Financial Management Service 

Mission Statement 

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

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

accounting and reporting services, and manage the collection of delinquent debt. 

Program Summary by Budget Activity 

Dollars in Thousands 

Appropriation FY 2007 FY 2008 FY 2009

Financial Management Service Enacted Enacted Request $ Change % Change 

Payments $148,408 $145,977 $147,445 $1,468 1.01%

Collections 17,434 19,804 21,481 1,677 8.47%

Debt Collection 5,029 0 0 0 0.00%

Government wide Accounting and 

Reporting 64,510 68,642 70,418 1,776 2.59%

Total Appropriated Resources $235,381 $234,423 $239,344 $4,921 2.10%

Total FTE 1,761 1,692 1,500 (192) -11.35%

FY 2009 Priorities 

• Provide federal payments timely and accurately and continue to move toward an allelectronic Treasury for payments. 

• Provide timely collection of federal government receipts, at the lowest cost, and 

continue to move toward an all-electronic Treasury. 

• Maximize collection of government delinquent debt by providing efficient and 

effective centralized debt collection services. 

• Issue accurate, accessible, and timely financial reports and improve the compilation 

process and audit opinion on the Financial Report of the U.S. Government.
Table of Contents 

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

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

1B – Program History and Future Outlook..................................................................... 2 

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.......................................................................................... 8 

2.3 – Appropriations Detail Table .................................................................................. 9 

2B – Appropriations Language and Explanation of Changes......................................... 9 

2C – Permanent, Indefinite Appropriations.................................................................... 9 

2.4 – Permanent, Indefinite Appropriations.................................................................. 11 

2C – Legislative Proposals ........................................................................................... 11 

Section 3 – Budget and Performance Plan............................................... 12

3.1 – Budget by Strategic Outcome .............................................................................. 12 

3A – Payments.............................................................................................................. 12 

3.2.1 – Payments Budget and Performance Plan.......................................................... 14 

3B – Collections............................................................................................................ 15 

3.2.2 – Collections Budget and Performance Plan ....................................................... 16 

3C – Debt Collection ................................................................................................... 17 

3.2.3 – Debt Collection Budget and Performance Plan ................................................ 18 

3D – Government wide Accounting and Reporting ..................................................... 18 

3.2.4 – Government wide Accounting and Reporting Budget and Performance Plan . 20 

Section 4 – Supporting Materials.............................................................. 21

4A – Human Capital Strategy Description ................................................................... 21 

4.1 – Summary of IT Resources Table ......................................................................... 23 

4.1 – Summary of IT Resources Table (continued)...................................................... 24 

4B – Information Technology Strategy ........................................................................ 25 

4.2 – PART Evaluation Table....................................................................................... 26 
Section 1 – Purpose

1A – Description of Bureau Vision and Priorities 

The Financial Management Service (FMS) plays a key role in supporting the Department 

of the Treasury’s strategic goal of managing the United States Government’s finances 

effectively by operating as the financial manager and principal fiscal agent for the federal 

government. This role includes managing the nation’s finances by collecting money due 

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

Three FMS programs – payments, collections and cash forecasting – are part of the 

nation’s Financial Critical Infrastructure which requires these activities to be fully 

operational at all times. 

FMS’ Strategic Goals, as reflected in the FY 2009 priorities, are to: 

• Provide federal payments timely and accurately, and move toward an all-electronic 

Treasury for payments. 

• Provide timely collection of federal government receipts, at the lowest cost, through 

an all-electronic Treasury. 

• Maximize collection of government delinquent debt by providing efficient and 

effective centralized debt collection services. 

• Produce accurate, accessible, and timely government-wide financial information and 

reports which contribute to improved quality of the nation's financial decision 

making. 

• Facilitate the achievement of a clean audit opinion on the Financial Report of the U.S. 

Government through FMS’ internal operations and support to government agencies. 

FMS provides critical services to millions of United States taxpayers and other 

customers. It embodies Treasury’s leadership strategy to create value for the American 

people, provide responsible and effective stewardship over the government’s finances, 

and focus on quality service results and innovation. The breadth, scope and impact of 

FMS programs on the economy and the American public are enormous. FMS’ activities 

touch millions of American citizens, virtually every Federal Program Agency (FPA) and 

state governments across the country, as well as having international reach. 

As the government’s financial manager, FMS oversees a daily cash flow in excess of $60 

billion, disbursing 85 percent of the federal government’s payments. These payments 

include income tax refunds, Social Security benefits, veterans’ benefits and other federal 

payments to individuals and businesses. FMS also administers the world’s largest 

collection system, collecting over $3.0 trillion in FY 2007. FMS provides cash 

management guidance to FPAs, maintains the government’s accounting books, and 

compiles and publishes government-wide financial information used to monitor the 

FMS - 1
government’s financial status. Finally, FMS serves as the government’s central debt 

collection agency for delinquent non-tax debt. 

1B – Program History and Future Outlook 

The Payments program develops and implements federal payment policy and procedures, 

issues and distributes payments, promotes the use of electronics in the payment process, 

and assists agencies in converting payments from paper checks to Electronic Funds 

Transfer (EFT). This includes controlling and providing financial integrity to the 

payments process through reconciliation, accounting, and claims activities. It also 

includes special payments such as Federal Emergency Management Agency payments 

and the recent telephone excise tax refund. In FY 2007, FMS issued over 981 million 

non-Defense payments worth $1.6 trillion to a wide variety of recipients, such as those 

who receive Social Security benefits, IRS tax refunds and veterans’ benefits. Seventyeight percent of all payments disbursed were issued via direct deposit 

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

technology is integral in processing payments accurately, timely, and more safely and 

securely for the taxpayer. In FY 2009, FMS will continue to expand the use of electronic 

media to deliver federal payments. Electronic media provides a safer, more secure and 

reliable method of payment for recipients. It also decreases the number of paper checks 

issued, which minimizes costs and inefficiencies associated with the delivery of nonelectronic benefits. 

The Collections program collects revenues needed to operate the federal government 

through the effective management of the government’s collections infrastructure. In FY 

2007, FMS collected $3.1 trillion through a network of more than 9,000 financial 

institutions, of which 79 percent were done electronically. Dollar revenues collected in 

FY 2007 exceeded those collected in FY 2006 by six percent. The most important 

program that supports electronic collections is the Electronic Federal Tax Payment 

System (EFTPS). EFTPS is a tax payment system that offers all businesses and 

individuals the convenience of making their federal tax payments electronically 24 hours 

a day, seven days a week. 

In FY 2009, FMS will continue to expand the use of electronic collection mechanisms

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

accommodate the varying needs and technical sophistication of all taxpayers and FPAs. 

In addition, FMS will work to streamline, modernize and improve the processes and 

systems supporting Treasury’s collections and cash management program. Currently, 

collection agents report collections information to many FPAs and multiple U.S. 

Treasury systems. To collect this information, the FPAs and U.S. Treasury systems 

interface with many different sources using a variety of formats and interface 

technologies. FMS is developing a system which will provide a single touch point for 

information reporting and retrieval via transaction brokering, data warehousing, and 

business intelligence. The single touch point will enable the standardization and 

consolidation of collections information and eliminate redundancies in the federal 

FMS - 2
government’s collections reporting processes. FMS will also continue to focus on 

security oversight efforts at financial agent processing facilities and banking institutions 

as a way to proactively identify security control weaknesses and detect and deter fraud, 

waste, theft and unauthorized access associated with the collection of government 

remittances and protection of sensitive information. 

The Debt Collection program recovers delinquent government and child support debt by 

providing centralized debt collection, oversight, and operational services to FPAs and 

states as required by the Debt Collection Improvement Act (DCIA) of 1996 and related 

legislation. 

