U.S. Department of the Treasury 

FY 2011 Budget in Brief 

Summary of FY 2011 President’s Budget 

Executive Summary ....................................................................................................................................... 1 

Summary Tables and Charts 

FY 2011 President’s Budget by Function............................................................................................... 1 

FY 2011 President’s Budget by Strategic Goal ...................................................................................... 9 

Fiscal Year Comparison of Full-Time Equivalent (FTE) Staffing .......................................................... 10 

Summary of FY 2011 Increases and Decreases ................................................................................. 11
 

Appropriated Accounts – Bureau Program Detail 

Departmental Offices ................................................................................................................................... 13 

Department-wide Systems and Capital Investment Program....................................................................... 21 

Office of Inspector General .......................................................................................................................... 25 

Treasury Inspector General for Tax Administration ..................................................................................... 29 

Special Inspector General for TARP ............................................................................................................ 33 

Community Development Financial Institutions Fund .................................................................................. 37 

Financial Crimes Enforcement Network ....................................................................................................... 43 

Alcohol and Tobacco Tax and Trade Bureau .............................................................................................. 47 

Financial Management Service ................................................................................................................... 53 

Bureau of the Public Debt ............................................................................................................................ 61 

Internal Revenue Service ............................................................................................................................ 65 

Non-Appropriated Accounts – Bureau Program Detail 

Emergency Economic Stabilization Act Programs ....................................................................................... 81 

Housing Government Sponsored Enterprise Programs ............................................................................... 87 

Treasury Franchise Fund ............................................................................................................................. 91 

Bureau of Engraving and Printing ................................................................................................................ 95 

United States Mint ....................................................................................................................................... 99 

Office of the Comptroller of the Treasury ................................................................................................... 103 

Office of Thrift Supervision ........................................................................................................................ 109 

Treasury International Programs 

Treasury International Program ................................................................................................................. 113 

Supplemental Information
 

Summary of FY 2011 Appropriations Language ........................................................................................ 121 

Total Funding Levels for the FY 2011 President’s Budget – Treasury Chapter ......................................... 136 

Detail of Other Treasury Accounts ............................................................................................................. 137 

Financial Reform ....................................................................................................................................... 149 

IT Dashboard and E-GOV Initiatives .......................................................................................................... 153 
The information presented in this FY 2011 Budget in Brief is accurate and complete as of February 1, 2010. Any 

updated information will be reflected in the budget available on the Treasury Department website, www.treas.gov. 
(Dollars in Thousands) 

Departmental Offices Salaries and Ex penses* 278,870 131,000 304,888 346,401 41,513 13.6% 

Dept-wide Sy stems & Capital Inv est. Programs 26,975 9,544 22,000 12,456 130.5% 

Office of Inspector General 26,125 29,700 30,269 569 1.9% 

Treasury IG for Tax Administration 146,083 7,000 152,000 155,452 3,452 2.3% 

Special IG for TARP 0 23,300 49,600 26,300 112.9% 

Community Dev elopment Financial Institutions Fund 107,000 100,000 246,750 250,000 3,250 1.3% 

Financial Crimes Enforcement N etw ork 91,465 111,010 100,419 (10,591) -9.5% 

Alcohol & Tobacco Tax and Trade Bureau 99,065 103,000 106,168 3,168 3.1%

 Less Offsetting Fees 0 0 -106,168 (106,168) 100.0% 

Net, ATTB 99,065 103,000 0 (103,000) -100.0% 

Treasury Forfeiture Fund** -30,000 -90,000 -62,000 28,000 -31.1% 

Fiscal Serv ice Operations $417,137 $0 $426,376 $411,238 $15,138 3.6% 

Financial M anagement Serv ice 239,785 244,132 235,253 (8,879) -3.6% 

Bureau of the Public Debt 187,352 192,244 185,985 (6,259) -3.3%

 Less Offsetting Fees -10,000 -10,000 -10,000 0 0.0% 

Net, BPD 177,352 182,244 175,985 (6,259) -3.4% 

Tax Administration $11,522,598 $80,000 $12,146,123 $12,633,270 $487,147 4.0% 

IRS Tax pay er Serv ices 2,293,000 2,278,830 2,321,975 43,145 1.9% 

IRS Enforcement 5,117,267 5,504,000 5,797,400 293,400 5.3% 

IRS Operations Support 3,867,011 4,083,884 4,108,000 24,116 0.6% 

IRS Business Sy stems M odernization 229,914 263,897 386,908 123,011 46.6% 

IRS H ealth Insurance Tax C redit Administration 15,406 80,000 15,512 18,987 3,475 22.4% 

1,493,802 2,043,670 2,957,176 913,506 44.7% 

25,000 25,000 38,000 13,000 52.0% 

60,000 60,000 70,000 10,000 16.7% 

T otal $14,264,120 $318,000 $15,591,361 $17,001,825 $1,410,464 9.0% 

FY 2009 FY 2010 FY 2011 

President's Increase/ Percent 

Enacted ARRA Enacted Budget Decrease Change 

Management & Financial $745,583 $238,000 $890,192 $892,141 $1,949 0.2% 

Total, Treasury Appropriations Committee $12,685,318 $318,000 $13,462,691 $13,936,649 $473,958 3.5% 

Treasury International Programs $1,578,802 $2,128,670 $3,065,176 $936,506 44.0% 

International Financial Institutions 

Technical Assistance 

Debt Restructuring 

*ARRA funding includes $122 Million for IRS, $6 Million for FMS and $3 Million for DO. 

**In both FY 2009 and FY 2010, the Administration proposed a permanent cancellation of a portion of the Fund's unobligated balances. 

In both of these years, Congress enacted appropriations legislation that made the rescissions temporary. 

EXECUTIVE SUMMARY 

FY 2011 President's Budget by Function 

Overview 

The Department of the Treasury continues to 

play a leading role in stabilizing the economy 

and reforming our financial system following 

one of the worst crises since the Great 

Depression. The Department’s FY 2011 

Budget supports the critical work that 

Treasury is doing to ensure that the financial 

industry plays by new, safer rules, and to spur 

growth in the face of unacceptably high 

unemployment. 

The FY 2011 Budget provides $13.9 billion to 

fund activities at the Department’s ten 

appropriated bureaus. The Budget provides 

almost $474 million more than the FY 2010 

enacted level, a 3.5 percent increase. The 

Budget also includes $3.065 billion to fund 

Treasury’s International Programs. 

The Department has set three high priority 

performance goals for FY 2010 and FY 2011: 

Department of the Treasury - Budget in Brief FY 2011 Page 1
•	 Repair and reform the financial system; 

•	 Increase voluntary tax compliance; and 

•	 Significantly increase the number of costsaving, paperless transactions with the 

public. 

These goals reflect key areas of concern to the 

Department and the American people. The 

Budget supports work toward these goals as 

discussed below. See the High Priority 

Performance Goals section for measures, 

milestones, and indicators of success at 

achieving these goals. 

Goal 1: Repair and reform the financial 

system 

The Department is engaged in a broad array of 

programs to stabilize the financial system, put 

in place new rules to help prevent the 

recurrence of a crisis similar to the one that 

just occurred and promote long-term stability. 

Financial Regulatory Reform – The Department is working with Congress to enact 

legislation to reform an outdated and 

ineffective financial regulatory system. The 

goals are simple: to promote more robust 

supervision and regulation of financial firms, 

especially the largest, most complex and most 

interconnected firms that can pose the greatest 

risk to overall stability; to establish comprehensive regulation of financial markets, 

including those now largely outside the 

regulatory ambit; to protect consumers and 

investors; provide the government with more 

powerful tools to manage financial crises and 

resolve failing firms that can threaten overall 

stability; and to improve international 

cooperation. Further information on the 

Department’s reform efforts can be found at 

http://financialstability.gov/roadtostability/reg 

ulatoryreform.html or the Regulatory Reform 

chapter of this document. Additionally, the 

Department is engaged internationally through 

the Financial Stability Board, the G-20 and 

other forums to develop high-quality financial 

standards and processes around the globe to 

help avert future crises. 

Expanding Treasury’s Policymaking and 

Analysis Capacity – The FY 2011 Budget 

continues efforts begun in FY 2010 to provide 

additional resources for the Offices of 

Domestic Finance, Tax Policy, and Economic 

Policy. The events of the past year have 

demonstrated that the Department needs to 

expand the capacity of the Department in 

order to more effectively respond to current 

and future financial challenges. 

These efforts include providing an additional 

$16.7 million for the Office of Domestic 

Finance to: 

•	 Expand expertise in capital markets, 

including in securities market structure and 

housing finance; 

•	 Conduct significant research projects 

drawing on interdisciplinary expertise in 

areas such as finance, economics, and law; 

and 

•	 Provide leadership in developing and 

implementing financial regulatory policy. 

The FY 2011 Budget also provides an 

additional $2.4 million to the Office of Tax 

Policy for new tax specialists, who will: 

•	 Analyze recently emerging issues critical to 

the development of tax policies; and 

•	 Provide rapid response to financial crises, 

support the financial stimulus plan, and 

provide timely tax analysis for climate 

change and health care related provisions. 

Additionally, the Budget includes $2 million 

to expand the Office of Economic Policy to: 

•	 Address the demand for more economic 

analysis and ensure swift, effective analysis 

of policies and shifting events in the 

housing and financial sectors; and 

Department of the Treasury - Budget in Brief FY 2011 Page 2
•	 Create a data analysis unit to maintain the 

Department’s large financial and nonfinancial databases. 

Evaluation Initiative – As part of the 

Administration's government-wide initiative 

to strengthen program evaluation, the request 

includes funds to support four substantive 

program evaluations at a total cost of $5.3 

million. These evaluations include: 

•	 Testing alternative mortgage modification 

strategies; 

•	 Testing the impact of financial innovations 

in community development; 

•	 A study linking data on individual 

mortgages to administrative data to better 

assess mortgage risk, including the factors 

associated with success of mortgage 

modification programs; and 

•	 A combined study to evaluate different 

approaches to no-fee debit cards and 

Volunteer Income Tax Assistance (VITA) 

prepaid cards. 

Emergency Economic Stabilization Act 

(EESA) Programs – The Troubled Asset 

Relief Program (TARP), established under 

EESA, has played a significant role in 

averting a potentially catastrophic collapse of 

the American financial system. As a result of 

improved financial conditions and careful 

stewardship of the program, the ultimate cost 

to the taxpayer of TARP investments is likely 

to be significantly lower than previously 

estimated. However, challenges remain in the 

form of rising foreclosures and a persistently 

high unemployment rate. For these reasons, 

the Department announced the extension of 

TARP authority until October 3, 2010. The 

Department will continue trying to help 

responsible homeowners avoid foreclosure, 

and will implement additional ways to get 

needed credit to job-creating small businesses. 

To ensure appropriate oversight of TARP 

activities, the Budget provides $49.6 million 

for the Special Inspector General for the 

Troubled Asset Relief Program (SIGTARP). 

Housing Government Sponsored 

Enterprise (GSE) Programs – Using 

authority granted under the Housing and 

Economic Recovery Act of 2008 (HERA), the 

Department has sought to stabilize and repair 

the two largest GSEs, the Federal National 

Mortgage Association (Fannie Mae) and 

Federal Home Loan Mortgage Corporation 

(Freddie Mac), as well as the Federal Home 

Loan Banks (FHLB). These efforts have 

restored investor confidence that the GSEs 

will continue to play their critical roles in 

maintaining the smooth functioning of the 

nation’s housing and mortgage markets. 

Treasury has helped ensure the viability of the 

GSEs by purchasing over $200 billion in GSE 

mortgage-backed securities, and has helped 

state and local housing finance agencies 

obtain needed financing to aid low- and 

moderate-income Americans. The Department will continue to promote stability in the 

GSE securities market and ensure the viability 

of the GSEs. 

Community Development Financial 

Institutions (CDFI) Fund – The FY 2011 

Budget will expand the availability of 

affordable credit in distressed communities by 

providing a 30 percent increase in funding for 

the CDFI Fund’s core merit-based grant 

program – the CDFI Program – and continued 

robust support for Native Initiatives. The 

Budget also includes resources for two new 

initiatives: the Healthy Food Financing 

Initiative (HFFI) and the Bank On USA 

initiative. HFFI will provide grants and loans 

to help expand the availability of healthy 

foods in distressed communities, while Bank 

on USA will promote access to affordable and 

appropriate financial services and basic 

consumer credit products for households 

without access to such products and services. 

Department of the Treasury - Budget in Brief FY 2011 Page 3
Recovery Act Activities – Under the American Recovery and Reinvestment Act of 2009 

(Recovery Act), Treasury administers cash 

assistance, payments in lieu of tax credits, and 

over 50 tax relief provisions, which will 

deliver over $300 billion in assistance to 

American families and businesses. In addition, the Department is easing the fiscal 

crisis of state and local governments through 

the creation and expansion of innovative, lowcost borrowing tools. 

ARRA increased access to financing in 

economically distressed communities by 

expanding existing Community Development 

Financial Institutions (CDFI) and Native 

American CDFI Assistance programs. The 

Build America Bond (BAB) program has 

attracted new investors to the municipal bond 

market and reduced borrowing costs for state 

and local governments hard hit by the decline 

in tax revenues. BAB issuances in 2009, 

totaling nearly $64 billion, have been used to 

finance hospital and school construction, as 

well as other public infrastructure projects 

around the country. New cash payments in 

lieu of tax credits for investments in lowincome housing and renewable energy 

established by the Recovery Act injected $4 

billion into state housing agency budgets and 

$2 billion into the renewable energy industry. 

These sums attracted new private sector 

investment at better than a 2-to-1 ratio. Onetime Economic Recovery Payments issued by 

the Financial Management Service in 2009 

helped to ease the financial strain on 55 

million Social Security beneficiaries and 

veterans. The Making Work Pay provision 

allowed American workers and families to 

keep more of what they earned. The expanded 

First-Time Homebuyer tax credit enabled 

taxpayers to receive a credit towards home 

purchases. 

Goal 2: Increase voluntary tax compliance 

The tax gap, or difference between the amount 

owed under tax law and the amount actually 

paid on time, is estimated to be $345 billion. 

Addressing this gap through improved 

voluntary compliance is a top priority of the 

Department. The Department proposes to improve compliance through targeted changes to 

the tax code and further investment in tax 

enforcement, taxpayer services, and Internal 

Revenue Service (IRS) systems modernization. 

Tax Compliance and Debt Collection 

Legislative Proposals – The Budget includes 

a number of legislative proposals that will 

improve tax collection efficiency and lead to 

increased collections with minimum 

additional burden on taxpayers. These 

proposals include efforts to expand information reporting, improve compliance by 

businesses, strengthen tax administration, 

expand penalties, and improve debt collection 

activities. In total these proposals are expected to increase collections by $26 billion 

over the next ten years. Further information 

on these proposals can be found in the 

Treasury 2010 Green Book (available at 

http://www.treas.gov/offices/tax-policy/). 

Tax Enforcement – The Budget provides 

nearly $250 million in new enforcement 

initiatives to improve compliance. These 

initiatives are expected to produce $1.946 

billion in additional annual enforcement 

revenues once the new hires reach full 

potential in FY 2013 (see table below for 

return on investment (ROI) figures). FY 2011 

initiatives will build on the foundation 

established in the FY 2010 Budget to address 

international tax evasion, and reduce 

noncompliance by businesses and high networth taxpayers. The new funding will focus 

on complex international enterprise structures 

Department of the Treasury - Budget in Brief FY 2011 Page 4
and transactions. It also will be used to efforts to bring taxpayers who fail to file or 

increase audit coverage of business and high- pay their tax debt into compliance. 

income taxpayer returns, as well as increase 

Return on Investment for Enforcement Initiatives 

Full Performance (FY 2013) 

FY 2011 Enforcement Investment Cost Revenue ROI Cost Revenue ROI 

$209.6 $1,946.2 9.3 

Direct Revenue Producing Initiatives $236.9 $719.8 3.0 $200.6 $1,946.2 9.7 

101.3 812.2 8.0 

65.8 659.6 10.0 

33.5 474.4 14.2 

Other Enforcement Initiatives $10.5 $0.0 0.0 $9.0 $0.0 0.0 

Dollars in Millions 

First Year (FY 2011) 

All Enforcement Initiatives $247.4 $719.8 2.9 

Address Business and Individual International Compliance 121.1 300.8 2.5 

Reduce the Reporting Compliance Tax Gap 77.7 211.7 2.7 

Reduce the Nonfiling and Underpayment Tax Gap 38.1 207.3 5.4 

Taxpayer Service – Quality taxpayer service 

is an important complement to enforcement 

efforts. Recent legislation has increased the 

volume of calls to 1-800 service lines at the 

IRS, leading to longer wait times and 

unanswered calls. The FY 2011 Budget 

provides $20.9 million to increase the level of 

service for 1-800 lines to achieve a 75 percent 

call answer rate, up from the FY 2009 rate of 

70 percent. The Budget also includes $25 

million for infrastructure improvements to 

IRS.gov. This multi-year project will improve 

self-service, reduce taxpayer burden, increase 

compliance, reduce costs, and continue to 

position IRS.gov as the preferred choice for 

taxpayer service. 

IRS Systems Modernization – The Budget 

provides $386.9 million for the IRS’s 

Business Systems Modernization account, a 

significant investment in advancing tax 

administration. These resources will allow for 

the completion of the new taxpayer account 

database in 2011, making this new service 

available for the 2012 filing season. The new 

database will improve taxpayer service 

through faster refunds and resolution of 

taxpayer account issues, eliminate notices 

based on out-of-date information, and allow 

daily mailing of notices which will reduce 

spikes in telephone call volumes associated 

with the current weekly mailing of notices. 

Goal 3: Significantly increase the number of 

paperless transactions with the public 

The Department is committed to moving to 

paperless processing throughout its bureaus 

and programs, including increasing the 

number of payments and collections made 

electronically. The Department will in-crease 

the use of electronic benefit pay-ments, 

business tax filings, and savings bond 

issuances. The actions will streamline intergovernmental process and will enhance 

service to the general public. 

Efforts will include working to transition 

Treasury employees to electronic earnings and 

leave statements; transition federal benefits 

payments to electronic systems; a reduction in 

the number of tax forms distributed to 

taxpayers by the IRS; the release of proposed 

regulations to move to a paperless Treasury; 

and a comprehensive effort to inform the 

public of the changes and the alternatives that 

are available. 

Department of the Treasury - Budget in Brief FY 2011 Page 5
Financial Innovation and Transformation 

Program – The FY 2011 Budget provides $17 

million to develop shared, government-wide 

financial solutions associated with agency 

financial management services (e.g., invoice 

processing, cash collections, interagency 

agreement management). This effort will 

increase efficiency and reduce unnecessary 

paperwork by offering agencies central 

automated solutions for transactions 

processing and financial report production. 

International Programs 

The Department's Request includes $3.065 

billion in total funding for International 

Programs and reflects the President’s 

commitment to meet major global challenges 

– poverty, hunger and climate change – 

through multilateral institutions and processes. 

$2.957 billion in funding is requested for the 

multilateral development banks (MDBs), 

including $408.4 million dollars for the U.S. 

contribution to a new multilateral food 

security fund, which will allow for an initial 

contribution of $475 million when combined 

with 2010 funds, and $635 million for 

international efforts to combat global climate 

change and to help developing countries 

respond to its impacts. The MDB request also 

includes $1.285 billion for the International 

Development Association and $106.6 million 

for the first of five annual payments to the 

Asian Development Bank’s (AsDB) recentlyapproved General Capital Increase (GCI). As 

part of Treasury’s pledge to pay back the 

significant unmet U.S. commitments to these 

the MDBs, the Department is requesting $76 

million in funds for MDB arrears. Finally, the 

Department is re-questing $108 million for 

our debt restructuring and technical assistance 

programs, with which Treasury will continue 

to support much-needed debt relief and 

promote economic growth by strength-ening 

capacity of core institutions in countries 

around the world, including Afghanistan, 

Pakistan and other fragile states. 

Fiscal Prudence 

In recognition of the current fiscal outlook and 

in order to partially offset the cost of high 

priority investments, Treasury’s FY 2011 

Budget includes savings of $314.6 million in 

Department discretionary funding and 

additional savings in mandatory programs. 

The Budget proposes reductions in funding for 

three bureaus, where efficiency-improving 

changes will offset inflation increases, as well 

as other savings. Highlights include: 

•	 IRS savings – $167 million; 

•	 U.S. Mint – legislative proposal would 

authorize the Secretary to approve 

alternative coinage materials to reduce coin 

production costs; 

•	 Bureau of Engraving and Printing – 

legislative proposal to repeal the contract 

limit for distinctive currency paper to 

potentially increase competition and lower 

costs; 

•	 Financial Management Service administrative savings and legislative proposals – 

$13 million; 

•	 Terrorism Risk Insurance Program – 

eliminates nearly $250 million in Federal 

subsidies to insurance companies for 

terrorism insurance. These subsidies are no 

longer necessary given the robust private 

market for such insurance, and domestic 

terrorism insurance policies are now 

sufficiently available and affordable to 

meet demand; 

•	 Bureau of Public Debt administrative 

savings and facility consolidation – $9 

million; 

•	 Departmental Offices administrative 

savings – $11 million; and 

•	 CDFI reductions from two programs to free 

up resources for investments in the core 

Department of the Treasury - Budget in Brief FY 2011 Page 6
CDFI program and two new innovative 

programs – $105 million. 

Securing Americans Value and Efficiency 

(SAVE) – The Department is actively 

reviewing, and in some cases already 

implementing, savings ideas provided by 

Treasury employees as part of the President's 

SAVE challenge. Many of these ideas are 

included in the administrative savings and 

paperless transition proposals listed above. 

Other examples include: 

•	 Combine support functions between 

bureaus – Departmental management is 

working with the bureaus to promote 

greater use of Treasury's Administrative 

Resource Center. 

•	 Reduce energy consumption – the 

Department will reduce its Greenhouse Gas 

emissions by 33 percent over the next 10 

years. 

•	 Expand use of New Hire Database in tax 

administration – the Department is proposing legislation as part of the Budget that 

will expand the IRS' access to information 

in the database to improve compliance. 

The Department will continue to review all 

SAVE proposals from our employees and 

implement the most promising. 

Funding the Alcohol and Tobacco Tax and 

Trade Bureau (TTB) with Annual 

Licensing & Registration Fees - The FY 

2011 Budget proposes to shift the cost of 

paying for regulating the alcohol and tobacco 

industries from the general taxpayer to the 

industries themselves by funding TTB with 

annual licensing and registration fees, totaling 

$106 million a year. This practice is standard 

for most regulatory agency funding. 

Offsetting Cancellation - The FY 2011 

Budget includes a $62 million proposed 

permanent cancellation from the unobligated 

balances of the Treasury Forfeiture Fund. 

Department of the Treasury - Budget in Brief FY 2011 Page 7
High Priority Performance Goals 

Mission: Maintain a strong economy and 

create economic and job opportunities by 

promoting the 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, manage the U.S. 

Government’s finances and resources 

effectively. 

The Department of the Treasury develops a 5-

year strategic plan, as well as an annual 

performance plan and annual report on our 

progress. As part of developing the FY 2011 

Budget and performance plan, the Department 

of the Treasury has also identified a limited 

number of high priority performance goals that 

will be a particular focus over the next two 

years. These goals are a subset of those used to 

regularly monitor and report performance. To 

view the full set of performance information 

please visit: 

http://www.treas.gov/offices/management/budge 

t/planningdocs/ 

Goal 1: Repair and reform the financial 

system 

Measures and milestones: 

•	 Complete up to four million trial mortgage 

loan modifications by December 31, 2012. 

•	 Implement strong, comprehensive 

regulatory reform to restore stability and 

accountability to the financial system. 

Indicators: 

•	 Mortgage interest rates. 

•	 Cost of credit to businesses. 

Goal 2: Increase voluntary tax compliance 

Measures and milestones: 

• Make progress against the Tax Gap through 

improved service and enhanced 

enforcement of the tax laws: 

3⁄4 Achieve over four million document 

matching closures in a year in FY 2011 

(where IRS information does not 

match taxpayer reported information). 

3⁄4	 Implement the new Customer Account 

Data Engine database and processing 

platform by December 2011, doubling 

the number of taxpayers receiving 

refunds on a five-day cycle. 

• Assist Americans in voluntarily meeting 

their tax obligations: 

3⁄4 Increase individual income tax filers’ 

American Customer Satisfaction Index 

to 69 percent. 

3⁄4	 Improve telephone level of service to 

75 percent by the end of FY 2011. 

Goal 3: Significantly increase the number of 

paperless transactions with the public 

Measures and milestones: 

•	 Increase electronic payment, collections, 

and savings bonds transactions by 33 

percent by the end of FY 2011. 

•	 Increase individual tax return E-file rate to 

81 percent. 

Department of the Treasury - Budget in Brief FY 2011 Page 8
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Summary of FY 2011 Increases and Decreases 

(Dollars in Thousands) 

Department of the Treasury - Budget in Brief FY 2011 Page 11 DO DSCIP OIG TIGTA SIGTARP CDFI FINCEN TTB TEOAF FMS BPD IRS Total FY 2010 Enacted $304,888 $9,544 $29,700 $152,000 $23,300 $246,750 $111,010 $103,000 ($90,000) $244,132 $182,244 $12,146,123 $13,462,691 FERS Percentage Adjustment 374 0 47 46 9 22 104 128 0 369 188 16,392 17,679 Non-Pay Inflation Adjustments 1,762 0 56 343 278 85 804 500 0 843 1,005 36,121 41,797 Pay Annualization Adjustments 935 0 115 636 702 54 192 325 0 933 651 47,473 52,016 Pay Inflation Adjustments 2,513 0 294 1,917 296 128 556 837 0 2,415 1,327 119,537 129,820 Maintaining Current Lev els $5,584 $0 $512 $2,942 $1,285 $289 $1,656 $1,790 $0 $4,560 $3,171 $219,523 $241,312 Base Realignment 0 0 0 0 25,015 0 0 0 0 0 0 3,494 28,509 Rescission/User Fee Adjustment 0 0 0 0 0 0 0 0 90,000 0 10,000 0 100,000 

Non-Recurring Costs (2,500) (9,544) 0 0 0 0 (8,250) (3,500) 0 0 0 (32,680) (56,474) Transfers 0 0 0 0 0 0 0 0 0 0 0 0 0 

Efficiency /Sav ings (10,603) 0 (5) (276) 0 (151) (3,997) (622) 0 (13,439) (9,430) (157,958) (196,481) 

Adjustments to Base ($13,103) ($9,544) ($5) ($276) $25,015 ($151) ($12,247) ($4,122) $90,000 ($13,439) $570 ($187,144) ($124,446) FY 2010 Base $297,369 $0 $30,207 $154,666 $49,600 $246,888 $100,419 $100,668 $0 $235,253 $185,985 $12,178,502 $13,579,557 

Program Decreases 0 0 0 0 0 (109,150) 0 0 0 0 0 (9,000) (118,150) 

Program Reinv estments 0 0 0 0 0 0 0 0 0 0 0 2,792 2,792 Program Increases 49,032 22,000 62 786 0 112,262 0 5,500 0 0 0 460,976 650,618 

FY 2011 President s Budget $346,401 $22,000 $30,269 $155,452 $49,600 $250,000 $100,419 $106,168 $0 $235,253 $185,985 $12,633,270 $14,114,817 

Offsetting Fees and Cancellation of Unobligated Balances 0 0 0 0 0 0 0 (106,168) (62,000) 0 (10,000) 0 (178,168) 

FY 2011 President s Budget less Offsetting Fees $346,401 $22,000 $30,269 $155,452 $49,600 $250,000 $100,419 $0 ($62,000) $235,253 $175,985 $12,633,270 $13,936,649 
Department of the Treasury - Budget in Brief FY 2011 Page 12
(Dollars in thousands) 

Appropriation 

Executive Direction $0 $21,619 $21,983 $38,587 $16,604 76%

 Economic Policies and Programs $0 $45,910 $47,249 $70,562 $23,313 49%

 Financial Policies and Programs $0 $36,038 $48,580 $91,212 $42,632 88%

 Terrorism and Financial Intelligence $0 $62,098 $64,611 $102,613 $38,002 59%

 Treasury-wide Management and Programs $0 $21,600 $22,679 $43,426 $20,747 91%

 Administration Programs $0 $91,604 $99,786 $0 ($99,786) (100.0%) 

Subtotal, Departmental Offices - S & E $131,000** $278,869 $304,888 $346,401 $41,513 13.6% 

Offsetting Collections - Reimbursables $0 $18,500 $33,842 $33,842 $0 -

*FY 2011 numbers and percentage changes reflect the reallocation of the Administration Programs dollars to their respective budget activities, 

resulting in across-the-board increases to the other budget activities. 

**ARRA funding includes $122 million for IRS, $6 million for FMS, and $3 million for DO 

FY 2009 

ARRA Enacted 

FY 2010 

Enacted 

FY 2011 

Request 

% Change 

$ Change 

(Plus Admin 

Allocation)*

Total Program Operating Level $131,000** $297,369 $338,730 $380,243 $41,513 13.6% 

Departmental Offices - S & E 

Program Summary by Budget Activity 

intelligence collection and dissemination in 

support of the Department's worldwide antimoney laundering and the financing of 

counter-terrorism program efforts. Finally, the 

Budget provides additional support for the 

critical American Recovery and Reinvestment 

Act of 2009. 

Departmental Offices (DO) top priorities and 

proposed initiatives support each of the 

Department’s strategic goals: Effectively 

Manage U.S. Government Finances; Ensure 

U.S. and World Economies Perform at Full 

Potential; Prevent Terrorism and Promote the 

Nation’s Security Through Strengthened 

International Financial Systems; and Promote 

Management and Organizational Excellence 

Total resources requested to support DO 

activities for FY 2011 are $380,243,000 

including $346,401,000 from direct appropriations and $33,842,000 from offsetting 

collections and reimbursable programs 

Purpose of Program 

Departmental Offices, as the headquarters 

bureau for the Department of the Treasury, 

provides leadership to the Department through 

the promotion of policies geared toward 

Explanation of Request 

The Fiscal Year (FY) 2011 President’s Budget 

Request for the Salaries and Expenses 

appropriation provides new resources to 

develop superior analytical capacity in the 

Offices of Domestic Finance, Economic Policy 

and Tax Policy; to bolster intelligence efforts 

in support of anti-money laundering and the 

financing of counterterrorism programs; to 

ensure that the US and other governments can 

coordinate more effectively on economic and 

other policies to ensure a stable international 

economy; to generate procurement influenced 

savings; and to support critical economic 

recovery policies and programs. 

In order to meet current and future economic 

challenges, Treasury staff must maintain vast 

expertise in an array of complex finance and 

government fields. The Budget supports this 

need by enhancing the capacity of Treasury's 

core analysis functions in Domestic Finance, 

Economic Policy and Tax Policy. These core 

investments will strengthen the Administration's effort to ensure a full recovery from 

the financial crisis and to prevent future crises. 

The Budget also provides resources for the 

Office of Intelligence Analysis through the 

Global Finance Initiative, to improve 

Department of the Treasury - Budget in Brief FY 2011 Page 13
(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 304,888 

Changes to Base: 

Base Realignment: $0
 

Maintaining Current Levels (MCLs): $5,584
 

FERS % Change 374
 

Non-Pay Inflation Adjustment 1,762
 

Pay Annualization 935
 

Pay Inflation 2,513
 

Non-Recurring Costs: ($2,500)
 

National Academy of Science Transfer (2,500)
 

Efficiencies Savings: ($10,603)
 

DO IT Contract Savings (5,300)
 

DAS Operations (1,700)
 

Operations Center (1,500)

 Centralized Services (500)
 

TFI and IA Office Savings (1,603)
 

Total FY 2011 Base 297,369

Subtotal FY 2011 Changes to Base ($7,519)
 

Program Changes: 

Program Increases: $49,032 

Domestic Finance Capacity Building 16,681 

IA Multilateral Meeting Support 6,739 

Program Evaluations 5,292 

OIA Global Finance Initiative 3,600 

Cyber Security 3,000 

Alpha Computers Modeling Systems 2,750 

Procurement Improvements 2,500 

Tax Policy Capacity Building 2,400 

Recovery Act 2,000 

Economic Policy Capacity Building 2,000 

Global Tax Forum 1,000 

OIA Counterproliferation 770 

OIA IT Connectivity/Information Sharing 300 

Subtotal FY 2011 Program Changes $49,032 

Total FY 2011 Budget Request $346,401 

developing a strong and stable economy. The 

Secretary of the Treasury plays a primary role 

in the formulation and management of 

domestic and international economic policies 

of the United States, specifically in the areas 

of finance, tax, terrorism and financial 

intelligence policies. Through effective 

management and leadership, the Department 

of the Treasury develops and implements 

strategies to promote the stability of the 

nation's financial markets, ensure the integrity 

of the financial system, and enhance the 

government's ability to collect revenue, and 

serves as a world leader for best practices in 

the area of counterterrorist financing and antimoney laundering. 

DO FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

DO is $304,888,000. 

Base Realignment 

Base Realignment +$0 / +16.5 FTE 

This realigns Secure Communications 

positions previously located within the 

Treasury Working Capital Fund. These 

positions were moved back into DO because 

they only support DO, and not other bureaus. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$5,584,000 / +0 FTE 

Funds are requested for the increase in agency 

retirement contribution percentages for GS 

employees from 11.2% to 11.5% for FY 2011 

as required by OPM, for non-pay related items 

such as contracts, travel, supplies, equipment 

and GSA rent, for the FY 2011 pay increase, 

and the FY 2011 cost of the 2010 pay raise. 

Non-Recurring Costs 

National Academy of Science Transfer -

$2,500,000 / +0 FTE 

Nonrecur of the National Academy of Science 

Transfer from FY 2010. 

Efficiencies Savings 

Departmental Offices IT Contract Savings -

$5,300,000 / +0 FTE 

Savings will be realized through more efficient 

use of and reduced IT consumption. These 

savings will be realized proportionally across 

all of DO because of the re-alignment of the 

Administration Programs budget activity based 

on a per capita ratio. 

Deputy Assistant Secretary of Operations -

$1,700,000 / +0 FTE 

Reduction will be realized through more 

efficient use and reduced consumption of 

utilities and a streamlined space plan. These 

Department of the Treasury - Budget in Brief FY 2011 Page 14
improvements will be shared at a per capita 

level across DO as a result of the re-alignment 

of Administration Programs dollars based on a 

proportional spread. 

Treasury Operations Center -$1,500,000 / +0 FTE 

Efficiencies will be gained through 

consolidating portions of existing offices 

within the new combined Treasury Operations 

Center (TOC). The combined TOC will use 

fewer contract communications officers and 

need less IT and telecommunications and 

subscriptions support. 

Centralized Services -$500,000 / +0 FTE 

Reduction will be realized through a decrease 

in the overall cost of IT servers previously 

funded through the Working Capital Fund. 

This savings is shared proportionally across 

DO. 

Terrorism and Financial Intelligence and 

International Affairs (TFI and IA) Office 

Savings -$1,603,000 / -3 FTE 

IA will achieve $587,000 in savings by 

reducing three positions supporting the 

markets room and TFI will achieve $1.016 

million in savings by reducing travel costs, 

overseas support, FOIA compliance, general 

administration, and training. 

Program Increases 

Domestic Finance Capacity Building 

+$16,681,000 / +24 FTE 

To more effectively respond to the financial 

crisis and to promote stronger and more 

equitable financial regulations going forward, 

the Department of Treasury needs additional 

resources to support more robust institutional 

capability within the Office of Domestic 

Finance. Additional resources will enable 

Domestic Finance to provide expert advice to 

the current Administration as well as future 

administrations, promoting a strong economy 

while maintaining fiscal discipline. 

International Affairs Multilateral Meetings 

Support G7, G-20, and APEC Meetings 

+$6,739,000 / +0 FTE 

The Administration is increasing the number 

of ministerial meetings it normally hosts in 

order to ensure that the US and other 

governments can coordinate more effectively 

on economic and other policies to ensure a 

stable international economy. This increase 

includes $400,000 in funding for official 

reception and representation expenses. 

Program Evaluations +$5,292,000 / +0 FTE 

As part of the Administration's governmentwide initiative to strengthen program 

evaluation, the request includes funds to 

support four substantive program evaluations 

at a total cost of $5.766 million, of which 

$474,000 can be funded out of existing 

administrative funding for the Office of 

Financial Stability. These evaluations include 

(1) Testing alternative mortgage modification 

strategies; (2) Evaluating CDFI Financial 

Innovations; (3) Linking mortgage/ 

administrative data to assess mortgage risk; 

and (4) A combined study to evaluate different 

approaches to no-fee debit cards and Volunteer 

Income Tax Assistance (VITA) prepaid cards. 

These studies are just a few of 23 evaluation 

proposals specifically approved by the Office 

of Management and Budget for 2011 to 

strengthen the quality and rigor of Federal 

program evaluation. 

Office of Intelligence and Analysis Global 

Finance Initiative +$3,600,000 / +10 FTE 

This builds upon the FY 2009 Global Finance 

Initiative to further leverage intelligence that 

informs and enables senior Treasury leaders in 

the formulation of policy and the execution of 

Treasury authorities, and allows the Office of 

Intelligence and Analysis (OIA) to play a 

critical role in coordinating global finance 

intelligence issues across the Intelligence 

Community. 

Department of the Treasury - Budget in Brief FY 2011 Page 15
Cyber Security +$3,000,000 / +0 FTE 

These base resources are used for departmentwide policy implementation of the Cyber 

Security program, and are not developmental. 

The reallocation would eliminate the 

challenges associated with a recurring program 

funded through an account which is developed 

as a zero-based budget, by providing a 

permanent funding stream for the ongoing 

operations and maintenance of the program. 

The Cyber Security program helps ensure the 

protection of Treasury systems and 

information against threats. The program 

provides greater protection against network 

intrusions, which can result in significant 

disruptions and delays in its business 

activities. 

Alpha Computers Modeling Systems 

+$2,750,000 / +0 FTE 

Alpha computers are large scale computer 

systems which support several critical 

applications for Departmental Offices, 

including the Office of Tax Policy tax models, 

the Federal Financing Bank Loan Management 

System, Economic Policy modeling, the 

Treasury Library catalog application and 

Domestic Finance applications. These 

computers were purchased and installed in FY 

2005 to meet the large scale processing and 

data storage requirements of these policy 

offices. Since these systems will be over six 

years old and are no longer manufactured by 

the vendor, this initiative will replace these 

systems with Intel-based 64 bit blade servers. 

Procurement Improvements +$2,500,000 / +10 FTE 

Treasury requires additional centralized 

procurement resources to identify, manage, 

execute, and make sustainable our initiative to 

generate (a) procurement savings, (b) 

additional strategic sourcing efforts within 

Treasury and across government and (c) 

systemic process improvements. 

Tax Policy Capacity Building +$2,400,000 / +8 FTE 

The Office of Tax Policy (OTP) is requesting 

eight new positions. These specialists will 

ensure that OTP can respond to new 

challenges of the financial crisis, support the 

financial stimulus plan, and address key tax 

policy issues such as climate change and 

health care. OTP will use these new resources 

to ensure that tax policies allow the 

Department of Treasury and the President to 

respond in a more flexible manner to new 

challenges and ensure policy revisions are 

made to support Administration priorities in 

these key areas. 

Recovery Act +$2,000,000 / +3 FTE 

Treasury requests three staff members and 

additional contract funds for an interagency 

agreement between the National Renewable 

Energy Research Lab and Treasury to review 

application for the Cash Payments for 

Specified Energy Property in Lieu of Tax 

Credits. These three additional staff members 

and additional contract support provide a vital 

function, managing a high profile program 

which is showing direct impacts to the 

American people. 

Economic Policy Capacity Building 

+$2,000,000 / +6 FTE 

The Office of Economic Policy (OEP) 

develops and analyzes policies in the housing 

and financial sectors. Demand for services has 

risen sharply. OEP needs additional 

specialized expertise to: analyze economic 

events and make policy proposals, understand 

how recent and future policy actions affect the 

economy, and use all available data efficiently. 

OEP needs staff expertise to provide analysis 

in utilizing various government and private 

databases which differ in structure and 

content. OEP requests resources to add 

economists and to create a small Data Analysis 

unit. The unit will maintain the large financial 

and nonfinancial databases needed to assess 

the financial and economic situation and 

Department of the Treasury - Budget in Brief FY 2011 Page 16
 support policy analyses. 

Global Tax Forum +$1,000,000 / +0 FTE 

The Global Forum was previously funded 

through the Organization for Economic Cooperation and Development (OECD) budget, 

but as part of a restructuring to become a more 

independent body, it is moving to a new 

funding structure that will require members of 

the Global Forum to fund it themselves 

(entirely outside the regular OECD budget). 

Declaration of the G-20 Heads of State on 

Strengthening the Financial System issued 

after the London summit in April 2009 calls on 

the Global Forum to conduct and strengthen 

objective peer reviews, based on existing 

processes, and to review its structure. On 

September 1-2, 2009, the Global Forum met in 

Mexico and began the process of 

implementing this new mandate. Treasury 

estimates that its contribution for continued 

U.S. participation this G-8 and G-20 

commitment, initiated at the behest of the 

United States, will be at least $1 million. 

Office of Intelligence and Analysis 

Counterproliferation +770,000 / + 2 FTE 

OIA leads Treasury’s effort to identify, 

monitor, and assess the evolution of 

proliferation finance networks and supports 

the use of targeted financial measures against 

them. OIA proposes to expand these activities 

to ensure Treasury’s continued progress in 

disrupting proliferation networks as they 

evolve and adapt, as well as to respond to 

emerging proliferation threats posed by state 

and non-state actors 

Office of Intelligence and Analysis IT Connectivity 

/Information Sharing +300,000 / + 0 FTE 

Resources dedicated to this initiative will help 

implement the Identity and Access 

Management capability in support of the 

National Intelligence Strategy Enterprise 

Objective, improve information integration 

and information sharing. This capability will 

establish an enterprise capability within the 

sensitive compartmentalized information (SCI) 

computer networks. 

Explanation of Budget Activities 

Salaries and Expenses 

Executive Direction ($38,587,700 from direct 

appropriations and $3,371,000 from 

reimbursable programs) 

Provides direction and policy formulation to 

the Department, and interacts with Congress 

and the public on Departmental policy matters. 

Economic Policies and Programs 

($70,562,000 from direct appropriations and 

$7,342,000 from reimbursable programs) 

Monitors domestic and international economic 

conditions and collects and analyzes financial 

data, including foreign credits and credit 

guarantees. 

Financial Policies and Programs 

($91,212,000 from direct appropriations and 

$8,123,000 from reimbursable programs) 

Monitors and provides economic and financial 

policy expertise in the areas of domestic 

finance and tax policy. 

Terrorism and Financial Intelligence (TFI) 

($102,613,000 from direct appropriations and 

$9,357,000 from reimbursable programs) 

Develops and implements strategies to counter 

terrorist financing and money laundering. 

Treasury-wide Management and Programs 

($43,426,500 from direct appropriations and 

$5,649,000 from reimbursable programs) 

Provides strategic plans, and policy direction 

in the fields of human resources, information 

technology security, and financial 

administration that include the formulation and 

management of the budget. 

Department of the Treasury - Budget in Brief FY 2011 Page 17
Administration Programs (No funding) 

For FY 2011, Treasury will allocate 

administrative expenses for Departmental 

Offices by operational budget activity, instead 

of maintaining a separate budget activity for 

administrative expenses. This will give 

oversight officials a better understanding of 

DO Performance by Budget Activity 

Key: Oe - Outcome Measure, E - Efficiency Measure, and Ot - Output/Workload Measure 

Disc - Discontinued 

the full cost of each program within 

Departmental Offices. 

Legislative Proposals 

Departmental Offices has no legislative 

proposals. 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Terrorism and Impact of TFI programs and Activities 

Financial (Oe) 

Intelligence 

- - Baselined 7.81 Yes 7.4 7.6 

Treasury-wide Complete investigations of EEO 

Management complaints within 180 days (%) (Oe) 

Policies and 

Programs 

51.6 56 50 65 Yes 65 65 

Treasury-wide Injury and illness rate TreasurywideManagement including DO (Oe) 

Policies and 

Programs 

1 0 Disc Disc N/A Disc Disc 

Treasury-wide Number of material weaknesses 

Management closed (significant management 

Policies and problems identified by GAO, the IGs 

Programs and/or the bureaus) (Oe) 

0 2 n/a n/a n/a 1 1 

Treasury-wide Percent of complainants informally 

Management contacting EEO (for the purposes of 

Policies and seeking counseling or filing a 

Programs complaint) who participate in the ADR 

process (Oe) 

29 45 30 35 Yes 35 40 

Financial Policies Release Federal Government-wide 

and Programs Statements on time (Oe) 

Yes Yes Meet 

Deadline 

Was Met No Meet 

Deadline 

Meet 

Deadline 

Description of Performance 

DO is continuing to work to develop more 

meaningful performance measures for policy 

offices. 

In fiscal year 2009, the Department 

discontinued using previous TFI Budget 

Activity performance measures. These measures are now used as indicators for the new 

composite measure that was developed in 

fiscal year 2009. TFI introduced and began to 

apply a composite performance measure in 

fiscal year 2009 to improve the assessment of 

its impact. 

The offices comprising the Treasury Wide 

Management (TWM) budget activity are 

committed to ensuring accountability and a 

well understood strategic direction in order to 

build a world-class organization. In FY 2009, 

offices have worked to objectively monitor 

their progress toward program outcomes and 

Treasury’s strategic objectives. 

Beginning in fiscal year 2008 the Office of the 

Deputy Assistant Secretary of Human 

Department of the Treasury - Budget in Brief FY 2011 Page 18
Resources-Chief Human Capital Officer 

(DASHR-CHCO) identified two performance 

measures to assess the effectiveness of human 

capital at the Treasury Department. First, how 

effective is Treasury at recognizing employee 

performance and second, does Treasury have 

the needed talent to achieve organizational 

success. 

For fiscal year 2009 Treasury received an 

overall score of 73 percent in employee 

performance, based on six bureaus receiving a 

passing score (OPM considers 80 points a 

“passing score” for agency bureaus). Agency 

bureaus that did not receive a passing score 

were required to submit and begin execution 

of an improvement plan. Treasury received a 

59.9 percent overall positive rating for the 

Talent Index and 65.7 percent overall positive 

rating for the Job Satisfaction Index. For the 

Performance Culture Index, Treasury received 

an overall positive rating score of 56.8 percent. 

In fiscal 2010 Treasury will review and update 

all human capital metrics as part of a strategy 

to improvement human capital strategic at the 

Treasury Department. 

For FY 2011, Treasury has made the decision 

to allocate administrative expenses for 

Departmental Offices by operational budget 

activity, instead of maintaining a separate 

budget activity just for administrative 

expenses. Where necessary, performance 

assessment will accommodate for this level 

increase, so that performance results will 

maintain historical comparability with prior 

years’ results. 

OMB revised the accelerated December 15, 

2009 deadline to February 16, 2010 and we are 

on target to meet the revised deadline for the 

FY 2009 Financial Report of the United States 

Government (FR). The statutory deadline for 

the FR is March 31, 2010. 

In FY 2009, Treasury’s Office of International 

Affairs (IA) exceeded all targets for its 

performance measures related to trade and 

investment. For FY 2009, 94 percent of 

Multilateral Development Bank (MDB) grant 

and loan proposals contained satisfactory 

results measurement frameworks, exceeding 

the Department’s target of 90 percent. In FY 

2008, the Office of Technical Assistance 

established two new performance measures to 

assess the effectiveness of assistance programs 

for client countries. The average rating in FY 

2009 was 3.7 for traction and 3.1 for impact, 

out of a possible score of 5.0. Performance 

targets for FY 2010 and FY 2011 for IA 

measures have been set to reflect current 

economic conditions. 

