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Overview

Mission Statement

To provide central payment services to Federal Program Agencies (FPAs), operate the federal 

government’s collections and deposit systems, provide government-wide accounting and 

reporting services, and manage the collection of delinquent debt owed to the government.

Program Summary by Budget Activity

Dollars in Thousands

Appropriation FY 2010 FY 2011 FY 2012 FY 2010 to FY 2012

Enacted Annualized

CR Level

Request $ Change % Change

 Payments $150,395 $142,537 $132,868 ($17,527) (11.7%)

 Collections $21,911 $24,267 $21,265 ($646) (2.9%)

 Government-wide Accounting and Reporting $71,826 $77,328 $64,672 ($7,154) (10.0%)

Total Appropriated Resources $244,132 $244,132 $218,805 ($25,327) (10.4%)

Total FTE 1,500 1,500 1,200 (300) (20.0%)

FY 2012 Priorities

 Provide timely, accurate, and efficient disbursement of federal government payments.

 Provide timely, accurate, and efficient collection of federal government receipts.

 Maximize collection of delinquent debt owed to the government.

 Produce timely and accurate financial information that contributes to the improved

quality of financial decision making.

 Emphasize conversion from paper to electronic transactions.

 Be a great place to work.
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Table of Contents

Overview ........................................................................................................................................ 1

Mission Statement....................................................................................................................... 1

Program Summary by Budget Activity....................................................................................... 1

Section 1 – Purpose ....................................................................................................................... 3

1A – Description of Bureau Vision and Priorities ...................................................................... 3

1B – Program History and Future Outlook ................................................................................. 4

Section 2 – Budget Adjustments and Appropriation Language............................................... 9

2.1 – Budget Adjustments Table ................................................................................................. 9

2A – Budget Increases and Decreases Description..................................................................... 9

2.2 – Operating Levels Table .................................................................................................... 11

2.3 – Appropriations Detail Table............................................................................................. 12

2B – Appropriations Language and Explanation of Changes................................................... 12

Exhibit 2B – Permanent, Indefinite Appropriations.................................................................. 12

2C – Legislative Proposals........................................................................................................ 13

Section 3 – Budget and Performance Plan ............................................................................... 15

3.1 – Budget by Strategic Outcome .......................................................................................... 15

3.2.1 Payments Budget and Performance Plan ......................................................................... 17

3.2.2 – Collections Budget and Performance Plan.................................................................... 19

3.2.3 Debt Collection Budget and Performance Plan................................................................ 21

3.2.4 Government-wide Accounting and Reporting Budget and Performance Plan ................ 23

Section 4 – Supporting Materials .............................................................................................. 24

4A – Human Capital Strategy Description................................................................................ 24

4.1 – Summary of IT Resources Table...................................................................................... 26

4B – Information Technology Strategy..................................................................................... 27
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Section 1 – Purpose

1A – Description of Bureau Vision and Priorities 

FMS provides critical and essential payment, collections, debt collection and government-wide 

accounting and reporting functions essential to the successful operation of the federal 

government. These functions are far reaching. This includes issuing over 70 million benefit 

payments distributed monthly to the American public, the collection of all federal revenues that 

fund government operations and programs, processing and collecting of delinquent debts owed 

to the federal government including collection of past due child support, and providing financial 

reports to varied stakeholders. FMS touches almost every American and federal agency 

providing these very important and essential services.

FMS’ vision is to be characterized by three real and recognized qualities in everything we do -

exceptional integrity, quality, and responsiveness. 

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. In ensuring confidence in the nation’s financial 

system, FMS executes its role of managing the nation’s finances by collecting money due to the 

United States, making its payments, and performing central accounting functions. 

FMS’ Strategic Goals, as reflected in the FY 2012 priorities, are to: 

 Provide timely, accurate, and efficient disbursement of federal government payments.

 Provide timely, accurate, and efficient collection of federal government receipts.

 Maximize collection of delinquent debt owed to the government.

 Produce timely and accurate financial information that contributes to the improved quality of 

financial decision making.

 Be a great place to work

FMS is responsible for certain key governmentally controlled resources which are essential to 

the operation of the economy and government. While 100 percent of FMS’ operational 

functionality comprises the processing and safeguarding of public funds, FMS devotes 

approximately 75 percent of its direct salary and expense appropriation to ensuring the viability 

of the National Financial Critical Infrastructure. Specifically, three FMS programs – payments, 

collections, and cash reporting, which are part of the infrastructure. FMS is required to ensure 

these activities are fully operational at all times. 

The National Critical Infrastructure was established as a result of the Homeland Security Act of 

2002. Critical Infrastructure are the assets, systems, and networks, whether physical or virtual, 

so vital to the United States that their incapacitation or destruction would have a debilitating 
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effect on security, national economic security, public health or safety, or any combination 

thereof. Under the Homeland Security Presidential Directive 7, the Department of the Treasury 

was identified as a key sector-specific area for the Banking and Finance Sector. As part of the 

National Financial Critical Infrastructure, FMS provides critical services to millions of United 

States taxpayers, FPAs, and other customers. It embodies Treasury’s leadership strategy to 

create value for the American people, provides responsible and effective stewardship over the 

government’s finances, and focuses on quality service, results and innovation. FMS operates the 

largest tax collection system in the world and issues more than one billion payments annually; 

therefore, the impact of its programs on the economy and the public is significant. FMS’ 

activities touch millions of citizens and virtually every FPA and state government across the 

country. 

As the government’s financial manager, FMS oversees a daily cash flow in excess of $94 billion, 

disbursing over $2.3 trillion in non-defense payments to more than 100 million people. 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 $2.94 trillion in FY 2010. FMS provides cash management 

guidance to FPA’s, maintains the government’s accounts, and compiles and publishes 

government-wide financial information used to monitor the government’s financial status. 

Finally, FMS serves as the government’s central delinquent debt collection agency.

1B – Program History and Future Outlook

FMS’ budget reflects a strong commitment to fiscal stewardship of taxpayers funding. Even 

though the FY 2011 and FY 2012 budgets represent a 10% reduction from FY 2010 levels, FMS 

is committed to providing continued high service levels to our customers. We will fulfill this 

objective due to FMS’ innovative modernization efforts which have been implemented and 

finalized over the past years.

FMS’ FY 2012 budget directly addresses the Department’s high priority performance goal of 

significantly increasing the number of paperless transactions with the public. It also addresses 

the Administration’s priority of “going green” and consolidating data centers.

FMS supports Treasury’s paperless initiative, which requires all new enrollees in federal benefit 

programs (e.g., Social Security Administration) to receive payments electronically by May 1, 

2011. Anyone currently receiving checks would be required to switch to electronic payment by 

March 1, 2013. A second important component of the all-electronic Treasury initiative requires 

all businesses currently required to use a Federal Tax Deposit (FTD) coupon to pay 

electronically beginning January 1, 2011.

In response to a request from the Office of the Fiscal Assistant Secretary, the Commissioners of 

FMS and the Bureau of the Public Debt (BPD) determined that they could improve the efficiency 

and effectiveness of their collective information technology (IT) infrastructures. As a result, 

FMS, in partnership with BPD, initiated a project to consolidate the data centers across the two 

bureaus to help achieve the Secretary’s objective of increasing the utilization and efficiency of 

combined IT assets, while reducing technology costs. This effort also conforms to the Office of 

Management and Budget’s (OMB) Data Center Consolidation Directive which requests that all 
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federal agencies review IT spending, placing emphasis on consolidating and sharing IT services 

to reduce expenditures. Five data centers will be consolidated into two shared by both bureaus 

with one acting as a back-up to the other. This effort also includes the creation of a single 

corporate governing body, in-sourcing of select contractor functions, and consolidation of 

application development methodologies and associated infrastructure; resulting in a more 

“green” approach to the delivery of IT services. 

