard the Financial 

System, Combat Money 

Laundering, and Counter 

Terrorist Financing

90 80 81 83 86 85 86 86

Percentage of Users Satisfied 

with FinCEN Information 

Sharing Systems

N/A N/A 78 80 87 84 84 84

Percent of financial regulators 

who find FinCEN’s 

enforcement and compliance 

efforts effective

N/A N/A N/A N/A 0.91 B 0.9 0.9

Percentage of AML/CFT 

Supervisors Who Indicate That 

FinCEN’s Enforcement Actions 

Have Resulted in Increased 

Compliance by Covered 

Financial Institutions

N/A N/A 81 94 82 94 Disc Disc

Key: DISC - Discontinued; B - Baseline
FinCEN - 11

BSA Administration and Analysis Budget and Performance

($117,800,000 from direct appropriations, $3,000,000 from reimbursable resources):

Description of Performance:

FinCEN tracks the percentage of customers finding that FinCEN's analytic products and 

advanced research positively affected their investigations, operations, or understanding of 

threats to the financial system. This measure supports the Treasury Strategic Objective 3.1: 

Strategic Threat Disruption – identify, disrupt, and dismantle priority threats to the U.S. and 

international financial system. In FY 2017, 92 percent of respondents found that the analytic 

products and research had an impact on the investigations, missing the FY 2017 target of 95 

percent. To meet future targets, FinCEN will concentrate on expanding product dissemination, 

increasing outreach to customers of its intelligence products, and improving processes to obtain 

feedback about product usefulness. The FY 2018 and FY 2019 targets are set at 90 percent.

FinCEN measures the percentage of stakeholders finding that FinCEN’s information sharing 

has contributed to their organization’s responsibilities. This measure supports the Treasury 

Strategic Objective 3.1: Strategic Threat Disruption – identify, disrupt, and dismantle priority 

threats to the U.S. and international financial system. In FY 2017, FinCEN missed its target 

[satisfaction rate] of 92 percent with 90 percent of respondents finding the information sharing 

helpful. FinCEN will further seek to refine and optimize its financial intelligence information 

sharing efforts among both its domestic and foreign partners in government and private industry 

to attain future targets, including its mechanisms for soliciting feedback. The FY 2018 and 

FY 2019 targets are set at 90 percent.

FinCEN evaluates the percentage of users finding that financial intelligence collected by 

FinCEN pursuant to its regulations provides valuable information to safeguard the financial 

system, combat money laundering, and counter terrorist financing. This measure supports 

Treasury Strategic Objective 3.2: AML/CFT Framework — identify and reduce vulnerabilities 

in the U.S. and international financial system to prevent abuse by illicit actors. In FY 2017, 86 

percent of users found the financial intelligence collected valuable, thereby surpassing the 

FY 2017 target of 85 percent. FinCEN will continue to emphasize improvements in data quality 

and filing information, as well as continued training efforts to improve understanding and 

utilization of the FinCEN Query tool for the bureau’s unique cases and situations. In FY 2018 

and FY 2019, the target is set at 86 percent.

FinCEN monitors the percentage of users satisfied with FinCEN information sharing systems. 

This measure supports the Treasury Strategic Objective 3.2: AML/CFT Framework — identify 

and reduce vulnerabilities in the U.S. and international financial system to prevent abuse by 

illicit actors. In FY 2017, FinCEN exceeded its target of 84 percent with 87 percent of the users 

satisfied with information sharing systems. FinCEN attributes this performance to the 

usefulness of the data it provides; users’ increased familiarity with systems which are in a 

steady operational state; its knowledgeable and courteous user support who continue to improve 

same day, help line closure rates; and its high system availability rate. FinCEN will continue to 

work with its customers to identify and prioritize enhancement requests as part of its Data 

Management activities; monitor the help line request volume and closure rates to address any 

issues or request surges; and continue to support infrastructure activities that improve overall 

system performance and availability. As part of the recent forms renewal process, FinCEN is 
FinCEN - 12

making minor form changes as well as implementing XML standards. These changes may 

initially cause challenges that could impact performance measures during transition, in FY 2018 

and FY 2019 the targets for FinCEN systems remain at 84 percent. 

FinCEN determines the percentage of AML/CFT supervisors who indicate that FinCEN’s 

enforcement actions have resulted in increased compliance by covered financial institutions. 

This measure supports Treasury Strategic Objective 3.2: AML/CFT Framework — identify and 

reduce vulnerabilities in the U.S. and international financial system to prevent abuse by illicit 

actors. In FY 2016, 94 percent of customers indicated that enforcement actions have resulted in 

increased compliance by the financial institutions they examine. FinCEN based its FY 2017 

target (also 94 percent) on the FY 2016 results, a significant spike from the FY 2014 and 

FY 2015 results of 81 and 88 percent, respectively. The FY 2017 results of 82 percent fell short 

of this target and this target was based on the FY 2016 performance result of one survey 

question. FinCEN attributes this spike to, among other things, its customers’ enthusiastic 

reaction to FinCEN’s increased involvement in the enforcement arena starting in approximately 

2013, particularly in the area of casinos and virtual currency. Starting in FY 2018, FinCEN will 

discontinue this performance measure and replace it with a more comprehensive compliance 

and enforcement measure that tracks five questions instead of one. The new measure captures 

more of the effects of FinCEN’s compliance and enforcement measures by including more 

questions. In addition, the new measure represents more regulators that may have not answered 

the single enforcement action question. The new measure is the percent of financial regulators 

who find FinCEN’s enforcement and compliance efforts effective. In FY 2017 the baseline 

performance of the new measure was 91 percent finding enforcement and compliance efforts 

effective. The FY 2018 and FY 2019 targets will be set at 90 percent.

C – Changes in Performance Measures 

With the publication of the Department of the Treasury’s Strategic Plan for Fiscal Years 2018 -

2022, FinCEN will work this year to baseline its performance against the new strategic 

objectives. This could result in additional changes to performance measures in the FY 2020 

budget.
FinCEN - 13

Performance Measure or 

Indicator

Change and Justification

1. Percentage of AML/CFT 

supervisors who indicate that 

FinCEN’s enforcement actions 

have resulted in increased 

compliance by covered financial 

institutions (discontinue)

FinCEN will discontinue this metric and replace it with 

a more comprehensive compliance and enforcement 

measure that tracks five questions instead of one. The 

new measure captures more of the effects of FinCEN’s 

compliance and enforcement measures by including 

more questions. The discontinued measure will be 

replaced by the Percent of financial regulators who find 

FinCEN’s enforcement and compliance efforts 

effective.

2. Percent of financial regulators 

who find FinCEN’s enforcement 

and compliance efforts effective

(new measure)

The new measure captures more of the effects of 

FinCEN’s compliance and enforcement measures by 

including more questions. The new measure will still 

include the impact of the prior enforcement action 

question while also incorporating questions that gauge 

improved cooperation on actions taken against financial 

institutions, consistency in the application of the BSA, 

and compliance observed.

Section III – Additional Information

A – Summary of Capital Investments

As the administrator of the BSA, FinCEN receives valuable information reported and collected 

under BSA requirements, which totaled approximately $19.3 million filings in FY 2017. To 

successfully fulfill its mission, FinCEN relies on secure, advanced information technology (IT)

to manage the collection, processing, storage, and dissemination of BSA information that 

contributes to the soundness and confidence in America’s financial system.

FinCEN’s IT strategy takes into account the growing need for financial institutions to meet 

obligations as efficiently as possible, while ensuring that FinCEN and law enforcement agencies 

receive accurate, timely, and reliable BSA information to track money trails, identify money 

laundering, and unravel terrorist financing networks. FinCEN’s IT strategy focuses on the 

critical need to improve the quality and accessibility of its data and increase responsiveness to 

stakeholders by maintaining and building upon flexible and innovative technical solutions. The 

entire life cycle cost of the BSA IT Modernization investment, which includes the year the 

investment started (2010) through BY+4 (2023), is $376.98 million (including FTE) and the 

FY 2019 cost is $26.76 million (including FTE).

A summary of capital investment resources, including major IT and non-technology 

investments, can be viewed/downloaded at: http://www.treasury.gov/about/budgetperformance/pages/summary-of-capital-investments.aspx. 

This website also contains a digital copy of this document.

Department of the Treasury

Alcohol and Tobacco Tax and 

Trade Bureau

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
TTB - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table ............................................................................................................4

1.2 – Budget Adjustments Table ..............................................................................................................5

C – Budget Increases and Decreases Description....................................................................... 5

1.3 – Operating Levels Table ...................................................................................................................7

D – Appropriations Language and Explanation of Changes ...................................................... 8

E – Legislative Proposals............................................................................................................ 8

Section II – Annual Performance Plan and Report................................................................... 9

A – Strategic Alignment ............................................................................................................. 9

B – Budget and Performance by Budget Activity .................................................................... 10

2.1.1 Collect the Revenue Resources and Measures................................................................. 10

Collect the Revenue Budget and Performance ......................................................................... 10

2.1.2 Protect the Public Resources and Measures..................................................................... 14

Protect the Public Budget and Performance ............................................................................. 14

C – Changes in Performance Measures.................................................................................... 18

Section III – Additional Information ........................................................................................ 19

A – Summary of Capital Investments....................................................................................... 19
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Section I – Budget Request

A – Mission Statement

To collect the taxes on alcohol, tobacco, firearms, and ammunition; protect the consumer by 

ensuring the integrity of alcohol products; and prevent unfair and unlawful market activity for 

alcohol and tobacco products.

B – Summary of the Request 

Supporting the nation’s economic vitality is at the core of the work performed by the Alcohol 

and Tobacco Tax and Trade Bureau (TTB). The bureau’s role in permitting, regulating, and 

taxing the alcohol, tobacco, and firearms industries facilitates a compliant and fair marketplace

for those engaged in the manufacture and trade of these commodities, and ensures that the 

Federal Government has the resources needed to fund national priorities. TTB administers its 

mission according to two core strategic goals—“Collect the Revenue” and “Protect the Public”—

both of which serve Treasury’s Strategic Goal 1 (Boost U.S. Economic Growth), and conducts 

its operations in support of Treasury’s Strategic Goal 5 (Achieve Operational Excellence). 

TTB is the third largest tax collection agency in the U.S. Government, after the Internal Revenue 

Service and U.S. Customs and Border Protection, collecting nearly $22 billion in excise tax

revenues annually. As the most efficient means of tax administration, facilitating voluntary 

compliance will remain a priority for TTB in FY 2019, and will help TTB absorb staffing and 

contract reductions while sustaining core tax operations. To this end, TTB will enhance its 

guidance related to federal alcohol, tobacco, firearms, and ammunition laws and regulations, and 

explore opportunities to streamline regulations and requirements to reduce compliance burden. 

These strategies are critical for TTB to mitigate potential performance impacts as TTB redirects 

its resources to implement the Craft Beverage Modernization and Tax Reform provisions of P.L. 

115-97. Further, in FY 2019, to ensure the protection of sensitive taxpayer information, TTB 

will make critical investments in IT security to ensure that TTB remains at the forefront of 

cybersecurity.

Alcohol and tobacco diversion remain long-term tax enforcement challenges given the high 

profits to be gained from illegal activity, the relative ease of diversion, and the substantial 

revenue loss that it represents. Failure to address illicit trade not only deprives governments of 

revenue, but also gives non-compliant actors an unfair competitive advantage over their lawful 

counterparts. To improve tax enforcement outcomes, and promote a more efficient Federal 

Government, the Administration is proposing the consolidation of federal alcohol and tobacco 

tax enforcement authorities within the Department of the Treasury, including transferring 

jurisdiction for the Contraband Cigarette Trafficking Act (CCTA) from the Department of 

Justice’s (DOJ) Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to TTB. The 

FY 2019 request supports an initial investment of $5 million in start-up costs for TTB to initiate 

the transfer, and begin to implement this enforcement program. Upon transfer of CCTA 

authority, and once fully resourced, TTB expects that its current enforcement model, which uses 

a data-driven approach and relies on teams of agents, auditors, and investigators, as well as state 

and local law enforcement partners, will provide positive returns in terms of increased revenues 

and reduced criminal activity.
TTB - 4

As demand for TTB services has grown in line with the expanding alcohol industries, TTB has 

responded through updated policies to reduce burden, improved systems, and streamlined 

processes to ensure the timely turnaround of applications for new and existing wineries, 

breweries, and distilleries. Delays can cause financial hardships for these businesses and create a 

barrier to compliant commerce. In FY 2019, TTB will focus on IT modernization investments to 

reduce filing burdens and accelerate approval times for permit applications. Further, at the 

FY 2019 funding level, TTB will review its service standards in line with anticipated staffing 

levels and ensure the new standards are clearly communicated to industry to manage 

expectations and allow appropriate operational planning. TTB will further adjust its strategy for 

systems modernization to align with resource levels, continuing to focus on clear and consistent 

guidance to industry to facilitate the submission of compliant applications. 

1.1 – Appropriations Detail Table

Dollars in Thousands

Alcohol and Tobacco Tax and Trade 

Bureau

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Enacted 1/ Annualized CR Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Collect the Revenue 219 $53,560 242 $53,127 250 $57,741 8 $4,614 3.31% 8.68%

Protect the Public 259 $57,879 265 $57,555 242 $56,686 (23) ($869) -8.68% -1.51%

Subtotal New Appropriated Resources 478 $111,439 507 $110,682 492 $114,427 (15) $3,745 -2.96% 3.38%

Other Resources:

Offsetting Collections – Reimbursables 2/ 10 $5,854 10 $6,912 10 $6,912 0 $0 0.00% 0.00%

Transfers 3/ 0 $197 0 $0 0 $0 0 $0 0.00% 0.00%

Subtotal Other Resources 10 $6,051 10 $6,912 10 $6,912 0 $0 0.00% 0.00%

Total Budgetary Resources 488 $117,490 517 $117,594 502 $121,339 (15) $3,745 -2.90% 3.18%

1/ FY 2017 FTE and Other Resources are Actuals. This column reflects levels appropriated in H.R. 255, the Consolidated 

Appropriations Act of 2017. For further details on the execution of these resources see the 2019 Budget Appendix chapter for the 

Department of the Treasury.

2/ Includes reimbursements from TEOAF Mandatory Fund and CDFI, and offsetting collections from Puerto Rico Cover-Over Program.

3/ Transfer from the TEOAF Strategic Support Fund.
TTB - 5

1.2 – Budget Adjustments Table

Dollars in Thousands

Alcohol and Tobacco Tax and Trade Bureau FTE Amount

FY 2018 Annualized CR 507 $110,682

Changes to Base:

Maintaining Current Levels (MCLs) 0 $1,027

Pay Annualization 0 $295

Non-Pay 0 $732

Efficiency Savings 0 ($450)

Reduce Infrastructure Footprint and Support 

Services

0 ($450)

Subtotal Changes to Base 0 $577

Total FY 2019 Base 507 $111,259

Program Changes:

Program Decreases (36) ($7,632)

Program Staff Attrition (14) ($1,960)

Trade Practice Enforcement (22) ($5,000)

Program Contract Reductions 0 ($672)

Program Increases 21 $10,800

 Consolidation of Federal Alcohol &Tobacco Tax 

Jurisdiction

14 $5,000

IT Modernization/Permits System 5 $4,600

IT Modernization/Cybersecurity 2 $1,200

Total FY 2019 Request 492 $114,427

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$1,027,000 / +0 FTE

Pay Annualization +$295,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay raise.

Non-Pay +$732,000 / +0 FTE 

Funds are requested for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Efficiency Savings ...........................................................................................-$450,000 / -0 FTE

Reduce Infrastructure Footprint and Support Services -$450,000 / -0 FTE

TTB has implemented an aggressive telework program that has enabled the bureau to close half 

of its field offices, with the remaining field offices being vital to TTB’s mission. TTB has also 

reconfigured and reduced the amount of office space needed to operate its headquarters in 

Washington, D.C., and the National Revenue Center in Cincinnati. In an ongoing effort to 

improve space utilization, TTB has identified additional opportunities to reduce leased space, 

resulting in additional savings of $250,000. Also, TTB will reduce its operating costs by 

$200,000 through savings in administrative overhead and decreased program support operations 

in line with anticipated program staff attrition.
TTB - 6

Program Decreases ....................................................................................-$7,632,000 / -36 FTE

Program Staff Attrition -$1,960,000 / -14 FTE

TTB will implement a hiring freeze to achieve a workforce reduction of 14 FTE. This reduction, 

which equates to 3 percent of TTB’s full-time positions, will be taken across multiple program 

areas.

Trade Practice Enforcement -$5,000,000 / -22 FTE

TTB will reduce its Trade Practice Enforcement program to the FY 2016 funding level. TTB 

enforcement addresses unlawful trade practices in the marketplace and ensures a level playing 

field for U.S. alcohol manufacturers and distributors. With two-year funding provided through 

FY 2018, TTB added staffing to increase its capacity for trade practice investigations from 

approximately 1 each year to up to 15 active cases annually. At the FY 2019 funding level, TTB 

will need to bring closure to its active trade practice investigations and reevaluate the program.

Program Contract Reductions -$672,000 / -0 FTE

TTB will reduce its contract services by reducing or re-scoping contracts for both its commercial 

vendors and government suppliers.

Program Increases ................................................................................... $10,800,000 / +21 FTE

Consolidation of Federal Alcohol & Tobacco Tax Jurisdiction +5,000,000 / +14 FTE

Start-up funding is requested to support the Administration’s proposal to consolidate federal 

alcohol and tobacco tax jurisdiction within the Department of the Treasury and TTB. This initial 

investment will enable TTB to begin hiring the necessary additional enforcement personnel, 

including agents, auditors, and investigators, to conduct the complex, multi-state investigations 

associated with contraband cigarette smuggling. The 14 FTE will allow TTB to hire 28 positions 

including auditors, investigators, and other program staff for approximately the last six months

of the fiscal year. Agents will be hired under an expansion of the existing interagency agreement 

with the IRS, with the FY 2019 start-up funding covering the services of 12 agents for the second 

half of the year. This initial investment would also enable TTB to initiate any needed 

rulemaking and guidance as well as support initial research into system requirements and data 

analytics to improve enforcement targeting. During this transition period, and at the proposed 

staffing level, TTB will also expand its outreach to state law enforcement partners and work 

closely with DOJ on the transfer and continuation of existing cases.

IT Modernization/Permits System +4,600,000 / +5 FTE

Funding is requested to enable TTB to incrementally build and deploy a custom-developed 

online permitting system. A modernized system is a key component to improving program 

performance because it would allow TTB to optimize its online permit applications and 

processes to support the timely review and approval of applications, with backlogs for wineries, 

breweries, and distilleries at around 100 days at the end of FY 2017, well over the 75-day service 

standard. A custom system would also reduce burden on industry by enabling the eventual 

integration of all online interactions that industry has with TTB: permit applications, tax returns, 

operational reports, label applications, and formula applications. 
TTB - 7

IT Modernization/Cybersecurity +1,200,000 / +2 FTE

Funding is requested to cover the increased operations and maintenance costs of cybersecurity 

tools and for additional staff to remediate IT system vulnerabilities. To meet security 

requirements, TTB currently maintains a robust cybersecurity architecture that requires increased 

operations and maintenance costs. In addition, TTB must continually ensure that its IT systems 

are modern, updated, and patched in a timely manner. This funding will ensure all TTB systems 

are modernized to detect and protect against current threats and ensure that TTB remains a 

Treasury leader operating at the forefront of cybersecurity.

1.3 – Operating Levels Table

Dollars in Thousands

TTB FY 2017 FY 2018 FY 2019

Object Classification Enacted 1/ Annualized CR Request

11.1 - Full-time permanent 51,531 51,180 48,812

11.5 - Other personnel compensation 619 615 651

11.9 - Total personnel compensation 52,150 51,796 49,462

12.0 - Personnel benefits 15,671 15,565 14,926

13.0 - Benefits for former personnel 0 0 0

Total Personnel and Compensation Benefits $67,821 $67,360 $64,388

21.0 - Travel and transportation of persons 2,561 2,544 2,191

22.0 - Transportation of things 50 50 50

23.1 - Rental payments to GSA 4,400 4,370 4,170

23.3 - Communication, utilities, and misc charges 1,594 1,583 1,629

24.0 - Printing and reproduction 267 265 266

25.2 - Other services from non-Federal sources 24,395 24,229 28,803

25.3 - Other goods and services from Federal sources 7,715 7,663 9,451

26.0 - Supplies and materials 499 496 502

31.0 - Equipment 2,137 2,122 2,977

Total Non-Personnel $43,618 $43,322 $50,039

New Budgetary Resources $111,439 $110,682 $114,427

FTE 478 507 492

1/ FY17 Appropriated Resources are enacted and FTE are Actual. This column reflects levels appropriated in H.R. 255, the 

Consolidated Appropriations Act of 2017. For further details on the execution of these resources see the 2019 Budget Appendix 

chapter for the Department of the Treasury.
TTB - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of carrying out section 1111 of the 

Homeland Security Act of 2002, including hire of passenger motor 

vehicles, $114,427,000, of which $5,000,000 shall remain available 

until September 30, 2020; of which not to exceed $6,000 shall be 

available for official reception and representation expenses; and of 

which not to exceed $50,000 shall be available for cooperative 

research and development programs for laboratory services and 

provision of laboratory assistance to State and local agencies with 

or without reimbursement.

Note. – A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing 

Appropriations Act, 2018 (Division D of P.L. 115-56, as amended). 

The amounts included for 2018 reflect the annualized level provided 

by the continuing resolution.

E – Legislative Proposals

Government Reform Initiative - Consolidation of Federal Alcohol & Tobacco Tax 

Jurisdiction

The Administration proposes to transfer primary jurisdiction over federal tobacco and alcohol 

anti-smuggling laws from the Department of Justice and the Bureau of Alcohol, Tobacco, 

Firearms and Explosives to the Department of the Treasury and TTB. Under the proposal, TTB 

would be responsible for the administration and enforcement of the Jenkins Act of 1949 (as 

amended by the Prevent All Cigarette Trafficking Act of 2009), 15 U.S.C. Chapter 10A, the 

Contraband Cigarette Trafficking Act of 1978, 18 U.S.C. Chapter 114, and the criminal statutes 

involving Liquor Trafficking, 18 U.S.C. Chapter 59. Specific statutory language will be 

developed in consultation with the Secretary of the Treasury and with the Attorney General both 

to effect the transfer and to facilitate federal enforcement against tobacco smuggling. 
TTB - 9

Section II – Annual Performance Plan and Report

A – Strategic Alignment

TTB is responsible for administering and enforcing the sections of the Internal Revenue Code of 

1986 associated with the collection of excise taxes on alcohol, tobacco, firearms, and 

ammunition, and the Federal Alcohol Administration Act, which provides for the regulation of 

the alcohol beverage industry for the protection of U.S. consumers. In essence, TTB administers 

its jurisdiction according to two strategic goals—“Collect the Revenue” and “Protect the 

Public”—both of which serve to support economic growth and stability. TTB’s strategic goal to 

collect the revenue ensures that the Federal Government has the resources needed to fund 

national priorities and supports the Treasury’s Strategic Goal 1 (Boost U.S. Economic Growth)

and Strategic Objective 1.1 (Tax Law Implementation) to administer tax laws to better enable all 

taxpayers to meet their obligations, while protecting the integrity of the tax system. TTB’s 

strategic goal to protect the public ensures that lawful U.S. alcohol businesses are competitive 

and thriving in the global marketplace and supports the Treasury’s Strategic Goal 1 (Boost U.S. 

Economic Growth) and Strategic Objective 1.3 (Trusted Currency and Services) to deliver

trusted currency and services that enable citizens and businesses to participate in the economy

and Strategic Objective 1.4 (Free and Fair Trade) to advance a free and fair trade environment 

for U.S. businesses). Various strategies and activities under TTB’s strategic objectives

contribute to the Treasury’s Strategic Goal 5 (Achieve Operational Excellence) through Strategic 

Objectives 5.1 (Workforce Management), 5.2 (Treasury Infrastructure), and 5.3 (Customer 

Value).

The Administration is proposing the consolidation of federal alcohol and tobacco tax jurisdiction 

within the Department of the Treasury to improve mission alignment and focus and, in turn, 

create tax enforcement efficiencies. This proposal calls for the transfer of enforcement authority 

for the CCTA and the Prevent All Cigarette Trafficking (PACT) Act from DOJ to Treasury. 

These federal statutes were intended, among other things, to stop criminal organizations from 

profiting by smuggling cigarettes from low-tax states to high-tax states, and protect state and 

local governments from revenue losses from interstate cigarette smuggling. ATF, which 

currently has primary jurisdiction for CCTA and PACT Act enforcement, has estimated that the 

sale of contraband cigarettes costs federal, state, and local governments close to $5 billion a year 

in revenue. The FY 2019 funding request represents the initial investment required to begin the 

transfer of these authorities, including preliminary hiring and contract actions to support 

investigations, as well as required rulemaking, IT, and data analytics efforts to support the 

program and generate leads for future investigations, as the program ramps up. The full program 

costs will be higher and will be addressed in future budgets. When fully implemented, TTB 

anticipates that the consolidation of CCTA and PACT Act enforcement with TTB’s existing 

tobacco enforcement authorities will result in increased federal and state tobacco excise tax 

revenues.
TTB - 10

B – Budget and Performance by Budget Activity

2.1.1 Collect the Revenue Resources and Measures

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

Actual Actual Actual Actual Actual

Annualized 

CR

Request

Appropriated Resources $48,927 $51,721 $50,976 $53,385 $53,375 $53,127 $57,741

Reimbursables $3,277 $3,506 $3,681 $3,143 $3,217 $3,798 $3,798

Transfers In/Out 1/ $0 $468 $0 $0 $197 $0 $0

Budget Activity Total $52,204 $55,695 $54,657 $56,528 $56,789 $56,925 $61,539

FTE 2/ 235 224 223 234 223 247 255

1/ TEOAF Strategic Support Fund

2/ Includes 5 FTE from Puerto Rico cover-over reimbursables

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Amount of Revenue Collected 

Per Program Dollar

457 457 437 414 406 400 350 350

Percent of Voluntary 

Compliance from Large 

Taxpayers in Filing Tax 

Payments Timely (In Terms of 

Revenue)

92 90 88 87 85 90 90 90

Collect the Revenue Budget and Performance

($57,741,000 from direct appropriations, $3,798,000 from reimbursable resources):

This budget activity includes all tax processing, verification, enforcement, and outreach efforts 

related to administering the federal tax code for alcohol, tobacco, firearms, and ammunition

products, and supports Treasury’s Strategic Objective 1.1 (Tax Law Implementation). TTB 

collects approximately $22 billion in federal tax revenue annually from more than 14,000

businesses. TTB’s tax base includes distilleries, breweries, and wineries, which have boomed in 

recent years, as well as manufacturers and importers of tobacco and firearms. TTB extends the 

reach of its enforcement resources through advanced analytics and risk-based audits and 

investigations. To ensure a level playing field for all those engaged in the trade of these strictly 

regulated commodities, TTB also takes appropriate enforcement action to detect and address 

diversion activity to ensure all products sold in the marketplace are properly taxpaid.

Other Resources (Offsetting Collections/Reimbursables).................................... $3,798,000

Other resources that fund this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $400 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported to

the United States (cover-over payments); reimbursement from the Community Development 

Financial Institutions Fund (CDFI) for IT services provided by TTB; and funding from the 

Department of the Treasury’s Executive Office for Asset Forfeiture (TEOAF) mandatory 

account to cover investigative expenses, data systems, and training.
TTB - 11

Description of Performance – Collect the Revenue:

In FY 2017, TTB met one of its two annual targets for the performance measures under the 

Collect the Revenue budget activity. Taken together, TTB’s measures of the Amount of 

Revenue Collected per Program Dollar and the Percent of Voluntary Compliance from Large 

Taxpayers in Filing Payments Timely demonstrate the effectiveness and efficiency with which 

TTB operates its revenue collection function. TTB’s strategies for achieving results for both 

measures include applying technology to streamline internal and external processes and 

leveraging data sources to direct our outreach and enforcement efforts. At the FY 2019 funding 

level, TTB will review these strategies and their timelines in an effort to prevent diminished 

effectiveness in tax administration and to help ensure resources are deployed to maximize the

deterrent effect. 

Improve Efficiency of Tax Collection 

The Amount of Revenue Collected per Program Dollar measure uses annual collections figures 

and the actual expenditures and obligations for collection activities to quantify the efficiency of 

the TTB tax collection program. In FY 2017, TTB achieved a return on investment of $406 for 

every program dollar spent on collection activities, which exceeded its annual performance target 

of $400. The year-to-year decline in performance represents continued declines in tobacco 

revenue that, after peaking in FY 2010 following the tax rate increases enacted in 2009, have

steadily declined in line with shifts in consumption patterns, product manufacturing, and trade.

In setting its FY 2019 performance target, TTB examined historical collections trends across 

each of its regulated commodities, other predictors that influence consumer behaviors, and recent 

Craft Beverage Modernization and Tax Reform provisions enacted by the Tax Cuts and Jobs Act

of 2017. TTB used revenue impact estimates from the Joint Committee on Taxation to adjust its 

projected alcohol excise collections, which generally indicate reduced collections over the 

effective period of these provisions due, in part, to reduced tax rates for producers across all 

spirits, wine, and malt beverages based on production. Further, as illustrated by the below table, 

the 2009 changes to the federal tax rates on certain tobacco products have resulted in increased 

tobacco tax collections by TTB, although the amount of the increase has generally decreased 

since FY 2010, the first full fiscal year following the tax rate increases. In accounting for these 

factors, TTB established a targeted performance level of 350:1 for fiscal years 2018 – 2019. 
TTB - 12

Excise Tax and Other Collections by Fiscal Year

Dollars in Thousands

FAET – Firearms and Ammunition Excise Tax; SOT – Special Occupational Tax; FST – Floor Stocks Tax

In FY 2019, to meet its performance target of $350, TTB will continue to improve efficiencies 

and results in its tax enforcement program through systems and process improvements related to

tax verification. TTB will evaluate and develop options to increase automation in the detection, 

notification, assessment, and collection of excise taxes due to preserve staff time for substantive 

tax analysis. Additionally, TTB will continue to use data analytics and other intelligence to 

efficiently deploy its limited enforcement resources. A primary focus for TTB tax enforcement 

continues to be diversion schemes related to imported and exported alcohol and tobacco products

given the high profit potential and relative ease. Investigations to date have identified significant 

tax liabilities and remain an enforcement priority under the Craft Beverage Modernization and

Tax Reform provisions, effective through calendar year 2019, which include reduced rates for 

alcohol importers as well as domestic producers. 

TTB will review its plans to modernize its tax systems to increase automation and improve tax 

verification. TTB will also review planned enhancements to data analytics tools that support 

identification of high-risk activities for audit and the investigation and criminal prosecution of 

such identified activities. Further, TTB will review its enforcement plans to address potential 

vulnerabilities and new tax evasion schemes arising from both the new tax legislation and TTB’s 

expanded enforcement responsibilities in the interstate smuggling of cigarettes. The 

administration has proposed legislative changes to consolidate federal alcohol and tobacco tax 

authorities within Treasury, which will integrate ATF authorities into TTB’s federal excise tax 

enforcement program.

Increase Voluntary Compliance from Taxpayers

Fostering voluntary compliance among taxpayers is a primary tax administration strategy for 

TTB. The Percent of Voluntary Compliance from Large Taxpayers in Filing Tax Payments 

Timely is a key performance metric that shows the rate of compliance by large taxpayers (i.e., 

those that pay more than $50,000 in annual taxes) in voluntarily filing their tax payments on or 

before the scheduled due date. In FY 2017, TTB achieved a compliance rate of 85 percent from 

its large taxpayers, which fell below the performance target of 90 percent. The declining 

compliance rate in recent years is due, in part, to an increase in the universe of industry members 

paying more than $50,000 in annual taxes due to continued industry growth and expansion, 

Fiscal

Year Alcohol Tobacco FAET SOT FST Other Total

2008 $ 7,420,576 $ 6,851,705 $312,622 $ 448 $ - $ 634 $ 14,585,985

2009 7,424,292 11,548,504 452,693 272 1,192,375 970 20,619,106

2010 7,476,789 15,913,479 360,813 300 8,558 180 23,760,119

2011 7,594,330 15,515,073 344,262 268 5,220 2,257 23,461,410

2012 7,856,391 15,002,616 514,622 249 5,942 61 23,379,881

2013 7,851,953 14,321,017 762,836 280 1,521 38 22,937,645

2014 7,924,951 13,552,711 768,927 332 465 2 22,247,388

2015 7,997,467 13,620,497 638,518 288 2,444 7 22,259,221

2016 8,075,476 13,274,371 749,789 258 245 505 22,100,644

2017 8,103,714 12,966,317 761,630 227 69 521 21,832,478

Average $ 7,772,594 $ 13,256,629 $566,671 $ 292 $ 121,684 $ 518 $ 21,718,388
TTB - 13

which increasingly includes more recent permittees who may be less familiar with TTB’s 

statutory and regulatory requirements. Although TTB analysis indicates that this trend does not

represent a significant revenue risk, non-compliance undermines the level playing field, which is 

critical for small producers who comprise the majority of TTB taxpayers. 

In FY 2019, TTB will strive to meet its established performance target of a 90 percent voluntary 

compliance rate for its large taxpayers through complementary strategies that focus on promoting 

electronic filing options to enable taxpayers to file complete, accurate, and timely tax returns and 

payments; improving online guidance and industry outreach strategies, particularly for those 

industry members with expanding operations; and maintaining an enforcement presence to 

encourage voluntary compliance. Moving forward on all three fronts is required to ensure that 

TTB strikes the appropriate balance between supporting businesses in establishing compliant 

operations while ensuring adequate coverage of the high-risk activity that undermines lawful 

business activity. 

TTB will review its enforcement plans and workforce capacity to continue its mission’s 

execution. Enactment of the legislative proposal will expand TTB’s responsibilities to include 

enforcement of interstate cigarette smuggling laws. TTB will also implement significant 

changes to the tax rates and credits applicable to the alcohol industry under P.L. 115-97. TTB 

will also review its current criminal investigations given the proposed transfer of CCTA, 

particularly as the program ramps up, and work closely with DOJ to effectively transition active 

cases. Since TTB commenced its criminal enforcement program in FY 2011, these 

investigations have resulted in more than $600 million in tax liabilities (a 4:1 return on 

investment) and numerous criminal convictions, which are an essential component of tax 

enforcement. Consolidating federal alcohol and tobacco tax jurisdiction within Treasury, once 

enacted and fully funded, will result in a more effective and efficient enforcement approach for 

detecting and addressing tax evasion schemes that deny federal and state revenues and undercut 

legitimate businesses.
TTB - 14

2.1.2 Protect the Public Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

Actual Actual Actual Actual Actual

Annualized 

CR

Request

Appropriated Resources $45,727 $47,279 $47,451 $52,709 $53,527 $57,555 $56,686

Reimbursables $2,670 $3,236 $2,451 $2,577 $2,637 $3,114 $3,114

Transfers In/Out 1/ $0 $432 $0 $0 $0 $0 $0

Budget Activity Total $48,397 $50,947 $49,902 $55,286 $56,164 $60,669 $59,800

FTE 2/ 241 246 243 246 265 270 247

1/ TEOAF Strategic Support Fund

2/ Includes 5 FTE from Puerto Rico cover-over reimbursables

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percent of Electronically Filed 

Permit Applications 73 80 81 81 85 82 87 90

Percentage of Permit 

Applications Processed within 

Service Standards

50 58 47 32 48 85 85 85

Initial Error Rate for Permit 

Applications B 72 67 57 60 25 25 25

Customer Satisfaction Rate with 

TTB Permitting Process N/A B 76 71 80 80 80 80

Percent of Electronically Filed 

Label and Formula Applications 90 93 94 97 98 95 95 95

Percentage of Alcohol Beverage 

Label and Formula Applications 

Processed within Service 

Standards 1/

50 71 80 80 62 85 85 85

Initial Error Rate for Label and 

Formula Applications

B 39 42 44 43 25 25 25

Key: B - Baseline

1/ TTB established new service standards of 10 days for both labels and formulas in FY 2017 following an infusion of dedicated 

resources in the FY16/17 enacted budgets. The standards were 30-days for labels and 45-days for formulas in fiscal years 2013 -

2016. Though annual results are below target, TTB met its target in September 2017, as projected. In FY18 and FY19, TTB 

expects to revise its service standard from 10 days to 15 days for both labels and formulas based on anticipated staff erosion and 

spikes in submissions driven by imported products. All data has been revised to reflect a methodology update to exclude label 

applications deemed abandoned by the applicant (i.e., no action after 30 days).

