Message from the Secretary of the Treasury

Dear Member:

The Fiscal Year (FY) 2017 President’s Budget requests $13.3 billion for Treasury’s operating 

bureaus and $2.3 billion for our International Programs. The proposal identifies investments to 

fairly collect revenue—including a program integrity cap adjustment yielding a net increase of 

$46 billion over the next ten years—and investments that fight terrorism, improve cybersecurity,

and continue strengthening our nation’s long-term economic and fiscal position. 

The request makes strategic investments in the Internal Revenue Service (IRS) to improve 

service to tens of millions of taxpayers and reduce the deficit through more effective tax 

administration. The IRS collects more than 90 percent of federal revenue and interacts with 

virtually every American. We recognize the increased funding for the IRS in FY 2016 and hope 

it reflects a step back towards providing the resources needed to fulfil its critical mission. 

Despite the increase, the IRS remains severely underfunded; its current operating budget is $911 

million lower than it was in FY 2010. These reductions are costing billions of dollars each year 

in lost enforcement revenue, yielding poor customer service for taxpayers and resulting in 

insufficient investment in the cybersecurity programs necessary to protect taxpayer data from 

illicit access. The FY 2017 request begins to restore these funds and allow the IRS to rebuild the 

quality service that American taxpayers deserve.

Treasury’s request also includes funding to combat the Islamic State of Iraq and the Levant 

(ISIL), as well as other international threats, by bolstering our economic sanctions regimes, and 

leveraging intelligence collection and international partnerships. It includes a new centralized 

cybersecurity fund to invest in improved protection for Treasury systems that house taxpayer, 

financial sector and other business, and government data. The request also invests in the 

Community Development Financial Institutions Fund to promote economic development in lowincome and underserved communities.

Treasury’s International Programs request funds general capital increases and replenishments in 

multilateral development banks and continues making progress on reducing our unpaid 

commitments, a top Administration priority. The request also invests in the Office of Technical 

Assistance (OTA) as the first step towards meeting the Administration’s commitment to double 

OTA resources by 2020 and provides investments in the Green Climate Fund to support the 

transition of developing countries to a low-emission and climate resilient development path. 

The FY 2017 Congressional Budget Justification includes the information required for the 

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

performance data in this report. 

Sincerely,

Jacob J. Lew

Executive Summary - 1

Mission Statement

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

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

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

government’s finances and resources effectively.

Executive Summary

FY 2017 President’s Budget by Function

Dollars in Thousands

 

FY 2015 FY 2016 FY 2017 Increase/ Percent

Enacted Enacted Request Decrease Change

Management & Financial $1,343,704 $1,404,653 $1,520,463 $115,810 8.2%

Departmental Offices Salaries and Expenses $210,000 $222,500 $217,376 ($5,124) -2.3%

Terrorism and Financial Intelligence (TFI) $112,500 $117,000 $117,000 $0 0.0%

Departmental Offices Salaries and Expenses $322,500 $339,500 $334,376 ($5,124) -1.5%

Cybersecurity Enhancement $0 $0 $109,827 $109,827 100.0%

Department-wide Systems and Capital Investments 

Program $2,725 $5,000 $5,000 $0 0.0%

Office of Inspector General $35,351 $35,416 $37,044 $1,628 4.6%

Treasury IG for Tax Administration $158,210 $167,275 $169,634 $2,359 1.4%

Special Inspector General for TARP $34,234 $40,671 $41,160 $489 1.2%

Community Development Financial Institutions Fund $230,500 $233,523 $245,923 $12,400 5.3%

Financial Crimes Enforcement Network $112,000 $112,979 $115,003 $2,024 1.8%

Alcohol and Tobacco Tax and Trade Bureau $100,000 $106,439 $111,439 $5,000 4.7%

Program Cap Adjustment Included in IRS $0 $0 ($5,000) ($5,000) NA

Net, Alcohol and Tobacco Tax and Trade $100,000 $106,439 $106,439 $0 0.0%

Bureau of the Fiscal Service $348,184 $363,850 $353,057 ($10,793) -3.0%

Treasury Franchise Fund $0 $0 $3,000 $3,000 100.0%

Tax Administration $10,945,000 $11,235,000 $12,280,095 $1,045,095 9.3%

IRS Taxpayer Services $2,156,554 $2,156,554 $2,406,318 $249,764 11.6%

IRS Enforcement $4,860,000 $4,860,000 $5,216,263 $356,263 7.3%

IRS Operations Support $3,638,446 $3,638,446 $4,314,099 $675,653 18.6%

IRS Business Systems Modernization $290,000 $290,000 $343,415 $53,415 18.4%

IRS Administrative Provisions2 $0 $290,000 $0 ($290,000) -100.0%

Less, IRS Cap Adjustment $0 $0 $514,748 $514,748 NA

IRS Total, Excluding Cap Adjustment $10,945,000 $11,235,000 $11,765,347 $530,347 4.7%

Subtotal, Treasury Appropriations Committee 

excluding Cap Adjustment and TEOAF $12,288,704 $12,639,653 $13,285,810 $646,157 5.1%

Treasury Forfeiture Fund ($944,000) ($876,000) ($657,000) $219,000 25.0%

Subtotal, Treasury Appropriations Committee 

including TEOAF $11,344,704 $11,763,653 $12,628,810 $865,157 7.4%

Cap Adjustment $0 $0 $514,748 $514,748 N/A

Total, Treasury Appropriations Committee 

including Cap Adjustment and TEOAF $11,344,704 $11,763,653 $13,143,558 $1,379,905 11.7%

Treasury International Programs $2,454,304 $2,313,470 $2,318,521 $5,051 0.2%

Economic Growth, National Security and Poverty 

Reduction (Multilateral Development Banks) $1,999,804 $1,816,477 $1,802,958 ($13,519) -0.7%

Food Security $30,000 $74,930 $53,000 ($21,930) -29.3%

Environmental Trust Funds $401,000 $398,563 $409,063 $10,500 2.6%

Global Infrastructure Facility $0 $0 $20,000 $20,000 100.0%

Office of Technical Assistance (OTA) $23,500 $23,500 $33,500 $10,000 42.6%

International Monetary Fund1 $0 $0 $0 $0 NA

Total, Treasury Appropriations $13,799,008 $14,077,123 $15,462,079 $1,384,956 9.8%

1/ Allocated as follows: $176.8 million Taxpayer Services, $4.9 million Enforcement, and $108.2 million Operations Support.

FY 2016 to FY 2017

2/ The Consolidated Appropriations Act, 2016 includes IMF quota reform. The reforms will not be funded through Treasury's 150s Account, 

but rather through emergency funding.
Executive Summary - 2

Treasury’s mission is to maintain a strong 

economy and create economic and job 

opportunities by promoting conditions that 

enable growth and stability at home and 

abroad; strengthen national security by 

combating threats and protecting the 

integrity of the financial system; and 

manage the federal government’s finances.

To support this mission, the FY 2017 

President’s Budget requests $13.3 billion in 

discretionary appropriations for Treasury’s 

operating accounts. The Budget also 

proposes a multi-year program integrity cap 

adjustment, including $515 million in 

FY 2017, for critical IRS tax enforcement 

and compliance functions estimated to 

reduce the deficit by $46 billion over the 10-

year budget window. In addition, the 

Budget proposes $2.3 billion for Treasury’s 

International Assistance programs to 

promote our national security, open new 

markets for U.S. exporters, drive progress 

on sustainable development, and address key

global challenges such as food security and 

the environment.

Funding Highlights

The President’s Fiscal Year (FY) 2017 Budget provides $13.3 billion for Treasury’s operating 

accounts and $2.3 billion for Treasury’s international assistance programs in discretionary 

funding. This includes:

• Helping developing nations reduce carbon pollution, strengthen climate resilience, and pursue 

smart and sustainable long-term economic growth through a $250 million contribution to the 

Green Climate Fund as part of a combined Treasury Department and State Department 

investment of $750 million. 

• Investing $11.8 billion in base discretionary resources for the Internal Revenue Service (IRS), 

an increase of $530 million (4.7 percent) from FY 2016, to fairly enforce the tax code and 

improve taxpayer services, including by developing and enhancing online tools for taxpayers. 

• Enhancing existing security systems on its internal Department networks and public websites, 

and supporting public-private cybersecurity coordination with a new $110 million Departmentwide Cybersecurity Enhancement Account.

• Funding the Office of Terrorism and Financial Intelligence with $117 million to curb terrorist 

financing, including ISIL financing, and to implement sanctions targeting Iran, North Korea, 

Syria, and more, as well as $115 million for the Financial Crimes Enforcement Network. 

• Promoting economic development in low-income and underserved communities through a $12 

million increase (5.3 percent) from FY 2016 for the Community Development Financial 

Institutions Fund for a total of $246 million.

Reforms

• The Budget proposes a multi-year program integrity cap adjustment for tax enforcement 

activities, including $515 million in FY 2017 to reduce the deficit and narrow the tax gap, 

yielding net taxpayer savings of $46 billion over the next 10 years.

• It also proposes legislation authorizing and funding new programs to facilitate private 

investment to renew our Nation’s infrastructure, invest in small business job creation, and 

partner with private industry and local governments to promote stable income and sustainable 

savings practices for working families.
Executive Summary - 3

Encouraging International Economic 

Growth and Stability

The Treasury Department’s $2.3 billion 

FY 2017 International Assistance programs 

budget offers a cost effective way to provide 

U.S. leadership in international 

development, advance national security, and 

expand export markets for American 

businesses by promoting international 

financial stability and supporting key global 

initiatives such as reducing poverty, 

improving food security, investing in 

infrastructure, and addressing climate 

change. The Budget fully funds annual 

payments to the multilateral development 

banks to maintain U.S. shareholding 

positions and to provide a source of low-cost 

loans and grants for the world’s poorest 

countries. Additionally, the Budget includes 

$20 million for the World Bank Global 

Infrastructure Facility, a fund that will 

catalyze private investment in public 

infrastructure projects. The Budget also 

includes a significant increase for Treasury’s 

Office of Technical Assistance (OTA), as 

the first step toward meeting the 

Administration’s commitment at the 

Financing for Development conference in 

July 2015 to double OTA resources by 2020

as part of the U.S. effort to significantly 

increase funding for domestic resource 

mobilization.

The Budget includes $250 million toward 

the U.S. pledge to the Green Climate Fund, 

providing a total of $750 million when 

combined with $500 million provided 

through the Department of State. The 

request will support climate finance for 

developing nations, especially the poorest 

and most vulnerable, as they strengthen 

climate resilience, invest in clean energy, 

and implement their commitments to reduce 

carbon pollution on a pathway towards 

sustainable economic growth and 

development. The Budget also includes 

$137 million for the annual replenishment 

commitment to the Global Environment 

Facility (GEF) and $13 million to help 

Central American countries plus the 

Dominican Republic purchase catastrophe 

risk insurance and enhance disaster risk 

management capacity through the CCRIF 

Segregated Portfolio Company (formerly 

known as the Caribbean Catastrophe Risk 

Insurance Facility).

In addition Budget includes $53 million for 

investments to support food security. By 

harnessing the power of public-private 

partnerships and encouraging innovative 

financing mechanisms, donors have 

committed to funding agricultural 

investment plans to improve nutritional 

outcomes in poor countries, with the goal of 

eliminating world hunger.

Fairly Enforcing the Tax Code

In FY 2016, IRS funding remains $911 

million lower than its FY 2010 level despite 

an increasing workload resulting in part 

from new legislative mandates. The 

FY 2017 Budget provides the IRS with 

$11.8 billion in base discretionary resources,

an increase of $530 million (4.7 percent) 

from FY 2016, restoring the resource levels 

necessary to maintain the integrity of the tax 

system, fairly enforce the tax code, and 

provide adequate levels of taxpayer services. 

With these investments, the IRS will 

increase staffing for traditional taxpayer 

services, bolster defenses against stolen 

identify refund fraud, and provide assistance 

to taxpayers who call the IRS for assistance. 

In addition, the Budget invests in new IT 

architecture that will enable the IRS to 

modernize and secure its online services and 

provides taxpayers with an experience 

comparable to what they have come to 

expect from financial institutions. 
Executive Summary - 4

Additionally, the Budget includes a $515 

million FY 2017 cap adjustment to support 

program integrity efforts aimed at restoring 

enforcement of current tax laws to 

acceptable levels, investigating transnational 

organized crime, pursuing abusive tax 

schemes, and enforcing the new Foreign 

Account Tax Compliance Act (FATCA). 

The targeted investments funded from the 

cap adjustment in FY 2017 are expected to 

generate nearly $3 billion in annual revenue 

once fully operationalized in FY 2019, 

returning roughly $6 to the government for 

every dollar invested for these initiatives.

Improving the Cybersecurity of 

Treasury’s Networks and Data

The Budget proposes a new $110 million 

Department-wide Cybersecurity 

Enhancement Account to more strategically 

focus Treasury’s cybersecurity efforts and 

avoid fragmentation of IT management 

across bureaus that leads to cost 

inefficiencies and limits Treasury’s ability to 

nimbly respond in the event of a 

cyberattack. The IRS is currently partnering 

with the U.S. Digital Service to bolster 

electronic authentication procedures for 

access to all IRS digital services, and in 

FY 2017 Treasury will expand on this effort 

by deploying a new Digital Infrastructure 

Security Team to enhance existing security 

systems on its internal networks and public 

websites, thereby safeguarding the data on 

those systems department-wide.

Combating ISIL and Other International 

Threats

Treasury’s Office of Terrorism and 

Financial Intelligence (TFI) is responsible 

for leading the policy, enforcement, 

regulatory, and intelligence functions of 

Treasury aimed at identifying and disrupting 

financial support to international terrorist 

organizations, proliferators of weapons of 

mass destruction, narcotics traffickers, and 

other illicit actors. This includes efforts to 

cut off ISIL from the international financial 

system and to combat the threats we face 

from Iran and North Korea, among others. 

The Budget invests $117 million to support

TFI in the Treasury’s efforts to combat 

money laundering and terrorist financing, 

implement sanctions programs, and manage 

Treasury’s intelligence and other functions 

in support of U.S. national security policies 

and interests and law enforcement.

The Budget also provides $115 million for 

the Financial Crimes Enforcement Network 

(FinCEN) to support Treasury’s efforts to 

safeguard the financial system from illicit 

use, combat money laundering, and promote 

national security. FinCEN’s data analytics 

and unique authorities under the Bank 

Secrecy Act are important tools in the U.S. 

effort to combat ISIL and other threats to 

national security. 

Empowering Community Development 

and Economic Growth

The Budget includes $246 million for the 

Community Development Financial 

Institutions (CDFI) Fund, a $12 million 

increase (5.3 percent) from FY 2016, to 

promote economic development investments 

in low-income and underserved 

communities. The request provides funding 

for the CDFI Program, the Healthy Food 

Financing Initiative, the Native American 

CDFI Assistance Program, and the Bank 

Enterprise Award Program.

The 2017 Budget also provides funding for a

new CDFI small dollar loan program to

support broader access to safe and 

affordable financial products and provide an 

alternative to predatory lending.

The Budget also extends the CDFI Bond 

Guarantee program through FY 2017, 

providing up to $1 billion of long-term 

capital to CDFIs that support lending in 
Executive Summary - 5

underserved communities. The CDFI Bond 

Guarantee program will continue to operate 

with no taxpayer funded subsidy.

New Mandatory Programs

The Budget includes a series of mandatory 

proposals to facilitate private investment to

renew our Nation’s infrastructure, invest in 

small business job creation, and partner with 

private industry and local governments to 

promote stable income and sustainable 

savings practices for working families.

Allotment for Puerto Rico EITC Payments

The Budget proposes a $600 million annual 

allotment, indexed to inflation, to create a 

refundable locally-administered Earned 

Income Tax Credit (EITC) for residents of 

Puerto Rico. Unlike Americans living in the 

50 states and the District of Columbia, 

residents of Puerto Rico are not eligible for 

an EITC. Given Puerto Rico’s low labor 

force participation rate, the existence of an 

EITC should increase employment in Puerto 

Rico’s formal sector by providing higher 

incomes to workers who file taxes. This 

added incentive for participation in Puerto 

Rico’s formal economy should also increase 

Puerto Rico’s tax compliance and tax 

revenues.

Investing in Infrastructure

The Budget establishes a new Financing 

America’s Infrastructure Renewal (FAIR) 

program within Treasury that would provide 

direct loans to U.S. infrastructure projects 

developed through public-private 

partnerships. Eligible projects under the 

program will encompass the transportation, 

water, energy, and broadband sectors, as 

well as certain social infrastructure, such as 

educational facilities, and must meet all 

applicable environmental and labor 

standards. The program is estimated to 

provide $15 billion in direct loans over 10 

years at no cost to taxpayers.

Supporting Small Businesses

The Budget includes a new authorization of 

$1.5 billion for the State Small Business 

Credit Initiative (SSBCI) to build on the 

momentum of the program by strengthening 

the federal government's relationships with 

state economic development agencies, and 

providing capital to America's diverse 

community of entrepreneurs. Since it was 

first enacted in 2010, SSBCI has supported 

over 12,400 private sector loans or 

investments in small businesses, and helped 

create or retain over 140,000 jobs as 

reported by recipient small businesses. The 

additional $1.5 billion would be awarded in 

two allocations: $1 billion awarded on a 

competitive basis to states best able to target 

local market needs, promote inclusion, 

attract private capital for start-up and scaleup businesses, strengthen regional 

entrepreneurial ecosystems, and evaluate 

results; and $500 million awarded by a 

formula based on economic factors such as 

job losses and the pace of economic 

recovery.

Encouraging Projects that Pay for Success 

The Budget includes a $300 million onetime mandatory appropriation for a new Pay 

for Success (PFS) program administered by 

Treasury. This program will support the 

growing number of state and local 

governments seeking to establish projects 

that use PFS financing. These projects 

leverage private investment to provide 

preventive social services that measurably 

`improve outcomes for families and 

communities while generating value to 

the government, including savings. The PFS 

Incentive Fund will help to strengthen the 

ability of state and local governments to 

achieve measurable impact for people and 

communities. In addition, by providing 

centralized support and expertise for PFS at 

Treasury, the Incentive Fund will encourage 
Executive Summary - 6

the evolution of this nascent field into a 

more robust and sustainable public and 

private market.

Financial Innovation for Working 

Families Fund

The Budget includes a $100 million 

mandatory fund for Treasury to encourage 

the development of innovative private-sector 

financial products and services that would 

help low- to moderate-income workers build 

up “rainy day” reserves. The reserves would 

provide these workers and their families 

with a buffer against shocks to income and 

spending needs.
Executive Summary 

-7

FY 2017 President's Budget by Strategic Goal 

Dollars in Thousands

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

Management & Financial $ 492,016 $ 27,676 $ 86,277 $ 20,667 $ 619,258 $ 279,461 $ 254,171 $ 57,449 $ 68,741 $ 6,537 $ 1,520,463 $ 391,790 

Departmental Offices Salaries and Expenses 68,530 14,878 86,277 20,667 46,347 13,561 115,573 47,249 17,649 6,537 334,376 102,892 Cybersecurity Enhancement 62,084 1,651 46,092 109,827 - Department-wide Systems and Capital Investments Program 5,000 5,000 - Office of Inspector General 15,100 1,800 21,944 8,700 37,044 10,500 Treasury Inspector General for Tax Administration 169,634 1,500 169,634 1,500 Special Inspector General for TARP 41,160 41,160 - Community Development Financial Institutions Fund 245,923 245,923 - Financial Crimes Enforcement Network 115,003 1,500 115,003 1,500 Alcohol and Tobacco Tax and Trade Bureau 52,879 3,318 53,560 3,594 106,439 6,912 Bureau of the Fiscal Service 83,524 9,480 269,533 259,006 353,057 268,486 Treasury Franchise Fund 3,000 3,000 - 

Tax Administration $ - $ - $ - $ - $ 12,280,095 $ 140,686 $ - $ - $ - $ - $ 12,280,095 $ 140,686 

IRS Taxpayer Services 2,406,318 36,465 2,406,318 36,465 IRS Enforcement 5,216,263 47,222 5,216,263 47,222 IRS Operations Support 4,314,099 56,999 4,314,099 56,999 Business Systems Modernization 343,415 343,415 - 

Total, Treasury Appropriations Committee $ 492,016 $ 27,676 $ 86,277 $ 20,667 $ 12,899,353 $ 420,147 $ 254,171 $ 57,449 $ 68,741 $ 6,537 $ 13,800,558 $ 532,476 

Treasury International Programs 2,318,521 2,318,521 - 

Total, Appropriated Level 492,016 27,676 2,404,798 20,667 12,899,353 420,147 254,171 57,449 68,741 6,537 16,119,079 532,476 Non-Appropriated Bureaus $ 147,162 $ 5,059,334 $ - $ - $ - $ - $ 3,000 $ 21,963 $ - $ - $ 150,162 $ 5,081,297 

Office of Financial Stability (Administrative Account) 127,430 127,430 - Small Business Lending Fund Program (Administrative) 13,405 13,405 - State Small Business Credit Initiative (Administrative) 6,327 6,327 - Terrorism Risk Insurance (Administrative) 3,000 3,000 - Financial Stability Oversight Council 18,019 - 18,019 Office of Financial Research 104,770 - 104,770 Bureau of Engraving and Printing 846,335 - 846,335 United States Mint 2,956,207 - 2,956,207 Office of the Comptroller of the Currency 1,134,003 21,963 - 1,155,966 

Subtotal, Direct $ $ 639,178 $ 2,404,798 $ 12,899,353 $ 257,171 $ 68,741 $ 16,269,241 Subtotal, Reimbursable $ $ 5,087,010 $ 20,667 $ 420,147 $ 79,412 $ 6,537 $ 5,613,773 Total, Treasury Level $ 5,726,188 $ 2,425,465 $ 13,319,500 $ 336,583 $ 75,278 $ 21,883,014 1/ Total does not include the proposed $657 million Forfeiture Fund permanent cancellation. 

Total Treasury Goal/Objective

Promote domestic economic 

growth and stability while 

continuing reforms of the 

financial system

Enhance U.S. competitiveness 

and job creation, and promote international financial stability 

and more balanced global 

growth

Fairly and effectively reform 

and modernize federal 

financial management, 

accounting, and tax systems

Safeguard the financial 

system and use financial 

measures to counter national 

security threats

Create a 21st-century 

approach to government by 

improving efficiency, 

effectiveness and customer 

interaction
Executive Summary 

-8

Dollars in Thousands

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

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

Departmental Offices Salaries and Expenses 771 197 968 872 197 1,069 1,290 166 1,456Terrorism and Financial Intelligence 356 29 385 377 29 406 0 0 0Cybersecurity Enhancement 0 0 0 0 0 0 86 0 86Office of Inspector General 151 10 161 194 19 213 194 19 213Treasury Inspector General for Tax Administration 756 2 758 859 2 861 859 2 861Special Inspector General for TARP 150 0 150 192 0 192 192 0 192Community Development Financial Institutions Fund 75 0 75 79 0 79 87 0 87Financial Crimes Enforcement Netw ork 275 1 276 343 1 344 343 1 344Alcohol and Tobacco Tax and Trade Bureau 456 10 466 494 10 504 529 10 539Bureau of the Fiscal Service 1,753 243 1,996 2,042 245 2,287 1,912 240 2,152Internal Revenue Service 80,180 612 80,792 82,462 643 83,105 86,347 675 87,022Subtotal, Treasury Appropriated Level 84,923 1,104 86,027 87,914 1,146 89,060 91,839 1,113 92,952Office of Financial Stability (Administrative Account) 74 0 74 72 0 72 64 0 64Small Business Lending Fund Program 14 0 14 19 0 19 19 0 19State Small Business Credit Initiative 9 0 9 9 0 9 17 0 17Office of Financial Research 194 0 194 230 0 230 255 0 255Financial Stability Oversight Council 22 0 22 34 0 34 36 0 36Treasury Franchise Fund 0 1,545 1,545 0 1,785 1,785 0 1,888 1,888Bureau of Engraving and Printing 0 1,800 1,800 0 1,924 1,924 0 1,924 1,924United States Mint 0 1,651 1,651 0 1,874 1,874 0 1,874 1,874Office of the Comptroller of the Currency 0 3,805 3,805 0 3,955 3,955 0 3,955 3,955Pay for Success 0 0 0 0 0 0 7 0 7Terrorism Insurance Program 4 0 4 10 0 10 10 0 10Financing America's Infrastucture Renew al 0 0 0 0 0 0 11 0 11Financial Innovation For Working Families Fund 0 0 0 0 0 0 8 0 8

Allotment For Puerto Rico EITC Payments 0 0 0 0 0 0 2 0 2Total 85,240 9,905 95,145 88,288 10,684 98,972 92,268 10,754 103,022funded from the Federal Highw ay Transportation Authority Account.2/ IRS FY 2015 Direct FTE include 287 FTE funded through a transfer from Health and Human Services for the Affordable Care Act. IRS FY 2015-2017 Direct FTE include 7 FTE 1/ A portion of Fiscal Service's Reimbursable/Fee FTE is funded by fee revenue as authorized by the Debt Collection Improvement Act (DCIA) of 1996.

2015 Actual 2016 Enacted 2017 President's Budget
Executive Summary 

-9

DO Cyber DSCIP OIG TIGTA SIGTARP CDFI FinCEN TTB FS TFF IRS Subtotal TEOAF Total

FY 2016 Enacted $ 339,500 $ - $ 5,000 $ 35,416 $ 167,275 $ 40,671 $ 233,523 $ 112,979 $ 106,439 $ 363,850 $ - $ 11,235,000 $ 12,639,653 $ (876,000) $ 11,763,653 

Adjustment to Request (10,050.00) 3,050.00 - - - - - - - - - - (7,000.00) - (7,000.00Maintaing Current Levels (MCLs) 5,312.00 - - 508.00 2,376.00 588.00 412.00 1,824.00 1,562.00 6,032.00 - 170,348.00 188,962.00 - 188,962.0 Non-Recurring Costs (1,050.00) - (5,000.00) - - - (337.00) - - - - - (6,387.00) - (6,387.00Efficiency Savings (1,430.00) - - - (17.00) (99.00) - (1,300.00) - (1,935.00) - (3,766.00) (8,547.00) - (8,547.00Other Adjustments - - - - - - - - (1,562.00) - - - (1,562.00) - (1,562.00

Adjustments to Base $ (7,218) $ 3,050 $ (5,000) $ 508 $ 2,359 $ 489 $ 75 $ 524 $ - $ 4,097 $ - $ 166,582 $ 165,466 $ - $ 165,466 FY 2017 Base $ 332,282 $ 3,050 $ - $ 35,924 $ 169,634 $ 41,160 $ 233,598 $ 113,503 $ 106,439 $ 367,947 $ - $ 11,401,582 $ 12,805,119 $ (876,000) $ 11,929,119 

Program Decreases - - - - - - - - - (14,890.00) - - (14,890.00) - (14,890.00Program Increases 2,094.00 106,777.00 5,000.00 1,120.00 - - 12,325.00 1,500.00 - 3,000.00 363,765.00 495,581.00 - 495,581.0 Program Integrity Cap Adjustment - - - - - - - - - - - 514,748.00 514,748.00 - 514,748.0 

Subtotal, Program Changes $ 2,094 $ 106,777 $ 5,000 $ 1,120 $ - $ - $ 12,325 $ 1,500 $ - $ (14,890) $ 3,000 $ 878,513 $ 995,439 $ - $ 995,439 Change to the Forfeiture Fund Cancellations/Rescission - - - - - - - - - - - - - 219,000.00 219,000.0 FY 2017 President's Budget $ 334,376 $ 109,827 $ 5,000 $ 37,044 $ 169,634 $ 41,160 $ 245,923 $ 115,003 $ 106,439 $ 353,057 $ 3,000 $ 12,280,095 $ 13,800,558 $ (657,000) $ 13,143,558 

Summary of FY 2017 Increases and Decreases

Dollars in Thousands
Executive Summary - 10

Organization 

Treasury is organized into the Departmental Offices, seven bureaus, and three inspectors general. 

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

the operating units of the organization.1

 1 In addition to the listed organizations, the Office of Risk Management, created in FY 2015, and the Office of Small and Disadvantaged Business 

Utilization report to the Deputy Secretary. Learn more about Treasury’s bureaus and offices on the following pages and at 

http://www.treasury.gov/about/organizational-structure/Pages/default.aspx. For financial reporting purposes, the Departmental Offices includes 

the entities described in the following section, the various funds and programs managed by them (referenced in Part 2 of this report), and the 

Federal Financing Bank (FFB).
Executive Summary - 11

Departmental Offices

• Domestic Finance works to preserve confidence in the U.S. Treasury securities market, 

effectively manage federal fiscal operations, strengthen financial institutions and markets, 

promote access to credit, and improve financial access and education in service of 

America’s long-term economic strength and stability.

• Terrorism and Financial Intelligence (TFI) marshals the Department’s intelligence and 

enforcement functions with the twin aims of safeguarding the financial system against 

illicit use and combating rogue nations, terrorist facilitators, weapons of mass destruction 

proliferators, money launderers, drug kingpins, and other national security threats.

• International Affairs protects and supports U.S. economic prosperity and national security 

by working to foster the most favorable external environment for sustained employment 

and economic growth in the United States.

• Tax Policy develops and implements tax policies and programs, reviews regulations and 

rulings to administer the Internal Revenue Code, negotiates tax treaties, and provides 

economic and legal policy analysis for domestic and international tax policy decisions. 

Tax Policy also provides revenue estimates for the President’s Budget.

• Economic Policy reports on current and prospective economic developments and assists 

in the determination of appropriate economic policies. The office is responsible for the 

review and analysis of domestic economic issues and developments in the financial 

markets.

• The Treasurer of the United States oversees the U.S. Mint and Bureau of Engraving and 

Printing, chairs the Advanced Counterfeit Deterrence Steering Committee, and is a key 

liaison with the Federal Reserve. In addition, the Treasurer serves as a senior advisor to 

the Secretary in the areas of community development and public engagement.

• The Office of Management, including the Chief Financial Officer (CFO), manages the 

Department’s financial resources and oversees Treasury-wide programs, including human 

capital, information technology, acquisition, and diversity and inclusion.

• Other offices within Departmental Offices include General Counsel, Legislative Affairs, 

and Public Affairs.

• Three Inspectors General – the Office of the Inspector General (OIG), the Treasury 

Inspector General for Tax Administration (TIGTA), and the Special Inspector General for 

the Troubled Asset Relief Program (SIGTARP) – provide independent audits, 

investigations, and oversight of Treasury and its programs.
Executive Summary - 12

Bureaus

• The Alcohol and Tobacco Tax and Trade Bureau (TTB) collects federal excise taxes on 

alcohol, tobacco, firearms, and ammunition and is responsible for enforcing and 

administering laws covering the production, use, and distribution of alcohol products.

• The Bureau of Engraving and Printing (BEP) develops and produces U.S. currency notes 

that are trusted worldwide.

• The Financial Crimes Enforcement Network (FinCEN) safeguards the financial system 

from illicit use, combats money laundering, and promotes national security through the 

collection, analysis, and dissemination of financial intelligence and strategic use of 

financial authorities.

• The Bureau of the Fiscal Service (Fiscal Service) provides central payment services to 

federal program agencies, operates the U.S. Government’s collections and deposit 

systems, provides government-wide accounting and reporting services, manages the 

collection of delinquent debt owed to the U.S. Government, borrows the money needed to 

operate the U.S. Government through the sale of marketable, savings, and specialpurpose U.S. Treasury securities (including the state and local government series), and 

accounts for and services the public debt.

• The Internal Revenue Service (IRS) is the largest of the Department’s bureaus and 

determines, assesses, and collects tax revenue in the United States.

• The United States Mint (U.S. Mint) designs, mints, and issues U.S. circulating and 

bullion coins; prepares and distributes numismatic coins and other items; and strikes 

Congressional Gold Medals and other medals of national significance. The U.S. Mint 

maintains physical custody and protection of most of the nation’s gold and all of its silver 

assets.

• The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises 

national banks and federal savings associations (thrifts) to ensure that they operate in a 

safe and sound manner, provide fair access to financial services, treat customers fairly, 

and comply with applicable laws and regulations. The OCC also supervises federal 

branches and agencies of foreign banks and has rule-making authority for all savings 

associations.

Treasury Strategic Framework 

The Government Performance and Results Act (GPRA) of 1993 and the GPRA Modernization 

Act of 2010 establish the need for agencies to identify performance goals, report progress against 

targets, and conduct data-driven reviews. When done well, these practices serve two key 

purposes for stakeholders within and outside of the organization: to assess the organization’s 

health and impact and to inform decision-making and strategy, including effective resource 

allocation. In this spirit, Treasury developed a strategic framework supported by best-in-class 

organizational performance practices to ultimately help achieve its strategic goals.
Executive Summary - 13

Treasury Organizational Performance Review Cycle

Treasury’s organizational performance reviews provide a regular forum for open dialogue and 

coordination between Department and bureau and office leadership, bringing together different 

perspectives to set and align priorities, identify and solve problems, review agency performance 

goals, and drive results. The cycle integrates statutory requirements to conduct quarterly 

performance reviews of agency goals and a Strategic Objective Annual Review (SOAR), which 

analyzes cross-cutting performance and designates a set of strategic objectives as making 

“Noteworthy Progress” or as a “Focus Area for Improvement.”

Fall Winter Spring Summer

Focus

Bureau-level Performance Department-level 

Performance (SOAR)

Bureau-level 

Performance

Performance-based 

Budget

Goals / Outcomes

• Gain a shared 

understanding of 

previous year’s progress 

at the bureau/office 

level

• Identify and align 

priorities

• Recognize successes

• Evaluate cross-agency 

progress toward 

strategic objectives

• Identify issues to discuss 

with OMB at FedStat (a 

new annual review with 

OMB)

• Assess progress 

on priorities

• Surface problems 

or assistance 

needed

• Discuss solutions

• Recognize 

successes

• Connect priorities 

to future funding

• Understand 

performance 

impacts

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

each quarter and many run their own internal performance reviews.

FY 2014-2017 Strategic Framework

The strategic framework comprises the Department’s FY 2014-2017 strategic goals and 

objectives and FY 2014-2015 Agency Priority Goals (APGs), which align to specific objectives. 

All bureaus and offices align their programs and performance within this framework.

Strategic Goals Strategic Objectives/APGs Contributing 

Bureaus/Offices

Economic

Goal 1:

Promote domestic 

economic growth 

and stability while 

continuing reforms 

of the financial 

system

1.1: Promote savings and increased access to credit 

and affordable housing options

Domestic Finance

International 

Affairs

Economic Policy

BEP

Fiscal Service

OCC

TTB

U.S. Mint

1.2: Wind down emergency financial crisis response 

programs

1.3: Complete implementation of financial regulatory 

reform initiatives, continue monitoring capital 

markets, and address threats to stability

1.4: Facilitate commerce by providing trusted and 

secure U. S. currency, products, and services for 

use by the public

Goal 2: 

Enhance U.S. 

competitiveness 

2.1: Promote free trade, open markets, and foreign 

investment opportunities International 

Affairs 2.2: Protect global economic and financial stability 
Executive Summary - 14

Strategic Goals Strategic Objectives/APGs Contributing 

Bureaus/Offices

and job creation, 

and promote 

international 

financial stability 

and more balanced 

global growth

and press for market-determined foreign exchange 

rates

TFI

Economic Policy

2.3: Advance U.S. economic, financial, and national Tax Policy

security goals by leveraging multilateral 

mechanisms

2.4: Provide technical assistance to developing 

countries working to improve public financial 

management and strengthen their financial 

systems

Financial

Goal 3:

Fairly and 

effectively reform 

and modernize 

federal financial 

management, 

accounting, and tax 

systems

3.1: Improve the efficiency and transparency of 

federal financial management and governmentwide accounting Domestic Finance

Tax Policy

Fiscal Service

IRS

TTB

3.2: Improve the disbursement and collection of 

federal funds and reduce improper payments made 

by the U.S. government

3.3: Pursue tax reform, implement the Patient 

Protection and Affordable Care Act and Foreign 

Account Tax Compliance Act, and improve the 

execution of the tax code

Security

Goal 4: 

Safeguard the 

financial system 

and use financial 

measures to 

counter national 

security threats

4.1: Identify priority threats to the financial system 

using intelligence analysis and outreach to the 

financial sector

TFI

Domestic Finance

FinCEN

OCC

4.2: Develop, implement, and enforce sanctions and 

other targeted financial measures

4.3: Improve the cybersecurity of our nation’s 

financial sector 

4.4: Protect the integrity of the financial system by 

implementing, promoting, and enforcing antimoney laundering and counterterrorism financing 

standards

Aligned APG: Focus Enforcement on HighPriority Threats Using Proactive Analysis

Management

Goal 5: 

Create a 21stcentury approach 

to government by 

improving 

efficiency, 

effectiveness and 

customer 

interaction

5.1: Increase workforce engagement, performance, 

and diversity by instilling excellence, innovation, 

and inclusion in Treasury’s organizational culture 

and business practices

All Offices and 

Bureaus, led by the 

Office of 

Management

5.2: Support effective, data-driven decision-making 

and encourage transparency through intelligent 

gathering, analysis, sharing, use, and 

dissemination of information 

5.3: Promote efficient use of resources through shared 

services, strategic sourcing, streamlined business 

processes, and accountability

5.4: Create a culture of service through relentless

pursuit of customer value

Aligned APG: Increasing IRS Self-Service Options 

for Taxpayers
Executive Summary - 15

Performance Overview 

Goal 1: Promote domestic growth and stability while continuing reforms of the financial 

system

Strategic Objective 1.1: Promote savings and increased access to credit and affordable 

housing options

Strategic Objective 1.2: Wind down emergency financial crisis response programs

Strategic Objective 1.3: Complete implementation of financial regulatory reform initiatives, 

continue monitoring capital markets, and address threats to stability

Strategic Objective 1.4: Facilitate commerce by providing trusted and secure U. S. currency, 

products, and services for use by the public

Increased access to credit and savings

The Small Business Jobs Act of 2010 (Jobs Act), which celebrates its fifth anniversary this year, 

has produced impressive results. The law created the State Small Business Credit Initiative 

(SSBCI), which is charged with increasing the availability of credit for small businesses and 

generating jobs and other economic development benefits for states. Because of the program’s 

success, Treasury seeks to reauthorize it through FY 2023. Since its passage, SSBCI has 

supported more than 12,400 private sector loans or investments to small businesses and helped 

create or retain more than 140,000 jobs, as reported by the small businesses who received the 

loans and investments. 2

 As of June 30, 2015, approximately $1.26 billion of $1.46 billion total 

funds available for disbursement have been provided to the states. 3 As of December 2014, states 

had expended $864 million of these funds to leverage $6.4 billion in new lending or investing. 

The Jobs Act also created the Community Development Financial Institutions (CDFI) Bond 

Guarantee Program, which is administered by the CDFI Fund. Bonds issued under the program 

support CDFI lending activity in underserved communities by providing a source of long-term 

capital. Under FY 2013 and 2014 authority, Treasury provided four bond guarantees, which 

supported eight bond loans totaling $525 million. On September 29, 2015, Treasury announced 

that an additional nine bond loans, totaling $327 million, were guaranteed in FY 2015.

Helping Americans save—for retirement and other goals—is a top priority for Treasury. 

Millions of workers in America either do not have access to an employer-sponsored retirement 

plan or lack options to save for retirement. In December 2014, Treasury began the initial pilot 

phase of myRA, or my Retirement Account, that makes saving for retirement simple, safe, and 

affordable. In addition, Treasury continued to lead the administration’s efforts to help 

Americans have the financial information and skills they need to make sound choices in a 

complex financial system by chairing the interagency Financial Literacy and Education 

Commission and receiving important recommendations from the President’s Advisory Council 

on Financial Capability for Young Americans. Additionally, Treasury worked closely with the 

Department of Education to improve the federal student loan system.

 2 SSBCI December 2014 Annual Report

3 SSBCI June 2015 Quarterly Report
Executive Summary - 16

Economic recovery and stability

FY 2015 also marked the fifth anniversary of the most far-reaching and comprehensive financial 

reforms since the Great Depression: the 2010 Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act). During the darkest moments of the 2008 financial crisis, the 

U.S. economy was contracting at the fastest rate in 50 years. By early 2009, companies were 

shedding more than 800,000 jobs a month and, eventually, the unemployment rate reached 10 

percent. The crisis demonstrated that excessive risk-taking, low levels of capital, unsafe lending 

practices, and inadequate oversight within the financial system can have a real impact on the 

lives of all Americans. By enacting the Dodd-Frank Act, the U.S. Government set out to reform 

Wall Street to be more stable, transparent, and focused on serving customers.

Five years later, with nearly all of the major rules written, the financial system is safer, stronger, 

and more resilient. The economy is growing and unemployment rate has dropped to 5.0 percent

as of November 2015. 4

 Regulators have modern, common-sense tools to protect taxpayers, and 

banks have more capital to cover potential losses. And since financial crises do not respect 

national borders, Treasury is working through the Group of 20 (G-20) and Financial Stability 

Board (FSB) to make sure that the Department’s high standards are implemented globally. This 

year, the FSB will finalize a new international standard on total loss absorbing capacity (TLAC) 

for globally systemically important banks and standards for higher loss absorbing capacity for 

globally systemically important insurers.

Additionally, the emergency financial crisis response programs continue to wind down 

effectively. In December 2014, the Troubled Asset Relief Program (TARP) fully liquidated its 

investment in Ally Financial and realized cumulative receipts of $19.6 billion ($2.4 billion more 

than invested). The ultimate cost to taxpayers of TARP programs dropped from the FY 2009 

estimate of $341.0 billion to $37.2 billion as of September 2015. TARP’s foreclosure prevention 

programs provided more than 1.5 million homeowners with permanent mortgage modifications, 

which equates to approximately $38.7 billion in realized monthly mortgage payment savings for 

these homeowners. 

Monitoring for new risks to the financial system and the broader economy remains a top priority 

for Treasury and other regulators. For example, on October 15, 2014, the U.S. Treasury market 

experienced significant volatility. To better understand the sources of that volatility, Treasury, 

the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, 

the Securities and Exchange Commission, and the Commodity Futures Trading Commission 

conducted an analysis and issued a joint report in July 2015. The report analyzed a host of 

factors, including changes in global risk sentiment and investor positions, and those related to the 

evolution of Treasury market structure, in an effort to explain the events of that day. Treasury 

will continue to work with partners, including through the Financial Stability and Oversight 

Council (FSOC), to monitor the financial system and investigate any potential threats to financial 

stability.

The future of currency

During the summer of 2015, Secretary Lew announced that the $10 bill, the first in a new family 

of notes, will undergo a redesign and that a woman's portrait will be featured on U.S. paper 

 4 U.S. Bureau of Labor Statistics, November 6, 2015 release.
Executive Summary - 17

currency for the first time in more than a century. 5 The newly designed note is also expected to 

incorporate a raised tactile feature that increases accessibility and usability for the blind and 

visually impaired community. As part of his announcement, the Secretary asked Americans to 

engage in the redesign process by weighing in on whose portrait should be featured and how 

currency can honor the country’s rich history of democracy. Treasury received more than 1.5 

million responses from the public to date through face to face meetings, roundtables, town halls, 

Twitter, Instagram, Facebook, emails, and handwritten letters. 

The Department is also working to evaluate the future of coins. The U.S. Mint provided research 

to Congress on potential alternative metals for coins that could drive down metal costs.

Facilitation of commerce

Treasury plays an important role in facilitating commerce for certain industries, such as the 

alcoholic beverage industry, that rely on Treasury’s approval to enter the market. As these 

industries continue to expand, particularly in the small winery, brewery, and spirits areas, new 

businesses that are qualified to operate are waiting longer for permits. Further, increased 

demand for approvals of alcohol beverage labels and formulas, and declining resources to 

manage the approval processes, has required Treasury to work to fundamentally reshape these 

programs. Processing times for these approvals have also increased in recent years, which 

impede compliant commerce for industry members, and are particularly detrimental to small 

business. Recent efforts to reduce processing times—including an expanded list of label 

revisions allowable without new approval—have been outpaced by industry growth.

Key Performance Data Highlights

Measure 

(Responsible 

Bureau/Office)

FY 12 FY 13 FY 14 FY 15 4-yr 

Trend

FY 15 

Target

Result vs 

Target

Percentage of CDFI Program 

loans & investments 

originated to eligible 

distressed communities or 

underserved populations by 

dollar amount (%) (Domestic 

Finance - CDFI Fund)

84.9 77.1 70.8 80.1 60.0 Exceeded

Manufacturing costs for 

currency – dollar costs per 

thousand notes produced 

(BEP)

43.3 50.5 42.0 43.62 55.0 Exceeded

Seigniorage per dollar issued 

(Mint) .21 .24 .37 .49 .24 Exceeded

Percent of permit applications 

processed within service 

standards (TTB)

61 50 58 47 85 Not Met

 5 Access https://www.thenew10.treasury.gov/ for more information.
Executive Summary - 18

Percent of label and formula 

applications processed within 

service standards (TTB)

83 49 67 75 85 Not Met

Explanation of Results

Percentage of CDFI Program loans & investments originated to eligible distressed communities or 

underserved populations by dollar amount (Domestic Finance - CDFI Fund)

This measure demonstrates the impact of CDFI awardees in serving eligible distressed communities and 

underserved populations by lending reported during the program year. By regulation, all certified CDFIs 

must originate 60 percent or more of their loans and investments in eligible distressed census tracts or to 

underserved populations. The target is a threshold that must be met or exceeded, recognizing the need for 

CDFIs to balance their mission to service distressed communities and underserved populations with 

safety and soundness considerations. The increase over the prior year was due to full adoption of the 

2010 five-year American Community Survey (ACS) data to define eligible distressed census tracts (the 

prior year reporting allowed the use of either 2000 decennial data or the five-year ACS data). 

Manufacturing costs for currency – dollar costs per thousand notes produced (BEP)

This measure calculates the actual manufacturing cost for currency notes, which includes direct labor 

costs, the cost of raw materials used, and related manufacturing overhead charges. The FY 2015 cost of 

manufacturing was lower than anticipated due to savings resulting from increased volume and decreased 

spoilage.

Seigniorage per dollar issued (Mint)

This measure calculates the difference between the face value and the cost of minting and issuing 

circulating coins. Seigniorage per dollar issued is the seigniorage generated from each dollar of 

circulating coinage face-value shipped to Federal Reserve Banks. FY 2015 results exceeded the target 

and prior year performance due to a 24 percent increase in circulating shipment volumes coupled with a 9 

percent reduction in general and administrative costs.

Percent of permit applications processed within service standards (TTB)

This measure indicates how often TTB processes permit applications within the established customer 

service standards, which are reviewed annually for new businesses seeking to engage in alcohol or 

tobacco manufacturing or distribution to ensure timely market entry for qualified individuals. As the 

majority of permit applications are filed electronically, TTB implemented system enhancements in FY 

2015 to reduce bottlenecks in the approval process. However, the volume of applications, particularly in 

the manufacturing segments of small wineries, breweries, and distilleries, offset gains and resulted in 

continued processing delays.

Percent of label and formula applications processed within service standards (TTB)

This measure indicates how often TTB processes alcohol beverage label and formula applications within 

the customer service standards established for the respective programs to improve consistency and 

reliability for the business community served. Service standards are annually reviewed and updated to 

account for various factors, including workload and resources. Though TTB achieved substantial 

improvement in performance in the last two years, performance remains below target as TTB efforts to 

manage the volume of submissions by reducing filing requirements associated with label and formula 

approval have been offset by increased applications due to industry growth. 
Executive Summary - 19

Goal 2: Enhance U.S. competitiveness and job creation, and promote international 

financial stability and more balanced global growth

Strategic Objective 2.1: Promote free trade, open markets, and foreign investment 

opportunities

Strategic Objective 2.2: Protect global economic and financial stability and press for marketdetermined foreign exchange rates

Strategic Objective 2.3: Advance U.S. economic, financial, and national security goals by 

leveraging multilateral mechanisms

Identified as a Focus Area for Improvement in FY 2015 due mainly to external factors 

slowing progress, specifically securing congressional approval of the International 

Monetary Fund (IMF) Reform package.

Strategic Objective 2.4: Provide technical assistance to developing countries working to 

improve public financial management and strengthen their financial systems

Identified as making Noteworthy Progress in FY 2015 due to the Office of Technical 

Assistance’s (OTA) reputation in program management and the results of recently 

completed projects, particularly in Latin America where OTA helped to establish Latin 

America’s first Tax Inspector General.

Progress toward balanced growth 

Leveraging multilateral mechanisms, Treasury made progress enhancing global economic 

growth prospects by securing commitments from the G-20 countries at the Brisbane Leaders’ 

Summit in November 2014 to boost near-term demand through comprehensive growth strategies 

and to establish the Global Infrastructure Hub to increase global investment. The plan’s 

emphasis on comprehensive growth strategies to boost demand over the near-term reflected an 

important U.S. policy priority. Additional commitments to boost growth have been secured 

through the G-20 process in 2015.

In addition, Treasury defined the policy framework for development finance for the next 15 

years by successfully negotiating the adoption of the Addis Ababa Action Agenda at the Third 

International Conference on Financing for Development in July 2015. The conference provided 

a forum to promote a modern and updated approach to development finance, including a bold 

vision for achieving a prosperous, inclusive, and sustainable world free from extreme poverty. It 

also provided the financing framework for the 2030 Agenda for Sustainable Development

adopted by world leaders in September 2015. The 2030 agenda includes 17 development goals 

in the areas of domestic resource mobilization, private sector investment, combatting illicit 

finance, sustainable infrastructure, improved data, maternal and child health, and others. 

With the United States Trade Representative (USTR), Treasury co-leads the negotiation of 

financial services chapters of free trade agreements. In June 2015, Congress passed Trade 

Promotion Authority (TPA), which granted the President the authority to negotiate trade deals 

that will then be considered by Congress under an expedited approval process. Notable progress 

was made promoting free trade and open markets by reaching agreement on the largest regional 

trade accord in history, the Trans-Pacific Partnership (TPP) agreement, and by advancing the 

Transatlantic Trade and Investment Partnership and the broader U.S. trade agenda.
Executive Summary - 20

Efforts to promote global stability

Treasury protects and supports American economic prosperity by strengthening the external 

environment for U.S. growth, preventing and mitigating global financial instability, and 

managing key global challenges. New commitments secured from China at the June 2015 

Strategic and Economic Dialogue (S&ED) will lead to implementation of economic reforms and 

pro-market policies that will create new opportunities and a more level playing field for U.S. 

workers and firms. They also included commitments from China on the negotiation of 

international export credit disciplines, exchange rate policy and transparency, market access for 

U.S. high-technology goods and services, and expanded participation in China’s markets by U.S. 

financial services providers. Further commitments were secured during the September 2015 

State Visit of China’s president in the areas of development finance and foreign investment 

policy. These commitments will serve to protect global economic and financial stability.

Additionally, Treasury continued efforts with European counterparts to encourage institutional 

development in the euro area and remained engaged with the International Monetary Fund (IMF) 

to monitor progress toward economic stabilization in vulnerable countries like Ukraine and 

Greece. In May 2015, the U.S. Agency for International Development (USAID) and the 

Hashemite Kingdom of Jordan (Jordan) signed a third sovereign loan guarantee agreement that 

will help Jordan continue to provide critical services to its citizens and support specific economic 

reforms to promote economic stability and growth. These guarantees, which Treasury helped to 

design, have proven successful in supporting Jordan’s reform efforts during a time of regional 

instability.

International leadership and assistance

Treasury continues to engage with G-20 members to leverage the FSB to collective advantage, 

supporting the FSB’s objectives of greater financial stability, strong, sustainable, and balanced 

growth, and a level playing field for firms both in the United States and globally. Progress was 

made on the key objectives for global regulatory reform set out at the Pittsburgh Summit in 

2009, including: building more resilient financial institutions with higher capital requirements 

and better quality capital; making the over-the-counter (OTC) derivatives markets safer and more 

transparent; addressing the risks posed by the largest, most complex financial institutions; and 

monitoring potential emerging threats to financial stability.

While Treasury made progress on several key international issues, evolving global geopolitical 

and financial crises and slowing economic growth in key regions and countries required Treasury 

to respond nimbly to immediate priorities, leaving less time for longer-term goals. 

Compounding these external challenges, Congress again failed, in FY 2015, to approve the 2010 

IMF Quota and Governance Reforms and provide sufficient support for multilateral assistance 

priorities. This strains the ability of the United States to lead in these institutions and can 

adversely impact the willingness of other countries to engage in advancing U.S. priorities.

Despite these challenges, Treasury continues to provide critical technical assistance to finance 

ministries and central banks in developing countries. In FY 2015, Treasury’s Office of 

Technical Assistance (OTA) successfully completed several projects in Latin America to provide 

regional models of excellence in public financial management. For example, Treasury’s 

assistance enabled the establishment of the first tax inspector general within the Colombian 
Executive Summary - 21

government, now seen as a leader and model for surrounding countries. In FY2015, OTA also 

continued to provide technical assistance to the Ukrainian government as part of the U.S. 

Government’s rapid response to stabilize the banking sector and strengthen government finances. 

Key Performance Data Highlights

Measure 

(Responsible 

Bureau/Office)

FY 12 FY 13 FY 14 FY 15 4-yr 

Trend

FY 15 

Target

Result 

vs 

Target

Timely review of Committee 

for Foreign Investment in the 

U.S. (CFIUS) cases (%) 

(International Affairs)

N/A 100 100 100 100 Met

Impact of Technical 

Assistance Programs -

Changes that result from 

project engagement – 5 point 

scale (International Affairs)

3.1 3.0 2.9 2.9 3.1 Not met

Traction of Technical 

Assistance Programs – scope 

and intensity of engagement 

– 5 point scale (International 

Affairs)

3.9 3.8 3.7 3.8 3.6 Exceeded

Explanation of Results

Timely review of CFIUS cases (%) (International Affairs)

By statute and regulation, CFIUS must complete its consideration of a covered transaction within 

75 days of acceptance of a notice regarding the transaction, except for transactions that the 

parties have voluntarily withdrawn. The 100 percent result for FY 2015 reflects that CFIUS 

timely reviewed all such notified transactions for national security concerns and concluded 

action transactions after determining there were no unresolved national security concerns.

Impact and Traction of Technical Assistance Programs (International Affairs)

Traction is the degree to which OTA’s foreign counterparts are engaging proactively and 

constructively with OTA advisors, particularly at the working level. Traction was relatively high 

during the reporting period. Impact measures the extent to which a project is achieving the 

intermediate goals and ultimate outcomes described in the project’s terms of reference and work 

plan during the fiscal year – such as passage of law or regulation, an increase in government 

revenues, an improvement in a government’s credit rating, or a reduction in financial 

crimes. The impact measure is primarily a function of the extent to which OTA’s foreign 

counterparts actually make use of OTA’s technical advice and is dependent on a range of factors 

not within OTA’s control, including the policy and political environment, the commitment of incountry actors to reform, overall economic conditions, and in some cases, the country’s security 

environment. Taken together, these factors resulted in a lower average score during this 

reporting period. OTA is sometimes called upon to engage in countries where US foreign policy 

and national security interests are compelling but where the overall political economy and 

security environment is especially challenging and impact is hard to achieve. Sustaining traction 

in these difficult assistance projects is a mark of the program’s strength. It should also be noted 
Executive Summary - 22

that relatively minor deviations from the baseline target are to be expected in assigning an 

aggregate numerical value to a program that consists of many individual projects – the traction 

and impact figures above are the average of more than 150 individual project ratings –

implemented over multiple countries with different policy and political environments.

Goal 3: Fairly and effectively reform and modernize federal financial management, 

accounting, and tax systems

Strategic Objective 3.1: Improve the efficiency and transparency of federal financial 

management and government-wide accounting

Identified as a Focus Area for Improvement in FY 2015 due to anticipated work that will 

be done in FY 2016 to implement the DATA Act and USAspending.gov improvements.

Strategic Objective 3.2: Improve the disbursement and collection of federal funds and reduce 

improper payments made by the U.S. Government

Strategic Objective 3.3: Pursue tax reform, implement the Patient Protection and Affordable 

Care Act and Foreign Account Tax Compliance Act, and improve the execution of the 

tax code

Innovations in federal financial management

Treasury constantly seeks to lead the government in modernizing federal financial management. 

As a co-lead with OMB in implementing the Digital Accountability and Transparency Act of 

2014 (DATA Act), Treasury engaged with communities that create and use federal financial data 

to make it more transparent and available to the American people. 6 Once implemented, the 

DATA Act will make federal spending data more accessible, searchable, and reliable. In FY 

2015, Treasury and OMB published new data standards based on public input that will help

improve the quality of federal spending data and enable agencies to use common standards when 

reporting information. Treasury is also developing resources to support federal agencies in 

adopting the data standards and increasing spending transparency based on the DATA Act

requirements. Treasury will continue to engage the public in the development of new online 

tools to support greater access to data and, by May 2017, further improve data accuracy on 

USAspending.gov.

The amount of college debt increased substantially in recent years, and the United States needs a 

world-class student lending system on par with its higher education system. To develop new 

solutions to this growing problem, the Department of Education partnered with Treasury to 

launch a pilot in February 2015 that allows Treasury to work directly with defaulted student loan 

borrowers. The pilot will yield valuable data and first-hand experience with the collections 

process, which should provide a better understanding of best practices and how to improve 

borrower outcomes.

Fiscal responsibility

Treasury is entrusted with managing the nation’s finances, collecting money and making 

payments on behalf of the United States. Treasury also determines and executes a borrowing 

strategy that meets the federal government’s needs at the lowest cost over time. Furthermore, 

 6 For more information on Treasury’s efforts to implement the DATA Act, access https://www.usaspending.gov/Pages/Data-Act.aspx. 
Executive Summary - 23

Treasury accounts for, and reports on, the U.S. Government’s finances to the American people. 

Sound financial management enables the continual operation of essential government services.

In May 2015, Treasury changed its cash management policy to hold a higher level of cash to 

cover one week of average disbursements in the case of events that limit market access, such as 

cyberattacks or natural disasters. This change was based on a review of policies, 

recommendations from the Treasury Borrowing Advisory Committee, and an assessment of 

emerging threats.

Treasury also made strides in facilitating agencies’ compliance with the Improper Payments 

Elimination and Recovery Improvement Act of 2012 (IPERIA). In FY 2015, Treasury enhanced 

its systems to allow for real-time matching of payments against death and vendor data. In 

addition, the incorporation of Privacy Act-restricted data improved vendor data matching and 

reduced false positives by 99.8 percent. Treasury also improved its analytics capabilities and 

developed agency-specific reports that provide a particular agency or program within the agency 

a high-level summary of statistical observations that may contribute to improper payments. 

These reports provide a means to inform agency management about these observations and to 

determine whether or not the observations call for a more in-depth analytical project in 

partnership with the agency, to assess the issue, determine root cause, and develop internal 

control methodologies to eliminate the issue in the future.

Despite this progress, challenges inhibiting eligibility verification remain, specifically in gaining 

access to additional data sources that will help prevent improper payments. To help mitigate 

some of these challenges, the FY 2016 President’s Budget included a number of legislative 

proposals that would, if enacted by Congress, provide Treasury with additional tools to combat 

waste and fraud as well as greater authority to take actions that will prevent payment errors and 

improve compliance.

Tax reform and administration

Pursuing tax reform remains a top priority for Treasury, along with implementing tax provisions 

of the Affordable Care Act (ACA) and the Foreign Account Tax Compliance Act (FATCA) and 

administering the existing tax code fairly and effectively. In FY 2015, Treasury continued 

negotiating and signing FATCA agreements. At the end of FY 2015, there were 76 signed 

agreements, including 30 signed during the year, and an additional eight agreements in substance 

were reached. In July 2015, Treasury finalized the first-ever comprehensive tax treaty between 

the United States and Vietnam, which represents a significant step in expanding the U.S. tax 

treaty network (pending Senate approval).

To bring better transparency to the tax system and improve enforcement, Treasury successfully 

persuaded the Organization for Economic Cooperation and Development (OECD) to adopt the 

U.S. model to tighten the net on tax evaders. As part of the FY 2016 President’s Budget, 

Treasury also introduced annual revenue proposals to Congress, including 27 new proposals. 

The Administration’s Fiscal Year 2016 Revenue Proposals included an international tax reform 

section addressing inversions and 45 proposals for business tax reform. Finally in this area, TTB 

worked with the Department of Homeland Security’s (DHS) Customs and Border Protection and 

other law enforcement partners to address illicit trafficking of products through customs bonded 
Executive Summary - 24

warehouses and foreign trade zones. TTB also plans to complete full integration into the 

International Trade Data System to improve excise tax enforcement efforts.

Despite these successes, effective tax administration grows more challenging every year due to 

the worsening IRS funding situation. In the past five years, IRS funding has been reduced by 

$1.2 billion, causing the IRS to implement severe controls on all expenditures. These controls, 

which include restrictions on staff replacement, led to a reduction of almost 15,500 full-time 

employees since FY 2010. The funding constraints also significantly affected the IRS’s ability 

to modernize infrastructure and adequately staff systems. By prioritizing resources, the IRS 

delivered another successful filing season in 2015 in terms of return processing: opening on 

schedule and implementing new provisions of FATCA and ACA. The IRS also issued nine out 

of ten refunds in less than 21 days. The filing season was more challenging in terms of customer 

service, which is discussed further under Goal Five.

The IRS also dedicated significant resources to address tax fraud, resulting in the successful 

recovery of $813 million in 2015 and leading to a public-private partnership with software 

developers, banks, and other industries to identify and enact a series of steps to further protect 

taxpayers from tax-related identity theft in 2016. In 2015, through September, the IRS rejected 

or suspended the processing of 4.5 million suspicious returns and stopped 1.2 million confirmed 

identity theft returns, totaling $7.2 billion. Additionally, through September, the IRS stopped 

$2.3 billion worth of refunds in other types of fraud, totaling $9.5 billion defended against

confirmed fraudulent returns.

Key Performance Data Highlights

Measure 

(Responsible 

Bureau/Office)

FY 12 FY 13 FY 14 FY 15 4-yr 

Trend

FY 15 

Target

Result 

vs 

Target

Percentage of Treasury 

payments and associated 

information made electronically 

(%) (Fiscal Service)

88.3 92.5 94.4 94.8 94.9 Not Met

Percentage of total dollar 

amount of U.S. Government 

receipts collected electronically 

(%) (Fiscal Service)

97.0 97.0 98.0 98.0 98.0 Met

Percentage of individual returns 

processed electronically (IRS) 80.5 82.5 84.1 85.3 84.6 Exceeded

Taxpayer Self-Assistance Rate

(IRS) 78.5 83.3 84.7 88.7 85.0 Exceeded

Explanation of Results

Percentage of Treasury payments and associated information made electronically AND Percentage of 

total dollar amount of U.S. Government receipts collected electronically (Fiscal Service)

Fiscal Service has been promoting the Paperless Treasury initiative for several years in an effort to 

disburse payments, as well as receive and settle collections, through electronic means. Fiscal Service will 
Executive Summary - 25

expand the number of digital wallet providers and online bill payment agencies and will work with 

partner agencies to identify the best tools and strategies for transitioning more of their customers to 

electronic alternatives.

Percentage of individual returns processed electronically (IRS)

The number of electronically filed individual tax returns divided by the total individual returns filed. The 

IRS exceeded its FY 2015 target and FY 2014 performance for individual returns processed 

electronically. This increase is attributed to taxpayers’ increasing use of tax software and tax preparers to 

file their tax returns. The IRS will continue to process individual returns as efficiently as possible to meet 

future plans.

Taxpayer Self-Assistance Rate (IRS)

The percentage of taxpayer assistance requests resolved using self-assisted automated services. In FY 

2015, the Taxpayer Self-Assistance Rate was at an all-time high of 88.7 percent, which was 3.7 percent 

above target and 4.0 percent more than FY 2014. The increase was due to taxpayers' use of Web 

Services, particularly the "Where's My Refund" application. The IRS will continue to promote the webfirst strategy to taxpayers, offering a more convenient, efficient, and effective way to meet their needs.

Goal 4: Safeguard the financial system and use financial measures to counter national 

security threats

Strategic Objective 4.1: Identify priority threats to the financial system using intelligence 

analysis and outreach to the financial sector

Identified as making Noteworthy Progress in FY 2015 due to the progress made in 

applying little-used authorities to share information and implementing the new business 

system and advanced algorithms to identify targets and pursue enforcement actions as a 

result of the intelligence.

Strategic Objective 4.2: Develop, implement, and enforce sanctions and other targeted 

financial measures

Identified as making Noteworthy Progress in FY 2015 due to the Joint Comprehensive 

Plan of Action signed in FY 2015 and the new regulations regarding Cuba sanctions 

Strategic Objective 4.3: Improve the cybersecurity of our nation’s financial sector 

Identified in FY 2015 as making Noteworthy Progress due to the significant progress 

made in coordinating and engaging with industry and as a Focus Area for Improvement 

due to ever-evolving threats and complexities in sharing information.

Strategic Objective 4.4: Protect the integrity of the financial system by implementing, 

promoting, and enforcing anti-money laundering and counterterrorism financing 

standards

Aligned APG: Focus Enforcement on High-Priority Threats Using Proactive Analysis

Improved protection of the financial system

Treasury works to protect the integrity of the financial system and advance key national security 

and foreign policy objectives through outreach, coordination, and collaboration with public and 

private sector partners; regulation, enforcement, financial intelligence analysis; and targeted 

financial activities and measures. One of Treasury’s FY 2014-2015 Agency Priority Goals 

(APGs) was to use proactive analytics to focus enforcement on high-priority threats. By 

focusing on this APG, Treasury implemented advanced analytics capabilities and improved the 

use and sharing of information on threats to the financial system. In FY 2015, FinCEN initiated 

daily tactical reporting to law enforcement, foreign partners, and the intelligence community 
Executive Summary - 26

through the use of new information technology capabilities. By developing and employing 

business rules in a modernized system, FinCEN automatically screened Bank Secrecy Act (BSA) 

reports daily on topics of national security concern, including terrorist financing, cyber threats, 

and Ukraine kleptocracy. As a result of the efforts, FinCEN quadrupled the intelligence products 

provided and increased completed enforcement actions in FY 2015, compared to FY 2014.

FinCEN also moved the global community forward on anti-money laundering and counterterrorism financing policies and coordinated multi-lateral efforts to support Ukraine’s efforts to 

recover misappropriated assets. FinCEN issued the first civil enforcement action against a 

virtual currency exchanger, Ripple Labs, for willfully violating the BSA. 

Effectiveness of sanctions programs

Through a steady campaign to expose Iran’s deceptive activities in the financial arena, Treasury 

isolated Iran’s banks from the world’s financial centers, wounding its trade and financial

strength. Since 2010, these and other efforts led to the diplomatic process that produced the Joint 

Comprehensive Plan of Action in July 2015. This plan will ensure Iran’s nuclear program 

remains exclusively peaceful and, in turn, will lift specified nuclear-related sanctions on Iran 

upon verification from the International Atomic Energy Agency that Iran has implemented key 

nuclear commitments. This success proves that smart, creative, persistent financial efforts, when 

backed by the superb support of the U.S. intelligence community, can change behavior.

In December 2014, the President announced a set of diplomatic and economic changes to chart a 

new course in U.S. relations with Cuba and further engage and empower the Cuban people. 

Treasury and the Department of Commerce published revised Cuban Assets Control Regulations 

and Export Administration Regulations, effective in January 2015, that will facilitate travel to 

Cuba for authorized purposes, approve processing of certain financial transactions, and allow 

other activities in the areas of telecommunications, financial services, trade, and shipping. In 

September 2015, Treasury and Commerce announced additional amendments to the Cuba 

sanctions regulations. These regulatory changes build upon the January amendments and will 

further facilitate the normalization process between Cuba and the United States.

Financial sector cyber security 

Cyber threats are vast and evolving—not just increasing in number, but also in types of incidents 

and means for intrusion. The prevalence of cyber risks creates a persistent and complex 

challenge for financial institutions spanning the sector. The financial costs of cyber-attacks are 

real and increasing; disruption of business, erosion of customers, loss of revenue, reputational 

damage and loss of confidence, and theft of intellectual property are just a few ways cyberattacks hurt the financial system.

As the Sector Specific Agency for Financial Services, defined under Presidential Policy 

Directive 21, Critical Infrastructure Security and Resilience, Treasury participates in interagency 

and cross-sector initiatives and plays a key role in managing responses to disruptive events. 

While Treasury’s sector-specific responsibilities include all hazards, whether natural or manmade, in recent years the Department has increasingly focused on promoting improvements in 

cybersecurity across the financial sector. In FY 2015, Treasury worked with industry to organize 
Executive Summary - 27

cybersecurity initiatives on a national level using the following themes: baseline protections, 

information sharing, and response and recovery.

In February 2015, the President signed an executive order encouraging and promoting the 

sharing of cybersecurity threat information within the private sector and between private and 

government entities. Treasury assisted DHS in promoting information sharing and analysis and 

worked this year to automate the information-sharing process.

To enable effective incident response, Treasury established and convened the first-ever meetings 

of the Financial and Banking Information Infrastructure Committee at the principal level and 

spearheaded the development of tabletop exercises to test cyber-incident response processes. In 

FY 2015, Treasury hosted three cyber-related exercises with more than 25 public and private 

sector organizations.

Protecting Treasury’s infrastructure is critical to maintaining a secure financial infrastructure. 

Consequently, Treasury fully committed to OMB’s government-wide cyber-sprint and created an 

internal cyber dashboard to monitor progress and potential threats. As of August 2015, Treasury 

met OMB’s requirement for strong authentication of users with privileged access and was 

considered a top-performing federal agency for cybersecurity cross-agency priority goal. 

Key Performance Data Highlights

Measure 

(Responsible 

Bureau/Office)

FY 12 FY 13 FY 14 FY 15 4-yr 

Trend

FY 15 

Target

Result vs 

Target

Percentage of users finding 

that the financial intelligence 

collected by FinCEN pursuant 

its regulations provides 

valuable information to 

safeguard the financial 

system, combat money 

laundering, and counter 

terrorist financing 

90 80 81 83 82 Exceeded

Impact of TFI programs and 

activities – 10 point scale 

(TFI)

8.1 8.3 8.5 8.8 8.5 Exceeded

Explanation of Results

Percentage of users finding that the financial intelligence collected by FinCEN pursuant its regulations 

provides valuable information to safeguard the financial system, combat money laundering, and counter 

terrorist financing (FinCEN)

Survey data that looks at the value of FinCEN data, such as whether the data (1) provided unknown 

information, (2) supplemented or expanded known information, (3) verified information, (4) helped 

identify new leads, (5) opened a new investigation or examination, (6) supported an existing investigation 

or examination, or (7) provided information for an investigative or examination report. While the FY 

2015 results remain lower than the FY 2012 level, FinCEN exceeded its target of 82 percent and the 

results have increased steadily for the past three years. FinCEN introduced a new query tool late in FY 
Executive Summary - 28

2013 that changed how users access financial intelligence products. While this new tool provides 

enhanced search capabilities, it appears that limited training opportunities for users in FY 2013 caused a 

drop in results. As a result, since FY 2013, FinCEN has placed greater emphasis on both in-person and 

on-line training that will better assist users and continue to improve performance in this area.

Impact of TFI programs and activities (TFI)

There are several things that account for TFI’s increase in program impact and activities to include the 

signed Joint Comprehensive Plan of Action in FY 2015 that implements sanctions relief to Iran in 

exchange for Iran taking steps to ensure a peaceful nuclear program, as well as the new regulations 

regarding Cuba sanctions. Additionally, TFI has advanced the rulemaking process for Beneficial 

Ownership, and TFI has continued funding Third Party Money Laundering cases and their operational 

needs. 

Goal 5: Create a 21st Century approach to government by improving efficiency, 

effectiveness, and customer interaction

Strategic Objective 5.1: Increase workforce engagement, performance, and diversity by 

instilling excellence, innovation, and inclusion in Treasury’s organizational culture and 

business practices

Strategic Objective 5.2: Support effective, data-driven decision-making and encourage 

transparency through intelligent gathering, analysis, sharing, use, and dissemination of 

information 

Strategic Objective 5.3: Promote efficient use of resources through shared services, strategic 

sourcing, streamlined business processes, and accountability

Designated as a Focus Area for Improvement in FY 2015 due to the challenges facing 

Treasury shared service providers and the anticipated efforts in the coming year to 

standardize products and services.

Strategic Objective 5.4: Create a culture of service through relentless pursuit of customer 

value

Aligned APG: Increasing IRS Self-Service Options for Taxpayers

Pursuit of best-in-class business practices

Treasury’s future success, both immediate and long term, depends on sustaining and developing 

the resources required to achieve the Department’s mission. These critical resources include 

finances, physical assets, technology, and most importantly, people. In the FY 2014-2017 

strategic plan, Treasury committed to capitalizing on 21st century advances in knowledge, 

methods, and technology to manage resources as effectively and efficiently as possible, creating 

the best value for all constituents.

During FY 2015, Treasury advanced several leading management practices. Treasury continued 

the workforce planning effort that began in FY 2014 and will focus next on the cybersecurity 

workforce. Treasury also established the Office of Risk Management, headed by the Chief Risk 

Officer, and Treasury’s Deputy Secretary established the Treasury Risk Management 

Committee, which she co-chairs with the Chief Risk Officer, and introduced a more robust risk 

discussion in Treasury’s organizational performance reviews for leaders from different areas to 

surface potential risks and identify effective mitigation actions.
Executive Summary - 29

Employee engagement

Recent events, including the cybersecurity breaches at the Office of Personnel Management 

(OPM) and sustained fiscal uncertainty, test employees’ morale and ability to remain engaged. 

Fortunately, 94 percent of the Treasury responses to the Federal Employee Viewpoint Survey 

reflect that employees remain willing to put in extra effort to get a job done and 88 percent are 

constantly looking for ways to do their jobs better. In FY 2015, Treasury remained committed to 

fostering an environment where leaders and employees feel encouraged to focus on important 

principles of good government and empowered to take action. Treasury has institutionalized a 

focus on employee engagement by adopting an annual engagement program cycle of data-based 

action planning, program implementation, and periodic performance reviews. Additionally, the 

management offices responsible for individual and organizational performance management 

policy and implementation created the Performance Alignment Work Group to further improve 

alignment of individual actions to organizational results within Treasury.

Treasury also continued to foster an environment where every employee feels equally valued. In 

FY 2015, more than 200 supervisors and managers participated in a cultural transformation effort 

focused on diversity and inclusion principles. Human capital issues, including diversity and 

inclusion, were regular topics at the organizational performance reviews and remain a top 

priority for Treasury leadership. 

Service to customers

In Treasury’s efforts to lead more efficient practices in government, Treasury expanded its 

customer base for shared administrative services this year to include the Department of Housing 

and Urban Development and DHS. While this is an indicator of the high quality of Treasury’s 

products and services, customer feedback indicates that their needs and expectations vary 

greatly. Consequently, Treasury is working to improve communications and standardize 

services, products, and processes to sustain the cost efficiencies of the model and improve 

customer satisfaction.

Few government agencies have greater interaction with the American people than the IRS, and 

providing top quality service to taxpayers, including helping them understand and meet their tax 

obligations, remains a central focus for the IRS. That is why Treasury’s second FY 2014-2015 

APG focused on increasing self-service options for taxpayers, who increasingly expect ondemand web-based interactions. In FY 2015, the IRS continued to invest in and prioritize online 

services to meet taxpayer demand for anytime, anywhere, any-device access, delivering 

innovative digital interactions and enhanced support and communication with the tax community 

and government partners.

Online service options cost comparatively less and have a greater capacity to assist larger 

numbers of taxpayers than other service channels. At the same time, the IRS recognizes that 

telephone contact remains a critical and preferred mechanism for many taxpayers and, 

consequently, committed as many resources as possible in FY 2015 to maintaining telephone 

service at acceptable levels. As referenced earlier in this report, between FY 2010 and FY 2015, 

Congress cut the IRS budget by more than $1.2 billion, which represents a cut of nearly 10 

percent in nominal dollars and more than 17 percent with inflation. This impacted the IRS’s 

ability to serve taxpayers, contributing to the level of service falling to 38.1 percent in FY 2015. 
Executive Summary - 30

The IRS also experienced increased call volume in FY 2015 and issued 17.6 million disconnects, 

which are automatic call terminations by the IRS after a fixed waiting period. These “courtesy” 

disconnects are designed to limit excessive wait time and direct callers to alternative service 

channels.

Increasing the use of online services, however, results in additional challenges. In May 2015, the 

IRS determined that unauthorized third parties used taxpayers’ personal information obtained 

from sources outside of the IRS to access its “Get Transcript” application by using stolen 

information to clear the application’s multi-step user authentication process. The required prior 

personal knowledge about the taxpayer included social security number, date of birth, filing 

status, street address, and answers to several identity verification questions typically known only 

to the taxpayer. The IRS believes some of this information may be used to file fraudulent tax 

returns during the upcoming 2016 filing season. Immediately after this incident, the IRS 

suspended the “Get Transcript” application and contacted impacted taxpayers, directing them to 

identity theft protection tools available through the IRS and credit-monitoring services made 

available at the IRS’s expense. The IRS also flagged impacted accounts in its core processing 

system to protect taxpayers moving forward. Securing systems and protecting taxpayers’ 

personal information continues to be a top priority for Treasury.

Despite the threat of identity theft, taxpayers’ demand for self-service and electronic service 

options continues to increase. The IRS plans to create a more secure online environment by 

focusing on developing and maintaining strong authentication and identity management 

capabilities. In addition, the IRS provides year-round assistance through outreach and education 

programs, tax forms and publications, and toll-free call centers, taxpayer assistance centers, 

volunteer income tax assistance sites, and tax counseling for the elderly sites.

Key Performance Data Highlights

Measure 

(Responsible 

Bureau/Office)

FY 12 FY 13 FY 14 FY 15 4-yr 

Trend

FY 15 

Target

Result vs 

Target

Federal Employee Viewpoint 

Survey (FEVS) Engagement 

Index – 1 to 100 (%) 

(Management)

70 68 66 66 67 Not Met

Treasury-wide Footprint in 

Thousands of Sq. Ft. 

(Management)

37,998 37,320 36,418 35,439 36,031 Exceeded

Customer Service 

Representative Level of 

Service (%) (IRS)

67.6 60.5 64.4 38.1 38.0 Exceeded
Executive Summary - 31

Summary of Management and Performance Challenges

Several cross-cutting challenges were in identified and discussed in Treasury’s FY 2015 

organizational performance reviews that affect efforts to achieve its strategic priorities: 

• Changing international conditions and evolving threats: As previously discussed, 

evolving and unpredictable global economic and geopolitical conditions affect 

Treasury’s negotiations and program implementation. The nature of the threats that 

Treasury faces in the cybersecurity, anti-money laundering, and terrorist financing 

realms are also fast-growing and constantly changing. Additionally, while the economy 

has largely recovered, Treasury must remain vigilant to new threats to financial stability 

and economic growth.

• Uncertain fiscal and legislative environments: The pattern of continuing resolutions 

and the potential for a lapse in appropriations constrains Treasury’s ability to plan 

strategically, impacts its ability to effectively manage the country’s debt, and reduces 

the level of service to taxpayers. Additionally, reauthorization of certain programs and 

congressional approval of key reforms would enable Treasury to better achieve U.S. 

objectives but is difficult to predict and, consequently, to plan for its execution.

• Increased expectations and demand: Treasury has, in recent years, been asked to lead 

government-wide implementation of new laws and policies (such as ACA and DATA 

Act), including the launch of innovative new tools and pilots, while adjusting to reduced 

resources and staffing levels.

Explanation of Results

Federal Employee Viewpoint Survey (FEVS) Engagement Index – 1 to 100 (%) (Management)

The FEVS Engagement Index denotes the extent to which employees are engaged in their work and 

motivated by their organization’s leadership. Treasury’s Engagement Index remained constant at 66 

percent from 2014 to 2015. Eight out of eleven Treasury components increased their Engagement Index 

by 1 to 5 points from 2014 to 2015. Because of IRS’s size, however, a decline of 1 point in its 

Engagement Index neutralized the effect of other bureau increases. 

Treasury-wide Footprint in Thousands of Sq. Ft. (Management)

This measures the total square footage occupied by Treasury’s owned and leased buildings. The 

Department’s real property footprint was reduced by an estimated three percent (almost one million 

square feet) during FY 2015. The reduction was achieved through better use of existing office space, 

consolidations and co-locations, increased use of telework, and the implementation of new space design 

standards that use a reduced footprint to optimally right-size the portfolio consistent with Department 

mission and essential program needs. The Department projects that the footprint will be reduced by 

another 600,000 square feet in FY 2016.

Customer Service Representative Level of Service (%) (IRS)

This measure is defined as the number of toll free callers that either speak to a Customer Service 

Representative or receive information messages divided by the total number of attempted calls. In FY 

2015, the Customer Service Representative Level of Service (LOS) target was lowered due to decreased 

resources and staffing and a projected increase in the number of ACA inquiries. During the filing season, 

the level of service was 37.4 percent; however, the overall fiscal year target was exceeded by 0.1 percent. 

FY 2015 Assistor Calls Answered decreased 21 percent and automatic disconnections based on wait times 

increased 11.6 percent when compared to FY 2014. Through extensive communication, the IRS 

encourages taxpayers to use the Web or automated tools and alternate channels to resolve their concerns.
Executive Summary - 32

• Effectiveness of the hiring process: The federal hiring process poses challenges to 

Treasury organizations aiming to quickly recruit and hire top talent. Treasury seeks 

skills that are in high demand in the private sector, which has more flexibility in hiring

practices and incentives.

• Availability of data and analytic capability: Reliance on third party or private sector 

analysis poses a risk to the quality of the analysis and recommendations that Treasury 

provides to senior government officials. Treasury faces challenges in its efforts to 

improve decision-making by reducing reliance on third-party analysis. Additionally, 

Treasury is structured and, in some cases, statutorily required, to protect data. 

Reshaping Treasury’s ability to meet increasing calls in recent years to share data across 

organizations may require additional infrastructure and staff.

In addition to the performance challenges discussed above and in previous sections of this report, 

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

facing the Department, in accordance with the Reports Consolidation Act of 2000. 7 These 

challenges do not necessarily indicate deficiencies in performance; some represent inherent risks 

that require continuous monitoring. Refer to Section C of Part 3, Other Information, for a 

detailed discussion of these challenges, including Treasury’s progress toward addressing them.

OIG-Identified Treasury-Wide Management Challenges

• Cyber Threats

• Management of Treasury’s Authorities Intended to Support and Improve the Economy

• Efforts to Promote Spending Transparency and to Prevent and Detect Improper 

Payments

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

• Gulf Coast Restoration Trust Fund Administration

TIGTA-Identified IRS Management Challenges 

• Security for Taxpayer Data and IRS Employees

• Implementing ACA and Other Tax Law Changes

• Tax Compliance Initiatives

• Fraudulent Claims and Improper Payments

• Achieving Program Efficiencies and Cost Savings

 7 SIGTARP does not provide an annual report to the Secretary because it provides oversight over a program that spans multiple agencies.
Executive Summary - 33

• Improving Tax Systems and Online Services

• Providing Quality Taxpayer Service Operations

• Globalization

• Taxpayer Protection and Rights

• Human Capital

FY 2016 Outlook

In considering the challenges and risks to successful mission delivery facing the Department, 

Treasury identified several initiatives to pursue in FY 2016, including two new agency priority 

goals (APGs) for FY 2016-2017:

• Increase secure self-service options for taxpayers (FY 2016-2017 APG led by the IRS).

• Develop and promote financial transparency policies and their adoption by leading, in 

collaboration with OMB, the government-wide implementation of the DATA Act 

(FY 2016-2017 APG led by the Fiscal Assistant Secretary).

• Continue Treasury’s efforts to expand access to credit and bring private capital back into 

the housing market by completing comprehensive housing finance reform; securing the 

reauthorization of the SSBCI and CDFI Bond Guarantee programs; and expanding access 

to long-term savings opportunities for more Americans by continuing to improve the 

myRA program and increase its enrollments.

• Secure congressional approval of the 2010 IMF quota and governance reform proposal 

and confirmations of nominations to ensure stable and effective U.S. representation at 

International Financial Institutions.

• Present to the President key findings and potential opportunities to improve the student 

loan collections process for defaulted borrowers.

• Secure the funding necessary for the IRS to maintain a balanced enforcement program 

and deliver the web-first service model.

• Increase coordination and information sharing efforts across government and private 

sectors to protect the stability of the financial system and the interests of American 

citizens.

• Partner with OMB and the General Services Administration to increase the flexibility 

with which agencies can acquire and share data sets and analytic capability.

• Transform the Departmental Offices’ hiring process using Lean Six Sigma process 

improvement methodologies, providing best practices for other organizations and making 

Treasury more competitive as an employer.

Internal Revenue Service 

FY 2017 

President’s Budget 

February 9, 2016 
IRS - 2 

Table of Contents

Section 1 - Purpose................................................................................................ 4

1A – Mission Statement .........................................................................................................4

1.1– Appropriation Detail Table by Appropriation and Budget Activity .........................4

1B – Vision, Priorities, and Context .....................................................................................5

Section 2 – Budget Adjustments and Appropriations Language................... 18

2.1 – Budget Adjustments Table .........................................................................................19

2A – Budget Increases and Decreases Description ............................................................20

FY 2016 Administrative Provision 113 ...........................................................................20

Maintaining Current Levels (MCLs) .................................................................................20

Efficiencies and Savings .......................................................................................................21

Program Increases ................................................................................................................21

Theme 1: Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support ..........................................................................................22

Implement Legislative Mandates Component .................................................................23

Facilitate Voluntary Compliance through Taxpayer Service .........................................24

Development of Innovative Technology and Tools .........................................................24

Theme 2: Understand non-Compliant Taxpayer Behavior, and Develop Approaches to 

Deter and Change It ..........................................................................................................27

Strengthen Core Enforcement Programs ........................................................................28

Develop Innovative Technology ......................................................................................30

Theme 6: Drive More Agility and Efficiency in IRS Operations ...................................33

Implement New Capabilities and Systems ......................................................................33

Provide Support for Existing Systems Component .........................................................34

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft ............................35

Address the Increased Workload Associated with Identity Theft, Refund Fraud, and 

Improper Payments .........................................................................................................36

Strengthen Technology to Improve the Prevention of Refund Fraud and Improper 

Payments .........................................................................................................................38

Alcohol and Tobacco Tax and Trade Bureau Transfer ..................................................40

2.2 – Operating Levels Table ...............................................................................................41

2B – Appropriation Language and Explanation of Changes ...........................................42

2C – Legislative Proposals ...................................................................................................47

2D – Legislative Tax Proposals ...........................................................................................48

2E – Strategic Objective Annual Review (SOAR) .............................................................50

2F – IRS Use of Evidence and Evaluation ..........................................................................52

Section 3 – Budget and Performance Plan ....................................................... 54

Taxpayer Services .................................................................................................................54

2.1 – Budget Adjustments Table .........................................................................................55

2.2 – Operating Levels Table ..............................................................................................56

2.3 – Appropriation Detail Table ........................................................................................57

3A – Pre-Filing Taxpayer Assistance and Education ..........................................................58

3.1.1 – Budget and Performance Report and Plan ..............................................................61

3B – Filing and Account Services .......................................................................................61

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

Enforcement ..........................................................................................................................66

2.1 – Budget Adjustments Table .........................................................................................67
IRS - 3 

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

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

3C – Investigations ..............................................................................................................69

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

3D – Exam and Collections .................................................................................................73

3.1.4 – Budget and Performance Report and Plan ..............................................................79

3E – Regulatory ...................................................................................................................79

3.1.5 – Budget and Performance Report and Plan ..............................................................81

Operations Support ..............................................................................................................82

2.1 – Budget Adjustments Table .........................................................................................83

2.2 – Operating Levels Table ..............................................................................................84

2.3 – Appropriation Detail Table ........................................................................................85

3F – Infrastructure ...............................................................................................................85

3.1.6 – Budget and Performance Report and Plan ..............................................................88

3G – Shared Services and Support ......................................................................................88

3.1.7 – Budget and Performance Report and Plan ..............................................................93

3H – Information Services ..................................................................................................93

3.1.8 – Budget and Performance Report and Plan ..............................................................96

Business Systems Modernization ........................................................................................97

2.1 – Budget Adjustments Table .........................................................................................97

2.2 – Operating Levels Table ..............................................................................................98

2.3 – Appropriation Detail Table ........................................................................................99

3I – Business Systems Modernization .................................................................................99

3.1.9 – Budget and Performance Report and Plan ............................................................103

Section 4 – Supplemental Information............................................................ 104

4.1 – Summary of Capital Investments ............................................................................104

4A – Capital Investment Strategy .....................................................................................104

4B – IRS Aging Legacy Information Technology (IT) Infrastructure (non-BSM) 

Proposed Long-term Multiyear Funding Strategy and Timetable ................................107

4C – Summary of FY 2015 Savings Realized ...................................................................110

4.2 - Return on Investment (ROI) for IRS Major Enforcement Programs ..................112

4.3 – IRS Performance Measure Table ............................................................................113

4.4 – Alignment of the FY 2017 Initiatives to Goals and Themes ..................................115

4.5 – Summary of IRS FY 2017 ACA Budget Request ...................................................116

4.6 – Summary of IRS FY 2017 Budget Request by Theme ...........................................116

4.7 – Summary of IRS FY 2017 Program Integrity Cap Adjustment ...........................117
IRS - 4 

Internal Revenue Service

Section 1 - Purpose

1A – Mission Statement

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

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

1.1 – Appropriation Detail Table by Appropriation and Budget Activity

Dollars in thousands

Internal Revenue Service

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Taxpayer Services 27,476 $2,173,684 30,370 $2,333,376 31,056 $2,406,318 686 $72,942 2.26% 3.13%

Pre-Filing Taxpayer Assistance and 

Education 5,349 609,196 5,499 629,920 5,532 643,197 33 $13,277 0.60% 2.11%

Filing and Account Services 22,127 1,564,488 24,871 1,703,456 25,524 1,763,121 653 59,665 2.63% 3.50%

Enforcement 39,708 $4,767,563 38,840 $4,864,936 41,028 $5,216,263 2,188 $351,327 5.63% 7.22%

Investigations 3,399 601,665 3,425 604,620 3,849 714,208 424 109,588 12.38% 18.13%

Exam and Collections 35,258 4,018,292 34,402 4,108,566 36,163 4,347,684 1,761 239,118 5.12% 5.82%

Regulatory 1,051 147,606 1,013 151,750 1,016 154,371 3 2,621 0.30% 1.73%

Operations Support 10,614 $3,601,436 11,922 $3,746,688 12,250 $4,314,099 328 $567,411 2.75% 15.14%

Infrastructure 833,846 832,543 895,094 62,551 7.51%

Shared Services and Support 5,013 1,126,230 5,231 1,141,485 5,257 1,197,954 26 56,469 0.50% 4.95%

Information Services 5,601 1,641,360 6,691 1,772,660 6,993 2,221,051 302 448,391 4.51% 25.29%

Business Systems Modernization 309 $107,745 440 $290,000 469 $343,415 29 $53,415 6.59% 18.42%

Subtotal New Appropriated Resources 78,107 $10,650,428 81,572 $11,235,000 84,803 $12,280,095 3,231 $1,045,095 3.96% 9.30%

Other Resources:

Reimbursables 612 103,474 643 133,987 675 140,686 32 6,699 4.98% 5.00%

Offsetting Collections - Non Reimbursables 11 10,314 12 42,797 12 44,937 2,140 5.00%

User Fees 1,344 438,557 876 509,309 1,530 399,730 654 (109,579) 74.66% -21.52%

Recovery from Prior Years 1,908

Unobligated Balances from Prior Years 428 294,625 453,357 384,544 (68,813) -15.18%

Transfers In/Out 2

7 (5,000) (5,000)

Resources from Other Accounts 3

290 2 2

Subtotal Other Resources 2,685 $848,885 1,533 $1,139,450 2,219 $964,897 686 ($174,553) 44.75% -15.32%

Total Budgetary Resources 80,792 $11,499,313 83,105 $12,374,450 87,022 $13,244,992 3,917 $870,542 4.71% 7.03%

% Change

FY 2016 to FY 2017 

Request

Change

FY 2016 to FY 2017 

Request

FY 2016

Enacted 1

FY 2015

Actual

2

Resources from Transfers In/Out include a FY 2015 transfers between IRS and the Office of National Drug Control Policy (ONDCP) High Intensity Drug 

Trafficking Area (HIDTA) Program (obligations $7 thousand), and a 2017 transfer out to the Alcohol and Tobacco Tax and Trade Bureau (TTB) ($5 million).

FY 2017

Request

3

Resources from Other Accounts include Other Direct FTE funded by the Department of Health and Human Services (287 FTE in FY 2015) and the Federal 

Highway Administration (3 FTE for FY 2015, and 2 FTE projected for FY 2016 and FY 2017).

1

FY 2016 Enacted includes $290 million in Section 113 Administrative Provision funding in the following amounts: $176.8 million in Taxpayer Services, $4.9 

million in Enforcement, and $108.2 million in Operations Support.
IRS - 5 

1B – Vision, Priorities, and Context 

Improving Tax Administration 

The IRS administers the nation’s tax laws and collects the revenue to fund the government. In

fiscal year (FY) 2015, the IRS processed 244 million tax returns and other forms, and 

collected $3.3 trillion in gross taxes (gross receipts before tax refunds of $403 billion), 

equating to 93 percent of total federal government receipts. The Budget will allow the IRS to 

make progress in rebuilding the robust capabilities necessary to administer the tax system, and 

make new investments to keep pace with technology, taxpayer expectations, criminal activity 

related to stolen identity/refund fraud, and preventing cyber crime. The IRS is focused on 

providing a more integrated and secure delivery of taxpayer services through the same 

efficient, customer-focused channels, that taxpayers have come to expect from other financial 

institutions. The IRS is also working toward a more streamlined compliance program that 

identifies issues sooner and resolves them faster. These plans are part of the IRS Future State 

Vision. 

Customer feedback indicates the desire for more online tools to facilitate the delivery of 

taxpayer services. In the IRS Oversight Board’s 2015 Taxpayer Attitude Survey, 84 percent 

of taxpayers stated that they were likely to use the IRS website, and 85 percent of taxpayers 

who were under the age of 35 said IRS applications on mobile devices such as smartphones 

are valuable. To address this customer feedback, “increasing secure self-service options for 

taxpayers” was established as an Agency Priority Goal and investments in the FY 2017 

request to enhance IRS’s online services will directly address this goal. 

The IRS plans to more effectively and efficiently deliver services to more people at a lower 

cost, increase compliance, prepare for the future, and prevent identity theft. The plan to 

improve tax administration requires the IRS to invest in the following areas: 

• Integrated and Secure Taxpayer Experience 

o Faster, simpler problem solving tools to identify issues such as math errors, 

decreasing taxpayer burden, and reducing the risk of penalties and interest; 

o Improved capabilities for both taxpayers and IRS employees to address issues 

through enhanced digital services; and 

o Communication channels that reduce wait times and empower taxpayers to 

take more control of their tax account. This includes technology enabling 

personal service without being physically present in the same location. 

• Streamlined Compliance Program 

o Leveraging better data analytics to improve voluntary compliance; 

o Mechanisms and case management capabilities that enable activities to 

minimize taxpayer burden; 

o A shortened enforcement cycle so taxpayers quickly know their issues are

resolved with as few contacts as necessary; and 
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o Improved outreach and notifications prior to and during filing coupled with 

applications allowing taxpayers to validate and/or self-correct their accounts.

• Stronger Foundational Capabilities – Information technology building blocks to

deliver services and enforcement actions efficiently and effectively; deliberate

workforce planning to attract and retain a skilled workforce; and an enhanced learning 

evaluation technology and dynamic enterprise knowledge management system.

• Strong Information and System Security – Secure technologies to provide 

maximum protection of taxpayer information, combat identity theft, provide timely 

victim assistance, and allow for appropriate enforcement. 

New Investment Review Process

IRS senior leadership developed and implemented a new investment process to ensure 

proposed investments align with the IRS Strategic Plan. The IRS leadership prioritized its 

new investments based on their alignment with the IRS’s strategic themes and this submission 

includes the IRS’s highest priority investments. This includes an array of lower cost, online 

services; early error detection; online self-correction tools; enhanced cybersecurity; and 

compressed, more virtualized enforcement with minimal taxpayer burden. 
IRS - 7 

Strategic Goals IRS Strategic Objectives IRS Strategic Theme

Strategic Goal I: 

Deliver high quality 

and timely service to 

reduce taxpayer 

burden and encourage 

voluntary compliance. 

- Design tailored service approaches with 

a focus on digital customer service to 

meet taxpayer needs, preferences, and 

compliance behaviors in order to 

facilitate voluntary compliance.

- Provide timely assistance through a 

seamless, multichannel service 

environment to encourage taxpayers to 

meet their tax obligations and accurately 

resolve their issues.

- Deliver clear and focused outreach, 

communications and education programs 

to assist taxpayer understanding of tax 

responsibilities and awareness of 

emerging tax laws.

Theme 1 - Facilitate 

voluntary compliance by 

empowering taxpayers 

with secure innovative 

tools and support

Theme 3- Leverage and 

collaborate with external 

stakeholders

Strategic Goal II: 

Effectively enforce the 

law to ensure 

compliance with tax 

responsibilities and 

combat fraud. 

- Enforce domestic and international 

compliance by strengthening expertise, 

adopting innovative approaches, and 

streamlining procedures.

- Identify trends, detect high-risk areas of 

non-compliance, and prioritize 

enforcement approaches by applying 

research and advanced analytics.

Theme 2 -Understand noncompliant taxpayer 

behavior, and develop 

approaches to deter and 

change it

Strategic Foundation 

for Organizational 

Excellence: 

Invest in the IRS

workforce and the 

foundational 

capabilities necessary 

to achieve its mission 

and deliver high 

performance for 

taxpayers and 

stakeholders.

- Invest in building a highly talented, 

diverse workforce & cultivating an 

inclusive & collaborative environment. 

- Realize operational efficiencies and 

effectively manage costs by improving 

enterprise-wide resource allocation and 

streamlining processes.

- Implement enterprise-wide analytics 

and research capabilities to make timely, 

informed decisions.

Theme 4 - Cultivate a wellequipped, diverse, skilled 

and flexible workforce 

Theme 5 - Select highest 

value work using data 

analytics and a robust 

feedback loop

Theme 6 – Drive more 

agility, efficiency, and 

effectiveness in IRS 

Operations 

Focus Area – Strengthen 

cybersecurity and 

eliminate identity theft

Themes in bold are supported by investments in the FY 2017 Budget Request.
IRS - 8 

Treasury Strategic and Agency Priority Goals 

The IRS FY 2017 Budget supports the following Department of the Treasury Strategic and 

Agency Priority Goals: 

• Treasury Strategic Goal: Fairly and effectively reform and modernize federal 

financial management, accounting, and tax systems.

• Treasury Strategic Objective: Pursue tax reform, implement the Patient Protection 

and Affordable Care Act (ACA, Public Law 111-148) and Foreign Account Tax 

Compliance Act (FATCA, Public Law 111-147), and improve the execution of the tax 

code.

• Treasury Strategic Goal: Create a 21st–century approach to government by 

improving efficiency, effectiveness, and customer interaction.

• Treasury Strategic Objective: Create a culture of service through relentless pursuit of 

customer value.

Agency Priority Goal: Increasing Secure Self-Service Options for Taxpayers:

The IRS will introduce self-service and electronic-service taxpayer options to enable 

taxpayers to securely authenticate, view account status, view and print tax records online, pay 

outstanding debts, enter into installment agreements, get tax law information, and easily 

access all parts of IRS.gov. By September 2017, the percentage of service interactions 

processed electronically should reach 32%, and the percentage of electronic interactions 

completed by taxpayers should reach 47%. 

The tax administration system of the future will promote and improve voluntary compliance 

by delivering better service to more people at a lower cost. Taxpayers will have a variety of 

service options with an emphasis on online tools and support, and will be able to obtain 

service when and where they want it. The IRS will strive to accelerate enforcement processes 

through early issue detection, resolution, and minimal taxpayer burden, while simultaneously 

maximizing revenue by targeting the highest value work. To achieve this future state of tax 

administration the IRS has established six strategic themes and one focus area to guide its

investment strategy and resource allocation. These themes align with existing Strategic Goals 

and Objectives and provide a clearer articulation of the strategic outcomes the IRS seeks to 

achieve in the future. The FY 2017 Budget aligns new investments to subsets of these 

themes: 

Theme 1: Facilitate voluntary compliance by empowering taxpayers with secure 

innovative tools and support - Investments that support this theme will drive the IRS 

towards better delivery of tax administration by developing a more taxpayer-centric service 

and compliance model with a variety of self-service options and early error detection and 

resolution tools to reduce taxpayer burden. Some of the cutting-edge technologies requested 

are:

• Secure e-authentication technologies to improve the identification of individual 

taxpayers as well as third parties and businesses; 
IRS - 9 

• Event Driven Architecture (EDA) to transform the IRS IT software architecture to a 

more efficient and responsive means of processing tax returns, collecting tax revenue, 

and issuing tax refunds by treating each transaction as a single event as opposed to 

batch processing; 

• Enterprise Case Management (ECM) to establish a single, integrated case management 

system; and 

• Expanded functionality to critical systems projects such as the Customer Account Data 

Engine (CADE) 2 and Modernized E-file (MeF), including the electronic receipt and 

processing of Form 1040X, Amended U.S. Individual Income Tax Return. 

Theme 2: Understand non-compliant taxpayer behavior and develop approaches to 

deter and change it - These investments will leverage data and behavioral analytics to target 

the most effective non-compliance work in collection and enforcement while delivering a 

compressed, efficient enforcement cycle with early, upfront error detection and resolution. 

These investments will fund the use of network analysis to investigate abusive tax schemes, 

the enforcement and deterrence of non-compliance abroad through the implementation of the 

FATCA, and appropriate, balanced coverage by improving audit and collection coverage 

rates. 

With the next generation of analytics, the IRS will improve tax administration and the 

taxpayer experience by evaluating the effectiveness of data-driven approaches for identifying 

and resolving taxpayer issues accurately and early, thereby reducing taxpayer burden. The 

IRS will take data analytics into the tax-exempt sector by digitizing the Form 990 (Return of 

Organization Exempt from Income Tax), which will yield faster processing of returns and 

more data-driven decisions on enforcement treatments. 

Theme 3: Leverage and collaborate with external stakeholders - While the IRS is not 

requesting new investments in this theme, the IRS is continuing existing efforts to improve 

partnerships with all its stakeholders. 

Theme 4: Cultivate a well-equipped, diverse, skilled workforce - Although no new 

investments are being requested for this theme, the IRS will continue to advance it using 

available resources. Deliberate workforce planning and knowledge management are 

cornerstones to the IRS’s ability to execute a new era of tax administration. Knowledge 

management and a diverse, skilled workforce will be achieved through active corporate 

workforce planning that identifies and closes skill gaps across the organization. 

Theme 5: Select highest value work using data analytics and a robust feedback loop - 

The IRS is not requesting new investments for this theme. With the next generation of 

analytics, the IRS will continuously improve tax administration and the taxpayer experience 

by evaluating the effectiveness of data-driven approaches for identifying and resolving 

taxpayer issues accurately and early. This theme focuses on harnessing data to inform work 

streams and enhance case selection capabilities and also includes an internal and external 

feedback loop to avert or address compliance issues quickly. 
IRS - 10 

Theme 6: Drive more agility, efficiency, and effectiveness in IRS Operations - Ensures 

compliance with Federal Records Act of 1950 as amended (44 U.S.C. Chapter 31), which 

requires all systems to implement an electronic retention policy and the Managing 

Government Records Directive (M-12-18) which instructs agencies to manage electronic 

records more efficiently and effectively. Investments in this area enable faster responses to 

customers. Investments include: 

• A robust electronic records management program; 

• New software for processing information returns from third parties; 

• Improvements to the IRS revenue financial accounting systems; and 

• Funds to keep IT infrastructure current for existing and newly deployed systems. 

These investments will increase organizational performance by reducing and eliminating 

manual processes and improving the reliability of enterprise infrastructure to support new and 

changing requirements from legislation, presidential orders, Government Accountability 

Office (GAO) recommendations, and demands from taxpayers; and helping to secure the 

IRS’s people and facilities. 

Focus Area: Strengthen cybersecurity and eliminate identity theft –Provides investments 

that combat Stolen Identity Refund Fraud and includes detection and prevention, assistance to 

victims, and law enforcement. In addition, the IRS plans to institute multiple layers of 

electronic authentication, including multi-factor security for access to taxpayer-facing systems 

and authentication at the time of filing. The IRS will enhance the security of its networks via 

the use of a cyber-threat forensics, implementation of a comprehensive patch management 

system, and the adoption of government-wide information security continuous monitoring 

tools as parts of a layered defense. 
IRS - 11 

Leveraging Funds to Advance Progress in Strategic Areas 

The Consolidated Appropriations Act of 2016 provided much needed funding to improve 

performance in customer (telephone) Level of Service, to enhance cybersecurity, and to 

prevent identity theft and refund fraud. The IRS plans to build upon these funding levels to

move forward with implementing a Future State Vision that delivers a better overall 

experience for the taxpayer. 

Despite this increase for these specific areas, other areas of the IRS remain under-resourced 

compared to FY 2010 levels and continue to experience performance issues. For example, 

reductions in the enforcement budget resulted in a reduced examination program. The 

number of revenue agents fell seven percent, from 11,422 in FY 2014 to 10,657 in FY 2015, 

the lowest level in more than a decade. The correspondence audit program declined by 

275 FTE in FY 2015, which limited the impact on voluntary compliance. The related loss in 

closures is approximately 109,129 cases and potentially $539 million in revenue. In addition, 

examinations of large corporate taxpayers (with assets of more than $10 million) declined to 

only 7,448 in FY 2015, also the fewest in over a decade.

Despite the three percent decline in its FY 2015 budget from the year before, the IRS made 

investment decisions that achieved positive results during the year in key strategic areas. 

Theme 1 - Facilitate voluntary compliance by empowering taxpayers with secure 

innovative tools and support - The IRS is building an environment of multiple digital 

service options. In FY 2015, the IRS launched or enhanced an array of services: 

• IRS2Go Mobile, Version 5 which was launched at the start of the 2015 filing season, 

enables taxpayers to make electronic payments, find the nearest location offering free 

volunteer tax help, and uses responsive design to update the app for screen sizes of 

multiple devices. In FY 2015, IRS2GO was downloaded more than 2.3 million times 

and had over 3.8 million active users. 

• Third Party Data Services Pilot enables the IRS to share refund status data with tax 

preparation firms, tax preparation software, and state and federal agencies that require 

individual taxpayer information. All information sharing was conducted with prior 

taxpayer consent.

• Online Payment Agreement (OPA) updates improved the individual taxpayer’s user 

experience for a number of functions including log-in and authentication, expansion of 

the number of taxpayers eligible to set up installment agreements, and added analytics 

to better understand taxpayer experience within the application. Since its launch, 

more than 200,000 OPA agreements were completed representing more than $650 

million in balances owed. 

• IRS Direct Pay, Release 3 adds responsive design and enhancements for guest users 

(i.e., those taxpayers who do not create a username and password); email 

confirmations of payments, cancellations, or reversals, and a Spanish language 

version. Since the November 2013 launch, the IRS has collected $17 billion through 

this application, of which $14.9 billion was collected in FY 2015. 
IRS - 12 

• Directory of Federal Preparers with Credentials and Select Qualifications

provides a lookup tool to find return preparers by location. Since its launch in January 

2015, customers performed more than 200,000 searches. 

• Payment Mix Comparison Tool enables preparers, on behalf of the business 

taxpayer community, to compare the portion of gross receipts from credit card receipts 

to the business plans of similar businesses from prior years. This tool is intended to 

encourage accurate reporting by payment recipients and help close the tax gap.

• Optimized Virtual Service Technology Delivery (VSD) allows taxpayers to have 

face-to-face interactions with an IRS assistor who is working in a remote location by 

using video monitors stationed at non-IRS owned taxpayer support sites. So far, IRS 

has deployed this technology at five sites. 

In addition, the IRS continues to implement the ACA. In FY 2015, the IRS successfully 

implemented two major provisions: the refundable premium tax credit and individual shared 

responsibility for both individual taxpayer returns and information returns from employers 

and insurers. 

Theme 2 - Understand non-compliant taxpayer behavior and develop approaches to 

deter and change it - The IRS collected $54.2 billion during FY 2015 through its 

enforcement programs. 

In addition, the IRS:

• Completed 4,486 criminal investigations and obtained 2,879 convictions; 

• Identified 1,281 questionable refund schemes reflecting $1.2 billion in potentially 

fraudulent refunds claims and also imposed limits on the number of refunds that can 

be deposited in a single bank account. As a result, 205,019 refunds totaling 

$863 million were converted to paper. and

• Received 28,635 taxpayer applications from the Offshore Voluntary Compliance 

Disclosure Program, which permits taxpayers to voluntarily disclose that they failed to 

report income in offshore bank accounts. 

In moving towards three aspects of Theme 2 - integrated case management, early anomaly 

detection, and a compressed enforcement cycle - the IRS will establish a program 

management office to roll out the Enterprise Case Management system, which will 

incorporate business rules and filters for better case selection for exam, collection, and issue 

identification. Additionally, the IRS has re-engineered the examination process for corporate 

48.9

57.6 55.2 50.2 53.3 57.1 54.2

0

20

40

60

FY09 FY10 FY11 FY12 FY13 FY14 FY15

IRS Enforcement Revenue ($ Billions)
IRS - 13 

taxpayers. The IRS uses data-driven analysis to develop early warnings of emerging areas of 

tax non-compliance. 

A centerpiece of the IRS’s enforcement strategy is the continued implementation of the 

FATCA. The IRS added additional capabilities to the FATCA registration website and 

released second-generation software for registration. It released the International Data 

Exchange Service – which consists of testing with foreign partners to enable them to conduct 

reporting. The IRS also initiated and deployed the International Compliance Management 

Model (ICMM), a new system that receives, processes, manages, and stores FATCA data and 

modernizes communications with foreign governments that have Intergovernmental 

Agreements (IGAs) and Competent Authority Arrangements (CAAs). ICMM processes 

FATCA reports filed electronically or on paper. 

The IRS also implemented an initiative to improve the Fraud Referral Program and 

examinations of 501(c) tax exempt entities, allowing the IRS to identify 19 entities involved 

in illicit terrorist financing schemes.

Theme 3: Leverage and collaborate with external stakeholders - This past year, the IRS 

launched a major campaign in partnership with tax professional organizations focused on 

helping taxpayers choose tax return preparers wisely, while understanding the different 

categories of tax preparers. The IRS also used social media tools, such as YouTube, Twitter, 

and podcasts to share the latest information on tax changes, initiatives, products, and services. 

The IRS partnered with Volunteer Income Tax Assistance/Tax Counseling for the Elderly 

partners, to provide more than 3.7 million taxpayers with free tax preparation. The IRS 

introduced and launched a new Taxpayer Bill of Rights (TBOR) to enhance the taxpayers’ 

understanding of their rights, incorporating the existing rights in the tax code, and grouping

them into ten easily understandable categories. In addition, the IRS worked with key partners 

and stakeholders to establish a Security Summit Group this past March, composed of two 

dozen public and private sector leaders. It included the chief executive officers of Intuit, 

H&R Block and other tax and financial product companies. On June 11, 2015, Commissioner 

Koskinen joined the tax industry and state tax authorities to announce several Security 

Summit Group efforts to combat stolen identity refund fraud.

Focus Area: Strengthening cybersecurity and preventing identify theft/refund fraud has 

been an IRS priority for many years. While staying ahead of adaptive adversaries is a 

constant challenge and requires extreme vigilance, the IRS continues to build robust programs 

in these areas and has had success despite recent issues across the government. In FY 2015, 

the IRS identified and shut down 1,474 false IRS websites and deployed the second release of 

e-Authentication software, which handled a 275 percent increase in traffic from the same 

period last year, with 7.3 million unique users (registered and guest) and, 34.4 million 

proofing transactions requested. 

Get Transcript provides a current digital display of an individual's tax record across five 

transcript types using enterprise-wide authentication. Since the January 2014 launch, over 

45 million transcripts have been generated through this application. In FY 2015, the IRS 

experienced unauthorized accesses on the Get Transcript application when 390,000 attempts 

to access taxpayer data were made, of which nearly three out of five were successful. The 
IRS - 14 

IRS sent letters to the affected taxpayers informing them of the issue, and offered victims free 

credit monitoring services. Within five days of recognizing the issue, the IRS also notified 

Congress. As a result of this response, the IRS was able to minimize unauthorized access. 

During the 2015 filing season, more than 23 million taxpayers successfully accessed their 

transcripts online and received immediate service. The Get Transcript application was shut 

down to prevent additional breaches. The IRS has partnered with the U.S. Digital Service to 

develop new authorization methodologies using cutting-edge security platforms. The IRS 

currently plans to put Get Transcript back online during calendar year 2016. 

In addition to the aforementioned cybersecurity efforts, in 2014 the IRS deployed a new 

fraud/anomaly detection system, the Return Review Program (RRP), and successfully 

executed an ID theft/fraudulent return pilot project. By processing all refund returns through 

multiple analytic models and business rules, the RRP system scores and selects suspicious 

returns that have a high probability of identity-theft related fraud. RRP has successfully 

loaded and scored over 98 million electronic refund returns. Of those returns, nearly 800,000 

were identified as potential identity theft fraud, representing potentially more than $4.7 billion 

in government revenues protected. RRP was able to reduce the amount of manual analysis 

work by 20 percent, identifying suspicious cases earlier in the process. In its inaugural filing 

season, RRP operated without interruption 

In addition to the identity theft prevention efforts focused on screening returns as potentially 

fraudulent, the IRS was also successful in stopping actual fraudulent refunds. The IRS

stopped more than 1.7 million fraudulent returns with associated refunds of more than 

$14 billion. The IRS prisoner program continues to be successful in preventing fraudulent 

refunds; the IRS stopped more than 30,000 fraudulent prisoner returns with associated refunds 

of more than $1.2 billion.

The Electronic Fraud Detection System (EFDS) which is the IRS’s current fraud protection 

system, has successfully loaded and analyzed 125 million individual income tax returns via 

Modernized e-File and 12.8 million paper returns in FY 2015. Of that number, nearly 1.1 

million returns were identified as fraudulent, representing $6.8 billion in revenue protection. 

The IRS also continues to refine and develop new identity theft filters based on analytical 

models and data validation. As a result, potentially fraudulent returns are stopped much 

earlier in processing allowing the IRS to quickly resolve cases for identity theft victims. In 

FY 2015, the IRS selected 1,987,975 returns for further analysis via its enhanced analytics 

compared to 1,570,008 in FY 2014 (a 27 percent increase).
IRS - 15 

Tax Statistics at a Glance 

Tax Administration is at Risk

The IRS made substantial progress related to its strategic themes and will make additional 

progress as a result of the resources provided in FY 2016. Nonetheless, the IRS’s progress 

with regard to preparing for the future state of tax administration proves challenging without 

additional resources to modernize its systems and deliver the type of customer service 

expected of any financial services provider. The world is changing, taxpayer expectations are 

changing, and given the continuing budget challenges, the IRS needs to look at the future in a 

more comprehensive way, and consider how it can take advantage of the latest technology to 

move the entire taxpayer experience to a new level. The IRS will do this in a way that meets 

the needs of taxpayers, helps IRS employees in their jobs, and is cost-effective for the 

government. A key part of this effort is for taxpayers to have a more complete online 

experience for all of their transactions with the IRS. The organization’s ability to roll out 

capabilities such as enhanced digital services will prove very challenging without these 

additional resources. 

The Road Ahead

The investments in this Budget request are needed for the IRS to succeed in the future with 

regard to tax administration, and the IRS will continue to target its investments towards the 

IRS’s strategic themes and priorities. The IRS is also committed to a rigorous and continuous 

planning and investment decision process. To that end, the IRS will enhance its performance 

management process to monitor its progress towards achieving a new, improved taxpayer 

experience and streamlined compliance that aims to detecting errors and resolving issues as 

early as possible with the least amount of taxpayer burden. Efforts started in FY 2015 to 

identify a more definitive suite of enterprise goals and supporting intermediate performance 

measures to track progress toward the IRS future state vision and strategic themes have 

continued into FY 2016. These enterprise goals and intermediate measures will be finalized 

in FY 2016 and then woven into an effective and transparent strategic performance 

management system that will help guide senior level decision making at the IRS. 
IRS - 16 

Program Integrity Cap Adjustment 

In addition to the base appropriations request of $11.8 billion, the FY 2017 Budget proposes a 

$515 million cap adjustment to fund new and continuing investments in expanding and 

improving the effectiveness and efficiency of the IRS’s and the Alcohol and Tobacco Tax and 

Trade Bureau’s (TTB) overall tax enforcement program. The proposed FY 2017 enforcement 

investments will yield additional revenue as described within this document. The Budget also 

proposes additional cap adjustments for new investments each year through FY 2021 that are 

sustained with additional adjustments through 2026 to account for economic factors, such as 

inflation. The investments will generate approximately $64 billion in additional revenue over 

10 years and will cost about $18 billion for an estimated net savings of $46 billion. Notably, 

the return on investment (ROI) is likely understated because it only includes amounts directly 

recovered; it does not reflect the effect that enhanced enforcement has on deterring 

non-compliance. This deterrent effect helps to ensure the continued payment of over $3 

trillion in taxes paid each year without direct enforcement measures. 

Return on Investment (ROI) for FY 2017 Enforcement Investments 

Enforcement efforts increase revenue by encouraging voluntary compliance for those 

taxpayers who would otherwise seek to avoid meeting their tax obligations under the law. 

The IRS calculates a return on investment for both revenue protecting investments and 

revenue generating investments. Protected revenue is revenue the IRS protects from being 

refunded erroneously. It is associated with activities that occur prior to the issuance of a 

taxpayer’s refund, including the identification of fraud and questionable returns. Revenue 

generated is from compliance efforts that yield direct, measurable results through enforcement 

activities such as examination and collection returns.
IRS - 17 

FY 2017 Revenue-Producing Investments

The FY 2017 budget includes $388.1 million in investments for traditional enforcement and 

strategic revenue programs, which are projected to generate $2.6 billion in revenue once the 

investments reaches full potential in FY 2019, the expected total ROI is $5.6 to $1. 

 The FY 2017 budget also includes an additional $180.5 million to support strategic 

revenue-producing investments. These investments do not have an immediately measureable 

ROI, but have clear long-term revenue effects. 

FY 2017 Revenue-Protecting Investments

In addition to the traditional revenue-producing investments, IRS activities to prevent the 

issuance of fraudulent returns related to identify theft will allow the IRS to identify and 

resolve issues before issuing a taxpayer’s refund. While this number is not currently included 

in the IRS’s traditional ROI calculations, investment in these activities is projected to protect 

$1.5 billion in revenue at a lower cost than the downstream enforcement actions and achieve 

an FY 2019 ROI of $12.3 to $1. 

Return on Investment (ROI) for IRS FY 2017 Enforcement Initiatives 

Dollars in Millions Cost Revenue ROI Cost Revenue ROI

FY 2017 Revenue Producing Enforcement Initiatives $388.1 $397.5 1.0 $475.1 $2,643.1 5.6

Cap Adjustment Enforcement Initiatives $388.1 $397.5 1.0 $475.1 $2,643.1 5.6

Immediate and Directly Measurable Revenue-Producing Initiatives $207.6 $397.5 1.9 $282.6 $2,643.1 9.4

Increase Collection Coverage 90.5 160.5 1.8 127.3 1,216.4 9.6

Increase Audit Coverage 117.1 237.0 2.0 155.3 1,426.7 9.2

Strategic Revenue-Producing Initiatives (which do not have immediately measurable 

ROI, but clear long-term revenue effects) $180.5 $0.0 0.0 $192.5 $0.0 0.0

Digitizing Form 990 2.4 0.0 0.0 3.1 0.0 0.0

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance 126.7 0.0 0.0 141.6 0.0 0.0

Pursue Employment Tax and Abusive Tax Schemes 15.8 0.0 0.0 10.1 0.0 0.0

Increase Investigations of Transnational Organized Crime (TOC) 35.6 0.0 0.0 37.7 0.0 0.0

First Year (FY 2017) Full Performance (FY 2019)

FY 2017 Revenue-Protecting Enforcement Initiatives

Dollars in Millions Cost Revenue ROI Cost Revenue ROI

Revenue Protecting Initiatives (which protect taxpayer information, prevents identity theft, 

and results in long-term revenue protection) $101.3 $676.0 6.7 $124.3 $1,526.0 12.3

Before Cap Adjustment Revenue Protecting Initiative $90.0 $612.0 6.8 $107.6 $1,146.0 10.7

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 90.0 612.0 6.8 107.6 1,146.0 10.7

Cap Adjustment Revenue Protecting Initiative $11.3 $64.0 5.7 $16.7 $380.0 22.8

Increase Audit Coverage (revenue-protecting portion) 11.3 64.0 5.7 16.7 380.0 22.8

First Year (FY 2017) Full Performance (FY 2019)
IRS - 18 

Section 2 – Budget Adjustments and Appropriations Language 

The IRS Budget Request for FY 2017 is $11,765,347,000 in direct appropriations and 

82,679 FTE. The request represents an increase of $530,347,000, or 4.72 percent, and 

1,107 FTE more than the FY 2016 Enacted level of $11,235,000 and 81,572 FTE. The total 

Budget Request including the program integrity cap adjustment is $12,280,095 and 84,803 

FTE.
IRS - 19 

2.1 – Budget Adjustments Table

Summary of Proposed FY 2017 Request (Dollars in Thousands)

Internal Revenue Service FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 78,919 $10,945,000

FY 2016 Administrative Provision 113 2,653 $290,000

Improve Taxpayer Service 2,483 178,422

Cyber Security 170 95,442

Strengthening the Prevention of Identity Theft 16,136

FY 2016 Enacted 81,572 $11,235,000

Changes to Base:

Maintaining Current Levels (MCLs): $170,348

Pay Annualization 26,975

Pay Raise 99,926

Non-Pay 43,447

Efficiencies/Savings: (72) ($3,766) 

Increase e-File Savings (72) (3,766) 

Subtotal FY 2017 Changes to Base (72) $166,582

FY 2017 Current Services (Base) 81,500 $11,401,582

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and 

Support

Implement Changes to Deliver Tax Credits and Other Requirements for the Affordable Care Act 153,240

Leverage New Technologies to Advance the IRS Mission 29 53,488

Improve Taxpayer Service 613 48,455

Subtotal 642 $255,183

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Enterprise Electronic Records Management Solution 46 18,543

Subtotal 46 $18,543

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 491 90,039

Subtotal 491 $90,039

Subtotal FY 2017 Budget Request Program Increases 1,179 $363,765

Total FY 2017 Total Budget Request 82,679 $11,765,347

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 1,107 $530,347

Percent Change FY 2017 Budget Request over FY 2016 Enacted 1.36% 4.72%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and 

Support

Enterprise Case Management 22 7,967

Subtotal 22 $7,967

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to Deter and Change It

Increase Collection Coverage 699 90,467

Increase Audit Coverage 856 128,435

Digitizing Form 990 7 2,378

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance 273 126,739

Pursue Employment Tax and Abusive Tax Schemes 37 15,786

Increase Investigations of Transnational Organized Crime (TOC) 130 35,564

Subtotal 2,002 $399,369

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects 73 92,174

Maintain Integrity of Revenue Financial Systems 27 10,238

Subtotal 100 $102,412

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities 5,000

Subtotal $5,000

Subtotal FY 2017 Cap Adjustment Program Increases 2,124 $514,748

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 3,303 $878,513

Total FY 2017 Total Budget Request Including Cap Adjustment 84,803 $12,280,095

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 3,231 $1,045,095

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 3.96% 9.30%
IRS - 20 

2A – Budget Increases and Decreases Description 

FY 2017 Investment Labor Costing Methodology 

The IRS uses a variety of methods to calculate the cost of its investments. Investments that 

require labor funding are calculated by converting the workload to the number and type of 

staff (e.g., Revenue Agents, Revenue Officers, or Special Agents) needed to deliver targeted 

performance goals. Once the number of full-time equivalents (FTE) and type of staff are 

determined, the cost of the FTE is estimated using a Unit Cost Rate (UCR) calculator, a tool 

for projecting FTE salary and non-salary support costs and/or savings. The UCR calculator 

fully costs the salary, benefits, and support costs needed for each FTE, based on known 

averages. 

The FY 2017 investment FTE were estimated assuming an April 1 hire date except for 

front-line positions in Submission Processing and Account Management and Assistance – 

Electronic/Correspondence Assistance, which assumed an October 1 hire date. The primary 

function of the Submission Processing and Account Management and Assistance taxpayer 

service programs is to assist taxpayers during the filing season. They are not dependent on 

the typical hiring and training process affecting other IRS programs because there is a large 

existing seasonal workforce that is available to work additional hours as resources become 

available. To fully fund the FTE requested in this Budget request using an April 1 hire date, 

the IRS will require an additional $256 million and 2,601 FTE for annualization in FY 2018. 

FY 2016 Administrative Provision 113 (Public Law 114-113) 

+$290,000,000 / +2,653 FTE

Section 113 of the Department of the Treasury Appropriations Act of 2016 provided 

$290,000,000 to: measurably improve the customer service representative level of service 

(LOS) rate (the percentage of callers to the IRS who receive service from an assistor or 

automated system), improve the identification and prevention of refund fraud and identity 

theft, and enhance cybersecurity to safeguard taxpayer data. 

These resources, supplemented with user fees, will allow the IRS to achieve a 65 percent LOS 

during the filing season and 47 percent for FY 2016; this is a substantial improvement over 

FY 2015 levels. These resources will also increase staff and support technology innovation 

efforts in relation to cybersecurity; and improve methods of detecting and preventing identity 

theft/refund fraud patterns and schemes. 

Maintaining Current Levels (MCLs)

+$170,348,000 / 0 FTE 

Pay Annualization +$26,975,000 / 0 FTE

Funds are requested for annualization of the January 2016 pay raise. 

Pay Raise +$99,926,000 / 0 FTE

Funds are requested for the proposed January 2017 pay raise. 
IRS - 21 

Non-Pay +$43,447,000 / 0 FTE

Funds are requested for inflation adjustments in non-labor costs such as travel, contracts, rent, 

supplies, and equipment. 

Efficiencies and Savings

-$3,766,000 / -72 FTE

Increase e-File Savings -$3,766,000 / -72 FTE

These savings are a result of reduced paper returns. The IRS projects a total of 

1,026,100 fewer returns filed on paper in FY 2017 (525,100 individual and 501,000 business 

returns). 

Program Increases

FY 2017 Budget Request +$363,765,000 +1,179 FTE

FY 2017 Program Integrity Cap Adjustment +$514,748,000 +2,124 FTE

FY 2017 Budget Request Including Program 

Integrity Cap Adjustment

+$878,513,000 +3,303 FTE

This section of the budget request is organized into themes. Each theme section provides an 

overview, and a description of challenges, and resources needed to support these themes. The 

IRS is moving toward a vision through a dynamic shift that is already being executed, and this 

budget request help steadily move the IRS toward accomplishing that vision. 

The total FY 2017 budget request makes new investments in the following two themes and a 

focus area: 

• Theme 1: Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support +$255,183,000 / +642 FTE

• Theme 6: Drive More Agility and Efficiency in IRS Operations +$18,543,000 / 

+46 FTE 

• Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

+$90,039,000 / +491 FTE 

The FY 2017 Program Integrity Cap Adjustment of +$514,748,000 and +2,124 FTE consists 

of the following three themes and the TTB transfer:

• Theme 1: Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support +$7,967,000 / +22 FTE

• Theme 2: Understand Non-Compliant Taxpayer Behavior, and Develop Approaches 

to Deter and Change It +$399,369,000 / +2,002 FTE

• Theme 6: Drive More Agility and Efficiency in IRS Operations +$102,412,000 / 

+100 FTE 

• Alcohol and Tobacco Tax and Trade Bureau Transfer +$5,000,000 / 0 FTE
IRS - 22 

Theme 1: Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support +$263,150,000 / +664 FTE 

Voluntary compliance is the cornerstone of the nation’s tax system, and is at its highest when 

the IRS is able to provide effective and timely service. Efforts associated with this theme will 

drive the IRS towards a new era of tax administration through taxpayer-centric service and 

compliance with a variety of self-service options, early error detection and resolution, and 

with minimal taxpayer burden. 

In 2015, the IRS processed an estimated 27 million more returns than it did 17 years ago. 

Budget constraints affected customer service levels. Telephone Level of Service (LOS) 

dropped below 40 percent during the 2015 filing season, meaning more than 6 out of every 10 

call attempts did not reach a live assistor. The number of taxpayers disconnected by the IRS 

phone system when it became overloaded with calls was over 17.682 million in FY 2015, 

compared with 1.401 million in FY 2014, and wait times in many cases were greater than 30 

minutes. 

The IRS’s future state will enable taxpayers to interact with the IRS in ways similar to today’s 

financial services companies, using capabilities built and proven successful in the private 

sector. The IRS is committed to improving taxpayer service and increasing the service 

options available through the IRS web site and mobile application.

This investment has three major components: 

• Implement Legislative Mandates – Make major modifications to existing IRS systems 

and processes to administer new requirements from recent legislation. 

Initiative

(dollars in thousands)

$000 FTE $000 FTE $000 FTE $000 FTE

Budget Request Program Increases $153,240 $48,455 613.00 $53,488 29.00 $255,183 642.00

Implement Changes to Deliver Tax Credits and Other 

Requirements for the ACA $153,240 $153,240

Improve Taxpayer Service $48,455 613.00 $48,455 613.00

Increase level of service (LOS) 41,420 590.00 41,420 590.00

Online Accounts 5,130 9.00 5,130 9.00

Other Direct Costs 1,905 14.00 1,905 14.00

Leverage New Technologies to Advance the IRS 

Mission

$53,488 29.00 $53,488 29.00

Expand business Systems Modernization 11,207 5.50 11,207 5.50

 CADE-2 1,674 3.50 1,674 3.50

 Web Applications 4,020 4,020

 Modernized e-File 4,549 2.00 4,549 2.00

Architecture, Integration and Management 61 61

Management Reserve 903 903

Event Driven Architecture 30,555 14.50 30,555 14.50

Enterprise Case Management (PMO) 11,726 9.00 11,726 9.00

Cap Adjustment Program Increases $7,967 22.00 $7,967 22.00

Enterprise Case Management (PMO) 7,967 22.00 7,967 22.00

FY 2017 Total Program Increases $153,240 $56,422 635.00 $53,488 29.00 $263,150 664.00

Facilitate Voluntary 

Compliance through 

Taxpayer Service 

Develop Innovative 

Technology and Tools 

Total 

Theme 1 Budget 

Request

Summary of Theme 1 Budget Request (by Component)

Implement Legislative 

Mandates 
IRS - 23 

• Facilitate Voluntary Compliance through Taxpayer Service – Increase LOS to 70 

percent for the full FY 2017 (FY 2016 is expected to be 47 percent), handle additional 

workload from the expansion of enforcement programs, and develop innovative 

technology to support taxpayer services. 

• Develop of Innovative Technology and Tools – Provide dynamic return processing, 

develop enterprise case management, and develop critical IT systems for taxpayer 

service programs. Increasing web services will help meet taxpayer demand for webbased self-service tools while reducing the number of phone and correspondencebased communication. 

Implement Legislative Mandates Component (+$153,240,000 / 0 FTE) 

Implement Changes to Deliver Tax Credits and Other Requirements for the ACA 

(+153,240,000 / 0 FTE) 

This investment will allow the IRS to continue to implement the new tax law provisions 

contained in the Affordable Care Act. While the Department of Health and Human Services 

is responsible for health care policy and insurance provisions in the legislation, the IRS 

administers more than 45 specific tax provisions and numerous cross-agency sections related 

to tax administration. These requirements touch all tax administration processes, from 

submission processing to enforcement with both individual and business tax returns. 

This investment funds advanced technology infrastructure and applications support and 

allows necessary, major modifications to existing IRS tax administration systems. It provides 

funds to support established ACA business capabilities by: 

• Validating tax credits claimed on individual tax returns; 

• Assessing and collecting penalties, taxes, and fees; 

• Providing federal tax information to non-IRS entities in the insurance marketplaces; 

and 

• Reconciling reported income, tax credits, and individual shared responsibility 

payments with information returns. 