FMS continues to work toward increasing operational efficiencies that streamline our four main 

activities of payments, collections, government-wide accounting and reporting, and debt 

collection. Given FMS’ recent history of cost reduction, it is clear that FMS is a conscientious 

steward of taxpayer money. These cost saving measures do not inhibit our ability to deliver the 

products and services that are vital to our nation’s economic security. 

FMS continues to work toward increasing operational efficiencies and by implementing these 

initiatives will greatly facilitate the ongoing effort to modernize the Federal government’s 

payment, collections, debt collection and central accounting and reporting systems. The end 

result will be greater efficiency, cost savings, and data quality improvements throughout 

government. 

Payments

The Payments program, a component of the National Financial Critical Infrastructure, develops 

and implements federal payment policies and procedures, issues and distributes payments, 

encourages check recipients to convert to electronic payments, and assists agencies in converting 

payments from paper checks to Electronic Funds Transfer (EFT). This includes controlling and 

providing financial integrity to the payments process through reconciliation, accounting, and 

claims activities. It also includes special payments such as Federal Emergency Management 

Agency payments. In FY 2010, FMS issued more than one billion non-Defense payments worth 

over $2.3 trillion to a wide variety of recipients, such as those who receive Social Security 

benefits, veteran’s benefits, and tax refunds. Eighty-two percent of all payments disbursed were 

issued via EFT. 

Streamlining the payments processes while continually investing in state-of-the-art technology is 

integral to processing payments accurately, timely, and more safely and securely for the 

taxpayer. The Payment Application Modernization (PAM) project is an effort to replace the 

current mainframe-based software applications that are used to disburse over one billion federal 

payments annually. Ultimately, PAM will be a single application that will generate check, wire 

transfer, and ACH payments for FPAs, including the Social Security Administration, Internal 

Revenue Service, the Department of Veterans Affairs, and others. 

In FY 2012, FMS will continue to expand the use of electronic media to deliver federal 

payments. Electronic payments are safer, more secure, and more reliable than paper checks. In 

addition, electronic payments decrease the number of paper checks issued, minimizing costs and 

inefficiencies associated with the delivery of non-electronic benefits. As FMS continues to move 

to an all-electronic Treasury, the bureau will realize savings.
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Collections

The Collections program, also part of the nation’s Financial Critical Infrastructure, collects 

revenues needed to operate the federal government. In FY 2010, FMS collected $2.94 trillion, of 

which slightly more than 85 percent was collected electronically, through a network of more than 

8,000 financial institutions. A major component supporting electronic collections is the 

Electronic Federal Tax Payment System (EFTPS). EFTPS is a tax payment system that offers all 

businesses and individuals the convenience of making their federal tax payments electronically 

24 hours a day, seven days a week. Under the Paperless Treasury Initiative, all businesses 

currently using a FTD coupon will be required to pay electronically effective January 1, 2011.

FMS is in the middle of 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 (CCMM), 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.

In FY 2012, FMS will continue to expand the use of electronic collection mechanisms using the 

most advanced and secure collection technologies that are flexible enough to accommodate the 

varying needs and technical sophistication of all taxpayers and FPAs. In addition, FMS will 

work to streamline, modernize and improve the processes and systems supporting Treasury’s 

collections and cash management program. 

FMS will improve collections reporting, supplying the latest information on deposits and the 

details of collection transactions to federal agencies via a single system. As a transaction broker, 

data repository, and reporting solution, this single system will greatly improve the way agencies 

collect, analyze, and redistribute financial transaction information. The system will eliminate 

redundancies and disconnects in the government’s current collections reporting processes. 

FMS will also continue to focus on security oversight efforts at financial agent processing 

facilities and banking institutions as a way to proactively identify security control weaknesses 

and detect and deter fraud, waste, theft and unauthorized access associated with the collection of 

government remittances and protection of sensitive information. 

Government-wide Accounting

The Government-wide Accounting and Reporting program maintains the federal government’s 

accounts for its monetary assets and liabilities by operating and overseeing the government’s 

central accounting and reporting system. This includes daily cash forecasting and reporting 

(daily treasury Statement), which are components of the Nation’s Financial Critical 

Infrastructure. On a monthly basis, FMS reports the budget surplus/deficit through the release of 

the Monthly Treasury Statement (MTS – the monthly public source of budgetary results). FMS 

releases the Financial Report of the United States Government (FR), which reports the financial 

condition of the government using the accrual basis of accounting. The information in the FR 

complements the traditional cash basis budget reporting done at FMS that provides the 

authoritative information on the government’s budget surplus/deficit.
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In FY 2012, FMS in conjunction with the Office of the Fiscal Assistant Secretary, will migrate 

the legacy system that captures data related to the daily operating cash accounting function 

(CASH TRACK), to a more efficient web-based system. In addition, the two organizations are 

developing a more robust and integrated Future Forecasting System (FFS) to replace the current 

spreadsheet driven cash forecasting system.

Currently, FMS requires the agencies to classify their transactions on a monthly basis to the 

proper Treasury Account. That data is used to update the central records for fund balance with 

treasury, and to compile the MTS report in the printed form. FMS initiated a modernization 

effort (Government-wide Accounting Modernization Project (GWAMP) to classify transactions 

in real-time and leverage technology to implement a central accounting system that would 

accommodate the real-time classification of transactions. In FY 2010, FMS completed the build 

out of its central accounting infrastructure through GWAMP. The completion of this Program 

provides for improved exchange of financial information among FMS, Federal Agencies, and 

OMB. The infrastructure allows for more efficient government-wide accounting functions and 

processes that are both internal and external to FMS. The new process, will improve the 

reliability, usefulness, and timeliness of the government’s financial information, provide 

agencies and other users with better access to that information, and eliminate duplicate reporting 

and reconciliation burdens on agencies. In addition, agencies will have better tools for reporting 

financial information and access to daily account statements for monitoring the status of their 

financial information in Treasury’s central accounting system. While FMS will realize modest 

savings from this program, the most significant savings will be government-wide as agencies 

will no longer have to prepare month-end reports classifying all of their disbursement and 

collection transactions or perform reconciliations on statements of differences associated with 

month-end reporting.

With the infrastructure complete, FMS has ended the GWAMP. However, before FMS can 

decommission the legacy central accounting system (STAR) and other supporting applications, 

FMS has to migrate the reporting capabilities (MTS and Combined Statement) and the General 

Ledger from STAR to the new Central Accounting System. Part of the General Ledger initiative 

is an effort to implement the accounting entity for the General Fund (a distinct subset of the 

General Ledger Transactions) for Financial Reporting and FR compilation purposes. These 

efforts have been reconstituted as individual projects under a blanket name of STAR Transition, 

and are scheduled to be complete in FY 2012.

The Financial Information Reporting Standardization (FIRST) initiative will also leverage 

technology to replace inefficient reporting processes with a streamlined reporting process that 

will reduce the overall footprint for Financial Reporting across the Federal Government. The 

FIRST initiative is comprised of two financial reporting systems. One of those systems, the 

Government-wide Financial Report System (GFRS) is complete and is used in the FR 

compilation process. The other system, the Government-wide Treasury Account Symbol 

(GTAS) is currently being developed. GTAS will replace legacy systems (FACTS I, FACTS II, 

IFCS, IRAS data collection) that require agencies to submit four (4) different subsets of Trial 

Balance Data to FMS. GTAS will require a single set of Trial Balance data for each Treasury 
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account reported on a quarterly basis. FIRST is scheduled to be completed and go live in January 

of 2013.