In FY 2007, FMS collected a record $3.76 billion in delinquent debt. Debt referrals from

creditor agencies were at 100 percent of eligible debt at the end of FY 2007. As a result 

of FMS’ continued program improvements, total collections since the enactment of the 

DCIA in 1996 are over $31.7 billion. By FY 2009, FMS’ Integrated FedDebt system will 

have combined FMS’ Cross-Servicing program and the Treasury Offset Program (TOP) 

into one system. This reduces redundancies, improves data integrity, and provides 

agencies direct online access. FMS will also continue to roll out Debt Check, an online 

program used to help agencies bar delinquent debtors from obtaining new loans or loan 

guarantees. In addition, a Federal Contractor Tax Compliance Task Force subgroup 

consisting of the FMS, the IRS, and the Center for Medicare and Medicaid Services 

(CMS) is examining how best to incorporate CMS payments to Medicare providers into 

the Federal Payment Levy Program. 

The Government-wide Accounting and Reporting program maintains the federal 

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

overseeing the government’s central accounting and reporting system. For FY 2007, 

FMS released the Financial Report of the United States Government (FR) 75 days after 

the fiscal year-end for the fourth consecutive year. The FR presents a picture of 

government-wide finances that complements the traditional federal government budget 

information. It is invaluable when assessing the long-term impact of the government’s 

policy decisions and the timely availability of this additional information is critical to a 

fully informed budget process. To complement and support the accelerated release of the 

FR, Treasury continues to release the Monthly Treasury Statement (the monthly public 

source of budgetary results) on the eighth workday of each month. With this release 

schedule, agency financial managers are better able to verify and use the data in their own 

reports. 

In FY 2009, FMS will continue to revamp and implement government-wide accounting

processes to provide more useful and reliable financial information on a regular basis. 

FMS has two major initiatives which will modernize long standing federal accounting 

processes and provide agencies with methodologies and tools to improve the accuracy 

and consistency of their financial data. 

FMS is building and implementing a system that replaces existing government-wide 

accounting functions and processes that vastly improves the exchange of financial 

FMS - 3
information among FMS, FPAs, Office of Management and Budget (OMB) and the 

banking community. This system will improve the reliability, usefulness, and timeliness 

of the government’s financial information, provide agencies and other users with better 

access to that information, and will eliminate duplicate reporting and reconciliation 

burdens by agencies, resulting in significant government-wide savings. As part of the 

system redesign, FMS provides agencies with a web-based account statement resembling 

a bank statement, which contains summarized Treasury fund account balance activity. 

Once fully implemented, agencies will have daily direct access through a web-based 

system to the data supporting the items on the account statement for reconciliation and

fund reclassification, rather than having to use multiple systems. Fund balance 

information will be available to agencies on a near real-time (one-day lag) basis. This

will move the government one step closer to achieving its objective of producing 

financial information on a regular, recurring basis more quickly and reliably. In FY 

2009, FMS will be working with FPAs to report payment, collection and intragovernmental payment and collection transactions to the new Government-wide 

Accounting System. 

In FY 2009, FMS will also continue moving forward on the Financial Information and 

Reporting Standardization (FIRST) initiative. This initiative integrates budget and 

financial reports from FPAs. FIRST will improve the consistency of the budgetary and 

proprietary accounting data recorded in agency financial statements and reported to FMS 

through its trial balance. FIRST is designed to provide authoritative information, 

contained in Treasury’s central accounting system, to the agencies to facilitate the 

reconciliation process for specific intra-governmental transactions. 

FMS - 4
Section 2 – Budget Adjustments and Appropriation Language 

2.1 – Budget Adjustments Table 

Dollars in Thousands

Financial Management Service FTE Amount

FY 2008 Enacted 1,692 $234,423

Base Realignment:

 FTE Adjustment (192)

Maintaining Current Levels (MCLs):

 Non-Pay Inflation Adjustment 553

 Pay Annualization 1,080

 Pay Inflation Adjustment 3,288

Total FY 2009 Base 1,500 $239,344

Program Decreases:

 Government-Wide Accounting & Reporting Modernization Program (326)

Payments Operations (172)

 Accounting Architecture (460)

Program Reinvestment:

 Financial Information Reporting Standardization (FIRST) 958

Subtotal FY 2009 Program Changes 0 0

Total FY 2009 President's Budget Request 1,500 $239,344

2A – Budget Increases and Decreases Description 

Base Realignment ......................................................................................+$0 / -192 FTE 

FTE Adjustment +$0 / -192 FTE 

FMS identified 192 unfunded base FTE upon review of its FY 2008 proposed financial 

plan, which is reflected by this adjustment. 

Maintaining Current Levels (MCLs) ...........................................+$4,921,000 / +0 FTE 

Non-Pay Inflation Adjustment +$553,000 / +0 FTE 

Funds are requested for other non-labor related items such as contracts, travel, supplies, 

equipment and GSA rent. 

Pay Annualization +$1,080,000 / +0 FTE 

Funds are requested for the FY 2009 cost of the January 2008 pay raise. 

Pay Inflation Adjustment +$3,288,000 / +0 FTE 

Funds are requested for the FY 2009 pay raise. 

Program Decreases ............................................................................-$958,000 / +0 FTE 

Government-Wide Accounting & Reporting Modernization Program -$326,000 / +0 FTE 

As a result of efficiencies gained through modernization and a decreased requirement for 

contractor support for legacy applications and the certification and accreditation process, 

funding can be redirected from the Government-wide Accounting and Reporting budget 

activity to cover a portion of the Financial Information Reporting Standardization 

(FIRST) initiatives. 

FMS - 5
Payments Operations -$172,000 / +0 FTE 

As a result of improvements in the payments activity (e.g. presort equipment), FMS can 

redirect this funding to the Financial Information Reporting Standardization initiative. 

Accounting Architecture -$460,000 / +0 FTE 

Funding has been identified in Government-wide Accounting and Reporting from prior 

years Accounting Architecture initiative. These funds can be redirected to the Financial 

Information Reporting Standardization initiative. 

Program Reinvestment .....................................................................+$958,000 / +0 FTE 

Financial Information Reporting Standardization (FIRST) +$958,000 / +0 FTE 

FMS is requesting an increase of $958,000 to the current base of $2,393,000 for FIRST. 

This initiative will be fully funded by redirects from savings generated from the GWA 

program, Payments Operations and Accounting Architecture. 

FIRST integrates budgetary and proprietary financial data from FPAs. Currently, 

budgetary and proprietary accounting data are collected separately in four different 

systems. FIRST will improve the consistency of agency financial information, which is 

reported in agency financial statements and submitted to FMS through agency accounting 

trial balances. This investment will move FMS closer to achieving its strategic goal of

producing accurate, accessible and timely government-wide financial information and 

reports that contribute to improved quality of the nation's financial decision making. 

FIRST will accomplish this by: 

• Automating the maintenance and distribution of the United States Standard General 

Ledger (USSGL) accounting rules and guidance through an interactive database on 

the internet, making it more accurate and consistent, easier to maintain, and easier to 

use. 

• Combining four current FMS stovepipe accounting data collection systems into one 

quarterly submission. 

• Improving the accuracy, consistency and timeliness of agency reporting by validating 

the agency data and balances against authoritative balances in FMS’ central

accounting system. 

• Realizing the full benefit of the United States Standard General Ledger (USSGL) in 

the financial accounting and reporting for the U.S. Government. 

Consistent reporting is required for central managers to make sound decisions, and is 

crucial to attaining FMS' strategic goal of facilitating the achievement of a clean audit 

opinion on the Financial Report of the United States Government (FR). This initiative 

provides a systemic solution to improve data accuracy and consistency for all 

government-wide accounting and reporting operations. FIRST will address two material 

weaknesses of the FR: (1) the Accounting for and Reconciliation of Intragovernmental 

Activity and Balances; and (2) the Preparation of Consolidated Financial Statements. 