It will also allow the IRS to continue to develop and implement new capabilities in FY 2017, 

including: 

• Assessing and supporting management of the employer shared responsibility payment; 

• Expanding support for post-filing compliance activities for the employer shared 

responsibility payment;

• Mediating additional web services between systems;

• Expanding data analytics capabilities; and

• Initiating development activities related to the Excise Tax on High-Cost Health Plans.
IRS - 24 

Facilitate Voluntary Compliance through Taxpayer Service (+$56,422,000 / +635 FTE)

Improve Taxpayer Service (+$48,455,000 / +613 FTE) 

Delivering high quality and timely service to reduce taxpayer burden is a core part of the IRS

mission to facilitate voluntary compliance. Taxpayers increasingly expect to complete more 

of their day-to-day tasks and responsibilities online. This component provides funding to 

reverse the recent decline in taxpayer services and to implement technology to help transform 

the taxpayer experience through improved LOS, innovative technological support, and 

taxpayer advocacy support. This investment of $41.4 million and 590 FTE, along with $100 

million in user fee resources, will achieve a 70 percent LOS in FY 2017, up from the FY 2016 

level of 47 percent. If the full amounts requested in President’s Budget are not enacted, this 

level of user fee resources may not be available, and the investment of $41.4 million will 

achieve a 53 percent LOS.

The investment of $5.1 million and 9 FTE for online accounts will modernize and improve 

self-service options for individual taxpayers, and ultimately business and international 

taxpayers, by creating an integrated and easy-to-use source for timely, accurate, and 

consolidated tax filing and tax account information. It will provide the ability to correct 

returns online, which will reduce the time and money spent on processing amended returns; it

is estimated to save the IRS $5.3 million. 

This component also includes funding in the amount of $1.9 million and 14 FTE to support 

both IRS’s Taxpayer Service and Enforcement programs by handling the downstream impact 

in the Taxpayer Advocate Service (TAS) from increased collection and audit coverage. The 

additional TAS specialists will ensure that the IRS does not create unnecessary burdens or 

compromise taxpayers’ rights. 

Enterprise Case Management (ECM) Project Management Office (PMO) - Cap 

Adjustment (+$7,967,000 / +22 FTE)

The PMO will serve as the integrator for ECM and will coordinate with IT and all IRS 

business units to provide strategic guidance in alignment with the IRS Strategic goals and 

business plan and drive collaboration and alignment with all aspects of case management. 

Development of Innovative Technology and Tools (+$53,488,000 / +29 FTE)

Leverage New Technologies to Advance the IRS Mission (+53,488,000 / +29 FTE) 

The IRS must become more accessible to today’s taxpayers by providing a consistent 

multichannel experience that includes significantly expanded digital service delivery. This 

component supports voluntary compliance through technology projects that will enable

simpler and more consistent taxpayer interactions through the following three investments: 
IRS - 25 

• Expand Business Systems Modernization 

This investment of $11.2 million and 5.5 FTE will allow the IRS to continue 

leveraging new technologies to develop critical information technology systems 

needed to support the IRS’s taxpayer service and enforcement programs. It will 

provide funding for IT staff, hardware and software, contractual services, and 

infrastructure support for the following: 

o CADE 2 (Taxpayer Account Database) (+$1,674,000 / +3.5 FTE)

A single, data-centric solution that provides daily processing of taxpayer accounts. 

It will enable analytical reporting for more meaningful business intelligence and 

expanded opportunities to increase compliance. 

o Web Applications (+$4,020,000 / 0 FTE)

Simplify the taxpayer’s online experience, provide secure digital communications, 

and add more interactive capabilities to existing web-based self-service products. 

This will allow taxpayers to resolve more issues online, requiring fewer direct 

interactions with the IRS over the telephone and in person. 

o Modernized e-File (MeF) (+$4,549,000 / +2 FTE)

A standard filing structure for all IRS return types, a robust platform that meets 

performance and capacity needs, enhanced and up-to-date technologies, and 

customer service benefits. Funds will be used for the development and testing of 

Release 11, Form 1040 – U.S. Nonresident Alien Income Tax Return. This change 

will allow taxpayers to file Form 1040NR returns related to their income from 

trade and/or business transactions conducted in the United States. 

o Architecture, Integration and Management (AI&M) (+$61,000 / 0 FTE)

Essential IRS systems strategy, architecture, and engineering capabilities for the 

major modernization projects across all technology platforms.

o Management Reserve (+$903,000 / 0 FTE) 

Funds not otherwise designated for specific projects to allow flexibility in 

responding to unexpected IT needs. 
IRS - 26 

• Event Driven Architecture (EDA)

This investment of $30.6 million and 14.5 FTE will cover software licenses, hardware, 

and contractor support to implement EDA. EDA will increase the average speed at 

which refunds are delivered to taxpayers who have submitted non-problematic returns 

by handling each return independently. Currently, tax returns are bundled and 

processed together in batches, according to the time at which they are submitted, 

which creates the potential for properly completed tax returns being held up by returns 

that have issues. EDA is a framework that manages each return independently and 

immediately upon arrival. Returns submitted with minor errors (such as simple 

arithmetic problems) will be addressed by EDA immediately at time of filing. The 

current process may take months to identify simple errors and notify the filer. 

EDA is also a prerequisite for the following improvements:

o A web-based individual tax return; 

o Taxpayer line-by-line self-correction of tax errors through an online tool; 

o Automated issue identification to notify a taxpayer instantly of an error prior to 

submitting a tax return; and 

• Enterprise Case Management (ECM) Technology Development 

This investment of $11.7 million and 9 FTE funds ECM technology development. 

IRS has multiple aging case management systems that have operated independently 

for over 30 years. The current segmented approach is inefficient and does not allow 

the IRS to adapt quickly to changing taxpayer behavior or address changes that arise, 

such as new legislation or trends in non-compliance. ECM will use a common 

platform to improve data accessibility across the service and produce efficiencies. 
IRS - 27 

Theme 2: Understand non-Compliant Taxpayer Behavior, and Develop Approaches to Deter 

and Change It +$399,369,000 / +2,002 FTE

This theme encompasses the IRS’s approach to enforcement activities. Compliance is one of 

the most challenging problems facing the IRS. While most taxpayers voluntarily comply with 

their tax obligations, some do not. The IRS roots out non-compliance to protect revenue and 

ensure accurate revenue collection by carrying out a rigorous enforcement program. Since 

FY 2010, however, the IRS has seen appropriated resources to support this program cut by 

more than 10.5 percent, resulting in falling audit coverage rates and a growing inventory of 

collection cases. As a result of insufficient funding in FY 2015, the individual examination

coverage rate fell to 0.8 percent, the lowest level in a decade. When the coverage rate is low, 

the secondary deterrent effect of enforcement activity also falls. This reduces revenue and 

threatens the integrity of the nation’s voluntary tax compliance system. The FY 2017 Budget 

request will increase the coverage rate from FY 2016 planned levels. However, if not fully 

funded, the falling coverage rate could reduce the deterrent effect of enforcement activities in 

the future. 

The FY 2017 Budget provides much needed staffing for the examination, collection, and 

investigation programs, and resources to develop innovative tools to improve both the 

efficiency and effectiveness of these programs. This investment has two major components: 

• Strengthen Core Enforcement Programs - Additional enforcement staff will complete 

more than 500,000 additional audits, close more than 350,000 collection cases, 

strengthen the IRS’s international enforcement efforts, and meet the increased 

workload related to tax schemes.

Initiative 

(dollars in thousands)

$000 FTE $000 FTE $000 FTE

Cap Adjustment Program Increases $284,628 1,867.50 $112,363 127.50 $396,991 1,995.00

Increase Collection Coverage $81,355 680.00 $9,112 19.00 $90,467 699.00

Field Collection Coverage 39,779 261.00 39,779 261.00

Automated Collection System 22,537 246.50 22,537 246.50

Correspondence Collection 12,804 132.50 12,804 132.50

Withholding Compliance System (WHCS) 9,112 19.00 9,112 19.00

Other Direct Costs 6,235 40.00 6,235 40.00

Increase Audit Coverage $102,323 817.50 $26,112 38.50 $128,435 856.00

Examination Coverage 56,318 403.00 56,318 403.00

Specialty Programs 3,446 21.00 3,446 21.00

Correspondence Examination 19,848 212.00 19,848 212.00

Automated Underreporter (AUR) 9,598 100.00 9,598 100.00

Operations Support 2,837 14.50 2,837 14.50

Other Direct Costs 10,276 67.00 10,276 67.00

QuickBooks 3,325 7.50 3,325 7.50

Innocent Spouse Application in Accounts Management 2,801 7.00 2,801 7.00

Corporate Data Initiative 846 2.00 846 2.00

2D Barcoding 8,395 3.00 8,395 3.00

Correspondence Imaging for Compliance 10,745 19.00 10,745 19.00

Digitizing Form 990 2,378 7.00 2,378 7.00

FATCA: Impl, Exp Filing Coverage, & Combat Criminal Non-compliance 56,758 203.00 69,981 70.00 126,739 273.00

Pursue Employment Tax and Abusive Tax Schemes $8,628 37.00 $7,158 $15,786 37.00

Increase Investigations of Transnational Organized Crime (TOC) $35,564 130.00 $35,564 130.00

FY 2017 Total Program Increases $284,628 1,867.50 $114,741 134.50 $399,369 2,002.00

Strengthen Core 

Enforcement Programs

Develop Innovative 

Technology

Total 

Theme 2 Budget Request

Summary of Theme 2 Budget Request (by Component)
IRS - 28 

• Develop Innovative Technology – Investments in IT will build out systems that 

support the implementation of FATCA, improve efficiency in operations by 

streamlining and redesigning current technology infrastructure, and develop systems 

to digitize data allowing employees to collaborate and resolve cases more effectively. 

Strengthen Core Enforcement Programs (+$284,628,000 / +1,867.5 FTE)

Investments to strengthen core enforcement programs will help the IRS improve the 

resolution of non-compliance with fairness and integrity. Budget cuts over the last several 

years have led to rising case inventories and call volumes, preventing the IRS from bringing

taxpayers who fail to pay their tax debt into compliance, and reducing individual audit 

coverage to 0.8 percent. This component will: 

• Increase collection and audit coverage; 

• Implement, expand filing coverage, and combat criminal non-compliance related to 

FATCA; 

• Digitize form 990; 

• Pursue employment tax and abusive tax schemes; and 

• Increase investigations of transnational organized crime. 

Increase Collection Coverage – Cap Adjustment (+$81,355,000 / +680 FTE) 

This will provide resources for the IRS to work the growing collection inventory and call 

volumes that resulted from reduced staffing levels in recent years and bring taxpayers who fail 

to pay their tax debt into compliance. This investment, including the $9.1 million for 

technology costs outlined in the Summary of Theme 2 Budget Request (by Component) table 

(above), is expected to produce additional annual enforcement revenue of $1,216.4 million, an 

ROI of $9.6 to $1, once the new hires reach full potential in FY 2019. It will:

• Provide nearly 400 additional field collection staff to expand programs that address 

non-filing and underpayment of taxes to handle more than 30,000 additional collection 

cases (currently there are more than one million cases in the queue with an aggregate 

assessed balance exceeding $52 billion); 

• Provide more than 350 additional Automated Collection System (ACS) staff to address 

an additional 302,000 ACS cases, including incoming calls generated by the issuance 

of levies, delinquent returns, and/or unpaid tax liabilities. ACS staffing has decreased 

by 25 percent since the end of FY 2011, resulting in a substantial increase in 

unhandled ACS cases; and

• Expand several Compliance Services Collection Operations (CSCO) programs that 

address nonfiling and underpayment of taxes through the notice process by more than 

320,000 notice dispositions. CSCO investments will increase balance due work and 

expand the following programs: Automated Substitute for Return, Offers in 

Compromise, Withholding Compliance, Campus Notice, and the Campus Decedent 

Taxpayer Unit
IRS - 29 

Increase Audit Coverage – Cap Adjustment (+$102,323,000 / +817.5 FTE) 

Budget constraints have reduced the examination staff available to conduct audits, causing the 

individual audit coverage rate to decline to 0.8 percent, which is increasing risk to the 

integrity of the nation’s voluntary tax compliance system. The IRS will invest a total of 

$128.4 million in audit coverage, which is projected to produce more than $1.4 billion in 

additional revenue annually, and protect $380.0 million of revenue annually, once the new 

hires reach full potential in FY 2019. ROI details for this investment can be found in Section 

1 of this document. The corresponding technology costs are outlined in the thematic cost 

table. These resources will help the IRS to: 

• Close over 32,000 additional individual field examination cases (the number of field 

audit examiners has declined by 27 percent since 2011); 

• Improve the audit coverage rate, and expand examination coverage on taxpayers 

claiming refundable credits (before the issuance of a refund), in order to prevent 

improper payments; 

• Expand the Automated Underreporter (AUR) program to process more than 

400,000 additional cases. Currently AUR processes approximately 3.6 million; and 

• Implement a quality review program for penalty and interest computations to provide 

accurate administration of the interest and charges associated with more than 170 civil 

penalties, with assessments exceeding $30 billion annually. 

Foreign Account Tax Compliance Act (FATCA) Implement, Expand Filing Coverage, and 

Combat Criminal Non-compliance – Cap Adjustment (+$56,758,000 / +203 FTE) 

The requested resources will expand filing coverage and combat criminal non-compliance 

with FATCA. This investment provides the staffing required to: 

• Identify and address high priority international issues with implementation, including 

improving systems to allow financial institutions and other entities to comply with 

their requirements under FATCA; 

• Develop additional guidance, and conduct outreach activities, training, and 

monitoring; 

• Create and maintain the programs and systems required to improve compliance, 

including a means to identify and address non-compliance of taxpayers, financial 

institutions, and other entities; and

• Develop enforcement and fraud prevention programs through data analysis reducing 

the likelihood of improper payments for erroneous refunds related to withholding 

under FATCA and Chapter 3. 
IRS - 30 

Pursue Employment Tax and Abusive Tax Schemes – Cap Adjustment (+$8,628,000 / 

+37 FTE)

Today’s sophisticated schemes to defraud the government require financial investigators to 

wade through financial records. In order to ensure that employment tax and abusive tax 

schemes do not become a major source of criminal activity and lost revenue, resources must 

be dedicated to reinforcing the IRS’s criminal investigative efforts. This investment will 

allow the IRS to close an additional 100 tax evasion and abusive tax scheme cases annually 

once new hires reach their full potential in FY 2019. Currently the IRS closes about 200 such 

cases per year. 

Increase Investigations of Transnational Organized Crime (TOC) – Cap Adjustment

(+$35,564,000 / +130 FTE) 

The threat of transnational organized crime (TOC) is becoming more severe as criminal 

networks use increasingly sophisticated tactics that exploit the borderless, interconnected 

nature of the global economy. IRS staff work with the Office of National Drug Control 

Policy (ONDCP) as well as several multi-agency task forces to support investigations of 

illegal drug trafficking and money laundering perpetrated by organizations involved in TOC. 

This investment is projected to allow the IRS to complete an additional 360 investigations 

annually once new hires reach full potential in FY 2019. 

Develop Innovative Technology (+$114,741,000 / +134.5 FTE) 

Investments in technology will help the IRS to effectively analyze risks, address the right 

issues, and apply coordinated and efficient treatments to resolve non-compliance with fairness 

and integrity. This component provides $114.7 million dollars to fund the following eight 

investments in technology: 

Increase Collection Coverage– Cap Adjustment (+$9,112,000 / +19.0 FTE)

The Withholding Compliance (WHC) Program brings taxpayers who have serious underwithholding problems into compliance with tax withholding requirements and currently relies 

on three separate inputs by tax examiners for each case action. This investment will provide a 

single entry system to populate multiple databases, will generate WHC correspondence 

letters, and will increase the efficiency of WHC employees and the accuracy of data. This 

investment is projected to allow WHC to correct withholding for an additional 90,000 

taxpayers. A WHC case averages a $1,200 increase in withholding, for a total potential 

revenue increase of $108 million. Withholding behavior tends to show long-lasting 

improvements for affected taxpayers in future years. 

Increase Audit Coverage – Cap Adjustment (+$26,112,000 / +38.5 FTE) 

• QuickBooks (+$3,325,000 / +7.5 FTE) 

Accounting software holds approximately 94 percent of the small business accounting 

software retail market, and is frequently encountered in the examination of taxpayer 

returns. This investment provides access to QuickBooks software to all revenue 
IRS - 31 

agents enabling them to accept electronic accounting records and reducing taxpayer 

burden. 

• Innocent Spouse Application (ISA) in Accounts Management (+$2,801,000 / +7.0 

FTE)

ISA is a tool within the Accounts Management System to work claims for relief 

associated with the Innocent Spouse Program that ensures that users address all of the 

necessary factors that will allow consistent application of the tax laws. This 

investment enhances the ISA to systemically issue letters, post case closing 

transactions, assign inventory, and create reports that can be queried. 

• Corporate Data Initiative (CDI) (+$846,000 / 2.0 FTE) 

CDI will redesign Microsoft Access databases to Enterprise Architecture compliant 

design and infrastructure. This investment will allow CDI to establish an enterprise 

service model for developing, operating and maintaining small corporate databases 

and spreadsheets originally developed in Microsoft Access or Excel. 

• 2D Barcoding for Paper Forms 1040, 1040X (+$8,395,000 / 3.0 FTE)– 

This investment will capture return data from the 1040 family of paper returns 

utilizing 2D barcodes and process paper payments electronically. Data captured will 

flow through to the Integrated Submission and Remittance Processing system resulting 

in faster, more accurate processing and improved audit effectiveness. 

• Correspondence Imaging for Compliance (+$10,745,000 / +19.0 FTE) 

Legacy correspondence systems currently store imaged correspondence in disparate 

formats and locations. This investment will create a central repository for imaged 

correspondence and allow IRS employees to collaborate and resolve compliance cases 

more efficiently. It will also establish a common document and imaging 

infrastructure. The efficacy of search queries will be improved across applications, 

indices, and database servers by sharing server content. This investment is expected to 

reduce the time, complexity, and costs associated with current document and image 

management.

Digitizing Form 990-– Cap Adjustment (+$2,378,000 / +7.0 FTE) 

This investment will allow the IRS to electronically capture data from paper-filed Forms 990, 

Return of Organization Exempt from Income Tax, and implement 2D barcodes on these 

returns. This will increase audit effectiveness and the speed of return processing, reduce

transcription errors, and reduce the incidence of inadvertent disclosure of information 

resulting from manual redaction errors when posting Forms 990 to publicly available sources. 

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance – 

Cap Adjustment (+$69,981,000 / +70.0 FTE) 

This investment of $69.9 million and 70 FTE will support the build out of FATCA systems 

requirements. It will fund updates to the legacy electronic filing system to modify and 

process FATCA forms, additional capabilities in the web-based registration system, and 
IRS - 32 

enhanced functionality in the systems that facilitate the exchange and processing of FATCA 

data to and from withholding agents, Foreign Financial Institutions (FFIs) and Host Country 

Tax Authorities and the United States.

Pursue Employment Tax and Abusive Tax Schemes – Cap Adjustment (+$7,158,000 / 

0 FTE)

A network analysis tool will enable the IRS to link multiple potentially abusive returns or 

information items together to identify the central figure behind a scheme versus applying 

resources to work individual returns one at a time. This investment of $7.2 million funds 

contractual services to acquire and implement network analysis. 

Expected Outcomes

The FY 2017 budget includes $399.4 million in investments to improve understanding of noncompliant taxpayer behavior, which support the IRS’s traditional enforcement programs 

including audit and collection coverage. These investments are projected to generate and 

protect $461.5 million in revenue in FY 2017, for an initial ROI of $1.2 to $1. Once the 

investment hires reach full potential, the expected ROI is $6.1 to $1. ROI for specific 

investments is identified in the table below.

FY 2017 FY 2019 FY 2017 FY 2019 FY 2017 FY 2019 FY 2017 FY 2019 FY 2017 FY 2019

Cost $ 399.4 $ 491.9 $ 90.5 $ 127.3 $ 117.1 $ 155.3 $ 11.3 $ 16.7 $ 180.5 $ 192.5

Revenue $ 461.5 $ 3,023.1 $ 160.5 $ 1,216.4 $ 237.0 $ 1,426.7 $ 64.0 $ 380.0

Average ROI 1.2 6.1 1.8 9.6 2.0 9.2 5.7 22.8

Increase Audit 

Coverage (revenueprotecting portion)

Enforcement 

Investments with 

Long-Term Revenue 

Effects

Total Costs and 

Revenue

Increase Collection 

Coverage

Increase Audit 

Coverage
IRS - 33 

Theme 6: Drive More Agility and Efficiency in IRS Operations 

+$120,955,000 / +146 FTE 

This theme provides a common case management solution, an improved revenue financial 

system, and maintenance funding for IT systems. 

This theme has two major components: 

• Implement New Capabilities and Systems – Create an enterprise records management 

solution and improve the IRS’s revenue financial accounting systems.

• Provide Support for Existing Systems – Acquire mainframes, servers, hardware, 

software, and contractual services for deployment of Business Systems Modernization 

(BSM) projects.

Implement New Capabilities and Systems (+$18,543,000 / +46 FTE) Cap Adjustment 

(+$10,238,000 / +27 FTE) 

This component provides funding to manage official records more effectively by 

implementing new systems and creating a unified, searchable archive of IRS e-mails to avoid 

redundant archiving. This component also supports and improves the IRS’s revenue financial 

accounting systems to ensure timely and accurate reporting of tax data. This component 

funds the following investments: 

Enterprise Electronic Records Management Solution - (+$18,543,000 / +46 FTE) 

This investment will allow the IRS to respond more timely to legal and Congressional 

inquiries, and FOIA requests. In FY 2016, using funding from projected user fee receipts, the 

IRS will invest in the infrastructure required to support this investment. This investment will

continue the implementation of the solution for electronic records management. Over a multiyear period, the IRS will phase in enterprise content management processes for taxpayerrelated records, records of policy, program, project development, and email. These actions 

will bring IRS into compliance with the Federal Records Act of 1950 as amended (44 U.S.C. 

Chapter 31) , which requires all systems to implement an electronic records retention policy 

and the Managing Government Records Directive (M-12-18) which instructs agencies to 

manage electronic records more efficiently and effectively. 

 Initiative

(dollars in thousands)

$000 FTE $000 FTE $000 FTE

Budget Request Program Increases $18,543 46.00 $18,543 46.00

Enterprise Electronic Records Management Solution 18,543 46.00 18,543 46.00

Cap Adjustment Program Increases $10,238 27.00 $92,174 73.00 $102,412 100.00

Maintain Integrity of Revenue Financial Systems 10,238 27.00 10,238 27.00

Operations and Maintenance for Deployed Business Systems 

Modernization (BSM) Projects 92,174 73.00 92,174 73.00

FY 2017 Total Program Increases $28,781 73.00 $92,174 73.00 $120,955 146.00

Implement New Capabilities to 

Drive Agility, Efficiency and 

Effectiveness 

Provide Support for 

Existing Systems 

Total 

Theme 6 Budget 

Request

Summary of Theme 6 Budget Request (by Component)
IRS - 34 

Maintain Integrity of Revenue Financial Systems - Cap Adjustment (+$10,238,000 / 

+27 FTE)

The current revenue financial systems do not use commercial software, so the IRS is reliant 

on internal resources to maintain them. These systems reconcile and report to the Bureau of 

Fiscal Service on over $3 trillion in revenue before refunds and are currently identified by 

GAO as a material weakness. This investment will merge multiple financial systems into one 

repository to ensure the integrity of the IRS’s financial data and make necessary changes to 

ensure that systems comply with accounting and other requirements. This will automate 

reconciliations of the IRS ledger systems and assist in the gathering of data for creation of 

reports and for GAO and TIGTA audits. Consolidation and elimination of systems that 

support operational decision making and the financial audit will yield savings and efficiencies 

in future years. 

Provide Support for Existing Systems Component Cap Adjustment (+$92,174,000 / +73 FTE)

For the past few years, the IRS has experienced increased demand for IT projects and 

services, with significant resources going toward implementing legislative mandates, 

including the FATCA, the ACA, and other mandatory requirements. This has severely 

impacted the IRS capacity to address other operational areas, including maintenance for 

newly deployed IT infrastructure. 

Operations and Maintenance for Deployed Business Systems Modernization 

(BSM) Projects – Cap Adjustment (+$92,174,000 / +73 FTE) 

This investment increases IRS IT operations funding for BSM projects. The IRS receives 

funding for major IT development and modernization projects through the BSM 

appropriation. Once development is completed, regular operations and maintenance 

begins, and the IRS is required to pay for this maintenance through its Operations Support 

appropriation. Since 2013, the IRS has incurred over $95.5 million in increased annual 

requirements as a result of BSM systems deployments, but has not received commensurate 

increases to the Operations Support appropriation. This investment partially restores the 

Operations Support base so that the funding will not have to be redirected from other areas 

to pay for the deployed BSM projects. Resources will fund staff, hardware and software, 

and contractual services for these deployed systems.

Expected Outcomes

This investment will improve IRS operations by:

• Helping respond in a timely fashion to legal and Congressional inquiries; 

• Helping to preserve institutional knowledge through the creation of an enterprise-wide 

electronic records management system; and

• Increasing organizational performance by improving revenue financial systems, in 

particular by reducing and eliminating manual processes and merging financial 

systemic data. 
IRS - 35 

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

+$90,039,000 / +491 FTE 

This section describes investments to combat stolen identity refund fraud, including detection 

and prevention, assistance to victims, and law enforcement. 

Due to the trillions of dollars that flow through the IRS each year and the vast amount of data

it maintains, the IRS is subjected to continuous cyber-attacks by criminals attempting to steal 

taxpayer data or use the tax administration system for personal gain. Identity theft is a 

growing epidemic that impacts all federal agencies. Information security incidents in the 

federal government involving personally identifiable information increased more than 

140 percent from FY 2009 to FY 2013. Cyber scams that result in identity theft and refund 

fraud, and the methods used to perpetrate them, continue to evolve, and require constant 

adaptation by the IRS. Additionally, data breaches occurring outside of the IRS have given 

criminals access to personal data, making it easier to impersonate legitimate taxpayers. The 

IRS is making progress against these crimes, but needs to make continuous investments in 

resources and tools to stay ahead of criminals. 

The FY 2017 budget request will invest in the technology and workforce skills that allow for 

timely risk assessments, strong prevention techniques, and data analysis that can be used to 

develop solutions for stolen identity refund fraud and shorten reaction times risks and 

incidents. This investment has two major components: 

• Address the Increased Workload Associated with Identity Theft, Refund Fraud, and 

Improper Payments – Funding for this component will provide additional staffing to 

reduce case inventories, protect revenue, and provide taxpayer service for victims of 

identity theft.

Initiative

(dollars in thousands)

$000 FTE $000 FTE $000 FTE

Budget Request Program Increases

 Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 70,843 459.50 19,196 31.50 90,039 491.00

Improving the Prevention of Identity Theft and Refund Fraud 8,624 69.50 8,624 69.50

Expanding Identity Theft Victim Assistance 9,573 134.00 9,573 134.00

Expand External Leads 1,015 12.00 1,015 12.00

Prevention of False Tax Returns Filed by Inmates 524 3.00 524 3.00

Assess Preparer Penalties 1,545 16.00 1,545 16.00

Increase Criminal Investigation Identity Theft Support 46,655 204.50 46,655 204.50

Counsel and Taxpayer Services Support 2,907 20.50 2,907 20.50

Eliminate Social Security Numbers (SSN) from Taxpayer Mailings 7,100 7,100 0.00

Web-based Freedom of Information Act (FOIA) 3,436 3.50 3,436 3.50

Establish Centralized Repository for Fraud 2,785 1.00 2,785 1.00

Dishonored Check Processing 2,396 6.50 2,396 6.50

Preventing MeF Fraud and Improved Access to Social Security Administration 

Data 1,858 12.00 1,858 12.00

Integrated Automated Technology (IAT) Tools 1,621 8.50 1,621 8.50

FY 2017 Total Program Increases $70,843 459.50 $19,196 31.50 $90,039 491.00

Summary of Focus Area Budget Request (by Component)

Address the Increased 

Workload Associated with 

Identity Theft, Refund 

Fraud, & Improper 

Payments

Strengthen Technology to 

Improve the Prevention of 

Refund Fraud & Improper 

Payments

Total 

Focus Area 

Budget Request
IRS - 36 

• Strengthen Technology to Improve the Prevention of Refund Fraud and Improper 

Payments – Funding for this component will build a suite of capabilities necessary to 

protect taxpayer data and the nation’s tax revenue. 

Address the Increased Workload Associated with Identity Theft, Refund Fraud, and Improper 

Payments (+$70,843,000 / +459.5 FTE)

Tax-related identity theft is increasingly complex and resource-intensive to combat. From the 

computer-based fraud detection filter that flags the return, to the accounts management 

employee that helps a victim regain control of his/her account, to the special agent who 

investigates the crime, identity theft impacts virtually every major IRS function. The IRS has 

struggled to meet the public’s expectations as identity theft continues to grow. This

investment provides additional staffing to handle the increased workload associated with 

identity theft, refund fraud, and reducing improper payments. This component provides $67.9 

million to fund the following six investments and associated other direct costs: 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 

(+$70,843,000 / +459.5 FTE)

• Improving the Prevention of Identity Theft and Refund Fraud (+$8,624,000 / 

+69.5 FTE)

These resources will allow the IRS to: 

o Establish Campus Fraud Technical Advisors to provide investigative leads and 

referrals to federal, state, and local law enforcement agencies to solve tax-related 

identity theft cases;

o Employ staffing and contractor support to safeguard and effectively manage 

federal tax information shared externally, oversee compliance with safeguard 

agreements, and monitor unencrypted Personally Identifiable Information leaving 

the IRS enabling the timely assessment of identity theft risk or other potential harm 

to taxpayers; and

o Hire additional staff to pursue more of the available leads from the Proactive Lead 

Analysis program, which obtains leads from industry partners and state 

departments of revenue based on their fraud and identity theft detection programs 

regarding returns that have not yet been filed. This protects revenue by stopping 

improper refunds before they are issued. The staff will also help resolve the 

related taxpayer account issues quickly. The IRS projects that the added Revenue 

Protected resulting from these analyses for calendar year (CY) 2014 and CY 2015 

will be over $1.3 billion.

• Expand Identity Theft Victim Assistance (+$9,573,000 / +134 FTE)

Additional resources will expand the IRS’s ability to stop or suspend returns identified 

as potential identity theft cases. This helps taxpayers affected by tax-related identity 

theft to get their issues resolved more timely and prevent them from being burdened 

with the same issues from year to year. 
IRS - 37 

Funds will also expand capacity to handle additional cases involving victims of tax related 

identity theft who have engaged the IRS for assistance. Receipts for these cases grew from 

about 188,000 receipts in FY 2010 to 730,000 in FY 2014. 

• Expand External Leads (+$1,015,000 / +12 FTE) 

The IRS External Leads staff recovers funds related to questionable refunds from 

external sources (e.g., financial institutions, state agencies, and tax providers). 

Expanding this staff enables the IRS to increase the number of lead sources, which 

have grown from 30 to 527 since 2010, that participate in this program and provide 

support for external leads pattern development. The IRS External Leads program 

recovered more than $1.3 billion in fraudulent refunds in FY 2014 and FY 2015 and 

expects to recover an additional $1 billion in FY 2016. With this FY 2017 request, the 

External Leads program expects to recover $1.2 billion in fraudulent refunds.

• Prevention of False Tax Returns Filed by Inmates (+$524,000 / +3 FTE) 

The Bipartisan Budget Act of 2013 allows the IRS access to data in the Prisoner 

Update Processing System (PUPS) maintained by the Social Security Administration 

(SSA). Resources will allow the IRS to implement and improve filters and models 

used with the PUPS data that will detect prisoner fraud including the identification of 

fraudulent wages and withholding on returns. Currently inmates use fake SSNs, SSNs 

of the deceased, and other SSNs to file fraudulent tax returns. PUPS data would add 

over two million records to the IRS’s Prisoner File, and is projected to result in $1 

billion in additional revenue protected annually. 

• Assess Preparer Penalties (+$1,545,000 / +16 FTE) 

The IRS requests additional staff to expand enforcement efforts to help reduce 

improper payments and assess appropriate preparer penalties. Resources will help 

identify return preparers who are committing refund fraud by filing multiple returns 

claiming false refundable credits. The IRS will develop successful penalty assessment 

models and filters to improve program effectiveness, thus creating a deterrent effect. 

• Increase Criminal Investigation Identity Theft Support (+$46,655,000 / +204.5 FTE) 

The IRS requests additional funding to: 

o Combat data breaches (+$40,145,000 / +167.0 FTE) by hiring: 

o 120 FTE to work criminal investigation cases related to identity theft and 

refund fraud which have grown by over 350 percent; 
IRS - 38 

o 45 FTE to increase staff at the IRS’s Scheme Development Centers (SDCs) 

which identify and develop schemes for the purpose of referring and 

supporting high-impact criminal tax and related financial investigations; 

and

o 2 FTE to support faster and more efficient fingerprint processing in the 

IRS’s National Forensic Laboratory (NFL) Latent Fingerprint Section and 

to provide technical investigative assistance for data breach cases that 

operate in the “dark net.” 

o Expand the Identity Theft Clearinghouse (+$3,448,000 / +21.0 FTE) by increasing 

the IRS’s participation in multi-agency task forces that obtain information about 

criminal activity involving federal and state tax refunds. These specials agents 

will also extend outreach to state and local law enforcement to expand the Law 

Enforcement Assistance Program as recommended by TIGTA Audit 2015-40-003 

Law Enforcement Assistance Program Requests Are Not Always Processed Timely 

and Accurately. 

o Criminal Investigation Support (+$1,377,000 / +9.5 FTE) provides funding for 

additional analysts for the Cyber Crimes Unit to provide technical investigative 

assistance and coordination in working identity theft and refund fraud cases. 

o Refund Crimes Bank Secrecy Act (BSA) Review Project (+$759,000 / +3.5 FTE). 

The IRS will continue to use bank secrecy information regarding identity theft and 

tax refund fraud by focusing on bank accounts that receive multiple Automated 

Clearing House or tax refund check deposits. 

o Initiative to Combat Temporary Work Visa Exploitation (+$926,000 / +3.5 FTE). 

Combat Temporary Work Visa exploitation by collaborating with SSA, FinCEN, 

and State Department to gather identifying information for visa holders. The IRS 

has seen an increase in the use foreign exchange visitors’ identities for filing false 

tax returns and facilitating the movement of false refunds. 

Strengthen Technology to Improve the Prevention of Refund Fraud and Improper Payments 

(+$19,196,000 / +31.5 FTE)

Investments in cyber defense technology are imperative in order to maintain both the integrity 

of tax administration and the confidence of the American people. The proliferation of online 

financial and personal data has enabled an explosion of identity theft as compromised third 

party data is more easily and cheaply stolen, warehoused, and sold online, greatly increasing 

the risk for fraud and improper payments. This component provides $19.2 million dollars to 

fund the following investments: 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 

(+$19,196,000 / +31.5 FTE)

• Eliminate Social Security Number (SSN) from Taxpayer Mailings 

(+$7,100,000 / 0 FTE)

These funds will provide resources for software, infrastructure, and related support to 

continue to reduce the use of Social Security Numbers (SSNs) on IRS forms. This 
IRS - 39 

phase of the project will reduce the display of SSNs on notices requesting a payment 

from the taxpayer, print barcodes on additional outgoing notices, and will acquire and 

implement equipment that reads 2D barcodes in the payment processing systems. This 

phase will reduce the use of SSNs on 88 notice types, eliminating the use of SSNs on 

notices to 48 million taxpayers. 

• Web-based Freedom of Information Act (FOIA) (+$3,436,000 / +3.5 FTE) 

This investment will fund a web-based platform for Freedom of Information Act 

(FOIA) requests. The IRS processes over 30,000 annual FOIA requests using its 

Automated FOIA (AFOIA) system. AFOIA does not have a robust search and find 

feature and is not compliant with Section 508 provisions. A web-based platform will 

improve system stability and performance, provide the capability for additional 

enhancements such as a robust search and find feature that will protect against 

inadvertent disclosure of taxpayer information, comply with Section 508 provisions, 

and establish the foundation for taxpayers to submit, monitor, and track their requests 

for information online. This investment supports the tenets of National Institute of 

Standards and Technology (NIST) Appendix J by assessing and improving the privacy 

controls associated with the IRS FOIA system.

• Establish Centralized Repository for Fraud (+$2,785,000 / +1.0 FTE)

This project funds labor and technology that will enhance multiple core tax 

enforcement areas within the IRS, including fraud referrals, corporate fraud, and 

abusive employment tax schemes. The centralized repository will expand the IRS’s

ability to identify significant tax cases; streamline and standardize the fraud referral 

process; and increase the number of fraud convictions thereby facilitating restitution 

orders that will lead to additional assessments. This system will allow the use of data 

and research across the organization. The repository database will aid in tracking, 

monitoring, and processing all fraud referrals including those related to identity theft. 

• Dishonored Check Processing (DCP) (+$2,396,000 / +6.5 FTE) 

DCP will improve the IRS’s ability to efficiently process dishonored checks and 

prevent erroneous refunds caused by invalid payments. Currently, banks use a manual 

process to mail checks back to the IRS, taxpayer accounts are posted manually by the 

IRS, and the cases are assigned to tax examiners to research. DCP will eliminate 

manual processes and create a fast, systemic transfer of insufficient fund information 

to the IRS Dishonored Check File with no manual process involved. By posting 

dishonored checks to tax accounts faster, it will expedite the process of monitoring 

identity thieves’ activities.

• Preventing MeF Fraud and Improved Access to Social Security Administration Data 

(+$1,858,000 / +12.0 FTE)

These resources will fund development and implementation of a means to reject 

attempts to e-file a return after five unsuccessful attempts. This will deter fraud 

perpetrators who are making multiple computerized attempts to file ID theft returns 

electronically. It also provides additional IT equipment and programming support to 

allow the IRS to get SSA Form W-2, Wage and Tax Statement, and SSA Form W-3, 

Transmittal of Wage and Tax Statement, data more quickly. Getting the data more 
IRS - 40 

quickly will accelerate the verification of wages and withholding on potentially 

fraudulent tax returns, thereby catching more fraudulent returns before refunds are 

issued, and shortening the processing time for legitimate refunds. This means that 

legitimate filers will get their refunds faster.

• Integrated Automated Technology (IAT) Tools (+$1,621,000 / +8.5 FTE) 

IAT tools are desktop productivity-enhancing tools that automate certain taxpayer 

account processing activities completed by IRS staff. IATs save staff hours, improve 

accuracy, and save money. IAT-developed software programs are needed to match 

wage and withholding information, automate additional taxpayer correspondence, and 

identify potential identity theft cases. These additional resources will increase IAT's 

capacity for technology development by approximately three software programs per 

year.

Expected Outcomes

The FY 2017 budget includes $90 million in investments to prevent identity theft, refund 

fraud, and improper payments. These investments are projected to protect $612 million in 

revenue in FY 2017, for an initial ROI of $6.8 to $1. Once the staff are fully trained and 

reach full potential, the expected ROI is $10.7 to $1 with $1,146 million in projected annual 

revenue protected. 

Alcohol and Tobacco Tax and Trade Bureau Transfer +$5,000,000 

The IRS will transfer $5 million to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for 

those high-ROI tax enforcement activities that produce additional revenue through program 

activities designated to narrow the federal excise tax gap on alcohol and tobacco 

commodities. More detailed information can be found in the TTB chapter of this document.
IRS - 41 

2.2 – Operating Levels Table

Dollars in Thousands

Internal Revenue Service

Object Classification

FY 2015

Actual

FY 2016

Enacted

FY 2017

Request

11.1 Full-Time Permanent Positions 5,757,996 6,061,196 6,346,976

11.3 Other than Full-Time Permanent Positions 78,545 85,525 86,844

11.5 Other Personnel Compensation 151,736 203,781 219,349

11.8 Special Personal Services Payments 23,504 16,799 17,059

11.9 Personnel Compensation (Total) 6,011,781 6,367,301 6,670,228

12.0 Personnel Benefits 2,020,457 2,005,273 2,110,081

13.0 Benefits to Former Personnel 51,147 52,266 53,054

Total Personnel and Compensation Benefits $8,083,385 $8,424,840 $8,833,363

21.0 Travel 84,025 93,859 129,553

22.0 Transportation of Things 18,482 21,407 29,748

23.1 Rental Payments to GSA 610,814 595,284 618,296

23.2 Rent Payments to Others 12,824 13,453 13,771

23.3 Communications, Utilities, & Misc 301,678 294,481 323,226

24.0 Printing & Reproduction 26,577 29,830 31,146

25.1 Advisory & Assistance Services 670,894 875,840 1,111,178

25.2 Other Services 97,504 144,134 344,782

25.3 Purchase of Goods & Services from Govt. Accounts 188,648 176,408 191,682

25.4 Operation & Maintenance of Facilities 173,022 157,775 168,283

25.5 Research & Development Contracts 2,462 1,555 1,576

25.6 Medical Care 14,180 13,640 15,063

25.7 Operation & Maintenance of Equipment 62,983 71,782 79,929

25.8 Subsistence & Support of Persons 930

26.0 Supplies and Materials 39,242 41,050 46,475

31.0 Equipment 238,020 216,543 270,787

32.0 Land and Structures 2,625 25,015 32,514

41.0 Grants, Subsidies 18,254 33,500 33,500

42.0 Insurance Claims & Indemnities 1,183 1,601 1,626

91.0 Unvouchered 2,696 3,003 3,597

Total Non-Personnel $2,567,043 $2,810,160 $3,446,732

New Appropriated Resources $10,650,428 $11,235,000 $12,280,095

Appropriations:

Taxpayer Services 2,173,684 2,333,376 2,406,318

Enforcement 4,767,563 4,864,936 5,216,263

Operations Support 3,601,436 3,746,688 4,314,099

Business Systems Modernization 107,745 290,000 343,415

Trade Adjustment Assistance Health Coverage Tax Credit

New Appropriated Resources $10,650,428 $11,235,000 $12,280,095

FTE 78,107 81,572 84,803
IRS - 42 

2B – Appropriation Language and Explanation of Changes 

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

INTERNAL REVENUE SERVICE 

TAXPAYER SERVICES

For necessary expenses of the Internal Revenue Service to 

provide taxpayer services, including 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, [$2,156,554,000] $2,406,318,000, of which 

not less than $6,500,000 shall be for the Tax Counseling 

for the Elderly Program, of which not less than 

$12,000,000 shall be available for low-income taxpayer 

clinic grants, [and] of which not less than [$15,000,000, to] 

$191,822,000 shall remain available until September 30, 

[2017, shall be available for a Community Volunteer 

Income Tax Assistance matching grants program for tax 

return preparation assistance] 2018, and of which not less 

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

expenses of the Taxpayer Advocate Service: Provided, 

That of the amounts made available for the Taxpayer 

Advocate Service, not less than $5,000,000 shall be for 

identity theft casework: Provided further, That, of the 

amounts made available until September 30, 2018, not less 

than $15,000,000 shall be available for a Community 

Volunteer Income Tax Assistance matching grants program 

for tax return preparation assistance. 

ENFORCEMENT

For necessary expenses for tax enforcement activities of the 

Internal Revenue Service to determine and collect owed 

taxes, to provide legal and litigation support, to conduct 

criminal investigations, to enforce criminal statutes related 

to violations of internal revenue laws and other financial 

crimes, to purchase and hire passenger motor vehicles (31 

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, [$4,860,000,000] 

$5,216,263,000, of which not to exceed [$50,000,000] 

$54,936,000 shall remain available until September 30, 

[2017] 2018, and of which not less than $60,257,000 shall 

New two-year authority was 

provided in Section 113 of the 

Department of the Treasury 

Appropriations Act, 2016. 

$176,822,000 of this amount 

was allocated to Taxpayer 

Services. This same amount is 

requested in FY 2017 and is 

added to the existing two-year 

authority in the Budget request, 

for a total request of 

$191,822,000 in two-year 

authority. The total Budget 

request for Taxpayer Services is 

$2,406,318,000. 

New two-year authority was 

provided in Section 113 of the 

Department of the Treasury 

Appropriations Act, 2016. 

$4,936,000 of this amount was 

allocated to Enforcement. This 

same amount is requested in FY 

2017, and is added to the 

existing two-year authority in 

the Budget request, for a total 

request of $54,936,000 in twoyear authority. 
IRS - 43 

be for the Interagency Crime and Drug Enforcement 

program: Provided, That, of the amounts provided under 

this heading, not less than $231,344,000, of which 

$5,000,000 shall be transferred to the Alcohol and Tobacco 

Tax and Trade Bureau, shall be for an additional 

appropriation for tax activities, including tax compliance 

to address the Federal tax gap, as specified for purposes of 

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

Deficit Control Act of 1985, as amended.

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)); the operations of the 

Internal Revenue Service

Oversight Board; and other services as authorized by 5 

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

Commissioner; [$3,638,446,000] $4,314,099,000, of which 

not to exceed [$50,000,000] $158,242,000 shall remain 

available until September 30, [2017]2018; of which not to 

exceed $10,000,000 shall remain available until expended 

for acquisition of equipment and construction, repair and 

renovation of facilities; of which not to exceed $1,000,000 

shall remain available until September 30, [2018]2019, for 

research; of which not to exceed [$20,000] $25,000 shall 

be for official reception and representation expenses:

Provided, That not later than 30 days after the end of each 

quarter, the Internal Revenue Service shall submit a report 

to the Committees on Appropriations of the House of 

Representatives and the Senate and the Comptroller 

General of the United States detailing the cost and schedule 

performance for its major information technology 

investments, including the purpose and life-cycle stages of 

the investments; the reasons for any cost and schedule 

The Budget Request for the 

Enforcement account is 

$5,216,263,000 including a 

program integrity cap 

adjustment of $231,344,000 

which, when combined with the 

$283,404,000 cap adjustment in 

the Operations Support account, 

totals $514,748,000 in 

additional appropriation for tax 

enforcement and compliance 

activities.

New two-year authority was 

provided in Section 113 of the 

Department of the Treasury 

Appropriations Act, 2016. 

$108,242,000 of this amount 

was allocated to Operations 

Support. This same amount is 

requested in FY 2017, and is 

added to the existing two-year 

authority in the Budget request, 

for a total request of 

$158,242,000 in two-year 

authority. 

 

The Budget Request for the 

Operations Support account is 

$4,314,099,000 including a 

program integrity cap 

adjustment of $283,404,000. 
IRS - 44 

variances; the risks of such investments and strategies the 

Internal

Revenue Service is using to mitigate such risks; and the 

expected developmental milestones to be achieved and 

costs to be incurred in the next quarter: Provided further, 

That the Internal Revenue Service shall include, in its 

budget justification for fiscal year [2017]2018, a summary 

of cost and schedule performance information for its major 

information technology systems: Provided further, That, of 

the amounts provided under this heading, such sums as are 

necessary shall be available to fully support tax 

enforcement and compliance activities, including not less 

than $283,404,000, for an additional appropriation for tax 

activities, including tax compliance to address the Federal 

tax gap, as specified for purposes of Section 251(b)(2) of 

the Balanced Budget and Emergency Deficit Control Act of 

1985, as 

amended. 

BUSINESS SYSTEMS MODERNIZATION

For necessary expenses of the Internal Revenue Service's 

business systems modernization program, [$290,000,000] 

$343,415,000, to remain available until September 30, 

[2018] 2019, for the capital asset acquisition of information 

technology systems, including management and related 

contractual costs of said acquisitions, including related 

Internal Revenue Service labor costs, and contractual costs 

associated with operations authorized by 5 U.S.C. 3109: 

Provided, That not later than 30 days after the end of each 

quarter, the Internal Revenue Service shall submit a report 

to the Committees on Appropriations of the House of 

Representatives and the Senate and the Comptroller 

General of the United States detailing the cost and schedule 

performance for CADE 2 and Modernized e-File 

information technology investments, including the 

purposes and life-cycle stages of the investments; the 

reasons for any cost and schedule variances; the risks of 

such investments and the strategies the Internal Revenue 

Service is using to mitigate such risks; and the expected 

developmental milestones to be achieved and costs to be 

incurred in the next quarter.
IRS - 45 

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 

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 an 

employee training program, which shall include the 

following topics: taxpayers' rights, dealing courteously 

with taxpayers, cross-cultural relations, ethics, and the 

impartial application of tax law.

SEC. 103. The Internal Revenue Service shall institute and 

enforce policies and procedures that will safeguard the 

confidentiality of taxpayer information and protect 

taxpayers against identity theft.

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

the Internal Revenue Service shall be available for 

improved facilities and increased staffing to provide 

sufficient and effective 1–800 help line service for 

taxpayers. The Commissioner shall continue to make 

improvements to the Internal Revenue Service 1–800 help 

line service a priority and allocate resources necessary to 

enhance the response time to taxpayer communications, 

particularly with regard to victims of tax-related crimes. 

[SEC. 105. None of the funds made available to the 

Internal Revenue Service by this Act may be used to make 

a video unless the Service-Wide Video Editorial Board 

determines in advance that making the video is appropriate, 

taking into account the cost, topic, tone, and purpose of the 

video.] 

SEC. [106]105. The Internal Revenue Service shall issue a 

notice of confirmation of any address change relating to an 

employer making employment tax payments, and such 

notice shall be sent to both the employer's former and new 

address and an officer or employee of the Internal Revenue 

Service shall give special consideration to an offer-incompromise from a taxpayer who has been the victim of 

fraud by a third party payroll tax preparer.

[SEC. 107. None of the funds made available under this 

Act may be used by the Internal Revenue Service to target 

citizens of the United States for exercising any right 

guaranteed under the First Amendment to the Constitution 

of the United States.]

Section 105 is no longer 

needed. In 2013, the IRS 

established policy and standards 

for video use and the ServiceWide Video Editorial Board to 

review all video projects 

planned throughout the IRS. 

Sections 107 and 108 are 

unnecessary since these 

behaviors are prohibited under 

existing, permanent law. 
IRS - 46 

[SEC. 108. None of the funds made available in this Act 

may be used by the Internal Revenue Service to target 

groups for regulatory scrutiny based on their ideological 

beliefs.] 

[SEC. 109. None of funds made available by this Act to the 

Internal Revenue Service shall be obligated or expended on 

conferences that do not adhere to the procedures, 

verification processes, documentation requirements, and 

policies issued by the Chief Financial Officer, Human 

Capital Office, and Agency-Wide Shared Services as a 

result of the recommendations in the report published on 

May 31, 2013, by the Treasury Inspector General for Tax 

Administration entitled "Review of the August 2010 Small 

Business/Self-Employed Division's Conference in 

Anaheim, California" (Reference Number 2013–10–037).] 

[SEC. 110. None of the funds made available in this Act to 

the Internal Revenue Service may be obligated or 

expended—(1) to make a payment to any employee under a 

bonus, award, or recognition program; or (2) under any 

hiring or personnel selection process with respect to rehiring a former employee, unless such program or process 

takes into account the conduct and Federal tax compliance 

of such employee or former employee.] 

[SEC. 111. None of the funds made available by this Act 

may be used in contravention of section 6103 of the 

Internal Revenue Code of 1986 (relating to confidentiality 

and disclosure of returns and return information).] 

[SEC. 112. Except to the extent provided in section 6014, 

6020, or 6201(d) of the Internal Revenue Code of 1986, no 

funds in this or any other Act shall be available to the 

Secretary of the Treasury to provide to any person a 

proposed final return or statement for use by such person to 

satisfy a filing or reporting requirement under such Code.] 

[SEC. 113. In addition to the amounts otherwise made 

available in this Act for the Internal Revenue Service, 

$290,000,000, to be available until September 30, 2017, 

shall be transferred by the Commissioner to the "Taxpayer 

Services", "Enforcement", or "Operations Support" 

accounts of the Internal Revenue Service for an additional 

amount to be used solely for measurable improvements in 

the customer service representative level of service rate, to 

improve the identification and prevention of refund fraud 

and identity theft, and to enhance cybersecurity to 

safeguard taxpayer data: Provided, That such funds shall 

supplement, not supplant any other amounts 

made available by the Internal Revenue Service for such 

Section 109 is unnecessary 

since obligation and outlay of 

funds on conferences are 

already subject to adequate 

review and departmental 

policies. 

Section 110 is unnecessary 

since employee records are 

already considered according to 

agency processes prior to hiring 

or award issuance. 

Section 111 is unnecessary 

since these behaviors are 

prohibited under existing, 

permanent law.

Section 112 is unnecessary 

because the IRS does not 

currently complete these 

activities. 

Section 113 is unnecessary. The 

amounts provided in FY 2016 

are accounted for in the FY 

2017 Budget request for the 

four main appropriations 

accounts. 

The IRS requests Streamlined 

Critical Pay (SCP) authority 

through September 30, 2021. 

This SCP authority expired 
IRS - 47 

purpose: Provided further, That such funds shall not be 

available until the Commissioner submits to the 

Committees on Appropriations of the House of 

Representatives and the Senate a spending plan for such 

funds: Provided further, That such funds shall not be used 

to support any provision of Public Law 111–148, Public 

Law 111–152, or any amendment made by either such 

Public Law.] 

SEC. 106. Section 9503(a) of title 5, United States Code, is 

amended by striking the clause "before September 30, 

2013" and inserting "before September 30, 2021". 

SEC. 107. Section 9503(a)(5) of title 5, United States Code, 

is amended by inserting before the semicolon the following: 

"renewable for an additional two years, based on a critical 

organizational need". 

SEC. 108. Section 1344(b)(6) of title 31, United States 

Code, is amended by adding a comma before "the 

Administrator of the Drug Enforcement Administration", by 

striking "and" after "Drug Enforcement Administration", 

and by inserting ", and the Commissioner of Internal 

Revenue" after "National Aeronautics and Space 

Administration".

September 30, 2013. Currently 

there are 14 senior employees 

under SCP appointments, down 

from a high of 30. If the SCP is 

not renewed, the IRS will face 

challenges recruiting and 

retaining top-level talent

through FY 2017 as the 

remaining SCP term 

appointments expire , especially 

IT professionals who can help 

protect taxpayer data from 

cyber-attacks and who are 

working to modernize the IRS’s 

IT infrastructure.

The IRS requests that the IRS 

Commissioner position be 

permanently added to 

31 U.S.C § 1344(b)(6) as one of 

the government officials with 

authorized home-to-work 

transportation. This is due to 

security concerns. 

2C – Legislative Proposals 

Streamlined Critical Pay Authority

The IRS requests Streamlined Critical Pay (SCP) authority through September 30, 2021. The 

authority to make new SCP appointments expired September 30, 2013. Currently there are 

approximately 14 senior employees under SCP appointments, down from a high of 30. If the 

SCP is not renewed, the IRS will face challenges recruiting and retaining top-level talent

through FY 2017 as the remaining SCP term appointments expire , especially IT professionals 

who can help protect taxpayer data from cyber-attacks and who are working to modernize the 

IRS's IT infrastructure. According to Treasury Inspector General for Tax Administration 

report 2015-IE-R001, The Internal Revenue Service’s Use of Its Streamlined Critical Pay 

Authority, “Private sector expertise had been crucial to introducing new leadership to 

supplement in-house expertise, and the IRS had taken advantage of the private sector 

expertise by retaining the critical pay appointees whenever feasible.” 

Commissioner Transportation 

The IRS requests that the IRS Commissioner position be permanently added to 

31 U.S.C § 1344(b)(6) as one of the government officials authorized home-to-work 

transportation. The IRS Criminal Investigations unit completed an extensive assessment of 
IRS - 48 

the Commissioner’s threat environment and has classified the threat status as high. The 

Treasury Inspector General for Tax Administration (TIGTA) has also recommended that 

precautions continue to be taken regarding the Commissioner’s safety due to the elevated 

threat environment. 

2D – Legislative Tax Proposals 

These legislative proposals are intended to reduce the tax gap and improve tax compliance 

with minimal taxpayer burden. The new tax gap proposals that were included in the FY 2017 

President’s Budget were estimated by the Treasury Office of Tax Analysis (OTA) to increase 

revenue by $82.2 billion over the next 10 years. The majority of the estimated revenue 

includes revenue generated by the FY 2017 program integrity cap adjustment investments. 

These proposals will reduce the tax gap by expanding information reporting and sharing, 

improving compliance by businesses, and strengthening tax administration. The IRS 

estimates the implementation cost for these FY 2017 President’s Budget tax gap proposals to 

be $57.2 million (excluding the program integrity cap adjustment’s ten-year cost) over three 

years, including the initial startup, processing, and compliance operational costs (the cost for 

these legislative proposals is provided below). In a few cases, estimates are not yet available 

due to timing. 

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: 

• Require a certified Taxpayer Identification Number (TIN) from contractors and 

allow certain withholding ($11.5 million); 

• Require information reporting for private separate accounts of life insurance 

companies ($0); 

• Provide an exception to the limitation on disclosing tax return information to 

expand TIN matching beyond forms where payments are subject to backup 

withholding; 

• Provide for reciprocal reporting of information in connection with the 

implementation of the FATCA ($4.2 million); and

• Require Form W-2 reporting for employer contributions to defined contribution 

plans ($1.7 million). 

Improve compliance by businesses – Improving compliance by businesses of all sizes is 

important due to their role in tax administration (through employment taxes) and to ensure 

equity across the tax system. Specific proposals to improve compliance by businesses would: 

• Increase certainty with respect to worker classification ($1.9 million); 

• Increase information sharing to administer excise taxes ($0); and

• Provide authority to readily share beneficial ownership information of U.S. 

companies with law enforcement ($4.3 million).
IRS - 49 

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: 

• Impose liability on shareholders to collect unpaid income taxes of applicable 

corporations ($0.1 million);

• Implement a program integrity statutory cap adjustment for tax administration 

($17.5 billion);

• Revise offer-in-compromise application rules ($17.8 million); 

• Make repeated willful failure to file a tax return a felony ($0); 

• Facilitate tax compliance with local jurisdictions ($1.2 million); 

• Improve investigative disclosure statute ($0); 

• Allow IRS to absorb credit and debit card processing fees for certain tax payments 

($9.6 million); 

• Provide the IRS with greater flexibility to address correctable errors ($1.4 million);

• Enhance electronic filing of returns ($0); 

• Improve the whistleblower program ($0); 

• Index all penalties for inflation ($0.8 million); 

• Combat tax-related identity theft ($2.7 million);

• Allow states to send notices of intent to offset federal tax refunds to collect state 

tax obligations by regular first-class mail instead of certified mail ($0)

• Accelerate information return filing due dates ($0); 

• Increase oversight of paid tax return preparers ($0); 

• Enhance feasibility of the administration of the appraiser penalty ($0); 
IRS - 50 

2E – Strategic Objective Annual Review (SOAR) 

The GPRA Modernization Act of 2010 requires each federal agency to conduct a review of 

performance goals and objectives on an annual basis. This Strategic Objective Annual 

Review (SOAR), conducted across Treasury with participation from the IRS, serves as an 

annual assessment of progress to improve program outcomes and looks at opportunities for 

productivity gains using a variety of analytical, research, and evaluation methods to support 

the assessment.

Based on the FY 2015 SOAR, the IRS identified two next steps: (1) Implement first ACA 

filing season, and (2) Concisely articulate IRS enforcement and service priorities.

In FY 2015, the IRS made significant progress in addressing these SOAR focus areas through 

the successful delivery of several Quarterly Performance Review (QPR) priority projects. 

Actions completed to date include: 

Provided outreach communications, customer service, and stakeholder collaboration on the 

ACA tax provisions during the second ACA open enrollment period and the first ACA Filing 

Season. The IRS integrated technology to support ACA Filing Season 2015 tax 

administration processing, allowing taxpayers to report health insurance coverage, claim 

health coverage exemptions, report a shared responsibility payment, and claim the ACA 

Premium Tax Credit. The IRS built a new system, the ACA Verification Service (AVS), to 

enable at-filing checks of tax returns for reporting the Premium Tax Credit, leveraging thirdparty data from the Insurance Marketplaces, and validating ACA-related tax forms. This 

system, which processed millions of tax returns, helped identify fraudulent and erroneous 

returns at the initial processing stage, reducing the number of refunds disbursed in error. In 

addition to making progress in completing the SOAR next steps, the IRS also completed 

major milestones on the following priority initiatives tracked through the Department’s 

Quarterly Performance Reviews (QPRs)

• Achieved a major milestone by opening the first release of the International Data 

Exchange Service (IDES) Gateway. IDES enables both Financial Institutions and 

Host Country Tax Administrations to comply with their Foreign Account Tax 

Compliance Act (FATCA) reporting obligations by safely and securely sending 

electronic FATCA reports to the IRS. 

• Initiated the Return Review Program (RRP) pilot project. The RRP successfully 

loaded and scored over 99 million electronic refund returns. Of those returns, nearly 

800,000 were identified as potential ID theft fraud, representing over $4.7 billion in 

government revenues protected. By identifying suspicious cases up front, RRP was 

able to reduce the amount of manual analysis work by 19 percent. In its inaugural 

filing season, RRP did not miss a single day of processing returns, identifying 

potential ID theft, and protecting taxpayer revenues.

• Received Executive Steering Committee approval of the Customer Account Data 

Engine (CADE) 2 Transition State 2 (TS2) five-year release plan. In addition to 

continued support of the IRS’s current tax processing needs, the plan includes 

expansion of CADE 2 capabilities. The TS2 five-year release plan will address the 
IRS - 51 

Unpaid Assessment Financial Material Weakness, leverage the CADE 2 database as 

the Authoritative Source for Financial Statement Audit and Reporting, and begin the 

migration of core Individual Master File (IMF) functions from Assembly Language 

Code (ALC) to a modern computer language. Notably, an update in FY 2015 

prevented issuance of erroneous notices for limited Failure to Pay Penalties and 

another enabled capturing historic financial data expected to be useful in audit 

processes. 

• Completed 10 cross-organizational projects to upgrade and improve existing website 

content to better meet the needs of online audiences, continually improving the online 

experience provided to taxpayers on many IRS.gov website pages. The IRS 

developed a multi-year strategy to convert many tax publications and instructions into 

the user-friendly e-Pub electronic format. This digital publishing standard adapts 

traditional paper formats into a format readable by mobile devices such as tablets, 

e-readers, and smartphones and also meets accessibility requirements.

A summary of IRS accomplishments that directly support the SOAR can be found in Section 

1B, Vision, Priorities, and Context. A detailed discussion of the performance measures 

associated with the above focus areas can be found in Section 3. More detailed information 

on the IRS FY 2015 accomplishments can be found in the Management’s Discussion and 

Analysis section of the audit report, Financial Audit - IRS’s Fiscal Years 2015 and 2014 

Financial Statements dated November 2015 (GAO-16-146). 
IRS - 52 

2F – IRS Use of Evidence and Evaluation 

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

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

Significant Accomplishments 

Reducing Taxpayer Burden and Improving Compliance 

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

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

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

The model is used to inform the campus exam plan along with the design and analysis 

of nonfiler outreach and enforcement treatments. The underlying research study is 

being updated based on more recent taxpayer experience and is also being extended to 

cover the experience of corporate and partnership taxpayers. 

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

studies aiming to better align treatments to taxpayer behavior. These include 

randomized controlled trials of outreach programs to encourage compliant 

participation in the Earned Income Tax Credit and the American Opportunities Tax 

Credit, filing compliance outreach and pre-emptive communication, and collection 

treatments. The research applies principles of behavioral economics in the design and 

analysis of the treatments. The analysis further considers the salience and flow of 

information to and among taxpayers in evaluating both direct and indirect effects of 

IRS treatments.

Highest Priorities

Improving the Effectiveness of the IRS

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

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

identify areas of potential cost savings. The evaluations conducted to date have 

suggested new directions for the individual income files and changes over the next 

5-years in the production and delivery of business tax data to better represent 

increased globalization. SOI plans to continue evaluating the remainder of its 

products in FY 2016. The Division is also incorporating customer feedback and the 

effects of the changing data landscape into its 5-year business plan; a draft will be 

available by the end of the fiscal year.

• Creating More Accessible Statistics: SOI is developing a comprehensive plan to 

modernize its public communications efforts. Planned initiatives include extensive 

data visualizations, social media outreach, and redesigned web pages. A redesign of 

the IRS Data Book is already in process. 
IRS - 53 

• Linking Data across Forms: SOI is initiating new projects to increase its ability to link 

data across tax and information returns. Linked data products will assist users in 

developing more comprehensive analysis and better understanding taxpayer behavior. 

Implementation Updates for OMB Memo M-14-06 

• Incarceration Data: SOI provided Treasury with a copy of an IRS administrative data 

file containing information on U.S. Citizens who have been incarcerated. Treasury 

will use the file for studies of how individuals who have served time in prison use 

various tax expenditures to both help their families during periods of imprisonment 

and improve their economic circumstances once they have been released. This file 

may also be used to study the long-term economic effects of imprisonment on various 

U.S. demographic groups.

• Providing Information on the Tax System to the Public: During FY 2015, SOI 

released the 2012 Corporation Source Book online. This publication includes nearly 

450 electronic tables that present corporate tax data by industrial sector as well as by 

major and minor industries within sector. SOI also released tables for the 

2012 Corporation Income Tax Returns Complete Report on the IRS webpage, Tax 

Stats. These tables consist of extensive corporate tax data classified primarily by size 

of total assets and size of total tax receipts. 

To date in FY 2015, SOI has also released more than 380 additional tables containing 

detailed information on a wide range of topics. Significantly, SOI released the 2012 

state and county level migration data, which are based on year-to-year address changes 

reported on individual income tax returns. State-level files track inflows and outflows 

and include both origins and destinations by county. SOI’s other releases included 

time-series tables showing number of returns, adjusted gross income, and total income 

tax for individual taxpayers, by percentile, for TY 2001 to TY 2012, as well as 

TY 2012-updated data for corporations, partnerships, and sole proprietorships. 

IRS-54 

Section 3 – Budget and Performance Plan

Taxpayer Services 

Appropriation Description

The Taxpayer Services appropriation provides funding for taxpayer service activities and 

programs. This includes printing forms and publications, processing tax returns and related 

documents, offering filing and account services, providing taxpayer assistance, and providing 

taxpayer advocacy services. 

The Taxpayer Services budget request for FY 2017 is $2,406,318,000 in direct appropriations 

and 31,056 FTE. This is an increase of $72,942,000 or 3.13 percent, and 686 FTE more than 

the FY 2016 Enacted level of $2,333,376,000 and 30,370 FTE. 

The performance measures reflected in this section align with Goal 3: Fairly and effectively 

reform and modernize federal financial management, accounting, and tax systems, Objective 

3.3: Pursue tax reform, implement the ACA and FATCA, and improve the execution of the tax 

code of the Department of Treasury’s Strategic Plan for FY 2014 – FY 2017 Strategic Plan. 
IRS - 55 

2.1 – Budget Adjustments Table 

Dollars in Thousands

Taxpayer Services FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 27,887 $2,156,554

FY 2016 Administrative Provision 113 2,483 $176,822

Improve Taxpayer Service 2,483 176,622

Strengthening the Prevention of Identity Theft 200

FY 2016 Enacted 30,370 $2,333,376

Changes to Base:

Maintaining Current Levels (MCLs): $33,446

Pay Annualization 6,440

Pay Raise 23,856

Non-Pay 3,150

Efficiencies/Savings: (72) ($3,708)

Increase e-File Savings (72) (3,708)

Subtotal FY 2017 Changes to Base (72) $29,738

FY 2017 Current Services (Base) 30,298 $2,363,114

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Improve Taxpayer Service 604 33,503

Subtotal 604 $33,503

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 154 9,701

Subtotal 154 $9,701

Subtotal FY 2017 Budget Request Program Increases 758 $43,204

Total FY 2017 Total Budget Request 31,056 $2,406,318

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 686 $72,942

Percent Change FY 2017 Budget Request over FY 2016 Enacted 2.26% 3.13%
IRS - 56 

2.2 – Operating Levels Table 

Dollars in Thousands

Taxpayer Services

Object Classification

FY 2015

Actual

FY 2016

Enacted

FY 2017

Request

11.1 Full-Time Permanent Positions 1,457,204 1,606,843 1,656,581

11.3 Other than Full-Time Permanent Positions 40,876 43,497 44,168

11.5 Other Personnel Compensation 35,485 66,350 69,662

11.8 Special Personal Services Payments 617 886 899

11.9 Personnel Compensation (Total) 1,534,182 1,717,576 1,771,310

12.0 Personnel Benefits 494,627 420,188 435,578

13.0 Benefits to Former Personnel 70

Total Personnel and Compensation Benefits $2,028,879 $2,137,764 $2,206,888

21.0 Travel 12,184 18,415 19,314

22.0 Transportation of Things 754 709 720

23.2 Rent Payments to Others

23.3 Communications, Utilities, & Misc 1,213 1,490 1,515

24.0 Printing & Reproduction 7,955 8,843 8,983

25.1 Advisory & Assistance Services 26,007 22,735 23,141

25.2 Other Services 6,854 37,312 38,400

25.3 Purchase of Goods & Services from Govt. Accounts 65,813 64,459 65,516

25.4 Operation & Maintenance of Facilities 2 2 3

25.7 Operation & Maintenance of Equipment 1,510 1,535

25.8 Subsistence & Support of Persons 177

26.0 Supplies and Materials 5,031 5,666 5,815

31.0 Equipment 185 332 338

41.0 Grants, Subsidies 18,254 33,500 33,500

42.0 Insurance Claims & Indemnities 376 639 650

Total Non-Personnel $144,805 $195,612 $199,430

New Appropriated Resources $2,173,684 $2,333,376 $2,406,318

Budget Activities:

Pre-filing Taxpayer Assistance & Education 609,196 629,920 643,197

Filing & Account Services 1,564,488 1,703,456 1,763,121

New Appropriated Resources $2,173,684 $2,333,376 $2,406,318

FTE 27,476 30,370 31,056
IRS - 57 

2.3 – Appropriation Detail Table 

Dollars in thousands

Taxpayer Services

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Pre-Filing Taxpayer Assistance and Education 5,349 $609,196 5,499 $629,920 5,532 $643,197 33 $13,277 0.60% 2.11%

Filing and Account Services 22,127 1,564,488 24,871 1,703,456 25,524 1,763,121 653 59,665 2.63% 3.50%

Subtotal New Appropriated Resources 27,476 $2,173,684 30,370 $2,333,376 31,056 $2,406,318 686 $72,942 2.26% 3.13%

Other Resources:

Reimbursables 464 30,198 487 34,729 512 36,465 25 1,736 5.13% 5.00%

Offsetting Collections - Non Reimbursables

User Fees 71 44,694 661 103,496 1,377 116,841 716 13,345 108.32% 12.89%

Recovery from Prior Years

Unobligated Balances from Prior Years 110 14,304 11,000 12,000 1,000 9.09%

Transfers In/Out

Resources from Other Accounts 2 287

Subtotal Other Resources 932 $89,196 1,148 $149,225 1,889 $165,306 741 $16,081 64.55% 10.78%

Total Budgetary Resources 28,408 $2,262,880 31,518 $2,482,601 32,945 $2,571,624 1,427 $89,023 4.53% 3.59%

% Change

FY 2016

Enacted 1

FY 2015

Actual

FY 2017

Request

FY 2016 to FY 2017 

Request

FY 2016 to FY 2017 

Request

Change

2

Resources from Other Accounts include Other Direct FTE funded by the Department of Health and Human Services (287 FTE in FY 2015).

1

FY 2016 Enacted includes $176.8 million in Section 113 Administrative Provision funding for Taxpayer Services.
IRS - 58 

3A – Pre-Filing Taxpayer Assistance and Education ($643,197,000 in direct 

appropriations, $83,000 from reimbursable programs, and an estimated $3,386,000 from 

user fees): This budget activity funds services to assist taxpayers with understanding and 

meeting their tax obligations, including tax law interpretation, publication, production, and 

advocate services. The program activities include the following: 

• Pre-Filing Services Management supports headquarters management associated with 

Customer Assistance Relationship and Education (CARE). CARE provides pre-filing 

taxpayer assistance and education.

• Taxpayer Communication and Education researches customer needs; develops and 

manages educational programs; establishes partnerships with stakeholder groups; and 

disseminates tax information to taxpayers and the general public through a variety of 

media, including publications and mailings, websites, broadcasting, and advertising. 

• Media and Publications develops and produces notices, forms, and publications for 

printed and electronic tax materials, and provides media production services to 

taxpayers.

• Taxpayer Advocacy provides advocate services to taxpayers by identifying the 

underlying causes of taxpayer problems and participating in the development of 

systematic and/or procedural remedies.

• Account Management and Assistance – Field Assistance provides face-to-face 

assistance, education, and compliance services to taxpayers. It includes return 

preparation, answering tax questions, resolving account and notice inquiries, and 

supplying forms and publications to taxpayers. 

• Taxpayer Advocate Case Processing provides advocate services to taxpayers to 

resolve taxpayer problems through prompt identification, referral, and settlement. 

• W&I HQ Management and Administration provides staffing, training, and direct 

support for Wage and Investment management activities of strategic planning, 

communications and liaison, finance, human resources, equity, diversity and inclusion, 

business modernization, and embedded training. 

• National Distribution Center processes orders for IRS forms and publications received 

from individual taxpayers, tax practitioners, and IRS tax return preparation partners. 

Description of Performance 

In FY 2015, the IRS timely delivered 89 percent (97 out of 109) of the Critical Individual 

Filing Season Tax Products to the public by the fifth workday of January. The Tax Increase 

Prevention Act of 2014; the Tax Technical Corrections Act of 2014; and the Achieving a 

Better Life Experience (ABLE) Act of 2014, were enacted on December 19, 2014, and had 

major implications and directly impacted reaching the FY 2015 goal of 95 percent. While 

89 percent of the tax products were made available to the public by January 8, 2015 date, 

93 percent (101 of 109) of them were available to the public by the January 20th filing season 

start date. While IRS cannot control the timeliness of tax-related legislation, procedures are 

in place to mitigate the impact of late legislation. For example, in early January 2015, a Joint 

Committee on Taxation report, identified 52 tax provisions that expired on 
IRS - 59 

December 31, 2014 that may be extended by legislation before the start of the 2016 filing 

season. The IRS plans to implement its “best practice” of reserving lines on tax returns in 

advance of anticipated extended legislation for the coming year. Reserving lines provides 

flexibility and expedites the process for implementing legislative changes due to extenders 

rather than initiating new development at the end of the tax year. The practice also allows for 

the most productive and efficient use of resources. IRS will continue to release products not 

affected by legislation early to devote more time to analyze, develop, and post or print the tax 

products affected by late changes to legislation. To achieve future targets IRS will continue 

to employ this strategy. In FY 2016 and FY 2017, the IRS will lower the target to 87 percent 

due to anticipated legislation passed late in the year that will impact form and product 

development. 

In FY 2015, the IRS Timeliness of Critical Tax Exempt and Government Entities (TE/GE) 

and Business Filing Season Tax products to the Public was 92.6 percent (151 of 163), falling 

short of the FY 2015 target of 95 percent. As discussed above, the passage of late legislation 

negatively impacted reaching the year-end target. To ensure meeting future targets, the IRS 

will plan, monitor, and coordinate all product development and delivery activities. The IRS 

will also continue to evaluate its processes so that mitigation strategies can be implemented 

quickly, as necessary. In FY 2016 and FY 2017, the IRS will lower the target to 87 percent 

for providing Critical TE/GE and Business Tax Products to the Public due to anticipated 

legislation passed late in year.

Taxpayer Self-Assistance Rate reached 88.7 percent through FY 2015, exceeding the 

FY 2014 rate of 84.7 percent and the FY 2015 target of 85 percent. This increase is primarily 

attributed to a 28 percent increase in web services including significantly more taxpayers 

using the Where’s My Refund? application to request the status of their refund. Self-Service 

channels continue to experience an increase in demand due to shifting customer preferences 

as more taxpayers choose to use automated applications to resolve issues and questions 

instead of traditional methods of contacting the IRS including telephone and written 

correspondence or walk-in visits to Taxpayer Assistance Centers. In FY 2016 and FY 2017, 

the IRS is devoting substantial resources to bolster traditional methods in order to better meet 

demand. Through continued use of automation, the IRS expects to achieve the FY 2016 goal 

of 90 percent and FY 2017 target of 89 percent. The IRS will continue to look for new 

applications that support the needs of the taxpayer as well as its ability to manage resources 

efficiently as possible in order to meet all future goals.
IRS - 60 

 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Pre-Filing Taxpayer Assistance & Education FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 5,499 $629,920

FY 2016 Administrative Provision 113

Improve Taxpayer Service

Cyber Security

Strengthening the Prevention of Identity Theft

FY 2016 Enacted 5,499 $629,920

Changes to Base:

Maintaining Current Levels (MCLs): $9,776

Pay Annualization 1,817

Pay Raise 6,729

Non-Pay 1,230

Efficiencies/Savings: -

Increase e-File Savings -

Subtotal FY 2017 Changes to Base $9,776

FY 2017 Current Services (Base)1 5,499 $639,696

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the 

Affordable Care Act

Leverage New Technologies to Advance the IRS Mission

Improve Taxpayer Service 14 1,482

Subtotal 14 $1,482

Drive More Agility and Efficiency in IRS Operations

Enterprise Electronic Records Management Solution

Subtotal

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 18 2,019

Subtotal 18 $2,019

Subtotal FY 2017 Budget Request Program Increases 32 $3,501

Total FY 2017 Total Budget Request 5,531 $643,197

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 32 $13,277

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.58% 2.11%
IRS - 61 

3.1.1 – Budget and Performance Report and Plan 

3B – Filing and Account Services ($1,763,121,000 in direct appropriations, an estimated 

$36,382,000 from reimbursable programs, and an estimated $113,455,000 from user fees): 

This budget activity funds programs that provide filing and account services to taxpayers, 

process paper and electronically-submitted tax returns, issue refunds, and maintain taxpayer 

accounts. The IRS continues to make progress in decreasing paper returns and increasing the 

use of electronic filing and payment methods. The program activities include the following: 

• Filing and Account Services Management administers filing and account services 

programs. 

• Submission Processing processes paper and electronically submitted tax returns and 

supplemental documents, accounts for tax revenue, processes information documents, 

and issues refunds and tax notices. 

• Account Management and Assistance – Electronic/Correspondence Assistance

provides education and assistance to taxpayers and resolves accounts and notice 

inquiries through telephone, paper, and internet correspondence. 

• Electronic Products and Services Support provides centralized operations and support 

capabilities for the IRS suite of electronic products, including e-help desk, technology 

support, and operations support. 

• Electronic Tax Administration (ETA) markets and administers electronic tax 

administration products and services. 

• Business Performance Lab recommends and manages systemic solutions for the 

detection and treatment of improper refunds while ensuring effective treatment for 

payment of valid refund claims, leads the development of innovative business 

processes and technology solutions and represents Return Integrity & Compliance 

Services (RICS) interest in support of the service-wide revenue protection strategy. 

Dollars in Thousands

Pre-Filing Taxpayer Assistance & Education FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $679,924 $678,204 $625,189 $605,761 $610,496 $621,516 $629,920 $643,197

Reimbursable Resources2 862 1,135 96 46 51 79 83

User Fees2 5,514 22,460 6,400 22,400 4,141 11,039 3,386

Budget Activity Total $686,300 $679,339 $647,745 $612,161 $632,942 $625,708 $641,038 $646,666 1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Pre-Filing Taxpayer Assistance & Education FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measure Actual Actual Actual Actual Actual Actual Target Target Target

Timeliness of Critical Filing Season Tax Products to the 

Public (Ot) 95.3% 96.3% 97.2% 58.9% 99.1% 89.0% 95.0% 87.0% 87.0%

Timeliness of Critical TE/GE & Business Tax Products to 

the Public (Ot) 97.7% 96.4% 94.5% 83.6% 98.7% 92.6% 95.0% 87.0% 87.0%

Taxpayer Self-Assistance Rate (E) (L) 64.4% 70.1% 78.5% 83.3% 84.7% 88.7% 85.0% 90.0% 89.0%

Pre-Filing Taxpayer Assistance & Education Budget and 

Performance Plan

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and L - Long Term Goal
IRS - 62 

• Pre-Refund provides coordination support for the pre-refund activities to ensure timely 

issuance of refunds and credits that are legally due to taxpayers.

• Joint Operations Center (JOC) provides service, support, and technology for 

telephone, correspondence, and electronic media inquiries; real time monitoring and 

routing of inbound calls; monitoring of Customer Service Representative accuracy; 

and management of the enterprise telephone database.

Description of Performance 

Millions of individual and business taxpayers file their returns electronically. In FY 2015, the 

IRS achieved an 85.3 percent individual e-file rate and a 47 percent business e-file rate. Both 

the individual and business e-file rates exceed the FY 2015 targets. The overall benefits of 

e-file (i.e. faster refunds, greater accuracy, secure and confidential submission, quick 

confirmation, and the ability to file online) continue to drive performance. The IRS is also 

promoting the benefits of e-filing via social media. The IRS will increase the individual 

e-filing target to 86 percent for FY 2016 and FY 2017 and the business e-filing target will 

increase to 48 percent for FY 2016 and FY 2017. IRS will continue to process individual and 

business returns as efficiently as possible to meet future plans. 

In FY 2015, Customer Accuracy – Tax Law was at 95 percent, exceeding the target of 

92 percent. IRS will continue to monitor results through data driven analysis of reports 

obtained from Embedded Quality Review System (EQRS) to ensure achievement of the 

FY 2016 goal. The IRS will continue to hold weekly conference calls to discuss quality 

defects/errors and procedures to ensure the target is met. For FY 2016 and FY 2017, the IRS 

will keep the tax law accuracy targets at 92 percent, as responding to legislative changes in 

tax laws will continue to be a major challenge moving forward.

In FY 2015, the IRS correctly answered 95.5 percent of account questions via the telephone, 

exceeding the target of 94 percent. The IRS expects to maintain high performance on the 

Customer Accuracy – Accounts (Phones) and will achieve the FY 2016 and FY 2017 target of 

94 percent through ongoing efforts to focus on promoting coding consistency of product 

reviews and providing training to managers and employees to ensure quality service. 

In FY 2015, the IRS Customer Contacts Resolved per Staff Year reached 26,245, exceeding 

last year’s result and the FY 2015 target of 21,000. This measure includes activities such as 

automated and assistor calls answered and web services completed. The increase is attributed 

to a 28 percent increase in web usage including a significant jump in Where’s My Refund?

usage. The FY 2016 target is set at 28,000 with an expected increase in web usage. The 

FY 2017 target is set at 25,700, as IRS expects more employee assisted calls. To achieve 

these targets, the IRS will continue to provide efficient responses to customer contacts with 

the resources available and provide more self-service applications on IRS.gov. 

In FY 2015, the Customer Service Representative Level of Service (LOS) was 38.1 percent, 

exceeding the FY 2015 target of 38.0 percent. Additional funding provided in FY 2016, and 

supplemented with user fees, will allow the IRS to achieve a projected LOS of 47.0 percent 

for the full year, including 65.0 percent LOS during filing season. The FY 2017 Budget, 

supplemented with approximately $100 million in user fees, provides sufficient funding to 
IRS - 63 

achieve a projected 70.0 percent LOS for the full year including filing season. Sustained 

reductions in funding have led to a long-term decline in LOS. In FY 2015, low LOS, coupled 

with limited telephone port capacity, led to a higher demand than could be adequately 

handled. When demand exceeds available system capacity, callers are disconnected. These 

Courtesy Disconnects increased 1,162 percent in FY 2015 compared to FY2014 (17.7 million 

vs. 1.4 million). Weather related closures during the second quarter and several system 

outages in the third quarter caused a 162 percent increase in emergency closure messages. 

Refund timeliness is defined as the percentage of paper refunds issued within 40 days or less. 

In FY 2015, Refund Timeliness reached 98.8 percent, exceeding the FY 2015 target of 

94 percent as the number of paper refunds continued to decline. There was a 7.5 percent 

decrease in the number of paper refunds compared to the same period in FY 2014. IRS will 

continue to monitor IMF return cycles and inventories through various reports and production 

meetings to ensure this target is met. For FY 2016 and FY 2017, the IRS expects to achieve a 

target of 97 percent. 
IRS - 64 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Filing and Account Services FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 22,388 $1,526,634

FY 2016 Administrative Provision 113 2,483 $176,822

Improve Taxpayer Service 2,483 176,622

Cyber Security

Strengthening the Prevention of Identity Theft 200

FY 2016 Enacted 24,871 $1,703,456

Changes to Base:

Maintaining Current Levels (MCLs): $23,670

Pay Annualization 4,623

Pay Raise 17,127

Non-Pay 1,920

Efficiencies/Savings: (72) ($3,708) 

Increase e-File Savings (72) (3,708) 

Subtotal FY 2017 Changes to Base (72) $19,962

FY 2017 Current Services (Base)1 24,799 $1,723,418

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the 

Affordable Care Act

Leverage New Technologies to Advance the IRS Mission

Improve Taxpayer Service 590 32,021

Subtotal 590 $32,021

Drive More Agility and Efficiency in IRS Operations

Enterprise Electronic Records Management Solution

Subtotal

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 136 7,682

Subtotal 136 $7,682

Subtotal FY 2017 Budget Request Program Increases 726 $39,703

Total FY 2017 Total Budget Request 25,525 $1,763,121

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 654 $59,665

Percent Change FY 2017 Budget Request over FY 2016 Enacted 2.63% 3.50%
IRS - 65 

3.1.2 – Budget and Performance Report and Plan 

Filing and Account Services FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $1,614,418 $1,630,549 $1,614,514 $1,529,792 $1,546,058 $1,565,038 $1,703,456 $1,763,121

Reimbursable Resources2 21,993 27,857 20,759 37,535 28,555 30,147 34,650 36,382

User Fees2 115,998 128,966 152,136 184,599 160,342 40,553 92,457 113,455

Budget Activity Total $1,752,409 $1,787,372 $1,787,409 $1,751,926 $1,734,955 $1,635,738 $1,830,563 $1,912,958

1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Filing and Account Services FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measures Actual Actual Actual Actual Actual Actual Target Target Target

Percent Individual Returns Processed Electronically (Oe) (L 69.3% 76.9% 80.5% 82.5% 84.1% 85.3% 84.6% 86.0% 86.0%

Percent of Business Returns Processed Electronically (Oe) 25.5% 31.8% 36.7% 40.2% 43.1% 47.0% 46.5% 48.0% 48.0%

Customer Accuracy - Tax Law (Phones) (Ot) 92.7% 93.4% 93.2% 95.7% 95.0% 95.0% 92.0% 92.0% 92.0%

Customer Accuracy - Accounts (Phones) (Ot) 95.7% 96.0% 95.6% 96.0% 96.2% 95.5% 94.0% 94.0% 94.0%

Customer Contacts Resolved per Staff Year (E) 10,744 12,419 16,320 20,767 21,018 26,245 21,000 28,000 25,700

Customer Service Representative Level of Service (Oe) (L) 74.0% 70.1% 67.6% 60.5% 64.4% 38.1% 38.0% 47.0% 70.0%

Refund Timeliness - Individual (Paper) (Ot) 96.1% 99.4% 99.7% 99.0% 98.7% 98.8% 94.0% 97.0% 97.0%

Cost per Taxpayer Served ($) (HCTC) (E) $9.52 $12.36 $14.43 $13.41 N/A N/A N/A N/A N/A

Sign-up Time (Days) - Customer Engagement (HCTC) (Ot) 124.0 117.0 116.0 125.2 N/A N/A N/A N/A N/A

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

Filing and Account Services Budget and Performance Plan

Dollars in Thousands

IRS - 66 

Enforcement 

Appropriation Description

The Enforcement appropriation provides funding for the examination of tax returns, both 

domestic and international; administrative and judicial settlement of taxpayer appeals of 

examination findings; technical rulings; monitoring of employee pension plans; determination 

of qualifications of organizations seeking tax-exempt status; examination of tax returns of 

exempt organizations; enforcement of statutes relating to detection and investigation of 

criminal violations of the internal revenue laws; identification of underreporting of tax 

obligations; securing of unfiled tax returns; and collection of unpaid accounts. 

The Enforcement budget request for FY 2017 is $4,984,919,000 in direct appropriations and 

39,141 FTE. This is an increase of $119,983,000, or 2.47 percent, and 301 FTE more than the 

FY 2016 Enacted level of $4,864,936,000 and 38,840 FTE. The total Enforcement budget 

request including the program integrity cap adjustment is $5,216,263,000 and 41,028 FTE. 

The performance measures reflected in the Enforcement appropriation support and align to 

Goal 3: Fairly and effectively reform and modernize federal financial management, 

accounting, and tax systems, Objective 3.3: Pursue tax reform, implement the Patient 

Protection and Affordable Care Act and Foreign Account Tax Compliance Act, and improve 

the execution of the tax code of the Department of the Treasury’s FY 2014 – FY 2017 

Strategic Plan. 
IRS - 67 

2.1 – Budget Adjustments Table

Dollars in Thousands

Enforcement FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 38,840 $4,860,000

FY 2016 Administrative Provision 113 $4,936

Strengthening the Prevention of Identity Theft 4,936

FY 2016 Enacted 38,840 $4,864,936

Changes to Base:

Maintaining Current Levels (MCLs): $75,008

Pay Annualization 14,952

Pay Raise 55,386

Non-Pay 4,670

Subtotal FY 2017 Changes to Base $75,008

FY 2017 Current Services (Base) 38,840 $4,939,944

Program Increases:

Budget Request Program Increases:

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 301 44,975

Subtotal 301 $44,975

Subtotal FY 2017 Budget Request Program Increases 301 $44,975

Total FY 2017 Total Budget Request 39,141 $4,984,919

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 301 $119,983

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.78% 2.47%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Enterprise Case Management 22 7,369

Subtotal 22 $7,369

Understand Non-Compliant Taxpayer Behavior and Develop 

Approaches to Deter and Change It

Increase Collection Coverage 678 58,213

Increase Audit Coverage 816 74,161

Digitizing Form 990 1 80

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance 203 49,889

Pursue Employment Tax and Abusive Tax Schemes 37 7,210

Increase Investigations of Transnational Organized Crime (TOC) 130 29,422

Subtotal 1,865 $218,975

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activ 5,000

Subtotal $5,000

Subtotal FY 2017 Cap Adjustment Program Increases 1,887 $231,344

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 2,188 $276,319

Total FY 2017 Total Budget Request Including Cap Adjustment 41,028 $5,216,263

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 2,188 $351,327

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 5.63% 7.22%
IRS - 68 

2.2 – Operating Levels Table

Dollars in Thousands

Enforcement

Object Classification

FY 2015

Actual

FY 2016

Enacted

FY 2017

Request

11.1 Full-Time Permanent Positions 3,238,319 3,231,404 3,411,336

11.3 Other than Full-Time Permanent Positions 31,184 32,727 33,235

11.5 Other Personnel Compensation 99,942 114,087 124,871

11.8 Special Personal Services Payments 22,642 15,678 15,921

11.9 Personnel Compensation (Total) 3,392,087 3,393,896 3,585,363

12.0 Personnel Benefits 1,133,218 1,131,180 1,202,298

13.0 Benefits to Former Personnel 1

Total Personnel and Compensation Benefits $4,525,306 $4,525,076 $4,787,661

21.0 Travel 60,041 66,676 98,152

22.0 Transportation of Things 7,198 9,060 16,591

23.1 Rental Payments to GSA 11 30 31

23.2 Rent Payments to Others 472 411 491

23.3 Communications, Utilities, & Misc 2,493 2,708 3,050

24.0 Printing & Reproduction 2,221 2,822 3,080

25.1 Advisory & Assistance Services 65,721 147,319 157,580

25.2 Other Services 29,396 48,219 65,059

25.3 Purchase of Goods & Services from Govt. Accounts 45,123 37,984 40,799

25.4 Operation & Maintenance of Facilities 20 17 18

25.5 Research & Development Contracts 2,462 1,555 1,576

25.6 Medical Care 67 43 44

25.7 Operation & Maintenance of Equipment 533 1,940 6,047

25.8 Subsistence & Support of Persons 735

26.0 Supplies and Materials 15,814 14,888 18,473

31.0 Equipment 6,713 2,409 13,228

32.0 Land and Structures 13 12 12

42.0 Insurance Claims & Indemnities 528 764 774

91.0 Unvouchered 2,696 3,003 3,597

Total Non-Personnel $242,257 $339,860 $428,602

New Appropriated Resources $4,767,563 $4,864,936 $5,216,263

Budget Activities:

Investigations 601,665 604,620 714,208

Exam & Collections 4,018,292 4,108,566 4,347,684

Regulatory 147,606 151,750 154,371

New Appropriated Resources $4,767,563 $4,864,936 $5,216,263

FTE 39,708 38,840 41,028
IRS - 69 

2.3 – Appropriation Detail Table 

3C – Investigations ($714,208,000 in direct appropriations and an estimated $45,789,000 

from reimbursable programs): This budget activity funds the Criminal Investigation (CI) 

programs that explore potential criminal and civil violations of tax laws, enforce criminal 

statutes relating to violations of tax laws and other financial crimes, and recommend 

prosecution as warranted. The program activities include the following: 

• General Management and Administration supports the headquarters management 

activities of strategic planning, communications, finance, and human resources for 

CI activities.

• Criminal Investigations supports the enforcement of criminal statutes relating to 

violations of internal revenue laws and other financial crimes. CI investigates cases of 

suspected intent to defraud that involve both legal and illegal sources of income and 

recommends prosecution as warranted. This activity includes the investigation and 

prosecution of tax and money-laundering violations associated with narcotics 

organizations. 

• Criminal Tax Legal Support provides legal advice and support from IRS Counsel to 

CI.

• International Investigations supports enforcement of violations involving U.S. 

Citizens residing abroad, non-resident aliens, expatriates, and investigations involving 

other international issues, including legal support (e.g., Foreign Tax Credit and 

Foreign Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.).

Dollars in thousands

Enforcement

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources: 2

Investigations 3,399 $601,665 3,425 $604,620 3,849 $714,208 424 $109,588 12.38% 18.13%

Exam and Collections 35,258 4,018,292 34,402 4,108,566 36,163 4,347,684 1,761 239,118 5.12% 5.82%

Regulatory 1,051 147,606 1,013 151,750 1,016 154,371 3 2,621 0.30% 1.73%

Subtotal New Appropriated Resources 39,708 $4,767,563 38,840 $4,864,936 41,028 $5,216,263 2,188 $351,327 5.63% 7.22%

Other Resources:

Reimbursables 56 30,960 59 44,973 62 47,222 3 2,249 5.08% 5.00%

Offsetting Collections - Non Reimbursables 11 10,314 12 42,797 12 44,937 2,140 5.00%

User Fees 86 18,485 116 10,151 116 14,594 4,443 43.77%

Recovery from Prior Years

Unobligated Balances from Prior Years 284 22,883 17,741 30,147 12,406 69.93%

Transfers In/Out 3

7 (5,000) (5,000)

Resources from Other Accounts 4

3 2 2

Subtotal Other Resources 440 $82,649 189 $115,662 192 $131,900 3 $16,238 1.59% 14.04%

Total Budgetary Resources 40,148 $4,850,212 39,029 $4,980,598 41,220 $5,348,163 2,191 $367,565 5.61% 7.38%

Change % Change

FY 2015

Actual

FY 2016

Enacted 1

FY 2017

Request

FY 2016 to FY 

2017 Request

1

FY 2016 Enacted includes $4.9 million in Section 113 Administrative Provision funding for Enforcement.

2

This includes the Program Integrity Cap Adjustment.

3

Resources from Transfers In/Out include a FY 2015 transfers between IRS and the Office of National Drug Control Policy (ONDCP) High Intensity Drug 

Trafficking Area (HIDTA) Program (obligations $7K), and a 2017 transfer out to the Alcohol and Tobacco Tax and Trade Bureau (TTB) ($5M).

4

Resources from Other Accounts include Other Direct FTE funded by the Federal Highway Administration (3 FTE projected for FY 2015, and 2 FTE projected for 

FY 2016 and FY 2017).

FY 2016 to FY 

2017 Request
IRS - 70 

Description of Performance 

Criminal Investigations (CI) serves the American public by investigating potential criminal 

violations of the Internal Revenue Code and related financial crimes in a manner that fosters 

confidence in the tax system and compliance with the law. The following measures are used 

to evaluate the success of achieving its mission. 

In FY 2015, results for criminal investigation completions are 18.1 percent above the year-end 

target (3,800) and reflect a 2.6 percent decrease compared to FY 2014. Results exceeded the 

target mostly due to a higher than expected number of multi-defendant narcotics related 

investigations, which were initiated and completed earlier in FY 2015. Overall performance 

in FY 2015 was impacted by a significant decrease in the number of Special Agents in recent 

years as well as a re-focus on more complex tax case programs, which take longer to 

complete, and on inventory still in the judicial process. To re-focus, the Chief of CI wrote a 

letter to all U.S. Attorney Offices describing the overall decrease in staffing and the reduction 

of resources in several program areas as well as the need for IRS-CI to concentrate on core tax 

cases, as IRS CI is the only agency with jurisdiction over tax crimes. 

CI’s continued significant attrition in FY 2015 coupled with little to no hiring authority in FY 

2016 will continue to negatively impact the number of completions for FY 2016 and FY 

2017. CI utilized its performance projection model to establish its FY 2016 and FY 2017 

year-end targets. This project model accounts for attrition, average cases per case-working 

agent, projected case initiations and average time to complete cases. Accumulated impact of 

minimal hiring in fiscal years prior to FY 2016, which led to lower staffing, case initiations

and inventories, negatively influenced the performance project model for future years. The 

additional special agent hiring under the FY 2017 budget request will have minimal impact on 

CI’s performance until at least FY 2018 or FY 2019 due to the length of special agent law 

enforcement training (6 months) and average case cycle time (300-400 days). CI will 

continue to utilize proven case development strategies, expand case development efforts, and 

leverage interagency partnerships to identify, initiate, and complete significant criminal 

investigations in all program areas to meet the FY 2016 target of 3,800 and the FY 2017 

target of 3,600. 

In FY 2015, results for the number of convictions are 6.6 percent above the year-end target 

(2,700) and reflect a 7.4 percent decrease compared to FY 2014. A large number of quality 

investigations initiated and completed in previous years (many of which were ID Theft cases) 

continue to be processed by the Department of Justice (DOJ). Recent decreases to the 

Judicial Process (pipeline) inventory will have an impact on the number of convictions in 

future years as well as the approximately 15 percent decrease in open inventory in FY 2015 (a 

decline of over 600 cases). Additional factors such as unforeseen legislative and prosecutorial 

priorities will also have an impact on future performance. CI management will continue to 

ensure appropriate and consistent contact with DOJ Tax Division and U.S. Attorney Offices 

regarding prosecutorial priorities and appropriate movement of pipeline investigations to meet 

the FY 2016 target of 2,500 and the FY 2017 target of 2,400. 

In FY 2015, conviction rate is slightly lower (0.17 percent) than FY 2014 and 1.3 percent 

above the year-end target (92 percent). Acquittals and dismissals decreased by 32 percent and 
IRS - 71 

1.5 percent, respectively, compared to FY 2014. Appropriate case selection and effective field 

performance continue to positively impact the number of cases resulting in convictions. Since 

CI does not prosecute its own cases, it must depend on the ability of DOJ to accept its cases 

for prosecution and move such cases through the courts. CI management will continue its 

current efforts of appropriate and consistent contact with DOJ Tax Division and U.S. Attorney 

Offices regarding prosecutorial priorities and appropriate movement of pipeline 

investigations, to ensure a high rate of conviction and meet the FY 2016 and FY 2017 target 

of 92 percent. 

The Conviction Efficiency Rate is determined by taking the cost of the CI program divided by 

the number of convictions. FY 2015 results ($221,782) are 8.7 percent better than the 

year-end target ($243K) and 4.0 percent better compared to FY 2014. CI's overall financial 

plan and FTEs (which contribute to the numerator) decreased by 2.8 percent and 7.7 percent

respectively, compared to FY 2014. CI will continue to monitor its budget and coordinate 

with DOJ Tax Division and U.S. Attorney Offices regarding prosecutorial priorities - which 

affect convictions - to ensure this measure is at or below future target. CI expects to meet the 

FY 2016 and FY 2017 target of $272,000. 
IRS - 72 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Investigations FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 3,425 $604,620

FY 2016 Administrative Provision 113

FY 2016 Enacted 3,425 $604,620

Changes to Base:

Maintaining Current Levels (MCLs): $9,311

Pay Annualization 1,817

Pay Raise 6,730

Non-Pay 764

Subtotal FY 2017 Changes to Base $9,311

FY 2017 Current Services (Base) 3,425 $613,931

Program Increases:

Budget Request Program Increases:

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 208 39,106

Subtotal 208 $39,106

Subtotal FY 2017 Budget Request Program Increases 208 $39,106

Total FY 2017 Total Budget Request 3,633 $653,037

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 208 $48,417

Percent Change FY 2017 Budget Request over FY 2016 Enacted 6.06% 7.89%

Cap Adjustment Program Increases:

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage

Increase Audit Coverage

Digitizing Form 990

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non- 51 19,837

Pursue Employment Tax and Abusive Tax Schemes 35 6,912

Increase Investigations of Transnational Organized Crime (TOC) 130 29,422

Subtotal 216 $56,171

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities 5,000

Subtotal $5,000

Subtotal FY 2017 Cap Adjustment Program Increases 216 $61,171

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 424 $100,277

Total FY 2017 Total Budget Request Including Cap Adjustment 3,849 $714,208

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 424 $109,588

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 12.37% 18.13%
IRS - 73 

3.1.3 – Budget and Performance Report and Plan 

3D – Exam and Collections ($4,347,684,000 in direct appropriations, $606,000 from 

reimbursable program, and an estimated $574,000 from user fees): This budget activity 

funds programs that enforce the tax laws and increase compliance through examination and 

collection programs that ensure proper payment and tax reporting. This budget activity also 

includes campus support of the Questionable Refund program and appeals and litigation 

activities associated with exam and collection. The program activities include the following: 

• Compliance Services Management supports management associated with exam and 

collection program activities.

• Payment Compliance – Correspondence Collection supports IRS collection activities 

by initiating contact and collecting delinquent taxpayer liabilities through written 

notices and other means. 

• Automated Collections and Support initiates contact and collects delinquent taxpayer 

liabilities through the centralized Automated Collection System (ACS). 

• Payment Compliance – Field Collection conducts field investigations and collection 

efforts associated with delinquent taxpayer and business entity liabilities, including 

direct taxpayer contact and outreach programs to protect the interest of the federal 

government in delinquent tax liability situations.

• Tax Reporting Compliance – Document Matching supports the Automated 

Underreporter (AUR), Combined Annual Wage Reporting (CAWR), Federal 

Unemployment Tax Act (FUTA), and other Document Matching Programs. 

• Tax Reporting Compliance – Electronic/Correspondence Exam initiates written 

correspondence with taxpayers related to tax issues arising from claims on their tax

returns.

• Tax Reporting Compliance – Field Exam compares taxpayer income levels and 

corresponding tax liabilities to ensure the accuracy of taxpayer returns.

Investigations FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $639,363 $644,479 $636,386 $589,751 $599,193 $602,144 $604,620 $714,208

Reimbursable Resources2 67,549 63,146 56,895 28,582 27,133 29,957 43,608 45,789

User Fees2 6,935 4,709

Budget Activity Total $706,912 $707,625 $700,216 $623,042 $626,326 $632,101 $648,228 $759,997 1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Investigations FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measures Actual Actual Actual Actual Actual Actual Target Target Target

Criminal Investigations Completed (Ot) (L) 4,325 4,697 4,937 5,557 4,606 4,486 3,800 3,800 3,600

Number of Convictions (Oe) (L) 2,184 2,350 2,634 3,311 3,110 2,879 2,700 2,500 2,400

Conviction Rate (Oe) (L) 90.2% 92.7% 93.0% 93.1% 93.4% 93.2% 92.0% 92.0% 92.0%

Conviction Efficiency Rate ($) (E) (L) $324,776 $310,029 $270,511 $211,048 $231,103 $221,782 $243,000 $272,000 $272,000

Investigations Budget and Performance Plan

Dollars in Thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, L - Long Term 
IRS - 74 

• Fraud/Bank Secrecy Act assists and supports compliance employees IRS-wide in 

protecting the integrity of the U.S. tax administration system. The Bank Secrecy Act 

Program examines non-bank financial institutions and nonfinancial trades and 

businesses for compliance with the anti-money laundering provisions of the Bank 

Secrecy Act of 1970 (BSA) and the USA PATRIOT Act of 2001. It processes and 

provides customer support for Reports of Foreign Bank and Financial Accounts 

(FBARs) and Form 8300, Report of Cash Payments Over $10,000 Received in a Trade 

or Business. The National Fraud Program provides oversight and direction for fraud 

policy and operations IRS-wide.

• Appeals supports an administrative review process that provides a channel for 

impartial case settlement before a case is docketed in a court of law.

• Litigation provides legal support for the IRS in litigation of cases, including 

interpretation of the tax law.

• Specialty Programs – Exams examines federal tax returns of businesses and 

individuals responsible for the filing and payment of employment, excise, estate, and 

gift taxes.

• International Collection supports international field collection efforts associated with 

delinquent taxpayer and business entity liabilities from U.S. Citizens residing abroad, 

non-resident aliens, expatriates, and those involving other international issues 

(e.g., Foreign Tax Credit and Foreign Earned Income Exclusion). 

• International Exams supports the international exam program involving U.S. Citizens 

residing abroad, non-resident aliens, expatriates, and other examinations involving 

other international issues including legal support (e.g., Foreign Tax Credit and Foreign 

Earned Income Exclusion, Corporations, Non-Profits, Pension Plans, etc.).

• Unit General Management and Administration provides staffing, training, and direct 

support for headquarters management activities of strategic planning, communication 

and liaison, finance, human resources, equity, diversity and inclusion, business system 

planning, and embedded training.

• EITC Management and Administration supports headquarters management associated 

with administering the Earned Income Tax Credit (EITC) program IRS-wide. 

• Integrity & Verification Operations supports IRS civil fraud detection and prevention 

efforts in a pre-refund environment including monitoring program performance and 

developing policy and procedures and guidance for processing civil revenue protection 

programs(s).

• ID Theft Victim Assistance was recently reorganized to consolidate nearly all identity 

theft work into one IRS program. This program activity has end-to-end responsibility 

and accountability for identity theft victim assistance, including policy and operations, 

which includes paper inventories from tax-related ID theft, the Identity Theft 

Protection Specialized Unit (IPSU) and Return Preparer Misconduct. 

• Accounts Management Taxpayer Assurance Program provides support to Accounts 

Management for the review of questionable refunds including Identity Theft functions. 
IRS - 75 

• Whistleblower Office provides staffing, training, and direct support to process, assess, 

and analyze tips from individuals who identify potential tax problems. 

• Communications and Liaison coordinates local government and liaison relationships; 

manages congressional, state, and national stakeholder relationships and issues; 

coordinates crosscutting issues, including audit management and legislative 

implementation; manages national media contacts and local media relationships; and 

ensures IRS compliance with disclosure and privacy laws. 

Description of Performance - Exam

The Examination program provides taxpayers top quality service by helping them understand 

and meet their tax responsibilities and by applying the tax law with integrity and fairness. 

The performance goals that the IRS uses to gauge the Examination program’s performance 

are discussed below.

The IRS met its FY 2015 Individual Exam Coverage target of 0.8 percent. In FY 2015, there 

were approximately 14,400 fewer individual audits compared to FY 2014, a 1.2 percent 

decrease. The decrease in audits was due, in part, to the SBSE Compliance Realignment. 

IRS-wide emphasis is to continue monitoring base inventory levels and decrease cycle times 

through process improvements while focusing on improving quality. The IRS will reduce the 

coverage rate for FY 2016 to 0.6 percent, due to budget reductions necessitating a reduction in 

FTE through attrition. In order to mitigate this decrease, Examination will monitor starts and 

the mix of discretionary inventory more closely in FY 2016. The FY 2017 target is set at 0.7 

percent.

In FY 2015, the Field Exam National Quality Review Score is at 86.7 percent, falling short of 

the FY 2015 target of 89.6 percent. The decline in quality was driven by declines in 16 of the 

17 quality attributes. Beginning in FY 2016, Exam will hold bi-monthly calls to address 

developing issues with respect to the return preparer visits and to ensure all agents understand 

actions required of them. Attribute 112 (Required Filing Checks) is the only attribute to 

reflect improvement. The IRS expects to achieve a quality score of 86.7 percent in FY 2016 

and FY 2017. 

In FY 2015, Office Exam Quality is at 88.3 percent, falling short of the FY 2015 target of 

90.2 percent. The overall decline in quality was driven by declines in 14 of the 17 quality 

attributes. To assist examiners with documenting their audit activities, lead sheets for 

minimum income probes, required filing checks, and innocent spouse will be updated during 

FY 2016. The IRS expects to achieve its FY 2016 and FY 2017 target of 88.3 percent. Both 

the Field Exam National Quality Review and the Office Exam Quality continue to focus on 

reducing the leading errors in their two weakest attributes 510 (Time Span) and 112 (Required 

Filing Checks). 

The Examination Quality – Large Business measure is calculated through a review of a 

statistically valid random sample of closed Large Business Return cases. Case scores are 

based on the percentage of elements passed within each of the four audit standards (Planning; 

Inspection; Development; Work Papers and Reports). In FY 2015, Examination Quality – 

Large Business is 86 percent, 4 percentage points below the FY 2015 target of 90 percent. 
IRS - 76 

The 86 percent was a result of low scores in Standard 1 (Planning), Standard 2 (Inspection) 

and Standard 4 (Work papers and Reports). Actions currently underway to improve the score 

include direct feedback to Revenue Agents, outreach presenting the Quality Standards and 

ways to affect case quality improvement, conducting quarterly meetings to highlight and 

discuss actions for areas of improvement, and one-on-one report outs to Industry Analysts. 

The FY 2016 and FY 2017 target was set at 90 percent. 

The Examination Coverage – Business (Assets > $10 million) measure is calculated by taking 

the total number of Large Business & International (LB&I) returns with assets over 

$10 million (including all partnerships) examined and closed by LB&I during the current 

fiscal year, divided by total filings for the preceding calendar year. In FY 2015, Business 

Examination Coverage is 3.9 percent. While corporate closures are down slightly, 

S-Corporation and partnership closures are up 3.5 percent and 6.3 percent, respectively, 

compared to FY 2014. The IRS expects to achieve the FY 2016 target of 3.5 percent. The 

FY 2016 and FY 2017 targets were lowered to 3.5 percent and 3.2 percent, respectively, based 

on a reduction in FTE and as the IRS is projecting an increase in partnership returns filed. 

The Individual Exam Efficiency measure is calculated by taking the sum of all individual 

1040 return examinations and audit reconsideration cases divided by the total staff years 

expended in relation to those individual 1040 returns. In 2015, Exam Efficiency - Individual 

is 148, exceeding the FY 2015 target of 135. SBSE Campus Exam realized greater efficiency 

due to changes in the processing of TEFRA inventory. The same level of efficiency gains is

not anticipated in FY 2016 2016 or FY 2017 due to a reduction in Exam FTE and efficiency 

adjustments based on workload considerations due to the reduction in staffing. The IRS 

expects to achieve the FY 2016 and FY 2017 target of 122, as the IRS expects new staff to 

require time for training before reaching full efficiency. 

The Automated Underreporter (AUR) Efficiency measure is calculated by taking the total 

number of W&I and SB/SE contact closures divided by the total FTEs, including overtime. 

AUR Efficiency is 2,209 through FY 2015, above the FY 2015 target of 2,032. While total 

AUR closures decreased 3.5 percent, total FTEs decreased at a much higher rate at 9.3 percent 

resulting in improved AUR efficiency compared to FY 2014 (2,209 vs. 1,935). SBSE 

Campus Automated Underreporter realized efficiency gains in FY 2015 from new processes 

put in place allowing work to close more quickly. The inclusion of the Premium Tax Credit 

(PTC) in FY 2016 will require manual calculations for a significant number of cases resulting 

in a lower projected number of closures next year compared to FY 2015. The IRS expects to 

achieve the FY 2016 target of 2,036. The FY 2017 target is set at 2,006, as new staff will not 

have an immediate impact on performance due to the need for training.

The AUR Coverage measure is calculated by taking the total number of contact closures 

divided by total prior calendar year individual filings. In FY 2015, AUR Coverage is 2.3 

percent and below the FY 2015 target of 2.6 percent. An overall decrease in FTE, caused by 

the inability to cover attrition loses throughout the year, resulted in fewer contact closures in 

FY 2015 than in previous years. Due to a shift in FTE and work streams and the additional 

resources needed to work ACA cases, SBSE lowered the Coverage targets for FY 2016 and 

FY 2017. The IRS expects to achieve the FY 2016 target of 2.2 percent and the FY 2017 

target of 2.3 percent. 
IRS - 77 

Description of Performance - Collection

The Collection program collects delinquent taxes, secures delinquent tax returns through the 

fair and equitable application of tax laws, and provides education to promote future 

compliance, thereby protecting and instilling public confidence in the American tax system. 

The performance goals that the IRS uses to gauge collection program performance are: 

The Collection Coverage measure is calculated by taking the total volume of collection work 

disposed divided by total collection work available. In FY 2015, Collection Coverage is 

46.3 percent, exceeding the FY 2015 target of 43.8 percent and last year’s performance of 

45.9 percent. The FY 2015 net dispositions increased 2.6 percent compared to FY 2014 

(23.62 million vs. 23.03 million). Beginning Inventory, New Issuance Receipts, and 

Reactivated Currently-Not-Collectable cases increased 1.3 percent, 1.8 percent, and 

57.6 percent, respectively, while Returned to Inventory cases decreased 2.7 percent compared 

to FY 2014. The IRS will continue to market and promote the use of the online Installment 

Agreement and Direct Pay tools available to taxpayers. The IRS expects to achieve the FY 

2016 target of 41.8 percent, as additional employees are hired to process a steady projected 

volume of available collection casework. The FY 2017 target is set at 41.1 percent, as new 

staff will not have an immediate impact on performance due to the need for training. 

The Collection Efficiency measure is calculated by dividing total collection case closures by 

the total number of FTEs devoted to working the closures. In FY 2015, Collection Efficiency 

is 2,448 exceeding the FY 2015 target of 2,173. The Collection Coverage measure was 

updated based on FY 2015 performance and the current disposition and inventory targets in 

the collection work plan for FY 2016 and FY 2017. The planned reduction in overall 

dispositions in FY 2016 is expected to have a negative impact, due to the lack of hiring, on 

overall Collection Coverage. Through planned improvements, including the realignment of 

the Collection function, IRS expects to achieve the FY 2016 target of 2,208 and the FY 2017 

target of 2,124, as new hires are brought on board and trained. 

The Field Collection Quality measure is the percentage of quality attributes reviewed by an 

independent quality reviewer that are determined to be correct. In FY 2015, the Field 

Collection National Quality Review Score is 79.2 percent, below the FY 2014 actual and 

behind the FY 2015 target of 81.6 percent. The shortfall in Field Collection Quality is 

primarily related to a decline in the timeliness attributes. This is largely a result of changing 

the training delivery method, due to budgetary considerations, from a traditional classroom 

format to a virtual setting, which resulted in delayed delivery. More than one third of the 

Field Revenue Officers (ROs) were off-line for almost two weeks and all ROs were off-line 

for another week due to training. This training interrupted case timeliness, resulting in missed 

follow-up deadlines. Timeliness was also impacted by the delayed movement of 100 ROs 

into the specialty programs necessitating reassignment of those inventories. In order to 

improve quality all Field Collection Areas developed and implemented action plans to ensure 

focus on workload management and case actions critical to timely case resolution. However, 

due to the timing of case closures and reviews, it could take up to ten months after 

implementation before the score results begin to reflect the benefit of these plans. With a 

continued emphasis on improving timeliness and the quality of work products, the IRS 

expects to achieve the FY 2016 and FY 2017 target of 79.7 percent.
IRS - 78 

The IRS achieved the FY 2015 Automated Collection System (ACS) Accuracy target of 

94.0 percent, reaching 95.3 percent. The ACS Accuracy measure reflects the percentage of 

correct responses from a weighted random sampling of calls selected for quality review by the 

Centralized Quality Review System (CQRS). SB/SE will continue to follow-up on quality 

action plans resulting from site visits. Monthly calls with the Quality staff will also continue 

to identify and discuss issues and trends affecting Customer Accuracy. Additionally, 

increased oversight will continue as former W&I sites transition into taking various SB/SE 

calls. The expectation is that this will help reduce Customer Accuracy errors and enable the 

FY 2016 and FY 2017 target of 95 percent to be achieved. 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Exam and Collections FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 34,402 $4,103,630

FY 2016 Administrative Provision 113 $4,936

Improve Taxpayer Service

Cyber Security

Strengthening the Prevention of Identity Theft 4,936

FY 2016 Enacted 34,402 $4,108,566

Changes to Base:

Maintaining Current Levels (MCLs): $63,349

Pay Annualization 12,655

Pay Raise 46,879

Non-Pay 3,815

Subtotal FY 2017 Changes to Base $63,349

FY 2017 Current Services (Base) 34,402 $4,171,915

Program Increases:

Budget Request Program Increases:

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 92 5,699

Subtotal 92 $5,699

Subtotal FY 2017 Budget Request Program Increases 92 $5,699

Total FY 2017 Total Budget Request 34,494 $4,177,614

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 92 $69,048

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.27% 1.68%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Enterprise Case Management 22 7,369

Subtotal 22 $7,369

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage 677 58,185

Increase Audit Coverage 815 74,086

Digitizing Form 990 1 80

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance 152 30,052

Pursue Employment Tax and Abusive Tax Schemes 2 298

Subtotal 1,647 $162,701

Subtotal FY 2017 Cap Adjustment Program Increases 1,669 $170,070

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 1,761 $175,769

Total FY 2017 Total Budget Request Including Cap Adjustment 36,163 $4,347,684

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 1,761 $239,118

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 5.12% 5.82%
IRS - 79 

3.1.4 – Budget and Performance Report and Plan 

3E – Regulatory ($154,371,000 in direct appropriations, $827,000 from reimbursable 

programs, and an estimated $14,020,000 from user fees): This budget activity funds the 

development and printing of published IRS guidance materials; interpretation of tax laws; 

internal advice to IRS on general non-tax legal issues; enforcement of regulatory rules, laws, 

and approved business practices; and support for taxpayers in the areas of pre-filing 

agreements, determination letters, and advance pricing agreements. The activities include: 

• Tax Law Interpretation and Published Guidance interprets the tax law through 

published guidance, technical advice, and other technical legal services. 

• General Legal Services provides advice to the IRS on non-tax legal issues, including 

procurement, personnel, labor relations, equal employment opportunity, fiscal law, tort 

claims and damages, ethics, and conflict of interest. 

• Rulings and Agreements applies the tax law to specific taxpayers in the form of

pre-filing agreements, determination letters, advance pricing agreements, and other 

pre-filing determinations and advice.

• International Regulatory Legal Support supports Counsel’s work in tax law 

interpretation and rulings and agreements related to international issues. 

Exam and Collections FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $4,700,345 $4,689,220 $4,504,885 $4,210,108 $4,196,794 $4,019,123 $4,108,566 $4,347,684

Reimbursable Resources2 8,729 11,163 6,385 804 640 577 606

User Fees2 49 918 574

Budget Activity Total $4,709,123 $4,700,383 $4,511,270 $4,210,912 $4,196,794 $4,019,763 $4,110,061 $4,348,864 1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Exam and Collections FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measures Actual Actual Actual Actual Actual Actual Target Target Target

Examination Coverage - Individual (Oe) (L) 1.1% 1.1% 1.0% 1.0% 0.9% 0.8% 0.8% 0.6% 0.7%

Field Exam National Quality Review Score (Oe) (L) 84.9% 85.8% 87.4% 89.2% 88.4% 86.7% 89.6% 86.7% 86.7%

Office Exam National Quality Review Score (Oe) (L) 91.6% 90.4% 91.3% 90.3% 90.6% 88.3% 90.2% 88.3% 88.3%

Examination Quality - Large Business1 (Oe) (L) 92.0% 83.0% 86.0% 90.0% 90.0% 90.0%

(New in FY 2013)

Examination Coverage - Business (Assets > $10 million) (O 5.7% 6.2% 6.2% 5.6% 4.3% 3.9% 3.8% 3.5% 3.2%

Automated Underreporter (AUR) Efficiency (E) (L) 1,924 2,007 2,041 2,025 1,935 2,209 2,032 2,036 2,006

Automated Underreporter (AUR) Coverage (E) (L) 3.0% 3.3% 3.2% 2.8% 2.6% 2.3% 2.6% 2.2% 2.3%

Examination Efficiency - Individual (E) (L) 140 139 142 142 138 148 135 122 122

Collection Coverage - Units (Ot) (L) 50.1% 50.0% 48.1% 47.0% 45.9% 46.3% 43.8% 41.8% 41.1%

Collection Efficiency - Units (E) (L) 1,822 1,952 1,997 2,057 2,051 2,448 2,173 2,208 2,124

Field Collection National Quality Review Score (Ot) (L) 80.6% 80.3% 80.4% 81.4% 81.6% 79.2% 81.6% 79.7% 79.7%

Automated Collection System (ACS) Accuracy (Oe) 95.9% 94.9% 94.7% 94.4% 95.2% 95.3% 94.0% 95.0% 95.0%

1

As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - 

Exam and Collections Budget and Performance Plan

Dollars in Thousands

Key: Oe - Outcome Measure, E - Efficiency Measure, L - Long Term Goal, Ot - Output/Workload Measure
IRS - 80 

• Return Preparer Strategy provides staffing, training, and direct support associated 

with the Return Preparer Strategy.

• Office of Professional Responsibility identifies, communicates, and enforces Treasury 

Circular 230 standards of competence, integrity, and conduct of those who represent 

taxpayers before the IRS, including attorneys, Certified Public Accountants (CPAs), 

enrolled agents, enrolled actuaries and appraisers, and other professionals.

Description of Performance 

Tax Exempt and Government Entities (TEGE) Determination Closures include both 

applications for tax-exempt status for employee retirement plans (EP) and applications from 

various charitable entities seeking tax-exempt status (EO). The IRS reviews applications to 

determine eligibility and closes them upon approval or disapproval. 

TE/GE exceeded the plan for total determination closures in FY 2015, as the number of 

determination cases completed reached 111,940. EO closed over 15,000 more Form 1023-EZ 

applications than initially anticipated due to a higher adoption rate by the public than 

expected. In EP, FY 2015 closures fell short of plan as resources were diverted to other 

priorities such as processing voluntary compliance applications and developing the TE/GE 

Knowledge Management initiative. In FY 2016, both programs anticipate further 

implementing recommendations stemming from Lean Six Sigma reviews of EP and EO case 

processing to improve timeliness and maintain consistent case treatment. TEGE will increase 

the FY 2016 and FY 2017 targets to 103,852 and 109,768, respectively. 
IRS - 81 

3.1.5 – Budget and Performance Report and Plan 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Regulatory FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 1,013 $151,750

FY 2016 Administrative Provision 113

FY 2016 Enacted 1,013 $151,750

Changes to Base:

Maintaining Current Levels (MCLs): $2,348

Pay Annualization 480

Pay Raise 1,777

Non-Pay 91

Subtotal FY 2017 Changes to Base $2,348

FY 2017 Current Services (Base) 1,013 $154,098

Program Increases:

Budget Request Program Increases:

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 1 170

Subtotal 1 $170

Subtotal FY 2017 Budget Request Program Increases 1 $170

Total FY 2017 Total Budget Request 1,014 $154,268

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 1 $2,518

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.13% 1.66%

Cap Adjustment Program Increases:

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage 1 28

Increase Audit Coverage 1 75

Subtotal 2 $103

Subtotal FY 2017 Cap Adjustment Program Increases 2 $103

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 3 $273

Total FY 2017 Total Budget Request Including Cap Adjustment 1,016 $154,371

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 3 $2,621

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 0.33% 1.73%

Regulatory FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $164,292 $159,293 $158,096 $149,319 $156,991 $147,733 $151,750 $154,371

Reimbursable Resources2 574 654 660 631 792 363 788 827

User Fees2 13,249 12,482 15,700 13,241 18,485 9,233 14,020

Budget Activity Total $164,866 $173,196 $171,238 $165,650 $171,024 $166,581 $161,771 $169,218 1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Regulatory FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measure Actual Actual Actual Actual Actual Actual Target Target Target

TE/GE Determination Case Closures (Ot) 105,247 91,205 87,000 65,877 136,746 111,940 99,942 103,852 109,768

Key: Ot - Output/Workload Measure

Regulatory Budget and Performance Plan

Dollars in Thousands

IRS - 82 

Operations Support 

Appropriation Description

The Operations Support appropriation provides funding for overall planning, direction, and 

support for the IRS, including shared service support related to facilities services, rent 

payments, printing, postage, and security. This appropriation funds headquarters policy and 

management activities such as corporate support for strategic planning; communications and 

liaison; finance; human resources; equity, diversity and inclusion; research and statistics of 

income; and necessary expenses for information systems and telecommunication support, 

including development, security, and maintenance of the IRS’s information systems.

The Operations Support budget request for FY 2017 is $4,030,695,000 in direct 

appropriations and 12,013 FTE. This is an increase of $284,007,000 or 7.58 percent, and

91 FTE more than the FY 2016 Enacted level of $3,746,688,000 and 

11,922 FTE. The Operations Support total budget request for FY 2017 including the program 

integrity cap adjustment is $4,314,099,000 and 12,250 FTE. 

The measures reflected in the Operations Support appropriation align to Goal 3: Fairly and 

effectively reform and modernize federal financial management, accounting, and tax systems, 

Objective 3.3: Pursue tax reform, implement the ACA and FATCA, and improve the execution 

of the tax code of the Department of the Treasury’s FY 2014 – FY 2017 Strategic Plan.
IRS - 83 

2.1 – Budget Adjustments Table

Dollars in Thousands

Operations Support FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 11,752 $3,638,446

FY 2016 Administrative Provision 113 170 $108,242

Improve Taxpayer Service 1,800

Cyber Security 170 95,442

Strengthening the Prevention of Identity Theft 11,000

FY 2016 Enacted 11,922 $3,746,688

Changes to Base:

Maintaining Current Levels (MCLs): $60,994

Pay Annualization 5,392

Pay Raise 19,975

Non-Pay 35,627

Efficiencies/Savings: ($58)

Increase e-File Savings (58)

Subtotal FY 2017 Changes to Base $60,936

FY 2017 Current Services (Base) 11,922 $3,807,624

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and 

Support

Implement Changes to Deliver Tax Credits and Other Requirements for the Affordable Care Act 153,240

Leverage New Technologies to Advance the IRS Mission 973

Improve Taxpayer Service 9 14,952

Subtotal 9 $169,165

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Enterprise Electronic Records Management Solution 46 18,543

Subtotal 46 $18,543

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 36 35,363

Subtotal 36 $35,363

Subtotal FY 2017 Budget Request Program Increases 91 $223,071

Total FY 2017 Total Budget Request 12,013 $4,030,695

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 91 $284,007

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.76% 7.58%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and 

Support

Enterprise Case Management 598

Subtotal $598

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to Deter and Change It

Increase Collection Coverage 21 32,254

Increase Audit Coverage 40 54,274

Digitizing Form 990 6 2,298

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance 70 76,850

Pursue Employment Tax and Abusive Tax Schemes 8,576

Increase Investigations of Transnational Organized Crime (TOC) 6,142

Subtotal 137 $180,394

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects 73 92,174

Maintain Integrity of Revenue Financial Systems 27 10,238

Subtotal 100 $102,412

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities

Subtotal

Subtotal FY 2017 Cap Adjustment Program Increases 237 $283,404

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 328 $506,475

Total FY 2017 Total Budget Request Including Cap Adjustment 12,250 $4,314,099

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 328 $567,411

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 2.75% 15.14%
IRS - 84 

2.2 – Operating Levels Table

Dollars in Thousands

Operations Support

Object Classification

FY 2015

Actual

FY 2016

Enacted

FY 2017

Request

11.1 Full-Time Permanent Positions 1,025,551 1,169,563 1,221,731

11.3 Other than Full-Time Permanent Positions 6,100 9,227 9,366

11.5 Other Personnel Compensation 15,721 20,303 21,659

11.8 Special Personal Services Payments 245 235 239

11.9 Personnel Compensation (Total) 1,047,617 1,199,328 1,252,995

12.0 Personnel Benefits 381,526 438,472 455,608

13.0 Benefits to Former Personnel 51,076 52,266 53,054

Total Personnel and Compensation Benefits $1,480,219 $1,690,066 $1,761,657

21.0 Travel 11,765 8,175 11,006

22.0 Transportation of Things 10,530 11,638 12,437

23.1 Rental Payments to GSA 610,803 595,254 618,265

23.2 Rent Payments to Others 12,352 13,042 13,280

23.3 Communications, Utilities, & Misc 297,972 290,283 318,661

24.0 Printing & Reproduction 16,401 18,165 19,083

25.1 Advisory & Assistance Services 526,886 524,393 701,466

25.2 Other Services 61,220 58,104 240,801

25.3 Purchase of Goods & Services from Govt. Accounts 77,712 73,930 85,332

25.4 Operation & Maintenance of Facilities 173,000 157,756 168,262

25.5 Research & Development Contracts

25.6 Medical Care 14,113 13,597 15,019

25.7 Operation & Maintenance of Equipment 59,759 65,956 69,971

25.8 Subsistence & Support of Persons 18

26.0 Supplies and Materials 18,396 20,428 22,036

31.0 Equipment 227,399 180,700 224,119

32.0 Land and Structures 2,612 25,003 32,502

42.0 Insurance Claims & Indemnities 279 198 202

Total Non-Personnel $2,121,217 $2,056,622 $2,552,442

New Appropriated Resources $3,601,436 $3,746,688 $4,314,099

Budget Activities:

Infrastructure 833,846 832,543 895,094

Shared Services & Support 1,126,230 1,141,485 1,197,954

Information Services 1,641,360 1,772,660 2,221,051

New Appropriated Resources $3,601,436 $3,746,688 $4,314,099

FTE 10,614 11,922 12,250
IRS - 85 

2.3 – Appropriation Detail Table 

3F – Infrastructure ($895,094,000 in direct appropriations and an estimated $772,000 from 

reimbursable programs): This budget activity funds administrative services related to space 

and housing, rent and space alterations, building services, maintenance, guard services, and 

non-IT equipment. The program activities include: 

• Building Delegation oversees and manages the IRS GSA-delegated buildings, 

including cleaning, maintenance, utilities, protection, administrative, and recurring and 

one-time repair costs.

• Rent provides resources for all IRS rent needs. 

• Space and Housing/Non-IT Equipment provides management of all IRS building 

services, maintenance, space alterations, guard services, custodial overtime, utility 

service’s needs, and non-IT equipment. 

• Security covers building security costs related to contract guard services. 

Description of Performance 

In FY 2015, there were 59 space reduction projects completed that resulted in the release of 

624,306 Rentable Square Feet (RSF) of space with Annualized Rent Savings (ARS) of 

$17.6 million that will support lower rent costs in the future. 

Approximately 45 space reduction projects were approved for implementation in FY 2016, 

which will result in the release of 550,757 RSF of space and ARS of approximately 

$15 million that will support lower rent costs in the future. In addition, the IRS embarked on 

a program to aggressively reduce the IRS space footprint nationwide and set, as a goal, the 

annual reduction of 800,000 RSF for the period FY 2016 through FY 2020. Achievement of 

this goal however, is contingent on the availability of funds to complete the projects that will 

Dollars in thousands

Operations Support

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources: 2

Infrastructure $833,846 $832,543 $895,094 $62,551 7.51%

Shared Services and Support 5,013 1,126,230 5,231 1,141,485 5,257 1,197,954 26 56,469 0.50% 4.95%

Information Services 5,601 1,641,360 6,691 1,772,660 6,993 2,221,051 302 448,391 4.51% 25.29%

Subtotal New Appropriated Resources 10,614 $3,601,436 11,922 $3,746,688 12,250 $4,314,099 328 $567,411 2.75% 15.14%

Other Resources:

Reimbursables 92 42,316 97 54,285 101 56,999 4 2,714 4.12% 5.00%

Offsetting Collections - Non Reimbursables

User Fees 1,187 375,378 99 395,662 37 268,295 (62) (127,367) -62.63% -32.19%

Recovery from Prior Years 1,908

Unobligated Balances from Prior Years 3 123,655 148,173 66,200 (81,973) -55.32%

Transfers In/Out

Resources from Other Accounts

Subtotal Other Resources 1,282 $543,257 196 $598,120 138 $391,494 (58) ($206,626) -29.59% -34.55%

Total Budgetary Resources 11,896 $4,144,693 12,118 $4,344,808 12,388 $4,705,593 270 $360,785 2.23% 8.30%

Change % Change

FY 2016 to FY 

2017 Request

1

FY 2016 Enacted includes $108.2 million in Section 113 Administrative Provision funding for Operations Support.