Department of the Treasury - Budget in Brief FY 2011 Page 19
Department of the Treasury - Budget in Brief FY 2011 Page 20
Department-wide Systems and Capital 

Investments Program 

Appropriation FY 2009 FY 2010 FY 2011 

Enacted Enacted Request $ Change % Change 

$26,975 $9,544 $22,000 $12,456 130.5% 

Total Appropriated Resources $26,975 $9,544 $22,000 $12,456 130.5% 

Appropriation Amount 

FY 2010 Enacted 9,544 

Changes to Base: 

Non-Recurring Costs: ($9,544)
 

Zero Base DSCIP (9,544)
 

Subtotal FY 2011 Changes to Base ($9,544)
 

Program Changes: 

Program Increases: $22,000 

Enterprise Content Management Program 5,000 

Financial Innovation and Transformation 17,000 

Program 

Subtotal FY 2011 Program Changes $22,000 

Total FY 2011 Base 

Total FY 2011 Budget Request 22,000 

Department-wide Systems and Capital Investments Program 

Program Summary by Budget Activity 

(Dollars in thousands) 

Explanation of Request 

The Department-wide Systems and Capital 

Investments Programs (DSCIP) request 

includes funds for the Enterprise Content 

Management program and the Financial 

Innovation and Transformation program. 

Enterprise Content Management (ECM): A 

key Treasury initiative for 2011 is the 

elimination of paper-based processes and 

transactions. The ECM program is an essential 

element of this initiative as it will provide a 

common approach across Treasury to 

modernizing document-based business 

processes. FY 2011 funding will allow the 

program to continue, with a focus on 

enhancing mission effectiveness, reducing 

total cost of ownership by promoting 

economies of scale, and enabling all Treasury 

bureaus to progress toward a paperless 

environment. 

Financial Innovation and Transformation: 

DSCIP funding is also requested to be used to 

develop and expand efforts to support shared 

government-wide financial solutions 

associated with agency financial management 

services (e.g., invoice processing, cash 

collections, interagency agreement 

management), an effort coordinated through a 

newly established Office of Financial 

Innovation and Transformation (OFIT). This 

program will be tasked with developing 

options for streamlining the processing of 

financial transactions and information. For 

example, the program will develop 

innovations available to agencies including 

allowing users and stakeholders to access 

certain financial information or append this 

information without requiring the movement 

of the data. This will also streamline processes 

and allow for more transparency of 

information to the public. 

Purpose of Program 

The Department-wide Systems and Capital 

Investments Program (DSCIP) is authorized to 

be used by or on behalf of the Treasury 

Department’s bureaus, at the Secretary’s 

discretion, to improve infrastructure, 

modernize business processes and increase 

efficiency through technology investments. 

DSCIP FY 2011 Budget Highlights

(Dollars in thousands) 

Department of the Treasury - Budget in Brief FY 2011 Page 21
FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

DSCIP is $9,544,000. 

Non-Recurring Costs 

Zero Base DSCIP -$9,544,000 / +0 FTE 

DSCIP is a zero-based budget. 

Program Increases 

Enterprise Content Management Program 

+$5,000,000 / +0 FTE 

Using the requested FY 2011 funds, Treasury 

will utilize the systems integration contract 

vehicle to implement the second phase of the 

ECM solution, including deployment of the 

next set of prioritized bureau capabilities and 

infrastructure identified during the independent assessment (such as modular 

hardware and virtual machine technology to 

enable a scalable and incremental build-out 

of the ECM platform). 

Financial Innovation and Transformation 

Program +$17,000,000 / +0 FTE 

This initiative will develop and expand efforts 

to support shared, government-wide financial 

solutions associated with agency financial 

management services. This program will 

streamline processes and allow for more 

transparency of information. This program 

will be coordinated through a newly 

established Office of Financial Innovation 

and Transformation (OFIT). 

Explanation of Budget Activities 

Salaries and Expenses 

Department-wide Systems and Capital 

Investments Program ($22,000,000 from 

direct appropriations) 

The Department-wide Systems and Capital 

Investments Programs (DSCIP) request 

includes funds for the Enterprise Content 

Management program and the Financial 

Innovation and Transformation program. 

Enterprise Content Management (ECM): A 

key Treasury initiative for 2011 is the 

elimination of paper-based processes and 

transactions. The ECM program is an essential 

element of this initiative as it will provide a 

common approach across Treasury to 

modernizing document-based business 

processes. FY 2011 funding will allow 

continuation of the program, with a focus on 

enhancing mission effectiveness, reducing 

total cost of ownership by promoting 

economies of scale, and enabling all Treasury 

bureaus to progress toward a paperless 

environment. 

Financial Innovation and Transformation: 

DSCIP funding is also requested to be used to 

develop and expand efforts to support shared 

government-wide financial solutions 

associated with agency financial management 

services (e.g., invoice processing, cash 

collections, interagency agreement management); an effort coordinated through a new 

Office of Financial Innovation and 

Transformation (OFIT). This program will be 

tasked with developing options for 

streamlining the processing of financial 

transactions and information. For example, the 

program will develop innovations available to 

agencies including allowing users and 

stakeholders to access certain financial 

information or append this information 

without requiring the movement of the data. 

This will also streamline processes and allow 

for more transparency of information to the 

public. 

Legislative Proposals 

DSCIP has no legislative proposals for FY 

2011. 

Department of the Treasury - Budget in Brief FY 2011 Page 22
Description of Performance 

The Treasury Department has four strategic 

goals: 

•	 Effectively manage U.S. government 

finances; 

•	 Ensure U.S. and world economies 

perform at full economic potential; 

•	 Prevent terrorism and promote the 

nation’s security through strengthened 

international financial systems; and, 

•	 Ensure management and organizational excellence. 

The Department uses DSCIP funds to make 

investments necessary to facilitate 

achievement of these goals. 

ECM Program Performance will be measured 

through the identification and collection of 

performance metrics. Measures and results to 

be achieved include reduced cost of 

maintaining paper, standardized shared 

services, increased efficiency/productivity of 

staff through automated workflow, reduced 

time required to share information, and 

reduced management reporting burden. 

There are a number of benefits to the Bureaus 

and Government at large to be realized: 

•	 Greater protection of information and 

security 

•	 Improved regulatory compliance 

•	 Improved data collection and quality 

•	 Improved process workflow and information sharing 

•	 Quicker and more accurate 

management reporting 

•	 Development of Treasury-wide ECM 

standards 

Financial Innovation and Transformation 

program performance will be measured by 

assessing the costs and performance of the 

government’s current financial management 

processes and measuring the results of the new 

system in reducing costs and improving 

financial performance. Expected results are: 

•	 Reduced costs and elimination of 

duplicative financial information. 

•	 Streamlined processes between 

vendors and government agencies. 

•	 Improvements in agency and 

government-wide financial data. 

•	 Financial reports that support policy 

making and management decision 

making. 

•	 Transparency of information. 

Department of the Treasury - Budget in Brief FY 2011 Page 23
Department of the Treasury - Budget in Brief FY 2011 Page 24
Office of Inspector General 

Program Summary by Budget Activity 

(Dollars in thousands) 

Appropriation FY 2009 FY 2010 FY 2011 

Enacted Enacted Request $ Change % Change

 Audit $20,116 $22,869 $23,306 $437 1.9%

 Investigations $6,009 $6,831 $6,963 $132 1.9% 

Subtotal, Office of Inspector General $26,125 $29,700 $30,269 $569 1.9% 

Offsetting Collections - Reimbursables $7,381 $8,000 $10,000 $2000 25.0% 

Total Program Operating Level $33,506 $37,700 $40,269 $2,569 6.8% 

Explanation of Request 

The Fiscal Year (FY) 2011 President’s Budget 

request for the Office of Inspector General 

(OIG) will be used to provide critical audit and 

investigative services, ensuring the effectiveness and integrity of Treasury’s programs 

and operations. The OIG will continue to 

address mandated requirements related to (1) 

audits of the Department’s financial 

statements, (2) information security, and (3) 

failed institutions regulated by the Office of 

the Comptroller of the Currency or the Office 

of Thrift Supervision resulting in material 

losses to the deposit insurance fund (material 

loss is defined as the greater of $25 million or 

2 percent of the institution’s assets). To the 

extent that resources are available, the OIG 

will conduct audits of the Department’s 

highest risk programs and operations. Five of 

those programs and operations are discussed 

below. This list is not all inclusive, and risks 

change over time and circumstance. 

Programs to Ensure the Safety and Soundness 

of the Nation’s Financial Markets – The wave 

of bank failures that started in 2008 underscore 

the need for increased audit coverage of a 

more prospective nature. The material loss 

reviews are a backward look at the quality of 

supervision as it relates to the failed institution 

under review. The OIG believes that it is just 

as important for regulators to address 

emerging risks in financial markets and 

products. The subprime mortgage crises was a 

costly lesson that serves to remind us that 

regulators need to anticipate, recognize, and 

control business practices that create 

unreasonable risk. 

Another area that the OIG believes requires 

vigorous oversight is Treasury’s responsibilities under the Housing and Economic 

Recovery Act of 2008. Treasury has taken on 

an important role to complement the Federal 

Housing Finance Agency’s September 2008 

decision to place Fannie Mae and Freddie Mac 

in conservatorship. 

Programs to Promote Economic Recovery -

With the enactment of the American Recovery 

and Reinvestment Act of 2009 (Recovery 

Act), Treasury was provided with, among 

other things, over $4 billion for low-income 

housing projects and specified energy 

properties of which the OIG has jurisdiction or 

joint jurisdiction with the Treasury Inspector 

General for Tax Administration. Additionally, 

the Community Development Financial 

Institutions Fund received a $100 million 

supplement to its fiscal year 2009 funding 

round for qualified program applicants through 

FY 2011. This FY 2009 funding nearly 

doubles the amount made available to the 

Fund through FY 2011. 

Programs to Combat Terrorist Financing and 

Money Laundering – Treasury faces unique 

challenges in carrying out its responsibilities 

under the Bank Secrecy Act (BSA) and USA 

Patriot Act to prevent and detect money 

laundering and terrorist financing. Past audits 

Department of the Treasury - Budget in Brief FY 2011 Page 25
and Congressional hearings have surfaced 

serious regulatory gaps in the detection of 

and/or timely enforcement action against 

financial institutions for BSA and related 

violations. Furthermore, with the current 

distress facing so many financial institutions 

throughout our country, we believe that there 

is an increased risk that compliance with BSA 

may have deteriorated further and may 

continue to worsen. 

Efforts to Ensure the Security of Treasury’s 

Information Systems -- The Department faces 

serious challenges in bringing its systems into 

compliance with information technology 

security policies, procedures, standards, and 

guidelines. In its FY 2008 Federal Information 

Security Management Act independent audit, 

the OIG continued to report deficiencies in the 

Department’s information security programs 

and practices. 

Treasury’s Management of Capital 

Investments -- Treasury needs to ensure that 

large acquisitions of systems and other capital 

investments are properly managed. The 

Department’s record in this regard has been 

mixed at best. While the OIG has reported that 

Treasury was able to complete a high priority 

national security system upgrade, the upgrade 

was delayed. Treasury also failed to 

implement other major system develop efforts 

successfully, such as BSA Direct and IRS’s 

web-based Electronic Fraud Detection System. 

The requested funding will also allow OIG to 

continue to prevent fraud, waste and abuse, at 

all Treasury non-IRS bureaus and offices, 

including investigating complaints of alleged 

employee misconduct, and allegations of fraud 

and other crimes involving Treasury programs, 

performing oversight of the Treasury's police 

operations at the Bureau of Engraving and 

Printing and the U.S. Mint, continue reviewing 

and investigating instances where the U.S. 

Mint’s Coin Redemption and Bureau of 

Engraving and Printing’s Currency Redemption Programs are used to facilitate money 

laundering, structuring, and other unlawful 

activities, and conducting proactive efforts to 

detect, investigate, and deter electronic crimes 

and other threats to the Department’s physical 

and cyber critical infrastructure. 

Resources required to support OIG operations 

for FY 2011 are $30,269,000 from direct 

appropriations, and $10,000,000 from 

offsetting collections and reimbursable 

agreements for contract financial statement 

audits of other Treasury bureaus. 

Purpose of Program 

The Treasury OIG plays a major role in 

support of the Department of the Treasury’s 

goal to ensure accountability and transparency, 

to protect the integrity of the Department, and 

to improve overall efficiency and effectiveness 

in Treasury programs and operations. OIG 

conducts audits and investigations of eight 

Treasury bureaus and all non-IRS Treasury 

offices in accordance with the Inspector 

General Act, as amended, to (a) promote 

economy, efficiency, and effectiveness in the 

administration of Treasury programs and 

operations, (b) prevent and detect fraud, waste, 

and abuse in Treasury programs and 

operations; and (c) keep the Secretary and the 

Congress fully and currently informed about 

problems, abuses, and deficiencies in Treasury 

programs and operations. 

There is also appropriated to the Department 

of the Treasury funds specifically identified 

for the annual audit of the Treasury-wide 

Financial Statements. This audit is performed 

by an independent public accounting firm 

under the supervision of OIG. These funds are 

not available for OIG programs and 

operations. 

Department of the Treasury - Budget in Brief FY 2011 Page 26
Appropriation Amount 

FY 2010 Enacted 29,700 

Changes to Base: 

Maintaining Current Levels (MCLs): $512 

FERS % Change 47 

Non-Pay Inflation Adjustment 56 

Pay Annualization 115 

Pay Inflation Adjustment 294 

Efficiencies Savings: ($5) 

Procurement Savings (5) 

Subtotal FY 2011 Changes to Base $507 

Total FY 2011 Base 30,207

Program Changes: 

Program Increases: $62 

CIGIE Fees 62 

p

E

S

A

a

p

T

Subtotal FY 2011 Program Changes $62 T

Total FY 2011 Budget Request 30,269 o

a

p FY 2011 Budget Adjustments 

OIG FY 2011 Budget Highlights

(Dollars in thousands) 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

OIG is $29,700,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$512,000 / +0 FTE 

Funds are requested for: FERS % Change of 

+$47,000; non-labor related items such as 

contracts, travel, supplies, equipment and GSA 

rent adjustments of +$56,000; FY 2011 cost 

of the January 2010 pay increase of 

+$115,000; and proposed January 2011 pay 

raise of +$294,000. 

Efficiencies Savings 

Procurement Savings -$5,000 / +0 FTE 3.5% 

Procurement Savings to be achieved through 

improved efficiencies and economies in the 

procurement process. 

Program Increases 

CIGIE Fees +$62,000 / +0 FTE 

Funds are requested for Treasury OIG's share 

of Council of Inspectors General for Integrity 

and Efficiency (CIGIE) cost of CIGIE 

operations. This funding will specifically 

support coordinated government-wide 

activities that identify and review areas of 

weakness and vulnerability in federal 

rograms and operations with respect to fraud, 

waste, and abuse. 

xplanation of Budget Activities 

alaries and Expenses 

udit ($23,306,000 from direct appropriations 

nd $10,000,000 from reimbursable 

rograms) 

he Office of Audit conducts audits of eight 

reasury bureaus and all non-IRS Treasury 

ffices; produces more than 60 products 

nnually; and provides firsthand, unbiased 

erspectives and recommendations for 

improving the economy, efficiency, and 

effectiveness of Treasury programs and 

operations. The Office of Audit has recently 

been challenged to keep up with an increasing 

number of bank failures that require dedicated 

resources to conduct mandated material loss 

reviews. The requested funding will better 

enable OIG to meet those requirements. The 

requested funding will also be used by OIG to 

provide initial oversight of more than $4 

billion for low-income housing projects and 

specified energy properties grants authorized 

by the American Recovery and Reinvestment 

Act (Recovery Act). The Office also responds 

to requests by Treasury officials and the 

Congress for specific work. Reimbursable 

funding supports agreements for contract 

audits of other Treasury-wide financial 

statements. 

Investigations ($6,963,000 from direct 

appropriations) 

The Office of Investigations prevents, detects 

and investigates complaints of fraud, waste 

and abuse at eight Treasury bureaus and all 

non-IRS Treasury offices. 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 

Department of the Treasury - Budget in Brief FY 2011 Page 27
its cases to the Department of Justice and state Legislative Proposals 

or local prosecutors for criminal prosecution or 

civil litigation, or to agency officials for Treasury OIG has no legislative proposals for corrective administrative action. FY 2011. 

OIG Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Audit Number of completed audit products 

(Ot) 

64 64 60 68 Y 62 62 

Investigations Percentage (%) of all cases that were 

accepted by prosecutors, referred for 

agency action, or closed during the 

fiscal year and were completed within 

18 months of case initiation (E) 

NA NA B 92 Y 70 70 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and B=baseline 

Description of Performance 

In FY 2008, the Office of Audit performed or 

supervised contractors to meet its financial 

statement and information security mandated 

audit requirements. It also performed 

mandated material loss reviews of failed 

financial institutions supervised by Treasury. 

Furthermore, the Office of Audit directed its 

self-initiated work toward addressing 

Treasury’s major management and performance challenges. The Office of Audit 

completed 64 audit products, and met all 

statutory completion requirements. 

In FY 2008, the Office of Investigations 

continued investigating all reports of fraud, 

waste and abuse and other criminal activity. 

The Office of Investigations referred 93 

investigations for criminal prosecution, civil 

litigation, or corrective administrative action. 

The Office of Investigations undertook a 

thorough review of their performance measure 

methodology, and has developed better and 

more realistic measures with which to gauge 

their investigative performance. These new 

measures went into effect in FY 2009, and will 

be evaluated through the year. 

In FY 2009, the OIG maintained performance 

at a level consistent with FY 2008, and 

continued to direct a significant portion of its 

limited resources to conducting the increasing 

number of material loss reviews of failed 

banks. Furthermore, the OIG began providing 

oversight of more than $4 billion for lowincome housing projects and specified energy 

properties grants authorized by the American 

Recovery and Reinvestment Act (Recovery 

Act). The OIG also closed 94 investigative 

cases. 

FY 2010 resources will enhance OIG’s ability 

to conduct material loss reviews required as a 

result of the increasing number of bank 

failures and OIG will continue to direct its 

remaining resources to auditing Treasury 

programs: to ensure the safety and soundness 

of the nation’s financial markets; to promote 

economic recovery; to combat terrorist 

financing and money laundering; to ensure the 

security of treasury’s information systems, 

and; to improve Treasury’s management of 

capital investments. 

As in FY 2010, the FY 2011 requested 

resources will maintain the OIG’s ability to 

conduct material loss reviews of failed banks 

and critical and high risk Treasury programs 

and processes. 

Department of the Treasury - Budget in Brief FY 2011 Page 28
Appropriation FY 2009 FY 2010 FY 2011 

ARRA Enacted Enacted Request $ Change % Change

 Audit $5,600 $55,186 $57,421 $58,725 $1,304 2.3%

 Investigations $1,400 $90,897 $94,579 $96,727 $2,148 2.3% 

Offsetting Collections - Reimbursables $0 $900 $1,300 $1,300 $0 -

Total Program Operating Level $7,000 $146,983 $153,300 $156,752 $3,452 2.3% 

Subtotal, Inspector General for Tax 

Administration $7,000 $146,083 $152,000 $155,452 $3,452 2.3% 

Inspector General for Tax Administration 

Program Summary by Budget Activity 

(Dollars in thousands) 

Explanation of Request 

The FY 2011 President’s Budget request for 

Treasury Inspector General for Tax 

Administration (TIGTA) will be used to 

continue to provide critical audit, 

investigative, and inspection and evaluation 

services, ensuring the integrity of tax 

administration on behalf of the nation’s 

taxpayers. While there are a number of critical 

areas where TIGTA will provide oversight, 

highlights of TIGTA’s investigative and audit 

priorities include: 

•	 Adapting to the Internal Revenue Service’s 

(IRS) continuously evolving operations 

and mitigating intensified risks associated 

with modernization, security, addressing 

the tax gap, and human capital challenges 

facing the IRS; 

•	 Responding to threats and attacks against 

IRS employees, property, and sensitive 

information; 

•	 Improving the integrity of IRS operations 

by detecting and deterring fraud, waste, 

abuse or misconduct by IRS employees; 

•	 Conducting comprehensive audits, 

inspections, and evaluations that include 

recommendations for monetary benefits 

and enhancing IRS’s service to taxpayers; 

•	 Informing the American people, Congress, 

and the Secretary of the Treasury of 

problems and progress made to resolve 

them; and. 

•	 Overseeing IRS efforts to implement the 

56 tax provisions of the American 

Recovery and Reinvestment Act of 2009. 

Total resources required in FY 2011 to support 

TIGTA’s mission are $156,752,000, including 

$155,452,000 from direct appropriations, and 

approximately $1,300,000 from reimbursable 

agreements. 

Purpose of Program 

TIGTA was created by Congress as a part of 

the Internal Revenue Service Restructuring 

and Reform Act of 1998 (RRA 98). TIGTA’s 

audits, investigations, inspections and 

evaluations protect and promote the fair 

administration of the American tax system. 

TIGTA conducts audits that advise the 

American people, Congress, the Secretary of 

the Treasury, and IRS management of highrisk issues, problems, and deficiencies related 

to the administration of IRS programs and 

operations. TIGTA’s audit recommendations 

improve IRS systems and operations, while 

maintaining fair and equitable treatment of 

taxpayers. TIGTA’s investigations ensure the 

integrity of IRS employees, contractors, and 

other tax professionals; provide for 

infrastructure security; and protect the IRS 

from external attempts to threaten or corrupt 

the administration of the tax laws. TIGTA’s 

Department of the Treasury - Budget in Brief FY 2011 Page 29
Appropriation Amount 

FY 2010 Enacted 152,000 

Changes to Base: 

Maintaining Current Levels (MCLs): $2,942 

FERS % Change 46 

Non-pay Inflation Adjustment 343 

Pay Annualization 636 

Pay Inflation Adjustment 1,917 

Efficiencies Savings: ($276) 

Procurement Savings (276) 

Total FY 2011 Base 154,666

Subtotal FY 2011 Changes to Base $2,666 

Program Changes: 

Program Increases: $786 

CIGIE Fees 332 

Increase Related to IRS Growth 454 

Total FY 2011 Budget Request 155,452 

Subtotal FY 2011 Program Changes $786 

Office of Inspections and Evaluations (I&E) 

provides responsive, timely, and cost-effective 

inspections and evaluations of IRS challenge 

areas. TIGTA’s oversight is essential to the 

efficiency and equity of the IRS’s tax 

administration system. TIGTA ensures that 

taxpayers can have confidence that the IRS 

collects more than $2 trillion in tax revenue in 

an effective and efficient manner. 

TIGTA FY 2011 Budget Highlights

(Dollars in thousands) 

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

TIGTA is $152,000,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$2,942,000 / +0 FTE 

Funds are requested for: FERS % Change of 

+$46,000; non-labor related items such as 

contracts, travel, supplies, equipment and GSA 

rent adjustments of $343,000; FY 2011 cost of 

the January 2010 pay increase of $636,000; 

and proposed January 2011 pay raise of 

$1,917,000. 

Efficiencies Savings 

Procurement Savings -$276,000 / +0 FTE 

TIGTA continues to work with procurement 

staff and vendors to identify procurement 

savings without compromising program 

quality. 

Program Increases 

CIGIE Fees +$332,000 / +0 FTE 

Funds for Council of Inspectors General on 

Integrity and Efficiency (CIGIE) will 

specifically support coordinated governmentwide activities that identify and review areas 

of weakness and vulnerability in federal 

programs and operations with respect to fraud, 

waste and abuse. 

Increase Related to IRS Growth +$454,000 / 

+0 FTE 

Since TIGTA is charged with overseeing the 

IRS, increasing the size and workload of the 

IRS generates additional work for TIGTA. Just 

as the IRS will need additional agents and 

specialists to accomplish their work, TIGTA 

will use the FY 2011 program increase to 

enhance critical oversight responsibilities. In 

addition, the Admin-istration is placing an 

renewed emphasis on addressing illegal 

overseas tax evasion and closing tax 

loopholes and make it more profitable for 

companies to create jobs in the United States. 

The $454,000 program increase would help 

fund this effort. 

Explanation of Budget Activities 

Salaries and Expenses 

Audit ($58,725,000 from direct appropriations 

and $551,000 from reimbursable programs) 

The Office of Audit’s (OA) mission is to 

provide comprehensive coverage and oversight 

of all aspects of the IRS’s daily operations. 

Audits not only focus on the economy and 

efficiency of IRS functions but also ensure that 

taxpayers’ rights are protected and the 
taxpaying public is adequately served. In FY 

2009, audit reports produced potential 

financial benefits of approximately $14.7 

billion, and potentially impacted approximately 23 million taxpayer accounts in areas 

such as taxpayer burden, rights and 

entitlements, taxpayer privacy and security, 

protection/use of resources, reliability of 

information, and increased revenue/revenue 

protected. Each fiscal year, OA develops an 

annual audit plan that communicates oversight 

priorities to Congress, the Department of the 

Treasury, and the IRS. This plan strikes a 

balance between statutory audit coverage and 

high risk audit work. The statutory coverage 

includes audits mandated by the IRS 

Restructuring and Reform Act of 1998, as well 

as reviews that address computer security and 

financial management. The high-risk workload includes issues pertaining to the IRS's 

modernization efforts, its major management 

challenges, its progress in achieving its 

strategic goals, as well as Congressional and 

other stakeholder requests for audit coverage. 

Investigations ($96,727,000 from direct 

appropriations and $749,000 from reimburseable programs) 

While most Offices of Inspectors General 

focus primarily on fraud, waste, and abuse, 

TIGTA’s mission is more extensive. TIGTA 

has the statutory respon-sibility to protect the 

integrity of tax administration and to protect 

the ability of the IRS to collect revenue for the 

Federal government. To accomplish this, 

TIGTA investigates allegations of criminal 

violations and administrative misconduct by 

IRS employees, protects the IRS against 

external attempts to corrupt tax administration, 

and ensures IRS employee safety and IRS data 

and infrastructure security. The following 

summaries highlight TIGTA’s investigative 

efforts in these three core areas: 

Employee Integrity: 

IRS employee misconduct can hinder the 

IRS’s ability to collect revenue for the Federal 

Government. Fifty percent of TIGTA’s 

current investigations involve alleged 

employee misconduct. In addition to unauthorized access (UNAX) investigations, 

employee misconduct investigations include 

allegations of extortion, theft, false statements, 

and financial fraud. TIGTA also administers a 

proactive integrity program to help detect IRS 

employees who might be committing fraud 

and other misconduct. From October 1, 2008 

to September 30, 2009, TIGTA initiated 41 

proactive investigative initiatives. 

Employee and Infrastructure Security: 

Congressional concern regarding the 

magnitude of uncollected revenue has 

prompted the IRS to intensify enforcement 

activities. Heightened enforcement is likely to 

cause a rise in external threats to IRS 

employees and infrastructure. Both TIGTA’s 

proactive and reactive investigations are 

critical to mitigating future risks. TIGTA 

maintains IRS employee and infrastructure 

security by conducting investigations into 

incidents that threaten IRS employees, 

facilities, and infrastructure. TIGTA’s highest 

priority complaints involve threats and assaults 

against IRS employees. TIGTA works 

aggressively and takes swift action to protect 

IRS employees, to include the providing of 

armed escorts. In October 2008, the Inspector 

General Reform Act of 2008 was signed into 

law, which allows TIGTA to provide physical 

security to protect IRS employees against 

external threats. TIGTA also operates a 

Criminal Intelligence Program that develops 

and facilitates pertinent information regarding 

potential threats to IRS employees and 

operations. This program includes participation in the FBI sponsored Joint Terrorism 

Task Forces nationwide. In addition, TIGTA 

has a System Intrusion and Network Attack 

Response Team to defend against hackers who 

Department of the Treasury - Budget in Brief FY 2011 Page 31
attempt to compromise the data integrity of 

taxpayer information stored in IRS computer 

systems. From October 2008 through 

September 2009, OI closed 331 investigations 

of assaults and/or threats made against IRS 

employees and facilities. 

External Attempts to Corrupt Tax 

Administration: 

TIGTA is statutorily mandated to investigate 

external attempts to corrupt tax administration, 

which includes criminal misconduct by nonemployees, such as, impersonation of IRS 

employees, interference with the administration of internal revenue laws, bribery, 

TIGTA Performance by Budget Activity 

misuse of Treasury names, symbols, etc., 

contract fraud, and tax practitioner fraud 

relating to thefts of taxpayer remittances and 

refunds. 

Legislative Proposals 

TIGTA has no legislative proposals for FY 

2011. 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Audit Percentage of Audit Products Delivered 

When Promised to Stakeholders (Oe) 

68 65 65 81 Y 65 65 

Audit Percentage of Recommendations Made 

That Have Been Implemented (Oe) 

90 84^ 83 91 Y 83 83 

Investigations Percentage of Results from Investigative 

Activities (Oe) 

81 78 78 83 Y 79 79 

Key: Oe - Outcome Measure, E - Efficiency Measure, and Ot - Output/Workload Measure 

^This number has been updated since the Fiscal Year 2010 Budget in Brief. 

Description of Performance 

•	 Issued 142 audit, inspection, and 

evaluation reports, identifying 

approximately $14.7 billion in 

potential financial benefits (i.e., costs 

savings, increased or protected 

revenue, reliability of management 

information, taxpayer rights and 

entitlements, and inefficient use of 

resources). 

•	 Closed 83 percent of the 3,325 final 

closed investigations which generated 

results, including 1,427 cases of 

employee misconduct referred for 

action and 171 cases accepted for 

criminal prosecution with final legal 

action. 

Department of the Treasury - Budget in Brief FY 2011 Page 32
$49,600 $26,300 113% 

$49,600 $26,300 113% 

FY 2011 

Request 

$ 

Change 

(Dollars in thousands) 

% Change 

Mandatory and Discretionary Levels 

Salaries and Expenses 

FY 2009 

Enacted 

$65,000 

FY 2010 

Enacted 

$23,300 

FY 2011 

Salaries and Expenses 

 Public Private Investment Fund (PPIP)
 

($20,100) -100% 

$5,000 $0 0.00% 

Total Program Operating Level $65,000 $48,400 $54,600 $6,200 13% 

Program Summary by Budget Activity FY 2009 FY 2010 

Enacted Enacted 

Audit $27,900 $20,700 $23,200 $2,500 12% 

Investigation $37,100 $27,700 $31,400 $3,700 13% 

Total SIGTARP by Budget Activity $65,000 $48,400 $54,600 $6,200 13% 

1

 SIGTARP expects that it will expend approximately $5,000,000 per year for FY 2010, FY 2011 and FY 2012 in a manner consistent with P.L. 

111-22. 

Mandatory Funding 

Discretionary Funding 

Total Mandatory and Discretionary 

$23,300 

$23,300 

Available no-year funds - S&E 

$50,000 

$15,000 

$65,000 

$65,000 

$20,100 

Available PPIP funds1 $0 $5,000 

Request $ Change % Change 

$49,600 $26,300 113%

$23,300 $49,600 $26,300 113%

$0 $0 $0 0% 

Program Summary by Budget Activity 

Special Inspector General for TARP 

Explanation of Request 

The 2011 President’s Budget request for the 

Special Inspector General for Troubled Asset 

Relief Program (SIGTARP) includes funding 

to support the Department of the Treasury’s 

strategic outcome of effectively managing the 

U.S. Government’s finances as they relate to 

the Troubled Asset Relief Program (TARP). 

SIGTARP’s top priority is to promote 

transparency in the management and operation 

of TARP, ensuring the satisfaction of the 

public’s right to know how Treasury decides 

to invest the public’s money, how it manages 

the assets it obtains, and how TARP recipients 

use these funds. 

Purpose of Program 

SIGTARP’s mission is to advance economic 

stability by promoting the efficiency and 

effectiveness of TARP management, through 

transparency, through coordinated oversight, 

and through robust enforcement against those, 

whether inside or outside of Government, who 

waste, steal or abuse TARP funds. 

Transparency 

Promoting transparency in the management 

and operation of TARP is one of SIGTARP’s 

primary roles. Through EESA, the American 

taxpayer has been asked to fund - to the tune 

of hundreds of billions of dollars - an 

unprecedented effort to stabilize the financial 

system and promote economic recovery; in 

this context, the public has a right to know 

how that money is being spent. Transparency 

Department of the Treasury - Budget in Brief FY 2011 Page 33
(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 23,300 

Adjustments to FY 2010 Enacted 

FY 2010 Base Realignment $25,015 

Maintaining Current Levels (MCLs): $1,285 

FERS % Change $9 

Non-Pay Inflation Adjustment 278 

Pay Annualization 702 

Pay Inflation 296 

Subtotal Adjustments to FY 2010 Enacted $26,300 

Total FY 2011 Base 49,600 

Total FY 2011 President's Budget Request 49,600 

Available funds from Pub. Law No. 111-22 $5,000 (PPIP) 

Total FY 2011 Budgetary Resources 54,600 

is a powerful tool to ensure that all those 

managing TARP funds will act appropriately, 

consistent with the law and in the best interests 

of the country. 

Coordinated Oversight 

SIGTARP plays a vital role in promoting the 

economy and efficiency in the management of 

TARP and views its oversight role both 

prospectively (by advising TARP managers on 

issues relating to internal controls and 

oversight, for example) and retrospectively (by 

assessing the effectiveness of TARP activities 

over time and suggesting improvements and 

making recommendations for positive change). 

SIGTARP closely coordinates its oversight 

activities with the other TARP oversight 

bodies to ensure maximum oversight coverage 

and to avoid redundant and unduly 

burdensome requests. 

Robust Enforcement 

SIGTARP’s third primary role is to prevent, 

detect and investigate cases of fraud, waste 

and abuse of TARP funds and programs. 

SIGTARP, through its own investigative 

resources and through partnership with other 

relevant law enforcement agencies, is 

committed to robust criminal and civil 

enforcement against those, whether inside or 

outside of Government, who waste, steal or 

abuse TARP funds. 

In 2011, SIGTARP will continue to design and 

conduct programmatic audits of Treasury's 

TARP operations, as well as recipients' 

compliance with their obligations under 

relevant law and contract. SIGTARP will also 

conduct and supervise criminal and civil 

investigations into any parties suspected of 

TARP-related fraud, waste, or abuse. And 

SIGTARP must remain flexible at all times to 

respond to future changes to TARP programs. 

SIGTARP FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

SIGTARP is $23,300,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current Levels 

+$1,285,000 / +0 FTE Funds are requested for: 

FY 2011 FERS increase of $9,000 for the 

increase in agency retirement contribution 

percentages for GS employees from 11.2% to 

11.5% as required by OPM; FY 2011 cost of 

the January 2010 pay increase of $702,000; 

proposed January 2011 pay raise of $296,000; 

and non-labor related items such as contracts, 

travel, supplies, equipment and GSA rent 

adjustments of $278,000. In addition, there is 

an FY 2010 Base Realignment of $25,015,000. 

Explanation of Budget Activities 

Salaries and Expenses 

Audit ($21,000,000 from direct appropriation) 

conducts, supervises, and coordinates 

programmatic audits with respect to 

Department of the Treasury - Budget in Brief FY 2011 Page 34
Treasury’s operation of TARP and the 

recipients’ compliance with their obligations 

under relevant law and contracts; evaluates 

TARP policies and procedures; and provides 

technical assistance to Treasury. 

Investigation ($28,600,000 from direct 

appropriations) supervises and conducts 

criminal and civil investigations into those 

persons and entities, whether inside or outside 

of government, who waste, steal, or abuse 

TARP funds. 

Legislative Proposals 

SIGTARP has no legislative proposals for FY 

2011. 

Department of the Treasury - Budget in Brief FY 2011 Page 35
SIGTARP Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 

FY 2009 FY 

2010 FY 2011 

Actual Actual Target Actual 

Target 

Met? Target Target 

Audit Percentage of 

Recommendations 

Implemented (%) (Oe) 

NA NA B 100 Yes 70 70 

Investigation Percentage of 

investigations accepted 

by prosecutors (%) (Oe) 

NA NA B 95 Yes 50 55 

Key: Oe- Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and B - Baseline 

concerning such use. 

In the interests of maximizing criminal and 

civil enforcement, the Investigation Division 

coordinates closely with other law 

enforcement agencies with the goal of forming 

law enforcement partnerships, including task 

force relationships, across the Federal 

government to leverage SIGTARP’s expertise 

and unique position. 

Description of Performance 

SIGTARP is continuing to set challenging 

performance goals with positive results. The 

Audit Division continues to review TARP 

policies and procedures including TARP 

agreements. With respect to TARP agreements, SIGTARP recommended that Treasury 

require program participants to use their best 

efforts to account for their use of TARP funds 

and to report periodically to Treasury 

Department of the Treasury - Budget in Brief FY 2011 Page 36
Community Development Financial Institutions Fund 

Program Summary by Budget Activity 

(Dollars in thousands) 

 Community Development Financial Institutions 

Program 

 Bank Enterprise Award Program 

 Native Initiatives 

 Capital Magnet Fund 

Administration 

 New Markets Tax Credit Program Administration* 

 Financial Education and Counseling 

 Hawaii Financial Ed and Counseling 

 Bank on USA Initiative 

 Healthy Food Financing Initiative 

$90,000 $59,750 $107,600 $140,000 $32,400 30.3%

N/A $22,000 $25,000 $0 ($25,000) (100.0%)

$8,000 $8,500 $12,000 $12,000 $0 0%

N/A N/A $80,000 $0 ($80,000) (100.0%)

$1,933 $10,550 $13,797 $23,000 $5,000 27.8%

$67 $4,200 $4,203 Inc. Inc. Inc.

N/A $2,000 $1,000 $0 ($1,000) (100.0%)

N/A N/A $3,150 $0 ($3,150) (100.0%)

N/A N/A N/A $50,000 $50,000 100.0%

N/A N/A N/A $25,000 $25,000 100.0% 

*NMTC administration is rolled up into the Administration budget activity for the FY 2011 Budget request 

Appropriation FY 2009 

ARRA Enacted 

FY 2010 

Enacted 

FY 2011 

Request $ Change % Change

Total Appropriated Resources $100,000 $107,000 $246,750 $250,000 $3,250 1.3% 

Explanation of Request 

The FY 2011 request for the Community 

Development Financial Institutions (CDFI) 

Fund) will ensure that the CDFI Fund meets its 

mission of expanding the capacity of financial 

institutions to provide credit, capital, and 

financial services to underserved populations 

and communities in the United States. 

Through its various programs and initiatives, 

the CDFI Fund enables locally based 

organizations to further goals such as 

economic development that supports the 

expansion of affordable housing, small 

businesses, community facilities, and 

community development financial services. 

Total resources required to support CDFI Fund 

activities for FY 2011 are $250,000,000 from 

direct appropriations. 

Purpose of Program 

The CDFI Fund expands the availability of 

credit, investment capital, and financial 

services in distressed urban and rural 

communities, and carries out the Community 

Development Banking and Financial 

Institutions Act of 1994. The CDFI Fund’s 

investments work toward building private 

markets, creating healthy local tax revenues 

(through job creation, business development, 

commercial real estate and housing 

development and homeownership), and 

empowering residents by stimulating the 

creation and expansion of diverse community 

development financial institutions (CDFIs, 

which provide basic banking services to 

underserved communities and financial 

literacy training). The CDFI Fund provides 

infusions of capital to institutions that serve 

economically distressed communities and lowincome individuals. The CDFI Fund’s 

activities leverage millions of private sector 

investment dollars from banks, foundations, 

and other funding sources. 

The CDFI Fund will implement two new 

initiatives beginning in FY 2011. The Bank 

on USA Initiative will promote access to 

affordable and appropriate financial services 

and basic consumer credit products for 

households without access to such products 

and services. These households face a number 

of problems, including high fees for alternative 

financial services such as check-cashing; 

barriers to saving and building credit; and 

increased exposure to risks such as fraud and 

theft. The Healthy Food Financing Initiative 

will support CDFIs for the purpose of 

increasing the availability of affordable, 

healthy foods in underserved urban and rural 

communities, particularly through the 

Department of the Treasury - Budget in Brief FY 2011 Page 37
(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 246,750 

Changes to Base: 

Maintaining Current Levels (MCLs): $289 

FERS % Change 22 

Non-Pay Inflation Adjustment 85 

Pay Annualization 54 

Pay Inflation Adjustment 128 

Efficiencies Savings: ($151) 

Procurement Savings (151) 

Total FY 2011 Base 246,888

Subtotal FY 2011 Changes to Base $138 

Program Changes: 

Program Decreases: ($109,150) 

Bank Enterprise Award Program (25,000) 

Capital Magnet Fund (80,000) 

Financial Education and Counseling (1,000) 

Hawaii Financial Ed and Counseling (3,150) 

Program Increases: $112,262 

Bank on USA Initiative 50,000 

Healthy Food Financing Initiative 25,000 

CDFI Program 32,400 

Administration 4,862

New Markets Tax Credit Program Inc. 

Total FY 2011 Budget Request 250,000 

Subtotal FY 2011 Program Changes $3,112 

development or equipping of grocery stores 

and other healthy food retailers. 

CDFI FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

the CDFI Fund is $246,750,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$289,000 / +0 FTE 

Funds are requested for: FY 2011 cost of the 

January 2010 pay increase of $54,000; 

proposed January 2011 pay raise of $128,000; 

the cost of the increase in the FERS agency 

contribution percentage of $22,000, and nonlabor related items such as contracts, travel, 

supplies, equipment and GSA rent adjustments 

of $85,000. 

Efficiencies Savings 

Procurement Savings -$151,000 / +0 FTE 

Achieve procurement savings by reducing 

non-competitive actions and implementing the 

use of social-economic programs such as 8(a) 

and small business set-asides. Other methods 

used to achieve savings are proper acquisition 

planning, strategic sourcing (use of agency and 

government-wide contract vehicles) in order to 

obtain better pricing for commonly acquired 

goods and services. 

Program Decreases 

Capital Magnet Fund (CMF) -$80,000,000 / 

+0 FTE 

The CDFI Fund is proposing not to fund the 

CMF in FY 2011. Treasury will undertake a 

careful review of the impact of FY 2010 

funding, and future resource decisions will be 

informed by this analysis. 

Bank Enterprise Award (BEA) Program -

$25,000,000 / +0 FTE 

The CDFI Fund is proposing not to fund the 

BEA Program in FY 2011. Instead, the Fund 

will evaluate the enhancements made to the 

program in FY 2009 and FY 2010 and apply 

this analysis to future funding and 

programmatic decisions. 

Financial Education and Counseling -

$1,000,000 / +0 FTE 

The CDFI Fund is proposing not to fund the 

Financial Education and Counseling Pilot 

Program in FY 2011. The Bank on USA 

initiative will employ an educational campaign 

to improve the financial awareness of the 

underbanked and unbanked. 

Hawaii Financial Ed and Counseling -

$3,150,000 / +0 FTE 

The CDFI Fund is proposing not to fund the 

Hawaii Financial Education and Counseling 

Program is FY 2011. The Bank on USA 

initiative will employ an educational campaign 

Department of the Treasury - Budget in Brief FY 2011 Page 38
to improve the financial awareness of the 

underbanked and unbanked. 

Program Increases 

CDFI Program +$32,400,000 / +0 FTE 

The FY 2011 budget request seeks to increase 

funding to support the increased demand for 

CDFI Program awards. In FY 2010, the CDFI 

Fund received 408 applications requesting 

$467.4 million in assistance, a 97 percent 

increase from the $237.7 million requested 

through the original, pre-Recovery Act 

application solicitation of the FY 2009 round. 

CDFIs use these awards to increase their 

overall capacity, and their ability to offer 

loans, investments and other financial services 

in underserved communities. 

Through the CDFI Program, the CDFI Fund 

will continue and expand the CapacityBuilding Initiative launched in that will make 

new, specialized technical assistance and 

training available to CDFIs nationwide, 

enabling them to expand their lending 

activities and to spur economic growth in the 

communities they serve. 

Bank on USA Initiative +$50,000,000 / +0 

FTE 

The Bank on USA Initiative will promote 

access to affordable and appropriate financial 

services and basic consumer credit products 

for households without access to such products 

and services. These households face a number 

of problems, including high fees for alternative 

financial services such as check-cashing; 

barriers to saving and building credit; and 

increased exposure to risks such as fraud and 

theft. 

Healthy Food Financing Initiative 

+$25,000,000 / +0 FTE 

To support the Healthy Food Financing 

Initiative for the purpose of increasing the 

availability of affordable, healthy foods in 

underserved urban and rural communities, 

particularly through the development or 

equipping of grocery stores and other healthy 

food retailers. 

Administration +$4,863,000 / +6 FTE 

Resources will be realigned to cover additional 

administrative support costs for IT 

enhancements, to analyze the outcomes and 

impact of the CDFI Fund’s programs, and to 

stand up and administer two high-priority 

initiatives—the Bank on USA Initiative and 

the Healthy Food Financing Initiative. The 

CDFI Fund will set aside funds to cover costs 

associated with the projected move from its 

current location, prior to the lease expiration in 

early 2012, and to retain and re-allocate 

Recovery Act staff to monitor a growing 

portfolio of awards. 

Additionally, resources will be utilized to 

administer and oversee a rapidly growing 

number of NMTC allocations and Community 

Development Entities (CDEs), in addition to 

assessing how changing economic conditions 

have affected the investment environment for 

NMTCs. 

Explanation of Budget Activities 

Salaries and Expenses 

Community Development Financial 

Institutions Program ($140,000,000 from 

direct appropriations) 

The CDFI Program uses federal resources to 

invest in and build the capacity of CDFIs to 

serve low-income people and communities 

lacking adequate access to affordable financial 

products and services. The CDFI Program 

provides monetary awards for financial 

assistance to further economic development 

(job creation, business financing, and 

commercial real estate development); 

affordable housing (housing development and 

homeownership); and community 

development financial services (provision of 

basic banking services to underserved 

Department of the Treasury - Budget in Brief FY 2011 Page 39
communities and financial literacy training). 

The CDFI Program also provides technical 

assistance awards to help start-up and existing 

CDFIs build their capacity to serve their target 

markets through the acquisition of consulting 

services, technology purchases, and staff/board 

training. 

New Markets Tax Credit Program (included in 

Administration appropriations) 

The NMTC Program attracts private sector 

capital into low-income communities. 

Community Development Entities apply to the 

CDFI Fund for allocations of tax credits in 

annual competitive rounds. The CDEs, in 

turn, provide tax credits to private investors in 

low-income communities. In addition to 

awarding tax credits, the CDFI Fund monitors 

CDE compliance with the terms of their 

allocation agreements. The amount requested 

in this account funds the administrative 

expenses of the NMTC Program. 

Native Initiatives ($12,000,000 from direct 

appropriations) 

The Native Initiatives comprises two 

components: (i) the Native American CDFI 

Assistance (NACA) Program through which 

financial assistance and technical assistance 

awards are provided to build the capacity of 

new or existing Native CDFIs serving Native 

Communities, and (ii) complementary 

capacity-building initiatives that seek to foster 

the development of Native CDFIs through 

training and technical assistance. The CDFI 

Fund achieves these objectives through the 

NACA Program, which provides financial 

assistance and technical assistance awards to 

new or existing Native CDFIs, and a 

complementary series of training programs 

called Expanding Native Opportunities. These 

training programs foster the development of 

new Native CDFIs, strengthen their 

operational capacity, and guide them in the 

creation of important financial education and 

asset building programs for their communities. 

Administration ($23,000,000 from direct 

appropriations) 

Administration encompasses the CDFI Fund’s 

operational support and management activities 

for each of the award and tax credit programs 

it administers. This includes finalizing the 

terms of assistance agreements with awardees, 

making disbursements, and monitoring 

awardee compliance with the terms of their 

three-year award assistance and seven-year 

allocation agreements. In addition, resources 

will be utilized for a business application 

enhancement upgrade, external program 

research evaluations, and to find adequate 

office space and take the necessary steps to 

move the operations of the headquarters of the 

CDFI Fund in a rapid, seamless, and costeffective manner. 