The applications that FIRST is replacing are not compliant with the FMS technical 

reference model. The additional resources will be used to develop the Accounting Trial 

FMS - 6
Balance (ATB) system and its interfaces to Standards and Guidance of the USSGL 

Interactive Database (SID) and Government-wide Financial Reporting System (GFRS) 

by the end of FY 2011. There will also be efficiencies realized in having only one 

application on one platform to maintain. In addition, government-wide agency savings, 

conservatively estimated at $31 million annually, will be realized when FIRST is fully 

implemented. If FMS does not build FIRST, the four current reporting systems will need 

to be upgraded to comply with FMS' enterprise architecture at significant cost without 

improving functionality. 

FMS - 7
 2.2 – Operating Levels Table 

Dollars in Thousands

Bureau: Financial Management Service

FY 2007 Enacted

FY 2008 

President's 

Budget

Cong. Action 

including 

Rescission

FY 2008 Enacted 

Level

FY 2009 

Requested Level

FTE 1,761 1,692 1,692 1,500

Object Classification:

 11.1 - Full-time permanent 118,323 118,955 0 118,955 124,208

 11.3 - Other than full-time permanent 1,500 1,500 0 1,500 1,500

 11.5 - Other personnel compensation 2,500 3,000 0 3,000 3,000

 11.8 - Special personal services payments 0 0 0 0 0

 12 - Personnel benefits 26,172 26,200 0 26,200 29,888

 13 - Benefits for former personnel 175 175 0 175 175

 21 - Travel and transportation of persons 1,553 1,603 0 1,603 1,503

 22 - Transportation of things 195 195 0 195 195

 23 - Rent, Communications and Utilities 0 0 0 0 0

 23.1 - Rental payments to GSA 14,950 13,500 0 13,500 13,500

 23.2 - Rental payments to others 365 365 0 365 670

 23.3 - Comm, utilities, and misc charges 12,658 12,569 0 12,569 11,413

 24 - Printing and reproduction 700 500 0 500 500

 25 - Other contractual Services 0 0 0 0 0

 25.1 - Advisory and assistance services 4,750 4,800 0 4,800 6,002

 25.2 - Other services 22,157 22,081 0 22,081 19,035

 25.3 - Other purchases of goods and services from Govt.

accounts 

6,009 7,037 (768) 6,269 6,000

 25.4 - Operation and maintenance of facilities 950 1,000 0 1,000 500

 25.5 - Research and development contracts 0 0 0 0 0

 25.6 - Medical care 0 0 0 0 0

 25.7 - Operation and maintenance of equip 7,500 7,500 0 7,500 8,005

 25.8 - Subsistence and support of persons 0 0 0 0 0

 26 - Supplies and materials 4,250 4,300 0 4,300 3,600

 31 - Equipment 10,149 9,386 0 9,386 9,100

 32 - Land and structures 475 475 0 475 500

 33 - Investments and loans 0 0 0 0 0

 41 - Grants, subsidies, and contributions 0 0 0 0 0

 42 - Insurance claims and indemnities 50 50 0 50 50

 43 - Interest and dividends 0 0 0 0 0

 44 - Refunds 0 0 0 0 0

Total Budget Authority $235,381 $235,191 $(768) $234,423 $239,344

Budget Activities:

 Payments 148,408 146,465 (488) 145,977 147,445

 Collections 17,434 19,869 (65) 19,804 21,481

 Debt Collection 5,029 0 0 0 0

 Government wide Accounting and Reporting 64,510 68,857 (215) 68,642 70,418

Total Budget Authority $235,381 $235,191 $(768) $234,423 $239,344

FMS - 8
2.3 – Appropriations Detail Table 

Dollars in Thousands

2B – Appropriations Language and Explanation of Changes 

Appropriations Language Explanation of Changes

DEPARTMENT OF THE TREASURY 

FINANCIAL MANAGEMENT SERVICE 

Federal Funds 

SALARIES AND EXPENSES: 

For necessary expenses of the Financial Management 

Service, [$234,423,000] $239,344,000 of which not to 

exceed $9,220,000 shall remain available until September 

30, [2010] 2011, for information systems modernization 

initiatives, of which not to exceed $2,500 shall be available 

for official reception and representation expenses.

 [Department of the Treasury Appropriations Act, 2008]

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 United States Code (U.S.C.) 391. 

The FRBs support the fiscal operations and provide banking and financial services on 

behalf of the Treasury of the United States. The Federal Reserve Reimbursement and 

Fiscal Responsibility Act of 1997 amended section 3302 (f) of title 31, U.S.C. and 

provided a permanent and indefinite appropriation of amounts necessary to pay the FRBs 

 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

New Appropriated Resources:

Payments 924 $147,055 1,173 $148,408 1,112 $145,977 963 $147,445 -13.42% 1.01%

Collections 147 19,649 113 $17,434 137 $19,804 135 $21,481 -1.39% 8.47%

Debt Collection 0 0 56 $5,029 0 $0 0 $0 0.00% 0.00%

Gov. Accounting and Reporting 412 64,954 419 $64,510 443 $68,642 402 $70,418 -9.21% 2.59%

Subtotal New Appropriated Resources 1,483 $231,658 1,761 $235,381 1,692 $234,423 1,500 $239,344 -11.35% 2.10%

Other Resources:

Recoveries

Offsetting Collections - Reimbursable 408 201,445 370 196,282 428 215,179 441 228,010 3.04% 5.96%

Available multi-year/no-year funds

Transfers In/Out

Subtotal Other Resources 408 $201,445 370 $196,282 428 $215,179 441 $228,010 3.04% 5.96%

Total Resources Available for Obligation 1,891 $433,103 2,131 $431,663 2,120 $449,602 1,941 $467,354 -8.44% 3.95%

FY 2008

% Change

Resources Available for Obligation

FY 2007 FY 2007 FY 2008 FY 2009

Obligations Enacted Enacted Request to FY 2009

FMS - 9 
for the services they provide as fiscal agents on behalf of the Treasury. Since the FRBs 

support each FMS program activity, the performance measures listed in the Salaries and 

Expense section of this budget apply to the work done by the FRBs. FMS estimates that 

the cost of FRB services for FY 2009 will be approximately $305 million.

Financial Agent Services Permanent, Indefinite Appropriation

broad discretion to

l Tax

e services

MS estimates that the cost of FA services for FY 2009 will be approximately $593 

o

.

e

he

red for 

 to 

entity 

Congress has given the Secretary of the Treasury longstanding,

deposit money in financial institutions and to obtain banking services by designating

financial institutions to act/serve as Financial Agents (FA) of the United States 

Government. The services are in support of such programs as Electronic Federa

Payment System (EFTPS), the Lockbox Networks, plastic cards, e-commerce systems,

and CA$HLINKII, a deposit reporting and cash concentration system. These and other

programs are vital to FMS strategic goals, the government’s financial critical 

infrastructure, and the President’s emphasis on expanding E-Government. Th

provided by such financial institutions 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. 

F

million. Of this amount, approximately $40 million is appropriated to other bureaus t

pay for these services, which is reimbursed to FMS and deposited into the General Fund

The increase in the estimate from prior years is a direct result of the significant increase 

in volume, complexity, and transactions processed for “identity programs,” such as 

passport and immigration fee collections. For example, as a result of the Intelligenc

Reform and Terrorism Prevention Act of 2004, which requires a passport for entry to t

United States via air and ship from Canada, the Caribbean, and Mexico, the financial 

agents have seen the volume of passport applications nearly double. They have had to

hire hundreds of new employees to manage the workload, open additional processing 

locations, implement 24 hours a day, seven days a week processing, and invest in 

additional sorting, extraction, imaging, and document management hardware and 

software. Passport applications are expected to rise again once passports are requi

land border crossings from Mexico and Canada, beginning in FY 2008, and after the 

State Department begins to offer the option for a wallet sized passport card in addition

the traditional passport. None of the offsetting passport fees are deposited into this fund.

Other identity programs administered by U.S. Citizenship and Immigration Services will 

lead to additional increases in transaction volume processed by financial agents, and even

greater increases in volume if immigration reform legislation is passed. Given the 

complexity, requirements, and volumes for processing fees under these and other id

programs, outlays for this fund may increase by 50 percent over recent historical rates. 