2

This includes the Program Integrity Cap Adjustment.

FY 2015

Actual

FY 2016

Enacted 1

FY 2017

Request

FY 2016 to FY 2017 

Request
IRS - 86 

enable realization of these savings. Project identification will continue during this budget 

year and into the future. 

The IRS also intends to place new hires in existing space and renew leases at existing sites 

rather than move to new locations, when cost effective. These and other actions will help 

limit the projected rent costs in the future. 
IRS - 87 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Infrastructure FTE Amount

FY 2016 Enacted (before Administrative Provision 113) $832,543

FY 2016 Administrative Provision 113

FY 2016 Enacted $832,543

Changes to Base:

Maintaining Current Levels (MCLs): $15,161

Pay Raise 1

Non-Pay 15,160

Subtotal FY 2017 Changes to Base $15,161

FY 2017 Current Services (Base) $847,704

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Leverage New Technologies to Advance the IRS Mission 405

Improve Taxpayer Service 4,508

Subtotal $4,913

Drive More Agility and Efficiency in IRS Operations

Enterprise Electronic Records Management Solution 646

Subtotal $646

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 6,014

Subtotal $6,014

Subtotal FY 2017 Budget Request Program Increases $11,573

Total FY 2017 Total Budget Request $859,277

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted $26,734

Percent Change FY 2017 Budget Request over FY 2016 Enacted 3.21%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Enterprise Case Management 306

Subtotal $306

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage 9,911

Increase Audit Coverage 12,148

Digitizing Form 990 92

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance 3,876

Pursue Employment Tax and Abusive Tax Schemes 518

Increase Investigations of Transnational Organized Crime (TOC) 1,839

Subtotal $28,384

Drive More Agility and Efficiency in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization 

(BSM) Projects 1,037

Maintain Integrity of Revenue Financial Systems 6,090

Subtotal $7,127

Subtotal FY 2017 Cap Adjustment Program Increases $35,817

Subtotal FY 2017 Total Program Increases Including Cap Adjustment $47,390

Total FY 2017 Total Budget Request Including Cap Adjustment $895,094

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted $62,551

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 7.51%
IRS - 88 

3.1.6 – Budget and Performance Report and Plan 

3G – Shared Services and Support ($1,197,954,000 in direct appropriations, $23,152,000 

from reimbursable programs, and an estimated $19,574,000 from user fees): This budget 

activity funds policy management, IRS-wide support for research, strategic planning, 

communications and liaison, protection of sensitive information and the privacy of taxpayers 

and employees, finance, human resources, and equity, diversity, and inclusion programs. It 

also funds printing and postage, business systems planning, physical security, corporate 

training, legal services, procurement, and employee benefits programs. The program 

activities include the following: 

• National Headquarters Management and Administration directs the management 

activities of strategic planning, communications and liaison, finance, human resources, 

equity, diversity and inclusion programs, business systems planning, embedded 

training, and utilization of Treasury Franchise Fund services. This activity sets 

policies and goals, provides leadership and direction for the IRS, and builds partner 

relationships with key stakeholders (Congress, GAO, OMB, and the Oversight Board). 

It provides policy guidance for conducting planning and budgeting strategies, 

conducting analysis of programs and investments to support strategic decisionmaking, and developing and managing human resources. It also includes official 

reception and representation expenses.

• Real Estate and Facilities Management provides services and supplies required to 

manage IRS facilities.

• Procurement supports the procurement function of the IRS. 

• Equity, Diversity and Inclusion Field Services provides staffing, training, and direct 

support to plan and manage the IRS’s Equity, Diversity and Inclusion program. 

• Communications and Liaison coordinates local government and liaison relationships; 

handles congressional, state, and national stakeholder relationships and issues; 

coordinates crosscutting issues, including managing audits and legislative 

implementation; handles national media contacts and local media relationships; and 

ensures IRS-wide compliance with disclosure and privacy laws. 

• Employee Support Services plans and manages financial services, including relocation, 

travel, purchase cards, corporate express, and employee clearances. 

• Shared Support not provided by Agency-Wide Shared Services provides resources for 

shared cross-functional support, such as copiers, postage meters, shredders, courier 

services, and post office boxes. 

Infrastructure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $895,202 $926,190 $929,634 $886,535 $849,025 $841,243 $832,543 $895,094

Reimbursable Resources2 505 880 1,016 701 16,694 928 735 772

User Fees2 23,290 57,477 5,414 17,137

Budget Activity Total $895,707 $950,360 $988,127 $892,650 $882,856 $842,171 $833,278 $895,866

1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Infrastructure Budget and Performance Plan

Dollars in Thousands
IRS - 89 

• Printing and Postage – Media and Publications provides operating divisions with 

printing and postage, including shipping of taxpayer and internal use materials. 

• Statistics of Income provides resources for researching annual income, financial, and 

tax data from tax returns filed by individuals, corporations, and tax-exempt 

organizations. 

• Research provides resources for market-based research to identify compliance issues, 

for conducting tests of treatments to address non-compliance, and for the 

implementation of successful strategies to address taxpayer non-compliance.

• Security Administration and Management manages and oversees the staffing, training, 

equipment, and direct support for the protection of IRS employees, facilities, and 

assets, and the protection and proper use of identity information. 

• Wage and Investment (W&I) Business Modernization Support provides staffing, 

training, and direct support for W&I’s enterprise-wide business modernization efforts, 

including CADE 2, and Account Management Services (AMS) technology solutions, 

and re-engineered business processes.

• Benefit Payments provides resources to fund Workers’ Compensation benefits and 

Unemployment Compensation for federal employee payments.

• Shared Services provides additional services, such as the Public Transit Subsidy. 

Description of Performance 

Through support activities that include management and administration of human resources, 

security, and research, the IRS continues to provide shared services to all IRS programs. 

Human Capital 

The IRS’s employees are its greatest asset and the IRS is committed to building a diverse and 

high performing workforce by recruiting and hiring top talent. In FY 2015, the IRS: 

• Focused on enhancing communication, cultivating an inclusive and collaborative 

environment, and encouraging employee engagement. To do that, the IRS developed 

and retained current employees by relying on their expertise to improve systems and 

processes and also by focusing on knowledge management, staff training, data 

analytics, and training for new ACA and FATCA requirements. Although under an 

exception-only hiring freeze, the IRS successfully hired seasonal staff to support filing 

season, recruited veterans and employees with targeted disabilities, and hired experts 

in the international area.

• Developed the FY 2015 Leadership Engagement Action Plan (LEAP) to tie numerous 

planned employee engagement efforts throughout the IRS into a single, corporate 

engagement strategy. The LEAP focuses on aligning engagement activities to a 

strategic vision, investing in employees and building support systems and tools to 

equip both leaders and employees for success. It is founded upon the Four Pillars of 

Engagement: Lead, Listen, Develop, and Support. 
IRS - 90 

• Encouraged an inclusive and collaborative environment through its robust employee 

communications, including more than 50 Commissioner or Deputy Commissioner 

employee email messages, articles in the IRS all-employee and manager newsletters, 

and moderated panel discussions with IRS executives. The IRS also conducted a 

number of special events for employees including a Leadership Forum featuring 

Commissioner Koskinen with then NTEU national president Colleen Kelley, 

Commissioner’s Award and Deputy Commissioners’ Awards programs, and an open 

office hours program that allowed employees to have one-on-one face time with the 

Deputy Commissioner of Operations Support. 

• Shifted the conversation about diversity to focus on the business benefits of a highly 

diverse, multi-talented workforce. This includes training programs for IRS leaders 

about managing a diverse workforce and embracing the diversity of thought, 

perspective, experience, and cultural background within their staff. 

The IRS will continue to support its mission by investing in human capital strategies and tools 

that support an agile workforce. Engaging, recruiting, hiring, developing, and retaining a 

flexible workforce with foundational skill sets, along with specialized knowledge will 

position the IRS to more easily adapt to a changing landscape where taxpayers’ interactions 

will be more technologically-driven. 

Security 

Security of taxpayer data and providing a secure environment for employees are of utmost 

importance to the IRS. In FY 2015, the IRS continued efforts at protecting employees. In 

2015, the IRS: 

• Enhanced employee awareness in service-wide emergency response training and 

education through the development of an Active Shooter/Threat and Workplace 

Violence mandatory briefing. IRS delivered this face-to-face training to employees at 

175 large Posts of Duty (PODs) and Campuses and completed 155 facilities security 

risk assessments.

• Amended existing contracts to require that favorable background investigations be 

obtained for all relevant contract employees before routine, unescorted, unsupervised 

physical access to taxpayer information is granted.

• Maintained perimeter security controls within its Trusted Internet Connection 

environment that block an average of more than two million malicious, suspicious, or 

prohibited events targeting IRS employees, systems, or networks on a daily basis. 

Over the past year, the IRS Cybersecurity Computer Security Incident Response 

Center (CSIRC) also identified, mitigated, and responded to 1,128 cyber incidents and 

produced 540 advisories and bulletins informing responsible business units, system 

administrators, and users of mitigation actions to address current vulnerabilities and 

threats affecting the IRS enterprise. 

• Refined and developed new identity theft filters based on analytical models and data 

validation. As a result, potentially fraudulent returns were stopped much earlier in 

processing, allowing the IRS to more quickly resolve cases for ID theft victims. 
IRS - 91 

Research 

The IRS National Research Program (NRP) continued to analyze reporting compliance data 

for various taxpayer populations, including Individual Income Tax, Corporate Income Tax, 

Employment Taxes, and Fuel Excise Taxes. NRP results enhance taxpayer service by 

improving IRS processes to reduce taxpayer burden and support enforcement activities by 

identifying issues with high risks for non-compliance. 

The IRS Joint Statistical Research Program (JSRP) uses Statistics of Income and IRS 

administrative tax data to study the effects of existing tax policies on individuals, businesses, 

and the economy. The JSRP is responsible for several research projects that require 

collaborating with academia, non-profit research organizations, and other government 

agencies on important issues affecting tax administration. 

The Office of Research, Analysis, and Statistics is conducting research on behavioral 

responses to IRS actions. This research included a pilot on the use of outreach methods 

designed to encourage taxpayers to participate in the tax system. An FY 2014 pilot 

demonstrated that generic informational postcards could influence filing behaviors among 

taxpayers who appear to be eligible for the Earned Income Tax Credit but have not filed a 

return in recent years in order to claim it. The increased participation seems to have resulted 

in increased compliance; the outreach appears to move two key indicators in a positive 

direction for the IRS: the Voluntary Filing Rate and the EITC participation rate. The 

FY 2015 outreach tested variations in the language used and the timing of the postcard 

messages to increase participation; preliminary FY 2015 results indicate that there were 

increases in participation, even among those who owed tax and/or did not receive a refund. 

The Nonfiler/Late-filer Survey is designed to help the IRS understand the drivers of nonfiling 

and gather burden data to inform the IRS Taxpayer Compliance Burden Model (TCBM). The 

study is conducted as an expansion of the Tax Year (TY) 2014 Taxpayer [post-filing] 

Compliance Burden Survey. The TCBM is used to estimate taxpayer post-filing burden and 

inform tax policy and tax law administration. The data from the study will provide additional 

insights into the issues associated with individuals who are at risk to stop filing and inform 

refinement of treatments for those individuals who do fail to file a required return. 
IRS - 92 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Shared Services and Support FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 5,231 $1,141,485

FY 2016 Administrative Provision 113

FY 2016 Enacted 5,231 $1,141,485

Changes to Base:

Maintaining Current Levels (MCLs): $18,488

Pay Annualization 2,356

Pay Raise 8,725

Non-Pay 7,407

Subtotal FY 2017 Changes to Base $18,488

FY 2017 Current Services (Base) 5,231 $1,159,973

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Leverage New Technologies to Advance the IRS Mission 199

Improve Taxpayer Service 1,460

Subtotal $1,659

Drive More Agility and Efficiency in IRS Operations

Enterprise Electronic Records Management Solution 5 5,397

Subtotal 5 $5,397

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 13 7,439

Subtotal 13 $7,439

Subtotal FY 2017 Budget Request Program Increases 18 $14,495

Total FY 2017 Total Budget Request 5,249 $1,174,468

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 18 $32,983

Percent Change FY 2017 Budget Request over FY 2016 Enacted 0.34% 2.89%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Enterprise Case Management 90

Subtotal $90

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage 2 7,092

Increase Audit Coverage 1 8,839

Digitizing Form 990 43

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance 2,541

Pursue Employment Tax and Abusive Tax Schemes 557

Increase Investigations of Transnational Organized Crime (TOC) 3,086

Subtotal 3 $22,158

Drive More Agility and Efficiency in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization 

(BSM) Projects 481

Maintain Integrity of Revenue Financial Systems 5 758

Subtotal 5 $1,239

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities

Subtotal

Subtotal FY 2017 Cap Adjustment Program Increases 8 $23,487

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 26 $37,982

Total FY 2017 Total Budget Request Including Cap Adjustment 5,257 $1,197,955

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 26 $56,470

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 0.50% 4.95%
IRS - 93 

3.1.7 – Budget and Performance Report and Plan 

3H – Information Services ($2,221,051,000 in direct appropriations, $33,075,000 in 

reimbursable resources, and an estimated $248,721,000 from user fees): This budget activity 

funds staffing, equipment, and related costs to manage, maintain, and operate the information 

systems critical to the support of the tax administration programs. This includes the design 

and operation of IT security controls and disaster recovery planning. This budget activity 

funds the development and maintenance of the millions of lines of programming code that 

support all aspects and phases of tax processing and the operation and administration of 

mainframes, servers, personal computers, networks, and a variety of management information 

systems. IT systems and data are key to all IRS functions. 

Information Systems (IT) is responsible for IRS information technology, ranging from cyber 

security and networks to applications development and end user equipment and services. The 

program activities include the following: 

• ACA – Program Management Office (PMO) manages the strategic planning, development, 

and implementation of new information systems in support of the business requirements 

associated with healthcare reform. 

• Application Development performs the analysis, design, development, testing, and 

implementation of about 550 applications supporting critical tax processing, management 

information reporting, and financial management support systems for the IRS. This 

program also supports external trading partner data exchanges with federal government 

agencies, state and local governments, and other third party entities. The program 

controls application source code and deploys applications to the production environment. 

• Cybersecurity delivers IT security services and ensures IRS compliance with federal 

statutory and regulatory requirements governing confidentiality, integrity, and availability 

of IRS electronic systems, services, and data. Cybersecurity tracks compliance, 

continuously monitors risk, and provides remediation to manage the IRS's IT Security 

Program in accordance with the Federal Information Security Management Act.

• Enterprise Operations designs, develops, and maintains IT that supports critical tax 

processing, management information reporting, and financial management support 

systems for the IRS. The program supports data exchanges with external organizations, 

such as other federal agencies, state and local governments, and external entities (e.g., 

employers and banks), and includes a comprehensive disaster recovery capability to 

ensure continued operations in the event of a major interruption of service. 

Shared Services and Support FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $1,311,127 $1,291,568 $1,214,514 $1,111,317 $1,188,067 $1,138,910 $1,141,485 $1,197,954

Reimbursable Resources2 20,315 19,957 31,486 17,175 19,886 17,126 22,050 23,152

User Fees2 17,887 4,588 14,938 33,826 7,819 1,768 3,722 19,574

Budget Activity Total $1,349,329 $1,316,113 $1,260,938 $1,162,318 $1,215,772 $1,157,804 $1,167,257 $1,240,680

1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Shared Services and Support Budget and Performance Plan

Dollars in Thousands
IRS - 94 

• Enterprise Program Management Office (EPMO) provides oversight and project 

integration into daily IT processes for large-scale development, modernization, and 

enhancement projects. It enables a coordinated, cross functional project planning, 

implementation, and performance assessment effort to improve the quality, cost, and 

delivery schedule of IT systems. 

• Enterprise Services plans and manages service and delivery methods used across the IT 

organization, including demand analysis, enterprise architecture, configuration 

management, project reporting, enterprise life cycle management, release management, 

systems engineering, dashboard reporting, and internal management. 

• IT Executive Oversight provides support to the Office of the Chief Technology Officer as 

well as his direct reports for equity, diversity, and inclusion, and the Director, Stakeholder 

Management (including Communications Services and Program Oversight). The program 

provides executive direction for the IT organization, enabling IT to be a customer-focused 

supplier of IT solutions that are responsive to customer business priorities and meet 

functional and operational needs effectively. 

• IT Infrastructure provides a centrally managed investment program for the replacement of 

IRS IT infrastructure that has reached or surpassed its useful life cycle. 

• Management Services provides for the design, development, delivery, and evaluation of a 

wide range of human resources programs for the IT organization. These programs include 

workforce planning, recruitment and retention, career management, performance 

management, labor/employee relations, position management, workplace improvement, 

succession management, and service-wide IT training and education. 

• Strategy and Planning delivers the Enterprise IT investment strategy and portfolio 

management, addressing a broad spectrum of functions coordinated through four 

divisions: 1) Business Planning and Risk Management ensures effective demand and risk 

management, overseeing Enterprise Intake and leveraging the Integrated Release Plan to 

support risk-based decisions; 2) Financial Management Services, IT’s link to the Chief 

Financial Officer, formulates and executes IT budgets, prepares fiscal policy, and provides 

financial services to the IT organization; 3) Investment and Portfolio Management and 

Oversight monitors investments currently executing in the control phase of the Capital 

Planning and Investment Control process as well as investments and projects that have 

completed implementation; and 4) Strategic Sourcing strategically manages IT 

acquisitions and vendors to maximize the value of the IRS’s investments while 

simultaneously minimizing business risk.

• Treasury Franchise Fund (TFF) is a centralized functional area that pays for services 

provided through the Treasury Franchise Fund. 

• User and Network Services provides telecommunications and desktop support services 

that allow service-wide. This includes the operation of equipment and services to meet 

business user needs and the execution of routine changes for scheduled and unscheduled 

modifications to the telecommunications infrastructure and applications. It addresses all 

phases of engineering, acquisition, implementation, and operation of telecommunications 

and desktop systems and services, including voice, video, and data communications. 
IRS - 95 

Description of Performance 

The IRS taxpayer service and enforcement programs rely heavily on information systems that 

fall into the non-business systems modernization (non-BSM) major investment categories. 

These systems process tax and information returns, account for tax revenues collected, send 

bills for taxes owed, issue refunds, assist in the selection of tax returns for audit, and provide 

telecommunication services for all business activities, including the public toll-free telephone 

system that provides access to tax information. 

In FY 2015, the IRS provided new and improved applications and services to make it easier 

for taxpayers to get assistance and secure tax information. 

• Completed transition of the Joint Operations Center (JOC) information systems 

support from contractor to the IRS. The transition included hardware, 

communications, and systems management with servers being moved to the IRS’s 

Enterprise Computing Center and Operations Support providing software and third 

party data acquisition, data management, Federal Information Security Management 

Act (FISMA) security support, and analytic tools to the JOC. 

• Integrated technology to support the Affordable Care Act with 2015 Filing Season tax 

administration processing, allowing taxpayers to report health insurance coverage, 

claim health coverage exemptions, report a shared responsibility payment, and claim 

the ACA Premium Tax Credit. The IRS built the ACA Verification Service (AVS) to 

enable at-filing checks of tax returns for reporting the Premium Tax Credit, leveraging 

third-party data from the Insurance Marketplaces, and validating ACA-related tax 

forms. This system processed millions of tax returns, and helped identify fraudulent 

and erroneous returns at the initial processing stage, reducing erroneous refunds. 

• Opened the first release of the new International Data Exchange Service (IDES) 

Gateway. The IDES enables both Financial Institutions and Host Country Tax 

Administrations to comply with their FATCA reporting obligations by safely and 

securely sending electronic FATCA reports to the IRS. 

• Deployed new capabilities associated with Online Bill Pay, IRS Direct Pay, Online 

Payment Agreement, Return Preparer Lookup, and the IRS2Go mobile application; in 

time for the start of the 2015 tax filing season. 

• Starting in FY 2015, the Cost and Schedule Variance measure that the IRS uses to 

gauge performance includes all major investments (BSM and non-BSM). This can be 

found on table 3.1.9. There are 19 major investments currently in progress or 

delivered to date in FY 2015. 

In FY 2016, and beyond, the IRS will continue to focus efforts on expanding its capabilities to 

identify fraudulent returns and prevent identity theft, enhance cyber monitoring and IT 

security controls, and enhance services options to taxpayers and practitioners through the 

development of a customer-centric strategy known as Service on Demand (SOD). In addition 

to supporting required changes for filing season, major investments for FY 2016 include 

delivering ACA and FATCA releases. 
IRS - 96 

3.1.8 – Budget and Performance Report and Plan 

FY 2017 Changes by Budget Activity

Dollars in Thousands

Information Services FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 6,522 $1,664,418

FY 2016 Administrative Provision 113 170 $108,242

Improve Taxpayer Service 1,800

Cyber Security 170 95,442

Strengthening the Prevention of Identity Theft 11,000

FY 2016 Enacted 6,691 $1,772,660

Changes to Base:

Maintaining Current Levels (MCLs): $27,345

Pay Annualization 3,036

Pay Raise 11,249

Non-Pay 13,060

Efficiencies/Savings: ($58)

Increase e-File Savings (58)

Subtotal FY 2017 Changes to Base $27,288

FY 2017 Current Services (Base) 6,691 $1,799,948

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the 

Affordable Care Act 153,240

Leverage New Technologies to Advance the IRS Mission 369

Improve Taxpayer Service 9 8,984

Subtotal 9 $162,593

Drive More Agility and Efficiency in IRS Operations

Enterprise Electronic Records Management Solution 41 12,500

Subtotal 41 $12,500

Strategic Focus: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 23 21,910

Subtotal 23 $21,910

Subtotal FY 2017 Budget Request Program Increases 73 $197,003

Total FY 2017 Total Budget Request 6,764 $1,996,951

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 73 $224,291

Percent Change FY 2017 Budget Request over FY 2016 Enacted 1.09% 12.65%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Enterprise Case Management 202

Subtotal $202

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to 

Deter and Change It

Increase Collection Coverage 19 15,251

Increase Audit Coverage 39 33,287

Digitizing Form 990 6 2,163

FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance 70 70,433

Pursue Employment Tax and Abusive Tax Schemes 7,501

Increase Investigations of Transnational Organized Crime (TOC) 1,217

Subtotal 134 $129,852

Drive More Agility and Efficiency in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization 

(BSM) Projects 73 90,656

Maintain Integrity of Revenue Financial Systems 22 3,390

Subtotal 95 $94,046

Subtotal FY 2017 Cap Adjustment Program Increases 229 $224,100

Subtotal FY 2017 Total Program Increases Including Cap Adjustment 302 $421,103

Total FY 2017 Total Budget Request Including Cap Adjustment 6,993 $2,221,051

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted 302 $448,391

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 4.51% 25.29%

Information Services FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $1,877,555 $1,838,958 $1,803,268 $1,803,091 $1,831,050 $1,719,293 $1,772,660 $2,221,051

Reimbursable Resources2 17,231 16,286 5,154 8,850 4,734 24,262 31,500 33,075

User Fees2 36,081 26,764 59,823 145,036 198,206 373,610 391,940 248,721

Budget Activity Total $1,930,867 $1,882,008 $1,868,245 $1,956,977 $2,033,990 $2,117,165 $2,196,100 $2,502,847

1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan including any inter-BAC transfers and inter-appropriation transfers.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursables and user fees.

Information Services Budget and Performance Plan

Dollars in Thousands

IRS - 97 

Business Systems Modernization 

Appropriation Description

The Business Systems Modernization (BSM) appropriation provides resources for the 

planning and capital asset acquisition of IT to modernize the IRS business systems. 

The BSM budget request for FY 2017 is $343,415,000 in direct appropriations and 

469 FTE. This is an increase of $53,415 or 18.42 percent, and 29 FTE more than the FY 2016 

Enacted level of $290,000,000 and 440 FTE. 

The performance measures reflected in the Enforcement appropriation support and align to 

Goal 3: Fairly and effectively reform and modernize federal financial management, 

accounting, and tax systems, Objective 3.3: Pursue tax reform, implement the Patient 

Protection and Affordable Care Act and Foreign Account Tax Compliance Act, and improve 

the execution of the tax code of the Department of the Treasury’s FY 2014 – FY 2017 

Strategic Plan.

2.1 – Budget Adjustments Table 

Dollars in Thousands

Business Systems Modernization FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 440 $290,000

FY 2016 Enacted 440 $290,000

Changes to Base:

Maintaining Current Levels (MCLs): $900

Pay Annualization 191

Pay Raise 709

Subtotal FY 2017 Changes to Base $900

FY 2017 Current Services (Base) 440 $290,900

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative 

Tools and Support 

Leverage New Technologies to Advance the IRS Mission 29 52,515

Subtotal 29 $52,515

Subtotal FY 2017 Budget Request Program Increases 29 $52,515

Total FY 2017 Total Budget Request Including Cap Adjustment 469 $343,415

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 29 $53,415

Percent Change FY 2017 Budget Request over FY 2016 Enacted 6.64% 18.42%
IRS - 98 

2.2 – Operating Levels Table 

Dollars in Thousands

Business Systems Modernization

Object Classification

FY 2015

Actual

FY 2016

Enacted

FY 2017

Request

11.1 Full-Time Permanent Positions 36,922 53,386 57,328

11.3 Other than Full-Time Permanent Positions 385 74 75

11.5 Other Personnel Compensation 588 3,041 3,157

11.9 Personnel Compensation (Total) 37,895 56,501 60,560

12.0 Personnel Benefits 11,086 15,433 16,597

Total Personnel and Compensation Benefits $48,981 $71,934 $77,157

21.0 Travel 35 593 1,081

22.0 Transportation of Things

23.3 Communications, Utilities, & Misc

24.0 Printing & Reproduction

25.1 Advisory & Assistance Services 52,280 181,393 228,991

25.2 Other Services 34 499 522

25.3 Purchase of Goods & Services from Govt. Accounts 35 35

25.4 Operation & Maintenance of Facilities

25.7 Operation & Maintenance of Equipment 2,691 2,376 2,376

26.0 Supplies and Materials 1 68 151

31.0 Equipment 3,723 33,102 33,102

Total Non-Personnel $58,764 $218,066 $266,258

New Appropriated Resources $107,745 $290,000 $343,415

Budget Activities:

IT Investments 107,745 290,000 343,415

New Appropriated Resources $107,745 $290,000 $343,415

FTE 309 440 469
IRS - 99 

2.3 – Appropriation Detail Table 

Dollars in thousands

Business Systems Modernization

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Business Systems Modernization 309 $107,745 440 $290,000 469 $343,415 29 $53,415 6.59% 18.42%

Subtotal New Appropriated Resources 309 $107,745 440 $290,000 469 $343,415 29 $53,415 6.59% 18.42%

Other Resources:

Reimbursables

Offsetting Collections - Non Reimbursables

User Fees

Recovery from Prior Years

Unobligated Balances from Prior Years 31 133,783 276,443 276,197 (246) -0.09%

Transfers In/Out

Resources from Other Accounts

Subtotal Other Resources 31 $133,783 $276,443 $276,197 ($246) -0.09%

Total Budgetary Resources 340 $241,528 440 $566,443 469 $619,612 29 $53,169 6.59% 9.39%

FY 2016 to FY 

2017 Request

FY 2015

Actual

FY 2016 to FY 

2017 Request

FY 2017

Request

Change % Change

FY 2016

Enacted

3I – Business Systems Modernization ($343,415,000 in direct appropriations): This budget 

activity funds the planning and capital asset acquisition of information technology (IT) to 

modernize IRS business systems, including labor and related contractual costs. 

Business Systems Modernization (BSM) uses best practices and expertise in business 

solutions and internal management from the IRS, businesses, and the technology sectors to 

develop a world-class tax administration system. The program provides value to taxpayers, 

the business community, and the government, and it plays an integral role in reducing the tax 

gap. BSM has delivered improved taxpayer service, electronic filing, and data analysis 

capabilities, and it has maintained strong performance in delivering projects within planned 

cost, schedule, and scope estimates. 

The following projects are supported by the FY 2017 BSM request of $343.3 million: 

CADE 2 (Taxpayer Account Database): Implements a single, data-centric solution that 

provides daily processing of taxpayer accounts. A major component of the CADE 2 program 

is a modernized relational database and comprehensive data model for all individual taxpayers 

that provides the foundation for more efficient and effective tax administration. In Transition 

State 2 of the CADE 2 initiative, the modernized database will become the IRS’s authoritative 

source for taxpayer account data, as it begins to address core IMF financial material weakness 

(FMW) requirements for individual taxpayer accounts. Existing financial reports will be 

modified to take into account the increased level of detail and accuracy of data in the CADE 2 

database. In addition, CADE 2 data will be made available for access by downstream 

systems, such as the Integrated Data Retrieval System (IDRS), for online transaction 

processing by IRS customer service representatives. It will enable analytical reporting for 

more meaningful business intelligence and expanded opportunities to increase compliance. 

Enterprise Case Management (ECM): Addresses the need to modernize and upgrade aging 

IRS case management systems. These resources will provide for an enterprise solution using 

a Commercial Off-the Shelf (COTS) product for performing standard case management 
IRS - 100 

functions, an infrastructure platform, and a common service that case management 

applications will leverage. 

Event Driven Architecture (EDA): Funds the development of a framework that processes tax 

returns immediately upon arrival, which will provide a scalable infrastructure and the ability 

to balance distributed workflows, resulting in a more efficient infrastructure model and 

improved customer service. 

Modernized e-File (MeF): Provides a standard filing structure for all IRS return types, a 

robust platform that meets performance and capacity needs, enhanced and up-to-date 

technologies, and customer service benefits that are of great appeal to external customers and 

stakeholders. With MeF, the IRS stores all tax return data in XML format in a Modernized 

Tax Return Database (MTRDB), allowing all authorized viewers of the data to see an entire 

tax return online. Once fully implemented, all tax returns and transmission files will be 

standardized and adhere to IRS rules/schemas.

Return Review Program (RRP): Delivers an integrated and unified system that enhances IRS 

capabilities to detect, resolve, and prevent criminal and civil tax non-compliance. The RRP 

provides a flexible and accessible system capable of supporting a cross-functional approach to 

address criminal and civil tax non-compliance. In addition, the RRP allows analysis and 

support of complex case processing requirements for compliance and criminal investigation 

programs during prosecution, revenue protection, accounts management, and taxpayer 

communications processes. 

Web Applications (formerly Enhance Online Services (OLS)): Will simplify the taxpayer’s 

online experience, provide secure digital communications, and add more interactive 

capabilities to existing web self-service products. This will allow taxpayers to resolve more 

issues online, requiring fewer direct interactions with the IRS over the telephone and in 

person. 

Architecture, Integration and Management (AI&M): Provides engineering management 

capabilities essential to delivering a program of BSM’s magnitude and complexity. It also 

delivers essential IRS systems strategy, architecture, and engineering capabilities for the 

major modernization projects across all technology platforms: IT Infrastructure, Business 

Applications, Data Management, and IT Security. The AI&M program translates enterprise 

and project objectives into targeted, actionable investments to provide the necessary 

framework and direction for a cohesive, successful modernization. 

Core Infrastructure: Provides mission-critical services for designing, engineering, testing, 

and deploying standardized, consolidated, virtual, and secure modernized development and 

production environments for use by BSM projects. 

The IRS is modernizing taxpayer applications to take advantage of web-based technologies 

that allow taxpayers to communicate with the IRS through the Internet using commercially 

available technology. The modernized infrastructure provides a complete environment 

(hardware, software, processes, and management) for developing, testing, deploying, 

operating, and monitoring both customer and internal applications in support of business 
IRS - 101 

practices. This includes continuing to update the web portal environment and standardizing 

services, security, and operations management. 

This approach facilitates the IRS’s ability to develop a shared infrastructure and common 

business service solutions that are usable across multiple BSM projects. 

Management Reserve: Allows the IRS some flexibility to cover unanticipated cost 

adjustments. 

Labor and support: This activity provides the labor and support costs associated with the 

development of projects within the BSM portfolio. 

Dollars in Thousands

Business Systems Modernization FY 2015 

Enacted

FY 2016

Enacted

FY 2017 

Budget 

Request 

Difference 

2016 to 2017

CADE 2 (Taxpayer Account Database) 

Continue the design and development of applications that will modernize core tax processing application architecture, 

address financial material weakness, and expand capabilities in leveraging the CADE 2 relational database as the 

authoritative source of individual taxpayer data.

100,000 91,000 100,000 9,000

Enterprise Case Management

Provide an enterprise-wide strategic approach to case management that will implement standard case management 

functions, an infrastructure platform, and common services that a case management application will leverage. The 

anticipated results are to streamline processes, reduce the number of duplicative applications and improve data 

accessibility and usability.

2,000 25,000 35,000 10,000

Event Driven Architecture

A framework that processes the tax return immediately upon arrival. Just-in-time processing will allow each individual 

return to flow independently through the system at its own pace. This will allow the IRS to move away from batch 

processing, view returns dynamically, and understand the status of a return as it is processed.

0 2,500 30,000 27,500

Modernized e-File 

Fund Milestone 4b (development and testing) of Release 11, Form 1040NR BMF Components & Shared Components 

(to include Dual Status and Fiscal Year Returns). 28,500 7,700 12,000 4,300

Return Review Program

Provide leading-edge technologies to advance IRS effectiveness in detecting, addressing, and preventing tax refund 

fraud and protecting US Treasury revenue. The RRP system contains multiple data sources combined with 

sophisticated modeling and business rule analytics to support pre-refund revenue protection, compliance and postrefund criminal investigation and prosecution. 

38,475 32,000 32,000 0

Web Applications

Drive the IRS transition to digital government and supports the long-term vision of migrating services from expensive 

traditional channels to the internet. To keep pace with the ever changing state of web technology and increasing 

taxpayer demand for IRS service, the IRS must create and enhance online self-service capabilities for taxpayers, tax 

practitioners, and internal IRS stakeholders. Web Applications will continue to enhance the taxpayer’s experience by 

providing additional self-service options within a secure communications infrastructure. 

12,500 13,000 17,000 4,000

Architecture, Integration, and Management

Provide system engineering management capabilities, including systems strategy, architecture, and engineering 

capabilities, across IT Infrastructure, Business Applications, Data Management, and IT Security. Provide portfolio 

control and management processes and tools, including governance, enterprise lifecycle support, tiered program 

management, and configuration/change management.

28,900 26,000 20,000 -6,000

Core Infrastructure

Provide shared infrastructure that leverages reusable engineering design patterns and best practices for standardized, 

virtual, and secure environments. These environments allow multiple BSM projects to develop, test, deploy, operate, 

and monitor in a common approach. 

15,465 15,000 15,000 0

Management Reserve 4,284 2,500 3,470 970

Subtotal Capital Investments $230,124 $214,700 $264,470 $49,770

Labor 1 58,872 71,933 77,155 5,222

Support 1,004 3,367 1,790 (1,577)

Total BSM $290,000 $290,000 $343,415 $53,415

 FY 2017 BSM Project Activities

1 FY 2017 labor includes $900K of MCLs and excludes $973K of corporate costs which are reflected in the Operations Support appropriation. 
IRS - 102 

Description of Performance

The IRS’s modernization efforts focus on building and deploying advanced information 

technology systems, processes, and tools to improve efficiency and productivity. 

For the Business Systems Modernization program (BSM), the IRS reports two budget level 

measures that track the percentage of major projects that are within the +/-10 percent Cost and 

Schedule variance threshold. 

Starting in FY 2015, the measure includes all major investments (BSM and non-BSM). There 

are 19 major investments currently in progress or delivered to date in FY 2015. 

In FY 2015, 14 of 19 major investments (73.7 percent) were within 10 percent cost variance. 

Reductions in the budget have caused hiring freezes and have necessitated changes in scope, 

realignment, rescheduling, and consolidation of activities. This has resulted in less spending 

than planned. Baseline Change Requests (BCRs) are in process to address these updated 

plans. Four of the five investments that did not meet the cost variance threshold were due to 

under spending; e-Services (e-SVS), Account Management Services (AMS), FATCA, and 

IRS End User Systems and Services (EUSS). The Electronic Fraud Detection System (EFDS) 

investment is slightly over budget due to the delay of planned FY 2014 work until FY 2015 

and expiration of a work contract that had to be renewed. In FY 2016, IRS will continue to 

rigorously monitor program activities and address any issues associated with cost to meet the 

FY 2016 and FY 2017 target of 90 percent. 

In FY 2015, 17 of 19 major investments (89.5 percent) were within the schedule variance. 

Fiscal Year

Percent within +/- 10% 

Cost Variance

Percent within +/- 10% 

Schedule Variance

2015 73.7% 89.5%

Major IT (BSM and Non-BSM) Investments
IRS - 103 

3.1.9 – Budget and Performance Report and Plan 

Business Systems Modernization FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Resource Level Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

Appropriated Resources1 $263,897 $263,369 $330,210 $312,938 $312,938 $290,000 $290,000 $343,415

Reimbursable Resources2

User Fees2 88,948

Budget Activity Total $263,897 $352,317 $330,210 $312,938 $312,938 $290,000 $290,000 $343,415 1

The FY 2010 - FY 2015 appropriated resources represents the approved operating plan.

2

The FY 2010 - FY 2015 columns represent realized resources for reimbursable resources and user fees.

Business Systems Modernization FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Measures Actual Actual Actual Actual Actual Actual Target Target Target

Percent of BSM Projects within +/- 10% Cost Variance (E) 40.0% 71.4% 50.0% 0.0% 66.7% NA NA NA

Percent of BSM Projects within +/- 10% Schedule Variance (E) 100.0% 100.0% 90.0% 83.3% 100.0% NA NA NA

73.7% 90.0% 90.0% 90.0%

89.5% 90.0% 90.0% 90.0%

Key: E - Efficiency Measure

Business Systems Modernization Budget and Performance Plan

Dollars in Thousands

Starting in FY 2015, these measures, currently reflected in the Performance Summary Table, include all major investments (BSM and non-BSM) whereas in the previous fiscal years it 

Percent of Major IT Investments within +/- 10% Schedule 

Variance at the Investment Level1

 - new for FY 2015

Percent of Major IT Investments within +/- 10% Cost Variance 

at the Investment Level1

 - new for FY 2015

FY 2017 Changes by Budget Activity

Dollars in Thousands

Business Systems Modernization FTE Amount

FY 2016 Enacted (before Administrative Provision 113) 440 $290,000

FY 2016 Administrative Provision 113

FY 2016 Enacted 440 $290,000

Changes to Base:

Maintaining Current Levels (MCLs): $900

Pay Annualization 191

Pay Raise 709

Subtotal FY 2017 Changes to Base $900

FY 2017 Current Services (Base) 440 $290,900

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Leverage New Technologies to Advance the IRS Mission 29 52,515

Subtotal 29 $52,515

Subtotal FY 2017 Budget Request Program Increases 29 $52,515

Total FY 2017 Total Budget Request 469 $343,415

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted 29 $53,415

Percent Change FY 2017 Budget Request over FY 2016 Enacted 6.64% 18.42%

IRS-104 

Section 4 – Supplemental Information

4.1 – Summary of Capital Investments 

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded at: 

http://www.treasury.gov/about/budget-performance/pages/summary-of-capitalinvestments.aspx.

This website also contains a digital copy of this document.

4A – Capital Investment Strategy

2015 IRS Technology Roadmap - Conceptual View

The conceptual, top-level view of the Technology Roadmap identifies the major services that 

support each core business area along with the major architectural principles and constructs. 

Critical components of the Technology Roadmap include: 

• Data: In response to the complex information ecosystem required for tax 

administration, the very core of the conceptual view is data. The Technology 
IRS - 105 

Roadmap envisions a future where all six of the core business areas ‒ Intake, Accounts 

Management, Compliance, Case Management, Customer Service, and Internal 

Operations ‒ consume a shared, centralized, authoritative set of data seamlessly, with 

the ability to easily and efficiently organize, manage, store, retrieve, manipulate, 

analyze and share data. 

• Data Access / Service Orchestration: The long-term architectural vision for IRS is 

to move toward complete service orientation. In contrast to the monolithic, stovepiped applications of today, users from any business area will seamlessly invoke 

services and reach to data on demand. The move toward service orientation will allow 

system developers to reuse component services in many different contexts, improving 

agility in meeting user needs.

• Multi-Channel Portal: In response to user demands, cost constraints, and the 

changing technology landscape, the Technology Roadmap provides a secure, multichannel portal for both internal and external stakeholders as a single point of entry to 

access IRS services and data from “any device, any place, any time.”

• Business Areas: The six IRS business areas ‒ Intake, Accounts Management, 

Compliance, Case Management, Customer Service, and Internal Operations ‒

encompass all IRS operations as large functional groupings of capabilities and 

services. The IRS structured these business areas to cut across organizational 

boundaries to serve a key Enterprise Architecture goal of identifying and building out 

shared solutions for common, shared business processes and needs. Throughout the 

Technology Roadmap, much of the vision for business capabilities, applications, and 

services is organized around these six business areas.

• Configurable Business Processes / Event-Driven Architecture (EDA): The 

Technology Roadmap leverages event driven architecture as a framework to 

orchestrate business processes and application services in response to business events. 

This approach allows the IRS to provide and optimize real time services.

FY 2017 Capital Investments 

These investments will help the IRS develop shared solutions for the taxpayer and tax 

professionals: 

The Customer Account Data Engine 2 (CADE 2) provides state-of-the-art individual taxpayer 

account processing and data-centric technologies to improve service to taxpayers and enhance 

IRS tax administration. CADE 2 daily processing enables faster taxpayer refunds, more 

timely account updates, and faster issuance of taxpayer notices – while leveraging a single 

centralized relational database for all individual taxpayer accounts. 

Transition State 2 (TS2) supports the IRS’s plans to reengineer the Individual Master File 

(IMF) by: (1) applying modern programming languages; (2) establishing CADE 2 as the 

authoritative data source for legal and financial purposes; and (3) implementing functionality 

to address the IRS Financial Material Weakness over unpaid tax assessments for individual 

taxpayer accounts.
IRS - 106 

E-Services is for authorized tax professionals and qualifying large business. This is a suite of 

Web-based self-assisted services for conducting business with the IRS electronically

(E-Services products are not available to the individual taxpayer). E-Services products 

currently available include:

• Registration ‒ permits creation of an electronic account by selecting a username, 

password, and personal identification number. 

• E-File Application ‒ lets tax professionals submit a three-step application to 

file/transmit returns electronically and check suitability, which may include a criminal 

background or other compliance check. 

• Taxpayer Identification Number (TIN) Matching ‒ allows authorized third parties 

who submit any of seven information returns, subject to backup withholding, to match 

up to 25 payee TIN and name combinations against IRS records before submitting an 

information return. Payers can confirm a taxpayer-provided social security number or 

employer identification number. Bulk TIN matching allows authorized tax 

professionals filing any of the seven information returns to match up to 100,000 TIN 

and name combinations. 

• Transcript Delivery System ‒ permits authorized tax professionals with powers of 

attorney or taxpayer authorizations to receive, in a secure online session, account 

transcripts, wage and investment documents, tax return transcripts, and verification of 

non-filing letters to resolve clients' needs for return and account information quickly. 

• Return Preparer Registration - Identity Verification Service (RPR-IVS) ‒

performs an identity verification check for tax preparers before the IRS issues a 

Preparer Tax Identification Number (PTIN). The check includes, but is not limited to, 

verification of the applicant’s SSN, Name, and Address of Record, with IRS records. 

IRS Direct Pay also has applied RPR-IVS to verify a taxpayer’s identity before 

allowing them to make a tax payment. 

• Taxpayer Identification Number (TIN) Validation Enterprise Common Service 

(TINV-ECS) ‒ provides both interactive and batch processing for validation of 

Taxpayer Identification Numbers, which are comprised of the taxpayer’s name, social 

security number, and employer identification number. 

• Automated Electronic Fingerprinting – provides criminal data checks in less than 

24 hours for tax practitioners requesting use of electronic filing services. IRS will 

scan submitted fingerprint cards electronically and send to the Federal Bureau of 

Investigation (FBI) for a criminal background check. The results will be loaded into 

the IRS Third Party Data Store (TPDS) for use in fraud detection. 

• External Services Authorization Management (ESAM) ‒ provides the capability 

for Affordable Care Act (ACA) Information Return Filers to resolve Health Insurance 

Marketplace and Health Insurers’ inquiries involving tax return and account 

information quickly. 

Web Services Infrastructure investment provides the infrastructure for one-stop, Web-based 

services with the long-term goal of providing a virtual tax assistance center for internal and 

external users. This investment enables landing page access to services for taxpayers, 

businesses, practitioners, electronic return originators and IRS employees. Services made 
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available by the IRS Web Services Infrastructure investment include easy access to forms and 

publications, electronic payment transactions, delivery of transcripts, tracking of refunds and 

amended returns, modernized e-filing, free-file for certain classes of taxpayers, and other 

electronic services. Planned enhancements for the IRS Web Services Infrastructure include 

more secure and reliable portals with a modernized portal design and increased systems 

capacity.

Return Review Program (RRP) is an integrated system that adds to the IRS’s capability to 

detect, resolve, and prevent criminal and civil tax non-compliance and fraud. The RRP will 

use third-party data to ensure the accuracy of income and withholding reported on a return. 

The RRP objectives include: 

• Increase identification of false tax refunds in a timely manner;

• Prevent the issuance of false tax refunds;

• Improve the IRS’s ability to detect identity theft;

• Identify 12 common frivolous arguments on tax returns; 

• Determine follow-up actions for potential criminal activity related to false tax refund 

crimes; 

• Detect tax refund crime schemes;

• Refer false and highly questionable returns for audit; and 

• Automate many manual tasks. 

Event Driven Architecture (EDA) will allow the IRS to provide a more efficient means of 

processing tax returns, thereby issuing tax refunds and/or collecting tax revenue owed more 

timely. It is a framework that processes the tax return immediately upon arrival. Currently, 

tax returns are bundled together. A correct return in the batch can be held up by another 

return with issues. Real time processing will allow each individual return to flow 

independently through the system. This will allow the IRS to view returns dynamically and 

understand the status of a return as it is processed. The EDA will transform the current tax 

processing architecture to a more scalable design that maximizes the technology investments 

and supports business agility. 

Enterprise Case Management will address the need to modernize, upgrade, and consolidate 

multiple aging IRS case management systems. A common case management environment 

will yield efficiencies by implementing standard case management functions, providing 

visibility across all types of tax transactions and improving data accessibility and usability. 

4B – IRS Aging Legacy Information Technology (IT) Infrastructure (non-BSM) 

Proposed Long-term Multiyear Funding Strategy and Timetable

The IRS established a Sustaining Infrastructure (SI) program to provide for long-term 

infrastructure viability with the flexibility to meet dynamically changing business 

requirements. The SI program includes a prioritization process to replenish aged assets that 

support the most critical IRS business needs. The prioritization process is a long-term 

funding strategy, to upgrade and modernize aging legacy IT infrastructure for non-Business 

Systems Modernization projects. The process is built on leading business practices and 
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strategic objectives that support the IRS mission while ensuring compliance with federal laws 

and agency oversight. 

Each year the IRS assesses and funds projects in the following four portfolios: 

Portfolio Name Description

Average 

Percentage of 

Portfolio 

Sustaining Infrastructure Aged inventory beyond useful life 65% 

Sustaining Architecture & 

Engineering 

Aged inventory not past its useful 

life, but tied to production 

applications or critical business need

15% 

Sustaining Enterprise 

System Software 

Updating aged software (beyond 

useful life) to achieve (N)(N-1) 

11%

Sustaining Other Operational Demand 9% 

The objectives of the SI prioritization process are to: 

• Achieve an acceptable level of aged assets (20 – 25 percent);

• Reduce the aged inventory of IRS infrastructure; 

• Describe an IRS future infrastructure replacement decision model; 

• Focus replacement investment decisions on the future infrastructure vision; 

• Assist in preparing annual asset retirement goals; and 

• Make the most efficient infrastructure investments. 

The benefits of the SI prioritization process include: 

• Reducing overall operational infrastructure cost of the IT Organization; 

• Reducing equipment diversity and quantity; 

• Improving infrastructure capacity; 

• Improving governance; 

• Increasing IT security;

• Improving disaster recovery operations; and 
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• Directing infrastructure to a more efficient world-class environment. 

The SI prioritization process is defined by four lifecycle phases: Pre-Select, Select, Control, 

and Evaluate. During each phase, the IRS governance bodies make decisions using defined 

processes and data regarding the investments under consideration. Approved investments 

become part of the larger SI investment portfolio, and both new and ongoing investments are 

monitored continuously throughout their lifecycle against Key Performance Indicators (KPIs) 

for Deputy Chief Information Officer (DCIO) and Infrastructure Executive Steering 

Committee (IESC) review. The IRS conducts post-implementation assessments to ensure 

Cost, Schedule, and the overall goals of the project were successfully completed. 

The four-lifecycle phases of the SI Prioritization Process are described below:

• The Pre-Select Phase assesses proposed IT solutions for unmet business requirements. 

The pre-selection phase creates a portfolio of IT project investments designed to 

improve overall organizational performance. The three-step pre-selection process is: 

o Step 1 – Screen IT proposals for relevance and feasibility. A mature investment 

screening process prescribes the required amount of documentation and level of 

analytical rigor, depending on the project’s type (e.g., mission critical 

infrastructure, etc.) and phase (e.g., initial concept, new, ongoing, and operational). 

o Step 2 – Retain proposals with the highest potential to support the IRS critical 

mission and/or operations. If viable, the proposal moves into the Investment 

Management Plan (IMP) development stage.

o Step 3 – Prioritize the list of IT projects. After completing the analysis, the IRS 

develops a ranked listing of IT projects. 

• During the Select phase, an executive level, decision-making body determines which 

projects to fund based on the analyses completed during the pre-select phase. The 

process prioritizes IT investments in accordance with organizational priorities and 

strategic direction. Projects are funded based on budget constraints with consideration 

for technical soundness of projects, contribution to mission needs, performance 

improvement priorities, and overall available budget levels.

• The Control Phase begins once investments are selected and approved for funding. 

The Control Phase monitors on-going IT projects during the planning, acquisition, 

deployment, and operation and maintenance stages of the IT investment life cycle. 

The primary objective is to assess the investment’s performance and enable effective 

management of all major IT investments within the IRS. If a project is late, over cost, 

or not being developed according to approved IMPs, projects may be modified or 

cancelled. 

• The Evaluate Phase includes two components: a Post Implementation Review (PIR) 

on implemented or cancelled investments and an annual analysis of the performance 

of the IRS’s portfolio management process. During PIRs, data is collected, recorded, 

and analyzed to compare expected results against actual benefits and returns. Once 

investments are fully implemented or cancelled, actual versus expected results are 

evaluated to assess the investment’s impact on strategic performance, identify 
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modifications that may be needed, and revise the investment management process 

based on lessons learned.

4C – Summary of FY 2015 Savings Realized 

The IRS FY 2015 President’s Budget request of $12,476.5 million was built on the FY 2014 

Enacted level of $11,290.6 million and included $95.2 million and 70 FTE in reductions to 

the IRS FY 2014 base budget. However, the FY 2015 Enacted budget was $10,945.0 million, 

leaving the IRS with a $345.6 million shortfall in appropriated funding if it were to continue 

at the same level of employment and output as in FY 2014. In addition, the IRS estimated it 

would need $223.2 million to cover the cost of MCLs in FY 2015, for a total shortfall of 

nearly $570 million. 

The FY 2015 President’s Budget proposed $95.2 million in savings and efficiencies, but 

additional savings needed to be identified in response to lower than expected enacted 

appropriations. The IRS tried to maintain the integrity of its programs and reduce disruption 

to taxpayers, but significant service impacts were unavoidable. In FY 2015, the IRS obligated 

$10,650.4 million from newly appropriated resources, down $277.1 million, or 2.5 percent, 

from FY 2014. 

Adjustment for FERS Increase

Projected Savings: (-$76,375,000) 

Estimated Savings Realized: ($-500,000,000) 

The IRS projected that by continuing to closely manage personnel costs it would save enough 

money to absorb the cost of the FERS contribution increase in FY 2015. The IRS realized 

approximately 4,400 fewer FTE in FY 2015 than in FY 2014 as a result of the hiring freeze. 

Savings from reduced FTE realization in FY 2015 is estimated to be approximately 

$500 million. In addition to covering the $76.4 million increase in FERS, the IRS used 

savings from attrition to cover other labor increases, such as the pay raise, career ladder 

increases, increase in the Federal Employee Health Benefits rate, and other labor inflationary 

costs. Once these additional increases were funded, remaining savings of approximately 

Dollars in Millions

Internal Revenue Service

FY 2014 Enacted $11,290.6

Changes to Base:

Maintaining Current Levels (MCLs) $223.2

Pay Raise 102.1

FERS Contribution Increase 75.3

Non-Pay Inflation Adjustment 45.8

FY 2015 Current Services $11,513.8

FY 2015 Enacted $10,945.0

Current Services Shortfall ($568.8)
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$270 million from reduced FTE realization were available to fund other mission critical 

needs. 

Increase e-File Savings 

Projected Savings: (-$2,800,000 / -55 FTE)

Actual Savings Realized: (-$6,209,800/ -122 FTE) 

The IRS realized savings of 122 FTE and $6.2 million in FY 2015 as a result of increases in 

electronically filed returns. The savings exceeded the projected savings by $3.4 million and 

67 FTE. The numbers of paper returns received by the IRS decreased by 2.3 million from FY 

2014 to FY 2015 while the number of electronically filed returns increased by 6.5 million 

over the same period. 

Health Coverage Tax Credit (HCTC) Program Termination

Projected Savings: (-$16,025,000 / -15 FTE)

Actual Savings Realized (-$13,752,866 / -7.63 FTE) 

Projected savings were lower for the HCTC program due to budget reductions in program 

support areas and high attrition rates during FY 2013 and FY 2014. In FY 2013, the 

termination of the HCTC program was announced. Employees assigned to HCTC program 

began to attrite in FY 2013, and as a result at the start of FY 2014 only nine employees 

remained on board. Over the course of the fiscal year, HCTC lost three additional employees, 

leaving six on board at the conclusion of the fiscal year. Agency-wide cuts to travel and 

contract support reduced the amount of program savings. The Trade Adjustment Assistance 

Act of 2015 (P.L. 114-27) requires the IRS to reinstate the HCTC program and retroactively 

extend benefits effective immediately, and continuing through calendar year 2019. 

Rent: 

Actual Savings: (-$17,600,000) 

Rent is one of the IRS's largest organizational operating expenses. The IRS completed 

59 projects to release more than 624,306 rentable square feet of space from inventory for an 

annual rent savings of more than $17.6 million. 

Contracts:

Actual Savings: (-$68,600,000) 

Negotiations leading to contract savings included price, labor hours, travel costs, 

considerations attained, schedule changes, price discounts, and more. In FY 2015, 

$68.6 million of savings were realized through contract negotiations. 
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4D - Return on Investment (ROI) for IRS Major Enforcement Programs 

The actual cost and actual revenue collected for FY 2011 through FY 2015 for the three major 

enforcement programs, Examination, Collection, and Automated Underreporter (AUR) are 

provided below. The activities included in these programs include: 

Examination Program conducts examinations of tax returns of individual taxpayers, 

businesses, and other types of organizations to verify that the tax reported is correct. This 

includes examinations of individual, small business, self-employed, large corporate business, 

partnerships, international, estate and gift, excise tax and employment tax, and tax-exempt, 

qualified pension benefit plans, and Government entities. The examination costs include the 

cost of the Field Exam, Correspondence Exam, IRS Chief Counsel, and Appeals functions. 

Collection Program collects delinquent taxes and secures delinquent tax returns, through the 

appropriate use of enforcement tools such as lien, levy, seizure of assets, installment 

agreement, offer in compromise, substitute for return, summons, and IRC 6020(b) (which 

allows the IRS to prepare returns if a taxpayer neglects or refuses to file); and provides 

education to taxpayers to enable future compliance. The cost of the Collection program 

includes Automated Collection System (ACS), Field Collection, and Payment Compliance/

Correspondence Collection. 

Automated Underreporter (AUR) Program matches payer information returns (Forms 1099, 

W-2, etc.) against data reported on individual tax returns to the IRS. The information is 

verified to identify any discrepancies. If a discrepancy is found, the case is given to a tax 

examiner for research and analysis. If the tax examiner is unable to resolve the discrepancy, a 

proposed notice is issued and a proposed assessment is generated. 

ROI is calculated by dividing revenue by cost. This information provides an indication of the 

ROI for the three major enforcement programs over time, but it is important to note that 

enforcement revenue collected in a fiscal year includes tax, interest, and penalties from 

multiple tax years. Some enforcement activities can take more than a year to close and may 

generate revenue over several years. 

These data reflect the average ROI for these programs and do not include indirect effects of 

IRS enforcement activities on voluntary compliance. As such, they are not intended to be 

used to allocate resources or maximize revenue. Net revenue is maximized only when 

resources are allocated according to marginal direct and indirect return on investment, but 

those ratios are much more challenging to estimate than the average ROI shown here. As a 

result, the IRS will continue to allocate enforcement resources across a range of enforcement 

activities to ensure taxpayers pay the taxes they owe with integrity and fairness to all.

Table 4.2 - Return on Investment for IRS Major Enforcement Programs Dollars in Millions

Enforcement Program Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI

IRS Total $6,543 $55,229 8.4 $6,242 $50,187 8.0 $5,883 $53,345 9.1 $5,839 $57,146 9.8 $5,644 $54,203 9.6

Examination 4,333 18,924 4.4 4,232 14,476 3.4 3,965 16,662 4.2 3,965 18,983 4.8 3,974 13,320 3.4

Collection 1,939 31,060 16.0 1,742 30,442 17.5 1,660 31,396 18.9 1,618 33,198 20.5 1,419 35,740 25.2

Automated Underreporter (AUR) 270 5,245 19.4 267 5,269 19.7 258 5,287 20.5 256 4,965 19.4 251 5,143 20.5

FY 2015

1

The cost of the enforcement programs was calculated using budget data from the IRS Integrated Financial System (IFS) and includes direct dollars and FTE from the Enforcement appropriation, Exam and 

Collections budget activity, and dollars from the Operations Support appropriation prorated using actual FTE realized for each major enforcement program.

FY 2011 FY 2012 FY 2013 FY 2014
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4.3 – IRS Performance Measure Table

Performance Measures Type of 

Measure

FY2010 

Actual

FY2011 

Actual

FY2012 

Actual

FY2013 

Actual

FY2014 

Actual

FY2015 

Actual

FY2015 

Target

FY2016 

Target 

FY2017 

Target 

Customer Service Representative Level of Service 

(LOS)1 Oe, L 74.0% 70.1% 67.6% 60.5% 64.4% 38.1% 38.0% 47.0% 70.0%

Customer Contacts Resolved per Staff Year E 10,744 12,419 16,320 20,767 21,018 26,245 21,000 28,000 25,700

Customer Accuracy - Tax Law (Phones) Ot 92.7% 93.4% 93.2% 95.7% 95.0% 95.0% 92.0% 92.0% 92.0%

Customer Accuracy - Accounts (Phones) Ot 95.7% 96.0% 95.6% 96.0% 96.2% 95.5% 94.0% 94.0% 94.0%

Timeliness of Critical Filing Season Tax Products to 

the Public Ot 95.3% 96.3% 97.2% 58.9% 99.1% 89.0% 95.0% 87.0% 87.0%

Timeliness of Critical TE/GE & Business Tax Products 

to the Public Ot 97.7% 96.4% 94.5% 83.6% 98.7% 92.6% 95.0% 87.0% 87.0%

Percent Individual Returns Processed Electronically Oe, L 69.3% 76.9% 80.5% 82.5% 84.1% 85.3% 84.6% 86.0% 86.0%

Percent of Business Returns Processed 

Electronically Oe, L 25.5% 31.8% 36.7% 40.2% 43.1% 47.0% 46.5% 48.0% 48.0%

Refund Timeliness - Individual (Paper) Ot 96.1% 99.4% 99.7% 99.0% 98.7% 98.8% 94.0% 97.0% 97.0%

Taxpayer Self-Assistance Rate E, L 64.4% 70.1% 78.5% 83.3% 84.7% 88.7% 85.0% 90.0% 89.0%

Examination Coverage - Individual Oe, L 1.1% 1.1% 1.0% 1.0% 0.9% 0.8% 0.8% 0.6% 0.7%

Field Exam Nat'l Quality Review Score Oe, L 84.9% 85.8% 87.4% 89.2% 88.4% 86.7% 89.6% 86.7% 86.7%

Office Exam Nat'l Quality Review Score Oe, L 91.6% 90.4% 91.3% 90.3% 90.6% 88.3% 90.2% 88.3% 88.3%

Examination Quality - Large Business2 Oe, L 92.0% 83.0% 86.0% 90.0% 90.0% 90.0%

Examination Coverage - Business (Assets > $10 

million) Oe, L 5.7% 6.2% 6.2% 5.6% 4.3% 3.9% 3.8% 3.5% 3.2%

Examination Efficiency - Individual E, L 140 139 142 142 138 148 135 122 122

Automated Underreporter Efficiency E, L 1,924 2,007 2,041 2,025 1,935 2,209 2,032 2,036 2,006

Automated Underreporter Coverage E, L 3.0% 3.3% 3.2% 2.8% 2.6% 2.3% 2.6% 2.2% 2.3%

Collection Coverage (Units) Ot, L 50.1% 50.0% 48.1% 47.0% 45.9% 46.3% 43.8% 41.8% 41.1%

Collection Efficiency (Units) E, L 1,822 1,952 1,997 2,057 2,051 2,448 2,173 2,208 2,124

Field Collection Nat'l Quality Review Score Ot, L 80.6% 80.3% 80.4% 81.4% 81.6% 79.2% 81.6% 79.7% 79.7%

Automated Collection System Accuracy Oe 95.9% 94.9% 94.7% 94.4% 95.2% 95.3% 94.0% 95.0% 95.0%

Criminal Investigations Completed Ot, L 4,325 4,697 4,937 5,557 4,606 4,486 3,800 3,800 3,600

Number of Convictions Oe, L 2,184 2,350 2,634 3,311 3,110 2,879 2,700 2,500 2,400

Conviction Rate Oe, L 90.2% 92.7% 93.0% 93.1% 93.4% 93.2% 92.0% 92% 92%

Conviction Efficiency Rate ($) E, L $324,776 $310,029 $270,511 $211,048 $231,103 $221,782 $243,000 $272,000 $272,000

TE/GE Determination Case Closures Ot 105,247 91,205 87,000 65,877 136,746 111,940 99,942 103,852 109,768

Percent of Major IT Investments within +/- 10% Cost 

Variance at the Investment Level 3 E 40.0% 71.4% 50.0% 0.0% 66.7% 73.7% 90.0% 90.0% 90.0%

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 3 E 100.0% 100.0% 90.0% 83.3% 100.0% 89.5% 90.0% 90.0% 90.0%

3

 Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

2

 As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure replaced the two previous LB&I quality measures - 

Examination Quality - Industry and Coordinated Industry.

IRS Performance Measures

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

1 Beginning in FY 2013, targets include an increase in base user fees.
IRS - 114 

4.3 – IRS Performance Measure Table (Continued)

Customer Service Representative (CSR) Level of 

Service

The number of toll free callers that either speak to a Customer Service Representative or receive informational 

messages divided by the total number of attempted calls.

Customer Contacts Resolved per Staff Year The number of Customer Contacts resolved in relation to staff years expended. 

Customer Accuracy – Tax Law Phones The percentage of correct answers given by a live assistor on Toll-free tax law inquiries.

Customer Accuracy – Customer Accounts 

(Phones) The percentage of correct answers given by a live assistor on Toll-free account inquiries.

Timeliness of Critical Individual Filing Season Tax 

Products to the Public

The percentage of critical individual filing season tax products (tax forms, schedules, instructions, publications, tax 

packages, and certain notices required by a large number of filers to prepare a complete and accurate tax return) 

available to the public in a timely fashion.

Timeliness of Critical TE/GE & Business Tax 

Products to the Public Percentage of critical other tax products, paper and electronic, available to the public in a timely fashion. 

Percent Individual Returns Processed 

Electronically The percentage of electronically filed individual tax returns divided by the total individual returns filed.

Percent Business Returns Processed 

Electronically The percentage of electronically filed business tax returns divided by the total business returns filed.

Refund Timeliness – Individual (Paper) The percentage of refunds resulting from processing Individual Master File paper returns issued within 40 days or less. 

Taxpayer Self Assistance Rate The percentage of taxpayer assistance requests resolved using self-assisted automated services.

Examination Coverage – Individual (1040)

The sum of all individual 1040 returns closed by Small Business/Self Employed (SB/SE), Wage & Investment (W&I), 

Tax Exempt and Government Entities (TE/GE), and Large Business and International (LB&I) (Field Exam and 

Correspondence Exam programs) divided by the total individual return filings for the prior calendar year.

Field Exam Nat'l Quality Review Score The score awarded to a reviewed field examination case by a Quality Reviewer using the National Quality Review 

System (NQRS) quality attributes.

Office Exam Nat'l Quality Review Score The score awarded to a reviewed office examination case by a Quality Reviewer using the NQRS quality attributes.

Examination Quality – Large Business Average of the scores of the Large Business Return (LBR) cases reviewed by LB&I Quality Measurement System 

(LQMS). Case scores are based on the percentage of elements passed within each of the four auditing standard.

Examination Coverage – Business Assets >$10 

Million)

The number of LB&I returns (C and S Corporations with assets over $10 million and all partnerships) examined and 

closed by LB&I during the current fiscal year divided by the number of filings for the preceding calendar year.

Examination Efficiency – Individual (1040) The sum of all individual 1040 returns closed by SB/SE, W&I, TE/GE, and LB&I (Field Exam and Correspondence 

Exam programs) divided by the total Full-Time Equivalent (FTE) expended in relation to those individual returns.

Automated Underreporter (AUR) Efficiency The total number of W&I and SB/SE contact closures (a closure resulting from a case where we made contact) divided 

by the total FTE, including overtime.

Automated Underreporter (AUR) Coverage A percentage representing the total number of W&I and SB/SE contact closures (a closure resulting from a case where 

SBSE and W&I made contact) divided by the total return filings for the prior year.

Collection Coverage – Units The volume of collection work disposed compared to the volume of collection work available.

Collection Efficiency – Units The volume of collection work disposed divided by total collection FTE.

Field Collection Nat'l Quality Review Score The score awarded to a reviewed collection cases by a Quality Reviewer using the NQRS quality attributes.

Automated Collection System (ACS) Accuracy The percent of taxpayers who receive the correct answer to their ACS question.

Criminal Investigations Completed

The total number of subject criminal investigations completed during the fiscal year, including those that resulted in 

prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of prosecution 

potential. 

Number of Convictions The number of criminal convictions.

Conviction Rate The percent of adjudicated criminal cases that result in convictions.

Conviction Efficiency Rate ($) The cost of Criminal Investigation’s (CI) program divided by the number of convictions.

TE/GE Determination Case Closures The number of cases closed in the Employee Plans or Exempt Organizations Determination programs, regardless of 

type of case or type of closing.

Percent of Major IT Investments within +/- 10% 

Cost Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned total cost and projected/actual cost 

within a fiscal year divided by the total number of major IT investments in that fiscal year.

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned days and projected/actual days within a 

fiscal year divided by the total number of major IT investments in that fiscal year.

Budget Level Performance Measure Descriptions
IRS - 115 

4.4 – Alignment of the FY 2017 Initiatives to the Treasury and IRS Goals and Themes 

 

FY 2017 Initiatives

Pursue tax reform,

implement the Patient 

Protection and 

Affordable Care Act

and Foreign Account

Tax Compliance

Act, and Improve

Execution of the

Tax Code

Create a Culture of 

Service through 

Relentless Pursuit of 

Customer Value

Introduce SelfService and 

Electronic-Service 

Taxpayer Options

Deliver High Quality 

and Timely Service 

to Reduce Taxpayer 

Burden and 

Encourage Voluntary 

Compliance

Effectively Enforce 

the Law to Ensure 

Compliance with 

Tax Responsibilities 

and Combat Fraud

Invest in our Workforce 

and the Foundational 

Capabilities 

Necessary to Achieve 

our Mission and 

Deliver High 

Performance for 

Taxpayers and 

Stakeholders

Theme 1: 

Facilitate 

Voluntary 

Compliance by 

Empowering 

Taxpayers with 

Secure 

Innovative 

Tools and 

Support 

Theme 2: 

Understand NonCompliant 

Taxpayer 

Behavior and 

Develop 

Approaches to 

Deter and 

Change it

Theme 6: 

Drive More 

Agility, 

Efficiency, and 

Effectiveness in 

IRS Operations

Focus Area: 

Strengthen 

Cybersecurity and 

Eliminate Identity 

Theft

p g q 

ACA   

Leverage New Technologies to Advance the IRS Mission    Enterprise Case Management    Improve Taxpayer Service      Enterprise Electronic Records Management Solution  Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects      Maintain Integrity of Revenue Financial Systems  Increase Collection Coverage   Increase Audit Coverage   Digitizing Form 990   FATCA: Implement, Expand Filing Coverage, and Combat Criminal Noncompliance

  

Pursue Employment Tax and Abusive Tax Schemes   Increase Investigations of Transnational Organized Crime (TOC)   Prevent Identity Theft and Refund Fraud and Reduce Improper Payments    

Goal #1 Strategic Focus

IRS Themes

Strategic 

Foundation for 

Organizational 

Excellence

Theme Categories Priority Goals Goal #2

Strategic Goals

IRS Goals Treasury 

Strategic Goal 3 - 

Objective 3.3

Strategic Goal 5 - 

Objective 5.4
IRS - 116 

4.5 – Summary of IRS FY 2017 ACA Budget Request 

The Improve Taxpayer Service portion of the ACA budget request includes $41.4 million 

(590 FTE) to handle the projected 6 million calls above normal telephone demand in FY 2017 

due to the ACA. 

4.6 – Summary of IRS FY 2017 Budget Request by Theme

Internal Revenue Service - Affordable Care Act Implementation $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2016 Enacted (before Administrative Provision 113) $71,793 935 $19,984 185 $112,840 724 $204,617 1,844

FY 2016 Administrative Provision 113

Improve Taxpayer Service

Cyber Security

Strengthening the Prevention of Identity Theft

FY 2016 Enacted $71,793 935 $19,984 185 $112,840 724 $204,617 1,844

Changes to Base:

Maintaining Current Levels (MCLs): $1,108 $310 $1,719 $3,137

Pay Annualization 233 66 344 643

Pay Raise 865 243 1,273 2,381

Non-Pay 10 2 102 114

Subtotal FY 2017 Changes to Base $1,108 $310 $1,719 $3,137

FY 2017 Current Services (Base) $72,901 935 $20,294 185 $114,559 724 $207,754 1,844

Program Increases:

Before Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the 

Affordable Care Act 153,240 153,240

Improve Taxpayer Service 32,021 590 9,399 41,420 590

Subtotal FY 2017 Before Cap Adjustment Program Increases $32,021 590 $162,639 $194,660 590

Total FY 2017 Budget Request $104,922 1,525 $20,294 185 $277,198 724 $402,414 2,434

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted $33,129 590 $310 $164,358 $197,797 590

Percent Change FY 2017 Budget Request over FY 2016 Enacted 46.14% 63.08% 1.55% 145.66% 96.67% 32.00%

TAXPAYER SERVICES ENFORCEMENT OPERATIONS SUPPORT BSM TOTAL

Internal Revenue Service $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2016 Enacted (before Administrative Provision 113) $2,156,554 27,886 $4,860,000 38,840 $3,638,446 11,753 $290,000 440 $10,945,000 78,919

FY 2016 Administrative Provision 113 $176,822 2,483 $4,936 $108,242 170 $290,000 2,653

Improve Taxpayer Service 176,622 2,483 1,800 178,422 2,483

Cyber Security 95,442 170 95,442 170

Strengthening the Prevention of Identity Theft 200 4,936 11,000 16,136

FY 2016 Enacted $2,333,376 30,369 $4,864,936 38,840 $3,746,688 11,923 $290,000 440 $11,235,000 81,572

Changes to Base:

Maintaining Current Levels (MCLs): $33,446 $75,008 $60,994 $900 $170,348

Pay Annualization 6,440 14,952 5,392 191 26,975

Pay Raise 23,856 55,386 19,975 709 99,926

Non-Pay 3,150 4,670 35,627 43,447

Efficiencies/Savings: ($3,708) (72) - ($58) - ($3,766) (72)

Increase e-File Savings (3,708) (72) - (58) - (3,766) (72)

Subtotal FY 2017 Changes to Base $29,738 (72) $75,008 $60,936 $900 $166,582 (72)

FY 2017 Current Services (Base) $2,363,114 30,297 $4,939,944 38,840 $3,807,624 11,923 $290,900 440 $11,401,582 81,500

Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with 

Secure Innovative Tools and Support 33,503 604 7,369 169,763 52,515 263,150 664

Drive More Agility, Efficiency, and Effectiveness in IRS Operations 120,955 120,955 146

Understand Non-Compliant Taxpayer Behavior and Develop 

Approaches to Deter and Change It 218,975 2 180,394 399,369 2,002

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 9,701 154 44,975 35,363 90,039 491

Alcohol and Tobacco Tax and Trade Bureau Transfer: 5,000 5,000

Subtotal FY 2017 Total Program Increases $43,204 758 $276,319 2,188 $506,475 328 $52,515 29 $878,513 3,303

Total FY 2017 Total Budget Request $2,406,318 31,055 $5,216,263 41,028 $4,314,099 12,251 $343,415 469 $12,280,095 84,803

Taxpayer Services Enforcement Operations Support BSM TOTAL
IRS - 117 

Internal Revenue Service $000 FTE $000 FTE $000 FTE $000 FTE $000 FTEFY 2016 Enacted (before Administrative Provision 113) $2,156,554 27,887 $4,860,000 38,840 $3,638,446 11,752 $290,000 440 $10,945,000 78,919

FY 2016 Administrative Provision 113 $176,822 2,483 $4,936 $108,242 170 $290,000 2,653

Improve Taxpayer Service 176,622 2,483 1,800 178,422 2,483Cyber Security 95,442 170 95,442 170Strengthening the Prevention of Identity Theft 200 4,936 11,000 16,136

FY 2016 Enacted $2,333,376 30,370 $4,864,936 38,840 $3,746,688 11,922 $290,000 440 $11,235,000 81,572

Changes to Base:

Maintaining Current Levels (MCLs): $33,446 $75,008 $60,994 $900 $170,348

Pay Annualization 6,440 14,952 5,392 191 26,975Pay Raise 23,856 55,386 19,975 709 99,926

Non-Pay 3,150 4,670 35,627 43,447

Efficiencies/Savings: ($3,708) (72) - ($58) - ($3,766) (72)

Increase e-File Savings (3,708) (72) - (58) - (3,766) (72)

Subtotal FY 2017 Changes to Base $29,738 (72) $75,008 $60,936 $900 $166,582 (72)FY 2017 Current Services (Base) $2,363,114 30,298 $4,939,944 38,840 $3,807,624 11,922 $290,900 440 $11,401,582 81,500

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the Affordable Care Act 153,240 153,240

Leverage New Technologies to Advance the IRS Mission 973 52,515 29 53,488 29

Improve Taxpayer Service 33,503 604 14,952 9 48,455 613

Subtotal $33,503 604 $169,165 9 $52,515 29 $255,183 642Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Enterprise Electronic Records Management Solution 18,543 46 18,543 46

Subtotal $18,543 46 $18,543 46Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 9,701 154 44,975 301 35,363 36 90,039 491

Subtotal $9,701 154 $44,975 301 $35,363 36 $90,039 491

Subtotal FY 2017 Budget Request Program Increases $43,204 758 $44,975 301 $223,071 91 $52,515 29 $363,765 1,179

Total FY 2017 Total Budget Request $2,406,318 31,056 $4,984,919 39,141 $4,030,695 12,013 $343,415 469 $11,765,347 82,679

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted $72,942 686 $119,983 301 $284,007 91 $53,415 29 $530,347 1,107Percent Change FY 2017 Budget Request over FY 2016 Enacted 3.13% 2.26% 2.47% 0.78% 7.58% 0.76% 18.42% 6.64% 4.72% 1.36%Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and Support

Enterprise Case Management 7,369 22 598 7,967 22

Subtotal $7,369 22 $598 $7,967 22

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to Deter and Change It

Increase Collection Coverage 58,213 678 32,254 21 90,467 699Increase Audit Coverage 74,161 816 54,274 40 128,435 856Digitizing Form 990 80 1 2,298 6 2,378 7FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance 49,889 203 76,850 70 126,739 273Pursue Employment Tax and Abusive Tax Schemes 7,210 37 8,576 15,786 37Increase Investigations of Transnational Organized Crime (TOC) 29,422 130 6,142 35,564 130

Subtotal $218,975 1,865 $180,394 137 $399,369 2,002

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects 92,174 73 92,174 73

Maintain Integrity of Revenue Financial Systems 10,238 27 10,238 27

Subtotal $102,412 100 $102,412 100

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities 5,000 5,000

Subtotal $5,000 $5,000

Subtotal FY 2017 Cap Adjustment Program Increases $231,344 1,887 $283,404 237 $514,748 2,124Subtotal FY 2017 Total Program Increases Including Cap Adjustment $43,204 758 $276,319 2,188 $506,475 328 $52,515 29 $878,513 3,303

Total FY 2017 Total Budget Request Including Cap Adjustment $2,406,318 31,056 $5,216,263 41,028 $4,314,099 12,250 $343,415 469 $12,280,095 84,803

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted $72,942 686 $351,327 2,188 $567,411 328 $53,415 29 $1,045,095 3,231

Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 3.13% 2.26% 7.22% 5.63% 15.14% 2.75% 18.42% 6.64% 9.30% 3.96%

Taxpayer Services Enforcement Operations Support BSM TOTAL

4.7 – Summary of IRS FY 2017 Program Integrity Cap Adjustment
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Return on Investment for IRS Major Enforcement Programs

Dollars in Millions

Enforcement Program Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI Cost1 Revenue ROI

IRS Total $6,543 $55,229 8.4 $6,242 $50,187 8.0 $5,883 $53,345 9.1 $5,839 $57,146 9.8 $5,644 $54,203 9.6

Examination 4,333 18,924 4.4 4,232 14,476 3.4 3,965 16,662 4.2 3,965 18,983 4.8 3,974 13,320 3.4

Collection 1,939 31,060 16.0 1,742 30,442 17.5 1,660 31,396 18.9 1,618 33,198 20.5 1,419 35,740 25.2

Automated Underreporter (AUR) 270 5,245 19.4 267 5,269 19.7 258 5,287 20.5 256 4,965 19.4 251 5,143 20.5

FY 2015

1

The cost of the enforcement programs was calculated using budget data from the IRS Integrated Financial System (IFS) and includes direct dollars and FTE from the Enforcement appropriation, Exam and 

Collections budget activity, and dollars from the Operations Support appropriation prorated using actual FTE realized for each major enforcement program.

FY 2011 FY 2012 FY 2013 FY 2014
IRS - 114

4.3 – IRS Performance Measure Table

Performance Measures Type of 

Measure

FY2010 

Actual

FY2011 

Actual

FY2012 

Actual

FY2013 

Actual

FY2014 

Actual

FY2015 

Actual

FY2015 

Target

FY2016 

Target 

FY2017 

Target 

Customer Service Representative Level of Service 

(LOS)1 Oe, L 74.0% 70.1% 67.6% 60.5% 64.4% 38.1% 38.0% 47.0% 70.0%

Customer Contacts Resolved per Staff Year E 10,744 12,419 16,320 20,767 21,018 26,245 21,000 28,000 25,700

Customer Accuracy - Tax Law (Phones) Ot 92.7% 93.4% 93.2% 95.7% 95.0% 95.0% 92.0% 92.0% 92.0%

Customer Accuracy - Accounts (Phones) Ot 95.7% 96.0% 95.6% 96.0% 96.2% 95.5% 94.0% 94.0% 94.0%

Timeliness of Critical Filing Season Tax Products to 

the Public Ot 95.3% 96.3% 97.2% 58.9% 99.1% 89.0% 95.0% 87.0% 87.0%

Timeliness of Critical TE/GE & Business Tax Products 

to the Public Ot 97.7% 96.4% 94.5% 83.6% 98.7% 92.6% 95.0% 87.0% 87.0%

Percent Individual Returns Processed Electronically Oe, L 69.3% 76.9% 80.5% 82.5% 84.1% 85.3% 84.6% 86.0% 86.0%

Percent of Business Returns Processed 

Electronically Oe, L 25.5% 31.8% 36.7% 40.2% 43.1% 47.0% 46.5% 48.0% 48.0%

Refund Timeliness - Individual (Paper) Ot 96.1% 99.4% 99.7% 99.0% 98.7% 98.8% 94.0% 97.0% 97.0%

Taxpayer Self-Assistance Rate E, L 64.4% 70.1% 78.5% 83.3% 84.7% 88.7% 85.0% 90.0% 89.0%

Examination Coverage - Individual Oe, L 1.1% 1.1% 1.0% 1.0% 0.9% 0.8% 0.8% 0.6% 0.7%

Field Exam Nat'l Quality Review Score Oe, L 84.9% 85.8% 87.4% 89.2% 88.4% 86.7% 89.6% 86.7% 86.7%

Office Exam Nat'l Quality Review Score Oe, L 91.6% 90.4% 91.3% 90.3% 90.6% 88.3% 90.2% 88.3% 88.3%

Examination Quality - Large Business2 Oe, L 92.0% 83.0% 86.0% 90.0% 90.0% 90.0%

Examination Coverage - Business (Assets > $10 

million) Oe, L 5.7% 6.2% 6.2% 5.6% 4.3% 3.9% 3.8% 3.5% 3.2%

Examination Efficiency - Individual E, L 140 139 142 142 138 148 135 122 122

Automated Underreporter Efficiency E, L 1,924 2,007 2,041 2,025 1,935 2,209 2,032 2,036 2,006

Automated Underreporter Coverage E, L 3.0% 3.3% 3.2% 2.8% 2.6% 2.3% 2.6% 2.2% 2.3%

Collection Coverage (Units) Ot, L 50.1% 50.0% 48.1% 47.0% 45.9% 46.3% 43.8% 41.8% 41.1%

Collection Efficiency (Units) E, L 1,822 1,952 1,997 2,057 2,051 2,448 2,173 2,208 2,124

Field Collection Nat'l Quality Review Score Ot, L 80.6% 80.3% 80.4% 81.4% 81.6% 79.2% 81.6% 79.7% 79.7%

Automated Collection System Accuracy Oe 95.9% 94.9% 94.7% 94.4% 95.2% 95.3% 94.0% 95.0% 95.0%

Criminal Investigations Completed Ot, L 4,325 4,697 4,937 5,557 4,606 4,486 3,800 3,800 3,600

Number of Convictions Oe, L 2,184 2,350 2,634 3,311 3,110 2,879 2,700 2,500 2,400

Conviction Rate Oe, L 90.2% 92.7% 93.0% 93.1% 93.4% 93.2% 92.0% 92% 92%

Conviction Efficiency Rate ($) E, L $324,776 $310,029 $270,511 $211,048 $231,103 $221,782 $243,000 $272,000 $272,000

TE/GE Determination Case Closures Ot 105,247 91,205 87,000 65,877 136,746 111,940 99,942 103,852 109,768

Percent of Major IT Investments within +/- 10% Cost 

Variance at the Investment Level 3 E 40.0% 71.4% 50.0% 0.0% 66.7% 73.7% 90.0% 90.0% 90.0%

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 3 E 100.0% 100.0% 90.0% 83.3% 100.0% 89.5% 90.0% 90.0% 90.0%

3

 Starting in FY 2015, the measure includes all major investments (BSM and non-BSM).

2

 As a result of program changes that occurred in the Large Business and International (LB&I) organization, starting in FY 2013, a new Examination Quality - Large Business measure replaced the two previous LB&I quality measures - 

Examination Quality - Industry and Coordinated Industry.

IRS Performance Measures

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

1 Beginning in FY 2013, targets include an increase in base user fees.
IRS - 115

4.3 – IRS Performance Measure Table (Continued)

Customer Service Representative (CSR) Level of 

Service

The number of toll free callers that either speak to a Customer Service Representative or receive informational 

messages divided by the total number of attempted calls.

Customer Contacts Resolved per Staff Year The number of Customer Contacts resolved in relation to staff years expended. 

Customer Accuracy – Tax Law Phones The percentage of correct answers given by a live assistor on Toll-free tax law inquiries.

Customer Accuracy – Customer Accounts 

(Phones) The percentage of correct answers given by a live assistor on Toll-free account inquiries.

Timeliness of Critical Individual Filing Season Tax 

Products to the Public

The percentage of critical individual filing season tax products (tax forms, schedules, instructions, publications, tax 

packages, and certain notices required by a large number of filers to prepare a complete and accurate tax return) 

available to the public in a timely fashion.

Timeliness of Critical TE/GE & Business Tax 

Products to the Public Percentage of critical other tax products, paper and electronic, available to the public in a timely fashion. 

Percent Individual Returns Processed 

Electronically The percentage of electronically filed individual tax returns divided by the total individual returns filed.

Percent Business Returns Processed 

Electronically The percentage of electronically filed business tax returns divided by the total business returns filed.

Refund Timeliness – Individual (Paper) The percentage of refunds resulting from processing Individual Master File paper returns issued within 40 days or less. 

Taxpayer Self Assistance Rate The percentage of taxpayer assistance requests resolved using self-assisted automated services.

Examination Coverage – Individual (1040)

The sum of all individual 1040 returns closed by Small Business/Self Employed (SB/SE), Wage & Investment (W&I), 

Tax Exempt and Government Entities (TE/GE), and Large Business and International (LB&I) (Field Exam and 

Correspondence Exam programs) divided by the total individual return filings for the prior calendar year.

Field Exam Nat'l Quality Review Score The score awarded to a reviewed field examination case by a Quality Reviewer using the National Quality Review 

System (NQRS) quality attributes.

Office Exam Nat'l Quality Review Score The score awarded to a reviewed office examination case by a Quality Reviewer using the NQRS quality attributes.

Examination Quality – Large Business Average of the scores of the Large Business Return (LBR) cases reviewed by LB&I Quality Measurement System 

(LQMS). Case scores are based on the percentage of elements passed within each of the four auditing standard.

Examination Coverage – Business Assets >$10 

Million)

The number of LB&I returns (C and S Corporations with assets over $10 million and all partnerships) examined and 

closed by LB&I during the current fiscal year divided by the number of filings for the preceding calendar year.

Examination Efficiency – Individual (1040) The sum of all individual 1040 returns closed by SB/SE, W&I, TE/GE, and LB&I (Field Exam and Correspondence 

Exam programs) divided by the total Full-Time Equivalent (FTE) expended in relation to those individual returns.

Automated Underreporter (AUR) Efficiency The total number of W&I and SB/SE contact closures (a closure resulting from a case where we made contact) divided 

by the total FTE, including overtime.

Automated Underreporter (AUR) Coverage A percentage representing the total number of W&I and SB/SE contact closures (a closure resulting from a case where 

SBSE and W&I made contact) divided by the total return filings for the prior year.

Collection Coverage – Units The volume of collection work disposed compared to the volume of collection work available.

Collection Efficiency – Units The volume of collection work disposed divided by total collection FTE.

Field Collection Nat'l Quality Review Score The score awarded to a reviewed collection cases by a Quality Reviewer using the NQRS quality attributes.

Automated Collection System (ACS) Accuracy The percent of taxpayers who receive the correct answer to their ACS question.

Criminal Investigations Completed

The total number of subject criminal investigations completed during the fiscal year, including those that resulted in 

prosecution recommendations to the Department of Justice as well as those discontinued due to a lack of prosecution 

potential. 

Number of Convictions The number of criminal convictions.

Conviction Rate The percent of adjudicated criminal cases that result in convictions.

Conviction Efficiency Rate ($) The cost of Criminal Investigation’s (CI) program divided by the number of convictions.

TE/GE Determination Case Closures The number of cases closed in the Employee Plans or Exempt Organizations Determination programs, regardless of 

type of case or type of closing.

Percent of Major IT Investments within +/- 10% 

Cost Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned total cost and projected/actual cost 

within a fiscal year divided by the total number of major IT investments in that fiscal year.

Percent of Major IT Investments within +/- 10% 

Schedule Variance at the Investment Level 

Number of major IT investments within +/-10 percent variance between planned days and projected/actual days within a 

fiscal year divided by the total number of major IT investments in that fiscal year.

Budget Level Performance Measure Descriptions
IRS - 116

4.4 – Alignment of the FY 2017 Initiatives to the Treasury and IRS Goals and Themes FY 2017 Initiatives Pursue tax reform, implement the Patient Protection and Affordable Care Act and Foreign Account Tax Compliance Act, and Improve Execution of the Tax Code Create a Culture of Service through Relentless Pursuit of Customer Value Introduce Self- Service and Electronic-Service Taxpayer Options Deliver High Quality and Timely Service to Reduce Taxpayer Burden and Encourage Voluntary Compliance Effectively Enforce the Law to Ensure Compliance with Tax Responsibilities and Combat Fraud Invest in our Workforce and the Foundational Capabilities Necessary to Achieve our Mission and Deliver High Performance for Taxpayers and Stakeholders Theme 1: Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and Support Theme 2: Understand Non- Compliant Taxpayer Behavior and Develop Approaches to Deter and Change it Theme 6: Drive More Agility, Efficiency, and Effectiveness in IRS Operations Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft p g q ACA    Leverage New Technologies to Advance the IRS Mission     Enterprise Case Management     Improve Taxpayer Service       Enterprise Electronic Records Management Solution   Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects       Maintain Integrity of Revenue Financial Systems   Increase Collection Coverage    Increase Audit Coverage    Digitizing Form 990    FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non- compliance

  

Pursue Employment Tax and Abusive Tax Schemes   Increase Investigations of Transnational Organized Crime (TOC)   Prevent Identity Theft and Refund Fraud and Reduce Improper Payments    

Goal #1 Strategic Focus

IRS Themes

Strategic 

Foundation for 

Organizational 

Excellence

Theme Categories Priority Goals Goal #2

Strategic Goals

IRS Goals Treasury 

Strategic Goal 3 - 

Objective 3.3

Strategic Goal 5 - 

Objective 5.4
IRS - 117

4.5 – Summary of IRS FY 2017 ACA Budget Request

The Improve Taxpayer Service portion of the ACA budget request includes $41.4 million 

(590 FTE) to handle the projected 6 million calls above normal telephone demand in FY 2017

due to the ACA.

4.6 – Summary of IRS FY 2017 Budget Request by Theme

Internal Revenue Service - Affordable Care Act Implementation $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2016 Enacted (before Administrative Provision 113) $71,793 935 $19,984 185 $112,840 724 $204,617 1,844

FY 2016 Administrative Provision 113

Improve Taxpayer Service

Cyber Security

Strengthening the Prevention of Identity Theft

FY 2016 Enacted $71,793 935 $19,984 185 $112,840 724 $204,617 1,844

Changes to Base:

Maintaining Current Levels (MCLs): $1,108 $310 $1,719 $3,137

Pay Annualization 233 66 344 643

Pay Raise 865 243 1,273 2,381

Non-Pay 10 2 102 114

Subtotal FY 2017 Changes to Base $1,108 $310 $1,719 $3,137

FY 2017 Current Services (Base) $72,901 935 $20,294 185 $114,559 724 $207,754 1,844

Program Increases:

Before Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure 

Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the 

Affordable Care Act 153,240 153,240

Improve Taxpayer Service 32,021 590 9,399 41,420 590

Subtotal FY 2017 Before Cap Adjustment Program Increases $32,021 590 $162,639 $194,660 590

Total FY 2017 Budget Request $104,922 1,525 $20,294 185 $277,198 724 $402,414 2,434

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted $33,129 590 $310 $164,358 $197,797 590

Percent Change FY 2017 Budget Request over FY 2016 Enacted 46.14% 63.08% 1.55% 145.66% 96.67% 32.00%

TAXPAYER SERVICES ENFORCEMENT OPERATIONS SUPPORT BSM TOTAL

Internal Revenue Service $000 FTE $000 FTE $000 FTE $000 FTE $000 FTE

FY 2016 Enacted (before Administrative Provision 113) $2,156,554 27,886 $4,860,000 38,840 $3,638,446 11,753 $290,000 440 $10,945,000 78,919

FY 2016 Administrative Provision 113 $176,822 2,483 $4,936 $108,242 170 $290,000 2,653

Improve Taxpayer Service 176,622 2,483 1,800 178,422 2,483

Cyber Security 95,442 170 95,442 170

Strengthening the Prevention of Identity Theft 200 4,936 11,000 16,136

FY 2016 Enacted $2,333,376 30,369 $4,864,936 38,840 $3,746,688 11,923 $290,000 440 $11,235,000 81,572

Changes to Base:

Maintaining Current Levels (MCLs): $33,446 $75,008 $60,994 $900 $170,348

Pay Annualization 6,440 14,952 5,392 191 26,975

Pay Raise 23,856 55,386 19,975 709 99,926

Non-Pay 3,150 4,670 35,627 43,447

Efficiencies/Savings: ($3,708) (72) - ($58) - ($3,766) (72)

Increase e-File Savings (3,708) (72) - (58) - (3,766) (72)

Subtotal FY 2017 Changes to Base $29,738 (72) $75,008 $60,936 $900 $166,582 (72)

FY 2017 Current Services (Base) $2,363,114 30,297 $4,939,944 38,840 $3,807,624 11,923 $290,900 440 $11,401,582 81,500

Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with 

Secure Innovative Tools and Support 33,503 604 7,369 169,763 52,515 263,150 664

Drive More Agility, Efficiency, and Effectiveness in IRS Operations 120,955 120,955 146

Understand Non-Compliant Taxpayer Behavior and Develop 

Approaches to Deter and Change It 218,975 2 180,394 399,369 2,002

Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 9,701 154 44,975 35,363 90,039 491

Alcohol and Tobacco Tax and Trade Bureau Transfer: 5,000 5,000

Subtotal FY 2017 Total Program Increases $43,204 758 $276,319 2,188 $506,475 328 $52,515 29 $878,513 3,303

Total FY 2017 Total Budget Request $2,406,318 31,055 $5,216,263 41,028 $4,314,099 12,251 $343,415 469 $12,280,095 84,803

Taxpayer Services Enforcement Operations Support BSM TOTAL
IRS - 118

Internal Revenue Service $000 FTE $000 FTE $000 FTE $000 FTE $000 FTEFY 2016 Enacted (before Administrative Provision 113) $2,156,554 27,887 $4,860,000 38,840 $3,638,446 11,752 $290,000 440 $10,945,000 78,919

FY 2016 Administrative Provision 113 $176,822 2,483 $4,936 $108,242 170 $290,000 2,653

Improve Taxpayer Service 176,622 2,483 1,800 178,422 2,483Cyber Security 95,442 170 95,442 170Strengthening the Prevention of Identity Theft 200 4,936 11,000 16,136

FY 2016 Enacted $2,333,376 30,370 $4,864,936 38,840 $3,746,688 11,922 $290,000 440 $11,235,000 81,572

Changes to Base:

Maintaining Current Levels (MCLs): $33,446 $75,008 $60,994 $900 $170,348

Pay Annualization 6,440 14,952 5,392 191 26,975Pay Raise 23,856 55,386 19,975 709 99,926

Non-Pay 3,150 4,670 35,627 43,447

Efficiencies/Savings: ($3,708) (72) - ($58) - ($3,766) (72)

Increase e-File Savings (3,708) (72) - (58) - (3,766) (72)

Subtotal FY 2017 Changes to Base $29,738 (72) $75,008 $60,936 $900 $166,582 (72)FY 2017 Current Services (Base) $2,363,114 30,298 $4,939,944 38,840 $3,807,624 11,922 $290,900 440 $11,401,582 81,500

Program Increases:

Budget Request Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and Support

Implement Changes to Deliver Tax Credits and Other Requirements for the Affordable Care Act 153,240 153,240

Leverage New Technologies to Advance the IRS Mission 973 52,515 29 53,488 29

Improve Taxpayer Service 33,503 604 14,952 9 48,455 613

Subtotal $33,503 604 $169,165 9 $52,515 29 $255,183 642Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Enterprise Electronic Records Management Solution 18,543 46 18,543 46

Subtotal $18,543 46 $18,543 46Focus Area: Strengthen Cybersecurity and Eliminate Identity Theft 

Prevent Identity Theft and Refund Fraud and Reduce Improper Payments 9,701 154 44,975 301 35,363 36 90,039 491

Subtotal $9,701 154 $44,975 301 $35,363 36 $90,039 491

Subtotal FY 2017 Budget Request Program Increases $43,204 758 $44,975 301 $223,071 91 $52,515 29 $363,765 1,179

Total FY 2017 Total Budget Request $2,406,318 31,056 $4,984,919 39,141 $4,030,695 12,013 $343,415 469 $11,765,347 82,679

Dollar/FTE Change FY 2017 Budget Request over FY 2016 Enacted $72,942 686 $119,983 301 $284,007 91 $53,415 29 $530,347 1,107

Percent Change FY 2017 Budget Request over FY 2016 Enacted 3.13% 2.26% 2.47% 0.78% 7.58% 0.76% 18.42% 6.64% 4.72% 1.36%

Cap Adjustment Program Increases:

Facilitate Voluntary Compliance by Empowering Taxpayers with Secure Innovative Tools and Support

Enterprise Case Management 7,369 22 598 7,967 22

Subtotal $7,369 22 $598 $7,967 22

Understand Non-Compliant Taxpayer Behavior and Develop Approaches to Deter and Change It

Increase Collection Coverage 58,213 678 32,254 21 90,467 699Increase Audit Coverage 74,161 816 54,274 40 128,435 856Digitizing Form 990 80 1 2,298 6 2,378 7FATCA: Implement, Expand Filing Coverage, and Combat Criminal Non-compliance 49,889 203 76,850 70 126,739 273Pursue Employment Tax and Abusive Tax Schemes 7,210 37 8,576 15,786 37Increase Investigations of Transnational Organized Crime (TOC) 29,422 130 6,142 35,564 130

Subtotal $218,975 1,865 $180,394 137 $399,369 2,002

Drive More Agility, Efficiency, and Effectiveness in IRS Operations

Operations and Maintenance for Deployed Business Systems Modernization (BSM) Projects 92,174 73 92,174 73

Maintain Integrity of Revenue Financial Systems 10,238 27 10,238 27

Subtotal $102,412 100 $102,412 100

Alcohol and Tobacco Tax and Trade Bureau Transfer:

Transfer to TTB for High-Return on Investment (ROI) Tax Enforcement Activities 5,000 5,000

Subtotal $5,000 $5,000

Subtotal FY 2017 Cap Adjustment Program Increases $231,344 1,887 $283,404 237 $514,748 2,124Subtotal FY 2017 Total Program Increases Including Cap Adjustment $43,204 758 $276,319 2,188 $506,475 328 $52,515 29 $878,513 3,303

Total FY 2017 Total Budget Request Including Cap Adjustment $2,406,318 31,056 $5,216,263 41,028 $4,314,099 12,250 $343,415 469 $12,280,095 84,803

Dollar/FTE Change FY 2017 Budget Request including PIC over FY 2016 Enacted $72,942 686 $351,327 2,188 $567,411 328 $53,415 29 $1,045,095 3,231Percent Change FY 2017 Budget Request including PIC FY 2016 Enacted 3.13% 2.26% 7.22% 5.63% 15.14% 2.75% 18.42% 6.64% 9.30% 3.96%

Taxpayer Services Enforcement Operations Support BSM TOTAL

4.7 – Summary of IRS FY 2017 Program Integrity Cap Adjustment

Departmental Offices - S & E

FY 2017

President’s Budget

February 9, 2016
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Table of Contents

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

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

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

1B – Vision, Priorities and Context................................................................................................3

Section 2 – Budget Adjustments and Appropriation Language.................................................11

2.1 Budget Adjustments Table .....................................................................................................11

2A – Budget Increases and Decreases Description ......................................................................12

2.2 – Operating Levels Table .......................................................................................................15

2B – Appropriations Language and Explanation of Changes ......................................................16

2C – Legislative Proposals...........................................................................................................17

2D – Mandatory Program Proposals ............................................................................................17

Section 3 – Budget and Performance Plan ...................................................................................20

3A – Executive Direction .............................................................................................................20

3.1.1 – Executive Direction Budget Activity Budget and Performance Plan...............................20

3B – International Affairs and Economic Policy..........................................................................20

3.1.2 – International Affairs and Economic Policy Budget and Performance Plan .....................24

3C – Domestic Finance and Tax Policy .......................................................................................25

3.1.3 – Domestic Finance and Tax Policy Budget Activity Budget and Performance Plan ........27

3D – Terrorism and Financial Intelligence...................................................................................27

3.1.4 – Terrorism and Financial Intelligence Budget Activity Budget and Performance Plan ....28

3E – Treasury-wide Management and Programs .........................................................................28

3.1.5 – Treasury-wide Management and Programs Budget Activity Budget and Performance 

Plan ...............................................................................................................................................31

Section 4 – Supplemental Information .........................................................................................32

4A – Summary of Capital Investments.........................................................................................32
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Section 1 – Purpose

1A – Mission Statement

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

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

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

Government’s finances and resources effectively.

1.1 – Appropriations Detail Table

Dollars in Thousands

Departmental Offices - S & E FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request 2/ $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

DO S&E

Executive Direction 147 36,002 157 37,943 156 38,240 (1) 297 -0.64% 0.78%

International Affairs and Economic Policy 228 56,266 239 58,520 239 59,467 0 947 0.00% 1.62%

Domestic Finance and Tax Policy 266 78,589 327 84,591 311 76,304 (16) (8,287) -4.89% -9.80%

Treasury-wide Management and 

Programs 140 39,143 149 41,446 143 43,365 (6) 1,919 -4.03% 4.63%

Terrorism and Financial Intelligence 0 0 0 0 441 117,000 441 117,000 0.00% 0.00%

TFI

Terrorism and Financial Intelligence 1/ 377 112,500 377 117,000 0 0 (377) (117,000) -100.00% -100.00%

Subtotal New Appropriated Resources 1,158 $322,500 1,249 $339,500 1,290 $334,376 41 ($5,124) 3.28% -1.51%

Other Resources:

DO S&E Reimbursables 1/ 184 130,032 197 123,026 166 102,892 (31) (20,134) -15.74% -16.37%

TFI Reimbursables 39 18,442 29 6,966 0 0 (29) (6,966) -100.00% -100.00%

Subtotal Other Resources 223 $148,474 226 $129,992 166 $102,892 (60) ($27,100) -26.55% -20.85%

Total Budgetary Resources 3/ 1,381 $470,974 1,475 $469,492 1,456 $437,268 (19) ($32,224) -1.29% -6.86%

1/ In FY 2016, the Office of Terrorism and Financial Intelligence (TFI) was funded through a separate appropriation of $117.0 million, which includes $27.1 million 

for administrative support.

2/ The FY 2017 Budget maintains TFI at $117.0 million and includes TFI activities in the DO S&E appropriation, where it has been each year except FY 2015 and 

FY 2016.

3/ The Budget also proposes to transfer $7.0 million from the Gulf Coast Restoration Trust Fund for DO’s administration and oversight responsibilities for this 

program. This funding is not included above.

1B – Vision, Priorities and Context

Departmental Offices (DO) is the headquarters bureau for the Department of the Treasury. It

provides leadership in economic and financial policy, financial intelligence and enforcement, and 

general management. Treasury utilizes effective management, policies, and leadership to protect 

our national security through targeted financial actions, to promote the stability of the nation’s 

financial markets, and to ensure the Government’s ability to collect revenue and fund its 

operations.

FY 2015 Key Accomplishments, FY 2016, and FY 2017 Priorities:

The Department’s strategic plan guides program and budget decisions for DO. The FY 2017

Budget request supports DO’s leading role in accomplishing the Treasury strategic goals and 

related strategic objectives:

• Promote domestic economic growth and stability while continuing to reform the financial 
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system;

• Enhance U.S. competitiveness and job creation, and promote international financial stability 

and more balanced global growth;

• Fairly and effectively reform and modernize federal financial management, accounting, and 

tax systems;

• Safeguard the financial system and use financial measures to counter national security 

threats; and

• Create a 21st-century approach to government by improving efficiency, effectiveness and 

customer interaction.

The budget enhances the overall investment in the Department’s cybersecurity portfolio to 

strengthen defenses and preparations within the Department and throughout the U.S. financial 

services sector. These investments will safeguard DO’s critical infrastructure and increase the 

scope and breadth of cybersecurity exercises, information sharing, and protections in the 

financial services sector. Treasury’s work will better prepare the sector to respond rapidly and 

effectively to threats and attacks.

The budget also continues the significant investments made in the Terrorism and Financial 

Intelligence portfolio, specifically in its intelligence analysis and sanctions support portfolios. 

Investments are also included for the Corporate Bond Yield Curve within Economic Policy and, 

within Tax Policy, increasing the investment in the rationalization of the tax code. 

In addition, the Office of Risk Management (ORM) is establishing a center of excellence in risk 

management at Treasury. ORM will continue Risk Committee meetings, work with program 

offices to more fully develop enterprise risk reporting, and continue to meet its mission to 

advise senior executives and their teams on policies and programs relating to the risk 

management of credit, market, liquidity, and operational risk within Treasury and throughout 

the federal government.

The offices’ FY 2015 program accomplishments and priorities for FY 2016 and FY 2017 

are described below:

Office of International Affairs

The Office of International Affairs (IA) made notable progress promoting free trade and open 

markets through its work on the Trans-Pacific Partnership (TPP) agreement, the Transatlantic

Trade and Investment Partnership, and the broader U.S. trade agenda. IA successfully leveraged 

multilateral mechanisms to advance U.S. policy priorities. Its key successes included:

• Enhancing global economic growth prospects by securing commitments from G-20 countries 

at the Brisbane Leaders’ Summit to boost near-term demand through comprehensive growth 

strategies and to establish the Global Infrastructure Hub to increase global investment; 

• Defining the policy framework for development finance for the next 15 years by successfully 

negotiating the adoption of the Addis Ababa Action Agenda at the Third International 

Conference on Financing for Development; 

• Advancing U.S. strategic goals by supporting Ukraine’s International Monetary Fund 

program; and
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• Protecting global economic and financial stability by securing new commitments to reform 

China’s economy and growth model at the most recent U.S.-China Strategic and Economic 

Dialogue. 

• Completing the recent Paris Agreement that lays out a framework through which nearly all 

countries in the world will announce and implement voluntary plans to reduce anthropogenic 

greenhouse gas emissions.

In FY 2016 and FY 2017, IA will continue efforts in key areas, including:

• Pressing China further to continue financial reform, increase exchange rate flexibility, and 

move rapidly toward a more market-oriented exchange rate system;

• Completing the TPP and advancing other U.S. trade priorities; and

• Continuing internal management improvement efforts, including expanding the analytical 

capabilities of the Committee on Foreign Investment in the United States.

Office of Economic Policy

During FY 2015, Economic Policy staff provided substantial support to the Secretary on a wide 

variety of economic and fiscal issues. In FY 2016, Economic Policy will continue to engage in 

policy-relevant research, examples of which can be found in two public reports the Office 

has authored or co-authored:

• Occupational Licensing: A Framework for Policymakers

• Expanding the Market for Infrastructure: Public-Private Partnerships

The FY 2016 and FY 2017 priorities include continued support of senior Administration officials 

on matters related to economic policy and ensuring a smooth transition in economic 

policymaking with the new Administration. Economic Policy will continue to produce the 

corporate bond yield curve, as required by the Pension Protection Act of 2006, as well as the 

Treasury Constant Maturity and the Treasury Inflation Protected Securities (TIPS) yield curves, 

which are used by several federal agencies to evaluate future pension liabilities and military 

disability payments. Work is also underway to extend the TIPS yield curve history back 25 

years to provide researchers and policy makers with a richer dataset that can be used for a wide 

variety of applications beyond pension valuation.

Office of Domestic Finance

The Office of Domestic Finance (DF) works to preserve confidence in the U.S. Treasury market 

by effectively managing federal fiscal operations, to strengthen financial institutions and 

markets, to promote access to credit, and to improve financial access and education. All of these 

efforts are contributing to America’s long-term economic strength and stability. 

During FY 2015, DF accomplished a great deal, including the following:

• DF’s Office of Critical Infrastructure Protection and Compliance Policy (OCIP) further 

expanded its efforts with the financial services sector to strengthen information sharing and 

the adoption of best practices against cybersecurity threats. For example, OCIP is 

implementing protocols to automate information sharing, which will allow companies to 

more quickly share and receive technical cybersecurity data. OCIP also worked with other 

federal agencies and financial institutions to hold several large-scale cybersecurity tabletop 
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exercises, which included a focus on information sharing during the response to and recovery 

from cybersecurity incidents.

• The Office of the Fiscal Assistant Secretary made progress on several key initiatives, 

including:

o Launching the myRA (“my Retirement Account”) program, a Presidential initiative 

offering a new retirement savings account for Americans seeking a simple, safe, and 

affordable way to start saving for their retirement;

o Leading the government-wide implementation of the Digital Accountability and 

Transparency Act (DATA Act), which aims to make information on federal spending 

easier to access and understand and was selected as one of Treasury’s FY 2016-2017 

Agency Priority Goals (APGs); 

o Providing guidance and training to eligible Gulf Coast states, counties, and parishes, and 

awarding and managing grants that support efforts to restore and protect the ecosystem 

and economy of the Gulf Coast region affected by the 2010 Deepwater Horizon oil spill,

and;

o Providing awards of cash assistance in lieu of tax credits for eligible renewable energy 

projects—achieving the milestone of 100,000 funded applications since 2009.

• The Office of Consumer Policy (OCP) supported the work of the President’s Advisory 

Council on Financial Capability for Young Americans and led the work of the interagency 

Financial Literacy and Education Commission. OCP supported the Commission’s release of 

a report, Opportunities to Improve the Financial Well-being of Postsecondary Students, and 

other resources for consumers and financial education practitioners. Additionally, OCP 

advised the Secretary and the Administration about marketplace lending, consumer 

protection, emerging payments, and smart disclosures.

• DF’s Office of Debt Management directed the Bureau of the Fiscal Service to conduct 269

auctions from October 1, 2014, through September 30, 2015, issuing approximately 

$6.94 trillion in marketable securities and raising approximately $558 billion in new cash to 

fund the U.S. government’s operations. 

• DF’s Federal Insurance Office (FIO) represents the United States on prudential aspects of

international insurance matters and in various fora around the world. FIO monitors all

aspects of the insurance industry, including its regulation, and its Director serves on the

Financial Stability Oversight Council. FIO continues to be an active participant in 

international bodies such as the International Association of Insurance Supervisors and the

Financial Stability Board.

• DF’s Office of State and Local Finance (OSLF) continues to improve coordination of

Treasury’s programs and policies that affect states and cities. OSLF advises the Under 

Secretary and Secretary about the development of policy pertaining to infrastructure finance, 

distressed municipalities, public pensions, the municipal bond market, and other state and 

local fiscal matters. OSLF has led Treasury’s response to the fiscal crisis in Puerto Rico. 
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Treasury has monitored Puerto Rico’s fiscal position, helped to coordinate the exchange of 

information about existing federal programs for which Puerto Rico is eligible, and conducted 

extensive market research and outreach to market participants. In addition, Treasury has 

briefed other federal agencies and members of Congress about Puerto Rico’s fiscal situation, 

and explored legislative solutions to address the crisis. 

During FY 2016 and FY 2017, DF will:

• Expand the reach of the myRA program, providing retirement savings accounts for more 

Americans;

• Continue working with federal partners to implement the national cyber incident response 

framework;

• Increase the scope and breadth of cybersecurity exercises, information sharing, and 

protections to better prepare the U.S. financial services sector to respond rapidly and 

effectively to threats and attacks;

• Support continued implementation of the Dodd-Frank Wall Street Reform and Consumer 

Protection Act and international insurance standards;

• Finalize a critical open rulemaking that will result in better recordkeeping of large financial 

institutions’ qualified financial contracts, negotiate an agreement on prudential measures 

with the European Union to improve market access for U.S. insurers, and deepen crossborder efforts with U.S. and foreign regulators on winding down large financial institutions 

safely in the event of failure;

• Examine tax, regulatory, and other barriers to greater public and private investment in U.S. 

infrastructure and develop options to address them;

• Work for a sustainable housing finance system that meets the needs of a wide range of 

borrowers;

• Expand financial inclusion in the United States by improving access to transaction products, 

capital, and credit; and strengthen the financial capabilities of Americans;

• Work with educational institutions, financial aid providers, and other federal agencies to 

develop a more sustainable education finance system that preserves access to credit for 

students seeking college education and helps students and families better manage their debt;

• Prudently and efficiently manage Treasury issuance, monitor market liquidity access, and 

continue enhancing and optimizing the U.S. government’s funding strategy; and

• Continue the orderly wind-down of emergency crisis response programs to maximize returns 

to the government.

Office of Tax Policy

The Office of Tax Policy works with the Internal Revenue Service in support of Treasury’s goal 

to fairly and effectively reform and modernize federal financial management, accounting, and tax 

systems by promulgating regulations and proposing legislation that seeks to streamline and 

modernize existing rules and procedures. The office also supports Treasury’s goal to enhance 

U.S. competitiveness and job creation, and promote international financial stability and more 

balanced global growth by negotiating and entering into tax agreements that encourage crossborder trade and investment. 
DO - 8

In FY 2015, the Office of Tax Policy:

• Continued to support the implementation of the Patient Protection and Affordable Care Act

(ACA), entered into signed agreements to implement the Foreign Account Tax Compliance 

Act (FATCA), and released guidance on the Achieving a Better Life Experience (ABLE) Act

which created tax-free savings accounts to help families finance disability needs.

• Provided the Administration and Department of Education with detailed analysis of the 

outcomes of students who receive federal aid (including tax benefits) to attend postsecondary institutions. This included analysis of data on all federal student aid recipients 

from 1996 to 2014, integration with information on their economic outcomes after 

completing their educational careers, and detailed statistical analysis and adjustment of 

institution-by-institution-level estimates of outcomes for publication on the Administration’s

“College Scorecard” website (https://collegescorecard.ed.gov/) and dissemination to 

stakeholders. These estimates were published in September 2015 and the office continues to 

provide support and analysis as the Administration augments and improves the College 

Scorecard.

• Finalized a comprehensive tax treaty between the United States and Vietnam in July 2015. 

This was the first agreement of its kind between the two countries and represents a 

significant step in expanding the U.S. tax treaty network. The treaty awaits Senate approval.

• Worked closely with the Organisation for Economic Co-operation and Development (OECD) 

on the Base Erosion and Profit Shifting (BEPS) project, finalizing approximately 12 reports 

that serve as the deliverables to the G20 to ensure better transparency and address BEPS in a 

comprehensive and coordinated manner.

In FY 2016 and FY 2017, priorities for the Office of Tax Policy include:

• Finalize the student federal aid estimates for the “scorecard” and update the tax models using 

these data to more accurately estimate budget proposals and make revenue estimates.

• Continue negotiating FATCA agreements to move countries from agreements in substance to 

signed agreements.

• Migration to a research network to provide analytical support for the Presidential transition, 

data analysis needs, and revenue estimation.

• Continue work on comprehensive tax reform.

• Contribute to the OECD for the Department's participation in programs related to global tax 

administration.

• Developing additional ACA guidance in light of experience with provisions as they go into 

effect.

Office of Terrorism and Financial Intelligence

In FY 2015, the Office of Terrorism and Financial Intelligence (TFI) continued to make 

exceptional progress marshalling the Department's intelligence and enforcement functions with 

the aim of safeguarding the financial system against illicit actors and other national security 

threats, and TFI played critical roles in numerous events and activities countering global 

financing of terrorist activities, developing and implementing anti money laundering/countering 

financing of terrorism (AML/CFT) policies, and supporting U.S. sanctions policy.

• TFI senior leadership and components were heavily integrated into two hallmark efforts in 

American diplomatic history: the nuclear agreement with Iran and the re-opening of a U.S. 

presence in Cuba.
DO - 9

• TFI’s intelligence analysis provided critical financial intelligence on U.S. adversaries to 

senior national security decision-makers across the U.S. government. 

• TFI supports over 40 active sanctions programs including continued sanctions against Iran 

and ISIL. TFI’s collaborated sanctions proposals have proven to be effective globally as 

evidenced by the Joint Comprehensive Plan of Action (JCPOA) reached between the P5+1, 

the EU, and Iran that will verifiably prevent Iran from obtaining a nuclear weapon and are a 

key tool for policy-makers to support the nation’s foreign policy objectives. 

• Treasury is leading the U.S. effort to undermine the Islamic State of Iraq and the Levant’s 

(ISIL) finances as part of a comprehensive strategy to disrupt, degrade, and ultimately defeat 

the terrorist group. Treasury is generating and sharing financial intelligence, restricting 

ISIL’s access to financial systems, and imposing sanctions on ISIL's leadership and financial 

facilitators. In 2015 alone, the U.S. sanctioned more than 30 ISIL-linked actors. 

• Treasury is also working with a broad coalition of governments and international bodies, 

including the United Nations Security Council, the Counter ISIL Finance Group, the 

Financial Action Task Force, and the Egmont Group of Financial Intelligence Units, to cut 

off ISIL’s revenue and isolate it from the international financial system. A key component of 

this effort is a new resolution adopted by the United Nations Security Council expanding and 

strengthening the U.N. al-Qaeda sanctions framework to include ISIL. The new resolution 

equips member nations with additional tools to combat ISIL and the financing of terrorism.

In FY 2016 and FY 2017, TFI will continue to support all ongoing efforts while focusing on four

areas:

• JCPOA: TFI will continue to play a critical role in implementing the JCPOA. TFI will focus 

significant intelligence resources on this effort to ensure compliance with the agreement. 

Further, TFI will work closely with the private sector and other entities as necessary to 

provide transparency about changes resulting from sanctions relief connected to the JCPOA. 

• Intelligence Analysis: TFI will hone and refine our analytical tools in response to rapidlychanging technology and adversaries adapting new methods and constantly working to evade 

our efforts. 

• Cybersecurity: As Treasury's national security role has grown, so has its cybersecurity risk 

profile. The Department handles an increasingly large volume of classified data and must 

ensure this information is protected. TFI has established an insider threat capability enabling 

Treasury to operate an insider threat audit and monitoring system for its classified network.

Treasury will work to expand the capabilities of this monitoring and audit function to remain 

ahead of emerging cybersecurity threats.

• Workforce: TFI will focus on retaining a highly skilled and motivated workforce by ensuring

achievement is recognized, opportunities for professional growth are readily available, and 

TFI leadership is accessible and responsive.

Treasury-wide Management and Programs

Treasury Management aims to create a 21st- century approach to government by improving

efficiency, effectiveness, and customer interaction. In FY 2015, this office made notable 

progress.

• Treasury met OMB’s requirement for strong authentication of privileged users with an over 

99 percent authentication rate. Treasury also exceeded OMB’s target of 75 percent for strong 

authentication of unprivileged users with an 88 percent authentication rate. These 
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authentication rates put Treasury among the top performing federal agencies in both 

categories for this Cross-Agency Priority and Cyber Sprint focus area.

• For the past three years, Treasury Management has been conducting workforce planning 

(WFP) studies of mission-critical occupations. In 2015, Treasury targeted cybersecurity for a 

WFP study including adapting its WFP tool to incorporate multi-sector workforce evaluation 

of cybersecurity service contracts by applying the NICE (National Initiative for 

Cybersecurity Education) framework of work categories and specialty areas.

• Treasury’s wireless contracts achieved an estimated 15 percent discount savings off the GSA 

Federal Strategic Sourcing Initiative (FSSI) wireless contract prices, resulting in a discount 

savings of approximately $2.4 million. Treasury mandated the use of four FSSI contract 

vehicles (Domestic Delivery Service, Office Supplies, Janitorial/Sanitation Supplies and 

Maintenance/Repair/Operations Supplies); Treasury’s FY 2015 total estimated savings, was 

$8 million, or approximately 26 percent off of the GSA schedule prices. 

• Recognized as a federal leader in organizational performance practices, Treasury 

successfully hosted the first annual FedStat meeting between Treasury and OMB leadership.

FY 2016 and FY 2017 priorities for Treasury Management include:

• Improving cybersecurity through additional hiring and retention of top-tier cybersecurity 

talent, increased coverage of automated threat detection solutions, and increased end-user 

training to raise awareness of cyber threats.

• Successfully implementing Treasury agency requirements for the Digital Accountability and 

Transparency Act (DATA Act) to ensure all the Treasury bureaus are compliant.

• Significantly transforming Treasury’s digital services, with a specific focus on a secure 

system that promotes ease of use and system cost-effectiveness, as well as possesses a robust 

virtual cybersecurity infrastructure to protect Treasury’s cyber assets, especially those assets 

with the greatest impact to citizens. 

• Strengthening Treasury’s ability to protect, access, and disclose Treasury information and 

assure that information the Department collects is being maintained within all legal 

requirements.

• In FY 2016 Treasury will focus its category management efforts on aggregating the 

requirements across the Department for the acquisition of Adobe products, Microsoft 

licenses, Multi-Function Devices, and Mobile Device Management, driving further IT 

savings across the Department. 

• Developing the FY 2018-2021 Treasury Strategic Plan, integrating with Administration 

transition efforts.
DO - 11

Section 2 – Budget Adjustments and Appropriation Language

2.1 Budget Adjustments Table

Dollars in Thousands

Departmental Offices - S & E FTE Amount

FY 2016 Enacted 1,249 $339,500

 DO S&E 872 $222,500

 TFI 1/ 377 $117,000

Adjustment to Request (22) ($10,050)

Fund RESTORE Act Administrative Expenses from Trust Fund (14) ($7,000)

DO Cybersecurity Enhancements (2) ($1,050)

Digital Infrastructure Security Team (6) ($2,000)

Changes to Base

Maintaining Current Levels (MCLs) 0 $5,312

Pay-Raise 0 $2,316

Pay Annualization 0 $682

Non-Pay 0 $2,314

Non-Recurring Costs 0 ($1,050)

Kline-Miller Amendment 0 ($1,050)

Efficiency Savings 0 ($1,430)

TFI Contractual Support 0 ($1,325)

Virtualization of the Foreign Credit Reporting System 0 ($105)

Other Adjustments 60 $0

Technical FTE Adjustment 60 $0

Subtotal Changes to Base 60 $2,832

Total FY 2017 Base 1,287 $332,282

Program Changes

Program Increases 3 $2,094

Rationalization of the Tax Code 0 $392

Corporate Bond Yield Curve 1 $202

Data and Risk Analysis 2 $1,500

Subtotal Program Changes 3 $2,094

Total FY 2017 Request 2/ 3/ 1,290 $334,376

1/ In FY 2016, the Office of Terrorism and Financial Intelligence (TFI) was funded through a separate appropriation of 

$117.0 million, which includes $27.1 million for administrative support.

2/ The FY 2017 Budget maintains TFI at $117.0 million and includes TFI activities in the DO S&E appropriation, 

where it has been each year except FY 2015 and FY 2016.

3/ The Budget also proposes to transfer $7.0 million from the Gulf Coast Restoration Trust Fund for DO’s 

administration and oversight responsibilities for this program. This funding is not included above.
DO - 12

2A – Budget Increases and Decreases Description

Adjustment to Request...................................................................................-$10,050,000 / -22 FTE

Fund RESTORE Act Administrative Expenses from Trust Fund -$7,000,000 / -14 FTE

In FY 2017, the Department proposes legislative language to allow Treasury to draw $7,000,000

from the Gulf Coast Restoration Trust Fund (GCRTF) for management of the fund, including 

administering the civil and administrative penalties arising from the Deep Water Horizon oil spill, 

supporting environmental and economic restoration of the Gulf Coast region, as well as managing

grants, compliance, and audit programs. In light of the recent British Petroleum settlement that will 

provide the GCRTF with an additional $4.4 billion over a 15-year period, sustained funding for 

effective administration of this program over an extended period, a minimum of 15 to 20 years, is 

fundamental to the program’s success. 

DO Cybersecurity Enhancements -$1,050,000 / -2 FTE

In the FY 2016 Consolidated Appropriations Act, $1,050,000 and two FTE were provided for 

Security Enhancements to Classified Networks and expansion of DO’s Wireless Intrusion 

Prevention System. In FY 2017, DO proposes to fund this request through the new appropriation 

account, “Cybersecurity Enhancement Account.”

Digital Infrastructure Security Team -$2,000,000 / -6 FTE

In the FY 2016 Consolidated Appropriations Act, $2,000,000 and six FTE were provided for the 

Digital Infrastructure Security Team. In FY 2017, DO proposes to fund this request through the new

appropriation account, “Cybersecurity Enhancement Account.”

Maintaining Current Levels (MCLs) ......................................................+$5,312,000 / +0 FTE

Pay-Raise +$2,316,000 / +0 FTE

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$682,000 / +0 FTE

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$2,314,000 / +0 FTE

Funds are requested for inflation adjustments in non-labor costs such as travel, contracts, rent, 

supplies, and equipment.

Non-Recurring Costs.................................................................................... -$1,050,000 / +0 FTE

Kline-Miller Amendment -$1,050,000 / +0 FTE

In the FY 2016 Consolidated Appropriations Act, $3,000,000 and six FTE were provided to support 

Treasury’s responsibilities under the Kline-Miller Amendment (previously referred to in the 

FY 2016 budget request as Multiemployer Pension Reform Act) of the FY 2015 Omnibus Bill. In 

FY 2017, DO would reduce the contractual support to this program, which is for a surge in program 

applications.

Efficiency Savings ...........................................................................................-$1,430,000 / +0 FTE

TFI Contractual Support -$1,325,000 / +0 FTE

DO will achieve cost savings and efficiencies in TFI contract services through more efficient 

oversight of all TFI contracts, consolidating contracts where appropriate, and partnering with other 

agencies and DO components to leverage common technology or administrative support needs.
DO - 13

Virtualization of the Foreign Credit Reporting System -$105,000 / +0 FTE

DO plans to virtualize the Federal Credit Reporting System (FCRS) in FY 2016, at the end of the 

current server’s lifecycle. FCRS provides for the input, retrieval, and analysis of foreign credit and 

related data. Virtualization will eliminate data center hosting charges and reduce system operations 

and maintenance costs as well.

Other Adjustments ...........................................................................................+$0 / +60 FTE

Technical FTE Adjustment +$0 / +60 FTE

An estimated 60 reimbursable FTE, supporting TFI in FY 2016, will be converted to direct FTE in 

FY 2017. The mission for the converted FTE remains the same--full administrative support of the 

TFI program. 

Program Increases................................................................................. +$4,687,000 / +6 FTE

Rationalization of the Tax Code +$392,000 / +0 FTE 

The exponential growth, availability, and variety of data from multiple sources have rapidly changed

expectations regarding the Office of Tax Policy’s analytical capabilities. To continue meeting the

analytical requests of the Secretary and the Administration, the Office of Tax Policy must upgrade

the existing computing platform. The current platform is at risk due to lack of commercially

available resources. Therefore, the office must migrate to a more current operating system. The 

FY 2017 request of $392,000 will provide the remaining resources necessary to upgrade the existing 

computing platform. 

Corporate Bond Yield Curve +$202,000 / +1 FTE 

Since 2006, the Office of Economic Policy has been producing the corporate bond yield curve, 

which single-employer defined-benefit pension plans are required by law to use to compute the 

present value of their current liabilities and lump sum payments. In 2014, the office began 

producing the Treasury constant maturity (TCM) curve. The TCM curve is used by several federal 

agencies to evaluate their pension liabilities and military disability payments, which amount to more 

than $6 trillion and are the second largest liability on the U.S. Balance Sheet. Production of both 

sets of data is a highly technical job that requires expertise in financial markets and the complexity 

of bond markets. Currently, this responsibility falls to one economist. The Office of Economic 

Policy requests one additional economist to ensure the continuity of this work, alleviate pressure on 

existing staff, and provide Economic Policy with additional flexibility to engage in forward-looking 

research and analysis. 

Data and Risk Analysis +$1,500,000 / +2 FTE

To increase data and risk analysis across DO, the following are requested in FY 2017:

• $169,000 and one FTE in the Office of Risk Management (ORM). ORM was created with a 

mission to exercise leadership across a broad range of cross-agency risk management efforts. 

To this end, DO is currently working with other agencies to enhance risk management for credit 

programs across the Government. These interagency projects and work streams will also lead 

to risk management changes for Treasury programs. The addition of this additional FTE will 

enable ORM staff to better support Treasury program staff in implementing any changes to 

programs that are needed due to the interagency risk management projects.

• $237,000 and one FTE to establish a Digital Accountability and Transparency Act (DATA Act) 

Program Management Office (PMO) within the Office of the Deputy Chief Financial Officer to 
DO - 14

oversee and coordinate Treasury’s DATA Act implementation, which is one of Treasury’s FY 

2016-2017 Agency Priority Goals (APGs). The Departmental DATA Act PMO will coordinate, 

manage, and improve upon Treasury’s data transparency and standardization across financial 

management, procurement, grants, and loans as they relate to DATA Act requirements. The 

PMO would support expanded data analytics, consolidated management reporting, and 

potentially folding in current financial reporting functions off of a single data repository by 

managing technical contractor support and implementing system enhancements within the 

scope of the DATA Act with its stakeholders. 

• $180,000 for the Office of the Procurement Executive to establish a contract for Fed Data 

analytics. Use of FedDataCheck services increases the accuracy of the Department's 

procurement spending data in support of benchmarking and provides procurement spending

data reporting in support of strategic sourcing opportunities. This contract will establish a 

bureau baseline for procurement spending so that the true opportunity costs of decisions are 

properly quantified and savings against budget dollars can be readily identified. The bureaus 

will be able to access the data analytics and request specific Strategic Sourcing Initiative 

information empowering them to improve their purchasing.

• $350,000 to enhance DO-wide eDiscovery capabilities primarily for the Office of General

Counsel. This funding will provide capability to more expeditiously and accurately identify, 

collect, process, review, analyze, redact (as appropriate), and produce emails and other 

electronic records in connection with litigation, Freedom of Information Act requests, and 

similar matters. Current processes are outdated and manually intensive. Automated 

eDiscovery reduces the amount of time required to complete data analysis and will enhance

Treasury’s ability to promptly respond to document requests. 