These initiatives will allow us to decommission obsolete legacy systems and will address two 

material weakness regarding intra-governmental eliminations and the compilation of the 

Financial Report of the United States Government. The general fund/general ledger initiative 

will directly impact the material weaknesses associated with intra-governmental eliminations and 

compilation of the Financial Report of the United States Government.

Debt Collection

The Debt Collection program recovers 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 of 1996 (DCIA), as amended, and related 

legislation. In FY 2010, FMS collected $5.45 billion in delinquent debt. Debt referrals from 

creditor agencies were at 100 percent of eligible debt at the end of FY 2010. As a result of FMS’ 

continued program improvements, cumulative debt collections since the enactment of the DCIA 

are $48.2 billion through FY 2010.

In FY 2012, FMS will continue to enhance FedDebt, a comprehensive system that integrated 

FMS’ existing collection programs: the Treasury Offset Program (TOP) and Cross-Servicing. 

TOP compares the names and Taxpayer Identifying Numbers (TINs) of debtors with the names 

and TINs on state and federal payment files. If there is a match, the federal payment is reduced, 

or “offset,” to satisfy the overdue debt. Cross-Servicing includes the use of various collection 

tools such as offset, demand letters to debtors, repayment agreements, administrative wage 

garnishment, referrals to the Department of Justice, credit bureau reporting, reporting discharged 

debts to the Internal Revenue Service (IRS), and use of private collection agencies. FMS will 

continue developing FedDebt by implementing a centralized debt data repository. In addition, in 

an effort to more aggressively pursue delinquent debt, FMS is investing in technology that will 

provide better analytics, debt scoring, and skip tracing tools. Finally, FMS is converting its 

Austin facility from a payments processing center to a debt collection call center. These 

investments will allow FMS to realize additional opportunities to increase debt collection and 

improve efficiencies.
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Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Financial Management Service FTE Amount

FY 2010 Enacted 1,500 $244,132

FY 2011 Annualized CR Level 1,500 $244,132

Changes to Base:

Adjustment to Reach Policy Level: (125) ($10,537)

Adjustment to Reach FY 2011 President's Policy (125) ($10,537)

Maintaining Current Levels (MCLs): - $2,000

Maintaining Current Levels - $2,000

Efficiencies, Savings & Base Reductions: (175) ($11,690)

Elimination of Bureau of Economic Analysis Interagency Agreement - ($175)

Reduce Systems Development - ($1,400)

Paperless Treasury / Payment Center Repurposing (49) ($6,297)

Data Center Consolidation (121) ($685)

Migration of Human Resources Operations to Shared Service Provider (5) ($533)

Operational Efficiencies & Space Consolidation - ($2,600)

Subtotal FY 2012 Changes to Base (300) ($20,227)

Total FY 2012 Base 1,200 $223,905

Program Changes:

Program Decreases: - ($5,100)

FIRST and GWAMP Project Savings - ($5,100)

Subtotal FY 2012 Program Changes - ($5,100)

Total FY 2012 Request 1,200 $218,805

2A – Budget Increases and Decreases Description

Adjustment to Reach FY 2011 President’s Policy Level...........+$10,537,000 / +125 FTE 

Funds are adjusted from the FY 2011 Annualized Continuing Resolution (CR) Rate to reach the FY 

2011 President’s Policy Level. The President’s Policy Level is equal to the FY 2011 President’s Budget 

as adjusted for the proposed pay freeze.

Maintaining Current Levels (MCLs) ...........................................+$2,000,000 / +0 FTE 

Funds are requested for inflation adjustments in non-labor expenses such as GSA rent 

adjustments, postage, supplies, equipment and health benefits and the increase in Federal 

Employee Retirement System participation. No inflation adjustment is requested for pay in FY 

2012.

Efficiencies, Savings, and Reductions ......................................-$11,690,000 / -175 FTE 

Paperless / Payment Center Repurposing -$6,297,000/ -49 FTE 

In FY 2012, the Paperless Treasury Initiative will not only save the government money through 

consumable savings, but will also allow FMS to move from four payment centers to three. The 

repurposing of the Austin Financial Center provides FMS the opportunity to expand its 

delinquent debt activity by targeting more of the delinquent debt referred to FMS for collection.

Data Center Consolidation -$685,000 / -121 FTE 

FMS, along with BPD, will consolidate five IT data centers to two that will produce savings as a 

result of reductions in energy consumption, equipment, software, and staff. The consolidation of 

Fiscal Service data centers includes the transferring of staff from FMS to the Treasury Franchise 
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Fund. The salary and benefit costs of those FTE will be used to pay for the resulting new 

contract with the Treasury Franchise Fund.

Migration of Human Resources Operations to Shared Service Provider -$533,000 / -5 FTE 

FMS examined the feasibility of migrating its human resources program to a shared service 

provider. Based on the analysis, FMS elected to transition its HR operational functions to the 

Administrative Resource Center of the Bureau of the Public Debt. This migration is expected to 

improve the quality and cost-effectiveness of FMS’ HR operational processes. This reduction 

will offset the full cost of the shared services agreement with full implementation in 2012. 

Elimination of Bureau of Economic Analysis Interagency Agreement -$175,000 / +0 FTE

FMS has an interagency agreement with the Department of Commerce’s Bureau of Economic 

Analysis for statistical analysis required each year for the International Monetary Fund. 

However, FMS no longer has programs or activities that benefit from this expense. Elimination 

of this service would not hamper FMS efforts.

Reduce Systems Development -$1,400,000 / +0 FTE 

FMS will reduce funding related to low priority program system development and maintenance.

Operational Efficiencies & Space Consolidation -$2,600,000 / +0 FTE

FMS will identify operational efficiencies gained through improved process and modernization 

efforts. Additionally, in coordination with GSA, FMS will work to consolidate space and reduce 

the FMS' footprint in the Hyattsville Center to accommodate changes in staffing and Data Center 

consolidation.

FIRST and GWAMP Project Savings -$5,100,000 / +0 FTE

In accordance with the principles for the acquisition and management of new financial systems 

outlined in OMB Memorandum 10-26, FMS at the direction of OMB, will not proceed with new 

development on these projects in FY 2012. FMS will use this as an opportunity to recast and 

reframe these modernization efforts which will allow for the time necessary to consider the best 

path forward for GWAR modernization.
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2.2 – Operating Levels Table