FMS - 10 
2.4 – Permanent, Indefinite Appropriations 

2007 2008 FY 2009

Enacted Enacted Request

Federal Reserve Bank $245,000 $295,000 $305,000

Financial Agent Services $311,000 $426,000 $593,000

Table 2.4

Permanent, Indefinite Appropriations

(Dollars in Thousands)

Permanent, Indefinite Appropriation

2C – Legislative Proposals 

Eliminate the 10-year Limitations Period on Offset (31 U.S.C. 3716) 

This proposal would eliminate the 10-year limitation on the collection of delinquent nontax federal debts by administrative offset. This would ensure that delinquent debts can be 

collected by offset without regard to any statutory, regulatory or administrative limitation 

on the period within which debts may be collected. The proposed change would allow 

for the collection by offset of other federal debts consistent with the current law for 

student loans. 

The proposal would be consistent with the Supreme Court’s decision to allow the 

Department of Education to offset social security benefits to collect student loans over 10 

years old. 

Payment Transaction Integrity - Allows the federal government to trace and recover 

federal payments sent electronically to the wrong account. 

The proposal, which amends 12 U.S.C. 3413, revises an existing exception to the Right to 

Financial Privacy Act so that improper electronic payments and improperly negotiated 

Treasury checks can be traced and recovered. Revising the exception will also permit the 

federal government to verify the identities of persons making payments to or receiving 

payments from the government. 

FMS - 11 
Section 3 – Budget and Performance Plan

This table lists all FY 2009 resources by strategic goal, objective and outcome outlined in 

the FY 2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan is a 

corporate level plan for the Department that provides a description of what the agency 

intends to accomplish over the next five years. 

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

http://www.treas.gov/offices/management/budget/strategic-plan/

3.1 – Budget by Strategic Outcome 

Dollars in Thousands

TREASURY Strategic Outcome FY 2008 FY 2009 Percent

Enacted Request Change

AMOUNT AMOUNT AMOUNT 

 Financial information 68,642 73,597 7.5%

 Payments 283,826 286,029 1.2%

 Revenue collected 97,134 107,728 9.5%

Total $449,602 $467,354 3.9%

3A – Payments ($147,445,000 from direct appropriations and $138,584,000 from 

reimbursable programs): The Payments activity issues and distributes payments, 

develops and implements federal payment policy and procedures, promotes the use of 

electronics in the payment process, and assists agencies in converting payments from

paper checks to Electronic Funds Transfer (EFT). This activity also includes controlling 

and providing financial integrity to the payments process through reconciliation, 

accounting and claims activities. Included in this activity is the claims activity which 

settles claims against the United States. These claims result from federal government 

checks that have been forged, lost, stolen or destroyed. FMS collects monies from those 

parties liable for fraudulent or otherwise improper negotiation of government checks. It 

also includes processing claims and reclamations for EFT payments. 

FMS continues to expand and market the use of electronic media to deliver federal 

payments, improve service to payment recipients, and reduce government program costs. 

This helps decrease the number of paper checks issued and minimize costs associated 

with postage, the re-issuance of lost, stolen and misplaced checks, and inefficiencies 

associated with the non-electronic delivery of benefits. 

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

protects against fraud and identity theft. Direct deposit also generates significant cost 

savings to the government over paper checks - each payment converted from paper to 

direct deposit saves the taxpayer over 88 cents per transaction. However, FMS faces 

challenges in increasing growth in electronic payments. As the government prepares for 

the huge increase in retiring baby boomers in the near future, it is critical that FMS 

dramatically increase use of direct deposit for issuing benefit payments. To increase the 

use of direct deposit for federal benefit payments, FMS began a nationwide campaign 

FMS - 12 
called “Go Direct” to encourage current check recipients to switch to direct deposit. In 

the first year, Go Direct exceeded the goal to convert approximately half a million check 

recipients to direct deposit, savings millions of dollars for the United States Treasury in 

the years to come. In December 2007, the Go Direct campaign achieved a major 

milestone, converting 1.6 million check recipients to direct deposit, since the inception of 

the campaign. 

Additionally, in FY 2007, FMS implemented a pilot program, Direct Express, which 

targeted the un-banked, to disburse benefit payments through debit cards. A survey of 

the Direct Express cardholders in July 2007 showed that 85 percent of those surveyed are 

satisfied with Direct Express, and four out of five people report that they would 

recommend the card. After conducting an evaluation of the pilot, FMS expects to roll out 

this debit card program nationwide and extend it to other benefit payments in the summer 

of 2008. Debit cards represent another electronic payment alternative to checks and one 

that holds promise for the unbanked. FMS is also working with the Social Security 

Administration to develop plans (entitled Universal Direct Deposit) which will require

newly enrolled beneficiaries to receive payments electronically unless they do not have a 

bank account. 

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

modernize its payment systems, incorporating new technologies and the internet. Some

programs that will continue to be in focus are: 

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

encrypted computer chip to process "electronic money" stored on the card. This 

program is aimed at reducing the float-loss associated with the more than $2 billion in

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

government locations around the world. From 1997 to September 2007, over 8 

million EFT transactions with a dollar value in excess of $1.3 billion were processed 

via the SVC programs. 

• Automated Standard Application for Payments (ASAP.gov): ASAP is a web-based 

system built by FMS in coordination with the Federal Reserve Bank of Richmond. 

Through this all electronic grants payment system, organizations including states, 

universities, for-profit and non-profit entities receive federal funds from accounts preauthorized by federal agencies. ASAP is one of two systems authorized by the Chief 

Financial Officer’s Council to disburse civilian grant payments on behalf of program

agencies. Twenty-five federal agencies use ASAP.gov and the total FY 2007 

disbursements to organizations were $447 billion. 

• Internet Payment Platform (IPP): The IPP will provide a centralized electronic 

invoicing and payment information portal accessible to all participants in federal 

payment transactions: agencies, payment recipients, and FMS. The use of IPP lowers 

costs for FMS and federal agencies by converting paper-based financial management 

activities, such as purchase orders and invoices, into automated online processes. It 

also provides a single central repository that allows suppliers access to the data they 

FMS - 13 
need to handle many inquiries on their own and avoid numerous disputes. The IPP is 

designed to yield government-wide efficiencies by (1) reducing paper processing by 

accounts payable, (2) enhancing Treasury’s value and service to its citizens by 

increasing access to and quality of payment data, and (3) providing a single central 

application in which government finance departments can engage with their suppliers, 

and in which government suppliers can engage with agencies. 

Other Resources:

Offsetting collections and reimbursements totaling $138,584,000 are collected for 

disbursement of federal agency payments to beneficiaries, including Social Security 

payments, Railroad Retirement Board payments, tax refunds and the Department of 

Veterans Affairs benefit payments. 

3.2.1 – Payments Budget and Performance Plan 

Payments Budget Activity

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Enacted Request

 Appropriated Resources $135,872 $142,979 $147,055 $145,977 $147,445

 Reimbursable Resources $129,264 $134,400 $132,712 $137,849 $138,584

Total Resources $265,136 $277,379 $279,767 $283,826 $286,029

Budget Activity Total $265,136 $277,379 $279,797 $283,826 $286,029

Payments Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

 Actual Actual Actual Target Target

Number of check payments (Millions) (Ot) 228 219 215 208 204

Number of electronic payments (Millions) 

(Ot) 

725 745 767 787 809

Unit cost for Federal Government payments 

($) (E) 

$.35 $.37 $.39 $.40 $.40

Percentage of Treasury Payments and 

associated information made electronically

(%) (Oe) 

 76.00% 77.00% 78.00% 79.00% 80.00%

Percentage of paper check and Electronic 

Funds Transfer (EFT) payments made 

accurately and on time (%) (Oe) 

 100.00% 100.00% 100.00% 100.00% 100.00%

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

Description of Performance: FMS disburses 85 percent of the federal government's

payments to a wide variety of recipients, such as those who receive Social Security 

Administration payments, Internal Revenue Service tax refunds, and the Department of 

Veterans Affairs benefits. In FY 2007 FMS issued over 981 million non-Defense 

payments, with a dollar value of approximately $1.6 trillion. Seventy-eight percent of 

these transactions were issued by Electronic Funds Transfer. In FY 2009, FMS is 

targeting the percentage of electronic payments to be 80 percent. 