Protect the Public Budget and Performance

($56,686,000 from direct appropriations, and $3,114,000 from reimbursable resources): 

This budget activity funds the programs that ensure the integrity of the products and industry 

members in the marketplace; promote compliance with federal laws and regulations by the more 

than 92,700 businesses that TTB regulates; facilitate fair and lawful domestic and international 

trade in the alcohol and tobacco commodities; and provide full and accurate alcohol beverage 

product information to the public as a means to prevent consumer deception. These activities 

support Treasury’s Strategic Goal 1 (Boost U.S. Economic Growth) and Strategic Objective 1.3 

(Trusted Currency and Services) to deliver trusted currency and services that enable citizens and 
TTB - 15

businesses to participate in the economy and Strategic Objective 1.4 (Free and Fair Trade) to 

advance a free and fair trade environment for U.S. businesses. 

Other Resources (Offsetting Collections/Reimbursables).................................... $3,114,000

Other resources that support this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $400 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported 

into the United States (cover-over payments); reimbursement by the Community Development 

Financial Institutions Fund (CDFI) for TTB’s IT services; and funding from the Department of 

the Treasury’s Executive Office for Asset Forfeiture (TEOAF) mandatory account to cover 

investigative expenses, data systems, and training.

Description of Performance – Protect the Public:

In FY 2017, TTB met three of its seven annual targets for the performance measures under its 

Protect the Public budget activity. TTB reports on its success in meeting Treasury’s objective 

1.3 Trusted Currency and Services to deliver trusted currency and services that enables citizens 

and businesses to participate in the economy and TTB’s goal to protect U.S. businesses and 

consumers through five principal performance measures. These measures help TTB monitor the 

degree to which it is meeting the service standards it establishes for permit, label, and formula 

applications; the impact that electronic filing initiatives are having on improved service delivery; 

and the level of satisfaction that prospective industry members have with TTB’s permitting 

process. In FY 2019, TTB is introducing two new measures that track the error rate on permit 

applications and label and formula applications, as applications submitted with errors 

significantly add to TTB’s overall workload and present a critical risk to TTB achieving its 

service standards. TTB’s strategies to achieve its performance targets for these measures include 

a combination of streamlining internal processes, implementing enhancements to online filing 

systems, modernizing application requirements, and providing clearer guidance to industry 

members.

Improve Efficiency and Effectiveness of Permitting Process

TTB protects consumers by screening permit applicants to ensure only qualified persons engage 

in the alcohol, tobacco, firearms, and ammunition industries. For this purpose, in FY 2017, TTB 

processed approximately 8,000 original permit applications, performing investigations into highrisk applicants to meet TTB’s business integrity objective. TTB monitors its timeliness in 

approving permit applications through its measure of the Percentage of Permit Applications 

Processed within Service Standards. As businesses rely on accurate information related to TTB 

service delivery in their operational planning, this measure provides important data related to a 

key outcome for TTB and its stakeholders. 

In FY 2017, TTB met its 75-day service standard for 48 percent of original permit applications, a 

significant year-to-year improvement but still well below the 85 percent performance target. In 

recent years, the increased volume of submissions, particularly in the more complex application 

types related to producing alcohol beverage products, has caused approval times to increase. 

Approval times spiked to over 200 days in FY 2016 for alcohol producer applications, creating 

potential financial hardships for these applicants. In FY 2017, TTB realized the benefits of 

several crosscutting initiatives to update its permitting business process instituted over the last 
TTB - 16

two years. The initiatives included policy, workflow, and system changes that, by year-end, 

combined to result in a dramatic reduction in the backlog of applications and average approval 

times below 100 days. 

At the FY 2019 funding level, TTB expects to meet its 75-day standard for 85 percent of permit 

applications through a combination of industry education efforts and ongoing enhancements to 

Permits Online. Additionally, TTB intends to complete a comprehensive review of its 

qualification requirements, informed by public comment, to streamline TTB’s permit 

applications and further reduce burdens related to the filing process. This review, combined with 

the FY 2019 investment in TTB’s permitting system, will support TTB in reaching its current 

service standard as well as its long-term goal of reducing service times to 60 days or less across 

alcohol application types.

According to its measure of the Percent of Electronically Filed Permit Applications, which tracks 

the electronic filing rate for new business applications, TTB received approximately 85 percent 

of permit applications via Permits Online in FY 2017. This year-to-year increase is attributed to 

TTB.gov improvements to better direct applicants to the online filing system. TTB expects this 

trend to continue following the release of the redesigned Permits Online system, targeted for 

FY 2018, which will include improved guidance for first-time filers to reduce errors on 

applications that delay processing times as well as a simplified method for amending an existing 

permit that replaces the current paper-based process. These system changes, combined with 

effective outreach and training for industry, will support TTB in achieving its targeted electronic 

filing rate of 90 percent in FY 2019.

The Permits Online enhancements should also contribute to improved outcomes for TTB’s new 

measure of the Initial Error Rate on Permit Applications, which tracks how many applications 

are submitted either incomplete or with errors. This measure is critical to timely processing, as 

the error rate significantly influences total approval time, given the necessary back-and-forth 

with applicants to obtain additional documentation or accurate information. In FY 2017, the 

error rate trended negatively, with 60 percent of original permit applications submitted with 

errors. This rate is well above the target of 25 percent, and reflects the need for improved 

guidance and system validations to ensure applicants are able to submit correctly the first time. 

Following the FY 2018 system release, and planned TTB.gov enhancements, TTB expects to 

draw closer to its target by year-end. Broader changes to streamline permit application 

requirements, most of which will require rulemaking to fully implement, are underway and may 

be required before TTB can achieve its targeted performance level.

Increase Customer Satisfaction with TTB Service Delivery 

TTB also measures its performance in its permitting function by surveying the businesses that 

apply for a TTB permit. TTB monitors the Customer Satisfaction Rate with TTB’s Permitting 

Process by using an e-mail survey to assess how satisfied businesses are when applying for a

permit through Permits Online. Satisfaction rates in FY 2017 met the annual target of 80 

percent, driven in large part by improvements in the level of service received and timeliness of 

TTB’s response. TTB expects satisfaction rates to remain at or above target in FY 2019, based 

on planned initiatives to streamline the application and filing process, beginning with new 

features planned for release in Permits Online in FY 2018 that will improve the overall customer 
TTB - 17

experience with the system. TTB will also implement process changes to improve the level of 

service provided to customers seeking live assistance with the permit application process via 

TTB’s call center.

Improve Efficiency and Effectiveness of Alcohol Beverage Label Processing

TTB protects U.S. consumers by ensuring that the alcohol beverage products sold at retail outlets 

are properly labeled and comply with federal production standards. In FY 2017, TTB received 

approximately 170,000 Certificate of Label Approval (COLA) applications and 14,500 formula 

applications, which reflect levels at or above the prior year and indicate the ongoing expansion of 

the alcohol beverage industry. Given the importance of timely TTB approvals and the negative 

impact that delays have on U.S. businesses, TTB monitors its ability to provide timely and 

consistent service through its measure of the Percentage of Alcohol Beverage Label and Formula 

Applications Processed within Service Standards. TTB combines label and formula applications 

in this measure given the interdependent nature of these approvals. 

In FY 2016, under its service standards of 30 days for a label approval and 45 days for a formula 

approval, many businesses were waiting nearly three months on average from the time they filed 

for a formula approval to being able to bottle and distribute a new product. In FY 2017, with 

additional staffing resources hired using directed funding to accelerate these approvals, TTB 

established new service standards of 10 days for both label and formula applications. Following 

a period of onboarding and training, which affected performance in the first half of FY 2017, 

TTB significantly reduced approval times and, by September 2017, achieved the 10-day standard 

for 85 percent of labels and formulas. At the FY 2019 funding level, based on anticipated 

staffing levels and recent spikes in label and formula submissions driven by imported products, 

TTB expects to revise its service standard from 10 days to 15 days for 85 percent of applicants. 

In recent years, to help address processing delays, TTB has used its authority to implement riskbased policy changes to reduce the volume of label and formula applications without 

compromising TTB’s market protection role. These changes successfully reduced the volume of 

label and formula submissions in the short-term; however, in FY 2017, industry growth 

combined with market trends toward products that require an approved formula prior to 

production have resulted in increased submissions that have offset these reductions. At the same 

time, TTB has employed a complementary strategy to reduce total workload volume through 

initiatives to reduce label and formula application errors. Application errors are a key driver of 

processing times, as additional review is required for each resubmitted application. TTB has 

established a new measure of the Initial Error Rate of Label and Formula Applications to 

monitor error trends and evaluate the effect of system and guidance enhancements on first-time 

approvals. In FY 2017, the initial error rate was 43 percent, falling short of the targeted 

performance level of 25 percent, indicating that TTB will need to expand and improve on the 

system-based help and online guidance features that it implemented this year. 

In FY 2019, TTB will continue to make iterative enhancements to COLAs Online and Formulas 

Online, informed by user testing and feedback, which will include additional help features and 

system-based validations to reduce application errors. According to its measure of the Percent of 

Electronically Filed Label and Formula Applications, TTB receives 98 percent of applications 

via COLAs Online and Formulas, indicating that continued focus on system validations is 
TTB - 18

warranted and will support performance goals in increasing accurate applications and 

accelerating approval times. TTB expects that these ongoing improvements will help TTB 

continue to attract users to its online systems and maintain performance above its 95 percent

target in FY 2019.

Further, in FY 2019, TTB will also continue initiatives to improve industry guidance, including 

the labeling modernization project, which will update and streamline the labeling regulations to 

reflect current TTB policy and industry practices, and increasing the guidance on TTB.gov 

related to obtaining label and formula approval for alcohol beverage products.

C – Changes in Performance Measures

With the publication of Treasury’s Strategic Plan for FY 2018-2022, TTB will work this year to 

baseline its performance against the new strategic objectives. This could result in additional 

changes to performance measures in the FY 2020 budget.

Performance Measure or 

Indicator Change and Justification

1. Initial Error Rate for Permit 

Applications (New)

Initial error rate is defined as the total percentage of 

electronic permit applications received that required 

TTB to return to the applicant for corrections (missing or 

incomplete application fields) or additional information 

(missing or incomplete documentation to support the 

application). The data will come from Permits Online. 

This measure provides information on the volume and 

type of errors on applications and informs TTB 

initiatives to address them, a critical strategy given that a 

high volume of errors impedes timely review and 

approval as the total processing time includes all backand-forth with applicants.

2. Initial Error Rate for Label and 

Formula Applications (New)

Initial error rate is defined as the total percentage of 

electronic label and formula applications received that

required TTB to return to the applicant for corrections 

(missing or incomplete application fields) or revisions 

(noncompliance with federal labeling and/or production 

requirements). The data will come from COLAs Online 

and Formulas Online. This measure provides 

information on the volume and type of errors on 

applications and informs TTB initiatives to address 

them, a critical strategy given that a high volume of 

errors impedes timely review and approval as the total 

processing time includes all back-and-forth with 

applicants.
TTB - 19

Section III – Additional Information

A – Summary of Capital Investments

Information Technology

TTB’s Strategic Plan establishes the vision and objectives for the bureau in the business context. 

TTB’s Information Technology (IT) Strategic Plan is a five-year plan based on its business 

strategy, which includes the bureau’s mission, vision, goals, and objectives from an IT 

perspective. This plan charts the course the bureau will follow in the coming years to develop 

and implement IT solutions that are aimed at streamlining the collection of data, leveraging web 

technologies, and continuing to make the Internet the method of choice for the reporting and 

exchanging of information between businesses and TTB. By aligning business and technical 

strategy, TTB is able to leverage technology to enable the bureau to meet its objectives in the 

most efficient and cost-effective manner while identifying ways to minimize system redundancy. 

TTB has no major IT investments based on the OMB and the Department of Treasury criteria. 

Several non-major investments, however, directly support the mission, strategy, and day-to-day 

operations of the bureau. These include:

TTB Tax System: This investment consists of several component applications that ensure fair 

and proper collection of revenue from the industry members for alcohol, tobacco, firearms, and 

ammunition excise taxes and to ensure compliance with the excise tax regulations.

TTB Regulatory System: This investment includes applications that streamline the beverage 

and nonbeverage alcohol formula approval process and COLA issuance for tax and regulatory 

compliance.

TTB General Support Services: This investment provides TTB users with the infrastructure 

applications necessary to conduct daily business.

TTB Enterprise Architecture: This investment supports strategic management of IT operations 

(e.g., business process redesign efforts not part of an individual investment, enterprise 

architecture development, capital planning and investment control processes, procurement 

management, and IT policy development and implementation) and costs for Chief Information 

Officer functions.

In addition to leveraging IT to support the mission, strategy, and day-to-day operations of the 

bureau, TTB supports and maintains strategy alignment with OMB and Treasury through 

enterprise-wide IT initiatives. These include: Cyber Security; IT Infrastructure; Electronic 

Identity and Access Management (HSPD-12); Enterprise-wide Contracts and Services; and 

Program Metrics and Milestones.

Scientific Equipment for Laboratories

This investment will enable TTB’s chemists to provide accurate and reproducible scientific data 

and laboratory results to support regulatory compliance, tax enforcement, tax classification, 

rulemaking, and investigations for both the alcohol and tobacco commodities. Laboratory 
TTB - 20

instruments require periodic replacement, as they have finite lifecycles due to use and as 

scientific technology advances render older instruments obsolete. Periodic replacement of the 

existing technologies is essential for TTB laboratories to remain state-of-the-art and effective to 

support the bureau’s mission, strategy, and day-to-day operations.

A summary of capital investment resources, including major information technology and nontechnology investments can be found at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

Bureau of the Fiscal Service

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019 
Fiscal Service - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .............................................................................................. 5

1.2 – Budget Adjustments Table................................................................................................. 5

C – Budget Increases and Decreases Description....................................................................... 5

1.3 – Operating Levels Table...................................................................................................... 7

D – Appropriations Language and Explanation of Changes ...................................................... 8

1.4 – Permanent, Indefinite Appropriations Table...................................................................... 9

E – Legislative Proposals............................................................................................................ 9

Section II – Annual Performance Plan and Report................................................................. 12

A – Strategic Alignment ........................................................................................................... 12

B – Budget and Performance by Budget Activity .................................................................... 16

2.1.1 – Accounting and Reporting Resources and Measures.................................................... 16

2.1.2 – Collections Resources and Measures............................................................................ 18

2.1.3 – Payments Resources and Measures .............................................................................. 19

2.1.4 – Retail Securities Services Resources and Measures..................................................... 22

2.1.5 – Wholesale Securities Services Resources and Measures.............................................. 23

2.1.6 – Debt Collection Resources and Measures..................................................................... 24

C – Changes in Performance Measures.................................................................................... 26

Section III – Additional Information ........................................................................................ 28

A – Summary of Capital Investments....................................................................................... 28
Fiscal Service - 3

Section I – Budget Request

A – Mission Statement

Promote the financial integrity and operational efficiency of the Federal Government through 

exceptional accounting, financing, collections, payments, and shared services.

B – Summary of the Request 

Fiscal Service’s multi-faceted mission supports the Federal Government’s National Financial 

Critical Infrastructure. Fiscal Service continues to work with the Federal financial community to 

identify improvements to core programs and streamline operations Government-wide. The 

bureau’s vision to “Transform financial management and the delivery of shared services in the 

Federal Government” and commitment to deliver strong leadership and exceptional operations

align with Treasury’s Strategic Goal 4 (Transform Government-wide Financial Stewardship) and 

Goal 5 (Achieve Operational Excellence) as follows:

 Provides Government-wide accounting and reporting services to include managing the 

Federal Government’s daily cash flows, accounting for the public debt, and publishing the 

Daily and Monthly Treasury statements as well as the Financial Report of the U.S.

Government 

 Operates the Federal Government’s collections and deposit systems by managing the 

Electronic Federal Tax Payment System (EFTPS) and implementing new and cutting edge 

tools to allow taxpayers, national park visitors, and others to pay taxes, entrance fees, and 

fines owed to the Federal Government electronically

 Provides centralized payment services to Federal agencies by annually disbursing 87 percent 

of the Government’s payments to include Veterans’ benefits, Social Security benefits, and 

Internal Revenue Service tax refunds, educating unbanked and underbanked Federal benefit 

recipients on the many electronic payment options available, and working with law 

enforcement to identify fraudulent activity and recover associated funds

 Offers investors the ability to buy and manage Treasury securities online via the 

TreasuryDirect system through which Treasury savings bonds, among other securities, may 

be purchased, tracked, and redeemed electronically

 Borrows the money needed to operate the Federal Government by performing auctions 

through which investors have the opportunity to purchase Treasury securities 

 Manages the collection of delinquent debt owed to the Federal Government by operating two 

programs, the Treasury Offset Program (TOP) and Cross-Servicing Program, to which 

Federal agencies are legally required to submit most debts delinquent for 120 days for 

collection action 

Fiscal Service, through efficient and effective management of these critical programs, 

demonstrates high performance and achieves outcomes and results that include:

 Financing Federal operations by collecting over $4 trillion in revenues

 Securely and timely disbursing 1.2 billion Federal payments, totaling more than $3.4 trillion, 

with 95.1 percent delivered electronically

 Making available $8.6 trillion to fund critical daily Federal Government operations 

 Developing the new USAspending.gov site using a single, Government-wide data schema 

resulting in the first Digital Accountability and Transparency Act (DATA Act) submission,
Fiscal Service - 4

with data from all 24 Chief Financial Officer Act agencies, timely published on the new 

spending transparency website 

In FY 2019, the Fiscal Service plans to accomplish many things with this budget request. Some 

of these goals include:

 Activities that support the President’s Management Council Mission Support Services 

Initiatives such as:

 Maximizing electronic payments

 Centralizing Federal disbursing

 Supporting reductions Government-wide improper payments

 Expanding electronic invoicing through the Invoice Processing Platform (IPP)

 Expanding and digitizing receivables using the Centralized Receivables Service (CRS)

 Reducing collections lockboxes and increase digitization

 Continuing to provide operational excellence to customers daily, which includes more than 

200 agencies and all American taxpayers

 Implementing Financial Management Innovation Pilots to support the Fiscal Service vision 

to transform financial management

 Expanding eCommerce collections solutions to allow all American citizens to do business 

with the Federal Government in a more efficient and effective manner
Fiscal Service - 5

1.1 – Appropriations Detail Table

Dollars in Thousands

Fiscal Service

Appropriated Resources

New Appropriated Resources FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Accounting and Reporting 439 $108,312 441 $107,576 437 $92,296 (4) ($15,280) -0.91% -14.20%

Collections 159 $36,197 159 $35,951 158 $35,232 (1) ($719) -0.63% -2.00%

Payments 557 $126,685 561 $125,825 556 $120,743 (5) ($5,082) -0.89% -4.04%

Retail Securities Services 441 $62,559 454 $62,134 439 $62,297 (15) $163 -3.30% 0.26%

Wholesale Securities Services 78 $19,304 78 $19,173 78 $20,269 - $1,096 0.00% 5.72%

Subtotal New Appropriated Resources $1,674 $353,057 1,693 $350,659 1,668 $330,837 (25) ($19,822) -1.48% -5.65%

Other Resources

 Reimbursables 420 $336,076 427 $377,980 431 $421,267 4 $43,287 0.94% 11.45%

Subtotal Other Resources 420 $336,076 427 $377,980 431 $421,267 4 $43,287 0.94% 11.45%

Total Budgetary Resources 2,094 $689,133 2,120 $728,639 2,099 $752,104 (21) $23,465 -0.99% 3.22%

* This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017, for further details on the execution of these resources see the 2019 Budget 

Appendix chapter for the Department of the Treasury. FY 2017 FTE and Reimbursables are actuals.

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Enacted* Annualized CR Request Change % Change

1.2 – Budget Adjustments Table

Fiscal Service FTE Amount

FY 2018 Annualized CR 1,693 $350,659

Changes to Base:

Maintaining Current Levels (MCLs): 0 $3,286

Pay Annualization 0 $1,038

Non-Pay 0 $2,248

Adjustments to Base: (13) ($19,822)

Prior Program Decreases (13) ($19,822)

Subtotal Changes to Base (13) ($16,536)

Total FY 2019 Base 1,680 $334,123

Program Changes:

Program Decreases (12) ($3,286)

myRA (12) ($600)

Mission Support 0 ($2,686)

Total FY 2019 President's Budget 1,668 $330,837

Dollars in Thousands

Note: Prior program decreases include reductions to all budget 

activities identified in the FY 2018 President's Budget

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ...................................................... +$3,286,000 / +0 FTE 

Pay Annualization +$1,038,000 / +0 FTE 

Funds are requested for annualization of the January 2018 pay raise.

Non-Pay +$2,248,000 / +0 FTE 

Funds are requested for inflationary adjustments to non-labor costs such as travel, contracts, rent, 

supplies, and equipment.
Fiscal Service - 6

Prior Program Decreases -$19,822,000 / -13 FTE

Prior program decreases include reductions to Accounting and Reporting, Collections, Payments, 

Retail Securities Services, Support Services, and Streamlining Staff/Other Efficiencies as first 

proposed in the FY 2018 President’s Budget.

Program Decreases .................................................................................. -$3,286,000 / -12 FTE

myRA -$600,000 / -12 FTE 

This reduction and savings are a result of the plan to wind down the myRA program.

Mission Support -$2,686,000 / +0 FTE 

Fiscal Service will delay implementation of customer self-service portals, on-line chat portals, 

and other mission support contracts impacting all budget activities and customers.
Fiscal Service - 7

1.3 – Operating Levels Table

Dollars in Thousands

Fiscal Service FY 2017 FY 2018 FY 2019

Object Classification Enacted* Annualized CR Request

11.1 - Full-time permanent 148,909 146,909 140,273

11.3 - Other than full-time permanent 339 524 524

11.5 - Other personnel compensation 4,806 4,806 5,853

11.8 - Special personal services payments 0 23,879 23,879

11.9 - Personnel Compensation (Total) 154,054 176,118 170,529

12.0 - Personnel benefits 50,242 49,242 48,241

13.0 - Benefits for former personnel 100 3,100 100

Total Personnel and Compensation Benefits $204,396 $228,460 $218,869

21.0 - Travel and transportation of persons 2,465 2,465 2,021

22.0 - Transportation of things 125 125 121

23.0 - Rent, Communications and Utilities 40,624 29,373 29,072

23.1 - Rental payments to GSA 37,111 21,373 21,192

23.2 - Rental payments to others 10 445 100

23.3 - Communications, utilities, and miscellaneous charges 3,503 7,555 7,780

24.0 - Printing and reproduction 252 250 237

25.0 - Other contractual services 94,527 79,318 71,485

25.1 - Advisory and assistance services 37,084 35,717 30,818

25.2 - Other services from non-Federal sources 14,379 14,379 14,122

25.3 - Other goods and services from Federal sources 40,436 26,436 23,806

25.4 - Operation and maintenance of facilities 1,183 1,183 995

25.7 - Operation and maintenance of equipment 1,445 1,603 1,744

26.0 - Supplies and materials 4,021 4,021 3,843

31.0 - Equipment 4,990 4,990 4,234

32.0 - Land and structures 1,657 1,657 955

Total Non-Personnel $148,661 $122,199 $111,968

New Budgetary Resources $353,057 $350,659 $330,837

FTE 1,674 1,693 1,668

* This column reflects levels appropriated in H.R. 255, the Consolidated Appropriations Act of 2017, for further details 

on the execution of these resources see the 2019 Budget Appendix chapter for the Department of the Treasury. FY 

2017 FTE is actual.
Fiscal Service - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

BUREAU OF THE FISCAL SERVICE

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of operations of the Bureau of the Fiscal 

Service, $330,837,000; of which not to exceed $4,210,000, to 

remain available until September 30, 2021, is for information 

systems modernization initiatives; and of which $5,000 shall be 

available for official reception and representation expenses. 

In addition, $165,000, to be derived from the Oil Spill Liability 

Trust Fund to reimburse administrative and personnel expenses 

for financial management of the Fund, as authorized by section 

1012 of Public Law 101–380. 

Note.—A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing

Appropriations Act, 2018 (Division D of P.L. 115–56, as 

amended). The amounts included for 2018 reflect the annualized 

level provided by the continuing resolution.

Federal Reserve Bank Permanent, Indefinite Appropriation

The Federal Reserve Banks (FRBs) act as fiscal agents of the United States when directed by the 

Secretary of the Treasury in accordance with 12 U.S.C. 391. Under this account, the FRBs 

support fiscal operations unrelated to the administration of the public debt and provide banking 

and financial services on behalf of the United States Treasury. Specifically, this account 

supports the accounting and reporting, collections, and payments programs. These, and other

programs, are vital to the National Financial Critical Infrastructure, Fiscal Service’s strategic 

goals, and the expansion of E-Government efforts to reduce costs, improve accuracy and 

increase options available to citizens to conduct transactions with the Federal Government. 

Claims for reimbursements are closely monitored for compliance with the Instructions for Filing 

Reimbursement Claims for Fiscal Agent Services provided to Fiscal Service. Fiscal Service 

estimates that the cost of FRB services for FY 2019 will be approximately $608.0 million.

Reimbursements to the Federal Reserve Banks

Public Law 101-509, 104 Stat. 1389, 1394 (1990), established a permanent, indefinite 

appropriation to pay such sums as necessary to reimburse the FRBs for acting as fiscal agents. 

This account was further defined in FY 1992 to solely support those activities related to the 

administration of the public debt. Claims for reimbursements are closely monitored for 

compliance with the Instructions for Filing Reimbursement Claims for Fiscal Agent Services 

provided to Fiscal Service. Funding for FY 2019 is estimated at $157.5 million. 
Fiscal Service - 9

Financial Agent Services Permanent, Indefinite Appropriation

Congress has given the Secretary of the Treasury broad discretion to deposit money in financial 

institutions and obtain banking services by designating financial institutions to act/serve as 

Financial Agents (FA) of the United States. The services support many Fiscal Service

programs, such as accounting and reporting, collections, payments, and debt collection. The 

services provided by the FAs are authorized under numerous statutes including, but not limited 

to, 12 U.S.C. 90 and 265.

Fiscal Service estimates that the cost of FA services for FY 2019 will be approximately 

$832.5 million, which includes $2 million for Government Sponsored Enterprise - Mortgage 

Backed Securities administrative costs.

Government Losses in Shipment

Public Law 103-329 established a permanent, indefinite appropriation to pay such sums as 

necessary to make payments for the replacement of valuables, or the value thereof, lost, 

destroyed, or damaged in the course of United States Government shipments. The Government 

Losses in Shipment Act (the Act) was enacted July 8, 1937 to dispense with the necessity for

insurance by the Government against loss or damage to valuables in shipment and for other

purposes. The Act was amended in 1943 to cover losses resulting from the redemption of

savings bonds (for example, stolen bonds that were fraudulently negotiated even though the

paying agent followed identification guidelines established by the Treasury). All authority of

the Treasury under the Act has been delegated to the Fiscal Service Commissioner. In FY 2019, 

the funding estimated to support payments for the replacement of valuables is $1.2 million.

1.4 – Permanent, Indefinite Appropriations Table

E – Legislative Proposals

1. Increase delinquent Federal non-tax debt collections by authorizing administrative 

bank garnishment for non-tax debts of commercial entities. Estimated Collections: 

$320.0 million in commercial debts over 10 years 

This proposal would allow Federal agencies to collect delinquent non-tax debt by garnishing 

the bank and other financial institution accounts of delinquent commercial debtors after 

providing full administrative due process but without a court order. The legislation would 

Dollars in Thousands

Permanent, Indefinite Appropriation FY 2017 

Enacted

FY 2018 

Requested

FY 2019 

Request

Federal Reserve Bank 1$541,126 $585,800 $608,000

Reimbursements to the Federal Reserve Banks $146,973 $149,480 $157,500

Financial Agent Services 1, 2 $802,750 $840,977 $832,500

Government Losses in Shipment $1,123 $1,200 $1,200

1

 Approximately $75M is reimbursed from other government agencies and deposited into the 

General Fund each year.

2

 FY 2017 includes $3M and FY 2018 and FY 2019 include $2M per year for the 

Government Sponsored Enterprise - Mortgage Backed Securities administrative costs.
Fiscal Service - 10

include appropriate limitations, such as a limitation on the amount that could be garnished at

any one-time and would provide for meaningful judicial review. It would also direct the 

Secretary of the Treasury to issue Government-wide regulations implementing the authority 

of bank garnishment for non-tax debts of commercial entities. 

Bank garnishment rules under this authority would be subject to Treasury’s rule (31 C.F.R 

212) protecting exempt benefit payments from garnishment. To reach income of commercial 

entities and other non-wage income and funds available to commercial debtors owing 

delinquent non-tax obligations to the United States, this proposal would authorize agencies to 

issue garnishment orders to financial institutions without a court order. Agencies would be 

required to provide debtors with appropriate due process and other protections to ensure that 

debtors have had the opportunity to contest the debts and/or enter into repayment agreements 

to avoid issuance of an order. The Internal Revenue Service currently has similar authority 

to collect Federal tax debts. 

This proposal would reach assets of entities whose income is not derived from wages. The 

Debt Collection Improvement Act of 1996 authorized Federal agencies to collect delinquent 

non-tax debt by garnishing the wages of debtors without the need to first obtain a court order. 

Since July 2001, Fiscal Service has collected $416.2 million in garnished wages (as of 

September 30, 2017) on behalf of Federal agencies. 

2. Increase and streamline recovery of unclaimed assets owed to the United States by 

authorizing Treasury to locate and recover assets of the United States and to retain a 

portion of amounts collected to pay for the costs of recovery. Estimated recoveries: 

$77.2 million over 10 years 

The proposal would amend 31 U.S.C. § 3711 to authorize Treasury to use its resources to 

recover unclaimed assets of the United States. States and other entities hold assets in the 

name of the United States or in the name of departments, agencies and other subdivisions of 

the Federal Government. Many agencies are not recovering these assets due to a lack of 

expertise and funding. Under current authority, Treasury collects delinquent debts owed to 

the United States and retains a portion of collections, which is the sole source of funding for 

its debt collection operations. While unclaimed Federal assets are generally not considered 

to be delinquent debts, Treasury’s debt collection operations personnel have the skills and 

training to recover these assets.

3. Expand Treasury's authority to access the National Directory of New Hires to include 

prevention, identification, and recovery of improper payments. Total increase in 

improper payments identified by Treasury: $3.24 billion over ten years

This proposal seeks an expansion of Treasury's authority to access the National Directory of 

New Hires (NDNH) to prevent, identify and recover improper payments. For the purpose of 

eliminating waste, fraud, and abuse in Federal programs and preventing improper payments, 

agencies must review pre-payment and pre-award procedures and review available databases 

with relevant information on eligibility prior to the release of Federal funds. 
Fiscal Service - 11

The Do Not Pay initiative was formalized in the Improper Payments Elimination and 

Recovery Improvement Act of 2012. The Treasury Secretary is assisting agencies in gaining 

access to the databases identified by the President and IPERIA and other available databases 

through a single access point – the Do Not Pay Portal. Access to the information contained 

in the NDNH is restricted by statute. The Social Security Act specifies which agencies may 

receive information from the database and the limited purposes for which disclosures are 

permitted. Under the current law, the Secretary of the Treasury has access to information in 

the NDNH for debt collection purposes. 

This proposal would expand the Secretary's access to information in the NDNH to include 

the purposes of preventing, identifying, and recovering improper payments for Federal 

agencies. Such access would permit the Secretary to assist paying agencies that are currently 

authorized by the Social Security Act to access NDNH, in comparing information from the 

NDNH with data about persons receiving Federal payments and identify individuals who are 

ineligible to receive payments or who are receiving erroneous payments.

 

4. Allow Treasury to access the Death Master File for improper payment and debt 

collection purposes. Total increase in improper payments identified by Treasury: $49.9 

million over 10 years

This proposal would further reduce improper payments and result in the more efficient 

resolution or collection of delinquent debt by improved sharing and use of death data by 

Government agencies. It would accomplish this by authorizing Treasury to access the death 

information, including death information obtained from states, compiled by the Social 

Security Administration under section 205(r)(3) of the Social Security Act (Full Death 

Master File) to prevent, identify and recover improper payments and collect or resolve 

delinquent debts. 

This proposal would authorize the Treasury Secretary to access the information in the Full 

Death Master File for the purposes of preventing, identifying, and recovering improper 

payments for Federal agencies and resolving or collecting delinquent non-tax debts. Such 

access would permit the Secretary to assist paying agencies in comparing information from 

the Full Death Master File with data about persons receiving Federal payments and identify 

individuals who are ineligible to receive payments or who are receiving erroneous payments. 

It would also allow the Treasury to identify debts owed by deceased delinquent debtors and 

would allow them to either resolve or collect the delinquent Federal non-tax debt.
Fiscal Service - 12

Section II – Annual Performance Plan and Report

A – Strategic Alignment

Fiscal Service fulfills its mission and vision through five annually appropriated budget activities 

(Accounting and Reporting, Collections, Payments, Retail Securities Services, and Wholesale 

Securities Services) and one mandatory budget activity (Debt Collections) funded through

delinquent debt collection revenue. These budget activities align to two Treasury Strategic 

Goals: Transform Government-wide Financial Stewardship and Achieve Operational Excellence.

More specifically, Fiscal Service supports the following Treasury Strategic Goals and 

Objectives:

Treasury Strategic Goal 4: Transform Government-wide Financial Stewardship

4.1 – Financial Data Access/Use: Strengthen Government-wide decision making and 

accountability by increasing access to and use of Government financial data. 

Accounting and Reporting:

 Enterprise Data Strategy: In FY 2017, Fiscal Service began a new phase of the Digital 

Accountability and Transparency Act of 2014 (DATA Act) program by aggregating and 

disseminating information about the Federal spending lifecycle connecting 

appropriations, awards, and outlay information for the first time. These data provide a 

necessary foundation for understanding how our Government allocates and uses taxpayer 

dollars. As a result, Fiscal Service anticipates that Treasury may experience a significant 

increase in the volume of inquiries it will receive about the data – its quality, 

completeness, accuracy – and possibly requests for additional data and functionality. 

 To handle these requests, Fiscal Service will develop and execute an overall data strategy 

for Fiscal Service’s financial management data. The plan will promote the adoption of 

Federal financial data standards, promote consistent data for decision making, and build 

upon and leverage successes from the DATA Act implementation process. An effective 

strategy will promote collaboration across reporting systems, reduce duplication, improve 

data quality, and result in an increased focus on data analytics to make data more useful 

and consumable.

 General Fund Audit: Fiscal Service will pursue a clean audit opinion on the Financial 

Report of the U.S. Government (FR) through the implementation of our remediation plan. 

Key among these remediation efforts is attaining auditability of the General Fund of the 

United States Government. Achieving a clean audit opinion will increase confidence and 

reliance on Government-wide financial management data. 

 Additionally, through collaboration with the Government Accountability Office, Office 

of Management and Budget (OMB), and Federal program agencies, Fiscal Service will 

pursue a more useful FR with a centralized, risk-based audit approach that will improve 

overall operational efficiency and reduce agency audit burden across Government.
Fiscal Service - 13

 G-Invoicing Initiative: Fiscal Service is working to improve the quality and reliability of 

Intragovernmental (IGT) buy/sell data through electronic Government invoicing (or Ginvoicing). 

 This effort includes implementing a series of enhancements to bring the invoicing of 

Government-wide transactions in line with Fiscal Service data, policy, and process 

standards to support a Government-wide rollout. G-invoicing will help resolve the IGT 

buy/sell differences that contribute to the IGT material weakness in the FR.

Payments:

 Analytics Expansion: The Do Not Pay Business Center (DNP) can play a significant role 

in helping agencies address the Government-wide problem of improper payments –

estimated at $144.0 billion in FY 2016. While DNP cannot address all of the root causes 

that contribute to improper payments, it can significantly increase its current impact in 

two ways. First, by expanding analytics services, product offerings, and data sources to 

agency customers, DNP can help agencies detect and prevent a broader range and 

increased amount of improper payments. Second, the expansion allows the bureau to

increase the impact it has in strengthening the integrity of Federal payments through the 

payment integrity program.