Department of the Treasury - Budget in Brief FY 2011 Page 40
CDFI Performance by Budget Activity 

In FY 2009, CDFIs reported leveraging from 

private investment in the prior year nearly $1.3 

billion (based on reporting from program year 

2008 results), which was more than double the 

target of $635 million; this success was largely 

due to increased program funding which was 

met by private sector commitments before the 

full onset of the financial crisis. As a result, 

CDFIs helped provide funds for projects that 

created or maintained 70,260 jobs, which 

exceeded the target of 30,000 jobs. 

In FY 2009, the NMTC Program competitively awarded $6.5 billion in NMTC 

allocation authority to CDEs, including both 

Recovery Act rounds, which provided tax 

credit allocation authority to Community 

Development Entities (CDEs) for targeted 

Budget 

Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

CDFI Administrative costs per Financial 

Program Assistance (FA) application processed 

(E) 

7,180 7,200 6,920 3,283 Y DISC DISC 

CDFI Dollars of private and non-CDFI Fund 

Program investments that CDFIs are able to 

leverage because of their CDFI Fund 

Financial Assistance ($ millions) (Oe) 

778 621 635 1,298 Y 600* 700* 

CDFI Number of full-time equivalent jobs 

Program created or maintained in underserved 

communities by businesses financed by 

CDFI Program Awardees (Oe) 

35,022 29,539 30,000 70,260 Y 85,000 85,000 

New Markets Community Development Entities' 

Tax Credit (CDEs) annual investments in lowProgram income communities ($ billions) (Oe) 

2.5 3.3 2.5 3.6 Y 2.5 2.5 

Native Administrative costs per number of 

Initiatives Native American CDFI Assistance 

(NACA) applications processed ($)(E) 

13,510 10,990 9,090 3,162 Y DISC DISC 

Native Annual percentage increase in the total 

Initiatives assets of Native CDFIs (%) (Oe) 

19 19 15 23 Y 15 19 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, M - Management/Cust. Satisfaction, and DISC - Discontinued *Note 

that the matching funds requirement was waved by Congress for FY 2009 and FY 2010 due to the economic crisis. The performance data for FY2010 and 

2011 will be based on the prior year activity (2009 and 2010 respectively) and the targets are set at half the level indicated by trends prior to the financial 

crisis. 

Description of Performance 

investments in low-income communities. As 

reported in FY 2009 (based on reporting from 

program year 2008 results), cumulative 

investments in low-income communities by 

CDEs rose to $12.5 billion (exceeding the 

performance target by $1.1 billion), and an 

annual increase of $3.6 billion over the prior 

year (exceeding the annual target by $1.1 

billion). 

In FY 2009, the Native Initiatives, which 

provides financial assistance, technical 

assistance, and training to Native CDFIs and 

other Native entities seeking to become or 

create Native CDFIs, registered a 23 percent 

increase in the total assets of Native CDFIs in 

the program year. 

Department of the Treasury - Budget in Brief FY 2011 Page 41
Department of the Treasury - Budget in Brief FY 2011 Page 42
Appropriation FY 2009 FY 2010 FY 2011 

Enacted Enacted Request $ Change % Change

 BSA Administration and Analysis $82,287 $101,694 $91,151 ($10,543) (10.4%)

 Regulatory Support Programs $9,178 $9,316 $9,268 ($48) (0.5%) 

Subtotal, Financial Crimes Enforcement Network $91,465 $111,010 $100,419 ($10,591) (9.5%) 

Offsetting Collections - Reimbursables $6,000 $20,000 $20,000 $0 -

Total Program Operating Level $97,465 $131,010 $120,419 ($10,591) (8.1%) 

(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 111,010 

Changes to Base: 

Maintaining Current Levels (MCLs): $1,656 

FERS % Change 104 

Non-Pay Inflation Adjustment 804 

Pay Annualization 192 

Pay Inflation Adjustment 556 

Non-Recurring Costs: ($8,250) 

Non-Recur Funding (8,250) 

Efficiencies Savings: ($3,997) 

Efficiency Savings (2,083) 

IT and Procurement Savings (1,914) 

Total FY 2011 Base 100,419 

Total FY 2011 Budget Request 100,419 

Subtotal FY 2011 Changes to Base ($10,591) 

Financial Crimes Enforcement Network 

Program Summary by Budget Activity 

(Dollars in thousands) 

Explanation of Request 

The Financial Crimes Enforcement Network 

(FinCEN) FY 2011 President’s Budget request 

includes funding to safeguard the nation’s 

financial system from the abuses of financial 

crime, including terrorist financing, money 

laundering, and other illicit activity. 

Total resources required to support FinCEN 

activities for FY 2011 are $120,419,000 

including $20,000,000 from offsetting collections and reimbursable agreements. 

Purpose of Program 

The mission of FinCEN, a bureau within 

Treasury’s Office of Terrorism and Financial 

Intelligence, is to enhance U.S. national 

security, deter and detect criminal activity, and 

safeguard financial systems from abuse by 

promoting transparency in the U.S. and 

international financial systems. FinCEN 

fulfills its mission, goals and priorities by: 

administering the Bank Secrecy Act (BSA); 

supporting law enforcement, intelligence, and 

regulatory agencies through sharing and 

analysis of financial intelligence; enhancing 

international anti-money laundering and 

counter-terrorist financing efforts and 

cooperation; and networking people, entities, 

ideas, and information. 

FinCEN FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

FinCEN is $111,010,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$1,656,000 / +0 FTE 

Funds are requested for: FERS % Change of 

+$104,000; non-labor related items such as 

contracts, travel, supplies, equipment and GSA 

rent adjustments of +$804,000; FY 2011 cost 

of the January 2010 pay increase of 

+$192,000; and proposed January 2011 pay 

raise of +$556,000. 

Department of the Treasury - Budget in Brief FY 2011 Page 43
Non-Recurring Costs 

Non-Recur Funding -$8,250,000 / +0 FTE 

Non-recur funding received in FY 2010 for the 

Information Technology (IT) Modernization 

initiative. FinCEN will seek alternate funding 

from the Treasury Forfeiture Fund to fully 

implement the planned IT Modernization. 

Efficiencies Savings 

Efficiency Savings -$2,083,000 / -4 FTE 

Reductions were identified as the result of 

business process efficiencies from 

consolidation of IT Infrastructure; expansion 

of shared services for administrative functions; 

reduction of discretionary travel and training; 

employee attrition savings; and other related 

savings. 

IT and Procurement Savings -$1,914,000 / +0 

FTE 

Savings were identified from a consolidation 

of commercial database contracts; spreading 

out investments for non-critical IT systems 

over a longer period; and reduction of other 

non-critical contractual services. 

Explanation of Budget Activities 

Salaries and Expenses 

BSA Administration and Analysis 

($91,151,000 from direct appropriations and 

$20,000,000 from reimbursable programs) 

This activity comprises FinCEN’s efforts to 

administer the BSA, including promulgating 

regulations, providing outreach and issuing 

guidance to the regulated industries, providing 

oversight of BSA compliance, initiating 

enforcement actions, and, with the Internal 

Revenue Service (IRS), managing the 

information filed by the regulated industries, 

as well as analytic activities. Analytical 

programs include support to U.S. law 

enforcement and international Financial 

Intelligence Units (FIUs) in combating 

financial fraud and crime by facilitating the 

exchange of investigative information; 

identifying foreign and domestic financial 

fraud, money laundering, and terrorist 

financing trends, patterns, and techniques; and 

liaison with and support of intelligence 

initiatives within the intelligence community 

and Treasury. This activity also incorporates 

efforts to support large-scale, complex law 

enforcement investigations involving financial 

fraud, terrorist financing, money laundering, 

and other financial crimes. Finally, this 

activity includes FinCEN’s IT Modernization 

initiative, which will ensure the effective 

management, accessibility, dissemination, and 

use of the highly sensitive confidential 

information collected under the BSA. This 

effort will improve government-wide efforts to 

detect criminal activity, including tax and 

financial fraud. 

Regulatory Support Programs ($9,268,000 

from direct appropriations) 

This activity supports implementation, 

strengthening and clarification of the AntiMoney Laundering (AML) program, 

recordkeeping, and reporting requirements of 

the BSA for financial institutions subject to 

those requirements. FinCEN will also 

continue efforts with the IRS, especially 

related to the Money Services Business (MSB) 

industry, to ensure compliance, respond to 

public inquiries, distribute forms and 

publications, and support collection and 

maintenance of the BSA data. These resources 

support IRS BSA compliance activities for 

non-banking financial institutions, especially 

related to the MSB industry. 

Legislative Proposals 

FinCEN does not have any legislative 

proposals for FY 2011. 

Department of the Treasury - Budget in Brief FY 2011 Page 44
FinCEN Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

BSA Average time to process enforcement 

Administration & matters (in Years) (E) 

Analysis 

1.1 0.7 1 1 Y 1 1 

BSA Percentage of FinCEN's Regulatory 

Administration & Resource Center Customers rating the 

Analysis guidance received as understandable 

(Oe) 

91 94 90 94 Y 90 90 

BSA Percentage of customers satisfied with 

Administration & the BSA E-Filing (Oe) 

Analysis 

94 93 90 94 Y 90 90 

BSA Percentage of domestic law 

Administration & enforcement and foreign financial 

Analysis intelligence units finding FinCEN's 

analytical reports highly valuable (Oe) 

82 83 80 81 Y 81 82 

Key: Oe - Outcome Measure, E - Efficiency Measure, and Ot - Output/Workload Measure 

Description of Performance 

In the regulatory area, FinCEN’s goal to 

provide financial institutions with 

understandable guidance is critical to 

institutions establishing AML programs 

that comply with the BSA. FinCEN 

exceeded its goal of 90 percent with 94 

percent of its customers rating the 

guidance received as understandable. 

FinCEN also works closely with its 

regulatory partners to take enforcement 

action against financial institutions that 

systemically and egregiously violate the 

provisions of the BSA, including imposing 

civil money penalties when appropriate. 

Timely enforcement action is essential to 

deter non-compliance with the BSA. In 

FY 2009, FinCEN met its target to process 

enforcement matters within 1 year. 

In the analytical area, FinCEN supports 

domestic law enforcement and 

international FIU partners by providing 

analyses of BSA information. To assess 

the effectiveness of this analysis, FinCEN 

measures the percentage of customers that 

find these analytic reports highly valuable. 

This measure closely ties to how BSA 

information is used by law enforcement 

and international FIUs to identify, 

investigate, and prevent abuse of the 

financial system. In FY 2009, FinCEN 

met its target of 80 percent with 81 

percent. 

In the efficient management, safeguarding, 

and use of BSA information, FinCEN 

conducts a survey of the users of the BSA 

E-Filing system to determine the overall 

satisfaction level and to identify where 

improvements are needed. The FY 2009 

target was to maintain at least a 90 percent 

satisfaction level, and FinCEN surpassed 

its target with 94 percent. 

Department of the Treasury - Budget in Brief FY 2011 Page 45
Department of the Treasury - Budget in Brief FY 2011 Page 46
Alcohol and Tobacco Tax and Trade Bureau 

Program Summary by Budget Activity 

(Dollars in thousands) 

Appropriation FY 2009 FY 2010 FY 2011 

Enacted Enacted Request $ Change % Change

$50,524 $51,500 $53,084 $1,584 3.1%

$48,541 $51,500 $53,084 $1,584 3.1% 

Subtotal, Alcohol and Tobacco Tax and Trade Bureau $99,065 $103,000 $106,168 $3,168 3.1% 

Offsetting Collections - Reimbursables $5,154 $4,234 $3,050 ($1,184) (28.0%) 

Total Program Operating Level $104,219 $107,234 $109,218 $1,984 1.9% 

Collect the Revenue 

 Protect the Public 

Note: FY 2011 Total Appropriated Resources includes $106,168 (dollars in thousands) in offsetting receipts collections from licensing and 

registration fee revenues. TTB's entire budget for FY 2011 is to be funded from licensing and registration fees, to cover both the Collect the 

Revenue and Protect the Public Budget Activities. The 547 FTE for FY 2011 excludes 15 FTE from the Puerto Rico reimbursable. 

Explanation of Request 

In FY 2011, the Alcohol and Tobacco Tax and 

Trade Bureau (TTB) will continue to focus its 

efforts on helping industry members comply 

with alcohol, tobacco, firearms and ammunition laws and regulations, in the interest 

of collecting all appropriate excise taxes and 

promoting a marketplace for alcohol beverages 

that complies fully with federal production, 

labeling, advertising, and marketing standards. 

The FY 2011 President’s budget request 

enables TTB to continue its programs and 

activities necessary to meet the performance 

measures supporting TTB’s strategic goals of 

collecting revenue and protecting the public. 

Total resources required to support TTB 

activities for FY 2011 are $109,218,000, 

including $106,168,000 in offsetting collections from annual fee receipts, and 

$3,050,000 from other offsetting collections 

and reimbursable programs. 

Purpose of Program 

TTB serves as the nation’s primary federal 

authority in the regulation of the alcohol and 

tobacco industries. TTB is responsible for the 

administration and enforcement of two major 

areas of federal law affecting those industries, 

namely; those sections of the Internal Revenue 

Code 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 those engaged in the alcohol beverage 

industry and the protection of consumers of 

alcohol beverages. 

Collect the Revenue - TTB is charged with 

collecting alcohol, tobacco, firearms, and 

ammunition excise taxes. These products 

generate nearly $21 billion in tax revenue 

annually, making TTB the third largest tax 

collection agency in the federal government. 

Alcohol and tobacco taxes collected by TTB 

are remitted to the Department of the Treasury 

General Fund. Firearms and ammunition 

excise taxes are remitted to the Fish and 

Wildlife Restoration Fund under provisions of 

the Pittman-Robertson Act of 1937. 

The excise taxes collected by TTB come from 

taxes imposed and collected at the producer 

and importer level of operations. Members of 

the regulated industries paying excise taxes are 

distilleries, breweries, bonded wineries, 

bonded wine cellars, manufacturers of paper 

and tubes for tobacco products, manufacturers 

of tobacco products, and manufacturers and 

importers of firearms and ammunition. About 

200 of the largest taxpayers account for 98 

percent of the annual excise tax collected. In 

FY 2009, the majority of taxes collected were 

Department of the Treasury - Budget in Brief FY 2011 Page 47
Appropriation Amount 

FY 2010 Enacted 103,000 

Changes to Base: 

Maintaining Current Levels (MCLs): $1,790 

FERS % Change 128 

Non-Pay Inflation Adjustment 500 

Pay Annualization 325 

Pay Inflation Adjustment 837 

Non-Recurring Costs: ($3,500) 

Two Year Funding for Special Agents (3,500) 

Efficiencies Savings: ($622) 

Business Process Reengineering (213) 

Reconfiguration of Field Offices (112) 

Procurement Savings (includes VOIP) (297) 

Total FY 2011 Base 

Subtotal FY 2011 Changes to Base ($2,332) 

100,668

Program Changes: 

Program Increases: $5,500 

Implement Annual Licensing & 5,500 

Registration Fee 

Total FY 2011 Budget Request 

Subtotal FY 2011 Program Changes $5,500 

106,168 

Total FY 2011 Budget Request (Net) 

Annual Licensing and Registration Fees (106,168) 

from tobacco (62 percent) and alcohol (36 

percent), with the remainder from firearms and 

ammunition (2 percent). 

Strategies used to collect the revenue rightfully 

due include identifying any gaps in tax 

payment, identifying any illegal entities or 

individuals operating outside the excise tax 

system, developing a balanced field approach 

of audits and investigations that target noncompliant industry members, and establishing 

an identifiable presence within all of industry 

that encourages voluntary compliance. 

Protect the Public - TTB works to ensure the 

integrity of the alcohol and tobacco industries 

and of beverage alcohol products found in the 

marketplace, and regulates roughly 50,000 

alcohol and tobacco businesses. Under this 

activity, TTB enforces federal laws related to 

the issuance of permits to industry members 

and the production, labeling, advertising, and 

marketing of alcohol products. TTB conducts 

these activities through investigations, 

application reviews, laboratory testing, and 

educational programs. TTB works with 

industry, foreign and state governments, and 

other interested parties to make it easier to 

comply with regulatory requirements and 

maintain the appropriate level of oversight to 

ensure public safety. Education, partnerships, 

and open communication are paramount 

strategies in facilitating compliance with 

regulatory requirements. 

TTB FY 2011 Budget Highlights

(Dollars in thousands) 

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

TTB is $103,000,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$1,790,000 / +0 FTE 

Funds are requested for: A FERS percentage 

rate change of $128,000; non-labor related 

items such as contracts, travel, supplies, 

equipment and GSA rent adjustments of 

$500,000; FY 2011 cost of the January 2010 

pay increase of $325,000; and proposed 

January 2011 pay raise of $837,000. 

Non-Recurring Costs 

Two Year Funding for Special Agents -

$3,500,000 / +0 FTE 

Under the FY 2010 appropriation, two-year 

funding was designated for law enforcement 

agents and related support staff to target 

tobacco smuggling and diversion criminal 

activities. 

Department of the Treasury - Budget in Brief FY 2011 Page 48
The FY 2010 carry forward balance from this 

multi-year account will be used to cover this 

activity in FY 2011. 

Efficiencies Savings 

Business Process Reengineering -$213,000 / 

+0 FTE 

Savings realized by the introduction of 

automation and redesigned business processes 

to ensure bureau operations are efficiently 

and effectively managed. 

Reconfiguration of Field Offices -$112,000 / 

+0 FTE 

Savings from the reconfiguration of bureau 

field offices. 

Procurement Savings (VOIP) -$297,000 / +0 

FTE 

Resulting savings from the implementation of 

new technology (Voice Over Internet Protocol) that will lower the cost of communication 

services as compared to traditional phone 

services. 

Program Increases 

Implement Annual Licensing & Registration 

Fee +$5,500,000 / +12 FTE 

Funds are needed to implement the proposed 

legislation designed to establish a permanent 

program for FY 2011 and each fiscal year 

thereafter, requiring the payment of annual 

fees from alcohol and tobacco industry 

members. The $5.5 million in program costs 

are principally recurring costs, and will cover 

labor and other program operating costs. This 

program will conduct key business activities 

including the mailing and processing of 

returns, issuance of non compliance letters, 

maintaining a client registry, responding to 

customer inquiries, along with processing of 

collections and accounting for the revenues. 

Adjustments to Request Annual Fee 

Annual Licensing and Registration Fees -

$106,168,000 / +0 FTE 

Annual special receipts (annual fees) will 

reduce direct funding. The receipts from the 

annual fee program will be budgeted and 

accounted for as offsetting collections. 

Explanation of Budget Activities 

Salaries and Expenses 

Collect the Revenue ($53,084,000 from direct 

appropriations and $1,525,000 from 

reimbursable programs) 

The FY 2011 President’s Budget request is 

$53,084,000 from offsetting collections 

(annual fees) and $1,525,000 from 

reimbursable programs, for a total operating 

level of $54,609,000. The Collect the 

Revenue activity works toward providing the 

most effective and efficient systems for the 

collection of tax revenue, eliminating or 

preventing tax evasion and other criminal 

conduct, and providing high quality service 

while imposing the least regulatory burden on 

taxpayers. This program includes projects 

designed to allow taxpayers to report and pay 

excise taxes electronically. 

Protect the Public ($53,084,000 from direct 

appropriations and $1,525,000 from 

reimbursable programs) 

The FY 2011 President’s Budget request is 

$53,084,000 from offsetting collections 

(annual fees) and $1,525,000 from 

reimbursable programs, for a total operating 

level of $54,609,000. The Protect the Public 

activity ensures the integrity of products and 

industry members in the marketplace, ensures 

compliance with laws and regulations by 

regulated industries, and provides information 

to the public as a means to prevent consumer 

deception. Under this activity, TTB enforces 

compliance with federal laws related to the 

issuance of permits to industry members and 

the production, importation, exportation, 

Department of the Treasury - Budget in Brief FY 2011 Page 49
labeling, advertising, and marketing of alcohol 

products. TTB conducts investigations, 

application reviews, laboratory testing, and 

educational programs in support of its mission. 

Legislative Proposals 

Extend Pay Demonstration Project: TTB 

proposes to continue the Pay Demonstration 

Project by amending the General Provision 

language to extend the program for one 

additional year. 

Annual Licensing and Registration Fee 

Program: Legislation will be proposed to 

allow TTB to establish a permanent program 

for FY 2011 and for future fiscal years 

requiring the payment of annual fees from its 

industry members. The annual fees will be 

collected from approximately 400,000 

businesses each year. This includes retailers 

and wholesale dealers in liquors and beer; 

every proprietor of distilled spirits plants, 

bonded wine cellars, bonded wine warehouses, 

TTB Performance by Budget Activity 

and tax-paid wine bottling houses; every 

brewer; denatured spirits, recovery, and taxfree users (industrial alcohol); and nonbeverage domestic drawback claimants. 

Tobacco importers, retailers, and wholesalers 

are also included. These fees will support the 

bureau’s core mission and the funds will be 

used to continue to provide benefits to 

retailers, wholesalers, breweries, wineries, 

distilleries, and industrial alcohol businesses. 

In particular, TTB’s efforts help ensure that 

alcohol and tobacco products are not 

contaminated, misbranded or illegally 

marketed, and prevent dishonest persons from 

entering into the alcohol and tobacco 

distribution system. This promotes fair 

competition among all industry members. 

Regulation of these industries also protects the 

public against adulterated alcohol products, 

and misleading labels and advertisements. 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Collect the Revenue Amount of revenue collected per 

program dollar (E) 

0 313 300 427 Yes 400 400 

Collect the Revenue Percent of voluntary compliance 

from large taxpayers in filing tax 

payments timely and accurately (in 

terms of revenue)(Oe) 

0 94 85 94 Yes 92 92 

Protect the Public Average number of days to process 

an original permit application at the 

National Revenue Center (E) 

0 64 72 64 Yes 72 72 

Protect the Public National Revenue Center (NRC) 

customer satisfaction survey results 

(%)(Oe) 

0 90 85 89 Yes 85 85 

Protect the Public Percent of electronically filed 

Certificate of Label Approval 

applications (%) (E) 

51 62 53 74 Yes 78 85 

Protect the Public Percentage of importers identified 

by TTB as illegally operating 

without a Federal permit (%)(Oe 

0 22 19 15 Yes 19 18 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, DISC - 

discontinued, and B - baseline 

Department of the Treasury - Budget in Brief FY 2011 Page 50
Description of Performance 

The bureau continues to collect the federal 

excise taxes due on its regulated commodities 

in a highly efficient manner, and continues to 

help industry members comply with alcohol 

and tobacco laws and regulations. During FY 

2009, TTB met all of its targeted performance 

goals, while showing continued improvements 

in performance scores. The bureau plans to 

continue to monitor its performance, and will 

continue to capture performance information 

on program operations to both measure and 

improve the effectiveness of its programs. 

The investments in the Collect the Revenue 

activity resulted in the following performance 

highlights and accomplishments during 

FY 2009: 

•	 Collected $21 billion in excise taxes, 

interest, and other revenues from alcohol, 

tobacco, firearms, and ammunition 

industries from 6,800 excise taxpayers 

having operations that resulted in tax 

payments during the year. 

•	 Expanded the e-filing program to allow all 

excise taxpayers to file and pay taxes, and 

file monthly operational reports, electronically through the Pay.gov system. The 

number of Pay.gov registrants is over 

4,900. 

•	 Processed $473 million in cover-over 

payments to Puerto Rico and $8 million to 

the U.S. Virgin Islands. Federal excise 

taxes collected on rum produced in Puerto 

Rico and the Virgin Islands that are 

subsequently imported into the United 

States are “covered-over” (or paid into) the 

treasuries of Puerto Rico and the Virgin 

Islands. 

•	 Processed $269 million in drawback 

claims. Under current law, persons who 

use non-beverage alcohol in the manufacture of medicines, food products, 

•	 flavors, extracts, or perfume and other nonpotable products may be eligible to claim 

drawback of excise taxes paid on distilled 

spirits used in their products. The TTB 

laboratory analyzes and approves a product 

formula before a company can 

manufacture a product and file a claim. 

The investments in Protect the Public activity 

have resulted in the following performance 

highlights and accomplishments during 

FY 2009: 

•	 Processed 124,966 Certificate of Label 

Approval (COLAs) applications through 

the bureau’s COLAs Online system for 

electronic filing of label applications. 

About 74 percent of the applications were 

filed electronically. The Federal Alcohol 

Administration Act requires importers and 

bottlers of alcoholic beverages to obtain a 

COLA prior to introduction of the product 

into commerce. 

•	 Issued 5,533 original permits and approved 

17,755 amended permits. TTB issues 

original and amended permits to persons 

who are engaged in the alcohol and 

tobacco industries. TTB screens 

applications to prevent unqualified persons 

from engaging in operations. Illicit activity 

in these industries has the potential to be 

highly lucrative so it is crucial that 

organized crime and terrorists are kept out 

of these industries. 

•	 Initiated more than 1,300 field application 

investigations of industry members 

regarding applications, consumer complaints, tax fraud, trade practice violations, 

and product and labeling integrity 

verifications. 

Department of the Treasury - Budget in Brief FY 2011 Page 51
Department of the Treasury - Budget in Brief FY 2011 Page 52
Financial Management Service 

Program Summary by Budget Activity 

(Dollars in thousands) 

Appropriation FY 2009 FY 2010 FY 2011 

Enacted Enacted Request $ Change % Change

 Payments $147,717 $150,395 $142,537 ($7,858) (5.2%)

 Collections $21,521 $21,911 $21,690 ($221) (1.0%)

 Government-wide Accounting and Reporting $70,547 $71,826 $71,026 ($800) (1.1%) 

Subtotal, Financial Management Service $239,785 $244,132 $235,253 ($8,879) (3.6%) 

Offsetting Collections - Reimbursables $228,010 $234,690 $216,730 ($17,960) (7.7%) 

Total Program Operating Level $467,795 $478,822 $451,983 ($26,839) (5.6%) 

*The FY 2009 figure does not include $7 million received from the American Recovery and Reinvestment Act. 

Explanation of Request 

The Financial Management Service (FMS) FY 

2011 President’s Budget request focuses on 

continued implementation of modernization 

initiatives in FMS’ payments, collections, debt 

collection, and government-wide accounting 

functions. One such initiative is the Financial 

Information Reporting Standardization 

(FIRST), which will enhance and improve 

operations by improving accuracy and 

integrating budgetary and government-wide 

accounting with proprietary information. 

Another initiative is the Collections and Cash 

Management Modernization (CCMM) 

program, which is streamlining, modernizing 

and improving the process of Treasury’s 

collections and cash management programs. 

The Department is committed to moving to 

paperless processing throughout its bureaus 

and programs, including increasing the number 

of payments and collections made 

electronically. FMS will play a critical role 

through an increasing use of electronic benefit 

payments and collections. This will help 

streamline intergovernmental processes and 

enhance service to the general public. 

FMS strives to consistently look for ways to 

increase the number of payments and 

collections made electronically. The Paperless 

Treasury initiative will move FMS closer to an 

all-electronic organization. Two important 

components of this initiative include: the 

phasing in of government benefit check 

recipients to electronic deposit and requiring 

all businesses with $2,500 or more in quarterly 

tax liability to pay electronically. The use of 

electronics will allow FMS to improve the 

accuracy and efficiency of transactions and 

operations, eliminate paper-based processes, 

and contribute to increasing electronic 

transactions within government and with the 

public. 

Total resources required to support FMS 

activities for FY 2011 are $451,983,000, 

including $235,253,000 from direct 

appropriations, and $216,730,000 from 

offsetting collections and reimbursable 

programs. 

Purpose of Program 

The Financial Management Service (FMS) 

plays a key role in supporting the Department 

of the Treasury’s strategic goal of managing 

the United States Government’s finances 

effectively by operating as the financial 

manager and principal fiscal agent for the 

Federal Government. This role includes 

managing the nation’s finances by collecting 

money due to the United States, disbursing its 

payments, and performing central accounting 

functions. 

Department of the Treasury - Budget in Brief FY 2011 Page 53
(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 244,132 

Changes to Base: 

Maintaining Current Levels (MCLs): $4,560 

FERS % Change 369 

Non-Pay Inflation Adjustment 843 

Pay Annualization 933 

Pay Inflation Adjustment 2,415 

Efficiencies Savings: ($13,439) 

Payment Modernization/Operational (3,020) 

Realignment PM/DMS (3,390) 

Elimination of Paper-Based Process (4,429) 

IT Efficiency Savings (2,600) 

Total FY 2011 Base 235,253 

Total FY 2011 Budget Request 235,253 

Subtotal FY 2011 Changes to Base ($8,879) 

As the Government’s financial manager, FMS 

oversees a daily cash flow in excess of 

$60 billion, disbursing 85 percent of the 

Federal Government’s payments. These 

payments include income tax refunds, Social 

Security benefits, veterans’ benefits and other 

Federal payments to individuals and 

businesses. FMS also administers the world’s 

largest collection system, collecting over $2.8 

trillion in FY 2009. FMS provides cash 

management guidance to Federal Program 

Agencies (FPAs), maintains the Government’s 

accounting books, and compiles and publishes 

government-wide financial information used to 

monitor the Government’s financial status. 

Finally, FMS serves as the Government’s 

central debt collection agency for delinquent 

non-tax debt. 

FMS FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

FMS is $244,132,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$4,560,000 / +0 FTE 

Funds are requested for: A FERS percentage 

rate change of $389,000, FY 2011 cost of the 

January 2010 pay increase of $933,000; 

proposed January 2011 pay raise of 

$2,415,000; and non-labor related items such 

as contracts, travel, supplies, equipment and 

GSA rent adjustments of $843,000. 

Efficiencies Savings 

Payment Modernization/Operational 

Efficiency -$3,020,000 / -60 FTE 

The Payment Application Modernization 

(PAM) Project streamlines the FMS payments. 

PAM will replace the current mainframe-based 

software applications used to disburse 

approximately one billion federal payments 

annually, which along with other 

modernization efforts will result in operational 

efficiencies savings. 

Realignment PM/DMS -$3,390,000 / -30 FTE 

Consolidation of Debt Management and 

Payment Management business processes will 

allow FMS to assure operational continuity 

and maximize use of its call centers. 

Elimination of Paper-Based Process -

$4,429,000 / -35 FTE 

The implementation of several IT systems will 

eliminate current paper processes. For 

example, the implementation of the Judgment 

Fund Internet Claims System (JFICS) allows 

federal agencies to submit their claims for 

payment electronically to the Judgment Fund. 

FMS is in the process of rolling out JFICS to 

federal agencies which will eliminate paper 

and result in savings to FMS. Additionally, 

FMS plans to analyze its administrative needs 

and redistribute resources to critical areas. 

IT Efficiency Savings -$2,600,000 / +0 FTE 

FMS will consolidate several software 

contracts and move applications from the 

Bureau of Public Debt server and expects to 

gain efficiency savings from its transition to 

broadband. 

Department of the Treasury - Budget in Brief FY 2011 Page 54
Explanation of Budget Activities 

Salaries and Expenses 

Payments ($142,537,000 from direct 

appropriations and $131,060,000 from 

reimbursable programs) 

FMS issues and distributes payments, develops 

and implements Federal payment policy and 

procedures, promotes the use of electronics in 

the payment process, and assists agencies in 

converting payments from paper checks to 

Electronic Funds Transfer (EFT). This 

activity also includes controlling and 

providing financial integrity to the payments 

process through reconciliation, accounting, 

and claims activities. Included in this activity 

is the claims activity which settles claims 

against the United States. These claims result 

from Federal Government checks that have 

been forged, lost, stolen, or destroyed. FMS 

collects monies from those parties liable for 

fraudulent or otherwise improper negotiation 

of Government checks. It also includes 

processing claims and reclamations for EFT 

payments. 

Collections ($21,690,000 from direct 

appropriations and $1,419,000 from 

reimbursable programs) 

FMS collects revenues needed to operate the 

Federal Government through the management 

of the Federal Government’s collections 

infrastructure. In FY 2009, FMS collected 

$2.86 trillion, of which 83 percent was 

collected electronically, through a network of 

more than 9,000 financial institutions. It also 

manages the collection of Federal revenues 

such as individual and corporate income tax 

deposits, customs duties, loan repayments, and 

fines and proceeds from leases. 

Debt Collection ($80,036,000 from 

reimbursable programs) 

The Debt Collection activity collects 

delinquent Government and child support debt 

by providing centralized debt collection, 

oversight, and operational services to FPAs 

and states as required by the Debt Collection 

Improvement Act (DCIA) of 1996 and related 

legislation. The services include, but are not 

limited to, collecting delinquent debts through 

Cross-Servicing and offsetting Federal 

payments, providing a database for use as a 

tool for barring delinquent debtors, providing 

post-judgment collection, advising and 

educating agencies towards improving debt 

management, and referrals to the Department 

of Justice. 

Government-wide Accounting and Reporting 

($71,026,000 from direct appropriations and 

$4,215,000 from reimbursable programs) 

The Government-wide Accounting and 

Reporting activity maintains the Federal 

Government’s books and accounts for its 

monetary assets and liabilities by operating 

and overseeing the Government’s central 

accounting and reporting system. It also 

works with Federal agencies to adopt uniform 

accounting and reporting standards and 

systems and provides support, guidance, and 

training to assist FPAs in improving their 

government-wide accounting and reporting 

responsibilities. FMS gathers and publishes 

government-wide financial information which 

is used in establishing fiscal and debt 

management policies and is also used by the 

public and private sectors to monitor the 

Government’s financial status. These 

publications include: the Daily Treasury 

Statement, the Monthly Treasury Statement, 

the Treasury Bulletin, the Combined Statement 

of the United States Government, and the 

Financial Report of the United States 

Government (FR). 

Legislative Proposals 

Debt Collection 

Authorize Post-Levy Due Process 

This proposed amendment to 26 U.S.C. § 6330 

would allow the IRS to levy the payment of a 

Department of the Treasury - Budget in Brief FY 2011 Page 55
federal contractor who owes delinquent taxes, 

and provide the taxpayer with notice and an 

opportunity for an administrative collection 

due process (CDP) hearing, and for judicial 

review, within a reasonable time after the levy. 

The IRS currently has this authority for levies 

against state tax refunds and to collect federal 

employment taxes. 

Under the automated Federal Payment Levy 

Program, Treasury matches federal tax 

liabilities against federal payments to 

contractors. When a match occurs, IRS issues 

the CDP notice but cannot levy the payment 

until the CDP requirements are complete. By 

this time the payment has already been made 

and the opportunity for levy is lost. This 

proposal would remedy this situation by 

allowing the IRS to levy the payment at the 

time the payment is identified. 

Allow IRS to Levy 100 Percent of All Vendor 

Payments 

This proposed amendment to 26 U.S.C. § 

6331(h)(3) would allow IRS to continuously 

levy up to 100% of federal payments made to 

all federal vendors who owe delinquent taxes, 

not only vendors of “goods or services.” 

Currently, continuous levies of payments made 

to vendors of “goods or services” allow for 

collection from up to 100% of the levied 

payment, whereas continuous levies of other 

payments attach to no more than 15% of the 

payment. 

The current law excludes from the 100 percent 

continuous levy authority a sizable number of 

federal vendor payments, most notably 

payments related to the purchase or lease of 

real estate by the Federal Government, but also 

payments for other purchases such as 

intellectual property or software. As an 

operational matter, without this legislative 

change, it is not feasible for FMS to automate 

the continuous levy of vendor payments 

because of the significant changes to systems 

and accounting practices required across a 

wide array of agencies to allow for the 

differentiation between payments to vendors 

of “goods or services” versus other vendor 

payments. To identify vendor real estate 

payments, for example, would require more 

than 30 agencies to change the manner in 

which they code payments certified to FMS, as 

well as months of testing and verification of 

agency compliance. In addition, IRS would be 

relying upon the ability of agencies to 

accurately classify vendor payments in order 

to avoid improper seizure. 

Authorize FMS to Deduct Fees from Amounts 

Collected from Levies of Federal Payments 

Rather Than Have Fees Paid Out of IRS's 

Appropriation 

This proposal improves the way FMS collects 

fees from IRS to cover FMS’s costs in 

developing and operating the Federal Payment 

Levy Program (FPLP), which utilizes the 

Treasury Offset Program (TOP) to process 

levies of federal payments to collect 

delinquent tax debts. Rather than IRS paying 

fees from its annual discretionary 

appropriation pursuant to the Economy Act, 

this proposal would allow FMS to retain 

directly a portion of the levied funds. The 

proposal would ensure that sufficient funds are 

available to cover the costs of the program, 

and it is consistent with how other federal 

agencies reimburse FMS for collecting nontax 

debts through TOP. The proposal would 

modify the way that FMS recovers its 

transaction fees for processing IRS levies by 

permitting FMS to add the fee to the liability 

being recovered, thereby shifting the cost of 

collection to the delinquent taxpayer. The 

offset amount would be included within the 

15-percent limit on continuous levies against 

income. 

Allow The Offset of Certain Federal Benefit 

Payments to Collect Delinquent Child Support 

Debts. 

Department of the Treasury - Budget in Brief FY 2011 Page 56
This proposal would authorize the collection 

of delinquent, state-enforced child support 

debts from Social Security, Black Lung, and 

Railroad Retirement benefit payments in the 

same way that such payments are currently 

offset to collect federal nontax debts. Under 

current law, FMS offsets up to 15% of a 

benefit payment to collect nontax debts, and 

the amount of $750 per month is exempt from 

offset. Although States may directly request a 

benefit agency to garnish benefit payments to 

collect delinquent child support debts, this 

proposal provides a cost-efficient way for 

States to collect support from payments that 

States have been unable to identify as a source 

of funding from the delinquent child support 

obligor. 

While many federal benefit payments are 

statutorily protected from collection actions, 

the Debt Collection Improvement Act of 1996, 

as codified at 31 U.S.C. § 3716(c)(3)(A)(i), 

expressly waived any statutory limitation for 

purposes of offset under section 3716 to 

collect federal nontax debts. Section 

3716(h)(3), however, provides that the 

statutory waiver does not apply to collection of 

debts owed to States, which includes child 

support. The proposed language amends 

3716(h)(3) to include child support debts in 

the waiver. 

Allow Offset of Federal Income Tax Refunds to 

Collect Delinquent State Income Taxes for 

Debtors Who Currently Reside in Other States 

Under current law, federal tax refunds may be 

offset to collect delinquent state income tax 

obligations only if the delinquent taxpayer 

resides in the state collecting the tax. This 

proposal will allow FMS to offset federal 

income tax refunds to collect delinquent state 

tax obligations regardless of where the debtor 

resides. 

Department of the Treasury - Budget in Brief FY 2011 Page 57
75 days after the fiscal year-end. However, for 

FY 2009, some agencies that were 

significantly impacted by the substantial 

reporting requirements of the American 

Recovery and Reinvestment Act were granted 

reporting deadline extensions, which 

consequently impact the timing of the FR, now 

scheduled for February 16, 2010. The FR 

presents a picture of government-wide 

finances that complements the traditional 

Federal Government budget information. 

Additionally, FMS issued 100 percent of its 

government-wide accounting reports 

accurately and timely. FMS will continue to 

revamp and implement government-wide 

accounting processes to provide more useful 

and reliable financial information on a regular 

basis. FMS will continue moving forward on 

the Financial Information and Reporting 

Standardization (FIRST) initiative. This 

initiative integrates budget and financial 

reports from FPAs. FIRST will improve the 

consistency of the budgetary and proprietary 

accounting data recorded in agency financial 

statements and reported to FMS through its 

trial balance. 

Department of the Treasury - Budget in Brief FY 2011 Page 59
Department of the Treasury - Budget in Brief FY 2011 Page 60
FMS Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Payments Percentage of paper check and Electronic 

Funds Transfer (EFT) payments made 

accurately and on time (Oe) 

100 100 100 100 Y 100 100 

Collections Percentage collected electronically of total 

dollar amount of Federal government receipts 

(Oe) 

79 80 80 84 Y 80 82 

Debt Collection Amount of delinquent debt collected through 

all available tools ($ billions) (Ot) 

3.76 4.41 3.90 5.03 Y 4.65 4.84 

Government-wide Percentage of Government-wide accounting 

Accounting and reports issued accurately (Oe) 

Reporting 

100 100 100 100 Y 100 100 

Government-wide Percentage of Government-wide accounting 

Accounting and reports issued timely (E) 

Reporting 

100 100 100 100 Y 100 100 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, DISC – discontinued, and B – 

baseline 

Description of Performance 

Payments: In FY 2009, FMS issued nearly 1 

billion non-Defense payments worth almost 

$2.7 trillion to a wide variety of recipients, 

such as those who receive Social Security 

benefits, IRS tax refunds, and veterans’ 

benefits. Nearly eighty-one percent of all 

payments disbursed were issued via direct 

deposit. Additionally, in FY 2009, FMS 

disbursed over 54.9 million Economic 

Recovery Act Payments (ERP) totaling $13.7 

billion dollars with 85 percent of the payments 

made by EFT. FMS expects total ERP 

payments disbursed will be over 55 million 

valued at over $13.8 billion. 

In FY 2011, FMS will continue to expand the 

use of electronic media to deliver Federal 

payments. Electronic media provides a safer, 

more secure and reliable method of payment 

for recipients. It also decreases the number of 

paper checks issued, which minimizes costs 

and inefficiencies associated with the delivery 

of non-electronic benefits. 

Collections: In FY 2009, FMS collected $2.86 

trillion, of which 83 percent was collected 

electronically, through a network of more than 

9,000 financial institutions. FMS is in the 

process of developing a comprehensive effort 

to streamline, modernize, and improve the 

processes and systems supporting Treasury’s 

collections and cash management program. 

This effort, Collections and Cash Management 

Modernization, will improve financial 

performance by enabling FMS and 

government agencies to more effectively 

manage financial transaction information and 

improve the efficiency of the collections 

information reporting processes. 

Debt Collection: In FY 2009, FMS collected 

$5.07 billion in delinquent debt, which 

includes $239,162,817 from Economic 

Recovery Payments to satisfy delinquent Child 

Support, Federal Non Tax and State Debt. As 

a result of FMS continued program 

improvements, total debt collections since the 

enactment of the DCIA are over $42.5 billion 

through FY 2009. FMS will continue to 

enhance FedDebt, a comprehensive system 

that integrated FMS existing collection 

programs: Cross-Servicing and the Treasury 

Offset Program. 

Government-wide Accounting and Reporting: 

FMS has consistently released the Financial 

Report of the United States Government (FR) 

Department of the Treasury - Budget in Brief FY 2011 Page 58
(Dollars in thousands) 

Appropriation FY 2009 

Enacted 

Total Program Operating Level $208,548 

 Wholesale Securities Services $23,438 $24,492 $24,234 ($258) (1.1%)

 Government Agency Investment Services $17,723 $16,264 $16,162 ($102) (0.6%)

 Retail Securities Services $139,109 $142,645 $136,327 ($6,318) (4.4%)

 Summary Debt Accounting $7,082 $8,843 $9,262 $419 4.7% 

Subtotal, Bureau of the Public Debt $187,352 $192,244 $185,985 ($6,259) (3.3%) 

Offsetting Collections - Reimbursables $21,196 $22,110 $22,773 $663 3.0% 

FY 2010 FY 2011 

Enacted Request 

Note: Total Appropriated Resources include $10,000,000 in projected user fee collections. 

$ Change % Change

$214,354 $208,758 ($5,596) 

Program Summary by Budget Activity 

(2.6%) 

Bureau of the Public Debt 

The FY 2011 President’s Budget request for 

the Bureau of the Public Debt (BPD) includes 

funding to support the Department of the 

Treasury’s strategic outcome of financing the 

government at the lowest possible cost over 

time. Public Debt’s top priority is to ensure 

that the most efficient systems are in place to 

conduct borrowing operations and deliver 

securities services to investors. Public Debt 

will contribute to Treasury’s overall paperless 

initiative by increasing the issuance of savings 

bonds electronically including moving to all 

electronic issuance for payroll savings bond 

sales. 

Total resources to support Public Debt 

activities in FY 2011 are $208,758,000, including $185,985,000 from direct appropriations, of which $10,000,000 are user fees, 

and $22,773,000 from offsetting collections. 

Purpose of Program 

BPD’s mission is to borrow the money needed 

to operate the federal government, account for 

the resulting debt, and provide reimbursable 

support services to federal agencies. In 

carrying out its mission and vision, Public 

Debt annually auctions and issues more than 

Explanation of Request 

$8 trillion in Treasury bills, notes, bonds and 

Treasury Inflation-Protected Securities (TIPS); 

administers on Treasury's behalf its regulatory 

responsibilities for the government securities 

market; ensures reliable systems and processes 

are in place for issuing, transferring, paying 

interest on and redeeming Treasury securities; 

issues and redeems more than 70 million paper 

savings bonds each year; administers in excess 

of $4 trillion in investments for more than 250 

federal trust funds; and provides timely and 

accurate information on the public debt. 

In support of Treasury’s strategic outcome of 

government financing at the lowest possible 

cost over time, Public Debt’s top priority is to 

guarantee operational readiness to meet the 

government's critical financing needs by 

ensuring the most efficient systems are in 

place to conduct borrowing operations and 

deliver securities services to investors. To that 

end, the bureau continues to enhance its 

auction process. The Treasury Automated 

Auction Processing System (TAAPS) provides 

simple bid-entry, quick and easy access to data 

and superior reliability and security. 

Department of the Treasury - Budget in Brief FY 2011 Page 61
(Dollars in thousands) 

Appropriation Amount 

FY 2010 Enacted 192,244 

Changes to Base: 

Base Realignment: $0 

FTE Adjustment -

Maintaining Current Levels (MCLs): $3,171 

FERS Percentage Change 188 

Non-Pay Inflation Adjustment 1,005 

Pay Annualization 651 

Pay Inflation Adjustment 1,327 

Efficiencies Savings: ($9,430) 

Revise Issuing Agent Fee Structure (1,900) 

Reduce Paying Agent Fees (2,500) 

Consolidate Parkersburg Facilities (1,800) 

Program Efficiencies (1,000) 

Procurement Savings (1,630) 

Reduce Travel (200) 

Non-Salary Program Efficiencies (400) 

Total FY 2011 Base 185,985 

Total FY 2011 Budget Request 185,985 

Subtotal FY 2011 Changes to Base ($6,259) 

Total FY 2011 Budget Request (Net) 175,985 

User Fees (10,000) 

BPD FY 2011 Budget Highlights

FY 2011 Budget Adjustments 

FY 2010 Enacted 

The FY 2010 enacted direct appropriation for 

BPD is $192,244,000. 

Base Realignment 

FTE Adjustment +$0 / -21 FTE 

Upon review of its FY 2010 proposed 

financial plan, BPD identified 21 unfunded 

base FTE which are reflected in this 

adjustment. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain Current 

Levels +$3,171,000 / +0 FTE 

Funds are requested for: A FERS percentage 

rate change of $188,000; non-labor related 

items such as contracts, travel, supplies, 

equipment and GSA rent adjustments of 

$1,005,000; FY 2011 cost of the January 2010 

pay increase of $651,000; and a proposed 

January 2011 pay raise of $1,327,000. 

Efficiencies Savings 

Revise Issuing Agent Fee Structure -

$1,900,000 / +0 FTE 

Savings due to eliminating the differential paid 

to paper savings bond issuing agents who 

submit customer orders electronically rather 

than by paper applications. 

Reduce Paying Agent Fees -$2,500,000 / +0 

FTE 

Due to an anticipated decrease in the number 

of savings bonds redeemed, Public Debt is 

reducing its paying agent fees. 

Consolidate Parkersburg Facilities -

$1,800,000 / +0 FTE 

Public Debt realizes savings by consolidating 

facilities in Parkersburg. 

Program Efficiencies -$1,000,000 / -12 FTE 

Savings will be realized in all BPD programs 

through staff reductions and other efficiencies. 

Procurement Savings -$1,630,000 / +0 FTE 

Cost savings by streamlining Department-wide 

procurement operations and reducing external 

procurement spending. 