FMS - 14 
3B – Collections ($21,481,000 from direct appropriations): The Collections activity 

collects revenues needed to operate the federal government through the management of 

the federal government’s collections infrastructure. FMS collected a record of $3.1 

trillion in FY 2007 through a network of more than 9,000 financial institutions. It also 

manages the collection of federal revenues such as individual and corporate income tax 

deposits, customs duties, loan repayments, fines and proceeds from leases. FMS 

establishes and implements collection policies, regulations, standards and procedures for 

the federal government. The majority of dollar collections are made electronically. In 

FY 2007, 79 percent of dollar collections were electronic. FMS has set its FY 2009 

target for the percentage collected electronically to be 80 percent. 

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

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

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

management program. This effort, Collections and Cash Management Modernization, 

will improve financial performance by enabling FMS and government agencies to more 

effectively manage financial transaction information and improve the efficiency of the 

collections information reporting processes. Additionally, it will improve timeliness by

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

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

Through the expanded use of web-based technologies, this effort supports the integration 

of financial and performance information government-wide by providing data on a daily 

basis. 

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

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

• Electronic Federal Tax Payment System (EFTPS): This is an accurate, secure and 

convenient way to pay all federal tax payments, including corporate, excise and 

employment taxes and 1040 quarterly estimated taxes via the internet or a telephone 

voice response system. EFTPS processes 95 percent of United States tax dollars and 

is required for businesses with annual federal tax obligations above $200,000. FMS 

is also working to communicate the benefits of EFTPS – accuracy, security, 

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

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

taxes electronically through EFTPS rather than by using paper Federal Tax Deposit 

coupons, which number close to 38 million. FMS will direct its EFTPS efforts to 

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

community and small businesses to further expand the use of EFTPS. Through 

September 30, 2007, more than 90 million payments were processed through EFTPS, 

which represents an 8.33 percent increase over FY 2006. 

• Pay.gov: Pay.gov is an innovative system that allows individuals and businesses to 

make non-tax payments to federal agencies over the internet. Pay.gov provides 

collections, form submittal, bill presentment, authentication and agency financial 

reporting services. Since inception, it has processed approximately 23.5 million 

FMS - 15 
transactions valued at over $86.6 billion. Pay.gov responds to the increasing 

demands of consumers and businesses for electronic alternatives by providing the 

opportunity to complete forms and applications, make payments, and submit queries 

online 24 hours a day, seven days a week. Pay.gov, which has been implemented 

with 102 federal agencies representing 317 cash flows, collected $37.9 billion in FY 

2007 and $29.5 billion in FY 2006. New development will focus on interfaces with 

new systems within the new Collections Business Line Enterprise Architecture. 

• Check Conversion and Truncation: This collections settlement service converts a 

paper check either into an image that is cleared through the banking system or into an 

EFT debit against the check writer’s bank account. In both cases, paper checks are 

digitized at the point of receipt and the transactions are cleared and settled 

electronically. This service is a key program in realizing FMS’ goal of increasing 

electronic collections and reducing collection costs. In FY 2007, more than 9.7 

million items received over the counter, representing more than $14 billion, were 

processed through check conversion or truncation. Additionally, through FY 2007 

more than 7.7 million items received through the mail at lockboxes, representing 

more than $6.4 billion, were similarly processed. By the end of FY 2009, it is FMS’

goal that all paper checks remitted to the federal government via lockboxes will be

converted or truncated and processed electronically. 

3.2.2 – Collections Budget and Performance Plan 

Collections Budget Activity

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Enacted Request

 Appropriated Resources $16,229 $18,291 $19,649 $19,804 $21,481

 Reimbursable Resources $0 $0 $0 $0 $0

Total Resources $16,229 $18,291 $19,649 $19,804 $21,481

Budget Activity Total $16,229 $18,291 $169,649 $19,804 $21,481

Collections Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

Unit cost to process a Federal revenue 

collection transaction ($) (E) 

$1.20 $1.10 $1.19 $1.30 $1.27

Percentage collected electronically of total

dollar amount of Federal government receipts

(%) (Oe) 

 79.00% 79.00% 79.00% 79.00% 80.00%

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

Description of Performance: In FY 2007, FMS collected a record $3.1 trillion through a 

network of more than 9,000 financial institutions. The majority of the dollar amounts of 

FMS collections were made electronically – 79 percent of the $3.1 trillion collected. 

However, approximately half of the transactions, 51.6 percent in FY 2007, are paper 

checks. In FY 2007, taxpayers paid more than $2.0 trillion using EFTPS, up 8.3 percent 

from FY 2006, and the number of payments to the government rose 8 percent, to 90 

million. FMS stepped up its efforts in FY 2007 to work with federal agencies to promote 

FMS - 16 
the use of electronics in the collections process and assists agencies in converting 

collections from paper to electronic media. 

3C – Debt Collection ($86,247,000 from reimbursable programs): The Debt Collection 

activity collects delinquent government and child support debt by providing centralized 

debt collection, oversight and operational services to Financial Program Agencies (FPAs) 

and states as required by the Debt Collection Improvement Act of 1996 and related 

legislation. The services include, but are not limited to, collecting delinquent debts 

through Cross-Servicing and offsetting federal payments, providing a database for use as 

a tool for barring delinquent debtors, providing post-judgment collection, advising and 

educating agencies towards improving debt management, and referrals to the Department 

of Justice. 

By FY 2009, FMS will collect delinquent debt through FedDebt, a comprehensive system

that integrated FMS’ previous collection tools: Cross-Servicing and the Treasury Offset 

Program (TOP). The TOP FedDebt function compares the names and Taxpayer 

Identifying Numbers (TINs) of debtors with the names and TINs of recipients of federal 

payments. If there is a match, the federal payment is reduced, or “offset,” to satisfy the 

overdue debt. Cross-Servicing activities include applications for various collection tools 

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

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

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

agencies. 

FedDebt, which integrates the payment offset and cross-servicing applications, provides 

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

will employ a common file format for submitting Cross-Servicing or TOP debts. 

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

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

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

customers and service partners. FMS will continue developing FedDebt by implementing 

a service-oriented architecture. 

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

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

tax debt owed by contractors and vendors. FMS is working with the Center for Medicare 

and Medicaid Services (CMS) and IRS to determine the most efficient approach for 

bringing CMS medical debts into the levy and offset programs. In addition, 

enhancements of collection tools such as Administrative Wage Garnishment and Debt 

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

obtaining new loans or loan guarantees, will improve program performance. 

FMS - 17 
3.2.3 – Debt Collection Budget and Performance Plan 

Debt Collection Budget Activity

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Enacted Request

 Appropriated Resources $8,738 $5,393 $0 $0 $0

 Reimbursable Resources $29,793 $28,312 $67,611 $77,330 $86,247

Total Resources $38,531 $33,705 $67,611 $77,330 $86,247

Budget Activity Total $38,531 $33,705 $67,611 $77,330 $86,247

Debt Collection Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

Amount of delinquent debt collected per $1

spent ($) (E) 

$36.23 $39.97 $53.55 $40.00 $42.00

Amount of delinquent debt collected through 

all available tools (Billions $) (Ot)

$3.25 $3.34 $3.76 $3.40 $3.50

Percentage of delinquent debt referred to FMS 

for collection compared to amount eligible for 

referral (%) (Ot) 

 97.00% 95.00% 100.00% 95.00% 95.00%

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

Description of Performance: In FY 2007, FMS collected a record $3.76 billion in 

delinquent debt, which exceeded the FY 2007 target of $3.2 billion. This includes $1.7 

billion in past due child support, $1.47 billion in federal non-tax debt, and over $586 

million in federal tax levies and state tax debt offsets. Debt referrals from creditor 

agencies were at 100 percent of eligible debt at the end of FY 2007. As a result of the 

continued program improvements, collections have steadily increased to more than $31.7 

billion since the enactment of the Debt Collection Improvement Act of 1996. In calendar 

year 2007, the Internal Revenue Service referred an additional $32.2 billion of tax debts 

for continuous levy, a 14 percent increase from calendar year 2006 for the same period. 