Dollars in Thousands

Financial Management Service

FY 2010

Enacted

FY 2011

Annualized CR 

Level

Proposed 

Reprogram

mings

FY 2011

Proposed Operating 

Level

FY 2012 

Request

FTE 1,500 1,500 - 1,500 1,200

Object Classification

11.1 - Full-time permanent $127,561 $121,605 $0 $121,605 $106,725

11.3 - Other than full-time permanent $1,540 $1,540 $0 $1,540 $1,540

11.5 - Other personnel compensation $3,081 $5,081 $0 $5,081 $5,081

11.8 - Special personal services 

payments $3,603 $3,603 $0 $3,603 $3,603

12 - Personnel benefits $31,703 $29,999 $0 $29,999 $26,289

13 - Benefits for former personnel $180 $180 $0 $180 $180

21 - Travel and transportation of 

persons $1,511 $1,511 $0 $1,511 $1,511

22 - Transportation of things $278 $278 $0 $278 $278

23.1 - Rental payments to GSA $13,635 $14,708 $0 $14,708 $12,313

23.2 - Rental payments to others $677 $677 $0 $677 $677

23.3 - Communication, utilities, and 

misc charges $10,455 $9,942 $0 $9,942 $9,942

24 - Printing and reproduction $505 $505 $0 $505 $505

25.1 - Advisory and assistance 

services $6,062 $6,062 $0 $6,062 $6,062

25.2 - Other services $18,574 $23,674 $0 $23,674 $10,109

25.3 - Other purchases of goods and 

services from Govt. accounts $2,795 $2,795 $0 $2,795 $15,080

25.4 - Operation and maintenance of 

facilities $505 $505 $0 $505 $405

25.7 - Operation and maintenance of 

equip $8,085 $8,085 $0 $8,085 $8,085

26 - Supplies and materials $3,636 $3,636 $0 $3,636 $2,794

31 - Equipment $9,191 $9,191 $0 $9,191 $7,071

32 - Land and structures $505 $505 $0 $505 $505

42 - Insurance claims and indemnities $50 $50 $0 $50 $50

Total Budget Authority $244,132 $244,132 $0 $244,132 $218,805

Budget Activities

Payments $150,395 $142,537 $0 $142,537 $132,868

Collections $21,911 $25,267 $0 $25,267 $21,265

Government-wide Accounting and 

Reporting $71,826 $76,328 $0 $76,328 $64,672

Total Budget Authority $244,132 $244,132 $0 $244,132 $218,805
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2.3 – Appropriations Detail Table

Dollars in Thousands

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Payments 963 $150,395 963 $142,537 713 $132,868 -25.93% -11.65%

Collections 135 21,911 135 24,267 127 21,265 -6.16% -2.95%

Gov. Accounting and Reporting 402 71,826 402 77,328 360 64,672 -10.45% -9.96%

Subtotal New Appropriated Resources 0 $0 1,500 $244,132 1,500 $244,132 1,200 $218,805 -20.00% -10.37%

Other Resources:

Recoveries

Offsetting Collections - Reimbursable 483 234,690 460 216,730 561 231,223 16.15% -1.48%

Available multi-year/no-year funds

Transfers In/Out

Subtotal Other Resources 0 $0 483 $234,690 460 $216,730 561 $231,223 16.15% -1.48%

Total Resources Available for Obligation 0 $0 1,983 $478,822 1,960 $460,862 1,761 $450,028 -11.20% -6.01%

FY 2012 

Request

% Change

FY 2010 

Obligations

Resources Available for Obligation FY 2011 Annualized 

CR Level

FY 2010 

Enacted

FY 2010

to FY 2012

2B – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

FINANCIAL MANAGEMENT SERVICE

Federal Funds

SALARIES AND EXPENSES:

For necessary expenses of the Financial Management 

Service, $218,805,000 of which not to exceed $4,210,000 

shall remain available until September 30, 2014, for 

information systems modernization initiatives, and of 

which not to exceed $2,500 shall be available for official 

reception and representation expenses.

Exhibit 2B – Permanent, Indefinite Appropriations

Financial Agent Services Permanent, Indefinite Appropriation

Congress has given the Secretary of the Treasury broad discretion to deposit money in financial 

institutions and to obtain banking services by designating financial institutions to act/serve as 

Financial Agents (FA) of the United States. The services support many FMS programs such as 

Electronic Federal Tax Payment System (EFTPS), the Lockbox Networks, E-Commerce 

systems, and the deposit reporting and cash concentration system called CA$HLINK II. These 

and other programs are vital to FMS’ strategic goals, the National Financial Critical 

Infrastructure, and the expanding E-Government. The services provided by the FAs are 
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authorized under numerous statutes including, but not limited to, 12 United States Code (U.S.C.) 

90 and 265. In FY 2004, Treasury received a Permanent Indefinite appropriation to pay for these 

services. FMS estimates that the cost of FA services for FY 2012 will be approximately $623 

million, which includes $20 million for Government Sponsored Enterprise - Mortgage Backed 

Securities (GSE-MBS) administrative costs. Of this amount, approximately $80 million will be 

reimbursed from other government agencies and deposited into the General Fund.

Federal Reserve Bank Permanent, Indefinite Appropriation

The Federal Reserve Banks (FRBs) act as fiscal agents of the United States when directed by the 

Secretary of the Treasury in accordance with 12 U.S.C. 391. The FRBs support the fiscal 

operations and provide banking and financial services on behalf of the Treasury of the United 

States. Since the FRBs support many FMS program activities, the performance measures listed 

in the Salaries and Expense section of this budget apply to the work done by the FRBs. FMS 

estimates that the cost of FRB services for FY 2012 will be approximately $329 million.

Table 2.4 – Permanent, Indefinite Appropriations

2010 2011 2012

Enacted Request Request

Federal Reserve Bank $321,000 $321,000 $329,000

Financial Agent Services* $633,000 $625,000 $623,000

Note: Approximately $80M is reimbursed from other government agencies and deposited into the General 

Fund each year. 

* FY 2010, FY 2011, and FY 2012 include costs for the Government Sponsored Enterprise - Mortgage Backed 

Securities administrative costs of $36M, $20M, and $20M, respectively. 

(Dollars in Thousands)

Permanent, Indefinite Appropriation

2C – Legislative Proposals

Debt Collection

Debt Collection – For further details on these proposals please see the Treasury Green 

book summarizing the Administration’s tax legislative proposals.

Increase Levy Authority for Payments to Federal vendors with Delinquent Tax Debt

The Budget proposes a change to the Department of the Treasury’s debt collection procedures 

that will increase the amount of delinquent taxes collected from Federal contractors. Through 

the Federal Payment Levy Program, the Treasury deducts (levies) a portion of a Government 

payment to an individual or business in order to collect unpaid taxes. Pursuant to the American 

Jobs Creation Act of 2004, Treasury is authorized to continuously levy up to 100 percent of 

payments to a Federal vendor for goods or services sold or leased to the Federal government if 

the vendor has an unpaid tax liability. However, the language contains a technical imperfection 

that has the unintended effect of limiting the levy to 15 percent for vendor payments made for 

the sale or lease of real estate or other types of property. The Budget proposal will allow 

Treasury to levy up to 100 percent of any payment due to a Federal vendor with unpaid tax 

liabilities. 
FMS - 14

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.

Increase Levy Authority for Payments to Medicare Providers with Delinquent Tax Debt

The Budget proposes a change to the Department of the Treasury's debt collection procedures 

that will increase the amount of delinquent taxes collected from Medicare providers. Through 

the Federal Payment Levy Program, Treasury deducts (levies) a portion of a Government 

payment to an individual or business in order to collect unpaid taxes. Pursuant to the Medicare 

Improvements for Patients and Providers Act of 2008, Treasury is authorized to continuously 

levy up to 15 percent of a payment to a Medicare provider in order to collect delinquent tax debt. 

The Budget proposal will allow Treasury to levy up to 100 percent of a payment to a Medicare 

provider to collect unpaid taxes. 
FMS - 15

Section 3 – Budget and Performance Plan

This table lists all FY 2012 resources by strategic goal, objective and outcome outlined in the FY 

2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan provides a 

description of what the agency intends to accomplish over the next five years.