Reduce Travel -$200,000 / +0 FTE 

Public Debt realizes savings from a reduction 

in travel. 

Non-Salary Program Efficiencies -$400,000 / 

+0 FTE 

Public Debt realizes savings from non-salary 

program efficiencies. 

Adjustments to Request User Fee 

User Fees -$10,000,000 / +0 FTE 

For $100 account maintenance fees that Public 

Debt charges to account holders in the Legacy 

Treasury Direct system with an account 

balance of more than $100,000 in par value. 

Department of the Treasury - Budget in Brief FY 2011 Page 62
Explanation of Budget Activities 

Salaries and Expenses 

Wholesale Securities Services ($24,234,000 

from direct appropriations and $2,967,000 

from reimbursable programs) 

Public Debt announces, auctions and issues 

marketable Treasury bills, notes, bonds and 

TIPS. This program ensures that the government’s critical financing needs are met and 

oversees an infrastructure that provides for the 

transfer, custody and redemption of Treasury 

securities in the wholesale market. Public 

Debt also administers Treasury's regulations 

that provide investor protection and maintain 

the integrity, liquidity and efficiency in the 

government securities market. 

Government Agency Investment Services 

($16,162,000 from direct appropriations and 

$1,979,000 from reimbursable programs) 

Public Debt supports federal, state and local 

government agency investments in nonmarketable Treasury securities as well as 

federal agency borrowing from the 

Department of the Treasury. There are more 

than 250 trust and investment funds held by 

federal agencies. For 18 of the funds, the 

Secretary of the Treasury, designated by 

statute, is the managing trustee. 

Retail Securities Services ($136,327,000 from 

direct appropriations, including $10,000,000 

from user fee collections, and $16,693,000 

from reimbursable programs) 

Public Debt serves more than 50 million retail 

customers who have invested in marketable 

and savings securities directly with Treasury. 

Investors may hold these securities in bookentry or paper form. BPD will position 

Treasury to eliminate new issues of paper 

savings bonds. The program will continue 

focusing on improving the quality and 

efficiency of customer service by formulating 

and providing recommendations to support 

skill-based routing, web chat and the use of 

images in the Treasury Retail E-Services 

environment. 

Summary Debt Accounting ($9,262,000 from 

direct appropriations and $1,134,000 from 

reimbursable programs) 

This program is key to meeting Public Debt's 

responsibility to account for the public debt 

and related interest expense incurred to finance 

the operations of the federal government. 

Public Debt produces daily reports on the 

balance and composition of the public debt, 

provides the overarching control structure for 

dozens of subordinate securities systems and 

reconciles their related transactions and cash 

flows. 

Legislative Proposals 

Legislative Proposals 

Public Debt has no legislative proposals for 

FY 2011. 

Department of the Treasury - Budget in Brief FY 2011 Page 63
Budget Activity 

Wholesale 

Government 

Services 

Government 

Services 

Retail Securities 

Services 

Summary Debt Cost per summary debt accounting 9.11 11.81 

Accounting transaction ($) (E) 

FY 2007 FY 2008 FY 2009 FY 2010 

Target 

Percent of auction results released in 

Securities Services 2 minutes +/- 30 seconds (Oe) 

99.1 100 95 100 Y 95 100 

Cost per federal funds investment 

Agency Investment transaction ($) (E) 

68.53 64.98 69.11 41.71 Y 45.7 44.92 

Number of Government Agency 

Agency Investment Investment Services control 

processes consolidated (Oe) 

3 2 0 0 Y 5 0 

Percentage of retail customer service 

transactions completed within 11 

business days (Ot) 

99.43 99.86 90 99.83 Y DISC DISC 

9.29 10.01 8.66 Y 11.55 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, DISC – discontinued, 

and B - baseline 

FY 2011 

Performance Measure Target Actual Actual Actual Target Target Met? 

BPD Performance by Budget Activity 

Description of Performance 

The Bureau of the Public Debt has continued 

to set challenging performance goals with 

positive results. To improve performance, 

Public Debt places a high priority on adopting 

new technology to increase the security, 

flexibility and efficiency of financing the 

needs of the federal government. 

In FY 2009, Public Debt released auction 

results within two minutes, plus or minus 30 

seconds, 100 percent of the time, surpassing its 

performance target of 95 percent. In addition, 

Public Debt processed over 99 percent of retail 

customer transactions within 11 business days 

and met its targeted costs for summary debt 

accounting and federal funds investment 

transactions. 

The cost per federal funds investment 

transaction is projected to be $45.70 for FY 

2010 and $44.92 for FY 2011. The projected 

cost per federal funds investment transaction is 

increasing for FY 2010 due to an increase in 

support charges and projected constant 

transaction volumes. The FY 2011 target 

reflects constant transaction volumes and a 

reduction in overall general expenditures. 

Department of the Treasury - Budget in Brief FY 2011 Page 64
Internal Revenue Service 

(Dollars in Thousands) 

Appropriation / Budget Activity FY 2009 FY 2010 FY 2011 

ARRA Enacted1,2 Enacted Request $ Change % Change 

Taxpayer Services $2,293,000 $2,278,830 $2,321,975 $43,145 1.89%

 Pre-filing Taxpayer Assistance and Education 661,000 685,063 693,753 8,690 1.27%

 Filing and Account Services 1,632,000 1,593,767 1,628,222 34,455 2.16% 

Enforcement $5,117,267 $5,504,000 $5,797,400 $293,400 5.33%

 Investigations 611,601 637,694 651,966 14,272 2.24%

 Exam and Collections 4,355,186 4,706,350 4,974,618 268,268 5.70%

 Regulatory 150,480 159,956 170,816 10,860 6.79% 

Operations Support $3,867,011 $4,083,884 $4,108,000 $24,116 0.59%

 Infrastructure 875,538 900,852 889,929 ($10,923) -1.21%

 Shared Services and Support 1,269,642 1,296,629 1,337,776 41,147 3.17%

 Information Services 1,721,831 1,886,403 1,880,295 ($6,108) -0.32% 

Business Systems Modernization $229,914 $263,897 $386,908 $123,011 46.61% 

Health Insurance Tax Credit Administration $80,000 $15,406 $15,512 $18,987 $3,475 22.40% 

Subtotal Internal Revenue Service $80,000 $11,522,598 $12,146,123 $12,633,270 $487,147 4.01% 

Offsetting Collections - Reimbursable $113,896 $142,169 $144,592 2,423 1.70% 

Mandatory Appropriation - User Fees 165,521 187,100 194,100 7,000 3.74% 

Total Program Operating Level $80,000 $11,802,015 $12,475,392 $12,971,962 $496,570 3.98% 

1 FY 2009 Enacted excludes the Recovery Act, Administration Expenses account, funded in the Treasury Departmental Offices ($122M). 2 FY 2009 Enacted represents the approved FY 2009 Operating Plan. 

Explanation of Request 

The Internal Revenue Service (IRS) collects 

the revenue that funds the government and 

administers the nation’s tax laws. In FY 

2009, the IRS collected $2.345 trillion in 

taxes (gross receipts before tax refunds), 95 

percent of federal government receipts. In 

order to protect the flow of revenue to the 

government, the IRS pursues a robust 

service and enforcement agenda. The 

service agenda supports and protects the 

trillions in revenue that already comes into 

the Treasury every year from hundreds of 

millions of taxpayers. The enforcement 

agenda vigorously pursues those who evade 

their responsibility to pay the taxes they 

owe. 

Total resources to support the IRS activities 

for FY 2011 are $12,971,962,000. This 

includes $12,633,270,000 from direct 

appropriations, an estimated $144,592,000 

from reimbursable programs, and an 

estimated $194,100,000 from user fees. The 

direct appropriation is a $487,147,000 

increase, or 4.01 percent, more than the 

FY 2010 enacted level of $12,146,123,000. 

The IRS Strategic Plan 2009-2013 guides 

program and budget decisions and supports 

the Department of the Treasury Strategic 

Plan. The IRS Strategic Plan recognizes the 

increasing complexity of tax laws, changing 

business models, expanding use of 

electronic data and related security risks, 

accelerating growth in international tax 

activities, and growing human capital 

challenges. 

Department of the Treasury - Budget in Brief FY 2011 Page 65
The IRS Strategic Plan goals and objectives 

are: 

Improve Service to Make Voluntary 

Compliance Easier
 

Enforce the Law to Ensure Everyone Meets 

Their 

Obligation to Pay Taxes 

To improve service and make voluntary 

compliance easier, the IRS must: 

•	 Incorporate taxpayer perspectives to 

improve all service interactions; 

•	 Expedite and improve issue resolution 

across all interactions with taxpayers, 

making it easier to navigate the IRS; 

•	 Provide taxpayers with targeted, timely 

guidance and outreach; and 

•	 Strengthen partnerships with tax 

practitioners, tax preparers, and other third 

parties to ensure effective tax 

administration. 

To enforce the law to ensure everyone meets 

their obligations to pay taxes, the IRS must: 

•	 Proactively enforce the law in a timely 

manner while respecting taxpayer rights 

and minimizing taxpayer burden; 

•	 Expand enforcement approaches and tools; 

•	 Meet the challenges of international tax 

administration; 

•	 Allocate compliance resources using a 

data-driven approach to target existing and 

emerging high-risk areas; 

•	 Continue focused oversight of the taxexempt sector; and 

•	 Ensure that all tax practitioners, tax 

preparers, and other third parties in the tax 

system adhere to professional standards 

and follow the law. 

To achieve the service and enforcement goals, 

the IRS must: 

•	 Make the IRS the best place to work in 

government; 

•	 Build and deploy advanced information 

technology systems, processes, and tools to 

improve IRS efficiency and productivity; 

•	 Use data and research across the 

organization to make informed decisions 

and allocate resources; and 

•	 Ensure the privacy and security of data and 

safety and security of employees. 

The FY 2011 President’s Budget request for 

IRS provides the funding needed to implement 

key strategic priorities to achieve the Strategic 

Plan goals and objectives. 

Enforcement Program: The FY 2011 

President’s Budget request includes an 

Enforcement account increase of 

$293.4 million for investments in strong 

compliance programs, including a robust 

international enforcement initiative to address 

offshore tax evasion. The additional 

enforcement resources will address 

underreporting of income associated with 

international activities and expand 

enforcement efforts on noncompliance among 

corporate and high-wealth taxpayers. This 

increase is supported by a program integrity 

allocation adjustment that provides additional 

resources for the enforcement program. 

Increased resources for the IRS compliance 

programs yield direct, measurable results 

through high return on investment activities. 

The new enforcement personnel funded 

through a program integrity allocation 

adjustment in the FY 2011 President’s Budget 

will generate more than $1.9 billion in 

additional annual enforcement revenue once 

the new hires reach full potential in FY 2013. 

Vigorous enforcement also encourages 

voluntary compliance, further increasing 

Department of the Treasury - Budget in Brief FY 2011 Page 66
revenue. The return on investment estimate 

does not include the revenue impact from the 

deterrence value of these investments and 

other IRS enforcement programs, which is 

conservatively estimated to be at least three 

times the direct revenue impact. 

The tax law is complex and even sophisticated 

taxpayers can make honest mistakes on their 

tax returns. Accordingly, helping taxpayers 

understand their obligations under the tax law 

is critical to improving compliance. To this 

end, the IRS remains committed to a balanced 

program of assisting taxpayers in both 

understanding the tax law and remitting the 

proper amount of tax. 

Taxpayer Service Program: The FY 2011 

President’s Budget request includes a Taxpayer 

Services account increase of $43.1 million. 

The increase includes $20.9 million to 

improve telephone level of service, increasing 

the level of service performance target to 

75 percent from 70 percent in FY 2009 and 

71 percent in FY 2010. 

To continue the effort to move taxpayer 

service to the internet, and to support the 

Treasury effort to increase paperless 

transactions, an additional $25 million in 

Operations Support will be invested as part of 

a multi-year effort to improve the IRS.gov 

website infrastructure and redesign the 

IRS.gov website to meet taxpayer needs and 

the growing demand for more electronic 

services. Technology enhancements, including 

electronic filing and IRS.gov, allow more 

taxpayers to reach the IRS through the 

internet. In 2009, more than 1.7 billion web 

pages were viewed on www.IRS.gov, and 

more than 54 million taxpayers checked their 

refund status by accessing Where’s My 

Refund? in English or Spanish on the IRS 

website. Taxpayers also can use automated 

features found at 1-800-829-1040. In 

FY 2011, the IRS will complete the 

implementation of the Form 1040, U.S. 

Individual Income Tax Return, and supporting 

forms and schedules, and continue adding new 

forms and schedules to the electronic business 

portfolio to further increase web use. 

Providing quality taxpayer service is 

especially important to help taxpayers avoid 

making unintentional errors. Assisting 

taxpayers with their questions before they file 

their returns prevents inadvertent 

noncompliance and reduces burdensome postfiling notices and other correspondence from 

the IRS. 

In addition to the year-round assistance 

services previously listed, IRS services include 

issuance of tax forms and publications, rulings 

and regulations, Volunteer Income Tax 

Assistance (VITA) sites, and Tax Counseling 

for the Elderly (TCE) sites. Many of these 

sites provide information in both English and 

Spanish. 

Business Systems Modernization: The 

FY 2011 Budget provides $386.9 million for 

Business Systems Modernization to complete 

the new taxpayer account database and 

continue investments in electronic filing 

systems. Completion of the core taxpayer 

account database is the cornerstone of IRS IT 

modernization that will expedite refunds to 

140 million individual taxpayers; and allow 

the IRS to expand its online services to 

manage increasing taxpayer service demands. 

IRS Tax Preparer Strategy: In January 2010, 

the IRS announced multiple recommendations 

to increase oversight of federal tax return 

preparers, including new registration, testing, 

and continuing education requirements. The 

recommendations are intended to better 

leverage the tax return preparer community 

with the twin goals of increasing taxpayer 

compliance and ensuring uniform and high 

ethical standards of conduct for tax return 

Department of the Treasury - Budget in Brief FY 2011 Page 67
preparers. Planning and regulation preparation 

will proceed in FY 2010 with primary 

implementation of the initial changes 

anticipated in FY 2011. 

Purpose of Program 

The IRS serves individuals, businesses, and 

non-profit organizations, and processed more 

than 236 million tax returns in 2009. The 

system of voluntary tax compliance requires 

the IRS to excel in taxpayer service for those 

who are trying to meet their obligations under 

the law and provide a robust enforcement 

program for those who shirk their 

responsibilities to their fellow citizens. Most 

taxpayers comply with the law by filing 

returns and paying their taxes on time, but 

some do not comply because they do not 

understand their obligations under the complex 

tax laws. 

Helping taxpayers understand their obligations 

under the tax law is critical to improving 

compliance and addressing the tax gap, the 

difference between taxes owed and taxes paid 

on time. To this end, the IRS remains 

committed to a balanced program of assisting 

taxpayers to understand the tax law and remit 

the proper amount of tax and to pursue cases 

for which noncompliance is willful, even to 

the point of criminal tax evasion. The IRS 

remains committed to improving voluntary 

compliance and reducing the tax gap through 

both taxpayer service and enforcement. 

The FY 2011 President’s Budget request seeks 

funding to improve telephone level of service, 

to redesign IRS.gov, to support strong 

international tax and other compliance 

initiatives, and to complete the new taxpayer 

account database. 

Department of the Treasury - Budget in Brief FY 2011 Page 68
IRS FY 2011 Budget Highlights 

(Dollars in thousands) 

Health Business Taxpayer Operations Insurance Tax Appropriation Enforcement Systems Total Services Support Credit Modernization Administration 

FY 2010 Enacted Budget $2,278,830 $5,504,000 $4,083,884 $263,897 $15,512 $12,146,123 

Changes to Base 

Maintaining Current Levels (MCLs) $50,054 $110,506 $57,884 $889 $190 $219,523 

Pay Annualization 11,643 27,964 7,608 243 15 47,473 

Pay Inflation Adjustment 30,534 69,255 19,127 589 32 119,537 

Non-Pay Inflation Adjustment 2,495 4,460 29,026 140 36,121 

FERS Increased Participation 5,382 8,827 2,123 57 3 16,392 

Other Adjustment $3,494 $3,494 

Resource Adj to Support Recovery Act-HCTC Prgm Expansion 3,494 3,494 

Efficiencies/Savings (28,023) (7,092) (155,314) (209) (190,638) 

Non-Recur Savings (32,680) (32,680) 

Increase e-File Savings (23,186) 378 (22,808) 

IT Infrastructure and Process Improvements (75,000) (75,000) 

Reduce Procurement/Contracting (2,878) (2,246) (19,697) (179) (25,000) 

Reduce Printing, Travel, and Training (523) (1,979) (7,468) (30) (10,000) 

Reduce Tuition Assistance Program (1,436) (2,867) (847) (5,150) 

Eliminate Selective Mailing of Forms and Publications (20,000) (20,000) 

Subtotal Changes to Base $22,031 $103,414 (97,430) $889 $3,475 $32,379 

FY 2011 Base $2,300,861 $5,607,414 $3,986,454 $264,786 $18,987 $12,178,502 

Program Changes 

Program Reinvestment $2,792 $2,792 

Submission Processing Consolidation (Atlanta) 2,792 2,792 

Program Decrease (9,000) (9,000) 

Reduce Taxpayer Service Grant and Advocacy Programs (9,000) (9,000) 

Program Increases $27,322 $189,986 $121,546 $122,122 $460,976 

Taxpayer Service Initiatives $20,945 $25,000 $45,945 

Improve IRS.gov 25,000 25,000 

Increase Telephone Level of Service 20,945 20,945 

Enforcement Initiatives $6,377 $189,986 $51,083 $247,446 

Address Business and Individual International Compliance 1,779 97,527 21,780 121,086 

Reduce the Reporting Compliance Tax Gap 769 59,687 17,223 77,679 

Reduce the Nonfiling and Underpayment Tax Gap 91 28,166 9,924 38,181 

Support for Increased Enforcement Activities 3,738 1,262 5,000 

Maintain Recovery Act Staffing 4,606 894 5,500 

Business Systems Modernization (BSM) Initiative $45,463 $122,122 $167,585 

Continue Migration from Aging Tax Administration System 45,463 122,122 167,585 

Subtotal FY 2011 Program Changes $21,114 $189,986 $121,546 $122,122 $454,768 

Total FY 2011 President s Budget Request $2,321,975 $5,797,400 $4,108,000 $386,908 $18,987 $12,633,270 

Department of the Treasury - Budget in Brief FY 2011 Page 69
FY 2011 Budget Adjustments 

The IRS funding increase for FY 2011 is 

$487,147,000, which includes $219,523,000 

for maintaining current levels, a temporary 

base adjustment of $3,494,000 to support the 

Recovery Act’s expansion of the Health 

Coverage Tax Credit (HCTC), a decrease of 

$32,680,000 from non-recurring activities, a 

decrease of $157,958,000 from efficiencies 

and savings, and a program increase of 

$454,768,000 to improve taxpayer service, 

strengthen enforcement, and complete the new 

taxpayer account database. By FY 2013, the 

revenue-producing enforcement investments 

are projected to increase annual enforcement 

revenue by $1.9 billion. 

The budget request supports these activities by 

proposing the following initiatives: 

•	 $20,945,000 to increase the telephone level 

of service, which includes a $9.0 million 

reallocation from the Taxpayer Advocate 

Service (TAS), Low-Income Taxpayer 

Clinic (LITC) Grants program, Tax 

Counseling for the Elderly (TCE) program 

and the Volunteer Income Tax Assistance 

(VITA) Grants program; 

•	 $25,000,000 to improve and redesign the 

IRS.gov website; 

•	 $247,446,000 to reduce the tax gap by 

investing in a strong compliance program; 

and 

•	 $167,585,000 to complete development of 

the new taxpayer account database and 

continue investments in electronic filing 

systems. 

FY 2010 Enacted 

The FY 2010 enacted level for the IRS is 

$12,146,123,000, supporting an estimated 

95,070 FTE. 

Maintaining Current Levels 

Adjustments Necessary to Maintain Current 

Levels +$219,523,000 / 0 FTE Funds are 

requested for: FY 2011 cost of the January 

2010 pay increase of $47,473,000, the 

proposed January 2011 pay raise of 

$119,537,000, the cost of the increase in FERS 

agency contribution percentage of 

$16,392,000, and non-labor related items such 

as contracts, travel, supplies, equipment, and a 

GSA rent adjustment of $36,121,000. 

Base Adjustments 

Resource Adjustment to Support Recovery ActHCTC Program Expansion +$3,494,000 / 

0 FTE This temporary base increase will 

provide additional contractor funding for the 

continued support, sustainability, 

administration, and operation of the HCTC 

program. Taxpayer participation in the HCTC 

program is expected to grow because of the 

Recovery Act. The additional contractor 

support will allow HCTC to serve a 

significantly larger participant population. 

Technical FTE Adjustments $0 / -318 FTE 

This adjustment reflects permanent changes 

made to ensure FTE levels are fully funded in 

the base budget. 

Efficiencies and Savings 

Non-Recur Savings -$32,680,000 / 0 FTE 

This is the net of reductions of non-recurring, 

one-time costs associated with the IRS 

FY 2010 enforcement initiatives (e.g., IT 

equipment and training). 

Increase e-File Savings -$22,808,000 / 

-472 FTE This decrease is a result of savings 

from increased electronic filing (e-File), which 

is projected to lead to fewer returns filed on 

paper in FY 2011. The number of returns filed 

electronically is expected to increase 

Department of the Treasury - Budget in Brief FY 2011 Page 70
substantially in FY 2011 with the addition of 

the recently enacted Worker, Homeownership, 

and Business Assistance Act of 2009 (Public 

Law 111-92), which requires electronic filing 

by all tax preparers filing more than ten returns 

in a calendar year. 

Information Technology (IT) Infrastructure 

and Process Improvements 

-$75,000,000 / 0 FTE The IRS will reduce 

infrastructure costs through process 

improvements in IT infrastructure. Initiatives 

such as the Information Technology 

Infrastructure Library (ITIL) will allow the 

IRS to improve the quality of IT services. In 

addition, the IRS is working to achieve a 

Capability Maturity Model Integrated (CMMI) 

certification that will yield efficiencies in 

software engineering. 

Reduce Procurement/Contracting 

-$25,000,000 / 0 FTE In accordance with 

Presidential guidance on controlling 

contracting costs, the IRS will generate 

savings by improving the effectiveness of 

existing acquisition practices and reduce the 

cost of contracts. 

Reduce Printing, Travel, and Training 

-$10,000,000 / 0 FTE The IRS will generate 

savings by reducing agency-wide printing of 

selected internal manuals, selected training 

materials, and other items, non-case related 

travel and non-technical training. 

Reduce Tuition Assistance Program (TAP) 

-$5,150,000 / 0 FTE The Tuition Assistance 

Program provides funding to employees for 

courses that support both career development 

and the IRS mission. In FY 2011, the IRS will 

generate savings by restructuring this program. 

Eliminate Selective Mailing of Forms and 

Publications -$20,000,000 / 0 FTE 

The IRS will generate savings by eliminating 

the non-mandated notice inserts; the automatic 

mailing of Form 1040, U.S. Individual Tax 

Return, tax packages; and the automatic 

mailing of business tax products. 

Program Reinvestment 

Submission Processing Consolidation 

(Atlanta) +$2,792,000 / 0 FTE Increased use 

of e-File has led to consolidation of the 

individual return processing sites. A portion of 

the Increased e-File Savings will be reinvested 

to fund the one-time separation costs 

associated with the September 30, 2011 

closure of the Atlanta submission processing 

site. As the Atlanta consolidation approaches, 

the IRS will assist employees to find 

employment either in or outside the 

organization. 

Program Decrease 

Reduce Taxpayer Service Grant and Advocacy 

Programs -$9,000,000 / 0 FTE The FY 2010 

appropriation included an additional 

$3,500,000 to expand Taxpayer Advocate 

Service case processing activities; $500,000 to 

increase the LITC grants program; $1,000,000 

to increase the TCE program; and $4,000,000 

to increase the VITA grants program. This 

program decrease will realign the programs to 

the 2010 requested level to fund the Increase 

Telephone Level of Service initiative. 

Program Increases 

Improve IRS.gov +$25,000,000 / 0 FTE This 

initiative, part of a multi-year plan, will initiate 

the migration of IRS web content and 

applications from the current outdated portal 

infrastructures to a new consolidated IRS web 

environment. These funds will enable the IRS 

to complete the first phase of the migration of 

the taxpayer-facing content and applications 

and to begin the second phase of the migration 

and transition of approximately 35 percent of 

the public and partner-facing applications to 

the new environment. 

Increase Telephone Level of Service 

+$20,945,000 / 0 FTE Recent legislation has 

led to an unprecedented demand for telephone 

Department of the Treasury - Budget in Brief FY 2011 Page 71
services over the past few years. In addition, 

the additional complexity of – and time needed 

to resolve – many phone calls, resulted in a 

decline in the telephone level of service. This 

initiative will improve the telephone level of 

service from a projected 71 percent in 

FY 2010 to a target of 75 percent in FY 2011 

through a program increase of $11.9 million 

and a $9.0 million reallocation from TAS and 

the LITC, TCE and VITA grant programs. 

Without the $9.0 million reallocation, the 

FY 2011 level of service performance target 

would be 74 percent. 

Address Business and Individual International 

Compliance +$121,086,000 / +781 FTE This 

initiative supports the Presidential priority to 

address offshore tax evasion and builds on the 

IRS FY 2010 international enforcement 

initiative. It will allow the IRS to continue its 

multi-year investment in international tax 

compliance activities. It increases coverage of 

the most strategically important international 

issues, including large enterprises with 

international components operated by 

businesses and investors through multiple 

interrelated financial and tax entities and highwealth individuals and the complex business 

enterprises they control. 

This initiative will increase examinations of 

additional international issues pertaining to 

international structures involving tiered passthrough entities, corporations, and high-wealth 

individuals by a projected 4,864 cases. The 

increase in examinations will generate 

$812.2 million in additional enforcement 

revenue once the new hires reach full potential 

in FY 2013. 

Reduce the Reporting Compliance Tax Gap 

+$77,679,000 / +700 FTE This initiative will 

improve compliance by increasing 

examination of field and correspondence 

individual return audits by 61,100 annually; 

business return audits by 1,200; audits 

targeting employment, excise, and estate and 

gift taxes by 9,300; and Automated 

Underreporter (AUR) document matching 

individual return audits by 234,000. This 

request will generate $659.6 million in 

additional enforcement revenue once new 

hires reach full potential in FY 2013. 

Reduce the Nonfiling and Underpayment Tax 

Gap +$38,181,000 / +406 FTE This 

initiative will allow the IRS to broaden its 

collection coverage and address the tax gap 

more effectively by increasing staff resources 

for field collection and the Automated 

Collection System (ACS) program. The 

additional staff will produce an additional 

144,000 tax delinquency accounts (TDA) (i.e., 

balance due accounts where returns were filed, 

but the taxes have not been paid) and 

22,500 tax delinquency investigations (TDI) 

(i.e., investigations of taxpayers with unfiled 

returns who have not responded to a notice). 

This request will generate $474.4 million in 

additional enforcement revenue once new 

hires reach full potential in FY 2013. 

Support of Increased Enforcement Activities 

+$5,000,000 / +65 FTE Most tax 

enforcement actions result in downstream 

Accounts Management activities, including 

account adjustments, assisted phone calls, 

amended returns, and installment agreement 

preparation. This funding will allow the IRS 

to assist taxpayers to resolve issues early in the 

enforcement process, pay their taxes, and 

respond to and close out various enforcement 

actions. Improving the response to taxpayers 

who have received enforcement notices should 

increase revenue and reduce interest paid. 

Maintain Recovery Act Staffing +$5,500,000 / 

+31 FTE Among other responsibilities, the 

IRS is mandated by the Recovery Act to 

administer the new bond provisions. The IRS 

is required to issue a direct payment to the 

bond issuer. The unique nature of this new 

role requires continuous compliance reviews 

Department of the Treasury - Budget in Brief FY 2011 Page 72
Return on Investment for Enforcement Initiatives 

Dollars in Millions 

First Year (FY 2011) Full Performance (FY 2013) 

FY 2011 Enforcement Investment Cost Revenue ROI Cost Revenue ROI 

All Enforcement Initiatives $247.4 $719.8 2.9 $209.6 $1,946.2 9.3 

Direct Revenue Producing Initiatives $236.9 $719.8 3.0 $200.6 $1,946.2 9.7 

Address Business and Individual International Compliance 121.1 300.8 2.5 101.3 812.2 8.0 

Reduce the Reporting Compliance Tax Gap 77.7 211.7 2.7 65.8 659.6 10.0 

Reduce the Nonfiling and Underpayment Tax Gap 38.1 207.3 5.4 33.5 474.4 14.2 

Other Enforcement Initiatives $10.5 $0.0 0.0 $9.0 $0.0 0.0 

and verification throughout the administrative Recovery Act to administer ongoing Recovery 

life of the bonds. This initiative will extend Act bond provisions. 

IRS staffing resources received in the 

Business System Modernization (BSM) 

+$167,585,000 / +156 FTE The BSM 

increase is a top priority for the IRS and will 

allow the completion of the new taxpayer 

account database for the 2012 filing season. 

The new taxpayer account database will result 

in faster refunds for taxpayers, improve 

service accuracy and timeliness, and enhance 

data security. Completion of the taxpayer 

account database is a prerequisite for other 

major initiatives such as significant expansion 

of online paperless services and nextgeneration enforcement technologies. The 

ability of the IRS to support increasingly 

complex taxpayer service and compliance 

initiatives will be severely limited until it is 

completed. 

Explanation of Budget Activities 

Taxpayer Services 

The FY 2011 President’s Budget request is 

$2,321,975,000 in direct appropriations, an 

estimated $34,159,000 from reimbursable 

programs, and an estimated $127,000,000 

from user fees, for a total operating level of 

$2,483,134,000. The direct appropriations 

level is an increase of 1.9 percent from the 

FY 2010 enacted level. This appropriation 

funds the following budget activities. 

Pre-Filing Taxpayer Assistance and Education 

($693,753,000 from direct appropriations and 

an estimated $1,459,000 from reimbursable 

programs) This budget activity funds services 

to assist with tax return preparation, including 

tax law interpretation, publication, production, 

and advocate services. In addition, funding for 

these programs continues to emphasize 

taxpayer education, outreach, increased 

volunteer support time and locations, and 

enhancing pre-filing taxpayer support through 

electronic media. 

Filing and Account Services ($1,628,222,000 

from direct appropriations, an estimated 

$32,700,000 from reimbursable programs, and 

an estimated $127,000,000 from user fees) 

This budget activity funds programs that 

provide filing and account services to 

taxpayers, process paper and electronicallysubmitted tax returns, issue refunds, and 

maintain taxpayer accounts. The IRS 

continues to make progress in decreasing 

paper returns and increasing the use of 

electronic filing and payment methods. 

Department of the Treasury - Budget in Brief FY 2011 Page 73
Enforcement 

The FY 2011 President’s Budget request is 

$5,797,400,000 in direct appropriations and 

an estimated $61,506,000 from reimbursable 

programs for a total operating level of 

$5,858,906,000. The direct appropriations 

level is an increase of 5.3 percent from the 

FY 2010 enacted level and includes 

additional tax enforcement activities funded 

through a program integrity allocation 

adjustment. This appropriation funds the 

following budget activities. 

Investigations ($651,966,000 from direct 

appropriations and an estimated 

$50,567,000 from reimbursable programs) 

This budget activity funds the criminal 

investigations programs that uncover 

criminal violations of the internal revenue 

tax laws and other financial crimes, enforce 

criminal statutes relating to these violations, 

and recommend prosecution as warranted. 

These programs identify and document the 

movement of both legal and illegal sources 

of income to identify and document cases of 

suspected intent to defraud. It provides 

resources for international investigations 

involving U.S. citizens residing abroad, nonresident aliens and expatriates and includes 

investigation and prosecution of tax and 

money-laundering violations associated with 

narcotics organizations. 

Exam and Collections ($4,974,618,000 from 

direct appropriations and an estimated 

$10,245,000 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. It also includes 

programs such as specialty program 

examinations (employment tax, excise tax 

and estate and gift exams), international 

collections and international examinations. 

The budget activity also supports appeals 

and litigation activities associated with exam 

and collection. 

Regulatory ($170,816,000 from direct 

appropriations and an estimated $694,000 

from reimbursable programs) This budget 

activity funds the development and printing 

of published IRS guidance materials; 

interpretation of tax laws; advice on general 

legal servicing, ruling and agreements; 

enforcement of regulatory rules, laws, and 

approved business practices; and supporting 

taxpayers in the areas of pre-filing 

agreements, determination letters, and 

advance pricing agreements. The Office of 

Professional Responsibility is funded within 

this budget activity and is responsible for 

identifying, communicating, and enforcing 

the Treasury Circular 230 standards of 

competence, integrity, and conduct of 

professionals representing taxpayers before 

the IRS. 

Operations Support 

The FY 2011 President’s Budget request is 

$4,108,000,000 in direct appropriations, an 

estimated $48,927,000 from reimbursable 

programs, and an estimated $67,100,000 

from user fees, for a total operating level of 

$4,224,027,000. The direct appropriation 

level is an increase of 0.6 percent from the 

FY 2010 enacted level. This appropriation 

funds the following budget activities. 

Infrastructure ($889,929,000 from direct 

appropriations, an estimated $398,000 from 

reimbursable programs, and an estimated 

$16,100,000 from user fees) This budget 

activity funds administrative services related 

to space and housing, rent and space 

alterations, building services, maintenance, 

guard services, and non-IT equipment. 

Department of the Treasury - Budget in Brief FY 2011 Page 74
Shared Services and Support ($1,337,776,000 

from direct appropriations and an estimated 

$33,110,000 from reimbursable programs) 

This budget activity funds policy management, 

IRS-wide support for research, strategic 

planning, communications and liaison, 

finance, human resources, and equal 

employment opportunity and diversity services 

and programs. It also funds printing and 

postage, business systems planning, security, 

corporate training, legal services, procurement, 

and specific employee benefits programs. 

Information Services ($1,880,295,000 from 

direct appropriations, an estimated 

$15,419,000 from reimbursable programs, and 

an estimated $51,000,000 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 tax administration programs. The 

IRS business programs rely on these systems 

to 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 

telecommunications services for all business 

activities, including the public’s toll-free 

access to tax information. 

Business Systems Modernization (BSM) 

The FY 2011 President’s Budget request is 

$386,908,000 in direct appropriations. This is 

an increase of 46.6 percent from the FY 2010 

enacted level. This appropriation funds the 

following budget activity. 

BSM ($386,908,000 from direct 

appropriations) This budget activity funds the 

planning and capital asset acquisition of 

information technology (IT) to continue the 

modernization of IT systems and to complete 

the new taxpayer account database. The 

completion of the core taxpayer account 

database is the cornerstone of modernization 

and is a prerequisite to the development of the 

next generation of IRS service and 

enforcement initiatives. The integration 

strategy includes a particular focus on 

enhanced information technology security 

practices and robust accounting and financial 

management controls. This activity also funds 

the ongoing development of the Modernized 

e-File platform for filing tax returns 

electronically. It also funds BSM labor and 

related contract costs. 

Health Insurance Tax Credit Administration 

(HITCA) 

The FY 2011 President’s Budget request is 

$18,987,000 in direct appropriations. This is 

an increase of 22.4 percent from the FY 2010 

enacted level. This appropriation funds the 

following budget activity. 

HITCA ($18,987,000 from direct 

appropriations) This budget activity funds 

costs to administer a refundable tax credit for 

health insurance to qualified individuals, 

which was enacted as part of the Trade 

Adjustment Assistance Reform Act of 2002. 

Legislative Proposals 

The FY 2011 President’s Budget includes a 

number of legislative proposals intended to 

improve tax compliance with minimum 

taxpayer burden. These proposals will 

specifically target the tax gap and generate 

nearly $26 billion over the next ten years. 

Among other proposals, the Administration 

proposes to expand information reporting, 

improve compliance by businesses, strengthen 

tax administration, and expand penalties. 

Expand information reporting – Compliance 

with the tax laws is highest when payments are 

subject to information reporting to the IRS. 

Specific information reporting proposals 

would: 

Department of the Treasury - Budget in Brief FY 2011 Page 75
•	 Require information reporting for private 

separate accounts of life insurance 

companies; 

•	 Require information reporting on 

payments for services to corporations; 

•	 Require a certified Tin (Taxpayer 

Identification Number) from contractors; 

•	 Require increased information reporting 

on certain government payments; 

•	 Increase information return penalties; 

and 

•	 Require information reporting on 

expense payments relating to rental 

property. 

Improve compliance by businesses – 

Improving compliance by businesses of all 

sizes is important. Specific proposals to 

improve compliance by businesses would: 

•	 Provide Treasury regulatory authority to 

require that information returns be filed 

electronically; 

•	 Require corporations and partnerships 

with assets of $10 million or more that 

are required to file Schedule M-3 to file 

their tax returns electronically; 

•	 Provide Treasury regulatory authority to 

reduce the current threshold, filing 250 

or more returns during a calendar year, 

to require electronic filing of certain 

other large taxpayers not required to file 

Schedule M-3 (such as exempt 

organizations); 

•	 Implement standards clarifying when 

employee leasing companies can be held 

liable for their clients’ federal 

employment taxes; and 

•	 Increase certainty about the rules 

pertaining to classification of employees 

as independent contractors. 

Strengthen tax administration – The IRS has 

taken a number of steps under existing law 

to improve compliance. These efforts would 

be enhanced by specific tax administration 

proposals that would: 

•	 Expand IRS access to information in the 

National Directory of New Hires for tax 

administration purposes; 

•	 Make repeated willful failure to file a tax 

return a felony; 

•	 Facilitate tax compliance with local 

jurisdictions; 

•	 Extend statutes of limitations where state 

tax adjustments affect federal tax 

liability; 

•	 Improve the investigative disclosure 

statute; 

•	 Repeal the requirement of a partial 

payment with an application for an offerin-compromise; 

•	 Allow assessment of criminal restitution 

as tax; and 

•	 Codify “economic substance” doctrine. 

Expand penalties – Penalties play an 

important role in discouraging intentional 

noncompliance. A specific proposal to 

expand penalties would: 

•	 Impose a penalty on failure to comply 

with electronic filing requirements; and 

•	 Clarify that the bad check penalty 

applies to electronic checks and other 

forms of payment. 

Improve Tax Administration and Other 

Miscellaneous Proposals 

The Administration has put forward 

additional proposals relating to IRS 

administrative reforms. These proposals 

would: 

•	 Improve the foreign trust reporting 

penalty; 

•	 Apply the Federal Payment Levy 

Program to contractors before providing 

Collection Due Process; and 

•	 Clarify that a vendor levy on “goods and 

services” would not exclude “property”. 

Department of the Treasury - Budget in Brief FY 2011 Page 76
IRS Performance by Programs 

Customer Contacts Resolved per Staff Year - E 12,634 9,398 

Taxpayer Service Customer Service Representative (CSR) Level of Service Oe (L) 52.8% 71.0% 

7,648 12,918 10,386 10,181 

82.1% 70.0% 70.0% 75.0% 

57.1% 65.9% 64.0% 81.0% 

137 138 138 132 132 

92.9% 95.3% 94.3% 92.0% 92.5% 94.0% 

2.5% 2.6% 2.6% 2.5% 3.0% 3.4% 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Programs Performance Measure Actual Actual Actual Target Target Target 

Percent of Individual Returns Processed Electronically (%) - Oe (L) 57.6% 70.2% 

Examination Efficiency - Individual (1040) - E (L) 128 

Enforcement Automated Collection System Accuracy (%) - Oe 

AUR Coverage E (L) 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, L - Long-Term Goal 

Description of Performance 

In FY 2009, IRS continued to improve its 

service and enforcement results. The 

following is a summary of significant 

program performance improvements. 

Enforcement 

Enforcement of the tax laws is an integral 

component of the IRS effort to enhance 

voluntary compliance. IRS enforcement 

activities, such as examination and 

collection, target elements of the tax gap and 

remain a high priority. In FY 2009, the IRS 

expanded its enforcement presence in the 

international field, continued to pursue highwealth, noncompliant taxpayers, and 

initiated action to better leverage the tax 

return preparer community. 

Total enforcement revenue was $48.9 billion 

in FY 2009. The IRS showed steady 

progress in increasing its audit coverage: 

•	 Total individual audits increased 

2.6 percent; 

•	 Automated Underreporter (AUR) 

contact closures increased 2.6 percent; 

•	 High-wealth audits increased 

11.2 percent; and 

•	 Large corporate audits increased 

2.6 percent compared to 2008, a 

significant achievement given the size 

40 

50 

60 

34.1 37.6 43.1 47.3 48.7 

59.2 56.4 

48.9 

30 

20 

10 

0 

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 

(more than $10 million) and complexity 

of these corporate entities. 

IRS Enforcement Revenue ($ Billions) 

In FY 2009, the IRS placed extraordinary 

focus on detecting and bringing to justice 

those who hide assets overseas to avoid 

paying tax. As part of an overall IRS 

strategy to improve offshore compliance, the 

IRS implemented initiatives to identify U.S. 

taxpayers who engaged in offshore tax 

evasion schemes. In August 2009, the IRS 

reached agreement with Swiss authorities 

that will result in the IRS receiving an 

unprecedented amount of information on 

taxpayers who evaded their tax obligations 

by hiding money offshore at UBS. This 

represents a major step forward for the IRS 

in its efforts to combat offshore tax evasion 

and will send a clear message to people 

hiding income and assets offshore that the 

IRS will vigorously pursue tax cheats, no 

matter how remote or secret the location. 

Department of the Treasury - Budget in Brief FY 2011 Page 77
At the same time, the IRS established an 

offshore voluntary disclosures/penalty 

framework for taxpayers to disclose their 

offshore activities. The framework provided 

taxpayers the opportunity to: 

•	 Calculate the total cost of resolving all 

offshore tax issues; 

•	 Become compliant with U.S. tax laws; 

•	 Make voluntary disclosures that will be 

used to further the IRS understanding of 

how foreign accounts and foreign entities 

are promoted to U.S. taxpayers as ways to 

avoid or evade tax; and 

•	 Provide data to be used in developing 

additional IRS strategies to inhibit 

promoters and facilitators from soliciting 

new clients. 

As a result of the offshore voluntary disclosure 

program that ran through October 15, 2009, 

more than 14,700 taxpayers with offshore 

accounts voluntarily came forward to disclose 

information bringing them back into the U.S. 

tax system. A key aspect of future 

international offshore work will be mining the 

information from people who came forward to 

identify financial institutions, advisors, and 

others who promote or otherwise helped U.S. 

taxpayers hide assets and income offshore. 

In FY 2009, the IRS continued to investigate 

tax, money laundering, and other financial 

crimes that adversely affect tax administration. 

Performance levels for the criminal 

investigation program remained high during 

FY 2009, with 3,848 completed criminal 

investigations and 2,105 convictions. 

Maintaining a strong enforcement presence in 

the tax-exempt sector is important to ensure 

that charitable organizations are not used for 

non-charitable or illegal purposes. During 

FY 2009, the IRS increased tax-exempt and 

government entities compliance contacts by 

10 percent over FY 2008 levels. 

Taxpayer Service 

In FY 2009, the IRS continued to improve its 

services by providing year-round assistance to 

millions of taxpayers through multiple 

channels. Demand for telephone services 

remained high as taxpayers called to obtain 

information regarding economic stimulus 

payments, new Recovery Act credits, and 

prior year adjusted gross income (AGI) 

numbers needed for electronic filing. The 

significant increases in call demand stressed 

existing resources, resulting in a lower 

customer level of service. Despite the high 

call volume, the IRS continued to focus on the 

accuracy of information provided to taxpayers 

as both Toll-Free Tax Law and Toll-Free 

Accounts Accuracy performance surpassed the 

FY 2008 record-breaking numbers. The 

following chart shows the call volume from 

FY 2005 through FY 2009. 

Call Volume (in Millions) 

187 203 212 

389 

296 

0 

50 

100 

150 

200 

250 

300 

350 

400 

450 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 

The Budget provides a significant investment 

to increase level of service by adding 

resources to meet the ever increasing demand 

and continuing to make efficiency 

improvements such as automated self-service 

applications that allow taxpayers to obtain 

information on less complex issues such 

as refund inquiries. These improvements free 

up staff to deal with the more complex tax law 

issues stemming from the passage of the 

Recovery Act and the Worker, 

Homeownership, and Business Assistance Act 

of 2009. 

In FY 2009, there were more than 296 million 

visits to IRS.gov. Taxpayers visited the 

website to obtain information on the Recovery 

Department of the Treasury - Budget in Brief FY 2011 Page 78
Rebate Credit, to determine if they qualify for 

the Earned Income Tax Credit (EITC), to track 

the status of their refunds using the Where’s 

My Refund? application, and to get the most 

up-to-date information on Recovery Act 

credits. More than 54 million taxpayers used 

Where’s My Refund?, a 39 percent increase 

over the same period in FY 2008. During 

FY 2009, the IRS received more than 

296 million calls and helped more than 

6.2 million taxpayers at 401 Taxpayer 

Assistance Centers. The Budget will continue 

supporting these self-service options as well 

as support the development of additional 

enhancements such as calculators, on-line 

tools and information on new legislation in an 

easy, accessible format. In addition, the 

Budget supports a multi-year effort to improve 

the IRS.gov website to meet taxpayer needs 

and the growing demand for more electronic 

services. The new web environment will 

improve customer satisfaction by providing an 

enhanced look and feel, making navigation on 

the site easier, and improve the user’s ability 

to locate desired information and access 

applications. 

Despite these challenges, the IRS delivered 

another successful filing season. During 

FY 2009, the IRS received 144.4 million 

individual returns, 11.2 million fewer than 

2008, when millions of taxpayers filed solely 

to receive an Economic Stimulus Payment. 

The number of refunds issued increased 

3.5 percent to 111.4 million. The percentage 

of individual returns filed electronically 

reached 66 percent, with more than 95 million 

individual tax returns filed electronically, 

compared to 89.6 million in 2008, an increase 

of 6 percent. During 2009, home computer 

filing increased to more than 32.2 million, an 

increase of 19 percent. 

The IRS provided extensive media coverage 

and expanded electronic outreach activities to 

make taxpayers aware of new credits, 

deductions, and exclusions for which they 

qualified. A second Super Saturday event was 

held in FY 2009, and the IRS provided more 

than 11,000 taxpayers with tax assistance and 

return preparation. The event was the largest 

one-day outreach service event in IRS history. 

The IRS also provided assistance to millions 

of taxpayers by expanding partnerships with 

nonprofit and community organizations, 

opening more than 12,100 free tax preparation 

sites nationwide. 

Business System Modernization 

In FY 2009, IRS modernization efforts focused 

on providing more sophisticated tools to 

taxpayers. The Customer Account Data 

Engine (CADE), Modernized e-File (MeF), 

and Account Management Services (AMS) 

modernization projects delivered the changes 

necessary for a successful filing season, 

supported implementation of the Recovery Act 

provisions, and provided audit trails 

addressing security vulnerabilities. These core 

technology systems, used to manage taxpayer 

data and facilitate service and enforcement 

work, met schedule estimates for most releases 

delivering significant business value. 

In FY 2009, the IRS revised its CADE strategy 

to focus on the completion of the new taxpayer 

account database. The Budget will help the 

IRS implement the new taxpayer account 

database for the 2012 filing season. The new 

database will allow the migration of 

140 million individual taxpayers to a 

modernized, relational database that will 

support daily processing and result in faster 

refunds for all individual refund filers. Daily 

updating of individual taxpayer accounts by 

2012 also will improve taxpayer service and 

accuracy and reduce interest paid on late 

refunds. The daily processing environment 

also will have improved data security and 

allow the development of new tools to combat 

fraud and improve enforcement activities. 

Completion of the taxpayer account database 

is the prerequisite for other major initiatives, 

including significant expansion of online 

services and transactions and the next 

generation of enforcement technologies. 