4.2 – Debt Management: Fund the Federal Government at the least cost over time.

Auctions:

 Modernize Auctions Infrastructure and Application: Fiscal Service will modernize the 

auction application software. The modernization effort will ensure that critical auction 

processes continue to work flawlessly, remain secure, and operate without service 

disruptions.

4.3 – Federal Financial Performance: Improve Federal financial management performance 

using innovative practices to support effective Government.

All Budget Activities:

 Innovative Financial Management Solutions: Fiscal Service will identify and pilot 

emerging technologies and practices that demonstrate a potentially high return on 

investment for Federal financial management. The bureau will develop proof of concepts 

for distributed ledger technology (e.g., blockchain) as well as robotic process automation 

to understand the degree to which these technologies could be used to improve Federal

financial management.

Treasury Strategic Goal 5: Achieve Operational Excellence

5.1 – Workforce Management: Foster a culture of innovation to hire, engage, develop, and 

optimize a diverse workforce with the competencies necessary to accomplish Treasury’s mission. 
Fiscal Service - 14

All Budget Activities:

 Financial Management Talent: Fiscal Service has a goal to develop, retain, and empower 

the best and brightest talent to support Federal financial management. Fiscal Service 

continues to support this goal through several initiatives that include: the Fiscal Service 

Culture Strategy, Moving Operations to Field Offices, Position Management Review, and 

Commissioner’s Scholarship Program for Training.

5.2 – Treasury Infrastructure: Better enable mission delivery by improving the reliability, 

security, and resiliency of Treasury’s infrastructure. 

All Budget Activities:

 IT Infrastructure: Fiscal Service will increase resiliency by enhancing IT infrastructure, 

technical failover capabilities, and continuity of operations processes through procedural 

improvements and regular exercises. This will ensure the uninterrupted financial 

integrity, security, and operational efficiency of mission critical systems. It also will 

ensure continual enhancement of the systems and operations to meet critical mission 

functions including auctions, revenue collections, and payments.

5.3 – Customer Value: Improve customer value by increasing the quality and lowering the cost 

of Treasury’s products and services. 

Collections and Payments:

 Electronic Solutions: Fiscal Service will work to reduce the number of lockboxes used in 

the Federal Government to process manual collections by streamlining and consolidating 

facilities, continuing to transition paper processing to electronic solutions, and improving 

manual processing efficiencies through the use of new technologies such as robotic 

process automation and intelligent character recognition. 

 Fiscal Service will also continue to digitize processing across all operational areas 

through the deployment of electronic solutions that streamline processes and reduce the 

paper footprint.

 Centralize Federal Disbursing: Through this initiative, Fiscal Service will consolidate 

the disbursement of all Federal payments. The Federal Government disburses 1.4 billion 

payments annually to recipients throughout the world. Currently, Fiscal Service 

disburses 87 percent of these payments, with the remaining 13 percent being disbursed by 

non-Treasury disbursing offices. Consolidating disbursement at Fiscal Service would 

eliminate redundancies, streamline end-to-end payment processing, and lower

Government-wide costs.

 Common Authentication Solution and Customer-Centric Approach: Fiscal Service will 

increase the capability of applications, both web and client server based, to easily honor 

and accept the personal identity verification (PIV), personal identity verification-
Fiscal Service - 15

interoperable (PIV-I), and Department of Defense (DoD) Common Access Card (CAC) 

credentials. These services will be available to all of Treasury as well as Federal public 

key infrastructure customers.

Fiscal Service will work to optimize the user experience with a more customer-centric approach, 

reduce operational inefficiencies, and ensure security while addressing evolving standards.

These services will be available to all consumer-facing Fiscal Service applications. In addition, 

expanding the use of user-friendly mobile processes will allow the public to interact with the 

Government how they prefer.

Everything Fiscal Service does aligns to the Treasury Strategic Goals and Objectives and directly 

supports the bureau’s strategic goals:

 Goal 1 - Operational Excellence: Maintain agile, efficient, and resilient programs to meet the 

financial management needs of the Federal Government

 Goal 2 - Innovation and Customer Experience: Deliver innovative financial management 

solutions that provide a modern, seamless customer experience

 Goal 3 - Our Workforce: Develop, retain, and empower the best and brightest talent to 

support Federal financial management

 Goal 4 - Data Integrity and Transparency: Increase transparency and public trust in Federal

financial management data

 Goal 5 - Financial Management and Community: Provide the financial management 

community the financial tools and capabilities so they can further support their agencies’ 

missions
Fiscal Service - 16

B – Budget and Performance by Budget Activity

2.1.1 – Accounting and Reporting Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $86,628 $102,661 $104,600 $113,413 $108,312 $107,576 $92,296

Reimbursable Resources $6,517 $6,699 $10,256 $24,155 $23,800 $27,399 $25,004

Budget Activity Total $93,145 $109,360 $114,856 $137,568 $132,112 $134,975 $117,300

FTE 464 357 374 425 381 441 437

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Governmentw ide Accounting Reports 

Issued Timely

100 100 99.5 100 100 100 100 100

Cost Per Government Agency 

Investment Services 

Transaction ($) 

35.2 35.99 56.38 57.16 55.27 38.49 56.38 DISC

Cost Per Summary Debt 

Accounting Transaction ($) 19.86 16.36 19.26 15.67 11.86 19.26 19.26 DISC

Percentage of Summary Debt 

Accounting Reports Submitted 

Timely and Accurately

N/A N/A N/A N/A 100 100 100 DISC

Collect and Disburse 

Interest/Principal Payment 

Amounts for Government 

Agency Investment Services 

Investments/Borrow ings Timely 

and Accurately

N/A N/A N/A N/A 98 98 98 DISC

Key: DISC - Discontinued

2.1.1 – Accounting and Reporting Budget and Performance 

($92,296,000 from direct appropriations, and $25,004,000 from reimbursable resources):

The Accounting and Reporting activity consists of two programs: Central Accounting and Data 

Transparency. The Central Accounting program produces timely and accurate financial 

information by compiling and publishing daily, monthly, and annual reports; managing Federal

daily cash flows; and tracking the daily balance and composition of the public debt of the United 

States. All of these activities significantly contribute to the improved quality of financial 

decisions across the Government and support the Treasury Strategic Objective 4.1 to increase the 

access and use of Federal financial data to strengthen Government-wide decision making, 

transparency, and accountability. As part of the Central Accounting program, Fiscal Service:

 Produces timely and accurate financial information by operating and overseeing the 

Government’s Central Accounting Reporting System and managing $103.2 billion in 

daily Federal cash flows

 Generates and disseminates several reports and publications including the Daily Treasury 

Statement, Monthly Treasury Statement, Monthly Statement of the Public Debt, Treasury 

Bulletins, the Combined Statement of the United States Government, and the Financial 
Fiscal Service - 17

Report of the United States Government (FR)

 Issues the annual, audited Schedules of Federal Debt (Schedules) that report on the single 

largest Federal liability in Treasury’s annual Agency Financial Report and received an 

unmodified opinion for each of the past 21 years

 Manages nearly $80.4 billion in State and Local Government Series (SLGS) securities for 

over 3,000 customers and administers flexible investment alternatives for state and local 

governments to refinance their outstanding, tax-exempt debt

 Issues, redeems and services Government Account Series (GAS) securities totaling 

nearly $5.8 trillion that are held in more than 160 accounts that have specific statutory 

authority to invest in these special, non-marketable Treasury securities

 Administers over 10,500 loans totaling $1.4 trillion to nearly 100 accounts held by 

Federal agencies to support programs relating to education, housing, flood relief, and 

agriculture

The Data Transparency program is responsible for implementing the Fiscal Service’s data 

strategy, as well as fulfilling the requirements of the DATA Act. The DATA Act required Fiscal 

Service, in collaboration with OMB, to develop, implement, and manage a system to provide 

Government-wide financial data to the public by May 2017. To meet these requirements, Fiscal

Service developed a Government-wide data standard for collecting agencies’ financial data, 

selected a broker to accept and validate the data, and implemented a public website for data 

accessibility. Fiscal Service continues to implement system enhancements based on user 

feedback using agile development techniques.

Description of Performance:

Fiscal Service collects, analyzes, and publishes Government-wide financial information, made 

available to both the public and private sectors, to provide transparency on the Government’s 

financial status. In FY 2017, Fiscal Service timely issued Government-wide accounting reports 

100 percent of the time.

The Percentage of Summary Debt Accounting reports submitted timely measure established an 

FY 2017 target of 100 percent. Fiscal Service met its target in addition to taking significant 

strides with the FR to address the material weaknesses previously identified and continuing to 

implement corrective actions outlined in the remediation plan. 

Fiscal Service will meet its FY 2018 and FY 2019 performance measure targets by transforming 

the quality, effectiveness and transparency of Federal financial management data; delivering 

value-added business process and system improvements; and expanding/enhancing relationships 

with stakeholders and customers. 
Fiscal Service - 18

2.1.2 – Collections Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $20,851 $30,469 $34,982 $37,394 $36,197 $35,951 $35,232

Reimbursable Resources $176 $0 $3,898 $8,265 $7,028 $10,033 $9,287

Budget Activity Total $21,027 $30,469 $38,880 $45,659 $43,225 $45,984 $44,519

FTE 120 139 144 152 159 159 158

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Total 

Federal Government 

Receipts Settled 

Electronically

97 98 98 98.2 98.3 98 98 98

2.1.2 – Collections Budget and Performance 

($35,232,000 from direct appropriations, and $9,287,000 from reimbursable resources):

The Collections budget activity supports the National Financial Critical Infrastructure and 

Treasury Strategic Goal 4 (Transform Government-wide Financial Stewardship) by 

administering the world's largest Government funds collections systems through a network of 

Fiscal and Financial Agents. In FY 2017, the bureau collected over $4.1 trillion in Federal

revenues, such as individual and corporate income tax deposits, customs duties, fees for 

Government services, fines, and loan repayments. Within that, $2.0 trillion in tax payments were 

processed through EFTPS and approximately 186.5 million transactions worth nearly $155.0

billion were processed through Pay.gov.

Using cutting-edge technology, Fiscal Service provides Federal agencies, individuals, 

businesses, tax practitioners, and financial institutions with a wide variety of electronic collection 

alternatives. The options are designed and developed with some major goals in mind: 

 to offer a service that is easy to use, convenient, and secure 

 to streamline the collection process

 to make full use of web -and mobile app technologies

 to manage the depositary services provided to Treasury by financial institutions

These efforts also support the following Fiscal Service strategic goals:

 Maintain agile, efficient, and resilient programs to meet the financial management needs of 

the Federal Government

 Deliver innovative financial management solutions that provide a modern, seamless customer 

experience

Description of Performance: 

Fiscal Service exceeded its target of electronically settling 98 percent of all Federal Government

receipts through a continued commitment to agency outreach efforts. Fiscal Service expects to 

maintain an annual electronic collections rate of at least 98 percent through FY 2019 by 
Fiscal Service - 19

continuing to promote the use of electronic systems in the collections process and to assist 

agencies in converting collections from paper to electronic media with programs such as:

 Electronic Federal Tax Payment System (EFTPS): EFTPS is a system that allows 

businesses, individuals, and other entities to pay taxes electronically. There are several 

methods to initiate tax payments through EFTPS, including through bulk provider, Federal

agency, online channels, and phone. The benefits of EFTPS include accuracy, security, 

simplicity, and flexibility. The goal is to continue to require businesses to pay their Federal

taxes electronically and focus efforts on increasing the number of individuals that pay taxes 

electronically.

 Pay.gov: Pay.gov is a web-based Government-wide collections portal. It allows users to 

electronically fill out and submit forms, view bills, and make payments via Automated 

Clearing House (ACH) debit, credit card, or digital wallet. The system also provides 

reporting to agencies and allows individuals and businesses to make non-tax payments to 

Federal agencies over the internet with a mobile-friendly user interface and enhanced 

functionality in the areas of electronic billing and electronic forms. 

 Check Conversion and Truncation: Fiscal Service is employing strategies to reduce the 

number of paper checks it receives and to ensure that those it does receive are converted for 

electronic processing. The Over the Counter Channel Application (OTCnet) and Electronic 

Check Processing (ECP) are programs that provide a complete electronic record of all check 

images and related financial data that is accessible by agencies and eliminate the costly and 

time-consuming need to photocopy checks, safeguard checks, or process paper.

 eCommerce Collections: Agencies using mobile applications avoid sending checks to 

lockboxes and are converting mailed-in or point-of-sale checks/cash payments to self-service 

ACH, card, and digital wallet payments. Digital wallets allow consumers the convenience of

using their electronic wallet (card, ACH options) to pay an obligation to an agency in lieu of 

providing bank account and credit card information online or via phone. Online bill payment 

allows consumers to pay Federal Government bills through their banks’ websites.

2.1.3 – Payments Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $130,570 $114,650 $120,769 $127,943 $126,685 $125,825 $120,743

Reimbursable Resources $102,401 $78,625 $81,953 $111,088 $111,464 $119,408 $120,109

Budget Activity Total $232,971 $193,275 $202,722 $239,031 $238,149 $245,233 $240,852

FTE 711 577 521 562 597 561 556

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Treasury 

Payments and Associated 

Information Made 

Electronically

92.5 94.4 94.7 94.9 95.1 95.2 95.2 95.2
Fiscal Service - 20

2.1.3 – Payments Budget and Performance

($120,743,000 from direct appropriations, and $120,109,000 from reimbursable resources):

The Payments budget activity supports the National Financial Critical Infrastructure and 

Treasury Strategic Goal 4 (Transform Government-wide Financial Stewardship) by disbursing 

more than 87 percent of the Federal Government’s payments, equating to 1.2 billion payments 

worth $3.4 trillion in FY 2017. Fiscal Service uses the Payment Application Modernization 

(PAM) investment to disburse payments for Veterans’ Compensation and Pension, Social 

Security Benefits, Federal and Railroad Pensions, IRS tax refunds, Supplemental Security 

Income (SSI), etc. PAM supports the production and delivery of Federal payments on behalf of 

more than 250 Federal entities with a single application that generates check, ACH, International 

ACH Transaction (IAT), and wire transfer payments. PAM prevents improper payments and 

collects delinquent debt owed to the Federal Government by automatically interfacing with core 

Treasury systems such as Do Not Pay (DNP) and the Treasury Offset Program (TOP). Fiscal 

Service will eliminate redundancies in the Federal Government through FY 2019 by centralizing 

the payment activities for a large portion of DoD and other non-Treasury disbursing agencies.

This will allow those agencies to better align mission-critical resources and possibly identify 

future savings.

Electronic payments provide timely, accurate, and efficient disbursement of Federal Government

payments; eliminate the costs associated with postage and the re-issuance of lost or stolen 

checks; and help protect against fraud and identity theft. In FY 2017, Fiscal Service disbursed 

98.2 percent of benefit payments electronically, largely due to Go Direct®, an on-going 

nationwide public education campaign that actively encourages Federal Government payment 

recipients to convert to electronic payment methods, and Direct Express®, a prepaid card 

program providing more than 5.1 million unbanked cardholders with a low-cost way to 

electronically receive payments and check their account balance.

The Payments budget activity also includes post payment services to settle claims against the 

United States resulting from Federal Government checks that have been forged, lost, stolen, or 

destroyed, as well as claims and reclamations of EFT payments. Fiscal Service ensures payee 

claims of non-receipt are processed, stale uncashed checks are cancelled, misdirected electronic 

payments are returned, monies erroneously paid to deceased individuals are recovered, and 

checks returned in the mail are properly safeguarded with funds redirected to the right payee or 

held safely in the United States Treasury. Through FY 2019, Fiscal Service will continue to 

invest in the Post Payment System (PPS), a consolidation of several post payment systems into a 

single, centralized system that will unify disparate business processes and eliminate data 

redundancy across systems. PPS will provide Federal program agencies (FPAs) and financial 

institutions a customer portal that supports: payment matching and verification, returns and 

cancellations, inquiries, calls and claims, funds receipt/funds management, reclamations, 

reconciliation, fraud detection, integrity analysis, and reporting and integrated customer 

engagement. PPS will also include enhanced reconciliation activities, improved information 

exchange, reduced reliance on paper, and more robust fraud detection.

In addition, the Fiscal Service collects monies from those parties liable for fraudulent or 

otherwise improper negotiation of Government checks. Support provided to the Inspector 

General, Assistant United States Attorneys, and state and local law enforcement agencies in the 
Fiscal Service - 21

investigation and prosecution of criminals engaged in fraud related to the Treasury payment 

system resulted in 26 arrests, 28 convictions, and $20.6 million recovered through fines, 

restitution, and seizures in FY 2017.

Finally, the Payments budget activity includes the Invoice Processing Platform (IPP) and the Do 

Not Pay (DNP) programs. A secure, Government-wide, web-based, electronic invoice exchange 

network, IPP promotes the efficient use of resources by enabling Federal agencies to 

electronically receive vendor invoices and transforming existing paper-based invoice processes 

into a streamlined electronic process that integrates with existing agency core financial systems.

In FY 2017, Federal agencies received and processed more than 450,000 vendor invoices valued 

at $34.0 billion through Treasury’s electronic invoicing solution, the Invoice Processing Platform 

(IPP). DNP provides a single, centralized point of access to timely, accurate, and actionable data 

for informed decision-making and can help identify, prevent, detect, and recover improper 

payments throughout the payment life cycle while protecting individuals’ privacy. Through FY 

2019, DNP analytics will continue to mature and provide customer agencies with additional tools 

to identify potential improper payments at all payment stages.

Description of Performance:

Fiscal Service continues to increase the electronic payment rate each year. In FY 2017, the 

electronic payment rate rose to 95.1 percent, with the number of electronic payments increasing

by 17.8 million, and paper check volume decreasing by 1.4 million. Tax refund payments 

continue to total more than half of the Treasury-disbursed check volume. The processing of 

electronic invoices also realized a large increase of more than 41,000 over the FY 2016 volume.

The target of 95.2 percent for FY 2018 and FY 2019 was determined by using historical data 

trends to determine the rate of increase/decrease to apply to future EFT and check volumes. The 

percentage increase/decrease differs for each of the payment types (Veterans’ benefits, Social 

Security benefits, SSI, tax refunds, etc.).

Fiscal Service will meet FY 2018 and FY 2019 targets by promoting and increasing EFT 

payments with emphasis on tax refunds, vendor payments, and benefit payments; and exploring, 

developing, and deploying innovative electronic payment solutions.
Fiscal Service - 22

2.1.4 – Retail Securities Services Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $110,876 $95,249 $76,711 $71,252 $62,559 $62,134 $62,297

Reimbursable Resources $16,841 $17,400 $6,006 $16,026 $12,642 $17,515 $17,854

Budget Activity Total $127,717 $112,649 $82,717 $87,278 $75,201 $79,649 $80,151

FTE 605 491 442 436 472 454 439

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Cost Per Electronic 

Retail Transaction ($) N/A N/A N/A N/A B 2.65 3.46 3.46

Cost Per Customer 

Assisted Retail 

Transaction ($) 

N/A N/A N/A N/A B 124.44 124.78 124.78

Key: B - Baseline

2.1.4 – Retail Securities Services Budget and Performance

($62,297,000 from direct appropriations, and $17,854,000 from reimbursable resources):

Retail Securities Services (RSS) enables Americans to save for their future by investing in 

Treasury securities, most notably U.S. savings bonds. This program is responsible for 

processing millions of transactions annually on behalf of more than 50 million investors. RSS 

also provides Americans the opportunity to participate noncompetitively in the auction of 

Treasury marketable securities.

In an effort to be more responsive to retail customers, Fiscal Service implemented a core 

framework functionality as a foundation for offering future retail services. This will allow any 

new retail offering to reach the American investors faster than ever before. In addition, RSS 

established a Financial Institution Community Group, in collaboration with the Federal Reserve, 

to promote and identify process efficiencies for both financial institutions and RSS when 

customers redeem bonds.

Building on those efficiencies, RSS is developing the Treasury Retail Investment Manager 

(TRIM) which will effectively replace the current TreasuryDirect system over time. TRIM will 

be a user-friendly system that will allow individual investors to purchase, view, redeem, and 

manage their investments electronically via laptop or mobile phone. Furthermore, TRIM will 

ultimately allow the unbanked and the under-banked to electronically purchase investments by 

providing alternative payment mechanisms, unlike TreasuryDirect which requires bank accounts. 

Over the next few years, RSS will continue to develop new and unique ways to reach 

underserved audiences, improve customer service, and, ultimately, encourage more Americans to 

save for their future.
Fiscal Service - 23

Description of Performance:

Fiscal Service issued and serviced $31.8 billion in savings and marketable securities held by 

611,000 investors in TreasuryDirect. A total of 2.4 million retail payments worth $13.6 billion 

were made timely and accurately. 

The Cost per customer-assisted retail transaction measure demonstrates the efficiency of 

customer service operations for all retail securities currently offered. The RSS customer service 

staff handles phone and email inquiries, offline authentications, paper savings bond conversions, 

changes in bank information, and transactions requiring legal evidence. In FY 2017, RSS 

experienced an increase in the percentage of overall customer-initiated transactions requiring 

intervention by the customer service staff, as well as higher than anticipated personnel costs 

directly attributed to the ongoing remediation of a backlog of customer service cases. FY 2018 

and FY 2019 targets are $124.78 per customer assisted retail transaction. 

The Cost per electronic retail transaction measure demonstrates the efficiency of investor selfservice for all retail securities currently offered. Customers are able to conduct several 

transactions independently of customer service representatives, including creating online 

accounts to purchase and hold securities, updating account information, purchasing and 

redeeming electronic securities, etc. In FY 2017, in combination with the shift in volumes noted 

above, a decrease in anticipated information technology provider charges resulted in lower than 

expected costs for electronic retail transactions. The FY 2018 and FY 2019 targets are $3.46 per 

electronic retail transaction. 

Fiscal Service will focus on meeting its FY 2018 and FY 2019 targets by increasing customer 

self-sufficiency and satisfaction through streamlined processes; eliminating aging technology 

and decreasing operation and maintenance costs; and leveraging current and/or emerging 

enterprise technologies. 

2.1.5 – Wholesale Securities Services Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Appropriated Resources $22,092 $12,840 $10,676 $13,848 $19,304 $19,173 $20,269

Reimbursable Resources $3,000 $2,346 $927 $3,115 $4,214 $3,404 $5,505

Budget Activity Total $25,092 $15,186 $11,603 $16,963 $23,518 $22,577 $25,774

FTE 113 121 109 78 117 78 78

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Auction 

Results Released 

Accurately

99.6 99.3 99.6 100 98.9 100 100 100

Percentage of 

Auctions Successfully 

Completed by the 

Scheduled Close

N/A N/A N/A N/A N/A N/A N/A B

Key: B - Baseline
Fiscal Service - 24

2.1.5 – Wholesale Securities Services Budget and Performance

($20,269,000 from direct appropriations, and $5,505,000 from reimbursable resources):

The Wholesale Securities Services (WSS) program supports the National Financial Critical 

Infrastructure by managing a critical Treasury High Value Asset (HVA) that enables the Federal 

Government to finance daily operations through reliable, accurate, and secure electronic systems. 

The WSS program also supports Treasury’s Strategic Goal 4 (Transform Government-wide 

Financial Stewardship) and Treasury’s Strategic Objective 4.1 to better enable mission delivery 

by improving the reliability, security, and resiliency of Treasury’s infrastructure.

WSS is responsible for the announcement, auction, issuance, and settlement of marketable 

Treasury bills, notes, bonds, Treasury inflation-protected securities, and floating rate notes. The 

program also oversees the portion of the Federal infrastructure that provides for the transfer, 

custody, and redemption of all Treasury marketable securities, purchased mostly by commercial 

market participants.

Description of Performance:

Fiscal Service awarded $8.6 trillion in Treasury marketable securities during FY 2017, funding 

critical daily Federal operations by conducting 275 auctions. WSS will continue to track the 

percent of auction results released accurately and expects to achieve the 100 percent accuracy 

level in FY 2018. 

To achieve FY 2018 and FY 2019 performance, Fiscal Service will complete a multi-year 

initiative to modernize the system’s application software and technology components and will 

continue to test the tertiary backup system. 

2.1.6 – Debt Collection Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Annualized 

CR Request

Reimbursable Resources $153,667 $139,377 $174,634 $187,152 $176,928 $200,221 $243,508

Budget Activity Total $153,667 $139,377 $174,634 $187,152 $176,928 $200,221 $243,508

FTE 560 363 406 390 417 427 431

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Amount of Delinquent 

Debt Collected 

Through All Available 

Tools ($ billions)

7.02 6.91 7.28 7.41 7.61 7.54 7.56 7.48

2.1.6 – Debt Collection Budget and Performance

($243,508,000 from reimbursable resources):

The Debt Collection program supports Treasury’s Strategic Goal 4 (Transform Governmentwide Financial Stewardship). Fiscal Service is the Government's central debt collection agency, 

managing the Government's delinquent debt portfolio. Using a centralized process, Fiscal 

Service collects delinquent debts, such as mortgage, small business, or Federal student loans;
Fiscal Service - 25

Federal salary or benefit overpayments; and fines or penalties assessed by Federal agencies, 

owed to the United States. In FY 2017, Fiscal Service collected $7.6 billion in delinquent debt

through its two debt collection programs: Treasury Offset Program (TOP) and Cross-Servicing.

Under TOP, the names and taxpayer identifying numbers of debtors included in a Fiscal Service 

database are matched against the names and taxpayer identifying numbers of recipients of 

Federal payments. If there are matches, the amounts of the payments are reduced ("offset") to 

satisfy the delinquent debts. 

In 2017, Fiscal Service implemented a new Cross-Servicing collection system, Cross-Servicing 

Next Generation (CSNG), which optimized the call center, expanded the use of highly 

productive debt collection approaches, such as wage garnishment, and transitioned to a data 

driven, analytical approach. Delinquent debts referred to Fiscal Service by Federal agencies are 

collected using a variety of means including offsetting Federal payments, sending demand letters 

to debtors, entering into repayment arrangements, withholding wages administratively, referring 

debts to the Department of Justice for action, reporting to credit bureaus, and contracting for the 

services of private collection agencies. CSNG Phase II continues to improve the interactive 

voice response (IVR) telephone user experience for better debtor interaction. Modernizing the 

IVR allows debtors to gain more information and have more options for self-service through 

their telephone interactions.

Fiscal Service continues to help agencies implement Section 5 of the DATA Act, which 

amended the Debt Collection Improvement Act of 1996 (DCIA) to require agencies to refer 

eligible debt to Fiscal Service at 120 days delinquent, rather than 180 days, and requires 

Treasury to report non-compliance to Congress. Fiscal Service continues to work with OMB and 

agencies on the new requirements and tools developed for tracking compliance, as required.

Description of Performance:

Fiscal Service exceeded its Amount of delinquent debt collected target for five consecutive 

years. This was the result of expanding the use of the administrative wage garnishment 

collection tool, improving macroeconomic conditions in the country, and enhancing analytics.

However, analysis has shown offsets declining against projections in the past two years. This,

combined with declining referrals from agencies, has resulted in more modest forecasts for FY 

2018 and FY 2019.

The performance targets for FY 2018 and FY 2019 are to collect $7.56 billion and $7.48 billion 

in delinquent debt, respectively. A sophisticated planning model using debt data and

macroeconomic variables is the basis for this target forecast. The model is designed to take into 

account economic fluctuations, as well as debt referral changes, in order to forecast collections 

one and two years out. 

To meet FY 2018 and FY 2019 delinquent debt performance targets, Fiscal Service will continue 

to develop and implement strategies to increase automation, standardization and overall process 

efficiencies. In addition, new payment streams and individual payments will be added to TOP 

that produce offsets and increase delinquent debt collection.
Fiscal Service - 26

C – Changes in Performance Measures

Performance Measure or 

Indicator

Change and Justification

1. Cost Per Government 

Agency Investment 

Services Transaction ($) 

(discontinue)

Budget Activity:

Accounting & Reporting

Fiscal Service will stop reporting this metric because the 

GAIS budget/business line no longer exists. GAIS combined 

with SDA, GWA and FIT to form the Accounting and 

Reporting budget/business line. As such, the specific cost per 

GAIS transaction no longer has value.

2. Cost Per Summary Debt 

Accounting Transaction 

($) (discontinue)

Budget Activity:

Accounting & Reporting

Fiscal Service will stop reporting this metric because the SDA 

budget/business line no longer exists. SDA combined with 

GAIS, GWA and FIT to form the Accounting and Reporting 

budget/business line. As such, the specific cost per SDA 

transaction no longer has value.

3. Percentage Summary 

Debt Accounting Reports 

Submitted Timely and 

Accurately (discontinue)

Budget Activity:

Accounting & Reporting

Fiscal Service will stop reporting this metric because the 

information reported here is a subset of the information 

reported in the Government-wide accounting reports.

Specifically, the information being reported here is included 

in the Daily Treasury Statement (DTS) and Monthly Treasury 

Statement (MTS), both of which are important , public facing 

accounting reports that provide significant value to the public.

These reports, along with the Monthly Statement of the Public 

Debt (MSPD), will still be measured as part of the 

"Percentage of Government-wide accounting reports issued 

timely" performance measure.

4. Collect and disburse 

interest/principal payment 

amounts for GAIS 

investments/ borrowings 

timely and accurately 

(discontinue)

Budget Activity:

Accounting & Reporting

Fiscal Service will stop reporting this metric because these 

payments are not a complete picture of payments on the debt 

outstanding and do not provide a holistic look of the debt 

environment. 
Fiscal Service - 27

Performance Measure or 

Indicator

Change and Justification

5. Percentage of auctions 

successfully completed by 

the scheduled close [%] 

(new)

Budget Activity:

Wholesale Securities Services

“Successfully completed by” measures the expectation that 

auctions must be completed on or before the scheduled close 

date. Efforts have been made to increase auction resiliency 

and decrease preventable factors from affecting the close of an 

auction. Excluded are instances where the auction close date 

is moved by the Department for policy reasons. 

“Scheduled close” is defined as the auction date on the 

announcement. The press releases posted on 

TreasuryDirect.gov provide the scheduled auction close and 

the actual auction close. 

With the publication of the Treasury Strategic Plan for FY 2018-2022, Treasury will work this 

year to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 budget.
Fiscal Service - 28

Section III – Additional Information

A – Summary of Capital Investments

Fiscal Service leads the way for responsible, effective Government through commitment to 

cutting-edge technologies, service, efficient operations, sharing of best practices, and openness to 

change in order to meet the operating needs of the Federal Government. Fiscal Service 

systematically analyzes the demand for its services, considers effective methods for delivery, and 

identifies the broad asset implications through sound governance and investment management.

Effective Investment Governance

Fiscal Service Governance and Capital Planning and Investment Control programs ensure the 

selection/re-selection, comparison, and prioritization of the most effective Information 

Technology (IT) investments to support the mission and long range plans for Fiscal Service and 

Treasury. These programs also ensure the IT investment portfolio is well managed, cost 

effective, and achieving intended results through monthly tracking and progress reports. A 

monthly investment health assessment of cost, schedule, operational performance, and risk is in 

place in addition to a formal TechStat process that engages appropriate senior level officials for 

insight and successful remediation of significant issues or risks.

Effective Project Execution

Fiscal Service has a disciplined and consistent approach to project management (PM) as 

facilitated through a bureau-wide project management program that manages PM standards, 

procedures, and training. In addition, a standing monthly project management community of 

practice is in place providing practitioners the opportunity for collaboration and continuous 

learning of creative problem solving/solution design related to practical lessons learned. Each IT 

investment has a dedicated program manager and a fully staffed integrated program team. The 

systems that support each investment are enhanced using iterative development techniques.

Enterprise Architecture Services

Enterprise Architecture (EA) services ensure that Fiscal Service applies a common language and 

framework to describe and analyze investments. Fiscal Service’s EA program is designed to 

facilitate cross-agency analysis of capabilities, knowledge, processes, and relationships to apply 

evidence-based techniques, identify duplicative investments, discover goals and opportunities for 

collaboration with other agencies, and establish a line-of-sight from the highest level strategic 

goals to the infrastructure that enables the achievement of those goals. The value of EA services 

is to facilitate planning by documenting where Fiscal Service is currently and determining what 

the bureau should look like in the future so that it can make plans to transition from current state 

to future state. The planning is enabled by a holistic suite of integrated services that incorporates 

business, data, technical, and security architecture perspectives.

Risk Management

The nature of Fiscal Service’s work requires effective risk management and high levels of 

performance to ensure the bureau maintains operational excellence while seeking innovative 

solutions to improve efficiencies and transform financial management and the delivery of shared 

services in the Federal Government. As such, Fiscal Service has established an Enterprise Risk 

Management (ERM) office to promote a common understanding and approach to risk 
Fiscal Service - 29

management and strengthen organizational capabilities to recognize, assess, and address risks 

that could disrupt the successful achievement of strategic objectives. Through the development 

and issuance of an ERM framework, policies, guidance, and tools, the bureau incorporates risk 

management practices in decision making processes such as strategic and tactical planning, 

workforce planning, capital investment planning, and budget formulation. Fiscal Service will 

continue to communicate the importance of effective risk management to all employees.

Cybersecurity

Fiscal Service has a multi-faceted mission that promotes financial integrity and operational 

efficiency across the Federal Government. As such, protecting the information and technology 

resources that support the bureau’s mission are critically important. Financial integrity and 

operational efficiency are accomplished by effective, coordinated management of security risks 

and incidents that ensure the confidentiality, integrity, and availability of the bureau’s systems 

are maintained. Fiscal Service employs an in depth defense strategy to protect against, detect, 

and respond to anomalies in the bureau’s network and systems. In addition, Enterprise 

Cybersecurity ensures Fiscal Service information technology resources are in compliance with 

the National Institute of Standards and Technology security standards and satisfies annual 

security audit requirements. Furthermore, Fiscal Service is responsible for a number of 

Treasury’s High Value Assets and will work with the Treasury Chief Information Office to 

identify appropriate cybersecurity initiatives that most effectively leverage the funds requested in 

the Cybersecurity Enhancement Account.

A summary of capital investment resources, including major IT and non-technology investments, 

can be viewed and downloaded here: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

Office of Financial Stability

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
OFS - 2

Table of Contents

Section I – Purpose........................................................................................................................ 3

A – Mission Statement................................................................................................................ 3

1.1 - Program Account Summary ............................................................................................... 3

1.3 – Program Disbursement, Repayments, and Cost/Savings................................................... 4

B – Vision, Priorities and Context.............................................................................................. 4

C - Credit Reform Account Description ..................................................................................... 6

1.4 – Budget Adjustments Table................................................................................................. 7

D – Budget Increases and Decreases Description....................................................................... 7

1.5 – Operating Levels Table...................................................................................................... 8

E – Appropriations Language and Explanation of Changes....................................................... 8

F – Legislative Proposals............................................................................................................ 8

Section II - Annual Performance Plan and Report.................................................................. 10

A – Strategic Alignment ........................................................................................................... 10

B – Budget and Performance by Budget Activity .................................................................... 11

C – Operational Goals............................................................................................................... 12

Section III - Additional Information......................................................................................... 13

A – Summary of Capital Investments....................................................................................... 13
OFS - 3

Section I – Purpose

A – Mission Statement

A central part of the response to the 2008 financial crisis was the implementation of the Troubled 

Asset Relief Program (TARP), which was established in the fall of 2008 under the Emergency 

Economic Stabilization Act of 2008 (EESA) (P.L. 110-343) within the Office of Domestic 

Finance at the U.S. Department of the Treasury (Treasury). TARP was created to restore the 

liquidity and stability of the financial system, and it is administered by the Office of Financial 

Stability (OFS).

Since late 2010, OFS has made significant progress in winding down TARP investment 

programs and in recovering OFS’s outstanding investments. OFS continues to operate a housing 

program under TARP to help struggling families avoid foreclosure, but in 2016 began to wind

down the largest TARP housing program. As of November 30, 2017, OFS has recovered 97

percent of the $438.5 billion in total program funds disbursed under TARP, as well as an 

additional $17.6 billion from Treasury’s equity in AIG. When all of Treasury’s AIG investments 

are included, the amount recovered is greater than the funds disbursed by more than $4.0 billion.