For detailed information about the FY 2007-2012 Treasury Strategic Plan, please go to: 

http://www.treasury.gov/about/budget-performance/strategic-plan/Pages/index.aspx

3.1 – Budget by Strategic Outcome

Dollars in Thousands

Treasury Strategic Outcome FY 2010 

Enacted

FY 2011 

Annualized 

CR Level

FY 2012 

Request

% Change

FY10 to FY12

Financial Information 75,949 81,543 69,084 -9.04%

Revenue Collected 115,421 105,722 118,515 2.68%

Payments 287,452 273,597 262,429 -8.71%

Total $478,822 $460,862 $450,028 -6.01%

3A – Payments ($132,868,000 from direct appropriations and $129,561,000 from reimbursable 

programs): FMS is responsible for managing and operating federal payment systems and for 

disbursing approximately 85 percent of all federal payments. It is comprised of a headquarters 

staff and Regional Financial Centers (RFCs). Major payments include: social security benefits, 

supplemental security income, federal pension benefits, veterans’ compensation, railroad 

retirement pensions, and tax refunds. An electronic payment is an electronic funds transfer made 

by direct deposit via the Federal Reserve Bank’s Automated Clearing House system to more than

28,000 member financial institutions nationwide. In FY 2010, the centers disbursed over one 

billion payments, totaling over $2.3 trillion dollars.

This activity also includes controlling and providing financial integrity to the payments process 

through reconciliation, accounting, and claims activities. The claims activity settles claims 

against the United States resulting 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. It is important to note that 100 percent of funds devoted to the payments 

activity support the National Financial Critical Infrastructure.

FMS continues, through its Paperless Treasury Initiative, to encourage recipients to convert to 

electronic payment methods through public education programs, improve service to payment 

recipients, and reduce government program costs. This helps decrease the number of paper 

checks issued and minimize costs associated with postage, the re-issuance of lost, stolen and 

misplaced checks, and inefficiencies associated with the non-electronic delivery of benefits. 

To help with this endeavor, FMS continues with a nationwide campaign called “Go Direct” to 

encourage current check recipients to switch to direct deposit. In five extremely successful 

years, the Go Direct Campaign has reached 5 million conversions, saving millions of dollars for 

the U.S. Treasury in years to come. 
FMS - 16

Direct deposit offers federal benefit payment recipients ease and convenience, and protects 

against fraud and identity theft. Direct deposit also generates significant cost savings to the 

government over paper checks. This is attributable to consumable inventory and postage costs 

which are mitigated with each EFT payment. These programs are especially important as the 

government prepares for the huge increase in retiring baby boomers in the near future, and it is 

thus critical that FMS dramatically increase use of direct deposit for issuing benefit payments.

 Direct Express® Debit MasterCard®card offers the convenience and security of receiving 

benefit payments electronically for those who prefer a prepaid debit card or those who do not 

have a bank account. Instead of receiving a paper check, the benefit payment is 

automatically deposited into the recipient’s Direct Express®card account on payment date. 

The card is currently available to Social Security, SSI, Veterans’ Compensation and Pension, 

and Railroad Retirement Board benefit recipients, and FMS is optimistic that other benefit 

payments will be implemented in CY 2011. As of December 2010, more than 1.5 million 

beneficiaries signed up for the Direct Express®card.

In support of its payments function, FMS has also undertaken considerable efforts to modernize 

its payment systems, incorporating new technologies and the internet. Some programs that will 

continue to be in focus are:

 Stored Value Card (SVC): This smartcard is similar to a credit/debit card, using an encrypted 

computer chip to process "electronic money" stored on the card. This program is aimed at 

reducing the float-loss and reducing risk associated with the more than $2 billion in coin and 

currency in circulation at military bases, ships at sea, and other closed government locations 

around the world. From 1997 through FY 2010, over 27 million EFT transactions with a 

dollar value in excess of $4.2 billion were processed via the SVC programs. In FY 2010 

alone, the SVC programs collected over $1 billion through the processing of over 7.5 million 

EFT transactions.

 Internet Payment Platform (IPP): The IPP is a centralized, secure, Web-based application 

service that accepts, processes, and presents data from agencies and supplier systems related 

to all stages of electronic order-to-payment transactions: purchase orders, invoices, 

approvals, and ACH payment information, including aftermath activity such as partial 

payments, debt offsets and returns.

 Payment Application Modernization (PAM): The PAM project is an effort to replace the 

current mainframe-based software applications that are used to disburse approximately one

billion federal payments annually. PAM is a single application that generates check, wire 

transfer, and ACH payments for FPAs, including Social Security, IRS, Veterans Affairs, and 

others. In addition to standardization, FMS is modernizing the technologies employed in the 

development of the system, using commercial software products where feasible. 

Additionally, the project incorporates new and enhanced functionality to support 

improvements in the payment process. In FY 2012, PAM will deploy an architecture refresh 

and data stage upgrade, continue converting FPAs to the PAM standard format, begin 

transition of remaining legacy applications who have not converted to the PAM standard 

format, and enhance usability and performance.
FMS - 17

3.2.1 Payments Budget and Performance Plan

Payments Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Enacted Annualized CR 

Level

Request

 Appropriated Resources $171,686 $147,717 $150,395 $142,537 $132,868

 Reimbursable Resources $130,853 $138,584 $137,057 $131,060 $129,561

Total Resources $302,539 $286,301 $287,452 $273,597 $262,429

Budget Activity Total $302,539 $286,301 $287,452 $273,597 $262,429

Description of Performance: FMS disburses payments to a wide variety of recipients, such as 

those who receive Social Security Administration payments, Internal Revenue Service tax 

refunds, and the Department of Veterans Affairs benefits. In FY 2010, FMS issued more than 

one billion non-Defense payments, with a dollar value of over $2.34 trillion. More than 82 

percent of these transactions were issued by Electronic Funds Transfer (EFT). In FY 2012, FMS 

is projecting the percentage of electronic payments to be 85 percent.

3B – Collections ($21,265,000 from direct appropriations and $198,000 from reimbursable 

programs): FMS collects revenues needed to operate the federal government through the 

management of the federal government’s collections infrastructure. The collections activity is 

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Percentage of Paper Check and 

Electronic Funds Transfer (EFT) 

Payments Made Accurately And 

On-Time (Oe)

100.0 100.0 100.0 100.0 100.0

Percentage of Treasury Payments 

and Associated Information Made 

Electronically (Oe)

79.0 81.0 82.0 83.0 85.0

Unit Cost For Federal Government 

Payments (E)

0.39 0.37 0.36 0.40 0.37

Number of Electron Payments 

(Thousands) (Ot)

793,832 827,643 801,576 867,215 938,168

Number of Check Payments 

(Thousands) (Ot)

205,604 196,686 175,920 186,442 173,761

Number of Check Claims 

Submitted (Thousands) (Ot)

1,461 1,219 1,109 1,200 N/A

Average Number of Days to Settle 

a Claim (Ot)

N/A N/A N/A N/A 30

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

DISC - Discontinued, and B - Baseline
FMS - 18

also part of the nation’s critical infrastructure. FMS collected nearly $2.94 trillion in FY 2010 

through a network of more than 8,000 financial institutions. It also manages the collection of 

federal revenues such as individual and corporate income tax deposits, customs duties, loan 

repayments, fines and proceeds from leases. FMS establishes and implements collection 

policies, regulations, standards and procedures for the federal government. The majority of 

dollar collections are made electronically. While 85 percent of federal revenue was collected 

electronically in FY 2010, the Paperless Treasury Initiative will help FMS improve the 

percentage of tax revenue collected electronically by requiring all businesses currently required 

to use a FTD coupon to pay electronically effective January 1, 2011.