Department of the Treasury - Budget in Brief FY 2011 Page 79
Department of the Treasury - Budget in Brief FY 2011 Page 80
Emergency Economic Stabilization Act Programs 

Program Summary by Budget Activity 

(Dollars in Thousands) 

Purchase Cap1 BA Outlays2 

FY 2009 FY 2010 Total Cohort 2009 and 

2010 

Capital Purchase Program $204,617,573 $3,382,427 $208,000,000 - $3,680,719 

Public-Private Investment Program $6,666,667 $23,340,000 $30,006,667 + $314,542 

AIG Investment Program $69,835,000 $0 $69,835,000 + $48,147,456 

Consumer and Business Lending Initiative $20,000,000 $40,000,000 $60,000,000 + $2,194,226 

Home Affordable Modification Program3 $27,065,760 $21,690,240 $48,756,000 + $48,756,000 

Targeted Investment Program $40,000,000 $0 $40,000,000 - $4,083,330 

Automotive Industry Financing Program $81,054,933 $3,790,000 $84,844,933 + $28,208,444 

Asset Guarantee Program4 $5,000,000 $0 $5,000,000 - $3,014,971 

Total $454,239,933 $92,202,667 $546,442,599 + $116,841,648 

1

Amount applied to the Section 115 Purchase Cap (i.e., the portion of the original $700 billion cap expected to be used). 2 Estimated program costs (+) or savings (-) over the life of the program, including interest on reestimates and excluding 

administrative costs.
 3

 Includes $1.2 B reduction in TARP purchase authority from the Helping Families Save Their Homes Act of 2009. 4 Treasury guaranteed up to $5 billion of potential losses incurred on a $301 billion portfolio of loans. 

Explanation of Budget Estimate 

The Emergency Economic Stabilization Act of 

2008 (EESA) established the Office of 

Financial Stability (OFS) within the Office of 

Domestic Finance of the Treasury Department 

to implement the Troubled Assets Relief 

Program (TARP). The OFS budget includes 

funding to carry out the authorities vested to 

the Secretary of 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.” The OFS 

carries out the mission and objectives of the 

EESA: ensuring the overall stability and 

liquidity of the financial system; preventing 

avoidable foreclosures and helping preserve 

homeownership; protecting taxpayer interests, 

and promoting transparency. As a result of 

improved financial conditions and careful 

stewardship of the program, the ultimate cost 

to the taxpayer of TARP investments is likely 

to be significantly lower than expected. In 

the FY 2010 budget total impact of the 

program on the deficit was expected to be 

$306 billion, but it is now expected to total 

only $117 billion (see Program Summary by 

Budget Activity table above). The authority 

for OFS administrative budget funds is 

provided in Section 118 of EESA. In FY 

2011 OFS plans to obligate $298 million and 

use 271 FTE, a decrease of $58 million and 

an increase of 11 FTE from the FY 2010 

estimates. 

Purpose of Program 

Since the passage of EESA in October 2008, 

the OFS has implemented a number of 

programs aimed to stabilize the financial 

system and restore the flow of credit to 

consumers and businesses. Today there is a 

broad agreement that because of TARP and 

other governmental actions, the United States 

averted a potentially catastrophic failure of 

Department of the Treasury - Budget in Brief FY 2011 Page 81
the financial system, at a cost considerably 

less than what was originally projected. 

EESA programs continue to stabilize and 

rehabilitate still fragile markets and 

institutions, while repayments of the 

government’s investments over the past year 

have already begun. 

EESA programs include: 

Capital Purchase Program 

Pursuant to EESA, the Capital Purchase 

Program (CPP) - OFS’ largest and most 

significant program under EESA - was 

launched to bolster the capital position of 

viable institutions and, in doing so, to build 

confidence in these institutions and the 

financial system as a whole. With the 

additional capital, CPP participants were 

better equipped to undertake new lending, 

even while absorbing write downs and chargeoffs on loans that were not performing. 

OFS initially committed over a third of the 

total TARP funding, $250 billion, to the CPP, 

which it eventually lowered to $208 billion. 

Of the initial $250 billion commitment, OFS 

invested $125 billion in eight of the country’s 

largest financial institutions. The remaining 

$125 billion was made available to qualifying 

financial institutions (QFIs) of all sizes and 

types across the country, including banks, 

savings associations, bank holding companies 

and savings and loan holding companies. 

QFIs interested in participating in the program 

had to submit an application to their primary 

federal banking regulator. The minimum 

subscription amount available to a 

participating institution was 1 percent of riskweighted assets. The maximum subscription 

amount was the lesser of $25 billion or 3 

percent of risk-weighted assets. 

As of December 31, 2009, the funding 

deadline for CPP ended. OFS provided a total 

of $205 billion in capital to707 institutions in 

48 states, including more than 300 small and 

community banks, helping to enable them to 

absorb losses from bad assets while 

continuing to lend to consumers and 

businesses. 

The Budget reflects that financial institutions 

redeemed $70.7 billion in principal 

repayments and $9.7 billion in dividends, 

interest, warrants and fees as of September 

30, 2009. Furthermore, the Budget reflects 

that financial institutions will redeem an 

additional $59.7 billion in principal 

repayments and receive over $20.1 billion in 

dividends, interest, warrants and fees in 2010. 

American International Group, Inc. (AIG) 

Investment Program 

Since September 2008, the Federal Reserve 

and OFS have taken a series of actions 

related to AIG in order to prevent AIG’s 

disorderly failure and mitigate systemic risks. 

These actions addressed the liquidity and 

capital needs of AIG, helping to stabilize the 

company. OFS provided this assistance by 

purchasing preferred shares in AIG and also 

received warrants to purchase common 

shares in the institution. The assistance 

provided to AIG was deemed “exceptional 

assistance” which means that the recipient is 

subject to greater restrictions under the rules 

relating to executive compensation. 

In November 2008, this assistance was 

restructured so that AIG had more equity and 

less debt. OFS purchased $40 billion in 

cumulative preferred stock from AIG under 

the TARP, the proceeds of which were used 

to repay the Federal Reserve loan in part. In 

April 2009, OFS exchanged the $40 billion in 

cumulative preferred stock for $41.6 billion 

in non-cumulative preferred stock and 

created an equity capital facility, under which 

AIG may draw up to $29.8 billion as needed 

in exchange for issuing additional preferred 

Department of the Treasury - Budget in Brief FY 2011 Page 82
stock to OFS. As of September 30, 2009, AIG 

had drawn approximately $3.2 billion from the 

facility. 

Targeted Investment Program 

OFS established the Targeted Investment 

Program (TIP) under the TARP in December 

2008. The TIP gave the OFS the necessary 

flexibility to provide additional or new 

funding to financial institutions that were 

critical to the functioning of the financial 

system. Through TIP, OFS sought to prevent a 

loss of confidence in critical financial 

institutions, which could result in significant 

financial market disruptions, threaten the 

financial strength of similarly situated 

financial institutions, impair broader financial 

markets, and undermine the overall economy. 

OFS invested $20 billion in each of Bank of 

America (BofA) and Citigroup under the TIP. 

These investments provide for annual 

dividends of 8 percent; and impose greater 

reporting requirements and harsher restrictions 

on the companies than under the CPP terms, 

including restricting dividends to $0.01 per 

share per quarter, restrictions on corporate 

expenses, and other measures. The Budget 

reflects that both Citigroup and Bank of 

America fully redeemed the Government's 

TIP investments in 2010. Furthermore, the 

Budget reflects that Citigroup and Bank of 

America paid $1.8 billion in dividends in 2009 

and an estimated $791 million in additional 

dividend payments in 2010. Assistance under 

the TIP is also considered “exceptional 

assistance”, which means that the recipient is 

also subject to greater restrictions under the 

executive compensation rules. 

Automotive Industry Financing Program 

OFS established the Automotive Industry 

Financing Program (AIFP) on December 19, 

2008, to help prevent a significant disruption 

to the American automotive industry, which 

would have posed a systemic risk to financial 

market stability and had a negative effect on 

the economy. OFS announced a plan to make 

emergency loans available from the TARP 

under the AIFP to General Motors 

Corporation (GM) and Chrysler LLC 

(Chrysler) to provide a path for these 

companies to go potentially through orderly 

restructurings and achieve viability. 

OFS initially provided loans of $13.4 billion 

to GM and $4 billion to Chrysler under the 

AIFP to give the companies time to negotiate 

with creditors and other stakeholders in order 

to prevent disorderly bankruptcies. Under 

the terms of the loans, each company was 

required to prepare a restructuring plan that 

included specific actions aimed at assuring: 

(i) the repayment of the loan extended by 

TARP; (ii) the ability of the company to 

comply with applicable federal fuel 

efficiency and emissions requirements and 

commence the domestic manufacturing of 

advanced technology vehicles in accordance 

with federal law; (iii) achievement of a 

positive net present value; (iv) rationalization 

of costs, capitalization, and capacity with 

respect to the manufacturing workforce, 

suppliers and dealerships of the company; 

and (v) a product mix and cost structure that 

is competitive in the U.S. marketplace. 

To date, the OFS has provided approximately 

$85 billion in loans and equity investments to 

GM, Chrysler, and their respective financing 

entities.

 Asset Guarantee Program 

Pursuant to section 102 of EESA, OFS 

established the Asset Guarantee Program 

(AGP) with the same objective as the TIP of 

preserving financial market stability. The 

AGP, like the TIP, is a targeted program 

aimed at maintaining the stability of 

systemically important financial institutions 

Department of the Treasury - Budget in Brief FY 2011 Page 83
and, thereby, reducing the potential for 

problems at such an institution to “spillover” 

to the broader financial system and economy. 

The AGP has been applied with extreme 

discretion and OFS does not anticipate wider 

use of this program. To date, OFS has used 

this program to assist Citigroup and began 

negotiations with Bank of America (BofA) 

under the AGP which BofA subsequently 

terminated. 

On December 22, 2009, Treasury, the Federal 

Reserve, the Federal Deposit Insurance 

Corporation and Citigroup terminated the 

agreement under which the U.S. government 

agreed to share losses on a pool of Citigroup 

assets. The U.S. government parties did not 

pay any losses under the agreement, and will 

keep $5.2 billion of $7.0 billion in trust 

preferred securities as well as warrants for 

common shares that were issued by Citigroup 

as consideration for such guarantee. With this 

termination, the AGP is being terminated at a 

profit to the taxpayer. 

The Consumer and Business Lending 

Initiative (CBLI) 

OFS designed two initiatives to restore 

consumer and business lending, the Term 

Asset-Backed Securities Loan Facility 

(TALF) and the Unlocking Credit for Small 

Business Initiative. 

TALF 

The TALF's objective was to stimulate 

investor demand for certain types of eligible 

Asset Backed Securities (ABS), specifically 

those backed by loans to consumers and small 

businesses, and ultimately, bring down the 

cost and increase the availability of new credit 

to consumers and businesses. Under the 

TALF, the Federal Reserve extends up to 

$200 billion in three- and five-year nonrecourse loans to investors that agree to 

purchase eligible consumer or small business 

ABS. OFS provides up to $20 billion of 

TARP monies in credit protection to the 

Federal Reserve for losses arising under 

TALF loans. 

The TALF was initially designed for newly 

or recently originated AAA-rated ABS 

backed by student loans, auto loans, credit 

card loans, and loans guaranteed by the SBA. 

On March 19, 2009, OFS and the Federal 

Reserve expanded this to include newly or 

recently issued AAA-rated ABS backed by 

four additional types of consumer and 

business loans – mortgage servicing 

advances, loans or leases relating to business 

equipment, leases of vehicle fleets, and floor 

plan loans. 

The Federal Reserve had originally 

authorized using the TALF to make loans 

through December 31, 2009, however, this 

has been extended through March 31, 2010. 

Unlocking Credit for Small Businesses 

Program 

To help restore the confidence needed for 

financial institutions to increase lending to 

small businesses, Treasury announced a 

program to unlock credit for small businesses 

on March 16, 2009. Under the program, 

Treasury announced that it would make up to 

$15 billion in TARP funds available to 

purchase securities backed by the Small 

Business Administration (SBA)-guaranteed 

portions of loans made under the SBA’s 7(a) 

loan program. The SBA’s 7(a) program is the 

SBA’s most basic and widely used loan 

program. 

As of September 30, 2009, no funds had been 

disbursed under the program; however, 

activity on the secondary markets on which 

Department of the Treasury - Budget in Brief FY 2011 Page 84
SBA-backed securities trade improved 

significantly in the wake of the program’s 

announcement, contributing to a significant 

increase in SBA loan volumes. In addition, as 

part of its commitment to take additional steps 

to improve the availability of credit to small 

businesses, Treasury is working with the 

Small Business Administration to develop and 

implement additional TARP efforts that will 

support small banks in increasing lending to 

small businesses in their communities. 

Home Affordable Modification Program 

To mitigate foreclosures and help ensure 

homeownership preservation, Treasury 

announced a comprehensive $75 billion 

program, the Home Affordable Modification 

Program (HAMP), in February 2009. OFS 

will provide up to $50 billion in funding 

through the TARP, while Fannie Mae and 

Freddie Mac agreed to provide up to $25 

billion of additional funding. HAMP focuses 

on creating sustainably affordable mortgage 

payments for responsible home owners who 

are making a good faith effort to make their 

mortgage payments, while mitigating the 

spillover effects of preventable foreclosures 

on neighborhoods, communities, the financial 

system and the economy. 

HAMP is built around three core concepts. 

First, the program focuses on affordability. 

Second, the HAMP's pay-for-success structure 

aligns the interests of servicers, investors and 

borrowers in ways that encourage loan 

modifications that will be both affordable for 

borrowers over the long term and costeffective for investors and taxpayers. Third, 

the HAMP establishes detailed guidelines for 

the industry to use in making loan 

modifications with the goal of encouraging the 

mortgage industry to adopt a sustainably 

affordable standard, both within and outside of 

the HAMP. 

Public-Private Investment Fund 

Treasury, in conjunction with the Federal 

Reserve and the FDIC, announced the PublicPrivate Investment Program (PPIP) on March 

23, 2009, as a part of the Financial Stability 

Plan to help restart the market and provide 

liquidity for legacy assets, enabling financial 

institutions to make new loans available to 

households and businesses. The PPIP is 

designed to improve the condition of 

financial institutions by facilitating the 

removal of legacy assets from their balance 

sheets. Legacy assets include both real estate 

loans held on banks’ balance sheets (legacy 

loans) as well as securities backed by 

residential and commercial real estate loans 

(legacy securities). 

OFS initially announced that it would 

provide up to $100 billion for the PPIP. 

Because of improvements in the market, this 

amount was reduced to $30 billion. Under 

the PPIP, OFS provides equity and debt 

financing to newly-formed public-private 

investment funds (PPIFs) established by 

private fund managers with private investors 

for the purpose of purchasing legacy 

securities. These securities are commercial 

mortgage-backed securities and non-agency 

residential mortgage-backed securities. To 

qualify for purchase by a Legacy Securities 

PPIP (S-PPIP), these securities must have 

been issued prior to 2009 and have originally 

been rated AAA – or an equivalent rating by 

two or more nationally recognized statistical 

rating organizations – without ratings 

enhancement and must be secured directly by 

the actual mortgage loans, leases, or other 

assets. 

As of November 30, 2009, nine PPIFs have 

signed agreements with OFS. Following 

signature of these agreements, each fund 

manager has up to six months to raise 

additional private capital to receive the full 

Department of the Treasury - Budget in Brief FY 2011 Page 85
allocation of the $3.3 billion in matching 

equity and debt capital from OFS. Assuming 

that each of the nine fund managers raises 

enough private capital to receive the full 

allocation from OFS, the total purchasing 

power of the PPIFs will be $40 billion, 

including $10 billion in private capital and the 

$30 billion OFS commitment. As of 

September 30, 2009, no fund managers had 

made any investments and OFS had not 

disbursed any funds. 

Program Evaluation 

During FY 2011, OFS is proposing to fund a 

project to enhance the HAMP’s existing 

standardized set of procedures that servicers 

must follow to modify loans in order to 

increase the conversion of offered to modified 

loans. 

This would be completed by facilitating and 

evaluating pilot programs, which some 

servicers have already implemented on their 

own book, that are structured differently from 

the standard loan modifications under 

HAMP. By assisting these servicers to 

develop and design statistically sound pilot 

programs, these successful programs can then 

be launched on a national scale. 

Legislative Proposals 

OFS does not have any legislative proposals. 

Performance Measures 

OFS has established the following 

Performance Measures: 

1) Ensure the Overall Stability and Liquidity 

of the Financial System, 

2) Prevent Avoidable Foreclosures and 

Preserve Homeownership, 

3) Protect Taxpayer Interests, and 

4) Promote Transparency 

Department of the Treasury - Budget in Brief FY 2011 Page 86
Housing Government 

Sponsored Enterprise 

Programs Activity 

FY 2009 

Program Summary by Budget Activity 

(Dollars in Thousands) 

Actual 

Preferred Stock Purchase Obligations Agreements 

Securities GSE MBS Purchase Program Purchased 

Loan GSE Credit Facility Levels 

New Issue Bond Purchase Securities 

Program Purchased 

Temporary Credit and Liquidity Securities 

Program Purchased 

$95,600,000 $69,000,000 $23,000,000 ($46,000,000) -37.68% 

$190,574,064 $29,877,874 $0 ($29,877,874) -100.00% 

$0 $0 $0 $0 0% 

$0 $15,308,598 $0 ($15,308,598) -100.00% 

$0 $8,209,840 $0 ($8,209,840) -100.00% 

FY 2010 

Estimated 

FY 2011 

Estimated $ Change % Change 

Explanation of Request 

The Housing Government Sponsored 

Enterprise (GSE) Programs consist of five 

different programs with respect to, Fannie 

Mae and Freddie Mac, and the Federal Home 

Loan Banks (FHLBs) outlined below. These 

programs were created to provide stability to 

financial markets and promote mortgage 

affordability while at the same time protecting 

the taxpayer. These programs include 

Preferred Stock Purchase Agreements 

(PSPAs) with Fannie Mae and Freddie Mac, a 

Mortgage-Backed Securities (MBS) Purchase 

Program limited to such securities issued by 

Fannie Mae and Freddie Mac, and a Treasury 

credit facility for all three entities. In addition 

to these, Treasury will purchase securities of 

Fannie Mae and Freddie Mac backed by new 

housing bonds issued by the Housing Finance 

Agencies (HFAs), through the New Issue 

Bond Program (“NIBP”) and Treasury will 

also purchase participation interests in the 

obligations of Fannie Mae and Freddie Mac 

under Temporary Credit and Liquidity 

Facilities that they will issue and administer 

through the Temporary Credit and Liquidity 

Program (“TCLP”) to provide backstop 

liquidity and credit for state and local HFAs 

These programs are designed to meet the 

following priorities: 

Housing Government Sponsored Enterprise Programs 

•	 To promote stability in financial 

markets. 

•	 To improve the availability of
 

mortgage credit to American 

homebuyers. 

•	 To ensure investor confidence in the 

GSEs by maintaining and/or 

increasing the PSPAs. 

•	 To improve the capacity of State and 

local HFAs to provide affordable 

housing resources to working families 

at the state and local level 

The FY 2011 budget estimate anticipates 

decreases in four of the programs due to 

reduced draws under the PSPAs as housing 

market conditions improve; and the 

expiration of Treasury’s authority to make 

purchases under the GSE MBS Program and 

the HFA Initiative on December 31, 2009. 

Purpose of Program 

The function of the PSPAs is to instill 

confidence in investors that Fannie Mae and 

Freddie Mac will remain viable entities 

critical to the functioning of the housing and 

Department of the Treasury - Budget in Brief FY 2011 Page 87
mortgage markets. The PSPAs will provide 

funding for each GSE to ensure that each 

enterprise maintains a positive net worth. 

The function of the GSE MBS Purchase 

Program is to help improve the availability of 

mortgage credit to American homebuyers and 

mitigate pressures on mortgage rates. To 

promote the stability of the mortgage market, 

Treasury has purchased GSE MBS in the 

secondary market. By purchasing these 

guaranteed securities, Treasury sought to 

broaden access to mortgage funding for 

current and prospective homeowners as well 

as to promote market stability. 

The function of the GSE Credit Facility is to 

ensure credit availability to the housing GSEs 

by providing secured funding on an as needed 

basis under terms and conditions established 

by the Secretary of the Treasury to protect 

taxpayers. Fannie Mae, Freddie Mac, and 

FHLBs are eligible to borrow under this 

program if needed. This facility offers 

liquidity if needed until December 31, 2009. 

Treasury did not use this program in FY 2010. 

The function of the NIBP is to provide 

stability to financial markets and prevent 

disruptions in mortgage finance availability by 

providing a temporary supplemental market 

for newly issued HFA housing bonds. By 

temporarily supplementing private demand for 

HFA production until the market can recover, 

the NIBP will enable HFAs to keep their 

lending programs active while they adapt to 

changing market conditions. The program 

will support the availability of mortgage credit 

and affordable rental properties for low and 

moderate income Americans. 

The function of the TCLP is to help relieve 

current financial strains for HFAs and enable 

them to continue to serve their important role 

in providing housing resources to working 

families. The TCLP will provide HFAs with 

temporary credit and liquidity facilities to 

preserve the viability of the HFA 

infrastructure so that HFAs can continue their 

Congressionally supported role in helping 

provide affordable mortgage credit to low 

and moderate income Americans, as well as 

continue their other important activities in 

communities. 

Explanation of Budget Activities 

Preferred Stock Purchase Agreements 

($23 billion in obligations) 

This measure enhances market stability by 

providing additional security to holders of 

Fannie Mae and Freddie Mac securities, 

which, in turn, leads to increased mortgage 

affordability by providing additional 

confidence to investors in GSE mortgagebacked securities. This commitment also 

significantly diminishes the potential for 

mandatory triggering of receivership. To this 

end, the PSPAs are an effective means of 

averting systemic risk while at the same time 

protecting the taxpayer. They are more 

efficient than a one-time equity injection, in 

that Treasury will use them only as needed 

and on terms that the Treasury deems 

appropriate. 

GSE MBS Purchase Program (No 

funding) 

The size and timing of this program is subject 

to the discretion of the Secretary of the 

Treasury. The scale of the program is based 

on developments in the capital markets and 

housing markets. Given that Treasury can 

hold these securities to maturity, the spreads 

between Treasury issuances and GSE MBS 

should result in a positive return to the 

Taxpayer. Treasury's authority to purchase 

GSE MBS expired on December 31, 2009. 

Department of the Treasury - Budget in Brief FY 2011 Page 88
GSE Credit Facility Program (No 

funding) 

Loans would be for short-term durations and 

would in general be expected to be for less 

than one month but no shorter than one week. 

The rate on a loan request ordinarily would be 

based on the daily LIBOR fix for a similar 

term of the loan plus 50 basis points. The rate 

is set at the discretion of the Secretary of the 

Treasury with the objective of protecting the 

taxpayer, and is subject to change. All loans 

would be collateralized and collateral is 

limited to mortgage backed securities issued 

by Freddie Mac and Fannie Mae and advances 

made by the FHLBs. No loans were made 

under this program before Treasury's authority 

expired on December 31, 2009. 

New Issue Bond Program (No funding) 

HFAs submitted detailed program 

participation requests to Treasury’s financial 

agents. In order to haircut the NIBP requests 

to an acceptable level that could be 

recommended for adoption. HFAs were able 

to request that a portion or all of their NIBP 

allocation be used to issue single or multifamily bonds. HFAs will pay the GSEs and 

Treasury an amount intended to cover both the 

cost of financing the newly issued bonds as 

well as a fee designed to cover risk posed by 

the HFA. All purchase commitments of 

related GSE securities occurred before 

December 31, 2009. 

Temporary Credit and Liquidity 

Program (No funding) 

Through Fannie Mae and Freddie Mac, the 

TCLP will provide replacement credit and 

liquidity facilities to HFAs that will help 

reduce the costs of maintaining existing 

financing for the HFAs. The HFAs will pay 

the GSEs and Treasury a fee designed to cover 

risk posed by the HFA. The fee for HFAs to 

use the TCLP will increase over time. This 

increasing cost to the HFAs will encourage 

the HFAs to transition from the TCLF to 

private market financing alternatives as 

quickly as possible. All purchase commitments of related GSE securities occurred 

before December 31, 2009. 

Legislative Proposals 

The Housing GSE programs have no 

legislative proposals for FY 2011. 

Description of Performance 

Performance metrics are currently in 

development for Housing Government 

Sponsored Enterprise Programs. 

Department of the Treasury - Budget in Brief FY 2011 Page 89
Department of the Treasury - Budget in Brief FY 2011 Page 90
Treasury Franchise Fund 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2009 FY 2010 FY 2011 

Actual Estimated Estimated $ Change % Change

 Consolidated/Integrated Administrative Management $15,261 $0 $0 $0 -

 Financial Management Administrative Support Services $146,400 $167,998 $176,213 $8,215 4.9%

 Financial Systems, Consulting and Training $4,811 $0 $0 $0 -

Total Cost of Operations $166,472 $167,998 $176,213 $8,215 4.9% 

Explanation of Budget Estimate 

Historically, The Treasury Franchise Fund (the 

Fund) has reported activity in the following 

budget activities 

•	 Consolidated/Integrated Administrative 

Management 

•	 Financial Management Administrative 

Support Systems 

•	 Financial Systems, Consulting and 

Training 

In FY 2011, the Fund is reporting only the 

Financial Management Administrative Support 

Systems budget activity, Public Debt’s 

Administrative Resource Center (ARC). The 

remaining activities were eliminated due to 

Treasury decisions to transition out of those 

business lines because they were not consistent 

with Treasury’s core mission or are not 

advantageous to be offered as a shared service. 

The Treasury Franchise Fund is projecting a 

net increase in budgetary resources of 

approximately five percent for FY 2011. The 

net increase is comprised of increases due to 

labor and non-labor price increases and 

anticipated new customers. 

Purpose of Program 

The Fund is a revolving fund that supplies 

financial and administrative services on a feefor-service basis. The Fund has transformed 

the administrative support arena in the Federal 

Government through a shared services 

business model that offers marketplace success 

through competition. The Fund became 

permanent in the Consolidated Appropriations 

Act, 2005 (Public Law 108-447) and is 

codified in U.S.C. 322, note. In addition, 

Public Debt’s Administrative Resource Center 

(ARC) was designated by the Office of 

Management and Budget (OMB) as a Center 

of Excellence for Financial Management 

(FMLoB) and a Shared Services Center for 

Information Systems Security (ISSLoB). In 

addition, ARC has critical supporting roles in 

the Human Resources (HRLoB) and Public 

Key Infrastructure (PKI) SSP designations of 

the Department of Treasury. 

Since inception, the Fund has been a leader in 

redefining the processes and methods for 

delivering administrative products and services 

to federal customers. The Fund offers onestop shopping to customers and we use 

streamlined processes, ensure full 

accountability, offer competitive prices, and 

timely services. In FY 2011, the Fund will 

maintain its commitment to excellence and 

will meet or exceed all applicable strategic 

goals and benchmarks. 

Department of the Treasury - Budget in Brief FY 2011 Page 91
Explanation of Budget Activities 

Consolidated/Integrated Administrative 

Management (No funding) 

In previous fiscal years, FedSource was 

reported under this budget activity. With 

Treasury’s decision to transition out of the 

FedSource service line, the Franchise Fund has 

discontinued this budget activity in 2010. 

Financial Management Administrative 

Support Services ($176,213,000 from 

reimbursable programs) 

This Franchise Fund budget activity includes 

Public Debt’s Administrative Resource Center 

(ARC), an OMB approved federal shared 

service provider. ARC provides accounting, 

procurement, travel, human resources, and 

information technology services to federal 

customers and is a Center of Excellence for 

Financial Management and a Shared Services 

TFF Performance by Budget Activity 

Description of Performance 

The Fund has defined customer satisfaction 

and operating expenses as a percentage of 

revenue as key performance measurement 

areas. 

With the decision to close-out the FedSource 

business line, all efforts have been focused on 

Center for Information Systems Security 

(ISSLoB) . 

Financial Systems, Consulting and Training 

(No funding) 

In previous fiscal years, the Federal Consulting Group (FCG) and Treasury Agency 

Services was reported under this budget 

activity. With Treasury’s decision to transition out of these service lines, the Franchise 

Fund has discontinued this budget activity in 

2010. 

Legislative Proposals 

The Treasury Franchise Fund has no 

legislative proposals for FY 2011. 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Actual Target 

Met? Target Target 

Consolidated/Integrated Operating expenses as a 

Administrative percentage of revenue--

Management Consolidated/Integrated 

Administrative Management 

(%)(E) 

4 18 DISC DISC DISC DISC DISC 

Financial Management Operating expenses as a 

Administrative Support percentage of revenue—Financial 

Services Management Administrative 

Support (%) (E) 

15 4 12 5 Y 12 12 

Financial Systems, Operating expenses as a 

Consulting and Training percentage of revenue--Financial 

Systems, Consulting and Training 

(%) (E) 

7 6 DISC DISC DISC DISC DISC 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and DISC - Discontinued 

Target 

ensuring a smooth transition for customers and 

vendors, providing employees with job 

placement and separation assistance and 

minimizing close-out costs. Therefore, The 

Fund’s performance measures are discontinued 

for this budget activity. 

The FY 2010 and FY 2011 target of 12 

percent for operating expenses as a percentage 

of total revenue provides franchise 

Department of the Treasury - Budget in Brief FY 2011 Page 92
management with a measure that encourages 

efficiency in administrative operations and 

helps to assure services are provided at the 

lowest possible cost. Administrative Resource 

Center (ARC) again met this performance 

measure in FY 2009 with a five percent 

operating expense ratio. and expects to meet 

them in FY 2010 and FY 2011. 

With the decision to transition out of the FCG 

and TAS business lines, all efforts have been 

focused on ensuring smooth transitions to their 

new federal hosts. Therefore, The Fund’s 

performance targets are discontinued for this 

budget activity. 

Department of the Treasury - Budget in Brief FY 2011 Page 93
Department of the Treasury - Budget in Brief FY 2011 Page 94
Bureau of Engraving and Printing 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2009 FY 2010 FY 2011 

Actual Estimated Estimated $ Change % Change

 Manufacturing $469,000 $530,000 $527,000 ($3,000) (0.6%)

 Protection and Accountability of Assets $62,000 $61,000 $61,000 $0 0% 

Total Cost of Operations $531,000 $591,000 $588,000 ($3,000) (0.5%) 

Explanation of Budget Estimate 

The Bureau of Engraving and Printing (BEP) 

began printing currency in 1862. It 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 at BEP are 

financed by a revolving fund established in 

1950 in accordance with Public Law 81-656. 

This fund is reimbursed through product sales 

for direct and indirect costs of operations 

including administrative expenses. In 1977, 

Public Law 95-81 authorized the Bureau to 

include an amount sufficient to fund capital 

investments and to meet working capital 

requirements in the prices charged for 

products. This funding mechanism eliminated 

the need for appropriations from Congress. 

BEP’s key priorities for FY 2011 include: 

•	 The continued production of the 

redesigned $100 note. Final developments 

of the redesigned note will occur in early 

FY 2010. The Federal Reserve will 

determine when the redesigned $100 note 

is issued to the public. The redesign of the 

$100 note will mark the completion of the 

current multi-year initiative to implement 

the most ambitious currency redesign in 

United States history. 

•	 Continue re-tooling and retrofitting of the 

currency production process. Successful 

implementation of new technology will 

allow BEP to improve productivity, reduce 

its environmental impact and provide the 

needed capabilities to produce increasingly 

more complex currency note designs. This 

new equipment will ensure that BEP 

continues to operate in an efficient and 

cost-effective manner. 

•	 Continued training of the workforce for 

increasingly sophisticated technology 

integrated into 21st century manufacturing 

processes. 

•	 Improve the Nation’s currency to better 

serve the needs of Americans and others 

around the world, including the blind and 

visually impaired. To this end, BEP, in 

coordination with the Department of 

Treasury, announced the results of a study 

analyzing options to assist the blind and 

visually impaired in denominating U.S. 

currency. While no timetable has been set 

for future redesigned currency, the next 

redesign will incorporate changes to make 

U.S. currency more accessible to those 

who are blind and visually impaired. The 

information gathered in the study will be 

used to help establish a direction for the 

Department of the Treasury in providing 

access to U.S. currency for all cash users. 

•	 Continue process improvements as 

required of an ISO 9001 certified 

organization, a designation that indicates to 

current and prospective customers that the 

Bureau employs a rigorous quality 

management program. 

•	 Work in concert with the Advanced 

Counterfeit Deterrent Committee, and 

other Government agencies to research and 

develop state-of-the-art counterfeit 

deterrent features and systems for use in 

currency notes that will enhance and 

protect future notes. 

Department of the Treasury - Budget in Brief FY 2011 Page 95
Purpose of Program 

The mission of the Bureau of Engraving and 

Printing is to design and manufacture high 

quality security documents that deter 

counterfeiting and meet customer requirements 

for quality, quantity and performance. 

BEP’s vision is to maintain its position as a 

world-class securities printer providing its 

customers and the public superior products 

through excellence in manufacturing and 

technological innovation. It strives to produce 

U.S. currency of the highest quality, as well as 

many other security documents issued by the 

Federal Government. Other activities at the 

Bureau 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 the requirements 

of customers. In addition, the Bureau provides 

technical assistance and advice to other 

Federal agencies in the design and production 

of documents, which, because of their innate 

value or other characteristics, require 

counterfeit deterrence. 

The Bureau’s top priorities for FY 2011 

include the continued re-tooling and 

retrofitting of the currency production process 

which will allow BEP to improve productivity, 

reduce its environmental impact and provide 

the needed capabilities to produce increasingly 

more complex currency note designs. This 

new equipment will ensure that BEP continues 

to operate in an efficient and cost-effective 

manner. Another top priority for FY 2011 is 

the continued production of the redesigned 

$100 note. Final developments of the 

redesigned note will occur in early FY 2010. 

The Federal Reserve will determine when the 

redesigned $100 note is issued to the public. 

Another initiative for FY 2011 will include 

taking steps to identify, refine and create 

meaningful access to currency for the blind 

and visually impaired. While no timetable has 

been set for future redesigned currency, the 

next step in currency redesign will include 

improvements to the Nation’s currency to 

better serve the needs of Americans and others 

around the world, including the blind and 

visually impaired. To this end, the Bureau, in 

coordination with the Department of Treasury, 

announced the results of a study analyzing 

options to assist the blind and visually 

impaired in denominating U.S. currency. The 

information gathered in the study will be used 

to help establish a direction for the Department 

of the Treasury in providing access to U.S. 

currency for all cash users. In addition, 

because aggressive law enforcement, effective 

design, and public education are all essential 

components of a concerted anti-counterfeiting 

program, the Bureau will continue its work in 

2011 with the Advanced Counterfeit Deterrent 

Committee to research and develop future 

currency designs that will enhance and protect 

future notes. 

Explanation of Budget Activities 

Manufacturing ($527,000,000 from 

reimbursable programs) 

BEP manufactures high quality security 

documents that deter counterfeiting. These 

manufactured products are grouped into two 

programs: Federal Reserve notes and other 

security documents. The manufacturing of 

state-of –the-art currency deters counterfeiting, 

contributes to public confidence, and 

facilitates daily commerce ensuring seamless, 

“business as usual” transactions as new 

currency designs are introduced to the public. 

Protection and Accountability of Assets 

($61,000,000 from reimbursable programs) 

BEP protects and accounts for its assets by 

providing effective and efficient product 

security and accountability during the 

manufacture and delivery of currency notes to 

Department of the Treasury - Budget in Brief FY 2011 Page 96
the Federal Reserve which preserves the 

integrity of the nation’s currency. Protection 

and Accountability of Assets includes the 

protection of thousands of BEP employees and 

contractors, facilities and equipment. 

Legislative Proposals 

Treasury’s legislative proposal would repeal 

the portion of 31 USC Sec. 5114(c) that limits 

a contract term for the manufacture of 

distinctive currency paper to four years, and 

open up the supply of U.S. currency paper to 

increased competition. Potential suppliers 

consider four years too short of a payback 

period for production of this product thus 

BEP Performance by Budget Activity 

leaving the U.S. with a single source provider 

of currency paper. 

Capital Investments Summary 

Major Investments: BEP has no new planned 

independent major investments for 2011. BEP 

participates as a partner in significant 

Treasury-wide enterprise level investments 

such as T/Net (Treasury’s implementation of 

General Services Administration’s (GSA) 

Networx), Homeland Security Presidential 

Directive -12 (again through Treasury’s 

partnership with GSA), HRConnect (an 

Human Resources Line of Business service 

provider) and Internet Protocol version 6. 

Budget 

Activity Performance Measure FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Met? Target Target 

Manufacturing Manufacturing costs for 

for BEP currency per one thousand 

notes delivered (E) 

$30.25 $29.47 $37.00 $32.77 Yes $37.00 $37.00 

Manufacturing Percent of currency notes 

for BEP delivered to the Federal 

Reserve that meet customer 

quality requirements. (M) 

100.00% 100.00% 99.90% 99.90% Yes 99.90% 99.90% 

Protection and Currency shipment 

Accountability discrepancies (per million 

of Assets notes delivered) (Oe) 

0.01% 0.01% 0.01% 0.00% Yes 0.01% 0.01% 

Protection and Security costs per 1000 notes 

Accountability delivered (E) 

of Assets 

$5.92 $5.63 $5.65 $5.76 No $5.60 $5.60 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 

Description of Performance 

Manufacturing Costs for Currency (dollar cost 

per 1,000 notes produced) is an indicator of 

manufacturing efficiency and effectiveness of 

program management. This measure is based 

on contracted price factors, and anticipated 

productivity improvements. Actual performance against standard depends on BEP’s 

ability to meet annual spoilage, efficiency, and 

capacity utilization goals. Performance against 

this measure has been favorable for the past 

seven years. 

Percent of currency notes delivered to the 

Federal Reserve that meet customer quality 

and requirements is a qualitative indicator 

reflecting the Bureaus’ ability to provide a 

quality product. All notes delivered to the 

Federal Reserve go through rigorous quality 

inspections. These inspections endure that all 

counterfeit deterrent features, both overt and 

covert are functioning as designed. 

Department of the Treasury - Budget in Brief FY 2011 Page 97
Currency Shipment Discrepancies is an 

indicator of the Bureau’s ability to provide 

effective product security and accountability. 

This measure refers to product overages or 

underages of as little as a single currency note 

in shipments of finished notes to the Federal 

Reserve Banks expressed as a percentage of 

total program. For several years, this measure 

has had an annual target of .01 percent. The 

Bureau has been able to meet or do better than 

this target on a regular basis. BEP continually 

strives to meet its long term goal of 0 percent, 

and has been able to do so several times. 

The measure security cost per 1000 notes 

delivered reflects the cost of providing product 

security. The measure is kept at the lowest 

level possible without compromising the 

security posture of the Bureau. 

BEP strives to reduce the target on an annual 

basis through a combination of leveraging of 

the best practices of other federal law 

enforcement agencies, targeted system 

investments, and improvements in facility 

design that incorporate security attributes. In 

2009 BEP was unable to meet its target for 

cost of security. During the last quarter of the 

fiscal year, BEP responded to the Federal 

Reserve’s need to change the 2009 currency 

production order due to worldwide changes in 

the demand for currency. BEP delivered a 

reduced program as well as a different mix of 

currency denomination notes; the timing of the 

reduction did not allow the Bureau to modify 

security costs in enough time to meet the 

targeted costs per 1000 notes delivered for the 

fiscal year. Guarding against theft is the top 

priority of the BEP security program; in 2010, 

BEP will produce and deliver the 2010 

currency order while continuing to monitor the 

cost of providing effective and efficient 

product security and accountability. 

Department of the Treasury - Budget in Brief FY 2011 Page 98
(Dollars in thousands) 

FY 2010 

Estimated 

Manufacturing 

Budget Activity FY 2009 

Actual 

$2,215,183 

$43,318 

$2,258,501 

$23,996 

$1,974,420 

Protection $47,744 

Total Cost of Operations $2,022,164 

FY 2011 

Estimated $ Change % Change 

$2,013,908 $39,488 2.0% 

$48,699 $955 2.0% 

$2,062,607 $40,443 2.0% 

Capital Investments* $49,948 

*Not included in Total Cost of Operations above 

$54,600 $4,652 9.3% 

United States Mint 

Program Summary by Budget Activity 

Explanation of Budget Estimate 

The United States Mint manufactures and 

delivers domestic circulating coinage, 

numismatic coinage, and bullion products. 

Furthermore, the United States Mint provides 

security for assets, including the government’s 

stock of gold bullion, silver bullion, coins and 

coinage metals. 

The United States Mint’s key priorities for FY 

2011 include: 

•	 Efficiently and effectively produce and 

distribute approximately 9.5 billion coins 

to meet demand for circulating coins 

during FY 2011 to enable commerce, an 

important strategic objective for the 

Department of the Treasury. 

•	 Mint and issue coins and products required 

by the America’s Beautiful National Parks 

Quarter-Dollar Coin Act. 

•	 Mint and issue Presidential $1 Coins for 

circulation to honor the following 

Presidents: Abraham Lincoln, Andrew 

Johnson, Ulysses S. Grant and Rutherford 

B. Hayes 

•	 Mint and issue the Native American $1 

Coin. 

•	 Prepare and distribute recurring 

numismatic and bullion products and sets, 

as well as other numismatic items, in 

quantities sufficient to make them 

accessible, available, and affordable to 

Americans who choose to purchase them. 

•	 Continue to secure the nation’s gold 

reserves, silver and other assets. 

•	 Mint for sale to the public the United 

States Army Commemorative Coin. 

FY 2011 United States Mint estimated total 

revenues are $2,217,658,000, total expenses 

are $2,062,607,000, capital investments are 

$54,600,000, and net results are $155,015,000. 

Purpose of Program 

Since FY 1996, the United States Mint has 

been operating under the United States Mint’s 

Public Enterprise Fund (PEF). As authorized 

by Public Law 104-52 (31 U.S.C. § 5136), the 

PEF eliminates the need for appropriations. 

Proceeds from the sales of circulating coins to 

the Federal Reserve Banks and numismatic 

items to the public are the source of funding 

for operations. Both operating expenses and 

capital investments are associated with the 

production of circulating and numismatic 

coins and coin-related products and protective 

services. Revenues in excess of amounts 

required by the PEF are transferred to the 

United States Treasury General Fund. 

Explanation of Budget Activities 

Manufacturing ($2,013,908,000 from 

reimbursable programs) 

The United States Mint manufactures and sells 

products. For budget reporting purposes, these 

Department of the Treasury - Budget in Brief FY 2011 Page 99
products are grouped into two programs: 

Circulating Coinage and Numismatic Program. 

Circulating Coinage includes the one-cent 

coin, 5-cent coin, dime, quarter, half-dollar 

and dollar used to enable the conduct of trade 

and commerce. The primary mission of the 

United States Mint is to enable commerce by 

minting and issuing circulating coinage to 

meet the needs of the United States. The 

United States Mint delivers the circulating 

coinage to the Federal Reserve Banks for 

distribution as demanded by commerce. 

Beginning in 2010 through 2020, the United 

States Mint will mint and issue “America’s 

Beautiful National Parks Quarter Dollar 

Coins” in accordance with Public Law 110-

456. This program honors national parks and 

sites in each of the 50 states in the order in 

which they were first established as a national 

park or site. Similar to the issuance of the 50 

State Quarters Program, five different coin 

designs will be issued each year of this 

program. 

Numismatic Program 

The Numismatic program prepares and 

distributes a variety of numismatic products 

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 Numismatic Program 

includes the American Eagle Program, the 

American Buffalo Program, the recurring 

programs, commemorative coins, and medals. 

The United States Mint also produces bullion 

coins under American Eagle and American 

Buffalo Programs to fulfill investor demand. 

The current FY 2011 budget estimate includes 

resource needs of $1,302 million to generate 

$1,350 million in revenues from the sale of 

these products. 

Protection ($48,699,000 from reimbursable 

programs) The United States Mint secures 

over $240 billion in market value of the 

nation’s gold reserves, silver, and other assets. 

The United States Mint Police protects United 

States Mint assets while safeguarding its 

employees against potential threats at its 

facilities across the country. The United States 

Mint Police addresses possible threats by 

ensuring good perimeter security at all sites, 

and increasing coordination with various 

Federal, state and local law enforcement 

agencies. It also ensures that proper policies 

are in place, and procedures followed, in 

handling the assets used to produce and 

transport coinage. 

Legislative Proposals 

This legislative proposal would authorize the 

Secretary of the Treasury to approve 

alternative coinage materials to mitigate the 

effect of high metals prices. Specifically, the 

proposal would allow the Secretary to explore, 

analyze, and approve new, less expensive 

materials for all circulating coins based on 

factors that he determines to be appropriate. 

These factors include, but are not limited to, 

the physical, chemical, metallurgical and 

technical characteristics of the coins, as well as 

any other factors necessary to ensure the coins' 

utility and integrity. Once the agency has a 

comprehensive inventory of factors and their 

relative significance, the United States Mint 

would employ an objective, competitive, and 

public process to solicit and evaluate proposals 

for new coinage materials. The United States 

Mint will continue to produce circulating 

coinage as currently mandated by Congress. 

Department of the Treasury - Budget in Brief FY 2011 Page 100
Capital Investments Summary 

The United States Mint’s FY 2011 circulating 

and protection capital request is $24.9 million, 

which is less than the projected circulating and 

protection depreciation (capital limit) amount 

of $25.0 million. 

Each year, the United States Mint commits 

funds for capital projects to maintain, upgrade 

Mint Performance by Budget Activity 

or acquire physical structures, equipment, 

physical security, and information technology 

systems. Total capital projects are estimated 

to be $54.6 million in FY 2011. This includes 

approximately $16.4 million for circulating 

projects, $8.5 million for security 

improvement projects, and $29.7 million for 

numismatic projects. 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Budget Activity Performance Measure Actual Actual Target Actual Met? Target Target 

Manufacturing Customer Satisfaction Index 

for Mint (%) (Oe) 90.5% 87.5% 88.0% 88.3% Yes 88% 88% 

Manufacturing Numismatic Customer Base in 

for Mint millions (Ot) 0.97 1.27 1.4 1.06 No 0.90 1.00 

Manufacturing Circulating On-Time Delivery 

for Mint (%) (Oe) N/A N/A N/A N/A N/A B TBD 

Protection cost per square foot Protection for Mint ($) (E) 31.29 31.76 31.75 31.57 Yes 31.75 31.75 

Key: Oe - Outcome Measure, E- Efficiency Measure, OT - Output/Workload Measure, M - Management/Cust.Satisfaction, and B - 

Baseline 

Description of Performance 

Customer Satisfaction Index (CSI) 

A United States Mint contractor conducts a 

quarterly Customer Satisfaction Measure 

(CSM) Tracking Survey among a random 

sample of active customers. The CSM Survey 

is intended to capture customer satisfaction 

with the United States Mint’s performance as a 

coin supplier and the quality of specific 

products. The CSI is a single quantitative 

score of CSM Survey results. In FY 2009, the 

United States Mint results were 88.3 percent, 

exceeding the target of 88 percent and 

increasing slightly from the FY 2008 result of 

87.5 percent. 

Numismatic Customer Base 

The numismatic customer base consists of the 

total number of unique purchasers (in millions) 

with a purchase of at least one numismatic 

product during the fiscal year. The 

numismatic customer base measure provides 

information on the continued and new demand 

for numismatic products. The FY 2009 

numismatic customer base totaled 1.06 

million, below the target of 1.40 million. The 

United States Mint customer retention and 

acquisition performance declined because the 

bureau was unable to offer several core 

numismatic products for sales after January 

2009. Economic conditions may have also 

curtailed customer spending on collectibles 

from prior years. The United States Mint 

began to full satisfy bullion demand in the 

later months of the fiscal year. Consequently, 

the bureau hopes to offer some numismatic 

products for sale in FY 2010 that were 

unavailable in FY 2009. 