1.1 - Program Account Summary

Dollars in Thousands

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated Estimated Change % Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Obligations

Equity Program Account 5,596 0 0 0 0.00%

Housing Account 0 11 0 (11) -100.00%

TARP Account 9,656 0 0 0 0.00%

TARP Administrative Account 103,578 78,608 63,065 (15,543) -19.77%

TARP Downward Reestimate Receipt 

Account (90,377) (14,586) 0 14,586 100.00%

Total Obligations $28,453 $64,033 $63,065 ($968) -1.51%

Budget Authority

Equity Program Account 5,596 0 0 0 0.00%

Housing Account 0 11 0 (11) -100.00%

TARP Account 9,656 0 0 0 0.00%

TARP Administrative Account 122,457 78,608 63,065 (15,543) -19.77%

TARP Downward Reestimate Receipt 

Account (90,377) (14,586) 0 14,586 100.00%

Total Budget Authority $47,332 $64,033 $63,065 ($968) -1.51%

Outlays

Equity Program Account 5,596 0 0 0 0.00%

Housing Account 4,130,820 2,431,993 1,573,463 (858,530) -35.30%

TARP Account 9,656 0 0 0 0.00%

TARP Administrative Account 115,622 117,000 66,173 (50,827) -43.44%

TARP Downward Reestimate Receipt 

Account (90,377) (14,586) 0 14,586 100.00%

Total Outlays $4,171,317 $2,534,407 $1,639,636 ($894,771) -35.30%

FTE 52 34 24 -10 -29.41%
OFS - 4

1.2 – Financing Account Summary

Dollars in Thousands

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated Estimated Change % Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

TARP Direct Loans

Obligations 2,188 5,154 0 (5,154) -100.00%

Collections 14,984 0 0 0 0.00%

Financing Authority (net) (9,656) 0 0 0 0.00%

Financing Disbursements (net) (12,796) 5,154 0 (5,154) -100.00%

Equity Purchases

Obligations 95,647 11,962 522 (11,440) -95.64%

Collections 420,863 84,368 3,117 (81,251) -96.31%

Financing Authority (net) (305,000) (82,348) (2,490) 79,857 -96.98%

Financing Disbursements (net) (325,216) (72,406) (2,595) 69,811 -96.42%

Housing

Obligations 3,278 3,003 1,184 (1,819) -60.57%

Collections 192 55 22 (33) -60.00%

Financing Authority (net) 0 0 0 0 0.00%

Financing Disbursements (net) 3,086 2,948 1,162 (1,786) -60.58%

1.3 – Program Disbursement, Repayments, and Cost/Savings

Dollars in Billions

Cumulative 

Obligated

(as of 

11/30/2017)

Cumulative 

Disbursed

(as of 

11/30/2017)

Cumulative 

Outstanding 

(as of 

11/30/2017)

Total 

Cumulative 

Income (as 

of 

11/30/2017)

Total Cash 

Back (as of 

11/30/2017)

Total 

Estimated 

Life Costs 

(as of 

11/30/2017)

Bank Support Programs 250.5 245.1 0.1 35.7 275.5 (24.3)

Credit Market Programs 19.1 19.1 0.0 4.6 23.6 (3.3)

AIG Investment Program (AIG) 67.8 67.8 0.0 1.0 55.3 15.2 *

Automotive Industry Financing 

Program 79.7 79.7 0.0 7.4 70.5 12.2

Treasury Housing Programs 37.4 26.8 NA NA 0.0 32.5

Total $454.5 $438.5 $0.1 $48.6 $425.0 $32.3

Additional AIG Common Shares 

Held by Treasury 0 0 0 17.6 17.6 (17.6) *

Total for Programs and Shares $454.5 $438.5 $0.1 $66.2 $442.5 $14.7

*If all Treasury AIG Investments are combined, Treasury currently estimates a net gain of nearly $2.4 billion on those shares.

B – Vision, Priorities and Context

TARP was created by EESA in October 2008 as part of a broad-based federal response to the 

financial crisis. The purposes of EESA were —

(1) to immediately provide authority and facilities that the Secretary of the Treasury could use to 

restore liquidity and stability to the financial system of the United States; and

(2) to ensure that such authority and facilities were provided in a manner that would —

(A) protect home values, college funds, retirement accounts, and life savings;

(B) preserve homeownership and promote jobs and economic growth;

(C) maximize overall returns to the taxpayers of the United States; and

(D) provide public accountability for the exercise of such authority.
OFS - 5

EESA vested authority in the Secretary of the Treasury to “purchase, and to make and fund 

commitments to purchase, troubled assets from any financial institution, on such terms and 

conditions as are determined by the Secretary.” This program supports the Department’s goal of 

financial stewardship. 

As a result of improved financial conditions and careful stewardship of the program, the ultimate 

cost to taxpayers of TARP investments is estimated to be significantly lower than initially 

expected. In Fiscal Year (FY) 2009, the program was projected to cost $341 billion, but it is 

now estimated to cost only $32.3 billion (of which -$0.2 billion relates to investments and

$32.5 billion relates to housing programs that do not require repayments by recipients) as of 

November 30, 2017. Lifetime costs are projected at $14.7 billion with the inclusion of receipts 

from Treasury’s sale of additional AIG common stock.

*Includes $17.6 billion in proceeds from additional Treasury AIG shares

During FY2018 and FY 2019, OFS’s priority is to continue the responsible wind-down of all 

TARP programs.

OFS Administrative Expenses

The authority for OFS’s administrative funding is provided in section 118 of EESA. In 

FY 2018, OFS plans to obligate no more than $79 million and use no more than 34 Full-Time 

Equivalent (FTE) employees. These levels are lower than previously estimated due to the faster 

than anticipated wind-down of TARP’s investment programs and the continued wind-down of 

the Making Home Affordable (MHA) program. In FY 2019, OFS plans to obligate $63 million 

and use no more than 24 FTE employees, a decrease of approximately $16 million and 10 FTE

employees from the current FY 2018 estimates, to fund the management, maintenance and 

continued wind-down of the TARP housing programs and the disposition of OFS’s remaining

investments.

$341.0

$124.1

$77.7

$57.3 $42.1

$22.7* $19.9* $19.7* $16.9* $14.7*

0

50

100

150

200

250

300

350

400

May-2009 Sep-2010 Sep-2012 Sep-2014 Sep-2016

Cost (in billions)

Date

Estimates of Total Lifetime Costs of TARP

Have Declined Over Time
OFS - 6

C - Credit Reform Account Description

Section 123 of EESA requires the cost of TARP programs to be calculated using the methods 

required by the Federal Credit Reform Act of 1990 (“credit reform”). In addition to the OFS 

Administrative Account, the organization manages six accounts to comply with the credit reform 

accounting requirements: (1) the TARP Equity Purchase Program Account; (2) the TARP 

Equity Purchase Financing Account (EPFA); (3) the TARP Housing Programs Account; (4) the 

TARP Housing Programs, Letter of Credit (LOC) Financing Account; (5) the TARP Program 

Account; and (6) the TARP Direct Loan Financing Account (DLFA). 

Account Descriptions

TARP Equity Purchase Program Account: The TARP Equity Purchase Program Account 

records the subsidy costs (cost to the government) associated with federal equity injections into 

qualifying financial institutions. Subsidy costs are calculated on a net present value basis. 

TARP Equity Purchase Financing Account (EPFA): The TARP EPFA is a non-budgetary 

account that records all financial transactions to and from the government resulting from equity 

purchases. The EPFA primarily tracks each cohort year’s purchase activity (dividend payments, 

the exercise of warrants, Treasury borrowings, interest paid to or received from Treasury, etc.)

and is not included in the budget totals when calculating total government spending.

TARP Housing Programs Account: The TARP Housing Programs Account records the subsidy 

costs and cash outlays associated with Treasury’s housing programs under TARP. The MHA 

and Hardest Hit Fund housing programs are recorded on a cash basis, and the Federal Housing 

Administration (FHA) Short-Refinance Program is subject to credit reform accounting 

requirements, whereby its subsidy cost is calculated on a net present value basis. 

TARP Housing Programs, LOC Financing Account: The TARP Housing Programs, LOC

Financing Account is a non-budgetary account that records all financial transactions to and from 

the government resulting from OFS’s FHA Short-Refinance Program. Like other financing 

accounts, its primary purpose is the financial tracking of each cohort year’s loan activity. It is 

not included in the budget totals.

TARP Program Account: The TARP Program Account records the subsidy costs associated with 

direct loans obligated to qualifying institutions. Subsidy costs are calculated on a net present

value basis. 

TARP DLFA: The TARP DLFA is a non-budgetary account that records all financial 

transactions to and from the government resulting from direct loans. Like EPFA, its primary 

purpose is the financial tracking of each cohort year’s loan activity. It is not included in the 

budget totals.

OFS Administrative Account: This account provides for the administrative costs of OFS.
OFS - 7

1.4 – Budget Adjustments Table

Dollars in Thousands

Office of Financial Stability FTE Amount

FY 2018 Estimated 34 $78,608

Maintaining Current Levels (MCLs): - 1,464

Pay Annualization - 6

Non-Pay - 1,458 

Total FY 2019 Base 34 $80,072

Program Changes:

Program Decreases: 

(10)

 

(17,007)

Housing Program Support -

 

(10,449)

Maintenance and Disposition of 

Assets - (230)

OFS Salaries and Benefits 

(10)

 

(1,590)

Organizational Support -

 

(4,739)

Total FY 2019 Estimated 24 $63,065

D – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$1,464,000 / +0 FTE

Pay Annualization +$6,000 / +0 FTE

Funds are required for annualization of the January 2018 pay raise.

Non-Pay +$1,458,000 / +0 FTE 

Funds are required for non-labor costs such as travel, contracts, rent, supplies, and equipment.

Program Decreases .................................................................................-$17,007,000 / -10 FTE

Housing Program Support -$10,449,000 / +0 FTE 

Administrative and compliance functions will continue to wind down during FY 2018 and over 

time as programs close and no new assistance actions are provided and commitments are paid.

Maintenance and Disposition of Assets -$230,000 / +0 FTE 

During FY 2018, OFS will continue the disposition of its position in the remaining Capital 

Purchase Program (CPP) and Community Development Capital Initiative (CDCI) institutions. In 

FY 2019, OFS expects its portfolio to be composed mostly of CDCI institutions with a handful 

of CPP institutions.OFS Salaries and Benefits -$1,590,000 / -10 FTE 

Savings resulted from natural attrition and expiration of term appointments due to the winddown of various TARP programs.

Organizational Support -$4,739,000/ +0 FTE 

Administrative costs associated with managing OFS’s portfolio will decline over time as TARP 

winds down. However, many duties and responsibilities will remain and are not directly 

correlated to the volume of assets held by OFS. Many of these organizational support functions 

will be run in-house and relate to legislative and oversight-mandated reporting functions, as well 

as the management and maintenance of TARP’s housing programs.
OFS - 8

1.5 – Operating Levels Table

Dollars in Thousands

Office of Financial Stability FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 6,528 4,305 3,097

11.7 - Other Personnel Compensation 86 43 31

11.9 - Personnel Compensation (Total) 6,614 4,348 3,128 

12.0 - Personnel benefits 1,986 1,360 996

Total Personnel and Compensation Benefits $8,600 $5,708 $4,124 

21.0 - Travel and transportation of persons 77 51 36

23.0 - Rent, Communications and Utilities 2 4 4

25.1 - Advisory and assistance services 12,394 11,835 8,897

25.2 - Other services from non-Federal sources 69,709 49,622 39,645

25.3 - Other goods and services from Federal sources 12,447 11,064 10,061

26.0 - Supplies and materials 346 316 290

31.0 - Equipment 3 8 8

Total Non-Personnel $94,978 $72,900 $58,941 

Subtotal New Budgetary Resources $103,578 $78,608 $63,065 

FTE 52 

34 

 

24 

Table includes direct FTEs.

Totals may not foot due to rounding

E – Appropriations Language and Explanation of Changes

OFS does not receive discretionary appropriations from Congress. Therefore, no appropriations 

language is proposed.

F – Legislative Proposals

Treasury is seeking certain legislative changes related to OFS and TARP to reduce the frequency 

and necessity of several statutory reporting requirements that were established when TARP was 

created. Although these reporting requirements corresponded to the level of risk associated with 

a start-up entity in 2009, risk has dramatically decreased as programs have closed. OFS estimates 

that enacting the following legislative proposals would result in more than $2 million in annual 

savings in contracting cost and Government Accountability Office (GAO) reimbursements and 

would reduce OFS’s workload by 4 FTE employees per year. The remaining statutory 

requirements will continue to provide sufficient transparency during the wind-down of TARP.

Replace OFS’s stand-alone financial audit performed by GAO: Since inception, OFS has been 

required to undertake a stand-alone financial audit requiring significant resources. As the 

majority of programs have closed, the need for a stand-alone audit has diminished. As such, 

Treasury’s Office of the Inspector General could audit OFS’s financial operations under the 

Treasury-wide audit, similar to most other Treasury programs. 
OFS - 9

Sunset the Financial Stability Oversight Board (FinSOB): This interagency group meets 

monthly and reports quarterly. The group reviewed OFS’s program formulation and monitored

program performance. The need for the board’s oversight and reporting has diminished as no 

new OFS programs can be implemented, all major investments have been disposed, and the 

housing programs are in wind-down.

Change the frequency of the Section 105(a) report (“Congressional Monthly”): This 

performance report remains generally static from month-to-month. With most programs having 

closed, less frequent (quarterly) reporting is warranted.

Eliminate the Administrative Activity Report (“Obligation Report”): This quarterly report 

provides data on administrative obligations by OFS office and is required under the annual 

Treasury appropriations bill. OFS has been prudent in the use of administrative funds and has 

been reducing obligations by approximately 20 percent per year over the last 5 years. 
OFS - 10

Section II - Annual Performance Plan and Report

A – Strategic Alignment

OFS’s continued wind-down efforts align with Treasury’s strategic goal of financial stewardship, 

specifically Objective 4.1 (financial data access and use), by winding down sun-setting programs 

responsibly while maximizing the financial benefit to taxpayers.

Bank Support Programs

Capital Purchase Program (CPP): OFS created CPP, its largest program, in October 2008. OFS

provided a total of $204.9 billion in capital to 707 institutions in 48 states. During FY 2017, 

OFS continued to wind down remaining CPP investments through repayments by those 

institutions that were able to do so and restructuring investments in limited cases. As of 

November 30, 2017, CPP has generated $226.8 billion in recoveries for taxpayers with six

institutions remaining in the program, for a total of $48 million in investments outstanding.

Community Development Capital Initiative (CDCI): OFS created CDCI on February 3, 2010, to 

provide investments of capital to certified Community Development Financial Institutions

(CDFI) banks, thrifts, and credit unions. OFS invested $570 million in 84 CDFIs, of which 28 

institutions converted $363 million (including warrants) from CPP to CDCI. The initial dividend 

or interest rate was two percent. To encourage repayment, the dividend rate increases to nine 

percent after eight years. On August 1, 2016, Treasury – as part of its ongoing effort to wind

down TARP – offered participating CDCI institutions an opportunity to repurchase their 

outstanding securities owned by Treasury at fair value ahead of the dividend rate step-ups set to 

take place in 2018. By the end of January 2017, OFS completed 27 full and partial repurchases 

at fair value under the early repurchase option, for a total of $268 million in repayments. As of 

November 30, 2017, CDCI has generated $540 million in recoveries for taxpayers with 21

institutions remaining in the program, for a total of $68 million in investments outstanding. 

Housing Programs

OFS established several TARP housing programs, assisting millions of homeowners and 

introducing reforms for the mortgage servicing industry to facilitate mortgage modifications.

Making Home Affordable Program (MHA): In 2009, OFS launched MHA to help homeowners 

prevent avoidable foreclosures and strengthen the housing market. The cornerstone of MHA is 

the Home Affordable Modification Program (HAMP), which provides eligible homeowners the 

opportunity to reduce their monthly mortgage payments. In accordance with provisions of the 

Act, MHA terminated on December 31, 2016, except with respect to certain applications made 

before such date. MHA servicers were required to design policies and procedures to reasonably 

ensure that all MHA transactions were completed by December 1, 2017. As of November 30, 

2017, OFS had disbursed $18.2 billion out of a possible $27.8 billion under MHA.

Housing Finance Agency (HFA) Hardest Hit Fund (HHF): HHF was established in 2010 to 

provide targeted aid to homeowners in states hit hardest by the economic and housing market 

downturn by providing funding to state HFAs. The $7.6 billion initiative encompassed 18 states 

and the District of Columbia (D.C.). In December 2015, the Act granted Treasury authority to 
OFS - 11

make an additional $2.0 billion in commitments through the HHF. As of November 30, 2017,

OFS had disbursed $8.5 billion out of a possible $9.6 billion under the HFA Hardest Hit Fund.

FHA Short Refinance Program: OFS continues to support the FHA Short Refinance Program, 

which was intended to assist borrowers with negative equity. The program has seen limited 

participation. As such, OFS has incrementally reduced the LOC Facility supporting this program 

from an intial $8.0 billion to $27 million in FY 2017, which matches OFS’s maximum liability 

for loans covered by the program as of December 31, 2016, when the program ended for new 

refinances. As of November 30, 2017, the revised lifetime cost estimate for the program was

$17 million for outstanding refinanced loans.

Other Programs

Automotive Industry Financing Program (AIFP): OFS fully wound down AIFP during FY 2015, 

selling its remaining stake in Ally Financial. OFS disbursed $79.7 billion in loans and equity 

investments to the automotive industry through the AIFP. As of November 30, 2017, OFS had

collected $70.5 billion through sales, repayments, dividends, interest, recoveries, and other 

income. Recoveries from the bankruptcy liquidation of Old Chrysler and Old GM remain 

possible. 

All other TARP programs closed prior to FY 2016, including the Targeted Investment Program,

Asset Guarantee Program, Public-Private Investment Program, Term Asset-Backed Securities 

Loan Facility, Small Business Administration 7(a) Securities Purchase Program, and American 

International Group, Inc. Investment Program.

B – Budget and Performance by Budget Activity

The authority for OFS’s administrative funding is provided in section 118 of EESA. The 

administrative budget consists primarily of contracting and financial agent support costs 

associated with OFS’s ongoing implementation and management of the TARP housing programs 

and the management and disposition of OFS’s remaining investments. In addition, continuing 

organizational support, including information technology, facilities, legal, compliance, 

accounting, and human resources, will be needed to manage and wind down these ongoing 

initiatives. OFS’s senior management is responsible for performance on its operational goals.
OFS - 12

Performance Metrics and FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Indicators1 Actual Actual Actual Actual Target Actual Target Target

Clean Audit Opinion on TARP 

Financial Statements (ensure 

transparency of operations to the 

public) (1.0 = Yes)

1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Percentage of Congressional 

Constituent Correspondence 

Responses Completed within 10 

Business Days of Receipt3

100.0 92.0 50.0 66.8 100.0 87.5 100.0 N/A

Percentage of StatutorilyMandated Reports Submitted 

On-Time (ensure transparency 

of operations to the public)

80.0 99.0 100.0 94.7 100.0 96.3 100.0 100.0

Percentage of Customers 

Satisfied with 

FinancialStability.gov (Self 

Selected Respondents) (ensure 

transparency of operations to the 

public)

70.0 69.0 66.5 73.0 75.0 69.3 75.0 75.0

Percentage of FOIA Assignments 

On-Time or Less Than 30-Days 

Overdue (ensure transparency 

within the government) 2

N/A 15.0 13.0 56.6

33.0

85.0 33.0 66.0

Percentage of SIGTARP and 

GAO Oversight 

Recommendations Responded to 

On-Time (ensure transparency 

of operations to the public)

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

1

Items underlined are measures. Targets are provided only for measures.

 2The ‘Percentage of FOIA requests on-time or less than 30-days overdue’ was introduced in FY 2014 to best reflect reporting data.

 3The ‘Percentage of Congressional Constituent Correspondence Responses Completed within 10 Business Days of Receipt’ will be 

discontinued in FY 2019 due to low volume of actual correspondence received in FY 2016 and FY 2017.

C – Operational Goals

Complete the wind-down of TARP investment programs

The first operational goal for OFS is to complete the wind-down of TARP investment programs. 

Only two investment programs remain: CPP and CDCI. OFS is focused on recovering TARP 

funds in a manner that continues to promote the nation’s financial stability while maximizing 

returns on behalf of taxpayers. For CPP institutions, participating financial institutions may 

repay the funds they received at any time, with the approval of their regulators. OFS continues 

to work with CPP institutions to restructure certain investments that will allow them to exit 

TARP. As of November 30, 2017, OFS had $48 million in outstanding CPP investments and 

$68 million in outstanding CDCI investments.

Manage the wind-down of TARP housing programs while continuing to help struggling 

homeowners avoid foreclosure

OFS’s second operational goal is to manage the wind-down of the TARP housing programs 

while continuing to help struggling homeowners avoid foreclosure for those programs that 
OFS - 13

remain open. MHA statutorily sunset in December 2016 and MHA servicers were required to 

design policies and procedures to reasonably ensure that all MHA transactions were completed 

by December 1, 2017. Under this program, as of November 30, 2017, more than 1.7 million 

homeowners have secured permanent mortgage modifications. In addition, HHF provides 

funding to 18 states and D.C. to assist struggling homeowners. In FY 2017, state HFAs 

continued to adapt their programs to best meet borrower needs in evolving economic and 

housing markets. In FY 2018, several HHF states will begin the initial phases of wind-down for 

their programs. 

Minimize cost to taxpayers

The third operational goal of OFS is to minimize the cost of TARP to taxpayers by carefully 

managing the timely exit of these investments to reduce taxpayers’ exposure, returning TARP 

funds to reduce the federal debt, and continuing to replace government assistance with private 

capital in the financial system. OFS has taken a number of steps to dispose of outstanding 

investments in a manner that balances the need to exit these investments as quickly as practicable 

while maximizing taxpayer returns. OFS also takes steps to ensure that TARP recipients comply 

with any TARP-related statutory or contractual obligations such as executive compensation 

requirements and restrictions on dividend payments.

Continue to operate with the highest standards of transparency, accountability, and integrity

OFS’s final goal is to continue to operate with the highest standards of transparency, 

accountability, and integrity. OFS posts a variety of reports online that provide taxpayers with 

regular and comprehensive information about how TARP funds are spent, who received them 

and on what terms, and how much has been recovered to date. OFS also publishes the annual 

audited Agency Financial Report and continues to maintain productive working relationships 

with the three oversight bodies charged with auditing and reviewing TARP activities. 

Section III - Additional Information

A – Summary of Capital Investments

OFS uses Departmental Offices’ (DO) system and is part of DO’s capital investment strategy.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury 

Office of Financial Research 

Congressional Budget 

Justification and Annual 

Performance Report and Plan 

FY 2019 

 
OFR - 2 

Table of Contents 

Section I – Budget Request........................................................................................................... 3

A – Mission Statement ................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

C – Vision, Priorities, and Context ............................................................................................. 3

D – Budget Increases and Decreases Description ....................................................................... 5

1.3 – Operating Levels Table ...................................................................................................... 6

E – Appropriations Language and Explanation of Changes ....................................................... 6

F – Legislative Proposals ............................................................................................................ 6

Section II – Annual Performance Plan and Report ................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Data Center ........................................................................................................................... 7

2.1.1 – Data Center Budget and Performance Plan .................................................................... 8

C – Technology Center ............................................................................................................... 8

D – Research and Analysis Center .............................................................................................. 9

2.1.3 – Research and Analysis Center Budget and Performance Plan ...................................... 10

E – Operations and Support Services........................................................................................ 10

2.1.4 – Operations and Support Services Budget and Performance Plan ................................. 10
OFR - 3 

Section I – Budget Request __________ 

A – Mission Statement 

Promote financial stability by delivering high-quality financial data, standards, and analysis for 

the Financial Stability Oversight Council (FSOC or Council) and public.

B – Summary of the Request 

The Office of Financial Research (OFR) is estimating a fiscal year (FY) 2019 funding level of 

$75.271 million, which is nine percent below its FY 2018 estimated funding level. To align with 

the Administration’s initiative to improve government efficiency and effectiveness, OFR is 

implementing an organizational realignment effort to ensure appropriate structure for maximum 

efficiency. In addition, the Budget reflects continued reductions in OFR spending commensurate 

with the renewed fiscal discipline being applied across the Federal Government. The Budget 

also proposes to impose appropriate Congressional oversight of OFR functions by subjecting its 

activities to the normal appropriations process beginning in FY 2020. 

1.1 – Resource Detail Table

Dollars in Thousands 

1) The OFR is financed through assessments on certain bank holding companies and nonbank financial companies. See Treasury’s 

final rule and interim final rule governing the Assessments process: https://www.financialresearch.gov/strategybudget/files/final_rule_interim_final_rule.pdf

2) The funding for the first six months of operating expenses and 12 months of capital expenses are reflected in the unobligated 

balance line. This is because the first assessment covering the fiscal year beginning October 1 is actually collected on September 

15 of the prior fiscal year. This makes it appear as though large amounts of unobligated balances went unused, when in fact very 

little, if any, of those balances were from under execution. 

C – Vision, Priorities, and Context 

The OFR, or Office, resides within the Department of the Treasury (Treasury). In carrying out 

its mission, the OFR seeks to support achievement of a transparent, efficient, and stable financial 

system. The OFR’s work contributes to the efforts of the regulatory community, the Treasury, 

and Congress to make informed and comprehensive policies and take actions that will strengthen 

the financial system. In addition, the OFR is authorized to provide certain data to the regulatory 

community, Treasury, financial industry participants and the general public to increase market 

Office of Financial Research

Budgetary Resources

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections Column1 Column2 Column3 Column4 Column5 Column6 Column7 Column8 Column9 Column10

Assessments1 $77,613 $62,995 $59,748 ($3,247) NA -5.15%

Interest $554 $421 $383 ($38) NA -9.00%

Recovery of Prior Year Paid Obligations $68 $63 $60 ($4) NA -5.56%

Recovery of Prior Year Unpaid Obligations $2,330 $3,331 $3,656 $326 NA 9.78%

Restoration of Sequestration Reduction2 $6,262 $5,394 $4,185 ($1,208) NA -22.40%

Unobligated Balances from Prior Years2 $71,250 $63,477 $48,524 ($14,953) NA -23.56%

Total Revenue/Offsetting Collections $158,077 $135,680 $116,556 ($19,124) NA -14.09%

Expenses/Obligations Column1 16Amt 17FTE 17Amt 18FTE 18Amt ChgFTE ChgAmt pctFTE pctAmt

Data Center 44 $17,833 42 $16,348 35 $15,346 (7) ($1,002) -16.67% -6.13%

Technology Center 63 $29,235 53 $25,935 37 $22,325 (16) ($3,610) -30.19% -13.92%

Research Center 53 $15,605 44 $15,185 35 $13,465 (9) ($1,720) -20.45% -11.33%

Operations and Support Services 59 $26,533 51 $25,503 33 $24,135 (18) ($1,368) -35.29% -5.36%

Total Expenses/Obligations 219 $89,206 190 $82,971 140 $75,271 (50) ($7,700) -26.32% -9.28%

Sequestration Reduction ($5,394) ($4,185) $0 $4,185

Net Results $63,477 $48,524 $41,285 ($7,239) -14.92%

FY 2017 FY 2018 FY 2018 to FY 2019

Actual Estimated Estimated Change % Change

FY 2019
OFR - 4 

transparency and facilitate monitoring of and research on the financial system. The Office 

monitors the financial environment for the emergence of new vulnerabilities and migration of 

financial activity that could threaten financial stability. The Office takes an objective position to 

evaluate macroprudential policies, advocate for needed data initiatives, help the regulatory 

community enhance its peripheral vision, and produce work that may have previously been 

beyond the reach of individual regulatory agencies and other important stakeholders. 

In the OFR Strategic Plan for FY 2015-2019, the OFR established three strategic goals that 

reflect its primary functions in data and analysis, data standardization, and research.1

 The plan 

will continue to guide the Office’s work through FY 2019 and will support the decisions made 

about resources needed to implement those strategies. The three goals are: 

1. The OFR is an essential source of data and analysis for monitoring threats to financial 

stability.

Key objectives of this goal include: 

 The OFR’s monitoring tools and analyses are widely used and critical to assessing 

financial stability. 

 Data used to monitor financial stability are comprehensive, reliable, and accessible to 

policy makers and the public through the OFR. 

 Data providers and the public trust, acknowledge, and recognize that OFR data are 

protected and secure. 

2. Standards that improve the quality and utility of financial data are identified and 

adopted.

Key objectives of this goal include: 

 Recognition of the need for standards by policy makers and industry. 

 The OFR is the source of expert knowledge needed to develop and implement types and 

formats of data reported and collected. 

 Financial data standards that create efficiencies and facilitate analysis are widely used.

3. Leading edge research improves financial stability monitoring and the scope and 

quality of financial data, and informs policy and risk management.

Key objectives of this goal include: 

 The OFR is the recognized center for objective, innovative research on financial stability. 

 OFR research is widely cited and used to improve policy making, risk management, 

financial stability, and the scope and quality of financial data. 

 

1

 See the OFR Strategic Plan for FY 2015-2019: 

http://financialresearch.gov/strategy-budget/files/Office-of-Financial-Research-Strategic-Plan-2015-2019.pdf. 
OFR - 5 

OFR priorities for FY 2018 and FY 2019 that support the three strategic goals include: 1. Collection of bi-lateral repurchase (repo) data that will support both expanded monitoring of 

the repo market, and calculation of the Secured Overnight Funding Rate planned to be used 

as an alternative to LIBOR (US dollar London Interbank Offered Rate) 

2. Publishing the OFR Annual Report 

3. Advancing industry-wide data standards development and use 

4. Implement the Financial System Vulnerability Monitor and Financial Stress Index to monitor 

threats and vulnerabilities in the financial system 

1.2 – Budget Adjustments Table 

Dollars in Thousands 

Office of Financial Research FTE Amount 

FY 2018 Estimated 190 $82,971 

Changes to Base: 

Total FY 2019 Base 190 $82,971 

Program Changes: 

Program Decreases (50) ($7,700) 

Personnel (50) ($6,571) 

Non-Personnel 0 ($1,129) 

Total FY 2019 Estimated 140 $75,271 

D – Budget Increases and Decreases Description 

Program Decreases........................................................................-$7,700,000 

Personnel -$6,571,000 / -50 FTE 

To align with the Administration’s initiative to improve Government efficiency and 

effectiveness, the OFR is implementing a staffing streamlining effort to ensure appropriate levels 

for maximum efficiency. This effort will begin in FY 2018 with full implementation occurring 

in FY 2019. 

Non-Personnel -$1,129,000 / 0 FTE 

The office proposes to continue decreasing administrative costs, reduce supplies and equipment 

purchases, and re-organize management functions. 
OFR - 6 

1.3 – Operating Levels Table

Dollars in Thousands 

Office of Financial Research FY 2017 FY 2018 FY 2019 

Object Classification Actual Estimated Estimated 

 

11.1 - Full-time permanent 32,701 30,146 26,035 

11.3 - Other than full-time permanent 563 515 509 

11.5 - Other personnel compensation 578 555 519 

11.9 - Total personnel compensation 33,842 31,216 27,063 

12.0 - Personnel benefits 12,988 11,579 9,161 

Total Personnel and Compensation Benefits $46,830 $42,795 $36,224 

21.0 - Travel and transportation of persons 447 356 299 

23.3 - Communication, utilities, and misc charges 179 115 110 

24.0 - Printing and reproduction 22 24 8 

25.1 - Advisory and assistance services 10,897 8,446 8,403 

25.2 - Other services from non-Federal sources 939 913 755 

25.3 - Other goods and services from Federal sources 19,915 21,039 20,193 

26.0 - Supplies and materials 6,508 5,748 5,776 

31.0 - Equipment 3,469 3,535 3,503 

Total Non-Personnel $42,376 $40,176 $39,047 

Subtotal New Budgetary Resources $89,206 $82,971 $75,271 

Budget Activities: Column1 Column2 Column3 

 Data Center 17,833 16,348 15,346 

 Technology Center 29,235 25,935 22,325 

 Research Center 15,605 15,185 13,465 

 Operations and Support Services 26,533 25,503 24,135 

Total Budgetary Resources $89,206 $82,971 $75,271 

 

FTE 219 190 140 

1) Personnel compensation and benefits include direct OFR staff members only. Object Classification 25.3, 

“Other goods and services from Federal sources,” and expenditures of “Operations and Support Services” include reimbursable 

support received from Treasury’s Departmental Offices; personnel benefits services from the 

Office of the Comptroller of the Currency; and services from Treasury’s Bureau of the Fiscal Service Administrative Resource 

Center, including human resource services, procurement services, travel, and financial management services. 

E – Appropriations Language and Explanation of Changes

The OFR receives no appropriations from Congress. 

F – Legislative Proposals 

The Budget proposes to impose appropriate Congressional oversight of OFR functions by 

subjecting its activities to the normal appropriations process beginning in FY 2020. 
OFR - 7 

Section II – Annual Performance Plan and Report________________________ 

A – Strategic Alignment 

The OFR seeks to promote financial stability by delivering high-quality financial data standards 

and analysis to the FSOC and the public. This mission is in direct alignment with Treasury’s 

Strategic Plan for FY 2018-2022, including all objectives under the following goals: 

 Goal 1 - Boost U.S. Economic Growth 

 Goal 2 - Promote Financial Stability 

With the publication of the Treasury Strategic Plan for FY 2018-2022, Treasury will work in 

FY 2018 to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 Budget. 

The OFR assesses its performance measures annually and revises them, if appropriate, to ensure 

their continued usefulness for management decision-making and improved results. 

OFR’s efforts, working with the FSOC, Treasury, and other important stakeholders will help 

drive toward the vision of a stable, transparent, and efficient financial system. 

Key areas of focus will be in monitoring threats and vulnerabilities in the financial system 

through OFR’s Financial System Vulnerability Monitor and Financial Stress Index 

Other focus areas include research and policy analysis that promote informed decision-making 

for policies that balance the need of stability with the need for efficient and effective regulation, 

supporting Treasury’s objective of Strong Economic Fundamentals. In all of these areas, high 

quality data are essential. The OFR will continue its efforts to promote, identify, and implement 

financial data standards to improve the quality, scope, and accessibility of financial data. Two 

important initiatives will be the permanent bi-lateral repurchase (repo) agreement data collection 

and supporting the development of an alternative to the London Interbank Offered Rate (LIBOR) 

reference rate. OFR is helping to spearhead both of these efforts. 

Finally, the OFR will continue to publish its statutorily-mandated Annual Report that assesses 

the state of the U.S. financial system. The OFR also plans to publish the annual Financial 

Stability Report that provides detailed analysis to supplement the Annual Report. 

B – Data Center 

($15,346,000 from Assessments):

As required by statute, the Data Center, on behalf of the Council, collects, validates, and 

maintains all data necessary to carry out the Center’s duties. Under this mandate, the Data 

Center works to increase efficiency in data acquisition and management; reduce redundant 

reporting requirements across the regulatory system (including through more effective datasharing arrangements); and to ensure the security of sensitive data. 

 
OFR - 8 

Data Standards

One of the OFR’s strategic goals is to identify and adopt standards that improve the quality and 

utility of financial data. Standards for financial data will benefit regulators and financial market 

participants by making data aggregation easier, improving analysis, and reducing data collection 

costs. The OFR monitors progress through the following key performance indicators: 

 Number of Legal Entity Identifiers (LEIs) Issued Cumulatively in the United States and 

Internationally – This indicator tracks the progress over time in industry’s use of the LEI. 

 Number of Times That Financial Data Standards are Incorporated in Rules and Regulations – 

This data point serves as an indicator of regulators’ awareness of the importance of data 

standards and the extent to which data standards are being adopted in rules and regulations. 

2.1.1 – Data Center Budget and Performance Plan

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Estimated Estimated 

Expense/Obligations $37,619 $46,940 $17,240 $16,477 $17,833 $16,348 $15,346 

Budget Activity Total $37,619 $46,940 $17,240 $16,477 $17,833 $19,157 $16,865 

FTE 66 90 51 37 44 42 35 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Number of LEIs Issued 

Cumulatively in the United 

States and Internationally

N/A N/A 395,861 395,861 587,941 I I I

Number of Times That Data 

Standards Related are 

Incorporated in Rules and 

Regulations

N/A N/A 2 9 4 4 I I

Key: I - Indicator

C – Technology Center 

($22,325,000 from Assessments):

The Technology Center provides mission-critical analytic services to support the OFR’s work 

with complex, sensitive financial data and the Office’s research and analysis activities. In 

addition, the Technology Center is responsible for safeguarding data and systems, and 

managing all Information Technology capabilities within the OFR. These responsibilities 

include computing and analytic platforms, software, telecommunications, client applications, 

and office automation solutions. 