• $564,000 for the Office of International Affairs to develop enhanced capability for the 

interagency Committee on Foreign Investment in the United States (CFIUS), which Treasury 

chairs, to receive, track, and analyze data, including CFIUS case data, third party industry and 

merger and acquisitions data, and other data relevant to national security reviews conducted by 

CFIUS. This will support the ability of IA and CFIUS to better manage the CFIUS review 

process, assess whether notified transactions pose national security concerns, and identify nonnotified transactions that may raise national security considerations warranting review. This 

funding will be used to acquire the information technology (IT) infrastructure and IT 

development, engineering, and related services to design and build out the enhanced capability.
DO - 15

2.2 – Operating Levels Table

Dollars in Thousands

Departmental Offices - S & E FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

DO / TFI DO TFI Total

11.1 - Full-time permanent 132,955 106,085 43,124 149,209 155,612

11.3 - Other than full-time permanent 1,919 1,593 200 1,793 1,820

11.5 - Other personnel compensation 2,709 2,034 1,000 3,034 3,079

11.9 - Personnel Compensation (Total) 137,583 109,712 44,324 154,036 160,511

12.0 - Personnel benefits 40,343 30,863 14,306 45,169 47,492

Total Personnel Compensation and Benefits $177,926 $140,575 $58,630 $199,205 $208,003

21.0 - Travel and transportation of persons 6,249 4,155 1,872 6,027 6,141

22.0 - Transportation of things 431 144 278 422 369

23.1 - Rental payments to GSA 2,712 4,609 136 4,745 4,603

23.2 - Rental payments to others 904 655 246 901 917

23.3 - Communication, utilities, and misc charges 368 6,078 0 6,078 6,194

24.0 - Printing and reproduction 236 109 118 227 232

25.1 - Advisory and assistance services 30,398 7,393 12,829 20,222 13,205

25.2 - Other services 14,827 3,601 8,630 12,231 10,219

25.3 - Other purchases of goods & serv frm Govt accounts 69,190 40,957 30,565 71,522 66,458

25.5 - Research and development contracts 17 2,401 0 2,401 2,447

25.7 - Operation and maintenance of equip 2,323 2,432 388 2,820 2,649

26.0 - Supplies and materials 6,803 3,384 2,204 5,588 5,677

31.0 - Equipment 4,920 6,007 1,104 7,111 7,262

32.0 – Land and Structures 4 0 0 0 0

42.0 – Insurance claims and indemnities 3 0 0 0 0

43.0 - Interest and dividends 15 0 0 0 0

Total Non-Personnel 139,400 81,925 58,370 140,295 126,373

Subtotal New Appropriated Resources 317,326 $222,500 $117,000 $339,500 $334,376

Budget Activities:

Executive Direction 56,990 59,597 0 59,597 50,417

International Affairs and Economic Policy 63,258 64,417 0 64,417 63,012

Domestic Finance and Tax Policy 116,760 125,265 0 125,265 100,650

Terrorism and Financial Intelligence 119,126 0 123,966 123,966 138,719

Treasury-wide Management and Programs 91,184 96,247 0 96,247 84,470

Total Budgetary Resources $447,319 $345,526 $123,966 $469,492 $437,268

FTE 1,354 1,069 406 1,475 1,456
DO - 16

2B – Appropriations Language and Explanation of Changes

Appropriation Language Explanation of Changes

DEPARTMENT OF THE TREASURY

DEPARTMENTAL OFFICES

Federal Funds

SALARIES AND EXPENSES

(INCLUDING TRANSFER OF FUNDS) 

For necessary expenses of the Departmental Offices 

including operation and maintenance of the Treasury Building and

[Annex] Freedman’s Bank Building; hire of passenger motor 

vehicles; maintenance, repairs, and improvements of, and purchase 

of commercial insurance policies for, real properties leased or 

owned overseas, when necessary for the performance of official 

business; executive direction program activities; international 

affairs and economic policy activities; domestic finance and tax 

policy activities, including technical assistance to [Puerto Rico] 

state and local entities; terrorism and financial intelligence 

activities; and Treasury-wide management policies and programs 

activities, [$222,500,000] $334,376,000: Provided, That of the 

amount appropriated under this heading—

(1) Not less than $117,000,000 is for the Office of Terrorism 

and Financial Intelligence to safeguard the financial system against 

illicit use and to combat rogue nations, terrorist facilitators, 

weapons of mass destruction proliferators, money launderers, drug 

kingpins, and other national security threats;

(2) not to exceed $350,000 is for official reception and 

representation expenses;

([2]3) not to exceed $258,000 is for unforeseen emergencies 

of a confidential nature to be allocated and expended under the 

direction of the Secretary of the Treasury and to be accounted for 

solely on the Secretary's certificate; and

([3]4) not to exceed [$22,200,000] $22,000,000 shall remain 

available until September 30, [2017] 2018, for—

(A) the Treasury-wide Financial Statement Audit and 

Internal Control Program;

(B) information technology modernization 

requirements;

[(C) the audit, oversight, and administration of the Gulf 

Coast Restoration Trust Fund; and]

(C) support for the Office of Terrorism and Financial 

Intelligence;

(D) the development and implementation of programs 

within the Office of Critical Infrastructure Protection and 

Compliance Policy, including entering into cooperative 

agreements[.]; and 

(E) international operations.

The Administration proposes

“state and local entities” 

because Treasury needs broad 

authority to provide technical 

assistance.

The Administration includes 

the Office of Terrorism and 

Financial Intelligence 

activities in the Salaries and 

Expenses appropriation to 

promote efficient budget 

execution.

Two-year funding requested 

for international operations 

to facilitate invoicing, receipt 

of reimbursements and 

obligation of funds for staff 

assigned to overseas posts 

including at international 

financial institutions 

pursuant to 5 U.S.C. § 3343.
DO - 17

Appropriation Language Explanation of Changes

Provided further, That, in addition to the amount 

otherwise made available under this heading, $7,000,000 shall 

remain available until September 30, 2018, for necessary 

expenses for carrying out subtitle F of title I of division A of 

Public Law 112–141, to be derived from the trust fund 

established under section 1602 of such Public Law, without 

altering the percentages of funds made available for other 

purposes from the remaining balance of the trust fund.

(Department of the Treasury Appropriations Act, 2016.)

OFFICE OF TERRORISM AND FINANCIAL 

INTELLIGENCE

SALARIES AND EXPENSES

(INCLUDING TRANSFER OF FUNDS)

[For the necessary expenses of the Office of Terrorism and 

Financial Intelligence to safeguard the financial system against 

illicit use and to combat rogue nations, terrorist facilitators, 

weapons of mass destruction proliferators, money launderers, 

drug kingpins, and other national security threats, $117,000,000: 

Provided, That of the amount appropriated under this heading: 

(1) not to exceed $27,100,000 is available for administrative 

expenses; and (2) $5,000,000, to remain available until 

September 30, 2017.]

(Department of the Treasury Appropriations Act, 2016.)

The Administration proposes 

language to fund the DO’s 

administration and oversight 

responsibilities under the 

RESTORE Act from the trust 

fund established by that act 

rather than annual 

discretionary appropriations. 

The Administration includes 

the Office of Terrorism and 

Financial Intelligence 

activities in the Salaries and 

Expenses appropriation. 

2C – Legislative Proposals

DO SE has no discretionary legislative proposals.

2D – Mandatory Program Proposals

RESTORE Act

As it did in the FY 2016 Budget, Treasury proposes legislative language for FY 2017 to allow 

Treasury to draw $7,000,000 from the Gulf Coast Restoration Trust Fund (GCRTF) for

management of the fund, including administering the civil and administrative penalties arising

from the Deep Water Horizon oil spill, supporting environmental and economic restoration of the

Gulf Coast region, and standing up grants, compliance, and audit programs. In light of the 

recent British Petroleum settlement that will provide the GCRTF with an additional $4.4 billion 

over a 15-year period, sustained funding for effective administration of this program over an 

extended period, a minimum of 15 to 20 years, is fundamental to the program’s success. 

Financing America’s Infrastructure Renewal (FAIR) 

The Budget proposes to establish a new federal credit program within the Department of the 

Treasury that would provide direct loans to U.S. infrastructure projects developed through a 

public-private partnership (P3). The Financing America’s Infrastructure Renewal (FAIR) 

program seeks to reduce the financing cost gap between P3s and traditional procurement, which 
DO - 18

will level the playing field for P3s and encourage the public sector—including state and local 

governments—to evaluate the merits of P3s for a given project. 

While P3s are not a solution to the nation’s overall infrastructure funding needs, which continue 

to deserve greater federal investment, they may generate certain public benefits. P3s are a 

financing and procurement tool that, in some circumstances, can accelerate the delivery of 

complex projects, leverage the resources and expertise of the private sector, mitigate construction 

and operational risks to the public sector, and reduce the likelihood of deferred maintenance on a 

project. Eligible projects under the program will encompass the transportation, water, energy, 

and broadband sectors, as well as certain social infrastructure, and must meet all applicable 

environmental and labor standards.

The program is estimated to provide $15 billion in direct loans over 10 years. The interest rate 

on the loans will be priced above equivalent-term U.S. Treasury security rates to reflect the 

credit risk (e.g. defaults, recoveries, and prepayments) associated with each project, allowing the 

program to attain a zero estimated subsidy cost.

Financial Innovation for Working Families Fund

The President’s Budget proposes $100 million for the Department of the Treasury to encourage 

the development of effective financial products that would help low- to moderate-income 

workers build up “rainy day” reserves. The reserves would provide these workers and their 

families with a buffer against shocks to income and spending needs. 

The program will provide funding to eligible competitors, including non-profits, community 

banks, Community Development Financial Institutions, entrepreneurial incubators, financial 

intermediaries, financial service providers (depository and non-depository), and other businesses 

that offer appropriate products. Recipients would use the funds to develop and study new 

financial products designed to overcome barriers to working families saving. 

To ensure that the products meet the program’s goals, demonstrations would be tied to strong 

evaluation plans. Demonstrations may include large-scale explorations of financial innovations 

with some existing track record. Examples include, but are not limited to, the following:

• Subsidized savings accounts with federal matching funds for progressive levels of savings,

• Dual-account models that automatically transfer money to savings accounts in periods of 

higher income and back to transaction accounts in periods of lower income,

• Payments set-aside accounts that prefund regular monthly payments, and

• Split retirement accounts where a portion of savings can be accessed penalty free if income 

dips or an individual loses a job.

Allotment for Puerto Rico EITC Payments

The Budget proposes a $600 million annual allotment, indexed to inflation, to create a locallyadministered refundable Earned Income Tax Credit (EITC) for residents of Puerto Rico. Unlike 

Americans living in the fifty states and the District of Columbia, residents of Puerto Rico are not 

eligible for an EITC. Given Puerto Rico’s low labor force participation rate, the existence of an 

EITC should increase employment in Puerto Rico’s official sector by providing higher incomes 

to workers who file taxes. This added incentive for participation in Puerto Rico’s formal 

economy should also increase Puerto Rican tax compliance and tax revenues.
DO - 19

Pay for Success 

Budget proposes a $300 million one-time mandatory appropriation for a new Pay for Success

(PFS) program in the Department of the Treasury. This program will support the growing 

number of state and local governments seeking to establish projects that use PFS financing. 

These projects leverage private investment to provide preventive social services 

that measurably improve outcomes for families and communities while generating value to 

the government, including savings. The program's focus on measurable outcomes will 

encourage innovation and accelerate the use of evidence-based approaches while supporting 

solutions that work across traditional silos of funding or services. The program will provide 

results-based success payments to eligible intermediaries, including state and local governments, 

as well as credit enhancement and support for feasibility studies and project evaluations. 
DO - 20

Section 3 – Budget and Performance Plan

3A – Executive Direction

($38,240,000 from direct appropriations, and $12,177,000 from reimbursable resources): 

The Executive Direction program area provides direction and policy formulation to the 

Department and Departmental Offices and interacts with Congress and the public on 

Departmental policy matters.

No specific performance goals/measures are presented for this budget activity as the work of 

these offices is captured within the other budget activities.

3.1.1 – Executive Direction Budget Activity Budget and Performance Plan

Dollars in Thousands

Executive Direction Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $24,709 $37,272 $37,219 $35,763 $34,588 $35,313 $37,943 $38,240

 Other Resources $1,656 $3,570 $4,545 $4,691 $15,137 $21,677 $21,404 $12,177

Budget Activity Total $26,365 $40,842 $41,764 $40,454 $49,725 $56,990 $59,347 $50,417

3B – International Affairs and Economic Policy

($59,467,000 from direct appropriations, and $3,545,000 from reimbursable resources): 

The offices in this budget activity promote economic growth in the U.S. by producing technical 

economic analyses for the Secretary and advancing U.S. economic and financial policy priorities 

around the world.

Office of Economic Policy (EP)

This office supports the following strategic objectives for Strategic Goal #1, to promote domestic 

economic growth and stability while continuing reforms of the financial system:

• Objective 1.1: Promote savings and increased access to credit and affordable housing options.

• Objective 1.3: Complete implementation of financial regulatory reform initiatives, continue 

monitoring capital markets, and address threats to stability.

This office also supports the following strategic objective for Strategic Goal #2, to Enhance U.S. 

competitiveness and job creation, and promote international financial stability and more balanced 

global growth.

• Objective 2.1: Promote free trade, open markets, and foreign investment opportunities.

Description of Performance:

During the past year, Economic Policy staff constructed the Treasury Real Coupon-Issue Yield 

Curve, a companion to the Treasury Nominal Coupon-Issue Yield Curve. These data will be 

used by federal agencies that administer federal pension programs and other future payment 

programs to calculate their annual liabilities. Economic Policy also produced an estimate of state 

Total Taxable Resources, which estimates the relative fiscal capacity of states and is used in 

determining the allocation of funds for the Community Mental Health Services and Substance 

Abuse Prevention and Treatment block grant programs. Economic Policy wrote a paper titled, 
DO - 21

“Expanding the Market for Infrastructure: Public-Private Partnerships,” designed to educate 

stakeholders on innovative infrastructure financing approaches, particularly public private 

partnerships, and to assess the current state of our infrastructure. Economic Policy also authored 

a report, jointly with the Council of Economic Advisers and the Department of Labor, 

“Occupational Licensing: A Framework for Policymakers,” which analyzes the growth and 

economic consequences of occupational licensing. 

During FY 2015, the Office of Economic Policy continued to participate in the development and 

implementation of housing policy, including enhancing the Making Home Affordable

program, by making incentives available to potentially one million struggling borrowers to stay 

current in their Home Affordable Modification Program modifications, thereby increasing the 

opportunity to stay in their home. Economic Policy continued to produce the corporate bond 

yield curve, used by pension plans to discount their pension liabilities.

Office of International Affairs (IA)

This office supports the following strategic objective for Strategic Goal #1, to promote domestic 

economic growth and stability while continuing reforms of the financial system:

• Objective 1.3: Complete implementation of financial regulatory reform initiatives, continue 

monitoring capital markets, and address threats to stability.

This office also supports the following strategic objectives for Strategic Goal #2, to enhance U.S. 

competitiveness and job creation, and promote international financial stability and more balanced 

global growth:

• Objective 2.1: Promote free trade, open markets, and foreign investment opportunities.

• Objective 2.2: Protect global economic and financial stability and press for marketdetermined foreign exchange rates.

• Objective 2.3: Advance U.S. economic, financial, and national security goals by leveraging 

multilateral mechanisms.

• Objective 2.4: Provide technical assistance to developing countries working to improve 

public financial management and strengthen their financial systems.

Description of Performance:

In FY 2015, the Office of International Affairs (IA) helped ensure a favorable external 

environment for sustained job growth and financial stability in the U.S. by prioritizing its work 

around five themes: Trade and Investment; Global Rebalancing; International Financial Stability; 

Management; and International Development.

In its role as lead on non-insurance financial services and on transfers negotiations, Treasury

completed the negotiation of the financial services chapter and the transfers provision in the TransPacific Partnership (TPP) agreement; Treasury also negotiated the Joint Declaration of the 

Macroeconomic Authorities of TPP Countries to address unfair currency practices by promoting 

transparency and accountability. Treasury will continue working to implement the TPP, which is 

to include countries that account for one-third of global trade, and the Joint Declaration. 

Treasury also supported the Administration in pursuing negotiations for the Transatlantic Trade 

and Investment Partnership with the European Union, the Trade in Services Agreement with 24

other like-minded countries to liberalize services trade, and the Bilateral Investment Treaty with 

China. In addition, as the U.S. lead in negotiating international disciplines on officially 
DO - 22

supported export credits, Treasury is pressing within the International Working Group on Export 

Credits to establish a new set of international guidelines encompassing both Organisation for 

Economic Co-operation and Development (OECD) and non-OECD countries, including China.

Treasury works to address the large and persistent imbalances between countries that threaten 

sustainable U.S. economic growth through multilateral and bilateral activities, such as the G-20 

and the U.S.-China Strategic & Economic Dialogue (S&ED). In December 2014, the G-20

leaders endorsed a U.S.-led initiative—The Brisbane Action Plan— to boost demand over the

near-term that, if fully implemented, could increase the combined GDP of the G-20 countries by

as much as 2.1 percent over current estimates by 2018. At the June 2015 S&ED, Treasury

secured commitments from China on the negotiation of international export credit disciplines,

market access for U.S. high-technology goods and services, and expanded participation in

China’s markets by U.S. financial services providers.

In FY 2015, Treasury continued to support the U.S. economy’s recovery by mitigating the threat 

from weak growth in the euro area and working to limit negative economic and financial 

spillovers from the crisis in Greece and the conflict in Ukraine. Specific activities included: 

working with European counterparts to help maintain long-term sustainability of the euro; 

advancing the establishment of a centralized European banking union; working with the IMF and 

others to monitor progress towards economic stabilization in vulnerable, strategically important 

countries; implementing technical assistance and loan guarantee programs for Ukraine; and 

placing a Treasury Financial Attaché in U.S. embassies in Kiev and Ankara.

Treasury leverages multilateral mechanisms to advance inclusive economic growth worldwide 

through IA’s work in support of the Multilateral Development Banks’ (MDBs) financing in 

developing countries; G-20 initiatives on financial inclusion and infrastructure finance; and the

Paris Club’s targeted debt relief efforts. In FY 2015, Treasury led the U.S. negotiating team for 

the Addis Ababa Action Agenda, the outcome document of the Third International Conference 

on Financing for Development. The Addis Action Agenda will serve as a foundational 

document for financing and implementing the “Sustainable Development Goals,” which was

agreed to by leaders at a Summit in September 2015. Treasury also enhanced its oversight of the 

MDBs’ policies and programs, including major reviews of the World Bank’s environmental and 

social safeguards, procurement, and shareholding. Treasury helped the MDBs make optimal use 

of their balance sheets, including through a major reform of the Asian Development Bank’s two 

lending windows. 

This year the Treasury Under Secretary for International Affairs led a strategic review of the 

office that rebalanced resource allocations to reflect changing mission requirements. Areas 

addressed in the reallocation include the increasing demands associated with coordinating 

international financial regulatory reform and chairing the Committee on Foreign Investment in 

the United States (CFIUS). Treasury created the new position, Deputy Assistant Secretary for 

International Financial Stability and Regulation, and developed additional international capital 

markets expertise to help ensure U.S. firms are not at a competitive disadvantage when providing 

financial services or accessing financial markets. IA also devoted greater resources to managing 

the growing volume and complexity of CFIUS cases.
DO - 23

Treasury, as chair of CFIUS, coordinates an interagency process to review certain foreign 

investments for national security risks in accordance with the procedures and tight deadlines 

specified in law and regulation.

• Timely Review of CFIUS Cases: This measure tracks compliance with statutory deadlines 

for completing national security reviews of transactions notified to the CFIUS to ensure that 

the CFIUS process is timely and efficient. The target (100 percent) was met in FY 2015.

IA’s target for this measure in FY 2016 and FY 2017 is 100 percent.

Treasury promotes economic growth by managing U.S. participation and leveraging U.S. 

leadership positions in the International Financial Institutions in order to mitigate emerging 

threats to the U.S. and global economies; support international trade and investment; and 

reinforce U.S. national security interests in key countries around the world.

• Monitor Quality and Enhance Effectiveness of International Monetary Fund (IMF)

Lending through Review of IMF Country Programs: This measure tracks efforts by IA staff

to monitor the quality of IMF country programs and ensure the application of appropriately 

high standards for the use of IMF resources. The target (100 percent) was met in FY 2015. In

FY 2016 and FY 2017, IA’s target for this measure remains 100 percent.

• Monitor Quality and Enhance Effectiveness of MDB Lending through Timely Review 

of MDB Grant and Loan Proposals: IA reviews MDB loan and grant proposals to ensure that 

funded projects meet several key goals, which include supporting long-term U.S. objectives, 

having a measurable development impact, and being consistent with congressional mandates. 

The target (100 percent) was met in FY 2015. In FY 2016 and FY 2017, IA aims to continue 

its review of 100 percent of MDB loan and grant proposals prior to the date of the relevant 

Executive Board meeting and increase its oversight of projects during implementation.

Finance ministries and central banks of developing countries that have demonstrated strong 

commitment to reforming their financial systems or public financial management can receive 

direct assistance from the Office of Technical Assistance through its cadre of expert advisors. 

The technical assistance team leverages its funding to increase transparency and accountability, 

reduce corruption, and strengthen the development of market-based policies and practices in 

these economies. This work supports stabilization of financial sectors in national 

security/foreign policy priority countries (e.g., Ukraine), more transparent and accountable 

financial sectors for U.S. investors overseas, and the expansion of markets for U.S. exporters, 

thus promoting jobs and economic growth at home.

Office of Technical Assistance (OTA): Program Engagement (Traction) measures the degree to 

which foreign counterparts are engaging proactively and constructively with OTA advisors, at the 

working and policy levels. Counterpart engagement is both a key outcome of OTA efforts to 

structure and execute effective technical assistance projects that support host country ownership 

as well as the most crucial input to the successful achievement of the intermediate goals and 

ultimate outcomes described in the project’s terms of reference and work plan during the fiscal 

year – such as passage of law or regulation, an increase in government revenues, an improvement 

in a government’s credit rating, or a reduction in economic crimes. The measure is scored on a 5-

point scale and averaged across all projects to provide one overall measure of OTA’s 
DO - 24

performance. In FY 2015 the Traction score was 3.8, exceeding the target of 3.6. In FY 2016 and 

FY 2017, IA’s target for Traction is 3.6.

OTA discontinued externally reporting on program “impact” due to several reasons: extraneous 

factors can significantly affect the measure, which makes it unsuitable for target-setting; and the 

measure was misleading in that it implied a more direct connection than is warranted between 

Treasury technical assistance and the ultimate economic and financial sector achievements for 

foreign counterparts. While OTA’s work is important and necessary, ultimate outcomes 

(“impact”), such as strong financial sectors and sound management of public finance that support 

financial stability, investment, and economic growth, are largely the product of a host country’s 

policy and political environment, the commitment of in-country actors to reform overall economic 

conditions, and in some cases the country’s security environment. 

For internal program management purposes, OTA will continue to collect and analyze data on 

“impact” on a project-by-project basis. Both “impact” and “traction” measures will continue to 

inform program decision making, along with other information such as project reporting and 

assessment missions, including decisions about which projects to continue or terminate.

3.1.2 – International Affairs and Economic Policy Budget and Performance Plan

Dollars in Thousands

International Affairs and Economic Policy Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $47,539 $62,798 $59,277 $56,804 $56,265 $57,362 $58,520 $59,467

 Other Resources $5,233 $1,314 $1,293 $2,275 $4,891 $5,896 $5,842 $3,545

Budget Activity Total $52,772 $64,112 $60,570 $59,079 $61,156 $63,258 $64,362 $63,012

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

IA - Monitor Quality and 

Enhance Effectiveness of 

International Monetary Fund 

(IMF) Lending Through 

Review of IMF Country 

Programs 

97.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

IA - Monitor Quality and 

Enhance Effectiveness of 

MDB Lending Through 

Review of MDB Grant and 

Loan Proposals

N/A N/A N/A 100.0 100.0 100.0 100.0 100.0 100.0

IA - Percentage of MDB 

Grant and Loan Proposals 

Containing Satisfactory 

Frameworks for Results 

Measurement

92.5 94.0 94.0 92.0 N/A 93.0 94.0 94.0 100.0

IA - Timely Review of 

CFIUS Cases

N/A N/A N/A 100.0 100.0 100.0 100.0 100.0 100.0

OTA - Program 

Engagement)

3.5 3.7 3.9 3.8 3.7 3.8 3.6 3.6 3.6

Key: DISC - Discontinued
DO - 25

3C – Domestic Finance and Tax Policy

($76,304,000 from direct appropriations, and $24,346,000 from reimbursable resources): 

The offices within Domestic Finance and Tax Policy monitor and provide advice and assistance 

to the Secretary in their respective areas, as well as on financial markets and the regulation of 

financial institutions.

Office of Tax Policy

This office supports the following strategic objective for Strategic Goal #2, to enhance U.S. 

competitiveness and job creation, and promote international financial stability and more balanced 

global growth:

• Objective 2.1: Promote free trade, open markets, and foreign investment opportunities.

This office supports the following strategic objective for Strategic Goal #3, to fairly and 

effectively reform and modernize federal financial management, accounting, and tax systems:

• Objective 3.3: Pursue tax reform, implement the Patient Protection and Affordable Care Act 

(ACA) and Foreign Account Tax Compliance Act, and improve the execution of the tax

code.

Description of Performance:

In FY 2015, the Office of Tax Policy continued to implement ACA, entered into signed 

agreements to implement FATCA and released guidance on the ABLE Act of 2014. In addition, 

the office provided the Administration and Department of Education a detailed analysis of the 

outcomes of students who receive federal aid to attend post-secondary institutions. To further 

the goal of enhancing U.S. competiveness and job creation and encouraging cross-border trade 

and investment, the Office of Tax Policy finalized a comprehensive tax treaty between the U.S. 

and Vietnam and also worked closely with the OECD to finalize 12 reports serving as 

deliverables for the BEPS project to address base erosion and profit shifting in a comprehensive 

manner.

Office of Domestic Finance (DF)

This office supports the following strategic objectives for Strategic Goal #1, to promote domestic 

economic growth and stability while continuing reforms of the financial system:

• Objective 1.1: Promote savings and increased access to credit and affordable housing options.

• Objective 1.2: Wind down emergency financial crisis response programs.

• Objective 1.3: Complete implementation of financial regulatory reform initiatives, continue 

monitoring capital markets, and address threats to stability.

This office also supports the following strategic objectives for Strategic Goal #3, to fairly and 

effectively reform and modernize federal financial management, accounting, and tax systems:

• Objective 3.1: Improve the efficiency and transparency of federal financial management and

Government-wide accounting.

• Objective 3.2: Improve the disbursement and collection of federal funds and reduce improper 

payments made by the U.S. Government.

This office also supports the following strategic objectives for Strategic Goal #4, safeguard the 

financial system, and use financial measures to counter national security threats:
DO - 26

• Objective 4.3: Improve the cybersecurity of our nation’s financial sector critical 

infrastructure.

As highlighted in the FY 2015 Strategic Objective Annual Review (SOAR) in April, DF’s efforts 

related to Strategic Objective 4.3 were recognized as achieving noteworthy progress , although 

due to the vast and evolving nature of the cyber threat, the objective was also categorized as a 

Focus Area for Improvement.

Description of Performance:

The Office of Domestic Finance (DF) continued working to preserve confidence in the U.S. 

Treasury market in FY 2015 by effectively managing federal fiscal operations, strengthening 

financial institutions and markets, promoting access to credit, and improving financial access and 

education in service of America’s long-term economic strength and stability.

DF’s Office of Critical Infrastructure Protection and Compliance Policy (OCIP) established the 

Financial Sector – Cyber Intelligence Group to focus on cybersecurity information sharing with the

financial sector. Its purpose is to increase the volume, timeliness, and quality of cyber threat 

information shared between the government and the financial services sector as called for under

Executive Order 13636 on Improving Critical Infrastructure Cybersecurity and Presidential 

Policy Directive 21 on Critical Infrastructure Security and Resilience. 

The Office of Financial Stability continued to responsibly wind down investments in the 

Troubled Asset Relief Program (TARP) and support distressed homeowners. In December 2014, 

Treasury sold all of its remaining 54.9 million shares of Ally common stock for approximately 

$1.3 billion, exiting the last TARP equity investment under the Auto Industry Financing 

Program. As of December 2015, the percentage of TARP investments remaining (as a 

percentage of the overall investment) had decreased to 0.2 percent from the 2014 level of 

0.7 percent. The cumulative TARP amount recovered increased in FY 2015 to nearly 

$442 billion as of December 2015. As of the end of FY 2015, there are 20 institutions remaining 

in the Capital Purchase Program (CPP), which has generated $227 billion in proceeds for 

taxpayers.

DF has one performance measure:

• Variance between estimated and actual receipts (annual forecast) (percent): As part of 

managing the Government’s central operating account and cash position, the Office of Fiscal 

Projections (OFP) forecasts net cash flows (e.g., federal receipts, outlays, and other 

miscellaneous flows) to ensure that adequate funds are available daily to cover federal 

payments. To determine its overall effectiveness, one of OFP’s metrics is to measure the 

variance between actual and projected federal receipts.

The actual variance for FY 2015 was 2.8 percent, which is significantly lower than the 

4.25 percent target for FY 2015. Therefore, performance was better than the target level. In 

addition, the FY 2015 performance compares favorably with the actual variance for FY 2014, 

which was 3.25 percent. The target for both FY 2016 and FY 2017 is 4.25 percent.
DO - 27

3.1.3 – Domestic Finance and Tax Policy Budget Activity Budget and Performance Plan

Dollars in Thousands

Domestic Finance and Tax Policy Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $44,373 $64,201 $71,451 $68,351 $81,783 $76,520 $84,591 $76,304

 Other Resources $10,889 $31,345 $11,629 $12,804 $24,977 $40,240 $40,283 $24,346

Budget Activity Total $55,262 $95,546 $83,080 $81,155 $106,760 $116,760 $124,874 $100,650

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

DF - Variance Between 

Estimated and Actual 

Receipts (Annual 

Forecast)(%)

5.8 4.4 3.8 2.5 3.25 2.8 4.25 4.25 4.25

Key: DISC – Discontinued

3D – Terrorism and Financial Intelligence

($117,000,000 from direct appropriations, and $21,719,000 from reimbursable resources): 

This office supports the following strategic objective for Strategic Goal #2, to enhance U.S. 

competitiveness and job creation, and promote international financial stability and more balanced 

global growth:

• Objective 2.3: Advance U.S. economic, financial, and national security goals by leveraging 

multilateral mechanisms.

This office also supports the following strategic objective for Strategic Goal #4, to safeguard the 

financial system and use financial measures to counter national security threats:

• Objective 4.1: Identify priority threats to the financial system using intelligence analysis and 

outreach to the financial sector.

• Objective 4.2: Develop, implement, and enforce sanctions and other targeted financial 

measures.

• Objective 4.3: Improve the cybersecurity of our Nation’s financial sector critical 

infrastructure.

• Objective 4.4: Protect the integrity of the financial system by implementing, promoting, and 

enforcing anti-money laundering and counterterrorism financing standards.

Description of Performance:

The Office of Terrorism and Financial Intelligence (TFI) marshals the Department's intelligence

and enforcement functions with the twin aims of safeguarding the financial system against illicit 

use and combating rogue nations, terrorist facilitators, weapons of mass destruction proliferators, 

money launderers, drug kingpins, and other national security threats. Under the Executive Order

and legislation umbrellas, TFI supports Treasury’s strategic and priority goals by the

implementation of specific sanctions tailored to block assets or impose trade restrictions.

As highlighted in the FY 2015 SOAR, TFI maintained unified cross-organizational priorities and 

successfully increased intelligence reports production on Russia/Ukraine, Iran, and ISIL. 

Further, TFI produced numerous quick turnaround analyses on Iran nuclear negotiations for 
DO - 28

Treasury and the Administration. Next steps include assessing and improving internal clearance 

processes, developing and implementing the TFI Strategic Plan, developing new performance 

measures that align to the new strategic plan, and clarifying roles and responsibilities to better 

coordinate within the organization. 

TFI's performance metric is:

Impact of TFI Programs and Activities: In order to gauge its performance, TFI created a 

composite measure consisting of three program office focus areas related to its mission and 

strategic goals, including customer outreach, increasing budget production and dissemination of 

intelligence products, and implementing IT modernization projects. In FY 2015, TFI exceeded 

its performance goal of 8.5 with a score of 8.8 and expects to achieve its FY 2016 and FY 2017

target of 8.5.

3.1.4 – Terrorism and Financial Intelligence Budget Activity Budget and Performance Plan

Dollars in Thousands

Terrorism and Financial Intelligence Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $63,601 $99,532 $100,000 $96,116 $101,305 $112,160 $117,0000 $117,000

 Other Resources $6,208 $18,989 $31,225 $30,832 $31,293 $6,966 $6,966 $21,719

Budget Activity Total $69,809 $118,521 $131,225 $126,948 $132,598 $119,126 $123,966 $138,719

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Impact of TFI Programs 

and Activities

7.4 7.6 8.1 8.3 8.5 8.8 8.5 8.5 8.5

Key: DISC - Discontinued

3E – Treasury-wide Management and Programs

($43,365,000 from direct appropriations, and $41,105,000 from reimbursable resources): 

This budget activity includes offices that are responsible for the internal management and policy 

of the Department: the Office of the Assistant Secretary for Management, the Office of the Chief

Information Officer; the Office of Privacy, Transparency, and Records; the Office of the

Procurement Executive; the Office of Chief Human Capital Officer; the Office of Emergency

Programs; the Office of the Deputy Chief Financial Officer; and the Office of the Deputy

Assistant Secretary for Management and Budget.

This office supports the following strategic objective for Strategic Goal #5, to create a 21stcentury approach to government by improving efficiency, effectiveness, and customer

interaction.

• Objective 5.1: Increase workforce engagement, performance, and diversity by instilling 

excellence, innovation, and inclusion in Treasury’s organizational culture and business 

practices.

• Objective 5.2: Support effective, data-driven decision-making and encourage transparency 

through intelligent gathering, analysis, sharing, use, and dissemination of information.

• Objective 5.3: Promote efficient use of resources through shared services, strategic sourcing, 
DO - 29

streamlined business processes, and accountability.

• Objective 5.4: Create a culture of service through relentless pursuit of customer value.

Description of Performance:

In FY 2015, Treasury continued execution of its FY 2014-2017 Human Capital Strategic Plan, 

focusing efforts on improving quality in the delivery of human capital services and increasing 

workforce engagement, performance, and diversity. In response to problems identified in 

Human Capital Assessment and Accountability Framework bureau audits, the Chief Human 

Capital Officer directed a year-long project called “Focus on Fundamentals” including databased reviews and training on the application of Merit System Principles and prevention of 

Prohibited Personnel Practices. Treasury expects to apply for the Office of Special Counsel’s 

Section 2302 certification (that employees are informed of the rights and remedies available to 

them under the Whistleblower Protection Act and related laws) in the second quarter of FY 2016. 

For the past three years, Treasury has been conducting workforce planning (WFP) studies of 

mission-critical occupations. In 2015, Treasury targeted Cybersecurity for a WFP study 

including adapting its WFP tool to incorporate multi-sector workforce evaluation of 

Cybersecurity service contracts by applying the NICE (National Initiative for Cybersecurity 

Education) framework of work categories and specialty areas. The Treasury Executive Institute 

secured Office of Personnel Management approval for a shared-service Senior Executive Service

candidate development program (CDP) and commenced its first CDP class in June 2015 with 27 

candidates from five Treasury bureaus and five external agencies.

For FY 2015, the Department received its sixteenth consecutive unmodified audit opinion on its 

Treasury-wide financial statements. Overall, the Department has made strong progress in 

enhancing its internal control environment, and remains committed to ensuring high standards of 

integrity and transparency in reporting its financial performance.

Management’s performance metrics are:

• Treasury-wide Footprint (Square Footage): This goal measures the total square footage 

occupied by Treasury’s owned and leased buildings. To reduce the Department’s real 

property footprint and maximize the use of existing real property assets, the Department 

maximized space utilization by undertaking space realignments, consolidations, and through 

improved work station standards.

• Treasury-wide Percentage of Procurement Dollars Spent on Small Business: The Treasury 

Office of Small and Disadvantaged Business Utilization (OSDBU) implements aspects of the 

United States Small Business Act for the Department of Treasury. The office is responsible 

for ensuring that Treasury achieves small business contracting objectives established by the 

Small Business Act. The OSDBU ensures that Treasury sets a reasonable goal for award of 

prime contracts to small businesses and has people, policy, and infrastructure in place to 

achieve all goals while supporting mission success. The office developed two new objectives 

in FY 2015. First, the office is analyzing the current Treasury small business portfolio to 

ensure that the small business community is given adequate opportunity to compete while 

fully supporting Treasury’s achievement of its mission. Second, the office is creating 

educational material to educate the small business community and the acquisition workforce 

on how small businesses can invest in themselves to compete for federal contracts.
DO - 30

The OSDBU identified significant trends in the data from 2011 to 2015 that are driving both 

objectives. First, from 2011 to 2015 the SBA consistently set an aggressive prime small 

business contracting goal. Each and every year from 2011 to 2015 as the small business 

prime percentage goal increased or remained flat around 35 percent the total number of 

contract awards to small business decreased. The total contract awards to small businesses 

decreased by half from 2011 to 2015. This is significant because fewer contract awards to 

small business means less capability and past performance in the small business community. 

OSDBU’s analysis also indicated that small businesses that are successful reinvest profits 

from federal contracts.

In FY 2014 Treasury achieved 36.91 percent of total procurement spending in the small 

business prime category with a Small Business Administration (SBA) established target of 

35.07 percent. Treasury exceeded the contracting goals for all socioeconomic small business 

categories in FY 2014. The FY 2015 overall small business prime goal was set at 35 percent 

by the SBA. Throughout FY 2015, Treasury continued to employ successful strategies to 

work toward achieving the small business goals with limited mission risk.

Treasury’s FY 2015 small business contract achievements are expected to be announced by 

the SBA in the spring or early summer 2016. Treasury expects to achieve an “A” on its 

small business scorecard. The SBA has set the Treasury FY 2016 agency small business 

prime goal at 37 percent, citing a need to ensure the Government as a whole achieves the 23 

percent federal mandate. 

• Treasury-wide Results-Oriented Performance Culture Scores (Index of the Federal Employee 

Viewpoint Survey [FEVS]): The FEVS Results-Oriented Performance Culture Index denotes 

the extent to which employees believe their organizational culture promotes improvement in 

processes, products and services, and organizational outcomes. The measure is being 

discontinued because it is being replaced with the two measures below, which address higher 

priority human capital issues.

• Treasury-wide “Engagement” Index of Federal Employee Viewpoint Survey (FEVS): 

Treasury implemented all milestones of OMB Memorandum M-15-04, “Strengthening. 

Employee Engagement and Organizational Performance” (December 23, 2014). In addition 

to bureau-level reviews, Treasury conducted two Treasury-wide Engagement review sessions 

for high-level leadership during FY 2015. Treasury also set goals to increase FEVS 

participation rates. Treasury had the largest number of completed surveys of any single 

agency (51,700) and increased participation rates from 58.8 percent in 2014 to 61.5 percent 

in 2015. Treasury’s scores for the Engagement Index remained at 66 percent for both 2014 

and 2015.

• Treasury-wide “Leaders Lead” Index of Federal Employee Viewpoint Survey (FEVS): 

Treasury also set the goal to increase the “Leaders Lead” index above 2014 results.

Treasury’s score for the Leaders Lead Index increased from 53 percent in 2014 to 54 percent 

in 2015.
DO - 31

• Treasury-wide Percentage of Discounts and Savings Achieved Through Strategically 

Sourced Contracts:

This goal measures the percentage of dollars saved as a result of aggregating requirements 

and leveraging spend against strategically sourced vehicles. Through the use of category 

management in federal contracting Treasury seeks to save the federal government money 

through smarter purchasing and getting the best price for the taxpayer. This program 

highlights efforts by Treasury to maximize the utility of the taxpayer dollar and achieve more 

efficiency with fewer resources. Treasury’s most recent successes are in the areas of wireless 

and numerous Federal Strategic Sourcing Initiative (FSSI) initiatives. In FY 2015, 

Treasury’s managed contracts achieved an estimated 15 percent discount savings off the 

GSA FSSI wireless contract prices, resulting in a discount savings of approximately $2.4

million. In FY 2015, Treasury mandated the use of four FSSI contract vehicles (Domestic 

Delivery Service, Office Supplies, Janitorial/Sanitation Supplies and 

Maintenance/Repair/Operations Supplies); Treasury’s FY 2015 total savings, were $8 

million, or approximately 26 percent off of the GSA schedule prices. Treasury will seek to 

build on these gains in the IT hardware and software areas in future years.

3.1.5 – Treasury-wide Management and Programs Budget Activity Budget and

Performance Plan

Dollars in Thousands

Treasury-wide Management and Programs Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $27,193 $43,670 $40,441 $35,223 $31,802 $35,971 $41,446 $43,635

 Other Resources $18,653 $14,284 $17,478 $15,320 $30,858 $55,213 $55,497 $41,105

Budget Activity Total $45,846 $57,954 $57,919 $50,543 $62,660 $91,184 $96,943 $84,470

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percent of Procurement 

Dollars Spent on Small 

Business

29.62 34.51 38.52 39.15 36.91 35.11 35.0 37.0 N/A*

Treasury-wide Footprint 

(Square Footage)

37,088 37,596 37,998 37,320 36,411 35,439 36,031 35,551 34,477

Treasury-wide ResultsOriented Performance 

Culture Scores (Index of the 

Federal Employee 

Viewpoint Survey [FEVS])

57.0 59.0 57.0 55.0 55.0 56.0 56.0 DISC DISC

Treasury-wide Engagement 

Index of the FEVS

N/A N/A 70% 68% 66% 66% 67% 67% 67%

Treasury-wide Leaders 

Lead Index of the Federal 

Employee Viewpoint Survey 

(FEVS)

N/A N/A N/A N/A 53.0 54.0 N/A 55.0 55.0

Key: DISC – Discontinued 

The measure is being replaced with “Engagement” and “Leaders Lead,” which are higher priority human capital issues.

*Targets negotiated annually.
DO - 32

Section 4 – Supplemental Information 

4A – Summary of Capital Investments

Information Technology Capital Investments

DO is focused on leveraging Treasury enterprise data centers to provide flexible, customized

information technology support for its customers. This strategy will securely facilitate enterprise 

mobile applications, increase support for telework, and drive long-term cost efficiencies through 

data center consolidation and expanded implementation of shared services.

DO continues to strengthen its governance through DO and an enterprise-wide investment review 

process. The investment review process is comprised of both senior business and technology

leaders who help to ensure that all technology investment decisions align with the mission and 

goals of the Department. The investment review process helps the CIO prioritize opportunities for

commodity IT and improved mission outcomes.

Non-Information Technology Capital Investments

The Main Treasury Building and Freedman’s Bank Building, formerly the Treasury Annex, are

the recipients of DO’s major non-IT capital investments. The Treasury Building is the oldest

departmental building and the third oldest federally occupied building in Washington, preceded 

only by the Capitol and the White House. The Main Treasury Building covers five stories and a

raised basement and sits on five acres of ground. It was dedicated as a National Historic Landmark 

on October 18, 1972. The Freedman’s Bank Building, also owned by the Department, is part of the

Lafayette Square National Register Historic District. On January 7, 2016, the Treasury Department 

renamed the Treasury Annex building to mark the 150th anniversary of the Freedman’s Savings 

and Trust Company (Freedman’s Bank). 

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Cybersecurity Enhancement

Account

FY 2017

President’s Budget

February 9, 2016
Cyber - 2

Table of Contents

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

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

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

1B – Vision, Priorities and Context.............................................................................................................. 3

Section 2 – Budget Adjustments and Appropriation Language ................................................................. 5

2.1 – Budget Adjustments Table .................................................................................................................. 5

2A – Budget Increases and Decreases Description ...................................................................................... 5

2.2 – Operating Levels Table ..................................................................................................................... 10

2B – Appropriations Language and Explanation of Changes .................................................................... 11

2C – Legislative Proposals......................................................................................................................... 11

Section 3 – Budget and Performance Plan ................................................................................................. 12

3A – Cybersecurity Enhancement Account (CEA).................................................................................... 12

Section 4 – Supplemental Information ....................................................................................................... 13

4A – Summary of Capital Investments....................................................................................................... 13
Cyber - 3

Section 1 – Purpose

1A – Mission Statement

The Cybersecurity Enhancement Account (CEA) is a new dedicated account designed to bolster the 

Department’s cybersecurity posture and mitigate cybersecurity threats to the U.S. financial 

infrastructure. 

1.1 – Appropriations Detail Table Dollars in Thousands

Cybersecurity Enhancement Account FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Internal Revenue Service 0 0 0 0 35 62,084 35 62,084 0.00% 0.00%

Treasury-wide 0 0 0 0 45 47,743 45 47,743 0.00% 0.00%

Subtotal New Appropriated Resources 0 $0 0 $0 80 $109,827 80 $109,827 0.00% 0.00%

Total Budgetary Resources 0 $0 0 $0 80 $109,827 80 $109,827 0.00% 0.00%

1B – Vision, Priorities and Context

In recent years there have been an increasing number of cyberattacks on critical government 

systems and Treasury aims to mitigate this escalating risk by creating a centralized cybersecurity 

account. CEA supports the Treasury Department Strategic Goal 3 to “Fairly and effectively reform 

and modernize federal financial management, accounting, and tax systems,” Strategic Goal 4 to 

“Safeguard the financial system and use financial measures to counter national security threats,” and 

Strategic Goal 5 to “Create a 21st-century approach to government by improving efficiency, 

effectiveness, and customer interaction.” 

The creation of a centralized program and dedicated funding source for cybersecurity will enhance

Department-wide coordination of cybersecurity efforts and improve the Department’s 

responsiveness to cybersecurity threats. It will also provide leadership with greater visibility into 

cybersecurity efforts and further encourage information sharing across Bureaus. The program will 

therefore improve the identification of cyber threats and better protect Treasury’s information 

systems from attack. With high-level leadership support, the program will also provide a platform 

to enhance efficiency, communication, collaboration, and transparency around a common goal—

improving not only the cybersecurity of the Department of the Treasury, but also that of the nation’s 

financial sector. 

The Deputy Secretary and Departmental Offices leadership will have oversight and input into the 

strategic direction of the CEA account, but the Treasury Department’s bureaus, will be authorized 

to use the account’s funding to implement bureau-specific initiatives that will improve the 

Department’s cybersecurity posture and mitigate cybersecurity threats to the U.S. financial 

infrastructure. With key leadership support of this centralized program, there will be a clear vision 

and one voice to ensure the entire Department is working towards a consistent path to enhancing 

cybersecurity. 

In FY 2017, the program includes investments in two budget activities (Treasury-wide and the 

Internal Revenue Service (IRS)). Spending on existing activities remains in the base budgets of 
Cyber - 4

each bureau. As the program matures, the goal is to integrate additional cybersecurity investments 

to fully leverage centralized cybersecurity leadership and expertise across the Department. 

The $48 million in Department-wide funding focuses on critical improvements to Treasury-wide 

systems including the Treasury Secure Data Network, the Fiscal Service Trusted Internet 

Connections, and the other systems that have been identified as High Values Assets. The 

investments focus on identifying and protecting information systems; detecting threat actors; and 

responding to and recovering from cyber incidents. A portion of the resources will also support a 

dedicated innovation fund for evolving high impact cyber investments throughout the Department. 

The $62 million in IRS investments focus on two main initiatives: Cyber Defense and eAuthentication. The enhancements are to existing systems and programs, as well as new CEA 

initiatives. The IRS will enhance the security of its overall networks via the use of a cyber threat 

forensics capability, implementation of a comprehensive patch management system, and the 

adoption of government-wide information security continuous monitoring (ISCM) tools as parts of 

a layered defense. The IRS has shut down numerous false IRS websites and phishing/malware 

sites. In this request, the IRS invests in the technology that allows for timely risk assessments, 

strong prevention techniques, and analysis of data that can identify and develop solutions for stolen 

identity theft refund fraud.
Cyber - 5

Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table

Dollars in Thousands

Cybersecurity Enhancement Account FTE Amount

FY 2016 Enacted 0 $0

Program Changes

Program Increases 80 $109,827

IRS Program Increases

 Cyber Defense 16 $54,732

 e-Authentication 19 $7,352

Treasury-wide Program Increases

 Pooled Innovation Fund for Evolving High Impact Cyber Investments 0 $10,000

 Encrypt Sensitive Data at Rest and in Motion 0 $7,440

 User Access Controls for Sensitive Applications 0 $5,727

 Digital Infrastructure Security Team 22 $5,000

 Digital Infrastructure Security Team (existing DO S&E program funded in the CEA) 6 $2,000

 Treasury Secure Data Network (TSDN) System Upgrades and Security Enhancements 4 $4,717

 Detect System Vulnerabilities and Unauthorized Data Transfers 0 $3,360

 Enhance Incident Response and Forensics Capabilities 0 $2,325

 Proactive Cyber Risk and Threat Identification 3 $2,098

 Mitigate Cyber Threats to U.S. Financial Infrastructure 8 $1,651

 Proxying Capability at the Fiscal Service Trusted Internet Connections (TICs) for Encrypted 0 $1,375

 Traffic Inspection

 IT Cybersecurity Enhancements (existing DO S&E program funded in the CEA) 2 $1,050

 Web Domain Encryption 0 $1,000

Subtotal Program Changes 72 $106,777

Total FY 2017 Estimated 80 $109,827

2A – Budget Increases and Decreases Description

Program Increases...............................................................................+$106,777,000/ +72 FTE

IRS Program Increases:

Cyber Defense +$54,732,000 / +16 FTE

Provides a set of capabilities that protect the agency’s sensitive data and enhances the security 

posture of its IT infrastructure. 

• Secure Data - $2,210,000 / +5 FTE - prevents, detects, and eliminates vulnerabilities associated 

with taxpayer, employee, and other sensitive but unclassified data;

• Enhanced External Site Reviews - $2,995,000 / +1 FTE - conducts contractor site reviews 

(lockbox banks, credit card processing sites, tax assessment organizations, etc.) to validate that 

security controls are in place; 

• Continuous Monitoring - $35,404,000 / +7 FTE - allows the IRS to improve its continuous 

monitoring functions to identify and respond to emerging cyber threats in real-time or near realtime by implementing a consistent, government-wide set of ISCM tools; and

• Cyber Preparedness - $14,123,000 / +3 FTE- provides a comprehensive incident response 

capability for planning, evaluating, testing, and maintaining the cyber resilience of mission 

critical IRS operations and their enabling technologies.

e-Authentication +$7,352,000 / +19 FTE

Resources for e-Authentication (eAuth) will allow the IRS to continue developing authentication 

capabilities and access controls required to expand the use of mobile devices, cloud computing, and 

collaborative technologies. This project will fund the design and implementation of a common 

service to verify user identity, register individuals, and provide and validate their credentials for 
Cyber - 6

ongoing system access. These capabilities will improve fraud detection and prevention through the 

suppression of unauthorized or suspicious user activity and will deter identity theft with a wider use 

of multi-factor authentication. 

Treasury-wide Program Increases:

Pooled Innovation Fund for Evolving High Impact Cyber Investments +$10,000,000 / +0 FTE 

Treasury’s bureaus and offices have varied missions where one organization may be targeted by a 

malicious actor or perceive a potential vulnerability prior to the rest of the Department. This may 

surface as an emerging threat vector that is critical to address. To ensure that these new and everevolving threats can be rapidly addressed before they are exploited, Treasury requests resources 

for a pooled innovation fund designed for Department-wide high impact cyber initiatives. 

Treasury leadership will manage the fund, to include receiving solicitations from across the 

Department and managing and dispersing resources based on criteria and need at Treasury offices 

and bureaus. 

Encrypt Sensitive Data at Rest and in Motion +$7,440,000 / +0 FTE – In addition to protecting 

information residing on HVAs through access control, Treasury has also identified several 

opportunities to protect these systems’ data at rest and in motion. This initiative area would 

support strong encryption of data at rest within HVA databases as well as encrypt data in transit via 

email and public-facing websites. This would also enable secure cloud computing by establishing a 

cloud environment certified at the Federal Risk and Authorization Management Program’s 

(FedRAMP) High security baseline. This initiative will also protect sensitive data through 

enhanced deployment of application firewalls and expanded user awareness training, which would 

lessen the risk of malicious and unintentional data breaches, respectively.

Digital Infrastructure Security Team +$7,000,000 / +28 FTE

The FY 2016 Consolidated Appropriations Act provides $2,000,000 and six FTE in the 

Departmental Offices (DO) Salaries and Expenses (S&E) account to establish a Digital

Infrastructure Security Team (DIST), which will form a centralized cohort of web/cyber experts to 

define, design and build Treasury’s digital services centered on these four goals:

• Build a digital services team that works across the Treasury Enterprise;

• Ensure the safe and secure delivery and use of digital services and protect information and 

privacy;

• Develop secure and user-friendly applications to improve service delivery to Treasury’s 

customers; and

• Enhance Treasury’s products and services to more rapidly and cost effectively deliver secure 

shared services.

Because of the Treasury-wide cybersecurity focus of this initiative, Treasury proposes to fund 

this initiative in the CEA in FY 2017. In addition, to build on the $2,000,000 provided in the 

FY 2016 Consolidated Appropriations Act in the Departmental Offices (DO) Salaries and 

Expenses (S&E) account, Treasury requests an additional $5,000,000 and 22 FTE, which will 

form a centralized cohort of web/cyber experts to protect and transform Treasury’s digital 

services. They will have a specific focus on a secure system that promotes ease of use and 

system cost-effectiveness, as well as possesses a robust virtual cybersecurity infrastructure to 

protect Treasury’s cyber assets, especially those assets with the greatest impact to citizens. 

Treasury’s digital government strategy will continue to be guided by four principles: 
Cyber - 7

• Prioritizing the safe and secure delivery and use of digital services and protecting information 

and privacy;

• Enabling secure access to high-quality digital government information and services anywhere, 

anytime, on any device;

• Unlocking the power of government data to spur innovation and improve the quality of 

services; and

• Procuring and managing secure devices, applications, and data in smart and affordable ways.

The digital service experts on the team will bring best practices in the disciplines of 

cybersecurity, design, software engineering, and product management to bear on the agency’s 

most important services. Treasury will increase operational and technical controls related to 

essential digital services functions, including security and privacy oversight, web application 

security, vulnerability assessment, predictive intelligence analysis, privacy analysis, and 

security coding and testing. This initiative will protect the data and infrastructure that supports 

U.S. citizens, while improving accessibility and maintaining transparency.

User Access Controls for Sensitive Applications +$5,727,000 / +0 FTE

Funding will strengthen the identification and authentication requirements for users logging on to 

individual Treasury applications. Strengthening these systems will decrease the likelihood that an 

intruder on the network would be able to access sensitive information regarding the public, the 

economy, and the Treasury workforce that is housed in these applications by implementing strong 

authentication at both the application level and the network level for applications identified as 

HVAs.

Treasury Secure Data Network (TSDN) System Upgrades and Security Enhancements 

+$4,717,000 / +4 FTE 

This investment will fund critical improvements to the TSDN in three areas: 

• Treasury requests hardware and technical support to transform TSDN into a private cloud at a 

remote data center. Through virtualization, the network will be more secure and will facilitate 

faster patching of newly-discovered vulnerabilities. Replacing this aging hardware with a 

cloud-based model will also improve mission productivity for system users, who are carrying 

out Treasury’s most sensitive functions; 

• This investment will increase incident response after-hours system maintenance and improve 

identification of anomalous and/or malicious behaviors. This investment in hardware, 

software, technical support and FTE will increase the NOC/SOC capabilities for the TSDN 

and will enhance security monitoring of the TSDN perimeter to a level commensurate with the 

system’s sensitivity; and

• This request will provide advanced toolsets for automated monitoring, as well as a dedicated 

analyst to review outputs from these toolsets. These capabilities will enable better detection of 

anomalous internal TSDN traffic, such as unauthorized attempts to access information and 

suspicious exfiltration of data. These additional safeguards will also enable compliance with 

several areas of Executive Order 13587, which instructs agencies operating classified networks 

to appropriately share and safeguard classified information on computer networks.

Detect System Vulnerabilities and Unauthorized Data Transfers +$3,360,000 / +0 FTE

The longer a breach goes unnoticed, the higher the probability that its severity will increase. For 

this reason, detection of anomalous and/or malicious activity must be spotted quickly. Increased 

deployment of data loss prevention tools to Treasury’s sensitive enterprise information systems will 

improve the Department’s ability to detect unauthorized access of information and track its 

movement across the network. Additionally, Treasury will adopt advanced intrusion detection 
Cyber - 8

methods and systems used by credit card companies to detect anomalous behavior to improve 

Treasury’s ability to detect malicious actors within its networks.

Enhance Incident Response and Forensics Capabilities +$2,325,000 / +0 FTE

In the event that malicious activity is discovered on Treasury’s networks, rapid response to and 

recovery from said activity is largely reliant on being able to examine past network traffic to 

understand where the adversary has traveled within the network, what information has been 

compromised, and how to mitigate and minimize the damage. Treasury needs to extend its 

retention of key data sources in order to support forensics and investigations of cyber 

incidents. Treasury seeks to enhance its respond and recover capabilities by extending network 

traffic capture and increase its capacity to aid bureaus during cyber incident investigations. This 

will result in a faster response and recovery time in the event of a cyberattack.

Proactive Cyber Risk and Threat Identification +$2,098,000 / + 3 FTE

The foundation of a strong cybersecurity program is proper identification of risk and threat vectors, 

and appropriate documentation of those risks and threats to enable decision making. This will be 

accomplished in part through strong security assessment and authorization of enterprise systems. 

Treasury will also establish a dedicated group of security experts to validate that systems have been 

engineered and developed securely from the outset. Additionally, this group will carry out 

penetration tests to uncover vulnerabilities in Treasury’s systems before they are discovered or 

exploited by adversaries.

Mitigate Cyber Threats to U.S. Financial Infrastructure +$1,651,000 / +8 FTE

Treasury requests funds and personnel to expand Treasury’s capabilities to promote the security 

and resilience of the financial services sector. (Treasury is the sector-specific lead agency under 

Presidential Policy Directive 21: Critical Infrastructure Security and Resilience.) The request will 

allow Treasury and its partners, including other federal agencies, to expand work with the financial 

services sector to improve the sharing of cybersecurity information, promote the use of best 

practices, and respond to cyber incidents. 

• Information Sharing. Over the past several years, malicious cyber activity has increased, and 

the financial services sector has been one of the major areas of concern. The number and extent 

of threats to financial services networks has grown significantly. To guard against these threats, 

it is vital to share timely and actionable cybersecurity information among the public and private 

sectors. Working closely with the Department of Homeland Security, the Federal Bureau of 

Investigation, and the Intelligence Community, Treasury develops timely and actionable 

information sharing products tailored specifically to the financial services sector. However, 

Treasury needs to expand and enhance its efforts to match the rapid increase in malicious cyber 

activity;

• Best Practices. Treasury also is responsible for promoting the use of best practices among the 

financial services sector. These best practices help improve baseline security levels. Treasury 

works to ensure that the needs and interests of the financial services sector are represented as 

such guidelines are developed and communicates opportunities for firms to participate in their 

development directly or through trade associations or consortia. Treasury requires additional 

specialized staff with knowledge or experience from the financial services sector who are 

experienced in how to engage the wider financial services community in the development, 

implementation, and promotion of voluntary cybersecurity standards and best practices in the 

sector and can operate from Treasury’s neutral perspective of promoting security, but not a 

specific technology; and
Cyber - 9

• Incident Response. Treasury is responsible for coordinating with firms and other agencies to 

respond to significant cyber incidents affecting the financial services sector. The number of 

significant cyber incidents impacting the financial services sector continues to rise. Therefore, 

Treasury must expand its capabilities to plan for and respond to major incidents through a 

strong and growing cybersecurity exercise program for the financial services sector and the 

development of appropriate incident response plans.

Proxying Capability at the Fiscal Service Trusted Internet Connections (TICs) for Encrypted 

Traffic Inspection +$1,375,000 / +0 FTE

Internet traffic is increasingly composed of encrypted messages that Treasury is unable to scan for 

threats. The procurement of additional hardware, software and Fiscal Service support will allow 

for 100 percent inspection of all in-bound and out-bound encrypted internet traffic and support 

compliance with Data Loss Prevention (DLP) policies

IT Cybersecurity Enhancements +$1,050,000 / +2 FTE

The FY 2016 Consolidated Appropriations Act provides $1,050,000 and two FTE in the DO S&E 

account for security enhancements to classified networks and expansion of DO’s Wireless Intrusion 

Prevention System. Because of the cybersecurity focus of this initiative, Treasury proposes to fund 

this initiative in the CEA in FY 2017.

Web Domain Encryption +$1,000,000 / +0 FTE 

This request meets compliance requirements for the OMB mandate M-15-13, requiring that all 

publically accessible federal websites and web services only provide service through a secure 

connection. Treasury will use these funds to ensure compliance of all new services and websites, 

as well as complete the transition of legacy sites. 

 
Cyber - 10

2.2 – Operating Levels Table

Dollars in thousands

Cybersecurity Enhancement Account FY 2015 FY 2016 FY 2017

Object Classification Operating Request Request

Plan

11.1 - Full-time permanent 0 0 10,293

11.5 - Other personnel compensation 0 0 162

11.9 - Personnel Compensation (Total) 0 0 10,455

12.0 - Personnel benefits 0 0 3,018

Total Personnel and Compensation Benefits $0 $0 $13,473

21.0 - Travel and transportation of persons 0 0 232

22.0 - Transportation of things 0 0 7

23.1 - Rental payments to GSA 0 0 75

23.3 - Communication, utilities, and misc charges 0 0 210

24.0 - Printing and reproduction 0 0 7

25.1 - Advisory and assistance services 0 0 14,245

25.2 - Other services 0 0 33,030

25.3 - Other purchases of goods & serv frm Govt accounts 0 0 6,077

25.4 - Operation and maintenance of facilities 0 0 88

25.6 - Medical care 0 0 13

25.7 - Operation and maintenance of equip 0 0 247

26.0 - Supplies and materials 0 0 21

31.0 - Equipment 0 0 42,021

32.0 - Land and structures 0 0 81

Total Non-Personnel 0 0 96,354

Subtotal New Appropriated Resources $0 $0 $109,827

Budget Activities:

Internal Revenue Service 0 0 62,084

Treasury-wide 0 0 47,743

Total Budgetary Resources $0 $0 $109,827

FTE 0 0 80
Cyber - 11

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation

of Changes

DEPARTMENT OF THE TREASURY

DEPARTMENTAL OFFICES

Federal Funds

CYBERSECURITY ENHANCEMENT ACCOUNT

(INCLUDING TRANSFER OF FUNDS)

For salaries and expenses for enhanced cybersecurity for systems operated 

by the Department of the Treasury $109,827,000, to remain available until 

September 30, 2019: Provided, That amounts made available under this 

heading shall be in addition to other amounts available to Treasury offices 

and bureaus for cybersecurity: Provided further, That amounts made 

available under this heading may be obligated and expended through 

allocation accounts available to individual offices and bureaus.

2C – Legislative Proposals

Cybersecurity Enhancement has no legislative proposals. 
Cyber - 12

Section 3 – Budget and Performance Plan 

3A – Cybersecurity Enhancement Account (CEA)

($109,827,000 from direct appropriations):

The purpose of CEA is to strategically mitigate cybersecurity risks through the creation of a

centralized program with Department-wide impact. 

Cybersecurity. Cybersecurity provides for the protection of all IT assets at the Department

including information, systems, networks, and processes relying on those assets. Due to the 

increasing number and sophistication of cyberattacks, Treasury leadership has prioritized 

cybersecurity through the creation of a new program and budget activity. Because this is a request 

for a new program in FY 2017, current spending on these activities remains in the base budgets of 

each bureau. 

Description of Performance:

Projects within Cybersecurity align to one or more Strategic Goals, including Goal 3 “Fairly and 

effectively reform and modernize federal financial management, accounting, and tax systems,”

Goal 4 “Safeguard the financial system and use financial measures to counter national security 

threats,” and Goal 5 “Create a 21st-century approach to government by improving efficiency, 

effectiveness, and customer interaction.” With the exception of the project to mitigate 

cybersecurity threats to U.S. financial infrastructure, all have the common purpose of strengthening 

the security of Treasury’s IT assets. Additionally, these projects will ensure compliance with both 

OMB and Executive Orders involving the security of government information technology assets. 

To achieve these objectives, Treasury will need to strategically procure hardware and software,

streamline business processes while expanding security monitoring, and ensure accountability at all 

levels. Performance measures exist internally and Treasury will work with OMB to select 

measures to report externally upon approval of this request.

 
Cyber - 13

Section 4 – Supplemental Information

4A – Summary of Capital Investments

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Department-wide Systems and

Capital Investments Program

FY 2017

President’s Budget

February 9, 2016
DSCIP - 2

Table of Contents

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

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

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

1B – Vision, Priorities, and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriations Language............................................... 4

2.1 – Budget Adjustments Table................................................................................................. 4

2A – Budget Increases and Decreases Description..................................................................... 4

2.2 – Operating Levels Table...................................................................................................... 5

2B – Appropriations Language and Explanation of Changes..................................................... 5

2C – Legislative Proposals.......................................................................................................... 5

Section 3 – Budget and Performance Plan ................................................................................. 6

3A – Department-wide Systems and Capital Investments Program........................................... 6

3.1.1 – Department-wide Systems and Capital Investments Program Budget Activity Budget 

and Performance Plan ................................................................................................................. 7

Section 4 – Supplemental Information........................................................................................ 8

4A – Summary of Capital Investments....................................................................................... 8
DSCIP - 3

Section 1 – Purpose

1A – Mission Statement

The Department-wide Systems and Capital Investments Program (DSCIP) is authorized to be

used by or on behalf of the Department of the Treasury’s bureaus, at the Secretary’s discretion, to 

improve infrastructure, modernize business processes, and increase efficiency through technology

investments.

1.1 – Appropriations Detail Table

Dollars in Thousands

Department-wide Systems and Capital 

Investments Program

FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Department-wide Systems and Capital 

Investments Program 0 2,725 0 5,000 0 5,000 0 0 0.00% 0.00%

Subtotal New Appropriated Resources 0 $2,725 0 $5,000 0 $5,000 0 $0 0.00% 0.00%

Total Budgetary Resources 0 $2,725 0 $5,000 0 $5,000 0 $0 0.00% 0.00%

1B – Vision, Priorities, and Context

DSCIP supports the Treasury strategic goal to “Create a 21st-century approach to government by

improving efficiency, effectiveness, and customer interaction” by enabling the Department to make

investments in capital improvements that support the missions of all Treasury bureaus and 

programs. In recent years, DSCIP investments have supported cybersecurity, enterprise content 

management, the Office of Financial Innovation and Transformation, and the Main Treasury

Building and the Freedman’s Bank Building (formerly the Treasury Annex building). The current 

DSCIP request proposes funding for Digital Accountability and Transparency Act (DATA Act)

requirements and the renovation of Treasury buildings.
DSCIP - 4

Section 2 – Budget Adjustments and Appropriations Language 

2.1 – Budget Adjustments Table

2A – Budget Increases and Decreases Description

Non-Recurring Costs ................................................................................-$5,000,000 / +0 FTE

Zero-Base Budget -$5,000,000 / +0 FTE

In the FY 2016 Consolidated Appropriations Act, $650,000 was provided for South Plaza 

Restoration of the Main Treasury Building. Also, $4,350,000 was provided to support missioncritical Treasury functions by investing in computing resources and security infrastructure. 

Investments are geared to meet the demand from multiple entities for the architecture needed to 

support big data. 

Program Increases ...................................................................................+$5,000,000 / +0 FTE

Digital Accountability and Transparency Act +$3,000,000 / +0 FTE 

This investment will support Department and bureau specific development, modification, and 

integration of attributes to address gaps at the transaction level for interfaces and help to ensure 

that the Department and all bureaus have resources to meet the minimum requirements for the 

DATA Act. While, the Department expects bureaus to undertake data validation, data 

stewardship, and data maintenance activities, this funding will be used to establish a data 

repository at the Department level. More specifically, the investment will support the expansion

of the Enterprise Data Management infrastructure to ensure that bureaus can leverage the 

repository for their own data analytics and uses.

Renovation of Treasury Buildings +$2,000,000 / +0 FTE 

Treasury requests $2,000,000 to stabilize the bridge that connects the motor pool entrance to the 

Main Treasury Building. Employees and contractors use the driveway under the bridge to access 

vehicle and bicycle parking, deliver equipment and mail, and for trash removal. The bridge poses

a safety risk in its current condition. 

Dollars in Thousands

Department-wide Systems and Capital Investments Program FTE Amount

FY 2016 Enacted 0 $5,000

Changes to Base

Non-Recurring Costs 0 ($5,000)

Zero-Based Budget 0 ($5,000)

Subtotal Changes to Base 0 ($5,000)

Total FY 2017 Base 0 $5,690

Program Changes

Program Increases 0 $5,000

Digital Accountability and Transparency Act 0 $3,000

Renovation of Treasury Buildings 0 $2,000

Subtotal Program Changes 0 $5,000

Total FY 2017 Request 0 $5,000
DSCIP - 5

2.2 – Operating Levels Table

Dollars in Thousands

Department-wide Systems and Capital Investments Program FY 2015 FY 2016 FY 2017

Object Classification Enacted Enacted Request

25.0 - Other contractual Services 0 200 0

25.1 - Advisory and assistance services 0 600 0

25.2 - Other services 1,500 600 3,000

25.3 - Other purchases of goods & serv frm Govt accounts 0 50 0

25.7 - Operation and maintenance of equip 0 1,500 0

26.0 - Supplies and materials 0 100 0

31.0 – Equipment 0 1,300 0

32.0 - Land and structures 1,225 650 2,000

Total Non-Personnel 2,725 5,000 5,000

Subtotal New Appropriated Resources $2,725 $5,000 $5,000

Budget Activities:

Department-wide Systems and Capital Investments Program 2,725 5,000 5,000

Total Budgetary Resources $2,725 $5,000 $5,000

FTE 0 0 0

2B – Appropriations Language and Explanation of Changes

Appropriations Language

Explanation of

Changes

DEPARTMENT OF THE TREASURY

DEPARTMENTAL OFFICES

Federal Funds

DEPARTMENT-WIDE SYSTEMS AND 

CAPITAL INVESTMENTS PROGRAMS

(INCLUDING TRANSFER OF FUNDS)

For development and acquisition of automatic data processing 

equipment, software, and services; and for repairs and renovations to 

buildings owned by the Department of the Treasury, $5,000,000, to 

remain available until September 30, [2018] 2019: Provided, That 

these funds shall be transferred to accounts and in amounts as 

necessary to satisfy the requirements of the Department's offices, 

bureaus, and other organizations [: Provided further, That 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, 2016.)

The Administration 

proposes to remove the 

language regarding IRS 

limitations, so that the 

DSCIP DATA Act request 

may support IRS 

implementation of the 

DATA Act.

2C – Legislative Proposals

The DSCIP has no legislative proposals.
DSCIP - 6

Section 3 – Budget and Performance Plan 

3A – Department-wide Systems and Capital Investments Program

($5,000,000 from direct appropriations):

The purpose of DSCIP funds is to improve infrastructure, modernize business processes, and 

increase efficiencies within Treasury and across the Government through capital investment.

Department-wide Information Technology Systems. The FY 2016 Consolidated Appropriations 

Act provided $4,350,000 to support mission-critical Treasury functions by investing in computing 

resources and security infrastructure. Investments are geared to meet the demand from multiple 

entities for the architecture needed to support big data. This environment will: 

• Enable secure access to a platform with the highest security threshold of the Federal 

Information Security Management Act of 2002 (FISMA) framework, containing Federal 

information and services anywhere, anytime.

• Create a secure gateway so that Treasury users can transverse across various internal and 

external networks to do their work.

• Unlock the power of data through enhanced analytic capabilities to ensure the availability of 

secure services. 

As a result, Treasury will provide secure shared services access to FISMA High enclaves while 

maintaining a rigorous security posture to solutions and services required for Treasury users to 

achieve Treasury’s mission.

Description of Performance:

Treasury has begun two internal studies to determine best strategies for full implementation of the 

Data Leakage Protection System (DLPS). It is expected that the $1.5 million, enacted in FY 2015 

for DLPS, will be fully obligated in FY 2016.

Treasury Building - Repairs and Renovations. The Main Treasury Building and the Freedman’s 

Bank Building (formerly the Treasury Annex) are owned by the Department and are Departmental 

Offices’ capital investments. The age and historical significance of the Main Treasury Building 

and the Freedman’s Bank Building create special conditions that do not exist in many other

Federal office facilities. Continual upkeep, with close attention to historic preservation, is 

necessary in order to continue occupying these buildings. Funds in the amount of $650,000 were

provided for in the FY 2016 Consolidated Appropriations Act to complete repairs to the South 

Plaza to correct deterioration to the paver stones and underlying setting bed that were causing an 

unstable walking surface and a hazard to employees that could have caused serious injury.

Description of Performance:

Window Repair and Replacement: To date, the bulk of the effort has been dedicated to preparing a 

scope of work for the Main Treasury window repair and replacement effort. Extensive surveys have 

been conducted to determine the range of damage and deterioration at each window location. 

Repair and replacement options have been explored to determine what approach best meets the 

needs of both keeping the building in a fully operational status and meeting the unique guidelines 

associated with this national historic landmark. With this criterion, the effort has also focused on 

improved energy efficiency and life-cycle cost considerations. The contract is expected to be 

awarded and work to begin by late spring 2016.
DSCIP - 7

Rain Leader Repair: Contracts are in place for select rain leader repairs and the restoration of areas 

that have undergone water damage. Work began in early FY 2016.

3.1.1 – Department-wide Systems and Capital Investments Program Budget Activity Budget

and Performance Plan

Dollars in Thousands

Department-wide Systems and Capital Investments Program Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Actuals Enacted Request

 Appropriated Resources $9,544 $3,992 $0 $0 $2,725 $2,725 $5,000 $5,000

Budget Activity Total $9,544 $3,992 $0 $0 $2,725 $2,725 $5,000 $5,000
DSCIP - 8

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The FY 2017 DSCIP funding requests support Departmental Offices capital investments as well 

as some bureau IT investments.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-Investments.aspx

This website also contains a digital copy of this document.

Office of Inspector General

FY 2017

President’s Budget 

February 9, 2016
OIG - 2

Table of Contents

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

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

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

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ........................................... 10

2.1 – Budget Adjustments Table............................................................................................... 10

2A – Budget Increases and Decreases Description................................................................... 10

Operating Levels Table............................................................................................................. 11

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

2C – Legislative Proposals........................................................................................................ 12

Section 3 – Budget and Performance Plan ............................................................................... 13

3A – Audit................................................................................................................................. 13

3.1.1 – Audit Budget Activity Budget and Performance Plan.................................................. 14

3B – Investigations ................................................................................................................... 14

3.1.2 – Investigations Budget and Performance Plan ............................................................... 15

Section 4 – Supplemental Information...................................................................................... 16

4A – Summary of Capital Investments..................................................................................... 16
OIG - 3

Section 1 – Purpose

1A – Mission Statement

The mission of the Office of Inspector General (OIG) is to promote the integrity, efficiency, and 

effectiveness in programs and operations within the Department of the Treasury and across the 

OIG’s jurisdiction.

1.1 – Appropriations Detail Table

Dollars in Thousands

Office of Inspector General FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 163 28,275 163 28,304 163 29,605 0 1,301 0.00% 4.60%

Investigations 31 7,076 31 7,112 31 7,439 0 327 0.00% 4.60%

Subtotal New Appropriated Resources 194 $35,351 194 $35,416 194 $37,044 0 $1,628 0.00% 4.60%

Other Resources:

Reimbursables 19 13,000 19 13,000 19 10,500 0 (2,500) 0.00% -19.23%

Subtotal Other Resources 19 $13,000 19 $13,000 19 $10,500 0 ($2,500) 0.00% -19.23%

Total Budgetary Resources 213 $48,351 213 $48,416 213 $47,544 0 ($872) 0.00% -1.80%

1B – Vision, Priorities, and Context

The OIG performs audits and investigations of Treasury programs and operations under its

jurisdiction, except for those of the Internal Revenue Service (IRS) and the Troubled Asset 

Relief Program (TARP), and keeps the Secretary of the Treasury and Congress fully informed of 

problems, deficiencies, and the need for corrective action. By statute, the OIG also performs 

oversight of the Gulf Coast Ecosystem Restoration Council, an independent Federal agency. 

The OIG has four components: (1) Office of Audit, (2) Office of Investigations, (3) Office of 

Counsel, and (4) Office of Management. The OIG is headquartered in Washington, D.C., and 

has an audit office in Boston, Massachusetts. 

-The Office of Audit, under the leadership of the Assistant Inspector General for Audit, 

performs and supervises audits, attestation engagements, and evaluations. The Assistant 

Inspector General for Audit has three deputies. One is primarily responsible for financial sector 

audits; one is primarily responsible for financial management, terrorist financing, and 

intelligence audits; and one is primarily responsible for cyber security and financial assistance 

audits. The Assistant Inspector General for Audit also serves as the Special Deputy Inspector 

General for Small Business Lending Fund (SBLF) Program Oversight. 

-The Office of Investigations, under the leadership of the Assistant Inspector General for 

Investigations, performs investigations and conducts initiatives to detect and prevent fraud, 

waste, and abuse in Treasury programs and operations under OIG jurisdiction. It also manages 

the Treasury OIG Hotline to facilitate reporting of allegations involving Treasury programs and 

activities. 

-The Office of Counsel, under the leadership of the Counsel to the Inspector General, 

provides legal advice to the Inspector General and all OIG components. The office represents 

the OIG, or coordinates such representation, in all legal proceedings and provides a variety of 
OIG - 4

legal services including (1) processing all Freedom of Information Act and other requests for 

information about government employees; (2) conducting ethics training; (3) ensuring 

compliance with financial disclosure requirements; (4) reviewing proposed legislation and 

regulations; (5) reviewing administrative subpoena requests; and (6) preparing for the Inspector 

General’s signature, cease and desist letters to be sent to persons and entities misusing the 

Treasury seal and name. 

-The Office of Management, under the leadership of the Assistant Inspector General for 

Management, provides services to maintain the OIG administrative infrastructure. 

Through the audit and investigative functions, the OIG supports the Department of the 

Treasury’s Fiscal Year (FY) 2014-2017 Strategic Plan goals, which are: Goal 1: Promote 

domestic economic growth and stability while continuing reforms of the financial system; 

Goal 2: Enhance U.S. competitiveness and job creation, and promote international financial 

stability and more balanced global growth; Goal 3: Fairly and effectively reform and modernize 

Federal financial management, accounting, and tax systems; Goal 4: Safeguard the financial 

system and use financial measures to counter national security threats; and Goal 5: Create a 21st

-

century approach to government by improving efficiency, effectiveness, and customer 

interaction. In support of Treasury’s Strategic Plan, the OIG established the following strategic 

goals.

• Promote the integrity, efficiency, and effectiveness of programs and operations across 

Treasury OIG’s jurisdictional boundaries through audits and investigations

• Proactively support and strengthen the ability of programs across Treasury OIG’s

jurisdictional boundaries to identify challenges and manage risks 

• Fully and currently inform stakeholders of Treasury OIG findings, recommendations, 

investigative results, and priorities

• Enhance, support, and sustain a workforce and strengthen internal operations to achieve the 

Treasury OIG mission, vision, and strategic goals

The FY 2017 request for the OIG will be used to fund critical audit, investigative, and mission 

support activities to meet the requirements of the Inspector General Act of 1978, and other 

statutes including, but not limited to the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank); Federal Information Security Modernization Act (FISMA);

Government Management Reform Act; Improper Payments Elimination and Recovery Act;

Digital Accountability and Transparency Act of 2014 (DATA Act); Federal Deposit Insurance 

Act, Small Business Jobs Act of 2010; and Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act of 2012 (RESTORE Act). 

Specific mandates include audits of the Department’s financial statements, the Department’s 

compliance with FISMA, failed insured depositary institutions regulated by Treasury, and 

spending data submitted by the Department to USAspending.gov. With the resources available 

after mandated requirements are met, the OIG will conduct audits of the Department’s highest 

risk programs and operations, and respond to stakeholder requests for specific work as 

appropriate. Some of the Department’s highest risk programs and operations include: (1) Cyber 

Threats, (2) Management of Treasury’s Authorities Intended to Support and Improve the 

Economy, (3) Efforts to Promote Spending Transparency and to Prevent and Detect Improper 
OIG - 5

Payments, (4) Anti-Money Laundering and Terrorist Financing/Bank Secrecy Act Enforcement,

and (5) Gulf Coast Restoration Trust Fund Administration.

Cyber Threats

Cybersecurity represents one of the most serious challenges facing the Nation today. A reliable 

critical infrastructure, including information systems and networks, is vital to our national 

security and economic stability. Cyber threats are a persistent concern as Treasury’s information 

systems are critical to the core functions of government and the Nation’s financial infrastructure. 

As cyber threats continue to evolve and become more sophisticated and subtle, they pose an 

ongoing challenge for Treasury to fortify and safeguard its internal systems and operations and 

the financial sector it oversees.

Attackers frequently exploit vulnerable networks in a string of trusted connections to gain access 

to government systems. Cyber-attacks against Federal agencies are increasing in frequency and 

severity. For example, the recent cyber-attacks against the Office of Personnel Management’s

networks allowed intruders access to personal data on tens of millions of people, including 

millions with security clearances.

Effective public-private coordination continues to be required to address the cyber threat against 

the Nation’s critical infrastructure. In this regard, Treasury is looked upon to provide effective 

leadership to financial institutions in particular, and the financial sector in general, to strengthen 

awareness and preparedness against cyber threats. 

Management of Treasury’s Authorities Intended to Support and Improve the Economy 

Congress provided Treasury with broad authorities to address the financial crisis under the 

Housing and Economic Recovery Act (HERA) and the Emergency Economic Stabilization Act 

(EESA) enacted in 2008, the American Recovery and Reinvestment Act of 2009 (Recovery Act), 

and the Small Business Jobs Act of 2010. In response to the call for further financial reform, 

Congress passed Dodd-Frank in July 2010. While Treasury’s program administration under 

these acts has, for the most part matured, challenges remain in managing these programs and 

their investments. 

This challenge focuses on the administration of the following broad authorities given to 

Treasury:

• Dodd-Frank established the Financial Stability Oversight Council (FSOC), which is chaired

by the Treasury Secretary. FSOC’s mission is to identify risks to financial stability that 

could arise from the activities of large, interconnected financial companies; promote market 

discipline; and respond to any emerging threats to the financial system. 

• The Small Business Jobs Act of 2010 created SBLF within Treasury through which $4 

billion was invested in financial institutions intended to increase the availability of credit to 

small businesses. It also provided $1.5 billion to Treasury to allocate to eligible state 

programs through the State Small Business Credit Initiative (SSBCI). These programs 

represent key initiatives of the Administration to support job creation by increasing lending 

to small businesses. 

• The Small Business Jobs Act also provided Treasury with authority to guarantee bonds

issued for eligible community and economic development activities. As the program 

administrator, Treasury’s Community Development Financial Institutions (CDFI) Fund 
OIG - 6

experienced challenges in standing up the program, which was eventually established in June 

2013. Treasury’s CDFI Fund oversees the issuance of the bonds and the use of the bond 

proceeds by eligible CDFIs to make financing more accessible in underserved communities.

• Under the HERA, Treasury supports the financial solvency of the Federal National Mortgage 

Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) 

which are under the conservatorship of the Federal Housing Finance Agency. To maintain 

the positive net worth of these two government sponsored enterprises (GSE), Treasury has 

invested approximately $187 billion in senior preferred stock in the two enterprises. While 

the GSEs have not required additional support since fiscal year 2012, their futures remain 

uncertain and further assistance may be required. If such support is needed, the current 

funding capacity available to Fannie Mae is $117.6 billion and available to Freddie Mac is 

$140.5 billion

• The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided Treasury 

with approximately $30 billion in non-IRS funding for low-income housing and specified 

energy properties for which OIG provides oversight. The level of risk involved in this 

program is evidenced by the fact that our Office of Investigations has several open matters 

involving program participants.

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

The Digital Accountability and Transparency Act of 2014 (DATA Act) requires the Federal 

Government to provide consistent, reliable, and useful online data about how it spends taxpayer 

dollars. 

To fulfill its purpose, the DATA Act imposed certain requirements on the Treasury Secretary, 

the Director of the Office of Management and Budget (OMB), the Inspectors General of each 

Federal agency, and the Comptroller General of the United States. In brief, the DATA Act 

required Treasury and OMB to (1) establish Government-wide financial data standards for 

reporting spending by Federal agencies and entities receiving Federal funds by May 2015; (2) by 

May 2017, ensure this financial data is accurately posted and displayed on USAspending.gov, or 

a successor system; and (3) by May 2018, ensure the data standards established are applied to the 

data made available on the website. Implementing the DATA Act is a complex undertaking 

requiring a significant level of interagency coordination and cooperation to develop, establish,

and apply new financial data standards and to develop new data handling methodologies within a 

short timeframe.

In light of the continuing problem with improper payments (estimated at $125 billion, or 4.5 

percent of all program outlays, for fiscal year 2014), the Federal Government has intensified 

efforts to reduce improper payments in major Federal programs. The Do Not Pay Initiative, and 

the Treasury Bureau of the Fiscal Service’s (Fiscal Service) Do Not Pay Business Center, are 

chief components of efforts designed to prevent and detect improper payments to individuals and 

entities. With its potential to reduce improper payments, the Do Not Pay Program is a major and 

important undertaking by Fiscal Service and Treasury.

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

Preventing criminals and terrorists from using financial networks to sustain their operations 

and/or launch attacks against the U.S. continues to be a challenge. Treasury’s Office of 

Terrorism and Financial Intelligence (TFI) is dedicated to disrupting the ability of terrorist 
OIG - 7

organizations to fund their operations. TFI brings together intelligence gathering and analysis, 

economic sanctions, international cooperation, and private-sector cooperation to identify donors, 

financiers, and facilitators supporting terrorist organizations, and disrupt their ability to fund 

such organizations. Enhancing the transparency of the financial system is one of the 

cornerstones of this effort. Treasury carries out its responsibilities to enhance financial 

transparency through the laws collectively known as the Bank Secrecy Act (BSA). The 

Financial Crimes Enforcement Network (FinCEN) is the Treasury bureau responsible for 

administering BSA, while Treasury’s Office of Foreign Assets Control (OFAC) administers U.S. 

foreign sanction programs. Given the criticality of this challenge to the Department’s mission, 

and notwithstanding the efforts described above, we continue to consider anti-money laundering 

and combating terrorist financing programs and operations as inherently high-risk.

Gulf Coast Restoration Trust Fund Administration

In response to the Deepwater Horizon oil spill, Congress enacted the RESTORE Act. This law 

established within Treasury the Gulf Coast Restoration Trust Fund (Trust Fund) and requires 

Treasury to deposit into the Trust Fund 80 percent of administrative and civil penalties paid by 

responsible parties pursuant to the Federal Water Pollution Control Act (Clean Water Act). The 

funds are to be distributed for environmental and economic restoration activities affecting the 

Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and Texas). As of December 2015, 

the Trust Fund received approximately $816 million from the Federal Government’s settlement 

with the Transocean defendants. In July 2015, BP Exploration & Production Inc. (BPXP), 

agreed to settle with the Federal Government and the Gulf Coast States resulting in 

approximately $4.4 billion plus interest expected to be deposited into the Trust Fund over a 

15-year period. Now that a more definitive amount and timing of the money that will flow into 

the Trust Fund has been determined, Treasury, the Gulf Coast States, and impacted local 

governments are challenged to meet the intent of the Act within the expected funding levels and

timing of payments

In the Investigations operational area, OIG has established four priorities for FY 2017.

Criminal and Serious Employee Misconduct

The OIG Office of Investigation’s highest priority is investigating complaints involving alleged 

criminal and other serious misconduct by Treasury employees. OIG investigates allegations of 

the general crimes enumerated in Title 18 of the U.S. Code, other federal crimes, alleged 

violations of the Ethics in Government Act, and allegations of serious misconduct prohibited by 

the Standards of Ethical Conduct for Employees of the Executive Branch. Several Treasury 

bureaus and offices have additional rules and regulations relating to ethical standards for their 

own employees, and OIG also investigates complaints of alleged violations of these rules and 

regulations.

Fraud Involving Contracts, Grants, Guarantees, and Funds

The OIG Office of Investigations conducts investigations into allegations of fraud and other 

crimes involving Treasury contracts, grants, loan guarantees, and federal funds, including 

investigations made in accordance with Sections 1602 and 1603 of the Recovery Act. Such 

allegations often involve contractors, entities, and individuals who are providing or seeking to 

provide goods or services to the Department. Office of Investigations receives complaints 
OIG - 8

alleging criminal or other misconduct from employees, contractors, members of the public, and 

the Congress.

Financial Programs and Operations Crime

Investigations relating to Treasury financial programs and operations involve issuing licenses, 

providing benefits, and exercising oversight of U.S. financial institutions; frauds involving 

improper Federal payments such as those involving Treasury checks and the Check Forgery 

Insurance Fund (“CFIF”); crimes involving the improperly-redirected benefits of federal 

government payees; and false claims of any kind that generate inappropriate Federal payments, 

including federal income tax refunds, Social Security benefits, and Veterans’ Administration 

payments.

Threats Against Treasury Employees and Facilities

Investigative efforts into threats against Treasury employees and facilities are critical in ensuring 

safety for the Department. These matters require prompt attention and coordination with federal, 

state, and local authorities in order to protect those involved.

Treasury Employee and Bureau Impersonation Scams

Investigations relating to scammers who represent themselves as Treasury employees in order to 

defraud the citizens of the U.S. and other countries by the impersonation of Treasury employees 

and/or the fraudulent use of the Treasury and Bureau seals. This is a problem that has 

significantly increased in the last few years. These matters require prompt attention to protect 

the public and the integrity of the department.

Key Accomplishments and Challenges

In FY 2015, the Office of Audit completed 86 audit products, exceeding the target of 77. The 

Office also completed all mandated audit products within required timeframes. The audit 

products identified a number of areas where the Department needs to strengthen its controls. The 

Office plans to complete 77 audit products in FY 2016 and complete 86 in FY 2017, and to meet 

all statutory timeframes. In FY 2015 the Office of Investigations exceeded the investigative 

performance measure, and expects to continue this performance trend in FYs 2016 and 2017. In 

FY 2015, the Office opened 133 new investigations, closed 70 investigations, referred 27

investigations that substantiated administrative violations against a Treasury employee to the 

appropriate regulated bureau for action, and referred 142 investigations for criminal prosecution.

Treasury is a complex agency with many programs and operations that are vital to the Nation’s 

economic and national security. Many of these programs and operations are thinly resourced and 

OIG is often the only Treasury presence providing on-site verification and quality control. The 

implementation of newer authorities and regulatory changes brought about by major legislation 

to address the economic crisis and other events—such as Dodd-Frank, the RESTORE Act, and 

the DATA Act—continue to evolve. OIG must remain vigilant and have the capacity to provide 

independent assessments of the Department’s activities to stand up and bring to a mature state 

new offices and programs. OIG must also be able to respond in an expedient and effective 

manner to unanticipated and emerging issues of significant impact to the Department.
OIG - 9

Office of Inspector General’s FY 2017 Budget Request

In accordance with the requirements of Section 6(f)(1) of the Inspector General Act of 1978, the 

Treasury Inspector General submits the following information relating to the OIG’s requested 

budget for FY 2017:

• The aggregate budget request for the operations of the OIG is $47,544,000 comprised of 

$37,044,000 from direct appropriations, and $10,500,000 from reimbursable collections;

• The portion of this amount needed for OIG training is $600,000; and

• The portion of this amount needed to support the Council of Inspectors General on Integrity 

and Efficiency (CIGIE) is $111,000.

The amount requested for training satisfies all OIG training needs for FY 2017.
OIG - 10

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Office of Inspector General FTE Amount

FY 2016 Enacted 194 $35,416

Changes to Base

Maintaining Current Levels (MCLs) 0 $508

Pay-Raise 0 $269

Pay Annualization 0 $89

Non-Pay 0 $150

Subtotal Changes to Base 0 $508

Total FY 2017 Base 194 $35,924

Program Changes

Program Increases 0 $1,120

DATA Act and Other Audit Workload 0 $1,120

Subtotal Program Changes 0 $1,120

Total FY 2017 Request 194 $37,044

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$508,000 / +0 FTE

Pay-Raise +$269,000 / +0 FTE 

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$89,000 / +0 FTE 

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$150,000 / +0 FTE 

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Program Increases ....................................................................................+$1,120,000 / +0 FTE

DATA Act and Other Audit Workload +$1,120,000 / +0 FTE 

Funds are requested for anticipated increase in DATA Act and other audit workload. 
OIG - 11

2.2 Operating Levels Table

Dollars in Thousands

Office of Inspector General FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 18,000 21,565 21,750

11.3 - Other than full-time permanent 200 200 200

11.5 - Other personnel compensation 500 600 550

11.8 - Special personal services payments 750 875 750

11.9 - Personnel Compensation (Total) 19,450 23,240 23,250

12.0 - Personnel benefits 6,550 5,800 5,900

Total Personnel Compensation and Benefits $26,000 $29,040 $29,150

21.0 - Travel and transportation of persons 532 550 550

23.1 - Rental payments to GSA 2,000 2,460 435

23.2 - Rental payments to others 460 0 0

23.3 - Communication, utilities, and misc charges 800 1,000 1,000

23.5 - Telecommunication 0 0 0

24.0 - Printing and reproduction 26 26 19

25.2 - Other services 8,000 10,965 12,515

25.3 - Other purchases of goods & serv frm Govt accounts 3,400 3,800 3,300

25.6 - Medical care 50 50 50

25.7 - Operation and maintenance of equip 100 125 125

26.0 - Supplies and materials 100 100 100

31.0 - Equipment 600 300 300

Total Non-Personnel 16,068 19,376 18,394

Subtotal New Appropriated Resources $42,068 $48,416 $47,544

Budget Activities:

Audit 34,992 41,304 40,105

Investigations 7,076 7,112 7,439

Total Budgetary Resources $42,068 $48,416 $47,544

FTE 161 213 213
OIG - 12

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

FISCAL SERVICE

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of the Office of Inspector General in 

carrying out the provisions of the Inspector General Act of 1978, 

[$35,416,000] $37,044,000, including hire of passenger motor 

vehicles; of which not to exceed $100,000 shall be available for 

unforeseen emergencies of a confidential nature, to be allocated 

and expended under the direction of the Inspector General of the 

Treasury; of which up to $2,800,000, to remain available until 

September 30, [2017] 2018, shall be for audits and investigations 

conducted pursuant to section 1608 of the Resources and 

Ecosystems Sustainability, Tourist Opportunities, and Revived 

Economies of the Gulf Coast States Act of 2012 (33 U.S.C. 1321 

note)[; and of which not to exceed $1,000 shall be available for 

official reception and representation expenses]. (Department of the 

Treasury Appropriations Act, 2016.)

2C – Legislative Proposals

The OIG has no legislative proposals. 
OIG - 13

Section 3 – Budget and Performance Plan

3A – Audit 

($29,605,000 from direct appropriations, and $10,500,000 from reimbursable resources):

The Office of Audit conducts audits intended to ensure the accountability of resources, protect 

information, and provide recommendations for improving the integrity, economy, efficiency, and 

effectiveness of programs and operations under its jurisdiction, which include those of Treasury 

and the Gulf Coast Ecosystem Restoration Council. The requested funding for 

FY 2017 is necessary to perform mandated work and maintain an appropriate level of oversight 

of these programs and operations consistent with the OIG’s responsibilities under the Inspector 

General Act of 1978. In FY 2017, OIG will also continue to provide oversight of Treasury’s 

government-wide role and responsibilities under the DATA Act. Reimbursable funding 

agreements support financial audits of Treasury and oversight of SBLF and SSBCI programs. 

SBLF/SSBCI program oversight and expected performance is detailed in the SBLF/SSBCI 

Program Office budget submission.

Description of Performance:

The Office plans to complete 77 audit products in FY 2016, and 86 in FY 2017. In FY 2015, the 

Office of Audit completed 86 audit products, exceeding the target, and met all statutory audit 

timelines. Audit products include audit reports, evaluation reports, the Inspector General’s SemiAnnual Reports to the Congress, and the Inspector General’s annual memoranda to the Secretary 

of the Treasury and the Secretary of Commerce, as the designated Chairperson of the Gulf Coast 

Ecosystem Restoration Council, on the most significant management and performance 

challenges facing the Department and Gulf Coast Ecosystem Restoration Council, respectively. 

Audit products can also include responses to specific information requests by the Congress. By 

completing independent and timely assessments of programs and operations under its 

jurisdiction, the Office supports the OIG’s mission of promoting efficiency, effectiveness, and 

integrity of those programs and operations. The recommendations for improvement in programs 

and operations noted through OIG’s assessments directly support the Treasury Department in 

achieving its strategic goals and the Gulf Coast Ecosystem Restoration Council in meeting its 

mission. 

The OIG has a mature audit operation that uses historical performance to estimate future 

performance. It has, over time, demonstrated agility at redirecting resources as necessary to 

address new challenges and mandates of its stakeholders.

In keeping with the OIG’s strategy to maintain a highly skilled and motivated workforce, the 

OIG plans and executes a meaningful body of work designed to help ensure the integrity and 

effectiveness of programs and operations across its jurisdiction while looking for opportunities to 

improve them.
OIG - 14

3.1.1 – Audit Budget Activity Budget and Performance Plan

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Enacted Enacted Request

 Appropriated Resources $19,721 $22,435 $22,823 $21,630 $27,050 $28,275 $28,304 $29,605

 Other Resources $6,300 $6,300 $10,000 $13,200 $12,000 $13,000 $13,000 $10,500

Budget Activity Total $26,021 $28,735 $32,823 $34,830 $39,050 $41,275 $41,304 $40,105

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Number of Completed Audit 

Products

68 126 91 72 75 86 75 77 86

Percent of Statutory Audits 

Completed by the Required 

Date

50.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Key: DISC - Discontinued

3B – Investigations

($7,439,000 from direct appropriations):

The Office of Investigations prevents, detects, and investigates complaints of fraud, waste, and 

abuse. This includes the detection and prevention or deterrence of employee misconduct and 

fraud, or related financial crimes within or directed against Treasury. The Office of 

Investigations refers its cases to the Department of Justice, state or local prosecutors for criminal 

prosecution or civil litigation, or to agency officials for corrective administrative action. 

With the increased risk of the Recovery Act grant programs for low-income housing and specific 

energy properties, the Office of Investigations faces greater challenges and anticipated increases 

in grant fraud. In addition, with the establishment of Gulf Coast Restoration Trust Fund outreach 

efforts are being made in an effort to prepare for future investigative referrals and complaints 

aimed at suspected fraud involving the funds with this program.

Additionally, the Office of Investigations remains committed to investigating benefit, payment 

and other monetary fraud associated with the programs and operations of the Treasury 

Department. 

Description of Performance:

In FY 2015 the Office of Investigations exceeded the Investigative Performance Measure target, 

and opened 133 new investigations, and closed 70 investigations. The OIG also referred 27

investigations that substantiated administrative violations against a Treasury employee to the 

appropriate regulated bureau for action. In addition, the OIG referred 72 investigations for 

criminal prosecution. The Investigative performance measure is a percentage of all cases closed 

by Office of Investigations during the fiscal year referred to Department Bureaus for 

administrative action or for criminal or civil prosecution by Federal or local prosecutors. The 

goal for Office of Investigations is that at least 80 percent of closed cases meet the 
OIG - 15

aforementioned criteria of closed cases in this fiscal year. Meeting or exceeding this goal 

demonstrates that Office of Investigations is responsive to allegations and complaints referred to 

Office of Investigations and that when these referrals require investigation, the cases are timely, 

thoroughly and accurately reported to assist the Department in maintaining the integrity of its 

programs and operations, subsequently ferreting out fraud, waste, and abuse.

3.1.2 – Investigations Budget and Performance Plan

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Actuals Enacted Request

 Appropriated Resources $6,831 $6,702 $6,818 $6,461 $7,750 $7,076 $7,112 $7,439

Budget Activity Total $6,831 $6,702 $6,818 $6,461 $7,750 $7,076 $7,112 $7,439

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage (%) of 

All Cases Closed 

During Fiscal Year 

that were Referred 

for Criminal/Civil 

Prosecution or 

Treasury 

Administrative 

Action

93.0 85.0 91.0 84.0 84.0 87.0 80.0 80.0 80.0

Key: DISC - Discontinued
OIG - 16

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The OIG does not have any IT or Non-IT Capital Investments.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at: http://www.treasury.gov/about/budget-performance/Pages/summary-of-capitalinvestments.aspx

This website also contains a digital copy of this document.

Special Inspector General for 

TARP

FY 2017

President’s Budget Submission

February 9, 2016
SIGTARP - 2

Table of Contents

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

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

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

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ........................................... 11

2.1 – Budget Adjustments Table............................................................................................... 11

2A – Budget Increases and Decreases Description................................................................... 11

2.2 – Operating Levels Table.................................................................................................... 12

2B – Appropriations Language and Explanation of Changes................................................... 13

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

Section 3 – Budget and Performance Plan ............................................................................... 14

3A – Audit................................................................................................................................. 14

3.1.1 – Audit Budget Activity Budget and Performance Plan.................................................. 15

3B – Investigations ................................................................................................................... 15

3.1.2 – Investigations Budget and Performance Plan ............................................................... 17

Section 4 – Supplemental Information...................................................................................... 18

4A – Summary of Capital Investments..................................................................................... 18
SIGTARP - 3

Section 1 – Purpose

1A – Mission Statement

To advance economic stability through transparency, coordinated oversight, and robust 

enforcement related to the Troubled Asset Relief Program (TARP). 

1.1 – Appropriations Detail Table

Dollars in Thousands

Special Inspector General for TARP FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 75 9,243 50 8,870 48 8,644 (2) (226) -4.00% -2.55%

Investigations 117 24,991 142 31,801 136 32,516 (6) 715 -4.23% 2.25%

Subtotal New Appropriated Resources 192 $34,234 192 $40,671 184 $41,160 (8) $489 -4.17% 1.20%

Other Resources:

Unobligated Balances from Prior Years 0 10,957 0 6,495 0 3,790 0 (2,705) 0.00% -41.65%

Available PPIP Funds 0 965 0 928 8 1,548 8 620 0.00% 66.81%

Subtotal Other Resources 0 $11,922 0 $7,423 8 $5,338 8 ($2,085) 0.00% -28.09%

Total Budgetary Resources 192 $46,156 192 $48,094 192 $46,498 0 ($1,596) 0.00% -3.32%

1B – Vision, Priorities, and Context

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) 

was created by Congress to protect taxpayers who funded the TARP from fraud, waste, and 

abuse through SIGTARP oversight and audits, and through investigations to combat fraud and 

other crime. SIGTARP is a white-collar law enforcement agency with the authority to search, 

seize, and arrest. Fraud prevention and law enforcement are at the heart of SIGTARP’s mission. 

Congress aligned SIGTARP’s sunset with the length of time TARP funds or commitments are 

outstanding. TARP’s Home Affordable Modification Program will continue to at least 2023. 

In accordance with the requirements of section 6(f)(1) of the Inspector General Act of 1978, as 

amended, SIGTARP submits the following information related to the FY 2017 budget request:

• The aggregate budget request for the operations of SIGTARP is $41,160,000;

• The portion of this amount needed for SIGTARP training is $356,000; and

• The portion of this amount needed to support the Council of the Inspectors General on 

Integrity and Efficiency is estimated at $111,000.

Strategic Goals and Objectives

SIGTARP supports and complements the Department of the Treasury’s Strategic Goal 1: 

Promote domestic economic growth and stability while continuing reforms of the financial 

system. In particular, through its oversight, audits, and investigations related to TARP;

SIGTARP supports Objective 1.1: Promote savings and increased access to credit and affordable 

housing options, and Objective 1.3: Complete implementation of financial regulatory reform 

initiatives, continue monitoring capital markets, and address threats to stability.
SIGTARP - 4

Additionally, through its audits, quarterly reports to Congress, and open and transparent 

communication with Congress, SIGTARP supports Treasury’s Strategic Goal 5: Create a 

21st-century approach to government by improving efficiency, effectiveness, and customer 

interaction. Through audits, quarterly reports to Congress and expedient responses to inquiries 

from Congress, SIGTARP supports Objective 5.4: Create a culture of service through relentless 

pursuit of customer value.

FY 2017 Priorities 

SIGTARP audits and reports protect TARP dollars and programs and can help detect potential 

fraud, waste, and abuse

SIGTARP has always used a combination of audits and investigations to protect TARP for 

taxpayers. Protecting the more than $450 billion bailout dollars obligated for 12 different TARP 

programs, and enforcing the law, is a daunting challenge. SIGTARP accepts that challenge the 

only way it knows how to. SIGTARP gets smart about out-of-the-ordinary TARP programs that 

evolve and span different industries. SIGTARP recommends ways for Treasury to reduce 

vulnerabilities, and SIGTARP conducts criminal investigations. 

SIGTARP develops ways to find TARP-related crime, a task that is not easy, and has evolved as 

the definition of TARP-related crime keeps changing and spans different industries. As TARP 

has shifted away from Treasury investments in large institutions, SIGTARP has shifted its audit 

and oversight work to focus on looking for vulnerabilities in TARP to fraud, waste, and abuse, or 

improper payments, in ongoing TARP programs. This is in addition to SIGTARP’s efforts to 

make these programs more effective and efficient. For example, as Treasury has approved 

$433 million in TARP to seven states for the demolition of vacant houses, and approved 

$153 million in TARP funds to first-time homebuyers, both new activities in TARP, SIGTARP 

through audit and oversight work is protecting that money and those programs, recently making 

23 recommendations to reduce vulnerabilities in both subprograms. 

With each SIGTARP audit and report, SIGTARP protects additional TARP dollars and TARP 

programs. New activities under TARP also require SIGTARP to develop new investigative 

strategies. With $18.5 billion remaining to be spent on TARP housing programs, it is critical 

that SIGTARP continue to protect those programs. 

SIGTARP’s audit and oversight work also helps detect fraud, waste, and abuse. SIGTARP 

recently created a forensic auditing unit to provide better insight into fraud, waste, and abuse. 

SIGTARP expects that unit to make public recommendations to reduce vulnerabilities and 

generate non-public leads for SIGTARP’s confidential investigative work.

Actual recoveries from SIGTARP investigations are $2.57 billion in addition to immediate 

government cost savings of $553 million in TARP

SIGTARP is ensuring that TARP crime does not pay by taking the profit out of crime. 

SIGTARP has escalated its efforts and realized a seventeen fold increase in recovered funds lost 

to TARP crime or civil violations of the law, a crucial component of long-term recovery from the 

crisis. SIGTARP has already assisted in recovering $2.57 billion through its investigations that 

has been paid back to the government or other victims, which is more than 10 times the amount 

that has been appropriated to SIGTARP. 
SIGTARP - 5

SIGTARP anticipates even more financial recovery for the government and other victims. 

SIGTARP’s investigations have resulted in court orders and government agreements for 

$8.59 billion to be returned to the government or other victims. 

Having already assisted in the recovery of $2.57 billion of these funds, it is SIGTARP’s priority 

to pursue additional recoveries from the remaining $6.02 billion including by finding additional 

assets. 

SIGTARP’s investigation of Colonial Bank resulted in an immediate savings of $553 million in 

TARP funds that Treasury had already approved to invest in the bank. Based on SIGTARP’s 

communications with Treasury, Treasury stopped the TARP money just prior to disbursement. 

Colonial Bank did not receive the $553 million in TARP funds that Treasury approved, all of 

which would have been lost when the bank failed. SIGTARP’s audit and oversight work also 

SIGTARP’s ESCALATED EFFORTS INCREASED MONEY

ORDERED/AGREED TO BE PAID (CUMULATIVE)

$0.01B $0.16B

$3.89B $4.15B

$4.68B

$7.38B

$8.59B

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2009 2010 2011 2012 2013 2014 Dec 2015

+$0.15B +$3.73B

+$0.26B +$0.53B +$2.70B +$1.21B

Asset Recovery (Millions)
SIGTARP - 6

has a net positive impact, though the calculation of that benefit is inherently imprecise and its 

impact is difficult to measure. 

More than 300 defendants investigated by SIGTARP have been charged with crimes, More 

than 200 defendants investigated by SIGTARP have been convicted of crimes related to the 

government’s response to the financial crisis known as TARP, and More than 100 of these 

defendants have been sentenced to prison for their crimes

SIGTARP has reached three significant milestones: 1) More than 300 (329) defendants that 

SIGTARP investigated have been charged with TARP-related crimes — more than four times 

the number charged in the past three years; 2) More than 200 (227) defendants that SIGTARP

investigated have been convicted of TARP-related crimes — almost tripling the number 

convicted in the past three years; and 3) More than 100 (141) defendants that SIGTARP

investigated have been sentenced to prison for their crimes related to TARP. The number of 

defendants sentenced to prison nearly quadrupled — 35 to 141 defendants — in three years. 

Sentencing follows years of SIGTARP’s investigations and criminal prosecution. SIGTARP

expects that number to rise. There are 50 additional defendants that SIGTARP investigated who 

have already been convicted of their crimes and await sentencing by the court. 

CRIMINAL CONVICTIONS RESULTING FROM RAMP UP

IN SIGTARP’S SUPPORT OF PROSECUTING (CUMULATIVE)

2 9

28

71

112

146

227

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 Dec 2015

+7 +19 +43 +41 +34 +81

CONVICTIONS INDIVIDUALS

INCREASE IN DEFENDANTS INVESTIGATED BY SIGTARP

WHO WERE SENTENCED TO PRISON (CUMULATIVE)

1 3

19

35

65

87

141

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 Dec 2015

+2 +16 +16 +30 +22 +54
SIGTARP - 7

These showcase the difference SIGTARP can make by combining forces with the prosecutors in 

the Department of Justice (DOJ) and its other law enforcement partners. As a law enforcement 

team standing firm together against bailout-related crime, SIGTARP is bringing more 

accountability and justice to reprehensible crimes related to the government’s extraordinary 

action funded by taxpayers in TARP. 

SIGTARP has been increasingly successful in identifying and investigating TARP-related crime, 

ramping up its law enforcement efforts in the last few years. This ramp up is a direct 

consequence of successful prosecutions based on SIGTARP’s work. With each prosecution, 

SIGTARP gains significant expertise in how to uncover and unravel TARP-related crime and 

obtain the evidence DOJ needs to prosecute defendants successfully. 

SIGTARP has much more to do in the fight against TARP bailout-related crime as it reaches

a turning point investigating crime inside TARP banks and supporting prosecutions of TARP 

bankers

SIGTARP has much more to do in the fight against TARP-bailout related crime. SIGTARP is

only on the cusp of bringing justice through prosecutions in its highest-priority cases — crime 

inside TARP banks. Only 11 of the 141 defendants sentenced to prison so far are TARP bankers 

(along with six of their co-conspirators). 

Recently, SIGTARP had three critical victories when three trials ended with both juries 

convicting a TARP bank officer investigated by SIGTARP

On March 26, 2015, following a six-week trial, a federal jury found senior officer Ebrahim 

Shabudin, a senior officer of TARP recipient United Commercial Bank (UCB) guilty on all 

counts in “one of the largest criminal prosecutions brought the Department of Justice of 

wrongdoing by bank officers arising out of the 2008 financial crisis,” (as described by DOJ). 

Shabudin’ s conviction along with the criminal conviction of Senior Vice President Thomas Yu 

and CFO Craig On, came after five years of SIGTARP and its law enforcement partners finding 

and unravelling a hidden financial fraud scheme at a TARP-recipient bank with a magnitude of 

losses exceeding half a billion dollars. UCB was the first TARP bank to fail and the ninth largest 

bank to fail since 2007, causing losses of more than $300 million to TARP and $677 million to 

the Federal Deposit Insurance Corporation (FDIC). 

The following week, on April 3, 2015, after a five-day trial, another federal jury found David 

Weimert, senior officer of Anchor Bank, a TARP recipient, guilty on five counts of fraud, 

another prime example of SIGTARP’s recently growing success finding and prosecuting fraud 

by TARP bankers. The successful investigation and prosecution represents another critical 

victory in SIGTARP’s fight against TARP bailout-related crime. 

On December 17, 2015, a jury returned guilty verdicts for the chairman of failed TARP bank 

Premier Bank and his wife (senior officer and general counsel of Premier Bank), who SIGTARP 

investigated. These two TARP bankers were found guilty of defrauding First Midwest Bank, 

which was also a TARP bank, during the crisis by submitting false information to the bank in 

workout agreement after they defaulted on an $8 million loan they obtained in 2009 from First 

Midwest Bank. 
SIGTARP - 8

It is SIGTARP’s mission to ensure that no TARP banker gets away with a crime that hurts a 

TARP bank, no matter the size of the fraud. 

Unlike other TARP-related crime, it has been a much harder road for SIGTARP to bring results 

against TARP bank officers where the fraud is concealed under layer upon layer of secrecy, and 

the bank often looks healthier than it is because the TARP capital covers losses that would 

otherwise be exposed. Unlike the savings and loan crisis where investigators received thousands 

of referrals from regulators to develop patterns and criminal clues, it is rare for SIGTARP to 

receive a referral from regulators or tips from whistleblowers. Without that assistance of those 

with access inside the bank, SIGTARP has worked to overcome a steep learning curve to find 

hidden fraud.

While it took time, SIGTARP honed its expertise in finding crime inside a TARP bank. Since 

the beginning of fiscal year (FY) 2013, SIGTARP has produced more results. SIGTARP’s 

investigations have now resulted in criminal charges against 48 TARP bankers as it gained 

greater expertise with each case, leading SIGTARP to find and unravel fraud at TARP banks 

even with no whistleblower or regulatory referral. SIGTARP has gotten smarter about how to 

look behind false books by learning with each bank case how insiders at banks conceal their 

crime. SIGTARP anticipates the number of criminal charges and convictions of TARP bankers 

to rise through and beyond FY 2017. 

The chart below shows SIGTARP’s escalating ability to investigate crime by TARP bankers to 

the point where prosecutors bring criminal charges.

Criminal charges are the first step to bring justice. SIGTARP works with the end in mind —

conviction and sentencing. It is the important role of SIGTARP to ensure that prosecutors have 

all of the evidence to prove guilt beyond a reasonable doubt. In some cases, the case will go to 

trial and SIGTARP plays an integral part during the trials. SIGTARP agents or investigators 

testify at some trials. SIGTARP’s work supporting prosecutions has been very successful, with 

TARP RECIPIENT BANKERS CRIMINALLY CHARGED

RESULTING FROM A SIGTARP INVESTIGATION

(CUMULATIVE)

0 0

8 8

17

29

48

0

10

20

30

40

50

60

2009 2010 2011 2012 2013 2014 Dec 2015

+0 +8 +0 +9 +12 +19
SIGTARP - 9

escalating results as cases reach the trial stage or guilty plea. As the chart below shows, 32 of 

the 48 charged TARP bankers investigated by SIGTARP have already been convicted of their 

crime.

Because TARP is complex, SIGTARP criminal investigations take time; trials take time; 

sentencings take time. But holding criminals accountable and deterring future crime is worth it. 

Sentences in SIGTARP cases average 59 months — substantially more than the 36-month 

average for white-collar crime — indicating the complexity, damage, reach, and sophistication of 

the criminal schemes SIGTARP uncovers. 

Larger Operating Environment

SIGTARP’s strategy to shift organization and staffing to meet mission critical priorities

Increase the number of Criminal Investigation Series (1811) special agents

In FY 2015, SIGTARP began embarking on a strategy to increase its number of 1811 special 

agents. The first part of that strategy was to identify vacancies throughout SIGTARP and 

convert many of those to 1811 positions. Other offices throughout SIGTARP are being asked to 

make do with fewer personnel. 

Increase audit focus on risk in TARP housing programs

With $18.5 billion left to be spent on ongoing TARP housing programs, SIGTARP has 

developed a strategy to find vulnerabilities to fraud, waste, and abuse and find areas of 

inefficiencies through a revamped SIGTARP Audit Division. SIGTARP’s audit work is heavily 

focused on the critical work that is needed to oversee $37.5 billion in TARP housing programs. 

Beginning in mid-2013, Treasury expanded TARP activities on the demolition of vacant 

properties. In FY 2014, these demolitions started and Treasury increased its allocation to 

$433 million by adding a seventh state recipient. SIGTARP works hard to identify 

vulnerabilities. SIGTARP recently issued an audit finding that the demolition strategy, 

decisions, and activities are done by contractors and subcontractors far removed from Treasury, 

whose identity is unknown to Treasury, with little information flowing to Treasury

TARP RECIPIENT BANKERS CONVICTED RESULTING

FROM A SIGTARP INVESTIGATION (CUMULATIVE)

0

2

5

8

17

32

0

5

10

15

20

25

30

35

2010 2011 2012 2013 2014 Dec 2015

+2 +3 +3 +9 +15
SIGTARP - 10

Creation of forensic audit group

In addition, to be more aligned with other offices of inspectors general, SIGTARP created a 

forensic audit group with more particularized analytical skill sets and experience to protect 

against fraud, waste, and abuse related to the TARP housing programs including Blight 

Elimination. 

Other savings

In order to be fiscally responsible, in FY 2015, SIGTARP made other cost-cutting measures that 

will result in cost savings now and in the future. SIGTARP reclassified 42 positions from 

needing top-secret clearance to secret clearance. This change will bring in future years,

including FY 2017, tighter controls over those with access to top-secret information and is 

projected to result in cost savings. SIGTARP also recognized information technology cost

savings from Treasury.

Loss of direct hire

A challenge to SIGTARP’s mission is the expiration of its direct hiring authority. SIGTARP’s 

ability to staff is adversely impacted by the absence of direct hire authorization. As a temporary 

agency, attrition has always been a problem for SIGTARP.

SIGTARP is an agency in the process of growing. SIGTARP is at the mid-point of being able to 

fulfill its law enforcement responsibilities and its oversight of TARP to prevent fraud, waste, and 

abuse. SIGTARP is committed to fighting fraud and other crime in TARP and using what it

learns in audits and investigations to make recommendations aimed at reducing vulnerabilities to 

fraud, waste, and abuse. SIGTARP is leaving TARP and the financial system safer than it found 

it. SIGTARP has much more it can do and must do. There is more to come.
SIGTARP - 11

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Special Inspector General for TARP FTE Amount

FY 2016 Enacted 192 $40,671

Changes to Base

Maintaining Current Levels (MCLs) 0 $588

Pay-Raise 0 $303

Pay Annualization 0 $101

Non-Pay 0 $184

Efficiency Savings (8) ($99)

Technical FTE Adjustment (8) $0

Efficiency Savings 0 ($99)

Subtotal Changes to Base (8) $489

Total FY 2017 Base 184 $41,160

Total FY 2017 Request 184 $41,160

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$588,000 / +0 FTE

Pay-Raise +$303,000 / +0 FTE 

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$101,000 / +0 FTE 

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$184,000 / +0 FTE 

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Efficiency Savings ............................................................................................-$99,000 / -8 FTE

Technical FTE Adjustment -$0 / -8 FTE 

The technical FTE adjustment reduces the appropriated FTE level but does not reduce 

SIGTARP’s overall FTE levels. The eight FTE will be absorbed in SIGTARP’s PPIP fund to 

more accurately reflect work performed and prior-year usage. 

Efficiency Savings -$99,000 / -0 FTE 

SIGTARP will reduce costs through efficiencies identified in technology investments. 
SIGTARP - 12

2.2 – Operating Levels Table 

Dollars in Thousands

Special Inspector General for TARP FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 16,530 20,318 21,788

11.3 - Other than full-time permanent 1,858 2,780 1,799

11.5 - Other personnel compensation 1,684 2,046 2,120

11.9 - Total personnel compensation 20,072 25,144 25,707

12.0 - Personnel benefits 5,904 6,710 8,184

Total Personnel Compensation and Benefits $25,976 $31,854 $33,891

21.0 - Travel and transportation of persons 876 912 1,000

23.2 - Rental payments to others 270 271 272

23.3 - Communication, utilities, and misc charges 100 115 103

24.0 - Printing and reproduction 172 161 162

25.1 - Advisory and assistance services 2,280 2,667 2,320

25.2 - Other services from non-Federal sources 346 283 333

25.3 - Other goods and services from Federal sources 10,737 10,969 7,491

25.6 - Medical care 103 75 100

25.7 - Operation and maintenance of equipment 38 58 48

26.0 - Supplies and materials 441 333 448

31.0 - Equipment 203 359 260

42.0 - Insurance claims and indemnities 0 27 60

91.0 - Unvouchered 0 10 10

Total Non-Personnel 15,566 16,240 12,607

Subtotal New Appropriated Resources $41,542 $48,094 $46,498

Budget Activities:

Audit 7,893 10,266 9,440

Investigations 33,649 37,828 37,058

Total Budgetary Resources $41,542 $48,094 $46,498

FTE 150 192 192

Note: This table includes all available resources, including SIGTARP's annual appropriation and remaining no-year 

funds.
SIGTARP - 13

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

SPECIAL INSPECTOR GENERAL FOR THE TROUBLED 

ASSET RELIEF PROGRAM

Federal funds

SALARIES AND EXPENSES

For necessary expenses of the Office of the Special Inspector 

General in carrying out the provisions of the Emergency 

Economic Stabilization Act of 2008 (Public Law 110-343) 

[$40,671,000] $41,160,000. (Department of the Treasury 

Appropriations Act, 2016.)

2C – Legislative Proposals

SIGTARP has no legislative proposals.
SIGTARP - 14

Section 3 – Budget and Performance Plan

3A – Audit

($8,644,000 from direct appropriations): 

The Audit budget activity supports SIGTARP’s priority of coordinated oversight by providing 

recommendations to Treasury to improve the effectiveness and efficiency of TARP programs, 

bringing transparency to decisions made in TARP, and preventing fraud, waste, and abuse. 

SIGTARP conducts, supervises, and coordinates programmatic audits of TARP without 

sacrificing the rigor of required methodology. 

Description of Performance:

The performance measure “Number of Completed Audit Products” includes issuing audit 

products that promote the efficiency and effectiveness of TARP and prevent waste, fraud, and 

abuse. SIGTARP developed an audit plan using a risk-based planning process to identify 

projects that will provide the maximum benefit to TARP, Congress, and the taxpayers. The 

maximum benefit is to assure the general public that TARP funds are not expended by recipients 

or other entities on waste, fraud, or abuse. 

Given the urgency of TARP, SIGTARP also initiates recommendations to improve TARP 

outside of an audit or evaluation. SIGTARP’s reports and recommendations raise awareness to 

obstacles that could stand in the way of TARP program effectiveness or efficiency and protect 

against fraud, waste and abuse. 

SIGTARP’s complete listing of recommendations may be reviewed in their entirety 

at https://www.sigtarp.gov/Quarterly%20Reports/January_28_2016_Report_to_Congress.pdf

pages 48-69. 

SIGTARP met its target of eight audit products for FY 2015. In recognition of the shift of 

increasing resources to law enforcement and to reflect expected results of the new forensic audit 

unit, SIGTARP is changing this target in FY 2016 to more accurately reflect the relationship 

between the Audit and Investigations activities. The new measure, “Number of Completed 

Audit Products including Referrals to Investigations Division” tracks the ties between the two 

activities and continues to measure the number of audit reports that promote the efficiency and 

effectiveness of the TARP. The target for this new metric is seven in FY 2016 and seven in

FY 2017.

In FY 2015, SIGTARP added a new measure to track the responsiveness of information flow and 

transparency between SIGTARP and Congress. The measure “Percentage of Congressional 

Inquiries Responded to within 45 Days of Receipt” tracks SIGTARP’s promptness in providing 

developments of its oversight activities to Congress. In FY 2015, SIGTARP exceeded its 

85 percent goal in all inquiries, responding within 45 days 100 percent of the time. SIGTARP’s 

targets are 85 percent for FY 2016 and 85 percent for FY 2017.
SIGTARP - 15

3.1.1 – Audit Budget Activity Budget and Performance Plan

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

 Appropriated Resources $9,900 $10,581 $13,789 $10,376 $7,219 $9,243 $8,870 $8,644

 Other Resources $3,837 $512 $0 $0 $1,947 $2,958 $1,396 $796

Budget Activity Total $13,737 $11,093 $13,789 $10,376 $9,166 $12,201 $10,266 $9,440

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Number of Completed 

Audit Products (Units)

9 13 13 10 10 8 8 DISC DISC

Number of Completed 

Audit Products including 

Referral to Investigations 

Division (Units)

N/A N/A N/A N/A N/A N/A N/A 7 7

Percentage of 

Congressional Inquiries 

Responded to within 45 

Days of Receipt

N/A N/A N/A N/A N/A 85 85 85 85

Key: DISC – Discontinued

3B – Investigations

($32,516,000 from direct appropriations): 

The Investigations budget activity supports SIGTARP’s priority of robust law enforcement of 

crimes and other violations of the law related to TARP. This activity supports and complements 

Treasury’s Strategic Goal 1: promote domestic economic growth and stability while continuing 

reforms of the financial system. In particular, the Investigations activity supports Objective 1.3: 

complete implementation of financial regulatory reform initiatives, continue monitoring capital 

markets, and address threats to stability by investigating cases of fraud and abuse related to 

TARP.

SIGTARP conducts criminal and civil investigations related to TARP using a staff of 

experienced investigators, including special agents, forensic agents, investigators, analysts, and 

investigative attorneys. In the interest of maximizing resources, SIGTARP coordinates closely 

with other law enforcement agencies, leveraging its unique position and expertise by forming 

law enforcement partnerships and task force relationships across federal and state governments. 

Description of Performance:

SIGTARP is the Co-Chair of the Financial Institution Fraud Working Group of the President’s 

Financial Fraud Task Force. In FY 2015, “Percentage of Cases That are Joint Agency/Task 

Force Investigations” with other law enforcement agencies was just under 70 percent, exceeding 

the target of 50 percent. SIGTARP’s targets are 70 percent for FY 2016 and 70 percent for 

FY 2017.
SIGTARP - 16

During FY 2015, the “Percentage of Investigations Accepted for Consideration by Prosecutors,” 

including criminal or civil investigations that a federal, state, or local prosecutor has formally 

accepted for consideration for criminal prosecution or civil or administrative action was more 

than 95 percent, exceeding the target of 70 percent. This success is directly related to 

SIGTARP’s successful investigation of evidence and its support of prosecutions. SIGTARP will 

discontinue this performance metric in FY 2016 and replace it with “Percentage of Cases 

Presented to Civil or Criminal Authorities within Eight Months of the Case Being Opened.” The 

target for this new metric is 70 percent in FY 2016 and 70 percent in FY 2017.

During a preliminary investigation, an investigator gathers fundamental information to evaluate 

whether a potential case should be converted to a full investigation or if it should be closed. In

FY 2015, “Percentage of Preliminary Investigations Converted to Full Investigations within 

180 days” was 100 percent, exceeding the target of 70 percent. As SIGTARP has gained 

expertise in investigating TARP-related crime, it has efficiently leveraged its resources to handle 

its growing inventory and to expedite these investigations. As SIGTARP’s workforce has 

evolved, so has its ability to respond quickly to allegations and to devote the necessary resources. 

SIGTARP has involved prosecutors in preliminary investigations to ensure that allegations, if 

proven, will be prosecuted. The result is a greater number of preliminary investigations 

converted to full investigations within the 180-day timeframe. Based on these efficiencies, the 

target for this performance metric will increase to 80 percent in FY 2016 and 80 percent in 

FY 2017. SIGTARP will continue to prioritize leads and fraud allegations and make effective, 

informed decisions when opening preliminary investigations. In this manner, SIGTARP will 

ensure an appropriate commitment of investigative resources to sufficiently support all of its 

investigations.

As SIGTARP transitions to alternative means of uncovering TARP-related crimes, it is 

discontinuing “Percentage of Hotline Complaints Responded to or Referred for Investigation or 

Further Action within 14 Days of Receipt.” Instead, SIGTARP will measure the “Percentage of 

Cases Accepted for Consideration by Civil or Criminal Authorities Resulting in a Positive Final 

Outcome.” For this new metric, SIGTARP’s targets are 60 percent for FY 2016 and 70 percent 

for FY 2017.
SIGTARP - 17

3.1.2 – Investigations Budget and Performance Plan

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

 Appropriated Resources $13,339 $25,433 $25,618 $29,230 $27,382 $24,991 $31,801 $32,516

 Other Resources $6,408 $1,492 $920 $1,516 $5,656 $8,964 $6,027 $4,542

Budget Activity Total $19,747 $26,925 $26,538 $30,746 $33,038 $33,955 $37,828 $37,058

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Cases 

Accepted for Consideration by 

Civil or Criminal Authorities 

Resulting in a Positive Final 

Outcome

N/A N/A N/A N/A N/A N/A N/A 60 70

Percentage of Cases 

Presented to Civil or Criminal 

Authorities within Eight Months 

of the Case Being Opened

N/A N/A N/A N/A N/A N/A N/A 70 70

Percentage of Cases That are 

Joint Agency/Task Force 

Investigations

50 40 65 79 76 70 50 70 70

Percentage of Hotline 

Complaints Responded to or 

Referred for Investigation or 

Further Action within 14 Days 

of Receipt

74 76 77 83 95 94 75 DISC DISC

Percentage of Investigations 

Accepted for Consideration by 

Prosecutors

100 94 95 94 98 95 70 DISC DISC

Percentage of Preliminary 

Investigations Converted to 

Full Investigations within 180 

Days

80 88 77 82 96 100 70 80 80

Key: DISC - Discontinued
SIGTARP - 18

Section 4 – Supplemental Information

4A – Summary of Capital Investments

IT funding has been critical in enabling SIGTARP to fulfill its mission of transparency, 

coordinated oversight, and robust enforcement. SIGTARP uses the services provided by 

Treasury Departmental Offices and Government Security Operations Center as part of 

Treasury’s headquarters operations. SIGTARP relies on the Treasury’s Office of the Chief 

Information Officer and Departmental Offices Operations to provide a secure infrastructure that 

is fully capable of supporting the mission and administrative requirements of a completely 

functional, bureau-level government agency with the technology requirements appropriate to an 

audit and investigative organization. 

SIGTARP’s IT strategy continues with limited IT investments including updates, modifications, 

and maintenance and equipment refreshment, consistent with its role as a temporary agency. For 

FY 2017, SIGTARP expects only ongoing infrastructure charges for headquarters and for remote 

office operations and routine maintenance and enhancements and modifications of its existing 

systems required to support its mission. SIGTARP has no capital investments.

Non-Major IT Investment Summary

The non-major IT investments are for the acquisition, installation, integration, training, and 

modifications of mission-essential systems such as hotline information management, 

investigative case management, investigations database, investigations evidence network, 

counsel case management, forensic system management, SIGTARP website and intranet, video 

teleconferencing used primarily for investigative activity with field offices and headquarters, and 

asset management, which were established by SIGTARP because they were not provided by 

Treasury. SIGTARP migrated most of these systems to Treasury for hosting services and began 

to use Treasury’s shared services offerings, including cloud computing for content management 

such as document management, Freedom of Information Act tracking, and records management. 

A summary of capital investment resources, including major IT and non-IT investments, can be 

viewed/downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx. 

This website also contains a digital copy of this document.

Treasury Inspector General for 

Tax Administration

FY 2017

President’s Budget

February 9, 2016
TIGTA - 2

Table of Contents

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

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

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

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ........................................... 16

2.1 – Budget Adjustments Table............................................................................................... 16

2A – Budget Increases and Decreases Description................................................................... 16

2.2 – Operating Levels Table.................................................................................................... 17

2B – Appropriations Language and Explanation of Changes................................................... 18

2C – Legislative Proposals........................................................................................................ 18

Section 3 – Budget and Performance Plan ............................................................................... 19

3A – Audit................................................................................................................................. 19

Description of Performance:..................................................................................................... 21

3.1.1 – Audit Budget and Performance Plan............................................................................. 22

3B – Investigations ................................................................................................................... 22

3.1.2 – Investigations Budget and Performance Plan ............................................................... 26

Section 4 – Supplemental Information...................................................................................... 27

4A – Summary of Investments ................................................................................................. 27
TIGTA - 3

Section 1 – Purpose

1A – Mission Statement

Provide quality professional audit, investigative, and inspection and evaluation services that 

promote integrity, economy, and efficiency in the administration of the Nation’s tax system.

1.1 – Appropriations Detail Table

 

Dollars in Thousands

Treasury Inspector General for Tax 

Administration FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Audit 349 61,572 358 65,100 358 66,020 0 920 0% 1.41%

Investigations 486 96,638 501 102,175 501 103,614 0 1,439 0% 1.41%

Subtotal New Appropriated Resources 835 $158,210 859 $167,275 859 $169,634 0 $2,359 0% 1.41%

Other Resources:

Reimbursables 2 1,500 2 1,500 2 1,500 0 0 0% 0.00%

Subtotal Other Resources 2 $1,500 2 $1,500 2 $1,500 0 $0 0% 0.00%

Total Budgetary Resources 837 $159,710 861 $168,775 861 $171,134 0 $2,359 0% 1.40%

1B – Vision, Priorities, and Context

The Treasury Inspector General for Tax Administration (TIGTA), an independent office within 

the Department of the Treasury, was created by Congress as a part of the Internal Revenue 

Service Restructuring and Reform Act of 1998 (RRA 98).