3D – Government wide Accounting and Reporting ($70,418,000 from direct 

appropriations and $3,179,000 from reimbursable programs): The Government-wide 

Accounting and Reporting activity maintains the federal government’s books and 

accounts for its monetary assets and liabilities by operating and overseeing the 

government’s central accounting and reporting system. It also works with federal 

agencies to adopt uniform accounting and reporting standards and systems and provides 

support, guidance and training to assist FPAs in improving their government-wide 

accounting and reporting responsibilities. FMS gathers and publishes government-wide 

financial information which is used in establishing fiscal and debt management policies 

and is also used by the public and private sectors to monitor the government’s financial 

status. These publications include: the Daily Treasury Statement, the Monthly Treasury 

Statement, the Treasury Bulletin, the Combined Statement of the United States 

Government, and the Financial Report of the United States Government (FR). 

FMS is building and implementing a system to improve the exchange of financial 

information among FMS, FPAs, OMB and the banking community. Once completed, 

FMS - 18 
this project, the Government-wide Accounting (GWA) Modernization Project will 

comprehensively replace current government-wide accounting functions and processes 

that are both internal and external to FMS. In FY 2008 and FY 2009, FMS will be 

working with FPAs to roll-out the new GWA system for the reporting of payments, 

collections and intra-governmental collection and payment transactions. It will improve 

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

provide FPAs and other users with better access to that information, and will eliminate 

duplicate reporting and reconciliation burdens by agencies. In addition, FPAs will have 

better tools for reporting financial information and access to daily account statements for 

monitoring the status of their financial information at the Treasury Department. This 

initiative will result in significant savings throughout government as agencies will no 

longer have to prepare month-end reports classifying all of their disbursement and 

collection transactions or performing reconciliations on statements of differences 

associated with this month-end reporting. 

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

compilation process of Financial Report (FR) of the United States Government, 

including: 

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

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

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

other transactions that agencies report to the central accounting system. 

• Using the Chief Financial Officers (CFO) Council, Treasury Reporting Group as a 

forum to discuss these accounting and reporting issues that affect the FR. 

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

for intra-governmental transactions. 

• Encouraging greater auditor participation by requiring agency auditors to more 

closely scrutinize intra-governmental out-of-balance conditions with other agencies. 

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

opinion for the FR. 

In FY 2009, FMS will continue moving forward on the Financial Information and 

Reporting Standardization (FIRST) initiative. This initiative integrates budget and 

financial reports from FPAs. FIRST will improve the consistency of the budgetary and 

proprietary accounting data recorded in agency financial statements and reported to FMS 

through its trial balance. FIRST is designed to provide authoritative information, 

contained in Treasury’s central accounting system, to the agencies, to facilitate the 

reconciliation process for specific intra-governmental transactions. 

FMS - 19 
3.2.4 – Government wide Accounting and Reporting Budget and Performance Plan 

Government wide Accounting and Reporting 

Budget Activity

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Enacted Request

 Appropriated Resources $62,668 $67,338 $64,954 $68,642 $70,418

 Reimbursable Resources $0 $0 $1,122 $0 $3,179

Total Resources $62,668 $67,338 $66,076 $68,642 $73,597

Budget Activity Total $62,668 $67,338 $66,076 $68,857 $73,597

Government wide Accounting and 

Reporting Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

Unit Cost to Manage $1 Million Dollars of

Cash Flow 

Baseline $8.50 $10.36 $11.72 $13.39

Percentage of Government-wide accounting

reports issued accurately (%) (Oe) 

 100.00% 100.00% 100.00% 100.00% 100.00%

Percentage of Government-wide accounting

reports issued timely (%) (E) 

 100.00% 100.00% 100.00% 100.00% 100.00%

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

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

reports accurately and timely. For the fourth consecutive year, FMS released the 

Financial Report of the United States Government (FR) 75 days after the fiscal year-end. 

In FY 2006, Government Accountability Office (GAO) acknowledged and noted 

improvements with regard to consistency with agency information in the Balance Sheet, 

the Statement of Net Cost and Statement of Social Insurance and in the note disclosures 

that are directly linked to the amounts on these principal financial statements. 

 

For detailed information about each performance measure, including definition, 

verification and validation, please go to: 

http://www.treasury.gov/offices/management/dcfo/accountability-reports/2007-par.shtml

FMS - 20 
Section 4 – Supporting Materials 

4A – Human Capital Strategy Description 

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

priorities supporting the President’s Management Agenda, and Treasury’s strategic goal 

to manage the United States Government’s Finances Effectively. 

FMS is on the technology forefront in the performance of its mission. FMS has taken 

steps to improve the quality of its professional workforce. A Human Capital Strategic 

Plan has been developed to identify current structure weaknesses and build upon its 

strengths. Achieving the following objectives will support and strengthen its work force: 

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

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

and budgets. 

• Workforce Planning & Deployment: FMS is citizen-centered, delayered, missionfocused, and leverages E-Government and competitive sourcing. 

• Leadership & Knowledge Management: Leaders and managers effectively manage 

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

continuous improvement in performance. Succession strategies result in a diverse 

leadership talent pool that is continually updated. 

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

performance workforce, a performance management system and awards program that 

effectively differentiates between high and low performance. It holds employees 

accountable, links individual/team/unit performance to organizational goals and 

desired results. 

• Diversity: Under-representation is addressed, particularly in mission-critical 

occupations and leadership positions and processes are in place to sustain diversity. 

• Talent: FMS has significantly reduced mission-critical skills, knowledge and 

competency gaps. FMS is making significant progress and demonstrates continued 

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

model. 

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

planning and accountability system. 

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

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

talent. Delegated Examination and student intern program authorities are used 

extensively to attract talent from some of the best colleges and universities. 

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

skills to accomplish the mission. It continually manages the ongoing challenge of 

FMS - 21 
FMS - 22 

recruiting and retaining highly skilled individuals in critical areas, including Accountants 

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

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

management and assessment of FTE distribution. As vacancies occur, they are reviewed 

to determine whether the position should be back-filled, the FTE be redirected as 

appropriate, or the FTE be eliminated. This is how FMS counters the possibility of either 

a surplus or deficiency of staff in certain job occupations. 

Through FY 2010, 26 percent of FMS’ current employees are eligible for Optional 

Retirement and 43 percent are eligible for Discontinued Service or Early Retirement. 

Strategies are in place to close skill-gaps and fill staffing requirements in mission-critical 

occupations. This includes use of all pay incentives within budget constraints (e.g., 

Recruitment and Retention Incentives) and specialized employee development programs: 

SES Candidate Development, Project Management Certification, Management 

Preparatory Development, Federal Career Intern Program, Leadership, and Mentoring. 

Another strategy to manage staffing needs is use of contractors and/or outsourcing. FMS 

supplements its workforce with contractors in security, building maintenance, IT support 

and various finance functions provided by the Bureau of the Public Debt. Government 

collections are outsourced to financial institutions and Federal Reserve Banks who serve 

as financial and fiscal agents of the Treasury Department. 

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

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

supports programs and initiatives to recruit minority college students. The following 

programs have been established to ensure a diverse workforce: 

• SES candidate program was developed to create a diverse pipeline of future senior 

executives. 