The OFR has internal performance measures for this activity, however they are not public 

because the measures contain sensitive information. 

 
OFR - 9 

2.1.2 – Technology Center Budget and Performance Plan 

Dollars in Thousands 

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Estimated Estimated 

Column1 Column32 Column4 Column5 Column6 Column7 Column8 Column2 

Expense/Obligations $0 $0 $30,970 $32,132 $29,235 $25,935 $22,325 

Budget Activity Total $0 $0 $30,970 $32,132 $29,235 $25,935 $22,325 

FTE 0 0 51 61 63 53 37 

D – Research and Analysis Center 

($13,465,000 from Assessments): 

The Research and Analysis Center conducts research and analysis on systemic risk, 

macroprudential policy, and financial stability. Working closely with the FSOC, Treasury, other 

key stakeholders, the Financial Research Advisory Council, and experts from around the globe, 

the OFR collaboratively identifies important issues that need to be addressed and focuses its 

resources on delivering impactful results in areas such as a LIBOR alternative and a multi-factor 

approach for determining bank regulatory thresholds. 

Leading Edge Research and Monitoring Threats to Financial Stability

The Research and Analysis Center contributes to the achievement of two of the OFR’s three 

strategic goals: (1) Leading edge research improves financial stability monitoring and the scope 

and quality of financial data, and informs policy and risk management; and (2) The OFR is an 

essential source of data and analysis for monitoring threats to financial stability. There are two 

output measures for this goal. The Research and Analysis measures noted below are planned to 

be replaced in FY 2018 and FY 2019 with new metrics that better capture stakeholder needs and 

better reflect mission accomplishment in this area. 

 

 Number of Research and Analysis Publications (working papers, briefs, staff discussion 

papers, and reports) Made Public – This measure tracks the OFR’s progress in increasing the 

size of its research portfolio available to policy makers, regulators, industry, academics, and 

the public. The measure includes a wide range of published research products, from the 

OFR’s comprehensive annual reports to the more frequently issued working papers. This 

measure was formerly called, “Number of research and analysis products made public.” 

 Financial Stability Monitoring Services and Products Provided – This measure tracks the 

OFR’s output of monitoring tools and other analyses of threats to financial stability. It 

includes tools and information made available to the general public, as well as those 

produced for the Council or Council member agencies. The metric includes tools and 

information such as number of monitor editions, policy analyses, dashboards, and other 

analyses provided directly to the public or to the Financial Stability Oversight Council in 

response to their requests. 
OFR - 10 

2.1.3 – Research and Analysis Center Budget and Performance Plan 

Dollars in Thousands 

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Estimated Estimated 

Expense/Obligations $4,733 $7,700 $10,396 $14,239 $15,605 $15,185 $13,465 

Budget Activity Total $4,733 $7,700 $10,396 $14,239 $15,605 $17,719 $11,573 

FTE 26 33 43 54 53 44 35 

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Number of Research and 

Analysis Publications Made 

Public Year-to-Date

10 15 11 34 20 20 20

 DISC

Financial Stability Monitoring 

Services and Products 

Provided

N/A N/A N/A N/A 33 25 DISC DISC

Number of Monitor Editions, 

Policy Analyses, and 

Dashboards Produced for 

Monitoring Threats to 

Financial Stability

N/A N/A 21 34 DISC DISC DISC DISC

Key: DISC - Discontinued

E – Operations and Support Services 

($24,135,000 from Assessments):

The category “Operations and Support Services” contains the activities of the Director’s Office, 

Operations, External Affairs, and Chief Counsel. The category includes support provided 

through a shared services model and reimbursable arrangements with Treasury’s Departmental 

Offices; personnel benefits services from the Office of the Comptroller of the Currency; and 

services from Treasury’s Bureau of the Fiscal Service Administrative Resource Center, including 

services related to human resources, procurement, travel, and financial management. 

2.1.4 – Operations and Support Services Budget and Performance Plan 

Dollars in Thousands 

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 

 Actual Actual Actual Actual Actual Estimated Estimated 

Column1 Column32 Column4 Column5 Column6 Column7 Column8 Column2 

Expense/Obligations $22,953 $26,626 $26,110 $32,026 $26,533 $25,503 $24,135 

Budget Activity Total $22,953 $26,626 $26,110 $32,026 $26,533 $25,503 $24,135 

FTE 35 43 49 56 59 51 33 

The OFR has no capital investments. Capital investments that support OFR are included in the 

Departmental Offices plan. A summary of capital investment resources, including major 

information technology and non-technology investments can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website contains a digital copy of this document.

Department of the Treasury

Financial Stability Oversight 

Council

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
FSOC - 2

Table of Contents

Section I – Budget Request................................................................................................................3

A – Mission Statement .....................................................................................................................3

B – Summary of the Request............................................................................................................3

1.1 – Resource Detail Table .............................................................................................................3

1.2 – Budget Adjustments Table ......................................................................................................5

D – Budget Increases and Decreases Description............................................................................5

1.3 – Operating Levels Table ...........................................................................................................6

E – Appropriations Language and Explanation of Changes ............................................................6

F – Legislative Proposals .................................................................................................................6

Section II – Annual Performance Plan and Report ........................................................................7

A – Strategic Alignment...................................................................................................................7

B – Financial Stability Oversight Council .......................................................................................7

2.1.1 – Financial Stability Oversight Council Annual Performance and Report .............................7

C – FDIC Reimbursement................................................................................................................7

2.1.2 – FDIC Reimbursement Annual Performance Plan and Report .............................................7
FSOC - 3

Section I – Budget Request

A – Mission Statement

To identify risks to the financial stability of the United States, to promote market discipline, and to 

respond to emerging threats to the stability of the U.S. financial system.

B – Summary of the Request

The Financial Stability Oversight Council (FSOC or Council) is estimating an FY 2019 funding

level of $11.054 million, which represents a straight-line of its FY 2018 estimated funding 

level. This request includes $6.892 million for the FSOC Secretariat and the Office of the 

Independent Member with Insurance Expertise, and $4.162 million to reimburse the Federal 

Deposit Insurance Corporation (FDIC) for certain expenses as required by law. The Budget also 

proposes to impose appropriate Congressional oversight of Council functions by subjecting its

activities to the normal appropriations process beginning in FY 2020.

1.1 – Resource Detail Table

Dollars in Thousands

Financial Stability Oversight Council FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Budgetary Resources Actual Estimated Estimated Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments1 $10,584 $8,590 $8,147 ($443) -5.15%

Interest $75 $57 $52 ($5) -9.00%

Recovery of Prior Year Paid Obligations $9 $9 $8 ($0) -5.56%

Recovery of Prior Year Unpaid Obligations $458 $454 $499 $44 9.78%

Restoration of Sequestration Reduction $854 $735 $571 ($165) -22.40%

Unobligated Balances from Prior Years2 $9,716 $8,839 $6,831 ($2,008) -22.72%

Total Revenue/Offsetting Collections $21,696 $18,685 $16,108 ($2,577) -13.79%

Expenses/Obligations

FSOC 17 $5,655 18 $6,892 18 $6,892 0 $0 0.00% 0.00%

FDIC 0 $5,126 0 $4,162 0 $4,162 0 $0 0.00% 0.00%

Total Expenses/Obligations 17 $10,781 18 $11,054 18 $11,054 0 $0 0.00% 0.00%

Sequestration Rescission ($735) ($571) $0 $571 

Net Results $10,180 $7,060 $5,054 ($2,006) -28.41%

1) The FSOC and FDIC reimbursements are financed through assessments on certain bank holding companies and nonbank financial 

companies. See Treasury’s final rule and interim final rule governing the Assessments process: 

https://www.financialresearch.gov/strategy-budget/files/final_rule_interim_final_rule.pdf

2) The funding for the first six months of operating expenses and 12 months of capital expenses are reflected in the unobligated balance 

line. This is because the first assessment covering the fiscal year beginning October 1 is actually collected on September 15 of the prior 

fiscal year. This makes it appear as though large amounts of unobligated balances went unused, when in fact very little, if any, of those 

balances were from under execution. 

C – Vision, Priorities, and Context

The Council is chaired by the Secretary of the Treasury and consists of 10 voting members and five 

nonvoting members who serve in an advisory capacity. The Council brings together the expertise 

of the federal financial regulators, an insurance expert appointed by the President, and state 

regulators. 
FSOC - 4

The Council’s three statutory purposes are to:

1) identify risks to the financial stability of the United States that could arise from the material 

financial distress or failure, or ongoing activities, of large, interconnected bank holding 

companies or nonbank financial companies, or that could arise outside the financial services 

marketplace;

2) promote market discipline, by eliminating expectations on the part of shareholders, creditors, 

and counterparties of such companies that the Government will shield them from losses in the 

event of failure; and

3) respond to emerging threats to the stability of the U.S. financial system.

The Council has a statutory duty to facilitate information sharing and coordination among the 

member agencies regarding domestic financial services policy development, rulemaking, 

examinations, reporting requirements, and enforcement actions. Over the next year, the Council 

will continue to monitor the financial system for emerging risks and facilitate interagency 

cooperation to identify and analyze emerging threats. The Council will also continue to facilitate

information sharing and interagency coordination with respect to various regulatory initiatives.

Over the last year, the Council continued to identify and monitor potential risks to U.S. financial 

stability; fulfilled its statutory requirements, including transmission of its seventh annual report to 

Congress; and served as a forum for coordination among member agencies. The Council continues 

to evaluate its nonbank financial company determinations and financial market utility designations. 

In FY 2017, the Council rescinded one nonbank financial company determination.

By law, the Council is required to convene no less than quarterly, but the Council has convened on 

a more frequent basis to share information on key financial developments, coordinate regulatory 

implementation, and monitor progress on recommendations from the Council’s annual reports. In 

FY 2017, the Council convened seven times. The Council will continue to remain focused on 

identifying near-term threats and addressing structural vulnerabilities in the financial system. 

Transparency into Council work has routinely been provided through an annual report to Congress, 

periodic Congressional testimony on Council activities and emerging threats to financial stability, 

and regular communications with the public about Council activities and decisions.

The Council is an executive agency and is not an office or bureau of the Department of the Treasury

(Treasury). However, by law, the Council’s expenses (and, indirectly, FDIC reimbursements) are 

considered expenses of the Office of Financial Research, an office within Treasury.

FDIC Reimbursement

By law, the Council’s expenses include reimbursement of certain reasonable implementation 

expenses incurred by the FDIC in implementing Orderly Liquidation Authority. The FDIC must 

periodically submit requests for reimbursement to the Chairperson of the Council, who shall arrange 

for prompt reimbursement to the FDIC. FDIC expenses are for rule writing and resolution 

planning.
FSOC - 5

1.2 – Budget Adjustments Table

D – Budget Increases and Decreases Description

Program Decreases........................................................................-$77,000 / 0 FTE

Administrative Cost Savings -$77,000 / 0 FTE

The Council proposes to identify further savings through reductions in administrative costs.

Program Increases..........................................................................$77,000 / 0 FTE

Pay Annualization $77,000 / 0 FTE

To cover the FY 2019 cost of the January 2018 pay-raise.

Financial Stability Oversight Council FTE Amount

FY 2018 Estimated 18 $11,054

Changes to Base:

Total FY 2019 Base 18 $11,054

Program Changes:

Program Decreases: 0 ($77)

Administrative Cost Savings 0 ($77)

Program Increases: 0 $77

Pay Annualization 0 $77

Subtotal Program Changes 0 0

Total FY 2019 Estimated 18 11,054

Dollars in Thousands
FSOC - 6

1.3 – Operating Levels Table

1

Includes FDIC reimbursement.

E – Appropriations Language and Explanation of Changes

The FSOC receives no appropriations from Congress.

F – Legislative Proposals

The Budget proposes to impose appropriate Congressional oversight of Council functions by 

subjecting its activities to the normal appropriations process beginning in FY 2020.

Dollars in Thousands

Financial Stability Oversight Council FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 2,204 2,432 2,500

11.3 - Other than full-time permanent 171 170 164

11.5 - Other personnel compensation 60 60 57

11.9 - Total personnel compensation 2,435 2,662 2,721

12.0 - Personnel benefits 647 656 674

Total Personnel and Compensation Benefits $3,082 $3,318 $3,395

21.0 - Travel and transportation of persons 27 29 26

24.0 - Printing and reproduction 13 13 11

25.1 - Advisory and assistance services 252 265 256

25.2 - Other services from non-Federal sources 11 12 13

25.3 - Other goods and services from Federal sources1

6,961 6,973 6,926

26.0 - Supplies and materials 403 411 395

31.0 - Equipment 32 33 32

Total Non-Personnel $7,699 $7,736 $7,659

Subtotal New Budgetary Resources $10,781 $11,054 $11,054

Budget Activities: Column1 Column2 Column3

 FSOC 5,655 6,892 6,892

 FDIC 5,126 4,162 4,162

Total Budgetary Resources $10,781 $11,054 $11,054

FTE 17 18 18
FSOC - 7

Section II – Annual Performance Plan and Report

A – Strategic Alignment

With the publication of the Department of the Treasury’s Strategic Plan for FY 2018 - 2022, 

Treasury will work in FY 2018 to baseline its performance against the new strategic objectives. 

This could result in additional changes to performance measures in the FY 2020 Budget.

The FSOC supports Treasury’s Strategic Plan FY 2018-2022 as follows:

 Goal 1: Boost U.S. Economic Growth

 Goal 2: Promote Financial Stability

B – Financial Stability Oversight Council

($6,892,000 from Assessments): 

There are no measures specified for managing Council performance at this time. Information on the 

Council is provided on www.treasury.gov, www.fsoc.gov, and member agency websites to provide 

transparency and accountability.

2.1.1 – Financial Stability Oversight Council Annual Performance and Report

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Column1 Column32 Column4 Column5 Column6 Column7 Column8 Column2

Expense/Obligations $5,679 $7,660 $6,236 $7,157 $5,655 $6,892 $6,892 

Budget Activity Total $5,679 $7,660 $6,236 $7,157 $5,655 $6,892 $6,892 

FTE 23 23 22 22 17 18 18

C – FDIC Reimbursement

($4,162,000 from Assessments): 

Certain FDIC expenses are treated as expenses of the Council. For additional detail, see above.

2.1.2 – FDIC Reimbursement Annual Performance Plan and Report

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Column1 Column32 Column4 Column5 Column6 Column7 Column8 Column2

Expense/Obligations $6,327 $11,592 $7,628 $6,571 $5,126 $4,162 $4,162 

Budget Activity Total $6,327 $11,592 $7,628 $6,571 $5,126 $4,162 $4,162 

FTE 0 0 0 0 0 0 0

Department of the Treasury

Treasury Franchise Fund

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
TFF - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .............................................................................................. 4

1.2 – Budget Adjustments Table................................................................................................. 4

C – Budget Increases and Decreases Description....................................................................... 5

1.3 – Operating Levels Table ..................................................................................................... 6

D – Appropriations Language and Explanation of Changes ...................................................... 6

E – Legislative Proposals............................................................................................................ 6

Section II – Annual Performance Plan and Report................................................................... 7

A – Strategic Alignment ............................................................................................................. 7

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 – Shared Services Programs Resources and Measures..................................................... 8

2.1.2 – Centralized Treasury Administrative Services Resources and Measures....................... 9

2.1.3 – Administrative Services Resources and Measures ....................................................... 10

2.1.4 – Information Technology Resources and Measures....................................................... 13

C – Changes in Performance Measures.................................................................................... 14

Section III – Additional Information ........................................................................................ 15

A – Summary of Capital Investments....................................................................................... 15

B – TFF Program Costs ............................................................................................................ 15
TFF - 3

Section I – Budget Request

A – Mission Statement

To assist customer agencies in meeting their mission by providing responsive, customer-focused, 

cost-effective administrative and information technology support services.

B – Summary of the Request 

The Treasury Franchise Fund (TFF) supports effective administrative and information 

technology services through commitment to service, efficient operations, openness to change, 

and values-based behavior. The TFF achieves cost savings, promotes economies of scale, and 

increases productivity and efficiency in the use of resources by shared services providers.

The TFF providers include Departmental Offices’ Shared Services Programs (SSP) and the 

Fiscal Service’s Administrative Resource Center (ARC). SSP and ARC provide financial 

management, HR, IT, and other administrative services to federal customers on a fully cost 

recoverable, fee-for-service basis. Treasury proposes to move additional Departmental Offices 

(DO) administrative services to the TFF in FY 2019 to consolidate broad-scale administrative 

functions and capital investment activities into one account. The transition will also provide one 

governance process for reimbursable programs in DO. The TFF structure allows for more 

effective capital investments over multiple fiscal years and provides stability during a continuing 

resolution for more efficient contract execution. Customers will benefit from consolidation of 

like services, consistent points of contacts for service providers, less confusion during budget 

execution, and increased direct customer involvement through joint governance. Administrative 

programs will benefit as they will budget for and execute all services in one account and will be 

able to better leverage staff across functions. The move also will streamline cash management as 

services are paid for in consistent monthly amounts rather than billed in arrears based on actuals.

In FY 2019, there is support for increasing shared services across government and the TFF is 

well positioned to support the provision of high quality services in response to the demand. The 

TFF mission aligns with the Office of Management and Budget (OMB) reform priority M-17-22,

an initiative that directs agency reform proposals to leverage shared services that will streamline 

mission support functions. The TFF also supports the OMB crosscutting reform proposals to 

reduce the fragmented or duplicated services across government.

The TFF and its providers will continue to be integral federal partners to customer agencies. We 

will provide responsive, high quality and cost effective shared services to federal agencies 

through our commitment to streamlined processes to ensure compliance and eliminate 

redundancy, and focus on maximizing cost sharing opportunities that take advantage of 

economies of scale. 

The TFF aligns to the following Treasury strategic goals as presented in the new strategic plan:

 Goal 4: Transform Government-wide Financial Stewardship

 Goal 5: Achieve Operational Excellence
TFF - 4

1.1 - Appropriations Detail Table

Note: Total Revenue/Offsetting Collections and Total Expenses/Obligations in FY 2019 reflect the transfer of the 

Centralized Treasury Administrative Services into the Treasury Franchise Fund.

1.2 – Budget Adjustments Table

Dollars in Thousands

Treasury Franchise Fund FTE Amount

FY 2018 Estimated 1,770 $592,995 

Changes to Base:

Maintaining Current Levels (MCLs): $8,578 

Pay Annualization 0 $999 

Non-Pay 0 $7,578 

Subtotal Changes to Base 0 $8,578 

Total FY 2019 Base 1,770 $601,573 

Program Changes:

 Program Increases: 207 $148,109 

Centralized Treasury Administrative Services (CTAS) 207 $148,109 

Program Decreases: 0 ($22,489)

Increase Operational Efficiencies (SSP) 0 ($14,681)

Operational Support (ARC IT) 0 ($7,808)

Total FY 2019 Estimated 1,977 $727,193 

Dollars in Thousands

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FT

E

AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Shared Services Programs $238,808 $236,458 $225,198 ($11,260) -5%

Centralized Treasury Administrative 

Services

$0 $0 $148,109 $0 NA

Administrative Support Services $165,475 $160,258 $173,713 $13,455 8%

Information Technology Services $186,424 $185,958 $174,376 ($11,582) -6%

Recoveries from Prior Years $5,492 $20,849 $22,925 $2,076 10%

Unobligated Balances from Prior Years $175,188 $182,961 $194,146 $8,185 4%

Total Revenue/Offsetting Collections $771,387 $786,484 $935,467 $148,983 19%

Expenses/Obligations

Shared Services Programs 235 $235,812 255 $236,458 255 $225,198 0 ($11,260) 0.00% -5%

Centralized Treasury Administrative 

Services

0 $0 0 $0 207 $148,109 20

7 

$148,109 NA NA

Administrative Support Services 974 $157,284 1,012 $158,241 1,012 $160,087 0 $1,846 0.00% 1%

Information Technology Services 493 $195,441 503 $198,296 503 $193,799 0 ($4,497) 0.00% -2%

Total Expenses/Obligations 1,702 $588,537 1,770 $592,995 1,977 $727,193 20

7 

$134,198 11.70% 23%

Net Results $182,850 $193,489 $208,274 $14,785 8%

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated Estimated $ Change % Change
TFF - 5

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ....................................................+ $8,578,000 / + 0 FTE

Pay Annualization +$999,000 / +0 FTE 

Funds are required for annualization of the January 2018 pay-raise.

Non-Pay +7,578,000 / +0 FTE 

Funds are required for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Program Increases......................................................... + $148,109,000 / + 207 FTE

Centralized Treasury Administrative Services

Treasury proposes to move DO administrative services to the TFF in FY 2019 to consolidate 

broad-scale administrative functions and capital investment activities into one account. It will 

also provide one governance process for reimbursable programs in DO. The TFF structure 

allows for more effective capital investments over multiple fiscal years and provides stability 

during a continuing resolution for more efficient contract execution. Customers will benefit 

from consolidation of like services, consistent points of contacts for service providers, less 

confusion during budget execution, and increased direct customer involvement through joint 

governance. Administrative programs will benefit as they will budget for and execute all 

services in one account and will be able to better leverage staff across functions. The move also 

will streamline cash management as services are paid for in consistent monthly amounts rather 

than billed in arrears based on actuals.

Program Decreases..............................................................- $22,489,000 / + 0 FTE

Increase Operational Efficiencies (SSP) -$14,681,000 / +0 FTE

Decrease of $14,681,000 is due to modifications and investments that will not recur in FY 2019, 

such as the HR Connect upgrade. This decrease is also due to the identification of efficiencies in 

non-labor costs, primarily IT contracts.

Operational Support (ARC IT) -$7,808,000 / +0 FTE

Decrease of $5,319,569 is due to a timing differences in the collection of funds and obligation of 

those funds in support of a major cybersecurity initiative known as CyberClean. Decrease of 

$1,871,351 due to significant non-recurring FY 2018 investments to enhance the TreasuryDirect 

(Treasury Retail Investment Manager) system that will be offset by hardware and software 

annual maintenance. The remaining decrease is the net of various increases and decreases for 

numerous operational support contracts that are the result of typical fluctuations that occur with 

IT operations.
TFF - 6

1.3 – Operating Levels Table

Dollars in Thousands

Treasury Franchise Fund FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 139,899 145,260 170,773 

11.3 - Other than full-time permanent 555 632 690 

11.5 - Other personnel compensation 1,992 1,747 3,958 

11.6 - Overtime 2,819 3,158 3,168 

11.9 - Personnel Compensation (Total) 145,265 150,797 178,589 

12.0 - Personnel benefits 49,339 53,119 63,922 

Total Personnel and Compensation Benefits $194,604 $203,916 $242,511 

21.0 - Travel and transportation of persons 1,629 1,870 1,941 

22.0 - Transportation of things 24 6 28 

23.1 - Rental payments to GSA 4 4,752 38,602 

23.2 - Rental payments to others 50 270 656 

23.3 - Communication, utilities, and misc charges 63,550 67,534 69,356 

24.0 - Printing and reproduction 18 0 0 

25.1 - Advisory and assistance services 91,522 31,887 32,788 

25.2 - Other services 30,867 31,024 41,036 

25.3 - Other purchases of goods & serv frm Govt accounts 88,604 93,871 137,154 

25.4 - Operation and maintenance of facilities 20 121 501 

25.7 - Operation and maintenance of equip 77,509 123,830 124,373 

26.0 - Supplies and materials 1,112 813 3,013 

31.0 - Equipment 38,974 33,101 35,234 

32.0 - Land and structures 26 0 0 

43.0 - Interest and dividends 3 0 0 

91.0 - Confidential Expenditures 20 0 0 

Total Non-Personnel 393,932 389,079 484,682 

New Budgetary Resources $588,537 $592,995 $727,193 

FTE 1,702 1,770 1,977 

D – Appropriations Language and Explanation of Changes

The Treasury Franchise Fund receives no annually appropriated resources from Congress.

E – Legislative Proposals

The Treasury Franchise Fund does not have legislative proposals.
TFF - 7

Section II – Annual Performance Plan and Report

A – Strategic Alignment

The TFF aligns to the following Department of the Treasury (Treasury) Stategic Plan for FY 

2018-2022 goals and objectives:

Goal 4: Transform Government-wide Financial Stewardship

Objective 4.3 – Federal Financial Performance: Improve federal financial management 

performance using innovative practices to support effective government.

Goal 5: Achieve Operational Excellence

Objective 5.1 – Workforce Management: Foster a culture of innovation to hire, engage, 

develop, and optimize a diverse workforce with the competencies necessary to 

accomplish Treasury’s mission.

Objective 5.2 – Treasury Infrastructure: Better enable mission delivery by improving the 

reliability, security, and resiliency of Treasury’s infrastructure.

Objective 5.3 – Customer Value: Improve customer value by increasing the quality and 

lowering the cost of Treasury’s products and services

Treasury Franchise Fund Strategic Goals:

 Establish a level of transparency and a governance process that sets the standard for 

government service providers.

 Maintain status as a Financial Management Federal Shared Service Provider (FSSP).

 Commitment to continual improvement of operational service levels and process 

improvement efforts that reduce service costs.

 Prioritize resiliency, security (including cybersecurity), and data integrity of all IT systems 

and services.

 Promote and maximize shared services benefits in support of Treasury and government-wide 

initiatives.

 Continue to assess and report the TFF’s performance and provide timely feedback to 

customers.

In FY 2019, the TFF will maintain its commitment to excellence and to meeting all strategic 

goals, financial goals and benchmarks In order to meet the goal of reducing costs to customers,

the TFF will maximize shared service value and continue to look for opportunities to improve 

the efficiencies in business processes and technologies used in service delivery. The TFF strives 

to incorporate the customer perspective into the decision-making process. Customer 

involvement and input provide an opportunity to obtain constructive and directed feedback 

which allows customer concerns to be addressed and services to meet customer demand. 

TFF-IT effectively protects customer systems and data through cybersecurity initiatives that 

enhance operations and promote resiliency in critical IT infrastructure and systems. The 

Treasury Memo, “Data Loss Prevention (DLP)” dated December 11, 2015, and recent Treasury 

mandates require upgrades to the Trusted Internet Connections (TIC) managed within TFF-IT. 

To satisfy these requirements, IT will deploy a number of cybersecurity enhancements to satisfy 

each requirement of the memo. These enhancements are being initiated in FY 2018, and will 
TFF - 8

continue into FY 2019, with continuous reassessment thereafter. Additionally, IT has initiated a 

multi-year CyberClean initiative. The objective of this project is to strengthen Treasury’s

cybersecurity posture by working with a third party to benchmark the effectiveness of system 

security controls, identify gaps or deficiencies in the controls, strengthen response capabilities 

and assist with incident response, in the event a significant cybersecurity incident or data breach 

should occur.

B – Budget and Performance by Budget Activity

2.1.1 Shared Services Programs Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $187,498 $165,419 $225,024 $229,070 $235,811 $236,458 $225,198 

Budget Activity Total $187,498 $165,419 $225,024 $229,070 $235,811 $236,458 $225,198 

FTE 202 209 251 228 235 255 255

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Customer Satisfaction with 

Financial Planning Staff 57.2 59.1 63.0 69.0 75.0 62.0 62.0 65.0 

ECM/Web Solutions Response 

Time to Resolve ECM and Web 

Solutions Non-Critical 

Issues/Help Desk Tickets within 

10-15 Business Days

96.8 95.0 82.0 82.0 90.8 90.0 85.0 85.0 

HR Connect Customer 

Satisfaction % 90.0 90.1 83.0 82.0 83.0 91.0 83.0 83.0 

HR Connect Employee Update 

Files - Transmission of Employee 

Update Fields Made to the 

Specified External Benefit 

Provider Within Established 

Timeframes

96.8 100.0 97.3 100.0 98.4 90.0 90.0 90.0 

HR Connect Number of Tickets 

Escalated to Tier 3 212.0 242.0 128.0 N/A 173.0 200.0 200.0 200.0 

Average Cost per FTE1 N/A N/A N/A N/A N/A N/A N/A 1,383.0 

Annual Effective Spend Rate %1 N/A N/A N/A N/A N/A N/A N/A 96.0 

1/ New measures in FY 2019. See Section C - Changes in Performance Measures, page 14.

Shared Services Programs Budget and Performance

($225,198,000 from assessments revenue/offsetting collections):

Shared Services Programs (SSP) provide administrative and IT services on a competitive basis 

and also deliver outstanding customer service. SSP supports the goals and objectives of the 

updated Treasury Strategic Plan. SSP’s initiative to develop the Integrated Talent Management 

system is an Agency Priority Goal, and supports objective 5.1. SSP programs within the Office 

of the Chief Information Officer support objective 5.2, and all SSP programs support objective 

5.3.
TFF - 9

Description of Performance:

 Customer Satisfaction with Financial Planning Staff – All SSP customers are surveyed 

and the measure reflects the percentage of customers who rate their experience with 

financial planning staff as “good” or “excellent” on a 5-point scale. This target was 

exceeded in FY 2017 and SSP strives to exceed this target in FY 2018 as well. SSP will 

start administering the CTAS budget activity in FY 2019, and the target has been 

adjusted to reflect this additional work.

 Enterprise Content Management/Web Solutions: This target reflects the percentage of 

non-critical tickets which are resolved within 10-15 business days. The target service 

response times are lower in FY 2018 and FY 2019 due to potentially reduced contractor 

support stemming from recent budget cuts.

 HR Connect Customer Satisfaction: This measure reflects the percentage of customers 

satisfied with the HR Connect system. The FY 2017 target was not met due to the 

onboarding of new customers who are less familiar with the system. The HR Connect 

team strives to improve upon this actual in FY 2018 and FY 2019, but may be impacted 

by budget constraints.

 HR Connect Employee Update Files: Target reflects the transmission of employee update 

files made to an external benefit provider within established timeframes. Targets are 

consistent with the targets used for quarterly Capital Planning and Investment Control 

and OPM reporting for HR Connect.

 HR Connect Number of Tickets: HR Connect continues to maintain its current target 

levels. This target is based on implementing process improvements in the Design 

Documents and Quality Assurance environments.

2.1.2 Centralized Treasury Administrative Services Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations 0 0 0 0 0 0 $148,109 

Budget Activity Total 0 0 0 0 0 0 $148,109 

FTE 0 0 0 0 0 0 207

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Annual Effective Spend Rate %1 N/A N/A N/A N/A N/A N/A N/A 96.0 

1/ New measure in FY 2019. This target measures the obligation rate for CTAS program to ensure customers pay accurate prices

for services rendered. See Section C - Changes in Performance Measures, page 14.

Centralized Treasury Administrative Services Budget and Performance

($148,109,000 from assessments revenue/offsetting collections):

Treasury proposes to move Centralized Treasury Administrative Services (CTAS) to the TFF, 

consolidating broad-scale administrative functions and capital investment activities in one 

account. CTAS provides financial management, travel, human resources, IT, real estate and 

facilities management, building maintenance and other administrative services to federal 

customers within and outside of Treasury.
TFF - 10

Benefits of this proposal include:

 Enable Treasury to use a consistent platform to provide shared services activities within 

Treasury

 Eliminate the significant risks associated with operating a large shared services function 

through an annually appropriated account

 Allow Treasury to strategically plan and fund infrastructure investments

 Continue to improve transparency and governance of all shared services at Treasury

2.1.3 Administrative Services Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated 

Expenses/Obligations $127,747 $128,904 $146,282 $156,869 $157,284 $158,241 $160,087

Budget Activity Total $127,747 $128,904 $146,282 $156,869 $157,284 $158,241 $160,087 

FTE 766 816 936 988 974 1,012 1,012

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Direct Cost as a Percentage of 

Award Dollars N/A 0.4 0.1 0.2 0.2 0.5 0.4 0.4

Direct Cost per AP Transaction N/A 65.4 47.2 59.1 45.5 65.0 58.5 57.3

Direct Cost per FTE in Core HR 

Services N/A 976.3 963.0 1,070.3 1,118.8 1,050.0 1,050.0 1,050.0

Direct Cost per System User -

Oracle N/A 18,261.0 21,724.0 16,241.0 16,356.0 22,160.0 18,836.0 18,459.0

Direct Cost per Travel Voucher N/A 24.8 21.1 19.8 7.8 27.0 10.4 10.2

First Call Resolution - Oracle % N/A 61.0 56.7 50.3 81.5 50.0 65.0 65.0

Hiring Timeliness % N/A 89.0 86.7 84.8 85.2 85.0 85.0 85.0

Indirect Cost Admin Services % 23.5 27.1 27.5 22.1 21.9 25.0 25.0 25.0

Timely Contract Issuance N/A N/A N/A 89.3 89.3 90.0 90.0 90.0

Travel Voucher Payments 

Timeliness % N/A 99.0 99.2 99.9 99.8 98.0 98.0 98.0

Unqualified Audit Opinions % N/A 96.0 100.0 100.0 100.0 100.0 100.0 100.0

Administrative Services Budget and Performance 

($160,087,000 from assessments revenue/offsetting collections):

The TFF’s Administrative Services are provided by the Bureau of Fiscal Service’s 

Administrative Resource Center (ARC) and supports the Administration, OMB and Treasury’s 

shared services initiatives. Through fully integrated and standardized administrative systems and 

processes, ARC has a history of high performance and is considered a leader in delivering high 
TFF - 11

quality and cost effective federal shared services. As a critical partner to OMB and Treasury, 

Administrative Services supports:

 the Financial Management Line of Business, designated FSSP by OMB, 

 the Budget Formulation and Execution Line of Business, designated FSSP by OMB, and 

 Treasury's Human Resources Line of Business. 

ARC provides services in the areas of financial management, procurement, travel and relocation, 

and human resources. Service value is achieved through cost sharing opportunities in systems 

capital investments and maintenance, as well as, reduced operating costs through standardized, 

compliant and streamlined, high quality and responsive, value added services. The 

Administrative Services Activity’s success is demonstrated by its growing customer base, 

increasing demand for services, meeting or exceeding our performance measures, high customer 

satisfaction results and commitment to cost effective and stable customer prices.

ARC Administrative Services supports Strategic Objectives 4.3, 5.1 and 5.3.

Description of Performance:

In FY 2017 ARC continued to establish themselves as a leader in federal shared services through 

meeting high expectations and performance standards; the following bullets highlight 

Administrative Services’ performance: 

 Each service line reports a financial and quality metric.

o Direct Cost as a Percentage of Award Dollars – Procurement Services measure 

comparing direct operational costs to total amount of award dollars obligated

o Direct Cost per AP Transaction – Financial Management Services measure 

comparing all direct accounts payable operational costs to # of accounts payable 

transactions

o Direct Cost per FTE in Core HR Services – Human Resource Services measure 

comparing direct operational costs to # of unique employees serviced within 

Classification, Staff Acquisition, Processing Operations, and Employee Benefits.

o Direct Cost per System User - Oracle – Systems measure comparing all Oracle direct 

operational costs to # of Oracle users

o Direct Cost per Travel Voucher – Travel Services measure comparing direct 

operational costs of E-Gov travel services to # travel drivers within same service

o First Call Resolution - Oracle % – Systems measure of first call resolution of callrelated tickets about Oracle concerns

o Hiring Timeliness % – Human Resource Services measure of percentage completed 

of ARC portion of the hiring process within 23 calendar days

o Timely Contract Issuance – Procurement Services measure of percentage of all 

contract types completed within their designated business days as labeled on service 

description (varies between 60 to 120 days depending on type)

o Travel Voucher Payments Timeliness % – Travel Services measure of percentage of 

approved travel vouchers, including split disbursements, paid within five business 

days

o Unqualified Audit Opinions % – Financial Management measure of percentage of 

audit opinions for items under ARC control and responsibility
TFF - 12

 One business line measure 

o Indirect Cost Admin Services % – Total indirect costs across entire Administrative 

business line vs all costs

 All quality measures generally within same range as previous FY except for First Call 

Resolution – Oracle % because previously both email and call related tickets were considered 

while FY 2017 results and future targets only focus on call related tickets. Calls are 

generally less complex and more likely to be accomplished on first attempt.