FMS develops and operates a variety of collection mechanisms and systems to meet program 

agency needs. It has initiated a comprehensive effort, CCMM, to streamline, modernize and 

improve the processes and systems supporting Treasury’s collections and cash management 

program. This effort 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. Additionally, it will improve 

timeliness by providing FPAs with the ability to predefine accounting rules to facilitate timely 

processing of financial transactions through the re-engineering of reporting processes. It will 

also reduce the number of collections and cash management systems and processes and eliminate 

the duplication of data, products, interfaces, and technologies. This effort will simplify and 

standardize systems and processes that have accumulated over 30 years.

FMS continues to promote the use of electronic systems in the collections process and assist 

agencies in converting collections from paper to electronic media with programs such as:

 Electronic Federal Tax Payment System (EFTPS): EFTPS collects approximately 82

percent of United States tax dollars and is required for businesses with annual federal tax 

obligations above $200,000. Starting in 2011, in support of the Paperless Treasury 

Initiative, businesses using paper FTD coupons will be instructed to use EFTPS. IRS 

research has shown that businesses using EFTPS are 31 times less likely to make an 

error. FMS has been working to communicate the benefits of EFTPS – accuracy, 

security, simplicity, and flexibility – to financial institutions, small businesses and tax 

practitioners. The goal is to encourage businesses and individuals to pay their federal 

taxes electronically through EFTPS rather than by using paper FTD coupons, which were 

reduced in FY 2010 by 24 percent over FY 2009. FMS will direct its EFTPS efforts to 

financial institutions that process paper tax coupons as well as the tax practitioner 

community and small businesses to further expand the use of EFTPS. Additionally, FMS 

has implemented a new on-line interface that will allow financial institutions and other 

third parties to remit tax payments to EFTPS on behalf of their customers. In FY 2010, 

more than 108 million payments were processed through EFTPS totaling more than $1.98 

trillion.

 Pay.gov: Pay.gov is a system allowing individuals and businesses to make nontax 

payments to federal agencies over the internet. Pay.gov provides collections, form 

submittal, and bill presentment. Pay.gov meets the increasing demands of consumers 

and businesses for electronic alternatives by providing the opportunity to complete forms 
FMS - 19

and applications, make payments, and submit queries online 24 hours a day, seven days a 

week. Pay.gov, currently serves 153 federal agencies representing 667 cash flows. In FY 

2010 Pay.Gov processed over 49 million transactions and collected over $80 billion. 

New developments will focus on interfaces with new systems within the new Collections 

Business Line Enterprise Architecture, improved interfaces with federal agencies, and 

enhanced functionality to take advantage of same-day ACH transactions.

 Check Conversion and Truncation: Paper Check Conversion Over-The-Counter (PCC 

OTC) and Electronic Check Processing (ECP) are programs utilized to convert paper 

checks received at federal agency and lockbox sites into electronic debits to the check 

writer's account through the Automated Clearing House (ACH) system, or into a 

substitute check image that is truncated and cleared under the authority of Check 21. The 

funds are deposited into Treasury's account at the Federal Reserve Bank. These 

programs leverage image technology and eliminate the need to photocopy checks, 

safeguard checks, or process paper by providing a complete electronic record of all check 

images and related financial data accessible via a web-based archive. In FY 2010, more 

than 10.6 million items were received over-the-counter, representing more than $17.1 

billion, and processed through check conversion or truncation. Additionally, more than 

43.8 million items received through the mail at lockboxes, representing $20.5 billion, 

were similarly processed. FMS's target is that all paper checks remitted to the federal 

government will be converted or truncated and processed electronically.

3.2.2 – Collections Budget and Performance Plan

Collections Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Enacted Annualized CR 

Level

Request

 Appropriated Resources $23,103 $21,521 $21,911 $24,267 $21,265

 Reimbursable Resources $141 $0 $113 $1,419 $198

Total Resources $23,244 $21,521 $22,024 $25,686 $21,463

Budget Activity Total $23,244 $21,521 $22,024 $25,686 $21,463

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Percentage Collected Electronically of Total Dollar Amount of 

Federal Government Receipts (Oe)

80.0 84.0 86.0 86.0 88.0

Unit Cost to Process a Federal Revenue Collection Transaction 

(E)

1.47 1.57 1.67 1.70 1.70

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

DISC - Discontinued, and B - Baseline
FMS - 20

Description of Performance: In FY 2010, FMS collected $2.94 trillion through a network of more 

than 9,000 financial institutions. Slightly more than 85 percent of the funds was collected 

electronically. While FMS continued to promote and convert collections from paper to the more 

efficient electronic media in FY 2010, there are a number of factors that have adversely affected 

the unit cost metric. It is projected that the unit cost metric for collections will increase over the 

next three years due to two primary factors: 1) The current economic conditions; and 2) 

Increased expenses during the transition to a fully implemented Collections and Cash 

Management Modernization (CCMM) initiative.

The economic climate has had a major influence on the unit cost for collections. Recessionary 

business failures and job losses have caused fewer employers to report withholding transactions 

to the Electronic Federal Tax Payment System (EFTPS). Similarly, small business failures and 

job losses reduced the number of tax filers using the IRS Lockbox Network. For example, 

during the Spring 2009 tax season, tax transaction receipts were down by 22 percent. Since 

some of the costs of EFTPS and the IRS Lockbox Network are fixed, the unit cost per item 

increased. 

In addition, FMS has embarked on a multi-year initiative that will streamline, modernize, and 

improve the processes and systems supporting Treasury’s collections and cash management 

program. FMS is building a number of new systems that will fulfill its enterprise architecture 

goals. When this initiative is fully implemented, FMS will operate only 13 collection and cash 

management systems or services, decommissioning 20 other systems or services. The CCMM 

initiative will make it much more efficient for FMS to collect government receipts. Full 

implementation of this initiative includes new systems deployment and agency conversions to 

these new systems. Until full implementation is realized, FMS must continue to maintain legacy 

systems and processes, and incur the costs to maintain those systems as well.

3C – Debt Collection ($97,052,000 from reimbursable programs): FMS collects delinquent 

government and child support debt by providing centralized debt collection, oversight and 

operational services to FPAs and states pursuant to the Debt Collection Improvement Act 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 on improving debt management, and referrals to the Department of Justice. 

To better utilize internal resources for increased debt collection activity, especially in the crossservicing of existing debt, resulting in the collection of additional delinquent debt, FMS was able 

to begin re-purposing the Austin payments facility to a debt collection call center in FY 2011; 

this effort should be finalized in FY 2012.

Additionally, FMS will continue to enhance FedDebt, a comprehensive system that integrated 

FMS’ existing collection programs: Cross-Servicing and the Treasury Offset Program (TOP). 

TOP compares the names and Taxpayer Identifying Numbers (TINs) of debtors with the names 

and TINs on state and federal payment files. If there is a match, the federal payment is reduced, 

or “offset,” to satisfy the overdue debt. Cross-Servicing includes the use of various collection 

tools such as offset, demand letters to debtors, repayment agreements, administrative wage 
FMS - 21

garnishment, referrals to the Department of Justice, credit bureau reporting, reporting discharged 

debts to the Internal Revenue Service (IRS), and use of private collection agencies.

FedDebt provides FPAs with batch and online capabilities for all users, via a single sign-on 

interface and will employ a common file format for submitting debts to either Cross-Servicing or 

TOP. FedDebt provides a single platform for debt business applications, a single entry portal, a 

web-based customer interface, and a single database for reporting. FedDebt eliminates many 

labor-intensive processes and hard-copy data exchanges for federal and state agency customers 

and service partners. FMS will continue developing FedDebt by implementing a centralized debt 

data repository. 