• Special emphasis programs were expanded and Equal Employment Opportunity and 

diversity awareness training was instituted. 

• Hispanic recruitment was enhanced through the increased use of Hispanic 

Associations of Colleges and Universities interns, which created a pipeline for new 

Hispanic employees. 

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

Students program as well as the Department of Labor’s Workforce Recruitment Program 

for students with disabilities was increased. FMS continues to use the Federal Career 

Internship Program to facilitate and accelerate general hiring of qualified and talented 

minority student interns. 

FMS has a solid and viable Human Capital Strategy to fulfill its mission. 
4.1 – Summary of IT Resources Table 

Dollars in Thousands

Information Technology Investments

FY 2008 

Major IT Investments / Funding Source Budget Activity

FY 2006 & 

Earlier

Enacted

FY 2007 

Enacted

Likely 

Enacted

FY 2009 

Requested

Automated Standard Application for Payments (ASAP) Payments 8,739 2,245 -74.3% 2,235 -0.4% 2,422 8.4%

FMS S&E no FTE 689 69 -90.0% 88 27.5% 77 -12.5%FMS S&E FTE Costs 8,050 2,176 -73.0% 2,147 -1.3% 2,345 9.2%Multi-Year 0 0 N/A 0 N/A 0 N/A

Debt Management Accounting System (DMAS) Debt Collection 0 0 0.0% 0 0.0% 0 0.0%

FMS S&E no FTE 0 0 N/A 0 N/A 0 N/A

FMS S&E FTE Costs 0 0 N/A 0 N/A 0 N/AMulti-Year 0 0 N/A 0 N/A 0 N/A

Deposit and Data Management (DDM) Collections 730 1,156 0.0% 1,226 0.0% 1,276 4.1%

FMS S&E no FTE 0 0 N/A 0 N/A 0 N/A

FMS S&E FTE Costs 730 1,156 N/A 1,226 0.0% 1,276 4.1%

Multi-Year 0 0 N/A 0 N/A 0 N/A

FMS EFTPS (Electronic Federal Tax Payment System) Collections 617 617 N/A 638 3.4% 659 3.3%

FMS S&E no FTE 0 0 N/A 0 N/A 0 N/A

FMS S&E FTE Costs 617 617 N/A 638 3.4% 659 3.3%

Multi-Year 0 0 N/A 0 N/A 0 N/A

FedDebt Debt Collection 0 0 0.0% 0 0.0% 0 0.0%

FMS S&E no FTE 0 0 N/A 0 N/A 0 N/A

FMS S&E FTE Costs 0 0 N/A 0 N/A 0 N/AMulti-Year 0 0 N/A 0 N/A 0 N/A

Financial Information and Reporting Standardization (FIRST)

Government-wide 

Accounting 3,384 4,107 21.4% 5,792 41.0% 7,056 21.8%

FMS S&E no FTE 838 138 -83.5% 2,309 1573.2% 3,351 45.1%

FMS S&E FTE Costs 2,298 3,367 46.5% 3,399 1.0% 3,705 9.0%

Multi-Year 248 602 N/A 84 N/A 0 N/A

Government-Wide Accounting and Reporting Modernization (GWA)

Government-wide 

Accounting 80,711 15,361 -81.0% 10,094 -34.3% 9,568 -5.2%

FMS S&E no FTE 38,669 3,349 -91.3% 2,250 -32.8% 1,668 -25.9%FMS S&E FTE Costs 29,282 9,460 -67.7% 5,492 -41.9% 5,941 8.2%

Multi-Year 12,760 2,552 N/A 2,352 N/A 1,959 N/A

Internet Payment Platform (IPP) Payments 533 291 0.0% 300 3.1% 309 3.0%

FMS S&E no FTE 0 0 N/A 0 N/A 0 N/A

FMS S&E FTE Costs 533 291 N/A 300 3.1% 309 3.0%

Multi-Year 0 0 N/A 0 N/A 0 N/A

% Change from 

FY06 to FY07

% Change from 

FY07 to FY08

% Change 

from FY08 to

FY09

FMS - 23 
FMS - 24 

4.1 – Summary of IT Resources Table (continued) 

Dollars in Thousands

Information Technology Investments

FY 2008 

Major IT Investments / Funding Source Budget Activity

FY 2006 &

Earlier 

Enacted

FY 2007 

Enacted

Likely 

Enacted

FY 2009 

Requested

FMS S&E FTE Costs 4,104 500 -87.8% 500 0.0% 552 10

Multi-Year 0 0 N/A 0 N/A 0 

PACER Payments 11,134 2,325 -79.1% 2,489 7.1% 2,631 5

FMS S&E no FTE 6,680 1,441 -78.4% 1,578 9.5% 1,693 7

FMS S&E FTE Costs 4,454 884 -80.2% 911 3.1% 938 3Multi-Year 0 0 N/A 0 N/A 0 

Pay.gov Collections 1,560 522 -66.5% 545 4.4% 569 4

FMS S&E no FTE 0 0 N/A 0 N/A 0 

FMS S&E FTE Costs 1,560 522 -66.5% 545 4.4% 569 4Multi-Year 0 0 N/A 0 N/A 0 

Payment Application Modernization (PAM) Payments 12,445 12,776 2.7% 12,697 -0.6% 11,939 -6

FMS S&E no FTE 1,490 985 -33.9% 1,027 4.3% 1,039 1

FMS S&E FTE Costs 10,730 11,566 7.8% 11,445 -1.0% 10,675 -6

Multi-Year 225 225 N/A 225 N/A 225 

Secure Payment System (SPS) Payments 16,815 3,517 -79.1% 3,875 10.2% 3,901 0

FMS S&E no FTE 8,039 1,660 0.0% 1,737 0.0% 1,712 -1FMS S&E FTE Costs 8,776 1,857 0.0% 2,138 0.0% 2,189 2

Multi-Year 0 0 N/A 0 N/A 0 

Treasury Check Information System (TCIS) Payments 5,519 857 -84.5% 836 -2.5% 854 2

FMS S&E no FTE 552 0 N/A 0 N/A 0 

FMS S&E FTE Costs 4,967 857 -82.7% 836 -2.5% 854 2Multi-Year 0 0 N/A 0 N/A 0 

Subtotal, Major IT Investments 288,478 88,048 -69.5% 81,954 -6.9% 82,920 1Non-Major IT Investments 1/ 11,300 4,845 -57.1% 4,893 1.0% 3,789 -22

Infrastructure Investments 2/ 20,056 20,056 0.0% 20,056 0.0% 23,200 15Enterprise Architecture 1,800 1,400 -22.2% 1,400 0.0% 1,370 -2Total IT Investments 321,634 114,349 -64.4% 108,303 -5.3% 111,279 2

% Change from

FY06 to FY07

% Change from 

FY07 to FY08

% Chan

from FY0

FY09

2/ Figures provided for FY 2009 include funding amounts for the Treasury Web Application Infrastructure (TWAI) platform that were not included in previous years.1/ In FY 2009, the number of Non-Majors reporting increased to 14 investments.
4B – Information Technology Strategy 

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

on technology and how it supports FMS’ Strategic Planning Goals. The FMS Strategic 

Plan is a long-range plan that supports the economic policies and mission of the 

Department of the Treasury for payments, collections, government-wide accounting and 

reporting, and collection of delinquent debt. 

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

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

Treasury and OMB's requirements for Capital Planning and Investment Control, and 

Enterprise Architecture. Before projects are started or a major change implemented, 

there is a formal approval process beginning with the Division Information Officers 

(DIO) Council. Each project provides the DIO Council with project business case 

documentation, which describes the project, documents benefits, shows start-up costs, 

full life-cycle costs, other systems impacted, programmatic impact, and platforms that 

will be used. Costs include all project costs including contracts, FTE, hardware, and 

software. The FMS governing bodies, including the DIO Council and Architecture 

Review Board (ARB), review each investment to ensure compliance with FMS’ target 

architecture, use of existing infrastructure, and shared resources (e.g. document imaging 

and Single Sign On). 

