Financial Management Service 

Program Summary by Budget Activity 

(Dollars in thousands) 

FY 2008 FY 2009 FY 2010 Appropriation Enacted Enacted Request $ Change % Change

Salaries and Expenses $298,598 $239,785 $244,132 $4,347 1.8%

 Payments $210,152 $147,717 $150,395 $2,678 1.8%

 Collections $19,804 $21,521 $21,911 $390 1.8%

 Government-wide Accounting and Reporting $68,642 $70,547 $71,826 $1,279 1.8%

Subtotal, Financial Management Service $298,598 $239,785 $244,132 $4,347 1.8%

Offsetting Collections - Reimbursables $215,179 $228,010 $234,690 $6,680 2.9%

Total Program Operating Level $513,777 $467,795 $478,822 $11,022 2.4%

Note: The FY 2008 Enacted Column includes $64.2 Million in Economic Stimulus Funds.

Explanation of Request 

 

The Financial Management Service (FMS) FY 

2010 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. 

Total resources required to support FMS 

activities for FY 2010 are $478,822,000, 

including $244,132,000 from direct 

appropriations, and $234,690,000 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. 

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 $3.1 

trillion in FY 2008. 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. 

Department of the Treasury - Budget in Brief FY 2010 Page 47
FMS FY 2010 Budget Highlights

(Dollars in thousands) 

Appropriation Amount

FY 2009 Enacted 239,785

Changes to Base: 

Maintaining Current Levels (MCLs): $4,347

Across the Board Program Reduction (1,174)

Pay Annualization 1,558

Pay Inflation Adjustment 3,155

Non-Pay Inflation Adjustment 808

Subtotal FY 2010 Changes to Base $4,347

Total FY 2010 Base 244,132

Total FY 2010 President's Budget Request 244,132

FY 2010 Budget Adjustments 

 

FY 2009 Enacted 

The FY 2009 enacted direct appropriation 

for FMS is $239,785,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain 

Current Levels +$4,347,000 / +0 FTE

Funds are requested for: Across the Board 

Program Reduction of $1,174,000; FY 2010 

cost of the January 2009 pay increase of 

$1,558,000; proposed January 2010 pay 

raise of $3,155,000; and non-labor related 

items such as contracts, travel, supplies, 

equipment and GSA rent adjustments of 

$808,000. 

Explanation of Budget Activities 

 

Salaries and Expenses 

Payments ($150,395,000 from direct 

appropriations and $137,057,000 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 ($21,911,000 from direct 

appropriations and $113,000 from 

reimbursable programs) FMS collects 

revenues needed to operate the Federal 

Government through the management of the 

Federal Government’s collections 

infrastructure. FMS collected a record of 

$3.2 trillion in FY 2008 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 ($93,397,000 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 ($71,826,000 from direct 

appropriations and $4,123,000 from 

reimbursable programs) The Governmentwide Accounting and Reporting activity 

Department of the Treasury - Budget in Brief FY 2010 Page 48
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 governmentwide 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 

 

Authorize Post-Levy Due Process for 

Levies Under the Federal Payment Levy 

Program 

This proposal would further expand the 

exception to the requirement for pre-levy 

collection due process (CDP) hearing 

proceedings. This would include levies 

issued to collect Federal tax liabilities from 

Federal vendor payments under the Federal 

Payment Levy Program. The proposal will 

allow IRS to levy the payment at the time 

the payment is identified. Debtors will have 

an opportunity for a CDP hearing within a 

reasonable period after the levy. This 

proposal is estimated to result in an 

additional $1.2 billion in collections over ten 

years. 

Technical Correction to Allow IRS to 

Levy 100 Percent of All Vendor 

Payments to Collect Delinquent Taxes 

The current language, which was intended to 

cover all Federal vendor payments, refers to 

payments for "goods and services." This 

has been interpreted to exclude payments for 

the purchase or lease of real estate. 

Therefore, a technical correction is proposed 

to ensure that all Federal vendor payments 

are covered. This proposal is estimated to 

result in an additional $845 million in 

collections over ten years. 

FMS Performance by Budget Activity 

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Budget Activity Performance Measure Actual Actual Actual Target 

Met? Target Target

Payments Percentage of Treasury payments and 

associated information made 

electronically (%) (Oe) 

77.00 78.00 79.00 Yes 80.00 81.00 

Collections Percentage collected electronically of 

total dollar amount of Federal 

government receipts (%) (Oe) 

79.00 79.00 80.00 Yes 80.00 80.00 

Debt Collection Amount of delinquent debt collected 

through all available tools ($ billions) 

(Ot) 

3.34 3.76 4.41 Yes 3.90 3.70 

Government wide Percentage of Government-wide 

Accounting and accounting reports issued accurately 

Reporting (%) (Oe) 

100 100 100 Yes 100 100 

Government wide Percentage of Government-wide 

Accounting and accounting reports issued timely (%) 

Reporting (E) 

100 100 100 Yes 100 100 

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

Satisfaction 

Department of the Treasury - Budget in Brief FY 2010 Page 49
Description of Performance 

 

Payments: In FY 2008, FMS issued 

nearly 1 billion non-Defense payments 

worth $1.8 trillion to a wide variety of 

recipients, such as those who receive 

Social Security benefits, IRS tax 

refunds, and veterans’ benefits. Seventynine percent of all payments disbursed 

were issued via direct deposit. In 

addition, FMS issued an additional 119 

million Economic Stimulus Payments 

valued at over $96 billion. Over 36 

percent of the Economic Stimulus 

Payments were issued by direct deposit. 

In FY 2010, 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 2008, FMS collected 

a record $3.2 trillion of which 80 percent 

was collected electronically through a 

network of more than 9,000 financial 

institutions. Dollar revenues collected in 

FY 2008 exceeded those collected in FY 

2007. 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 (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. 

Debt Collection: In FY 2008, FMS 

collected a record $5.9 billion in 

delinquent debt which includes $1.5 

billion in Economic Stimulus payment 

offsets. As a result of FMS’ program 

improvements, total collections since the 

enactment of the DCIA in 1996 are over 

$37.4 billion through FY 2008. FMS 

will continue to roll out Debt Check, an 

online program used to help agencies bar 

delinquent debtors from obtaining new 

loans or loan guarantees 

Government-wide Accounting and 

Reporting: For FY 2008, FMS released 

the Financial Report of the United States 

Government (FR) 75 days after the fiscal 

year-end. 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 2010 Page 50