FMS is working to incorporate additional payment types into the payment offset and levy 

programs. This effort is directed primarily at increasing collections of debt, especially tax debt 

owed by contractors and vendors. The Defense Finance and Accounting Service is currently in 

the process of levying civilian salaries. In addition, the Centers for Medicare and Medicaid 

Services (CMS) offset program began in 2009, as did the Railroad Retirement Board levy 

program. The Postal Service began taking vendor payment offsets and levies in late 2009. 

Finally, enhancements of collection tools such as administrative wage garnishment and Debt 

Check, an online database used to assist agencies in barring delinquent debtors from obtaining 

new loans or loan guarantees, will improve program performance.

3.2.3 Debt Collection Budget and Performance Plan

Debt Collection Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Obligated Annualized CR 

Level

Request

 Appropriated Resources $0 $0 $0 $0 $0

 Reimbursable Resources $74,705 $86,247 $93,397 $80,036 $97,052

Total Resources $74,705 $86,247 $93,397 $80,036 $97,052

Budget Activity Total $74,705 $86,247 $93,397 $80,036 $97,052

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Amount of Delinquent Debt Collected Per $1 Spent (E) 54.76 53.76 54.54 43.0 45.0

Amount of Delinquent Debt Collected Through All Available Tools 

($ billions) (Ot)

4.41 5.03 5.50 5.50 5.80

Percentage of Delinquent Debt Referred to FMS for Collection 

Compared To Amount Eligible For Referral (Ot)

99.0 100.0 100.0 97.0 98.0

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

DISC - Discontinued, and B - Baseline
FMS - 22

Description of Performance: In FY 2010, FMS collected $5.45 billion in delinquent debt 

including $12.8 million from Economic Recovery Payments. The amount collected includes 

$2.10 billion in past due child support, $2.30 billion in federal nontax debt, and over $1.05

billion in federal tax levies and state tax debt offsets. Debt referrals from creditor agencies were 

at 100 percent of eligible debt at the end of FY 2010. As a result of the continued program 

improvements, cumulative collections since enactment of the Debt Collection Improvement Act 

of 1996 are $48.2 billion. In calendar year 2010, the Internal Revenue Service referred an 

additional $54 billion of tax debts for continuous levy, a 15 percent increase over calendar year 

2009.

3D – Government-wide Accounting and Reporting ($64,672,000 from direct appropriations

and $4,412,000 from reimbursable programs): The Government-wide Accounting and Reporting 

(GWA) activity maintains the federal government’s 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. It provides support, guidance, and training to assist FPAs in improving their 

government-wide accounting and reporting responsibilities. FMS collects, analyzes, 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. 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). It is important to 

note, the cash reporting function of GWA supports the National Financial Critical Infrastructure. 

FMS is taking other significant steps to address the material weaknesses found in the compilation 

process of the FR including: 

 Requiring comprehensive accounting data from agencies on a quarterly basis that will 

allow FMS to better analyze the data for consistency and completeness.

 Providing agencies with authoritative data to reconcile inter-agency transfers and other 

transactions that agencies report to the central accounting system.

 Using the Chief Financial Officers (CFO) Council, Central Reporting Team as a forum to 

discuss accounting and reporting issues that affect the FR.

 Working with the CFO Council and OMB to develop more consistent business rules for 

intra-governmental transactions.

 Reconciling the agency data to central accounting data which FMS uses to prepare the 

Reconciliations of Net Cost and Unified Budget Deficit Statement and the Statement of 

Changes in Cash Balance from Unified Budget and Other Activities.

 Strengthening internal controls over the process for preparing the FR.
FMS - 23

The goal of these actions is to remove the compilation process as a barrier to a clean audit 

opinion for the FR.

3.2.4 Government-wide Accounting and Reporting Budget and Performance Plan

Government-wide Accounting and Reporting Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Obligated Obligated Obligated Annualized CR 

Level

Request

 Appropriated Resources $72,420 $70,547 $71,826 $77,328 $64,672

 Reimbursable Resources $726 $3,179 $4,123 $4,215 $4,412

Total Resources $73,146 $73,726 $75,949 $81,543 $69,084

Budget Activity Total $73,146 $73,726 $75,949 $81,543 $69,084

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Percentage of Government-Wide Accounting Reports Issued 

Accurately (%) (Oe)

100.0 100.0 100.0 100.0 100.0

Percentage of Government-Wide Accounting Reports Issued 

Timely (E)

100.0 100.0 100.0 100.0 100.0

Unit Cost to Manage $1 Million Dollars of Cash Flow (E) 8.96 7.08 7.36 10.15 8.90

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

DISC - Discontinued, and B - Baseline

Description of Performance: FMS issues 100 percent of its government-wide accounting reports 

accurately and timely. Annually, FMS releases the Financial Report of the United States 

Government (FR). The FR has been audited by the Government Accountability Office (GAO) 

since 1997, and has received a disclaimer of opinion each year. Treasury continues to take steps 

to help resolve differences in intragovernmental activity and balances; and during fiscal year 

2010, Treasury, in coordination with the Office of Management and Budget, continued 

implementing corrective action plans and made progress addressing certain internal control 

deficiencies that they have previously reported.

For detailed information about each performance measure, including definition, verification and 

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
FMS - 24

Section 4 – Supporting Materials

4A – Human Capital Strategy Description

FMS’ strategic management of human capital is consistent with its mission, vision, and priorities 

supporting Treasury’s strategic goal to manage the United States government’s finances 

effectively.

FMS is on the technology forefront in the performance of its mission and has taken steps to 

improve the quality of its professional workforce. A Human Capital Strategic Plan has been 

developed to identify opportunities and build upon our strengths. Achieving the following 

objectives will support and strengthen its work force:

 Strategic Alignment: A human capital strategy is aligned with FMS’ mission, goals, 

organizational objectives, and is integrated into the strategic plans, performance plans,

and budgets.

 Critical Success Factors: Recognizing that an organization’s mission, vision, and values 

provide an insight into why the organization exists, where the organization is heading, 

and how it will conduct its business, FMS has embarked on a rigorous enterprise-wide 

activity to crisply define our mission, vision, and values, as well as to define and draw 

attention to the essential elements – the Critical Success Factors – that are key to our 

continued success.

 Workforce Planning & Deployment: FMS is citizen-centered and mission-focused. It 

leverages E-Government and competitive sourcing.

 Leadership & Knowledge Management: Leaders and managers effectively manage 

people, ensure continuity of leadership, and sustain a learning environment that drives 

continuous improvement in performance. Succession strategies result in a diverse 

leadership talent pool that is continually updated.

 Results-Oriented Performance Culture: FMS has a diverse, results-oriented, high 

performance workforce. It has a performance management system and awards program 

that effectively holds employees accountable, links individual/team/unit performance to 

organizational goals and desired results.

 Diversity: FMS demonstrates its commitment to diversity by recognizing the 

contributions of all employees and by understanding the strengths that arise from the 

broad range of backgrounds, cultures, customs, and beliefs. FMS has processes in place 

to sustain diversity and to address under-representation particularly in mission-critical 

occupations and leadership positions.

 Talent: FMS has significantly reduced gaps in mission-critical skills, knowledge and 

competency. FMS is making significant progress and demonstrates continued 

improvement in meeting agreed-upon hiring timeline goals, i.e., the 45-day hiring model.

 Accountability: Human capital decisions are guided by a data-driven results-oriented 

planning and accountability system.
FMS - 25

Through these objectives FMS has strengthened its human capital position. Proactive 

identification and filling of vacant positions is a part of recruiting and retaining new talent. FMS 

utilizes all intern program authorities, to the extent possible, in order to attract talent from some 

of the best colleges and universities. 