 All financial measures continue trend in favorable position for ARC except for one measure 

discussed subsequently.

 Met 9 of 11 performance metrics, the following are the two exceptions;

o Timely Contract Issuance – the Timely Contract Issuance metric was implemented in 

FY 2016 and the actual performance is less than 1 percent from the initial target for 

the second straight year. ARC is confident that the new metric target is achievable 

and the service line owner is committed to achieving it in future years.

o Direct Cost per FTE in Core HR Services – the achievement of this service metric 

was impacted by the government-wide hiring freeze. The freeze resulted in a 

significant work volume decrease from historical levels supported by our federal 

workforce. ARC continues to work with customer agencies to understand the 

changes to the HR service demand for future years, thereby enabling them to align 

resources to support the demand and achieve the cost target in FY 2018 and FY 2019.

 Expanded, improved, and implemented services and new requirements in support of current 

and future customers.

o Initial implementation of Oracle’s Service Oriented Architecture, provides flexibility 

for third party integrations and ARC’s standard solution.

o Deployed Concur’s “Skybridge” and mobile enhancements, improving travel booking 

and user convenience/experience.

o Successfully met new DATA Act reporting requirements for all customers.

 Improved stakeholder confidence by receiving unmodified opinions on financial statements 

for 20 Administrative Service customers and receipt of the 14th consecutive clean Statement 

on Standards for Attestation Engagements (SSAE) report on ARC service controls.

In FY 2018 and FY 2019, Administrative Services will continue to provide high quality service 

and continue support of shared services in transforming the way federal administrative services 

are delivered. This will include a commitment to expanding shared service usage, meeting or 

exceeding service metrics, and continuing efforts to improve efficiency and effectiveness, 

including upgrades to the Oracle E-Business Suite and other support systems, and deployment of 

business intelligence/data analytics and accounting reconciliation and financial statement 

solutions.
TFF - 13

2.1.4 Information Technology Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated 

Expenses/Obligations $152,050 $149,992 $162,895 $192,877 $195,441 $195,441 $193,799 

Budget Activity Total $152,050 $149,992 $162,895 $192,877 $195,441 $195,441 $193,799 

FTE 457 459 459 499 493 503 503

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Fiscal IT Hosting – Percentage of 

Time Service is Operational 

(Uptime Excluding Planned 

Maintenance)

N/A N/A N/A 1.0 1.0 1.0 1.0 1.0

Percentage of POA&Ms 

Scheduled for closure in last 30 

days - closed early or on time

N/A N/A N/A 0.7 0.9 0.9 0.9 0.9

Number of Engagements in 

Strategic Sourcing for "Service 

Provider" or Other Shared 

Services Opportunity

N/A N/A N/A 1.0 2.0 2.0 2.0 2.0

Information Technology Services Budget and Performance 

($193,799,000 from assessments revenue/offsetting collections):

The TFF’s Information Technology (IT) Services provides shared services to a variety of federal 

customers. IT Services provides services such as Security Assessment and Authorization 

(SA&A), Continuous Monitoring, Hosting Services and Software Development. Value is 

provided through consolidated IT infrastructures and standardized IT service delivery in a 

modern, technically innovative, and secure environment. Also, the TFF is one of two Treasury 

trusted internet connection providers and hosts Treasury’s public domain name system. The 

TFF’s IT Services Activity is designated by OMB as a Shared Service Center for Information 

Systems Security Line of Business. 

Description of Performance:

In FY 2017, IT Services met all target performance measures. The following bullets highlight 

the IT performance: 

 Fiscal IT Hosting – IT Services consistently met the 99% infrastructure uptime target, 

and this was a major factor in an overall customer satisfaction rating of 93%.

Additionally, IT met or exceeded service level commitments with a 92% timely 

incident/service request resolution rate. Service value is achieved through cost effective 

hosting services and responsive, value-added support and customer service.

 Closure of Plan of Action and Milestones (POA&M) – POA&Ms are generated when 

system (application) assessments are conducted or when an external IT security audit is 

performed. Timely responsiveness to these findings is one of many measures of a 

healthy infrastructure. In FY 2017, IT Services successfully closed 576 POA&Ms.
TFF - 14

 Number of engagements for strategic sourcing – This metric is defined as new work

(Hosting, Security Services, Software Engineering, etc.) outside of the current scope for 

existing customers, onboarding of new customers, or establishment of a contract vehicle 

for Treasury or Government-wide use. In the second quarter of FY 2017, IT Services

took the lead on awarding a Treasury-wide strategic contract vehicle for Adobe licenses.

In the third quarter, IT performed a Security Assessment & Accreditation (SA&A) 

review for a HHS system that had not previously been part of our customer portfolio.

For FY 2018 and FY 2019, IT Services continues to strive for high performance targets for all 

three performance measures and will use targeted efforts with regular reviews to monitor 

progress.

C – Changes in Performance Measures 

Performance Measure or Indicator Change and Justification

1. Average Cost per FTE

(New SSP Performance Measure)

This target measures the cost to Treasury 

customers for SSP programs. The total budget 

for Treasury shared programs, excluding 

customer specific requests and modifications, 

is divided by the number of enacted Treasury 

FTE to determine the per FTE cost for these 

programs. SSP strives to provide these shared 

services to customers at a competitive price. 

The FY 2019 target is based on historical 

budget data. See section 2.1 Shared Services 

Programs Resources and Measures.

2. Annual Effective Spend Rate: 

(New SSP Performance Measure)

This target measures the obligation rate for 

SSP programs, excluding funds that are 

collected for reserve programs. SSP strives to 

attain a high obligation rate to ensure that 

customers pay accurate prices for services 

rendered. The FY 2019 target is based on 

historical budget data. See 2.1.1 Shared 

Services Programs Resources and Measures. 

3. Annual Effective Spend Rate: 

(New CTAS Performance Measure)

This target measures the obligation rate for 

CTAS programs, excluding funds that are 

collected for reserve programs. CTAS strives 

to attain a high obligation rate to ensure that 

customers pay accurate prices for services 

rendered. The FY 2019 target is based on 

historical budget data. See section 2.1.2 CTAS

Resources and Measures.

With the publication of the Treasury Strategic Plan for FY 2018-2022, the TFF will work this 

year to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 budget.
TFF - 15

Section III – Additional Information

A – Summary of Capital Investments

The TFF’s planned investments enhance the capabilities and capacity of our financial 

management shared services. Investing in Service Oriented Architecture will allow customers to 

streamline application connections resulting in benefits that include reducing development time, 

using industry development best practices for coding efforts, allowing real time processing of 

transactional data between systems, and independent communication between systems. This 

effort will also reduce redundancy, providing more flexible and efficient interfaces with 

customers' third-party applications. 

The TFF plans to expand the use of an enterprise-wide financial statement reporting tool and 

update operational (transactional) reporting and analytical tools in order to provide a more 

efficient interpretation of large volumes of data, long-term stability, and improved presentation 

and distribution capabilities.

A summary of capital investment resources, including major IT and non-technology investments

can be found at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

ARC’s capital investments are contained within the Fiscal Service capital investment summary. 

SSP’s capital investments are contained within the Departmental Offices capital investment 

summary.

B - TFF Program Costs

This information is provided to fulfill requirements of the annual Financial Services and General 

Government appropriations bill (Section 124 in the FY 2017 enacted).
TFF - 16

Treasury Franchise Fund – Shared Services Programs, FY 2017 Total Charges by 

Customer

2017 SSP Customers

Enterprise 

Business 

Solutions

Infrastructure 

Operations

Cybersecurity

IT Strategy And 

Technology 

Management

NonInformation 

Technology 

Services

Total

Alcohol Tobacco Tax and Trade Bureau 356,720 584,796 83,284 24,296 312,173 1,361,268 

Bureau of Printing and Engraving 1,435,546 4,038,810 235,249 92,748 873,254 6,675,607 

Bureau of the Fiscal Service 5,499,956 765,586 358,828 110,247 1,515,240 8,249,857 

Consumer Financial Protection Bureau 1,234,709 5,790 411 199,736 1,440,646 

Commodities Futures Trading Commission 58,310 58,310 

DHS Customs and Immigration Service 66,759 66,759 

DHS Headquarter 165,784 165,784 

DHS U.S. Secret Service 1,498,752 22,648 1,607 63,912 1,586,919 

Community Development Financial 

Institutions Fund

227,034 38,532 7,813 3,808 117,933 395,120 

DC Pensions 27,829 101,135 4,706 964 67,065 201,700 

Federal Financing Bank 143,566 161,753 7,524 1,543 67,966 382,352 

Financial Stability Oversight Council 322,971 180,598 7,996 1,639 64,164 577,368 

Treasury Office of Financial Research 216,829 5,539,490 237,890 11,087 396,317 6,401,612 

Treasury Office of Financial Stability 1,133,836 415,407 17,642 3,615 292,850 1,863,350 

Treasury Office of Technical Assistance 21,405 104,337 3,295 675 186,588 316,299 

Small Business Lending Fund Administration 27,793 96,074 4,471 916 49,415 178,669 

Treasury Departmental Offices 5,340,002 7,786,985 1,050,181 71,103 3,406,520 17,654,792 

State Small Business Credit Initiative 

Administration

20,577 45,578 2,123 434 54,857 123,568 

Treasury Executive Office of Asset Forfeiture 1,230,224 190,127 6,822 1,398 110,179 1,538,751 

Treasury Terrorism Risk Insurance Program 7,941 50,532 2,351 482 26,682 87,988 

Department of Commerce 11,159,248 169,597 12,034 608,886 11,949,764 

DOD - U.S. Air Force 135,907 135,907 

Department of Energy 1,560 1,560 

Department of Interior 92,715 3,815 96,530 

DOJ - Drug Enforcement Agency 40,019 40,019 

DOJ - Executive Office of Immigration Review 12,979 12,979 

DOJ Alcohol Tobacco Firearms and Explosives 1,686,040 29,061 2,062 122,141 1,839,303 

Department of Labor 5,156,661 56,365 4,000 205,953 5,422,979 

DOL - Bureau of Labor Statistics 31,366 31,366 

DOL - Office of the Inspector General 5,408 5,408 

DOT Federal Transit Agency 24,780 24,780 

Department of Education 114,324 114,324 

Export Import Bank Office of the Inspector 

General

4,326 4,326 

Federal Communications Commission 46,007 1,844 47,851 

Federal Deposit Insurance Corporation 164,512 3,716 168,228 

Federal Deposit Insurance Corporation - 

Office of the Inspector General 10,572 10,572 

Federal Emergency Management Agency 399,159 101,324 500,483 

Federal Housing Finance Agency 55,190 55,190 

Financial Crimes Enforcment Network 249,276 1,008,157 54,808 16,583 254,600 1,583,424 
TFF - 17

2017 SSP Customers

Enterprise 

Business 

Solutions

Infrastructure 

Operations

Cybersecurity

IT Strategy And 

Technology 

Management

NonInformation 

Technology 

Services

Total

Federal Reserve Board 4,332 4,332 

Government Accountability Office 639,567 11,043 784 27,364 678,758 

General Services Administration 150,638 150,638 

Housing and Urban Development 3,614,457 26,454 1,877 297,611 3,940,398 

HUD - Office of Inspector General 173,633 173,633 

Internal Revenue Service 42,944,733 67,956,930 8,889,397 4,006,139 15,238,678 139,035,876 

U.S. Mint 1,495,602 1,461,722 249,858 90,338 973,334 4,270,853 

National Records and Archives 

Administration

41,398 41,398 

Office of the Comptroller of the Currency 2,263,597 1,174,067 394,653 169,800 892,601 4,894,718 

Office of Government Ethics 6,455 6,455 

Treasury Office of Inspector General 214,281 476,167 27,866 10,268 124,013 852,596 

Overseas Private Investment Corporation 18,067 18,067 

Peace Corps 138,833 4,555 143,388 

Small Business Administration 604,574 68,407 672,982 

Special Inspector General for TARP 265,059 1,073,480 45,160 9,256 161,611 1,554,565 

National Gallery of Art 30,285 30,285 

TFF - Administrative Resource Center/ 1 1,489,592 2,599,993 148,968 72,260 389,797 4,700,610 

Treasury Inspector General for Tax 

Administration

658,883 2,340,112 132,207 41,505 396,366 3,569,073 

USAID 2,746,198 17,331 1,230 104,920 2,869,678 

Veterans Affairs 71,306 71,306 

Total 94,953,316 98,528,658 11,997,092 4,741,104 28,844,736 239,064,905 

1/ SSP bills all customers for services, including ARC. SSP costs collected from ARC are initially billed and collected from the ARC customers.
TFF - 18

Treasury Franchise Fund – Administrative Resource Center, FY 2017 Total Charges by

Customer

2017 ARC Customers 

Financial 

Management 

Services

FMLoB FEES

Human 

Resource 

Services

Procurment 

Services Travel Services

Information 

Technology 

Services

Grand Total

ACCESS BOARD 249,521.00 105,097.00 55,747.00 30,112.00 440,477.00

ADMIN OFFICES OF THE US COURTS 481,204.00 481,204.00

ADMINISTRATION FOR CHILDREN AND FAMILIES 104,543.98 104,543.98

AFRICAN DEVELOPMENT FOUNDATION 927,090.00 389,355.00 31,367.00 1,347,812.00

AGENCY FOR INTERNATIONAL DEVELOPMENT 89,556.00 95,819.00 185,375.00

AGENCY FOR INTERNATIONAL DEVELOPMENT - OIG 103,946.00 103,946.00

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU 842,036.00 994,135.00 817,852.00 242,202.00 2,896,225.00

ALCOHOL TOBACCO FIREARMS AND EXPLOSIVES 779,333.00 779,333.00

ARMED FORCES RETIREMENT HOME 1,081,238.91 1,335,858.49 1,006,827.59 25,074.66 3,448,999.65

BUREAU OF ENGRAVING AND PRINTING 1,114,179.00 137,850.00 1,252,029.00

BUREAU OF THE FISCAL SERVICE 15,703,773.00 5,294,556.00 5,054,760.00 582,126.00 157,456,342.11 184,091,557.11

CDFI PROGRAM FUND 1,071,177.00 120,394.00 276,414.00 20,470.00 1,488,455.00

CENTER FOR DISEASE CONTROL 1,815,508.00 1,815,508.00

CHEMICAL SAFETY AND HAZARD BOARD 279,070.00 18,509.00 30,620.00 328,199.00

COMPTROLLER OF THE CURRENCY 116,584.00 116,584.00

CONSUMER FINANCIAL PROTECTION BUREAU 1,549,998.00 3,807,351.00 1,682,406.00 1,436,366.00 4,354.00 8,480,475.00

CONSUMER PRODUCT SAFETY COMMISSION 9,129.00 9,129.00

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE 95,989.00 95,989.00

DC PENSIONS PROJECT OFFICE 2,129,975.00 32,081.00 34,331.00 1,640.00 1,730,933.00 3,928,960.00

DEFENSE HEALTH AGENCY 55,444.00 55,444.00

DEFENSE NUCLEAR FACILITIES SAFETY BOARD 54,535.00 54,535.00

DENALI COMMISSION 380,423.00 85,531.00 84,294.00 20,068.00 570,316.00

DEPARTMENT OF AGRICULTURE 167,510.00 167,510.00

DEPARTMENT OF AGRICULTURE - OIG -8,595.80 -8,595.80

DEPARTMENT OF COMMERCE 191,638.00 286,864.00 478,502.00

DEPARTMENT OF EDUCATION 230,616.00 230,616.00

DEPARTMENT OF ENERGY 127,162.00 124,236.00 251,398.00

DEPARTMENT OF HEALTH & HUMAN SERVICES 230,616.00 151,015.00 61,176.00 442,807.00

DEPARTMENT OF HEALTH & HUMAN SERVICES - OIG 4,043.00 4,043.00

DEPARTMENT OF HOMELAND SECURITY 497,584.00 537,607.00 1,035,191.00

DEPARTMENT OF HOMELAND SECURITY - CIS 422,025.00 422,025.00

DEPARTMENT OF HOMELAND SECURITY - OIG 679,276.00 89,386.00 130,041.00 284,024.00 1,182,727.00

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 20,122,764.58 230,616.00 14,525,945.96 2,770,380.00 3,071,289.00 40,720,995.54

DEPARTMENT OF JUSTICE 130,452.00 124,236.00 254,688.00

DEPARTMENT OF LABOR 237,222.00 141,399.00 378,621.00

DEPARTMENT OF STATE 584,123.00 95,892.00 680,015.00

DEPARTMENT OF THE INTERIOR 1,580,601.86 124,236.00 1,704,837.86

DEPARTMENT OF TRANSPORTATION 230,616.00 230,616.00

DEPARTMENT OF VETERANS AFFAIRS 665,366.00 158,998.00 824,364.00

DEPARTMENT OF VETERANS AFFAIRS - OIG 2,279,819.00 2,279,819.00

DEPARTMENT OF VETERANS AFFAIRS - TAC 367,326.00 367,326.00

ELECTION ASSISTANCE COMMISSION 388,605.00 154,601.00 39,082.00 582,288.00

ENVIRONMENTAL PROTECTION AGENCY 95,819.00 173,100.00 268,919.00

FARM CREDIT ADMINISTRATION 371,988.00 46,853.00 245,634.00 664,475.00

FARM CREDIT SYSTEM INSURANCE CORPORATION 198,042.00 1,464.00 4,805.00 204,311.00

FEDERAL EMERGENCY MANAGEMENT AGENCY 35,369.00 35,369.00

FEDERAL HOUSING FINANCE AGENCY 1,027,442.00 170,746.00 290,688.00 1,488,876.00

FEDERAL HOUSING FINANCE AGENCY - OIG 366,593.00 338,095.00 408,104.00 102,887.00 1,215,679.00
TFF - 19

2017 ARC Customers 

Financial 

Management 

Services

FMLoB FEES

Human 

Resource 

Services

Procurment 

Services Travel Services

Information 

Technology 

Services

Grand Total

FEDERAL LABOR RELATIONS AUTHORITY 472,780.00 48,851.00 53,555.00 575,186.00

FEDERAL MARITIME COMMISSION 323,986.00 73,590.00 28,515.00 426,091.00

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION 293,390.88 138,752.48 15,581.66 32,705.82 480,430.84

FINANCIAL CRIMES ENFORCEMENT NETWORK 651,146.75 228,107.75 705,362.00 72,560.00 2,634,409.00 4,291,585.50

FOOD AND DRUG ADMINISTRATION 577,663.00 577,663.00

GENERAL SERVICE ADMINISTRATION 41,332.00 41,332.00

GULF COAST ECOSYSTEM RESTORATION COUNCIL 271,520.00 23,600.03 23,309.00 12,243.00 330,672.03

INTER AMERICAN FOUNDATION 838,893.00 621,965.00 33,489.00 1,494,347.00

MERIT SYSTEMS PROTECTION BOARD 403,133.00 20,715.00 71,543.00 495,391.00

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 137,286.16 124,236.00 487,484.00 749,006.16

NATIONAL ARCHIVES & RECORDS ADMINISTRATION 3,901,983.00 539,506.00 321,782.00 4,763,271.00

NATIONAL MEDIATION BOARD 342,962.00 212,526.00 65,304.00 620,792.00

NATIONAL SCIENCE FOUNDATION 139,094.00 57,387.00 196,481.00

NUCLEAR REGULATORY COMMISSION 41,332.00 41,332.00

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 254,045 14,635 25,840 294,520

OFFICE OF ADMINISTRATION, EXEC OFF OF THE PRES 1,254,598 251,402 379,044 1,885,044

OFFICE OF FINANCIAL STABILITY 344,499 185,546 71,289 17,455 618,789

OFFICE OF GOVERNMENT ETHICS 325,523 236,299 204,578 13,066 779,466

OFFICE OF PERSONNEL MANAGEMENT 41,322 41,322

OFFICE OF PERSONNEL MANAGEMENT - OIG 33,575 33,575

OFFICE OF TECHNICAL ASSISTANCE (OTA) 914,699 71,859 40,094 131,427 1,158,079

OFFICE OF THE INSPECTOR GENERAL 351,219 625,483 146,166 75,185 1,198,053

RAILROAD RETIREMENT BOARD 5,258 5,258

SECURITIES AND EXCHANGE COMMISSION 1,274,482 1,274,482

SMALL BUSINESS ADMINISTRATION 67,475 67,475

SOCIAL SECURITY ADMINISTRATION 67,475 827,750 895,225

SPECIAL INSPECTOR GENERAL - TARP 330,327 445,665 232,344 109,389 21,720 1,139,445

TREASURY DEPARTMENTAL OFFICES 3,674,565 4,607,009 920,574 616,656 9,818,804

TREASURY FRANCHISE FUND/ADMINISTRATIVE SERVICES/ 1 14,959,557 14,959,557

TREASURY FRANCHISE FUND/INFORMATION TECHNOLOGY/ 1 839,222 1,101,026 1,233,473 132,426 3,306,147

TREASURY FRANCHISE FUND/SHARED SERVICES PROGRAM/ 1 588,253 95,892 1,499,447 290,144 14,675 6,145,857 8,634,268

TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION 690,211 1,697,908 744,473 440,519 3,573,111

TRUST FUND - BLACK LUNG DISABILITY 163,966 163,966

TRUST FUND - FEDERAL DISABILITY 425,468 425,468

TRUST FUND - FEDERAL HOSPITAL INSURANCE 476,434 476,434

TRUST FUND - FEDERAL OLD AGE & SURVIVORS 425,468 425,468

TRUST FUND - FEDERAL SUPPLEMENT INSURANCE 482,760 482,760

TRUST FUND - OIL SPILL LIABILITY 112,300 112,300

TRUST FUND - UNEMPLOYMENT 700,988 700,988

UNITED STATES MARSHALS SERVICE 8,237 8,237

UNITED STATES MINT 8,234,241 3,315,790 1,755,193 236,537 13,541,761

US COURT OF APPEALS FOR VETERANS 252,971 7,360 13,042 273,373

USDA FOOD AND NUTRITION 856,964 856,964

USDA FOREST SERVICE 116,856 116,856

USDA OCIO INTERNATIONAL TECHNOLOGY SERVICES 1,293,359 1,293,359

USDA OFFICE OF INSPECTOR GENERAL 66,508 66,508

Grand Total 81,936,939 2,860,405 45,704,727 21,392,399 13,413,673 186,585,018 351,893,161

1/ARC bills all customers for services, including ARC Admin, ARC IT, and SSP. Costs are initially billed and collected from ARC Admin, ARC IT, and SSP customers.

Department of the Treasury

Treasury Forfeiture Fund

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
TEOAF - 2

Table of Contents

Section I – Purpose........................................................................................................................ 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Appropriations Detail Table .............................................................................................. 6

1.2 – Operating Levels Table...................................................................................................... 7

D – Appropriations Language and Explanation of Changes ...................................................... 8

E – Legislative Proposals............................................................................................................ 8

Section II – Annual Performance Plan and Report................................................................... 9

A – Strategic Alignment ............................................................................................................. 9

B – Budget and Performance by Budget Activity ...................................................................... 9

2.1.1 - Treasury Forfeiture Fund Resources and Measures....................................................... 9
TEOAF - 3

Section I – Purpose

A – Mission Statement

To affirmatively influence the consistent and strategic use of asset forfeiture by law enforcement 

bureaus that participate in the Treasury Forfeiture Fund (the Fund) to disrupt and dismantle 

criminal enterprises.

B – Summary of the Request 

The Treasury Executive Office for Asset Forfeiture (TEOAF) administers the Fund, which is the 

receipt account for deposit of non-tax forfeitures made pursuant to laws enforced or administered 

by participating Treasury and Department of Homeland Security (DHS) bureaus. Principal 

revenue-producing bureaus include U.S. Customs and Border Protection, U.S. Immigration and 

Customs Enforcement, the Internal Revenue Service, and the U.S. Secret Service, among others.

The Fund is a special fund, defined as a Federal fund account for receipts earmarked for specific 

purposes and the expenditure of those receipts. The law (31 U.S.C. 9705) allows TEOAF to use 

the funds for payment of all proper expenses of seizure or the proceedings of forfeiture and sale. 

Revenues deposited in the Fund can be allocated and used as the result of a permanent indefinite 

appropriation provided by Congress. A forfeiture process begins once currency or property is 

seized. Seized currency is deposited into a suspense account (holding account) until forfeited. 

At that time, the forfeited amount is transferred (deposited) to the Fund as revenue. Forfeited 

properties are usually sold and the proceeds are also deposited into the Fund as revenue. This 

revenue represents budget authority for meeting obligations and expenses of the program.

Expenses of the Fund are set in a relative priority so that operating costs are met first and may 

not exceed revenues.

 

 Mandatory expenses represent operating costs of the Fund, including storing and 

maintaining seized and forfeited assets, valid liens and mortgages, investigative expenses 

incurred in pursuing a seizure, information and inventory systems, remissions, victim 

restoration, and certain costs of local police agencies incurred in joint law enforcement 

operations. Following seizure, equitable shares may be paid to state and local law 

enforcement agencies that contributed to the seizure activity at a level proportionate to 

their involvement.

 Secretary’s Enforcement Fund (SEF) expenses are funded from revenue from equitable 

shares received from Department of Justice (DOJ) or U.S. Postal Service (USPS) 

forfeitures. These shares are proportionate to Treasury’s participation in the overall 

investigative effort that led to a DOJ or USPS forfeiture. SEF revenue is available for 

federal law enforcement-related purposes of any bureau participating in the Fund.

 Strategic Support (formerly known as Super Surplus) authority, established by 

Congress in 31 U.S.C. 9705(g)(4)(B), allows TEOAF to fund priority federal law 

enforcement initiatives with remaining unobligated balances at the close of the fiscal 

year, after an amount is reserved for the next fiscal year’s operations. 
TEOAF - 4

Priorities: In FY 2019, TEOAF will continue to support the investigations and activities of the 

participating law enforcement bureaus. The bulk of TEOAF expenses include supporting

seizures and forfeitures to protect the health and safety of U.S. citizens and the commercial 

interests of U.S. businesses from pernicious criminal activity. Funds are expended for seizure, 

storage, maintenance, disposition, and destruction and all costs associated with those activities. 

TEOAF focuses on supporting cases and investigations that meet the mission of disrupting and 

dismantling criminal enterprises. To this end, TEOAF prioritizes major case1initiatives when 

allocating funding to member agencies, including the purchase of evidence and information, joint 

operations expenses, investigative expenses leading to seizure, and asset identification and 

removal teams. Major case initiatives are aligned directly to the National Money Laundering 

and Southwest Border strategies. 

TEOAF also combats emerging patterns and practices that threaten our Nation’s financial 

stability. Funds are used to support anti-money laundering/combating financing of terrorism

(AML/CFT) investigations and activities. To be effective, analysis of large data caches and

cryptocurrency-related crime requires large investments in advanced information technology 

hardware, software, training, and other capabilities. These investments buttress the AML/CFT 

strategy of the Secretaries of Homeland Security and the Treasury. If available, TEOAF plans to 

use Strategic Support (formerly super surplus) funds in FY 2019 to support such investments.

Challenges: Recently-enacted large rescissions have had a severe negative impact on the 

participating member agencies’ investigations. Insufficient and inconsistent funding support, 

uncertainty about future funding, investigations disrupted by cash flow problems, and inability to 

obtain necessary technology/infrastructure in the absence of Strategic Support all undermine 

both current and future financial investigations and forfeitures. FY 2017 total revenue was the 

lowest since FY 2007, and the substantial drop in “base” revenue (revenue from non-major 

forfeitures) that is relied upon to cover basic mandatory costs of the forfeiture program is 

especially troubling. Total FY 2017 “base” revenue was $349 million, as compared to $419

million in FY 2016, $387 million in FY 2015, and $410 million in FY 2014.

 

1A major case refers to a case where the forfeiture results in a deposit greater than $5 million, or a case that disrupts,

dismantles, or interrupts money laundering networks or other financial activities that threaten the financial stability, 

financial system, or financial interests of the United States.
TEOAF - 5

The table below reflects forfeiture revenue from all sources including direct revenue, reverse 

asset sharing, and interest earned.

*FY 2015 data does not include the BNP Paribas S.A. forfeiture in the amount of $3,839 million. Of that 

amount, $3,800 million was permanently rescinded and transferred to the newly-created U.S. Victims of 

State Sponsored Terrorism Fund (USVSST) as directed by Congress under the Consolidated 

Appropriations Act of 2016, Pub. L. 114-113, Div. O, Tit. IV, §404(e) and §405(b). The remainder is 

precluded from obligation.

Participating agencies are seeing reluctance in the field to undertake complex major 

investigations due to the lack of assurance that their efforts would receive continuous support. 

Strategic Support funding is especially critical as a strategic investment in the agencies’ 

operational capabilities and infrastructure supporting major cases. It provides law enforcement 

much-needed flexibility to respond in real time to unanticipated critical needs, such as those 

driven by technology advancements or emerging criminal threats. It often serves as seed funding 

for innovations that need to be tested and refined prior to full-scale implementation. 

It is precisely the most important, high-impact2financial investigations that suffer the most from 

the absence of Strategic Support funding, as they require additional resources and cutting-edge 

capabilities (e.g., big data analytics, virtual currency tracking, mobile forensics). Undermining 

these major financial investigations will directly impact the ability of Treasury and DHS to 

respond to priority threats such as identity theft, fentanyl trafficking, and network intrusion, and 

to protect the integrity of the U.S. financial system.

In addition, TEOAF tracks future remission payments to third parties as contingent liabilities.

However, these amounts are not recorded as obligations from the Fund until the Department of 

Justice grants the petition for remission. The third parties are predominantly victims of crimes 

 

2A high-impact case refers to a case resulting in a cash forfeiture deposit equal to or greater that $100,000.

$579 $556

$1,143

$931

$524

$1,715

$785 $795

$884

$516

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015* FY 2016 FY 2017

Millions

Forfeiture Revenue from All Sources
TEOAF - 6

that triggered the forfeiture (e.g., Ponzi scheme or kleptocracy victims). Amounts recorded are 

significant because remission payments from multiple years are recorded and carried forward. 

The amounts change constantly as payments are made and amounts for new remission cases are 

added. TEOAF considers the amounts recorded as contingent liabilities as unavailable and

believes that consideration of contingent liabilities provides a more accurate representation of the 

financial position of the Fund.

1.1 – Appropriations Detail Table

Dollars in Thousands

Treasury Forfeiture Fund

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Interest 0 $18,930 0 $24,000 0 $9,000 0 (15,000) 0 -62.50%

Restored Temporary Rescission 0 876,000 0 988,000 0 988,000 0 0 0 0.00%

Restored Sequestration 0 124,327 0 96,050 0 96,690 0 640 0 0.67%

Forfeiture Revenue 0 497,096 0 453,000 0 429,000 0 (24,000) 0 -5.30%

Recovery from Prior Years 0 41,622 0 40,000 0 30,000 0 (10,000) 0 -25.00%

Unobligated Balances from Prior Years 0 1,034,832 0 668,529 0 355,158 0 (313,371) 0 -46.87%

Total Revenue/Offsetting Collections $2,592,807 $2,269,579 $1,907,848 ($361,731) -15.94%

Expenses/Obligations

Asset Forfeiture

Mandatory1 25 $479,446 26 $489,833 26 $450,000 0 ($39,833) 0 -8.13%

Secretary's Enforcement Fund 0 7,014 0 25,898 0 10,000 0 (15,898) 0 -61.39%

Strategic Support2 0 39,768 0 TBD 0 TBD 0 NA 0 NA

Total Expenses/Obligations 25 $526,228 26 $515,731 26 $460,000 0 ($55,731) 0 -10.81%

Rescissions/Cancellations

Sequestration Reduction 3 0 (96,050) 0 (96,690) 0 0 0 96,690 0 -100.00%

Temporary Rescission 0 (988,000) 0 (988,000) 0 0 0 988,000 0 -100.00%

Permanent Cancellation 0 (314,000) 0 (314,000) 0 (400,000) 0 (86,000) 0 27.39%

Total Rescissions/Cancellations ($1,398,050) ($1,398,690) ($400,000) $998,690 -71.40%

Net Results $668,529 $355,158 $1,047,848 $692,690 195.04%

Contingent Liabilities $387,011 $355,000 $350,000 ($5,000) 0 -1.41%

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated4 Estimated $ Change % Change

1 The Treasury Forfeiture Fund is staffed by Departmental Offices employees and positions are funded via reimbursable agreement.

The FTE are shown here for clarity, but are also reflected in the Departmental Offices chapter in the reimbursable FTE total. 

2 For fiscal years 2018 and 2019, Treasury will revise Strategic Support (formerly known as Super Surplus) based on enacted 

appropriations and submit a plan to Congress if funding is available, once more is known about actual collections and expenses.

3 Treasury will compute the FY 2019 sequestration reduction once the OMB Report to Congress on the Joint Committee 

Sequestration for Fiscal Year 2019 is released. 

4 FY 2018 full-year appropriations were not enacted at the time the budget was prepared; therefore, the budget assumes this 

account is operating under the Continuing Appropriations Act, 2018 (Division D of P.L. 115-56, as amended) and that the 2017 

enacted rescission recurs in FY 2018.
TEOAF - 7

1.2 – Operating Levels Table

Dollars in Thousands

Treasury Forfeiture Fund FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

25.2 - Other services from non-Federal sources $56,124 $60,000 $52,000 

25.3 - Other goods and services from Federal sources 159,125 120,000 104,000

26.0 - Supplies and materials 19 19 15

41.0 - Grants, subsidies, and contributions 200,689 208,729 200,000

43.0 - Interests and dividends 32 30 30

44.0 - Refunds 43,557 64,953 55,955

94.0 - Financial transfers 46,682 62,000 48000

Total Non-Personnel $506,228 $515,731 $460,000 

Total Budgetary Resources $506,228 $515,731 $460,000 

FTE 25 26 26
TEOAF - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

TREASURY FORFEITURE FUND

(CANCELLATION)

Of the unobligated balances available under this heading, 

$400,000,000 are hereby permanently cancelled not later than 

September 30, 2019.

(INCLUDING RETURN OF FUNDS)

In addition, of amounts in the Treasury Forfeiture Fund, 

$38,800,000 from funds paid to the United States Government by 

BNP Paribas S.A. as part of, or related to, a plea agreement dated 

June 27, 2014, entered into between the Department of Justice and 

BNP Paribas S.A., and subject to a consent order entered by the 

United States District Court for the Southern District of New York 

on May 1, 2015, in United States v. BNPP, No. 14 Cr. 460 

(S.D.N.Y.), are hereby returned to the General Fund of the 

Treasury.

Note.— A full-year 2018 appropriation for this account was not 

enacted at the time the budget was prepared; therefore, the budget 

assumes this account is operating under the Continuing 

Appropriations Act, 2018 (Division D of P.L. 115-56). The 

amounts included for 2018 reflect the annualized level provided by 

the continuing resolution.

P.L. 114-113 rescinded

$3,800,000,000 of the 

$3,838,800,000 forfeited 

by BNP Paribas in 2015 

and prohibited Treasury 

from obligating the 

remaining balance. 

However, the remaining 

balance will remain in 

the Fund unless returned 

to the General Fund.

Return of these funds to 

Treasury is being done 

solely to remove them 

from the Fund’s account, 

but will not count as 

savings because the 

funds are already 

precluded from 

obligation.

E – Legislative Proposals

The Fund has no legislative proposals for FY 2019.
TEOAF - 9

Section II – Annual Performance Plan and Report

A – Strategic Alignment

The purpose of the Fund is to ensure resources are managed to cover the costs of an effective 

asset seizure and forfeiture program, including the costs of seizure or the proceedings of 

forfeiture and sale, including the expenses of detention, inventory, security, maintenance, 

advertisement, or disposal of the property. Additionally, the Fund is used to support law 

enforcement priorities, financial investigative capabilities, and the seizure of physical and 

financial resources to disrupt and dismantle criminal enterprises. TEOAF supports the following

Department of the Treasury strategic goal and associated objectives:

 Goal 3: Enhance National Security:

o 3.1 Strategic Threat Disruption

o 3.2 AML/CFT Framework

B – Budget and Performance by Budget Activity

2.1.1 - Treasury Forfeiture Fund Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $908,113 $787,849 $4,360,617 $508,746 $526,228 $515,731 $560,045 

Budget Activity Total $908,113 $787,849 $4,360,617 $508,746 $526,228 $515,731 $560,045 

 Measures FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percent of Forfeited Cash 

Proceeds Resulting from 

High-Impact Cases

95.09 86.73 98.25 89.09 81.79 80.00 80.00 80.00

Treasury Forfeiture Fund Budget Activity

Treasury Forfeiture Fund Budget and Performance 

($560,045,000 in obligations from revenue/offsetting collections): 

The Fund continues to measure the performance of the participating law enforcement bureaus 

through the use of the performance measure “Percent of forfeited cash proceeds resulting from 

high-impact cases.” This measures the percentage of forfeited cash proceeds resulting from 

cases that yield a cash forfeiture deposit equal to or greater than $100,000. 