1

 TIGTA has a statutory mandate to 

provide oversight by conducting independent audit, investigative, and inspection and evaluation 

services necessary to improve the quality and credibility of Internal Revenue Service (IRS) 

operations, including oversight of the IRS Chief Counsel and the IRS Oversight Board. TIGTA 

conducts independent reviews and provides an unbiased perspective for improving the economy, 

efficiency, and effectiveness of IRS programs. TIGTA makes recommendations designed to 

improve the administration of the federal tax system; conducts administrative and criminal 

investigations of allegations of waste, fraud, and abuse; and helps to ensure that the IRS protects 

and secures taxpayers’ data. TIGTA also has the unique responsibility of protecting the IRS and 

its employees.

TIGTA continues to be committed to its vision and mission, and to accomplishing its strategic 

goals and objectives. TIGTA safeguards the integrity and the public’s trust and confidence in 

federal tax administration through the audits, investigations, and inspections and evaluations it 

conducts. TIGTA’s role is important, given the current economic environment and the increased 

emphasis by the Administration, Congress, and the American people on the federal government’s

accountability and efficient use of resources.

 1 Pub. L. No. 105-206, 112 Stat. 685.
TIGTA - 4

TIGTA’s Fiscal Year (FY) 2013 – 2016 Strategic Plan guides program and budget activities and 

supports the Department of the Treasury’s FY 2014-2017 Strategic Plan (the Plan), which 

includes Strategic Goal 3: “Fairly and effectively reform and modernize federal financial 

management, accounting, and tax systems.”

TIGTA’s vision is consistent with Objective 3.2 of the Plan, “Improve the disbursement and 

collection of federal funds and reduce improper payments made by the U.S. Government.” 

Likewise, TIGTA’s vision supports Objective 3.3 of the Plan, “Pursue tax reform, implement the 

Patient Protection and Affordable Care Act (ACA)2 and the Foreign Account Tax Compliance 

Act (FATCA),3 and improve the execution of the Internal Revenue Code (IRC or tax code).”

TIGTA’s progress in meeting the strategic goal of valuing its people was demonstrated last year 

when the Partnership for Public Service announced the results of the 2015 Best Places to Work

rankings. TIGTA placed 9 out of 320 agency subcomponents. The scoring index measured the 

performance of agency subcomponents with respect to employee satisfaction and commitment. 

Among all Treasury bureaus, TIGTA placed the highest in this ranking.

TIGTA’s headquarters facility is in Washington, D.C., and TIGTA has 67 offices located 

throughout the United States and Puerto Rico. TIGTA is uniquely organized by function (Figure 

1) to meet current tax administration challenges and to keep pace with emerging issues. These 

functions include:

• Office of Audit (OA) – This Office conducts audits and issues reports that advise the 

American people, Congress, the Secretary of the Treasury, and IRS management of high-risk 

issues relating to the administration of IRS programs and operations. TIGTA’s audit 

recommendations aim to improve IRS systems and operations, while emphasizing fair and 

equitable treatment of taxpayers.

• Office of Investigations (OI) – This Office investigates external threats of violence against 

IRS employees and facilities and internal allegations of criminal and administrative 

misconduct by IRS employees and contractor. OI also conducts investigations to protect the

 2 Pub. L. No. 111-148, 124 Stat. 119, as amended by the Health Care and Education Reconciliation Act of 2010, 

Pub. L. No. 111-152, 124 Stat. 1012. 3 Hiring Incentives to Restore Employment Act of 2010, Title V, Pub. L. 111-147, 124 Stat. 71.

TIGTA Vision

Maintain a highly skilled, proactive, and diverse Inspector General organization dedicated 

to working in a collaborative environment with key stakeholders to foster and promote fair 

tax administration.

TIGTA Strategic Goals

Promote the economy, efficiency, and effectiveness of tax administration.

Protect the integrity of tax administration.

Be an organization that values its people.
TIGTA - 5

IRS against bribery attempts, impersonations, and external, cyber-based, and often globallycomplex threats that would impede the IRS’s ability to collect revenues and safeguard the 

processing of approximately 242 million returns annually.

• Office of Inspections and Evaluations (I&E) – This Office provides responsive, timely, and 

cost-effective inspections and evaluations of challenging areas in IRS programs. I&E’s 

oversight activities include inspecting IRS’s compliance with established system controls and 

operating procedures and evaluating IRS operations for high-risk systemic inefficiencies.

Figure 1: TIGTA's Organizational Structure

Key Accomplishments and Budget Savings

While the scope, complexity, and magnitude of the Nation’s economy and deficit continue to 

present significant challenges, TIGTA remains one of the best investments in the federal 

government. In FY 2015, through targeted and vigorous oversight efforts that addressed 

congressional concerns and audit and investigative priorities, TIGTA generated overall financial 

accomplishments of over $26.6 billion.

During FY 2015, these financial 

accomplishments included: 

• Increased and/or protected revenue in 

the amount of $17.4 billion; 

• Cost savings of $9.1 billion; and

• Significant investigative 

accomplishments of $.05 billion.

Funding for TIGTA allows oversight 

efforts to continue, and in FY 2015 these 

efforts produced a return on investment (ROI) of $168 for every $1 invested (Figure 2). During 

that period TIGTA issued audit reports with recommendations that potentially increased and/or 

protected revenue of $17.4 billion. For example, based on an analysis of education credits 

claimed and received on Tax Year 2012 tax returns, TIGTA projected that approximately $11 

billion in potentially erroneous education credits could be paid over the next several years if 

corrective actions are not taken. Increased/protected revenue includes the assessment or 

collection of additional taxes (increased revenue) and the validation of the accuracy of the total 

taxes, penalties, and interest paid to the federal government (revenue protection). TIGTA reports 

total projections in the year the audit is completed. TIGTA also issued audit reports with 

Figure 2: TIGTA's Return on Investment (ROI)
TIGTA - 6

recommendations that identified a potential $9.1 billion in cost savings. The phrase “cost 

savings” includes questioned costs and funds put to better use. 

Questioned costs are:

• Costs that cannot be reimbursed because they represent a violation of law, regulation, or 

contract;

• Expenditures that are not reasonable or necessary to accomplish the intended purpose; and

• Costs that are appropriate, but for which the vendor cannot provide proof that the cost was 

incurred.

Funds put to better use means funds that could be used more efficiently or effectively if 

management took actions to implement the recommendation(s), including but not limited to:

• Reductions in outlays;

• Avoidance of unnecessary expenditures noted in pre-award contract reviews; and

• Prevention of erroneous payment of refundable credits.

In addition to funds that could be put to better use, TIGTA’s investigative efforts resulted in 

$40,443,892 in court-ordered fines, penalties, and restitution.

FY 2017 Budget Request

TIGTA’s FY 2017 budget request of $169,634,000 represents an increase of 1.41 percent above 

its FY 2016 budget request. These resources will fund critical audit, investigative, and 

inspection and evaluation services to protect the integrity of the Nation’s system of tax 

administration.

In accordance with the requirements of Section 6(f) (1) of the Inspector General Act of 1978 (as 

amended),4 TIGTA submits the following information related to its FY 2017 Budget Request:

• The aggregate budget request for TIGTA operations is $169,634,000;

• The portion of the request needed for TIGTA training is $1,800,000; and

• The portion of the request needed to support the Council of the Inspectors General on 

Integrity and Efficiency is $508,900.

The amount requested for training supports TIGTA’s training needs for FY 2017.

FY 2017 Priorities

TIGTA’s audit, investigative, and inspection and evaluation priorities include:

• Identifying opportunities to improve the administration of the Nation’s tax laws and achieve 

program efficiencies and cost savings;

• Mitigating risks associated with security for taxpayer data and IRS employees; tax systems 

and online services; identity theft; oversight of tax-exempt organizations; tax compliance; the 

implementation of tax law changes; and human capital challenges facing the IRS in its 

domestic and/or international operations;

• Developing advanced analytics and innovative approaches to help prevent and detect the 

flow of dollars fraudulently obtained by criminals and IRS employees to help ensure the 

security of IRS and TIGTA data;

 4 5 U.S.C. app. 3 § 6(f)(1).
TIGTA - 7

• Providing the IRS with the investigative coverage and the information necessary to mitigate 

threats against its employees, facilities, and data systems;

• Responding to domestic and foreign threats and attacks against IRS employees, property, 

data infrastructure, and sensitive information;

• Rapidly and effectively responding to attempts to impersonate the IRS for fraudulent 

purposes;

• Improving the integrity of IRS operations by detecting and deterring waste, fraud, abuse, and 

misconduct, including the unauthorized disclosure of confidential taxpayer information by 

IRS employees;

• Conducting comprehensive audits and inspections and evaluations that provide 

recommendations for achieving monetary benefits, addressing erroneous and improper 

payments, and enhancing the service the IRS provides to taxpayers;

• Informing the American people, Congress, and the Secretary of the Treasury of problems on 

a timely basis once all facts are known;

• Overseeing the IRS’s efforts to administer tax provisions of the ACA; and

• Overseeing the IRS’s efforts to increase international tax compliance.

Office of Audit

The budget for OA provides funding for comprehensive and independent audits of IRS programs 

and operations that help promote sound administration of the Nation's tax laws. Audit coverage 

is determined by assessing the risks associated with the potential audit universe and identifying 

the highest priority audits to address major management challenges and key emphasis areas.

Sufficient funding will allow TIGTA to continue its oversight responsibilities and audit coverage 

of the major management challenges facing the IRS. Audit activities are also focused on 

assessing key areas in which the IRS faces major risks, including:

• ACA implementation and administration;

• Identity theft detection and prevention;

• International tax compliance; and

• Oversight of the tax-exempt organizations.

The ACA resulted in the largest set of tax law changes in 20 years, with more than 40 provisions 

modifying or expanding the IRC. These provisions provide incentives and tax breaks to 

individuals and small businesses to offset health care expenses. They also impose penalties, 

administered in accordance with the IRC, for individuals and businesses that do not obtain health 

coverage for themselves or their employees. TIGTA’s independent oversight plays a key role in 

ensuring that the provisions are implemented and administered in accordance with the law and 

the intent of Congress.

Beginning with the filing of Tax Year (TY) 2014 returns, individuals must indicate whether they 

maintain minimum coverage for themselves and their dependents. Individuals who do not 

maintain minimum coverage and are not exempt from the requirement will have to pay a 

penalty. To assist individuals with the cost of their health insurance premiums, the ACA also 

created a refundable tax credit, referred to as the Premium Tax Credit. Individuals who receive 

advance payments must file a tax return to reconcile advanced payments to their allowable credit 

beginning in the 2015 filing season. TIGTA will continue to evaluate the IRS’s effectiveness in 
TIGTA - 8

ensuring compliance with the individual coverage mandate and the accuracy of Premium Tax 

Credit claims.

FY 2016 will be a significant year for the IRS’s implementation of ACA provisions. The ACA 

requires employers and insurers to file information returns with the IRS identifying individuals 

to whom employers offered health insurance and indicating whether the insurance offered met 

minimum requirements. Reporting of this information to the IRS was delayed from 2015 to

2016. TY 2015 will be the first in which the IRS will have all of the reporting information 

required to verify related claims on individual tax returns. In addition, certain employers 

offering minimum coverage will be required to report to the IRS whether they offer full-time 

employees and their dependents the opportunity to enroll in coverage. An assessed payment will 

be imposed on employers who fail to provide employees with the opportunity to enroll in 

minimum coverage plans. TIGTA will also assess the IRS’s efforts to develop processes to 

identify employers not filing information reports and not offering insurance that meets minimum 

requirements.

TIGTA will continue its assessment of IRS’s development of systems to prevent, detect, and 

resolve fraud and abuse during ACA tax return processing. The IRS’s ACA implementation 

plan is designed, when fully developed and implemented, to leverage third-party reporting from 

the exchanges and the Return Review Program. The plan calls for the development of the ACA 

Verification Service to identify improper ACA-related refunds. The ACA Verification Service 

will be designed to screen improper refunds and identify fraud including multiple returns. Until 

these new systems are successfully developed, TIGTA is concerned that the IRS’s existing fraud 

detection system may be incapable of identifying ACA refund fraud prior to the issuance of tax 

refunds. Many of the ACA tax provisions relating to Health and Human Services (HHS) and 

IRS processes and procedures will also require continued coordination between TIGTA and 

HHS’s Office of Inspector General during FY 2016.

Identity theft poses another significant and growing problem affecting tax administration. 

Identity theft tax fraud occurs when an individual uses another person’s name and Taxpayer 

Identification Number (generally a Social Security Number) to file a fraudulent tax return to 

obtain a refund. The IRS has made this issue one of its top priorities; however, significant 

improvements are still needed.

A real-time example of TIGTA’s need to have the newest technology, data tools, and human 

resources to investigate complex financial crimes occurred in May 2015. The IRS originally 

reported to TIGTA that criminals used taxpayer-specific data acquired from non-IRS sources to 

successfully gain unauthorized access to over 100,000 tax accounts through the IRS’s “Get 

Transcript” application. In August 2015, as a result of TIGTA’s investigation, the IRS 

conducted a deeper analysis in which it identified an additional 220,000 successful attempts to 

clear the “Get Transcript” verification process by individuals with taxpayer-specific sensitive 

data. The updated review also identified an additional 170,000 suspected attempts that failed to 

clear the authentication processes. Following TIGTA’s advice, the IRS disabled the “Get 

Transcript” application until this matter is investigated. As of February 2016, the “Get 

Transcript” application is still disabled and under further investigation. The loss of taxpayer 

account information will also be reviewed by OA to determine if appropriate controls and 
TIGTA - 9

policies were in place to safeguard taxpayers’ information. In addition, OA will evaluate the 

adequacy of the assistance provided by the IRS to victims of the data breach.

The risk for this type of unauthorized access to tax accounts will continue to grow as the IRS 

focuses its efforts on delivering taxpayers self-assisted interactive online tools. The IRS 

Commissioner’s vision is to provide taxpayers and tax professionals with more robust online 

services, based on the idea of allowing access to government services anywhere, anytime, on any 

device, in three to five years. In addition to the IRS’s Get Transcript application, the IRS also 

provides several other online services that could also pose a risk for unauthorized access.

International tax compliance remains a significant area of concern for the IRS, which is 

responsible for ensuring that all international taxpayers are compliant with U.S. tax obligations. 

In the past, TIGTA found that the IRS did not provide effective oversight to the International 

Collection program, which contributed to several control weaknesses in the program. The scope, 

complexity, and magnitude of the international financial system present significant challenges 

for the IRS. The number of taxpayers conducting international business transactions continues to 

grow as technology provides new opportunities for offshore investments.

OA has a continuing need to provide close oversight of the IRS’s tax-exempt organization 

program. These entities are not subject to federal income tax, but they represent a significant 

aspect of tax administration.

Office of Investigations

In FY 2015, through its investigative 

programs, OI sought to protect the IRS’s 

ability to process 242 million tax returns and 

collect more than $3.1 trillion in annual 

revenue for the federal government by 

investigating IRS employee misconduct and 

criminal activity, threats to IRS employees 

and facilities, and attempts to impede or 

otherwise interfere with the IRS’s collection 

efforts (Figure 3).

Funding OI allows TIGTA to meet the significant challenges facing the IRS in the 

implementation of a fair and effective system of tax administration. IRS employees are entrusted 

with sensitive personal and financial information belonging to American taxpayers. As the 

federal tax system is based on voluntary compliance, it is also essential to the public’s 

confidence that information given to the IRS for tax administration purposes be adequately 

safeguarded and kept confidential. Employee misconduct not only breaks the public’s trust and 

confidence, but also undermines the IRS’s ability to deliver taxpayer service, enforce tax laws 

effectively, and collect taxes owed.

OI places the highest priority on its statutory responsibility to safeguard approximately 91,000 

IRS employees located in 601 facilities throughout the United States. Threats of physical 

violence, harassment, and intimidation of IRS employees are criminal violations that OI 

aggressively investigates and refers for prosecution. As a result, IRS employees feel more secure

Figure Figure 3: TIGTA’s Protection of the Federal Tax System 3: TIGTA's Protection of the Federal Tax System
TIGTA - 10

in their work environment and can focus on performing their critical jobs. By maintaining a 

constant focus on the expanding threat environment, OI balances its attention on this critical area 

with its other investigative programs that help to protect the integrity of the federal tax system.

Emerging Issues

Impersonation Scam: Since summer 2013, a significant part of TIGTA’s workload has 

consisted of investigating a telephone impersonation scam in which a victim receives an 

unsolicited telephone call from a person claiming to be an IRS agent. The caller, using a fake 

name, provides a “badge number” and claims the victim owes taxes and is criminally liable for 

the amount owed. The victim is threatened that if he or she fails to pay the tax immediately, the 

victim will be arrested, a suit will be filed, or some other form of adverse action will be taken. 

As of December 2015, TIGTA had received more than 896,000 reports of these calls, between 

10,000 and 13,000 each week. To date, more than 5,000 victims have paid more than $26.5

million to the scammers. This nationwide scam is being conducted by criminals who are part of 

a broader international ring of scam artists operating outside the United States. The scam artists 

use Voice-Over Internet Protocol technology, which makes it more difficult for investigators to 

identify criminals. The FY 2017 budget request includes resources needed to investigate these 

crimes and prevent more people from being victimized.

Data Breach: In May 2015, the IRS originally reported to TIGTA that criminals used taxpayerspecific data acquired from non-IRS sources to successfully gain unauthorized access to more 

than 100,000 tax accounts through IRS’s “Get Transcript” application. In August 2015, as a 

result of TIGTA’s investigative findings, the IRS conducted a deeper analysis in which it 

identified an additional 220,000 successful attempts to clear the “Get Transcript” verification 

process by individuals with taxpayer-specific sensitive data. The updated review also identified 

an additional 170,000 suspected attempts that failed to clear the authentication processes. 

Following TIGTA’s advice, the IRS disabled the “Get Transcript” application until this matter 

has been investigated. As of February 2016, the “Get Transcript” application is still disabled and 

under further investigation.

As part of its overall investigation into the data breach, OI is conducting an in-depth forensic 

review of more than 300,000 accounts to determine if they were used for any other type of 

identity theft. The investigation will also identify the vulnerabilities that allowed the accounts to 

be stolen and to generate the evidence necessary to bring the responsible individuals to justice.

ACA: TIGTA anticipates a significant rise in the number of complaints and investigations in 

FY 2017 because of the IRS’s increased role in the ACA implementation. This budget request 

will allow TIGTA to investigate ACA-related allegations, timely respond to threats and assaults 

against IRS employees and facilities, and provide armed escorts to IRS employees who meet 

with potentially dangerous taxpayers. TIGTA anticipates an increase in:

• The number of threats against IRS employees and facilities as the IRS begins collecting ACA 

tax penalties that took effect in Calendar Year (CY) 2015;

• The number of ACA-related investigations of impersonations by criminals attempting to 

fraudulently obtain personally identifiable information from unsuspecting taxpayers; and

• The number of employee integrity investigations, to ensure that IRS employees and 

contractors are appropriately safeguarding sensitive information from taxpayers’ health 
TIGTA - 11

insurers, and to reduce the potential for unauthorized access to, or disclosure of, confidential 

taxpayer information.

International Cybercrimes and Identity Theft: By the end of CY 2013, the IRS had reported 

nearly 2.9 million identity theft cases, of which taxpayers had reported 13 percent and the IRS 

had detected approximately 87 percent. The tools and techniques used by the perpetrators of 

identity theft are such that they can be deployed from anywhere in the world, without regard to 

borders, using Internet-connected computers. OI’s highly specialized group of criminal 

investigators with technical expertise in investigating electronic crimes, including computer 

intrusions and Internet-based fraud schemes, will continue to combat cybercriminals.

The electronic system of tax administration 

that is conducted over IRS computer 

networks is targeted for malicious activity 

each day from network connections located 

throughout the world. Because many 

cybercriminals reside outside the United 

States, TIGTA special agents work with law 

enforcement personnel in foreign countries 

to identify leads and execute search and 

arrest warrants (Figure 4). OI will continue 

to support these critical international 

investigations with its highly trained special 

agents.

Office of Inspections and Evaluations

I&E provides a range of specialized services and products, including quick reaction reviews, onsite office inspections, and in-depth evaluations of major functions, activities, or programs. 

Inspections serve to:

• Provide factual and analytical information;

• Monitor compliance;

• Measure performance;

• Assess the effectiveness of programs and operations;

• Share best practices; and

• Inquire into allegations of waste, fraud, abuse, and mismanagement.

Evaluations often result in recommendations to streamline IRS operations, enhance data quality, 

and minimize inefficient and ineffective procedures. In FY 2015, I&E produced four reports

reviewing:

• The IRS’s use of its streamlined critical pay authority;

• Adherence to required bargaining processes and federal guidance in payment of FY 2013 

employee performance awards;

• Whether requests for taxpayer information were processed properly; and

• Significant unimplemented corrective actions, as shown in the September 30, 2015

Semiannual Report to Congress.

Figure 4: Examples of countries linked to TIGTA cybercrimes 

investigations
TIGTA - 12

I&E provides TIGTA with additional flexibility, capacity, and capability to produce value-added 

products and services to improve tax administration. Inspections usually are more limited in 

scope and are completed in a more compressed period of time than are traditional audits. 

The work of I&E complements OA and OI, and its findings may result in subsequent audits 

and/or investigations.

Office of Information Technology

The Office of Information Technology (OIT) provides cost-effective, timely information 

technology (IT) products and services that permit successful completion of TIGTA’s business 

goals, while at the same time meeting legislative mandates. By developing, providing, and 

supporting a wide variety of IT products and services, OIT facilitates the collection, 

management, analysis, and dissemination of information for the benefit of audit, investigative, 

legal, and management services.

TIGTA’s OA, OI, and I&E functions rely heavily on the products and services provided by OIT 

to execute TIGTA’s mission. IT is the dynamic force that allows auditors, special agents, and 

inspectors and evaluators to accomplish their objectives within the staffing and physical 

constraints that might otherwise prevent their completion. As the demands on the organization 

grow, it becomes increasingly dependent on the use of technology. Those demands translate into 

the need for more and improved IT services as well as a skilled staff to provide those services to 

the organization.

TIGTA has no major IT investments, based on the criteria of the Office of Management and 

Budget (OMB) and the Department of the Treasury. Several non-major investments, however, 

directly support the mission, strategy, and day-to-day operations of TIGTA. These investments 

include:

• Telecommunications Infrastructure – The utilization of smaller devices (e.g., smartphones 

and tablets) requires new and different types of connectivity to serve the increasingly mobile

workforce. Greater capacity, additional services, and lower cost alternatives are also 

necessary to meet the ever growing needs of a changing workforce. TIGTA’s OIT also faces 

the challenges of migrating to a new Department-wide telecommunications contract along 

with meeting user expectations.

• Refreshed Applications and Collaboration Environment – Given the evolving work 

model, not only are new applications expected to be available on the mobile platforms, but 

also legacy and mission critical applications will need to be adapted to this mode of 

operation.

• Secure IT Mobility – The emphasis on ensuring TIGTA has proper controls in place will 

only increase as the number and frequency of intrusions and data losses highlight the 

importance of IT security. To prevent the compromise of the data TIGTA obtains, it must 

aggressively ensure that its own security posture is properly maintained.

• Server and Storage Infrastructure – Deep data analysis and predictive analysis will require 

additional resources to prevent waste, fraud, and abuse.
TIGTA - 13

Safeguarding the IRS and Providing Comprehensive Oversight

TIGTA places its highest priority on ensuring the safety and security of IRS employees and 

facilities. TIGTA evaluates intelligence information regarding potential violent acts against the 

IRS and develops proactive leads from other law enforcement agencies and sources to mitigate 

potential threats.

As part of TIGTA’s oversight activities, the Threat Information and Critical Incident Response 

Center Initiative was created to ensure that threats against IRS personnel, facilities, or critical 

infrastructure are effectively and proficiently identified, investigated, and mitigated. 

Additionally, OI has established a Threat Information Notification System (TINS) to ensure the 

efficient and accurate distribution of threat-related information to all impacted stakeholders. The 

TINS protocol supports key personnel within TIGTA and the IRS, and provides for real-time 

information sharing to facilitate the protection of the IRS’s most important resource, its 

employees. TIGTA and the IRS are positioned to make decisive investigative and security 

decisions affecting IRS personnel, facilities, and critical infrastructure well into the future.

Security for Taxpayer Data and Employees: The IRS faces the daunting task of securing its 

computer systems against the growing threat of cybercrime. Effective information systems 

security is essential to ensure that data are protected against inadvertent or deliberate misuse, 

unauthorized disclosure, or destruction, and that computer operations supporting tax 

administration are secured against disruption or compromise. In addition to securing a vast 

amount of sensitive financial and personal data, the IRS must also protect approximately 91,000 

employees and 601 facilities throughout the United States. These operating conditions are 

challenging for the IRS and underscore the need for continued vigilance in the area of physical 

and personnel security.

To prevent the compromise of sensitive taxpayer information, TIGTA proactively identifies IRS 

employees who access tax information without authorization. This is referred to as IRS 

Unauthorized Access, Attempted Access or Inspection of Taxpayer Records or commonly 

known as UNAX. The initial investigation into an allegation of UNAX by an IRS employee 

often leads to the discovery of other criminal violations, including fraud and identity theft. The 

importance of efforts to detect UNAX is often underestimated, because too often UNAX is seen 

as browsing by bored employees. IRS employees who are found to have committed UNAX 

violations may be subject to fines, imprisonment, and/or loss of their jobs. In FY 2015, TIGTA 

initiated 225 UNAX investigations and closed 197 cases that resulted in adjudicated personnel 

actions against IRS employees.

Another of TIGTA’s significant oversight responsibility areas is the review of the IRS’s 

computer applications that contain sensitive information. The IRS currently has 132 application 

systems that process sensitive data, of which 83 are considered to be at risk for UNAX. With the 

FY 2017 resources, TIGTA will be able to ensure that these applications are evaluated properly 

and provide any necessary recommendations, so the IRS can implement improvements to 

mitigate these risks.

OI will conduct in-depth forensic review of taxpayer accounts that were compromised, as first 

reported in May 2015 by the IRS, when criminals used taxpayer-specific data acquired from non-
TIGTA - 14

IRS sources to successfully gain unauthorized access to tax accounts through IRS’s “Get 

Transcript” application. The investigation will also identify the vulnerabilities that allowed the 

accounts to be stolen and to generate the evidence necessary to bring the responsible individuals 

to justice. The loss of taxpayer account information will also be reviewed by OA to determine if 

appropriate controls and policies were in place to safeguard the taxpayers’ information.

TIGTA’s outreach program continues to play an important role in its broader efforts to raise the 

awareness of, educate, and train IRS employees and tax practitioners about potential threats and 

crimes against the IRS and taxpayers. Every year, special agents conduct security awareness 

presentations to educate IRS employees of TIGTA’s oversight responsibility and share 

information to help identify ways to prevent physical assaults and threats and deter waste, fraud, 

and abuse. In FY 2015, TIGTA provided 1,119 awareness presentations to 36,240 IRS 

employees and 35 awareness presentations to 3,180 tax practitioners and preparers.

Fraudulent Claims and Improper Payments: The Improper Payments Information Act of 20025

defines an improper payment as any payment that should not have been made or that was made 

in an incorrect amount (both overpayments and underpayments) under statutory, contractual, 

administrative, or other legally applicable requirements. Improper payments by federal 

government agencies have been an issue for many years, and numerous efforts have been made 

to identify, measure, and reduce them. In FY 2015, TIGTA issued a report noting that 3,285 

electronically-filed corporate income tax returns filed in 2013 claimed potentially erroneous 

carryforward credits totaling over $2.7 billion. In addition, a programming error prevented more 

than $170 million in Empowerment Zone Employment credits claimed in CY 2013 from being

received by the corporations claiming the credit.

According to another FY 2015 TIGTA report, the IRS does not have an effective process for 

identifying erroneous claims for education credits. TIGTA estimated that taxpayers received 

more than $5.6 billion in potentially erroneous education credits claimed on TY 2012 returns.

TIGTA projected that approximately $11 billion in potentially erroneous education credits could 

be paid over the next several years if corrective actions are not taken.

Tax Compliance Initiatives: Increasing budgetary pressure has led to a reduction of IRS 

resources in the enforcement area, which affects how the IRS addresses tax noncompliance. In 

FY 2015, TIGTA reported additional actions to enforce payment card reporting requirements 

could reduce the tax gap. TIGTA found that taxpayers are not compliant with backup 

withholding requirements directing a taxpayer to immediately withhold 28 percent of amounts 

reported on Forms 1099-K for payees that failed to provide a valid Taxpayer Identification 

Number (TIN). TIGTA’s review of Calendar Year 2013 Forms 1099-K identified 10,216 forms 

with a missing TIN. The Forms 1099-K reported gross transactions totaling more than $10.6 

billion. To address the challenges, TIGTA made seven recommendations; the IRS agreed to six 

of them and implemented pilot initiatives in an effort to identify payment card noncompliance.

Advising Congress: In FY 2015, TIGTA provided six testimonies, more than 25 briefings, and 

more than five official written responses to Congress on its audit, investigative, and inspection 

 5 Pub. L. No. 107-300, 116 Stat. 2350.
TIGTA - 15

and evaluation activities. Through direct communication, TIGTA aims to address the interest of 

congressional committees in critical issues involving IRS programs and operations.

Fraud and Electronic Crime: Historically, investigations and audits have shown that the 

sensitivity of the data the IRS collects makes such data an attractive target for employees, 

hackers, and others residing throughout the world, who could use the information to commit 

crimes involving fraud and identity theft. TIGTA’s audit, investigative, and inspection and 

evaluation work provides coverage of this growing national and international problem, providing 

proactive prevention and detection efforts that are critically necessary in this highly vulnerable 

and ever-evolving area. As described in Homeland Security Presidential Directive 7, IRS 

operations that fund the federal government are part of the Nation’s key resources and critical 

infrastructure, which provide essential services that underpin American society. Degradation of 

the public’s trust in the tax system could lead to a decline in voluntary compliance and present a 

risk to national security.

Promoting Efficient Spending and the Campaign to Cut Waste: TIGTA continues to uphold its 

commitment to promote efficient spending and cut waste. All investments and procurements

undergo a rigorous review by TIGTA’s Investment Review Board. The Board performs regular 

monitoring of these investments to ensure proper management. For FY 2016 and FY 2017, 

TIGTA will continue to scrutinize its budget and identify areas for cost savings and efficiencies. 

For example, TIGTA will generate savings from the reduction of personnel investigations it will 

need to conduct based on the results of an ongoing position sensitivity designation review.

In order for TIGTA to maintain a highly skilled, proactive, and diverse Inspector General 

organization with a reputation of protecting and promoting fair tax administration, its employees 

will require ongoing training to meet the challenge of staying abreast of changing IRS programs 

and priorities. In addition, TIGTA will ensure that its workforce receives training that 

strengthens the knowledge and skills it needs to continue to protect the public and to ensure 

Congress’s confidence in the tax system.
TIGTA - 16

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Treasury Inspector General for Tax Administration FTE Amount

FY 2016 Enacted 859 $167,275

Changes to Base:

Maintaining Current Levels (MCLs): - $2,376

Pay-Raise - $1,315

Pay Annualization - $437

Non-Pay - $624

Efficiency Savings: - ($17)

Personnel Security Background Investigations - ($17)

Subtotal Changes to Base - $2,359

Total FY 2017 Base 859 $169,634

Total FY 2017 Request 859 $169,634

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$2,376,000 / +0 FTE

Pay-Raise +$1,315,000 / +0 FTE

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$437,000 / +0 FTE

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$624,000 / +0 FTE

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Efficiency Savings ...........................................................................................-$17,200 / +0 FTE

Personnel Security Background Investigations - $17,200/ +0 FTE

TIGTA will generate a savings of $17,200 from a reduction in the number of personnel 

investigations it will need to conduct based on the results of an ongoing position sensitivity 

designation review.
TIGTA - 17

2.2 – Operating Levels Table

Dollars in Thousands 

Treasury Inspector General for Tax Administration FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 81,433 91,135 91,726

11.3 - Other than full-time permanent 445 590 594

11.5 - Other personnel compensation 7,991 8,405 8,460

11.9 - Personnel Compensation (Total) 89,869 100,130 100,780

12.0 - Personnel benefits 33,470 34,307 35,409

Total Personnel Compensation and Benefits $123,339 $134,437 $136,189

21.0 - Travel and transportation of persons 4,295 3,514 3,581

22.0 - Transportation of things 18 19 19

23.1 - Rental payments to GSA 9,197 9,221 9,396

23.2 - Rental payments to others 150 229 233

23.3 - Communication, utilities, and misc. charges 519 1,829 1,864

24.0 - Printing and reproduction 6 7 7

25.1 - Advisory and assistance services 2,067 790 805

25.2 - Other services 1,030 708 721

25.3 - Other purchases of goods & servs from Govt accounts 10,233 8,218 8,357

25.4 - Operation and maintenance of facilities 13 416 424

25.7 - Operation and maintenance of equip 2,494 926 944

26.0 - Supplies and materials 945 1,052 1,072

31.0 - Equipment 4,593 5,832 5,943

42.0 - Insurance claims and indemnities 4 52 53

91.0 - Confidential Expenditures 36 25 26

Total Non-Personnel $35,600 $32,838 $33,445

Subtotal New Appropriated Resources $158,939 $167,275 $169,634

Budget Activities:

Audit 57,845 65,700 66,620

Investigations 101,906 103,075 104,514

Total Budgetary Resources $159,751 $168,775 $171,134

$159,710

FTE 758 861 861
TIGTA - 18

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

TREASURY INSPECTOR GENERAL FOR TAX 

ADMINISTRATION

Federal funds

SALARIES AND EXPENSES

For necessary expenses of the Treasury Inspector General for Tax 

Administration in carrying out the Inspector General Act of 1978, 

as amended, including purchase and hire of passenger motor 

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

3109, at such rates as may be determined by the Inspector General 

for Tax Administration; [$167,275,000,] $169,634,000, of which 

$5,000,000 shall remain available until September 30, [2017] 

2018; of which not to exceed $6,000,000 shall be available for 

official travel expenses; of which not to exceed $500,000 shall be 

available for unforeseen emergencies of a confidential nature, to 

be allocated and expended under the direction of the Inspector 

General for Tax Administration[; and of which not to exceed 

$1,500 shall be available for official reception and representation 

expenses]. (Department of the Treasury Appropriations Act, 

2016.)

2C – Legislative Proposals

TIGTA has no legislative proposals.
TIGTA - 19

Section 3 – Budget and Performance Plan

3A – Audit

($66,020,000 from direct appropriations and $600,000 from reimbursable resources): 

TIGTA identifies opportunities to improve the administration of the Nation’s tax laws by 

completing comprehensive and independent performance and financial audits of IRS programs 

and operations. TIGTA’s audit program incorporates both statutory audit requirements and 

specific audits identified through TIGTA’s risk assessment process. TIGTA’s audit work is 

concentrated on high-risk areas and the IRS’s progress in achieving its strategic goals. TIGTA 

strategically evaluates IRS programs, activities, and functions so that resources are spent in the 

areas of highest vulnerability to the Nation’s system of tax administration. By focusing on the 

most critical areas, TIGTA identifies and recommends improvements that add value while 

addressing high-risk tax administration issues. In FY 2015, OA issued 92 final audit reports that 

included potential financial benefits totaling approximately $26.6 billion and affected 

approximately 5.3 million taxpayer accounts.

Each year, TIGTA identifies and addresses the major management and performance challenges 

and key issues confronting the IRS. OA identifies the major risks facing the IRS and annually 

proposes a national audit plan based on perceived risks, stakeholder concerns, and follow-up 

reviews of previously audited areas with significant control weaknesses. To keep apprised of 

operating conditions and emerging issues, TIGTA maintains liaison and consults on an ongoing 

basis with applicable stakeholders, such as IRS executives, the IRS Oversight Board, the 

Department of the Treasury, the Government Accountability Office, and Congress.

TIGTA’s Annual Audit Plan communicates audit priorities to the IRS, Congress, and other 

interested parties. Many of the activities described in the Annual Audit Plan address the 

fundamental goals related to the IRS’s mission to administer its programs effectively and 

efficiently. Audits address a variety of high-risk issues, such as ACA implementation and 

administration, identity theft detection and prevention, security of taxpayer data, tax compliance, 

fraudulent claims and improper payments, tax systems and online services, tax-exempt 

organizations, and globalization. TIGTA’s audits and recommendations help:

• Promote the economy, efficiency, and effectiveness of IRS programs;

• Ensure the fair and equitable treatment of taxpayers; and

• Detect and deter waste, fraud, and abuse.

TIGTA’s recommendations not only result in cost savings, but also have other quantifiable 

impacts, such as the protection of existing revenue, increased revenue, and reduction of the 

number of fraudulent refunds and improper payments.

In addition to its coverage of the major management challenges facing the IRS, OA places 

importance on key emphasis areas based on significance and impact on tax administration:

• ACA Implementation and Administration – The ACA impacts individual and business 

taxpayers at all income levels, IRS compliance and enforcement programs, information 

reporting requirements, the administration of tax penalties, and information technology. 

Ensuring the confidentiality of taxpayer data provided to the Federal and State Exchanges,

developing a compliance strategy for certain requirements of the ACA, and identifying 

potential fraud related to the premium tax credit provision are all challenges facing the IRS. 
TIGTA - 20

In FY 2015, TIGTA identified that the IRS needs to ensure that health insurance policy 

issuers and self-insured sponsors are paying a Patient-Centered Outcome Research (PCOR)

fee (ACA excise tax) based on the average number of lives covered. The new fee is used to 

offset the costs of the PCOR Institute, which funds research to assist decision-making for 

patients and healthcare providers. For TY 2012, TIGTA found that of 72,035 health 

insurance policy issuers/self-insured plan sponsors, 30,996 (43 percent) paid a PCOR fee of 

less than $4.25, which is the IRS’s cost to process these returns.

• Tax-Exempt Organizations – The IRS’s prior use of inappropriate criteria for selecting and 

reviewing applications for tax-exempt status has been a significant concern, and the IRS has 

made substantial changes in its administration of this process. However, a FY 2015 audit 

determined that the IRS uses a subjective process that will be replaced with a clearly defined 

social welfare test upon finalized guidance from the Department of the Treasury.

• Identity Theft Detection and Prevention – Stopping identity theft and refund fraud continues 

to be a top priority for the IRS, as its work in these areas continues to grow and includes 

nearly every part of the organization. The IRS has put in place a strategy to prevent fraud, 

investigate these crimes, and assist taxpayers victimized by identity thieves. While the IRS 

has made progress, this is no comfort to the victims and the IRS needs to do more. In May 

2015, the IRS originally announced that criminals used taxpayer-specific data acquired from 

non-IRS sources to gain unauthorized access to information on over 100,000 tax accounts 

through IRS’s “Get Transcript” application. As a result of TIGTA’s investigative findings, 

in August 2015, the IRS conducted a deeper analysis in which it identified an additional 

220,000 successful attempts to clear the “Get Transcript” verification process by individuals 

with taxpayer-specific sensitive data. The updated review also identified an additional 

170,000 suspected attempts that failed to clear the authentication processes. Before trying to 

access the IRS site, the criminals gained sufficient information from an outside source to 

clear a multi-step authentication process, including several personal verification questions 

that typically are only known by the taxpayer. Additionally, TIGTA’s review found that the 

IRS continues to make errors when resolving the tax accounts of identity theft victims. 

TIGTA estimated that 10 percent of the 267,692 taxpayers whose accounts were resolved 

may have been resolved incorrectly, resulting in the delay of refunds or the identity theft 

victims’ receiving incorrect refund amounts.

• International Tax Compliance – The tax compliance of business and individual taxpayers 

involved in international transactions remains a significant area of concern for the IRS. As 

the number and complexity of international transactions continues to grow, the IRS must 

focus its international efforts on ensuring compliance with the tax laws, regardless of where 

the taxpayers reside. The enactment of FATCA to combat tax evasion by U.S. persons 

holding investments in offshore accounts is an important development in the IRS’s efforts to 

improve U.S. tax compliance involving foreign financial assets and offshore accounts.

In addition to the areas addressed above, TIGTA’s reports for FY 2015 addressed issues that 

included:

• Education Credits – The IRS still does not have effective processes to identify erroneous 

claims for education credits. Erroneous claims include claims for individuals who did not 

appear to have attended a postsecondary educational institution, individuals who did not 

attend an eligible educational institution, individuals who did not appear to attend the 

educational institute for the required length of time, and individuals who claimed the credit 
TIGTA - 21

for more than the four tax years allowed by law. Based on the audit, more than $11 billion of 

increased revenue/revenue protected and more than $9.1 billion in cost savings could 

potentially be achieved.

• General Business Credits – Carryforward – TIGTA identified 3,285 corporate income tax 

returns electronically filed in CY 2013, on which corporations claimed potentially erroneous 

carryforward credits totaling more than $2.7 billion. TIGTA also found that a programming 

error prevented more than $170 million in Empowerment Zone Employment Credits claimed 

on 717 returns from being received by the corporate taxpayers.

• Fresh Start Initiatives – Under the Fresh Start Initiatives, taxpayers struggling to pay their 

outstanding tax obligations signed direct debit installment agreements and the IRS withdrew 

their Notices of Federal Tax Lien (NFTL). However, 524 taxpayers, who owed 

approximately $10.5 million, defaulted on their installment agreements, and the IRS did not 

file new NFTLs.

Description of Performance:

TIGTA uses two performance measures to gauge the success of the audit program. The first 

measure indicates that TIGTA’s products are more likely to be used if they are delivered when 

needed to support congressional and IRS decision making. To determine whether products are 

timely, TIGTA tracks the percentage of products that are delivered on or before the date 

promised (contract date).

The second measure assesses TIGTA’s effect on improving the IRS’s accountability, operations, 

and services. TIGTA makes recommendations designed to improve the administration of the 

federal tax system. The IRS must implement these recommendations to realize the financial or 

non-financial benefits. Since the IRS needs time to act on recommendations, TIGTA uses the 

Department of the Treasury’s Joint Audit Management Enterprise System to track the percentage

of four-year-old recommendations that have been implemented, rather than the results of the 

activities during the fiscal year in which the recommendations are made. TIGTA tracks 

recommendations that have not been implemented by the IRS and has a formal process with the 

IRS to close out unimplemented recommendations in situations in which circumstances may 

have changed or when the IRS has taken alternative corrective measures to address TIGTA’s 

audit findings.

In FY 2015, the actual Percentage of Audit Products Delivered when Promised to Stakeholders 

was 80 percent, against a full-year target of 68 percent.

In FY 2015, the actual Percentage of Recommendations Made that Have Been Implemented was 

92 percent, against a full-year target of 85 percent. TIGTA exceeded its target because of 

continued discussions with the IRS throughout the audit process concerning both the findings 

and potential recommended solutions to ensure that feasible alternatives were identified. For 

FY 2017, the target for Percentage of Audit Products Delivered when Promised to Stakeholders 

will remain 68 percent. The target for Percentage of Recommendations Made that Have Been 

Implemented will also remain at 85 percent.
TIGTA - 22

3.1.1 – Audit Budget and Performance Plan

Dollars in Thousands

Audit Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

Appropriated Resources $57,421 $57,306 $57,306 $54,309 $53,763 $57,463 $65,100 $66,020

Reimbursable Resources $529 $351 $0 $500 $600 $382 $600 $600

Budget Activity Total $57,950 $57,657 $57,306 $54,809 $54,363 $57,845 $65,700 $66,620

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Audit 

Products Delivered 

when Promised to 

Stakeholders

76.0 68.0 71.0 84.0 65.0 80.0 68.0 68.0 68.0

Percentage of 

Recommendations 

Made that Have Been 

Implemented

95.0 93.0 94.0 87.0 89.0 92.0 85.0 85.0 85.0

3B – Investigations

($103,614,000 from direct appropriations, and $900,000 from reimbursable resources): 

While most Offices of Inspectors General focus primarily on waste, fraud, and abuse, TIGTA’s 

mission is more extensive. In addition to protecting the IRS’s ability to collect the majority of 

the revenue for the federal government’s operations, TIGTA also has the statutory responsibility 

of protecting the integrity of tax administration while protecting the IRS’s most valuable 

resource, its employees.

TIGTA’s investigative resources are 

allocated based upon a performance model 

that focuses on three primary areas of 

investigation:

• Employee integrity;

• Employee and infrastructure security; 

and

• External attempts to corrupt tax 

administration.

The performance model (Figure 5) results in reliable statistical data used to make mission-critical 

decisions regarding staffing, budgeting, and training. The performance model uses a ratio of 

those investigations that have the greatest impact on IRS operations or the protection of federal 

tax administration to the total number of investigations conducted. These performance measures 

guide OI’s activities and help to demonstrate the value of investigative accomplishments to 

external stakeholders.

Figure 5: Investigative Performance Model
TIGTA - 23

Employee Integrity: IRS employee misconduct, real or perceived, erodes public trust and 

impedes the IRS’s ability to enforce tax laws effectively. This misconduct manifests itself in a 

variety of ways including misuse of IRS resources or authority, theft, fraud, extortion, taxpayer 

abuses, unauthorized access, and disclosure of tax return information. In FY 2015, 49 percent of 

TIGTA’s investigative body of work involved alleged employee misconduct. TIGTA’s special 

agents possess the knowledge, skills, and expertise to investigate such matters. TIGTA’s efforts 

convey a message to IRS employees that these types of activities will not go unchecked.

TIGTA promotes employee integrity by conducting proactive investigative initiatives to detect 

criminal activity and serious misconduct in the administration of IRS programs. In FY 2015, 

TIGTA initiated 37 proactive investigative initiatives to detect systemic weaknesses or potential 

IRS program vulnerabilities. A recent investigative focus identified seasonal IRS employees 

who continued to receive unemployment benefits after being recalled to work from furlough 

status by the IRS. This investigation resulted in numerous arrests, prosecutions, and terminations 

of IRS employees for fraud.

TIGTA received 12,080 complaints, opened 2,726 investigations, and closed 2,797

investigations in FY 2015. During this period, TIGTA referred for IRS action 1,185 cases of 

employee misconduct and accepted 146 cases of all types of investigations for criminal 

prosecution. As a result of a TIGTA investigation into employee misconduct, a former IRS 

employee was sentenced to 24 months in prison6 for her role in an identity theft scheme.7

 In 

another case, a Fresno, California, IRS employee was arrested8 after being indicted for filing 

fraudulent tax returns.9 The 20-year employee prepared and filed numerous fraudulent federal 

income tax returns for herself, her family members, and others, defrauding the United States of 

approximately $37,387.10

Employee and Infrastructure Security: In FY 2015, TIGTA responded to 1,936 threat-related 

incidents. Tax revenue is critical to our Nation’s infrastructure. Threats and assaults directed at 

IRS employees, facilities, data, and computer systems impede the effective administration of the 

federal tax system. TIGTA has a statutory responsibility to identify, investigate, and respond to 

threats against IRS personnel and physical infrastructure (Figure 6).

TIGTA’s authority to investigate threats and assaults is derived from the provisions of Title 26 

U.S.C. § 7608(b), authority of internal revenue enforcement officers; RRA 98; the Inspector 

General Act of 1978, as amended, and the Inspector General Reform Act of 2008; and is

summarized in Treasury Order 115-01. All reports of threats, assaults, and forcible interference 

against IRS employees performing their official duties are referred to OI. TIGTA has the 

necessary authority to access taxpayer information in support of ongoing investigations, 

including tax matters related to threats and assaults involving the IRS.

 6 W.D. Mo. Judgment filed Nov. 13, 2014.

7 W.D. Mo. Indict. filed Mar. 19, 2014. 8 E.D. Cal. Executed Arrest Warrant filed Feb. 27, 2015.

9 E.D. Cal. Indict. filed Feb. 26, 2015.

10 Id.
TIGTA - 24

To ensure IRS employee safety, OI undertakes investigative initiatives to identify individuals 

who could commit violence against IRS employees, or who could otherwise pose a threat to IRS 

employees, facilities, or infrastructure. OI provides crucial intelligence to IRS officials to assist 

them in making proactive operational decisions about potential violence or other activities that 

could pose a threat to IRS systems, operations, and people.

Figure 6: Investigative Activities (Assaults and Threats) in FY 2015

Over the past several years, the United States has experienced numerous violent incidents in 

schools, private offices, and public areas. These tragic events are unpredictable and result in 

numerous innocent people losing their lives or being severely injured. TIGTA has processed 

over 12,176 threat-related complaints and investigated over 5,971 threats against IRS employees 

from FY 2011 through FY 2015.

TIGTA takes threats directed at the IRS and its employees very seriously. In October 2014, a 

Rhode Island man was sentenced to 12 months and a day in prison, plus three years of supervised 

probation and 300 hours of community service for threatening the life of an IRS employee and 

the employee’s family members.11 The threatening statements were made with the intent to 

impede the official duties of, and to retaliate against, the employee.12 In another case, a Utah 

man was sentenced to 24 months imprisonment and three years of supervised release for the 

illegal possession of a machine gun.13 An investigation was initiated after the individual made 

statements about bombing the IRS office, the police department, and a court building. The man 

 11 D. R.I. Judg. filed Oct. 7, 2014. 12 D. R.I. Indict. filed Jan. 15, 2014. 13 D. Utah Judg. filed Oct. 31, 2014.
TIGTA - 25

subsequently delivered a fully automatic firearm with an obliterated serial number to a Federal 

Bureau of Investigation undercover employee.14

TIGTA’s partnership with the IRS’s Office of Employee Protection (OEP) to identify Potentially 

Dangerous Taxpayers (PDTs) is one example of TIGTA’s commitment to collaborate with the 

IRS and protect IRS employees. If a taxpayer has been designated as potentially dangerous, 

TIGTA conducts a follow-up assessment of the taxpayer after five years and provides the IRS’s 

OEP with information to determine if the taxpayer still poses a danger to IRS employees. 

TIGTA’s special agents are responsible for providing physical security, known as “armed 

escorts,” to IRS employees in dangerous situations. TIGTA’s special agents escort IRS 

employees when they require personal contact with a PDT. These armed escorts provide a safe 

environment for IRS employees to conduct tax administration activities.

External Attempts to Corrupt Tax Administration: TIGTA is statutorily mandated to 

investigate external attempts to corrupt tax administration, which include criminal misconduct by 

nonemployees, such as attempted bribery of IRS employees and impersonation of the IRS. 

Many IRS employees are in direct contact with taxpayers and often encounter situations where a 

taxpayer may challenge the employees’ integrity by offering a bribe. Bribery, or attempted 

bribery, of a public official is a criminal offense and is considered an attack on the integrity of 

the entire IRS organization and the Nation’s system of tax administration. TIGTA is currently 

investigating nationwide IRS impersonation schemes in which criminals are pretending to be 

employees of the IRS and are attempting to collect phantom tax liabilities from innocent 

taxpayers. Since the scam was first reported in the summer of 2013, the TIGTA Hotline has 

received more than 896,000 related contacts, and it is estimated that the scheme has resulted in 

more than $26.5 million in payments made by more than 5,000 victims as of December 2015.

OI is conducting an in-depth forensic review of taxpayer accounts for the May 2015 IRS 

reported data breach, in which criminals used taxpayer-specific data acquired from non-IRS 

sources to successfully gain unauthorized access to tax accounts through IRS’s “Get Transcript” 

application. The investigation will identify the vulnerabilities that allowed the accounts to be 

stolen and generate the evidence necessary to bring the responsible individuals to justice.

With adequate FY 2017 resources, TIGTA will have the necessary staffing to ensure these 

criminal acts are promptly investigated. Another key aspect of protecting the integrity of tax

administration in today’s environment is the oversight and investigation of IRS procurement. On 

average, the IRS awards approximately 9,500 contracts each year, worth approximately $2.1

billion. A 2014 Association of Certified Fraud Examiners report15 estimated that five percent of 

an organization’s revenue is at risk of fraud on an annual basis. In the case of the IRS, this 

projection translates to approximately $105 million annually.

TIGTA focuses its contract fraud investigations on administrative, civil, and criminal violations. 

TIGTA’s contract fraud investigations add to the Nation’s treasury through court-ordered 

settlements and recoveries. With adequate FY 2017 resources, TIGTA could proactively identify 

 14 D. Utah Compl. filed July 9, 2013. 15 Association of Certified Fraud Examiners, Report to the Nations on Occupational Fraud and Abuse, 2014.
TIGTA - 26

and address procurement fraud risks in IRS programs to help ensure that the IRS and taxpayers 

receive full value for the billions of contracting dollars spent.

Description of Performance:

TIGTA’s investigative performance model is a ratio of those investigations that have the greatest 

impact on IRS operations or the protection of federal tax administration to the total number of 

investigations conducted. These performance measures guide OI’s activities and help to

demonstrate the value of investigative accomplishments to external stakeholders. The 

performance model provides reliable statistical data, which are used to make mission-critical 

decisions regarding investigative staffing, budgeting, and training.

The FY 2015 Percentage of Results from Investigative Activities was 93 percent, 14 percent 

above the target of 79 percent. This increase in investigative activities was due primarily to the 

finalization of a large number of cases opened in prior years that were accepted for prosecution. 

With the FY 2017 budget request, TIGTA plans to develop new special agents’ skills and 

abilities through training and mentoring programs designed to maintain a high level of 

performance. The FY 2017 budget request will provide funding for TIGTA to enhance its 

performance of investigative activities and support maintaining the performance goal of 81 

percent for FY 2017.

3.1.2 – Investigations Budget and Performance Plan

Dollars in Thousands

Investigations Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $94,579 $94,694 $94,390 $89,452 $95,748 $101,476 $102,175 $103,614

 Reimbursable Resources ($442) $949 $0 $400 $1,100 $429 $900 $900

Budget Activity Total $94,137 $95,643 $94,390 $89,852 $96,848 $101,905 $103,075 $104,514

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Results 

from Investigative 

Activities

86.0 82.0 89.0 90.0 92.0 93.0 79.0 81.0 81.0
TIGTA - 27

Section 4 – Supplemental Information

4A – Summary of Investments

Technology Investments - TIGTA has no major IT investments based on criteria of the OMB and 

the Department of the Treasury. Several non-major investments, however, directly support the 

mission, strategy, and day-to-day operations of the bureau including:

• IT Applications and Collaboration - This investment represents an enterprise view of 

TIGTA's applications development responsible system design, development, testing, 

deployment and maintaining information applications systems (i.e., CRIMES, formerly 

known as PARIS).

• IT Infrastructure End User Systems and Support - This investment is an enterprise view 

of TIGTA's end user hardware (desktop, laptop, handheld devices), peripherals (local and 

shared printers) and software (operating systems, office automation suites, messaging and 

groupware), and help desk.

• IT Infrastructure Mainframe and Servers Services and Support - This investment 

represents an enterprise view of TIGTA's servers, including hardware and software 

operations, licensing, maintenance, back-up, continuity of operations, disaster recovery, 

virtualization and data center consolidation.

• IT Infrastructure Telecommunications - This investment represents an enterprise view of 

TIGTA's data networks and telecommunications hardware and software operations, licenses, 

maintenance, back-up, continuity of operations, and disaster recovery.

• IT Security Systems & Enterprise Architecture - This investment represents an enterprise 

view of TIGTA's IT investments related to cyber security systems related to TIGTA's 

electronic systems in accordance with the Federal Information Security Management Act, 

and enterprise architecture services.

Law Enforcement Vehicles - Effective FY 2014, TIGTA acquires its vehicles by lease through 

the General Services Administration. However, TIGTA will maintain ownership of 

approximately 10 surveillance/communications vehicles. These vehicles will remain part of 

TIGTA’s capital asset strategy. The vehicles will be used to support TIGTA’s investigations and 

must meet the mission-critical need to conduct criminal law enforcement activities. TIGTA 

communications vehicles also are used in support of its Continuity of Operations (COOP) Plan. 

COOP provides a mechanism for the organization to recover full operational capability following 

a critical incident, including the capability to communicate during a local or national emergency.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

 

Community Development

Financial Institutions Fund

FY 2017

President’s Budget

February 9, 2016
CDFI - 2

Table of Contents

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

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

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

1B – Vision, Priorities, and Context............................................................................................3

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

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

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

Section 2 – Budget Adjustments and Appropriations Language ............................................11

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

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

2C – Legislative Proposals .........................................................................................................14

Section 3 – Budget and Performance Plan ................................................................................16

3.1.1 – Administration Budget and Performance Plan .................................................................17

3B - Community Development Financial Institutions Program...................................................17

3.1.2 – CDFI Program Budget and Performance Plan............................................................18

3C – New Markets Tax Credit Program.......................................................................................18

3.1.3 – New Markets Tax Credit Program ...............................................................................19

3D – Bank Enterprise Award Program.........................................................................................19

3.1.4 – Bank Enterprise Award Program.................................................................................20

3E – Native American CDFI Assistance Program .......................................................................20

3.1.5 – Native American CDFI Assistance Program ...............................................................21

3F – Healthy Food Financing Initiative........................................................................................21

3.1.6 – Healthy Food Financing Initiative ................................................................................22

3G - Capital Magnet Fund Program.........................................................................................22

3H - CDFI Bond Guarantee Program ......................................................................................23

3.1.7 – Bond Guarantee Program Resource Detail Table.......................................................24

3.1.8 – Financing Accounts – Non-Budgetary Summary ........................................................24

Section 4 – Supplemental Information ......................................................................................25

4A – Summary of Capital Investments.....................................................................................25
CDFI - 3

Section 1 – Purpose

1A – Mission Statement

The mission of the Community Development Financial Institutions Fund (CDFI Fund) is to 

increase economic opportunity and promote community development investments for underserved 

populations and in distressed communities in the United States.

1.1 – Appropriations Detail Table

Dollars in Thousands

Community Development Financial Institutions Fund FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Community Development Financial Institutions Program 0 152,400 0 153,423 0 153,423 0 0 0% 0%

Bank Enterprise Award Program 0 18,000 0 19,000 0 19,000 0 0 0% 0%

Native American CDFI Assistance Program 0 15,000 0 15,500 0 15,500 0 0 0% 0%

Administration 79 23,100 79 23,600 87 26,000 8 2,400 10.13% 10.17%

Healthy Food Financing Initiative 0 22,000 0 22,000 0 22,000 0 0 0% 0%

Small Dollar Loan Program 0 0 0 0 0 10,000 0 10,000 0% N/A

Subtotal New Appropriated Resources 79 $230,500 79 $233,523 87 $245,923 8 $12,400 10.13% 5.31%

Other Resources:

User Fees* 0 1,040 0 1,059 0 1,269 0 210 0% 19.83%

Recovery from Prior Years 0 3,924 0 5,200 0 5,200 0 0 0% 0%

Unobligated Balances from Prior Years 0 10,856 0 5,500 0 5,500 0 0 0% 0%

Subtotal Other Resources 0 $15,820 0 $11,759 0 $11,969 0 $210 0% 1.79%

Total Budgetary Resources 79 $246,320 79 $245,282 87 $257,892 8 $12,610 10.13% 5.14%

*Portion reflects authorization of the Bond Guarantee Program

1B – Vision, Priorities, and Context

The CDFI Fund’s vision is to economically empower America’s underserved and distressed

communities. Our priority is to advance the Department of the Treasury’s Strategic Goal No. 1:

Promote domestic economic growth and stability while continuing reforms of the financial system. 

The CDFI Fund is uniquely positioned as the federal government entity whose primary mission is 

to build the capacity of CDFIs to provide loans, investments, business counseling, basic banking 

services, and financial literacy training to underserved and distressed communities.

Since its creation in 1994, the CDFI Fund has awarded almost $2.3 billion to CDFIs, community 

development organizations, and insured depository institutions through the CDFI Program, the 

Native American CDFI Assistance Program (NACA Program), Healthy Food Financing Initiative 

(HFFI), and the Bank Enterprise Award (BEA) Program. In addition, the CDFI Fund has allocated

$43.5 billion in New Markets Tax Credit (NMTC) allocation authority through the NMTC 

Program to Community Development Entities (CDEs), and awarded $80 million through the 

Capital Magnet Fund (CMF). Under the FY 2013, FY 2014, and FY 2015 authorities in the CDFI 

Bond Guarantee Program, the Department of the Treasury provided seven bond guarantees totaling 

$852 million to Qualified Issuers that provided bond loans to sixteen Eligible CDFIs.

The CDFI Fund continues to experience growth in the demand for its award programs: 

• CDFI Program -- For the FY 2015 funding round of the CDFI Program, the CDFI Fund 

received 356 qualified applications requesting more than $435 million in total funding. In

addition, the CDFI Fund received applications from 33 qualified organizations requesting 
CDFI - 4

over $101 million for the Healthy Food Financing Initiative-Financial Assistance (HFFI-FA)

Program. In September 2015, the CDFI Fund announced that 152 organizations received $160 

million in CDFI Program awards. Additionally, 11 organizations received $22 million in 

HFFI-FA awards.

• NACA Program -- For the FY 2015 NACA Program funding round, the CDFI Fund received 

54 qualified applications requesting $34 million in funding. In September 2015, the CDFI 

Fund announced that 43 organizations received nearly $20 million in NACA Program awards.

• NMTC Program -- For the CY 2014 NMTC Program allocation round, the CDFI Fund 

received 263 qualified applications requesting approximately $19.9 billion in total allocation 

authority, and made 76 awards totaling approximately $3.5 billion. The CDFI Fund opened the 

CY 2015 NMTC Program award round in October 2015.

• BEA Program -- For the FY 2015 BEA Program funding round, the CDFI Fund received 103

qualified applications requesting approximately $177 million in awards. In September 2015, 

the CDFI Fund announced that 83 organizations received approximately $18.1 million in BEA 

Program awards.

• CDFI Bond Guarantee Program -- For FY 2015, the maximum guarantee authority was $750 

million and the CDFI Fund received six guarantee applications seeking a total of $680 million 

in guarantee authority. In FY 2015, the Department of the Treasury provided three bond 

guarantees totaling $327 million to Qualified Issuers that provided bond loans to nine Eligible 

CDFIs.

FY 2015 Priorities and Progress

In FY 2015, the CDFI Fund focused on a number of priority initiatives related to its award 

programs and business processes.

Priority 1: CDFI Program Evaluation: The CDFI Fund released two evaluation reports in March

2015 that provide the first-ever analysis and evaluation of the effectiveness of CDFIs compared to 

mainstream lenders. The first report, CDFIs Stepping Into the Breach: An Impact Evaluation 

Summary Report, undertaken by Michael Swack, Eric Hangen and Jack Northrup from the Carsey 

School of Public Policy at the University of New Hampshire, is an analysis of the impact of 

financial assistance awards from the CDFI Program on CDFI loan fund recipients. The second 

report, Introduction to Risk and Efficiency among CDFIs: A Statistical Evaluation using Multiple 

Methods, conducted by Gregory Fairchild from the Darden School of Business at the University of 

Virginia and Ruo Jia from the Stanford Graduate School of Business, is an analysis of CDFI banks 

and credit unions to assess their risk of failure and their operational efficiency relative to 

mainstream financial institutions. 

The reports concluded that CDFIs are resilient and a reliable resource for capital in underserved 

communities, manage risk as well as more conventional lenders, and perform as efficiently as 

mainstream financial institutions. The reports recommended that the CDFI Fund better measure 

the performance and impact of CDFIs. In response to these findings, the CDFI Fund developed 

the Annual Certification and Data Collection Report that all certified CDFIs will be required to 

complete. The CDFI Fund will use this data to better understand the structure and performance of 
CDFI - 5

the CDFI industry. As discussed below, this is one component of the CDFI Fund’s risk assessment

framework.

Priority 2: Expanding CDFI Investments in Underserved Areas: In FY 2014, the CDFI Fund 

launched a new multi-year capacity building initiative called “Expanding CDFI Investments in 

Underserved Areas.” This initiative was developed in response to a Congressional request, backed 

by funding in the CDFI Fund’s FY 2014 appropriation, to expand the reach of CDFIs into 

underserved communities. In FY 2015, the CDFI Fund provided advanced training and technical 

assistance to CDFIs, including one-on-one assistance and peer cohort forums, to increase their

presence and investment activity in underserved communities. The CDFI Fund’s Virtual Resource 

Bank made the materials and toolkit from the three free, in-person training sessions conducted in 

FY 2015 available to the public. In FY 2016, the CDFI Fund will conduct 15 recorded technical 

assistance webinars on topics related to expanding CDFI coverage in underserved areas and 

provide additional online resources on topics related to market analysis, expanding business 

operations and models, capitalizing CDFIs, forming new entities, measuring CDFI impact, and 

increasing collaboration and partnerships.

Priority 3: Native CDFI Capacity and Sustainability: In FY 2014, the CDFI Fund launched a multiyear capacity building initiative called “Building Native CDFIs’ Sustainability and Impact” to 

develop a multifaceted training and technical assistance program to support Native CDFIs’ efforts

to become sustainable and achieve greater impact in Native Communities. In FY 2015, this 

initiative provided a wide range of specialized training, technical assistance, and peer learning 

opportunities designed to meet the unique needs of Native CDFIs at all stages of growth. 

Additionally, the CDFI Fund commissioned a report on access to capital for Native Communities

to be released in FY 2016.

Priority 4: CDFI Fund Capacity Building Initiative Innovation Challenge: In May 2015, the CDFI 

Fund launched an Innovation Challenge as part of its capacity building activities. This initiative 

was developed using funding provided in the FY 2015 appropriation to expand CDFI investments 

in underserved communities. The goal of the challenge was to support the development of 

methods, models, tools, or products that the CDFI industry could use to expand or increase 

investments in underserved areas. The CDFI Fund awarded a contract of $947,000 to the 

Association for Enterprise Opportunity (AEO) to build and test an online tool for matching CDFIs 

with small businesses in low-income areas that need investment.

Priority 5: Implement the Award Management Information System (AMIS): In FY 2015, the 

CDFI Fund began replacing its legacy awards management system with the launch of AMIS, an 

integrated, enterprise-wide cloud-based solution. The benefits of AMIS will include increased 

efficiency in processing grant, loan, bond, and tax credit applications, greater accuracy, and 

transparency of program data, and better integration of information across programs. AMIS will 

be implemented in phases over several years. In FY 2016, the CDFI/NACA, CMF, BEA and 

NMTC Programs will be converted to AMIS, including certification, funding applications, and 

disbursement of awards. Subsequent phases to be implemented in FY 2017 include conversion of

the BGP and compliance for all programs.
CDFI - 6

Priority 6: CDFI Assessment and Risk Management Framework: The CDFI Assessment and Risk 

Management Framework is a set of tools that will allow the CDFI Fund to improve the 

certification and award-making processes, more accurately assess the performance of CDFIs, more 

efficiently manage compliance risk and better track industry-wide trends. In FY 2015, the CDFI 

Fund completed Minimum and Prudent Standards (MAPS) that will serve as the core risk metrics

for CDFIs across programs and completed a review of key performance measures and risk factors 

for the Annual Certification and Data Collection Report (see below). In FY 2016, the CDFI Fund 

will design and test application assessment tools for the CDFI/NACA program and for compliance. 

The build out and implementation of these tools will begin in FY 2017.

Priority 7: Annual Certification and Data Collection Report: In 2015, the CDFI Fund developed 

the Annual Certification and Data Collection Report that all certified CDFIs will be required to 

complete. Data collected from the report will be entered into an industrywide database that will 

help the CDFI Fund better understand the structure and performance of the industry as a whole. 

The report has been approved by the Office of Management and Budget (OMB) in accordance 

with the Paper Reduction Act. The report will be implemented in calendar year 2016.

Priority 8: Bank Enterprise Award (BEA) Program Evaluation: In 2015, the CDFI Fund began an 

evaluation of the BEA Program. The objective is to assess the program’s performance and 

determine the extent to which the program has increased bank investments in CDFIs and 

underserved areas. The evaluation will include a detailed analysis of the evolution of the program, 

the characteristics of applicants and awardees, and the types and levels of activities undertaken by 

applicants, awardees, and peer banks in the communities they serve. A written survey and indepth interviews will also be conducted by the research team led by A. Reddix and Associates, the 

Woodstock Institute, and the National Community Reinvestment Coalition. The evaluation will be 

completed in 2016.

Priority 9: NMTC Program Compliance Risk Research: In FY 2015 the CDFI Fund began work on 

a study to address issues related to monitoring NMTC Program outcomes and mitigating 

compliance risks throughout the seven-year tax credit reporting period. The NMTC Program 

allocation agreement establishes programmatic and compliance reporting requirements to ensure 

the tax credit is delivering maximum public benefit to qualified low-income community 

businesses. The study will analyze the financial structures associated with different investments 

and project types and their programmatic and compliance outcomes. The key compliance risks 

include the complexity of investment structures and the variation in project types and costs, which 

make it difficult to determine the investor rate of return, the costs of capital to qualified borrowers,

and the fees to borrowers and investors. In addition, there is a recognized need to improve 

financial monitoring of allocatees and sub-allocatees and to assess the effectiveness of the 

financing structure in bringing investment projects to completion. The research will be completed

by March 31, 2017.

Priority 10: Capital Magnet Fund (CMF): CMF was authorized by the Housing and Economic 

Recovery Act of 2008 (HERA), which requires the Government Sponsored Enterprises (GSEs), 

Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage 

Corporation (Freddie Mac) to set aside annual allocations to fund CMF. The Federal Housing 

Finance Agency (FHFA), acting as the GSEs’ conservator, temporarily suspended these allocations
CDFI - 7

before they began, and Congress appropriated $80 million to fund an initial round of the CMF in 

FY 2010. In December 2014, the FHFA lifted its suspension of the GSEs’ allocation and directed 

the GSEs to begin allocating funds for the CMF for calendar year 2015. The CDFI Fund

anticipates opening the second round of funding in early 2016.

Priority 11: CDFI Fund Strategic Plan: The CDFI Fund is creating a new five-year strategic plan.

In order to create a viable plan informed by the needs of communities, the CDFI Fund hosted a

national listening tour during the summer of 2015. Intended to foster discussion and engagement 

among local community development leaders and practitioners, the listening tour was co-hosted by 

the CDFI Fund, the Federal Reserve Bank of San Francisco, Federal Reserve Bank of Kansas CityDenver Branch, Federal Reserve Bank of Chicago, Federal Reserve Bank of New York, and 

Federal Reserve Bank of Atlanta. Participants at each session included community development 

experts, thought leaders, and practitioners, including speakers from the Federal Reserve Banks and 

local CDFIs. Over 300 individuals participated in-person and another 70 participated in 

conference calls. Another 280 individuals responded to an electronic survey with questions that 

mirrored the topics discussed in the listening sessions. The CDFI Fund will use input from the 

sessions to shape the high-level framework, as well as a strategic plan that aligns with Treasury’s 

strategic plan. The CDFI Fund expects to complete its strategic plan by the end of FY 2016.

FY 2016 and FY 2017 Priorities

In FY 2016 and FY 2017, the CDFI Fund will continue to implement the following programs:

• CDFI Program, 

• Native American CDFI Assistance Program,

• Healthy Food Financing Initiative,

• New Markets Tax Credit Program, 

• Bank Enterprise Award Program, 

• CDFI Bond Guarantee Program, and 

• Capital Magnet Fund. 

Additionally, the CDFI Fund will continue to prioritize the use of data and evidence in its 

programs and operations. Specifically, during FY 2016, the CDFI Fund will:

• Continue efforts to develop and implement the CDFI Assessment and Risk Management 

Framework;

• Fully implement AMIS to automate business processes, strengthen internal operations and 

enhance reporting capabilities;

• Deploy the CDFI Annual Certification and Data Collection Report;

• Release the BEA Program evaluation;

• Continue work on the compliance research project for the NMTC Program begun in October 

2015, which is scheduled to be completed by March 31, 2017;

• Continue to build capacity for CDFIs to expand investments in underserved rural areas; and

• Release the “Access to Credit and Capital in Native Communities” report.
CDFI - 8

FY 2017 Budget Request 

The CDFI Fund requests the following for FY 2017:

• $153.4 million for the CDFI Program to provide FA and TA awards, training and technical 

assistance. Through the CDFI Program, the CDFI Fund makes awards to invest in and build 

the capacity of CDFIs to serve low-income communities lacking adequate access to affordable 

financial products and services. The proposed budget supports FA and TA awards to CDFIs to 

further goals that include, among others:

- Economic development (job creation, small business lending, and commercial real estate 

development);

- Affordable housing development (housing development and homeownership); 

- Provision of financial services (such as basic banking services to underserved 

communities); and

- Provision of development services (such as financial literacy or homebuyer counseling and 

education).

• $19 million for the BEA Program, which incentivizes insured banks and thrifts to invest in 

CDFIs and increase their lending and financial services in economically distressed 

communities. 

• $15.5 million for FA and TA awards for the NACA Program, which provides awards and 

training to CDFIs that primarily serve Native Communities and to entities proposing to become 

or create Native CDFIs. These awards will increase access to credit, capital, and financial 

services in Native Communities.

• $26 million in administrative funding to support a variety of purposes, including:

- Staffing and resource demands created by significant growth across all programs, including 

the CDFI/NACA Program, NMTC Program, CDFI Bond Guarantee Program, and Capital 

Magnet Fund;

- Administration of non-monetary programs and activities, including compliance monitoring 

and CDFI certification;

- Enhancement of existing management and information systems including the integration of 

the Community Investment Impact System into AMIS and improvement of operational 

efficiency and effectiveness.

- Development of the Community Development Impact Measuring Estimator (CDIME) 

modeling tool to standardize the reporting of job and social impact performance measures. 

• $22 million for HFFI awards to CDFIs to expand financing for healthy food options in 

underserved urban and rural communities. 

• $10 million for the Small Dollar Loan Program to provide CDFIs with FA grants to establish 

loan loss reserve funds and TA grants for capacity building. This funding will encourage 

CDFIs to address the issue of predatory lending in their communities and provide an 

alternative to payday lenders.
CDFI - 9

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Community Development Financial Institutions Fund FTE Amount

FY 2016 Enacted 79 $233,523

Changes to Base

Maintaining Current Levels (MCLs) 0 $412

Pay-Raise 0 $100

Pay Annualization 0 $33

Non-Pay 0 $279

Non-Recurring Costs 0 ($337)

Research and Evaluation (Data Collection) 0 ($337)

Subtotal Changes to Base 0 $75

Total FY 2017 Base 79 $233,598

Program Changes

Program Increases 0 $12,325

Administration 8 $2,325

Small Dollar Loan Program 0 $10,000

Subtotal Program Changes 0 $12,325

Total FY 2017 Request 87 $245,923

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .........................................................+$412,000 / +0 FTE

Pay-Raise +$100,000 / +0 FTE 

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$33,000 / +0 FTE 

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$279,000 / +0 FTE 

Funds are requested for non-labor costs such as travel, contracts, rent, and equipment.

Non-Recurring Costs:.....................................................................................-$337,000 / +0 FTE

Administration - Research and Evaluation (Data Collection) -$337,000 / +0 FTE 

The CDFI Fund will non-recur a portion of research and evaluation funding. This reduction will 

not impact on-going research and evaluation initiatives.

Program Increases:...................................................................................+$12,325,000 / +8 FTE

Administration +$2,325,000 / +8 FTE

This increase will allow the CDFI Fund to allocate an estimated $74 million in awards under the 

Capital Magnet Fund (CMF) and to develop the Community Development Impact Measuring 

Estimator (CDIME) modeling tool. Awards made through the CMF program will be funded by 

annual transfers from Fannie Mae and Freddie Mac pursuant to the Housing and Economic 

Recovery Act of 2008 (HERA). 

The CDIME modeling tool will standardize the reporting of job and social impact performance 

measures. This web-based modeling tool will draw on a variety of data sources from major federal 

statistical agencies including the Census Bureau, Center for Economic Studies, Bureau of 
CDFI - 10

Economic Analysis, Department of Labor and Housing and Urban Development to develop 

statistical estimates for industry- and community-level outcomes, such as job creation and 

retention rates, and various community impacts for a given level of investment. The CDIME will 

improve reporting data quality and lay the foundation for more robust performance measurement. 

Currently, the impact data collected by the CDFI Fund is self-reported and not validated. CDIME 

will allow for external validation of impact data, making it a more reliable tool for evaluating 

program effectiveness.

Small Dollar Loan Program + $10,000,000 / + 0 FTE

The CDFI Fund requests $10 million to support the Small Dollar Loan Program. This funding will 

be used to encourage CDFIs to address the issue of predatory lending in their communities and 

provide an alternative to payday lenders. Small dollar loans typically carry higher credit risk and 

transaction costs than other types of loans in a CDFI’s portfolio. Financial Assistance grants will 

provide funding for loan loss reserves to mitigate the increased risk of default by the borrower. 

Technical Assistance grants will assist in offsetting higher loan origination and servicing costs. 

Section 1206 of the Dodd–Frank Wall Street Reform and Consumer Protection Act (P.L. 111–203)

defines small dollar loans as those that do not exceed $2,500. CDFIs will be required to provide 

non-federal matching funds in an amount equal to 50 percent of the amount received from the 

CDFI Fund. An estimated 10 awards will be provided through this initiative.
CDFI - 11

Section 2 – Budget Adjustments and Appropriations Language

2.2 – Operating Levels Table

Dollars in Thousands

Community Development Financial Institutions Fund FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 7,869 8,030 8,163

11.9 - Personnel Compensation (Total) 7,869 8,030 8,163

12.0 - Personnel benefits 2,046 2,238 2,273

Total Personnel Compensation and Benefits $9,915 $10,268 $10,436

21.0 - Travel and transportation of persons 177 93 93

22.0 - Transportation of things 4 4 4

23.3 - Communication, utilities, and misc charges 225 225 225

24.0 - Printing and reproduction 125 100 100

25.1 - Advisory and assistance services 6,473 6,073 7,073

25.2 - Other services 118 118 118

25.3 - Other purchases of goods & serv frm Govt accounts 4,954 6,130 7,722

25.5 – Research and development contracts 1,023 500 163

26.0 - Supplies and materials 56 59 59

31.0 - Equipment 30 30 30

41.0 – Grants, subsidies, and contributions 207,400 209,923 219,900

Total Non-Personnel 220,585 223,255 235,487

Subtotal New Appropriated Resources $230,500 $233,523 $245,923

Budget Activities:

Community Development Financial Institutions Program 156,457 165,023 165,123

Bank Enterprise Award Program 18,132 19,000 19,000

Native American CDFI Assistance Program 18,695 15,500 15,500

Administration 29,986 23,759 26,269

Healthy Food Financing Initiative 23,050 22,000 22,000

Small Dollar Loan Program 0 0 10,000

Total Budgetary Resources* $246,320 $245,282 $257,892

FTE 79 79 87

*This table includes all available resources, including annual appropriations, available multi-year appropriations, reimbursable 

resources and offsetting collections and user fees
CDFI - 12

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND

To carry out the Riegle Community Development and Regulatory 

Improvements Act of 1994 (subtitle A of title I of Public Law 103–

325), including services authorized by section 3109 of title 5, United 

States Code, but at rates for individuals not to exceed the per diem rate 

equivalent to the rate for EX-3, $[233,523,000]245,923,000. Of the 

amount appropriated under this heading—

(1) not less than $153,423,000, notwithstanding section 108(e) of 

Public Law 103–325 (12 U.S.C. 4707(e)) with regard to Small and/or 

Emerging Community Development Financial Institutions Assistance 

awards, is available until September 30, [2017]2018, for financial 

assistance and technical assistance under subparagraphs (A) and (B) of 

section 108(a)(1), respectively, of Public Law 103–325 (12 U.S.C. 

4707(a)(1)(A) and (B)), of which up to $[3,102,500]2,882,500 may be 

used for the cost of direct loans: Provided, That the cost of direct and

guaranteed loans, including the cost of modifying such loans, shall be 

as defined in section 502 of the 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; 

(2) not less than $15,500,000, notwithstanding section 108(e) of Public 

Law 103–325 (12 U.S.C. 4707(e)), is available until September 30, 

[2017]2018, for financial assistance, technical assistance, training and 

outreach programs 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; 

(3) not less than $19,000,000 is available until September 30, 

[2017]2018, for the Bank Enterprise Award program; 

(4) not less than $22,000,000, notwithstanding subsections (d) and (e) 

of section 108 of Public Law 103–325 (12 U.S.C. 4707(d) and (e)), is 

available until September 30, [2017]2018, for a Healthy Food 

Financing Initiative to provide financial assistance, technical assistance, 

training, and outreach to community development financial institutions 

for the purpose of offering affordable financing and technical assistance 

Revises the direct loan 

cost allowance based on 

updated subsidy rate.
CDFI - 13

to expand the availability of healthy food options in distressed 

communities; 

(5) up to $[23,600,000]26,000,000 is available until September 30, 

[2016]2018, for administrative expenses, including administration of 

CDFI fund programs and the New Markets Tax Credit Program, of 

which [not less than $1,000,000 is for capacity building to expand 

CDFI investments in underserved rural areas, and] up to $300,000 is for 

administrative expenses to carry out the direct loan program; [and]

(6) not less than $10,000,000 is available until September 30, 2018, to 

provide grants for loan loss reserve funds and to provide technical 

assistance for small dollar loan programs under section 1206 of the 

Dodd-Frank Wall Street Reform and Consumer Protection Act (Public 

Law 111–203);

([6]7) during fiscal year [2016]2017, none of the funds available under 

this heading are available for the cost, as defined in section 502 of the 

Congressional Budget Act of 1974, of commitments to guarantee bonds 

and notes under section 114A of the Riegle Community Development 

and Regulatory Improvement Act of 1994 (12 U.S.C. 4713a): Provided, 

That commitments to guarantee bonds and notes under such section 

114A shall not exceed $[750,000,000]1,000,000,000: Provided further, 

That such section 114A shall remain in effect until September 30, 

[2016]2017. (Department of the Treasury Appropriations Act, 2016.)

Extends the availability 

of Administration 

funding by one year to 

match program funding 

availability and removes

capacity building text 

which is not part of the 

FY 2017 request. 

Provides funding for the 

Small Dollar Loan 

Program.

Extends the Bond 

Guarantee Program

through FY 2017.
CDFI - 14

2C – Legislative Proposals

Treasury recommends extension of the CDFI Bond Guarantee Program through FY 2017. 

Justification

The CDFI Bond Guarantee Program provides CDFIs access to a significant source of capital. By 

providing guarantees of bonds issued by Qualified Issuers, the CDFI Bond Guarantee Program 

injects new and substantial capital into our nation’s most distressed communities. CDFIs can gain 

from the potential scale of the CDFI Bond Guarantee Program, which offers low-cost, long-term 

credit for the development of commercial real estate, rental housing, senior living, daycare or 

healthcare centers, small businesses, and rural infrastructure, among others. This will further close 

the gap of financing in these communities, generate new credit information in these market 

segments, and yield the benefit of lower financing costs for borrowers in these underserved 

communities. These benefits will be realized at no cost to taxpayers because the program requires 

no subsidy.

Treasury proposes the following legislative changes: (i) to extend the CDFI Bond Guarantee 

Program through FY 2017; (ii) to reduce the minimum bond issue size from $100 million to $25 

million; (iii) to permit the Secretary to adjust the risk-share pool payment requirement, based on 

the borrower’s credit quality, from zero to four percent; (iv) to collect a mandatory one percent fee 

from all borrowers; and (v) to revise the relending account language to correct a technical drafting 

error. 

Suggested Legislative Language (same language proposed in the FY 2016 President’s 

Budget)

SEC. 126. AMENDMENTS TO COMMUNITY DEVELOPMENT FINANCIAL 

INSTITUTIONS BOND PROGRAM. Section 114A of the Riegle Community Development and 

Regulatory Improvement Act of 1994 (12 U.S.C. 4713a) is amended— (a) in subsection (c)(2) by 

striking ", multiplied by an amount equal to the outstanding principal balance of issued notes or 

bonds"; (b) by amending subsection (d) to read as follows— "(d) RISK-SHARE POOL.— Each 

qualified issuer shall, during the term of a guarantee provided under the Program, establish a riskshare pool, capitalized by contributions from eligible community development financial institution 

participants in amounts that shall not exceed 4 percent of the guaranteed amount outstanding on 

the subject notes and bonds, which contribution amounts shall be determined by the Secretary for 

each eligible community development financial institution participant based on the Secretary's 

assessment of the participant's credit quality."; (c) in subsection (e)(2)(B), by striking 

"$100,000,000" and inserting "$25,000,000"; (d) in subsection (g) by amending the subsection to 

read as follows: "(g) FEES.— "(1) IN GENERAL.— "(A) QUALIFIED ISSUER.—A qualified 

issuer that receives a guarantee issued under this section on a bond or note shall pay a fee to the 

Secretary, in an amount equal to 10 basis points of the amount of the unpaid principal of the bond 

or note guaranteed. "(B) ELIGIBLE CDFI PARTICIPANT.—An eligible community development 

financial institution participant that receives a bond loan under this section shall pay a fee to the 

Secretary, in an amount equal to 1 percent of the unpaid principal of the bond or note guaranteed. 

"(2) PAYMENT. — "(A) QUALIFIED ISSUER.—A qualified issuer shall pay the fee required 

under paragraph (1)(A) on an annual basis. "(B) ELIGIBLE CDFI PARTICIPANT.—An eligible 

community development financial institution participant shall pay the fee required under paragraph 

(1)(B) at the time of loan disbursements to the participant."(3) USE OF FEES.—Fees collected by 
CDFI - 15

the Secretary— "(A) under paragraph (1)(A) shall be used to reimburse the Department of the 

Treasury for any administrative costs incurred by the Department in implementing the Program 

established under this section and shall be available until expended; and "(B) under paragraph 

(1)(B) shall be deposited by the Secretary into an account that shall be available to the Secretary to 

cover credit subsidy costs and to pay principal and interest on the guaranteed bonds or notes in the 

event of a delinquency in repayment of loans to eligible community development financial 

institution participants."; and (e) in subsection (k), by striking "2014" and inserting "2017". 
CDFI - 16

Section 3 – Budget and Performance Plan

3A – Administration

($26,000,000 from direct appropriations):

This budget activity encompasses the CDFI Fund’s operational support and management activities 

for each of its award programs and supports the CDFI Fund’s Strategic Goal No. 4: To increase 

resource and human capital management to maximize performance, efficiency, and program 

results. This includes, among other activities, developing regulations, notices of funding 

availability, and application materials; reviewing and evaluating certification and funding 

applications; selecting awardees; finalizing the terms of award agreements; making disbursements; 

collecting and evaluating performance data; and monitoring awardees’ compliance. All of these 

tasks support activities that allow the CDFI Fund to carry out its overall mission. 

Description of Performance:

The CDFI Fund’s administrative performance metrics measure progress in enhancing its program 

administrative business processes to enable quicker award decisions and disbursement of award

funds. 

The CDFI Fund’s two administrative measures are organization-wide efficiency measures based 

on the weighted average of the number of applications/awards across all programs. 

• The All-application-award Cycle Time performance target was set at 7 months for FY 2015

and FY 2016. In FY 2015, the application-award target was missed by more than one month 

because of a change in matching funds requirements under the December 2014 appropriation 

language which required supplemental notification of applicants and additional reviews of the 

applicant’s matching funds documentation. The seven-month target has been retained for both 

FY 2016 and 2017 because the CDFI Fund has revised its internal policies and procedures to 

improve the cycle time performance through implementation of new application review and 

matching funds procedures. In addition, once the CDFI Fund’s new Awards Management 

Information System (AMIS) is fully deployed, the application cycle time should benefit from 

the automation of application intake and review.

• The All-Award-Disbursement Cycle Time measures in months how quickly the CDFI Fund 

manages to disburse 85 percent of program funds after the award announcement. The FY 2015 

target was set at 4 months. The FY 2015 results will be available in February 2016, four 

months after the last award announcement, when the relevant data is available. Internal 

projections indicate the CDFI Fund will not meet its FY 2015 target due to changes in award 

disbursement processes required by the Office of Management and Budget’s Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

(Uniform Guidance). The Uniform Guidance requires that grant funds be disbursed in tranches 

as opposed to single disbursements. Accordingly, the CDFI Fund plans to revise this measure 

to reflect time to initial disbursement and establish new baseline targets in FY 2016.

The All-Affordable Housing measure captures the number of affordable housing units developed or 

produced as a result of CDFI Fund awards, as reported by CDFI, NMTC and CMF program 

awardees. The actual results of 27,004 affordable housing units for FY 2015 fell short of the 

ambitious target of 36,000 units. The target was missed due to changes in housing investments 

across programs. There were declines in housing lending by CDFI awardees largely due to a 
CDFI - 17

decline in the number of awardees focusing on housing (3,000 fewer units than the prior year), a 

slight decline in NMTC housing investments (540 fewer than the prior year) and a deferral of the 

completion of 1,300 CMF funded housing units to 2016. These trends illustrate the difficulty in 

projecting targets for activities not directly required under awardees’ assistance agreements. A 

provisional target is retained for 2016 which does not factor in results from future rounds of 

funding for CMF. Please note that for CMF awards made in FY 2016, the outcomes will not be 

reported until FY 2018.

3.1.1 – Administration Budget and Performance Plan

Dollars in Thousands

Administration Budget Activity

Resource Level FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Enacted

FY 2017 

Request

Appropriated Resources $13,797 $18,602 $22,965 $21,764 $24,636 $23,100 $23,600 $26,000

Budget Activity Total $13,797 $18,602 $22,965 $21,764 $24,636 $23,100 $23,600 $26,000

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

ALL - Award Cycle Time 

(months) N/A 7.4 6.5 6.8 7.1 8.3 7.0 7.0 7.0

ALL - Disbursement Cycle 

Time (months) N/A 2.0 3.1 4.5 4.5 4.5* 4.0 4.5 4.5

ALL - Number of Affordable 

Housing Units Developed or 

Produced (units)

N/A 19,083 27,433 26,391 32,621 27,004 36,000 29,000 29,000

Key: DISC - Discontinued

 *Projected results. The earliest this measure can be reported is February 2016 (four months after the last award announcement).

3B - Community Development Financial Institutions Program

($153,423,000 from direct appropriations): 

The CDFI Program supports the CDFI Fund’s Strategic Goal No. 1: To expand the capacity of 

financial institutions to provide credit, capital, and financial services to low-income and 

underserved populations. Through the CDFI Program, the CDFI Fund makes FA awards to CDFIs 

that have comprehensive business plans for creating community development impact and that 

demonstrate the ability to leverage private sector sources of financing, as well as TA grants to 

CDFIs and entities proposing to become CDFIs. 

Description of Performance:

The CDFI Fund revised its performance measures for the CDFI financial assistance program to 

better measure the impact of CDFI awardees in distressed communities and on underserved 

populations. The CDFI Fund worked with Treasury’s Office of Performance Budgeting (OPB) 

and Office of Strategic Planning and Performance Improvement (OSPPI) to develop two new 

measures: (1) percentage of loans and investments originated in eligible distressed communities or 

made to underserved populations as measured against the total amount of loans originated by 

awardees, and; (2) the percentage of loans and investments originated in eligible distressed 

communities or to underserved populations as measured by the total number of loans originated by 

awardees.
CDFI - 18

These two measures demonstrate the impact of CDFI awardees in serving eligible distressed 

communities and underserved populations by lending reported during the program year. 

Certification procedures require that all certified CDFIs must originate 60 percent or more of their 

loans and investments in eligible distressed census tracts or to underserved populations. The target 

is a threshold that must be met or exceeded recognizing the need for CDFIs to balance their 

mission to service distressed communities and underserved populations against their safety and 

soundness considerations. In FY 2015 the CDFI Program surpassed the 60 percent threshold for 

both the percentage in the amount and number of CDFI loans made to eligible distressed 

communities and underserved populations. There are annual fluctuations in the percentage loans 

deployed to distressed communities and underserved populations due to annual changes in the 

cohort of CDFI awardees and changes in their loan originations necessary to maintain their safety 

and soundness considerations while meeting their commitments and mission as a certified CDFI.

3.1.2 – CDFI Program Budget and Performance Plan

Dollars in Thousands

CDFI Program Budget Activity

Resource Level FY 2010 

Actuals

FY 2011 

Actuals

FY 2012 

Actuals

FY 2013 

Actuals

FY 2014 

Actuals

FY 2015 

Actuals

FY 2016 

Enacted

FY 2017 

Request

Appropriated Resources $107,600 $162,830 $146,035 $138,397 $146,364 $152,400 $153,423 $153,423

Budget Activity Total $107,600 $162,830 $146,035 $138,397 $146,364 $152,400 $153,423 $153,423

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

CDFI - Percentage of 

Loans & Investments 

Originated to Eligible 

Distressed communities 

or Underserved 

Populations by Dollar 

Amount (percentage)

74.80% 66.30% 84.90% 77.10% 70.80% 80.10% 60.00% 60.00% 60.00%

CDFI - Percentage of 

Loans & Investments 

Originated to Eligible 

Distressed communities 

or Underserved 

Populations by Number 

of Loans (percentage)

65.10% 60.60% 70.30% 79.60% 60.70% 80.20% 60.00% 60.00% 60.00%

Key: DISC - Discontinued

3C – New Markets Tax Credit Program

($0 from direct program appropriations):

Through the NMTC Program, the CDFI Fund facilitates new investment in low-income 

communities by attracting private sector capital to these communities through tax credits. These 

objectives align with the CDFI Fund’s Strategic Goal No. 2 – Increased public and private 

investment in distressed communities eligible to be served by the CDFI Fund’s programs. 

Individual and corporate investors may receive a credit against their federal income taxes in 

exchange for making equity investments in Community Development Entities (CDEs) that, in turn, 

use such proceeds to finance businesses and real estate projects in low-income communities. The 

investor’s tax credit equals 39 percent of the amount invested and is taken over seven years. On 

December 18, 2015, Congress extended the authorization of the NMTC program for $3.5 billion 

per year through 2019.
CDFI - 19

Description of Performance:

The 2014 NMTC investment authority was allocated in FY 2015 due to delayed passage of the 

authorizing legislation. In the 2014 round, the NMTC Program awarded $3.5 billion in NMTC 

investment authority to 76 CDEs, out of a pool of applicants requesting $19.9 billion. 

The target for qualified low-income community investments (QLICIs) in FY 2015 was set at $5

billion to reflect the actual annual tax credit authority requested. The target was not met because 

the prior year’s tax credit authority was limited to $3.5 billion, although actual investments 

reported were $3.02 billion. The 2011-2013 trends reflect the effect of higher tax credit authority 

at $5 billion and the subsequent decrease in 2014 for QLICIs reflects the lower levels of tax credit 

authority rather than program’s effectiveness. The CDFI Fund will consider replacement measures 

in FY 2016.

A complementary measure of the NMTC program performance is the percentage of loans and

investments in severely distressed communities. 75.2 percent of loans and investments were made 

in severely distressed communities in FY 2015, exceeding the target of 72 percent. This 

performance indicates that NMTC investors continue to meet their commitments in severely 

distressed communities. The targets for FY 2016 and FY 2017 are set at 72 percent.

3.1.3 – New Markets Tax Credit Program

Dollars in Thousands

New Markets Tax Credit Budget Activity

Resource Level FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Enacted

FY 2017 

Request

Appropriated Resources $4,203 $0 $0 $0 $0 $0 $0 $0

Budget Activity Total $4,203 $0 $0 $0 $0 $0 $0 $0

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

Community Development Entities' 

Annual Qualified Low-Income 

Community Investments ($ billions)

3.1 4.7 5.5 4.8 4.0 3.0 5.0 3.5 3.5

NMTC-Percentage of Loans and 

Investments that went into Severely 

Distressed Communities (percentage)

73.4% 72.4% 70.4% 78.5% 73.8% 75.2% 72.0% 72.0% 72.0%

Key: DISC - Discontinued

3D – Bank Enterprise Award Program

($19,000,000 from direct appropriations):

Through the BEA Program, the CDFI Fund encourages insured depository institutions to increase 

investments and services in distressed communities and to provide financial assistance and support 

to CDFIs. These objectives align with the CDFI Fund’s Strategic Goal No. 2 – Increased public 

and private investment in distressed communities eligible to be served by the CDFI Fund’s 

programs. 

Description of Performance: This measures the Bank Enterprise Award (BEA) applicants' increase 

in qualified community development activities over the prior year. The BEA target of $723.5 
CDFI - 20

million was not met in FY 2015 but the results are consistent with trends over time. In FY 2014, 

the measure hit an all-time high of $723.5 million but fell to $459.9 million in FY 2015. The

decline most likely reflects a delayed response by applicants to reductions in program funding and 

uncertainty about the future of the program. The targets for FY 2016 and FY 2017 have been set at 

the FY 2015 performance level pending an ongoing program evaluation.

The CDFI Fund initiated an evaluation of the BEA Program in FY 2015. The evaluation will 

examine the program’s performance and potentially lead to the adoption of alternative program 

performance measures. The current measure can fluctuate widely from year to year, as shown in 

table 3.1.4, due to external factors such as the level of funding set by Congress. The evaluation is 

scheduled to be complete in FY 2016.

3.1.4 – Bank Enterprise Award Program

Dollars in Thousands

Bank Enterprise Award Program Budget Activity

Resource Level FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Enacted

FY 2017 

Request

Appropriated Resources $25,000 $21,956 $18,000 $17,058 $18,000 $18,000 $19,000 $19,000

Budget Activity Total $25,000 $21,956 $18,000 $17,058 $18,000 $18,000 $19,000 $19,000

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

BEA - Increase in Community 

Development Activities Over Prior 

Year For All BEA Program 

Applicants ($ million) 

290.0 268.3 432.4 493.5 723.5 459.9 723.5 460.0 460.0

Key: DISC - Discontinued

3E – Native American CDFI Assistance Program

($15,500,000 from direct appropriations):

Through the NACA Program, the CDFI Fund assists entities in overcoming barriers that prevent 

access to credit, capital, and financial services in American Indian, Alaska Native, and Native 

Hawaiian communities. The CDFI Fund makes monetary awards to increase the number and 

capacity of existing or new Native CDFIs (i.e., CDFIs that serve Native communities). In 

addition, the NACA Program provides training to help strengthen and develop Native CDFIs. 

Native CDFIs lend where others have not, and are serving the poorest in Native communities. In 

order for Native CDFIs to make a larger economic impact within their communities, they require 

further technical assistance and capacity building. With increased capacity building, Native CDFIs 

could, for example, expand their lending from an initial offering of micro-loans to making larger 

small business loans to better promote economic activity. These objectives align with the 

Department of the Treasury’s Strategic Goal 1: Promote domestic economic growth and stability 

while continuing reforms of the financial system. 

Description of Performance: These output measures reflect the number and amount of loans or 

investments originated by Native American CDFI awardees in a given year. In FY 2015, the target 

was missed for originations but exceeded for number of loans. These measures are difficult to 

forecast due to variability in NACA awardee originations. The CDFI Fund is exploring potential 

changes to these measures to mirror those of the CDFI Program (see above table 3.1.2), which 
CDFI - 21

track the impact of a program on target populations as opposed to aggregate output. The targets 

for FY 2016 and FY 2017 have been set at the FY 2015 performance level pending a review of 

potential changes.

3.1.5 – Native American CDFI Assistance Program

Dollars in Thousands

Native American CDFI Assistance Program Budget Activity

Resource Level FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Enacted

FY 2017 

Request

Appropriated Resources $12,000 $11,352 $12,000 $11,372 $15,000 $15,000 $15,500 $15,500

Budget Activity Total $12,000 $11,352 $12,000 $11,372 $15,000 $15,000 $15,500 $15,500

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

NACA - Amount of 

Loans/Investments Originated 

(Annual) (Dollars in Millions)

N/A 14.7 21.2 23.2 100.5 68.0 164.0 68.0 68.0

NACA - Number of 

Loans/Investments Originated 

(Annual)

N/A 1,004 1,170 1,508 2,230 2,424 1,860 2,424 2,424

Key: DISC - Discontinued

3F – Healthy Food Financing Initiative

($22,000,000 from direct appropriations):

The Healthy Food Financing Initiative (HFFI) aims to eliminate “food deserts” – low-income 

urban and rural areas in the United States with limited access to affordable and nutritious food – by 

financing interventions that expand the supply of and demand for nutritious foods, including 

increasing the distribution of agricultural products, developing and equipping grocery stores, and 

strengthening producer-to-consumer relationships.

This budget activity supports the CDFI Fund’s Strategic Goal No. 1: To expand capacity of 

financial institutions to provide credit, capital, and financial services to low-income and 

underserved populations. Through the HFFI, the CDFI Fund awards CDFI Program funds to 

certified CDFIs to help address the need for healthy food in underserved and low-income 

communities. These organizations use federal grants, below market-rate loans, loan guarantees, 

and tax credits to attract private sector financing for projects that increase access to healthy food 

options.

Description of Performance:

The primary HFFI performance measure is the number of healthy food options created and 

maintained in low-income areas that have been identified through detailed census tract analysis as 

having limited access to healthy food options. In FY 2015, the number of HFFI Retail outlets 

created was 35, which is well short of the target of 47 outlets. There is considerable variation in 

both size and type of HFFI retail outlet investments, making accurate targeting difficult. 

Additional research is being conducted to develop more robust target estimates, although this may 

require additional data collection from awardees. The targets for FY 2016 and FY 2017 have been 

set at 35 outlets created or preserved. 
CDFI - 22

3.1.6 – Healthy Food Financing Initiative

Dollars in Thousands

Healthy Food Financing Initiative Budget Activity

Resource 

Level FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Enacted

FY 2017 

Request

Appropriated 

Resources $0 $0 $22,000 $20,849 $35,000 $22,000 $22,000 $22,000

Budget 

Activity Total $0 $0 $22,000 $20,849 $35,000 $22,000 $22,000 $22,000

Measure FY 2010 

Actual

FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2015 

Target

FY 2016 

Target

FY 2017 

Target

HFFI - Retail Outlets 

Created/Preserved N/A N/A B 31.0 33.0 35.0 47.0 35.0 35.0

Key: DISC - Discontinued

3G - Capital Magnet Fund Program

($0 from direct appropriations):

The Capital Magnet Fund (CMF), administered by the CDFI Fund, was authorized by the 

Housing and Economic Recovery Act of 2008 (HERA), which called for recurrent funding of the 

CMF through assessments on securities of the Government-Sponsored Enterprises (GSEs) Fannie 

Mae and Freddie Mac. GSE funding for CMF was temporarily suspended in November of 2008 

by the Federal Housing Finance Agency (FHFA) under its HERA authority. In FY 2010, 

Congress appropriated $80 million for an initial CMF funding round; however, no appropriations 

were made in subsequent years. In December 2014, the FHFA instructed the GSEs to begin 

setting aside and allocating funds to the CMF pursuant to HERA. This budget activity aligns with 

the Department of the Treasury’s Strategic Goal 1: Promote domestic economic growth and 

stability while continuing reforms of the financial system. 

From the 2010 funding round, the CDFI Fund announced $80 million in competitively awarded

grants to 23 CDFIs and qualified non-profit housing organizations serving 38 states. The CMF

awards have been used to increase capital investment for the development, preservation, 

rehabilitation, and purchase of affordable housing for low-, very low-, and extremely low-income

families, and for related economic development activities, including community services facilities. 

No CMF funding has been appropriated since FY 2010.

Awardees received their Assistance Agreements in July 2011 and disbursements of grant funding

later that year. As required by the Assistance Agreement, funds were committed to projects 

within two years of the agreement (July 2013) and disbursed within three years of the agreement 

(July 2014). All projects must be completed within five years of agreement (July 2016). 

Awardees committed to leveraging the CMF award by at least 10 times with other sources of

capital, as well as committed to projects that meet percentages of targeted incomes and 

geographies.
CDFI - 23

The CDFI Fund reopened the CMF program in January 2016 following FHFA’s decision to lift

its suspension of the GSEs’ allocations under the Housing and Economic Recovery Act of 2008. 

The CDFI Fund estimates $74 million will be awarded in the FY 2016 round. 

Description of Performance:

The primary performance measures of the CMF were the number of affordable housing units for 

which CMF funding was a source of financing and the degree to which private funding sources 

were leveraged by CMF financing. Data are included in performance table 3.1.1 above.

Awardee reports available through September 30, 2015 indicate the following results for CMFfinanced affordable housing and community development activities, based on investments through 

the end of the awardees’ prior year activities:

Total number of affordable homes under development or completed with CMF financing include: 

9,887 (net addition of 1,129);

• Affordable rental homes financed: 8,813 (net addition of 900);

• Affordable homeowner-occupied homes financed: 1,074 (net addition of 229); includes 

assistance to 328 income-eligible first-time homebuyers;

• Leverage: 1:20 (This ratio does not include leverage from the reinvestment of funds. The 

target set by Congress was 10 times leveraging.)

3H - CDFI Bond Guarantee Program

The Small Business Jobs Act of 2010 (Public Law 111-240) created the CDFI Bond Guarantee 

Program. Bonds issued under the program support CDFI lending activity in underserved 

communities by providing a source of long-term capital. Qualified Issuers (CDFIs or their 

designees) issue bonds that are guaranteed by the Secretary of the Treasury and use the bond 

proceeds to make loans to Eligible CDFIs for eligible community and economic development 

purposes. Bond maturity cannot exceed 30 years. Under the FY 2013, FY 2014, and FY 2015 

guarantee authorities, Treasury provided seven bond guarantees in the total amount of $852 

million to Qualified Issuers that provided bond loans to sixteen Eligible CDFIs. The CDFI Bond 

Guarantee Program provided longer term capital to the Eligible CDFIs in comparison to their 

traditional sources of debt capital. The weighted average bond loan term-to-maturity under the 

program is 18.78 years versus the average loan maturity of ten years or less for the loans provided 

by the majority of the lenders to the CDFI industry. The CDFI Bond Guarantee Program provides 

the Eligible CDFIs five years from the bond issuance date to disburse the bond loans. Since the 

inception of the program, the Eligible CDFIs disbursed $165 million or 19% of the bond loans to 

three of the twelve asset classes: commercial real estate, charter schools, and rental housing. The 

proposed disbursement plan for the Eligible CDFIs includes the remaining nine asset classes: 

small business, healthcare facilities, rural infrastructure, senior living and long-term care, daycare 

centers, owner-occupied homes, not-for-profit organizations, loans to CDFIs, and loans to 

financing entities.

The following objectives have been identified for the program for FY 2017:

• Approval of up to $1 billion in guarantees; and

• A review of the annual compliance assessment of the Master Servicer/Trustee, Qualified 

Issuers, and Eligible CDFIs.
CDFI - 24

3.1.7 – Bond Guarantee Program Resource Detail Table

Dollars in Thousands

Bond Guarantee Program

Resource Level FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Estimated

FY 2017 

Request

Obligations $325,000 $200,000 $327,000 $750,000 $1,000,000

 Loan Limitation Obligation Authority - $750,000 $750,000 $750,000 $1,000,000

3.1.8 – Financing Accounts – Non-Budgetary Summary

Dollars in Thousands

Bond Guarantee Program

Resource Level FY 2011 

Actual

FY 2012 

Actual

FY 2013 

Actual

FY 2014 

Actual

FY 2015 

Actual

FY 2016 

Estimated

FY 2017 

Request

Obligations $325,000 $200,000 $327,000 $750,000 $1,000,000

Collections - $356 $2,966 $13,400 N/A

Includes the principal and interest repayments and a 10 basis point fee for administrative expenses pursuant to Section 1134 of 

the Small Business Jobs Act of 2010. These amounts assume a zero subsidy rate with bond loan disbursements of $38 million, 

$119 million, and $235 million in FY 2014, FY 2015, and FY 2016, respectively.
CDFI - 25

Section 4 – Supplemental Information

4A – Summary of Capital Investments

As part of its FY 2017 capital investment strategy, the CDFI Fund plans to spend approximately 

$6.58 million on Information Technology (IT). The CDFI Fund has no major IT investments, nor 

any capital investments other than IT.

Non-Major IT Investments

For FY 2017, the CDFI Fund has identified two non-major IT investments; AMIS, described 

below, and the Community Investment Impact System (CIIS), which will be retired in FY 2017 as 

its IT system capabilities will be implemented within AMIS.

The CDFI Fund’s capital investment strategy is to become a consumer of commodity IT services 

(e.g., IT infrastructure services) and to focus its limited resources on IT solutions that directly 

support the mission of the CDFI Fund. One important mission-focused IT modernization activity 

is the implementation of AMIS — an enterprise, commercial, cloud-based solution that will 

replace the CDFI Fund’s legacy business systems. The first AMIS deployment went live in 

September 2015 with full deployment planned for September 2016. AMIS capabilities will 

continue to be expanded by adding the CDFI Program Risk Assessment Framework, and reporting 

capabilities currently provided by CIIS.

IT Infrastructure Investments

The CDFI Fund’s IT infrastructure is managed via an Interagency Agreement with the Alcohol and 

Tobacco Tax and Trade Bureau (TTB). Treasury has seen numerous benefits from the CDFI 

Fund/TTB arrangement. It increases utilization of Treasury data centers, and enables the CDFI 

Fund to leverage existing Disaster Recovery and Continuity of Operations capabilities. With TTB, 

the CDFI Fund avoids software upgrade costs by using TTB’s enterprise software licenses, stops 

duplicative services (such as Web monitoring and filtering), and eliminates contracts used to 

maintain the CDFI Fund’s IT infrastructure.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/pages/summary-of-capital-investments.aspx.

This website also contains a digital copy of the plan.

Financial Crimes Enforcement 

Network

FY 2017

President’s Budget

February 9, 2016
FinCEN - 2

Table of Contents

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

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

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 6

2.1 – Budget Adjustments Table................................................................................................. 6

2A – Budget Increases and Decreases Description..................................................................... 6

2.2 – Operating Levels Table...................................................................................................... 8

2B – Appropriations Language and Explanation of Changes..................................................... 9

2C – Legislative Proposals.......................................................................................................... 9

Section 3 – Budget and Performance Plan ............................................................................... 10

3A – BSA Administration and Analysis................................................................................... 10

3.1.1 – BSA Administration and Analysis Budget and Performance Plan............................... 13

Section 4 – Supplemental Information...................................................................................... 14

4A – Summary of Capital Investments..................................................................................... 14
FinCEN - 3

Section 1 – Purpose

1A – Mission Statement

The Financial Crimes Enforcement Network’s (FinCEN) mission is to safeguard the financial 

system from illicit use, and combat money laundering and promote national security through the 

collection, analysis, and dissemination of financial intelligence and strategic use of financial 

authorities.

1.1 – Appropriations Detail Table

Dollars in Thousands

Financial Crimes Enforcement Network FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

 FT AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

BSA Administration and Analysis 345 112,000 343 112,979 343 115,003 0 2,024 0.00% 1.79%

Subtotal New Appropriated Resources 345 $112,000 343 $112,979 343 $115,003 0 $2,024 0.00% 1.79%

Other Resources:

Reimbursables 1 3,000 1 1,500 1 1,500 0 0 0.00% 0.00%

Recovery from Prior Years 0 500 0 500 0 500 0 0 0.00% 0.00%

Unobligated Balances from Prior Years 0 50,000 0 42,000 0 38,000 0 (4,000) 0.00% -9.52%

Subtotal Other Resources 1 $53,500 1 $44,000 1 $40,000 0 ($4,000) 0.00% -9.09%

Total Budgetary Resources 346 $165,500 344 $156,979 344 $155,003 0 ($1,976) 0.00% -1.26%

1B – Vision, Priorities, and Context

In carrying out its mission, FinCEN has numerous statutory areas of responsibility: developing and

issuing regulations under the Bank Secrecy Act (BSA); enforcing compliance with the BSA in 

partnership with law enforcement and other regulatory partners; serving as the U.S. Financial

Intelligence Unit (FIU) and maintaining a network of information sharing with FIUs in more than

147 partner countries; receiving millions of new financial reports each year; securing and

maintaining a database of over 190 million reports; analyzing and disseminating financial

intelligence to federal, state, and local law enforcement, federal and state regulators, foreign FIUs,

and industry; and bringing together the disparate interests of law enforcement, FIUs, regulatory

partners, and industry.

FinCEN plays an important role in this country’s comprehensive strategy to disrupt, degrade, and

ultimately defeat terrorist groups such as al-Qa’ida and the Islamic State of Iraq and the Levant

(ISIL). FinCEN analyzes information collected through its unique authorities, and produces

intelligence to counter terrorist financing both at a tactical and strategic level. On a tactical level,

FinCEN shares its financial intelligence products with law enforcement, the intelligence

community, and the Egmont Group of FIUs. At a strategic level, FinCEN’s efforts help inform 

policymakers as they develop and refine national and multilateral strategies to combat terrorist

networks, including multilateral efforts under the auspices of the Financial Action Task Force 

(FATF).
FinCEN - 4

FinCEN is a bureau in the U.S. Department of the Treasury. FinCEN directly supports the

Department’s strategic goal to “safeguard the financial system and use financial measures to

counter national security threats.” The Director of FinCEN reports to the Under Secretary for 

Terrorism and Financial Intelligence (TFI). FinCEN supports the following Treasury Strategic

Objectives: 4.1 Identify priority threats to the financial system using intelligence analysis and

outreach to the financial sector; 4.2 Develop, implement, and enforce sanctions and other

targeted financial measures; and 4.4 Protect the integrity of the financial system by

implementing, promoting, and enforcing anti-money laundering and counterterrorism financing

standards. FinCEN’s activities support its two strategic goals: safeguard the financial system

from evolving money laundering and national security threats; and maximize the sharing of

financial intelligence between FinCEN and its domestic and foreign partners in government and

private industry.

FinCEN also supports the Agency Priority Goal (APG) to employ a proactive, intelligencedriven approach to focus enforcement efforts against high priority threats. This goal is aligned to

Treasury Strategic Objective 4.4. FinCEN leverages new technology, data, analytical resources, 

tools, and methodologies to identify high priority threats to the financial system. FinCEN uses

this intelligence to focus its enforcement efforts against high priority threats, and assess civil

monetary penalties, impose injunctions, issue special measures under Section 311 of the USA 

PATRIOT Act, and apply geographic targeting orders, as appropriate. FinCEN also uses this

intelligence to help focus the enforcement actions of partner law enforcement and regulatory 

agencies in the United States and abroad. In FY 2015, 19 enforcement actions were completed 

due to FinCEN’s improved processes and prioritization strategies. Some of these enforcement 

actions include delivering actionable, tactical analysis on priority threats on a proactive basis to 

FinCEN enforcement personnel and partner law enforcement and regulatory agencies in the 

United States and abroad. In FY 2015, 1,478 intelligence products related to national security 

priorities were completed. FinCEN was able to achieve this performance by continuing to use 

technology to facilitate proactive, intelligence-driven analysis and delivering analytic products 

on priority threats.

FinCEN’s priorities include:

• Target examination and enforcement efforts to high risk and priority areas, with increased

focus on money services businesses;

• Expand understanding and analysis of illicit networks, institutions, jurisdictions, and

schemes, with emphasis on national security threats and terrorist groups such as ISIL;

• Ensure the BSA regulatory structure effectively and efficiently targets illicit financing risks;

• Manage the efficient collection, processing, and retrieval of BSA data; and

• Foster strong public-private partnerships with the financial industry.

FY 2015 Progress:

• Initiated Global Rapid Response Program, recovering or restraining $128.9 million in funds 

obtained through cyber-enabled crimes targeting financial institutions and their clients before 

such funds could be dissipated by criminals.

• Initiated daily tactical reporting of terrorism-related financial intelligence to law 

enforcement, foreign partners and the intelligence community.

• Issued 12 civil money penalties in FY 2015 compared to 6 in FY 2014. These penalties were
FinCEN - 5

against financial institutions and/or owners for willful violations of the BSA, supporting 

compliance and outreach messages, in particular, those focused on the casino, virtual 

currency, and money remitter sectors. 

• Issued four Geographic Targeting Orders (GTO) targeting priority money laundering threats 

such as tax fraud by identity theft, and the movement of U.S. dollar cash across the southern 

border and trade-based money laundering for priority drug trafficking organizations.

• Proposed a rule requiring certain investment advisers to establish anti-money laundering 

programs and report suspicious activity pursuant to the BSA. 

• The number of automated rule findings received by FinCEN’s advanced data analytics was 

56,005 in FY 2015; in comparison, the total number of alerts generated throughout all of FY 

2014 was 18,778. FinCEN analyzes these alerts for suspicious activity and disseminates 

relevant findings to law enforcement and financial institutions for further action. 

• Implemented advanced analytics capabilities and improved the use and sharing of 

information on threats to the financial system; in FY 2015, FinCEN produced nearly 

quadruple the intelligence products compared to FY 2014. 

• Issued two actions under Section 311 of the USA PATRIOT Act against foreign financial 

institutions of primary money laundering concern seeking to protect the U.S. financial 

system.

• Coordinated the multilateral efforts of 19 FIUs around the world to support Ukraine’s efforts 

to recover assets misappropriated by its former regime, resulting in the seizure of over $1.2 

billion. 

• Coordinated the multilateral efforts of 27 FIUs around the world to improve global 

information sharing on terrorist financing. 

In terms of the larger operating environment, FinCEN contributes to efforts across all levels of

government to focus resources on various external factors that threaten the financial system.

Some of these factors include cyber threats, transnational organized crime, fraud against U.S. 

government programs, and transnational security threats, such as rogue regimes and terrorist

organizations. These are serious threats to the nation and the financial system that demand

strong public-private sector partnerships to ensure the appropriate laws and regulations are in

place, and to leverage resources in a fiscally responsible manner.
FinCEN - 6

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Financial Crimes Enforcement Network FTE Amount

FY 2016 Enacted 343 $112,979

Changes to Base:

 Maintaining Current Levels (MCLs): - $1,824

Pay-Raise - $528

Pay Annualization - $175

Non-Pay - $1,121

 Efficiency Savings: - ($1,300)

 Efficiency Savings - ($750)

 Commercial Database Contract Savings - ($550)

Subtotal Changes to Base - $524

FY 2017 Base 343 $113,503

Program Changes:

 Program Increases:

 National Security Response Capacity - $1,500

FY 2017 Request 343 $115,003

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$1,824,000 / +0 FTE

Pay-Raise +$528,000 / +0 FTE 

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$175,000 / +0 FTE 

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$1,121,000 / +0 FTE 

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

adjustments, postage, supplies, and equipment.

Efficiency Savings ......................................................................................-$1,300,000 / +0 FTE

Efficiency Savings -$750,000 / +0 FTE 

These efficiencies are a result of reductions in travel, printing, and savings realized through reevaluated or negotiated contracts.

Commercial Database Contract Savings -$550,000 / +0 FTE

These savings are the result of renewed contract pricing for open source commercial databases 

used in FinCEN’s intelligence analysis. These savings resulted from Treasury’s strategic 

sourcing initiative that renegotiated contract pricing on several commercial databases and from 

reassessment of usage categories. 
FinCEN - 7

Program Increases ...................................................................................... $1,500,000 / +0 FTE

National Security Response Capacity +$1,500,000 / +0 FTE

FinCEN will use these funds to sustain increased contractor support for FinCEN’s intelligence 

analysis and reporting for efforts against ISIL. In FY 2015, FinCEN used efficiencies to 

temporarily increase the number of contractor personnel who process alerts on BSA filings and 

develop reports for dissemination to FinCEN customers in law enforcement, the intelligence 

community, and foreign FIUs. These customers indicate the enhanced level of support has aided 

investigations and increased their capacity to address an increasing number of threats from 

groups like ISIL. The benefits of this additional support are reflected in FinCEN’s performance 

measures. As of the third quarter of FY 2015, the number of intelligence products related to 

priority threats increased by 75 percent from FY 2014. Similarly, 56,005 red flag alerts for 

suspicious activity in bank filings were produced and shared with partners, compared to 18,778 

in FY 2014. FinCEN anticipates an even greater workload in FY 2017 as a result of emerging 

threats.

This funding will be used to sustain a successful response to national security emergencies that 

external partners have come to rely on. The demand for FinCEN’s financial intelligence has 

solidified the need for the bureau to continue to support critical national security activities 

whenever they arise. In many cases, FinCEN is the only link between the intelligence 

community and the financial intelligence maintained pursuant to the reporting obligations under 

the BSA. The information available from FinCEN’s new capability to provide red flag alerts on 

BSA filings has become extremely valuable to the intelligence and law enforcement community. 

Therefore, FinCEN’s profile in the national security area was increased in 2015 to help combat 

al-Qa’ida, ISIL, and other terrorist groups. To continue the level of support that law 

enforcement and the intelligence community have come to rely on, and address any emerging 

issues, FinCEN needs additional funding to sustain current levels of contractor support. 

FinCEN harnesses the collection power of the nearly 120,000 financial institutions in the United 

States and when a pressing threat arises, can amass large amounts of relevant data to enable the 

bureau and its partners to take targeted action. FinCEN requires U.S. financial institutions to 

report certain transactions, including cash transactions over set thresholds and activity financial 

institutions deem to be suspicious through the BSA and its implementing regulations. Financial 

institutions file approximately 50,000 reports per day in response to these regulatory 

requirements. To screen these filings, automated business rules are developed to identify BSA 

reports that merit further review. For example, business rules related to ISIL alone generate over 

800 matches each month for further review and exploitation. Although the business rules are 

automated based on current needs, this funding provides contractor staff required to review and 

analyze the individual BSA filing alerts for relevance and nominate actionable reports for Flash 

Report production. The reports are then distributed to key law enforcement partners, the 

intelligence community, and Egmont FIUs. The demand for this type of financial intelligence is 

growing and has solidified a continuing role and need for FinCEN to support critical national 

security activities.
FinCEN - 8

2.2 – Operating Levels Table

Dollars in Thousands

Financial Crimes Enforcement Network FY 2015 FY 2016 FY 2017

Object Classification Actual Enacted Request

11.1 - Full-time permanent 31,993 41,115 41,817

11.3 - Other than full-time permanent 322 408 408

11.5 - Other personnel compensation 516 205 205

11.9 - Personnel Compensation (Total) 32,831 41,728 42,430

12.0 - Personnel benefits 10,122 12,259 12,260

13.0 - Benefits to former personnel 75 0 0

Total Personnel Compensation and Benefits $43,028 $53,987 $54,690

21.0 - Travel and transportation of persons 587 607 615

23.1 - Rental payments to GSA 5,405 4,101 4,461

23.2 - Rental payments to others 34 31 32

23.3 - Communication, utilities, and misc charges 1,194 1,649 1,670

24.0 - Printing and reproduction 42 200 207

25.1 - Advisory and assistance services 752 1,097 1,097

25.2 - Other services 8,493 14,914 16,041

25.3 - Other purchases of goods & serv frm Govt accounts 7,788 9,211 9,496

25.4 - Operation and maintenance of facilities 0 740 740

25.6 - Medical care 192 171 174

25.7 - Operation and maintenance of equip 13,368 18,629 17,979

26.0 - Supplies and materials 338 319 326

31.0 - Equipment 1,930 7,323 7,475

Total Non-Personnel 40,123 58,992 60,313

Subtotal New Appropriated Resources $83,151 $112,979 $115,003

Budget Activities:

BSA Administration and Analysis 120,627 156,979 155,003

Total Budgetary Resources1 $120,6271 $156,979 $155,003

 

FTE 276 344 344 1 FY 2015 Actual includes annual appropriations, available multi-year appropriations, reimbursable resources, offsetting collections, 

and user fees.
FinCEN - 9

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

FINANCIAL CRIMES ENFORCEMENT NETWORK

Federal Funds

SALARIES AND EXPENSES:

For necessary expenses of the Financial Crimes Enforcement 

Network, including hire of passenger motor vehicles; travel 

and training expenses of non-Federal and foreign government 

personnel to attend meetings and training concerned with 

domestic and foreign financial intelligence activities, law 

enforcement, and financial regulation; services authorized by 5 

U.S.C. 3109; not to exceed $10,000 for official reception and 

representation expenses; and for assistance to Federal law 

enforcement agencies, with or without reimbursement, 

[$112,979,000] $115,003,000, of which not to exceed 

$34,335,000 shall remain available until September 30, [2018] 

2019.

2C – Legislative Proposals

FinCEN has no legislative proposals 
FinCEN - 10

Section 3 – Budget and Performance Plan

3A – BSA Administration and Analysis

($115,003,000 from direct appropriations, and $1,500,000 from reimbursable resources): 

The programs funded by this budget activity support Treasury Strategic Goal 4: “Safeguard the 

financial system and use financial measures to counter national security threats.” This activity 

comprises FinCEN’s efforts to develop and issue regulations under the BSA; enforce compliance 

with the BSA in partnership with regulatory partners and as the sole BSA regulator across 

numerous industries; receive BSA reports and maintain a database; analyze and disseminate 

financial intelligence to federal, state, and local law enforcement, federal and state regulators, 

foreign FIUs, and industry; and serve as the U.S. FIU and maintaining a network of information 

sharing with FIUs in partner countries. The goal owner for this budget activity is the Director of 

FinCEN. 

FinCEN tracks the percentage of users finding that financial intelligence collected by FinCEN 

pursuant to its regulations provides valuable information to safeguard the financial system, 

combat money laundering, and counter terrorist financing. This measure supports Treasury 

Strategic Objective 4.4 and FinCEN Strategic Objective 1.1 to adopt strong AML/CFT 

regulatory safeguards. The survey looks at the value of FinCEN data, such as whether the data 

provided unknown information, supplemented or expanded known information, verified 

information, helped identify new leads, opened a new investigation or examination, supported an 

existing investigation or examination, or provided information for an investigative or 

examination report. In FY 2015, FinCEN surpassed its target of 82 percent with 83 percent 

finding value. FinCEN attained this result by placing greater emphasis on both in-person and 

online training that will better assist users in understanding and utilizing the new FinCEN Query 

tool for their unique cases and situations. In FY 2016, the target is 84 percent and 85 percent in 

FY 2017. 

FinCEN tracks the percentage of AML/CFT supervisors who indicate that FinCEN’s 

enforcement actions have resulted in increased compliance by covered financial institutions. 

This measure supports the Treasury Strategic Objectives 4.2 and 4.4 and FinCEN Strategic 

Objective 1.2 to implement and enforce AML/CFT regulatory authorities and employ targeted 

financial measures against priority threats. The measure examines the survey responses of state 

and federal financial regulatory agencies with information sharing agreements. The agreements 

require the financial regulators to share examination results and provide a variety of statistical 

data on their examination results. The survey asks the respondents to rate the impact of 

enforcement actions on the level of compliance observed by examiners. This is a meaningful 

measure of the link between enforcement actions and financial institution compliance with the 

BSA reporting. Lax financial institution compliance with the BSA would negatively impact the 

quality of the financial data and ability to safeguard the financial system from illicit activity. In 

FY 2015, FinCEN surpassed its target of 80 percent with 88 percent finding enforcement actions 

have resulted in increased compliance. FinCEN was able to achieve this by enforcement and 

outreach. In FY 2016, the target is 89 percent and 90 percent in FY 2017. 

In FY 2015, FinCEN began tracking the percentage of customers finding that FinCEN’s 

research, analysis, and advanced analytics contribute to the safeguarding of the financial system, 
FinCEN - 11

combating money laundering, and counter terrorist financing. This measure supports the 

Treasury Strategic Objective 4.1 and the FinCEN Strategic Objective 1.3 to use research, 

analysis, and advanced analytics to identify and explain priority threats to the financial system. 

In FY 2014, FinCEN discontinued the previous measure “percentage of domestic law 

enforcement finding FinCEN’s analytic reports contribute to the detection and deterrence of 

financial crime” as it found the measure and survey did not represent the new analytical 

products. FinCEN reevaluated and revamped the survey based on the new products and 

customers. In FY 2015, FinCEN baselined this performance with 96 percent finding the analysis 

contributed to the safeguarding of the financial system. FinCEN attributes this high level of 

performance to increased emphasis on the production of new products and by developing 

actionable intelligence. There were 1,478 intelligence products related to FinCEN priority 

targets in FY 2015 compared to 370 in FY 2014. The FY 2016 and FY 2017 targets are set at 96 

percent until more trend data is available. 

FinCEN measures the percentage of stakeholders finding FinCEN’s information sharing has 

contributed to their organization’s responsibilities. This supports the Treasury Strategic 

Objective 4.1 and the FinCEN Strategic Objective 2.1 to implement and manage programs to 

effectively network, coordinate, and share financial intelligence between FinCEN and its 

domestic and foreign partners in government and private industry. The measure examines the 

survey responses of customers who have had contact with FinCEN to exchange information, 

including industry, regulators, and law enforcement, both domestic and foreign. This is a fairly 

new composite measure that consists of the following questions: call center guidance response 

was understandable; rate the usefulness of the 314(a) requests FinCEN processed on behalf of 

your agency for investigations of financial crimes or money laundering; how satisfied are you 

with the information sharing you have with FinCEN; and over the past 12 months how satisfied 

are you with FinCEN. This is a meaningful measure as it tracks FinCEN’s efforts to share 

financial intelligence. In FY 2015, FinCEN surpassed its target of 89 percent with 91 percent 

finding the information sharing helpful. FinCEN was able to attain this performance by 

maximizing the sharing of financial intelligence between FinCEN and its domestic and foreign 

partners in government and private industry. The FY 2016 and FY 2017 targets are 92.

FinCEN tracks the percentage of users satisfied with FinCEN information sharing systems. This 

supports the Treasury Strategic Objective 4.1 and the FinCEN Strategic Objective 2.2 to develop 

and support effective technology systems to collect and analyze financial intelligence from 

private industry and share it with domestic and foreign government partners. The measure is 

based on survey responses and represents user satisfaction with the BSA E-Filing System, 

FinCEN Query, and the Egmont Secure Web. Starting with industry, FinCEN collects and 

maintains BSA reports filed by financial institutions and other filers. In turn, FinCEN provides 

authorized users (including Treasury and TFI) access to a query system containing 11 years of 

BSA data. FinCEN also provides foreign FIUs in the Egmont Group with a secure system for 

exchanging financial intelligence to combat money laundering and terrorist financing. This 

measure is meaningful because the technology allows authorized persons to more readily access 

BSA information and better enables them to conduct investigations more efficiently and 

effectively. In FY 2015, FinCEN exceeded its target of 78 percent with 80 percent of the users 

satisfied with information sharing systems. During FY 2015, FinCEN continued to address 

critical system issues and make minimal enhancement requests as part of its ongoing operations 
FinCEN - 12

and maintenance. FinCEN strives to provide systems with fast response times and has 

maintained an average 99.3 percent availability rate for its mission-essential systems. FinCEN 

also continues to receive positive feedback on the usefulness of the data it provides, as well as 

knowledgeable and courteous user support. In FY 2016 and FY 2017, targets are set at 80. 