Circulating On-Time Delivery 

On-time delivery to the Federal Reserve Banks 

(FRB) is the percentage of total scheduled 

orders shipped on time to the FRB. The 

United States Mint is responsible for providing 

the Nation’s coinage in sufficient quantity to 

meet the needs of commerce. To accomplish 

Department of the Treasury - Budget in Brief FY 2011 Page 101
this mission, the United States Mint must 

supply coinage in the quantities and timelines 

specified by the FRB. The FRB is then 

responsible for distributing coinage to the 

commercial banking sector. 

Cost per Square Foot 

Protection cost per square foot is the 

Protection Department’s total operating cost 

divided by the United States Mint’s area of 

usable space, which is 90 percent of the total 

square footage. 

The cost per square foot provides a 

measurement of efficiency over time. Total 

square footage of usable space at the United 

States Mint is a stable figure and will only 

change significantly with major events such as 

the addition, removal or expansion of a 

facility. Protection cost per square foot 

decreased to $31.57 in FY 2009 from $31.76 

in FY 2008, below the target of $31.75. 

Department of the Treasury - Budget in Brief FY 2011 Page 102
Office of Comptroller of the Currency 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2009 FY 2010 FY 2011 

Actual Estimated Estimated $ Change % Change

$597,859 $661,039 $694,220 $33,181 5.0%

$94,511 $104,499 $109,744 $5,245 5.0%

$23,628 $26,125 $27,436 $1,311 5.0% 

Total Cost of Operations $715,998 $791,663 $831,400 $39,737 5.0% 

Supervise 

Regulate 

 Charter 

Explanation of Budget Estimate 

As of September 30, 2009, The Office of the 

Comptroller of the Currency (OCC) supervised approximately 1,564 national bank 

charters and 51 federal branches of foreign 

banks in the United States (U.S.). Total assets 

under the OCC supervision were approximately $8.3 trillion or 70 percent of total 

U.S. commercial banking assets. The average 

size and complexity of the institutions in the 

national banking system continue to grow, 

creating increasing and diverse challenges for 

the OCC. 

The OCC’s priorities for fiscal year (FY) 2010 

include supervisory issues related to continued 

adverse changes in national bank asset quality 

and risk profiles: working with the U.S. 

Treasury and other supervisors domestically 

and internationally to strengthen supervisory 

processes and banks’ capital, liquidity, 

corporate governance, risk management 

practices; assessing the potential impact of, 

and ensuring national banks’ compliance with 

any new applicable statutory, regulatory, and 

accounting standards; identifying and 

resolving potential problem banks at the 

earliest possible stage; further enhancing the 

OCC’s supervisory analytical tools, including 

the joint OCC and Office of Thrift Supervision 

(OTS) mortgage metrics database and reports; 

and encouraging national banks to continue to 

meet the needs of credit worthy borrowers, 

including appropriate and effective residential 

mortgage modification programs, and ensuring 

that they comply with Community Reinvestment Act (CRA), fair lending, and other 

consumer protection laws and with BSA/AML 

and USA PATRIOT Act requirements. 

Assessing the adequacy of national banks’ 

credit and liquidity risk management and 

consumer compliance practices, and obtaining 

corrective action to address any identified 

safety and soundness and consumer compliance weaknesses will continue to be a major 

focus of the OCC on-site supervisory activities 

in FY 2010. Coordination and cooperation 

with state officials will be a significant focus 

for the agency. Maintaining and enhancing 

examiners’ skill sets, recruiting entry-level 

examiners and enhancing their retention at the 

critical three/four-year point of their careers, 

and continuing to develop the next generation 

of bank supervision leadership are also critical 

initiatives of the OCC. 

In FY 2010, an estimated $791,663,000 is 

needed to fund ongoing OCC operations and 

address program priorities effectively. Estimated OCC revenue for FY 2010 is 

$827,100,000. 

The OCC collects revenue primarily from 

semiannual assessments levied on national 

banks. The OCC receives no appropriated 

funds from Congress. 

Information regarding the Administration’s 

comprehensive regulatory reform proposals is 

provided in a separate budget chapter. 

Department of the Treasury - Budget in Brief FY 2011 Page 103
Purpose of Program 

The OCC was created by Congress 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. 

As the regulator of national banks, the OCC 

has established four strategic goals that help 

support a strong economy for the American 

public: 1) a safe and sound national banking 

system; 2) fair access to financial services and 

fair treatment of bank customers; 3) a flexible 

legal and regulatory framework that enables 

the national banking system to provide a full 

competitive array of financial services; and 4) 

an expert, highly motivated, and diverse 

workforce that makes effective use of OCC 

resources. The OCC organizes its activities 

under three programs: (1) Supervise, (2) 

Regulate, and (3) Charter, to achieve the goals 

and objectives outlined in its strategic plan. 

Explanation of Budget Activities 

Supervise ($661,039,000 from reimbursable 

programs) 

The Supervise program consists of those 

ongoing supervision and enforcement 

activities undertaken to ensure that each 

national bank is operating in a safe and sound 

manner and is complying with applicable laws, 

rules, and regulations relative to the bank and 

the customers and communities it serves. This 

program includes bank examinations and 

enforcement activities; resolution of disputes 

through the National Bank Appeals process; 

ongoing monitoring of banks; and analysis of 

systemic risks and market trends in the 

national banking system or groups of national 

banks, the financial services industry, and the 

economic and regulatory environment. 

Regulate ($104,499,000 from reimbursable 

programs) 

The Regulate program consists of those 

ongoing activities that result in the 

establishment of regulations, policies, 

operating guidance, and interpretations of 

general applicability to national banks. These 

regulations, policies, and interpretations may 

establish system-wide standards, define 

acceptable banking practices, provide 

guidance on risks and responsibilities facing 

national banks, or prohibit (or restrict) banking 

practices deemed to be imprudent or unsafe. 

This program includes the establishment of 

examination policies, handbooks, and 

interpretations for examiners as well as 

representation of the OCC’s regulatory 

authorities and interpretations in 

administrative, judicial, and congressional 

hearings. 

Charter ($26,125,000 from reimbursable 

programs) 

The Charter program involves those ongoing 

activities that result in the chartering of 

national banks as well as the evaluation of the 

permissibility of structures and activities of 

national banks and their subsidiaries. This 

includes the review and approval of new 

national bank charters, federal branches and 

agencies, mergers, acquisitions, conversions, 

business combinations, corporate 

reorganizations, changes in control, operating 

subsidiaries, branches, relocations, and 

subordinated debt issues. 

Capital Investments Summary 

The OCC developed a Technology Vision 

2012 Roadmap that aligns to the agency’s core 

mission to ensure a safe and sound national 

banking system for all Americans. In 

addition, in FY 2009, the OCC established 

specific IT goals to leverage information 

Department of the Treasury - Budget in Brief FY 2011 Page 104
technology as a strategic business enabler to 

support the OCC’s strategic goals. 

Even though there are no new major IT 

initiatives planned in FY 2010, the OCC will 

continue to implement the OCC Technology 

Vision 2012 Roadmap with a focus on enterprise data analytics and information sharing, 

optimizing technology solutions for the mobile 

workforce, aligning IT investment decision 

making with the enterprise architecture and 

business objectives and managing the risk to 

OCC assets and improving internal efficiency 

and effectiveness. 

To address the challenges faced by the OCC 

mobile workforce, in FY 2010 the OCC will 

continue the Integrated - Mobile Employee 

Technical Refresh & Optimization (IMETRO) initiative. I-METRO will provide 

new laptops, PCs, and other peripheral devices 

and provide enhanced connectivity and mobile 

access. This initiative will reduce the costs of 

desktops, laptops and peripheral devices 

through a strategic sourcing service manageOCC Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Supervise Percent of national banks with composite 

CAMELS rating 1 or 2 

96 92 90 82 N 90 90 

Supervise Percentage of national banks that are 

categorized as well capitalized 

99 99 95 86 N 95 95 

Supervise Percentage of national banks with 

consumer compliance rating of 1 or 2 

97 97 94 97 Y 94 94 

Supervise Rehabilitated national banks as a 

percentage of problem national banks 

one year ago (CAMEL 3,4, or 5) (%) 

52 47 40 29 N 40 40 

Charter Percentage of licensing applications and 

notices completed within established 

timeframes 

96 95 95 95 Y 95 95 

ment approach. Examiners in the field will 

now have access to the best providers of 

wireless services commensurate with the 

geographic location of their bank examination. 

The OCC will continue to modernize the 

agency’s technical infrastructure. The Data 

Center Modernization & Optimization 

(DCM&O) initiative began in FY 2009 and 

focuses on the development and implementtation of strategies and initiatives for 

infrastructure optimization. The DCM&O will 

maximize service delivery of the OCC data 

center and includes investing in human capital 

by addressing training needs; realigning 

multiple contract vehicles to better deliver core 

services and lower total cost of ownership for 

these services; and improving processes and 

reducing the number of servers to attain a 

"green" data center. 

Description of Performance 

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. Through 

September 30, 2009, 86 percent of national 

banks were classified as well capitalized. This 

decline is reflective of the increasing number 

of problem national banks whose capital levels 

Department of the Treasury - Budget in Brief FY 2011 Page 105
have been adversely affected by substantial 

asset quality problems or who may otherwise 

meet the minimum ratios to be considered 

Well Capitalized but are not considered so 

under Prompt Corrective Action as they are 

under a capital order, Cease and Desist, 

Formal Agreement or Prompt Corrective 

Action Directive to reflect increased risks to 

their capital. The OCC works closely with 

problem banks to develop rehabilitation plans. 

Such plans typically include directives to 

improve or restore capital levels. More 

broadly, the OCC is working with other 

regulators both domestically and internationally to strengthen capital standards and 

improve credit risk management practices. 

The composite CAMELS (Capital adequacy, 

Asset quality, Management, Earnings, 

Liquidity, and Sensitivity to market risk) 

rating reflects the overall condition of a bank. 

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 bank. 

The rating scale is 1 through 5 of which 1 is 

the highest rating granted. CAMELS ratings 

are assigned at the completion of every 

supervisory cycle or when there is a significant 

event leading to a change in CAMELS. 

Through September 30, 2009, 82 percent of 

national banks earned composite CAMELS 

rating of either 1 or 2. The increase in the 

number of banks with lower composite 

CAMELS ratings is not unexpected at this 

stage of the credit cycle and reflects impaired 

asset quality and earnings that is affecting 

many banks. Our primary focus is to ensure 

that CAMELS ratings are an accurate 

reflection of each bank's current financial 

position and thus we would not take action to 

prematurely restore a favorable CAMELS 

rating even though the current distribution of 

ratings is below our target. As bank 

performance and asset quality improves, we 

would expect CAMELS ratings to adjust 

accordingly. 

Problem banks ultimately can reach a point at 

which rehabilitation is no longer feasible. The 

OCC’s early identification and intervention 

with problem banks can lead to successful 

remediation of these banks. The OCC 

recommends corrective actions to problem 

banks for improving their operations and, as a 

result, 29 percent of banks with composite 

CAMELS ratings of 3, 4, or 5 one year ago 

have improved their ratings to either 1 or 2 this 

year. As with the other measures, this target 

benchmark has been adversely affected by the 

underlying economic conditions facing the 

banking industry. The number of serious 

problem banks, where successful resolution is 

more difficult, has increased. In addition, the 

sharp contraction in certain segments of the 

economy, including the real estate sector, has 

resulted in a more rapid deterioration in some 

banks' financial condition. 

To ensure fair access to financial services and 

fair treatment of bank customers, the OCC 

evaluates a bank’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 assimilating and 

evaluating significant consumer compliance 

factors inherent in a bank. Each bank 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 in increasing order of 

supervisory concern. National banks continue 

to show strong compliance with consumer 

protection regulations with 97 percent earning 

Department of the Treasury - Budget in Brief FY 2011 Page 106
a consumer compliance rating of either 1 or 2 

through September 30, 2009. 

The OCC’s timely and effective approval of 

corporate applications contributes to the 

nation’s economy by enabling national banks 

to complete various corporate transactions and 

introduce new financial products and services. 

Delays in providing prompt decisions on 

applications and notices can deprive a bank 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. The OCC completed 95 percent of 

applications and notices within the time 

standard through September 30, 2009. 

Institutions receiving decisions on their cor 

-porate applications and notices rated the 

OCC’s overall licensing services an average of 

1.2. The licensing survey is based on a fivepoint rating scale, in which 1 indicates 

outstanding and 5 indicates significantly 

deficient. 

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. 

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 the 

national banking system benefits all national 

bank customers. 

Department of the Treasury - Budget in Brief FY 2011 Page 107
Department of the Treasury - Budget in Brief FY 2011 Page 108
Office of Thrift Supervision 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2009 FY 2010 FY 2011 

Actual Estimated Estimated $ Change % Change

 Supervision of the Thrift Industry $233,571 $251,145 $244,867 ($6,278) (2.5%) 

Total Cost of Operations $233,571 $251,145 $244,867 ($6,278) (2.5%) 

Explanation of Budget Estimate 

The Office of Thrift Supervision (OTS) budget 

supports it’s strategic and performance goals 

that provide for the proactive supervision of 

the industry, reduced regulatory burden, and 

improved credit availability. The budget 

enables OTS to continue tailoring supervisory 

examinations to the risk profile of the 

institutions, while effectively allocating 

resources to oversee and assess the safety and 

soundness and consumer compliance record of 

the thrift industry. OTS works closely with 

the industry to maintain the profitability, 

integrity, and viability of the thrift charter. 

For FY 2010, OTS estimates that its revenues 

will total $226,018,000 and its expenditures 

will be $251,145,000. OTS receives no 

appropriated funds from Congress. The 

income of the bureau is derived principally 

from assessments on savings associations and 

savings and loan holding companies. Other 

sources of income include fees, rents, and 

interest on investments. 

Information regarding the Administration’s 

comprehensive regulatory reform proposals is 

provided in a separate budget chapter. 

Purpose of Program 

OTS was established by Congress as a bureau 

of the Department of the Treasury on August 

9, 1989. The bureau’s mission is to supervise 

savings associations and their holding 

companies in order to maintain their safety and 

soundness and compliance with consumer 

laws and to encourage a competitive industry 

that meets America’s financial services needs. 

OTS’s vision is to perform, and to be 

recognized, as the premier regulator of 

financial institutions and holding companies. 

OTS charters, examines, supervises, and 

regulates federal savings associations insured 

by the Federal Deposit Insurance Corporation 

(FDIC). OTS also examines, supervises, and 

regulates state-chartered savings associations 

insured by the FDIC and provides for the 

registration, examination, and regulation of 

savings and loan holding companies (SLHCs) 

and other affiliates. 

Explanation of Budget Activities 

Supervision of the Thrift Industry 

($251,145,000 from reimbursable programs) 

OTS examines savings associations every 12 – 

18 months for safety and soundness and 

compliance with consumer protection laws and 

regulations. During these exams, the 

association’s ability to identify, measure, 

monitor, and control risk is evaluated, 

including the risk posed by other entities 

within the corporate structure. When 

weaknesses are identified, increased 

supervisory action, including additional field 

visits, accelerating the normal 12-18 month 

exam cycle, and/or enforcement action is 

taken. 

Department of the Treasury - Budget in Brief FY 2011 Page 109
The FY 2010 projected assessment revenue is 

lower than FY 2009 due to the impact of 

ongoing industry consolidation and recent 

thrift failures. The bureau has experienced 

surpluses in recent years which led to an 

increase in the agency’s cash reserves in 

excess of $200 million. Existing reserves will 

be sufficient to cover the FY 2010 shortfall. In 

addition, OTS is limiting permanent new hires 

and increasing term appointments to fill the 

need for increased supervision. Additionally, 

OTS is prudently managing other expenses. 

With efficient operations and demonstrated 

OTS Performance by Budget Activity 

prudent use of funds, OTS will be able to 

continue supervising savings associations and 

holding companies while maintaining the 

safety and soundness of the thrift industry. 

Capital Investments Summary 

OTS has no major IT investments planned for 

FY 2010. 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Percent of safety and soundness exams 

started as scheduled (%) 

95 94 90 94 Yes 90 90 

Percent of thrifts that are well capitalized 

(%) 

99 98.4 95 97 Yes 95 95 

Percent of thrifts with a compliance 

examination rating of 1 or 2 (%) 

97 95.8 90 95 Yes 90 90 

Percent of thrifts with composite CAMELS 

ratings of 1 or 2 (%) 

93 90 90 84 No 80 80 

Supervision of the 

Thrift Industry 

Supervision of the 

Thrift Industry 

Supervision of the 

Thrift Industry 

Supervision of the 

Thrift Industry 

Description of Performance 

OTS will have met all goals relating to (1) 

Percent of safety and soundness exams started 

as scheduled (2) A Well-capitalized thrift 

industry, and (3) Percent of thrifts with 

COMPLIANCE exam ratings of “1” or “2.” 

The targets for these measures will remain the 

same for FY 2010. 

The fourth goal, Percent of thrifts with 

COMPOSITE ratings of “1” or “2” will be 

short approximately 6% of goal for FY 2009 – 

84% compared to the performance goal of 

90%. The target will not be met due to the 

challenging economic environment, a housing 

market downturn, rising unemployment, and 

lower real estate values. As a result, the banks 

are reporting an increase in troubled assets, 

delinquencies, charge-offs, and reserves which 

have adversely impacting earnings and return 

on equity. As long as economic challenges 

continue in FY 2010, it will continue to impact 

our institution's performance. 

OTS plans to maintain its current high level of 

achievement for its performance measures. 

The following is a brief description of each 

performance measure: 

OTS examines savings associations every 12-

18 months for safety and soundness, 

compliance and consumer protection laws. 

OTS performs safety and soundness 

examinations of its regulated savings 

associations consistent with statutory 

authority. When OTS identifies safety and 

soundness or compliance issues during its riskfocused examinations, it acts promptly to 

ensure association management and directors 

institute corrective actions to address 

supervisory concerns. OTS staff often meets 

with the savings association’s board of 

directors after delivery of the Report of 

Department of the Treasury - Budget in Brief FY 2011 Page 110
Examination to discuss findings and 

recommendations. 

Capital absorbs losses, promotes public 

confidence and provides protection to 

depositors and the FDIC insurance fund. 

Capital provides a financial cushion that can 

allow a savings association to continue 

operating during periods of loss or other 

adverse conditions. The Federal Deposit 

Insurance Act established a system of prompt 

corrective action (PCA) that classifies insured 

depository institutions into five categories 

(well-capitalized; adequately capitalized; 

undercapitalized, significantly undercapitalized; and critically undercapitalized) 

based on their relative capital levels. The 

purpose of PCA is to resolve the problems of 

insured depository institutions at the least 

possible long-term cost to the deposit 

insurance fund. 

The FFIEC first approved a uniform, 

interagency compliance rating system in 1980. 

The rating system reflects, in a comprehensive 

and uniform fashion, the nature and extent of a 

savings association’s compliance with 

consumer protection statutes, regulations and 

requirements. The Compliance Rating System 

is based upon a scale of 1 through 5 in 

increasing order of supervisory concern. 

OTS elected to combine safety and soundness 

and compliance examinations in 2002 to attain 

exam efficiencies and to improve risk 

assessment. Using comprehensive exam procedures, compliance with consumer protection 

laws is reviewed at more frequent intervals, 

which has improved the quality of the 

examination process. 

On December 9, 1996, the Federal Financial 

Institutions Examination Council (FFIEC) 

adopted the CAMELS rating system (Capital 

adequacy, Asset quality, Management, 

Earnings, Liquidity and Sensitivity to market 

risk) as the internal rating system to be used by 

the federal and state regulators for assessing 

the safety and soundness of financial 

institutions on a uniform basis. The CAMELS 

rating system puts increased emphasis on the 

quality of risk management practices. OTS 

assigns a composite CAMELS rating to 

savings associations at each examination. 

OTS adjusts the level of supervisory resources 

devoted to an association based on the 

composite rating. The CAMELS rating is 

based upon a scale of 1 through 5 in increasing 

order of supervisory concern. 

Beginning in FY 2006, OTS included an 

annual performance measure that reflects the 

efficiency of its operations while meeting the 

increasing supervisory demands of a growing 

and more complex thrift industry. This 

measure supports OTS’s ongoing efforts to 

efficiently use agency resources. The efficiency measure is impacted by the relative 

size of the savings associations regulated. 

Approximately 60 percent of all savings 

associations have total assets less than $250 

million and are generally community-based 

organizations that provide retail financial 

services in their local markets. The measure 

does not include the assets of the holding 

company enterprises regulated by OTS. 

Department of the Treasury - Budget in Brief FY 2011 Page 111
Department of the Treasury - Budget in Brief FY 2011 Page 112
FY 2009 FY 2010 FY 2011 

Enacted Enacted President’s Budget $ Change % Change 

$1,493,802 $2,043,670 $2,957,176 $913,506 44.7% 

International Development Association 1,115,000 1,262,500 1,285,000 22,500 2% 

Multilateral Food Security Fund 408,400 408,400 100% 

Climate Investment Funds 375,000 635,000 260,000 69% 

 Clean Technology Fund 300,000 400,000 100,000 33%

 Strategic Climate Funds 75,000 235,000 160,000 213%

 Pilot Program for Climate Resilience 55,000 90,000 

Forest Investment Program 20,000 95,000 

Scaling-Up Renewable Energy Program 50,000 

Global Environment Facility 80,000 86,500 175,000 88,500 102% 

African Development Fund 150,000 155,000 155,940 940 1% 

African Development Bank 802 

Asian Development Fund 105,000 105,000 115,250 10,250 10% 

Asian Development Bank 106,586 106,586 100% 

International Fund for Agricultural 

Development 18,000 30,000 30,000 0 0% 

Inter-American Development Bank: 29,670 46,000 16,330 55% 

 Multilateral Investment Fund 25,000 25,000 25,000 0 0%

 Inter-American Investment Corporation 4,670 21,000 16,330 350% 

Debt Restructuring $60,000 $60,000 $70,000 $10,000 16.7% 

Bilateral Debt Relief/HIPC Trust Fund 40,000 40,000 50,000 10,000 25% 

Tropical Forest Conservation Act 20,000 20,000 20,000 0 0% 

Treasury Technical Assistance $25,000 $25,000 $38,000 $13,000 52.0% 

Total Program Level $1,578,802 $2,128,670 $3,065,176 $936,506 44.0% 

Appropriations 

International Financial Institutions 

Treasury International Programs 

Program Summary by Appropriations Account 

(Dollars in Thousands) 

Explanation of Request 

President Obama has called for multilateral 

solutions to today’s global challenges, 

including economic governance, development, 

climate change, food security, and 

transnational threats. Treasury is leading efforts 

to support the President’s agenda through 

specific Department activities: 

•	 Economic governance: Treasury leads 

the Administration’s engagement with 

the International Financial Institutions 

(IFIs) to address critical issues 

regarding economic governance and 

multilateral support of broader 

economic priorities. 

•	 Development: Treasury also leads the 

Administration’s engagement with the 

Multilateral Development Banks 

(MDBs) to address development 

priorities. 

•	 Climate change: Treasury is 

supporting the President’s recent 

climate commitments in Copenhagen 

through funding of international efforts 

to combat global climate change and to 

help developing countries respond to 

its impacts. 

•	 Food security: As part of the 

President’s commitment to address 

global hunger and food security, 

Treasury has designed and launched a 

new multi-donor trust fund to provide 

Department of the Treasury - Budget in Brief FY 2011 Page 113
(Dollars in Thousands) 

International Financial Technical Debt 

Institutions Assistance Restructuring Total 

FY 2009 Enacted $1,493,802 $25,000 $60,000 $1,578,802 

FY 2010 Enacted $2,043,670 $25,000 $60,000 $2,128,670 

Increases/(Decreases) 

FY 2011 President's Budget Request $2,957,176 

913,506 13,000 10,000 936,506 

$38,000 $70,000 $3,065,176 

financial support for poor countries 

committed to addressing their internal 

food security needs. 

•	 Transnational threats: Treasury’s Office 

of Technical Assistance helps 

strengthen economic capacity of 

countries around the world, including 

many countries of vital national 

security interest to the United States. 

Total resources required to support Treasury 

International Assistance Programs for FY 2011 

are $3.065 billion, including contributions to 

the International Financial Institutions (IFIs) of 

$2.957 billion, $70.0 million for Debt 

Restructuring, and $38.0 million for Treasury's 

International Affairs Technical Assistance 

Programs. 

International Programs FY 2011 Budget Highlights 

Purpose of Program 

Treasury’s International Programs promote 

economic growth and poverty reduction in 

developing countries through U.S. 

participation in the multilateral development 

banks (MDBs), provide debt relief to poor and 

heavily indebted countries that have 

committed to economic reform and poverty 

reduction, and promote economic growth by 

working directly with governments around the 

world to help them strengthen capacity of their 

core institutions. 

FY 2011 Program Request 

International Financial Institutions (IFIs) 

($2,957,175,848) 

The FY 2011 Budget requests $2.957 billion for 

U.S. contributions to the multilateral 

development banks (MDBs), which 

include$1.838 billion for scheduled annual 

commitments to these institutions and $76 

million to pay a portion of outstanding U.S. 

arrears, which total just under $1 billion. The 

budget also includes $635 million towards 

international efforts to combat global climate 

change and to help developing countries 

respond to its impacts and $408.4 million 

towards a new multi-donor trust fund designed 

to help developing countries improve food 

security and reduce poverty, which will allow 

for an initial contribution of $475 million 

when combined with 2010 funds. 

International Development Association 

(IDA) ($1,285,000,000) 

The request of $1.285 billion includes the 

third installment of the U.S. three-year 

commitment to the IDA15 replenishment 

($1.235 billion) and $50 million to pay 

down a portion of arrears to IDA. Through 

IDA, the World Bank supports 78 of the 

world’s poorest countries by providing the 

largest source of interest-free loans, grants, 

and debt relief of any multilateral 

development institution. Major IDA15 

initiatives and policy reforms include: an 

expanded results measurement system; 

Department of the Treasury - Budget in Brief FY 2011 Page 114
improvements to World Bank engagement in 

fragile and post-conflict states; measures to 

further improve debt sustainability; and 

progress towards greater transparency and 

accountability at the institution. IDA funding is 

also necessary to meet the U.S. share of the 

costs of multilateral debt relief for the poorest 

indebted countries through the Multilateral 

Debt Relief Initiative (MDRI). 

Multilateral Food Security Fund 

($408,400,000) 

The request provides $408.4 million for the 

Multilateral Food Security Fund, also known as 

the Global Agriculture and Food Security 

Program (GAFSP), a new multi-donor trust 

fund designed to help developing countries 

improve food security and reduce poverty. An 

important component of the Administration’s 

Global Hunger and Food Security Initiative, the 

fund will be administered by the World Bank 

and was developed through the leadership of 

the United States, Canada and Spain. GAFSP 

will make medium to long-term investments 

though a variety of international financial 

institutions in five key areas critical to a 

comprehensive approach to food security: 

raising agricultural productivity; linking 

farmers to markets; reducing risk and 

vulnerability; improving non-farm rural 

livelihoods; and technical assistance, institution 

building, and capacity development. GAFSP 

will offer financing through a public sector and 

a private sector window; for both windows, 

priority will be given to proposals that leverage 

resources from other domestic and international 

partners, both public and private. GAFSP will 

leverage the resources and expertise of the 

World Bank, International Fund for 

Agricultural Development (IFAD) and other 

multilateral institutions that complement and 

reinforce the efforts of our bilateral food 

security programs. 

Climate Investment Funds (CIF) 

($635,000,000) 

The request provides $635 million for the 

Climate Investment Funds, two multilateral 

trust funds. $400 million is for the Clean 

Technology Fund (CTF), an effort to reduce 

the growth of greenhouse gas emissions in 

emerging economies by catalyzing largescale private sector investments through 

financing the additional costs of 

commercially available cleaner technologies 

over dirtier, cheaper alternatives. The 

remaining $235 million is for the Strategic 

Climate Fund (SCF) suite of three programs 

which pilot innovative approaches and 

scaled-up activities aimed at specific 

climate change-related challenges in 

developing countries. The SCF is 

comprised of the Pilot Program for Climate 

Resilience (PPCR), the Forest Investment 

Program (FIP), and the Program for 

Scaling-Up Renewable Energy in Low 

Income Countries (SREP). The PPCR will 

help very poor countries better prepare for 

the unavoidable effects of climate change 

through innovative development plans, 

strategies, and projects. The FIP will 

reduce deforestation in developing countries 

through improved governance and forest 

management, and by addressing the drivers 

of deforestation. The SREP will 

demonstrate the economic, social and 

environmental viability of low carbon 

development pathways in very poor 

countries. 

Global Environment Facility (GEF) 

($175,000,000) 

In 2010, donor governments will agree to 

the fifth replenishment of the GEF. The 

total amount for the fifth replenishment is 

expected by March 2010. The U.S. 

commitment will total $680 million, to be 

paid in four equal installments of $170 

million from FY 2011 through FY 2014. 

During the replenishment negotiations, the 

Department of the Treasury - Budget in Brief FY 2011 Page 115
United States has so far achieved important 

policy reforms to improve the GEF's overall 

effectiveness, particularly with regard to 

country owned business plans for GEF funding 

and resource allocation. The FY 2011 request 

includes $170 million for the first installment of 

GEF5 and $5 million for a portion of U.S. 

arrears to the GEF, for a total request of $175 

million. 

African Development Fund (AfDF) 

($155,940,000) 

The request of $155.9 million includes the third 

of three installments of the U.S. contribution to 

the AfDF11 replenishment. The African 

Development Fund (AfDF) is the African 

Development Bank’s concessional window and 

serves 40 of the poorest countries in Africa, by 

providing highly concessional loans, grants, and 

debt relief. Funding of the U.S. AfDF11 

commitment is critical to ensuring support for 

the poorest African countries to counter the 

impact of the global financial crisis. U.S. 

financing also supports the implementation of 

reforms championed by the United States 

during the replenishment process, such as the 

performance-based allocation system and the 

results-measuring system. AfDF11 also created 

a Fragile States Facility to provide additional 

assistance to post-conflict countries to 

accelerate the transition process from conflict 

and decline to stability and growth. In addition, 

AfDF funding is necessary to meet the U.S. 

share of the costs of multilateral debt relief for 

the poorest indebted countries through the 

MDRI. 

Asian Development Fund (AsDF) 

($115,250,000) 

The request of $115.3 million is for the second 

of four installments of the U.S. contribution to 

the ninth replenishment of the Asian 

Development Fund (AsDF10). The AsDF, the 

Asian Development Bank’s (AsDB) 

concessional window, provides development 

financing for investments in infrastructure, 

health, education, environment, and privatesector development, as well as policy advice 

to the poorest countries in the Asia-Pacific 

region. In the AsDF10 Agreement, the 

United States secured a number of 

important policy reforms, including: the 

completion of a grants framework through 

which grants will comprise 25 percent or 

more of assistance; a significant 

improvement in the results framework 

governing AsDF and AsDB operations; 

strengthened anti-corruption practices and 

safeguards; and increased transparency. 

Asian Development Bank (AsDB) 

($106,585,848) 

The request of $106.6 million is the first of 

five paid-in capital subscriptions of the U.S. 

subscription to the fifth General Capital 

Increase (GCI V) of the Asian Development 

Bank. The GCI increases the capitalization 

of the AsDB’s Ordinary Capital Resources 

(OCR) window, which provides marketlinked financing to developing member 

countries of the AsDB. The OCR, 

considered the hard-loan window, provides 

development financing for investments in 

infrastructure, energy, transport, 

environment, private-sector development, 

and public sector management. In the GCI 

V agreement, the United States secured a 

number of important policy reforms, 

including: improvements in the 

environmental safeguards, strengthening 

risk management and anti-corruption, and 

increasing resources to the poorest. 

International Fund for Agricultural 

Development (IFAD) ($30,000,000) 

The request of $30 million will cover the 

second of three payments of the U.S. 

contribution to the International Fund for 

Agricultural Development’s (IFAD’s) 

eighth replenishment, which the U.S. 

committed to in February 2009. IFAD is 

the only multilateral development 

Department of the Treasury - Budget in Brief FY 2011 Page 116
institution focused exclusively on reducing 

rural poverty and hunger through improving 

agricultural productivity. Because of its 

mission and expertise, IFAD plays a key role in 

supporting the renewed focus on agricultural 

development and food security. IFAD8 makes 

key commitments to a number of U.S. 

priorities: a strengthened results measurement 

framework; human resources reform; a renewed 

performance-based allocation system; and a 

commitment to developing a comprehensive 

environmental strategy that will help poor 

farmers adapt to the likely impacts of climate 

change. 

Multilateral Investment Fund (MIF) 

($25,000,000) 

The request of $25.0 million is for the fourth 

installment of the U.S. contribution to the first 

replenishment of the MIF, which the U.S. 

committed to in April 2005. The MIF works 

directly with private sector and public sector 

partners to strengthen the environment for 

business, build the capabilities and skills 

standards of the workforce, and broaden the 

economic participation of smaller enterprises. 

MIF projects incorporate a significant degree of 

counterpart financing, with a goal of having 

50% of project costs financed by local 

counterpart contributions. The MIF is 

providing highly-focused support for private 

sector development in Latin America and the 

Caribbean through the provision of technical 

assistance on regulatory and legal reforms, retraining of the workforce, and increasing 

productivity and competitiveness of small 

businesses and micro-enterprises. 

Inter-American Investment Corporation (IIC) 

($21,000,000) 

The request of $21.0 million will clear 50% of 

current U.S. arrears to the IIC. These arrears 

must be paid by 2010 in order for the United 

States to not lose capital shares at the IIC. Any 

shares lost by the United States likely would be 

purchased by other shareholder countries. The 

IIC promotes private small and mediumsize enterprises (SMEs) in Latin America 

and the Caribbean. Through a combination 

of direct loans to and equity investments in 

individual companies, lending through 

private local banks, and participation in 

regional equity funds, the IIC helps SMEs 

obtain affordable capital to start up, expand, 

or modernize their operations. 

Debt Restructuring ($70,000,000 from 

direct appropriations) 

The request of $70 million is for the cost of 

debt restructuring programs, including 

bilateral Heavily Indebted Poor Countries 

(HIPC) Initiative debt reduction, the HIPC 

Trust Fund, and the Tropical Forest 

Conservation Act (TFCA). The enhanced 

HIPC Initiative was launched to provide 

deeper, broader, and faster debt reduction 

for the poor, heavily-indebted countries that 

have made a real commitment to economic 

reform and poverty reduction. For the 

poorest and most heavily indebted 

countries, the United States will continue 

support for bilateral debt relief though the 

Paris Club of official creditors and the 

enhanced HIPC Initiative. The request 

includes a total of $50 million in funding 

for the cost of debt restructuring programs, 

including bilateral HIPC and poorest 

country debt reduction and the HIPC Trust 

Fund. Under the enhanced HIPC Initiative, 

funding is currently needed to help satisfy 

the $75.4 million outstanding U.S. pledge to 

the HIPC Trust Fund for debt relief from 

the regional development banks. Twenty 

million dollars is requested for the TFCA 

which authorizes debt relief for low and 

middle-income countries to support 

conservation of tropical forests. Under the 

program, treated debt is “redirected” to 

enable a forest fund in the beneficiary 

country to make grants to local NGOs and 

other entities engaged in forest 

conservation. The United States uses 

Department of the Treasury - Budget in Brief FY 2011 Page 117
appropriated funds to pay for the budget cost of 

this debt reduction/redirection. 

International Affairs Technical Assistance 

($38,000,000 from direct appropriations) 

The request for Treasury’s Office of Technical 

Assistance (OTA) is for the International 

Affairs Technical Assistance Program, which 

provides highly experienced financial advisors 

to reform-minded developing countries, 

transitional economies, and nations recovering 

from conflict. The program supports economic 

policy and financial management reforms, 

focusing on five core areas: revenue policy and 

administration; government debt issuance 

and management; budget and financial 

accountability; banking and financial 

institutions; and economic crimes. The FY 

2011 budget request will support approximately 

80 technical assistance projects worldwide. The 

proposed investment acknowledges OTA’s 

critical role in the Administration’s 

international development and security agenda 

and will allow OTA to pursue several important 

objectives in FY 2011. OTA will broaden and 

deepen its engagements in support of U.S. and 

Treasury priorities and continue building 

capacity to counter terrorist finance and 

financial crimes; encourage investment, growth 

and job creation through development of capital 

markets and infrastructure finance; and promote 

increased access to finance for small- and 

medium-sized enterprises. 

The proposed budget supports OTA’s work to 

strengthen financial infrastructure and combat 

terrorist financing in Iraq, and other countries 

of vital national security interest to the U.S. 

where long-term stability will depend on strong 

financial governance. By providing increased 

funding directly to Treasury, OTA will be wellpositioned to continue this important work and 

to respond to new and emerging national 

security challenges. 

Description of Performance 

International Financial Institutions: 

Responding to crisis and the complex 

challenges of the 21st century 

The IFIs have been “first responders” in the 

global response to the financial crisis. At 

the same time, these institutions are 

responding to increasing calls that they 

deliver public goods, such as intervention in 

fragile states and efforts to help developing 

countries mitigate or adapt to climate 

change. Full funding of the FY 2011 

request for the MDBs is necessary to help 

ensure that they can continue to serve these 

critical functions. 

In April 2009, President Obama and other 

G20 leaders called on the World Bank and 

the regional development banks to 

dramatically increase their financial support 

to the developing world. The multilateral 

development banks (MDBs) successfully 

responded with $100 billion in additional 

lending in a matter of months. This 

important financing has helped to both 

forestall further spread of the crisis and to 

mitigate the impact in hard-hit regions like 

Eastern Europe. 

In addition, the MDBs are well positioned 

to assist us in addressing complex, urgent 

challenges of the 21st century, including 

climate change, water and food scarcities 

and the risk of pandemics. For example, 

environmental lending - including climate 

change, clean energy, energy efficiency, 

natural resources management, and 

biodiversity - at the Asian Development 

Bank increased by more than 65% in each 

of the last two years, and the World Bank 

has pledged to scale up agriculture lending 

by as much as 100% over the next three 

years. 

Department of the Treasury - Budget in Brief FY 2011 Page 118
Reforms within International Financial 

Institutions 

Through U.S. leadership in the IFI 

replenishment negotiations, key policy reforms 

were initiated, reinforced and extended in the 

international financial institutions. In recent 

years, these reforms included: 

•	 Increased grant financing for the poorest 

countries at IDA, the AfDF, AsDF and 

other MDBs; 

•	 Greater commitment to transfers of IFI net 

income to support lending to the poorest 

countries; 

•	 Development of robust results-based 

management systems to incorporate 

measurable performance goals and 

demonstrate positive results on the ground; 

•	 Increased transparency and accountability; 

•	 Efforts to reduce corruption at institutional, 

project, country and regional levels. 

Results Measurement 

The MDBs have worked to develop a new 

culture dedicated to managing for development 

results. Treasury has been a strong proponent 

of this agenda, which will increase the 

accountability and effectiveness of MDB 

development efforts. We have seen substantial 

progress in recent years, with the MDBs laying 

out targets for their achievements at the project, 

country and institutional level, such that 

Treasury believes that over 90% of 2009 MDB 

projects include a framework that will be 

adequate to show the project’s development 

results. In the last year, the MDBs have taken a 

major step forward with their efforts to 

harmonize their sector-level results indicators, 

which will allow for comparison across MDBs 

of accomplishments in sectors as diverse public 

health, transportation and education. 

Transparency and Fighting Corruption 

Through U.S. leadership, the MDBs have 

continued strong efforts to improve 

transparency, including disclosure of MDB 

documents and processes, and to fight 

corruption at the project, country and 

institutional levels. For example, the World 

Bank recently revised its disclosure policy. 

This policy sets a new benchmark for 

transparency among the IFIs. In addition, 

we have strongly supported the World 

Bank’s implementation of the 

recommendations made in the 2007 Volcker 

Panel Report on the Bank’s Department of 

Institutional Integrity. 

Debt Restructuring 

The Enhanced Heavily Indebted Poor 

Country (HIPC) Initiative continues to 

make more resources available to poor, 

heavily indebted countries, while providing 

a framework for growth enhancing reforms. 

Under the HIPC Initiative, 35 countries had 

demonstrated sufficient progress on 

economic reform and commitment to 

poverty reduction to reach their Decision 

Points as of the end of FY 2009. These 

countries benefit from debt relief that, 

together with MDRI, will lower their stock 

of debt by over 80%, freeing resources to 

support poverty reduction and economic 

growth. In 2008, poverty-reducing 

expenditures for the Decision Point HIPCs 

(as of FY 2009) were estimated to be over 

eight times as large as debt service 

payments, compared to only two times as 

large in 2001. 

Under the Tropical Forest Conservation Act 

(TFCA), a total of 15 agreements have been 

signed with 13 countries, generating more 

than $218 million over time for tropical 

forest conservation and providing leadingedge experience in financing of forest 

protection, which will be needed at large 

scale to address climate change. The TFCA 

debt swap mechanism has also developed a 

unique public/private partnership in which 

environmental NGOs provide additional 

funds for debt reduction, increasing the size 

of individual agreements, and contributing 

Department of the Treasury - Budget in Brief FY 2011 Page 119
 

additional expertise in the management of 

resulting programs. Nine of the 15 TFCA 

agreements have utilized this public/private 

mechanism. 

Technical Assistance 

The Office of Technical Assistance (OTA) 

provides financial technical assistance 

worldwide to build the financial management 

capacity of developing and transition countries. 

OTA partners with finance ministries, central 

banks and law enforcement agencies to build 

the essential financial functions of well-run 

states: systems to collect revenues, implement 

national budgets, manage public debt, oversee 

financial institutions, and combat economic 

crime. OTA’s work complements assistance 

provided by the international financial 

institutions and US bilateral assistance. By 

strengthening the financial management 

capacity of countries receiving, for example, 

debt relief, OTA contributes to the broader goal 

of aid effectiveness. Finally, OTA assistance 

indirectly supports the private sector by 

strengthening the financial underpinnings of 

public services, such as power and 

infrastructure, upon which private companies 

depend. 

Examples of innovative programming by OTA 

in FY 2009: 

In Guatemala, OTA provides a broad range of 

financial technical assistance to strengthen the 

transparency of budget formulation and 

execution, to improve the management of 

government debt, and to increase revenue 

collection. Debt advisors work to create a new 

public debt law, to introduce standardized 

fungible dematerialized government securities, 

enhance auction calendars, eliminate tax 

distortions, develop strategies for retail 

distribution of government securities, and 

strengthen government and central bank 

communications with the market. 

In 2009, OTA created the Infrastructure 

Finance Experts Corps (IFEC), an initiative 

focused on strengthening the capacity of 

Latin American and Caribbean governments 

to implement Public-Private Partnerships 

and other means of financing infrastructure 

projects. Specialists from OTA, in 

collaboration with the Government of Chile, 

provide technical assistance to promote 

well-designed and fiscally sound 

infrastructure projects. The Government of 

Costa Rica is hosting the pilot project for 

the IFEC program, which is focused on 

helping the Ministry of Finance, along with 

the Ministry of Public Works and 

Transportation and the National 

Concessions Council, to finance a major 

international airport, a primary commercial 

seaport, and light rail and toll road projects 

in the capital San Jose. 

OTA’s Economic Crimes efforts in 

Afghanistan have included developing a 

financial intelligence unit (FIU) staffed and 

trained to develop, populate, and access a 

database that contains reports on large cash 

transactions and suspicious activities from 

financial service providers. FIU analysis of 

information in this database supports and is 

shared with law enforcement in Afghanistan 

and strengthens the regulatory regime to 

conform to international norms for 

preventing money laundering and terrorist 

financing. OTA efforts in Afghanistan have 

resulted in greater regional and international 

information exchange and cooperation 

including membership in key anti-money 

laundering groups, an observership by a 

main financial task force, and Memoranda 

of Understanding signed with over one 

dozen financial intelligence units around the 

world. 

Department of the Treasury - Budget in Brief FY 2011 Page 120
___________________________________ 

Summary of FY 2011 Appropriations Language 

Below is a summary of appropriations language changes in the bills being marked up by 

the House and Senate Appropriations Committees. Please note that brackets indicate 

which material will be deleted, and italics 

indicate which material will be inserted. 

Departmental Offices 

Salaries and Expenses 

(Including Transfer of Funds) 

For necessary expenses of the Departmental 

Offices including operation and maintenance 

of the Treasury Building and Annex; 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, [$304,888,000, of which not to 

exceed $21,983,000 is for executive direction 

program activities; not to exceed $47,249,000 

is for economic policies and programs 

activities, including $1,000,000 that shall be 

transferred to the National Academy of 

Sciences for a study by the Board on 

Mathematical Sciences and Their Applications 

on the long-term economic effects of the aging 

population in the United States, to remain 

available until September 30, 2011, and 

$1,500,000 that shall be transferred to the 

National Academy of Sciences for a carbon 

audit of the tax code as authorized in section 

117 of the Energy Improvement and 

Extension Act of 2008 (Public Law 110-343), 

to remain available until September 30, 2011; 

not to exceed $48,580,000 is for financial 

policies and programs activities; not to exceed 

$64,611,000 is for terrorism and financial 

intelligence activities; not to exceed 

$22,679,000 is for Treasury-wide management policies and programs activities; and 

not to exceed $99,786,000 is for 

administration programs activities: Provided, 

That the Secretary of the Treasury is 

authorized to transfer funds appropriated for 

any program activity of the Departmental 

Offices to any other program activity of the 

Departmental Offices upon notification to the 

House and Senate Committees on 

Appropriations: Provided further, That no 

appropriation for any program activity shall be 

increased or decreased by more than 4 percent 

by all such transfers: Provided further, That 

any change in funding greater than 4 percent 

shall be submitted for approval to the House 

and Senate Committees on Appropriations] 

$346,401,000: Provided [further], That 

notwithstanding any other provision of law, of 

the amount appropriated under this heading, 

up to $1,000,000, may be contributed to the 

Global Forum on Transparency and Exchange 

of Information for Tax Purposes, a Part II 

Program of the Organization for Economic 

Cooperation and Development, to cover the 

cost assessed by that organization for 

Treasury's participation therein: Provided 

further, That of the amount appropriated under 

this heading, not to exceed $3,000,000, to 

remain available until September 30, [2011] 

2012, is for information technology 

modernization requirements; not to exceed 

$200,000 is for official reception and 

representation expenses; $400,000 is to 

support increased international representation commitments of the Secretary; and 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 his certificate: 

Provided further, That of the amount 

appropriated under this heading, $6,787,000, 

to remain available until September 30, [2011] 

2012, is for the Treasury-wide Financial 

Statement Audit and Internal Control 

Program, of which such amounts as may be 

necessary may be transferred to accounts of 

the Department's offices and bureaus to 

Department of the Treasury - Budget in Brief FY 2011 Page 121
___________________________________ 

___________________________________ 

___________________________________ 

conduct audits: Provided further, That this 

transfer authority shall be in addition to any 

other provided in this Act: Provided further, 

That of the amount appropriated under this 

heading, $500,000, to remain available until 

September 30, [2011] 2012, is for secure 

space requirements: Provided further, That of 

the amount appropriated under this heading, 

$1,100,000 to remain available until 

September 30, 2012, is for salary and benefits 

for hiring of personnel whose work will 

require completion of a security clearance 

investigation in order to perform highly 

classified work to further the activities of the 

Office of Terrorism and Financial 

Intelligence: Provided further, That of the 

amount appropriated under this heading, up to 

$3,400,000, to remain available until 

September 30, [2012] 2013, is to develop and 

implement programs within the Office of 

Critical Infrastructure Protection and 

Compliance Policy, including entering into 

cooperative agreements: Provided further, 

That of the amount appropriated under this 

heading, $3,000,000, to remain available until 

September 30, [2012] 2013, is for 

modernizing the Office of Debt Management's 

information technology. (Department of the 

Treasury Appropriations Act, 2010.) 