Focusing on strategic cases and investigations that result in high-impact forfeitures will do the 

greatest damage to criminal organizations while accomplishing the ultimate objective, which is 

to disrupt and dismantle criminal activity. Member law enforcement bureaus participating in the 

Fund have met or exceeded the performance target since FY 2013. However; the performance 

declined from 89.09% to 81.79% from FY 2016 to FY 2017. This is attributable to large 

rescissions which resulted in no Strategic Support funding available to the participating agencies

in FY 2015 and FY 2016. For FY 2018 and FY 2019, the target will remain at 80 percent. The 

Fund maintains a target of 80 percent because some cases may be important to pursue, even if 

they are not high-impact cases and result in deposits of less than $100,000. 
TEOAF - 10

With the publication of the Treasury Strategic Plan for FY 2018-2022, Treasury will work in FY 

2018 to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 Budget.

Department of the Treasury

Bureau of Engraving and 

Printing

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
BEP - 2

Table of Contents

Section I – Purpose........................................................................................................................ 3

A – Mission Statement ............................................................................................................... 3

B – Summary of the Request...................................................................................................... 3

1.1 – Appropriations Detail Table.............................................................................................. 5

1.2 – Budget Adjustments Table ................................................................................................ 6

C – Budget Increases and Decreases Description ...................................................................... 6

1.3 – Operating Levels Table ..................................................................................................... 7

D – Appropriations Language and Explanation of Changes...................................................... 7

E – Legislative Proposals........................................................................................................... 8

Section II – Annual Performance Plan and Report................................................................... 8

A – Strategic Alignment............................................................................................................. 8

B – Budget and Performance by Budget Activity...................................................................... 9

2.1 – Manufacturing Resources and Measures........................................................................... 9

C – Change in Performance Meausres ..................................................................................... 10

Section III – Additional Information ........................................................................................ 11

A – Summary of Capital Investments ...................................................................................... 11
BEP - 3

Section I – Purpose

A – Mission Statement

To develop and produce United States currency notes trusted worldwide.

B – Summary of the Request 

The Bureau of Engraving and Printing (BEP) produces and delivers U.S. currency notes for the 

Federal Reserve System ordered by the Board of Governors of the Federal Reserve (FRB) and 

other security products for the Federal Government. BEP began printing currency in 1862 and 

operates on the basis of authority conferred upon the Secretary of the Treasury by 31 U.S.C. 

321(a) (4) to engrave and print currency and other security documents. Operations are financed 

through a revolving fund established in 1950 in accordance with Public Law 81-656. The fund is 

reimbursed for direct and indirect costs of operations, including administrative expenses, through 

product sales. In 1977, Public Law 95-81 authorized BEP to include an amount sufficient to

fund capital investment and to meet working capital requirements in the prices charged for 

products, eliminating the need for appropriations from Congress.

BEP provides technical assistance, advice, and some production services to other federal 

agencies in the development of security documents that require counterfeit deterrent features due 

to their innate value or other characteristics. Other activities at BEP include engraving plates and 

dies; manufacturing inks used to print security products; purchasing materials, supplies and 

equipment; and storing and delivering products in accordance with customer requirements. BEP 

supports the Treasury goals to Boost U.S. Economic Growth and Achieve Operational 

Excellence. 

BEP’s FY 2019 request funds the following projects: 

1. Increasing the Department of the Treasury’s Efficiency and Effectiveness by 

Streamlining Operations: BEP and the United States Mint will streamline certain functions 

by migrating BEP’s online numismatic sales and marketing presence to the Mint’s recently 

modernized E-Commerce infrastructure and services platform, and centrally coordinating 

non-IT procurements, creating economies of scale and reducing expenses. In addition, the 

Budget requests the authority for BEP to print security documents for states. Many states are 

unable to find an American printing firm to produce the documents. These states are turning 

to foreign companies or lowering their security standards. 

2. Banknote Design and Development: In FY 2019, BEP will continue working with the 

Federal Government’s Advanced Counterfeit Deterrent (ACD) Steering Committee to 

research and develop future currency designs for the next family of redesigned notes that will 

enhance and ensure the security and integrity of U.S. currency. The ACD Committee is an 

inter-agency group established to monitor and explore existing and emerging technologies to 

deter the counterfeiting of U.S. currency. It includes representatives from BEP, the 

Department of the Treasury, the U.S. Secret Service, and the FRB. Although many factors 

are taken into consideration, the primary purpose for redesigning currency is to address 

current and potential counterfeiting threats. 
BEP - 4

3. Meaningful Access: BEP continues its work in FY 2019 on redesigning currency to ensure 

that U.S. currency notes are accessible for domestic and international users, including the 

blind and visually impaired, with denominating U.S. currency notes. The three methods BEP 

is pursuing include the continued use of large, high-contrast numerals and different colors on 

currency notes; implementation of a U.S. Currency Reader Program that distributes iBill® 

currency readers (electronic assistive devices that identify a note’s value and communicates it 

to the user) at no cost to those individuals; and the pursuit of a Raised Tactile Feature for 

future currency notes. Throughout FY 2019, the testing and refinement of features will 

continue to determine and shape which processes and potential features work best at the high 

production volumes needed for U.S. currency. 

4. Retooling: BEP is in the process of a multi-year effort to retool its manufacturing processes 

with state-of–the-art intaglio printing presses, electronic inspection systems, and finishing 

equipment. To ensure that BEP will meet the yearly currency order, the FRB and BEP 

developed and established short, medium, and long-term strategic equipment replacement 

plans for the U.S. Currency Program. The successful implementation of this advanced 

technology will improve productivity, reduce environmental impact, and enhance counterfeit 

deterrence of U.S. currency.

5. BEP Workforce: BEP will continues its efforts to fill personnel gaps in needed STEM skill 

sets in FY 2019. In addition throughout FY 2019, BEP will continue to develop, execute, 

and communicate the results of Employee Engagement Plans and the Federal Employee 

Viewpoint Survey (FEVS) annual survey results. 

6. Currency Quality Assurance (CQA) Program: BEP has partnered with the FRB to 

improve its quality management program based on the best practices of leading 

manufacturers. In collaboration with its stakeholders, BEP developed a robust CQA program 

that began in 2014 and will continue to mature in 2019. BEP builds quality into production 

processes. Every BEP work activity is aligned and will be resourced to support the CQA 

program that focuses on every step of the supply chain from raw material, through the 

manufacturing process, to final packaging and delivery. CQA reaches into nearly every 

corner of the organization and its effectiveness depends on a strong cadre of process and 

production engineers, quality assurance specialists and other specialists in related science and 

engineering disciplines.

7. New International Organization for Standardization (ISO) Requirements: ISO has 

published updated standards that BEP must follow to maintain certification. The updated 

ISO 14001:2015 requirements will allow BEP to manage an integrated and proactive 

Environment Management System (EMS) that will better manage the activities on the 

environment and demonstrate sound environmental management. In order to pass 

recertification, BEP must align its Quality Management System (QMS) to the ISO 9001:2015 

standard and its EMS to the ISO 14001:2015 standard no later than September 2018. The 

updated ISO 9001:2015 requirements include a significant expansion of BEP’s QMS, with 

the inclusion of business processes that support currency manufacturing. This includes 

processes that affect people, infrastructure and the operational environment of currency 

manufacturing. The updated ISO 14001:2015 requirements will allow BEP to manage an 
BEP - 5

integrated and proactive EMS that will better manage the effects of BEP activities on the 

environment and demonstrate sound environmental management.

8. Replacement Production Facility: BEP’s current Washington, D.C. facility has an aging 

and outdated infrastructure which drives up costs and adversely impacts quality of the 

currency. In 2019, BEP requests legislative authority to purchase land and construct a new, 

smaller, more efficient currency production facility in the National Capital Region. The FRB

supports this project. The proposal would save $579 million over 10 years, but with an 

additional $22 million in savings in 2029, 2020 and 2031. With a new facility, BEP would 

be able to reduce its space by 28 percent and reduce its annual operating costs by $38 

million. Alternatively, BEP would need to renovate the existing Main and Annex Buildings 

to ensure its ability to meet its mission. 

9. Western Currency Facility Expansion: Producing the next family of redesigned notes

requires that BEP purchase and install new equipment to support the new designs. The 

expansion will provide the space and infrastructure necessary to successfully meet the new 

production requirements. 

1.1 – Appropriations Detail Table

Dollars in Thousands

Bureau of Engraving and Printing

Offsetting Colections

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/ Offsetting Collections:

Federal Reserve Notes $706,420 $770,484 $874,610 $104,126 13.51%

Other Security Products 4,000 5,000 5,000 0 0.00%

Currency Reader Program 2,500 0 0 0 NA

New Production Facility 0 64,000 16,820 (47,180) -73.72%

Total Revenue/Offsetting Collections $712,920 $839,484 $896,430 $56,946 6.78%

Expenses/Obligations:

Direct Manufacturing 721 393,425 724 492,539 724 544,446 0 51,907 0.00% 10.54%

Indirect Manufacturing 1,097 319,495 1,118 346,945 1,112 351,984 (6) 5,039 -0.54% 1.45%

Total Expenses/Obligations 1,818 712,920 1,842 839,484 1,836 896,430 (6) 56,946 -0.33% 6.78%

Net Results 0 0 0 0 NA

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated Estimted $ Change % Change
BEP - 6

1.2 – Budget Adjustments Table

C – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$7,957,000 / +0 FTE

Pay Annualization +$1,195,000 / +0 FTE 

Funds are required for annualization of the January 2018 pay-raise.

Non-Pay +$6,762,000 / +0 FTE 

Funds are required for non-labor costs such as travel, contracts, rent, supplies and equipment.

Program Decreases ...................................................................................-$14,807,000 / -0 FTE

Implement Single Note Inspection - $10,200,000 / -0 FTE 

BEP is implementing this additional production process that will increase manufacturing 

efficiencies.

50 Subject $5 Note Production Begins -$3,707,000 / -0 FTE 

Implementing 50 Subject $5 note production will improve manufacturing efficiencies and 

increase productivity.

Authorize and Implement Phased Retirement -$700,000 / -5 FTE 

Offering a Phased Retirement program at BEP will allow managers to provide mentoring 

opportunities for employees while increasing access to the decades of institutional knowledge 

and experience that these experienced employees can provide. 

Consolidate Transactional HR Services -$200,000 / -1 FTE 

BEP will provide employees with standardized and centralized human resources (HR) processes

by consolidating transactional HR services with a Shared Service Provider.

Dollar in Thousands

Bereau of Engraving and Printing FTE Materials Operating 

& Capital Total

FY 2018 Estimated 1,842 $289,149 $550,335 $839,484 

Changes to Base

Maintaining Current Levels (MCLs) $7,957 $7,957 

Pay Annualization 1,195 1,195

Non-Pay 6,762 6,762

Subtotal Changes to Base 7,957 7,957

Total FY 2019 Base 1,842 $289,149 $558,292 $847,441 

Program Changes

Program Decrease (6) ($9,667) ($5,140) ($14,807)

Implement Single Note Inspection for $100 and $20 notes (9,667) (533) (10,200)

50-subject $5 note production begins (3,707) (3,707)

Authorize and Implement Phased Retirement (5) (700) (700)

Consolidate Transactional HR Services (1) (200) (200)

Program Increase 63,796 63,796 

DC Production Facility Replacement 16,820 16,820 

Western Currency Facility Expansion 46,976 46,976 

Subtotal Program Changes (6) (9,667) 58,656 48,989 

Total FY 2018 Estimated 1,836 $279,482 $616,948 $896,430 
BEP - 7

Program Increases ...................................................................................+$63,796,000 / +0 FTE

DCF Production Facility Replacement +$16,820,000 / +0 FTE

These funds will be used to develop the requirements to support the new facility project. 

Western Currency Facility Expansion +$46,976,000 / +0 FTE

Expansion of the Western Currency Facility is needed to meet redesign currency program 

requirements. 

1.3 – Operating Levels Table

D – Appropriations Language and Explanation of Changes

The BEP receives no appropriated funds from Congress.

Dollars in Thousands

Bureau of Engraving and Printing FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent $165,271 $162,180 $186,268

11.3 – Other than Full-time Permanent Positions 0 150 155

11.5 - Other personnel compensation 19,781 2,100 2,642

11.6 - Overtime 0 15,000 17,000

11.9 - Personnel Compensation (Total) $185,052 $179,430 $206,065

12.0 - Personnel benefits 47,046 47,744 66,633

Total Personnel and Compensation Benefits $232,098 $227,174 $272,698

21.0 - Travel and transportation of persons $1,293 $1,800 $1,800

22.0 - Transportation of things 286 250 250

23.1 - Rental payments to GSA 2,121 2,000 2,000

23.2 Rent Payments to Others 0 1,000 1,000

23.3 - Communication, utilities, and misc charges 15,758 14,000 14,000

24.0 - Printing and reproduction 530 750 750

25.1 - Advisory and assistance services 3,446 4,000 5,000

25.2 - Other services 75,180 133,000 145,422

25.3 - Other purchaes of goods and services from Government Accounts 9 0 0

25.4 - Operation & Maintenance of Facilities 24 8,900 10,000

25.5 - Research & Development Contracts 0 15,000 17,350

25.7 - Operation & Mantenance of Equipment 0 12,000 12,000

26.0 - Supplies and materials 315,452 274,000 260,000

31.0 – Equipment 65,613 145,450 154,000

42.0 – Insurance claims and indemnities 265 160 160

Total Non-Personnel $479,977 $612,310 $623,732

Total Budgetary Resources $712,074 $839,484 $896,430

Budget Activities:

Manufacturing $712,074 $839,484 $896,430

Total Budgetary Resources $712,074 $839,484 $896,430

FTE 1,818 1,842 1,836
BEP - 8

E – Legislative Proposals

BEP requests the authority to print security documents such as birth, marriage, and death 

certificates for states. Many states are unable to find an American printing firm to produce the 

documents. These states are turning to foreign companies or lowering their security standards. In

2019, BEP requests legislative authority to purchase land and construct a new, smaller, more 

efficient currency production facility in the National Capital Region. The FRB supports this 

project. Alternatively, BEP would need to use existing legislative authorities to renovate the 

existing Main and Annex Buildings to ensure its ability to meet its mission. 

Section II – Annual Performance Plan and Report

A – Strategic Alignment

BEP's vision is to be the world’s standard securities printer providing its customers and the

public with superior products through excellence in manufacturing and innovation. BEP 

supports the following Department of the Treasury FY 2018-2022 strategic goals: 

 Goal 1: Boost U.S. Economic Growth 

o 1.3 Trusted Currency and Services 

 Goal 5: Achieve Operational Excellence 

o 5.1 Workforce Management 

o 5.2 Treasury Infrastructure 

o 5.3 Delivering Customer Value 

U.S. currency is used globally and as its designer and manufacturer, BEP needs to achieve and 

maintain best-in-class practices for U.S. currency to be accepted worldwide. Working closely 

with its partners in the U.S. Currency Program, BEP looks forward to developing the next series 

of secure notes. BEP continues to make every effort to meet its mission to manufacture 

sophisticated and technologically advanced notes that are dependable in commerce. This 

achievement requires the focus and determination of the entire agency since BEP faces 

challenges and has committed to stay ahead of increasingly sophisticated counterfeiters. 
BEP - 9

B – Budget and Performance by Budget Activity

2.1 Manufacturing Resources and Measures

Dollars in Thousands

Manufacturing Activity FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Estimated Estimated Estimated

Expenses/Obligations $624,243 $733,208 $778,592 $648,365 $712,920 $839,484 $896,460

Budget Activity Total $624,243 $733,208 $778,592 $648,365 $712,920 $839,484 $896,460

FTE 1,890 1,845 1,781 1,790 1,818 1,842 1,836

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Manufacturing Costs For Currency 

(Dollar Costs Per Thousand Notes 

Produced)

50.45 41.96 42.35 44.25 43.58 50.00 48.00 48.00

Percent of Currency Notes Delivered 

Returned Due to Defects 0.4655 0.00001 0.0000003 0.0000003 0.0000008 0.0001 0.0001 DISC

Currency Notes Delivered Returned Due 

to Defects (parts per million) N/A N/A N/A N/A N/A N/A N/A <1 ppm

Best Places to Work in Federal 

Government Ranking 47 51 74 97 38 99

Upper 

Quartile 

Upper 

Quartile 

Lost Time Accident Rate per 100 

Employees 1.63 1.73 1.65 1.77 1.60 1.80 1.80 1.90

Key: DISC - Discontinued

Manufacturing Budget and Performance

($896,430,000 from reimbursable resources):

Manufacturing Costs for Currency (dollar cost per 1,000 notes produced) is an indicator of 

manufacturing efficiency and effectiveness of program management. The measure is based on 

contracted price factors, productivity improvements and the mix of denominations ordered. 

Actual performance against standard costs depends on BEP’s ability to meet spoilage, efficiency, 

and capacity utilization goals. In FY 2017 the cost of manufacturing was lower than anticipated

due to the success of the $100 Single Note Inspection program; the actual result was $43.58 per 

1,000 notes produced against a target of $48.00. BEP’s target for this performance metric in FY 

2018 and FY 2019 is set at $48.00 per 1,000 notes produced.

The Percent of Currency Notes Returned Due to Defects is an indicator of BEP’s ability to 

provide a quality product. BEP’s FY 2017 target for this performance metric was 0.0001 

percent, and the actual result realized for this measure was 0.0000008 percent. This performance 

indicator will be replaced in FY 2019 with Currency Notes Returned Due to Defects (parts per 

million (ppm)). BEP’s target for this performance metric will be held constant at <1 ppm for FY 

2018 and FY 2019.

BEP’s Best Places to Work in the Federal Government ranking is based on the results of the 

Partnership for Public Service data on three questions in FEVS. BEP’s final FY 2017 ranking

was 38 out of 150. The Partnership will issue updated rankings early in 2018 including more 

agency components. BEP will continue to target an improvement and strives to be in the upper 

quartile in rank.

The Lost Time Accident Rate per 100 employees measures the BEP’s ability to reduce injuries 

and illnesses in the workplace. BEP’s FY 2017 Lost Time Accident rate was at 1.60 cases per 
BEP - 10

100 employees, lower than the target of 1.80 cases per 100 employees. BEP remains committed 

to improving the safety of its employees and has undertaken analysis to determine the root 

causes of injury and to identify best practices in safety. BEP’s target will be held at 1.80 cases 

per 100 employees for FY 2018 and will increase to 1.90 cases per 100 employees in FY 2019.

C – Change in Performance Measures

Performance Measure or Indicator Change and Justification

1. Percent of Currency Notes Delivered 

Returned Due to Defects - discontinued

BEP will replace this indicator with Currency 

Notes Delivered Returned Due to Defects

(parts per million).

2. Currency Notes Delivered Returned Due 

to Defects (parts per million) - new 

Currency Notes Delivered Returned Due to 

Defects (parts per million) is an indicator of the 

BEP’s ability to provide a quality product. The 

data will come from BEP’s internal 

management information system and will be 

reported internally to BEP leadership on a 

monthly basis and annually to the Department. 

With the publication of the Treasury Strategic Plan for FY 2018-2022, BEP will work in FY 

2018 to baseline its performance against the new strategic objectives. This could result in 

additional changes to performance measures in the FY 2020 budget.
BEP - 11

Section III – Additional Information

A – Summary of Capital Investments

BEP capital investment strategy is comprised of several broad investment categories with more 

specific smaller projects in each category. 

BEP’s mission to develop and produce U.S. currency notes trusted worldwide demands that BEP 

continually update and improve its manufacturing processes by investing in new technologies 

and innovations. BEP’s retooling project replaces older, fully depreciated production equipment. 

Replacing out of date equipment allows BEP to be more quality driven, cost effective and 

efficient in meeting customer requirements for the production of currency notes. In addition, 

BEP is building the capability to produce new currency designs with tactile features to provide 

meaningful access to currency for the blind and visually impaired.

BEP participates as a partner in significant Treasury-wide, enterprise-level investments such as 

Treasury Enterprise Identity, Credential and Access Management, HRConnect (a Human 

Resources Line of Business service provider), and the Treasury Learning Management System.

BEP’s IT portfolio includes a “cloud first” approach to implementing business systems. The 

Oracle eBusiness Suite is an integrated manufacturing suite which runs at the Oracle 

Corporation’s “Federal on Demand” Shared Service Center in Austin, Texas. 

A summary of FY 2018 capital investment resources, including major information technology 

and non-technology investments, can be found at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of the Treasury

United States Mint

Congressional Budget 

Justification and Annual 

Performance Report and Plan

FY 2019
MINT - 2

Table of Contents

Section I – Budget Request........................................................................................................... 3

A – Mission Statement ............................................................................................................... 3

B – Summary of the Request...................................................................................................... 3

1.1 – Resource Detail Table ....................................................................................................... 5

1.2 – Budget Adjustments Table ............................................................................................... 5

C – Budget Increases and Decreases Description ...................................................................... 6

1.3 – Operating Levels Table ..................................................................................................... 7

D – Appropriations Language and Explanation of Changes...................................................... 8

E – Legislative Proposals........................................................................................................... 8

Section II – Annual Performance Plan and Report................................................................... 9

A – Strategic Alignment............................................................................................................. 9

B – Budget and Performance by Budget Activity.................................................................... 10

2.1.1 – Manufacturing Resources and Measures...................................................................... 10

Section III – Additional Information ........................................................................................ 13

A – Summary of Capital Investments ...................................................................................... 13
MINT - 3

Section I – Budget Request

A – Mission Statement

Enables America’s economic growth and stability by protecting assets entrusted to us and 

manufacturing coins and medals to facilitate national commerce.

B – Summary of the Request 

In Fiscal Year (FY) 2019, the Mint’s total estimated budgetary requirements for operations, 

metal, and capital investments are $2.97 billion. This budget will support the production of 14.5

billion circulating coins, as well as the production of bullion and other numismatic products 

sufficient to meet customer demand. The Mint has one budget activity:

Manufacturing, which encompasses the bureau’s two major programs, circulating coinage

and numismatic products (including bullion coins, collector coins, and national medals). 

To maintain its reputation as one of the finest mints in the world, the Mint is committed to 

operating according to the core values of service, quality, and integrity. The Mint has three 

strategic goals to help fulfill its mission and values: 1) to foster a safe, flexible, diverse, and 

engaged workforce; 2) to improve mission critical activities and governance; and 3) to integrate 

technology into operations and support lines. These goals align with Treasury Strategic Goals 

1 and 5: to boost U.S. economic growth and to achieve operational excellence. 

In an effort to align more closely with Treasury’s strategic goal of achiving operational 

excellence, the Bureau of Engraving and Printing (BEP) and the Mint will streamline certain 

functions by migrating BEP’s online numismatic sales and marketing presence to the Mint’s 

recently modernized E-Commerce infrastructure and services platform and centrally 

coordinating non-IT procurements, creating economies of scale and reducing expenses.

Mint operations are funded through the Mint Public Enterprise Fund (PEF), 31 U.S.C. § 5136. 

The Mint generates revenue through the sale of circulating coins to the Federal Reserve Banks 

(FRB), numismatic products to the public, and bullion coins to authorized purchasers. All 

circulating and numismatic operating expenses, along with capital investments incurred for the 

Mint’s operations and programs, are paid out of the PEF. By law, all funds in the PEF are 

available without fiscal year limitation. Revenues determined to be in excess of the amount 

required by the PEF are transferred to the United States Treasury General Fund.

Circulating

Circulating coin production projections are based on current economic data and forecasts of FRB 

coin orders. Circulating coin production for FY 2018 and FY 2019 is forecasted at 14.0 and 14.5

billion coins, respectively. This level reflects a 0.5 percent decrease for FY 2018 and three

percent increase in FY 2019 in shipments of all coin denominations as compared to 14.1 billion 

in FY 2017. Circulating financial performance continues to be affected by the costs of the inputs 

for producing the coinage.
MINT - 4

Numismatic Program

The numismatic program, which includes bullion coins, is designed to prepare and distribute 

premium products to collectors and those who desire quality versions of coinage. Numismatic 

products are priced to cover metal and production costs.

Bullion Coins 

The bullion coin program provides the public a means to acquire precious metal coins as part of 

an investment portfolio. In FY 2017, bullion demand declined to 24.7 million ounces from the 

45.1 million ounces sold in FY 2016. Demand for bullion is forecasted at 36.9 million ounces in 

FY 2018 and 34.8 million ounces in FY 2019. Bullion revenue is forecasted to be $2.0 billion in 

both FY 2018 and FY 2019.

Numismatic (Collector Coins and Medals)

The numismatic program provides high-quality versions of circulating coinage, precious metal 

coins, commemorative coins, and national medals for sale to the public. Numismatic revenue 

decreased by six percent from $413 million in FY 2016 to $387 million in FY 2017. The 

decrease was driven primarily by lower customer demand for numismatic products in the fourth 

quarter of FY 2017. Total units decreased by six percent from 4.2 million in FY 2016 down to 

3.9 million in FY 2017. FY 2018 and FY 2019 numismatic revenues are projected to be $327

million and $305 million, respectively, as demand for numismatic products is projected to 

continue to decrease to 3.8 million in FY 2018 and 3.7 million in FY 2019.

 
MINT - 5

1.1 – Resource Detail Table

1.2 – Budget Adjustments Table

Dollars in Thousands

United States Mint

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections 

Other Income

Circulating 0 $871,919 0 $840,000 0 $882,000 0 $42,000 NA 5.00%

Bullion/Numismatic 0 $1,766,282 0 $2,364,609 0 $2,346,893 0 ($17,716) NA -0.75%

Total Revenue/Offsetting Collections 0 $2,638,201 0 $3,204,609 0 $3,228,893 0 $24,284 NA 0.76%

Expenses/Obligations

Manufacturing

Circulating 954 $480,405 989 $647,852 989 $653,461 0 $5,608 0.0% 0.87%

Bullion/Numismatic 691 $1,723,504 716 $2,296,932 716 $2,316,815 0 $19,884 0.0% 0.87%

Total Expenses/Obligations 1,645 $2,203,909 1,705 $2,944,784 1,705 $2,970,276 0 $25,492 0.00% 0.87%

Net Results 1,645 $434,292 1,705 $259,825 1,705 $258,617 0 ($1,208) 0.00% -0.46%

Coin Shipments (Units In Millions/Coins) FY 2017 FY 2018 FY 2019

Circulating:

One Cent 8,426 8,500 8,700

5-Cent 1,306 1,300 1,400

Dime 2,410 2,400 2,500

Quarter 1,926 1,800 1,900

Half-Dollar - - -

Dollar - - -

Total Circulating 14,067 14,000 14,500

FY 2017 FY 2018 FY 2019

Budget Category Actual Estimated Estimated

Administrative Operating Costs $375,489 $414,284 $419,776

Capital Investments $39,099 $40,500 $40,500

Metals and Materials Costs $1,789,321 $2,490,000 $2,510,000

Total Resources $2,203,909 $2,944,784 $2,970,276

Note: Total Capital Investment budget includes Statutory Limit for Circulating/Protection Capital $30M and Numismatic Capital budget at $10.5M.

0.0%

0.8%

0.9%

% Change

1.33%

0.0%

0.0%

3.6%

FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Actual Estimated Estimated $ Change % Change

% Change

2.4%

7.7%

4.2%

5.6%

Dollars in Thousands

United States Mint FTE Materials Operating & 

Capital Total

FY 2018 Original Estimate 1,801 $2,240,000 $454,784 $2,694,784 

Adjustment to Estimate - Metals Due to Forecasted Decrease in Circulating Coin Production ($30,000) ($30,000)

Adjustment to Estimate - Metals Due to Forecasted Increase in Numismatic Coin Metals Prices $280,000 $280,000 

Adjustment to FTE Requirements (96)

Revised FY 2018 Estimated Resources 1,705 2,490,000 454,784 2,944,784 

Changes to Base

Maintaining Current Levels (MCLs) $5,492 $5,492 

Pay Annualization $1,011 $1,011 

Non-Pay $4,481 $4,481 

Subtotal Changes to Base $5,492 $5,492 

Total FY 2019 Base 1,705 $2,490,000 $460,276 $2,950,276 

Program Changes

Program Increases $20,000 $20,000 

Metals Due to Forecasted Increase in Circulating Coin Production $20,000 $20,000 

Subtotal Program Changes $20,000 $20,000 

Total FY 2019 Estimated 1,705 $2,510,000 $460,276 $2,970,276 
MINT - 6

C – Budget Increases and Decreases Description

FY 2018 Revised Estimated Resources ...............................................+$250,000,000 / -96 FTE

Metal Due to Forecasted Decrease in Circulating Coin Production, -$30,000,000 / -0 FTE

Circulating coin production for FY 2018 is forecasted at 14 billion, a 13 percent decrease from 

the 16 billion coins originally planned. As a result of this decrease in production levels, the 

amount and cost of metal to be purchased for the circulating coin program is reduced.

Metal Due to Forecasted Increase in Numismatic Coin Metal Prices, +$280,000,000 / -0 FTE

FY 2018 forecasted increases in metal prices results in an increase in the cost of the metal to be 

purchased for the numismatice/bullion coin programs. 

FTE Requirements, $0 / -96 FTE

To align with the Administration’s initiative to improve Government efficiency and 

effectiveness, the Mint implemented staffing streamlining efforts in FY 2017. Further staffing 

reviews to ensure appropriate staffing levels for maximum efficiency resulted in a reduction in 

the estimated FTE necessary for 2018 from 1,801 to 1,705.

FY 2019 Budget Increases and Decreases Description.......................... +$25,492,000 / -0 FTE

Maintaining Current Levels (MCLs) ......................................................+$5,492,000 / +0 FTE

Pay Annualization +$1,011,000 / +0 FTE

Funds are required for the annualization of the January 2018 pay raise.

Non-Pay +$4,481,000 / +0 FTE 

Funds are required for non-labor expenses such as travel, contracts, rent, supplies, and 

equipment.

Program Increases ...................................................................+$20,000,000 / +0 FTE

Metal Due to Forecasted Increase in Circulating Coin Metal Prices, $20,000,000 / +0 FTE

FRB demand for circulating coins is forecasted to increase slightly from FY 2018 to FY 2019 

(from 14.0 to 14.5 billion coins). This increase, coupled with forecasted increases in metal 

prices, results in an increase in overall production costs for the circulating program.
MINT - 7

1.3 – Operating Levels Table

Dollars in Thousands

United States Mint FY 2017 FY 2018 FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 130,392 147,165 147,165 

11.3 - Other than full-time permanent 599 161 161 

11.5 - Other personnel compensation 12,365 12,729 12,729 

11.9 - Personnel Compensation (Total) 143,356 160,055 160,055 

12.0 - Personnel benefits 49,490 51,729 52,740 

13.0 - Benefits for former personnel 144 1,019 1,019 

Total Personnel and Compensation Benefits $192,990 $212,803 $213,814 

21.0 - Travel and transportation of persons 1,621 2,703 2,703 

22.0 - Transportation of things 28,524 28,702 28,702 

23.1 - Rental payments to GSA 455 450 500 

23.2 - Rental payments to others 15,198 13,995 13,945 

23.3 - Communication, utilities, and misc charges 13,502 17,358 17,358 

24.0 - Printing and reproduction 3,551 1,550 1,550 

25.1 - Advisory and assistance services 46,259 52,810 55,095 

25.2 - Other services 21,448 28,797 30,052 

25.3 - Other purchases of goods & serv frm Govt accounts 19,113 21,372 22,313 

25.4 - Operation and maintenance of facilities 4,847 3,185 3,185 

25.5 - Research and development contracts 815 1,913 1,913 

25.6 - Medical care 707 460 460 

25.7 - Operation and maintenance of equip 7,585 7,887 7,887 

26.0 - Supplies and materials 1,805,973 2,507,928 2,527,928 

31.0 - Equipment 29,423 31,057 31,057 

32.0 - Land and structures 11,879 11,814 11,814 

42.0 - Insurance claims and indemnities 3 0 0 

43.0 - Interest and dividends 16 0 0 

Total Non-Personnel 2,010,919 2,731,981 2,756,462 

New Budgetary Resources $2,203,909 $2,944,784 $2,970,276 

FTE 1,645 1,705 1,705 
MINT - 8

D – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

UNITED STATES MINT PUBLIC ENTERPRISE FUND

Federal Funds

Pursuant to section 5136 of title 31, United States Code, the United States 

Mint is provided funding through the United States Mint Public Enterprise 

Fund for costs associated with the production of circulating coins, 

numismatic coins, and protective services, including both operating 

expenses and capital investments: Provided, That the aggregate amount of 

new liabilities and obligations incurred during fiscal year 2019 under such 

section 5136 for circulating coinage and protective service capital

investments of the United States Mint shall not exceed $30,000,000.

Note.—A full-year 2018 appropriation for this account was not enacted at 

the time the budget was prepared; therefore, the budget assumes this account 

is operating under the Continuing Appropriations Act, 2018 (Division D of 

P.L. 115–56, as amended). The amounts included for 2018 reflect the 

annualized level provided by the continuing resolution.

E – Legislative Proposals

Alternative Metal Composition

This proposal would give the Secretary the authority to prescribe the compositions of the nickel,

dime, and quarter-dollar coins, provided that the new metal compositions do not affect the 

electromagnetic signature (EMS), color, or weight of the coins.

There are two basic compositions that are under consideration. The first, 80/20 composition 

which is a leaner version of the cupronickel (currently in production) has a nominal composition 

of 77 percent copper, 20 percent nickel and 3 percent manganese as compared to the current 

cupronickel composition of 75 percent copper and 25 percent nickel. The 80/20 material is 

applicable to 5-cent, dime, and quarter production. There is minimal to no risk as this alloy has 

been tested internally and externally and is seamless to our current coinage. Incremental annual

savings are approximately $4 million depending on volume and metal prices at the time of 

production.

The second composition respresents the leanest composition that provides a seamless EMS, 

comparable color and feasibility of large scale production. It is a nominal composition of 50.75

percent copper, 14 percent nickel, 33 percent zinc and 2.1 percent manganese. This leaner alloy 

is cladded to a copper core for the 10-cent and 25-cent. This contains less of the more expensive 

nickel and copper than the current coinage material. While there is some risk associated with this 

composition, testing and adjustments continue in order to mitigate risk. Incremental savings 

(depending on volume and metal prices) are projected at $16.6 million annually.

By authorizing the Secretary the flexibility to implement small changes to the copper-nickel 

circulating coin metal compositions, the Mint could realize incremental material savings with 

little or no impact to the vending industry or general public.
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Section II – Annual Performance Plan and Report

A – Strategic Alignment

The Mint aligns with the following Department of the Treasury’s Strategic Plan for FY 2018-

2022 goals: 

 Goal 1: Boost U.S. Economic Growth

o Objective 1.3 Trusted Currency and Services: Deliver trusted currency and services 

that enable citizens and businesses to participate in the economy.

 Goal 5: Achieve Operational Excellence 

o Objective 5.1 Workforce Management: Deliver trusted currency and services that 

enable citizens and businesses to participate in the economy.

o Objective 5.2 Treasury Infrastructure: Better enable mission delivery by improving 

the reliability, security, and resiliency of Treasury’s infrastructure.

o Objective 5.3 Delivering customer value: Improve customer value by increasing the 

quality and lowering the cost of Treasury’s products and services.

Initiatives to support the goals outlined in Treasury’s strategic plan include the Mint and BEP

partnering to streamline certain functions by migrating BEP’s online numismatic sales and 

marketing presence to the Mint’s recently modernized E-Commerce infrastructure and services 

platform and centrally coordinating non-IT procurements, creating economies of scale and 

reducing expenses.