The FY 2015 Strategic Objective Annual Review (SOAR) found that TFI and FinCEN made

“noteworthy progress” toward Treasury Strategic Objectives 4.1 and 4.2. Progress was made by

improving the utilization and sharing of information on threats to the financial system. The 

number of automated rule findings by FinCEN’s advanced data analytics was 56,005 in FY

2015; in comparison, the total of such rule findings generated in FY 2014 was 18,778. FinCEN 

and Treasury’s Office of Intelligence and Analysis (OIA) collaborated to distribute Flash

Reporting to the Intelligence Community via OIA’s Intelligence Information Reporting (IIR)

program. Additionally, FinCEN worked with international FIUs to track assets leaving Ukraine,

a groundbreaking cooperative effort. Consistent with the SOAR findings related to Treasury

Strategic Objective 4.4, FinCEN will continue developing the regulation necessary to begin

collecting cross-border electronic transmittals of funds (CBETF) data.
FinCEN - 13

3.1.1 – BSA Administration and Analysis Budget and Performance Plan

Dollars in Thousands

BSA Administration and Analysis Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Enacted Enacted Enacted Enacted Enacted Enacted Enacted Request

 Appropriated Resources $110,010 $110,788 $110,788 $104,993 $112,000 $112,000 $112,979 $115,003

 Reimbursable Resources $20,000 $20,000 $20,000 $3,000 $2,000 $3,000 $1,500 $1,500

Budget Activity Total $131,010 $130,788 $130,788 $107,993 $114,000 $115,000 $114,479 $116,503

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Users Finding 

That the Financial Intelligence 

Collected by FinCEN Pursuant

to its Regulations Provides 

Valuable Information to 

Safeguard the Financial 

System, Combat Money 

Laundering, and Counter 

Terrorist Financing

87.0 89.0 90.0 80.0 81.0 83.0 82.0 84.0 85.0

Percentage of AML/CFT 

Supervisors Who Indicate That 

FinCEN’s Enforcement Actions 

Have Resulted in Increased 

Compliance by Covered 

Financial Institutions

N/A N/A N/A N/A 81.0 88.0 80.0 89.0 90.0

Percentage of customers 

finding that FinCEN’s research, 

analysis, and advanced 

analytics contribute to the 

safeguarding of the financial 

system, combating money 

laundering, and counter 

terrorist financing

N/A N/A N/A N/A N/A 96.0 N/A 96.0 96.0

Percentage of domestic law 

enforcement finding FinCEN’s 

analytic reports contribute to 

the detection and deterrence of 

financial crime

N/A 80.0 86.0 83.0 81.0 Disc Disc Disc Disc

Percentage of Stakeholders 

Finding FinCEN’s Information 

Sharing Has Contributed to 

Their Organization’s 

Responsibilities

N/A N/A N/A N/A 89.0 91.0 89.0 92.0 92.0

Percentage of Users Satisfied 

with FinCEN Information 

Sharing Systems

N/A N/A N/A N/A 78.0 80.0 78.0 80.0 80.0

Key: DISC - Discontinued
FinCEN - 14

Section 4 – Supplemental Information

4A – Summary of Capital Investments

As the administrator of the BSA, FinCEN receives valuable information reported and collected 

under BSA requirements, which totaled approximately 18.5 million filings in FY 2015. To 

successfully fulfill its mission, FinCEN relies on secure, advanced IT to manage the collection, 

processing, storage, and dissemination of BSA information that contributes to the soundness and 

confidence in America’s financial system.

FinCEN’s IT strategy takes into account the growing need for financial institutions to meet 

obligations as efficiently as possible, while ensuring that FinCEN and law enforcement agencies 

receive accurate, timely, and reliable BSA information to track money trails, identify money 

laundering, and unravel terrorist financing networks. FinCEN’s IT strategy focuses on the 

critical need to improve the quality and accessibility of its data and increase responsiveness to 

stakeholders by maintaining and building upon flexible and innovative technical solutions. The 

BSA IT Modernization investment entire life cycle cost, which includes the year the investment 

started (2010) through BY+4 (2021), is $332 million (including FTE) and the FY 2017 cost is

$27.58 million (including FTE).

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/pages/summary-of-capital-investments.aspx.

This website also contains a digital copy of this document.

Alcohol and Tobacco Tax and 

Trade Bureau

FY 2017

President’s Budget

February 9, 2016
TTB - 2

Table of Contents

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

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

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

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2.1 – Budget Adjustments Table................................................................................................. 7

2A – Budget Increases and Decreases Description..................................................................... 7

2.2 – Operating Levels Table...................................................................................................... 9

2B – Appropriations Language and Explanation of Changes................................................... 10

2C – Legislative Proposals........................................................................................................ 10

Section 3 – Budget and Performance Plan ............................................................................... 11

3A – Collect the Revenue ......................................................................................................... 11

3.1.1 – Collect the Revenue Budget and Performance Plan ..................................................... 14

3B – Protect the Public ............................................................................................................. 15

3.1.2 – Protect the Public Budget and Performance Plan ......................................................... 19

Section 4 – Supplemental Information...................................................................................... 20

4A – Summary of Capital Investments..................................................................................... 20
TTB - 3

Section 1 – Purpose

1A – Mission Statement

To collect the taxes on alcohol, tobacco, firearms, and ammunition; protect the consumer by 

ensuring the integrity of alcohol products; and prevent unfair and unlawful market activity for 

alcohol and tobacco products.

1.1 – Appropriations Detail Table

Dollars in Thousands

Alcohol and Tobacco Tax and Trade 

Bureau FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Appropriated Resources Enacted Enacted Request $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Collect the Revenue 242 52,721 242 52,785 242 53,560 0 775 0.00% 1.47%

Protect the Public 231 47,279 252 53,654 252 52,879 0 (775) 0.00% -1.44%

Subtotal New Appropriated Resources 473 $100,000 494 $106,439 494 $106,439 0 $0 0.00% 0.00%

Other Resources:

Reimbursables 10 7,022 10 6,992 10 6,912 0 (80) 0.00% -1.14%

Transfer In/Out 0 0 0 0 35 5,000 35 5,000 NA NA

Subtotal Other Resources 10 $7,022 10 $6,992 45 $11,912 35 $4,920 350.00% 70.37%

Total Budgetary Resources 483 $107,022 504 $113,431 539 $118,351 35 $4,920 6.94% 4.34%

Note: The FY 2017 Request proposes a transfer of funds in the amount of $5 million from the Internal Revenue Service’s program integrity cap 

adjustment to TTB for tax enforcement and compliance.

1B – Vision, Priorities and Context

TTB is responsible for the administration and enforcement of the sections of the Internal 

Revenue Code of 1986 (IRC) associated with the collection of excise taxes on alcohol, tobacco, 

firearms, and ammunition, and the Federal Alcohol Administration (FAA) Act, which provides 

for the regulation of the alcohol beverage industry for the protection of U.S. consumers. The 

TTB mission is carried out according to two principal strategic goals that, briefly stated, are: 

collect the revenue and protect the public. TTB’s strategic goal to collect the revenue is to ensure 

that industry remits the proper Federal tax on alcohol, tobacco, firearms, and ammunition 

products. This TTB goal supports the Treasury’s strategic goal to fairly and effectively reform 

and modernize Federal financial management, accounting, and tax systems and the strategic 

objective to pursue tax reform and improve the execution of the tax code. TTB’s strategic goal to 

protect the public is to ensure that alcohol and tobacco industry operators meet Federal permit 

qualification requirements, and alcohol beverage products comply with Federal production, 

labeling, and marketing requirements. This TTB goal supports the Treasury’s strategic goal to 

promote domestic economic growth and stability, and the strategic objective to facilitate 

commerce by providing trusted and secure U.S. currency, products, and services for use by the 

public. Various strategies and activities under these two TTB strategic goals contribute to the 

Treasury’s strategic goal of creating a 21st-century approach to Government.

FY 2017 Priorities and Challenges

In Fiscal Year (FY) 2017, TTB will invest its resources in program activities that provide the 

greatest assurance that these industries are operating in compliance with tax and regulatory 

requirements, in the interest of collecting the excise taxes due and ensuring fair and lawful 

market activity.
TTB - 4

Collect the Revenue

Increase Tax Collection Efficiencies and Voluntary Compliance

TTB is the third largest tax collection agency in the U.S. Government, after the IRS and U.S. 

Customs and Border Protection (CBP). In FY 2015, TTB collected $22.3 billion in excise taxes 

and other revenues from nearly 11,7001 taxpayers in the alcohol, tobacco, firearms, and 

ammunition industries. The return on investment for TTB’s tax collection activities was 437:1

for FY 2015. As the most efficient means of tax administration, facilitating voluntary compliance 

remains a priority and, to this end, TTB will enhance its guidance related to Federal alcohol, 

tobacco, firearms, and ammunition laws and regulations, and explore diversifying its delivery 

methods to better reach the business community it regulates. Further, efforts to streamline 

regulations to reduce the compliance burden, enhance electronic filing systems, and improve

internal processes should also contribute to continued positive returns on the investment in TTB.

The bureau has developed and employed increasingly sophisticated risk modeling to complete 

targeted audits and revenue investigations into non-compliance. In FY 2015, these enforcement 

efforts resulted in a total of more than $57 million in identified additional tax liabilities.

TTB collections are influenced by multiple factors:

• Alcohol Tax Collections: In FY 2015, TTB collected approximately $8 billion in revenue 

from U.S. wineries, breweries, and distilleries, a nearly 1 percent increase over the prior year.

Although economic forecasts predict continued modest growth in the U.S. alcohol industry as 

a whole, excise tax collections will likely remain relatively constant due to a number of 

variables, including increasing volumes in imports, for which CBP collects the tax; 

increasing volumes of exports, on which no tax is due; and declining sales by volume from 

the country’s largest brewers, who account for over 90 percent of the beer sold in the U.S.

The rapid expansion of small wineries, breweries, and distilleries will not entirely offset the 

declines in sales and tax payments by the large companies as small beer and wine producers 

are eligible for reduced tax rates or tax credits based on their production volume. This trend 

is expected to continue through FY 2017. 

• Tobacco Tax Collections: In FY 2015, TTB collected $13.6 billion in tobacco tax revenue, 

with collections remaining relatively constant compared to FY 2014. As forecasted, tobacco 

revenues have generally declined since FY 2010, the first full year of collections following 

the 2009 Federal tobacco tax rate increase. Higher prices on tobacco products have 

historically resulted in decreased consumption and increased illicit trade, which indicates that 

tobacco revenue will continue to decline. Further, recent analysis of tobacco collections has 

shown significant market shifts for tobacco products since 2009. The 2009 tax rate change 

introduced large Federal excise tax disparities among tobacco products, which created 

opportunities for tax avoidance and led manufacturers and price sensitive consumers to shift 

toward lower-taxed products. The growing popularity of electronic nicotine products, such as 

e-cigarettes, which are not subject to Federal excise tax unless they contain tobacco, could 

contribute to declining tobacco revenue in the future. TTB will continue to exercise its 

jurisdiction to support tax compliance and deter illicit trade.

• Firearms and Ammunition Excise Tax (FAET) Collections: FAET taxes are remitted to the 

Fish and Wildlife Restoration Fund for wildlife restoration, research, and hunter education 

 1 Of the approximately 20,000 TTB permittees whose business operations are subject to Federal excise taxes, 

approximately 11,700 (58 percent) have activity that requires them to file a tax return and pay excise tax in FY 2015.
TTB - 5

programs. In the past decade, collections have increased from $250 million in FY 2006 to 

$638 million in FY 2015, an increase of $388 million, or a 155 percent growth in tax 

revenue. Historically, increases in reported FAET revenue can be attributed to growth in

sales due to external factors as well as TTB’s enforcement presence, which increases 

collections and promotes voluntary compliance.

Address and Deter Alcohol and Tobacco Diversion

Enforcing the tax code also requires that TTB address and deter illicit activity present in the 

marketplace. Failure to address illicit trade not only deprives governments of revenue, but also 

gives non-compliant actors an unfair competitive advantage over their lawful counterparts. Since 

the inception of TTB’s criminal enforcement program in FY 2011, TTB’s agents have opened a 

total of 91 cases, with identified liabilities of over $551 million in evaded alcohol, tobacco, 

firearms, and ammunition excise taxes. TTB has also realized an almost 100 percent acceptance 

rate for cases presented to U.S. Attorneys for investigation, demonstrating both the strength and 

magnitude of these cases. Enforcement experience also indicates that criminal activity is not 

limited to the tobacco trade, with non-taxpaid product removals, illegal imports, and fraudulent 

labeling just a few of the schemes used to evade taxes, defraud American consumers, and 

undermine the legitimate alcohol trade.

In FY 2017, TTB will continue to identify and address high-risk activity and players in the 

tobacco and alcohol trades and, with continued program funding, to effectively deploy criminal

agents to deter and interdict illicit trade. TTB’s enforcement program utilizes the services of 

criminal enforcement agents on a reimbursable basis from the Internal Revenue Service Criminal 

Investigation division. Alcohol and tobacco diversion remain long-term tax enforcement 

challenges given the high profits to be gained from illegal activity, the relative ease of diversion, 

and the substantial revenue loss that it represents. The FY 2017 request includes $2 million in the 

base budget for criminal enforcement and proposes a transfer of $5 million from the IRS’s 

requested program integrity cap adjustment for increased TTB enforcement and compliance 

programs to narrow the alcohol and tobacco tax gap and reduce the deficit through increased 

revenue collections.

Protect the Public

Improve Permitting Process

Industry growth in the number of alcohol beverage producers, driven by a boom in small 

breweries, distilleries, and wineries, has contributed to delays in permit processing times. TTB is 

meeting this challenge through its priority project to improve its business qualification process, 

including through enhancements to its electronic filing and processing environment. TTB 

achieved a significant milestone in FY 2015 by deploying a new release of Permits Online in 

February 2015, which added new system help features to improve submission compliance and

addressed a bottleneck in the permit processing workflow. Early data indicated reduced 

processing times for new permits following the release, decreasing from a high of 95 days in 

January to 68 days in July, though these gains were not enough for TTB to achieve its annual 

performance target of 75 days in FY 2015. At year end, only 47 percent of permit applications 

met the 75-day service standard.

In FY 2016, TTB plans to improve service delivery through additional workflow and system 

enhancements to streamline both the filing and processing of permit applications. TTB continues 
TTB - 6

to make steady progress in the development of a new version of Permits Online. The new design 

will enhance usability for industry members and improve the compliance rate of submissions, 

reducing resubmitted applications and the overall workload volume that are contributing to 

delays. The redesigned system will also facilitate the electronic filing of permit amendments, a 

high volume activity that remains largely paper-based, which should further decrease processing 

times. With these efforts, TTB will be positioned to achieve sustained performance 

improvements by the end of FY 2017.

Modernize the Alcohol Beverage Labeling Program

The increase in the number of new alcohol beverage producers also influences the timely 

processing of label and formula applications. New producers often require extensive assistance 

during the label approval process and frequently submit applications that require correction, both 

of which add to processing times. The performance challenges caused by explosive industry 

growth and product innovation during a period of constrained TTB resources has spurred the 

bureau’s priority project to modernize the Federal alcohol beverage labeling program. Through 

updates to Federal labeling regulations, the removal of requirements for label and formula 

approvals for certain low-risk products, and the implementation of system enhancements, TTB 

expects to eliminate current barriers to compliant trade caused by processing delays while 

maintaining adequate regulatory controls to ensure revenue collection and consumer protection.

Efforts to remove label approval requirements to date had been successful in temporarily 

reducing the volume of submissions; however, these reductions were offset in FY 2015 by 

increased filings that reached nearly 154,000 applications, an 8 percent increase over the prior 

year and well above the historic high reached in FY 2012. Similar efforts in the formula area 

were implemented in FY 2014, with a published ruling resulting in a more than 30 percent 

reduction in malt beverage formula submissions. However, as increases in formula submissions 

from the spirits and wine industries have since offset these reductions, TTB plans to proceed 

with guidance and rulemaking beginning in FY 2016 and continuing through FY 2017 to further 

reduce formula submissions across the alcohol beverage commodities. Additionally, as noncompliant applications are essentially doubling processing workloads, TTB will issue 

rulemaking to consolidate and clarify Federal labeling regulations to improve understanding and 

compliance with these complex regulations. TTB also is using the findings of its FY 2015 

analyses of the reasons that applications are returned to industry for correction to implement 

system-based compliance checks that will improve the compliance of label and formula 

applications. At the proposed funding level, TTB would defer planned updates to the label and 

formula application systems in FY 2017.

In addition to these intervention strategies, TTB will significantly reduce label and formula 

application turnaround times through the addition of label specialists, formula specialists, and 

chemists who directly impact service times through their review of applications and product 

samples. The combination of staffing, improved guidance, and enhanced systems are necessary 

to provide a long-term solution to current processing delays that may limit potential revenue and 

negatively impact businesses.
TTB - 7

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Alcohol and Tobacco Tax and Trade Bureau FTE Amount

FY 2016 Enacted 494 $106,439

Changes to Base:

Maintaining Current Levels (MCLs): - $1,562

Pay-Raise - $598

Pay Annualization $199

Non-Pay - $765

Other Adjustments: - ($1,562)

IT Investments in Application Systems - ($1,562)

Subtotal Changes to Base - $0

Total FY 2017 Base 494 $106,439

Program Changes:

 Program Increase: 35 $5,000

 Alcohol and Tobacco Enforcement Program 35 $5,000

Total FY 2017 Operating Level 529 $111,439

Program Integrity Cap Adjustment Included in IRS Budget Request - ($5,000)

Total FY 2017 Net Appropriation Request 529 $106,439

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .......................................................+$1,562,000 / +0 FTE

Pay-Raise +$598,000 / +0 FTE

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$199,000 / +0 FTE

Funds are requested for the annualization of the 2016 pay raise.

Non-Pay +$765,000 / +0 FTE

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

adjustments, contracts, postage, supplies, and equipment.

Other Adjustments .......................................................................................-$1,562,000 / -0 FTE

IT Investments in Application Systems -$1,562,000 / -0 FTE

TTB will defer additional IT enhancements for its labeling program modernization effort while 

continuing to retain the additional label specialists, formula specialists, and chemists hired to 

improve processing times of labels and formulas.

Program Increase .....................................................................................+$5,000,000 / +35 FTE

Alcohol and Tobacco Enforcement Program +$5,000,000 / +35 FTE

The FY 2017 request includes a proposal to amend section 251 of the Balanced Budget and 

Emergency Deficit Control Act of 1985, as amended, to provide a program integrity cap 

adjustment of $5 million for TTB’s tax enforcement and compliance program to narrow the tax 

gap in the tobacco and alcohol industries and reduce the deficit through increased revenue 

collections. TTB’s funding request is captured in the program integrity cap adjustment proposed 

in the IRS budget for both the IRS and TTB. 
TTB - 8

The proposed cap adjustment for TTB tax enforcement and compliance activities includes $5 

million in new, revenue-producing tax compliance initiatives in FY 2017 and $5 million in 

additional new initiatives each fiscal year from 2018 through 2021, then remaining at a steady 

state through FY 2026. With this funding, TTB will target known points in the supply chain that 

are susceptible to diversion activity and prioritize forensic audits and investigations of high-risk 

entities and activity in the alcohol and tobacco industries. Because these new initiatives, as well 

as current enforcement activities, must be sustained over time in order to maximize their 

potential taxpayer returns, the total above-base adjustment funding is $189 million over the 10-

year period. Over this same time period, these additional investments will generate an estimated 

$338 million in additional tax revenue. The net savings from these investments is $149 million. 

In addition to the direct revenue impact from its enforcement efforts, an increased TTB 

enforcement presence also creates a deterrent effect in the marketplace that further contributes to

tax compliance.

TTB Excise Tax Enforcement and Compliance Funding Summary

(in millions of dollars)

Program Integrity Cap Adjustment Included in IRS Budget Request -$5,000,000 / +0 FTE

This adjustment ensures that the program increase for TTB’s tax enforcement program is reflected 

only once in the 2017 request as part of the IRS’s program integrity cap adjustment proposal.

2017 2018 2019 2020 2021 2017-2026

Cap Adjustment, Proposed BBEDCA

(Discretionary Budget Authority) 5 10 14 18 23 189

Change from Prior Year 5 4 4 5

Revenue (3) (8) (16) (25) (35) (338)

Change from Prior Year (5) (8) (9) (10)

Net 10-Year Savings (149)
TTB - 9

2.2 – Operating Levels Table

Dollars in Thousands

Alcohol and Tobacco Tax and Trade Bureau FY 2015 FY 2016 FY 2017 FY 2017 FY 2017

Object Classification Actual Enacted Request Transfer 

from IRS

Total 

Discretionary 

Appropriation

11.1 - Full-time permanent 44,739 47,789 48,427 1,697 50,124

11.5 - Other personnel compensation 704 619 619 50 669

11.9 - Personnel Compensation (Total) 45,443 48,408 49,046 1,747 50,793

12.0 - Personnel benefits 14,015 14,244 14,403 373 14,776

13.0 - Benefits for former personnel 30 0 0 0 0

Total Personnel and Compensation Benefits $59,488 $62,652 $63,449 $2,120 $65,569

21.0 - Travel and transportation of persons 1,751 1,976 1,976 204 2,180

22.0 - Transportation of things 20 50 50 35 85

23.1 - Rental payments to GSA 4,193 4,400 4,400 0 4,400

23.3 - Communication, utilities, and misc 

charges 1,434 1,567 1,594 35 1,629

24.0 - Printing and reproduction 194 262 267 0 267

25.2 - Other services 21,417 25,390 24,352 950 25,302

25.3 - Other purchases of goods & serv frm 

Govt accounts 6,458 7,552 7,715 1,446 9,161

26.0 - Supplies and materials 395 490 499 35 534

31.0 – Equipment 3,077 2,100 2,137 175 2,312

Total Non-Personnel 38,939 43,787 42,990 2,880 45,870

Subtotal New Appropriated Resources $98,427 $106,439 $106,439 $5,000 $111,439

Budget Activities:

Collect the Revenue 54,657 56,421 57,154 5,000 62,154

Protect the Public 49,902 57,010 56,197 0 56,197

Total Budgetary Resources $104,559 $113,431 $113,351 $5,000 $118,351

FTE 466 504 504 35 539
TTB - 10

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of 

Changes

DEPARTMENT OF THE TREASURY

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of carrying out section 1111 of the 

Homeland Security Act of 2002, including hire of passenger motor 

vehicles, $106,439,000; of which not to exceed $6,000 for official 

reception and representation expenses; 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, [$5,000,000 shall be for 

the costs of accelerating the processing of formula and label 

applications] such sums as are necessary shall be available to fully 

support tax enforcement and compliance activities including tax 

compliance to address the Federal tax gap, as specified for 

purposes of Section 251(b)(2) of the Balanced Budget and 

Emergency Deficit Control Act of 1985, as amended.

While the Budget 

proposes to 

remove the $5 

million earmark 

for accelerating 

the processing of 

formula and label 

applications, $3.4

million remains in 

the base for this 

program.

2C – Legislative Proposals

TTB has no legislative proposals.
TTB - 11

Section 3 – Budget and Performance Plan

3A – Collect the Revenue

($53,560,000 from direct appropriations, $3,594,000 from reimbursable resources, and a 

transfer of $5,000,000):

This budget activity includes all tax processing, verification, enforcement, and outreach efforts 

related to administering the Federal tax code for alcohol, tobacco, firearms, and ammunition

products, and supports the Treasury objective to pursue tax reform and improve the execution of 

the tax code. TTB collects approximately $22 billion in Federal tax revenue annually from 

roughly 11,700 businesses, making TTB the third largest tax collection agency in the Federal

Government. Members of the regulated industries that are subject to excise taxes are distilleries, 

breweries, bonded wineries, bonded wine cellars, manufacturers of cigarette papers and tubes, 

manufacturers of tobacco products, and manufacturers and importers of firearms and 

ammunition. TTB extends the reach of its enforcement resources through advanced analytics and 

risk-based audits and investigations. Further, as appropriate, TTB applies an interagency 

enforcement strategy through joint initiatives with local, state, Federal, and foreign Government

counterpart agencies to maximize the deterrent impact of enforcement actions. To ensure a level 

playing field for all those engaged in the trade of these strictly regulated commodities, TTB also 

takes appropriate enforcement action to detect and address diversion activity to ensure all 

products sold in the marketplace are properly taxpaid.

Other Resources (Offsetting Collections/Reimbursables).................................... $3,594,000

Other resources that fund this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $350 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported to

the United States (cover-over payments); reimbursement by the Community Development 

Financial Institutions Fund (CDFI) for TTB’s IT services; and a nominal reimbursement from 

the Bureau of Alcohol, Tobacco, Firearms, and Explosives for laboratory services.

Other Resources (Transfer)............................................................................. $5,000,000

The FY 2017 request also proposes a transfer of $5 million from the proposed IRS program 

integrity cap adjustment to TTB for tax enforcement and compliance initiatives to narrow the tax 

gap in the tobacco and alcohol industries and reduce the deficit through increased revenue 

collections.

Description of Performance – Collect the Revenue:

In FY 2015, TTB met one of its two annual targets for the performance measures under the 

Collect the Revenue budget activity. Taken together, TTB’s measures of the Amount of Revenue 

Collected per Program Dollar and the Percent of Voluntary Compliance from Large Taxpayers in 

Filing Payments Timely demonstrate the effectiveness and efficiency with which TTB operates 

its revenue collection function. These measures also serve as key indicators for Treasury’s goals 

and objectives to fairly and effectively reform and modernize tax systems and the administration 

of the tax code. Achieving results for both measures will be supported by the strategic

application of technology to streamline internal and external processes and an effective tax 

enforcement presence that leverages intelligence data from a variety of Government and 

commercial sources as well as interagency partnerships with counterpart enforcement agencies.
TTB - 12

Improve Efficiency of Tax Collection 

The Amount of Revenue Collected per Program Dollar measure uses annual collections figures 

and the actual expenditures and obligations for collection activities to quantify the efficiency of 

the TTB tax collection program. In FY 2015, TTB achieved a return on investment of $437 for

every program dollar spent on collection activities, which exceeded its annual performance target 

of $400. Effective enforcement combined with process improvements and streamlining efforts 

should contribute to continued positive returns on the investment in TTB, contributing to 

Treasury’s goal of a modern and effective tax system.

In setting its FY 2017 performance target, TTB examined historical collections trends across 

each of its regulated commodities, as well as other predictors that influence consumer behaviors.

Specifically, significant shifts in consumption patterns, product manufacturing, and trade will 

continue to impact Federal revenues in the years ahead. As illustrated by the below table, the 

2009 changes to the Federal tax rates have resulted in increased tobacco tax collections by TTB, 

although the amount of the increase has generally decreased since FY 2010, the first full fiscal 

year following the tax rate increases. In accounting for these types of marketplace shifts, TTB 

established a targeted performance level of 400:1 for fiscal years 2016 – 2017. 

In FY 2017, to meet its performance target of $400, TTB will continue to improve efficiencies 

and results in its tax enforcement program by improving its systems and processes related to tax 

verification. On the front end, TTB will continue to evaluate and develop options to increase 

automation in the detection, notification, assessment, and collection of excise taxes to preserve 

staff time for substantive tax analysis. In FY 2017, TTB also intends to continue its review of all 

operational reports and tax returns required of the businesses it regulates as part of its ongoing 

effort to streamline its information collections. This initiative has the dual purpose of ensuring 

that TTB has the information required for effective tax and regulatory enforcement and 

eliminating unnecessary reporting burdens for U.S. companies.

On the back end, TTB will continue to develop and build risk models based on multiple data 

sources to identify high-risk activity or taxpayers for audit and investigation. Continuous 

refinements to these models and sound intelligence enable TTB to efficiently deploy its limited 

enforcement resources. A primary focus for TTB tax enforcement continues to be exported 

alcohol and tobacco products. Exports pose a significant revenue threat because alcohol and 

Excise Tax and Other Collections by Fiscal Year

Dollars in Thousands

2006 7,182,940 7,350,058 249,578 2,895 638 146 14,786,255

2007 7,232,138 7,194,081 287,835 2,808 - 32 14,716,894

2008 7,420,576 6,851,705 312,622 448 - 634 14,585,985

2009 7,424,292 11,548,504 452,693 272 1,192,375 970 20,619,106

2010 7,476,789 15,913,479 360,813 300 8,558 180 23,760,119

2011 7,594,330 15,515,073 344,262 268 5,220 2,257 23,461,410

2012 7,856,391 15,002,616 514,622 249 5,942 61 23,379,881

2013 7,851,953 14,321,017 762,836 280 1,521 38 22,937,645

2014 7,924,951 13,552,711 768,927 332 465 2 22,247,388

2015 7,997,467 13,620,497 638,518 288 2,444 7 22,259,221

Average $ 7,596,183 $ 12,086,974 $ 469,271 $ 814 $ 121,716 $ 433 $ 20,275,390

FAET - Firearms and Ammunition Excise Tax; SOT - Special Occupational Tax; FST - Floor Stock Tax

Total

Fiscal

Year Alcohol Tobacco FAET SOT FST Other
TTB - 13

tobacco products intended for export may be placed in a customs bonded warehouse, foreign 

trade zone, or tobacco export warehouse without payment of tax if they are destined for export 

and not for sale in the U.S. market. Some tax evasion schemes involve diversion of these 

products into domestic commerce to evade Federal excise taxes. According to TTB data, nontaxpaid removals of alcohol and tobacco products from bonded premises for export present an 

annual excise tax exposure of about $380 million and $1 billion, respectively. In FY 2015, in 

partnership with CBP and Immigration and Customs Enforcement, TTB expanded its 

intelligence and investigative techniques to make significant inroads into identifying tax evasion 

schemes that involve the diversion of non-taxpaid products intended for export. TTB’s 

enforcement efforts related to tobacco export warehouses, which operate under permits issued by 

TTB, have identified $41 million in additional tax liabilities as well as criminal referrals.

This measure would be positively influenced if the proposed program integrity cap adjustment 

requested in FY 2017 is approved. As TTB’s intelligence capabilities and risk modeling have 

become more sophisticated, the bureau needs additional enforcement resources to act on the 

leads that these tools generate. The requested cap adjustment would enable TTB to continue its 

current enforcement activities, while expanding enforcement initiatives to include other points in 

the supply chain that are at risk for diversion activity. TTB anticipates a positive long-term return 

on investment at the FY 2017 request level; however, the anticipated increases in additional tax 

collections from the planned expanded enforcement initiatives will not occur until year three, 

after new personnel reach full performance levels.

Increase Voluntary Compliance from Taxpayers

Fostering voluntary compliance among taxpayers is a primary tax administration strategy for 

TTB and supports the Treasury objective to improve the execution of the tax code. The Percent 

of Voluntary Compliance from Large Taxpayers in Filing Tax Payments Timely is a key 

performance metric that shows the rate of compliance by large taxpayers (i.e., those that pay 

more than $50,000 in annual taxes) in voluntarily filing their tax payments on or before the 

scheduled due date. In FY 2015, TTB achieved a compliance rate of 88 percent from its large 

taxpayers, which fell below the performance target of 92 percent. The declining compliance rate 

in recent years is due to improvements in TTB’s tax reconciliation and enforcement functions 

related to identifying late, missing, and erroneous tax returns and payments. These efforts often 

result in the late filing of tax returns that otherwise would have remained unfiled. The additional 

late-filed returns have the effect of reducing the reported voluntary compliance rate. TTB 

anticipates that taxpayers targeted by enforcement efforts will begin filing timely returns in 

future years, and that, over time, reported voluntary compliance rates will increase.

By FY 2017, TTB expects to meet its established performance target of a 94 percent voluntary 

compliance rate for its large taxpayers through complementary strategies that focus on enhancing 

electronic filing options to enable taxpayers to file complete, accurate, and timely tax returns and 

payments; improving online guidance, particularly for the large number of newly permitted 

industry members; and maintaining an enforcement presence to encourage voluntary compliance.

Moving forward on all three fronts will ensure that TTB strikes the appropriate balance between 

supporting new businesses in establishing compliant operations while ensuring adequate 

coverage of the high-risk activity that undermines lawful business activity. 
TTB - 14

Beginning now and continuing in FY 2017, TTB will also intensify its efforts to increase the 

electronic filing rate of its taxpayers. TTB taxpayers may electronically file required tax returns, 

reports, and payments through the Pay.gov system, with 26 percent of excise tax returns and 43

percent of operational reports submitted electronically through Pay.gov in FY 2015. TTB intends

to address a potential hindrance to using Pay.gov by allowing industry members to make tax 

payments with credit/debit cards. This enhancement would address a timing issue that requires 

those who file electronically to remit tax payments early. TTB is partnering with the Bureau of 

the Fiscal Service in this effort, which will require both system changes and rulemaking to 

implement.

The FY 2017 request will also support online enhancements to improve guidance, transparency, 

and collaboration between TTB and industry. Given the increase in new industry members, TTB 

completed an online “Business Central” resource to ensure that these taxpayers understand and 

are able to adhere to complex Federal tax and regulatory requirements. Continued expansion and 

improvement of this guidance will help to ensure that new businesses start and maintain 

compliant operations, supporting TTB’s achievement of its performance target.

As an identifiable enforcement presence is a well-established driver of compliance rates, TTB 

also expects to achieve higher rates of voluntary compliance at the FY 2017 request level

through the continuation and expansion of TTB’s criminal enforcement program. The FY 2017

request includes a $5 million transfer from the IRS program integrity cap adjustment to expand 

TTB tax enforcement and compliance initiatives through additional auditors, investigators,

special agents, and data scientists, which together comprise a complete tax enforcement program.

3.1.1 – Collect the Revenue Budget and Performance Plan

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

Appropriated Resources $53,000 $50,399 $50,939 $48,927 $51,721 $52,721 $52,785 $53,560

Reimbursable Resources $2,117 $1,979 $2,464 $3,277 $3,506 $3,651 $3,636 $3,594

Appropriations Transferred from IRS 

Program Integrity Cap Adjustment

$0 $0 $0 $0 $0 $0 $0 $5,000

Transfer from TEOAF-Super Surplus 

Fund

$0 $0 $0 $0 $468 $0 $0 $0

Budget Activity Total $55,117 $52,378 $53,403 $52,204 $55,695 $56,372 $56,421 $62,154

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Amount of Revenue Collected Per 

Program Dollar

478.0 468.0 449.0 457.0 457.0 437.0 400.0 400.0 400.0

Percent of Voluntary Compliance 

from Large Taxpayers in Filing Tax 

Payments Timely and Accurately (In 

Terms of Revenue)

94.0 95.0 92.0 92.0 90.0 88.0 92.0 92.0 94.0
TTB - 15

3B – Protect the Public

($52,879,000 from direct appropriations, and $3,318,000 from reimbursable resources):

This budget activity funds the programs that ensure the integrity of the products and industry 

members in the marketplace; promote compliance with Federal laws and regulations by the 

approximately 76,000 businesses that TTB regulates; facilitate fair and lawful domestic and 

international trade in the alcohol and tobacco commodities; and provide full and accurate alcohol 

beverage product information to the public as a means to prevent consumer deception. These 

activities support Treasury’s goal of domestic economic growth and stability and the objective to 

facilitate commerce by providing trusted and secure U.S. currency, products, and services for use 

by the public.

Other Resources (Offsetting Collections/Reimbursables).................................... $3,318,000

Other resources that support this budget activity include reimbursement for the operating costs of 

the TTB Puerto Rico field office, which are offset against the roughly $350 million in taxes 

collected on the alcohol beverage products that are manufactured in Puerto Rico and imported

into the United States (cover-over payments); reimbursement by the Community Development 

Financial Institutions Fund (CDFI) for TTB’s IT services; and a nominal reimbursement from 

the Bureau of Alcohol, Tobacco, Firearms, and Explosives for laboratory services.

Description of Performance – Protect the Public:

In FY 2015, TTB met two of its five annual targets for the performance measures under the 

Protect the Public budget activity. TTB reports on its success in meeting the Department’s 

objective to facilitate lawful commerce and TTB’s goal to ensure consumer protection through 

five principal performance measures, revised in FY 2015 to increase their utility as management 

tools and reflect a renewed focus on customer experience in receiving required services from 

TTB. The new measures will help TTB to monitor the degree to which it is meeting the service 

standards it establishes for permit, label, and formula applications, the impact that electronic 

filing initiatives are having on improved service delivery, and the level of satisfaction that 

prospective industry members have with TTB’s permitting process. TTB’s strategies to achieve 

its performance targets for these measures include a combination of streamlining internal 

procedures, implementing enhancements to online filing systems, and publishing clear guidance 

to industry members.

Improve Efficiency and Effectiveness of Permitting Process

TTB protects consumers by screening permit applicants to ensure only qualified persons engage 

in the alcohol, tobacco, firearms, and ammunition industries. For this purpose, in FY 2015, TTB 

processed approximately 7,300 original and 19,500 amended permits, performing investigations 

into high-risk applicants to meet TTB’s business integrity objective. TTB monitors its timeliness 

in processing permit applications through its measure of the Percentage of Permit Applications 

Processed within Service Standards. This measure indicates how many customers are receiving 

service levels that fall within the communicated standards, rather than reporting an average 

processing time that may not represent the typical customer experience. As businesses rely on 

accurate information related to TTB service delivery in their operational planning, this measure 

provides important data related to a key outcome for TTB and its stakeholders. For this measure, 

TTB establishes an annual service standard based on anticipated workload volume and resources.

In FY 2015, TTB met its 75-day service standard for 47 percent of original permit applications.
TTB - 16

The increased volume in the most complex application types, in addition to backlogs at the 

approval stage due to resource constraints, caused processing times to increase. TTB intends to 

make substantial progress toward its FY 2017 performance target of 85 percent for timely 

processed permit applications through a combination of industry outreach to promote electronic 

filing, streamlining its internal procedures, and ongoing system enhancements.

According to its measure of the Percent of Electronically Filed Permit Applications, which tracks 

the e-filing rate for new business applications, TTB has made substantial progress in a short 

time, with 84 percent of permit applications received via Permits Online. To meet its FY 2017

target of 89 percent, TTB will continue to promote use of Permits Online by all permit 

applicants, including through online guidance and training. Even as e-filing rates increase, 

however, TTB has not achieved a commensurate reduction in processing times for permits due, 

in part, to the high volume of applications. In recent years, the number of new permit 

applications has increased in line with rapid industry growth, making it difficult to maintain 

service levels. Between 2011 and 2015, the number of original permit applications received has 

increased 25 percent, primarily due to growth in the small alcohol beverage producer and alcohol 

wholesaler segments.

To realize improvements to service delivery, TTB is engaged in a priority project to facilitate 

electronic filing for all industry members. In FY 2015, as part of this multi-year endeavor, TTB 

focused on both system improvements to Permits Online as well as the internal processes in its 

business qualification program. Combined, these efforts should reduce processing times while 

continuing to ensure that TTB issues permits to only qualified applicants. In FY 2015, TTB 

began to update the system’s business rules and customer support features to help prospective 

industry members submit complete and accurate information on their original permit application; 

these updates will continue through FY 2017. Based on a recent analysis, TTB has found that as 

few as 23 percent of applicants filing for a permit correctly complete the application without 

TTB assistance. By receiving correct and complete applications on the first filing attempt, TTB 

can reduce the time required to return applications for correction and review corrected 

submissions, thus reducing the time from application submission to permit issuance.

Further, system enhancements that began in FY 2015 will improve the ease of amendment filing 

for existing Permits Online users and enable approximately 60,000 TTB permittees who 

originally filed a paper permit application to file amendments to their permit through Permits 

Online. As TTB receives approximately 20,000 permit amendments annually, this project will 

result in efficiencies for both TTB and the businesses it serves through increasing the rate of 

electronic filing by industry and improving processing times.

In addition to the workflow improvements associated with the above system changes, TTB will 

continue to update its procedures used to screen permit applicants, adding new financial data 

sources to its risk models and improving the risk criteria used to vet applicants for suitability to 

hold a Federal permit in the alcohol and tobacco industries. Increased focus on risk modeling and 

statistical sampling will help to ensure that TTB is permitting only qualified applicants, while 

also managing workloads and improving service delivery. With these changes, TTB anticipates 

achieving sustained reductions to its permit application turnaround time and more consistent 

service by the fourth quarter of FY 2017.
TTB - 17

Increase Customer Satisfaction with TTB Service Delivery 

TTB also measures its performance in its permitting function by surveying the businesses that 

apply for a TTB permit. TTB monitors the Customer Satisfaction Rate with TTB’s Permitting 

Process by using an e-mail survey to assess how satisfied businesses are when applying for a 

permit through Permits Online. Satisfaction rates in FY 2015 were slightly below the annual 

target of 80 percent, with 76 percent of applicants filing for an original permit satisfied with the 

application process, including the level of service received and timeliness of TTB’s response.

The system enhancements rolled out in FY 2015 should result in improved satisfaction rates. In 

addition to enhanced help features, these upgrades also addressed bottlenecks in the permit 

approval process, which should decrease processing times and increase satisfaction rates. In 

FY 2017, to achieve its performance target of 80 percent, TTB will continue to implement 

system enhancements and process improvements to improve the customer experience with the 

system and improve the online guidance available to permit applicants. TTB will also seek to 

improve the level of service provided to customers seeking live assistance with the permit 

application process via TTB’s call center.

Improve Efficiency and Effectiveness of Alcohol Beverage Label Processing

TTB protects U.S. consumers by ensuring that the alcohol beverage products sold at retail outlets 

are properly labeled and comply with Federal production standards. In FY 2015, TTB received

nearly 154,000 label applications and more than 14,000 formula applications. The rapid 

expansion of the alcohol beverage industry combined with market trends toward formulated 

products have contributed to the high volume of label and formula applications. Recent policy 

changes intended to reduce applications without compromising TTB’s consumer protection role 

successfully reduced the volume of original label and formula submissions in the short-term; 

however, industry trends have resulted in increased submissions that have offset these 

reductions. Low compliance rates for original submissions are also essentially doubling TTB’s 

processing workload, as applications returned to industry for correction require additional 

review.

These workload challenges have prevented TTB from making sustained progress in improving 

service delivery in this area. Lengthy processing times continue to disrupt the business 

operations of U.S. beer, wine, and spirits producers and importers, posing a potential barrier to 

commerce. Given the importance of timely TTB approvals and the negative impact that delays 

have on U.S. businesses, TTB is monitoring its ability to provide timely and consistent service 

through its measure of the Percentage of Alcohol Beverage Label and Formula Applications 

Processed within Service Standards. TTB combines label and formula applications in this 

measure given the interdependent nature of these approvals. In FY 2015, approximately 75 

percent of label and formula applications met the service standards of 30 days for a label 

approval and 45 days for a formula approval. The result was that new businesses waited three 

months on average from the time they filed for a formula approval to being able to bottle and 

distribute a new product. This timeline increases to over 100 days for products that also require 

laboratory analysis prior to approval. In FY 2015, TTB made progress in meeting its service 

standard for label approvals, with 80 percent of label approvals meeting the 30-day service 

standard; however, performance in timely processing formula approvals remains a challenge, 

with TTB meeting the 45-day service standard just 15 percent of the time.
TTB - 18

At the enacted FY 2016 and proposed FY 2017 funding levels, TTB will invest in staffing and 

technology enhancements to achieve dramatic improvement in service standards for label and 

formula review times. Through this combination, TTB expects to reduce total review times from 

over 100 days to 30 days or less (including those submissions that require lab analyses) for 85 

percent of applications. At this funding level, TTB will increase its staff of label specialists, 

formula specialists, and chemists, all of whom directly impact service times through their review 

of applications and product samples. TTB is also implementing system improvements to both 

COLAs (Certificate of Label Approval) Online and Formulas Online to address the high volume 

of label and formula submissions, including increased system-based compliance checks to reduce 

reprocessing work related to errors on initial applications. Certain planned enhancements to 

TTB’s application systems would be deferred at the FY 2017 funding level. Once new hires 

reach full productivity and system updates currently in development take effect in the fourth 

quarter of FY 2017, TTB expects to achieve its performance target of processing label and 

formula applications within 30 days for 85 percent of applications.

To meet the performance target, TTB will also continue to focus on revising and updating its 

policies and improving industry guidance to facilitate the compliance of initial applications and 

reduce overall submission volume. TTB intends to proceed with its labeling modernization

project, which will update and streamline the labeling regulations to reflect current TTB policy 

and modern industry practices. TTB will also pursue revisions to the formula requirements for 

spirits and wine products to achieve reductions similar to those already realized for malt 

beverage formulas, which may require rulemaking to fully implement.

Further, TTB will continue to employ its strategy to increase electronic filing to manage 

workloads and reduce processing times. These efforts include improving online guidance as well 

as enhancing the help features in TTB’s online systems. In FY 2015, TTB achieved a combined 

electronic filing rate of 94 percent, as tracked by its measure of Percent of Electronically Filed 

Label and Formula Applications. The planned guidance and system improvement efforts will 

help TTB achieve its electronic filing target of 95 percent in fiscal years 2016 and 2017.
TTB - 19

3.1.2 – Protect the Public Budget and Performance Plan

Dollars in Thousands

Protect the Public Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Enacted Enacted Request

Appropriated Resources $50,000 $50,399 $48,939 $45,727 $47,279 $47,279 $53,654 $52,879

Reimbursable Resources $2,117 $1,979 $2,464 $2,670 $3,236 $3,371 $3,356 $3,318

Transfer from TEOAF-Super 

Surplus Fund

$0 $0 $0 $0 $432 $0 $0 $0

Budget Activity Total $52,117 $52,378 $51,403 $48,397 $50,947 $50,650 $57,010 $56,197

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percent of 

Electronically Filed 

Permit Applications

N/A N/A 62.0 70.0 79.0 84.0 82.0 87.0 89.0

Percent of Permit

Applications 

Processed within 

Service Standards

N/A N/A 61.0 50.0 58.0 47.0 85.0 85.0 85.0

Customer 

Satisfaction Rate 

with TTB Permitting 

Process

N/A N/A N/A N/A B 76.0 80.0 80.0 80.0

Percent of 

Electronically Filed 

Label and Formula

Applications

N/A 84.0 88.0 90.0 93.0 94.0 94.0 95.0 95.0

Percentage of 

Alcohol Beverage 

Label and Formula 

Applications 

Processed within 

Service Standards

N/A N/A 83.0 49.0 67.0 75.0 85.0 85.0 85.0

Key: DISC - Discontinued and B – Baseline
TTB - 20

Section 4 – Supplemental Information

4A – Summary of Capital Investments

Information Technology

TTB’s Strategic Plan establishes the vision and objectives for the bureau in the business context.

TTB’s Information Technology (IT) Strategic Plan is a five-year plan based on its business 

strategy, which includes the bureau’s mission, vision, goals, and objectives from the IT 

perspective. This plan charts the course the bureau will follow in the coming years to develop 

and implement IT solutions that are aimed at streamlining the collection of data, leveraging web 

technologies, and making the Internet the method of choice for the reporting and exchanging of 

information. By aligning business and technical strategy, TTB is able to leverage technology to 

enable the bureau to meet its objectives in the most efficient and cost-effective manner while 

identifying ways to minimize system redundancy.

TTB has no major IT investments based on the OMB and the Department of Treasury criteria.

Several non-major investments, however, directly support the mission, strategy, and day-to-day 

operations of the bureau. These include:

TTB Tax System: This investment consists of several component applications that ensure fair 

and proper collection of revenue from the industry members for alcohol, tobacco, firearms, and 

ammunition excise taxes and to ensure compliance with the excise tax regulations.

TTB Regulatory System: This investment includes applications that streamline the beverage 

and nonbeverage alcohol formula approval process and COLA issuance for tax and regulatory 

compliance.

TTB General Support Services: This investment provides TTB users with the infrastructure 

applications necessary to conduct daily business.

TTB Enterprise Architecture: This investment supports strategic management of IT operations 

(e.g., business process redesign efforts not part of an individual investment, enterprise 

architecture development, capital planning and investment control processes, procurement 

management, and IT policy development and implementation) and costs for Chief Information 

Officer functions.

In addition to leveraging IT to support the mission, strategy, and day-to-day operations of the 

bureau, TTB supports and maintains strategy alignment with OMB and Treasury through 

enterprise-wide IT initiatives. These include: Cyber Security; IT Infrastructure; Electronic 

Identity and Access Management (HSPD-12); Enterprise-wide Contracts and Services; and

Program Metrics and Milestones.

Scientific Equipment for Laboratories

This investment will enable chemists to provide accurate and reproducible scientific data and 

laboratory results to support regulatory compliance, tax enforcement, tax classification, 

rulemaking, and investigations for both the alcohol and tobacco commodities. Laboratory 
TTB - 21

instruments require periodic replacement, as they have finite lifecycles due to use and as 

scientific advances continue to evolve. Technologies applied at these laboratories eventually 

become obsolete and the instruments are not serviceable as vendors stop carrying parts and 

software. Periodic replacement of the existing technologies is essential for TTB laboratories to 

remain state-of-the-art and effective to support the bureau’s mission, strategy, and day-to-day 

operations.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at http://www.treasury.gov/about/budget-performance/Pages/summary-of-capitalinvestments.aspx

This website also contains a digital copy of this document.

Bureau of the Fiscal Service

FY 2017

Congressional Justification

February 9, 2016
FS - 2

Table of Contents

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

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

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

1B – Vision, Priorities and Context............................................................................................ 3

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

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

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

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

2C – Permanent, Indefinite Appropriations.............................................................................. 12

2.3– Permanent, Indefinite Appropriations Table..................................................................... 13

2D – Legislative Proposals....................................................................................................... 14

Section 3 – Budget and Performance Plan ............................................................................... 17

3A – Accounting and Reporting ............................................................................................... 17

3.1.1 –Accounting and Reporting Budget and Performance Plan ............................................ 19

3B – Collections........................................................................................................................ 20

3.1.2 –Collections Budget and Performance Plan .................................................................... 21

3C – Debt Collection................................................................................................................. 21

3.1.3 – Debt Collection Budget and Performance Plan ............................................................ 22

3D – Payments.......................................................................................................................... 22

3.1.4 – Payments Budget and Performance Plan ...................................................................... 25

3E – Retail Securities Services................................................................................................. 25

3.1.5 – Retail Securities Services Budget and Performance Plan............................................. 27

3F – Wholesale Securities Services.......................................................................................... 27

Section 4 – Supplemental Information...................................................................................... 30

4A – Summary of Capital Investments..................................................................................... 30

4B – Summary of Changes to Appropriated Budget Activities................................................ 32
FS - 3

Section 1 – Purpose

1A – Mission Statement

Promote the financial integrity and operational efficiency of the Federal Government through 

exceptional accounting, financing, collections, payments, and shared services.

1.1 – Appropriations Detail Table Dollars in thousands

Bureau of the Fiscal Service

Appropriated Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Accounting and Reporting 451 104,725 419 125,752 454 114,167 35 (11,585) 8.35% -9.21%

Collections 164 35,029 162 38,798 171 40,225 9 1,427 5.56% 3.68%

Payments 494 120,912 485 118,454 516 115,141 31 (3,313) 6.39% -2.80%

Retail Securities Services 463 76,819 457 70,038 458 71,186 1 1,148 0.22% 1.64%

Wholesale Securities Services 64 10,699 63 10,808 65 12,338 2 1,530 3.17% 14.16%

Subtotal New Appropriated Resources 1,636 $348,184 1,586 $363,850 1,664 $353,057 78 (10,793) 4.92% -2.97%

Other Resources:

Reimbursables 714 277,674 701 292,381 488 $268,486 (213) (23,895) -30.39% -8.17%

Subtotal Other Resources 714 $277,674 701 $292,381 488 $268,486 (213) (23,895) -30.39% -8.17%

Total Budgetary Resources 2,350 $625,858 2,287 $656,231 2,152 $621,543 (135) (34,688) -5.90% -5.29%

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 4B for additional information.

Request Change % Change

FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Enacted Enacted

1B – Vision, Priorities and Context

The Bureau of the Fiscal Service (Fiscal Service) is guided by its vision to transform federal 

financial management and the delivery of shared services through efforts focused on 

maximizing efficiencies, transparency, and accountability. These themes are reinforced 

through bureau level Strategic Goals which promote the following:

• leadership and innovation .

• delivery of exceptional programs and services by an engaged and highly effective 

workforce .

• data transparency and usefulness .

• expansion of shared services.

Operationally, the Fiscal Service provides central payment services to federal program agencies 

(FPAs); operates the Federal Government's collections and deposit systems; provides 

government-wide accounting and reporting services; conducts all Treasury debt financing 

operations; issues, services, and accounts for all Treasury marketable securities and nonmarketable securities; delivers reimbursable support services to federal agencies; and manages 

the collection of delinquent debt.

FY 2017 Statement of Objectives

The Fiscal Service fulfills its mission and vision through five annually appropriated budget 

activities and one mandatory budget activity, funded through debt revenue that support and align 

with Treasury’s strategic objectives as follows:

Treasury Strategic Objective 1.1

Promote savings and increased access to credit and affordable housing options

Retail Securities Services

Wholesale Securities Services
FS - 4

Treasury Strategic Objective 3.1

Improve the efficiency and transparency of federal financial management and 

government-wide accounting

Accounting and Reporting

Treasury Strategic Objective 3.2

Improve the disbursement and collection of federal funds and reduce improper 

payments made by the United States Government

Collections

Debt Collection (non-appropriated)

Payments

Fiscal Service continues to make progress in implementing its priority projects, as well as 

supporting Treasury in the accomplishment of its strategic objectives. Through the Treasury 

Strategic Objective Annual Review, the following next steps were identified for Fiscal Service:

• Implement myRA scaled adoption and technology enhancement.

• Redesign the Financial Information Repository to address client needs and implement 

general capability improvements.

• Implement USAspending.gov improvements.

• Lead the government-wide Digital Accountability and Transparency Act of 2014 (DATA 

Act) implementation strategy in partnership with the Office of Management and Budget 

(OMB).

• Incorporate authorized data sources into the Do Not Pay Business Center.

• Perform 24-month student loan pilot with the Department of Education.

• Enhance program effectiveness by working to align new and existing performance measures 

to the Fiscal Service Strategic Plan.

Bureau-wide Efforts

Government-wide Shared Services

• Continue to support the Shared Services Cross-Agency goal to advance the adoption of 

shared services by coordinating input from the financial marketplace, managing financial 

business processes and expanding lessons learned into other lines of business.

• Support the newly established Unified Shared Services Management office in the General 

Services Administration to improve delivery of services, stabilize shared ecosystems and 

identify additional opportunities for agency collaboration.

Accounting and Reporting

Fiscal Service accomplished the following through September 30, 2015:

• Refreshed the USAspending.gov website in March 2015 and continued making additional 

changes throughout FY 2015 in response to new and outstanding feedback regarding 

usability and presentation.

• Released the initial data standards, guidance (including a baseline data exchange schema), 

and other resources to federal agencies in May 2015, in collaboration with OMB to support 

the implementation of the DATA Act; initiated the first phase of the DATA Act 

Implementation Pilot, which leverages industry data exchange standards to map federal 

financial data to a standard taxonomy and format.
FS - 5

• Accounted for and reported on all financial activity related to the $18.2 trillion public debt.

• Issued and serviced nearly $5.0 trillion in Treasury securities invested by 78 federal 

agencies in over 244 Federal Government trust and investment accounts, including 

$3.2 trillion in 22 Treasury managed trust funds.

• Managed a daily cash flow of $88.3 billion.

• Enhanced the Financial Information Repository (FIR) to support further efforts to provide the 

public with visibility into the financial health of the Federal Government.

• Implemented planned FIR releases to address user enhancements and incorporated the 

Monthly Statement of the Public Debt visualization proof of concept.

• The Central Accounting and Reporting System (CARS) was implemented as the central 

accounting system of record for the Federal Government, replacing the legacy STAR system 

that had been in use for 25 years.

FY 2016

• Continue implementation of the DATA Act to include necessary government-wide financial 

system enhancements and providing assistance to agencies. This includes developing the 

technical platform/architecture to collect data across disparate systems in the Federal 

Government. 

• Begin operationalizing data exchange standards for federal transparency reporting. In 

collaboration with OMB, develop a corresponding framework and governance structure 

required to manage the standards.

• Continue multi-year effort towards obtaining a clean audit of the Financial Report by 

FY 2018 by obtaining assurance on the reliability of all significant General Fund activity and 

balances. 

• Strengthen effective government-wide accounting by providing Central Accounting and 

Reporting System (CARS) operational and technical support during the transition of federal 

program agencies to CARS.

FY 2017

• Complete the implementation of the DATA Act and continue to meet Treasury's 

responsibility to publish additional spending data on USAspending.gov (or a successor site). 

This includes operationalizing data exchange standards for federal transparency reporting and 

the corresponding governance required to manage the standard. Develop a publication 

platform that provides consistent, reliable, and searchable government-wide spending data. 

• Continue to support the Agency Priority Goal to develop and improve financial transparency 

policies and their adoption that reflect a 21st century economy and data-driven decisionmaking. 

• Continue progress towards obtaining a clean audit of the Financial Report by FY 2018 by 

obtaining assurance on the reliability of all significant General Fund activity and balances. 

• Modify payment, collection, and accounting systems to enable Treasury to monitor and 

manage its cash position in near real time.

Collections

Fiscal Service accomplished the following through September 30, 2015:

• Collected nearly $3.1 trillion in federal revenue.
FS - 6

• Processed over 119 million transactions worth over $106 billion through Pay.gov, an 

internet-based non-tax collection system.

• Processed nearly $3.0 trillion (approximately 98% of total revenue collected) through 

Electronic Funds Transfer.

Fiscal Service plans to focus on the following highlighted Collections efforts:

FY 2016

• Continue to advance E-Commerce in support of Treasury’s initiative to have non-tax 

collections and remittances submitted electronically to reduce costs, improve accuracy, and 

increase options available to citizens to conduct transactions with the Government.

• Complete business requirements for the new Electronic Federal Tax Payment System 

(EFTPS) to facilitate innovation and incorporate sound security features.

• Facilitate cost savings and the reduction of paper in Lockbox programs through the Financial 

Agent Selection Process (FASP), E-Commerce, and program advancements.

FY 2017

• Advance E-Commerce further by implementing a variety of mobile apps and increasing 

agency implementation of digital wallet providers and online bill payment.

Payments

As of September 30, 2015 Fiscal Service achieved the following successes:

• Disbursed over $2.6 trillion in federal payments including Social Security, veterans’ 

benefits, and income tax refunds.

• Disbursed 94.8% of the nearly 1.2 billion payments electronically – 98% of the 931 million 

benefit payments were disbursed electronically.

• The DNP Business Center (DNP) implemented a major system release providing real-time 

matching at the time of payment, resulting in more timely agency and program access to 

potential improper payments that may need further investigation.

• DNP worked one on one with agencies to review payment data to identify and address 

internal control weaknesses that resulted in improper payments in addition to the business 

process review services offered.

FY 2016

• Improve federal fiscal management by expanding federal agency use of the Do Not Pay 

Business Center to reduce improper payments.

• Further expand federal agency use of the Invoice Processing Platform (IPP).

• Promote Treasury disbursing services to federal agencies that currently make their own 

payments.

• Enhance federal reporting and query capabilities by enabling agencies to submit claims 

electronically through improvements in the Post Payment System (PPS). 

• Continue planned enhancements to the Stored Value Card (SVC) program to include 

consolidating processing platforms and developing components for a SVC one-card solution.
FS - 7

FY 2017

• Improve analytics capabilities through the use of new algorithms and predictive modeling; 

acquire income, expanded death, and credit data; and implement authorities to work with 

Federal legislative and judicial programs and federally funded state-administered programs.

• Expand the number of agencies and their vendors using IPP to submit electronic invoices.

• Implement Treasury disbursing services with additional federal agencies.

• Continue to enhance SVC products for efficiency and expand capabilities.

Retail Securities Services

Fiscal Service accomplished the following during FY 2015:

• Issued and serviced $26.9 billion in savings and marketable issues held by 

583,227 investors in the online TreasuryDirect system through September 30th.

• Implemented a myRA landing site in November 2014 and worked on a variety of 

enhancements, such as including the ability to create a myRA account when filing tax returns.

• Implemented virtual case files to improve customer service by automating workflows and a 

virtual contact center as part of the multi-year Treasury Retail E-Services initiative.

FY 2016

• Enhance investment opportunities for American citizens through focused efforts on 

increasing participation in myRA.

• Complete a review of the Retail Securities Services program to refocus program direction 

and solidify the mission and long-term vision, identify the future customer base, design a 

new savings product(s), clarify the most effective channels for interacting with customers 

and servicing new products, and create an operating model and implementation roadmap.

• Develop core components and infrastructure for a new retail securities system that will 

enhance capabilities for customers to purchase, reinvest, redeem, transfer, and hold securities 

electronically, including developing a web interface.

FY 2017

• Continue to increase participation in myRA.

• Begin implementation of the Retail Securities Services program vision.

• Continue developing a new retail securities system that will enhance capabilities for 

customers to purchase, reinvest, redeem, transfer, and hold securities electronically, 

including deploying the core framework.

Wholesale Securities Services

During FY 2015, Fiscal Service:

• Conducted 269 auctions and awarded $6.9 trillion in Treasury marketable securities through 

September 30th.

• Continued stabilizing, modernizing, and migrating the Treasury Automated Auction 

Processing System (TAAPS) to a new technical platform, as well as planning to modernize 

the software components of TAAPS.
FS - 8

FY 2016

• Continue the multi-year effort to stabilize, modernize, and migrate TAAPS to a new 

technical platform, while modernizing software components.

FY 2017

• Complete the stabilization, modernization, and migration of TAAPS to a new technical 

platform and continue to modernize the software components.

Debt Collection

Fiscal Service accomplished the following through September 30, 2015:

• Collected nearly $7.3 billion in delinquent debt ($1.9 million in delinquent child support).

• Collected $547.8 million in State Unemployment Insurance Compensation debt on behalf of 

42 states and the District of Columbia.

• Started a Cross-Servicing debt collection pilot with the Department of Education upon 

receipt of 7,000 Direct and Federal Family Education Loan delinquent debts, with an 

additional 5,000 debts that followed, in order to determine the tools that can be employed to 

facilitate repayment or resolution of defaulted student loans.

FY 2016

• Expand the use of state-of-the-art mechanisms to include developing Cross-Servicing Next 

Generation to bring the Cross-Servicing system into the 21st Century.

• Continue the Education Student Loan Pilot.

FY 2017

• Continue to expand the use of state-of-the-art mechanisms and strategies for maximizing the 

collection of delinquent debt.

• Finalize the results of the Department of Education Student Loan Pilot and make a 

recommendation for future servicing of Education debts to ultimately achieve greater 

efficiency with government resources.
FS - 9

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Bureau of the Fiscal Service FTE Amount

FY 2016 Enacted 1,586 $363,850 

Changes to Base

Base Realignment 108 $0 

Technical FTE Adjustment 108 $0 

Maintaining Current Levels (MCLs) $6,032 

Pay-Raise $2,295 

Pay Annualization $620 

Non-Pay $3,117 

Efficiency Savings (30) ($1,935)

Program Efficiencies (30) ($1,935)

Total FY 2017 Base 1,664 $367,947

Program Changes 

Program Decreases ($14,890)

DATA Act Implementation ($10,780)

Rent Savings ($4,110)

Total FY 2017 Request 1,664 $353,057 

2A – Budget Increases and Decreases Description

Base Realignment ................................................................................................+$0 / +108 FTE

Technical FTE Adjustment +$0 / +108 FTE 

Maintaining Current Levels (MCLs) ......................................................+$6,032,000 / +0 FTE

Pay-Raise +$2,295,000 / +0 FTE 

Funds are requested for the proposed January 2017 pay-raise.

Pay Annualization +$620,000 / +0 FTE 

Funds are requested for annualization of the January 2016 pay-raise.

Non-Pay +$3,117,000 / +0 FTE 

Funds are requested for inflation adjustments in non-labor costs such as travel, contracts, rent, 

supplies, and equipment.

Efficiency Savings ....................................................................................-$1,935,000 / +78 FTE

Program Efficiencies -$1,935,000 / -30 FTE 

Anticipated savings realized from reduced programmatic and FTE requirements to align with 

estimated operating levels.

Program Decreases ..................................................................................-$14,890,000 / +0 FTE

DATA Act Implementation -$10,780,000 / +0 FTE 

With the implementation of the DATA Act anticipated to be well underway, it is expected that 

Fiscal Service will be able to decrease the funding needed to complete the balance of the 

government-wide legislative requirements.
FS - 10

Rent Savings -$4,110,000 / +0 FTE 

With the final closeout of the Emeryville, California lease, Fiscal Service is realizing the last 

portion of the Payment Center Closure savings.
FS - 11

2.2 – Operating Levels Table

Dollars in thousands

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 4B 

for additional information.

FY 2015 

Actual

FY 2016 

Enacted 

FY 2017 

Request

Object Classification

11.1 Full-time permanent 136,298 141,854 135,185

11.3 Other than full-time permanent 394 2,034 1,932

11.5 Other personnel compensation 2,651 6,148 5,840

11.8 Special personal services payments 141 0 23,879

11.9 Personnel Compensation (Total) 139,484 150,036 166,836

12.0 Personnel benefits 44,696 40,429 44,331

13.0 Benefits to former personnel 132 206 150

Total Personnel and Compensation Benefits 184,312 190,671 211,317

21.0 Travel and transportation of persons 1,852 1,732 2,875

22.0 Transportation of things 121 241 121

23.1 Rental payments to GSA 26,189 25,214 21,767

23.2 Rental payments to others 866 519 435

23.3 Communication, utilities, and misc charges 7,676 9,580 7,346

24.0 Printing and reproduction 146 399 411

25.1 Advisory and assistance services 15,579 19,302 25,638

25.2 Other services from non-Federal Sources 18,384 17,517 16,013

25.3 Other goods and services from Federal 

Sources 83,708 88,936 58,993

25.4 Operation and maintenance of facilities 2,125 1,041 950

25.6 Medical care 0 2 0

25.7 Operation and maintenance of equipment 2,772 2,100 1,880

26.0 Supplies and materials 2,471 2,763 2,287

31.0 Equipment 1,456 2,769 2,394

32.0 Land and structures 81 1,014 630

42.0 Insurance claims and indemnities 0 50 0

Total Non-Personnel 163,426 173,179 141,740

Subtotal New Appropriated Resources $347,738 $363,850 $353,057 

Budget Activities:

Accounting and Reporting 114,856 141,873 127,511

Collections 38,880 43,884 45,094

Debt Collection 174,634 168,172 151,934

Payments 202,722 212,578 204,000

Retail Securities Services 82,717 77,729 79,266

Wholesale Securities Services 11,603 11,995 13,738

Total Budgetary Resources $625,412 $656,231 $621,543 

FTE 1,996 2,287 2,152
FS - 12

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

THE BUREAU OF THE FISCAL SERVICE

Federal Funds

SALARIES AND EXPENSES

For necessary expenses of operations of the Bureau of the Fiscal

Service, [$363,850,000] $353,057,000; of which not to exceed

$4,210,000, to remain available until September 30, [2018] 2019, 

is for information systems modernization initiatives; and of which

$5,000 shall be available for official reception and representation 

expenses[; and of which not to exceed $19,800,000, to remain 

available until September 30, 2018, is to support the Department's 

activities related to implementation of the Digital Accountability 

and Transparency Act (DATA Act; Public Law 113–101), 

including changes in business processes, workforce, or 

information technology to support high quality, transparent 

Federal spending information]. In addition, $165,000, to be

derived from the Oil Spill Liability Trust Fund to reimburse

administrative and personnel expenses for financial management 

of the Fund, as authorized by section 1012 of Public Law 101–

380.

(Consolidated Appropriations Act, 2016.)

Multi-year funding is not necessary for DATA Act starting in FY 2017.

2C – Permanent, Indefinite Appropriations

Federal Reserve Bank Permanent, Indefinite Appropriation

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

by the Secretary of the Treasury in accordance with 12 U.S.C. 391. Under this account, the

FRBs support fiscal operations, which are unrelated to the administration of the public debt,

and provide banking and financial services on behalf of the Treasury of the United States. 

Specifically, this account supports the accounting and reporting, collections, and payments

programs. These and other programs are vital to the Fiscal Service’s strategic goals, the

National Financial Critical Infrastructure, and the expanding E-Government. Fiscal Service

estimates that the cost of FRB services for FY 2017 will be approximately $529.4 million.

Reimbursements to the Federal Reserve Banks

Public Law 101-509, 104 Stat. 1389, 1394 (1990), established a permanent, indefinite 

appropriation to pay such sums as necessary to reimburse the FRBs for acting as fiscal 

agents. This account was further defined in FY 1992 to solely support those activities 

related to the administration of the public debt. Claims for reimbursements are closely

monitored for compliance with the Instructions for Filing Reimbursement Claims for Fiscal 

Agent Services Provided to the Fiscal Service. Funding for FY 2017 is estimated at 

$138.3 million. Specifically, this account supports the Retail Securities Services and

Wholesale Securities Services budget activities only.
FS - 13

Financial Agent Services Permanent, Indefinite Appropriation

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

financial institutions and obtain banking services by designating financial institutions to 

act/serve as Financial Agents (FA) of the United States. The services support many Fiscal 

Service programs, such as collections, payments, securities and accounting and reporting. 

These and other programs are vital to the Fiscal Service’s strategic goals, the National 

Financial Critical Infrastructure, and the expanding E-Government. The services provided 

by the FAs are authorized under numerous statutes including, but not limited to, 12 U.S.C. 

90 and 265.

In FY 2004, Treasury received a permanent, indefinite appropriation to pay for these services. 

Fiscal Service estimates that the cost of FA services for FY 2017 will be approximately 

$679.5 million, which includes $3 million for Government Sponsored Enterprise - Mortgage 

Backed Securities administrative costs.

Government Losses in Shipment

Public Law 103-329 established a permanent, indefinite appropriation to pay such sums as 

necessary to make payments for the replacement of valuables, or the value thereof, lost, 

destroyed, or damaged in the course of United States Government shipments. The Government 

Losses in Shipment Act was enacted July 8, 1937 to dispense with the necessity for insurance by 

the government against loss or damage to valuables in shipment and for other purposes. The

Act was amended in 1943 to cover losses resulting from the redemption of savings bonds (for 

example, stolen bonds, which were fraudulently negotiated even though the paying agent 

followed identification guidelines established by the Treasury). All authority of the Treasury 

under the Act has been delegated to the Commissioner of the Fiscal Service. In FY 2017, the 

funding estimated to support payments for the replacement of valuables is $1.1 million.

2.3– Permanent, Indefinite Appropriations Table

(Dollars in Thousands)

Permanent, Indefinite Appropriation 2015

Actuals

2016 

Enacted

2017 

Requested

Federal Reserve Bank 1

$ 477,091 $ 524,155 $ 529,397

Reimbursements to the Federal Reserve Banks $ 123,658 $ 136,945 $ 138,314

Financial Agent Services 1 , 2

$ 642,572 $ 716,230 $ 679,465

Government Losses in Shipment $ 1,221 $ 1,098 $ 1,123

1. Approximately $75M is reimbursed from other government agencies and deposited into the General Fund each year. 2. FY2015, FY2016, and FY2017 include costs for the Government Sponsored Enterprise - Mortgage Backed Securities

administrative costs of $3M per year.
FS - 14

2D – Legislative Proposals

New for FY 2017 President’s Budget

1. Option to access the National Directory of New Hire Data via the Do Not Pay Portal

The 2017 Budget includes a package of proposals to allow additional programs and agencies 

authority to access the National Directory of New Hire Data (NDNH), a federal database of 

employment and unemployment insurance information administered by the Office of Child 

Support Enforcement within the Department of Health and Human Services (HHS). Access 

to this data is tightly controlled by statute, and HHS implements strong privacy, 

confidentiality, and security protections to protect the data from unauthorized use or 

disclosure. Currently several programs are successfully using this data for program integrity, 

implementation, and research purposes, and the use of that data has led to important insights 

and program integrity gains. The Budget proposes to build on this strong history of data 

stewardship and protection to allow additional programs and agencies to access this valuable 

data to learn what works and improve program implementation, while continuing to protect 

the privacy, security and confidentiality of that data. 

Included in this package is a request to allow programs that are statutorily authorized in the 

Social Security Act to access NDNH data for program integrity purposes to do so via the Do 

Not Pay (DNP) initiative’s designated centralized portal at the Department of the Treasury. 

The Improper Payments Elimination and Recovery Improvement Act codified the 

Administration’s Do Not Pay initiative by specifying six Federal data sets to help prevent and 

identify improper payments. OMB designated Treasury to host a centralized portal, the DNP 

Business Center, for agencies to access, as authorized, multiple sources of data to aid in 

program integrity related efforts. This proposal includes the following sub-components:

• The Administration for Children and Families’ Office of Child Support Enforcement 

(OCSE) would retain control over the NDNH data through an MOU with Treasury 

and each individual agency that clearly defines how Treasury (and each agency) may 

use the data, and further provides rules for protecting and correcting the data and for 

its retention and destruction;

• OCSE would still apply its robust privacy and security review procedures before 

granting any agency access to data;

• DNP would only access and disclose the minimum relevant NDNH data to agency 

programs that are authorized to access the data in statute and who have an MOU with 

OCSE to access the data;

• Agencies would maintain the option to access NDNH via DNP or directly through 

OCSE;

• OCSE would be reimbursed by Treasury and/or the accessing agency for the costs 

incurred by providing the NDNH data to the agency, regardless of the mechanism 

used; and

• Since the NDNH data are not verified, agencies accessing NDNH data via Treasury's 

DNP portal will ensure that the data are not used as the basis for any adverse 

determination, including denial of benefits or overpayment determinations in 

federally-assisted programs, and will be required to conduct independent verification 

of information prior to taking any adverse action against any individual without 

further investigation. 
FS - 15

The proposal also includes penalties for unauthorized access, use, disclosure, or re-disclosure 

of personally identifiable information; clear specification of each authorized purpose; a 

requirement that the minimum data necessary be accessed; and satisfies the Administration’s 

criteria for when authority to access NDNH data should be considered.

The package also requires HHS to review each agency’s security position before it allows

that agency to access the data, prohibits HHS from granting access to the data for any 

purpose not authorized in statute, and requires HHS to generate a public reporting on the use 

of NDNH data. Please see Budget Chapter, A Government of the Future, and HHS’s 

Administration for Children and Families Congressional Justification for additional 

information on the full package of NDNH access proposals and the criteria for considering 

access to NDNH data.

Re-proposed from FY 2016 President’s Budget

1. Increase delinquent state income tax debt collections by allowing offset of federal 

income tax refunds to collect delinquent state income taxes for out-of-state residents. 

Estimated collections: $2.3 billion in state taxes over 10 years (no federal revenue)

Under current law, the Bureau of the Fiscal Service may offset federal tax refunds to collect 

delinquent state income tax obligations but only if the delinquent taxpayer resides in the state 

collecting the tax. This proposal would amend the Internal Revenue Code (IRC) section 

6402(e) to allow the Fiscal Service to offset federal income tax refunds to collect delinquent 

state tax obligations regardless of where the debtor resides. 

2. Reduce costs for states collecting delinquent income tax obligations by allowing states to 

send notices of intent to offset federal tax refunds to collect state income tax obligations 

by regular first-class mail, rather than by certified mail. Estimated savings: 

$202.4 million over 10 years (no federal revenue)

Under current law, the U.S. Department of the Treasury, Bureau of the Fiscal Service, may 

offset federal tax refunds to collect delinquent state income tax obligations only after the 

state sends the delinquent debtor a notice by certified mail. The statutory notice 

requirements for federal tax refund offset for all other types of debts, including federal nontax, child support, and state unemployment insurance compensation debts, are silent as to the 

notice delivery method. Federal tax refund offset regulations for all debts other than state 

income tax obligations require federal and state creditor agencies to send notices by regular 

first class mail. Similarly, notice requirements for other debt collection actions, including 

administrative wage garnishment, do not require delivery by certified mail. This proposal 

would amend IRC section 6402(e) to allow the Fiscal Service to amend its regulations to 

permit states to send notices for state income tax obligations by first class mail, saving states 

certified mail costs and standardizing notice procedures across debt types.

3. Increase delinquent federal non-tax debt collections by authorizing administrative bank 

garnishment for non-tax debts of commercial entities. Estimated Collections: 

$320 million in commercial debts over 10 years 
FS - 16

This proposal would allow federal agencies to collect non-tax debt by garnishing the bank 

and other financial institution accounts of delinquent commercial debtors without a court 

order and after providing full administrative due process. The Budget proposes to direct the 

Secretary of the Treasury to issue government-wide regulations implementing the authority 

of bank garnishment for non-tax debts of commercial entities. Bank garnishment rules under 

this authority would be subject to Treasury’s rule (31 CFR 212) protecting exempt benefit 

payments from garnishment. To reach income of commercial entities and other non-wage 

income and funds available to commercial debtors owing delinquent non-tax obligations to 

the United States, this proposal would authorize agencies to issue garnishment orders to 

financial institutions without a court order. Agencies would be required to provide debtors 

with appropriate due process and other protections to ensure that debtors have had the 

opportunity to verify and contest the debts and/or enter into repayment agreements to avoid 

issuance of an order. The Internal Revenue Service currently has similar authority to collect 

federal tax debts. The Debt Collection Improvement Act of 1996 authorized federal agencies 

to collect delinquent non-tax debt by garnishing the wages of debtors without the need to first 

obtain a court order. This proposal would reach assets of entities whose income is not 

derived from wages. Since July 2001, the Bureau of the Fiscal Service has collected $279.3 

million in garnished wages (as of November 30, 2015) on behalf of federal agencies. 

4. Increase and streamline recovery of unclaimed assets owed to the United States by 

authorizing Treasury to locate and recover assets of the United States and to retain a 

portion of amounts collected to pay for the costs of recovery. Estimated recoveries: 

$85 million over 10 years 

States and other entities hold assets in the name of the United States or in the name of 

departments, agencies and other subdivisions of the Federal Government. Many agencies are 

not recovering these assets due to a lack of expertise and/or funding. Under current 

authority, Treasury collects delinquent debts owed to the United States and retains a portion 

of collections, which is the sole source of funding for Treasury’s debt collection operations. 

While unclaimed federal assets are generally not considered to be delinquent debts, 

Treasury’s debt collection operations personnel have the skills and training to recover these 

assets. The Budget proposes to amend 31 U.S.C. 3718 to authorize Treasury to use its 

resources to recover assets of the United States. 
FS - 17

Section 3 – Budget and Performance Plan

3A – Accounting and Reporting

($114,167,000 from direct appropriations, and $13,344,000 from reimbursable resources): 

The Accounting and Reporting activity consists of three programs: Government Agency 

Investment Services, Government-wide Accounting and Reporting, and Summary Debt 

Accounting. In prior budget submissions, these three programs were separate budget activities. 

Fiscal Service has combined the three programs into one budget activity due to their 

commonalities. Additionally, all three support Treasury Strategic Goal Three to “Fairly and 

effectively reform and modernize the federal financial management, accounting and tax 

systems.”

The Government Agency Investment Services (GAIS) program issues, services, and redeems

Government Account Series (GAS) securities for federal agencies that have legislative authority 

to invest; administers State and Local Government Series (SLGS) securities and offers a flexible 

investment alternative for state and local governments to refinance their outstanding tax-exempt 

debt; and represents Treasury’s role in the federal loan program including accounting for and 

reporting on loans made to other federal agencies with legislative authority to borrow. 

The Government-wide Accounting (GWA) program produces timely and accurate financial 

information that contributes to the improved quality of financial decisions made by operating and 

overseeing the government’s Central Accounting and Reporting System. The GWA program

also works with FPAs 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. Fiscal Service collects, analyzes, and publishes 

government-wide financial information that is used by the Federal Government to establish fiscal 

and debt management policies and 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).

Fiscal Service is taking significant steps to address the material weaknesses found in the 

compilation process of the FR that include:

• Requesting federal entities to provide root cause analysis and corrective action plans for any 

recurring intragovernmental differences;

• Expanding feedback by providing scorecards to additional federal entities to ensure coverage 

over the material intragovernmental differences;

• Collecting data from all identified reporting entities and/or demonstrating their data is 

immaterial;

• Ensuring engagement with federal entities and that adequate support is gathered for all 

journal vouchers;

• Ensuring appropriate information regarding litigation is included in the Financial Report;

• Implementing a process to work in a more collaborative manner with key federal entity 

personnel in the preparation of complex areas in the Financial Report;
FS - 18

• Providing reasonable assurance that new or substantially revised federal accounting standards 

are consistently implemented among federal entities;

• Determining the significance of data contained in the Financial Report that does not have 

audit assurance;

• Performing an analysis of the variances for all financial statement lines and disclosures;

• Identifying and reporting all items needed to prepare the Budget Statements.

The Summary Debt Accounting (SDA) program reports daily on the balances and composition 

of the public debt, publishes the Monthly Statement of the Public Debt, and issues the annual, 

audited Schedules of Federal Debt (Schedules). The Schedules report on the single largest 

liability in Treasury’s Agency Financial Report and received an unmodified opinion for the past 

18 years.

Description of Performance:

The GAIS program strives to provide high-quality customer service, reliable transaction 

processing, and accurate and timely payment distribution. To aid in measuring performance, the 

organization conducted an annual customer survey with the intent to increase the percentage of 

customers rating GAIS as "Excellent." Fiscal Service’s FY 2016 target is 59 percent; however 

this measure will be discontinued in FY 2017 as Fiscal Service integrated all individual program 

customer service surveys into a single annual survey. A new efficiency measure to ensure timely 

and accurate reporting of investment and borrowing activity will be used to measure the success 

of the GAIS program. The FY 2017 reporting target for the new measure is 98 percent.

In FY 2015, Fiscal Service established a target of 100 percent for the Percentage of Governmentwide Accounting Reports, which include the Daily Treasury Statement (DTS), Monthly Treasury 

Statement (MTS), and consolidated Financial Report, issued on time measure. The timeliness 

standard of each report is as follows: 

• DTS target to be published by 4:00 pm (Eastern Time) each business day 

• MTS target to be published by the eighth business day each month 

• Consolidated Financial Report must be published annually 

Fiscal Service continues to achieve its targets by maintaining the established process of 

validating and reconciling data with reporting sources such as FPAs and various electronic 

deposit and payment applications. The bureau will continue modernization efforts to ensure the 

timeliness of these reports and anticipates it will achieve the 100 percent target for FY 2016 and 

FY 2017.

To transform SDA, the program created a long-term goal of restructuring or eliminating a 

percentage of unnecessary and/or duplicative business processes each fiscal year. SDA has now 

restructured or, where appropriate, eliminated the majority of its business processes; therefore 

this measure is no longer beneficial. Beginning in FY 2017, SDA will replace this measure with 

Percentage of Summary Debt Accounting reports submitted timely, with a target of 100 percent. 

SDA relies on cost per transaction to help manage the efficiency of the program. SDA 

transactions consist of activity related to the reporting of balances and the composition of the 

public debt with the average transaction totaling over a billion dollars. The actual FY 2015 cost 
FS - 19

is $19.26, which is above the target of $17.53 due to changes in the Fiscal Service cost 

accounting methodology. As a result, the target cost per item for FY 2016 and FY 2017 is 

currently $19.26; however this will be revised in the future.

3.1.1 –Accounting and Reporting Budget and Performance Plan

Dollars in Thousands

Accounting and Reporting Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $100,105 $94,044 $88,629 $86,628 $102,661 $104,600 $125,752 $114,167 

 Reimbursable Resources $4,967 $7,197 $7,416 $6,517 $6,699 $10,256 $16,121 $13,344 

Budget Activity Total $105,072 $101,241 $96,045 $93,145 $109,360 $114,856 $141,873 $127,511 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 4B 

for additional information.

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Cost Per Government 

Agency Investment 

Services Transaction ($) 

82.08 84.67 33.48 35.2 35.99 56.38 38.09 56.38 56.38

Collect and disburse 

interest/principal 

payment amounts for 

Government Agency 

Investment Services 

investments/borrowings 

timely and accurately 

N/A N/A N/A N/A N/A N/A N/A N/A 98.0

Percent of Respondents 

Selecting the Highest 

Rating of Customer 

Satisfaction with 

Government Agency 

Investment Services (%) 

55 60 60 61 57 52 58 59 DISC

Percentage of 

Government-Wide 

Accounting Reports 

Issued Timely (Includes 

Daily Treasury 

Statement - Table 1 and 

Monthly Treasury 

Statement - Table 1)

100.0 100.0 99.86 100.0 100.0 99.5 100.0 100.0 100.0

Cost Per Summary Debt 

Accounting Transaction 

($) 

11.28 14.8 22.47 19.86 16.36 19.26 17.53 19.26 19.26

Percentage of Summary 

Debt Accounting reports 

submitted timely and 

accurately

N/A N/A N/A N/A N/A N/A N/A N/A 100

Percent of Summary 

Debt Accounting 

Business Processes 

Restructured or 

Eliminated

6 9.5 6 21.4 21.4 15 15 20 DISC

Key: DISC - Discontinued 
FS - 20

3B – Collections

($40,225,000 from direct appropriations, and $4,869,000 from reimbursable resources): 

The Collections program supports Treasury Strategic Goal Three to “Fairly and effectively 

reform and modernize the federal financial management, accounting and tax systems” which 

includes the objective “to improve the disbursement and collection of federal funds and reduce 

improper payments made by the U.S. Government.” The Fiscal Service manages the collection 

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

repayments, fines, and proceeds from leases. In addition, the Fiscal Service establishes and 

implements collection policies, regulations, standards, and procedures for the Federal 

Government. These efforts also support the following Fiscal Service strategic goals:

• Serve as a catalyst for effective government through initiative and innovation

• Deliver exceptional programs and services

• Promote data transparency and usefulness as a public good

The Fiscal Service continues to promote the use of electronic systems in the collections process 

and to assist agencies in converting collections from paper to electronic media with programs 

such as:

Electronic Federal Tax Payment System (EFTPS): The Fiscal Service communicates the 

benefits of EFTPS – accuracy, security, simplicity, and flexibility – to financial institutions, 

small businesses, and tax practitioners. The goal is to continue to require businesses to pay 

their federal taxes electronically and focus efforts on increasing the number of individuals 

that pay taxes electronically. 

Pay.gov: Pay.gov is a system allowing individuals and businesses to make non-tax payments 

to federal agencies over the internet. Recent developments have focused on a mobilefriendly user interface, incorporation of digital wallet providers PayPal and Dwolla, and 

enhanced functionality in the areas of electronic billing and electronic forms. 

Check Conversion and Truncation: The Fiscal Service is employing strategies to reduce the 

number of paper checks it receives and to ensure that those it does receive are converted for 

electronic processing. The Over the Counter Channel Application (OTCnet) and Electronic 

Check Processing (ECP) are programs that provide a complete electronic record of all check 

images and related financial data that is accessible by agencies and eliminate the need to 

photocopy checks, safeguard checks, or process paper. 

Description of Performance:

The measure, Percentage Collected Electronically of Total Dollar Amount of Federal 

Government Receipts, reflects the dollar value of collections received (settled) electronically and 

supports Treasury Strategic Goal Three to “Fairly and effectively reform and modernize the 

federal financial management, accounting and tax systems.” As it is quicker and more costefficient to process electronic transactions, this measure gauges the efficiency of collecting funds 

for the Federal Government. In FY 2016 and FY 2017, Fiscal Service will continue its agency 

outreach and offer new products such as mobile applications and online bill presentment while 

expanding the use of digital wallets. Fiscal Service expects to maintain an annual electronic 

collections rate of at least 98 percent through FY 2017. 
FS - 21

3.1.2 –Collections Budget and Performance Plan

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage 

Collected 

Electronically of 

Total Dollar Amount 

of Federal 

Government 

Receipts 

85 96 97 97 98 98 98 98 98

Key: DISC - Discontinued

3C – Debt Collection

($0 from direct appropriations, and $151,934,000 from reimbursable resources): 

The Debt Collection program supports Treasury Strategic Goal Three to “Fairly and effectively 

reform and modernize the federal financial management, accounting and tax systems” which 

includes the objective “to improve the disbursement and collection of federal funds and reduce

improper payments made by the U.S. Government.” Fiscal Service collects delinquent

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

operational services to federal program agencies and states pursuant to the Debt Collection

Improvement Act of 1996 (DCIA) and related legislation. Fiscal Service uses two debt 

collection programs: Treasury Offset Program (TOP) and Cross-Servicing.

Fiscal Service implemented the new offset system, referred to as TOP Next Generation, on 

November 8, 2014. The new TOP system provides the ability to handle increasingly larger

volumes of debt and payment types, process new payment types, increase payment processing

throughput to meet future needs, and meet essential stakeholder needs. In addition, Fiscal 

Service continues to expand the offset program by including additional debts owed to states as 

well as payments made by states. In an effort to increase efficiency, the Debt Collection program

conducted random controlled trials to determine cost effective improvements to correspondence;

optimized the call center; expanded the use of highly productive debt collection approaches, such 

as wage garnishment; and continued to transition to a data-driven, analytical approach.

Additionally, Fiscal Service acquired a new Cross-Servicing collection system (Cross-Servicing 

Next Generation [CSNG]), a commercial off the shelf product, which will enable optimized, 

cost-effective collection, and resolution approaches. CSNG will permit greater automation, 

improved results and increased employee engagement. The implementation of this product and 

all its business upgrades will take place during the second quarter of FY 2017. 

Dollars in Thousands

Collections Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Request Request

 Appropriated Resources $21,911 $22,624 $21,166 $20,851 $30,469 $34,982 $38,798 $40,225 

 Reimbursable Resources $258 $1,419 $1,419 $176 $0 $3,898 $5,086 $4,869 

Budget Activity Total $22,169 $24,043 $22,585 $21,027 $30,469 $38,880 $43,884 $45,094 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 

4B for additional information.
FS - 22

Also, in close partnership with the Department of Education, the Cross-Servicing program is 

conducting a 24-month pilot program to service a total of 12,000 student loan debts. This 

began in February 2015 and will end in January 2017. Furthermore, Fiscal Service has begun 

to help agencies implement Section 5 of the DATA Act, which amends the DCIA to require 

agencies to refer to TOP eligible debt at 120 days delinquent, rather than 180 days delinquent, 

and requires Treasury to report non-compliance to Congress. Fiscal Service is working with 

OMB and agencies on the new requirements and tools developed for tracking compliance, as 

required.

Description of Performance:

The Fiscal Service’s goals for FY 2016 and FY 2017 are to collect $7.36 billion and 

$7.56 billion, respectively, in delinquent debt by expanding the use of the administrative wage 

garnishment collection tool, enhancing the use of analytics, and proposing legislative changes 

such as authorizing Treasury to offset federal income tax refunds to collect delinquent state tax 

obligations regardless of where the debtor resides. 

3.1.3 – Debt Collection Budget and Performance Plan

Dollars in Thousands

Debt Collection Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Reimbursable 

Resources $110,567 $130,474 $133,257 $153,667 $139,377 $174,634 $168,172 $151,934 

Budget Activity Total $110,567 $130,474 $133,257 $153,667 $139,377 $174,634 $168,172 $151,934 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 

4B for additional information.

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Amount of Delinquent 

Debt Collected 

Through All Available 

Tools ($ billions) 

5.45 6.17 6.17 7.02 6.91 7.28 7.12 7.36 7.56

Key: DISC - Discontinued

3D – Payments

($115,141,000 from direct appropriations, and $88,859,000 from reimbursable resources): 

The Payments budget activity supports Treasury’s Strategic Goal Three to “Fairly and effectively 

reform and modernize the federal financial management, accounting and tax systems” which 

includes the strategic objective “to improve the disbursement and collection of federal funds and 

reduce improper payments made by the U.S. Government.” Major payments include: Social 

Security Benefits, Supplemental Security Income, Federal Pension Benefits, Veterans’ 

Compensation and Pension, Railroad Retirement Pensions, and tax refunds.

Through the Payments budget activity, Fiscal Service is also responsible for controlling and 

providing financial integrity to the payment 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, as well as claims 

and reclamations of Electronic Funds Transfer (EFT) payments. Fiscal Service also collects 
FS - 23

monies from those parties liable for fraudulent or otherwise improper negotiation of government 

checks.

In addition, Fiscal Service actively encourages recipients to convert to electronic payment 

methods through a nationwide public education campaign, called Go Direct® as well as offering 

the unbanked and those beneficiaries who prefer a prepaid debit card the Direct Express® card, 

which enables benefit payments to be automatically deposited into the recipient’s card account 

on the payment date. As a result, 98 percent of benefit payments were disbursed electronically in 

FY 2015. Electronic payments provide timely, accurate, and efficient disbursement of Federal 

Government payments; eliminate the costs associated with postage and the re-issuance of lost or 

stolen checks; and help protect against fraud and identity theft.

The Fiscal Service 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): SVCs streamline financial requirements during initial entry 

into training of military personnel, remove physical cash from government locations 

overseas as well as from ships at sea, and provide a safe and secure means for 

government personnel stationed overseas to access and safeguard their personal funds in 

locations with limited or no connectivity. SVCs effectively reduce the high costs of 

securing, transporting, and accounting for physical currency. The program also provides 

a safe and convenient payment method for government, military, and support personnel. 

Currently, SVCs replace cash, checks, and coins at over 60 military bases and 

installations in 14 countries (including the U.S.) and on 130 Naval ships. Meeting this 

global demand necessitates the deployment of over 8,700 pieces of equipment including 

kiosks (cashless ATMs), point-of-sale terminals, laptops, and other related hardware. 

From 1997 through June 2015, over 55.7 million EFT transactions with a dollar value in 

excess of $7.7 billion were processed via the SVC programs. 

Invoice Processing Platform (IPP): IPP is a government-wide, secure, web-based 

electronic invoice exchange network connecting federal agencies and their vendors. IPP 

promotes the efficient use of resources by enabling federal agencies to receive invoices 

electronically from their vendors, transforming existing paper-based invoice processes 

into a streamlined electronic process that integrates with existing agency core financial 

systems. IPP’s single point of entry allows vendors to invoice multiple IPP enrolled 

agencies via either online or batch invoice submission. Vendors can view and receive 

notification of payments (including debt offsets) associated to their invoices via IPP. In 

addition, IPP supports the Financial Innovation and Transformation initiative to develop a 

standard for electronic invoicing government-wide.

Payment Application Modernization (PAM): The PAM investment supports a critical 

Fiscal Service function, which is the production and delivery of over one billion federal 

payments on behalf of more than 200 agencies with a single application. PAM replaced

30 existing legacy Fiscal Service payment applications that generated check, Automated 

Clearing House (ACH), International ACH Transaction (IAT), and wire transfer 

payments. PAM is modernizing the distribution of domestic payments and automatically 
FS - 24

interfaces with core Treasury systems such as the Do Not Pay Business Center (DNP) 

and the Treasury Offset Program (TOP) in order to prevent improper payments and 

collect delinquent debt owed to the Federal Government. PAM also allows FPAs to 

comply with the Government-wide Accounting mandate to submit valid component 

Treasury Account Symbol/Business Event Type Code (TAS/BETC) information on all 

payments at the time of payment origination.

Post Payment System (PPS) Consolidation: In support of Treasury’s Strategic Goal to 

“fairly and effectively reform and modernize federal financial management, accounting, 

and tax systems,” Fiscal Service has invested in the consolidation of several post payment 

systems into a single, centralized system. This investment will unify disparate business 

processes, eliminate data redundancy across systems, and provide a customer portal to be 

leveraged by federal program agencies and financial institutions for post-payment 

processing and reporting. By consolidating all post payment processing into one 

comprehensive application, Fiscal Service will be able to decommission these five legacy 

systems: Treasury Check Information System (TCIS); Payments, Claims and Enhanced 

Reconciliation (PACER); Treasury Receivable, Accounting and Collection System 

(TRACS); Teletrace; and TOP Control System (TCS). This will result in PPS, as the 

System of Record, being the authoritative data source for all payment and post payment 

data. 

PPS will include functionality to support: payment matching and verification, returns 

and cancellations, inquiries, calls and claims, funds receipt/funds management, 

reclamations, reconciliation, fraud detection, integrity analysis, reporting and integrated 

customer engagement. PPS will provide Fiscal Service and post-payment stakeholders 

with enhanced, reconciliation activities, improved information exchange, reduced 

reliance on paper, and more robust fraud detection. In addition, it will utilize 

standardized Common Government-wide Accounting Classification (CGAC) reporting 

structure and leverage commercial off-the-shelf software solutions, when appropriate, to 

provide common, best practice functionality and proven implementation methodologies. 

The Fiscal Service’s DNP provides a single, centralized point of access to timely, accurate, and 

actionable data for informed decision making and can help identify, prevent, detect, and recover 

improper payments throughout the payment life cycle while protecting individuals’ privacy. In 

FY 2015, DNP completed a major system release that provided real-time matching at the time of 

payment, replacing post-payment matching, resulting in providing agencies and programs with 

more timely access to potential improper payments that may need further investigation. It also 

provided more actionable results due to the replacement of a public data source with a restricted 

data source, thereby vastly reducing the number of false positive matches, and by providing 

additional filter functionalities that account for agency business rules thus further highlighting

potential improper payments. In addition, DNP has applied advanced analytics to produce a 

standard Agency Insight Report to provide a high-level overview of key findings and insights 

derived from the agency’s payment data. This report captures four key areas: 1) payment data 

quality assessment; 2) anomaly detection; 3) pattern and trend analysis; and 4) advanced 

matching techniques. This report also identifies opportunities for DNP to assist agencies in 

reducing or eliminating payment errors, waste, and abuse within its payment process.
FS - 25

In FY 2016, DNP will deploy a robust state-of-the-art analytics tool to support advanced 

analytics methodologies to include not only descriptive and diagnostic analytics, but predictive 

and prescriptive analytics as well. DNP will continue offering Business Process Mapping 

services in order to improve customer agencies’ internal controls and to increase efficiency in

identifying improper payments. Finally, DNP will continue focusing its engagement efforts on 

targeted high-risk improper payment issues within specific agencies.

In FY 2017, DNP will continue pursuing valuable data sources to provide timely, accurate, and 

actionable results by enhancing the DNP portal through user-defined feedback. In addition, DNP

analytics will mature to include the creation and execution of predictive models, which will 

provide customer agencies with additional tools to identify potential improper payments before 

payment in addition to identification at the time of payment or post-payment.

Description of Performance:

The measure Percentage of Treasury Payments and Associated Information Made Electronically

supports Treasury Strategic Goal Three to “Fairly and effectively reform and modernize the 

federal financial management, accounting and tax systems.” Due to the continued success of the 

Go Direct® and Direct Express® programs and implementation of the All Electronic Treasury 

priority, Fiscal Service issued 98 percent of its benefit payments and 94.8 percent of its total 

payments via EFT in FY 2015. Fiscal Service expects to achieve its targets in the outyears by 

expanding electronic conversion efforts to additional benefit agencies and payment types, such 

as other vendor miscellaneous payments and federal tax refunds.

3.1.4 – Payments Budget and Performance Plan

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of Treasury 

Payments and 

Associated Information 

Made Electronically 

82.0 84.3 88.0 92.5 94.4 94.7 95.00 95.0 95.0

Key: DISC - Discontinued 

3E – Retail Securities Services

($71,186,000 from direct appropriations, and $8,080,000 from reimbursable resources): 

Fiscal Service’s Retail Securities Services (RSS) program offers simple, safe, and affordable 

Treasury investment choices that enable Americans to invest and save for their future. The RSS 

program continues to examine the saving and investing needs of customers by researching new 

Treasury retail securities and services that will promote savings and appeal to the American 

Dollars in Thousands

Payments Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $150,395 $141,358 $142,265 $130,570 $114,650 $120,769 $118,454 $115,141 

 Reimbursable Resources $129,262 $142,340 $131,165 $102,401 $78,625 $81,953 $94,124 $88,859

Budget Activity Total $279,657 $283,698 $273,430 $232,971 $193,275 $202,722 $212,578 $204,000 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 4B 

for additional information.
FS - 26

public. In December 2014, myRA, a new retirement savings account that follows Roth 

Individual Retirement Account rules was launched in support of the President’s initiative to help 

millions of Americans start saving for retirement.

The RSS program encourages people to buy securities, access their accounts, and conduct 

transactions electronically. The program plans to implement a new securities investment 

management system that will enhance capabilities for customers to purchase, reinvest, redeem, 

transfer, and hold securities electronically. Investors will be able to learn about retail products 

and services, make informed decisions about buying Treasury securities, and manage their 

Treasury investments more efficiently. Over the next year, RSS will develop the web interface, 

as well as design and build the core infrastructure. In FY 2017, the program will deploy the core 

framework and select product content for the early releases of the new system.

The program has recently implemented two phases of the Treasury Retail E-Services (TRES) 

initiative. The virtual case file environment includes automated workflows, digitized customer 

correspondence, and fewer manual paper processes. A virtual contact center has also been 

deployed using shared telephony between two physical customer service sites. It improves 

customer service by providing a single toll free number, enhanced call menu options, and 

improved call routing. In the next year, the program will continue to improve the customer 

experience by automating notifications of case status.

In FY 2016, Fiscal Service will complete a review of the RSS program to develop the new 

mission and long-term vision, identify the future customer base, design a new savings product(s),

identify the most effective channels for interacting with customers and servicing new products,

and create an operating model and implementation roadmap.

Description of Performance:

The Cost per TreasuryDirect Online Transaction and Cost per TreasuryDirect Assisted 

Transaction measures will be discontinued in FY 2017 to allow Fiscal Service to measure 

performance for securities transactions regardless of the system used and for the incorporation of 

future offerings. In the interim, the FY 2015 performance and FY 2016 targets are:

• The internet-based TreasuryDirect system promotes savings by allowing investors to set 

up accounts, purchase electronic securities, and manage their holdings without customer 

assistance. The Cost per TreasuryDirect Online Transaction in FY 2015 was $1.49, 

below the target of $1.89 due to changes in the Fiscal Service cost accounting 

methodology. As a result, the target cost per item for FY 2016 is currently $1.49. 

• The Cost per TreasuryDirect Assisted Transaction demonstrates Fiscal Service’s 

efficiency in responding to customer inquiries when assistance from a customer service 

representative is necessary. Representatives handle phone and email inquiries, offline 

authentications, paper savings bond conversions, changes in bank information, and 

transactions requiring legal evidence. The Cost per TreasuryDirect Assisted Transaction

in FY 2015 was $9.55, above the target of $8.08 due to changes in the Fiscal Service cost 

accounting methodology. As a result, the target cost per item for FY 2016 is currently 

$9.55. 
FS - 27

Fiscal Service will add new performance measures in FY 2017 to support Treasury’s goal of 

promoting savings and the bureau’s goal to serve as a catalyst for effective government through 

initiative and innovation. The Cost per Electronic Transaction and Cost per Customer Assisted 

Transaction measures will demonstrate investor self-service and customer service efficiency, 

respectively, for all securities currently offered as well as future offerings. Fiscal Service plans 

to establish targets for each measure in FY 2016 and to meet those targets by maintaining a 

skilled customer service workforce and streamlining operations to effectively manage costs.

3.1.5 – Retail Securities Services Budget and Performance Plan

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Cost Per Electronic 

Transaction ($) N/A N/A N/A N/A N/A N/A N/A N/A B

Cost Per Customer 

Assisted Transaction ($) N/A N/A N/A N/A N/A N/A N/A N/A B

Cost Per TreasuryDirect 

Assisted Transaction ($) 8.23 3 4.58 7.3 7.18 9.55 8.08 9.55 DISC

Cost Per TreasuryDirect 

Online Transaction ($) 6.12 3.64 2.26 1.72 1.84 1.49 1.89 1.49 DISC

Increase the Number of 

Customers Who Buy 

Treasury Retail Securities 

Electronically

N/A 144,997 301,737 269,180 222,790 193,120 185,000 185,000 DISC

Percentage of Retail 

Customer Service 

Transactions Completed 

within 5 Business Days 

(%) 

92.7 73.1 75.7 74.5 89.7 83.2 88.0 88.0 DISC

Key: DISC - Discontinued 

3F – Wholesale Securities Services

($12,338,000 from direct appropriations, and $1,400,000 from reimbursable resources): 

The Wholesale Securities Services (WSS) program supports Treasury Strategic Goal One to 

“Promote domestic economic growth and stability while continuing reforms of the financial 

system” which includes the objective “to promote savings and increased access to credit and 

affordable housing options.” WSS is responsible for the announcement, auction, issuance, and 

settlement of marketable Treasury bills, notes, bonds, Treasury Inflation-Protected Securities and 

Floating Rate Notes. The program also oversees the portion of the federal infrastructure that 

Dollars in Thousands

Retail Securities Services Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Enacted Request

 Appropriated Resources $139,109 $135,337 $116,260 $110,876 $95,249 $76,711 $70,038 $71,186 

 Reimbursable Resources $15,393 $15,393 $17,166 $16,841 $17,400 $6,006 $7,691 $8,080 

Budget Activity Total $154,502 $150,730 $133,426 $127,717 $112,649 $82,717 $77,729 $79,266 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 4B 

for additional information.
FS - 28

provides for the transfer, custody, and redemption of all Treasury marketable securities that are 

purchased mostly by commercial market participants.

The auction program supports the financial critical infrastructure and is a mission essential 

function for Treasury that enables the Federal Government to finance operations. WSS ensures 

that communications, systems, processes, and contingency plans provide for high-level 

performance and business continuity for wholesale auction operations.

The auction system, Treasury Automated Auction Processing System (TAAPS), currently resides 

in an aging technical infrastructure. In an effort to ensure Treasury’s mission essential function, 

the program has started a multi-year effort to stabilize, modernize, and migrate the system to a 

new technical platform by FY 2017. The program has also begun another multi-year initiative to 

modernize TAAPS’ software components and rewrite the application by FY 2019.

Description of Performance:

Fiscal Service strives to efficiently deliver its debt financing operations, including auctions and 

buybacks, at the lowest possible cost. The Cost per Debt Financing Operation in FY 2015 was 

$174,998, above the target of $165,339, principally as a result of the migration of TAAPS to a 

new technical infrastructure. Also impacting this measure is the change in the Fiscal Service 

cost accounting methodology. As a result, the target cost per item for FY 2016 is currently 

$174,998. This measure will be discontinued in FY 2017 as Fiscal Service assesses how to better 

measure operational efficiency of debt operations given that the number of auctions is outside the 

control of the bureau. Fiscal Service plans to implement a new efficiency measure in FY 2018.

The accurate and timely release of auction results, with an emphasis on accuracy, is critical to the 

success of the WSS program. An emphasis on accuracy ensures preservation of public 

confidence in Treasury securities and stability of the financial market. Therefore, in FY 2015, 

Fiscal Service modified its performance measure from Percent of Auction Results Released in 

Two Minutes +/- 30 Seconds to Percent of Auction Results Released Accurately, with a target of 

100 percent. Released accurately is defined as auction results released to the public without any 

subsequent revisions. In the event auction results require adjustment after official release, a 

press release will be issued explaining any changes. In such a case, the results of that auction 

will not be counted as released accurately for purposes of this performance measure. Fiscal 

Service anticipates meeting its target through ongoing business process reviews and regularly 

scheduled contingency planning and mock auction exercises.
FS - 29

3.1.6 – Wholesale Securities Services Budget and Performance Plan

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Cost Per Debt Financing 

Operation ($) 162,378 157,284 159,449 141,115 137,888 174,998 165,339 165,716 DISC

Percent of Auction 

Results Released 

Accurately (%) 

100.0 100.0 100.0 99.6 99.3 99.6 100.0 100.0 100.0

Key: DISC - Discontinued

Dollars in Thousands

Wholesale Securities Services Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actuals Actuals Actuals Actuals Actuals Actuals Enacted Request

 Appropriated Resources $24,438 $24,058 $23,120 $22,092 $12,840 $10,676 $10,808 $12,338 

 Reimbursable 

Resources $2,821 $2,821 $3,051 $3,000 $2,346 $927 $1,187 $1,400 

Budget Activity Total $27,259 $26,879 $26,171 $25,092 $15,186 $11,603 $11,995 $13,738 

Note: Fiscal Service revised the budget activities and reporting to reflect the consolidated bureau activities. Please see Section 

4B for additional information.
FS - 30

Section 4 – Supplemental Information

4A – Summary of Capital Investments

Fiscal Service leads the way for responsible, effective government through commitment to 

cutting-edge technologies, service, efficient operations, sharing of best practices, and openness to 

change in order to meet the operating needs of the Federal Government. Fiscal Service 

systematically analyzes the demand for its services, considers effective methods for delivery, and 

identifies the broad asset implications through sound governance and investment management.

Effective Investment Governance

The Fiscal Service Governance and Capital Planning and Investment Control programs ensure 

the selection/re-selection, comparison, and prioritization of the most effective Information 

Technology investments to support the mission and long range plans for the Fiscal Service and 

Treasury. These programs also ensure the IT investment portfolio is well managed, cost 

effective, and achieving intended results through monthly tracking and reporting of progress. A 

monthly investment health assessment of cost, schedule, and operational performance is in place 

in addition to a formal Techstat process that engages appropriate senior level officials for insight

and successful remediation of significant issues or risks. 

Effective Project Execution

The Fiscal Service has a disciplined and consistent approach to project management (PM) as 

facilitated through a bureau-wide project management program that manages PM standards, 

procedures, and training for the bureau. In addition, a standing monthly project management 

community of practice is in place providing practitioners the opportunity for collaboration and 

continuous learning of creative problem solving/solution design related to practical lessons 

learned. Each IT investment has a dedicated program manager and a fully staffed integrated 

program team. The systems that support each investment are enhanced using iterative 

development techniques.

Enterprise Architecture Services

Enterprise Architecture (EA) services ensure that Fiscal Service applies a common language and 

framework to describe and analyze investments. The Fiscal Service EA program is designed to 

facilitate cross-agency analysis of capabilities, knowledge, processes, and relationships to apply 

evidence-based techniques, to identify duplicative investments, to discover goals and 

opportunities for collaboration with other agencies, and to establish a line-of-sight from the 

highest level strategic goals to the infrastructure that enables the achievement of those goals. 

The value of EA services is to facilitate planning by documenting where the Fiscal Service is 

currently and determining what the Fiscal Service should look like in the future so that it can 

make plans to transition from current state to future state. The planning is enabled by a holistic 

suite of integrated services that incorporates architecture perspectives from business, data, 

technical, and security. 

Risk Management

The nature of the Fiscal Service’s work requires effective risk management and high levels of 

performance to ensure the bureau maintains operational excellence while seeking innovative 

solutions to improve efficiencies and transform financial management and the delivery of shared 
FS - 31

services in the Federal government. As such, Fiscal Service has established an Enterprise Risk 

Management (ERM) office to promote a common understanding and approach to risk 

management. Through the development and issuance of an ERM framework, the bureau will 

incorporate risk management practices in decision making processes such as strategic and 

tactical planning, workforce planning, capital investment planning, and budget formulation. 

Fiscal Service will continue to communicate the importance of effective risk management to all 

employees.

Cyber Security

The Fiscal Service protects the enterprise architecture and infrastructure to ensure the 

confidentiality, integrity, and availability of information technology resources. This is 

accomplished by: monitoring the network for both internal and external information attacks, 

proactive vulnerability assessment, effective patch management, and expedient incident 

response. In addition, Enterprise Cybersecurity ensures Fiscal Service information technology 

resources are in compliance with National Institute of Standards and Technology security 

standards and fulfills annual security audit requirements.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.
FS - 32

4B – Summary of Changes to Appropriated Budget Activities

Fiscal Service completed a comprehensive evaluation of the legacy budget activities and 

associated methodologies in order to develop a single Fiscal Service approach that will allow for 

more efficient budgeting and a single cost allocation methodology. As a part of this new 

approach, Fiscal Service modified the reported appropriated budget activities to better align 

common functions. For the new reporting structure, the Do Not Pay Business Center has been 

combined with the Payments budget activity and Government Agency Investment Services, 

Government-wide Accounting and Reporting, and Summary Debt Accounting have been 

combined into a single Accounting and Reporting budget activity. 

In addition, Fiscal Service has implemented a new cost allocation methodology that 

complements the budget activity changes and more effectively and efficiently aligns costs to the 

appropriate activity. Overhead costs are now distributed in a single common and defined 

manner, eliminating the separate processes for different legacy activities. The resulting changes 

in reported budget activity costs are reflected in the table below.

$ in thousands

FY 2015 

Enacted

FY 2016 

Enacted

FY 2017 

Request

FY 2015 

Enacted

FY 2016 

Enacted

FY 2017 

Request

Accounting and Reporting 104,725 125,752 114,167

Collections 24,293 26,609 25,301 35,029 38,798 40,225

Do Not Pay Business Center 5,064 5,116 5,178

Government Agency Investment Services 13,055 13,074 13,277

Government-wide Accounting and Reporting 65,486 68,553 65,025

Payments 121,715 133,179 126,296 120,912 118,454 115,141

Retail Securities Services 95,237 94,145 94,438 76,819 70,038 71,186

Summary Debt Accounting 4,325 4,243 4,323

Wholesale Securities Services 19,009 18,931 19,218 10,699 10,808 12,338

Total 348,184 363,850 353,057 348,184 363,850 353,057

Included in Accounting & Reporting

Previous Budget Activities New Budget Activities

Included in Accounting & Reporting

Included in Payments

Included in Accounting & Reporting

Office of Financial Stability

FY 2017

President’s Budget Submission

February 9, 2016
OFS - 2

Table of Contents

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

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

1.1 – Program Account Summary............................................................................................... 3

1.2 – Financing Account Summary ............................................................................................ 4

1.3 – Program Disbursement, Repayments, and Cost/Savings................................................... 4

1B – Vision, Priorities and Context............................................................................................ 4

1C - Credit Reform and Administrative Accounts ..................................................................... 6

Section 2 – Budget Adjustments and Appropriation Language............................................... 8

2.1 – Budget Adjustments Table................................................................................................. 8

2A – Budget Increases and Decreases Description..................................................................... 8

2.2 – Operating Levels Table...................................................................................................... 9

2B – Appropriations Language and Explanation of Changes..................................................... 9

2C – Legislative Proposals.......................................................................................................... 9

Section 3 – Budget and Performance Plan ............................................................................... 10

3A – EESA Program Descriptions............................................................................................ 10

3B – EESA Administration....................................................................................................... 13

3C – Operational Goals............................................................................................................. 13

Section 4 – Supplemental Information...................................................................................... 17

4A – Summary of Capital Investments..................................................................................... 17
OFS - 3

Section 1 – Purpose

1A – Mission Statement

A central part of the response to the 2008 financial crisis was the implementation of the Troubled 

Asset Relief Program (TARP), which was established in the fall of 2008 under the Emergency 

Economic Stabilization Act (EESA) within the Office of Domestic Finance at the U.S. 

Department of the Treasury (Treasury). With the nation in the midst of the worst financial crisis 

since the Great Depression, TARP was created to “restore the liquidity and stability of the 

financial system.”

Each year, the Office of Financial Stability (OFS) reports on its Operational Goals, which were 

developed by management to achieve Treasury’s strategic objective to wind-down emergency 

financial crisis response programs under our strategic goal of promoting domestic economic 

growth and stability while continuing reforms of the financial system. OFS has made significant 

progress towards winding down TARP investment programs and continues to implement 

housing programs to help struggling families avoid foreclosure, primarily through mortgage 

modifications. As of November 30, 2015, OFS has recovered nearly 99 percent of the $430.4

billion in total program funds disbursed under TARP, as well as an additional $17.55 billion 

from Treasury’s equity in AIG. When all of Treasury’s AIG investments are included, the 

amount recovered is greater than the funds disbursed by $11.6 billion.

1.1 – Program Account Summary

Dollars in Thousands

 FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

 Actual Estimated Estimated $ Change % Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Obligations

Equity Program Account 3,339 100,141 0 (100,141) -100.00%

Housing Account 0 225 0 (225) -100.00%

TARP Account 0 547,588 0 (547,588) -100.00%

TARP Administrative Account 168,861 147,797 127,430 (20,367) -13.78%

TARP Negative Downward Reestimate Receipt Account (1,525,007) (855,038) 0 855,038 -100.00%

TARP Negative Subsidy Receipt Account 0 0 0 0 0.00%

Total Obligations ($1,352,807) ($59,287) $127,430 $186,717 -314.94%

Budget Authority 

Equity Program Account 3,339 100,141 0 (100,141) -100.00%

Housing Account 0 225 0 (225) -100.00%

TARP Account 0 547,588 0 (547,588) -100.00%

TARP Administrative Account 181,640 147,797 127,430 (25,142) -16.48%

TARP Negative Downward Reestimate Receipt Account (1,525,007) (855,038) 0 855,038 -100.00%

TARP Negative Subsidy Receipt Account 0 0 0 0 0.00%

Total Budget Authority ($1,340,028) ($54,512) $127,430 $181,942 -333.76%

Outlays

Equity Program Account 3,339 100,141 0 (100,141) -100.00%

Housing Account 4,251,376 5,345,073 4,078,976 (1,266,097) -23.69%

TARP Account 0 547,588 0 (547,588) -100.00%

TARP Administrative Account 152,021 235,237 131,503 (20,507) -13.49%

TARP Negative Downward Reestimate Receipt Account (1,525,007) (855,038) 0 855,038 -100.00%

TARP Negative Subsidy Receipt Account 0 0 0 0 0.00%

Total Outlays $2,820,629 $5,289,774 $4,210,479 ($1,079,294) -20.40%
OFS - 4

1.2 – Financing Account Summary

Dollars in Thousands

 FY 2015 FY 2016 FY 2017 Change % Change

 Actual Estimated Estimated FY 2015 to FY 

2016

FY 2015 to FY 

2016

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

TARP Direct Loans

Obligations 288,850 656,332 0 (656,332) -100.00%

Collections 148,377 547,588 0 (547,588) -100.00%

Financing Authority (net) (37,174) 0 0 0 0.00%

Financing Disbursements (net) 140,474 108,745 0 (108,745) -100.00%

Equity Purchases

Obligations 1,264,750 229,715 31,170 (198,545) -86.43%

Collections 1,822,235 197,399 67,424 (129,975) -65.84%

Financing Authority (net) (539,526) 3,486 (36,254) (39,740) -1,139.99%

Financing Disbursements (net) (558,074) 32,316 (36,254) (68,570) -212.19%

Housing

Obligations 4,466 4,282 1,965 (2,317) -54.11%

Collections 2,210 313 59 (254) -81.15%

Financing Authority (net) 0 0 0 0 0.00%

Financing Disbursements (net) 2,257 3,969 1,906 (2,063) -51.98%

1.3 – Program Disbursement, Repayments, and Cost/Savings

Dollars in Billions

Cumulative 

Obligated

Cumulative 

Disbursed

Cumulative 

Outstanding 

Total 

Cumulative 

Income

Total 

Cash 

Back

Total 

Estimated 

Lifetime Costs 

(as of 11/30/15)

Bank Support Programs 250 245 1 36 275 -24

Credit Market Programs 19 19 0 5 24 -3

AIG Investment Program (AIG) 68 68 0 1 55 15 * Automotive Industry Financing 

Program 80 80 0 7 71 12

Treasury Housing Programs 38 19 35

Total** $455 $430 $1 $49 $425 $35

Additional AIG Common Shares 

Held by Treasury 0 0 0 18 18 -18 *

Total for Programs and Shares** $455 $430 $1 $66 $442 $17

*If all Treasury AIG Investments are combined, it would result in a net gain of nearly $2.4 billion on those shares.

**Totals may not foot due to rounding.

1B – Vision, Priorities and Context

TARP was created by EESA in October 2008 as part of a broad-based federal response to the 

financial crisis. At that time, the U.S. financial system faced challenges on a scale not seen since 

the Great Depression. By October of 2008, major financial institutions were threatened, and 

many of them tried to shore up their balance sheets by shedding risky assets and hoarding cash. 

People were rapidly losing trust and confidence in the stability of America’s financial system and 

the capacity of the government to contain the damage. Without immediate and forceful action by 

the federal government, the U.S. economy faced the risk of falling into a second 

Great Depression.
OFS - 5

It was out of these extraordinary circumstances in the fall of 2008 that TARP was created as a 

central part of a series of emergency measures by the federal government. Seven years later, it is 

generally agreed that as a result of the forceful and coordinated response by the federal 

government through TARP and many other emergency programs, we helped avert what could 

have been a devastating collapse of our financial system. 

The purposes of EESA were to —

(1) immediately provide authority and facilities that the Secretary of the Treasury could use to 

restore liquidity and stability to the financial system of the United States; and

(2) ensure that such authority and such facilities were used in a manner that —

(A) Protects home values, college funds, retirement accounts, and life savings;

(B) Preserves homeownership and promotes jobs and economic growth;

(C) Maximizes overall returns to the taxpayers of the United States; and,

(D) Provides public accountability for the exercise of such authority.

EESA vested authority in the Secretary of the Treasury to “purchase, and to make and fund 

commitments to purchase, troubled assets from any financial institution, on such terms and 

conditions as are determined by the Secretary.” 

As a result of improved financial conditions and careful stewardship of the program, the ultimate 

cost to taxpayers of TARP investments is estimated to be significantly lower than initially 

expected. In Fiscal Year (FY) 2009, the program was projected to cost $341 billion, but it is 

now estimated to cost only $34.5 billion (of which -$0.2 billion relates to investments and $34.7

billion relates to housing programs that do not require repayments by recipients) as of November 

30, 2015. Lifetime costs are projected at $17.0 billion with the inclusion of receipts from 

Treasury’s sale of additional AIG common stock.

 *Includes $17.55 billion in proceeds from additional Treasury AIG shares

$341.0

$124.1

$77.7 $70.2 $59.7

$22.7* $20.0* $17.0*

0

50

100

150

200

250

300

350

400

May-2009 Sep-2009 Sep-2010 Sep-2011 Sep-2012 Sep-2013 Sep-2014 Nov-2015

Cost (in billions)

Date

OFS TARP Cost Estimates
OFS - 6

During FY 2016 and FY 2017, OFS’s priorities will be to continue winding down TARP’s bank 

investment programs subject to market conditions and continue helping struggling homeowners 

find solutions to avoid foreclosure by implementing TARP’s housing program to reach as many 

homeowners as possible.

OFS Administrative Expenses

The authority for OFS’s administrative budget funds is provided in Section 118 of EESA. In FY 

2016, OFS plans to obligate $148 million and use no more than 72 FTEs, a decrease of 

approximately $7 million and 3 FTEs from the FY 2016 President’s Budget. The decrease in 

obligations is primarily due to the faster than anticipated wind-down of TARP’s investment 

programs. In FY 2017, OFS plans to obligate $127 million and use no more than 64 FTEs, a 

decrease of over $20 million and 8 FTEs from the current FY 2016 estimates, to fund the

management and maintenance of the TARP housing programs and disposition of OFS’s

remaining investments. The decrease in FTEs and outside contracts reflects the continued winddown of TARP.

1C - Credit Reform and Administrative Accounts

Section 123 of EESA requires the cost of TARP programs to be calculated using the methods 

required by the Federal Credit Reform Act of 1990 ("credit reform"). In addition to the Office of 

Financial Stability Administrative Account, the organization manages six accounts to comply 

with the credit reform accounting requirements: TARP Equity Purchase Program Account, 

TARP Equity Purchase Financing Account, TARP Housing Programs Account, TARP Home 

Affordable Modification Program Financing Account, TARP Program Account, and TARP 

Direct Loan Financing Account. 

Account Descriptions

TARP Equity Purchase Program Account: The TARP Equity Purchase Program Account 

records the subsidy costs (cost to the government) associated with federal equity injections into 

qualifying financial institutions. Subsidy costs are calculated on a net present value basis. 

TARP Equity Purchase Financing Account (EPFA): The TARP EPFA is a non-budgetary 

account that records all financial transactions to and from the government resulting from equity 

purchases. The EPFA primarily tracks each cohort year’s purchase activity (dividend payments, 

the exercise of warrants, Treasury borrowings, interest paid to or received from Treasury, etc.) 

and is not included in the budget totals when calculating total government spending.

TARP Housing Programs Account: The TARP Housing Programs Account records the subsidy 

costs and cash outlays associated with Treasury’s housing programs under TARP. The Making 

Home Affordable (MHA) and Hardest Hit Fund housing programs are recorded on a cash basis, 

and the Federal Housing Administration (FHA)-Refinance Program is subject to the Federal 

Credit Reform Act of 1990 whereby its subsidy cost is calculated on a net present value basis. 

TARP Home Affordable Modification Program Financing Account: The TARP Home 

Affordable Modification Financing Account is a non-budgetary account that records all financial 

transactions to and from the government resulting from OFS’s FHA-Refinance Program. 
OFS - 7

Like other financing accounts, its primary purpose is the financial tracking of each cohort year’s 

loan activity and is not included in the budget totals.

TARP Program Account: The TARP Program Account records the subsidy costs associated with 

direct loans obligated to qualifying institutions. Subsidy costs are calculated on a net present 

value basis. 

TARP Direct Loan Financing Account (DLFA): The TARP DLFA is a non-budgetary account 

that records all financial transactions to and from the government resulting from direct loans. 

Like EPFA and GLFA, its primary purpose is the financial tracking of each cohort year’s loan 

activity and is not included in the budget totals.

Office of Financial Stability Administrative (OFS) Account: This account provides for the 

administrative costs of OFS.
OFS - 8

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Office of Financial Stability FTE Amount

FY 2016 Estimated 75 $155,066

Changes to Base:

Adjustments to Estimate: (3) (7,269)

FY 2016 Revised Estimate 72 147,797

Maintaining Current Levels (MCLs): - 2,738

Pay-Raise - 115

Pay Annualization - 38

Non-Pay - 2,584

Subtotal Changes to Base (3) (4,531)

Total FY 2017 Base 72 150,535

Program Changes:

Program Decreases: (8) (23,105)

Housing Program Support - (14,683)

Maintenance and Disposition of Assets - (1,867)

OFS Salaries and Benefits (8) (1,267)

Organizational Support - (5,288)

Total FY 2017 Estimated 64 127,430

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$2,738,000 / +0 FTE

Pay-Raise +$115,000 / +0 FTE 

Funds are required for the proposed January 2017 pay-raise.

Pay Annualization +$38,000 / +0 FTE

Funds are required for annualization of the January 2016 pay-raise.

Non-Pay +$2,584,000 / +0 FTE 

Funds are required for inflation adjustments in non-labor costs such as travel, contracts, rent, 

supplies, and equipment.

Program Decreases ...................................................................................-$23,105,000 / -8 FTE

Housing Program Support -$14,683,000 / +0 FTE 

The MHA administrative functions and compliance will continue due to the extension of the 

program through December 2016, but will decline over time as the application deadline expires 

and the program winds down.

Maintenance and Disposition of Assets -$1,867,000 / +0 FTE 

During FY 2016, OFS will continue the disposition of its position of the remaining Capital 

Purchase Program (CPP) banks. In FY 2017, OFS expects its portfolio to be composed of a 

handful of CPP institutions and the Community Development Capital Initiative (CDCI) 

institutions.
OFS - 9

OFS Salaries and Benefits -$1,267,000 / -8 FTE 

Savings resulted from natural attrition and expiration of term appointments due to the winddown of various TARP programs. 

Organizational Support -$5,288,000/ +0 FTE 

Administrative costs associated with managing OFS’s portfolio will decline over time as TARP 

winds down. However, many duties and responsibilities will remain and are not directly 

correlated to the volume of assets held by OFS. Many of these organizational support functions 

will be run in-house and relate to legislative and oversight-mandated reporting functions, as well 

as the management and maintenance of TARP’s housing programs.

2.2 – Operating Levels Table

Dollars in Thousands

Office of Financial Stability FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 9,132 9,000 8,104

11.7 - Other Personnel Compensation 112 90 81

11.9 - Personnel Compensation (Total) 9,243 9,090 8,185

12.0 - Personnel benefits 2,673 2,700 2,491

Total Personnel Compensation and Benefits $11,916 $11,790 $10,676 

21.0 - Travel and transportation of persons 171 225 145

23.0 - Rent, communications and utilities 9 0 0

25.1 - Advisory and assistance services 

156,278 

 

135,319 

 

116,164 

26.0 - Supplies and materials 479 456 437

31.0 - Equipment 8 8 8

43.0 - Interest and dividends 0 0 0

Total Non-Personnel 156,945 136,007 116,754

Total Budgetary Resources $168,861 $147,797 $127,430 

Budget Activities:

EESAP - TARP Administrative Account 168,861 147,797 127,430

Total Budgetary Resources $168,861 $147,797 $127,430 

FTE 74 72 64

Table includes direct FTEs.

Totals may not foot due to rounding.

2B – Appropriations Language and Explanation of Changes

OFS does not receive any discretionary appropriation authority from Congress. Therefore, no 

appropriations language is proposed.

2C – Legislative Proposals

OFS has no legislative proposals.
OFS - 10

Section 3 – Budget and Performance Plan

3A – EESA Program Descriptions

Bank Support Programs

Capital Purchase Program (CPP): OFS’s largest program was launched to stabilize and build 

confidence in the financial system by bolstering the capital position of viable institutions. OFS 

created the CPP in October 2008 to help ensure that the nation’s banking institutions had a 

sufficient capital cushion against potential future losses and to support lending to creditworthy 

borrowers. OFS provided a total of $204.9 billion in capital to 707 institutions in 48 states.

During FY 2015, OFS focused on winding down the CPP according to the exit strategy 

announced on May 3, 2012. That strategy continues to include repayments by those institutions 

that are able to do so, selling OFS’s positions in banks that are unlikely to repay in the near-term, 

and restructuring some investments. As of November 30, 2015, the CPP has generated $226.6

billion in total receipts for taxpayers with 18 institutions remaining in the program for a total of 

$263 million in investments outstanding.

Targeted Investment Program (TIP): OFS completed the wind-down of the $40.0 billion TIP in 

December 2009 and received net proceeds of $4.4 billion in excess of disbursements. For 

additional information on TIP, please reference previous budget submissions.

Asset Guarantee Program (AGP): OFS completed the wind-down of the $5 billion AGP in 

February 2013, and received more than $4.1 billion in proceeds from the AGP without 

disbursing any claim payments. For additional information on AGP, please reference previous 

budget submissions.

Community Development Capital Initiative (CDCI): OFS created the Community Development 

Capital Initiative (CDCI) on February 3, 2010, to help viable certified Community Development 

Financial Institutions (CDFIs) and the communities they serve cope with effects of the financial 

crisis. It was put in place to help keep day-to-day financing available to families and businesses 

in hard-hit communities that are underserved by traditional banks. 

Under this program, CDFI banks, thrifts, and credit unions received investments in capital with 

an initial dividend or interest rate of two percent. To encourage repayment while recognizing the 

unique circumstances facing CDFIs, the dividend rate increases to nine percent after eight years. 

OFS invested a total of $570 million in 84 CDFIs, of which 28 institutions converted $363 

million (including warrants) from CPP to CDCI. As of November 30, 2015, 23 institutions have 

fully repaid their investment, 5 institutions have partially repaid their investment, and one has 

been taken into receivership, and the program has approximately $445 million in investments 

outstanding. 

Credit Market Programs 

Public-Private Investment Program (PPIP): On March 23, 2009, OFS launched the Legacy 

Securities Public-Private Investment Program (PPIP) to help restart the market for non-agency 

residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities 
OFS - 11

(CMBS). The purpose of PPIP was to draw new private capital into the market for legacy RMBS 

and CMBS by providing financing on attractive terms as well as a matching equity investment 

from OFS. Treasury invested a total of $18.6 billion in the program. All of the Public-Private 

Investment Funds have been effectively wound down and OFS has recovered all of its debt and 

equity investments plus an additional $3.9 billion in revenue.

Term Asset-Backed Securities Loan Facility (TALF): OFS completed the wind-down of TALF 

in February 2013 when OFS’s $100 million disbursed investment was fully repaid. OFS received 

net proceeds of $685 million in excess of disbursements. For additional information on TALF, 

please reference previous budget submissions.

Small Business Administration (SBA) 7(a) Securities Purchase Program: OFS sold all its SBA 

7(a) securities in the portfolio by FY 2012, marking the successful wind-down of the $368 

million program. OFS received net proceeds of $9 million in excess of disbursements. For 

additional information on SBA, please reference previous budget submissions.

Other Programs

American International Group, Inc. (AIG) Investment Program: The Federal Reserve and later 

OFS, after EESA became law, provided assistance to AIG totaling approximately $182 billion,

which included $70 billion from OFS and $112 billion committed by the FRBNY. In FY 2013, 

OFS and the FRBNY completed the recovery of their investments in AIG. OFS and FRBNY 

have recovered that entire amount and an additional $22.7 billion and Treasury fully exited its 

investment in AIG in FY 2013. For additional information on AIG, please reference previous 

budget submissions.

Automotive Industry Financing Program (AIFP): Under AIFP, OFS invested a total of $79.7 

billion in GM, Ally Financial (Ally), and Chrysler. 

OFS made loans totaling $50.2 billion (including funds for warranty suppliers) to GM. Some of 

those loans were subsequently converted to common stock in GM. Through share repurchases by 

the company, as well as sales of shares to investors, OFS completed its disposition of GM in 

December 2013, with proceeds of $10.5 billion less than invested.

OFS committed a total of $12.4 billion to Chrysler under TARP. In July 2011, OFS fully exited 

its investment in Chrysler, six years ahead of schedule. Of the $12.4 billion disbursed to 

Chrysler under TARP, OFS recovered more than $11.2 billion for taxpayers through principal 

repayments, interest, and cancelled commitments. OFS is unlikely to fully recover the difference 

of $1.2 billion owed by Old Chrysler.

OFS invested $17.2 billion in Ally under TARP (including $884 million invested through GM). 

OFS has fully liquidated its investment in Ally Financial through repurchases, private 

placements, an initial public offering (IPO), and underwritten common stock sales and has 

realized cumulative receipts of $19.6 billion, $2.4 billion more than invested. 

Treasury Housing Programs Under TARP

OFS established several programs under TARP to address the historic housing crisis and help 

struggling homeowners avoid foreclosure wherever possible. These programs have helped 
OFS - 12

millions of homeowners avoid foreclosure and introduced important new reforms for the 

mortgage servicing industry to help make mortgage modifications become more sustainable and 

affordable.