FMS has action plans to obtain and maintain the right number of people with the right skills to 

accomplish the mission. It continually manages the ongoing challenge of recruiting and 

retaining highly skilled individuals in critical areas, including Accountants (with strong 

analytical skills) and IT Specialists. These challenges have increased with heightened 

competition from the private sector. In addition, there is ongoing position management and 

assessment of FTE distribution. As vacancies occur, they are reviewed to determine whether the 

position should be back-filled, redirected as appropriate, or eliminated. This is one way FMS 

counters the possibility of either a surplus or deficiency of staff in certain job occupations. 

Through FY 2010, 22 percent of FMS’ current employees are eligible for Optional Retirement 

and 41 percent are eligible for Discontinued Service or Early Retirement. Strategies are in place 

to close skill-gaps and fill staffing requirements in mission-critical occupations. This includes 

use of all pay incentives within budget constraints (e.g., recruitment and retention incentives) and 

specialized employee development programs such as: SES Candidate Development, Project 

Management Certification, Management Preparatory Development, Federal Career Intern 

Program, Leadership, and Mentoring. 

FMS believes that maintaining a diverse workforce is vital to its mission. It monitors 

recruitment and diversity goals to improve areas of under-representation and actively supports 

programs and initiatives to recruit minority college students. The following programs have been 

established to ensure a diverse workforce: 

 SES Candidate Program was developed to create a diverse group of future senior 

executives.

 Special emphasis programs were expanded and Equal Employment Opportunity and 

diversity awareness training was instituted.

 Hispanic recruitment was enhanced through the increased use of Hispanic Associations 

of Colleges and Universities interns, which created a gateway for new Hispanic 

employees.

In addition, FMS has increased participation in the Washington Internship for Native Students 

Program and the Department of Labor’s Workforce Recruitment Program for students with 

disabilities.
FMS - 26

4.1 – Summary of IT Resources Table

Dollars in Thousands

Major IT Investments / Funding Source Budget Activity FY 2009 

Enacted

FY 2010 

Enacted

FY 2011 

AnnualizedC

R Level

FY 2012 

Request 

Automated Standard Application for Payments (ASAP) Payments 2,398 2,165 -9.72% 1,771 1,843 -14.87%

Debit Gateway Collections - 300 N/A 300 300 0.00%

Deposit and Data Management (DDM) Collections 1,120 1,146 2.32% 1,194 1,194 4.19%

FMS EFTPS (Electronic Federal Tax Payment System) Collections 659 682 3.49% 705 729 6.89%

FedDebt Debt Collection - - N/A - - N/A

Financial Information and Reporting Standardization (FIRST) Government-wide Accounting 7,098 7,501 5.68% 6,649 3,623 -51.70%

Government-Wide Accounting and Reporting Modernization (GWAMP) Government-wide Accounting 9,787 9,983 2.00% 10,186 8,323 -16.63%

International Treasury Services (ITS.gov) 1/ Payments 341 351 2.93% 362 372 5.98%

Internet Payment Platform (IPP) Payments 308 318 3.25% 329 338 6.29%

Intra-Governmental Payment and Collection (IPAC) Government-wide Accounting 552 638 15.58% 660 673 5.49%

Over the Counter Channel Application (OTCnet) Collections 403 305 -24.32% 459 390 27.87%

PACER Payments 2,631 2,744 4.29% 2,800 2,889 5.28%

Pay.gov Collections 569 480 -15.64% 497 515 7.29%

Payment Application Modernization (PAM) Payments 12,123 13,906 14.71% 16,937 16,793 20.76%

Print and Check Enclosing (PrinCE) Payments - 3,613 N/A 1,173 1,108 -69.33%

Secure Payment System (SPS) Payments 3,717 3,403 -8.45% 3,716 3,822 12.31%

Treasury Check Information System (TCIS) Payments 996 1,154 15.86% 1,443 1,248 8.15%

Treasury Collateral Management and Monitoring (TCMM) Collections - 134 N/A 96 282 110.44%

Subtotal, Major IT Investments 42,702 48,823 14.33% 49,277 44,442 -8.97%

non-major IT Investments 2/ 5,912 12,355 108.99% 8,689 6,997 -43.37%

Infrastructure Investments 3/ 23,200 154,696 566.79% 158,314 158,662 2.56%

Enterprise Architecture 5,493 3,655 -33.46% 3,655 2,799 -23.42%

Total IT Investments 4/ 77,307 219,529 183.97% 219,935 212,900 -3.02%

1/ ITS.gov was changed from a non-major to a major investment in FY 2009.

2/ PrinCE was changed from a non-major to a Major in FY2009.

* Infrastructure reporting requirements changed in FY 2009, which resulted in changes to FY 2010 and FY 2011 figures.

4/ Figures provided for FY 2009 include funding amounts for the Treasury Web Application Infrastructure (TWAI) platform that were not included in previous years. 

3/ In FY 2009, the number of non-majors reporting increased to 17 investments. 

% Change from 

FY 2009 to FY 

2010

% Change from 

FY 2010 to FY 

2012
FMS - 27

4B – Information Technology Strategy

The FMS IT Strategy addresses all bureau information resource management. It focuses on 

technology and how it supports FMS’ Strategic Plan which is a long-range plan that supports the 

economic policies and mission of the Department of the Treasury for payments, collections, 

government-wide accounting and reporting, and collection of delinquent debt.

Governance Process

FMS has an established governance process that selects, evaluates, and monitors new and 

existing IT investments. FMS’ IT Governance Process complies with Department of the 

Treasury and OMB requirements for Capital Planning and Investment Control, and Enterprise 

Architecture. Before projects are started or a major change implemented, there is a formal 

review process beginning with the FMS Division Information Officer (DIO) Council. Each 

project provides the DIO Council with project business case documentation, which describes the 

project, documents benefits, and shows start-up costs, full life-cycle costs, other systems 

impacted, programmatic impact, and platforms that will be used. Costs include all project costs 

including contracts, FTE, hardware, and software. The FMS governing bodies, including the 

DIO Council and Architecture Review Board (ARB), review each investment to ensure 

compliance with FMS’ target architecture, use of existing infrastructure, and shared resources 

(e.g., document imaging and Single-Sign On). At least once a year, each FMS project is 

presented to the DIO Council. Current cost, schedule, and performance goals status for the 

project are presented. Any project that is not within acceptable cost, schedule, and performance 

goals must provide the DIO Council with a project remediation plan detailing the steps it plans to 

implement to get the investment back within acceptable ranges. The project is also required to 

provide the DIO Council with quarterly cost, schedule, and performance updates. The FMS 

governance process includes recommendations by the DIO Council for approval/disapproval of 

all IT investments and major enhancements. The FMS executive board must also approve all 

large scale IT projects and it conducts quarterly reviews of all major FMS investments.

Fiscal IT

FMS, in partnership with BPD, initiated a project to consolidate the data centers across the two 

bureaus to help achieve the Secretary’s objective of increasing the utilization and efficiency of 

combined IT assets, while reducing technology costs. This effort also conforms to the Office of 

Management and Budget’s Data Center Consolidation directive which requests that all federal 

agencies review IT spending, placing emphasis on consolidating and sharing IT services to 

reduce expenditures. This effort includes consolidation of five data centers into two shared by 

both bureaus with one acting as a back-up to the other, creation of a single corporate governing 

body, in-sourcing of select contractor functions, and consolidation of application development 

methodologies and associated infrastructure while resulting in a more “green” approach to 

delivery of IT services.