At least once a year, each FMS project is presented to the DIO Council. Current cost, 

schedule, and performance goals status for the project is presented. Any project that is 

not within acceptable cost, schedule, and performance goals must provide the DIO 

Council with a project remediation plan detailing the steps it plans to implement to get 

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

DIO Council with quarterly cost, schedule, and performance updates. 

The FMS process includes recommendations by the DIO council for 

approval/disapproval of all IT investments and major enhancements. The FMS 

executive board (EB) must also approve all large scale IT projects and it conducts 

quarterly reviews of all FMS investments with Exhibit 300s. 

FMS - 25 
4.2 – PART Evaluation Table 

PART Name: Debt Collection

Year PARTed: FY 2003

Rating: Effective

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

3. As a result of increased debt revenues, in FY 2008 FMS’ Debt Collection Budget Activity will be fully funded by fee 

revenue.

2. Set interim targets and describe interim actions necessary to achieve the long-term performance measure.

3. Level fund the debt collection program for FY 2005.

1. Develop a more ambitious long-term performance measure.

1. FMS establishes annual performance measures for collections and referrals of debt by agencies. Listed are examples of 

collection tools and initiatives used by FMS to achieve long-term measures:

• Administrative Wage Garnishment (AWG)

• DebtCheck

• Continuous Agency Outreach

• President's Management Agenda (PMA)

• Receivables Reporting

2. A Federal Contractor Tax Compliance Task Force consisting of FMS, IRS, and the Center for Medicare and Medicaid

Services is examining the issue of how best to incorporate CMS payments to Medicare providers into the Federal Payment 

Levy Program.

4. Propose legislation to increase and enhance debt collection opportunities.

4. FMS supports numerous legislative proposals which will enable FMS to significantly enhance our debt collection 

opportunities. Listed are some of the debt collection enhancement proposals for 2007-08: 

 • (26 U.S.C. 6402) Offsets of past-due, legally enforceable state unemployment compensation debts against overpayment. 

This proposal will allow FMS to offset federal tax refunds to collect past-due state unemployment compensation debts.

• (21 U.S.C. 3716) Eliminate the Ten-year period of Offset. This proposal will eliminate the ten-year limitation on the 

collection of delinquent non-tax deferral debts by administrative offset.

• Allow the IRS to issue its due process notice for levy after the levy has been served. 

5. The debt long-term measure will be evaluated and updated as part of FMS' update to its Strategic Plan. For 2007, FMS

has a target of $3.2 billion in collections.

FMS - 26 
PART Name: Collection

Year PARTed: FY 2004

Rating: Effective

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

2. FMS partnered with the State of Illinois to pilot joint Federal and state tax payments through the Electronic Federal Tax 

Payment System (EFTPS). An evaluation is underway to determine whether this pilot can be expanded cost-effectively to

additional states. For Fiscal Year 2007, EFTPS is on track to increase the volume of payments by 8% and the dollar amount 

of payments by 10% over Fiscal Year 2006. 

3. FMS will continue to promote its other electronic collection mechanisms such as: 

• Electronic Check Processing (ECP) System which converts paper checks received at a lockbox to electronic debits or

truncates the checks and processes the images via Check 21. All non-tax lockbox collections will be collected through ECP 

by the end of 2007 and we expect to convert tax lockbox collections by the end of 2009.

• Pay.gov collects money for 99 Federal agencies. FMS will be working with a number of Federal agencies, including the 

Departments of Housing and Urban Development and Education to move their large cash flows to Pay.gov.

• The Paper Check Conversion Over the Counter (PCC OTC) System converts paper checks to electronic debits or truncates

the checks and processes the images via Check 21. PCC OTC supports 32 Federal agencies in the U.S. and overseas. 

• TGAnet, a web-based deposit reporting system for over-the-counter collections, is now capable of supporting activity for

both domestic and international deposits. FMS will continue to convert more agencies and banks to TGAnet over the next 

few years.

4. Operate within budgetary resources. 

2. Provide 2006 funding at the same level as in 2005 (excluding funding received for services provided to other federal 

agencies).

1. FMS has initiated a comprehensive effort to streamline, modernize and improve the processes and systems supporting 

Treasury’s collections and cash management program. This effort will improve financial performance by enabling FMS and 

government agencies to more effectively manage financial transaction information and improve the efficiency of the 

collections information reporting processes.

1. Work with program partners to explore opportunities to better reduce paper-based collections.

PART Name: Payments

Year PARTed: FY 2005

Rating: Effective

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

1. Working with Federal agencies to reduce the number of paper check payments and increasing the number of more

efficient and secure electronic payments. This reflects FMS' efforts to work toward its 2010 goal of 90 percent of all 

payments made electronically.

3. Implemented Go Direct, a nationwide campaign to encourage current Federal check recipients to switch to direct deposit. 

Go Direct has converted one million check recipients to direct deposit since its inception.

1. The program must continue its efforts toward and all electronic treasury.

4. In FY 2007, FMS implemented a pilot program, Direct Express, which is targeted at the un-banked, to disburse benefit

payments through debit cards. 

5. FMS is developing plans entitled Universal Direct Deposit which will require at some future date, that all newly enrolled 

beneficiaries receive payments electronically unless they do not have a bank account. 

2. FMS will continue to promote its electronic payment mechanisms such as Stored Value Card (SVC), a smartcard, similar

to a credit/debit card, using an encrypted computer chip to process "electronic money" stored on the card and the Internet 

Payment Platform (IPP) which provides a centralized electronic invoicing and payment information portal accessible to all 

participants in federal payment transactions: agencies, payment recipients, and FMS.

FMS - 27 
PART Name: Government-wide Accounting and Reporting

Year PARTed: FY 2006

Rating: Moderately Effective

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

3. FMS is taking the following actions to address unreconciled intra-governmental transactions:

• Requiring comprehensive intragovernmental accounting data from agencies on a quarterly basis that will allow FMS to 

provide data to all federal agencies for them to better analyze and reconcile intragovernmental differences.

• Working with the CFO Council and OMB to enforce the business rules for intra-governmental transactions and to organize

the Dispute Resolution Committee.

• Encouraging greater auditor participation by requiring agency auditors to more closely scrutinize intra-governmental out-ofbalance conditions with other agencies.

• Moving forward on the FIRST initiative which is being designed to provide authoritative information contained in Treasury’s 

central accounting system to the agencies to facilitate the reconciliation process for specific intra-governmental transactions. 

1. The program must develop a baseline for its efficiency performance measure. While FMS has unit cost, timeliness, and 

accuracy measures in its internal and external performance reporting that are used to manage for improved efficiency, at the 

time of this PART evaluation, a baseline for the new unit cost measure had yet not been established.

2. More work needs to be done in order to ahieve a clean opinion on the Financial Report of the U.S. Government. 

Improvement is needed on material weakness in the areas of accounting data compilation/consolidation and reconciliation of

intragovernmental reporting differences.

1. FMS has developed a baseline for the efficiency performance measure that measures the unit cost to manage one million 

dollars of cash flow.

2. FMS has two major initiatives which will modernize long standing Federal accounting processes and provide agencies

with methodologies and tools to improve the accuracy and consistency of their financial data:

• The Government-wide Accounting (GWA) Modernization project which will replace existing government-wide accounting 

functions and processes. This project will improve the reliability, usefulness, and timeliness of the government’s financial 

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

and reconciliation burdens by agencies, resulting in significant government-wide savings. It will also improve the budgetary

information being collected from the agencies at the transaction level. 

• The Financial Information and Reporting Standardization (FIRST) initiative integrates budget and financial reports from

Federal Program Agencies. FIRST will improve the consistency of the budgetary and proprietary accounting data recorded 

in agency financial statements and reported to FMS through its trial balance. 

For a complete list of PART results visit the following website: 

http://www.whitehouse.gov/omb/expectmore/all.html

FMS - 28