Making Home Affordable Program (MHA): In early 2009, OFS launched the Making Home 

Affordable® Program (MHA) to help struggling homeowners avoid foreclosure and stabilize the 

housing market. The cornerstone of MHA is the Home Affordable Modification Program 

(HAMP), which provides eligible homeowners the opportunity to reduce their monthly mortgage 

payments to more affordable levels. OFS also introduced additional programs under MHA to 

help homeowners who are unemployed, “underwater” on their loan (those who owe more on 

their home than it is currently worth), or are struggling with a second lien. It also includes 

options for homeowners who would like to transition to a more affordable living situation 

through a short sale or deed-in-lieu of foreclosure. In addition, OFS has recently made changes 

to MHA programs to better assist homeowners avoid foreclosure and create a safety net for 

borrowers facing rate step-ups in a HAMP modification. These changes include increasing 

borrower incentives, lowering interest rates, and providing payment relief on HAMP 

modifications. In July 2015, OFS announced a streamlined modification process under HAMP 

to assist homeowners who are seriously delinquent and have not completed a HAMP application.

In addition to HAMP, MHA includes additional programs to help homeowners with specific 

types of mortgages, in conjunction with the Federal Housing Administration (FHA) and the 

United States Department of Agriculture (USDA). As of November 30, 2015, OFS had disbursed 

$12.9 billion out of a possible $29.8 billion under MHA.

Housing Finance Agency (HFA) Hardest-Hit Fund: The Administration established the Hardest 

Hit Fund (HHF) in February 2010 to provide targeted aid to homeowners in states hit hardest by 

the economic and housing market downturn. As part of the Administration’s overall strategy for 

restoring stability to housing markets, HHF provides funding for state Housing Finance Agencies 

(HFAs) to develop locally-tailored foreclosure prevention solutions in areas that have been 

hardest hit by home price declines and high unemployment. From its initial announcement, this 

program evolved from a $1.5 billion initiative focused on HFAs in the five states with the 

steepest home price declines and the vast majority of underwater homeowners to a broader-based 

$7.6 billion initiative encompassing 18 states and the District of Columbia (DC). In December 

2015, the Consolidated Appropriations Act, 2016 (P.L. 114-113) granted Treasury authority to 

make an additional $2.0 billion in commitments through the HHF.

HHF programs vary state to state, but may include such programs as mortgage payment 

assistance for unemployed or underemployed homeowners, principal reduction to help 

homeowners get into more affordable mortgages, funding to eliminate homeowners’ second lien 

loans, help for homeowners who are transitioning out of their homes and into more affordable 

living situations, blight elimination in an effort to stabilize neighborhoods and prevent 

foreclosures, and down payment assistance to moderate-income qualified homebuyers in 

distressed markets. As of November 30, 2015, OFS had disbursed $5.8 billion under the HFA 

Hardest-Hit Fund.
OFS - 13

Federal Housing Administration (FHA)-Refinance Program: OFS also continues to support the

Federal Housing Administration Short Refinance Program. Under this program, eligible 

borrowers who are current on their mortgage or complete a trial payment plan but owe more than 

their home is worth, can refinance into an FHA-insured loan if the lender writes off at least 10 

percent of the existing loan. Utilization of the program has been limited with OFS providing 

coverage for only approximately 4,200 loans refinanced as of September 30, 2015. As such,

OFS has reduced the letter of credit (LOC) facility supporting this program from $8.1 billion to 

$100 million. As of September 30, 2015, the revised lifetime cost estimate for the program is $29

million for outstanding refinanced loans.

3B – EESA Administration

The authority for the OFS administrative budget is provided in Section 118 of EESA. The 

administrative budget consists primarily of contracting and financial agent support costs 

associated with OFS’s ongoing implementation and management of the TARP housing programs 

and the management and disposition of OFS’s remaining investments. In addition, continuing 

organizational support, including information technology, facilities, legal, compliance, 

accounting, and human resources, will be needed to manage these ongoing OFS initiatives. The 

owner of OFS’s performance is the Deputy Assistant Secretary for Financial Stability.

3C – Operational Goals

Complete the wind-down of the investment programs

The first operational goal for OFS is to complete the wind-down of the TARP investment 

programs. OFS is continuing to implement the three-pronged exit strategy for the Capital 

Purchase Program (CPP), which was announced in May 2012. That strategy includes a 

combination of waiting for those banks that are capable of repaying in the near future to repay at 

par, selling banking investments to private investors through auctions in cases where the bank is 

not expected to be able to repay in the near future, and, in a limited number of cases, 

restructuring investments. Unlike the CPP, OFS did not take substantial actions during fiscal 

year 2015 to wind-down the CDCI because of the unique circumstances facing participating 

institutions. In particular, many CDCI participants lack the same access to capital markets that 

CPP institutions have, making it more challenging for them to repay the TARP investments in 

their institutions. As of November 30, 2015, $445 million in CDCI investments remained 

outstanding. OFS will continue to closely monitor the performance of the CDCI and make 

decisions regarding the program’s wind-down at a later date. All other TARP investment 

programs have been effectively wound down. 
OFS - 14

Continue to help struggling homeowners avoid foreclosure

OFS’s second operational goal is to continue helping struggling homeowners avoid foreclosure. 

The Making Home Affordable Program (MHA) is helping homeowners and assisting in 

stabilizing the housing market. On June 26, 2014, the Administration extended the application 

deadline for MHA programs to December 31, 2016, to provide struggling homeowners 

additional time to access sustainable mortgage relief. The largest program within MHA is the 

Home Affordable Modification Program (HAMP). Under this program more than 1.5 million 

homeowners have had their mortgages modified permanently as of September 30, 2015. HAMP 

has also set new standards and changed practices throughout the mortgage servicing industry in 

fundamental ways. Together, public and private efforts have helped millions of Americans get 

mortgage assistance to prevent avoidable foreclosures. In addition, the Hardest Hit Fund 

provides funding to 18 states and the District of Columbia to provide assistance to struggling 

homeowners through locally tailored programs.

$430.4

$291.0

$178.9

$122.1

$62.1

$23.0

$2.9 $0.7

0

50

100

150

200

250

300

350

400

450

500

Total

Disbursed

Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Nov-15

Investments Outsanding (in billions)

Date

OFS TARP Investments Outstanding
OFS - 15

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Performance Metrics and Indicators1

(includes GSE and non-GSE)

Actual Actual Actual Actual Actual

Reduction in median payment for homeowners in 

permanent modifications (assist homeowners) 

program-to-date.

$526 $541 $547 $540 $481

Number of modifications entered into 

(assist homeowners)

Trial

Permanent

344,598

361,076

213,613

233,622

181,505

178,039

137,550

148,070

122,496

125,338

12-month re-default rate for Permanent 

Modifications (90+ days delinquency rate for loans 

seasoned 12 months)

15.4% 14.5% 13.6% 13.5% 13.1%

1

Items in italics are indicators. 

Minimize cost to taxpayer

The third operational goal of OFS is to minimize the cost of the TARP programs to the taxpayer. 

OFS manages TARP investments to minimize costs to taxpayers by carefully managing the 

timely exit of these investments to reduce taxpayers’ exposure, returning TARP funds to reduce 

the federal debt, and continuing to replace government assistance with private capital in the 

financial system. OFS has taken a number of steps to dispose of our outstanding investments in 

a manner that balances the need to exit these investments as quickly as practicable with 

maximizing returns for taxpayers. OFS also takes steps to ensure that TARP recipients comply 

with any TARP-related statutory or contractual obligations such as executive compensation 

requirements and restrictions on dividend payments.

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Performance Metrics and Indicators1 Actual Actual Actual Actual Actual

Proceeds from warrant repurchases as percent of 

aggregate CPP preferred investment amount

(plus median for the selected banks)

2.4% 1.9% 3.3% 4.2% 9.0%

1

Items in italics are indicators.

Continue to operate with highest standards of transparency, accountability, and integrity

OFS’s final goal is to continue to operate with highest standards of transparency, accountability, 

and integrity. OFS posts a variety of reports online that provide the taxpayer with regular and 

comprehensive information about how TARP funds are being spent, who has received them and 

on what terms, and how much has been collected to date. As part of this effort, in June 2013, we 

enhanced and expanded the existing TARP Tracker on Treasury’s website to enable users to 

view the flow of funds for a specific time period or over the lifetime of a TARP program. OFS 

also publishes the annual audited Agency Financial Report and continues to maintain productive 

working relationships with three oversight bodies charged with auditing and reviewing the TARP 

activities. 
OFS - 16

1

Items underlined are measures. Targets are provided only for measures. 2

The ‘Average days to close a FOIA case’ measure was discontinued in third quarter FY 2014 to best reflect available reporting data. 

OFS now reports ‘Percentage of FOIA requests on-time or less than 30-days overdue’.

Performance Metrics and FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Indicators1 Actual Actual Actual Actual Actual Target Target Target

Percentage of statutorilymandated reports submitted 

on time 100% 100% 80% 99% 100% 100% 100% 100%

(ensure transparency within 

the government)

Percentage of customers 

satisfied with 

FinancialStability.gov (selfselected respondents) 66% 67% 70% 69% 67% 75% 70% 70%

(ensure transparency of 

operations to the public)

Timeliness of responses 

(ensure transparency within 

the government)

Average days to close a 

FOIA case2 98 90 21 NA NA NA NA NA

Percentage of FOIA 

requests on-time or less than 

30-days overdue2

NA NA NA 15% 13% 33% 33% 33%

Percentage of Congressional 

correspondence responses 

drafted within 10 days

98% 99% 100% 92% 50% 100% 100% 100%

Clean audit opinion on TARP 

financial statements Yes Yes Yes Yes Yes NA Yes Yes (ensure transparency within 

the government)

Percentage of SIGTARP and 

GAO oversight 

recommendations 

responded to on time 88% 82% 80% 100% 100% 100% 100% 100%

(ensure transparency within 

the government)
OFS - 17

Section 4 – Supplemental Information

4A – Summary of Capital Investments

OFS uses Departmental Office’s (DO) system and is part of DO’s capital investment strategy.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at http://www.treasury.gov/about/budget-performance/Pages/summary-of-capitalinvestments.aspx

This website also contains a digital copy of this document.

Small Business Lending Fund

FY 2017

President’s Budget

February 9, 2016
SBLF - 2

Table of Contents

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

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

1.1 – Program Account Summary............................................................................................... 3

1.2 – Financing Account Summary............................................................................................. 3

1.3 – Program Disbursement, Repayments, and Cost/Savings................................................... 4

1B – Vision, Priorities and Context ............................................................................................ 4

Section 2 – Budget Adjustments and Appropriation Language............................................... 6

2.1 – Budget Adjustments Table................................................................................................. 6

2A – Budget Increases and Decreases Description..................................................................... 6

2.2 – Operating Levels Table ...................................................................................................... 7

2B – Appropriations Language and Explanation of Changes..................................................... 7

2C – Legislative Proposals.......................................................................................................... 7

Section 3 – Budget and Performance Plan ................................................................................. 8

3A – SBLF Program.................................................................................................................... 8

3B – SBLF Administration ....................................................................................................... 10

3.1.2 – SBLF Administration Budget and Performance Plan ................................................... 10

Section 4 – Supplemental Information...................................................................................... 11

4A – Summary of Capital Investments..................................................................................... 11
SBLF - 3

Section 1 – Purpose 

1A – Mission Statement

The Small Business Jobs Act of 2010 (P. L. No. 111-240) (the “Act”) established the Small

Business Lending Fund (SBLF). The SBLF is a dedicated fund designed to provide capital to 

qualified community banks (including banks, thrifts, and bank and thrift holding companies)

and community development loan funds (CDLFs) with consolidated assets of less than $10 

billion in order to encourage small business lending. The purpose of the SBLF program is to 

encourage Main Street banks and small businesses to work together, help create jobs, and 

promote economic growth in communities across the nation.

1.1 – Program Account Summary

1.2 – Financing Account Summary

Dollars in thousands

 FY 2015 FY 2016 FY 2017

 Actual Estimated Estimated $ Change % Change

Obligations AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Subsidy Re-estimate 15,636 0 0 0 0.00%

Small Business Lending Fund Admin Account 14,949 10,868 13,405 2,537 23.34%

Total Obligations 30,585 $10,868 $13,405 $2,537 23.34%

Budget Authority 

Small Business Lending Fund Admin Account 14,949 10,868 13,405 2,537 23.34%

Small Business Lending Fund Program Account 15,636 0 0 0 0.00%

Total Budget Authority 30,585 $10,868 $13,405 $2,537 23.34%

Outlays

Small Business Lending Fund Admin Account 6,009 11,238 13,394 2,156 19.19%

Small Business Lending Fund Program Account 21,065 0 0 0 0.00%

Total Outlays 27,074 $11,238 $13,394 $2,156 19.19%

FY 2016 to FY 2017

Dollars in thousands

 FY 2015 FY 2016 FY 2017 Change % Change

 Actuals Estimated Estimated FY 2016 to 

FY 2017

FY 2016 to FY 

2017

Small Business Lending Fund Finance Account AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Obligations 0 0 0 - 0.00%

Collections 681,000 1,943,000 150,000 (1,793,000) -92.28%

Financing Authority (net) 589,000 1,867,000 130,000 (1,737,000) -93.04%

Financing Disbursements (net) 589,000 1,867,000 130,000 (1,737,000) -93.04%
SBLF - 4

1.3 – Program Disbursement, Repayments, and Cost/Savings

Dollars in billions

Cumulative 

Obligated

Cumulative 

Disbursed

Cumulative 

Outstanding 

(Includes 

Realized 

Losses)

Total 

Cumulative 

Income

Total 

Cumulative 

Repayments

Total 

Estimated 

Life Costs

SBLF Program 

Investments 4.03 4.03 2.36 0.31 1.66 -0.05

Total $4.0 $4.0 $2.4 $0.3 $1.7 ($0.1)

1B – Vision, Priorities and Context

SBLF supports the Treasury strategic goal, “Promote domestic economic growth, and stability

while continuing reforms of the financial system.” In total, the SBLF invested $4.03 billion in

332 community banks and CDLFs.

In Fiscal Year (FY) 2015, the SBLF program office continued its FY 2014 focus on investment 

management, operations, compliance and controls, and reporting activities. Specifically, the

SBLF program office focused on the following activities:

Investment Management: SBLF monitored the SBLF investment portfolio and made 

recommendations to senior Treasury officials on decisions related to investment performance 

and activities.

Operations: SBLF managed the program’s data and information in connection with participant 

reporting, dividend, interest, and fee payments, and capital repayments. In addition, SBLF 

prepared for the expected surge of participants exiting the program prior to the step up rate in 

the first quarter of 2016.

Compliance and Controls: SBLF monitored participant conformance with program terms, 

including lending data, certification requirements, and other requirements provided for by the 

SBLF Securities Purchase Agreement. SBLF also developed and executed internal control 

procedures for processes across SBLF program office functions.

Reporting: SBLF continued its reporting efforts in FY 2015. These activities included reporting 

to Congress on the program’s transactions, costs, and the participants’ lending growth, 

correspondence, and publishing the results of the program’s third annual lending survey.

Summary of SBLF Program Goals for FY 2016 and Forward

For FY 2016 and forward, the SBLF program office plans to continue its focus on investment

management, operations, compliance and controls, and reporting.

Investment Management: SBLF will continue to monitor the SBLF investment portfolio and 

make recommendations to senior Treasury officials on decisions related to investment 

performance and activities, including evaluation of the portfolio following the step up rate 

and consideration of potential disposition strategies.

Operations: SBLF will continue to manage the program’s data and information in connection 

with participant reporting, dividend, interest, and fee payments, and capital repayments.
SBLF - 5

Compliance and Controls: SBLF will continue to execute a compliance program to monitor 

participant conformance with program terms, including lending data, certification requirements, 

and other requirements provided for by the SBLF Securities Purchase Agreement. SBLF also 

plans to continue executing internal control procedures for processes across SBLF program 

office functions.

Reporting: SBLF will continue its outreach and reporting efforts. These activities include 

reporting to Congress on the program’s transactions, costs, and the participants’ lending 

growth, correspondence, and publishing the results of the program’s fourth annual lending

survey.

Summary of Office of Inspector General (OIG) Activity

In FY 2017, the OIG will continue to provide audit and investigative oversight of the SBLF. The

authorizing legislation for this small business lending initiative requires the OIG to conduct, 

supervise, and coordinate audits and investigations of the SBLF program and to issue a program 

oversight report no less than twice a year to the Congress and the Secretary of the Treasury.

The FY 2017 budget request will support six OIG employees through a reimbursable agreement 

to perform audits of financial institutions receiving SBLF investments. The OIG's efforts in

FY 2017 will primarily focus on audits of selected financial institutions to determine whether

they accurately reported their levels of small business lending activity, which Treasury uses to 

set the final lockdown dividend rate that participants will pay on Treasury's investment. The

OIG’s efforts will also focus on Treasury’s management of securities purchased with SBLF

funds and payment of dividends by Community Development Loan Funds.
SBLF - 6

Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table

Dollars in Thousands

Small Business Lending Fund FTE Amount

FY 2016 Estimated 19 $10,868

Changes to Base:

Maintaining Current Levels (MCLs): - $269

Pay-Raise - $28

Pay Annualization - $9

Non-Pay - $232

Subtotal Changes to Base - $269

Total FY 2017 Base 19 $11,137

Program Changes:

Program Decreases: - ($232)

Contracts and other reductions - ($232)

Program Increases: - $2,500

Disposition Agent - $2,500

Total FY 2017 Estimated 19 $13,405

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) .......................................................+$269,000 / +0 FTE

Pay-Raise +$28,000 / +0 FTE

Funds are required for the proposed January 2017 pay-raise.

Pay Annualization +$9,000 / +0 FTE

Funds are required for annualization of the January 2016 pay-raise.

Non-Pay +$232,000 / +0 FTE

Funds are required for inflation adjustments in non-labor costs such as travel, contracts, 

rent, supplies, and equipment.

Program Decreases .......................................................................................-$232,000 / +0 FTE

Contract and other reductions -$232,000 / +0 FTE

Reductions in contract support.

Program Increases ...................................................................................+$2,500,000 / +0 FTE

Disposition Agent +2,500,000 / +0 FTE

The SBLF portfolio of banks and community development loan funds will likely be disposed of 

at some point after the rate step-up. A financial disposition agent would assist the SBLF 

program in preparing for various wind down disposition, including primarily auctions and 

restructurings for those institutions that don't repay on their own.
SBLF - 7

2.2 – Operating Levels Table

Dollars in Thousands

2B – Appropriations Language and Explanation of Changes

SBLF does not receive any discretionary appropriation authority from Congress. Therefore, no

appropriations language is proposed.

2C – Legislative Proposals

SBLF has no legislative proposals.

Small Business Lending Fund FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 1,662 2,269 2,296

11.9 - Personnel Compensation (Total) 1,662 2,269 2,296

12.0 - Personnel benefits 489 547 557

Total Personnel Compensation and Benefits $2,151 $2,816 $2,853 

21.0 - Travel and transportation of persons 2 20 20

23.1 - Rental payments to GSA 4569 426 426

25.1 - Advisory and assistance services 759 2,014 2,014

25.2 - Other services 4,786 2,950 5,450

25.3 - Other purchases of goods & serv frm Govt accounts 2,524 2,478 2,478

26.0 - Supplies and materials 158 164 164

41.0 - Grants, subsidies, and contributions 15,636 0 0

Total Non-Personnel 28,434 8,052 10,552

Total Budgetary Resources $30,585 $10,868 $13,405 

Budget Activities:

SBLF Program 15,636 0 0

SBLF Administration 14,949 10,868 13,405

Total Budgetary Resources $30,585 $10,868 $13,405 

FTE 14 19 19
SBLF - 8

Section 3 – Budget and Performance Plan 

3A – SBLF Program

All investment activity occurred in FY 2011. The cost of purchases of preferred stock and other

financial instruments made as capital investments are required by law to be determined as 

provided under the Federal Credit Reform Act (FCRA).

The total program volume and anticipated repayments are reflected in the SBLF financing 

account (table 1.2). This non-budgetary account records all cash flows to and from the federal 

government resulting from direct capital obligated in FY 2011 and beyond. The amounts in this 

account are a means of financing and are not included in the budget totals.

Treasury completed investments in 332 institutions for a total of $4.03 billion in capital invested. 

Based on reports from participating institutions as of the quarter ending March 31, 2015, program 

participants have increased their qualified small business lending by $15.4 billion over baseline 

levels. As of August 1, 2015, 73 institutions with aggregate investments of $1.2 billion have 

fully redeemed their SBLF funding and exited the program, and 31 institutions have made partial 

redemptions totaling $339.7 million but continue to participate in the program.

The Small Business Jobs Act of 2010 includes specific reporting requirements for SBLF. The 

legislation requires a monthly written report describing all of the program transactions, the 

quarterly reporting of funds used by participating banks, a semi-annual report on administrative 

costs, and a report on the program’s impact on small business lending among women-, 

minority-, and veteran-owned businesses.

In accordance with these statutory requirements, Treasury has published 83 transaction and 

program reports, including a detailed study of the impact of the SBLF program on women-, 

minority-, and veteran-owned businesses, as well as 16 quarterly “Lending Growth” (formerly 

“Use of Funds”) reports. In addition, Treasury released the results of the third annual SBLF 

lending survey, which expanded program reporting with respect to how SBLF funds were used 

by program participants.

The SBLF program completed the review and, if applicable, funding of all eligible program 

applicants by the September 27, 2011 statutory deadline.

The SBLF program office developed a set of asset management performance measures to 

continually monitor the impact of the Fund’s investments and the efficiency of its operations. 

The measures address two aspects of program performance:

1. Efficiency Measures (to assess the administrative aspects of the program)

a. Monitoring of investment portfolio condition

b. Review of compliance and supplemental report submissions by participants 

c. Publication of reports as required by statute

In FY 2015, the SBLF program office has:

a. produced, on a quarterly basis, portfolio monitoring reports that include institution-specific

credit scores, dashboards, and watch lists; 
SBLF - 9

b. maintained a record of compliance submissions and implemented an analytical process for

identifying errors in supplemental report submissions and receiving corrected submissions;

and

c. published all reports required by the Small Business Jobs Act of 2010.

2. Outcome Measures (to assess the impact of the program on small business lending)

a. Increase in small business lending by participating institutions

b. Increase in business lending by participating banks versus comparable institutions

c. Receipt of expected dividend, interest and fee payments by participating institutions

As of March 31, 2015, SBLF participants have increased their small business lending by

$15.4 billion over a $31.3 billion baseline, which was a $280 million increase over the prior 

quarter. Increases in small business lending are widespread across SBLF participants, with 98

percent of participants having increased their small business lending over baseline levels.

Most SBLF participants (93 percent) have increased small business lending by 10 percent or 

more. Over the same period, banks participating in SBLF have increased business loans 

outstanding by a median of 73.6 percent over baseline levels, versus a 23.1 percent median 

increase for a representative peer group of non-SBLF banks and a 17.8 percent median increase

for a broader comparison group of non-SBLF banks. As of August 1, 2015, SBLF has received

dividend, interest, and fee payments totaling $277.6 million.

Treasury currently estimates that the investments made through SBLF will generate a lifetime 

positive return of $51 million for the Treasury General Fund. The figures in the following table 

reflect Treasury’s calculation of the estimated cost of SBLF investments in the President’s 

Budget for FY 2017.

Estimated Cost of SBLF Investments

(Dollars in millions)

 Projected/Actual

 Investment Projected Lifetime

 Subsidy Rate Amount Cost (Savings)

Original estimate 7.24% 17,399 1,260

President's Budget for fiscal year 2013 -2.08% 4,028 -84

President's Budget for fiscal year 2014 -1.26% 4,028 -50

President's Budget for fiscal year 2015 -0.63% 4,028 -25

President's Budget for fiscal year 2016 -0.26% 4,028 -10

President’s Budget for fiscal year 2017 -1.27% 4,028 -51

Treasury estimated the program’s budget cost in conformance with the FCRA 

methodology using actual program data for FY 2011 – FY 2015. This data, combined 

with the expected future cash flows, results in a subsidy rate of -1.27 percent compared to 

an original subsidy rate of 7.24 percent.

As required by FCRA, the lifetime cost and subsidy rate of the SBLF program is estimated on a

present value basis. Assumptions used to estimate future cash flows include, but are not limited 
SBLF - 10

to: (1) the cumulative default rate for program participants, (2) the cash flows received by

Treasury from the participants’ dividend, interest, and other payments, and (3) Treasury’s cost of 

raising funds to make SBLF investments.

The current estimate of the program’s projected lifetime savings incorporates a forecasted 

cumulative default rate of 0.42 percent compared to a 2.70 percent rate in the prior year’s

estimate [1]. This lower rate reflects an overall improvement in the financial condition of

program participants and increased repurchase rates of SBLF investments. Inclusive of these

changes, the projected program lifetime savings is $51 million.

3B – SBLF Administration

($13,405,000 from mandatory appropriations):

The authority to pay administrative expenses is provided by Section 4108(b) of the Act. 

Administrative expenses include the costs of government employee salaries, contract support, 

and reimbursement to the Treasury Office of Inspector General for program audits. Treasury is 

required by law to submit semi-annual reports to the appropriate committees of Congress 

detailing administrative expenses.

3.1.2 – SBLF Administration Budget and Performance Plan

Dollars in Thousands

SBLF Administration Budget Activity

Resource Level FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Estimated Estimated

 Mandatory Resources $22,831 $18,705 $20,469 $14,949 $10,868 $13,405

Budget Activity Total $22,831 $18,705 $20,469 $14,949 $10,868 $13,405

[1] The forecasted cumulative default rate represents the projected investment amounts not repaid by program

participants as a percentage of all SBLF investments. The rate is estimated based on the financial condition of

program participants relative to the historical performance of institutions rated by a major ratings agency.
SBLF - 11

Section 4 – Supplemental Information 

4A – Summary of Capital Investments

SBLF uses Departmental Office’s (DO) systems and is part of DO’s capital investment strategy.

A summary of capital investment resources, including major information technology and

non-information technology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

State Small Business Credit

Initiative

FY 2017

President’s Budget

February 9, 2016
SSBCI - 2

Table of Contents

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

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

1.1 – Resource Detail Table .............................................................................................................3

1B – Vision, Priorities and Context..................................................................................................3

Section 2 – Budget Adjustments and Appropriation Language ....................................................7

2.1 – Budget Adjustments Table ......................................................................................................7

2A – Budget Increases and Decreases Description ..........................................................................7

2.2 – Operating Levels Table ...........................................................................................................8

2B – Appropriations Language and Explanation of Changes ..........................................................8

2C – Legislative Proposals...............................................................................................................8

Section 3 – Budget and Performance Plan.......................................................................................9

3A – State Small Business Credit Initiative Program ......................................................................9

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Plan.................10

3B – State Small Business Credit Initiative Administration ..........................................................11

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance Plan ......11

Section 4 – Supplemental Information...........................................................................................12

4A – Summary of Capital Investments...........................................................................................12
SSBCI - 3

Section 1 – Purpose 

1A – Mission Statement

To increase the availability of credit for small businesses and to generate jobs and other economic

development benefits for states, Treasury has implemented the State Small Business

Credit Initiative (SSBCI).

1.1 – Resource Detail Table

1B – Vision, Priorities, and Context

SSBCI funds new and existing state programs that support lending to and investment in

small businesses to stimulate economic growth and new jobs. Under SSBCI, participating

states use the federal funds for programs that leverage private lending to help finance small 

businesses and manufacturers that are creditworthy but are not getting the loans and 

investments they need to expand and create jobs.

The Small Business Jobs Act of 2010 (the Act) authorized and appropriated $1.5 billion for 

SSBCI through FY 2017. Due to the success of SSBCI, the FY 2017 President’s Budget 

proposes a new authorization of $1.5 billion to build on the momentum of the program’s first 

round, strengthen the federal government’s relationships with state economic development 

agencies, and provide capital to America’s diverse community of entrepreneurs. The new 

authorization would run from FY 2017 through FY 2023.

SSBCI allows states to build on successful models for state small business lending and investment 

programs, including capital access programs (CAPs), collateral support programs, loan guarantee

programs, loan participation programs, and venture capital programs. States are required to 

demonstrate a reasonable expectation that a minimum of $10 in new private lending will result 

from every $1 in federal funding over the life of the program. SSBCI aligns with Treasury’s 

strategic goal to promote domestic economic growth and stability while continuing reforms of the

financial system.

Dollars in Thousands

State Small Business Credit Initiative

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Budgetary Resources:

Recovery from Prior Years - 1,908 - - - - - - 0.00% 0.00%

Offsetting Collections - 605 - - - - - - 0.00% 0.00%

Unobligated Balances from Prior Years - 19,323 - 15,483 - 8,780 - (6,703) 0.00% -43.29%

Subtotal Budgetary Resources - 21,836 - 15,483 - 8,780 - (6,703) 0.00% -43.29%

Other Resources:

SSBCI Program - - - - - - - - 0.00% 0.00%

SSBCI Administration 9 6,353 9 6,703 9 6,327 - (376) 0.00% -5.61%

Subtotal Other Resources 9 6,353 9 6,703 9 6,327 - (376) 0.00% -5.61%

Net Results 9 15,483 9 8,780 9 2,453 - (6,327) 0.00% -72.06%

Actual Estimated $ Change % Change

FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Estimated
SSBCI - 4

Priorities:

• To provide direct funding support to states for use in programs designed to increase access to 

credit for small businesses.

• To support state CAPs and other credit support programs that support lending to and 

investment in small businesses and small manufacturers.

• To monitor the deployment of SSBCI funds among approved state programs and to ensure 

adherence to all Treasury compliance standards.

• To promote best practices in program design, operations, and marketing among state-run 

programs.

• To provide technical assistance to states as they implement these programs and deploy funds 

to eligible small businesses.

SSBCI Program Activities

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010

(the Act). Section 3003 of the Act authorized and directed the Secretary of the Treasury to

establish a seven-year SSBCI, which was funded with $1.5 billion to support state programs that 

support lending to small businesses and small manufacturers. Since the passage of the Act, 

SSBCI has positively impacted small business access to capital and local economies around the 

nation, supported over 12,400 private sector loans or investments to small businesses, and helped 

create or retain over 140,000 jobs, as reported by the small businesses who received the loans and 

investments

1

.

Proposal for Extension

The FY 2017 President’s Budget proposes a new authorization of SSBCI to build on the

momentum of the program’s first round of funding, strengthen the federal government’s 

relationships with state economic development agencies, and provide capital to America’s diverse

community of entrepreneurs. The budget proposes extending SSBCI with a new authorization of

$1.5 billion awarded in two allocations: $1 billion awarded on a competitive basis to states best 

able to target local market needs, promote inclusion, attract private capital for start-up and scaleup businesses, strengthen regional entrepreneurial ecosystems, and evaluate results; and 

$500 million awarded by a need-based formula.

Program Activity to Date

Under SSBCI, states were offered the opportunity to apply for federal funds for programs that 

support private lending and investing to small businesses. SSBCI allows states to build upon 

existing, successful state-level small business lending and investing programs, such as CAPs, 

collateral support programs, loan participation programs, loan guarantee programs, and statesponsored venture capital programs. If a state did not have an existing small business program, the

state could establish one in order to access this funding.

1 Source for transaction and job creation and retention figures is the annual report data submitted by states for the 

periods ending December 31, 2011 through December 31, 2014.
SSBCI - 5

As of September 30, 2015, all program participants reported expending or obligating SSBCI

funds to support loans or investments in businesses. As of the same date, Treasury had outlayed 

to states approximately $1.36 billion or 94 percent of the total funds available for disbursement. 

Treasury expects states to qualify to receive most of the remaining funds in FY 2016. States 

report transaction details to Treasury annually. Data through December 2014, when states

expended $864 million in SSBCI funds to leverage $6.4 billion in new financing, suggest the

following key findings:

• SSBCI funds have supported thousands of loans and investments that might not

otherwise have been made to small businesses in a wide range of sectors. SSBCI 

financing reached small businesses in industries ranging from retail trade to 

manufacturing, hospitality, and many types of services. Nearly two-thirds of all SSBCI 

loans or investments supported by SSBCI were for less than $100,000, and the average

loan or investment size was $369,000.

• SSBCI funds have helped create or save more than 140,000 American jobs. The small 

business owners who received financing expect that the loans and investments they received 

will create over 48,000 jobs within two years and help retain more than 92,000 jobs that 

were at risk of loss.

• SSBCI funds support businesses with the highest potential to create new jobs. More

than half of all SSBCI loans or investments went to young businesses less than five years 

old, which economic research by the Kauffman Foundation suggests are more likely to 

create new jobs than similarly-sized businesses that are farther along in their development. 

Nearly 80 percent of all SSBCI loans and investments went to businesses with 10 or fewer

employees.

• Forty-two (42) percent of SSBCI loans and investments were made to businesses in

low- and moderate-income communities with incomes at or below 80 percent of the

area median income. SSBCI has been effective in supporting small businesses in areas that 

were hit hardest by the recession and where the need is greatest.

• Through 2014, SSBCI operations had generated $7.36 in new small business lending 

or investing for every $1 of federal support. Private sector leverage is expected to 

increase before the program concludes.

• SSBCI has helped create more than 87 new small business support programs, which

account for 54 percent of the programs currently disbursing SSBCI funds. Through the

availability of SSBCI funds, a new infrastructure of state-operated credit support programs 

has been created across the country.

States were eligible to apply for funds that were allocated by formula in the Act based on each 

state’s decline in employment relative to the overall national decline. Pursuant to the Act, funds 

were available to all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the 

Commonwealth of the Northern Mariana Islands, Guam, American Samoa, and the United 

States Virgin Islands. In the event a state chose not to participate in SSBCI, municipalities in 

that state could apply for the state’s allocation. Ultimately, 47 of 50 states applied to participate

in SSBCI (North Dakota, Wyoming, and Alaska did not participate).

Through FY 2014, Treasury had approved a total of 57 allocations to 47 states, the District of 

Columbia, five U.S. territories, and four municipalities (or consortia of municipalities) from 
SSBCI - 6

Alaska, North Dakota, and Wyoming. Once approved, all funding for each respective entity is 

allocated. Treasury transfers funds to participating states in three disbursements. 

Outlays occur as the participating states expend, obligate, or transfer the funds and submit

disbursement requests to Treasury. In addition, less than three percent of the appropriation 

has been allocated to Treasury administrative expenses, which also covers administrative

expenses of the Office of the Inspector General dedicated to auditing the use of SSBCI funds. 

Treasury will expend administrative costs over the seven-year life of the program.

FY 2017 Program Activity

In FY 2017, the last year of existing program authority, SSBCI will continue to monitor

compliance and provide technical assistance to states and respond to OIG audits of states’ use of 

SSBCI funds. Additionally, Treasury will publish an evaluation of the first five years of the 

SSBCI program.

In FY 2017, Treasury proposes to administer a new SSBCI authorization of $1.5 billion 

awarded in two parts: $1 billion to be awarded on a competitive basis to states for applications 

that demonstrate the greatest potential impact and $500 million allocated to states according to 

a need-based formula. Potential categories being considered for competitive scoring include a 

state’s ability to target local market needs, promote inclusion, attract private capital for startup and scale-up businesses, strengthen regional entrepreneurial ecosystems, and evaluate

results, among other factors. During FY 2017, SSBCI would administer the formula award 

process and initiate the competitive award process. Treasury estimates outlays to states of

$212 million in FY 2017 and remaining outlays under Round 2 occurring between FY 2018 

and FY 2021.

Office of the Inspector General (OIG) Activities

In FY 2017, OIG will continue to provide audit and investigative oversight of SSBCI. The

authorizing legislation directs OIG to audit the use of SSBCI funds by participating states so 

that Treasury can recoup any recklessly or intentionally misused funds identified by such

audits.

The FY 2017 budget request will support 11 OIG employees through a reimbursable agreement 

to perform audits of the use of SSBCI funds. OIG plans to audit both how the states are 

carrying out their oversight responsibilities and whether the institutions and businesses 

participating in the state programs funded by SSBCI are in compliance with loan-use

restrictions and requirements. OIG is expecting to continue to perform a significant number of

audits during FY 2017 as states increase their use of funds and request additional disbursements 

from Treasury for Round one, and if adopted, for Round two.

Outlays for SSBCI Round 1 and 2*

Actual Estimated

FY 

2011

FY 

2012 

FY 

2013 

FY 

2014 

FY 

2015 

FY 

2016

FY 

2017 

FY 

2018 

FY 

2019

FY 

2020

FY 

2021 Total

Round 1 

Outlays 366 187 364 229 221 80 - - 1,447

Round 2 

Outlays - - - - - - 212 571 235 312 130 1,460

Total 366 187 364 229 221 80 212 571 235 312 130 2,907

*Does not include outlays for Treasury administrative expenses.
SSBCI - 7

Section 2 – Budget Adjustments and Appropriations Language 

2.1 – Budget Adjustments Table

Dollars in Thousands

State Small Business Credit Initiative FTE Amount

FY 2016 Estimate 9 $6,703

 Changes to Base

 Maintaining Current Levels (MCLs) 0 $107

 Pay-Raise 0 $15

 Pay Annualization 0 $5

 Non-Pay 0 $87

 Subtotal Changes to Base 0 $107

Total FY 2017 Base 9 $6,810

 Program Changes

 Program Decreases 0 ($483)

 Travel and Contract Support 0 ($483)

 Subtotal Program Changes 0 ($483)

Total FY 2017 Request 9 $6,327

2A – Budget Increases and Decreases Description

Adjustments to Estimate..............................................................................+$617,000 / +0 FTE

The increase to the FY 2016 estimate is due to OIG audit responsibilities, SSBCI staffing through 

FY 2016 to ensure a proper wind-down, and the resources needed to pay for the development 

and production of the final program report.

Maintaining Current Levels (MCLs) .........................................................+$107,000 / +0 FTE

Pay-Raise +$15,000 / +0 FTE

Funds are required for the proposed January 2017 pay-raise.

Pay Annualization +$5,000 / +0 FTE

Funds are required for annualization of the January 2016 pay-raise.

Non-Pay +$87,000 / +0 FTE

Funds are required for non-labor costs such as travel, contracts, rent, and equipment.

Program Decreases .....................................................................................-$483,000 / -0 FTE

Travel and Contract Support -$483,000 / +0 FTE

Travel and contract support related to state technical assistance will decrease as the funding 

allocated to the states and municipalities becomes fully expended.
SSBCI - 8

2.2 – Operating Levels Table

Dollars in thousands

2B – Appropriations Language and Explanation of Changes

SSBCI does not receive a discretionary appropriation from Congress. Therefore, no

appropriations language is proposed.

2C – Legislative Proposals

Treasury recommends new legislation authorizing a $1.5 billion extension of SSBCI. Treasury 

will competitively award $1 billion to states best able to target local market needs, promote 

inclusion, attract private capital for start-up and scale-up businesses, strengthen regional 

entrepreneurial ecosystems, and evaluate results among other factors. An additional $500 million 

will be allocated to states according to a need-based formula.

Justification

SSBCI effectively supports state-sponsored public-private partnerships to increase lending and

investment to small businesses and manufacturers. SSBCI is already achieving results: the first

$864 million in program expenditures has already supported loans and investments of

$6.4 billion supporting over 12,400 private sector loans or investments to small businesses across 

the country—creating or saving more than 140,000 American jobs, as reported by the small 

businesses who received the loans and investments. The FY 2017 budget request proposes to 

improve the targeting of SSBCI funding through competitive awards. A second round of SSBCI

funding would also increase the impact of states’ newly developed relationships with lenders and 

investors from the program’s first round and would solidify a role for state economic

development agencies which are highly responsive to capital needs in local markets. Further, 

because an extended program would build on the successes of newly created programs or legacy

programs that were restarted with SSBCI funding, Treasury estimates that it would outlay funds

at a faster rate than under the first round of funding.

State Small Business Credit Initiative FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 1,103 1,108 1,179

11.9 - Personnel Compensation (Total) 1,103 1,108 1,179

12.0 - Personnel benefits 360 394 355

Total Personnel and Compensation Benefits $1,463 $1,502 $1,534

21.0 - Travel and transportation of persons 45 125 63

23.1 - Rental payments to GSA 274 214 214

23.3 - Communications, Utilities, & Misc Charges 3 0 0

25.1 - Advisory and assistance services 2,367 1,250 853

25.2 - Other services from non-Federal sources 2 0 0

25.3 - Other purchases of goods & serv frm Govt accounts 2,193 3,582 3,633

26.0 - Supplies and materials 5 30 30

31.0 -Equipment 1 0 0

Total Non-Personnel $4,890 $5,201 $4,793

Total Budgetary Resources $6,353 $6,703 $6,327

Budget Activities:

SSBCI Program 0 0 0

SSBCI Administration 6,353 6,703 6,327

Total Budgetary Resources $6,353 $6,703 $6,327

FTE 9 9 9
SSBCI - 9

Section 3 – Budget and Performance Plan 

3A – State Small Business Credit Initiative Program

($0 from mandatory appropriations):

On September 27, 2010, President Obama signed into law the Small Business Jobs Act of 2010 

(the “Act”). Section 3003 of the Act authorized and directed the Secretary of the Treasury to 

establish a seven-year SSBCI, which was funded with $1.5 billion to support state programs that 

support lending to small businesses and small manufacturers. SSBCI supports new small business 

lending and investment through innovative state and local programs that help entrepreneurs

expand their businesses and create new jobs.

Under SSBCI, participating states use the federal funds for programs that leverage private 

lending to help finance small businesses and manufacturers that are creditworthy but are not 

getting the loans they need to expand and create jobs. SSBCI allows states to build on 

successful models for state small business programs, including collateral support programs

(CAPs), loan guarantee programs, loan participation programs, and venture capital programs. 

Existing and new state programs are eligible for support under SSBCI.

By the end of FY 2015, states reported expending, obligating, or transferring over $1.24 billion 

in SSBCI funds. As of September 30, 2015, Treasury had disbursed over $1.36 billion, or

94 percent, of allocations to states. SSBCI estimates disbursing cumulative totals of

approximately $1.44 billion by the end of FY 2016, as states request disbursement of their

approved allocations under the program.

In FY 2017, Treasury will continue to monitor the performance of state programs and compliance 

with program rules. Treasury will collect the final annual report from states for the year ending

December 31, 2016, and will assess performance targets for the seven-year program. Additionally, 

Treasury will publish an interim evaluation of the SSBCI program.

Treasury proposes a new SSBCI authorization of $1.5 billion. In FY 2017, Treasury will process 

applications for need-based awards and will prepare and release the application for competitive 

awards.
SSBCI - 10

3.1.1 – State Small Business Credit Initiative Program Budget and Performance Plan

Dollars in Thousands

SSBCI Program Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Mandatory Resources $0 $1,258,900 $188,384 $13,198 $103 $0 $0 $0

Budget Activity Total $0 $1,258,900 $188,384 $13,198 $103 $0 $0 $0

Performance Measures FY 2013 FY 2014 FY 2015 FY 2015

Target

FY 2016 FY 2017

Actual Actual Actual Target Target

Cumulative Value of SSBCI Funds 

Transferred to States (thousands) $917,000 $1,146,000 $1,367,000 $ 1,367,000 $1,441,000 $0 

State Subsequent Disbursement Requests 

Approved or Denied within 90 days (%) 100 96 93 90 90 90

State Requests to Modify Allocation 

Agreements Approved or Denied within 90 

days (%)

90 95 90 90 90 90

Receive State Quarterly Reports within five 

business days of reporting deadline (%) 93 95 96 90 90 90

Key: DISC – Discontinued

As a source of funding for credit support and investment programs that increase access to capital 

for small businesses, SSBCI supports the following strategic objective of Strategic Goal #1, to 

promote domestic economic growth and stability while continuing reforms of the financial system:

• Objective 1.1: Promote savings and increased access to credit and affordable housing 

options.

SSBCI set three performance goals to measure the efficiency of program operations where 

Treasury can expressly influence the outcomes. The first goal is that Treasury approves or 

denies 90 percent of states’ requests for a subsequent disbursement of funds within 90 days of 

receipt of a formal submission. In FY 2015, SSBCI processed 93 percent of requests within 90 

days, excluding requests that were delayed due to ongoing or unresolved audits by OIG. 

Similarly, SSBCI aims to process 90 percent of all requests by states to modify the Allocation 

Agreement with Treasury within 90 days. In FY 2015, SSBCI processed 100 percent of

requests within 90 days. Finally, SSBCI aims to collect 90 percent of all quarterly reports 

within five days of the deadline to report. In FY 2015, SSBCI received 96 percent of quarterly 

reports from states within five business days of the reporting deadline.

Additionally, Treasury established performance indicators related to cumulative state program 

activity as of December 31, 2016, the date of the final annual report from participating states. 

These indicators are a response to a GAO audit. The first indicator is that Treasury disburses

98 percent of funds available to states by December 31, 2016. As of September 30, 2015, 

Treasury had disbursed 93 percent of available funds. The second indicator is that states 

achieve a cumulative private sector leverage ratio of 10:1 by December 31, 2016. As of 

December 31, 2014, states had achieved a cumulative leverage ratio of 7:36:1. The third 

indicator is that 98 percent of all Other Credit Support Programs (OCSPs) operated by states 

target borrowers or investees with fewer than 500 employees. As of December 31, 2014, 

100 percent of OCSPs met this target on an interim basis. The fourth indicator is that 
SSBCI - 11

98 percent of OCSPs make loans or investments with an average principal amount of $5 million 

or less by December 31, 2016. As of December 31, 2014, 97 percent of OSCPs met this target 

on an interim basis. 

Performance Indicators 2012 2013 2014 2015* 2016

(source: Annual Reports) Actual Actual Actual Actual Target

New financing leverage 6.58:1 6.95:1 7.36:1 N/A 10:1

Disbursement of funds available to states (% of total) 40 69 87 N/A 98

Percentage of OCSPs that target borrowers or investees 

with 500 or fewer employees 100 100 100 N/A 98

Percentage of OCSPs that make loans with an average 

principal amount of $5 million or less (source: Annual 

Reports)

93 93 97 N/A 98

Key: DISC – Discontinued

*As of the date of this request, CY 2015 Actuals are not available. The performance indicators are related to cumulative state 

program activity as of December 31, 2016, the date of the final annual report from participating states. 

3B – State Small Business Credit Initiative Administration

($6,327,000 from mandatory appropriations):

The authority to pay administrative expenses is provided by Section 3009 (b) of the Act, which 

appropriates $1.5 billion to carry out the state small business credit program “including to pay 

reasonable costs of administering the program.” Administrative expenses include the costs of 

government employee salaries, contract support, and reimbursement to the Treasury Office of 

the Inspector General for program audits.

3.1.2 – State Small Business Credit Initiative Administration Budget and Performance Plan

Dollars in Thousands

SSBCI Administration Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Mandatory Resources $0 $5,393 $4,746 $6,431 $7,731 $6,353 $6,703 $6,327

Budget Activity Total $0 $5,393 $4,746 $6,431 $7,731 $6,353 $6,703 $6,327
SSBCI - 12

Section 4 – Supplemental Information 

4A – Summary of Capital Investments

SSBCI uses Departmental Office’s (DO) systems and is part of DO’s capital investment strategy.

A summary of capital investment resources, including major information technology and noninformation technology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Housing & Government 

Sponsored Enterprises

FY 2017

President’s Budget

February 9, 2016
GSEs - 2

Table of Contents

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

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

1.1 – Program Account Summary............................................................................................... 3

1.2 – Financing Account Summary ............................................................................................ 3

1.3 – Mandatory Receipts Summary........................................................................................... 4

1B – Vision, Priorities and Context............................................................................................ 4

1C - Credit Reform Account Descriptions.................................................................................. 6

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2A- Budget Increases and Decreases Description ...................................................................... 7

2B – Appropriations Language and Explanation of Changes..................................................... 7

2C – Legislative Proposals.......................................................................................................... 7

Section 3 – Budget and Performance Plan ................................................................................. 8

3A – Senior Preferred Stock Purchase Agreements (PSPAs)..................................................... 8

3.1.1 – Senior PSPAs Budget and Performance Report and Plan .............................................. 8

3B – New Issue Bond Program................................................................................................... 8

3.1.2 – New Issue Bond Program Budget and Performance Report and Plan............................ 9
GSEs - 3

Section 1 – Purpose 

1A – Mission Statement

To provide stability to financial markets and promote mortgage affordability while also 

protecting the taxpayer, Treasury implemented four programs with respect to two Government 

Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, as well as the Federal Home Loan 

Banks (FHLBs). The Senior Preferred Stock Purchase Agreements (PSPAs) with Fannie Mae 

and Freddie Mac are currently active, while Treasury completed the orderly disposition of the 

Mortgage-Backed Securities (MBS) Purchase Program in March 2012.

In addition to these programs, Treasury purchased securities of Fannie Mae and Freddie Mac 

backed by new housing bonds issued by Housing Finance Agencies (HFAs), through the New 

Issue Bond Program (NIBP). Treasury also purchased participation interests in temporary credit 

and liquidity facilities, which were obligations of Fannie Mae and Freddie Mac as part of the 

Temporary Credit and Liquidity Program (TCLP) to provide backstop liquidity and credit for 

state and local HFAs. The facilities backstopped by Treasury were terminated in July 2015, 

thereby ending the TCLP. Together, the NIBP and the TCLP comprised the Housing Finance 

Agencies Initiative (HFA Initiative).

1.1 – Program Account Summary

Dollars in Millions

 FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

 Estimated Estimated Estimated $ 

Change

% 

Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Obligations

Senior Preferred Stock Purchase Agreements Account 0 0 0 0 0.00%

GSE MBS Purchase Program Account 177 3 3 0 0.00%

Total Obligations $177 $3 $3 0 0.00%

Budget Authority 

Senior Preferred Stock Purchase Agreements Account* 

258,050 

 

258,050 

 

258,050 0 0.00%

GSE MBS Purchase Program Account 178 3 3 0 0.00%

Total Budget Authority 

258,228 

 

258,053 

 

258,053 0 0.00%

Outlays

Senior Preferred Stock Purchase Agreements Account 0 0 0 0 0.00%

GSE MBS Purchase Program Account 177 3 3 0 0.00%

Total Outlays $177 $3 $3 0 0.00%

*The $258 billion is not new budget authority. It is unobligated balances.

1.2 – Financing Account Summary

Dollars in Millions

 FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

 Actual Estimated Estimated $ Change $ Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

State HFA NIPB & TCLP

Obligations 291 276 242 -34 -12.32%

Collections 1315 816 624 -192 -23.53%

Financing Authority (net) -899 -539 -382 157 -29.13%

Financing Disbursements (net) -1024 -539 -382 157 -29.13%
GSEs - 4

1.3 – Mandatory Receipts Summary

Dollars in Millions FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Actual Estimated Estimated $ 

Change

% 

Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Senior Preferred Dividend Payments from 

Fannie/Freddie

Receipts 20,370 16,016 18,671 2,654 16.57%

Additional G Fee Collected Per Temporary Payroll Tax Cut 

Continuation Act

Receipts 2,363 2,741 3,032 291 10.62%

1B – Vision, Priorities and Context

FY 2017 Priorities:

• To provide stability to financial markets.

• To prevent disruptions to the availability of mortgage credit for American homebuyers.

• To maintain investor confidence in the GSEs.

Senior Preferred Stock Purchase Agreements (PSPAs)

Section 1117 of the Housing and Economic Recovery Act of 2008 (HERA) granted temporary 

authority for the Treasury to purchase any obligations and other securities issued by Fannie Mae, 

Freddie Mac, and any Federal Home Loan Bank on such terms and conditions and amounts as 

the Treasury may determine. On September 7, 2008, the Secretary of the Treasury made the 

determination that the Treasury’s exercise of its purchase authority under HERA was necessary 

to provide stability to the financial markets, prevent disruptions in the availability of mortgage 

finance, and protect taxpayers.

Vision: The function of the PSPAs is to enhance market stability by providing holders of Fannie 

Mae and Freddie Mac securities with confidence that the GSEs will remain solvent. This 

commitment is also designed to eliminate any mandatory triggering of receivership of the GSEs 

under HERA. To this end, the PSPAs are an effective means of averting systemic risk while at 

the same time protecting the taxpayer. 

Priorities: Market stability is central to the mission of the Treasury. In this regard, the following 

priorities have been identified for mission success:

• To provide stability to the GSE securities market.

• To maintain the solvency of the GSEs.

Program History: During FY 2008, the Department of the Treasury entered into the PSPAs 

with Fannie Mae and Freddie Mac. The PSPAs were indefinite in duration and had a funding 

commitment cap of $100 billion each. These agreements were amended in May 2009 to provide 

a funding commitment cap of $200 billion each, and further amended in December 2009, to 

replace the fixed-dollar amount funding commitment cap with a formulaic cap that ended

December 31, 2012, at which time the maximum amount became fixed. Based on the financial 

results reported by Fannie Mae and Freddie Mac as of December 31, 2012 and under the terms of 

the PSPAs, the cumulative funding commitment cap for Fannie Mae was set at $233.7 billion 

and the cumulative funding commitment cap for Freddie Mac was set at $211.8 billion. In 
GSEs - 5

exchange for entering into these agreements with these two GSEs, Treasury immediately 

received $1 billion of senior preferred stock in each GSE and warrants for the purchase of 

common stock of each GSE representing 79.9 percent of the common stock of each GSE on a 

fully-diluted basis at a nominal price. No taxpayer money was spent to receive the senior 

preferred stock.

The PSPAs were further amended in August 2012. The changes included: replacing the fixed 10 

percent dividend with a quarterly payment based on the net worth of the GSEs; increasing the 

rate at which the GSEs must reduce their retained investment portfolio balance to 15 percent in 

place of 10 percent per year; and requiring each GSE to submit to Treasury an annual risk 

management plan that details their respective strategies for reducing their enterprise-wide risk 

profile. The change to the dividend payment structure eliminated the need for the GSEs to make 

PSPA draws from Treasury after making dividend payments to Treasury. Since the original 

dividend provision threatened to erode the amount of the Treasury commitment available to the 

GSEs, this amendment helps to maintain the stability of the housing market by preserving the 

continued solvency of the GSEs.

Program Outlook: Under the PSPAs, Treasury helped maintain the solvency of the GSEs with

its $187.5 billion cumulative investment as of December 31, 2015. Treasury forecasts that it will

not make any payments under the PSPAs in FY 2016. Treasury forecasts that it will receive 

approximately $16 billion in dividends in FY 2016.

Housing Finance Agencies Initiative

State and local Housing Finance Agencies (collectively, “HFAs”) are agencies or authorities 

created by state law that are charged with providing affordable mortgage financing for low- and 

moderate-income home buyers and providing financing for multifamily projects for low- and 

very-low income renters. In addition, HFAs provide homeownership education and allocate low 

income housing tax credits. 

HFAs have historically played a central role in providing a safe, sustainable path to 

homeownership. Through the course of the housing downturn, the HFAs experienced a number 

of challenges including a lack of liquidity support for existing variable rate demand bonds, losses 

on mortgages, and downgrades of re-insurance providers. Historically, HFAs have funded their 

activities by issuing tax-exempt mortgage revenue bonds and keeping the associated mortgage 

collateral produced on HFA balance sheets. The bond performance of HFAs has generally been 

strong. However, due to the uncertainties and strain throughout the housing sector during the 

financial crisis and the widening of spreads in the tax-exempt market, HFAs experienced 

challenges in issuing new bonds to fund new mortgage lending.

To provide stability to the financial markets and promote mortgage affordability while at the 

same time protecting the taxpayer, Treasury implemented two programs in December 2009 as 

part of the Housing Finance Agencies Initiative – the New Issue Bond Purchase Program (NIBP) 

and the Temporary Credit and Liquidity Program (TCLP). The TCLP ended in July 2015.
GSEs - 6

New Issue Bond Program

The NIBP provided temporary financing for HFAs to issue new housing bonds. Treasury 

purchased securities of Fannie Mae and Freddie Mac backed by HFA housing bonds, with the 

funding placed in escrow to be converted into new mortgages prior to the end of calendar year 

2012. This allowed the HFAs to issue new housing bonds consistent with what they would 

ordinarily have been able to issue with the allocations provided them by Congress absent the 

challenges in housing and related markets. The program supported over one hundred thirty 

thousand new mortgages to low- and moderate-income homebuyers, as well as forty thousand 

new rental-housing units for working families. 

Vision: The NIBP helped provide stability to financial markets and prevented disruptions in 

mortgage finance availability by providing a temporary supplemental market for newly issued 

HFA housing bonds. The NIBP enabled HFAs to keep their lending programs active while they 

adapt to changing market conditions. The program supported the availability of mortgage credit 

and affordable rental properties for low- and moderate-income homebuyers and renters. 

Facilitating supply and demand in the housing markets helped to stabilize the HFAs.

Priority: 

• To protect taxpayers through the administration of program receipts.

Program History: In December 2009, the Department of the Treasury entered into a 

Memorandum of Understanding with Fannie Mae, Freddie Mac and the Federal Housing Finance 

Agency (FHFA) outlining the obligations of each party with regard to the HFA Initiative 

transactions. Under the terms of the NIBP, Treasury purchased Fannie Mae and Freddie Mac

securities backed by housing bonds issued by HFAs, with the funding placed in escrow pending 

the origination of new mortgages. Use of escrowed proceeds to finance new mortgages 

originally had to be completed by December 31, 2010; however continued disruptions in the 

HFA bond market led to extensions. After two one-year extensions, HFAs had a deadline of 

December 31, 2012 to use NIBP funds. 

Program Outlook: Treasury purchased approximately $15.3 billion in securities under its 

authority for this program in FY 2010. As of the December 31, 2012 deadline, HFAs had used 

$13.3 billion to finance single and multi-family mortgages, and the remainder had been returned 

to Treasury. Going forward, Treasury will receive monthly payments of principal, interest and 

fees until all NIBP bonds are paid down or refunded.

1C - Credit Reform Account Descriptions

GSE Mortgage-Backed Securities Purchase Program Account: The GSE Mortgage-Backed 

Securities Purchase Program Account records the subsidy costs associated with the GSE MBS 

Purchase Program and the HFA Initiative, which are treated as direct loans for budget execution. 

The subsidy amounts are estimated on a present value basis.

HFA Financing Account: As required by the Federal Credit Reform Act of 1990, this nonbudgetary account records all cash flows to and from the Government resulting from the

Treasury HFA Initiative programs. The amounts in the account are a means of financing and are 

not included in the budget totals.
GSEs - 7

Section 2 – Budget Adjustments and Appropriation Language 

2A- Budget Increases and Decreases Description

Not applicable for the Housing Government Sponsored Enterprises. 

2B – Appropriations Language and Explanation of Changes

The Housing Government Sponsored Enterprise Programs and the Housing Finance Agencies 

Initiative Programs do not receive any discretionary appropriation authority from the Congress. 

Therefore, no appropriations language is proposed.

2C – Legislative Proposals

There are no current proposals for amending the enacting legislation.
GSEs - 8

Section 3 – Budget and Performance Plan 

3A – Senior Preferred Stock Purchase Agreements (PSPAs)

(No funding): 

The PSPAs instill confidence in investors that Fannie Mae and Freddie Mac will remain solvent 

entities critical to the functioning of the housing and mortgage markets. Treasury entered into a 

PSPA with each GSE to enable each enterprise to maintain a positive net worth. 

The PSPAs enhance market stability by providing confidence that the GSEs would remain 

solvent to holders of Fannie Mae and Freddie Mac securities, which, in turn, leads to increased 

mortgage affordability. Treasury’s commitment through the PSPAs is also designed to prevent 

triggering mandatory receivership under HERA. To this end, the PSPAs are an effective means 

of averting systemic risk while at the same time protecting the taxpayer’s investment of $187.5 

billion made through December 31, 2015.

In exchange for entering into these agreements with the GSEs, Treasury received $1 billion of 

senior preferred stock in each GSE and warrants for the purchase of common stock of each GSE 

representing 79.9 percent of the common stock of each GSE on a fully diluted basis at a nominal 

price. The GSEs agreed to pay a dividend to Treasury equal to 10 percent per year of the total 

amount of funds that Treasury had provided to the GSEs (plus $1 billion for each GSE).

The dividend provision of each PSPA was amended in August 2012 to support the continued 

solvency of the GSEs. The amendments further supported the continued flow of mortgage credit 

and protected the interests of taxpayers. This amendment replaced the fixed 10 percent dividend 

with a quarterly dividend (if any) based on the positive net worth of the GSEs.

3.1.1 – Senior PSPAs Budget and Performance Report and Plan

Description of Performance:

To ensure the stability of the GSEs, the GSEs make PSPA draws from Treasury at the request of 

FHFA as necessary for each GSE to maintain a positive net worth. Under the PSPAs, Treasury 

has helped to ensure the solvency of the GSEs by providing these entities with $187.5 billion 

cumulative investment as of December 31, 2015. Through December 31, 2015, the GSEs have 

paid $241.2 billion in dividend payments to Treasury. 

3B – New Issue Bond Program

(No funding): 

The function of the NIBP was to help 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, the NIBP enabled HFAs to keep their lending programs active while they adapted to 

changing market conditions. The NIBP supported the availability of mortgage credit and 

affordable rental properties for low- and moderate-income homebuyers and renters. 

Program sized to meet demand - HFAs submitted detailed program participation requests to 

Treasury. In order to scale back the NIBP requests to an acceptable level that could be 

recommended for adoption, a methodology was developed and applied to arrive at final 
GSEs - 9

allocation recommendations under the program for HFAs. The allocation methodology was 

based primarily on the 2008 HERA allocations to HFAs and historical HFA issuance.

Support for both single-family and multi-family bonds: HFAs were able to request that a 

portion or all of their NIBP allocation be used to issue single or multi-family bonds. The amount 

of multi-family bond issuance was subject to a cap at the program level. 

Protecting Taxpayers: HFAs pay Fannie Mae, Freddie Mac, 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. Generally speaking, the interest rate on the bond after release from escrow 

was set to cover Treasury’s cost of financing (set at a market-based index rate) plus the 

additional fee designed to offset the credit risk to the taxpayer.

3.1.2 – New Issue Bond Program Budget and Performance Report and Plan

Description of Performance:

Treasury continues to monitor payments of principal, interest and fees to determine that all 

amounts due have been paid.

Office of Financial Research

FY 2017

President’s Budget

February 9, 2016
OFR - 2

Table of Contents

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

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

1.1– Resource Detail Table......................................................................................................... 3

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ............................................. 6

2.1 – Budget Adjustments Table................................................................................................. 6

2A – Budget Increases and Decreases Description..................................................................... 6

2.2 – Operating Levels Table...................................................................................................... 7

2B – Appropriations Language and Explanation of Changes..................................................... 7

2C – Legislative Proposals.......................................................................................................... 7

Section 3 – Budget and Performance Plan ................................................................................. 8

3A – Data Center ........................................................................................................................ 8

3.1.1 – Data Center Budget and Performance Plan .................................................................... 8

3B – Technology Center............................................................................................................. 8

3.1.2 – Technology Center Budget and Performance Plan......................................................... 9

3C – Research and Analysis Center............................................................................................ 9

3.1.3 – Research and Analysis Center Budget and Performance Plan...................................... 10

3D – Operations and Support Services..................................................................................... 10

3.1.4 – Operations and Support Services Budget and Performance Plan ................................. 10
OFR - 3

Section 1 – Purpose 

1A – Mission Statement

Promote financial stability by delivering high-quality financial data, standards, and analysis for 

the Financial Stability Oversight Council (FSOC or Council) and the public.

1.1 – Resource Detail Table

Dollars in thousands

Office of Financial Research FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actuals Estimated Estimated $ Change % Change

FTE Amount FTE Amount FTE Amount FTE Amount FTE Amount

Revenue/Offsetting Collections

 Assessments1 79,566 99,355 103,336 3,981 4%

 Unobligated Balances from Prior 

Years 70,794 68,644 70,339 1,695 2%

 Recoveries 2,205 2,550 2,550 0 0%

 Interest 19 34 35 1 3%

 Offsetting Collections 7 9 11 2 22%

 Restoration of Sequestration 

Rescission 6,579 5,811 6,758 948 16%

Total Revenue/Offsetting Collections 159,171 176,403 183,030 6,627 4%

Other Resources:

 Data Center 51 17,240 46 24,933 53 26,039 7 1,106 15% 4%

 Technology Center 51 30,970 73 28,964 75 35,391 2 6,427 3% 22%

 Research and Analysis Center 43 10,396 54 15,446 59 17,156 5 1,710 9% 11%

 Operations and Support Services 49 26,110 57 29,962 68 26,184 11 (3,778) 19% -13%

Total Expenses 194 84,716 230 99,305 255 104,770 25 5,465 11% 6%

Sequestration Rescission (5,811) (6,758) 0 6,758 N/A

Net Results 68,644 70,339 78,260 7,920 11% 1 The OFR is financed through assessments on certain bank holding companies and nonbank financial companies. See Treasury’s final rule and interim final rule governing the Assessments 

process: https://financialresearch.gov/strategy-budget/files/final_rule_interim_final_rule.pdf).

1B – Vision, Priorities, and Context 

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank 

Act) established the Office of Financial Research (OFR or Office) within the Department of the 

Treasury. In carrying out its mission, the OFR seeks to achieve its vision of a transparent, 

efficient, and stable financial system. The OFR’s work contributes to making informed and 

comprehensive policies and taking actions that will strengthen the financial system. The Office 

monitors the financial environment for the emergence of new vulnerabilities and migration of 

financial activity that could threaten financial stability. Although the OFR was created within 

Treasury, the work of the OFR is independent from the Council and the Treasury. This 

independence provides the Office with an objective position to evaluate macroprudential 

policies, advocate for needed data initiatives, help the regulatory community enhance its 

peripheral vision, and produce work that was previously beyond the reach of individual 

regulatory agencies.
OFR - 4

In the OFR Strategic Plan for Fiscal Years 2015–2019, the OFR established three strategic goals 

that reflect its primary functions in data and analysis, data standardization, and research.

1 The 

plan will guide the Office’s work through Fiscal Year (FY) 2019 and will support the decisions 

made about resources needed to implement those strategies. The three goals are:

1. The OFR is an essential source of data and analysis for monitoring threats to financial 

stability.

Key objectives of this goal include:

• The OFR’s monitoring tools and analyses are widely used and critical to assessing 

financial stability.

• Data used to monitor financial stability are comprehensive, reliable, and accessible to 

policy makers and the public through the OFR.

• Data providers and the public trust, acknowledge, and recognize that OFR data are 

protected and secure.

2. Standards that improve the quality and utility of financial data are identified and 

adopted.

Key objectives of this goal include:

• Recognition of the need for standards by policy makers and industry.

• The OFR is the source of expert knowledge needed to develop and implement types and 

formats of data reported and collected.

• Financial data standards that create efficiencies and facilitate analysis are widely used.

3. Leading edge research improves financial stability monitoring and the scope and 

quality of financial data, and informs policy and risk management.

Key objectives of this goal include:

• The OFR is the recognized center for objective, innovative research on financial 

stability.

• OFR research is widely cited and used to improve policy making, risk management, 

financial stability, and the scope and quality of financial data.

The strategic goals also drive the OFR’s research-and-data agenda for FY 2016 and beyond.2

The OFR activities and priorities outlined below also support the following Goals and Objectives 

in the Treasury Department’s FY 2014–2017 Strategic Plan:

• Goal 1: Promote domestic economic growth and stability while continuing reforms of the 

financial system

o Objective 1.3: Complete implementation of financial regulatory reform initiatives, 

continue monitoring capital markets, and address threats to stability

• Goal 5: Create a 21st-century approach to government by improving efficiency, effectiveness, 

and customer interaction

 1 See the OFR Strategic Plan for Fiscal Years 2015–2019: 

http://financialresearch.gov/strategy-budget/files/Office-of-Financial-Research-Strategic-Plan-2015-2019.pdf. 2 For more information on the 2016 OFR research-and-data agenda, see the OFR 2015 Annual Report to Congress: 

https://financialresearch.gov/annual-reports/files/office-of-financial-research-annual-report-2015.pdf.
OFR - 5

o Objective 5.2: Support effective, data-driven decision-making and encourage 

transparency through intelligent gathering, analysis, sharing, use and 

dissemination of information.”3

OFR research priorities include:

• Broadening the market monitoring framework, including continued publication of a Financial 

Markets Monitor; 

• Developing a suite of additional monitors and dashboards to assess and monitor risks in 

money market funds, hedge funds, and credit default swap markets; 

• Publishing descriptions of the methodology behind the Financial Stability Monitor and 

Financial Stress Index, as well as other publications on significant threats to financial 

stability;

• Understanding and analyzing the conflicts and complementarities among macroprudential 

policy tools;

• Developing and executing a research program to examine factors behind market liquidity;

• Developing and executing a research and data program to examine risks in central 

counterparty clearinghouses;

• Expanding the evaluation of stress tests and other macroprudential policy tools; and

• Publishing research on financial stability, risk management, and related topics.

OFR data priorities include:

• Advocating for continued global implementation of the Legal Entity Identifier (LEI) in 

regulation and market practice; 

• Promoting the use of data standards in derivatives markets, in collaboration with the 

Commodity Futures Trading Commission;

• Leading or contributing to the development and implementation of new standards for 

financial data;

• Filling data gaps, particularly in secured funding markets and asset management;

• Collecting data on the repo market, in collaboration with the Federal Reserve; 

• Promoting and developing protocols for secure data sharing among regulatory agencies; and

• Creating a prototype financial instrument reference database to promote market transparency.

 3 See the Department of the Treasury’s FY 2014–2017 Strategic Plan (Goal 1, Objective 1.3 and Goal 5, Objective 

5.2): http://www.treasury.gov/about/budget-performance/strategic-plan/Documents/2014-

2017_US_TreasuryStrategicPlan.pdf.
OFR - 6

Section 2 – Budget Adjustments and Appropriations Language 

2.1 – Budget Adjustments Table

Dollars in thousands

Office of Financial Research FTE Amount

FY 2016 Estimated 230 $99,305

Changes to Base:

Total FY 2016 Base 230 $99,305

Program Changes

Program Increases: 25 $5,465

Personnel 25 $3,523

Non-Personnel $1,942

Total FY 2017 Estimated 255 $104,770

2A – Budget Increases and Decreases Description

Program Increases...........................................................................+ $5,465,000

Personnel +$3,523,000 / +25 FTE

The OFR will continue to grow to an anticipated head-count of 275 by the end of FY 2017, 

translating to 255 FTE that fiscal year. 

Non-Personnel +$1,942,000 / +0 FTE

Routine operational, recurring network, and periodic one-time costs for information technology 

(IT) and systems are increasing to support the OFR’s growth in research, analysis, and work with 

sensitive or confidential financial data. Additional investments in IT infrastructure, including 

cybersecurity, will help the Office safeguard its expanded data holdings and provide additional 

analytic space to support research and analysis.
OFR - 7

2.2 – Operating Levels Table

Dollars in thousands

Office of Financial Research FY 2015 FY 2016 FY 2017 

Object Classification Actual Estimated Estimated

11.0 Personnel compensation 29,036 32,082 34,667

12.0 Personnel benefits 9,507 10,565 11,503

Total Personnel Compensation and Benefits 38,543 42,647 46,170

21.0 Travel and transportation of persons 453 829 925

23.1 Rental payments to GSA 3,809 4,375 4,412

23.3 Communication, utilities, and misc charges 2 5 5

24.0 Printing and reproduction 31 35 37

25.1 Advisory and assistance services 8,416 12,695 11,835

25.2 Other services from non-Federal sources 600 1,525 1,750

25.3 Other services from Federal sources 16,017 14,975 15,000

26.0 Supplies and materials 8,060 5,550 5,700

31.0 Equipment 8,785 16,669 18,936

Total Non-Personnel 46,173 56,658 58,600

Total Budgetary Resources $84,716 $99,305 $104,770 

Budget Activities:

Data Center 17,240 24,933 26,039

Technology Center 30,970 28,964 35,391

Research and Analysis Center 10,396 15,446 17,156

Operations and Support Services 26,110 29,962 26,184

Total Budgetary Resources $84,716 $99,305 $104,770 

FTE 194 230 255 A Personnel compensation and benefits include direct OFR staff members only. Object Classification 25, “Other contractual services,” and 

expenditures of “Operations and Support Services” include reimbursable support received from Treasury’s Departmental Offices; personnel 

benefits services from the Office of the Comptroller of the Currency; and services from Treasury’s Bureau of the Fiscal Service Administrative 

Resource Center, including human resource services, procurement services, travel, and financial management services. 

2B – Appropriations Language and Explanation of Changes

The OFR receives no appropriations from Congress. 

2C – Legislative Proposals

The OFR has no legislative proposals.
OFR - 8

Section 3 – Budget and Performance Plan

3A – Data Center

($26,039,000 from Assessments):

The Dodd-Frank Act requires the Data Center, on behalf of the Council, to collect, validate, and 

maintain all data necessary to carry out the duties of the OFR. Under this mandate, the Data 

Center provides data services to the Research and Analysis Center, Council member agencies, 

and others to increase efficiency in data acquisition and management; reduce redundant reporting 

requirements across the regulatory system (including through more effective data-sharing 

arrangements); and to ensure the security of sensitive data. 

Data Standards

One of the OFR’s strategic goals is to identify and adopt standards that improve the quality and 

utility of financial data. Standards for financial data will benefit regulators and financial market 

participants by making data aggregation easier, improving analysis, and reducing costs 

associated with data collection. The OFR monitors progress through the following key 

performance indicators: 

• Number of LEIs issued cumulatively in the United States and internationally – This indicator 

tracks the progress over time in the industry use of the LEI. 

• Number of times that financial data standards are incorporated into rules and regulations –

This data point serves as an indicator of regulators’ awareness of the importance of data 

standards and the extent to which data standards are being adopted in rules and regulations.

3.1.1 – Data Center Budget and Performance Plan

Dollars in thousands

 Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $5,260 $19,303 $37,619 $46,940 $27,584 $24,933 $26,039

 Budget Activity Total $5,260 $19,303 $37,619 $46,940 $27,584 $24,933 $26,039

 Measure FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Target Target

Number of LEIs Issued Cumulatively in the 

United States and Internationally N/A N/A N/A N/A 395,861 I I

Number of Times that Financial Data 

Standards are Incorporated in Rules and 

Regulations

N/A N/A N/A N/A 2 I I

Key: DISC - Discontinued

I – Indicator: a metric that has no established target and is used for contextual purposes only; a direction for improvement

may be associated with an indicator, but not a specific target; 

3B – Technology Center

($35,391,000 from Assessments):

The Technology Center provides mission-critical analytic services to support the OFR’s work 

with complex, sensitive financial data and the Office’s expanding research and analysis 

activity. In addition, the Technology Center is responsible for safeguarding data and systems, 

and managing all IT capabilities within the OFR. 

These responsibilities include computing and analytic platforms, software, 

telecommunications, client applications, and office automation solutions. 
OFR - 9

3.1.2 – Technology Center Budget and Performance Plan

Dollars in thousands

 Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $0 $0 $0 $0 $30,970 $28,964 $35,391

 Budget Activity Total $0 $0 $0 $0 $30,407 $28,964 $35,391

3C – Research and Analysis Center

($17,156,000 from Assessments):

Through its Working Paper Series, Brief Series, Staff Discussion Papers Series, and OFR annual 

reports, the OFR publishes results of its analysis to be transparent in its operations and promote 

public understanding of threats to financial stability. In addition, the OFR’s Research Seminar 

Series allows the OFR’s research staff opportunities to collaborate with external experts and seek 

feedback from them. The OFR is establishing forums and networks to bring together experts 

from within and outside the regulatory system. Additionally, the OFR partners with the National 

Science Foundation to fund grants that support innovative research on approaches to computing 

and information processing to identify and analyze risks to the financial system.

Leading Edge Research and Monitoring Threats to Financial Stability

The Research and Analysis Center contributes to the achievement of two of the OFR’s three 

strategic goals: (1) Leading edge research improves financial stability monitoring and the scope 

and quality of financial data, and informs policy and risk management; and (2) The OFR is an 

essential source of data and analysis for monitoring threats to financial stability. The OFR has 

one measure linked to the achievement of each of these two goals:

• Number of research and analysis publications (working papers, briefs, staff discussion 

papers, and reports) made public – This measure tracks the OFR’s progress in increasing the 

size of its research portfolio available to policy makers, regulators, industry, academics, and 

the public. The measure includes a wide range of published research products, from the 

OFR’s comprehensive annual reports to the more frequently issued working papers. This 

measure was formerly called, “Number of research and analysis products made public.”

• Number of monitor editions, policy analyses, and dashboards produced for monitoring 

threats to financial stability – This measure tracks the OFR’s output of monitoring tools and 

other analyses of threats to financial stability. It includes tools and information made 

available to the general public, as well as those produced for the Council or Council member 

agencies. 
OFR - 10

3.1.3 – Research and Analysis Center Budget and Performance Plan

Dollars in thousands

 Resource level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $1,069 $3,398 $4,733 $7,700 $10,396 $15,446 $17,156

 Budget Activity Total $1,069 $3,398 $4,733 $7,700 $10,396 $15.446 $17,156

 Measure FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Target Target

Number of Research and 

Analysis Publications 

(working papers, briefs, staff 

discussion papers, and 

reports) Made Public 

N/A N/A 10 11 34 25 35

Number of Monitor Editions, 

Policy Analyses, and 

Dashboards Produced for 

Monitoring Threats to 

Financial Stability

N/A N/A N/A N/A 21 12 15

Key: DISC – Discontinued

“Research and Analysis Center” includes only staffing, outside work arrangements, and contracting related to annual report 

production. Costs associated with data, information systems, and analytical tools are under the Data Center. 

3D – Operations and Support Services

($26,184,000 from Assessments):

The category “Operations and Support Services” contains the activities of the Director’s Office, 

Operations, External Affairs, and Chief Counsel. The category includes support provided 

through a shared services model and reimbursable arrangements with Treasury’s Departmental 

Offices; personnel benefits services from the Office of the Comptroller of the Currency; and 

services from Treasury’s Bureau of the Fiscal Service Administrative Resource Center, including 

services related to human resources, procurement, travel, and financial management. 

3.1.4 – Operations and Support Services Budget and Performance Plan

Dollars in thousands

 Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $4,700 $16,873 $22,953 $28,626 $26,110 $29,962 $26,184

 Budget Activity Total $4,700 $16,873 $22,953 $28,626 $26,110 $29,962 $26,184

The OFR assesses its performance measures annually and revises them, if appropriate, to ensure 

their continued usefulness for management decision-making and improved results. 

Financial Stability Oversight 

Council

FY 2017

President’s Budget

February 9, 2016
FSOC - 2

Table of Contents

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

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

1.1 – Resource Detail Table ........................................................................................................3

1B – Vision, Priorities, and Context ...........................................................................................3

Section 2 – Budget Adjustments and Appropriations Language..............................................7

2.1 – Budget Adjustments Table .................................................................................................7

2A – Budget Increases and Decreases Description.....................................................................7

2.2 – Operating Levels Table ......................................................................................................8

2B – Appropriations Language and Explanation of Changes.....................................................8

2C – Legislative Proposals..........................................................................................................8

Section 3 – Budget and Performance Plan..................................................................................9

3A – Financial Stability Oversight Council ................................................................................9

3.1.1 – Financial Stability Oversight Council Budget and Performance Plan ............................9

3B – Federal Deposit Insurance Corporation Payments .............................................................9

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan .........9
FSOC - 3

Section 1 – Purpose

1A – Mission Statement

To identify risks to the financial stability of the United States, to promote market discipline, and to 

respond to emerging threats to the stability of the U.S. financial system.

1.1 – Resource Detail Table

Dollars in thousands

Financial Stability Oversight Council FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE Amount FTE Amount FTE Amount FTE Amount FTE Amount

Revenue/Offsetting Collections

 Assessments 12,953 15,025 19,401 4,376 2.91%

 Unobligated Balances from Prior Years 11,524 11,099 11,801 702 6.32%

 Recoveries 359 450 450 0 0%

 Interest on Investments 3 6 7 1 16.67%

 Restoration of Sequestration Rescission 1,071 946 1,022 76 8.03%

Total Revenue/Offsetting Collections 25,909 27,526 32,681 5,155 18.73%

Other Resources:

 FSOC 22 6,236 34 8,133 36 8,519 2 386 5.88% 4.75%

 FDIC Payments 7,628 6,570 9,500 2,930 44.60%

Total Expenses 22 13,864 34 14,703 36 18,019 2 3,316 5.88% 22.55%

Sequestration Rescission (946) (1,022) 0 1,022 N/A

Net Results 11,099 11,801 14,662 2,861 24.24%

1B – Vision, Priorities, and Context

Prior to the 2008 financial crisis, the existing financial regulatory framework focused narrowly on 

individual institutions and markets, which allowed supervisory gaps to grow and regulatory 

inconsistencies to emerge – in turn, allowing arbitrage and weakened standards. The Dodd-Frank 

Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) established the Financial 

Stability Oversight Council (Council) with a clear statutory mandate that created for the first time 

collective accountability for identifying and responding to emerging threats to financial stability. 

The Council is chaired by the Secretary of the Treasury and consists of 10 voting members and five

nonvoting members. The Council brings together the expertise of the federal financial regulators, 

an insurance expert appointed by the President, and state regulators. 

The Council’s three primary purposes under the Dodd-Frank Act are:

1. To identify risks to the financial stability of the United States that could arise from the material 

financial distress or failure, or ongoing activities, of large, interconnected bank holding 

companies or nonbank financial companies, or that could arise outside the financial services 

marketplace.

2. To promote market discipline, by eliminating expectations on the part of shareholders, creditors, 

and counterparties of such companies that the U.S. government will shield them from losses in 

the event of failure.

3. To respond to emerging threats to the stability of the U.S. financial system.
FSOC - 4

The Council has important new authorities under the Dodd-Frank Act to:

• Collect information across the financial system: The Council has a duty to collect information 

across the financial system and to direct the Office of Financial Research (OFR) to collect 

additional information if necessary to assess risks to the financial system. The collection and 

analysis of that information aids the Council and the OFR in their shared goal of filling gaps in 

our knowledge so that regulators will be better equipped to identify risks and emerging threats

across the financial system.

• Designate nonbank financial companies for consolidated supervision: Before the financial crisis, 

some of the firms which posed the greatest risk to the financial system were not subject to 

adequate consolidated supervision. The Dodd-Frank Act gives the Council the authority to 

require consolidated supervision of nonbank financial companies, regardless of their corporate 

form.

• Designate financial market utilities and payment, clearing, or settlement activities as 

systemically important: The Dodd-Frank Act authorizes the Council to designate certain 

financial market utilities and payment, clearing, or settlement activities as systemically 

important, requiring them to meet prescribed risk management standards and submit to 

heightened oversight by the Federal Reserve, the Securities and Exchange Commission, or the 

Commodity Futures Trading Commission.

• Recommend stricter standards: The Council has the authority to recommend stricter standards 

for large, interconnected bank holding companies and nonbank financial companies designated 

by the Council for consolidated supervision. Moreover, if the Council determines that certain 

financial practices or activities create risks for U.S. financial markets, the Council may make 

recommendations to the relevant primary financial regulatory agencies to apply new or 

heightened standards and safeguards.

• Limit the activities of firms that pose a “grave threat” to financial stability: The Council has a 

significant role in determining whether action should be taken to break up a firm that poses a 

“grave threat” to the financial stability of the United States.

• Facilitate regulatory coordination: The Council has a statutory duty to facilitate information 

sharing and coordination among the member agencies regarding domestic financial services 

policy development, rulemaking, examinations, reporting requirements, and enforcement 

actions. Through this role, the Council helps eliminate gaps and weaknesses within the 

regulatory structure, to promote a safer and more stable financial system.

Over the last year, the Council has continued to make progress in fulfilling its mandate. The 

Council continued to evaluate whether to designate certain nonbank financial companies for Federal 

Reserve supervision and enhanced prudential standards, and conducted annual reviews for each of 

the three companies designated in 2013. In addition, the Council continued to monitor the eight 

financial market utilities (FMUs) that were designated as systemically important by the Council in 

2012. The Council also continued to identify and monitor potential risks to U.S. financial stability, 

including looking at potential risks related to cybersecurity, market structure, and central

counterparties. The Council also continued to analyze whether and how asset management products 

and activities could pose risks to U.S. financial stability, including by seeking public comment on 
FSOC - 5

potential risks. Finally, the Council fulfilled explicit statutory requirements, including the 

completion of its fifth annual report to Congress; and served as a forum for discussion and 

coordination among the member agencies implementing the Dodd-Frank Act. For example, in 

May, the Council established a new interagency Regulation and Resolution Committee to facilitate

information sharing and coordination regarding heightened prudential standards, resolution, and 

other areas of financial services policy development.

Over the next year, the Council will continue to evaluate nonbank financial companies for potential 

designation for Federal Reserve supervision and enhanced prudential standards; consider whether 

to designate additional FMUs as systemically important; monitor the financial system for emerging

risks; and facilitate interagency cooperation to identify and analyze potential emerging threats. The 

financial reforms in the Dodd-Frank Act are designed to create a more resilient financial system that 

is better able to absorb a wide range of shocks, whether they originate within the financial system, 

outside it, or a combination of the two. Regulators are making progress in implementing the DoddFrank Act in a consistent and coordinated manner, and the reform effort has proceeded along four 

broad dimensions: strengthening the safety and soundness of core financial institutions; making 

financial markets more resilient and transparent; implementing new authorities to resolve large, 

complex financial institutions; and enhancing investor and consumer protections. The Council will 

continue to facilitate interagency coordination and information sharing with respect to various 

regulatory initiatives. 

The Council is required by the Dodd-Frank Act to convene no less than quarterly, but in practice the 

Council has convened on a more frequent basis to share information on key financial developments, 

coordinate on regulatory implementation, and monitor progress on recommendations from the 

Council’s annual reports. The Council will continue to remain focused on both identifying nearterm threats and addressing structural vulnerabilities in the financial system. The Council continues 

to be committed to providing transparency regarding its decisions and has provided a significant 

amount of information about its activities to the public. As part of its effort, the Council conducts 

regular open meetings, publicly releases meeting agendas and minutes, issues annual reports that 

detail the Council’s views on potential risks in the financial system, and solicits public input on both 

the rules governing how the Council conducts its business and the substantive issues it considers.

The Council is an executive agency of government and is not an office or bureau of the Department 

of the Treasury. However, under the Dodd-Frank Act, the Council’s expenses are considered 

expenses of the OFR, an office within the Department of the Treasury.

Federal Deposit Insurance Corporation (FDIC) Payments

Section 210(n)(10) of the Dodd-Frank Act provides that certain reasonable implementation 

expenses of the FDIC incurred after the enactment of the Dodd-Frank Act shall be treated as 

expenses of the Council. The FDIC must periodically submit requests for reimbursement for 

implementation expenses to the Chairperson of the Council, who shall arrange for prompt 

reimbursement to the FDIC of reasonable implementation expenses. The expenses estimated are for 

rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act.
FSOC - 6

The Council’s activities support the Treasury Department’s FY 2014–2017 Strategic Plan.

Goal 1: Promote domestic economic growth and stability while continuing reforms of the 

financial system. Within Goal 1, the Council supports — 

• Objective 1.3: Complete implementation of financial regulatory reform initiatives,

continue monitoring capital markets, and address threats to stability.
FSOC - 7

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Financial Stability Oversight Council FTE Amount

FY 2016 Estimated 34 $14,703

Changes to Base:

Total FY 2016 Base 34 $14,703

Program Changes

Program Increases: 2 $3,346

Personnel 2 $416

FDIC Payments $2,930

Program Decreases: 0 ($30)

Non-Personnel ($30)

Total FY 2017 Estimated 36 $18,019

2A – Budget Increases and Decreases Description

Program Increases .....................................................................................+$3,346,000 / +2 FTE

Hiring Plan Adjustment +$416,000 / +2 FTE 

Five additional on-boards will be brought on in FY 2016. Steady state of 36 on-boards should be 

achieved by the end of FY 2016.

FDIC Payment Adjustment +$2,930,000 / + 0 FTE 

Due to unfilled vacancies in authorized positions that will be filled in FY 2016, and certain planned 

projects that were deferred to FY 2016, the FDIC is projecting expenses to be billed in FY 2017 of 

approximately $9.5 million.

Program Decreases ..........................................................................................-$30,000 / +0 FTE

Support Adjustment - $30,000 / -0 FTE 

A small downward adjustment will be realized in FY 2017 due to lower support costs.
FSOC - 8

2.2 – Operating Levels Table

Dollars in Thousands

Financial Stability Oversight Council FY 2015 FY 2016 FY 2017 

Object Classification Actual Estimated Estimated

11.0 Personnel compensation 2,967 3,439 3,751

12.0 Personnel benefits 776 1,146 1,250

Total Personnel Compensation and Benefits 3,743 4,585 5,001

21.0 Travel and transportation of persons 35 132 135

23.1 Rental payments to GSA 137 152 154

23.3 Communication, utilities, and misc charges 1 9 16

24.0 Printing and reproduction 14 15 17

25.1 Advisory and assistance services 244 300 315

25.2 Other services from non-Federal sources 16 18 21

25.3 Other goods and services from Federal sources1 9,309 8,932 11,789

26.0 Supplies and materials 332 485 490

31.0 Equipment 33 75 81

Total Non-Personnel 10,121 10,118 13,018

Total Budgetary Resources $13,864 $14,703 $18,019 

Budget Activities:

FSOC 6,236 8,133 8,519

FDIC Payments 7,628 6,570 9,500

Total Budgetary Resources $13,864 $14,703 $18,019 

FTE 22 34 36 

1 Includes FDIC Payments

2B – Appropriations Language and Explanation of Changes

The FSOC receives no appropriations from Congress.

2C – Legislative Proposals

The FSOC has no legislative proposals.
FSOC - 9

Section 3 – Budget and Performance Plan

3A – Financial Stability Oversight Council

($8,519,000 from Assessments): 

The Council has a clear statutory mandate to facilitate coordination among financial regulators and 

identify risks and respond to emerging threats to U.S. financial stability. 

There are no measures specified for managing Council performance at this time. Information on the 

Council is provided on www.treasury.gov, www.fsoc.gov, and member agency websites to provide 

transparency and accountability.

3.1.1 – Financial Stability Oversight Council Budget and Performance Plan

Dollars in Thousands

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $2,921 $5,428 $5,628 $7,660 $6,236 $8,133 $8,519

 Budget Activity Total $2,921 $5,428 $5,628 $7,660 $6,236 $8,133 $8,159

3B – Federal Deposit Insurance Corporation Payments

($9,500,000 from Assessments): 

Section 210(n)(10) of the Dodd-Frank Act provides that certain reasonable implementation 

expenses of the FDIC incurred after the enactment of the Dodd-Frank Act shall be treated as 

expenses of the Council. The FDIC must periodically submit requests for reimbursement for 

implementation expenses to the Chairperson of the Council, who shall arrange for prompt 

reimbursement to the FDIC of reasonable implementation expenses. The expenses estimated are for 

rule writing and resolution planning consistent with the FDIC's implementation of its 

responsibilities under Title II of the Dodd-Frank Act. 

3.1.2 – Federal Deposit Insurance Corporation Payments Budget and Performance Plan

Dollars in Thousands

Resource Level FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $0 $4,716 $6,327 $11,592 $7,628 $6,570 $9,500

 Budget Activity Total $0 $4,716 $6,327 $11,592 $7,628 $6,570 $9,500

Treasury Franchise Fund

FY 2017 

President’s Budget

February 9, 2016
TFF - 2

Table of Contents

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

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

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 8

2.1 – Budget Adjustments Table................................................................................................. 8

2A – Budget Increases and Decreases Description..................................................................... 8

2.2 – Operating Levels Table.................................................................................................... 10

2B – Appropriations Language and Explanation of Changes................................................... 11

2C – Legislative Proposals........................................................................................................ 11

Section 3 – Budget and Performance Plan ............................................................................... 12

3A – Shared Services Programs (SSP) ..................................................................................... 12

3.1.1 – Shared Services Programs (SSP) Budget and Performance Plan ................................. 14

3B – Administrative Services ................................................................................................... 14

3.1.2 – Administrative Services Budget and Performance Plan ............................................... 16

3C – Information Technology Services.................................................................................... 16

3.1.3 – Information Technology Services Budget and Performance Plan................................ 18

Section 4 – Supplemental Information...................................................................................... 19

4A – Summary of Capital Investments..................................................................................... 19

 4B – Treasury Franchise Fund Program Costs.........................................................20
TFF - 3

Section 1 – Purpose

1A – Mission Statement

To assist customer agencies in meeting their mission by providing responsive, customer-focused, 

cost-effective administrative and information technology support services.

1.1 – Resource Detail Table

1B – Vision, Priorities, and Context

The Treasury Franchise Fund’s (TFF) vision is to be a leader in providing responsible, effective 

administrative and information technology services through commitment to service, efficient 

operations, openness to change, and values-based behavior. The TFF achieves cost savings, 

promotes economies of scale, and increases productivity and efficiency in the use of resources by 

providing centralized services.

The TFF is a key representative of the Administration’s Management Agenda and the Cross 

Agency Priority Goals focused on shared services, smarter information technology (IT) delivery, 

and customer service. The TFF supports these goals through: 1) increasing Treasury’s capacity 

and ability to serve a broader customer base; and 2) providing low-cost, high-performing shared 

services for all interested agencies in the financial, Human Resources (HR), and technology 

areas.

The TFF authority permits a reasonable operating reserve to be maintained for shared service 

providers and will provide a platform for expanding Treasury’s shared services programs. The 

balance reflected in the net results is in general alignment with TFF reserve requirements.

Main Functions TFF, which includes the Shared Services Programs (SSP) and the 

Administrative Resource Center (ARC), provides financial management, procurement, travel, 

Dollars in Thousands

Treasury Franchise Fund

Budgetary Resources

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources

Administrative Services - - 3,000 3,000 N/A

Subtotal New Appropriated Resources - - 3,000 3,000 N/A N/A

Revenue/Offsetting Collections

Reimbursables 

Shared Services Programs (SSP) 218,360 219,794 230,329 10,535 4.79%

Administrative Services 131,746 169,084 165,492 (3,592) -2.12%

Information Technology Services 166,792 175,404 184,174 8,770 5.00%

Recovery from Prior Years 14,468 25,480 18,760 (6,720) -26.37%

Unobligated Balances from Prior Years 146,970 171,704 114,272 (57,432) -33.45%

Total Revenue/Offsetting Collections 0 678,336 0 761,466 0 713,027 0 -48,439 N/A -6.36%

Expenses/Obligations

Shared Services Programs (SSP) 251 225,024 286 219,794 287 230,329 1 10,535 0.35% 4.79%

Administrative Services 936 146,282 1,040 153,622 1,102 165,492 62 11,870 5.96% 7.73%

Information Technology Services 459 162,895 459 166,749 499 174,098 40 7,349 8.71% 4.41%

Total Expenses/Obligations 1,646 534,201 1,785 540,165 1,888 569,919 103 29,754 5.77% 5.51%

Net Results 144,135 221,301 143,108 -78,193 -35.33%

Total Budgetary Resources 1,646 534,201 1,785 540,165 1,888 572,919 103 32,754 5.77% 6.06%

FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Actual Estimated Estimated $ Change % Change
TFF - 4

HR, IT, and other administrative services to federal customers, including a majority of the 

Department of the Treasury Bureaus, on a fully cost recoverable, fee-for-service basis.

Strategic Goals

• Establish a level of transparency and a governance process that sets the standard for 

government service providers.

• Maintain status as a Financial Management Federal Shared Service Provider (FSSP).

• Continually improve TFF’s operational service levels.

• Implement process improvements and efficiency efforts to reduce costs to customers.

• Promote and maximize shared services benefits in support of Treasury and government-wide 

initiatives.

• Continue to assess and report TFF’s performance and provide timely feedback to customers.

Relationship to Treasury Strategic and Priority Goals

TFF supports the Treasury’s Strategic Goal number 3, to “fairly and effectively reform and 

modernize federal financial management, accounting, and tax systems” and Strategic Goal number 5, 

to “create a 21st-century approach to government by improving efficiency, effectiveness, and 

customer interaction.” Based on the Strategic Objective Annual Review process, TFF’s strategic 

goals align specifically with Objectives 3.1, 5.3, and 5.4. Below are the objectives included in 

the strategic plan:

• Objective 3.1 – Improve the efficiency and transparency of federal financial management 

and government-wide accounting.

• Objective 5.3 – Promote efficient use of resources through shared services, strategic 

sourcing, streamlined business processes, and accountability.

• Objective 5.4 – Create a culture of service through relentless pursuit of customer value.

FY 2017 Priorities 

• Maintain service levels and achieve cost efficiencies wherever possible.

• Expand shared services opportunities throughout Treasury and to federal agencies in order to 

reduce costs to all customers.

• Serve as a champion of the shared services initiative.

• SSP is committed to pricing transparency across business lines, showing each component of 

a customer’s pricing and how all pricing is calculated across the customer base. SSP will 

continue to utilize SharePoint and customer advisory boards to share information and gather 

input from its customers.

• ARC will continue to expand use of Business Process Management and Lean Six Sigma 

principles throughout the Administrative business line.

• Align the resources of the Information Technology business line with the services provided 

to internal and external customers.

Key Accomplishments and Challenges

• Achieve program savings through modernization –

o System development and stabilization efforts underway in FY 2015 and continuing into 

FY 2016 include: Payment Application Modernization; Pay.gov; Treasury Automated 
TFF - 5

Auction Processing System; Treasury Offset Program Next Generation; Treasury Retail 

Investment Manager.

o The Office of Civil Rights and Diversity (OCRD) continues to realize savings through 

managing a consolidated complaints center in support of all Treasury offices.

o The Treasury Executive Institute program entered the TFF in FY 2015. Efficiencies will 

be gained through economies of scale that will be passed on to customers as the user base 

continues to expand.

o Bureau-wide Messaging and Collaboration (M&C) will be implemented by the end of 

FY 2016. The M&C will provide Fiscal Service with a shared email and file 

management system, as well as enhanced tools for collaboration including online 

meetings and document sharing.

• Cyber Initiatives –

o Facilitate the rollout and use of Continuous Diagnostics and Mitigation, a Department of 

Homeland Security (DHS) mandated initiative to establish enterprise cybersecurity 

solutions that provides a consistent government-wide set of information security 

continuous monitoring.

o Support the rollout and use of Data Loss Prevention technology, which is a critical tool 

for preventing the accidental and intentional loss of sensitive information, such as 

personally identifiable information.

o Advance cyber threat defense capabilities of the Government Security Operations Center 

and provide additional visibility and services to Bureaus, including forensics and 

malware examinations, threat activity analysis, and enhanced incident reporting.

• Maintain Cost Levels in Growing Programs – For FY 2015, ARC continued to implement 

process improvements and efficiency efforts to reduce costs to customers. In addition to the 

ongoing challenge of minimizing prices, another key challenge for ARC has been 

maintaining services and customer satisfaction levels while simultaneously pursuing cost 

reduction and containment initiatives, such as transitioning customers to the standardized 

service delivery model and balancing service levels with customer demand and funding 

levels.

• Modernizing Internal Financial Management and Processes – In FY 2015, the Shared 

Services Division (SSD) developed an automated budget loading system to allow for 

centralized access to funding levels for each SSP. SSD designed and developed a new tool 

known as COBRA that will be implemented starting in FY 2016. COBRA aims to automate 

the SSP budget formulation process, creating workflow efficiencies by linking this process 

with the pricing, billing, collecting, and budget loading processes and creating centralized 

access for all SSP data.

• Investments in the HR Connect Line of Business – SSP is making investments to better 

manage and administer the core platform. This will strengthen customer service for existing 

customers and allow for the expansion of products and services to other agencies.

• Treasury Network (TNet): Consolidation, Networx Recompete Planning – Beginning in 

FY 2016, SSP will merge the TNet Circuits program with the TNet program to better align 

these costs with the TNet project management office staff, who are responsible for managing 

the payments and general finances of the circuits for all Bureaus and the TNet program in 

general. Separately, the TNet team will begin gathering Treasury Bureau requirements and 
TFF - 6

planning for the upcoming transition, pending the completion of the General Services 

Administration (GSA) Networx contract recompete.

• Continue Customer Expansion – The ARC has transitioned the Department of Housing and 

Urban Development (HUD) into all service lines (Financial Management, Procurement, 

Human Resources, and Travel). The transition of HUD to full service Human Resources and 

Travel was completed in FY 2015. HUD is also a full service customer of Financial 

Management and platform Procurement Services as of October 2015. Program system 

integration will continue throughout FY 2016. Completion of this project will improve 

HUD’s compliance with the Federal Financial Management Improvement Act as well as 

improve decision making capabilities with the full integration of services in a core financial 

system.

• Federal Shared Service Provider (FSSP) for Financial Management Designation – One of 

only four designated FSSPs, ARC continues to work with Office of Management and Budget 

(OMB) and the Office of Financial Innovation and Transformation (OFIT) to implement 

OMB M-13-08 and successfully transition federal agencies as they require upgrades or 

significant investments to their existing financial management system. Additionally, ARC is

an active participant with OFIT and the other FSSPs to develop the initial Financial 

Management catalog. ARC management is transitioning the organization to be positioned 

competitively for the future shared service environment. ARC remains committed to utilize 

technology and align work processes in preparation for on-boarding larger customers (e.g. 

cabinet level departments) and ensuring compliance with new reporting requirements (e.g. 

DATA Act). To minimize the impact of cost increases, ARC will implement process 

improvements where possible through the expansion of lean business process management. 

ARC’s goal is to keep price rate increases below inflation while maintaining the current 

service level agreements. ARC is improving pricing transparency by providing both 

customer specific performance metrics and a Transparency file. The Transparency file 

reflects the budget for each service provided, detailing the cost model allocations that are 

used to determine the annual customer prices.

• DATA Act Funding for ARC – All costs associated with implementing DATA Act 

requirements are included in the shared services pricing model and would be funded 

through customer prices increases. The Budget requests $3 million in discretionary 

funding for the Administrative Resource Center to implement requirements of the DATA 

Act for Federal agencies. This funding will remain available until expended, provided, that 

such amount shall be in addition to any other amounts available for such purpose.

• Attestation Engagement & Financial Statement Audit Updates – ARC undergoes an annual 

Type II Statements on Standards for Attestation Engagements (SSAE) 16 review. SSAE 16 is 

an attestation engagement of internal controls, in which management is attesting, in writing, 

to the fair presentation and design of controls. ARC has received 12 consecutive unmodified

opinions for these types of engagements. The SSAE 16 results enhance customer confidence 

and reduce annual financial statement audit costs. TFF has received 16 consecutive 

unmodified financial statement audit opinions.

Larger operating environment

In FY 2017, TFF will maintain its commitment to excellence and continue to meet all strategic 

and financial goals and benchmarks. TFF continues to strive for growth opportunities to expand 

existing service lines and provide other valuable in-demand administrative services in an era of 
TFF - 7

fiscal constraint. In order to meet the goal of reducing costs to customers, TFF will maximize 

shared service value and continue to look for opportunities to improve the efficiencies in 

business processes and technologies used in service delivery.

The governance structure for the TFF is composed of three major governing bodies:

1. Assistant Secretary for Management – Responsible for the corporate management and 

oversight for the TFF;

2. Shared Services Council (SSC) – Serves as an advisory body for all TFF programs and 

ensures customers’ perspectives are included in the decision-making process. The SSC plans 

to align and enhance shared services across the Department, and

3. Financial Management Oversight Committee – Functions as a due diligence working group 

that performs preliminary reviews of new shared services and financial and budgetary 

policies and procedures prior to any new activities being considered and presented to the 

SSC.

In addition to the creation of the Shared Services Council, the TFF strives to incorporate the 

customer perspective into the decision-making process. Customer involvement and input 

provide an opportunity for the SSC to obtain constructive and directed feedback and ensure that 

customer concerns are addressed.
TFF - 8

Section 2 – Budget Adjustments and Appropriations Language

2.1 – Budget Adjustments Table

2A – Budget Increases and Decreases Description

Adjustment to Estimate ..............................................................................-$6,179,000 / -1 FTE

Adjustment to Estimate (ARC) -$14,685,000 / -10 FTE 

Administrative Services overestimated the budgetary resources necessary to service the 

Department of Housing and Urban Development.

Adjustment to Estimate (SSP) +$8,506,000 / +9 FTE 

Key investments include several new cybersecurity initiatives and customer support requests, 

such as the improvement of service delivery to support higher customer demand for the HR 

Connect, Enterprise Content Management (ECM), and Enterprise Data Management (EDM) 

programs.

Maintaining Current Levels (MCLs) ......................................................+$9,186,000 / +0 FTE

Pay-Raise +$1,958,000 / +0 FTE 

Funds are required for the proposed January 2017 pay-raise.

Pay Annualization +$650,000 / +0 FTE 

Funds are required for annualization of the January 2016 pay-raise.

Dollars in Thousands

Treasury Franchise Fund FTE Amount

FY 2016 Estimate 1,786 $546,344 

 Changes to Base

 FY 2016 Revised Estimate 1,785 $540,165 

 Adjustment to Estimate (ARC) -10 ($14,685)

 Adjustment to Estimate (SSP) 9 $8,506 

 Maintaining Current Levels (MCLs) 0 $9,186 

 Pay-Raise 0 $1,958 

 Pay Annualization 0 $650 

 Non-Pay 0 $6,578 

 Subtotal Changes to Base 0 $9,186 

Total FY 2017 Base 1,785 $549,351 

 Program Changes

 Program Increases 103 $23,568 

 DATA Act Implementation (ARC) 0 $3,000 

 Customer Growth (ARC) 102 $13,854 

 Customer Growth (SSP) 1 $6,714 

 Subtotal Program Changes 103 $23,568 

Total FY 2017 Request 1,888 $572,919 
TFF - 9

Non-Pay +$6,578,000 / +0 FTE 

Funds are required for non-labor costs such as travel, contracts, rent, and equipment.

Program Increases ..............................................................................+$23,568,000 / +103 FTE

DATA Act Implementation (ARC) +$3,000,000 / +0 FTE (Discretionary Funding)

These costs represent discretionary funding for the Treasury Franchise Fund (Administrative 

Resource Center – ARC) to implement the DATA Act for their client agencies. This funding 

replaces the amount that would have otherwise passed on to ARC clients. ARC will continue 

their engagement of client agencies and identify their unique implementation needs. ARC will 

implement the DATA Act requirements, and submit the data to the Department of the Treasury 

for publication on USAspending.gov.

Customer Growth (ARC) +$13,854,000 / +102 FTE 

Customer growth is expected within the Administrative and Information Technology Services 

budget activities. Expanding services to additional customers allows TTF’s fixed costs to be 

distributed across a greater base. In addition to the economic benefits, customers will receive 

professional services that are consistent in both quality and cost. These benefits strongly align 

with Treasury’s goals of fiscal responsibility and the further standardization of systems and 

business processes through shared services employed across the government.

Key Program Investments (SSP) +$6,714,000 / +1 FTE 

Estimated costs to transition the Treasury Network (TNet) circuits to a new environment as part 

of the GSA Networx contract re-compete, as well as a staffing adjustment to reflect the OCRD’s 

workload following the complaints center transition.
TFF - 10

2.2 – Operating Levels Table

Dollars in Thousands

Treasury Franchise Fund FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 122,942 137,650 149,378

11.3 - Other than full-time permanent 931 928 1,009

11.5 - Other personnel compensation 1,646 2,059 2,239

11.6 - Overtime 1,425 1,513 1,356

11.7 - Other Personnel Compensation 745 497 531

11.9 - Personnel Compensation (Total) 127,689 142,647 154,513

12.0 - Personnel benefits 41,399 47,117 49,500

Total Personnel and Compensation Benefits $169,088 $189,764 $204,013 

21.0 - Travel and transportation of persons 1,506 2,151 2,328

22.0 - Transportation of things 25 25 25

23.1 - Rental payments to GSA 251 5,450 5,659

23.2 - Rental payments to others 75 305 290

23.3 - Communication, utilities, and misc charges 66,160 61,865 64,401

24.0 - Printing and reproduction 3 5 5

25.1 - Advisory and assistance services 46,501 23,325 30,053

25.2 - Other services 36,196 17,358 17,874

25.3 - Other purchases of goods & serv frm Govt accounts 111,274 107,959 112,309

25.4 - Operation and maintenance of facilities 0 10 10

25.7 - Operation and maintenance of equip 72,488 91,241 93,607

26.0 - Supplies and materials 857 911 976

31.0 - Equipment 29,733 39,796 41,369

41.0 - Grants, subsidies, and contributions 15 0 0

91.0 - Confidential Expenditures 30 0 0

Total Non-Personnel 365,114 350,401 368,906

Total Budgetary Resources $534,202 $540,165 $572,919 

Budget Activities:

Administrative Services (Discretionary Appropriation) 0 0 3,000

Shared Services Programs (SSP) 225,024 219,794 230,329

Administrative Services 146,282 153,622 165,492

Information Technology Services 162,895 166,749 174,098

Total Budgetary Resources $534,201 $540,165 $572,919 

FTE 1,646 1,785 1,888
TFF - 11

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

TREASURY FRANCHISE FUND

ADMINISTRATIVE SERVICES

For provision of necessary financial and administrative 

support services by the Administrative Resource Center to 

implement requirements of the Digital Accountability and 

Transparency Act (DATA Act; Public Law 113-101) for 

Federal agencies,$3,000,000, to remain available until 

expended, provided, that such amount shall be in addition to 

any other amounts available for such purpose.

The FY 2017 President’s 

Budget requests funding to 

minimize risk and enable 

compliance with the DATA 

ACT of 2014.

2C – Legislative Proposals

The Franchise Fund has no legislative proposals.
TFF - 12

Section 3 – Budget and Performance Plan

3A – Shared Services Programs (SSP)

($230,329,000 from expenses/obligations): 

SSP supports the goals of shared services by offering administrative and information technology

services on a competitive basis, as well as delivering outstanding customer service. The Shared 

Services Division (SSD) evaluates and examines any new franchise services that may be added 

to the TFF before they are presented to the SSC for consideration.

TFF supports Treasury’s Strategic Objective number 5.3, to “promote efficient use of resources 

through shared services, strategic sourcing, streamlined business processes, and accountability,” 

by providing reliable, consistent, and cost-effective administrative support services.

The service providers under the SSP are organizational components of the Assistant Secretary 

for Management and Chief Financial Officer (ASM/CFO) within the Departmental Offices (DO).

The SSP provides services within the following program categories:

• Enterprise Business Solutions (EBS) – Provides support through HR Connect, which is 

Treasury’s enterprise Human Capital system. HR Connect is a Human Resources Line of 

Business shared service provider supporting 23 Treasury Bureaus and offices as well as 11

non-Treasury agencies. The EBS provides full lifecycle HR processing such as recruiting, 

personnel actions, payroll, and new employee processing. HR Connect provides 

functionality that is interoperable and scalable, and enables customers to meet their Human 

Capital strategic goals. Additionally, through its Enterprise Data Management team, EBS

provides data architecture and integration services that currently support Workforce 

Analytics (available through HR Connect) and Data ‘N Analytics (DNA, available through 

desktop visualization tools).

• Infrastructure Operations – Provides management of all telecommunications programs 

within the Office of the Chief Information Officer (OCIO). Infrastructure Operations 

provides strategic direction to telecommunications programs, ensures that costs are managed

according to best practices, and reduces costs where possible.

• Cybersecurity – Provides Critical Infrastructure Protection and Information Security services

and supports the direct protection of designated Treasury critical infrastructure/key resources 

against terrorist activity. Cybersecurity also supports the protection (confidentiality, 

integrity, and availability) of the Department’s systems and the information they process. 

Cybersecurity also coordinates the Department’s overall activities to implement the Federal 

Information Security Management Act of 2002.

• IT Strategy & Technology Management – Develops an IT Strategy and Transition Plan to 

meet Treasury’s mission requirements and strategic goals. The Performance Measurement 

and Governance program collaborates with Bureaus and partners with Capital Planning and 

Investment Control to ensure the management of IT portfolios aligns with IT transition plans. 

• Additional Programs –

o Financial System Integration – Develops and maintains the Financial Analysis and 

Reporting System (FARS).

o Office of Civil Rights and Diversity – Provides a service to process complaints under the 

Equal Employment Opportunity Program (mandated by 29 CFR 1614).
TFF - 13

o Office of Emergency Preparedness – Ensures continuity of the Treasury Department’s 

essential functions during disasters and administers emergency mitigation, preparedness, 

response, and recovery activities.

o Office of Small and Disadvantaged Business Utilization – Advises and aids the Bureaus 

on small business policies and initiatives.

o Treasury Operations Excellence – Provides Lean Six Sigma training and other services to 

help Treasury and other federal agencies use entrusted resources more effectively and 

efficiently.

o Privacy, Transparency, and Records – Provides assistance to Treasury customers to 

collect, protect, retain, preserve, disclose, and provide access to Treasury’s information 

resources pursuant to U.S. laws.

o Printing and Graphics – Provides printing services to Treasury customers and assists 

customers in planning and designing printed publications.

o Treasury Executive Institute – Provides continuous growth and learning opportunities for 

executives, executive development candidates, and senior managers. Promotes 

marketplace of ideas by exposing executives to the best practices in leadership models.

o Pass-through Programs – Pass-through payments that support government-wide 

initiatives.

Description of Performance:

• Customer Satisfaction with Financial Planning Staff Survey Results – The Shared Services 

Division (SSD) established a customer satisfaction measure starting in FY 2014. Results 

reflect the percentage of customers that rate their communication experience with the SSD 

Financial Planning staff as either “Good” or “Excellent” on a 5-point scale. The FY 2015

target was 60 percent, and actual results were 69 percent. However, the number of customers 

taking the survey increased from 19 in FY 2014 to 26 in FY 2015. The SSD will continue to 

push towards a higher score on this measure through more customer outreach on billing, 

pricing, financial management and the performance of each of the SSPs.

• ECM/Web Solutions – Response time to resolve ECM and Web Solutions non-critical 

issues/helpdesk tickets is targeted to be within 10 - 15 business days.

• HR Connect: Customer Satisfaction Annual Survey Results – EBS continues to improve and 

strives to maintain the level of customer satisfaction for HR Connect as customer 

expectations are rising. To improve the user experience, EBS has been working for several 

years on InCompass, an HR portal. The FY 2011 results are not directly comparable to those 

from later years as the data collection methodology changed between FY 2011 and FY 2012. 

No surveys were administered for FY 2009 and FY 2010 due to a system platform upgrade.

• HR Connect: Employee Update Files – Transmission of employee update files were made to 

the specified external benefit provider within established timeframes. EBS continues to 

improve and stay in its acceptable range, which is relatively wide due to the limited number 

of transmitted files. EBS’s targets are consistent with the targets used use for quarterly 

Capital Planning and Investment Control process and the Office of Personnel Management

reporting for HR Connect.

• HR Connect: Number of Tickets Escalated to Tier 3 – EBS continues to maintain its current 

target levels. This target is based on implementing process improvements in the Design 

Documents and Quality Assurance environments. 
TFF - 14

3.1.1 – Shared Services Programs (SSP) Budget and Performance Plan

Dollars in Thousands

Shared Services Programs (SSP) Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses

/Obligations $0 $0 $175,258 $187,498 $171,861 $225,024 $219,794 $230,329 

Budget Activity 

Total $0 $0 $175,258 $187,498 $171,861 $225,024 $219,794 $230,329 

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Customer Satisfaction 

with Financial Planning 

Staff %

N/A N/A N/A 57.2 59.1 69.0 62.0 70.0 72.0

ECM/Web Solutions 

Response Time to 

Resolve ECM and Web 

Solutions Non-Critical 

Issues/Help Desk Tickets 

within 10-15 Business 

Days

N/A N/A 92.8 96.8 95.0 82.0 90.0 90.0 90.0

HR Connect Customer 

Satisfaction % N/A 93.0 90.0 90.0 90.1 84.0 90.0 85.0 91.0

HR Connect Employee 

Update FilesTransmission of 

Employee Update Files 

Made to the Specified 

External Benefit Provider 

Within Established 

Timeframes

N/A N/A 98.3 96.8 100.0 97.3 90.0 90.0 90.0

HR Connect Number of 

Tickets Escalated to Tier 

3

N/A N/A 303.0 212.0 242.0 128.0 222.0 200.0 200.0

Key: DISC - Discontinued 

3B – Administrative Services

($168,492,000 from expenses/obligations): 

ARC’s administrative services activity supports OMB’s and the Department of the Treasury’s 

shared services concept, which furthers “good government” by standardizing the administrative 

financial systems and processes required to operate federal organizations. Value is provided 

through cost sharing opportunities in systems capital investments as well as reduced operating 

costs by providing consolidated, high quality, value added services. ARC has three important 

roles within Treasury:

• OMB designated FSSP for the Financial Management Line of Business.

• Support organization for Treasury's Human Resources Line of Business.

• Designated provider for the Budget Formulation and Execution Line of Business.

These lines of business provide administrative support functions with a focus on financial 

management, procurement, travel, and human resources. The program's success is evidenced by 

the increasing demand for services.

Description of Performance:
TFF - 15

• Administrative Services proposes to discontinue the performance measure, Procurement 

Savings Negotiated, and create a new measure, Timely Contract Issuance. 

• Administrative Services also measures indirect costs as a percentage of total costs. This 

provides TFF management with a measure that encourages efficiency in administrative 

operations and helps to ensure services are provided at the lowest possible cost. TFF will 

continue to pursue customer growth and evaluate indirect cost expenditures to maintain 

actual performance at or below the established target.

Administrative Services created 10 new operational metrics in FY 2014 for each service line. 

These measures provide actual performance of each service line in isolation rather than as a 

blended organizational measure. Administrative Services will continue to pursue customer 

growth, seek business process improvements, and evaluate direct and indirect cost expenditures 

to manage performance.
TFF - 16

3.1.2 – Administrative Services Budget and Performance Plan

Dollars in Thousands

Administrative Services Budget Activity

Resource 

Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

Expenses/

Obligations $93,046 $109,555 $116,571 $127,747 $131,578 $146,282 $153,622 $165,492 

Discretionary 

Appropriation $0 $0 $0 $0 $0 $0 $0 $3,000 

Budget 

Activity Total $93,046 $109,555 $116,571 $127,747 $131,578 $146,282 $153,622 $168,492 

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Direct Cost as a 

Percentage of 

Award Dollars

N/A N/A N/A N/A 0.4 0.1 0.5 0.5 0.5

Direct Cost per 

AP Transaction N/A N/A N/A N/A 65.4 54.22 74.0 73.0 65.0

Direct Cost per 

FTE in Core HR 

Services

N/A N/A N/A N/A 976.3 963.0 1,100.0 1,075.0 1,050.0

Direct Cost per 

System User -

Oracle

N/A N/A N/A N/A 18,261.0 21,724.0 18,315.0 18,300.0 18,300.0

Direct Cost per 

Travel Voucher N/A N/A N/A N/A 24.8 21.1 28.0 27.0 27.0

First Call 

Resolution -

Oracle %

N/A N/A N/A N/A 61.0 57.0 50.0 50.0 50.0

Hiring 

Timeliness % N/A N/A N/A N/A 89.0 87.0 85.0 85.0 85.0

Indirect Cost 

Admin Services 

%

N/A N/A 24.0 23.0 27.1 27.5 22.0 25.0 25.0

Procurement 

Savings 

Negotiated %

N/A N/A N/A N/A 11.3 2.8 6.0 DISC DISC

Timely Contract 

Issuance N/A N/A N/A N/A N/A N/A N/a 90.0 90.0

Travel Voucher 

Payments 

Timeliness %

N/A N/A N/A N/A 99.0 99.0 98.0 98.0 98.0

Unqualified Audit 

Opinions % N/A N/A N/A N/A 96.0 100.0 100.0 100.0 100.0

Key: DISC -

Discontinued 

3C – Information Technology Services

($174,098,000 from expenses/obligations): 

The Information Technology Services Activity provides shared services to a variety of federal 

customers, both internal and external to Treasury. Value is provided through IT infrastructure 

consolidation and standardized IT service delivery in a modern, technically innovative, and

secure environment. Customers avoid costly, long-term development projects when they take 

advantage of TFF’s shared services and environments. Services include information systems 

security, hosting, and software engineering. Additionally, end-user support and professional 

services are provided to the Fiscal Service and TFF.
TFF - 17

TFF, designated by the OMB as a Shared Service Center for Information Systems Security Line 

of Business, provides agencies with proven Security Assessment and Authorization and 

Continuous Monitoring services. TFF, authorized by the Department, is one of two Treasury 

trusted internet connection providers and hosts Treasury’s public domain name system. TFF 

delivers information security support to other federal agencies, while improving quality, 

accelerating delivery, and reducing customer costs.

Secure hosting services are provided for production, contingency, and development/test regions.

TFF has critical supporting roles in the Public Key Infrastructure (PKI) Shared Service Provider 

designation of the Department of the Treasury. TFF's PKI and directory experience makes endto-end identity management solutions available to customers.

Rapid Application Development techniques and a demonstrated ability to integrate commercially 

available solutions combine to provide high quality software engineering services at a 

competitive price.

Effective in FY 2017, TFF will expand its use of Information Technology Services performance 

measures to better track each of its business lines by discontinuing its current metric and 

establishing the following new measures:

1) Fiscal IT Hosting – Percentage of time service is operational (uptime excluding planned 

maintenance) 

2) Percentage of Annual Testing/Annual Assessment to 800‐53 standard. 

3) Percentage of capital investment projects with improved rating (red to yellow/green or 

yellow to green) on the IT Dashboard within 90 days.

4) Percentage of POA&M's Scheduled for Closure in Last 30 Days Closed Early or On‐

Time.

5) Number of engagements in strategic sourcing or “Service Provider” or other shared 

services opportunity.
TFF - 18

3.1.3 – Information Technology Services Budget and Performance Plan

Dollars in Thousands

Information Technology Services Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $73,858 $72,905 $149,581 $152,050 $149,992 $162,895 $166,749 $174,098 

Budget Activity Total $73,858 $72,905 $149,581 $152,050 $149,992 $162,895 $166,749 $174,098 

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Fiscal IT Hosting - Percentage 

of Time Service is Operational 

(Up Time Excluding Planned 

Maint.)

N/A N/A N/A N/A N/A N/A N/A N/A 99.0

Indirect Cost IT Services % N/A N/A 19.0 22.0 27.1 11.4 19.0 19.0 N/A

Number of Engagements in 

Strategic Sourcing or "Service 

Provider" or Other Shared 

Services Opportunity

N/A N/A N/A N/A N/A N/A N/A N/A 2.0

Percentage of Annual 

Testing/Annual Assessment to 

800-53 Standard

N/A N/A N/A N/A N/A N/A N/A N/A 90.0

Percentage of Capital 

Investment Projects with 

Improved Rating (Red to 

Yellow/Green or Yellow to 

Green) on the IT Dashboard 

within 90 Days

N/A N/A N/A N/A N/A N/A N/A N/A 100.0

Percentage of POA&Ms 

Scheduled for Closure in Last 

30 Days - Closed Early or On 

Time

N/A N/A N/A N/A N/A N/A N/A N/A 90.0

Key: DISC - Discontinued 
TFF - 19

Section 4 – Supplemental Information

4A – Summary of Capital Investments

ARC’s planned investments enhance the capabilities and capacity of our financial management 

shared services. Investing in Service Oriented Architecture will allow the Bureaus to streamline 

application connections resulting in benefits that include reducing development time, using 

industry development best practices for coding efforts, allowing real time processing of 

transactional data between systems, and system independent communication between systems. 

In addition, this effort will provide more flexibility and more efficient interfaces with customers' 

third-party applications. 

ARC also plans to expand the use of an enterprise-wide financial statement reporting tool and 

update operational (transactional) reporting and analytical tools in order to provide a more 

efficient interpretation of large volumes of data, long-term stability, and improved presentation 

and distribution capabilities.

A summary of capital investment resources, including major information technology and 

non-information technology investments, can be viewed and downloaded at:

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.
TFF - 20

4B – Treasury Franchise Fund Program Costs

This information is being provided to fulfill requirements of Section 122, Public Law 113-235, Consolidated Appropriations Action, 2015.

Treasury Franchise Fund – Shared Services Programs FY 2015 Total Charges by Customer

Customers

Enterprise 

Business Solutions

Infrastructure 

Operations Cybersecurity

IT Strategy and 

Technology 

Management

Non-Information 

Technology 

Services Totals

Alcohol and Tobacco Tax and Trade Bureau 235,503 599,478 35,188 21,156 222,785 1,114,110

Alcohol, Tobacco, Firearms and Explosives 1,313,131 31,495 139,601 1,484,227

Architect of the Capitol 245,719 75,390 321,109

Bureau of Engraving and Printing 1,388,692 3,944,341 146,540 84,494 1,120,685 6,684,752

Bureau of the Fiscal Service 3,903,276 835,028 178,136 104,904 1,530,851 6,552,195

Commodities Futures Trading Commission 72,904 72,904

Community Development Financial Institutions Fund 216,904 25,255 5,548 57,041 118,842 423,590

Consumer Financial Protection Bureau 1,553,046 3,387,268 118,558 21,217 381,407 5,461,496

DC Pensions 12,203 93,261 1,314 790 41,940 149,508

Department of Commerce 6,897,492 141,888 399,523 7,438,903

Department of Education 122,479 122,479

Department of Homeland Security - Customs and Immigration Service 77,278 77,278

Department of Homeland Security – Headquarters 196,841 196,841

Department of Housing and Urban Development 3,423,471 33,158 231,619 3,688,248

Department of Justice – Antitrust 43,742 43,742

Department of Justice – Headquarters 126,853 126,853

Department of Labor 4,722,468 67,767 218,429 5,008,664

Departmental Offices Office of Technical Assistance 14,475 104,129 1,460 878 39,494 160,436

Departmental Offices S&E 2,192,605 7,651,368 685,592 54,383 2,737,424 13,321,372

Departmental Offices Terrorism Risk Insurance Program 6,321 51,795 730 439 18,089 77,374

DHS - U.S. Secret Service 1,492,029 27,245 61,383 1,580,657

Environmental Protection Agency 284,952 284,952

Executive Office for Asset Forfeiture 959,232 199,400 2,117 1,273 64,879 1,226,901

Export Import Bank of the Inspector General 5,832 5,832

Federal Communications Commission 51,375 4,759 56,134
TFF - 21

Customers

Enterprise 

Business Solutions

Infrastructure 

Operations Cybersecurity

IT Strategy and 

Technology 

Management

Non-Information 

Technology 

Services Totals

Federal Deposit Insurance Corporation 446,018 17,841 463,859

Federal Emergency Management Agency 396,152 24,938 421,090

Federal Financing Bank 21,097 181,255 2,555 1,536 47,186 253,629

Federal Reserve Board 5,832 5,832

Financial Crimes Enforcement Network 175,740 584,516 25,259 15,187 186,183 986,885

Financial Stability Oversight Council 40,980 124,783 1,825 1,097 31,525 200,210

General Accountability Office 670,554 13,336 31,347 715,237

General Services Administration 131,227 131,227

Internal Revenue Service 40,867,896 61,775,729 6,518,767 3,779,165 14,713,327 127,654,884

Office of Financial Research 366,590 5,529,214 194,121 9,437 179,334 6,278,696

Office of Financial Stability 1,344,440 538,348 9,199 5,531 344,566 2,242,084

Office of Government Ethics 5,832 5,832

Office of Inspector General 119,071 543,535 16,333 9,349 147,560 835,848

Office of the Comptroller of the Currency 1,910,541 1,232,322 288,585 173,508 971,307 4,576,263

Overseas Private Investment Corporation 13,123 13,123

Peace Corps 636,358 25,454 661,812

Small Business Administration 495,995 5,625 501,620

Small Business Lending Fund Administration 18,075 129,529 1,825 1,097 90,458 240,984

Special Inspector General for TARP 164,032 770,827 29,712 8,427 143,802 1,116,800

State Small Business Credit Initiative Administration 14,249 72,609 1,022 615 24,707 113,202

TFF Administrative Resource Center 3,248,504 1,966,799 100,453 60,397 220,842 5,596,995

Treasury Inspector General for Tax Administration 421,177 2,067,125 235,664 36,738 231,868 2,992,572

U.S. Mint 1,738,076 1,450,285 158,586 82,255 1,066,798 4,496,000

United States Agency for International Development 1,972,561 20,235 95,479 2,088,275

Veterans Benefits Administration 86,027 86,027

GRAND TOTAL 83,696,048 94,193,323 8,759,089 4,530,914 27,094,142 218,359,543

CONT. Treasury Franchise Fund – Shared Services Programs FY 2015 Total Charges by Customer
TFF - 21

Treasury Franchise Fund – Administrative Resource Center FY 2015 Total Charges by Customer

Customers 

Financial 

Management 

Services

FMLoB FEES

Human 

Resource 

Services

Procurement 

Services Travel Services

Information 

Technology 

Services

Grand Total

ACCESS BOARD 200,133 60,790 132,529 37,965 431,417 

ADMIN OFFICES OF THE US COURTS 260,306 260,306 

ADMINISTRATION FOR CHILDREN AND FAMILIES 96,474 6,990 103,464 

ADMINISTRATIVE RESOURCE CENTER 18,167,519 18,167,519 

AFRICAN DEVELOPMENT FOUNDATION 1,025,661 453,894 40,468 1,520,023 

AGENCY FOR INTERNATIONAL DEVELOPMENT - OIG 85,542 85,542 

AGENCY FOR INTERNATIONAL DEVELOPMENT U.S. 83,497 91,112 174,609 

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU 784,180 917,000 665,473 226,384 2,593,037 

ALCOHOL TOBACCO FIREARMS AND EXPLOSIVES 533,464 533,464 

ARMED FORCES RETIREMENT HOME 1,119,024 1,409,419 829,578 36,457 3,394,478 

BUREAU OF ENGRAVING AND PRINTING 688,934 98,503 787,437 

BUREAU OF THE FISCAL SERVICE 11,633,169 4,488,062 4,868,990 412,832 137,104,922 158,507,975 

CDFI PROGRAM FUND 938,890 168,527 318,345 33,419 1,459,181 

CENTER FOR DISEASE CONTROL 1,099,092 1,099,092 

CHEMICAL SAFETY AND HAZARD BOARD 256,589 22,398 39,980 318,967 

CONSUMER FINANCIAL PROTECTION BUREAU 1,256,958 3,504,004 1,217,161 1,099,637 4,100 7,081,860 

CONSUMER PRODUCT SAFETY COMMISSION 10,938 10,938 

CORPORATION FOR NATIONAL AND COMMUNITY SERVICE 88,755 88,755 

DC PENSIONS PROJECT OFFICE 1,773,907 32,097 22,884 1,353 1,616,413 3,446,654 

DEFENSE NUCLEAR FACILITIES SAFETY BOARD 81,969 81,969 

DENALI COMMISSION 308,156 61,120 116,303 25,215 510,794 

DEPARTMENT OF AGRICULTURE 159,282 159,282 

DEPARTMENT OF COMMERCE 95,819 262,700 358,519 

DEPARTMENT OF DEFENSE 187,342 187,342 

DEPARTMENT OF EDUCATION 219,288 219,288 

DEPARTMENT OF ENERGY 155,110 124,236 279,346 

DEPARTMENT OF HEALTH & HUMAN SERVICES 219,288 97,229 316,517 

DEPARTMENT OF HOMELAND SECURITY 299,887 187,342 506,434 993,663 

DEPARTMENT OF HOMELAND SECURITY - CIS 590,800 590,800 

DEPARTMENT OF HOMELAND SECURITY - OIG 715,609 317,677 1,033,286 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 8,662,388 230,616 11,720,729 1,311,651 1,934,025 23,859,409 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT - OIG 1,597,120 244,817 1,841,937 

DEPARTMENT OF JUSTICE 124,236 124,236 

DEPARTMENT OF JUSTICE - CIVIL DIVISION 107,632 107,632 

DEPARTMENT OF LABOR 211,900 141,399 353,299 
TFF - 23

Customers 

Financial 

Management 

Services

FMLoB FEES

Human 

Resource 

Services

Procurement 

Services Travel Services

Information 

Technology 

Services

Grand Total

DEPARTMENT OF STATE 553,956 95,892 649,848 

DEPARTMENT OF THE INTERIOR 1,313,550 124,236 1,437,786 

DEPARTMENT OF TRANSPORTATION 230,616 230,616 

DEPARTMENT OF VETERANS AFFAIRS 158,998 158,998 

DEPARTMENT OF VETERANS AFFAIRS - OIG 1,440,764 1,440,764 

DEPARTMENT OF VETERANS AFFAIRS - TAC 475,474 475,474 

ELECTION ASSISTANCE COMMISSION 371,779 127,607 19,731 519,117 

ENVIRONMENTAL PROTECTION AGENCY 95,819 48,700 144,519 

FARM CREDIT ADMINISTRATION 311,070 46,925 234,018 592,013 

FARM CREDIT SYSTEM INSURANCE CORPORATION 158,890 1,274 4,165 164,329 

FEDERAL EMERGENCY MANAGEMENT AGENCY 54,982 54,982 

FEDERAL HOUSING FINANCE AGENCY 837,629 218,974 327,232 1,383,835 

FEDERAL HOUSING FINANCE AGENCY - OIG 315,540 455,244 380,814 84,185 1,235,783 

FEDERAL LABOR RELATIONS AUTHORITY 413,124 48,610 34,813 496,547 

FEDERAL MARITIME COMMISSION 264,555 61,414 20,583 346,552 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION 338,571 145,670 21,931 36,369 542,541 

FINANCIAL CRIMES ENFORCEMENT NETWORK 593,012 217,635 692,250 63,943 2,250,890 3,817,730 

FOOD AND DRUG ADMINISTRATION 680,584 680,584 

GENERAL SERVICE ADMINISTRATION 41,332 41,332 

GULF COAST ECOSYSTEM RESTORATION COUNCIL 198,395 26,567 13,258 238,220 

INTER AMERICAN FOUNDATION 670,735 727,437 28,341 - 1,426,513 

IRS CRIMINAL INVESTIGATION DIVISION 509,216 509,216 

MERIT SYSTEMS PROTECTION BOARD 432,782 24,327 56,236 513,345 

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION 172,721 124,236 459,233 756,190 

NATIONAL ARCHIVES & RECORDS ADMINISTRATION 3,533,196 521,163 338,196 4,392,555 

NATIONAL MEDIATION BOARD 316,155 229,568 51,583 108,300 705,606 

NATIONAL SCIENCE FOUNDATION 132,262 2,511 74,447 209,220 

NUCLEAR REGULATORY COMMISSION 41,332 41,332 

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 227,428 17,245 20,758 265,431 

OFFICE OF ADMINISTRATION, EXEC OFF OF THE PRES 1,150,913 300,784 402,457 1,854,154 

OFFICE OF FINANCIAL STABILITY 319,244 252,963 39,217 30,435 641,859 

OFFICE OF GOVERNMENT ETHICS 311,280 204,873 199,824 23,401 739,378 

OFFICE OF INFORMATION TECHNOLOGY 696,078 862,046 1,195,401 101,540 2,855,065 

OFFICE OF NATIONAL DRUG CONTROL POLICY 4,100 4,100 

OFFICE OF PERSONNEL MANAGEMENT 41,332 41,332 

OFFICE OF TECHNICAL ASSISTANCE (OTA) 582,817 25,459 38,852 458,234 1,105,362 

OFFICE OF THE COMPTROLLER OF THE CURRENCY 134,792 134,792 

CONT. Treasury Franchise Fund – Administrative Resource Center FY 2015 Total Charges by Customer
TFF - 24

Customers 

Financial 

Management 

Services

FMLoB FEES

Human 

Resource 

Services

Procurement 

Services Travel Services

Information 

Technology 

Services

Grand Total

OFFICE OF THE INSPECTOR GENERAL 310,334 321,078 144,884 64,570 840,866 

PENSION BENEFIT GUARANTY CORPORATION 177,897 177,897 

RAILROAD RETIREMENT BOARD 21,396 21,396 

SECURITIES AND EXCHANGE COMMISSION 139,992 139,992 

SMALL BUSINESS ADMINISTRATION 67,475 67,475 

SOCIAL SECURITY ADMINISTRATION 67,475 604,681 672,156 

SPECIAL INSPECTOR GENERAL - TARP 310,821 455,186 264,186 114,732 1,144,925 

TREASURY DEPARTMENTAL OFFICES 3,781,301 5,536,797 1,415,565 729,478 4,427,155 15,890,296 

TREASURY FRANCHISE FUND/SHARED SERVICES PROGRAM 519,951 95,892 503,349 321,504 97,840 1,538,536 

TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION 680,115 1,232,370 655,071 293,287 2,860,843 

TRICARE MANAGEMENT ACTIVITY 57,829 57,829 

TRUST FUND - BLACK LUNG DISABILITY 179,956 179,956 

TRUST FUND - FEDERAL DISABILITY 499,290 499,290 

TRUST FUND - FEDERAL HOSPITAL INSURANCE 516,550 516,550 

TRUST FUND - FEDERAL OLD AGE & SURVIVORS 499,290 499,290 

TRUST FUND - FEDERAL SUPPLEMENT INSURANCE 559,685 559,685 

TRUST FUND - OIL SPILL LIABILITY 132,763 132,763 

TRUST FUND - UNEMPLOYMENT 707,257 707,257 

UNITED STATES AIR FORCE 1,748,347 1,748,347 

UNITED STATES MINT 7,963,572 2,888,130 2,592,069 222,347 13,666,118 

US ARMY CORPS OF ENGINEERS BALTIMORE DISTRICT 17,000 17,000 

US COURT OF APPEALS FOR VETERANS 225,739 7,266 10,199 243,204 

US HOUSE OF REPRESENTATIVES 120,473 120,473 

USDA FOOD AND NUTRITION - 

USDA FOREST SERVICE 121,939 121,939 

USDA NATURAL RESOURCE CONSERVATION SERVICE 164,544 164,544 

USDA OCIO INTERNATIONAL TECHNOLOGY SERVICES 1,137,729 1,137,729 

USDA OFFICE OF INSPECTOR GENERAL 67,409 67,409 

Grand Total 63,164,562 3,096,857 40,476,473 20,666,155 11,430,597 166,888,178 305,722,822 

CONT. Treasury Franchise Fund – Administrative Resource Center FY 2015 Total Charges by Customer
TFF - 25

Shared Services Programs and Administrative Resource Center Activity Descriptions

The Shared Services Programs (SSP) within the Treasury Franchise Fund provides common 

administrative services that benefit customers both within Treasury and outside agencies. The 

SSP provides these services on a centralized basis, where they can be administered more 

advantageously and more economically than they could be provided otherwise. Descriptions of 

these services are provided below.