Circulating Coinage Program

Circulating coinage includes the minting and issuing of pennies, nickels, dimes, and quarterdollars. The Mint delivers circulating coinage to the FRBs in quantities to support their service 

to commercial banks and other financial institutions. These financial institutions then meet the 

coinage needs of retailers and the public. The Mint recognizes revenues from the sale of 

circulating coins at face value when they are shipped to the FRBs.

The Mint will continue to mint and issue circulating quarter-dollar coins honoring America’s 

national parks and other national sites, in accordance with the America the Beautiful National 

Parks Quarter Dollar Coin Act of 2008 (Public Law 110-456). In 2018, the Mint will release 

quarters honoring Pictured Rocks National Lakeshore (Michigan), Apostle Islands National 

Lakeshore (Wisconsin), Voyageurs National Park (Minnesota), Cumberland Island National 

Seashore (Georgia), and Block Island National Wildlife Refuge (Rhode Island). In 2019, the 

Mint will release quarters honoring Lowell National Historical Park (Massachusetts), American 

Memorial Park (North Mariana Islands), War in the Pacific National Historical Park (Guam), 

San Antonio Missions National Historical Park (Texas), and Frank Church River of No Return 

Wilderness (Idaho).

Numismatic Program

Bullion Coins 

The Mint produces and issues gold, silver, platinum, and palladium bullion coins to authorized 

purchasers through the American Eagle, American Buffalo, and America the Beautiful Silver 

Bullion Coin Programs to fulfill investor demand. The authorized purchasers agree to maintain 

an open, two-way market for these coins, ensuring their availability for consumers who desire 
MINT - 10

them for investment portfolios. Demand for bullion coins is greatly influenced by the 

performance of other investment options, such as equities or currency markets, and therefore is 

highly unpredictable. The content and purity of the precious metal in the bullion coins are 

backed by the United States Government.

Other Numismatic Products 

The Mint’s numismatic program provides high-quality versions of circulating coinage, precious 

metal coins, commemorative coins, and national medals for sale directly to the public. For some 

numismatic products, authorizing legislation specifies program requirements, such as design 

theme, mintage level, and duration of product availability. Other programs are structured by law 

to grant the Secretary of the Treasury discretion in determining product specifications. 

The Mint will continue to mint and issue $1 coins commemorating the important contributions 

made by Indian tribes and individual Native Americans to the development and history of the 

United States in accordance with the Native American $1 Coin Act (Public Law 110-82).

Commemorative coins are authorized by law to recognize and honor people, places, events, 

institutions, and other subjects of historic or national significance. Each coin is minted and 

issued by the Mint in a limited quantity and is available only for a limited time. Included in the 

price is a surcharge that is authorized to be paid to the designated recipient organizations, 

assuming all legal requirements have been met. Recipient organizations must use the proceeds 

for the purposes specified in the enabling legislation. In 2018, the Mint has authorization to mint 

commemorative coins for two programs: the World War I American Veterans Centennial 

Commemorative Coin (Public Law 113-212) and the Breast Cancer Awareness Commemorative 

Coin (Public Law 114-148). In 2019, the Mint has authorization to mint commemorative coins 

for two programs: the Apollo 11 50th Anniversary Commemorative Coin (Public Law 114-282) 

and the American Legion 100th Anniversary Commemorative Coin (Public Law 115-65).

B – Budget and Performance by Budget Activity

2.1.1 Manufacturing Resources and Measures

Dollars in Thousands

 Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

Expenses/Obligations $3,525,178 $2,861,632 $2,937,553 $3,272,106 $2,203,909 $2,944,784 $2,970,276 

Budget Activity 

Total $3,525,178 $2,861,632 $2,937,553 $3,272,106 $2,203,909 $2,944,784 $2,970,276 

FTE 1,705 1,661 1,657 1,695 1,645 1,705 1,705

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Customer Satisfaction Index (%) 92.6 89.8 89.5 91 91.7 90 90 90

Numismatic Sales Units (Million Units) 5.5 5.7 5.4 4.2 3.9 4.4 3.5 3.5

Safety Incident Recordable Rate 2.9 3.31 3.42 2.53 1.96 2.83 2.75 2.75

Seigniorage per Dollar Issued ($) 0.24 0.37 0.49 0.52 0.45 0.48 0.49 0.43
MINT - 11

Manufacturing Budget and Performance

($2,970,276,000 from offsetting collections) The Mint will mint and issue circulating coins and 

produce numismatic products, including bullion, to meet demand.

Description of Performance:

Several key performance measures are used to gauge the bureau’s progress in achieving its 

strategic goals and to assess its Manufacturing Budget Activity performance.

Customer Satisfaction Index (CSI)

The Mint conducts a quarterly survey of a random sample of active numismatic customers. The 

survey is intended to capture customer satisfaction with the Mint’s service performance as a coin 

products supplier and with the quality of specific products. The CSI metric is a quantitative 

score summarizing the survey’s results into one consolidated value. This metric gauges 

performance results in the effort to achieve the Mint’s internal strategic plan goal, “Improve 

mission critical activities and governance,” and the strategic objective linked to this goal, “Drive 

a customer-centric organization.”

By the end of FY 2017, the CSI reached 91.7 percent, exceeding its 90.0 percent target. The Mint 

anticipates the FY 2018 and 2019 CSI ratings will remain steady. The performance target for 

CSI remains at 90.0 percent for both FY 2018 and FY 2019.

Numismatic Sales Units

The numismatic sales unit metric measures public demand for coin products sold from 

numismatic operations. This metric also measures performance results achieving the Mint’s 

internal strategic plan goal, “Improve mission critical activities and governance,” as well as the 

strategic objective linked to this goal, “Drive a customer-centric organization.”

In FY 2017, the Mint sold 3.9 million units, 11 percent below the fiscal year target of 4.4 million 

units. The primary drivers for the lower than anticipated results was a shortfall in sales of annual 

precious metal coins, partially due to an overabundance of coin products available on the 

secondary market, and the conclusion of the Presidential $1 Coin program. A lack of market 

enthusiasm for the FY 2017 commemorative coins also contributed to the shortfall. 

Accordingly, numismatic unit sales performance targets have been established at 3.5 million 

units for both FY 2018 and FY 2019. To meet these targets, the Mint plans to continue to 

provide high-quality products and maintain outstanding customer service. 

Safety Incident Recordable Rate

The safety incident recordable rate is the number of injuries and illnesses meeting the 

Occupational Safety and Health Administration recording criteria per 100 full-time workers. It 

measures the occurrence of work-related incidents involving death, lost-time and restricted work, 

loss of consciousness, and medical treatment. The safety incident recordable rate indicates 

performance results in the effort to achieve the Mint’s internal strategic plan goal, “Foster a safe, 

flexible, diverse, and engaged workforce,” and the corresponding strategic objective linked to 

this goal, “Continue to cultivate a safe working environment.”
MINT - 12

By the end of FY 2017, the total recordable case rate reached 1.96, well below the Mint’s 2.82 

FY 2017 target, and significantly below the most recent industry average rate of 5.2 published in 

2015 by the U.S. Bureau of Labor Statistics for the Non-Automotive Metal Stamping industry.

During FY 2017, the Mint continued implementing and updating risk management guidelines to 

prioritize resources, mitigating risks in advance of injuries or catastrophic events at each 

plant. Mint facility leadership and employees continue to interact on a daily basis on the 

importance of safety.

The performance targets for the safety incident recordable rate are 2.75 for both FY 2018 and 

FY 2019.

Seigniorage per Dollar Issued

Seigniorage per dollar issued is the financial return on circulating operations, calculated as 

seigniorage divided by the total face value of circulating coins shipped to the FRBs. It measures 

the cost effectiveness of minting and issuing the United States’ circulating coinage. It also 

measures performance results achieving the Mint’s internal strategic plan goal, “Improve mission 

critical activities and governance,” as well as the strategic objective linked to the goal, “Achieve 

operational advancements in lines of operations.”

At the end of FY 2017, Seigniorage per dollar issued was $0.45, below the FY 2017 performance 

target of $0.48. FY 2017 results fell below targeted and prior year performance as a result of a 

14 percent decrease in circulating shipment volumes, combined with a four percent increase in 

the cost of metal.

The United States Mint expects production volumes to remain low and per-unit metal prices to 

increase as market prices are expected to escalate in FY 2018. The seigniorage per dollar issued 

performance targets are set at $0.43 in FY 2018 and FY 2019 each year.

Performance Measure Changes 

With the publication of Treasury’s Strategic Plan for FY 2018-2022, Mint will work this year to 

baseline performance against the new strategic objectives. This could result in changes to 

performance measures in the FY 2020 budget.
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Section III – Additional Information

A – Summary of Capital Investments

The Mint’s capital investment requirements are predominantly for manufacturing-type 

equipment. Capital investments, along with its operating expenses, are paid out of the Mint’s

PEF. Legislation caps the aggregate amount of new liabilities and obligations incurred during a

fiscal year for capital investments in circulating coinage operations and protective service. 

The Mint's manufacturing capital investment projects focus on safety, equipment replacement, 

protection, and facility improvements.

In addition, the Mint’s capital investments encompass a robust information technology (IT) 

portfolio of investments and programs that modernize and secure the bureau’s infrastructure. 

The bureau’s governance structures ensure that the IT portfolio is managed in accordance with 

cost, schedule, risk, and performance goals, and that expected results and benefits are achieved. 

Enterprise architecture reviews assess and reinforce alignment to the bureau’s strategic plan and 

the strategic enterprise direction of the Department of the Treasury.

In accordance with the Statement of Federal Financial Accounting Standard (SFFAS) No. 6, the 

Condition Index and the Deferred Maintenance assessments for purposes of Federal Real 

Property Profile, the Mint has no deferred maintenance for its equipment. Maintenance is 

scheduled and performed regularly to keep the manufacturing equipment operating at optimal 

levels.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at https://www.treasury.gov/about/budgetperformance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department of Treasury

Office of the Comptroller of the 

Currency

Congressional Budget

Justification and Annual 

Performance Report and Plan

FY 2019 
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Table of Contents

Section I – Purpose........................................................................................................................ 3

A – Mission Statement................................................................................................................ 3

B – Summary of the Request ...................................................................................................... 3

1.1 – Resource Detail Table........................................................................................................ 5

1.3 – Operating Levels Table...................................................................................................... 6

D – Appropriations Language and Explanation of Changes ...................................................... 6

E – Legislative Proposals............................................................................................................ 6

Section II – Annual Performance Plan and Report................................................................... 7

A Strategic Alignment ................................................................................................................ 7

B – Budget and Performance by Budget Activity ...................................................................... 8

2.1.1 Supervise Resources and Measures................................................................................... 8

Supervise Budget and Performance ............................................................................................ 8

2.1.2 – Regulate Resources and Measure Table ....................................................................... 11

Regulate Budget and Performance............................................................................................ 11

2.1.3 – Charter Budget and Performance Plan.......................................................................... 12

Charter....................................................................................................................................... 12

Section III – Additional Information ........................................................................................ 13

A – Summary of Capital Investments....................................................................................... 13
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Section I – Purpose

A – Mission Statement

To ensure that national banks and federal savings associations operate in a safe and sound 

manner, provide fair access to financial services, treat customers fairly, and comply with 

applicable laws and regulations.

B – Summary of the Request

The Office of the Comptroller of the Currency (OCC) was created by Congress in 1863 to 

charter national banks; oversee a nationwide system of banking institutions; and ensure national 

banks are safe and sound, competitive and profitable, and capable of serving in the best possible 

manner the banking needs of their customers. Effective on July 21, 2011, Title III of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), transferred to the 

OCC the responsibility for the supervision of federal savings associations and rulemaking 

authority for all federal savings associations.

As of September 30, 2017, the OCC supervised 944 national bank charters and 50 federal 

branches of foreign banks in the United States with total assets of approximately $11.3 trillion, 

and 353 federal savings associations with total assets of approximately $760 billion. In total, the 

OCC supervises approximately $12.1 trillion in financial institution assets.

Goals:

The OCC has established three goals outlined in its strategic plan that help support a strong 

economy for the American public: 1) A vibrant and diverse system of national banks and federal 

savings associations that supports a robust U.S. economy; 2) “One OCC” focused on 

collaboration, innovation, coordination, and process efficiency; 3) The OCC is firmly positioned 

to continue to operate independently and effectively into the future. To achieve its goals and 

objectives, the OCC organizes its programs under three activities: 1) Supervise, 2) Regulate, and 

3) Charter. Effective supervision and a comprehensive regulatory framework are the key tools 

that the OCC uses to ensure that national banks and federal savings associations operate in a safe 

and sound manner and that they provide fair access to financial services and fair treatment of 

their customers. A robust chartering program allows new entrants into the financial services 

sector while ensuring that they have the necessary capital, managerial, and risk management 

processes to conduct activities in a safe and sound manner.

The OCC’s priorities focus on strengthening the resiliency of the institutions subject to its 

jurisdiction through its supervisory and regulatory programs and activities. A stronger and more 

resilient banking system directly supports three of the Department of the Treasury’s (Treasury) 

FY 2018-2022 strategic goals: Boost U.S. Economic Growth, Promote Financial Stability; 

Enhance National Security, and Goal 5) Achieve Operational Excellence.

Operations are funded primarily (approximately 97 percent) from semiannual assessments levied 

on national banks and federal savings associations. Revenue from investments in Treasury 

securities and other income comprise the remaining three percent of the OCC’s funding. The 

OCC does not receive congressional appropriations to fund any portion of its operations. 
OCC - 4

FY 2018 and 2019 Priorities

A major focus of the OCC’s supervisory, regulatory, and charter programs for FY 2018 and 

forward involve reviews of existing regulations to consider changes consistent with safety and 

soundness and fair treatment of bank customers with the goal of enhanced regulatory 

coordination, reducing unnecessary regulatory burden, and increasing examination efficiency.

The OCC is observing signs that credit risk is building, including erosion in the underwriting 

standards for commercial, commercial real estate, and auto lending. Therefore, the OCC will 

continue to closely evaluate current underwriting standards by conducting targeted underwriting 

examinations and using the credit underwriting assessment tool. The OCC will be working to 

implement its strategic initiatives to make the OCC a stronger and more effective organization. 

The OCC will conduct examinations based on the risk profile of individual national banks and 

federal savings associations to ensure they are safe and sound, sufficiently capitalized, and 

comply with consumer protection laws and regulations. Priorities and activities will include 

supervisory reviews related to corporate governance and oversight, credit underwriting, 

compliance, cyber threats, operational risk, Bank Secrecy Act/Anti Money Laundering

(BSA/AML) under delegated authority from Treasury’s Financial Crimes Enforcement Network 

(FinCEN) and in line with Federal Financial Institutions Examination Council (FFIEC) guidance,

and fair access. Examiners will work to resolve problem national bank and federal savings 

association situations effectively by identifying problems at the earliest possible stage, clearly 

communicating concerns and expectations to bank management through appropriate enforcement 

actions, and ensuring timely follow-up on needed corrective actions. An additional priority for 

the OCC involves revisiting the Community Reinvestment Act for the purpose of evaluating its 

modernization to reflect the evolution of the banking industry and ensuring that its original intent 

to assess the degree which insured depository institutions are serving the credit needs of the 

communities in which they operate remains valid. 
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1.1 – Resource Detail Table

Dollars in Thousands

Office of the Comptroller of the 

Currency FY 2017 FY 2018 FY 2019 FY 2018 to FY 2019

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments 0 1,177,055 0 1,204,600 0 1,243,000 0 38,400 0.00% 3.19%

Interest 0 20,445 0 20,000 0 20,400 0 400 0.00% 2.00%

Other Income 0 18,416 0 16,200 0 16,500 0 300 0.00% 1.85%

Unobligated Balances from Prior 

Years 0 1,404,742 0 1,510,000 0 1,395,000 0 (115,000) 0.00% -7.62%

Total Revenue/Offsetting 

Collections 0 2,620,658 0 2,750,800 0 2,674,900 0 (75,900) .00 (2.76)%

Expenses/Obligations

Supervise 3,498 993,680 3,531 1,213,352 3,568 1,124,318 37 (89,034) 1.05% -7.34%

Regulate 324 92,151 327 112,523 331 104,266 4 (8,257) 1.22% -7.34%

Charter 86 24,426 87 29,825 88 27,637 1 (2,188) 1.15% -7.34%

Total Expenses/Obligations 3,908 1,110,257 3,945 1,355,700 3,987 1,256,221 42 (99,479) 1.06% -7.34%

Net Results 0 1,510,401 0 1,395,100 0 1,418,679 0 23,579 .00 1.69%

Notes:

 The FY 2018 estimated increase is attributable to an additional contribution payment to the Pentegra Defined Benefit Plan, a 

legacy retirement plan that covers staff inherited from the Office of Thrift Supervision.

 The Comptroller may impose and collect assessments, fees or other charges as necessary or appropriate to carry out his 

responsibilities and to meet the expenses of the OCC. 12 U.S.C. 482. At September 30, 2017, the net position of the OCC 

was $1.39 billion. Of this amount, the OCC set aside $179.7 million for ongoing operations. Since early 2017, the OCC has 

also maintained a contingency of $100 million within its net position to act as receiver of those national trust banks which are 

not FDIC-insured.

 The Comptroller has sole authority to determine how OCC funds are obligated and its expenses incurred and paid. 12 U.S.C. 

16.

 OCC funds are not appropriated funds or government monies. 12 U.S.C. 481.

 As part of its annual budget formulation process, the OCC re‐evaluates the size of the reserve based on a disciplined analysis 

of the impact of material events on its ability to fund operations.
OCC - 6

1.3 – Operating Levels Table

Dollars in Thousands

Office of the Comptroller of the Currency FY 2017 FY 2018* FY 2019

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 538,012 577,328 607,139

11.3 - Other than full-time permanent 7,989 7,274 7,517

11.5 - Other personnel compensation 2,778 3,503 3,639

11.9 - Personnel Compensation (Total) 548,779 588,105 618,295

12.0 - Personnel benefits 239,280 433,629 301,485

13.0 - Benefits for former personnel 201 150 150

Total Personnel and Compensation Benefits $788,260 $1,021,884 $919,930

21.0 - Travel and transportation of persons 56,358 61,050 62,381

22.0 - Transportation of things 2,772 2,622 2,375

23.1 - Rental payments to GSA 57 58 58

23.2 - Rental payments to others 67,334 68,500 66,500

23.3 - Communication, utilities, and misc. charges 17,645 18,393 18,925

24.0 - Printing and reproduction 578 637 637

25.1 - Advisory and assistance services 34,720 30,817 31,607

25.2 - Other services 25,992 29,507 28,048

25.3 - Other purchases of goods & serv frm Govt accounts 9,708 9,640 9,552

25.4 - Operation and maintenance of facilities 6,388 7,410 8,138

25.7 - Operation and maintenance of equip 67,978 72,704 74,902

26.0 - Supplies and materials 7,067 8,168 7,973

31.0 – Equipment 25,241 23,415 24,297

32.0 - Land and structures 94 500 500

42.0 - Insurance claims and indemnities 65 395 398

Total Non-Personnel 321,997 333,816 336,291

Total Budgetary Resources $1,110,257 $1,355,700 $1,256,221

FTE 3,908 3,945 3,987

*The FY 2018 estimated increase is attributable to an additional contribution payment to the Pentegra Defined Benefit Plan, 

a legacy retirement plan that covers staff inherited from the Office of Thrift Supervision. 

D – Appropriations Language and Explanation of Changes

The OCC receives no appropriations from Congress.

E – Legislative Proposals

The OCC has no legislative proposals.
OCC - 7

Section II – Annual Performance Plan and Report

A Strategic Alignment

For FY 2018 and FY 2019, the OCC’s bank supervision program specifically supports the 

following Department of the Treasury’s FY 2018 - 2022 strategic goals:

 Goal 1) Boost U.S. Economic Growth

o 1.2 – Strong Economic Fundamentals

 Goal 2) Promote Financial Stability

o 2.4 – Financial Sector Critical Infrastructure and Cybersecurity

 Goal 3) Enhance National Security

o 3.1 – Strategic Threat Disruption

o 3.2 – AML/CFT Framework

 Goal 5) Achieve Operational Excellence

o 5.1 – Workforce Management

o 5.2 – Treasury Infrastructure

o 5.3 – Customer Value

As such, the OCC’s nationwide staff of bank examiners conducts on-site reviews of banks and 

provides sustained supervision of these institutions’ operations. Examiners analyze asset quality, 

capital adequacy, earnings, liquidity, and sensitivity to market risk for all banks, and assess 

compliance with federal consumer protection laws and regulations. Examiners also evaluate 

management’s ability to identify and control risk, and assess banks’ performance in meeting the 

credit needs of the communities in which they operate, pursuant to the Community Reinvestment 

Act (CRA).

In addition, under the bank supervision program, the OCC will also:

 Approve or deny applications for new charters, branches, capital, or other changes in 

corporate or banking structure;

 Take supervisory and enforcement actions against banks that do not comply with laws and 

regulations or that otherwise engage in unsafe or unsound practices;

 Remove and prohibit officers and directors, negotiate agreements—both formal (i.e., public) 

and informal (i.e., non-public)—to change banking practices, and issue cease-and-desist 

orders as well as Civil Money Penalties; and

 Issue rules and regulations, legal interpretations, supervisory guidance, and corporate 

decisions governing investments, lending, and other practices.

Note that the OCC is in the process of formulating its FY 2019 – FY 2023 Strategic Plan. The 

OCC’s annual performance plan will be updated for FY 2019 to reflect any new and relevant 

priorities.
OCC - 8

B – Budget and Performance by Budget Activity

2.1.1 Supervise Resources and Measures

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $873,942 $889,111 $873,414 $975,477 $993,680 $1,213,352 $1,124,318

Budget Activity Total $873,942 $889,111 $873,414 $975,477 $993,680 $1,213,352 $1,124,318

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percent of National Banks and 

Federal Savings Associations with 

Composite CAMELS Rating 1 or 2

80.0 87.0 91.0 93.0 94.0 90.0 90.0 90.0

Percentage of National Banks and 

Federal Savings Associations That 

Are Categorized As Well 

Capitalized 

94.0 93.0 95.0 96.0 97.0 95.0 95.0 95.0

Percentage of National Banks and 

Federal Savings Associations With 

Consumer Compliance Rating of 1 

or 2

94.0 95.0 96.0 98.0 97.0 94.0 94.0 94.0

Rehabilitated National Banks And 

Federal Savings Associations As A 

Percentage Of Problem National 

Banks One Year Ago (CAMEL 3,4, 

or 5)

34.0 39.0 39.0 43.0 40.0 40.0 40.0 40.0

Total OCC Costs Relative To 

Every $100,000 in Bank And 

Federal Savings Associations 

Assets Regulated ($)

9.99 9.75 9.37 9.65 9.49 10.16 10.00 10.00

Supervise Budget and Performance

($1,213,352,000 from revenue/offsetting collections):

An effective supervision program is the cornerstone of the OCC’s activities that support its 

strategic goals. Specifically, the Supervise Program consists of ongoing supervision and 

enforcement activities that directly support the OCC’s strategic goals to 1) ensure that each 

national bank and federal savings association is operating in a safe and sound manner and is 

complying with applicable laws, rules, and regulations relative to the financial institution and 

the customers and communities it serves, and 2) provide fair access to financial services and 

fair treatment of customers. Assessing the condition and risk management practices of 

national banks and federal savings associations, and requiring corrective actions when 

weaknesses are found, directly supports Treasury’s goal to promote financial stability. The 

OCC has terminated several mortgage servicing-related consent orders, involving Civil Money 

Penalties, and took enforcement actions to address unfair billing practices, unsafe and unsound 

sales practices, violations of the Service Members Civil Relief Act, and violations of the Bank 

Secrecy Act.

Description of Performance:
OCC - 9

Percentage of National Banks and Federal Savings Associations with Composite CAMELS 

Rating of 1 or 2:

The composite Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and 

Sensitivity (CAMELS) rating reflects the overall condition of a national bank or federal 

savings association. Bank regulatory agencies use the Uniform Financial Institutions Rating 

System, CAMELS, to provide a general framework for evaluating all significant financial, 

operational, and compliance factors inherent in a national bank or federal savings association. 

The rating scale is 1 through 5 of which 1 is the highest rating granted. These CAMELS 

ratings are assigned at the completion of every supervisory cycle or when there is a significant 

event leading to a change in CAMELS. 

The OCC established a target outcome measure that 90 percent of the institutions under its 

supervision have a composite CAMELS rating of 1 or 2. Such a rating is consistent with the 

strategic goal of a safe and sound banking system, that banks maintain adequate capital and 

liquidity and have strong risk management practices. As of September 30, 2017, 94 percent of 

national banks and federal savings associations earned composite CAMELS ratings of either 1 

or 2. Degradation in CAMELS can reflect weaknesses in risk management systems that need 

corrective action. The OCC, consistent with Treasury’s goals of boosting U.S. economic 

growth and promoting financial stability, has instructed bank examiners to identify and seek 

corrective action at an earlier stage to address potential problems or weaknesses. The OCC’s 

primary focus is to ensure that CAMELS ratings are an accurate reflection of each institution's 

current financial position, and thus the OCC would not take action to prematurely restore a 

favorable CAMELS rating.

Percentage of National Banks and Federal Savings Associations that are Considered WellCapitalized:

The Federal Deposit Insurance Act established a system that classifies insured depository 

institutions into five categories (well capitalized, adequately capitalized, undercapitalized, 

significantly undercapitalized, and critically undercapitalized) based on their capital levels 

relative to their risks. The OCC established a target outcome measure that 95 percent of 

national banks and federal savings associations will meet or exceed the well-capitalized 

threshold. 

The OCC works closely with problem national banks and federal savings associations to 

develop rehabilitation plans. Such plans typically include directives to improve or restore 

capital levels. These efforts, combined with a more stable operating environment, have 

resulted in improvement in this performance measure since FY 2009. As of September 30, 

2017, 97 percent of national banks and federal savings associations were classified as well 

capitalized.

Percentage of National Banks and Federal Savings Associations with Consumer Compliance 

Rating of 1 or 2:

To ensure fair access to financial services and fair treatment of national bank and federal 

savings association customers, the OCC evaluates an institution’s compliance with consumer 

laws and regulations. Bank regulatory agencies use the Uniform Financial Institutions Rating 

System, Interagency Consumer Compliance Rating, to provide a general framework for 
OCC - 10

evaluating significant consumer compliance factors inherent in an institution. Each institution 

is assigned a consumer compliance rating based on an evaluation of its present compliance 

with consumer protection and civil rights statutes and regulations, and the adequacy of its 

operating systems designed to ensure continuing compliance. Ratings are on a scale of 1 

through 5 of which 1 is the highest rating granted. The target for FY 2018 and FY 2019 will 

currently remain unchanged at 94 percent. As of September 30, 2017, national banks and 

federal savings associations continue to show strong compliance with consumer protection 

regulations with 97 percent earning a consumer compliance rating of either 1 or 2. Under the 

Dodd-Frank Act, the OCC has enforcement and supervisory authority for those institutions 

with total assets of no more than $10 billion. 

Rehabilitated National Banks and Federal Savings Associations as a Percentage of Problem 

National Banks and Federal Savings Associations One Year Ago:

The OCC’s early identification and intervention with problem financial institutions can lead to 

a successful rehabilitation. As of September 30, 2017, 40 percent of national banks and 

federal savings associations with composite CAMELS ratings of 3, 4, or 5 one year ago have 

improved their ratings to either 1 or 2 this year. This is aligns with the target of 40 percent for 

FY 2018 and FY 2019. The OCC continues to focus on the early identification and 

rehabilitation of problem institutions. 

As previously noted, the OCC continuously takes steps through its Supervise and Regulate 

programs to make national banks and federal savings associations more resilient to financial 

stresses and to identify and obtain corrective action at an earlier stage, when problems can be 

addressed most successfully. These efforts include heightened capital and liquidity standards 

and increased emphasis on the need for stress testing, designed to provide financial institutions 

with stronger capital buffers to withstand unforeseen events. These are multi-year efforts that 

will continue in FY 2018 and beyond. 

Total OCC Costs Relative to Every $100,000 in National Bank and Federal Savings 

Association Assets Regulated:

Beginning in FY 2006, the OCC implemented a performance measure that reflects the 

efficiency of its operations while meeting the increasing supervisory demands of a growing 

and more complex national banking system. 

The OCC costs are those reported as total program costs on the annual audited Statement of 

Net Cost. National bank and federal savings association assets are those reported quarterly by 

national banks and federal savings associations on the Reports of Condition and Income. 

Total national bank and federal savings association assets represent the growth and complexity 

of the financial institutions under the jurisdiction of the OCC. This measure supports the 

OCC’s strategic goal of efficient use of agency resources. The OCC’s ability to control its 

costs while ensuring the safety and soundness of national banks and federal savings 

associations benefits all national bank and federal savings association customers. As of 

September 30, 2017, total OCC cost relative to every $100,000 in assets regulated was $9.49

compared to the FY 2017 target of $10.16. The OCC continues to meet its efforts to ensure 

that resources are used prudently and that programs are carried out in a cost effective manner.
OCC - 11

2.1.2 – Regulate Resources and Measure Table

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $111,783 $105,436 $103,574 $90,463 $92,151 $112,523 $104,266

Regulate Budget and Performance

($112,523,000 from revenue/offsetting collections):

The Regulate Program supports the OCC’s strategic goal of a vibrant and diverse system of 

national banks and federal savings associations that supports a robust U.S. economy. 

Specifically, the Regulate Program consists of ongoing activities that result in the establishment 

of regulations, policies, operating guidance, and interpretations of general applicability to 

national banks and federal savings associations. These regulations, policies, and interpretations 

may establish system-wide standards, define acceptable national banking and federal savings 

association practices, provide guidance on risks and responsibilities facing national banks and 

federal savings associations, or prohibit (or restrict) national banking or federal savings 

association practices deemed to be imprudent or unsafe. They also establish standards for 

ensuring fair access to financial services and fair treatment of national bank and federal savings 

association customers. This program includes establishing examination policies and handbooks; 

interpreting administrative, judicial, and congressional proceedings; and establishing the 

applicable legal and supervisory framework for new financial services and products.

Description of Performance: 

OCC undertook a number of activities in FY 2017 to reduce regulatory burden on and support 

responsible innovation by regulated institutions. The agency issued a Framework for 

Responsible Innovation. OCC, along with the other federal banking agencies and FFIEC, 

completed and issued its report to Congress under the Economic Growth and Regulatory 

Paperwork Reduction Act (EGRPRA). As included in the report, OCC proposed and finalized a 

number of rule changes to reduce regulatory burden. A new, streamlined Call Report for small 

financial institutions was finalized. Eligibility for the 18-month examination cycle was 

expanded to cover a larger population of regulated community bank institutions. OCC proposed 

increasing the threshold for commercial real estate transactions above which an appraisal is 

required. The agency completed a Framework for Receivership of Uninsured Federally 

Chartered National Banks, and completed a number of rules and guidance issuances, covering 

such topics as swaps margin, bank stress test scenarios, third-party relationships, appraiser 

shortages, and the new accounting standard on financial instrument – credit losses. The OCC 

continued to support operations of the Financial Stability Oversight Council, and participate in 

the Federal Financial Institutions Examination Council and other national and international 

financial service regulation and policy bodies.
OCC - 12

2.1.3 – Charter Budget and Performance Plan

Dollars in Thousands

Resource Level FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $30,486 $19,262 $18,922 $23,978 $24,426 $29,825 $27,637

Budget Activity Total $30,486 $19,262 $18,922 $23,978 $24,426 $29,825 $27,637

Measure FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2017 FY 2018 FY 2019

Actual Actual Actual Actual Actual Target Target Target

Percentage of Licensing Applications 

and Notices Completed within 

Established Timeframes

97.0 98.0 97.0 98.0 96.0 95.0 95.0 95.0

Charter

($29,825,000 from revenue/offsetting collections): 

The Charter Program consists of ongoing activities that result in the chartering of national banks 

and federal savings associations and the evaluation of the permissibility of structures and 

activities of national banks and federal savings associations and their subsidiaries. This includes 

the review and approval of new national bank and federal savings association charters, federal 

branches and agencies, mergers, acquisitions, conversions, business combinations, corporate 

reorganizations, changes in control, operating subsidiaries, branches, relocations, and 

subordinated debt issuances. By supporting the entry of new products and institutions into the 

financial system with a national charter in a manner consistent with safety and soundness, the 

Charter Program supports the OCC’s strategic goals of assuring safety and soundness while 

allowing national banks and federal savings associations to offer a full competitive array of 

financial services. 

Description of Performance:

Percentage of Licensing Applications and Notices Completed within Established Time Frames:

The OCC’s timely and effective approval of corporate applications contributes to the nation’s 

economy by enabling national banks and federal savings associations to complete various 

corporate transactions and introduce new financial products and services. Delays in providing 

prompt decisions on applications and notices can deprive a national bank or federal savings 

association of a competitive or business opportunity, create business uncertainties, or diminish 

financial results. Time frames have been established for completing each type of application and 

notice. As of September 30, 2017, the OCC completed 96 percent of national bank and federal 

savings association applications and notices within the required time frame, above the target of 

95 percent. The OCC will continue to meet its Charter Program goals by providing staff 

training, coordination between charter and supervisory staff on safety and soundness and 

compliance matters, issuance of updated procedures, and maintaining an emphasis on 

accessibility and early consultation with national bank and federal savings association organizers 

and others proposing national bank and federal savings association structure changes.
OCC - 13

Section III – Additional Information

A – Summary of Capital Investments

The OCC’s IT strategic plan aligns information technology initiatives and investments to the 

OCC’s core mission, including the development of new or enhanced applications and services 

and the disposition of redundant or “end-of-lifecycle” applications, capabilities, and services. 

The IT strategic plan is implemented through the budget formulation and the Capital Planning 

and Investment Control processes. These processes ensure that all IT investments are aligned 

with the OCC’s mission, goals, objectives, and target enterprise architecture before a project is 

funded. The OCC IT strategy ensures adequate funding and staff resources to address IT 

investment priorities, and considers risk mitigation strategies for IT investments that are not 

meeting stated cost, time, and performance goals. Performance metrics are linked to the 

delivery, alignment, and achievement of the OCC’s strategic program objectives. Cost 

effectiveness for each investment is evaluated through regular benchmarking studies, featuring 

peer group organizations. Key metrics used to evaluate infrastructure include availability, 

reliability, utilization, defects, and customer satisfaction.

FY 2018 and 2019 Plans: The OCC has 4 major IT initiatives in FY 2018 and 2019: 

Servers Support Services (SSS) - The SSS supports the OCC’s server Operations and 

Maintenance. The infrastructure staff continues to build out additional capacity at the colocation facility to support the server technology refresh, business resiliency, and increases in 

enterprise storage capacity. 

Telecommunications Services and Support (TSS) - TSS includes telecommunications Wide Area 

Network (WAN) and Local Area Network (LAN) infrastructure. Remote access to the OCC 

systems is facilitated via a virtual private network, dial-in, and cellular wireless access using 

two-factor authentication. This also includes messaging services supporting highly mobile bank 

examiners and the OCC staff. In FY 2018, the OCC will continue an on-going effort to upgrade 

the headquarters and field office phone systems and telecom infrastructure including LAN/WAN

hardware, Video Tele-Conferencing and Voice over Internet Protocol.

End User Services and Support (EUSS) - EUSS includes help desk/customer service support, 

personal computer hardware and software operations and maintenance, asset management, and 

desktop engineering and image management. 

Cyber Security (CS) – CS includes technologies, processes, and practices aligned to protect 

networks, computers, programs and data from attack, damage or unauthorized access. In 

alignment with new Federal and Treasury requirements, the OCC is transitioning the Agency's 

systems and applications into Information System Continuous Monitoring (ISCM) and Ongoing 

Authorization (OA). This effort will define OCC's strategy and implementation plan for 

transitioning to ISCM/OA, to include establishing governance framework, completing 

assessment & authorizations, pilot transitions and the deployment of required tools. In FY 2018, 

the Enterprise Disaster Recovery (eDR) facility will be brought online to provide highly reliable, 

secure, expandable, and cost-effective eDR solution for OCC’s critical business systems.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.
International Programs

The Department of the Treasury’s FY 2019 budget request for International Programs is included 

in the State, Foreign Operations, and Other Related Programs Appropriation.