Department-wide Systems and Capital 

Investments Programs 

(Including Transfer of Funds) 

For development and acquisition of automatic 

data processing equipment, soft-ware, and 

services for the Department of the Treasury, 

[$9,544,000] $22,000,000, to remain available 

until September 30, [2012] 2013: Provided, 

[That $4,544,000 is for repairs to the Treasury 

Annex Building: Provided further,] 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'']. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Office of Inspector General 

Salaries and Expenses 

For necessary expenses of the Office of 

Inspector General in carrying out the 

provisions of the Inspector General Act of 

1978, as amended, $30,269,000, of which not 

to exceed $2,000,000 for official travel 

expenses, including hire of passenger motor 

vehicles; and of which not to exceed $100,000 

for unforeseen emergencies of a confidential 

nature, to be allocated and expended under the 

direction of the Inspector General of the 

Treasury [, $29,700,000, of which not to 

exceed $2,500 shall be available for official 

reception and representation expenses]. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Treasury Inspector General for Tax 

Administration 

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 (not to 

exceed 150 for replacement only for policetype use) and hire of passenger motor vehicles 

(31 U.S.C. 1343(b)); services authorized by 5 

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

determined by the Inspector General for Tax 

Administration; [$152,000,000] $155,452,000, 

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 

Department of the Treasury - Budget in Brief FY 2011 Page 122
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___________________________________ 

direction of the Inspector General for Tax 

Admin-istration [; and of which not to exceed 

$1,500 shall be available for official reception 

and representation expenses]. (Department of 

the Treasury Appropriations Act, 2010.) 

Treasury Forfeiture Fund 

[(Rescission] (Cancellation) 

Of the unobligated balances available under 

this heading, [$90,000,000] $62,000,000 are 

[rescinded] hereby permanently cancelled. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Community Development Financial 

Institutions Fund 

Program Account 

[(Including Transfer of Funds)] 

To carry out the Community Development 

Banking and Financial Institutions Act of 

1994 (Public Law 103-325), including 

services authorized by 5 U.S.C. 3109, but at 

rates for individuals not to exceed the per 

diem rate equivalent to the rate for ES-3, 

[notwithstanding sections 4707(d) and 4707(e) 

of title 12, United States Code, $166,750,000] 

$250,000,000, to remain available until 

September 30, [2011] 2012; of which 

$12,000,000 shall be for financial assistance, 

technical assistance, training and outreach 

programs, under sections 105 through 109 of 

the Community Development Banking and 

Financial Institutions Act of 1994 (12 U.S.C. 

4704-4708), designed to benefit Native 

[American, Native Hawaiian, and Alaskan 

Native] communities and provided primarily 

through qualified community development 

lender organizations with experience and 

expertise in community development banking 

and lending in Indian country, Native 

American organizations, tribes and tribal 

organizations and other suitable providers; of 

which [$1,000,000 shall be available for the 

pilot project grant program under section 

1132(d) of division A of the Housing and 

Economic Recovery Act of 2008 (Public Law 

110-289); of which $3,150,000 shall be for an 

additional pilot project grant to an eligible 

organization located in the State of Hawaii for 

financial education and pre-home ownership 

counseling as authorized in section 1132(d) of 

division A of the Housing and Economic 

Recovery Act of 2008 (Public Law 110-289), 

and], notwithstanding section 4707(d), up to 

$25,000,000 shall be for a Healthy Food 

Financing Initiative to provide grants and 

loans to community development financial 

institutions for the purpose of offering 

affordable financing and technical assistance 

to expand the availability of healthy food 

options in distressed communities; of which 

[up to $18,000,000 may] $50,000,000 shall 

be for financial assistance, technical 

assistance, training and outreach programs to 

com-munity development financial 

institutions, other financial service 

organizations, non-profit organizations, 

states, and local governments, and 

partnerships of such entities (or a financial 

service organization designated as a fiscal 

agent on behalf of such entity) for the purpose 

of seeding local initiatives to establish bank 

accounts for low and moderate-income 

persons who do not have bank accounts with 

financial institutions, and providing 

appropriate financial products and services to 

underbanked persons, and for the purpose of 

encouraging such persons to enter into formal 

banking relationships and access financial 

services and development services, and to 

evaluate the results of such efforts; of which 

up to $23,000,000 may be used for 

administrative expenses, including 

administration of the New Markets Tax 

Credit; of which up to $10,200,000 may be 

used for the cost of direct loans; and of which 

up to $250,000 may be used for administrative 

expenses to carry out the direct loan program: 

Provided, That the cost of direct loans, 

including the cost of modifying such loans, 

shall be as defined in section 502 of the 

Department of the Treasury - Budget in Brief FY 2011 Page 123
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___________________________________ 

Congressional Budget Act of 1974: Provided 

further, That these funds are available to 

subsidize gross obligations for the principal 

amount of direct loans not to exceed 

$25,000,000. [For an additional amount to be 

transferred to the ``Capital Magnet Fund'', as 

authorized by section 1339 of the Federal 

Housing Enterprises Financial Safety and 

Soundness Act of 1992 (12 U.S.C. 1301 et 

seq.), as amended by section 1131 of the 

Housing and Economic Recovery Act of 2008 

(Public Law 110-289), to support financing 

for affordable housing and economic 

development projects, $80,000,000, to remain 

available until September 30, 2011: Provided, 

That, for fiscal year 2010, section 1339(h)(3) 

of the Federal Housing Enterprises Financial 

Safety and Soundness Act of 1992, as 

amended by section 1131 of the Housing and 

Economic Recovery Act of 2008 (Public Law 

110-289), shall be applied by substituting the 

term “at least 10 times the grant amount or 

such other amount that the Secretary may 

require” for “at least 10 times the grant 

amount''.] (Department of the Treasury 

Appropriations Act, 2010.) 

Special Inspector General for the Troubled 

Asset Relief Program 

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), as amended, [$23,300,000] $49,600,000. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Financial Crimes Enforcement Network 

Salaries and Expenses 

For necessary expenses of the Financial 

Crimes Enforcement Network, including hire 

of passenger motor vehicles; travel and 

training expenses, including for course 

development, 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; not to 

exceed $14,000 for official reception and 

representation expenses; and for assistance to 

Federal law enforcement agencies, with or 

without reimbursement, [$111,010,000] 

$100,419,000, of which not to exceed 

$26,085,000 shall remain available until 

September 30, [2012] 2013; and of which 

[$9,316,000] $9,268,000 shall remain 

available until September 30, [2011] 2012: 

Provided, That funds appropriated in this 

account may be used to procure personal 

services contracts. (Department of the 

Treasury Appropriations Act, 2010.) 

Financial Management Service 

___________________________________S 

alaries and Expenses 

For necessary expenses of the Financial 

Management Service, [$244,132,000] 

$235,253,000 of which not to exceed 

$9,220,000 shall remain available until 

September 30, [2012] 2013, for information 

systems modernization initiatives; and of 

which not to exceed $2,500 shall be avail-able 

for official reception and representation 

expenses. (Department of the Treasury 

Appropriations Act, 2010.) 

Alcohol and Tobacco Tax and Trade 

Bureau 

Salaries and Expenses 

For necessary expenses of carrying out section 

1111 of the Homeland Security Act of 2002, 

including hire of passenger motor vehicles, 

[$103,000,000] $106,168,000; of which not to 

exceed $5,500,000 for administrative 

expenses related to implementation of the fees 

authorized by the Federal Alcohol 

Administration Act (27 U.S.C. 202), as 

amended by this Act, to remain available until 

September 30, 2012; not to exceed $6,000 for 

official reception and representation expenses; 

Department of the Treasury - Budget in Brief FY 2011 Page 124
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not to exceed $50,000 for cooperative research 

and development programs for laboratory services; and provision of laboratory assistance 

to State and local agencies with or without 

reimbursement: Provided, That [of the amount 

appropriated under this heading, $3,000,000, 

to remain available until September 30, 2011, 

shall be for the hiring, training, and equipping 

of special agents and related support 

personnel] the sum herein appropriated from 

the general fund shall be reduced as offsetting 

collections assessed and collected pursuant to 

the Federal Alcohol Administration Act (27 

U.S.C. 201 et seq.), as amended by this Act, 

are received during fiscal year 2011, so as to 

result in a fiscal year 2011 appropriation from 

the general fund estimated at $0: Provided 

further, That any amount received in excess of 

$106,168,000 in fiscal year 2011 shall be 

available only to the extent provided in 

subsequent appropriations acts. 

(Department of the Treasury Appropriations 

Act, 2010.) 

United States Mint 

Public Enterprise Fund 

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. The aggregate 

amount of new liabilities and obligations 

incurred during fiscal year [2010] 2011 under 

such section 5136 for circulating coinage and 

protective service capital investments of the 

United States Mint shall not exceed 

[$26,700,000] $25,000,000. (Department of 

the Treasury Appropriations Act, 2010.) 

Bureau of the Public Debt 

Administering the Public Debt 

For necessary expenses connected with any 

public-debt issues of the United States, 

[$192,244,000] $185,985,000, of which not to 

exceed $2,500 shall be available for official 

reception and representation expenses, and of 

which not to exceed $2,000,000 shall remain 

available until September 30, [2012] 2013, for 

systems modernization: Provided, That the 

sum appropriated herein from the general fund 

for fiscal year [2010] 2011 shall be reduced by 

not more than $10,000,000 as definitive 

security issue fees and Legacy Treasury Direct 

Investor Account Maintenance fees are 

collected, so as to result in a final fiscal year 

[2010] 2011appropriation from the general 

fund estimated at [$182,244,000] 

$175,985,000. In addition, [$90,000] 

$110,000 to be derived from the Oil Spill 

Liability Trust Fund to reimburse the Bureau 

for administrative and personnel expenses for 

financial management of the Fund, as 

authorized by section 1012 of Public Law 

101-380. (Department of the Treasury 

Appropriations Act, 2010.) 

Internal Revenue Service 

Taxpayer Services 

(Including Transfer of Funds) 

For necessary expenses of the Internal 

Revenue Service to provide taxpayer services, 

including pre-filing 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, 

[$2,278,830,000] $2,321,975,000, of which 

not less than [$6,100,000] $5,100,000 shall be 

for the Tax Counseling for the Elderly 

Program, of which not less than [$10,000,000] 

$9,500,000 shall be available for low-income 

taxpayer clinic grants, of which not less than 

[$12,000,000] $8,000,000, to remain available 

until September 30, [2011] 2012, shall be 

available for a Community Volunteer Income 

Tax Assistance matching grants 

[demonstration] program for tax return 

Department of the Treasury - Budget in Brief FY 2011 Page 125
preparation assistance, and of which [not less 

than $205,954,000 shall be available for 

operating expenses of the Taxpayer Advocate 

Service] up to $6,000,000 may be transferred 

as necessary from this account to "Health 

Insurance Tax Credit Administration" upon 

advance notification of the Committees on 

Appropriations: Provided, That this transfer 

authority shall be in addition to any other 

transfer authority provided in this Act. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Enforcement 

(Including Transfer of Funds) 

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 (for police-type use, not to exceed 

850) and hire passenger motor vehicles (31 

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, 

[$4,904,000,000] $5,007,400,000, of which 

not less than [$59,206,000] $60,257,000 shall 

be for the Interagency Crime and Drug 

Enforcement program[; and of which not to 

exceed $126,500 shall be for official reception 

and representation expenses associated with 

hosting the Leeds Castle Meeting in the 

United States during 2010]: Provided, That up 

to $10,000,000 may be transferred as 

necessary from this account to “Operations 

Support” solely for the purposes of the 

Interagency Crime and Drug Enforcement 

program: Provided further, That this transfer 

authority shall be in addition to any other 

transfer authority provided in this Act. In 

addition to amounts made available above, 

[$600,000,000] $790,000,000 shall be made 

available for additional and/or enhanced tax 

enforcement activities. (Department of the 

Treasury Appropriations Act, 2010.) 

Health Insurance Tax Credit 

Administration 

For expenses necessary to implement the 

health insurance tax credit included in the 

Trade Act of 2002 (Public Law 107-210), 

[$15,512,000] $18,987,000. (Department of 

the Treasury Appropriations Act, 2010.) 

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 IRS-wide 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)); 

and other services as authorized by 5 U.S.C. 

3109, at such rates as may be determined by 

the Commissioner; [$4,083,884,000] 

$4,108,000,000, of which up to $75,000,000 

shall remain available until September 30, 

[2011] 2012, for information technology 

support; of which up to $65,000,000 shall 

remain available until expended for 

acquisition of real property, equipment, 

construction and renovation of facilities; of 

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

available until September 30, [2012] 2013, for 

research; of which not [less than] to exceed 

$2,000,000 shall be for the Internal Revenue 

Service Oversight Board; of which not to 

exceed $25,000 shall be for official reception 

and representation[; and of which 

$290,000,000 shall be made available to 

support enhanced tax enforcement activities]: 

Provided, That of the amounts provided under 

this heading, such sums as are necessary shall 

be available to fully support tax enforcement 

[and enhanced tax enforcement] activities, 

Department of the Treasury - Budget in Brief FY 2011 Page 126
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including not less than $325,000,000 to 

support additional and/or enhanced tax 

enforcement activities. 

(Department of the Treasury Appropriations 

Act, 2010.) 

Business Systems Modernization 

For necessary expenses of the Internal 

Revenue Service's business systems 

modernization program, [$263,897,000] 

$386,908,000, to remain available until 

September 30, [2012] 2013, 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, with the exception of labor 

costs, none of these funds may be obligated 

until the Internal Revenue Service submits to 

the Committees on Appropriations [, and such 

Committees ap-prove,] a plan for expenditure 

that: (1) meets the capital planning and 

investment control review requirements 

established by the Office of Management and 

Budget, including Circular A-11; (2) complies 

with the Internal Revenue Service's enterprise 

architecture, including the modernization 

blueprint; (3) conforms with the Internal 

Revenue Service's enterprise life cycle 

methodology; (4) is approved by the Internal 

Revenue Service, the Department of the 

Treasury, and the Office of Management and 

Budget; (5) has been [reviewed] received by 

the Government Accountability Office; and 

(6) complies with the acquisition rules, 

requirements, guidelines, and systems 

acquisition management practices of the 

Federal Government. (Department of the 

Treasury Appropriations Act, 2010.) 

Administrative Provisions – 

Internal Revenue Service 

(Including Transfer of Funds) 

SEC. 101. Not to exceed 5 percent of any 

appropriation made available in this Act to the 

Internal Revenue Service or not to exceed 3 

percent of appropriations under the heading 

“Enforcement” may be transferred to any 

other Internal Revenue Service appropriation 

upon the advance [approval] notification of 

the Committees on Appropriations. 

SEC. 102. The Internal Revenue Service shall 

maintain a training program to ensure that 

Internal Revenue Service employees are 

trained in taxpayers' rights, in dealing 

courteously with taxpayers, and in crosscultural relations. 

SEC. 103. The Internal Revenue Service shall 

institute and enforce policies and procedures 

that will safeguard the confidentiality of 

taxpayer information. 

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 the 

improvement of the Internal Revenue Service 

1-800 help line service a priority and allocate 

resources necessary to increase phone lines 

and staff to improve the Internal Revenue 

Service 1-800 help line service. 

SEC. 105. Of the funds made available by this 

Act to the Internal Revenue Service, not less 

than [$7,100,000,000] $8,235,000,000 shall be 

available only for tax enforcement[. In 

addition, of the funds made available by this 

Act to the Internal Revenue Service, and 

subject to the same terms and conditions, 

$890,000,000], of which not less than 

$1,115,000,000 shall be available for 

additional and/or enhanced tax law enforcement, to be expended subject to the periods of 

availability applicable under each account. 

Department of the Treasury - Budget in Brief FY 2011 Page 127
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[SEC. 106. None of the funds made available 

in this Act may be used to enter into, renew, 

extend, administer, implement, enforce, or 

provide oversight of any qualified tax 

collection contract (as defined in section 6306 

of the Internal Revenue Code of 1986).] 

(Department of the Treasury Appropriations 

Act, 2010.) 

Administrative Provisions—Department of 

the Treasury 

(Including Transfer of Funds) 

SEC. 107. Appropriations to the Department 

of the Treasury in this Act shall be available 

for uniforms or allowances therefor, as 

authorized by law (5 U.S.C. 5901), including 

maintenance, repairs, and cleaning; purchase 

of insurance for official motor vehicles 

operated in foreign countries; purchase of 

motor vehicles without regard to the general 

purchase price limitations for vehicles 

purchased and used overseas for the current 

fiscal year; entering into contracts with the 

Department of State for the furnishing of 

health and medical services to employees and 

their dependents serving in foreign countries; 

and services authorized by 5 U.S.C. 3109. 

SEC. 108. Not to exceed 2 percent of any 

appropriations in this Act made available to 

the Departmental Offices--Salaries and 

Expenses, Office of Inspector General, 

Financial Management Service, Alcohol and 

Tobacco Tax and Trade Bureau, Financial 

Crimes Enforcement Network, and Bureau of 

the Public Debt, may be transferred between 

such appropriations upon the advance 

[approval of] notification to the Committees 

on Appropriations: Provided, That no transfer 

may increase or decrease any such 

appropriation by more than 2 percent. 

SEC. 109. Not to exceed 2 percent of any 

appropriation made available in this Act to the 

Internal Revenue Service may be transferred 

to the Treasury Inspector General for Tax 

Administration's appropriation upon the 

advance [approval of] notification to the 

Committees on Appropriations: Provided, 

That no transfer may increase or decrease any 

such appropriation by more than 2 percent. 

SEC. 110. Of the funds available for the 

purchase of law enforcement vehicles, no 

funds may be obligated until the Secretary of 

the Treasury certifies that the purchase by the 

respective Treasury bureau is consistent with 

departmental vehicle management principles: 

Provided, That the Secretary may delegate this 

authority to the Assistant Secretary for 

Management. 

SEC. 111. None of the funds appropriated in 

this Act or otherwise available to the 

Department of the Treasury or the Bureau of 

Engraving and Printing may be used to 

redesign the $1 Federal Reserve note. 

SEC. 112. The Secretary of the Treasury may 

transfer funds from Financial Management 

Service, Salaries and Expenses to the Debt 

Collection Fund as necessary to cover the 

costs of debt collection: Provided, That such 

amounts shall be reimbursed to such salaries 

and expenses account from debt collections 

received in the Debt Collection Fund. 

SEC. 113. Section 122(g)(1) of Public Law 

105-119 (5 U.S.C. 3104 note), is further 

amended by striking “[11] 12 years” and 

inserting “[12] 13 years”. 

[SEC. 114. None of the funds appropriated or 

otherwise made available by this or any other 

Act may be used by the United States Mint to 

construct or operate any museum without the 

explicit approval of the Committees on 

Appropriations of the House of 

Representatives and the Senate, the House 

Committee on Financial Services, and the 

Senate Committee on Banking, Housing and 

Department of the Treasury - Budget in Brief FY 2011 Page 128
Urban Affairs.] 

[SEC. 115. None of the funds appropriated or 

otherwise made available by this or any other 

Act or source to the Department of the 

Treasury, the Bureau of Engraving and 

Printing, and the United States Mint, 

individually or collectively, may be used to 

consolidate any or all functions of the Bureau 

of Engraving and Printing and the United 

States Mint without the explicit approval of 

the House Committee on Financial Services; 

the Senate Committee on Banking, Housing, 

and Urban Affairs; the House Committee on 

Appropriations; and the Senate Committee on 

Appropriations.] 

SEC. [116]114. Funds appropriated by this 

Act, or made available by the transfer of funds 

in this Act, for the Department of the 

Treasury's intelligence or intelligence related 

activities are deemed to be specifically 

authorized by the Congress for purposes of 

section 504 of the National Security Act of 

1947 (50 U.S.C. 414) during fiscal year 

[2010] 2011 until the enactment of the 

Intelligence Authorization Act for Fiscal Year 

[2010] 2011. 

SEC. [117]115. Not to exceed $5,000 shall be 

made available from the Bureau of Engraving 

and Printing's Industrial Revolving Fund for 

necessary official reception and representation 

expenses. 

SEC. 116. Section 5114(c) of Title 31, United 

States Code (relating to engraving and 

printing currency and security documents), is 

amended by striking "for a period of not more 

than 4 years". 

This section refers to repealing the limit on the 

contract term for the manufacture of 

distinctive currency paper to four years and 

open up the supply of U.S. currency paper to 

increased competition. 

SEC. 117. 

(a) Section 5112 of Title 31, United States 

Code, is amended as follows: 

(1) Subsection (a)(2) is amended by striking 

"and weighs 11.34 grams". 

(2) Subsection (a)(3) is amended by striking 

"and weighs 5.67 grams". 

(3) Subsection (a)(4) is amended by striking 

"and weighs 2.268 grams". 

(4) Subsection (a)(5) is amended by striking 

"and weighs 5 grams". 

(5) Subsection (a)(6) is amended by -- 

(A) Striking "except as provided under 

subsection (c) of this section,"; and 

(B) Striking "and weighs 3.11 grams". 

(6) Subsection (b) is amended by striking the 

first, second, third, fourth, sixth, seventh, and 

eighth sentences. 

(7) Subsection (c) is amended to read as 

follows: "The Secretary shall prescribe the 

weight and the composition of the dollar, halfdollar, quarter-dollar, dime, 5-cent, and onecent coins. In addition, the Secretary shall 

consider such factors that the Secretary 

deems, in the Secretary's sole discretion, to be 

appropriate.". 

(b) Section 5113(a) of Title 31, United States 

Code, is amended by --

(1) Striking "and" and inserting after "dime", 

", 5-cent, and one-cent"; and 

(2) Striking the second and third sentences. 

This section refers to authorizing the Secretary 

of the Treasury to approve alternative coinage 

materials to mitigate the effect of high metals 

prices. 

SEC. 118. Section 3716(h)(3) of Title 31, 

United States Code, is amended by inserting ", 

other than past-due support being enforced by 

a State" after "State". 

This section refers to allowing the offset of 

federal income tax refunds to collect 

Department of the Treasury - Budget in Brief FY 2011 Page 129
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delinquent state income taxes for debtors who 

currently reside in other states. 

(Department of the Treasury Appropriations 

Act, 2010.) 

General Provisions—This Act 

SEC. 617. The Federal Alcohol 

Administration Act (27 U.S.C. 201 et seq.) is 

amended by inserting immediately after “Title 

II--Alcoholic Beverage Labeling” a new Title 

III that provides as follows: 

“Title III--ANNUAL FEES, ETC. 

“Section 301--Authority to Collect Fees. 

“Section 302--Reduced fees. 

“Section 303--Exemptions and exceptions. 

“Section 304--Administrative provisions. 

“Section 305--Definitions. 

“* * * * * 

“Annual Fees, Etc. 

“§301 AUTHORITY TO COLLECT FEES. 

“(a) GENERAL RULE.—The Secretary of the 

Treasury is authorized to collect a fee for 

servicesrendered to the regulated community 

at levels not lower than those provided in 

subsections (b), (c), and (d), to the extent 

provided in advance by an appropriations act, 

to be credited as offsetting collections to the 

Alcohol and Tobacco Tax and Trade Bureau 

Salaries and Expenses account, to fund the 

operations of the Alcohol and Tobacco Tax 

and Trade Bureau as authorized by 6 U.S.C. 

531. 

“(b) FEE CATEGORY 1.—Each of the 

following shall pay a fee of $1,000 per year in 

respect of each such premises under his 

control--

“(1) proprietors of a distilled spirits plant; 

“(2) proprietors of a bonded wine cellar; 

“(3) proprietors of a bonded wine warehouse; 

“(4) proprietors of a taxpaid wine bottling 

house; or 

“(5) proprietors of a brewery; 

“(6) manufacturers of processed tobacco. 

“(c) FEE CATEGORY 2.—Each of the 

following shall pay a fee of $500 per year--

“(1) wholesale dealers in liquor; 

“(2) wholesale dealers in beer; 

“(3) wholesale dealers in tobacco products; 

“(4) wholesale dealers in processed tobacco; 

“(5) importers of tobacco products; 

“(6) importers of processed tobacco; 

“(7) every person intending to claim eligibility 

for drawback under section 5131 of the 

Internal Revenue Code of 1986; 

“(d) FEE CATEGORY 3.—Each of the 

following shall pay a fee of $350 per year--

“(1) retail dealers in liquors; 

“(2) retail dealers in beer; 

“(3) retail dealers in tobacco products; 

“(4) except that every holder of a permit 

issued under section 5271 of the Internal 

Revenue Code of 1986, shall be subject to a 

fee of $300. 

“(e) FEE ADJUSTMENT.—The Secretary 

shall provide for automatic annual fee 

increases in accordance with the Consumer 

Price Index, and shall publish a notice of the 

fee increases in the Federal Register 60 days 

prior to their effective date. 

“§302 REDUCED FEES.— 

“(a) IN GENERAL.—Section 301(b) shall be 

applied by substituting “$500” for “$1,000” 

with respect to any person (other than one 

described in section 303(a)) the gross receipts 

of which (for the most recent taxable year 

ending before the 1st day of the taxable period 

to which the fee imposed by section 301(b) 

relates) are less than $500,000. 

“(b) CONTROLLED GROUP RULES.—All 

persons treated as 1 taxpayer under section 

5061(e)(3) of the Internal Revenue Code of 

1986 shall be treated as 1 fee payer for 

purposes of subsection (a). 

“(c) CERTAIN RULES TO APPLY.—For 

purposes of determining gross receipts under 

subsection (a), the rules contained in 

subparagraphs (B) and (C) of section 

448(c)(3) of the Internal Revenue Code of 

1986 shall apply. 

“§303. EXEMPTIONS AND EXCEPTIONS. 

“(a) EXEMPTION FOR SMALL 

Department of the Treasury - Budget in Brief FY 2011 Page 130
PRODUCERS.—Section 301(b) shall not 

apply with respect to any person who is a 

proprietor of an eligible distilled spirits plant. 

“(b) SALES BY PROPRIETORS OF 

CONTROLLED PREMISES.—No proprietor 

of a distilled spirits plant, bonded wine cellar, 

taxpaid wine bottling house, or brewery, shall 

be required to pay the fee under section 

301(c) on account of the sale at his principal 

business office as designated in writing to the 

Secretary, or at his distilled spirits plant, 

bonded wine cellar, taxpaid wine bottling 

house, or brewery, as the case may be, of 

distilled spirits, wines, or beer, which, at the 

time of sale, are stored at his distilled spirits 

plant, bonded wine cellar, taxpaid wine 

bottling house, or brewery, as the case may 

be, or had been removed from such premises 

to a taxpaid storeroom operated in connection 

therewith and are stored therein. However, no 

such proprietor shall have more than one 

place of sale, as to each distilled spirits plant, 

bonded wine cellar, taxpaid wine bottling 

house, or brewery, that shall be exempt from 

fee by reason of the sale of distilled spirits, 

wines, or beer stored at such premises (or 

removed therefrom and stored as provided in 

this section), by reason of this subsection. 

“(c) SALES BY LIQUOR STORES 

OPERATED BY STATES, POLITICAL 

SUBDIVISIONS, ETC.—No liquor store 

engaged in the business of selling to persons 

other than dealers, which is operated by a 

State, by a political subdivision of a State or 

by the District of Columbia, shall be required 

to pay any fee under this section 301(c), by 

reason of selling distilled spirits, wines, or 

beer to dealers qualified to do business as 

such in such State, subdivision, or District, if 

such State, political sub-division, or District 

has paid the applicable fee under section 

301(d)(1) and 301(d)(2) as appropriate, and if 

such State, political subdivision, or District 

has paid fee under section 301(c)(1) and 

301(c)(2) as appropriate, at its principal place 

of business. 

“(d) CASUAL SALES.— 

“(1) SALES BY CREDITORS, FIDUCIARIES, 

AND OFFICERS OF COURT.—No person 

shall be deemed to be a dealer by reason of 

the sale of distilled spirits, wines, beer or 

tobacco products which have been received by 

him as security for or in payment of a debt, or 

as an executor, administrator, or other 

fiduciary, or which have been levied on by any 

officer under order or process of any court or 

magistrate, if such distilled spirits, wines, or 

beer are sold by such person in one parcel 

only or at public auction in parcels of not less 

than 20 wine gallons, or in the case of tobacco 

products parcels of not less than 50 cartons. 

“(2) SALES BY RETIRING PARTNERS OR 

REPRESENTATIVES OF DECEASED 

PARTNERS TO INCOMING OR REMAINING 

PARTNERS.—No person shall be deemed to 

be a dealer by reason of a sale of distilled 

spirits, wines, beer or tobacco products made 

by such person as a retiring partner or the 

representative of a deceased partner to the 

incoming, remaining, or surviving partner or 

partners of a firm. 

“(3) RETURN OF LIQUORS OR TOBACCO 

PRODUCTS FOR CREDIT, REFUND, OR 

EXCHANGE.—No person shall be deemed to 

be a dealer by reason of the bona fide return 

of distilled spirits, wines, beer or tobacco 

products to the dealer from whom purchased 

(or to the successor of the vendor's business 

or line of merchandise) for credit, refund, or 

exchange. 

“(e) DEALERS MAKING SALES ON 

PURCHASER DEALER'S PREMISES.— 

“(1) WHOLESALE DEALERS IN 

LIQUORS.—No wholesale dealer in liquors 

who has paid the fee as such dealer shall 

again be required to pay a fee as such dealer 

on account of sales of wines or beer to 

wholesale or retail dealers in liquors, or to 

limited retail dealers, or of beer to wholesale 

or retail dealers in beer, consummated at the 

purchaser's place of business. 

“(2) WHOLESALE DEALERS IN BEER.—No 

Department of the Treasury - Budget in Brief FY 2011 Page 131
wholesale dealer in beer who has paid the fee 

as such a dealer shall again be required to 

pay a fee as such dealer on account of sales of 

beer to wholesale or retail dealers in liquors 

or beer, or to limited retail dealers, 

consummated at the purchaser's place of 

business. 

"(3) WHOLESALE DEALERS IN TOBACCO 

PRODUCTS OR PROCESSED TOBACCO.— 

No wholesale dealer in tobacco products or 

processed tobacco who has paid the fee as 

such dealer shall again be required to pay a 

fee as such dealer on account of sales of 

tobacco products or processed tobacco 

consummated at the purchasers place of 

business. 

“(f) SALES BY RETAIL DEALERS IN 

LIQUIDATION.—No retail dealer in liquors, 

retail dealer in beer or retail dealer in 

tobacco products, selling in liquidation his 

entire stock of liquors or tobacco products in 

one parcel or in parcels embracing not less 

than his entire stock of distilled spirits, of 

wines, of beer or of tobacco products to any 

other dealer, shall be deemed to be a 

wholesale dealer in liquors, a wholesale 

dealer in beer, or a wholesaler dealer in 

tobacco products, as the case may be, by 

reason of such sale or sales. 

“(g) SALES TO LIMITED RETAIL DEALERS 

AND SALES BY RETAIL DEALERS OF 

TOBACCO PRODUCTS.— 

“(1) RETAIL DEALERS IN LIQUORS.—No 

retail dealer in liquors who has paid the fee as 

such dealer under section 301(d) shall be 

required to pay additional fee under section 

301(c) on account of the sale at his place of 

business of distilled spirits, wines, or beer to 

limited retail dealers as defined in section 

305(d). 

“(2) RETAIL DEALERS IN BEER.—No retail 

dealer in beer who has paid the fee as such 

dealer under section 301(d) shall be required 

to pay additional fee under section 301(c) on 

account of the sale at his place of business of 

beer to limited retail dealers as defined in 

section 305(d). 

“(3) RETAIL DEALERS IN TOBACCO 

PRODUCTS.—No retail dealer in tobacco 

products who has paid the fee under section 

301(d) shall be required to an additional fee 

as a retail dealer in liquors or a retail dealer 

in beer under section 301(d). 

“(h) COORDINATION OF FEES UNDER 

SECTIONS 301(C).—No fee as a wholesale 

dealer in liquor shall be charged with respect 

to a person's activities at any place during a 

year if such person has paid the fee as a 

wholesale dealer in beer with respect to such 

place for such year. 

“(i) WHOLESALE DEALERS IN LIQUORS, 

BEER, TOBACCO PRODUCTS AND 

PROCESSED TOBACCO AND IM-PORTERS 

OF TOBACCO PRODUCTS AND 

PROCESSED TOBACCO.— 

“(1) WHOLESALE DEALERS IN LIQUORS.—No fee shall be charged as a retail 

dealer in liquor or a retailer dealer in beer on 

any dealer by reason of the selling, or offering 

for sale, of distilled spirits, wines, or beer at 

any location where such dealer is required to 

pay the fee as a wholesale dealer in liquors. 

“(2) WHOLESALE DEALERS IN BEER.—No 

fee shall be charged as a retail dealer in beer 

on any dealer by reason of the selling, or 

offering for sale, of beer at any location where 

such dealer is required to pay the fee as a 

wholesale dealer in beer. 

“(3) WHOLESALE DEALERS IN TO-BACCO 

PRODUCTS AND IMPORTER OF 

TOBACCO PRODUCTS.—No fee shall be 

charged as a retail dealer in tobacco products 

on any dealer by reason of the selling or 

offering for sale of tobacco products at any 

location where such dealer is required to pay 

the fee as a wholesale dealer in tobacco 

products or as an importer of tobacco 

products. 

“(4) IMPORTERS OF TOBACCO 

PRODUCTS AND PROCESSED TOBACCO.—No fee shall be charged as an 

importer of processed tobacco at any location 

Department of the Treasury - Budget in Brief FY 2011 Page 132
where such person is required to pay the fee 

as an importer of tobacco products. 

“(5) MANUFACTURERS OF PROCESSED 

TOBACCO AND IMPORTERS OF 

PROCESSED TOBACCO.—No fee shall be 

charted as an importer of processed tobacco 

at any location where such person is required 

to pay the fee as a manufacturer of processed 

tobacco or pay the special tax as a 

manufacturer of tobacco products under 

section 5731of the Internal Revenue Code of 

1986. 

“(j) BUSINESS CONDUCTED IN MORE 

THAN ONE LOCATION.— 

“(1) RETAIL DEALERS AT LARGE.—Any 

retail dealer in liquors or retailer dealer in 

beer whose business is such as to require him 

to travel from place to place in different States 

of the United States may, under regulations 

prescribed by the Secretary, cover his 

activities throughout the United States with 

the payment of but one fee as a retail dealer in 

liquors or as a retail dealer in beer, as the 

case may be. 

“(2) DEALERS ON TRAINS, AIRCRAFT, 

AND BOATS.—Nothing contained in this 

chapter shall prevent the payment, under such 

regulations as the Secretary may prescribe, of 

the fee by--

“(A) persons carrying on the business of retail 

dealers in liquors, retail dealers in beer or 

retail dealer in tobacco products on trains, 

aircraft, boats or other vessels, engaged in the 

business of carrying passengers; or 

“(B) persons carrying on the business of retail 

dealers in liquors, retail dealers in beer or 

retail dealers in tobacco products on boats or 

other vessels operated by them, when such 

persons operate from a fixed address in a port 

or harbor and supply exclusively boats or 

other vessels, or persons thereon, at such port 

or harbor. 

“(3) LIQUOR STORES OPERATED BY 

STATES, POLITICAL SUBDIVISIONS, 

ETC.—A State, a political subdivision of a 

State, or the District of Columbia shall not be 

required to pay more than one fee as a retail 

dealer in liquors under section 301(d) 

regardless of the number of locations at which 

such State, political subdivision, or District 

carries on business as a retail dealer in 

liquors. 

“(k)Exception for the United States--Section 

301(d)(4) shall not apply to any permit issued 

to any agency or instrumentality of the United 

States. 

“(l)Exception for certain educational 

institutions--Section 301(d)(4) shall not apply 

with respect to any scientific university, 

college of learning, or institution of scientific 

research which is issued a permit under 

section 5271 of the Internal Revenue Code of 

1986 and, with respect to any calendar year 

during which such permit is in effect, procures 

less than 25 gallons of distilled spirits free of 

tax for experimental or research use but not 

for consumption (other than organoleptic 

tests) or sale. 

“§304. ADMINISTRATIVE PROVISIONS. 

“(a) COMPUTATION AND PAYMENT OF 

THE FEES.—All fees charged under this part 

shall be paid no later than the first day of July 

in each year, or on commencing any trade or 

business on which such fee is charged. In the 

former case, the fee shall be computed for 1 

year, and in the latter case it shall be 

computed from the first day of the month in 

which the trade or business commenced, to 

and include the 30th day of June following. 

The fee shall be paid in the mode and manner 

that the Secretary shall by regulation 

prescribe. 

“(b) CONDITION PRECEDENT TO CARRY 

ON BUSINESS.—No person shall be engaged 

in or carry on any trade or business subject to 

the fee under this section until he has paid the 

fee. 

“(c) PROCEDURES.—Unless otherwise 

specified by the Secretary, rules similar to 

those in section 5733 of the Internal Revenue 

Code of 1986 shall apply with respect to fees 

assessed under this part. 

Department of the Treasury - Budget in Brief FY 2011 Page 133
“(d) APPLICABLE RULES.—The fees 

imposed by section 301(b) shall be assessed, 

collected, and paid in the same manner as 

taxes, as provided in section 6665(a) of the 

Internal Revenue Code of 1986. 

“(e) CLAIMS COLLECTION.—In addition to 

the authority in section 304(d), the unpaid fees 

that are due and owing may be collected 

pursuant to the Federal Claims Collection 

Act, 31 U.S.C. Chapter 37. 

“(f) REGULATIONS.—The Secretary may 

issue such regulations as are necessary to 

carry out this title. 

“§305. DEFINITIONS 

“(a) BREWER.—Every person who brews 

beer (except a person who produces only beer 

exempt from tax under section 5053(e) of the 

Internal Revenue Code of 1986) and every 

person who produces beer for sale shall be 

deemed a brewer. 

“(b) DEALER.—When used in sections 301 to 

305, the term “dealer” means any person who 

sells, or offers for sale, any distilled spirits, 

wines, beer, tobacco products or processed 

tobacco. 

“(c) ELIGIBLE DISTILLED SPIRITS 

PLANT.—A plant which is used to produce 

distilled spirits exclusively for fuel use and the 

production from which does not exceed 10,000 

proof gallons per year. 

“(d) LIMITED RETAIL DEALER.—When 

used in sections 301 to 305, the term `limited 

retail dealer' means any fraternal, civic, 

church, labor, charitable, benevolent, or exservicemen's organization making sales of 

distilled spirits, wine, or beer on the occasion 

of any kind of entertainment, dance, picnic, 

bazaar, or festival held by it, or any person 

making sales of distilled spirits, wine, or beer 

to the members, guests, or patrons of bona 

fide fairs, reunions, picnics, carnivals, or 

other similar outings, if such organization or 

person is not otherwise engaged in business as 

a dealer. 

“(e) RETAIL DEALER IN LIQUORS.—When 

used in sections 301 to 305, the term ‘retail 

dealer in liquor’ means any dealer, other than 

a retail dealer in beer or a limited retail 

dealer, who sells, or offers for sale, any 

distilled spirits, wines, or beer, to any person 

other than a dealer. 

“(f) RETAIL DEALER IN BEER.—When used 

in sections 301 to 305, the term ‘retail dealer 

in beer’ means any dealer, other than a 

limited retail dealer, who sells, or offers for 

sale, beer, but not distilled spirits or wines, to 

any person other than a dealer. 

“(g) WHOLESALE DEALER IN LIQUORS.— 

When used in sections 301 to 305, the term 

‘wholesale dealer in liquors’ means any 

dealer, other than a wholesale dealer in beer, 

who sells, or offers for sale, distilled spirits, 

wines, or beer, to another dealer. 

“(h) WHOLESALE DEALER IN BEER.— 

When used in sections 301 to 305, the term 

`wholesale dealer in beer' means a dealer who 

sells, or offers for sale, beer, but not distilled 

spirits or wines, to another dealer. 

“(i) WHOLESALE DEALER IN TOBACCO 

PRODUCTS.—When used in sections 301 to 

305, the term ‘wholesale dealer in tobacco 

products’ means a dealer who sells, or offers 

for sale, tobacco products to another dealer.; 

“(j) WHOLESALE DEALER IN PROCESSED 

TOBACCO.—When used in sections 301 to 

305, the term ‘wholesale dealer in processed 

tobacco’ means a dealer who sells, or offers 

for sale, processed tobacco to another dealer; 

“(k) IMPORTER OF TOBACCO 

PRODUCTS.—When used in sections 301 to 

305, the term ‘importer of tobacco products’ 

means an importer as defined within section 

5702(k) of the Internal Revenue Code of 1986 

who imports tobacco products;. 

“(l) RETAIL DEALER IN TOBACCO 

PRODUCTS.—When used in sections 301 to 

305, the term ‘retail dealer in tobacco 

products’ means any dealer who sells, or 

offers for sale, tobacco products to any person 

other than a dealer; 

“(m) MANUFACTURER OF PROCESSED 

TOBACCO.—When used in sections 301 to 

Department of the Treasury - Budget in Brief FY 2011 Page 134
305, the term ‘manufacturer of processed 

tobacco’ means a manufacturer as defined 

within section 5702(p) of the Internal Revenue 

Code of 1986; 

“(n) IMPORTER OF PROCESSED 

TOBACCO.—When used in sections 301 to 

305, the term ‘importer of processed tobacco’ 

means an importer defined within section 

5702(k) who imports processed tobacco.” 

This section refers to the implementation of 

annual Licensing and Registration Fees that 

would require members of the alcohol and 

tobacco industries to pay annual licensing and 

registration fees in order to support the 

Alcohol, Tobacco Tax and Trade Bureau’s 

core mission and continue to provide benefits 

to members of the regulated community. 

Department of the Treasury - Budget in Brief FY 2011 Page 135
Total Funding Levels for the FY 2011 President’s Budget – Treasury Chapter 

383,073 425,127 499,125 $73,998 17.4%

2,418 3,232 3,646 $414 12.8%

9 8 8 $0 0.0%

12,636 18,131 13,238 -$4,893 -27.0%

2 2 2 $0 0.0%

2,120 2,189 2,628 $439 20.1%

$4 0 0 ,2 58 $4 4 8 ,6 8 9 $518 ,6 4 7 $6 9 ,9 58 15.6%

 OTHER INTEREST: 1/ $27,740 $60,052 $62,706 $2,654 4.4%

 Subt ot al, N et Int erest $3 72 ,518 $3 8 8 ,6 3 7 $4 55,9 4 1 $6 7,3 0 4 17.3 % 

M ANDATORY ACCOUNTS:

1 104 209 $105 101.0%

200,000 0 0 $0 0.0%

19 36 25 -$11 -30.6%

279 356 297 -$59 -16.6%

40,573 3,000 0 -$3,000 -100.0%

65 0 0 $0 0.0%

151,955 4,627 0 -$4,627 -100.0%

45,461 3,295 0 -$3,295 -100.0%

2,930 3,615 2,265 -$1,350 -37.3%

1,060 3,087 4,464 $1,377 44.6%

45 44 42 -$2 -4.5%

526 442 592 $150 33.9%

-5 0 -6 -$6 0.0%

5 5 0 -$5 -100.0%

67 63 63 $0 0.0%

556 596 600 $4 0.7%

305 321 321 $0 0.0%

113 104 136 $32 30.8%

2,305 4,303 826 -$3,477 -80.8%

0 2 2 $0 0.0%

217 0 0 $0 0.0%

463 0 0 $0 0.0%

473 422 439 $17 4.0%

0 1 1 $0 0.0%

95 14 0 -$14 -100.0%

2,024 0 0 $0 0.0%

42,418 49,539 47,233 -$2,306 -4.7%

24,284 23,355 23,250 -$105 -0.4%

0 0 570 $570 0.0%

113 200 141 -$59 -29.5%

711 604 55 -$549 -90.9%

9,386 14,863 1,093 -$13,770 -92.6%

24 50 0 -$50 -100.0%

0 1,933 2,087 $154 100.0%

663 20,476 21,429 $953 4.7%

19 2,941 3,462 $521 17.7%

313 1,608 991 -$617 -38.4%

0 100 100 $0 100.0%

143 205 218 $13 6.3%

5 50 50 $0

10 0 0 $0 0.0% 

-4,500 -1,488 0 $1,488 -100.0%

0 -8,391 0 $8,391 -100.0%

-2,720 -3,092 -22 $3,070 -99.3%

0 -114,531 0 $114,531 -100.0%

-4,336 -12,254 -17,565 -$5,311 43.3%

-2,496 0 0 $0 0.0%

-2,054 -2,322 -2,379 -$57 2.5% 

- 16 ,10 6 - 14 2 ,0 78 - 19 ,9 6 6 $12 2 ,112 - 8 5.9 % 

-3 -2 -2 $0 0.0%

 Subt ot al, M A N D A TOR Y A C C OU N TS $511,515 $1,717 $9 0 ,9 8 9 $9 2 ,70 6 53 9 9 .3 % 

TOTA L, D EPA R TM EN T OF THE TR EA SU R Y $8 9 6 ,9 72 $4 0 0 ,4 72 $56 0 ,8 6 3 $16 0 ,3 9 1 4 0 .1% 

0.0% 

Apprpriations (Dollars in M illions) FY 2009 FY 2 0 10 FY 2 0 11 Increase/ Increase/ 

Enact ed Est imat e Est imat e Decrease Decrease 

A N N U A L A PPR OPR IA TION S 

IN T ER EST PA Y M EN T S:

$12 ,9 4 2 $13 ,554 $13 ,9 3 5 $381 2.8% 

 Interest on Public Debt 

 Refunding Internal Revenue Collections, Interest 

 Interest on Uninvested Funds 

 Interest Paid To Credit Financing Accounts 

 Fed. Interest Liabilities to States 

 Payment to Resolution Funding Corp 

 Subt ot al, IN TER EST PA Y M EN TS 

 Terrorism Insurance Program 

 GSE Preferred Stock Purchase Program 

 GSE M ortgage-Backed Securities Purchase Program 

 Office of Financial Stability 

 Troubled Asset Relief Program (TARP) 

 Special Inspector General for Troubled Asset Relief Program 

 Troubled Asset Relief Program Equity Purchase Program 

 Troubled Asset Relief Program Home Affordable M odification Program 

 Grants to States for Low-Income Housing Projects 

 Grants for Specified Energy Property 

 Presidential Election Campaign Fund 

 Treasury Forfeiture Fund 

 Biomass Energy Development 

 Payment to Terrestrial Wildlife Habitat Restoration Trust Fund 

 Debt Collection Special Fund (FM S) 

 Financial Agent Services 

 Federal Reserve Bank Reimbursement by --

 FM S 

 BPD 

 Claims, Judgments and Relief Acts 

 Check Forgery Insurance Fund 

 Continued Dumping and Subsidy Offset 

 Federal Financing Bank 

 Internal Revenue Collections for Puerto Rico 

 Payment of Government Losses in Shipment 

 IRS User Fees 

 Payment Where Recovery Rebate Exceeds Liability for Tax 

 Payment Where EIC Exceeds Liability for Tax 

 Payment Where Child Credit Exceeds Liability for Tax 

 Payment Where Saver's Credit Exceeds Liability for Tax 

 Payment Where Health Care Credit Exceeds Liability for Tax 

 Payment where AM T Credit Exceeds Liability for Tax 

 Payment where Tax Credit First-Time Homebuyers Exceeds 

 Payment where Certain Tax Credit Exceeds Liability for Corporate 

 Payment Where American Opportunity Credit Exceeds Liability for Tax 

 M aking Work Pay Tax Credit 

 Build American Bond Payments, Recovery Act 

 Payment Where COBRA Credit Exceeds Liability for Tax 

 Payment Where Tax Credit for Certain Government Retirees Exceeds Liability for Tax 

 IRS M iscellaneous Retained Fees 

 IRS Informant Payments 

 Private Collection Agent Program 

Offsets:

 GSE M ortgage-Backed Securities Direct Loans, Negative Subsidies 

 GSE, M ortgage-Backed Securities Direct Loans, Downward Reestimate 

 Troubled Asset Relief Program, Negative Subsidies 

 Troubled Asset Relief Program, Downward Reestimates of Subsidies 

 Proceeds, GSE Equity Related Transactions 

 Excess of Proceeds from Debt Obligations Issued by Black Lung 

 Other Offsets 

Subt ot al Of f set s: 

U ndist ribut ed Of f set t ing R eceipt s 

Department of the Treasury - Budget in Brief FY 2011 Page 136
Detail of Other Treasury Accounts 

Total Treasury Department Budget 

The Treasury Chapter of the FY 2011 President’s 

Budget covers the following areas: 

Annual Operating Appropriations 

(Most Treasury Bureaus) – $13.9 billion 

These are funds for Treasury operations which 

require annual appropriation action by the 

Congress. Bureau operating budget details are 

provided in the “Analysis of FY 2011 President’s 

Budget” section. 