Enterprise Business Solutions (EBS) is an organization within the U.S. Department of the 

Treasury’s (Treasury) Departmental Offices (DO), Office of the Chief Information Officer 

(OCIO) that creates, implements, and maintains information technology solutions in an efficient 

and innovative manner through shared and scalable products, platforms and services. EBS offers 

its customers a variety of services available through four (4) distinct product suites; Enterprise 

Content Management, Enterprise Data Management, HR Connect and Web Solutions. HR 

Connect, an Office of Personnel Management officially designated Human Resources Line of 

Business (HR LOB), Shared Service Center (SSC) offers HR solutions across the federal space. 

Infrastructure Operations includes services such as the Enterprise Infrastructure Services (EIS), 

Treasury Enterprise Voice (TEV), Treasury Network (TNet), and the Treasury Enterprise 

Identity Credential and Access Management (TEICAM) services. The EIS program offers 

services including the development and implementation of additional enterprise-wide 

infrastructure capabilities and services available to Treasury Departmental Offices and other 

customers; such as cloud, big data, and others.

The TEV program provides telecommunications capabilities to customers. These services 

include internal telephony service, Voice Mail with email notification, connections to the public 

switched telephone network (PSTN), local and long distance calling, Audio Conferencing and 

certain Video Conferencing, Automatic Call Distribution, Interactive Voice Response Systems, 

Call Center Services, Custom Emergency 911 Services, associated cabling and physical plant 

maintenance and the related support and maintenance for these systems. TNet provides a secure 

enterprise voice, video and data wide area network that connects authorized domestic and 

international government facilities across the US, the US territories, and at select US Embassies 

via the State Department's network. TNet Wide Area Network (WAN) service is a cost effective 

enterprise network supporting Bureau business needs and enabling agency technological 

initiatives, such as Data Center Consolidation and Mobile Treasury. TEICAM provides 

requirements; coordination, management processes, technical coordination for Personal Identity 

Verification (PIV), credential and access management compliance, Public Key Infrastructure 

(PKI), and establishes the Enterprise Identity Credential and Access Management (EICAM) 

capabilities Treasury-wide.

Cybersecurity services include supporting the direct protection of designated Treasury Cyber 

Critical Infrastructure/Key Resources against terrorist activity. The Government Secure 

Operations Center serves as the focal point for management of cyber incidents and is responsible 

for security detection, analysis and incident management lifecycle practices to improve the 

Department’s overall security posture. IT Strategy and Technology Management services include 

assisting customers with collaboration efforts to develop and implement procedures and policies 
TFF - 26

to manage Treasury’s IT portfolio; partners with Enterprise Architecture Programs so 

management of IT portfolios aligns with IT transition plans (e.g., 

refresh/replacement/consolidation of IT systems and facilities) and Department Strategic Plans. 

Additional services include developing and managing an IT Strategy and Transition Plan to meet 

Treasury’s mission requirements and strategic goals. This entails collaborating with Bureaus and 

partnering with Performance Measurement and Governance to ensure management of the 

Treasury IT portfolio aligns with IT transition plans.

Some of the non-IT related services include the Civil Rights and Diversity program (CRD), 

Financial Systems Integration (FSI), Office of Emergency Preparedness (OEP), Small and 

Disadvantaged Business Utilization (SDB) and Treasury Executive Institute (TEI). CRD 

administers an Equal Opportunity Program, mandated by 29 CFR 1614, to provide equal 

opportunity in employment for all persons and to prohibit discrimination in employment, 

including providing prompt, fair and impartial processing of complaints. FSI develops and 

maintains the Financial Analysis and Reporting System, which performs analysis and reporting 

functions for proprietary and budgetary accounting, audit follow-up, management control, and 

risk management. OEP supports Treasury efforts to prepare for emergencies. This program 

supports emergency preparedness and business continuity planning exercises. SDB advises 

customers on small business policies and initiatives; training and advising small businesses on 

how to do business with the Department of the Treasury; advising and training procurement 

officials on small business matters; monitoring and reporting progress toward procurement goals. 

TEI is a shared service provider and center of excellence for delivering and administering high 

quality, cost-effective executive and leadership training and development programs that align to 

and advance the Federal Government’s and Treasury’s mission and performance. TEI sponsors 

and promotes the continued growth, development and success of the Department of the 

Treasury’s Executive Corps, senior leaders and those of its client partners.

The Administrative Resource Center (ARC) within the Treasury Franchise Fund Administrative 

Business Line provides services within the following major service lines, as follows: Financial 

Management Service Line, Procurement Service Line, Travel Service Line, and Human 

Resources Service Line. The Financial Management Service Line provides a complete range of 

accounting and budget services. Total accounting and budget support include transaction 

processing, system setup and support, and comprehensive reporting is offered. Specific financial 

management services include: processing accounting transactions for single, multi, and no-year 

appropriated funds, as well as revolving and trust funds, preparing financial statements and other 

useful financial management reports, providing financial audit support, and budget services 

including payroll projection.

The Procurement Service Line offers support ranging from simplified acquisitions to full-scale 

large contract acquisitions. Contract administration services are also available. Additionally, a 

web-based procurement system, PRISM, that is fully integrated with our accounting system and 

staff dedicated to configuration and maintenance as well as assisting end-users with software 

functionality questions, is offered.

The Travel Service Line provides a full-service, stand-alone travel agency for federal agencies 

compliant with the President's Management Agenda (PMA) and E-Gov requirements and 

adheres to all Federal Travel Regulations. Use of a web-based travel expense reporting software, 
TFF - 27

Concur CGE, supports the processing of travel documents for any itinerary. Further, multiple 

travel management centers with highly experienced travel agencies are used. In addition, full

relocation services and management for transferring employees and their agencies is 

provided. ARC uses moveLINQ, a relocations expense management system developed by

mLINQS, to process relocations for its customers. The Human Resources Service Line

delivers a full range of integrated professional HR services, including: position classification, 

staff acquisition, payroll, processing, and recordkeeping, employee benefits, labor and

employee relations, workers' compensation, and personnel security.

Pricing for the Above Activities

SSP utilizes many different cost methodologies in determining the customer prices. Some

examples of its costs drivers include an FTE-Based methodology that incorporates the cost 

allocation of the FY 2015 FTE levels from the FY 2016 President's Budget Appendix. 

Another example is an Account Based methodology, whereby cost allocations are based on 

FY 2015 Budget Levels from the FY 2016 President’s Budget Appendix. An example of a 

cost driver within the Account Based methodology is the average number of prior year

Treasury Information Executive Repository (TIER) records from pay period 00 through pay

period 12, FY 2012, 2013, and 2014. Another example would be the total number of NC4 

locations for each customer (NC4 is the company that provides the NC4 Risk Center system, 

which allows the Treasury Operations Center to monitor Treasury facilities and personnel on a

global scale). The Procurement Transaction cost methodology - cost allocation is based upon 

the number of Federal Procurement Database Next Generation (FPDNG) transactions from the

FPDSNG for the most recent prior year. Also, some programs utilize the print job valuebased cost methodologies - cost allocations based on the value of print jobs from a specific

period of time. The usage-based cost methodologies - cost allocations is based on multiple

usage cost drivers.

Determining charges for ARC services begins with a process similar to that used by

appropriated agencies whereby labor and non-labor needs are identified for a future year within 

the budget formulation process. The formulated budget is then allocated to each service. These

allocations are guided by existing organizational structure and management input. The

overhead budgets are then allocated to the services based on each service’s proportion of direct 

FTEs. Each Service Budget is then allocated to customers receiving that service based on each

customer’s percentage of total drivers. Drivers are the objective measure of effort defined 

specifically for each service. Each year, reserve requirements are calculated for each service

line. These requirements are then compared to estimated actual reserves by service line. When 

differences are identified, the customers’ costs by service are adjusted pro rata within each 

service line to reduce or eliminate projected differences. Fiscal Service Executive Management 

review pricing recommendations and provide the final approval of customer pricing.

Customers’ Role in Governing the Treasury Franchise Fund

The Treasury Franchise Fund incorporates a governance process in which two governing bodies 

review, vet, and approve various shared services matters. The Financial Management Oversight 

Committee (FMOC) serves as a due diligence working group to perform preliminary reviews of 

new shared services. Reviews will be conducted prior to any new activities being considered

and presented to the Shared Services Council (SSC). The FMOC will support and review

Treasury Franchise Fund related matters for the Assistant Secretary for Management and SSC. 
TFF - 28

The FMOC may also review Treasury Franchise Fund procedures and policies that are for new 

shared services lines of business entering the Treasury Franchise Fund, which includes but is not 

limited to unique policies that are currently in existence in the Treasury Franchise Fund. In order

to ensure that the customer perspective is accounted for in decision-making, there is a process in 

place by which Treasury and non-Treasury organizations can provide feedback and input into the 

Treasury Franchise Fund governance issues. Customer involvement and input will provide an 

opportunity for the SSC to obtain constructive feedback and ensure customer concerns are 

addressed.

Treasury Forfeiture Fund

FY 2017

President’s Budget

February 9, 2016
TEOAF - 2

Table of Contents

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

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

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2.2 – Operating Levels Table...................................................................................................... 7

2B – Appropriations Language and Explanation of Changes..................................................... 7

2C – Legislative Proposals.......................................................................................................... 7

Section 3 – Budget and Performance Plan ................................................................................. 8

3A – Asset Forfeiture Fund......................................................................................................... 8

3.1.1 – Asset Forfeiture Fund Budget Activity Budget and Performance Plan.......................... 9

Section 4 – Supplemental Information...................................................................................... 10

4A – Summary of Capital Investments..................................................................................... 10
TEOAF - 3

Section 1 – Purpose

1A – Mission Statement

To affirmatively influence the consistent and strategic use of asset forfeiture by our participating 

agencies to disrupt and dismantle criminal enterprises.

The Treasury Executive Office for Asset Forfeiture (TEOAF) administers the Treasury 

Forfeiture Fund. The Treasury Forfeiture Fund (the Fund) is the receipt account for the deposit of 

non-tax forfeitures made pursuant to laws enforced or administered by participating Treasury and 

Department of Homeland Security agencies. The Fund was established in 1992 as the successor 

to the Customs Forfeiture Fund.

1.1 – Resource Detail Table

Dollars in Thousands

Treasury Forfeiture Fund FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Interest 0 955 0 1,000 0 1,000 0 0 0 0.00%

Restored Temporary Rescission 0 836,000 0 944,000 0 876,000 0 (68,000) 0 -7.20%

Restored Sequestration 0 124,923 0 399,291 0 97,302 0 (301,989) 0 -75.63%

Forfeiture Revenue 0 4,632,791 0 485,909 0 413,000 0 (72,909) 0 -15.00%

Recovery from Prior Years 0 25,567 0 3,588,568 0 30,000 0 (3,558,568) 0 -99.16%

Unobligated Balances from Prior Years 0 144,147 0 97,184 0 157,131 0 59,947 0 61.68%

Total Revenue/Offsetting Collections 0 $5,764,383 0 $5,515,952 0 $1,574,433 0 ($3,941,519) .2.26.00 -71.46%

Expenses/Obligations

Asset Forfeiture

Mandatory Obligations1

25 4,302,751 25 481,159 25 450,000 0 (31,159) 0 -6.48%

Secretary's Enforcement Fund 0 21,157 0 65,560 0 30,000 0 (35,560) 0 -54.24%

Super Surplus Obligations 0 0 0 0 0 0

2 0 0 0 N/A

Total Expenses/Obligations 25 $4,323,908 25 $546,719 25 $480,000 0 ($66,719) 0 -12.20%

Rescissions/Cancellations

Sequestration Reduction 0 (399,291) 0 (97,302) 0 0

3 0 97,302 0 -100.00%

Temporary Rescission 0 (944,000) 0 (876,000) 0 0 0 876,000 0 -100.00%

Permanent Cancellation 0 0 0 (3,800,000) 0 (657,000) 0 3,143,000 0 -82.71%

Appropriations Precluded from Obligation 0 0 0 (38,800)4 0 (38,800) 0 0 0 0.00%

Total Rescissions/Cancellations 0($1,343,291) 0 ($4,812,102) 0 ($695,800) 0 $4,116,302 .00 -85.54%

Net Results 0 $97,184 0 $157,131 0 $398,633 0 $241,502 .00 153.69%

1. The Treasury Forfeiture Fund is staffed by Departmental Offices employees and positions are funded via reimbursable agreement.

2. Treasury is planning for a tentative $100 million Super Surplus in FY 2017 and will submit a spend plan to Congress once more is known 

about actual collections and expenses. See pages 6-7 for additional details.

3. Treasury will calculate the FY 2017 sequestration reduction once the OMB Report to Congress on the Joint Committee Sequestration for 

Fiscal Year 2017 is released.

4. P.L. 114-113 cancelled $3,800,000,000 of the $3,838,800,000 forfeited in United States v. BNPP, No.14 Cr. 460 (S.D.N.Y.). Treasury is 

unable to obligate the remaining $38,800,000 due to a provision in section 405, Title IV limiting the use of these funds.

1B – Vision, Priorities and Context

The Treasury Forfeiture Fund (the Fund) is the receipt account for the deposit of non-tax 

forfeitures made pursuant to laws enforced or administered by bureaus participating in the Fund. 

Special funds are federal fund collections that are earmarked by law for a specific purpose. The 

enabling legislation for the Treasury Forfeiture Fund (31 U.S.C. § 9705) defines those purposes 

for which Treasury forfeiture revenue may be used. In addition to the agencies listed below, the 

funds can be allocated to other law enforcement entities that do not have forfeiture authority, 

such as the Financial Crimes Enforcement Network (FinCEN), Federal Law Enforcement 
TEOAF - 4

Training Center (FLETC), and Alcohol & Tobacco Tax and Trade Bureau (TTB).

The principal revenue-producing member bureaus include the Internal Revenue Service’s 

Criminal Investigation (IRS-CI), Customs and Border Protection (CBP), Immigration and 

Customs Enforcement (ICE), and the U.S. Secret Service (Secret Service). The latter three 

bureaus are part of the Department of Homeland Security pursuant to the Homeland Security Act 

of 2002. These member bureaus are joined by the U.S. Coast Guard, Department of Homeland 

Security, as a result of the longstanding close law enforcement relationship with CBP and ICE. 

Vision: As the administrator for the Treasury Forfeiture Fund, TEOAF performs the following 

functions:

• Promotes the use of proceeds from asset forfeiture to fund programs and activities aimed at 

disrupting criminal enterprises and enhancing forfeiture capabilities;

• Manages revenue to cover the costs of asset forfeiture programs;

• Promotes the financial stability and vitality of the Fund;

• Identifies and addresses program risks.

TEOAF focuses on supporting cases and investigations that result in high impact forfeitures. 

This approach will have the greatest impact on criminal organizations and facilitate the ultimate 

mission of the Fund to disrupt and dismantle criminal enterprises. To this end, TEOAF 

prioritizes major case initiatives when allocating funding to member agencies, including the 

purchase of evidence and information, joint operations expenses, investigative expenses leading 

to seizure, and asset identification and removal teams.

Goals and Relationship to Departmental Goal: The goal of the Fund is to support the asset 

forfeiture programs of member law enforcement bureaus in a manner that results in federal law 

enforcement’s continued and effective use of asset forfeiture as a high-impact law enforcement 

sanction to punish and deter criminal activity. “High impact” is defined as a cash forfeiture 

equal to or greater than $100,000 in value. 

The Fund supports Treasury Strategic Goal 4: Safeguard the financial system and use financial 

measures to counter national security threats. A primary feature of asset forfeiture as a criminal 

sanction is that it disrupts and dismantles criminal syndicates by removing their financial assets 

and viability. This feature of asset forfeiture relates to Treasury Strategic Objective 4.2: Develop, 

implement, and enforce sanctions and other targeted financial measures.

Priorities: Asset seizure and forfeiture is a priority for the Fund’s participating law enforcement 

organizations and is linked directly to the National Money Laundering and Southwest Border 

Strategy. TEOAF has identified the following priorities for mission success: 

• Continue to educate and focus stakeholders on the vision and mission of Treasury’s multiDepartmental asset forfeiture program (i.e., affirmatively influence the consistent and 

strategic use of asset forfeiture by law enforcement bureaus participating in the Fund to 

disrupt and dismantle criminal enterprises); 

• Focus resources in a manner that supports law enforcement’s implementation of the National 

Money Laundering Strategy, Southwest Border Strategy, and counter-terrorism financing 

efforts;
TEOAF - 5

• Use forfeiture resources to promote program excellence and strengthen the overall quality of 

criminal investigations led by participating law enforcement bureaus; and 

• Develop and modify forfeiture training and awareness programs to be responsive to the 

current environment and continually re-evaluate training to incorporate best practices. 

Context: The Fund continues to represent the forfeiture interests of law enforcement 

components of the Department of the Treasury and the Department of Homeland Security. In the 

midst of the budget constraints and policy changes, the Fund’s law enforcement bureaus continue

the difficult work of enforcing and applying asset forfeiture as a criminal sanction.

FY 2015: The Consolidated Appropriations Act of 2015 (P.L. 113-235) temporarily rescinded 

$944 million of the Fund’s unobligated balances. In addition, approximately $399 million was

sequestered from the Fund as part of the government-wide sequestration order. The Fund 

received collections from two major cases that contributed to total revenue of approximately $4.6

billion. The proceeds were used to fund investigations, asset management, joint operations, 

remission and mitigation payments, equitable sharing, and the cancellation enacted by the 

Consolidated Appropriations Act, 2016 (P.L. 114-113).

FY 2016: P.L. 114-113 cancelled $3.8 billion of the Fund’s budget authority and temporarily 

rescinded $876 million in unobligated balances. An estimated $97 million will be sequestered 

from the Fund as part of the government-wide sequestration order. TEOAF forecasts another 

successful forfeiture program in FY 2016 with estimated revenue of $487 million from forfeiture 

deposits and interest. This estimate does not account for ongoing investigations where TEOAF 

lacks sufficient information to project an outcome. TEOAF estimates $481 million in mandatory 

authority expenses and $66 million in Secretary’s Enforcement Fund (SEF) expenses in FY 

2016. SEF expenses are higher than previously estimated in the FY 2016 President’s Budget due 

to a new case that is expected to result in a deposit of $46 million.

FY 2017: TEOAF intends to maintain a dynamic and evolving asset forfeiture program that is 

responsive to the needs of member law enforcement bureaus. Treasury proposes a $657 million

permanent cancellation of unobligated balances and will provide regular updates to Congress on 

the Fund’s balances. The Fund estimates $414 million in revenue from forfeiture deposits and

interest in FY 2017.

Super Surplus: Treasury proposes a $100 million Super Surplus in FY 2017. The Super 

Surplus authority, established by Congress in 31 U.S.C. § 9705 (g)(4)(B), allows TEOAF to use 

unobligated balances to fund priority law enforcement initiatives once enough funds have been

reserved for the next fiscal year’s operating expenses. Since the Fund’s establishment in 1992, 

the Super Surplus has been used to fund high priority information technology projects, multiyear 

criminal investigations, pilot programs, and urgent homeland security needs at no cost to 

taxpayers. The investigations funded by the Super Surplus bring criminals to justice and 

generate a significant share of the revenue used to pay for forfeiture program expenses, including 

the management of seized and forfeited assets. 

Due to a shortage of resources, TEOAF was unable to declare a Super Surplus in FY 2015 and 

does not expect to in FY 2016. FY 2015 marked the first time in the Fund’s 22 years history that 
TEOAF - 6

law enforcement was unable to rely on this funding source. Member agencies have less funding 

to sustain long-term investigations and have postponed several projects.

TEOAF intends to reverse this trend in FY 2017 by proposing a $100 million in Super Surplus. 

A Super Surplus of this size would allow TEOAF to fund backlog of investigations, technology 

upgrades, and infrastructure projects at the member agencies. Provided funding is available, 

TEOAF will prioritize the following initiatives with the FY 2017 Super Surplus:

• Priority investigative areas at IRS-CI such as identity theft, as well as IT infrastructure 

upgrades to enhance investigative data analysis;

• Technology upgrades at ICE, specifically the Technical Operations division within 

Homeland Security Investigations (HSI), for operational support of investigations 

involving trade-based money laundering; computer/mobile forensics and cyber 

investigation capabilities, and initiatives supporting major financial investigations;

• On-going efforts at CBP to strengthen outbound monitoring infrastructure, as well as 

enhancing Border Patrol capabilities and upgrades of seizure vaults; and

• Secret Service network intrusion and cybercrime investigations.

If funding is available, Treasury will submit a Super Surplus plan to Congress in accordance with

31 U.S.C. § 9705.
TEOAF - 7

Section 2 – Budget Adjustments and Appropriation Language

2.2 – Operating Levels Table

Dollars in Thousands

Treasury Forfeiture Fund FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

25.2 - Other services 53,327 38,270 40,600

25.3 - Other purchases of goods & serv frm Govt accounts 164,212 109,344 116,000

41.0 - Grants, subsidies, and contributions 4,106,3691 399,105 323,400

Total Non-Personnel 4,323,908 546,719 480,000

Total Budgetary Resources $4,323,908 $546,719 $480,000

Budget Activities:

Asset Forfeiture Fund 4,323,908 546,719 480,000

Total Budgetary Resources $4,323,908 $546,719 $480,000

FTE 25 25 25

1. The $3.589 billion obligated in FY 2015 for victim’s compensation related to the BNP Paribas case was permanently cancelled by 

P.L. 114-113, which increased recoveries in FY 2016, as shown in Table 1.1.

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

TREASURY FORFEITURE FUND

Of the unobligated balances available under this 

heading, [$700,000,000]$657,000,000 are 

[rescinded]hereby permanently cancelled not later 

than September 30, 2017. (Department of the 

Treasury Appropriations Act, 2016.)

The addition of “not later than 

September 30, 2017” will allow 

Treasury to manage the timing of the 

reduction and help prevent cash flow

disruptions.

2C – Legislative Proposals

The Fund has no legislative proposals for FY 2017.
TEOAF - 8

Section 3 – Budget and Performance Plan

3A – Asset Forfeiture Fund

($480,000,000 in obligations from revenue/offsetting collections): 

The function of the Fund is to ensure resources are managed to cover the costs of an effective 

asset seizure and forfeiture program, including the costs of seizing, evaluating, inventorying, 

maintaining, protecting, advertising, forfeiting, and disposing of property. The goal owner for 

this budget activity is the Director of TEOAF. 

The Treasury Forfeiture Fund is special fund with permanent indefinite budget authority. 

Special fund collections are earmarked by law for a specific purpose. The enabling legislation 

for the Fund (31 U.S.C. § 9705) defines those purposes for which the Fund’s revenue may be 

used. Revenue deposited to the Fund can be allocated and expended as the result of the

permanent indefinite appropriation provided by Congress. 

The forfeiture process begins once currency or property is seized. Seized currency is deposited 

into a suspense account (holding account) until forfeited. At that time, the proceeds are

transferred (deposited) to the Fund as revenue. Forfeited property is usually sold and the 

proceeds are also deposited into the Fund as revenue. This revenue composes the budget 

authority for meeting the obligations and expenses of the program. Expenses of the Fund are set 

in a relative priority so that operating costs are met first and may not exceed revenues.

Spending Authorities:

Mandatory authority is generally used for operating expenses, including storing and maintaining 

seized and forfeited assets, liens and mortgages, investigative expenses incurred in seizure, 

information and inventory systems, remissions, victim restoration, and certain costs of local 

police agencies incurred in joint law enforcement operations. Following seizure, equitable 

shares are paid to state and local law enforcement agencies that contributed to the seizure activity 

at a level proportionate to their involvement, as required by the enabling legislation.

Secretary’s Enforcement Fund (SEF) authority is derived from equitable shares received from 

the Department of Justice (DOJ) or U.S. Postal Service (USPS) forfeitures. These shares 

represent Treasury’s participation in investigative efforts that result in forfeiture. SEF revenue is 

available to member agencies for any federal law enforcement purpose.

Super Surplus (SS) authority represents the remaining unobligated balance at the close of the 

fiscal year after an amount is reserved for the Fund’s operations in the next fiscal year. This 

balance can be used for any federal law enforcement purpose.

Description of Performance Measure:

The Fund continues to track the performance of the participating law enforcement bureaus by 

measuring the percentage of forfeited cash proceeds from high impact cases, which are cases that 

result in a cash forfeiture deposit of $100,000 or more. 
TEOAF - 9

Focusing on strategic cases and investigations that result in high impact forfeitures will do the 

greatest damage to criminal organizations while accomplishing the ultimate objective to disrupt 

and dismantle criminal activity. Member law enforcement bureaus participating in the Fund 

have met or exceeded the performance target in nine of the eleven fiscal years since the measure 

was established in FY 2002. As a result, TEOAF increased the target from 75 percent in FY 

2010 to 80 percent beginning in FY 2011. The Fund maintains a target of 80 percent, 

recognizing that some otherwise high priority cases may not produce a forfeiture of $100,000.

In FY 2015, the member bureaus exceeded the target 80 percent by more than 18 percentage 

points. The target has been set at 80 percent for FY 2016 and FY 2017.

3.1.1 – Asset Forfeiture Fund Budget Activity Budget and Performance Plan

Dollars in Thousands

Asset Forfeiture Fund Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $852,078 $590,415 $527,417 $908,113 $787,849 $4,323,908 $546,719 $480,000

Budget Activity Total $852,078 $590,415 $527,417 $908,113 $787,849 $4,323,908 $546,719 $480,000

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Target Actual Estimated Estimated

Percent of Forfeited 

Cash Proceeds 

Resulting from HighImpact Cases (%) 

93.11 91.44 76.38 95.01 86.73 80.00 98.25 80.0 80.0

Key: DISC - Discontinued
TEOAF - 10

Section 4 – Supplemental Information

4A – Summary of Capital Investments

TEOAF is a component of the Departmental Offices (DO) and is included in the DO capital 

investment plan.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at: http://www.treasury.gov/about/budget-performance/pages/summary-of-capitalinvestments.aspx. 

This website also contains a digital copy of the plan.

Bureau of Engraving and 

Printing

FY 2017

President’s Budget

February 9, 2016
BEP - 2

Table of Contents

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

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

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2.1 – Budget Adjustments Table................................................................................................. 7

2A – Budget Increases and Decreases Description..................................................................... 7

2.2 – Operating Levels Table...................................................................................................... 9

2B - Appropriations Language and Explanation of Changes ..................................................... 9

2C – Legislative Proposals.......................................................................................................... 9

Section 3 – Budget and Performance Plan ............................................................................... 10

3A – Manufacturing.................................................................................................................. 10

3.1.1 – Manufacturing Budget and Performance Plan.............................................................. 11

Section 4 – Supplemental Information...................................................................................... 12

4A – Summary of Capital Investments..................................................................................... 12
BEP - 3

Section 1 – Purpose

1A – Mission Statement

To develop and produce United States currency notes trusted worldwide.

1.1 – Resource Detail Table

Dollars in Thousands

Bureau of Engraving and Printing FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Other Income

Federal Reserve Notes 0 617,364 0 848,940 0 836,335 0 (12,605) .00 -1.48%

Other Security Products 0 3,000 0 5,000 0 5,000 0 0 .00 N/A

Currency Reader Program 0 16,125 0 10,000 0 5,000 0 (5,000) .00 -50.00%

Total Revenue/Offsetting Collections 0 636,489 0 863,940 0 846,335 0 (17,605) .00 -2.04%

Expenses/Obligations

Manufacturing

Direct Manufacturing 576 374,092 764 521,624 764 512,124 0 (9,500) N/A -1.82%

Indirect Manufacturing 1,224 262,397 1,160 342,316 1,160 334,211 0 (8,105) N/A -2.37%

Total Expenses/Obligations 1,800 636,489 1,924 863,940 1,924 846,335 0 (17,605) N/A -2.04%

Net Results 0 0 0 0 0 0 0 0 .00 N/A

1B – Vision, Priorities and Context

The Bureau of Engraving and Printing produces US currency notes ordered by the Federal 

Reserve Board. The Bureau began printing currency in 1862 and operates on the basis of 

authority conferred upon the Secretary of the Treasury by 31 U.S.C. 321(a) (4) to engrave and 

print currency and other security documents. Operations are financed through a revolving fund 

established in 1950 in accordance with Public Law 81-656. This fund is reimbursed for direct 

and indirect costs of operations, including administrative expenses, through product sales. In 

1977, Public Law 95-81 authorized the Bureau to include an amount sufficient to fund capital 

investment and to meet working capital requirements in the prices charged for products, 

eliminating the need for appropriations from Congress.

The Bureau also provides technical assistance and advice to other Federal agencies in the design 

and production of documents which require counterfeit deterrent features, due to their innate 

value or other characteristics. 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 customer requirements. 

The mission of the BEP is to develop and produce United States currency notes, trusted 

worldwide, in support of Treasury’s strategic objective of “Facilitate commerce by providing 

trusted U.S. currency, services, and products for the American public and enterprises.”

United States currency is used globally and as its designer and manufacturer BEP needs to 

achieve and maintain best in class practices in order for it to be accepted worldwide. 
BEP - 4

After years of research and development of cutting edge technologies, BEP is producing a new 

$100 note that includes some of the most advanced counterfeit design features found anywhere 

in the world. This achievement requires the focus and determination of the entire agency and is 

indicative of the challenges that lie ahead, reconfirming the BEP’s in its commitment to stay 

ahead of increasingly sophisticated counterfeiters. 

FY 2017 Priorities 

Banknote Design and Development:

There are two main components of currency redesign: Technical and Aesthetic. The primary 

technical goals in the redesign of U.S. currency are to: Ensure that U.S. currency employs unique 

and technologically advanced features to deter counterfeiting; facilitate the public’s use and 

authentication; provide accessibility and usability and maintain public confidence. The aesthetic 

goals in the redesign of U.S. currency are to institutionalize our American history by depicting 

people, monuments, symbols and concepts that reflect the past and reinforce a theme for that 

particular era of currency design.

In 2017, BEP will continue working with the Advanced Counterfeit Deterrent (ACD) Steering 

Committee to research and develop future currency designs for the next family of redesigned 

notes that will enhance and protect U.S. currency notes.

Meaningful Access:

Work continues in FY 2017 on the goal of enabling the Nation’s currency to better serve 

domestic and international users. BEP is following two project paths to provide meaningful 

access for the blind and visually impaired, a Currency Reader (A currency reader is an electronic 

assistive device that can identify a note’s value and communicate it to the user) as well as a 

Raised Tactile Feature (RTF) that will be on future notes. 

A U.S. Currency Reader pilot program was concluded on Dec. 31, 2014, with more than 17,000 

currency readers ordered under the pilot program. On January 2, 2015, a national rollout of the 

program was launched. To date, more than 34,000 Currency Readers have been ordered. BEP is 

working with the Library of Congress’ National Library Services (NLS) for distribution of the 

readers. Additionally, a questionnaire was developed and cleared by OMB that enables BEP to 

gather user data on the currency readers. BEP’s Voice of the Customer Questionnaire includes 

questions on: habits before and after use in various situations; frequency of use; convenience; use 

of other devices; suggested improvements; as well as plans for continued use. The questionnaire 

was initially disseminated during the American Council of the Blind (ACB) and National 

Federation of the Blind (NFB) conferences in July 2015. 

In addition to the reader program, the Bureau will be incorporating raised tactile features (RTF) 

into the next redesign of currency that will enable users to denominate US currency by touch, 

assisting every American to better denominate currency. BEP expects to begin issuing a new 

$10 note in 2020 that will include a tactile feature that increases accessibility for the visually 

impaired. The $10 note was selected for redesign based on a number of factors and with 

guidance from the Advanced Counterfeit Deterrence (ACD) Steering Committee, an interagency group established to monitor and communicate counterfeit deterrence issues and 
BEP - 5

dedicated to maintaining and ensuring the integrity of U.S. currency. While many factors were 

taken into consideration, the primary reason for redesigning currency is to address current and 

potential counterfeiting threats. In addition to the tactile feature, the new the new $10 note will 

feature new design aspects and a portrait of a woman. Throughout 2017, testing and refinement 

of features will continue to determine which processes and potential features work best at the 

production volumes needed for U.S. currency. BEP will also continue its efforts to research and 

develop features that will enhance future note designs, working with National and Federal 

Laboratories and Research Centers to expand our outreach to identify new technologies that may 

be used in feature development. 

Retooling:

BEP is in the process of a multi-year effort to retool BEP’s manufacturing processes with stateof–the-art intaglio printing presses, electronic inspection systems, and finishing equipment. The 

successful implementation of this advanced technology will improve productivity, reduce 

environmental impact, and enhance counterfeit deterrence of U.S. currency. During 2016 and 

2017 plans include: 

BEP Workforce:

Throughout 2017, the Bureau will continue to develop, execute, and communicate the results of 

Employee Engagement Plans and the FEVS annual survey results. In addition to implementing 

BEP Human Capital Plan initiatives, efforts will continue to fill gaps in needed STEM skill sets 

to support our Currency Quality Assurance (CQA) efforts in addition to adding resources in 

technology development and feature testing areas. 

Currency Quality Assurance (CQA) Program:

BEP has partnered with the Federal Reserve Board to reinvent its quality management program 

based on best practices of leading manufacturers. The Bureau, in collaboration with its 

stakeholders, developed a robust CQA program that began in 2014 and will continue to mature in 

2017. This re-invention has moved BEP to a proactive approach of building quality into 

production processes. Every BEP work activity was aligned and will be resourced to support this 

integrated, collaborative, and rigorous quality assurance program that focuses on every step of 

the supply chain from raw material, through the manufacturing process steps to final packaging 

and delivery. CQA reaches into nearly every “corner” of the BEP organization and its 

effectiveness depends on a strong cadre of process and production engineers, quality assurance 

specialists and other specialists in related science and engineering disciplines. 
BEP - 6

Replacement Production Facility:

Work on the replacement production facility is going forward; in May 2015 a site selection 

evaluation contract was awarded. In 2016 BEP will award both a construction management

administrative support contract and a facility design programming contract. Efforts are also 

underway in FY 2016 to narrow down the possible site selections to the top 3 for further 

evaluation. The new production facility building is projected to be completed in the 2022

timeframe, with the new facility fully operational by 2025; however this is subject to change as 

the project evolves. BEP plans to be transparent and communicate activity and resulting changes 

to the workforce on a regular basis.

FY 2016 Priorities

The importance of producing and delivering currency of consistently high quality, note after 

note, cannot be overstated. Throughout 2016, testing and refinement of proposed raised tactile 

features are priorities to determine which processes and potential features work best at full 

production speed and volumes needed to produce U.S. currency. 

BEP’s Currency Quality Assurance (CQA) program successfully implemented a risk-based, 

operationally focused internal quality auditing program in addition to improving product and 

procedural plant-to-plant consistency.

Key Accomplishments

During 2016, BEP acquired equipment that will enable the addition of tactile features to U.S. 

currency as well as continue the multi-year effort to retool BEP’s manufacturing processes with 

state-of–the-art intaglio printing press, electronic inspection systems, and finishing equipment. 

The successful implementation of this advanced technology will improve productivity, reduce 

environmental impact, and enhance counterfeit deterrence of U.S. currency.

BEP disseminated a Voice of the Customer survey to over 300 individuals who received an iBill 

currency reader. The questionnaire included questions on: habits before and after use in various 

situations; frequency of use; convenience; use of other devices; suggested improvements; as well 

as plans for continued use. Approximately 90% of respondents believe the iBill currency reader 

they received is easy, convenient, useful, and successfully meets their needs. Metrics show that 

most prefer to use the reader at home. Based on customer feedback, BEP believes that the U.S. 

Currency Reader program has proven to be a successful initiative in providing visually impaired 

persons with a means to independently denominate U.S. currency. 

BEP continued to make progress on enhancing its cybersecurity posture. The bureau reduced the 

number of Personal Identity Verification privileged users, and focused on implementing least 

privileged access i.e., further restricted privileged access based on individual’s role and the 

specific access required.
BEP - 7

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Bureau of Engraving and Printing FTE Materials Operating & Capital Total

FY 2016 Estimate 1,924 $292,250 $571,690 $863,940

Changes to Base

Maintaining Current Levels (MCLs) 0 $0 $9,395 $9,395

Pay-Raise 0 $0 $2,404 $2,404

Pay Annualization 0 $0 $799 $799

Non-Pay 0 $0 $6,192 $6,192

Efficiency Savings 0 $0 ($2,000) ($2,000)

Reduction in Overtime 0 $0 ($2,000) ($2,000)

Subtotal Changes to Base 0 $0 $7,395 $7,395

Total FY 2017 Base 1,924 $292,250 $579,085 $871,335

Program Changes

Program Decreases 0 $0 ($25,000) ($25,000)

Currency Reader 0 $0 ($5,000) ($5,000)

DCF Production Facility Replacement 0 $0 ($10,000) ($10,000)

Reduction in Retooling 0 $0 ($10,000) ($10,000)

Subtotal Program Changes 0 $0 ($25,000) ($25,000)

Total FY 2017 Request 1,924 $292,250 $554,085 $846,335

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$9,395,000 / +0 FTE

Pay-Raise +$2,404,000 / +0 FTE 

Funds are required for the proposed January 2017 pay-raise and the annualization of the 2016 

pay-raise.

Pay Annualization +$799,000 / +0 FTE 

Funds are required for annualization of the January 2016 pay-raise.

Non-Pay +$6,192,000 / +0 FTE 

Funds are required for non-labor costs such as travel, contracts, rent, and equipment.

Efficiency Savings ......................................................................................-$2,000,000 / +0 FTE

Reduction in Overtime -$2,000,000 / +0 FTE 

As out of date equipment is replaced with equipment that is more efficient, less down time, and 

new technology, reliance on overtime will be reduced. 

Program Decreases ..................................................................................-$25,000,000 / +0 FTE

Currency Reader -$5,000,000 / +0 FTE 

As the Currency Reader distribution program continues to evolve from its 2015 release and 

downloadable applications (apps) and image recognition technology becomes more 

commonplace, BEP expects demand for currency readers to be reduced in FY 2017. 

DCF Production Facility Replacement -$10,000,000 / +0 FTE 

The initiative was requested in 2016 to fund a Project Management contract(s) to develop site

surveys, environmental impact analysis, local infrastructure assessment, local economic 
BEP - 8

development, architectural renderings. Additional follow on contractual activities, i.e., facility 

design are expected in FY 2017. 

Reduction in Retooling -$10,000,000 / +0 FTE 

BEP’s retooling needs for FY 2017 are not as large as FY 2016 therefore 2017 funds for this 

initiative are reduced. Retooling is a multi-year project that replaces older, fully depreciated 

production equipment. Replacing out of date equipment on a regular basis allows BEP to be 

more quality and cost effective and efficient in meeting customer requirements for the 

production of currency notes. New equipment is typically more energy efficient, eco-friendly 

and machine down time is reduced. In addition, new equipment acquired by BEP has the 

technical capability of producing the next generation of advanced counterfeit deterrence features

for future design enhancements.
BEP - 9

2.2 – Operating Levels Table

Dollars in Thousands

Bureau of Engraving and Printing FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 174,100 175,357 177,560

11.3 - Other than full-time permanent 210 200 150

11.5 - Other personnel compensation 2,450 2,250 2,050

11.6 - Overtime 16,700 17,000 15,000

11.9 - Personnel Compensation (Total) 193,460 194,807 194,760

12.0 - Personnel benefits 54,957 51,000 51,500

Total Personnel Compensation and Benefits $248,417 $245,807 $246,260

21.0 - Travel and transportation of persons 1,000 1,450 1,450

22.0 - Transportation of things 250 250 250

23.1 - Rental payments to GSA 2,000 2,000 2,000

23.2 - Rental payments to others 1,000 1,000 1,000

23.3 - Communication, utilities, and misc charges 9,050 14,350 14,350

24.0 - Printing and reproduction 150 250 250

25.1 - Advisory and assistance services 2,250 3,500 3,500

25.2 - Other services 25,222 121,673 110,865

25.4 - Operation and maintenance of facilities 5,500 8,500 8,500

25.5 - Research and development contracts 3,700 7,000 7,000

25.7 - Operation and maintenance of equip 6,250 11,900 11,900

26.0 - Supplies and materials 294,400 292,250 300,000

31.0 - Equipment 37,125 153,750 138,750

42.0 - Insurance claims and indemnities 175 260 260

Total Non-Personnel 388,072 618,133 600,075

Total Budgetary Resources $636,489 $863,940 $846,335

Budget Activities:

Manufacturing 636,489 863,940 846,335

Total Budgetary Resources $636,489 $863,940 $846,335

FTE 1,800 1,924 1,924

2B - Appropriations Language and Explanation of Changes

The Bureau of Engraving and Printing receives no appropriated funds from Congress.

2C – Legislative Proposals

The Bureau of Engraving and Printing has no legislative proposals for FY 2017.
BEP - 10

Section 3 – Budget and Performance Plan

3A – Manufacturing

($846,335,000 from expenses/obligations): 

The BEP has one budget activity: Manufacturing. This budget activity supports all of BEP’s 

strategic goals. 

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, as well as the mix of 

denominations ordered year to year. As more sophisticated counterfeit deterrent design features 

are produced, paper and ink costs increase, resulting in increased total manufacturing costs. 

Actual performance against standard cost depends on BEP’s ability to meet annual spoilage, 

efficiency, and capacity utilization goals. In order to meet this measure, costs and other standard 

manufacturing performance metrics are tracked at each stage of production and corrections are 

made on the shop floor. In addition, production and quality metrics are discussed on a monthly 

basis at the executive level and corrective action plans are developed. In 2015 the cost of 

manufacturing was lower than anticipated, as the actual result realized for this measure was 

$42.35 per 1,000 notes produced against a target of $54.00. The performance goals for both 

FY 2016 and FY 2017 will continue to reflect the high cost of redesigned $100 notes as a 

proportion of the total annual order; however, due to productivity improvements BEP is able to 

reduce the target to $50.00 per 1,000 notes produced for both 2016 and 2017.

Percent of currency notes returned due to defects is an indicator of the Bureau’s ability to 

provide a quality product. All notes delivered to the Federal Reserve go through rigorous quality 

inspections during the manufacturing process. In addition, notes are inspected a final time using 

the same inspection systems used at the Federal Reserve Banks. These inspections ensure that all 

counterfeit deterrent features, both overt and covert, are functioning as designed. BEP’s 

FY 2015 target for this performance metric is .0001 percent, and the actual result realized for this 

measure was .0000003 percent. BEP’s target for this performance metric will be held constant at 

.0001 percent for FY 2016 and FY 2017.

BEP’s Best Places to Work in Federal Government Ranking is based on the results of the 

Partnership for Public Service data on three questions in the Federal Employee Viewpoint 

Survey. This survey is sent annually to all Federal employees seeking their opinion on their 

organization’s leadership and programs relating to fairness, employee empowerment and 

recognition. BEP’s 2015 rank was 74 out of 320. The Bureau continues to sponsor activities and 

encourage employee engagement by contributing ideas and participation in events, which are 

aimed at improving the work environment for all employees. FY16 metrics are not yet available; 

however BEP will continue to target achievement of an improvement in rank. 

Reduction in Regulated Waste (Pounds of waste per 1000 notes delivered of regulated air 

emissions, wastewater, and solid waste combined) is a quantitative indicator of the effectiveness 

of BEP environmental programs, which are assessed through the BEP ISO 14001 certified 

Environmental Management System (EMS). This reflects the maturation of the EMS as well as 
BEP - 11

the Bureau’s commitment to continually improve its Environmental Health and Safety (EHS) 

performance, as both of the Bureau’s manufacturing facilities received unconditional 

recertification to the ISO 14001 standard in FY 2015. BEP’s FY 2015 performance of 27.3 

pounds of regulated waste for this metric was against a target of 30 pounds per 1000 notes 

delivered. BEP’s target for this performance metric will be held constant at 30 pounds per 1000 

notes delivered for FY 2016 and FY 2017.

Lost Time Accident Rate per 100 Employees measures the Bureau’s ability to reduce injuries 

and illnesses in the workplace. BEP’s key performance indicator is the annual Occupational 

Safety and Health Administration’s (OSHA) reportable lost time case rate and number of lost 

workdays. In 2015 BEP’s lost time case rate was 1.65 against a target of 1.8 cases per 100 

employees. The Bureau remains committed to improving the safety of its employees, and 

conducts an analysis to determine the root cause of any injury and seeks to identify best practices 

in safety. BEP will continue to allocate resources to have the greatest impact on preventing 

future injuries. BEP’s target for this performance metric will be held constant at 1.8 per 100 

employees for FY 2016 and FY 2017.

3.1.1 – Manufacturing Budget and Performance Plan

Dollars in Thousands

Manufacturing Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $555,000 $517,750 $630,000 $645,150 $733,208 $636,489 $863,940 $846,335

Budget Activity Total $555,000 $517,750 $630,000 $645,150 $733,208 $636,489 $863,940 $846,335

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Best Places to Work in 

Federal Government 

Ranking

N/A 174 178 47 51 74 99 99 99

Lost Time Accident 

Rate per 100 

Employees

N/A 1.4 1.9 1.63 1.73 1.65 1.6 1.8 1.8

Manufacturing Costs 

For Currency (Dollar 

Costs Per Thousand 

Notes Produced)

44.85 34.6 43.34 50.45 44.22 42.35 55.0 50.0 50.0

Percent of Currency 

Notes Delivered 

Returned Due to 

Defects

N/A .0 .0 .466 .00001 .0000003 .0001 .0001 .0001

Key: DISC - Discontinued 
BEP - 12

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The Bureau of Engraving and Printing’s (BEP) capital investment strategy is comprised of 

several broad investment categories with more specific smaller projects in each category. 

The Bureau’s mission to develop and produce U.S. Currency notes, trusted worldwide, demands 

that BEP continually update and improve its manufacturing processes by investing in new 

technologies and innovations. The Bureau’s retooling project replaces older, fully depreciated 

production equipment. Replacing out of date equipment allows BEP to be more quality and cost 

effective and efficient in meeting customer requirements for the production of currency notes. In 

addition, the Bureau is focused on building the capability to produce new currency designs with 

tactile features to provide meaningful access to US currency for the blind and visually impaired.

BEP participates as a partner in significant Treasury-wide enterprise level investments such as 

Homeland Security Presidential Directive-12, HRConnect (a Human Resources Line of Business 

service provider) and the Treasury Learning Management System (TLMS).

The Bureau’s IT portfolio includes a ‘cloud first’ approach to implementing business systems. 

The Oracle eBusiness Suite is an integrated manufacturing suite which runs at the Oracle 

Corporation’s “Federal on Demand” Shared Service Center in Austin, Texas. 

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded here: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

United States Mint

FY 2017

President’s Budget

February 9, 2016
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Table of Contents

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

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

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................... 7

2.1 – Budget Adjustments Table................................................................................................. 7

2A – Budget Increases and Decreases Description..................................................................... 7

2.2 – Operating Levels Table.................................................................................................... 10

2B – Appropriations Language and Explanation of Changes................................................... 11

2C – Legislative Proposals........................................................................................................ 11

Section 3 – Budget and Performance Plan ............................................................................... 12

3A – Manufacturing.................................................................................................................. 12

3.1.1 – Manufacturing Budget and Performance Plan.............................................................. 15

Section 4 – Supplemental Information...................................................................................... 16

4A – Summary of Capital Investments..................................................................................... 16
Mint - 3

Section 1 – Purpose

1A – Mission Statement

Serve the American people by manufacturing and distributing circulating, precious metal, and 

collectible coins and national medals, and providing security over assets entrusted to us.

1.1 – Resource Detail Table

Dollars in Thousands

United States Mint FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Other Income

Circulating 0 1,114,050 0 1,127,500 0 1,162,000 0 34,500 3.0%

Bullion/Numismatic 0 2,579,284 0 2,275,507 0 2,281,193 0 5,686 .2%

Total Revenue/Offsetting Collections 0 3,693,334 0 3,403,007 0 3,443,193 0 40,186 .00000 1.2%

Expenses/Obligations

Manufacturing

Circulating 941 573,142 1,068 753,014 1,068 768,614 57 15,600 2.0%

Bullion/Numismatic 710 2,364,411 806 2,143,193 806 2,187,593 43 44,400 2.0%

Total Expenses/Obligations 1,651 2,937,553 1,874 2,896,207 1,874 2,956,207 100 60,000 2.0%

Net Results 0 755,781 0 506,800 0 486,986 0 -19,814 .00 -4.1%

1B – Vision, Priorities and Context

The United States Mint (Mint) manufactures and distributes domestic circulating coinage, 

bullion coin products, numismatic coinage, and national medals in the most effective and 

efficient manner possible. In addition, the Mint provides security for assets, including the 

government’s reserves of gold and silver bullion, coins, and coinage metals. The Mint supports 

the Department of the Treasury’s strategic objectives to facilitate commerce by providing trusted 

and secure U.S. currency, products, and services for use by the public (1.4); promoting the 

efficient use of resources through shared services, strategic sourcing, streamlined business 

processes, and accountability (5.3); and creating a culture of service through the relentless 

pursuit of customer value (5.4).

 

 

 

 

 

 

Coin Shipments (Units In Millions/Coins) FY 2015 FY 2016 FY 2017

Circulating:

One Cent 9,155 9,250 9,700

5-Cent 1,477 1,400 1,500

Dime 2,874 2,900 2,900

Quarter 2,645 2,700 2,800

Half-Dollar - - -

Dollar - - -

Total Circulating 16,151 16,250 16,900

 

% Change

4.9%

7.1%

0.0%

3.7%

0.0%

0.0%

4.0%

FY 2015 FY 2016 FY 2017

Budget Category Actual Estimated Estimated

Administrative Operating Costs 332,757 $405,739 $405,707

Capital Investments $29,311 $30,468 $40,500

Metals and Materials Costs $2,575,485 $2,460,000 $2,510,000

Total Resources $2,937,553 $2,896,207 $2,956,207

% Change

-0.01%

32.9%

2.0%

2.1%
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Vision

The Mint’s vision is to become the finest mint in the world, through excellence in its people, 

products, customer service, and workplace. The Mint has the following four strategic goals to 

help it fulfill its vision and mission: 1) meet the Nation’s need for circulating coins, 2) meet 

public demand for United States bullion coins, 3) responsibly expand the numismatic program, 

and 4) foster a safe, engaged, and innovative workforce.

FY 2017 Priorities

i. Circulating Program -- Efficiently and effectively mint and issue approximately 16.9 

billion circulating coins in Fiscal Year (FY) 2017 to meet the needs of the United States.

ii. Numismatic Program:

a. Bullion Products – Mint and issue bullion coins to meet customer demand 

efficiently and effectively. 

b. Other Numismatic Products – Produce and distribute numismatic products in 

sufficient quantities, through appropriate channels, to make them accessible,

available, and affordable to people who choose to purchase them. Design, strike, 

and prepare for the presentation of Congressional Gold Medals. 

Context

The Mint operations are funded through the Mint Public Enterprise Fund (PEF), as codified at 31 

U.S.C. § 5136. The Mint generates revenue through the sale of circulating coins to the Federal 

Reserve Banks (FRB), numismatic products to the public, and bullion coins to authorized 

purchasers. All circulating and numismatic operating expenses, and capital investments incurred 

for the Mint’s operations and programs, are paid out of the PEF. By law, all funds in the PEF are 

available without fiscal year limitation. Revenues determined to be in excess of the amount 

required by the PEF are transferred to the United States Treasury General Fund as non-budgetary 

amounts or capital transfers. Non-budget amounts consist of seigniorage (the net income from 

circulating operations) which in the Federal budget is used to reduce the government’s need to 

borrow. The net income from numismatic program operations, including bullion coin program 

operations, is recorded as budgetary offsetting collections in the Federal budget, and is available 

to be used to fund other Federal Government operations and programs. 

The Mint’s budget collections and outlays reflect the demand for, and sales of, circulating coins 

and numismatic products. In accordance with the PEF statute, proceeds from sales provide the 

Mint’s funding source, fully covering budget outlays, which adjusts as the necessary resources 

are engaged to fulfill prevailing demand. The vast majority (approximately 85 percent in 

FY 2017) of planned budget outlays are for procurement of metals and materials for conversion 

into finished goods. Accordingly, each fiscal year’s budget outlays principally reflect the 

production volumes that correspond to prevailing demand, as well as raw material costs driven 

by prices on open commodities markets. The economic environment can significantly affect the 

Mint’s budget outlays by influencing these two external factors.
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Circulating 

The FY 2017 circulating coin production projections are based on current economic data and 

forecasts of FRB coin orders. Circulating coin production for FY 2017 is forecasted at 16.9 

billion coins. This level reflects increases in all coin denomination shipments in FY 2017 as 

compared to 16.2 billion shipped in FY 2015, which was an increase of 24 percent over 

FY 2014. A notable increase in quarter-dollar coin shipments of 57 percent increased the 

amount of seigniorage generated by this denomination in FY 2015.

Circulating financial performance continues to be affected by the costs of the inputs for 

producing the coinage. Since FY 2006, commodity prices for copper, nickel, and zinc have been 

at levels at which costs of the one-cent coins (pennies) and 5-cent coins (nickels) have exceeded 

their face value. The Mint expects the costs of these commodities to remain at levels that result 

in continued losses from issuing pennies and nickels to the FRBs at face value. Positive 

seigniorage from minting and issuing dime and quarter-dollar coins has fully offset the losses the 

Mint incurrs from minting and issuing pennies and nickels. 

Research and development of alternative metallic materials for circulating coinage supports 

Treasury’s progress in the strategic objective to facilitate commerce by providing trusted and 

secure U.S. currency, products, and services for use by the public (1.4). The Coinage 

Modernization, Oversight and Continuity Act of 2010 (Public Law 111-302) requires a biennial 

report to Congress on the Mint’s production costs and analysis of the research into alternatives. 

The final report is due to Congress in December 2016. 

Numismatic Program

The numismatic program, which includes bullion coins, is designed to prepare and distribute 

premium products to collectors and those who desire quality versions of coinage. Numismatic 

products are priced to cover metal and production costs. The Mint has implemented strategies 

such as the implementation of a new order management system to increase the program’s 

efficiency and effectiveness while controlling costs and keeping prices as low as practicable. 

Bullion Coins 

The bullion coin program provides the public a means to acquire precious metal coins from 

authorized purchasers as part of an investment portfolio. Investors purchase bullion coins not 

only for their intrinsic metal value, but also because the United States guarantees each coin’s 

metal weight, content, and purity. The main objective of the bullion coin program is to meet 

demand and ensure that the program recovers its costs. 

In FY 2015, the bullion coin program revenue and net income increased 17 percent. This is the 

result of an increase in demand for both gold and silver bullion products. In FY 2016, bullion 

demand is expected to decline to 43.7 million ounces from the 49.7 million ounces sold in 

FY 2015, and continue to decrease to 40.7 million ounces in FY 2017. FY 2017 gold and silver 

prices are forecasted to increase by four percent and seven percent, respectively. The forecasted 

increase in metal prices will help offset the decrease in forecasted demand. As a result, bullion 

revenue is forecasted at $1.8 billion in FY 2016 and expected to remain at that level in FY 2017.
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The Mint, as the world’s largest producer of gold and silver bullion coins, employs precious 

metal purchasing strategies that minimize the financial risk that can arise from adverse market 

price fluctuations.

Numismatic (Collector Coins and Medals)

The numismatic (collector coins and medals) program provides high-quality versions of 

circulating coinage, precious metal coins, commemorative coins, and medals for sale to the 

public. The priorities for this program are to increase the customer base and foster sales while 

controlling costs and keeping prices as low as practicable. Most of the Mint’s recurring 

products, such as the uncirculated coin sets and proof sets, are required by Federal statute. 

Others, such as commemorative coins and Congressional Gold Medals, are required by 

individual public laws. 

FY 2015 revenue decreased by 10 percent to $453 million from $504 million in FY 2014. The 

decrease was driven primarily by eight percent and 20 percent decreases, respectively, in gold 

and silver prices, as well as a five percent decrease in total units sold, from 5.7 million in 

FY 2014 to 5.4 million in FY 2015. In FY 2016 and FY 2017, the numismatic budget includes a 

maximum sales level of 5.5 million each year. FY 2016 and FY 2017 revenues are projected to 

be $467 million and $482 million, respectively.
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Section 2 – Budget Adjustments and Appropriation Language

The Mint’s FY 2017 budget request includes resource requirements for increased circulating coin 

demand. Circulating coin production for FY 2016 is forecasted at 16.3 billion, a slight increase 

over the 16.2 billion coins shipped in FY 2015. FY 2017 is forecasted to moderately increase to 

16.9 billion.

2.1 – Budget Adjustments Table

Dollars in Thousands

United States Mint FTE Materials Operating & 

Capital Total

FY 2016 Estimate 1,774 $3,171,100 $424,207 $3,595,307

Adjustments to Estimate 100 ($711,100) $12,000 ($699,100)

Labor and Overhead Due to Forecasted Increase in 

Circulating Coin Production

100 $0 $12,000 $12,000

Metal Due to Forecasted Decrease in Numismatic and 

Bullion Coin Production 

0 ($711,100) $0 ($711,100)

FY 2016 Revised Estimate 1,874 $2,460,000 $436,207 $2,896,207

Changes to Base

Maintaining Current Levels (MCLs) 0 $0 $6,791 $6,791

Pay-Raise 0 $0 $2,079 $2,079

Pay Annualization 0 $0 $691 $691

Non-Pay 0 $0 $4,021 $4,021

Efficiency Savings 0 $0 ($6,791) ($6,791)

Absorb MCLs 0 $0 ($6,791) ($6,791)

Subtotal Changes to Base 0 $0 $0 $0

Total FY 2017 Base 1,874 $2,460,000 $436,207 $2,896,207

Program Changes

Program Increases 0 $50,000 $10,000 $60,000

Capital Limit Increase 0 $0 $10,000 $10,000

Metal Due to Forecast Increase in Circulating Coin 

Production

0 $40,000 $0 $40,000

Metal Due to Forecast Increase in Numismatic and 

Bullion Coin Production

0 $10,000 $0 $10,000

Subtotal Program Changes 0 $50,000 $10,000 $60,000

Total FY 2017 Request 1,874 $2,510,000 $446,207 $2,956,207

2A – Budget Increases and Decreases Description

Adjustment to Request ..........................................................................-$699,100,000 / +0 FTE

Labor and Overhead Due to Forecasted Increase in Circulating Coin Production +$12,000,000 

/ +100 FTE 

In FY 2016, the Mint forecasts coin demand to increase to 16.3 billion coins annually. To meet 

the growth in demand, Mint operations require increased resources of $12.0 million for items 

such as labor (direct), freight, utilities, and supplies. As a result of increased coin demand, FTEs 

are returning to the former level of 1,874. Previously, the Mint’s FY 2016 budget identified a 

reduction of 100 FTEs, which was the result of a staffing review that identified reduced 

workforce needs. Subsequently, the significant increase in coin demand has precipitated the 

need to restore FTEs for coin production.
Mint - 8

Metal Due to Forecasted Decrease in Numismatic and Bullion Coin Production -$711,100,000 / 

+0 FTE 

The FY 2016 budget request includes funding adjustments that support current coin demand 

projections. While circulating coin demand has increased, both numismatic and bullion demand 

has decreased. Coupled with the decline in metal prices, specifically precious metal (gold, silver, 

and platinum), the combined result is an overall decrease in metal funding from the FY 2016 

President’s Budget.

Maintaining Current Levels (MCLs) ......................................................+$6,791,000 / +0 FTE

Pay-Raise +$2,079,000 / +0 FTE 

Funds are required for the proposed January 2017 pay-raise.

Pay Annualization +$691,000 / +0 FTE 

Funds are required for annualization of the January 2016 pay-raise.

Non-Pay +$4,021,000 / +0 FTE 

Funds are required for non-labor costs such as travel, contracts, rent, supplies, and equipment.

Efficiency Savings ......................................................................................-$6,791,000 / +0 FTE

Operational Cost Savings -$6,791,000 / +0 FTE 

The Mint will absorb annual inflationary costs within the current operating budget by effective 

cost management across all departments within the Mint. The Mint will continue efforts in 

position management control, such as holding vacant non-direct positions for specific time 

periods, which will generate salary savings. In addition, discretionary spending will be held to 

the FY 2016 level and Mint activities will be prioritized to ensure that operating costs are 

maintained. The Mint is committed to keeping costs down and continues to employ cost savings 

strategies whenever practicable.

Program Increases ..................................................................................+$60,000,000 / +0 FTE

Capital Limit Increase +$10,000,000 / +0 FTE 

The Mint’s investments in capital are a critical part of regular manufacturing operations. As coin 

demand from the FRB increases, the Mint’s need for capital investments becomes more critical. 

The current limitation of $20 million for circulating and protection capital is below the amount 

needed to meet capital investment requirements. 

Capital legislation, which has been in place since FY 2002, regulates the amount of circulating 

and protection capital the Mint can spend annually. During that first fiscal year, the capital limit 

was $43 million. Today, the current limit is reduced to $20 million. 

The legislative limit is linked to the annual depreciation level, which has been the unofficial 

baseline since 2002. Since the capital limit is linked to depreciation, the limit has decreased over 

time as the depreciation level declines. Fewer capital purchases were made in prior years due to 

cost savings efforts during times of low coin demand (2007 – 2010). This in turn caused lower

depreciation levels for capital spending authority. As a result, capital needs during a period of 

high FRB demand are not able to be fully met.
Mint - 9

The bureau has identified an urgent need to increase its legislative limit by $10 million. This 

will raise the current limit from $20 million to $30 million beginning in FY 2017. The increased 

capital limit will allow the Mint to execute a comprehensive capital investment strategy that 

focuses on safety, equipment replacements, protection, and facility improvements.

Metal Due to Forecast Increase in Circulating Coin Production +$40,000,000 / +0 FTE 

The Mint forecasts that demand for circulating coins will remain strong in FY 2016 and 2017, at 

16.3 billion coins and 16.9 billion coins, respectively. To meet the growth in demand, a $40 

million increase for metal purchases is required.

Metal Due to Forecast Increase in Numismatic and Bullion Coin Production +$10,000,000 /

+0 FTE 

The Mint forecasts that the FY 2017 demand for numismatic coins will experience a slight 

growth of $20 million, or seven percent from the FY 2016 projected level. Conversely, bullion 

coin demand is projected to decline with the increase of interest rates expected to take place in 

late FY 2015 or early FY 2016. The Mint forecasts that the FY 2017 bullion coin production 

cost will be $10 million or 0.6 percent lower than the FY 2016 projected level. The net effect of 

the projected increase in numismatic coin production and the decrease in bullion coin production 

is a $10 million increase in required metal purchases.
Mint - 10

2.2 – Operating Levels Table

Dollars in Thousands

United States Mint FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 126,592 149,610 149,610

11.3 - Other than full-time permanent 917 161 161

11.5 - Other personnel compensation 15,540 12,729 12,729

11.9 - Personnel Compensation (Total) 143,049 162,500 162,500

12.0 - Personnel benefits 44,588 52,854 52,854

13.0 - Benefits for former personnel 368 1,019 1,019

Total Personnel and Compensation Benefits $188,004 $216,373 $216,373

21.0 - Travel and transportation of persons 1,589 1,897 2,649

22.0 - Transportation of things 34,959 29,093 29,002

23.1 - Rental payments to GSA 449 449 449

23.2 - Rental payments to others 14,205 14,251 14,196

23.3 - Communication, utilities, and misc charges 12,699 16,903 16,858

24.0 - Printing and reproduction 1,393 1,556 1,550

25.1 - Advisory and assistance services 26,583 33,889 33,762

25.2 - Other services 13,898 37,696 37,555

25.3 - Other purchases of goods & serv frm Govt accounts 19,365 20,427 20,351

25.4 - Operation and maintenance of facilities 6,479 3,197 3,185

25.5 - Research and development contracts 391 1,920 1,913

25.7 - Operation and maintenance of equip 6,968 7,917 7,887

26.0 - Supplies and materials 3,753 17,970 17,928

26.7 - Raw Materials 2,575,485 2,460,000 2,510,000

31.0 - Equipment 22,000 20,812 30,734

32.0 - Land and structures 9,333 11,858 11,815

Total Non-Personnel 2,749,549 2,679,834 2,739,834

Total Budgetary Resources $2,937,553 $2,896,207 $2,956,207

Budget Activities:

Manufacturing $2,937,553 $2,896,207 2,956,207

Total Budgetary Resources $2,937,553 $2,896,207 $2,956,207

FTE 1,651 1,874 1,874
Mint - 11

2B – Appropriations Language and Explanation of Changes

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY

UNITED STATES MINT PUBLIC ENTERPRISE FUND

Federal Funds

Pursuant to section 5136 of title 31, United States Code, the 

United States Mint is provided funding through the United 

States Mint Public Enterprise Fund (PEF) 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 [2016] 

2017 under such section 5136 for circulating coinage and 

protective service capital investments of the United States 

Mint shall not exceed [$20,000,000] $30,000,000.

The increased capital limit 

will allow the Mint to execute 

a comprehensive capital 

strategy that focuses on 

safety, equipment 

replacements, protection, and 

facility improvements.

2C – Legislative Proposals

Eliminate the 20 percent requirement in the Native American $1 Coin Act

This legislative proposal seeks to limit the requirement that the number of $1 coins minted and 

issued in a year with the Sacagawea design on the obverse be not less than 20 percent of the total 

number of $1 coins minted and issued. Approval of this proposal would allow the Mint to mint 

and issue numismatic versions of all $1 coins in amounts necessary to meet public demand for 

coins of each particular design. In late 2011, to address the excessive $1 coin inventories at the 

FRBs, the Secretary of the Treasury suspended the minting of Presidential $1 Coins for 

circulation. As a result, the Mint fulfills all demand for new Presidential $1 Coins through its 

numismatic sales channels. Numismatic demand for new Native American $1 Coins, however, 

is significantly lower than numismatic demand for Presidential $1 Coins, making it impracticable 

for the Mint to comply with the 20 percent requirement. As a consequence, limiting the 20 

percent requirement to circulating coins is sensible at this time because it avoids the need to mint 

and issue Native American $1 Coins in excess of the amounts that numismatic customers 

demand.

Section 5112(r)(5) of Title 31, United States Code, is amended by inserting “for circulation” 

after both instances of “minted and issued.”.
Mint - 12

Section 3 – Budget and Performance Plan

3A – Manufacturing

($2,956,207,000 from expenses/obligations): 

The Mint has one budget activity: Manufacturing. This budget activity supports Treasury’s 

strategic objective to “Facilitate commerce by providing trusted and secure U.S. currency, 

products, and services for use by the public.” This budget activity encompasses the bureau’s two 

major programs: Circulating coinage and numismatic products, including bullion coins, 

collector coins, and national medals. 

Circulating Coinage Program

Circulating coinage includes the minting and issuing of pennies, nickels, dimes, and quarterdollars. The Mint delivers circulating coinage to the FRBs in quantities to support their service 

to commercial banks and other financial institutions. These financial institutions then meet the 

coinage needs of retailers and the public. The Mint recognizes revenues from the sale of 

circulating coins at face value when they are shipped to the FRBs.

The Mint will continue to mint and issue circulating quarter-dollar coins honoring America’s 

national parks and other national sites, in accordance with the America’s Beautiful National 

Parks Quarter Dollar Coin Act of 2008 (Public Law 110-456). In 2016, the Mint will release 

quarters honoring Shawnee National Forest (Illinois), Cumberland Gap National Park 

(Kentucky), Harpers Ferry National Park (West Virginia), Theodore Roosevelt National Park 

(North Dakota), and Fort Moultrie (Fort Sumter National Monument) (South Carolina). In 2017, 

the Mint will release quarters honoring Effigy Mounds National Monument (Iowa), Frederick 

Douglass National Historic Site (District of Columbia), Ozark National Scenic Riverways 

(Missouri), Ellis Island National Monument (Statue of Liberty) (New Jersey), and George 

Rogers Clark National Historical Park (Indiana). 

Numismatic Program

Bullion Coins 

The Mint produces and issues gold, silver, and platinum bullion coins to authorized purchasers 

through the American Eagle, American Buffalo, and America the Beautiful Silver Bullion Coin 

Programs to fulfill investor demand. The authorized purchasers agree to maintain an open, twoway market for these coins, ensuring their availability for consumers who desire them for 

investment portfolios. Demand for bullion coins is greatly influenced by the performance of 

other investment options, such as equities or currency markets, and therefore is highly 

unpredictable. The content and purity of the precious metal in the bullion coins are backed by 

the United States Government.

Other Numismatic Products 

The Mint’s numismatic program provides high-quality versions of circulating coinage, precious 

metal coins, commemorative coins, and medals for sale directly to the public. For some 

numismatic products, authorizing legislation specifies program requirements, such as design 

theme, mintage level, and duration of product availability. Other programs are structured by law 

to grant the Secretary of the Treasury discretion in determining product specifications. 

The Mint will continue to mint and issue numismatic versions of $1 coins honoring the Nation’s 
Mint - 13

past Presidents in accordance with the Presidential $1 Coin Act of 2005 (Public Law 109-145). 

In 2016, the Mint will release Presidential $1 Coins honoring Presidents Richard M. Nixon, 

Gerald R. Ford, and Ronald Reagan. The Presidential $1 Coin Program ends in 2016. The Mint 

will also continue to mint and issue $1 coins commemorating the important contributions made 

by Indian tribes and individual Native Americans to the development and history of the United 

States in accordance with the Native American $1 Coin Act (Public Law 110-82).

Commemorative coins are authorized by law to recognize and honor people, places, events, 

institutions, and other subjects of historic or national significance. Each coin is minted and 

issued by the Mint in a limited quantity and is available only for a limited time. Included in the 

price is a surcharge that is authorized to be paid to the designated recipient organizations, 

assuming all legal requirements have been met. Recipient organizations must use the proceeds 

for the purposes specified in the enabling legislation. In FY 2016, the Mint is scheduled to mint 

commemorative coins in two programs: one to honor the literary and educational legacy of 

Mark Twain and the other to commemorate the 100th anniversary of the establishment of the 

United States National Park Service. In FY 2017, the Mint has authorization to mint two 

commemorative coins: the Lions Club International Commemorative Coin (Public Law 112-

181) and the Boys Town Centennial Commemorative Coins (Public Law 114-30). 

Total Budgetary Requirements (all programs)

In FY 2017, the United States Mint’s total estimated budgetary requirements for operating, 

metal, and capital investments are $2,956 million.

Description of Performance:

The Mint uses several key performance measures to gauge progress in achieving its strategic 

goals and to assess its Manufacturing Budget Activity performance.

Seigniorage per Dollar Issued

Seigniorage per dollar issued is the financial return on circulating operations, calculated as 

seigniorage divided by the total face value of circulated coinage shipped to the FRBs. It 

measures the cost effectiveness of minting and issuing the United States’ circulating coinage. 

The Mint’s strategic goal for this program is “Meet the nation’s need for circulating coins.”

By the end of FY 2015, seigniorage per dollar issued was $0.49, above the FY 2015 performance 

target of $0.24. Performance results are exceeding the target mainly due to a 57 percent increase 

in FRB orders for circulating quarter-dollar coins compared to initial budget estimates. 

Additionally, lower costs than forecast for copper, nickel, and zinc, and reduced general and 

administrative expenses also contributed to the improved performance.

FY 2016 and FY 2017 seigniorage per dollar issued and overall seigniorage are expected to 

increase compared to the original FY 2015 target. This is because projected quarter-dollar coin 

orders, which generate more seigniorage compared to lower-value denominations, are expected 

to increase. The performance target for seigniorage per dollar issued is $0.47 in FY 2016 and 

$.46 in FY 2017.
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Customer Satisfaction Index (CSI)

The Mint conducts a quarterly survey of a random sample of active numismatic customers. The 

survey is intended to capture customer satisfaction with the Mint’s service performance as a coin 

products supplier and with the quality of specific products. The CSI is a single quantitative score 

of the survey results. The Mint’s strategic goal for this program is to “Responsibly expand the 

numismatic program.” 

By the end of FY 2015, the CSI reached 89.5 percent, falling just below the target of 90.0 

percent. There was a drop in the CSI immediately following the conversion to the new order 

management system. The performance target for CSI is 90.0 percent for FY 2016 and 

FY 2017. The Mint anticipates the FY 2016 and 2017 CSI ratings to improve from the FY 2015 

rating as customers became more familiar and comfortable with the new system. 

Safety Incident Recordable Rate

The safety incident recordable rate is the number of injuries and illnesses meeting the 

Occupational Safety and Health Administration recording criteria per 100 full-time workers. It 

measures the occurrence of work-related incidents involving death, lost time and restricted work, 

loss of consciousness, and medical treatment. The Mint’s strategic goal for this is “Foster a safe, 

engaged, productive and valued workforce.”

By the end of FY 2015, the total recordable case rate was 3.42, which is above the 2.96 target but 

significantly below the industry average rate of 5.9 for metal forging and stamping 

manufacturers. 

The performance target for safety incident recordable rate is 2.91 for FY 2016 and 2.82 for

FY 2017. During FY 2015, the Mint set a goal to become world-class in safely operating its 

facilities and optimizing their environmental footprint. To help achieve this goal, the Mint 

established an office of Environmental Safety and Health. During FY 2015, the Mint completed 

a baseline audit of each facility and implemented risk management guidelines to prioritize 

resources and mitigate risk in advance of injuries or catastrophic events.

Numismatic Sales Units

The numismatic sales unit metric measures public demand for coin products sold from 

numismatic operations. The Mint’s strategic goal for this program is to “Responsibly expand the 

numismatic program.” Increased unit sales would demonstrate greater public awareness of, and 

demand for, coin products produced by the Mint. Increases in units sold would also potentially 

reduce product unit costs, as fixed costs would be spread over a greater number of units. 

In FY 2015, the Mint sold 5.4 million units, which is five percent below the fiscal year target of 

5.6 million units. The primary driver for this shortfall was lower customer demand for 

commemorative coins. In FY 2014 the Mint released several popular high-volume products such 

as the National Baseball Hall of Fame Commemorative Coins. Sales volume fell because there 

were no correspondingly popular products sold during FY 2015 to replace the previous year’s 

demand. Demand for annual recurring sets also continues to decline. This also contributed to 

the Mint not meeting its FY 2015 target.
Mint - 15

In FY 2016, a loss in unit sales of two very popular products – The American Eagle Silver (AE) 

dollar coins – is anticipated. The passage of the “Fixing America’s Surface Transportation Act” 

or the “FAST Act” (Public Law 114-94) includes a provision affecting the 2016 AE coin sales. 

Proof and Uncirculated versions of the AE bullion coins issued in 2016 shall have a smooth-edge 

incused with a designation that notes the 30th anniversary of the first issue of the coins. The 

bureau estimates that deliveries of 2016 AE coins will begin in July 2016. The result is that the 

Mint will lose six months of AE coin sales in FY 2016. In addition, the Presidential $1 Coin 

Program and its associated products generate one million unit sales each year. In 2016, the last 

year of this statutory program, the Mint commemorates three Presidents, Nixon, Ford, and 

Reagan; in previous years, four presidents were commemorated. As a result, the Presidential $1

Coin Program is estimated to decline 20 percent in FY 2016.

In FY 2017, the AE coin program is expected rebound to previous sales levels; however, the 

Mint estimates a decline of 850,000 units because of the loss of the presidential dollar coin 

program. 

As a result, this performance target has been established at 4.6 million units for FY 2016 and 4.1 

million units for FY 2017. The Mint will continue efforts in the areas of products, promotion, 

distribution, and systems to achieve responsible growth in numismatic product sales.

3.1.1 – Manufacturing Budget and Performance Plan

Dollars in Thousands

Manufacturing Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $3,624,483 $4,623,384 $3,806,838 $3,525,178 $3,891,773 $2,937,553 $2,896,207 $2,956,207

Budget Activity Total $3,624,483 $4,623,384 $3,806,838 $3,525,178 $3,891,773 $2,937,553 $2,896,207 $2,956,207

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Customer 

Satisfaction Index 

(%)

86.1 91.7 90.0 92.6 89.8 89.5 90.0 90.0 90.0

Numismatic Sales 

Units (Million Units)

N/A 7.3 5.6 5.51 5.7 5.4 5.6 4.6 4.1

Safety Incident 

Recordable Rate

2.29 2.74 3.5 2.9 3.31 3.42 2.96 2.96 2.96

Seigniorage per 

Dollar Issued ($)

.49 .45 .21 .24 .37 .47 .24 .47 .46

Key: DISC - Discontinued
Mint - 16

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The Mint is a non-appropriated manufacturing bureau whose primary mission is to produce 

coinage in amounts that the Secretary of the Treasury decides are necessary to meet the needs of 

the United States. Its capital investment requirements are predominantly for manufacturing-type 

equipment. Capital investments, along with its operating expenses, are paid out of its PEF. The 

aggregate amount of new liabilities and obligations incurred during the budget fiscal year for 

capital investments in circulating coinage operations and protective service conforms to a 

legislative limitation for these capital projects. As such, the Mint’s long-range planning process 

is designed to address its capital needs while maintaining spending within legislative limitations.

The Mint's manufacturing capital investment projects focus on safety, equipment replacement, 

protection, and facility improvements.

In addition, the Mint’s capital investments encompass a robust information technology (IT) 

portfolio that focuses on the optimization of formal governance structures to manage IT 

investments and programs in an effort to emphasize reductions in system redundancy and to 

modernize the IT system infrastructure. Enterprise architecture reviews ensure alignment of IT 

investments to the bureau’s strategic plans and the strategic enterprise direction of the 

Department of the Treasury. IT investments are closely monitored for cost, schedule, and 

performance to ensure expected results and benefits are achieved.

In accordance with the Statement of Federal Financial Accounting Standard (SFFAS) No. 6, the 

Condition Index and the Deferred Maintenance assessments for purposes of Federal Real 

Property Profile, the Mint has no deferred maintenance for its equipment. Maintenance is 

scheduled and performed regularly to keep the manufacturing equipment operating at optimal 

levels.

Total Capital Investments Plan

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.

Capital IT/Non-IT Summary FY 2015 FY 2016 FY 2017

Category Actuals Estimated Estimated

Non-IT Investments $27,636,582 28,158,000 38,375,000

IT Investments $1,674,650 2,310,000 2,125,000

Total Investments $29,311,232 $30,468,000 $40,500,000

Office of the Comptroller of the 

Currency

FY 2017 

President’s Budget Submission

February 9, 2016
OCC - 2

Table of Contents

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

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

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities, and Context........................................................................................... 3

Section 2 – Budget Adjustments and Appropriations Language ........................................... 14

2.2 – Operating Levels Table.................................................................................................... 14

2B – Appropriations Language and Explanation of Changes................................................... 14

2C – Legislative Proposals........................................................................................................ 14

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

3A – Supervise.......................................................................................................................... 15

3.1.1 – Supervise Budget and Performance Plan...................................................................... 18

3B – Regulate............................................................................................................................ 18

3.1.2 – Regulate Budget and Performance Plan ....................................................................... 19

3C – Charter.............................................................................................................................. 19

3.1.3 – Charter Budget and Performance Plan.......................................................................... 20

Section 4 – Supplemental Information...................................................................................... 21

4A – Summary of Capital Investments..................................................................................... 21
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Section 1 – Purpose

1A – Mission Statement

To ensure that national banks and federal savings associations operate in a safe and sound 

manner, provide fair access to financial services, treat customers fairly, and comply with 

applicable laws and regulations.

1.1 – Resource Detail Table

Dollars in Thousands

Office of the Comptroller of the 

Currency FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budgetary Resources Actual Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments 0 1,110,311 0 1,169,500 0 1,200,900 0 31,400 .00 2.68%

Interest 0 16,701 0 19,400 0 20,000 0 600 .00 3.09%

Other Income 0 18,632 0 15,600 0 15,900 0 300 .00 1.92%

Unobligated Balances from Prior Years 0 1,301,636 0 1,451,369 0 1,522,569 0 71,200 .00 4.91%

Total Revenue/Offsetting Collections 0 2,447,280 0 2,655,869 0 2,759,369 0 103,500 .00 3.90%

Expenses/Obligations

Supervise 3,337 873,414 3,469 993,905 3,469 1,013,782 0 19,877 0.00% 2.00%

Regulate 396 103,574 411 117,863 411 120,221 0 2,358 0.00% 2.00%

Charter 72 18,922 75 21,532 75 21,963 0 431 0.00% 2.00%

Total Expenses/Obligations 3,805 995,910 3,955 1,133,300 3,955 1,155,966 0 22,666 0.00% 2.00%

Net Results 0 1,451,369 0 1,522,569 0 1,603,403 0 80,834 .00 5.31%

1B – Vision, Priorities, and Context

The Office of the Comptroller of the Currency (OCC) was created by Congress in 1863 to 

charter national banks; oversee a nationwide system of banking institutions; and ensure national 

banks are safe and sound, competitive and profitable, and capable of serving in the best possible 

manner the banking needs of their customers. Effective on July 21, 2011, Title III of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), transferred to the 

OCC the responsibility for the supervision of federal savings associations and rulemaking 

authority for all savings associations. 

As of September 30, 2015, the OCC supervised 1,010 national bank charters and 49 federal 

branches of foreign banks in the United States with total assets of approximately $10.4 trillion, 

and 416 federal savings associations (which include 165 mutual institutions) with total assets of 

approximately $688 billion. In total, the OCC supervises approximately $11.1 trillion in 

financial institution assets.
OCC - 4

OCC Vision, Core Values, and Goals

Vision

The OCC is a preeminent prudential bank supervisor that adds value through proactive and risk 

based supervision; is sought after as a source of knowledge and expertise; and promotes a vibrant 

and diverse banking system that benefits consumers, communities, businesses, and the U.S. 

economy.

The OCC culture is agile, accountable, strategy-based, and data-driven. The OCC team of 

dedicated professionals uses substantive expertise, sound judgment, and comprehensive 

experience to assess the financial condition, management, and regulatory compliance of national 

banks and federal savings associations to ensure a vibrant and diverse banking system that 

benefits all Americans.

Core Values

• Integrity – We do the right thing by acting in accordance with law and applicable policies 

and applying the highest ethical standards.

• Expertise – We continuously enhance our skills and experience, act on careful analysis, and 

apply our knowledge and capabilities to achieve the agency’s mission.

• Collaboration – We include diverse stakeholders in our decision-making process, seek 

alternative perspectives, and excel in a team environment.

• Independence – We act without undue external influences and exercise our own judgment in 

a manner consistent with the agency’s mission and vision. 

Goals

The OCC has established three goals outlined in its strategic plan that help support a strong 

economy for the American public: 1) A vibrant and diverse system of national banks and federal 

savings associations that supports a robust U.S. economy; 2) “One OCC” focused on 

collaboration, innovation, coordination, and process efficiency; 3) The OCC is firmly positioned 

to continue to operate independently and effectively into the future. To achieve its goals and 

objectives, the OCC organizes its activities under three programs: 1) Supervise, 2) Regulate, and 

3) Charter. Effective supervision and a comprehensive regulatory framework are the key tools 

that the OCC uses to ensure that national banks and federal savings associations operate in a safe 

and sound manner and that they provide fair access to financial services and fair treatment of 

their customers. A robust chartering program allows new entrants into the financial services 

sector while ensuring that they have the necessary capital, managerial, and risk management 

processes to conduct activities in a safe and sound manner.

The OCC’s priorities focus on strengthening the resiliency of the institutions subject to its 

jurisdiction through its supervisory and regulatory programs and activities. A stronger and more 

resilient banking system directly supports three of the Department of the Treasury’s (Treasury) 

FY 2014-2017 strategic goals: Goal 1) Promote domestic economic growth and stability while 

continuing reforms of the financial system; Goal 4) Safeguard the financial system and use 

financial measures to counter national security threats; and Goal 5) Create a 21st

-century 

approach to government by improving efficiency, effectiveness, and customer interaction.
OCC - 5

The OCC’s nationwide staff of bank examiners conducts on-site reviews of banks and provides 

sustained supervision of these institutions’ operations. Examiners analyze asset quality, capital 

adequacy, earnings, liquidity, and sensitivity to market risk for all banks, and assess compliance 

with federal consumer protection laws and regulations.1

 Examiners also evaluate management’s 

ability to identify and control risk, and assess banks’ performance in meeting the credit needs of 

the communities in which they operate, pursuant to the Community Reinvestment Act.

In supervising banks, the OCC has the power to:

• Examine banks;

• Approve or deny applications for new charters, branches, capital, or other changes in 

corporate or banking structure;

• Take supervisory and enforcement actions against banks that do not comply with laws and 

regulations or that otherwise engage in unsafe or unsound practices;

• Remove and prohibit officers and directors, negotiate agreements—both formal (i.e., public) 

and informal (i.e., non-public)—to change banking practices, and issue cease-and-desist 

orders as well as Civil Money Penalties (CMP); and

• Issue rules and regulations, legal interpretations, supervisory guidance, and corporate 

decisions governing investments, lending, and other practices.

Operations are funded primarily (approximately 97 percent) from semiannual assessments levied 

on national banks and federal savings associations. Revenue from investments in Treasury 

securities and other income comprise the remaining three percent of the OCC’s funding. The 

OCC does not receive congressional appropriations to fund any portion of its operations. 

Supervisory Activities

The OCC influences the banking system using several means: 1) policy guidance and regulations 

that set forth standards for sound banking practices; 2) on-site examinations and ongoing off-site 

monitoring that enable the OCC to assess compliance with those standards and to identify 

emerging risks or trends; and 3) a variety of supervisory and enforcement tools – ranging from 

matters requiring the attention of the financial institution’s board and management to informal 

and formal enforcement actions – that are used to obtain corrective action to remedy weaknesses, 

deficiencies, or violations of law. 

The OCC undertook the following initiatives in fiscal year (FY) 2015:

• The OCC published revised procedures providing additional clarity to examiners and bankers 

about the OCC’s policies and procedures for Matters Requiring Attention.

• The OCC and other federal agencies in partnership with the State Liaison Committee of the 

Federal Financial Institutions Examination Council (FFIEC) issued guidance on private 

student loans with graduated repayment terms at origination.

• The OCC in conjunction with FFIEC members issued updates to the Bank Secrecy Act/AntiMoney Laundering (BSA/AML) Examination Manual. 

• The OCC issued its fall and spring Semiannual Risk Perspective reports that discuss 

 1 The Consumer Financial Protection Bureau assesses compliance with Federal consumer financial laws as defined 

under Title X of the Dodd Frank Act for banks with assets over $10 billion.
OCC - 6

emerging risks facing OCC-supervised banks and identifies supervisory priorities.

• The OCC provided testimony to the Committee on Banking, Housing and Urban Affairs 

of the United States Senate on cybersecurity and participated in interagency initiatives 

to improve cybersecurity awareness. 

• The OCC and other FFIEC members issued a Cybersecurity Assessment Tool 

(Assessment) that institutions may use to evaluate their risks and cybersecurity 

preparedness.

• The OCC reviewed and summarized community and midsize banks’ practices for 

measuring interest rate risk to assist bankers in benchmarking their individual bank’s 

practices.

• The OCC, Federal Deposit Insurance Corporation (FDIC) and Board of Governors of 

the Federal Reserve System (FRB) issued frequently asked questions (FAQs) on 2013 

interagency leveraged lending guidance. The FAQs address questions from the industry 

relating to the implementation of the guidance.

• The OCC emphasized the changing risk environment for indirect auto lending by OCCsupervised institutions and began taking additional supervisory actions and acquiring 

additional analytical tools to monitor and assess this risk.

• The OCC monitored the direct and correlated risk to OCC-supervised banks from the 

rapid decline in crude oil prices.

• The OCC issued its annual Survey of Credit Underwriting Practices report, which 

highlights a continued easing in underwriting standards and an increasing level of policy 

exceptions. 

• The OCC conducted hundreds of outreach meetings with bankers to ensure that the 

banking industry understands OCC perspectives and expectations.

• The OCC coordinated with the FDIC, FRB, Financial Stability Oversight Council 

(FSOC), and Basel-related committees on supervisory policies and strategies.

• The OCC continued implementing recommendations from the OCC’s international peer 

review by selecting a Deputy Comptroller for Supervision Risk Management, expanding 

lead expert groups, and establishing a team to develop an enterprise risk management 

function for the agency.

In FY 2015, the OCC published on its web site enforcement actions against regulated 

institutions, including the imposition of CMPs. The OCC continues to be actively involved in 

the residential foreclosure oversight process to ensure that all foreclosures are handled consistent 

with regulatory requirements. In addition, over the past year, the OCC took significant 

enforcement actions to address BSA/AML violations, and unfair, deceptive, or abusive acts or 

practices.

The OCC’s supervisory activities in FY 2015 continued to focus on evaluating and strengthening 

the quality of banks’ risk management to identify, measure, monitor, and control the build-up of 

risk, both on and off-balance sheet. A primary focus of on-site supervisory activities was the 

quality of banks’ risk management and corporate governance practices. Specific areas of 

supervisory activities included: 1) evaluating the effectivness of credit risk rating systems, and 

the adequacy of underwriting standards and allowance for loan and lease reserve methodologies; 

2) assessing banks’ strategic and business making decision processes to determine that banks 

comprehensively identify, assess and report all risks arising from cost reduction programs, use of 
OCC - 7

third party vendors, and expansion into new products or services; 3) evaluating banks’ interest 

rate risk exposures and model assumptions; and 4) identifying and controlling cybersecurity 

threats.

Operational risk management – managing the risk of loss due to (i) failure of people, processes,

and systems, and (ii) external events – has become an area of heightened risk and supervisory 

attention. Strong enterprise risk management processes have been and will continue to be a point 

of emphasis, particularly at larger institutions. In addition, the OCC continues to assess and 

address supervisory issues in the areas of fair lending, consumer protection, BSA/AML, and 

information security.

In addition to its ongoing supervisory activities, the OCC undertook the following initiatives in 

FY 2015:

• Final Risk Retention Rule: The OCC and five federal agencies approved a final rule requiring 

sponsors of securitization transactions to retain risk in those transactions. The final rule 

implements the risk retention requirements in the Dodd-Frank Act. The final rule generally 

requires sponsors of asset-backed securities (ABS) to retain not less than five percent of the 

credit risk of the assets collateralizing the ABS issuance. As required by the Dodd-Frank 

Act, the final rule defines a “qualified residential mortgage” (QRM) and exempts 

securitizations of QRMs from the risk retention requirement. The final rule aligns the QRM 

definition with that of a qualified mortgage as defined by the Consumer Financial Protection 

Bureau (CFPB). The final rule also does not require any retention for securitizations of 

commercial loans, commercial mortgages, or automobile loans if they meet specific 

standards for high quality underwriting. 

• Large and Midsize Bank Supervision Peer Review: The OCC continued work on 

implementing a number of action items as part of its effort to enhance bank and thrift 

supervision processes and policies. These efforts are the result of an assessment of the 

OCC’s approach to the supervision of large-and mid-sized institutions conducted in 2014 by 

an international peer review team. Actions completed in FY 2015 included the expansion 

and realignment of the OCC’s lead expert examiners in the agency’s Large Bank program; 

enhancements to the OCC’s strategy development process; updates and revisions to the 

OCC’s strategic framework; the establishment of formal Strategic Management and 

Enterprise Risk Management units; and the enhancements to the analytical functions within 

the OCC’s National Risk Committee structure. 

• Community Bank Regulatory Burden: The OCC continued its efforts to address concerns 

regarding regulatory burden on community banks and to foster the ability of small banks to 

compete in the market place. These efforts included:

- The Economic Growth and Regulatory Paperwork Reduction Act Reviews. The OCC, the 

FRB, and the FDIC published two notices requesting comment on their regulations and 

held a series of outreach meetings as part of the agencies’ effort to reduce regulatory 

burden as required by the Economic Growth and Regulatory Paperwork Reduction Act of 

1996 (EGRPRA). These notices and outreach meetings provided interested parties an 

opportunity to comment on regulatory burden reduction directly to the agencies’ staff 

members and senior management. 
OCC - 8

- Call Report Simplification. Through the FFIEC, the OCC, FRB and FDIC commenced a 

project to consider ways to further tailor reporting requirements for community banks. 

As part of this effort the agencies plan to undertake a comprehensive review of every line 

item of every schedule in the Call Report to identify data items that can be deleted and to 

consider the merits of creating a more streamlined Call Report for certain community 

banks that would omit schedules and data items not applicable to most of these 

institutions. 

- Community Bank Collaboration. The OCC issued a paper entitled “An Opportunity for 

Community Banks: Working Together Collaboratively,” describing how community 

banks can pool resources to obtain cost efficiencies and leverage specialized expertise. 

The paper explores the benefits of collaboration, outlines how community banks can 

structure collaborative arrangements, and emphasizes the need for effective oversight of 

collaborative arrangements.

• Independent Foreclosure Review (IFR): The OCC and the FRB previously amended consent 

orders against 15 mortgage servicers for deficient practices in mortgage servicing and 

foreclosure processing. During FY 2015, servicers covered by mortgage servicing and 

foreclosure related consent orders continued to take action to correct deficiencies in mortgage 

servicing and foreclosure processes as directed by the OCC and FRB enforcement 

actions. Servicers reported that much of that work was complete and federal examiners 

continued the process of verifying and testing that work. In addition, pursuant to the 

amended consent orders that resolved the IFR, nearly $3.6 billion in payments to eligible 

borrowers under the settlement funds supervised by the OCC and FRB will have been cashed 

or deposited through the end of November 2015. In June 2015, the OCC announced that it 

had terminated the consent orders for three mortgage servicers because it was determined 

that these institutions complied with the orders issued in April 2011 and amendments issued 

in February 2013. At the same time, the OCC issued amended orders for six other 

institutions to restrict certain business activities that they conduct because they have not met 

all of the requirements of the consent orders. Foreclosure-related consent orders against two 

other mortgage servicers were terminated previously by operation of law after these 

institutions ceased to operate as regulated, insured depository institutions. The OCC also 

announced it will escheat at the end of 2015 any remaining uncashed payments made 

pursuant to the IFR Payment Agreement so eligible borrowers and their heirs may claim the 

funds through their states’ escheatment processes. 

• Matters Requiring Attention: The OCC published revised policy and procedures for how it 

manages Matters Requiring Attention (MRA) resulting from its examination of supervised 

institutions. MRAs communicate specific supervisory concerns identified during 

examinations in writing to boards and management teams of regulated institutions. MRAs 

must receive timely and effective corrective action by bank management and follow-up by 

OCC examiners. The OCC’s updated MRA guidance enhances the agency’s ability to ensure 

a safe and sound federal banking system by emphasizing timely detection and sustainable 

corrective action of deficient bank practices before they affect the bank’s condition. The 

updated guidance standardizes MRA terminology, format, follow-up, analysis, and reporting 

across the agency. The guidance addresses recommendations from the international peer 
OCC - 9

review of the OCC’s supervision of large and midsize institutions, which was conducted last 

year.

• International Swaps and Derivatives Association’s (ISDA) Resolution Stay Protocol in 

Regulatory Capital and Liquidity Coverage Rules: The OCC, and the FRB issued an interim 

final rule to ensure that the treatment of over-the-counter (OTC) derivatives, eligible margin 

loans, and repo-style transactions under the two agencies’ regulatory capital and liquidity 

coverage ratio rules would be unaffected by the implementation of certain foreign special 

resolution regimes for financial companies or by a banking organization’s adherence to the 

ISDA’s Resolution Stay Protocol. In addition, the interim final rule ensures that the lending 

limits of affected national banks and federal savings association would be unchanged. The 

regulatory capital and liquidity coverage ratio rules for banking organizations recognize 

netting or collateral agreements for OTC derivatives and certain securities financing 

transactions, so long as the banking organization may terminate positions upon an event of 

default of the counterparty. The rules provide that the transactions may receive this 

treatment even though certain U.S. laws, including Title II of the Dodd-Frank Act and the 

Federal Deposit Insurance Act, may temporarily stay the termination rights

• Guidance on Private Student Loans with Graduated Repayment Terms at Origination: The 

OCC and other federal financial regulatory agencies, in partnership with the State Liaison 

Committee (SLC) of the FFIEC, issued guidance for financial institutions on private student 

loans with graduated repayment terms at origination.

• Minimum Requirements for Appraisal Management Companies: The OCC and five other 

federal financial regulatory agencies issued a final rule that implements minimum 

requirements for state registration and supervision of appraisal management companies 

(AMCs). The final rule implements amendments to Title XI of the Financial Institution 

Reform, Recovery, and Enforcement Act of 1989 made by the Dodd-Frank Act. Under the 

rule, states may elect to register and supervise AMCs. The AMC minimum requirements in 

the final rule apply to states that elect to register and supervise AMCs. 

• Final Flood Insurance Rules: The OCC, FDIC, FRB, National Credit Union Administration

(NCUA), and Farm Credit Administration (FCA) issued a final rule that implements certain 

provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner 

Flood Insurance Affordability Act of 2014, including the mandatory escrow provisions. 

• Bank Secrecy Act/Anti-Money Laundering: The OCC in conjunction with the other FFIEC 

member agencies issued updates to the FFIEC’s BSA/AML Examination Manual to 

incorporate regulatory changes and clarify supervisory expectations in a number of areas. 

The OCC also issued a statement to clarify its expectations with regard to offering banking 

services to money services businesses.

• The OCC National Risk Committee’s Semiannual Risk Perspective: The OCC continued to 

produce this informative semiannual report that highlights the OCC’s perspective on key 

issues and risks that pose threats to the safety and soundness of banks. The report draws 

upon the findings of the OCC’s supervisory activities and analyses of the banking industry.
OCC - 10

• Cybersecurity Risk Management: During FY 2015, the OCC, under the Comptroller’s 

leadership as the chair of the FFIEC, continued to raise industry awareness of the threats 

posed to the financial system by cybersecurity risks. In November 2014, the FFIEC issued 

observations from the cybersecurity assessment pilot that the OCC and other FFIEC agencies 

conducted during the summer of 2014. The observations provide questions that senior 

management and boards of directors can use to evaluate their institution’s cybersecurity 

preparedness. The FFIEC also issued a statement encouraging financial institutions to join 

Financial Services Information Sharing and Analysis Center as part of their actions to 

identify, respond to and mitigate cyber threats. In March 2015 the FFIEC issued two 

statements about ways that financial institutions can identify and mitigate cyber-attacks that 

compromise user credentials or use destructive software, known as malware. Additionally, 

the OCC’s Senior Critical Infrastructure Officer provided testimony to the Committee on 

Banking, Housing and Urban Affairs of the United States Senate on the cybersecurity 

initiatives the OCC and the FFIEC have taken, the avenues in place to share cybersecurity 

information, and recommendations where legislation may be helpful to enhance information 

sharing among financial institutions. In June 2015, the FFIEC, on behalf of its members, 

issued a Cybersecurity Assessment Tool (Assessment) that institutions may use to evaluate 

their risks and cybersecurity preparedness. OCC examiners will incorporate the Assessment 

into examinations of national banks, federal savings associations, and federal branches and 

agencies (collectively, banks) of all sizes beginning in late 2015, with completion expected 

by 2016. Completion for smaller community banks with an 18-month examination cycle is 

expected by early 2017, or sooner. While all financial institutions may use the Assessment 

Tool themselves to evaluate their risks and cybersecurity preparedness, OCC examiners will 

use the Assessment to supplement examination work to gain an understanding of an 

institution’s inherent risk, risk management practices, and controls related to cybersecurity. 

The Assessment helps banks and examiners determine a bank’s inherent risk profile and level 

of cybersecurity preparedness. The results may be reviewed to determine whether the bank’s 

cybersecurity maturity levels align with the bank’s inherent risk profile. In addition to the 

Assessment, the FFIEC has also made available resources institutions may find useful, 

including an executive overview, a user’s guide, an online presentation explaining the 

Assessment, and appendixes mapping the Assessment’s baseline items to the FFIEC 

Information Technology (IT) Examination Handbook and to the National Institute of 

Standards and Technology’s (NIST) Cybersecurity Framework.

Enforcement Activities 

As needed, the OCC uses its enforcement authority to ensure that national banks and federal 

savings associations operate in a safe and sound manner and in compliance with laws and 

regulations. This authority comes in the form of formal and informal enforcement actions.

Through September of FY 2015, the OCC published 107 formal enforcement actions against 

regulated institutions, resulting in the assessment of just over $1 billion in civil money penalties 

as well as orders for unquantified consumer reimbursement for unfair billing practices and 

deceptive marketing. The OCC issued 195 enforcement actions against institution-affiliated 

parties (IAPs), resulting in the assessment of approximately $1 million in civil money penalties.
OCC - 11

Significant enforcement activities in FY 2015 included, among others:

• Actions against banks that failed to maintain effective BSA/AML programs and file 

complete, timely, and accurate Suspicious Activity Reports (SAR). 

• Assessment of $950 million in fines against three national banks for unsafe or unsound 

practices related to the foreign exchange trading business, involving the manipulation of 

exchange rates and trading actions potentially detrimental to consumers. 

• Actions to ensure servicemembers receive credit protections for non-home loans under the 

Servicemembers Civil Relief Act.

• Assessment of penalties and orders of restitution to bank customers for unfair and deceptive 

practices in billing for identity theft protection products, marketing practices related to a debt 

cancellation product, and resolution of deposit amount discrepancies in customer accounts. 

The OCC supervision and enforcement staff also work closely with their CFPB counterparts on 

matters affecting OCC-regulated entities.

Regulatory Activities

The OCC’s strategic objectives emphasize regulatory oversight practices that support national 

banks’ and federal savings associations’ ability to compete while maintaining safety and 

soundness. In addition, the OCC will continue its legal work of analysis and interpretation of 

national bank and federal savings association powers and authorities.

The OCC devoted a significant amount of resources in FY 2015 to regulatory activities 

relating to the remaining implementation of the Dodd-Frank Act, as well as the finalization 

and implementation of the Liquidity Coverage Ratio, and participating on the FSOC. 

Specific actions included:

• The OCC and five federal agencies approved the final Risk Retention Rule under the 

Dodd-Frank Act. 

• The OCC continued efforts to address concerns regarding regulatory burden in community 

banks. These efforts include: 

- The EGRPRA Reviews 

- Call Report Simplification 

- Community Bank Collaboration

- Legislative Proposals

• The OCC and the FRB issued an interim final rule to ensure certain treatment under 

regulatory capital and liquidity coverage ratio rules would be unaffected by adherence to the 

ISDA’s Resolution Stay Protocol.

• The OCC and five other federal agencies issued the final rule on minimum requirements for 

appraisal management companies.

• The OCC, FRB, FDIC, NCUA, and FCA issued the final flood insurance rules.

• The OCC, FRB, and FDIC finalized revisions to the advanced approaches capital rules 

adopted in July 2013.

Charter Activities

The OCC processed 2,524 corporate applications and notices in FY 2015, of which 97 percent 

were completed within required timeframes. In order to address potential safety and soundness 

problems before they arise, the OCC may impose conditions upon bank transaction approvals 
OCC - 12

covering, for example, capital and liquidity arrangements and deviations from business plans. 

The OCC continues to receive and process a significant share of applications involving 

resolution of problem financial institutions.

FY 2016 and 2017 Priorities

A major focus of the OCC’s supervisory, regulatory, and administrative programs for FY 2016 

will be implementing the remaining applicable provisions of the Dodd-Frank Act and the 

enhanced capital framework under Basel III. Work will also continue to fully integrate the 

applicable regulatory, supervisory policy and examination platforms for national banks and 

federal savings associations and to ensure that these institutions comply with applicable new 

statutory and regulatory requirements. In addition, the OCC and the other federal banking 

agencies are conducting a review of the burden imposed on community institutions by existing 

regulations pursuant to the decennial review required by the EGRPRA. 

The OCC is observing signs that credit risk is building, including erosion in the underwriting 

standards for syndicated leveraged loans and loosening of standards in the indirect auto market. 

Therefore, the OCC will continue to closely evaluate current underwriting standards by 

conducting targeted underwriting examinations and completing the annual underwriting survey. 

The OCC will be working to complete the implementation of recommended actions arising out 

of the Large and Midsize Supervision Peer Review project and will also continue efforts to 

implement its strategic initiatives to make the OCC a stronger and more effective organization. 

The OCC will conduct examinations based on the risk profile of individual national banks and 

federal savings associations to ensure they are safe and sound, sufficiently capitalized, and 

comply with consumer protection laws and regulations. Priorities and activities will include 

supervisory reviews related to corporate governance and oversight, credit underwriting, 

compliance, cyber threats, operational risk, BSA/AML, and fair access. Examiners will work to 

resolve problem national banks and federal savings associations situations effectively by 

identifying problems at the earliest possible stage, clearly communicating concerns and 

expectations to bank management through appropriate enforcement actions, and ensuring timely 

follow-up on needed corrective actions.

Industry Outlook

The environment continues to be challenging for the OCC and the national banking and federal 

savings association industry (“federal banking system”). The federal banking system faces 

heightened compliance, operational, reputation, and strategic risks because of significant changes 

in laws, regulations, and accounting standards. National banks and federal savings associations 

will need to incorporate these changes into their operations, which is likely to lead to 

fundamental shifts in many institutions’ business models and strategic plans. National banks and 

federal savings associations also face intense competition and risks from the normalization of 

interest rates. To address these challenges, the OCC will need to conduct ongoing assessments 

of emerging risks and the underlying condition of the federal banking system, and to prioritize 

and allocate resources to the areas and institutions at highest risk.

The federal banking system has weathered a serious disruption to financial markets, a crisis in 

the mortgage sector, and a slow recovery from a long and deep recession. The long-term trend 
OCC - 13

of consolidation in the federal banking system is likely to continue; the table below shows 

estimates of the change in number of institutions and share of assets held by banks with over $10 

billion in assets, extrapolating from trends experienced between 2004 and 2014. The 

extrapolations exclude trust companies and foreign branch offices because, compared to national 

banks and federal savings associations, their growth is less closely linked to underlying domestic 

economic trends. The asset forecast assumes that system assets continue to grow at the recent 

average rate of nominal Gross Domestic Product (GDP) over the next five years.

Number of institutions Assets

Share of total system 

assets in institutions with 

assets >$10 billion

Estimated 

change OCC banks

OCC 

thrifts All OCC-supervised 2014 92.6%

2014 to 2019 -23% -21% 24% 2019 94.9%

Loan growth has been slower than usual in an economic recovery, in part because the economy 

as a whole grew more slowly than is usual after a severe recession. The combination of 

recession and financial crisis caused households to deleverage, reducing loan demand, especially 

the demand for residential mortgage loans. Tighter underwriting standards have also reduced the 

supply of credit from pre-recession levels. Commercial lending, however, has been growing, 

with outstanding commercial and industrial loans now above the pre-recession peak. This has 

occurred despite firms’ large cash reserves, and the ability of medium-size firms to borrow longterm at low rates in bond markets. 

Credit loss rates for the system rose sharply for all major loan categories during the financial 

crisis and recession, but are now back to or below their two-decade averages for all major loan 

categories. To strengthen their positions in the aftermath of the crisis, many financial institutions 

have raised additional capital and the largest have built up historically high shares of liquid 

assets. The result is a stronger federal banking system than existed before the crisis.
OCC - 14

Section 2 – Budget Adjustments and Appropriations Language

2.2 – Operating Levels Table

Dollars in Thousands

Office of the Comptroller of the Currency FY 2015 FY 2016 FY 2017

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 502,530 546,445 557,374

11.3 - Other than full-time permanent 6,672 7,052 7,193

11.5 - Other personnel compensation 3,096 3,255 3,320

11.9 - Personnel Compensation (Total) 512,298 556,752 567,887

12.0 - Personnel benefits 215,491 246,911 251,849

13.0 - Benefits for former personnel 40 149 152

Total Personnel Compensation and Benefits $727,829 $803,812 $819,888

21.0 - Travel and transportation of persons 55,613 70,695 72,109

22.0 - Transportation of things 2,441 2,271 2,316

23.1 - Rental payments to GSA 56 58 59

23.2 - Rental payments to others 62,848 62,305 63,551

23.3 - Communication, utilities, and misc charges 12,151 16,488 16,818

24.0 - Printing and reproduction 579 718 732

25.1 - Advisory and assistance services 36,307 34,287 34,973

25.2 - Other services 17,991 21,246 21,671

25.3 - Other purchases of goods & serv frm Govt accounts 10,535 12,653 12,906

25.4 - Operation and maintenance of facilities 4,716 4,946 5,045

25.7 - Operation and maintenance of equip 54,249 60,265 61,470

26.0 - Supplies and materials 6,447 7,836 7,993

31.0 - Equipment 20,502 18,675 19,049

32.0 - Land and structures 46 16,750 17,085

42.0 - Insurance claims and indemnities 240 295 301

Total Non-Personnel 284,721 329,488 336,078

Total Budgetary Resources $1,012,550 $1,133,300 $1,155,966

Budget Activities:

Supervise 873,414 993,905 1,013,782

Regulate 103,574 117,863 120,221

Charter 18,922 21,532 21,963

Total Budgetary Resources $995,910 $1,133,300 $1,155,966

FTE 3,805 3,955 3,955

2B – Appropriations Language and Explanation of Changes

The OCC receives no appropriations from Congress.

2C – Legislative Proposals

The OCC has no legislative proposals.
OCC - 15

Section 3 – Budget and Performance Plan

3A – Supervise

($993,905,000 from reimbursable resources):

An effective supervision program is the cornerstone of the OCC’s activities that support its 

strategic goals. Specifically, the Supervise Program consists of ongoing supervision and 

enforcement activities that directly support the OCC’s strategic goals to 1) ensure that each 

national bank and federal savings association is operating in a safe and sound manner and is 

complying with applicable laws, rules, and regulations relative to the financial institution and the 

customers and communities it serves, and 2) provide fair access to financial services and fair 

treatment of customers. Assessing the condition and risk management practices of national 

banks and federal savings associations, and requiring corrective actions when weaknesses are 

found, directly supports Treasury’s goal of repairing and reforming the financial system.

The OCC’s Supervision Program specifically supports the following Treasury Objectives:

1.3: Complete implementation of financial regulatory reform initiatives and continue monitoring 

the markets for threats to stability;

1.4: Facilitate commerce by providing trusted and secure U.S. currency, products, and services 

for use by the public;

4.3: Improve the cybersecurity of our Nation’s financial sector critical infrastructure; and

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

The primary goal of the OCC’s Supervision Program is to ensure that institutions operate in a 

safe and sound manner and in compliance with laws requiring fair treatment of their customers 

and fair access to credit and financial products. The OCC’s Supervision Program supports the 

implementation of the financial regulatory reform initiatives including those in the Dodd-Frank 

Act as well as other regulatory initiatives designed to strengthen the nation’s federal banking 

system. The OCC also monitors risks and threats to the stability of the federal banking system 

through its regular examinations of the institutions it supervises and other monitoring programs 

such as its Semi-annual Risk Perspectives Report, participation in the Shared National Credit 

Program, and its Credit Underwriting Survey. 

The OCC’s Supervision Program supports facilitating commerce through the goal of ensuring the 

safety and soundness of the federal banking system. Through its Supervision Program the OCC 

has taken a number of steps to improve the cybersecurity of the nation’s financial sector critical 

infrastructure including organizing webinars for community bankers. The agency continues to 

update examiner handbooks, procedures, and training materials to ensure that, as threats evolve, 

all national banks and federal savings associations can identify cyber risks and strengthen their 

risk management and control systems. The OCC is an active member of the Financial Services 

Information Sharing and Analysis Center, which provides greater real-time insight into a broad 

range of potential threats to the industry and the ability to assist, when appropriate, in a 

coordinated response with other government agencies. Finally, the OCC supports protecting the 

integrity of the financial system through its examinations of compliance with BSA/AML and 

through the initiation of enforcement actions for non-compliance with BSA/AML laws and 

regulations.
OCC - 16

Description of Performance:

Percentage of National Banks and Federal Savings Associations with Composite CAMELS 

Rating of 1 or 2:

The composite Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and 

Sensitivity (CAMELS) rating reflects the overall condition of a national bank or federal savings 

association. Bank regulatory agencies use the Uniform Financial Institutions Rating System, 

CAMELS, to provide a general framework for evaluating all significant financial, operational, 

and compliance factors inherent in a national bank or federal savings association. The rating 

scale is 1 through 5 of which 1 is the highest rating granted. These CAMELS ratings are 

assigned at the completion of every supervisory cycle or when there is a significant event leading 

to a change in CAMELS. 

The OCC has established a target outcome measure that 90 percent of the institutions under its 

supervision have a composite CAMELS rating of 1 or 2. Such a rating is consistent with the 

strategic goal of a safe and sound banking system, that banks maintain adequate capital and 

liquidity and have strong risk management practices. As of September 30, 2015, 91 percent of 

national banks and federal savings associations earned composite CAMELS ratings of either 1 or 

2. Degradation in CAMELS can reflect weaknesses in risk management systems that need 

corrective action. The OCC, consistent with Treasury’s goal of repairing and reforming the 

financial system and supporting the recovery of the housing market, has instructed bank 

examiners to identify and seek corrective action at an earlier stage to address potential problems 

or weaknesses. The OCC’s primary focus is to ensure that CAMELS ratings are an accurate 

reflection of each institution's current financial position, and thus the OCC would not take action 

to prematurely restore a favorable CAMELS rating. As national bank or federal savings 

association performance and asset quality improves and directed corrective actions are 

implemented, the OCC expects CAMELS ratings to continue to improve.

Percentage of National Banks and Federal Savings Associations that are Considered WellCapitalized:

The Federal Deposit Insurance Act established a system that classifies insured depository 

institutions into five categories (well capitalized, adequately capitalized, undercapitalized, 

significantly undercapitalized, and critically undercapitalized) based on their capital levels 

relative to their risks. The OCC has established a target outcome measure that 95 percent of 

national banks and federal savings associations will meet or exceed the well-capitalized 

threshold. 

The economic environment and resulting increase in problem assets placed a strain on some 

banks’ capital buffers that has resulted in levels below the OCC’s target performance measure. 

The OCC works closely with problem national banks and federal savings associations to develop 

rehabilitation plans. Such plans typically include directives to improve or restore capital levels. 

These efforts, combined with a more stable operating environment, have resulted in 

improvement in this performance goal since FY 2009. As of September 30, 2015, 95 percent of 

national banks and federal savings associations were classified as well capitalized. 
OCC - 17

Percentage of National Banks and Federal Savings Associations with Consumer Compliance 

Rating of 1 or 2:

To ensure fair access to financial services and fair treatment of national bank and federal savings 

association customers, the OCC evaluates an institution’s compliance with consumer laws and 

regulations. Bank regulatory agencies use the Uniform Financial Institutions Rating System, 

Interagency Consumer Compliance Rating, to provide a general framework for evaluating 

significant consumer compliance factors inherent in an institution. Each institution is assigned a 

consumer compliance rating based on an evaluation of its present compliance with consumer 

protection and civil rights statutes and regulations, and the adequacy of its operating systems 

designed to ensure continuing compliance. Ratings are on a scale of 1 through 5 of which 1 is 

the highest rating granted. The target for FY 2015 and FY 2016 will currently remain unchanged 

at 94 percent. As of September 30, 2015, national banks and federal savings associations 

continue to show strong compliance with consumer protection regulations with 96 percent 

earning a consumer compliance rating of either 1 or 2. Under the Dodd-Frank Act, the OCC has 

enforcement and supervisory authority for those institutions with total assets of no more than $10 

billion. 

Rehabilitated National Banks and Federal Savings Associations as a Percentage of Problem 

National Banks and Federal Savings Associations One Year Ago:

The OCC’s primary goal for problem national banks and federal savings associations can reach a 

point at which rehabilitation is no longer feasible. The OCC’s early identification and 

intervention with problem financial institutions can lead to a successful rehabilitation. As of 

September 30, 2015, 39 percent of national banks and federal savings associations with 

composite CAMELS ratings of 3, 4, or 5 one year ago have improved their ratings to either 1 or 

2 this year. This is aligns with the target of 40 percent for FY 2015. The OCC continues to 

focus on the early identification and rehabilitation of problem institutions. 

As previously noted, the OCC is taking a number of steps through its Supervise and Regulate 

programs to make national banks and federal savings associations more resilient to financial 

stresses and to identify and obtain corrective action at an earlier stage, when problems can be 

addressed most successfully. These efforts include heightened capital and liquidity standards 

and increased emphasis on the need for stress testing, designed to provide financial institutions 

with stronger capital buffers to withstand unforeseen events. These are multi-year efforts that 

will continue in FY 2015 and beyond. 

Total OCC Costs Relative to Every $100,000 in National Bank and Federal Savings Association 

Assets Regulated:

Beginning in FY 2006, the OCC implemented a performance measure that reflects the efficiency 

of its operations while meeting the increasing supervisory demands of a growing and more 

complex federal banking system. 

The OCC costs are those reported as total program costs on the annual audited Statement of Net 

Cost. National bank and federal savings association assets are those reported quarterly by 

national banks and federal savings associations on the Reports of Condition and Income. Total 

national bank and federal savings association assets represent the growth and complexity of the 

financial institutions under the jurisdiction of the OCC. This measure supports the OCC’s 
OCC - 18

strategic goal of efficient use of agency resources. The OCC’s ability to control its costs while 

ensuring the safety and soundness of national banks and federal savings associations benefits all 

national bank and federal savings association customers. As of September 30, 2015, total OCC 

cost relative to every $100,000 in assets regulated was $9.37 compared to the FY 2015 target of 

$10.20. The OCC will continue its efforts to ensure that resources are used prudently and that 

programs are carried out in a cost effective manner.

3.1.1 – Supervise Budget and Performance Plan

Dollars in Thousands

Supervise Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $618,254 $684,273 $924,417 $873,942 $889,111 $873,414 $993,905 $1,013,782

Budget Activity Total $618,254 $684,273 $924,417 $873,942 $889,111 $873,414 $993,905 $1,013,782

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target

Percent of National Banks and Federal 

Savings Associations with Composite 

CAMELS Rating 1 or 2

N/A N/A 76.0 80.0 87.0 91.0 90.0 90.0

Percentage of National Banks and 

Federal Savings Associations That Are 

Categorized As Well Capitalized 

N/A N/A 92.0 94.0 93.0 95.0 95.0 95.0

Percentage of National Banks and 

Federal Savings Associations With 

Consumer Compliance Rating of 1 or 2

N/A N/A 93.0 94.0 95.0 96.0 94.0 94.0

Rehabilitated National Banks And 

Federal Savings Associations As A 

Percentage Of Problem National Banks 

One Year Ago (CAMEL 3,4, or 5)

N/A N/A 27.0 34.0 39.0 39.0 40.0 40.0

Total OCC Costs Relative To Every 

$100,000 in Bank And Federal Savings 

Associations Assets Regulated ($)

N/A N/A 10.51 9.99 9.75 9.37 10.20 10.20

Key: DISC - Discontinued

3B – Regulate

($117,863,000 from reimbursable resources): 

The OCC’s Regulate Program specifically supports the following Treasury Objectives:

1.3: Complete implementation of financial regulatory reform initiatives and continue monitoring 

the markets for threats to stability;

1.4: Facilitate commerce by providing trusted and secure U.S. currency, products, and services 

for use by the public; and

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

The Regulate Program supports the OCC’s strategic goal of a vibrant and diverse system of 

national banks and federal savings associations that supports a robust U.S. economy. 

Specifically, the Regulate Program consists of ongoing activities that result in the establishment 

of regulations, policies, operating guidance, and interpretations of general applicability to 

national banks and federal savings associations. These regulations, policies, and interpretations 
OCC - 19

may establish system-wide standards, define acceptable national banking and federal savings 

association practices, provide guidance on risks and responsibilities facing national banks and 

federal savings associations, or prohibit (or restrict) national banking or federal savings 

association practices deemed to be imprudent or unsafe. They also establish standards for 

ensuring fair access to financial services and fair treatment of national bank and federal savings 

association customers. This program includes establishing examination policies and handbooks; 

interpreting administrative, judicial, and congressional proceedings; and establishing the 

applicable legal and supervisory framework for new financial services and products.

Description of Performance: 

Specific activities undertaken in FY 2015 as part of this program were described earlier and 

included the issuance of various supervisory guidance on the Volcker rule, heightened enterprise 

risk management expectations, and third party relationship management. Significant resources 

also were spent on various Dodd-Frank rulemakings, including those pursuant to section 171(b) 

regarding minimum risk-based capital requirements; section 941 pertaining to risk retention 

requirements and associated minimum underwriting standards for asset securitizations; and 

sections 731 and 764 related to capital requirements and margin requirements on certain swap 

transactions. In FY 2015, the OCC continued to support operations of the FSOC and issue 

Dodd-Frank rulemakings.

3.1.2 – Regulate Budget and Performance Plan

Dollars in Thousands

Regulate Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $97,735 $108,171 $125,416 $111,783 $105,436 $103,574 $117,863 $120,221

Budget Activity Total $97,735 $108,171 $115,416 $111,783 $105,436 $103,574 $117,863 $120,221

3C – Charter

($21,532,000 from reimbursable resources): 

The OCC’s Charter Program specifically supports the following Treasury Objectives:

1.4: Facilitate commerce by providing trusted U.S. currency, products, and services for use by 

the public;

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

The Charter Program consists of ongoing activities that result in the chartering of national banks 

and federal savings associations and the evaluation of the permissibility of structures and 

activities of national banks and federal savings associations and their subsidiaries. This includes 

the review and approval of new national bank and federal savings association charters, federal 

branches and agencies, mergers, acquisitions, conversions, business combinations, corporate

reorganizations, changes in control, operating subsidiaries, branches, relocations, and 

subordinated debt issuances. By supporting the entry of new products and institutions into the 

financial system in a manner consistent with safety and soundness, the Charter Program supports 
OCC - 20

the OCC’s strategic goals of assuring safety and soundness while allowing national banks and 

federal savings associations to offer a full competitive array of financial services. 

Description of Performance:

Percentage of Licensing Applications and Notices Completed within Established Time Frames:

The OCC’s timely and effective approval of corporate applications contributes to the nation’s 

economy by enabling national banks and federal savings associations to complete various 

corporate transactions and introduce new financial products and services. Delays in providing 

prompt decisions on applications and notices can deprive a national bank or federal savings 

association of a competitive or business opportunity, create business uncertainties, or diminish 

financial results. Time frames have been established for completing each type of application and 

notice. As of September 30, 2015, the OCC completed 97 percent of national bank and federal 

savings association applications and notices within the required time frame, above the target of 

95 percent. The OCC will continue to meet its Charter Program goals by providing staff 

training, coordination between charter and supervisory staff on safety and soundness and 

compliance matters, issuance of updated procedures, and maintaining an emphasis on 

accessibility and early consultation with national bank and federal savings association organizers 

and others proposing national bank and federal savings association structure changes.

3.1.3 – Charter Budget and Performance Plan

Dollars in Thousands

Charter Budget Activity

Resource Level FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $24,434 $27,043 $27,338 $30,486 $19,262 $18,922 $21,532 $21,963

Budget Activity Total $24,434 $27,043 $27,338 $30,486 $19,262 $18,922 $21,532 $21,963

Measure FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2015 FY 2016 FY 2017

Actual Actual Actual Actual Actual Actual Target Target Target

Percentage of 

Licensing Applications 

and Notices 

Completed within 

Established 

Timeframes

N/A N/A 98.0 97.0 98.0 97.0 95.0 95.0 95.0

Key: DISC - Discontinued
OCC - 21

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The OCC’s IT strategic plan aligns information technology initiatives and investments to the 

OCC’s core mission, including the development of new or enhanced applications and services 

and the disposition of redundant or “end-of-lifecycle” applications, capabilities, and services. 

The IT strategic plan is implemented through the budget formulation and the Capital Planning 

and Investment Control processes. These processes ensure that all IT investments are aligned 

with the OCC’s mission, goals, objectives, and target enterprise architecture before a project is 

funded. The capital planning process reviews and prioritizes detailed business cases to promote 

technology reuse, to capitalize on enterprise opportunities, and to reduce redundant and obsolete 

capabilities and services. Invest, evaluate, and control ensures that the OCC IT strategy has 

adequate funding and staff resources to address IT investment priorities, and considers risk 

mitigation strategies for IT investments that are not meeting stated cost, time, and performance 

goals. Performance metrics are linked to the delivery, alignment, and achievement of the OCC’s 

strategic program objectives. Cost effectiveness for each investment is evaluated through regular 

benchmarking studies, featuring peer group organizations. Key metrics used to evaluate 

infrastructure include availability, reliability, utilization, defects, and customer satisfaction.

FY 2016 and 2017 Plans 

The OCC has 3 major IT initiatives in FY 2016 and 2017: 

Servers Support Services (SSS) - The SSS supports the OCC’s server Operations and 

Maintenance. The infrastructure staff continues to build out additional capacity at the colocation facility to support the server technology refresh, business resiliency, and increases in 

enterprise storage capacity. In addition, a managed disaster recovery services contract will be 

initiated to implement a proven, highly reliable, secure, expandable, and cost-effective disaster 

recovery solution for OCC’s critical business systems.

Telecommunications Services and Support (TSS) - TSS includes telecommunications wide area 

network and local area network infrastructure. Remote access to the OCC systems is facilitated 

via a virtual private network, dial-in, and cellular wireless access using two-factor authentication. 

This also includes messaging services supporting highly mobile bank examiners and the OCC 

staff. In FY 2016, the OCC will continue an on-going effort to upgrade the headquarters and 

field office phone systems and telecom infrastructure including Local Area Network/Wide Area 

Network hardware, Video Tele-Conferencing and Voice Over Internet Protocol.

End User Services and Support (EUSS) - The EUSS includes help desk/customer service 

support, personal computer hardware and software operations and maintenance, asset 

management, and desktop engineering and image management. New computers and peripherals 

will be deployed to a portion of the workforce in FY 2016. In FY 2016, the OCC will also 

refresh hand-held devices.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded 

at: http://www.treasury.gov/about/budget-performance/Pages/summary-of-capitalinvestments.aspx. This website also contains a digital copy of this document.

International Programs

The Department of the Treasury’s FY 2017 budget request for International Programs is included 

in the State, Foreign Operations, and Other Related Programs Appropriation.