Interest Payments and other interest – 

$456.0 billion 

These are permanent, indefinite funds for interest 

payments needed: to finance the public debt; by 

the IRS on refunds of taxes to taxpayers; and on 

special accounts handled through the Treasury. 

Mandatory Accounts and other Offsets 

– $91.0 billion 

These are special accounts for which the Congress 

has given the Department of Treasury permanent 

authority to expend funds as appropriations, such 

as: payments made when the earned income credit, 

child credit, and health care credit exceeds the 

taxpayer's tax liability; payments to the Resolution 

Funding Corporation; reimbursements to Federal 

Reserve Banks; special claims and damage 

payments required as a result of judgments against 

the U.S. government; payments to Presidential 

candidates and their parties in accordance with 

Federal Election Commission certification; and 

other accounts. 

Offsetting Collections – $20.0 billion 

Treasury receipts from other government agencies 

and private sources are subtracted from the total 

Treasury budget as an offset. 

Interest Payments 

Interest on the Public Debt 

The Federal Government's outstanding debt 

requirements are financed through borrowing (e.g., 

auctions of Treasury Bills, Notes, and Bonds). 

Funds paid to lenders for the use of their money is 

paid from the Interest on the Public Debt 

appropriation. 

Interest on the Public Debt includes all interest 

paid on Treasury securities sold to the public (e.g., 

foreign and domestic financial institutions, 

individuals, insurance companies, state and local 

governments, etc.) and to Federal Government 

trust funds, revolving funds and deposit funds. 

Refunding Internal Revenue 

Collections 

Under certain circumstances, as provided in 26 

U.S.C. 6611, interest is paid on Internal Revenue 

collections that must be refunded. The Tax Equity 

and Fiscal Responsibility Act of 1982 (Public Law 

97-248) provides for daily compounding of 

interest. Under the Tax Reform Act of 1986 

(Public Law 99-514), interest paid on Internal 

Revenue collections will equal the Federal shortterm rate plus two percentage points, such rate to 

be adjusted quarterly. 

Interest on Uninvested Funds 

This account was established for the purpose of 

paying interest on certain uninvested funds placed 

in trust in the Treasury in accordance with various 

statutes (31 U.S.C. 1321; 2 U.S.C. 158 (P.L. 94-

289); 20 U.S.C. 74a (P.L. 94-418) and 101; 24 

U.S.C. 46 (P.L. 94-290; and 69 Stat. 533). 

Federal Interest Liabilities to the States 

Pursuant to the Cash Management Improvement 

Act (P.L. 101-453, 104 Stat. 1058) as amended 

(P.L. 102-589, 106 Stat. 5133), and Treasury 

implementing regulations codified at 31 CFR Part 

205, under certain circumstances, interest is paid 

to States when Federal funds are not transferred to 

States in a timely manner. 

Payment to Resolution Funding 

Corporation 

The Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989 authorized the Secretary 

of the Treasury such sums as may be necessary to 

Department of the Treasury - Budget in Brief FY 2011 Page 137
cover interest payments on obligations issued by 

the Resolution Funding Corporation (REFCORP). 

REFCORP was established under the Act to raise 

$31.2 billion for the Resolution Trust Corporation 

(RTC) in order to resolve savings institution 

insolvencies. 

Interest Paid to Credit Financing 

Accounts 

This account pays interest on the invested balances 

of guaranteed and direct loan financing accounts. 

For guaranteed loan financing accounts, balances 

result when the accounts receive up-front 

payments and fees to be held in reserve to make 

payments on defaults. Direct loan financing 

accounts normally borrow from Treasury to 

disburse loans and receive interest and principal 

payments and other payments from borrowers. 

Because direct loan financing accounts generally 

repay borrowing from Treasury at the end of the 

year, they can build up balances of payments 

received during the year. Interest on invested 

balances is paid to the financing accounts from the 

general fund of the Treasury, in accordance with 

section 505(c) of the Federal Credit Reform Act of 

1990 

Permanent Authority Appropriations 

Terrorism Risk Insurance Program 

The Terrorism Risk Insurance Extension Act of 

2007 (P.L. 110-160) reauthorized and revised the 

program established by the Terrorism Risk 

Insurance Act (TRIA) of 2002 (P.L. 107-297). The 

2007 Act extended the Terrorism Insurance 

Program for seven years, through December 31, 

2014. This extension of TRIA added a requirement 

for commercial property and casualty insurers to 

make available coverage for losses from domestic 

as well as foreign acts of terrorism and extends 

TRIA coverage for those losses. 

GSE Preferred Stock Purchase 

Agreement Program (PSPA) 

Section 1117 of the Housing and Economic 

Recovery Act of 2008 (P.L. 110-289) provides 

temporary authority for the Secretary of the 

Treasury to purchase obligations and other 

securities issued by three housing related 

Government- sponsored enterprises (GSEs): 

Fannie Mae, Freddie Mac and the Federal Home 

Loan Banks (FHLBs). Under this authority, in 

2008 Treasury entered into agreements with 

Fannie Mae and Freddie Mac to make investments 

of up to $100 billion in senior preferred stock in 

each GSE in order to ensure that each company 

maintains a positive net worth. These Senior 

Preferred Stock Purchase Agreements (PSPAs) 

ensure that Fannie Mae and Freddie Mac will 

remain viable entities critical to the functioning of 

the housing and mortgage markets, thereby 

promoting mortgage affordability by providing 

additional confidence to investors in GSE 

mortgage-backed securities. In May 2009, 

Treasury increased the PSPA funding 

commitments to allow investments of up to $200 

billion in each GSE and on December 24, 2009, 

Treasury announced that the PSPAs would be 

further modified to allow for additional funding in 

the event that cumulative losses at either enterprise 

exceed $200 billion before December 31, 2012. 

As of December 31, 2009, Treasury had made 

payments of $110.6 billion under the PSPAs and 

received $6.8 billion in scheduled dividend 

payments. 

GSE Mortgage-Backed Securities 

Purchase Program 

In September 2008, Treasury initiated a temporary 

program to purchase mortgage-backed securites 

(MBS) issued by Fannie Mae and Freddie Mac, 

which carry the GSEs standard guarantee against 

default. The purpose of the program was to 

promote liquidity in the mortgage market and, 

thereby, affordable homeownership by stabilizing 

the interest rate spreads between mortgage rates 

and Treasury issuances. Treasury purchased $225 

billion in MBS through December 31, 2009. 

In December 2009, Treasury initiated two 

additional purchase programs to support state and 

local Housing Financing Agencies (HFAs). The 

Department of the Treasury - Budget in Brief FY 2011 Page 138
Temporary Credit and Liquidiy Program (TCLP) 

will provide HFAs with credit and liquidity 

facilities supporting up to $8.2 billion in existing 

HFA bonds, temporally replacing private market 

facilities that are expiring or imposing unusually 

high costs to the HFAs due to current market 

conditions. Under the New Issuance Bond 

Program (NIBP) Treasury will purchase up to 

$15.3 billion in securities of Fannie Mae and 

Freddie Mac backed by new HFA housing bonds, 

supporting up to several hundred thousand new 

affordable mortgages and tens of thousands of new 

affordable rental housing units for working 

families. The authority for all of the programs 

displayed in this account was provided in Section 

1117 of the Housing and Economic Recovery Act 

of 2008 (P.L. 110-289) and expired on December 

31, 2009. 

As required by the Federal Credit Reform Act of 

1990, this account records, the subsidy costs 

associated with the GSE MBS and State HFA 

purchase programs, which are treated as direct 

loans for budget execution. The subsidy amounts 

are estimated on a present value basis. 

Office of Financial Stability 

The Emergency Economic Stabilization Act 

(EESA) of 2008 (PL 110-343) authorized the 

establishment of the Troubled Asset Relief 

Program (TARP) and the Office of Financial 

Stability (OFS) to purchase and insure certain 

types of troubled assets for the purpose of 

providing stability to and preventing disruption in 

the economy and financial systems and protecting 

taxpayers. The Act gives the Treasury Secretary 

broad and flexible authority to purchase and insure 

mortgage and other troubled assets, as well as 

inject capital by taking limited equity positions, as 

needed to stabilize the financial markets. This 

account provides for the administrative costs for 

the OFS. 

Troubled Asset Relief Program 

As authorized by the Emergency Economic 

Stabilization Act of 2008 (EESA) (P.L. 110-343) 

and required by the Federal Credit Reform Act of 

1990, as amended, this account records the 

subsidy costs associated with the TARP direct 

loans obligated and loan guarantees committed in 

2008 and beyond (including modifications of 

direct loans or loan guarantees that resulted from 

obligations or commitments in any year). The 

subsidy amounts are estimated on a present value 

basis using a risk-adjusted discount rate, as 

required by the 2008 Act. The direct loan 

programs serviced by this account include the 

Automotive Industry Financing Program (AIFP), 

Term-Asset Backed Securities Loan Facility 

(TALF), Public-Private Investment Program 

(PPIP) and other EESA Section 101 loans. The 

AIFP was developed to prevent a significant 

disruption of the American automotive industry, 

which would pose a systemic risk to financial 

market stability and have a negative effect on the 

economy of the United States. The TALF was 

developed to stimulate investor demand for certain 

types of eligible asset-backed securities, 

specifically those backed by loans to consumers 

and small businesses, and ultimately, bring down 

the cost and increase the availability of new credit 

to consumers and businesses. The PPIP was 

developed to improve the condition of financial 

institutions by facilitating the removal of legacy 

assets from their balance sheets. The guaranteed 

loan commitments that were serviced by this 

account include the Asset Guarantee Program 

(AGP). The AGP provided guarantees for assets 

held by systemically significant financial 

institutions (Bank of America and Citigroup) that 

faced a risk of losing market confidence due in 

large part to a portfolio of distressed or illiquid 

assets. In May 2009, Bank of America announced 

its intention to terminate negotiations with respect 

to the loss-sharing arrangement, and in September 

2009, Treasury, the Federal Reserve, the FDIC, 

and Bank of America entered into a termination 

agreement. On December 23, 2009, the Citigroup 

guarantee was terminated. With this termination, 

the AGP will result in net positive returns to the 

taxpayer. 

Funding shown for other Section 101 loans in 

2010 represent placeholders for potential future 

programs created under the TARP. On December 

9, 2009, and as authorized by EESA, the Secretary 

of the Treasury certified to Congress that an 

extension of TARP purchase authority until 

October 3, 2010, was necessary "to assist 

American families and stabilize financial markets 

because it will, among other things, enable us to 

Department of the Treasury - Budget in Brief FY 2011 Page 139
continue to implement programs that address 

housing markets and the needs of small 

businesses, and to maintain the capacity to respond 

to unforeseen threats." For more details, please see 

the Financial Stabilization and Their Budgetary 

Effects chapter in Analytical Perspectives. 

Troubled Asset Relief Program Equity 

Purchase Program 

As authorized by Emergency Economic 

Stabilization Act of 2008 (P.L. 110-343) and 

required by the Federal Credit Reform Act of 

1990, as amended, this account records the 

subsidy costs associated with the equity purchase 

obligations committed in 2008 and beyond 

(including modifications of equity purchases that 

resulted from obligations in any year). The subsidy 

amounts are estimated on a present value basis. 

The equity purchase programs serviced by this 

account include the Capital Purchase Program 

(CPP), American International Group Investment 

Program. (AIGP), Targeted Investment Program 

(TIP), Automotive Industry Financing Program 

(AIFP), and Public-Private Investment Program 

(PPIP). The purpose of the CPP is to stabilize the 

financial system by building the capital base of 

healthy, viable U.S. financial institutions, which in 

turn will increase the capacity of those institutions 

to lend to businesses and consumers and support 

the economy. The AIGP is intended to provide 

stability and prevent disruptions to financial 

markets from the failure of a systemically 

significant institution. The AIFP was developed to 

prevent a significant disruption of the American 

automotive industry, which would pose a systemic 

risk to financial market stability and have a 

negative effect on the economy of the United 

States. The PPIP was developed to improve the 

condition of financial institutions by facilitating 

the removal of legacy assets from their balance 

sheets. For more details, please see the Financial 

Stabilization and Their Budgetary Effects chapter 

in Analytical Perspectives. 

Troubled Asset Relief Program Home 

Affordable Modification Program 

As authorized by Emergency Economic 

Stabilization Act of 2008 (P.L. 110-343) and 

required by the Federal Credit Reform Act of 

1990, as amended, this account records the 

subsidy costs associated with the equity purchase 

obligations committed in 2008 and beyond 

(including modifications of equity purchases that 

resulted from obligations in any year). The subsidy 

amounts are estimated on a present value basis. 

The equity purchase programs serviced by this 

account include the Capital Purchase Program 

(CPP), American International Group Investment 

Program. (AIGP), Targeted Investment Program 

(TIP), Automotive Industry Financing Program 

(AIFP), and Public-Private Investment Program 

(PPIP). The purpose of the CPP is to stabilize the 

financial system by building the capital base of 

healthy, viable U.S. financial institutions, which in 

turn will increase the capacity of those institutions 

to lend to businesses and consumers and support 

the economy. The AIGP is intended to provide 

stability and prevent disruptions to financial 

markets from the failure of a systemically 

significant institution. The AIFP was developed to 

prevent a significant disruption of the American 

automotive industry, which would pose a systemic 

risk to financial market stability and have a 

negative effect on the economy of the United 

States. The PPIP was developed to improve the 

condition of financial institutions by facilitating 

the removal of legacy assets from their balance 

sheets. For more details, please see the Financial 

Stabilization and Their Budgetary Effects chapter 

in Analytical Perspectives. 

Grants to States for Low-Income 

Housing Projects 

Section 1602 of the American Recovery and 

Reinvestment Act of 2009 (Recovery Act) 

authorizes and directs the Secretary of the 

Treasury to establish payments to states for lowincome housing projects in lieu of low-income 

housing tax credits (LIHTC). This account 

presents the estimated disbursements for this 

program. 

The program will provide payments to State 

Department of the Treasury - Budget in Brief FY 2011 Page 140
housing credit agencies to make sub-awards to 

finance the construction or acquisition and 

rehabilitation of qualified low-income housing in 

the same manner and generally subject to the same 

limitations as LIHTCs allocated under section 42 

of the Internal Revenue Code (IRC). The 

Recovery Act specifies that the exchange of 

credits for cash payments applies only to the 2009 

LIHTC ceiling under IRC 42(h)(3)(C), and that 

States may elect to exchange credits for cash 

payments subject to the requirements and 

limitations provided in Division B, sections 1404 

& 1602 of the Recovery Act. 

The 2011 Budget proposes to extend for one year 

the cash assistance in lieu of LIHTCs option 

available to States found in the Recovery Act. The 

same general requirements and restrictions found 

in the Recovery Act will apply to the extension. 

Grants for Specified Energy Property 

Section 1603 of the American Recovery and 

Reinvestment Act of 2009 authorizes and directs 

the Secretary of the Treasury to establish 

payments in lieu of a tax credits for taxpayers that 

place in service qualifying renewable energy 

facilities. This account presents the estimated 

disbursements for this program. 

This program will provide payments for specified 

energy property (including qualified facilities that 

produce electricity from wind and certain other 

renewable resources; qualified fuel cell property; 

solar property; qualified small wind energy 

property; geothermal property; qualified 

microturbine property; combined heat and power 

system property; and geothermal heat pump 

property). Payments are available for property 

placed in service in 2009 or 2010. In some cases, 

if construction begins in 2009 or 2010, the 

payment can be claimed for property placed in 

service before 2013, 2014 or 2017 (depending on 

the type of property). In general, projects that meet 

eligibility criteria for the energy property 

investment tax credit (ITC) (including qualified 

renewable energy facilities for which an election 

to claim the ITC can be made) are eligible for the 

payments. A person or entity receiving a payment 

for specified energy property may not claim either 

the investment tax credit or the renewable energy 

production tax credit with respect to the same 

property. 

Exchange Stabilization Fund-Money 

Market Mutual Fund 

The Department established a Temporary 

Guarantee Program for Money Market Funds 

(Treasury Guarantee Program) in September 2008 

that was managed under the purview of the 

Treasury's Office of Financial Institutions. Under 

the Treasury Guarantee Program, the Treasury 

guaranteed to individual investors that they would 

receive the stable share price (SSP) for each share 

held in a participating money market fund up to 

the number of shares held as of the close of 

business, September 19, 2008. Use of ESF assets 

to support the Treasury Guarantee Program was 

approved by the President and the Secretary of the 

Treasury on September 19, 2008, and opened for 

participation on September 29, 2008. To 

participate in the Treasury Guarantee Program, 

eligible money market funds must have submitted 

an application and paid a premium of 1 basis point 

if the fund's Net Asset Value (NAV) was greater 

than or equal to 99.75 percent of the SSP, or 1.5 

basis points of the SSP if the fund's NAV was less 

than 99.75 percent of the SSP but greater than or 

equal to 99.50 percent of the SSP. To be eligible, 

funds were required to: (1) be regulated under 

Rule 2a-7 of the Investment Company Act of 

1940; (2) maintain a SSP; (3) have a market-based 

NAV of at least 99.5 percent of the SSP as of 

September 19, 2008; and (4) be publicly offered 

and registered with the Securities and Exchange 

Commission. The Program was initially offered 

for a three month period (through December 19, 

2008), with the option to extend through 

September 18, 2009, at the discretion of the 

Secretary of the Treasury. The Program was 

extended twice during 2009; first from December 

19, 2008 through April 30, 2009 and again through 

September 18, 2009. The program officially 

expired on September 18, 2009. 

On November 19, 2008, Treasury entered into a 

transaction with the Reserve Fund's U.S. 

Government Fund (USGF), under which Treasury: 

(1) executed the Guarantee Agreement, which 

accepted the USGF into the Treasury Guarantee 

Program; and (2) signed a Letter Agreement with 

the USGF. Under the terms of the Letter 

Department of the Treasury - Budget in Brief FY 2011 Page 141
Agreement, Treasury was obligated to purchase in 

early January 2009 the USGF's remaining 

securities issued by four U.S. government 

sponsored enterprises. On January 15, 2009 the 

ESF purchased approximately $3.6 billion of these 

securities; the purchase price representing the 

amortized cost of the remaining securities, plus 

accrued but unpaid interest. Upon consummation 

of the purchase, these GSE securities were 

classified as held to maturity. As of the end of 

fiscal year 2009, $1.1 billion of these securities 

remained outstanding. In November 2009, all 

securities matured and resulted in the closing of 

the Treasury Guarantee Program (and this 

account) in fiscal year 2010. 

Presidential Election Campaign Fund 

Individual Federal income tax returns include an 

optional Federal income tax designation of $3 that 

an individual may elect to be paid to the 

Presidential Election Campaign Fund (PECF). In 

recent years, less than 10% of individuals have 

elected to make this designation, resulting in less 

than $50 million paid into the Fund annually. 

Approximately every four years, the Department 

of the Treasury makes distributions from the 

PECF (referred to as public funds, matching funds, 

or Federal funds) to qualified Presidential 

candidates and national party committees for use 

in the Presidential elections. 

Money for the public funding of Presidential 

elections can only come from the PECF. When 

the PECF runs short of funds, no other general 

Treasury funds may be used. 

Treasury Forfeiture Fund 

The Treasury Forfeiture Fund supports Federal, 

State, and local law enforcement's use of asset 

forfeiture as a powerful tool to punish and deter 

criminal activity. Non-tax forfeitures made by 

participating bureaus of the Department of the 

Treasury and the Department of Homeland 

Security are deposited into the Fund. This revenue 

is available to pay or reimburse certain costs and 

expenses related to seizures and forfeitures that 

occur pursuant to laws enforced by the bureaus 

and other expenses authorized by 31 U.S.C. 9703. 

Upon notification of Congress, revenue can also 

be used to fund law enforcement related activities 

based on requests from member bureaus and 

evaluation by the Secretary of the Treasury. A $62 

million cancellation is proposed for FY 2011. 

Biomass Energy Development 

This account was created to provide loan 

guarantees for the construction of biomass-toethanol facilities, as authorized under Title II of 

the Energy Security Act of 1980. All of the loans 

guaranteed by this account went into default. The 

guarantees have been paid off, and the assets of all 

but one of the projects have been liquidated. The 

one remaining project, the New Energy Company 

of Indiana, entered into a Forbearance agreement 

with DOE in April 2009 due to financial issues. 

Quarterly payments may resume after March 

2011. 

Payment to Terrestrial Wildlife Habitat 

Restoration Trust Fund 

Section 604(b) of the Water Resources 

Development Act of 1999 (P.L. 106-53) requires 

that the Secretary of the Treasury, beginning in 

1999, deposit $5 million annually (74 percent into 

the Cheyenne River Sioux Tribe Terrestrial 

Wildlife Restoration Trust Fund and 26 percent 

into the Lower Brule Sioux Tribe Terrestrial 

Wildlife Restoration Trust Fund) until a total of at 

least $57.4 million has been deposited. At the end 

of 2009, $55 million in payments had been 

deposited in the funds. Full capitalization is 

expected by 2010; therefore the funds will not 

receive any additional payments from the Treasury 

in FY 2011. Tribes are now able to draw down on 

the interest earned from these investments. 

Debt Collection Special Fund 

Under current law, when the Financial 

Management Service (FMS) levies a payment to 

collect a delinquent tax debt referred by the 

Internal Revenue Service (IRS), the IRS pays a fee 

out of its annual appropriation to FMS to process 

the transaction. The Budget proposes to instead 

Department of the Treasury - Budget in Brief FY 2011 Page 142
have the debtor pay the transaction costs in 

addition to their original debt. This would allow 

the IRS to refer all appropriate tax debts for offset, 

maximize revenue, and shift the cost of 

enforcement to delinquent debtors. These 

schedules reflect the elimination of discretionary 

spending and collections as a result of this 

proposal. 

Financial Agent Services 

This permanent, indefinite appropriation allows 

the Financial Management Service to reimburse 

financial institutions for services provided in their 

capacity as depositaries and fiscal agents for the 

United States. The services provided are 

authorized under numerous statutes, including, but 

not limited to, 12 U.S.C. 90 and 265. The services 

include the acceptance and processing of deposits 

of public money, as well as services essential to 

the disbursement of and accounting for public 

monies. 

Federal Reserve Bank Reinvestment 

Fund 

This fund was established by the Treasury and 

General Government Appropriations Act, 1998, 

Title I, (P.L. 105-61, 111 Stat. 1276) as a 

permanent, indefinite appropriation to reimburse 

Federal Reserve Banks for services provided in 

their capacity as depositaries and fiscal agents for 

the United States. 

Claims, Judgments and Relief Acts 

Pending Congressional action and final approval 

by the Court, $3.412 billion will be expended from 

this account in FY 2010 as a result of the 

settlement of Cobell v. Salazar, a case involving 

the management of individual Indian trust 

accounts related to Indian lands. 

Check Forgery Insurance Fund 

This fund was established as a permanent, 

indefinite appropriation in order to maintain 

adequate funding of the Check Forgery Insurance 

Fund. The Fund facilitates timely payments for 

replacement Treasury checks necessitated due to a 

claim of forgery. The Fund recoups disbursements 

through reclamations made against banks 

negotiating forged checks. 

To reduce hardships sustained by payees of 

Government checks that have been stolen and 

forged, settlement is made in advance of the 

receipt of funds from the endorsers of the checks. 

If the U.S. Treasury is unable to recover funds 

through reclamation procedures, the Fund sustains 

the loss. 

Public Law 108-447 expanded the use of the fund 

to include payments made via electronic funds 

transfer. A technical correction to the Fund's 

statutes to ensure and clarify that the Fund can be 

utilized as a funding source for relief of 

administrative disbursing errors was enacted by 

section 119 of Division D of Public Law 110-161. 

Continued Dumping and Subsidy 

Offset 

The Bureau of Customs and Border Protection, 

Department of Homeland Security, collects duties 

assessed pursuant to a countervailing duty order, 

an antidumping duty order, or a finding under the 

Antidumping Act of 1921. Under a provision 

enacted in 2000, the Bureau of Customs and 

Border Protection, through the Treasury, 

distributes these duties to affected domestic 

producers. These distributions provide a 

significant additional subsidy to producers that 

already gain protection from the increased import 

prices provided by the tariffs. The authority to 

distribute assessments collected after October 1, 

2007 has been repealed. Assessments collected 

before October 1, 2007 will be disbursed as if the 

authority had not been repealed. 

Internal Revenue Collections for 

Puerto Rico 

Excise taxes are imposed on rum at the generally 

applicable distilled spirits rate of $13.50 per proof 

gallon. These excise tax collections, less 

estimated refunds, drawbacks, and certain 

administrative expenses are covered-over 

(transferred), to Puerto Rico and the Virgin Islands 

under a permanent legislative provision at the 

lesser of a rate of $10.50 per proof gallon or the 

current rate of tax imposed on a proof gallon. The 

Budget proposes to extend a temporary cover-over 

rate of $13.25 per proof gallon through December 

31, 2011. This proposal does not increase the total 

Department of the Treasury - Budget in Brief FY 2011 Page 143
amount of excise taxes collected, but rather 

increases the portion of excise taxes that are 

covered-over to Puerto Rico and the Virgin 

Islands. 

Government Losses in Shipment 

This account was created as self-insurance to 

cover losses in shipment of Government property 

such as coins, currency, securities, certain losses 

incurred by the Postal Service, and losses in 

connection with the redemption of savings bonds. 

Approximately 1,300 claims are paid annually. 

Payment Where Recovery Rebate 

Exceeds Liability for Tax 

The Economic Stimulus Act of 2008 (Public Law 

110-185) allowed for the issuance of tax rebates 

(economic stimulus payments) to certain eligible 

taxpayers through December 31, 2008. This tax 

rebate was a one-time benefit provided to 

taxpayers to stimulate the economy. Additionally, 

in 2009 the rebate were provided to taxpayers who 

did not receive the full economic stimulus 

payment in 2008 and whose circumstances may 

have changed, making them eligible for some or 

all of the unpaid portion. No outlays are expected 

from this account in 2010, as the one-time 

program is no longer active. 

Payment Where Earned Income Credit 

Exceeds Liability for Tax 

As provided by law, there are instances wherein 

the earned income tax credit (EITC) exceeds the 

amount of tax liability owed through the 

individual income tax system, resulting in an 

additional payment to the tax filer. The EITC was 

originally authorized by the Tax Reduction Act of 

1975 (Public Law 94-12) and made permanent by 

the Revenue Adjustment Act of 1978 (Public Law 

95-600). The Tax Reform Act of 1986 and the 

Omnibus Budget Reconciliation Acts of 1990 and 

1993 increased the credit amount and expanded 

the eligibility for the EITC. 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) temporarily increases the 

EITC for working families with three or more 

children, and increases the threshold for the phaseout range for all married couples filing a joint 

return. The Budget proposes to both permanently 

extend the provision regarding families with three 

or more children and eliminate the Advance 

Earned Income Tax Credit (AEITC). 

Internal Revenue Service – User Fees 

The Secretary of the Treasury may establish new 

fees or raise existing fees for services provided by 

the IRS. The fees can be used to supplement IRS 

appropriations. 

Payment Where Child Credit Exceeds 

Liability for Tax 

As provided by law, there are instances wherein 

the child credit exceeds the amount of tax liability 

owed through the individual income tax system, 

resulting in an additional payment to the tax filer. 

The child credit was originally authorized by the 

Taxpayer Relief Act of 1997 (Public Law 105-34). 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) expanded the pool of 

eligible low-income earners. The credit is 

refundable to the extent of 15 percent of an 

individual’s earned income in excess of $3,000 for 

2009 and 2010. 

Payment Where Health Care Credit 

Exceeds Liability for Tax 

The Trade Act of 2002 established the Health 

Coverage Tax Credit (HCTC), an advanceable, 

refundable tax credit for a portion of the cost of 

qualified insurance. This credit is available to 

certain recipients of Trade Adjustment Assistance 

(TAA) and Pension Benefit Guaranty Corporation 

pension beneficiaries who are aged 55-64. 

The HCTC program was expanded by the 

American Recovery and Reinvestment Act of 

2009 (Public Law 111-5). Increased benefits for 

certain HCTC eligible individuals include 

payment of 80 percent (up from 65 percent) of 

health insurance premiums, up to 24 months of 

coverage for qualified family members, and 

extension of COBRA benefits. This schedule 

reflects the effects of HCTC and other 

Department of the Treasury - Budget in Brief FY 2011 Page 144
Administration health-related tax proposals in 

cases where the credit exceeds the tax liability 

resulting in payment to the tax filer. 

Payment Where Alternative Minimum 

Tax Exceeds Liability for Tax 

The Tax Relief and Health Care Act of 2006 

(Public Law 109-432) allows certain taxpayers to 

claim a refundable credit for a portion of their 

unused long-term alternative minimum tax (AMT) 

credits each year. The Emergency Economic 

Stabilization Act of 2008 (Public Law 110-343) 

increases the AMT refundable credit portion from 

20 percent to 50 percent of the unused long-term 

minimum tax credits for the taxable year in 

question. 

Payment Where Tax Credit to Aid FirstTime Homebuyers Exceeds Liability for 

Tax 

The Housing and Economic Recovery Act of 2008 

(Public Law 110-289) provided a refundable tax 

credit of up to $7,500 for first-time homebuyers. 

The credit allowed for up to 10 percent of the 

purchase price for qualified residences. Taxpayers 

who qualified were allowed a one-time credit 

against their income tax for principal residences 

purchased on or after April 9, 2008, and before 

July 1, 2009. They must repay the credit over a 

15-year period. 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) expanded and extended 

the credit, and also eliminated the repayment 

requirement. Qualifying taxpayers may claim up 

to $8,000 on either their 2008 or 2009 tax returns 

for qualifying 2009 purchases. The credit is 

available for qualifying purchases made between 

January 1, 2009 and November 30, 2009. 

The Worker, Homeownership, and Business 

Assistance Act of 2009 (Public Law 111-92) 

extended the application period for the first-time 

homebuyer credit from November 30, 2009 to 

April 30, 2010. The Act modifies the buyer's 

settlement date to June 30, 2010, if a buyer enters 

into a binding contract by April 30, 2010. The Act 

also provides a "long-time resident" credit of up to 

$6,500 to taxpayers who do not qualify as firsttime homebuyers. 

This account provides resources for the portion, if 

any, of the refundable tax credit amount that 

exceeds the taxpayer's tax liability. 

Payment Where Certain Tax Credits 

Exceeds Liability for Corporate Tax 

The Housing and Economic Recovery Act of 2008 

(Public Law 110-289) allows certain businesses to 

accelerate the recognition of a portion of their 

historic AMT or research and development (R&D) 

credits in lieu of taking bonus depreciation. The 

amount is capped at the lesser of $30 million or 

6 percent of historic AMT and R&D credits. The 

American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) extends this temporary 

benefit through 2009. 

Payment Where American Opportunity 

Credit Exceeds Liability for Tax 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) allows certain taxpayers 

to claim a refundable Hope Scholarship Credit for 

qualifying higher education expenses. Up to 40 

percent of the credit is refundable. The credit 

applies dollar-for-dollar to the first $2,000 of 

qualified tuition, fees and course materials paid by 

the taxpayer, and applies at a rate of 25 percent to 

the next $2,000 in qualified tuition, fees and 

course materials for a total credit of up to $2,500. 

This tax credit is subject to a phase-out for highincome taxpayers. The 2011 Budget proposes to 

extend this credit. 

Making Work Pay Tax Credit 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) allows certain taxpayers 

to claim a refundable Making Work Pay tax credit 

of 6.2 percent of earned income, up to $400 for 

single taxpayers and up to $800 for married 

couples filing joint returns. The refundable credit 

phases out for high-income taxpayers. The 

Department of the Treasury - Budget in Brief FY 2011 Page 145
Making Work Pay credit is claimed by taxpayers 

when they file their 2009 and 2010 returns, and in 

order to accelerate the credit, it is being delivered 

in small increments through reduced payroll 

withholding. The 2011 Budget proposes to extend 

this credit for one year. 

Build American Bond Payments, 

Recovery Act 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) allows State and local 

governments to issue Build America Bonds 

through December 31, 2010. These tax credit 

bonds, which include Recovery Zone Bonds, differ 

from tax-exempt governmental obligation bonds in 

two principal ways: (1) interest paid on tax credit 

bonds is taxable; and (2) a portion of the interest 

paid on tax credit bonds takes the form of a federal 

tax credit. The bond issuer may elect to receive a 

direct payment in the amount of the tax credit. The 

2011 Budget proposes a revenue-neutral extension 

of this program. 

Payment Where COBRA Credit 

Exceeds Liability for Tax 

COBRA gives workers who lose their jobs, and 

thus their health benefits, the right to purchase 

group health coverage provided by the plan under 

certain circumstances. This continuation coverage 

is provided pursuant to part 6 of subtitle B of title I 

of the Employee Retirement Income Security Act 

of 1974 (other than section 609), title XXII of the 

Public Health Service Act, section 4980B of the 

Internal Revenue Code of 1986 (other than under 

subsection (f)(1) of such section insofar as it 

relates to pediatric vaccines), or section 8905(a) of 

5 U.S.C., or under a State program that provides 

comparable continuation coverage. 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) treats assistance eligible 

individuals who pay 35 percent of their COBRA 

premium as having paid the full amount. The 

remaining 65 percent is reimbursed to the 

employer, insurer or health plan as a credit against 

certain employment taxes. This schedule reflects 

the cases where the credit exceeds the tax liability 

resulting in the payment to the tax filer. 

The Department of Defense Appropriation Act of 

2010 (Public Law 111-118) extends the eligibility 

period for the COBRA Premium Assistance 

program from the original ending date of 

December 31, 2009 to February 28, 2010. The 

Act also extends the duration period of the 

taxpayers' premium assistance coverage from 9 

months to 15 months. 

Payment Where Tax Credit for Certain 

Government Retirees Exceeds Liability 

for Tax 

The American Recovery and Reinvestment Act of 

2009 (Public Law 111-5) allows certain federal 

and state retirees to claim a one-time refundable 

credit of up to $250 ($500 in the case of a joint 

return where both spouses are eligible 

individuals). 

Payment Where Saver’s Credit Exceed 

Liability for Tax 

The Budget proposes to modify the Retirement 

Savings Contributions Credit to provide a 50 

percent match on the first $1,000 of retirement 

savings for families that earn less than $65,000. 

The credit will be fully refundable. This proposal 

will be effective for taxable years beginning after 

December 31, 2010. 

Internal Revenue Service – Informant 

Payments 

As provided by law (26 U.S.C. 7623), the 

Secretary of the Treasury may make payments to 

individuals resulting from information given that 

leads to the collection of Internal Revenue taxes. 

The Taxpayer Bill of Rights of 1996 (Public Law 

104-168) provides for payments of such sums to 

individuals from the proceeds of amounts (other 

than interest) collected by reason of the 

information provided, and any amount collected 

shall be available for such payments. This 

Department of the Treasury - Budget in Brief FY 2011 Page 146
information must lead to the detection of public are market-oriented and are derived 

underpayments of taxes, or detection and bringing from activities operated as business-type 

to trial and punishment persons guilty of violating enterprises. 

the Internal Revenue laws (in cases where such 

expenses are not otherwise provided for by law). 

This provision was further amended by the Tax 

Relief and Health Care Act of 2006 (Public Law 

109-432) to encourage use of the program. A 

reward payment typically ranges between 15 and 

30 percent of the collected proceeds for cases 

involving high- income non-compliant taxpayers. 

Lower payments are allowed if information is 

provided that was already available from another 

source. 

Internal Revenue Service – Private 

Collection Agent Program 

The American Jobs Creation Act of 2004 (Public 

Law 108-357) allows the IRS to use private 

collection contractors to supplement its own 

collection staff's efforts to ensure that all taxpayers 

pay what they owe. The IRS used this authority to 

contract with several private debt collection 

agencies starting in 2006. In March 2009, the IRS 

allowed its private debt collection contracts to 

expire, thereby administratively terminating the 

program. 

Offsetting Collections 

In general, amounts collected by the Federal 

Government are classified in two major categories: 

Governmental receipts – Revenues that arise from 

the sovereign and regulatory powers unique to the 

Federal Government. They consist primarily of 

tax receipts, but also include customs duties, court 

fines, certain licenses, etc. All governmental 

receipts are deposited into receipt accounts. These 

receipts are always reported in total (rather than as 

an offset to budget authority and outlays). 

Offsetting receipts - Collections that are offset 

against the budget authority and outlays of the 

collecting agency rather than reflected as 

governmental receipts in computing budget totals. 

Offsetting receipts are comprised of: 

•	 Proprietary Receipts - These receipts from the 

•	 Intragovernmental Receipts - These are 

collections from other governmental accounts 

deposited in receipt accounts. These are 

further classified as follows: 

	 Interfund Receipts - These are 

amounts derived from payments 

between federal and trust funds. 

	 Intrafund Receipts - These are 

amounts derived from payments 

within the same fund group (i.e., 

within the federal fund group or 

within the trust fund group). 

Department of the Treasury - Budget in Brief FY 2011 Page 147
Department of the Treasury - Budget in Brief FY 2011 Page 148
Financial Reform 

In June 2009, the Administration submitted a 

comprehensive financial reform proposal to 

Congress designed to help prevent future 

financial crises by filling gaps in the U.S. 

regulatory regime and redistributing 

responsibilities among regulators in order to 

better focus on key issues that contributed to 

the present crisis. 

The Administration’s proposal employs 

lessons learned from the present crisis to 

reform and repair financial regulation on a 

number of fronts: 

First, the proposal prevents future bailout 

scenarios for “Too Big to Fail” firms by 

creating a new Financial Services Oversight 

Council to monitor for threats to financial 

stability and by authorizing the Federal 

Reserve to regulate large, interconnected firms 

if their failure during a downturn would 

severely impact the functioning of financial 

markets. In addition, the Government would 

have the ability to unwind such firms in an 

orderly manner when they fail to protect the 

financial system. 

Second, the proposal closes the gaps in and 

strengthens regulation of consumer financial 

products in the bank and non-bank sectors by 

consolidating existing consumer protection 

authorities to better protect consumers from 

unscrupulous practices – authorities that are 

currently spread out over seven regulators. 

The proposal creates a single, new regulator, 

the Consumer Financial Protection Agency, 

whose sole mission is to look out for 

consumers in the increasingly complex 

financial marketplace. Consolidation of 

authorities in an agency with mission focus on 

consumer protection will create clear 

accountability for providing and consistently 

enforcing clear rules of the road for firms 

offering consumer financial services. 

Third, the proposal shines a light on dark 

pools of capital and derivatives markets, by 

expanding the authority of the Securities and 

Exchange Commission (SEC) and the 

Commodity Futures Trading Commission 

(CFTC), respectively, to register and regulate 

hedge funds and to require central clearing for 

over-the-counter derivatives. 

Fourth, the proposal creates a new Office of 

National Insurance within the Treasury 

Department to gather information, develop 

expertise, negotiate international agreements, 

and coordinate policy in the insurance sector. 

Better monitoring will help prevent the kind of 

intervention that AIG’s failure required to 

preserve financial stability. 

Fifth, to prevent depository institutions from 

selecting a corporate structure based on their 

preference for a particular regulator, the 

proposal consolidates the Office of the 

Comptroller of the Currency and the Office of 

Thrift Supervision into a single, unified 

National Bank Supervisor, applying the same 

standards of supervision to lending institutions 

that perform the same functions, regardless of 

how they choose to organize themselves. 

Finally, in an effort to further strengthen and 

provide consistent regulation while promoting 

growth and innovation in the marketplace, the 

Administration’s proposal includes numerous 

other reform measures. These measures 

include, but are not limited to, strengthening 

important payment, clearing, and settlement 

systems, enhancing credit rating agency 

regulation, and increasing investor protections. 

Department of the Treasury - Budget in Brief FY 2011 Page 149
Financial Stability
 

Monitoring
 

Non‐Bank
 Consumer Financial
 Securities and
 Bank Supervision Resolution Authority
 Protection Functions
 Derivatives Regulation
 

No

existing

regulator

No

existing

regulator

tem sSyt Curren em tsSyed osProp

National

Bank

Supervisor

Consumer

Financial

Protection

Agency

Financial

Services

Oversight

Council

The House of Representatives passed a 

comprehensive financial reform package in 

December 2009, and the Senate is expected to 

consider legislation in 2010. Because 

Congress has not yet completed its work on 

these historic and urgent reforms, the 

President’s Budget reflects the 

Administration’s proposal. Specifically, some 

of the functions performed by staff for the 

Financial Services Oversight Council and the 

Office of National Insurance are authorized 

under current authorities, and the costs are 

reflected directly in the Budget. In other areas 

where specific new resources are not needed, 

such as in the case of the Federal Reserve’s 

actions on executive compensation, mortgage 

lending, and credit card regulation, administrative reform is underway but not 

specifically reflected in the Budget. The 

remaining reforms, which are subject to 

enactment of a financial reform bill, are 

currently included as a single amount in the 

Budget Appendix, reflecting the net impact of 

proposed efficiency savings, transfers, and 

new spending. The amounts include a 

budgetary placeholder for new spending and 

receipts from the non-bank resolution 

authority. Specific programmatic impacts on 

SEC and CFTC are discussed in each 

regulator’s Appendix narrative. 

The chart below illustrates the Administration’s proposed changes to the U.S. 

financial regulatory structure. 

Proposed Federal Financial Reforms
 

Department of the Treasury - Budget in Brief FY 2011 Page 150
In the areas of financial stability oversight 

and the resolution of non-banks, the 

Administration has proposed new authorities 

that do not exist under the current regulatory 

structure. In consumer financial protection 

and bank supervision, portions of the current 

authorities of multiple regulators are 

consolidated into fewer or a single regulator, 

in order to better focus Federal oversight in 

those areas. For securities and derivatives 

regulation, existing authorities have been 

enhanced. The overall result is a 

comprehensive system that addresses 

identified gaps in the system of U.S. 

financial regulation. 

Department of the Treasury - Budget in Brief FY 2011 Page 151
Department of the Treasury - Budget in Brief FY 2011 Page 152
$0.4 $0.0 0% 

$0.0 $0.0 0% 

$0.1 $0.0 0% 

$0.3 $0.0 0% 

$0.1 $0.0 0% 

$0.2 -$0.3 -60.00% 

$0.2 $0.0 0% 

$0.1 $0.0 0% 

$1.4 -$0.3 -17.65% 

FY 2010 

Estimated 

FY 2011 

Estimated $ Change % Change 

FY 2009 

Actual 

$0.4

$0.1 

$0.1 

$0.3 

$0.1 

$0.5 

$0.4 

$0.1 

$2.0 

(Dollars in millions) 

Treasury E-Gov Initiatives 

Treasury Integrated Acquisition 

Environment (IAE) $0.4 

Treasury Grants.Gov $0.0 

Treasury IAE Grants and Loans $0.1 

Treasury GovBenefits.Gov $0.3 

Treasury Financial Management 

LoB $0.1 

Treasury E-Rulemaking $0.5 

Treasury Business Gateway $0.2 

Treasury Budget Formulation & 

Execution LoB $0.1 

Totals $1.7 

The IT Dashboard and Treasury’s E-GOV Initiatives 

IT Dashboard 

The IT Dashboard is a new website enabling federal agencies and the general public to 

view details of federal information technology investments. To learn more about the 

features of the IT Dashboard and the Department of Treasury’s IT investments please go 

to http://it.usaspending.gov/#. 

Treasury E-Gov Initiatives 

TREASURY INTEGRATED ACQUISITION 

ENVIRONMENT (IAE): 

Through adoption of Integrated Acquisition 

Environment (IAE) tools and services, the 

Treasury Department is improving its ability 

to make informed and efficient purchasing 

decisions and automate manual processes. 

This E-Gov initiative is managed by the 

General Services Administration (GSA); 

GSA's UPI for this initiative is 023-30-01-02-

01-0230-24. 

TREASURY GRANTS.GOV: 

Grants.gov benefits the Treasury Department 

by providing a single location for citizens to 

find and apply for Department grant 

opportunities. The Department has three 

grant-making programs: the IRS Low Income 

Taxpayer Clinic, IRS Tax Counseling for the 

Elderly, and the Community Development 

Financial Institutions (CDFI) Fund. This EGov Initiative is managed by Health and 

Human Services (HHS); HHS's UPI for this 

initiative is 009-00-01-00-01-0160-24. 

TREASURY IAE GRANTS AND LOANS: 

The amounts listed in this business case are 

tracked within the IAE joint business case 

managed by the General Services 

Administration. This investment relates to 

Dunn and Bradstreet. 

TREASURY GovBENEFITS.GOV: 

GovBenefits.gov supports the Treasury 

Department’s mission by increasing public 

awareness of valuable tax benefit programs 

that allow businesses and individuals to grow 

Department of the Treasury - Budget in Brief FY 2011 Page 152
and prosper without being limited by 

unnecessary or obsolete rules and regulations. 

This E-Gov initiative is managed by the 

Department of Labor; Labor's UPI for this 

initiative is 012-25-01-99-01-0020-24. 

TREASURY FINANCIAL MANAGEMENT 

LoB: 

The Treasury Department’s Bureau of Public 

Debt is one of four federal Financial 

Management (FM) LoB shared service providers. The Department hosts and administers 

financial systems and performs business 

processing operations for over 30 Government 

organizations, including most Department 

bureaus and 16 non-Department-related organizations. This E-Gov initiative is managed 

by the General Services Administration 

(GSA); GSA's UPI for this initiative is 023-

30-01-01-01-1100-24. 

TREASURY E-RULEMAKING: 

The Treasury Department fully implemented 

its rulemaking processes to the Federal Docket 

Management System (FDMS), ERulemaking’s government-wide solution. The 

Department will continue to implement other 

rulemaking-related documents to FDMS. This 

initiative enables Treasury to streamline and 

automate the rulemaking process, improve 

citizen participation in the comment phases, 

and enhance in-formation management 

processes within the Department. This E-Gov 

initiative is managed by EPA; EPA's UPI for 

this initiative is 020-00-01-16-01-0060-24. . 

TREASURY BUSINESS GATEWAY: 

Business Gateway (BG) is a convenient portal 

for businesses to access a wide range of 

applicable forms online. BG reduces costs 

associated with forms printing, duplication, 

and distribution through the 

www.business.gov website. This E-Gov 

initiative is managed by the Small Business 

Administration (SBA); SBA's UPI for this 

initiative is 028-00-01-00-01-0100-24. 

TREASURY BUDGET FORMULATION & 

EXECUTION LoB: 

The Budget Formulation and Execution 

(BFE) LoB is a cross-agency effort to find 

common solutions that produce efficiencies 

in budget formulation and execution 

activities across the federal government. In 

working toward this goal, the BFE LoB 

developed nine technology-based capabilities 

solutions. The Treasury Department has 

been leading an effort in making the 

formulation module of the Budget 

Formulation and Execution Manager 

(BFEM) available to any agency that wishes 

to use the tool. 

Department of the Treasury - Budget in Brief FY 2011 Page 152